Thursday, November 22, 2012

Quick Update

Hello my dear followers and readers!

First of all: Happy Thanksgiving!! If you are healthy, breathing, have family and/or friends, have a job or you are just simply still on this earth (even if struggling) remember you have a purpose and being alive and well is something to be thankful for regardless of the cash in your bank account!!

Moving on, I want to apologize for the hiatus on the blog. I am currently reading an investment book that is preparing me for the upcoming posts on the blog where I will explain technical and fundamental analysis which are KEY instruments that need to be used when choosing a stock for investment purposes. It is very important to me that I provide accurate and significant information to help ALL my readers and followers understand how the stock-picking process works. Hence, I want to make sure I do this the RIGHT way. Please pardon the lack of post I would say for the next few weeks. Please check back mid December (around 12/15) for more updates. Either way, I will post regarding the status of my research.

Also-- I am not sure if I mentioned this but my business idea "Teach Me To Invest" was chosen as one of the ideas to develop in the entrepreneurship course I am taking this semester. I may or may not involve the blog in the project. You will know if I start posting anything related to school or the development of the project. Or, I may just add a post when all is done and let you know what it entitled and how it all worked out. I am excited for this. :)

I leave you with this food for thought:

Source: Pinterest

Happy Thanksgiving to you and yours.

Thursday, November 8, 2012


Hello future investors! Welcome back!

So once you decide which online brokerage firm you want to use and once you are READY to get this show on the road it will be time to fund your online brokerage account. By this, I mean transferring money from your bank account to the brokerage firm in order to start trading.

REMINDER: Having money in an online brokerage account is similar to having money just sitting in your bank. If you choose a credible and legit company; your money will be secured and no one is going to disappear with it (remember to read all the security features of at least a few online brokerage companies and choose the one that makes you feel more comfortable!!). The only difference may be that you probably will be gaining very little any interest on that money (if any at all) as the main "idea" behind the online brokerage account is to use the money to invest it and make a profit not to have it sitting there. But basically, don’t be afraid to just transfer the money and leave it alone until you have done your research and decide which stock(s) you want to buy. ALSO, you dont need to use it all the money at once. FOR EXAMPLE: Lets say you transfer $100 but decide to buy a stock for $25 just to "practice"; the remainder $75 will remain there until you are ready to invest it. Same goes for any amount of money you transfer. No need to rush in to anything. REMEMBER: Trading should never be a gamble or forced via emotions. It should be a strategic approach, which is what I will be teaching you.

Lets get this show on the road…

So, generally, with every online brokerage firm there are three main ways in which you can transfer money in to the account for trading. Here they are in order of “quickness”  (or, which method allows your money to be available for trading faster);
-Wire Transfer
-ACH profile
-Mailing a Check

Wire Transfer “The quick process”
Usually, the wire transfer is initiated on the side of your bank. The online brokerage firm you choose to use will provide you with instructions regarding what kind of information you have to give to your bank in order to authorize them to “send” the amount of money that you choose to the online brokerage firm. This method is considered faster because you can easily just contact your bank, show up at your branch or go online to request the wire. As long as it all goes in proper order, your money can be available within hours or in just one business day. Something to note: Many online brokerage firms wont allow any wire transfers from foreign countries.

ACH stands for “Automated Clearing House”. This is the method that I personally used when I first transferred money in to an online brokerage. I personally just felt more comfortable with this method. The way it works is that you enter information such as your routing number and account number in to the online brokerage account. For example: Have you ever set up a payment account online with your cable company or your credit card company just to make it easier to make payments from month to month on the internet? Well, the ACH procedure is very similar to this. Once the Online Brokerage Firm confirms your bank account information and that the account is yours (they will ask you to send in an ID and a voided check) your money can be available for trading within 3 business days on average (that’s how long it takes for the the money to “clear”). If you decide to go with ACH just remember you wont be able to trade immediately and you may have to wait a few days. There really should be no rush so I don’t see a problem with that!
Mailing A Check:
This may take a little longer but is another great option if you just feel more comfortable mailing a check. With most online brokerages, the money should be available for trading as soon as the funds and information are verified with your bank. You can choose between a cashier check or a personal bank check. Make sure to check out the “funding” instructions for the online brokerage firm you use in order to see whom the check should be made payable to, etc. With this method it may also take an average of 3 business days after the check is received for the money to “clear” and before the money is available for you to begin trading.

Finally, if you ever want your funds or part of your funds to be sent back to your bank account; the process is very similar. Remember that you can request funds to be transferred back to your bank accounts at any time as long as the money is not invested in stocks at that particular moment.  Lets say you made $500 on a stock and you would like to send that money back to your bank account. You can request the following:
-For the brokerage firm to send you a check
-Or, transfer the money back via wire or ACH (explained above)
This is just an overview of the general procedures. When you open a online brokerage account just go in to the “transferring money” tab (or may be called something similar) for more detailed instructions. If you are ever confused about anything you can always call the online brokerage directly (or use the chat feature if they have one). From my personal experience, the customer service team is always more than happy to answer questions and make things clear. Trust me! I was once lost and confused asking questions that seemed too obvious but no one ever made me feel like I was weird or stupid so, don’t ever feel that way.

Questions about funding? STAY TUNNED FOR THE NEXT POST! We’re about to get “fundamental”. .

Saturday, November 3, 2012

Filling out the Online Brokerage Application

Hello again! We are very close to going fully in to investment techniques but before we get in to that we have to get through the 'application' process of the online brokerage firms.

As you may understand; the questions may vary slightly from brokerage to brokerage. However, a lot of the questions are pretty standard. So, this post will provide clarification on some of the questions that may seem odd or confusing.

Individual or Joint Account?
If you plan to invest your money yourself and monitor the account yourself go with "individual". They also give you the option of having a "joint" account. Lets say for example you want to "join forces"  and invest together with your friend, your boyfriend/girlfriend, husband/wife, significant other, family member, a perfect stranger; you get the point. Well, you can do that. However, for anything you do in that account you will need permission from the other person and have to have him/her sign off on certain things (ie: to transfer money in and out, etc.)

Margin Account?
Say NO! to this option. A margin account means you agree to "borrow" money from the online brokerage firm to do trades. It would be like a loan with its corresponding ridiculous interest rate. So, for example, lets say you are super excited about a stock and you're sure is going to skyrocket so you "borrow" money through the online brokerage via the margin account and buy 100 shares. Well, lets say the next day all hell breaks loose and the stock goes down to rock bottom. Well guess what, whatever margin money you borrowed you will have to pay back no matter what (or the brokerage firm will just deduct it from whatever money you have available in the account). So, avoid margin at all cost! Choose CASH account which means that at all times you will be investing with you own money.

Other Details:
  • You must enter your social security number mainly for tax purposes and to make sure that you are a "real person". You may also use an E-Tin number (tax identification number) if you have that instead of a social.
  • Are you a resident? Yes. This question is just looking to confirm that you live in the United States, anywhere.
  • You will get the option to choose from multiple different "types" of accounts. Go with a GROWTH account. As your goal is to steadily grow the value of your portfolio/your wealth.
  • You'll also get asked about your "net worth" or how much you are "worth" how much money you have in general. This is a question that they are required to ask you by law and is only for informational/record purposes. No need to be super specific here!

Friday, November 2, 2012

Additional Online Brokerage Firms

Hey everyone! I apologize for the hiatus in the postings. Hope that everyone reading this is safe and sound after this Sandy fiasco that we had to go through here in the east coast. One thing about NYC though--- no matter what we go through we sure know how to get up, dust off and keep going. Slowly but surely we'll be back to normal.


On this post, I just want to share a  few additional online brokerage firms that are out there, how much the charge per trade and whether or not there is a minimum deposit to open the account. I personally havent used any of the firms I am about to list but I have heard about them through different financial podcasts I listen to as well as from friends that have used them. So here they go:

First Trade
  • No minimal deposit to start (you can open the account and dont have to fund it right away).
  • $6.95 per stock trade. (As previously explained: means they charge a fee of $6.95 when you buy any number of shares and the same fee when you sell for a total of $13.90).
  • Require a minimum deposit of $500 to open an account
  • $7 per stock trades
  • Also require a $500 minimal deposit
  • Stock trade fees range from $7.99-$9.99 depending on your trading volume

Merrill Edge
  • No minimal deposit required
  • $6.95 per stock trade
  • They offer rewards of $50+ but the "catch" is depositing $10K+ to trade
Options House
  • $1,000 minimum deposit for cash accounts
  • $3.95 per stock trades
  • This site gives you the option of openning a "virtual account" first where you can practice before you get started with real investing (which I think is pretty cool)
Please keep in mind that the fees posted are only for when you are trading stocks. You may or may not know that there are a lot of other more "sophisticated" kind of investments out there besides stocks (Ie: options trading). For these kind of "different" type of investments the fees vary in each of the different online brokerage firms. I personally dont trade anything other than stocks and the blog is currently just focused on stock trading so lets focus on that!

Also--- just a heads up that the online brokerage firms noted above and the other two I mentioned in my previous posts are just SOME of the firms available out there! There are many, many to choose from. If you do a google search for it; you will see. If you decide to do research on your own to choose the best for you--- just make sure you read about how these firms are insured and make sure they are part of the SIPC (security investor protection corporation). Also, very important that they are reinsurred. In addition, I would personally avoid online brokerage company's that note the following on their website: "...we provide no guarantees in the event of unauthorized access...".
I found this in the optionshouse website. Make sure you look in to how your money will be protected. Some firms, such as TDAmeritrade, offer protection if someone tries to illegally trade without your permission, etc. Little perks like that would help me sleep better at night.

Remember: Research, Research, Research!!

NEXT POST: The online brokerage application and clarification of "weird" or "confusing" questions.