According to BillShrink.com, the average student spends about $1,000 on Spring Break. By the way, less than half of that $1,000 is spent on food and lodging, so guess where the rest of the money goes during party time? Getting an investment plan started as a student can be really difficult, especially if you are making money in part time jobs or have income coming in sporadically over the summertime. However, it is very important to your financial future that you begin getting some type of investing program in place so you can get use to saving money for your future. Here are three types of accounts you can open and add to that don’t require a huge minimum investment to open an account.
- ComputerShare.com – This is was the first place that I was able to get my oldest daughter into stock investing. When she was learning about topics like percentages in school, I thought being able to track a stock that she would enjoy to follow would be a great idea to buy for her. Through Computershare, we were able to invest in something called the McDirect program for McDonald’s stock. In a plan like McDonalds, the minimum investment for a custodial account is $100 or $500 for a regular account. Today, you only need to buy one share of stock within a custodial account to open up a Computershare plan. When McDonalds pays dividends, they will automatically buy fractional shares of the stock and reinvest those dividends. In addition, you can add money anytime to anything you like for a nominal fee to purchase additional full or fractional shares of stock.
- OneShare.com – I found this website many years ago and used it generally to purchase presents for family members or friends when they had a new baby. Oneshare is the ultimate way to connect someone to their favorite company. You can choose from hundreds of different companies to literally buy your child one share of their favorite company whether it is Krispy Kreme or Disney. The stock that you buy can be matted and framed to hang in your dorm room or simply sent in the mail to you. After you purchase the initial one share of stock, you can add money along the way to continue to buy fractional shares while the dividends automatically get reinvested. There is an upfront registration fee for about $50, but after that initial fee you’ll be on your way to stock ownership.
- Discount Brokerage House – At most of the discount brokerage houses such as TD Ameritrade, E*Trade, Schwab, Fidelity, and Vanguard, you can open an account to invest in low cost indexed exchange traded funds. By setting up some type of ACH with your bank account, you can add money to these accounts on a regular basis.
With many students having tons of student debt coming out of college, any head start that a college graduate can give themselves can help ease the transition into real life. While most kids might not make a ton of money during college, starting an investment program may be just the class you need to become a straight A student.
Written by:
CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Editor in Chief of Your Smart Money Moves
Co-CEO and Founder of oXYGen Financial, Inc – The Leaders in Gen X & Y Financial Advice and Services
Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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