College Student Investing - Time is On Your Side
College student investing is one of the easiest ways to jumpstart your financial future. And if you think you're too young to invest, or that you don't have enough money, think again. Because online investing has made the process so simple and accessible that almost anyone can do it. And you don't need a ton of money to get started. You just need to know how. That's where Student Finance Domain comes in.
Getting Ahead with Your Personal Finance Investing
First of all, you should know that as a college student you have a big advantage
over other investors. You have time - and plenty of it. And with the
almost magical powers of compound interest, time really is money. Even investing
a modest amount of money today can mean big returns down the road. So you
owe it to yourself to at least consider personal finance investing while you’re
in school. You can find a great deal of information about investing resources
online, as well as receive a free personal investment guide, by reading Forbes
Magazine.
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Learn the basic lingo before you embark on you first set of investments
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Make informed decisions about what to do with your money while you're at college.
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Don't let money stand in the way of your education. Find the answer with student loans.
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Online discount stock brokerages and other financial services companies have made college student investing easier and cheaper than ever. Here are a couple of reasons why:
- You no longer have to call a stockbroker on his time and pay hefty commissions to buy and sell on your behalf because with online investing you can do it yourself any time of day
- These companies provide you with 24/7 access to your investment accounts and a host of tracking tools that allow you to monitor the stock market and manage your personal investments in real-time
- Many companies provide low commission structures and inexpensive trade fees, opening up the door for first time investors
- Some have low or no minimum balance requirements and offer dollar-based investing options that allow you to purchase fractions of a stock for a specific dollar amount (That means if you have $100 to invest and your favorite beer's stock is at $55 per share, you could potentially buy 1.81 shares)
How To Get Started with Online Investing
To get started you'll need to assess your options and create a plan. Figure out how much money you can realistically set aside for college student investing, whether it's a weekly, monthly or annual figure. Then follow these guidelines towards creating your online investments:
- Start with a small amount like $25 and increase your online investing contributions over time
- Next, because personal finance investing comes with some risk, calculate how much risk you are willing to take with your money -and take your time (The answer often depends as much on your personality as it does anything else
- If you're traditionally a risk-taker, then the prospect of losing money would probably be outweighed by the prospect of making money. If you avoid risk like the plague, you'll need to really think about how much of your money you'd be willing to put on the line
- If you decide to invest all of your money in guaranteed investments like FDIC insured student savings accounts, money market mutual funds, or federal savings bonds, you are assuming some level of risk, and you should know that those types of investments deliver the lowest rates of return and won't let your money work as hard for you as it could
- If you're willing to part with your money for longer, you can get your feet wet with mutual funds that are comprised of stocks, bonds and other types of securities (These funds are operated by investment companies that pool investor contributions to buy and sell securities for the entire group and come in all shapes and sizes)
- Mutual funds can be very concentrated in one business sector, like the telecommunications industry, or they can be diversified with stocks or bonds representing a variety of business sectors. How well those companies do will directly affect how well the mutual fund does. And because time is your friend, even a fund that doesn't perform well initially can pay out big over time
As you become more adept at college student investing, you can begin to dabble
in individual stocks and bonds through an online discount stock brokerage.
These types of investments will take a little more of your personal effort
to monitor them, but tracking tools make it very simple to do so any time
of day. And because many companies have lowered the barriers to entry by offering
free online accounts and low or no minimum balances, personal finance investing
can be a reality for you. You can learn more about stock brokerage by reading
The Wall
Street Journal Online.
If you're willing to part with your money for longer, you can get feet wet with mutual funds that are comprised of stocks, bonds and other types of securities. These funds are operated by investment companies that pool investor contributions to buy and sell securities for the entire group and come in all shapes and sizes. For instance mutual funds can be very concentrated in one business sector, like the telecommunications industry, or they can be diversified with stocks or bonds representing a variety of business sectors. How well those companies do will directly affect how well the mutual fund does. And because time is your friend, even a fund that doesn't perform well initially can pay out big over time.
As you become more adept at college student investing, you can begin to dabble in individual stocks and bonds through an online discount stock brokerage. These types of investments will take a little more of your personal effort to monitor them, but tracking tools make it very simple to do so any time of day. And because many companies have lowered the barriers to entry by offering free online accounts and low or no minimum balances, personal finance investing can be a reality for you.
College student investing is much easier when you know how to start. From the magic of compound interest to the importance of diversification, you need to know the basics of investing. Get the fundamentals and invest for your future.
