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Comment by jjeaff | Hacker News Reader

Just spitballing here, but I'm thinking the bottom 90% doesn't own much stock due to lack of funds. Not because they don't know how or because transaction fees are too high.

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"The poorest third of households buy half of all lotto tickets, according to a Duke University study in the 1980s, in part because lotteries are advertised most aggressively in poorer neighborhoods."

https://www.theatlantic.com/business/archive/2015/05/lotteri...

[EDIT] It's not an insignificant amount either: half of $70 billion. From the same article:

"According to the North American Association of State and Provincial Lotteries, lotteries took in $70.1 billion in sales in the 2014 fiscal year. That’s more than Americans in all 50 states spent on sports tickets, books, video games, movie tickets, and recorded music sales."

I bet they have televisions too, the sheer audacity

What? The point is that lack of funds for investing is clearly not the problem if they're buying so many lotto tickets.

And they have televisions too, other money they spend that they could have spent on investing.

True. Nobody said they had to give up TVs though.

What is the volume on lotto tickets vs the stock market. Are you really telling me that someone who spends $2 per week (or whatever your lotto price is) on lotto tickets could afford to create a balanced stock portfolio or even buy one stock? Buy ETFs? The buy in price for SPY is US$329. By the time you saved up enough $2/week to buy one unit of that stock it's already too expensive.

Robinhood lets you buy for $1 so yes you can start by investing that little. And $2/week from age 18 to 65 will give you $100k by just following the S&P.

If you can buy lotto tickets then you can invest, and if you're buying lotto tickets then you're probably wasting other money too.

Please tell me what extrapolation you are basing this on? Even if you dump all the money into SP500 today and backtest that I can't get close to your figures unless I backtest against the recent bull market only.

Average annualized return rate for S&P is about 10%.

$8/month x 47 years @ 10% = 100k roughly.

Try this: https://www.daveramsey.com/smartvestor/investment-calculator

You can start investing in stocks for as little as $1. Lack of funds is not the problem.

If I only have $2, why would I put $1 in stocks when I could put all $2 in food?

You can always find an excuse to not invest.

I'm saying that when you are on the edge of being able to feed yourself, investing in anything other than being able to eat is the wrong call. I have actually been in that position.

It also seems kind of silly to play with $1 in the stock market; I'm going to make like 8 cents in a year on average with a high variance, while if I bought food I would be able to work using those calories and maybe earn $8 in the time it took to burn those calories.

Ah, the bottom 90% of Americans, ever on the edge of being able to feed themselves.

It's pretty clear that we're discussing the far greater majority that actually can feed themselves and have money left over to invest.

Also people go through different stages in life, as you claimed in your comment. You might have been too poor before but I assume you can invest now right?

My iphone is 4 years old now. I've saved a ton of money not buying the latest every year, money I invest.

The freeways around here are gridlocked every day with people driving nice cars to work. Nicer cars than is really necessary. They could buy a cheaper can and invest a lot more than a dollar.

My daily driver is 30+ years old. It's probably worth about $500. Repairs, taxes, and insurance on it is cheap, too. For one thing, since the car is pretty much worthless, there's no point in spending money on comprehensive insurance.

But I turn the key and it goes. Except for today, when the battery cable corroded to the point of not passing enough current. I ordered a new cable from Amazon for $10, and will install it tomorrow. It'll probably take about 10 minutes. Did I say it was cheap to repair?

People making $180k a year lack funds to buy stocks? Yeah, that’s a no from me.

>> I'm thinking the bottom 90% doesn't own much stock due to lack of funds. Not because they don't know how or because transaction fees are too high.

> People making $180k a year lack funds to buy stocks? Yeah, that’s a no from me.

An individual person making $180K a year is in the 92nd percentile. Parent is talking about the other roughly 300 million people.

GP is talking about the 90th percentile. If you want to quibble about exactly where that line is, whatever, but it's not the point. It's very clear that the percentage of people who can afford to invest is broader than the top decile.

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