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Robinhood is a financial technology company that makes investing friendly, approachable, and understandable for beginners and experts alike.
Founded by Vladimir Tenev and Baiju Bhatt, they wanted a straightforward and painless way for everyday Americans to access financial markets – not just the wealthy.
Before Robinhood existed, institutions charged high fees to trade and required minimum account balances to invest. This left young investors on the sidelines. But not anymore.
Robinhood disrupted the financial industry for the better by offering zero commission fees, no account minimums, fractional shares, crypto exposure, and a simple, mobile-friendly sign-up process.
These minor changes moved mountains and opened the floodgates to average Americans who are eager to tap into the power of compound interest and value investing.
Unfortunately, there is a no “guaranteed gains” button on Robinhood or a “like” button for that matter.
At the end of the day, you make money on Robinhood Login the same way you make money on any other investing platform. It will just look cooler, and you will have your own fireworks show to prove it.
No matter what financial service you use, there are two ways to make money when investing.
Buy a stock when it’s “low” and sell it when it’s “high,” or at least higher than what you bought the asset for originally. For example, let’s say you love Cash App and decide to buy some Square stock (SQ) at $240.
Other investors agree with you and Robinhood Login choose to buy shares of Square, driving up its share price. Some time passes, and the price reaches $251 per share. You decide to sell your one share, net the $11 gain, and pay back your friend from last weekend.
This example is known as asset appreciation. Over time your stock price increased in net value. This simple strategy is how the rich keep getting richer. It’s that easy.
The second and less sexy way to make money on Robinhood is by collecting dividends. Companies who issue dividends pay out a portion of their profits to shareholders as a reward for owning their stock.
For example, if a company offered an annual dividend of $0.25 per share, and you owned 100 shares, you’d collect $25 in dividend income.
Thus, owning a sizable amount of shares is required to make noticeable gains through dividends, but it adds up over time. Warren Buffet is set to collect $804.1 million from Apple’s (AAPL) dividend payout in 2020 alone.
Keep in mind that companies reserve the right to cut or pause their dividends for several different reasons, such as the sliding health of the company.
Increase your time horizon. As Anthony Pompliano says, “Anyone can become a millionaire if they have enough time.”
If you’re racing to Robinhood to day trade, a casino will serve the same purpose for you. No investor can know for certain where a stock will go on a given day, but putting time on your side will improve your chances of seeing positive returns.
Stocks go up and down daily, but over time, they tend to go up.
Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it earns it … he who doesn’t … pays it.”
Fight the urge to check Robinhood every day. Be patient and allow your money to compound over time. We recommend dollar cost averaging. It is a proven strategy that rewards long-term investors year after year.
Robinhood offers some features that allow you to make money in different ways. For $5 per month, you can be a Robinhood Gold member and “trade on margin.”
This means that you can trade on borrowed cash, but also lose more money than you invest. Margin trading is risky, and investors can get into hot water quickly if they aren’t careful. The Financial Industry Regulatory Authority requires a $2,000 minimum for margin accounts.
Robinhood allows investors to buy fractional shares of a company. So, if you are dying to own Amazon but cannot afford its $3,000 share price, you can buy as little as 1/1000000 of a share, or $0.003 worth of Jeff Bezos’s enterprise.
Additionally, Robinhood Crypto enables users to buy and sell bitcoin, ether, dogecoin, and other alternative coins, 24/7 and commission-free. This service is incredibly unique to Robinhood and is another distinguishing feature.