By Adam Shaw Co-presenter of BBC's Cashing In and Working Lunch

Too often people think that investing is a complicated form of magic best left to the professionals who know what they are doing.

There are two misconceptions here. Investing is not magic and professionals often don't know what they are doing.

If you are clever enough to have saved a bit of money then the chances are you are clever enough to decide how to invest it.

Of course you may not know the specific place to put your nest egg, but you don't need to.

Professional investors and advisers usually make no more than educated guesses about the best place for your money

It's like driving a car: once you know how to drive you don't have to memorise the road map of the UK to get around. You concentrate on driving carefully and you buy a map to help plan your route.

The same is true for investing. All you have to do is learn some basic principles and then go to a good guide who can tell you where to find the sorts of investments you want.

The professional investors and advisers usually make no more than educated guesses about the best place for your money.

Would you trust this man with your money?

Professional fund managers have been making losses along with the rest of the market.

They have no crystal ball and many would argue that they don't even have a very good pair of spectacles.

To stop you being trapped by myopic advisers and feelings that you better leave investments alone, here are some simple guidelines:

• If it sounds too good to be true, it probably is.
• If it can't be explained to you in an understandable way, that could be because either the person doing the explaining also doesn't truly understand it - or you are being sold something they don't want you to understand.
• Don't be afraid to ask the simple sounding question. It's often the most difficult to answer and the most revealing question to pose.
• Before investing it is important to decide exactly what you want to achieve from your investment and how best to do that.
• Never follow any rules slavishly, use a good dollop of common sense.

Financial advisers

Since we pay most financial advisers by commission, they have to sell you something to make any money.

It might therefore be better to think of those commission advisers as salesmen/women or at best financial brokers.

There is absolutely nothing wrong with this but it's best to be aware of the thinking of the person the other side of the desk.

Whatever happens, make sure you know how "independent" the advice you are getting is

Financial advisers should be used just like you use a map.

They are there to guide you to the places you want to get to, not tell you where you should be going or push you down any road you don't feel comfortable with.

Like a map, they are a source of information not a guru dispensing words of wisdom.

Financial advisers tied to a bank or other financial company can usually only sell a limited range of products. Independent advisers can sell a much broader range of products.

Unless you have good reason not to, it's therefore usually best to approach an Independent Financial Adviser (IFA). There is a link to the IFA Promotion website on the right hand side of this page.

The industry is currently undergoing some big changes and the distinction between an Independent and Tied agent may soon change.

Whatever happens, make sure you know how "independent" the advice you are getting is, before you sit down with the adviser.

The four Rs

Just as the 3 Rs form the basis of your school education, the 4 Rs form the basis of your investment education.

Returns

I know you want to make a million at least and you'd like it tomorrow.

Working out what sort of returns you want is not as simple as saying lots, and then being done with it.

You have to think in realistic terms about whether you need income or growth.

Income generating investments or savings produce a flow of money.

The bigger the return, the bigger the risk you usually have to take

For example, a bank account produces an income stream because it pays regular interest. You can withdraw the income and spend it on your wild life style.

The terrible truth is that the income is likely to be very low. Interest rates are not high at the moment and as a result bank accounts pay pitiful amounts of money.

However they do have the advantage of being safe, fairly predictable and they protect your savings pot while allowing you to profit from it at the same time.

If you don't need the income now but would like to put the money away and hope it grows into something bigger in a few years, you should think of capital growth investments.

Many shares do not provide much in the form of income or dividends but do offer the prospect of being much more valuable in the future.

Shares of course are very risky and that reveals one of the hard truths of investing.

The bigger the return, the bigger the risk you usually have to take. If someone is offering you a wonderful investment, the chances are that there is a considerable risk attached to it.

Risk

The balance is clear - the higher the risk, then the greater chance of reward; the lower the risk, the lower the expectation of reward.

What you probably want is a mixture of low risk and high risk.

You wouldn't or at least shouldn't bet everything you have on the lottery, but you take a risk with a small percentage of your income on a bet that your lottery numbers might come up.

The same is true of your investing.

Don't bet everything on a risky venture, but if you have a good portion of safe savings then it's worth considering some riskier ones in the hope that they pay off with big returns.

Research

Unfortunately there isn't much alternative to doing some of your own research.

While advisers can help show you some of the options it's not a good idea to place your complete faith in them. I once went to three different independent financial advisers looking for advice about which pension I should buy.

Don't place absolute trust in anyone or anything you read, including this.

I told each of the three advisers exactly the same things about myself.

They all went away and thought very hard about the problem and came back with three very firm but very different suggestions.

At the very least that showed me there wasn't a single answer to financial questions.

I had the feeling that they might help me avoid a terrible pension but when it came to choosing the best pension, they were little better equipped than I was.

Of course you have to take advice, but don't place absolute trust in anyone or anything you read, including this.

Do what research you can given that you have other more interesting things to do and try and use the advice you receive and the research you do to come to the best possible solution to your questions and problems.