Investing
By
Cassady Jeremias
Summer Forty-Niner
College
is the perfect time to start planning for
the future. Too bad most of us aren't doing
it. Jasmine Yur-Austin, assistant
professor in the department of finance,
real estate and law, says only about 25
percent of her students each semester admit
to investing money in anything.
According
to Yur-Austin, of those students who do
so, she said about half invest through their
jobs in 401K plans. The rest, do it for
fun or are into it because their parents
have discussed it at home.
According
to the Department of Social Security, the
average benefit right now for a person who
retired at age 62 is $899 a month.
By
the time a 25 year old today reaches retirement
age, if no changes are made, we can expect
a 27 percent cut. Our payments will be about
$674. That is a nice chunk of change for
spending money, provided mortgages, loans
and car payments are paid off.
It
is also not too bad if our 401K's mature
nicely, and we don't experience what my
parents, and many others did the past few
years when they watched them dwindle, and
had to add on years to their retirement
to account for the loss.
Yur-Austin
said the main reason most college students
don't invest is age. She said they are just
too young to know how important it is to
invest.
"Many
think you have to have several thousand
dollars to make money," she said.
"I
tell my students, how many of you go out
to a bar or dinner and spend $40 a night
or on the weekends? That money can buy three
shares of Cisco!"
Yur-Austin
also said young people tend to want to get
rich quick, and make risky investments.
"Young
kids want quick results and quick return.
They try to speculate stocks. Sometimes
it works, it's called luck," she said.
Steve
Yohai of Edward Jones Investments in Seal
Beach says anyone can invest as little as
$25 a month in mutual funds.
They
can even set up a is direct deposited into
yoiur mutual fund account from your paycheck
so you won't miss it.
Yohai
says it is important to know what you want
out of it a short-term investment to pay
for a car or a house, or a long-term investment.
"You need a time frame to use this
money," he said. "Saving to use
the money in five years to buy a car, versus
retirement in 20 to 30. The longer you have,
the more aggressive you can be. If your
parents gave you a gift of a couple thousand
to invest, you have to be conservative about
it."
Yur-
Austin's advice is to start as early as
possible and invest for the long term. She
said mutual funds are fine, especially those
that aren't in the mainstream.
"Most
students only know big name stocks which
are fine, but $100 will only buy you one
share."
Yohai
suggested IRAs or Roth IRAs, both require
minimal amounts of money, and cannot be
liquidated until age 59 and a half, so it
has years and years to grow.
After
students graduate and get full time jobs,
Yur- Austin said that is the time to put
more money in stocks. But for any
investment, it is a good idea to know a
bit about them before making the plunge.
"Any investment is a risk," she
said. "There is no such thing as a
free lunch. As long as the return justifies
the risk, it is a good
investment."
And
any investment is better than none at all.
I think we should be taught investing in
elementary school, only it should be called
"how to live in America" or "survival,"
and could easily replace spelling bees and
read-ins. Those things are important, but
knowing how to handle money is too.
Cassady
Jeremias is a journalism major at Cal State
Long Beach.
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