How to Invest While in College : How Can a College Student Invest?

How Can a College Student Invest?

How Can A College Student Invest
Not many people investing with the college students, and they like to believe that funding should be done after graduation only. But, we beg to differ. We think that there are lots of advantages in starting early and invest money in your 20s. Some of the best ways to invest money include-
  • When a student graduates from college with exposure to investing, he will realize that he has gained tremendously, in terms of the ‘time value’ of the investment made.
  • He will gain essential insights into the activity called ‘investment’ earlier than his peers.
  • When you invest money in your 20s, you will get to learn practical lessons about investment, which can’t be learned from books/websites.
  • Any investor would admit that the ‘start’ is the toughest part of any investing process. By investing early, a college student would clear this hurdle, while still being in college.

How can a college student invest?

The first significant step that can be taken by a college student to invest money wisely is to make a small space for saving in his/her limited budget. Do keep in mind that investing is a more significant activity that consists of two processes- saving and investing.

It is imperative for any person to invest in growth, early in his life. As a college student does not have too much capital to preserve, the emphasis at this stage of his life is to reach a stage where capital preservation is necessary and invest money in stocks will help accomplish that in the best possible way. This is the reason why most new investors are advised to invest money in stocks, for a start. By stocks, we do not mean individual stocks only. You can also invest in less costly index-based ETFs (Exchange Traded Funds) which hold stocks.

The next big decision you need to make before you invest money in your 20s is to whether to opt for self-directed investing or managed investing.

Managed investing, in our opinion, is the best choice to invests money in your 20s as a manager will take all the trouble for investing money on your behalf, while you remain focused on your education. With the help of managed investing, you can invest in a fund family (like Vanguard or Fidelity Funds) that puts money into mutual funds. Alternately, you can open your own investment brokerage account and buy mutual funds through it.

You can also invest through roboadvisors which are online automated investment services, designed specifically for investing with little money. They invest your money in a investment portfolio determined by a commuter algorithm. The online platform also takes care of all the re balancing, if required. You can open some of the roboadvisor accounts without any money, and this makes them excellent options for investing money for beginners.