It’s not easy leading a college life, most people leave their families for the first time when they move to college, which can be a stressful experience on its own even without bringing in the need to take care of yourself in every possible way. One of the greatest challenges that students have to face is obtaining financial means to sustain the years to come. Every stream of income is most welcome, however, active work often doesn’t agree with the academic obligations which leave most students in search for a passive source of income, but the investment opportunities are volatile. Therefore, we have crafted a short investing for college students guide, that might help you come up with a few ideas of your own.

Safety first

With every investment comes a risk of losing some or all of the money you decide to inject in an idea or project. It doesn’t matter if your strategy is to make a single investment or decide to invest smaller amounts of money on a monthly basis, it’s important to be on alert and never invest more than you can afford to lose. Depending on your financial situation at the time, you could operate with a significantly large or a lesser amount of money, but either way you should be cautious, and plan your investment process from top to bottom.

Always keep a backup plan

Don’t wait until you’re all out of cash because you’ve “betted on the wrong horse” (metaphorically I mean, gambling is not a good investment opportunity) to think about your next steps. Keep a backup plan, a set of activities that would bring you some profit while you get back on your feet again. You might consider freelancing from time to time, or if you’re a gifted scribbler, you might think about writing paper assignments at AU Edubirdie or some other writing agency, just make sure it’s something you can dig in as soon as it’s possible. The last thing you want is coming up the empty pocket and with no idea what to do next.

Settle existing high-interest debts

It might sound debatable how investing in college debts can represent the priority over making a decision to invest in a fresh opportunity. Nevertheless, there is one simple truth – investing your money in a business or product doesn’t guarantee the return of your funds. Moreover, by paying off your existing debt in full, you will avoid paying an interest rate, which could be somewhere between 10 and 15 percent, depending on your bank, type of loan, and other involving aspects. In other words, just by paying off your debt before time, you’ve made money-which is the point of any investment.

Remember, this only goes for debts with high-interest rates, in case you’re dealing with 1-3 percent then it doesn’t really pay off to box your money into a debt that’s not going to get significantly larger in the future.

Choosing a brokerage

Once you go through the essentials, it’s time to choose your broker. There are practically two major choices that you can make:

  • Online discount brokers
  • Traditional brokers

Online discount brokers allow you to set up a user account online and use a series of automated solutions in order to manage your investments. Most commonly you’ll manage your trade online with the chance to start with a smaller sum, and pay your broker a certain fee for every sell or buy that you make.

On the other side, traditional brokers provide a person to person approach where you get advice from your broker, who also manages all your trade decisions. The downside is that these guys usually ask for a larger sum of money from the start and charge higher fees. Furthermore, you don’t get as nearly the accessibility level you’d have with the online option as most of them provide mobile support and 24/7 customer support.

How to actually invest

There’s no formula for safe methods of investing that can make you a millionaire overnight, if there was one then all of us would be swimming in cash right about now. However, there are a few pointers that should guide you through your initial trades.

Don’t place all your money at once in one place, no matter how lucrative the opportunity might appear. Remember the crisis of 2008, when the market hit rock bottom in just a few months? That was not a good time to have your entire life savings invested in Dow Jones. It’s difficult to time the purchase perfectly and sell at the best moment – this kind of investing is risky. Better make smaller investments over a period of time, this way you won’t risk losing your entire investment fund before you even get the hang of the business.

The best thing to do as a starter is to diversify your portfolio which, translated into English, means to invest smaller amounts of money in several positions.

Investing in different types of asset can turn into a meaningful passive income source or even turn into a career choice. It’s important to stay informed, play safe, and have the courage to venture into the unknown sometimes. Hope you had the chance to learn how to invest as a college student, and have a clearer vision of your investment choices.

Bio: Nicholas Walker is a freelance content writer, creating the lifestyle, business, and marketing content for several respected publishers. Nicholas seeks to provide easy to understand tips and pieces of advice to a wide array of audience. His posts are directed to people who want to learn and improve themselves.