Getting Started
Recently one of our Wanderer subscribers asked:
Any insight for folks asking for trading advice who don't have a lot to invest (sub $5k)? Other than, "work harder, save faster" of course. 😉
Great question! And a really important one, because it's this group of people that need to invest, more so than anyone else.
My advice might sound basic, but it's often the biggest hurdle in a new investor's life—Get Started!
Number one is simply opening an account. There are countless brokers to choose from these days. From traditional brokers like Fidelity and Schwab, to online presence only brokerages like TastyWorks or eTrade, to stripped down app-based outfits like Webull and Robinhood. Brokers almost all offer free stock trading these days, and many offer fractional-share stock trading—even the stodgy old traditional brokers. Opening an account is all done online by filling out a few basic forms, and linking a bank account. Within hours, or at most a couple of days, you will be set up and ready to make your first trade.
You're on your way! But what to buy?
Anything! When you are just starting out the last thing you need to worry about is diversification. Instead just buy a couple of shares in companies that you like. Are you constantly popping into Target or Wal-Mart? Do you love your Ford? Is your go-to lunch spot Chipotle? Do you spend twelve hours a day staring at a screen on an Apple device? Well, there you go. Don't worry about picking the perfect entry price, or if the P/E ratio is too high, or any of the other stuff that you will gradually learn about as you become more involved in trading and investing. For now, the important part is that you actually own stock!
Congratulations, you've taken the most important step towards a life of financial stability. You've put your money to work.
Once you have gotten over this hump, saving becomes easier. You will be excited to make that next $500 deposit so you can buy XYZ stock. Your personal finances will take on greater importance in your life. A position you probably know they should have been already. But hey, it's hard to get excited about saving money when it's sitting in a bank earning you about .01% interest. Now that your money is working towards something, you'll spend less, save more, and earn more.
Keep Up With the Wanderer Crew No Matter Where We Are
Living and traveling on a boat means for a few months each year we have to wait out hurricane season. This year we did that in Guatemala, and have had a great time. But it still feels great to untie the docklines. We were due to set off a couple of days ago, but in typical fashion, after months without any boat problems, our water lines began to burst the morning of departure. Turned out to be a problem with the accumulator tank—not a huge issue—that took two days to work out. Finally, Saturday afternoon we were on our way. We said our goodbyes and pulled out of the marina with an exciting season of cruising ahead of us. This year will take us—assuming our plans actually work out—from Guatemala to Honduras, the Grand Caymans, Jamaica, the Dominican Republic, and finally Puerto Rico. As I write this I'm anchored in front of a 1600s Spanish colonial fort built to defend against pirates. It's still astounding to me that I can sit on my boat at anchor in foreign lands, trading the stocks of companies located around the world, and communicate with all of you at the same time. The uniqueness of this life is not lost on me.
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