Can You Invest Your Money Without An Income?
Moving from school to college is a big step in everyone’s life. Moving away from home, making new friends, getting to class by yourself, and living independently marks a new change in the lives of college students. Little do we know that this newfound independence comes with a price.
Many of us, as freshers, deal with this altered experience, which we call in our own terms, the money problem. Until our school lives, saving and investing money was not a big problem since most of the things were taken care of by our parents. But as we grow old and become more mature, the realities of the world are put in front of us.
Surprisingly, the college also proves to be one of the best opportunities to be introduced to the world of saving and investing. Well sure, as college students, it often becomes difficult to find that extra change at the end of the month to spend on something that you like. However, it doesn’t take much effort to start to save up bit by bit, if one is prepared to do so.
There is a perception that investment is generally for those who have extra cash in their pocket and are not living on a budget. Let’s face it, almost ninety percent of college students do in fact live on a budget, however, if one starts saving or investing with that little amount of money, eventually it will come up to a large sum.
You don’t have to be the Wolf of Wall Street to start investing or saving up. Even if you have a little extra cash to spare, you are good to go. The only key is to develop a good habit of saving, like regularly putting some money away every month for a significant time period. Swap out one weekend of your coffee date or Mc Donalds treat at home and you could also be saving more than 1000 rupees a month.
Once you get a hold of the ways to save money, it can get very addictive. Here are some simple steps to get there.
The ‘keep away jar’ approach
Saving money and investing it are interrelated. One of the ways to invest your money is by saving it. This will take a lot less time than you think, and you can do it in very simple steps. If you have never saved money before, then you can start by putting away just 100 rupees every week. You would think that it doesn’t seem quite a lot, but over a period of time, it will come to over Rs 5000.
Try putting your Rs 100 into a jar or an envelope, it may sound silly but it’s worth it. Get in the habit of living with a little less amount of money than you usually have, and then put the savings away in a safe place.
Consider using a CD or a separate savings account
Many people do not consider banks as an investment opportunity platform. But, it is one of the safest alternatives to invest your money. CD or certificate deposit is one of the alternatives to do so. A CD is a special type of savings account that will require you to lock your fund away for a specific time period i.e. till the maturity date and you get a higher interest rate in that.
For example, if you need money to pay for a specific course or want to buy something expensive, you would want your money to be in a safe place that doesn’t fluctuate with the stock market. In such a case a CD is exactly what you need.
A slightly lower version of the CD is a Savings Account, where there is the flexibility of withdrawal. Both the options prove to be a very safe way to invest your money for future purposes. However if confused, you can always compare the two and choose the one that suits your needs the best at that point in time.
Try using an investing app
Investing apps are yet another simpler way to invest your money. One of the good qualities of an investing app is that it allows you to invest even with the smallest amount. There are several investing apps available that will help you to understand the world of investing in simple steps.
Investing apps will help you to start as a beginner with any amount, which can go as low as Rs 500. As you go along with it you can gradually start investing in bigger areas with greater amounts.
Putting your money in Mutual Funds
Mutual funds are becoming very popular in today’s time, simply because of the benefits they provide. The term Mutual Funds can sometimes seem to be very risky and complex, however, it is not. Even as a beginner, mutual funds have a lot of benefits. You can start with any amount you have, you can also have a SIP with monthly installments and the returns most of the time are favorable.
Mutual funds can be of various types, hence depending on your need and the amount you have you can choose the mutual fund of your choice. It is always beneficial to read about it once and then start investing.
Invest your money in Stocks
As a young person, stocks can be beneficial to invest your money. They do have certain risks but over the period of time, they can give high returns. One of the benefits of investing early in stocks is the fact that, since you would be working for a long period of time, you would have the opportunity to spark your money.
As a beginner in investing in stock, always try to invest in Index funds. Index funds tell about different market indices. Therefore, you can have one large-cap stock and another small-cap stock at the same time.
You can start a Side Business
Investment does not only have to be in someone else’s project. You can also invest in your own project.
Invest in rental properties, such as Airbnb’s. You can tutor children, you can do part-time jobs or you can create your own small business. One advantage of building your own small business as a student is that it can grow over a period of time and can also turn into a full-time business. Which can give you a great number of earnings.
Ultimately, young age is the best age to start wealth building. Saving up money and investing it in order to create stealth of wealth for yourself will benefit you in the long run. Saving does not mean leaving out all the fun, you can enjoy, go to clubs and restaurants, and at the same time save up as well. It is after all a matter of smart saving. They say, ‘time is money my friend’ well they are not wrong. So start young, and live the life that you want!
About the Author: Devaanshi is a humanities student with an absolute love for traveling and everything related to it. Cooking and Writing are other fields that interest her.