How should I invest if I am a college student wanting to invest in cashflow-producing assets?
I’m a college student and just getting into investing. I don’t have a lot of capital to play around with just yet, but would really like to invest in cashflow-producing assets. I want to begin growing a passive source of income to help cover my expenses. What kind assets should I invest in?
It's great that you’re taking charge of your financial future by investing, but before you allocate your funds to an investment vehicle, it’s important that you have enough cash to cover 3-6 months of living expenses in case you lose your income stream, whether that be from a job or family support.
In the short term, keeping your savings in a high yield account, which is a 100% liquid cash account that in many cases pays over 2% in today’s environment, might be a good option to create some passive income. This is a cash vehicle with much better yields than a typical money market account and without the liquidity issues of CDs in case you need to withdraw from it for any short-term savings goals. If you don’t expect to need the money in the near future, it may make sense for you to look at investing in a low-cost mutual fund or ETF.
As your financial priorities shift in college and beyond, make sure you’re increasing your emergency fund to match your growing expenses, like increased costs for rent and groceries, and are adapting your investing strategy to meet your short- and long-term financial goals. Once you graduate and get a job, make sure you explore any employer-sponsored retirement plans available, as those often come with tax advantages and matches that are like getting free money from your company.
Good for you on looking ahead. There are so many directions you could go here it's impossible to help guide you to an answer. If you want to speak in more detail I would be happy to chat with you and get some more information on your situation and details, at no cost and no- obligation, and then go from there. To book a time, please visit https://calendly.com/jcjones/investopedia
Hope to hear from you!
-Jordan Jones, RFC