Smart Investment Ideas for College Students
Time is money when it comes to investing. The more time you give your money to grow, the higher chance you have of making some real profits that will allow you to re-invest and grow your portfolio even more. It’s for this very reason that most college students are jumping on the investment wagon whilst they’re still studying. College is expensive and it can be a difficult time for families. Whether your parents are paying the fees or you need to take out student loans to cover tuition and living expenses, wouldn’t it be nice to know you have a financial cushion to fall back on when you graduate? If you have some cash to spare and you’re looking for investment opportunities, the following are four options that are perfectly suited to college students.
Day Trading & Stocks
Day trading is risky but it can be highly profitable. Since your account balance won’t be huge, buying a lot of penny stocks or small caps is the best option, as you can make money when one or more increase in value. If day trading sounds a little too risky and you don’t have the funds to play around with, investing in stock is a smarter move. Buying low-risk CDs and S&P 500 index funds will give you some stock market action without the huge risk that comes with day trading. Make sure to do your research into the different stocks and take the attitude that your investments are going to be a long-term play.
Bonds are popular with college students as they pay interest regularly, helping to create a steady cash-flow. The term bond is used to describe a situation where an investor lends money to the bond issuer in exchange for interest payments. If you want to live off the money that your portfolio generates, bonds are a great option.
Start a Roth IRA
One of the best ways to secure financial security for your future is to start a Roth IRA when you’re young. What is a Roth IRA? It is a retirement account where you pay taxes on the money you deposit into your account in the knowledge that all withdrawals you make in the future will be tax-free. The reason why this is such a smart option for students is because taxes will likely rise and be much higher when retirement comes around.
Buy Some Real Estate Near Your College
This will only be an option if you have a large sum of money available to invest or if you have friends/family members who are willing to group together. It’s also an option for students who have good credit and can qualify for a mortgage. Real estate in college areas will always be hot property so buying a house or apartment should yield a positive ROI. You can rent out single rooms, specific floors in the building or the entire unit to cover your mortgage and you may even have some cash left over to generate some extra income. Once you graduate, you can always sell the property, use it as a family home or keep it as an investment for your future.