Investing in college and university can be hard. Students often don’t have enough savings to start investing. Students often lack investing knowledge, and the time it takes to acquire it. However, attending college and university is a double-edged sword. It takes away time and money for investing, but it also provides opportunities for getting them. “Investing in college and university” will provide alternative angles related to investing during tertiary education.
The devil is in the details
College and university students looking to start investing, experience large impediments. Days filled with endless lectures and homework, little free time to socialize and often, the looming obligations of debt, hinder students from starting their investing journey.
However, these impediments can be transformed into advantages. Courses can be used to create a basis of knowledge for investing. Elective courses can substitute expensive investing courses and webinars. Student organisations are not only a great way to spend time or fill a resume. Read to find out what hidden opportunities student investors can find in colleges and universities.
Opportunity that many would love
One of the main reasons why businesses fail to take off is a lack of funding. Few banks lend low-interest loans to new businesses. Crowdsourcing success depends on how innovative an idea is. Angel investors often overlook businesses that are not in the IT, finance or technology sectors. Thus, those looking for financial gains, often don’t have the access to capital needed to earn them.
On the same side, beginner investors often lack the monetary means to invest in the venues they think would bring profits. It takes being rich to get rich, and the era of low interesting lending has ended. How then a new investor should acquire a substantial sum of money to invest?
For students looking to invest, university and college loans provide a loophole that can be exploited. Loans for university education are not only given to fund the cost of education. They are also given to cover the cost of attendance. Cost of attendance also includes the costs for living expenses. Hence, loans for education can be spent on living expenses. Investing is not an exception in this case.
Thus, students looking for starting capital for their investments, can consider using loans for living expenses.
Important: investing money given to cover living expenses in college is a moral and a legal grey area.
Finding greatness in a bad situation
Saving money in college and university is easier than it seems. The easiest area to save money on: food.
Few students realise that joining societies, club and teams in a university, is not only a great way to spend free time. Societies and clubs often have a large funding that they are able to spend on free food for the members. Even if a college club or a team doesn’t offer free food, it could come at a discount through pooled money.
Moreover, clubs often have leftover food. Be it either after casual meetings or important events, clubs and societies experience the problem of leftovers.
Who gets the leftovers? Obviously, the members. A few pizza slices or a packet of snacks can make a significant impact on the grocery bill. There are times when there is so much leftover food, that a weekly grocery bill may get totally covered.
If a college student is a member of more than one society or club, the food problem becomes even smaller.
Thus, participating in extracurricular activities brings many benefits. Not only it is a great way to spend time, learn useful skills, and meet new friends. Participating in clubs also helps to save money on essentials (groceries), and to instead direct it into wealth building (investing).
Free advice is always the best advice
Good advice often costs money. More so, if the advice comes from a professional with experience. Paying for the services of a personal finance advisor with a great reputation: a luxury not available to all investors.
So, is there a workaround of getting the best advice about the economy, the business environment, and business decisions for free? From the name of this article, it’s obvious that university is the place to get free advice related to investing.
Professors and TAs are there to educate, rather than explicitly give out investment advice. Yet, their lectures can be more valuable than investment advice from professionals.
An economics professor can offer insights that are not available on the internet. A business professor can point out an important business metric. This can help in evaluating the businesses to invest in. A TA can share their views on a company and their future perspectives. This knowledge then can be used to make investment decisions. Or, to altogether avoiding some businesses to invest in.
Outside of college or university, deep insights about the business environment or the economy are rare. Finding ideas that go beyond the surface level often requires time, money, and research. Moreover, those who offer investment advice, may have intentions that not necessarily profit the investor.
Lectures about business and economics, should form the basis of investment knowledge for students in college. However, smaller bits of information, jokes and examples from professors, are often the best financial and investment advice. And university is the place to get them.
Ideas and insights from guest lecturers, are also great opportunities for aspiring student investors. Universities and colleges often feature guest lecturers from the business, research, and politics communities. Guest lectures are great places for broadening horizons and finding new ideas. And the ideas can be used as a base from which to make investing decisions.
Knowledge just around the corner
Taking elective finance, business, and economics courses, is a possibility in college and university. Elective course costs are also already included in the costs of university or college education.
Economics courses or courses related to economics, are the basis of knowledge required for investing. Knowing the difference between micro and macro level enables the investor to make appropriate observations and educated guesses. Knowing the basics of international trade lets the investor evaluate claims about trade. Investors knowledgeable about international trade can also evaluate its impact on companies.
Business and finance courses are a must for investors who value the analysis of business financials. Analysing the changes in cash flow, debt, and profits, is one of the most important things to do before investing in a business.
Business and finance courses in colleges and universities will enable students to do that. Since the courses are focused on the knowledge business owners need, the students will be able to deeply analyse the financials of any company.
The biggest challenge most beginner investors face is their lack of knowledge related to economics and business. Learning new things takes time, effort, and often, money. Elective courses in universities take care of all these problems.
There is no need to search for additional time, since elective courses often count as hours required for getting a degree.
The motivation for learning is also doubled. Firstly, this happens because there is an incentive for getting a good grade. Secondly, the learning is focused on areas which help to grow personal wealth.
Elective finance and economics courses are a better deal than paid courses or webinars. Elective courses can be free in practice (free university or education funded by scholarships), or in theory (a student doesn’t pay additionally for them). Either way, money won’t become a problem. Acquiring knowledge for investing through elective courses is better than paying internet consultants with dubious qualifications.
Hence, students in college have free access to courses that provide a valuable background to investing. This is an opportunity that few non-professional investors have. Thus, those in college should make the best of this opportunity.
The new business story
Even in the 80s and the 90s, the typical business success story was completely different. Most successful businesses weren’t created by students in their dorm rooms. In the 21st century, one of the most common success stories is the university startup.
Many successful entrepreneurs have started their companies in their university years. Many successful entrepreneurs have sold a business while studying in college. Or, met friends with whom they have developed business ideas.
In the theoretical sense, university isn’t the best time to start a business: the priority should be learning. In practice, after lectures and homework, students can find the time for developing a business. Moreover, universities have great support systems for student entrepreneurs.
Opening a startup with a college friend might become the best investment a student makes. Developing a business idea and running a business teaches many valuable skills. Moreover, valuable skills like leadership, are hard to learn through lectures.
Many, if not most, businesses fail. However, without trying, no one can know if their business will become a success story. And university years are the ones, when the consequences of failure are not as harsh.
Getting equity in a startup is a process that requires either: having a large and liquid wealth, or having specialized professional skills. Many people don’t fit into the either of those two categories.
Startup equity can give over 20% returns (or higher) in around 2 to 5 years. Thus, it’s only rational that many people would like to participate in a startup creation process. Startup creation opportunities are rare, and few people have the skills to be a co-founder.
Yet, by participating in student entrepreneur activities, it is possible to meet future startup founders. And after meeting potential entrepreneurs, the process of getting startup equity gets a lot easier.
The most important investment in college
The education students receive in colleges and universities are often their best investment in life. University education opens doors to great career opportunities. Many qualified jobs are simply inaccessible to people without university degrees.
College years can also be the time when future investors takes their first steps towards building wealth. It’s never too early to start investing or building a business. Universities and colleges all over the world offer many opportunities to do that.
There are also many lesser known opportunities for student investors. The students just have to put in work to realise them.
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