So Where Do We Go From Here?
o, what happens now that the election is over?
(Or almost over – there is the legal dispute for the final verification of votes that may go for weeks.)
But still the country has to move forward, and the markets themselves are going to take a stance based on the election results. In the near term I don’t think we’ll see any more big jolts one way or the other. But the Republican-majority Senate is likely to push back against the Biden administration, leading to gridlock.
I think the overall trend for the next four years is going to be toward gridlock and stagflation like we experienced in the seventies, which isn’t good for the economy, the country, or the markets.
They’ll keep spending money hand over fist to keep the economy propped up, but they can’t do that forever. At some point we’ll have to deal with the after effects of the coronavirus, which isn’t even over yet, as we’re seeing an uptick in virus cases and shutdowns again in Europe. If the Biden administration does the same, it will certainly affect the economy.
We may not see it in the next two years, but certainly by the middle of this decade, we could see considerable inflation – maybe even hyperinflation of 5-8%. You need to have assets that will ride that inflation curve.
One of those is certainly your business. Businesses typically do keep up with inflation to some extent. On the more passive side are tangible assets like Real Estate (which we favor in Freedom Founders).
With the dollar devaluation, your money will only buy so much in future years. And once you’re no longer producing active income, there’s a very real possibility of running low on funds down the road. This is the time for keeping your lifestyle and business overhead as low and tight as possible. It’s not a time for massive expansion without a specific model or opportunity in mind. Cash flow margins are going to be important in the coming years.
My point is, be careful. There’s going to be a lot of volatility in the decade ahead – which would have been the case with either administration. Deficit spending is what made the bull run market we had from 2012 to 2020 happen. And it’s got to slow down; the Federal Reserve can’t keep coming in to save the day.
More volatility means you can’t stay with the same models that got you to where you are today. You’ve got to look at other ways to be the architect of your future. This is not a time to rely on the old, traditional retirement models. It’s time to get off the fence and get your house in order.
In every economic cycle, there are opportunities amid the chaos and disruption. But you’ve got to know which are right for you, and how to position yourself to take advantage of them.
I’ll have some future blogs with more on the economy and where we are with Real Estate and business, but this is my big picture forecast.
Just be aware that you can only control your own economy –
P.S. Whenever you’re ready, here are some other ways I can help fast track you to your Freedom goal (you’re closer than you think) :
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