Superhero
A father was walking past his 20-year-old son’s empty room when something caught his eye.
A Post-It note was taped to the middle of his son’s computer screen.
“Turn on the computer”, it read.
It took 30 seconds to boot up his son’s computer ... and 10 seconds to turn his life upside-down.
“If you are reading this, then I am dead”, the letter began.
What follows is the true — and tragic — story of a young American university student named Alexander Kearns.
Like many guys his age, Alexander began share trading during the pandemic.
Also like many guys his age, he kicked things off by downloading the Millennial-friendly trading app Robinhood.
Robinhood is the hottest finance app in the world, with 13 million accounts. It not only offers free trades, you can open an account with just a few bucks, which is a big reason Millennials love it. Yet the real reason it’s so popular is that the app has gamified the trading process:
Digital confetti falls onto the screen after you make your first trade.
And the app sends push notifications to your phone to encourage you to keep trading.
For his part, Alexander began trading highly risky options contracts on Robinhood.
The night before he took his life, Alex logged into his account and got the shock of his life:
A trade gone wrong. Very wrong. $730,165 wrong!
For a university kid living at home with his parents, it was a mind-boggling amount of money to come up with.
Money he didn’t have.
In a blind panic, he wrote his letter, attached the Post-It note to his screen, and jumped on his bicycle ... never to be seen again. Of course, suicide is rarely caused by just one event, yet stressful experiences can be a trigger.
Robinhood’s mission is to “democratize finance for all … making investing friendly, approachable, and understandable for newcomers and experts alike”.
Well, this week Australia got its own Millennial-focused trading app, called Superhero.
Like Robinhood, Superhero’s goal is to “make investing accessible and understandable for everyone — no matter if you’re a seasoned trader or buying your first stock”.
Like Robinhood, it offers cheap trading, charging a flat fee of $5 per ASX trade, with minimum investments of $100.
Unlike Robinhood, Superhero doesn’t offer risky options trading.
I spoke to their CEO this week, and he seems like a decent bloke who is aiming to simultaneously attract new and younger investors into the market and bring down the costs of trading.
Still, I am not a fan of apps like these.
Yes they’re cheap, yet they encourage often young and inexperienced users to trade, and that is toxic to their wealth.
Contrast this approach to Vanguard, the largest fund manager in the world, which is owned by its members.
When they unveiled their ‘personal investor’ offering earlier in the year, they gave me a demo.
They had intentionally added in ‘friction points’ in the buying and selling process to dissuade people from actively trading.
And I absolutely LOVED it.
“Make it more boring!” I cheered.
In fact, I suggested that they didn’t need to build an accompanying app: “Just keep it on the daggy desktop. There’s no need to trade shares when you’re on the toilet.”
(They’re in the process of creating an app.)
Still, my idea of a great investment app is something you set up once: a regular investment into various low-cost index funds. In other words, set-and-forget. And that is a plan that would have worked out well for Alexander, a young man with the world at his feet.
Instead, his father sat at his son’s computer reading his suicide note.
His son was distraught at losing so much money, and admitted in his letter that he had “no clue” about trading.
Tragically, he was right.
Even more tragically, Alexander had actually misread his Robinhood account balance: he hadn’t lost the money at all.
Tread Your Own Path!
Rest In Peace, Alexander Kearns
If you or someone you know needs help, contact Lifeline on 13 11 14 or visit lifeline.org.au.