Answer: If you want to make real money and not pennies, the stock market is your only option.
Real People Investing In Stocks
They are called mom and pop investors, retail investors, or individual investors. All those terms mean the same thing: people who buy and sell stocks on their own, usually through an online discount broker. These are the people that take investing into their own hands and actively try to manage their own portfolio in hopes that one day, it will be big enough to help them lead the type of lifestyle they want in retirement.
With interest rates being negligible for many years now, investing in the stock market is pretty much the only game in town. Putting your savings into any bank related vehicle or the government’s Treasury Bills is just spinning your wheels – you aren’t even keeping up with inflation. So stocks are really the only place to put your money if you want to have a chance at making decent returns.
The word “chance” seems to be the problem for most people who have come to distrust and/or ignore the stock market. Take a look at this graphic from BankRate.com:
Many of the under 40 year olds don’t have much to invest (you can’t save if you aren’t working) and if they do, they have come to distrust stocks. Why? Here are several reasons:
1) Occupy Wall Street gave the stock market a lot of negative press for many months. Its too bad that so many young people were watching and absorbing that crap.
2) The market dives of the early 2000’s and 2008 also play a role in the distrust as kids watched their parents lose money and sometimes their homes. It was a stressful time for many stock owners and kids during those years were paying attention. Many don’t want to go through that with their own money.
3) Stocks and Wall Street seem to get constant bad press from Liberals, Democrats, Socialists, and anyone who is anti-capitalism. Heck, even the Pope hates capitalism. Too bad those groups combined make up such a large percentage of reporters and of the country in general. Its the cool thing now to talk about wealth redistribution and complain about the rich getting richer.
Start Young And Invest During Your Whole Life
It confuses me to no end that people waste time being envious of other people or groups when they could be spending time trying to join those groups. In other words, if you think stocks are only for the rich (and you’d like to be rich), the smart thing to do is to start saving money and invest in stocks yourself. If it works for them, it will work for you too.
All you need to do is educate yourself and start buying stocks when you feel confident. Start investing young (preferably in your 20’s), have a long time horizon, don’t panic and sell at the drop of a hat, and chances are that you will make money. It is precisely the people in their 20’s and 30’s who SHOULD be buying stocks and those are the ones who are now afraid and holding back. In the end, they are hurting themselves.
So, if you are asking where you can invest your money if you don’t like stocks, the answer is that there are a lot of places but your return will likely be very little if you don’t want risk. Until interest rates rise, your money won’t be “working” for you. Please reconsider and at least take a look at stocks with your long term money. Put aside an preconceived notions and learn about the market and the way it works. It is your best chance right now to beat inflation and grow that nest egg.