Dividends for Days: Is Robinhood a Good Idea?

I have two main investment strategies. 

1. Monthly dividends
2. Index funds

I've transitioned all my investing over to Robin Hood. I've tried a few investment apps, but I'm currently in love with Robin Hood. This app allows you to trade without fees. No fees. No monthly fees, no trading fees. I like free. Its great. This allows people to really customize their trading. Here's my plug, get the app with this link and you'll get a free stock. Its random, so it could be a biggie like apple, or it could be some penny stock. It'll probably be a cheap stock. I didn't use a link. I didn't get a free stock. If you want to get a freebie, use a referral code, even if its not mine!  https://share.robinhood.com/lancem129

I'm going to be focusing today on monthly dividends. There are several stocks, bonds, and other funds that will pay a dividend every month. This got me really curious. I've thought about buying a rental property some day, and I was wondering how the two of these compared. Going in, I thought that these stock options wouldn't pay nearly as well as having a duplex to rent out.

Here's what I discovered

You can find stocks that pay out as high as 8% annually in dividend payments, and in monthly installments. I have a list of the ones I like that offer a 4-10% dividend rate that I'll include at the bottom of this article. I have a couple stocks right now that are in the $20 price range, and they pay $0.11 per month. That doesn't sound like a lot, but that's a 6.6% return over the course of the year. Not great, but not bad. Lets put that in terms of a housing unit. If I wanted to buy a duplex in Provo, Ut to rent to college students, there are a few options on the market for, at the lowest, $250k. Lets put our stocks into numbers that size. That equates to 12,500 stocks, and will make you $1,375 per month. Since this is a duplex, that equals two tenants paying $687 per month.

You can probably get as much as $900 per month from a Provo apartment, but lets look at things practically. There is no maintenance with these stocks. You don't have to check up with people and make sure you get paid. You don't have to make sure there is always a person in it. In fact, you don't have to deal with people at all! As an introvert, this makes me happy. It's automatic, and hands off, PASSIVE. I like passive.

Ending value 

Stock prices fluctuate, but so does real estate. We don't know what will happen in either. There is risk involved, but there is always risk if you want reward. Stocks in Robin Hood have a much higher liquidity though (i.e. you can sell them and get your cash back easier).

Compounding interest

What is compounding interest? Its interest on your interest. Its getting paid for getting paid. Its what investment dreams are made of. Its harder to get real estate investments to compound. You'd have to have enough money to get another property. Dividends can be reinvested much quicker, which means your money will be making money quicker.

Which ones do I like? 

The stocks below are all trade-able on Robin Hood, and have a dividend rate of between 4.5-11%. The higher the interest rate, the higher dividend rate, the more "risk" people associate with these stocks. I personally am buying all of these in this list. I buy one of each, so I have the same number of each stock. Diversity is important. If one of these tanked, and I'm invested in all 10 of these, its not a big deal. No, it wouldn't be pleasant, but it wouldn't be the end of the world, or even the end of my financial future.
GNL
EPR
CLDT
NYMT
MAIN
STAG
WSR
LTC
O
LAND

Every person's investment strategy is different. I'm not your financial advisor, I'm just a guy with some thoughts, trying to be successful, so do your research! I looked into these stocks, and I like them alright, but do your own research. Already have a favorite investing strategy? Let us know in the comments below! Also, here's the referral link again! https://share.robinhood.com/lancem129

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