We're committing $6.25B to give 25M children a financial head start
onedell.com50 points by duck 7 hours ago
50 points by duck 7 hours 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.
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.
> 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.)
I wonder if this would very quickly get politicised.
Because what would you teach in these classes? I guess you'd start with, avoid debt, spend according to your means etc.
Next minute some politician will be concerned voters take it too seriously and start judging them by their ability to stick to budgets. Nononono. Let's make that curriculum less revolutionary.
Then I suppose there's corporate interest too. Surely spending withing your means is un-American? Let's include in the lessons stuff about spreading the cost of your purchase over 3 years on a credit card. And did you know Visa, our educational partner, offers you a student credit card with just 280% annual interest and 0.001% cashback, just to get you to dip your toes in the world of crippling debt? I mean, sustainable personal finance. And if that all gets too much, here's some opioid painkillers. There, much better.
Some 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.
Are there good suggestions for a personal finance class at the high school level that one can take online?
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.
In the U.S., we had this for about 50 years, but was mostly gone by the mid-1980's. It was part of a class called Home Economics.
In some schools it was mandatory for everyone. In other schools, it was for girls only because at the time it started, it was usual for women to do the household finances.
The course often also included things like cooking, cleaning, and sewing. What people today learn from online "life hacks."
I'm glad I learned all of those skills in high school. I only rarely need to darn my socks, but the knots I learned translate to fishing and other needs.
It was also where I learned typing.
My middle school home ec class was completely worthless “skills” that weren’t worth the opportunity cost of the time, but a finance class would have been.
When 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.
I 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.
Selfless 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
$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"
Trivial 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.
So..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.
It'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-$1250 of principle)
If you add in the 1000$ that treasury plans to invest starting next year, that is $1250 compounded at 5% annually after 18 years to $3008.27. It's probably still not a "head start" given that inflation is assumed to nominally rise at 2.5 to 3.5% annually and will take a bite out of what the real value is worth in 18 years. Good intentions but misplaced as others have stated. Investing in other ways to provide upward economic mobility will provide much better ROI for the society than allowing most of the wealth to accrue to a handful of people
> If you add in the 1000$ 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.
Real 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.
Yes, 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.
A 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.
one 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.
If 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.
If there was a wealth tax on every billionaire, it could be a factor of 100 or 1000 higher.
For 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.
I 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
I 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_Ch...
The top 10% of the earners in the US are paying 72% of the taxes collected. I'd assume most of the posters here from the US fall into that category. ($178k/year AGI). Are you willing to pony up more of your income for taxes?
> Are you willing to pony up more of your income for taxes?
The taxes don't have to come from income, there were plenty of tax cut extensions + some new ones that could have been let go without increasing the individual upper-middle-to-lower wealth class taxes and greatly cut down budget deficit with the increased revenue. Instead the extensions of the 2017 cuts are going add some 3.7 trillion over the next 10 years.
Yes philanthropy is ugly.
Had a conversation with a us friend who works with philanthropy. That person agreed that philanthropy is ugly, but let me know that it is better than nothing while the US has its current ways.
You could simply fix that. In what world does a billionaire pay for a countries' contribution to the United Nations, an institute they helped found and which has its main seat in that country... it's shameful, really.
This is money flowing from rich people to (mostly) not-rich children. Although the mechanism is different, the money seems to flowing in the same direction you’re hoping for?
Is there data showing that government programs are more effective than philanthropic programs?
> Is there data showing that government programs are more effective than philanthropic programs?
define "more effective"
I'm replying to a claim that, if we "tax the wealthy" then "children won't need a head start."
I want evidence supporting that claim, that government taxes are better for giving "children a head start" compare to philanthropy.
The OG claim wasn't a claim that they're more effective. It's that it could reduce inequality. By definition it's true. This is simple to prove. If I say, confiscate the wealth of anyone with more than a pot to piss in, and burn it in a fire. Then we would all be equal.
The bigger problem is that there are much or more of these fat cats that abuse their wealth than use it for good.
What does "abuse" mean in this context?
Use their wealth to accumulate more wealth through political connections. Use their wealth to disenfranchise others. Use it to harm others. How many forms of abuse are there and what would it take to enumerate them all?
And even if that weren't the case, it's still not democratic to let people individually decide who gets what dollar. We build states so that we can direct their action through democratic means, using our votes. That's the best way
Not sure the abolition of private property is going to turn out the way you think it will.
exactly, based on this:
There is a political benefit for Trump and fellow Republicans. The accounts will become available in the midst of a midterm election, providing money to millions of voters — and a campaign talking point to GOP candidates — at a critical time politically. The $1,000 deposits are slated to end just after the 2028 presidential election.
You mean like last time. Cue Rayiner saying he didn't technically buy any votes.
Every politician does this... Biden was trying to do it via cancelling student loans.
that is true
Thankfully they didn’t let him get away with it - and now those people will get $250 in their kids’ accounts while they pay off their loans
> https://en.wikipedia.org/wiki/Winners_Take_All:_The_Elite_Ch...
See also perhaps criticism(s) against meritocracy:
* https://en.wikipedia.org/wiki/Meritocracy#The_Meritocracy_Tr...
So even when billionaires do give away their money it's still not good enough for you?
The anti-rich sentient has somehow reached such a fever pitch that when a billionaire donates $6B to children the top post on HN is bitching about it.
I think you hit the nail on the head with your "good enough" phrasing. It might actually not be good enough. It begs all sorts of questions about the state of things in the US that an extremely wealthy individual has the means to do this and at the same time that something like this doesn't already exist for the recipients via some other mechanism such as the entity that's responsible for a citizen's well being playing some role.
It is good, though. I think most folks who complain about it, though, wish it were better (better does not mean Dell spends even more of his own money on this, not directly anyway).
Many people view the existence of billionaires as a profound societal flaw. The accumulation of such obscene wealth by an individual is only possible because of systemic problems which prevented employees from capturing their fair share of their productivity, prevented competitors from entering the market to lower margins or prevented customers from being able to purchase at lower prices.
It's a good thing that he's giving away 4% of his wealth. He'll still have $140,000,000,000 left after this donation though, which is relevant context.
Donations are never free. And mentioning children, freedom or safety with any donation instantly makes me question it even more.
High income individuals already pay a majority of personal taxes in America. And American governments get about $10T(or $29k per citizen) to play with each year between federal, state, and local.
Exactly how much money is needed to create this society you're imagining? America has more than enough money (IMHO), we just suffer from cost issues, and if you just throw more money at a situation where you have cost issues, you are just burning the money.
To piggy back on this, as a thought experiment, if you took all the wealth of every American billionaire combined you would pay for the US government for about a year.
Top 10% wealth is $113T. Government is operating off of $5T revenue.
Seizing all of it and putting it into even a foreign owned asset basket (could pick an economy as shielded as possible from US in case it causes instability in US economy) should yield enough interest (at least 5% real) to operate the federal government and public entitlements indefinitely based on present real revenues.
We suffer from billionaires hoarding money and companies creating an unfair market. Tell me what's the need for billionaires? Even having 100m is enough to feed a few generations of your family, isn't that enough?
Philanthropy at the personal level is good. People need to interact with their city and know their neighbors and their issues. Mega donations at the national level are really just end-runs around our democracy. We need to figure it out as a society, not have a rich person come in and say 'I have money and this is how I want society to work'. Even if I agree with you, I don't really want any individual to have that much power over that many people. We need to constantly find ways as a society of encouraging individual voices and reducing the power of money as a voice.
This could teach a lot of kids at least some financial literacy, which is valuable in any situation or tax regime.
Personally, I would have loved to have some money on such an investment account as a kid, and I would nerd out on its development, discuss it with friends etc. Knowing that everyone around me has the same account would also make it less taboo to discuss money in general.
You would, but most kids would not care. I question the value because I've seen plenty of kids spend every penny they get on candy and other such things that are not valueable long term.
the 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)
The number of people who would do that has got to be less than a rounding error.
what's more important to me isn't the single person vote itself, the campaign and cause contributions would be influential and the behavior is different than what people think those with money and some power in their domain are doing, how they're navigating and choosing candidates
You 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.
that's just run of the mill polarization in the country, and that the party with more people hasn't been inspired to mass move them around the country for 5-8 months one year to register to vote and tip every election
That 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.
The government might spend the money on giant AI data centers instead, this donation is going directly to something helpful.
I've been thinking about a synthesis of communism and capitalism, where instead of levying dollar taxes, the corporations transfer 0.5% of control (stock, etc) to the government per year. Adjusted for how much the government already controls.
Or we could do socialism and have workers, not the government, take ownership.
$250 seems way too small to make a tangible difference, but I suppose it's better than nothing.
I think the better idea would be to give $10k to 620k children who might be much more in need.
I 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
.
It'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.
.
Can 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/t... [2]: https://sgp.fas.org/crs/misc/R42729.pdf
> This is badass.
It's like celebrating someone having a 'successful' Kickstarter campaign so they or their child can have surgery or some treatment.
Or society could decide that people shouldn't have to pay for surgery and healthcare should be provided to all without them having to cut a cheque.
If 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.)
I’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.
Depends 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.
Taxing billionaires is useful because concentrated power is bad. The fact that it also produces revenue should just be seen as a bonus.
They 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?
for a moment i thought that was Annabelle trailer !!
How 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.
"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?)
So 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.
We already live in that world.
And, lucky us, their "pet" causes include mass deportation, crackdowns on opposition, and building God.
If 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-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.
The 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.
Yes, 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.
Why is private philanthropy not sensible in this case? Should all philanthropy be socialized and centralized and administered by the federal government?
No, 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.
It'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.
I 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.
> 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.