Learning the Ropes – Starting up my Brokerage Account

Hey guys. So I’m still focusing on building my side business this week, but I also don’t want to let my primary goals go either.

Today, I’ve been getting things set up for taxable investing. Last week, I set up a brokerage account with Vanguard for this very purpose and went through the trouble of transferring some money over only to learn that, for an account the size of mine, they only allow $7 trades for the first 25; after that, they become $20 each. So I decided to use Scottrade in the mean time while my Vanguard + Brokerage add up to more than $50,000. After that point, the trades become $7 each with no limit.

Once that happens, my plan is to consolidate everything over to Vanguard so that both my taxable and non-taxable accounts are there. Whether that will actually happen is up to future me and how much it will cost me. Ideally, it would be nothing since I’d want to hold on to the same stocks and such. Worst case, I can keep trading with Scottrade.

On the other hand, the reason I’d like to keep things with Vanguard is that once you have $500,000 with them, all trades become $2! I’m sure there’s something even more amazing out there, but for someone who’s as green as I am to stock trading, that seems like a pretty great deal.

And as some of you are probably paying close attention, you’ll note that I already have a brokerage account through Chase, but my plan is to also consolidate that. I hate having so many accounts all over the place. I’d rather have everything set up simply so there’s less for my simple mind to worry about.

All that being said, my account with Scottrade should be ready for funding this week and I should be ready to get things started with some dividend growth stocks. From what I’ve read recently, Coca Cola isn’t a bad one to start with, so I’ll probably go with that and a few other familiars just to get things rolling. I’m only starting with $2500, so I’ll probably invest in a handful of stocks in addition to KO (most likely borrowed from the amazing Dividend Growth blogs I follow). I’m still trying to come up with my own vetting process which, admittedly, is also largely borrowed from the blogs I read.

For those of you who I’ll be stealing from, please accept it as flattery more than outright theft! I just want to be more like you fine people.

I’ll probably update once things are actually set up and I’m ready to start buying, but while we’re on the subject…

Any recommendations for my first five or so stocks?

Any links to a checklist I should go over to vet each one before buying?

Any general advice?

14 Responses

    1. ONL,

      I guess I don’t expect specific stock picks per se, but more-so either a list of things to look into or a way of determining undervalued stocks. However, it was more to start any conversation on the topic, so that worked!

      I currently have my IRA invested in 100% VTSAX and will continue investing in this fund as long as I can! That will be part of the $50,000 I am referring to in the post, actually (right now, it sits at about $12500 and will soon be $15000 with the $2500 I moved over).

      Thanks for you well wishes!


    1. Adam,

      Thanks for the welcome! Yeah, I’m definitely in this for the long run. I’ve been a fan of Vanguard with regard to my SEP IRA so far, so I imagine it will be more of the same once I start using them for stock trading!


  1. Hey FI Monkey,

    Exciting times getting started in the stock market! I’m an Australian based investor, so don’t have too many great US stock recommendations for you, but there are definitely some great bloggers out there who you could emulate.

    I do have a couple of checklists I use myself, which are more to make sure I invest in stocks that meet my own criteria, and to make sure I have a clear plan for each – in case you’re interested:



    Jason @ Islands of Investing recently posted…Investment Plan Island Interview with….. Mr 1500!My Profile

    1. Jason,

      That’s a great checklist and I wonder what it would look like actually filled out, because it’s pretty dense in terms of what’s considered. I looked at the PDF toward the bottom which looks more my speed and it actually links out to the things you’re talking about, such as “the numbers behind the business.”

      From my brief scan of your article on “Why do the numbers matter?”, it seems like your boat analogy works well. For example, when I bought my BMW, it was used but it was a few thousand less than any other similar car I’d been looking for (I’d been doing my homework). The difference didn’t make sense to me, so I took it for a test drive (not a gentle one), looked over the auto report and couldn’t find a single reason it would be priced lower. There could have been something wrong with it, but I’ve had the car for years now and with regular maintenance, it’s been great.

      So in terms of value, the car I bought was undervalued for its market, which means I got a great deal. And it seems like that’s what I’m after for stocks, along with a whole bunch of other things I have yet to learn nail down just yet!

      Thanks for the checklist(s)! This is helpful.


      1. Glad you checked them out and found them helpful in some way! The detailed version is definitely much more comprehensive, but was designed to allow people to almost ‘pick and choose’ some of the important factors, and go into a bit more detail on each item to help explain its relevance.

        In terms of looking for ‘undervalued’ stocks, I did a short series on PE ratios (which is one useful measure of value) that you might also find interesting:


        And also in my newsletter I have an email which sets out a simple 5 minute stock analysis with a few key numbers – I’d be happy to send you the email directly if you think it would be useful? (so you don’t have to sign up to the newsletter).

        Look forward to hearing how you progress with all this!


        Jason @ Islands of Investing recently posted…Investment Plan Island Interview with….. Mr 1500!My Profile

  2. Grats starting up with Scottrade – I’ve been with them for about 4 years and really like them. Being able to call your local office is a huge plus in my book. Also almost once a month my local Scottrade has meet and greets and investment presentations/series. I’ve only been to two of them but they were informative. (They ask you about opening an IRA/trust at the end usually but I just say no thank you)
    Redeemed Finance recently posted…Recent Buy – Ford Motor CompanyMy Profile

      1. Honestly I haven’t yet – The ones I went to were like 20 minute presentations then 40 minute Q&A but they do pitch opening an IRA at the end of the Q&A. I usually go if I have something else to do there already (beneficiary form was one day, doing the signature card and my options trading application was another)
        Redeemed Finance recently posted…3 month SEO ReportMy Profile

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