[tathougies]

Well, I mean the government insists on only allowing rich people to invest and prevent poor people from doing the same, so the claim that his mentality is what's concentrating wealth while the government's own policies get away scot free is rather silly.

[sokoloff]

If you're talking about the "accredited investor" rules, I believe that those are both intended and have the actual effect of protecting poor and middle income people from scammers (by making the exploitation of them with some fantastical get-rich-quick scheme into a specific federal crime).

Does it also prevent them from investing in Facebook in 2004? Yes it does.

[tathougies]

> If you're talking about the "accredited investor" rules, I believe that those are both intended and have the actual effect of protecting poor and middle income people from scammers (by making the exploitation of them with some fantastical get-rich-quick scheme into a specific federal crime).

Yeah, so the thing is that the wealth of a lot of the people with inherited wealth was made via investments by ancestors for whom a similar investment today would be illegal.

It is certainly true that many people lost a lot of money through bad investments before the accredited investor rules. It's also true a lot of people made a shit ton of money. The issue now is that today, they have the effect of ensuring that only the rich can invest in the most lucrative investments.

[skookumchuck]

Anyone can invest. At robinhood.com, you can even buy just one share of stock for no commission. I know a person who scrimps enough to be able to buy one share of stock per month.

[tathougies]

That's not what I'm referring to at all. I mean if your friend has a company and wants to take his company public, he can only sell the stock before the IPO to 'accredited investors', thus concentrating the bulk of the profit potential to those who are already rich. It's not just pre-IPO sales but many other investments. For example, if you live in a poor neighborhood and your friend owns a successful restaurant in your neighborhood, he cannot seek investment from you. Instead, he has to seek investment from a rich person, because the government does not think you are smart enough to invest in your friend's business. this again literally takes money from the poor and hands it to the rich.

The restrictions are completely onerous. Someone I know was soliciting investments of $25k for a business he owned in the community. I had the money in cash, and I was perfectly happy to lose it all (but hopefully I'd make some money). I believed in the business and wanted in. However, since I did not make $200k / yr, and I didn't already have $1m in wealth, I was not allowed. Why? At the time I was taking monthly vacations to Hawaii, New Orleans, skiing, etc. I was eating out every day. I was basically living a life of luxury. But, because of the amount of money in my pocket book, I was barred from taking one potential leap from the working class to the wealthy class. On the other hand, an already wealthy man would be more than allowed to invest.

Of course, I could invest in the public stock market, but the fact is that the public stock market forces people to only invest in certain companies. Many people feel skeptical towards companies over which they cannot directly observe.

Obviously, I understand the stock market exists, but if you think stocks are the most lucrative investments, you have a lot to learn about the financial systems.

[skookumchuck]

> if you think stocks are the most lucrative investments

I didn't say that. But they are the easiest to get into and it's a level playing field (all the info you need about companies is online). Few will deny that early investments in MSFT, AMZN, etc., were incredibly lucrative, and anyone could have invested in them.

As for the minimum investment thing, that came about because of endless lawsuits people bring over failed investments claiming they had no idea what they were doing and need a nanny (i.e. the government) to hold their hand. I don't advocate such restrictions, so don't hang me on it.

> you have a lot to learn about the financial systems

I've done tolerably well investing in stocks, and so as you can see I talk about what I know.

[tathougies]

They may be lucrative but since the same people were denied access to the more lucrative investments it should come as no surprise that the growth of their capital is less than the growth of capital of the rich.

This is not rocket science. Piketty says that when r > g, that is, when return on investment is greater than rate of economic growth, the rich get richer. It is not much of an extrapolation to conclude that if R > r, that is, when the rate of growth of capital of the rich people investments is greater than the rate of growth of capital of regular joe investments, that the rich also get richer

I am well aware of the reason the rules are in place. But in the same way the government cannot ban poor people from starting their own businesses, neither do they have the right to restrict investment by rhe poor. The governmebt simply has to put up with the lawsuits or declare by statute that certain behaviors cannot make someone civilly liable.

Im sure youve done well in stocks. I have too. However, given my time working in management consulting, i can assure you that you could be doing a lot better if you were allowed to invest like the rich do.

[skookumchuck]

> They may be lucrative but since the same people were denied access to the more lucrative investments

Do you realize how much MSFT and AMZN went up since their IPO?

> neither do they have the right to restrict investment by rhe poor.

We can agree on that point, at least. Ironically, the government encourages the poor to invest in lottery tickets, which are not even investments, but straight up gambling.

[tathougies]

> Do you realize how much MSFT and AMZN went up since their IPO?

Yes. But this is irrelevant! The point is that there were other, better-performing investments that the poor could have chosen. That doesn't even address the ethical question of whether it's right to restrict the already disadvantaged from the very mechanisms of wealth creation open to the rich.