Everyone talks about which stock to buy. Nobody talks about where to buy it. That’s what today’s episode is about — and it matters more than most people think.
What Is a Broker?
A broker is a platform that allows you to buy and sell investments — stocks, ETFs, crypto. Think of it like this: you can’t just call Apple and say "give me one share." A broker makes that transaction possible. It’s your access point to the market.
What to Look for in a Broker
- Fees — Commissions, FX fees, account maintenance. Small fees add up fast over time.
- Regulation — Make sure the broker is licensed by financial authorities like the FCA (UK) or FMA (Austria).
- User interface — It should be simple and easy to use. You don’t want to spend hours figuring out how to place a trade.
- Customer service — Check reviews. Can you actually reach support when something goes wrong?
- Variety — Choose a broker that offers the assets you actually want to invest in.
Trade Republic vs. Interactive Brokers
Trade Republic — Clean app, low fees (~€1/trade), 2% interest on uninvested cash, supports fractional shares, 10M+ users in Europe. Downside: limited stock selection and reportedly poor customer support.
Interactive Brokers — Very global, highly competitive fees, one of the most trusted brokers worldwide, free educational content. Downside: can be complex for beginners.
New to investing? Start with Trade Republic. Have some experience and want full access? Interactive Brokers is the better choice.
How Brokers Make Money
- Commissions — Small fee per trade (e.g. €1 at Trade Republic).
- Spreads — The difference between buy and sell price.
- Interest on cash — They earn interest on uninvested funds in your account.
- Margin interest — When you borrow money to invest, they charge interest on that loan.
"Free" trading isn’t truly free — brokers just monetize differently. As long as they’re transparent about it, that’s fine.
🎯 Your Challenge