Eligible families who selected to receive monthly payments will begin getting child tax credits Thursday due to a law Democrats passed in March.
The expanded child tax credit was passed into law as part of the American Rescue Plan, and similar to that bill’s stimulus checks, half of the enhanced benefits will be distributed to eligible parents as direct payments of up to $ per month per child for six months (with the other half awarded in ).
All told, the law increases the annual child tax credit from $2, to $3, for kids under 6 and from $2, to $3, for kids between the ages of 6 and Families have the option to accept the credit in monthly chunks — and it is entirely refundable, meaning even families that don’t make enough money to pay income tax will receive it.
The vast majority of children — about 88 percent, according to the IRS — are covered by the enhanced benefits, and by some estimates, the $ billion program, currently set to expire after one year, is expected to cut child poverty in half. There have been some efforts to extend the benefit, including a plan from Sen. Mitt Romney (R-UT) that fizzled out due to a lack of support from either party.
An expanded, more permanent child tax credit is included in the $ trillion Democratic infrastructure and budget reconciliation package, announced Tuesday, though specifics have not yet been released.
All told, the households of more than 65 million American children can expect to receive some of the American Rescue Plan’s $ billion. Here’s what you need to know about whether you’re eligible, and when to expect to see money.
Who qualifies for the enhanced child tax credit?
The short answer: almost every household with a child under
But it’s not quite that simple. Income limitations exist for single, joint, and head-of-household filers.
Married filers with an adjusted gross income (AGI) under $, will get the full credit. After that, the benefit phases out gradually, with the maximum income for partial benefits depending on how many children the household has.
For head-of-household filers, only those with an AGI less than $, can receive the maximum benefit, after which the benefit begins to phase out gradually.
For the small number of single parents or guardians without head-of-household status, only those with an AGI less than $75, can receive the maximum benefit.
If your income level means you don’t typically file taxes, you’ll receive the full benefit. (Note that you must file a tax return or otherwise prove to the IRS your eligibility for the credit through an online form.)
Eligible households are paid a separate child tax credit for every qualifying child. A single filer with three children under the age of 6 could receive $10, through next spring, assuming their reported income falls under the qualifying limit.
Is there anything I need to do to get my credit?
Payments will be based on a filer’s tax return. If that hasn’t been processed, the IRS will use tax returns as a substitute.
The IRS has set two online portals to reach low-income families who don’t usually pay taxes. The first is similar to the form used for stimulus payments in ; it will allow filers to submit their family and income information and then claim any stimulus payments they may have missed since the beginning of the pandemic.
The second IRS portal will allow filers to update key information such as their address, income, and family size — all important indicators regarding how much money one can expect from the expanded child credit.
Can I choose how often I receive the credit?
Yes. There are two ways to receive the credit: as a lump sum, to be distributed in after filing your tax return, or as six advance monthly payments from July to December and the remainder in Families can use an IRS tool to indicate which option they prefer.
Every family that qualifies for payments will receive at least part of the expanded credit in a lump sum early next year. But filers can choose to start getting half of that money as early as July, with payments coming in around the 15th of each month. Families that choose the monthly option will receive the remainder of their credit in , after filing their taxes. Those that go the other route will get the full amount in
For families with a child younger than 6, for example, that means they could receive either $ a month for six months (starting in July) and another $1, early next year, or the full $3, in Families with a child older than 6 but younger than 17 could get $ a month for six months and another $1, in
When will I receive my payment?
Most families opting to receive the credit in the form of monthly payments will get the first one from the IRS via direct deposit on or around July (If your direct deposit information is not on file with the IRS, you’ll receive either a paper check or a debit card, though they could arrive slightly later than the 15th.) Payments will continue to arrive mid-month, barring weekends and federal holidays, through December.
Correction, May An earlier version of this article misstated the dollar amount of the American Families Plan. It is $ trillion.
Whether youre looking for ways to save on vacation or trim your budget, youll find a wealth of information on Reddit. But how can you tell whats legit and whats a little less realistic?
See: The Worlds Most In-Demand Jobs That Dont Require a Degree
Related:This Is the Living Wage You Need in All 50 States
If youre on Reddit sifting through threads to try and find the best tips to save money, look no further. GOBankingRates has compiled the best budgeting hacks users have offered so you dont have to go searching for what has the most upvotes.
Cash Out: 45 Jobs That Can Make You a Millionaire Before Retirement
Advice: Use the public library for books, ebooks, movies, audiobooks, online courses. Everyone knows about it but it seems like more could use it.
Because of the internet, some of the advantages of libraries might have been forgotten but theyre a free resource that offer so much. You dont even have to go down to the library to benefit just download an app like Libby to download ebooks directly to your phone or other reading device.
Many libraries also have subscriptions to publications so you can browse articles on their computers without dont having to pay for them. Some libraries even offer technology like 3D printers for free that you would be costly to use elsewhere. And though you may associate libraries with the shhhh! sound, many offer classes and programs from knitting to personal budgeting that dont require you to zip your lips upon arrival.
Generation Z: The Future of Finances
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Advice: The 72 hour rule is pretty helpful. If you want something that is not a necessity, instead of buying it immediately, add it to a list or spreadsheet, then wait 72 hours. If after 72 hours, you still want it, then you can buy it. It seems that % of the time, after the 72 hours is up, I dont end up buying the item I thought I wanted. The reason I like doing it with a spreadsheet is then I can at the end of the year how much money I DIDNT impulsively spend.
- Submitted by: Icarus_Jones
This tip will help you stay safe from making purchases because of boredom or trendy ads on social media. Chances are, you wont even remember some of the stuff you bookmarked 72 hours later, let alone want to buy it. Giving yourself some time before you hit buy ensures youre purchasing things that really matter to you and are truly worth your money. Plus, if you choose to add items to your cart and then step away from it while online shopping and, some sites might give you a discount as an incentive to buy. So for the items you really want, you might get a good deal as well.
Watch Out: Dont Fall Into the Instagram Money Trap Heres How To Get Rid of FOMO
Advice: Dont buy something that you normally wouldnt buy just because you have a coupon.
Just because something is a good deal doesnt mean you need to own it. Consider if you would have bought the item even if it was full price. If the answer is yes, then the coupon just makes it better. If the answer is no, put the coupon away and save money for stuff you really want.
Check Out: 25 Biggest Companies Youve Never Heard Of
Advice: Instead of using Instacart, see if your local stores have pickup service. You still get to avoid going in so you are less susceptible to impulse buys, but you save huge dollars by not using the third party delivery.
Delivery fees start at $ for orders that are $35 or more for Instacart, and go up depending on how quickly you need your shopping delivered. That $ might seem worth it for ease, but adds up over time, especially if youre getting groceries delivered frequently. This hack allows you to avoid seeing something in the store and buying it simply because it looks good, and also eliminates the service fee of a delivery service.
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Advice: Lots of jobs have the option of auto deductions to savings accounts from your paycheck. Send $X or X% of every check to a savings account at a separate bank from your checking. Then, dont have a debit card for the savings account: force yourself to go to the bank in person to withdraw cash.
- Submitted by: harrison_wintergreen
With this tip, savings is built into your paycheck without you having to think about it. This way, you can use your entire paycheck to pay bills and spend on things you need without having to budget for savings on top of it. This also ensures that a certain amount will be put into savings every month without the temptation to spend it.
Read More: Corn Flakes, Mountain Dew and 9 Other Beloved Brands With a Twisted History
Advice: My husband and I only pay for things in cash other than bills. It takes a higher level of consciousness to shell out $ cash for fast food than just swiping a card.
Whenever you get paid, consider withdrawing all of your spending money youve budgeted. Physically feeling and seeing the money suddenly gives it more value and most likely, you wont make as many impulse purchases.
More From GOBankingRates
Last updated: Oct.
This article originally appeared on GOBankingRates.com: The Best Reddit Hacks To Save Money
If youve spent the better part of January wondering when your $ federal stimulus check will arrive, be warned: Theres no easy answer as to when you might get the money.
It could be slowly making its way through the U.S. postal system. Or you may have to wait until you file your tax returns, which the IRS wont start processing until Feb.
If it doesn’t show up, claim it on your return, said Eric Smith, an IRS spokesman. We don’t want people waiting to file if it hasn’t gotten there.
Marc Hoffman, the self-employed owner of Rocky Mountain Bar League, which organizes games such as cornhole and bowling in bars, likely will have to claim it as a Rebate Recovery Credit on his federal tax return.
In April, when he didnt receive the first pandemic stimulus payment, he was able to go on the IRS website and fill out a form to claim it. This time, that option is not available. It appears a check was never mailed because Hoffman doesnt see any record of it on his IRS account and even if it was, Hoffman has moved twice since the pandemic started.
If he is due a refund, the stimulus will be included in that total. If he owes money to the government, the $ will be applied toward that balance, according to the IRS website and tax professionals.
“Whether its $ in my hand or $ being taken off my potential tax bill, it’s $ either way, Hoffman said. It still feels like I’m not getting it to begin with.
The payments are intended to inject a shot of adrenaline into an economy wrecked by the pandemic. The first round of stimulus sent payments to million Colorado residents beginning last April and funneled $ billion into the states economy, according to IRS data. The impact will be less on the second round because the payment amount was cut in half.
The IRS aimed to send the second round of money within days of the presidents Dec. 27 signature on the economic stimulus package approved by Congress. But the quick turnaround was complicated by the IRSs annual preparations for tax season, during which the agency must update its computers and forms to reflect last-minute changes in tax laws.
The first official wave of payments went out the first week of January. Additional payments continue to roll out, Smith said.
“In general terms, we were trying very much to deliver as many payments as possible as quickly as possible, he said. We didn’t have much time to work on it.”
Last week, President Joe Biden signed an executive order that launched a widespread government effort to get the payments into as many hands as fast as possible. One of those requirements is for the U.S. Treasury Department to set up an online claims system for Americans who do not file tax returns, generally elderly and low-income people. The order also required more outreach to those who do not speak English, according to a Treasury Department fact sheet.
The rollout, though, has been clunky. While some people received the payments via direct deposit early in January, others are waiting because of a sluggish postal system. Some people who received direct deposits in April are now being sent checks for no explicable reason. And then there was an IRS error that delayed payments earlier this month for millions of TurboTax users.
Its a challenge, Henry Grzes, the American Institute of Certified Public Accountants leader on tax practice and ethics, said. I know people really need this and you want to get it to them as quickly as possible.
When Congress wrote the rules for the most recent stimulus package, the income eligibility on the stimulus payment changed. So some people who reported annual earnings above $75, on their income taxes and got a check in may not get one in the second round. The AARP estimates individuals who earned more than $87, in , couples that made more than $,, and head of households who earned more than $, may not get payments in the second round, according to its website.
Rather than direct deposit or checks, some people will receive debit cards and there have been reports of people tossing them in the trash after mistaking them for unsolicited credit cards. Those Visa cards, issued by MetaBank, arrive in a white envelope with a U.S. Department of the Treasury seal, the Treasurys website says.
Then theres the issue with what information the IRS has on file for each taxpayer. If a person closed a bank account or moved since filing returns, then the money likely wont be coming until its claimed on a tax form.
That is the case for Megan Ives,
She received her spring stimulus via direct deposit. This time, the IRS says it was mailed on Jan. 6 but to an old address. Attempts to track its whereabouts have been unsuccessful despite Ives careful study of the IRS Get My Payment Frequently Asked Questions webpage.
“The first stimulus was a direct deposit to my bank account and I have no idea why this one would be a check in the mail, she said.
The IRS says some banks rejected the direct deposits because of incorrect routing numbers, although Ives said her account has not changed.
The check still could show up in Ives mailbox. But if someone plucked it from the mail and cashed it, she could end up in a back-and-forth with the IRS to prove she never received the money, Grzes said.
Grzes said he would advise anyone who hasnt received a check or debit card by the time they file taxes to claim the recovery rebate on their returns. This includes low-income and elderly people who typically dont file taxes.
This right now is the only avenue you have to claim this credit, he said.
Ives is steadily employed as a policy analyst at a criminal justice reform nonprofit and isnt relying on the money to pay bills. She even donated part of her first stimulus payment. But she understands the bubbling frustration from those who need the money.
“It’s just such a bummer, Ives said. I’m sure the people who really need the money right now don’t have the resources and time to easily navigate this.”
It looks like cannabis stocks have entered the "meme" stock fray, as shares of Tilray Inc (NASDAQ:TLRY) were last seen up % at $ Tilray's CEO Irwin Simon is buzzing about the attention from retail investors, saying "We love having them as part of our shareholder base," as he believes their high level of knowledge about the company and its products makes them the perfect investors. In addition, the mini-rally has options traders flooding the cannabis concern, with speculation from both sides of the aisle.
More specifically, calls and puts are being traded at triple the average intraday amount, with , calls and 30, puts crossing the tape already today. Leading the charge are the weekly 6/11 and strike calls, with new positions are being opened at both. Buyers of these contracts are expecting more upside for Tilray stock by Friday, when the options expire.
This appetite for calls is nothing new, though. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) TLRY's Schaeffer's day call/put volume ratio of ranks in the 72nd percentile of its annual range. This suggests a much healthier appetite for calls over puts of late. However, considering that % of the stock's total available float is controlled by short sellers, it's possible some of that call buying could be shorts seeking an options hedge against any unexpected upside.
Now actually looks like a nice time to buy premium on the security, too. This is per the stock's Schaeffer's Volatility Index (SVI) of %, which ranks in the 15th annual percentile, hinting at low volatility expectations at the moment.
Though still a far cry away from its Feb, two-and-a-half year high of $67, Tilray stock boasts a % year-to-date lead. Today's positive price action also has the equity trading back above the day moving average, marking the first time TLRY is poised to close above the trendline since early April.
Stimulus check reddit
An 'awful lot' of US stimulus money was likely used for speculation during the recent Reddit-driven market mania, says billionaire investor Sam Zell
- Sam Zell told CNBC stimulus money was likely used for risky investments during the recent Reddit-driven market mania.
- He said many investors were probably using previous US stimulus money to "gamble."
- The investor said the next round of stimulus aid needs to be towards "people who really need help."
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Billionaire investor Sam Zell told CNBC on Tuesday an "awful lot" of US stimulus money was probably used to speculate in markets during the recent Reddit-driven frenzy, and said he hopes the next round of stimulus aid is directed towards "people who really need help."
The Equity Group Investments founder said stimulus money that goes to "everybody," including households with incomes north of $, could lead to more speculation and risk-taking in the markets.
"What you're doing is you're just creating a whole bunch of surplus capital that's floating around and everybody's trying to figure out what to do with it, and isn't this a fun way to gamble?" Zell said.
"And since it's the government's money, you didn't have it before, you didn't need it, why not roll the dice and see what happens?" he added.
Read more:An ex-Merrill Lynch ETF maven shares how to construct a portfolio that's perfect for today's market landscape - including 4 must-have sectors for sustainable returns
Zell also said that the market speculation that occurred as investors piled into heavily shorted stocks in recent weeks is "very negative for the stock market," and reminds him of the late 90s, when investor enthusiasm for highly speculative internet stocks eventually led to the dot-com bubble burst.
The investor said he hopes the next round of stimulus aid is directed towards "people who really need help." Under President Joe Biden's $ trillion relief package, individual taxpayers making up to $75, and couples earning up $, would receive direct stimulus checks of $1,
Zell added that outside of the transportation and hotel industries, the economy is in "great shape," and he's worried overstimulating the economy would result in the return of inflation.
The investor also voiced his concerns about over-exciting the US economy through issuing too much debt. A massive debt increase would dissipate the US dollar's reserve currency status, which he called his "single greatest nightmare."
Read the original article on Business Insider
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Your stimulus check might be delayed if you filed your taxes with an online tax preparer
Stimulus checks may be delayed for some customers, the IRS and major tax prep software companies warned this week.
The problem is direct deposited payments bouncing from temporary or alternative bank accounts used to receive the first round of stimulus payments which the companies have now closed. These include Refund Transfer services used with tax prep software and reloadable pre-paid debit cards.
The lag could affect as many as 14 million people, a banking industry source told NBC News.
Many are likely to be lower income and among those who could use the stimulus relief the most.
The second round of economic impact payments, which provide for $ per adult and qualifying dependent child, started going out at the end of December.
“These payments may begin to arrive in some accounts by direct deposit as early as tonight and will continue into next week,” Treasury Secretary Steven Mnuchin tweeted on Dec.
Millions of taxpayers with active direct deposit information on file with the IRS started receiving theirs in the first few days.
But when some filers went to the IRS “Get My Payment” tracker to check on their relief aid, they were surprised to see a different bank account number listed as their own — and no money in their own bank account.
A similar issue cropped up with the first round of stimulus payments in April. Some taxpayers who use “Refund Transfer” services that allow them to pay their tax preparer out of their tax refund itself, an appealing option for struggling filers, also had their payments delayed due to an administrative quirk.
In order for the refund transfer to work, the preparer creates a temporary bank account to receive the refund, takes their cut, then passes on the rest to the filer, and closes the account. But the IRS used the closed bank account on file, leaving some funds in limbo.
"People who need money now may have to wait months."
Depending on the situation, some of these customers will still get their funds automatically direct deposited to their bank account or reloadable pre-paid debit card.
However, others could face further delays, possibly receiving a paper check, or only receiving their stimulus payment in the form of a credit on their taxes — next year.
“In some cases, money was sent to a different account than the first stimulus payment last spring,” tax preparation company H&R Block said in a statement emailed to NBC News.
On Tuesday evening, the IRS updated its guidance and said if the tracking site "reflects a direct deposit date and partial account information, then your payment is deposited there."
If the site lists the date a payment was mailed, it may take up to four weeks and consumers should "watch your mail carefully for a check or debit card."
But if the tracker says “Payment Status #2 – Not Available" then filers' only option is to claim a tax credit. That is done by completing line 30 of the Form or SR.
“The IRS Get My Payment website may display an account number you don’t recognize. If you took a Refund Transfer, it may be reflecting that account number,” H&R Block tweeted on Monday. “But don’t worry — we have sent these payments on to the method you chose for Refund Transfer: direct deposit, check or Emerald Card. The money should be there by the end of the day.”
Ashley McMahon, spokesperson for tax preparation company TurboTax, said in an email the IRS has the banking information necessary for all customers and the agency “is the sole party with the ability to determine eligibility and distribute stimulus payments.”
Neither the IRS nor the Treasury Department responded to an NBC News request for comment.
“Because of the speed at which IRS issued this second round of payments, some payments may have been sent to an account that may be closed or no longer active,” the agency wrote in an online FAQ.
It also acknowledged that some of the payments may “bounce” back to the agency.
“By law, the financial institution must return the payment to the IRS, they cannot hold and issue the payment to an individual when the account is no longer active.”
The issue has even affected tax prep customers who had no issue receiving their first check.
Unlike the first round, tax preparers are giving the IRS a list of their closed customer accounts and telling the agency to update accounts on the government end, the banking industry source said.
The IRS has a Jan. 15 deadline to send out the checks, according to the legislation, which means if filers don’t get their payment automatically or by paper check by that time, they may only be able to get their stimulus in the form of a tax refund credit.
"It is disappointing that the IRS did not fix this problem, which it has known about for months, in light of the likelihood of a new round of stimulus payments," National Consumer Law Center attorney Lauren Saunders said in an email to NBC News. "People who need money now may have to wait months until they can file a tax return and get their refund, unless the tax prep companies are able to forward the funds."
That’s not soon enough for millions of Americans who were banking on having much-needed relief payments this week.
“This has been deeply frustrating as I have two kids and I am pregnant,” Tiffanie Perez, 27, of Brooklyn, New York, said in an online message. “This was supposed to give us a little boost and get food and bills paid. My husband literally just started working on Monday and unemployment ended for him.”
Perez said the IRS told her there was a “glitch” and she should wait two weeks to see if she receives a direct deposit, a paper check, or a letter informing her of the situation. If she gets nothing, her only option will be to claim it on her taxes.
“Many friends are so far behind on rent or skipped Christmas. This money was supposed to help a little and now it's not coming for who knows how long."
Sara F., 31, from St. Louis, Missouri, who asked that her last name be withheld for privacy reasons, had been counting on the stimulus payment to help catch up on bills after complications from a possible coronavirus case forced her to leave work, leaving her and her partner reliant on a single income. Most days she can’t get out of bed, but the past few days have been spent calling the IRS and TurboTax, she said.
Because she paid for her tax prep out of the tax refund, the stimulus payment went to the closed account and has now bounced.
“They said the bank rejected the money and sent it back to the IRS. The IRS said it may issue paper checks within three weeks once the money is officially returned,” Sara told NBC News. “If not we would have to trace the money — which, due to backlog, could take from six weeks to six months.
“Many friends are so far behind on rent or skipped Christmas. This money was supposed to help a little and now it's not coming for who knows how long,” she said.
The issue can also affect other filers who used alternative temporary bank accounts to receive their first stimulus payments, such as reloadable pre-paid debit cards by Green Dot or RushCard and those accounts are now inactive or closed.
"As long as accounts are active and in good standing, ACH deposits will post to those accounts," Green Dot spokesperson Alison Lubert said in an email. "We’re encouraging customers who are having issues receiving payments to log in for the latest information"
Consumer watchdogs blasted the red tape hampering the relief payments.
“At a time when every dollar counts to get food on the table, people simply can't afford to wade through bureaucracy or wait for a paper check," Lisa Gilbert, executive vice president at consumer advocacy group Public Citizen, said in an email.
Ben Popken is a senior business reporter for NBC News.
Mohammed Syed is a reporter for NBC News' social newsgathering team.
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Inside the Reddit army that's crushing Wall Street
By lunchtime, the stock options Omar had bought were down around $7, from their peak.
Omar knew he should probably sell the options before they became worthless. But he followed the mantra of the place where he'd first learned about options trading, the subreddit r/wallstreetbets, and held on.
"It was diamond hands," said Omar, using the site's term for holding an option even after incurring extreme losses or gains. "It was like, all or nothing."
Within two days Omar had lost not only his gains but his entire initial investment.
Desperate to earn it back, Omar, 23 years old and the child of working-class immigrant parents, took the rest of the money he could scrounge up — cash from his tutoring gig, his stimulus check, a chunk of his freshly-deposited student loans that was supposed to pay for his living expenses (which were basically non-existent after he had moved home during the Covid outbreak) — and poured all of it, $22,, into his Robinhood account. Then he opened up WallStreetBets.
"I was really scared," Omar told CNN Business in an interview in August. "All I wanted to do was just make my initial money back and pay it off."
By the end of the week, he had lost it all again.
Omar, who spoke on the condition that he be referred to using a pseudonym out of concern over the legality of trading with money from his student loans, said that he blames himself for his losses but regrets ever stumbling upon one of Reddit's most active communities.
"I would not have traded options," Omar admitted, "if I had not found WallStreetBets."
This January, with WallStreetBets now an inescapable presence, Omar was back on the board. Back to trading.
Stock market meets internet fringe culture
This past week has been a banner one for Reddit's island of misfit investors.
WallStreetBets exploded into the mainstream, moving from the front page of Reddit to the front page of the New York Times and nearly every other major news site. The subreddit's short-squeeze of GameStop helped shoot up the price of the video game retailer's stock a mind-boggling 1,% from the beginning of January to Wednesday (before it fell again Thursday), captivating the minds and wallets of investors — both casual and institutional — and financial regulators.
But while millions are now discovering WallStreetBets for the first time, it has been building momentum throughout the pandemic. One can trace its epic rise to a perfect storm of favorable conditions: the exponential growth of the app Robinhood and its no-fee options trading, the extreme volatility Covid brought to the markets, the stimulus checks mailed to millions of Americans, the lack of televised sports for much of the year, and the unwanted free time stuck at home the pandemic has forced on many people.
Describing itself as if "4chan found a Bloomberg terminal," the forum's giddy nihilism, inscrutable language and memes fueled a war on a perceived corrupted mainstream.
And it's led WallStreetBets' evolution into an unprecedented force of retail-investing financial radicalism, offering the allure of get-rich-quick gains to a rapidly expanding audience of millions. (5, at last count).
Many celebrated WallStreetBets' war on GameStop short-sellers as a populist campaign against hedge-fund raiders looking to profit off the destruction of a well-known retail brand like GameStop. But unlike many other similar online communities, there is also a clear financial goal for the people in it.
"It's a means to an end," explained one of them, AJ Vanover.
At his retail job in a battery store in Missouri, Vanover makes around $35, a year. But on Wednesday, he found himself a paper millionaire. (His Robinhood account exceeded $1 million, according to screenshots he provided, but he hadn't cashed out yet). For months, Vanover had been following GameStop as a "value play," posting his thoughts on WallStreetBets along the way.
This week, Vanover was off from work, quarantining after a coworker contracted Covid, but now thinks he won't return to his old job. "I know I'm going to do two-weeks' notice," he said with a nervous laugh. "So, I'll be nice about it.' Vanover said he plans help his parents with their mortgage, and he intends to keep investing in options.
'These guys can move markets'
Enter WallStreetBets for the first time and you'll almost certainly be a bit lost.
The forum's language can be difficult to understand, even for someone who knows typical Wall Street jargon. The vocabulary specific to the subreddit is extensive, and it will almost never be explained to a newbie earnestly asking for a term's definition. Posters revel in their crudeness; homophobic epithets are tossed around as terms of affection.
The site is a chaotic mix of memes, screengrabs of wild losses and gains, the occasional "deep dive" into a stock, all unified under the guiding principle of betting as much money as you possibly can on the highest possible risks, generally short-term options trading. Trading individual stocks, as opposed to options, is generally taboo. There's r/investing for you right down the corner, thank you very much.
But fringe online movements have shown that internet culture can lead to extreme behaviors, making radical ideas palatable for people raised on memes and 4chan in a way that they likely wouldn't be, at least at first, if presented in a straightforward manner. In the case of WallStreetBets that extremism has a real financial impact.
"These guys can move markets," said Jeremy Blackburn, an assistant professor of computer science at Binghamton University who studies extremist communities on the web.
"That's a huge deal."
Lana Swartz, assistant professor of media studies at the University of Virginia, describes the subreddit's financial spin on the kind of nihilism seen on 4chan as the idea that its users should have a "relaxed" relationship with their money. She characterized the spirit this way: "Let it come. Let it go. Because the kind of secret that the elites know is that money is. B.S., and only by knowing that money is B.S. can you accumulate a lot of it, which should be your goal."
That ethos on WallStreetBets not only encourages risky trades, but also trading the entirety of your net worth or portfolio in a single risky trade — a financial move that would be sure to make any certified financial advisor bleed from their ears.
"It's not even the ends that matter. It's the means. It's the fact that you're placing this bet, that's where the value in all this is. Sure, you may get money, or you may end up broke, but you played the game, and you did it in some crazy way," Blackburn said.
"It is a little bit scary, though, right? Because this is real money. And any time you are more interested in the game than the outcome, that can be incredibly dangerous."
4Chan meets a Bloomberg terminal
WallStreetBets has long described itself as "4chan with a Bloomberg terminal."
Look closer at communities like 4chan or 8kun, and WallStreetBets, and it's not just a shared use of memes that link them.
One key element to 4chan is its opposition to mainstream "normie" culture, an idea that has broad applicability. For many on 4chan, normie culture is the popular kids in your high school. For WallStreetBets, the normie culture it stands in opposition to is one of "safe" mainstream investing: focusing on long-term gains, maxing out your (k)s, buying index funds; Suze Orman "Boomer" advice, as users say.
On WallStreetBets, that's all depicted as a sucker's game.
"They don't want to wait 20 years for their bets to pay off," Blackburn said.
Swartz sees the cynicism surrounding long-term investment advice on WallStreetBets as an understandable reaction for a young generation that has witnessed two economic crises, the chaos of the Trump years, ever-growing inequality and the looming threat of catastrophic climate change.
"We're living in a time of absolutely unprecedented uncertainty," she said. "There really is no reason for anyone in their twenties to imagine that their (k) is going to pay off in 50, 60 years the way it did for their parents. And I'm not saying they shouldn't believe it. I'm just saying they have good reason not to."
The specter of the financial crisis, in particular, looms large over the community.
"I was in my early teens during the '08 crisis," wrote one user going by the handle ssauronn in a recent post celebrating the site's apparent (albeit potentially fleeting) victory over hedge fund Melvin Capital, which, according to CNBC, closed out its position in GameStop this week after taking a huge loss. "When that crisis hit our family, we were able to keep our little house, but we lived off of pancake mix, and powdered milk, and beans and rice for a year."
"Stop listening to the media that's making us out to be market destroyers, and start rooting for us, because we have a once in a lifetime opportunity to punish the sort of people who caused so much pain and stress a decade ago, and we're taking that opportunity."
You can also spot a shared nihilism between 4chan and WallStreetBets in their casual and ironic references to suicide. On WallStreetBets, longing "$ROPE" is an inside joke for suicide, one that is almost always posted under a disastrous loss.
4chan, 8kun and WallStreetBets exalt a cartoonish version of autism both ironically and sincerely — "autists" is a term of pride on both sites — as a superpower of persistence that allows one to fully commit to a worldview leagues apart from the stifling conventional wisdom of the mainstream.
For political extremists a so-called "autist's" powers can be a weapon to be deployed against enemies in destructive doxxing and harassment campaigns. At WallStreetBets, an "autist's" power is displayed by committing to a trade with "diamond hands," holding on and refusing to sell even after incurring extreme losses or gains with the goal of attaining ultimate profit.
However, there are key differences between WallStreetBets and sites like 4chan.
Unlike other fringe groups, WallStreetBets generally hasn't doxxed its enemies, or brigaded others (when one subreddit aggressively posts on a rival subreddit), and while it has a long-standing rivalry with the staid r/investing — a subreddit so committed to its ideals of modesty and risk avoidance that it shuns individual stock picks — StockJock-e, a moderator for r/investing, politely downplayed the beef, calling it "facetious and exaggerated" in a message to CNN Business.
To Blackburn, who has focused his studies on toxic internet behaviors ("a**holes are my expertise," he said), WallStreetBets is — by the low standards set by others — a relatively well-behaved online community. "It's kind of not a bad behaving sub," said Blackburn.
"Minus the fact that people are getting wrecked money-wise."
Making the big kill
To understand how risky the trading strategies employed on WallStreetBets are, it's key to understand just how options trading works.
Instead of buying a stock, an options contract allows an investor to purchase the option of buying shares of a stock at a set price in the future. As the expiration date of the contact draws closer, the valuation of the contract can swing rapidly, as it will become worthless to the buyer if it doesn't hit its target price.
While options trading is risky — if you bet wrong you can be stuck with a literally worthless asset — it also allows for leveraged bets. The shorter the expiration date of an options contact, the riskier and more volatile it becomes.
"The nature of stock options convinces people to take a thousand dollars and turn it into a hundred thousand or in some cases, one million dollars," said Jaime Rogozinski, who founded WallStreetBets in but was removed from the site by Reddit in April (Reddit says he was removed for profiting off the WallStreetBets brand, a claim he denies.) "You don't feel bad for the person when they lose the thousand dollars."
WallStreetBets rise hasn't happened in a vacuum; it coincides with a broader boom in retail options trading.
"Retail option volumes are completely off the charts," said hedge funder Benn Eifert of QVR Advisors, who described the volume as being "multiples of any prior record that we've ever seen."
Aided by Robinhood, which revolutionized the ease and cost of trading options — and which reportedly profits more from them than regular stock trades — retail investors only have to answer a few short questions to gain access to a volatile world. (Although Robinhood makes this process easy, it cautions that options trading "entails significant risk and is not appropriate for all investors.")
But if options trading is risky, and short-term options ("F.D's," short for "F****ts Delight" in WallStreetBets' casually-flung homophobic lingo) are the single riskiest type of options, putting your entire life savings ("YOLOing") into a short-term option is, from any "rational" financial perspective, complete madness.
It's also so common on WallStreetBets that YOLOing has its own flair or tag, allowing you to search through the many, manypeople posting their life-savings-and-all trades.
"Generally, this kind of behavior tends to result in a loss of most or all of the money of the people involved," said Eifert.
But of course, high-risk trades come with the tantalizing possibility of high rewards — rewards that inevitably find themselves on the front page of WallStreetBets.
Minhajul, 22, is a college student and part-time pharmacist, born in Bangladesh and raised in Queens, New York, who decided to put his stimulus check into Robinhood after seeing what he described as "insane" and "crazy" gains posted on WallStreetBets. Buying weekly options trades and reinvesting the entirety of his gains with each successful trade, Minhajul managed to spin his initial $1, investment into $, in a delirious two-week period towards the end of July.
"I'm like, 'Holy sh** I'm rich,'" Minhajul, who did not want his full name printed, recalled in an interview.
On the night of July 30th, Minhajul couldn't sleep — the possibilities now afforded to him by his newfound riches kept swimming his head: a new car, even a new house. But the next morning Minhajul found himself exhausted and passed out for a mid-morning nap. When he woke up, his portfolio had bled $, By the end of the week, he was down to $8,
Minhajul said he was unfazed by the loss of his unrealized potential gains — to him he was playing with house money anyway — but others aren't so lucky.
Loss porn and other rituals
Click on WallStreetBets' extensive (and always expanding) "loss" section, and you'll witness each of the five stages of grief warped through a funhouse mirror of online ironic detachment.
"Loss porn" is a staple on the site, one with its own rituals. One is expected to post their losses (or gains) with their positions and then face the peanut gallery.
Rubbing salt in the wounds is common ("Does your sell button not work?"), as are crude comments about one's "wife's boyfriend." Less prevalent, but still notable, are the genuine words of encouragement when one's despair appears profound enough.
"Lot of people asking if I'm okay. Honestly, not really. It's going to take a long time to recover financially, and maybe even longer emotionally, knowing how much damage I've done to my own life in more ways than just the money," said one Reddit user who claimed to have lost $28,
"Your d*** still worksYou'll feel like s**t for a while, rightfully so, but set yourself a small goal and go achieve it," counseled another.
Scroll around Wallstreetbets long enough and you'll inevitably find those in the throes of what can only be seen as a possible gambling addiction.
One Reddit user posted a screenshot of a $, loss titled "YOLO is a hell of a drug! Farewell boys," describing themselves as a healthcare worker who had gambled away years of savings on YOLO trades. In the comments on their farewell post, they described the mindset that led them from being a "rational investor" to gambling their life savings on options trades.
"I just [wanted to] break even. If I break even I'll stop. And you never do. Overly aggressive, over margined YOLO plays after that. I study and stared at the charts every trading day in day trading grandeur, thinking my probability has increased that much more from my first big win Desperate option plays at the end."
"I went from a rational investor to some sick irrational desperate gambler."
Weeks after their "farewell," they were back on the site.
"No emergency fund. No retirement," they wrote. "And lost my last check on a credit spread."
A massive new audience
WallStreetBets' burst into the mainstream has left it in uncharted territory.
There are the legal questions surrounding the site's collective push to boost GameStop's shares, with the SEC announcing in a statement that it is "aware of and actively monitoring" the volatility of the markets.
The White House and newly sworn-in Treasury Secretary Janet Yellen are "monitoring" GameStop's stock bonanza and WallStreetBets briefly went private on Wednesday, as the moderators made the site private to "ensure Reddit's content policy and the WSB rules are enforceable." On Thursday, Robinhood, the trading platform of choice on WallStreetBets, made a controversial move to limit trading on GameStop, AMC, Nokia and other stocks promoted on the subreddit.
Reddit said in a statement to CNN Business that its "site-wide policies prohibit posting illegal content or soliciting or facilitating illegal transactions. We will review and cooperate with valid law enforcement investigations or actions as needed."
And even if the forum survives scrutiny — whether regulatory, legal or from Reddit — it will have another issue to contend with. When part of the draw of a place online is the community, the shared language and jokes and memes, what happens when new people unfamiliar with any of that come suddenly flooding in?
With WallStreetBets' campaign against Melvin Capital now gracing the front pages of newspapers, those who have been burned by WallStreetBets' advice in the past are finding the allure of striking it rich on weekly options trades hasn't fully disappeared.
Omar, the pre-med student who lost tens of thousands of dollars on weekly options trades, told CNN Business that he is back on WallStreetBets, trying to recoup what he lost trading money from his student loans last year. He'd bought one GameStop option which shot up to $10, from $7, amid Wednesday's rally.
"There is a pandemic. There is nothing to do. I can't party. I can't go outside, and the prospect of making a little money sounds really good,"Omar reasoned. "What's not to like?"