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Would you like to start your path to wealth and financial success? You can take control of your financial future early by investing while you’re in college or grad school. Many investment vehicles are well suited for college students, providing low-cost opportunities with the potential for a solid return on your investments.

As a college student, you have a strong advantage over older investors in that you have much more time to work with. Time is money when it comes to investing, simply due to compound interest and business growth.

The first step to investing while you’re still young is to keep learning about various aspects of investing as you go. The more you know about investments, the better you’ll fare in the long run.

There are a wide variety of different types of investments. Finding the right investment vehicle for your needs and desires means knowing what’s available to you.

Here are some simple ways to start investing as a college or grad student:


1. Start small

Begin with a small investment, like $25 or $50, and increase how much you invest over a period of time as you become more comfortable. Starting small will help you build an investment portfolio without wearing yourself too thin, too quickly.

Some investing platforms like M1 Finance don’t charge any fees and allow you to start your portfolio with very little money and buy fractional shares. On top of that, M1 offers a checking account with a 1% APY and 1% cash back. Click here to receive $10 to get started with a free M1 account.

Another popular platform for U.S. investors is Robinhood, which allows people to start investing with very little money. If you’re interested in joining Robinhood, click here to get free stock (value $5 – $50).

If you are an international citizen, you might want to check out eToro, which is an investment platform that operates in many countries. Nexo is mostly a crypto platform, but it can be used as a savings account since it offers 8-12% in interest per year on currencies such as EUR and GBP. This is significantly more than what traditional banks offer, which is usually less than 0.50% in annual interest.

Because it’s not a bank, Nexo does not offer government guarantees for your savings, however, their funds are substantially insured by private insurance to reduce any risks. Nexo is European-based, but it’s available to citizens of different countries. If you’re interested in opening an account with Nexo, click here to get $25 in BTC to get started.

2. Calculate risk

Know ahead of time how much risk you’re willing to take when it comes to your money and investments. All personal finance investing will come with some risk. How much risk are you willing to take on? How much risk does each investment demand?

If you are a risk-taker, then the risk of losing money may be outweighed simply by the prospect of seeing a positive return on your investment. Taking risks is a part of investing that you may simply have to accept. Consider growth stocks from solid tech and innovative companies growing at exponential rates. These stocks can be risky but also highly profitable in the long term.

If you’re looking to avoid as much risk as possible, then choose safe investment vehicles like federal savings bonds, savings accounts, and certificates of deposit (CDs). These low-risk investments offer smaller rewards but the tradeoff is worthwhile for many investors because of the increased security.

3. Grow your money over time

Long-term investments usually pay off. The stock market can be volatile and unpredictable, and the best way to manage this volatility is by having a long-term investment strategy.

If you hold your investments for 5-10 years or more, you will most likely see your investment portfolio grow despite some periodic downturns. This is why it’s better to start investing as early as you can.

Short-term investments held for less than a year will be riskier and will incur higher taxes on capital gains (your returns). That means less money for you.

4. Diversify your investments

Since there are a wide variety of different investment vehicles to explore, you may want to choose stocks from different industries.

For example, you may want to add some blue chip stocks to your portfolio (Blue chip companies are usually established and have a long history of financial performance) and some growth stocks that may be a bit riskier but could also be more rewarding in the long term (Think Apple or Google).

You could also add mutual funds since they offer access to stocks, bonds, and a number of other security types and involve investing as a group rather than on your own. Diversify your investment portfolio rather than putting all your eggs into one basket. This way, if one investment doesn’t perform, you have others to fall back on.

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5. Invest in yourself

Read as many books and take as many courses as you can on personal investing. Keep researching new opportunities and follow the companies you invest in to see whether their growth is solid and their financials still make sense to you.

You will notice that your portfolio may “lose” some value during economic downturns. If the company is solid, the stock will most likely go up during boom times. This is why a long-term investment strategy is usually recommended.

Remember, during bad times, you don’t lose unless you sell. So do your research and stay on top of investing and financial trends.

The Bottom Line

Investing always carries some inherent risk, but many investment vehicles offer low risk and fair returns. As a college-aged investor, you have time on your side. Use this to your advantage to invest in long-term investments with substantial return potential.

Above all else, consider diversifying your investment portfolio. What this will do is protect you from serious losses by allowing you to invest in a variety of different investment vehicles rather than one single investment type.

With a diversified portfolio that you continue to add to on a regular basis, you’ll graduate from college or graduate school with an established firm financial footing.

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About the Author: Denisse Romero is an educator and investor with degrees from Harvard University and The George Washington University. Denisse has a degree in business, worked as a financial advisor, and held a series 7 securities license before starting a career working with international organizations. She enjoys writing and advising students on different topics that may help them achieve their personal, academic and career goals. This article does not constitute financial advice.

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