How do you become an investor?

To become an investor, choose the type of investments you want to make, choose the investment vehicle, open a brokerage account, and choose a healthy balance of stocks and bonds in which to invest. You need investment capital and a solid investment plan.

1. Decide on the investment type

   Choose the type of investor you want to be. For example, you can become a direct trader or a buy-and-hold investor.

2. Choose your investment avenue

   Choose the investment vehicle with which you are most comfortable. Choose mutual funds if you want to obtain profit on a monthly basis. Choose exchange-traded funds if you want more direct involvement in your portfolio.

3. Choose a broker

   Establish a brokerage account if you want to make bets on industry sectors or a particular company or if you want to trade ETFs. Choose deep discount brokers if you want to slowly build a diverse portfolio over time. Choose discount brokerages if you want more comprehensive features, and choose a premium broker if you need extra service and advice.

4. Select the investment

   Pick the companies that interest you most. Start a low-cost portfolio that has ETFs or mutual funds with a good balance of bonds and stocks. Place around 20 to 30 percent of your investment in bonds and your remaining capital in stocks.