Money expert Becky O’Connor of PensionBee reveals the most useful – and profitable – real world sums.

Compound growth, which generates massive gains the longer you save and invest, is lesson number one… so what are the others?

3. Understand your risk profile

Risk is an inherent part of investing, but it’s a tough balance. Take too much risk, and you might find yourself racking up some painful investing lessons.

But taking too little (or no risk in the case of cash) is a risky strategy in itself. It could have a hugely detrimental effect on your finances in the future because you might not reach your goals.

And our risk appetite isn’t static. It can change as our circumstances change so needs reviewing regularly.

4. Diversify your investments

This reduces the risk of any one stock in the portfolio hurting the overall performance.

But diversification doesn’t just mean investing in different stocks. It also means having exposure to different sectors, assets, and regions.

5. Rebalance your investments

Trimming the excesses and redirecting funds into underperforming assets ensures that your risk-return equilibrium remains intact.

This calculated approach of buying low and selling high has the potential to bolster long-term returns.

Whether nearing retirement or sprinting towards a shorter investment horizon, rebalancing grants the opportunity to recalibrate allocations to achieve the desired financial destination.

6. Review costs and fees

Investors cannot control the market, but they can control how much they pay to invest. Understand the costs associated with your investments – not least the platform charge.

7. Drip feed your investments

A good and proven way of lowering your investment risk is by investing small amounts regularly. Most often, investors do this by drip-feeding investments monthly to help smooth out the inevitable bumps in the market.

The advantage is that you also buy fewer shares when prices are high and more when prices are low – a process known as pound-cost averaging.

8. Set clear goals

Define your financial goals and time horizon before making investment decisions. Avoid making impulsive decisions based on short-term market fluctuations. Stick to your investment strategy.