In College - How Do I Best Save / Invest

Invest in making yourself employable and maximizing your earning potential over the next 5-10 years when you graduate. Any money invested now is more of a tool of learning about investing rather than actually accumulating wealth. Even in your first couple years it is unlikely your investable savings will be this grand propellant towards accumulating wealth.

Keep your burn rate relatively low and be frugal but don’t sweat it too much. Your best investment is investing in the skills and knowledge that will get you the best job possible out of college.

I will echo what others are saying and suggest that you try to get the best job out of college possible. No finer investment than that for you. Outside of that, I’d suggest working an actual menial job (delivery, cashier, waiter). Not only will you make some decent money, you’ll develop a work ethic that will help you grind through stuff in your career.

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In terms of investing, open up a Roth IRA with a broker like Schwab. Invest money you don't need in there in equity index etfs. Broad based equities have been pretty expensive lately due to monetary situation but I started my Roth IRA with about 650 that I put into the KBW bank index etf and returns to date have been 18-19% (returned 13-14% today with the vaccine news). Thought it was a pretty effective trade to get started as a retail investor with at that moment as large cap us bank stocks were heavily down post covid but they are inevitably going to recover as the real economy eventually recovers and their balance sheets can weather the storm.

In terms of getting cash to be able to invest/save, get an on campus job with your university hopefully in something skilled. Doesn't pay too well but the hours are great and doesn't interfere with school. It's also nice doing something with the weight of an extracurricular in terms of resume that you also get payed for.

Spend your time getting the best career you want but I will say very low effort investing can make a big difference in the long run. When I was a little kid, I randomly wanted to put $150 in the market because I thought it was cool. That was 2008 and that investment in a S&P 500 etf has returned over 87% without reinvesting dividends (I foolishly didn't check that box back then). Imagine if I had just finished an internship back then and had 5k to invest.

Agree that focusing on getting the internship/FT job is the best investment during college. If you are at that point and have extra money, I put some money in index funds to keep it as passive as possible going into FT to avoid any compliance issues. Doing it in a Roth IRA will let you grow that money for decades tax-free which would help a lot. You can also pull out the contributions without penalty if you happen to need that money later. Though I'd recommend a bit of a nest egg/emergency fund cushion in your bank account and only investing money you are comfortable not touching for a long time.

Don't invest what you can't afford to lose. General rule of thumb, don't invest with any funds that you need in the next 6-12 months especially if you don't have a steady income.

These people are bankers, they know jack all about personal finance. A simple compound interest calculator will show you that you need to be investing at least a little bit in an ira or other tax advantaged account now. Save a bit and contribute regularly, don’t trade or try and gauge the market. Just buy some etfs on vanguard or something similar and dont ever sell or “trade” unless your rebalancing for percentage allocation purposes. Look up rational reminder, Paul merrimann, or white coat investor for some good guidance.

Don’t overdo it with alcohol, college is the time for piss beer and shitty vodka not gray goose and ipa. Try to avoid the smokes if you can, they’ll drain you faster than you think. Try to maximize your meal plan if you have one, and don’t eat out too much of possible. Don’t be flashy for chicks, and make sure you always pull out. An abortion would be a killer financial blow.

You don’t need to dress like a movie star. Sperrys and vans are all you need for shoes. Get decent professional clothes for events, interviews, etc but don’t worry about overdoing it. I know frugal guys who overdo it on their business attire for no benefit.

Good luck and pm me for some more tips, I was in a similar boat and this was something very important to me.

Echo some of the comments above...

Some of the biggest mistakes my friends make is spending all of their disposable income, because 'saving a $200 a month is not going to make them a millionaire'. The idea is to foster a saving mindset, and make conscious financial decisions. Put as much money as you can in a brokerage account (maybe ETFs, mutual funds, solid stocks- don't get too crazy). If you want you can also let a chunk of that remain cash- maintain liquidity without inadvertently spending it.