In an earlier post I listed some ways that you can help out clients that have children in college.
Today I want to take it a step further and go through some investment tips that are unique to college students.
Most college students have a lot on their plate: studying, working, and trying to enjoy extracurricular time.
Yet there are many that would be interested in jumpstarting their financial future. It’s not important that these young adults have a ton of capital, but rather they know what to do with what they have.
Share this guide with your clients so that they may pass it on to their own children.
For university students interested in investing, there are 5 simple steps that can guide you to make smart financial choices. This guide will help you in your investment journey:
It’s a good idea to pay off your debts before investing, especially high-interest debts.
Keep in mind that paying off your debt in full provides a guaranteed return on your money, which isn’t the case for any investment.
The next step will be to open a brokerage account;
Here you have two options: online discount brokers, where you can execute online trades automatically through a computerized trading system.
And then there are always traditional brokerages, which offer one-on-one advice and services.
Putting all of your savings into one venture or a few stocks is a recipe for disaster. Focus on smaller, fixed investments on a regular basis, like monthly or quarterly.
This strategy will allow you to start with a small amount of money, keep extra funds in your bank account for emergencies, and reduce your overall risk.
You will do this by spreading out your purchases instead of trying to time the market.
You have an advantage—you’re young and have a lot of time.
Therefore, getting started early can lead to a big ROI (return on investment) over time.
Speaking of time, you can make investments with compound interest. That means the interest you earn each year on your investments is added to your principal – so the balance grows at an increasing rate.
Now that you know the basics of investing, check out some easy and actionable ways you can get started.
Although not the greatest way to invest, it is the safest and you’ll always know how much you have.
A savings account is a great starter piece for those with zero appetite for risk or who want more time to consider long-term options.
This is a cheap way to invest, but won’t bring any immediate income.
You should only turn to collectibles if you’re an expert in the area; otherwise you may risk showing your vulnerability and lack of knowledge to negotiate.
Governments and companies borrow money and issue IOUs. They carry a guaranteed interest rate and – usually – a date on which they will be redeemed.
Here the borrower buys them back at full price, known as the nominal or par value.
Have clients with children asked you for advice or tips before?
An easy way to build or strengthen client relationships is to offer a complimentary meeting with their teen or young adult children.
If you want to learn more about enhancing client relationships or how to live your own business dreams, let’s talk!