Americans Now Need at Least $500k a Year to Enter Top 1%

Re:Americans Now Need at Least $500k a Year to Enter Top 1% by Noumenon72 on Wednesday October 16, 2019 @08:51PM (#21277880)

A retail investor in the stock market is playing an almost entirely zero-sum game. You're not supplying valuable information about which companies deserve capital. You're not providing scarce savings to stimulate investment. You're simply laying claim to the future earnings of society by bidding against others.

It's like buying a home in San Francisco -- it's not adding value that makes your wealth go up, it's the fact that other people want what you have and you got there first. And there's a healthy helping of government interference making sure that your stake is protected against outsiders.

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Re:Americans Now Need at Least $500k a Year to Enter Top 1% by gbronner on Wednesday October 16, 2019 @11:58PM (#21278791)

Actually... you are providing liquidity to the market.

Until recently, there was no easy way to transfer wealth intertemporally -- livestock died, grain spoiled, precious metals got stolen, land got invaded, etc.

The faith that people have in the stock market -- that they can buy something now and sell it in 50 years with very low frictional costs, allows the market to function, which ultimately lowers the cost of acquiring and deploying capital. This also ensures that capital is matched to risk tolerance, and that capital is deployed most effectively.

Imagine if each VC individually had to find a retail buyer for their shares.

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