The stock market is in the news everyday. Any financial blogger will tell you the key to building wealth is to invest. But how?
The market seem like a hard area to get into. You could open a brokerage account, but most of the time you need to have a large sum of money to start with. Plus they normally charge fees.
There are a world full of apps out there that you can invest with. Most of them have minimums for investing or charge fees.
I started investing easily with the Robinhood app.
While it is not perfect in any way I believe Robinhood is the best way to get started investing.
Invest for Free.
Robinhood is best known for its no cost to entry. There are no minimum deposits, no fees, and is completely free to use. You just need to hook up your bank account and you are ready to start investing.
So how do they make money?
Robinhood uses idle investors cash(money that the trader has not yet invested) in interest bearing accounts. They keep the interest made off of these funds.
Robinhood also has paid premium accounts. This gives the trader an extra $1,000 of margin for $6 a month. Robinhood also charges interest on these margin borrowings.
Robinhood is simple. This can be both good and bad. While it is good for beginners who might only need market buy/sell and limit buy/sell, the more experienced investor might want more features and options.
The experience on Robinhood is purely: search for what you want to invest in, select how much you want to invest, watch your investments performance.
As far as researching goes Robinhood doesn’t have much. Each company might have some small analytics and recent popular articles to brows. For research I recommend using a different platform. Seeking Alpha is a personal favorite of mine.
Where Can You Invest?
The biggest disadvantage to Robinhood is the limited exchanges and investments an investor can make. They only have the option to invest in U.S. Exchange listed stocks and ETFs, option contracts for those stocks and ETFs, Cryptocurrencies, and a little over 250 Globally listed companies.
This is almost better for the beginner. Without a ton of options it forces the investor to focus on a few places to put their money. While this isn’t ideal for those looking for extremely diverse portfolios, it is great for those getting started and those wanting to start building wealth.
By far one of the best things Robinhood has going for it is the referral program. Basically you get a link. Anytime someone uses that link to sign up for their account they get a free stock along with the person who shared the link. Most of the time the stocks you get would just be a couple bucks in value but it is a great way to get free stocks and help others start their investments.
If you don’t already have an account sign up here.