Mario Cazombo

If you are an investor — new or experienced — you’ve almost certainly heard of Robinhood. The app-based investing platform is popular among retail investors who congregate in online forums like Reddit’s r/WallStreetBets, and currently has around 14.4 million monthly active users. Robinhood launched in 2013 and grew its following amid an influx of everyday traders and cryptocurrency boom during the COVID-19 pandemic. It offers commission-free trading, meaning users can invest in everything from exchange-traded funds (ETFs) to Dogecoin without going through traditional brokerages or crypto exchanges. The company went public in July 2021, trading on the Nasdaq under the ticker symbol HOOD. Robinhood’s revenue hit $565 million in the second quarter of 2021— thanks in part to a surge in crypto trading — but has seen exponential growth since. In its second-quarter earnings report for 2025, the company announced revenue of $989 million. With the stock market enjoying a bull market that began in October 2022, many trading platforms, including Robinhood, have seen an increase in activity. But despite its growth, Robinhood is no stranger to criticism. In June 2021, the company faced the largest financial penalty ever issued by the Financial Industry Regulatory Authority, agreeing to pay $70 million for various regulatory allegations, including system outages, misleading users and allowing customers to trade options — a risky investing move — when it was not appropriate to do so. In early 2021, Robinhood curtailed users’ ability to trade certain meme stocks like GameStop and AMC, generating the wrath of U.S. traders and lawmakers. In December 2020, Robinhood was fined $65 million by the Securities and Exchange Commission (SEC) for allegedly misleading customers about one of its revenue sources. (Robinhood uses a practice called “payment order flow,” in which a brokerage firm sends customer orders to high-speed trading firms in return for cash payments). The platform’s model allows users to make trades at no cost, but according to financial planner Tara Falcone, that comes at a steep price. “It’s made many people think, ‘this is how you invest, this is how you build wealth,’” Falcone says. “And while trading individual stocks IS one way to build wealth, that’s not where most young people should be starting.” So here’s everything you need to know about the trendy (and controversial) trading app — including whether or not you should use it. Who uses Robinhood? The Robinhood app is popular among young and novice investors. It’s been known to target younger investors specifically, from offering college students $15 to trade if they opened a new account and including gamified features to offering fractional shares and alternative assets like crypto. Some critics say the way Robinhood makes investing akin to a game is dangerous — since overtrading can have serious consequences — and the company has made some adjustments in the face of that criticism, like getting rid of its digital confetti. Robinhood isn’t limited to Redditors with higher risk appetites, though. The app can, at the very least, serve as a good introduction to investing for those interested in doing their research. Investors can trade stocks, bonds, ETFs, crypto and use the gifting feature to send coins and tokens to others. But no matter how savvy you are at picking stocks, you’re highly unlikely to beat the market over the long term — which is why Money has always advised new investors to start with passively-managed index funds with proven track records instead. That approach is one of the most likely (yet boring) ways to become a millionaire. The truth is, there’s no crystal ball predicting where the stock market will go next. Day traders will often try to game the system — even if it’s usually next to impossible to make boatloads of cash that way. And since Robinhood lets anybody with a bank account buy and sell risky financial products, its appeal is no surprise. More recently, Robinhood has targeted long-term investors as well. The company now offers an individual retirement account that, under certain conditions, features a 3% match. That is available to Robinhood Gold subscribers, who pay a $5 per month fee. The Robinhood IRA’s match is similar to employer-sponsored retirement plan matches, as seen with many 401(k)s. How to use Robinhood (the right way) Before you download any sort of investing app, establish what your motivation is, Falcone suggests. Are you doing this to make some quick cash? Because you have Reddit-induced FOMO? Or because you want to put your money to work responsibly, and are prepared to think about long-term strategies? “That should help you put blinders on to what you might be seeing on social media or hearing from your friends,” Falcone says. “If [certain] types of stock don’t fit into your strategy, then you should immediately know to ignore those suggestions.” If you’re approaching this through a financial planning lens, make sure you’ve already paid off all your credit card and high-rate consumer debt. You should also be contributing enough to your employer-sponsored plan to maximize any potential match benefit — that’s an immediate, guaranteed return on your investment that you can’t expect from the stock market. “Once you are on track for retirement and have additional cash to invest, you may want to consider adding some individual stocks to your portfolio,” Falcone says. “However, it is recommended to secure your financial future with diversified securities first … either through your employer’s plan or an IRA.” You’ll also want to set some investing goals before you start trading, Falcone says. Maybe you want to invest to help pay for a new couch, a trip to the Bahamas, an engagement ring, or a downpayment on a future home. “Determine how much that goal will cost, how long of a time horizon you have to achieve it, how much money you have to invest toward it today, and how much you’ll have to contribute on a weekly or monthly basis to reach that goal using a reasonable expected return for your time horizon,” Falcone says. How

As the peak summer travel season winds down, the so-called “shoulder season” has begun. With school back in session, flexible travelers can find cheap fares to help them soak up the last of the summer sun — especially if they’re willing to experiment with methods like skiplagging. The booking site Skiplagged boasts that it can save flyers hundreds of dollars on plane tickets with that travel hack, also called hidden-city ticketing. To that end, the company’s website promises to “show you flights the airlines don’t want you to see.” But is skiplagging a smart financial deicsion? In an interview with Money, Skiplagged CEO Aktarer Zaman argues the service is “useful for anyone that wants to say money” but acknowledges its limitations — including that you have to fly “backpack-only.” (Otherwise, your baggage would be sent to the wrong place.) Here’s the general idea: Say you live in city A and want to travel to city B. With Skiplagged, you book a ticket to a third city, city C, that connects in city B. You never board the final leg of the trip, simply getting off at the connection point (city B). You save money because the airfare to city C is actually cheaper than a flight to city B. How hidden-city ticketing works Why is it even possible to save money booking travel this way? Henry Harteveldt, president and travel industry analyst at Atmosphere Research Group, explains that “Skiplagged has found a way to monetize some of the frankly illogical realities of airline pricing.” Basically, yes, it can be cheaper to add an extra flight to an itinerary than to take a direct route. This phenomenon occurs due to differences in demand from destination to destination or various levels of airline competition for certain routes, Harteveldt says. “There is absolutely no logic to it [airfare pricing],” Harteveldt says. “It can cost more to fly further than shorter distances.” The hidden-city ticketing concept has been around for at least 25 years, but Zaman is credited with popularizing it. Skiplagged, launched in 2013, now reports that thousands of people book flights with the platform every month. The controversial service is still a frequent topic of discussion on travel blogs and forums. The consequences of skiplagging flights Skiplagged’s search tool can help users find savings with hidden flights, but the consequences could be severe. Airlines typically don’t like travelers to take advantage of hidden-city ticketing because it’s against their terms and conditions and can cost them money. If an airline identifies an individual on a hidden-city ticket, it may take action. “The risk to the consumer is this: If the airline catches you, they could potentially demand you compensate them the extra fare … If you belong to the airline’s loyalty program, they could potentially close your account,” Harteveldt says. “It is not something I would advise that anybody use because the risks of the penalties — should you be caught — are quite substantial.” Zaman, however, says his critics are exaggerating Skiplagged’s risks. “I’ve never heard of anyone actually being banned,” he adds. “According to our own data from hundreds of thousands of Skiplagging customers… the success rate is quite literally almost 100%.” Skiplagged itself makes money from service fees, which showed up as 10% of the fare in one of Money’s tests. The company says the fee “allows us to offer Skiplagged Guarantee and operate the Skiplagged platform.” That guarantee reimburses customers for alternate travel in the case of rare issues, such as when airlines reroute flights or cancel tickets. Skiplagged vs. the airlines Skiplagged has been sued by airlines including United (2014), Southwest (2021) and American (2023). The lawsuit from American, for example, alleged that “Skiplagged action’s constitute tortious interference, breach of the AA.com terms of use, trademark infringement, copyright infringement and other violations.” While the company says it has defeated the airlines, that’s not the full story. Litigation is still ongoing, and Skiplagged has already been ordered to pay serious fines. As to whether skiplagging will actually get you banned, the answer is dubious. A representative for Delta Airlines confirms to Money that its policies prohibit “hidden city/point beyond ticketing,” which it defines as “the purchase or usage of a fare from a point before the passenger’s actual origin or to a point beyond the passenger’s actual destination.” The policy states that “Delta reserves the right to cancel any unused portion of the passenger’s ticket, void any remaining value of the unused portion of the ticket, refuse to let the passenger board or check bags, and/or, if the passenger is permitted to board, charge the passenger the Applicable Full Fare.” Southwest also points to a document banning the practice of “purchasing a ticket without intending to fly all flights to gain lower fares (hidden cities).” Like Delta, Southwest says it could take action such as cancelling reservations that “it believes, in its sole discretion, were made without intent to travel” or “charg[ing] the customer for what the ticket would have cost if the customer hadn’t engaged in a prohibited practice.” That means the risk — but also the potential reward — is yours. 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Stocks continued to struggle ahead of Fed Chair Powell’s Friday morning speech at Jackson Hole.