First $1,000, Then a SpaceX Share for the Kids. What About the Adults?
Originally published on Substack
On Monday, October 19, Elon Musk posted on X: “Next year, I will give one of my SpaceX shares to every kid in America. This will be the first of many“ [1]. If you’re keeping tabs, that’s first the government’s $1,000 Trump Account deposit, and now free stock from the richest man in the world. It definitely seems like our kids are getting a lot of goodwill. And if we take stock of the other generations, boomers are collectively doing great: they hold about 52% of all household wealth despite making up about 30% of households [5]. This raises the question: what about the rest of us adults – Gen z, millennials, Gen X? Are we also going to get these lovely investment gifts?
Before I get into what’s out there for adults, let’s unpack what we know and don’t know about Elon’s latest promise.
What Do We Know?
SpaceX is now a public company, and its stock closed at $146.03 on Friday, October 16. With roughly 72 million children in the U.S., one share each would add up to about $10.5 billion [1]. That’s nearly double Michael and Susan Dell’s record-breaking gift to Trump Accounts. And this is not the first SpaceX gift to children. In July, SpaceX president Gwynne Shotwell pledged one share each to 2 million children’s Trump Accounts, a gift that is now worth nearly $300 million [2].
But there is still a lot of uncertainty about Elon’s post.
What Don’t We Know Yet?
Almost everything. Musk did not say how the shares will be delivered, when next year it will happen, or who counts as a “kid.” Did he mean all minors under 18? Would it be only for U.S. citizens? Will the shares go into Trump Accounts, like Gwynne Shotwell’s pledge, now that Treasury rules let donated stock go into them [3]?
Another key question: can kids sell the stock, or must they hold it? If the shares go into Trump Accounts, two layers of rules would apply.
The stock rule: Under Treasury’s temporary rules from September 30, donated stock generally cannot be sold until 5 years after it is contributed, or until the end of the child’s “growth period,” whichever comes first [4]. Families also cannot choose or refuse the stock they are given [3].
The account rule: Even after the stock can be sold, the money stays in the Trump Account. The growth period ends on December 31 of the year the child turns 17, and in general no money comes out before then [4]. So, as with the $1,000 deposit, think of it as a hold-until-adulthood kind of gift.
If Musk uses some other route, different rules could apply. We will know if he shares the details.
What Are the Pros and Cons?
The pros: Millions of children, many from families that may never have owned a single stock, get to own a piece of a real company. That can spark an interest in the stock market and maybe open up a conversation about finance and investing at the family dinner table. That is pretty cool!
The cons: One share of one company is not exactly a diversified investment. Its value can go up or down a lot; just look at how sharply SpaceX stock has swung since it went public. Some experts have also criticized Treasury’s stock-donation policy. They argue it could give companies a large base of young shareholders who may be used to push back against regulations or tax increases that could hurt the share price [3].
Who Stands to Gain?
Kids stand to gain a share and, hopefully, a little curiosity about stocks, the stock market and investing in general. Musk and SpaceX gain something too: millions of new young shareholders, families who now root for the company, and a lot of goodwill. And giving away 72 million shares would cut Musk’s SpaceX holdings by only about 1.5% [1]. Depending on how the gift is structured, he may also get a charitable tax deduction. None of that makes the gift bad, but it is good to know who benefits from what.
So What About the Adults?
Let’s count: a $1,000 deposit, the Dells’ $250 gifts to millions of kids, and now a SpaceX share. All of this generosity is going to our children, and I love this for them. But who is helping the grown-ups build wealth? Who is pouring into the 28-year-old saving for a first home, the newlyweds, or the 40-year-old mom who puts everyone else’s needs before her own?
Since neither the government nor a billionaire is offering us free cash or free stock, we adults have to get more intentional about using every resource around us to invest and build wealth. And most of us already have the answer sitting right next to us. We have a huge village of loved ones ready to pour into our lives. Mom and dad, grandma and grandpa, aunties and uncles, friends and coworkers show up to celebrate us on so many occasions. Their generosity is constant in our lives, so why not put it to work?
What if we were intentional and said to our loved ones, “Instead of buying me another sweater, pair of headphones or bottle of wine, would you invest in my future?” What if the people who already want to give us something meaningful could give us a gift that has the potential to grow?
That’s where Endowe comes in. It helps you do exactly that. So while the government and billionaires are giving our kids a head start, your loved ones can start helping you build wealth with every gift you receive. Because the most powerful source of wealth building in your life may not be a billionaire or a government program. It may be your own village. Put them to work, starting with your next celebration.
With lots of love,
Your godmother Ada
