Investing in the stock market can be another way to create an additional income stream. Don’t be intimidated. You don’t have to be rich or have tons of disposable income to get started. Start small and start now, and slowly but surely, your little investment will grow.
What is Robinhood
Robinhood is an app first investing platform. It’s different from the traditional platforms which require purchases of whole shares in stock to get started. With Robinhood, you can purchase fractional shares. A fractional share is when you own less than one whole share. Fractional shares allow you to invest in stocks based on a dollar purchase amount ($10 of Apple stock) instead of a number of whole stock (1 share of Apple, which is currently $143). Buying fractional stock allows you to get started with investing with very little money making stock ownership within reach of everyone.
Getting started
First up, a note. Do not invest any money you can’t afford to lose. Investing is mostly a long game. Count on not having access to this money for years. You don’t want to invest money you may need next month because you may lose money selling your stock at a loss. So again, do not invest money you can’t afford to lose.
Depending on your current income, put aside a bit every pay for your investment hustle. It can be as little as $10 a pay. Robinhood has zero membership fees and no minimum to open your account. All you need is to be 18 years or older, have a valid Social Security number, a U.S. address and a bank account to fund your Robinhood account.
After opening your account as a newbie investor, try to stick to traditional stock and EFT to get started. Robinhood’s easy-to-use interface is one of its strengths for new investors. You can easily search by brand names for stock like Apple, Coca Cola, Microsoft, etc.
Robinhood pros
Robinhood is excellent for beginners. The low fees, no minimums for opening an account, and easy-to-understand interface are winners. Robinhood also saves investors money with no trading fees or commissions, so more of your money goes into stock purchases instead of fees – an important feature for newbies starting with limited cash. Robinhood also offers free crypto trading of the more established coins if you want to try a bit of crypto trading.
Robinhood also offers a free debit cash card that earns rewards and also allows you to “cash sweep” into your investment account.
Robinhood cons
Robinhood is an excellent investing app, but it may not be for everyone, especially more advanced investors and crypto traders. It offers a limited selection of crypto coins, so riding the wave of a new crypto offering is a no go on Robinhood. The platform also lacks bonds and mutual funds, making it difficult to build a fully diversified stock portfolio – the safest way to invest long term.
Robinhood’s stock research is also lacking for experienced investors. The education and research available is mostly geared towards beginners and not for investors looking to do a deep dive will be disappointed.
Robinhood is an easy way to get started with investing. It removes all the common excuses: not enough money, too hard, too confusing, etc. Robinhood makes it easy and cheap to get into the market, for everyone. Don’t forget to stop back to read my stock buying tips for newbies!
