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Part 3: Equities birth certificates to get people onto the 1st rung of the wealth creation ladder. 

People often talk about getting onto the property ladder, but property is only one type of asset used for wealth creation.

Equities is the primary asset used by the wealthy.

Imagine somebody born into a poor family who on her/his 21st birthday receives a certificate that in real inflation adjusted terms represents more money than they can earn in a year at a minimum wage.

That is a feasible scenario if that person is given an Equities Birth Certificate and cannot cash them in for at least 21 years.

Let’s run some numbers for the donees/recipients. Assume $1,000 invested at birth and and an annual real return (after fees, taxes and inflation) of 3%, compounded over 20 years. Age 21 donees will have $18,0611 as per this handy compound interest calculator.  Now assume that person’s only work prospects are minimum wage in America ie $7.25 per hour and they work 8 hours per day for 20 days and 12 months (no holidays), they can earn $13,920 per year. $18,0611 could change their life.

That $1,000 seed money invested at birth comes from donors – more on them later.

At age 21 donees can choose to cash in whatever % they want. Some will leave it invested ‘till retirement. Some will blow it all on sex & drugs & rock ‘n roll. At 21 it is their call. Before the age of 21 it has to stay invested.

These Equities Birth Certificates have three values:

cash value. $18,0611 is a meaningful amount.

learning value. Learning about the compounding value of equities in such a simple visceral way can also change their life.

value of popular commitment to a free market system. This is where the interest of donors and donees converge. Donors want/need a society committed to a free market system, so that people will resist the siren songs of authoritarians of both right and left; because they see that free market innovation puts money in their pockets.

Now let’s run some numbers for the donors:



The equities Birth Certificate concept requires government buy in, as it is critical that donees can accumulate tax free and so that Donors can get a tax deduction. The first countries to do this will prosper from a lot of wealth creation.

No market timing, but free education about the value of being greedy when others are fearful and vice versa. In most 20 year periods, equities have yielded positive returns, so even babies born during the late stage of a bull market will usually do ok.

However the babies born when the conventional wisdom hates equities will do best. There are over 400k births every day, so those babies fortunate enough to be born when this magazine trumpeted “the death of equities” (image source) will do well – and free education about the value of being greedy when others are fearful and vice versa will be them comparing the value of their certificates to those who invested when equities were being hyped by the media.


The equity assets on the birth certificates must be fee-free and global. This will require some global index provider to become a partner.

Some subjects are too complex for our short attention spans, so we do 4 posts one week apart, each one short enough not to lose your attention but in aggregate doing justice to the complexity of the subject. Stay tuned by subscribing.

Part 1

Part 2

Part 3

Part 4

Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.

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