A thousand dollars to open investment accounts for newborns. The hardest to change to make this a priority may lie with the parents. Is it worth it? Why Ray Zinn says the answer is simple in the Tough Things First podcast. (Watch Now…)
Rob Artigo: Ray, the Trump Accounts, we’ve been hearing a lot about them lately because they’ve just recently been launched. And I think this topic is of value for parents who will have the option of choosing this for their kids when they’re born, but also those adults who have been struggling with understanding the value of saving and investing and really starting at a young age. And this is something that we’ve talked about on the podcast. And this is an interesting development here on the federal side that may give many of these new parents a leg-up in advancing their child in the future.
Just to remind listeners, the Trump Accounts are new tax-advantage investments accounts. They’re for US citizens. They provide $1,000. A Treasury-funded seed money for babies born between 2025 and 2028. They’re designed to build wealth through stock market investments, and parents can contribute to up to $5,000 annually with options for employer and state contributions. So Ray, how did this strike you when you first heard about it?
Ray Zinn: Well, many countries do it already, countries that are already focused on education. The primary source for growth in any country is its youth. And I’ve always been a big proponent of education. We’ve funded, my wife and I, hundreds of scholarships around the United States to different universities. It’s similar to what the Trump Account is doing. Only ours is called the Ray Zinn Family Scholarship Fund. And it is available at least at five different universities. And it’s really helped out students. So I’m a big proponent of education. I wish our country was more of a proponent.
We had that COVID issue that really has injured significantly our youth that were affected by that shutdown. And as you know, many universities are having to do remedial math for students that are starting their freshman year in college because we’ve failed so poorly in funding education.
Rob Artigo: Yeah, it’s a shame. And maybe this will force schools to pick up curriculum in the investment area, almost like a home ec kind of class where they learn about investments and how to manage money because it’s important. So how does starting a Trump Account force parents to confront their own discipline gaps early before bad habits are passed down to the next generation?
Ray Zinn: They’re going to be thinking about education at a very early time, especially families that are just getting started, these marriages that are in their 20s. They’ll be thinking about what this means for their children. It’s also to encourage families to have children. It’s a twofold thing. One is to get them prepared for education, and the other is to get their family going.
Education is more than just book-learning. Education is disciplining. And I’m a big proponent of discipline. Discipline is doing what you don’t like doing and doing it well. Going to school is more about discipline than it is about just book-learning, as they say. So I would encourage all our listeners out there who have that capability of still rearing children to be optimistic and hopeful about what Donald Trump is trying to do with his Trump account.
Rob Artigo: I’m thinking about Silicon Valley here, and you give seed money to a business that’s a budding business. And I know that you have ZinnStarter as well, another one of the programs at college campuses that you use. And you help launch these new ideas, these young entrepreneurs who want to start a business. You have a whole process that you go through to do that, but it’s pretty cool.
In Silicon Valley, we have pivots or business turnarounds. What parallels do you see between seeding a startup early and using a Trump Account to invest in a child’s future resilience?
Ray Zinn: It’s the same. I don’t have the Zinn account, as you would, but we have ZinnStarter, as you pointed out. ZinnStarter helps fund these entrepreneurial students who want to learn how to start a company. That’s the similar thing that we do. So we don’t call it the Zinn account, we call it ZinnStarter. And then, of course, we have the scholarship funds funding programs that we have at different universities. I think at least at five.
Scholarships are important, and the Trump Account is basically a scholarship program, and it encourages young families at a very early time to start having a family, as well as also preparing for their kids’ education.
It should help education. If the money is invested correctly, it should help education in general, because you’ll have these kids coming in that are already well-funded. And it also would cut the cost of education, the part that the government has to do in supporting these different universities if the money is prepared for in advance. So it also helps the market, because there’s money flowing into the market to be invested. So I think it’s a pretty good program.
Rob Artigo: I’d say for the parents out there, I wonder if there’s a simple rule that they could set right now when they get their account. Like for example, contribute before spending on non-essentials, contribute to that account before spending on it, to make those Trump Accounts a gateway to create entrepreneurial thinking in kids.
Ray Zinn: Absolutely. I mean, well, it’s a new program. And of course, with anything new, there are wrinkles that have to be ironed out. Let’s see how it goes. I’m a proponent of it. Of course, as I mentioned earlier, I’m a proponent of education in general, not for the book-learning part of it, but just the discipline that it provides and a very early age that the youth are going to need as they mature and provide for their families.
Rob Artigo: Would you say that if there was one thing that these new parents can do that would set them on a road for success? For example, what’s the first thing you do, is when you get paid, you contribute $100 or $200, whatever you can. The limit’s $5,000 a year for the parents, but anything you can do to get close to that over the course of a year would really be beneficial over 18 years. And what a lot of people don’t understand is how compound interest works and how that investment grows in the process, right?
Ray Zinn: That’s true. Again, you’re investing in your children’s future, and that’s the goal. As I said, there are wrinkles that have to be ironed out, but any new program is going to require some adjusting and so forth. But it does focus on the parents having children or married couple having children and then getting them to be disciplined and providing for that.
Anyway, I think it’s a step in a right direction, and I hope that the young families will get their arms around it and adopt it.
Rob Artigo: Well, Ray, for our listeners, as we close out this podcast, obviously, you agree with this, and I do as well. I mean, might as well just say that because it is a great educational opportunity. Our listeners can rate this podcast and follow it as well to build the reputation of the Tough Things First podcast. Join the conversation at toughthingsfirst.com with your comments. Follow Ray on X, Facebook, and LinkedIn, and of course, pick up the books, Tough Things First, and the Zen of Zinn one, two, and three. Coming soon, we have the Zen of Zinn Daily. On sale now, The Essential Leader. Got the book right here. The Essential Leader: 10 Skills, Attributes, and Fundamentals That Make Up the Essential Leader. Get it. Thank you, Ray.
Ray Zinn: Thanks, Rob.
