13 answers
sam
Student
Oceanside, California
2
Questions
Asked
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Should college students be investing their money somewhere?
#finance #JULY20
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13 answers
Doc Frick
Career Coach and Mentor
1348
Answers
California, CA
Updated
Doc’s Answer
Sam until recently, investing was a pain. If you were lucky, you’d spend an hour on the phone with a financial advisor. Then, you’d cross your fingers until the quarterly report arrived. With today’s best investment apps, all it takes is a few taps. You can receive a tailored portfolio or trade your own stocks, check your portfolio’s performance, and shift money around without ever talking to a human being.
ACORNS • https://www.acorns.com
If you want to start investing but aren’t diligent about saving money, Acorns may be the app for you. Acorns is a robo-advisor that saves your spare change for you. Link your debit and/or credit cards to Acorn and the app will “round up” purchases on these cards to the next dollar. It then invests this “change” in a portfolio of BlackRock and Vanguard exchange-traded funds (ETFs). You can gradually save and build your portfolio without even realizing that you’re doing it. There are just a handful of pre-made investment options, which makes Acorns great for investors who don’t want to spend hours scouring research and comparing stocks In addition to the spare change method, you can also set up one-time or recurring deposits in your investment account if you like. You can open a standard investment account — called Acorns Core — or an individual retirement account (IRA), Acorns Later. While you can choose from a range of portfolios from conservative to aggressive, that’s the only customization available to you. The app charges $1 a month for Acorns Core and $2 for Acorns Later. College students with a .edu email address can access Acorns Core for four years, free of charge.
ROBINHOOD • https://robinhood.com/us/en
Robinhood Markets, Inc. is a U.S.-based financial services company headquartered in Menlo Park, California. It allows individuals to purchase cryptocurrency and invest in public companies and exchange-traded funds listed on U.S. stock exchanges without paying a commission. In the future, Robinhood plans to offer banking products. Robinhood uses instant verification with many major banks, sparing users the hassle of reporting micro-deposits to an account to verify the information. Both of these apps are geared toward college students for the simple reason of time. College students typically have more expendable income in comparison to older individuals with other familial responsibilities, meaning the former age group has more money to set toward investment. Swings in the market are expected, but for those who seek to reap their gains through stock returns, there is always the looming risk of a market recession similar to the one in 2008.
STASH • https://www.stash.com/start-investing/nerdwallet20
Stash is designed to help beginners make their first foray into investing. It caters to these beginners with its ample educational content and its Stash Coach feature. Stash Coach is part game, part educational tool, and it’s designed to help you better understand investing. You can participate in customized challenges and track your progress as you amass more investing knowledge. When you first download the app, you’ll answer a few questions to establish how risk-averse you’d like to be and what your goals are. Then, the app will suggest a collection of ETFs and individual stocks for you and populate the education tab with content tailored to your situation. The actual act of building your portfolio will be up to you, as Stash only provides suggestions. However, the app may nudge you in a different direction if your portfolio isn’t diversified. You’ll need only $5 to start investing with Stash, thanks to the ability to purchase fractional shares of the 110 individual stocks available within the app. With Stash, you can open a taxable account for $1 per month, a taxable account with a retirement account (traditional or Roth IRA) for $3 per month or a taxable account, retirement account and two accounts for kids for $9 per month.
Sam you learn a lot when you start college, and often one of the most practical—and challenging—skills is keeping track of your money. From paying rent and utilities for the first time to throwing parties on the weekends when you’re trying to stick to a budget, personal finance can seem overwhelming. Luckily, these apps make it easy for even the most disorganized college student to track spending (and saving, too).
Hope this was Helpful Sam
ACORNS • https://www.acorns.com
If you want to start investing but aren’t diligent about saving money, Acorns may be the app for you. Acorns is a robo-advisor that saves your spare change for you. Link your debit and/or credit cards to Acorn and the app will “round up” purchases on these cards to the next dollar. It then invests this “change” in a portfolio of BlackRock and Vanguard exchange-traded funds (ETFs). You can gradually save and build your portfolio without even realizing that you’re doing it. There are just a handful of pre-made investment options, which makes Acorns great for investors who don’t want to spend hours scouring research and comparing stocks In addition to the spare change method, you can also set up one-time or recurring deposits in your investment account if you like. You can open a standard investment account — called Acorns Core — or an individual retirement account (IRA), Acorns Later. While you can choose from a range of portfolios from conservative to aggressive, that’s the only customization available to you. The app charges $1 a month for Acorns Core and $2 for Acorns Later. College students with a .edu email address can access Acorns Core for four years, free of charge.
ROBINHOOD • https://robinhood.com/us/en
Robinhood Markets, Inc. is a U.S.-based financial services company headquartered in Menlo Park, California. It allows individuals to purchase cryptocurrency and invest in public companies and exchange-traded funds listed on U.S. stock exchanges without paying a commission. In the future, Robinhood plans to offer banking products. Robinhood uses instant verification with many major banks, sparing users the hassle of reporting micro-deposits to an account to verify the information. Both of these apps are geared toward college students for the simple reason of time. College students typically have more expendable income in comparison to older individuals with other familial responsibilities, meaning the former age group has more money to set toward investment. Swings in the market are expected, but for those who seek to reap their gains through stock returns, there is always the looming risk of a market recession similar to the one in 2008.
STASH • https://www.stash.com/start-investing/nerdwallet20
Stash is designed to help beginners make their first foray into investing. It caters to these beginners with its ample educational content and its Stash Coach feature. Stash Coach is part game, part educational tool, and it’s designed to help you better understand investing. You can participate in customized challenges and track your progress as you amass more investing knowledge. When you first download the app, you’ll answer a few questions to establish how risk-averse you’d like to be and what your goals are. Then, the app will suggest a collection of ETFs and individual stocks for you and populate the education tab with content tailored to your situation. The actual act of building your portfolio will be up to you, as Stash only provides suggestions. However, the app may nudge you in a different direction if your portfolio isn’t diversified. You’ll need only $5 to start investing with Stash, thanks to the ability to purchase fractional shares of the 110 individual stocks available within the app. With Stash, you can open a taxable account for $1 per month, a taxable account with a retirement account (traditional or Roth IRA) for $3 per month or a taxable account, retirement account and two accounts for kids for $9 per month.
Sam you learn a lot when you start college, and often one of the most practical—and challenging—skills is keeping track of your money. From paying rent and utilities for the first time to throwing parties on the weekends when you’re trying to stick to a budget, personal finance can seem overwhelming. Luckily, these apps make it easy for even the most disorganized college student to track spending (and saving, too).
Hope this was Helpful Sam
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Mason Petrosky
Assurance Intern at PwC
1
Answer
Latrobe, Pennsylvania
Updated
Mason’s Answer
I would certainly recommend starting to invest in college. As others have mentioned there are many options to begin investing, but given your young age, I would recommend investing in stocks rather than bonds. These have relatively higher volatility, but because we are investing for the long-term, we will take advantage of this trade-off to increase our total return. As for what to invest in, Warren Buffett suggests that you pick 3-5 stocks that you believe will survive and thrive in the long-term. These are stocks that are not flimsy to current trends and can endure crises. Some examples are Apple, Microsoft, Amazon, Facebook, etc. As for the logistics of investing, I prefer to use Stash because it supports fractional share buying. This means that even though Amazon stock costs over $1,000, you can buy whatever dollar amount you wish, and Stash allocates the proportion of a share that you can afford. Best of luck!
Hristo Georgiev
Business analyst
8
Answers
Sofia, Bulgaria
Updated
Hristo’s Answer
Dear Sam,
It is great to see such a young person thinking about investments.
Let me start with one thing I’ve learned in my career – the best place to invest is in yourself. At least at the beginning of your career, your salary will be the main source of income, so make sure you maximize it.
There are many free sources but in case you need to improve some of your skills do not hesitate to enroll in a paid course. Also, I would advise you to subscribe to some of the established and proved sources of information (FT, WSJ or some national newspaper). This will expand your horizons and sharpen your critical thinking.
Once this is done, I would encourage you to start investing. If you start young, you will enjoy the power of the compounding which will deliver just miracles. A good place to start is some low-cost index fund like Vanguard 500 Index Fund ETF through some established investment broker (e.g. Interactive Brokers and eTrade). Do not worry if the broker asks for a small commission – if you want to go far go with the best in the industry. This will give you peace of mind.
If you try to build your own portfolio, make sure you have the required skills and mindset to do so. Investment in the stock market is difficult, otherwise everyone would have been sitting in front of the monitor and picking stocks all day long.
But the most important is consistency – save every month and invest the surplus regularly. There will be bull markets and bear markets but if you weather the storms, you will have some nice nest egg.
All the best!
It is great to see such a young person thinking about investments.
Let me start with one thing I’ve learned in my career – the best place to invest is in yourself. At least at the beginning of your career, your salary will be the main source of income, so make sure you maximize it.
There are many free sources but in case you need to improve some of your skills do not hesitate to enroll in a paid course. Also, I would advise you to subscribe to some of the established and proved sources of information (FT, WSJ or some national newspaper). This will expand your horizons and sharpen your critical thinking.
Once this is done, I would encourage you to start investing. If you start young, you will enjoy the power of the compounding which will deliver just miracles. A good place to start is some low-cost index fund like Vanguard 500 Index Fund ETF through some established investment broker (e.g. Interactive Brokers and eTrade). Do not worry if the broker asks for a small commission – if you want to go far go with the best in the industry. This will give you peace of mind.
If you try to build your own portfolio, make sure you have the required skills and mindset to do so. Investment in the stock market is difficult, otherwise everyone would have been sitting in front of the monitor and picking stocks all day long.
But the most important is consistency – save every month and invest the surplus regularly. There will be bull markets and bear markets but if you weather the storms, you will have some nice nest egg.
All the best!
Brian Xu
Financial Analyst
24
Answers
Raleigh, North Carolina
Updated
Brian’s Answer
Yes, honestly no matter what stage in your life as long as you have savings, they should be invested somewhere. It is important to invest according to your preferences; meaning, whether you want to be risk-averse or invest more riskily. I would advise to do your research on what kind of investing you would like to do, and probably talk to someone who has a lot more expertise on the subject, such as a financial advisor.
Noah Kness
accountant
1
Answer
Lutherville-Timonium, Maryland
Updated
Noah’s Answer
Yes, I recommend doing your research first by reading books like "A Random Walk on Wall Street." There are so many resources all over the internet these days to learn about investing. Utilize apps like robin hood or acorn to dip your toes in before investing a larger sum of money in a traditional brokerage account. There are many mutual and index funds that are very low maintenance to begin investing in. I recommend the Vanguard SP500 (VOO) index because of its low expense ratio and low maintenance .
Alvydas Lenkauskas
Consultant
4
Answers
Orlando, Florida
Updated
Alvydas’s Answer
Hi,
There is a saying in the investing world "Time in the market beats timing the market". Meaning the sooner you start investing the better. Since you are young you can go for a more risky investment. If you are more risk averse you can keep buying index funds like VOO which track the market.
Thanks
There is a saying in the investing world "Time in the market beats timing the market". Meaning the sooner you start investing the better. Since you are young you can go for a more risky investment. If you are more risk averse you can keep buying index funds like VOO which track the market.
Thanks
Steve Swisher
Procurement / Supply Chain Category Manager
35
Answers
The Woodlands, Texas
Updated
Steve’s Answer
One of the great investments Index Fund is FXAIX last couple years. This fund is tied to S&P 500 and can be easily added to your investment portfolio anytime during regular US trading hours. This fund has shown nice growth along with S&P this year, even with the COVID-19 pandemic. You can use platforms like Fidelity, TD Ameritrade and others to action this purchase. Take your time, and do your due diligence before investing in any fund, stock or ETF.
Happy investing!
Happy investing!
David Greenberger
Student
2
Answers
Columbus, Ohio
Updated
David’s Answer
Hi Sam,
In my opinion, if you have some extra money it is always smart to be investing it. I am not sure how much you know about investing, but it is really easy to get started in today's world. Two of my favorite investment apps are Robinhood and Acorns. Both of these are great choices if you are trying to learn more about investing and do not have a lot of previous experience. Robinhood has a very easy interface to work with. It is really easy to do the basics of investing in companies, but also has some great features for options. It is a very versatile app that has a lot of options for all levels of experience. I really like Acorns because of the roundup feature. Everytime I use my debit card it rounds to the nearest dollar and takes the money to invest. So if I bought something for $4.60, Acorns would invest $.40 for me. Although I do not have a ton of money saved in this account it is really nice to have some passive investing where I do not have to actively watch the money.
In my opinion, if you have some extra money it is always smart to be investing it. I am not sure how much you know about investing, but it is really easy to get started in today's world. Two of my favorite investment apps are Robinhood and Acorns. Both of these are great choices if you are trying to learn more about investing and do not have a lot of previous experience. Robinhood has a very easy interface to work with. It is really easy to do the basics of investing in companies, but also has some great features for options. It is a very versatile app that has a lot of options for all levels of experience. I really like Acorns because of the roundup feature. Everytime I use my debit card it rounds to the nearest dollar and takes the money to invest. So if I bought something for $4.60, Acorns would invest $.40 for me. Although I do not have a ton of money saved in this account it is really nice to have some passive investing where I do not have to actively watch the money.
Dayna DelMastro
grad student
2
Answers
Melrose, Massachusetts
Updated
Dayna’s Answer
When taking out loans there are a lot of things to consider such as the school reputation, the career you want, the salary of the career, the current job market, the city you want to work in, etc. You also have to consider the type of student you are, will you have the time to make the commitment to school, will you put in the time to study, will you take classes seriously, etc. I think as long as the average future salary in the field you'd like to study and the area you'd like to work is relative to the amount of the loan you have to take out you should go for it. I view loans as an investment in myself and in my future.
Cullen Engle
Assurance Intern / Student
2
Answers
Pittsburgh, Pennsylvania
Updated
Cullen’s Answer
This all depends on your current financial situation. If you are a student with a low disposable income and are incurring student debt, it is a good idea to instead keep your money where you can use it when needed instead of investing it. Even though there are many options for inexperienced people to invest there money in real-time, this also ties up your money for periods of time that will make it harder if you need to use it to pay expenses or buy necessities.
If however you have substantial disposable income and aren’t in a place of financial stress, it is never a bad idea to do some research and then invest your money so that it can work to make you more money.
All in all, only look to invest money that you know you won’t need within the next sixty days. That’s me rule of thumb.
I hope this helps.
If however you have substantial disposable income and aren’t in a place of financial stress, it is never a bad idea to do some research and then invest your money so that it can work to make you more money.
All in all, only look to invest money that you know you won’t need within the next sixty days. That’s me rule of thumb.
I hope this helps.
Carlos Luis
Intern
2
Answers
Miami, Florida
Updated
Carlos’s Answer
College students should invest some of their money in stocks or bonds if they are not spending the money. Typically, in stocks mutual funds is a great way to get a safe and solid return on your investment. The same goes for bonds. College students will learn the importance of saving and investing through investing some of their money in college.
Josiah Pena
Intern
2
Answers
Concord, California
Updated
Josiah’s Answer
Sam,
It is great to be thinking of how and when to invest your money, especially while you're in college. The biggest mistake i see young people making with investments is investing before they have a solid savings/emergency fund account. Many recommend having at least a 3 month emergency fund, which means it is enough money to cover your living expenses for three months (rent, food, gas, insurance, etc.) in case something were to happen to your main stream of income. This is the most important part of investing, please do not skip it.
If you already have an emergency fund, go ahead and educate yourself on the basics of the stock market, such as "What is the S&P 500" or "What does portfolio diversity mean?" This information can be found on www.investopedia.com . From there, I would recommend that you take a look at either Acorns or Vanguard. These are platforms that will allow you to invest your money in mutual funds, etfs, and bonds. Your goal as a new investor should be to avoid risk. Stay away from platforms like Robinhood, do not try to pick your own stocks and time the market. Unless you are really savvy with the stock market, you will generally lose money over a long period of time, and you will never beat the market over an extended period of time.
Good luck with everything and I hope this helps!
It is great to be thinking of how and when to invest your money, especially while you're in college. The biggest mistake i see young people making with investments is investing before they have a solid savings/emergency fund account. Many recommend having at least a 3 month emergency fund, which means it is enough money to cover your living expenses for three months (rent, food, gas, insurance, etc.) in case something were to happen to your main stream of income. This is the most important part of investing, please do not skip it.
If you already have an emergency fund, go ahead and educate yourself on the basics of the stock market, such as "What is the S&P 500" or "What does portfolio diversity mean?" This information can be found on www.investopedia.com . From there, I would recommend that you take a look at either Acorns or Vanguard. These are platforms that will allow you to invest your money in mutual funds, etfs, and bonds. Your goal as a new investor should be to avoid risk. Stay away from platforms like Robinhood, do not try to pick your own stocks and time the market. Unless you are really savvy with the stock market, you will generally lose money over a long period of time, and you will never beat the market over an extended period of time.
Good luck with everything and I hope this helps!
Reese Schader
Tax Associate
1
Answer
Boston, Massachusetts
Updated
Reese’s Answer
One big factor to consider is the amount of student loans you will have to pay off. It is essential that these loans be paid off as quickly as possible as the high interest rates on the loans can be quite a burden as they continuously expand. Focus on finding ways to start providing income while still in college with different side-hustles (there are plenty of easy entry jobs available) and continue to preserve that cash. If you manage to have a little extra cash saved up every week or month per say, it could be a smart idea to put that cash into a strong index fund such as the $SPY. As a new investor, it can be very challenging to pick out individual stocks and make money, especially if you do not have the time for extensive research about a company. Investing in index funds and ETFs is a more reliable way because you will be making what the market provides while also collecting dividends. Overall, focus on paying off debts so you are not bound by the interest, and begin investing in safer investment choices like index funds.