Buying stock back in the day used to be quite the annoying experience. At its best, you would call your stock broker and ask them to buy something for you. Yet you would sometimes travel to a firm or brokerage in person, sign a bunch of papers, and cut a check. Doing all of this in the age of the internet sounds downright backwards.
Thanks to recent advances in technology, buying and selling stocks online is as easy as shopping. Gone are the days of calling a human to conduct a transaction on your behalf. Now, you can simply press a few buttons and become an instant shareholder.
This might sound easy to some, but for new investors, buying stock is confusing AF. That’s why we put together an idiot-proof gif guide on how to buy your first shares of stock. By following these five simple steps, you’ll be on your way to becoming an expert investor in no time.
To get started, you need:
- A smart phone
- An internet connection
- A bank account — preferably with money in it.
First, download Robinhood on iOS or Android.
If you want to buy stock, you need a broker or brokerage first. Since you probably don’t have one, we suggest you sign up for Robinhood. This app-only brokerage lets you buy stocks and funds on major American exchanges without paying fees or meeting minimums. And yes, it’s totally legit. (For more on Robinhood and how to use it, read our comprehensive guide.)
Next, you need to sign up for an account.
You’ll need a working email address (duh), along with all other personal information like your address and social security number (for tax and fraud prevention purposes). You’ll also need to connect a bank account to fund your brokerage account, in case you want to actually invest. Getting your new account proved or funding your account might take some time to clear.
Find your stock of choice.
Now that your account is funded, you’re ready to buy a stock. What you should buy is a question for another time, but once you find a company or fund you’re interested in them, simply search for their name. You can also search for their symbol or $cashtag. In this example, we searched for $ETHO, a climate change-focused ETF.
Now it’s time to buy your stock.
Simply put in the number of shares you want and Robinhood will give you the total cost of your order. If you have enough money in your Robinhood account, your order will go through immediately and you’ll become a proud new stockholder. If you don’t have enough money in your account, you’ll get a warning that you don’t have enough buying power and be asked to make a limit order.
Finishing your transaction.
We tried to buy a share of $ETHO, but we were short a couple of cents in our account. We still really wanted the stock, though, so we set up a limit order. A limit order tells Robinhood the minimum we’re willing to pay for a share of stock. By setting this limit, we were able to buy a share of $ETHO at our desired price with the remaining money in our account. Now, we own one share of $ETHO!
That’s all there is to it. By signing up with Robinhood, you can buy shares of stock, avoid excessive fees, and even spend less on shares than you want to. To learn more about this awesome brokerage service and why we recommend it, be sure to read our comprehensive Robinhood guide.