Create a Trump account and make your child a millionaire? Why those same children’s financial futures may be ruined instead.

From the above article:

Trump accounts will function like retirement accounts. Children will not be able to withdraw from the accounts before they turn eighteen. 

Children must have a Social Security number to open a Trump account, so the Social Security Administration has a database of everyone who is eligible.

These new Trump accounts are a tax-deferred savings account for children under 18 years old.

Created under President Trump’s “One, Big, Beautiful” tax and spending bill, which promises $1,000 seed contributions from the federal government for eligible kids.

To qualify, a child must be born between 2025 and 2028, and up to $5,000 is allowed per year per child, and they can be contributed from all different types of sources — parents, families, employers. Those funds are supposed to only be invested in a low-cost US equity index fund, such as one tracking the S&P 500, and contributions begin on 4th July 2026.

Now, you may feel that on the surface this is a laudable policy. To create for every child a trust account in their name and one that only be accessed by the time they turn 18 years old. Over time those annual $5000 contributions should turn into a lot of money, shouldn’t they?

I feel this does have some merit.

But it also speaks to a much more fundamental issue in society. One the world will have to face very soon.

And it could be the final leg of the “everything bubble” too.

To invest public money into the future of your nation’s children is one thing.

But have you asked yourself this: could we do this even better?

And should these funds be mandated to be invested into the stock market only?

It’s time to look, because we may be talking about your own children, or soon-to-be children, here.

And for mine, they, and everyone else, deserve better.

So, back to these accounts.

This money can’t be accessed until the child turns 18 years old, unless there are certain circumstances.

Now, precisely where this money is coming from isn’t entirely clear. If it comes via the Internal Revenue Office (IRA), it will be US tax dollars.

If it’s from the U.S Treasury, it’s likely borrowed money.

Now, what the U.S government decides to spend its money on is their business. And it is hard to argue against a nation, any nation, to invest in this manner. But this is America, and it doesn’t end there. Take a look the following headline.

From the above article:

Billionaires Michael and Susan Dell pledged $6.25 billion Tuesday to provide twenty-five million American children ten and under an incentive to claim the new investment accounts for children created as part of President Donald Trump’s tax and spending legislation.

It is one of the largest private donations in history. Again, what the Dells decide to do with their money is up to them. And you won’t hear me criticising them for this. Besides, it helps address a large loophole in who can qualify for the $1000 deposits for newly born children.

Essentially, it builds on the “Trump Accounts” program, as the Dells’ gift will use the “Trump Accounts” infrastructure to give $250 to each qualified child under eleven.

Now, it’s at this juncture where you may be thinking; what’s the problem? Why would I push back on such an initiative?

Well, here’s my point of view. Is there a way we could do something very similar to this for every single resident of the United States?

Because this news for me is another one of those “for heaven’s sake, can someone please join the dots?” moments. For every nation on earth, more than enough abundance exists for everyone. You’re literally standing on it.

The answer is creating a citizen’s dividend using the natural rent surplus that all productive nations produce from the use of their land and natural resources.

This is called, by the PSE team and others in the know, the “economic rent”, or surplus, that arises from productive work once all relevant costs – including a return on capital – are included. It’s a concept dearly treasured by PSE co-director and my mentor Phillip J Anderson.

And it is absolutely within our means to do so. Imagine receiving the equivalent of a Trump account deposit not once, but every year? Now imagine that same income, all income in fact, produced by productive employment and businesses all of which would be 100% untaxed.

Simply by applying a service charge on the very land that is your birthright as a US citizen. This service charge would be in recognition of the fact that the value of land is produced collectively by society and is the birthright of all citizens in a country.

Instead, we all have the exact opposite system. And in a very short time from now, we shall have to face those consequences. So, thank you Mr Dell, thank you President Trump, but there is a better way than this.

Let’s look now at this (rather peculiar) stipulation that these funds generously offered by the US government must be invested in select equity funds on the stock exchange.

 

Long time readers may be familiar with the term the ‘everything bubble.’ It is a term I have used in the past to describe the speculative fervour that occurs during the final 12-months or so of a real estate cycle.

Now, one of the enduring trends of this time in the cycle is one where we witness a period where almost everyone is ‘in’ the market. Basically, completely tapped out, fully maxed out on credit and every cent invested trying to get outsized returns.

So, it begs the question. Do we really want that same money allocated for our children’s future to also be invested in the stock market so close to the peak?

Why does it even need to be invested only in equities at all?

You may read that over the last 20 years or so, funds placed in reputable index funds have delivered a certain level of returns in that time. But that was then. The timing today of just how relevant such facts are is difficult to justify. I say this because I know my real estate cycle timing.

For over 220 years now, history tells me what, all things being equal, I may expect should history once again repeat. US land markets will peak first, then equity markets, then finally select commodities.

And so, there is a window, after the land market highs, where good returns on that money are possible. Again though, who is paying for all this? No one outside the White House is exactly sure for now. The most likely source, however, is borrowing by the government.

Which means it will raise and sell bonds via the US Treasury. So, somebody must pay the interest on those same bonds. But it also means – surprise, surprise – even more capital pumped into the stock market right near its peak.

And so, through the lens of the real estate cycle, this isn’t really an innovation at all. Instead, a clear signal that the end is approaching, and you need to start seeing what the crowd is not seeing.

So, is that what you’re doing? Do you have a good grasp on your real estate cycle timing? Are you aware of what you need to do to get ready, and more importantly when to start enacting your plan to protect yourself?

If there are any doubts here, then this must be your next move: becoming a member of the Boom Bust Bulletin (BBB). Discover the secret behind the economy’s hidden order and place yourself and your family on the right side of the historic trends.

The BBB will introduce you to the true driver of the economy and why land must be placed at the centre of each financial decision you make now. With regular video content and monthly editions, all for just US$47 a year. Incredible value!

I’m certain hundreds of thousands of newborns in the US will end up with one of these accounts. To expect every parent of those same children to be stock market experts over the long term is rather a stretch.

It’s hard to see, given that fact, just how these accounts will hold up this late into an equity bull market when it turns to bust. But it does show you just how we go all-in near the top.

And the result will be utterly predictable.

A little knowledge though can go a long way. And that’s what the BBB can provide you.

It is a real shame. Because we have in our hands a much better way than this.

If the US refuses to acknowledge this, there is no real reason that you should too.

Sign up now.