Starting on January 20, 2025, Donald Trump is now the 47th President of the United States, this time with JD Vance as his Vice President. Let's dive into what this new Trump presidency could mean for your finances.
The failed assassination attempt on Trump was a sobering reminder of how fragile life is, underscoring that unity and shared values should matter more than political divisions. I hope both parties come together to heal and strengthen the American spirit.
As investors, maintaining a calm, rational approach is essential. Emotions can easily cloud judgment and lead to suboptimal decisions. Now is the time to think strategically about what policy changes might mean for portfolios and financial plans.
What A Trump Presidency Means For Your Finances
In general, the Republican Party is for smaller government, lower taxes, and less regulation. The result of these policies could be an increased budget deficit and inflationary. However, the general view from an investor's perspective is that Republican policies are a net positive for your finances.
Here’s what you could see happen now that Trump/Vance team has won. If you look at history, stocks and real estate generally go up whoever is in power.
1) A Potential Melt-Up in the Stock Market
Despite an extraordinary rise in the S&P 500 since October 2022, a Trump presidency may add fuel to the fire. As a result, if there’s a time to be greedier when others are already greedy, it could be now.
Investors will get excited about the continuation of the existing flat 21% federal corporate tax rate or a potential cut in the tax rate. Since January 1, 2018, the nominal federal corporate tax rate in the United States has been a flat 21% following the passage of the Tax Cuts and Jobs Act of 2017. The TJJA might get extended beyond 2025 now.
With a lower concern for higher tax rates, corporations will logically set aside less money for future tax hikes and spend more to grow their businesses, which includes hiring. With potentially lower corporate tax rates, corporations will be able to boost their profits, lowering their valuations, and increasing their dividend payouts.
The thing with investing is that potential positive catalysts don’t have to happen for stocks to go up. It is the hope and possibility of a potential catalyst that will help bid up stock prices.
As a result, despite high valuations in the S&P 500 and other stock indices, you probably want to hold on and continue dollar-cost averaging. Expect more volatility, especially with new tariffs and a pro-longed trade war. When the market is expensive, it becomes more susceptible to sharp pullbacks.
If there is a 0.5% – 1% dip, you should probably buy. If there is a 10% or greater correction, you may want to back up the truck, as the last time there were trade wars, the market fell 11% but then rebounded by 32%+ within two years. This strategy shouldn't differ from your general goal of investing for as long as possible in the market.
2) Tech Giants and Companies with Monopoly Power May Benefit More Under Trump
At the margin, President Biden was seen as a tougher fighter against monopolies than Trump. In fact, battling monopolies was central to Biden’s economic strategy. As a result, companies facing antitrust suits like Amazon, Google, Microsoft, and Apple may see some relief under Trump, even though Trump also went after these companies.
Because we have not seen the federal government effectively break up tech companies' monopoly power yet (just levy one-off fines), you probably want to just keep holding these big tech companies.
We operate in a society where the rich and powerful continue to get richer and more powerful. Hence, you might as well keep owning shares in these dominant companies.
As soon as I saw Google roll out their artificial intelligence snippets in 2024, which plagiarize content creators without giving proper credit, I bought more Google stock. There's also no way I can overcome OpenAI and Anthropic's copying of my work, so I became a shareholder in both through Fundrise Venture, an open-ended venture capital product, which anyone can invest in too. Company is are staying private for longer, which means more assets should be allocated towards private investments.
With Trump announcing a $500 billion AI infrastructure initiative in partnership with Softbank, Oracle, and OpenAI—dubbed Stargate—it’s clear the government sees AI as a transformational technology. In 20 years, I don’t want my kids asking why I didn’t invest in or work in AI when the opportunity was so clear!
3) Real Estate May Strengthen Under Trump
Trump has repeatedly admonished the Federal Reserve for its high interest rate policy. Trump is reportedly planning to override the Federal Reserve’s independence when he returns to the White House in 2025. The overriding of the Fed’s independence is unlikely to happen, but it’s nice rhetoric for votes from those hurting from high-interest debt.
On the campaign trail, Trump promised to “drive mortgage rates down to 3% or lower.” That’s probably not going to happen either, especially with his inflationary policies such as mass deportation and tariffs. But at least he’ll be cognizant of high interest rates and try to push them down. Perhaps with enough moral suasion, at least the rise in interest rates will be capped.
While speaking at the Economic Club of New York in early September 2024, Trump said, “Reducing mortgage rates is a big factor. We're gonna get them back down to we think 3%, maybe even lower than that, saving the average home buyer thousands of dollars per year. They can now go out, young people will be able to buy a home again and be a part of the American Dream.” He talked about suppressing inflation again in his inauguration speech and targeting the 10-year bond yield after he became president.
Trump also built his fortune in residential commercial real estate. As a result, perhaps he will introduce more real estate friendly policies that will help the commercial real estate market recover. It is only rational to look after your own interests.
At Least Hold On To Your Real Estate
With pent-up demand, a strong economy, and potentially declining mortgage rates, there should be significant demand driving both residential and commercial real estate. As a result, I would not sell your rental properties or primary residence. Instead, I would hold on or buy more before a potential uptick in demand. The performance and evaluation differential between stocks and real estate is too large to sustain in my opinion.
I clearly remember the stressful times of bidding wars between 2000 – 2006, 2012 – 2018, 2020 and 2021, and the spring of 2024. Bidding wars are tough for buyers because there can only be one winner. I expect bidding wars to return in spring 2025 after a stronger-than-expected spring 2024.
If there is indeed a melt-up in the stock market, it will boost consumer wealth and help bring up real estate prices with it. The gap between the S&P 500 index and the S&P 500 real estate sector performance will likely narrow as a result.
I'I'm methodically dollar-cost averaging into private real estate through Fundrise. So far, I've invested $954,000 in private real estate since the end of 2016 and over $300,000 in Fundrise. I want to ride the potential commercial real estate recovery over the next several years.
4) Trump may encourage you to work harder for longer due to lower taxes and return to merit
When income taxes are high, the rational economic move is to work less and retire earlier since you get to keep less of your money. Under a Trump presidency, the fear of income taxes increasing should diminish. The top federal income tax rate will likely remain at 37%, rather than rising to 39.6% as President Biden has been advocating since 2020.
Here are the 2025 federal income tax brackets for single, married, and head of household filers.
The ideal federal marginal income tax rate to pay is up to 24%. At this rate, you're earning enough to live a good life, but you're not paying so much in taxes that you are disincentivized to work. Jumping from a 24% to a 32% marginal income tax rate is significant, while offering not much more benefit for the additional income earned.
Americans who make six figures or have the potential to make six figures a year or more, thereby have the incentive to grind it out for four years under Trump. In addition, Trump is also focused on a return to merit, which should inspire people to have hope that their hard work will pay off. More workers working harder for longer equals greater output, which should lead to greater profits, greater consumption, and a stronger economy. Intern, this leads to higher real estate and stock prices.
Once again, those who believe higher income and capital gains taxes are coming will be wrong for at least another four years. As a result, the sense of urgency to contribute to a Roth IRA through normal or backdoor channels fades.
Middle Class Tax Cuts
On February 6, 2025, the White House announced middle class tax cuts. Several of the key proposals include no tax on Social Security, no tax on overtime wages, and no tax on tips. These tax cuts should encourage more middle-class Americans to work harder and save more money.
- No tax on tips
- No tax on Social Security benefits for seniors
- No tax on overtime pay
- Renewing the Trump Tax Cuts from the 2017 Tax Cuts and Jobs Act
- Adjusting the SALT cap
- Eliminating special tax breaks for billionaire sports team owners
- Closing the carried interest loophole for hedge fund managers
- Tax cuts for Made in America products
5) Speculative investments like startups and crypto may also get a boost under Trump
Consistent with a potential melt-up in the S&P 500, there may be an even greater surge in the most volatile assets such as cryptocurrencies, public and private artificial intelligence companies, and venture capital overall.
After securing the support of Elon Musk, Donald Trump won the endorsement of venture capitalists Marc Andreessen and Ben Horowitz, before they flip flopped again. Andreessen and Horowitz believed Trump is better for startups and that President Biden has been against innovation.
In their post on “little tech,” aka startups, the firm writes, “The anti-startup bias that is increasingly pervasive across the American government is a clear and present threat to the health and vitality of American technology success – and therefore to the American economy, the American military, and the American people.”
Increasing asset allocation shift to venture capital
Hence, you might consider allocating between 10% – 20% of your investable assets to more speculative investments like venture capital in case they may surge to nosebleed levels once again. With up to a 20% allocation, any outsized gains will significantly impact your overall investment returns. At the same time, if such investments correct by 50%, your finances won't be devastated.
I'm dollar-cost averaging into an open-ended venture capital product that has a majority of its holdings in artificial intelligence. You can't invest in funds like Andreessen Horowitz, unless you are part of their friends & family network.
I have also committed $600,000 to a couple of other closed-end venture capital funds that will invest in AI. The capital will continue to be called over the next three years. I don't have the access or ability to pick AI winners, so I invest in various funds to hopefully find these unicorns. Check out Fundrise Venture, which has a minimum investment of only $10.
With Trump‘s launch of $Trump coin days before his inauguration, it seems like Trump is favorable on the cryptocurrency world as well. As a result, there will likely be more demand and interest for cryptocurrencies during his term.
6) Cash will likely be an underperformer
If the frenzy in risk assets continues under Trump and interest rates come down, then cash will be a significant underperformer. As a result, you want to put your cash to work, as holding too much cash could make you poorer over time.
There is supposedly a record ~$6 trillion in cash sitting on the sidelines. Stronger consumer and corporate balance sheets since the pandemic began is one of the main reasons why any downturn shouldn't be as devastating as the one we experienced in 2008-2009.
If the amount of money market fund assets reverts to the level seen before the pandemic, there could be a $2.5 trillion unleashing of cash into risk assets. Even if the money market fund assets revert to the level right before the Fed started raising rates, we're talking $1.5 trillion in cash looking to find a new home.
7) Buy American and protect America becomes popular again
Isolationism, protectionism, and nativism may return under Trump.
During his first presidency, Trump was highly protectionist of U.S. companies. Trump imposed several tariffs to try and make U.S. companies more competitive and protect jobs.
After tariffs on Chinese goods jumped from 3 percent to 12 percent, China retaliated by raising tariffs as high as 25 percent on many U.S. goods, including agricultural products and food.
In general, trade wars are not good for economic growth as everything just gets more expensive for everyone. It’s like if one person stands up in the front row, everyone behind must stand up to see.
However, a Trump presidency, along with JD Vance as VP from Ohio, could once again rejuvenate interest in investing in the heartland of America. More people who believe in Trump might be willing to move to Republican states to live and work. Surely, Trump will help those states that helped him return to power.
Given this trend, you may want to focus on investing in heartland real estate and companies. Trump should enact policies who helped his constituents win.
8) Inflation may pick up again under Trump toward the end of his term
Finally, the combination of rising asset prices, higher corporate earnings, rising incomes, increased tariffs, potential tax cuts, lower interest rates, increased government spending, rising incomes, and the mass deportation of illegal immigrants may lead to inflationary pressure. As a result, there will be greater pressure on the Fed to hike rates again after a period of cuts.
In economics, everything is yin and yang. Each economic change reflects a new change down the road. Given Trump's tariff policies are inflationary, we saw the 10-year bond yield spike by 0.15%+ the day of Trump's victory on November 6, 2024. This spike temporarily increases mortgage rates. That said, the Fed is still on a path to cut rates multiple times through 2025.
Below is the historical Fed Funds rate chart, which has been on the decline since the 1980s. As the Fed Funds rate rises, it cools the economy and often leads to a recession (gray vertical bar). As the Fed Funds rate declines, it boosts the economy, creating inflationary pressure.
The key is to own assets that ride the inflation wave, and the prime asset for this is real estate. Own your primary residence. Buy rental properties. Invest in private real estate funds long term. And consider owning some gold. If you do, you'll reduce complaining about inflation in 10 years because you will likely have benefited from inflation.
Everything Could Be Worse Than Expected Too
The reality is that whether a Democrat or a Republican is in the White House matters less for your investments than you might think. Historically, the S&P 500 has performed well under both parties. Many variables influence the S&P 500's performance, namely earnings growth.
The CEO of one, a solopreneur, makes a huge difference to their company's performance. On the other hand, if Tim Cook retired from Apple tomorrow, does it really matter? Plenty of lieutenants can fill his departure. Apple's share price might actually go up, fueled by hopes of a more visionary and innovative CEO taking his place.
Strategically, to make a top 0.1% income, your goal should be to become a CEO of a large company! You don't have to take any risks like entrepreneurs, yet you get paid obscene amounts of money for a job that plenty of people can do.
The President Only Plays A Small Part In Your Finances
The biggest factor in your ability to grow your wealth is YOU, not the president. You control your saving rate, work ethic, investment decisions, and career choices, not the president. Don't rely on having the “right” president to help you achieve financial freedom.
Ultimately, every U.S. President is a power-hungry patriot who is trying to do what's best for the most number of Americans. If the President does a poor job, thanks to our democracy, they will be voted out.
Life is precious, yet fleeting. Try to understand other people's points of view before attacking. Connect through non-violence. We have more in common than we think.
My plan is to put my head down and do whatever it takes to take care of my family over the next four years. I'm grinding my way back to financial independence, witg a greater belief that I'll get there by December 31, 2027. Along the way, I will try to help readers achieve financial freedom sooner, no matter their political affiliation.
Since 2009, I've found that people who are more financially secure are nicer and happier. As a result, more good comes into the world.
Diversify Into Real Estate In The Heartland
If you're interested in diversifying into heartland real estate, check out Fundrise. Fundrise manages about $3 billion for over 350,000 investors. The majority of its investments are in the Sunbelt and Heartland, where valuations tend to be lower and yields tend to be higher. A Trump presidency should be a net positive for heartland/Sunbelt states that supported him.
I've invested six figures into Fundrise and Fundrise is a long-time sponsor of Financial Samurai.
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Sam: I’d love for you (and us, your readers) to revisit this article end of Q1 2025, and see where we stand…predictions, fears, etc. of markets, tariffs, Project 2025, fed employment, DOGE, Russia/Ukraine/NATO, inflation, and so many other topics referenced in the comment section. Could be a fun exercise
We’ll definitely revisit at the end of year in my year in review. Been doing it for 15 years now!
Just a fun tidbit, when I logged into my coinbase account, it said that Trump was now available for purchase. So I think Trump will be a crypto friendly president. Which personally I was happy to see.
Of course I’m not going to buy any Trump coin. I have enough crypto as a percentage of my portfolio and I’m just in Hodl mode. If I were to buy more crypto, it would just be Bitcoin. I wouldn’t buy the other cryptos unless one of them had a really compelling use case and ecosystem. Which they don’t at this time.
I can understand financial bloggers not picking political sides. Why risk angering half your readers?
But to claim that investors should be indifferent to which politicians are in charge because their policies have no systematic effects on the economy and financial markets is just baffling.
If there is one strong lesson from economic history it is that policies DO matter, a lot, especially over the long run. Mismanage your economy and you stagnate or worse. Manage it well and you prosper.
So what are good and bad economic policies?
History shows free trade and prudent public finances are the best. And protectionism and imprudent spending/borrowing are the worst.
Pick protectionism and at the extreme you end up like North Korea or Venezuela. Even less extreme versions like Argentina and the Philippines stifle productivity and prosperity and keep citizens poor (apart from the crony capitalists). Whereas free trade encourages your competitive industries, which then export to the world; and penalises your uncompetitive industries, which then need to make way for imports.
And has no blogger familiarised themselves with the the Smoot-Hawley tariff of the 1930s and the trade war it sparked? World trade went almost literally down the gurgler, which then prolonged the Great Depression. peltiertech.com/spiraling-down-the-drain/
So I am astounded that normally thoughtful bloggers just shrug at Trumponomics and say, Nothing to see here. Or worse, say he’ll be a big boost for confidence and profit margins, which will plump our portfolios nicely thank you very much. The man wants to ‘bring manufacturing back’ — a laughable pipedream — and is heedlessly reckless about Uncle Sam’s Aaa/AA+ credit rating.
Now anyone can argue with my points, but you can’t simply brush Trump’s policies under the carpet, or say he has a magic economic wand.
Thanks for sharing your thoughts. No matter how divided opinions might be, the election results are final, and there’s nothing anyone can do to change them. From a personal finance perspective, the key is to focus on understanding the next President’s policies and strategizing accordingly.
Historically, the S&P 500 has performed well no matter who has been president. See: Stock Market Performance Under Various Presidents
Given it sounds like you are against Trump, what are some actionable steps you are taking to ensure you are better off in the future? The more actionable items you can share, the more people can learn and flourish. Thanks.
Related: Financial Planning Through Various Presidents: My Journey
As much as I disagree with all the nonchalance and complacency and wishful thinking about Trump on the investing blogs, I do agree with you, Sam, that individuals still need to be making the best possible decisions they can about the things within their control — ‘saving rate, work ethic, investment decisions, and career choices’.
For my part, I am taking Trump’s win as a trigger to rebalance my portfolio. I am selling down,at the margins, US equity, tech and world equity ETFs that have been booming in recent years. And for the first time in my life, I have put the proceeds into a physical gold ETF. Not because gold excites me, but hopefully it will stabilise my portfolio if things go pear-shaped with equities. Otherwise, as a long term buy-&-hold investor, I will just keep buying broad, diversified equity index funds when I have saved some cash and when distributions become available to reinvest.
I will avoid trying to pick Trump winners and losers, on the grounds that I will either draw the wrong conclusions, or if I am right, the market will have already priced that in.
I am certainly not making wholesale adjustments to my portfolio or saving/investment behaviour, because I know the Investment Gods would punish me for my hubris.
Sorry, BTW, if I gave the impression before that I was criticising you particularly. I thought your comments about Trumponomics were actually quite fair and balanced
All good. Thanks for sharing your thoughts and I hope things work out even better for you.
I’ll be curious to see if there are any real estate incentives given Trump’s background in real estate, and whether lower rates will help spur real estate, demand and prices, which have been lagging behind stocks since the Fed jacked up rates 11 times since 2022.
You, sir, have the right to your opinion and so am I. I do not believe you are correct that Trump wants to destroy free trade because in the world we live there is no such thing. Do you believe subsidizing a product to dump it in other country, or selling it below cost to maintain a market share constitutes a free trade practice? Can recipients of such product erect barriers to protect their industries especially if such industry is of vital strategic interest? Or, if a trading partner imposes a quota how much your product can enter their country, does that constitute free trade? Should a country in the name of national security protect its border not only through physical barriers but also economic means at its disposal if its neighbor dumps thousands of tons of illegal drugs and billions of dollars worth of pirated goods? Sometimes such tools are necessary even though from the pure academic standpoint tariffs exact economic loss on the society. But one could also argue that in some cases lack of market protection creates even bigger losses in the long run. Trump modus operandi is to be bombastic and say crazy things to bring the other side to the bargaining table. He wants to impose tariffs on some countries not to destroy trade but also as a bargaining tool to get political and economic concessions. Could those tariffs create inflationary pressure? Perhaps in some cases although one could argue that tariffs imposed on China during his first term did not raise prices at all.
As far as your prediction that Trump will not bring new investments into the country which will result in creation of American jobs is just laughable. Not one week passed from his inauguration and we have over $1 trillion in new projects and perhaps twice as much by the end of this month. So please sell every US share of stock as you see fit and wait perhaps until you see a government that better aligns with your political views. In any case betting against America has never been a good strategy whoever runs it. I became a millionaire under Bush, tripled my net worth during Obama, then doubled it during first Trump, then again during Biden and will do it again this time around. 2008 crash, covid, and 2022 bear market correction were all great buying opportunities.
One headwind not mentioned in your article is the impact of DOGE on government employees. Presumably a significant number of jobs will be eliminated to stop government waste and those impacted will need to find new work. Thoughts Sam?
I hope there are quite a few who quit or are fired from their govt. jobs. I’ll need someone to pick my lettuce, tomatoes & avocados now, what with all of the illegals going back to their home countries. I must try to maintain my 1st-world lifestyle you know! I believe many govt. workers have the skill-set for picking fruits/veggies.
I plan to max out my 401k and other investments and live as frugal as possible.
Well done. Don’t plan to do it, do it! In 10 years, you’re going to be thrilled that you did.
I am! In fact instead of a new car, I loaded up on S&P stocks and increased my 401k a great deal. I rarely drive anyways and rather build wealth than a shiny new car that loses value. If I can get my monthly contributions to accounts up to 5k month then can really go into beast mode for investing before retirement.
“However, Trump has stated he wants to bring mortgage rates down to 3% to make homeownership more accessible for Americans.”
Please tell me how DT is going to do this? The POTUS controls mortgage rates now? Explain
Sure, by not enacting policies that are inflationary. If he does, this, the Fed will continue to cut rates and mortgage rates will likely slowly fade downward.
my hope is mortgage rates drop again low so I can pivot to a nicer property.
Tariffs, if enacted at the levels suggested, would be very inflationary. Mass deportation, if enacted at the levels suggested, could up-end the labor markets which would also spike inflation. So there appears to be some inconsistency.
Don’t fall into liberal nonsense. First of all, tariffs imposed by the Trump administration during his first term caused hardly any inflation which was under 2%. The possible new tariffs will be retaliatory on those countries which put steep tariffs on American goods. The goal is to use them as a bargaining chip to ultimately have FREE trade without tariffs. Second, the priority of deportations will be violent gangbangers, 14,000 known murderers, and 500,000 felons Biden let in and not those who try to make honest living until their immigration case is heard. Those who qualify for asylum will stay while those who want to abuse the system should eventually be deported so the rule of law will prevail. So deportations could actually save the money and not up-end labor markets.
As someone who follows economics I’m agnostic when it comes to liberal or conservative nonsense. The tariffs of Trump’s prior term were limited and avoidable by shifting production to other countries. His currently proposed tariffs would be far more reaching. And with regards to your deportation numbers, you’re coming up about 19+ million short of what Trump has stated publicly. But like many things Trump says there is usually a wide gap between his rhetoric and reality. Time will tell.
Are you getting your information from ladies of the “View”? Deportations will start with criminals and those illegals who have already received deportation orders. That’s about 2 million. The remaining mass of illegals can sleep well if they don’t commit crimes and contribute and don’t bleed our social services dry. If all aid is withdrawn from them we will see how many will choose to stay. Green light should be given only to legal immigrants while illegals need to leave.
in the theme of waiting to see how things play out, I just read an NBC news article today that was published on the 24th ICE Said that of 373 arrests on Thursday, 165. Had not been convicted of any crimes some and some of those were only accused of illegal immigration. Based on those numbers, it seems deporting any illegal immigrant is on the table.
I the see the headlines of criminals being arrested and deported. But they are mostly onesie twosies. It seems unlikely that millions of illegal immigrants are hardened criminals.
I’m part of a family of republicans who were getting pretty nervous leading up to the election. I told them not to worry, we’ll make money no matter who’s elected. Ultimately, like you said, it’s up to us to determine our financial path, not the politicians. On the margin I should do better financially under a Trump regime. Taxes are my biggest expense and hopefully at worst they’ll stay the same.
same here well I am an independent but Kamala anti-investment stances on stuff like capital gains taxes, price controls, and taxing unrealized gains on real estate just frightened me as an investor.
Where should I put the cash I currently have in a money market account during an inflationary period? I hold several rental properties, so I prefer to keep cash reserves for extended vacancies or significant repairs, but no one wants to lose money due to inflation.
The 10-year bond yield has spiked up 15 basis points after Trump got elected. So just leaving money in a money market fund or rolling 3-year Treasury bonds work. Yields have all risen. You should be able to get 4.5%+.
Bitcoin, gold or water front property. Best strategy is to hold scarce hard assets.
short-term TIPS, indices tracked by the etf’s STIP or VTIP for example are a low cost way of accessing a rolling ladder of these bonds. I think you want to be protected by the manifestation of significant “unexpected” inflation going forward.
I think the odds of a Trump presidency dropped way back down to 50/50 coin flip. Amazing how quickly the American public and media moved on from the assassination attempt and switch to Kamala. It shows how unlikeable Trump is to 50% of the population atleast. That people memory holed that event rather quickly.
I’m not complaining, cause Trump’s policies would be bad for our specific situations.
For those afraid of far right Project 2025:
“President Trump’s campaign has been very clear for over a year that Project 2025 had nothing to do with the campaign, did not speak for the campaign, and should not be associated with the campaign or the President in any way,” the statement from LaCivita and Trump adviser Susie Wiles stated.
“Reports of Project 2025’s demise would be greatly welcomed and should serve as notice to anyone or any group trying to misrepresent their influence with President Trump and his campaign— it will not end well for you,” the said.
Trump, like most politicians, lies through his teeth. He’s a very vengeful man and once in power will do everything he can to punish those that didn’t vote for him. That statement alone.. “it will not end well for you”.. show’s his vengeful nature perfectly.
You are in the minority my friend. It’s time to wake up.
This comment isn’t aging well lol
Read agenda 47 to get a list of agenda if Trump becomes the 47th president.
Meat and potatoes
If the ambitious policy wishlist becomes a reality, here’s how some aspects of American life would change.
Government bureaucracy: The president would get more direct control of independent agencies like the Federal Communications Commission by gaining the ability to fire their employees, and the agencies would be retooled to carry out the president’s agenda. Many career civil servants would hear “you’re fired” and be replaced by staffers who support the administration’s priorities, though a recent Biden admin rule could make it harder.
The Department of Justice (DOJ), which Project 2025 claims the public views as corrupt since it has been weaponized to advance Democrats’ goals, would be remade with a particular focus on a “top-to-bottom overhaul” of the FBI. The DOJ would focus more on combating violent crime, election fraud would be criminally prosecuted, and its attorneys would avoid taking positions contrary to the president’s agenda in civil cases.
Economy: The Fed’s mission would be limited solely to restraining inflation by controlling interest rates (it’s currently also tasked with promoting maximum employment). The central bank would also be limited in the ways it could inject money into financial markets, and it would no longer bail out banks during crises. More radical alternatives floated by Project 2025 include abolishing the Fed or reintroducing the gold standard.
Taxes: There would be just two income tax brackets (down from the current seven), setting a maximum tax rate of 30% instead of 37%. Anyone making under $168k would be taxed at a flat 15%, effectively raising taxes on low- and middle-income taxpayers whose earnings currently fall into the 10% and 12% tax-rate tiers. It would also reduce the corporate income tax from 21% to 18%.
Immigration: The Department of Homeland Security would be dismantled (via legislation), and its functions would be handed over to other departments. Meanwhile, a more powerful immigration enforcement entity with 100,000 employees would be created by consolidating many existing forces.
Healthcare: The widely prescribed abortion pill mifepristone would become illegal and the government would collect data on people who get abortions.
Education: The Department of Education would eventually be eliminated, and states would be responsible for disbursing federal education funding (including Title I dollars for low-income districts). Parents would be granted opportunities to spend government schooling funds how they see fit. The Head Start program, which provides free preschool for low-income families, would be axed, and fewer kids would be eligible for free school lunches.
College loans would be handled by private lenders and some of Biden’s loan repayment programs would be nixed.
Weather and climate: The National Oceanographic and Atmospheric Administration (NOAA) would be dismantled, while its subsidiary agency the National Weather Service (NWS) would focus primarily on data collection for private companies to use. The NWS would commercialize its data, selling it to private companies that would deliver all forecasts. The Office of Oceanic and Atmospheric Research would not conduct climate change research, as Project 2025 blames the agency for “NOAA’s climate alarmism.”
Culture: The federal government would prioritize traditional values like the “nuclear family” in its policymaking. Pornography would be banned and anyone disseminating it would be prosecuted.
Looking ahead…even if Trump wins and decides to enact parts of Project 2025, many of the proposals would require congressional approval and could face court challenges.—SK
Most all of this sounds fantastic. The thing is, the states can handle all of this better than the federal government can, and it’s their money! Plus, the Constitution literally says it’s their right to do so. Trump is MORE of a Constitutional prez than his opponents – they don’t like him because he threatens a lot of their jobs and their authority, just like Elon did with folks at Twitter.
When can this start? Sounds great!
“,,,abolishing the Fed”.
Since the Fed was established in 1913, the value of the U.S. dollar has declined by 96%. What other country could have done this to our currency, without us responding with military force? None.
Who decided these economists would be knowledgeable? My cat could have done a better job, at much less pay.
Hello Sam,
Would you do a more comprehensive article on Private Equity investing. I would like to know how to participate while paying minimum fees. I would be considered an accredited investor. I want to start small with say, $500,000 but could do more if that’s not enough to participate in the “real thing” (for lack of better wording). My money is in IRA’s so I don’t believe anyone will allow me to participate in anything that has capital calls over several years. What can I do to get involved at low cost.
Great article!
As for Trump’s chances, yeah they went up big time after getting shot and pumping his fist in the air with blood on his face and an American flag flying over top. I mean that picture is gonna be seared into a LOT of Americans heads. I mean when you have everyone from 50Cent to Zuckerberg talking about it.
To answer your other question, I would expect my financial situation to resemble the way it was during his first term, which was great. One thing I didn’t see addressed in your article, which I might have missed is energy independence. I remember OPEC having a big meeting during his term and agreeing to cut prices, I expected oil to go up immediately afterward and it didn’t move a penny. Trump is going to be big into every kind of energy there is I believe. And that is really going to help drive down inflation IMO, as that makes up a big cost of transporting goods. I believe we have a ton of LNG and he’d likely tap into that big time as well to sell to our allies.
That event feels like 10 years ago now. I’m surprised how quick things can be memory holed. But then again, kids get shot in schools almost daily and we move on. I care more about a kid getting shot than Trump. Kamala replacing Biden was a necessary move.. If Biden were still running, the assassination would still be in the headlines.
Interesting how everyone saw Harris replacing Biden as a necessary move once it was obvious he was going to lose but his party didn’t think that when picking their candidate.
Sam – at Fundrise, the Venture Innovation Fund had a July 22 inception. Since then it has a 1.1% annualized return.
Spy is up 66% since then.
QQQ is up 60% since then.
What am I missing? I get they are investing in private companies. Does that mean if one goes IPO and does well that 1.1% could turn to 10% in like a day, right after the IPO? The returns have been paltry to say the least with huge missed opp cost. And I am having a hard time from their prospective to understand how fund appreciation occurs. I am interested so any insight would be great.
Correct. Private companies tend to fundraise every 18 to 24 months, and if they raise at a higher valuation, the value of the companies get revalued higher in the portfolio.
So it is precisely because SPY and QQQ are up so much that I am investing in private growth companies. They have also grown in these past two years, actually even faster, but their valuations have not been revised up due to no fundraise or exits. So in my opinion, this is a great arbitrage opportunity to be able to invest in a fund that invested in companies in 2022 before the revaluations. I expect half of the portfolio companies will go public within the next 24 months.
A lot of people do not understand this concept or can identify funds to invest in or analyze the investments. I am thrilled to be able to do so now.
Of course, there are no guarantees and the next rounds could revalue these private companies lower or the public market could crap out.
Sam,
That’s I was thinking. No material IPOs yet. After reviewing the portfolio companies, I think this fund may have some legs in next 12-24 months. With it being an open-ended fund, I’m liquidation, but I’ll dive into the prospectus. All in all, great way to get exposure for smaller investors and I’m excited about a lot of their portfolio companies. PS – Tell Ben to check out Shield AI! Another small drone company primed w/ demand. – Sky
I’ve been very disappointed with Fundrise returns as well. I’ve got $200k invested and have been holding since 2019. My return has been 2%. Pathetic and I’m considering cashing out now and putting it back into equities and crypto to make up for time lost
Which fund did you invest in? The income fund and opportunistic credit fund have done very well given high interest rates. On the other hand, since the Fed started jacking interest rates aggressively in 2022, flagship fund has struggled.
However, with a fed now, cutting rates over the next couple of years, potentially, and mortgage rates hopefully coming down over the next couple of years, there is new life in the commercial real estate market.
I spread out my investment over income, balanced, and growth funds. To be fair, I didn’t invest all $200k at once, but I have invested it over a 4 year period from ’19 – ’23.
I just logged in and it looks like they changed the look of the website. When I click on the portfolio section is says annualized return all-time is 1.7% and then next to it it shows cumulative return is 9.1%. This is something new.
If past is prologue look for him to mismanage the first major crisis of his presidency throwing the country into an economic downturn. There have been 11 recessions since the 1950s. Ten have started during republican administrations.
What to do? Raise cash and wait for the crash.
Is there already a crisis waiting in the wings? I wonder what’s being planned, considering that several organizations have already promised to “get to work” WRT “stopping Trump” on day 1 of his presidency. I guess democracy is only democracy when one side wins.
I fear that every single number regarding inflation and unemployment (and related – CPI, PPI, etc) has been fraudulent for the past 4 years. It will be interesting to see how soon these are corrected and if the pending Truth and Reconciliation Commission can get in front of the real numbers coming out come January. The recession has been in place since the end of 2022.
Curious no one has mentioned risk of losing ACA healthcare and student loan chaos…. Maybe Trump won’t focus on this stuff this term. I have a feeling his donors want him to focus on 2025 tax cuts first.
As a person who spent many years under communism Marxism is the thing I fear the most and one party is good at introducing it under the veil of PC terms such as social justice, equity, diversity, you name it, instead of using harsh rhetoric of the Communist Manifesto. The result, however, is the same leading to the destruction of opportunities America has to offer like individualism, competitive spirit, personal responsibility, reward for hard work, freedom of choice and enterprise to name a few.
Speaking of personal finances, I think I will do well under either president, although I will probably be hit hard if Biden lets Trump tax cuts expire in 2025. I agree if elections were held today Trump would easily win although many things could change between now and November. Hopefully, the GOP will be able to articulate an economic program that will improve life of an average American, reduce crime, and secure our borders. As an immigrant, who came to this country legally and followed the lawful process, I detest the collapse of the rule of law and the lack of enforcement of our immigration laws.
As an investor there is one thing I would like to disagree with your excellent analysis. I think the market is beginning to factor Trump’s victory already and the process of melting up is under way. That is why the best time to buy is today rather than waiting until November. I also doubt we will have a 10% correction between now and then because too many people expect it and the market rarely does what people expect. I’d very much like to have it but I am buying what I can and now and sell puts on what I want to buy later.
Word.
I assume your comment about communism and veil of PC things like social justice is directed at the current democratic admin. If so, your reasoning is wildly inconsistent. YOu are mixing up social issues with economic issues. Equality of gender, sex, abortion rights are not PC but have policies that are a character of this administration. The more equality across all races and genders and individuals promotes competition (instead of just competition among white males, or just males, or just heterosexuals). On the other side the Trump administration has sought to curtail individual liberties, which is exactly a characteristic of communist nations/leadership. Try being a homosexual in china…Feel free to claim that the democratic policy of distribution of wealth (economic policy) leans more toward communism by using the tax from the rich to lift up the poor, but the republican policies currently being promoted socially are extremely communistic.
Yes, this administration does what is the best for the country country while the orange man is bad. We know this already. Any tax policies, which support big government and redistribution of income, do very little to lift the poor. Instead they promote poverty and perpetuate dependency. Your assertion that conservative social policies being the moral compass of this country for almost 250 years are in fact communistic is the best example of Marxist dialectic. Thank you for your reply.
You equated DEI with Marxism. The least you could do is provide a cogent explanation as to why that’s the case. DEI is nothing more than an attempt to have our institutions and corporations reflect the broader society as it presents itself today. While DEI efforts are not immune to criticism, they are hardly an indication of Marxism. Ironically that type of rhetoric preceded the civil rights movement.
Hiring should be based upon merit and proper training, period. The DEI policy, which often results in discrimination, exclusion, and incompetence, is a progressive idea to advance a quota system under a different name so certain professions better represent “the broader society.” If the Secret Service director wants to make the force to be 30% female because it will look better on paper will there be any downside to it? What if certain prosecutors won’t prosecute crimes so jails will have the same racial and gender make up as the rest of the country? Do we need to go farther this road in all aspects of life like it was under communism? Should we require that 50% of dental hygienists be male so the quotas look better? Or perhaps we should increase diversity by hiring more male gender studies professors? If there are no candidates of certain race or gender should we hire unneeded people by creating costly “diversity divisions” at corporations, or gender and diversity departments at universities? While many including yourself cherish these practices there is also strong resentment and opposition to them. If all personnel is black, white, or female, I have no issue with that as long as it is based on merit. But I have issues with how my former boss wanted to address diversity: “There will be no white person in this company above the level of janitor.”
Coming back to Sam’s article. We saw with our own eyes chaos and incompetence of of the Trump detail last Saturday. Why were two diminutive Secret Service women not taller than 5″3″ protecting a big guy like Trump? One of whom rather than shielding the former president was preoccupied with placing a gun in a holster for about 20 seconds. Why was Trump’s SUV staying there like a sitting duck for a minute instead of departing ASAP? Why did the agents wait for shots to be fired before engaging the shooter who was reported to them 20 minutes earlier? Why the perimeter was not secured? Is that what security protocols and SS training calls for? Didn’t you read another story where a DEI recruit who couldn’t learn how to fly and failed multiple flight simulator tests mistakenly put Boeing 767 cargo plane into a steep dive crashing the machine and killing everyone on board? Good he was not given the chance to crash an airliner full of passengers. Or the story about a transgender White House official and lingerie collector accused of stealing suitcases with female attire? Of course, there are many enough incompetent and dumb people hired on “merit” too. Do we need to further dumb down the pool of those if the ONLY hiring criterion is DEI?
In my youth I witnessed first hand what damage quotas aka DEI do to society. You wanted to be a judge, engineer, manager, doctor, pilot, surgeon, army officer? No problem because just a desire instead of education and formal training was needed. In the name of diversity communists rulers wanted 60-70% representation of the worker and peasant class in all aspects of life while trained professionals were sent to work in coal mines. Those candidates were put through a two month accelerated training course and this was sufficient while people with formal education were kicked out of profession as being too bourgeois. When this policy proved to be disastrous admission quotas were established at universities. Also, in some communist countries many qualified women were were not admitted to medical profession because 70% of doctors and 97% of dentists were female. I thought this was only a communist idea to advance unfit people through the ranks using the quota system in the name of equity but we have this nonsense here as well. Thank you for your comment.
“the Trump administration has sought to curtail individual liberties”
Honest question: What individual liberties do you believe the former President’s administration curtailed? (setting aside abortion; I already understand the arguments on both sides for that one).
It would be very helpful to fully understand how you view this. Thank you!
Here’s a good primer to your question.
https://www.aclu.org/news/civil-liberties/how-trumps-proposed-radical-expansion-of-executive-power-will-impact-our-freedoms
Ah, ok. I agree, there is a great deal in that article that sounds VERY scary. As food for thought, let’s consider one of the many points it raises:
“We also expect Trump to use his authority to further target media members and the freedom of the press to suppress negative stories about him or his administration.”
1. During his presidency, beyond verbal attacks on “the fake news”, were there specific instances in which Trump used his authority to suppress negative stories about him or his administration?
2. Peruse The Twitter Files, as told by Matt Taibbi, former Rolling Stone writer:
https://twitterfiles.substack.com/p/1-thread-the-twitter-files
3. Contemplate the case of Missouri v. Biden, which examined instances of the Biden administration, including branches of the DOJ among others, exerting strong arm influence on social media companies to selectively suppress views or individuals at odds with the administration.
SCOTUS ruled in favor of the Biden Admin, but citizens may nonetheless find the circumstances extremely concerning wrt the First Amendment.
https://www.brennancenter.org/our-work/court-cases/murthy-v-missouri-formerly-missouri-v-biden
4. The story of the Hunter Biden laptop was overtly suppressed by the Biden campaign and the mainstream press in 2020. If Trump was so powerful (when he was in office in 2020), how is it that he was unable to override the efforts of the DNC, the Biden campaign, and virtually all of the major social media platforms, to suppress a piece of information that was in fact true, and that would, indeed, have favorably impacted his election chances?
Trump was president, yet he was powerless to force any news organization to do his bidding and actually report on it. He could not strong-arm the social media companies to stop them from suppressing attempts by users to share the story.
This seems at odds with the assertion that Trump would leverage his power to “target media members and the freedom of the press to suppress negative stories about him or his administration.”
All I’m saying is this: It’s important to ask questions, take nothing at face value, and seek to hear additional facts and other voices. Consider the biases of a given source, and know that the complete truth eludes all of us.
Thank you for sharing that article!
I believe that you misread the ACLU article. The title actually was “How Biden’s ACTUAL expansion of EOs….
There is no reason to quote ACLU, who long ago stopped trying to save my liberties, and focused on those of criminals, aka black lives matter. Sure they had protests, which usually turned fiery, rather than peaceful.
blm was (is) nothing more than a sucker’s trap, financed by many large corporations. Financing for blm came at the detriment of lessened corporate dividends and profits, which certainly wasn’t to my benefit, since those were once included in my retirement plans.
I agree 100%. When people say their biggest issue is the “decline of democracy,” the pollsters don’t account for many of those surveyed meaning “the rise of communism.” This must stop. Communism is the antithesis of American values and the Constitution.
Trump has mentioned at least four policies that are inflationary:
1. Deporting all illegal immigrants, as many as possible – They are working illegally, but in low-wage sectors like agriculture. Deporting them all means fewer works, which drives up wages (assuming they can attract them) which are passed along to. Along to consumers.
2. 10% tariff on all imported goods, and a 50% tax on all Chinese imports – These would be passed along to consumers
3. Acceleration of Biden’s domestic policy to produce more locally (i.e., in the manufacturing sector) – The reason why companies offshore is to control costs. If they are forced to near-shore or on-shore, these are higher costs that will be passed along to consumers.
4. Running monetary policy out of the White House – Trump is no fan of Jerome Powell, though has relented somewhat. But he wants lower interest rates, and would run monetary policy through one of his friendly appointees if he could.
Then, there are other inflationary policies that are traditionally associated with the Republican party:
4. More tax cuts – These are intended to be stimulative (not as effective as the cash stimulus of 2021), but the point is the same – to stir aggregate demand. The “good” news is that supply-side tax cuts aren’t that stimulative in terms of the economy but are likely to only have modest effects on inflation. The bad news is that it just accelerates the gap in income inequality.
5. Increased deficit spending – Combined with #4, lower taxes will result in lower revenue (i.e., lower than it would be without them), and the deficit spending will increase. There are various economic theories but one of them is that this leads to higher inflation over time since interest rates have to rise, stemming from more demand for money. So, it’s really hard to say if this means holding cash will be negative, or if higher interest rates will result (they didn’t result in the 2010’s, but I think that’s because we had really sluggish growth).
6. More consumer fraud – Crypto… I can’t say enough bad things about crypto but the industry itself says that 99% of all crypto are scams. But with the addition of weakened regulation and then also the courts declaring that they are the arbiters of truth and expertise, I can’t see how this doesn’t result in increased consumer fraud – particularly in the lower 60% who will feel pressure to investigate get-rich-quick schemes.
That’s what I can think off off the top of my head.
Excellent summary of thoughts. It makes sense that with also a potential melt-up in risk assets, that inflation will likely rebound. But these policies will take time to implement, and we’re currently going through disinflation.
Hence, inflation could definitely rebound in Trump’s second or third year presidency as everything is yin yang in finance.
This is a good summary. Some others that come to mind:
-Climate Change – the GOP platform does not address this serious issue which is pushing up prices on staples like rice, coffee, olive oil and also—drastically—home insurance and utility rates. Heat waves, droughts and floods are very damaging and expensive.
On a personal note, we have directly benefitted from the Inflation Reduction Act with discounts on solar panels and a heat pump. Rather than our usual 3 digit monthly bill for a large house, last month’s bill was in the single digits and could have been paid with a $5 bill.
-Lack of regulation – one example of how a lack of/loosening of regulations affects everyday life is in home insurance rates, https://www.nytimes.com/interactive/2024/07/08/climate/home-insurance-climate-change.html
-SCOTUS ruling – If a woman does not have body autonomy, she does not have household budget control. Kids are wonderful, but they are $$$$.
Ringo and Cody War basically spelled out the dangers and downsides to another Trump presidency. Particular they spelled out the damage a Trump presidency would do to the economy. They left out the schedule F stuff—replacing thousands of workers in the agencies of the executive branch (bureaucracy) with loyalists who can be hired and fired at a whim without cause. Also replacing Clarence Thomas with a younger justice which would cement the most conservative Supreme Court the US has ever known for a generation. Already the Chevron ruling this summer has implications for nearly every regulation. The Supreme Court is quite extreme as it is and it could get worse.
Politics aside, I find it interesting that anyone can worry about Trump brining on an inflationary cycle when we are coming off 40 year highs in inflation now. Love or hate either candidate, the current admin has created the highest inflation in most of out life times. Use another argument if it makes you sleep well, but inflation is almost exclusively the current President’s issue to own.
As to point number 1, there are better, market-based solutions, like deregulating the market and eliminating bad laws… Anywhere you see a black market for an essential good or service (like uhh, food ???), you see a failure of policy.
Abortions may have significant financial consequences. With tougher rules, governments and organizations should have sufficient safety nets for women who are forced to raise the kids without much support. It sounds cruel, but sometimes it may be easier for a woman to abort than to raise kids in dysfunctional environment, creating more painful souls. One side could furiously defend the unborn, but maybe with more understanding of why it happens the exchange of opinions could happen without emotions running high. It is easy to say deliver every single baby at all cost because life is priceless, but those who are severely affected by that action may need more resources, more support so they don’t have to rely on the last resort elimination. Life is priceless as individuals, but life always carries a price tag as a member of the society. Anyways, off topic. Great post, Sam!
There’s research that makes your point that has one of the strongest findings ever in social science.
Donahue and Levitt’s (of Freakanomics fame) research showed that the absence of these “would-be criminals” was responsible for at least half of the drop in violent and property crime rates between 1991 and 1997. They also found that crime rates dropped the most in states with the highest abortion rates, and predicted that crime would continue to fall by an additional 20% over the next two decades. There’s a 2021 study that estimated that legalized abortion reduced violent crime by 47% and property crime by 33% between 1991 and 2014, and that overall crime fell 17.5% from 1998 to 2014 due to abortion.
You make a fair point. One one hand I like to think that $1-2k to cross a state border is nothing compared to the cost of raising a child from birth to 18 (or longer), but anyone that can’t see that probably can’t plan their next meal so I would have to agree with you.
Adding my voice to the chorus complimenting you, Sam, for taking the high road across the board here. We have, alas, become a nation of people watching the same movie on two completely different screens. Sadly, too few folks are attempting to “steelman” and fully understand “the other side’s” positions. If we could get to that point, we might be able to return to a place where politics mattered much less, people could compromise and respect each other.
On the red-hot topic of abortion, I once adhered 100% to one side… because I never thought through the position of “the other side”. Once I went through the motion of understanding their arguments, I became more compassionate and less judgmental about those folks. I still dislike the extremism on both sides, but I honestly believe 80% lie squarely in the compromising middle.
From a federal perspective, the question has been tossed back to the states. I don’t think either “side” is 100% happy about that, BUT…. it does move the decision closer to local authorities. Again, it’s not perfect, but it gives people a bit more choice.
I will say that I wish people would expand their sources of information, and have the humility to recognize that it’s impossible for any individual to know the FULL truth on any topic. Expand your silo, listen to other opinions, and strive to understand.
Continuing to ask questions, as you have modeled here, Sam, is the way to go! Kudos.
Thank you! “Watching the same movie on two completely different screens” is exactly right. Many things we argue about are not completely black and white, so understanding the other side’s views is crucial.
Hopefully, as people feel more financially secure, they will have more confidence in their future and be more empathetic to others’ views.
Well done, presenting a balanced, cogent argument on what a Trump presidency means for our investments and finances. I have not seen a better thought piece on the subject on the Internet. Instead, all I’ve read are coverage pieces that teach us nothing.
The thing with a melt up, is that the downside could be devastating for those who hold on too long. They melted, could also significantly exacerbate the widening gap between the rich and the poor, which can lead to revolutions, or at least a new president from a different party.
But maybe Trump doesn’t care if Democrats win again because this will be his last term. So he’s gonna go out swinging.
I’m definitely not selling my investments now before fed rate cuts in September, and his likely win. I’m gonna let the Republicans make me rich even if I’m not a fan of any of their policies. That’s the least people against Trump should think about. If he’s gonna be president, anyway, you might as well take advantage.
Thank you Amit. Yes, those who invest and stay invested in a melt-up will pull away further from those that don’t. But at least more people will get out of poverty and benefit from a bull market than a bear market.
We can only hope that those who benefit the most give back the most through money, time, education, and mentorship.
Really good article Sam. I agree with everything you said. Personally I’ve been buying long dated muni bonds to lock in these higher rates as I agree rates will be lower going forward.
A side note, it’s very interesting that even your most liberal readers did not say anything positive about Biden. It’s the same, orange man is bad. Hard to win a election when even your most loyal supporters are not inspired by their candidate.
Thanks. I’m impressed with how much pride Biden has for not stepping down and giving someone else a chance. But we can’t have French Laundry Gavin Newsom and VP Kamala Harris doesn’t seem to be polling well since she started. So maybe Biden realizes if the odds are stacked against the Democratic Party anyway, he might as well go out swinging.
Politics is such a circus, as it requires those who crave power to run. All of us just need to remember that these politicians work for us, not the other way around.
Obviously, having Trump reelected improves the odds of the Trump tax cuts getting extended beyond 2025, which is good news for most of us. What is often forgotten is that the higher thresholds for the estate tax are also slated to expire after 2025. So that needs to get extended or made permanent too, which is another big reason why having Trump reelected is an important goal for high net worth families seeking to avoid a 40% estate tax hit on a big chunk of their net worth after they die.
True, but only about 1% of households will ever pay the estate tax. So most people really don’t care.
That’s true with the existing thresholds but after cutting the threshold in half and factoring in market returns, a lot more people are going to be concerned. Take your own situation. You probably haven’t spent two minutes thinking about this. You are late 40s with a long time to go and short term concerns like raising kids. But this is likely going to bite you in the future and you will become very concerned about it in 20 years. If threshold reduced to $6.5M that’s $13M you can leave before 40% estate tax kicks in. My guess is you are getting close to that now. Imagine where your NW will be in 20 years. Even though the threshold goes up over time, your NW will grow at a faster pace. You will have a big estate tax liability looming and searching for strategies to avoid the 40% tax hit. Take it from me. I’m you in 20 years. So vote and structure your affairs accordingly.
Oh, I’ve spent a good amount of time thinking about this. Maybe for 10 years now, as I keep updating my estate tax exemption threshold post for that many years. I’ve also written about the best age to decumulate so you don’t die with too much.
Although I am 47 now, I can be equivalent to you today because I retired in 2012 at 34. Since I was in middle school, when my friend died at 15, I’ve had this accelerated timeline in my head.
What is your estimated net worth and how do you plan to spend down your fortune?
Which is sad, because that’s the best shot most families have of ever improving their standing in life or their kids’ standing in life – but they would rather revenge vote instead of vote to make America great. Your taxes aren’t even going to your country and the interest on the debt is higher than total tax receipts. This isn’t rocket science. People are merely voting out of spite.
I see the potential for the return of high inflation with the Federal Reserve monetizing the increasing deficit more and more. Well, I don’t think it will make much difference whether Trump or Biden is elected regarding that.
Also, Bitcoin and other cryptocurrency should do well under Trump.
“ with the Federal Reserve monetizing the increasing deficit more and more”
What do you mean by this?
The budget deficit has remained high and the interest bill is now larger than the defence budget and going higher as low interest bonds mature. If there is declining interest in buying US government debt there are two options. Selling bonds at higher interest rates, which hurts economic activity, or the Fed buying them, effectively printing new money, to keep the interest rate down. My thinking is that the increase in interest rates that the Fed carried out has temporarily reduced inflation but the government spending problem is going to push it up again.