Nick Hodge,
Publisher
Nov. 12, 2024
The people have spoken.
Reality was much different than the media portrayed it.
In the end, what was billed as a toss up turned out to be a beat down.
Those now being priced out of the American Dream — including minorities — sent Donald Trump back to the White House to serve as the country’s 47th president. He won every swing state and the popular vote.
Bloomberg had already nailed it in an October 17 article before ballots were bubbled-in:
As US Election Day approaches, inflation is largely tamed and wage gains have lifted incomes. Yet the economy remains the most pressing issue in the presidential race for one big reason: Increasingly, for many Americans, the long-standing building blocks of middle-class life feel frustratingly unattainable.
The standard 20% down payment on a median-priced home now costs 83% of a year’s income for the typical family ready to buy a home, up from 65% on the eve of the 2016 election, according to Bloomberg calculations. Buying a new car takes almost two extra weeks of work for the median household compared to eight years ago. Child care then cost the same family about a quarter of its weekly income. Now it swallows up more than a third. And while the cost of attending college has gone down as a share of income in recent years, a median household can expect to pay 75% of its annual income for a private college and more than third for a public in-state university.
That represents a repricing of the American Dream, in which some of a family’s biggest expenditures — the ones that are foundations of long-term economic security and also the coveted rewards of hard work and striving — are often overwhelming.
Trump, of course, isn’t likely to help the root cause of the problems facing those who elected him.
The angst being felt by American families is driven not by the Left or Right, but by the one-directional nature of the monetary printing press.
Not a single presidential administration has curtailed the money supply in the last 65 years.
And it affects not only those striving for the American Dream, but those who’ve already sacrificed so they can sleep soundly in their California kings.
That’s us.
The tuition at my kids’ private elementary school went up 17% this year. The payment on the mortgage for our dream house and property has ballooned 18% in the past three years because of inflating costs for property taxes and insurance, despite a locked-in mortgage rate of 3.75%
Champagne problems, perhaps.
But even as I’ve been paying perennially higher property taxes, I am asked to ‘pay my fair share’ by Democratic candidates and their supporters. No amount is ever assigned to the fairness. It’s always just “more.”
It’s not enough to turn me partisan. The presidential line on my ballot was blank.
But the feeling is not esoteric. This year was the first since 2004 that a Republican won the popular vote — and by a wide margin — as the vote of the Strivers and the Have Strived coalesced.
I wade wearily into the political pond to cast this financial line in the spirit of mooring what matters to us and ours: You are the one who will be tapped to cover the wanton spending of both political parties.
The US public debt is already at 100% of GDP. And data from the Committee for a Responsible Federal Budget show that it was going to head higher no matter who won the election.
Let this be your cue to get your tax preparation and estate planning in order.
Because even as “Trump tax cuts” makes its way back into the vernacular, the scary truth is that a national wealth tax is already being implemented across the country.
I just told you about higher private school tuition and property taxes.
On my ballot in Washington state this year were several tax-related measures. One was to repeal a 7% capital gains tax passed in 2021 on the sale or exchange of long-term capital assets such as stocks, bonds, and business interests above $250,000.
Even those who supported and implemented the tax admit it is an end-run around the state constitution, which bans income taxes.
Nonetheless, nearly two-thirds of voters elected to keep the tax in place. I would bet that some of them are in the group noted above that is trying to attain the American Dream.
In one generic news article about the tax, I found a quote from an every-woman saying that the tax should remain in place because it only applies to Wall Street tycoons.
Melinda Young-Flynn, who hyphenates her name and has pronouns in her bio at the Washington State Budget and Policy Center, where she serves as Communications Director, said that repeal equated to “tax breaks for the ultra wealthy.”
The problem with that mentality is that it’s wrong.
She is referring to people like former Washington state taxpayer and Amazon founder Jeff Bezos. He is ultra wealthy. And he still got his tax break. Because he moved to Florida last year to avoid the tax and promptly sold 12 million Amazon shares worth $2 billion.
Jeff Bezos is worth $225 billion. He can change his address to avoid tax with a phone call to his lawyer or real estate agent.
Nick Hodge, with his couple of million and three young kids rooted in elementary school, cannot.
It is not a tax on the ultra wealthy. It is a tax on me. It is a tax on you.
And you can try to outrun it, like I did by moving to Washington from Maryland seven years ago specifically to avoid such things.
But the problem with that is the two charts above: both parties keep printing the money and running up the debt.
The government has a spending problem. Not a revenue problem.
And until politicians realize that, we’ll keep on trying to make more than they take.
One of the ways we keep ourselves in the tax crosshairs is with private placements. That is where we buy shares directly from early-stage companies. These deals often come with warrants that give us leveraged upside without additional risk. Past deals include:
- Financing Patriot Battery Metals at 16-cents ahead of its run to over $17 — a gain of over 10,525%
- Financing Lithium X at 15-cents and watching it get bought out at $2.61 for 1,640% gains a year later
- Financing Bravo Mining while it was still private at 64-cents ahead of its IPO and run to over $5.20 — a gain of 718%
- Plus dozens of other big wins that are often leveraged with warrants that allow us to buy more stock at fixed prices if the price goes up with no risk if it goes down.
The average open position is up more than 100%.
We are financing a new opportunity this week that will soon drill the largest gravity anomaly in the world.
The potential upside is massive from the low financing price.
If this type of investing sounds interesting to you, I invite you to try it out alongside us.
You can learn more on the page we set up for you here.
Or you can always call Jimmy Mengel, our Director of Customer Experience, to learn more. He can be reached at 844-334-4700.
I’ve acquiesced to the notion that my tax rate, like the money supply, is only going in one direction no matter which party is in charge.
Private placements are how I’m able to keep my independence.
Call it like you see it,
Nick Hodge
Publisher, Daily Profit Cycle