According to a study done by NYU economist Edward Wolff, 84% of stocks are owned by the richest 10% of American households.
Even more extreme than this is the fact that the top 1% hold 50% of all stocks in America. Meaning a teeny tiny amount of Americans own trillions of dollars, and a vast majority own nothing. That type of inequality is just sad.
So many Americans are locked out of a real wealth machine by not being invested in Mr. Market.
Who is Mr. Market?
The New York Stock Exchange (NYSE) is an American stock exchange on Wall Street in New York City. With a market cap of more than US$16 trillion, the NYSE is the world’s largest stock exchange, averaging US$169 billion in daily trading value in 2013.
That would mean the richest 1% own approximately $8 Trillion worth of stocks.
Sadly, only 52% of Americans were invested in stocks.
Let’s fast forward just five years.
According to Barron’s, the stock market is worth $30 Trillion as of 2018. You see that?! The stock market has almost doubled in size! This is tremendous.
In 2008, most portfolios lost half of their value. Now look at us today. The S&P has more than tripled since the Recession! A trillion here, a trillion there and boom we have almost double the assets we had in 2013, the same year LeBron won his second championship ring with the Miami Heat.
Therefore, as of last year the richest 1% now own $16 Trillion dollars of wealth in the stock market.
The richest 10% has a mind-boggling $25.2 Trillion in stock wealth! Each owing over $900,000 in stocks.
Keep in mind that the bottom 50% of the poorest households have virtually no wealth as many have $0 in savings and investments.
The U.S. stock market has been on fire as it returned 22% last year.
With a 220% increase over the last decade, that means the rich are getting richer.
You need to get a piece of that stock pie in the sky
Why is it so important that you invest in Mr. Market? It’s simple. Investing is how you beat inflation.
With inflation averaging 2-3% annually, you must find a way to out run it. Investing will help you do just that.
I do not want you to miss out on the next $8 Trillion the market may gain over the next decade or so. Don’t sit on the bench! Get out there and get in the game! Nothing ventured nothing gained.
Wealth building takes time.
It’s a long game. You may need a decade or more to build some significant assets.
Did you that know with an interest rate of 10% your money doubles every 7.2 years? It’s true. It is because of the rule of 72, which states that a certain amount of compound interest will dictate how much you can earn over time.
I feel like that scene in Oliver Twist when he asks for more. But instead of food, I want dividends! My advice t to you is to invest!!!
Yes, give me some of that compound interest. It’s raining dividends and capital gains.
The first $100,000 is the hardest!
No matter how much you earn, it will take time to grow your wealth to something much grander over time.
Even with a nice return, the majority of your first $100,000 will come from your savings. The higher amount you save, the faster you achieve this goal.
I cut back on everything to get to through this first hurtle on the wealth accumulation phase.
I skipped the movies, $7 lattes, fancy vacations, new cars, clothes, subscriptions services, and nights out on the town. Put that money to work. Don’t act rich, get rich!
I know some guys that want to be rich, but spend like the world is flat like Columbus said; so they think we are going to fall off the edge and it is all going to end tomorrow, so you gotta treat yourself!
These poor souls decided to buy bottle service for a friends 45th birthday. The cost: $4,000! They split it between like four or five people.
Here is a little background on one of the fellas, let’s call him Scotty.
Scotty is still renting after being unable to afford to buy a home. Instead of banking his money for a down payment, he’s tossing around G’s more than Floyd Mayweather after signing a $100 million-dollar deal.
Sorry my man, hate to break it to you, but you ain’t “Money” Mayweather and don’t have his bank account.
Forget that! I would rather be financially independent than act rich for a couple of hours.
And the ladies loved that he spent that $1,000 on that bottle service. But then you know what happened at the end of the night, when the lights came on? All the ladies left!
I guess it was all about the bottle service. That’s just money down the drain right there. Bad money decisions happen everyday.
Maybe it really is like Jamie Foxx said, “blame it on the alcohol.”
Regardless, I want you to put that money in Mr. Market and let it grow.
If you are worried about downturns, then hedge your bets by putting money into savings as well.
Since it usually takes about 10-16 months for the stock market to recover from a crash, keep that amount of money in your savings. This will let you ride out the storm.
The goals is to not have $0 in your bank account. Something is always better than nothing.
Now save up that first $3,000, go open up a Roth IRA with a discount brokerage firm and go get started.
Don’t have $3,000 just lying around? No problem. If you can spare $100 bucks?
If so, then you can use the Automatic Asset Builder that lets you invest for just $100 a month with places like T. Rowe Price or Charles Schwab.
Now let’s go get this money. No excuses! I just gave you all the information you needed to get started.
Happy investing! And may the odds be ever in your favor.
