Many websites talk about broke college students and skyrocketing student loan debt. While this reality is true for many college and university students, college is the perfect time to start investing. College students have one major benefit when they decide to invest. They should have plenty of time to see their investments grow.
Open an Account
The first step that college students will want to take when deciding to invest is opening an account with a brokerage. Most college students are literate when it comes to technology, and an online brokerage can be a great option for investing. Some brokerages are tied to smartphone apps, and users can actually invest through rounding up everyday purchases made on a debit or credit card. This type of investing can be relatively painless and allow money to start building up over time.
Many online brokerage accounts offer access to index funds. These funds can come with relatively low management fees. Every dollar that gets lost to investing fees and transaction costs is a dollar that cannot go to work for you. Therefore, it’s a good idea to keep these fess to a minimum. Brick-and-mortar financial professionals will frequently recommend investments that carry higher fees. This can be tied to their desire to earn commissions that provide investors with few, if any, benefits.
Ignore the News
The stock market is volatile. This means that prices can go up and down on a daily basis. Sometimes, these price fluctuations can be quite severe. New investors can be tempted to sell when the market starts dropping. Younger investors like college students should stay the course. Leaving money invested in the market will make success more likely over the long haul. Those who sell will lock in their losses and then stay out of the market because of fear. Therefore, it’s a good idea for college students to ignore the financial news and keep pushing money toward investments.
Getting an early start on investing is key to building wealth. College is the perfect time to get started. Opening an account with a brokerage app and then rounding up purchases to invest is a great way to make saving money painless. The dollars will start to add up, and they will have decades to grow.