If you are like the Smart Fi household, after the bills are paid, there may be little more than pocket change left over. Mortgage, utilities, groceries, auto loan, and college savings.
Note: You will earn a free share of stock when you open an account with Robin Hood by clicking on my link. Claim your free share of stock.
Do these expenses sound familiar. That is because almost every home in America has some form of these expenses. These are pillars of the proverbial hamster wheel. That vicious cycle where you go to work, make money, pay bills and return to work to make more money. The key to breaking that cycle is taking that pocket change at the end of the month and putting it to work. Make that money work for you. Think it like this. Every day you lace up your shoes to go work you have an alternate form of you going to work also. That is your investments. Once you reach critical mass, it is not uncommon for your investments to out earn your real job. It blows my mind to think that my investments could earn more than my W-2 income in the future.
Welcome to Robin Hood. My favorite place to go to buy stocks or ETF’s (a mutual fund that trades like a stock). Robin Hood is a beautifully elegant smart phone app found in the Google play store for Android or in Apple App store for IPhone. Once you have loaded the Robin Hood app to your smart phone, you need to set up your account. This set up process was quick and easy. You will need to link a checking account to Robin Hood as this is how money will be transferred to your account. And you are all set to buy and sell stocks or ETF’s. The greatest feature of Robin Hood is that it is literally FREE to buy or sell stocks.
Maybe you have $50 or $100 dollars left at the end of the month. In the past you could go to a Charles Schwab or Fidelity brokerage with your pocket change. You would pay a purchase commission in the $5-10 dollar range. That commission really starts to add up and eat away at the value of investing small sums of money monthly. I have always liked to keep my purchase commission expenses to less than 0.5% of the money I am investing. For example
$100 invested with a $7 purchase commission would be 7% charge for the stock purchase.
This is substantially above my 0.5% commission I like to stay under. Robin Hood has no trading fee or commission. Absolutely free. I am a skeptic by nature. When something says free, my radar usually lights up. But I have been using Robin Hood as my taxable investing brokerage for almost 3 years and have never paid a commission. I have been able to grow this account to over $17,000 in just under three years by putting my pocket change to work. Granted, part of the reason my account has grown so handsomely is due to the fantastic bull market we are in. This account could take a hair cut with a down turn in the stock market due to 100% stock allocation.
Down sides to Robin Hood
There are a couple of small down sides to Robin Hood that are worth putting up with in my opinion.
- No actual website. Currently trading is only available through a smart phone app. Robin Hood is supposed to launch a full featured web trading platform in 2018.
- Customer service by email. I have only had to use customer service once. When I needed customer service there was no one to call. This was a minor inconvenience.
- No research ability. If you like to geek out on charts and statistics Robin Hood is not for you. Currently there is no ability to research stocks or see analysts recommendation for a stock.
These are minor inconveniences for me. Especially since I mostly buy low cost index funds. VTI (Vanguard Total Stock Market Index) is my ETF of choice that I buy in my Robin Hood account. I do own a few shares of Apple and Microsoft but primarily stick to low cost index funds.
If you feel like Robin Hood brokerage could work for you, use my link and Robin Hood will give you a free share of stock just for opening an account. Robin Hood Free Stock offer.