Getting Started Early. How to Invest While In College

Graduation hit. You tabulated all the congrats on social media. I’m sure you have 9 pics for your best nine. The haters are mad salty. The Likes are up and the pressure of real-life hasn’t quite hit. So before you hop on your #travelnoire excursion or kick back a few mimosas at brunch consider this, Student loans and Bills are coming!

Running a successful wealth building legacy is a relay race, not a solo sprint. What’s working in your favor is time and personal effort.

Table of Contents

Here’s the outline or success money script that you need to consider.

1. What are your goals? Dreams? Fears? and Aspirations?

2. What’s your Financial Plan for the next 5, 10, 15-years?

3. What’s your Debt Management Plan?

4. What’s the End Game? (to quote Tony Stark, Iron Man)

After seven years in Financial literacy and Interpersonal Behavior, I found that Success is earned. As you improve your skills and your understanding, the process becomes habitual. You will be bombarded with choices. Like a shell game, you have to pick the right one every time. If you ever found yourself saying “Someone else is so lucky!” from seeing their Instagram view from the top – just know there is a summit that you didn’t see them climb to get there. It’s even worse navigating the way down. What you are seeing is a result of their choices.

In Part 4 of the College Hack series which include Making Moves, OnCampus, and Blowing $10,000 without knowing; I wanted to hammer down that the EARLIER you start investing YOUR TIME AND MONEY into your future through the stock market, real estate or business venture the more likely you are to accumulate a large amount of wealth over time.

To calculate how much you can accumulate you need to know three key things:

1. How much money you will invest each month? Or better yet, how much money you have to invest after budgeting and cutting down on things you don’t really like to do.

2. The average yearly profit you stand to gain in compounding interest. Depending on the asset and location. Historically, the stock market has yielded around 7-8% over the long term whereas simple bank saving accounts are trending at 0.01%-0.1%. Word of caution, I personally don’t like Wells Fargo. Many Baby Boomers invested in their Certificate of Deposits (CD) and wasted 30 years for what on average amounted to chump change. And,

3. Time. The number of years you will be consistently investing. The less time you have, the more of your own money you will need for the long haul. Think about it like rolling blading downhill as a kid. The longer the route the faster you go.

By investing $150 from every paycheck biweekly starting right out of college at age 23-24 for 40 years at an expected return of 8%, you’ll be able to retire at 67 with nearly a million dollars (see graphic above).

Let’s say you didn’t quite figure it out until your 30s. If you started to invest at age 30 with $150 per paycheck and by the time you are 64 years young, you will only have about $525,000.

How come? You ended up investing for less time. In truth, you would have to save $340 from every paycheck just to hit the million dollars. And if you think it’s hard being single and healthier on average and paying $150 per paycheck, you are in for a serious shock when you have a mortgage, a partner, the optional kids and etc. Just do yourself the favor and invest on autopilot. It can help you in the long run.

Benefits of investing early:

1. Accountability with your life and your financial destiny

2. Some investments like 401ks, Traditional Individual Retirement Accounts (IRA), Health Savings Accounts (HSA) have built-in tax benefit incentives. For specifics on Taxes.

3. Peace of Mind and the power to yield significant returns in the long run.

Increasing With Time

Time is your ally and your worst enemy. What the youth lacks is the experience of more time so it’s harder to see why it’s important to invest. However, just google the biggest regrets for retirees and you will find money at on their fave five. So please feel free to indulge and discuss any of the links attached in the article. They are short reads and worth the cognitive understanding.

For those with the itch to invest and want to avoid their worst impulses to hop on bitcoin or an MLM, go with Fidelity. ⇠ it’s the spot for rookies. Fidelity is a well-respected investment brokerage firm. They earn high ratings from various recognized third-party sources, including:

Investor’s Business Daily—Best Online Broker 2018(for the fourth year in a row).

StockBrokers.com—Best Online Broker 2018.

Barron’s—Best Online Broker 2017 (and 2016).

Kiplinger’s—Best Online Broker 2017 (and 2016).

Nerdwallet—Best Online Broker for Research 2017.

With $0 to open an account, but mutual funds typically require a minimum of $2,500. However, you can avoid the mutual fund minimum initial investment by setting up automatic investments of at least $200 per month. Check out Fidelity Go, one of the most comprehensive investment brokerage firms. For new investors, you can start out having your portfolio fully managed through the app. But as your portfolio grows, and you learn more about investing, you can branch out into self-directed investing.

Now that you are equipped. Give yourself the future you deserve. Give yourself a plan because YOU ONLY LIVE ONCE.