As a student, you are already working to become successful. There is a driving force in you that makes you the person you are. You crave accomplishment, you crave stability, you crave…. well… you crave money! So, it's no surprise that more students are starting to invest while studying today than ever before.
The truth is that there are tons of investment vehicles out there, many of which are safe. However, there are some investment vehicles that students should do everything they can to stay away from. Here are the top 3 vehicles that fall into that category.
Forex Is A Great Way To Lose As A Beginner
Another dodgy investment that you'll want to stay away from as a student is Forex. Forex stands for foreign exchange and is the process of buying and selling currencies in an attempt to take advantage of the constant fluctuations in their values. However, because currency is the most in demand asset in the world, the fluctuations in the values of currencies are highly unpredictable. Also, forex brokers advertise leverage as your best bet in making money in the currency market.
Essentially, with leverage, a small $1,000 investment may be enough of an investment to trade $100,000 in currency. While this seems great from the winning perspective, leverage from the losing perspective is pretty scary. The truth is that without leverage, it's almost impossible to be profitable. However, with leverage, you could end up losing all of your money and owing money on top of it! Ultimately, forex is dangerous! In fact, it is estimated that only 5% of forex traders actually turn a consistent profit.
Binary Options Can Be Dangerous
While binary options are a great way to make money in the market, they can also be dangerous, especially if the person trading them isn't a seasoned expert. The truth is that binary options are marketed as an easy way to make money in the market. However, they are anything but easy.
Binary options are relatively short term investments, and short term means highly volatile. On top of that, there are tons of dodgy, scam binary options brokers in the industry because the concept is so new that it lacks regulation. Binary options are something that you may want to look into once you've had experience in traditional investing and consider yourself a professional, but as a student, it can be very dangerous to get involved in this investment vehicle.
Penny Stock Trading
Penny stock trading has a massive appeal among students. That's because it is disguised as a traditional investment vehicle. However, it is anything but traditional. The reason this is so appealing is that when you buy a stock for $0.10, even a move of $0.01 in the stock price can yield relatively large gains. However, penny stocks are penny stocks for a reason. These are companies that have generally not proven themselves yet. They may be in development phases, they may have had a product that flopped, they may even just be in the R&D phase. One thing is for sure about them, nothing is certain! While a $0.01 gain in these stocks can be huge, a $0.01 loss could be just as big, and it happens all the time.
You're A Student, If You Want To Invest, Take The Easy Way Out
I know it may be a bitter pill to swallow, but investing takes time, and as a student, you don't have the time you need to dedicate to high risk investments. So, as a student, you should take the easy way out.
Traditional stock investing, ETF investing, or bond investing is the way to go when you don't have the experience nor the time to devote in order to make the higher risk investments profitable. Don't worry, traditional stock investing, ETF's and bonds can be profitable, and they take little more work than simply clicking the buy button. So, take the easy way out to leave time for your studies… your money will grow while you graduate!