A new national survey from The BlackRock Foundation and Commonwealth has found that more than half of Americans with annual household incomes between $30,000 and $79,999 are currently retail investors in the capital markets. The survey indicates that 54% of these low and moderate income (LMI) individuals are investing, with over half of them having started within the past five years.
The research, part of The Investor Diaries initiative, aims to better understand the motivations and challenges facing new investors from LMI households. The survey was conducted in January 2025 with a nationally representative sample of more than 2,750 respondents. It focused on those who entered the market since 2020, comparing pre- and post-pandemic investors as well as non-investors.
According to the findings, a significant portion of new investors are motivated by long-term goals. Thirty-seven percent of new LMI investors plan to invest for at least 11 more years, while 80% intend to continue investing for at least three years or more. The main investment goals cited include retirement (37%), saving for the future (35%), reducing financial stress (27%), and providing for children or family (27%). Additionally, 79% of newer investors are both investing in retail markets and saving for retirement.
Despite this growth in participation, many face ongoing challenges. Over one third (35%) of respondents reported having paused investing at some point, most often due to feeling financially insecure. Emergency expenses were a common reason for selling investments, highlighting the importance of having emergency savings as a foundation for investing.
Uncertainty about what to invest in was the top challenge among new investors, followed by concerns about risk, slow portfolio growth, and balancing investments with monthly and emergency expenses. Individual stocks are the most commonly held asset among newer investors (69%), with 34% holding ETFs and another 34% holding mutual funds. The survey suggests there is an opportunity to strengthen investor education around diversification.
Social networks play a significant role in encouraging investment: 90% of current investors know others who also invest, compared to 64% among non-investors. Many new investors turn to video sharing sites (36%) and social media (35%) for information about investing.
A notable barrier to retirement investing is the lack of employer-sponsored plans; one in five newer investors are not currently investing for retirement, with 17% citing this as the main reason. This points to the need for broader access to retirement benefits for LMI workers.
Claire Chamberlain, President of The BlackRock Foundation, said: “Americans who historically lacked wealth-building opportunities are now taking bold steps to secure their futures. Building on The BlackRock Foundation’s work with Commonwealth to shore up short-term savings for families, we are excited to partner with them to better understand the ways in which we can support more first-time investors on their journey toward longer-term financial security and wealth building.”
Timothy Flacke, CEO of Commonwealth, stated: “Our new research highlights the significant opportunity for the financial services industry to enable more Americans to build wealth: more than half of people living on low and moderate incomes are not just dipping a toe into investing, but motivated by long-term goals like retirement, homeownership, and financial security for their families. To turn this momentum into lasting wealth, the financial services ecosystem must meet their specific needs with tools that recognize their full financial picture, including access to short-term liquid savings. With the right tools, this growing group of investors has the potential to fundamentally expand who builds wealth in America.”
The Investor Diaries project combines survey data with voice diary entries and analysis of transaction data to provide insights into the financial behaviors and needs of new LMI investors. The initiative aims to inform product design, outreach strategies, and investor education programs for this demographic. More information about the project can be found at https://buildcommonwealth.org/tid
The BlackRock Foundation focuses on increasing economic security for LMI households by helping them earn, save, and invest earlier and more often. Commonwealth is a nonprofit dedicated to building financial security through innovation and partnerships, especially among populations disproportionately affected by financial insecurity.