Reinvesting dividends- what your take?
I am investing in ETFs (VOO, VGT, VTI etc.) and also individual stocks through robinhood but found out there is no dividend reinvestment program in it. I found out vanguard does it automatically. Does vanguard reinvest dividends/earnings back into buying the same ETF it came from automatically (at what price or at fixed time period)? Is the fees assosicated with this reinvesting worth it? I am not investing in ETFs through vanguard currently (only robinhood)- what do you suggest I do?
Jfyi m1 finance is only for citizen or green card holder. If you are on H1b you can’t open m1 finance account
Investing in ETF in Robinhood doesn’t seem a good idea.
Why?
A few factors, but in a nutshell: the business model of RB is based on taking a small percent when you make a transaction. For investing in a ETF I guess you would like to do it pretty regularly over time (eg every paycheck). On the long term it will cost you. Second factor, RB doesn’t allow Dividend Reinvestment, which is an important tool on the long run (usually there is no fees associated to this). Finally, over the next 20 years, I would tend to think Vanguard which is managing assets since 40+ years more safe than RB which just started.
M1 , stockpile , motif , sofi invest
Just buy etfs regularly. Dividends reinvestment usually is free for mutual funds, I use them in Roth IRA and 401k.
Vanguard itself doesn’t charge any fees for reinvesting dividends, and yes, the dividends are used to buy more of the same security. If I were you, I’d just move the money you have invested in vanguard at Robinhood to Vanguard itself. There are no account fees at vanguard, and really no downside unless you wanted to buy non-vanguard funds. But for those, just buy those at robinhood if you like it.
Can you move the etfs outside of robinhood to vanguard without paying a penalty?
Vanguard does allow auto dividend reinvestment
Ya stop using robinhood and grow up
Diversify your portfolio until you reach $1k/mo in dividends. This means buying other stocks with the dividends and not just reinvesting into the same stock.
If you have enough savings, BofA/Merrill Lynch gives you free trades.
Just use M1
What is M1? Can you please explain?
It’s a free brokerage service like Robinhood that lets you divvy up your positions in the form of percentages of a pie. It offers automatic reinvesting (which will just be divvied up accordingly to your pie) and stupid simple deposits. If all you’re doing is passively investing in ETFs the service provides more than you need.