The mechanics of actually making an investment.
Okay, so you got a great investment recommendation (probably from Firreo) and you’re all excited to go do it. But then you realize, “I have no idea how to actually make an investment.”
Don’t worry, we got you.
You’re typically going to make an investment through a brokerage account. Nearly all stocks and ETFs, bonds, and public REITs (i.e. “publicly traded investments”) are bought and sold through brokerage accounts. You make these buy and sell transactions through “brokers”, which used to be individual people but nowadays are online. Brokers make their money by buying and selling investments for you. Your account with a broker is called a brokerage account. Common brokers are Fidelity, Charles Schwab, Vanguard, and E-trade.
To make an investment, you log in to your broker and tell them what you want to buy or sell. The broker then follows your order and buys or sells the stock. Each stock has a symbol associated with it, called a ticker symbol. Example: Apple’s ticker symbol is AAPL. So when you tell your broker to buy Apple, you tell them to buy ___ number of shares of AAPL. Each broker’s ordering process is a little bit different, so try a few and see which one you’re most comfortable with.
Not all investments are made through brokerage accounts though. Anything that’s not a publicly traded investment won’t be bought or sold via a brokerage account but rather directly from the source. Private real estate funds, crowdfunded investments, buying physical precious metals like gold bars if you’re into that sort of thing… all of these transactions are done directly through the source with no broker in the middle.
For lots more on how to crush the personal finance game and find early retirement, make Firreo.com your financial advisor. We’ll help you out of your job and on your way to financial freedom!