Investing might not be at the forefront of your mind when you are a student, but investing is a long-term commitment. Because of the long-term nature of investing, it might not be a bad idea to start while you’re still young.
However, investing can be a daunting process, especially if you don’t know what to invest in. You may often hear about people losing money in the stock market but rarely hear about people making money.
If you aim to set yourself up for success through investment, here are some of the best investment ideas for college students.
Invest in stocks
When you invest in stocks, you are essentially buying a piece of a company. Owning piece of a company means you are paid out for its successes, but may also lose when the company loses.
The advantage of investing in stocks while you are a student is that you have time to make up for losses. It is essential to stay invested long term rather than to panic and pull out when things don’t look so great.
Research the companies you invest in and choose one that has a track record of success. Investing in stocks is really easy. It can be done while you search for homework help online or prepare for your college debate or looking for philosophy essay ideas online. So, go ahead and learn the tricks of the trade.
Invest in bonds
Bonds, like stocks, are another low maintenance form of investment. When you invest in bonds, you are basically lending your money to a business or institution to ensure they are able to sustain their financial requirements. Bonds are less risky than stocks but may take longer to show good returns.
Bond investment pays out in the form of dividends, usually annually, and at the end of your bond term, your full investment is repaid to you. As a student, it might be best for you to consider zero-coupon bonds, since these do not require tax or interest rate payments.
Alternatively, consider tax-exempt municipal bonds, which also require no tax payments. Using these methods can help you preserve as much of your money as possible.
Certificate of deposit
If you want a completely stress-free approach to your investments, you should consider a certificate of deposit. Also known as a fixed deposit account, a certificate of deposit allows you to invest an amount you choose for a period you choose and get guaranteed returns at the end of the investment period.
The investment periods range from 6 months to 24 months and accumulate a higher interest rate than a standard savings account. This approach can allow you to relax and focus on your writing assignment while your money works for you.
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It might be necessary to shop around before investing your money to find the best interest rate and also to find an institution whose minimum investment amount matches what you have.
For the tech-savvy student, cryptocurrencies may seem like a tempting option. Cryptocurrencies usually grow very fast and at a highly unstable rate. If you are willing to invest in cryptocurrencies, you need to research very carefully to ensure that you do not lose all your investment money.
One of the most advantageous aspects of cryptocurrency is also its highest risk factor. Since new cryptocurrencies are cropping up almost hourly, the market is highly volatile.
While this may mean a fast, high return on your investment, it could also result in a major loss. Besides, some cryptocurrencies appear suddenly and then disappear just as quickly. Similar to investing in stocks, it is important to invest long term and be willing to ride the waves to ensure the highest level of success on your investment.
Start your retirement fund
Starting your retirement fund is a very long term investment. You are most likely only going to access these funds when you are in your 60s, or perhaps even later. However, starting your retirement fund early is a low-risk method of investing in a secure future.
Whether you use your income from your side job as an essay writer or invest the cash gifts you may receive for your birthday, every little bit counts. Investing in your retirement can ensure that you can stop working at an age when you still have the energy to use those funds and add adventure to your life.
Investing can be complicated and risky, even when you are an experienced investor. However, not all investments need to be risky. Choosing the right investment for you will depend on how much money you have available, your ability to recover losses, and your experience with investments.
Learning to invest while you are young can help you learn the markets and make better decisions over time. This practice will lead to better outcomes at the end of your investments and the ability to assess risk more easily. While not all options are suitable for everyone, this list aims to provide you with a few choices to look into when deciding to invest.
Ray Campbell is an expert academic writer covering an array of subjects – finance, economics, accounting and business maths. He also works as a competitive exam coach helping students to crack entrance exams and secure admission in top universities. In his free time, he likes to try DIY woodworking, attend painting classes and live stream gaming.