The world of finance is one that can be confusing and complex. The huge amount of information available can lead to a feeling of being overwhelmed. It need not. There are some basic rules that can set you on the way to success.

Your choices when it comes to investing are staggering. For the conservative, there are government bonds. For the super aggressive, there are commodities. For most, mutual funds and stocks make a perfect solution.

After a while, it can be easy to wonder not only who is correct, but what you should do with your personal financial situation. Ultimately, the answer is you can make money in nearly every area of finance, but only if you follow some basic rules.

Time is on your side. Besides being a good lyric, this statement is true when it comes to investing. Time has a tremendous cumulative effect. Oddly, you never hear the financial gurus talk about it. This is probably because they cannot sell you time.

Time is powerful because the more of it you have, the more your money can work for you. As the years pass, you can incorporate gains into your portfolio and have them make money for you as well.

Consider the rule of seven in investing. Simply put, any investment will double in ten years if it earns an average return of seven percent a year. Alternatively, it will double in seven years if it earns an average return of ten percent.

While this is a very simple scenario, it is a fundamental rule followed by everyone. It also shows the power of time because it is a simple example of how reinvesting your gain makes you a ton of money in the long run.

Generalities are great and all, but what about real examples. Okay, assume you invest two grand each year in an individual retirement account for thirty years. With a 6.9 annual return, you end up with $185,000. Not bad, eh?

Now we can see the power of time. Assume we start investing later. All the figures are the same, but we actually put in $4,000 each year. We end up with a total of just under $100,000. Why? Because our gains did not have time to grow as well.

In both of these scenarios, you contributed the same amount of money. With the same $60,000 contribution, you ended up with entirely different amounts. Why? The power of time. The longer investment period returned the better final numbers.

What do these examples tell us? The rule is simple. It is not how much you invest, but how often that is the key. If you put $100 away each month, that is $1,200 a year. When you hit retirement age, that is one nice nest egg.