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Whether you have a few hundred dollars or more, or even just $100 or less, Robinhood is a great place to start investing in the stock market, in my opinion. It’s a very user friendly brokerage. I started investing with Robinhood and I still use it for trading some stocks. I do have other stock investments in a different brokerage as well, but Robinhood has always been easy to invest with.
Here are some key points on Robinhood:
- No Commission Fees
- User Friendly Interface
- Less Features than Other Brokerage Services
- Still One of the Best Options for Beginners
- Abundance of Stocks and ETFs to Choose From
You can learn more by reading below, or skip ahead to the set up section.
One of the main reasons I recommend beginners start with this option, is because there are no commission fees. It’s free to trade stocks with Robinhood. All other brokerages that I know of have some type of commission fee that they charge when you buy or sell stocks. Therefore, if you only have $100 or less to start investing with, it doesn’t make much sense to use a broker that charges you $5 or so just to invest in a stock.
You can gain an abundance of experience with Robinhood alone, without worrying about losing money on commission fees. Now, you might be thinking why doesn’t everyone just use it? Is there a catch?
Well, there isn’t really a catch, you’re just limited to how you can invest. Brokerage services that charge you commission fees give you extra features and options when trading.
For instance, you can’t day trade, and currently, you can’t do options trading with Robinhood. They do however, have plans to release free options trading starting early 2018. Therefore, you’re limited as to what you can do with Robinhood compared to other paid brokerage services.
Nonetheless, Robinhood is still great for beginners! You can invest in any stock that’s available and as much as you want. They even have some ETF’s to choose from.
Now that we have some background info out of the way, let’s start this guide to set up your Robinhood account and start investing!
Set Up Robinhood:
Step 1: Download The Robinhood App
All the trading is done primarily on the Robinhood app. It’s available on the App Store for iPhones and the Google Play Store for Android phones. You can download it here, if you download and setup Robinhood through this link, you will receive a random free stock as well! 🙂 Who doesn’t love free stocks!
Step 2: Sign Up With Your Information
Robinhood will ask you a good amount of personal questions when you register. Don’t worry your information will be safe though. Most questions are required by law for any brokerage service to ask. You can follow along with these steps in the app as shown in the pictures below.
Once your app is downloaded you can go ahead and go to it and sign up. You will see a screen similar to this.
Go ahead and click “Sign Up”
You will also be asked for your social security number. This is also required by US Federal Law for all brokerages as it will state on the app, so no need to worry. Once, you fill this out you can review and then submit your application.
It used to take a few days to get your account approved, but now it can be approved in just a few minutes. So keep a lookout for an email saying that your account has been approved.
Step 3: Connect Your Bank Account to Add Funds
Next, it will ask to fund your account, this is where you can connect your bank account and transfer an amount from your bank to your Robinhood account. There is no minimum needed to start trading and there are no fees to transfer your money as well. If you would like to wait to do this, then simply click “Continue” and then “Skip” at the top right hand corner.
Step 4: Get Familiar With Robinhood
Congratulations! You’re all done with the setup! Now, you can familiarize yourself with app, watch stocks and see how they perform and add more to your watchlist. You can access your Robinhood settings by tapping on the logo on the top left of your screen. If any of the stocks you find interest you then simply go to that stock and there will be an option to buy the shares of it.
You can swipe left or right on the announcement notification on the bottom and then, if you choose to, you’ll see an option where you can add funds to start trading!
Step 5: Start Investing
The Robinhood setup is all complete. If you’ve added funds to your account, you can begin investing. I would recommend doing some research before investing in any stock. Most likely, your safest bet when you’re looking to start investing, will be in bluechip companies.
These are pretty much big companies that have been around for a while and they’re not going away any time soon. Some examples of these are Coca-Cola, Disney, Apple, Goldman Sachs and such. I personally started with Apple had made some pretty nice beginner gains.
If you only have $100 or less, try to look up some companies that have a stock price below what you have. Here are some examples of some well known companies that are less than $100 per stock that also might be worth a buy.
Stocks under $100:
- Microsoft (MSFT) ~$89
- Bank Of America (BAC) ~$31
- Twitter (TWTR) ~$25
- Ford (F) ~$13
- General Motors Co. (GM) ~$44
You can start by looking at these companies and doing some research or another one that you find interesting. To avoid losing a significant amount of money, take a look at these additional tips.
- DO NOT blindly invest, do some research first
- DO NOT day trade (buying and selling a particular stock on the same day), you will get warnings from Robinhood and they can lock your account
- DO NOT invest in penny stocks
Well there you have it, you’re all set to start investing in the stock market! Start looking up some companies that come to mind and maybe buy some shares!
If you’re new to investing and would like to learn more, I recommend taking a look at these posts below as well to get some good foundational knowledge down.
I hope you enjoyed this post and found it useful. Feel free to leave a comment if you have any questions or anything, I’ll be glad to address them! Also if you enjoyed reading this, then consider subscribing to Parhelia Finance’s email list below and sharing it on social media!