Nobody Wants to Talk About the Disconnect
While driving the other day, I was listening to the Podcast The Business Show with Andrew Giancola on how many of us still feel broke even when the economy can be doing well. We hear that the unemployment rate is relatively low. The stock market is performing fairly well with recently hitting an all time high. Why does it feel like everyone we know is still broke while the economy seems to be strong?
Here’s the truth nobody wants to say out loud. The market is is doing well because asset owners are winning big, while everyone else (people living on wages, people keeping their money in cash) are getting absolutely crushed.
And look, I get it. You’re working hard, maybe even grinding at a side hustle, cutting back where you can. But your bank account still looks depressing. Your grocery bill keeps climbing. Your rent is insane. And every time you hear about another market record, it feels like you’re watching a party you weren’t invited to. That’s because, in a lot of ways, you weren’t.
Today, I’m going to explain why this can happen and what you could do about it. Because here’s the thing, you can keep playing the game you’re currently playing and keep losing, or you can learn the actual rules and start building real wealth.
We’re Living in Two Different Economies
First, let’s look at what is called the Consumer sentiment (basically how people feel about their finances) is near historic lows right now. People are stressed, anxious, and worried about their financial future. Meanwhile, the S&P 500 has been absolutely crushing it. So what gives?
Well, here’s what’s happening. The top 10 to 20% of households own most of the financial assets in this country. These are the people that are investing in the market. When the market goes up, their portfolios goes up. These are the peeps that feel wealthy. They able to spend more freely. They may do things like, upgrade their cars or take nicer vacations. That spending then props up the economy and makes everything look good to the analysts.
But what about the remainder of households? Those other 80%? They’re continuing to face skyrocketing grocery prices, rent hikes that seem to have no end, childcare costs that are out of control, and wages that just can’t keep up with inflation. And here’s the thing, they don’t have enough assets to really benefit from the market’s ups and downs. So, they’re just dealing with all the costs of the economy without getting any of the rewards.
This is why the overall mood is so down, even though the economy seems to be doing well. We’re all living in different economic realities, depending on whether we own assets or not.
The Numbers That Will Blow Your Mind
Let me share some stats that really show what’s going on. The wealthiest 1% of Americans now own almost half of the entire US stock market! The top 10% control more than 80% of all stocks. Meanwhile, the bottom half of Americans (we’re talking tens of millions of people) own roughly 1% of stocks. Yes, That’s one percent.
So, every time the market goes up, it mostly benefits the small group of households. The ones that are investing, while everyone else doesn’t see much of the upside.
Here’s another thing, about 80 to 90% of those households making over $100,000 per year own stocks. And less than half of lower-income households own any stocks at all.
So, when you hear things like “the market gained 25% this year,” that gain is completely missing half the country. Because They’re not part of it, not benefiting from it, just watching their costs go up while their wages stay the same.
What’s Happening to People Who Don’t Own Assets
Since 2020, average US rents have gone up almost 30%. Single-family home rents? Over 40%. But median household income only rose about 22%.
Think about that. Renters are really feeling the squeeze. And that gap keeps people stuck renting longer, delaying their chance to become asset owners themselves. It’s a tough situation.
And what about wages, you ask? Well, from 2021 to 2025, real hourly earnings, think your paycheck adjusted for inflation, have been pretty stable or even a bit down. That’s right. Down! You might be getting small raises, but after you cover essentials like groceries, housing, childcare, and health insurance, you’re not really seeing your money grow.
You’re stuck in the same damn place! This is why so many people feel broke even with a job, or even two jobs. The system seems to favor those who own assets, not just those who earn wages.
The Part That’s Going to Make You Uncomfortable
We know just saving more won’t close this gap. I like to say, “You can’t save your way to wealth.” I know. We’ve all been told to cut back on eating out, skip subscriptions, or make coffee at home. And yes, cutting expenses can help. Spending less than you make is a basic principle.
But here’s the catch. If you’re putting all your savings in a regular bank account earning only about 0.5% interest, and inflation is running at 3 to 4% (or up to like 8% like we saw recently), you’re losing purchasing power every year. Your dollar balance might go up, but the goods and services that money can actually buy is going down.
Meanwhile, those diversified stock portfolios have historically delivered around 10% annual returns over the long term. Ummm yeah. 10% versus 0.5%. That’s a huge difference.
And because the wealthy already own most of the assets, they’re earning those compounding returns automatically. They don’t have to work harder. Their money works for them. If you’re not investing, you’re relying entirely on wages, which grow so much slower over time. If you’re not investing, you’ll lose the game.
This is the trap. You can work hard, budget, and save every penny. But if that money is sitting in cash, you’re still falling behind those who own assets. You’re playing a different game, and you’re losing.
The Answer Nobody Wants to Hear
So, what’s the solution? You need to invest. You invest by becoming an asset owner. The wealth gap in America isn’t just about income. It’s about who is investing in the market. People who consistently own a wide range of market assets benefit from those market highs and grow when the economy thrives.
Even if you invest a little bit each month in diversified index funds, you’re moving from being just a victim of inflation to becoming a part-owner of the economy that creates things. You’re not just paying into the system; you’re getting a share of the profits.
Let’s look at some real numbers to make this clear.
Imagine you invest $500 each month in a stock market index fund. Over 30 years, with an average annual return of 10% (based on past S&P 500 performance), that could grow to over $1 million.
Now, if you put that same $500 a month into a savings account that earns 1%, you’d only end up with about $230,000.
That’s an $800,000 difference! This is generational wealth versus just keeping up.
Please understand me, I’m not saying you shouldn’t save. You definitely need an emergency fund in cash, and it should be in a high-yield savings account where you can get to it quickly. But once you have that safety net (three to six months of expenses), every extra dollar should go into investments, index funds, retirement accounts, or assets that grow with the economy.
Because here’s the truth, the market doesn’t care about how hard you work or how many side gigs you have. It rewards ownership, full stop.
Some Things We Can Be Doing Now:
1. Open a Brokerage Account
If you don’t already have one, consider opening a brokerage account today. Fidelity, Vanguard, Charles Schwab It doesn’t really matter which one you choose. Just get started! Most of these platforms make it super easy to set up an account in under 10 minutes.
2. Learn How to Automate Your Investments
Think about investing in low-cost index funds or ETFs. Do some research to see what suits your risk level, but this is a great place to begin. And make it automatic so you can’t talk yourself out of it. Set it up once, let it run, and don’t mess with it. Please discuss with a financial advisor or investment pro if you need help or have questions.
3. Max Out Your Employer Match
If you have access to a 401(k) and your employer offers a match, make sure you’re getting it. That’s free money! If they match 3%, at least contribute 3%. Don’t leave that on the table.
4. Stop Leaving Cash Sitting Around
Once you have your emergency fund secured, stop leaving large amounts of cash in your checking account earning nothing. Put that money to work by investing it!
5. Think Long Term
The market will go up and down. It might feel crazy-scary sometimes. But over 20 to 30 years, it has always trended up. You have to stay invested. Don’t panic sell when things dip. That’s how you lose.
Stop Playing the Game You Can’t Win
The wealth gap isn’t closing because rich people work harder or save smarter. It’s widening because they own assets and most people don’t.
So, stop playing the game where wages are the only thing growing your net worth. Stop relying on cash savings while inflation eats away at your purchasing power.
Start building a piece of the economy. Start owning assets. Start participating in the market gains instead of just watching from the sidelines.
Because here’s what I’ve learned after years of talking to people about money, you can’t budget your way to wealth when the entire system is designed to reward ownership over labor. You have to play by the actual rules, not the rules you wish existed.
The stock market is doing great, but it’s only benefiting those who already have a stake in it. So, the real question isn’t why you’re still feeling financially strained. Instead, it’s whether you’re ready to take action to change that.
Let’s keep your horns up and get your money working for you, not the other way around!
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