3 Things 6-16-25

 Thing One

A "Trump Account" For Every Newborn

A recent House Republican proposal, part of the ambitious "One Big Beautiful Bill" championed by President Donald Trump, aims to give every newborn in the United States a $1,000 investment account, dubbed a "Trump Account." These tax-deferred accounts, inspired by state-level baby bond programs, would be seeded with federal funds for children born between 2025 and 2028 and invested in a stock market index fund. Parents could further bolster these accounts with up to $5,000 in annual contributions, offering a significant opportunity for long-term wealth building. By examining the potential growth of such an account with maximum parental contributions, we can see how this policy might shape a child’s financial future by age 25.

The initial $1,000 government contribution, invested at the historical S&P 500 average return of about 10% per year, would grow steadily over 25 years. By the time the child reaches 25, this lump sum alone could be worth around $10,835, thanks to the power of compound interest. This modest but meaningful growth demonstrates the value of starting investments early, even with a relatively small amount. However, the real potential of the Trump Accounts lies in the additional contributions parents can make, which could dramatically increase the account’s value over the same period.

If parents contribute the maximum allowable $5,000 each year, the account’s growth becomes far more substantial. Over 25 years, these annual contributions, totaling $125,000, would compound at the same 10% rate, accumulating to approximately $491,735 by age 25. Combined with the initial $1,000 contribution, the account could reach a total of about $501,570. This significant sum highlights how consistent, sizable contributions, paired with long-term market growth, can transform a modest government program into a powerful financial springboard for young adults.

For a more cautious perspective, assuming an 8% annual return to account for potential fees or market fluctuations, the numbers are still impressive. The initial $1,000 would grow to around $6,849, while the $5,000 annual contributions would accumulate to about $365,530, yielding a total of approximately $372,379. These figures, while lower, still underscore the potential of the Trump Accounts to provide meaningful financial support, even under conservative assumptions. The difference between the 10% and 8% scenarios also illustrates the importance of minimizing fees and maximizing returns in long-term investments.

The Trump Accounts proposal, backed by figures like House Speaker Mike Johnson and business leader Michael Dell, offers a bold vision for empowering future generations. While the program faces criticism for its restrictive withdrawal rules and limited tax benefits, the potential for nearly half a million dollars by age 25 with maximum contributions is a compelling incentive. These accounts could help young adults fund education, start businesses, or secure housing, provided the investments are managed wisely. As the proposal moves forward, its success will depend on clear implementation and public understanding of its long-term benefits, but the numbers suggest a promising opportunity for America’s newborns.

If parents contribute only half of the maximum allowable amount, or $2,500 annually (roughly $200/month), to the Trump Account, the total value by age 25 would still be significant. With the initial $1,000 government contribution growing to approximately $10,835 at a 10% annual S&P 500 return, the $2,500 yearly contributions, totaling $62,500 over 25 years, would accumulate to around $245,868 due to compounding. This results in a total account value of about $256,703.

What’s not to like about this idea?

Thing Two

Looking Out For Those Who May look Out For You In The End 

Think about it - you've done a lot of life planning and preparation for your future and those you care about. You've worked hard, saved, invested, bought insurance, planned for retirement, and probably already have a Will. But what about planning and sharing your health and medical wishes with your family - do your loved ones know what they are? If not, you may be putting them in the very unwelcome position of having to make critical and life-sustaining treatment decisions on your behalf. The fact is, by law, that's exactly what they will be required to do.

As uncomfortable as the subject may be, each one of us is susceptible to life-threatening conditions every day. Even though it's impossible to plan for every incident, having your medical and health care wishes established in a legal document can be very comforting for both you and those who care about you.  That’s where Advance Directives come in.

What Are They? 

Advance Directives are legal documents that are better known as either a Living Will or a Power of Attorney for Health Care. As a competent adult, you have the right to give consent for all your health care decisions. However, if for some reason you are physically unable to give consent for treatments or procedures, these documents will provide direction to your family and the health professionals who care for you.

The advances of modern technology and the human body's ability to sustain itself have created many new liabilities and difficult decisions for health care professionals. That's why it has become increasingly important for you to take a proactive role in the planning of your future medical treatment.

Living Will

In the event of a terminal health condition, this important document will give your health care professionals instructions about the type of medical treatments you wish to have. A Living Will is only acted upon when your physician, along with two others, agree that you will not regain consciousness or an acceptable state of health.

In addition, you have the option to name a trusted relative or friend as a Power of Attorney who, in these circumstances, is authorized to make health care decisions on your behalf. 

Providing your family and physicians with an expression of your final health care desires will comfort your loved ones in a situation that will already be difficult and emotional.

Power of Attorney for Health Care

In this document, you will designate someone to make decisions about your medical care in the event that your medical condition leaves you unable to communicate your wishes. The person you name will be authorized to speak for you, not only when you are in a terminal condition, but any time a health condition occurs where it is determined that you are unable to make your own decisions.

You can also include instructions that establish the types of medical treatment you prefer, and under what circumstances you would like these decisions made.

If you’ve decided to get and Advance Directive you should:

• Initiate discussions with close family members, your physician(s), and the person you intend to name as your Power of Attorney for Health Care. This will help you clarify your wishes, and at the same time provide those close to you with important information for future medical decisions. 

• Evaluate your health condition and make an effort to determine the possibilities of medical treatment you may need in the future. Use the guidelines you develop as a basis for your documentation. 

• Complete and sign the document you have created, adding or modifying any wording to best describe your wishes. It is extremely important to follow and witnessing instructions that are on the form accurately. Most states require two "disinterested" witnesses. Be sure to cover your bases. Family conflicts, special circumstances or specific legal concerns may require additional legal documentation. In that case, you may want to consult an experienced attorney.

While we’re not attorneys and therefore can’t offer you legal advice, we can help you create these documents.  All that would be left after you filled out (electronically) a form and answered a few questions would be for you to print the documents and have them signed by you and your witnesses.  You may still wish to have an attorney review them after they are prepared, but in many states (including Georgia), the law says you do not have to have a lawyer prepare living wills and health care powers of attorney for you.  Your documents need only to be clear, concise and within the guidelines of the laws of your state.  Let us know if you need help with this.  It’s a fairly quick process and can save your loved ones from having to endure headaches on top of heartache when the time comes.

Thing Three

Just A Thought  

"Your present circumstances don't determine where you can go; they merely determine where you start." - Nido Qubein