Investment Workshop 03: Opening Your Accounts

Hello and welcome back to the Investment Workshop!

Today, we’re going to be setting up our investment accounts so your money has a place to go when you’re ready to start investing. Which company you use will depend on where you live. Canadian residents have to use a Canadian brokerage firm, and Americans have to use an American one.

Questrade (Canada)

In Canada, the brokerage account we’ll be using is Questrade. We’ve used this company for years and is the brokerage firm we hold our personal FIRE portfolio in, so clearly we’re huge fans.

Interestingly, unlike all the other major Canadian banks that charge a fee every time you buy or sell, Questrade only charges you when you sell. Buying is free. This is a major plus for people who are working towards FIRE, because when you’re accumulating assets, all of your transactions are buys rather than sells. This means that if you use Questrade, you basically pay no fees! Me likey!

Opening up an account is free. If you don’t already have one, use this link as it gives you a $50 rebate on commissions going forward. That might come in handy if we need to rebalance later on down the road.

To get started, please click the following banner.

Questrade offers two types of accounts:

  • Self-Directed
  • Managed.

Because we’re going to be directing our trades ourselves, we want to select “Self-Directed.

And for the Self-Directed Account Type, we are going to pick a normal non-registered account “Individual Margin.” (We will talk about RRSP/TFSA accounts in a future post). We won’t be messing with options at all, so pick “No” for the Options trading. And make sure if it’s not there, you add in the offer code of “AFFLT” so you can get your $50 of free trades.

After that, you’ll be asked for your name, address, SIN, etc. Go ahead and fill that out and complete your application. After that, you’ll just need to e-sign some documents and voila! Your account will be open.

Vanguard (USA)

And now onto the Americans. For you, we’ll be using Vanguard. Why? Well because they offer commission-free trading on Vanguard ETFs! Since we’ll be using Vanguard ETFs to build our FIRE portfolio, this basically means you won’t have to pay any account fees, ever!

Again, for the purposes of this workshop we’ll be opening up an Individual trading account. We will be talking about how to invest using tax-advantaged accounts in a future post, but to keep things simple we will start with this.

The account opening process is fairly straightforward, but at the end you may have to print out, sign and snail-mail a whole bunch of documents to their headquarters, so if you’re planning on following along you might want to do this sooner rather than later as it does take a while.

Funding Your Account

Once your accounts are open, we have to fund the account. As with all things banking, never EVER pay any fees. So in order to transfer money into your trading account without paying any annoying bank fees, the easiest way is to set up a Bill Payment from your normal bank’s checking account. I was able to find “Questrade Inc” under my bank’s online payee list, and after entering my trading account number I was able to transfer money in pretty easily. Test with a small amount first and make sure it shows up.

Americans, it looks like all of y’all (that’s my American accent. I’m very proud of it.) have something similar called “ACH”, or Automated Clearing House transaction. You will need the account number and routing number from your checking account, as shown below.

check

Although there are no account maintenance fees with Questrade, I found that for Questrade if you try to access their “Trading” page with a balance of less than $1000, it will just sit there spinning forever and never load. Apparently $1000 is the magic number you need to have to “enable” the trading features.

And for Vanguard, they DO charge a $25 annual account fee, but you can get it waived if you sign up for e-delivery of your statements. I guess that’s the amount they were spending on physical paper/postage. Anyway, make sure you set up e-delivery by clicking here.

Conclusion

At the end of this process, you’ll have your first investment account open, funded, and ready to go. Next, we’ll talk about how to make this portfolio easy to manage going forward by using the right visualizer tools, so stay tuned!

Onto the next section!

Go back to the previous section


WORKSHOP TOOLS

How much does it cost to participate in the Investment Workshop? NOTHING. Because that's how we roll. All we ask is that you sign-up using the following affiliate links to keep it free forever:

For Canadians:

1) Questrade

2) Passiv

For Americans:

1) Vanguard

2) Empower



Disclaimer: The views expressed is provided as a general source of information only and should not be considered to be personal investment advice or solicitation to buy or sell securities. Investors considering any investment should consult with their investment advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decisions. The information contained in this blog was obtained from sources believe to be reliable, however, we cannot represent that it is accurate or complete.


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