Investment Tips for College Students

Even though college students usually don’t have a ton of cash, it’s still possible for you to begin investing while you’re still in school. A small amount of money taken from whatever source of income you may have could build into a portfolio worth a lot of money, providing it’s managed correctly. The investment strategies used by anyone who buys stocks, bonds, or mutual funds could earn money for you, too. Following are a few investment tips for college students.

Start Small

In order to begin investing money for your future, it’s not necessary to have a lot of money, but you shouldn’t neglect paying bills to do it. If you manage your money well, you should be able to set aside a few dollars from each paycheck for investment purposes. Doing this will benefit you in more ways than one. First of all, the money that’s invested will earn you more money if you do it right, and the lessons you learn from investing now will serve you well for the rest of your life. Even if you end up losing a bit of money in the beginning, you should be able to determine whether or not you made a mistake in your investment strategy, and if so, how you can avoid doing it again.

Wall Street subway mosaic

Invest Regularly

It’s important that you develop an investment plan that will allow you to set aside a few dollars on a regular basis. Sticking a few bucks here and there into stocks or bonds most likely won’t earn you a good return, and isn’t a sound investment practice. Instead you should invest regularly by allocating a certain amount of money from each paycheck, even if it’s not very much. When setting up your investment account it’s important to make sure you won’t be able to touch the money easily–it could be too tempting to take out a few bucks now and then to buy tickets to the big game or a getaway at spring break. A sound investment strategy is called for–one that will hopefully grow consistently.

Investment Clubs

If you know other people that are interested in learning how to invest wisely, it may be a good idea to join an investment club or start one yourself. By sharing information and knowledge with other people who have similar goals, you can all learn how to invest your money with a realistic hope of making a profit. Make it a point to meet regularly and go over your investment strategies. Finding out the mistakes investors make now, while there’s relatively little money at stake, can save you money in the future. Another important aspect of being involved in an investment club while you’re in college are the contacts you’ll make, which will hopefully last for the rest of your life. Different people have varying skill sets, and you can learn to take advantage of the talents of others while they can feed off yours.

Spread Out Your Eggs

You’ve no doubt heard the expression, “don’t put all your eggs in one basket.” That’s sound advice under most circumstances, and nowhere more so than when investing money–especially if you don’t have much cash to begin with. If you have $500 to invest and use it to buy a few shares of a stock because you got a hot tip, you may as well go to a casino and bet it all on red–your chances of making money are just about as good. Instead you would probably be better off spreading that money around by opening a savings account or getting into a mutual fund. If you do decide to enter the stock market do as much research ahead of time as you possibly can–and even then hold a few dollars back to invest in other stocks or bonds.

Seek Professional Advice

Probably the best advice anyone can give you is to seek professional advice before investing any money. Ask your parents, relatives, and friends if they can recommend a good financial planner or accountant. Before signing any papers, make sure you read the fine print. Keep in mind that the best investment strategies are those that allow you to make money steadily over a long period of time. Sure, some people make a quick killing in the stock market, or by investing in other things, but for the most part the people who are successful investors are those who are patient and research their investments.

photo credit: epicharmus

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