Friday, March 08, 2013

Accessibility of stocks ignored leaving low income people out in the cold

In spite of all the bad news, US household wealth regains pre recession peak. Still, when I read between the lines, it's a bad deal for low income people. Home ownership and the stock market are the primary means for saving wealth.

Problem is, if one is too poor to afford home ownership (too low income to qualify for the mortgage or haven't inherited the money) one isn't saving hardly at all. Bank accounts have been the way lower income people have saved in the past, but interest rates are extremely low these days. In many parts of the country, the bottom rung for home ownership is quite high.

Ironically, lower income people can save small amounts in the stock market, but most don't. According to this article, it tends to be the very wealthy that buy stocks even though I would add that one can put small amounts of money into a stock market mutual fund for less than what it would take to make house payments.

Us Household Wealth Regains Pre Recession Peak.

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