College students are notorious for being broke. It’s not that they are too lazy to earn money with a job or that they waste all their money all the time, although for some this could be the reason. It’s usually because of the high cost of education and the decreased amount of time to work.
Have you ever seen one of those calculators and figured out that if you invested X amount of dollars for 45 years you would have however millions of dollars? It sounds too good to be true, but often with a reasonable rate of return, it’s very possible. The two problems with this calculation are the assumptions that you have that much money and that you have that much time.
Start investing during your college years and you will have that much time.
If you are 20 years old and you plan on retiring at 65, you have 45 years to earn money. Even with a small investment of $50 a month with an average rate of return of 9%, by the time you are 65 you will have over $350,000. With an average return of 12%, that would be over $1 million. Basically what this means is that every minute counts when it comes to investing. Also, the earlier you start, the more risks you can take. More risks mean the potential for more money. You can take more risks because even if you lose money, you still have time to get it back.
But I don’t have any money?
Unfortunately, I am not going to tell you that you don’t need money to start investing. You do, and the more the better. What you will like to hear is that you don’t need a lot, and even college kids can get enough to get started. If you can invest $1,000 a month, that’s incredible, but as a college student who probably don’t even make half that in a month, try shooting for $25 to $50 a month. You would be surprised how easy it is to find this money. Here are some quick ideas for getting your $25 minimum each month to invest.
- Save Money from your check. This can be done by foregoing your expensive latte, skipping out on the movies a couple times, or dropping any other unnecessary expense.
- Get a job. If you don’t already have one, get a job. If you don’t need the money, than getting a job working a few hours a week will be plenty to get your $25 minimum or maybe even $50.
- Earn some cash online. There are several ways to earn money on your own on the internet if you just want to spend a small amount of time working. Look around and you should find something to do to make $25 a month.
- Work on campus. You can get a job on campus, but you can also do studies that give you cash as well as surveys, or go to your local plasma center and get paid for your plasma donation.
- Be creative and start your own business. Make something and sell it on eBay or sell stuff to your friends. Use your creativity.
How often should I invest?
If you only investing $25 a month, I would suggest investing on a bimonthly basis. If you invest every month, you will end up spending a lot on commission fees. For example, if you invest $25 a month every month through your broker, they will take out a small part each month for commissions. You will have spent a lot on commissions and only invested a significantly smaller amount in investments. If you invest the same amount but only every other month, meaning you invest $50 every other month or six times a year, you will have spend less on commissions and have invested significantly more.
How do I get started?
Investing is easier than ever now that you can invest with online brokerage firms. You can invest any amount you want, although as I mentioned, I suggest a minimum of $50 at a time.
If you aren’t experienced with stocks, don’t have time to research them, or just want the hard work done for you, go the mutual fund route. T
All you have to do to get started is sign up, send in the appropriate copies of material for security purposes, transfer your money, and place a trade. It’s that simple. By the time you graduate, if you invest $25 a month and earn 10% interest a year for 4 years, you will have almost $1,500 in investments. Increase that to $50 a month and you’ll have almost $3,000.
Start investing today to secure your financial future!