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LET'S THREAD AGAINI get a lot of people in the DMs asking "How do I start?"
"I know I need to be investing, what should I do?"
Let's walk through it. I won't get too in the weeds.
Let's get to it!
Disclosures up front:
- I am not giving you investment advice
- This is not an all-encompassing guide to the industry
- I am not making any specific investment recommendations
This is literally a guide on how to get started.
- I am not giving you investment advice
- This is not an all-encompassing guide to the industry
- I am not making any specific investment recommendations
This is literally a guide on how to get started.
1. Picking a broker
There are tons to go with & they come in all shapes & sizes.
The three most common types are:
Full-Service
Discount
App-based
Each have their own distinct advantages and disadvantages.
Let's take a closer look.
There are tons to go with & they come in all shapes & sizes.
The three most common types are:
Full-Service Discount App-basedEach have their own distinct advantages and disadvantages.
Let's take a closer look.
Full-Service firms often partner you with a Financial Advisor/Planner.
They may offer services that go beyond your typical trading & investing.
This may include tax consulting & estate planning.
Typically higher fees.
Examples: Merrill Lynch, Morgan Stanley, and Edward Jones
They may offer services that go beyond your typical trading & investing.
This may include tax consulting & estate planning.
Typically higher fees.
Examples: Merrill Lynch, Morgan Stanley, and Edward Jones
Discount brokers are more a "do it yourself" situation.
The brokerage itself will still provide you with research tools
But at the end of the day, you're calling the shots.
Most are offering fractional shares and $0 commissions!
Examples: Schwab, TD Ameritrade, Fidelity
The brokerage itself will still provide you with research tools
But at the end of the day, you're calling the shots.
Most are offering fractional shares and $0 commissions!
Examples: Schwab, TD Ameritrade, Fidelity
App-Based firms are typically going to be the ones you check on your phone.
They have excellent mobile user experiences and provide you with research tools to make your decisions.
Most of them are also offering fractional shares and $0 commissions.
Examples: Robinhood, Stash
They have excellent mobile user experiences and provide you with research tools to make your decisions.
Most of them are also offering fractional shares and $0 commissions.
Examples: Robinhood, Stash
2. Selecting an Account Type
You'll have all sorts of different account types, but the 3 most common are:
- Brokerage
- Roth IRA
- Traditional IRA
All of them serve a purpose & all three may be right for you!
It depends on your situation.
But let's look at the differences.
You'll have all sorts of different account types, but the 3 most common are:
- Brokerage
- Roth IRA
- Traditional IRA
All of them serve a purpose & all three may be right for you!
It depends on your situation.
But let's look at the differences.
Brokerage accounts are typically easiest and quickest to set up.
They are not "tax-advantaged" meaning you must claim any taxable gains for that year.
You will also be investing with money that you have already paid taxes on.
(no fun GIFs when we're talking taxes)
They are not "tax-advantaged" meaning you must claim any taxable gains for that year.
You will also be investing with money that you have already paid taxes on.
(no fun GIFs when we're talking taxes)
Roth IRAs are accounts where you invest money that you've already paid taxes on.
But the tax-advantages here are that you will have tax-free distributions of your gains after age 59 1/2.
You can also withdraw your contributions anytime without taxes or penalties.
But the tax-advantages here are that you will have tax-free distributions of your gains after age 59 1/2.
You can also withdraw your contributions anytime without taxes or penalties.
Traditional IRAs are another tax-advantaged account, but this time on the front end.
You contribute pre-tax dollars or reduce your taxable income by the amount you contributed that year.
But Uncle Sam will always get his cut, so when you distribute in retirement, you pay taxes.
You contribute pre-tax dollars or reduce your taxable income by the amount you contributed that year.
But Uncle Sam will always get his cut, so when you distribute in retirement, you pay taxes.
Please consult a tax professional before making any decisions on a retirement account.
If you want to get started right away, you can open a brokerage today.
Later, when you've made a decision about an IRA, you can transfer the cash and securities from your brokerage account.
If you want to get started right away, you can open a brokerage today.
Later, when you've made a decision about an IRA, you can transfer the cash and securities from your brokerage account.
3. Depositing Your Money
You can deposit funds into your new account by connecting it to your bank account.
You can also cut a check to your brokerage (most won't accept cash).
Or you can rollover from an old 401(k) or employee retirement account.
Consult a pro before this^
You can deposit funds into your new account by connecting it to your bank account.
You can also cut a check to your brokerage (most won't accept cash).
Or you can rollover from an old 401(k) or employee retirement account.
Consult a pro before this^
4. Do research, invest, and check in
At this point:
- You've picked a broker
- You've opened an account
- You've funded the account
Now all that's left is to research different investments & select what's right for you.
Check in on your portfolio periodically for rebalancing.
At this point:
- You've picked a broker
- You've opened an account
- You've funded the account
Now all that's left is to research different investments & select what's right for you.
Check in on your portfolio periodically for rebalancing.
Like I said, this isn't an all-encompassing guide, but it's enough to get you started.
If you are looking for more in-depth info
My full beginner's guide "Baby Steps to Investing" goes into much more detail about the full experience.
CLICK HERE https://gum.co/djWbi
If you are looking for more in-depth info
My full beginner's guide "Baby Steps to Investing" goes into much more detail about the full experience.
CLICK HERE https://gum.co/djWbi
Also, if you want to learn HOW to select the right investments for you
I can't recommend "The Investor's Playbook" enough!
This is a 6.5 hour course covering:
- Company valuations
- Increasing dividends
- Portfolio diversification
(Aff)
CLICK HERE http://tiny.cc/IPDBS
I can't recommend "The Investor's Playbook" enough!
This is a 6.5 hour course covering:
- Company valuations
- Increasing dividends
- Portfolio diversification
(Aff)
CLICK HERE http://tiny.cc/IPDBS
Please DM me if you have any questions.
I want to see you succeed and I'll do whatever I can to help!
I want to see you succeed and I'll do whatever I can to help!
