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Albert Einstein has often referred to compounding as the 8th wonder of the world. Indeed, the power of compounding is astonishing. The only problem is that at the beginning you won't see much of a reward. Yet this is the key to winning in the stock market: over the long term, you will make a lot of money because time is on your side. This article is not about get-rich-quick schemes involving the stock market. It's about setting up your plan so that you position yourself to be sitting pretty a couple of decades from now. Let's get started.

1. Set your goal. Take your personal factors into consideration to come up with the type of portfolio that best suits you. Then analyze every potential investment by thinking about what you want out of it and whether or not it fits into your overall investment plan. Just like a sports coach, have your X's and O's ready, don't react to the market. This will save you a lot of headaches and money.

2. Come up with a strategy. Stock market investing tactics and strategies are a dime a dozen. Any Google search or trip to your local library or bookstore will present you with a dizzying array of choices. Faced with such a wide range of options, you're better off deciding on one strategy that you're most comfortable with and that fits your style, and going with it. Leave yourself open to the possibility of making a minor change here and there but have those changes be the exception rather than the norm.

3. Weigh probable risks. It is absolutely essential that you highlight the risks your investment will bring up with a realistic view, not an overly optimistic one. The management system you choose must bring effectiveness and practicality to the table, so that you can bring the risk of losing money to a minimum, even if the investment turns out to be a dud. Also, it's important to complete this step before looking into what kind of profit the planned investment can bring you. If you reverse the order, you run the risk of being so excited over the money you might be making that you could overlook some serious risks.

4. Think about profit potential. One of the hardest parts about investing is knowing when to cash out once you're riding a winner. You should have a set threshold where you sell off enough to at least recoup your initial investment, and then ride the profits as long as you can. Know when and how to get out.

5. Look for other options. You can look around and see if there are any comparable (or better) investments in therms of risk, profit potential, or simplicity of management. This little extra step can simplify a lot of things for you, not to mention make you some extra money in the long run.

6. Scale the mountain. This step goes hand in hand with devising a strategy from the get-go. Every investment you make will have its unique challenges to optimize rewards and minimize losses. Anticipating them gives you a leg up that will allow you to achieve that exact goal.

7. Draw up your plan B. Your plan B should dictate what you do when things don't go exactly as planned (in either direction). You shouldn't have to be deciding on the fly when it's time to get out of an investment, it should all be laid out and you should be responding to certain criteria, not to panic or elation. This helps you avoid losing on potential returns or better yet, helps you avoid losing more money than you've already sunken in a losing investment.

8. Choose the right investments. Investing takes time, so for one last time look over your new project as a whole. Now you've got all the pieces to see the puzzle as if it was completed, and can determine if this investment is really worth your time and effort. And if it isn't, there's no need to dwell on it: starting a new plan is certainly less painful than losing a couple thousand dollars because of an ill-advised investment plan.

9. Reach for the stars. After you've made the decision to put money into such and such investment, it's time to stop over-analyzing and start taking action. As it turns out, even if you picked the absolute worse investment, you won't have lost everything you own because you did your homework and set limits to your losses. Your game plan, as long as it is sound, will produce solid returns in the long run if you stick to it.

10. Debrief. At least twice a year, take a look at your plan and how you've fared in your investments. If somehow you bombed and lost a lot of money, try to figure out what went wrong so that those mistakes don't keep on dogging your investing efforts. Above all, don't give up; if you do, then you won't have any lessons to draw from those mistakes. Keep tweaking things until you find your personal success formula. Once you've cleared that hurdle, you're set.