For some investors, their stockbroker account is a piece of the machinery of making investments. An administrative burden, no more exciting than a utility statement or a tax form.
I see them quite differently. Through my eyes, a stockbroker account is an exciting gateway into a thrilling pursuit.
A piece of history and the future
Investing is all about shared ownership – owning a piece of something special. Special companies, special bonds, special pieces of property.
Equally, with an equity stake in companies such as Tesla or Google, you could be playing a part in the way that technology is transforming our world, through self driving vehicles, artificial intelligence or even transforming the way we produce energy.
To the layperson on the street – these breakthroughs are happening to other people, by other people.
But if you’re a shareholder, then you are physically at the heart of these transformations, and will feel a financial benefit if these drive profits for the company you own.
Sometimes you can also buy a piece of history through shares as well. Some companies were formed by royal charter in the 1700s and 1800s, and were some of the first publicly funded companies which moved spices around the old world.
A stream of income
Another exciting part of having an investment account is receiving dividends. Dividends are the part of a company’s profits which are distributed to shareholders as a reward for buying and holding the shares over the preceding period.
Like me, many individuals love the sight of seeing dividends appear on their statement. These can often be higher than the equivalent interest on a bank account, and they feel like free money. It’s interesting to work out what your dividend income could pay for from your day-to-day life. Could your dividend income cover your restaurant bills? Your utilities? Your rent?
Given that we are quite conditioned to assuming that we need a wage from employment to allow us to take care of lifes’ essentials, it is exhilarating to note that actually – this isn’t true – and that passive sources of investment income such as dividends could replace a wage.
Of course, all investors will start with a small sum in a stockbroker account, but after years of saving and investing in the stock market, it could grow to something far more substantial. It’s likely that in the early days, you are only receiving a few pounds of dividends each month, but before you know it, this could be £50 or even £100 per month – a real sum that you could either spend or use to reinvest to get more dividends in the future.
Whichever stockbroker account you choose to open, remember that it can be more than just a means to an end. A stockbroker account could be the way you pursue a hobby, dream for the future, or even connect with the past.