I haven't deposited a single penny into my Robinhood account in the past 6 months. How did I buy more shares?

The funds I use to achieve my long-term goals are held in a combination of retirement accounts and brokerage accounts. But a few years ago, I opened a Robinhood account for what I call "fun investing".

Please be assured that this is a term I have coined. In a nutshell, the investments in my Robinhood account are not for long-term goals. Instead, they are designed (ideally) to make me money, so that I have the freedom to make money when I want to (remember, I'm very careful about taxing capital gains).

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Because of this, I don't fund my Robinhood account very often. I focus more on funding my kids' college accounts, my retirement plan, and my long-term brokerage account.

As a result, I haven't deposited any money into my Robinhood account in 6 months. However, I did buy more stocks. Here's how I did it.

When you use the dividend income for your work

Many of the stocks in my Robinhood account pay dividends. Dividends are a way for a company to share its wealth with its shareholders. Companies don't have to pay dividends, so some companies don't pay dividends. Even companies that start paying dividends can stop the practice at will.

But as an investor, you can think of dividends as a nice little bonus. If you're good at managing your dividends, they can help you grow a lot of wealth over time.

You see, when you receive dividend income, you have a choice. You can take the money and spend it on whatever you want, or you can reinvest the dividends and use the money to buy more different stocks. In my Robinhood account, I chose the latter, which explains why I was able to buy more stocks without adding any more money.

One great feature of Robinhood is that you can set up a dividend reinvestment program so that as the income comes into your account, it is automatically used to buy more shares of the company that paid the dividend. And since Robinhood allows you to buy fractional shares, you don't have to worry about the dividends not being enough to buy the whole stock.

Let's say you received a $12 dividend and want to use it to buy a company with a stock price of $48. Robinhood and many other brokerage firms allow you to make a zero-share investment, in this case a quarter share of the stock you want.

Don't just chase the dividend.

Holding dividend-paying stocks gives you the opportunity to receive these dividends and to use them to increase your portfolio and your wealth. But there is one thing you should never do, and that is to buy shares simply because they pay good dividends.

As mentioned above, companies are not obliged to maintain dividends. Furthermore, a generous dividend does not necessarily mean that a company is in good financial health. It simply means that the company is choosing to pay more to its investors. It's like having a debt-ridden uncle who brings you great gifts every time he comes to visit. His finances may be in a mess, but you wouldn't know it from an outsider's point of view.

That's why you can't use dividends as a basis for buying a company's stock. Instead, you need to look at the company's financials to see how well (or poorly) it is doing. However, if you decide to invest in a company that happens to pay a dividend, then you should take the opportunity to invest more with that money.

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We believe in the Golden Rule and therefore the views expressed in this article are our own and have not been checked, approved or endorsed by the advertisers.The Ascent does not cover all offers on the market. JPMorgan Chase is an advertising carrier partner of The Ascent, a division of The Motley Fool.Maurie Backman does not own any of the stocks mentioned above.The Motley Fool has a position in JPMorgan Chase and recommends JPMorgan Chase.The Motley Fool has a disclosure policy.

I haven't added any money to my Robinhood account in the last 6 months. How I Bought More Stocks was originally published by The Motley Fool.