As a college student, you probably already have a lot on your plate, from studying for tests to working a part-time job. For many students, investing simply isn’t at the forefront of their mind. Starting to invest while you are still in college, however, can prove extremely beneficial. After all, the sooner you begin investing, the more time your money has to grow.
Research and Develop a Plan
Your first step should be to do your research. Read as much as you can about the subject. Choose books that will provide you with information on how to analyze stocks and bonds. After you have a thorough understanding of how investing works, you will be able to put your knowledge to the test as you create a solid investment strategy. Although it can be intimidating to start, remember that even the experts had to begin somewhere.
Open an Account
Thanks to technology, investing is easier now than ever before. There are plenty of places where you can manage your investments for a very low cost. You no longer have to hire an investment advisor to plan your investments. Instead, research which broker is best for you and compare your options. You’ll then need to open a brokerage account, which has to be at an entity other than a bank. A cash account is normally the best option for beginning investors.
Purchase Funds
Now your money will be sitting in the account, not doing anything. Your next step should be to purchase funds. Each time you buy one, you’ll have to pay a commission. Then, you will most likely be asked if you want to take your funds as cash or reinvest your dividends. Most companies pay dividends to their shareholders. By investing in a company, you will be comparable to a very small owner, meaning you’ll get dividends. Normally these are paid quarterly or on an annual basis. If you’re planning on investing for the long term, reinvest your dividends to continue growing your money!
Wait it Out
Your next step requires the most patience. You’re going to have to wait things out and continue to add money roughly every month. Some features allow you to create an automated deposit system. Don’t sell your investments, even if you panic when the stock market dips. The market will recover. Having a long-term mindset is one of the most important things you can do.