Four Questions to Ask Before Investing Your Money

questions to ask yourself before investing your money

We’re witnessing some of the highest inflation rates since the 1980s. And the harsh truth is that most of our money is actively losing its value if it’s not being utilized. 

So, if you’re exploring investment opportunities, you might notice that you’re feeling confused. After all, how do you acquire assets or stock that’ll deliver? We’ve seen the crypto bubble burst. We’re watching some of the biggest tech companies fire up to 50% of their workforce. And over the past couple of years, we’ve seen many people lose their life savings due to poor investment decisions. 

How do you stop yourself from joining their ranks? Well, the solution could be simple: asking the right questions.

If you know what information to ask for when approaching the investment process, you can ensure that you’re putting your hard-earned money where it’ll multiply. Plus, you’ll ensure that you’re making financial decisions that align with your values and have the potential to bring you wealth in the coming years. 

So, if you’re ready to begin, here are the questions to ask yourself before investing your hard-earned money.

What Are Your Goals?

The first thing you need to define as you begin your investment journey is the type of returns you want to achieve.

  • Some people invest for safety, creating a backup income or a retirement fund they can rely on once they’ve left the active part of the workforce. 
  • Others do so to generate income, which can be either passive or active and requires varying degrees of time spent trading. 
  • Finally, some entrepreneurs invest because they want a challenge or growth. They want to be part of an organization (or grow their existing business by acquiring assets). They contribute to their newly acquired companies financially and practically, making this the most hands-on method of investing.

Once you’ve identified the type of model that works for you, you can go on and ask yourself the next three questions. All are geared toward helping you find the ideal fit for your specific needs and interests.

business goals

How Much Involvement Are You OK With?

Once you’ve defined your investment goals, it’s time to get into the specifics of your next venture. Before determining whether an investment opportunity is the right choice, there’s another key question you need to ask.

How much time (and effort) are you willing to invest in addition to money?

With some forms of investing, you’re committing to doing the bare minimum. And although these opportunities may yield excellent returns in the long run, they won’t make you rich overnight. On the other hand, an investment that relies on you acquiring a business (an ecommerce store, for example), running and optimizing it for a year, then selling it at a profit necessitates a far more hands-on approach.

The truth is, working on making something better is a highly fulfilling journey. But it requires a huge amount of effort and, in some cases, a lot of commitment, which you might not be ready for. If you know that’s the case, the best choice is to look at passive investment opportunities. These will allow you to keep up the practice without sacrificing more than a couple of hours per week.

Are You Aware of the Risk Factors?

There’s no such thing as a bulletproof investment. 

Even if you invest in well established stocks, you might see some losses, which is to be expected. After all, the market is volatile, and any occurrence, anywhere in the world, can affect your investment portfolio. Of course, in the long run, you’re likely to profit. However, you will have to wait a couple of decades for that to happen. (And diversify. And exit at the right moment).

On the other hand, if you seek more exciting investment opportunities, like crypto or forex, be prepared for a significantly higher level of risk. In these cases, something as banal as a Tweet can make prices soar or drop. That means you’ll need steel willpower to not sell at a loss and be informed enough to know when to cut your losses.

If you know that staying level in times of crisis is not your forte, the best thing you can do is be exceptionally well-informed. Go safe (even if it means waiting longer to see returns), and consider getting sound advice from a financial advisor.

Do You Care About Organizational Values and Structure?

Lastly, consider this: more and more consumers are making buying decisions based on ESG metrics. And some investors are even choosing to invest in funds that support green and socially-responsible businesses, making financial decisions based on their values.

So, as you decide how to choose the next addition to your portfolio, don’t hesitate to consider what your action will mean in the long run.

Does this mean that you should only buy stocks from green companies? Or that you need to seek out the most exciting tech innovators promising to change the world for the better? Or put your money towards bonds that will guarantee the best returns? 

Unfortunately, there’s no universal answer. But remember this: making investment decisions that align with your personal values and goals will help you feel better about your impact on the world. Even if it’s absolutely minute.

Final Thoughts

There you have it, the four questions to ask yourself before you make an investment decision. 

Whether you’re looking at buying stocks, preparing to listen to a sales pitch for a new brand, or exploring ways to make a passive income, the four queries in this article will help you make the best decision for yourself. Moreover, they’ll allow you to get not just a great ROI but a whole lot of satisfaction out of your journey too.

This guest post was authored by Sarah Kaminski

Sarah Kaminski is a life enjoyer, positivity seeker, and a curiosity enthusiast. She is passionate about an eco-friendly lifestyle and adores her cats. She is an avid reader who loves to travel when time allows.


Ms. Career Girl strives to provide valuable insights you can use. To see more from our columnists and guest authors, check these outOr subscribe to our weekly email featuring our latest articles. We’re also present on Medium!

Ms. Career Girl

Ms. Career Girl was started in 2008 to help ambitious young professional women figure out who they are, what they want and how to get it.