subject: Investment options for college students [print this page] Investment options for college students Investment options for college students
Investment strategies are a far cry for most of the students who are trapped in severe debt burdens. However, at times even a small amount of $10 can contribute towards a significant investment. Those students who are earning through summer jobs can keep the money for investment purpose at a later stage. Although, these little savings cannot have a major implication on their investment portfolio, but they can at least get started with their financial management. For the beginners, starting off with even a small savings account can help them to acquire a decent financial status upon graduation. Moreover, they also got to tackle the debt consolidation programs to repay their debts. Investing is a remarkable option to have financial security provided; it is pursued with patience and discipline. Here are some of the basic investment options for the new graduates or college students:
A savings account is one of the primary places to start with. On the basis of the bank or the credit union, an annual interest of 0.1 to 0.3 percent will be paid out to the account holder. This interest amount can cover up the cost of inflation and will contribute to the purchasing power. A savings account will not require large up-front investment; an amount as small as $ 25 or $50 is enough to build a large amount by the time of graduation.
A certificate of deposit or a CD is also a good option to invest upon. Generally a CD will provide you with a fixed interest for a fixed tenure. However, premature withdrawal from a deposit account will have the students to pay a penalty fee. For instance, a large refund on the student loan check can be utilized to invest in a CD.
A money market account can also be a useful place to invest. It is basically a combination of a savings account and a CD. Although the initial amount of investment is higher in this option, it will eventually provide better return on the amount.
A stock market is not the right option for beginners or graduates; however mutual funds are a better way to invest in the stock market with lower risk options than traditional stocks. The investment can be done through a variety of sources such as online trading site or through a financial advisor.
Buying a home is actually a big task and should ideally be out of reach of a majority of students. However, the option can be considered with parental support. Instead of the rent payments, the students can carry out the mortgage payments for their own house; but if the cost of the mortgage payment still seems difficult, one portion of the house can be rented to supplement the needful.
The college students should focus on their investments from the very beginning; it will provide them with a better financial stand, if they have a small amount of risk tolerance and a dedicated mindset.
