Should You Invest While In College?

There’s no doubt that investing is a great source of passive income, with my personal preference for investing being dividend investing.

Investing will help you make the life that you want for yourself, by way of compound interest. If you start investing young, you can secure a future that doesn’t include the 9-5.

However, I get a lot of search engine referral terms here about investing in college and I suspect that part of the question that people have regarding investing in college is simply whether or not they should be investing while taking courses and studying.

student investors

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It’s personal preference, and it’s no secret that I invest, so let’s look at the reasons why you should invest while you are in college (or not).

Are You Relying on Debt to Get You Through School?

You may be nodding your head “yes” to this question, and think that I am implying that you shouldn’t invest if you are relying on student loans or other debt to put you through your education. This is not the case, however.

If you make money throughout your education by way of a job, and your loans pay for your living expenses, invest your money in short-mid term investments by all means!

While you are in college, your loans don’t incur interest. You have the entire four years if you are going for your degree, to invest your money and earn compound interest on the investments.

When you graduate and your student loan starts to incur interest, pay off your loan with the investments. If you plan to take this (smart) approach, avoid investing in RRSPs. You can find great tax sheltered investment options in a TFSA, which will serve you better.

Do You Have a Basic Investment Knowledge?

I wouldn’t recommend that anybody invest without knowing what they are doing, at least with a basic understanding of how it all works. If you have this knowledge, at least on a basic level, you should consider investing.

If you would be more comfortable investing after knowing a little bit more than you already do, definitely gain that knowledge before taking the investment plunge. It’s not worth floundering and not knowing what you are doing.

You may not have the time to learn more about your investing options until after you are out of school, so that is fine too.

Do You Have Money To Invest?

Yup, this is a stupid question, but you’d be surprised at how many people want to invest but don’t have the cash flow to do so. If you don’t have a job or any source of income except for student loans (with which you must be paying tuition), you probably shouldn’t waste your time looking into investment options.

To invest money, you must have money. Don’t borrow more money to invest; this can be lucrative for some people, but it requires a lot of knowledge and expertise and, yes, research and time to be successful in borrowing to invest. Don’t go there while you are a student.


At the end of the day, investing can be a great way to earn some passive income in college, and get a head start on planning your future (such as retirement). However, there are some people that shouldn’t be investing as students, so you have to be able to weigh your options.

Do you invest as a student? If you are no longer in college, did you invest? What is your take on whether students should be investors?


Should You Invest While In College? — 7 Comments

  1. When I was a full time college student, I didn’t invest. I really didn’t have much financial knowledge at all, except knowing how to pay my bills. However, fast forward almost 20 years and here I am again in college (part time) and working full time, so yes, I’m investing now! But my investment vehicle of choice right now is mutual funds. I researched a few of them like crazy, then selected one that had a good over-all return and low fee base. Does that count?

  2. I think while in college, if you have debt you should be “investing” in getting rid of it, but if you’re debt free, there is no harm in buying an index fund while you’re young and just letting the magic of compound interest and time work for you. I wish I had done that, to be honest!

  3. I can’t remember exactly when I started investing. I think it was either in college or right after. I wasn’t doing anything risky, especially since spending $10-15 on commission for each trade was so expensive.

  4. There are some folks advocating that people invest without understanding what they are getting into. The idea that it’s better to just do then to know beforehand. I agree with you that people should understand why investing is important and how one can do it correctly.

  5. I didn’t even think about investing in college. I don’t think I would have invested, but I did wish I thought more about the consequences of debt while in college. While I didn’t do bad, debt-wise, in my undergrad, that ignorance allowed me to continue on to grad school with ignorance of student loan debt!

  6. YES. Very simple answer to a simple question. These days every college student should invest. Save $10 a week (skip one McD run) anything you can to start a DRIP or open an account on Sharebuilder and build a dividend, income producing portfolio. It doesn’t matter if after 4 years of college you manage to invest $500. It’s a start, a seed that was planted that will not only reinforce good saving/investing behavior but will start you on a journey of building your own income stream with dividend growth stocks.

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