Even when stock markets hit record highs, you might not feel rich. Surprising, right? The market’s booming, led by major tech firms and advancements in artificial intelligence, and your portfolio should technically be flourishing too. Yet, many still feel financially unfulfilled, and here’s why.
Inflation and underemployment are major culprits, making it increasingly tough for many to get ahead. The impact of globalization, soaring home prices, and a scarcity of well-paying jobs doesn’t help either.
Remember the global financial crisis? The stock market tanked, and my real estate investments did too. There was a silver lining though; less traffic and easier dinner reservations. It was a quieter time that allowed for some reflection, away from everyone boasting about their market gains.
Fast forward to today, and we’re near all-time highs again with the S&P 500, but the chatter about stock market genius is back too. Here’s a stark reality: wealth inequality is widening. Those who own stocks and real assets are getting richer, while others lag behind. Even though the majority of the population owns a minority of the stock wealth, this imbalance continues. If your household income is below $85,000, the chances are there’s little left to invest after covering basics like food and housing.
It’s a tough pill to swallow, but stock ownership rates haven’t changed much since 2007. The top 10% own over 80% of all stock market wealth. And while corporate earnings bolster the labor market, the benefits aren’t felt equally.
As for the stock market itself, it’s all numbers and no real utility. You can’t live in a stock portfolio or create memories with it. To truly feel wealthy from stocks, you’d need to liquidate some to enjoy the gains.
For those looking to diversify, consider investing in private growth companies, which are staying private longer and accruing more gains. Take for example, Fundrise’s venture capital product, focusing on sectors like AI and FinTech, where I’ve personally invested.
Managing your finances in such volatile times is crucial. Using platforms like Empower can help track and optimize your financial accounts all in one place, making it easier to see where you can cut costs and plan for retirement more effectively. This tool provides a comprehensive look at your finances, which is essential when navigating a market at record highs.
