I believe, what separated successful families from families that struggled from generation to generation from the Great Depression onward, was and still is an applicable knowledge and understanding of compounding interest and the value of investing in/for the next generation. The stock market continues to be a vehicle for many wealthy families/individuals to build and compound wealth for generations to come, but with today’s quick/easy access to stock quotes and dirt cheap broker fees, this makes the stock exchange available for virtually anyone at any income level. There are several online brokers to choose from, and the rules and guidelines set forth by the Securities and Exchange Commission are not as complex as you may think.
Don’t just Bank Your Dough
Opening an online brokerage account is no more difficult than if you were to open a checking account with a bank. You fill out all the similar kind of forms to identify ownership of the account, and then you will receive a specific account number. Each online broker has a routing number , just like any other banking institution, so combined with your brokerage account number, you can easily direct deposit a piece of your paychecks or wire funds from other accounts. Depending on the broker you choose and the options they have available, that money you deposit in your brokerage account will just sit there(like a checking account), until you use funds to finance market orders or withdraw for cash/wire transfer. Some brokers may have ongoing expenses for certain types of accounts, but for sake of argument I will only be reviewing basic, cash only, trading accounts.
Who Should I Open an Account With?
The following are the results of some online brokers I personally reviewed:
Opening an online brokerage account is no more difficult than if you were to open a checking account with a bank. You fill out all the similar kind of forms to identify ownership of the account, and then you will receive a specific account number. Each online broker has a routing number , just like any other banking institution, so combined with your brokerage account number, you can easily direct deposit a piece of your paychecks or wire funds from other accounts. Depending on the broker you choose and the options they have available, that money you deposit in your brokerage account will just sit there(like a checking account), until you use funds to finance market orders or withdraw for cash/wire transfer. Some brokers may have ongoing expenses for certain types of accounts, but for sake of argument I will only be reviewing basic, cash only, trading accounts.
Who Should I Open an Account With?
The following are the results of some online brokers I personally reviewed:
· $9.99 Trades
· $500 minimum deposit for cash accounts (you can open the account, but it will be automatically closed unless a $500 balance is in the account within 60 days)
· $2000 minimum deposit for margin accounts
· $0 incoming money wire fee
· $25 outgoing money wire fee
E-Trade offers a “Max-Rate” Checking account as a banking alternative that allows you to get a same day transfer of your funds from your e-trade securities account. You get a free E-Trade debit card that can be used at any ATM, and can receive unlimited ATM fee refunds. It’s important to know that this checking account is separate from your securities account and requires a minimum balance of $5000 to avoid a monthly fee of $15.
· $500 minimum deposit for cash accounts (you can open the account, but it will be automatically closed unless a $500 balance is in the account within 60 days)
· $2000 minimum deposit for margin accounts
· $0 incoming money wire fee
· $25 outgoing money wire fee
E-Trade offers a “Max-Rate” Checking account as a banking alternative that allows you to get a same day transfer of your funds from your e-trade securities account. You get a free E-Trade debit card that can be used at any ATM, and can receive unlimited ATM fee refunds. It’s important to know that this checking account is separate from your securities account and requires a minimum balance of $5000 to avoid a monthly fee of $15.
· $7 Trades, but OTC stocks trading under $1 per share will cost you an additional principal fee of 0.5%)
· $500 minimum to open your trading account
· $0 Incoming money wire fee
· $25 Outgoing money wire fee
Scottrade also offers interest appreciating checking account trusts. The only requirement to open a joint-trust (brokerage account and a linked checking account) you must have five hundred dollars in equity within your brokerage account. Other than that there is no minimum balance or monthly service fee for Scottrade’s checking account. They also offer a free debit card, and ATM fee reimbursements. Bill pay services are also available.
· $500 minimum to open your trading account
· $0 Incoming money wire fee
· $25 Outgoing money wire fee
Scottrade also offers interest appreciating checking account trusts. The only requirement to open a joint-trust (brokerage account and a linked checking account) you must have five hundred dollars in equity within your brokerage account. Other than that there is no minimum balance or monthly service fee for Scottrade’s checking account. They also offer a free debit card, and ATM fee reimbursements. Bill pay services are also available.
· $4.95 Trades, it is important to note that this commission fee is for trades up to 1000 shares. If there is going to be more than 1000 shares in your position then there is going to be an additional charge of 0.00495 per share w/3% cap.
· $0 cash account minimum, and a $500 margin account minimum
· $0 Incoming money wire fee
· $100 Outgoing money wire fee ($20 Wire Pre-Pay, before settlement)
· $50 Inactivity Fee-Quarterly (If under 15 trades)
SureTrader is licensed by the Securities Commission of the Bahamas, and isn’t intended for accounts owned by U.S. citizens. This broker is new on the scene (2008) and boasts a 6 to 1 day trade leverage, on a $500 account.
SEC Guidelines and Rules
There are some rules and restrictions set forth by the SEC on your trading activities that you should be familiar with. Those rules include a three day settlement period (T+3), after you close a position, before you cash is made available in your account. This is why starting capital (buying power) can make all the difference in the amount of trades or profits you can make within one week’s time. To stay on the up and up with the SEC; you can visit their website: http://www.sec.gov/
· $0 cash account minimum, and a $500 margin account minimum
· $0 Incoming money wire fee
· $100 Outgoing money wire fee ($20 Wire Pre-Pay, before settlement)
· $50 Inactivity Fee-Quarterly (If under 15 trades)
SureTrader is licensed by the Securities Commission of the Bahamas, and isn’t intended for accounts owned by U.S. citizens. This broker is new on the scene (2008) and boasts a 6 to 1 day trade leverage, on a $500 account.
SEC Guidelines and Rules
There are some rules and restrictions set forth by the SEC on your trading activities that you should be familiar with. Those rules include a three day settlement period (T+3), after you close a position, before you cash is made available in your account. This is why starting capital (buying power) can make all the difference in the amount of trades or profits you can make within one week’s time. To stay on the up and up with the SEC; you can visit their website: http://www.sec.gov/
