What happens when Inflation and Taxes go up?

ABOUT THIS EPISODE

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 podcastwith John Browning. Build your life as a relaxed and unedited conversation your financialexpert in number one Amazon best selling author, John Browning Jones, the founder ofGuardian Rock Wealth and serves clients across the United States. John's the authorof the book build a life, not a portfolio, a guide to yourfinancial 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 toget 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 businessowner John Browning. Well, hello, John Browning. Welcome to another excitingepisode 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'tcome up with any yet, but but I'm going to I'm going to workon 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 youdon'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 ofthe time I am doing. Unbelievable, and that's kind of what I wantto talk about today. Is something that's unbelievable, and that's inflation andtaxes and where they're headed. I don't know. As we always say inthe disclaimer right this you're not giving financial advice or anything like that. Thisis simply discussion. I'm of the opinion, John Browning, and I may betotally wrong, I'm of the opinion personally, that taxes an inflation goingto be going up in the coming years for a lot of reasons, butregardless of what they do. But let me ask you a question around inflationand taxes. What happens if inflation in...

Texas do actually go up? Whatkind of unbelievable world are we going to be living in and how can weprepare 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 isthere's this inflation is definitely going up and taxes are definitely going up. Andthen 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 areprobably going to go up. But by how much? Right? Yeah, and what do you do? So that's the right question, is iswhat happens and what do you do when things like that happen, because wecould be in a scenario, could be where both are moving higher and especiallyfor those in the older category. As I continue to March ever forward,which is better than the alternative, by...

...yeah, I start to realize thatmy 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 thepast twenty so and you know, you look at CPI and the common indicatorsand 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 noteverybody's inflation number is the same. That said, that said, the answeryour question at the onset of even talking about raising the gains, capital gainstaxes for wealthy investors we start to make reallocation decisions, and I think thatmaybe what we already saw very early in...

...in May and two thousand and twentyone, and we saw a fairly large direction in some of the stocks,the growth stocks that had taken, you know, really appreciated to a greatdegree. So the idea, since taxes, when they go up especially, aretypically not redtroactive, let's take our gains this year might not be abad strategy, especially if there's a really good replacement that you're willing to reinvestin. But that's one of the things that we start to see as peopletactically trading and tactically adjusting their portfolios, and it can come the cause,you know, some stuck to go down all this to go up. Youknow, 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 girlsstocks are ad place to invest? It?...

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

...into consideration and, as we startedthis whole discussion, it's an if you know, nobody knows what's going tohappen, but you need to be thinking about it and be ready to makesome adjustments should that they come, depending on your situation. Has Why peopleshould 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 thistype of thing and and of late, if you couldn't tell by how hestarted, the conversation. We've been having a lot of conversations about inflationand the you know, inflation and taxes, or the to silent thieves, soto speak, that that steal from your portfolio over time, especially ifyou're not watching them, because they are kind of a silent nobody thinks abouthim or or. Every once in a while, like right now, everybody's, you know, talking about inflation and taxes, but usually you don't talktoo much about that, and especially inflation,...

...because it's been lower over the pastover years. But if your inflation number, if you're a little bitolder, is higher, that's an even bigger curdle to to overcome. Andwith your say, a bank account, checking account. We are getting alot of calls right now realizing they're not making their money is not working forthem. It may feel sick funny, it may feel very safe, youknow, 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 thevalue of that money and what it can buy degrades over time. Itis is really interesting and this is a really simplistic perspective, John. Okay, so I tell me if I'm wrong here. But yeah, you keepyour running in the bank and I like to have a little bit of moneyin the bank just for access, right, but I don't want my life savingsin there. Right. And Yeah, it's the same amount every every month. Right. But I go to the I go past, I droppast 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 prettysoon. Gas Pressure is going to go up. Well, the dollars thatI have in the bank today, they're going to buy gas in my areafor like two dollars and ss right in July four the same dollar is goingto buy gas for three dollars and twenty five in it. That's kind ofa just a really simple inflation for my simple brain to go. Gas isgoing up, but my money's not going up, so I'm losing money byhaving it stuck there. That's why I don't want too much there. Iwant some, but not much. Right. Is that? Is that a he'san analogy. That's that's a graded analogy. And the other time thatit happens, typically if you're in the workforce, is when that open enrollmentcomes out and it's like every year, right, we all do the samething every year. We look at it. They they just raised my help youryou know, expercent. But then he kind of forget about it becauseyou don't you get do about it. Yeah, that health you're insurance andand it's not too often that we really see healthcare and because the insurance companypays a big chunk of it, because...

...we've already paid the insurance company alot of money to do that, and so it becomes something that we don'trealize how much that is actually gone on up in the past x number ofyears. I mean, take that is it's a huge portion of what youknow 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 coolphrase, a silent thief or something. That's the silent beef. Yes,I'm like sh inflation and taxes, inflation most silent and sneaky. I thinkI like it and we'll do this on another and another episode. You gaveme a thought there when especially around the taxes aspect, and and here's thesituation. Then we'll bump into another episode so my wife's visiting her parents rightnow 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 accumulateda lot of money in stocks and portfolios and all of that stuff. Thequestion that I'm asking her is, like, great, when he dies and whengrandma 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 thenit comes to the show, I want to do an entire episode with youaround that aspect of how to, how can't, what's how do you probablyprepare for that with an estate plan and all that, so that the governmentdoesn't get an unfair share? How about that? Because I think a lotof people don't plan for it and they're shocked when they realize that, ohmy, we could have say we could have passed a lot more money toour 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 talkeda little bit about it in a couple...

...episodes in a long time. Sincewe get that, okay, I recently sent out an email on that aswell, 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 soonand talk about that, because it's it's I think it's something that a lotof people need to talk about and we can. We can make it morefun than most people. Right. That's right, exactly. Yeah, allright, well, did that. Thank you, John. That's a taxesand inflation that to silent it stealers, the two silent thiefs that you reallyyou need to be concerned about, and John will help you arrest those thievesand put them in their proper place when you reach out to him. AtJohn Browning, he said Guardian rockwealthcom. Just reach out to him, havea conversation and see how he can put those two silent thieves in jail sothey don't hurt you anymore. How about that? Sounds Great. All right, John, thanks, but we'll talk...

...to you soon on then your nextepisode. All right, sounds good. We'll see you there. Money reallyis a big part of our lives, and John Browning can help you andyour 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 alife, not a portfolio. Go to John's website, Guardian Rock wealthcom,and click the contact US link and send your request. John Will Mell acopy of his book right to your door absolutely free. Thanks for listening tobuilding your life podcast with John Browning. Be Sure to subscribe to this podcastso each new episode will be sent to you automatically when it's released. Havea terrific day.

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