You don't need to know finance to get started

Conversations about investing usually come with words like assets, returns, liquidity, diversification and risk. It's easy to think you first have to become an expert.

But learning about investing doesn't start with memorizing terms: it starts with understanding what you're considering and knowing which questions to ask.

Identify what you're acquiring or where your money is going. Is it a stake in a project, an asset, a financial instrument or some other structure? What rights do you have, and which documents formalize your participation?

Don't stop at the brand name: look at the structure and its conditions.

Try to understand the business model. What activity generates income? What would have to happen for there to be a return? Which costs, obligations or conditions affect the outcome?

A projection is not a promise. Ask what assumptions support it and what happens if results come in below expectations.

Every investment involves uncertainty. Risks can relate to the project's performance, demand, costs, operations, the market, the legal structure or the ability to sell your stake.

A serious explanation also lays out the relevant risks and helps you understand them.

This question is about liquidity. Some investments let you sell or withdraw with relative ease; others require waiting, finding a buyer or meeting specific conditions.

Don't assume you'll be able to exit whenever you want: check timelines, restrictions and costs.

Ask about fees, administrative costs, applicable taxes, minimum amounts and any condition that could affect the outcome.

Also check who manages the project, what each party is responsible for and what happens if circumstances change.

Look for documents, figures, contracts, track records and explanations you can verify. Identify who provides the information and which parts you can cross-check.

Don't make a decision based only on a social post, a testimonial or a sales conversation. If something isn't clear, ask for a written answer and, when appropriate, seek independent advice.

You don't need technical language to ask important questions. You can ask for a term to be explained with an example, request time to read the documents or compare the opportunity with other alternatives.

Due diligence means reviewing the relevant information before deciding. It doesn't eliminate risk, but it helps you decide with more context.

Not every opportunity will be right for every person. Your goal, time horizon, financial situation and ability to absorb losses matter as much as the project's features.

Before making any decision, review the project's information, conditions and risks. Knowing how an opportunity works is an essential part of evaluating it.

If you landed straight on this article, these are the earlier steps: