How do I buy shares?

You know you want to get started investing. But how?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's one thing to realise that buying shares is a smart thing to do. But answering the question 'How do I buy shares?' is something else altogether.

When you haven't bought shares before, the whole thing can be really daunting. Daunting enough that some people are easily put off.

But don't be. It's easier than you may think, even if you're a complete novice.

Let's assume you've already decided which shares to buy. (If you haven't, you can sign up here to get our best offers.)

The next step is to find somewhere you can actually buy those shares. And the best way to think about it is just as if you're buying a television online.

Stick with me as I explain. You've done your research and you know which telly you want. Now you have to decide where to buy it.

And shares are just the same. The equivalent is that you've decided to buy shares in Jester's Jokes and Japes (ASX:HAHA). The next question is 'Which broker do I use'?

Stockbrokers, for our purposes, are simply retailers of shares.

And, just as online shopping has changed retail, online brokers have changed how we buy and sell shares. Buying shares online is usually cheaper and easier — and can be done from the comfort of your own home.

And choosing a broker is much like choosing which online retailer you'll buy your telly from.

Do you recognise the broker's name? Can you trust them? Is the website easy to use? Can you find help when I need it? And how much will you have to pay?

And, like buying a product online, it's not just one of those factors that matters, but the combination.

You wouldn't buy just from the cheapest retailer, if you'd never heard of them. Or if you couldn't easily contact customer service. Or if the website was hard to use.

But nor do you want to pay top dollar if you're not getting value for money.

So here's what I'd suggest. Google 'online stockbroker'. Check out the websites and costs of three companies you've heard of that pop up in that search. Then pick the one that has the site you like best — including a thorough help section and/or online tutorials — as long as you're not paying more than $20 or $25 per trade. As a Foolish investor, you won't be trading too often, so paying a few dollars more per trade isn't going to hurt you, and you'll feel more confident in the process.

Then, sign up for an account. There'll be a few bits of paper to sign — sorry, we can't help you avoid that! — but unless you change brokers, that'll be the last time you need to do it.

And if your broker offers you a linked bank account, take it. Yes, be careful of fees, but having a seperate account is vital, and here's why: it's too easy to spend money that you'd otherwise invest, whether that's money you're intending to save, or dividends you're planning to reinvest. But if you have your dividends paid into that account, and regularly transfer savings into it, you'll be less likely to raid it for the latest toy or fashion purchase!

And that's it… once the accounts are set up, you're ready to buy!

Each broker's website is different, so we won't try to tell you which buttons to click. But generally all you need is the company's ASX code and the price you're prepared to pay. And use a limit order. You can find a little more information here.

And with that, you're on your way to building real, lasting, life-changing wealth. Just make sure you follow up your first investment with another. And another. And another… 

Scott Phillips has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »