What happens when Inflation and Taxes go up?

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How can you prepare for the future if the economic environment changes? Regardless of what people say, or what the future may hold, there are some things you can do now to prepare properly. Listen to this discussion with financial expert, John Browning, to learn how you should be thinking about building your life.  

Welcome to the build your life podcast with John Browning. Build your life as a relaxed and unedited conversation your financial expert in number one Amazon best selling author, John Browning Jones, the founder of Guardian Rock Wealth and serves clients across the United States. John's the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values, which you can purchase on Amazon, or stay around to the end of today's show and I'll tell you how to get a free copy mailed right to your door. I'm Michael The lawn, your host for the next few minutes as we chat with financial expert and business owner John Browning. Well, hello, John Browning. Welcome to another exciting episode of Your podcast. How are you doing? I am fantastic that. I've recently tried to think of good,...

...clever comebacks to that and I haven't come up with any yet, but but I'm going to I'm going to work on starting. Okay, I like fantastic. That's pretty good. That's pretty good. I used to use the word unbelievable and so I said how you don't say unbelievable and they look at that good or bad. I said, you figured out, covers covers either way. It really does, and most of the time I am doing. Unbelievable, and that's kind of what I want to talk about today. Is something that's unbelievable, and that's inflation and taxes and where they're headed. I don't know. As we always say in the disclaimer right this you're not giving financial advice or anything like that. This is simply discussion. I'm of the opinion, John Browning, and I may be totally wrong, I'm of the opinion personally, that taxes an inflation going to be going up in the coming years for a lot of reasons, but regardless of what they do. But let me ask you a question around inflation and taxes. What happens if inflation in...

Texas do actually go up? What kind of unbelievable world are we going to be living in and how can we prepare for that? Yeah, you know, that's the right question to ask, because it's the if right, because what we're hearing a lot of is there's this inflation is definitely going up and taxes are definitely going up. And then we hear the other side of the story and there are some people saying, well, no, we're in a new paradigm and because of innovation, that inflation is not going to go up. I think almost everybody agrees taxes are probably going to go up. But by how much? Right? Yeah, and what do you do? So that's the right question, is is what happens and what do you do when things like that happen, because we could be in a scenario, could be where both are moving higher and especially for those in the older category. As I continue to March ever forward, which is better than the alternative, by...

...yeah, I start to realize that my inflation number is not the same as, say, a younger person's inflation number, because medical costs have gone up well over two hundred percent in the past twenty so and you know, you look at CPI and the common indicators and they're saying, well, the average over many, many years three percent. We've actually been much lower than that over the path to say decade. And what they are, I think, failing to realize, is that not everybody's inflation number is the same. That said, that said, the answer your question at the onset of even talking about raising the gains, capital gains taxes for wealthy investors we start to make reallocation decisions, and I think that maybe what we already saw very early in...

...in May and two thousand and twenty one, and we saw a fairly large direction in some of the stocks, the growth stocks that had taken, you know, really appreciated to a great degree. So the idea, since taxes, when they go up especially, are typically not redtroactive, let's take our gains this year might not be a bad strategy, especially if there's a really good replacement that you're willing to reinvest in. But that's one of the things that we start to see as people tactically trading and tactically adjusting their portfolios, and it can come the cause, you know, some stuck to go down all this to go up. You know, typically you would replace that with maybe a value stock which was, you know, treading a little bit lower than you thought that it should be, and there are a lot of those around. Does this mean that girls stocks are ad place to invest? It?...

I you know, I don't think that's the case. I think you think it's pretty rare where you would want to invest your entire port folio and a growth in gross stocks, because if we can begin to get really volatile, as we have seen in the as we head into the spring and Summer Two thousand and twenty one, and as we certainly saw in two thousand and twenty in March. But there could be buying opportunities, as this happens as well, if you're maybe under allocated to those gross stocks. So what you do is very much dependent upon your time horizon and what you can handle in terms of volatility and and things like that. There's a lot of a lot of factors. Right. Too many times we want a talking head, snippet answer, a sound bite answer, and that's just not how it really plays out. In reality. Is that there's so many things you've got to take...

...into consideration and, as we started this whole discussion, it's an if you know, nobody knows what's going to happen, but you need to be thinking about it and be ready to make some adjustments should that they come, depending on your situation. Has Why people should work with somebody like you who you think about these things all day long. Right, right, it's you know, we have lots of discussions about this type of thing and and of late, if you couldn't tell by how he started, the conversation. We've been having a lot of conversations about inflation and the you know, inflation and taxes, or the to silent thieves, so to speak, that that steal from your portfolio over time, especially if you're not watching them, because they are kind of a silent nobody thinks about him or or. Every once in a while, like right now, everybody's, you know, talking about inflation and taxes, but usually you don't talk too much about that, and especially inflation,...

...because it's been lower over the past over years. But if your inflation number, if you're a little bit older, is higher, that's an even bigger curdle to to overcome. And with your say, a bank account, checking account. We are getting a lot of calls right now realizing they're not making their money is not working for them. It may feel sick funny, it may feel very safe, you know, every time they look at it it's the same amount, roughly, but they're unlace the problem. That's right. It's the name of amount and the value of that money and what it can buy degrades over time. It is is really interesting and this is a really simplistic perspective, John. Okay, so I tell me if I'm wrong here. But yeah, you keep your running in the bank and I like to have a little bit of money in the bank just for access, right, but I don't want my life savings in there. Right. And Yeah, it's the same amount every every month. Right. But I go to the I go past, I drop past the gas station and I realize the price of gas goes up and down. You know, we're coming up to...

July. Fourth is coming up pretty soon. Gas Pressure is going to go up. Well, the dollars that I have in the bank today, they're going to buy gas in my area for like two dollars and ss right in July four the same dollar is going to buy gas for three dollars and twenty five in it. That's kind of a just a really simple inflation for my simple brain to go. Gas is going up, but my money's not going up, so I'm losing money by having it stuck there. That's why I don't want too much there. I want some, but not much. Right. Is that? Is that a he's an analogy. That's that's a graded analogy. And the other time that it happens, typically if you're in the workforce, is when that open enrollment comes out and it's like every year, right, we all do the same thing every year. We look at it. They they just raised my help your you know, expercent. But then he kind of forget about it because you don't you get do about it. Yeah, that health you're insurance and and it's not too often that we really see healthcare and because the insurance company pays a big chunk of it, because...

...we've already paid the insurance company a lot of money to do that, and so it becomes something that we don't realize how much that is actually gone on up in the past x number of years. I mean, take that is it's a huge portion of what you know your expenses are, but you just don't see it. It's right. That's that's very interesting. It's a silent stealers. You you had some cool phrase, a silent thief or something. That's the silent beef. Yes, I'm like sh inflation and taxes, inflation most silent and sneaky. I think I like it and we'll do this on another and another episode. You gave me a thought there when especially around the taxes aspect, and and here's the situation. Then we'll bump into another episode so my wife's visiting her parents right now who are in there l S. Yeah, and they've beccumulated some resources, right, and so she's up there...

...helping them clean out the house, but also do do making sure their wills are set upright, this stay, the funeral, playing all that stuff. So the question is, he's accumulated a lot of money in stocks and portfolios and all of that stuff. The question that I'm asking her is, like, great, when he dies and when grandma dies, who's going to get the lion share of that money? Because of taxes and taxing an estate, if he's not properly set up, I think the government's going to get a lion share of that. And then it comes to the show, I want to do an entire episode with you around that aspect of how to, how can't, what's how do you probably prepare for that with an estate plan and all that, so that the government doesn't get an unfair share? How about that? Because I think a lot of people don't plan for it and they're shocked when they realize that, oh my, we could have say we could have passed a lot more money to our errors had we done some pre planning. Right. Am I my clue. That's that's exactly right, and it's a great topic and we we've talked a little bit about it in a couple...

...episodes in a long time. Since we get that, okay, I recently sent out an email on that as well, because it's just it's a such an important topic that, again, you don't like to talk about it, so you just don't. That's right. So let's let's Tappen, let's put that onto a topic here pretty soon and talk about that, because it's it's I think it's something that a lot of people need to talk about and we can. We can make it more fun than most people. Right. That's right, exactly. Yeah, all right, well, did that. Thank you, John. That's a taxes and inflation that to silent it stealers, the two silent thiefs that you really you need to be concerned about, and John will help you arrest those thieves and put them in their proper place when you reach out to him. At John Browning, he said Guardian rockwealthcom. Just reach out to him, have a conversation and see how he can put those two silent thieves in jail so they don't hurt you anymore. How about that? Sounds Great. All right, John, thanks, but we'll talk...

...to you soon on then your next episode. All right, sounds good. We'll see you there. Money really is a big part of our lives, and John Browning can help you and your family learn how to keep money in the proper perspective. It's important, but it's only a tool that could help you build the life that you want. If you like, John Emilie a free copy of his book build a life, not a portfolio. Go to John's website, Guardian Rock wealthcom, and click the contact US link and send your request. John Will Mell a copy of his book right to your door absolutely free. Thanks for listening to building your life podcast with John Browning. Be Sure to subscribe to this podcast so each new episode will be sent to you automatically when it's released. Have a terrific day.

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