People starting out usually begin with “what should I buy?” It is a fair question, but it comes too early. The answers to a few simpler questions shape everything that follows, and they are easier to settle before any money is at stake.

1. Do you have a cushion?

Investments go up and down, and you don’t get to choose when you need cash. If your car breaks down in a month when the market has fallen, you don’t want to sell investments at a loss to pay for it. That is why a common rule of thumb is to keep several months of essential expenses in a savings account before you invest. It isn’t exciting money, and it isn’t supposed to be.

2. Are you paying expensive interest?

If you carry credit card debt or a high-interest loan, every amount you pay off earns you that interest rate, guaranteed. Very few investments can promise anything like it. Clearing expensive debt first is usually the better use of the same money.

3. When will you need this money?

This question shapes your choices more than any other. Money for a goal ten or twenty years away can ride out bad years in the stock market. Money for a deposit on a flat in two years probably can’t, because there may not be time to recover from a fall. Many people end up with more than one pot, one for the long term and one for nearer goals, each invested differently.

4. What will you do when it falls?

At some point it will. A common way people lose money in stocks is not by choosing the wrong fund but by selling after a big drop and missing the recovery. It helps to decide now, while things are calm, what you will do then. “Nothing” is often a good answer. So is “keep adding the same amount each month.”

One way to find out how you would really feel is to try it first with illustrative amounts. Harust’s practice portfolio lets you build a mix and see how it is split, what it costs, and how adding money would change it, with nothing at risk.

Then choose

Once these are settled, choosing what to buy gets much simpler. For many beginners it comes down to a few broad, low-cost funds and a split between stocks and bonds that fits the answers above. Harust’s fund research is a good place to start comparing them.