Losers In The Game

Immediate setup for failure

Another weekend marks the end of another full week of misinformation recirculated through convenient medias like Twitter, Facebook, and CNN.  This morning, I was perusing Facebook, and I encountered rather troubling propaganda from the anti-rich contingent. It mimicked the game of monopoly, farcely excusing the 99% for losing the game immediately, topped with a sarcastic conclusion that they're lazy.

The biggest problems are two-fold.  One, the propaganda invites and encourages The Simpsons "can't win; don't try" mentality.  People may not understand the basics of personal finance, so when they have an excess of their greatest asset, they do not hedge it against monetary assets, specifically time.  Maybe the wealth of youth is wasted on the young, or maybe I got lucky that I understood it correctly when elders briefed me on the concept years ago.

Little amounts now can grow over time in two ways. First, the accumulation of those unnoticeable pennies eventually fill a jar and create a substantial sum out of nothing (figuratively speaking, but almost literally). Likewise, small, unnoticeable amounts out of each paycheck build up and eventually create a financial cushion for emergency protection. Second, invested assets are not doing nothing. That money is put to work and it similarly earns its own paycheck, creating two paychecks: income that you earn on the job and dividends that your money earns for you.

My mother taught us the financial philosophy that "you can either work hard or let your money work hard for you." For her, that was an unloaded, non-judgmental notion since her two kids each took a different direction. My sister wanted luxuries; she knew she had to work for it. On the other hand, I opted to go without extravagance in favor of a more simplistic lifestyle. "A penny saved is a penny earned" was my mentality, and I filled the metaphoric jars. For the record, my mother's philosophy had one flaw in that those options are not as mutually exclusive as they sounded. I'm confident that my sister's money is working for her as sure as I have my own work ethic.

The second problem with the monopoly graph is the implication that personal finance is a game, dividing players into a winner and losers. That's an absolute loser mentality. There is no need to view money in terms of a game, or in terms of winners and losers and financial success is not lessened by others' wealth. There is no need to gauge personal wealth by other portfolios. "Keeping up with the Joneses" exists, but their excess or deficiencies have no direct effect on other's personal wealth. When I saw the graph on Facebook, I commented that the game would not be over until someone quit. The sarcastic conclusion that the "losers" are lazy is missing the point that they are actually justifying their decision to quit.

Another problem with the whole graph is that Monopoly is a skillful game of entrepreneurship. The "lazy" judgments are typically applied to people expecting hand-outs and freebies to get by.

I had to laugh this week reading through comments by CNN trolls and how often they unwittingly call me rich. Making statements that the "rich were the only ones who gained from the 2008 stock market decline" qualifies me as rich. Maybe some of my Facebook friends would think I'm rich, too. The difference is that my actions don't prevent them from doing the same.

CNNFN: Over Half of Americans Have No Stocks

Over half of Americans have $0 in stocks

By Heather Long

More American adults drink coffee daily than have money invested in the stock market.

Less than half, or 48%, of American adults have money in stocks, according to Bankrate's Money Pulse survey. Compared to that, about 61% of adults have at least a cup of coffee daily, according to the latest National Coffee Drinking Trends.

Courtesy of Money.CNN.com

The stock-owning Americans include anyone that has money invested in pension funds, 401(k) retirement plans, IRAs, mutual funds, ETFs or those owning individual stocks like Apple ($AAPL), Ford ($F) and Tesla ($TSLA).

The low number is an alarming trend for America's financial future.

Daily coffee consumption has been growing in recent years, while stock ownership peaked in 2007 -- just before the worst of the financial crisis and Great Recession, according to data from the Federal Reserve.

Missing out on the bull market: Americans who have kept their money on the sidelines are likely regretting it.

The U.S. stock market is in the midst of one of its longest surges in history. The popular S&P 500 Index, which tracks the 500 biggest and most well known publicly traded America companies, has risen over 200% since it bottomed out in March of 2009.

To put it another way, if you took roughly the $1,200 a year spent on buying a daily Starbucks (SBUX) grande caffe latte and put it in the stock market in March 2009, you would have $3,600 today.

"Despite the market hitting record highs, retail investors have dramatically increased their allocation to cash," says Suzanne Duncan, global head of research at State Street's Center for Applied Research.

The stock market gains are only making the rich richer, exacerbating the nation's inequality problems.

Why people don't invest: The Bankrate survey identified a number of factors that keeps people from investing. The biggest problem by far is that people don't have enough money to invest.

As CNNMoney has reported, median household income in America isn't much higher than where it was in 1995. Many families simply aren't seeing their finances improve enough to feel comfortable investing in stocks.

It's particularly problematic among young adults. Just over a quarter of adults under 30 reported having any money in stocks or in funds that invested in stocks, according to the Bankrate survey. Young people have the most to gain by investing in stocks since research shows that they the market is likely to rise a lot in the decades before they retire.

The next largest barriers are that people don't feel educated enough about the stock market, they don't trust stock brokers, and they think it's too risky to be in equities.

Randy Frederick, managing director of trading and derivatives at Schwab's Center for Financial Research gets a lot of inquiries from fearful investors who aren't sure they want to get into stocks or get back in.

"People often call and ask me: 'What about the flash crash?'" Federick told CNNMoney. "I tell them that's only happened once and the market came back. Let's focus on the other 99% of the time."