Imagine an investor watching stock prices rise on their phone in real time, feeling the pressure to buy before missing out. In today’s modern world that is a reality for the everyday person. You don’t have to be financially savvy or need tens of thousands of dollars to invest. Applications such as Robinhood gave access to everyone to the financial markets. Before investment apps, people would invest through full-service stockbrokers. The emergent of Robinhood, made investing with a click of a button become a reality.

Robinhood delivers to its consumers an accessible, user-friendly application with commission-free trading. Their target audience is younger retail investors. They heavily rely on digital marketing, educational content, influencer partnerships, and word-of-mouth referral. Their platform is free but also offers a subscription for members that want perks and rewards, drawing consumers to the subscription base model of their platform. They brand themselves as “democratizing finance for all” and “we are all investors”. They also gamify their platform with creative promotions and sweepstakes, making investing feel like a game.

Investing $100 a week compared to saving $100 a week for 40 years.

I imagine everyone has seen a similar picture above. This example illustrates investing into an index fund such as the S&P 500. Historically, the S&P 500 gives a return on investment between 7-10% over the course of years of investing. Based on how risky an individual would like to invest, the return on investment may vary drastically. A person who would like to invest with retirement in mind should consider less riskier options such as the S&P 500. The more a person invest into new and emerging stocks the more they will see a return or loss on their investment.

Robinhood has definitely made the barrier to entry to the stock market readily accessible for new investors. Mentioned in my previous blog post the Gamestop short squeeze which was manipulation through retail investors using Robinhood investing apps. The new investors now in the market will create market volatility in certain industries but also will create access to new cash flow in the stock market that was non-existent before.

The first formal stock market dates back 400 years ago in 1602. The New York stock exchange was founded in 1792. The stock market has evolved quite a bit and continues to evolve. Robinhood has gave a wave of curiosity to the everyday person. Aside from retirement accounts, I would say it is necessary to have a brokerage account such as Robinhood to dabble in the stock market yourself and/or educate the upcoming generation about investing. The route to wealth involves a combination of financial discipline, strategic investing, and career development.

How are you planning for your financial future? Download the Robinhood app and control your investments today.