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Frugality and saving money are important steps towards financial independence – but what’s next? Eventually, you’re going to have to figure out where all your hard earned money should be going in order to reach your financial goals. A savings account is great, but interest rates won’t even help you keep up with inflation. If you’re looking to really drive some passive income and get ahead of the curve, setting yourself up to do some online trading is a great start. There are lots of excellent, well established companies that pay dividends – a potential start for your passive income empire. Here’s a quick refresher on what you’ll need to get started – proof that anyone can buy shares online.
Choose an online broker
Gone are the days when you had to hire a financial advisor or broker to trade stocks on your behalf. A quick internet search will yield dozens of different options for you to open an account. If you stick with discount brokers, you can be trading stocks for as little as $5 per transaction and ETF’s for free. Consider speaking with your current financial institution to see if they can offer you any deals for opening an account in house. Once you’ve filled out the forms and submitted all of the required back up information, it’s time to get trading!
Decide what to buy
There are literally thousands of different stocks on hundreds of exchanges that you can buy. How do you decide what you want to buy? First off, determine your risk profile. Are you a conservative investor that doesn’t want a lot of volatility or are you willing to take bigger risks in search of bigger returns? Generally, the older you get, the less risk you’ll want to take. For the sake of argument, let’s assume you’re going to buy some blue chip American stocks traded on the New York Stock Exchange – these companies usually pay dividends and will set you up for your passive income empire.
Start trading
Once you’ve decided on the stock to buy, a few clicks of the mouse should be all that’s required. Buying stocks online is so easy these days, there’s really no excuse not to jump in!
