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The stock market is a staple of American life. Movies like The Big Short or the Wolf of Wall Street have become elements of pop culture, and the Wall Street Journal currently has over 4 million subscribers. This global phenomenon is currently present in many different facets of our lives. In fact, there is an entire sector of jobs that are based on reading and predicting the stock market for other people.
All of this is to say that the stock market has become a global phenomenon over the years. Better yet, it provides everyday people like you and me a way to make money … without working. In fact, there has never been a 20 year period in which stocks lost money overall. The stock market provides passive income for 62% of Americans, but are Vanderbilt students taking part?
A survey of approximately 80 residents of the Stambaugh House revealed that 35% of students are currently invested in the stock market. Although the survey is limited, these results are still quite concerning. This mark is notably lower than the national percentage, so what’s up?
A Lack of Awareness
When asking why respondents did not currently invest in the stock market, the most common answer was something along the lines of “I don’t know enough about it.” In the words of Aidan Railton, a Vanderbilt freshman, “I don’t trust myself to invest and I don’t think it would make much of a difference.” Unfortunately, this common stance results in people missing out on potential earnings, which can stockpile over time and result in a significant amount of income for the individual.
Another common reason for not investing was that students didn’t trust the stock market. I find this ironic, especially considering the comparatively high percentage of students that were into sports betting (see my last article). Anyone who knows a little about both of these sectors would say that the stock market is more reliable without question. However, evidently, college students don’t know enough about the stock market, so they inherently distrust it.
Boredom
One of the realities of the stock market is that it can be extremely boring. Most of the blue chip stocks and index funds will only fluctuate by a fraction of a percentage point every day, and these small movements in price don’t appeal to the average college student. “Blue chip” stocks are companies that have great reputations and typically pay dividends every year. Index funds are indicators that track the performance of a group of stocks. The fact that they involve multiple stocks which are often from different sectors makes index funds one of the most reliable avenues of investment.
The rise in the availability of online gambling and sports betting has only exacerbated this effect. It is so easy for any average person to have multiple bets going every night and have immediate satisfaction while watching the games that night. Obviously putting your money on different games every night is more exciting than having your money sit in the same stocks for years on end. As a result, many students at Vanderbilt simply aren’t drawn to the stock market because it doesn’t produce the same elation as many of the exciting things in the world around us.
While it is fair to say that the stock market is boring most of the time, this boredom is actually what a smart investor appreciates most about their stocks. Steady growth is the safest way to make money, and it allows the average person to run an investment account without devoting significant amounts of time or energy towards it. A student like myself can put their money in index funds and not really have to worry about huge jumps in price on a day-to-day basis, which allows investing to be a minor part of my life while still making me money.
Get Invested!
If you are reading this and are not currently invested in the stock market in some way, shape, or form, I hope this article has convinced you to invest. Not investing means that you are missing out on a safe source of passive income, basically leaving free money on the table. Vanderbilt students, do yourself a favor: invest in your future and open an investment account today.
