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College Guide When Making An Investment
If you have some extra cash because you’ve been working while studying in college, we are proud of you. We understand that juggling work and studies could be very hard. But your money should not only be saved. A better proposal is for you to invest it.
Ok, that might sound scary for some. And that’s normal. What we can do to help you is to provide tips on how college students could invest their money.
You Have To Start Now
The fact is, the earlier you start investing, the better. That’s because your money has more time to grow. Here’s a quick illustration.
To reach $1M, you need to invest $175 per month if you are 18 years old. On the other hand, if you are to wait until you are 21, then you need to shell out $231 per month. Now, can you see the big difference?
Gone are the days that you only have to sit with an investment advisor to plan your investments. Today, there are many apps to use. There’s M1 Finance and Robinhood. Instead of spending hours doing crazy videos, why don’t you try to understand how the market works?
Look For Low-Risk CD
When we say CD, this refers to Certificate of Deposit. It is a bank product which is often overlooked by most people. With CDs, you will be paid with preset rate of interest. But in order to do so, you have to commit your money to the bank for a certain period. It’s a good option if you don’t need the money just yet.
Make It A Habit Every Month
You don’t need to be a millionaire if you wish to invest. In fact, you can start it with just $20 to $30 per month. What is important is that you form a habit of investing as early as now. Before you know it, it’s already embedded in your system.
Read As Much Books As You Can
Apart from reading your lectures from school, you must also have the initiative to learn. There are many resources online and offline about investment. Try to understand how stocks, bonds, and mutual funds work.
No one is born an expert, especially when it comes to investing. You have to start from somewhere.
Pay Off Your Debts With The Highest Interest
If you want to start to invest and yet, you still have credit card debts with high interest, we encourage you to pay it first than risking. Use your best judgement and see if your investment could pay your debts.
If possible, try to find more ways to earn so you can clear your debts. There are many ways to have money during college. You can try part time remote jobs so you don’t need to leave your dorm or campus. You can also do freelancing where you can decide which projects you want to take.
Learn How To Diversify
Remember what happened during the financial crisis back in 2008? That teaches us that you should never put your life savings in a few stocks in one go. Learn how to diversify such as putting your money in investments, in your bank for emergencies, and keep a small amount of money at hand.
Create A Budget And Stick To It
When you are in college, it might be tempting to try out different things. After all, it could be your first taste of independence. But if you will not control yourself, you might end up being broke.
If you wish to have a regular investment, you must plot a budget every month. Plus, you need to commit to stick to it. If you used to spend without thinking, this could be hard. But eventually, you will appreciate the financial security you’d get from budgeting.
Just so you know, many college students are now interested to invest. And fortunately, there are several online groups to join. You might want to check these out so you can get tips on how to properly invest. But we don’t recommend that you join the bandwagon like what happened to the Reddit fiasco. If you are to invest, make sure it’s logical and backed up by the right strategies.
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