# Trump Accounts

> Invest Wisely and Create Opportunity

**Published by:** [Points And Figures](https://paragraph.com/@pointsnfigures1/)
**Published on:** 2026-01-29
**URL:** https://paragraph.com/@pointsnfigures1/trump-accounts

## Content

Compound interest is one of the most powerful forces in finance. It generates outsize returns. That’s why I never take a dividend when I own a stock. I reinvest the dividend in the company’s stock. One of the things I have been able to do my entire life is invest wisely. Back when I was in college, interest rates were double digits. In those days, you could take your college loan money and do almost anything you wanted with it. Now there are restrictions, and those restrictions are the right thing to do. I borrowed money at 3%, and reinvested it in the money market at 18%. I was 19. The math was simple, and the trade was easy. I saved for my kids’ college. Of course, the inexperienced Illinois treasurer lost 38% of it due to his stupidity in 2008. Inexperience and lack of understanding will guarantee you screw things up. These new Trump accounts are unprecedented. Parents should take as much advantage of them as they can. Here is an example of what can happen with the two extremes of these accounts.Imagine having a million bucks at age 28 that you didn’t have to use your labor to earn. How different would your life be? I was trading by the time I was 28 and had to take a lot of risks to make it. Compound interest allows you to lower the risks. Here is how they work. I pulled the following from the linked IRS website. The federal government will make a one-time $1,000 pilot program contribution to the Trump Account of each eligible child for whom an election is made, who is a U.S. citizen and who is born on or after Jan. 1, 2025, through Dec. 31, 2028. Certain governmental entities and charities may also make qualified general contributions to Trump Accounts, if given to a qualified class of account beneficiaries. Other persons are also able to make contributions up to an aggregate limit of $5,000 per year. Furthermore, an employer may contribute to a Trump Account of the employee or the employee’s dependent up to $2,500 per year (which counts against the $5,000 annual limit) under an employer’s Trump Account contribution program, and the contribution will not count toward the employee’s taxable income. The annual contribution limits are indexed to inflation and will adjust starting after 2027. As you might have heard, wealthy people are stepping up. Michael Dell is putting over $6B of his own money into the program to be distributed. Other wealthy people are stepping up in their own way. It’s not because they want the charity points. It’s because they understand the power of compound interest. They also understand that if a person has a strong base, they can accomplish great things. Generally, everyone I meet who is in a family tries to set their kids up for success. They try to live in the best neighborhood they can afford, get them the best schooling, and save as much or pass on as much money as they can. These Trump accounts just made that difficult task easier. This is not welfare or a war on poverty. It’s a path to financial empowerment. We talk a great game about financial literacy in this country. We need to talk about financial empowerment. How do you maximize all the assets you have at your disposal, including physical and mental, to maximize your opportunity? It’s a huge deal and flies in the face of the way the country has always thought of it. It’s about creating a bigger pie and abundance for yourself. Here is the thing. These Trump accounts track Eugene Fama’s Efficient Market Hypothesis. I know that hypothesis well and have practiced it in my own personal investing. Parents stick money in an index fund and pay no fees no ups and no extras. Dividends are reinvested, and it grows. Never sell the American economy short. Now, you can actively participate, and it doesn’t take a lot of effort. The funds in Trump Accounts must be invested in certain mutual funds or exchange-traded funds that track the S&P 500 or another index of primarily American equities. Amounts generally cannot be withdrawn from Trump Accounts before January 1st of the calendar year in which the child turns 18 years old. After that point, the account generally is treated as a traditional IRA and generally is subject to the same rules as other traditional IRAs. People will have decisions to make in 18 years, but they have decisions to make now. The decision is saving. Families ought to calculate how much money they can reasonably part with monthly and stuff it into the Trump account created for their children. Even if it is as little as $5. Warren Buffett used to say he hated paying for haircuts because the cost of the haircut might buy a part of a company down the line. Let’s assume you take that meager $5 per month per year, or $60. When that child is $18, it will be worth roughly $2900 based on historical returns of the S+P 500. As I said at the top. I have been doing this my entire life. A lot of people talk a good game. I played the game. Even when I went to Vanguard’s site, I saw generic stuff. We are going to be specific and educate you on how to maximize your gain. It seems difficult, but it’s going to be simple. You will create a huge advantage for your child. More on these later. Got to get going!

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