Earn Your Leisure Podcast Episode Summary: "How to Buy Stocks"
Podcast Information:
- Title: Earn Your Leisure
- Host/Author: EYL Network (Rashad Bilal and Troy Millings)
- Description: Earn Your Leisure provides behind-the-scenes financial insights into the entertainment and sports industries, highlights entrepreneurs' backstories, breaks down business models, and examines the latest trends in finance. It blends business education with pop culture for a unique and engaging perspective.
- Episode: How to Buy Stocks
- Release Date: January 19, 2025
Introduction to Stock Investing
In the episode titled "How to Buy Stocks," hosts Rashad Bilal (A) and Troy Millings (B), along with co-host Chris (C), delve into the fundamentals of investing in the stock market. They aim to simplify the process for listeners who are new to investing, providing step-by-step guidance on getting started.
Choosing a Brokerage Account
Understanding Brokerage Accounts: The conversation begins with a clear explanation of what a brokerage account is and its significance in stock investing. Troy emphasizes, "A brokerage account simply allows you to buy stocks, sell stocks, invest" ([03:57]).
Recommended Brokerage Firms: The hosts discuss various brokerage options, highlighting both long-standing firms and newer, user-friendly apps:
- Traditional Firms: Vanguard and Fidelity are recommended for those with a long-term investment mindset. Troy states, "Vanguard and Fidelity are phenomenal... You're buying and holding for at least 10 years" ([10:29]).
- Modern Platforms: Robin Hood, Webull, Interactive Brokers, and Tastyworks are mentioned as excellent choices for those seeking more interactive and modern interfaces.
Setting Up Your Brokerage Account
Account Setup Process: Chris elaborates on the practical steps required to set up a brokerage account. This includes downloading the brokerage app (e.g., Charles Schwab, Fidelity) from the app store, filling in personal information such as Social Security number and email, and linking a bank account to fund the brokerage account ([05:52]).
Security and Privacy Concerns: A notable moment occurs when Rashad expresses hesitation about sharing personal information: "I ain't putting my social in there" ([07:01]). Chris responds firmly, "You gotta provide this information" ([07:04]), emphasizing the necessity of completing these steps to establish the account.
Funding Your Brokerage Account
Funding Methods: Chris explains that funding the brokerage account can be done through two primary methods:
- ACH Transfers: Typically take 3-5 days to process.
- Wire Transfers: Provide a faster alternative, often completing within 30 minutes. Rashad shares a personal tip: "When I get the wire instructions from E Trade, sending money reaches my account within 30 minutes rather than five to seven days" ([07:54]).
Importance of Timely Funding: Rashad highlights the importance of timely transfers, especially in volatile markets: "Five to seven days in the market can change a lot... you could have lost a lot or you could have gained a lot" ([07:38]).
Selecting Investments
Public vs. Private Companies: Chris distinguishes between public and private companies: "Public companies, anybody can own it, like Tesla, like Microsoft. A private company is like Earn Your Leisure" ([05:52]). Investing in public companies allows individuals to benefit from their growth and value increase over time.
Avoiding Common Mistakes: A critical point raised is the misconception that simply transferring money to a brokerage account equates to being invested: "Just because you open it, you put it in, now you're invested into the stock market. That's not, you're not invested" ([09:31]). Chris warns that funds often remain in a money market, not actively invested, unless deliberate investment decisions are made ([10:08]).
Tips and Best Practices
Active Management: The hosts stress the importance of actively managing investments. Chris shares insights from his experience as a financial advisor, noting that many individuals neglect to direct their retirement funds into actual investments, leaving them stagnant in money markets ([09:31]).
Long-Term Investing Strategy: Troy advocates for a long-term investment perspective, suggesting that investors should aim to "buy and hold" for extended periods (at least 10 years) to maximize growth and mitigate short-term market volatility ([10:29]).
Utilizing Multiple Platforms: Rashad expresses a preference for E*TRADE due to its comprehensive information resources: "I love E Trade because it's easier for me to get information" ([10:08]). This highlights the benefit of choosing a brokerage that offers robust tools and resources to support informed investment decisions.
Conclusion
The episode "How to Buy Stocks" serves as a comprehensive guide for beginners looking to venture into stock investing. By breaking down the essentials of choosing and setting up a brokerage account, funding it efficiently, and selecting the right investments, Rashad, Troy, and Chris equip listeners with the knowledge needed to take control of their financial futures. Their emphasis on long-term investing and active management underscores the importance of informed and deliberate investment strategies to achieve financial growth.
Notable Quotes:
- Troy (B) at [03:57]: "A brokerage account simply allows you to buy stocks, sell stocks, invest."
- Chris (C) at [07:04]: "You gotta provide this information."
- Rashad (A) at [07:01]: "I ain't putting my social in there."
- Troy (B) at [10:29]: "Vanguard and Fidelity are phenomenal... You're buying and holding for at least 10 years."
- Chris (C) at [09:31]: "Just because you open it, you put it in, now you're invested into the stock market. That's not, you're not invested."
This summary encapsulates the essential discussions and insights from the "How to Buy Stocks" episode, providing a clear roadmap for aspiring investors to begin their stock market journey confidently.