How does buying an index fund mean giving a stock broker more money? It's your money, invested. You're certainly free to keep it under your mattress if you prefer. Historically, money invested has drastically outperformed money kept under mattresses :)
1. You don't invest? Let me help you start. (give guy money)
2. Good, you invest. Let me help you diversify. (give guy more money)
3. Good, you are diversified, but you need to diversify more (give guy even more money)
4. You have too many stocks. Let's get you into more bonds. (give guy money)
5. Hmm... you don't have any exposure to Far East currency, but we can't take away from your Euro position. Give me some more money so we can buy this new Chinese currency. (give guy money)
Um, why you buy an index fund and you put $1000 in, you can immediately get $1000 out. And many brokerage accounts are free.
So this is no more of a scam than a bank account, except you take on more risk in return for more reward. Not a huge risk, but bigger than the money market.
It's true that relative to inflation many investments do quite poorly, and it's true that some investing is a scam. I don't think it's true that all investing is a scam.
