As mentioned in a previous post, I recently read a book called “Stop Working, Here’s How You Can“. This book inspired me to start investing in the stock market for the first time. The problem was that I had no idea how to do it. Where do I go to buy stocks? How do I choose a good company? How does it all work?
I solved that problem by reading a couple of books on the stock market, these books talked about how to get started, how to evaluate the companies that you are investing in and what kinds of things to avoid.
The first thing I found out is that I needed a brokerage account. I also found out that there were different types of brokerage accounts. The more traditional option is the full service brokerage account where you get one-on-one guidance and advice from a qualified broker. These brokers will give you stock tips and even make stock purchases on your behalf. The downside is that you will pay hundrends of dollars in comissions for each trade that you make and there is always the risk that you are getting biased advice from someone who will benefit from your decisions.
Another option is to get a discount brokerage account which is more of a self serve type of service where you can buy your shares online. This only costs $29/transaction (sometimes less) but you have to do all of the stock market research yourself. There will usually still be a lot of company financial infomation available to you with these types of services.
Since I am starting with a small amount of money, I decided that it would be best for me to set up a discount brokerage account. I did that through my bank and then found a stock that is currently paying an annual dividend of almost 14%, has a high growth rate, and has a long history of high dividend payouts. I am going to start with that one.
So now I am all set up to invest in the stock market. I have my discount brokerage account, I have $1000 ready to go and I have my company all picked out. Tomorrow I am going to invest in the stock market for the first time. I am so excited! I will let you know how it goes.