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> Europeans basically keep their savings in bank savings accounts. USA is not much different. The wealthiest 10% of the U.S. population holds the vast majority

by itake 10mo ago

> Europeans basically keep their savings in bank savings accounts. USA is not much different. The wealthiest 10% of the U.S. population holds the vast majority of stock market wealth. Recent data shows this group owns around 90-93% of all stocks, with the top 1% controlling about half of the total household equity. Many people hold cash in savings to prepare buying a house, paying for a child's college and more. IMHO, there is also less short-term need to invest your money as an adult. If you're happy with your job and don't need the extra money (or risk), then why invest in the stock market?

clickety_clack 10mo ago
That’s exactly the issue, there’s so many taxes and frictions that people don’t think it is worth it, and that’s one of the reasons why Europe is stagnating. Investment in business creates strong economies.
Kirby64 10mo ago
> If you're happy with your job and don't need the extra money (or risk), then why invest in the stock market? Because parking money in a savings account essentially erodes its value over time due to inflation. It’s safer, sure, but it’s a safe way to be guaranteed to lose money over time. Equity investing is essentially the only way for savings to outpace inflation.
- itake 10mo ago
  Not really? Inflation in europe is ~2.2%, which is about what HYSAs in europe offer. The value erosion isn't significant in the short term, especially if people spend most of what they earn. In your 20s and 30s, the time horizon for the cash is about 10-15 years (saving up to buy a house). In your 30s and 40s, maybe good time to have equity investments, but perhaps that extra cash just goes into the mortgage or college savings funds.
  - Kirby64 10mo ago
    If your money stays worth exactly the same in net present dollars, it’s effectively eroding in value compared to what you could be earning. 10-15 years is quite the long time horizon. You could easily be earning 7% real/10% actual in equity investing. Most recommendations I’ve seen discuss short term savings such as HYSAs for a house being more in the 5 year or sooner timeframe. Frankly, investing in equities in your 20s and 30s is easily the best time to do it. You let the compounding of growth happen over the decades, not so much later in life.
    - itake 10mo ago
      I get it... but im just explaining why people are doing what they do: choosing to hold cash over higher risk investments. Lack of education IMHO is a huge part. Crypto has way more education around how to invest than equities investment. If people are investing, many are choosing crypto. > Frankly, investing in equities in your 20s and 30s is easily the best time to do it. You let the compounding of growth happen over the decades, not so much later in life. I agree, but for many people in their 20s and 30s, there just isn't much cash left over to invest, especially in Europe with high taxes and mandatory social security funds and pensions.
      - Kirby64 10mo ago
        > Lack of education IMHO is a huge part. Crypto has way more education around how to invest than equities investment. If people are investing, many are choosing crypto. More education around investing in crypto? I think we must be exposed to some very different parts of the internet. Investing in boring index funds are very widely spread around these days. Might not be exciting, and I guess there isn’t really something to sell (unlike crypto), so perhaps that’s part of the reason.
        itake 10mo ago
        probably bias sources but: - https://finance.yahoo.com/news/almost-20-gen-z-investors-164205093.html?guccounter=1 https://finance.yahoo.com/news/almost-20-gen-z-investors-164... - https://www.gemini.com/blog/gemini-survey-finds-more-than-half-of-gen-z-owns-crypto https://www.gemini.com/blog/gemini-survey-finds-more-than-ha... At the end of the day, investing in an ETF for 10 years isn't going to move the needle much. but catching the right crypto wave will have a larger impact on their life.

by itake 10mo ago

clickety_clack 10mo ago

That’s exactly the issue, there’s so many taxes and frictions that people don’t think it is worth it, and that’s one of the reasons why Europe is stagnating. Investment in business creates strong economies.

Kirby64 10mo ago

> If you're happy with your job and don't need the extra money (or risk), then why invest in the stock market? Because parking money in a savings account essentially erodes its value over time due to inflation. It’s safer, sure, but it’s a safe way to be guaranteed to lose money over time. Equity investing is essentially the only way for savings to outpace inflation.

itake 10mo ago
Not really? Inflation in europe is ~2.2%, which is about what HYSAs in europe offer. The value erosion isn't significant in the short term, especially if people spend most of what they earn. In your 20s and 30s, the time horizon for the cash is about 10-15 years (saving up to buy a house). In your 30s and 40s, maybe good time to have equity investments, but perhaps that extra cash just goes into the mortgage or college savings funds.
- Kirby64 10mo ago
  If your money stays worth exactly the same in net present dollars, it’s effectively eroding in value compared to what you could be earning. 10-15 years is quite the long time horizon. You could easily be earning 7% real/10% actual in equity investing. Most recommendations I’ve seen discuss short term savings such as HYSAs for a house being more in the 5 year or sooner timeframe. Frankly, investing in equities in your 20s and 30s is easily the best time to do it. You let the compounding of growth happen over the decades, not so much later in life.
  - itake 10mo ago
    I get it... but im just explaining why people are doing what they do: choosing to hold cash over higher risk investments. Lack of education IMHO is a huge part. Crypto has way more education around how to invest than equities investment. If people are investing, many are choosing crypto. > Frankly, investing in equities in your 20s and 30s is easily the best time to do it. You let the compounding of growth happen over the decades, not so much later in life. I agree, but for many people in their 20s and 30s, there just isn't much cash left over to invest, especially in Europe with high taxes and mandatory social security funds and pensions.
    - Kirby64 10mo ago
      > Lack of education IMHO is a huge part. Crypto has way more education around how to invest than equities investment. If people are investing, many are choosing crypto. More education around investing in crypto? I think we must be exposed to some very different parts of the internet. Investing in boring index funds are very widely spread around these days. Might not be exciting, and I guess there isn’t really something to sell (unlike crypto), so perhaps that’s part of the reason.
      - itake 10mo ago
        probably bias sources but: - https://finance.yahoo.com/news/almost-20-gen-z-investors-164205093.html?guccounter=1 https://finance.yahoo.com/news/almost-20-gen-z-investors-164... - https://www.gemini.com/blog/gemini-survey-finds-more-than-half-of-gen-z-owns-crypto https://www.gemini.com/blog/gemini-survey-finds-more-than-ha... At the end of the day, investing in an ETF for 10 years isn't going to move the needle much. but catching the right crypto wave will have a larger impact on their life.