My wife has been asking what I want for Christmas this year, so I asked for permission to use a little money toward investing. She said it was a boring present, but gave me the go-ahead.
You know what this means? It means the micro-investment party just started, baby!
The app I’ve heard the most about is Robinhood. I’ve seen and heard the app mentioned on podcasts, YouTube videos, and from professional business people and investors I’m already following.
Here are some basics about Robinhood:
- The Robinhood app is free and easy to use (with–surprise!–the option to upgrade to a $5/mo Gold account).
- Stocks and bonds can be purchased and sold without the usual broker fee (I should probably figure out what the h*ck a bond is).
- Investments can be started for less than $100–and often for less than $50.
- Most of my friends have never heard of Robinhood and they think I’m talking about the Disney animated movie (which is, oo-de-lally, most excellent).
Day 1 ($222.29 Free)
I did it! I downloaded the app! Setup was a little more involved than I thought it would be, but it was quick and painless. I had to enter my social (because the app functions as a legal broker), but then I was greeted with this screen:
Wait–what’s this? Free stock just for signing up? That can’t be real…can it?
According to Wall Street Survivor, “scratching off” a free stock image lotto-style, affords the user the following:
- 1 in 90 odds of getting Facebook, Apple, or Microsoft
- 1 in 150 odds of getting Ford, Spring, or GoPro
- 100% chance of getting a free share of stock
- 98% chance of getting free stock with a value between $2.50 and $10
- 1% chance of getting free stock with a value between $10 and $50
- 1% chance of getting free stock with a value between $50 and $200
I received 1 share with biotech company ImmunoGen at $3.39. Nothing crazy, but it’s a free share that has the potential to grow without me doing anything.
Robinhood users can invite friends to join Robinhood and BOTH of you will get a free share of stock! A friend messaged me about the app and I sent my referral link. Within 10 minutes, they were signed up and we both had a new, free share!
This time I got a $218.90 share with Berkshire Hathaway! Wow! That’s a total of $222.29 in shares in a single day–all without spending any money of my own.
Investing might not be so boring, after all.
More Than Money
It’s pretty fun to scroll through Robinhood and see which companies are available to invest in. It turns out that Apple, Twitter, Tesla, Disney, Walmart, and GoPro are available. There are tech, entertainment, health, and apparel companies available. Even Popeyes’ parent company, Restaurant Brands International, is on Robinhood!
…which made me realize that investing in a company brings into play the same ethics as buying from a business. Do I really want my money to support this or that company? Do I really want to risk profiting from the way X company does business?
When I started thinking about investing, I was really only thinking of it as money that had the potential to grow. Now I can’t think of investing without being at least a little bit mindful about what the company is/does, how they treat their employees, their mission, values, etc. Even if it’s just in small ways, my money will be making a difference in the lives of people working for/with the companies I invest in. I want it to count for good.
Using Robinhood
Robinhood’s search and reports interfaces are easy to navigate. I mean, this is information that even I can understand! In fact, the way the information is presented as graphs, percentages, timelines, and lists makes the information accessible and easy to process.
I realize this is a very simplistic overview, but it’s helpful to pull up a company profile and immediately see their stock activity over the previous day, week, month, 3 months, 1 year, and 5 years! If I see that a company’s stock value has been consistently increasing over time, then I’ll be much more likely to buy a share.
From these reports I can see that the value of ImmunoGen stocks has increased in the last day, week, month, and 3 months by as much as 32.10%! But I can also see that they’ve dropped 37.87% over the last year and 64.72% over the last 5 years. Good to know, right?
Having the short- and long-term views is valuable for deciding whether or not to buy from the company. Because my ImmunoGen share was free, and because the value has increased consistently over the last 3 months, I feel much more willing to let my money sit in the hopes of growing. (It might be worth watching for the next 3 months to see if it continues trending upward.)
Another note on Robinhood’s activity graphs: If I scrub through the stock activity over time, I can see the stock value changes for most days in each month over the last 5 years. This is the kind of information that actually gets me excited about the idea of investing, and I can’t help but wonder if the fluctuations in value are direct results of a new marketing approach/product from the company, or if they’re due to nationwide changes in the economy, or something else entirely. (I have a lot of questions, and have been looking for answers, but I’m trying to keep this experience as simple as possible to start with.)
Day 5: My First Investment
After exploring the Robinhood app for a few days (and going down an inexhaustible rabbit hole of YouTube reviews and videos about Robinhood), I decided to just take a step into the great unknown and make an investment.
Remember: this is micro-investing. I'm not looking to swing thousand-dollar deals or hunt down the latest from Wall Street or anything like that--I'm looking to invest a little money in the hopes of gaining a return over time (as opposed to saving with my bank at a .10% - .15% annual yield or paying fees to invest through my bank).
For the sake of keeping things simple for myself, I decided to make my first investment based on the most basic information available to me via the Robinhood app: the timeline and cost per share. Yes–there’s a lot more information available through the app, on YouTube, in articles, etc, but this is new for me and I don’t want to do too much too soon.
While searching through Robinhood’s categories (Tech, Health, Food, Energy, Clothing, etc), I decided for myself the following criteria for potential investments:
- Share must cost $10 or less (I told you I’m starting low—I’m new to this whole thing and nervous!)
- Company must have existed for at least 5 years (so I know they’re in business for the long-haul and so I can see their track record over a good chunk of time)
- Company must have an upward trend for the last year (bonus points if their stock value has increased over the last 5 years)
It didn’t take long to find out Robinhood has a search category just for me! “Most Popular Under $25” afforded me 44 options with companies that include Under Armor, Pinterest, DropBox, Slack, and Aurora Cannabis.
I bought 2 shares: 1 with Yamana Gold and 1 with Vivint Solar.
Yamana ($3.75)
I paid $3.75 for 1 share of Yamana Gold stock. The price was right, the company has been around for 25 years, our values seem to line up at a glance , and their stock value reflects a strong uptick over the past year, resulting in a nearly 63% increase. (Were their stock to increase at the same rate over the next year, my $3.75 today could be valued at $1M in 12 months! Just kidding. But even if I doubled over the next year, I’d still be making money without doing anything to grow it.)
Vivint Solar ($7.31)
I paid $7.31 for 1 share of stock in Vivint Solar. My biggest reasons for investing with them have less to do with their 31.95% increase over the last year and more to do with the fact that their headquarters are just a few miles from my home and that I know several people who work with Vivint Solar and really seem to enjoy the work, their team, and the Vivint culture/environment.
Vivint Solar started in 2011 and has been noted several times as one of Utah’s “fastest growing companies”.
It’s not all good news, though—Vivint Solar stock has dropped 27.05% over the last 5 years. Has the company simply been working out how to thrive in the fairly new industry of consumer solar energy? Have there been changes in their products or marketing approaches? Were these changes in stock value projected when the company first launched or has the company been caught off-guard by the 5-year decline?
I’ll have to do a little digging to see what the future might hold for Vivint Solar. But, at $7.31, I’m not too worried about it.
Doing More with Robinhood
The idea behind micro-investments is clearly not about getting rich quick. It’s about making small-to-modest investments to play out over long periods of time. It’s a great option for someone like myself (a cartoonist stuck in bed with no investment experience whatsoever) to spend a little money now in the hopes of growing it over time without much (if any) additional effort.
That being said, I can see the benefit in buying up a bunch of $3.75 shares in a company or buying a bunch of inexpensive shares in several different companies. It’s easy, the share cost is low, and it costs nothing to purchase the shares.
Cryptocurrency
Did I mention Robinhood also offers (as of the writing of this post) 17 different cryptocurrency investment opportunities? Bitcoin, Ethereum, Litecoin, Zcash, Stellar, Monero, Stash, NEO, and Dogecoin (among others) are all available on Robinhood.
Of the 17 cryptocurrencies, 9 are currently available at a cost of less than $10 per share.
Maybe I’ll dip into crypto next month?
Resources
Robinhood also includes information to help potential investors make informed decisions. Aside from the ability to search for investment opportunities, Robinhood also provides:
- Analyst ratings as to whether to buy, hold, or sell with a given company
- Investment-related news articles
- Collections of the “100 Most Popular Investments”, “Top Movers” and “New On Robinhood”
- Watchlists for keeping an eye on companies you’re considering an investment with
- A portfolio report for viewing your investments in real time
More to Come…
Thanks for checking out my first foray into the world of micro-investing!
In less than a week, I went from knowing nothing about investing to owning 2 free stocks totaling $222.29 and investing $11.06 in 2 additional companies.
Have you started micro-investing? Have you tried Robinhood or other investment apps? Do you have all the answers I’m looking for? Am I doing it wrong? PLEASE share your experience in the comments section and let’s help each other!
I’m just getting started! Subscribe to learn with me about additional investment opportunities like Acorns and cryptocurrency, and be sure to claim your free stock with Robinhood here.
Related Reading
Micro Investing (Part 1: I’m Scared)
#1 Investments with Fractional Shares
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