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The typical RH customer... the one that invests spare change, purchases fractions of a share, and thinks they can get rich off a $100 investment, is not going t
by Alupis 6y ago
The typical RH customer... the one that invests spare change, purchases fractions of a share, and thinks they can get rich off a $100 investment, is not going to know these nuances.
There's good reasons the traditional brokerages have so many rules...
The facts seem to be RH saw a opportunity to prey on uninformed individuals by making investing seem "cool" and "stupid easy".
RH deliberately did not do a good job of A) Putting limits on newbies (like no margin!) so they do not get themselves into trouble and B) Explaining the more complicated concepts behind what RH was allowing literally any mirror-fogging human being to do.
- Tenoke 6y agoPlenty of people trading for 10k at Schwab don't know either. Plenty of people don't know the details of their bank account, too. I do blame RH but not for this.. People are always going to be uninformed about some things, yes we should minimize that but we shouldn't make services available only to the rich because of it.
- Alupis 6y agoI'm not aware of any other institution that allows to to take on debt by accident.
- Tenoke 6y agoYou've never heard of a reversed PayPal or bank transaction that leaves users with a negative balance?
- kortilla 6y agoBanks (overdraft)
- Alupis 6y agoAll banks offer overdraft protection when you open your account, and they clearly explain what it would mean for your account to go negative. Definitely not a good comparison.
- Tenoke 6y agoRH also explains it. Some people don't bother paying attention to that in both cases.
- Igelau 6y agoAlso, not having enough money in the bank, getting charged by the bank to hold on to what little you have, eventually getting charged into negative dollars.
- sildur 6y agoING does too. I've been bitten by that.
- Dylan16807 6y ago> RH deliberately did not do a good job of A) Putting limits on newbies (like no margin!) so they do not get themselves into trouble But someone who has initiated a money transfer and then used that pending money to buy stock, technically on margin, is not getting themselves into margin-related trouble. There is no good reason for there to be limits here.