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True, im not poor, but im just scared to put money I might loose into it. I might take a plung one day on a super cheap stock and sees what happens
For most Americans, putting their cash into an account that will convert it into shares is the equivalent of putting a dollar bill into a machine and it turning to cyber dust.
Finance enthusiasts won't get "most" Americans to successfully invest.
Auto enthusiasts won't get "most" Americans to work on their own cars.
DIY enthusiasts won't get "most" Americans to remodel their own home.
Unfortunately, most Americans know how to make money, but are extorted by retail rates when it comes to having most work done for them. This causes their dollar to fall short and they spiral into perpetual scarcity.
For most Americans, putting their cash into an account that will convert it into shares is the equivalent of putting a dollar bill into a machine and it turning to cyber dust.
Finance enthusiasts won't get "most" Americans to successfully invest.
Auto enthusiasts won't get "most" Americans to work on their own cars.
DIY enthusiasts won't get "most" Americans to remodel their own home.
While it's true that "most" Americans may struggle with expenses and lack the capacity to save a large percentage of their income, it is bewildering and particularly unfortunate, that many have such reluctance to even touch the stock market.
Just as most of us are unlikely to become accomplished do-it-yourselfers, so too, most of us won't ever be successful in business. We are primarily employees in somebody else's business. Nevertheless, we can participate in the tenor and progress of American business via the stock market, if only in small and occasional amounts. That so many fail to do so, is more a psychological issue, than a pecuniary one.
While it's true that "most" Americans may struggle with expenses and lack the capacity to save a large percentage of their income, it is bewildering and particularly unfortunate, that many have such reluctance to even touch the stock market.
Just as most of us are unlikely to become accomplished do-it-yourselfers, so too, most of us won't ever be successful in business. We are primarily employees in somebody else's business. Nevertheless, we can participate in the tenor and progress of American business via the stock market, if only in small and occasional amounts. That so many fail to do so, is more a psychological issue, than a pecuniary one.
In order to get matching contributions, many private-sector companies require the employee to invest via the employer's own plan, which is often the 401(k).
Maybe it's the friction in getting contributions started, the electronic forms that need to be filled out... or maybe, on a related note, the employee procrastinates.
Perhaps it's the idea that you're penalized for taking your money out before 59 1/2. How about something employer-sponsored, with matching contributions, that allowed employees to invest up to 50% of their contributions into something that's not a target-date fund. (Yes, some employers offer as little as 10 choices for placing your money)
The contributions would be required to stay in, but the gains (not just dividends) could be cut as a check the employee at any time. Trading would be commission-free.
A 9-square sliding puzzle gets boring after a while. Give an employee something where they can see real distributions before retirement age. The other 50% will keep some of the contributions safe in managed, diversified funds.
I am not referring to 401Ks or other employment-related savings vehicles. I mean simply a scenario where Joe Sixpack manages to save 10% of his income, but mistrusts the market, and therefore keeps the money in the local bank, earning 0%, or perhaps at most 2% in something like a one-year CD.
Sure, if Joe can't manage to save anything whatsoever, the discussion is moot. But what if Joe DOES save? That's the topic here. And the point is that Joe won't ever build wealth merely by saving. He needs to have his capital compound, earning a good cumulative average rate of return. The practical way of doing that, is the stock market. If Joe avoids the stock market, out of fear, suspicion, mistrust of whatever else, then Joe will remain stuck in the hamster-wheel.
I am not referring to 401Ks or other employment-related savings vehicles. I mean simply a scenario where Joe Sixpack manages to save 10% of his income, but mistrusts the market, and therefore keeps the money in the local bank, earning 0%, or perhaps at most 2% in something like a one-year CD.
Sure, if Joe can't manage to save anything whatsoever, the discussion is moot. But what if Joe DOES save? That's the topic here. And the point is that Joe won't ever build wealth merely by saving. He needs to have his capital compound, earning a good cumulative average rate of return. The practical way of doing that, is the stock market. If Joe avoids the stock market, out of fear, suspicion, mistrust of whatever else, then Joe will remain stuck in the hamster-wheel.
CD's, IRAs and Roth IRAs all have early withdrawal penalties. Joe Six-pack just knows it's HIS money and no one is going to charge him fees on HIS money.
Joe Six-pack will have to find himself a public-sector job with a pension. He wants it laid out on paper. "I gave 'em 30 years, how much is my CHECK going to be for the rest of my life?"
While it's true that "most" Americans may struggle with expenses and lack the capacity to save a large percentage of their income, it is bewildering and particularly unfortunate, that many have such reluctance to even touch the stock market.
I'll agree with unfortunate but I don't see it as bewildering at all.
How many simply don't earn enough to afford a home purchase at all...
of those who can buy (sorta) ... how many are over-extended and on a fiscal knifes edge?
(Unlike their grandfathers who had functional pensions and could afford homes too.)
A 1970s Chef's Salad - but meatless - Chopped Boston lettuce, Romaine lettuce, hard boiled eggs, red kidney beans, green onions, chick peas, peppered Deli Slices, grape tomatoes, yellow peppers, red peppers, shredded carrots, chuncked Swiss cheese, radishes and home made Green Goddess dressing.
While it's true that "most" Americans may struggle with expenses and lack the capacity to save a large percentage of their income, it is bewildering and particularly unfortunate, that many have such reluctance to even touch the stock market.
Just as most of us are unlikely to become accomplished do-it-yourselfers, so too, most of us won't ever be successful in business. We are primarily employees in somebody else's business. Nevertheless, we can participate in the tenor and progress of American business via the stock market, if only in small and occasional amounts. That so many fail to do so, is more a psychological issue, than a pecuniary one.
Exactly.
I would add that Fidelity now has a whole lineup of very low cost mutual funds that have no minimum balance requirement:
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