Michael Dell, the founder of Dell Technologies Inc. (NYSE:DELL), who, with his wife Susan, pledged $6.25 billion to the ‘Trump accounts’ initiative, revealed a childhood anecdote that inspired him to do so.
Dell’s Push For Financial Literacy
Dell, whose current net worth is about $148 billion, in an interview with Fortune on Tuesday, recalled opening a small passbook savings account as a child at the age of six or seven, where he had $6 or $7, which sparked an early fascination with saving, compound interest, and investing, an interest further fueled by having a stockbroker mother. He hopes similar accounts will inspire today's children to learn about the fundamentals of finance, compound interest, the companies in the S&P 500, and investing and saving.
He also said the initiative would let families, communities, businesses, and philanthropists contribute to children's accounts. With a donation exceeding twice their foundation's lifetime giving, the Dells will add $250 to the accounts of 25 million children under age 11 who don't qualify for federal grants and reside in ZIP codes where the median household income is $150,000 or less.
Trump Accounts Get Bipartisan Support
The ‘Trump accounts’ initiative, a new savings program for children born between 2025 and 2028, was unveiled by President Donald Trump on Tuesday, with each eligible newborn receiving a $1,000 government contribution to begin their financial journey.
The idea, which Dell considers bipartisan and “non-political,” is also backed by Democratic Senator Cory Booker (D-NJ) and Republican Senator Ted Cruz (R-TX), who sent a letter to the Fortune 1000 CEOs to support Trump Accounts. According to Dell, even Rep. Ro Khanna (D-Calif.) has supported this initiative.
Legendary Investors Hail The Power of Compounding
Michael Dell’s advice on compounding echoes the wisdom of legendary investors. Warren Buffett emphasized buying stocks below intrinsic value, avoiding emotional decisions during market swings, and harnessing the power of compounding. As he put it, "Time is your friend; impulse is your enemy."
Similarly, Charlie Munger stressed that compounding works best when left undisturbed. Citing Munger's said, "The first rule of compounding is to never interrupt it unnecessarily" and "The big money is… in the waiting" — he emphasized that patience, not frequent trading, is what maximizes long-term gains, a lesson underscored by investor behavior during the pandemic panic.
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