I’ve been using Robinhood to generate passive dividend income. Robinhood has over 3 million users now and has saved its user over $1 billion in commissions. The NO-FEE commission structure has allowed me to scale up a generous portfolio of stocks over time with no hassle of buying large chunks of a time. If you use my code we will both get a share of FREE STOCK, so JOIN ROBINHOOD HERE. Let’s analyze our Robinhood dividend growth portfolio.
RobinHood Dividend Growth Portfolio Update – December 2017
I will highlight our recent updates to our dividend growth portfolio in our Robinhood account here. From time to time, we will update our portfolio to understand our favorite moves for dividend growth investing. With stocks at all-time highs, we think that it is a great time to stay patient and raise additional cash for future dividend stock purchases. We have recently shifted our focus to the best dividend growth funds.
If I don’t want to take extra risk on a stock, I can scale into a position by purchasing one or two stocks at a time. Conversely, if I think a stock is overvalued I can scale out of a position one share at a time.
In addition, dividend growth investing is one of the best ways to earn income into perpetuity. I love stocks that pay dividends within a healthy dividend payout ratio and provide a strong yield. As dividends increase over time, your yield will increase resulting in more income as time goes on!
What is dividend growth investing?
Dividend growth investing is a concept where you buy stocks that have reasonable dividend payout ratio and and are likely to increase their dividend into perpetuity. We have the ultimate guide to dividend growth investing to help you get started. In addition, review our guide to building a dividend portfolio to get started investing now.
The key to living off of dividends is to focus on dividend growth stocks. Dividend growth stocks increase their dividends annually, which increases our income without doing a single thing.
Why use Robinhood to build a dividend portfolio?
Robinhood is a brokerage firm that offers commission-free stock and options trading for all stocks. Robinhood gained much of its popularity due to the unbelievable interface of the app and simplicity. This has helped a number of investors get involved in the stock market no matter the size of their wallet. You can take $100 and buy 20 shares of $5 stocks for literally no cost.
With commission-free trading through Robinhood, you are able to save significant amounts of money by building a dividend portfolio. Robinhood currently doesn’t have a dividend reinvestment program (DRIP), so you can manually invest in stocks one share at a time. I suggest using a different brokerage account for your DRIP stocks. Here is a list of no-fee dividend reinvestment plan stocks.
To find out where your Robinhood dividends show up follow these steps:
- Open the Robinhood app
- Click in the top left to view your navigation panel
- Push the section ‘History’
- In your history it will show you both future and historical dividend payments for stocks that you own
Check our our Robinhood app review and dividend guide for further information.
Dividend Portfolio Allocation with Robinhood
I suggest the following allocation of exposure to different types of dividend stocks to ensure a successful dividend growth portfolio:
- 20% of your dividend portfolio should be allocated to Dividend Kings
- 35% of your dividend growth portfolio should be allocated to Dividend Aristocrats
- 30% of your dividend portfolio should be allocated to up and coming dividend stocks. We want stocks that have demonstrated a track record of increasing their dividend and rewarding shareholders. These stocks are not considered the ‘classic’ dividend growth stocks like the Dividend Kings or Dividend Aristocrats.
- The remaining 15% of your asset allocation in your dividend growth portfolio should be international dividend growth stocks. You can get a basket of international dividend growth stocks by investing in a global dividend growth fund. Or, you can select individual blue chip international dividend growth stocks.
Keep in mind Dividend Aristocrats have a strong track record of success. Dividend Kings are likely slower growers but have an even better track record of success.
New Dividend Stock Purchases in our Robinhood Dividend Growth Portfolio
I suggest buying high yield stocks in your Robinhood dividend growth portfolio. This will enable you to reinvest your income to additional dividend paying stocks and start your investing snowball to capture compound interest.
- TerraForm Power (TERP): I like the prospects of the company under new ownership with Brookfield. They recently refinanced their senior debt and are realigning their capital structure. The prospects for renewables are bright (no pun intended) despite some minor headwinds.
- General Electric (GE): The carnage is not over yet for this “blue-chip”. They are likely to get removed from the Dow and recently cut their dividend. I think the dividend cut was a great move to reinvest cash flow into the business to reinvigorate growth.
New Dividend Stock Sells in our Robinhood Dividend Growth Portfolio
I rarely sell dividend growth stocks. I love dividends, so if a stock has appreciated significantly in value I will take some chips off the table to reinvest the profit into other dividend paying stocks.
- Boeing (BA): While I like this name, I am up over 100% on my investment and the yield has come down to ~2.36%. I don’t have a problem with taking some chips off the table and rolling it into higher yielding assets.
See Related: M1 Finance vs Robinhood: What is Better?
Resources to Start Investing for Passive Income
Investing for passive income is achievable. In addition, it is possible to live off dividends forever. Here are a few dividend growth investing resources to help you increase your income:
- Building a Dividend Portfolio Infographic
- Ultimate Guide to Building a Successful Dividend Portfolio
- List of Dividend Kings for Dividend Growth Investing
- Free Downloadable Dividend Discount Model
- List of No-Fee Dividend Reinvestment Plan Stocks
- Top Investment Myths to Avoid Before Investing
As always, ask away in the comments section below. Feel free to provide your inputs and share on social media. Escalate your life. Earn passive income through dividend growth investing to achieve financial freedom and travel the world. Learn how you can live off dividends forever.
What would you invest in your Robinhood dividend growth portfolio? Let us know in the comments below. We’d love to hear from you.
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