6 ms·

I mean, if 0.1% of your savings is in the market, you're "participating" in some sense, but not with any real impact. My sense is that, for the great majority o

I mean, if 0.1% of your savings is in the market, you're "participating" in some sense, but not with any real impact. My sense is that, for the great majority of people in the United States, the stock market's value doubling would mean little for their financial health. Having a retirement fund that goes from $10,000 to $20,000 (or even $100,000 to $200,000) has a relatively small impact on the prospect of retiring [1]. [1] Depends on circumstance, but people are generally supposed to have at least $1,000,000 in savings by 67. https://www.nerdwallet.com/investing/retirement-calculator https://www.nerdwallet.com/investing/retirement-calculator

WalterBright 6y ago
> if 0.1% of your savings is in the market That means you chose not to participate in the market, not that you were prevented. In which case I can't accept grousing about not getting the gains from investing in the market. > retirement-calculator Use it. It'll show how much you need to invest monthly to retire a millionaire. Your money will do a lot better than double.
- callalex 6y ago
  >That means you _chose_ not to participate in the market You can’t invest money you don’t have.
  - WalterBright 6y ago
    May I suggest examining "if 0.1% of your savings is in the market" again? Like what happened with the other 99.9% of your savings?
    - justin66 6y ago
      Without sperging out about the specific percentage: a situation where people have a tiny amount saved for retirement, and almost all their net worth in a house and car, is actually quite common.
      - WalterBright 6y ago
        Spending on a car is not an investment. It's no joke that a new car loses 30% of its value when you drive it off the lot. Essentially all cars lose value constantly, and that's not even counting the finance costs.
        justin66 6y ago
        I couldn't agree more. Just trying to explain the situation of someone's pension accounting for such a small portion of their net worth. It's sadly common.
    - aeturnum 6y ago
      Asking about the other 99.9% is a good point! Mostly I was pointing out how meaningless the idea of "participating" is for evaluating the material impact of the market on an individuals' financial wellbeing. We can go back and forth about how theoretical people could invest theoretical savings, but unless you have another source, it seems like the reality we live in is one where 90% of the country share 16% of the stock market. Whether that 90% have low savings (all of which are in the market) or better savings (little of which is in the market) - either way their financial health doesn't seem very tied to the market.
      - WalterBright 6y ago
        The people who do invest in the market are providing the money that drives jobs and economic growth. You can't separate the two.
        aeturnum 6y ago
        Why can't you? The vast majority of businesses are privately held[1]. Those businesses hire most of the people and buy most of the goods. Even for companies that are listed on the markets, the majority of their financial assets come from doing business. It's true that companies raise money on the public markets to expand and thus hire more people, but the idea that most economic activity happens there is false. [1] https://www.forbes.com/sites/sageworks/2012/10/01/private-companies-pull-economy-along/#258378612723 https://www.forbes.com/sites/sageworks/2012/10/01/private-co...
        WalterBright 6y ago
        Big business doesn't work without a stock market, and big business is the engine that drives an economy. Small businesses are the future big businesses. Both are needed for an efficient, productive economy. Various times countries have tried to prevent big business from operating, and always gave it up after a while.
chii 6y ago
> you're "participating" in some sense, but not with any real impact just like voting has no real "impact" right? Participating has an impact. The impact may not be as big as you'd want, but it's there. and it's better than not participating.
- aeturnum 6y ago
  I agree that participating is always better than not, but I think you're making an inappropriate comparison. The question I was trying to talk about is the connection of the market to the wealth of most americans. I'm saying that it's fully possible for everyone to "participate" in the market without significantly benefiting from it (though, as you say, it's better than nothing). If the market were to double in value, mostly wealthy people would get wealthier and, I think, few middle and working class people would have their lives changed significantly. The reason I don't think the voting metaphor holds up is that everyone who's elected does so by "getting" the most votes. Obviously there are forces at work here (turnout, voter suppression, get out the vote efforts, etc), but there's no official alternative way to be elected. The voting comparison would make sense if the stock market was the only possible way to gain money - in which case I would agree! But it's not. There are lots of other ways we can ensure people gain wealth.

WalterBright 6y ago

> if 0.1% of your savings is in the market That means you chose not to participate in the market, not that you were prevented. In which case I can't accept grousing about not getting the gains from investing in the market. > retirement-calculator Use it. It'll show how much you need to invest monthly to retire a millionaire. Your money will do a lot better than double.

callalex 6y ago
>That means you _chose_ not to participate in the market You can’t invest money you don’t have.
- WalterBright 6y ago
  May I suggest examining "if 0.1% of your savings is in the market" again? Like what happened with the other 99.9% of your savings?
  - justin66 6y ago
    Without sperging out about the specific percentage: a situation where people have a tiny amount saved for retirement, and almost all their net worth in a house and car, is actually quite common.
    - WalterBright 6y ago
      Spending on a car is not an investment. It's no joke that a new car loses 30% of its value when you drive it off the lot. Essentially all cars lose value constantly, and that's not even counting the finance costs.
      - justin66 6y ago
        I couldn't agree more. Just trying to explain the situation of someone's pension accounting for such a small portion of their net worth. It's sadly common.
  - aeturnum 6y ago
    Asking about the other 99.9% is a good point! Mostly I was pointing out how meaningless the idea of "participating" is for evaluating the material impact of the market on an individuals' financial wellbeing. We can go back and forth about how theoretical people could invest theoretical savings, but unless you have another source, it seems like the reality we live in is one where 90% of the country share 16% of the stock market. Whether that 90% have low savings (all of which are in the market) or better savings (little of which is in the market) - either way their financial health doesn't seem very tied to the market.
    - WalterBright 6y ago
      The people who do invest in the market are providing the money that drives jobs and economic growth. You can't separate the two.
      - aeturnum 6y ago
        Why can't you? The vast majority of businesses are privately held[1]. Those businesses hire most of the people and buy most of the goods. Even for companies that are listed on the markets, the majority of their financial assets come from doing business. It's true that companies raise money on the public markets to expand and thus hire more people, but the idea that most economic activity happens there is false. [1] https://www.forbes.com/sites/sageworks/2012/10/01/private-companies-pull-economy-along/#258378612723 https://www.forbes.com/sites/sageworks/2012/10/01/private-co...
        WalterBright 6y ago
        Big business doesn't work without a stock market, and big business is the engine that drives an economy. Small businesses are the future big businesses. Both are needed for an efficient, productive economy. Various times countries have tried to prevent big business from operating, and always gave it up after a while.

chii 6y ago

> you're "participating" in some sense, but not with any real impact just like voting has no real "impact" right? Participating has an impact. The impact may not be as big as you'd want, but it's there. and it's better than not participating.

aeturnum 6y ago
I agree that participating is always better than not, but I think you're making an inappropriate comparison. The question I was trying to talk about is the connection of the market to the wealth of most americans. I'm saying that it's fully possible for everyone to "participate" in the market without significantly benefiting from it (though, as you say, it's better than nothing). If the market were to double in value, mostly wealthy people would get wealthier and, I think, few middle and working class people would have their lives changed significantly. The reason I don't think the voting metaphor holds up is that everyone who's elected does so by "getting" the most votes. Obviously there are forces at work here (turnout, voter suppression, get out the vote efforts, etc), but there's no official alternative way to be elected. The voting comparison would make sense if the stock market was the only possible way to gain money - in which case I would agree! But it's not. There are lots of other ways we can ensure people gain wealth.