What “Trump Accounts” Could Mean for Future Generations

A new financial program is on the horizon for American children born between 2025 and 2028 — the government’s so-called “Trump Account.” Each eligible child will receive $1,000 in a tax-deferred investment account that becomes accessible once they turn 18. Although critics argue that this approach doesn’t support parents who need immediate monetary help, the long-term impact of even a small early investment can be profound. I know this because I experienced something similar myself.

A Childhood Gift That Sparked a Financial Mindset

My personal investing journey began when I was 12. Instead of toys or gadgets, I asked my grandfather for shares of General Electric as my bat mitzvah gift — an unusual wish for a middle-schooler. During every bus ride, I tracked stock prices, read reports, and tried my best to understand the market. Before long, I learned a critical lesson: investing everything into a single company is risky.

Wanting to diversify, I asked my father if I could use the rest of my gift money to buy stocks in different companies. He agreed — but only if I could explain why each company was worth investing in. That early push taught me to think logically about money, opportunity, and long-term outcomes.

By high school, I started a small side business selling items for family and friends on eBay. Every dollar I earned went into my investment account. My siblings joked that my parents should just drop me off at the local brokerage office since I seemed to belong there more than at home. Little did they know the joke would become my advantage. The $1,300 I invested during my early teens has grown to roughly $4,200 — a jump of about 145% over 15 years.

What “Trump Accounts” Offer: The Power of Compound Growth

Under the new program, money placed in these accounts can only be invested in diversified, low-cost US stock index funds like those that mirror the S&P 500. While some may see this as limiting, long-term investors know this may actually be beneficial.

For example, a $1,000 investment made 18 years ago into an S&P 500 index fund would be worth over $4,000 today. Although future performance can’t be guaranteed, this example highlights the effect of compound interest — the same force that grew my childhood portfolio.

Compound interest works by allowing your gains to earn additional gains. Instead of benefiting only from the original investment, you also earn returns on the accumulated profit. Over time, this snowball effect becomes extremely powerful, often turning modest contributions into sizeable assets.

The beauty of compounding is that it doesn’t require large sums of money. What matters most is time — and that’s exactly what these new accounts give children: nearly two decades of uninterrupted growth.

A Lifelong Lesson in Patience and Reward

When I was 12, I didn’t fully understand the importance of long-term investing. I wanted fast results and instant bragging rights. Yet, by holding on to almost all the stocks I purchased as a child, I unknowingly allowed compound interest to work in my favor.

If the upcoming generation uses their “Trump Accounts” wisely, they too may witness the remarkable difference that early, steady investing can make. What may look like a small government deposit today has the potential to become a meaningful financial foundation tomorrow.