Hello everyone! Welcome back to The Legal Confidential. Today I’m sharing my top tips for investing as a student, with a limited budget. I’m by no means an expert, but this is what I’ve learned as I’ve become more well-versed in the financial and investing realms.

Get a Roth IRA

If you do not already have a Roth IRA, stop what you’re doing right now, and set one up. As a student, you miss out on contributing to a 401k through an employer. But that is no reason to avoid saving for retirement early! I know it can be hard to set money aside for retirement when it seems so far away, but it is crucial for your future success and wellbeing.

I use Ellevest for my Roth IRA, which is an awesome robo-investing website geared toward women. Ellevest was even rated as the top Robo-Investment Roth IRA provider by Nerd Wallet for 2021. I liked that there wasn’t a minimum for starting a Roth IRA, because as a law student, I am unable to contribute much money. But every dollar counts! I usually contribute between $25 and $100 per month, depending on other expenses. Starting to save for retirement early is so important because of compound interest. So even if you cannot contribute much, or cannot contribute every month, it is 100% worth starting.

Another added benefit of Roth IRAs is that you are taxed now, not when you withdraw the money. As a student, you are likely paying much less in taxes than you will be at the age you retire. This will allow you to access the money from your Roth IRA tax-free when you retire, unlike a 401k.

Rakuten

If you online shop and don’t have Rakuten installed WHAT are you doing?! I’ve used this free browser extension for years and have received hundreds of dollars back on purchases I would’ve made regardless. Click here to get $30 for joining!

My Favorite Investing Apps

There are so many amazing apps for investing, that make it so much easier if you don’t know much about investing. Everything I know about investing and finance was self-taught through a lot of research. I have no background in finance or investing, so using these user-friendly apps certainly has made investing easier for me.

Acorns

Acorns is the first app I used for investing, and in my opinion it is the easiest investing app for beginners. It is a robo-advising app, that allows you to use your spare change to invest. Acorns lets you link your debit and credit cards, and when you make a purchase, the amount is rounded up to the next dollar, and the spare change is automatically invested. You can also easily select your personal investment goals, and how conservative you want to be with investments.

Robinhood

Robinhood is great if you do not want a robo-advising app. You can buy and sell stocks for very low fees. I like to read articles on The Motley Fool, Investopedia, Forbes, and Bezinga, to find good stocks to buy. I think Robinhood is a great app for everyone, and I have the majority of my investments through this app. You can sign up for Robinhood here for a free stock!

M1 Finance

I absolutely LOVE M1 Finance and feel like it is not given the hype it deserves. This app allows you to build your investment portfolio (for free) with fractional shares of stocks which allow you to put all of your money to work across your entire portfolio. I use M1 to buy portions of more expensive stocks, that I typically wouldn’t buy on Robinhood. Once you choose your “pie” (the stocks you choose to invest in), you don’t have to worry about anything. I love how easy this app is to use, and I’ve made good returns on my investments. If you want to open an account, you can use this link for $30 when you join!

General Tips

Invest, Even if You Can Only Afford to Invest a Small Amount of $

I know that as a student, you’re income is likely limited if you have one at all. But the difference in the amount of money you will have if you start investing in your 20s versus your 30s is mind-blowing. Even if it is only $20 here and there, it is best to start now.

Pay Off Any High Interest Debt Before Investing

Before you start investing, it is important to pay off any high interest debt you have, such as credit card debt. If you are investing, you might have a return rate of 10-15% on average. But if you have credit card debt, the interest rate could be up to 25% depending on your card. If you have credit card debt, it is important to pay that off first, before worrying about investing.

Invest in ETFs if You’re Busy and Have Limited Time for Investing

I personally enjoy researching stocks and spending a bit of time investing. However, I know many people do not enjoy this, or simply do not have the time. If this is the case, I highly recommend investing in ETFs (Exchange-traded funds). ETFs provide a low-risk way to diversify your portfolio, they are usually very liquid and easy to trade, have lower fees than mutual funds, and are overall a great option for young investors.

I hope you all enjoyed this post! Do you have any financial or investing tips that I didn’t include? Let me know!