Millennial App Recommendation of the Week: Robinhood
Introducing Robinhood, a stock-trading app that could change everything we thought we knew about investing.
Created by Stanford grads Vladimir Tenev and Baiju Bhatt, Robinhood puts the New York Stock Exchange and Nasdaq in the palm of your hand, for free. Robinhood doesn’t care about the size of your bank account and lets you trade as much as you want without incurring fees of any kind. Not too shabby.
Since launching in December of 2014, the app has seen over $1 billion in trades, spurring a rapid period of growth and marking Robinhood as one of the hottest startups in Silicon Valley.
“We are not setting any account minimums, which we think unlocks a market of investors who couldn’t do this before,” said Bhatt in a March 2015 interview with CNBC. “We see Robinhood as unlocking the microinvestor market.”
Oh, alright, but how does it work?
Part of Robinhood’s appeal is how simple it is to get started. Download the app to your phone, create an account and sync your personal information with your bank account.
After your account is verified, you’ll be able to buy and sell as much or as little stock as you want on a dynamic interface that includes real-time market information. The app even includes push notifications to give you a heads up about breaking news and major developments.
For a first-person walk-through of how Robinhood does its thing, check out this profile on TechCrunch.
Awesome. But what makes Robinhood so special?
For starters, you don’t have to leave your couch to get started. Hell, you don’t even need to talk to anyone if you don’t want to. It’s like the Seamless of investing.
Beyond the easy sign up process, the true way Robinhood differentiates itself is how it kicks down all the usual barriers to entry of investing. As Vladimir Tenev told the Huffington Post, “We saw an opportunity to provide a product that makes investing easy, is mobile first and dramatically reduces the cost.”
Typical brokerage firms not only charge fees per transaction, they also require account minimums to get started. This combination impacts decision-making by attaching a cost to a trade, and can stop someone from even getting started in the first place.
Well aren’t you trendy. Does anyone else actually like this thing?
Yes, a whole lotta people are fired up about Robinhood. The app currently enjoys a four-and-a-half star rating from 5,893 reviews in the Apple store. Meanwhile, a cool 50,000 people downloaded Robinhood for Android after it launched on August 19.
It’s also important to note that it’s not just plebeians like you and I who are down to clown with Robinhood. The company has raked in over $66 million in fundraising, with savvy backers including Google Ventures and the tech-investor wizards of Andreessen Horowitz.
My interest has been piqued. But is this thing really worth my time?
Definitely. What makes Robinhood great is that it’s designed with Gen Y in mind. Tenev and Bhatt set out to create a trading app that wouldn’t cause millennial noses to wrinkle at the smell of bullshit. The lack of fees and minimums means that Robinhood is the perfect way for an inexperienced investor to learn the ropes without being forced to shell out too much dough in the process.
That said, you’re putting your own money on the line when you start buying and selling stock. Even if it’s not that much cash, treat the decision-making process seriously and you’ll prepare yourself to make bigger and better investments down the line.