More Than Half of Middle-Class Americans Now Own Stocks

The stock market isn't just for rich people anymore. More than half of low and middle-income Americans now invest in capital markets, according to new research by the BlackRock Foundation and Commonwealth, a financial nonprofit.

Most of those less-affluent investors—with household incomes between $30,000 and $80,000—started investing in the past five years. Not decades ago. Not during the dot-com boom. Within the last five years.

The top 1% of wealthy Americans still owns half of all stock, per federal data. But technology and industry shifts dramatically lowered the barrier to entry. Now just about anyone can buy in.

"The entry barriers are lower," said Timothy Flacke, CEO of Commonwealth. "You can start with 50 dollars or, in many cases, a dollar, and a smartphone. That matters."

Got $5 and a Smartphone? Buy Stock

Buying stock has never been easier. Online platforms let consumers purchase shares without brokers or fees. For the price of a coffee, you can own a piece of the market.

"These days, no brokerages charge commissions, and many of them allow for fractional shares," said Robert Brokamp, senior retirement adviser at The Motley Fool. "You can invest as little as 5 dollars, in some cases, and get a portion of a share of Nvidia or Microsoft."

The BlackRock Foundation and Commonwealth report, published October 13, surveyed more than 2,750 Americans from low or moderate-income households. Part of a larger study tracking the flood of new investors during COVID-19 pandemic years.

In 2020 and 2021 alone, individual investors opened 46 million new brokerage accounts. That's not a typo. Forty-six million.

The Pandemic Effect

COVID inspired many Americans to try investing. They were stuck home, spending less, accumulating savings—partly thanks to the federal stimulus.

"There were some folks who found themselves either with more cash or with more time," Flacke said.

For middle-class Americans, stocks and real estate have traditionally served as gateways to the American Dream. Modest investments rewarded with lifetime capital gains.

Recently though, spiraling home prices and rising interest rates pushed homeownership out of reach for many. The stock market, with no minimum investment, remains a viable alternative for building wealth.

The Market Sells Itself

As a wealth-building tool, the stock market has done an excellent job advertising itself.

The S&P 500 rose 261% over the past decade, climbing at an annual rate of 13.6%, according to The Motley Fool.

"With a few exceptions, the market has been on an extraordinary tear over the last 10-15 years," Brokamp said. "That just attracts more attention, and more people invest."

Rising stock ownership among lower-income Americans could eventually chip away at historic wealth disparities. In the first quarter of 2025, the bottom 50% of Americans by net worth owned just 1% of all stocks, per Motley Fool analysis.

With many more lower and middle-income consumers owning stocks, maybe their portfolios will eventually grow. Maybe being the key word.

"Americans are very good at being consumers," Silver said. "But they're also becoming better at being owners, owners of the companies that they're spending money on."

Lower-income investors have similar aspirations as higher-income Americans, according to the BlackRock report. Top investment goals: retirement (37%), money for the future (35%), reducing financial stress (27%), money for children/family (27%).

The survey doesn't include 401(k) accounts, IRAs, or other tax-favored investments. Focuses on consumers investing through standard brokerage accounts.

The Problem Nobody Mentions

New investors are more likely to own individual stocks rather than mutual funds or ETFs. That could be a problem.

All stocks are volatile. Individual stocks are generally more mercurial than mutual funds and ETFs, which often mirror stock or bond index performance.

The survey suggests new investors "are really hungry for information about how to diversify" their investments, said Claire Chamberlain, President of The BlackRock Foundation. "One of the things the industry can do is meet people where they are."

The financial services industry could help by encouraging households to open emergency savings accounts. Recent Investopedia analysis found the average American family should have at least $35,000 in emergency savings to cover unexpected expenses.

Emergency savings deliver financial security. Without savings, a lower-income family is more likely to cash out an investment account when a car breaks down or the roof leaks.

"One of the things that this survey revealed is the importance of having emergency savings," Chamberlain said, "to support the investor's ability to stay the course."

For now, more than half of Americans earning $30,000 to $80,000 own stocks. That's new. Whether it's good depends entirely on what happens next.

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