Robinhood: one of the best investments I’ve made so far
When I made my first-ever investment just under a month ago, buying 2 shares of AT&T for a total of $84.92 on the afternoon of July 10, I had an idea what type of companies I wanted to invest in, but no clue which one(s) would ultimately be the best in the long run.
I’ve since bought more shares of AT&T while pouring the remainder of what is now an almost-$3,000 portfolio into a combined 20 other companies. I’m happy with what I’ve done so far (see my previous posts for a refresher), but, if I’m being honest, I don’t consider any of them the best investment I’ve made so far.
Other than the decision to start investing in the first place, the best investment has been my decision to use the Robinhood app for all my wheelin’ and dealin’. Honestly, Robinhood has been incredible … and I’m not getting paid to say that.
Robinhood’s not getting paid, either. Technically, I guess Robinhood is getting paid … just not by me. It makes its money on the interest from the cash in its users’ accounts, so I’ve been told. Frankly, though, I don’t care how it makes its money just as long as it continues to allow me to invest without rediculous brokerage fees biting big-time chunks out of my returns.
The app itself looks great and, at least in my experience, is just as easy to navigate as it is easy on the eyes. It does what it promises – enables you to make commission-free trades – and does it well. Robinhood is a must for first-time investors like myself. Aside from the money you need to by the stocks, and a plan, I’d argue it claims the third spot on the list of must-haves when jumping head first into the world of investing.
As you can probably conclude from the last few paragraphs, I’m not a very good spokesman. It’s a good app. I like it … and it’s free. That’s pretty much my take on it. That said, I’ll stop rambling and let the numbers carry this to the finish line.
Why is Robinhood the best investment I’ve made so far? Here’s why:
I’ve placed 34 buy orders and seven sell orders for a total of 41 transactions, none of which cost me a cent. I know 41 orders is a lot for a portfolio of 21 stocks that’s not even a month old, but, as I’ve pointed out plenty on this blog, I’m learning. At this point, learning as much as I can about the ins and outs of investing is way more important than making any money. My tinkering would have cost me a cool $325.95 ($7.95 x 41) if I did it with a traditional broker. Instead, I didn’t pay a thing.
Robinhood will continue to payoff in the future too. Of the 21 companies I’ve invested in, I own more than one share in exactly five of them. I’m not a rich man … yet. I don’t have an exuberant amount of disposable income to throw at this thing. Like I’ve mentioned in previous posts, $250 per paycheck ($500 a month) is what I feel comfortable with now. As I add to my positions, I’ll be doing it in small increments. A few shares, sometimes just one or two depending on the company, is all I’ll be able to buy with the $250. Not having to pay anything for the purchases is huge.
For perspective, if I were using a traditional broker, the $325.95 I would’ve paid would equate to more than an 11-percent transaction fee. Talk about killing your returns.
Robinhood has done the exact opposite. Instead of killing my returns, the company has given my initial portfolio a chance to actually amount to something.