Time is on your side as a college student investor
October 30, 2012
Filed under Opinion
Time is the most important resource that all students have during their college years. It is one of the key components to making successful investment choices—and unfortunately, students usually squander time in respect to making good financial investments.
According to Gerber Kawasaki Wealth, the co-founder, president and CEO of Investment Management, the best thing for students to do is to save and invest money. “Time is the best asset you have.”
College students do face very demanding academic agendas, and making the right investment choices has little to do with luck and more to do with careful planning.
”Learning how to invest might not be easy for everyone, but it’s good to challenge yourself,” said Mai Hoang, president of the SMC Business Club.
Indeed, students who rise to the challenge and invest while still in college will likely get to enjoy a far brighter financial future compared to those who do not; this is because those who start early fully capitalize on the asset of time.
Student investors must also cultivate the discipline of saving money. “Just think of it as another bill,” said Manuel Napoles-Ramirez, secretary of the SMC Business Club.
The average cup of coffee at Starbucks costs $3. If you drink one cup a day for five days a week, in a month you’ll have spent money on 20 cups of coffee, which equals to a monthly spending of $60 just for coffee. Hypothetically speaking, for as little as drinking home brewed coffee instead of Starbucks, you could take that money and put it into your saving’s plan.
When it comes to what you will forgo to save money to make investments with, your personality and lifestyle will once again determine your choices. You are either a conservative or an adventurous investor. That in conjunction to a set of variables, such as lifestyle, will dictate how you will relate to different types of investments.
Don’t let the fact that you don’t have the ability to take a big monetary risk prevent you from making investments. The investment strategy recommended by Mr. Ross Gerber for college students making a first investment is to invest in mutual funds. These investments are not as risky, and give first time investors a chance to make extra money.
For a minimum of $50 a month, students can begin a Roth IRA account with a mutual fund investment.
“It is tax free and you can also access it for emergencies, or to make big purchases such as buying a house,” said Gerber. According to Gerber, all gainfully employed students, even part-time ones, are eligible for a Roth IRA account. If a student lost her jobs, it would not be affected it as long as she eventually got back to making an income.
It certainly doesn’t take a genius to figure out investments, and to be bold enough to make their first investment while still in college. “I don’t want to lose all my money at stocks. I’m not a business major,” said Mina Oh, SMC Student and Spanish major. Your college years are for learning, so why wouldn’t you want to take the time to learn how to invest in your financial future?
As a student thinking about making your first investment in stocks, you are thinking about a serious relationship. The key to any successful relationship such as, between investor and investee, is compatibility. There is no point in buying energetic stocks that change from moment to moment if you are a laid back conservative person. The same is true for high energy aggressive personalities. It would be pointless to buy stocks that move slowly over a long period of time when you can play a fast game of trading.
Whatever your personality type is, there is a huge world of money out there—and it’s possible to make some serious money without having to clock in and out. Look into paper trading so you can learn the basics of trading without taking any real risks. And once you feel confident enough to invest real money, hopefully you’ll see how amazing it is to make money while you sleep.