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Investing Basics for Young Adults

Episode 2: Your First Online Brokerage Account — A Beginner’s Guide to Investing

So you’ve decided it might be time to invest. Maybe you’ve heard your friends (or TikTok) talking about stocks. Maybe you’ve saved up a bit of money from a summer job. Or maybe you’re just curious about how to make your money grow instead of watching it sit in a savings account earning… basically nothing.

Whatever brought you here, welcome to Episode 2 of your investing journey. Today we’re talking about something every investor—big or small—needs:
your first online brokerage account.

What Is a Brokerage Account?

Think of a brokerage account like a digital wallet that lets you buy and sell investments—stocks, ETFs, bonds, mutual funds, and more. You can’t just walk into Target and pick up shares of Apple at checkout (though that would be kind of cool). You need an online brokerage to do that for you.

A brokerage serves three major roles:

  1. A place to hold your money until you decide to invest it.
  2. A place to place your trades—buying and selling investments.
  3. A dashboard to track your progress so you can see how your money grows over time.

And yes: if you’re under 18, a parent or guardian usually will need to help open the account. Most brokerages offer custodial accounts, which are set up by an adult but designed for you. Once you turn 18 (or 21 in some states), the account becomes fully yours.

Why Start Now?

Starting early—even with small amounts—is your superpower. Time is what turns small amounts into big amounts. Even $100 a month can grow to tens or hundreds of thousands of dollars over decades thanks to compounding.

You don’t need a ton of money to begin.
Many young investors start with:

  • $100–$200 just to get familiar, or
  • $500–$1,000 if they want something more substantial to watch grow.

The key is not the amount.
The key is forming the habit.

Top Online Brokerage Accounts Perfect for Beginners

There are many platforms out there, but here are a few of the most trusted and beginner-friendly options. These companies have been around for decades, offer strong customer service, and make it easy to learn as you go.

⭐ 1. Charles Schwab

  • Extremely beginner-friendly
  • No account minimum
  • Great educational tools
  • Allows fractional shares (you can buy $5 of a stock instead of the whole share)

Schwab is consistently rated as the best all-around brokerage for young investors. They also offer custodial accounts so your parents can help you set things up.

⭐ 2. Fidelity Investments

  • One of the most reputable firms in the U.S.
  • Fractional share investing through “Stocks by the Slice”
  • Great mobile app and research tools
  • No commission for stock or ETF trades

Fidelity is excellent if you want something reliable and easy to understand. It’s a good long-term home for your first investments.

⭐ 3. Vanguard (Great for long-term investors)

  • Known for ultra-low-cost index funds
  • Perfect if you’re planning to invest in ETFs like the famous Vanguard S&P 500 ETF (VOO)
  • Not as flashy or app-forward as Schwab or Fidelity, but incredibly trustworthy

If you see yourself as a long-term investor (think 5–10+ years), Vanguard is one of the strongest choices.

⭐ 4. TD Ameritrade

(Now part of Charles Schwab, but still widely used)

  • One of the best platforms for learning
  • Fantastic video tutorials and beginner guides
  • Powerful tools if you ever get deeper into investing

TD Ameritrade is beginner-friendly but also good if you want a platform you can grow into.

How to Actually Open the Account

Whether you choose Schwab, Fidelity, or another platform, the steps are nearly identical.

Step 1: Choose your brokerage

Pick one from the list above. Don’t overthink it. They’re all solid choices.

Step 2: Gather basic information

You’ll (or your parent/guardian will) need:

  • Legal name
  • Date of birth
  • Social Security number
  • Address
  • Bank account to fund the investments

Step 3: Decide what type of account

For most young investors:

  • Custodial Account (UTMA/UGMA) if under 18
  • Standard Brokerage Account if 18+

Step 4: Fund the account

Start with:

  • $100–$500 to test the waters, or
  • $1,000 if you want a solid starter portfolio

There is no pressure to invest everything at once. You can deposit money first, learn the platform, and invest when you're ready.

What Should You Buy First?

You have two great choices as a beginner:

### Option 1: Invest in a stock you’re genuinely interested in

Do you love:

  • Apple products?
  • Nike shoes?
  • Starbucks?
  • Disney?

Owning a piece of a company you understand is one of the most exciting ways to learn.

But remember:
Start small.
Buy one share, or even a fractional share. Get comfortable watching the ups and downs.

### Option 2: Just Buy SPY

If you want something simple that represents the entire U.S. stock market, you can buy shares of:

SPY — The SPDR S&P 500 ETF

SPY is an ETF (exchange-traded fund) that tracks the S&P 500 index, which includes the 500 largest companies in America. Buying SPY is like buying a little piece of:

  • Apple
  • Microsoft
  • Amazon
  • Tesla
  • Google
  • …and hundreds more

It’s one of the easiest—and most time-tested—ways to invest without needing to know everything about the market.

Starting with SPY lets you “own the market” while you learn.

Final Thoughts: Start Small, Stay Consistent

Opening your first online brokerage account may feel like a big step, but it’s actually one of the easiest—and smartest—money moves you can make.

Here’s your quick start plan:

  1. Pick a brokerage (Schwab, Fidelity, Vanguard, TD Ameritrade).
  2. Open a custodial account if you’re under 18.
  3. Deposit $100–$1,000 to start.
  4. Buy a stock you love—or just buy SPY.
  5. Keep learning, keep watching, keep growing.

This is the beginning of your investing journey—not the end.
Your future self will thank you for starting today.

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