The most valuable financial advice I have ever received came from my brother-in-law, who works in private equity. His message was simple: start investing in college.
When I took BU317 Investments, I learned a valuable lesson in building an investment portfolio and having diversification within that portfolio. The earlier you create a portfolio, the more powerful compound growth becomes. Money earns returns, and those returns begin earning returns too. Over time, that creates a snowball effect that is nearly impossible to replicate if you wait to invest.
I recommend the investments course to anyone who has the prerequisites to enroll. It solidified key economic terms and concepts that I had not interacted with before having to create a portfolio. The course was by far one of the most practical classes with real life applications I have taken in college.
A portfolio is the collection of all your investments, but the strategy behind it is what makes it successful. In the course, I chose to analyze Eli Lilly and Company as a stock pick because of its relative stability and long-term growth potential. It is also the biggest manufacturer of GLP-1s.
I learned how to balance a portfolio by combining stable, lower-risk investments with a smaller portion of higher-risk ones. That balance, known as diversification, is what allows you to grow your money while protecting yourself from major losses.
I recently spoke with a fellow economics student who takes a low-risk approach. He invests primarily in stable, established companies and broad market funds tied to the S&P 500. His strategy is simple, relying on consistency, patience within the market and focusing on long-term growth.
In contrast, he told me about a friend of his who takes the opposite approach. This friend is deep into high-risk investing, constantly moving money between volatile assets such as individual tech stocks and even Bitcoin, which is a major source of high-risk investments. He is constantly refreshing Bloomberg L.P., scrolling X and checking the New York Stock Exchange. His investments require near constant attention because prices can swing dramatically in a matter of hours, and that directly impacts the returns he has from those investments.
The contrast between these two styles of managing assets highlights the core difference between high-risk and low-risk investing. High-risk investments offer the potential for higher returns, but they come with volatility and demand active management. Low-risk investments, on the other hand, are built for stability. They grow steadily and allow you to step back and let the market work over time, which is best for accumulating wealth in the long run.
A well-built investment portfolio reflects that balance. Instead of putting all your money into one stock or one idea, you spread it across different types of assets. The majority might sit in stable funds or companies, while a smaller portion is allocated to higher-risk opportunities. The goal is not to eliminate risk, but to manage it in a way that allows for steady, sustainable growth.
The biggest misconception is that you need a lot of money to get started. You don’t. With modern investing platforms, you can start small and still build a diversified portfolio over time. Investing a little bit regularly is far more powerful than waiting until you have a large amount to invest all at once, because the whole point is to accumulate more wealth when you don’t have a lot, not start investing once you’ve made a substantial income.
So if you take anything from this, let it be to start early, build a portfolio that balances risk and stability and choose a strategy that fits your lifestyle. There are plenty of reliable accounting and money management firms that can help you execute a portfolio, and if you have the capacity, you might as well make your money grow.