this post was submitted on 12 Mar 2025
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You also need a ton of money to invest or you're just getting pocket change.
Commission fees are less than a buck. The rules don't change just because you have little money.
No, the problem is that 20% growth of $2000 gives you a gain of $400. 20% growth of $10,000 gives you a gain of $2000. An average Americans entire yearly income is $70,000, it's 20% growth is $14,000.
Edit: this is all in terms of a full year of investing.
But 20% isn't happening every year, you are more likely to average 10%. Some years can be single digit, some can be negative, the point is this, you must begin with a very large amount of money to get real money out of the stock market. Even solidly middle class incomes aren't going to be able to save up a years worth pay in only a few years, it would take many years, often enough to ensure the money will never be realized by anyone but by your children or grand children
Pocket change is better than no change.
I have nothing against people investing, it's just not accurate to think the average person can invest and get somewhere with it, back in the 70s or earlier Warren Buffett said you needed to have around $300,000 invested to make any kind of reasonable gain, adjusting for inflation $300k in 1970 dollars is $2.5 million. When you're below that threshold your not really getting returns you can do something with. It's fine to invest less, it's fine to invest aggressively even if you are poor, just don't look at people with less than $2.5mil like their dumb for not investing more. It doesn't work that way.