How To Make Passive Income Through Robinhood App By Dividend Investing
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Today I share with you how to make passive income through the Robinhood app by dividend investing in a dividend stock. I give a lot of detail in this video so if you appreciate it smash that thumbs up button and share this video with a friend or family member. Making passive income is actually a lot easier than people think through being great dividend-paying stocks.
Dividend investing is one of my top 5 income sources pretty much every year and could be my biggest passive income source long term. The Robinhood app is phenomenal for new investors to the stock market. Robinhood app allows you to make investments in dividend stocks without paying any trade commission. Most online brokerages charge $5 roughly per investment sold or bought. That is quite high for newer investors.
Passive income is vertically possible for all people but you must put up some initial work to get it. Dividend Investing is one of the easier ways to successfully build wealth in the stock market and passive income streams. As the dividend stocks pay you passive income money from receiving dividends you can then go ahead and reinvest that money into other dividend-paying stocks.
This can lead to massive wealth creation over time as the money compounds. I don’t understand why anyone wouldn’t want to make passive income. In my opinion, passive income streams are one of the Holy grails of money. Dividend investing is one of the best passive income streams one can have. You can do it!
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Well good day subscribers Hope you guys are having a great day out there. As always, if you’re new here I am Jeremy and today I’m going to teach you guys exactly how to make passive income by dividend investing through the Robin Hood app. And dividend investing is a magical magical thing. It’s a way you can compound money.
So your money makes you more and more money. So for instance, maybe at first, you only make in like $20 a year from dividend stocks, then you progress you compound some money next thing you’re making $40 then you’re making $100 then maybe you’re making $1,000 then eventually over time you make so much money in dividend money, you really can’t even keep track of it.
Okay, so let’s get into this already guys, the process I’m about to share with you is actually much much simpler than a lot of people would even realize okay, so make sure you smash the thumbs up button if you enjoyed me sharing this with you and make sure you share this with a friend so they can start actually building some wealth, compounding money and things like that because this is not the most complicated thing in the world.
This is not the hardest thing to do in the world. It’s actually I don’t want to say necessarily an easy thing to do, but it is certainly not a hard thing to pull off. Okay, so let’s start getting into this Okay, so first of all, why should you go through the Robin Hood app specifically.
I think Robin Hood is really phenomenal in because a lot of people that start in the stock market and want to start building well start buying dividend stocks a lot of folks that are doing that are usually buying for hundreds of dollars at a time maybe they’re trying to invest their first.
$1,000 or something like that and so the Robin Hood app allows you to place these trades make these moves started buying these stocks with no Commission on it which is absolutely huge okay because most brokerage houses that if you want to go and buy a dividend stock.
They’re gonna usually charge you $4.95 cent commission for every buy order and sell order you place Okay, Robin Hood doesn’t charge you anything. So basically every trade you get to place you get to save $5 versus like a regular brokerage.
Okay, now I don’t use Robin Hood personally because I’ve been with the company that I’ve been using for over a decade now and they do phenomenal work for me. So I don’t want to like switch over to Robin Hood. However, I cannot say anything bad about Robin Hood.
If you’re investing smaller amounts of money, it’s generally going to be the app you want to go with because they don’t charge commissions and that is that means the world when you’re just starting out, you’re investing your first 100 bucks your first few 100 bucks your first $1,000 those $5 commissions Can Can you know hurt your account in the short term Okay, so that’s why we’re specifically talking about the Robin Hood app.
Okay, so what is the process you need to go through here Okay, the process starts with setting up a robin hood account because you can’t make passive income you can’t make any dividend investing money if you don’t have your Robin Hood account set up so first thing is you need to set up that account it’s pretty much like setting up any bank account you put in your information and whatnot you get that up and rolling okay by the way.
I just want to say This video is not sponsored by Robin Hood I had people you know that work way up at Robin Hood try to contact me about sponsorships I don’t do sponsorships and not interested in them so this video is not sponsored by them.
But just like we talked about it just makes the most sense to go through them if you’re investing smaller amounts of money unless you want to pay $5 Commission’s for each trade. You know generally Robin Hood app is gonna be the way to go.
Okay, so you set up your Robin Hood account, then you need to find dividend paying stocks, okay? So if you don’t know like all stocks in the stock market, don’t pay dividends, okay? There’s a lot of stocks in the stock market that I own even that don’t pay any dividends.
So basically you’re counting on that stock going up in value over time, not paying you out dividends, and when I’m talking about paying out dividends, most companies that pay dividends, they do it every three months, okay? So you need to find companies that pay dividends, you know, I have a ton of videos on my channel, you know, talking about different dividend stocks and there are a ton of other videos here on.
YouTube where other people are talking about dividend stocks, you can go to like Yahoo Finance, you can search lists of like top yielding dividend stocks, or just the top dividend stocks in the Dow 30 and things like that. Okay, many of the companies that are in the Dow 30 which is like the 30 biggest companies in the s&p 500 which is like the.
500 biggest stocks, many of those companies pay dividends Okay, so finding companies that pay dividends is not a hard thing at all it’s actually really really easy to find out what these companies pay you can use something like Yahoo Finance type in a ticker symbol you want to look into Apple stock for instance right type in you know, apples tickers, AAPL type that into Yahoo Finance, you’ll be able to see if it pays a dividend.
I will say right there on like the you know, basically rate when you get on the page, a PL it pays a 2% dividend yield or something like that. So you’re going to be able to find plenty of dividend stocks very easily on the internet, okay, then you need to start doing some research work, okay.
Now if you want to make passive income, you generally always have to put in some upfront work, okay, you always usually have to do something at first, so then it can generate you passive income. So what we’re calling this now the research work, this is your upfront work.
So you can potentially make you know, passive income and this dividend money can roll in for months and months into the future, if not years and years into the future. Okay, so how you going to research these businesses in these stocks, okay?
Is basically what you want to look at. You want to look at the 10k. So there’s a what’s called an investor relations page of every public company out there. Okay, so let’s say You want to go ahead and look into Coca Cola stock you like that’s a stable stock.
You know, that’s, that’s a great company like people drink Coca Cola and they drink the different products that Coca Cola has, right. So you can go ahead and go into Google typing Coca Cola Investor Relations page, that’ll be the first thing on your generally pops up, you go ahead and click on that.
And all the information you could possibly want about Coca Cola corporation is going to be right there on that Investor Relations page to look into this dividend stock. Okay, so you’re going to want to read the the annual report, which is going to give you most of the information you could possibly.
Ever want about the business model, what they’re going after what they’re doing, what their progress has been over the past year, you want to read over the 10 Q, which is going to look at the last quarter versus a previous year’s quarter where the business is going, what you know, the challenges are, what the things are doing successfully.
All those sorts of things you’re going to want listen to the latest conference calls, all this information is on the investor relations page of all public companies, okay. And through that reading this information or listen to these conference calls.
You’re going to go from not knowing very much about a business to having you know, so much knowledge on a business, like you were a high level manager that business or something like that, almost within like a few hours time, okay. And you can, you know, read over these reports again.
So if you don’t catch everything, the first report, go ahead and read over again. So sometimes we lose concentration, right? You’d like you think you’re like watching something, right? But you’re actually thinking about something else. So you’re not even retaining the information or you think you’re reading a book.
But really your your mind is somewhere else. And so you’re going throughout the pages, but your mind is somewhere else, you’re not retaining information. So sometimes that’s going to happen if you read a 10k, read a 10 Q, listen to conference call.
The trick is you want to go over and again and again until you’ve retained all the information in your mind is at a point where you fully understand that business model. Now once you fully research the business, what the competitors are all those sorts of things. Now you’re going to start to be able to, you know, get a good understanding of what that business is going to do over time.
Okay. And if you can see that business increasing, so you got to ask yourself, do you see the business meaning the revenues, the net incomes? Do you see that increasing in future years? Do you see that increasing in future years? And after you’ve gone through all these reports and the conference calls, you should have a pretty good understanding like, Oh, yeah.
I can see this business increasing their business, their revenues and net incomes, their profits in future years, or you know what? I don’t think so I think this is a business. That’s downtrend, you should be able to formulate an idea after you’ve gone through all the information, okay?
People wonder, like, how do you have such conviction on if a business model is going to increase in the future a decrease in the future? The reason I generally know these things is because I’ve gone through all the reports I’ve read about them.
And so I’m understanding the business on a whole other level than like, the average person would understand this business, because you might hear coke cola Corporation, and you might just be like, Oh, I know some of their products. But I actually don’t know if their business is going to increase.
It’s like, you’d be guessing. If you read all the reports on that company, you should be able to say with conviction, yeah, their business is going to be increasing over the next five years. No, their business is not going to be increasing over the next five years, because they have blah, blah, blah, competitor, because that business is declining, because that sector is declining, or whatever, okay?
That’s how you really understand a business on a high level. And if they’re going to be increasing, okay? Now, if you see the business decreasing in the future, then that’s a no stock, meaning it’s not worth investing in, because you never want to be investing in businesses that are in decline that you can see like over the next five years, their business is going to decline more.
If you don’t have faith, that their business in their net income and their revenues and all sorts of things are going to increase in future years, then it shouldn’t be a stock you’re investing because you’re trying to make passive income dividend money from the stocks in future years, you’re not trying to trade in and out of these stocks all the time, he was trying to buy a stock that you feel comfortable putting your money in for the next 357 years.
Okay, so you’ve got to find businesses that you feel comfortable with investing in that you fully understand the biz, how do you fully understand the business, go through all those different reports. And if you’ve gone through the 10k 10 q conference calls, you’ve read about a time and time again, like.
I’ve gone through these reports three times, I still don’t understand that what that business does, then that’s a no stock, you don’t want to invest it, never invest in anything, anything you do not fully 100% understand whether we’re talking stock market, real estate, we’re really talking, you know, you’re giving your money over to somebody so they can invest it for you.
If you don’t fully understand where your money’s going, and what that company is doing. don’t invest in that stock. Okay, you’ve got to fully understand it. And you’ve got to see that business increasing in future years. And if you’ve gone through all these important reports, and you can’t give me a yes on both of those don’t invest in okay.
But let’s say yes, you see that business increasing over time you fully understand the business, you’re like, I know what they do, and I know what they’re going after. I know what their goals are over the future years. Great. Okay, now we can go over here and we can look at their balance sheet.
This is very important. So balance sheet, think about a balance sheet in this respect. Okay? Imagine you you have a balance sheet. you watching this video right now you have a personal balance sheet, okay? You might own a home, okay, this might be an asset for you.
Unless you’re underwater in the home, you basically owe more on the home than what it’s worth, okay, but you might have a home so that is an asset for you. Right? It goes under the asset category. All right. You might own a car. Okay, now if you own that car, you know straight up and you’re not underwater on that car, then that’s a partial asset for you. Okay?
So let’s say your car is worth $5,000. And you don’t owe any money on that you got a $5,000 asset there because you could sell it to, you know, today or tomorrow for $5,000. And go ahead and take that money and do something else. Okay? liabilities are like debt, if you have a massive amount of credit card debt, that’s a liability.
You have your own like balance sheet and your life, right, you have assets versus liabilities, same exact thing for companies, they have assets versus liabilities. But specifically, what interests me when it comes to a stock or company, I’m looking at how much cash they have which cash is a line item on a balance sheet, how much cash do they have?
How much investments Do they have short term investments, long term investments, and I go ahead and add up those numbers. And then I subtract how much debt they have. And so I’m looking for companies that not only pay dividends have an increasing business model, and I can fully understand, but also have more in cash and investments and they do debts, okay?
Now, if they do have more in debt, it can’t be like a substantial amount more or it’s too risky at that point in time. If you’re talking about a debt leading company that has, let’s say, 10 times more in debts, then cash and investments, that’s a little risky, because what happens if a recession happens.
What happens if that company’s business model is hurting a little bit? In the short term, remember, we’re trying to make dividend investing money, you know, passive income money, we don’t want to be having to trade in and out of these stocks all the time, we want to be investing in companies that we feel comfortable in the next 357 years.
If you’re investing in a company that has massive loads of debt, hardly any cash or investments on the balance sheet, you’re sticking yourself in a risky situation, that’s what you’re going ahead and do and you’re sticking yourself in a very risky situation, that if that company goes bad, you’re going to be stuck in a real hard situation and maybe trying to trade in and out of that stock, which is not your goal.
Your goal is to make passive income dividend money Overall, we don’t want to have to be worrying about getting in and all these stocks when you’re trying to do something like this, okay? So make sure you’re finding companies that have great balance sheets loaded on cash loaded on investments, and have as little debt as possible.
Okay, those are winning balance sheets. All right. So let’s say the balance sheets great, we move on to the next step. By the way, if the balance sheets, garbage, they have tons more in debt than they do cash investments, that’s probably not worth the risk. Okay, but let’s say it has a great balance sheet.
Okay, now we go the next step, which is we’re gonna look at three different things in relation to the dividend. Okay, first thing we’re looking at is the dividend yield, which means how much money you get paid out based upon the current dividends, the company pays, okay, so let’s say a stock is $100 a share, okay.
Let’s say the stocks $100 a share, and they pay out $2 a year in dividends? Well, that means they have a 2% dividend yield, because you go ahead and take 100 divided by two, you’re gonna get 2%. Okay, so the company is basically you’re gonna make 2% of your money based upon current dividends, okay, now don’t get too caught up in the current dividend yield, because a lot of great companies.
Especially if that increasing business grade balance sheet, they’re actually going to up their dividend each and every year, okay, great companies that are very well run, they’ll up their dividend. So don’t get too caught up in Oh, this stock pays a 2% dividend yield, this one pays a 4%.
So the four percents better, not necessarily because of the other business has, has a great business that’s increasing, great balance sheet, they’re probably going to increase their dividend massively over the next three years, five years.
Seven years in the passive income will really like you know, start pouring in, because they’re just in a position of power versus some other companies that have really high yields, and see businesses declining, those type of businesses are actually in a position of weakness, okay.
Next thing I don’t want to look at is what’s the dividend history for the stock. So basically, you go to like Yahoo Finance or something, go to historical data and go to dividends only and back it up in the last like 10 years. And you’re going to be able to look at the dividend history for whatever that stock is. Okay.
So let’s say you’re investing, you want to look into Pepsi stock, you’re like, Oh, this is a great business model. I can see it increasing, I understand it, good balance sheet, okay, I can invest in this company. So you’re looking at a Pepsi and like.
Well, what’s the dividend history with the stocks, you go on Yahoo, finance, go to historical data, go dividends only knock it up for the last 10 years, and you’ll be able to see, oh, yeah, this company is paying out dividends every three months, in their increasing every single year, those type of companies we really want to get involved with, you’re talking about making passive income, dividend income, okay.
You want to find those type of companies that have great dividend track histories, not companies that just started paying dividends yesterday, those are risky. I mean, how do you know they’re gonna keep that dividend? They just started paying it or something like that, okay?
You’re companies that are proven that they can up those dividends each and every year, okay? And they pay them every single three months. All right. Also, you want to look at the dividend payout ratio. This basically means of the earnings per share, how much are they already paying out in dividends?
So let’s say you have a stock and they pay out $10 per share in dividends per year, all right, and they have epcs a year of $100 per share, okay, that means they have a 10% payout ratio, which means they could up that dividend massively in future years.
Okay, that would be an ideal situation. Okay. Let’s say there’s a company it has a epcs of $10 per share each year, okay. $10 at UPS and they pay out you know, $2 in dividends, that means they have a 20% payout ratio, which is generally very low.
We’re really looking for payout ratios below 50% if it’s ideal, okay, ideal situation is payout ratios under 50% because that means they have a lot of wiggle room to up that dividend future years if they just make as much money as they did last year, nevermind if they increase that business now they could have that dividend even more Okay, which is a beautiful, beautiful thing.
So dividend yield, we’re looking at dividend track record like the history of that stock paying dividends and the payout ratio. Okay, very, very important. Now everything looks good there, we can move on to the next step, which now you got to invest whatever you feel comfortable with.
Okay, so you found the stock you like, okay, everything everything’s checking out balance sheet, the track record, all those sorts of things business increasing, I understand, I’m ready to invest the stock. Now you got to choose what’s your comfort level with investing, okay, so maybe you feel comfortable investing almost all your net worth in that one stock, okay, if that’s you, you know, do what you want to do, okay.
But you’re generally going to go and want to go with a disciplined approach. Okay. So let’s say you got 1000, your your net worth $1,000. Okay, you got $1,000 in a savings account. And that’s, you know, what you have for money right? Now, you might feel comfortable just investing $100 into it for now.
Maybe $200, maybe $500, do whatever amount you feel comfortable with, at that particular time, don’t invest too much where you it’s at a point where you don’t have comfort, you’re like, you know, can’t sleep at night, because you’re worried about that money and what’s going to happen, because remember, in the stock market, stock prices move up and down all the time, we’re not so worried about that.
If we’re focusing on dividend investing, right? Because our focus, if you’re a dividend investor, your main focus is getting dividend money making that passive income constantly and then reinvesting that into other dividend stocks, so they can make you more money, and more money and the money can compound and compound.
Remember what we talked about at the beginning of the video, like, you know, compounding and building that money, and you’re receiving this much one year, and then you’re receiving this much in next year. And you just keep building and building, okay, so we’re not so worried about stock prices, but still, you’re going to see stock prices moving up and down all the time.
Because this is a stock market, there’s volatility, you got to invest what you feel comfortable with. And at the same time, don’t invest too little, where you’re not even thinking about, okay, let’s say you got a net worth of $10,000, and you invest $100 into a stock.
That’s such a small amount of your net worth, you might not even care if that stock goes up or down, it might not affect you, you want to invest enough, where put you may be slightly out of out of your comfort zone, but not so much where you’re so worried about that money and losing that money.
And what happens if the stock goes down and blah, blah, blah, you don’t want to put yourself in that position. So you’re trying to find that happy medium, where you’re a little out of your comfort zone, but you’re not so much where you’re like freaking out every time the stock market goes up or down or something like that, okay.
And the next step is you basically sit back and you collect dividend money for future years, you keep an eye on things, you keep an eye on what’s going on with that stock, no different than a real estate investor would keep an eye on the property and maybe walk the property once a year or something like that. Or maybe they gotta, you know, get a phone call.
And it’s like, Hey, we need this thing, fix, the sink isn’t working or something like that, okay, there’s a little work, you got to still do. But for the most part, you’re not worried about the stock every day, you’re not even worried about it every month, maybe you keep track of what happens on the quarterly reports every three months.
So every three months, you listen to the conference call and you read the 10 Q and things like that, okay, what’s that take a few hours time, every three months, we’re not talking about a lot of work you’re putting in this is much of just passive income you’re making this isn’t like having a job and you’re collecting this money, you’re collecting this passive income, these dividend stocks are thrown off.
And then you go ahead and you take that money, and you invest in more and you go through the same exact process again, you find some more dividend stocks, you look into them, you research them, you figure out the businesses are great, if they’re increasing likely to increase, you figure out the balance sheet, the yield, all those sorts of things, you find the next stock, and then you’ll start receiving more and more dividend money.
And then you’ll invest that even to more stocks, and you’ll start receiving even more dividend money. And it’s just like a mountain that keeps building and building building as long as you do it successfully. And you’re doing the research work, the initial work, so you can make that passive income in future years.
As long as you’re doing that initial work, you should be able to, you know, build a ridiculous fortune in a matter of 510 1520 years. In the future. You just got to do the upfront research work. So that passive income can just kind of plow in and then you just kind of maintain things every three months. You look at the reports, how’s that company doing?
Is everything still going according as planned? You know, if you’re dividend investing, you shouldn’t be worrying about the stock price too much. It’s more like Hey, what’s going on with the business overall, what’s with the fundamentals?
Is everything still playing out the way I thought it would play out, and if it is great, you should make a lot of dividend money and build and build and build in the future. And that’s how you make a lot of passive income money through dividend investing. And you can use the Robin Hood app for something like that.
You can use other brokerages to do it as well. It’s just Robin Hood’s free to do trades and that $5 is gonna save you each and every time especially if you’re investing smaller amounts of money guys, so make sure you hit a thumbs up if you’re enjoying me sharing this I get a lot of detail here about how to research a dividend stock and things like that.
So I hope you guys really appreciate it. Make sure to share this out with a friend or family member who wants to start building wealth for themselves. All right, thank you for watching. Have a great day.