This video is going to be a step-by-step tutorial showing you how to open a
brokerage account with fidelity so you can start trading stocks, bonds,
mutual funds, and index funds among tons of other investment options. And
please hit the LIKE button or the SUBSCRIBE button if you get value out of this video.
First things first you need to go to fidelity.com and once you're on the home screen > up top
there's something called "open an account". Go ahead and click that. So we're going to scroll
down to open a brokerage account, click that orange button. First question is going to be will
this be an individual or joint account. For most of you it's going to be individual > hit next,
click yes or no if you already are a fidelity customer. For me I am so I'm going to hit yes
and it's going to have you log in with your current username and password. Now it's going
to ask you for your personal information so you're going to need to plug in your birthday, your name,
if you don't have a fidelity account you are going to have to do this. If you have a fidelity account
it should preload it for you and you just need to edit to make sure that it's correct.
Once you have your name filled out and your mailing address it's going to ask you how many
trades per year do you think you'll make. This you don't actually have to answer but for most
people it's going to be 0 to 35 trades. Then hit save or if you're a new fidelity customer
it'll be next. Then it's going to ask you your employment information so just click whether
you're employed or not and then just fill out your occupation and what company you work for. And then
two questions at the bottom for 99.9% of people it's going to be no and no. It's just asking you
do you have any relation to a publicly traded company where you own ten or more percent or
are you someone who's like a stock broker. Then hit next or save and this is an area where I get
a lot of questions about! This is asking you once you deposit money into your fidelity account where
do you actually want that money to sit before you invest it? So this is before you've invested any
stocks or mutual funds. This is just where do you want the cash to physically sit, I would
suggest going with the fidelity government money market fund because this has a slightly higher
interest rate than the other two. So while the money sits in there waiting to be invested
you can still have it earning some interest. And hit yes if you want to receive financial
documents electronically then we will hit next or save and congratulations you made an account!
It'll show you your account number on there, you can save it, you don't really have to worry about
it. When you go ahead and hit next it'll bring you to this page where we'll talk about the account
checklist.Now there's one really important thing I want to point out to you on this account checklist
page. Under the name your beneficiaries make sure you go ahead and you add beneficiaries. You're
going to need their full name and social security number and you can allocate if you have multiple
beneficiaries how much percentage of the account you want to go to each. So if you have two people
you can have fifty percent go to one and fifty percent go to the other. This is super important
if you pass away. If you have a beneficiary to the account they're going to go ahead and get whatever
funds you had within the account. If you don't have any beneficiaries named within the account
it's going to be a legal battle for anyone that you may have wanted to get the funds
to actually get the funds. What I like to do is at least once a year usually in January I'll
sit down I'll look at all my accounts and make sure my beneficiaries are up to date. The other
semi-important thing I'll show you on here is move money into your account. So you can transfer money
right from your bank account into your brokerage account. If you've never linked a bank account to
your fidelity you will have to go ahead and link a bank account to do that before you can transfer
from that bank account and if you need it broken down in a tutorial like I'm doing right now I
actually have a video where I was talking about opening a roth ira with fidelity but the second
half of the video starting at four minutes and 10 seconds... you can skip to that, I show you how to
link a bank account and actually deposit money into any fidelity account. And you can either
click the box up above to go to that video or I'll put the link in the description below. So once
this video is done you can go ahead and you can watch that video. Now like I talked about in the
beginning of the video... how do the taxes work for a brokerage account? This is important to know
because when you pull the money out you may have to pay taxes on it. So any money you deposit into
a brokerage account has already been taxed through your paycheck. That's how it got into your bank
account. So when you move the money from your bank account to your brokerage account the money that
you actually invest will never be taxed again but the profits that that money makes if you invest in
a stock and the stock goes up - all those profits are subject to taxes. But what kind of taxes do
you pay on the profits? There's two types: it's either going to be your regular income tax rate.
So if you're a single person you make a hundred thousand dollars a year you're going to be in
probably the 22% tax bracket. Meaning any profit that you make within your brokerage account when
you go ahead and you sell those stocks- if it's been less than one year, you're going to owe
roughly 22% in taxes. But the special thing about a brokerage account that you need to know about
is what's called "long-term capital gains tax". This is a special tax benefit that applies
for brokerage accounts. Whatever stocks, mutual funds, index funds... that you own
for more than a year within your brokerage account is no longer subject to your regular income tax.
It's only subject to the long term capital gains tax. Long term meaning MORE THAN A YEAR. So as
long as you held that position for more than a year before you sell it. You'll pay this adjusted
tax bracket. Most people are going to pay zero percent to fifteen percent. Which is going to be
a lot lower than your income tax bracket. So you could end up saving 10%-15%, in some cases 20%
in taxes by holding your stocks for one year and then selling them. And there's different
limits for single filers, so if your income your general income that you make on your paychecks
is $40,000 to about $450,000: you'll pay 15% in long-term capital gains tax but if you're married
and your income is less than $80,800, you're not going to pay any taxes when you sell your
stocks within your brokerage account as long as you've had them for more than a year. And the last
really really important thing I'm going to cover real quick is what do you actually use a brokerage
account for? There's different ways to use one. The number one thing I see people using them for
is instead of just having your money sit in a bank account earning almost no interest whatsoever you
can put it into a brokerage account have it gain interest for a year, two years, three years and
then go ahead and pull it out. I see people do this to save up for a house down payment,
sometimes to save up for a car, I recommend saving it for at least three years in the brokerage
account if it's going to be less than three years you're entering a lot of risk depending on how
the stock market fluctuates. Another great way to use a brokerage account is for what I call a
"bridge account". A bridge account is to help you retire early. So you can't access your retirement
accounts like your 401k or your IRA until your age 59 and a half but what if you want
to retire before that? Well a brokerage account functioning as a bridge account is a great way
to do that. It'll help bridge the gap from when you retire early until you hit age 59 and a half.
I have a video talking all about bridge accounts which you can click up here to watch that or I'll
put the link in the description down below. Thanks for watching guys go ahead SUBSCRIBE,
hit the LIKE button if you got anything out of this video! And I'll see you in next week's video!