$1000 Baby Savings Account – Episode 633

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers, we’re going to talk about the savings account that is set up for babies. They get $1,000. It’s a $1,000 nest egg. It’s a part of the Trump big, beautiful bill. I have not read the bill. I think it’s probably thicker than the dictionary, nor do I want to read it. There’s some value in there. Can you believe that? $1,000 for every baby that is born between 2025 and 2028. What are the long-term effects of this, Kim? Well, it is so amazing what can happen with starting early and then also consistently adding. So one of the things that we work on in the Truth Concepts suite of calculators, most of our listeners know, my husband is Todd Lingford of Truth Concepts,

[00:58] and he has one of his calculators. Actually, anybody can grab these 30 days for free. It’s called maximum potential. Most people, when they look at finances like this, they want to look over 30 years. It’s either 0 to 30, or it’s 30 to 60, or whatever age-wise. If you take a baby and you put in $1,000 to start, or it gets put in for you, and then maybe you add $100 a month or something like that, people initially want to get it invested. They think it’s so important to get it invested. But what’s so interesting, if you break up the 30 years into increments of 10, so you’re going to look at 0 to 10, or if you’re 30 years old, you’re going to look at 30 to 40. Maybe you’re a 50-year-old and you’re just starting to save now. Well, the next 10 years, what’s way more important

[01:50] in an order of magnitude of 80% more important is the amount of money you put in, not the amount of money that it earns. And so it’s so awesome that this is going to get America thinking about saving again, saving as a verb, and then also storing savings as a noun. Because again, nobody wants to talk about savings as a noun. That’s very boring. You are financial planners that are out there. Everybody wants to talk about investments. And I have seen so many dollars lost through investments, which really should be called speculation. The stock market, the real estate market. I mean, I love all those things too, but the fact is what gets results in families is saving as a verb and storing savings as a noun

[02:48] so that you have that liquid emergency slash opportunity money. And there’s all kinds of rules of thumb out there, right? Like you’re supposed to save 10 to 20% of your income. Well, first of all, nobody really knows how to measure this. And they get super picky, like, well, is that gross income or net of my income? It doesn’t really matter because nobody’s doing it anyway. And so inside Prosperity Thinkers, we develop a method that lets you figure out your savings as a verb percentage of income so that you absolutely know what it is. And we’ve had so much fun developing that savings habit, that pay yourself first habit. But then it’s really critical once you get going on this. So, you know,

[03:34] we talked about 10 years, but let’s even bring it back to maybe two or three or four years. Then it does become important where you store your savings, the noun part of that word, because what most families do is they leave it in savings accounts, like what’s being talked about, and they pay taxes on the growth every single year. So in the early stages, it doesn’t really matter. Just put the money in, just get it going, get the habit going. But as you progress, being very important as to where you store your savings is going to make a massive difference over the rest of your life. Think about these babies. They are going to live 110 to 120 years easily. And if you are shocked by that, please go do some research

[04:28] on longevity. In fact, a baby born today is probably likely to live more like 130 or 140. That’s going to become real because of all of the amazing things that are happening in our world today. That’s a long time to pay taxes every single year on the growth of that thousand dollars. One, there’s evidence backing up what you’re saying about people living longer because the life insurance companies have adjusted their actuarial table to 120 years. Correct. So pulling in life insurance, let’s do this. So the Trump big, beautiful bill, thousand dollars for each baby. And that’s cool. It’s great. It will get people thinking about savings. Take the same thing. And let’s say the big, beautiful family,

[05:19] whatever your last name is. And it’s a life insurance savings account. What does that look like? The difference between those two? And again, we don’t know how the Trump one is managed. We’re not knocking it by any means. What does it look like when it’s set up correctly and a family is taking charge of it? Well, it is so wonderful that in America, we get the opportunity to take charge of our finances, that we don’t have to rely on only what the government puts forth. We’ll include theirs too. If they want to give us a thousand dollars for babies, that’s great. If they want to give us social security, that’s great. And families that care about generational wealth, even if it’s small dollars and they understand

[06:05] that generational wealth is not just the money, but it’s also the values and the systems and the structures and the mindsets that move from generation to generation will want to utilize life insurance along the way. Because number one, it is a private account. So we’re talking about whole life insurance at a mutual life insurance company that is owned by the family. Because when you buy a policy, you’re literally an owner of that company. And so it’s a private account. That account is also not taxed all along the way. So you’re talking a hundred to a hundred and fifty years while the child is alive of no taxation on the growth. And then more importantly, or I should say even more importantly, because both are

[06:55] important, there is a death benefit there. Yes, on that child. And that can seem really weird for some people like what I’m going to buy a death benefit on my one year old or my 10 year old. Well, unfortunately, in our lives right now, until AI figures something else out, death is a guaranteed event. And while we hope that it’s at 110 or 20 or 30 or 40 years old, it is still a guaranteed event. And so tying a guaranteed payment to that guaranteed event does something for the perpetuation of the family’s wealth, not only monetary, but again, mindset, values, systems, et cetera. So for example, in our family, this has been done, and I’ve got nephews that barred against the cash value, the liquid accounts of their life

[07:46] insurance policies and purchase cars and paid them back, borrowed against them again for down payments of homes and paid them back, barred against them again for real estate opportunities and paid them back. And so learning the structure of borrow against payback is so, so valuable. And when you look at it, this is why families like the Rothschilds that have built the banking empires, banking is all about borrowing against and paying back and utilizing collateral. And so within the life insurance industry, again, whole life, mutual company, dividend paying, you can do this privately. That’s awesome. So hopefully for all of our listeners that are hearing this, one, you’re grateful for any money that is coming your way. And two, grateful that we

[08:46] have our own autonomy to be able to manage this. And then if we go back to a couple of weeks ago, the episodes that we were talking about when we were discussing having family meetings and the generations get together, all of this is related. Kim, thanks for sharing your wisdom today on the podcast. Always a joy. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit ProsperityThinkers.com.