How to Make Your First Investment as a Student

8 June 2025

Let’s be real — being a student is a full-time job. Between exams, assignments, ramen noodle dinners, and wondering where all your laundry disappears to, thinking about investing might not even crack your Top 10 priorities list. But here’s the deal — getting a head start on your financial life while you’re still in college can set you up for some pretty amazing future wins.

Sounds intimidating? It shouldn’t be. You don’t need to be a finance major or have stacks of cash. All you really need is a basic understanding of how investments work, a willingness to learn, and a sprinkle of patience.

Welcome to your crash course in how to make your first investment as a student — and no, you won’t need a Wall Street suit for this.

🧠 Why Should Students Even Care About Investing?

Let’s start with the elephant in the room. Why on Earth should you bother investing when you're already buried under textbooks, part-time work, and a social life you’re barely maintaining?

Great question.

Here’s why:

- Time is on your side. Compound interest (aka "interest on your interest") is like magic beans. The earlier you start investing, the more time those beans have to grow into a money tree.
- It builds good money habits. You start learning how to manage money, make smart decisions, and avoid falling into debt traps.
- You don’t need a lot of money. Seriously. You can start investing with as little as $5 or $10 these days. That’s one less expensive coffee per week.
- It makes you feel like a boss. Because you’re making your money work for you while you nap. Who doesn’t want that?

💼 Step 1: Get Clear on Your Money Situation

Before you throw your cash into the stock market or some crypto coin you saw trending on Twitter, take a breath.

Ask yourself:

- What’s your monthly income (from allowances, part-time gigs, scholarships)?
- What are your monthly expenses (rent, food, transport, that Netflix account you definitely remember to cancel)?
- Do you have any emergency savings?

Hot tip: Don’t invest money you can’t afford to lose. If your budget feels tighter than your old pair of jeans, hold off and focus on saving.

🎯 Step 2: Set Some Goals

Why do you want to invest?

- Saving for a trip after graduation?
- Dreaming of a car?
- Trying to build long-term wealth?

Your goals will shape the kind of investments that are right for you. If your goal is long-term (like saving for retirement — yes, you should care about that even at 20), your approach will be very different compared to short-term goals like buying a laptop next year.

Define your why — it’ll keep you going when things get bumpy.

🏦 Step 3: Understand Your Investment Options

Now for the fun part: exploring where you can actually put your money.

Let’s break it down super simply.

1. Stocks 🧾

Buying stocks means buying a small piece of a company. If the company grows and does well, your investment appreciates.

Pros:
- High growth potential
- You're literally a part-owner

Cons:
- Riskier (prices can swing)
- Requires some research

Best for: Long-term investors who can stomach ups and downs.

2. ETFs and Mutual Funds 📊

Exchange-Traded Funds (ETFs) and mutual funds are like a basket of stocks. Instead of choosing one company to invest in, you get a mix.

Pros:
- Diversification (spread your risk)
- Less effort on your part

Cons:
- May come with fees
- You don’t pick individual winners

Best for: Beginners who want to invest passively.

3. Cryptocurrency 🪙

This one’s all the rage, especially with Gen Z investors. Think Bitcoin, Ethereum, Dogecoin (yes, that meme coin).

Pros:
- Exciting and new
- Potential for big gains

Cons:
- Very volatile
- Lacks government regulation

Best for: Risk-takers who invest money they can afford to lose.

4. Real Estate (REITs) 🏠

You probably can’t buy a house yet, but you can invest in Real Estate Investment Trusts (REITs). This way, you own a slice of property without being a landlord.

Pros:
- Regular income from rent
- Affordable entry via REITs

Cons:
- Can be sensitive to market changes

Best for: Students wanting to diversify beyond stocks.

💳 Step 4: Open an Investment Account

Okay, so you’ve picked what kind of thing you want to invest in. Now you need the toolbox to make it happen.

There are two main ways to start:

1. Robo-Advisors

These are automated platforms (like Betterment, Wealthfront, etc.) that build and manage a portfolio for you. You just tell them your goals and risk level.

Pros:
- Super easy to use
- Great for beginners

2. Brokerage Accounts

These are platforms where you do the buying and selling yourself. Some popular ones for students include:

- Robinhood
- Fidelity
- Charles Schwab
- Webull

Look for one with:

- No account minimums
- Low or zero trading fees
- A mobile app (because duh)

🧠 Step 5: Learn the Basics of Risk and Reward

Not to get too cliché, but you can’t have reward without risk — that’s just how investing works.

Here’s a basic rule to live by:

> The higher the potential reward, the higher the risk.

If you're someone who bites their nails every time your GPA drops by 0.01, maybe go for safer options (like index funds or bonds). But if you’re more of the thrill-seeking type, you might be okay putting a little into crypto or individual stocks.

Balance is key.

🧠 Step 6: Start Small, Stay Consistent

Don’t go all in. Try something like:

- $10 a week
- Or $25 a month

It adds up. Trust me.

And if you automate it? Even better. Most apps let you set recurring deposits, so you invest on autopilot. It's like a personal trainer… but for your wallet.

📱 Step 7: Use the Right Tools and Apps

Here are some cool apps to help you:

- Acorns – Rounds up your spare change and invests it.
- Robinhood – Great for beginner stock trading.
- Coinbase – If you're curious about crypto.
- Public – Invest and learn from a social feed.
- SoFi Invest – Simple and beginner-friendly.

These apps make investing almost as easy as scrolling TikTok. Okay, almost.

🧠 Pro Tips Only a Student Would Appreciate

- Use that student discount mentality. Look for platforms with student-friendly benefits.
- Avoid fees like the plague. Hidden fees can eat into your gains like sneaky termites.
- Don’t invest using student loans. Just don’t. That money is for school, not stocks.
- Celebrate small wins. Your first $100 invested is a huge deal. Treat yourself (responsibly).

😅 But What If I Mess Up?

You will.

That’s part of it.

Everyone takes a loss at some point. Even the professionals. The key is to see investing as a long-term game. Not a get-rich-quick scheme.

Remember: It’s not about timing the market. It’s about time in the market.

🕒 The Earlier You Start, The Easier It Gets

Let’s do a tiny thought experiment.

Say you invest just $50 a month starting at age 20 with an average 7% return.

By age 40? You’ll have about $24,000.

By age 60? You’re looking at a jaw-dropping $114,000+.

And all that from just $50 a month. Wild, right?

Now imagine increasing that amount as your income grows. That’s the power of compound interest doing its thing in the background like a financial superhero.

☕ Final Thoughts: You Got This!

Look, I get it — starting your investment journey as a student feels like jumping into the deep end while still learning how to swim. But the truth is, you don’t need to be perfect. You just need to start.

You’re at the perfect age to make mistakes, learn the ropes, and build habits that your 30-year-old self will thank you for.

So go ahead. Download that app. Start with $10. Learn as you go.

Because you’re not just a student anymore — you’re an investor now, too.