Many of you are probably excited about the prospects of investing, but one of the most important aspects of successful investing involves the steps you need to take before you actually invest.

In order to get the most from the money you save, consider investing only after you have completed the following steps:

Step 1: Think Long-term

The first step a successful investor should take is to learn what it means to invest. Many young people feel that investing is similar to gambling or playing the lottery.

While it's true that some investors gain or lose huge amounts of money in a short period of time, the majority of successful investors realize that investing consistently over the long-term is the best way to ensure yourself financial security.

Time is the most powerful asset when it comes to investing and if you aren't willing to leave your money in the market for at least 10 years, you've got to change your perspective on investing. You have to accept the fact that investing is a long-term process, not a short-term gamble. Once you accept this, you're ready for the next step.

Step 2: Pay off all your debts

You shouldn't consider investing if you're in debt. It's always a better idea to pay off your debts before you invest even a penny in the stock market. By paying off credit card balances, for example, you practically garauntee a 15%-22% return on your money. Why? Because this is the interest rate you would have payed out of pocket by keeping a balance.

Other forms of debt include financial aid, car payments and bank loans. Credit cards seem to be the biggest problem young investors face on the road to financial stability. My advice is to either get rid of those credit cards or use them only as a convenience and pay off the balnace every month. It may be hard to do, but it'll be one of the best financial decisions you'll ever make.

Many college students wonder if it's a good idea to use their student loans for investing. Don't even think about it. Even though the interest rate on student loans are generally low, it's better to pay off the loan and get rid of the interest expense rather than trying to make gains in an unpredictable market. You don't want to end up in a situation where you lose the capital on your loan and have to keep paying interest on credit you don't have anymore.

Step 3: Make sure you are insured properly

Insurance isn't something that most young investor's think about which can be a huge mistake. Think about it, what good is it to invest your hard-earned money just to see it taken away as soon as you have a car accident in which you don't have adequate insurance?

You MUST have proper insurance in place before starting to invest. This includes adequate auto insurance, homeowners insurance (If you own your own home), health, and disability insurance (If you're the main provider for your family). Many young investors are still covered by their parent's insurance policy, so check to make sure that it's adequete.

The more income you generate, the more you will need the protection insurance provides. Investing your money without adequete insurance is like riding a motorcycle without a helmet. You may never need it, but if you do, you'll be glad you had it!

Step 4: Set up an Emergency Fund

Most financial planners suggest that you have approximately 6 month's salary saved up in a liquid account such as checkings, savings, or money market. This means that if you make $25,000 a year, you should have $12,250 that you can get to fairly quickly. Let's face it, this isn't very realistic. Very few of us can actually save this much for emergency and very few actually do.

But you never know when an emergency may occur. You may lose your job, or worse yet, have a family member fall ill. You will need an emergency fund to live off of unitil you can get back on your feet.

In some types of emergencies, such as fire, waiting periods to receive insurance benefits can sometimes last a couple of weeks. You're going to need an emergency fund to help you through this waiting period.

Different investors need to set up different levels of emergency funds. Most young investors don't need to save as much as a person who is head of a household with two kids in college.

Perhaps one of the greatest benefits of an Emergency Fund is that it helps prevent you from withdrawing out of your retirement accounts, thus preventing withdrawl penalties.