Like any investment, high yield investment programs can be your best friend and worst enemy, depending on how you do it. The key is understanding your financial limits.

A sound investment policy is one that allows you the financial wherewithal to invest, but doesn’t end up strapping you for cash or, worse, bankrupting you. By keeping careful track of how much you invest, you can make sure that your investments don’t overcome you. There are all sorts of formulas to determine the limit of how much you should invest, but it comes down to how much of your income is left over when you have paid for bills. As long as you don’t spend more than, you should be okay.

A better way of looking at it is to look at your income in terms of a business. Total up all of your outgoing money, and then allow for incidentals (morning coffee, gas for the car, even snacks and video rentals). Basically, try to allow yourself $5-$20 per day ($150-$600 per month) for the small things in life, while putting some away for a rainy day (usually 10%; it may not seem like much, but you need something in the bank, and most people have a problem not spending their money). If you need to, make sure that you have two accounts, putting almost all your money in one account, and the rest in a savings account.

The remainder you can invest. When you invest, the best word of advice you can get is to forget the money. Investing the money means that you are taking a risk; there is a possibility, however slim, that you won’t see the money ever again, or that you may lose some of your capital. This is acceptable risk. If you can’t deal with it, then you probably aren’t cut out for investing.

The second is that you shouldn’t put all of your eggs in one basket. It may sound trite, but if one investment goes south, and it’s the only one you’ve invested in, then you’ve lost all of your investments. When you invest, some investments will go up when others go down; by having multiple baskets you not only cancel out the downs while maintaining a constant profit from your various investments. One investment just doesn’t do you as well as several.

Do that, and your investments can be your best friends. On the other hand, if you spend more than you can afford, an invest more than you can afford to lose, you will end up losing money each month as you try to shore up a sinking ship. If losing money is something you simply can’t do, then you will suffer a lot; letting it go is the best way (if it comes back, then hug it, and then send it back out again). If you only have one basket, then when it’s gone, it’s gone, and that money won’t do you any good.

The last bit of advice: Ride the ups and down like a roller coaster and enjoy. It really is better in the long run.