Money Talks News may earn commission or revenue through links in the content below. Our editorial team independently selects all products. Compensation does not influence our recommendations.
BlackRock CEO Larry Fink put his finger on a sore spot last week.
“There is a big divide right now that those who have investment assets have done better than wages,” Fink said Sept. 30 at Ford’s Accelerate forum in Detroit.
“Over the last 25 years, you invested in the U.S. stock market, you earned a 10% compounded return.” Then he added, “We have not seen that type of increase in wages.” (1)
Over the years, I’ve made a few million in stocks, and I was also a stockbroker on Black Monday in 1987. So I’ll say it plainly: Fink is right about the divide, and Fortune found his number checks out. But that number depends on the calendar, and that matters if you’re retired or close to it.
Here’s the evidence. Median weekly pay for full-time workers was $1,251 in the second quarter of 2026, according to Bureau of Labor Statistics data. (2) That’s up from $596 in the third quarter of 2001, Fortune noted — roughly double, or about 3% a year. (1)
Over roughly the same stretch, from the end of September 2001 through last week, the S&P 500 with dividends reinvested turned $1 into nearly $11, Fortune calculated. (1)
And only 58% of families owned any stock, directly or indirectly, in the Federal Reserve’s 2022 Survey of Consumer Finances. (4)
Here are five lessons for retirees in Fink’s comment.
1. Fink is right: owners beat earners
Wages roughly doubled. Stocks grew nearly elevenfold. (1) That’s the whole wealth gap in two numbers.
And remember, that 58% figure means more than 4 in 10 families had no stake in it at all in 2022. (4) If you’re retired, your paycheck is gone. What you own does most of the growing.
2. Move the start date and 10% becomes 8.7%
Shift the window to the 25 calendar years from 2001 through 2025, using annual S&P 500 total returns compiled by NYU’s Aswath Damodaran, and the compounded return drops to about 8.7% a year. (3) That’s a nine-month difference in start and end dates.
That’s still terrific. But the gap is real money. On $100,000 over 25 years, 10% a year grows to about $1.08 million. At 8.7%, it’s about $805,000.
Fortune’s check of Fink’s figure ran from late September 2001 through last week. (1) That’s exactly my point: your result depends heavily on when you start and when you stop.
If you’re building a retirement plan, don’t plug in 10% and hope. A plan that works at a lower return is a plan you can trust.
3. Timing can wreck a retirement
Here’s what Fink’s “25 years” glosses over. Someone who invested in the S&P 500 at the start of 2000 sat through the dot-com bust and the 2008 crash. By the end of 2012 — 13 years later — they were up only about 23% in total, dividends included. (3)
I lived through it. I traded through the dot-com bust, 2008 and the 2020 pandemic crash. The long run is real. But if you need to sell when prices are down, you don’t get to wait for it.
The fix isn’t to avoid stocks. It’s to know which money you’ll need soon and which can ride out a bad decade.
Quick aside — most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for more than 35 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter. Takes 10 seconds. No fluff. No spam.
4. You’re never too old to be an owner
If you’re in the 42% with no stake in the market, start small. (4) You don’t need a fortune.
For example, SoFi® Active Invest lets you get started with as little as $5, with no account minimums.
SoFi lets you buy fractional shares of companies you know and trade stocks and ETFs with no commissions. And if picking individual stocks feels like a lot, you can start with a collection SoFi has already put together and spread your money across a mix of companies.
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUEBrokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org).
5. Get the mix right for your age
Owning stocks at 70 isn’t the same as owning them at 30. The question isn’t whether to own them, but how much, and how to pull money out without selling at the worst moment.
That’s where a second set of eyes pays for itself. If you’d like some help, SmartAsset matches you with up to three fiduciary advisors — legally required to prioritize your interests. They can spot tax savings, Social Security strategies and planning gaps you might miss. If you have $100K+ in investments, get matched free.
My honest take
Yes, Larry Fink runs an investment firm, so he has a stake in getting people into investing. That doesn’t make him wrong. Over the past quarter-century, the people who owned stocks pulled far ahead of the people who only earned paychecks.
Just don’t take the 10% to the bank. Plan on less, protect the money you’ll need soon, and let the rest work.
The stock market rewards owners. It just doesn’t tell you in advance which decade you’re going to get.
Sources: 1. Fortune; 2. U.S. Bureau of Labor Statistics via FRED; 3. NYU Stern School of Business (Aswath Damodaran); 4. Federal Reserve
Add a Comment