Invest Money Wisely at Any Age: 7 Simple Principles

The COVID-19 pandemic and economic crisis have triggered extreme stock market volatility. This week, Wall Street also saw the stock price for GameStop, a video game retailer, skyrocket far above what many people think it's worth. 

Seeing huge daily spikes and drops in stocks and the overall market may leave you wondering what to do with your investments or whether you should be investing in the first place.

You'll learn how to achieve long-term financial goals, such as retirement or paying for a child's college, even if you don't have much money to invest.

Fortunately, the answer to wise investing hasn't changed. In fact, the market turmoil and GameStop stock frenzy prove that using simple, tried-and-true investment strategies is the best way for investors to get through any crisis. When you have a strong investment strategy, you'll never panic or wonder if you're doing the right things with your money, no matter what the news headlines say.

This post will review seven simple principles to grow your net worth no matter if you're just starting to invest or you've been at it for decades. You'll learn how to achieve long-term financial goals, such as retirement or paying for a child's college, even if you don't have much money to invest. I'll include an explainer on why everyone has been talking about GameStop and if it matters to average investors.

7 simple principles to invest money wisely

Follow these seven simple principles to invest money for healthy returns without taking too much risk.

1. Separate savings from investments

Though we tend to use the terms saving and investing interchangeably, they're not the same thing. Savings is cash you keep on hand for short-term planned purchases and unexpected emergencies. It should be liquid so you can tap it instantly if you lose your job or have a considerable expense. Make it a separate bucket of money you accumulate as a safety net.

In The Right Amount of Emergency Money to Keep in Cash, I explain how to build your emergency savings, so you're always prepared for what happens in your financial life. 

Also consider saving money for big purchases that you want to make within a year or two, such as a new car or home. Keeping the money in a bank savings...

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