I’ve been meaning to sit down and write a Robinhood App Tutorial for awhile now. The Robinhood App is alluring to a lot of beginner investors due to it’s no-fee stock trades. If you have no idea what that means because you’re a complete Noob–don’t worry, we all were there at one time.
Almost every stock broker (Schwab, TradeKing, TDAmeritrade) charges a fee anytime you buy or sell a stock. The prices can differ between brokers, but it’s usually around $9.99+ per trade. When you’re just starting out, a lot of times you don’t have a lot of capital (money) and you end up taking a big chunk out of your money every time you buy/sell. Once you get rich and can start doing trades in increments of thousands, the price doesn’t effect you as much but when you’re just starting out, it hurts. That’s where the Robinhood App comes in:
First things first. You have to have a smartphone. The Robinhood App currently supports Iphone and Android devices. It currently doesn’t have a web app, so you’re going to have to do the ordering on your phone. There’s also some Account requirements below:
- Be 18 years or older
- Have a valid Social Security Number (not a Taxpayer Identification Number)
- Have a legal U.S. residential address
- Be a U.S. citizen, U.S. permanent resident, or have a valid U.S. visa*
You can read all the requirements here.
Step 1: Download the App – Yep, you should have known this was coming. Go ahead and open the Apple or Play Store on your phone and download the Robinhood – Free Stock Trading App.
Step 2: Follow the Steps and Enter Legal Information – Enter a username or password to login with along with your real First, Last Name and phone number. From here, more secured answers will be asked such as your Social Security Number (tax purposes), Address, Citizenship and Employment information. There’s some additional questions you’ll have to fill out truthfully as well.
Step 3: Fund your Account – You’ll have to link either a checking or savings account in order to deposit/withdrawal funds to Robinhood. For instance, I hooked up my main savings account that I have from Capital One 360 (affiliate). Before you can transfer money into your Robinhood account, they’re going to make two small deposits into your checking/savings account in order to verify the information is correct. This process takes a few days, so come back once that’s been done. Usually it’s a few cents for each of the two deposits. Confirm the amounts in the App and you’re good to go. Go ahead and make your first deposit in to your Robinhood account.
Question: How much should I deposit? That’s entirely up to you but the rule of thumb is only invest the money that you’re willing to lose. While most of the stocks I talk about here on Dividend Noob are safe long term, nothing is guaranteed and stocks can go up and down for any reason. With that said, make sure you did your budget and have an emergency fund for those times when you need spare cash. There’s also making sure you fully fund your Roth IRA and contribute to your work 401k, where applicable, but that’s outside the scope of this post. For more details, check out my post on How much Money Do I Need to Get Started Investing.
Question: What should I buy first? Slow down partner. Go ahead and read up on the stocks that interest you and make sure they’re right for you. There’s a plethora of sources to pull information from. I will say this though: Make sure you do your own research before buying a stock. Don’t rely on some random internet person. Trust but Verify goes a long way. If you’re entirely new, read up on the Dividend Aristocrats, Champions and Challengers.
Question: Why is this scary? The idea of losing money is always scary. You’re not exactly paying for something tangible that you can hold in your hands. Our goal here is simple: Buy High Quality Dividend Stocks that not only make us money in growth over the years, but also pays out a healthy dividend to us each and every quarter. Double-dipping like an ice cream, twice the fun.
If you’re interested in Robinhood (affiliate link to support the site), give it go. Hopefully this was helpful. See you guys next week.