Michael Dell's Heroic Effort To Democratize Savings And Investment

Even a single $250 contribution can build a nest egg through the power of compound interest.

Stephen Moore: Unleash Prosperity Hotline –This may turn out to be the highest-impact donation in American history: tech billionaires Michael and Susan Dell have pledged a whopping $6.25 billion to boost investment accounts for young children that were created in the One Big Beautiful Bill.

Two Great American Heroes
The Michael and Susan Dell donation translates to $250 in starter money for about 25 million "Trump accounts" for children from low- and middle-income areas. This private money will be for kids under age 10 who don't qualify for the $1,000 that will be deposited by the federal government for every newborn baby with a Social Security number. The tax-free accounts can be supplemented by families and employers and will be invested in low-cost index funds. When a child turns 18, money could be withdrawn with incentives to use it for education or to buy a first home.

Even a single $250 contribution can build a nest egg through the power of compound interest.  If investments earn a conservative 7% annual return, the money could grow to some $26,000 by retirement. With parental and employer contributions of just $50 a month, the account could balloon to over $500,000.

Those returns could be turbocharged if young people could take all or a portion of their payroll taxes and put the money into 401k personal accounts. If we had done this 20 years ago,  the average worker would today have a nest egg of almost $200,000.

Over 40 years, these accounts would hold well over $1 million. Instead, we are scheduled to see Social Security become technically insolvent in 2033.