Merry Christmas to 25 million kids, from the Dells

I got the opportunity to take an unexpected vacation last week.  A friend’s unused reservation couldn’t be moved to a new date but the cruise line would allow for a new traveler’s name to be substituted. I spent last week in various spots in the Caribbean, blissfully tuning out the political noise of the day.

Now I’m back. The unseasonable warm and dry weather I left seems to be on a vacation of its own. I was only reminded of the current season when leaving a north Florida restaurant upon my return and being a bit surprised when the hostess gave me the exit salutation of “Merry Christmas!”  

No, this won’t be the annual installment ranting against those who rant against “Happy Holidays”, though I will note Hanukkah begins on Sunday evening, December 14^th.  Our friends in Israel will celebrate their first Hanukkah in peace – tenuous though it is, as it always is there – since 2022. 

Instead, today we’re going to talk about gift giving. Tis the season, and all.

One of the more substantive news stories from last week came from the business section. “Billionaires” Michael and Susan Dell have decided to give away more than 6 billion dollars to America’s children.

The gift is unique in that it’s not a pledge to give away the money when they die and thus no longer need it.  Many of the uber-wealthy give themselves awards and dinners when they very publicly sign away their estates – often to foundations run by heirs. 

It’s also not to an NGO or other nebulous bureaucracy that pledges to address children’s issues while perpetuating itself on its newfound capital. Nor is it to get a wing named after themselves on a prominent building nor research institution bearing the Dell name. 

Instead, they’re going to give $250 directly to as many as 25 million children under the age of 10 to start their first investment account.  The only stipulations appear to be that the child be a U.S. born citizen, both the child and parents have valid social security numbers, and the child live in a zip code where the median income is less than $150,000 – about three quarters of the country.

This gift is designed to scale up a program in the recently passed reconciliation package that authorizes $1,000 to children born after January 1^st of this year and will continue with current funding through 2028.  Proceeds will be invested in stock based index funds so that children can be invested – literally – in our capitalist market system.  

The hope is that more will pay attention to these accounts and learn from the ups and the downs. Markets, after all, involve risks. America was built and still thrives by the risk takers.

For years, even decades, we’ve been fed a steady diet of stories about wealth gaps.  Too many now believe that there is no intersection of Wall Street and Main Street.  Some would have us believe you can’t even get from one to the other.

The hope for both the “Trump Accounts” and those made possible by the Dells is that these accounts are just initial investments.  They want parents, friends, employers, and eventually the children themselves to add to the accounts over time. 

They want the lessons of patience and compounding to take hold before consumerism takes over. Our instant gratification society has normalized getting a $10 fast food meal delivered for $30, and prioritized that over saving even a small fraction of each paycheck to first fund rainy day expenses, and eventually to build a real wealth nest egg.

America is the wealthiest country on the plant.  Americans are among the worst developed nations when it comes to financial literacy.  These two facts cannot peacefully coexist for an extended period of time.

We have dedicated groups and networks who wish to make our country a socialist nation. They love using terms like “late stage capitalism” to pretend that the fall of capitalism is near.  

Michael Dell is famous for realizing while in college that he had the opportunity and skills to hustle a bit, and sell some computers from his dorm room.  Too many on campuses these days would spend entire seminars explaining why and how he’s somehow the bad guy in American culture.  Note I put the term “billionaires” in scare quotes above because these very folks now use his hard earned title as a pejorative.

A very select few Americans will ever become billionaires. Every one of us has that path open to us, though few will even select it. Those who do will need skill, luck, timing, and even a bit of help along the way to get anywhere close. But all of us have the opportunity to save a little, invest a little, and defer unnecessary expenses to put a bit aside for ourselves. 

It is hard? Anything worth doing is. 

Sometimes, the hardest part is just getting started or even knowing where to start.  Michael and Susan Dell are taking care of that for millions of kids, as a no-strings gift. Even the biggest haters of billionaires should be able to appreciate that.