Are you ready to build wealth with less money? Learn the top 4 investment options for college students in 2024.
No doubt college life is full of exciting opportunities and endless possibilities. Most of the people will tell you that academics play a key role in building a career. But there is one more thing you should never overlook as a college student, the importance of investment for building your financial future.
Investing in your early life helps in understanding financial stability and developing good financial habits like saving money and avoiding excessive spending. The idea behind an investment is putting your money into something that would provide more value over time.
Now you must be thinking where should I invest as a student? Well, don’t worry.
In this guide, we will be looking at the top 4 smart ways to invest for college students. So, get comfy, relax, grab your coffee, and let’s dive in:
What is Investment?
In its simplest form, investment is buying something at a cheaper price and selling it at a high rate to make wealth. When we talk about investing early as a student, that means building financial security if things go rough. Whether it’s inflation or struggling to pay your college fees, the investment will have your back in either case.
Benefits of Investment for College Students
Investing as a college student is not about meeting your daily finances only. Rather we are aiming to meet our future life goals by investing our money for good. Here are some major benefits of investment for students in 2024:
Stay Alive in Inflation
2024 is an era when opportunities and inflation are going hand in hand with each other. So it’s nearly impossible to meet your financial needs depending on your job only. By investing at the right time, one can build an extra income streamlining in tough times.
Build Wealth
Like it or hate it, we all want to be rich in our lives. And you cannot simply get rich by doing great in a 9 to 5 job. Smart people invest some money in various sectors like bonds or stocks and double their money and sometimes 3x.
Improve Your Spending
One of the top benefits of investing as a student is understanding where and where not to spend the money. After all, we are investing to earn money and this can only be done by saving money.
If you are looking to explore more amazing benefits of investment, try reading out The Art of High Net-worth Investment in 2024.
Top 4 Best Investment Ideas For Students
Choosing the right spot for investment as a student can be quite stressful, especially if you don’t have good advisors around you. Lucky for you, we have a list of the top 4 best investment options for students in 2024.
1. Mutual Funds
One of the best ways to invest money for students with limited finance is mutual funds. Multiple investors pool money in a company with one main objective, to help the company grow.
Mutual Funds provide quick diversification, even with less investment. These funds are managed by a professional manager who ensures minimum risk involved with the investment. One does not have to learn and understand much investment research with the help of these professionals.
Mutual Funds are known to be low-risk investment options since the funding comes from several channels. However, we still recommend you research the company or portfolio in which you are looking to pool your money.
Also Read: Start Strong, Finish Rich: How2Invest’s Guide for Financial Newbies
2. Stocks
One of the simplest and traditional ways to grow your money is by investing in the stock market. While this may sound new to you trust me, people have doubled their profits in this business. But if you don’t know what are stocks? We are here to answer you.
In simple words, stocks are the little parts of the company that we call shares. When you buy a stock, you are buying a company’s share. When the company grows, your investment will start turning into a profit.
The good thing about stocks is becoming the sole owner of your shares and getting benefits as the company grows. Keep in mind that this kind of investment comes with high risk but more profit. So make sure to analyze companies with good financial history and consistent growth.
3. Certificates of Deposit (CDs)
CDs are a great choice if you are looking for a low-risk investment opportunity as a college student. Certificates of Deposits (CDs) are the funds you put into a bank for a certain time as a loan and earn interest on your money.
Once the time is over, you’ll get back your investment along with the interest. Remember that your profit in this case depends on the duration of the loan. The longer the period, the more interest you are likely to get.
This is a very low-risk investment plan for potential returns because of FDIC-insured up to $250,000. Although you can withdraw your money anytime there are high penalties for pulling back your funds before time. So it’s good to invest money that you won’t need during your CD time.
4. Bonds
Another effortless investment for students is
Bonds. Multiple corporations and governments issue bonds when they are looking to raise money. Buying a bond simply means providing funds to the issuer in the form of a loan. In return, you’ll be getting your investment back on a certain date with interest as profit.
One must remember that buying bonds doesn’t mean owning shares of the company, like in stocks. So, it won’t matter whether the company is growing or not. However, there are still 2 major benefits of investing in bonds:
- Providing a stream of income
- Offset any irregularity like owing in stocks
These are some of the basic investment plans for beginners. Once you master the basic understanding, you can try one of these Passive Income Ideas in 2024.
Final Advice
So here’s the juice of the whole content. Investing in early life will not only help you understand financial literacy but also provide an opportunity for future growth. However, the most important element in every investment is to understand where you are investing and what are the possible risks.
Starting early and being consistent with the latest updates will surely drive you towards success. Try exploring these small investment plans for students and see how your life rewards you with financial freedom.
Good Luck!
