Some ideas for the US investor.

Invest the money with a payday lender to loan it out to your under-paid employees so you can grab even more of their paycheck!

Buy a block of housing that houses your under-paid employees and raise rents so you can get even more of their paycheck!

Invest in sub-prime auto loans so that your underpaid employees can get to work. Make money on them while the commute! Of course make sure that you diversify if you need to lay them off!

Invest is short term unsecured credit card debt of your under-paid employees. To goose the returns put them on a high deductible health plan and leverage what you lend to them with their own health account savings (free money). If you are generous give them a 401K match (which is required by law if you have the same) and leverage up using that money too!

Many of your underpaid employees will be on food stamps and located in areas without those fancy suburban grocery stores. Invest a quicky-mart and rake in the food stamp money at high margins! Don’t forget the liquor and lotto tickets as income boosters! If you underpaid employees can’t numb at least you can sell them a bit of hope!

Lastly have you thought about the medical field? A lot of your under paid employees are on Medicaid and I’m hearing good things about insulin!

The return of the company store ...

...return?

Walmart, Amazon.

I don't support trickle down economics, but it's not the case that money in banks is just sitting around in a vault. The banks actually do stuff with the money. For example it's loaned out to real world businesses.

No it's not - banks are statistical multiplexers.

They don't take money and lend it out. They create money, lend that, and then remove that money as the capital (loan amount) is repaid - or when the loan goes into default.

> The banks actually do stuff with the money. For example it's loaned out to real world businesses.

Traditional loan business is not the core business of banks any more, at least not where the big profits come from.

Hypothetically here you would invest the 500k which is putting money into the economy.

Your right that socially its better for society for a lower paid person to have the $ how ever certainly in the UK some of that increase would get clawed back by reduction in benefits.

How does buying $500k worth of stock ("investing the money") stimulate the economy? Haven't I just purchased a paper asset from the seller? I guess you could argue that the seller who liquidated their position is now free to spend that cash on something productive.

That’s the argument for buybacks and dividends. If companies don’t have any NPV positive projects to take then the cash must go out to shareholders who do.

Aside from the fact that companies need investors there is also the question of investing in IPO's etc.

As far as investments, I'm no economist, but I'm skeptical that the money spent purchasing securities has an equal impact as someone buying goods and services locally. It seems like a disproportionate amount would go right back to other members of the investor class, who are going to use it on other securities, or else high-margin luxury items, and very little of that is actually going to escape that bubble.

I think you could argue that replacing benefits with direct income is still a "win" for society. If they're able, it's more efficient for people to meet their own needs than to be provided for through a bureaucratic process with lots of administrative overhead.

Nobody puts that money in a bank. They invest it in a mutual fund or similar, so it ends up funding businesses and their employees.

Investing in a mutual fund only directly funds other shareholders