Congratulations, you’re a rounding error.

million

Most staffers peek at WinQuote a few times a day. I mean, if you have 10,000 shares (and tons of staff members have way more) and the stock goes up a buck, you’ve just made ten grand! But then, if it goes down two dollars, you’ve just lost twenty grand. It’s a real psychic yo-yo. Last April Fool’s Day, someone fluctuated the price up and down by fifty dollars and half the staff had coronaries.
[…]
The stock closed up $1.75 on Friday. Bill has 78,000,000 shares, so that means he’s now $136.5 million richer. I have almost no stock, and this means I am a loser.
-Microserfs, Douglas Coupland

I browse over on Reddit & one of the subs I subscribe to is PersonalFinanceCanada. It has a lot of generally useful advice on money matters by people who know more than me about the subject, but it focuses a lot on investments. They advocate something called the Couch Potato model, which I gather is the bare minimum of effort people should put towards their investment portfolio. Now, I have some RRSPs & GICs; not all my money is just sitting in a bank vegetating, but I’m really not on board with the idea of investing in the stock market. I get that some people really do well with it, but it takes a considerable amount of effort, knowledge and skill to do it right. I have a full time job and enough hobbies to take up my time.

‘But it’s your money’ I hear you say. Well, trying not to come off as ‘it was good enough for my grandpappy’, people managed to get by fine without investing in the stock market for years. The quote at the beginning of this post, from Microserfs, has always stuck with me as perfectly illustrating the situation. The big winners in the stock market are the billionaires. Everyone else is chaff and rounding errors.

I believe the reason that investing is promoted as absolutely necessary, is so that everyone, even Joe Lunchbucket with one RRSP, actively cares about how the market performs. If you care about how the market performs, you are likely to vote more conservatively, so that things are better for large businesses in which you have invested. In my opinion, this is why ordinary people have been coerced (and there is no other word for it) into investing in stock portfolios. To not do so is made to appear foolish and short-sighted. You are chided for not caring about your money. Once people have their savings, however meagre, tied up in ‘the market’ they care about how ‘the market’ performs, with visions of their retirements going down the toilet. During the 2008 market collapse, many did, in fact, lose their retirement savings, money which would not have been lost if they’d just kept it in bank accounts. Billionaires probably didn’t even feel it.

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