Joe Nocera

“IRA funds became a form of play money for the middle class... Because the pool of capital that made up an IRA could not be withdrawn for twenty or thirty years, many people viewed their IRAs as containing money they could experiment with. They could use an IRA to buy their first stock or their first mutual fund. They could put in in a money market fund first, and then, as they got bolder - and the bull market became more irresistible - shift some of it into something a little riskier. IRAs gave people a way to try on the stock and bond markets for size, to see how they felt, and to become slowly comfortable with the idea of investing. The knowledge that the money couldn't easily be withdrawn acted as a psychological safety net, allowing investors to feel as though they could take a chance or two. If they made a mistake, they reasoned, there was still time to recoup - several decades, perhaps.Over time, many people came to believe that it as imperative to maximize the returns they were getting on their IRA account, even at the risk of taking a loss. How else would they ever have enough to retire on? This, surely, is the classic definition of investment capital.”
― Joe Nocera, A Piece of the Action: How the Middle Class Joined the Money Class

“Though they did not instantly grasp the ultimate significance of the money market fund, Brown and Bent understood completely that they were making the first real assault on Regulation Q. Here is Henry Brown describing the moment of epiphany: “It was a frustrating time,” he wrote in an unpublished chronicle, of their disastrous first two years in business. (“Bent calculated that the proprietor of the hot dog stand at the corner of Sixth Avenue and 53rd Street was making twice as much money as either of them.”) In a moment of desperation, Bent one day asked Brown:”
― Joe Nocera, A Piece of the Action: How the Middle Class Joined the Money Class