Who loves free stuff? Me and everyone I know! You’re in luck today because here is your chance to get a free stock. Robinhood, an online brokerage, is giving away one stock when you sign up for a new account. Once you have an account, you can refer friends and you’ll receive one stock when they sign up. I opened a new account last week and I received a share of Sprint. That’s just $7.75, but it’s still nice to get something for free. The stock is chosen randomly from Robinhood’s settled shares, so you could get Apple, Ford, Sprint, or something else altogether. (I believe this offer is only available in the US at this time.) So what’s the downside? Let’s look into it more.
Mrs. RB40 got a share of HP. Nice! Sign up with her referral link now to get a free share. (There is some technical difficulties with my link so I’m using her link here, with her permission of course.)
Who is Robinhood?
Robin Hood lived in Sherwood Forest and he was one of my favorite childhood folklore figures. I got a book from the library and read it to RB40Jr, but he just wasn’t interested. Kids these days have a lot more entertainment options and I must admit Star Wars space ships are more exciting than Robin Hood running around a forest. OK, I digress. Robinhood is an app-only brokerage that charges no commission when you trade US listed stocks and ETFs. From what I’ve seen online, the company is legit and not a scam.
However, you need an iOS or Android phone to trade. You can sign up for an account from a computer, but you can only trade on a smart phone. Personally, I don’t like this because I prefer to do everything from my computer. The smart phone screen is too small and I don’t like reading or doing serious stuff on the phone.
Free stock trading is great, but I am very skeptical. Every company that offers free trading in the past went out of business after a while or changed their model. How can they offer free trading? Well, here is how they make money. Robinhood makes money by charging a monthly fee on their Robinhood Gold account. With Robinhood Gold you can invest up to 2x your buying power and gain access to after hours trading. This is basically a margin account. You borrow money to invest. I don’t like margin trading because it is risky. The good thing is they don’t charge interest for the margin*. Personally, I’ll stick with the regular account and trade for free.
*Fine print* Additional buying power over $50,000.00 has a yearly interest rate of 5.0%.
Also, they don’t pay interest on your cash balance. That’s another way they generate income.
This plan sounds a bit light to me, but we’ll see if they can make it. They raised a lot of money from venture capitalists so they should be able to operate for a while and give away a bunch of free stocks. Account owners shouldn’t have a problem if Robinhood goes out of business. We should be able to transfer our shares to another brokerage or cash out. That’s what I did recently when I heard that Loyal3 is closing up shop.
Robinhood is best for…
Robinhood seems like a very cool app. I think this is a great fit for new investors, especially if they’re young and don’t have a lot of money to invest. With Robinhood, you can buy a few shares of stocks and don’t have to worry about the transaction fees. You don’t need $5,000 to start investing. Anyone can start with $100 and I think that’s great. The earlier you start investing, the better off you’ll be.
Also, young investors are more comfortable with their smart phone. I like my phone, but I don’t want to trade stock or do much banking on it. It’s just easier for me to do those things on the computer. Young investors probably don’t mind doing financial transactions on their phones. Let me know if I’m right.
New account bonus
- Sign up for a new account
- Verify your email address
- Install the Robinhood app on your phone
- Claim your free share. You can do this in the Robinhood app.
- Link your bank account to get the money out and fund your account
- Share your referral link with friends to get more shares!
I signed up and received my free share in less than 10 minutes so you shouldn’t have any problem with it. The share will take a couple of days to settle so you need to wait a bit before you sell. Also, you need to keep the cash in your account for 30 days.
I’m not moving my dividend account at Vanguard to Robinhood. I only pay $2 to trade and I rarely trade. Also, I trust Vanguard a lot more than Robinhood at this time. I’ll keep my free stocks at Robinhood and maybe add a couple thousand dollars if I want to buy a speculative stock. Free stock trading is a great idea, but I want to see if they can make it work for at least 5 years.
Get your free stock
What are you waiting for? Sign up with Robinhood and get your free stock today! I’ll receive a free stock too when you sign up. Heh heh, that’s why it’s great to have a blog. I have an online platform where I can spread this kind of news and we both benefit. Here is my tutorial on how to start a blog and why you should. Everyone should have a blog to help track their personal goals. It’s been extremely useful for me and blogging might change your life too.
I’m sure you’re curious what kind of stock you can get so I’ll update what stocks I receive below.
- $8 Sprint: 5 shares
- $5 Sirius: 6 shares
- $19 HP: 1 share
- $7 Opko Health: 2 shares
- $5 Office Depot: 2 shares
- $7 Southwest: 3 shares
- $7 Xerox: 2 shares
- $30 GE: 1 share
- $7 VEREIT: 1 share
- $9 Staples: 2 shares
- $6 Chesapeake Energy: 2 shares
- $4 Rite Aid: 1 share
Hmm… These free stocks are pretty cheap. The biggest one so far is GE.
What do you think about this free trading model? Did you sign up to get a free share? Let us know what you got.
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.