A popular way to invest your money, for those people cautious about picking stocks or putting too much of their money in one place, are index funds. Index funds are passive funds, as opposed to actively managed mutual funds, whose performances are closely tied to the performance of a given index. Indexes are groups of stocks meant to represent a given market or industry, such as the large technology heavy NASDAQ.

Index funds have gained in popularity due to their relatively low cost (mutual funds often have minimums to get started), and general availability (there are now over 350 different index funds available). They allow you to invest your money in the market with lower risk, because that risk is spread among many companies at once. For more on index funds, click here.

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