57% of Gen X and Millennials Invest in the Stock Market. Here's Why That Number Should Be Much Higher.

According to new research conducted by The Motley Fool, nearly half of all Gen X and Millennial adults don’t own a single share of stock. Baby boomers, meanwhile, own more than half of all U.S. equities, when broken down by generational ownership.

“It’s not surprising that baby boomers hold a large amount of stock,” the new research concludes. “They’ve had plenty of time to build wealth via Wall Street and see their investments grow. Average net worth goes up as Americans age, which often means older Americans have more money to put into the stock market.”

But here’s the thing: You don’t have to be rich to invest in the stock market. In fact, you can get started with as little as $20. If you’re a Millennial or Gen X’er, don’t pass up the opportunity to get involved in one of the greatest wealth building tools ever created. If you’re still not convinced, perhaps the simple math discussed below will do the trick.

These numbers are too crazy to ignore

Let’s say you start by investing $20 per month into the stock market using a broad market index fund that tracks the S&P 500. Over the long term, the S&P 500 has produced annual gains of around 10%. Over some decades, that rate has been a bit higher. Other times it has been a bit lower. But we’re looking at long term results here, and 10% annual returns is typically regarded as a reasonable benchmark. After five years of investing, you’ll have around $1,600. That’s impressive, but just wait — the math starts to get incredible from here.

After investing $20 per month with a 10% annual return for 10 years, you’ll wind up with nearly $4,200. Notice that while the investment period doubled exactly from five to 10 years, the ending sum more than doubled from $1,600 to $4,200. That’s due to the magic of compound interest. That is, the longer your money stays invested, the faster it grows. After 20 years of investing, for instance, you’ll wind up with $15,500. And after 40 years, you’ll have the princely sum of $130,000 — all from investing just $20 per month.

But what if you chose an even better performing investment. While future results won’t necessarily follow the past, Berkshire Hathaway (BRK.A 4.00%) (BRK.B 4.11%) stock has produced around 20% annual gains for decades — roughly double the S&P 500’s return. After 40 years of investing just $20 per month and earning 20% annual returns, you’d wind up with more than $3.6 million! That’s an amazing feat for stashing away just $240 per year.

Of course, your returns can be even higher than this if you choose to invest more money per month. But the point is that you don’t need to be rich to start stashing money away in the hopes of major wealth down the road, either for your retirement or your progeny. All you need is time and consistency. Most brokerage accounts allow you to turn on automatic investing. That is, your brokerage will automatically withdraw and invest $20 from your savings or checking account each month on your behalf. This is a critically important tool to use, as a lack of consistency will crush your long-term returns.

The roadmap is simple: Start investing right now, even with small sums, and find ways to make that saving consistent by using automatic investments. If you aren’t invested in the stock market, like millions of other Americans, this could be the single greatest financial decision you ever make. The best time to start is today.