There are many things that you could do as a student outside of the four corners of the room. You should always be prepared and start to learn by yourself before you even start to face the real world. This way, you’d be properly equipped with the right things in order for you to succeed in life. You can’t just depend on the lectures that are being taught inside the classroom, as there is so much more to life that would surprise you.
Focusing on a single aspect, financial literacy usually comes with facing the real world. You don’t get a lot of lessons on how to handle your finances when you’re a student, and you’re left to fend for yourself once you get outside. Because of that, it’s important to learn different financial concepts as early as now. You could even start practicing with some of them, learning the ins and outs of financial activities. Utilizing a Chase sign-up bonus when opening up a chase bank account, learning about cashback and credit scores, and even investing could all be things that you can explore as a student.
Getting more specific, we’ll explore the world of investing in this article. Moreover, we’d align such a topic with the situation that an average student would find himself or herself in. Investing as a whole can go very deep, and it’s easy to get lost in arbitrary complications to the topic. In order to keep things concise and simple, we’ll talk about some of the best investment activities to be started by beginners.
What is investing?
Investing is essentially putting money into a company or stock and aiming to grow that money along with the company. It’s a very complicated topic, and you could start investing in many ways. However, below are some of the best entries to the investing space if it’s your first time.
Low-cost index funds
Low-cost index funds are one of the best areas for a beginner to start investing. In the world of investing, there are different ways that you could start putting your money into a company. The concept of an index fund is basically where you pool money together along with different people before somebody that manages such money invests in a specific company. This is a good way to start investing for beginners because the barrier of entry to investing as an individual is very high.
Buying shares of a specific company you’d want to invest in may not be within your budget, so a low-cost index fund is the way to go. Another advantage of low-cost index funds is that they have very low annual expenses and management fees (hence the name), so it’s quite easy to start here.
Another advantage of starting in low-cost index funds is that you’d be exposed to different companies, market activities, and diverse interactions between many variables without getting too overwhelming. It’s essentially a great starting point where you’d get the experience minus the high fees and risks you’d get in different types of investments.
Real Estate Investment Trusts (REITs)
REITs are simplified, easier paths of investing in real estate. Real estate is a very fun and diverse arena to invest in, so it’s a good idea to look into the space. You could start investing in real estate by buying out a place and renting it out, buying a piece of land with an appreciating value over time, or even buying a bare house, refurbishing it, and selling it for a higher price. However, these types of investments cost a lot of money and are very hard to maintain for a student. This is where REITs enter. REITs are basically companies that do real estate investing for you. They do the managing, buying, and renting out of real estate properties while you’re the one who will be pooling money with them. That way, your entry wouldn’t be as hard as doing it yourself.