Money

How to start investing with commission-free trading?

4 min read

Investing is now more accessible than ever, and now is the perfect time to get started with investing.

In the not so distant past, investing in the stock market seemed like a far-flung idea. It didn’t feel like something easy to get started, and it certainly didn’t seem accessible to the everyday person.

There was a perception that you needed special education or access to a financial advisor to get involved in investing.

And the truth is, it was a bit complicated. In the past, you needed to open an account with an investment company to get access to a broker, who would buy and sell stocks on your behalf.

Each time you wanted to buy or sell shares in a company, you had to contact your broker, and he would execute the transaction for you.

The broker would then charge you a commission fee each time you bought or sold one of your shares. For high volume traders that were making large profits on each transaction, the fee was considered nominal.

But for the every day trader or someone just getting started with investing in the stock market, this commission fee represented a barrier to trading in the stock market. It also meant you had to share your profits with your broker while absorbing the cost of a loss.

Overall commission fees represented a barrier to trading and didn’t help to make investing feel more accessible.

Removing barriers to investing

Thankfully today things are very different. Buying and selling shares in your favorite companies are now easier than ever.

In large part, due to technology and new fin-tech companies like Robinhood, investing in the stock market is something anyone can do. All you need is a phone and an internet connection, and you have access to the financial markets to buy and sell shares in your favorite company.

Best of all, you no longer have to worry about paying commission fees to a broker, since you are the one executing your transactions.

Robinhood was one of the first, if not the first financial technology company to introduce zero commission fee pricing in 2013. They believed investing wasn’t just for some. It was for all. Their mission is to democratize investing and empower people to take control of the financial future.

Commission-free trading is now the new norm

Many other financial companies are following suit, including traditional investment companies like Charles Shwab (CB). The company recently announced it would be reducing “U.S. stock, ETF and options online trade commissions from $4.95 to zero,” and removing the minimum balance to open and maintain an account.

Interactive Brokers (IB), another well known global online broker also recently announced plans to remove trading fees to attract a broader audience.

Both Interactive Brokers and Charles Schwab made their announcements just days apart, with IB beating CB to the punch. From the outside perspective, it would seem more and more investment companies are recognizing the need to diversify their product offering, to make it more appealing to a broader audience and to also make it more accessible.

For new or aspiring investors, now is the perfect time to start investing to take advantage of no commission fees and increased benefits.