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Comment by deelowe | Hacker News Reader

Am I rich because I've funded a 529 plan for my kids? This story is way overblown.

I was always confused because it seemed like his dad bought a handful of shares in a mining company and people think this means he owns it? Like if I went and bought 10 shares of Apple suddenly Tim Cook is answering to me? Elon seems to have had a nice upper-middle class/lower end rich childhood, but from what I've been able to discover he's not some trust fund baby. He wasn't the money guy at Paypal I don't think, but he did manage to turn his Paypal money into successful car and rocket companies.

The high school he went to is private and not cheap. But it's not the you-have-to-own-a-mine type of place.

You might be rich if you funded the 529 plan with proceeds from your emerald mine. Outside of that scenario, your kids' 529 plan doesn't really have anything to do with this.

How much money you have makes you rich or not rich, not where it came from.

Yes, that was my point.

Someone with an ownership stake in a mine that produces material with a variety of industrial and commercial uses is not necessarily rich. But that person is in a relatively tiny group compared to the group containing all parents who are able to contribute to their children's educational expenses. And the "owns <part of> a mine" group's average net worth is probably a fair bit higher than that of the "can contribute to the kid's college" group.

Hence, if you own an emerald mine, you might be rich.

And if you own a failed emerald mine you might be poor. If you own an emerald mine that just barely broke even (admittedly that is a bit unlikely), you might end up middle class in the end. Of course you can also end up being obscenely wealthy from such a venture.

I don't think anyone is suggesting elon musk rose from being a homeless person to a billionaire. I guess this internet dispute is whether he made his own money, or inherieted it (e.g. like trump). Whether or not his parents owned an emerald mine doesn't really shed much light on that debate. Its entirely possible they were moderately wealthy but the emerald mine wasn't super lucrative and musk still made money mostly by means of his own combination of skill and luck.

"Regarding the so-called “emerald mine”, there is no objective evidence whatsoever that this mine ever existed. He told me that he owned a share in a mine in Zambia, and I believed him for a while, but nobody has ever seen the mine, nor are there any records of its existence." - Elon Musk, https://twitter.com/elonmusk/status/1654971702571331584

"I will pay a million Dogecoin for proof of this mine’s existence!" - https://twitter.com/elonmusk/status/1646272562488569857

This thread is a good example of how silly the debate has gotten.

"You're trying to tell me Musk's family is rich? He couldn't even pay for SpaceX himself, how could he be rich?!"

"I've put away some cash for my child to go to college, are you saying I'm as rich as Elon Musk?!"

It's all just so ridiculous. A lot of people here seem convinced that there are only two arguments to be made: that Musk is a spoiled trust fund baby that deserves no credit for everything, or that Musk was a hard-scrabble self-starter that did everything on his own. Maybe, just maybe the truth is somewhere in the middle?

You're suggesting that Elon Musk has family wealth because his father funded his living expenses in college.

@deelowe points out that they're also saving to fund their child's expenses in college.

Therefore, you're either suggesting that @deelowe has family wealth or you're arguing in bad faith.

I'm not arguing in bad faith. I'm making specific points that, for reasons unknown, @deelowe and yourself are making a wider inference from.

The post I replied to said:

> I'm not sure where this rubbish conspiracy came from but if there was Emerald Mine money there wasn't much of it.

My reply clarified that there was indeed an emerald mine (according to Musk's father) and that it paid for his college living expenses. I then went on to say that an inability to pay for SpaceX does not mean you are "not rich".

> you're either suggesting that @deelowe has family wealth or you're arguing in bad faith.

But that's silly too. With no numbers attached "family wealth" doesn't mean anything. Almost all families have "family wealth", if anything the bad faith argument here is trying to suggest that all wealth is somehow equal.

You'll note in my original reply I didn't even say that Elon's family was inordinately wealthy, just that the mine was real and that it paid for his college. Any "bad faith" on top of that is your own interpretation, not my words.

IIRC the claim is that Musk’s dad’s share was worth 50 grand USD when he bought it. There are individual emeralds worth that much. It likely wasn’t much of a mine if it did exist. A tiny artisanal mine.

> It's all just so ridiculous.

And yet so fascinating, and ubiquitous.

Human consciousness is a hell of a drug.

I think the point is the only evidence that you provided for the argument that “Musk got his wealth from his family’s emerald mine” is that his parents paid for his college expenses. And that is, in my and many others minds, is a pathetically weak argument.

Full disclosure - my parents paid for a lot of my college expenses. At least half of the people who go to Ivy leagues have parents that will pay for their college expenses. It’s almost entirely, if not completely irrelevant to his work at PayPal, the founding of SpaceX, and the building of Tesla.

So it’s baffling (to me, at least) that it keeps getting brought up as a reason to hate Elon Musk. It feels that people want to find reasons to deeply hate this person, and they through anything they possibly can against him, nonsensical or not.

> I think the point is the only evidence that you provided for the argument that “Musk got his wealth from his family’s emerald mine”

But at no point was I making that argument. The OP suggested (as Musk has many times) that the mine literally didn't exist. I was simply pointing out that according to his father it very much did exist and paid for Elon's college.

I funded a 529 plan with $40,000 19 years ago. It lost money.

529s are a fucking scam.

I'm starting to feel the same, honestly. Do you know if it was just your plan or is there something where I can find more info showing how these are not smart investments?

They are not smart investments because you have no control over where the money is pointed in the plan.

So if you call your advisor, and say "i want my 529 to only focus on X" they tell you that you have no control over the index and the plan will be the most conservative 50-year-old actuary data which has no fucking clue where the market is heading and then berate you for when their 529 index loses value...

I was ready to pay that investment banker's family a personal visit with skills that I have accumulated over a number of decades.

This is not true in most states. My 529 is just a normal investment account like my ira.

Any investment that includes stock can go down in value. That doesn't make it a scam.

Crazy, what did you invest it in?

How? The market has generally risen since then

Well, 529s are a good way to avoid capital gains taxes on investments dedicated for education. In your case, they wanted to be extra sure that you would avoid capital gains taxes, so they lost money.

I'm more than a little curious on this one. How did you lose money in a 529? Are you saying you lost opportunity cost of having put that money somewhere else?

In 2004 VTI was about $55. It's now $200. On a 19-year time frame a broad market index fund like VTI is the only thing you ought to have been invested in.

Perhaps the scam is when banks let people choose their own investments rather than have it be fully managed.

The thing was that it was invested by family, in banks that failed, and failed and failed... being collapsed and bought/bailed out through the rape...

And so the account ended up continually ending up in the hands of even seedier banksters....

I didnt discover this until after my grandmother passed, and I was able to trace it back through various funds - and they just raped the account...

I don't know what 529 you guys invested in but Utah's 529 which anyone can use whether or not they live in Utah allows you to invest in regular old Vanguard funds like VSTSX. They also offer target dates funds that handle gradually shifting to a more conservative allocation as enrollment date nears if that's what you want.

I agree that not all 529s are good, only 2 plans received a gold rating from Morningstar in 2022: Utah & Michigan. I wouldn't choose anything other than those.

Bullshit. 529 plans are great for tax avoidance. If you picked the wrong plan, or the wrong investments within that plan, then that's on you. Try a reputable, low-cost plan from a company like Vanguard.

What did you invest in? If you just did S&P 500 it would have gone up pretty significantly.

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