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How Setting Up Your Retirement While In College Will Make You Millions Before Retirement
You’re living the college life, which is a good life, but that’s not often the case financially. Most college students struggle financially due to the combination of increased expenses and freedom to spend. The best way to get by is to land a part-time job to help pay for those expenses, and so you can have some spending money to enjoy life. However, if you really want to do it right and set up for the future, then you also need to invest some of that money.
Short-Term Gratification vs. Long-Term Gains
Most of your friends and acquaintances aren’t going to be thinking about investing when they’re in college. They want to go to class, meet new people, and go out on the weekends. You can do the same, but you can add investing. In order to that, you will first need a job. Having a job in college is a good thing. It’s another way to network, both professionally and personally. It’s also possible that this part-time job leads to a career. This happens more than you might think. For instance, you could work as a cashier at a store throughout college and end up managing that store in the future.
Here’s the point though. While everyone you know is only thinking about the present, you’re living in the present while also investing in the future. During the present, your friends might think you’re wasting your time and money with investing. Ten years from now, and beyond, you’re going to be glad you did it. If you invest correctly, you’re going to be way ahead of everyone you knew in college when it comes to finances. All you need to know is how to invest, which will be covered here.
How To SPY
Not that kind of spy. Why do you have to be so literal all the time? I’m sure you’ve heard that line before. If not, you will. But that’s a completely different article. This is SPY, not spy. It’s capitalized because it’s an ETF, which stands for Exchange Traded Fund. And that means you’re investing in a bunch of stocks at once through one investment.
With SPY, you’re investing in the entire S&P 500 in one shot. This means you will be diversified without having to invest in individual stocks. These are mostly Blue Chip stocks, which means they have a market cap of at least $1 billion and they’re a leader in their sector. SPY also pays a quarterly dividend, which means you are paid a small amount four times per year whether the ETF goes up or down.
Some of the biggest holdings in the SPY ETF include Microsoft, Apple, Amazon, Facebook, Google, Johnson & Johnson, JPMorgan & Chase, Visa, and Berkshire-Hathaway. Over the past ten years, SPY has delivered an average annual return of 11.04%. Imagine that return over the next 50 years.
Invest In Real Estate Without Owning Real Estate
Any wise investor is going to own some real estate. However, there are ways to own real estate without the headaches. There is also a well-kept secret that will be shared here.
You can invest in a REIT, which is a Real Estate Investment Trust. A REIT invests in income-producing properties and must return at least 90% of the income generated to its investors. This leads to large dividend payments.
If you want to take the standard route, you can invest in REITS that own shopping centers, malls, hotels, and senior living spaces, but that kind of real estate is not immune to economic downturns that can be caused by interest rate hikes, geopolitical events, or, you know, viruses.
Believe it or not, you can invest in a REIT that invests in data centers. If you’re not familiar with data centers, they make the following possible: online shopping, downloads and streaming video, and working remotely. Data centers are recession-proof, and they are only going to grow in importance as we move forward in the technological age. In order to invest in data centers, look into QTS, which is an ETF.
Now you know how to play the long game without having to do much work at all. You can literally set it and forget it for decades with SPY and QTS. All the while, you will be collecting dividend payments. Check this out: You’re suddenly the smartest person on campus.
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