If you suggest to
college students that this is the best time to begin their investment journeys,
many will laugh. College students aren’t known to have a lot of extra cash. But
financial experts say this is the best time to learn about investing and begin
exploring investment opportunities.
Start by setting aside
time each day to learn about the basics. Some colleges may even offer
coursework, or you can access websites that provide investing courses. And when
you need help with college coursework, try Studybay coursework assignment help service for
coursework help online.
Let’s look at how
investing as a student can prepare you for a healthier financial future.
Starting now can help you build wealth, gain financial independence early, and
increase future opportunities.
There are apps and
websites that make investing more accessible. The key is understanding where
and how to invest to get the most out of what you set aside. Take the time to
learn investing lingo and how different products work. Thoroughly research apps
and websites that offer brokerage services. And avoid the ones that promise
huge returns or don’t disclose what they want you to invest in.
One area many young
people are exploring is cryptocurrencies. There are many opportunities for
students who want to invest in crypto. It’s crucial to study how it works and
learn about protecting yourself online. Many students find studying for a career in cybersecurity helps with their online and crypto investments.
Even if you only have
a little to invest right now, you’ll still benefit from acquiring financial
literacy. This knowledge will help when you need to make big financial
decisions later on, like investing in a retirement fund. Research and practice
as much as you can now, and you’ll have a firm financial foundation.
Some students shy away
from investing because they fear losing the little money they have. Others want
to start but also want access to the money in case of an emergency. High-yield
savings accounts and certificates of deposit (CDs) are good options to begin.
Your money typically won’t grow at the same rate as the stock market’s
historical average. But CDs and high-yield savings accounts come with low risk,
and you can calculate what you will earn within a period of time.
A helpful example of
the power of compounding interest is to think about retirement. Maybe you hope
to retire with $1 million. As a student, you can achieve your goal by investing
only around $190 a month into stocks. The stock market historically has
delivered returns of around 10 percent. If you waited until your 40s to start,
you’d need to invest around $1,500 a month to reach the same goal.
High-yield savings accounts are low-risk accounts offering higher-than-average interest
rates. Your student savings account may only pay a fraction of a percentage of
the money you leave in the account. But a high-yield account may have an
interest rate of 10 to 15 times the national average. Often, internet banks
provide this type of savings account. But these banks don’t usually have a
brick-and-mortar presence. You may have limited access to ATMs or only be able
to deposit or transfer money electronically.
A CD is a financial
product that most credit unions and banks offer. You agree to deposit a set
amount of money and leave it for a specific period of time. CD terms can be as
short or long. Usually, you will earn a bigger return for longer terms. You
might be able to open a CD for very little money, and if you do not touch it,
you’ll know exactly how much you will make by the end of the term. One risk of
CDs is that you may pay a penalty if you have to withdraw the money before the
end of the term.
If you ask older
people, most will say they wish they’d started investing sooner. Starting your
investment strategy as a student can allow you to take advantage of compound
interest and reinvestment. Your money has a longer time to grow. And as your
money and knowledge grow, the results of your investments could help you
achieve financial independence.
Recall the example
about how much you’d need to invest to reach a $1 million goal by retirement.
Even if you can’t manage $190 a month now as a student, financial experts say
the most important thing is to start. You can increase the amount as you
progress in your career to stay on track with your goal.
Meeting your financial
goals for retirement may seem unimportant when you’re 18. But think about being
able to travel and live comfortably when you are ready to stop working. Many
older adults who did not achieve their goals must continue working well past
retirement age to pay for their basic needs. And investment returns and
dividends could pay off for you even before retirement. If you start early and
are diligent, you could supplement your income with investment returns.
You can open an
account with some investing apps even if you only have $5. Robo-advisors are
another affordable choice for people.
To get started
investing, you should:
● Do some research or
take a class. Learn the basic
terms, the types of investing, and the risks involved with each type.
● Decide why you want to
invest. Knowing why and what
you’re working toward will help you decide what to invest in and how much.
● Know your risk
tolerance. If you can tolerate
some volatility, working with a broker or robo-advisor to buy stocks is the way
to go. But if you are nervous or unwilling to risk your funds, try safer
products like CDs or high-yield savings.
● Consider ways to
diversify. One way to protect
yourself is to develop a mix of investment products with different risk and
liquidity levels over time. You may only begin with one or two things when
you’re just starting. As you become more comfortable, slowly add other
investments. A more balanced portfolio can weather financial ups and downs much
better.
● Don’t wait. Putting off your investment planning can
mean you’ll have to work much harder to close the gap between what you have and
what you need later. Starting now is your most powerful tool for securing
financial freedom.
Your financial goals can
seem a long way off or even unimportant when you’re a student. Maybe you’re
learning how to be on your own, work on your courses or enjoy college life. But
you have the power to achieve your financial goals early by building healthy
investing habits now. And once you begin, keep