- Personal Finance
Generating Income During College
Finding a Job
Jobs can be hard to find in college. Many college students are busy with class, athletics, clubs, relationships; the list goes on. Finding a job that fits in with your schedule can be nearly impossible. That is why it is important for those college students who really can't find consistent times available for jobs to find ways of generating income. What do I mean by this? First, let's start with a basic finance lesson.
A Quick Finance Lesson
The two most important terms you will need to know: assets and liabilities. Many people have skewed perceptions as to what these terms truly mean (keep in mind that below is a different way of looking at these two concepts as an accountant would most likely have a slightly different definition for each). My favorite explanation of this simple yet over-complicated concept comes from the book Rich Dad Poor Dad by Robert T. Kiyosaki. Assets are things that give you money. Liabilities are things that take your money away. Simple enough. Now, what are some examples of common assets and liabilities for a college student? Many college students do not have a lot of assets. Some may have a job or some type of small stock market investment, but that is about it. On the contrary, many college students have huge amounts of liabilities! Think about it. Disregarding college tuition and book prices as these can arguably be thought of as buying a large asset in the long run (a college education), the list is endless. Food, alcohol, gas, car insurance, phone bills, electronics, did I mention alcohol? In order to cover the costs of all of these liabilities and come out on top, a college student must generate more income from assets than the amount they spend on liabilities.
Income Generating Ideas
Here are some simple recommendations to try to generate income.
- Start a small business: Start a small business out of your dorm room. Start a food catering service, a convenient shop based in your room, a laundry service, or a taxi service (How many students are looking for transportation to and from the bars?). Additionally, you can start a business online. Get creative!
- Sell Plasma: Plasma donations are always needed. Contact the local donation center and set up an appointment. You are doing a good deed for others and getting paid for it! Just be cautious that you follow the safety procedures and make sure that this is something you are eligible for.
Now that you have generated some income, use that income to purchase assets in order to generate more income!
- Make an investment: There are many places to make small investments, especially online, that require very little minimum initial investment amounts. Some of the online websites you can look into are Forex, ShareBuilder, and E-Trade. Some mutual funds are also a great way to invest your hard earned cash!
- C.D. Accounts: Look into putting some of your money into a CD account that will generate interest. Make sure to shop around for the best interest rates at different banks and look for the right time to invest!
- Purchase Treasury Bills, Notes, Or Bonds: To sum them up quickly, treasury bills, notes, and bonds are short-term or long-term (depending on which you buy) IOU's from the government. They have relatively low interest rates, but are one of the safest investments you can make. Get started now at http://www.treasurydirect.gov/.
- Social Lending: Give social lending a try! Here you are lending money to people who will pay you back in the future with no financial intermediaries involved. The entire situation is a benefit to both parties. The people borrowing money are obtaining loans at lower interest rates and you are getting higher interest rates on your investments than you would be getting doing many other things. Try out sites like http://www.lendacademy.com/ or http://www.lendingclub.com/.
- Invest in a Business: Use the money to start up a business.
- Rent Out Property: Purchase a house on campus and rent it out to students. You could even stay in one of the rooms which would cover your own housing costs, plus it would be easier to collect from all of the people staying in the house.