Parth was elated when he received a whooping ₹ 240,000 internship stipend for a two-month summer internship at Hindustan Unilever Limited (HUL). This is one of the most coveted internships for Mechanical and Chemical engineering junior undergrads in the Indian Institute of Technology (IITs). Even before the money was in his bank, he had made plans to buy Duke for his love of motorbikes.
Barring a few code geeks engrossed in data analytics and software development, most of the engineering interns in India aren’t that lucky to get a hefty stipend. However, some companies are quite generous with their payouts and many international internships often pay a good sum.
If you are one of those guys still pondering on how to use your internship stipend effectively, then here are 5 ‘Numb Tips’ for you.
1. Fund Your Hobby
Jaseel, a senior undergraduate in Biomedical Engineering at IIT (BHU) was lucky enough to get an internship opportunity at the Massachusetts Institute of Technology (MIT) in 2016. Having won the Khorana scholarship in his junior undergraduate year in 2016, he had enough in his bank account to keep him afloat.
He was passionate about travel photography and wanted to delve into aerial photography. Hence, he brought a DJI Mavik Pro and his aerial shots have featured on several Instagram pages and he was even paid by several startups and filmmakers for his aerial footage.
There would have been several guys out there with a stipend much higher than his. He received around $5000 for his 3 months internship. However, he pushed himself enough to turn his hobby into an investment. If you are an amateur photographer reading this, you can buy a great DSLR or a great quality lens and submit high-quality photos to Shutterstock (say). This can help you earn a few bucks!!!
Thus, investing in your hobbies is a great way to spend your internship stipend.
2. Invest in Liquid Mutual Funds
Do you know that most banks pay you peanuts (around 3.0% to 4%) as the interest on your savings? Why keep the money in the bank when you can earn more hardly without risk?
I would not suggest you to invest in Public Provident Fund (PFF) with a term to keep your assets for a certain period. You can invest in Liquid Mutual Funds. I invested in Reliance Smart Deposit that pays you interest around @7% per annum. This is a low-risk investment with instant money withdrawal to your account in less than an hour.
This is better than a fixed deposit of interest rate less than @6.75% in the bank. Firstly, it is because you don’t have to go to any financial organization or queue up to seek help. You can regulate your money at your fingertip using the ET Money app. This app by Times Group can help you invest in top mutual funds by churning out curated aggressive and balanced mutual fund schemes to buy.
If you have long-term plans (at least 1 year), consider investing in mutual funds with a diversified portfolio. For example, you can buy 40% in large-cap funds, 30% in multi-cap, and 30% in small-cap funds.
Numb Tip: Financial Education is crucial for financial independence. Someday you have to learn it. So, the earlier the better.
3. Buy Stocks and Invest
Till 2016, the Indian media was shy of publishing news about bitcoins and Cryptocurrency in the front page. Come June 2017, the headlines often featured the stories about Cryptocurrency. My western adventure had taught me some lessons on financial independence and I decided to invest in cryptos. I invested a few thousand in Ripple, Lite Coin, and Bitcoin Gold through Koinex and I earned over 100% profit. It was fun until the RBI crackdown.
Nevertheless, you can invest in stocks and bonds. Investing in bluechip stocks that consistently pay you dividends can be relatively safer investments for beginners in stock market.
If you are an Indian, you can open your Demat account on Upstox or Zerodha or any other discount brokerage company and start investing in equity shares. You can educate yourself about the stock market and then take further strides. For international investors, you can open an account on ‘RobinHood‘ or etoro and start trading in “safer” stocks like Apple, McDonald’s, Walmart, Alphabet etc.
4. Invest In Your Start-Up And Projects
If you are an electronics enthusiast with some great ideas in mind, getting your hands dirty in a new project can help you win several innovation challenges. Accenture Innovation Challenge, TI Innovation Challenge, and Ericson Innovation Challenge are held annually with a great exposure and prize money.
Further, you can push yourself a step further by investing in your startup. Have you ever fancied starting your own venture while being in college, but backed out due to lack of skills, money or time? Let me tell you investors don’t always hand you over the money and even the most creative ideas which sound good to ears receive funding and still fail. So, your stipend money can help you hire a few employees, buy your domain name, build your mobile app and there is more to it.
In fact, I had always wanted to start my own blog, even before I cleared the Joint Entrance Examination (JEE). However, being a procrastinator, I kept on pushing the plans further. So, finally, during my summer internship in the junior year, I brought a domain with my stipend and started this blog to write my travel story. But as Robert Frost said, “Roads lead onto roads”, you are reading a post unrelated to travel. I save the story for another day.
5. Learn A New Skill
Investing in a skill with high demand can place you ahead of your contemporaries. You can pay a small amount from your stipend money to earn a certificate in Machine Learning on Coursera, pursue Data Analytics course on edX or pursue any course that can bolster your competence in an industrial skill. Some recruiters do value MOOCs during interviews.
Although getting a summer internship is not a cake walk, getting a paid internship position is tough. However, spending the internship stipend wisely is an art and it requires financial knowledge which every student should accrue.
Do let me know in the comments on innovative ways to spend your internship money. I would add them to the blog post.