Bobby Juarbe like many college students of the 21st century are often worried about various things like their studies, how to obtain a part-time job to help with finances, and of course, activities outside of their schooling. But frequently, there are a handful of students that are more worried about investing in the next big thing in stocks to get rich overnight.
While there are multiple ways and techniques to help you invest your money, the five ways listed here will get you started whether you are new to the investment game or not. By following one or all, you'll be sure to learn exactly what you need to know where and what to put your money into.
Read, read, read and keep reading
There are literally thousands of books, in all forms, that are focused on investing money the right way. Be sure to pick up and read as many of them as you can. If you come across an article online, read it. If you see an article in the newspaper, read it. Bobby Juarbe suggests reading everything you possibly can, your knowledge will grow and you will understand the good and bad of where to invest your hard-earned cash. Even if you would prefer to do your reading online, just use a search engine to find resources to learn from. In this case, reading really is fundamental.
A good rule to remember is to read books and pieces that focus more on tips and how-tos of stocks or bonds or mutual funds. The books that teach you more about creating a number one investment plan will be some of the best ones you can read. Afterward, you may be able to put the skills you've learned to practice in real life. Keep in mind that if you can't purchase such books, a local library will probably have many available to you as well as your college library.
Use your knowledge to pay debts off with higher interest rates
Bobby Juarbe says "When going through your finances and paying off any debts, you may be determined to pay off your smallest debts first." But when you're considering investing your money, it's best to lean toward the higher interest rate debts such as credit cards, loans, car payments, etc., to pay off first. The longer the debt goes, the more the rates rise, so if you pay these types off in full, you'll be on your way to a smarter investment strategy. Be certain, depending on the amounts of your outstanding debts, that investing your money in stocks is what you want to do above all. If there is any question about it, then you may want to take it into consideration a little further and decide if it is the right move for you to make at this point in your life.
Think of it this way, by paying off a debt in full that has a 15% interest rate, you'll be gaining at least 15% of your money back, whereas, in stocks, you may lose that 15% investment you made. At least by paying the debt off, you are guaranteed your 15% back. ON the other end of the spectrum, if you have debts that hold low-interest rates like 1-2%, you may want to let that debt go and invest your money instead.
Choose a reputable brokerage company for your first investment
Now that you have chosen to move forward with investing, you'll want to be sure to research the different types of brokerage firms available for new investors. There are multiple platforms online such as E-Trades, but there are also several where you can walk into an office and work with a broker face-to-face. The choice is ultimately yours, but many new investors choose to go with a discounted brokerage firms as many of the traditional firms will ask for larger amounts of money that new investors may not have. Smaller or discounted brokerages will ask for less money and will only charge you per purchase, and they have lower fees. Keep this information in mind when searching for the firm that you want to use for advice and investments.
Another aspect to keep in mind during your search is that those brokerage firms that offer educational resources and analytical research reports at no charge for their members. These type of firms will often be much more reputable than those that do not offer such tools. Also, when searching for a firm, ask if they offer a mobile app for investors to make trades when on the go. In the technology-driven world that we live in, most businesses will offer such an app. But you can also purchase stocks directly from a company, this is known as a direct purchase plan, and the fees for purchase are far less than you would pay otherwise. It is similar to buying wholesale instead of from a department store.
When Bobby Juarbe was a new investor, it is best to avoid borrowing money from the firm to make investments. While this can help you purchase more stocks for less money, it also puts you at a higher risk of loss should the market crash. Brokerage firms call this 'buying on a margin' and being a new investor it isn't something that you should consider when making your first investment.
Spread out investments
As a new investor, dropping all of your money at once into stocks is a terrible idea and the chance of loss is elevated. If something catastrophic happens to the market, like the crash of 2008, all of your money will be lost. Avoid dropping your whole life savings on anything, it's better to use a little here and a little there. This way you can still have some money in the bank as a back up plan in case of an emergency. A great idea is to make regular, small investments, this way you always have extra money stashed away. A good rule of thumb to follow is to invest the regular and small amounts every month or every three months, whatever you choose. By following this plan, the risk factor of loss is much less.
You'll also want to spread out your investments. Instead of simply investing in one or two stocks, change it up, invest in a few different possibilities and this will help you to keep your portfolio diversified. By following this tip, you can be certain that you will almost always have an investment. Should one or two of your investments become defunct, you will still have the others to rely on. You never want to invest your money into just one or two aspects, spreading it out over several will help keep more loss from happening.
Get started as soon as possible
When you choose to invest, you'll want to get started as soon as you can. Newer, younger investors, have the advantage of time on their side. The earlier you invest, the longer your money can grow building a nest egg for your future.
Whether you invest your money in stocks, bonds, or mutual funds, the compound interest that is added to it every year will keep your balance will grow and increase over time. Time is money when you invest. By checking the numbers yourself, you can see what a $100 a month will be in 30 or 40 years, then add in your interest rate, and you'll be sitting on a nice nest egg come retirement time.