Theme Layout

Boxed or Wide or Framed

Theme Translation

Display Featured Slider

Featured Slider Styles

Display Grid Slider

Grid Slider Styles

Display Trending Posts

No

Display Author Bio

No

Display Instagram Footer

No

Dark or Light Style

Search This Blog

Powered by Blogger.

Is Robinhood For Real No Fee Investing & Free Stocks?



Oh my goodness, I have been wanting to write about Robinhood since I discovered it. Robinhood - the commission free investing platform - not the legendary green tight wearing fella who steals from the rich and gives to the poor. But he’s pretty dang cool too.


As you know one of my financial goals was to start investing a little bit in the stock market. I knew going into this that:

1) I would deposit a small amount of money (hopefully each month) and purchase only a few shares of stock each transaction
2) My balance would be very small
3) I wanted to choose the stock I was purchasing

I originally planned on using E*TRADE because, well frankly, it was the only online brokerage option I was even a little familiar with. And remember the old talking baby commercials? Talk about effective advertising, I’m still talking about it.

I knew from the start I could only realistically deposit a little bit of cash to invest each month so my purchase orders would be limited to only a few shares at a time. When talking about $50-$100 a month, I knew commission fees of any kind were going to be a hit to my balance and a little counterintuitive to my goal of saving some money. E*TRADE charges $6.95 per trade. So my $100 becomes $93 and my $50 becomes $43. Anywhere from 7-14% of my balance going to fees was a turn off for me. I knew I at least needed to find lower fees. Honestly, I didn’t even know that commission free trades existed before doing some research. But I’m here to tell you they do! And they’re a thing of beauty! (Side note: the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) charge fees on the sell side of things. You can read Robinhood’s explanation of these fees here.)

My next obstacle was to find an investment account without a minimum balance. What really shattered my E*TRADE and talking baby fantasies was that they required a minimum balance of $500. I just couldn’t do it. I didn’t want to take the money from my savings because I’m still working on that six month emergency cushion. I wanted to be adding additional money to my brokerage account while still working on my savings. Taking money from my savings felt a little like robbing Peter to pay Paul.

To be clear, I’m not bashing E*TRADE at all. It just wasn’t the right option for me and the style investing I saw feasible for myself at this point in time. E*TRADE is popular for a reason. And they do offer commission free trades with qualifying deposits. Do your research and pick the right account for you to open, it very well may be an E*TRADE account.

Finally, I knew I wanted variety. And I knew I wanted to be able to pick stocks I liked. You already know I have beef with Suze Orman for discouraging millennials from investing in stocks just because they like them. Well I’m certainly not taking that advice. I want to invest in companies I like (and preferably buy from too)! Initially, I was interested in Acorns which automates investing small amounts for you via automatic transfers or rounding up your debit card purchases to even amounts and investing the difference. Acorns charges $1 a month (there are also $2 and $3 options but the $1 gets you a simple investment account  and would have been sufficient for my needs) and invests in a predetermined diversified portfolio. The portfolio is managed by a Nobel laureate, so that’s cool, but not exactly what I was looking for.

As you must have guessed by now, Robinhood was able to meet my three needs/wants. The sign up process was nice and simple, I entered my information, verified my email and waited for the verification deposit to show up in my checking account. Total bonus, once I verified my bank account  and initiated my transfer ($100 to start) I was able to purchase stock immediately. So what was my first big purchase?


Two shares of TJ Maxx (TJX) stock for a total of $88.50. So far I’m up! I chose TJ Maxx for a few reasons:

1) The stock was one of the affordable ones I’ve been interested in
2) TJX pays a dividend which I plan to reinvest in more stock (one drawback of Robinhood for me was there is no automatic dividend reinvestment)
3) All the research I did leads me to think it’s a smart buy (Uber important! Please always do your research before investing in anything)
4) I love TJ Maxx stores. See? I really do believe in investing in companies you love.

Another fun thing about Robinhood? They give you free stock for signing up! Seriously. You can score a share of Apple or Microsoft for signing up. Robinhood chooses from the most popular companies on their platform and the stock can be valued from $2.50 to $200. As for me? Well, I didn’t fare that well. By that I mean Apple stock well. But I’m now the proud owner of one share of Zynga (ZNGA) stock (originally valued at $3.88). What’s Zynga you ask? They’re the makers of FarmVille and some other online games, but FarmVille says it all really. I mean I’m still waiting on those bricks I requested from my Facebook friends back in 2008.


In all seriousness, after reading up on Zynga it seems like a pretty cool company. Robinhood gives you the option to sell your free stock after it settles but I decided to hold on to it. It’s now in the $4+ territory, we’ll see where it goes. Who knows? Maybe I’ll even buy some more one day.

Another cool feature? Robinhood gives you free stock for inviting your friends. So please be a pal and use my share link if you’re thinking about creating an account. I promise to let you know what my free stock is. After all, I could definitely use some more shares of Zynga.

So far, I really like Robinhood. It offers all of the features I think I need in an investing app. Robinhood also offers ETFs, options and cryptocurrencies if that's your sort of thing. I plan on sticking with my straightforward "stocks I like" investment plan for the near future. I’m hoping I’ll be able to add a little every month and boost my stock holdings slowly but surely. Consistently making those transfers might be a challenge for me but I'm ready for it!

Is there any company you’re dying to invest in? Or have you had any success with small scale investing like mine? I’d love to hear about it!
QuickEdit
Broke Dolly
0 Comments
Share This Post :

You Might Also Like

No comments:

Post a Comment