We’ve all heard how important it is to diversify our income — from offering passive courses and templates to adding DIY and done-for-you services, and new products - the income options are endless. Investing is another option to help earn income while you pursue your passion.

Before you begin investing, keep in mind that investments can go down as well as up. Investing can sometimes feel like a game of chance, but unlike going to a casino, where the odds are not in your favor, in investment, you have a pretty good chance of making a significant return on your money.

It’s pertinent to seek the advice of a financial advisor and do your research. This is not a game or quick fix. Here, we look at some tips to help you make the most out of your investment.

What is your appetite for risk?

It is a good idea to figure out what kind of investor you are before you start investing. Do you enjoy taking risks, or are you more comfortable with assets that may not provide as high a return as riskier ones but are more likely to provide consistent returns?

At this point, you should think about your objectives. For example, if you are considering retirement planning, you should think about how much time you have for your investments to grow. If you combine this with investments that will increase quickly – which are normally much riskier – you must be confident about how much you can afford to lose.

This is especially true if you wish to pursue riskier investments - this is where doing your due diligence is critical. Of course, you can accomplish a lot of the research yourself, but this is not the place to skimp and try the DIY route. Hiring a professional advisor is an investment of its own. Everyone has to start somewhere, so do your research online before you get started. Fundamental Global is a great place for advice and data as well.

How much should you invest?

It all relies on your financial objectives and personal circumstances.

Remember that it is always a good idea to have at least three months' worth of earnings in a savings account before you invest. And, you should be willing to leave your money in your investment for at least five years to allow it to grow.

Some investment sites now allow you to invest with as little as a few dollars. As a result, you may wish to start with little amounts at first to test out the features before gradually adding more of your money as time goes on. You do not have to be wealthy to invest.

Should you invest a lump sum or regular savings?

Investing a lump sum immediately puts your money to work for you and compounds any gains from the start. However, if the market falls, the entire amount will be at risk.

If you drip-feed a specific amount over time, you can level out the market's highs and lows. In other words, when prices are high, it will buy fewer shares, and when prices are low, it will buy more. The disadvantage is that you may miss out on the full benefit of market rises in the early years because you have a much lower sum of money invested, to begin with.

This is where an advisor can provide specific advice for your situation and help you create a long-term plan that meets your goals.

When did you start investing? What advice do you have for small business owners who want to get serious about investing? Leave your comments below!

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