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S.T.E.P.S. - Smart, Tailored, Event-Driven, Packaged Solutions
provided by Women's Financial Network at Siebert
Opening Your Own Accounts
-- Part VIII
If you don't already have them, opening up accounts in your own name is an important first step in establishing yourself as a separate financial entity from your spouse. Doing so helps build your personal credit history and in turn can greatly improve your financial viability going forward. There are three basic ones you should consider if possible:
Checking
Basic checking accounts are designed for day-to-day transactions and bill paying, so it's important that you have one set up in your own name that you can operate out of. - These accounts are readily available and easy to open.
- Try to find a bank that will offer both ATM and debit cards along with their checking package.
- Be sure to ask about fees and other related service charges before selecting a bank.
Credit card
Regardless of your marital status, you should always have a credit card in your own name. Here are a few things you should know before choosing one: - Check out interest rates. Shop around -- rates vary significantly.
- Research which card offers you the most appropriate value-added discounts.
- See if the card allows you to earn special bonuses like frequent flyer miles. These can be fantastic perks.
How do I go about getting a credit card?
- Start by asking your bank if it offers credit cards. Many of the bigger ones do.
- Bank Rate Monitor (www.brm.com) will help you find the credit card that is right for you.
- For a small fee, CardTrak (www.ramresearch.com) can help you find banks offering credit cards with low interest rates and low finance charges.
- Credit Card Network (www.creditnet.com) allows you to apply online for a card.
- Call major credit card companies -- Visa, Mastercard, etc. -- and ask them to send you an application.
- If you are having trouble opening a credit card account, try opening an account at a large department store first. Pay your bills on time and establish a good credit record. After three months, try opening a major credit card again - you should have better luck this time.
Brokerage
Investing funds in a brokerage account is a smart way to start getting your money working for you.
1. How do I choose a broker?
Before you can buy a stock or bond, you need first need to set up a brokerage account. For first-time investors this may be a tall order, but here are two basic options: - Full-service brokerage firms -- These companies charge the highest fees but have the closest interaction with clients. They are effective for those who want personalized service and help.
- Discount brokers -- As opposed to a full-service firm, discount brokers like Muriel Siebert & Co. are primarily there to execute your wishes -- not give financial advice. As the name implies, they charge lower fees for transactions.
2. What about online brokers?
The Internet has had quite an impact on the brokerage industry. More and more investors are shedding their traditional brokerage relationships and giving online investing a try. Many women enjoy online investing because of its low fees, easy access, and anonymity (no one over your shoulder to watch what you are doing).
You have several options when it comes to selecting a firm with which to open your online brokerage account. One way to begin is with a discount brokerage firm like WFNInvest. Discount brokers, like ours, offer their clients high-integrity products and services at a significantly lower rate than full service firms do. In our case, for example, the commission rates are up to 80% below the full-service firms.
With a discount broker, you can invest your funds in a full range of products including individual equities, bonds and other fixed income securities, mutual funds, money market accounts and more. You also have access to research, information on up and coming initial public offerings (IPOs), timely updates on how your portfolio is performing and more. Although many discount brokerages are able to service their clients personally, the only thing you can not receive with such a firm is direct inves investment advice. It is up to you to ultimately make your own investment decisions.
For more information on WFNInvest, please see ourInvesting Center.
3. Risk
Your investment strategy will vary depending on the level of risk you feel that you can comfortably embrace. In general: - The more risk you can assume, the higher proportion of stocks to bonds you should have in your portfolio. Keep in mind, however, that although stocks carry greater risk than bonds, over every twenty year period since 1931, stocks have outperformed fixed-income investments like bonds.
Continue to: Part IX: Developing a budget
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To open a brokerage account, click here for Women's Financial
Network at Siebert, where Smart Women Invest.
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