I use an online broker. Why? Because I take my own advice and mostly do my own research.
You may wish to do the same in order to minimize costs and also to be in control of your own financial destiny.
Membership with online brokers is usually free, and you pay reduced brokerage charges compared to full-service brokers.
For some brokers, if your purchase or sale cost exceeds a certain figure, you may have to pay more brokerage. In my case, I stay slightly below $US10,000 in order to reduce brokerage fees.
Of course, if you are using an online broker you will need access to the internet.
Other Potential Costs
This online investment guide suggests that to track performance, it would be useful to have an Excel spreadsheet that comes with the Microsoft Office software package.
You will also need to locate sources of information and advice. My online broker provides quite a lot of free information, but advice usually costs money.
However, quite an amount of information is available free through the various sources outlined in the link above and some online stock brokers do provide limited stock advice from stock market advisers.
This online investment guide would not be complete without mentioning the need for new investors to consider their overall financial position before investing in the stock market.
Having debt such as with credit cards or home loans makes it more risky to invest. Investors don’t have to be entirely debt-free, but there is good debt (debt that helps to earn income and reduce taxes) and bad debt that is used to fund a luxurious lifestyle.
It is a good idea to have a back-up fund in place equivalent to six months of living expenses that will minimize the need to sell stock if the stock market is down.
If money is short, there are various ways to accumulate some. For example ...
- budget to save a regular amount