Myth: Only Rich People Invest

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Myth: Only rich people invest.
Fact: WTF?!?! Do people really think this??

Myth: Only Rich People Invest

The scary truth is that many people do. “Investing” conjures images of rich fat guys wearing Armani suits, sipping fine brandy and smoking cigars while they sit at the country club, deciding which stocks to buy and sell.

AA readers know better, of course, but you’re the special few. We surround ourselves — online and in person — with like-minded people committed to growing and preserving wealth.

But don’t get complacent — PLENTY of people in this world fall prey to the myth that “investing” is something old rich people do.

The media spoons-feeds us images of miserly rich people who casually buy companies and count their coins while scoffing at the “ordinary people” who work hard. What a bunch of baloney.

Being rich is the result of, not the prerequite to, investing.

If you’re not savvy enough to recognize that this depiction of investors is nothing more than a cartoonish stereotype, you’ll set yourself up for a lot of financial stress and heartache.

Fortunately, you read financial blogs and books. Then you act on what you read. That’s what sets you apart.

Being rich is not a prerequisite to investing. Rich is the result of investing.

I have to thank one of my AA readers for busting through this myth recently.

“I used to think I wasn’t rich enough to invest,” she told me, “until I began reading your blog.”

Dude. EVERYONE is rich enough to invest. Got $20 bucks? You can buy one single share of a Schwab or Vanguard exchange-traded fund. You can make the trade commission-free.

“But that’s just one share!”

It starts with one.

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31 Responses to “Myth: Only Rich People Invest”

  1. Terry
    11. Jan, 2013 at 12:42 pm #

    HowTF many poor people invest?

    • Afford Anything
      12. Jan, 2013 at 8:31 pm #

      @Terry — If you have $20, you can buy a single share of a company through a DRIP program. Alternately, you can buy a single share of a commission-free exchange-traded fund. And I believe that ANYONE in the U.S. can come up with $20, even if it takes a few weeks, and even if it means giving up Coca-Cola or candy or beer, or working an extra few hours, or picking up a baby-sitting gig.

  2. Pauline
    11. Jan, 2013 at 1:26 pm #

    So many limiting beliefs. I used to invest $30 per month into an index fund. Bought my first property cash for $25K, ok that is a lot of money for some but not for people who rent for $600/month for years and complain they can’t afford to buy.

  3. Ross
    11. Jan, 2013 at 1:26 pm #

    This makes so much sense to me… now. I used to think, just like everybody else, that the markets were only for rich people. Now I know that they are just a tool to become wealthier, and anyone can do it. You just have to read a lot first.

    • Afford Anything
      12. Jan, 2013 at 8:28 pm #

      @Ross — Precisely! I’m glad you’ve learned this. Broad-market index funds (like a fund that tracks the S&P 500 Index) is a great place to start, if you’re not ready to buy individual stocks. I keep almost ALL my investments in index funds or in their cousin, exchange-traded funds.

      • Ross
        13. Jan, 2013 at 6:19 pm #

        Yea, once I read a few books regarding your chances investing in stocks, I decided to only invest in two index funds. Vanguard’s total stock market fund, and Vanguard’s total international stock market fund. I buy more when it’s down and less when it’s up. It’s not sexy, but it’s a proven path to wealth.

  4. TB at BlueCollarworkman
    11. Jan, 2013 at 2:21 pm #

    I think you do need some money to make money. WHen my wife and I had finally decided to open an IRA, we though $25 woudl be enough to open it up. Nope. $500 minimum. So we had to wait until we’d saved. So you DO need money to make money, but you don’t have to be rich, I agree. YOu just need to save up a little, and then you can get in!

  5. Ian
    11. Jan, 2013 at 2:30 pm #

    It’s another mindset situation. You just need to start somewhere. I have been getting a little more involved in p2p lending lately and so far have had good returns. The barrier to entry is also very low so folks who don’t make a lot of money (me) can get in there.

  6. Joel
    11. Jan, 2013 at 5:11 pm #

    I put my first deposit into my 401(k) today! Felt good. Trying to start early, I’m 22.

    • Afford Anything
      12. Jan, 2013 at 8:26 pm #

      Congratulations Joel! You rock!

    • Renee Fortin
      15. Jan, 2013 at 11:38 am #

      It is so nice to know that there are fellow young investors out there! For my 21st birthday I opened a Roth IRA. I was shunned for not going out to party but I will enjoy that decision later.

      • Elenor
        16. Aug, 2013 at 7:08 am #

        Go, you young folks go! I’m 57 — and like (nearly) ALL us old fogies, I SO wish I had started at 22! My dad used to say “just put aside $10 a week” … but like for most young folks, it never quite reached the top of my to-do list… and I sure regret that now!

  7. Amy Olles
    12. Jan, 2013 at 12:20 pm #

    YOur post got me thinking….this really is true – it’s by small steps that you get to where you’re going. Towards the end of investing small amounts of money, may I suggest this article to give people some how to knowledge? I am reviewing it too, I’d like to stash/invest a bit more in 2013 (note: I’m not a motley fool employee or associate in any way – just a gal who happens to like the fool’s articles and slant on things):

    • Afford Anything
      12. Jan, 2013 at 8:25 pm #

      @Amy — Thanks for the article! I laughed (in a good way) when I read its suggestion for investing $20: using DRIPs. I laughed because another reader and I were just having a conversation about this exact thing! DRIPs are a fantastic way to start investing small sums.

  8. Evan
    12. Jan, 2013 at 12:27 pm #

    I started with sharebuilder! $50 bucks a month going to buy a few fractional shares of some etfs…it was that damn simple! People who say that are either 1) uneducated (until they read your blog that is) or 2) have the poor me syndrome and will never understand

  9. Jane Savers @ The Money Puzzle
    12. Jan, 2013 at 7:00 pm #

    I am a lower income single mom and I invest in individual stocks. My portfolio is very small but investing some amount is the only way to start your small amounts growing. I will never be as rich as Scrooge McDuck.

    Many people at my work do not participate in the small matching contribution pension my employer offers. I only contribute up to the match every year (less than $1000 but better than nothing) but many coworkers choose to contribute nothing and miss out on the free money from our employer. I just don’t understand.

    • Afford Anything
      12. Jan, 2013 at 8:23 pm #

      @Jane Savers — It’s fantastic that you save enough to take your full company match! You work hard for that match — it’s part of the compensation you earned. It shocks me when people don’t take the full match. It’s the only guaranteed return-on-investment that anyone will ever get!

  10. Anne @ Unique Gifter
    14. Jan, 2013 at 9:17 am #

    Yes – this is related to another one of my pet peeves! People thinking the “evil shareholders” are responsible for things. Umm, what’s in your pension or your retirement account? You get upset when its value goes down? Oh wait, that makes you the “evil” shareholder!!
    Blah, blah, blah, a journey of a thousand miles starts with a single step.

  11. William @ Drop Dead Money
    14. Jan, 2013 at 9:19 am #

    Great article. Even Warren started small. It’s not the size of the start that matters, it’s the end. And there will be no end without a start. Just do it, start.

  12. Little House
    14. Jan, 2013 at 9:44 am #

    I realized this a couple of years ago through PF blogs and started investing in mutual funds. I’m so glad I started when I did or I’m not so sure I would have ever started!

    • Afford Anything
      16. Jan, 2013 at 12:23 pm #

      @Little House — Personal Finance blogs taught you this?! That’s AWESOME!! I love hearing that. I’m so glad to see how finance blogging changes people’s lives …. Just imagine how much better off you’ll be 10 years from now!

  13. Jules
    07. Feb, 2013 at 11:39 am #

    I so, so heart this post. It’s essential to start when you’re not “rich” in my opinion for one big reason: wealth creation is the result of habits. You have to start the saving/investing habit early on or lifestyle inflation will creep in and there will never come a time when you have “enough” to start. Start when there’s not “enough”.

    I try to treat giving the same way too. Make a habit of giving now, on whatever income you have. With every increase in income, I increase my giving because if I don’t, I’ll get out of the habit and then we’re back to lifestyle inflation.

  14. Jenny@Frugal Finances
    18. Feb, 2013 at 2:41 am #

    Investing is something everyone should do, the first way to invest is to only purchase assets and not liabilities. Poor people are those only who spend too much on liabilities.

  15. Thomas @ Finance Inspired
    06. Mar, 2013 at 12:27 pm #

    I don’t have much money but always try and save what little I have left over. If I invest I want to do it a chunk at a time, unfortunately I always have an emergency come up or something which then eats into my funds. I bought some shares once, lost over half their value before I pulled out.

  16. jaszman willingham
    31. Mar, 2013 at 3:22 pm #

    Ran across this review right after someone came to me with a investment idea..its a hard decision..HELP!

  17. Technary
    30. May, 2013 at 1:08 pm #

    I completely agree with you. Investing is important and no matter whatever be the amount.

    Every dollar counts in investment. The saving and smartly investing is very important. It was great that you proved that its a myth. Cheers! :-)

  18. Ryan
    06. Jan, 2015 at 6:50 pm #

    I can’t seem to start investing because I have to go through a company that requires minimum deposits of $10,000 or so. Why isn’t there a company that just lets me buy shares through pay pal or something? Something for the regular people! :)

    • Afford Anything
      06. Jan, 2015 at 8:25 pm #

      @Ryan — Don’t invest with sucky or difficult companies. Loyal3 lets you buy investments with a minimum of $10, the cost of a T-shirt at Target, and charges zero fees. Start there.

      Fidelity, Schwab and Vanguard also let you buy their own-branded ETFs with no commissions or fees, and the minimum is the cost of one share (currently $48 for one share of SCHB through Schwab, or $103 for one share of VTI through Vanguard).


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