Investment options for students

Student life is one of the best life.Here you can make mistakes and learn from it.Students specially college going students have a lot of time to do extracurricular activities.They can try various things and figure out whether it is working or not.

There is quite disbelieve that investment is only for rich peoples.You can start investing by small amount and make it grow.It's quite a problem that when students invest money they don't really think that they are investors as they are investing small amount but one must think just like an investor thinks while investing money.They must really check the assets in which they are investing,how it is working,how can it grow in future etc.

Let me illustrate various assets in which students can invest and make money work for them.

(1)Bank FD's : This is one of the safest option for investing your money.Here your money will be blocked for some time frame.After that particular time frame you will get your money back with interest on it.The interest in FD's are higher then saving account interest.This is good option for those who has money today that is not need for a particular time frame in future.

(2)Mutual Funds : Mutual fund is a good option for students as they might not be having time for keeping eye on market regularly or not having knowledge so it's one of the best option for them as there will be one of the professional out there who will invest their money.You can read more about mutual fund here.

(3)Stock market : Students can start with investing small amount of money in companies they think will grow in future and after that start increasing their investments by putting small amount of money on regular basis.This will help them in knowing about how to read financials of the company and how to judge which company is good and which is not.You should diversify your stocks.When they start looking at their portfolio growing it will give them encouragement.You can read about basic of stock market here.

(4)Etf's : Students can directly invest in etf's also known as exchange traded funds.It will help them diversify their investment and also provide them market return which is quite good.

TIPS BEFORE INVESTING :

(1)It is highly advisable for students to know all about the background in whichever instrument they are investing in and then decide whether to go for that option or not.

(2)Calculate your risk and margins in advance as it will help them finding how much risk they can afford and where they must invest.

(3)Before investing in stock market research about various brokers out there and compare them and then choose which one suits best for you.

  

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ROLE OF FINANCE IN THE LIFE OF STUDENT

"What ! what do you mean by financial planning for students","what is even the need for this.","It's too early to care about these stuffs,","We are students it's our time to enjoy not to think about these stuffs.".These are the few comments which I hear from students and parents whenever I talk with them about financial planning.Financial planning is something which everyone must care about whether it's student or a working professional.It,s something which must be taught from early age so that no one faces problem related to money in future and live a happy life.

                                                       

According to a survey conducted it was found that many students don't want to go for graduation because of high fees in private colleges.There are families which spend about 50% of their income in college fees.Many students have taken student loan for college.These students told that they were facing problem while studing because of the financial stress.They were not able to show their best because of the stress of paying back loan.This might not be the only problem,many students also use credit cards for their daily expenses which may harm their credit score when they might not be able to pay back.The students who came with monthly budget plan told that they have followed the plan for couple of months and then started unfollowing it.
Many professionals even after having good salary package faces problem financially because of lack of financial knowledge. 

That's why finance play an important role in life of students.Financial planning is something which will help them reducing their stress.They should know the difference between the good expense and bad expense,How to manage money etc.This will not only help students during their school or college life but will help them prepare for future as this will teach them how to manage money.Schools and colleges must include finance as a subject so that they know what are the various options out there so as to get good return on their investment.Parents must teach their kids from their childhood about money management,investing etc.They should be open with their kids about finance and should give them small responsibilities like making budget for their home etc.
They should tell their kids about :

• Difference between assets and debt
• How companies work
• How stock market work
• What is economy,gdp etc
• How to make money work for you
• What banks do and how they work 

                                                                 
As a student you must start with small things start getting basic financial knowledge and then move forward.Start with saving money,start making your expense as less as possible and then research and invest in something which you think will be of less risk and will help you growing money.However this will not be an easy task but something worth.Finance is something which is just like maths which will become something of daily use.