Why You're Probably Missing Out on Stock Market Wealth (And How to Catch Up)

Only 62% of American adults are invested in the stock market. If you’re in the other 38%, you might think you’re playing it safe. But here’s the uncomfortable truth: staying on the sidelines could be costing you far more than jumping in ever would.

Jeremy Siegel, the legendary Wharton finance professor, didn’t call the stock market the “greatest wealth creator of all time” by accident. But wealth creation doesn’t happen overnight—it happens when you give your money decades to compound. So let’s explore why sitting on cash might be your biggest financial mistake, and why almost every American adult should have stock market exposure.

The Real Cost of Staying Safe: Why Cash and Bonds Are Quietly Eroding Your Wealth

Your savings account feels secure. But security is an illusion if your money is slowly losing value. From 2004 to 2024, the U.S. experienced an average annual inflation rate of 2.5%, while savings accounts paid just 1% annually. Do the math: your purchasing power was shrinking the entire time you thought you were being prudent.

Even when the Federal Reserve pushed savings account yields, CDs, and T-bills to 3-5% in 2022-2023, everyone knew those rates were temporary. Now that interest rates are dropping, those yields are shrinking again. You’re stuck in a race where the finish line keeps moving backward.

Bonds sound like a compromise—more stable than stocks, right? Most corporate bonds, municipal bonds, and fixed-rate Treasury securities struggle to outpace inflation consistently. Yes, inflation-protected bonds like TIPS and I-bonds can keep pace, but the broader bond market? It’s a losing game against rising prices.

The Stock Market Plays by Different Rules

The S&P 500—that index of America’s 500 biggest companies—has delivered average annual returns exceeding 10% since 1957. Let that sink in: 10% annually. That’s not hypothetical, that’s historical fact. While your savings account generates 1% and bonds barely keep pace with inflation, the stock market has consistently left them both in the dust.

Past performance doesn’t guarantee future results, but neither does holding cash. The U.S. economy will keep expanding (barring catastrophe), and expanding economies drive stock market growth. If you’re waiting for the “perfect time” to start investing in the stock market, you’re just waiting to be poorer.

The Barriers to Entry Have Completely Collapsed

Here’s what might have stopped you 15 years ago: commissions. Every trade cost money. But that world is gone. Commission-free trading became industry standard thanks to platforms that disrupted the status quo, and now it costs zero dollars to make your first trade.

Even better? Fractional shares mean you don’t need thousands of dollars to own pieces of expensive stocks like Nvidia or Amazon. You can start with $100. Or $50. Or whatever you can spare. The mechanics of getting started have never been easier.

Small, Consistent Investments Compound Into Serious Money

Here’s where the math gets exciting. Invest $100 monthly with a modest 8% annual return (below the stock market’s historical average, remember), and in 30 years you’ve got $150,000. That’s not from one lucky pick or timing the market perfectly. That’s just consistency and time.

You don’t need to be rich to build wealth in the stock market. You just need to start and keep going. That’s it.

The Stability You’re Actually Looking For Already Exists

Your mental image of stock market investing probably involves volatility, panic, and losing everything overnight. But that’s a caricature. Yes, penny stocks and growth-stage tech companies swing wildly. But the foundational stocks—the ones that actually build long-term wealth—are far steadier than you think.

Coca-Cola is a perfect example. Over 20 years, the stock rallied 213%. But if you’d reinvested the dividends? That same investment would have returned 473%. That’s not chaos—that’s compounding stability. Berkshire Hathaway surged 786% during the same period. These aren’t speculative plays; they’re established companies printing money and sharing it with shareholders.

It’s Harder to Stay Ignorant Than You’d Think

The stock market seems intimidating until you actually study it. Then it’s just: What does the company do? Are they profitable? Is the stock price reasonable relative to those profits? That’s arithmetic. That’s learnable.

Every dollar you invest becomes an incentive to understand business, read earnings reports, and grasp financial metrics. You become financially literate not because you’re forced to, but because your own money is on the line. That education compounds too—smarter investment decisions lead to better financial outcomes across your entire life.

Retirement Won’t Wait (And Neither Should Your Investments)

Only 54.3% of Americans have retirement accounts. Of those who do, just 4.7% have accumulated $1 million. The gap between the haves and have-nots in retirement security is massive. And it didn’t form overnight—it formed from decades of investment decisions starting years ago.

Being strategic about your stock market exposure now isn’t just about having more money later. It’s about retiring earlier, retiring more comfortably, or retiring at all. It’s about joining the minority that actually secured their future instead of hoping Social Security covers it.

Passive Income: The Endgame of Building Stock Market Wealth

Build a $1 million portfolio and spread it across dividend-paying stocks yielding 4-5%, and you’re generating $40,000 to $50,000 annually in pure passive income. If you don’t spend it, reinvest it, and your portfolio grows further. That’s the compounding cycle that separates the comfortable from the stressed.

That’s why understanding why you should invest in the stock market isn’t academic—it’s practical. It’s the difference between financial freedom and financial anxiety. And it all starts with taking the first step, which costs nothing and takes minutes.

The stock market remains one of history’s greatest wealth creators. The only question left is whether you’re going to be one of the people it creates wealth for.