Investing is fun, exciting, at times frustrating, but it should never be fatal for your finances. In order to guarantee that your investment career starts off on the right foot, make sure you have a plan before putting your money to work. Just as everything else in life, successful investing is a journey, and it is you who have a clear map of where you want to travel. Regardless of whether you are investing in stocks, bonds, property, or commodities, ask yourself a few questions before allocating your money to a particular investment.

Only buy what you can afford

The first question you should ask yourself is How much can I afford? You'd probably be able to afford most shares that are publicly traded, an exception might be Berkshire Hathaway's A shares currently trading above $ 217,650 – that is per share. The question is less what company can you afford to buy shares in, but how much money can you afford to allocate to a certain investment.

Take for example properties. In order to become a property investor you will usually have to invest a significant amount – hundreds of thousands or even millions. For stock or bond investments the financial commitment is significantly less. You could invest as little as a thousand euros, dollars, or pounds.

The important question to ask yourself: can I live without the amount invested or would I be forced to potentially sell at an unfavorable price to stay financially afloat?

Before allocating any money to an investment be sure that you do not need the amount for the next few years (ideally you are able to live without ever having to touch that money; remember the money that invest is akin to your employees, your workers who speed up your journey to financial independence, to the relaxing shores of wealth).

Know your time horizon

Another question you should be sure to be able to answer before investing is: What is my time horizon? Before allocating money to an investment you should be sure of the time span. Do you to invest your money for six months, one year, half a decade, or until retirement? Your time horizon should determine the amount of money that you are willing to invest and the type of investment.

If your plan is to save for retirement and you are lucky enough to have twenty, thirty, or even forty years, a property might be a good option, a promising start up, or a blue chip that is paying steady dividends.

If your time horizon is long enough, bonds may also be an alternative. However, bonds that offer an acceptable return in today's low interest environment are scarcer than the famous needle in the haystack.

Have a clear goal

Why are you investing money? Is it to build wealth, to buy a property, to save for retirement, to finance, for instance, a holiday? The ideal scenario would be to cover all these areas and it underlines the importance of defining your investment goal.

With retirement potentially many years away, you can take a lot more risk than if you wanted to finance a holiday in a few months. However, that does not mean that risk-taking is limited to long-term goals. In fact, a few years ago I took a gamble on Barclays Plc. It was in the midst of the financial crisis and a friend and I attended a friend's birthday party in Iceland. The timing to take a short-term risk felt more than perfect. Bank shares had been beaten down in the course of the collapse of the financial system. I thus decided to take a bet and see if I could finance the weekend with gains from an upward swing in Barclay's share price. Within two weeks I had made enough to cover the flight and leisure money. The weekend was a blast and was ever more so sweetened by it having been financed by a small bet on beaten down shares.

If it hadn't worked out a contingency plan was at hand: I would simply have held on to the shares until the return was satisfactory. The goal and thus the strategy, however, was not to become a long-term investor in the firm. Luckily the price jumped significantly within days and the profits financed a memorable weekend trip with good friends in one of the most amazing countries on earth.

Contrary to that rare speculative stint, most my investments are long-term years and unless something significant was to occur will remain in my portfolio. The goal is to be invested long-term and enjoy steady price increases paired with stable, regular dividend payments.

Do you want to earn money through dividends or price gains

This brings us to our last point: Dividends or share price gains? Similarly rental income or flipping property. Before investing money you should be clear about how you want to increase your wealth. Certainly, both, regular income and value increases are favorable, but before allocating money you should have determined your focus. Do you want to keep the investment over a long time and collect dividend or rental income or see an instant jump in value of your investment? While the first is a slow buying-selling cycle, the latter is a quick buying-selling cycle. One is a financial marathon, whilst the other a financial sprint.

Before allocating any money, ensure you can answer these questions for yourself. Being sure about your focus and strategy will save you a lot of stress if the value of your investment slightly fluctuates, and will help you decide when to cash in.