Robinhood or Loyal3: Commission-Free Investing. Invites Available!

I’d like to quickly touch base on two of the most popular commission-free trading platforms.

First Loyal3. Loyal3 has become popular among the dividend investing crowd. While it doesn’t offer the largest selection of stocks (currently 64), there are plenty of high quality options on it. It also offers some growth stocks that do not pay a dividend. And, it is one of the cheaper ways to participate in an IPO.

I’m currently investing $75/month into Loyal3 dividend among three stocks, Berkshire-Hathaway, Disney, and Unilever. I’ll likely up that amount over time, but I don’t want to take too much away from accumulating cash in my Schwab account to purchase larger numbers of shares.

Loyal3 used to offer the ability to make stock purchases on a credit card (thereby collecting rewards), but too many people were abusing that option by buying and selling shares on credit card just to game the system and collect all the rewards. Loyal3 had to wisely turn off funding via a credit card, I’m sure, in order to stay a viable company. Purchases and sales made on Loyal3 can’t be timed as each order is grouped together. This cuts down on their costs.

Loyal3 offers web access as well as an iPhone app.


Robinhood is a newer brokerage account that is currently invite only. Unlike Loyal3, it is currently iPhone access only. They say they are also working on a web interface. It is also commission-free, but unlike Loyal3, you have access to the all the stocks traded on US exchanges. Purchases and sales are made as close to realtime as possible.

I funded my Robinhood account with a small amount of money, but have yet to make my first purchase. So far as I’ve used it, it seems to be exactly like the more traditional brokerage accounts at places like Schwab, TD Ameritrade, etc but with a flashier iPhone app. Research options for stocks are, however, extremely limited. In fact, Yahoo Finance or Seeking Alpha provides way more stock information than is available from the Robinhood platform. However, that’s a price that I’m sure many people would be willing to pay to have zero commission costs.


My first thought when I heard about Robinhood and got my invite to join was how in the world is Loyal3 going to survive! Loyal3 only offers a handful of stocks while nearly the entire stock universe is available commission free on Robinhood.

The catch for Robinhood is that, like a traditional broker, only full shares can be purchased. And, at this point you can’t set up a recurring investment plan. Through Robinhood I would no longer be able to devote a small amount each month to purchase partial shares of Berkshire-Hathaway, for example.

For people that trade often or in smaller amounts, Robinhood is a great option. The commission costs would really eat into any profit for them.

When I choose to make a stock purchase I wait until I have accumulated at least $1,500, meaning that my initial commission cost is less than 0.6% (for a $8.95 commission). Yes, those expenses add up, but I trade so little that in the long run having my portfolio be as consolidated as possible is best for me.

Therefore, I’d recommend Robinhood for those people interested in opening their first brokerage account, those that want to diversify into a few accounts, or those people that want to have the entire stock universe available but can only do small purchase at a time.

I’d recommend Loyal3 for those investors interested in dollar-cost averaging into a few select stocks via small monthly amounts debited from their checking account. These people should like accumulating partial shares of companies that are perhaps too expensive for them to buy full shares in.

I am currently out of invites. But, a few people should hopefully be getting back to me with more. Request one in the comments below. Please just include your email in the form…you don’t need to display it publicly in the comment. Thanks!

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42 Responses

  1. While the invite would be great, until they have a web-based platform, I’d be unable to invest since I don’t have an iPhone or other iOS device. I think they have a viable platform, but don’t have the monetization options that Loyal3 has via IPOs and social stock programs. Of course, as soon as they break out a web-based option I’ll be sure to check them out, given the commission free nature and ability to invest in any stock.

    Ultimately, the more options investors have, the better. The last two decades have been quite fruitful for the little guy in this regard, and I think further innovation will continue to push the boundaries establish by the old guard.
    writing2reality recently posted…Passive Income and Pageviews – November 2014 UpdateMy Profile

    • scott says:

      I agree, W2R. I’ll see what the level of interest is in the invites here over the next few days. I’m expecting them to come out with a web interface pretty soon. However, by that time they’ll probably open it up to the public as well so the invites won’t be needed then.

      While my current commissions aren’t bad at all at Schwab, competition is good…hopefully Schwab will ultimately end up lowering their rates even more!

  2. Dylan says:

    Thanks for sharing the chance to learn more about Robinhood. If you still have invites available, I am interested.

    -Lurking reader

  3. Brian says:

    Hi, I would be interested in the Robinhood invite. Very nice site you have here. thanks,

  4. Becky says:

    Hi. I would love a Robinhood invite! Been using Loyal3 but very keen on checking Robinhood out. Many thanks

    • scott says:

      Hi Becky, thanks for reading the site! You have just been sent the final invite. If anyone wants to leave links to their invites to Robinhood, feel free to do so in the comments.

  5. The two of them are very interesting but (I think) not available for foreign investors 🙁
    Thanks anyway.
    CZD.
    Cazadividendos recently posted…Revisión de UnileverMy Profile

  6. Josh says:

    Would love an invite if available. Thanks in advance

    • scott says:

      Hey Josh, thanks for reading. Unfortunately, I already gave away my third and last invite. Hopefully they’ll send out more soon or someone here might leave some available in the comments.

  7. Steve says:

    Anyone have an invites to share? I’ve been on that crazy wait list for 4 months! As soon as you go 2 forward, you go 5 back.

    Thanks

  8. Jonathan says:

    I’d love an invite if anyone has one, I keep going backwards on the list. Being number 370,509 I know it’s going to take awhile.

  9. Patrick says:

    I would love an invite if anyone has an extra!! Thanks!

  10. scott says:

    As of right now I have one invite left. Let me know if you want it. Thanks!

  11. Drew says:

    Scott, would love to have that last invite if you still have it. Thanks.

  12. Rich says:

    I would love an invite if you still have any left! Thank you!

  13. Kelly says:

    Hey Scott, I know that you don’t have any at the moment but it would be greatly appreciated if you could throw me an invite when you chance upon one. Thanks for your time!

  14. ryan says:

    I would love an invite, if and when you get more. If selected I will repost a link to my invites in return.

    Thank You,
    Ryan

  15. Patrick says:

    I like the idea of being able to make smaller purchases more frequently as opposed to wait to make one larger trade because of the commission. If you have anymore invites I would appreciate one. Thanks!

  16. scott says:

    Here are two more invites:
    https://www.robinhood.com/signup?invite_code=JZTJ3G5N
    https://www.robinhood.com/signup?invite_code=NRX7XW3Y

    (If you use one, please comment here to let others know. Thanks!)

  17. ruzz says:

    invite for me please! I use vanguard and loyal3, never heard of robinhood but def got my interest!
    ruzz recently posted…How snow storms are like investingMy Profile

    • scott says:

      Hey ruzz,

      You know, I think they finally opened it up to the public. Just go to their website and/or download the app. You’ll be able to sign up through that. Good luck!!

  18. nikolajs says:

    Thank you for this great write up. i just found out about loyal3 and was doing some research about them and came across your article. If you have anymore invites to robinhood, i would love to have one. Thanks!

    • scott says:

      Hi Nikolajs, thanks for commenting. The post is a little older and came out when Robinhood was invite only. I believe that it is open to everyone now if you just visit the site and download the app. Good luck!

  19. I would like an invite if you have any left and if they are still doing this. Thank you!

  20. Slava says:

    Great article, can u recommend any sites for non americans?

  21. Thomas McClure says:

    Can I have an invite?

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