Having an interest in investing is the first step toward a better future. But as a college student you may not have a lot of time or money to invest. In addition, you may wonder how you can invest while still in college. There are ways, thankfully, that it can be done.
1. Use a Robo-advisor
When you don’t have a lot of time or money, when do you have time to learn about investing? Thankfully, with the help of the right robo-advisor, like Betterment, you don’t necessarily have to. A robo-advisor can assist you with investing because it uses automation to make things easier saving you precious time. In addition, it’s easy to get started due to the low account minimums.
Another great feature of robo-advisors is the accessibility. You can access them right from your phone and check on your portfolio whenever you have a few minutes during the day or evening. So, if you are busy studying during the day and don’t have to check on your investments until the evening, it’s ok.
Another type of investing that could be attractive to a college student is crowdfunding. You can be relatively new to investing and, like a robo-advisor, it doesn’t take a great deal of money to get started either. Using this investment method allows you to pool your money with that of other investors so everyone benefits through an REIT, or Real Estate Investment Trust.
You have the ability to diversify your investments when you use an REIT and gain a steady income stream. A team of experienced advisors determine the best methods for investing the pooled money into real estate investments not normally offered to the single investor. The way they accomplish this is by spreading the investment money over several properties instead of just one single property. This keeps the risk of losses lower and increases the potential growth of the investments of all involved.
3. 401K Plans
When I was in college, I had a job that offered a 401K plan. Of course, this option is not necessarily going to be available to every college student. However, if it is, I strongly urge you to take advantage of it. If you are new ton investing you can begin learning by investing in this way. Not all employers offer them, but it is to your great benefit to utilize them when and if they are offered.
The 401K plan enables employers to withhold a portion of your earnings each pay period. This before-tax money is then placed in an account in your name. Usually your employer will match the funds to a certain point and deposit them into an investment account under your name. Your employer will then match the funds to a certain percentage adding to your contributions. Choosing funds that are higher risk will build your investment account balance faster, but it is wise to have some money in medium risk and some in lower risk areas as well. This diversification can significantly reduce the risk of losses on your investment.
As you can clearly see, there are ways you can invest while still in college. Don’t wait. Get started today to build wealth for a better future.
Kara Perez is the original founder of From Frugal To Free. She is a money expert, speaker and founder of Bravely Go, a feminist financial education company. Her work has been featured on NPR, Business Insider, Forbes, and Elite Daily.