American Consequences - February 2019

to fund my account was awful. I don’t live too close to a branch of my bank, so the process of setting up a wire transfer seemed tedious and time-consuming. Worse, I only had a small amount to invest and many brokerages required minimum balances beyond my means. But after a few months of research, she opened her first brokerage account and started investing. And a lot of her initial fears are gone. To help you get started, here are four simple things to know when looking for a brokerage account: 1. FRACTIONAL SHARES. If you’re starting off with a small portfolio, find out if the brokerage firm offers a plan to let you invest in fractional shares. That way, you’re putting some money to work immediately, even if it’s not enough to buy, say, an entire share of Apple. Just pay attention to what fees you might have to pay. 2. FEES. Figure out what the fees are for completing a trade. Some places charge fees for fractional share transactions as well, which can affect your budget. Make sure you know exactly how much each trade will cost before you start so you won’t get any surprises.

Some brokerages, like Fidelity, Schwab, TD Ameritrade, and Vanguard, offer commission- free funds. 3. MINIMUM BALANCE. Some brokerages require a minimum account balance. For example, Interactive Brokers used to require a minimum balance of $10,000, and although it recently eliminated that minimum, it will still require you to spend at least $10 per month in commissions. On the other hand, most other brokerages like Fidelity, Merrill Edge, TD Ameritrade, and Vanguard each offer a $0 minimum balance. So if you have a small portfolio or you don’t plan on trading often, those are likely better options for you. 4. TAXES. Every brokerage will provide a form for tax time, but make sure you read the fine print. See if you are required to go online and request the form or if it will be automatically mailed to you. Make sure you understand how it works and you’ll save yourself a headache. If you still aren’t sure about taking that first step, remember that the most important step is the first one – getting started. And if you know someone who should be investing but hasn’t started yet, share this article with them. Help them kick the fear and get going on the road to building wealth today.

A tiny part of your brain called the amygdala kicks in whenever there's a perceived threat.

FEAR INVESTIN

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