When i turned 30 I really wanted to start turning a corner financially. We were not in the best of shape so I wanted to do what I could to change that. I looked into 401k’s and savings accounts but I wanted something with a greater return so I started looking into the stock market. Now I don’t mind admitting I was a total newbie and the whole Charles Schwab page looked like Chinese to me but with the help of how to guides and YouTube, I slowly turned into a little Wall Street tycoon…well not literally but I am getting there. Some people are intimidated by the stock market and they are right to be in the post-2008 world. The crash hurt many people and change the lives of some forever. Life is full of hurdles and you have to get back on the horse. I am 33 now and I have my very own shiny mortgage, which 5 years ago would have been unthinkable to me. The brokerage account made me get my financial head straight and allowed me to take the plunge into homeownership.
If you are reading this article I presume that you are too thinking of opening a brokerage account so without further ado here are the pros and cons of such an account.
Pro’s of a Brokerage account
Brokerage accounts have no hidden fees and most trades are between $4.95 and $6.95 depending on which company you decide to use. So even if you buy 1,000,000.00 shares you will still only pay $4.95 for the trade. Moreover, with a brokerage account, you have 24/7 support from trained brokers to help you make trades and understand how best to spend your money. ecnpremium.com
Even better still is the fact that you can trade whenever you want, wherever you want. With mobile apps and Japan trading through the night you can make trades whenever you want. In terms of trades, stocks are not the only thing you can do with a brokerage account. You can also buy bonds and CD’s which are wise but slow returning investments. The amount you receive back is based on what you deposited a the time you purchased the bond.
Con’s of a Brokerage account
Your brokerage account needs constant monitoring otherwise you may miss out on trades or end up with a lot of dead stock. What is more, some of the lingo on brokerage accounts is like Chinese so if you are just starting out, you may be intimidated or lost as to where to start or what to purchase. Moreover, if you make a bad investment there is no one that is held accountable but you. When it comes to losing out, it is important to note that brokerage accounts are not FDIC insured, but they are protected under the SECURITIES INVESTOR PROTECTION CORPORATION. Which is an organization that will step in to help you recover funds when a brokerage company folds?
Brokerage accounts have good and bad points but it is important to look to the future. If you don’t make some investments now, what will you do when you retire because they projections on whether or not we will have any Social Security left is not looking favorable.