💰 5 Fact Friday: $6.25B For The Kids

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CRYPTO
1. Bitcoin’s BOJ-to-BOA Rollercoaster 🎢

Two weeks ago, we talked about Bitcoin sitting in extreme fear territory. The Bitcoin Fear & Greed Index fell to 11, a level that usually screams “everyone panic”… right before the bottom forms.

Since then, BTC has been whipsawing up and down in even more dramatic fashion than usual. Let’s break down why.

The Slide Toward $83K: Blame Japan (Yes, Really)

Bitcoin dipped below $84K this week, its lowest level since April. And the trigger came from a place that rarely moves U.S. markets: the Bank of Japan.

Here’s the deal:

• Japan has kept near-zero rates for over a decade

• So… institutions borrow cheap yen (<1%) and swap it for U.S. dollars

• Then, they invest in higher-return assets (U.S. stocks, bonds, Bitcoin)

• That’s the Yen carry trade

So when the BOJ hinted at raising rates earlier this week, those carry trades started unwinding. Investors sold risk assets, bought yen back, and BTC took a hit right on cue.

And yes, this even pushed U.S. yields higher. Gotta love global finance.

The Rocket to $94K: Two Huge Wall Street Shifts 🚀

Just when it looked like Bitcoin might drift below $80K… boom. It ripped back above $90K after two major announcements:

1. Bank of America joined the crypto allocation club.

Starting in January, the bank’s Wealth Management group will allow advisors to allocate 1-4% of client portfolios to Bitcoin ETFs.

2. Vanguard and Charles Schwab finally caved.

After years of rejecting crypto, Vanguard will now allow its 50+ million clients to buy Bitcoin and Ethereum ETFs. Schwab then added fuel to the rally by revealing it will open crypto trading in 2026.

What’s the takeaway?

Bitcoin’s volatility isn’t random. It’s macro-driven on the way down (BOJ), and institutional-driven on the way up.

With more Wall Street giants settling around a 1-5% BTC allocation, Bitcoin is slowly graduating from “fringe side bet” to “credible portfolio slice.”

PERSONAL FINANCE
2. Dell Drops $6.25B For America’s Kids 💸

Michael and Susan Dell just made one of the largest philanthropic gifts in U.S. history, a $6.25 billion pledge to help seed long-term investment accounts for 25 million American children.

If you’ve heard chatter about “Trump Accounts,” here’s the quick version:

What Trump Accounts Are

Starting in 2026, the Treasury will deposit $1,000 into an investment account for every newborn from 2025 through 2028.

Great for babies… but what about the kids who missed the window?

That’s Where The Dells Come In

Their gift fills the gap by giving $250 to all U.S. children age ten and under, born before 2025, living in ZIP codes with median incomes under $150K. Parents just open the account, and the seed money lands automatically.

While $250 may not sound life-changing… the math says otherwise:

• Invested until retirement at 7% real returns, that $250 grows to $20,000+

• Add even tiny contributions ($10–$50/month), and the totals explode into six- and seven-figure outcomes

• Funds stay in low-cost U.S. equity index products, locked until age 18, then roll into an IRA for adulthood

But The Biggest Benefit Isn’t The Money

Research shows that kids who grow up with investment accounts, even small ones, are more likely to:

• Graduate from high school and attend college

• Spend less, save more, and open retirement accounts

• Maintain higher credit scores and accumulate more wealth

• Build healthy money habits early, since core behaviors form by age seven

And the impact doesn’t stop with the kids.

Studies show a real intergenerational spillover: parents of children in financial education programs saw a 26% drop in default risk and a 5% bump in credit scores.

In short: the $250 is nice… but the financial identity it helps create is the real superpower.

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FAST FACTS
3. Fees, Floods, And Falling Rents 📉

✈️ TSA launches $45 ID fee: Starting February 1, any traveler without a REAL ID or passport must pay a $45 fee on pay.gov and show a receipt at security. The fee is good for 10 days, but TSA warns that security will be slower. [Read]

🏠 Zillow removes climate-risk ratings: Zillow ditched its flood and fire risk heat maps after complaints that the scores were scaring off buyers. A link now replaces the visuals. Redfin, which continues to show its risk scores, found that high-risk homes sell for about 1% less. [Read]

🏢 Rents fall as vacancies surge: National median rent slipped 1% to $1,370, marking a fourth straight monthly decline. In all 50 of the largest metros, renting is now cheaper than owning. [Read]

🎬 Bidding heats up for Warner Bros: Netflix, Paramount, and Comcast submitted second-round offers for Warner Bros. Discovery, which is reportedly targeting a $75B valuation. Buyers are eyeing assets like HBO, DC Comics, TNT, and the Harry Potter and Lord of the Rings franchises. [Read]

⛽️ Gas prices drop to 4-year lows: U.S. gas fell below $3 per gallon for the first time since 2021. Californians now pay a $2 premium compared to drivers in states like Texas. [Read]

🤖 OpenAI declares “Code Red”: Sam Altman paused development on ads, agents, and Pulse to focus fully on improving ChatGPT. A new reasoning model drops next week, coming just after Google’s Gemini 3 stole the spotlight. [Read]

🥈 Silver rockets past gold: Silver has surged 102% this year, smashing records above $58/oz and outpacing gold’s 62% rally as mine output drops, stockpiles shrink, and industrial demand from EVs and solar panels explodes. [Read]

TAX
4. The Backdoor Roth Playbook 🔑

If you make too much to contribute to a Roth IRA the normal way, don’t worry. The tax code left the back door unlocked. Actually, two of them.

The Backdoor Roth and the Mega Backdoor Roth let high-income earners stash after-tax money into a Roth, where it grows tax-free forever.

Here’s how both versions work, who they’re for, and how to avoid tax mishaps.

1) The Backdoor Roth (IRA Edition)

Who it’s for: High-income earners above Roth IRA limits who still want Roth exposure.

How it works (2 steps):

1. Make a nondeductible Traditional IRA contribution: Up to $7,000 for 2025 ($8,000 if 50+). This is after-tax money.

2. Convert that balance to a Roth IRA: Usually done immediately, so any growth doesn’t become taxable.

Straightforward in theory. But there are traps.

⚠️ The Tax Traps

1. The Pro-Rata Rule:
   If you have any pre-tax IRA money (Traditional, SEP, SIMPLE) on December 31st, the IRS will treat your conversion as partly taxable.

   Example: Let’s say you have $93,500 in a traditional IRA and you add a
   $6,500 nondeductible contribution, giving you a $100,000 balance. If you ‘backdoor’ that $6,500 into a Roth, it would be 6.5% tax-free and 93.5% taxable.
   Solution: Roll old IRA money into a 401(k) before doing a Backdoor.

2. Don’t accidentally deduct the Traditional IRA contribution:
   You must file Form 8606. If not, the IRS assumes your basis is $0 and taxes the whole conversion.

3. Convert quickly:
   Any growth between contribution and conversion gets taxed.

4. Married filing jointly?
   Pro-rata is applied per person. Your IRA balances don’t affect your spouse’s, and vice versa.

2) The Mega Backdoor Roth (401k Edition)

Who it’s for: People with a 401(k) that allows after-tax contributions and in-service conversions (not all plans do), or self-employed folks who control their plan design.

Why it’s powerful: Where a Backdoor IRA caps you at $7k–$8k, a Mega Backdoor lets you push $40k–$60k+ into a Roth 401(k).

The process is similar: You make after-tax contributions, then convert them into a Roth—but without the Pro-Rata Rule. That means you can convert only your after-tax money, even if your 401(k) has a huge pre-tax balance.

In summary:

• Both rely on after-tax contributions

• Both tax any gains before conversion

• Both result in money ending up in a Roth

• The Mega Backdoor avoids pro-rata issues and allows far larger contributions, but fewer people have access since it requires specific 401(k) plan features

If you’re a high-income earner who wants more tax-free growth, these two backdoor options can be game-changers.

TRIVIA
5. How Much Did We Spend Last Weekend? 🛍️

Black Friday and Cyber Monday weren’t just busy — they broke records.
Holiday shopping jumped 9.1% on Black Friday and 6.3% on Cyber Monday, as Americans clicked and tapped their way through the long weekend.

So here’s your question:

How much did U.S. consumers spend from Thanksgiving through Cyber Monday this year?

A. $780 million
 B. $5.9 billion
 C. $44 billion
 D. $320 billion

👉 Tap to Reveal the Answer → 

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