Based on my limited experience, you enter during the bull market, make some easy wins, and start wanting to bet more and more because winning feels so easy. I could totally feel this process when I bought a few option calls that over a few months made 10x. That felt fantastic at first but shortly after I noticed that I started to blame myself for not taking more risk because on the hindsight, it felt so obvious that the price would go up. The market knowledge aside, psychological state is another thing that needs to be kept under control not to let yourself slip into the gambling state. I wouldn't be surprised if the online echo chambers that are set around particular stocks make people unreasonably confident and make them want to take more risk.

I felt this. I bought a well-known controversial EV stock quite low; my plan was to make at least 33% on it. After a year, I'd made 400%, but I was struggling to click the "Sell" button. Some greed surfaced from somewhere, and it took me a couple of days to cancel the greed and sell the stock, making 12X what I hoped to the year before.

The stock has since gone up a lot more, but my dad told me: Buy low, and Sell too soon.

If I made 400% on something, I would probably sell half of it, and keep another half at least for a year. That way, both my safety and greed would be satisfied.

(But this is more about psychology than math. For some people this would be the worst option, because if the thing would lose value, they would blame themselves for not selling everything when they had the opportunity, and if it would gain even more value, they would blame themselves for not waiting with everything. So it would be lose/lose from their perspective.)

This man knows how to make money consistently.

> I started to blame myself for not taking more risk because on the hindsight, it felt so obvious that the price would go up

This is a gambler’s mindset. That’s fine. I enjoy playing poker with friends, and when I do so, I reinforce those neural pathways with respect to cards.

But I’m risk limited, socially and personally, in that setting. Robinhood is different. There is no social pressure to limit how much money one puts in a trading account. So when the UX pushes one to gamble with thousands of dollars, and to reinforce gambling over investing pathways when it comes to the markets, we end up with a self-destructively trained generation.

That’s troubling. Robinhood can be used responsibly. But even taking most of the comments on HN, it seems to make that difficult.

From the people I've talked to it seems to be mostly a lack of understanding. They often self-describe as people who don't know anything about personal finance beyond earning a paycheck and paying bills. They see trading stocks as a step forward.

The concept of diversified risk is not something they are familiar with at all, so they don't see the issue. Many feel comfortable trading consumer company stocks because pop culture and consumer technology are things they have opinions on. And for many it seems like the key to success in trading is finding some insight to bet on, like "everyone loves Netflix, Comcast is doomed," or finding nascent categories like bitcoin or weed. The lack awareness of the complexity of market success makes it harder to grasp why indexes are a more reliable investment strategy.

Here's the appeal: I made 4x return in last 3 years "gambling" on stocks. That's far in excess of 8% return from "just passively investing for the long term".

BTW: I gambled on IBKR, not RobinHood (I have RH account but don't use it).

I just don't get why RobinHood is so vilified for the crime of making a fast, usable app.

I use IBKR but their website is just bad. A security theater that makes logging in slow. Sometimes it fails to log me in. Sometimes it fails to show my portfolio. Because, you know, it's only job no 1 of an investing site.

You got lucky; your post is why people pick Robinhood and day trading over the long-term one. It's survivorship bias. For every success story like yours, there's at least one - probably more - that lost three-quarters of what they put in.

If you're thinking of investing, apply the "strong beliefs weakly held" practice; you think you may get high returns, so look for examples to the contrary to challenge your own beliefs.

All investment profit is to some degree luck.

As far as short term investment goes, the market obeys certain dynamics to a first order at any rate, and by being aware of those dynamics and making statistically sound bets you can pretty much be assured of doing better than a simple buy and hold.

The people who lose their shirts don't use statistics, they buy when a stock is going up and sell when it's going down.

It's not luck if you make consistent returns over 4 years. "gambling" is the term people use because they don't understand the stock market

It could easily still be luck if they bought Tesla or TECL 3 years ago and that is where their 4x return came from.

Regardless, even if you have a strategy that works for now, that doesn't mean it will continue to work forever. Anyone investing that isn't an expert in a particular industry in which they trade is basically just guessing. Any insight they have will almost invariably already be priced in.

Ok but then your whole point is basically "things can change in life". It's true and it's a good thing to be risk adverse but it doesn't bring much to the discussion at the end of the day.

The more interesting questions is "can you actually, consistently, make money if you are good and spend a lot of time analyzing the market. In other words "can you actually have an edge on the market". From what I've seen it's so but most people don't believe it.

It's possible for someone to consistently beat the market just like it's possible for someone out of many to flip a coin heads 20 times in a row.

Everyone who says that they in particular can beat the market consistently year after year, unsurprisingly won't reveal any evidence behind their claim. It's always things like: "Oh, it can be done. Trust me! There are ways! You just don't know them and we market-beaters do! You just have to analyze harder, bro."

Trading for regular people isn't supposed to be some thrill seeking sport. Millions of dollars are spent on wall street to get "an edge". You really think you can do better ?

This is the mentality that needs to be checked. All those people trade huge money they don't care about some tiny trader moving $100k per trade. So yes you can do better as you have less capital to invest.

That makes no sense ? They're not actively trying to crush individuals, they just have more resources to access information before you.

they only focus on automatic trades.. you can spend time analyzing penny stocks for example

>It's not luck if you make consistent returns over 4 years.

Sure, if your sampling was unbiased. But here, it's not - so that user might well have been lucky. How many people have failed to make those returns, or any kind of return?

There's very obvious evidence that somebody can outperform the market, even to a massive degree. From what I know, there's very little evidence that a particular person can deliberately outperform the market - and daytraders, especially, cannot do so consistently.

Respectfully, 4 years is still luck. You need to maintain that for 20-30 years (or be VERY lucky and make enough in a super short time to exit the game).

you can measure how risky it was using something like Sharpe Ratio. Then you can assess how likely you are able to repeat it again. Also, kelly criterion allows you to measure risk of ruin for every bet. "making consistent returns in 4 years" does not really mean anything without additional information.

It's not inherently bad to make it easy to trade, but they specifically target (among others) people who don't understand the risks they're taking. If you're a hardline believer in individual responsibility, there's nothing wrong with that. But by the same logic you could put cigarette vending machines on every corner.

I’ve had a good experience with RH too. I started out small, learned about stocks first. I gradually started into options and learned some strategies there. Then I started learning about volatility and other derivatives. And of course I’ve learned all about ETFs etc.

My first year was hard; and it was emotional. I was too excitable and got hooked a little. But I steered my way through it with a very small loss. I considered it the cost of my education.

But I really started getting the hang of it my second year. I started swing trading and learning the mathematics and psychology of the market. I didn’t break the bank with profit but I did make a few % points.

I’m in my 3rd year and I’m a decent hobby trader now. I’ve been consistently beating the market in my “spare time” (I have a full time job and a side hustle). I don’t really get too excited anymore. I’m very methodical and pretty u emotional.

To be clear: my trading account is not my retirement and it’s not my savings. It’s “mad money” and I use the post-tax proceeds for vacation etc.

But yeah, I’ve had a decent experience with RH, learned a lot, made a few $$$ and had a good time.

P.S. It’s not “luck” for a small time swing trader to make a little money. Its something you do every day, using math, psychology, and timing on companies carefully selected for their fundamentals. The market is a large, slow moving entity that constantly shows its hand. A small timer can make money. Will it scale? I don’t know. I’ve been steadily increasing my account so ask again in 5 years.

Admittedly, there are days where it’s hard to see where things are going - especially high vol days. But when vol comes down and the market slowly heaves one way or the other, there are tickers that pretty much always go with the flow. Buy low, hold for the swing. Or short a bump and sell lower... it’s really not rocket science. Just don’t get greedy... hit your target a get out.

The real question is: is it worth my time in terms of ROI? Frankly, no not yet. I am streamlining the work, semi automating thru alerts, triggers, and buy/sell presets. But my paycheck and my side hustle still pay better. However I’m on a slow trajectory right now and I’m curious where it’s going. Will I plateau? Yes probably. But I’m enjoying the ride.

Are you doing things like bankroll management? measuring your risk of ruin? Sharpe ratio? if you are not tracking how legit your upswing/downswing is then I think are doing a disservice to yourself.

Yes, I have developed a risk management plan that address like bankroll management and risk of ruin. After the big drop in Dec 2018, I learned a whole lot about hedging and diversification. I’ve recently been learning to quantify that stuff with metrics like Sharpe Ratio etc.

Some people always win at the casino. Keep it long enough and we"ll see if you have happy results.

Same with gambling, I imagine. The utility of 107% guaranteed of this dollar is less than a less than one in a billion chance at a billion dollars.

The net expected value of the dollar doesn't have to be positive. Losing $2000 over 80 years of your life is certainly worth is a non-factor for many.

Add in the fact that RH has reduced barriers to entry to investing. It's way easier to get RH and buy VOOG than to get Vanguard set up. I have enough in both to know.

I know a couple of people that did just that. With the lowered barrier to entry (free), people have been able to buy say a single share per paycheck instead of having to hold on for months to get a cost effective amount of cash to make it worth the trade. Not only this, but you can effectively dollar cost average your way into the market to minimize losing to bad timing. The trade fees were always absolute and not a percentage so it just never accessible to a lot of people -- and now, a lot of the big discount brokers went to 0-1¢ fees.

> people have been able to buy say a single share per paycheck instead of having to hold on for months to get a cost effective amount of cash to make it worth the trade

This is the problem solved by ETFs. Small amounts of money buying lots of diversification.

Not when it's $5 to trade 2 shares of SCHB because that's all the extra you can afford per paycheck.

> Same with gambling, I imagine. The utility of 107% guaranteed of this dollar is less than a less than one in a billion chance at a billion dollars.

Is this really true — from a rational perspective, and not one where someone idolizes wealth or being able to purchase "whatever they want?"

The utility of anything — including money — diminishes as you have more of it. The utility of the next hundred million dollars is less than the first hundred million.

So I don't think a rational actor would take the gamble.

Utility is a function of the person, the environment, and the thing. There is no 'utility of a dollar'. There is only 'utility of a dollar to me in this circumstance'.

So if one idolizes wealth then clearly they have assigned high utility to money in a non-diminishing returns sense. It is then rational for them to match their utility curve. Life is full of threshold systems. Given that, it would be very unusual for utility curves to not be deformed by them.

It's easy to construct a few scenarios with locally convex curves:

* You're in debt to the mafia and you will die if you don't pay them your $100k debt. You have $10k dollars. Do you spend the $10k to try a long shot of making $100k?

* You're poor and make $15/hr. If you save you will have an extra $1000 a year in savings. You will never own a home. You will never have time to study for a better job. The magic of compound interest with contributions is in the regularity, not so much in the amount. Put $1000/yr in a calculator and $998/yr in a calculator (assume it compounds 3% every year) and see the difference you get over 60 years. It is insignificant on a 60 year horizon. $2 will buy you a powerball ticket, and maybe out of this life.

* You're an immigrant. You need a few million dollars for your investor visa. Your current visa runs out next year and then you return to a slum.

If a person doesn't see a way out of slaving at or near minimum wage till they retire, even a moderate windfall of a couple million would completely replace their lifetime earnings and give them the freedom to pursue their passions (be it a family, surfing, painting, etc) while they're young and healthy enough to enjoy doing so.

I tend to agree with your point for larger sums like a billion dollars, but maybe you're really passionate about the potential for EVs to positively impact our growing climate problem and need an enormous pile of cash to get that off the ground. People are complicated.

Adrenaline?

Same motivation as gambling. You can enjoy the hope of the possibility of wealth. Steady investment will never give you that. Of course, this involves a heavy dose of self-delusion, also popular these days.

> Steady investment will never give you that.

Sure it does. I've seen lower middle class people become millionaires that way. Of course, one needs the discipline to not succumb to spending it on a car/house/divorce, and the intestinal fortitude to not panic sell when the market tanks.

This is like arguing that because twelve people a year become multimillionaires after buying a lottery ticket, the lottery can make you rich.

The empirical evidence is clear - for most people, day trading of any kind is a reliable way to lose money, and even buy-and-hold can kill you if pick the wrong asset class. (Ask Warren Buffet.)

You may be lucky, you may have an unusually effective model - but the odds are you're the noob at the poker table and the pros are laughing at you as they clean you out.

Just invest in the S&P 500. It isn't rocket science.

It's not, however, you need access to starting capital and patience. Wealth begets wealth with this strategy, but you'll only become a millionaire using this tactic if you can put in a significant amount.

The S&P tripled in value since 2010, so you would've had to invest $333.000 at that time and cash out now to become a millionaire. But few people have that. That's a 1%, I already made my fortune / I have rich parents privilege.

Sure, ANY amount you put in there would've gotten tripled, but turning $1000 into $3000 isn't going to make that big a difference.

And if you have hundreds of thousands lying around, I'd argue that buying a house would be more beneficial for your well-being in the short term.

Disclaimer: I've invested some money in the past, both low-risk long-term stuff, index funds, and 'play money' into meme funds like Apple and Tesla. I think at most I've doubled what I put in? Didn't lose money (even with the rona), that's for sure.

I try to not go "I should've done x" too much though, like "I shouldn't have sold my handful of $250 Tesla stocks when I did".

it's called patience and keep on investing. You only need to put 400$ every month into SP500 in order to reach retirement age with more than a million.

A million in 2060 isn't going to be enough to retire on. I'd be surprised if it was enough to buy a moderate house.

If you'd done this 40 years ago, the million dollars you'd have today would have the equivalent purchasing power of $300,000 in 1980. Inflation is a cruel master.

"The average annual total return and compound annual growth rate of the S&P 500 index, including dividends, since inception in 1926 has been approximately 9.8%, or 6% after inflation" [0]. With 6% inflation adjusted returns, that'd give you a million inflation adjusted dollars after 45 years of investing $400 a month.

[0]: https://en.wikipedia.org/wiki/S%26P_500_Index

The more interesting question is what will you buy for million dollars in old age.

Some common answers might be:

* healthcare, always expensive

* things for your kids, including education, housing, access to jobs

* random consumer spending including holidays or travel

* charity

Presuming you were able to actually afford saving $400/mo while living reasonably comfortably which is definitely not a given and not quite as common as expected by some.

And presuming you're not altogether unlucky in your strategy, which can happen.

You will have probably also accrued still useful assets to pass on or use. Or lost them.

While that's definitely true, maybe one should look at this another way.

$400/mo saved in a 0% interest bank account for 40 years = $192,000

$400 * 12/year invested at 10% (incl. inflation) for 40 years = $2.12 million

While $2.12mm in 2020 money is $440,000 in 1980 money (assuming 4% inflation), it's still much better than the alternative.

A couple of other points:

* Investing $400/mo earlier is relatively harder than $400/mo later in the 40-year timeline assuming compensation increased by the inflation rate but one keeps the invested amount ($400 here) constant. This is ignoring factors like salary increases later in one's career (not sure if that even generalizes for lower-income professions).

* I wonder if there's any study done tracking if there's actually a steady increase in spending consistent with the inflation rate for all individuals (with some stochasticity). Or, do people adjust the goods they buy and "outwit" inflation? For e.g., the biggest purchase one makes usually, a house/apartment, doesn't scale with inflation. Similarly, electronics actually get cheaper. So, apart from food, does spending actually track inflation?

You invest into something like the S&P 500 (maybe better: MSCI World/FTSE Developed World) precisely to outrun inflation. In the OP's example, the million would be worth that million, not 300k. Look up compound interest.

$300,000 is a lot better than $0.

Putting $8.5K annually into a 401k for 35 years and assuming a 6% return gets you $977K says a web calculator.

500 companies in one country isn't diversified.

That's what ETFs like VXUS and IXUS are for. You get international exposure.

VT is another good choice if you're lazy and just want to own a slice of the global stock market.

Sure, but he didn't say those, he said S&P 500. It seems like weird American exceptionalism that the internet repeatedly recommends only investing in one nation's index when that would be laughable if you heard a Japanese, Chinese, or German person saying to do the same with their national index.

1. The market cap of SP500 companies is ~30 trillion dollars, significantly larger than the entire stock markets in Japan, China, and Germany combined.

2. SP500 companies earn ~40% of revenue from outside the United States

All those companies have the single point of failure in the policies of the US government.

It's not that weird. Look at historical returns for the S&P 500 vs European indices. Besides, quite a bit of the S&P 500 consists of global companies.

Look at the Nikkei until 1990

At this point it's just antiquated advice, but it's an easy and well-described thing to put forward as a general trading theory. Buy an index fund and just wait for decades.

To put it another way - it rolls off the tongue better than "buy a weighted amount of a CSRP (or comparable) US Total Market Index and FTSE (or comparable) Global All Cap ex US Index, where your weighting is probably slightly overweighted to domestic".

Often (usually?) when people say it, they aren't literally advocating to only buy S&P 500. Some people still do recommend this, but I'd wager they're closer to a minority now. Famously I'm pretty sure Warren Buffett is still advocating S&P 500 only, and it takes a long time for voices like Michael Burry to outweigh. Vanguard pushed out a whitepaper years back, and made a very public change in their own corporate 401k to get rid of the s&p500 fund choice.

> needs the discipline to not succumb to spending it on a car/house/divorce

Apart from the 2008 boom/crash, owning a house has been a great way for the middle class to become asset millionaires. I knew someone in London who was routinely out-earned by the asset appreciation on their own house.

Besides, inflation has rather moved the bar for "millionaire" to every middle class couple with a house and two retirement funds..

> Apart from the 2008 boom/crash, owning a house has been a great way for the middle class to become asset millionaires. I knew someone in London who was routinely out-earned by the asset appreciation on their own house.

there are certainly some hot real estate markets where houses appreciate a huge amount over a short period of time. in hindsight, it looks like a no-brainer to purchase a house in these areas. on the flip side, maybe someone builds a huge apartment complex on your street right before you wanted to sell and the value plummets. if you look at the whole american housing market though, there is a ton of variance but in the long term it seems to barely outpace inflation. [0] once you factor in maintenance and property tax, it doesn't really look like a good investment vehicle. imo, buying a house is best looked at as an alternative way to pay for housing which may or may not be superior to renting.

> Besides, inflation has rather moved the bar for "millionaire" to every middle class couple with a house and two retirement funds..

for sure, a million dollars just isn't that much anymore. if you follow the 4% rule, it gives you about $40k to spend every year. which is basically what it costs me to live in a studio in a relatively nice part of town as a single twenty-something.

[0] https://static01.nyt.com/images/2006/08/26/weekinreview/27le...

I'm not in a particularly hot real estate market - decidedly average.

It was abundantly clear when we bought that our location would not have a large apartment building built next to it - you can at least to some degree select for factors like that.

With all costs considered, we lived in a 2000 sq ft home with attached 2+ car, large shed, biggest yard on the block, etc. for a little bit less than it would've cost us to stay in our previous small 2 bedroom apartment in a equivalent enough location, assuming even that the rent remained the same for the past 10 years.

And on top of it we're walking away with $100,000 in equity. That is accounted for in the costs - but I'm not so sure that I would've actually saved that $100k if it hadn't been getting stuck away in the property value all along.

Anecdotal, of course, but it seemed like a no brainer at the time and in fact turned out to be such. It's not for no reason that home ownership is widely recommended as a good financial move.

> inflation

Indeed. Hoarding cash is for fools. I'm always bemused by the claims that wealthy people hoard cash.

But they do; sure, they spend heaps on shit like houses and cars and parties and vacations or whatever other hobbies they have, but most of their money is in their companies, stocks, stock options, tax havens, etc. At some point they reach a critical mass where no matter how much they splurge, they will never see their wealth decline. At best the companies / stocks they own will lose some value, but they will NEVER feel that in their wallet.

And some will set up a charity, but people like Bill Gates have never spent a significant portion of their wealth on that. Again though, that may be a logistical problem - they can't spend money fast enough whilst not splurging it.

Of course, the solution is simple; have the companies pay their staff better. Or give the staff stocks themselves, to be force-bought by the employer when they leave / get fired, and have it pay out dividends monthly to stipend their base income. This gives the employees representation in the board of directors as well, which is much needed in the modern capitalist system.

>but most of their money is in their companies, stocks, stock options, tax havens, etc.

That is not "hoarding cash" - keeping your net worth under the mattress or in a savings account is hoarding cash. Perhaps, at the margin, a money market account.

But when people colloquially say that wealth people are hoarding cash, they mean what the comment you're replying to is saying and not the keeping cash under the mattress thing. More commonly, people say hoarding wealth.

"Hoarding cash" means exactly what it sounds like - people being overly attached to cash in the safe/under the mattress/in "high interest" savings accounts.

This has been its use for a long time in any publication talking about money.

I know when you say "hoard wealth" you really mean not spend their wealth, because I'm not really sure how you "hoard wealth", as being wealthy basically means you've got stores of valuable assets... or a hoard if you will.

The two phrases are definitely not used interchangeably.

> Apart from the 2008 boom/crash

Only if you decided to sell then. If you did nothing, you'd have been fine.

> Sure it does. I've seen lower middle class people become millionaires that way. Of course, one needs the discipline to not succumb to spending it on a car/house/divorce, and the intestinal fortitude to not panic sell when the market tanks.

I think he was referring to the adrenaline rush, not the potential to make life changing amounts of money playing the long game, which clearly doesn't yield the same 'rush' he was referring to but is none-the-less an effective strategy.

I'm an unabashed adrenaline junkie: I've been in martial arts, school sports, motorsports, I did regular public speaking engagements for my startup and in academic-based oratory before that, and spent time in high end Kitchens... but with that said, to this day I will never understand the mediocre adrenaline 'hit' you get from gambling. It's really low level stuff to me, like lower than lifting weights or running a mile, something I did regularly at the gym after getting beat up working an 11 hour shift of a busy Dinner service.

I used to play $10 buy-in tourneys of Texas-Hold'em (forced into is more like it) hosted in the living room next to my bedroom when I was in my late teens/early 20s in Motorsports and I often got so bored, even when I won, that I failed to stay in if it went longer than an hour and often asked to take a cut on my pot/payout and forfeit to just get some sleep as I had school and work in the morning.

By contrast my professional driver friends/roommates were up until 5am and one of them played online for high stakes, the other played the stock market on the side and said it felt like the same 'rush,' as a day at the track but I could never relate to either of them as a track day was way more intense for me.

Flash forward to my Bitcoin days and after the initiation you get from from a couple of years in that space with such absurd volatility and all that the drama that follows it is such that nothing really even compares to it anymore, and I wasn't even a day trader, I'm merely an early(ish) adopter so none of this makes any sense to me at all.

What I do know is that this was done for gamblers [1] after COVID and is slowly becoming the norm in legal states that have re-opened due to the demand these, quite frankly addicts, create for the Casino Industry.

I wonder if something like Neuralink could help mitigate these diseases, as it all seems to stem from a neurological/neurotransmitter stimulation/feedback loop. I'm less concerned with the Matrix-style downloading/AI integration and more focused on what it could do for people with severe Depression, Alzheimer's, Parkinson's, and ALS.

1: https://www.highstakesdb.com/10328-covid-19-friendly-blackja...

I don't get a rush from gambling, because I know the math and know I am doomed to lose.

Stocks, on the other hand, have an upward bias. Of course, there could be events like losing a war where your portfolio will be vaporized, but in such cases you're going to lose anyway, so there's no point in worrying about such catastrophes.

Alternatively, you don't get a rush from gambling because you have a lack of imagination on how you can beat "the math" and so have never gotten the rush from your plan working out (at least in your small sample size and from your perspective).

> you have a lack of imagination on how you can beat "the math"

I.e. I don't invest in ignorant fantasies.

I recall going to Lake Tahoe once. Buses would pull up to the casinos, disgorging mobs of silver-haired people rushing into the casinos to spend the day losing money.

It's sad.

Or taking a different view that concurs with yours: investing in index funds or broad ETFs lets me match or beat most long-term investors with nearly zero effort. There's no need for me to waste my time reading "financial news" or developing super fancy HFT algorithms like some posters here have done. I just need to buy those index funds at my desired asset allocation and I'm good to go. Repeat until retirement. Very simple.

Granted, I do complicate things a little by insisting that I never sell anything I buy, not even for rebalancing, until retirement (otherwise I wouldn't be buying and holding in my eyes). However, I get around that by constantly rebalancing with new money [1].

Honestly, I find it rather jarring that as someone who usually frequents /r/personalfinance and Bogleheads, I see lots of investing suggestions on HN that do not involve indexing.

[1]: http://optimalrebalancing.tk/

I never really understood the "rebalancing" thing. It requires selling your winners. One thing about winners - they tend to keep winning!

Some people call it "locking in your gains". I call it "minimizing your returns".

That’s weird - I call it “letting it ride” and “never leaving a hot table.”

Gambling is a word used to describe anything beyond your own acceptable risk tolerance.

My definition is more mathematical:

gambling - where the odds are against you

investing - where the odds are in your favor

it's not like riding a motorcycle, but buying close-to-expiry options can be sort of like trading bitcoin back in the day. the addition of time pressure makes it a little more interesting. pretty fun when you see your contract jump from a total loss to a 600% gain on the day of expiry.

Opening a restaurant is riskier than investing in stocks and way more work.

Investing in individual stocks (what you call "gambling") is more risky than investing in S&P 500 but that's the trade off. More risk leads to more reward (or more loss).

If you invest in AAPL (or AMZN or GOOG or FB or NFLX) at the right time, you will 10x your money in under 10 years.

Is investing in any of those companies "gambling"?

And sure, you can also loose money, but "data from the BLS shows that approximately 20% of new businesses fail during the first two years of being open" so you can also loose money opening a business and yet we're not name calling people who open restaurants "gamblers".

Buy-and-hold a major traded company is not gambling. Day trading, and options trading especially, looks a lot more like it.

> yet we're not name calling people who open restaurants "gamblers"

In one of those situations your hard work has a significant influence on the outcome and in the other it has no effect at all.

Adrenaline + dopamine reward center of the brain strengthening the neural pathway until it becomes an addiction/craving.

It's entertainment. Especially popular now because much other entertainment is closed.

I moved from RH to IBKR a few months ago. Going from 5% to ~2% margin fees was a wake up call for me. Their tools are incredible too. For anyone trapped on RH and looking for alternatives, the ACATS transfer process is about as painless as it gets.

The quality of life increase fore mere 8% return is not as much. You'd need much higher returns for many people to make them not use the money now. Losing 1K every month for 5 years for a person who make 200k a year is not much Given the chance to make 100million - billion even if is very little.

Think of it as being a indie VC. Most investment will lose, the ones that gain might make you a lot.

Your odds are still likely better than lottery tickets.

It's not all about the odds. Sure at an aggregate level it might make sense. But instead of looking at it as mere % expected return, look at it as a tiered return. Above 200K I'd need 1M+ a year to improve my life. Above that, I'd need 10M+ a year. Above that 50M, then 500M and then 4B a year etc.

The quality of life improvement varies in the income bracket. Not every % increase is equal for individual humans.

Storing money in a sock has better odds than lottery tickets.

Do you not understand how people get addicted to gambling and the dopamine rush that pushes them there?

This is that for people who consider themselves "gifted".