How do investment accounts work?
Sometimes the terminology can be confusing - and it can be difficult to
understand what is inside an investment account. Here’s an analogy to break it down:
1️⃣ Picking a brokerage firm (e.g. Vanguard, Charles Schwab, Fidelity) —> is like picking a neighborhood to buy a house 🏠⛪️🏡🏣
2️⃣ Next you pick an account type in that firm (e.g. Taxable Investment Account) —> which is like picking the house you want to buy🏡
3️⃣ Lastly, you need to SELECT your investments (i.e. Index Funds, Target-Date Funds, etc) —> which is like picking the furniture inside your house. You can do it yourself (DIY decorator!) or hire someone to do it for you (e.g. Robo-Advisor). 🏺
Disclaimer: This content is for informational and educational purposes. It should never be considered financial or investment advice. Investing involves risk and you could lose money. What’s good for one person, may not be for the next. Do your own research, never invest in something you can’t easily explain to a friend. You are fully responsible for your own decisions.