• Shane Dillon

The Beginner: How to open your first brokerage account

Updated: May 18

Are you confused by the stock market or afraid of the risk? Do you want to open a brokerage account, but do not know where to begin?


Well, you are not alone. Having worked in finance for some years, I have developed an understanding of how the system works. Frequently, I am asked by friends to do their investing for them. I quickly decline.


You can give someone a fish, and they can eat for one meal, but teach them to fish and they can eat for the rest of their life!


My preference is to show them the way and encourage them to set up their own brokerage account. Investing is a learning experience. Eventually, you can develop the skill set needed to become a successful investor.


Below, is a quick summary for you to set up your first brokerage account.


4 Easy Steps to Opening a Stock Brokerage Account

So, what the heck is a brokerage account? It is the investment account you need to invest in stocks, bonds, and mutual funds. It allows you to deposit funds for placing specific trades. Opening a brokerage account today is a first step to starting a retirement account, which may lead to, you know….an early retirement.

Step One: Open a Brokerage Account

Pick from a long list of stock brokerage companies online and set up an investment account by registering on their site. To list a few:


Charles Schwab, E*trade, and Fidelity.

Step 2: Deposit an amount you consider ‘a little.’

I started by depositing $500, realizing this was my first investment in financial self-development. If $500 is more than you are willing to risk, then start with a smaller amount. The point is not to be intimidated by the amount of money you decide.

Learn a little and don’t be afraid to make mistakes.

Starting with a small amount like $500, you can minimize your losses while learning. If you lose 10%, then you have only lost $50 of your initial amount. A loss of 20% you have only lost $100. However, make the right investment from day one and your investment will grow before your eyes. But be aware that the market will have its ups and downs. Your investment is going to fluctuate, and this is not a bad thing. Plan for a long term investment. The longer you invest, the more comfortable you will become managing your own personal portfolio.


Hopefully, your first investment experience will be successful, and your savings will begin to compound. Another way to look at it is this: You are investing $500 to learn how the stock market works. This is a lot cheaper than taking a course at a major university, which on average costs about $1,800 per class.

Step 3: Placing a trade or investment

Now you are ready to put your money to work and to start learning about the stock market.

Next, choose four companies you think will increase in value. Maybe you have purchased products from the company. For example, I use a lot of products made by XXXX, so I started investing in XXXX years ago.

Please note, I am not a financial advisor and I am not suggesting that you invest in XXXX. This is merely an example.

For a benchmark, make one of the companies an index fund and use the index fund as a way to gauge how your other 4 stocks are doing. A popular index fund owned by many digital nomads is the S&P 500 Index Fund.

Step 4: Educate yourself

Read! Books, blogs, articles, newspapers. Information is available everywhere. Learning the language of investing is the key to understanding the system. The library is a great source, and it’s free!

Must-read books

The best way to gain financial intelligence is to learn from the experts? Both online and real-time, there are thousands of financial books you can read to get up to speed. If you are willing to put in the hard work, you can definitely learn about the stock market on your own! Here are a few of my favorite financial books.

Some recommended books include:

The Intelligent Investor by Benjamin Graham

The Warren Buffett Way by Robert G. Hagstrom

Buy Low and Sell High

Yes, it sounds simple, but it is so true. The market goes up and down and you want to make sure you are putting your money to work when good companies are trading at a value.

Where is the stock market trading today? Go ahead and get started. Make a few small investments to start learning how certain stocks trade and to be ready for the next market dip.

Keep a Watchlist

I keep a watch list of 20 companies with the intent to buy the moment their price becomes favorable. You can start with 5 companies, or 10.


On my watchlist, I track metrics such as a company’s Price to Earnings Ratio, Net Profit Margin, and Price to Book Ratio. These are basic metrics to know and understand.


If you are intimidated by financial terms, then go to a site like Investopedia.com to familiarize yourself with the various metrics. Don’t be afraid, remember we are learning with a little. The important thing is to get started!

Buy Stocks With The Intention Of Holding Them For 30-40 Years

Look in the long term. Buy stocks and hold them for a long period of time.

That’s my goal for trading. There are two benefits to holding stocks in the long term. First, you minimize the amount you have to pay in taxes. Second, you are allowing compound interest to work its magic.

Keep an Investment Journal

The last piece of advice I can give you is to start a journal to document what you have done right and how you can improve on your mistakes. You must learn and update your knowledge base often to be successful. Understand that investing in the stock market requires a lot of observation and patience to reap the benefits.

I hope this post has been helpful! Please reach out to me if you have a question about one of the steps. I’m not here to give you investment advice, but rather as an inspiration to get you started investing.


Learning to invest in the stock market is a life-long journey.

The sooner you get started, the more you will benefit from compounding interest and knowledge!


Action Item:

Follow the steps above to open a brokerage account. Remember, learn on a little. You will make mistakes, but the idea is to front-load your mistakes at the beginning of your investment career. Track your wins and losses to analyze how you can improve. Investing is a lifetime learning experience!


Reading Material:

The Intelligent Investor by Benjamin Graham

The Warren Buffett Way by Robert G. Hagstrom





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