Start Investing In The Stock Market While Laying In Bed
Chances are you’ve once thought about how you can start investing in the stock market. You may have either heard Warren Buffett’s name, or watched Jim Cramer on CNBC. One of these could have sparked your interest and had you asking yourself, “How do I buy a stock?” or “How do I invest in a company like Apple or Amazon?”
Investing can be daunting for some, and you may not know where or how to start. The good news is the access to information in today’s day and age has made it easier than ever to learn something new. Including investing and the stock market.
As of a matter of fact, you can open a brokerage account and start investing in some of the top stocks to buy like; Apple (AAPL stock report), Amazon (AMZN stock report), Facebook (FB stock report), Netflix (NFLX stock report), and Google (GOOGL stock report) from your fingertips, without ever having to get out of bed.
What Is A Brokerage Account?
Unlike a traditional bank, a brokerage account gives you access to a wide range of different investments—for example, stocks, bonds, options, and Mutual Funds. You can open and fund a brokerage account with a brokerage firm or investment company and then use the money you funded the account with to purchase investments.
You own the money and investments in your account, they are assets of yours, and you can liquidate them at any time. Think of the brokerage or investment company as more of a “middle-man” between you and the investments you want to buy.
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How To Open A Brokerage Account In 4 Easy Steps
If you’re now ready to start investing in the stock market and you want to open a brokerage account, follow these simple four steps.
Step 1: Choose How Much Investing Help You’ll Need
There are different kinds of brokerage accounts. The first step to opening up a brokerage account consists of you doing your homework to find out which type will best fit your investing needs.
There are accounts called managed accounts that come with investment management, such as a Financial Advisor or Registered Investment Advisor (RIA).
Other accounts have more of a Do It Yourself approach, like an E-Trade, TD Ameritrade, or Robin Hood. A benefit to having a managed account is you have usually assigned a financial or investment advisor that will help you with the volatility of the stock market.
A con to having a managed account, it comes with a fee, which can have an impact on your profits.
Then you have your discounted brokerage account, like the names we mentioned above. These accounts have more do it yourself method, so if you’ve done your research on the stock market today and you feel you’re ready to start making your own investment decisions, a discount brokerage account could be an excellent option for you. A pro to having an account like this is there no management fee like the managed account. Though some online brokerages still charge a transaction fee for each trade you make, other big-name discount brokerages offer commission-free trading.
Opening a brokerage account does take time and research to figure out which company best fits your investment style and needs; that’s why this step is arguably the most important out of the four steps.
Step 2: Choose The Investment Account That Best Fits Your Needs
After you decide if you’re going to go with a managed or DIY account, it’s time to choose the investment account that best fits your investment needs. As you’re looking around, here’s a list of things to take into consideration:
- Fees: Lookout for fees. Remember, these companies you’re opening an account with are businesses, and they need to make money. Make sure to ask the right questions, because you don’t want to get hit with unexpected fees.
- Research & Education Tools: If you’re thinking of going with the online route, you have to ask yourself, which company has the best tools to help do your research, and that can help you learn more about investing in the stock market to become the best investor you can be?
- User Friendly: Take a trial run with some of the companies websites to get a sense of how easy it is use. You’re investing your hard-earned money; you want to make sure you feel comfortable within your brokerage account.
- Minimum Balance: Have you figured out how much money you want to invest? Some brokerage accounts require you to have a minimum balance in the account. Shop around to see which account best fits the amount you’re going to invest.
Step 3: Apply To Open Your Brokerage Account
You’ve done your research, figured out how to open a brokerage account, and which account best fits your investing needs. It’s now time to apply for your account. If you chose the online account, the application process could take less than 10 minutes to complete. And you can do it directly from your laptop, iPad, or cell phone.
Here is some of the information you will need to have on hand to set up your account.
- Personal Information: When it comes to your personal information, you will have to provide items such as; your social security number, address, and phone number. They’ll most likely ask a few questions about your assets and financials. These are items you can expect to provide, and this information is usually universal for all online brokerages.
- Tax Status: You’ll see questions asking how you file your taxes. You’ll see a question on whether you are filing individually, of you filing jointly with your spouse?
- Risk Tolerance: There will be asked questions about your risk tolerance. Items like, how much or how little risk you’re willing to take on your investments?
Step 4: Fund Your Account And Begin Investing
You’re now ready to start investing! Exciting, I know. You’ve done all the necessary steps to get to this point; you’ve conducted the research, chose the best brokerage account for your investing needs, complete your application. Now it’s time to rock and roll.
Investing has the potential to appreciate your money significantly. But it’s crucial to understand that nothing is ever guaranteed and you can potentially lose all the money you invest. It’s about understanding your risk tolerance and learning how to manage your willingness to take risks.
Best of luck in your investing journey!