Best Ways to Invest While in College
Investing is a necessary skill that must be acquired by anyone who aspires to accumulate wealth over time, and the earlier it's learned, the better. It usually takes a student's initiative to pay keen attention to investing because it's never given priority in colleges.
After college, most of the graduates seek employment and never bother to invest as it demands knowledge acquisition and some money to start with. There's both managed and self-directed management so you need to consider investing in something worthwhile.
1. Investing in stocks
There's a need to open an investment account (online or local office) on which saved money can be remitted on an agreed portfolio. A broker is then involved who will guide on which stocks/shares or equities to buy. In case a broker is expensive, consider using a robo-advisor, a system that offers low-cost investment management.
Stocks keep fluctuating and value for the investment is realized over time. Imperative to know is the difference between stocks and stock mutual funds. The stock mutual funds allow you to buy many small shares in different companies, unlike the individual stocks. Stock investment demands that you focus on the long term.
It is a very important decision for your future to start investing while studying at college. To learn how to do it correctly, you need to spend a lot of time before making key financial decisions. Students usually lack that level of finance education so you should not hesitate to use the specialized writing services by EduBirdie. The professional do your research paper and save you time to research how trading, investing and currency matters work in the finance sector.
2. Investing in bonds
There are two basic ways to benefit from bonds: Hold them for a given time and be paid the interest or sell them at a higher price than when you acquired them. Investing in bond funds is a good option as the bond fund takes money from different investors and assigns it to a fund manager
Through a broker, the college student may consider lending their money to a government or company, which in turn gives IOU. The money will accumulate a guaranteed interest over a specified period, after which it can be redeemed. It's one of the best ways to overcome the student debt issue and lead a better life during and after college.
3. Fixing your money on an account
This should be considered, especially when the student has zero appetites for risk. The interests on fixed deposits are compounded quarterly, half-yearly, or yearly, and the more the frequency of compounding, the higher the interest each succeeding year.
The people with fixed deposit accounts in a bank enjoy the loan benefit as the fixed deposit acts as the security. The money is put on a fixed account for a timeline at an interest rate; however, the interest rate is often lower than the inflation rate and the money keeps depreciating over time.
4. Start a side hustle
Starting a side business is a good option as it gives the hands-on experience, networks that can be leveraged post-college to catapult the business to greater heights when you've more time and money. Choose a hustle that coincides with your strength and passion. An option could be starting an online business utilizing either B2B or B2C business models.
As a student, look for various options like babysitting, work in a restaurant, provide online classes or be a content writer. The options are endless. Understanding the tastes and shopping trends of the students is important to quickly pivot when need be.
5. Crowdfunding
ItÂ’s a good idea to also consider fundraising money from like-minded fellows to buy a property that fetches money for the group or invests in a venture with good returns. There are several crowdfunding websites to get you started as a student. It's advised to invest not more than 5% of your portfolio and invest the investment you do not need in five years.
Also, the money put in crowdfunding must be spread in more than one venture to dilute the risk. Before committing your money, do due diligence on the company, and understand its business model and investment terms.
Conclusion
Investing while in college is something every student ought to be told and guided. Learning to manage the risk associated with investment early is in itself an investment sparing the large amounts of money that would be better later in life had you not learned risk mitigation like investment diversification like putting 60% in stocks and 40% in bonds.
Author Bio:
James Collins works for an NGO with operations in South America, where it works on improving the education system for underprivileged students. He also works as a part-time essay and research paper writer for an online academic writing agency. In his free time, he reads novels, tries DIY woodworking and listens to retro music.