Note: I’m no financial analysis, just someone who was interested in looking for ways to invest as a student. Consult a financial analysis before making any large or long-term investment.
I feel like everyone at one point hears someone who claims they make thousands upon millions from the stock market or “how you need to start investing early as a college student”; you hear about “how easy it is”; but those that tell you this never tell you how to get started.
Being a college student, I’d like to make even just a few hundred dollars; therefore I wanted to know what can I do to start investing in college and get ahead. Currently, I’m a senior at Iowa State University, and I have a savings account, but I haven’t built much of an investment portfolio and heck; I didn’t know where to start.
Obviously, there are many, many different investment styles and strategies, but there are now after researching; there are two areas that I feel conformable Investing – Stocks and Mutual Funds. Each brings their own benefits and risks, though.
Managing My Own Stocks
I honestly really like the idea of managing my own stocks. Heck, you are the one that is making money and doing it yourself. Personally, I’m a huge DIY kind of guy, and if it’s anything like the movies, I may like the idea of this. Even though this sounds fun, I found it brings a ton of risk due to not being a total expert in the market. Plus you need to dedicate your free time to managing your investments in case things end up turning downhill.
After looking at it more, sitting in my home and looking at market changes for the rest of my life just wasn’t something that I saw as appealing.
With this is mind, I still play the stock market using different platforms, but I don’t have the majority of my portfolio invested with this style.
Personally, I treat the majority of this style of investment as simply sunk cash and gone. If you are interested in doing your own trading and managing your own stocks, keep in mind that you need to pay attention to the market 24/7.
In Short: I’d rather leave it to experts who are paid to watch the market and make key decisions for me.
Mutual Fund Investing: Lay Back and Watch Your Money Grow
After analyzing all the risks and my current situation, I feel mutual funds are the best avenue for someone looking to invest without a huge risk. With this, there are still different mutual fund strategies that one can pursue.
Figuring out this is mainly personal, and certain funds require different investment minimums. Check out my post here on these different types and what you should choose.
Thankfully, I already have a small portfolio setup in mutual funds from when I was born with Vanguard. Within Vanguard, I’m invested in a few different types of funds that have high growth. With this, since I’m looking for major growth due to me being young – I can accept a greater degree of risk.
Liquidity-wise, I’m a fairly frugal person; therefore I do not plan on cashing these assets out for a long, long time.
Furthermore, I have my bank account setup to send 10% of all my deposits over to my mutual fund (Why 10 percent? Check out my other article that goes into detail on that). Not only does this allow for the fund to grow more, but I also don’t need to worry about setting aside money to see my fund grow.
Some may do this process manually, but I found I often forgot about putting enough money aside.