How and Why Students Should Start Investing Now

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Investing is one of the most popular topics to talk about for millennials. Even if they aren’t sure how to invest, everybody wants to learn and hit the jackpot. In my opinion, students may be one of the best investors. They are not afraid of failure, rather they see it as a learning opportunity for the future. They have more free time to research, read, and learn, unlike working professionals. This is also in addition to the knowledge they are getting from the education that will help them understand how the world works.

In the old times, people had to pay brokerage fees to invest. Fortunately, the need to pay brokers is over. Some new apps are offering opportunities to invest without paying a commission. It’s not that there aren’t any costs, money is generated from interest earned on customer’s cash balances.

As a college investor, you have to understand that investing is like gambling, it always involves risk. Why you are investing, how much you are willing to invest, and your personality are three of the most important factors that determine your “risk tolerance.” The answers to these questions lead to:

#1 If you are risk-averse, you have to perform serious calculations regarding the exact amount that you are willing to risk. This option will not generate big returns, but it can have a significance over time. Investing in fixed income could be a good choice because it’s not as risky as investing in securities.

#2 If you like to take risks, the possibility of earning large profits probably outweighs your fears of losing money. Investing in securities would be your best choice because fixed income is not as volatile as the stock market.

A great way to start is by using one of the online stock market games. You get virtual money and can start working on your trading skills. This is a crucial step to take before investing in real money because it gives you a further understanding about the stock market. This online game will help you understand how crucial it is to diversify your portfolio. Also, you can join investment clubs at your university and learn from other students.

These steps are for students who want to invest on their own. Other opportunities like investing in mutual funds or exchange traded funds is another option to think about. If you choose to invest in mutual funds, you should do research about the company you are giving your money to. Some mutual funds focus on certain industries and you should feel confident about those industries before investing your money.

Starting to invest can be really frightening, but it shouldn’t. As long as you know your risk tolerance, investment timeline, and your goals, you can easily choose the right account and investment strategy for your needs. You should start investing now so that you can grow your money. This means that you should stop spending your time, and start investing it.

Written by

Finance and Economics graduate “The truth is permanent, everything else will fall by the way side.” Reach me at fadi.aji7@gmail.com

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