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Is The Stock Market a Good Place for A Student to Earn First Money?

Is The Stock Market a Good Place for A Student to Earn First Money?

So, you hustled this entire summertime and now have a little more money in your pocket, perhaps $500 or so. If that's the case, well done! Do you want to use that $500 on beer for the rest of the year? Do you reinvest in college, or do you save it? What do you do? This is a great question to ask so I’m glad you’re here. Not many students ask such questions but those that do end up successful. 

Why Should I Start Investing During College?

Let's begin with reasons you should start saving for college. Time is a major factor, as I’m sure you can already tell. Market experience trumps market timing, so this is why starting now is a great idea. The most effective strategy to build your wealth is to give it time. The sooner you begin investing, the more chances you’ll have to grow your investments. 

Unfortunately, many college kids are greedy; seeing your $500 investment rise to only $590 by the end of the year isn't appealing, I know. While it's exciting to see your cash rise by $90, it's hardly mind-blowing, which might be disappointing for some.

Keep in mind that the true improvements will be seen in the years to come, not now. Instant gratification does not help you in this scenario. This about it this way – you have a 10-year advantage over someone else if you start investing at the age of 18 rather than 28. Discover how much you'll need to invest each year to reach $1,000,000 by the age of 65. Calculate it and if the numbers look appealing now, then maybe you should consider investing. 

As you've seen, if you actually start investing at the age of 18, you will be a billionaire by the age of 65; that, if you invest roughly $2,000 every year. The older you grow, the higher this figure becomes. If you wait until you're 30, for example, you'll need to invest $7,000 per year, or more than three times the sum. I personally believe that most college kids can save $167 monthly by working part-time while in college.

Did you know that many students earn a lot of money using the stock market, so they often do not have enough time to complete various study assignments? When I was a student, in order not to be distracted from making money, I wrote to professional writers on studyclerk and asked them to write a research paper for me, and they very quickly and efficiently fulfilled my wishes by writing a high-quality essay for me. Getting online help when you’re on the verge of making bank is another worth-like investment. 

Where Can I Open an Investment Account as a Student?

The quickly-paced tech environment has changed the way in which we look at investing – now, investing in the stock market is pretty much accessible to everyone at a relatively cheap cost, if not for free. The days in which we sat down with an "asset manager" to map out a plan for our investments are long gone. 

There are several online spots where you may trade and buy shares for free these days. There are free apps available that enable you to invest. Depending on how you wish to invest and what your goals are, we have several suggestions for where you should start. Check them out.

1. Robinhood

If you want to buy individual stocks or check out trade options, Robinhood is a terrific choice. This isn't advised for new investors; however, their app is completely free, which is fantastic. The disadvantage of Robinhood is that it does not enable partial share trading, which makes it difficult for new investors with limited funds to begin. You can find out more about Robinhood by checking their website.

2. Fidelity

Fidelity is through our favorite providers since it offers a broad range of services and scales up as you trade and accumulate more wealth. This platform also provides several free investment choices, such as no IRAs and no-commission ETFs. 

Is The Stock Market a Good Place for A Student to Earn First Money?

3. M1 Finance

M1 Finance is a ground-breaking tool that enables you to invest in equities and exchange-traded funds (ETFs) for $0. You may create a wallet and have it automatically trade for you! It's a fantastic place to start if you don’t want to spend any money for now. M1 Finance can be found here.

What Account Should I Open as a Student?

The first step you'll need to take if making investments is new to you is open up a stockbroker account. Investing shouldn’t be done at a bank; it has to be done somewhere else, even if your bank might offer to do it for you. To get started, we suggest M1 Finance or Robinhood, but also Fidelity (see above). There are your options once you sign up for an account on any of these platforms. 

Cash account
Traditional IRA
Roth IRA
Margin account

Wrapping Up

So, what's the best course of action? A Roth IRA is your best bet if you wish to start planning for the future now and you got your own income (that means you earned it, not your parents). The justification for this is that the taxes you pay today on your salary are so low that you will save a lot of money in taxation when you retire. 

A cash account, on the other hand, is a terrific place to start if you wouldn't want to lock up your wallet for 40 years. So, it depends. Make sure you make the right choices by studying the market before making any big decisions.

Author Bio:
Angela Boggs is a freelance writer and part-time investor. She works for a marketing company, writing excellent content. In her free time, Angela studies Spanish and offers guitar lessons to students worldwide.