1. Have preset goals

Investing your money is a serious business and deserves a well thought out plan. While saving money is always a good idea, you should also know what you are saving money for, and how much you will need to meet that goal. Usual financial goals could include saving enough to buy a home, or planning for investments to supplement your pension, or even having ready access to a certain amount of money in case of medical emergencies. The goals must be set before you can save money for them.

2. Invest first then play

If you clear all your bills before you set aside some amount to invest, you will never have any money left over. What you need to do in a very disciplined manner is to invest regularly in a couple of options and then use the remaining money for your regular expenditures. That way you will always have enough to invest and will work out the difference in your current lifestyle. Skipping a movie a month is a small price to pay for a good investment portfolio.

3. Spread it out over different heads

Just like putting all your eggs in a single basket is ill advised, your investment strategy should also not concentrate only on a single investment option. There are some savings options that you will always find easier to invest in. They are like your comfort zone and if you are not careful you may over invest in an area that does not offer you the best possible returns. Or you may risk much more by investing in a single company’s stocks. Use a commodity trading company after conducting diligent research. That way a single crash in the financial world won’t clean you out completely.

4. Understand your investment

If you are paying a portfolio manager to handle your investments, it is even more important for you to ask what he is doing with your money. You must always understand what you are investing in and the possible risks that you are taking. Yes it is not the most entertaining of subject matters, but financial investments work much better for you if you know exactly what you are investing in. So break out that portfolio and get a gleaning of what every single investment line stands for.

5. Rebalance your portfolio every year

Just as your needs change each year, the focus of your investments may also need to change each year. If you are investing in mutual funds, stocks, or commodities, take time out once a year to see if they are the best performing ones in the field. If they are doing well, leave them alone. If you feel that others are offering better opportunities go ahead and make the change. By simply being aware of what is going on in the market you will be a wiser investor.

6. Pay off loans as fast as you can

A loan is simply making money for the creditor. So you need to ensure that you pay no more interest than is due. If you can collect an annual corpus through wise investing to pre-pay portions of your loans, it is actually a very wise investment in your future.

7. Trust your gut

Though you may not be the best financial wizard in town, you must also trust your own instinct when it comes to taking up investment plans. Just because it sounds good when your broker is hard selling something, is no reason to invest in it. Take a look for yourself. Ask others for their opinion and always trust your gut before making an investment decision.

Author's Bio: 

Sarika Periwal writes personal finance and better living articles. Connect with her on Twitter or Google+.