Stocks are the new lottery tickets..What happened to the root of all evil being…Evil?
I vividly remember a time where money shaming was an issue. People projected their lack of financial stability onto invisible powers and the greed of men in suits. Repeating the phrase “the love of money is the root of all evil” was used to justify not achieving the “American dream”. Now with Robinhood and other trading apps, many are tempted to get the fast cash. A recent annual Berkshire Hathaway event gives us insight that may prove the average person would become money-hungry just like the men in suits they despise. Here’s why Stocks are the new lottery tickets.
Rig-Veda text on gambling
Never play with dice; practice husbandry; rejoice in thy prosperity, esteeming it sufficient. Be satisfied with thy cattle and thy wife, the god advises.
How many times have you been in line at a gas station or convenience store and someone wanted to “play” the numbers? The wait becomes infinitely longer, millions of people placed their hope on $10-$50 which they most often lost. The popularity of what the rich call the idiot tax or lottery tax is reflective of how dependent we are on “help”, after all, it’s just a game. Perhaps the stock market is just a bigger version of the lottery, except with businesses. In 2015, the lottery tax generated over 66 billion dollars. Today, the impatient lottery customer can use his phone to play the lottery stock market trade game. This brings us to Berkshire annual meeting.
Charlie Munger, Warren Buffet’s right-hand man, seemed pessimistic on the rise of apps like Robinhood. Munger feels that the growing popularity of trading without a broker can lead to an unstable market. Munger believes that Robinhood isn’t charging its traders upfront despite being advertised as free. Since Robinhood was the first free investor app, many other free trading apps soon followed. This allows millions of uninformed people, or anyone with a cell phone to trade stocks. This is both good and bad. It destroys the barrier and narrative that you have to be dependent on someone in a suit and pay them a fee. This also creates a lesser barrier of entry and allows people to randomly pick stocks like the person holding up the line in the convenience store for lottery tickets.
The quarantine was the perfect time to develop our spirituality and detach from the material. We were in the comfort of our homes and millions received unemployment. It’s to the point where millions don’t want to go back to work. Stocks are the new lottery temptation for greed in a first-world country. The hatred for shaming rich men only exists because of the barrier to fast money. Those who speak against the wealthy if given the opportunity would more than likely take advantage of the situation as the recent stock craze proves.
The destitute wife of the gamester is distressed, and so too is the mother of a son who goes she knows not whither. In debt and seeking after money the gambler approaches with trepidation the houses of other people at night. It vexes the gamester to see his own wife and then to observe the wives and happy homes of others. In the morning he yokes the brown horses — the dice; by the time when the fire goes out he has sunk into a degraded wretch.
Rig Veda text on gambling
In fact, Robinhood marketed its brand on the premise of its name, stealing from the rich giving back to the poor average citizen. This marketing scheme is using moral ethics as a weapon to entice people with the allure of money. As if the material world needs more illusions than it already has. Uneducated Stock traders only see opportunity and not temptation that lies behind their screen. The pandemic has many people questioning their current career choices and how to ride the future wave of the job market. As a result, many were vulnerable to the waive of brokerage fees started by Robinhood.
The New York Times reported that the average age of investors on the app is 31, and in May 2020 there were 13 million users. Although most student loan borrowers are under 30 years old, those 30-39 have the highest debt. To make matters worse, the majority of day traders lose money, just like lottery ticket buyers. Don’t confuse the allure of 3 piece suits and fortune 500 companies to be smarter than the average lottery ticket addict.
Lottery and Stocks are legalized gambling. Lottery players have more of a negative stigma than stock traders but they both share an unhealthy addiction to money and hope. As technology becomes better we can expect the temptation for greed to become even greater. Therefore it’s imperative that we take inventory of our spending and relationship with money. Simply throwing money into companies hoping to profit could backfire due to unrealistic expectations and hope. Also, stocks are way more expensive than lottery tickets. Stocks are investments, not get rich quick scheme. Robinhood takes advantage of the rich man’s greed stigma to attract everyday people and it worked. Being spiritually balanced will ensure that we don’t respond impulsively to the next path of least resistant market due to tech innovation.
In conclusion, this should be a reminder that contrary to popular belief, there aren’t any shortcuts to generate life-lasting wealth. The rise of Robinhood during the pandemic shows when we panic we return to the material world rather than our faith or spirituality. Bet on your spirituality to lead you and not on man.