🍽️ Endowments under fire

Plus: your rent can improve your credit score, change your mindset, what are the best inventions of 2023, and more...

Together with

Hey Future Funders family,

Anyone dressing up as Elsa across the country rejoice… we are heading into the most frozen Halloween we’ve seen in years (except Florida of course, where we’ll likely still melt before we get home).

Okay let’s get to it…

💬 Quote Of The Week

“It's like no one in my family appreciates that I stayed up all night overthinking for them.”


🥗 The Appetizers

News Bites You May Have Missed

🪙 Cryptocurrency is making a comeback. The entire industry was in an uproar this past week as BlackRock basically pre-listed a Bitcoin ETF that is awaiting regulatory approval. As we talked about a few months ago, there’s no simple way to invest in cryptocurrency right now and many large firms— including BlackRock— are trying to make this easier by creating ETFs (basically think of an ETF as a stock that you can buy and sell whenever you want).

Our take: None of these firms have approval yet from the regulators, but this move was seen as a sign that approval is coming. Investors know that once these ETFs go live they are going to have to buy lots of Bitcoin, thus pushing the price up for current holders (hence, the rally this week).

Most think approval is likely coming in December or January, and while we aren’t personally invested in cryptocurrency, having these large players enter the conversation does at least tell us crypto is not going away anytime soon (as some believe).

👑 The U.S. economic growth is hot, but top financiers are not impressed. The U.S. economy grew 4.9% in the third quarter— the fastest pace all year— aided largely by consumer and Government spending. But Wall Street’s head honchos are, spoiler alert, not impressed. While speaking at a recent conference in Saudi Arabia, they didn’t have a very optimistic view on the economy, with most of them expecting some kind of downturn soon.

Our take: Economic growth of 4.9% in the third quarter measures something that has already happened, so we would place much more weight on what people are saying right now. As we noted last week, company earnings reports (we are in heavy reporting season for another week or two) have been poor on the whole and companies sound nervous as we look into 2024.

However, before we get all doom and gloom here it’s worth pointing out that none of these “Wall Street experts” predicted the 2008 collapse accurately (so maybe take what they say with a grain of salt).

🍽️ The Main Course

Headlines That Matter

College Endowments Under Fire

🚀 What’s happening: Top donors at certain universities across the country are pulling their donations and endowment funding over leadership being slow to denounce the horrific October 7th terrorist attack, while also allowing student organizations to openly praise and express their support for terrorism.

How do endowments work?

Most universities and colleges are considered non-profit organizations, which means that any donations they take or investments they make are not taxable (while this statement is not entirely true as some universities do pay some small amount of tax, it’s fair to say they are not taxed nearly like for profit entities).

Endowments are a collection of these donations that have been invested over time and grow tax free. These donations, in most cases, are earmarked for a specific purpose based on the wishes of whomever gave the gift (like if you want your donation to specifically go towards athletics), but there are usually some funds that are given without designation and can be spent as the school sees fit.

How big are endowments?

The total current value of all endowments in the United States is roughly around $900 billion. That said, similar to the current state of personal incomes in the U.S., only about the top 5% to 10% of schools have endowments over $1 billion (the median endowment in the U.S. is only around $200 million).

Endowments have been playing a larger and larger role in school budgets over time and help to support faculty, research, student scholarships, and other school priorities.

For example, Harvard, which currently has the largest endowment in the United States at around $50 billion, uses about $2 billion every year to help cover university expenses (for number geeks like us who want to check out Harvard’s endowment numbers you can read their annual report here).

👪 Closer to home: While there is a real debate around what the taxation of some of these endowments should be, our concern for families lies more with what this means for the future education of our kids.

When big time donors start closing their checkbooks, we expect one of two things to happen— these universities either meet their demands (most are asking for a change in leadership), or forgo the donation and make up the lost income in other ways.

Large universities like Harvard will probably be ok, but smaller institutions will be hurt much more as there is often a trickle down effect. We fear that many of these universities will be forced to make the decision to increase tuition rates even higher.

Times change, and we debate at our dinner table all the time if college, as we once knew it, will even be worth the investment by the time our kids get old enough (or if more acceptable alternatives will arise). These are important conversations to have at your table as well (remember, there is no “right answer”, just what is right for you).

Here are some further resources to help:  

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Dinner Discussion ❓

Which public university has the largest endowment?

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No peeking! Answer is below.

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🥘 The Side Dishes

Your Money And Your Kids

🏡 With housing so unaffordable these days, we loved the story of this start up that created an app to use rental payments to improve you credit score.  

📱 Not that we needed any more proof, but 41 states just sued Meta claiming that Facebook and Instagram are addictive for kids. 

💰 If we want to achieve our financial goals, dealing with our own anxiety can sometimes be half the battle (we are in that bucket!).

👩‍⚕️ Amazon is now considering offering veterinary telehealth in an effort to compete with Walmart. More competition the better.

💸 Homebuyers and real estate brokers everywhere are watching a pivotal court case that just started in Kansas City, Mo. The result could lead to the elimination of broker fees entirely when selling or buying your house.

🍟 Is it Fry-day yet? Now McDonalds is making it even harder to pass that drive thru by offering free fries every Friday for the rest of the year.

🏭 The yield curve has been inverted for a while, and historically that has accurately predicted a recession. If you just went “huh?” but want to learn more, we found an easy breakdown that will make you feel like an expert.

💌 If you have been painfully watching your friends play the dating game, Tinder now (finally!) allows you to play matchmaker for them.

🏠 A recent Redfin study suggests that people now need to make an average of about $115,000 to afford a home. That is almost $40,000 above the median household income in the U.S. Aye carumba.

🦾 The best inventions of 2023 list was released by Time, and to no surprise, the list is full of AI.

🍨 Dessert

This Week’s Deals And Reads

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🍊 We didn’t know this but many children's vitamins include added sugars, dyes, and gummy additives. So instead, we tried Hiya and they offered our readers 50% off your first order if you use the code LIVEINLOVE at checkout.

*our goal is to always keep this newsletter free. If you buy or subscribe to something through our newsletter we may earn a small commission, at no added charge to you, in order to help us keep the lights on

Dinner Discussion ❓

Answer: The University of Texas System has the largest public school endowment at about $43 billion. The largest university endowment including both public and private would be Harvard at about $50 billion (full list here).

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Together With Masterworks

Today’s issue was sponsored by Masterworks, the first platform for buying and selling shares representing an investment in iconic artworks. Check them out here.

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