This is a guest post by my husband Adam Culbertson. He is not an investment expert but is writing about his experience with buying and selling stock.
“I want to invest in some stocks.” That statement might rank right up there with, “Honey I bought another boat.” Well… that’s what I told my wife earlier this year, that I was interested in buying some stock.
Problem was, I didn’t want to make an initial investment of $10,000 and I didn’t want to pay someone a $7 commission for each transaction. Frankly, this is what keeps most people from even trying to invest is the huge perceived up-front cost.
I’ll be honest, I was a little scared of the potential to lose everything we would invest. But on the other hand, was excited by the potential to gain more than our current 1.3% with our Saving Bonds and even our 2% interest on our Certificates of Deposit.
Those numbers aren’t much better than a basic savings account, which is fine to safeguard your money, but they’re not for making your money work for you, which is what I wanted it to do.
Then I found an app called Robinhood. It steals from the rich and gives to the poor! NO. Not really. But it does make investing fun and easy to keep track of where your money is and how much profit you’ve made.
The basic idea is simple.
- You transfer money into a Robinhood owned escrow account in your name and use that escrow account to buy stocks.
- When you sell a stock, that money goes back into your escrow account and can be transferred back to your bank account whenever you want.
- The interest on the money in the escrow account is kept by Robinhood for operating expenses, etc.
- And lastly, there is a few days’ delay from when you transfer money into the app and when you can spend it.
That ensures that there is some money-making interest for the Robinhood company. That’s pretty much it.
After using the app for a period of time, you are automatically upgraded to Robinhood Instant, which allows you to use your funds as soon as they are transferred without waiting the three days.
After downloading the app, setup was simple. Enter some personal information, transfer some money into your escrow account and after a few days, they’ll email you and let you know your money is clear to use as you wish.
Robinhood supports buying and selling various securities on major U.S. exchanges like Nasdaq, but does not support options or more complex trading, that frankly, I don’t know how to do anyway.
Periodically, they will issue out Account Statements and they say I can expect my Tax Documents in February for the previous year. Account Statements are stored within the app and can be exported and printed right from my phone.
So enough technical stuff.
- On the main app page, you can search for a stock by name or by the letters that designates it on the exchange.
- Once you find your favorite stock, you can read basic info about it, read recent news articles from news sources such as Yahoo Finance and CNBC, add it to your watch-list or purchase it.
- If you want to purchase it, you have to back the trade by 10 percent, meaning that for instance, if your stock is selling for $100, you must have $110 in your escrow account.
- Don’t worry, you get to keep that $10 in escrow.
- You are only charged for the total cost of the stock.
- Certain fees are federally imposed upon selling stock and these are automatically collected upon selling a stock.
- The main screen shows your total portfolio worth in stock value and buying power in escrow.
- This also shows the daily amount of loss or gain and can be selected to show weekly, monthly, quarterly, yearly or total performance. The same selections are available when viewing specific stocks.
It couldn’t be easier! It’s designed to be user and newbie friendly which is exactly who I am.
Don’t get me wrong, I was more than a little skeptical at first. I started slow with a small investment and waited to see if they were in business the next day. So far… so good.
There is inherent risk in any stock purchase, but some stocks are less risky than others. My wife pretty much gives me free rein to invest how I want, other than occasionally telling me she wants to own stock in such and such company. And so far her recommendations have been spot on!
I reduce our risk by investing in mostly low to medium volatility stocks and so far have gained more money than I’ve lost. That’s right! In the short amount of time that I’ve been buying and trading with the Robinhood app, I’ve made money. More than I could make with it sitting in a CD or savings account.
If you’re in the market to start buying stock, give this a look and see what you think. I’ll tell ya, that I’m very satisfied with the whole experience of using the Robinhood app. And as always, buying and selling stock of any kind is completely at your own risk. Consulting with a stock expert before buying stock is recommended.
For Android users please access through your mobiles.
Have you made money buying stock? Tell me about it 🙂