If you’ve ever spent time on TikTok or YouTube, you’ve probably seen investing content. It usually consists of young investors talking about building fortunes worth thousands of dollars, though you see some people lose everything too.
The risk of losing your hard earned money often keeps young adults from investing at all. With uncertainties about what will happen to your money, existing debt from student loans and credit cards, and a general distrust of the financial system, it’s not too surprising that many college students steer clear of investing.
But while investing can be a frightening topic for many college students, it’s not actually as scary as it seems. TikTokers and YouTubers might either lose everything or make millions, but in reality, most investing yields modest, consistent returns that can help you build for your financial future. You might not earn a fortune overnight, but even small investments can add up quickly. And Fizz is here to make things easier for you.
Why is investing early important?
Even if you don’t have a lot of money to invest, don’t worry - time is on your side. Investing early is one of the best financial decisions you can make, all due to the magic of compound interest. Compound interest is a significant factor when it comes to investing - and don’t worry, it’s not as confusing as it sounds.
Simply put, compound interest is the interest that you earn on your interest. Say you invest $100 and you earn 7% interest over the course of a year. You now have $107 - and now you’ll earn 7% interest over the course of a year on $107 instead of just $100. You didn’t even have to do anything, but now you’ve got more money and are earning more and more each year. This process accelerates the growth of your initial investment over time - so don’t expect to be rich in the next few years. But compound interest can have a huge effect over the course of several years, and it shows the clear advantage to investing over using a savings account.
Now we’ll add even more context. Say you were to invest $100 every month starting at age 20. By the time you turned 65, you’d have about $345,000 (assuming a 7% annual rate of return). If you were to invest $100 every month starting at age 30, you would have only earned about $167,000 by the time you turned 65 (assuming a 7% annual rate of return). With 10 fewer years to compound, you’re missing out on a lot of extra money. So don’t wait to get started!
How Fizz can help
You don’t have to be a financial guru to start investing. All you need is a plan and a little extra money. And Fizz can be a huge help. While most student credit card companies have a 30-day billing cycle, Fizz has a daily repayment cycle, keeping your accounts up to date and keeping you from overspending.
By more accurately representing your finances on a daily basis, Fizz helps you stay on top of things. As a result, it’s a lot easier to put money aside for things like investing - even if it’s just a few dollars per week or per month. Every little bit helps, and Fizz is here to make it even easier to invest for your financial future.
Fizz is designed by students, for students. We understand what it’s like to be a college student. While not everyone has thousands of dollars to invest, it’s never too early to invest small amounts. And those small amounts can add up to huge sums in the future. So what are you waiting for? Sign up for Fizz and start investing in your financial future today!
Sam is a Kenyon College alum and is head of content at Fizz. He's been a go to personal finance resource among his peers since getting his first credit card during his sophomore year of college. He hails from Washington, DC, loves all things aviation, and currently lives in Los Angeles.