Ways to Invest money while in College

How to Invest While in College

Investing is one of the most important things you need to do. It is the only way to defend against the silent killer inflation, and it’s the only way you will be able to retire well off in this world. If someone tells you, you can live off from social security; they are lying to you. There is no better time to start investing than right now. If you are a college student right now, you might be thinking, “I can’t do that; I don’t have any money to invest.” Let me tell you if there’s a will, there’s away. You’ll also be shocked to realize you don’t need that much money. Also understand, this is the best time to learn and make these mistakes. It’s better to make mistakes with your investments while your young and not when you are close to retirement.

Let me show you how important it is to start now. These two investors both invested $200 a month. However, investor A began to invest five years earlier than investor B. Those five years made over a $600,000 difference.

How to invest while in College

Robo Advisors

More than likely, you have heard of financial advisors but not so much Robo Advisors. There are many benefits to having financial advisors. However, if you are the average college student, you don’t have that much money to invest, making financial advisors a little harder to work with since their fees are often more than a college student can afford. However, once you are out of college, highly consider talking to one. While their fees might add up, the advice and help they can give you is worth the fees. 

As for Robo Advisors, they are similar to financial advisors, but instead of meeting a real person, you go online, and they automatically create an investment portfolio for you. What makes this best for college students is the low fees. You can find ones with an annual of .25%. Meaning if you have an account of $10,000 every year, you will pay $25 a year while a financial advisor could cost 1%, which would be $100 a year. And that can add up over time. 

Another benefit is that most in-person financial advisors require a lot more startup money than a Robo-Advisor. The minimum for some Robo advisors is $0, meaning you can start with whatever you have. Check out some of the Investing apps here.

Invest in S&P 500 index Fund

First, you should know that the S&P 500 is an index that measures 500 large-cap U.S companies’ stock performance. It represents the market’s performance by reporting the risk and returns of the biggest companies. This index is the benchmark for investors to see how their investments compared to the market. 

Warren Buffet once said, “A low-cost index fund is the most sensible equity investment for the great majority of investors. My Mentor, Ben Graham (writer of the intelligent investor), took this position many years ago, and everything I have seen since convinced me of its truth.” If the most successful investor in modern-day history supports them this much, why shouldn’t you?

Be warned, don’t invest all your money in it at once. I would suggest investing a certain amount every month to buy it for different prices. Over the long run, you maintain a good average, therefore helping provide better returns.

5 Ways to Invest in College

Invest 10% of everything you make

his is one of the most important steps to take to start investing in college. Whether you have a paycheck or a monthly allowance, your parents give you, take 10% of that total, and put it away in a savings account or investments. 10% might seem like a lot, but you will never notice that it is missing, and over time that 10% can build up. Make sure that 10% is put somewhere that you can’t easily access or accidentally spend. That way, you don’t mix it with your everyday funds, or you’ll end up losing it.

Building this habit in college will benefit you greatly since when the day comes you are making a better salary, you will be in the habit of taking away 10% and investing it for a better future. Think of it like this, right now, you are living like no one else so that one day you can live like no one else can. You are investing for the long run, don’t just look at this as a short term plan. It can be hard to think long-term while you are living it up in college, but remember, one day, your friends will regret not having developed these disciplines while they were young. While they are trying to establish those disciplines, you have already done so and living the life you desire. 

Investing apps

You live in a time where investing has never been easier. Just go to the app store and type in investing, and you will get hundreds of results. Most require as little as $5 to get started. You will want to spend some time and figure out which ones are best for your specific wants. Some of the most popular ones are Acorn and Robin hood apps. There is a slight difference between the two; Acorn will invest for you and create a portfolio designed to your risk and wants for investments. Robinhood, you are left to figure out which stocks you should buy and which investments are best for you.

Another thing to note is that Acorns will help you find extra money. By linking Acorn to your debit card every time you use your card, it will round the rest of your change to the nearest dollar and invest it for you. It can be beneficial to those who have a hard time setting money aside themselves.

Look For Different Types of Investments

You’ll notice that most of the investments suggested have focused on stock market investments. Even with Robo Advisors, they often focus on stocks, and it’s the same with investment apps. However, there are plenty of other choices you could make. Some favorites of mine are Fundraise and Peer to Peer lending.

Most people think you need a crazy amount of money before you can start investing in real estate, but thanks to places like Fundrise, that is no longer the case. Funrise helps you to invest in real estate deals so that your returns are higher than if you had just invested in real estate stocks directly. My first year with Fundrise was great; after one year, I received a 10% return on my investments. The only thing that can be hard for a college investor is that the minimum starting investment is $500.  

We have all lent money to friends, but wouldn’t it be nice to make money off the money you lent? That is where peer to peer lending comes in. Now peer to peer lending isn’t a website but rather a way of investing. Peer to peer lending is where you and other investors pool together money and loan it out to someone, and that person pays interest on the loan, and you get that interest plus your original investment. Be aware that you don’t put all your money towards one loan but rather scatter it across different ones as a way to lower your risk. The only thing that you should be aware of is that you are responsible for your investments. No one makes the investment for you; it is all your responsibility. having money sitting in the bank, it will gain no interest and is being eaten up by inflation.

How to Invest money While In College

There are only two choices for Peer-to-peer lending; Lending Club and Prosper. The one you choose will depend on your preference and whether they are approved in your state. Neither are approved in all 50 states. 

Keep learning different ways to Invest While In College

Hopefully, this has given you a sense of direction on where to start and how you can begin to multiply your money. Know that you never want to work for all your money, but instead, you want your money to work for you and make more money for you. Money shouldn’t control you and never will if you learn early on how to utilize it in the best way. Above all else, never forget to live like no one else right now so that someday you can live like no one else can.



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