The Broker's Kingdom
In 1975, buying a single share of IBM stock wasn't just expensive—it was practically impossible for regular Americans. The transaction required calling a stockbroker during business hours, paying a commission that often exceeded $50 (about $280 in today's money), and meeting minimum purchase requirements that could run into thousands of dollars.
The system wasn't designed to keep people out, but that's exactly what it did. Brokers made their living on high-dollar trades from wealthy clients, not $100 purchases from school teachers or factory workers. Many brokerage firms openly discouraged small investors, viewing them as unprofitable nuisances who clogged phone lines and consumed resources without generating meaningful revenue.
"We don't really want accounts under $50,000," a Merrill Lynch broker told Money magazine in 1985. "They're just not worth our time."
The Mathematics of Exclusion
The numbers tell the story of a system built for the wealthy. In 1975, the average commission on a 100-share trade was $35—equivalent to nearly $200 today. For someone earning the median household income of $11,800, that single transaction consumed almost three days of gross pay.
But commissions were just the beginning. Most brokers required minimum initial investments of $1,000 to $5,000, effectively creating a financial moat around stock ownership. Even discount brokers, which emerged in the late 1970s, charged $30-50 per trade well into the 1990s.
The result was predictable: in 1980, only 13% of American households owned stocks directly. The market that would generate trillions in wealth over the following decades remained largely inaccessible to the people whose labor powered the companies being traded.
The Technology Revolution Nobody Saw Coming
The transformation didn't happen overnight. It began with the deregulation of brokerage commissions in 1975, which allowed discount brokers to compete on price. But the real revolution started in the 1990s with online trading platforms.
E*TRADE, founded in 1991, initially charged $19.95 per trade—expensive by today's standards, but revolutionary for its time. The company's early television ads featured a security guard making trades from his desk, sending a clear message: the stock market was no longer just for Wall Street insiders.
By 2000, online trading had driven commissions down to $7-15 per trade. But even that seems expensive compared to what followed. In 2013, Robinhood launched with zero-commission trading, forcing established players to match or risk obsolescence. Today, you can buy a fraction of a Tesla share for $10 with no commission, no minimum balance, and no broker intermediary.
The New Landscape
The contrast is startling. A teacher in 2024 can buy $50 worth of Apple stock during her lunch break using an app on her phone. The entire transaction—research, purchase, and confirmation—takes less time than it used to take just to get a human broker on the phone.
Fractional shares, introduced widely in the late 2010s, eliminated the last barrier to entry. Previously, a single share of Berkshire Hathaway's Class A stock cost over $400,000—an investment reserved for institutions and the ultra-wealthy. Today's platforms allow investors to own a piece of any company for as little as $1.
The democratization shows in the numbers. As of 2023, 61% of American households own stocks, either directly or through retirement accounts. Among millennials, the figure rises to nearly 80%, driven largely by easy access to commission-free trading apps.
The Unintended Consequences
This accessibility revolution wasn't without trade-offs. The old system, for all its exclusivity, came with built-in friction that often prevented impulsive decisions. Today's instant trading enables both smart investing and dangerous speculation with equal ease.
The gamification of trading—complete with confetti animations and push notifications—has drawn criticism for encouraging day trading among inexperienced investors. What was once a deliberate, expensive decision has become as easy as ordering coffee, with similar potential for mindless repetition.
Beyond the Revolution
Yet the broader impact remains transformative. An entire generation of Americans now has access to wealth-building tools that were once reserved for the privileged few. The stock market, historically a symbol of elite financial power, has become genuinely democratic in a way that would have been unimaginable just decades ago.
The revolution extends beyond individual access. Companies can now raise capital from millions of small investors rather than relying solely on institutional funding. Retail investors, once dismissed as "dumb money," now move markets and influence corporate decisions through coordinated online campaigns.
Perhaps most significantly, the barriers that once made stock ownership a luxury have crumbled so completely that financial literacy—not access—has become the primary challenge. In removing the gatekeepers, we've also removed much of the guidance they provided, for better and worse.
The transformation from exclusive club to universal access represents more than technological progress—it's a fundamental shift in how Americans can participate in the economy that their work creates. The question now isn't whether ordinary people can invest, but whether they understand what they're investing in.
