Take the Money and Run
Casino freebies and temptations
The two go together. Addicts are such good business for the casinos that they lavish freebies on them to keep them coming back. You’re certainly better off forgoing both freebies and temptation if you, like most people, are susceptible to getting sucked into addiction. However, if you’re able to show enough self-discipline you can snatch up the freebies without giving them back many times over by getting addicted to the casino. It is easy for me because I have such an aesthetic aversion to gambling — I don’t like crowds, indoors, noises, lights, avarice, manipulation, etc. — so after I’ve done what advantage play is available, I’m more than happy to leave.
Robinhood
Robinhood (HOOD) is an online casino-like retail broker with amazing freebies designed to tempt addicts. They went public in 2021 — their stock opened at over $50, declined to under $10 with the deflation of the meme crazes and recently doubled to over $20 as retail meme crazes have started to perk up again. Reddit (RDDT) and Trump Media (DJT) are just two recent examples of the kind of thing whipped around on Robinhood with wild abandon. Like the casinos, Robinhood profits from your activity in ways such as payment for order flow. You don’t: you profit based on the quality not quantity of your trades. They do whatever they can to increase activity while you’re usually better off with inactivity. They want to be able to report robust growth and are happy to pay you for customer acquisition.
Gold
Vegas casinos offer drinks, meals, shows, and “free” play. What freebies does Robinhood offer? If a free cocktail when you walk onto the floor is the quintessential casino comp, Robinhood’s equivalent is their free stock. You get $5-$200 worth of fractional shares just for signing up. I’d sign up for Robinhood Gold, which pays for its $50/year fee many times over. They offer a two month 5.25% APY then 5% after that, insured up to $2.25 million. It is good to keep that much in an insured account for when time-sensitive opportunities (such as mutual conversions) pop up. Not counting the first two month extra, that’s $112,500/year of interest, far more than you’ll get at most alternatives. They are about to launch a 1% deposit boost good for another $22,500 on a transfer up to the deposit insurance cap. The deposit boost has been quite successful for the brokerage. They’ve received over a billion dollars of deposits since it started including over 150 transfers of over one million dollars.
IRA
Robinhood offers a 3% match on your IRA contribution, which is better than many employers let alone other brokers. That’s $405 if you max out your 2023 and 2024 contributions by tax day in a few weeks. Especially if you’re young, that four hundred bucks could compound into serious money by the time you retire. Robinhood offers zero commission fees on cryptocurrency. As I’ve advocated for over a decade, I’d put 10% of cash into bitcoin (BTC); this is a convenient place to do so.
Card
Robinhood offers the best credit card I’ve ever seen — 3% cash back on everything but travel; 5% cash back on travel. I’ll put at least $100k on the card for 3% cash back on non-travel and $50k for 5% back on travel for over $5k of credit card benefits this year. This is a particularly good card for whole families because you can set spending limited, instantly lock lost cards, and include card holders of any age.
Conclusion
Max out your tax advantaged account, credit card benefits, and transfer bonus. Then wait. Don’t overtrade. Take the money and run.
