Have you ever heard of trading stocks for free and thought ‘that’s too good to be true’? Thanks to the Internet, it’s no longer too good to be true – but there are things you’ll want to know before getting invested. RSG contributor Chonce Maddox Rhea shows how you can make money with these stock buying apps below.
In the past, hearing the words ‘free stock trading’ or ‘investing in the stock market’ made me feel pretty intimidated. Seeing coworkers at my last job pull out their phones to check their stock buying apps and the S&P 500 while talking about how the stock market was doing made me feel out of place.
I didn’t know much about stocks or even how trading stocks worked. My assumption that stock trading was confusing and complex territory, which couldn’t be further from the truth.
Let’s face it: many of us would like to have our money work for us. Maybe you want to invest in something but don’t know where to start. Perhaps, you’ve heard horror stories about how people lost a ton of money in the stock market or you watched Wolf of Wall Street and concluded that trading stocks is just a dirty and dishonest business.
These are more myths that aren’t based on solid facts. Stock trading is something that anyone can learn how to do and it can help you diversify your assets to grow your money faster.
Plus, now is the best time to learn and practice because there are tons of websites and stock buying apps that will help you get started with very little money. No need to be an expert!
Get started with our recommended stock trading platforms below:
How Stock Trading Works
The goal of stock trading is to buy low then turn around and sell high. It’s similar to flipping items to resell for profit – only you don’t have to do much work outside of buying certain stocks.
Traders want to make money off the stock and sell it for more than they paid for it. Sometimes you may get lucky and get a piece of dividends.
A stock dividend is a payment to shareholders or stock owners. Dividends are usually paid out four times a year or once a quarter.
Stock traders can be successful if they are brand new to trading or more experienced. The goal is to always try and profit when selling.
Traders buy and hold on to the stock until the market changes and the stock they bought is going to rise. One way to make stock trading work is by keeping things simple.
There are many ways to trade stocks (including using the stock buying apps below), but some options will charge you a fee to sell. This is why free stock trade options are better if you’re looking to reduce your out-of-pocket costs.
How Online Brokerages Make Money from Free Trades
If you look closely into the stock trading world and stock buying apps, you’ll notice that some online brokers charge for trades and others don’t. This may lead you to wonder how online brokerages make money from free trades and continue to stay in business.
It’s important to realize that online brokers make money in other ways too. They may charge account holders a fee which could be equivalent to a percentage of your portfolio balance.
The main way brokerages make money is by earning interest on a client’s cash balance.
The more clients they have who are investing money on their platform, the more a brokerage can make. Yes, you will make money on your investments too thanks to compound interest, but the broker is likely earning even more.
I asked Kevin Matthews, a financial advisor, what his thoughts were about more online brokers allowing free stock trades:
“As a whole, the industry is trending toward lower-fee/free-trading in general. For 95% of people, you’re going to get the same results from free stock buying apps like Robinhood or WeBull that you would get on more expensive platforms by more traditional financial companies.”
How to Get Free Stock Trades: Stock Buying Apps
How can you trade stocks for free? It turns out, you have a few options with the following free trading platforms below.
WeBull
WeBull is a stock buying app and platform for investors to have an all-in-one user experience when it comes to investing in the stock market. They have advanced tools and services that aren’t available everywhere. Some of those key features are.
- Free real-time quotes
- Zero Commission
- Full extended hours trading
- 24/7 online help
WeBull accounts are protected up to $500,000, including $250,000 for cash claims. Webbull states they stay up-to-date with data security so they can protect investor’s personal information.
WeBull can provide investors with up to 4X day-trade buying power and also 2x overnight buying power with a margin account. You must have at least $2,000 to qualify. Webull doesn’t charge any sort of commission for trading stocks.
However, fees are still applied from the Financial Industry Regulatory Authority (FINRA), Securities and Exchange Commission (SEC), and the Office of the Comptroller of the Currency (OCC), but Webull does not get a profit off of these.
There is also no fee for depositing or withdrawing your funds from your U.S. bank account. You can short stock on Webull, but you must have a margin account and the net account value has to be $2,000 or more.
Robinhood
Robinhood is one of the pioneers of commission-free investing.
Robinhood as a stock buying app allows investors to make unlimited commission-free trades in ETFs, stocks, and options. ETFs just stands for Exchange-Traded Funds, which represents a basket of funds like stocks, bones, and commodities. ETFs are generally cheaper to invest in and they offer a variety of options.
In fact, Robinhood is one of the best free trading platforms for newer or budget-conscious investors since you can get started with very little.
Robinhood has options to invest in over 5,000 different stocks for as little as $1. Trades made during market hours, 9:30 AM EST – 4 PM EST, are placed at that time, so investors will always know the share price.
To get started with a Robinhood account:
- You must be 18 or older
- Have a valid social security number
- Have a residential address in the United States or Puerto Rico
Robinhood currently doesn’t support a few assets like:
- Foreign-Domiciled stocks
- Select OTC Equities
- Bonds and Fixed-Income Trading
- Preferred Stocks
- Mutual Funds
- Tracking Stocks
- Foreign Exchanges
However, I feel this makes it easier for beginners to get started and make money with free stock trades. You don’t have to understand every type of investment and term to use Robinhood. They help guide you in the process and eliminate the fluff so you can focus on getting a stronger foundation with investing.
You can buy and sell stock through Robinhood right from your mobile device or your computer. Robinhood is one of the few brokers that lets investors trade cryptocurrency as well.
SoFi Investing
SoFi offers a lot of financial services, including SoFi Investing. Investors will have both active and automated trading as options.
Sofi Invest is another way to avoid high costs and just have to pay as little as $1 to begin trading ETFs and stocks for free on its stock buying app.
SoFi Invest makes it simple to spread investors’ money out across curated ETFs, crypto, stocks, and stock bits. Stock bits let users invest in their favorite companies without committing to a whole share. Some people refer to this as fractional shares.
Let’s say you want to buy Google stock. To buy one share of Google is over $1,400 right now. You can buy a fraction of that share and still own some Google stock even if you can’t afford to buy a full share right now.
When getting started, SoFi allows you to invest up to $5,000 instantly and it will take up to 2 business days to clear your transfer. If you ever have any questions, SoFi offers support through email, chat, or phone.
How to Make Money Trading Stocks with Stock Buying Apps
Free stock trading platforms like WeBull make it easy to buy and sell stocks even on your mobile device.
Start by creating a watchlist on WeBull to monitor some stocks that may be an option to buy in the near future.
When you’re ready to buy, you can choose whether you’d like to pay the current market value of the stock, or if you’d like to bid on it, but stick within a certain spending limit. You can load your account with funds that will allow you to see how many shares of a particular stock you can buy.
Again, the great thing about WeBull is that you don’t have to pay anything to buy or sell your stocks. Watch the tutorial below to see how easy it is to buy your first stock.
You can see what the WeBull platform looks like around the 2 minute mark, and see what it’s like to place an order with WeBull at the 5:30 mark.
With SoFi, you can start investing in stocks with as little as $1. You’d be buying fractional shares (a smaller piece of a single stock share) but it’s still something you can sell on the platform fee-free.
Just like with WeBull and Robinhood, you can view details on each stock and select which stock you’d like to buy. SoFi calls their fractional shares ‘stock bits’ so you can always invest less than the price of one share (as low as $1) to get started.
You can see what the SoFi app looks like at the minute mark below, and how to place an order with SoFi around the 6:30 mark.
How to Make Money in the Stock Market for Beginners
Wondering where to start if you know nothing about investing in stocks? Start by educating yourself whether it’s reading books, downloading a few stock buying apps, listening to podcasts or following certain stock experts online.
Kevin suggests the best way to learn is to have a plan and practice as often as you can.
“My best suggestion is using the ThinkOrSwim platform and get very good at making consistent profits in their simulation program,” Kevin says.
Market Watch also has a free stock trading simulation where you can practice trading stocks with fake money so there’s no risk involved – just training!
Other Resources to Help Beginners:
- Tela Holcomb – learn how to trade in the stock market in plain English
- Morning Star Investing Insights – podcast
- A Beginner’s Guide to the Stock Market by Matthew R. Kratter – book
- Best on Stocks: The Little Book That Beats the Market – book
- Let’s Talk Money! With Joseph Hogue, CFA – YouTube channel
How to Invest in Stocks
As you can see, investing in stocks is not as difficult as it sounds. Stocks are bought and sold on stock markets (often through online brokerages) which allow buyers and sellers to exchange shares of publicly traded companies.
However, there is some risk involved and I’ll explain more on that in a bit.
To get started, consider using any of the three platforms I mentioned above. Free stock trading with stock buying apps is the way to go especially if you’re a beginner.
With Robinhood, start by searching for which company you’d like to invest in and do some basic research to see if the company’s stock has been trending upward.
Robinhood allows you to look at past stock performance as far back as 5 years. The goal is to invest in a stock that is likely to increase its value in the future. That way, you’re buying low and can sell when the stock price is higher to make more money. However, you may not always pick a stock that goes up over time.
Or, you may have to wait it out if there’s a market correction and stock values drop. This is the risk you take on when you start investing in stocks.
To learn more about buying and trading stocks on Robinhood, check out this video below.
How Much Money Should I Invest to Make $1000 a Month?
The stock market is always changing, so there is no clean way to guarantee you’ll make $1,000 a month. Investing is also a waiting game. It takes time for stock values to go up and for your investments to produce sizable dividends.
Plus, Kevin explains how there are so many different ways to invest and gives a good example of a realistic scenario:
“For example, if you’re a value investor (someone who likes to buy quality companies when they’re low and sell later), it may take more time to see a profit and you may not be able to make $1,000 per month without tens of thousands of dollars. If you’re trading options instead of stocks, you have a much greater likelihood of hitting that goal but you also have a much greater chance of losing as well.”
While investing in stocks is not going to make you a ton of money quickly, it’s still worth it if you want to grow your money over time and diversify your assets.
Need to make $1000 faster than that? We can help! Here’s how to make $1,000 fast.
Summary
Investing in stocks is one of the best ways to build wealth long term. Free stock buying apps and platforms make it easy for beginners to save money and still gain experience with trading stocks.
You can start with as little as $1 – $100 in most cases so be sure to use the resources mentioned here to explore stock trading further and get started for free.
Have you ever thought about using brokerages like WeBull, Robinhood or SoFi to trade stock? If you’re not currently in the stock market, what questions do you have about it?
-Chonce @ RSG
Get started with our recommended stock trading platforms below:
