Opening a brokerage account is the first step to start investing and the whole journey with stocks, funds and the rest of your your investing journey.
Lets start this article with explaining what brokerage account is. So easy explained a brokerage account is what most investors now on days use to buy and sell stocks, bonds and mutual funds.
Most brokerage account or rather said all brokerage account are also referred to as taxable accounts, because investment income within a brokerage account is taxed as a capital gain.
How do these brokerage accounts work? You may ask, the answer to this is that there are a lots of licensed brokerage firms who allows you to create and open an account and their firm. Most of them are free to create and set up but still there are couple of these firms which will charge you a small price at monthly bases.
Most of these licensed brokerage firms allow you to open a brokerage account quickly online. And for these online accounts you don’t need a lots of money to get started with. There are many licensed brokerage firms which will need you to set a deposit or a selected amount to get fully verified account. But there are also some licensed brokerage firms which don’t need a deposit to do that thing.
Opening a brokerage accounts is one thing, and beginning to invest is whole a new thing. Because to invest in whatever you want you need money on that brokerage account. You can get money into that brokerage account by transferring money from your bank account, online bank like PayPal, savings account or from another brokerage account.
And when you have create and opened a brokerage account and then when you have transferred an amount onto that brokerage account you can begin buy stocks, bonds and funds. And of course at this point when you have created that brokerage account and transferred some of your money onto that brokerage account, you are fully owning that brokerage account.
Fully owning a brokerage account means that you are the boss there, you are the one making decisions about what you are doing onto that brokerage account. You are the one who is selling and buying stocks, bonds and funds at your own free will.
The firm who is behind that account, acts like an intermediary between you and the investments you want to buy or sell.
You can open as many brokerage accounts as you want, because there is no limit on how many of these accounts you can have. So feel free to open so much you will feel comfortable with. I personally would recommend to have not more than 4-5 brokerage accounts because then you are avoiding the extra stress which comes with more brokerage accounts, you also avoid forgetting passwords to these accounts and things like this.
There are a lots of licensed brokerage firms you can choose between. All of these licensed brokerage firms have pros and cons to them, so choose these licensed brokerage firms which suits your needs and which you will feel comfortable with.
Of course do your own research about your possibilities when it comes to these licensed brokerage firms. However I personally would recommend you Robinhood and eToro. Since both of them are beginner friendly, they are easy to learn and they are very easy to have a control over. This post isn’t sponsored by Robinhood or eToro, I’m just mentioning licensed brokerage firms which I am personally comfortable using.
If you have now understand the basics with brokerage account, make sure that you learn a little bit about How To Invest In Stocks (Quick Guide). You may also find interesting How to Make Money in Stocks? and Things To Know Before Starting Investing
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