Dude! Almost every day I talk to students who ask the obvious question: “OK, Professor – we understand that you want us to get started in investing, but it all sounds pretty intimidating. If I don’t have a lot of money, how do I get started?”
It’s pretty simple, really. As I tell my students, there are many licensed financial professionals out there, and any of them will certainly do their best to help you make money; not only is that their job, but that is also how they get paid. Is it possible that they could lose your money? Sure. Are they working hard to make sure that you MAKE money? Absolutely!
My advice to students is a simple three-step process:
1. Open an account with a reputable brokerage firm.
2. Let your financial advisor educate you! Learn about risk tolerance and the types of investment vehicles that are available.
3. Invest in a growth mutual fund (or funds), diversify your portfolio, and think about your long-term goals, which should include a plan for paying down your debts and also a goal for managing your investments.
For a typical college student, that process will involve creating a personal financial statement to see where you stand currently with your assets and liabilities.
Once you have done that, the mission is simple: track your progress, and watch as your assets provide the income you need to pay down your debts.
It’s a beautiful thing!