By Tan Teck Joo
KUALA LUMPUR - Everyone wants more money, but most University students are strapped and struggle for money. During University stage, students always spend money to fulfill their desires and enjoy their life.
At the very least, we don’t have extra money into investment. It shouldn’t happen in their stage. Uni life is the best time to start in the world of investing.
How nice would it be if you just won a million dollars in the lottery and didn’t have any financial worries? Unfortunately, the chances of this are almost zero.
Yes, you might luckily find job sooner after graduate or you are been working hard at school and managed to save little extra money. Yet, are you always wanting more easy life rather than working hard to earn that little money?
In order to think about how to secure your financial in future, at least in current situation, choosing to invest early is the best way for you to guarantee your financial security.
Thus, sure, it’s important to start investing young, but are bonds, stocks, or mutual funds the best investment for us?
Of course, you can always jump right into day trading on the stock market, but if you don’t know much, there is a steep learning curve there.
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| Reminder for new investor: Don't put all your eggs in one basket! |
Investment helping you money to work to generate more money
There are three basic ways that you can invest your money: stocks, bonds or cash. You can invest in each of these directly. Or you can invest in them indirectly by buying mutual funds, which pool people’s money together before investing it en masse.
Doug May, a financial advisor for Merrill Lynch in Indianapolis, IN, describes three things to consider before investing that will help you decide which route(s) to take:
1. Why am I investing? What is the end goal? Is it for a new car, or is it for retirement?
2. What is the time frame? How long do I have to come up with the money? This varies largely on your goal. If it is for retirement, most students have 40+ years to work with.
3. How much will I need to reach my goal? It’s hard to figure out the logistics of how much and where to put your money if you don’t know how much you’ll need in the end.
Once you answer these questions, you’ll then want to consider three other determining factors: liquidity, safety and return.
Liquidity
Determining the liquidity of your investments really depends on whether your goals are long or short-term.
If you’re investing for long-term goals, you want something that will grow and short maturity investments won’t really do this for you.
Safety
Safety refers to the risk involved. Investing always involves risk, but the amount varies a lot depending on where you put your money.
Many people afraid of losing money choose safer investments. Putting your money only in safe investments may not get you to your final goal though, especially after factors such as inflation and increased cost of living.
While, some investments may fluctuate more on the short term, over time, things often even out, yielding a decent average return.
So it may still be worth it to consider those investments that may have a moderate amount of short-term risk, but have a fairly consistent long-term growth.
This is where it is important to do your research, in order to secure your money safely.
Return
Return is how much you can expect to get back from your initial investment.
Sometimes it’s a fixed rate, like in money market accounts which have a set interest rate and other times the potential to make or lose a lot of money varies widely, like in stocks.
Keep in mind the only way to get a higher average return is to lower your safety.
is time for me to plan for my future by invest my money to something after reading your article...anyway, is a good article =)