2008 Woodie Awards
Investing tips for your financial future
Jenna Waite
Issue date: 3/1/07 Section: Features
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If you've heard that investing your money is a smart thing to do, you heard right. Using some of your money as an investment is an excellent way to prepare for your future. There are many forms of investments; some of them include stocks, bonds and mutual funds.
As a college student, investing is something that should be thought through thoroughly, and taken into careful consideration. The best way to decide if it is right for you at this point in time is to speak to a financial advisor. An advisor can help determine how much money you can invest, how long you should invest for, what your long term goals are, and how much risk you are willing or able to take.
One of the most common ways to invest money is through the stock market. A stock is a share, or partial ownership of a company. Companies sell stock in order to earn money. The company then pays the stockholders back dividends, which can be paid in cash or stock. The stocks are bought and sold in the stock market.
The general rule of thumb for buying and selling stocks is to buy low and sell high, because this is how you earn a return on your investment. Buying and selling stock offers the possibility of earning a higher rate of return than you would with certificates of deposit (CD's) or savings accounts.
With this possibility however, comes risk; there is a chance that you could lose some, or all of your investment. So, the higher risk you take, the greater your return will be.
Typically, when buying stocks, a person would start out with a minimum of $10,000. However, there is the option to invest less, or more than this amount. Also, it is recommended that a person should have an emergency fund containing three to six months of spending money saved before investing. This is due to the risk involved with the stock market, and the possibility of losing your investment.
Risk in the stock market can be minimized by diversifying. This means taking many small risks instead of one or two larger ones. Diversifying involves investing your money into more than one kind of stock. Also, you want to invest long term, at least three to five years. This is because when there are increases and decreases in stocks, and you sell right away during these ups and downs, you will most likely loose money.
As a college student, investing is something that should be thought through thoroughly, and taken into careful consideration. The best way to decide if it is right for you at this point in time is to speak to a financial advisor. An advisor can help determine how much money you can invest, how long you should invest for, what your long term goals are, and how much risk you are willing or able to take.
One of the most common ways to invest money is through the stock market. A stock is a share, or partial ownership of a company. Companies sell stock in order to earn money. The company then pays the stockholders back dividends, which can be paid in cash or stock. The stocks are bought and sold in the stock market.
The general rule of thumb for buying and selling stocks is to buy low and sell high, because this is how you earn a return on your investment. Buying and selling stock offers the possibility of earning a higher rate of return than you would with certificates of deposit (CD's) or savings accounts.
With this possibility however, comes risk; there is a chance that you could lose some, or all of your investment. So, the higher risk you take, the greater your return will be.
Typically, when buying stocks, a person would start out with a minimum of $10,000. However, there is the option to invest less, or more than this amount. Also, it is recommended that a person should have an emergency fund containing three to six months of spending money saved before investing. This is due to the risk involved with the stock market, and the possibility of losing your investment.
Risk in the stock market can be minimized by diversifying. This means taking many small risks instead of one or two larger ones. Diversifying involves investing your money into more than one kind of stock. Also, you want to invest long term, at least three to five years. This is because when there are increases and decreases in stocks, and you sell right away during these ups and downs, you will most likely loose money.
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