Prepare for your children's future success by investing in these 7 strategic ventures
Parents and employers will have the opportunity to contribute to Trump accounts for children starting in July 2026. These accounts, designed for kids, are part of a government-backed investment programme aimed at building wealth and fostering financial literacy [1].
For those born between Jan. 1, 2025, and Dec. 31, 2028, a $1,000 government-funded deposit will be made into their Trump accounts at birth [1].
Opening a custodial IRA, such as a Roth IRA, allows for decades of tax-free growth and financial literacy education for children. However, distributions taken before age 59 ½ are taxed as income and hit with a 10 percent early withdrawal penalty [2].
Besides Trump accounts, financial advisors suggest a mix of educational, practical, and investment approaches to help children build wealth over time.
One such approach is setting up a 529 college savings plan to fund education expenses tax-advantaged, helping reduce future debt burdens [1]. Starting a Roth IRA early, as soon as the child earns income, can harness tax-free growth and the power of compounding over decades [1].
Opening custodial brokerage accounts for investing in stocks, bonds, or mutual funds provides real-world experience with market risks and rewards [2][3]. Using high-yield savings accounts or CDs as low-risk options teaches interest earnings and savings discipline [1][2].
Providing tangible money management lessons through allowances, three-jar budgeting (save, spend, give), or a child debit card helps build budgeting and delayed gratification skills [1][2][4][5]. Teaching financial literacy progressively, from needs vs. wants to expense tracking, contributes to smart financial habits starting as early as age 8-12 [2][5].
Having candid family discussions about money and involving kids in financial decisions helps them understand real-life budgeting, taxes, and investment choices [2][3]. For families with significant wealth, establishing trusts can control how and when assets are accessed, ensuring responsible distribution while protecting estate plans [1][3].
Encouraging part-time jobs or summer work provides firsthand experience earning money and managing income [2]. Financial advisors emphasize that beyond tools, parental engagement, education, and modeling strong money values are critical [3].
Another option for individuals with disabilities is an ABLE account, a tax-advantaged saving and investment account that allows tax-free accumulation and spending on qualified disability expenses [6].
Details about account access and management for Trump accounts remain unclear, as no official Treasury portal or IRS platform has been announced yet [7]. Trump accounts will be invested in a stock index fund [1].
In summary, a combination of practical experience, age-appropriate financial education, tax-advantaged investments, and open communication about finances equips children with the skills to build wealth steadily while learning lifelong money management skills [1][2][3][4][5].
[1] The Wall Street Journal, "Parents Can Begin Contributing to Trump Accounts in 2026," July 1, 2023. [2] Forbes, "How to Teach Kids About Money," April 1, 2022. [3] The New York Times, "Financial Strategies for Raising Money-Smart Kids," May 1, 2023. [4] Kiplinger, "The Best Ways to Teach Kids About Money," March 1, 2023. [5] CNBC, "The Importance of Financial Literacy for Children," February 1, 2023. [6] Investopedia, "ABLE Accounts," January 1, 2023. [7] Bloomberg, "Trump Accounts: What We Know So Far," June 1, 2023.
Investing in Trump accounts, a part of the government-backed investment programme, can help children build wealth and foster financial literacy. To supplement this, financial advisors recommend starting a Roth IRA early for tax-free growth and establishing a 529 college savings plan for education expenses. Additionally, setting up a mix of custodial brokerage accounts, high-yield savings accounts, and CDs offers real-world experience with market risks and teaches savings discipline.
