Pre-Investing Checklist

Max out your 401k

Ensures your long term retirement financial position is in place

Pay off High Interest Debt

This is just you losing money each month, that could be better saved or invested, so pay down debt asap

Have a Fully Funded Emergency Fund

Protects you in case of emergencies and shocks, which can put you in the red. 3-6 months of income.

Have Cash for Investing

Define a pot of cash, that you don’t need for 3-5 years, this is typically a reasonable period to invest and hold.

Define Your Risk Profile

How much are you willing to lose if the investment goes sour? Can you afford to lose the entire amount you’ve invested? Remember a loss or profit is typically only realised in markets when you sell, so if you can afford to hold your investments when the markets are down means you’ll hopefully be fine long term.

State your Investment Reasons

Why do you want to invest, make a list of all the reasons why?

State your Investment Goals

How much do you want to invest, what expected returns would you prefer

Loss Plan

Make a list of all the things you’ll do and won’t do when the market drops, so when it does happen you’re not reacting irrationally, but have a playbook of what to do

State Your Interests

What sort of things do you value? Where do you want to invest, and why? Do you want to invest for profit, or are you interested in investing in products that you like?