The worst case scenario in life isn't going broke at 30... it's going broke at 60.

And I wanted to share my thoughts on how to avoid this for your kids after an Inner Circle member asked me the following question…

"What's the best way to pass money on to your kids when you're gone?"

First and foremost, there is no single "best way" to handle this...

And that's because the "best" solution is largely dependent upon their behaviors, habits, and values as adults...

So here's my thinking, and how Michelle and I are handling it...

I think it's incredibly important that our kids are motivated to go out and build a life for themselves...

The financial scarcity that young adults find themselves in when they're out of college or leave home is what creates the necessary pressure that forges and motivates them into finding their calling, pushing their comfort zones, and establishing their first big victories in life as adults on their own.

Being broke and waiting tables after I graduated from college was literally the fuel that powered the launch of my entrepreneurial career...

So while we want to make sure they have a safety net in place, we’re not going to tell them about it.

We want to make sure they're safe and comfortable in their elder years…

The money we’re setting aside for them now won’t be accessible to them until they’re at least 60 years old…

Why? Because that's when help and support is actually needed, and when the foolish financial trappings of youth have long expired...

The worst case scenario is ending up broke in your 60s… The drive, energy, vision, and adaptability that comes with youth has all but faded for most, and time is no longer on your side when it comes to compounding a portfolio...

I see people in this situation every single day and it's incredibly hard to watch...

So our top priority is to make sure that our kids don't end up in that position no matter what life throws their way...

And the world is going to throw some unprecedented curve balls in the years ahead…

The coming wave of AI powered robots is going to change the world in ways we cannot comprehend right now…

We’re literally just 3-5 years away from having machines that can do everything a human can do, but 10 times better and 95% cheaper...

I honestly have no idea what the job market will look like in 10 years, let alone 20...

The good news is that they'll have youth on their side and the energy and ability to adapt in their 20s, 30s, and 40s...

Whether it's a struggle, or they find their groove and build their own empires... That journey is theirs to travel and it’s the entire point…

This “Age 60+ Safety-net” is an insurance policy against a world that we can’t comprehend today…

Again… This is a complicated topic and our strategy is subject to change...

Step 1: We've set up Roth IRAs and Trump accounts for each of them.

The Trump accounts just opened for contributions on July 4th of this year, and between the two vehicles, we can put away up to $12,500 per child, per year.

The Roth allows that money to grow and compound 100% tax free for the rest of their lives, and to come out tax free once they hit 59½... The annual contribution limit for a Roth in 2026 is $7,500.

The Trump account adds another $5,000 per year on top of that, and here's the part most people are missing...

There's no earned income requirement on a Trump account, so we can fund it whether they're working or not. That money grows tax deferred, it's locked up until they turn 18, and then it converts into a traditional IRA.

Now there is one important catch on the Roth side... their contribution is capped at whatever they actually earn that year… So if they make $3,000 mowing lawns, then $3,000 is their limit. Which means the full $12,500 doesn't unlock until they're working real jobs. Considering they turn 16 this year, that window is now open.

Once they graduate, their number one priority each year is to take the money they make and max out the annual contribution limits moving forward at a bare minimum…

Because these accounts are in their name, they'll be able to control that money the moment they turn 18... (Or 21 in some states)

It will be our job to help guide them, educate them, and steward them in learning how to manage that money responsibly...

And... We also have to account for the fact that Michelle and I could both die next year, which would make the mentorship side of things significantly harder to do...

So their "real" retirement accounts are currently in our name and are controlled by our family trust.

The goal is to contribute $100,000 into each account by the time they graduate from high school.

Assuming that's the case, that means they'll each have around $45,000 between the Roth, and the Trump account by the time they walk across that stage.

And another $100,000 in their trust account for a total of $145,000.

I can't tell you exactly what the portfolio will consist of at that time, but here's the foundational rules and an example portfolio…

The foundational rules:

1: No single stocks, ETF’s only to prevent single-company risks.
2: Pick the EFTS of the lowest fees… (Which move the portfolio total by millions over decades)
3: Reinvestment of dividends turned on.

If I had to create a portfolio today and could never touch it again, here’s what I’d do…

VOO (40%) - This is one of the top S&P 500 ETFs with the lowest fees.

QQQM (40%) - This is a basket of the 100 largest non-financial companies on the Nasdaq, which is mostly big tech, and it carries the lowest fees in its category.

IBIT (10%) - This is the largest Bitcoin ETF.

PHYS (10%) - And this is a gold trust backed by physical gold.

Adding 10% gold and 10% Bitcoin is a controversial take, but I believe it’s warranted given the fact that we’re entering an age of significant Dollar debasement, and debt levels that are spiraling out of control.

Super Important: You MUST make sure you have "re-invest dividends" turned ON for all of these accounts and investments, as the reinvestment of dividends paid over time is the primary way this account will grow and accumulate more shares without any additional capital contributions.

Assuming a 15% average annual return, (which I believe is realistic given Dollar debasement and inflation), that would turn a $100,000 one-time contribution into $26.7 million in 40 years.

Not bad for a one time contribution of $100,000 contribution…

As of right now, we're not planning to allow access to this money until they're 60 years of age unless a distribution is required for a medical emergency...

That decision and amount would be determined by the trustee if we are no longer alive.

At the age of 60, distributions from that account would become accessible, and this is where the hard part comes in…

If they have proven to be good, responsible stewards of their money as adults... They save, they invest, they don't spend recklessly, etc...

I'd have no problem letting the Trustee turn over full access to the account...

But the real purpose of this money is to make sure they're good in a worst case scenario...

Meaning… If they never mastered control over their money, the job market for humans no longer exists, and so on...

In that case, I'd want a distribution limit of around 5% per year put onto the account so we don't end up with someone who feels like they've suddenly won the lottery and blows it all with another 30 to 40 years of life still to go. (Age 90 to 100+)

That's the grey part of this process that's impossible to see until time passes…

Remember… This money isn't designed to serve as their primary retirement nest-egg… It's their job to build that…

It's designed as a life-raft if they don't, and it’s a giant cherry on top if they do…

I’d rather hand our kids a life-raft they’ll hopefully never need, than a fortune that robs them of the reason to go build their own…

As for your next steps?

1: Setup Roth accounts for your kids

2: Setup Trump accounts.

3: Work with a licensed estate planning attorney to setup the primary trust and your rules for it…

Sincerely,

Mike Dillard ✞
Follow my verified Instagram.
(I do not have a backup account or use WhatsApp).
Customers: Login Here.