The last few years has seen an explosion in interest from retail investors. As new platforms bring costs down and allow investors to start with smaller and smaller amounts of money, people that were traditionally locked out of the opportunities in the stock market can now take participate. And this article from The Economist takes a look at one group where interest in the stock market has surged – America’s prisoners.
A lot of this started with America’s COVID relief payments in 2020, which were paid to all Americans – including those in prison. And like 20 million non-incarcerated Americans, they used this stimulus cheque to start investing. Unlike those non-incarcerated Americans, it was a little harder to trade. Prisoners can’t access smart phones or computers to set up brokerage accounts. So, in a throwback to pre-internet investing, prisoners were using the phone – calling family members to invest on their behalf.
This article is written by two prisoners incarcerated in Washington State and they write about how many prisoners now view finance as an opportunity to break the cycle of poverty. Once you’ve been locked up, the odds are stacked against you to get your life back on track. Most jobs in America require you to disclose whether you’ve been to prison and this makes it hard to find a job post-release. A Brookings Institute study found that “almost half of ex-prisoners will have no reported earnings in the first several years after their release”. For the prisoners that wrote this article, the stock market is a way to build wealth outside a job and their opportunity to avoid becoming part of this Brookings statistic.
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