Investing success comes from making more right decisions than wrong over a long period of time, and our 10 personal finance tips will set you up for success.

You’ll never know what type of financial situation you may end up with in the future, so it’s important to make smart money decisions now. Here are 10 personal finance tips we think will set you up for success.

1. Create a strategy. If there is one piece of personal finance advice you should immediately implement, it’s to have a disciplined plan for saving during your working years. This, above all things, can set you up for optimal investment gains.

2. Be skeptical. No matter how attractive they may seem, always take a skeptical approach to investment products that add an extra percentage point or more to your yearly costs. Make sure the expense is worth it.

3. Don’t take advice that comes from advisors or institutions that sell insurance or other fee-heavy investment/financial products. The financial software they use just naturally spits out investment plans that involve the kind of sometimes-hidden costs in point 2.

4. Only buy bonds or other fixed-return investments if interest rates are high enough to be attractive—and they aren’t right now. Don’t buy bonds just to “cut your risk.” After all, our three-part investment advice already takes a lot of the long-term risk out of investing. Adding bonds to the mix will simply cut the volatility of your portfolio value in any given year. But it does so at the cost of increasing your risk of loss to inflation.

5. Only buy the insurance you need. There is no magic investment growth hormone in insurance products, so our investment advice is that you should only buy what you need. For most people, this mostly comes down to term life insurance for the main breadwinners in the family unit.

6. Before you buy disability or income-replacement insurance, read all the fine print closely. Just as important, assume the insurance company will decide borderline cases in its own favour, since that’s often what happens. Viewed in that light, you won’t like what you find. That’s why they put it in the fine print.

6. Utilize registered savings plans early. In contrast, our investment advice is that you should take advantage as early as is practical of all registered savings plans—RRSPs, TFSAs, etc. RESPs are particularly attractive, due to the government grants that come with them.

7. Put off buying a house until you can afford one that you’re likely to want to live in for at least 10 years, if not 20 or more. Real-estate commissions and other costs of selling one home and buying another add up to a lot of money. Worse, it comes out of your after-tax income. You’ll be far better off financially if you instead keep that money invested at, say, 6% to 8%, all the more if you do so on a tax-deferred basis.

8. Put off marriage and children until you find a potential mate you think you’ll want to stay with as long as you live. Of course, you may change your mind—nearly half of all marriages end in divorce. Speaking of personal finance advice, before beginning a family, recognize the economic cost of divorce. Supporting two households for a decade or two takes a huge bite out of your retirement savings. The current dollars themselves are a major drain. But you lose far more by missing out on an opportunity for decades of compound investment growth.

9. Understand compounding, It’s how your personal wealth grows. Compound interest is earning interest on interest. Over time, your long term investments will earn more and more money from the effects of compound interest. Compound interest is what makes investing a worthwhile pursuit.

Compound interest is applied to equity investments like stocks, as well as to fixed-return, interest-paying investments like bonds. When you earn a return on past investment returns (including dividends), the value of your investment can multiply. Instead of rising at a steady rate, the number of dollars in your portfolio will grow at an accelerating rate.

It’s very important to keep an eye on investments or expense fees that affect the amount of interest you earn. Even 1% a year can be huge drain on your portfolio.

10. Seek dividends in your investments. If you’re new to investing, one tip we share often is to invest in companies that have been paying a dividend for 5 or more years. Dividends are typically cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically these dividends are paid quarterly, although they may be paid annually or even monthly as well. Canadian citizens who own shares in Canadian stocks that pay dividends will also benefit from a special tax break they may be eligible to receive.

The personal finance advice above should give you a strong starting point for investing. It’s important to understand that wealth isn’t made by making rash investment decisions. Wealth is built over decades.

What other personal finance advice would you add to this list? Share your thoughts and experience with us in the comments.