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Everyone Is An Investor
Income inequality in the United States sits at its highest level in recorded history. The Gini coefficient, a measure of inequality, has steadily trended up for the past 50 years.
There’s a key fact underpinning growing inequality: millions of Americans don’t own stock. Only about 1 in 2 Americans has any exposure to the stock market. That exposure is stratified by income: only 15% of families in the bottom 20% of income earners hold stock, while 92% of families in the top 10% of the income distribution own stock. The top 10% of income earners own 10 times as much of the stock market as the bottom 60%. And white investors own 3x as much stock as Black or Hispanic stockholders.
The economic recovery from the Great Recession largely flowed to wealthy equity-holders while wages stagnated for salaried and hourly workers. Limited access to the capital markets stymies economic opportunity and mobility: it’s nearly impossible to accumulate true wealth by renting your time; you have to own equity.
But we’re starting to see a sea change happen: all of a sudden, everyone is an investor. In my mind, this is the result of three compounding forces:
New technologies and business models have made investing accessible. Anyone with a smartphone, for instance, can use Robinhood. Robinhood also popularized zero-fee trading, which forced the hands of brokerages like E*Trade and Charles Schwab. Commission-free trading is now the norm.
At the same time that investing became more accessible, crypto went mainstream. About 20 million Americans—14% of the population—own crypto, with 100K “Bitcoin millionaires” out there. Many Americans (and especially many young Americans) learned to think like an investor through crypto.
Most fundamentally, we’re seeing a generational backlash to institutions and centralized power. Young people don’t want to rent their time to corporations—they watched their parents and grandparents get burned during the Great Recession and again during the COVID pandemic. Why work within “the system” with capped upside when you can use your hustle and savvy to dictate your own fortune, and have equity upside?
Back in February, John Luttig—always ahead of the curve—called this “the financialization of culture” in an excellent piece. That framing is spot-on: John writes, people “see [equity] as the golden ticket out of the tyranny of 9-5” and I think that captures the mindset of an entire generation.
I first wrote about the “Everyone is an investor” phenomenon in How People in the Philippines Are Making Money in the Metaverse. This week, I want to explore it in more depth. I’m going to look at three subsets of the trend:
Investing in companies
Investing in events
Investing in people
Then I’ll look at how the investing phenomenon is seeping into education, social networks, and the future of work. Let’s dive in.
💰 Investing in Companies
During the GameStop mania back in January, we saw how products like Robinhood and forums like WallStreetBets had pushed investing firmly into the mainstream. Unleashing pent-up resentment from the 2008 financial crisis, Main Street was finally taking on Wall Street; “the people” were coming for the wealthy elites.
Over the last five years, public markets investing has exploded. Just last year, Robinhood’s monthly active users doubled to 18 million. But private markets investing remained exclusive. A massive amount of wealth creation—particularly in Silicon Valley—has come from angel investing and venture capital, which has been inaccessible to most of America.
That’s starting to change. In 2020, the SEC expanded its definition of who constitutes an “accredited investor”. To angel invest in the past, you needed an annual income over $200K ($300K for joint income) for two consecutive years, or a net worth north of $1M. Naturally, that excluded most people—92% of U.S. households, to be exact. New SEC rules are looser, simply requiring “financial sophistication and understanding of the private markets.”
Future-minded startups are capitalizing on this rules change. Maven, a platform for cohort-based courses, opened its seed round to the public:
Snack, a “Tinder meets TikTok” Gen Z dating app, allocated $500K of its seed round to Gen Z users. Its founder, Kim Kaplan, said: “I want Gen Z to have a seat at the table and help shape what Snack becomes. I want them to have that voice and participate, and be a champion for Snack.”
Democratized angel investing has the dual effect of breaking down barriers to wealth creation (which will in turn break down the calcified structures of American income inequality), while also letting companies stay close to users.
Startups are beginning to formalize this. Stonks, which comes out of beta today, bills itself as Twitch + Kickstarter + Shark Tank. Anyone can watch entrepreneurs pitch their startups over livestream on Stonks, and then invest in the round.
Stonks’ website shows what you could theoretically have made investing in Tesla, Uber, Coinbase, and other hot startups.
One of the drivers of income inequality is that the rich get richer: Mark Cuban’s successes give him more money and better access to get into the next deal. The flywheel spins faster for him. Platforms like Stonks break down these archaic and unequal structures. You no longer have to be Mark Cuban to have a shot at wealth creation.
💰 Investing in Events
At its simplest definition, investing means using your knowledge to deploy capital with the hopes of earning a return. Traditionally, this meant investing in companies. But we’re now seeing the financialization of everything, which is expanding our definition of investing. One interesting manifestation is investing in events.
The startup Kalshi—named for the Arabic word for “everything”—lets you invest in (almost) everything. Kalshi uses “yes” or “no” contracts to let you trade on event outcomes. If you think the unemployment rate in July will be over 7%, you can buy a “yes” contract. If you don’t think 2021 will be the planet’s hottest year on record, you can buy a “no” contract.
Kalshi’s co-founder Tarek Mansour says:
“The universe of what has financial value is expanding rapidly. Markets for information, digital assets and even sneakers are becoming just as valuable as legacy markets for commodities, such as oil, crops and gold.”
More people are being trained to think like investors—to make risk-reward judgments and put capital to work behind their convictions. It’s easy to envision a world in which this mentality goes beyond buying stocks. In this future, any specialized knowledge or differentiated insight can lead to financial upside.
💰 Investing in People
In early 2020, Reuben Bramanathan tokenized his time: 1 $CSNL token equaled 1 hour of Reuben’s time and was freely tradable. If you thought Reuben’s time would become more valuable as he became more successful, you could buy his token and resell it for a profit later.
In summer 2020, Alex Masmej tokenized himself. $ALEX token raised $20K, helping Alex move from Paris to San Francisco. Holders of $ALEX receive Alex’s private newsletter, get access to a Telegram group chat, and share 15% of Alex’s income for the next three years, capped at $100K.
In Creator IPOs last year, I asked why I couldn’t have invested in Taylor Swift when I first became a fan back in 2006. I even took the time to chart Taylor’s stock market value, which I had way too much fun doing 🤷♂️ If I’d invested in Taylor when I first discovered her, I would’ve made a tidy sum.
The concept of “Robinhood for creators” isn’t far off. Platforms like Roll, Rally, and Coinvise let people issue their own tokens. Creative Juice lets creators invest in other creators through Juice Funds and earn a share of future earnings. Bitclout stirred up controversy by assigning a financial value to the top 15,000 people on Twitter.
As Jarrod Dicker puts it, why subscribe when you can invest? If Substack lets you support creators by subscribing, Mirror lets you own a financial stake in their work. One novelist raised $88K to write her book; holders of $NOVEL token will share in the profits of her work, in return for believing in her early on.
Investing in people is going mainstream. My view is that in 10 years, not everyone will have a social token. I’m not sure it makes sense for all of your friends and family—your uncle, your cousin, your college roommate—to each have their own respective token. But any creator or person with a sizable following will have their own token: people who have popular YouTube channels today, who have big Substacks or 10K+ Twitter followings or who stream frequently on Twitch. These people will issue their own tokens, and those tokens will become how fans interact with creators.
What’s groundbreaking about crypto is that it shifts the web from social currency to economic currency. When I like your Instagram post today, I grant you some social capital; what’s the equivalent for the cryptomedia age? Me “liking” your content may mean me financially investing in your success and sharing in future income. Maybe Spotify’s Year in Review will award “stock” in your top artists. If you’re in the top 1% of Olivia Rodrigo listeners, you get 1,000 shares of $OLIVIA token, good for 0.001% of her Spotify royalties. The value being created online today largely goes uncaptured. That won’t happen in the future—we’ll all be investors and equity owners, sharing in our own upsides and the upsides of the people we believe in.
💧 Ripple Effects
“Everyone is an investor” cuts across sectors: it’s a mindset shift that seeps into how we learn, how we interact, and how we work.
Take education. Stunningly, only 7 U.S. states require some form of high school course on personal finance. Most people rely on their parents to learn about investing, meaning that wealthier kids have better access to education about the markets. Again, this perpetuates economic inequality. There’s a massive gap for education solutions.
Historically, Yahoo Finance and Investopedia filled this gap. Newer tools like Atom Finance are beginning to play an important role. But there need to be more scalable, personalized, and accessible solutions. Creators are part of the answer.
“FinTok” (Finance TikTok) is a surprisingly robust and vibrant corner of TikTok. Young creators are riding the wave of Gen Z’s enthusiasm for investing. Austin Hankwitz, a good friend of mine, was a financial analyst in Nashville at the start of the pandemic. He downloaded TikTok in March of 2020. Today, he has 500,000 followers and makes a full-time living creating content about finance and investing. Aspiring investors turn to him to demystify IPOs and earnings releases. Platforms are helping creators reach their audiences. TikTok, YouTube, and Instagram are obvious examples but newer, dedicated platforms go one step further: Trading.tv, for example, is a social livestream platform that lets creators broadcast to audiences, who can make live trades based on creators’ content.
Education around investing goes hand-in-hand with a related and equally-nascent category: investing social networks. Traditionally, investing was solitary—it was just you poring over stocks listed in the newspaper. If you were lucky, you might occasionally talk to a financial advisor. Today, investing is deeply social. WallStreetBets is the best example: it’s one of the most popular subreddits on Reddit, with 11 million members.
Startups are formalizing WallStreetBets and making investing more social. Tendies directly promises to be a better version of the subreddit. Commonstock calls itself a social network. Public.com’s mission is to “make the stock market social.” And Finary is an online community to chat about stocks with friends.
Being an investor is bleeding into new forms of work. I went into this in more depth while writing about Yield Guild and play-to-earn gaming, so I’ll keep it brief here. In a previous generation, capital was borderless and labor was fixed. This enriched the investor class, while leaving behind the working class. Online, capital and labor are both borderless. You can earn income on Axie Infinity, or turn a profit by investing in certain player cards on Sorare. The intersection of crypto and gaming is our closest modern analogue to the future jobs of the metaverse.
Final Thoughts: Cultural Liquidity
The last decade of the web was about transferring social capital. Facebook’s “Like” button and Instagram’s follower counts are clear examples. We’re now shifting to an economic era of the web, where everyone is an investor and capital flows more easily between people. This goes beyond finance—I call this cultural liquidity. We’ll more easily be able to support the art and people and culture we glean value from. This is the age of patronage, and it will unlock a second Renaissance of creativity.
You can expand “Everyone is an investor” to “Everyone is an equity owner.” Entrepreneurship is booming: Americans started 4.4 million businesses last year, a 24% year-over-year increase. People are investing in themselves. This is especially true for younger generations, who view traditional careers as anathema. Red Bull wanted to work with Bryce Hall and Josh Richards, 21-year-old and 19-year-old TikTok creators each with 20 million followers. In a previous era, Hall and Richards would have been thrilled. Instead, they decided to launch their own energy drink brand. Ani Energy was born, and the two creators own equity in Ani instead of renting their distribution to Red Bull.
This is just the beginning of the investor era. Every industry will be transformed. Why shouldn’t Uber’s drivers own more equity in the company? What if for every Uber ride, a driver got 1/1,000th of a share? This is what Fairmint is enabling—turning stakeholders into investors. Future companies and organizations and people will be owned by the community. The pie will grow and be split more equitably.
“Everyone is an investor” is a collision of enabling technology, new business models, and cultural mindset shifts. It’s a decades-long phenomenon that, if successful, will chip away at America’s broken and outdated economic systems.
Sources & Additional Reading
After reading this piece, a friend shared this post from John Luttig which talks about finance as culture—it’s a good read and as usual, John was way ahead of me!
Why Subscribe When You Can Invest? | Jarrod Dicker
The Ownership Economy | Jesse Walden
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