There's lot of planning that goes into it. The more specific you can be, the more likely you are to set and achieve reasonable goals. After you have correctly defined your financial goals you need to consider your risk tolerance. Your level of risk tolerance refers to your ability to handle the variability of the future return or loss on your investments. This will in turn help drive the choice of investments ideal for you.
Any investment involves a trade-off between risk and reward.
The higher the reward, the greater the risks and uncertainties. Investors ought to try to factor the risks and returns of different types of investments before making their investment decisions. In contrast, investment in equity produces very uncertain results in the short-term as day to day fluctuation in the stock market can be substantial. Rahul, starting his career at 25, can afford greater risks while investing than 50 year old Madhav who is making an investment plan for retirement. Most of us make the mistake of postponing our investments.