As a college student, you probably are busy with classes, projects, and trying to meet deadlines to really bother too much about what comes after college. But you should. After college, you will need to start thinking about moving out of your parents’ house and settling down. To help with this, you will need to have some money, but unless you have an inheritance waiting for you, this might not be easy. Some students choose to invest while in college to help alleviate this stress. This article discusses eight ways you too can invest while in college.
As a student, college is a great time for investing. You are young and have many years ahead of you. The decisions you make now might play a significant role in how things turn out in the future. To help you with this, here are eight ways you can invest as a college student.
Many people find it difficult to save, either because of how low their income is or because of their spending habits. While in college, chances are that you don’t have too many financial responsibilities, so this is the best time to start building the saving habit. One way to start is by creating a budget and following it. You should write down your monthly expenses and your irregular expenses — you might have to make some small cutbacks. You should set aside the money you’ll be investing for the future and for emergencies, such as buying papers for sale at GrabMyEssay — they offer some of the best essays on the internet.
If you rely solely on willpower, it might be hard to maintain a saving habit over a long period. As much as possible, you should try and automate this process. If you receive your salary on a regular basis, you might want to automate the transfer of a certain percentage into a personal savings account. You can also speak to your employer and ask if he can split your payment between your savings and checking account. Aside from these two options, you can also choose to use saving apps such as Acorns to automate your savings process.
Some savers don’t consider bank products (such as high-yield savings account) as investments, but this is a mistake. Not only are they often the safer option to store your money, but high-yielding savings account also offer rates higher than a normal savings account. The condition is that you keep your money with them for a specified period of time. For instance, if you have the money you would be using for your tuition the next year, you can deposit it in a high-yield savings account till that date.
If you would like to get into investing, it is easier these days. There are low-cost brokers such as Fidelity Investment that offer free stocks and educational tools you can use for research. If you prefer a free option, you can consider Robinhood. It should be noted that Robinhood also has a paid version (Robinhood Gold, $5 a month) that offers Morningstar research. One of the main selling points of Robinhood is its easy-to-use platform, so as a college student you’re likely to appreciate it.
As a college student, you are likely still in your 20s, and so investing in stocks can be a good option for you. With stocks come a high degree of volatility (high risk), but as time progresses they tend to offer good returns. Considering the fact you won’t be retiring anytime soon, you can decide to invest and watch your money increase over the years. To invest in stocks, you need resilience, and these tools can help you build one for yourself — they will help prepare you for leadership roles in your future careers.
When investing in stocks, you should avoid picking stocks, and most investors except for a select few lose money through this method. It is much better if you invest in index funds, such as the S&P 500 index fund. One major advantage of index funds is that it charges relatively low maintenance fees, and on average they do better than actively managed stocks.
You might want to consider a Robo-advisor if picking stocks yourself or working with index funds isn’t for you. A Robo-advisor buys stocks for you based on how aggressive you want to be with your investments and the timeframe you are considering. You can start with as little as $20. Some Robo-advisors charge a percentage (usually .25%) for their services, while others waive it for small accounts.
Another option is investing in your side hustle. One great thing about starting a side hustle as a college student is that with time it can change to a full-fledged business. Some students while in college have started small businesses aimed that providing common services such as beverages, laundry, and others to fellow students. Don’t be afraid to try something new.
As a young adult, you’re in the position to easily make changes to your life. Building the habit to invest safely and consistently, or just set money aside, can play a major role down the road. Working on a saving habit early will help you succeed where many have failed and can allow you to find your own way in life without having to financially rely on other people.