I think there are quite a few people who are simply living paycheck to paycheck and just don't any extra money to invest. It seems every month or two I hear about a poll that quizzes people about how much money they are socking away into savings. The polls always come back with these horrid numbers that show that most people aren't saving ANYTHING at all. Not even in a simple savings account. Now one could argue that if these people tried really hard they could probably find a few bucks here and there to save, but until that part happens, the stock market for them, is miles away.
I think a lot of it's definitely going to be a lack of education. I provide financial coaching services and it's astonishing (at least to me) how little people know or the level of misinformation people work with, which has heavily impacted the way they look at money. Let's face it, a lot of people got very scared off on the back of the global financial crisis, whether they were invested or not at the time. They also see the stock market as a casino (only partly true) so don't feel that it's a place for them. The sad thing is they often turn to alternative get-rich-quick(ish) concepts which are only there to take their money quick.
Yes I see a lot of this too. Thing is, it's not really so much about them having a low paying job, it's about them spending every dollar they get in stuff that they don't really need. It's just..well.. idiotic. At the very least everyone should have a small emergency fund on a second bank account that can be used if something happens like your car breaks down or you need to take a couple week of unpaid vacation etc. That is the MINIMUM... but so many people neglect it and use those horrible 10% a month payday loans to fix these situations.
Yep, I can totally relate to that. What I earn I basically spend and I don't like a luxury live, so how I can even think of having enough to invest. It's just the reality we have.
Many people don't have any excess money to invest. Actually, many are in debt along with not having any assets. For instance, where I live, the land rent for a trailer or modular is $500 a month generally. If you don't qualify for low income, apartments are $1000. Given that most jobs are low income service, it makes sense that no one can really risk putting a chunk of money in the stock market unless multiple people live in the same place without kids. Yes, a lot of people spend too much but that isn't the only reason there is a problem.
It's always a choice. You can take a look at some of the members here, some people have started or are planning on starting with $100 a month. That is, in most normal situations, something that you can budget for. If you smoke at $5 per packet (no idea how much it costs in the USA. In here it's 5.70e per pack so a little over $6) and a packet per day, you are literally lighting up $150 a month. Life is not easy when you are working minimum wage but there are ways to get out of it. Investing is one of them, even if you can't afford more than that $100 or $50 a month.
Probably trust has a lot to do with it. The poorest 50% are probably very unlikely to hand over their savings to brokerages. We´ve demonized wall street to the point that most people don´t trust them. And honestly, I don´t blame them.
Lack of capital, lack of education, an irrational fear of investing, or some combination of those things would be my hunch. All of those can be overcome with a little effort and discipline though.
According to a survey by Bankrate.com only 26% of millennials invest in the stock market. https://medium.com/@TipdOff/most-millennials-don-t-invest-in-stocks-314823b6de49 That's mainly because they don't know enough about the market (21%) and because they don't have enough money (53%). Lack of proper education seems to be an issue. Many people don't realize that you can start investing even with small amounts.