BY MELISSA BURNS
Finding your passion during student years comes naturally to some people, while others find it later in life. Among every student generation, there are always a few students who enjoy learning about the finance world and dream of becoming one of the professionals on Wall Street.
As much this might seem like just a fantasy, students nowadays have plenty of options to start investing their money to ensure a better future for themselves. If you’ve found yourself in this introduction, keep reading as we bring you useful tips for student investors.
Read books about finance
Use your free time to educate yourself more about the financial world. Go to the library and start reading books which will provide you with a deeper understanding of how things work regarding financial institutions, money flow, global trends, investment, etc. These books will help you understand terms which are not used in everyday life but are very helpful once you learn them. As it is with everything new, you have to start from the basics, so find books that are written for young people like yourself who are enthusiastic to learn more about the finances.
Learn more about RSI
The Relative Strength Index, or RSI, is a commonly used concept in online trading. It’s actually a technical indicator used in financial market analysis, and just like any other financial concept, it can seem pretty confusing in the beginning. However, it’s vital to understand it if you wish to be successful at trading and make well-informed, beneficial financial decisions. As these concepts can be very complicated for students and young people, you will be able to find useful guides on RSI, such as the one by online broker Easy Markets. It will help you learn how to apply and trade RSI support and resistance and reveal key benefits of using the RSI.
Analyze your financial situation
You can practice your understanding of finances on your own example by analyzing your current situation as a student. Do you have credit cards with high-interest rates or outstanding loans you need to take care of before making any investment decision? If you have a debt, try to research and find the best way to pay it off. Then, write down all of your more significant expenses to determine how much money you would be able to invest. Rushing into something you don’t quite yet understand is the most common reason for investment failure.
Buy your first investments
After you’ve analyzed your financial situation and determined how much money you can invest, you should open a brokerage account. You can either choose online discount brokers to execute online trades automatically or traditional brokerages with a one-on-one approach. Many young investors will choose the first option as they don’t require a large sum of money and charge very high fees as traditional brokerages do. Discount brokerages will require a significantly smaller initial deposit and charge on each buy and sell order. Some of them will even provide you with free educational tools and research reports to help you make better investment decisions.
Focus on smaller investments
Don’t put all of your money into a few stock right away as it might severely damage your entire financial situation and the quality of your college life. Instead, start making smaller investments on a regular basis, e.g. every month or every several months. This is a perfect method for beginner investors as they start with a smaller amount of money and wish to reduce the risk by controlling their financial situation every step of the way. Spread out your investments rather than just investing your money into one or two opportunities. Not to mention that a diversified portfolio can lead to exposure to a wide range of assets and market sectors in the future.
Don’t start investing your money until you’re sure that you understand what you’re investing in and why. Keep in mind that money invested in a bad opportunity can never be returned. That’s why it’s crucial to learn more about the financial world to be able to make smarter choices that will impact your future.
Melissa Burns graduated from the faculty of Journalism of Iowa State University. Nowadays she is an entrepreneur and independent journalist. Follow her @melissaaburns or contact at firstname.lastname@example.org