How to Invest Money Wisely: A Guide to the First Steps to Take in Order Be a Smart Investor

It is a huge mistake that many people make thinking that only the rich can invest and make money. You don't have to be rich at all to make investments. There are so many options that it is possible for anyone to learn how to invest money wisely. It all starts with a small amount of extra money. You don't need to play on the stock market or even buy a business. You can simply open a CD account, a money market account or even a savings account in a bank.

This is the first tip to follow to invest smartly: start doing it as soon as you have extra money at your disposal. The younger you are, the more you can wait for the money to start to grow. If you invest in stocks, the more you have to wait for the market to move in a direction that is favourable to you.

Another smart and essential thing to do is to build savings for emergencies and short-term goals. Choose an online bank that offers a high exchange rate and create a savings account or buy a CD for a period of 6 months to 2 years. Why keep money hidden in your home in case of an emergency when you can keep it in an account that will earn you interest. Even if it's only $500, you'll end up getting more money than when you started.

How to judiciously put your money away from banks

If you decide to opt for the CD option, just make sure you keep the money for the agreed term so you don't have to pay a penalty fee for an early withdrawal. In an emergency, most banks will allow you to write a certain number of cheques per month (usually about 6) or make payments online (up to 6).

Want to know how to invest your money wisely in equities? It depends on age: you need to base these investments on your horizon, and your horizon is the time you need to keep your portfolio before you start spending it. A general rule of order is to subtract your current age of 100 and then use that figure as a percentage of shares to own in your retirement portfolio. If you are 35 years old, your investment portfolio should contain about 65% shares.

Of course, actions are not for everyone. There are other investment options, such as real estate and foreign currency trading. To really learn more about how to invest wisely, it's good to have the right tools and resources at your disposal. Motley Fool is a leader in investment selection and education. Sign up today for the latest securities recommendations, start-up actions, community and investment resources, and more.