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We're committing $6.25B to give 25M children a financial head start
- yandie 10mo ago$250 per child, at 5% interest rate, compounded in 18 years, you'd get $601.65. Even in today's money, I wouldn't call it a "head start"
- piker 10mo agoTrivial for a lot of people, sure, but imagine the difference between not knowing what an investment account is and knowing that you've got $250 in one that you can contribute more to.
- codeddesign 10mo agoSo..a 401k At least the 401k is pre-tax. This on the other hand is taxed on both ends. Maybe I am missing something, but I really don’t see the upside.
- piker 10mo agoYes. You know, like the kind of 401k a seven year old has.
- deleted 10mo ago[deleted]
- dmoy 10mo agoIt's more like a 529, but can also be used for first home purchase as a qualified withdrawal. It's also tax-free growth (not that the average <18 y/o would incur any tax on $250-$1250 of principle)
- qntmfred 10mo agoone of my kids is a senior in high school. they'd be quite content to have an extra $600 in their pocket. also... > beginning next year, the U.S. Treasury will contribute $1,000 to the Invest America account of every baby born on or after January 1, 2025 hopefully more people/organizations will decide to contribute as well.
- LastTrain 10mo agoMaybe if we grovel hard enough!
- aksss 10mo agoIf that’s all that’s ever added, but keep in mind the idea is to provide the foundation for making easy, low-drag contributions going forward.
- throwforfeds 10mo agoI mean you could buy books your first semester of your $75k/year freshman year of college though! Think of all the new Calculus that'll be in the 23rd edition of the standard textbook that costs $150. /s
- stetrain 10mo agoEnough for one college textbook.
- newsclues 10mo agoFor a single kid, maybe. But what if 10 or twenty of them want to start a company? Maybe they have some savings or can get parents to chip in or a grant, but they can’t open a store and work it, or start a landscaping business or a software company.
- xqcgrek2 10mo agoIf there was a wealth tax on every billionaire, it could be a factor of 100 or 1000 higher.
- najarvg 10mo agoIf you add in the 1000$ that treasury plans to invest starting next year, that is $1250 compounded at 5% annually after 18 years to $3008.27. It's probably still not a "head start" given that inflation is assumed to nominally rise at 2.5 to 3.5% annually and will take a bite out of what the real value is worth in 18 years. Good intentions but misplaced as others have stated. Investing in other ways to provide upward economic mobility will provide much better ROI for the society than allowing most of the wealth to accrue to a handful of people
- magicalist 10mo ago> If you add in the 1000$ that treasury plans to invest starting next year, that is $1250 This is largely separate from your point, which is good, but the $250 is for kids that won't get the $1000. The $1000 only goes to kids born between 2025 and 2028.
- Balgair 10mo agoReal quick, the $1000 530A account, if you put in just $1/day, $30/mo, on top of that account, then you get out ~$12,000 at the end of 30 years (assuming 5% interest rate). Which, yeah, that's enough to start a very small business (lawncare, blacksmithing, etc). The stock market is at ~9.5% returns historically, inflation is likely at ~3% historically, so assume a little higher at 6.5% and that $1000 with a dollar a day increase is then ~$14,800, inflation adjusted. If you go up to ~$100/mo at 6.5%, then you get ~$42,000, which is an honest start to a small business or college tuition. The little extra per month really adds up here! I may not like the administration for a lot of things, but this is one thing that I can really get behind.
- Retric 10mo agoA little help for millions likely ends up mattering for some of them. It’s a head start in that it removes a single minor issue, shows the value of compound interest in a more tangible way, or possibly gets them to retirement weeks/months earlier. Obviously many people are happy to spend whatever, but with 25 million people you’ll see a wide range of personalities and life situations. Imagine an otherwise identical life without 600 dollars of credit card debt, that’s a worth quite a bit over time and will likely apply to some of these individuals. Perhaps a musical instrument or similar purchase will end up really helping someone kid, you never really know.
- Balgair 10mo agoYes, but if you then put in just $5.00 / mo , it jumps to ~$2,300 , a 3.8x increase. If you put in $30.00 / mo , a dollar a day, then it goes all the way up to $10,700 , a 18x increase (42x over the $250) Look, we can play with numbers all day long here. The fundamental difference is the additional contribution amount. Finding just a little bit here and there makes a huge difference. And getting people into the habit of putting a set amount away each month is the key. Priming this habit, getting folks to look past the next 2 weeks, to just consider the adult they are raising, I think that will be hugely affective. I may not like what the current administration is doing in a lot of things. But for this little one thing, I can at least applaud this little one thing. I think it will really help out a lot of people in more than just the pure cash.
- RickJWagner 10mo agoOne of the most important benefits will be the example being set. People will have a visible example of the power of compounding. It’s just a shame there isn’t more time in the equation so they could see the real magic happen. Did you know that at typical market rates, someone saving $1000 at age 20 would have $64,000 at age 62? Even more illustrative, if the same person waited until age 27 to save the same $1000, they would only get 32k. If they started at 34, they’d only get $16k! The importance of time as the secret ingredient is the best kept secret ( that’s endlessly explained by people like Warren Buffett ). Hopefully these accounts will help the message stick.
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- decisionsmatter 10mo agoSelfless move. Have a lot of respect for the Dell philanthropy arm for doing this, will surely benefit a bunch of kids down the road even if they are more financially literate
- sc68cal 10mo agoI would much rather tax the wealthy, so that we could create a society where we don't have children who need a "financial head start" I read a book nearly a decade ago, that I think is worth highlighting. > The book's central thesis is that members of the global elite are using philanthropic institutions to preserve a system that concentrates wealth and power at the top at the expense of societal progress. Giridharadas examines the narrow limits of modern philanthropy, claiming that rich donors avoid contributing to causes which could undermine their own lofty status. He argues that in some cases, the political lobbying efforts of wealthy donors may reduce the government's ability to address inequality. https://en.wikipedia.org/wiki/Winners_Take_All:_The_Elite_Charade_of_Changing_the_World https://en.wikipedia.org/wiki/Winners_Take_All:_The_Elite_Ch...
- yieldcrv 10mo agothe non profit space relies on Congressional deadlock I know several people that vote for and donate to campaigns for senators on the other side of the aisle just to help ensure gridlock the next layer after that is that tax education is so poor that the population doesnt even know what laws they want to change so its not worth talking about as that ensures another 100 years of “tax the rich” turning into “tax the income of wage workers making over $500k” by the time a bill makes it out of committee (I don’t find that controversial, just different enough to be interesting)
- dboreham 10mo agoYou can tell this is happening from the fact that all elections seem to end up being a 49/51 result. There's some strange Nash Equilibrium thing going on.
- wat10000 10mo agoThat doesn't require anything nefarious. The parties can and do change their platforms and candidates to adapt to the electorate. If a party starts finding a way to win more votes, the other party will adjust to win them back. It's like how prices at different gas stations tend to be within a few percent of each other. It's not conspiracy, just competition.
- piker 10mo ago.
- TkTech 10mo agoIt's a tiny pittance of what would have been owed had they been taxed appropriately, and seems conveniently timed to bury the news of Dell (via Dell Federal Systems) funding ICE (it's completely erased it from the first page search results for "dell funds ice" in less than 24 hours). This isn't badass, it's a disgrace. They've hoarded an incredible amount of wealth generated by others and returned a sliver of it. You've been so conditioned to accept this system that you're even grateful for the scraps. If they gave $100 billion, they'd still have over $51 billion in the bank. That's roughly $7 million a day for every day he's been alive, or enough to feed every child in America for over a decade. Imagine the regional economic stimulus if instead of being hoarded for nearly half a century that money was paid out in salaries to those actually earning that money. _And_ they'd still have billions.
- piker 10mo ago.
- TkTech 10mo agoCan you explain what part of that is "communist nonsense"? Appropriate taxation (and leaving them with billions still even after that)? Or was it feeding hungry children you're against? America had a tax rate of 91% on the obscenely wealthy for decades and around 70% until the 80s. Reducing this to historical lows has universally, by both bipartisan and nonpartisan[2] parties, been found to have been the primary driver of inequality[1]. At even an absurd 99% tax rate, applied equally instead of tiered, Michael Dell would have $1.5 billion dollars. [1]: https://publicintegrity.org/inequality-poverty-opportunity/taxes/unequal-burden/how-four-decades-of-tax-cuts-fueled-inequality/ https://publicintegrity.org/inequality-poverty-opportunity/t... [2]: https://sgp.fas.org/crs/misc/R42729.pdf https://sgp.fas.org/crs/misc/R42729.pdf
- throw0101a 10mo ago
- dbacar 10mo agoI think the better idea would be to give $10k to 620k children who might be much more in need.
- foogazi 10mo agoI was thinking about this What if I had put 10k into my kids account when they were born - and maybe add in a little over time But then I realize I was better off just investing that money myself - and if there’s anything left over it goes to them
- woodruffw 10mo agoIf I was a billionaire, I would avoid the phrase "collective action" in my press statements. (It's clearly hard to hate giving money to kids; that seems good. What seems bad is relying on the largesse of the extremely wealthy.)
- vel0city 10mo agoHow much are the investment bankers going to profit off these childhood investment accounts? They're making it seem like this is some big selfless thing, giving a bunch of kids a small amount of cash. I see it as a big payday for the large banks.
- daft_pink 10mo agoI’m not sure how much good $250 will do for a child. I think this essentially explains why taxing billionaires is not very useful, because the total amount of their life generated wealth assets amounts to a small amount for 25 million people let alone larger populations. Even if you took all the $’s away, the government really needs to tax high numbers of lower income people for the income to be meaningful.
- maxerickson 10mo agoHelping them not go insane from always getting what they want is useful.
- bink 10mo agoIt's not either/or. You can tax both the poor and the wealthy at a similar rate.
- bluGill 10mo agoDepends on how it is spent. Buy candy/beer - as many kids will (depending on when they are allowed to access it) and there is no good. Buy some education and it is good. Remember money is fungable - even if this money can only be used for something good, it can still free up money for something bad that in turn destroyes the good (you buy tuition for a semester, but then use your free cash to party and get bad grades...) I don't know how to solve this problem, but it is one everyone should be aware of.
- daft_pink 10mo agoWhere I live, the government spends 16,500 ANNUALLY for each K-12 child. Getting $250 once doesn't seem like it will have a huge benefit to someone's life.
- bluGill 10mo agoAgain, depends on how it is spent. How much of that spending is for outliers - every school has a few severely disabled kids who can't even feed themselves: schools spend a lot more on those kids even though they will never learn. Also there is a lot of money spent on sports, music, art... which have debatable use in education - your community has come down on one side of the debate, but that doesn't mean it is right. Note too that higher education in the US is partially supported by things other than tuition and so 250 can go farther than it seems because it is 250 applied to your portion of the whole... We can debate how much different payers should pay, but that is a different question.
- renegade-otter 10mo agoSo we are going to live in a world where the national well-being is dependent on the good whims of billionaires and their "pet" causes. Not in the geographic or interest vicinity of a feudal lord? Too bad, maybe you should work harder, fuck you.
- OGEnthusiast 10mo agoWe already live in that world.
- wat10000 10mo agoAnd, lucky us, their "pet" causes include mass deportation, crackdowns on opposition, and building God.
- rossdavidh 10mo agoWhen my daughter wanted her first tablet, a friend of mine said he had an old one he could sell me for $50. Cool, I said, and my daughter saved up her allowance (paid for feeding the cats, as I recall) to get the money. Then, my friend said to just put the $50 in her savings account. Oh, I said, right, we should set one of those up for her. Once she had one, it was clear I should be adding to it every month. But, the initial nudge to get her one was important. Hopefully, having an account will make it more likely to put a little in every month? It's not everything, but it's also not nothing. Of course, cheaper housing would help the kids more, but that has more entrenched interests opposed to it (almost every homeowner), and not even Dell has enough to overcome that.
- arevno 10mo ago> cheaper housing would help the kids more, but that has more entrenched interests opposed to it (almost every homeowner) I hear this often, but as a homeowner, I don't understand it. Assessed value tracks market value, and the last thing I want is property taxes rising. The only homeowners who would prefer rising prices are those looking to sell or over-leveraged landlords.
- rossdavidh 10mo agoWhat you say makes sense, and yet what I find in reality is that almost no one thinks this way; they want their house to go up in value. Perhaps everyone assumes that they will sell sometime in the next few years?
- talkingtab 10mo agoLet them eat cake.
- deleted 10mo ago[deleted]
- sciencesama 10mo agofor a moment i thought that was Annabelle trailer !!
- harmmonica 10mo agoIf only there was some sensible way for 25M children to be given a financial head start that wasn't Michael Dell directly funding it. See his total net worth and the YTD increase: https://www.bloomberg.com/billionaires/profiles/michael-s-dell/?embedded-checkout=true https://www.bloomberg.com/billionaires/profiles/michael-s-de.... Google/ChatGPT his 2019 (pre-covid) net worth (I'll save you the trouble): $27B. It doesn't matter if it's super accurate because we all know the multiple is probably pretty accurate given what's transpired. And before you go calling me a wealth hater, I just wish the US wasn't such a wealth lover. Just a bit less emphasis on people getting rich and a bit more emphasis on getting our shit together so that the government can fund savings accounts for kids and while they're at it teach them some basic understanding of investment/budgeting.
- tjwebbnorfolk 10mo agoWhy is private philanthropy not sensible in this case? Should all philanthropy be socialized and centralized and administered by the federal government?
- harmmonica 10mo agoNo, it should not all be socialized and centralized. Think things are running smoothly in the US at the moment? I wish it were the case that Michael Dell would have to consider whether the deployment of that kind of capital is a layup for him or if it requires some major sacrifice on his part. And, yes, it's better that he does it than not, but I won't pat him on the back too hard given the math.
- twoodfin 10mo agoThe government is now funding savings accounts for kids, with the financial education benefits a prime motivator. Dell’s contribution is explicitly piggybacking on the new federal accounts.
- harmmonica 10mo agoYes, good call, you're right. Does that completely undercut my sentiment? That said, I'm all for Dell and every other billionaire jumping on board as well because you'd end up with a pretty nice entitle--err--nest egg for the future. I even have a clever name for it: pre-social security.
- OGEnthusiast 10mo ago$250 seems way too small to make a tangible difference, but I suppose it's better than nothing.
- skybrian 10mo agoMaybe it will inspire others?
- pavlov 10mo ago"Why don't the poor just have investment accounts" - Marie-Antoinette Dell Having $250 in an account does practically nothing for the child. But having $6.25B invested does generate fees for bankers chosen to manage this program. (Chosen by the president's Wall Street entourage, presumably?)
- lvl155 10mo agoThey rather give kids $6.25B going straight to SPX than build schools. At some point, the billionaires realized it’s best to keep Americans uneducated. They then turn around and hire all the immigrants and complain why there are so many of them in this country. People realize this is precursor to them removing social security for this generation of kids?
- deleted 10mo ago[deleted]
- tjwebbnorfolk 10mo agoIt's so interesting how many of the comments already are some variant of how ridiculous this is that a rich person voluntarily donated their own money. That that's somehow bad, and what we really need to do is to force all of them to donate via taxation. But you just got $6 billion and you already want more? This attitude exactly why so many people are against raising taxes, supposedly against their own self-interest. The idea that I can freely spend OTHER people's money is the most seductive thing in the world.
- vel0city 10mo ago> But you just got $6 billion Just checked my accounts, I didn't get $6B. Maybe the wire just hasn't come through, I'll check back tomorrow. Jesus sat down opposite the place where the offerings were put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts. But a poor widow came and put in two very small copper coins, worth only a few cents. Calling his disciples to him, Jesus said, “Truly I tell you, this poor widow has put more into the treasury than all the others. They all gave out of their wealth; but she, out of her poverty, put in everything—all she had to live on.” $6B is what, 4% of his current net worth? For a family with a million dollar net worth that's about $40k to put it in more normal human perspectives. I think there's plenty of more socially bad ways for him to toss his wealth around. I applaud him for doing a bit. But I also don't exactly see it as some extreme amount of charity, because at his level it really isn't that extreme.
- wat10000 10mo agoI don't think it's ridiculous that he voluntarily donated six billion dollars. I think it's ridiculous that he had six billion dollars to donate. I think it's even more ridiculous that donating six billion dollars won't even make a noticeable dent in his wealth.
- frellus 10mo agoWhat kids really need is a mandatory personal finance class at the High School level. This would teach them how to handle money, debt, spending, budgeting and general financial health. Nothing would help the next generation more, even above giving them seed investment money, than helping them avoid the pitfalls which are just waiting for them around every corner. My daughter took an elective for this in HS, and every day would come home and say how much she was learning and how empowered she felt about money afterwards.
- foolinaround 10mo agoAre there good suggestions for a personal finance class at the high school level that one can take online?
- bokohut 10mo agoSome U.S. States have moved on this, such as Ohio, yet it does not get the coverage and press it deserves. Consider how much the debt driven capitalism machine would change if we force educated our up and coming young adults to understand how finances function. Very few think in time in our perceived as instant world and the social cost of this has only just begun.
- throw0101a 10mo ago> What kids really need is a mandatory personal finance class at the High School level. This would teach them how to handle money, debt, spending, budgeting and general financial health. Most of us are completely clueless in high school and the lessons will be completely forgotten. (Though I'm happy my province, Ontario, started doing this a few years ago.)
- frellus 10mo agoThat is awesome Ontario is doing that. it will make a difference. I agree that most of us get out of high school clueless, both because of age/maturity but also because schools are not teaching people HOW to think, they're teaching WHAT to think. Two areas of knowledge would revolutionize the system, and obviously would never happen: * critical reasoning -- this is I bought my kids a book on cognitive biases and how to think through problems and fallacies in thinking * curiosity -- this is where AI would help in schools, but unfortunately teachers are pushing kids away from using AI in general, let alone using it as a tool to be curious and explore knowledge and reasoning about a subject I can only conclude that these things are not inherently in the public school system on purpose to keep the population dumb and docile. I hate thinking that, but it's the only conclusion I can come to. Someone(s) wants our children to be dumb, dependent and easily manipulated in their thinking. *
- unyttigfjelltol 10mo agoI don’t really understand the underlying US government program— specifically why in a time of alarm over deficits “we” are enacting new private giveaways of public funds. Cynically, I doubt the folks who enacted this care one whit about folks who will turn 18 in the year 2044, 19 years from now. They only care about pumping the stock market today and winning elections in 2026 by transforming the Federal government into something like a hedge fund with a “save the children” sticker on the front door. As for the Dells— they really do seem to care about our children and their philanthropy is beautiful.
- Jackson__ 10mo agoIt exceedingly appears as if the stock market is becoming little more than the means to liquidate the commoners savings to further prop up the rich.
- defrost 10mo agoIn related news: Trump 'seriously' considering Australian super-style scheme ~ https://www.newsweek.com/donald-trump-retirement-program-australia-trust-11144894 https://www.newsweek.com/donald-trump-retirement-program-aus... and other news soures * https://en.wikipedia.org/wiki/Superannuation_in_Australia https://en.wikipedia.org/wiki/Superannuation_in_Australia a savings system for workplace pensions in retirement. It involves money earned by an employee being placed into an investment fund to be made legally available to members upon retirement. Employers make compulsory payments to these funds at a proportion of their employee's wages. Currently, the mandatory minimum "guarantee" contribution is set at 12%, having increased from 11.5% on 1 July 2025 As of 30 June 2025, Australians have AU$4.33 trillion invested as superannuation assets, making Australia as a nation the 4th largest holder of pension fund assets in the world. * https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super https://www.ato.gov.au/individuals-and-families/super-for-in... See Also the Singapore Fund: https://en.wikipedia.org/wiki/Central_Provident_Fund https://en.wikipedia.org/wiki/Central_Provident_Fund
- em-bee 10mo agofor comparison: every child in germany receives 250euro per month from birth at least until they are 18 years old. that is 54000euro per person. it is simply a negative tax in a way. and it is not meant to be saved but used for the childrens every day needs.
- RhysU 10mo agoIn the US the child tax credit serves a similar purpose and is precisely a negative tax: $300/month under age 6 then $250/month thereafter. Essentially the same amount as Germany give or take currency. That has long been in place though the amounts have changed over time. Not every family gets this credit. It phases out at sufficiently high income.
- em-bee 10mo agointeresting. how does that work specifically? if your income is so low that you don't pay taxes, do you actually get cash? the german system simply pays out the money unconditionally. regardless of income. it doesn't affect your taxes, but if the regular taxes happen to lower then you get more money than you pay.
- RhysU 10mo agoFrom the IRS... > A portion of the Child Tax Credit is refundable for 2024. This portion is called the Additional Child Tax Credit (ACTC). For 2024, up to $1,700 per child may be refundable.
- em-bee 10mo agocan you elaborate how that works in practice? say i am earning 2000$ per month. i pay $100 on taxes on that. so that's $24000 income and $1200 in taxes per year. $1700 as a tax credit, does that mean my taxes are 0? or do i get $500 on top of my income? so after taxes how much do i have? 24000? 24500? and where are the $250 per month you mentioned? here is how it works in germany: 24000 euro is my income. 1200 euro are my taxes. but i get 3000 euro unconditional per child. so after taxes my total income is 25800 euro with one child. add 3000 for each additional child. the actual tax rate is made up, and just set to 5% to make the comparison easier.