4 Essential Tips for College Students Considering Investing

While juggling classes, assignments, exams, and extra-curricular activities may be overwhelming, squeezing in a little time for investments is not a bad idea.  Your budget may be stretched to the limit, but $10 a week is all you need to start. Waiting until graduation and paying off your student loans is a long wait, so why not start now? If you are thinking of investing whatever little your savings jar has, here are some tips that will guide you:


Read widely

Carrying out some research will give you perspective into what investment is all about, how they work and how best to go about it. Comb relevant sites on the internet like Investors Hangout, sign up for newsletters and get as many e-books as possible. Focus on books that offer easy-to-understand information on how to analyze mutual funds, stocks, and bonds. This knowledge will be useful when you start an investment adventure.

Take care of all your high-interest debt and build an emergency fund

Before starting to invest, you are advised to handle all pending high-interest credit cards. Paying off your debts assures you of guaranteed returns on your money, for instance, if you paid off a $1,000 credit card debt with16% interest, you would be getting some $160 since you will not pay that interest on your card. You may also want to build an emergency fund so that you have a fall-back plan in case of a crisis that is not your investment fund.

What should you invest in?

Stocks are the best investment choice for students. Right now, capital preservation is not a huge priority, and investing in growth is the reason why shares are perfect for investing in. You can invest in individual stocks or low-cost Exchange Traded Funds (ETFs) that hold stocks.

How to go about it:

There are two ways of investing: managed investments or self-directed investments. In managed investments, you hand over your funds to a professional who will handle all the technicalities for you. They will create a suitable portfolio, select individual investments and rebalance your portfolio as necessary.

For self-directed investments, you will manage your funds plus all your investments. It is more like a DIY where you do your research, choose your investments and trade in them as you see fit.  The best choice for a student would be managed investments. They enable you to have thriving ventures as you focus on your schoolwork.

There are two ways to have managed investments: mutual funds and robo-advisors. In mutual funds, you only open up an investment brokerage account and buy mutual funds through it. The better alternative would be robo-advisors. Unlike mutual funds that require at least $1,000, robo advisors work with whatever amount of cash you have. All have to do is submit your funds to your robo-advisor of choice then using a computer program, they determine the best portfolio and handle all the necessary rebalancing.


Investing as a college student is a smart way of getting yourself a safety net after you graduate. Moreover, starting now will give you valuable investment experience for later.