Investment for Absolute Beginners Part 2

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Now that you understand what stocks are you might be asking yourself but how do I start? That is what I will be talking about in this article.

Do you remember the first time you opened a bank account? Maybe your parents did it for you but it is very simple to do. That is exactly what were are going to do here as well.

Your bank account, also called a checking account, holds cash for you to use when needed. You are able to use it to write checks as well. For you to buy stocks you will need to open what is called a brokerage account.

A brokerage account allows you (the investor) to be able to buy stocks (shares of companies). The brokerage account is offered by licenced brokerage companies which are mostly regular banks. For the majority of people in North America, some parts of Europe (like the UK), and Australia the odds are that your bank probably offers a brokerage account.

But why haven’t they told me to open one? Well, that is the best question but it has to do with the fact that most people are unaware of it. You can call them now and they can open it for you in few minutes! It is that easy!

Common questions and concerns:

  • What if the bank charges me a fee to open the brokerage account? ~ there is no fee (if they charge run!)
  • What if the bank does not offer it? ~ find another bank
  • But I will have so many accounts! ~ they can link them together to your main account
  • But I do not have money to invest! ~ I started with $50 dollars ( you can let the account sit for a while without any money)
  • How do start buying stocks? ~ now you are getting ahead of yourself! 🙂

Instead, the question to ask at this stage is, “what is required to open a brokerage account?”

You will need the same information for opening a regular account which includes: home address, phone number, email address, and personal identification like passport, driver’s license, social insurance number (SIN)/ social security number (SSN).

During the process of opening the account they will ask you common questions like, “what are your goals for investing?” or, “what is your risk tolerance?” and other similar questions.

Congratulations! You have completed the profile and opened the account! Now it is time to fund (add money to) your new account to start buying shares (stocks of companies).

Are you surprised how easy it is like I was?

The best book I personally recommend when getting started is Money Master The Game. I am shocked when I see some other books recommended ahead of this one! I have read books on this topic but in most of them you need to understand the basics or they get technical after 2 chapters. Most of them do not even walk you through the reasons you want to invest but this one goes through all of that and talks to successful investors (so many) like Ray Dalio who built the world’s largest hedge fund firm to date.

In the next article, I will be sharing how you can buy shares in reputable companies. You need to seek financial guidance as well in the process but do not let other people control your hard-earned money.

How about you make those extra funds earn a little bit of money rather than have the banks offer 3% returns on your savings account (I am being too generous here!) when the inflation is at 7%? It does not take a genius to see that your money has less buying power sitting idle in the checking account (the number you see but your money is actuality in the market or lent out)!

Action: Open a brokerage account!

Here is the list and links of the common brokerage offering banks/firms in the USA, Canada, UK, and Australia

United States:

Canada:

United Kingdom:

Australia:

 

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