Investment Options for Students to Earn Passive Income

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Students typically have very little money. A college education adds up, so by the time you graduate with an MBA in healthcare management, you are likely to have accrued something in the region of $60k. It’s not easy paying back that kind of money, and unless you are lucky enough to walk into a very well paid job straight out of college, it will take you years to become debt-free.

There are many ways to keep your level of debt to a minimum. Aside from hunting out scholarships while you study for a healthcare management degree online from the George Washington University School of Business, you might wish to consider the merits of investing what little money you do have in order to earn a passive income. So, what are your options and is investing a risky business for students?

Property Investment

Property is always a good investment, but you need a reasonable amount set aside to be able to afford to purchase property. If you do have a lump sum sitting in a savings account, you could invest in a buy-to-let property and rent it out, thus realizing an income as well as any capital gains. For example, if you took out a mortgage on a house close to college, you could live in it and let out the other rooms to your fellow students. Any rent they paid would cover the mortgage repayments and leave you with a tidy profit. Since property usually appreciates over time, your equity in the property would grow and therefore so would your investment.

Invest in the Stock Market

When you invest in the stock market, you are buying a stake in a company. Bigger companies pay dividends to their shareholders, but you will need to invest higher amounts. Since students rarely have spare cash, it is better to invest in equities because they offer a much lower investment threshold.

Tracker Funds

Tracker funds are managed investment funds. Since you can’t predict how any fund will perform in the future, look for one with low costs. The higher the costs, the more it will eat into any profits you make. Investing in a tracker fund is a fairly safe investment because they are managed on your behalf. These are long-term investments, so if you are happy to tie your cash up for a long time, thanks to compound interest you should enjoy a good rate of return.

If you don’t have a clue about investing, read up on your options and don’t rush into doing anything before you are ready. Some investment schemes are no better than gambling on the horses and others will cost you so much in fees that you won’t be any better off at the end of the term. Strategies like Forex trading or buying gold might sound alluring, but they are not for the faint hearted.

The important thing is to be aware of the pros and cons of whatever scheme you try and never invest more than you can afford to lose.

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