Growing up during the 2008 market crash and the era of “Too Big to Fail,” it is no surprise that many in our generation look at Wall Street and the financial markets with disdain and ire. Coming from a family of plumbers, I know the effects that bursting market bubbles — in this case, housing — can have on everyday folks.
The rich continue to get richer and the poor continue to get poorer, and gains in the stock market may increase the profit of those at the top, but the average worker doesn’t see that benefit outside of maybe their pension. Work, earn, spend and repeat is a cycle that far too many Americans have gotten stuck in, and become devastated once hit with one of life’s inevitable unfortunate circumstances. Due to these situations some have proposed a dismantling of the financial institutions and an overthrow of the capitalist system, but I have a counter proposal: A Democratization of Wall Street.
Stock ownership is down — especially among young Americans — and that trend is continuing. More families in the U.S. own cats than they do stocks.
Interest rates are remarkably low, and only slowly getting higher, so wages are the sole form of income for many people.
A third of working middle class adults are not contributing money to any form of retirement account and the median retirement savings is only $20,000.
The S&P 500 went up 11.4 percent in 2014 and far too many Americans didn’t see a penny from it.
Fortunately, getting involved in the market is getting easier and easier.
A while ago, a company called Robinhood had released a $0 commission, $0 minimum investment stock-trading app.
Buy, sell and research right from you phone and start growing your savings.
The founders of Robinhood are finance majors who were a part of the Occupy Wall Street movement.
Their goal is to open up the financial markets to everyday people and allow the average American access to this wealth generator that formerly was the exclusive playground of the rich.
Now I am not suggesting that every lower and middle class person go and gamble their savings away on the market — unless you want to, I guess — but I am saying that we need to take advantage of making our money work for us.
Due to the nature of compounding interest, getting involved in investing early is much more important than investing a lot.
So why wait?
Take 5 percent, 10 percent or even 15 percent of your income and start looking into making investments.
Buy index stocks that are diverse enough to go up or down with the general rate of the market — which is on fire right now.
Be socially responsible and invest in companies whose morals and mission statements you believe in.
Play the market and attempt day trades or take some risks and buy dirt-cheap penny stocks.
I really don’t care what you do, but I want you to get involved in investing.
Read some books, explore financial newsletters or chat up your finance major friends so you can develop your investment skills.
Invest in higher payoff risky stocks when you are young and then put your money into safer bonds as you get closer to retirement.
It won’t be all sunshine and rainbows; bubbles pop, stocks plummet and markets crash, but in the end the market will recover and grow.
Don’t be the retiree who reaches age 65 without enough money to get by, let alone enjoy your retirement.
Get in the habit of investing now and through the magic of compounding interest you will be much better off down the road.