A Suitable Investment For Students

Success doesn’t have to wait until you are old, even though you are still a student you also have the right to start learning how to invest. The sooner you learn to invest, the higher your potential for success at a young age.

You have to be careful in choosing the type of investment that is cheap and in accordance with the capital and risk. Especially if you are still a student, learning is certainly more important than investment.

There are various types of investment that are suitable for students, there are investments in gold, mutual funds, stocks to property. However, because students generally do not have their own income, it is better to choose investments in a safe way with low risk.

Why should you start learning to invest while still a student? Because you can gain experience only through practice. Including for experience in financial management, including investing in certain fields.

What is Investment

Investment is placing a certain amount of money in an asset with the aim of making a profit in the future. Investment assets can be divided into two types, namely real assets and financial assets.

Real assets are a type of investment in physical form such as gold, land and real estate. While financial assets are usually non-physical, such as mutual funds, stocks and bonds.

Most students sometimes don’t understand which assets to choose for investment. Especially if the budget or available capital is very limited. However, limited capital and ability are not an obstacle for a student to start investing.

Types of Investments That Are Suitable For Students

1. Gold Investment

Gold is one of the most chosen investments because of the minimal level of risk. Especially now that there are lots of gold savings available, both offline and online, such as gold savings at pawnshops, Tokopedia, etc.

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As the price continues to rise, gold is a suitable investment choice for students, even for beginners. The depletion of natural resources in gold mining is considered to be one of the supporting factors for gold prices which continue to rise.

Until January 1 last year, the price of gold was still at IDR 638,000 per gram. Meanwhile, today’s gold price reached IDR 956,000 per gram. If you buy 10 grams of gold on January 1, today you will get IDR 3 million profit from the difference in gold prices. This proves that gold investment is attractive enough to be used as an investment vehicle for students.

Advantages of Gold Investment:

  • The price of gold is stable and tends to increase from year to year.
  • Gold can be easily cashed anytime and anywhere.
  • Gold can be purchased easily either online or offline.
  • Suitable for protecting the value of money from inflation.
  • Gold exists in physical and non-physical forms.
  • Relatively low risk level.

2. Mutual Fund Investment

Investments that require small capital and minimal risk are suitable for future students, namely mutual funds. Investing in mutual funds is quite easy compared to stocks because you don’t need to have a thorough knowledge of capital market analysis.

To start investing in mutual funds you need to choose the best securities company that is supervised by the Financial Services Authority (OJK). In mutual funds, the money you invest will be managed by the investment manager so it doesn’t take a lot of time and expertise to calculate risk.

There are 4 types of mutual funds that you can choose as an investment, namely money market mutual funds, fixed income mutual funds, stock market mutual funds, and balanced mutual funds.

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Advantages of Investing in Mutual Funds for Students:

  • You can start investing with small capital, ranging from hundreds of thousands to millions of rupiah.
  • Minimal risk and safe because it is managed professionally and transparently by the Investment Manager.
  • Easy and practical to understand even by beginners and students.
  • It can be for short term or long term investment.
  • There are many types of mutual fund investments to choose from.

3. P2P (Peer to Peer Lending)

The next investment that is suitable for students is P2P lending. The development of P2P Lending in Indonesia is very encouraging. Currently, there are more than 150 P2P lending companies in the fintech sector that are registered and have permits from the OJK.

P2P lending is a method that connects lenders directly with those who receive loans. This is fintech technology without involving external parties such as banks.

The advantage of investing in P2P lending is seen in terms of the amount of capital invested in the resulting ratio is small.

Advantages of Investing Through P2P Lending:

  • Flexible start-up capital can be started with little capital.
  • Easy to use even for beginners.
  • Interest rates or yields are quite high.
  • Flexible term options from one month to one year.
  • Supervised by the Financial Services Office (OJK).

4. Sharia and Conventional Deposits

Deposits are one of the investments that can be considered for students, some are sharia or conventional. Time deposits are time deposits provided by the Bank with pre-agreed terms. Time deposits have various options, there are short-term investments and long-term investments including 1 month, 3 months, 6 months, 12 months to 24 months deadlines.

Compared to ordinary savings, time deposits are the best choice because they have a higher interest rate. Study the information first about deposit interest rates at leading banks because the interest is not always the same.

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Investments through sharia and conventional deposits are more suitable for students who want to save and minimize losses because they are safer. Other advantages are:

The advantages of Deposit Investment are:

  • Low risk because there is a guarantee from LPSK
  • The interest rate is higher than savings interest.
  • You can choose a flexible timeframe that can be adjusted to your needs
  • Can be used as collateral for credit.

5. Bond Investment

Investment bonds have security and provide higher interest returns than deposit rates so this is suitable for students. Bonds are term bonds issued by governments or companies with an agreement to pay the principal plus interest.

The purpose of issuing bonds by the state and companies is to attract funds from the public which are used to finance government and corporate expenses.

The thing you need to pay attention to when investing in bonds is to study the terms first, including the maturity date. Because bonds have a maturity of more than one year, even up to 10 years. So this bond can be a long term investment

To be safer, you should invest in government bonds or retail government bonds (ORI) 2020.

Retail investment in government bonds is very suitable for students to choose as an investment vehicle with real benefits. Apart from ORI being higher than deposit interest, ORI also has many advantages, including:

  • The coupons offered are higher than the average state-owned bank interest rates.
  • Coupons and principal are guaranteed by law.
  • Fixed rate coupons until maturity.
  • You can trade on the secondary market (between domestic investors).
  • Availability of bid prices from distribution partners or other parties working with distribution partners.