For you to be able to invest money in college, you first need to have a source of income. Remember to spend money you need to make money.
Investments can really pay off if you know what you are doing. For any kind of investment, you first need to make sure you are educated in the topic, and need to have basic knowledge of how the investment works. You have to know what you are doing. As Warrn Buffet said, “Risk comes from not knowing what you are doing”.
There are different types of investments. These are some of the most common investment options. Keep in mind that these are long term investments.
- Stocks
- Mutal funds
- CDs and bonds
Stocks
Stocks can be hard to understand at first but if you have the basic knowledge they can be pretty simple. A stock is a share in the ownership of a company. So when you buy a stock you are buying part of a company. The more stocks or shares you have in a company, the greater the ownership. Stocks represent assets, earning or loses of a company. Stocks go up and down based on the stock market. Depending on supply and demand the prices of a stock will change.
So how do I make money in stocks?
There’s two ways to make money in stocks.
- Dividends– If you own a company’s stock that pays dividends. You can make money when the company does well. What are dividends you are wondering? They are a sum of money paid by a company to its shareholders out of its profits. They are usually paid quarterly.
- Selling– when you buy an stock for a low price you can sell it for a profit, when the company is doing well.
Mutual funds
Mutual funds are an investment program funded by shareholders that traders in diversified holdings and is professionally managed. So basically way when you buy a mutual fund you are buying a package, and in that package there are shares from different companies. There are different types of mutual funds and their prices vary on the stock market. Just like stocks you can make money in mutual funds by dividends and you call also sell them for a profit.
CDs and bond
If you are looking for safer investment, CDs and bonds are just right for you. CDs are formally titled as certificates of deposit. CDs are usually purchased at a bank or financial institution. When you buy a bond you are lending money to the issuer (which may be the government, a corporation etc.) When you buy CDs and bonds, you have to keep them for a period of time then, when that time is over, you get your money back plus interest.
Now last but most important investment there is, EDUCATION. The best investment you can make is in yourself, by educating yourself and acquiring knowledge.
