For some people, the idea of having an investment to sounds like something that requires you to have a big bag of money somewhere before you can even think of it.

Don't mind anyone who goes with this kind of belief. Investing your money is actually one major way you can grow your money and build wealth.

You only need to invest your money in a legitimate business and understand how the investment works.

However, to do this, you need to ask yourself certain questions to have a clear understanding of the investment before you put your money into it.

1. How does the investment work?

Before you put your money into any investment, you really need to understand how the investment works. You should understand it well enough to explain it to other people who may be interested in it.

2. What are your investment goals?

You also need to establish what your investment goals are before committing your money to it.  Are you looking for safety, income or growth from this investment? Or both growth and income?

3. What are the risks of the investment?

Don't be afraid to take risks because taking a risk, in itself is the first step to financial success. However, while you're aware of this, you have to identify the risks involved in the investment and be sure you're comfortable with it.

4. What are your expectations on the investment?

No one invests their money in any business without having any expectations. Your expectations on any investment you're putting your money into has to be realistic. otherwise, you may shoot yourself in the foot.

5. How long do you plan to invest

It is also very important you consider the life-span of the investment. Is it going to be a short, medium or long-term investment?

Make sure you establish all these before your money goes into that business you're planning to invest in.