Are Trump Accounts Creating a Generation of Millionaires? | John Micha

Are Trump accounts a new way of privatizing social security? And are philanthropists going to invest in the kids by donating money to these accounts? Today we sit down with John Micah, who's an oncologist. He was running one of the largest practices in the country with oncology. He also was managing the finances for the retirees in their pension and getting 20% return a year. He's here to tell us what he thinks of these accounts and where they might lead us in the future. I'm Siamak. Welcome to Market Insider. John, it's great to have you on. Welcome. Thank you. It's great to be here. We want to talk to you about Trump accounts. You have recently wrote a bunch of articles about this, and you've watched how they work. Can you tell us about them? The Trump accounts are amazing. I mean, these are going to be something that people will be talking about 50 years from now, probably as big as 401ks, you know, that sort of idea when it comes to savings and investing. And these were approved by Congress and opened in 2026, in July of 2026. Many people haven't heard about them, but I have a six-year-old granddaughter who, when I did hear about it, I wanted to, you know, get one for her. And it turned out it wasn't very easy. I went to my accountants who are excellent accountants. They didn't know anything about it. I went to our investment bankers and they didn't know anything about it because they don't manage those accounts and so I ended up researching it on my own with my son and daughter-in-law and then you know obviously going online and trying to figure out what these things were and how they worked and basically they're an IRA for beginning when a child is born in America. Every child in America who's born is given one of these Trump account IRAs. And they are given a social security number when they're born, and that's all the government needs is their name and social security number. And the accounts are, when they're, you know, whatever, a week old, they have an account. That account has to have a parent attached to it to act as a custodian. So that is something that is just very simply done online using the iPhone or computer. But what happens is once that account is set up by the government, which is done automatically, then the parent goes on and logs in and shows they are the custodian or guardian of that child. Then money funnels through the parent's account into this new IRA account for the child. And the parent cannot touch the account at all. I mean, they cannot take money out of it. It stays in there until at least the child is 18 years old. And at 18 years old, the child could take money out for college or other things, but also have the option of just leaving the money in, which is, I think, what hopefully a lot of people will choose to do. It'll be their lifelong IRA. And the other thing, and this may be getting a little ahead of myself or too into the weeds, but at 18 years old, it'll be very easy to convert most of them into Roth IRAs, which are the IRAs where you don't pay taxes when you pull the money out. So initially, the accounts, they're all set up for the kids. Once the parents log in and establish that they're the guardians, then kids that are born in 2026 27 and 28 they immediately get a thousand dollars put in by the government into the account now they do have to be in a zip code that has a medium a median couples income of 150,000 or less but i think that includes practically every zip code in america I know I looked up Laguna Beach's zip code, which is a very wealthy beach community, coastal community here in Orange County, California. And their median couple's income was $144,000. So you have some billionaires, but then you have a lot of people that balance that out. And so really, if Laguna Beach is eligible, my guess is practically every zip code in America, the kids are eligible for the $1,000 from the government. So right now, that first three years of the $1,000 from the government, that will expire in 2028. And the government would have to decide, do they want to renew those donations to those newborns? So that will, you know, be something to be decided then. Michael Dell from the Dell Computer Company family in Texas, he's donated $6.4, $6.5 billion to go to kids up to 10 years of age. and that works out to about $250 per child that would go into those accounts for kids up to 10 years of age. So that's a larger pool, right? Well, most kids will get $1,250 as their initial investment. Everyone will get it, even kids that are older than... Just up to 10 years of age. Up to 10 years of age. It turns out there's like 72 million children we're talking about. So it's a huge number of kids that are getting this money and getting these accounts set up. On top of that, and this is a rapidly evolving story, but it's a great story. Elon Musk announced just a couple of days ago he's going to donate one share of SpaceX stock to every one of those children so that they will all have a share of SpaceX stock in the account. Initially, the accounts, you know, as I said, these accounts are evolving. Initially, they said that they couldn't, they had to be just in broad index funds only to be on the safe side for the long term. They wouldn't have individual stocks. But now that Elon Musk has come in and says, well, you can all have a share of SpaceX stock already, they've changed the plan, changed the rules. So they say, OK, we will take, you know, stocks like this. They have to hold them in the account for at least five years before any are sold. But the kids will start out with that. Now, there are a lot of billionaires who've announced they're going to do the same thing that Elon Musk just did, that they were waiting to see how it played out. I think they want to make sure, you know, that the accounts, the Trump accounts didn't just go to, say, rich families that were going to fund the account, that it was going to be really good for everybody, including the poorest families. And it is. It's good for definitely good for everyone. The most you can put in an account is $5,000 a year, so that if the government put in, and Michael Dell put in $1,250, grandparents, parents, friends, others, other foundations or companies can put in the additional $3,750, and so you can put in a total of $5,000 a year. That, maybe we can talk about it later, but amazingly enough, one of the reasons these are ideal for converting to Roth accounts is the only money that wasn't taxed when it was put in the account is the money from the government and from Michael Dell. The other $3,750 is already taxed. So when the kids are 18 years old, the parents, this is important for them to know, they have to keep track of where the money came from. to make sure if someone questioned it at 18, okay, you're going to convert it to a Roth. What percentage of this account has already had taxes paid on it? But there's a good chance that most people will be able to take the account, make it a Roth account, take money out without paying any taxes, which is amazing. Or, you know, alternatively, they can, I was reading just last day or two about how the Roth conversion would work. Most kids who are 18, 19, they have very little or no income. So if you make, you know, $10,000 a year working at, you know, ice cream store on weekends and when you're in college or whatever, your income's $10,000, and then you say you take $15,000 and convert from a regular IRA to a Roth IRA, that's $25,000. My understanding is there's no tax at that level of income. So you can convert the Roth over time if that was an issue. It's really amazing. The thing that I think, and this is fun for everybody to do, just go online and look up investment calculators. And if you put in just $1,000 when the child's born and nothing else at, say, 8%, 9% a year, that's going to grow to about, uh, $4,500 with just $1,000 at 18 years old. If you do, um, $1,000 a year for the rest of the kid's life, say till they're 55, um, that's worth, um, close to a million dollars. I think like $980,000. They're starting so young. They have so, I mean, that, you know, uh, advantage that they have over us is time and compounding over time. And the big, huge jump up is once they already have some money and over time, when they get to 40 years old, maybe they have 200,000 and then all of a sudden it's 400,000 at 48, then it's 800,000 at, you know, eight years after that, 56 and so on so that if the kids if families could actually get and corporations are allowed to donate to the employees kids other people if you can get five thousand dollars a year into those kids accounts for 55 years that's worth like 4.2 million dollars so then essentially everybody becomes a millionaire yeah they do it's i mean it is just amazing how you know those basic principles of investing work. I mean, the basic principles that you hear, Elon, I mean, Warren Buffett talking about for the past 60 years, you know, compounding and investing young and sticking with it. And this, the other, you know, things that are beautiful about this is, it's so hard to teach, I think, anyone, especially kids, but really anyone about capitalism. How does capitalism work? It's very hard for people to wrap their head around it. Well, here, already my six-year-old granddaughter, her mom has an account on her iPhone, and every day they're looking, hey, how are we doing today? Oh, look, we made, you know, $25 today. And she's like, wow, that's amazing. And what's the whole account worth? Oh, we're up $200. Well, that's so great. She's learning about capitalism at six years of age and about investing and about really how America works. I mean, how the free enterprise capitalism, how the stock market works, how investing works, how sticking with things long term works. um i think uh you know from that standpoint it's going to be a great educational tool and uh these kids instead of just looking at tiktok will be looking at how are my stocks doing how is my SpaceX today doing oh why did it go up what did elon say you know it's it's i think going to be a great learning tool and i would be surprised too i would think the schools would pick up on this at some point where they're gonna you know be talking about every kid in this room has an account how do they work we're going to teach you how it works and you can look on your phone. Is it $1,000 right now one time from the government? Fairly certain that it's just for newborns. So it's a one-time thing. So beyond that initial contribution, you know, I think other things like the Dell account, those are available to all age groups. And I think those would recur every year till the kid was 10. And Elon Musk is probably a one-time, everybody gets one share of SpaceX. Hopefully, again, someone like Warren Buffett, I mean, this should be perfect. I mean, a lot of people that find out when you want to give money to charity or, you know, I run a non-profit cancer foundation, Women's Cancer Research Foundation. It's really hard to find good charities to give your money to that actually accomplish something, that don't Just pay executives large amounts and build new buildings and advertise on TV and, you know, that actually produce what you hope they would do. I think it is so hard to if you're going to donate money to charity with obviously with good intentions, you hope that I remember reading years ago that Zuckerberg from Facebook gave 100 million dollars to the New York. to Newark schools. And he learned from that $100 million, this didn't work. And then he's tried to come up with another plan in San Jose, where he gave a bunch of money to start a school there. That hasn't worked. It's very hard to get things accomplished through most charitable routes. And I think that we, my PhD, I have my Women's Cancer Research Foundation, which is a foundation I started to do cancer research for gynecologic cancer patients, cancer of the uterus, ovaries, and so on. So we've been in the nonprofit field for over 30 years now, and it is very disappointing to see that there are very globally known cancer foundations that do not deliver what you were expecting from them. Now, we wrote two papers about one major cancer foundation that will remain unnamed, and basically what we showed in the papers, and these were peer-reviewed papers, so carefully looked at, but if you give $100,000 to this foundation, they take $20,000 off the top for their overhead. So you're down to $80,000. Then they actually only give 8% of their total money that they have coming in to research. So the $80,000 goes down to $6,400. And then they have to take the $6,400 and give it to someplace that does research. So say they give it to USC to do the research. Well, USC has a 50% overhead for the dean and all. So you're down to 3.2% of your money actually got to the researchers. Out of the 100,000, 3,200 made it to the researchers. Our foundation, we just, it's set up differently. You know, 90% of the money that comes in gets to the researchers through things like me working for free and having no, you know, paying for the expenses of the foundation. But that should be, if you're going to give money to something like Cancer Foundation, if you want to do it for research, find out where the research is being done and give it directly to whatever entity is doing the research. And, you know, even then you can, you know, it'd be good if you were able to do some due diligence to see what is the overhead. How does that money flow through the whatever system you give it to? Because I know there's been a lot of controversy the last year or two with the Trump administration looking at the Ivy League universities and Stanford and all saying that 50% of their grants from the government were going to overhead. And the Trump administration was saying this should be 15 percent, shouldn't be 50. And they went back and forth. And I don't know, you know, I don't think that's been settled, but at least someone's looking at it because I think most people that, again, if you give a big donation, any donation, whether it's $10 or $100 million, if you give $100 million, you'll find $50 million going to, you know, administrator salaries and to, you know, build a new building going to say, well, how much is actually getting to the researchers? Even there, I can tell you, if you take 50% off the top at a major university, and by even that 50% that feeds through, it's still likely to go to a department within the university. And there, the chairman is likely to take additional funds out. And sort of, you do have this, you know, cascade of entities in the nonprofit system. And, you know, it's even worse when you give it from one nonprofit to another to another. I mean, quite a few of these cancer foundations, like the one I mentioned, they basically raise money. They don't do anything. They don't do any research or actually take care of any patients. So they are the fundraiser, and then they just pass it down to another nonprofit who may even pass it to another nonprofit. So I think those really have to be carefully looked at I think the nonprofits in general have sort of been off people's radar, and the media hasn't covered it. I think people wonder why things like health care are so expensive, and, you know, it's amazing. I mean, a lot—I read the other day that nonprofit hospitals are making more money than for-profit hospitals. I mean, you have nonprofit CEOs making $24 million a year. So I think really looking carefully at nonprofits, the initial deal with nonprofit hospitals was they were supposed to take care of poor people. They had to have an indigent clinic. They had to take care of poor people. That's gone. And we see it here in Orange County, California. Our group was the only group for a while that admitted indigent patients to some of these fancy hospitals here. And that was, I think, part of something I did day one. I said, we're going to take care of everybody. And I know I'm talking to the hospital CEO. So that's a curious business model. But, you know, you're filling the whole floor for us. sure you know you can you bring them in and we're a non-profit it turned out number one the patients loved it number two the nurses loved it because they would take you know whatever mrs rodriguez and her 10 children and put them in the best room in the hospital ocean view room and they would just we were so happy and proud to have that patient in our hospital getting the same cancer care as everyone else. I think that, you know, that's something else when you start looking at, you know, healthcare systems. We haven't really put the screws to the nonprofits and say, look, if you don't have 10% indigent patients, you lose your tax deduction. And I think you would see these massive endowments stop growing and, you know, people starting to do what we think there's, what they think the nonprofits are doing. do you think more money is going to go into these kind of accounts because now you're saying this feels very direct right do you think there's going to be a lot more philanthropy coming oh yeah i think these are are going to be a huge source of donations because it's so clear i think and you know most of the people that have you know lots of money to give away i mean hundreds of billions of dollars or whatever they're business people and they look at this and it's it's such a clear solid business model i mean giving this money and locking it up for 18 years and uh not having any overhead i mean this i think the overhead there's not much overhead how does it work on the finance side well the government you know has the accounts they're running them they give them to the big wall street investment firms but what i've read is the charges are as low as like 0.01 percent so like one uh one hundredth of a percent or less because that you know with this massive amount of money if you get a trillion dollars in the account uh that works for them and they're just putting them in very standard um broad index funds so that it's not like they're sitting around you know having to figure out what to invest in next You invest in, it's the whatever, S&P 500, there's 500 stocks, throw it in there, you don't need to think about it anymore. So I think there's, you know, this Trump account, it's so concrete, it's so obvious, you don't have to worry about people picking off the money along the way, and the taxes are so low. So in terms of the education, you're a doctor yourself, and you were managing pensions for your team members. You had a good track record. Can you tell us about that? And then in terms of education, how do you think that these accounts will impact the kids learning about finance? Yeah, I became a GI oncologist, a double board certified subspecialist in women's cancer surgery and chemotherapy. and giving experimental medicines and doing research and take 17 years of training, the most of any specialty. I mean, more than heart surgeons, more than neurosurgeons, but in the end, you can really provide total patient care to these women's cancer patients. I got into that, it turns out, because my mother got uterine cancer when I was in college And I was going to become the next Ernest Hemingway or Jack Kerouac and be an American literature major at Reed College and also a comparative religion major. But when she called and said over the phone in my first year at Reed that she had been diagnosed with uterine cancer and she had had a surgery at Roswell Park Cancer Center and there was some spread of the cancer to a lymph node, but she said she would be okay. I'm like, I went to Reed College at 15 years old. I'm 16 years old. I didn't know what a uterus was, what a lymph node was, anything. Well, it turned out she lived for 13 years, and she did die from the uterine cancer. I did get to see her during those 13 years, respond to one new experimental drug, Megace, a progesterone medicine, when she had lung metastasis, and they all went away. So that was pretty miraculous to see. she eventually got brain metastasis and died from that but I think that the you know you try to figure out how people do things what they do in their life and my wife who's a Columbia University trained psychotherapist had told me for years John you became a G1 oncologist because every one of these patients is your mother and I thought that's crazy I mean how can every one of the patients be my mother. But now that I'm older, 74, you know, she probably was right. And that's why I was so obsessive and, you know, almost crazy about quality of care at all for these patients. The other thing that, you know, happened was I grew up in a poor family. And my dad was in World War II in Korea, spent 10 years in the military, uh came out uh as a excellent machinist uh just in time for all of the factories to move to Asia and uh you know uh really uh be between the war experiences and you know having his specialty eliminated in America uh yeah we grew up with uh some nights peanut butter sandwich for dinner and things. Most doctors are doctor's children and they've grown up comfortable. They never worry about, you know, what's going to be, or are we going to have dinner tonight? Or we can't pay the mortgage. What do we do? Things like that. You know, I was the exception to that. I know to this day, the other doctors have a hard time understanding that if you grow up poor, you, who every day you think you're poor. And it doesn't matter if you are worth 1 million, 10 million, 20 million, 100 million. I've seen some of the multi-billionaires say the same thing. They get up every morning like, oh my gosh, it's all going to go away if I don't keep building it. I think I finally got over that the last three months being 74. It's like, I can't keep building forever. And it's very stressful. But with the doctors, it turns out running my practice, my one-person practice in Newport Beach and running it very well because I was concerned about it failing. I was concerned about the finances not working. You can't have a research team if you don't pay them. You can't have chemotherapy nurses for every doctor, a chemo nurse, if you can't pay them. So I didn't have any training in business, but just learned it by trial and error and, you know, reading about it and talking to business people. But the practice grew from my little solo practice in Newport to being really the busiest, biggest practice on the West Coast with 26 doctors. Half of the gynecologists in California were in my group, including the gynecologists at USC, the private gynecologists at Cedars-Sinai, at Harbor UCLA, at Scripps, and elsewhere. And I think that I did end up going through the same experience with the pension. I could not, the first 20 years I managed the pension myself, and I made 19.4% a year. I was very proud. Buffett, Warren Buffett was at 19.3%. So I was beating Warren by 0.1%. But I did find out after that good 20-year run that with all the tech stocks coming in and China becoming a big player in finance issues, I couldn't figure out which stocks were valuable, which were not. So I did end up eventually giving it to an outside investment manager. That's why, to me, these Trump accounts are just amazing. I understand investing in pensions. I understand something about the stock markets and bonds. And these things, you could not, I'm just, it's so simple, but it's so, you know, perfect. It's so beautiful. It's so golden, the way this thing is set up. And I think it's just going to be, you know, great for kids, both in terms of accumulating assets, but also in terms of learning about saving and investing. And I think I already talked to someone the other day. They said they had, I don't know, like a $50 Christmas gift or a $50 gift that was given to their child. They asked the kid, do you want to go buy some toys with this or should we put some money in the Trump account? And the kid said, well, let's put $25 in the Trump account and go buy toys with $25. That's perfect. That's exactly what you want. I had a long discussion yesterday, actually. We've met with my investment banker and CPAs about the remaining part of my life. How do we plan out the next 20 years? And, you know, one of their biggest things that surprised me was you want to make sure your six-year-old granddaughter understands how to manage money. Because they see kids that, you know, if they get some money, kids can get spoiled with it or maybe not go to college when they should have. And that surprised me. I mean, I never, you know, this is my only grandchild, my wife and I's only grandchild, and I hadn't thought really, she's such a great kid, smart, energetic, you know, loves to go to Saddleback Church, which just, I mean, I went to church, but I didn't love to go. This kid likes to go to church with her friends and her parents, but I think that's a good point. you do need a system to try to educate your kids about money and finance and what happens if they waste it and make bad decisions and all. You know, I was telling you earlier, one of the only people trying to find some criticism of the Trump accounts, I see these different, you know, reporters, there must be something wrong here. You know, one that came up was that they thought 18-year-olds were not old enough to be given any money and that that's just too young. I have one son. At 18, he was fine. When I was 18, I actually had been in a pickup truck accident in Montana at 17 and broke my back in 10 places, broke my hip, had a concussion. The person who owned the truck sued the Ford Motor Company, and I ended up with $30,000 as my part of the settlement. And I saved it and used it for college and medical school. But, you know, I guess it's true. I could have taken the money and blown it. But to me, that argument, again, I'm not, I don't know the statistics of the psychological or investment literature on 18-year-olds. But I do appreciate that, you know, 18-year-olds are old enough to join the Army or be drafted into the Army. They're old enough to drive a car. uh they're old enough to leave home and 18 year olds even without any money whether they're poor or rich they manage to have problems with drugs they have problems with alcohol have car accidents electric bike accidents make other dumb decisions coming from my perspective a poor boy to say oh we're not going to give the poor boys any money it'll be good for them at 18 to be poor i don't think so. If you give them a little starting capital, I think at 18, they might very well say, wow, you know, I learned to be a barber. I'm going to open a barber shop. Here's the money for my barber shop. Not say, good luck, you have no money. And I think kids are more likely to get in trouble if they have no money. I think you're more likely maybe to get talked into selling some drugs or, you know, doing some other illegal things. If you feel you don't have any money, you don't have any future, you don't have any options. And to me, this opens up a lot of options for a lot of people. So I think that that's something, though, that certainly can be discussed. It's true, we definitely have some trust fund babies who got involved with drugs, and I'm sure a few of them died. But on the other hand, if you go to a poor neighborhood, inner city neighborhood, Compton or something, I'm sure there's plenty of kids there that got involved with drugs and died. To me, at least, maybe naive, but I think giving everybody some seed money and giving them a chance to, you know, get started with that and is good for America and trying to say poor people should stay poor and figure it out on their own. I mean, in terms of, you know, achieving, say, more equity, getting poor people to move up the economic ladder. To me, the best thing you can do is to get them some money to get education. You know, it turned out one of the things that I did that I mentioned earlier in taking care of poor people, people with no insurance, which, you know, not many private doctors starting in Newport Beach would do that. But it worked incredibly well because what happens is, say, a private doctor has a patient with no insurance who has cervix cancer, where there's two options. Send him to the university and he tries that. The university says, we won't take that patient. They have no insurance. They called me up, you know, John, I have this patient with no insurance. Will you see her? I say, yeah, send her over and we'll take care of her. Well, guess what? The next 10 patients that come to that private doctor, they're going to send to me. They're going to say he took that poor patient, took care of her. I'm not going to just send the university, my insured patients, we're going to send them all to John. And so, you know, some of these things really turn out working. When you do something good, you do get reimbursed or you do get rewarded. We had another situation with the Catholic Hospital where it came down to either our group was going to get the contract to take care of their GYN cancer patients or the university was. And I remember sitting at this long board table with all these medical directors and other administrators. And they said, you know, here's the contract. And John's contract is a little bit higher than the university's contract. And that's because he's paying his own nurses and PAs and rent and all. His contract is a little higher. And so then they have their discussion. They all So we got to give it to the university. At the end of the table was this little quiet nun. And after everybody talked, she says, John takes care of our poor patients at L'Amistad Clinic and our other poor clinics. He gets the contract. So there are things that happen in life where you actually do get rewarded for doing things that are stupid from a business standpoint or that do not make sense. And I think that's a good thing for people to hear. I mean, a lot of people think business is just cutthroat, and there's a lot of things to be said for having a good reputation and, you know, doing good things for people. And I think this Trump account, I mean, absolutely, if I still had my 130 employees, we would find a way to make some donations to the employees' Trump account. Now, I can tell you, a few of the doctors would be a little upset about it and say, why are you doing this, John? well, you know, it turns out they benefited tremendously. I set up a 401k for them. So all these doctors are retiring now and they're calling me, oh gosh, thanks you so much. I didn't know what you were doing. So it's the same thing. I know they do, the employees are the same way. I literally have some employees that were with me, you know, for 35 years that are, have a million dollars in their 401k and they were just normal employees, but the same concept, You start early, keep putting money in, and your normal working people can retire comfortably. Dr. John Micah, it was great to have you on Marketing Insider. Thank you for sharing all this with us. Great. Thank you very much. Tell us what you think about the Trump accounts. First of all, do you know about them? And second, what do you think of the idea? Make sure to tell us in the comments. I'm Siyamak Karami. This is Marketing Insider. We'll see you next week.