STEP 1: Open a Brokerage Account

A brokerage account is different from a bank account, and is required to buy and sell stocks, funds and other investments.  You may open a brokerage account with a bank or a brokerage firm.  If you are investing for retirement you may want to consider  a brokerage IRAs (individual retirement account) which offer tax advantages IF you meet the requirements.  

 

TIP: Pay attention to fees when you compare brokerage accounts. 

Check for transaction (buy & sell), monthly, account and fund management fees.  

Easy link to:   Vanguard, Fidelity, Schwab, Robinhood, Etrade**

 

​TIP: If you would prefer an investing app choose one that does not require you to spend to save and invest! Investing should be a stand-alone priority not conditional on spending.  

 

TIP:  Setting up a brokerage account is a smart move, even if you're not yet ready to choose your investments, so you'll be able to act if an opportunity presents and you're comfortable. 

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STEP 2: Transfer or deposit the money you want to invest into your new brokerage account.

It is often possible to link your bank account to your brokerage account for easy transfer. Step-by-step directions on how to link your accounts will be provided by the brokerage company when you open your account. 

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STEP 3: Enter a "buy" order to purchase your investment in your brokerage account. 

Your brokerage home page will likely have a tab marked "Trade" or the equivalent where you can enter an order to buy your selected fund*or other investment. 

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There are a million ways to make investing sound complicated, and the financial industry often does, but now you know how simple investing can be. Investing is often described as "risky" when compared with savings. In fact, all investments carry some degree of risk - even insured bank accounts. How? Savings accounts carry inflation risk - the risk that the money you deposit will not earn enough interest to keep pace with inflation - the increasing cost of living. If this happens, when you withdraw your money - which will not be less than the money deposited, it will have lost some of its purchasing power - it will buy less. When investing, there is the potential to lose some or all of the money you invest, but there is also the potential to earn a significant return (capital gains). To make smart investment decisions you should know your risk tolerance - how much volatility (up and down price movements), and your time horizon - for how long you will be investing until you need the money (for example, 2 years to buy a car or 20 years for retirement).  Knowing your time horizon, risk tolerance, and the risk/reward profile of investments (think blue chip stocks vs. cryptocurrency vs. index fund), will enable you to choose investments with an appropriate risk-reward profile for you. Sign up for early access to our self-directed workshops to learn more.