For much of history, for most people, getting wealthier was not just difficult; it was impossible.
In feudal societies, wealth was tied to land ownership. A small number of landlords controlled productive assets, while the majority worked that land in exchange for their basic needs. The more the land produced, the richer the landowner became. The worker, however, remained tied to the system. Effort did not lead to ownership; it simply sustained the existing order and kept workers under the landowner’s yoke.
That dynamic did not disappear with the end of feudalism, it simply evolved. During the industrial revolution in Britain, ownership shifted from land to capital, from estates to mills and factories. Yet the inequality remained; factory owners accumulated wealth as production scaled, while workers, despite being essential to that output, had little opportunity to share in the upside. Wages provided subsistence and, in some cases, gradual improvement in the standard of living, but nothing that could be called ‘quality of life’. The system continued to favour those who already held capital.
Shiny Suits, Big Mobiles & Investing for All
For much of the twentieth century, financial markets themselves were still relatively closed. Access was limited, costs were high, and participation was largely confined to institutions and the wealthy. It was not until the financial deregulation of the 1980s, and the ‘Big Bang’ in the UK, that markets began to open up more meaningfully. As suits became shinier, mobile phones looked like bricks, barriers to investing reduced, competition increased, and the opportunity for ordinary individuals to participate more directly in investing and share ownership was created, spurred on by privatisation and campaigns like ‘Tell Sid‘.
That change liberated the average worker.
Over the past 25 years, the difference between owning assets and relying solely on earnings has become increasingly clear. Global stock markets have delivered returns of roughly 7% to 9%* per year, leading to a four to sixfold increase in value over that period. By contrast, average earnings have grown at closer to 2% to 3% per year*, resulting in something closer to a doubling.
Putting that in pounds and pence: if you invested £1,000 in the global stock markets at the start of the century, it would now be worth approximately £5,000, but every £1,000 of salary would only be worth around £2,000. That’s £5,000 you’ve had to do nothing for and £2,000 you’ve worked hard for. More for less.
This gap is not a short-term anomaly; it reflects how the system works. Capital compounds. Wages tend to rise slowly.
Today, the assets are no longer fields or factories alone; they are global businesses, technologies, infrastructure and property. Yet the underlying principle remains the same. Those who own productive assets benefit from their growth. Those who rely solely on earnings remain dependent on the system that pays them.
Investing is a Virtuous Circle
Modern capital markets have created an egalitarian systems for wealth. With relatively small amounts of money, anyone can own a slice of thousands of companies across the world, from the tech titans to small, fast growing innovative start ups. Anyone can participate in the growth of businesses solving real problems and meeting customer demand, whether that is developing new medicines, building renewable energy, advancing technology or meeting ever growing global consumerism.
When you invest, your money is not sitting idle. It is allocated to companies that use it to innovate, expand and improve the products and services we all rely on. In doing so, they generate profits. Those profits are either distributed or reinvested, fuelling further growth. As an investor, you share in that progress.
Over time, this process compounds. Growth builds on growth. Returns generate further returns. What begins as a modest investment can, given enough time, become something far more meaningful.
Contrast that with a life where all income is spent, or held in cash.
In that scenario, there is no participation in the growth of productive assets. Financial progress depends entirely on continued work. The individual remains a participant in the system, not a beneficiary of it. The longer term consequence is often the need to work for longer, with less financial flexibility and security.
This is not about criticism; it is about understanding the mechanics.
It is also important to acknowledge that the gap between those who own assets and those who do not has widened over recent decades. Markets have grown faster than wages, and this has contributed to increasing wealth inequality. The richer are getting richer, but that doesn’t mean it’s a closed shop.
The barriers to entry have never been lower. Investment platforms are widely accessible. Costs have fallen significantly. Information that was once the available to large institutions is now available to anyone with an internet connection. You can even get AI to do the research (but know the limitations).
The internet itself has already reshaped opportunity. It has enabled individuals to build businesses, reach global audiences and create value in ways that would have been unimaginable a generation ago. Artificial intelligence is now accelerating that trend, lowering the cost of starting and scaling ideas even further.
In other words, both sides of the equation, investing and enterprise, are becoming more accessible.
Knowledge is Opportunity
If more people understood that investing is not speculation, but participation in global progress, the outcomes could be materially different. Greater participation would not eliminate inequality, but it would broaden the base of those who benefit from economic growth. Moving from earning alone to both earning and owning changes the trajectory of financial life. It introduces a second source of growth, one that does not rely solely on time or effort.
Over the long term, that is what creates freedom. Not just the ability to stop working, but the ability to choose how and when to work, supported by assets that continue to grow in the background.
The system has changed, the difference lies in whether you remain tied to it, or use it to your advantage. The first step may be an investment of time to understand basic principles and concepts to give you the confidence to use your money for your long-term freedom, not just day to day living. These videos are a good starting point.
*MSCI World Index and National Average Earnings Index.
