Where does Wall Street get its money?

After reading the “anti-woke” and anti-Chinese attitudes hurting state economies? thread this article popped up in my newsfeed.

The current conflict over environmental, social, and governance (ESG) principles raises a crucial question: How should the managers of financial funds invest the enormous sums entrusted to them? Giant asset management firms like BlackRock contend that responsible stewardship of customers’ savings includes promoting a “sustainable” environment for long-term returns by joining in the growing movement of investors from fossil fuels into renewable energy. But Republican politicians denounce “woke capital” for tilting away from the oil, gas, and coal industries, and they demand the divestment of public pension funds from ESG-oriented firms in response.

Yet a more fundamental question has been left out of the debate: Where has all of that money come from in the first place, and how have investment companies come to control it? The answer reveals how the main contributors have been sidelined in the struggle over their savings, and why neither Wall Street executives nor their conservative critics speak for them.

Most of the cash invested by financial firms derives from American workers’ retirement savings, administered by pension funds, mutual funds, and money managers, now totaling more than $20 trillion in “assets under management.” Workers and capitalists have battled for decades over who has the right to dictate where this money gets invested.

After reading it I did some searching and found an article from 2020 by Michael Batnick that gives more data on how much of the stock market American workers own.


The subtitle says:

Workers provide the bulk of the money invested by asset managers, but do not have control over those investments.

Is that statement based on fact? Maybe they are talking retirement funds because lots of workers live paycheck to paycheck. Elsewhere I read thar widows control most of the money.

It makes little sense to have institutions run your life and then expect your lone voice to be heard, much less acted upon.

The Captain

Did you read the second article?

And yet, according the the article, the largest segment of the money (40%) is from foreigners.



No. Thanks!

The only way to change people’s mentality towards saving and investing is to show them not tell them. Which is why I love the idea of giving every new baby in the United States $1,000 (I’m making up a number) worth of stock in the S&P 500 that they can’t touch until they’re 18 years old (I’m making up an age). It’s not that I think this will be life changing money, but hopefully it will show them the power of compound interest and persuade them to learn more about money and investing so that they can better prepare for their future.

I’ve written several times about the need to own the productive assets of the nation specially when robots and other technologies take over most of the labor done by humans. The typical suggestion is Universal Basic Income (UBI) but I find that a flawed idea, living on charity as it takes away the forces that drive humans to strive. The baby-bond idea might be a good start.

We’re never going to close the wealth gap by bringing down those at the top. We have to bring up everyone else, especially those at the bottom.

The wealth gap cannot be eliminated without terrible unintended consequences but it can be reduced to acceptable levels, and yes, it’s by brimg the bottom up, not killing the top.

The Captain


It’s the same with individual stocks. I often see shareholder proposals to require the company to disclose who it is bribing, how much the bribe is, and why. Management’s pushback always amounts to “it’s none of the shareholder’s business who we are bribing, and why”. Same thing with proposals to require an independent chairman of the board. Management says it’s none of the shareholder’s business. Shareholder votes on management pay are merely “advisory” and management ignores the votes. If you, individually, don’t have size, you are nothing but an irritant to the management Lords, not an owner of the company, and management’s boss.



I have employment I do not discuss here. I do not work with the 401k because of this. The concept of a 401k is great on the surface but no control means so so results.

I can not expect fellow managers and coworkers to do well in the market but I wont drag down my results with by allowing so so professionals management over my funds.

The entire system is built on using labor. The user society is a form of depraved corruption.

The reason I do not bring up my employment by name etc online I then have to represent them. That is not good for me in my free time. I can only lose in doing so. There is no gain no matter what I say.

At a minimum, the 401k should be used up to the employer match. No matter how bad the fund selection is, it is difficult to impossible to overcome a ~50% initial instant return via the match (most typically, employee deposits 6%, employer deposits 3% match).


I know that MarkR that is the offer. It has not been worth it to me.

I am in position where I do not earn enough to make it worth using for most of my retirement funds. Some of my retirement funds yes if I opted for this.

With a birth defect I do not go high enough in a corporation to make the difference worthwhile.

Yet I can run my own businesses on the side. That is the difference. I have the creativity and business savvy others do not have. I could set up my own 401k but then there is no matching.

I get I can try to game out the taxes and think at least in one model I make X difference and in other models Y or Z outcomes. That does not work and is overly complicated.

I get it is easy to say at least shelter some of your savings. That will be doing. I have a Roth and later this year will probably set up a 401k. Still age 60 it is a small part of retirement funding. I get I can save more than younger people in those vehicles.

Instead it is really about raw profits and savings after tax. Dividend paying stock picks are the best thing from here.

Taking the 401k match is truly a no brainer. One of the few thigs that really is a no brainer. It is especially good if you are in a lower bracket and can use a roth 401k. That combo is literaly free money for life. Not too many offers like that out there. Like none.


Just to be clear; I don’t believe the match goes in to the 40k(Roth), it must go in to the Traditional 401k. Still, the 401k with a match is without a doubt a no-brainer!

IIRC, your 401k can then be rolled over into an IRA when you change jobs, included Roth IRAs.


I’m not 100% clear on it, but the rule may have changed recently.

“Employers can offer matching contributions to Roth 401(k)s the same way they do with regular 401(k)s. Currently, however, that Roth match has to go into a regular 401(k) account, before you pay income taxes on it. The new rule gives employers the option to let employees choose between putting the match in a Roth 401(k) or a regular one. It will take effect as soon as the overall bill is enacted.”


Thanks, I hadn’t seen that. But I’m long retired and don’t really need to know!

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There are also different amounts for the self employed. Wishful thinking but perhaps next year those amounts I will be researching with my accountant.