George Kamel - Trump Just Changed the Rules—Again

Episode Date: July 18, 2025

📋 Get Ramsey’s Complete Guide to Investing.   There are two words in President Trump’s “big, beautiful bill” that have gotten a lot of attention: Trump Accounts. It’s a new type of investment savings account, and in this video, you’ll learn what it’s for, how it works, and how it compares to other options out there. Next Steps: 🎥 Watch my video Trump’s Plan to Abolish the IRS. 📈 Are you on track with the Baby Steps? Get a free personalized plan. 💵 Start your free budget today. Download the EveryDollar app! Connect With Our Sponsors: Get 20% off when you join DeleteMe. Learn more about opening a high-yield savings account with Laurel Road. Get up to 40% off Cozy Earth with code GEORGE. Explore More From Ramsey Network: 🎙️ The Ramsey Show 🍸 Smart Money Happy Hour 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 💡 The Rachel Cruze Show 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

President Trump's big beautiful bill has over 1,000 pages of provisions, and something in here has been getting a lot of attention. That's a picture of a Big Mac. I'll give you a hint. It's somewhere around Title 11, Part 2, Section 110-115. Okay, I'll just tell you. It's the creation of a new type of investment savings account for children, and it's called, wait for it, a Trump account.

Marketing meeting crushed it on that one, guys. Must have ended early and got some lunch. Maybe a Big Mac. And for some kids, this comes with an automatic deposit of $1,000. Why make trillions when we could make billions? Sounds great, right? But is it really a smart way to save your kids' future? In today's video, I'm going to break down what a Trump account is, how it works, and how

it compares to other investment accounts for children. But before we dive in, hit those like and subscribe buttons and share this video with a baby who doesn't have any money, and let them know they could soon be 1,000 air. Okay, first of all, it's important to note that at the time of this recording, these accounts don't quite exist yet. At this point, they're just cooking in the womb of Congress, right? It's a proposal in the tax bill, which could still change. But assuming the bill officially passes into law, and most of the details stay the same, here's how these new accounts would work. Every U.S. citizen born between January 1st, 2025, and December 31st, 2028,

will automatically receive a $1,000 deposit into a Trump account, which will be set up and funded by the U.S. Treasury. The funds will be invested in the stock market on the child's behalf, and you can add up to $5,000 annually in after-tax dollars to these accounts until the child turns 18. And these contributions can come from anyone, parents, grandparents, the parents' employers, the parent company of the parents' employer, even the co-producer of the parent trap. Anyone. But you can't just use the money for anything. Well, at least not without a penalty. You can take money out for qualified expenses like higher education, first-time home purchases, or starting a small business, and that would be taxed at long-term capital gains rates,

which would be lower than your ordinary tax rates. But if you use the money for non-qualified expenses, including but not limited to, cars, lizards, and anything Gwyneth Paltrow makes, you would have to pay ordinary income taxes and possibly a 10% penalty. And here's where it gets even more rigid. You can't even touch the money until your kid turns 18, at all. And even then, from 18 to 24, they can only take out half of what was in the account at age 18. and by the time they turn 31, the account closes completely and whatever's left gets fully distributed to them.

So, are these Trump accounts a good way to invest for your kids? Let's look at the pros and cons. Let's talk about the pros first. Free money if your kid is born in the right four-year window. Encourages financial literacy. Grows tax-deferred. No earned income required to contribute, unlike Roth IRAs. Can be used for college, home buying, or starting a business.

Provides early exposure to compound interest, and finally, anyone can contribute. Now let's move to the cons. There are age restrictions for withdrawals, and rules around withdrawals and taxes are a little bit complicated. There's also penalties for using funds for anything unapproved, and it's still unclear how this is funded, because $1,000 per kid adds up, and I'm going to assume it's taxpayer money because the government doesn't really have a job other than redistributing your money. Now, this also may benefit higher income families more. Think about it. They're able to max it out. They're less likely to make emergency withdrawals for unapproved expenses that would be penalized.

and this requires some existing financial literacy. And finally, this could be used to distract from other budget cuts. And bonus con, the name. Not a great selling point. Not really telling me what's going on here. Just call it the millionaire baby fund. That's way more exciting. Rolls off the tongue nicely, doesn't it?

So the big, beautiful question we're left with is this. Is a Trump account better than the options our kids already have access to? Well, let's take a quick look at the features of 529 plans, Roth IRAs for kids and custodial accounts to see how this new Trump account stacks up. Before we do that, it's important to remember you can have all the right types of accounts. But if your personal data is out there floating around the internet, your money is still at risk. Scams are happening more and more, and with AI and impersonation, there's even more risk. And so Delete Me helps cut the risk by removing your info from hundreds of these data broker sites.

And they don't just set it and forget it. They work behind the scenes all year long, real people manually pulling this information off the web. You'll even get personalized reports, so you know what they're. they removed from where and how much time they've saved you. And with my special link, you can get a plan that comes out to about nine bucks per month. So if you want that 20% off deal, go to join deleteme. com slash George or click the link in the description below. Okay, back to the Trump account. Let's see how this new type of investment account stacks up against 529 plans, Roth IRAs for kids, and custodial accounts. First up, 529 plans. These are the go-to option if you're saving for your

kids' college. You put in after-tax dollars, it grows tax-free, and if you use it for qualified education expenses like tuition, books, housing, or a sweet graphing calculator, they don't hit you with taxes on the gains. Now the downside here is that if your kid decides to skip college or become a semi-pro pickleball influencer, you might get stuck paying taxes and a penalty on the gains if they use the money for non-education stuff, like a GoPro that mounts to a paddle so he can capture the dinks in HD. Which, by the way, you can do better, bro. We're in 4.6K now. Hopped out the car at the city, yes, needs some sunscreen for a mask. Oh, crystal clear. But still, 529 plans are pretty solid, especially now that you can roll a portion of unused funds into a Roth IRA under certain conditions.

Big fan of those. Now let's move on to the Roth IRA for kids. And this one is great if your kid has legitimate earned income. If they're mowing lawns, babysitting, or polishing their social skills working the Chick-fil-A drive-thru, you can open a Roth IRA for them and contribute up to what they've earned up to the annual limit. And that money grows tax-free. And when they hit retirement age, they can pull it out completely tax-free too. But again, the catch here is that they need a job.

And I don't know many six-year-olds filing W-2s. Then again, I don't know many six-year-olds. And I know. I've seen it on Instagram where they're like, you can pay your three-year-old $150 an hour to take a photo with your business merch on. But I don't like it, and neither does the IRS. And I will report you.

I'm a narc baby. I'm a baby narc. Baby narc. Baby narc. Dude, I will rat your baby out so fast. Don't go to baby jail. Baby bars, baby food. Definitely lost it.

Yep. Next up, custodial brokerage accounts like UTMAs and UGMAs. And this one comes with a lot less restrictions. You can contribute as much as you want, use it for anything you want, and once the kid turns 18 or 21, depending on your state, it is legally their money. But the huge tiny caveat here is it doesn't come with tax-free growth, and that makes it not quite as desirable as the other two we've talked about.

The bonus is super flexible. You could use it for college, a first car, a down payment on a house, whatever you want to do. But that also means that your kid could use it for a custom truck lift once they get access to the money. And so for that reason, I'm not a fan of these accounts and I would never open one for my child. Way too much risk to give an 18-year-old a giant pile of money. And you don't know how much money it's going to be once they turn 18. And for that reason, I want more control as the parent because we all know 18-year-olds aren't making the best decisions. I don't know about you guys, but at 18, I wasn't making the best decisions.

Nothing detrimental, but I mean, I know 22-year-olds that aren't making the best decisions. Their prefrontal cortex isn't there. Seriously, I'm not a little kid. That's right, honey. You're a big, strong man. And if you want to know my favorite account for total flexibility and control, it's a regular brokerage account in your name. This is similar to that UGMA or UTMA, but you control when the money is handed to your kids and how much.

So for that reason, that's what I'm sticking with, plus a 529. Now we're back to the Trump account. It's kind of trying to be all of the above. But instead of the strengths, it borrows the weaknesses. There's no tax deduction when you contribute. You can't touch the money until your kid turns 18. And between 18 and 24, you can only take out half the account balance. And if you use it the wrong way, you get taxed like its income, plus that 10% penalty if your kid is under 30.

And the things you can use it for, like college, buying a home, or starting a small business, are already covered by the other accounts, which again have fewer strings attached. So is a Trump account better than options we already have? The short answer is, not really. It's like when Taco Bell announces a new menu item, but it's just the same five ingredients arranged in a slightly different order and served on a giant cheese it. It's technically new and different, but it's kind of the same and still not as good as the OG cheesy gordita crunch you've been ordering for a decade. Great. Now I'm starving. We already have plenty of solid options when it comes to saving and investing for our kids.

And if you ask me, the only real advantage the Trump account has is the $3,000 to get us started. And I am a fan of that. So if it's not really any better than what we have, why would politicians even buy us? bother with this. Well, my guess is the same reason they do a lot of things. It makes them look good, and it's another accomplishment they can add on to their LinkedIn and that little re-election postcard they mail out, which cannot end up in my trash fast enough. Stop with the mailers, guys. Quick PSA for the politicians out there. I don't care if you're running for mayor or the president. It's 2025. Nobody wants it. Do not text me. I didn't sign up for your list. Do not call

me. I'm a millennial, and that's a hate crime. But do FaceTime me back, Bernie. Don't leave me on Red. I know you have an Android. These iPhones are for the 1%. Enjoy your Samsung. That's what the elites want you to think. Now, don't get me wrong. I'm all for investing, and I'm not complaining about free money, but this feels more like a PR play than an actual way to help Americans afford the rising cost of life, which at my local supermarket is $6.49 for the giant size. Who needs a giant size life?

I don't know. How many kids do you have that also love life cereal? Cinnamon checks? I can get behind that. I can vibe. Life does not pass the vibe check. So the bottom line, you don't need a Trump account to start saving for your kids' future. You can do this yourself at birth if you have a thousand bucks to spare.

So it's fine, nothing to write home about, and we've already got other great options available. But I am a big fan of the government setting kids up instead of hoping we have enough money for Social Security 63 years from now. So love the idea here. I wish there was less restrictions. And if you really want to set your kids up for financial success, don't just open an account for them. Teach them about money. Financial peace does not start in the Capitol building. It starts at your kitchen table.

So if you want to know more about investing for your kids and for your own future, check out our free investing guide. I'll drop a link to it in the description. And if you want to know what else DJ Trump is up to, keep watching this next video or click the link in the description below. Thanks for watching. We'll see you next time.