How much should I be investing?
This is a question that is hard to answer. Ideally, the more you invest; the better your portfolio will be in the future. Each amount will vary from person to person, but one should consider a few different factors such as age, income, and liquidity.
Age is an important factor to consider as younger people will have a longer time to set aside investments and let them grow. Along with that, a younger person can take a higher level of risk to build their portfolio. This factor will then determine what style of investment is appropriate for you.
College students are coming out into the working world usually, will carry a debt with them. With this in mind, their disposable income will be higher to survive. Also, location and other costs will affect this income. Essentially, how much money can you put away without hindering your lifestyle?
Yep, I’m sure you haven’t heard of this turn since Finance class. With this in mind, liquidity is just about how fast you can convert any of your assets into cash. Some investment opportunities will not let you convert your investment to cash without fees or other deductions.
Well.. How much should I invest?
I’m sure you’ve been waiting for this answer, and well, it depends on how much you can financially undertake. Ideally, you should put aside 10% into savings or investing. If you simply can’t do that, 5% is a excellent start. Once you start having some extra income, you can increase it back to 10%.
For more information on investing early, check out what I’m currently doing to build a solid portfolio as a college student.