What is Trading 212
Trading 212 is an investment platform or brokerage. Traditionally investing platforms would charge high trading fees and commissions. Trading 212 along with a few other companies, although mostly in the US are really taking the investment world and giving it a good shake.
I layout my Trading 212 Dividend Investing portfolio along with my thoughts on the platform. My full portfolio is shown in the embedded YouTube video below.
One of the main selling points of Trading 212 is that they offer zero fees and zero commission trades. Not only this but there is no limit to how many trades are done.
They are also executed instantly unlike some of their competitors. I have had my account a few months now, choosing Trading 212 for my dividend investment portfolio has been an easy one, to say the least.
If you are just getting started into the world of personal finance and investing. Getting a book or two to read will be a great help. Here are my personal favourites I think everybody should read.
Want a nice way to track your investments and dividends? Checkout my Dividend Tracking Spreadsheet
Investing with Trading 212
Upon opening my account, I was immediately impressed with the simplicity of the platform. Up until this point I had only used Vanguard. The problem with Vanguard is depositing and withdrawing money takes around 3 days. As does buying shares in an ETF. Not an issue really as they are designed to be held for the long term.
Where I really came to love Trading 212 was once I discovered you can actually purchase shares of the very same Vanguard funds I was already invested in. Namely the ever-popular S&P 500 ticker symbol VUKE for the UK. VOO for the US market.
Of course, I thought why not consolidate all my investments. Combining all my ETFs from Vanguard and all my Dividend paying stocks in one portfolio. After all, who doesn’t want things to be as simple as they can. Dividends are still paid as they would if you held the ETF direct with Vanguard.
My main goal from this point is to create a Dividend Growth Portfolio portfolio. Within Trading 212. To support the dividend investment portfolio, I’ll also have a backbone of Vanguard ETFs. Doing so will help create broader diversity to help minimize risk.
With the ability to deposit cash instantly to and from my bank account and purchase any shares I wish immediately. It seems a no brainer to do all of my investing inside Trading 212s platform.
Does Trading 212 Pay Dividends
Yes, Trading 212 does pay dividends. The money you get from a dividend will show up in your Free funds section inside your portfolio.
When Trading 212 pays a dividend you will also get a notification with all the details. They show how much you have received per share along with how many shares you owned at the time the dividend date was recorded.
Furthermore, you can go into your history tab in the setting and choose Dividends. This will show you all the dividends Trading 212 has paid you with details on each.
Now, this is where things get really interesting. Fractional shares give you the ability to purchase 0.1 or even 0.001 of stock as opposed to 1 or sometimes 2 as the minimum traded.
Essentially, this means we as investors can buy a small slice of a much more expensive share. eg Amazon ticker AMZN is currently trading at $1862. Out of the question for the average investor to purchase even a single share. Fortunately, now Trading 212 have fractional shares we can buy just 0.001 of a share for around $1.86. Very nice indeed, and with no fees to boot.
Any dividends received are received at a rate proportional to the share amount you own. So we do not miss out on those sweet, sweet dividends.
Not only are there many fractional shares already available, I simply messaged them asking for VUKE the FTSE100 Vanguard ETF to be added, and within a week it was done.
Trading 212 Blocked For Pending Orders
If you see blocked for pending orders in your account value. All it means is that you have a pending order that has not yet executed.
Primarily you will see this if you have either placed an order when the market has already closed for the day or when the market has not yet opened in the morning.
Sometime an order may take upto a minute or two to actually execute. You will see blocked for pending orders in this case as well. More often than orders execute almost immediately if the market is open though.
Trading 212 Dividend Reinvestment
Coming soon is a DRIP program too, a Dividend ReInvestment Plan. Although not necessary as we can already reinvest those dividends thanks to fractional shares.
The dividends we get can be reinvested in a different company if we choose as well as we are currently doing it manually until the end of May.
A DRIP allows it to be a fully hands-off system. Personally I think I will reinvest the dividends manually, so I can purchase shares of other companies if I so desire rather than more of the company that paid the dividend.
I would imagine the vast majority of people will turn on the DRIP option once it appears and never have to think about it again though.
It has now been confirmed that a dividend reinvestment plan or DRIP will be coming to the platform in May, it was April but they have pushed back till May as more improvements are happening.
On top of this PIEs are also coming as well in May – similar to M1 finance, we will be able to section of our portfolios into individual pies and set target goals with them.
Dividend Portfolio Trading 212
Trading 212 Dividend Investing. Here is my current Portfolio, mostly structured around dividend investing and dividend growth.
Amongst my positions the only two stocks that do not currently pay a dividend are Alibaba )BABA and Virgin Galactic (SPCE). Also, subscribe and like the video while you watch!
Do you want to get a free stock share worth up to £100?
Create a Trading 212 Invest account using this link www.trading212.com/invite/FMA3SCnL and we both get a free share! A free share to get you started on the Dividend Investing journey with me.
You only have to deposit £1. Even if you already use another platform already put £1 in and grab your free share.
I will be posting regular updates to my Dividend growth portfolio. Detailing any and all growth/ loss (hopefully not much loss) and all dividends received.
My immediate goal is to reach around £250 a month in passive income – not only through dividend investing but this blog and maybe one day get my Youtube Chanel UsefulRandom Investing monetized, although that is a way off.
Trading 212 ISA
Due to current rules of only being able to open one stocks and shares ISA per tax year April-April. I have my current portfolio under the standard Invest account.
This tax year I already opened a Vanguard ISA. As soon as April 2020 comes around I shall be switching over to an ISA account.
It is a tax efficient way of investing, for now, it is not a problem as current laws allow an investor to make £2000 a year in dividends tax-free. Not only this but £12,000 in any capital appreciation before any capital gains tax is due.
Really the only downside to an ISA is it has a max deposit and withdraw of £20,000 per tax year. If you withdraw any money from it, it still counts towards the £20000 current limit.
For more information on Trading 212 account types, you can check out my comparison of the Invest vs ISA. To gain some insight into the CFD side then you must read my post on How Does Trading 212 makes money.
What is missing from the platform?
Since this article was published – company information as listed below is now available within the app on mobile. Not yet in a browser but I am confident it will come. Other major updates like DRIP and PIEs are coming out in late April 2020.
Having only had my account a few months, I have been pleased with them so far.
However, the main thing that is missing is more information on the stocks, we only get basic information such as what exchange they are trading and profit/loss over certain periods such as 1 week, 1 month, 1 year, etc.
It would be very nice to see P/E ratio, Dividend yield, Dividend payout, and Ex-dividend dates at a minimum.
I’m sure these changes will come in time though but for now, I’ve been using sites such as Seeking Alpha to garner as many details as I can about a company before investing my hard earned money, as you should too.
None of the information in this video is to be used to copy, It is not financial advice – I am simply sharing my portfolio and hopefully inspiring even just one person to get investing now.
One thing I will mention is if you are a foreign investor then please check your local taxation laws. For me being in the UK, we are subject to a 15% tax on dividends from US companies.
However, some are worse than this up to 40% in the case of Belgium. Please do your own research before deploying any capital into the stock market.
The best time to plant a tree was 20 years ago. The second best time is now.
Living of Dividend Income
With Dividend Investing my long term goal is to live off dividends and private pensions/ growth investment. long before my state retirement age of 68 that is.
At 55 I can start pension drawdown. Being 30 I have 25 years to build as much wealth as I can – with 55 being my dream age to retire while still young enough to actually enjoy that nest egg traveling and seeing every inch of the world without a care in the world.
While you are here check out my other articles on personal finance, money-saving and investing I hope you start investing today.
Create your own Google Sheets spreadsheet to track your dividends and use the free Finki API to pull in dividend payout dates and ex-dividend dates automatically.
None of the above should be used as financial advice, I am not a professional. Always do your own research.