Evonomics has the article Capital’s Share of Income Is Way Higher than You Think. To save you the agony of reading what it isn’t, I’ll entice you with the excerpt that tells you what it is.
But over any longer period, household capital gains are very, very real income indeed. They deliver very real assets and net worth — wealth — onto household balance sheets, which individuals can easily swap for “cash” when they want to spend, in our liquid financial system. That’s what retirees with nest eggs do — swap their various assets for cash, and “spend down their assets.”
I have been waiting for a long time to read an analysis like this. As a retiree, living off the income from my investments, I have suspected that counting unrealized capital gains would change the picture just as thiss author has pointed out. From what I remember of the statistics I have read, there are are very few 10 year periods in the history of the USA stock market where you would have lost money in the market. I think the other statistic is that there are no periods of 20 years or more where you would have lost money. I presume this is talking about index type of investing, not speculation. In other words, if you have the staying power, you are almost guaranteed to make money in the stock market over a lifetime. Yes, past history is no guarantee of future performance. However the odds are in your favor unless this country does something unprecedentedly foolish. Some day it could happen. We seem to be on our way there lately.