One of the hottest and smartest ways to start earning money is by investing in stocks and trading them. This is the backbone of how businesses and companies grow, while also encouraging individuals all around the world to become a part of it.
Starting out in the trading and stock world is terrifying. But sites like Robinhood might be the way to go for newcomers. Over 21 million users have taken a chance at using Robinhood to earn money through stocks. You might have already heard testimonies from several users about how well Robinhood works in helping them earn money.
But you might also be asking: How fast can you make money on Robinhood? Here’s your guide on getting started on using Robinhood, and earning money on the platform.
How long does it take to make money on Robinhood?
If you’re just starting out on Robinhood, you won’t be able to earn much money yet. Investing in stocks requires a good sense of predicting the future of a company, which can only come with enough time, experience, and knowledge in the field. However, once you get the hang of the processes Robinhood has to offer, you can start earning a good and consistent sum of money within a few weeks or months.
Trading takes time and patience. If you try to rush through the process, you’ll end up losing more money than earning it. Robinhood is a beginner-friendly platform for newcomers, so keep reading if you want to figure out how to make the most of it!
What is Robinhood?
Robinhood is a company founded in 2013 that focuses on trading stocks on the stock market. The most appealing part of their platform is the fact that it’s “fee-free.” This means that users can start trading with little to no capital.
If you’re just figuring out how to start in the trading world, Robinhood also has an alternative platform called Robinhood Learn. This website offers free and easy-to-read articles about the basics of investing, stocks, and trading.
As of 2022, Robinhood is only available in the United States. The company has no plans of expanding to other countries.
How to Earn Money using Robinhood?
There are two main ways to earn money on the platform. The first is through asset appreciation. This is the process of buying stocks or shares from a particular company and selling them for a higher price.
For example, Apple is a company you’ve been thinking of investing in. Their shares cost $15 each, and you choose to buy 100 of them. As a few weeks go by, their shares increase to $40 each. Now, the shares you bought are worth a lot more than you paid for. If you sell them for $40, you end up making a profit of $25.
This is what investors call the “Buy Low, Sell High” philosophy, and it’s the backbone of succeeding in the stock trade. This philosophy also remains true when you use Robinhood.
The second way to earn money is through dividend income. Dividends are collected by Robinhood users through owning a particular company’s stock. Think of dividends as a type of reward, where on a particular basis, you earn money based on how many shares you own.
You can also use your dividend income to buy more shares from the same company. This will help you earn more income passively as time goes on.
Pros and Cons of using Robinhood
Now that you know how to make the most money out of Robinhood, it’s time to evaluate if Robinhood is the best platform to start trading and investing in the stock market. Here are some pros and cons to the website that you should consider before officially starting:
Benefits of using Robinhood:
- Little to no fees: Robinhood doesn’t require new users to pay certain fees to start an account. It also doesn’t charge them other payments to continue using their services, such as services for trading, data, wire transfers, and other maintenance needs.
Keep in mind, however, that there is a fee for closing your Robinhood account. You can also choose to opt for a Robinhood Gold account, which provides you with in-depth research reports and other premium features.
- Beginner-friendly: Robinhood’s interface makes it easy for newcomers in the trade to navigate the different kinds of investing available. Critics and users have noted how easy it is to use, which makes it incredibly appealing.
- Investment options: Besides stocks, Robinhood also has features that accommodate cryptocurrency. Robinhood Crypto is the name of the platform. It allows users to buy and sell Bitcoin, which is not available on different platforms that are as accessible as Robinhood.
Disadvantages of using Robinhood:
- The ease of use can easily become dangerous: Because of how easy it is to get a hang of the platform, Robinhood can be compared to gambling. Much of the activity that you may want to do, while you’re starting out, is to trade actively. If you’re expecting to make a lot of money fast through buying, selling, and trading stocks, you might not be able to cut your losses.
There is no guarantee that the companies you invest in will be profitable, and you might end up losing more than you earn.
- Not suitable for experienced traders: Robinhood doesn’t feature mutual bonds or mutual funds, which are known to be good investing products. Not having access to these products can hinder these new and evergreen investors from making smarter investment decisions.
Is Robinhood good for trading?
Robinhood is definitely a good place to start for you to figure out how to get a hold of trading, investment, and even cryptocurrency. However, look into other alternatives similar to Robinhood as well.
Figure out what your goals are in trading and investing, and find the platform that will best suit your needs.
How to get started on Robinhood?
Still interested in making money on Robinhood? Here’s how to make an account, and the rules that come with it:
- Sign-up with your basic personal details on Robinhood’s main webpage
- Verify your identity. This requires you to submit your Social Security Number.
- Choose your bank of choice to fund your Robinhood account.
- Submit your application. This will be reviewed by Robinhood. They will send the results of your application via E-mail.
- Download the Robinhood app. Once your application has been approved, you can now start trading using any of your mobile devices!
There’s definitely a lot of promise that comes with Robinhood, and other trading platforms like it. Just remember: money doesn’t come easy, and it doesn’t come quickly. Be patient and think critically to make the most profit out of your investments. Once you get the hang of it, then you’ll be gunning for bigger and better things!