How to Invest For High Returns & Avoid Losing Your Original Investment

How Can I Get the Highest Return While Minimizing Risk?
This is the $64 million dollar question—the holy grail of investing. Every investor seeks to maximize his return while minimizing risk (mainly the risk of losing his original investment, but also the risk of looking dumb by making unwise and foolish investments). Generally speaking, the higher the return, the higher the risk. "He who bears the risk reaps the reward." This is true in mortgage banking, small business, the financial markets, personal relationships, and many other areas of life.

The corollary, of course, is that the risk-bearer must also suffer the consequences if there is no reward, but rather a penalty (loss of money, time, reputation, etc.). If you want to decrease your risk, realize that you will be limited (usually) to investments that generate lower returns.
There are, however, some exceptions to the "risk-return correlation." Risk can be lessened by skill, knowledge, or access to opportunities & resources that the majority of investors do not have access to.

The First Rule of Investing
The first rule of investing is that you should never invest money that you can't afford to lose. The money you invest should not significantly change your lifestyle, if it were lost. If you invest with "scared money"—money that you can't afford to lose—it may affect your judgment and cause you to make poor financial decisions. People who invest with money they can't afford to lose usually make emotional decisions (based on fear of loss) that negatively affect their investment returns.

How Do I Determine the Best Investments?
The best investments for your particular situation will depend on several factors: your age, your risk tolerance, and the amount of time you want to spend managing your investments.

Your Age
If you're young (20's, 30's), then you can afford to take more financial risks, because you have more time to recover from potential losses. If you're older (40's, 50's, 60's), then you will generally make more conservative investments, since you have less time to recover from large financial losses.