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I'm a young student with no student debt (my tuition is paid for, I've long since saved up enough.) I'm looking into my future and looking at investing in index funds or other sorts while I still live at home. For a young student looking to invest their spare money (lets just say I have $15, 000 on hand just to get a number out there).

What is the best way for a student with no debt in my situation to prepare? Should I be saving for a house? Putting some away for retirement?

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    Need to know your country. Do you have an emergency fund of at least six months of living expensive?
    – Todd
    Jun 18, 2014 at 0:25
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    Are you working? How old? What level of education? This might be a good question, but as it stands, it's far too general.
    – JTP - Apologise to Monica ♦
    Jun 18, 2014 at 0:38
  • What country are you in?
    – karancan
    Jun 18, 2014 at 0:46
  • Canada; I'm working and taking in about 25k a year (this is part-time and summer internships, based historically), almost finished university. (1 year left)
    – Anonymous
    Jun 18, 2014 at 0:47
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    Unfortunately there's no right answer to this. You could invest in nearly anything. It all depends on what you enjoy, what your goals are, what type of risk you're willing to take and all sorts of other things. I'd also tell you to not ask for such generalized advice from essentially anonymous people on the internet (myself included). Set some goals, figure out a path you want to take, then come back to ask questions about that path.
    – Ender
    Jun 18, 2014 at 2:06

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Good for you! At your age, you should definitely consider investing some of your hard-earned and un-needed money in stocks with the long-term goal of having your retirement funded. The time horizon that you'd have would be vastly superior to that of millions of others, who will wait until their thirties or even forties to begin investing in stocks, giving your compound interest prospects the extra time anyone needs for a spectacular vertical incline in your later years. Make sure to sign up to automatically re-invest the dividend payouts of your stocks, please. (If you don't already know how being young and investing well in your early years is more powerful than starting out ten to twenty years later, do a little research on "Compound Interest"). Make sure you monitor your investments. Being young means you have time to correct your investments (sell and buy other assets) if the businesses you initially selected are no longer good investments.

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It really is dependent upon your goals. What are your short term needs? Do you need a car/clothing/high cost apartment/equipment when you start your career? For those kinds of things, a savings account might be best as you will need to have quick access to cash.

Many have said that people need two careers, the one they work in and being an investor. You can start on that second career now. Open up some small accounts to get the feel for investing. This can be index funds, or something more specialized.

I would put money earmarked for a home purchase in funds with a lower beta (fluctuation) and some in index funds. You probably would want to get a feel for what and where you will actually be doing in your career prior to making a leap into a home purchase. So figure you have about 5 years. That gives you time to ride out the waves in the market.

BTW, good job on your financial situation. You are set up to succeed.

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