Catch the full episode: https://www.wealthformula.com/podcast/246-financial-incites-from-quarantine/
Okay, welcome back everybody this is Buck Joffrey and today I don’t have a guest. I’m gonna give you some random thoughts and hopefully you enjoy it. I think that you know like there’s a lot going on and the first one you know I just talked about my own Covid experience here and there’s nothing like actually getting the freaking disease to really kind of open your eyes so I just want to give you some of my thoughts on that. Right so my thoughts on this are that I am still absolutely amazed at how as a fair so many people seem to be about this disease out there and still refuse to wear a mask it’s just such a simple thing right you know does mass does mass make it so that you’re guaranteed not to get the disease. No it doesn’t but I think it’s like 90 percent and in it and the bigger thing is you’re potentially if you’ve got the disease and you don’t know it you’re saving other people too you know I think there’s just some strange politicization of this disease which I really think is downright crazy and I think those of you who are physicians out there agree with me on this you know there this there’s still people who are kind of acting like it’s you know it’s a political statement and I’m not saying what we should do about it in terms of businesses and lockdowns and all that that’s a very reasonable conversation to have but at the individual personal responsibility level I think people need to just just accept this is real and the sooner we are more careful with one another and wearing masks and that kind of thing the sooner it’s just gonna go away and we don’t have to worry about it right and I’ll tell you like no I didn’t really think I was gonna get it right and I don’t think most people do and but those people who are not too worried about it part of why they’re not worried about it is that it is true that 95% of the people who get this disease are you know they get pretty mild symptoms they may be maybe even be asymptomatic but that leaves about five percent of serious Covid disease and that’s still a lot to be somewhat careless about right I mean that’s one in 20. I mean if somebody told you that you know there’s a one in 20 chance that you know if you did something you would break your leg you might you probably wouldn’t do it right I mean it seems reasonable so don’t do it. One in 20 is still kind of a lot then people are still dying of this stuff yeah most of them are older have most of them have health problems that’s all true but not all of them and that’s what freaks me out that’s what freaked me out especially on monday look I mean even last I think it was last week or the week before it was very sad to see this it’s like a 40 I think it was 41 for 42 year old congressman he’s got little kids otherwise healthy dies of covid very sad and you could say hey you know that does not happen very often that’s right but do you want to be the one that happens to? Right let’s go back to that the statistics things I mean statistics are are only statistics until it’s about you then it’s no longer statistics anymore because I can tell you that when I got sick my rational statistical brain was not thinking about 95 chance of being just fine and not having any issues it was thinking about you know one of the unlucky 40-somethings or you know that we hear about all the time and I was genuinely freaked out about this thing how freaked out well this is true and you can call him to ask him about this but on my way to the emergency room you know once I know it was Covid positive I made one call you know who I made that call to? I made the call to Rod Zabriskie because you know and I’m talking about Rod Zabriskie of Wealth Formula Banking well you know him and Christian had all my banking and other life insurance stuff and the first thing I wanted to know was okay tell me again how much if this thing goes south I’m gonna end up leaving to my kids. Now we always talk about banking and stuff for the investment part and that’s important but you know that’s I gotta tell you, you know the idea of something freakish like this happening and most people don’t really think about it but things can happen man and so I had to call and find out okay. I had all this you know extra term I felt like I could breathe a little bit, no pun intended, breathe a little bit better at that point knowing that you know the worst case scenario at least financially everybody was gonna be okay but that was where my mind was right so I guess one of the morals of the story there is don’t go cheap on life insurance even if you’re not convinced about you know the banking stuff you know make sure you get a lot of term or at least get convertible term think and then you make your mind up later and you lock in those rates now and just get enough to make sure your family will be okay think about it and especially in times like this you’ll really open your eyes. Bottom line is you know Covid 19 in your 40s and 50s you know in reality to me it’s kind of like playing russian roulette right yeah you know okay maybe that’s a little dramatic and maybe it’s a you know big revolver right it’s a big you know it’s not one in eight or you know whatever your chances are it’s you know it’s smaller than that but it’s still the same kind of concept right you can get it and you’re probably nothing’s gonna happen probably nothing bad is gonna happen but all of the sudden something could happen right something very very bad could happen and by now probably most people know as somebody who’s been either severely affected by this disease or you know died so just take it seriously that’s all I’ll say. So do your best not to get it and you know there just seems to be a lot of reluctance about the vaccine as well you know I’ll tell you. So I kind of I got vaccinated the old-fashioned way myself here and I don’t recommend it and I do think that I would highly recommend getting a vaccination because you know the benefits far outweigh the risk in my opinion but that listen you do what you want to do but I just want to make sure I tell you what I believe to be true especially after getting this thing. All right next topic I want to cover is kind of what’s going on in politics here and if you didn’t notice it’s been kind of a rough week here and remember that have fun storming the castle from the princess bride that’s what that reminds me of when the people who went up there to the capitol but listen as you know I consider myself you know Reagan Republican unfortunately there are not a lot of them out there anymore you know Mitt Romney, Paul Ryan used to be one of those and he couldn’t handle the current political parties and I think he just decided he’ll just wait until it comes back. I’m not hidden that I’m not a fan of the President Trump primarily you know it for me honestly I’ll tell you what it is I’m a conservative and first of all he’s not a conservative because if you look at what conservative ideology is it’s about small government less spending etc we got none of that but on top of that despite whatever the policy difference is my big beef is really all about character and for this last week in particular I hope that was you know what happened and you know this essentially supporting what happened at the capitol was really tough to watch and I think it was a tough time in American history but again I don’t want to get too political here. I’m hopeful that we have a good intellectual conservative party that erupts out of this and I know a number of you also do as well and let’s just hope for the best but at the meantime this is a show about personal finance and now we have a democrat as a president we have a democratic house of representatives and a democratic senate okay so that’s the opposite of when Trump came in by the way so that is that’s rough anyway that has many of us reaching for our pockets in fear sure I get it believe me I’m with you I am you know like I said I’m a conservative guy too I’m a little worried about what’s going on but let’s kind of back up here and let’s discuss what that all means let’s start out broadly do I think that Joe Biden being president means we don’t have a strong recovery post covid no actually I don’t there’s a few things once I think he’s making it a he’s gonna I think he’s taking it very seriously I think he may is very clear that that is his number one thing to get this roll out of the vaccination try to get some control because the truth of the matter is that the single most important thing in getting to a postcovid economy is getting postcovid right so I don’t think that I don’t think that that is going to slow down post covered recovery in fact I think it might get us to post covid recovery a little bit better now that we can you know we can really focus and it’s clearly that is the intent of the administration now on the broader focus. I know people think about the markets and well now we’ve got democrats and you know republicans are out and you know how’s that going to affect the economy you know I used to think the same thing but if you look at the statistics over time the truth is that the economy has not fundamentally been influenced by which party has been in the white house you know since the two-party republican democrat system began and you know if anything there may be one percentage point on the favor of democrats. Now I’m giving them credit no I’m not giving anybody credit for anything it’s just the facts right the economy is great sometimes for presidents to take you know to take credit for I mean look at you you know Trump and took credit for what was happening and I think his tax cuts did help with that but then you know bill clinton back in the 90s also got credit for this incredible economy as well so I don’t know how much presidents make a big difference now if we didn’t have Joe Biden but rather Bernie Sanders that might be very different but I think that Joe Biden is actually more conservative than even Obama was in other words I don’t think his behavior will be fundamentally different enough in the big picture he’s like an institution guy for it to truly affect the natural history of what’s to come I think that you know like I said if he’s focused and makes it a priority to get the rollout of the vaccination that’s the best thing you can do for the economy the the democrats there are definitely 100 percent going to spend a lot and you austrians are going to be upset at me but I’m all for some good old-fashioned spending right now infrastructure spending especially we’ve already spent a ton like why would you put on the brakes right now and say no not an extra trillion now I mean we have too many trillion no I would like to point out too that neither party is fiscally conservative at this point you know cutting taxes but ignoring spending is not fiscally conservative. As for the new deal concept I know that scares a lot of people and but you know let’s think about it another way and again I’m just trying to put these in perspective here. You can agree disagree whatever but I thought I’d give you my thoughts. It will almost you know a new deal a green new deal concept will almost certainly involve some tremendous tax saving opportunities as well because remember you know Tom Wheelwright says and I learned this from Tom that the way the government gets to us to do what it wants us to do is through tax incentives you know Tom’s gonna be on the show probably either maybe not next week or the week after that because we’re going to hit you know these topics on taxes you know right away to talk about how things could potentially change but I know that Tom has said that before and I’ve heard him talk since then that his feeling is that yeah we’re going to lose some tax benefits but if there’s going to be this giant program this great new deal concept or whatever that has to come along with some tremendous tax beneficial investing opportunities as well. So we have to kind of you know go with the flow and start shifting and start thinking about what it is that we can do to try to you know be like water you know in the Art Of War Sun Tsu you know you you you have to you have to be able to kind of move like water right you have to be able to move in a way that the flow is taking you. So anyway so a lot of people will say well you know this is terrible and of course it’s going to result in a lot of inflation. I also would just tell you that where I’m not saying again that I think spending is a good thing blah blah blah in general I think we do need it now I think a lot of people I think a lot of people would agree with that on both sides and you know the truth of the matter is in terms of inflation one thing to remember is that as real estate investors who use debt it actually helps us a little bit. Remember inflation erodes debt. I’ll say that again, inflation erodes debt. Now why does it erode debt? Well think about this day you borrow money for what it’s worth today right but if you pay it back 10 years from now and it’s worth less when you pay it back you actually paid less than you borrowed right and you know in monetary terms so the idea is that that’s why Robert Kiyosaki always says savers are losers because if you just hold on your dollars they will just disintegrate through in inflation but if you think about the opposite of that the ying of the yang of saving is debt. And so that debt actually erodes over time with inflation. So you know inflation as long as it doesn’t become stagflation isn’t necessarily our worst enemy anyway so what are we going to lose anyway well I think that the chances of repealing the Trump tax cuts are almost a hundred percent but the question in my mind is really the timing are they really going to repeal a tax cut while we’re in a coveted economy you know I sure hope not but I think you should start assuming that it will be repealed and could be very soon after inauguration. So for many of you the most immediate impact of that will be the inability to take 100 bonus depreciation you know that’s me too right I mean I have pretty much made that the core element of my investing strategy over the past few years because you know I like deducting the money. I invest and that’s what I’ve been able to do you know if I invest 100 grand something and I’m able to take 85 off, I’ll take that any day well you know the 100 bonus depreciation almost guaranteed will go away sometime this year at this point. In my opinion others might disagree with that but if all they have to do is repeal the Trump tax law and then and if that happens then you know then we’re back to not having that so then a lot of people ask a good question including myself which is so when would it end? Does that mean that bonus depreciation is not something that we have anymore as of this moment so I asked my CPA that question. Now he told me, and again this is not tax advice so please check with your own CPA, you know who mine is, so I’m giving you an opinion he told me that the way it typically works is that any legislation you know of this kind or really any kind becomes retroactive up to the up to the day it’s first introduced to congress so not necessarily to the beginning of the year per se but when it’s first introduced into congress so say somebody on february 15th they they put forth new legislation to repeal the law the Trump tax cuts and then there’s you know back and forth and it’s repealed a month later then it is effective you know back to the initial time that it was submitted which would have been February 15th not on the day it passes right now there are no guarantees here that that’s true and in other words could they say that it’s you know all the way back to all the way back to the beginning of the year well most people think that that’s unconstitutional and frankly there’s really no reason to do that so you know if you need to get some bonus depreciation you may have very little time to get it done. And now for real estate you would theoretically need to find a deal not only find the deal and get under contract but you got to close on that place before any legislation happens and that might be a tight window but just you know be aware of that another option of course or other things out there that you can kind of get into service quicker including you know we still have the WF Velocity ATM fund for example you can see that at wfvelocity.com and that would get you in almost certainly before any legislation because you’d be in before probably before inauguration anyway I have no idea if that’s what the dems want to do right I don’t know if it’s their first move I hope not I don’t think it’s smart in a recovering market to increase taxes but we will see what happens. Now one last thing I will just mention I think that is actually useful to think about and be somewhat positive about you know if nothing else Joe Biden is you know he’s sort of a grandpa type he’s a nice guy and he’s stable and predictable right and he’s sort of like your typical politician US president type guy and the markets love stability and so there is that additional value. And I know there are you know there’s lots of people who are bummed out about the Trump loss but you know Trump was a little volatile and then sometimes that made it very difficult. And my friends on wall street you know always complained about that. So at any rate that is my take on politics if you’re still listening, I have never done a show like this by the way where I just kind of go in topic and topic out so let me know what you think. I’m going to take a break when we come back I’m going to finish off with a topic that I think a lot of you are thinking about right now and that is cryptocurrency.