Raising an Investor: Mindset, Accounts and the Math of Starting Early
It is back to school season. New backpacks. New notebooks. A supply list that somehow gets longer every year.
But there is one subject your kids will use almost every day for the rest of their lives that probably will not show up on their schedule. Money. And more specifically, how to think like an investor.
For many high-earning parents, the hard part is not finding money to put aside. It is giving our children more than we had without giving them less of what matters: hunger, gratitude, judgment and the ability to make sound decisions when nobody is watching.
On this month's episode of The Big Bo $how, I tell the personal, three-generation version of this story: what my grandfather Julius taught me, the mistakes I made with my own money and what I am trying to pass on to my children now. Consider this article the practical companion—the mindset, the accounts and the math.
The account you open for your child matters. But the investor you help them become matters more.
Start With Ownership, Not Stock Picking
The first idea worth teaching is not which stock to buy. It is the difference between being a consumer and being an owner.
I explain it to my own kids with a simple question. Would you rather use your money to buy things from a company, or own a piece of one? Choose a company they already know to make the idea click. I used Amazon for my kids. To be clear, that is a teaching example and not a recommendation to buy any particular stock.
Owning does not mean betting everything on one company. Understanding a business is not the same as putting all your money into it. For most families and most kids, a globally diversified, low cost index fund is the simplest way to own a lot of businesses at once.
The goal at this age is not to raise a stock analyst. It is to plant one idea. You can be a consumer, or you can be an owner. Owners tend to build more over time.
Investor or Gambler? Know the Difference
As kids get older, and as the trading apps and the social media hype find them, the more important line to draw is between an investor and a gambler.
An investor generally:
Understands a stock is ownership in a real business
Has a process, or uses a disciplined diversified strategy
Has a time horizon and lets compounding do the heavy lifting
Accepts that markets rise and fall
Does not tie their self worth to a single week or a single trade
A gambling mindset tends to look like:
Short term thinking
Little or no real research
Oversized bets, or leverage with no risk plan
Chasing daily hype
Checking constantly and treating the market like entertainment
Believing a recent win proves skill
To be fair, not all trading is gambling. There are disciplined professional traders with a real process and real risk management. The concern is speculation with no research, no process and no time horizon.
As I like to put it, markets have always tempted people to get rich quickly. Today, that temptation lives in their pocket.
The Account Is the Container. The Habits Are the Education.
Once the mindset is there, parents ask the practical question. Which account? Two of the most common options are the UTMA and the newer Trump Account. They are not necessarily either or. In many cases they can work together. A reasonable rule of thumb is to take advantage of any government, employer or nonprofit contributions your child is eligible for, then decide how much to add on top and where.
A UTMA (custodial account) generally offers:
Broad investment flexibility
Long-term gains generally taxed at capital-gains rates, which are often lower than ordinary income
The ability to be used for the child's benefit before adulthood
One important catch: the assets legally belong to the child, and control transfers at the state's age of majority. That is why I generally caution parents against letting a UTMA grow too large. At some point it becomes the child's to control, ready or not
A Trump Account (a newer, IRA-style account for children) generally offers:
An account for a child who has not reached age 18 before the end of the year in which the election is made and has a valid Social Security number
A one-time $1,000 federal pilot contribution for eligible U.S. citizen children born from 2025 through 2028
An aggregate annual contribution limit of $5,000 for 2026 and 2027, indexed for inflation after that, for most contributions. Employer contributions count toward this limit, while the federal pilot contribution and certain qualified government and nonprofit contributions do not
Investments during the account’s growth period generally limited to qualifying low-cost mutual funds or ETFs tracking broad indexes of primarily U.S. companies
Tax-deferred growth, with distributions generally unavailable during the growth period except in limited circumstances. After that period, traditional IRA rules generally apply. The ultimate tax treatment depends partly on the source of the contributions because certain family contributions create tax basis
So how do they compare? The honest answer is that neither one is automatically better. The UTMA gives you flexibility and generally friendlier tax treatment on long-term gains, but the child gains control sooner.
The Trump Account encourages long-term investing and tax-deferred growth, but it is more restrictive and its withdrawals are generally taxed as ordinary income. Account and tax rules like these can change, so confirm the current details and talk it through with your advisor and tax professional before you act.
The bigger point is this. Choosing the account is only the beginning. The account is not the education. You are.
The Math That Surprises Young Adults
I have started working with the children of some of my clients, many of them in their early twenties. A lot of them walk in believing that real financial independence is out of reach. Then we look at the math.
Here is a simple, hypothetical illustration. It is not a promise, and actual returns will vary. Assume steady monthly investing from age 22 to age 65, a 7% average annual return, before taxes, fees and inflation:
About $300 a month could grow to roughly $980,000
About $500 a month could grow to roughly $1.6 million
I will not tell you that becoming a millionaire is easy, because it is not. It takes time, discipline and a willingness to accept real investment risk.
But starting early, with steady and relatively modest contributions, can make it mathematically achievable. That is the power of time. And it is exactly why teaching this early matters so much.
Time is the one financial advantage we cannot replace later.
3 Questions to Sit With
✔ Are you teaching your kids to be owners, or just consumers?
✔ Do your kids, or the young adults in your life, understand the difference between investing and gambling?
✔ If you opened an account for your child today, would you also give them the education to go with it?
For the personal, three-generation version of this story, listen to Episode 53 of The Big Bo $how.
Preparing the Next Generation Is Part of 360° Wealth
At Julius Wealth Advisors, we do not just help families manage the wealth they have built today. We help them make thoughtful decisions about how that wealth is used, taught and eventually transferred—and prepare the people who may one day be responsible for it.
To schedule a meeting, call (201) 408-4644, email info@juliuswealth.com, or get in touch online.
Building wealth is by choice, not chance.
Frequently Asked Questions
What is the difference between a UTMA and a Trump Account?
A UTMA is a flexible custodial account that can hold a wide range of investments, with long-term gains generally taxed at capital-gains rates. The assets legally belong to the child and control transfers at the state's age of majority. A Trump Account is a newer, traditional-IRA-style account for children with more restrictive rules. It offers tax-deferred growth but is generally locked until age 18, limited to low-cost index funds and taxed as ordinary income on withdrawal.
Neither is automatically better. In many cases they can be used together. Confirm current rules and consult your advisor and tax professional before deciding.
Are Trump Account withdrawals taxed?
Generally, yes. A Trump Account grows tax-deferred, but withdrawals are generally taxed as ordinary income. After the child turns 18 the account follows traditional IRA rules, so withdrawals before age 59½ may also face a 10% early-withdrawal penalty unless an exception applies. Rules can change, so verify the current details for your situation.
How do I teach my child the difference between investing and gambling?
Start with ownership. Help them see that a stock is a share of a real business, not just a symbol on a screen. Emphasize process over outcomes, a long time horizon, diversification and patience. The gambling mindset chases hype, makes oversized bets, checks constantly and treats a recent win as proof of skill. The earlier a child learns that distinction, the better prepared they are before apps and social media teach them something very different.
How much do you need to invest to become a millionaire?
It depends on your time horizon, contributions and returns, and no outcome is guaranteed. As a hypothetical illustration, investing about $500 a month from age 22 to age 65 at a 7% average annual return, before taxes, fees and inflation, could grow to roughly $1.6 million. Starting early with steady, modest contributions is what makes the math work, but it still requires discipline and accepting investment risk.
About Jason
Jason Blumstein, CFA, is the founder and CEO of Julius Wealth Advisors, an independent boutique RIA serving clients nationwide from Englewood Cliffs, New Jersey. His passion for investing began at just 10 years old, when his grandfather Julius turned off the cartoons, turned on CNBC, and began teaching him about stocks, discipline, and the values that build a meaningful life.
Shaped by early family financial hardship and inspired by Julius’s integrity and generosity, Jason built a career by gaining experience with PwC, Morgan Stanley, and J.P. Morgan. With a mission of offering transparent, education-forward planning rooted in Integrity, Knowledge, and Passion, Jason founded Julius Wealth Advisors in 2021. The firm operates in a fiduciary, client-aligned model built around long-term partnership.
Building Wealth Is By Choice, Not Chance
Today, Jason partners with High Earners, Not Wealthy Yet (HENWY) families ages 35–50, helping them build long-term, sustainable wealth through disciplined planning, deeply personal guidance, and analytical rigor he gained as a CFA® charterholder. He is known for his boutique, high-touch service, and for the educational clarity he brings to every conversation through The Big Bo $how podcast and Wealth of Knowledge blog.
Outside the office, Jason is a proud husband and father of two. He loves all sports, working out, watching the NFL (he has a complicated relationship with the Dolphins), rooting for the Mets, and staying active—a continuation of his college football days. To learn more about Jason, connect with him on LinkedIn.
This piece contains general information that is not suitable for everyone and was prepared for informational purposes only. Nothing contained herein should be construed as a solicitation to buy or sell any security or as an offer to provide investment advice. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. Past performance does not guarantee any future results. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. For additional information about Julius Wealth Advisors, including its services and fees, contact us or visit adviserinfo.sec.gov