What is the first step to investing is a question a lot of people have these days. They know that investing in the stock market can be a great way to secure their financial future but they are just a little unsure how to go about it. To answer their question of "what is the first step to investing?" really requires a question in return because it is important to find out the kind of investment they mean.
We need to know which types of investment they are considering when they ask "what is the first step to investing?" Many newcomers to the world of investments think only of stocks and shares but there are of course many more options out there. Some of which are possibly far better for beginners.
For anyone looking to get started with investing they need to consider whether they will be investing a lump sum or regular monthly payments. With monthly savings they could consider looking at mutual funds as these will allow them to get a taste for the stock market while sharing the risks and rewards with others. They can begin their portfolio with as little as $25 per month to find out if it's something that suits them.
For those who have decided that they would like to go for the full blooded approach of buying stocks and shares directly they need to have between $3,000 and $5,000 if they want to use a full service stock broker. There are a few brokers who will consider investments of less but they will need seeking out. Of course there is always the option of using online brokerages which usually require only around $500 to get started. These can be an excellent alternative for anyone who has the confidence to make their own investment decisions.
Something which does need considering is the question of charges. This applies whichever type of broker and whatever method is used for that very first investment. Many new investors wrongly assume that all their money will go directly into buying the investment they have chosen and forget that there are different prices for buying and selling stocks. This can be quite a surprise to some but they should remember that even mutual funds have annual charges.
However if they consider all these things they will soon have their answer to the question of what is the first step to investing.