Most lower-income Americans now investing in capital markets, study reveals

More than half of individuals from households earning between $30,000 and $79,999 annually now hold retail investments, marking a new era of market participation among lower- and middle-income Americans.

A new study from The BlackRock Foundation and Commonwealth shows that over half of these investors entered the markets within the past five years, highlighting the expanding democratization of investing that’s reshaping long-term financial security for millions.

“Americans who historically lacked wealth-building opportunities are now taking bold steps to secure their futures,” says Claire Chamberlain, president of The BlackRock Foundation. “Building on The BlackRock Foundation’s work with Commonwealth to shore up short-term savings for families, we are excited to partner with them to better understand the ways in which we can support more first-time investors on their journey toward longer-term financial security and wealth building.”

Around 37% of respondents who started investing since 2020 plan to remain invested for at least 11 more years, while 80% expect to continue for three years or longer. Top goals include retirement (37%), saving for the future (35%), and reducing financial stress (27%).

More than one third of investors reported pausing their investing at some point, most commonly because they “did not feel financially secure enough to continue.” Others cited emergency expenses as a reason they had to sell investments prematurely, highlighting the continued issue of many households lacking emergency funds.

Newer investors said they struggle with investment choices, market risk, and balancing finances for investing with everyday expenses, and while most hold individual stocks (69%) and about one third own ETFs or mutual funds, this suggests room to strengthen diversification education.

Ninety percent of current investors said they know at least one other person who invests, compared with 64% among non-investors.

One in five newer investors said they aren’t investing for retirement, with 17% pointing to the absence of an employer-sponsored plan as the main barrier.

“Our new research highlights the significant opportunity for the financial services industry to enable more Americans to build wealth: more than half of people living on low and moderate incomes are not just dipping a toe into investing, but motivated by long-term goals like retirement, homeownership, and financial security for their families,” says Timothy Flacke, CEO of Commonwealth. “To turn this momentum into lasting wealth, the financial services ecosystem must meet their specific needs with tools that recognize their full financial picture, including access to short-term liquid savings. With the right tools, this growing group of investors has the potential to fundamentally expand who builds wealth in America.”