and all the bankruptcies and home foreclosures in an economic downturn shows the cost of high leveraged investing. A better way to achieve leverage is high beta stocks. Beta behaves just like leverage, except it automatically rebalances debt/equity on the way up and down. And the base rate of growth of the stock market is substantially higher, so you are leveraging a higher rate, even though you can't lever as much as a home.
and don't forget, owning a home and living in it as real estate prices rise means that you are "throwing away" higher and higher virtual rents that you would be entitled to collect and which factor into the value of your home.
Also, leverage: if you're borrowing money to make an unsecured investment in a scheme, disaster awaits.
The United States allows 'microfinancing' via kickstarter, where poor people are allowed to give money to new ventures without any expectation of return on the given capital. Meanwhile, the rich get the opportunity to invest for actual returns on capital. Do you think an accredited investor is going to give money on kickstarter when they could offer cash as an investment?
So why is giving money allowed, but spending the same money on acquiring shares not? The answer that 'some people got scammed' does not excuse the fact that people are still allowed to spend the same money today, without consumer protections, while not receiving any benefit. In other words, we have created yet another way to privatize the benefits of new ventures (by only allowing rich people to profit off of them) while socializing the costs (the people asked to contribute to new ventures without any ownership interests via microfinancing platforms). The response that this is for consumer protection is crap, and anyone not blinded by legal confirmation bias can see that
Maximal investment limits based on income are perhaps appropriate, but wholesale banning is morally reprehensible, and a direct contributor to income inequality.