How do average people invest and why isn't everyone rich already?

[jafo]

You can become rich with AI for just £35 per month: Alchemist™ Trading Software - Alchemist

You and @wellington are providing so much reading material for me, so I hope that after reading this, I'll be able to understand at least 10% of what you both are talking about

Anyway, thank you both! I love to read more.

PS. In the meantime, on my path to getting wealthy, I'll continue to procure products (so my clients don't have to deal with "bait & switch"), inspect them, pack them, lift heavy boxes, and ship them to my clients overseas for 10% of the invoice - Let's just hope I don't do something stupid again, like cashing out my stocks prematurely to have enough liquid to take a dozen strippers to Bora Bora on a private jet for a month

 

[Dreamy]

There is no need to try to become smarter than others, you just need to help the smart ones. For example, companies such as caterpillar, honeywell, linde, etc. large industrial coglomerates. Yes, you will not earn x100,000 from your $100 deposit with them. But by regularly buying their shares in amounts of at least 2-5 thousand dollars a month, for the next 10 years, for example, reinvesting dividends, you will achieve decent capital, bringing you a good stable income. I don’t believe that such companies will disappear or go bankrupt, yes, some of them may have problems, but that’s what diversification is for. And IMHO this is better than an index where there are a bunch of all sorts of shitty dummy companies.

 

[jafo]

index where there are a bunch of all sorts of shitty dummy companies.

#Bingo! Reminds me of the movie The Big Short (and CDOs and synthetic CDOs)

 

[JohnnyDoe]

I'll continue to procure products (so my clients don't have to deal with "bait & switch"), inspect them, pack them, lift heavy boxes, and ship them to my clients overseas for 10% of the invoice

what kind of products?
Any chance you can procure teak furniture from Thailand? (Chiangmai)

 

[Don]

The majority of those who invest (read “gamble with”) their money eventually lose it, because they think they are smarter than the other millions of investors and can regularly make 100000%+. Of course they do so with the support of sophisticated mathematical models that are as good as horoscopes.

Here https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator you can calculate what a reasonable 8% annual compound interest rate can generate over time.

8% is absolutely solid in the investment realm, but its not really growing wealth when currency debasement is at around the same rate.

For someone spending in EUR:

For the last 10 years, the illustrative M3 money supply growth rates in the Eurozone have ranged between approximately 3.3% and 7.0%. The average growth rate of the M3 money supply during this 10-year period is approximately 5.86%.

Add around 2.5% average inflation, and you get that the real return of 8% is actually more or less breaking even.

Its more like preserving your wealth and accumulating savings, rather than growing your wealth.

 

[jafo]

what kind of products?

IT products available in Shenzhen & miscellaneous products available at Yiwu

Some clothing products/footwear and cosmetics available in Cambodia, Laos, Indonesia, Vietnam, Philippines, Malaysia, Japan, South Korea, Bangladesh, Thailand, and Sri Lanka.

Any chance you can procure teak furniture from Thailand? (Chiangmai)

Unfortunately not. Furniture is one of the few things my clients have never requested to be procured. I wouldn't even know where to start

PS. Which is weird, to be honest since I've known about Mrs. Rose Blumkin and Nebraska Furniture Mart since Berkshire Hathaway bought them, yet no one has ever even brought up the subject before

 

[bibing]

But by regularly buying their shares in amounts of at least 2-5 thousand dollars a month, for the next 10 years

This is like Monopoly money

 

[GPT]

Lack of financial literacy. People are not taught what money is and how it works. Neither at home nor in school.

The rich get richer in that sense because the do financially school their offspring.

Last but not least, too much focus on instant gratification. Thank social media for that.

Motivation is what gets you started.
Discipline is what keeps you going.

Compound interest formulas are nice, yet way too complicated for most people to understand. People that can recreate the concept of compound interest have a good start about working on acquiring wealth.

 

[jafo]

Lack of financial literacy. People are not taught what money is and how it works. Neither at home nor in school.

The rich get richer in that sense because the do financially school their offspring.

Last but not least, too much focus on instant gratification. Thank social media for that.

Motivation is what gets you started.
Discipline is what keeps you going.

Compound interest formulas are nice, yet way too complicated for most people to understand. People that can recreate the concept of compound interest have a good start about working on acquiring wealth.

100% this! Very well said!

 

[Oakgrove]

Lack of financial literacy. People are not taught what money is and how it works. Neither at home nor in school.

The rich get richer in that sense because the do financially school their offspring.

Last but not least, too much focus on instant gratification. Thank social media for that.

Motivation is what gets you started.
Discipline is what keeps you going.

Compound interest formulas are nice, yet way too complicated for most people to understand. People that can recreate the concept of compound interest have a good start about working on acquiring wealth.

I second this. You're spot-on with the rich get richer AND their offspring (assuming they don't turn into some useless shitheads) got a headstart with money invested since they were born (read: trust fund babies) - therefore giving them the gift of time (in market) that many of us wished our parents had done the same.

And 8% annually (if you start early) is not unexciting as people think. Read: Rule of 72.

In the US, at least what OP had posted was the whole point of sticking with 401(k), as most companies don't give you guaranteed pensions anymore, it's all completely up to you (if you want to retire rich or retire broke).