[QuackingJimbo]

Robinhood is a predatory lending scheme. The vast majority of its users should not be trading anything other than indexes.

[almost_usual]

It's everyone's right to shoot themselves in the foot with dumb financial decisions. Robinhood isn't doing anything egregious here, they're only reducing friction and fees.

I've used the app sparingly in the past with "fun money" but haven't done serious investing with it.

[elliekelly]

> It's everyone's right to shoot themselves in the foot with dumb financial decisions.

The industry regulations would indicate otherwise. Generally, the “dumber” the money, the more regulatory protections that will apply. At their core, financial regulators are consumer protection entities.

[webninja]

You can still legally bet your whole life savings on one spin of the roulette wheel. Here’s a guy that did just that:

https://youtu.be/zGCdBsOIKYA

Doesn’t mean you should though. Also Vegas doesn’t have the reputation for capital preservation and growth that brokerages have.

[paxys]

So Robinhood is now loaning money to helpless people at exorbitant interest rates? Or did you just make up a new definition for "predatory lending"?

[dnadler]

Last I checked, their margin rates were ridiculous. So that description isn't as far off as you might think.

[AznHisoka]

Can't you say the same thing about everyone using any other retail brokerage?

[QuackingJimbo]

No. Upstanding retail brokerages (such as Interactive Brokers) don’t make interest on their customers’ balances.

[zinclozenge]

They make it abundantly clear that options are risky.

[iscrewyou]

I have a couple of shares on the app for a company. Just for anecdotal data. It’s fun to see. I would never put large amounts of my money in there.

[QuackingJimbo]

Good for you. (Not sarcasm —- this is what individual stock investing should be for retail. For fun, to have a tiny bit of skin in the game.) But many people let it get out of control, either because they lack this self discpline, or because they randomly see positive results and then think they’re good traders.

[benj111]

Lending?

What makes them worse than than anyone that charges a fee?

[QuackingJimbo]

The ones who charge a fee don’t make interest on your balances.

[levosmetalo]

Care to elaborate? I was under the impression that Indexes are treated the same way as stocks.

[QuackingJimbo]

Amateur investors are best off buying indexes and holding forever. Robinhood entices them to trade in and out of individual stocks (or worse).