An American billionaire has come up with his own idea that will allow every citizen of the US to retire as a millionaire.
Bill Ackman, 54, CEO of Pershing Square Capital Management has proposed a new scheme that would see the government handing over cash to every single American citizen.
Ackman’s ‘birthright’ scheme is designed to even out the wealth inequality problem in the US, by allowing those ‘with no investment assets to participate in the success of capitalism.’
“To do so, we need a program that makes every American an owner of the compound growth in value of corporate America,” Ackman told The New York Times. “The government could fund investment accounts for every child born in America, a program we could call Birthright.”
The scheme would invest in zero-cost equity index funds, which would prevent the owners from withdrawing from the pot until their retirement, meaning it would compound tax-free for 65 years or more.
Normally, Americans see equity returns of 8% annually, meaning an initial investment of $6,750 at birth, could be worth more than $1 million by a retirement age of 65, or up to $2 million by the age of 74.
According to the average number of births in America each year, the scheme would cost the government around $26 billion annually.
The billionaire knows what he’s talking about when it comes to investment. Ackman managed to make an eye-watering $2.6 billion from the coronavirus market crash, after investing $27 million back earlier in March.
“The American dream has become a disappointment, or worse, for too many,” Ackman said. “In addition to helping all Americans build wealth for retirement, Birthright would encourage greater financial literacy, and give all Americans the opportunity to participate in the success of capitalism.”
This universal basic income (UBI) program isn’t entirely new. Former presidential candidate Andrew Yang proposed his own UBI program titled Freedom Dividend in 2019, which consisted of paying Americans $1,000 a month, or $12,000 a year after they turn 18.
An increasing number of nations have considered implementing UBI programs that would ensure a minimum wage for everyone in the country, off the back of the economic fallout caused by the ongoing pandemic.