Investing is something that many people want to get started in, but with so much to learn, it can be difficult to know the first step to take in order to start growing your money.
This is why beginner friendly investing platforms like Robinhood can be a great place to start your investing journey. It can help you learn the basics and become more comfortable with the entire process.
In this article, we will examine the Robinhood investing app so you can see if it’s a great fit for you, whether you're a beginner or advanced investor.
What Is Robinhood
The popular Robinhood investing app is a commission-free investing platform that makes getting started nice and simple.
It allows you to make unlimited commission-free trades in stocks, ETFs, and options. You can even buy and sell cryptocurrencies if that’s what you specialize in.
Robinhood helps you to “get some skin in the game” as they say. This means you can jump right into investing and easily begin growing your knowledge.
Is Robinhood Reliable
The Robinhood app is one of the most popular investment platforms on the market. It’s used by young and old alike.
The app has over 935,000 reviews with the overwhelming majority being 5 stars. The app is nicely designed and easy to navigate.
Robinhood is also a member of the SIPC which means that the securities in your account are protected up to $500,000.
So you can breathe a sigh of relief if you were ever unsure about using Robinhood to make your money grow.
How Much Does It Cost?
There is no money needed when setting up your Robinhood investment account. This means you can have a balance of zero to get started.
This is perfect for those who want to check out the app before putting any money into an account.
And it takes the pressure off of you which helps you to make better decisions when it comes to investing your money.
Robinhood Gold Plan
If you're someone who would like to take advantage of more advanced features on the Robinhood app, you have the choice to go with the Gold Plan.
This plan costs $5 a month and allows you to access research reports and trade on margin at a rate of 2.5% annually.
The Gold Plan also gives you bigger instant deposits which allows you to access $5000 to $50,000 when you make a deposit depending on your balance.
This plan also gives you access to level 2 market data which helps you see multiple bids on a stock to determine the demand for it.
Robinhood Features
There are a few awesome features that come with the Robinhood app. What makes it better is that they are free as well.
You can trade with any amount you choose which is great for those more experienced investors.
Claim a Free Stock
Right when starting out with Robinhood, there is a 100% chance that you will get a free stock. The price of your free stock can vary.
There’s a 1 in 20 chance to win a high priced stock like Visa, Microsoft, or Apple. These stocks can be valued from around $134 all the way up to around $222.
There’s also a 1 in 250 chance of getting a free valuable stock like GE, Kinder Morgan, or Zynga.
The majority of people win a free stock that’s valued at $10 or less. This is a great way to get started in investing by receiving free money.
Trade In Real Time
Robinhood places your trades immediately allowing you to see the changes in real time. Trades executed during market hours are made at that time.
This guarantees that you’re not paying a higher price for a stock since stocks can go up if a platform were to delay your trades for any reason.
Build a Balanced Portfolio
Robinhood allows you to diversify your portfolio with a number of different companies. This helps you to spread out any risks that come along with investing.
Having all of your money in one stock can put you at risk for losing more if that company should perform poorly.
Diversification of your stock portfolio is a great way to start building a solid investment history.
Buy Fractional Shares
There may come a time when you are interested in purchasing a stock like Amazon, but you don’t want to pay the entire price for it.
In this case, purchasing fractional shares can be a great alternative. This allows you to purchase a certain percentage of a stock saving you money.
This makes getting involved with those high priced stocks possible for the average investor.
You can get started with trading fractional shares for as little as $1. This is a great option especially for beginners.
Robinhood Debit Card
Along with investing, you can also obtain a Robinhood debit card that can be used at over 75,000 ATMs.
This debit card can be used anywhere MasterCard is accepted. Being that some businesses don’t accept Mastercard, it’s important to see if this debit card will serve your personal needs.
Earn Interest on Uninvested Cash
There may be times where you have money sitting in your Robinhood account that you're currently not investing.
This money will automatically grow for you at a rate of 0.30% APY. The banks associated with Robinhood pay interest and so they pass that interest on to you.
No Hidden Fees
You will not have to worry about recieving any random charges while using Robinhood since there are no hidden fees.
This includes no overdraft, account minimum, transfer, or foreign transaction fees.
This is a plus when using the Robinhood investing app and can put you at ease as a new trader.
Help with Taxes
The Robinhood app allows you to download your tax documents and will also show you how to upload your 1099 form directly to Turbo Tax.
They also help you with a ton of common tax questions that many people have to help comply with federal tax laws concerning income earned on investments.
Competitors
Some alternatives to trading stocks with Robinhood are platforms like Stash and M1 Finance.
Acorns also allows you to invest spare change automatically, which can be a great set it and forget it solution.
When it comes to ease of use, Robinhood may be the best route for new investors looking to get their feet wet.
If you're interested in more features including, banking, barrowing, and tracking your money, check out our investing section to find the perfect fit for you.
Robinhood Pros
- Great for beginners
- $0 minimum balance
- Free stock upon sign up
- Buy fractional shares
- Assets protected up to $500,000
- Trade Cryptocurrencies
Robinhood Cons
- Less features for advanced investors
- Lacks free research features
- Lack of educational support
Investing Risk
With any type of investing comes the risk of losing money as well. It’s important to gain as much knowledge as you can while starting your investing journey to grow your portfolio.
Starting off with small investments can be a great way to get accustomed to whatever platform you choose to go with.
Stock Analysis
There are awesome websites like Morningstar that provide up to date news on stocks, ETFs, and much more.
Utilizing these research platforms can save you a lot of time and money as you start to take your investing seriously.
Long Term Investments
You may often hear of people getting involved with day trading and other ways to make fast money from the stock market.
While a small percentage may be successful, the overwhelming majority fail at it. It’s much safer to keep a long term outlook with your investment tragedy.
With a range of stocks that have a history of good returns and a diversified portfolio, you can see your money begin to grow month after month and year after year.
Trying to gain quick money with anything tends to lead to making poor decisions that can set you back financially many years.
Consistent Investments
An awesome way many people choose to invest is by allocating a certain amount of money each month specifically for their stock portfolio.
This helps you to be consistent in growing your diversified assets. Also having a long term outlook allows you not to feel the need to check your updates every 30 minutes.
Many people have money automatically put into an investment account when they get paid which forces you to grow your assets.
Conclusion
Whether you're a beginner or an experienced investor, Robinhood can be a great tool to make your finances work for you.
It’s free to get started with and there’s no hidden fees or minimum account balances needed. If you need more features, you can sign up for the Gold Plan which is only $5 a month.
With millions of users and no money needed to get started, it’s one of the best investing apps on the market.
So it may be worth grabbing your free stock and looking into the popular Robinhood investing app to start growing your money today.
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