Why Brokerage Accounts Are Not Just for Rich People

Even people without a lot of money can get into investing.

Opening a brokerage account isn't just something for the wealthiest Americans to check off their to-do lists. It's a good idea for people across many income brackets to do this, too.

In fact, it may be even more essential for lower-income and middle class Americans to open a brokerage account, and it's actually really easy to do if you have even just a few dollars to get started with.

Here's why.

Brokerage accounts are essential for investing

The bottom line is, if you want to invest your money, you're probably going to need a brokerage account.

These accounts make it possible to trade shares of stocks, as well as to buy mutual funds and exchange-traded funds (ETFs). Stocks are investments in specific companies, while mutual funds and ETFs pool your money with other investors and put it into a mix of several kinds of assets depending on the fund you choose.

Rich people open brokerage accounts so they can make their money work for them. They invest their funds and often earn a generous return on their investment that grows their wealth. If they have enough invested, they may earn millions of dollars a year just by putting money in their brokerage account and buying assets. The account can support them while they keep getting richer.

But it's not just rich people that need to make their money work. In fact, they're already wealthy so they probably don't need to invest. For many Americans, though, investing is important.

It's almost impossible for average people to save enough money to become wealthy if they don't put their funds into a brokerage account. If you invest, there's a chance your money will earn more money, which can then be reinvested. And that could help you earn even more. In that way, almost anyone can grow their wealth over time.

Now, there is a risk to investing (and there's no guarantee you won't lose money). You shouldn't invest money you need to pay bills or that you may need to spend in the next two to five years. But once you have your bills covered, have saved some money for emergencies, and have paid down high-interest debt, investing is likely the best thing to do with your money.

Brokerage accounts are now accessible to everyone

The good news is that it's become easier than ever for most people to open a brokerage account. In fact, you don't need to be rich or even have much money to open an account.

There are a vast number of discount brokers online that let you open an account within a few minutes. Most have no minimum balance requirements, so you can get started with a dollar or two. And many now offer the option to buy fractional shares, which means you can buy part of a stock share if you don't have the money to buy a full one.

Many brokerage firms have also eliminated commissions on trades, so you can buy $1 or $5 worth of a stock or ETF and get your money growing without losing any of your gains to commission.

To get started and learn more about investing, check out our beginner's guide to brokerages. And explore your options for great online stock brokers to find one with no minimum balance requirements, limited or no fees, and fractional share trading. Then you can start investing like the rich -- even if you aren't sitting on a mountain of cash.