It’s long been the impression that the most important question you can ask in your financial journey is “Where should I invest my money?” And yes, this is an important question. After all, smart investments can mean the difference between financial success and failure. But what about the questions that must come before that, the important questions about personal finance that play a key role in reaching – and protecting – your full financial potential?

The Wrong Question Can Lose the Race

Today, personal finance has almost become a rat race of sorts. We’re all out here scrambling for retirement, chasing an elusive number that we THINK we’re going to need to survive once our income stops. But what’s your number? How do you know what the cost of living will be 15, 20, 30 years down the road? How do you know what life changes you may face?

Here’s the ugly truth: No one, not financial advisor extraordinaire or your next door neighbor, knows the answer to this question.

We all fear the unknown. And retirement is one of the biggest unknowns we will ever face. So, we’ve become consumed with where to invest our money. Many investors chase returns, flip flopping their investment strategy based on the “next big thing,” and try to time the markets for when to get in and get out. Some investors have become so fearful of the market that they pull out at the slightest sign of volatility.

We’re obsessed with asking “Where should I invest my money?” It’s the first and the last thing on our mind throughout our financial journey.

But when you make an investment decision, it’s more than just putting your money in a portfolio. This is one of the most complex decisions you will make; it has tax implications, estate planning implications and liquidity implications, just to name a few.

Four Questions You Should Ask About Personal Finance

Making one investment decision sends a ripple through your entire financial life. This is why it’s essential to address that ripple effect before asking where your money should be invested.

Here are four important questions that you should ask about personal finance when making an investment decision:

1. How is the account titled? The way in which your account is crucial. Having the wrong title can mean negative consequences for the health of your estate. For example, say you’re opening a joint investment account with your spouse. If you title the account as Joint Tenants With Rights of Survivorship, it means that you each own 50% of the asset. Ideal, but it also lacks in credit protection since they can go after assets in your name – i.e. 50% of your joint investment account. If you title the account as Joint Tenants by Entirety, you each own 100% of the asset. This offers a much higher level of credit protection, as the asset is owned in both of your names. Creditors can’t go after those assets. How is your account titled? A simple, but powerful question.

2. What are the tax implications? If you’re investing in a qualified account, this is pretty cut and dry. You’ll either pay tax on the money now, or tax on the money when you pull it out. But when it comes to unqualified accounts, investors often forget the importance of tax management. In a recent study by U.S. Trust, more than half of the high net worth investors surveyed said that minimizing the impact of taxes was more important than pursuing a higher return. Sure, you can get a 12% return, but what’s that investment costing you in tax? After all, your net pay – how much you’re making in returns after taxes – is what counts. Poor tax management adds up over the long haul. It’s one of the easiest ways for investors to forfeit large portions of their annual gains.

3. Who will be the beneficiaries of your investment accounts? This brings us back to estate planning implications. Determining who your assets will pass to should something happen to you is key in personal finance. You have several ways of doing this, but for the sake of this article we will keep it simple. Every investment account will give you the opportunity to specifically stipulate your primary and contingent beneficiaries. Just be sure you update them regularly – your beneficiary information trumps what’s stated in your will. You can also set up a trust to hold your assets, titling your investment accounts accordingly. This offers maximum asset protection, and ensures that your assets will be passed on according to your specific wishes.

4. Do you even have enough core liquidity to begin investing? In its simplest form, investing impacts your rainy day fund, your ability to save liquid dollars. It may not make that big of a difference at first, but several investment accounts later your dollar stretches less and less. Once you invest your money, it’s not meant to be touched – whether for retirement or not. It’s meant to be invested, to grow and produce a return. You have to have a place to turn to when life happens and you need money NOW. This is why it’s so critical to have at least six months of core liquidity built up before you start investing. If there’s one thing that I’ve learned in this business, it’s that life can and will happen. You have to be able to react effectively if and when it does, or you may end up risking your financial success.

Why Does it Matter to You?

The world of personal finance isn’t just about picking the right investments. It’s about building a foundation centered on one goal: Protecting your life’s work. Our financial lives are so much more complex than where we put our money. That’s just one decision that affects several areas of our financial life. When you only ask one question, you fail to evaluate the critical factors that can impact your financial success.

Reaching your full financial potential requires more than chasing investment returns. You have to continually optimize and protect your complete financial position, giving yourself the ability to effectively react to whatever life may throw at you.