Financial Literacy 101 · Investing · Lifestyle Tips

My Investment Strategy As A Broke Student Part II

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In part 1 of my investment strategy, we talked a lot about compound interest and its importance to building wealth. We highlighted the importance of investing early and for the long term – that is, no touching that money until you retire.

Today, we are taking things to the next level. But first, let’s cover our basics.

In order to be able to invest, you must first have money. For a student or young person, I highly recommend that you invest you own money that you saved rather than borrowing. The last thing you want to do is start out the rest of your life in more debt, especially if you have student loans.

I found that the easiest way to save money is by following the 10% rule. That is, every time money comes your way, make sure to put away a tenth, even if it is only a small sum. From little things, big things grow, and so will your savings over time. What I prefer to do is save for an entire year and then buy new investments once a year, which allows me to save on transaction costs.

The next important thing I want to talk about is an emergency fund. For your wealth’s sake, I cannot stress just how important having an emergency fund is. I do not care if you still live at home, work a steady job or are a millionaire: you need an emergency fund.


Because life happens. The last thing you want to do is sell your investments to be able to cover up a financial emergency.

Having an emergency fund is like a comfy mattress made of money: it is reassuring, reliable and more importantly, it helps you sleep at night.

I go into more detail about how to efficiently build an emergency fund here. My two cents for anyone who has been broke before is that in my opinion, you should only invest after you’ve completed your emergency fund. After sleeping on a blow-up mattress for two months, the importance of having an emergency fund has been instilled in me. Learn from my mistakes and don’t leave yourself exposed. Get an emergency fund.

Now that we have some money in our pockets, let’s talk strategy.

Classic financial advice.

I choose to follow the ‘age to risk ratio’ strategy popularised by William Bernstein in his book “If You Can: How Millennials Can Get Rich Slowly”. As a side note, I absolutely love this book and you need to read it. If you can afford to, you can grab a copy here while also supporting this blog.* I also have a summary of it included in our resources page.

In a nut shell, Bernstein’s strategy is actually quite easy. He wants you to split up your investments based on your age. The number of your age will represent that percentage of safe assets you should hold, with the remainder of your investments all being made up of risky assets.

As I am currently 21 years old, I have 21% of my portfolio invested in safe assets, such as government bonds, and 79% invested in risky assets, such as start-ups. By the time I turn 70, I would have 70% of my portfolio in safe assets and 30% in risky assets and so on.

The idea is to sync your investments to your current life cycle. As you can imagine, an 18-year-old would have a much higher appetite for risk than a soon to be retiree. This enables the 18-year-old to be exposed to greater risk and potentially greater returns over their life time, while also allowing the retiree some risk exposure without threatening their nest egg.

I am a huge fan of this strategy as it is pretty straight forward. Each year, you make adjustments based on your age. It really can’t be any simpler than that.

Another thing I love about this strategy is that nowhere do you see the “get rich quick mantra” that so many preach about. Bernstein’s book title says it all with “how millennials can get rich slowly”. This strategy doesn’t promise you the sun and the moon, but instead acknowledges that real, long lasting wealth is built over time.

I think as a generation we have been accustomed to instant gratification, which can be a problem when it comes to investing your money. I remember this distinct conversation I had with one of my classmates about investing, where I was trying to explain to them my method and views on investing for the long term. They asked me how much my stocks had made me in the last month, and I replied that I didn’t know, but portably very little. They immediately lost interest and started telling me about this website that lets you make money immediately. Uhm, sketchy much?

Miracles don’t happen overnight, and unless you’ve won the lotto, getting rich won’t either.

When you invest, especially if you are young, invest for the long term. Warren Buffet’s favourite holding period is forever. Luckily, yours doesn’t have to be that long.

I know you are young and retirement seems like forever, but life will pass most of us by in the blink of a eye. It seems like only yesterday I was 14 and earning $8/h, thinking of how great my salary was. Oh, how the times have changed.

Quite simply, if you want to get ahead of the pack, you must start planning now.

If you want to stop being broke today and eventually become rich tomorrow, it is time to start doing something now.


In part 3 of my investment strategy, we will finally get down to the dirty: where I put my money. Is it a bird, is it a plane? Is it cryptocurrency or is it real estate? All this in my next post!

I hope you’ve enjoyed part 2 and picked up a few tips along the way. Now I want to know more about you. What is the best advice someone has given you about investing?

Let me know in the comments below!



Being broke is temporary. Being rich is a journey.


*Includes affiliate links, meaning that if you do make a purchase, this blog would get a small percentage of the sale at no extra cost to you.

8 thoughts on “My Investment Strategy As A Broke Student Part II

    1. Oh my god I am so honoured to be getting a comment from you! Like I am in full fan girl mode right now, I can’t even! First of all, thank you so much! This means a lot coming from someone I admire so much! I’m just learning as I go and making the best of it. Second of all I just have to say you are doing exactly what I want to be doing later on when it comes to finances and growing net worth, so again I am honoured that you even read this post! Thank you thank you thank you ❤
      Ps: you've probably guessed by now but I love your blog ❤

      Liked by 1 person

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