Frankly, I am one of the few who believed that students don't invest for some of the short-sighted reasons I am most familiar with.
However, the moment I faced reality and came out of my false shell, it dawned on me that investing as a student is practically one of the best things a student can do to help not only themselves, but others as well. With that said, this post will discuss a practical guide on how to invest in stocks as a college student. Stay with me.
Investing in smart money is a generous way to get rich. You don't need all the money in the world to invest in stock trading.
Rather, you can start by setting aside the few dollars you normally spend on hamburger and cheese to invest a monthly amount in stocks. It's practically a great way to use your earnings to serve your future.
What is stock all about?
Stocks are a type of investment that means a share of ownership in a company. Investors purchase stocks that they believe will increase in value over time. In addition, stocks are securities that signify an ownership interest in a company. For companies, issuing stock is a way to raise money to grow and invest in their business. For investors, stocks are a way to grow their money and beat inflation over time.
Public companies trade their stock through the stock market exchange. In other words, investors can buy and sell these stocks among themselves through stockbrokers. Stock exchanges track the supply and demand for each company's stock, which directly affects the price of the stock.
Stock prices are not always stable, but stock investors hope that the stock will rise in value over time. This is why it is important for investors to spread their money out by buying shares of many different companies rather than focusing on just one.
When you own stock in a company, you are called a shareholder because you share in the company's profits.
What does it mean to invest in stocks as a college student?
As a college student, you get one of the best opportunities opportunities to invest in stocks with a small amount of money.
Most people think investing is reserved for the rich, it shouldn't be that way. Students should think about how they can use investments to build and secure their financial future, even before they earn a full-time job.
A stock is an investment. When you buy stock in a company, you are buying a small part of that company called a stock.
Investors buy stock in companies that they think will go up in value. If this happens, the company's stock will also increase in value. The stock can then be sold at a profit.
Investors can then buy and sell these shares among themselves through stockbrokers. Stock exchanges track the supply and demand for each company's stock, which directly affects the stock price. Public companies sell their stock on the stock exchange.
Why should I invest in stocks as a college student?
Investing in stocks brings many benefits to a college student, from its ease of access and low capital-intensive nature to its profitability. College is a great time to start investing in stocks for the following reasons.
Start with the cheap ones
Investing in stocks requires little capital to get you started. You can start by setting aside a few dollars and investing a monthly amount in stocks. This is practically an easy way to increase your earnings.
If you are a new investor and only have a few dollars, putting money into an index fund is often a good way to start. You can also sign up for dividend reinvestment or drip plans, which are offered by hundreds of large companies and don't require much money, effort or experience.
If you own at least one share or share of stock in a company that offers DRIPs, you can sign up for a DRIP and skip paying your broker's commission by buying additional shares directly from the company or its agent.
In addition, the dividends received from your shares will be reinvested in more shares or fractional shares that actually earn their own dividends. This means that over time, your stock holdings and profits can grow at an accelerated rate, and you won't have to put more money into your investments.
