Get a free share of stock from Robinhood for New Signups & Referrals

Robinhood App now offers a free share of stock for New Signups & Referrals

Robinhood App the free stock trading app that I’ve used for my portfolio and reviewed last year has a new promotion making some unique headlines. Now for every person you get to sign up with the broker Robinhood, both you and the person who signed up, get a free share of stock.

What Stocks Do You Get?

It appears to be a randomized assortment of stocks from the messages posted on social media. Robinhood states that the stocks range in value from $3 – $150, so you could technically get a share of Apple (AAPL) randomly if you sign up now, or you help a friend signup.

What Are Your Chances of Getting $175?

Depends, how lucky are you? Like REALLY lucky. You have a 1% chance of getting a stock valued at $175. Reading the fine print on their website you’re most likely to get a $2.50-$10 stock.

Here are your chances for a free share of stock when you sign up.

  • 98% of getting a stock valued at $0.50-$10
  • 1% of getting a stock valued at $10-$50
  • 1% of getting a stock valued at $50-$200

Thanks to Social Media, we have an idea what it looks like.

So get all your friends to sign up?

For everyone you get to sign up, both you and your new sign up friend get a free share of stock. All you need to do is use the referral code that Robinhood gives you.

If you’ve been with Robinhood for a while, this is the same referral code you’ve always had. Now there are just perks for you to refer a friend to Robinhood.

Here click on my referral code (http://share.robinhood.com/andrewk48) to see what it looks like. You don’t have to sign up.

However, if you’re someone like Kim Kardashian who can get ONE MILLION people to sign up, you won’t get $1M free shares of stock. You’ll be capped at $500 worth of stocks no matter how many people you refer. Lame I know.

Is this promotion available to anyone with Robinhood?

It started off a few months ago. I was NOT one of the early testers for this. However earlier this week I saw on my Robinhood App that I’m NOW able to this. I’m not sure what changed. If everyone is able to do this now or what (I’m not special). They must have just opened this up to a much wider pool of users.

If you’re curious if this works with your Robinhood referral code. Go to your app and if you can’t find “Free Stocks” in your sub menu. You’re not in the program yet. Maybe send the Robinhood App people a tweet (@RobinhoodApp) and say “Hey, can I join this super cool referral club like @WalletSquirrel”. I’ll retweet for you.

 

Should you feel comfortable referring friends to Robinhood?

If it helps, I refer all my friends to start investing with Robinhood. It’s a great broker to start off with (one I personally use) because there are $0 fees to start buying stocks and all of their securities customers are insured up to $500,000 by the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).

Also keep in mind that Robinhood recently raised $110M in Series C round of fundraising, which they’re valued at $1.3 Billion. Some of the investors working with Robinhood are Google Ventures.

These guys are growing and they have the support of some major players in the game.

This promotion makes Robinhood worth considering

If you’ve ever considered the stock market, you should do some research on Robinhood because not only are you going to get free trades while using their app, you’ll start off with a free share of stock that could be Apple.

This isn’t on our list of ways to make money, but maybe it should be.

3 Reasons Why Monthly Dividend Stocks Are Better than Quarterly

When I recently sold $6,000 of my portfolio, I kept 2 stocks. These were Verizon (VZ) and Realty Income (O).

I choose to keep Verizon because they were in the process of picking up Yahoo and the stock was tanking because there were strikes and other internal issues with Verizon’s business. However while the stock went down a few dollars, I’m confident they are coming back.

The other stocks Realty Income, has always been one of my favorites for several reasons. First they are a REIT (Real Estate Investment Trust) and they own the land under businesses that aren’t getting disrupted by Amazon yet, like Dollar General, Walgreens and CVS. SECOND, is they are known as the “Monthly Dividend Company” because they produce monthly dividends.

There are a lot of companies that produce dividends (why I love them), but receiving dividends monthly is pretty awesome!

Why Monthly Dividends Stocks are Awesome!

  1. Monthly Dividend Stocks are way easier to budget for – If you’re waiting quarterly for those dividend checks, you’re forced to budget that income for the next several months. A lump sum you have to let sit in your bank account tempting you to spend it. No matter your willpower, you’ll always be thinking “I’d be willing to eat Ramen Noodles for the next month if I bought a boat right now”. You’ll be the most sodium rich sea captain. You’re better than that.
  2. Better Compound Interest – If you’re receiving dividends every month, you can use that to reinvest in more stocks and have those dividends grow more by the time your other quarterly stocks arrive. Simply, the faster you reinvest those dividends, the faster they’ll compound interest. For Example, if you owned 1000 shares of a $10 stock at a 5% annual dividend. At the end of the year you’ll have earned 5% at $500. However if you received monthly dividends, you could reinvest those dividends each month and have earned 5.12% at $511.62. This is assuming you have a DRIP campaign set up. However it’s obviously more, and that’s only one year.
  3. It’s enjoyable seeing regular income – There is something incredibly satisfying as an investor seeing their investments create monthly income. It feels like you’re earning extra as your stock price fluctuates, you’re still seeing income being produced. You can reinvest or spend that monthly income but it gives you extra cash each month to play with.

What Type of Companies Produce Monthly Dividends?

You’ll mostly find monthly dividend companies limited to Real Estate Investment Trust, Business Development Companies and sometimes Master Limited Partnerships.

Real Estate Investment Trust – is essentially a company that owns multiple properties and generates income based on those properties. They can specialize in different real estate niches such as commercial property, apartments, office buildings, hospitals, etc. Each REIT usually has a specific focus and most produce dividends.

Business Development Companies – are organizations that invest in small to medium-sized companies to help them grow in pivotal stages of their development. Their income is made up from their investments in companies.

Master Limited Partnerships – are organizations that generate predictable income streams based on production/processing/storage and transportation of depletable natural resources.

Are you invested in any monthly dividend stocks? Tell me about them.

Income Report – August, 2016

As I start ramping Wallet Squirrel back up, I’m reminded that no matter what I do. There are some passive income strategies that keep earning me money. So dear passive income. Thank you.

August-2016,-Dividend-Monthly-Income-Report-Infographic

Let’s talk Double Cash Back Credit Card

During a recent Entrepreneur Meet and Greet in Denver (yes, I go to these). It was pointed by a fellow entrepreneur who read my blog (eek, people read this) that we should clarify good and bad ways to use a credit card.

See, I pay off my entire credit card debt daily, since I paid mine off in 2015. So I treat my credit card like cash. I know that I am going to HAVE to pay it all off the next day so anything that I’m willing to pay cash for, I use credit. Mainly just for the 2% cash back.

It was pointed out though, that some people may not know this difference and could continue their spiral of debt. I’m obviously not condoning this. Only use a credit card if you have good credit card habits. It’s easy to say you’re getting 2% back with a credit card, but things still cost 98%.

Moral of the story. It’s hard to say my 2% Cash Back Credit Card is a sort of passive income. Especially if I’m using it to buy wants like Colorado Rockies Tickets. However, a majority of the time I use my Cash Back Credit Card on purchases I’m going to make anyways, so I consider it passive income.

Monthly Goals (I HATE monthly goals)

I have a bad habit of not liking being told what to do. Once I write something down, I’m telling myself to do something and sometimes that’s a bit much. Especially when the guilt of failing a to-do list is a lot worse than actually accomplishing something. Maybe I’ll rename this “Some things Andrew, could maybe do in the future, if he wants”. Catchy right?

  1. Write 2 posts this month on how to earn additional income. That’s what this site is about and let’s get down to the roots.
  2. Comment on 70 blogs. I came to this number because I have 70 blogs on my “To Read” list. Let me know if you want to be on this list.

Robinhood App Review: I saved $420 in trading fees in 6 months

Summary: In short, I have saved $420 in trading fees in 6 months (calculations below). I tested the new Robinhood stock trading platform, since September 2015. This article is a personal summary of the headaches and “fucking awesome” moments that I yelled out loud the past couple months. Let’s face it though, you hate trading fees and you’re curious to see what all the hype is about with the new Robinhood App.

robinhood-logo

What is Robinhood?

Robinhood’s biggest claim to fame, it has $0 trading fees. I said that right. The average trading fee is $7-$10 per trade and Robinhood said screw that! Traditional brokerages make SO MUCH MONEY, that Robinhood formed a different business model where they don’t make money on their trades (I’ll explain how their make dough in a bit)

You’ll first notice: You’ll always see Robinhood called the “Robinhood App” because it’s not a traditional brokerage with a website, it is purely only an app. This is one way they keep their costs down, but also because their target audience is millennials. Robinhood specifically target new millennial investors usually around the average age of 24. Those who are starting out with little money, who can’t pay trading fees but want to start investing in a simple way.

It’s open to everyone: Everything I read on Robinhood talks about their waiting period. I didn’t encounter that at all. I simply downloaded it on my android phone (originally built for Apple, but works on both) and signed up. They make it easy.

How Robinhood makes money

If you ever want to understand a company, understand the way they make money. Nike and Gap use child labor to make a higher margin. I’m not here to judge, just shining an example why should know the fundamentals of how profits are made. Let’s take a look at Robinhood’s.

Robinhood makes money by:

  • Collecting Interest from the cash you have lying in your brokerage account that isn’t invested. For example, if you have $900 in your account and are waiting for stock prices to come down, traditional brokers are gaining interest off that $900 like a savings account. Some brokerage accounts give some of this back, but Robinhood keeps it. You won’t lose any money, but you just won’t gain anything extra from un-invested cash. So invest it!

Most electronic trading firms pay little to nothing to place trades, but individual investors are getting taxed up to $7 – $10 per trade. Robinhood saw this as an opportunity.

Robinhood App Review: My experience

Signing up: Pretty simple. I downloaded the Robinhood App from the Google Play store on my android phone. You will fill out the same info you would open a bank account. You will have to give your social security number, so be warned, but this is the same info you’d give to any brokerage account. It just feels weird because you’re doing this all over a phone.

Once you register and sign in. You don’t have to use your email and password every time. You can set up a 4 digit pin for security in case you lose your phone.

Connect your bank account: Everything is electronic, so you need to connect your bank account. Both traditional brick & mortar banks, as well as virtual banks, will work. I connected both my Wells Fargo account and Ally account. Keep in mind, when you sign up, you won’t be able to trade right away. There is usually a 5 business day waiting period once you sign up. This is usually just for Robinhood to verify that your money (a few cents) can be sent to your bank and back.

Is it weird doing everything over an app? There is definitely an adjustment period where you need to get comfortable trading over the app. I’ve never traded over anything else, but it turned out quite easy. There are not many buttons and it’s straight forward.

  1. Search for your stock ticker
  2. There is a large buy button, click it
  3. There is a verify screen, where you must swipe up to verify. This removes people who accidentally double tap from making mistakes.
  4. Done.

Here is a look at what the Robinhood App looks like.

Robinhood App Review - Screenshots-01

What I like about the Robinhood App

In the last 6 months, I have done 60 trades. These were a majority of buys and averaged around $101.23 per trade. I prefer dividend investing. So when I have an extra $100, I want to invest that immediately, because the longer it’s invested, the more it’ll make. Traditionally I would keep that $100 in my savings account until I had $1,000 or so to justify a $7 trading fee. Now I just buy stock immediately!

I can do this at my desk at work. I receive a notification from Robinhood that HCP has decreased 10%, I can open up the app and buy 2 shares of HCP faster than I check Facebook (Facebook is addicting). I don’t have to think about the cost/benefit of paying $7 to do this, it’s free! In the total span of 60 trades in 6 months assuming a the minimum fee of $7 I have saved $420 in trading fees. Awesome right?

What I don’t like about the Robinhood App

  1. The biggest issue with Robinhood is the three business day wait period. If you transfer money to your Robinhood brokerage account on Monday, it won’t be available till Thursday. If you sell a stock, you won’t have that cash available to you till 3 business days. Yes it sucks, but I have more time than money. Easily worth $0, but worth sharing. Just wait till Robinhood Instant is revealed to everyone.
    UPDATED 9/22/2017 – There is no more wait period for Robinhood Instant. It’s open to everyone, so no more 3 day wait period for your investments. This is awesome! 
  2. There is no website to access your stocks whatsoever. That means I can’t connect it to Mint (my money manager). Mint as consistently stated that since Robinhood doesn’t have a website, it can’t connect to the brokerage account. So my true financial worth isn’t provided. This does kind of suck.
  3. There is no in depth analytics to analyze stock values. It gives the basic info, but I usually use Yahoo Finance to do my research and just use the Robinhood App for pulling the trigger. With so many great analyzing tools on the web, this isn’t the biggest loss.
  4. I would be remise if I didn’t mention the recent glitch Robinhood had. I woke up earlier this week to find that Robinhood glitched out and didn’t display my portfolio value. I literally freaked the fuck out. My balance went from $6,604.54 to $8.14 (which was my available cash). I immediately noticed that I still had all my stock positions, but it just didn’t total correctly. I knew since it was displaying my available cash instead of the portfolio value, this was a glitch and pulled the wrong info. I rightly, emailed customer support and they fixed the issue in a couple of hours. I don’t think it was too crazy, but some people on the world wide web wouldn’t shut up about it. Maybe it is the $0 free trades, but I can live with a small glitch for saving $420.
    UPDATED 9/22/2017 – This hasn’t happened since.

Don’t let those negative comments scare you, I have absolutely loved the Robinhood trading platform! I plan on continuing to use it as my primary brokerage account for years to come.

The last word

Robinhood isn’t the first to try the $0 free trade. Other companies have done this in the past and frankly failed. It’s a difficult business model, but I think Robinhood is doing it right. They have received financial support from some large names like Google Ventures, Index Ventures and Ribbit Capital. They have something special.

I will continue to use Robinhood as my brokerage account for the foreseeable future. I do small trades and that $0 trading fee is perfect for my investing style. If you are tired of paying for trading fees, I’d suggest you give it a try. Plus their new promotion gives new sign-ups a free share of stock.

I believe the Robinhood Business model will influence other brokerage firms in the future and they’ll lower prices to target this millennial demographic. This will be awesome for future investors. Would you be willing to try it? If not, what are your reservations?