Making Wise Investments While You’re Still In College

My son is in college, and for me, he’s become one of the best investors in his age and time. He’s been learning continually and is now unafraid to commit mistakes. He has learned while still in college that aside from building an education, it is also a great time to build his wealth. He didn’t need a large amount of money to start investing. He just learned how to do it.

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This article centers on online investing, as this is the first and most successful option that my son chose. If you are a student who wants to learn how to invest while you’re still in college, do read on.

Initial Investment – Stocks

You will learn soon enough that you will most likely invest in stocks when you start your investing journey. This is because stocks are relatable and are also commonly discussed in public and online. You can talk about stocks while having coffee with friends or older family members, and you’ll get a lot of insight into what the best options might be. But if you ask me, it would be great if you have a short but clear education on how to invest. The trick is to be aware of the patterns. It is fine to choose things that make you feel good as long as you recognize that this is part of your motivation,” says Michal Ann Strahilevitz Ph.D.

Creating An Online Portfolio

Financial specialists agree that investing at a young age has a relative advantage over the others because as they start young, they will have a lot of time taking care of and handling their money. And if we talk about compound interest, then indeed it is true that time certainly is money.

Starting small is the wisest initial move for the college student who is looking to increase his funds. It is perfectly okay, as the important thing is the way you invest that will determine the future of your investment. “When it comes to investment decisions made when we are anxious or excited, we can’t trust our instincts. When we let our animal brain make our investment decisions, it wreaks havoc on our financial lives,” Brad Klontz Psy.D., CFP explains.

Here are simple tips to start your investing career right.

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  • If you plan to invest a small amount, say, $50, find a broker who is willing to transact with small accounts. Later you can always increase your capital by adding funds regularly.

 

  • If you are a risk-taker, you’ll probably be more willing to earn big instead of thinking about the possible losses you might incur. But before deciding to invest a little more to earn more, do make appropriate calculations. College life means money for educational expenses too, and you can’t afford to lose more of what you can spare. According to Denise Cummins Ph.D., “To be an effective financial decision-maker, you need to take calculated risks. And that means asking yourself each step of the way how you can minimize losses, and cognitive reappraising your negative reactions when losses happen.”

 

  • Consider savings options that assure profits at minimal risks. Federal savings, savings bonds, and certificate of deposits are some ways to achieve this – in the form of savings accounts. Although you get the lowest profits, these are surefire ways to protect yourself from losses.

 

  • If you can afford to invest your money at a longer period, try investing in exchange-traded funds or mutual funds. These funds consist of different securities like stocks, commodities, and bonds. Insurance or mutual fund companies are responsible for collecting and managing money from investors. More and more college investors are going for these options.

 

  • Finally, before risking your extra college funds or your hard-earned money, remember to always look into the companies that you are thinking of putting your money into. If you’re interested in mutual funds, do a background check on the corporation that will handle your money. Some of these companies cater to banking or pharmaceuticals specifically, while others accept different portfolios.

Final Thoughts

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As a student starting and making your way into the world of investing, you will eventually learn how the market works, and soon you will be investing in bonds and stocks. However, professionals at BetterHelp often explain, the worst case of mental breakdown comes from financial instability. Thus, you need to be careful about investing. Because one wrong move, the whole process can cause you severe emotional and mental damage. And who knows, at 30-something you’ll be living your dream! So start young and be financially successful before you even hit midlife.

Defining A Community Bank – From The Words Of A Community Bank Employee

 

Perhaps you don’t know this, but there is no clear definition that you will see on community banking if you check Merriam or Webster’s Dictionary. And while many people are aware of what community banking is and how it differs from the other banks, still, others do not know what it means. Let me share with you the definition of community banking from a community bank employee’s point of view.

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In the year 2013, the community bank I’m working on was named the Business of the Year Award for 2012. I felt so honored to be part of the bank receiving recognition, especially since several other banks were also nominated just like us. I was contemplating on what qualities led to the award, and finally, I arrived at some principles that I believe a community bank should symbolize.

 

  • The bank’s reputation is dependent on its profile. A community bank is measured by praises and recommendations from clients and other people from the business community.

 

  • The bank and its employees must know all its clients and the community must know the bank well. Community banks are proud that because they are relatively smaller compared to others, they know their clients’ names and addresses.

 

  • Decisions and agreements regarding loans are geared toward the community. They must be consistent, trustworthy, and fair to everyone concerned. It is a known fact that community banks are not obliged to always approve of loan requests. If the request is denied, the bankers must stand firm with their decision. The loan officer is the responsible person who can approve or deny a loan request, and there is no one else who can do that task but him.
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  • Employers and employees of the community bank should prioritize their clients first. This means that they must strive to make the clients feel that their relationship does not only exist when the bank wants something from them. Before they make decisions, they must make sure that they have exhausted all efforts for the good of the clients. It is a gratifying feeling for the bank and the client to succeed in their endeavors by helping each other even through the tough times.

 

  • Community banks are not expected to have marketing plans that are equal to or higher than the larger financial institutions. The client base of a community bank does not depend so much on the market campaign but the honesty, strength, and assertiveness of its employees. When a client is introduced and is walked through the guidelines of the community bank, it is the employees’ goal that the client decides to stay for good.

 

  • Employees of the community bank are obliged to take part in community activities and events. The bank cannot donate large sums of money to show its support; the employees almost always work together with local entrepreneurs as well as the local government to find ways in making their community a much better and safer place to live in.
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  • Community banks know and understand their roles in society. As a long-time employee, people would ask me how banks like ours could compete with the larger national banks. I would always tell them that it’s because we know who we are and what we can offer, and despite having a limited niche compared to the national banks, we are still able to accomplish the goals that are set for us to achieve community-wise. Our clients are living testimonies of this truth.

 

Overall, just recalling the award that our bank has received, I feel very proud to work in a community bank. It hasn’t always been easy. Of course – because if it was, then I guess all of us could work here!

 

 

Getting A Loan From Community Banks And Credit Unions

Many community banks have remained unfazed and unaffected by the mortgage collapse and still manage to lend money to their clients. However, they are not spared from the routine scrutiny and are striving to improve their portfolios. They try to steer clear of loans from the same businesses. For example, a bank with a lot of outstanding loans to coffee shops will not approve a loan request from the same business despite how strong the application, as it is trying to decrease their exposure to specific areas of town or certain shopping malls.

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Getting A Loan In Community Banks

If one bank denies your loan request, you can ask help from the loan officers about what other local establishments are making loans that include your niche or industry. You can also try looking into the bank locator for independent banks in your town. The bank locator is found on the Independent Banks of America website. Executives and senior heads of community banks agree that they typically approve loans to borrowers who are mostly residents. It is because they want to establish an intimate relationship with their clients and be able to do a background check conveniently and easily before giving them a credit line.

Community banks are happy to divulge that they don’t have very stringent written contracts and standards as compared to regional or national banks. They are also willing to help their clients understand as simply as possible why, say, you’ve had a loss for the past year. They would do the necessary steps to find the reason for this loss and then move forward and try to repair that loss.

Here’s a final piece of advice from community bankers: when it’s your first time to visit your local bank, please don’t go there to ask for a loan right away! Allow your bankers to know you and build a relationship with you. Talk to them about you and your business and maybe get a feel of what the bank sees you. Find out the common businesses that the bank usually favors. You can get these details from the loan officer himself. It’s much better knowing straight from him if, say, your loan request might be too large for the bank, or if your business is one of the few new niches you’ll be introducing to them.

Getting A Loan From Credit Unions

 

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Perhaps you gave up on getting a credit line from your bank. Think about getting it from a credit union. When the banks hit their rock bottom, credit unions were popping here and there, silently accumulating millions of dollars from clients’ savings and interests from their car and home loans. A lot of have transitioned into lending – but that’s if you can find their location.

“The world’s best-kept secret.” That is what Mike Hales, Director of the National Association of Credit Union Service Organizations, describes credit unions. That isn’t a compliment, though. He says that there are almost 8,000 listed credit unions and 2,000 of those are lending business credit lines to their clients. Plus, they are encouraging them to become official members. The Boeing Employees Credit Union is willing to help residents from Washington. You may also want to check out the National Credit Union Association website to find other credit unions as well.

Credit union heads agree that their typical small-business lending capabilities are undoubtedly increasing throughout the United States. And in the past few years, there have been approximately 30 cooperatives that have been formed to manage the business loans of several hundred credit unions.

Other Sources

If you are unable to get approved at a community bank or a credit union, there are still hundreds of companies that provide short-term loans. However, be cautious, as many of the agents offering financial loans are former mortgage brokers, and we don’t have to elaborate on that.

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Also, business to business lending – which is what it’s going to be called once you decide to go into business with these financing companies – is unregulated and usury laws and guidelines don’t apply to these loans. This means that the loans can have very high-interest rates. Some have reportedly reached as high as 80%.

So before making a final decision, do ask questions. Besides, it’s free to inquire about anything and everything related to your planned loan. Ask around, too from friends and competitors. It’ll do more good than harm!

 

 

 

Community Bank – An Excellent Place To Invest

To date, there were only less than 6000 community banks open in 2018, the lowest so far in current history. This is said to be due to the value and interest in community banks, which had led investors to sell to larger banks when heavy consolidation began in the banking sector. On the contrary, this massive consolidation, in turn, created opportunities for the investors to build new community banks.

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In certain states, such as Florida, where there are over 900 new residents that come in daily, there is a shortage of community banks, particularly in the major areas. This has resulted in the opening of new banks like the Gulfside Bank in Sarasota and Orlando, the Winter Park National Bank. The old banks were also assessed and recapitalized under the One Florida Bank and the Beach Community Bank. The state of Florida is only an example of the many states that have welcomed the increase of community banks.

Importance Of Community Banks

Local banks are significant in that our country prospers on medium and small-scale businesses that employ most Americans. The Small Business Administration reports that small companies make up 99% of American firms, more than 60% composed of new private-sector jobs, and almost 50% make up the private sector employment. The lenders of these groups are community banks.

JP Morgan is a renowned brand that has been trusted by many investors and clients for years. Its CEO, Jamie Dimon, wrote in The Wall Street Journal in 2016 that in this business, local and community banks do play a vital role. They are located in the communities that they serve, and ultimately, high-ranking officers reside in the same community as their clients. This gives them a great opportunity to establish strong and long-term relationships and share extensive information regarding the local culture and economy. The banking services they can provide are exceptional.

The Role Of Community Banks

The country should place equal value on community banks as it does on national banks. Each of these types of banks has a responsibility of contributing to the country’s economy and placing the country’s businesses in a steady position both locally and worldwide. And with nearly 50% of business loans transacted through community banks, these locally built banks must be kept strong and significant.

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A study done by a university in the United States concluded that major consolidation was seen in many banking sectors, including the community banks. This was seen as a concern because community banks were often the relationship lenders that frequently had local ownership and control and were an important part of the decision-making process. When there is a lot of the lending and depositing transaction locally, it encourages economic progress. The resources of the whole community are ultimately put to good use. Community banks have always been intricately linked to free enterprise. In 2011, they had more than 10% of the industry’s assets and nearly 50% of the industry’s loans to businesses and farms.

Just two years ago, the regulatory sector greatly improved, as seen by the FDIC, decreasing the strict requirements and rules of opening new community banks. This move would lead to more banks and more local investors. And in the markets today, there is a return of 200% of the initial investment. Now, wouldn’t you call that productive?