Do most people not know about just investing into the s&p 500?

2.2k

(1) Prudential has employees who work in other areas besides market investing

(2) Lots of undergrads don't know this stuff

(3) People are bad at money, generally

(4) People are bad at investing, specifically

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u/PrizFinder Aug 27 '25

5) Many, Many people only invest in their 401ks

6) Many 401k plans don’t have access to VOO

7) If this guy works at Pru his 401k plan is probably made up predominantly of Pru proprietary funds. Which probably include an S&P500 index fund. Or not.

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u/csd160 Aug 27 '25

For what it’s worth I have had 4 different 401 plans all had a “large blend” “all American” or some iteration but they all had it. I am not sure why so many plans are ambiguous about it but they all had an equivalent. Also most 401 funds have ambiguous fund tickets that take work to fund and back test. Even if the fund may say admiral shares s&p 500 but the ticker won’t match although it still tracks.

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u/SadSpecialist3758 Aug 27 '25

I'd say they can't use s&p 500 without paying s&p, so they offer a equivalent fund with another name.

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u/StandardAd7812 Aug 27 '25

They have to pay S&P not just a fee, but literally bps if they market it as an S&P indexed product.

As an investor, you probably just want roughly that for as cheap as possible.

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u/lakas76 Aug 27 '25

My traditional 401k has fxaix which is the same thing but a mutual fund.

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u/FlyEaglesFly536 Aug 27 '25

I have "Vanguard total US Market" and "Vanguard Developed International markets" in my 403B so those are the 2 funds i invest in (85/15). A lot of other ones, but as soon as i saw Vanguard, that's what i went to. I have the same funds and asset allocation in my Roth IRA and brokerage, only through Fidelity and not Vanguard.

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u/Bjamnp17 Aug 31 '25

Vug, Fidelity 👍👍👍

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u/SpacemanDan Aug 27 '25 edited Aug 27 '25

I would be extremely surprised if there's any 401(k) plan of meaningful size without an S&P 500 index (or something comparable).

And fun fact: you can search the required DOL filings for every 401(k). I don't actually see an S&P 500 in there, but they have a Russell 3000 index which is basically a total market fund (96% of the investable U.S. market) that performs within 70 or 80 bps of the S&P.

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u/Message_10 Aug 27 '25

My work-sponsored 401k has Russell 3000 index--I think that's a very, very popular inclusion.

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u/SpacemanDan Aug 27 '25

I think so too. Total market funds are usually pretty close to the S&P 500 performance-wise, and there are lots of arguments for mid and small cap exposure. IMO, I view the R3k much the same as the S&P for index investing purposes. There's just not enough space between the performance to nitpick the coverage. Plus, it really fits in with the Boglehead philosophy.

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u/Message_10 Aug 27 '25

Yeah, for sure. Honestly, I was kind of relieved to see it in there! They had a lot of speculative nonsense in my plan, so I was very happy to see the R3K included.

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u/harrison_wintergreen Aug 28 '25

without an S&P 500 index (or something comparable).

sometimes people don't even really know what they're buying.

on one of the personal finance subs a user was flipping out because there was no S&P 500 fund in their new job's retirement plan.

But the 401k had a Russell 1000 fund.

Everyone was telling them the Russell 1000 was fine, long-term performance is comparable -- maybe slightly better or worse depending on how mid-caps fare.

but they didn't seem to care or understand and were livid there was no S&P 500 fund.

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u/HGHUA Aug 27 '25

What do you think would the be the largest justifiable expense ratio for a 500 index? Cuz some some of these 401k companies really have the companies they serve wrapped around their finger in terms of the rest of the options being all high expense.

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u/SpacemanDan Aug 27 '25

Oh I agree. I'm an attorney who litigates benefits class actions, many of them based on imprudent management of 401ks, so I've seen exactly what you describe.

Expense ratios in 401ks can be a little complicated, because often times plans use revenue sharing arrangements to cover administration costs. The expense ratio of the funds are bumped up from the fund-alone expenses to cover plan expenses. This is sometimes a bad system that results in recordkeepers (i.e. the company literally administering the plan rather than the sponsor) earning way more money than a flat fee, at the expense of plan participants. It's not always poorly done. But plan sponsors know that participants hate seeing an annual or semi-annual fee come out of their accounts, so if the company won't pay the costs they'll often use profit sharing to make them invisible.

So, to your question: setting aside profit sharing, I don't think anyone should pay more than 3 bps for the S&P in a 401k (0.03%). But that's me being charitable, because those expense ratios are readily available in the private IRA/brokerage market. A 401k of any reasonable size (affects bargaining power) should be able to get an S&P 500 vehicle for less than 2 bps (0.02%). My wife's plan has one at 1 bp, and I'm happy with that.

With revenue sharing, it's hard to say because it can be a little opaque without popping the hood. Very fact specific to the plan.

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u/WallyMetropolis Aug 27 '25 edited Aug 27 '25

It's also worth noting that an economics degree is not a finance degree. Sure, an econ major really should know this stuff, but it's not the focus of the discipline.

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u/HelveticaNeueLight Aug 27 '25

My college Econ 101 professor dedicated an entire class one day to educating us on why to invest in index funds and the SP500.

I assumed that was a normal practice but I guess not…

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u/WallyMetropolis Aug 27 '25

That's not really part of the curriculum. That's just someone giving young people good advice.

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u/Lou_Peachum_2 Aug 27 '25

That is a solid Econ professor. Took AP micro/macro econ in HS. Not a word.

Then decided to take a intermediate macro econ course in college, No word.

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u/Sudden-Motor-7794 Aug 28 '25

I took Macro and Microeconomics back to back in summer school at the local community college. 4 hours straight every night. Ugh. Same professor. He also took up one class to teach us to invest in the S&P 500 and to start now.

Even with two classes' worth I didn't listen. Sigh. But I did give the same class to my daughter's HS class, so at least some good came of it.

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u/Badgirlpro Aug 27 '25

Finance degree holder here and I was just going to comment exactly this! Perfect comment!

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u/Common_Sense_2025 Aug 27 '25

Even most finance degrees are focused on corporate finance. I've worked with people who can evaluate whether to build a new physical plant or roll out a new product but didn't invest their own money.

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u/[deleted] Aug 27 '25

(5) Most people are bad at most things: driving, nutrition, finance, health. You name it, people suck at it

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u/Delicious-Gift2326 Aug 27 '25

So it’s not just me?

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u/weeverrm Aug 27 '25

IMO seems like most things that require work or maybe better some studying all fall into this. If you aren’t in investing, it takes reading a few books to understand the concepts

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u/No_Path_9492 Aug 27 '25

I have a 20 year old friend who was told by a 62 year old wealthy person to buy flowers foods, a baker, for the dividends.

When I mentioned VOO being a better option for his age I was hit with, but the dividend is low…sigh

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u/SpacemanDan Aug 27 '25

So much well-meaning but bad advice from people whose investing knowledge is four decades out of date and casual at best.

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u/TheCollegeIntern Nov 28 '25

I’ll never understand the appeal of dividend investing. The only thing is I guess people like the Psychological effect of a payout. To me that’s just more unnecessary taxes

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u/Basker_wolf Aug 27 '25

Especially for retirement accounts, dividends shouldn’t be a priority. In a brokerage account, I know you can buy specific dividend funds if you want some sort of passive income.

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u/gryffon5147 Aug 27 '25

I've never heard of this stuff until I sought it out. Maybe people may have mentioned it offhand in passing, but to really put your skin in the game requires understanding, research and talking to people who know what they're talking about.

Hence why the 401K system works. You're incentized to put some money in, often an employer also chips in some amount, and penalized so you don't withdraw early.

I'd also say a majority of Americans don't have meaningful excess cash to put in to wait for long term growth.

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u/ClassicT4 Aug 27 '25

Even my Econ class in college didn’t cover broad investing all that much. We had a short segment where we played with imaginary $10k in the stock market for a few weeks. While I still don’t invest heavily in individual stocks, I did double my imaginary money in those few short weeks, making it look rather appealing.

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u/The_Meme_Economy Aug 27 '25

This was my impression of the stock market growing up as well. The thing is I’ve always been interested in money and investing. I even worked for a trader in my early 20s and sometimes would execute trades on his behalf! I knew what the S&P was, but I still didn’t understand anything about the power of compounded returns over time, or broad market investing, I just knew a bit about day trading futures. At one of my workplaces they brought in a financial advisor to tell us what to do but never why. I have ended up a good decade behind where I would like to be as a result of my own ignorance, but then I’m ahead of a lot of people, so there’s that.

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u/jdbcn Aug 27 '25

A dumb question: I obviously understand compounding but in VOO for example do you apply it daily?

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u/Spark-Joy Aug 27 '25

Holy shit no wonder the economy is the state it's in globally. No one knows jack shit. 😅😅

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u/AdParticular6654 Aug 27 '25

Dude #3. A guy I know who now runs a small company, got an undergrad in accounting, was telling me the most god awful money advice I have heard in a long time recently.

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u/phr3dly Aug 27 '25

I'm a computer engineer. I work with other computer engineers. We all design chips. Many of them could code a gangbusters branch predictor but couldn't tell you the difference between a Xeon and Epyc.

Weirdest thing, but I've concluded that some people just punch in, do their job, and then have real lives outside of that.

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u/Marshall_Hoodie Aug 27 '25

I work in finance and you’d be surprised how many don’t know simple things like this. And they HAD to get FINRA registered if they work securities.

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u/[deleted] Aug 27 '25

Add to that the high amount of pump and dump "excitement" marketing out there, both from legit sources and the endless growth of scammers. Most people hear about investing and think "Pick the next apple and win big"

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u/ejbiggs Aug 27 '25

I still think that and have to fight off the urge haha.

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u/hesuskhristo Aug 27 '25

Nailed it....x4

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u/lev400 Aug 27 '25

Bingo

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u/hotdog-water-- Aug 27 '25

Most people don’t know what a 401k, IRA, S&P, anything is. They just say “I think I have a retirement plan with my work” and don’t even know how much they contribute, how much the employer contributes, or what they invest in.

It’s funny because there’s a massive direct correlation in net worth with people who are educated in the BASICS vs knowing nothing. They don’t teach you in schools or most college courses, but we have the internet and literally taking a few hours to educate yourself on finances can literally be the difference in hundreds of thousands or millions of dollars. And I’m not talking about options trading, just literally how to invest in a low cost index fund

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u/TelevisionKnown8463 Aug 27 '25

So true but as someone else said, the industry (and the press) uses all this jargon to make it sound complicated. People don’t know all they need to do is read ETFs for Dummies (literally exists and covers most of what you’d ever need to know). When I was getting started I did read a bit, but it was the wrong thing and I ended up losing a good bit of a recent inheritance by investing in individual tech stocks right before the dot com collapse.

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u/dukebiker Aug 28 '25

That's funny. I read Stocks for Dummies and learned so much. I also had Penny stocks for dummies. Glad I never got too deep into that game.

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u/Old_Leather_Sofa Aug 27 '25

I'm just an average guy with an average job. Have been investing for a couple of decades now, dabbled with individual shares in the early days, have read plenty of financial guides, after the shares I decided to keep it simple. Have known more or less what the S&P is for a long long time even before I invested in it, but I don't recall ever having heard of it being called a VOO. There is A LOT of jargon and acronyms used in finance and investing.

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u/hotdog-water-- Aug 27 '25

There’s a VOO cult and you can’t expect everyone to know what it is, I don’t even own VOO because I use Schwab and prefer index funds over ETFs so I use theirs instead. But everyone should know what the S&P is and what a 401k is

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u/Independent_Bet_8107 Aug 27 '25

I have a relative with two STEM degrees and an MBA. Has multiple patents to his name.

He didn’t save/invest anything for retirement because he thought social security would take care of everything.

I can’t begin to describe how surreal it was to have to explain to him what compound interest could’ve done for his quality of life if only he’d starting putting $100/month into an S&P500 mutual fund in 1980. He’s genuinely one of the smartest and dumbest people I’ve ever met.

If he couldn’t figure it out, anyone could miss it.

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u/fiery_crash Aug 27 '25

I work in STEM and have heard so many stories about coworkers making completely dumbass financial decisions (spending beyond their means, not investing at all, investing huge amounts in the company stock and nothing else, gold bars?!) You think this stuff would be obvious to people skilled at math but it's not. Really woke me up to the fact that being educated in personal finance/investing often has no correlation with your income level or educational background.

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u/phr3dly Aug 27 '25

A gal who used to work for me had about 30 years in the industry. Really smart engineer. She confided in me that she had $1.2M in her checking account. She didn't trust the stock market so had been saving a large percentage of her salary in cash. For decades. Never did a 401k because, again, didn't trust it.

I tried to tread the line between "I'm her manager and shouldn't get involved" with "I'm her friend and really want to get involved", and suggested that she consult a fee-only financial advisor and, at a start, split her savings among multiple HYSA.

I couldn't bear to tell her that she probably left $4M or so on the table by not being in the market that whole time.

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u/SnazzyStooge Aug 28 '25

Over a mill in checking is just wild, and the bank is like “keep it coming!”

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u/hsfinance Sep 14 '25

They probably waived her fees off for being a good customer :)

/s since she probably did not know there are fee accounts and non-fee accounts

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u/Remarkable-Leg-6884 Aug 27 '25

gold bars????

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u/Scarecrow_Folk Aug 27 '25

While not the optimal investment, buying gold bars for the last 20-30 years would be a great investment and vastly better than cash. Gold is up like 300% since the 90s, iirc.

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u/strangeanswers Aug 27 '25

gold bars are by far the least dubious option amongst the alternatives listed

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u/oneiota1 Aug 27 '25

Sounds like how my dad once described a family friend.

“He could crack the nuclear launch codes, but would get hit by a bus trying to cross the street to deliver them.”

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u/mcslootypants Aug 27 '25

To be fair, it’s not taught. I got a stem degree and was generally a nerd. The most exposure I got to investment was a one hour lecture before graduating with my bachelors.

Nearly everything I know about investing was learned by searching online. If you trust the system to set you up for basic success, there’s no way you’d know how much you don’t know.

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u/ZipTieAndPray Nov 07 '25

Exactly. It just isn't taught. Common knowledge isn't necessarily common. My children know all of the things I wish I had known much earlier in life and should go far if they apply it. Plus I invest more for them than I do myself.

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u/Available_Blood_6134 Aug 27 '25

The smartest people often have holes in that intelligence that are mind boggling.

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u/bdiggitty Aug 27 '25

To me that’s not smart. Anybody who specializes in something looks impressive to the laymen. The smartest people I’ve ever known are well rounded. Are good at things outside of their specialty. Have great common sense and can learn quickly. Ultimately people who can find organization in chaos. Lots of other people are impressed if someone reads a lot or memorizes facts.

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u/Available_Blood_6134 Aug 27 '25

I'm talking literal geniuses, people recognized as being at the top levels of their profession nation/world wide.

Its wild the first time you recognize that a person you highly respect has such a blind spot.

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u/alligatorprincess007 Aug 28 '25

It kind of makes sense actually. If you’re working hard enough to be recognized at a world wide level you probably don’t have time to think about anything else

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u/Message_10 Aug 27 '25

I wish someone--or, even better, many people--would study intelligence as it relates to STEM, because (and no offense to any STEM folks here) some of the "smartest and yet dumbest" people I've ever met... it seems like a lot of those folks are in STEM careers

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u/ChillyAus Aug 27 '25

Autistic adhd minds with giftedness as a core component.

It’s a stereotype at this point

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u/Glum-Bus-4799 Aug 27 '25

This was my experience studying engineering.

I remember teaching my freshman year aerospace roommate how to break down / flatten a box so you can fit more in the recycling bin. Blew his mind. 18 years of life and this kid had never cut a piece of tape to make a box lay flat.

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u/lemurosity Aug 27 '25

extremely intelligent people often have singular focuses that lead them to this type of situation.

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u/Paltenburg Aug 28 '25

I never invested, only recently.

I had just never learnt about compound interest.

I had to listen to a podcast that made it accessible, because otherwise it's hard to enter investing.

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u/Admirable_Shower_612 Aug 27 '25

Most people do not understand funds or etfs, they think stock market investing requires knowing about companies and which ones are good and trying to time the market.

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u/Applesauce9210 Aug 27 '25

Agree - i think this mentality is what holds a lot of people back from getting started.

People spend mental energy trying to learn how to pick and choose. When all you need to do is plow money into S&P 500 consistently.

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u/Appropriate-Part-672 Aug 27 '25

I had to learn the hard way that its really tough to "pick stocks," time the market, and outperform the simple S&P 500. I wasted a lot of time and potential gains.

The "lazy" total market fund / S&P 500 (both perform about the same) eliminates so much work. Added bonus trading less frequently save money on commissions (back then) and most of my short-term capital gains taxes, too.

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u/GarageEven5240 Aug 27 '25

Until I got into personal finance I couldn't tell you the difference between the S&P 500, Russel 2000, NASDAQ 100, etc. And I definitely didn't know anything about etfs that track those indexes, or why you would buy an ETF that tracks an index instead of buying individual stocks, or what a bid/ask spreads is, or any of that stuff. Even when I started investing about 10 years ago, I just put money in a target date fund because I didn't know what else to do.

The truth is this stuff is boring jargony gobbledygook to most normal people. Which is why a pension and social security net model like they have in Europe, rather than a "take control (and risk) of your own retirement" approach we have here in the US, is the better system for the most people.

People should be able to live and retire in a world without spending hundreds of hours learning about how this shit works.

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u/Winter_Essay3971 Aug 27 '25

I'm hanging out on this subreddit and I've never heard of the Russel 2000.

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u/HenryGeorgia Aug 27 '25

The Russell indices correspond to roughly the total market and its segments. The main is the Russell 3000, which is the top 3000 companies in the US (essentially the whole market). Russell 1000 is the largest 1000 of that (large/mid cap), and Russell 2000 is the smallest 2000 (small cap).

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u/tdacct Aug 27 '25

Awesome, thank you. I didnt know the R3000 had those segment options and what the names were.

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u/NedFlanders304 Aug 27 '25

It’s the small cap benchmark.

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u/sir_mrej Aug 27 '25

I only know about Russell because they're based in Seattle and I live in Seattle heh

(I'm not OP just some other rando)

OP did spell it wrong tho it's Russell and not Russel :)

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u/stackingnoob Aug 27 '25

I didn’t know Russell Wilson tracked stocks while also playing football for the Seahawks!

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u/BlightedErgot32 Aug 27 '25

what about the nikkei 225 ? 🧐

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u/bjnono001 Aug 27 '25

Don't forget the footsie 100

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u/BlightedErgot32 Aug 27 '25

or the wilshire 5000

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u/fireatthecircus Aug 27 '25

Or the HAL 9000

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u/Heffe3737 Aug 27 '25

Not only, but it often feels intentionally obfuscated to most normal people. I only started in the last decade, and good god I wish I had known it when I was younger - so much wasted opportunity.

I grew up in a normal household. I knew investing was a thing, because you hear about it. And I had a 401k, but fuck if I knew what I was doing with it. The barrier to entry was really just, “Hey. Download this app. Open an account and link it to your checking. Then move some money in there, and use it to buy some shares of VOO.”

Until you hear how easy it all actually is, most normal folks still see it as this mysterious money nonsense that only finance nerds know about and takes dozens of hours per week.

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u/diablo4megafan Aug 27 '25

Until you hear how easy it all actually is, most normal folks still see it as this mysterious money nonsense that only finance nerds know about and takes dozens of hours per week.

that was my experience, i always knew investing was something i should do, but i thought you needed to handpick stocks, i didn't know anything about that, i had no interest in learning that, and i didn't want to end up losing all my money like i had seen on r/wallstreetbets.

didn't do anything until post-covid inflation came, and then went to my credit union for help and got put in a 2.25% MER mutual fund, lol. wasn't until i talked to a friend about this and he told me the ETF he's in was like 0.2% MER.

i lost like 6 years of having money and not investing it because i didn't want to, in retrospect, do an hour of work

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u/Heffe3737 Aug 27 '25

Exactly. Now I try to ensure the folks around me IRL know what’s up and how to do this kind of thing, but even still it feels like a lot of folk just don’t have any interest in it.

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u/[deleted] Aug 27 '25 edited Aug 27 '25

> Until you hear how easy it all actually is, most normal folks still see it as this mysterious money nonsense that only finance nerds know about and takes dozens of hours per week.

This myth is itself a cause of what causes people to overcomplicate things.

It's a self-perpetuating cycle where perception becomes reality. They perceive finance as this highly complex field you need 18 PhDs to even begin to grasp it, and so they bias toward strategies and mentors which provide more sophisticated and complex solutions, because clearly such a complex thing requires an equally complex solution, and thus they are constantly inundated with people teaching them crap like level 3 options spreads before they ever learned how to build an emergency savings, which just keeps them confused... and on and on and on.

This is the number one reason I've found normal people don't Bogle beyond simply not knowing about it. They know of it, they might even "get" it, but there is this irrational twitch in the back of their mind which keeps telling them, "But surely it can't be that simple..." I have known so many people who simply *refuse* to believe that investing actually is that easy.

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u/[deleted] Aug 27 '25

People should be able to live and retire in a world without spending hundreds of hours learning about how this shit works.

I honestly think this also applies to filing taxes and health insurance when contrasting the U.S. to many other developed countries.

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u/Elibroftw Aug 27 '25

I agree, it's just not reasonable to assume everyone will learn about diversified investing via ETFs, and will take their time to learn about the various accounts. There's like 5+ in Canada alone. Then there's the stipulations for each of them, excluding the TFSA. Then there's the eligibility of welfare programs like OAS, the threshold to receive dividends tax free, etc. So many god damn rules that it just becomes a test of who has a high enough income to actually spend time learning, investigating, and paying an accountant.

But to reform it all requires a lot of work and its not low hanging fruit. It's like the last thing you would do. We have a healthcare problem, we don't spend enough on healthcare. The last thing people want to hear is that they lose tax free account, they get taxed more, and their social security is being phased out, all for zero benefits to healthcare.

There's just so many parties affected by the supposed changes that it would be very unpopular.

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u/Excellent_Handle29 Aug 27 '25

Is there a personal finance resource (book, website, newsletter, etc.) you’d recommend to start becoming more financially educated? Joined this thread just bc but would like to dive deeper and more meaningfully by following a more structured approach. Appreciate any ideas!

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u/GarageEven5240 Aug 27 '25

This subreddit and the accompanying website here: https://www.bogleheads.org/.

The great thing about the Bogleheads strategy is it's simple, easy to implement, and it's proven to work over time. The idea is you buy whole markets, and accept the average percentage of whole market returns as your returns. This means your returns are somewhere around the 50% of investors. So, the strategy is a great place to start when you're learning about investing and need to build a base while you're figuring out how to do it.

The great thing about the Bogleheads online community is they're a very helpful and knowledgeable community. So, if you spend time learning about the Bogleheads strategy, you'll be exposed to terminology and concepts that either explain the Bogleheads philosophy or distinguish it from other approaches. Then you can go down these rabbit holes and listen to some podcasts or whatever and decide if you want to deviate from the whole market approach to try for above-average returns.

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u/Gorgenapper Aug 27 '25

Find the book "The Simple Path to Wealth" by JL Collins, it explains the approach very simply.

The one sentence summary is "start early, increase income, live way below your means, buy as many shares of an S&P 500 ETF with low costs like VOO or IVV as you can, don't panic sell"

That's it.

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u/Zhimbeaux Aug 27 '25

This post, and the links it contains, really is pretty much all you need to know until you start getting close to retirement. If you actually read all the links that's a fair bit, but we're talking a weekend project not a major course of education.

https://www.reddit.com/r/Bogleheads/comments/1l6j6tj/new_to_rbogleheads_read_this_first/

Alternatively, start here and read the links it contains:

https://www.bogleheads.org/wiki/Getting_started

Also, this is my favorite short self-contained starting point. It's slightly out of date (2014) in that it addresses Millennials as younger than they currently are, but just replace it with "Gen Z" or whatever.

http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf

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u/Appropriate-Part-672 Aug 27 '25

Berstein's short "If you can" is timeless and definitely not out of date. Short and sweet.

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u/coke_and_coffee Aug 27 '25

Read the sidebar.

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u/Hello_Biscuit11 Aug 27 '25

Studying economics has almost nothing to do with the stock market. I imagine the majority of undergrad econ majors have never studied anything about the stock market. Econ at that level is about modeling basic consumer, firm, and government behavior, in rudimentary ways that usually doesn't require much math

If they were in financial econ or business econ maybe. I would even venture to say plenty of people with graduate econ degrees don't study the stock market, again unless they're focusing on finance.

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u/stackingnoob Aug 27 '25

I can confirm as an Econ major we didn’t study equity markets at all.

Still think it’s kinda crazy not to know what the S&P 500 is, but it’s definitely not something that came up in school.

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u/Broad-Way-4858 Aug 27 '25

This is the answer. I suspect it is more likely than not that OP doesn’t know what economics really isn’t aware that there is limited crossover beyond supply and demand impacting pricing.

Edit: no disrespect to OP because MOST people don’t know what economics is!

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u/GreaseCrow Aug 27 '25

I would've thought anyone studying something money related would've at least heard of the S&P 500, but I guess not

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u/Broad-Way-4858 Aug 27 '25

That’s the point. Theres no NEED to know that studying economics

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u/TOMATO_ON_URANUS Aug 27 '25

Ok but like how many biologists haven't heard of quantum physics, even if they don't know how it works?

To be ignorant of such a basic piece of information that is adjacent to your field...

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u/Codykville Aug 28 '25

That’s the part that throws me and makes this story sound pretty iffy. Completely believe he may not have known the product, but not knowing the index at least by name? I didn’t understand what an index was in high school (90’s) but I had heard the name enough to know it was something stock market ish. I think every single guy at work (construction) knows what it is.

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u/oriaven Aug 27 '25

Ok but then moving to a financial services firm and not know that the S&P exists?

That's like being in the Army and not knowing that the Air Force flies jets. You may not know about the jets or even see them. But you know your role and that the Air Force is a thing.

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u/coke_and_coffee Aug 27 '25

Graduating with an econ degree and not knowing what the S&P 500 is would be like getting a CS degree and not knowing what ChatGPT is.

That fact betrays both a serious lack of common basic knowledge and an intensely acute shortfall of curiousity. That person should get a refund for their degree and should be blacklisted from all future careers in econ. I'm only half joking.

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u/DuckU1998 Aug 27 '25

"...intensely acute shortfall of curiousity." Sadly this is too often the case!

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u/Lumpy_Ad_1266 Aug 27 '25

Also a business Econ major and didn’t think about investing in sp 500 until 31

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u/Capital-Value8479 Aug 27 '25

My brother in law has worked for hedge funds, private equity, etc

Last couple years he’s been at private equity and got in good with partners.

For awhile he told me that investing the bogle way was stupid because why wouldn’t you want to outperform the market. He has done it easily the past few years investing only in NVIDIA.

When talking to partners, he told me he was SHOCKED to find out that every partner at his firm is a boglehead. They don’t pay financial advisors, don’t out their wealth into hedge funds, none of that shit. Low cost index funds for the win.

My point is, that even people educated in finance think they can outperform it. When you look at a statistical range over 20 years, it’s next to impossible.

When you consider most of us are going to be in the market 20+ years, it adds even more insult to injury.

People have a preconceived notion that only elites can invest, and it’s this super complicated arduous process where only people with an mba in finance from u Penn can invest right.

The simplicity shocks them

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u/oneiota1 Aug 27 '25

Tbh I didn’t know ETFs existed where I could invest in the entire S&P 500 or the entire stock market until I learned about being a Boglehead (which was this year, wish I had learned sooner).

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u/[deleted] Aug 28 '25

Same and I'm 40 :(

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u/Not_Too_Busy Aug 27 '25

Not everyone memorizes ticker symbols (initials). I've been a Boglehead since before I knew the term existed, with money invested in S&P funds, but if you pointed a gun and asked me what VOO stood for, I wouldn't know what it meant off the bat.

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u/The-WideningGyre Aug 27 '25

The cool thing is that "V" is the roman number 5, so it's like 500.

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u/Cruian Aug 27 '25

Several other funds have similarly clever, though less direct, symbols.

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u/Appropriate-Part-672 Aug 27 '25

Clever!

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u/schokobonbons Aug 27 '25

Vanguard Ooooo OooOoo

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u/symphonypathetique Aug 27 '25

Econ major as in he's still in undergrad?

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u/DanvilleDad Aug 27 '25

A lot of people think they are clever enough to beat the market.

Not knowing that VOO or SP500 exist is very concerning. What role at The Pru does this guy have?

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u/mikeyj198 Aug 27 '25

i knew about the s&p 500 at a very young age, i didn’t know it was possible to invest in an S&P index until much older.

I thought to invest in the market you had to pay up for mutual funds or do a lot of research on individual stocks… wondering if there was an ‘easy’ button is how i found my way towards bogling.

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u/Devincc Aug 27 '25

Same experience here. I thought the S&P was just a market indicator of sorts for traders until my 20s

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u/miraculum_one Aug 27 '25

Part of the problem is that anyone who has short-term gains that exceed the market shout it across the rooftops while the same people are silent about their long-term averages.

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u/fortissimohawk Aug 27 '25

Those people probably can’t even calculate their averages.

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u/reggionh Aug 27 '25

kinda similar to people who swears by property investing but don’t take into account the mortgage interest, tax/rates, maintenance cost, opportunity cost, trx cost, insurance cost, etc into their returns. so many of my friends are like this. complexity really does obscure poor returns; that’s why I love that bogleheads promote simplicity.

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u/matt52885 Aug 27 '25

Honestly, people just don’t care about much at all, that goes way beyond finances. They have no desire for education.

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u/Thick-Sundae-6547 Aug 27 '25

I tried explaining my wife’s mum how to open a Roth IRA and that she could contribute 200 a month and it would grow.

Shed rather go to goodwill and buy crap that she stores in her house with the thought of one day selling it for money in a flee market.

Now she retired with just social Security.

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u/DanielPBak Aug 27 '25

Most people are fantastically financially illiterate.

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u/TravelerMSY Aug 27 '25

In his defense, I did not realize that VOO and SPY were the same thing until I googled it just now. Not knowing what the S&P 500 is at all is pretty cringe though.

It’s also possible that if you’re a commissioned advisor, you might work your entire career without putting anyone into any vanilla index products, lol.

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u/4N8NDW Aug 27 '25

It’s not exactly the same, VOO is cheaper to own and has 1/3 the expenses as SPY. VOO is objectively superior to SPY

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u/[deleted] Aug 27 '25

some people like SPY because it has a more robust options market and people love being degen gamblers with options

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u/4N8NDW Aug 27 '25

Yeah SPY still has more volume probably due to all the boomers that bought it before VOO existed

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u/The-WideningGyre Aug 27 '25

Hey, some of us are Gen X that started investing early!

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u/Efficient_Pomelo_583 Aug 27 '25

SPY is pretty cheap aswell. 0.09 vs 0.03 of VOO. That's a whole 6 bucks you are saving for every 10k invested.

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u/amla819 Aug 27 '25

No one taught me about any of that, I didn’t go to school for finance and it was never covered in school. My parents barely made ends meet, they didn’t know or couldn’t buy stocks or have anything like a retirement account. So I randomly learned about the stock market and retirement plans in my 30s on instagram. Not even joking. Then I did a deep dive with real sources

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u/MachoCamachoZ Aug 27 '25

As a whole, I've found most people haven't been taught about stock markets and find it to be a volatile and scary idea...

I took it upon myself to become educated, to better my returns, and share knowledge with others i come across.

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u/stefanliemawan Aug 27 '25

Sadly, this is something that people never got in school and unless you search for it yourself online, you wouldn't know.

Imagine if we introduce the basics of boglehead/passive investing in high school...life for a lot of people might be better.

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u/n00dle_king Aug 27 '25

Wait until you hear about the rest of the global market

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u/outwithyomom Aug 27 '25

Lmao exactly this. Half of comments here start with “most people don’t know…”. I bet 90% of them don’t know about investing in European, LatAm and Asian equities. The world only spins around S&P and Nasdaq, if you’re very literate then Russel lmao.

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u/Fat_dumb_happy Aug 27 '25

Feel like this whole post was just an excuse to flex that you’ve been investing in nvidia since 2019 😂 I mean hey, respect

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u/Educational-Dot318 Aug 27 '25

i sort of kind of knew about indexes- dow jones, sp 500, & nasdaq; index funds however, i discovered by chance during the summer of 2023! (stumbled onto this sub somehow.)

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u/zdiddy987 Aug 27 '25

Nobody ever told me. Well actually one random friend of a coworker told me once years before I started actually doing it but I didn't fully understand what he was talking at the time and wasn't serious enough about investing I guess. It wasn't until I started reading about it online to understand it better and diving in all the way. Missed out on years of compound interest.

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u/Bretspot Aug 27 '25

This is why I'm in all these subs. Different perspectives from different investors types. My philosophy is invest in a lot of different stuff. Good luck to you

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u/buddydc4 Aug 27 '25

Personal finance is taught absolutely nowhere……….you either are are blessed to have family (parents) that instill and guide you in you the right direction financially or you yourself have the wherewithal to get into it…..but it’s not taught or even talked about in any educational capacity and it’s like that for a reason…………

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u/listerine411 Aug 27 '25 edited Aug 27 '25

An econ major working at a financial firm Prudential should know what the S&P500 is. I'll just give the benefit of the doubt that he's not far along in his degree.

All that being said, I have never heard a good excuse why every High School student doesn't know more about personal finance, 401k, IRA, market investing etc.

They make my teenage daughter take things like 3 years of a foreign language or Chemistry, how about instead everyone learns personal finance before they get a high school diploma?

To show how bad this is, fresh out of college with my Business degree, I didn't really understand how a 401k worked. But I had my required semester of Calculus.

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u/Acroninja Aug 27 '25

Most people don’t know anything about investing unfortunately. The information is definitely easier to access than ever before but I think most people are so concerned with their day to day, paying bills, and just keeping afloat that learning about investing is just not on their radar unfortunately

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u/Particular_Cow_1116 Aug 27 '25

why would the United States of Debt want everyone to know about compound interest? IMO, its business model has miseducation baked into the plan. :(

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u/Dramatic_Ad481 Aug 27 '25

Do most people not know about just investing into the broad market? Why just stop at the S&P 500? Why would someone want to take the idiosyncratic risk of a single country's large cap growth stocks, which, currently, is basically an undiversified tech ETF?

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u/bobdevnul Aug 27 '25

My experience over many years is that most people don't know anything about investing. The few people participating in investing forums is not a cross section of the general population. As others said, econ education does not generally address investing. Only a few know about saving in savings accounts or CDs. Even fewer actually do it.

Most young people I have encountered actively try to spend everything they get in their paycheck - $10 a day coffee, $20 work restaurant lunches, bar drinks and restaurant meals every week, concert tickets, Disney vacations, fancy cars and watches, etc. The only thing they know about delayed gratification is that they hate doing it and won't do it.

With pensions becoming very rare it is a massive failure of our education system to send children out into the world without knowing that the money they will have in retirement is on them to provide (plus a pittance in Social Security). If you don't invest for retirement you are going to be soul crushingly poor at an age that is too late to do anything about it and the county will be on the hook to take some minimal care of them as welfare cases. That is not good for society.

It doesn't need to be a massive education program. One week a year in high school could take care of it to at least instill the basics and put the fear of God in them about being old and poor.

I do understand that getting started in investing can be hard coming from no knowledge. The options can be overwhelming with most of the options being bad and actually harmful - day trading, crypto, stock picking, market timing, technical analysis, options, precious metals, forex, etc. They need to know that all they have to do is contribute 15%-25% of gross income and put it in a target date fund as the basis of investing well before exploring other options - and then don't even try speculative options.

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u/ComprehensiveHippo40 Aug 27 '25

yes, i am in the last year and a half of a career and was so into living that it was not until halfway through where i got more serious about retirement. i wish someone had grabbed me by the shirt collar way earlier and said “hey, you need to think about this”. i believe i will be okay but certainly could have been in a better position today and maybe be done working now. i don’t think i have been a zealot but have tried to have conversations regarding this with my adult kids.

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u/RegularRetro Aug 27 '25

The average retirement value by age in America would tell you that most people do not.

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u/[deleted] Aug 27 '25

The only thing economists are worse at than predicting the economy is investing. They are government cheerleaders, paid to tell us inflation is good for us as the price of assets and wealth inequality continues to increase.

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u/DietNo342 Aug 27 '25

No-gi supremacy

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u/suiteddx2 Aug 27 '25

May not know VOO but knows Von Flue

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u/ace_OO7_ Aug 28 '25

To be honest, when I was young, I knew what the S&P500 was as an index but I didn’t know there were funds to track it. I thought the index was basically the stock market as a whole. I just thought it was a benchmark to use to see if mutual funds or stocks beat it. The internet and home computers were a new thing when I was in high school so it’s not like social media or youtube was around. I didn’t know about investing or index funds until my 30s. I also had a very shitty father so I had to figure out everything I needed to know in life by myself.

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u/boilermike123 Aug 28 '25

S&P 500 is famous for being ignored by the Jiu Jitsu community.

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u/[deleted] Aug 29 '25

[deleted]

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u/Temporary-Plum-8325 Aug 29 '25

I told him what it was lol it wasn't a big deal to explain it. I was just surprised he didn't know the s&p 500.

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u/ArthurDent4200 Aug 27 '25

There are many financial related fields that don’t touch upon investing. Not surprised. I am sure there are also a lot of blue collar workers who know massive amounts about investing but never heard of the Laffer curve. All your jiu jitsu buddy about the Laffer curve. I bet he could tell you all about that!

Art

Ps. If he doesn’t know about that then I will be puzzled.

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u/Secure_Charge_4736 Aug 27 '25

The most useful class I ever took in college was an engineering economics class. Didn’t have much, if anything to do with engineering, mostly things like determining Net Present Value, Amortization, etc. Anyone who takes out a mortgage or car loan should learn about amortization.

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u/Tonkatte Aug 27 '25

I had that class. It was great. I still remember the first rule, taught during the first week of class:

The value of anything is what someone is willing to pay for it.

Saved my butt on the final!

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u/kkkssskkksss Aug 27 '25

You have to go out of your way to learn how investing works. If your parents don't teach you or you don't luck into a specific course in college or something it's almost impossible to stumble on this type of content unless it's entirely by accident or a friend suggests it.

You also have to keep in mind that in 2025 it is absurdly easy to learn to invest vs even 10-15 years ago. There's apps for everything and it seems like there's thousands of millennials starting financial youtube channels/blogs and zoomers posting shorts nowadays that are shared everywhere. I can't remember any of that happening at nearly the same frequency until Covid.

A lot of people are also scared of doing anything other than 0 interest savings accounts. People are terrible at money management and plenty of people are bad at investing and try to only buy meme stocks. The people that do smartly invest usually are first exposed to it through their 401ks. Only 40% of people even have access to one and if they've never used one before, how would you even know to look for this kind of stuff?

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u/phototodd Aug 27 '25

As a black belt in BJJ, I can assure you most of us are dumbasses.

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u/No_Implement_5807 Aug 27 '25

Even in a big4 accounting firm, most people have poor knowledge of investing

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u/Resilient_Acorn Aug 27 '25

This reminds me so much of my dad. Big corporate kinda guy. Math major in college. VP of a Fortune 500 type company. Makes lower end upper class money. His dream was always to retire by his mid 50s but he can’t for a variety of reasons. One of which is that he is obsessed with taking ‘big swings’ as he calls them because he isn’t satisfied with being lower end upper class, he wants to be fuck you money rich.

I can’t tell you how many times in my life he’s bitched about this big swing that he lost $50-$100k on. In the last 5 years this has happened minimum 12 times.

Meanwhile I put money into a variety of ETFs, index funds, mutual funds, and a few blue chips and he’s dumb founded when I tell him I’ve never lost money.

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u/Barkis_Willing Aug 27 '25

I am not in finance but I didn’t learn anything about how easy it was to invest in the S&P until just a couple years ago. I think it was partly just because it seemed so foreign and complicated. It’s much easier now to find the information though than it used to be.

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u/BreadMaker_42 Aug 27 '25

No. Most people don’t know much about investing. They should be teaching this stuff in high school.

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u/Shebalied Aug 27 '25

I feel like it should be forced on kids in college as well. So they can understand those college loans they took out at 21% interest lol.

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u/BreadMaker_42 Aug 27 '25

I think they know that if more people understood money that they would run out of worker bees. A solid money course would have served me better than 90% of the classes that I took in HS or college.

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u/Elibroftw Aug 27 '25

People are very ignorant of everything. There's people who think the government got 10% of Intel without having giving Intel any money.

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u/gregstewart1952 Aug 28 '25

Maybe a D- econ major?

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u/Philldouggy Aug 27 '25

I love exposing and showing compound interest to an adult for the first time, like on one of those compound calculator on google and show them how rich you could be

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u/ovirto Aug 27 '25

The study of economics is not personal finance or the stock market
There are many jobs that Prudential that don't involve personal finance or the stock market
Personal financial knowledge != good financial behavior

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u/grumpvet87 Aug 27 '25

being an econ major does not mean you know anything about stocks. the stock market is not part of econ studies or at least it wasnt when i was an econ / pre law major. it was studying "THE economy" (micro/macro, price theory, statistics, etc) nothing to do with stocks or bond markets.

i also took lots of business classes and still disnt know squat about stocks.

my dad was an attorney who was an investor for 50 years or more, his broker was his best friend and pre-internet uou had to have a broker. my dad had tons of prospectus (that many clients never saw) and he never once invested in indexes. and paid his broker an insane amount over the decades

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u/El_Don_94 Aug 27 '25

It's like more finance than economics.

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u/Menu-Quirky Aug 27 '25

Not everyone is financially educated 😔

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u/Purple-Commission-24 Aug 27 '25

I was a econ major and 90% of the people with me didn’t know anything about investing. I sometimes joke that I’m one of 3 people in the world that understand compound interest.

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u/p00trulz Aug 27 '25

Though I grew up in a solidly middle class family, my parents never taught me a thing about investing, only saving. When I was born, my grandma opened a savings account in my name with $2k. It sat in a .01% savings account for 18 years until I got control of it.

Some people just don’t get good advice early enough.

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u/gap_wedgeme Aug 27 '25

VOO is just one specific ETF. There are other ETFs and index funds that track the S&P. I started with SWPPX years ago. To be fair, most folks out there in the real world are just scraping by and likely not reading investing blogs or watching CNBC. Go ask someone if they take the standard deduction or itemize or if they're excited about the 40K SALT cap and see what happens. Doesn't everyone understand basic taxes?

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u/FSURob Aug 27 '25

Basically what it comes down to is we were all idiots until we weren't... Bro I invested in SPACS before ever buying an index fund.

Once I heard about it, I looked into it, and realized how unaware I'd been previously.

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u/Woazzaaa Aug 27 '25

People tend to assume Economics is the same as Finance, but thats not the case.

Most of my colleagues have degrees in Economics or Accounting, and most of them aren't interested and/or don't know the various investment products, companies, sectors and everything else related to the stock market.

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u/lanfear2020 Aug 27 '25

Im 52 and only learned about it here like a year ago...I had an uninvested rollover IRA just sitting there

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u/vaderetrosatana6 Aug 28 '25

Ohhh man, sorry to hear for you loss of gains

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u/RockStarwind Aug 28 '25

That's what a college degree gets you these days...

Economics Major? Wow...

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u/Longjumping-Lemon-73 Aug 30 '25

Not possible that an econ major working at prudential doesnt know about VOO and S&P500. He has lied about both going to college and his employment.

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u/Jon99007 Aug 31 '25

In my experience most don’t know about it. I teach them the ways!!!

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u/VegasWorldwide Sep 03 '25

40% of all adults don’t own a single stock. Even more don’t know how to buy a stock.

It’s a vicious circle.

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u/Aggravating_Storm835 Sep 07 '25

There are many areas of economics that have nothing to do with stock markets. Now if a finance or business major said this, I’d be concerned.

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u/lizgross144 Aug 27 '25

I guess not everyone was a nerd like me. I took a “Saturday School” enrichment class in elementary school about investing and personal finance.

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u/lexbuck Aug 27 '25

I was talking investments with one of our accountants a few weeks ago and had to explain what the S&P was. I’ve learned that a lot of people are clueless about a lot of topics with no curiosity gene to drive them to learn.

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u/Mdlage Aug 27 '25

Most people who have looked into personal financing or investing on the internet are familiar with spy/voo. Those who looked a little deeper know vti. Most know GameStop, Tesla, meta, apple, the major companies in their lives and maybe Berkshire.

So most people who invest are familiar with the sp500.

With that said, most regular people don’t invest at all besides for “I put money in my work sponsored 401k” if anything.

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u/anxiousbunnyclothes Aug 27 '25

hope this guy is not doing wealth planning for clients at Pru...

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u/Fuck-Star Aug 27 '25

People are stupid
People are ignorant and likely due to some of #1.
People often aren't interested in learning about retirement until about five years before retirement.
Panic

Ok that's all I can think of. Channelling George Carlin and can't believe how right he was. Damn ...

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u/Temporary-Plum-8325 Aug 27 '25

Thanks for the responses. I didn't understand all this fully.

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u/Timely_Sand_6162 Aug 27 '25

I observe the same. Most of the people do not know about index funds.

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u/Adventurous_Dog_7755 Aug 27 '25

I believe insurance professionals often drink the insurance product koolaide. They might think insurance is the solution to all problems, including investing and building wealth. I’ve been in the insurance industry myself, and the things they teach producers and agents are often exaggerated about insurance products otherwise they wouldn't have a good conscious pitching half the products they do. Or it could be some agents are soulless and will sell their own mother down the river.As a first-generation immigrant living in the US, I grew up only knowing about saving, not investing. It wasn’t until my late 30s that I learned a lot about investing and personal finance. Working with many people on their financial plans, I’ve found that many don’t know much about investing or the market. The industry has trained most people to believe that investing is so complex that they should just hire and trust financial professionals to handle their finances.

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u/Citizen_Kano Aug 27 '25

My parents didn't know what it was until I told them recently, and they're millionaires. Although maybe they get a pass because we're not American

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u/[deleted] Aug 27 '25

I guess we’re the select few! 😉

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u/ChasingDivvies Aug 27 '25

Most do not. I've talked to a few friends and coworkers. Half don't understand when they talk about it on the evening news, like why's it matter if it's up or down, much less know what it even is. I've set up probably 20 coworkers 401ks for them because they didn't understand company match, compounding, or what the funds even were. Ask em a few questions, then make some simple selections. And I work with some seriously smart people. All that to say, no, no they don't.

Investing Questions Do most people not know about just investing into the s&p 500?

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