President Donald Trump wants to give every American newborn a stock account and $1,000 to start them off.
Warren Buffett says buying stocks early and holding for the long run is key to wealth creation.
The program could help narrow the wealth gap, but children of richer families have other advantages.
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President Donald Trump wants the next generation of Americans to be stock investors from birth — an idea that could easily have come from Warren Buffett.
The US leader’s so-called Trump Accounts are part of his proposed “One Big Beautiful Bill,” a huge package of tax and spending legislation that’s been approved by the House of Representatives and is now under Senate scrutiny.
If passed, the government would open a tax-deferred investment account for every newborn citizen born between January 1, 2025 and December 31, 2028, and seed it with $1,000.
Each child’s guardian would be in charge of their account, able to deposit up to $5,000 a year into it, and allowed to invest in broad US index funds that don’t use leverage and minimize fees and expenses. Withdrawals wouldn’t be allowed until the age of 18, and the account would automatically terminate when the holder is 31.
“This will afford a generation of children the chance to experience the miracle of compounded growth and set them on a course for prosperity from the very beginning,” the White House said on its website, highlighting endorsements from the CEOs of Dell, Goldman Sachs, Uber, and Altimeter Capital.
The bosses of Arm, Salesforce, ServiceNow, and Robinhood have also signaled they’re willing to contribute to the Trump Accounts of their employees’ children.
Buffett, the CEO of Berkshire Hathaway, has long recommended investing from a young age in a low-fee, broad-market index fund and holding for the long run as the most reliable way to build wealth over a lifetime.
“Start young,” Buffett told a shareholder who asked how to become a multibillionaire during Berkshire’s 1999 meeting. He explained that “the nature of compound interest is it behaves like a snowball of sticky snow. And the trick is to have a very long hill, which means either starting very young or living to be very old.”
Buffett, whose net worth now exceeds $150 billion, said at the 2001 meeting that saving $10,000 by the time he turned 21 gave him a “huge, huge headstart” in life. It meant he could afford to get married and have kids while still having spare money to invest.
“While he hasn’t commented directly on government-funded stock accounts for newborns, the investing logic behind such a proposal aligns with his core principles,” Lawrence Cunningham, the author of “The Essays of Warren Buffett” and the director of the University of Delaware’s Weinberg Center, told Business Insider.
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