How old am I? An investor in their 20s has different needs from an investor in their 50s. Young investors have time to recoup any losses before they stop working, but older investors cannot afford to lose the principal they need for retirement. Thus young investors can afford to put money in investments with more risk.

When do I plan to retire? Each year you can rely on wages for your immediate needs is another year you don't have to worry about your investments generating income to pay for groceries. The longer you work, the more risk you can take, and the greater potential for investment returns.

How willing am I to postpone immediate gratification? The more money you put into your investing program at an earlier age, the more money you will have when you get older. On the other hand, that means you have less money to spend on luxuries you can enjoy while you're still young.

What is my tolerance for risk? Greater risk brings potentially higher returns, but only you can decide how much risk you want in your investment program. Many stocks will suffer significant price declines at some point. If you can't sleep at night because your stocks have declined in value, you shouldn't own stocks.

How active an investor do I want to be? Some investors are active and enjoy monitoring and tinkering with their investments. Others are passive and want as little involvement with their investments as possible. You need to recognize the kind of investor you are. Active investors must recognize that lots of trading burns up commission dollars. Passive investors must understand that they still need to review their investments regularly.

Get Started Now. The most important investment principle is to begin investing as soon as you can. But pay off any debt you have with high interest rates first. It doesn't make sense to invest in the hope of making a 10% return if the interest rate on your credit card balance is 20%.

Invest for the long-term. Because of compounding, the longer you invest, the higher your returns will be. Investing for the long-term also tends to minimize risk, since assets that temporarily decline in value have time to recover.

Diversify your investments. Different types of assets (stocks, bonds) perform better or worse under different economic conditions. You want to buy various kinds of assets for your portfolio (the investments you hold) to minimize your risk and ensure stable returns. The process of deciding how much money to put into different types of assets is known as asset allocation.

Research before you invest. You should always understand the risks and rewards of an investment before buying it.

Seek help if you need it. If you don't have the time or inclination to research investments on your own, or if your financial situation is complex, seek out an investment professional to help you.

Adopt the right attitude. The successful investor is disciplined - once you decide on an investment program, stick with it. And be patient: you may need to tweak your investments from time to time, but radical changes usually are not necessary. Finally, recognize that investing is an affair of the mind, not of the heart. Rational thinking, not emotions or biases, should rule your decision-making.

Stay away from get-rich-quick schemes. If an investment sounds too good to be true, it is. There are sharp operators in the investment world, and fraud is a distinct possibility. Often a little research can save you a bundle, not to mention much embarrassment.