Is it low though? You read all the time that your average American barely has any money set aside for retirement or that they often need to leverage credit cards for emergencies. Even those that can put money aside, how feasible is it for them to max out a 401K? The barrier to entry into the stock market is incredibly high when you've only got at best $25 at the end of the month in your pocket.
Exactly, I would even say the situation is so bleak for some Americans (and even people all around the world) that they might as well enjoy themselves in the short term, especially when they're young, while they can, as opposed to risking it on the uncertain future.
Edit: Also, as the tax base gets smaller, I can see some of the tax advantaged accounts people have money in become not so tax advantaged. The money to replay all this debt (including infrastructure, environmental, and policy debt) has to come from somewhere, and I'd bet it's both from inflation and savings. Or someone hits the reset button with a revolution or war.
> You read all the time that your average American barely has any money set aside for retirement
That's not because there is a high bar to investing, it's that most people are financially undisciplined. I see it all the time, people get a bonus and the very first thing they do is go buy a new car. Literally one of the worst things you can spend money on is a car, and a new one makes it even worse. Many people carry CC debt, which is absolutely crazy. Keep in mind I'm not talking about people who are struggling just to put food on the table, but people who should be able to save, but instead do really stupid things with their money.
1. People who are using Robinhood for trading stocks are probably people with stable jobs and disposable income, not people who are struggling to get by. If you have enough extra money to trade stocks, you probably have enough to max out your 401-K.
2. If you only have $25 left at the end of the month, you shouldn't be investing in stocks at all. You should be putting your $25 in a savings account for emergency expenses.
The barrier is already pretty low:
- Max out your 401-K (and collect your company match, if any).
- Invest in low-cost index funds from Vanguard.
- Pay off your credit card debt, if any (since you probably won't make 20+% a year on your other investments).
- Don't buy lots of stuff you don't need.
On average, you'll get much better results this way than by trading stocks.