What to Do Before Making Investment Decisions

Originally Published: January 3, 2026

While the basic habits around your personal finances based on budgeting, paying off your debt, and starting a savings account are important, the way that you can really make your money grow is by making some wise investments which pay off. However, you need to be wary before you take any decisions which are going to impact your finances in a big way – particularly if you have never entered that particular marketplace before.

There are plenty of different areas in which you can channel your money including the stock market, property, businesses, and even more unusual investments like gold and classic cars. The first thing that you need to do is make sure that you have thoroughly researched the sector in which you are planning on investing. After all, you don’t want to be left floundering around and unsure of what your next move should be. So, here are some of the main things to consider before making any big investment decisions.

Draw Your Financial Roadmap

To start off with, you need to take an honest and serious look at your own financial situation and your ambitions for the future. This is doubly important if you have never made a financial plan in the past. Next up, you need to have a set of goals figured out. These may be quite generalised to start off with before you head further down the path. You also need to evaluate your own tolerance when it comes to taking risks. There are no guarantees when it comes to making investments of any kind, but you are much more likely to enjoy success if you understand the facts about investment and follow this up with a clear and coherent plan. The rewards for taking risk are the potential for a bigger financial gain, but you may not be comfortable putting your finances in such an unstable position. 

Create and Maintain an Emergency Fund

Even if you are not making any big investment decisions in the near future, it is still a wise choice to channel some of your money into an emergency fund. Should things take an unexpected downturn, it is there as a safety net to give you time to get back on your feet. The minimum that you should have in this account is three months worth of living expenses – but it is worth upping this amount to six months if you want to put yourself in a particularly secure situation. 

Pay Off High Interest Credit Card Debt

If you are weighing up your investment decisions while still carrying around a big amount of high interest credit card debt, now is the time to reevaluate your priorities. There are no investment strategies which pay off in quite the same way as clearing your credit card debt or any other high interest loans which you may have taken out in the past. Otherwise, this will continue to escalate, and you won’t be able to achieve the level of financial freedom which you are trying to attain.

Consider a Mix of Investments

‘Don’t put all your eggs in one basket’ is a decent adage to follow in the world of finances. If you only make a single investment and it fails, you have lost everything. However, if you invest in a number of different areas at once, you have a much greater chance of making a success of at least one of them. Not only may you be able to limit your losses, you may also be able to reduce the fluctuations of investment returns. Be careful about investing a lot of money in your employer’s stock or any other individual stock. If the stock takes a sudden downturn, you could find yourself losing everything. Of course, this doesn’t mean that you have to make a host of investments straight away. But, over time, you could consider this diversification approach to maximise your odds of success.

Do Your Reading and Research

There are plenty of resources out there which can help you out with your investments including articles, blogs, books, TV shows and podcasts. And thanks to the internet, a lot of these are available for free. It makes sense that you take in as much of this information as you can before making any major decisions. For example, you may want to capitalise on the growing trend for wellness by investing in saunas, so check out https://www.ana-white.com/. Not only can you find out what to do, you can also find out what not to do based on the mistakes that people have made in the past. However, when you are looking for a source of information, go to the trustworthy and reliable areas based on reputation and personal recommendation if possible. There are a lot of people promising you the opportunity to get rich quickly whom you need to be wary of.

Speak to the Experts

Reading and research will only take you so far as you don’t have the opportunity to speak to the experts directly. You could either speak to someone you know who has already had experience in making investments or hire a professional to give you the advice that you are looking for. Whichever option you take, you should make sure to take the chance to ask as many questions as possible. This is your opportunity to get clarification on any doubts which have been nagging you, as well as the reassurances that you are seeking to ensure that you are comfortable with the decisions that you are making.

Adopt a Long-Term Perspective

You need to go into your venture with an attitude of acceptance that most investments are not going to pay off in the short-term. Adopting this long-term approach is one of the biggest challenges which many investors face, but it is an essential obstacle to overcome in your own mind. Large short-term profits are often dangled in front of new investors, but they rarely turn out to be what they seem. For example, if you invest in property, you are going to have to spend a long time paying off the mortgage and dealing with other maintenance costs before you start to see the regular benefit of the rent on a monthly basis.

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