6 Questions to Ask Before Making Significant Investment Decisions

"Do I fully understand how this investment actually works?"

This is the question I always ask myself before investing a meaningful amount of money. It sounds basic, but it's surprisingly powerful—and often overlooked. I've learned that if I can't explain the investment clearly in my own words, I have no business putting my money into it.

Before I move forward, I make sure I understand how the investment makes money, where the risks are, and how I might lose. If I'm working with a financial advisor or broker, I press for clarity—asking for real-life scenarios, examples of past performance, and a breakdown of the fee structure. I also consider timing and liquidity: Can I access my funds if needed? Are there exit penalties?

This approach protects me from hype and pressure tactics. If something sounds too good to be true—or if the explanation requires mental gymnastics—that's a red flag. I'd rather miss out on a complex "opportunity" than get trapped in something I don't fully grasp.

Asking this question has helped me refine a personal investing rule: never confuse complexity with value. The best investments, in my experience, are the ones I truly understand. Clarity doesn't just reduce risk—it builds confidence and conviction in every decision I make.

One question I always ask before making a significant investment—whether personally or professionally—is: "Am I willing to lose this money?" As a CFO and a conservative investor, this isn't about expecting failure; it's about practicing disciplined risk management.

Personally, I only invest funds I'm comfortable parting with—after essential needs and discretionary spending are budgeted. Any excess is thoughtfully allocated into investment vehicles that align with my risk tolerance and long-term goals. This mindset helps me stay rational, calm, and focused on sustainable returns, rather than being swayed by hype or short-term gains.

On the organizational side, this same question helps filter decisions through the lens of strategic risk appetite and liquidity thresholds. It prompts deeper analysis: Is the potential return truly worth the downside? Do we have safeguards in place? Are we staying aligned with our long-term value creation goals?

By preparing for the worst-case scenario, I ensure we only pursue investments where the risk is understood, the potential is clear, and the downside is manageable. It's a simple but powerful way to keep both personal and corporate investments grounded in reality.

Before making a significant investment, I always ask: "Would I still commit if the payoff took three times longer than forecasted?" This forces me to gut-check conviction over optimism.

In 2022, we faced this question with a seven-figure commitment to sourcing antique stone from a retired European estate network. It was beautiful and rare, but logistically complex. Everyone projected a 12-month return cycle. I modeled 36 months, including port delays, language barriers, and rebuilding aged supply relationships.

It paid off by month 30, and now that collection anchors our high-ticket custom installations in the Hamptons and Napa. Slower, yes. Smarter, absolutely. This question filters hype from strategy, and that's where real confidence comes from.

Before I make an investment--whether it's personal or for my business--there's one question I always come back to:

What's on the horizon?

I don't have a crystal ball, but I do believe you can get a strong sense of what's ahead by staying thoughtfully tuned in. That means looking for patterns, shifts, and early signals from a wide range of sources, like trade publications, market analysts, industry leaders, clients, and peers.

This kind of awareness gives me insight into what's coming, for good and bad. Maybe there's a regulation change on the way, or a tech trend that's starting to reshape how businesses hire. Maybe a slowdown is brewing under the surface, or maybe there's momentum building in a sector we've only just started watching. These are the signals that help me evaluate risk and position myself accordingly. If I see a better opportunity coming, I might hold back and wait. If I sense turbulence ahead, I can prepare for it. And if I believe strong growth is around the corner, I can lean in with confidence.

In short, one of the best ways to make a more informed choice is not just asking, "Is this right for right now?" but also, "Will it still be right tomorrow?"

I always ask, "Will this investment still make sense if Southern California has three years without major storms?" This question forces us to evaluate decisions based on baseline business needs rather than peak demand scenarios. When considering new equipment purchases or facility expansion, this mindset has saved us from overextending during boom periods that inevitably slow down. For example, we chose to lease rather than buy our most expensive equipment because the lease payments work even during slow years, while ownership costs would strain cash flow. This conservative approach has kept us profitable through multiple economic cycles.

Before making a significant investment, I always ask myself, "Would I be comfortable owning this property if the market shifted tomorrow?" That question forces me to look beyond quick profits and focus on fundamentals like location, renovation costs, and community value—lessons I learned both in real estate and on the football field. It helps me avoid emotional decisions and ensures I'm building something sustainable for my business and my community.