Debunking the Myth that the Stock Market is Only for the Rich
Have you ever heard someone say the stock market is only for rich people? Mind you, these are probably the same people who wouldn’t bat an eye at buying a fistful of lotto tickets or dropping cash at a casino. Maybe you have similar reservations about the stock market?
Actually, let’s put that lotto example in perspective with help by The Motley Fool. “Overall, Americans spent an astounding $71.8 billion on the lottery in 2017. That’s more than what was spent on video games ($43.8 billion), movies ($11.89 billion), and concerts ($8 billion) combined, according to data provided by LendEDU.”
And Las Vegas? Direct visitors spent $34.5 billion in 2018. That doesn’t mean it was all spent at the casinos, but…
It’s your money. You do you, but if you think playing the stock market is only for those who can afford it, you’ve been misguided. You’re losing out on a great opportunity to rack up serious returns, and the younger you are, the more time you have to take advantage of the power of compound interest.
My first “real job” after AmeriCorps started as a temporary contractor earning $500 a week with no benefits. Mind you, this was in one of the country’s most expensive metropolitan areas. When my contract was converted to a permanent position, my salary took a positive jump forward, but I was still living in poverty by local standards.
My benefits weren’t great. Actually, they were close to nonexistent. What I did get were nominal retirement contributions. When I left that position nearly two years later, I did not take a king’s ransom with me, but the few thousand dollars I had accumulated in retirement funds became the foundation for something greater. I could have easily withdrawn that money and put it toward everyday expenses. Retirement seems so far away when you are in your mid 20s, but achieving financial stability is about starting as early as you can to enjoy the benefits when you need them most.
How much do you need to get started?
Reputable services like Betterment have no investment minimums. You could theoretically start investing with as little as one dollar. Of course, the more you put into the account, the greater your returns, and a good thing about robo-advisors is that the service will automatically rebalance your money to meet your target goal, whether it’s retirement or a major purchase. So far I have opted not to use a robo-advisor, choosing instead to drive my own investments at older firms like Vanguard and Fidelity, but robo-advisors are a perfect way to get started. Because that’s a key point: You have to start somewhere.
Can people become rich off the stock market? Absolutely! But, that’s completely different from claiming only the rich can own stock, and regardless of how much you start investing, whether it’s one dollar or one thousand, remember the stock market is supposed to be a long-term strategy. Make the spare dollars in your wallet start working for you. And never mind the cynics who would have you believe there is no place for you in one of the best investment vehicles available.
In the months ahead we’ll dive into exactly what the stock market is, what stocks are, how to avoid unnecessary fees, traditional accounts versus Roth, and so forth. For now though, the takeaway is this: Start making up your mind that the stock market is a friendly place. The stock market is nothing more than a place where, if you have something to sell, someone will buy it.
If you have not started investing in the stock market, what’s been holding you back? If you are investing in stock, what has kept you in the game? Share your stories, and help others learn!
