How Robinhood Makes Money

Robinhood, an investing app valued at over $5 billion, says it's trying to "democratize America's financial system" by making investing accessible to the little guy with free trades.

It's an eye-popping valuation for a financial company with opaque metrics and plenty of competition. The young company had its share of missteps as well, prompting questions of whether or not it can handle primetime.

Robinhood has faced criticism for business practices that allow it to offer free trading. It also botched the rollout of a checking and savings account feature in late 2018, garnering concern from regulators.

But the company's incredible growth and popularity with younger investors – more than 6 million users by the end of 2018 – means it could be a major player in banking moving forward.

About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.

Connect with CNBC News Online

#CNBC
#Robinhood

How Does Robinhood Make Money?

[Americancowboy]

Getting a way to make income without having to leave home isn’t exactly as easy as you all think it is, talk is cheap and it’s sure easier said than done, I have my source, and I would rather stick to that, it pays well, even my stepdad quickly joined before it was too late

[alf]

"...as it tip-toes towards an IPO"

So you're telling me I can buy Robinhood, on Robinhood??

[matthewranger]

The account sizes are lower because this app is all younger people who just started investing.

[Kim-byuy]

Who's here after they screwed over Gamestop investors

[justinraley]

Robinhood IS revolutionary. I truly believe they're creating new investors in the market. Without Robinhood, I would NOT have purchased stocks. Period.

[burakcals]

I don't consider renting passive income unless you have professional property management. Most people who rent don't count their time and effort needed just to make a tiny return on their massive investment. For example, you invest $599, 000 to buy a second home and rent it out for $3000 a month. Let assume you are cash flow positive on the property and you make $1000 a month or $12, 000 a year. What would your annualized return be? 2 percent on the entire amount. Now, you can argue that your return is much higher since you only put down $120, 000 on the property. However, you are on the hook for the full $600k regardless of what the future FMV of the house is. Furthermore, people assume that their home will always appreciate in value however, this is a false assumption you can make. In the best case, you will gain some capital appreciation thanks to the central bank increasing the money supply, however, if inflation heats up, you can see your property actually start to lose money in real terms. This is because there is an inverse relationship between housing and nominal interest rates. The central bank will attempt to slow down inflation with higher interest rates and curb lending. We haven't seen inflation in a big way but we can see all the massive stimulus money that the government is pumping turn into inflation while taxes will be hiked to pay for all the COVID spending, your best choice is to look into crpto and VLADIMIRCORP, Its the video.

[wayneenterprise]

Big Brokerage: Haha how will you make money?
Robinhood: Hold my free commission
Big Brokerage in 2019: *drops all commission to compete with Robinhood

[practicalwealth]

Robinhood is really helping young investors learn about the stock market and it's a great thing.

[Spectralce]

CHARMED TRUE STORY VLADIMIRCORP.COM has assisted so many people here in getting a better credit and this isn’t supposed to go unnoticed, I shall remain loyal forever*

[EricSmythChrist]

Plz pay off credit cards before you download this

[Liang]

Robinhood taking on wallstreet?? My ASS!!!

More like, Robinhood in bed with wallstreet!

[InvestorAcademyPodca]

"Banks are tightly regulated in this country" I laughed and then realized what he really meant was that the tight regulations are the regulations to become a bank, not how to operate a bank. Remember when Walmart was going to open a bank?

[CNBC]

By the start of 2019 Robinhood has grown to 6, 000, 000 users. Are you one of them? Is there another trading app you prefer? Do you avoid the market entirely?

[kingdavid]

7:55 lol now they scared of the volatility

[amitBihar]

That low average asset size might be an asset to them. They may have captured the attention of the unbanked

[fahmocali]

To anyone reading this, Remember Rome wasn't built in a day, Your hard work will pay off

[vqhhbkm]

Today, they took from the poor and gave to the rich

[iboileeglenceler]

THIS WORDS RICH SEES AN ECONOMIC CRISIS AS A GARAGE SALE ALSO THE RICH STAYS RICH BY INVESTING AND DIVERSIFYING THEIR PORTFOLIO WITH STOCKS, CRYPTO CURRENCY AND FOREX TRADING WHICH IS THE WISEST THING EVERY INDIVIDUAL NEEDS TO DO AND IT'S REAL PROFITING, WHO ELSE HERE IS WITH ME REGARDING VCORPINVEST.COM

[Timeismoney]

Yeah but that 5 billion dollar company just thru away 50% of their user base today. Just to play God....

[Johnniewalker]

Not sure about putting money into a company that be robbin da hood.