Month: March 2026

Have you ever wondered why the rules of golf are so complex and difficult to understand? 

The sport is truly unique. In all other sports, the officials are primarily there to observe the play and ensure that the rules are followed.  In golf, the officials almost never make calls or observations.  They spend virtually all of their time simply explaining the rules to the participants. 

No one ever argues with a baseball umpire about whether or not the rules that apply to a fair or foul ball are being followed.  They argue with the Ump about his or her observation.  Billy Martin never turned his hat backwards, kicked dirt on the home plate umpire’s shoes and offered him his glasses because the Yankee Manager did not understand the nuances of determining what constitutes a fair or foul ball.  Billy thought the Ump blew the call. Was Reggie Jackson’s potentially game winning line drive inside or outside of the foul line? Billy would subsequently be tossed out of the game for disagreeing with the accuracy of the official’s call, not the underlying rule.  When Dick Butkus nearly decapitated Ron Kramer, Vince Lombardi didn’t politely question whether the official’s interpretation of the rules pertaining to pass interference had been accurately applied by the refs.  He was screaming that Butkus hit him before the ball arrived.  Vince saw it as pass interference and he thought the ref blew the call.  Meanwhile the medical staff are retrieving Ron’s head from his helmet and reattaching it to Kramer’s body so that he will be available for the next play.  Finally, John Mcenroe wasn’t questioning the comedic qualities of the umpire or the rules pertaining to the legality of his serve when he exclaimed “You can’t be serious!!”.      

In all sports, other than golf, the participants know the rules and arguments ensue about the accuracy of the officials’ “calls”.

In golf, nearly all of the meetings between players and officials are centered around the accurate application of the rules. This happens because the rules are so obtuse and complex that no one, not even the professional golfers, know what they are. It’s a safe bet that amateur golfers, playing in a club tournament, don’t know a third of the rules for the game they are playing.  In spite of what my wife may think, golfers are not dumb.  The rules are just that convoluted.

How did this happen? 

Let’s go back to 18^th century Scotland where the game evolved.  Early golf courses were not eighteen hole layouts.  The Scots simply built as many holes as the plot of land allowed.  The participants would gather for a rousing game of golf and it almost always would last for eighteen holes.  A particular course may only have five holes but the players would play them in sequence until they aggregated eighteen holes.  All of the early players agreed that eighteen was the right number.  Why?  Because all of the players started the contest with a pint of Scotch.  On a regular basis, a Scottish gentleman would finish his pint after playing eighteen holes. 

Nobody wanted to stay out in the cold, rainy, windy landscape of Scotland without proper fortification, so they called off the match at eighteen, went back to the club house, replenished their supply of whiskey and wrote the rules of golf.

When the meticulous nature of Scotsmen intertwined with a pint or two of whiskey, the strange rules began to take shape.  Angus says to Ian “I dinna think it fair that you splashed the ball in the lake and dropped another with no ill effect.  It shoulda cost you something”!  Ian responds,  “Aye, an additional stroke may have been merited. However, my initial shot just trickled into the lake and I dropped the ball less than yard from the same spot.  You pounded one sixty yards into the lake and dropped the second one all the way up to the front of the lake and on the green.  I dinna think that was fair.”  Angus replies, “Aye, maybe we should give those a one shot penalty and drop them where they first fly over the edge of the water hazard. And what about Bobby’s shot?  With full intention, he pounded one in the lake past the green so he could get a free drop on the putting surface.  Not at all fair.  We should penalize him a stroke!”  Ian replies,  “That’s not enough, we should give him one stroke and make him hit another one from the very spot he hit the first one.  How can we determine the difference between hitting one in the lake and hitting one intentionally in a lake beyond the green?  Let’s put circles around the lakes.  If you are in a red circle water hazard, you drop next to it.  If you’re in a yellow one, you get the ‘one stroke penalty and replay the shot’ remediation.”  Bobby pipes in, “I’ll have another Dewars.  Aren’t we being a little harsh? The poor hacker just lost a feathery and now we make him add a stroke. What if there is no good place to drop the ball?  Can’t we at least let the sod go back to a better spot to make the drop?”  Angus protests, “Nay!  He bought the package, he needs to pay!  You can’t let all of these hacks back up and drop the ball anywhere that suits them.”  Ian chimes in, “Let’s limit where they can make the drop.  How about straight back from the point the ball entered the water hazard.  To keep him honest, we draw a line from the point the ball entered the hazard and the flag. Go back as far as you want but you have to stay on that line.  A very narrow option.  I need more Glenlivet.  Bring me a tumbler of the 20 year variety!”

As with all alcohol consumption, the trio is stunned with how ingenious they have become.  In their minds, they have just created the perfect set of rules for balls hit into water hazards.  It doesn’t occur to them that most golfers will not understand all of the complex scenarios.  It is a little like drinking whiskey and dream designing every element of the first jet propelled airplane a hundred years before the Wright Brothers.  Seems like a great idea at the time but strangely, it is a little difficult to successfully get the thing to fly in the real world.           

Angus, Ian and Bobby have a very enjoyable afternoon swoozling scotch and hypothesizing.  150 years later we are stuck with all of these ridiculous golf rules. The threesome hope to do this every Saturday for years to come. They think:  “Okay, we start the oiling process on the links, then we settle in for three or four more hours of ‘rules documentation’.  We reduce the mental stress of rule writing with judicious use of the appropriate libations.”  Angus has explained to his wife that the three friends are on a mission for the benefit of mankind.  It is imperative that they sequester themselves in the club every Saturday and craft “The Rules of Golf”. 

After years of evolution, very likely with the same development process described above, we are now saddled with a 544 page rule book.  That’s right.  The “R&A and USGA Official Guide To The Rules Of Golf” is 544 pages long.     

Go out to amazon and buy the book.  Start reading anywhere.  Very soon, it will be clear that the entire volume was drafted by people in an alcohol induced haze.  Sure, the same crew could have written a solid book of rules in less than fifty pages and if they did it before they uncorked the Cutty Sark, we would understand it.  But who can blame them.  Think of all the glorious Saturday afternoons that would have been lost if they had changed the process.

This post is a public interest essay and not the normal comedic posting.  For some unusual reason the topic of the $1,000 gift to newborns established by the Federal government in the One Big Beautiful Bill Act came up at a casual dinner meeting with friends.  We all decided that we did not really know how it worked.  I offered to do some research and report back to the group.

We were all surprised at the significant benefits that may be available for newborns who qualify for the coverage.  The elements of the legislation are a little complex and convoluted.  In fact, not all of the mechanics for administering the program have been finalized.  However, it appears that the 530A Account (aka Trump Account) may have some very positive benefits.

The following document is a direct response to my dinner partners.  It occurred to me that  others might benefit from a better understanding of the law’s provisions so I am adding the document to the blog as kind of a public service announcement.  There is a lot of detail because that is the nature of governmental legislation.  However, hang in there because this can be a really terrific benefit for children who qualify for the Trump Account.         

Okay, after last night’s discussion, I did some research on the newborn savings account that is called the Trump Account or the 530A account.  The account was established by the One Big Beautiful Bill Act but the terms and provisions are not carved in stone.  I had to go to several different sites to get all of the elements of the legislation.  Most only addressed part of the provisions and were slanted according to the interest of the authors.  For example, the articles provided by investment companies were mostly suggesting that they had better ideas for better funding of your child’s future.  Most of the articles written by mainstream media loved the accounts if they were conservative outlets or saw a lot of flaws and pitfalls if they were liberal outlets.  The most complete and unbiased information came from Wikipedia.

The bottom line is that the worst case scenario will be that anyone who simply accepts the federal government funding will put their child in a position to accumulate approximately $15,000 of free money when they turn 27.

Let’s go through each provision in the context of our discussion. This is a little complex but I am trying to explain it as simply as possible. 

Who is eligible for the program?

Every child in America, under age 18, who is an American citizen and who has an established Social Security number, can set up an account.  For every child who meets this criteria and who is born between 12/31 2024 and 12/31/2028, the federal government will provide $1,000 of initial funding.   

In addition, private philanthropists and state governments are allowed to establish funding for other children outside of birth range for the basic plan.  If approved, such funding will also be included in the Trump Account or 530A.  For example, Michael and Susan Dell have donated $250 of funding for every child born from 1/1/2014 through to 12/31/2024, who live in zip codes where the median family income is less than $150,000. None of these children would be eligible to receive the $1,000 benefit offered by the Big Beautiful Bill legislation. Those who accept the Dell Funding offer, will be offered the same tax provisions as Trump’s 530A.   

How do you enroll?

Parents can request a form from the IRS (Form 4547) that will enroll their qualifying child.

In addition, the IRS will automatically enroll all qualified children who are claimed as dependents on their parent’s tax return.  To be claimed as a dependent, you must have a Social Security number. The IRS will use that data to automatically enroll these children and provide the initial $1,000 funding.

This supports Steve’s contention that a lot of low income children will miss out on the benefit.  Many low income individuals will not file tax returns and some of those who do may not claim their children as dependents and obtain the required Social Security number for them.

Can there be additional funding beyond the initial $1,000 contribution from the Federal Government?

Yes, and the funding does not have to come from the parents. 

Parents and friends can donate up to $5,000 per year to their child’s Trump Account.  These contributions are not deductible to the parents but they accumulate tax free in the 530A (Trump) Savings Account.

In addition to the $5,000 available to parents and friends, corporations can include a contribution of up to $2,500 per year to the children of their employees as a fringe benefit.  Some employers are committed to making a wholesale contribution and others are structuring the donation as “matching” benefit to their employees.  e.g. If the employee provides up to $2,500 per year, the company will kick in a matching amount up to $2,500. The employer’s contribution in any form is a tax deductible event for the corporation.  The employer contribution limit is $2,500 per employee not $2,500 per child.

States can elect to contribute to the accounts for children in their respective states.  As best as I can determine, the state contributions can be in addition to the parents and friends contributions and the employees contributions.  Very likely, the state funding would be a one time initial contribution similar to the Federal donation.

As noted above, philanthropists can contribute additional funding in a wide variety of formats.

I believe that funding for the 530 A accounts stops when the child turns 18.

Hypothetically, if a state agrees to contribute $1,000, the initial contribution could be substantial for some children.  In a particular year, the account could have contributions of $5,000 from the parents, $2,500 from the employer and $1,000 from the state aggregating a whopping $8,500 in that particular year. The parent only moved $5,000 into the account.  The additional $3,500 comes from others outside the family.

In addition, the philanthropic contributions can be piled on to make the annual contribution even bigger.

Again, this reinforces Steve’s argument.  Clearly, this can have very significant benefits to anyone who can afford to contribute but it may not really be an option for someone who lives paycheck to paycheck.

Who controls the investments in the Trump Accounts?

The Trump Accounts are an unusual form of investment.  Funding starts shortly after birth but the recipients cannot touch the accumulation for at least eighteen years.  When the law was passed, the legislatures wanted to strongly emphasize investment in a broad spectrum of US companies.  The investments would primarily be low cost mutual funds and ETF’s that would approximate the return of the Standard and Poors Index. This is an excellent investment strategy because, over long periods of time, no one can top the return of the S&P 500.  There will be very few approved options for investing.

The government is not managing the funds for the 530A accounts. However, to achieve their goals, the Feds will only allow investment in a few, carefully selected, mutual funds.  The servicing fees must be nearly nothing (no greater than .1%).  The basis for the mutual fund’s (ETF’s) investments must be equities in US companies.  In essence, most of the investments will be in S&P 500 stock funds.  There will be very few choices and they all will look a lot like the S&P 500 ETF. 

This may serve as another impediment to the very low income or indigent families. It appears that you may have to select an investment firm to manage your child’s Trump Account and you may have to make some investment decisions. It is possible that there is a default.  For example, if you open an account and do not designate someone to manage it or select investments from the limited menu, the government may assign a particular investment management option to your account.  This is conjecture on my part.  I could not find any references to what will happen if someone is enrolled in a Trump Account and does not select an investment manager.               

When can you take money out of the Trump Accounts?

No withdrawals can be made from the Trump, 530A, Account until the account holder reaches 18 years of age.  When the child turns 18, the Trump Account assumes a lot of the characteristics of an IRA.  In general, if the Account Holder withdraws money from age 18 to age 59½ , it will be taxable income to him or her and it will incur a 10% early withdrawal penalty.  It appears that the penalty will be waived if the withdrawal is used to purchase a house (up to a $10,000 limit), or pay for higher education expenses, medical expenses, and health insurance.  Disbursements for death or disability are not subject to the 10% penalty. These rules are still being solidified, however.          

How much is a child likely to accumulate?   

There are a lot of variables, however, using the historical performance of the S&P 500, financial professionals estimate that someone who takes the government’s initial $1,000 and does not receive any additional funding will accumulate approximately $15,000 by their 27^th birthday.  Someone who contributes just $250 per year is estimated to accumulate $51,000 by their 27^th birthday. Finally, a child who takes the initial $1,000 and secures contributions of $5,000 per year for 18 years will accumulate more than $742,000 by their 27^th birthday.  For many, it may clearly be possible to pile up more than $5,000 a year and it does not all need to be funded by parents. 

So there is the possibility of accumulating meaningful wealth.  Certainly a number of factors impact long term investing.  For many years we were popping along at 2% or less inflation levels.  $742,000, 27 years down the road, could be a nice number.  Today, the inflation rate for the month of January, was an annualized 6%.  Over 27 years, that will put a big dent in the buying power of $742,000.  Realistically, those who will be able to maximize funding of the Trump Account will accumulate $1 million dollars in their retirement accounts by the time they are 30. 

What is the investment community saying?

The financial advisors like the idea of grabbing all of the free money you can for your children but they don’t recommend putting your own money into the 530A accounts.  They say “Open the account.  Take the Fed’s $1,000 and any money the State may add.  Maximize the recurring contributions from your employer.  If it is a “matching” program, this may require some contribution on your part.  However, a 50/50 match will generate a 100% return on your investment right out of the blocks every year”.     

What the financial people do not like is the limitation on the types of investments offered by the plans and the restrictions on accessing the funds in the long run (you have to adhere to the IRA rules or pay 10% distribution penalties).

Summary

Sinelli disagrees with the financial people.  First, they are always telling you that they can beat the return of the S&P 500, but I have never found a financial advisor who has done it over a ten year period of time.  More importantly, the people who can gain the most from the program, middle income and lower income people, are not normally going to use financial advisors.  In truth, the advisors don’t want those clients either.  They do not offer sufficient income potential to the advisor to justify the effort required.

So, middle income people, who work for employers that have reasonable benefit programs, can truly put their children on the path to building a robustly funded retirement program.  Most importantly, it is very easy to do and it is relatively inexpensive.  I have harped on retirement funding to many of my friends for more than 40 years.  Most of them did nothing to address the need.  In order to make contributions to your IRA, you need to have earned income.  There are not a lot of infants that have earned income.  If you sign up your progeny in one of these “set it and forget it plans”, they may well have won the retirement funding battle by the time they are 25 with virtually no financial strain on their part.  What an incredible financial jump start in life. 

The narrow structure that the financial advisors dislike is one of the best features of the plan. You do not have to be a financial guru to start moving forward.  In essence, the absolute ease in setting up and administering the plan, the beauty of compounding tax free returns starting out at age 0, and the seamless transition from a Trump Account to IRA rules and regulations make this a home run for lower and middle income Americans. 

If you want your kids to have a better life, sign them up!  Maximize the contributions from others and kick in what you can.  At age 59 ½ they will have a much better life.   

Although these benefits are extremely well directed to middle and lower income families, they may not be well directed to the indigent.  Steve’s concern that people who are not traditional employees, will have a hard time taking advantage of these benefits is accurate.  Perhaps that is a separate problem.  The indigent and unemployed or marginally employed could certainly benefit from Trump Accounts.  They could take advantage of all of the free funding.  The problem is not the plan.  The problem is how do you enable them to take advantage of it.