Updated: Jul 29, 2019
We grew up in a world where school teaches you a lot of things, except how to invest.
The more I grew up, the more I started caring about my future and how I should be intelligent with how I spend my money. Because, to be honest, it’s too easy to get lost and want to buy a bunch of crap we never end up using, or even worse, spending it on a night out of drinking and ordering the most expensive meal on the menu.
Don’t get me wrong, you should still treat yourself, just be aware of your long term financial plans and don’t jeopardize them. So, let’s get started.
Step number one:
For those who are employed with a 9-5 job and are lucky enough to have a 401K, you can start by signing up with your 401K provider: Fidelity Investments, Vanguard, Empower Retirement, or Voya Financial to mention a few. In my case, I have a Fidelity Investments account, and I will be using this one as an example. Ask your HR department if you are not sure which company manages your 401K.
If you don’t have a 401K then don’t worry, all you need is a little cash to get started and a free spirit. Whether you have a 401K or not, stocks are also a good option. So, feel free to sign up with any of the services mentioned above and get ready to make your first stock purchase!
Step number two:
Once you sign up, you will see your 401K account (if you have one) from your company. In order to buy stocks you will need to open an “Individual Brokerage Account.” The link for this in Fidelity Investments is at the top of the website and says, “OPEN AN ACCOUNT.” Once you click on it you will see three different themes, make sure to go with “Investing and trading”, then click on “Open a brokerage account”, and finally click on “Individual” to complete the process.
Step number three:
Back on your dashboard page you will see your “Individual Account” alongside any others you may have. Go to the “Transfer” section where you will see the option to add a bank account which you will use to transfer funds to your “Individual Account” any time you choose to buy a stock. Now it’s time to go to the “Trade” section. Here you will see an option asking for a “symbol” which is the code for the company whose stock you would like to purchase. If you are not sure what your company’s symbol is then just Google “company name stock symbol” and it will most likely appear, along with the current price of the stock.
Step number four:
Now you should be pretty excited because you’re all set up to buy your first stock. Once you figure out the name of your brand/company and enter its symbol, select these values for the following options on the form - Action=Buy, Quantity=Number of stocks you wish to purchase, Order type=Market Order, Time in force=Day. Then press preview order, and you will see the total funds you will need to complete your purchase. FYI, Fidelity Investments charges you about $5 every time you make a trade no matter how many stocks you buy- you can buy one or hundred. So the more you buy the better since it is a flat rate.
Now go back to “Transfer” and move the required funds from your connected bank account to your “Individual Account” in order to cover the previewed order total.
Step number five:
Once the funds are reflected in your “Individual Account” (this may take up to a day or two) you can resubmit your trade, preview the order, and then confirm. CONGRATULATIONS, you are officially an adult, and guess what- that’s cool! Now go on and make this a healthy habit. There is no limit to the number of stocks you can buy or sell- just be aware of the $5 fee on every trade. Try to invest in companies across multiple industries to diversify your portfolio and you will do just fine.
Happy investing everyone!