As college students, the idea of saving money sounds silly, considering most of us barely have enough to stay afloat. However, one ASU alumnus says that if you want to be financially stable post-graduation, you need to start investing as soon as possible.
Juan Martinez majored in supply chain management and accountancy at ASU, and for the past year has held the position of area manager at Amazon Fulfillment.
He says he was first exposed to the idea of investing by his mother, who spoke about her 401K when he was younger, but it wasn’t until his sophomore year of college that he began to fully understand the concept.
“My first accounting courses covered material like unrealized gains being taxed and all that. It was an interesting concept of saving and earning money over the long run without necessarily adding too much effort, so I started to look into it,” Martinez says.
After that, Martinez worked on saving as much money as he could during college. He opened a small savings account and then a 401K account during his internship.
For those who are unfamiliar, a 401K is a retirement account that can be offered by your employer. These types of accounts are meant for long-term benefits, Martinez says.
“You put a certain percentage of your income [from]each paycheck and it accrues interest over time. The best part about it is that usually your employer matches a certain percentage of how much money you put in, so they essentially pay you to save your money,” Martinez says.
LOCKING UP STOCKS
While entering the stock market can be rewarding, Martinez says you have to realize that there are ups and downs in investing. He currently owns Amazon stock that was offered to him as a bonus when he was hired. However, in the first two months it lost $2,300 in value.
“Over the past year since then, it’s increased $35,000 in value since Amazon stock price blew up. My point is that it’s a calculated risk you take depending on what you’re investing in,” he says.
He recommends contacting services like JP Morgan, Goldman Sachs, or any other investment firms if you are interested in stocks.
“Typically they ask you for a base fee or minimum amount in your account that you can open with, so it’s good to save up before you think about jumping in,” Martinez says.
“Stocks are a little more volatile and risky while long-term-goal portfolios like 401Ks are much more steady and secure. There is always risk; it’s up to you to accept how much you’re willing to take on.”
Martinez recommends that college students who are interested in investing start right away in order to reap the most benefits.
“Start off saving money into a savings account with your bank, usually around three months of your current rent. After that, open a 401K with your employer and put anywhere from 10 to 25 percent of your income into it each week. You can go [as]aggressive as you’d like. If you want to invest in stocks, talk to some professionals and get some insight and knowledge before you go buying anything,” he advises.
All of this may sound confusing, but Martinez assures us that with the right professional guidance, the investment process is rewarding and fun! Ultimately, how well you regulate your money determines your success.
“It isn’t difficult. Just maintain discipline and make sure that the money you put away doesn’t get [used]unless it’s an absolute emergency,” Martinez says.
“First off, it’ll give you a solid financial footing later in life. Secondly, it’s always good to have something to fall back on if things don’t turn [out]well. Lastly, you don’t realize how much those extra snacks and all that Amazon shopping you’re doing adds up until it’s too late. If you were to invest half that money, it would give you so much more than just a short term fix,” Martinez says.