Wealth Confiscation is Coming
‘ve been saying for quite some time that this country has been moving towards socialism.
Our move towards socialism hasn’t just been going on for the last five or ten years, but for decades. It's just now at the turning point.
Last year’s COVID pandemic turned the heat up, expediting the process by ten years or so. But the trend has always been there.
Now, what does this really mean?
We've seen the tax-and-spend mantra of the government. It doesn't matter whether you’re Republican or Democrat – you can be bipartisan about this because both parties spend a lot. Whether you like President Trump or not, he spent a lot of money. The current Biden administration is spending even more, but this tax-and-spend mantra goes back decades.
I’m not judging it. My point is it doesn’t matter anymore, so we can just stop the finger-pointing and the blame game because they are all in on it, and we are really past the tipping point.
We have crossed the Rubicon in this country. I don't believe there's any going back. There's going to have to be a very painful, massive reset before we can get back (if we can) to some sane methodology of government by the people, for the people, and not the government overriding the people.
It's a mess out there today. We can all agree on that.
But where are the dangers? One of the things I’ve spoken about for years, even way before the pandemic, is the potential danger of loading up and putting a lot of assets or savings into retirement accounts.
The big benefits of qualified accounts have always been “tax deferral” or “tax free”, and tax savings. Well we call it tax savings, but in most of those traditional retirement accounts it's not actually that, but a tax deferment. Now most of the time tax deferment is not a bad thing, because we know the value of dollars invested today, if they're well invested, can make up for the taxes when you take the money out on the back end.
I'm not here to play that game right now, but I am a believer that the more able you are to orchestrate your financial future – that is, you know how to invest your money, whether it's in your business or in outside investments – you're probably not well suited to put your money into what I call the lockbox: a 401(k) or a retirement account.
There are very few people that can do that well. It’s not easy – it's hard.
If you're not well suited to investing your money, or you don't have the time, don't have the ability, or don't want to do it – then okay, put your money in a 401(k), cash balance defined benefit plan, traditional IRA account, whatever you want to do. At least there is discipline there.
But here's the next big problem I see, which is something I have not talked about in great detail: Since the last election there has been this massive swing towards socialism with Biden coming in, saying he's a moderate. He's about as left as you can get right now, way further left than many of the candidates that were running to be the president.
What he's doing now shows the signs that we are in a movement towards collectivism.
That means there's going to be more confiscation of wealth from the hardworking people like you. Yeah, you. You who have been out there risking your time, your capital, all the education you put into your business. Every day you go to work, you've got huge liability resting on you; you've got payroll to meet; you've got compliance to meet. You put it out there every day, and now there's this tendency towards redistribution: That if you made it, if you've got money, you aren't paying your fair share.
Look, I don't have to tell you the writing’s on the wall. The wealth tax is coming.
What does a wealth tax mean?
It means that if you have an increase in your assets – it could be your home, vacation home, gold, silver, Bitcoin, your practice, stocks, bonds – if they have gone up in value but you have not sold or harvested the equity, the profit, you're going to have to get an appraisal every year.
I see it coming.
Look, this government and country needs money, and they’ve found that they've got the majority of the people on their side, the people who are used to the entitlements, who love getting free money, who don’t have to work. We've just turned the tide here.
But what about the 401(k)s, cash balance defined benefit plans, qualified retirement plans? Did you know that the amount of money in qualified plans today is right around $28 trillion. Now think about that number – does that resonate anywhere? The current national debt is right around $28 trillion. Interesting.
The government has to deal with this debt someday. When interest rates go up, which they will, paying that debt is going to be a killer. It’s going to be a major drag on the economy. You haven’t seen anything yet.
Well, if the government could just come and seize the money in qualified retirement accounts, they could pretty much erase the current debt. Now it's going to go up higher than that, but they could erase a good chunk of it.
Now, when they seize it, I'm not saying they're just going to take it from you. They will do it like social security: they'll take the money, your name will be on your account; whatever you have will be there, but the government's going to seize it.
Then they're going to dole it back out to you, probably on a needs basis. You're not going to get it all back, just like with social security. You may have put a lot more money in, but you only get back a certain amount. There's a cap on it.
That's the great equalization. That's the redistribution of wealth that's going to happen. It's coming.
So your money in those retirement accounts? I'm not saying that they're a bad thing, but I wouldn’t load up on them. I would start pulling back and start learning how you can start advocating for your financial future and not doing it in those accounts, which are going to be easy for the government to take over at some point.
It's coming. I'm just giving you a fair warning. Maybe not next year, maybe not in two years, but it's coming soon. You've got to look long-term. You’ve got to play the long game. Short term, yes, we have to deal with taxes and with the issues of the day.
But your financial planning better be long-term to be strategic. I don't know about you, but I wouldn't play the game that the government gives us –
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