How Much Does a Stock Broker Make?

A stock broker makes their money off of investing. They take the beating on the market and perform the necessary calculations so that their clients can take proper, calculated risks when investing. This can be either cash or stock and the majority of brokers take a cash basis. It is possible to get an insurance policy from some brokers to cover stock losses in case you do happen to lose money. Most brokers will require you to open an account with them before they will agree to do business with you. This is simply a security measure intended to protect them against theft or loss. It also allows them to keep a close eye on your account and make sure you are investing responsibly. Once you have verified your identity through some type of documentation, they will usually allow you to trade in cash or margin accounts. Fortunately, with the aid of technology and platforms like CFDs (contracts for difference) it is now possible to enjoy all the benefits of stock trading without needing to run around to the office or the stock exchange to make your trades. For those seeking independence, flexibility, and to enjoy a life without stress, the option to work from home is now available as a viable alternative to a regular job. This blog post will focus on how much does a stock broker make, what are the most lucrative careers in finance, and which education is necessary to enter the field.

The Median Income Of A Stock Broker

According to the U.S. Census Bureau, the median household income is $50,300. However, when taking into account those who are self-employed and working from home, this figure rises to $64,000. With the average cost of commodities such as food, energy, and medical care taking up a considerable chunk of most people’s income, it is no wonder why many are turning to stock investing as a way of trying to boost their income. Luckily, the data behind this is available. According to the Federal Reserve Bank of St. Louis, from 2013 to 2017 the typical annual income for a stock broker was $61,400. This was a 13% increase in comparison to the previous five year period (2007 to 2011), when the typical annual income was $54,200. Looking at average income over the last 10 years (2003 to 2017), we can see that stock brokers now make significantly more than in the early 2000s, when the average income was $45,000.

Most Lucrative Careers In Finance

Taking a look at the most lucrative careers in finance, we can see that, other than stock broking, the next best thing is Investment Management. Investment Management takes the responsibility of investing clients’ money and trying to generate profit out of the investment. On average, an investment manager will make approximately $150,000-$250,000 per year. Next on the list is Futures Trading, when a trader takes on the responsibility of buying and selling commodities (usually with a long term contract) with the aim of profiting from changes in the market price. Last but not least, we have Speculative Broking, which is when a broker takes on the responsibility of trying to predict the direction of the market, usually with a short-term horizon in mind. The average annual income for a speculative broker is around $80,000, which is lower than that of an investment manager or trader because, generally speaking, less experience is needed to carry out speculative trades than investing activities.

The Salary And Career Path Of A Stock Broker

Looking at the career path and likely salary of a stock broker, one might assume that the job has become lucrative in the last 10 years. However, looking at the data, this is not the case. In fact, since the peak in 2007 until early 2019, the number of people choosing to be a stock broker has decreased by 15%. Looking at the next best-paying sector in terms of average salary, investment banking has seen the largest drop, with a drop of 23% in only the last five years. This is likely because the market took a hit in the last decade and a lot of the jobs were linked to investment banking and stock trading. In fact, 70% of the investment banking jobs are linked to stock trading. This is good news for those already in the field as it means there is still plenty of opportunity for advancement and increased paychecks. However, for those seeking entry-level employment, investing in stocks may not be the best idea as salaries are generally lower than those of comparable jobs in other industries. The good news is that while seeking entry-level employment, graduates can look at potentially lucrative side gigs such as portfolio management where they can make over $100,000 per year. Alternatively, for those seeking to change their career path, the best option might be to look at the investment management sector where they can expect to make $150,000-$250,000 per year, more than enough to make a meaningful change in your financial situation.