Building Wealth As A Student – A Guide

You graduated college a year ago and now you're walking from office to office, file in hand and a dejected look on your face. It's the classic fresh graduate story.

The other scenario -and the better one- is of a graduate, fresh off school, with enough capital to start a business or better still with a business already running.

The question today is not if it's possible. The question is HOW to go about it. What exactly can a student do to graduate without having to get a job on the unemployment line?

Thinking

I'll let you in on a secret, not much of a secret though... INVEST!!!

The normal, everyday, trying to get along student spends. The above-average clever student saves. But the really smart one, the one who gets to employ the normal student and the clever student, is the student who invests.

While researching on this topic I discovered the story of Timothy Sykes. Timothy, while studying to grab a Bachelor's in Psychology, managed to net over a million dollars ($1 million) by investing in stocks -penny stocks to be precise. There are many such stories besides Timothy's. YOU just happen to have joined the league... SO SIT UP, it's a race.

Here are some steps that will get you started on writing your own name in gold -or maybe you'd settle for writing it in Forbes.

DEVELOPING A PLAN

First, whatever business a student invests in should not be time consuming as a student needs to study to actually be called "student". Time is a major factor in your life as a student, use it well.

Moving on, the rule of thumb in investing is this: the higher the risk, the higher the returns. You are young and can afford to take calculated risk.

Carry out proper research before drawing up a plan. Appropriate planning and studious execution of such a plan can lead to wise and successful investment growth.

Draw out an investment portfolio that is diversified. The importance of counter-balancing your investments cannot be over-stressed as people have been unleashed to a world of hurt by putting all their eggs in one basket.

A GUIDE

Here is a step by step guide for a student. This guide does not claim to be comprehensive. It is concise, however, and should suffice.

1. Define your short, medium and long term goals.
2. Research and draw up an investment strategy.
3. Begin saving to meet your initial investment amount.
4. While saving, practice what I would like to call “pseudo-investing” to help prepare you for when you actually begin investing.

- Create a pseudo-investment portfolio to match your investment strategy and make changes you deem relevant to your investment strategy.

5. When you finally have enough to begin meaningful investments acquire some liquid assets. Something you can easily sell when the need for cash arises. I would, however, advice against liquidation as the aim is to make money not spend it.
6. While investing, follow your modified investment strategy. It is very important that you do not deviate from the plan as the results could be very catastrophic.
7. Always remember to counter-balance your investments.
8. As you get older adjust your allocation from high risk to medium risk investments and finally progress to low risk investments to lock in your gains.

Good luck on your road to investment success and I hope to meet you at the other end. The next article will be an extension of this one. It will give a list of investment assets that you should consider as a student.

Until next time, goodbye.