A Step-by-Step Guide to Investing in U.S. Stocks

If you’ve made your first steps in the investing world, I’m sure you’ve wondered how you can start investing into the U.S. stock market. If you haven’t made any first steps though, I suggest you read my previous articles on money management.

Maybe you’ve looked into the Dividend Kings and Aristocrats and seen that most of the companies in these lists are large companies from the U.S.

There’s no doubt that the States has the core of the most profitable companies in the world. If you want to generate low-risk passive income for yourself from these companies, investing in them is basically the only way to do it. In this article, I will cover how I’ve used Lynx to invest into the U.S. stock market.

“I don’t know where to start…”

This is one of the most common phrases I’ve heard about investing, especially into the stock market. People usually understand real estate investing and even co-founding platforms, but the stock market can seem like a distant and mysterious world.

I’ve heard friends say it, family members say it, really anyone thinking about investing says it at some point. However, it’s actually very straight-forward.

Woman saying 'I don't even know where to begin'

First, you need to choose the companies you want to invest in. You can simply google a random publicly traded company (for example Apple). Once you’ve decided on your company (or companies) of choice, I suggest you invest in them hypothetically at first.

Secondly, look at your chosen companies’ behavior over a 6-month period and evaluate their performance. Did the price go up or down? Would your investment timing have been right? How much dividend income would you have received? (Most US companies pay dividends every quarter, so 4 times a year).

The most important thing is just to get started. Once you put your money into something, you’ll naturally start looking into more details, learn more about investing and over time become a better decision-maker. Just try not to make too expensive mistakes.

This is NOT a sponsored post, I just write about my experiences investing into the U.S stock market.


If you’re a beginner investor, it can be difficult to choose your investment platform. You might consider your bank, or international brokers, or other third-party services. For beginners, I suggest opening an account with Lynx, which is a trading platform.

Lynx allows you to invest almost all around the world, but I’ve used it to invest solely in U.S. stocks. You can also invest in different index funds or buy single company’s shares. There isn’t a lot of point investing in companies in your home country with Lynx though, as it’s unlikely to be cheaper.

Lynx pricing

In general, investing in U.S. stocks with Lynx is a lot cheaper than your bank. For example, investing into American stocks from Estonian banks usually costs about 15 € + 0.2% from the amount invested.

Also, if you start receiving dividends (to your euro bank account) you’ll receive them in U.S. dollars, meaning if you want to use them, you need to convert them into euros. In case you didn’t know – converting money with banks is super expensive.

There’s also no minimum deposit needed to open your Lynx account (although they say it’s 3000€ but in reality, they don’t check whether you send it or not). And they don’t charge a monthly fee just for having an account, which most of the banks and other traders (such as Interactive Brokers) do.

Buying 1 U.S. stock costs 1 cent per share, but the minimum fee is 5 dollars per transaction. This is still a whole lot cheaper than buying stocks through banks. Selling the stock has the same pricing. I usually invest at least 500€ at once, so I wouldn’t lose too much on fees.

Currency conversion has a fixed price of 4 dollars in Lynx, which is also a lot cheaper than what most banks offer. Banks’ fees might appear cheaper, but they love to hide fees in currency conversion. Lynx also won’t charge you anything else and you’ll get the same rate as you see in Google.

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Step-by-step Guide to Investing with Lynx (as a Private Person)

1. Open Your Lynx Account

When opening your account, you need to answer the regular questions about yourself (contact details, etc.), but you’ll be asked all sorts of details about your income. In contact details, make sure to choose “single account” if you’re opening an account for yourself as a private person (not a company).

Lynx contact details in account opening

You’ll also need to answer the following questions. For me, the answer for all these was “no”.

Part of Lynx account opening process - regulatory information

In the account opening process, they’ll ask how much experience you have with brokerage services, such as Lynx. When I first opened a Lynx account, I had Interactive Brokers for 6 months. However, if you want to open an account in Lynx, you need to answer “yes” to the first question and 1 (or more) years for other questions.

Lynx account opening 'experience with brokerage services'

Lynx wants to also know details about your income, however, nobody will ask for your paychecks or anything similar. These amounts are meant for Americans who are generally earning much more than an average European. Nobody will check whether the info you inserted is true or not.

products and experience part in Lynx account opening

You’ll need to choose which products you have experience with, and you cannot continue before the “Trades” number in “Stocks and ETFs” shows 100. I answered “no” to all other categories (such as options, CFDs etc.) as I don’t have any experience in them (and they’re highly speculative, too).

You’ll also need to choose your account type. Choose “cash account”, as if you choose “margin account”, then Lynx is allowed to borrow your shares to other investors, and you’ll need to pay a higher tax rate on dividends.

Lynx cash vs margin account differences

To finalize the account opening, you will be asked to send in a copy of your identity document (such as passport, or ID-card) and a proof of your address document.

2. Transfer Money from Your Bank to Your Lynx Account.

To do this, you need to set up an order in Lynx as well. You can set up an order from your Lynx dashboard by clicking on “Transfer funds” under “Manage your account” section.

How to transfer funds in lynx
How to create a bank wire deposit in Lynx

Fill out this form and head to your online bank to set up a transfer to Lynx. If you’re sending money from a European bank account, it’s for free, as it is a SEPA transfer. Once you’ve filled it out in Lynx, you’ll be displayed their bank details where you need to transfer your funds to.

Make sure to include your unique ID number to the description of the payment. This way Lynx knows that the money is coming from you. Usually they’ll receive your money in 1-2 business days.

3. Convert Currency in Lynx

This applies when you sent any currency other than U.S. dollars to your Lynx account. When you’ve sent EUR to your Lynx account, you’d need to convert it into USD before you can buy any stocks in USD. To convert from EUR to USD in Lynx, do the following:

  1. Enter EUR.USD to the search bar
  2. Choose “trade”
  3. Choose “Sell order” and insert your sum of money you wish to convert.
  4. Click “submit sell order”.
  5. You’ll immediately receive USD to your Lynx account.
Converting currency in Lynx

4. Choose Your Desired Stock

To choose your stock, use the search bar. Let’s say you chose Apple, or “AAPL” as it’s Apple’s ticker name. Lynx will provide you with an overview of the stock’s performance over the past 5 years and various other data.

Choosing a stock in Lynx

5. Buy the Stock

Click on “Trade” on the stock’s page to submit a buy order. When buying a stock, you need to enter the amount that you’re willing to pay per share. Therefore, you need to do a bit calculating before making the purchase.

Limit order means that you set a limited price for which you’re willing to buy the stock (notice that you can set whether the limited price applies for one day or until you cancel the order).

I usually set the limit price about 10-50 cents lower than the current price and click on “Submit Buy Order”. In most cases the transaction goes through within a day.

Buying Apple's stock in Lynx

6. Get Ready to Collect the Dividends

Dividends will be deposited straight into your Lynx account, and under the ‘reports’ section you can generate reports to see how much you’ve received in dividends over a certain time period.

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How do I Choose the Company to Invest In?

If you don’t know which company to invest in, I’d suggest doing some investing-related reading before. Keep an eye on the news, see which companies are being talked about, and then research them.

I also recommend reading different financial bloggers who give in-depth overviews about publicly traded companies. One of the best is Jason Fieber, who thoroughly analyses one underpriced stock every Sunday.

Once you’ve chosen your company, a simple google will tell you quite a bit about them. It’s a good idea to google “(company name) debt”, for example “KHC debt”. The first hits will already give you a good idea about their debt vs. earnings ratio.

There are of course several other details you should look into when investing in a company, and I’d definitely suggest you seeking out their financial sheets and delving into them. Investment decisions shouldn’t only be based on news stories and blog posts.

How Much Passive Income (Dividends) Will I Get?

Woman saying 'I don't know, you tell me' gif

I cannot know the answer to this question, sadly. The amount of your passive income depends on how much money you invest and whether you’ve invested it into companies which pay out dividends.

To find out how much a certain company pays in dividends, just google, for example “Apple dividend history” and within the first three results you should see an overview.

I like to call myself a dividend growth investor, meaning that I only invest in stocks which pay out generous dividends. Usually, they’re priced higher.

I don’t plan to sell any of my stock investments in the near future and even plan to keep them forever. Of course, things can change, and I might need to sell something, but that’s the general plan. Time and compound interest are a dividend investor’s best friends!

If you want to follow the same route and create a good amount of passive income, I encourage you to look into Dividend Kings and Aristocrats, as they pay the most generous dividends and grow them year-to-year. They are low-risk investments and when bought at the right time can earn you a solid amount of passive income.

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I can’t advise you too much on taxes, as it depends on the country where you’re a tax resident. Tax rates differ in every country. But to 72% of you (my Estonian readers): if you’re an Estonian tax resident, the tax from the US dividends is 15%.

It’s credited before it hits your account in Lynx, so you’ll constantly receive post-taxed money. This money won’t be taxed again in Estonia.

If you decide to sell a stock and earn money from the sale, you’ll need to pay 20% income tax on the profits.

And remember, always use dollar cost averaging, kids!

how dollar cost averaging works

If you don’t know what dollar cost averaging is, you can read about it in my previous post.


Opening an account with Lynx shouldn’t take more than 10-15 minutes and the process is quite straight-forward. Sadly, to open an account with them, you need to lie a bit, as otherwise, most beginner investors cannot open an account with them.

However, they will not check whether you’ve done 100+ investment transactions before or not, or what’s your income in reality. Therefore, I wouldn’t worry about it too much.

If you have any questions about investing in Lynx (or the taxes on dividends), let me know in the comments! I’m happy to answer!

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