The idea of investing your money is awesome. Having your money make more money for you is appealing, isn’t it? We’ll be the first to agree, but we’ll only remind you that some things are too good to be true.

Investing your money is serious business. You worked hard for that money, so don’t take anyone’s word as law before making an investment. Make some research, ask questions, and don’t ignore those niggling feelings of doubt. Here are some questions to ask before investing your money:

How does it work?

Ponzi schemes usually can never explain this bit satisfactorily. At this stage, they just gloss over some very important things, and draw your attention to the amount you could be making instead. Ask questions till you know how it works and are satisfied that it’s sustainable. Don’t invest in something you don’t understand.

What’s the risk level?

Sometimes, people lose money on investments not because it was a fluke, but it was possible that they didn’t pay attention to the fact that theirs was a high investment. Some high risk investments return the investor’s capital in the event of loss, while many others do not offer this guarantee. It’s a good idea to find out before investing your money instead of after doing so.

Is it too good to be true?

This is a great question to ask, because if you think it’s too good to be true, then it probably is. Those ‘investment opportunities’ offering you some really high interest rates in the shortest possible time are downright suspicious. Do some more digging.

How much will you earn?

This is another great question to ask before investing your money, so you can determine if it’s worth your time or not.

What’s the investment tenor?

Some investments have a longer maturity date than others, while some are shorter. You might prefer either one based on your personal money goals, so don’t neglect this question.