Investing 101

Today, I would like to focus on Investing. As college students, we are quick to splurge once we have our hands on a chunk of change, and never think to invest it. How many of us blew $4,000 of refund money. Just me. Oh. Well, Investing allows opportunities to grow our money; turning $20 to $200 by making your money work for you.  It can sound complicated, but in this day and age, it's as simple as clicking a link. You no longer need to hire a broker because everything can be done online. Investing comes in many forms such as an FDIC savings account, savings bonds, mutual funds and stocks.


Investing can begin with saving. Creating a savings account that offers .1 to .3 percent interest is a great way to generate extra money. Set aside a desired amount and period of time you'd like to put aside to save. Do you want to put $10 a week in your saving or $50 a month.

Another way to invest is by creating a short term CD, or certificate deposit. This requires a little  more money, but if you have it, it's a great way to generate a lot of interest. Similar to a savings account, a CD allows you to save money while it generates interest. You can choose the length of time you would want to hold it which can vary from a month to 3 years. Unlike a savings account, you are unable to withdraw any money from it without paying penalty fees.

If your goal for investing is short term such as getting a new car or moving into a new place for the summer, look into bonds or CDs. Long term goals should focus on stock market investments because they take a longer time to generate income.


Getting Started -

First, plan out how much money you would like to set aside for investment and how often. Would you like to invest money weekly, monthly, annually? Be sure to understand that investing requires risk. Analyze how much you can afford to risk. You can begin with a small amount like $20 or $25 to start and increase the amount over time. 

Next you will need to understand the basics of investing. Understanding the terms and conditions is imperative in knowing what, where, and how to invest properly. You can learn more here. 

Stocks - 

Check out sites such as Zecco.com and Sharebuilder.com where you can buy cheap stocks and pay less than $10 in commission. Tip: save up a generous amount in your savings, and invest larger amounts of your savings each month. This way you are not touching your disposable income. Instead of jumping straight into the tedious stock market, you can start by trying out ETFs. ETFs or index funds act like stocks, but it's actually a tiny share of the specific market.

So it's simple, begin by creating a savings account and save up to a generous amount. Next, invest the amount you are wiling to risk into the stock market by buying a low priced stock or ETF. And watch your money grow. Be sure to do research on the stocks you have interests in and keep up with how they are doing. This is a process and you won't see money right away, but trust me you will. Remember, scared money don't make money. So instead of splurging your refund on food and electronics that will break in a year, invest it. It'll be worth it.