Lux Investing
Best investing strategy for students?
I'm a student in college and want to get into the world of investing. I hear people talk about putting $1 in an account and a hundred years later, it is compounded into a large amount for the future generation of the family. I do not have a lot of savings as I'm only a student, what are some tips/ strategies you expert would suggest is best for a college student to take or start with?
Public Comments
- get a CD. i have one and the int rate is about 5-6%. it doesn't grow too fast, but it is faster than a savings account. the only thing is that you cannot acces the money within until the CD is mature (avg. 10 months)
- well you need savings and your student loans will eat you alive when you get out. I would start off simple open an online bank account and from time to time put what you can into it. You won't get rich but at least you'll have a little something for the real world. Good Luck.
- I wouldn't get involved with the stock market until you have at least $2,000. As mentioned before, CDs and online savings accounts are a great way to build up your money. I'd further suggest opening an account with a high yield and from time to time looking for banks that offer better rates. HSBC, FNBO, and ING have been good to me and all offer high yielding online savings accounts.
- Here's my quick and dirty guide to investing in the stock market. Stocks tend to outperform other asset classes over the long haul--for example the stock market went from something like 43 to 12,000 during the 20th century. 1) Open a brokerage account. Scottrade, tradeking, etc. Find one with low fees and that won't charge you an 'account maintenace fee' simply for having an open account. The two brokers listed above should fit the bill. 2) Buy exchange traded funds. These are mutual funds that trade on the stock market, and effectively let you own a large number of stocks easily. Two funds that track the S&P 500 (the 500 largest US stocks) are the iShares (IVV) fund, and the SPDR (SPY) fund. This ensures that you'll be properly diversified (ie you can't accidentally pick the next Enron) and saves you the trouble of researching individual stocks (I enjoy it but most people don't...) You obviously have a long term bent, which is good. Buy these and hold them, adding to the position whenever you can, and it should eventually turn into a very sizeable amount of money. One final note: I would recommend saving up at least a few hundred dollars before you invest. Brokers generally have a flat fee to buy stocks $5-$12. If you invest very small amounts-- say $100 bucks-- the cost of buying and selling the shares can really add up. Hope this helps. Good luck.
