Investing 101: A Guide for the College Student

by on June 15, 2012

Starting to invest early (when you’re a college student) definitely has plenty of benefits. The power of time and compound interest will be on your side. Investments with slow growth and low risk have time to mature and if the risks you take in your portfolio fail, you have time to recover and bounce back. However, regardless of age, investing should be a carefully considered process, not a headfirst dive into the water. There is no magic in investment; investing always involves risk. Investing during college is not possible for everyone, since more and more students are struggling just to pay for college and student loan debt is at an all-time high. However, don’t get discouraged and stop reading now below you will find a few simple solutions to find money to invest.

  • Keep track of your money when you spend cash. Take note of any transactions or use online banking to track debit card purchases. Once you know just how much you spend and exactly what you’re buying with it, saving money becomes a much simpler process.
  • Work part-time so that you have money to invest. As a bonus, a job that feeds you, like working at a restaurant or cafeteria, will also help reduce your expenses. You can minimize your transportation costs by working on or near campus, using public transportation, or carpooling. Find a job that also works for you.
  • Once you are ready to plant your money where it can grow, determine your level of comfort with risk. If you fear not having access to your money in case of emergency, a savings account would be right for you. The interest earned is minimal, but so is the risk. A money market account is a slightly higher risk but works like a checking account. Although it has its limitations on the number of transactions that can take place and has a slightly higher interest rate that is in a constant fluctuation.
  • If jumping into the stock market appeals to you, do your homework first. Understand the company you may be interested in investing in and look for a history of steady growth and profitability. Don’t place your bets on the most hyped new tech company. Today’s college students were only children during the 90s tech bubble, but its lessons are still relevant. When Facebook went public it had 483 million daily users, yet its stock has dropped from its IPO price of $38 rather than achieving the profitability that many expected from the social networking giant. Just because the company may be big, doesn’t make your investment will be too.

investing 101 for college studentsIf you just can’t spare any extra money, you can still jump on the investing bandwagon sooner than you might think. For most graduates, their first job in their field is the greatest jump in net income they have ever experienced. Wise graduates will begin putting money into savings and retirement accounts before adjusting their lifestyle to match the new level of income. If you get used to spending each paycheck, saving will be a sacrifice and a chore.

Investing, like college, is a journey. You make progress, have setbacks, learn from mistakes, and reap the rewards of a job well done. The beginning may be daunting, but the benefits will appreciate with time. Of course, you can always act as if it were another class in college, but this one you have the possibility to be paid to take.

{ 27 comments… read them below or add one }

Laura Carter June 19, 2012 at 1:54 pm

Now this is a guide that I have to print for my daughter! This will be her first year away from home, going to college, and I really do believe that this advice will help her! Thank you for taking the time to write such a guide!
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Brian Yang August 16, 2012 at 2:52 pm

Being a college student is really not an easy job. More so if you are not supported by your parents. If you’re the one spending for your college fees, saving and investing money is a vital step for you. That is why, one should limit his costs and must track down every penny spent.

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college loans for students August 22, 2012 at 12:40 am

this is a good guide for every student. i think every youth should all prepare for their college education. it teaches them “responsibility” at an early age.
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Felicia Gopaul August 28, 2012 at 2:59 am

This is a good start up guide especially those who are in freshmen year and are still coping with college life. If your schedule permits working part time, it’s your choice.

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studentloansandgrantsforcollege September 5, 2012 at 8:54 pm

What a great guide for students. This serves as an early lesson to every student who plans to go to college. Studying is not an easy job so as going to college.

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Joe Falconey September 9, 2012 at 8:12 am

As a sophomore I greatly appreciate this guide. I’ll keep your advice in mind when trying to invest my savings. Thanks a lot.

Joe

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Jenny September 12, 2012 at 4:01 am

These are some really cool tips for students who struggle with finances. I would recommend students to find a part-time job with flexible working hours. This would not only keep you financially secure but would also help you gain some experience and confidence.
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Fiona Brendon September 24, 2012 at 6:29 am

Brilliant tips for student! I’m pleased to read all this nice and helping tips on this page. As a student I wanna try all this. Thanks for this allocation. 😆
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transportation to Dulles Airport September 25, 2012 at 7:13 am

Thank you so much for sharing great creative resources to follow I really appreciate, now I can do all that on referral bases and it becomes helpful for me and its really Good Sudent any where they lived…

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Scott Hopkins September 28, 2012 at 2:02 pm

Spending money as a college student and not knowing your current finances is a disaster waiting to happen. Then again, being a college student means you are taking out loans which is also a disaster and the next bubble. I would spend more time focusing on why you are going to college and what you are studying with a clear formula for a career ahead and what you will do to keep that intact. Make sure there is a market for what you are studying.

And yes, do what you can to have a part time job at school. You will value your time a lot more, gain more responsibility and make some extra cash that will more than likely go right to paying for food, gas, and small bills.

Generally speaking you shouldn’t even be thinking about investing right now, just doing homework and learning about it. The kind of money required and the amounts that would make it profitable are not worth it. Wait until you have a full time paying post graduate job.
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Surminga September 30, 2012 at 8:18 am

Back when I was a student I had a bit of spare money which I put away in cash isa’s and bonds etc – but I also started to play about with penny stocks. It can be a bit costly for the transaction fees to begin with but I suppose if you’re lucky enough over time your money that you can make from the stocks will outweigh these small fee’s
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Jack Winston October 2, 2012 at 1:02 pm

Great work. I tell you, this will be a great help to the young ones who are having a hard time managing their finances or who have no idea how to do so. I’ll be looking forward to seeing a follow-up post on this one, focusing on post-grad money management. Other than that, good work!
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andrew calwert January 7, 2013 at 5:27 am

Early investment is always good.I invested when i was in school and then college.That money helped me to completed my post graduation.Now i’m doing job and now i’m investing for my future.

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peterroze March 19, 2013 at 11:02 am

Excellent idea. Really this is very useful information to every college student..I hope everyone should need to know this informative thing.

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Steve March 20, 2013 at 4:52 am

Great work Chris.. Amazingly simple tips that can make a big difference. With your tips, I am sure even first year students would learn how and where to invest and that too intelligently. Keep up the good posts. 🙂

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Homework Help March 22, 2013 at 3:45 am

Those are really some wise tips on money management Chris. I love your analogy of referring investing to a journey. Many students find that they are always on the short end of money, with almost always not having enough money. Investing at an early age, not only gives you the confidence that you have some money saved for the rainy day, but more importantly it inculcates the habit of saving at an earlier age, and this would definitely come in handy later in the life of a student.

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SMB-Payday Loans April 3, 2013 at 2:46 am

If you must invest when you are a student, stay away from high risk investments. Focus on those that have a known stability. The market will always be there and your education is the msot important thing.

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Mitchel Reverra April 15, 2013 at 3:57 am

Very interesting breakdown, indeed. It’s nice to have such information available in one location and some ideas for new and different directions to take to help one stand out.

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andrew April 27, 2013 at 5:13 am

For some college students investing is quite a hard thing to do. But, with a little effort starting with making friends and some extra time to spend dealing in social networking can can start by selling online and used some of your business skills to your colleagues sounds really hard but when know how things work, you might say its fun.
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Mario June 9, 2013 at 9:39 pm

The biggest mistake students makes is borrowing too much money in the first place. Most don\’t realize that unlike credit card debt, you can\’t just file for bankruptcy and get rid of your student loans. My daughter was lucky enough to find financial aid from FindScholarshipMoney.com or otherwise she would have been going to either a state school or a community college for her first two years. That\’s the best way to do it if you want to start your working years without a a lot of debt.

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Nicole Minix July 25, 2013 at 2:46 am

You know what, young generations today are very lucky to have such these lifehack of getting wealthy at young age. Today, they already prone to the reality that in order to be like this in 3 or 5 years from now, you gotta build or do this. If they’ll follow this advice am sure they’ll be in the right path. Success is on its way.
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Richard Thompson August 22, 2013 at 2:49 pm

I’m personally attending uni right now, and I think that starting to invest now can be hard, but absolutely worth it. It really comes down to cutting down costs, and then saving for the right amount of capital. I personally don’t mind the more risky ventures, but it always helps to have someone familiar with the market to consult with. Great guide!
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Philip Townsend August 29, 2013 at 12:28 pm

I really wish I would have been smart enough to invest when I started school. Start when you’re young guys!

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Donald Quixote from http://www.collegeamerica.edu/cheyenne October 2, 2013 at 4:32 pm

The biggest point that I noted is that the most valuable possession a college student has is time. The earlier you start investing the longer you get to enjoy the wonder of compound interest in your favor.
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Parul Arora October 30, 2013 at 8:30 am

Hello There,

Making proper schedule and pocket money budget is must for any school or college student. I am in College but I run online business too. I cover my expenses with the online income itself so it’s very important for me to perform budgeting and at the end of the month I recall the expenses to analyse my useless usage which I can ignore next time.

Anyways, Thanks for the article 🙂
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Gurpreet April 12, 2015 at 5:53 am

This is really nice guide for students.This article really have those important information which will going to help students to invest like a pro.

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stanley July 4, 2015 at 4:26 am

College students tend to be the highest spenders without much savings. This guide is really wonderful for any college investor and it has answers to most questions. They for sure should do their homework and start investing as early as possible!

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