Investment Accounts for Babies Are Coming. Wall Street Can’t Wait.

Summary

The Journal. – Podcast Summary

Episode Title: "Investment Accounts for Babies Are Coming. Wall Street Can’t Wait."
Release Date: December 10, 2025
Hosts: Jessica Mendoza, Ryan Knutson
Produced by: The Wall Street Journal & Spotify Studios

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Main Theme & Purpose

This episode examines the newly launched “Trump Accounts”—tax-advantaged investment accounts for American children—exploring how this public policy is reshaping the financial sector, influencing family planning debates, and inviting large-scale philanthropy. The show investigates why Wall Street is so enthusiastic about these accounts and unpacks the multi-layered motivations (from financial literacy to boosting birth rates) behind the initiative.

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Key Discussion Points & Insights

1. The Trump Accounts Initiative: What Are They?

• Overview:
  • Babies born in the U.S. between 2025–2028 are eligible for a $1,000 government-funded, tax-advantaged investment account.
  • Inspired by Brad Gerstner's vision since 2021; gained traction after support from the Trump administration.
• Mechanics:
  • Families opt in and can roll the initial $1,000 into a financial institution of their choice.
  • Contributions up to $5,000/year are allowed (from anyone), starting July 4, 2026.
  • Investments restricted to low-fee U.S. stock index funds; accounts convert to IRAs at age 18.
• Quote:
  • “[A]n IRA for babies through a very small seed investment of $1,000 for any child born…between the beginning of 2025 and the end of 2028.”
    — Alexander Saidi (01:00)

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2. Origins: From Poker Table to Presidential Signature

• Brad Gerstner’s Advocacy:
  • Long struggled to catch President Biden’s interest.
  • Entry to policy came serendipitously via a chance connection with Senator Ted Cruz at a poker game in Las Vegas.
• Political Adoption:
  • Within months, Gerstner’s initiative was folded into a roundtable at the White House with major business leaders.
  • President Trump praised the program as “one of the most exciting parts of the one big beautiful bill” (04:57).

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3. Benefits & Limitations for Families

• Advantages:
  • Federal seed money and tax-free growth.
  • Opportunity for further contributions by family and friends.
• Drawbacks:
  • Inflexible: funds typically inaccessible until 59.5 without penalties (mirroring IRA restrictions).
  • No income requirements, so benefits not targeted by need.
• Quote:
  • “You have to essentially invest any money in a Trump account into an ETF or mutual fund that tracks the broader US Stock market... It’s really meant to be like the 401(k) that you don’t touch.”—Alexander Saidi (05:59)

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4. Broader Goals: Financial Literacy & Demographic Incentives

• Financial Literacy:
  • Framed by the administration as a tool to instill the value of investment and saving at a young age.
  • Theoretical long-term payoff: if maximized, could be worth up to $2 million due to compounding—though this requires consistent extra contributions.
• Pro-Natalist Aims:
  • Implicit incentive to boost birth rates, responding to concerns that cost-of-living fears suppress family formation.
• Quote:
  • “This is essentially a type of incentive to have a child. If you have a baby, you get $1,000.” — Alexander Saidi (08:30)

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5. Financial Industry’s Hype & Strategic Interest

• Banks & Brokerages:
  • See the accounts as a “door opener”: chance to build long-term relationships with new families, then upsell profitable products (e.g., mortgages, loans, credit cards).
  • Management fees on Trump Accounts are minimal, but cross-selling opportunities are the real draw.
  • Nearly every major institution—JPMorgan Chase, Charles Schwab, Robinhood—plans to court the program.
• Quote:
  • “The Trump account is like the seed that gets you in the door, and then they start to cross-sell you on all these other products that do actually make them money.”
    — Alexander Saidi (11:46)

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6. Philanthropic Surge: Dell’s Historic Donation

• Michael and Susan Dell’s $6.25 Billion Gift:
  • Largest ever private donation directly to children in U.S. history.
  • Their gift expands eligibility—$250 for kids under 10 born before 2025, focusing on lower- and middle-income zip codes.
  • Intended as a catalyst for further major donations from the wealthy.
• Business & Politics Intertwined:
  • Executives vying for goodwill with the White House via philanthropic gestures.
  • Philanthropy strategically deployed to align with administration’s priorities.

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7. Political Criticism & Ethical Nuances

• Corporate–Government Proximity:
  • Critics warn that large gifts to White House initiatives—especially while donors have business before the government—could be ethically charged.
  • Example: Democratic lawmakers raising concerns about donations tied to an opulent new White House ballroom project.
  • Trump Accounts donations offer both sincere charitable impact and reputational benefits for donors.

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8. Open Questions & Uncertain Impact

• Program’s Efficacy:
  • Will depend on participation rates and how much families actually contribute above the seed.
  • Most benefit will accrue to the already well-off (those able to make additional contributions).
  • Long-term societal impact won’t become clear for many years.
• Quote:
  • “You need to see, like, how many families at least contribute something… On the macro level, it will have a modest impact… it's at the micro level where what each individual family does will make a difference.” — Alexander Saidi (17:21)

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Notable Quotes & Memorable Moments by Timestamp

• On Why the Business World Cares:

  • “The business world is excited—specifically on Wall Street—about being a part of it.”
    — Alexander Saidi (01:48)

• On Trump’s Framing:

  • “It is indeed a big, beautiful bill, and it’s doing very well. The Trump accounts, as they call it.”
    — President Trump, quoted by Alexander Saidi (04:57)

• On Financial Sector Motives:

  • “What banks get, though, is a relationship with a child and their family… then they start to cross-sell you on all these other products that do actually make them money.”
    — Alexander Saidi (11:46)

• On Philanthropy & Politics:

  • “What we're seeing here is… wealthy corporate executives continuing to… do things that are aligned with the administration.”
    — Alexander Saidi (14:37)

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Timestamps for Key Segments

• [00:13] – Michael and Susan Dell announce $6.25B donation
• [01:00] – Explaining "Trump Accounts" and eligibility
• [03:35] – Brad Gerstner’s advocacy origins
• [04:57] – Trump’s public endorsement of the program
• [05:39] – Program mechanics: contributions and rollover
• [07:16] – Intended policy aims: financial literacy and demography
• [11:46] – Wall Street’s participation and motives
• [13:23] – Philanthropy’s role and Dell’s donation
• [15:13] – Business–White House relations, criticism
• [17:21] – Measuring success and open challenges

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Conclusion

This episode presents the Trump Accounts as a confluence of public policy innovation, Wall Street opportunism, big-ticket philanthropy, and subtle political signaling. While the immediate financial impact on individual families may be modest, the implications for the financial industry, American philanthropy, and future family formation politics could be profound—if participation, ongoing contributions, and further donations materialize as hoped.

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For more info on The Journal, visit The Wall Street Journal podcast page.

Transcript

[Jessica Mendoza]

Last week, Michael Dell, the CEO of Dell Technologies, made a big announcement.

[Alexander Saidi]

Thank you Mr. President. It's a great honor to be with you here in the White House.

[Jessica Mendoza]

Dell and his wife Susan revealed that they would be donating more than $6 billion towards a new government program.

[Alexander Saidi]

Susan and I are super excited to announce our $6.25 billion gift to million American children 10 and under.

[Jessica Mendoza]

The contribution would dramatically expand a new tax advantaged account for minors known as Trump Accounts.

[Unidentified Advertiser Voice]

Trump Accounts, Trump Accounts, Trump Accounts.

[Alexander Saidi]

The families that opt in will receive a one time payment of $1,000.

[Unidentified Advertiser Voice 2]

They must invest in diversified low cost.

[Alexander Saidi]

US stock index funds.

[Jessica Mendoza]

I talked to our colleague Alexander Saidi about this. What is a Trump account?

[Alexander Saidi]

It's an IRA for babies through a very small seed investment of $1,000 for any child born, you know, between the beginning of 2025 and the end of 2028.

[Jessica Mendoza]

Babies who are US citizens born between 2025 and 2028 are eligible for a $1,000 grant from the federal government to be invested in a tax advantaged account for their future.

The program was signed into law last summer as part of Trump's big beautiful bill and it's set to launch in early 2026. Alex says that from the jump, corporate America wanted to be a part of it. Not just philanthropist billionaires like Michael Dell, but also banks and brokerages that see a major opportunity in participating in the program.

[Alexander Saidi]

The idea is to have multiple private institutions offering Trump account rollovers so you can keep your money with the financial institution of your choosing. And so with the Trump account, the business world is excited about specifically on Wall street about being a part of it.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Wednesday, December 10th.

Coming up on the show, why Wall street is all in on Trump.

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[Jessica Mendoza]

The idea to create better investment tools for young people has been around for a while, but one venture capitalist has taken it up as his mission. His name is Brad Gerstner, and he's been working on the idea since at least 2021. And he'd gotten support from some Democrats, but he was having trouble getting it off the ground.

[Alexander Saidi]

He had wanted to get President Joe Biden to buy in on the idea, but just like, couldn't successfully get an audience with him.

[Jessica Mendoza]

Then last year, a friend of Gerstner's happened to be playing a late night poker game at the Bellagio Hotel in.

[Alexander Saidi]

Las Vegas, and he was near Senator Ted Cruz. And he told Cruz that Gerstner wanted to bring stock investment accounts to young Americans through an outfit he has called Invest America. And days later, he was in Senator Cruz's office talking about, how could we make this a reality for young Americans?

[Jessica Mendoza]

By June, Gerstner was at the White House for a roundtable event on the initiative. With him was President Trump, along with Michael Dell, Goldman Sachs CEO David Solomon, Robinhood's Vlad Tenev, and other big names in finance. At the event, Trump called the idea, which by then had been named Trump accounts, one of the most exciting parts of the tax bill he would sign into law in July.

[Alexander Saidi]

I also want to thank you for being here as we discuss one of the most exciting parts of the one big beautiful bill. It is indeed a big, beautiful bill, and it's doing very well. The Trump accounts, as they call it.

[Jessica Mendoza]

Can you just walk me through how a Trump account would work?

[Alexander Saidi]

This is all like being worked up in real time. There's still a lot of details that aren't fully fleshed out, but more or less what we know is that families will be able to sign up for the accounts and get access to $1,000 with the Treasury Department. But what they'll allow you to do is to roll it over into a financial institution of your choosing.

[Jessica Mendoza]

That $1,000 becomes a kind of seed fund for eligible children. Once the account is open, parents, relatives, friends, really anyone can contribute up to $5,000 a year. Contributions can be made starting on July 4, 2026. So how does this investment work? What happens to this money?

[Alexander Saidi]

You're very limited in what you can invest in. You have to essentially invest any money in a Trump account into an ETF or mutual fund that tracks the broader US Stock market. We'll see what is defined as eligible or not. It's designed that the fees on the fund you invest in are very low, potentially free. They don't want you investing in, like, you know, a private equity fund. It's really meant to be like the 401k that you don't touch. When the child turns 18, the Trump account automatically converts into an IRA, and then the money is essentially yours to use as you see fit, subject to regular IRA rules.

[Jessica Mendoza]

Trump accounts have two big advantages. Some get seed money from the government, and they're allowed to grow tax free. But they're also less flexible because the Trump account works like an ira. It means beneficiaries, for the most part, can't withdraw the money till they're 59 and a half without paying hefty penalties. And why is the Trump administration doing this? What is the problem it is trying to solve?

[Alexander Saidi]

So I think it's trying to do many things at once. The administration is really focused on the, I would say, financial literacy angle the most. This is an affordable way to teach people at a very young age about the value of saving money and investing money through a very small seed investment. You know, in theory, the administration is saying if you take full advantage of the program, you could grow that initial 1,000 seed into as much as $2 million. And there's obviously a really big asterisk on that because that means you need to do the maxim amount of private donations year over year. But I think the idea is, let's find a way to, like, teach kids the value of money, and it could change people's lives.

[Jessica Mendoza]

But financial literacy is just one piece of it. Fertility rates in the US Are lower than ever. And one reason is that people are delaying having kids because they're concerned about the cost of living. The Trump accounts come at a time when many on the right are trying to motivate young people to start families.

[Alexander Saidi]

This is essentially a type of incentive to have a child. If you have a baby, you get $1,000.

You know, why not? That's literally it.

[Jessica Mendoza]

Yeah.

[Alexander Saidi]

And this is a very relevant thing because we've reported at length on how one thing that seems to be holding up family formation in the United States, or certainly, you know, the choice to have kids or get married, is affordability and the perception that I'm not going to be able to afford to have kids. So even though this is small and just like a seed, right? This in a way sort of is like, look like, you know, we. The government will help you out.

[Jessica Mendoza]

When it announced the program, the White House didn't address declining birth rates, instead focusing on helping children achieve economic stability as adults. President Trump said the accounts would give children, quote, a shot at the American dream. Still, the policy's supporters say the accounts could shift the thinking around starting families.

Some of the most visible proponents of the Trump accounts come from Wall Street. That's because participating families can roll that initial thousand dollar seed money into into banks and brokerages. Financial institutions see that as a huge opportunity both to build relationships with customers and to show support for Trump's policies. That's after the break.

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[Jessica Mendoza]

The Trump accounts are projected to cost the government around $15 billion through 2034. If parents actually apply for and take the thousand dollars, that means all that money will get invested into the American financial system. That's good news for Wall street because it means tons of new investors and tons of money flowing to invest in American companies. And it's specifically good news for financial institutions. Everyone from banks like JPMorgan Chase to brokerages like Charles Schwab and Robinhood Markets are vying for a role in the program. What is the benefit for these financial institutions, you know, to participate in Trump accounts?

[Alexander Saidi]

Just the work of administering the program or offering the Trump accounts in the lifetime of the account probably won't actually make them money in and of itself. So the kind of investment management fees you'll get off of a Trump account is going to be very low, probably zero. What banks get though, is a relationship with a child and their family. And you could in a way like structure the Trump account into a broader package that you offer young families that include like mortgage, maybe an auto loan, basic financial planning, checking accounts, credit cards, a bundle and. Exactly. And the Trump account is like the seed that gets you in the door and then they start to cross sell you on all these other products that do actually make them money. And then when the child turns 18, their account will be rolled over into another investment account at this same shop.

[Jessica Mendoza]

According to people familiar with the matter. Many of the largest banks, brokers, and asset managers say they plan to make pitches to the Treasury Department. Robinhood CEO Vladimir Tenev even created a mock up of what the Trump accounts might look like and posted it on X, adding that the platform was, quote, ready to go.

Besides the administration and Wall street, there's another group of people hyped about this program. Big donors like Michael Dell.

[Alexander Saidi]

The Michael and Susan Dell gift is meant to be the like biggest example of and a catalyst for more outside money to come in and help finance it. So that gift, it's a huge philanthropic donation, probably the biggest private gift that's going directly to kids in American history. It's $6.25 billion, which is just a staggering amount of money by any stretch of the imagination.

[Jessica Mendoza]

Because the seed money is only for babies born from 2025 to 2028. The Dells wanted to expand the pool of children who could receive some kind of funding. Their donation will provide $250 for kids aged 10 or under who were born before January 1, 2025. And it'll target children in zip codes with a median income of $150,000 or less. The Dell's donation to the Trump accounts could be the first of many. Dell said that he spoke with other philanthropists ahead of his announcement last week, and he's expecting others to make gifts as well. And Alex says this is part of a broader move that has been on the rise in the second Trump administration. Philanthropists and executives trying to cultivate a good relationship with the president.

[Alexander Saidi]

What we're seeing here is like just another iteration of, you know, wealthy corporate executives continuing to, like, try and, you know, do things that are aligned with the administration.

Donating to various Trump causes has been a big theme of the year. I think what's been a very common scene is business executives gathering in the White House to talk about a business initiative that they're working on that also aligns with the administration's own strategic priorities.

[Jessica Mendoza]

Over the last year, companies from Nvidia to Intel to US Steel have been working to build closer ties with Trump.

[Alexander Saidi]

And that's a bigger story that's been playing out this year is the sort of proximity of business executives to the White House and the kind of game of influence they have to play to protect their own interests and stay on the good side of the White House, which has shown a willingness to go against business leaders they don't like or thought leaders that they don't like.

[Jessica Mendoza]

Some of these efforts to get close to the administration have drawn criticism in letters to corporate executives. Democratic lawmakers pointed to the $250 million ballroom under construction at the White House, noting that many of the donors supporting the project have active business before the federal government. Alex says helping to fund the Trump account initiative could be an easy way to signal support for the administration while also being charitable.

[Alexander Saidi]

This, at least, is a form of clear philanthropy. Like, this is direct giving to, you know, children. Right. But at the same time, you get to, like, put your seal of approval on it alongside the Trump administration. This program is called the Trump accounts, so any donation to it is sort of therefore linked with the president.

So all of these things are kind of playing together at once.

[Jessica Mendoza]

And for the Trump accounts, specifically, how helpful could these donations be?

[Alexander Saidi]

So if we see more and more of these types of donations, then what looks like a $1,200 roughly seed, could that grow into $2,000, $3,000, and that, you know, like, the compounding effects of that get more and more powerful. So we really have to see how much more the sort of top 1% in even the upper echelons of that group pitch into this, because that will give it even more firepower. So this is all very much, like, still in progress.

[Jessica Mendoza]

What are you looking for to know whether or not these Trump accounts work?

[Alexander Saidi]

It's gonna take a long time. It's gonna take a long time to know, and I think you need to see, like, how many families at least contribute something. Right. I think, you know, on the macro level, it will have a modest impact.

You know, but it's at the micro level where it's like, what does each individual family choose to do with it that will make a difference also, I mean, I think it's fair to say that because this is a blanket target, right? There's no income basis for how the Trump administration is giving out the funds. The people who are going to benefit from it the most are the ones who have the most to contribute.

[Jessica Mendoza]

That's all for today. Wednesday, December 10th. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode by Gunjan Banerjee and Hannah Aaron Lang.

Thanks for listening. See you tomorrow.

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