Hot 97 morning Romero, baby. You know what we do up here. This is your favorite morning show. It's your boy, the kid Maro, the human dur, keeping things wavy from 6:00 to 10:00 a.m. every Monday through Friday. Yes, you know what I mean? And I'm here with the most illustrious crew in radio. Mia Belle is here.
Shnie Culture's on the boards.
Make it happen. And today we're going to get into a little financial literacy, okay? Because we got a guy who knows a thing or two about the markets and how finance things move and happen and boop boop boop, you know what I mean? All that other stuff. Steve Quirk is in the building with us today. You know what I'm saying?
Listen, he's the CBO—if you don't know what that means, chief brokerage officer at Robinhood Markets. So, everybody knows about the Robinhood app.
You mean, what is Robinhood Markets as a whole?
So, Robinhood started in 2013 and very, very quickly grew to today where we have 28 million customers. Half of those customers are brand new to the market, so they've never had any experience in investing or anything associated with it. What Robinhood has really been good at doing is just removing all the friction. You used to have to have x amount of dollars to be able to open an investment account, you needed experience. They kind of made it hard for people who are young. If you're in your 20s, they would say, "You can't trade this product. You can't invest in this. You can't do this." And we just knocked all those walls down and said, "This is kind of ridiculous. It shouldn't be an old boy club. It should just be a place where anybody can participate."
And if you look at what percentage of US households today are participating in the market, it's about 62%.
And that's gone up pretty dramatically.
Because we've just kicked those walls down. If you look across the globe in Europe or Asia, it's like in the teens. So they want this, because it's great for everybody to have a stake in these companies. Look at these AI companies. I mean, they're growing wealth for people that is unimaginable. And if you're not participating in that, you're losing out on that. So, basically, all I get to do is have it replace my job, but I don't get to benefit from it. I mean, come on, it's not fair. And so, that's been our mission. Let's just make it something that is available. If I have five dollars, I can do it.
I have a really funny story. I'm an annoying finance father, right? I have three daughters. They're all just in their early 20s and they all got jobs. And you know, I annoy them and say, "Listen, your money is going to work as hard as you work for your money. So, I'm going to help you, but you're going to open up accounts and you're going to put this money to work." And by the way, at the time, I'm working for Charles Schwab.
And all of a sudden, they say, "Okay." And they show me the Robinhood app, and I'm like, "WTF here? What? Hey, I work for Schwab. Why Robinhood?" And they're like, "Well, this is where all our friends and cousins and everybody is doing it." And I said, "I don't really care where you do it. I just care that you do do it." And so, we've had our trials and tribulations about how they invest. They think I am the market, so when the market goes down, they call me up and yell at me. "Why did you do that?"
Of course. Yeah. "What? I can't believe you made me put my money in here." Charles will do that.
"It went lower." And I'm like, "Okay, here's what we're going to do. All you're going to do is take however much money you want to put in every month, and it's going to auto-invest in whatever companies you want to be in, and don't look at it." And I can't use the word "guarantee"—it's not allowed in our industry—but I said, "I can assure you in 20 years you're going to thank me because the market goes up 9% on average every year since 1950."
So, if you just make that money go to work for you, the power of compounding is magical when you watch it. We show this in our app, like you just add $100 a month and you're like, "Oh my god, look at this. When I'm 18, if I start at an early age, or when I'm, you know, 20 or I need to fund a business or go to school or do something, the returns are magical." And I think the part that makes me so passionate and us so passionate about it is it actually gives people agency. And what I mean by that is, if I'm investing and I'm having success in that, I'm not tied to a business, I'm not tied to a job, I'm not tied to anything. I can do whatever I want, right?
Because I can take that with me and move. I can keep that working for me regardless of what I'm doing. If I want to take a break for six months and go do whatever I want to do, I have the liberty to do that. And I think that agency is something that is really liberating for people, especially young people.
Financial freedom is important, man. And like I learned, shout out to my Uncle Gabe, man, because he really taught me like how to invest, what to do, cuz the barrier for entry, like you were saying before, was crazy for like regular people. Him working in that space was able to teach me things that I've then told like all my friends. I'm like, "Yo, do you know about—yo, there's this thing called the index fund," you know what I mean? So, like I have a bunch of financial products and things that are like—like you said, making your money—that was, you don't rap, but that was a bar. You know what I mean? Like making your money work as hard for you as hard as you work for your money.
And compound interest is the magic.
You know what I'm saying? So, can you break that down for, you know, the average Joe that's like—
Yeah, the power of compounding. The power of compounding is just over time. As my investments earn more, that just stays in the account, and then everything that I earn grows on top of that. It's just kind of magical how quick it happens. We've discovered the best way—there are people that can learn by numbers and there are people that can learn by visualization. I think there's more people that can learn by visualization, at least in our experience. So, we just let you visualize, like you can see it here: "If I put in $50 a month and I keep doing this for this many years, look at this thing." And it just—
Yeah, beautiful. Really beautiful. So, the difference—and people think that they're both the same thing—between like day trading versus like "I'm going to invest in this portfolio," etc., etc., can you explain that? Because my kids ask me all the time.
Yeah, I think a lot of people think it's interesting and cool to be day trading, you know—
They saw Wolf of Wall Street.
Which is—look, I started my career on a trading floor. I know what that is. It's cool, it's good, you can do it. Some people have success with it, but there are more people that have success by just doing it on a time-tested interval and just saying, "I'm going to continue to put this money to work on a steady timeline and then watch this whole portfolio grow." A lot of people will do that, and then they'll take a small portion of it and say, "I'm super interested in this AI thing or in crypto or in whatever else it is because that's kind of what's interesting."
I think the other thing that that helps with is what we're doing here. The financial industry was really good at coming up with terms and terminology that made it very daunting for people. "Hey, you don't talk about money. You're not supposed to talk about money. You know that's like something we don't talk about."
Yeah, you are supposed to talk about it. How else are you going to learn if you don't talk with your family and friends about it and learn from their experiences? You know, like, "Hey, I made a bad investment. I bought a condo in Boca..."
"...and it's infested by alligators now." You know what I mean?
Exactly. So, it's experience. You have to pass that experience on, and that should not be something that we shouldn't talk about. Look, a lot of financial media, what they do is they kind of tell you that you're not smart enough to do it yourself. And the reason they do that is because they want to charge you to do it for them, like, "Hey, you can't buy Apple stock. You need me to do it for you." Do I? I don't think I do. Now, some people need help, that's fine. And I'm not criticizing the people that need help with it, but I think there's more and more people that are discovering this is like travel: "I don't need a travel agent. I got this. I think I can do this on my own." And if they can, that's great. That's very liberating for them. It's helpful.
