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Investing is something that will keep evolving throughout your life. It’s good to start as early as you can, and even if you haven’t started, it doesn’t matter how old you are because you can always start from today. In order to be a successful investor, you first need to make sure your spending habits are firm and fixed so that you can continuously contribute to your investments.

Once you have saved up a decent amount of money to begin, you can start deciding how you want to invest that money. You need to get clear on what your needs are and how much risk you’re willing to take. You can divide this question into two parts: do you want money for growth or for income. That way you can decide if you want to put money into investments that will grow or that will produce income. This will depend on your goals. If you are investing for retirement then you don’t need to produce an income right now. If you are investing to go on a vacation, then you do.

You  will always have to tolerate some risk when you invest, but you can understand how much risk to tolerate depending on how you tolerate price changes in your investments and how that will balance with your rate of return goal. If you are planning to keep a specific investment for a long period of time, you can tolerate a higher level of risk because any losses can be made up, but if you want to save money for a car then you will not be able to sustain as much risk and need more liquidity on your investment.

Investment decisions are personal, but there are some strategies everyone can follow.

Always make sure you have a cash reserve in any CD or savings account so you are always safe in case of emergencies (liquidity). If you can keep a long investment, then you can also have a part of your portfolio in stocks so your savings don’t become low in value. Also try to visit a financial advisor at least yearly so you can review your investments and keep up to date on any issues.

Also always be well-informed on the taxable status of your investment because you need that information when you are putting together or going through a particular investment approach. A tax advisor can address any questions you have.

Your investing decisions will be based on where you are in life, and what life stage you are in. If you are in your 40s, investing for retirement will be important to you. If you have only just gotten your first proper job, then you will need to start a savings account and let that put up a cash store. If you get a higher salary, you can increase your cash store. When you get married, if your spouse also works, then you need to establish new investments after combining incomes. If you just had a kid, your focus will be on growing life insurance and opening a college fund. When you reach your 50s or retirement age, you will want to augment retirement savings contributions. When you finally retire, you should review your income after retirement and decide on investments that will afford returns and allow for increase in assets to fund your future.

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