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Ready to start investing but not sure how to buy shares in stocks and ETFs (exchange-traded funds)?

The process can feel intimidating when you haven’t done it before, but it’s much easier than you think. And now that you’ve decided to take that important step and begin investing, keep that momentum going.

All it takes is four simple steps, and you’ll be the proud owner of your own investment portfolio.

Step 1: Choose a broker.

You can’t buy stocks or ETFs without going through a broker. But that doesn’t mean you have to deal with a Wall Street bro. Online investing is quick, easy, and less expensive than going the in-person route. And there are some great choices for beginners buying both stocks and ETFs online, including:

Online Broker Trade Commission Account Minimum
TD Ameritrade $0.00

no minimum

E*Trade $0.00

no minimum

Fidelity $0.00

no minimum

All three offer commission-free trades for ETFs and stocks. And because there are no account minimums, you can start investing with an amount that’s comfortable for you. 

Step 2: Open your account.

It takes about 15 minutes to fill in the forms needed to create your brokerage account. Some things you’ll want to have handy:

  • social security number
  • driver’s license (or another government issued ID)
  • bank account and routing numbers

In some cases, you may be asked for your employment status, annual income, and net worth. 

Not sure how to calculate your net worth? Learn how here.

Make sure you open a cash account and NOT a margin account. [Margin accounts are for very experienced investors who can afford to lose a lot of money.]

Step 3: Fund your account.

Before you can start investing, you need to move money into your brokerage account.

The fastest, easiest way to do that is to transfer the money directly from a checking or savings account. In most cases, that money will show up in your brokerage account the next business day.

You can also send a check through the mail. But that definitely takes longer – especially with all of the postal delays we’re dealing with. So with the snail mail method, that deposit could take anywhere from a few days to a few weeks  to show up in your account. If you can’t wait to get started, a transfer lets you start faster.

Step 4: Invest!

Now that your account is set up and funded, it’s time to choose your first investments.

For beginning investors, ETFs make a good foundation for any portfolio. You can start with broad market funds to give your portfolio instant diversification. As you gain knowledge and insights, you’ll be able to choose more focused funds to round out your portfolio and keep your net worth growing.

Choosing individual stocks takes more research, mainly because they come with more risk. After all, it’s more likely a single company will go bust than an entire fund. You can learn more about understanding, researching, and choosing stocks in my book Stock Market 101.