Robinhood is the best way to start investing and saving for the future for cash-strapped students and adults alike. Unlimited free trades is hard to beat.
If you’ve just finished rewatching The Wolf of Wall Street and you’re ready to start making millions betting on penny stocks, then stop reading and head over to /r/wallstreetbets. If you’re a more reasonably level headed individual without a penchant for risky financial decisions let me tell you about Robinhood.
Back when I first started investing, I opened a custodial account through Scottrade. I wasn’t 18 yet so I couldn’t legally own my own investment portfolio. The account was set up so that my parents owned it until I was 18, but I could trade on it in the mean time. I deposited $1,000 into the account and set about buying. I quickly ran into a big problem: every time I traded they charged me $7 per transaction. That’s chump change to someone moving tens of thousands of dollars around in their retirement account, but for a high school student with limited funds it meant that I had to make at least $14 on every investment before I was profitable. That became a huge burden to the point where I just stuck my money in an index fund and called it a day.
Fast forward a few years to when I found out about Robinhood. This app is truly the future of trading. All trades are free and there is no minimum deposit or balance. This means that you can invest over time with small amounts of money.
Say you want to put away $75 from each pay check over the summer. Instead of starting with a minimum balance of $1,000 in a traditional account, Robinhood lets you start trading from your first deposit. Furthermore, you can make that stock purchase without having to worry about fees. For students, investing small amounts of money here and there is a great way learn about the market and to save for the future.
The market can be a tumultuous and sometimes confusing entity. If you’re not interested in following the happenings of the US economy from open to close then there are some good options for a more passive strategy. For legality’s sake, the following statements are purely opinion based and are for informational purposes only. It is not intended to be investment advice.
Index funds generally track entire markets as a whole and are a good way to make “safe” investments. Funds such as VTI change based on the entire US stock market. With the exception of the crash in 2008, the fund has historically had a positive return year after year as a result of the market increasing at the same rate. Other options are to invest in companies that are well established and have products you believe in. There’s a good chance Coca-Cola isn’t going anywhere in the near future.
Whether you’re investing is biopharmaceutical penny stocks that could lose half their value at any second or well established conglomerates, Robinhood is the best option if you’re trying to invest on a small scale.