Keeping Tabs on Taxes and Inflation
If your wealth resides mostly in real estate, you probably already know that your hard earned equity can vanish during those times that real estate markets plummet.
On a similar note, if you’re still saving part or most of your serious money for the future in either a 401(k) or in an IRA, your retirement may be on shaky ground.
The November elections have come and gone and there’s simply no way that the government is going to be able to turn its current financial mess around overnight. We have to be able to deal with reality.
For instance, if you believe that taxes aren’t likely to go higher, you may want to reconsider. Politicians and bureaucrats still must find a way to somehow cover our government’s huge looming debt and accompanying deficit.
Even if you believe you’ll be unaffected because you’re going to be in a lower tax bracket, you may be in for a nasty surprise. The writing on the wall is clear to see; taxes will need to rise dramatically as politicians seek to continue feeding their spending habits.
But taxes are only one consideration. Inflation is also eroding the value of every dollar, cutting it in half roughly every seven years. This means that the money you have saved will not have the same purchasing power in 10 years as it does today.
Folks who believe that the economic volatility we experienced between 2000-2012 was an aberration and that we aren’t likely to experience another market correction or crash, are engaged in wishful thinking.
If you have concerns about rising taxes, inflation, and continuing market volatility, now is a good time to make it a serious priority to learn how to protect yourself from these risks.
With the right knowledge and using the proper strategies, you can not only survive but thrive during uncertain times.
The important thing is to take positive action while there is still time to act.
Now That the Voters Have Spoken
In many ways, the latest election appears to be, in part, an expression of dissatisfaction on the part of the voters. Many voters are not happy with
Congress and their elected leaders for their perceived lack of progress.
Many of the bills which originated in the House and have been sitting stalled in the Senate are likely to be brought back for another try at passage. Among them will be proposals to cut spending and possibly an attempt to alter or repeal the healthcare legislation passed a few years ago.
Whether these legislative efforts will be productive or not remains to be seen.
Partisan considerations aside, the latest election results seem to demonstrate a growing lack of approval for irresponsible government spending. It’s possible that an increasing number of voters have finally started to see through the financial smoke and mirrors that make it look like the economy is growing.
Informed voters appear to be seeing the writing on the wall. This may be cause for cautious optimism that the country may be moving in a more positive direction.
However, there is a reality that remains that must be faced. The national debt is still stands at unprecedented levels.
For more than two years now, every single penny of the $2.5 trillion of revenue collected annually by the IRS is spent before they it’s even collected. This means that the additional $1 trillion it takes to run the government’s yearly budget is 100 percent newly borrowed money that will have to be paid back with interest.
By the end of Obama’s second term, our national debt will be over $20 trillion.
Divided up evenly between America’s 100 million taxpayers, that means a debt of $200,000 could be assigned to every single taxpayer in the nation.
Meanwhile, the continued printing of billions of dollars allow inflation to steadily erode the purchasing power of every one of those dollars.
This is no time to give in to doomsday thinking, but it is an excellent reason to begin facing reality for what it is and to positioning ourselves to not only ride out but also to thrive during any future economic uncertainty.
Call 888-518-3113 today and speak to an Asset Strategist on how to protect your future from taxes and inflation.
Author: Doug Andrew