STOCK BROKERAGE FIRMS

You’ve probably heard that your kid’s been skipping lunch just to save up for that new video game. Or has he been saying his prayers a little louder than usual just enough for you to overhear him wish for an iPod? These are things that the young ones would give an arm for these days. But how long can they stay interested with these modern gadgets? Would they serve as the best birthday presents? Would they look back ten years from now and thank you for the video game that they would not have any use for by then? And would they still be holding on to the iPod with the same reverence they used to have for it?

It is not such a bad idea to please them once in a while, but it is better if you teach them the value of money early on. This can only be possible though if you are setting a good example. Buying stocks may scare you off thinking that you need a huge amount in order to invest. It involves money but it does not necessarily mean it has to be big. The other two important elements are time, and rate of return on investment or percent of profits or losses.

Buying and selling of stocks are done through the stock brokerage firms. The investors are charged by these stock brokerage firms a percentage of the purchase or selling price of the stocks. The Securities and Exchange Commission (SEC) regulates the activities such as buying and selling of stocks, bonds, and mutual funds by the stock brokerage firms, which are classified into three kinds. These are: full service brokers, discount brokers, and deep-discount brokers.

Full-service stock brokerage firms are those that collect higher commissions, about $100 or more as their minimum charge. The discount stock brokerage firms have lower commission rate which is about $30 minimum. The deep-discount stock brokerage firms are those that charge flat rates of $12-$15 for each transaction. The reason why the first type is higher than the others is because those stock brokerage firms provide the client investment advice, and research reports. These things are not provided by the discount firms.

Those who are 21 years old can start buying stocks, although some states allow 18-year olds to start investing. Those who are under the age requirement can actually set up an account with a parent or guardian acting as the “custodian”. This is basically like driving with a student permit. You need an adult to sit beside you while you’re behind the wheel.

So there, it is not so bad to give up your fetish for the latest gadgets. Look at it this way, your friends may be bragging about their devices galore, but you’re one proud shareholder of McDonald’s and Coca-Cola.