US citizens born between 2025 and 2028 will soon be eligible to receive $1,000 from the government in a “Trump Account,” a new tax-deferred investment vehicle whose funds become available once the child turns 18.
Although some critics say the accounts are flawed since they don’t help parents in need of immediate financial support for their child, I believe the long-term benefits for children of all incomes far outweigh such concerns. That’s because I have my own “Trump Account” — or, rather, a much earlier version of one.
At the age of 12, when my grandfather asked me what I wanted as a bat mitzvah present, I had an unusual request: shares of General Electric.
On my bus rides all throughout middle school I was reading rating reports and checking the stock’s price like a hawk — far more than any investment adviser would probably recommend. Before long, I came to recognize that it was too risky to only invest in one company. So I made the case for why I should buy different companies’ stocks with bat mitzvah money I received. My father encouraged me to present him with my rationale for companies I’d want to invest in.
By high school, I had a side hustle helping friends and family members clean out their closets and then listing their goods on eBay. I put the proceeds straight into my investment account. When my siblings and I fought, they’d often joke that my parents should just drop me off at the local branch of the brokerage company I used. (In their eyes, a mutually beneficial move: I would be among fellow investment-minded people and they wouldn’t have to put up with whatever annoyance I — allegedly — had caused.)
But the joke’s on them: That small but mighty portfolio of $1,300 worth of stocks has grown to around $3,300, a nearly 150% jump over the 15 years that followed since I made my first purchase.
Funds in “Trump Accounts” can only be invested in low-cost, diversified US stock index funds, like ones that track the S&P 500, based on a law passed earlier this year.
But that’s not exactly a bad thing. For instance, if you today were to cash out on a $1,000 investment you made 18 years ago in a fund tracking the S&P 500, you’d record a gain of over 200%, or around $4,000, based on how the index performed from 2007 to 2025. (Uncle Sam would have to get a cut of that too, though.)
While there’s no guarantee any investment made today would have the same returns after 18 years, it’s not out of the question either. That’s thanks to a concept in finance known as compound interest.
It works like this: If you invest, for example, in the S&P 500, which on average has gone up 10% annually, or in any other asset that goes up over time, you end up earning interest not just on your initial investment but also on gains your investment accumulates along the way.
The best part: It doesn’t take a huge amount of money to grow a lot. It’s more about how long you stay invested, giving your money more time to collect gains that continue to stack on top of prior gains.
While I considered myself pretty advanced for a 12-year-old, that concept wasn’t one I could wrap my head around at the time — I wanted instant gratification and bragging rights about how much money I made.
But I’m thankful I somehow managed to have the intuition to stay put and hold on to almost all the stocks I purchased in middle school and high school so I can continue to observe the power of compound interest.
