retirement investingYou don’t need to be wealthy to be a successful investor. No matter what your objective, whether you’re investing for retirement or funding your child’s education, you can meet your money-saving goals and achieve financial success.

Everyone yearns for stability and financial security, but very few people take the steps required to achieve it. Fortunately, it isn’t too late to start. Follow these five rules for successful investing:

1. Have a plan.

Decide what your investment goals are. Consider goals such as buying a home or car; starting a family; funding education expenses for yourself or your children; retiring; or paying for sudden emergencies, periods of unemployment, disability, or long-term care.

Once you determine your goals, prioritize them and set a time frame in which each goal should be met. If you don’t plan for a specific goal, it will be harder to come up with the cash when the time arises.

2. Determine your net worth.

It’s important that you figure out how much money you have. To do so, add up your total income and the value of your assets.

Once you know how much you have, figure out what you owe. Create a list of your financial obligations, such as loans, credit cards, or your mortgage balance. Subtract your obligations from your income and assets to give you a better idea of what you are really worth.

3. Don’t get overwhelmed.

Start slow and steady, increasing over time the amount of money you invest. Start out investing a small portion of your income, and slowly increase your deposits by 1 percent to 3 percent.

Savings accounts can be a smart and stable way to save money, but they are not adequate tools for funding a retirement or saving for college—especially with today’s low interest rates. Choose investment strategies that will start making money for you right away.

4. Take advantage of free money.

If your employer offers 401(k) matching or any other type of matching program for a retirement plan, take advantage of it. Your employer is offering free money that will make retirement more comfortable in the future.

In addition, be sure that you don’t forget about your retirement plan if you leave the company in the future. Too many employees leave their 401(k) plans with their old employers and stop making contributions. When you leave a company and seek employment elsewhere, take your 401(k) with you, roll it over to another retirement account, or talk to a financial planner about alternative uses for the retirement plan.

5. Understand the risks and the fine print.

The best way to earn favorable returns is to become educated about investment products and weigh the risks, so be sure that you understand every product you are considering.

Promises of high returns are accompanied by higher risks. Risks shouldn’t scare you away from certain products, but becoming educated will help you find the right risk that is complementary to both your short-term and long-term goals.

Once you make the decision to start investing, don’t sit on it. Get started right away on your investment strategy, and meet with a financial planner to discuss your options.

Jeff Rose is a Certified Financial Planner and Iraqi combat veteran. He blogs at Good Financial Cents, Soldier of Finance and Life Insurance By Jeff.