[Saam]

I’m really new to the FI community, 21 yrs old in college. I have minimal funds but would like to start investing. It seems that investing in a S&P 500 is my best bet for low risk.

My Question is what brokerage account should I open? What are the pros and cons for the different companies?

A few that I’ve heard of is robinhood, webull, fidelity, Vanguard, JP Morgan, SoFi, acorn, Schwab, etc

any advice on where I should put my first $500?

[Eva]

If I could go back in time I would sprinkle the tiniest touch of complexity by doing 50% large-cap value and 50% small-cap value.

The big 3 firms in our space are Fidelity, Vanguard, and Schwab.

They all have some degree of pros/cons but truthfully I wouldn’t overthink just pick one and get the habit started – that’s more important.

[Cody]

The first question to ask when you have money to invest: “When do I expect to spend this money, and for which purpose?”

Global stock market exposure is commonly recommended for investors who plan to invest for 20+ years.

Historically, it’s actually been considered “low risk” for investors who stick with the plan without being swayed by short-term volatility (like many are doing right now).

I buy low-cost Vanguard index funds (ETFs) at Fidelity.

[Jeff]

Fidelity
Vanguard
Or
Schwab

[Michael]

At 21, I’d open an account at Fidelity (brokerage or Roth) and just roll with it.

Lots of good options for low cost index funds and ETFs, including some that are free.

[Ernest]

Fidelity taxable/individual account. You didn’t mention if you have a part time or seasonal job.

If you do Roth IRA, and still with Fidelity.

[Sonja]

Make sure you have a HY savings account for emergencies first (1-6 months of income).

Fidelity or Schwab are my preference.

A Roth IRA would be best if you meet the income requirement.

[Peter]

Check out the UI and pick what you want. I absolutely hate dealing with the Fidelity UI. I’ve heard horror stories of Vanguard.

You are already doing the most import thing, learning and making investing a habit!

Check out “The Algebra of Wealth” by Scot Gallaway.

[Crystal]

If it were me I’d open an account at vanguard and invest in VTI (it’s a total stock market index fund for the United States vs just the S&P 500).

You might want to consider a Roth account tho if you’re new to this (and qualify) vs just a regular taxable brokerage account.

The difference being in a regular brokerage account the money you put in was taxed when you earned it and when you (one day) sell the shares and withdraw, the money you laid (called capital gains) is also taxed.

If you put your $500 in a Roth, the money you use was taxed when you earned it, you put it in the Roth account and everything gets to grow tax free forever!

So, when you take it out one day no taxes

[John]

1. Read The Simple Path to Wealth (replace VTSAX with VTI as you’re reading it)

2. Set yourself up at Fidelity, Schwab, or Vanguard

[Author]

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