Simple Investment Ideas for Students
Students don’t always have a lot of extra money lying around. However, with what money there is, it can be a good idea for people at this stage of life to start investing. As we put it our money saving tricks for students, “money saved may not appreciate much unless it is invested in a system that can make it grow or increase.” Students and young people just starting their professional careers are often advised to save. But investing can help savings to actually generate more money over time (albeit with some risk).
The difficulty is that a lot of students are largely unfamiliar with investing practices, and don’t have the money to pay for professional brokers or auto-trading platforms. These are simple issues, but they do deter a lot of people from exploring investment opportunities. To stop that from happening though, we’ve put together some ideas for how students can invest even with limited funds and experience.
Open a Savings Account
A lot of young people today have a tendency to keep money in checking accounts, but not to set it aside for savings (or growth). Experts on financial savings estimate that by 30, people ought to have roughly the equivalent of a year’s salary stored away in savings; by 35, it should be twice that amount. It’s not necessarily easy to reach those numbers, but by opening a savings account, young people can essentially begin to invest the money they’re not using.
Most standard savings accounts have minimal return rates, but they do appreciate marginally, making them more effective than simple checking accounts. Additionally, there are certain types of “high-yield” accounts that can appreciate more significantly with certain conditions.
Trade Stocks on an App
A lot of students and other young people are scared away from the stock market because it’s expensive. You often can’t open an account without a fairly hefty initial deposit, and even the practice of making trades involves fees that can add up. Like seemingly everything else these days though, this process has been simplified by mobile apps. Today, several of these apps — some relatively new, and some from established trading providers — offer low-fee and small-amount investment opportunities. Basically, they give students ways to buy into the stock market even with limited wealth at their disposal.
Trade Stocks via CFDs
Another way for students to get into the stock market with less complication and expense is to explore stock share CFD trading. In addition to being a different method of trading (revolving round price movement rather than share holdings), CFD trading can be done with a fairly small account — as well as with leverage. This means you can open an account with relatively little money, but trade with significantly more, potentially amplifying gains. The losses can be compounded by leveraged trading as well, so it’s important to be careful. But the general conditions of CFD stock trading can still be appealing to young people seeking simplicity and affordability.
Buy Non-Stock Assets
This is a wide-ranging idea, but it’s also wise for students and young adults to recognize that they don’t have to look to stock market assets if they’re exploring investment. Commodities, startup investment, cryptocurrencies, real estate, and even fine art can all be investment options as well — and for the most part they’re not as complicated as one might expect. In most cases there are apps and online services that have streamlined the process of investing in these types of assets, which means convenient, low-fee options are out there.
Invest In Collector Items
Finally, there are collector items to consider! This can be a little bit more of a long shot, and it’s also something that’s unlikely to pay off for quite some time. But young people who are interested in setting up their financial futures would do well to look to the past and identify some possible options in this category.
As an example, consider the value of Beanie Babies — distinct stuffed animal toys that were popular with children in the ‘90s. Beanie Babies weren’t obscure toys only parents and kids knew about; they were a sensation, akin to Pokémon cards or some similar toys and collectibles. And now, some Beanie Babies in good condition are worth as much as some people make in a year! Now, it’s not always easy to identify in the present a toy or collectible that will catch on quite like that. But from best-selling books to new toys, an early-edition item in perfect condition is worth stashing away. It might bring a hefty return in 15 or 20 years.