Investing

How Can a College Student Invest?

how can college student invest

In my opinion college students are the best investors. They are constantly learning and not afraid to make mistakes. As you get a college education, you should be getting an education in building wealth.

 

Most Investors Start with Stocks

When you first start investing you will most likely want to start with stocks. The reason most first time investors start with stocks is that they are easy to relate to and they are widely talked about. You can start up a conversation about stocks with almost anyone and they should be able to voice at least an opinion. While some believe that there are certain best stocks for college students, I believe a general education on investing is important.

 

How to Get Started Investing in Stocks

When you first get started investing you will want to learn to place a trade. Then you can open a demo account and even though you don’t have any skills in stock analysis. The reason you should jump right in is because you want to get practice placing trades so that you do not ruin your first trades with a click.

What is a Stock?

A stock or a share, is an ownership interest in a business. A publicly traded business will use stocks, also called equity, to raise capital. As a stockholder, you own a piece of a business. You have the right to vote on certain changes, and you should be involved in the process.

How to REALLY Trade Stocks

Once you’ve placed a few trades and are confident in your abilities, it’s time to put some muscle behind your trades. You can beat the stock market if you make the choice to research your trades and take the time to follow the markets carefully.

Technical Analysis vs. Fundamental Analysis

This is where you have to do your homework and it’s really not that hard. Fundamental analysis is looking at the story behind the price changes whereas technical analysis is looking at the previous price changes to determine a future.

 

Ready to start investing the easy way? Get started with Betterment. Betterment is an online broker that invests for you. All you have to do is open an account. Each time you deposit, they automatically purchase a basket of ETFs for you based on your personal risk preferences.

I’ve used them for quite some time and I love how easy it is! See my review here or click here to open an account now and start investing today.

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  • http://thecollegeinvestor.com Robert @ The College Investor

    I’m a huge fan of paper trading until you are confident enough to use real money!

    • http://www.FSYAonline.com LaTisha

      It is so important to practice first and hone your skills. I still use a paper trading account to try out ideas that I am not confident enough in to trade real money. For example, I am not a short trader by nature but I see the opportunities when they come. If I feel like shorting a stock, I will short it in my demo account and enjoy th e profits. On paper at least!

      • LoveSwazi

        Hi, I’ve been looking up paper trading as it seems like something good to wet your feet. Im a college student and I dont want to pay $5 commisions like on tradeMONSTER. That money means a lot to me. Thanks.

        Swazi

  • http://www.moneyreasons.com Money Reasons

    A demo account is great advice, especially for college students since many don’t have any money anyway.

    • http://www.FSYAonline.com LaTisha

      So true! I’m so glad I’m not a broke college student any more :)

      • Kevin Watts

        Good intro post. We should all start investing earlier in life that way we can learn from our mistakes. I wished I had invested while in college but sadly I was in heavy debt!

        • http://YoungFinances.com/ LaTisha Styles

          Yeah I also wrote a post about paying off student loans versus investing. The student loan situation is getting to be a big problem and preventing young adults from investing early which is one of the keys to investing success.

  • http://www.thefrugaltoad.com Paul @ The Frugal Toad

    Stocks are not a good idea for college students due to the fact that most will be investing with small amounts. Mutual funds or ETFs are a much better option to get equity exposure with less risk.

    • http://youngadultfinances.com LaTisha Styles

      Interestingly enough, you can invest with a small amount and still get a diversified portfolio. There are brokers that allow partial share purchases for as little as 20 dollars. That’s how I got started.

      • teensgotcents2

        I’m not ready yet but I am looking forward to learning more about investing as I get out of high school. My grandparents gave me some stock so I’m already a stock owner although I know nothing about it!

        • http://YoungFinances.com/ LaTisha Styles

          Take it slow and you’ll find that it is not all that difficult once you learn the basics. Let me know if you have questions!

  • http://www.20sfinances.com 20’s Finances

    Part of me wishes I started with individual stocks, but I am too much of a wimp now. I love my mutual funds and etfs. :)

    • http://youngadultfinances.com LaTisha Styles

      Yeah I find that as I’m getting older I am much more conservative with my asset allocation decisions. I think that starting early is a good way to learn to manage the risk that comes along with individual stock selection.

  • http://yourPFpro.com Harry @ PF Pro

    I started trading stocks in high school/college with a few thousand. Had some winners but then had a bunch of losers, so I’m glad I learned that lesson early with a relatively little amount of money. Now that I’ve seen how even the best traders can not continuously beat the market there’s no point for me investing in individual stocks. I’m happy with the average returns of the market.

    • http://youngadultfinances.com LaTisha Styles

      Yeah active management is a tough job but some see it as fun and continue to do it. Personally, I use indexing for my retirement strategy. I am happy with the market returns for that. But I buy individual stocks for near term enjoyment. Strictly play money.

  • http://allthingsfinance.net JW @ AllThingsFinance

    Unfortunately, most college students that I see start with penny stocks. They end up loosing half of their money and not investing again for many years. The ones that purchase listed securities invest in something like Facebook…we know how that ends. The young, inexperienced investor is facing many obstacles today.

    I would highly recommend paper trading in the beginning.

    • http://youngadultfinances.com LaTisha Styles

      Yeah, I agree. I think it’s mostly because they don’t realize that they could buy some of the companies they want by purchasing partial shares with a broker like ShareBuilder.

  • Kevin Watts

    Good intro post. We should all start investing earlier in life that way we can learn from our mistakes. I wished I had invested while in college but sadly I was in heavy debt!

  • teensgotcents2

    I’m not ready yet but I am looking forward to learning more about investing as I get out of high school. My grandparents gave me some stock so I’m already a stock owner although I know nothing about it!

    • http://YoungFinances.com/ LaTisha Styles

      Take it slow and you’ll find that it is not all that difficult once you learn the basics. Let me know if you have questions!

  • Nik @ midlifefinance

    Isn’t it a great risk going into stock trading without any experience? This is a good option for students to invest, but you should be well prepared for it. It’s a great risk. :)

    • http://YoungFinances.com/ LaTisha Styles

      True, but it’s also a great risk to ride a bike for the first time, right? Risk can be minimized if you take the time to learn what you’re doing.

      • ZAIN

        YES UR RIGHT LOT OF THANKS FULL TO YOU

  • 2-copper-coins.com

    Correct me if I’m wrong but if a college student has investments in their name doesn’t that increase their expected contribution to paying for their tuition? Those investments have to be reported on their FAFSA correct?

    • http://YoungFinances.com/ LaTisha Styles

      That is correct. The more assets you have, the less financial need you have. This only matters if you are deciding to take out student loans to pay for college. If so, you may want to put your efforts towards paying for college out of pocket instead of investing.

  • http://pinnaspot.blogspot.com LoveSwazi

    I wish you hadn’t plugged the Betterment link without explaining them first, since the article is meant for college students who are more than likely beginners. You explained that they’re an online broker that invests for you but what about their charges verses doing it yourself. Maybe there are better avenues for a college student on a budget, why is this not explored?

    • http://YoungFinances.com/ LaTisha Styles

      I do mention my review of them which goes into more detail of why I use them and the fees, etc. They are the cheapest option for passive investing. I also have more free information on how to start investing on my Youtube channel here: http://youtube.com/YoungAdultFinances

      I appreciate the feedback!

      • LoveSwazi

        Alright, thank you very much.

  • http://fitnpoor.com Michelle

    We don’t plan on really investing until our student loans and other consumer loans are all paid off.

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  • Linda Manns

    These are some very good tips. My son is fairly good at this so I take the easy way and let him do it for me

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  • ZAIN

    hey i am collage my study is about commerce student and i want be a rich coz i want help other plz help me what i do iam 18 year old