Building wealth is easier than most believe

The global economy continues to experience growth and innovation, creating opportunities for individuals to build wealth through stock ownership. Many people mistakenly believe that achieving success in stocks requires extensive knowledge, large sums of money, or avoidance of market volatility. However, building wealth through stocks is simplified by factors such as patience, discipline, and time.

In the past, when the reporter began their career 54 years ago, the challenges faced by investors were significant. Before the internet, accessing information was difficult, with researchers searching through library archives and microfiche for news and corporate reports. International stock trades also had high commissions and wide bid/ask spreads, reducing returns.

These obstacles have gradually diminished, starting with the U.S. "May Day" reforms in 1975 that eliminated fixed commissions. The UK followed suit in 1986 as part of its financial deregulation, and many other major financial markets have since adapted.

Today, opening online accounts with minimal costs is easy, and trades can be executed almost without fees thanks to the electronic nature of markets and tight bid/ask spreads. Additionally, mobile phones provide instantaneous access to vast amounts of information, enabling investors to make informed decisions without needing crystal balls or extensive research.

Exchange-traded funds (ETFs) have made it simple for investors to own the broader market, providing exposure to innovation and growth across world economies at near-zero costs. Owning a diversified portfolio of stocks or the entire market does not guarantee quick riches, but it is a crucial component of long-term wealth creation. Over the past century, the S&P 500 has achieved an average annual return of 10%, including periods of both substantial growth and severe losses.

While short-term downturns are inevitable, the power of compounding enables even modest investments to grow exponentially over time. For example, a $2,400 annual investment, or $200 monthly, compounded at an 8% rate over 30 years, could potentially reach nearly $300,000. Although achieving such growth may require patience and discipline, the lower barriers to entry and potentially high rewards make stock ownership an appealing option for building lasting wealth.