As I near the age of 40, I’m beginning to look back on financial decisions I’ve made in the past and wondering what could have been. For instance, at the age of 21, my dad had his financial advisor talk to me about starting a retirement fund. I did so and as I recall I was earning around 11%, which I didn’t realize was so good at the time. As I got out of the military and transitioned into civilian life, got married, and moved into my first house, I began “borrowing” from that mutual fund, and by “borrow” I mean I never actually put any money back into it. I tapped it out and it’s all gone. Had I left it alone, how much would it be worth?
At 24 years old, I became eligible for my company’s 401k, in which the company matches up to a certain percentage. I have contributed to the 401k off and on for the last decade and a half, however I have never even come close to the percentage that could be matched by my employer. How much would I have saved if I had put more all this time? Would I even have missed that money in my paycheck?
Kids came into the picture, and I went quite a while without contributing into the 401k at all. Oh, to have let that money grow! And then, my retirement fund was sliced in half through a divorce settlement. After that occurred, I did make sure to increase my contributions. It feels that much more pressing now as I’m so much closer to retirement than I was when I started yet don’t have much to show for it.
You’ll notice in none of these scenarios was I directly investing in the stock market. I was putting money into funds that are managed by people more knowledgable and I was just trusting them to do well on my behalf. That’s still a good plan, but I finally dipped my foot into stocks by opening an account with e-trade some time ago. I’m taking things slowly, but I’ve entered into the world of the stock market. I believe in educating myself on how this works and reading up on companies in which I choose to invest. I’m also interested in learning more about the brokers that are available to trade stocks.
E*trade was an easy one because everyone has heard of them. They requested less of an initial investment than my bank, USAA. I loved the ease of investing with USAA, and I was using it for a time, but I didn’t have $3,000 on hand to invest once they changed their minimum amount. I liked that the fees on E*trade were flat so that I knew what to expect, but it doesn’t sit well with me that I have to actually pay that fee every time I trade. That being said, I’ve been using E*trade for investing in stocks that I plan on keeping long term. I’m buying mostly “penny stocks” that I believe will perform in due time. That saves me from those fees whenever I decide to sell.
Thanks to my barber, I know about an app called Robinhood. Here’s what I love about Robinhood: there are NO fees for trading. They don’t charge you to transfer money into the account, they don’t require that you even keep money in the account, and you can invest at little or as much as you want. One of my favorite parts of this app is that I can invest in cryptocurrency, like Bitcoin and Ethereum. I’m using this one mostly for that purpose. The down side of this no-fee way of investing is that you don’t have access to the full range of stocks from the entire sock market.
Most of my activity is now being done using Stockpile, another app that my barber told me about. Like Robinhood, this one doesn’t require you to put a bunch of money into an account to invest. You just transfer what you want to buy stocks with. It’s got a fee, but it’s less than a dollar per transaction. MUCH better than the fees at E*trade.
I’ve saved the best for last, in my opinion, because with Stockpile you can do something that can’t be done with many brokerages. You can buy partial shares. So, if you want to buy stock in Amazon, but don’t have $1,700 to buy a share, you can just input how many dollars worth of stock you’d like to buy and you’re in. This is how I’ve gotten my foot in the door with companies like Apple, Amazon, Disney, NVidia, and Netflix. Needless to say, this is the app I’m using for stocks I’d like to buy and sell more frequently since I don’t have the high fees for doing so.
I’m new to this. Don’t take anything I’ve said as advice on how to invest or in what to invest, please. I’m sharing with you some tools that I have found useful and how I use them so that maybe you can get going in the stock market too. Best of luck to you!