Transcriber: Gia Hwang Reviewer: David DeRuwe
I want you to think back to when you were a kid at school.
Now, that might be tougher for some of you than others,
but just try to remember.
Now, remember the school lunches?
I don’t know about you,
but in my school, the best lunch day was pizza day.
Now, think about a class of 100 kids rushing to get in line,
but when lunch gets served, imagine this:
one student getting an entire pizza for themselves,
and the other 99 kids sharing one pizza.
Yes, one pizza cut into 99 slices.
How do you think you'd feel about that?
When we put it in those terms, I think we’d all find it very upsetting.
It’s not something that any of us would accept,
but we accept these circumstances every day
because just like the kids in that class,
true economic and financial opportunity is open to only a select few,
and it excludes the vast majority.
What if I told you
that 1% of American households controlled over 50% of the stock market?
Think about that for a second.
That’s basically just the households
in the city of L.A. owning half the country’s wealth,
and that inequity gets even worse for women and people of color.
A survey by S&P Global found that only 26% of American women
have invested in the stock market,
and only 33% of black households owned stock in 2019,
compared to nearly 61% for white households.
Meanwhile, inflation eats away at the money we’ve already made.
Whether that inflation is 2% or 10%,
it’s still an ongoing penalty
when we have not made investments that rise with it.
So why is that so bad?
In today’s world,
having investments is the number one way
and maybe the only way for each of us
to ensure a secure future for us and our families.
And yet, that’s a solution that seems to be denied to the vast majority of us.
The economic divide has created a rift in our country -
the haves are advantaged to have more
and the have-nots, those with lower socio-economic power and status,
are trapped in a cycle of having less.
Prosperity, financial security, wealth -
it’s within the reach of some and not within the reach of others,
and this imbalance is big enough to bring the world
into an increasingly precarious situation,
directly as you’ve seen through Occupy Wall Street
and the brigading of big banks by internet investors
and as a root issue within recent powerful social movements like Black Lives Matter.
How has it become so extreme?
Let me tell you another story,
my own story.
My father came to United States with $40 in his pocket.
He got married, had kids, raised a family.
My mom and dad were pumping gas and waiting tables,
always with the feeling that success and opportunity were possible -
a sense of hope.
So he struggled, saved, and built prosperity;
he earned a generation of wealth.
He is a model of the American dream.
But that opportunity he worked so hard to realize -
I don’t believe that opportunity exists today.
I worry that the American dream has become a myth.
The American ethic “to work hard maybe for a lifetime, in exchange
for financial security and the opportunity to better one’s own condition”
just isn't enough anymore.
We encourage the values of hard work and dedication and perseverance
to make it in America,
but the economic realities of today, in fact,
make it nearly impossible to succeed
without having some kind of economic head start,
and what isn’t considered often enough is that this is a generational issue.
The conditions that we’re born into
clearly set us up for future advantage or disadvantage -
we reward the rich and we penalize the poor.
This is clearly shown by the construct of the traditional banking system.
If you look at how banks make money,
they profit from the wealthy by having their capital
and using that money to make more money,
and they profit from those at the bottom of the financial pyramid
with fees and penalties.
And ultimately, this hurts everybody.
It's about more than being denied wealth.
Financial instability is rampant and impacts every part of our lives.
According to the Federal Reserve,
40% of Americans cannot afford a financial hardship over $400.
People will sacrifice their relationships, their sleep, their happiness
and even their own health, all in search of financial stability.
In fact, 25% of Americans skipped necessary medical care
because they simply could not afford it.
And we've seen the growth of the side hustle,
but the side hustle has gone from a way to make a little extra money
to being a necessity just for financial survival.
Beyond just being teachers, waiters, even nurses,
apparently we also have to be chauffeurs, food delivery people and IKEA technicians.
I can count on two hands the number of people
who can support themselves based on their primary jobs alone,
and fewer still who can actually afford to retire.
We’re working harder than ever to better our financial condition
while overlooking our most powerful tool -
we see so few people investing.
In fact, almost 85% of American households don’t directly invest in the stock market.
This is a legacy problem that spans and impacts generations.
Why aren’t we all taking that important step towards financial prosperity?
What’s the barrier keeping everybody from investing?
My day job is creating products and services
that help people begin the journey of investing.
And part of that job
is to understand why the people who should invest don’t invest.
Let me tell you the common reasons people have for not investing:
Number one, we don’t have enough information,
but we’ve never had more information available to us than right now.
Pretty much the entirety of financial history and real time information
is available to us in our pockets,
and yet we feel like we don’t know enough even to begin.
Number two, we feel like we don’t have enough time,
but the average adult watches over four hours of TV a day,
and this is pre-pandemic TV watching,
and don’t even get me started on Facebook, Instagram, TikTok, Fortnite.
The truth is that there are dozens of fintech apps,
just a finger swipe away where you can get started
with almost any financial endeavor in just a few minutes.
Yet, we don’t.
Number three, we feel like we don’t have enough money.
This might be the biggest concern we hear about from new investors,
and that’s the hardest to overcome.
And much of it stems
from the misunderstanding of the fundamental difference
between having money and building wealth.
It can seem like the same thing,
but that’s hardly the case.
Let me give you a couple of examples.
According to the National Endowment for Financial Education,
about 70% of lottery winners will go bankrupt.
And according to Sports Illustrated, 78% of NFL players will go bankrupt,
and the same holds true for 60% of NBA players.
And just so you know that it isn’t just an American problem,
60% of English Premier League players will also go bankrupt.
Most people think that having a lot of money is the key to wealth,
and sure, that’s definitely a great starting point.
But when we see
that there’s a higher likelihood of going bankrupt by going to the NBA
than simply going to college or working at In-N-Out Burger,
it’s a sobering lesson.
Sometimes having a lot of money just means having a lot more to lose.
So, these problems, these perceived obstacles to investing,
they can all be overcome.
Do you have a phone?
Do you have a job?
Do you have a couple of minutes?
It's as simple as that.
So it turns out that those reasons - they’re not the real problem at all.
The barrier is actually ourselves.
And isn’t that the same as everything we want to accomplish?
Whether it’s losing weight, learning a new language,
going into a new social situation, that first step is the hardest part.
And for all of us, the reasons are pretty much the same:
What if I fail?
What if I look stupid?
What’s going to happen if I do this?
Can I do this at all?
Do I know enough?
How do I even get started?
And that fear is even worse when it comes to finance,
with all the insider lingo, complex charts and graphs,
and the Hollywood scenes of traders screaming on the stock exchange floor.
It just seems nuts.
So finances creates insecurity.
If you're one of the vast majority who don't actively invest,
you might feel a sense of shame for not having your act together.
It can feel like you’re the only person who doesn’t know these things,
but we don’t even like to talk about it.
Money, like religion, is one of those topics spared from polite company.
We might talk about the enviable things in our life that cost money -
a house, a car, a tropical vacation -
you know, the stuff that we can point at and show off on Facebook,
but when the subject of money comes up, people go silent.
According to research,
do you know what people would rather talk about than money?
Politics, religion, their weight, even their own death.
One study found
that 54% of adults would rather talk to their kids about sex
than their parents about money.
So, how do we fix that?
One way is to start talking about it before those fears even begin
and to dispel the mystery around investing once and for all.
Our schools teach so much.
We learn about quantum mechanics,
the poets, art history, all important things,
but we’ve done a terrible job teaching even the basics of money and finances,
subjects that will have a far more lasting impact on them.
Financial education should be a mainstay of our curriculum.
Some states are getting this started,
but every kid should know the importance of establishing
even a basic understanding of the investing tools
that can build their wealth.
Fortunately, there’s a new wave of interest in doing just that -
a surge of organizations
that have dedicated themselves to teaching the fundamentals of investing to kids.
Several of these specifically address those communities in need,
those communities that have felt
the generational impacts of being excluded from financial empowerment.
There’s SUMA Wealth that helps the young Latinx community
accelerate their financial recovery and success.
There’s CoolKids that reaches thousands of underprivileged kids
with financial literacy and investing experience.
And this first generation of investors
which teaches high school students in underserved communities
the power of investing
and provides students with the real money they need to start investing.
And the newly launched Stockpile Foundation,
which I’m a proud part of,
that provides schools, charities and other organizations
with the tools and resources to build essential financial literacy.
These groups touch thousands of young people
and are helping build a new precedent for our future of financial inclusion.
I'm inspired by these efforts.
They give me hope that one day
we’ll make financial education and action more mainstream
and see the 99% take advantage of the universal opportunity to invest,
so we can all secure a better financial future.
We don't have to wait for some unknown future to make a change in our own lives.
We can all act now.
There was once a runner that said:
“The hardest part of every morning run is the trip from the bed to the floor.”
So in fact, our victory comes when we simply begin,
and this is especially true for investing
because every moment we delay, we face the penalty of inflation.
The starting line moves further away every day we don’t take action.
For example, if you invest a dollar a day from birth until you're 18
and never invest in another penny,
you would potentially retire with over $400,000.
Now, if you invested a dollar a day starting at 30,
you would have around $40,000.
But what’s important isn’t to regret the lost opportunity,
because even though the best time to start investing was 20 years ago,
the second best time to start investing is today.
Starting - it’s a simple action
that will benefit not just the next six minutes or 60 minutes,
but the next six years or 60 years.
So what can you do right now?
How could you start?
You can start by making a commitment.
Simply take out a dollar and write on that dollar “invest.”
Make that dollar be your beginning.
Make the commitment right now
and go choose an investing app, any investing app,
and commit that dollar into your investing account.
You will now be an investor with all the excitement,
pride, and privileges of owning part of a company.
Whether rich or poor, privileged or disadvantaged,
we all have the choice to start.
An elite class
has taken ownership of the vast majority of investing opportunity,
but now we, the people, can lay our own claim,
and when you do, or if you already have,
make sure to help others begin - your family, your friends, your community.
Bring a positive impact to the lives of those around you
and change their futures for the better.
Thank you.