Are you a student and think investing is something that only people with full-time jobs can do? Well, think again.
"If you have enough cash to leave a 10-buck tip after you've had food out, you have enough money to start investing," said Emmet Savage, CEO of Rubicoin. "There's this misconception that you need thousands in the books, and that's just not the case."
Rubicoin is an educational investment app with the goal of getting the world investing successfully, starting with young professionals.
To prove that it doesn't take a large amount of capital to invest, the app did a study of what a student could've made if they invested their summer earnings in FANG stocks — as in Facebook, Apple, Netflix and Google — starting in the summer of 2014.
"We picked FANG because it was a well-known part of the lexicon by 2014, and [they are] all companies that all students at the age would've experienced in the past and had some affection for," said Rory Carron, head analyst at Rubicoin.
The data showed what a student could have made by investing summer earnings from a 13-week job or internship that paid $10 an hour at 25 hours per week.
The study also broke down how much a student would have made if they invested portions of their summer income, from 10 percent to 100 percent, in each of the FANG stocks.
What Rubicoin found is that "with very little research, just a small amount of stake in a company, they could greatly improve their financial decision without a huge down payment," said Carron. Even the outlays from investing a smaller portion of summer earnings were significant at the end of a few years; if a student invested $1,300 in Netflix stock in 2014, after three years they would have $4,527.
For students who are working this summer and would like to start investing, here are four tips from Rubicoin:
1. Get started. "The greatest investment a young investor has is their age and the years ahead," said Savage. Time in the market is better than timing the market.
2. Don't borrow to buy. Never borrow money to buy shares. Investing is intended to add to your financial health, not create debt in your life. Take what you can spare, and invest it in a company you believe in for the long term, even if that's only $20 to Apple stock.
3. Diversify. Buy shares from more than one particular business and industry. Don't just buy Apple stock. To make this process easier for users, Rubicoin publishes a shortlist of stocks that they've researched.
4. Go long. "Keep at it, go with it, don't sell or worry when the market goes bad," said Savage. "This is a marathon, not a sprint."