Last week, the Treasury Department announced that it will automatically enroll more than 60 million children under 18 in the government’s Trump accounts. The speed with which it is acting on this initiative speaks volumes about its priority. The government announced the accounts in June. The idea behind them is for children to build wealth by being invested in the U.S. stock market at an early age. Any child born between 2025 and 2028, inclusive, will receive a contribution of $1,000 from the government if the child’s parent or guardian elects this option while setting up the account. Accounts have a $5,000 annual contribution limit, and contributions can be made via payroll deductions (i.e., Mom and Dad can have it come out of their paycheck).

The law says the fund’s administrators must invest cash contributed to these accounts in index funds, but that doesn’t apply to stock donations: It will be legal for someone to donate an individual stock to a minor via their Trump account (the minor or their parents just can’t sell the stock for five years).

Michael Dell committed to donating over $6 billion to Trump accounts a few months back. In theory, he could gift $6 billion in Dell stock to Trump accounts, and that would be within the rules. Said differently, Dell (or any other wealthy person, for that matter) could instantly make millions (or tens of millions) of children shareholders in a single company.

I don’t think anything like this has ever existed before, and Trump accounts seem like a big deal. As far as I know, this is the first time that the ability to give ownership in a single public company (free of charge) to a large percentage of the population, and restrict their ability to sell, has existed.

I need to noodle on this more, but based on my reading about the history of the stock market and ETFs, this feels like something that could transform the U.S. stock market.

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