Podcast Summary: Money Rehab with Nicole Lapin Episode: Simple Step-by-Step Guide for Making Your First Investment
Release Date: January 3, 2025

Introduction

In this episode of Money Rehab with Nicole Lapin, host Nicole Lapin provides a comprehensive, step-by-step guide tailored for beginners looking to make their first investment. Emphasizing accessibility and clarity, Nicole demystifies the investment process, ensuring listeners feel empowered to take control of their financial futures.

1. The Importance of Investing

Nicole begins by addressing a common misconception: funding a brokerage account does not automatically mean you're invested in the stock market. She uses an engaging analogy to illustrate this point:

“Funding a brokerage just allows you the option to buy stocks, but you still need to buy them. You still need to bake the cake.”
— Nicole Lapin [04:30]

She underscores the significance of understanding the investment process to transform initial funds into active investments that can grow over time.

2. Setting Up a Brokerage Account

a. Understanding Brokerages

Nicole explains that a brokerage serves as the intermediary between investors and the stock market. Unlike the old days where one might physically visit the New York Stock Exchange, modern investing requires a brokerage account, which can be a firm or an online platform.

b. Choosing the Right Brokerage

Selecting a brokerage is pivotal. Nicole highlights key features to consider:

• Fractional Investing: Allows purchasing portions of a share, making high-priced stocks accessible. Nicole shares her preference:

  “I personally like using brokerages that offer fractional investing just to keep more options open.”
  — Nicole Lapin [05:45]

• Robo Advisors: Automated, AI-driven investment management. Nicole elucidates their benefits:

  “Robo Advisors are AI-backed programs that... make informed investing decisions for you based on your financial goals and risk tolerance.”
  — Nicole Lapin [06:30]

  She points out the cost-effectiveness of Robo Advisors compared to human advisors.

• Minimum Deposit Requirements: Ensuring the brokerage’s minimum deposit aligns with the investor’s financial comfort.

Nicole recommends Public as her preferred brokerage for its user-friendly interface and comprehensive investment options.

3. Funding Your Brokerage Account

Once the brokerage account is set up, Nicole walks listeners through the funding process:

• Bank Transfers: Linking your bank account for electronic transfers is the easiest method.
• Wire Transfers: Faster but incurs fees.
• Mailing Checks: Less common in the digital age.

She cautions that funding transfers may take a day or two to process, delaying immediate investment actions.

4. Making Your First Investment

a. Navigating Ticker Symbols

Nicole explains that ticker symbols are unique identifiers for stocks and funds, essential for locating them within a brokerage platform. For example:

“Apple's ticker symbol is AAPL... Harley Davidson's ticker is HOG.”
— Nicole Lapin [09:15]

b. Selecting Investment Type

Using the S&P 500 index fund (e.g., VOO) as an example, Nicole details how to choose an investment based on factors like expense ratios:

“I like VOO because it has a lower expense ratio than SPY, which means more of your investing returns stay in your pocket.”
— Nicole Lapin [10:05]

c. Understanding Order Types

Nicole breaks down the two primary order types:

• Market Orders: Executes immediately at the current market price. Ideal for simplicity but lacks price control.

  “A market order means you're buying a stock at whatever the current price is... you'll own $100 of VOO.”
  — Nicole Lapin [11:20]

• Limit Orders: Sets a maximum (for buying) or minimum (for selling) price, offering more control but potential delays in execution.

  “A limit order lets you base your transaction around a ceiling for the stock price.”
  — Nicole Lapin [12:15]

Nicole shares her personal preference for market orders due to their straightforward nature, especially when coupled with fractional investing.

5. Settlement Funds and Investment Activation

After placing an order, funds reside temporarily in a settlement fund—a money market fund offering low-risk, liquid investments such as treasuries and CDs. Nicole emphasizes:

“When your purchase goes through, boom, you have made your first investment.”
— Nicole Lapin [13:50]

This period allows for the transaction to finalize before the investment becomes active.

6. Strategies for Profiting from Investments

Nicole outlines two primary ways to earn from investments:

• Dividends: Regular payments from companies to shareholders. While they provide passive income, Nicole notes they are unlikely to make you wealthy on their own.

  “Dividends can be a nice source of passive income... but dividends aren't going to make you rich.”
  — Nicole Lapin [14:30]

• Capital Appreciation: Selling investments at a higher value than purchased. Nicole emphasizes this as the more substantial path to wealth:

  “The more common way to get rich from investments is to sell your investments.”

— Nicole Lapin [14:45]

She advises long-term investing, leveraging the historical average of an 8% annual return from the stock market, and selecting investments poised for growth.

7. Recommendations and Resources

Nicole reiterates her endorsement of Public for new investors, highlighting its features like fractional investing and an intuitive bond investing interface.

“I am super proud of you. Investing in the stock market is investing in yourself.”
— Nicole Lapin [15:30]

She encourages listeners to take proactive steps in their financial journeys, reinforcing that investing is a significant and personal empowerment tool.

Conclusion

This episode serves as an invaluable resource for novice investors, breaking down complex concepts into manageable steps. Nicole Lapin's approachable expertise ensures that listeners are well-equipped to embark on their investment ventures with confidence and clarity.

Additional Resources

• Public Brokerage: public.com – Recommended platform for new investors.
• Show Notes: Includes a downloadable cheat sheet summarizing the investment steps discussed.

Thank you for tuning into Money Rehab with Nicole Lapin. For more personalized advice, consider reaching out to Nicole via email at moneyrehab@moneynewsnetwork.com. Follow Money News Network on Instagram and TikTok for exclusive content.