Despite the tough economy, now is a great time to invest with stocks low and most people selling rather than buying. The best way to invest money, however, can be tricky to determine and it depends on a lot of personal factors and where you are in your life. This article will analyze some potential situations and help you figure out your best investment method.

The first thing you need to consider is age. If you are a young investor, first of all congratulations, investing in the stock market is a very wise move (despite the recent press), as stocks have outperformed all other investment methods over the past half decade. Being a young investor allows you some special advantages as you have the ability to invest in more risky stocks because you have more time to earn back any losses.

If you are an older investor you need to take your current retirement situation in to consideration. If you are planning on retiring in the near future you need to be sure to invest in something much less risky than stocks, preferably secure bonds, treasury bills or bonds, money market investments or something that virtually guarantees you income, even if it only a small percentage return.

Something else you should think about is the amount of your paycheck against how much you need for your expenses like housing, car payments, food, utilities, etc. If you don’t have much extra each month but can afford to save a little money, that’s great, but you want to be smart about what you invest in. Richer investors can make back big losses much more easily than the typical middle class investor and can therefore be more risky in them.

Lastly, take a look in your wallet and tell me how many credit cards you have. Do they have large balances? Before you invest a single dime in investments, pay off your credit cards completely. The reason for this is that normally credit card interest rates are much higher than your return on investment, and it would therefore make very little sense to spend the money anywhere but paying off your debt.