Opening a Robinhood account for fun - Is it worth it?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
teelainen
Posts: 115
Joined: Fri Feb 01, 2019 1:17 am

Opening a Robinhood account for fun - Is it worth it?

Post by teelainen » Wed Jun 12, 2019 2:20 pm

If someone has some extra play money laying around and wants to have some fun buying stocks of individual companies (instead of boring index funds), is Robinhood the best brokerage to do it with? This is for someone who wants to buy individual stocks 1-2 times per month.

Or are there better brokerages besides Robinhood for this? Thanks.

User avatar
Spinola
Posts: 191
Joined: Fri Nov 16, 2018 1:32 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by Spinola » Wed Jun 12, 2019 4:14 pm

I opened an account, but never used it and see no point in investing in individual stocks, unless you want to play at being a fund manager and have "play" money to burn. I guess as a hobby, it could be fun, if that is your cup of tea. For me investing isn't a hobby, just a means to an end.

I believe the consensus advice here will be that anyone serious about investing should just stick to low-cost index funds, but if you want a small % of your AA for this, have at it.

Topic Author
teelainen
Posts: 115
Joined: Fri Feb 01, 2019 1:17 am

Re: Opening a Robinhood account for fun - Is it worth it?

Post by teelainen » Wed Jun 12, 2019 4:52 pm

Spinola wrote:
Wed Jun 12, 2019 4:14 pm
I opened an account, but never used it and see no point in investing in individual stocks, unless you want to play at being a fund manager and have "play" money to burn. I guess as a hobby, it could be fun, if that is your cup of tea. For me investing isn't a hobby, just a means to an end.

I believe the consensus advice here will be that anyone serious about investing should just stick to low-cost index funds, but if you want a small % of your AA for this, have at it.
Spinola, many successful long term investors will take 1% of their money and use it to pick individual stocks. It provides them enough fun (and distraction) so that they can keep 99% of their money in low-cost index funds.

If there are any other brokerages besides Robinhood for doing this, we would love to know. Thanks.

NativeTxn
Posts: 48
Joined: Mon May 20, 2019 9:32 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by NativeTxn » Wed Jun 12, 2019 5:17 pm

M1 Finance

Let's you build "pies" with pretty much anything that trades on the NYSE or NASDAQ including individual stocks and ETFs. You set the allocation per pie as you want (e.g. you could have 100 stocks at 1% each, 50 stocks with 5 at 1%, 10 at 2%, etc.). No commissions or account maintenance fees (they do have a $100 transfer out fee if you liquidate and transfer your account, but it looks like Robinhood has a $75 transfer out fee, so that seems more or less a wash). You can set it to invest atomically any time cash gets above $10 whether through deposits or dividend accrual. Each time it invests, it will invest to try to bring everything back to the targets you set as much as possible. Buy and sell fractional shares.

I have 3 accounts there - 1 each for my two daughters set to only buy Disney stock, and it automatically buys when I make deposits. The other is a "fun" account for my wife and me where we each picked 5 stocks (total of 10) and we throw $50 into it each month and just see how each stock does.

Time will tell whether they get bought or have to start implementing some sort of fee on the account(s). But for now, it seems like it would be a solid option to explore in comparison to Robinhood.

22twain
Posts: 1893
Joined: Thu May 10, 2012 5:42 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by 22twain » Wed Jun 12, 2019 11:47 pm

teelainen wrote:
Wed Jun 12, 2019 4:52 pm
Spinola wrote:
Wed Jun 12, 2019 4:14 pm
I guess as a hobby, it could be fun, if that is your cup of tea.
Spinola, many successful long term investors will take 1% of their money and use it to pick individual stocks. It provides them enough fun (and distraction) so that they can keep 99% of their money in low-cost index funds.
In other words, it's a hobby. Many people have hobbies in which they might reasonably expect to recoup some portion of their expenses, or even make a profit if they're lucky. For example, various collecting-type hobbies, or betting at the racetrack, or speculating on individual stocks. I would consider that to be a problem only if they stake their current economic well-being or their retirement on such activities.
My investing princiPLEs do not include absolutely preserving princiPAL.

miamivice
Posts: 1730
Joined: Tue Jun 11, 2013 11:46 am

Re: Opening a Robinhood account for fun - Is it worth it?

Post by miamivice » Wed Jun 12, 2019 11:52 pm

I would use Vanguard. For me, the first 25 trades each year are free.

123
Posts: 4719
Joined: Fri Oct 12, 2012 3:55 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by 123 » Wed Jun 12, 2019 11:55 pm

I wouldn't establish a Robinhood account unless I was comfortable doing my own taxes with TurboTax or other tax software (or manually if you prefer). There are lots of tax issues that come up, and it doesn't matter if it's a $10 trade or a $1Million trade the tax treatment has to be properly handled. The tax issues are the biggest considerations in taxable investments.

If you don't do your own taxes you could be at risk of being faced with higher fees from your tax preparer due to additional tax schedules that may be required.
The closest helping hand is at the end of your own arm.

User avatar
fortyofforty
Posts: 1476
Joined: Wed Mar 31, 2010 12:33 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by fortyofforty » Thu Jun 13, 2019 6:38 am

Every hobby costs money. For some, they go fishing, buy rods and reels and lures, use vacation days, rent a cabin, and incur many other expenses. But they enjoy it. Others might enjoy buying and selling individual stocks. As long as it's at the "hobby" level and not at the "integral part of my retirement plan" stage, I don't see the harm. I know I personally do not have the stomach for it, so I haven't owned individual stocks for decades.
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

stan1
Posts: 7003
Joined: Mon Oct 08, 2007 4:35 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by stan1 » Thu Jun 13, 2019 6:54 am

123 wrote:
Wed Jun 12, 2019 11:55 pm
I wouldn't establish a Robinhood account unless I was comfortable doing my own taxes with TurboTax or other tax software (or manually if you prefer). There are lots of tax issues that come up, and it doesn't matter if it's a $10 trade or a $1Million trade the tax treatment has to be properly handled. The tax issues are the biggest considerations in taxable investments.

If you don't do your own taxes you could be at risk of being faced with higher fees from your tax preparer due to additional tax schedules that may be required.
I don't know if I would call dividends, capital gains, and capital losses "issues" but you are right that if you have a basket or pie of a large number of stocks and you actively trade them in a taxable account you'll get a long 1099 form. LIkewise if day trading & hundreds of trades per year are made. Doing this in an IRA simplifies taxes but takes away ability to harvest losses. Now that realized gains and losses are reported to IRS the brokerage has to keep track of them so burden on taxpayer is a lot less than when it all had to be done manually.

MBB_Boy
Posts: 49
Joined: Sat May 12, 2018 4:09 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by MBB_Boy » Thu Jun 13, 2019 2:09 pm

NativeTxn wrote:
Wed Jun 12, 2019 5:17 pm
M1 Finance

Let's you build "pies" with pretty much anything that trades on the NYSE or NASDAQ including individual stocks and ETFs. You set the allocation per pie as you want (e.g. you could have 100 stocks at 1% each, 50 stocks with 5 at 1%, 10 at 2%, etc.). No commissions or account maintenance fees (they do have a $100 transfer out fee if you liquidate and transfer your account, but it looks like Robinhood has a $75 transfer out fee, so that seems more or less a wash). You can set it to invest atomically any time cash gets above $10 whether through deposits or dividend accrual. Each time it invests, it will invest to try to bring everything back to the targets you set as much as possible. Buy and sell fractional shares.

I have 3 accounts there - 1 each for my two daughters set to only buy Disney stock, and it automatically buys when I make deposits. The other is a "fun" account for my wife and me where we each picked 5 stocks (total of 10) and we throw $50 into it each month and just see how each stock does.

Time will tell whether they get bought or have to start implementing some sort of fee on the account(s). But for now, it seems like it would be a solid option to explore in comparison to Robinhood.
Second M1. They also allow fractional investing, so you can just choose to invest a certain amount of money, rather than having to deal with having whole shares. Good for buying high priced stocks without break the bank

MotoTrojan
Posts: 4611
Joined: Wed Feb 01, 2017 8:39 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by MotoTrojan » Thu Jun 13, 2019 2:23 pm

MBB_Boy wrote:
Thu Jun 13, 2019 2:09 pm
NativeTxn wrote:
Wed Jun 12, 2019 5:17 pm
M1 Finance

Let's you build "pies" with pretty much anything that trades on the NYSE or NASDAQ including individual stocks and ETFs. You set the allocation per pie as you want (e.g. you could have 100 stocks at 1% each, 50 stocks with 5 at 1%, 10 at 2%, etc.). No commissions or account maintenance fees (they do have a $100 transfer out fee if you liquidate and transfer your account, but it looks like Robinhood has a $75 transfer out fee, so that seems more or less a wash). You can set it to invest atomically any time cash gets above $10 whether through deposits or dividend accrual. Each time it invests, it will invest to try to bring everything back to the targets you set as much as possible. Buy and sell fractional shares.

I have 3 accounts there - 1 each for my two daughters set to only buy Disney stock, and it automatically buys when I make deposits. The other is a "fun" account for my wife and me where we each picked 5 stocks (total of 10) and we throw $50 into it each month and just see how each stock does.

Time will tell whether they get bought or have to start implementing some sort of fee on the account(s). But for now, it seems like it would be a solid option to explore in comparison to Robinhood.
Second M1. They also allow fractional investing, so you can just choose to invest a certain amount of money, rather than having to deal with having whole shares. Good for buying high priced stocks without break the bank
+1. I think this would enable you to have a lot more fun building a properly diversified fund without needing to invest a significant amount of capital. Just be careful when using the pies not to rebalance or do anything that results in sales too often for tax purposes. Once you setup a pie though you can just contribute more money and have it go to the underweight assets (for example if you were 33% Apple, 33% Netflix, 33% Beyond Meats and Netflix goes down, most/all of your contribution would go to Netflix).

I use M1 for my Roth due to a specialty portfolio that requires quarterly rebalanacing, but have thought about adding a few bucks to a brokerage there too.

User avatar
FelixTheCat
Posts: 1592
Joined: Sat Sep 24, 2011 12:39 am

Re: Opening a Robinhood account for fun - Is it worth it?

Post by FelixTheCat » Thu Jun 13, 2019 3:08 pm

NativeTxn wrote:
Wed Jun 12, 2019 5:17 pm
M1 Finance
M1 Finance seems like a fun hobby. Do you want post a referral link?
Last edited by FelixTheCat on Thu Jun 13, 2019 4:00 pm, edited 1 time in total.
Felix is a wonderful, wonderful cat.

FOGU
Posts: 250
Joined: Tue Apr 24, 2018 9:41 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by FOGU » Thu Jun 13, 2019 3:23 pm

fortyofforty wrote:
Thu Jun 13, 2019 6:38 am
Every hobby costs money.
No they don't.

Running in the park doesn't cost me a dime. Playing guitar, on the guitar I've had for 30 years doesn't cost a dime. Lifting weights on the equipment I have had for 15 years doesn't cost a dime. Reading books I borrow from the local library doesn't cost me a dime.

But if money is burning a hole in your pocket to trade stocks, or go to the casino, then go for it. To each his own.
~ Don't just do something. Sit there. ~

User avatar
HomerJ
Posts: 12881
Joined: Fri Jun 06, 2008 12:50 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by HomerJ » Thu Jun 13, 2019 4:26 pm

FOGU wrote:
Thu Jun 13, 2019 3:23 pm
fortyofforty wrote:
Thu Jun 13, 2019 6:38 am
Every hobby costs money.
No they don't.

Running in the park doesn't cost me a dime.
Do you run barefoot? :)
Playing guitar, on the guitar I've had for 30 years doesn't cost a dime. Lifting weights on the equipment I have had for 15 years doesn't cost a dime.
Those cost something at one time.
Reading books I borrow from the local library doesn't cost me a dime.
Taxes to support the public library!

Just messing with you, you make a good point. :)
The J stands for Jay

FOGU
Posts: 250
Joined: Tue Apr 24, 2018 9:41 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by FOGU » Thu Jun 13, 2019 7:47 pm

HomerJ wrote:
Thu Jun 13, 2019 4:26 pm
FOGU wrote:
Thu Jun 13, 2019 3:23 pm
fortyofforty wrote:
Thu Jun 13, 2019 6:38 am
Every hobby costs money.
No they don't.

Running in the park doesn't cost me a dime.
Do you run barefoot? :)
Playing guitar, on the guitar I've had for 30 years doesn't cost a dime. Lifting weights on the equipment I have had for 15 years doesn't cost a dime.
Those cost something at one time.
Reading books I borrow from the local library doesn't cost me a dime.
Taxes to support the public library!

Just messing with you, you make a good point. :)
Those are my free hobbies. Fueling and staffing the 400 foot yacht and Learjet does tend to impact the burn rate.
~ Don't just do something. Sit there. ~

User avatar
fortyofforty
Posts: 1476
Joined: Wed Mar 31, 2010 12:33 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by fortyofforty » Thu Jun 13, 2019 7:51 pm

FOGU wrote:
Thu Jun 13, 2019 3:23 pm
fortyofforty wrote:
Thu Jun 13, 2019 6:38 am
Every hobby costs money.
No they don't.

Running in the park doesn't cost me a dime. Playing guitar, on the guitar I've had for 30 years doesn't cost a dime. Lifting weights on the equipment I have had for 15 years doesn't cost a dime. Reading books I borrow from the local library doesn't cost me a dime.

But if money is burning a hole in your pocket to trade stocks, or go to the casino, then go for it. To each his own.
Buying running shoes and shorts or other gear costs money, especially since most runners I see today have ear buds, possibly with some form of music subscription. Buying a guitar then saying it doesn't cost anything is not logical. And unless you play the same songs over 30 years (in which case only your family members suffer), you probably have to buy sheet music once in a while. Buying weights or a gym membership also costs money, and the only issue here seems to be when the money was spent. Borrowing books from the local library only costs you the time and gasoline needed to get there and back home, so it's pretty inexpensive (unless you count the amount of local taxes used to fund said library). If that's your hobby, then go for it.

If someone spends $1000 on a stock, then uses the proceeds to buy and sell over 30 years, should he say it's free? I would still say it cost money. I'm afraid hobbies aren't free, whether the costs are immediate or the money was spent years ago.
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

twhite5262
Posts: 7
Joined: Thu Dec 28, 2017 11:55 am

Re: Opening a Robinhood account for fun - Is it worth it?

Post by twhite5262 » Thu Jun 13, 2019 7:57 pm

I opened one for fun. Bought a few k of cannabis stocks and double my money. Never had that much luck in Vegas. 😀

m1collector
Posts: 20
Joined: Mon Dec 25, 2017 8:24 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by m1collector » Thu Jun 13, 2019 8:16 pm

I have a RobinHood account, and many people at my work use Robinhood. The big appeal is the no fee trades. Got $7 in your account? Use it to buy one share of PSEC with no fee. Want to buy a stock and don’t have enough money in your account? RobinHood would initiate a transfer from your bank and make the money available immediately. That is the appeal of RobinHood. Their mobile app is quite different than Fidelity. I understand how Fidelity’s site works but at times RobinHood confuses me. I have mistakenly sold stocks on RobinHood when I meant to cancel the transaction.

People at work use it for trading options and doing swing trading. Frequent trading. Not so much for long term buy and hold.

For play money RobinHood seems ok. For me, I don’t trade on RobinHood any more frequently than on Fidelity.

NativeTxn
Posts: 48
Joined: Mon May 20, 2019 9:32 pm

Re: Opening a Robinhood account for fun - Is it worth it?

Post by NativeTxn » Thu Jun 13, 2019 10:25 pm

FelixTheCat wrote:
Thu Jun 13, 2019 3:08 pm
NativeTxn wrote:
Wed Jun 12, 2019 5:17 pm
M1 Finance
M1 Finance seems like a fun hobby. Do you want post a referral link?
Happy to. https://mbsy.co/wrdFd

Post Reply