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Investing. The word by its lonesome can be an incredibly intimidating and frightening venture for those that have never dipped into the stock market before. Robinhood has emerged as an easy-to-use application that makes investing incredibly simple.
The added bonus is Robinhood’s promise that there are no fees or commissions to deal with. At Frugalforless, we’re always highly invested in our readership finding ways to make an extra dollar.
So with the no added fees and the option to get a free stock just for signing up—it seemed to be time to review whether Robinhood was an app worth recommending for everyone to install.
Free Stock Investigation
The beginning experience, whether inside or outside the app, begins about the same way. Robinhood promises that you’ll get a free stock like Apple, Ford, or Sprint when you sign up for the app.
Overall, the install tactic bait begins with some big name drops from American company names that seem like they all should be worth a considerable sum.
At this time, Apple happens to be the only mentioned free jackpot as it presently sits at over one hundred dollars while the other two names sit at below ten dollars a share.
Before I review anything else on the app, I want to let you know that if you’re the type interested in a small, quick monetary gain, you can definitely achieve that with Robinhood’s free stock options.
As I entered the app with the sole intention of earning a free stock and investigating how the app filters information versus starting a serious investment portfolio, the free share worked effectively for this purpose.
I received a share of Groupon (GPN) worth about three dollars and seventy-one cents. To officially lay it out as Robinhood notes from their support page: “The value of the share may be anywhere between $2.50 and $200, and fluctuates based on market movements.”
Obviously, you can assume your stock is more likely to be towards the lower end of the spectrum in this game of chance.
Despite this, Robinhood will try to scratch the gambling itch with the free stock by reminding you throughout the app’s lifetime to invite more friends and get a free stock for you both.
Specifically, there are notification alerts and a few slides promising a 1 in 150 chance of getting GE, Energy Transfer, or Annaly Capital stock. This continues along with other familiar stock suggestions such as Snapchat, Facebook, Microsoft, and Apple.
If you are going to earn via this route, keep in mind that you’ll still have to report this earned income. Robinhood’s support page does explain how you’ll have to report it in a very simplistic matter, so if you’re doing your own taxes it’s a nice touch if that served as a fear inducing deterrent from trying the app out.
The last bit of information that you need to know is there’s a $500 limit on free stocks that you can possess, so if you’re a genius networker then keep in mind you can only possess $500 at a time before you stop receiving stocks for invites.
You can always sell your free stocks (albeit you’ll have to keep track of the increases and decreases for tax purposes later from the initial received amount) for some miscellaneous income once finished with the app.
The highest investment cost here boils down to your time spent using the app and submitting information. With that said, I wanted to briefly go over how registration looks and what the wait time is to get started.
Starting Your Investment Portfolio: Registration and Wait Time
The beginning registration for Robinhood begins in the fashion typical for all brokerages with the user entering their email, real name, phone number, date of birth, address, and citizenship for the application.
Due to the Patriot Act, you’ll also be required to submit your social security number.
Additionally, you’ll be asked to provide a copy of your social security card for confirmation to prove your identity before you receive a free stock once you’ve gone through the other introductory tidbits.
After the standard information, you’ll be asked about your investment experience with the options to pick none, not much, I know what I’m doing, and I’m an expert. The choice comes into play later with the option to go through a help topic for the unfamiliar.
The remaining questions ask if you’re employed, who is your employer, confirms you’re not doing any insider trading based off yes or no questions, and offers you the option to link your bank account in order to deposit funds later.
If you don’t want to link a bank account, you don’t have to immediately. The majority of big banks are supported by default, but you can enter in your smaller bank if needed.
Regardless, if you intend on withdrawing any funds from your Robinhood account if you happen to sell your free share, you’ll need to have an account linked.
Afterwards, your application is sent in and submitted to Robinhood. You can scan your social security card via the app in for a quicker allowance to get your free stock. To which, you’ll need one actual trading day for processing typically.
While you wait, you are free to explore the app though prior to receiving your free stock. At this stage, your investing experience choice from earlier will come into play. If you want to learn more, all you have to do is hit the pop-up choice.
For my own purposes earlier, I was honest and picked none for investment experience.
As a result, I received a pop-up in the app that gave me a very broad overview on topics such as reasons to invest, how much to invest, how to find an investment, price movement, funds (ETFs), earnings, and candlestick charts.
If you aren’t familiar with the particular specifics, it’s pretty informative in terms of dumbing it down for the average user.
If you should happen to need to review the information, the majority is still available on Robinhood’s support section along with some extra tidbits discussing the less advertised features such as investing in cryptocurrency.
It’s all very beginner friendly and basic, so you can understand the gist if you’re not prepared to be a day-trader.
From this point on, I was free to investigate the app. At first, I was a little intimidated to do anything with the application since the charts and numbers made me think I’d not off-hand understand the jargon. The design and breakdown actually makes Robinhood very easy to follow as a layman as I’ll discuss below.
Robinhood’s Investing: The First Hurdle
The nicest feature of Robinhood’s design process is that it’s simplistic and quick to maneuver through which makes it a great mobile app for a layman. The app is divided into three easy to understand icons symbolized by a line graph, magnifying glass, and a person.
The first icon stands for investing where the user will spend the majority of their time.
Until you receive your free stock or buy shares, the top information is empty along with the line graph as there’s no transaction to chart.
However, once you receive your share you’ll see a live update on it’s current cash value, whether it is trending up or down on the present day, and you’ll be able to look at the rise and fall of it over a day, week, month, multiple months, a year, or even longer.
Below this, you’ll receive some alerts along with the option to answer questions to personalize Robinhood to help project how you want to invest.
If you need to change your selections, you’ll be able to fix your personalization at any time. Following this, cryptocurrencies, your stock (once you get one), and the watch list of hot stocks will all appear with their latest price worth.
Beside each category (cryptocurrencies, stocks, and watch list), you can choose to change the display from last price to percent change, equity, total gain/loss, or total percent change.
Choosing to change one will change them all; it’s a very quick process to slide between when looking at multiple statistics.
For the most part, if you’re a free user like me you’re going to be focused on just looking at your one stock in question. Clicking on the stock brings up a slightly larger version of the line graph with a five-year option added and a candlestick chart option available to swap between additionally.
Beneath this, you’ll receive some basic information like how many shares you possess, the current value, the average cost, and how much diversity it adds in terms of how many stocks you own.
You can also see how much the stock went up and down today to see what your total return in money the stock value is. For instance, my stock started at $3.52 and went up to $3.59 at this time since it rose seven cents when the market opened. Additional statistics chart growth and loss on the stock in question while a set number of analysts also indicate how much they buy, hold, or sell the stock.
You can view reasons why you might or might not want to buy or sell the stock based off current market projections as well without ever having to talk to anybody.
Additionally, there are tags where your stock might be included, a fourth quarter chart indicating earnings, stocks that people who have your stock also purchased, and volatility value.
Volatility was the one item I wasn’t too sure of, so I did look up to confirm it’s the inferred risk in terms of the price swinging in one direction or the other.
In closing, the page tells you a bit about the company itself such as its CEO, headquarters location, when it was founded, how many employees it has, and a brief business description.
You can also see how many market shares are available today for trading. The chart option and the buy/sell option will be the most important bits for the average free user.
The additional bits of information are nice inclusions for anyone looking to get into more trading. While the information is nicely condensed, you can easily get much more technical direction if you desire with the application. With this noted, it’s time to go into the next and most time dense area of the app, the browse section.
Browsing Robinhood: Getting to Know Your Shifts, Categories, and News
Like with the investing section, the Browse Section of the app condenses all you really need into three sections. The top movers section at the top shows both percentage increase and decreases in the largest amount spread across twenty popular companies.
Following this, you can look at the 100 most popular shares, upcoming earnings, new companies, and a variety of other sorting categories based off the business field.
If you’re looking for quick market changes or just easy ways to locate similar companies, the collections option provides you with an easy list option that lets you live monitor the categories’ stocks all at once when deciding where to invest.
Additionally, if you’re more of the buyer type that needs to know more personal activities of the business and what actions are going on then you can follow recent news.
The news category makes up the majority of the scroll space on the browse tab and redirects users to the associated news websites where they can read exactly what it going on with companies in general.
As the last item of note, you’re able to search for companies and categories by click the magnifying glass icon.
You can opt into following companies on and off your watch list easily here while searching by click the plus and minus options respectively here or even on their company page if you want to investigate deeper.
If you’re ready to do some more research, it’s a very nice simultaneous search engine that lets you do a lot of legwork together.
With this features noted, it’s time to move onto the last section and discuss the tab dedicated to the user.
Robin’s Hood Total Value & Miscellaneous Support
The last section focuses on reminding the user of the total value of their current shares and other such currency and allows for basic account management for the app user.
For the most part, it serves to remind the user of their money, link a bank, and to transfer money between the app and the bank itself. Additionally, there’s the option to tweak security (PIN password, fingerprint scan), enable two-factor authentication, and adjust the way you get notifications.
Sadly, for the average user there’s not a way to decrease the notification number directly, but they’re mostly pretty reasonable and just keep you posted of share changes to prevent needless and an obsessive amount of app checking for the casual user.
The security features are also very nice as you can layer as much security as you need between a four-digit PIN, a fingerprint scan, to a digital code on any sign-in that must be entered.
Additionally, you can access your share history that is useful for tax purposes if you’re not the type to screenshot or record everything.
You can also review basically information that’s provided for new users again. For any additional information, Robinhood does link to their help center out of the application. It’s all very necessary information that’s presented again in digestible fashion regardless of where you source it.
As a broad overview of your account and pertinent information, the last tab does a lot to keep you grounded within the application. With this said, I want to go over some closing remarks on Robinhood.
Wrap-Up on Robinhood’s Financial Worth
For once, I really have no complaints and feel that any low investment threshold users can get a lot out of Robinhood. Also, a quick search surprisingly brings positive reviews such as a 4.5 rating from Nerdwallet and a 7.5 rating from Investorjunkie.
As someone used to most free options for finances being hated or near fraudulent, it was nice to be as surprised as other sites were about the worth of this app.
If you’re new to investing and looking to just dip your toe in while making a small bit of miscellaneous income, Robinhood is definitely the app to look at.
As long as you’re not expecting a guaranteed crazy sum of cash and keep realistic expectations, I can easily see Robinhood inspiring a few more people to invest by its no fee advertisement.