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In March, one of the members of my men's group became a new father and I decided to open a 529 Plan for his newborn. The 529 is designed for education, including grade school, college, trade school, books and laptops. The beauty of this education account is that you get compounded growth that's 100% tax-free.
For example, If you deposit $10,000 into a 529 Plan for a newborn, and the stock market produces average historical returns, that $10,000 could grow to $60,000 by the time they begin college. Because of the tax-free feature, you'll have, approximately, 20% more money than the person who just saved money without using the 529. In this example, that 20% bonus is essentially an $11,000 gift from the IRS!
I have been opening these accounts privately for family and a few close friends for years. This time, I had an idea: Why not invite the members of the men's group to join me?
It felt strange to ask; even though the minimum contribution required is only $15 I wasn't sure how it would land. But everyone loved the idea… "You mean we get to be a part of this baby's education?!"
The thought of doing it together, of being part of something that would literally shape the future of another human being sent a wave of purpose and excitement through our group.
We imagined showing up at his graduation in 22 years, smiling, knowing that we made something meaningful happen. We felt connected to something that will outlive us.
We had created a giving circle, and gained a shared stake in another person's future, and in each other.
How to Create a Giving Circle
You don't need a lot of money or a formal structure. Money by itself is kind of flat. But when it moves through a community—when friends pool together around a cause they believe in, or a group of parents all contribute to each other's kid's futures—it stops feeling so lackluster. The giving becomes contagious. One person's experience inspires the next. The whole ends up being greater than the sum of its parts.
Research on communal giving shows that participants report higher levels of well-being and happiness than those who give alone. There's something about doing it together, and witnessing the impact, that amplifies everything.
I also suggested to the new father to invite other friends and family members to take advantage of this giving opportunity. What if, instead of his family buying another $15 toy that they probably don't need or already have, they give that $15 to an educational fund? 529 Plans make the whole process easy - you just forward a gift link to each person and they can make their gift anonymously.
If you have any questions about 529 plans, feel free to
reach out.
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