Robinhood vs. Interactive Brokers: Smackdown!

I’m working on making my own index fund. And it’s proving surprisingly difficult.

The Goal

My goal is to create a portfolio of the highest yielding Dividend Aristocrats. Dividend Aristocrats are blue chip companies that have increased their dividend every year for at least 25 years.

But even being an Aristocrat isn’t enough for your demanding author. I want only stocks with a yield above 3%, so I have some chance of keeping up with inflation.

I call this special group the Dividend Royals.

So which broker should I use to construct this portfolio?

The Contestants

In this corner: Robinhood!

Robinhood is one of the best known brokers today. It took the financial world by storm by offering zero commission trades.

And in this corner: Interactive Brokers!

This stalwart of finance has existed for decades and offers sophisticated tools to active investors.

Who will be the next champion?

Fight!

Robinhood is dead simple. Its intuitive mobile app makes it easy to buy and sell shares of stock, including fractional shares.

And then there’s the feature that made it famous: no transaction fees.

But Interactive Brokers no longer charges fees either in its Lite product. And its Pro offering can get you such great prices on shares that it should be worth the nominal fees if your trades are large.

Robinhood’s simplicity is also its Achilles’ heel. It lacks many of the powerful research and trading tools of Interactive Brokers.

Implementing a Dividend Royals strategy would be manual and painful.

What’s more, if you ever decide you’re sick of Robinhood, it’s expensive to get your money out. Robinhood charges you a usurious $75 fee.

Interactive Brokers charges nothing.

By Unanimous Decision…

Interactive Brokers is a much better choice. Its trading tools are powerful and its fees are even lower than famously cheap Robinhood.

I’m working with Interactive Brokers’ support to find out how to implement the Dividend Royals strategy using their BasketTrader tool. I’ll keep you posted!

There will be no blog on Monday. I’m background acting in an awesome forthcoming show from Netflix!

See you Tuesday. Have an awesome weekend, everyone!

More on markets:

Let’s Make Our Own Index Fund!

Plaintiffs Fight Back in Citadel Lawsuit

Starting a Financial Plan from 0

Photo: “Packerland Pro Wrestling – Roadhouse Rumble” by Ross LaRocco is licensed under CC BY-NC-SA 2.0

If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s