This is a topic a lot of Bitcoiners think about: How exactly can I save, stack away more sats, so that my kids will have enough or could live good lives?
Mainstream media has gotten hold of this idea too, with parents stacking their 529 collage savings plans with bitcoin-products:
While few financial advisers would recommend going all-in on crypto, putting a portion of a baby’s portfolio into Bitcoin arguably aligns with certain aspects of standard financial wisdom. Investors with longer time horizons can afford to take on more risk, and a small amount of crypto could be a part of a diversified strategy
Some parents are turning to crypto to supercharge their college savings. Returns on traditional stocks just won’t cut it, the thinking goes
Reasons?
- stock markets don't have enough returns
- bitcoin outperforming everything
- college is/will remain expensive
a subset are eschewing the old ways, pushing instead to pile up enough Bitcoin to help their children in the years ahead. Some say it’s because stock gains aren’t good enough. Others view it as reasonable diversification.
Not that surprising that the logical outcome stares them in their faces: diversify into higher risk
Also, this is the cutest:
Bobay’s kids, now four and seven, each have their own wallets. The seven-year-old asks each day what his Bitcoin is worth, and wants to use his money from the Tooth Fairy to buy Bitcoin.
Now, everybody wants to "get rich" by being early to the "next bitcoin thing," whatever. And some of that involves siphoning off real wealth from the (dying?) fiat system: I wrote this in a MONEY CLASS about a month ago (#839329):
A panacea for the world bitcoin might be, but the more people make this wealth journey by riding bitcoin's monetization phase, the less far that journey will take you and the fewer people it can carry. Getting on bitcoin isn't a universally applicable fix for getting the whole world rich. The reward gets smaller and smaller for each additional person until all the monetary premia is drawn from every other asset (#830458) Not repeatable. Bitcoin's success is wrapped up with a lot of people seeing their fiat money balances dwindle to nothing, their fixed-income streams dwindle to pittances, their overleveraged real estate holdings collapse in (real) value.
Matt Levine, of Bloomberg Money Stuff fame and whom I quote here quite a lot, had this to say about bitcoin in college saving funds:
magic internet money cannot be a source of general prosperity. Not everyone can get rich by being early to crypto. Sometimes you have to work and save and invest in economic activity, or at least in casinos, to pay for goods and services.
This isn't quite right.
Rich, no; and everyone, of course not, but a world using bitcoin for money _achieves the same thing as the stock market productivity redistribution, but in a more direct, non-roundabout way. Here's Levine:
if you put aside, uh, frankly kind of a lot of money every month, and if the economy (or, rather, the equity value of publicly traded companies) grows at a faster rate than college tuition does, then you will have enough money to pay for your kids’ college educations.
This is not a particularly inspiring vision or anything. It requires (1) economic growth, (2) college tuition not outpacing growth by too much and also (3) you putting aside kind of a lot of money anyway, because college is expensive and stock market growth is not a magic cure for that. But it is a sensible vision. It links your ability to pay for college with some use of your money, some productive activity in the economy.
Money does that too---in a more general, broad-based, fairer and less distortionary way; money demand, stacking sats on top of each other when those sats are used in the real economy, makes relative prices of goods and services lower than they otherwise would have been. The "wealth" effect/productivity boost from savings get distributed to all money holders rather than to (financial) capital owners 1. That's good.
Using the stock market for that is a strange, fiat, late-20th century type of thing (#830458) that was really a wrong turn in economic history.
Non-paywalled here: https://archive.md/rzpi9
The problem is, if you save it for them and they inherit it without any consequences, will they understand the value of it? That is the problem that I will have to face in the future. But I will stack sats regardless, but it may not go to them. We will see as we approach the future, and hopefully it doesnt come for a long time.