You could be a millionaire.
It's quite possible.

Pinching Pennies As with every lesson in life, you have to start small. What would have happened if you'd kept pushing coins through the slot of your piggy bank? Just think how many pigs it would take to hold all that spare change now. Chances are you spent that money long ago. Well, here are six relatively painless steps to keeping that spare change in your pocket, adapted from Rowland's list. 1. Open a savings account at a small bank, preferably with no minimum account size and no fee, where you don't have an ATM card. Pick up a stack of bank-by-mail envelopes and make regular deposits so you won't be tempted to take "just a little" out on your way to the bank. 2. Write a regular check to your savings account when you get your paycheck - or when Mom and Dad take pity on you - and put it in your deposit envelope. Keep in mind that any amount is better than nothing at all. 3. Start small. Experts suggest you save 10 percent of your income. It's a reasonable goal, but don't give up if you can't. Start saving and save consistently, and you'll be on track. Begin with something you can live with, like $5 a week. 4. Watch your ATM withdrawals if you have a checking account with an ATM card. Decide how much you will take out each week and make it last. Make it a little tight. And try to decrease it over time. 5. Decrease the number of exemptions on your withholding form at work. If you claim one, go to zero. The government will take a few dollars out of each paycheck. You're giving the government an interest-free loan, but if you would otherwise fritter the money away, you're better off locking it up with the government. Dump your tax refund directly into your savings account. 6. List all of your credit cards with their interest rates, beginning with the highest rates. Cut up all but the two with the lowest rates. Concentrate on paying off the one with the highest rate, and move down the list when you've done so.

If your parents had invested about $600 when you wereborn, the money could easily become $1 million by the time you're ready to retire, according to Mary Rowland from Money magazine.

What? Your parents didn't spend the measly 600 bucks? And you don't know much about investing? Ignorance can be easily overcome by education, which is what this article intends to provide. It will help demystify the world of money, the one object that seems to disappear faster than a white sock in a Laundromat.

Don't worry, you have potential. Statistics show more than 60 percent of the nation's 8 million college students have one credit card. So most of you know a little bit about money, whether you think so or not.

But why now? Why not wait until you're older and make your kids millionaires? The answer is time. Every day you put it off, you're eating away at that million dollars. It's true: Time is money.

Demystifying Investing
Now you have a few ideas about how to start saving money. Should you spend it or try to (gasp!) invest it? Here's what you need to know to get going.

All investments are designed to make you more money, according to The Truth About Money, by Ric Edelman and Cal Thomas. There are two ways this can happen: by producing income or by growing in value. If you are paid regular interest, as in a checking or savings account, your investment is producing income. If you would have bought part of McDonald's when all he had was a farm, your investment would have since grown in value. Producing income is the more reliable of the two.

Phil Kousaie, senior vice president of Everen Securities, Inc. on South Water Street, says a student's goals determine how he or she should invest. "If they need money for school, they should invest for income. In other situations, they could invest for growth," he says.

Before investing, you must first study the information available from those businesses you are considering. See if there are Web pages, or go to the library and ask for a copy of the annual report. This report is usually available for free and gives a description of the company's business transactions, its financial statements and other information.

Or call the U.S. Securities and Exchange Commission's Office of Investor Education and Assistance at 202-942-7040 for more information. Request the handbook published by the Office of Public Affairs, Policy Evaluation and Research - it is one of the more readable sources of information available.

Kousaie says potential investors also need to use common sense. "What I would recommend to college students - who by definition have limited investment funds - is for them to find something they know something about," he says. "These are just examples, but take Walt Disney, Intel or pharmaceutical stock. You know something about what it does, it appeals to you and your generation. What you're buying is tomorrow's stock prices, not today's."

Getting Advice
What you plan to accomplish with your money determines how it should be invested, says Beth Goldthwaite, an account executive and stockbroker for Butler Wick and Co., Inc. on South Water Street in Kent.

"it's different for everybody," Goldthwaite says. "I can't recommend specific funds without knowing the person, knowing their needs and where they want to go."

She says cost averaging is a good bet for college students. Where a savings account might give 3 percent back to the investor, a cost averaging account might give 4.5 percent, Goldthwaite says.

"If you're just letting the money sit over the semester, you can make more money just by moving it from one account to another," she says.

Goldthwaite and several others agreed mutual funds work well for college students. Wayne Y. Lee, a professor and Firestone chairman of corporate finance, picked mutual funds as being one of the most student-friendly ways to invest.

"For students with limited resources, I would suggest investing in mutual funds rather than stock," Lee says. "You need to reduce your risk as much as possible. This is money that is important to you - it is not frivolous. At the same time, you want the highest return possible. It seems conflicting to have no risk and a high return, but you want a balance: the lowest risk with the highest possible return.

"You also want liquidity. You want to invest in something where if you need the money you can get it. With mutual funds you can write a check to access your funds," he says. "You can't write a check everyday - you can't use a mutual fund to buy groceries. There's a limit to the number of checks you can write, but you could pay for rent or major expenses like tuition and books - they're for large amounts but they're infrequent."

Kathryn Wilson, an assistant professor of economics at Kent State, also picked mutual funds, as well as index funds, as good ways for students to begin investing.

"In mutual funds, a company is going to manage a portfolio - that's just a whole bunch of different stocks - for you," she says. "There are two nice things about mutual funds: One is they do all the managing, two is they receive a high return. The downside is they're risky. When the stock market fell a few months ago, there was no guarantee of a return."

One of the first things a novice investor needs to determine is his or her risk. At one end of the risk spectrum is a bank savings account. What goes in, comes out - it's a very safe investment. At the other end are investments with different types of risk associated with them, each type affecting each student differently.

What it all comes down to, Wilson says, are three basic elements.

"Students need to realize there are three factors in investing. One is risk. A high risk means a potentially higher return. Then there's liquidity, which is how quickly you can get the money. A savings account is super-liquid, but has a low return," she says. "The third is taxes. Some securities have advantages. But students shouldn't be too concerned about that - most of them are in the low tax bracket anyway. The main thing is all things have trade-offs."

Hank Schueler, an investment representative at Investment Management and Research, Inc. on West Main Street in Ravenna, says mutual funds aren't what he would recommend for students.

"With mutual funds, there's a load fund and a no-load fund. With the no-load fund, people do everything by themselves. They get the form, fill it out and don't get advice. A load fund gives you advice, but they are going to charge you right off the bat," Schueler says. "I would rather go with a money market fund. It's similar to a checking account and earns roughly 5 percent now, twice the rate of a savings account. These funds are very liquid and the only disadvantage is the return, but there is very little risk."

Julie Johnson, a senior computer information systems major who owns a CD, a bond and stock in two companies, advises students to take the low-risk road, but doesn't recommend mutual funds as the first step.

"I would probably recommend CDs because the interest is high for them. I got mine during the summer when there was a special at my bank. The interest rate was high, and it was well worth it," Johnson says. "Where else can you put your money in an account and earn 6.7 (percent interest) a month? You don't have to wait too long to get your money out either."

A CD, or a certificate of deposit, works much like a short-term savings account, but your money is locked up and unavailable for a certain amount of time.

But Schueler warns students against locking up their money in a CD. "You have terms: If you buy a 6-month CD, you cannot get your money for six months. If the someone is planning for retirement, I would recommend a CD," he says.

Johnson says bonds also work well for students because they are so secure, but stocks can be more difficult to handle. A bond is basically an IOU from the government or a company. When you buy a bond, you're loaning the bond issuer (i.e. the government or company) your money. The issuer promises to repay what you paid for the bond - called the principle - plus interest.

Bonds do have their risks, the biggest one being inflation. Consider the fact that $50 went a lot farther 20 years ago than it does today. But as a general rule, bonds are considered safer than common stocks.

A stock is a "share" of a company. It is worth more when a company is doing well and less when a company is doing poorly. Of course, stocks are open to marketability risk, which means that if you own stock in a company and its worth drops, you'll have a harder time finding someone to buy your stock.

Many people see the stock market as risky. In reality, it is not the market that is unstable, but the people who invest in it, Rowland says. Novice investors often sell their stock shares as soon as the market starts going down and only buy stock when the market goes up. The general trend of the stock market is to rise. The key lies in the patience and ability to leave your stock alone while the market fluctuates.

"Stocks are not really for students," Johnson says. "You have a limited amount of money, and you can't afford the best stock. If it fails, you owe money, but you really need it."

OK, now you're armed with the basics. Piggy banks aside, investing can really pay off. Congratulations, you're on your way to your first million.