There is a stark wealth inequality in the United States. The top 10% wealthiest people in the U.S. have a shocking 69% of the wealth. That’s significant considering that the bottom 50% have only 1.9% of the US wealth (1).

I’m all about getting political. I love using my voice and my vote to try to affect change. But I’ve realized change can be painfully slow and sometimes we don’t even progress as a society; we regress, such as the 2017 tax plan that reduced corporate taxes permanently, and only reduced middle class taxes temporarily, expiring in 2025 (2).

Due to slow change, we often face economic hardships on our own. We have kids, we grow older, and we plan for retirement; in the meantime, no noticeable public policy may have changed to work towards a more democratic and equitable society. In a way, we’re on our own and might have to save ourselves.

So what’s the here and now solution? Come together and do what we can to increase our wealth with the tools we have.

1. Buy local, buy from small business, support your friends’ businesses

As much as possible buy from your friends’, local, and small businesses. This keeps more money in our communities, helping us all build our wealth quicker.

There’s nothing wrong about buying from big corporations, your money just doesn’t have as big of an impact on our community as buying local does.

When you spend $20 on a piece of art your friend sells, your friend will likely pocket a high percentage of that $20. Compare that to spending $20 at Target, sure some of the $20 goes to the employees (your community members), but it’s a much smaller percentage. A lot of that $20 goes to executives and people like me, who own Target shares, and get dividends from the company.

Which leads me to the next recommendation.

2. Buy a share of stock or even better, buy many shares of stock

Due to the great ingenuity of corporations, even with our conscious effort to buy more locally, lots of our money will still go to big corporations.

Your friends likely won’t be creating an automaker, microchip company, cell phone carrier, etc. anytime soon, but you can still bring the wealth of those industries into your community by buying stock of companies in those industries.

In the U.S., it is super easy to begin buying shares of stock. Thanks to Robinhood, who offered free trades, and therefore pressured the rest of the U.S. brokerage companies to reduce their fees, you can buy just one share of stock at a time without worrying about the fees eating up all your profit.

There are lots of good brokerage companies, but if you end up using Robinhood, use my referral link or one of your friends’ Robinhood referral links, then we get a free stock when you sign up (helping increase the community wealth). You get a free stock too, but I believe you get a free stock regardless.

3. Financially educate the next generation

Even if you don’t create a lot of wealth to pass down, you can at least pass down the tools to start building wealth. Think about how much further along you’d be on your wealth journey if you knew what you know right now, 10-15 years ago.

Set up a custodial investing account for your kids. Get them involved with putting their money in investments at a young age, so that buying assets is 2^nd nature for them when they become an adult.

I’ve set up a custodial account through Charles Schwab. I was able to do it all online. I also try to explain to my nephew what I’m buying for him and why. I want terms like ticker symbol, price to earnings ratio, dividends, etc. to not be foreign words for him. He might not understand it completely, but he won’t be starting from scratch in his 20s.

Let me know in the comments of any other steps you think can help us reduce the wealth gap. Best of luck!

Sources:

(1)  “Distributional National Acounts”. federalreserve.gov. December 16, 2020. Retrieved December 16, 2020.

(2) Floyd, David. “Explaining the Trump Tax Reform Plan”. Investopedia. Retrieved December 16, 2020.