Financial Adulting

CHAPTER 8Become an Investor for Good

We've covered retirement; now it's time to talk about investing for everything else. We can also choose to invest our money in ways that (mostly) aren't harmful and can even support the values we believe in.

Investing is an important part of being a financial adult because remember our friend, compound interest? It enables our money to grow exponentially. That can provide freedom in our choices and help us reach our goals. Not to mention, we won't miss out on thousands, tens of thousands, or even millions of dollars over the course of our lifetime.

Only half the people¹ in the United States invest, and women tend to invest 40% less than men, on average.² These numbers are even lower for communities of color. In 2019 only 34% of Black people and 24% of Latinos owned stocks, compared with 61% of white people.³

The Opportunity to Invest Is a Privilege

The problem is manyfold. It's not just that the stock market has been inaccessible for women and communities of color for centuries (although that's a big part of it). In order to invest, you need to have funds to invest. When 54% of the country is living paycheck to paycheck and 40% have less than $400 saved, investing is not something that's reasonable or feasible for most.⁴ When Black and Latino families have eight times and five times, respectively, less net worth than white families,⁵ that has a tremendous impact on their ability to invest. Having the opportunity to invest is a privilege. ...