Live Off Dividends

Passive Income and Personal Finance

Month: June 2016 (page 2 of 2)

Robinhood Instant

What is it?

Robinhood is an app only stock brokerage that offers FREE trades and NO account minimums. Did you read that last sentence? FREE TRADES AND NO ACCOUNT MINIMUMS. What else could you ask for? Robinhood is able to do this by keeping itself simple with very low overhead. Currently, they only have the option to buy and sell at market price, place limit orders, stop limit orders and stop loss orders. Other features such as margin trading are not currently available. Though they have minimum account features they have everything you need to successfully trade.

My Robinhood Homescreen

 

Robinhood Instant

In the past, if you transfered money into your Robinhood account you had to wait 3-5 business days before your funds were available to trade. Also, if you sold shares you would also have to wait 3-5 days for a processing period before you were able to use your funds. In my opinion, this was the ONLY issue with Robinhood. Then, the announcement of Robinhood Instant. It was almost too good to be true. They were going to make sold shares instantly available for trading and transfer of up to $1,000 instantly available as well. I used Robinhood before this announcement, now I’ll never go back. I was roughly 70,000/270,000 in a waiting line and I just received my invite to Robinhood Instant two weeks ago. As far as I can tell they are really rolling out the invites now.

 

How do they make money?

How can they offer these services for free? All the other brokers charge at least $5 per trade don’t they? You’re right, they do. And that $5 is anytime you buy OR sell. Robinhood makes money from uninvested cash in customers accounts. This means that the money that you don’t have invested accrues interest for Robinhood. You are NOT charged and are basically unaffected. This doesn’t affect your balance or ability to use your funds. Robinhood is currently working on creating margin accounts. They say they are in beta stage currently and will offer them later this year. They will accrue interest in that way as well.

Robinhood side menu

 

Security

“Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash).” Your personal information is also fully encrypted.

 

My advice

USE ROBINHOOD! I truly love Robinhood and will never go back to using another brokerage again. But aside from that, ALWAYS place limit orders. Market price is constantly changing and you buy whatever is available so you may pay an unexpectedly high price for shares or receive less than you anticipated for selling. Simple fix: always place limit orders. It doesn’t take any more time and you always pay and receive the amount you want.

How many of you use Robinhood Instant as well?

Disclosure: I am in no way affiliated with Robinhood. I do not receive compensation for promoting Robinhood. Use a broker that you feel comfortable with. I am not a financial advisor this website is purely informational.

Dividend Portfolio 6/1/16

I take a long term approach to dividend investing. So naturally I look for companies with consistent dividend payments and long track records of dividend growth. I want my dividends to continue to grow even when I’m no longer adding money to the stocks. Essentially, my yearly dividend growth just needs to beat inflation. I also take a long term holding approach to my dividend stocks. The market is constantly changing and I feel too much buying and selling can actually hurt you in the long run. There’s of course situations when you should sell a long term holding but, I’m trying to do very little selling. My main focus is buying companies that I understand and that I personally believe in and at the right price. When I do think that I’m finally ready to retire early I don’t ever want to have to go back to working so I want to make sure I’m 100% ready when the time does come. Here’s what my dividend portfolio looks like right now. I’ll try to keep it updated monthly.

(last updated 6/1/16)

I’m currently up $1,703.30 (6.95%) YTD so for my first year investing I’ll take it. Also, I’ve made $200.44 from dividends in 2016. My 2016 goal for annual dividends is $1,200 and I’m right on track. I’ve been adding $440 to my dividend portfolio bi-weekly. My goal is to stick right around 4% average yield and I’m currently at 4.15%. In regards to average yield I couldn’t ask for anything more. I would like to stay above 4% but, I don’t ever want to be below 3.5%.

I think my portfolio is still pretty unbalanced right now and that’s something I’m starting to work on. I know that I’m going to have to sacrifice yield to balance my portfolio out and that’s fine. I plan on adding to Procter & Gamble, 3M, Northwest Natural and Cincinnati Financial when the prices are a little more to my liking. There’s also a few others I’m waiting to buy. The goal for 2016 is to have at least 30 stocks with a decent holding in each. This alone will balance my portfolio out a bit more. I’m constantly researching companies to find new stocks that will fit into my portfolio.

I’m currently reinvesting all my dividends. To me, this is just extra money that will start working for me. The $440 I add bi-weekly doesn’t get me very far so every little bit helps. I’m excited to see where I’m at come the end of 2016!

What are some of your favorite dividend stocks?
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