I'm so glad you're with us here on the Clark Howard Show.

You know, our mission is to serve you with advice and information that empowers you to make better financial decisions in your life.

And one thing I've been asked about repeatedly over the last month is whether a parent should start a Trump account for their child.

I'm going to give you what you need to know how the rules of this work.

And later, I'm going to give you something you need to be so careful of.

Cell phone sim swapping is ugly, ugly, ugly,

and can wipe out your assets so fast it's crazy.

I'll explain how it all works.

All right.

So speaking of how it works, the Trump accounts,

for a five-year period up until, I think, beginning of 29, a newborn child is seeded $1,000 by the federal government in a Trump account.

And the money has tight guardrails about how that thousand can be invested.

It's designed to go into low-cost index funds at an expense ratio and no more than

one-tenth of one percent, which is fantastic.

Parents have the option of adding up to $5,000 a year into one of these accounts.

Don't do that.

I'll tell you why in a second.

Employers can give employees of small children up to $2, bucks that comes to you tax-free. Do that. Take the employer money

if the employer offers it to you. So the way this thing plays out, you have a newborn,

you get the $1,000. It's like money falling out of the sky.

It's invested in the account.

You choose go into one of the low-cost index funds.

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