First time investors should learn that patience and perseverance are greatly rewarded. This should also serve as motivation for future investors as they embark on a career in creating a long term stake in the markets. One should also do some proper research before leaping forward in an investment.One should make sure they have sufficient funds to cover any unforeseen expenses.
The hard work is usually done once one makes the decision on which broker will be best in managing one’s online investments. All that is required to get started is to open an account and get the cash to the broker. This can be done via mail or online.
If one is comfortable with opening a brokerage account over the internet then the online route is the best option as cash can be transferred directly from the bank account and it makes it possible for one to up and running in a couple of hours. One can also sign up by mailing a check and application which could take weeks.
One will be asked a variety of questions which should not put any one off when opening an account. It is also expected that the broker will ask for personal information like one’s social security number. Considering that this information being shared is very sensitive, it is crucial that one understands online security. Most of these brokerage websites usually have a “start now” button or “open an account” button which any newbie will be able to see.
Three things are needed to complete the application
- The kind of account one wants to create: This can be a cash account or a margin account.
- The number of people associated with this account: Is the account yours alone, or yours with your spouse? This determines whether one creates an individual or joint account.
- The tax status of the account: Is this account taxable or tax deferred, such as an IRA or a college fund?
Most brokers will tend to waive maintenance fees when one is opening an IRA account because they figure one will keep their money with them for a while. Many brokers also go ahead and waive the minimum deposit required. If this is your first go in opening an online investment account one should consider opening a retirement account first.
You need these bits of information to open an account
- Identification: This could be in form of a driver’s license or government issued identification card.
- A social security number: If one is setting up a joint account, one will need the social security number of the person they are setting up the account with. This number is used for tax reporting purposes.
- A bank statement of the financial institution from which you intend on transferring money from: This usually contains the account number and bank routing numbers one will need to instruct the broker to get your cash. Some brokers sometimes refuse to let one open an account with electronically transferred money if you are depositing less than 500 dollars. In such cases one needs to mail a check.
- The address of your employer: This applies if one is an officer, a director or large shareholder of a publicly traded company.
Once one has set up the account, entered all the relevant information and funded the account one is ready to go ahead and start investing.
Featured Image: DepositPhotos/peshkovPosted on May 22, 2023