Episode 33

How the Presidential Elections Affect Your Money

Episode Description

In Episode 33 of The Big Bo $how, host Jason Blumstein, CFA (aka Big Bo), CEO & Founder of Julius Wealth Advisors, dives into the timely topic of how the recent presidential election could impact your financial future. With a lighthearted Thanksgiving twist, Jason breaks down complex economic changes in a relatable and actionable way.

We’ll explore:

• What the election results mean for taxes, inflation, and tariffs

• Possible solutions to the housing and interest rate squeeze

• Key drivers of stock market performance during political shifts

• Actionable strategies to stay ahead in uncertain times

And in the Bo Know$ segment, Jason serves up a Thanksgiving-themed finale, comparing your financial plate to a perfectly balanced holiday feast—complete with lessons on planning, progress, and, of course, pumpkin pie.

If you’re ready to turn election chatter into financial clarity and prepare your wallet for what’s ahead, this is one episode you don’t want to miss. Let’s get after it!

Episode Transcript

Welcome back to The Big Bo $how. I'm your host, Big Bo, aka Jason Blumstein, CEO and founder of Julius Wealth Advisors, the guy who's here to help you make your money work smarter, not harder, in a relatable, authentic way. Now, unless you've been living under a rock or avoiding the news like your weird cousin at Thanksgiving, you know we've just wrapped up a presidential election that shook things up. Trump's back in the Oval Office, Republicans have the Senate, and they're holding onto the house as well.

The question on everyone's mind is, what does all this mean for my money? Don't worry, folks. Big Bo's here to break it all down. Today's episode is packed with juicy insights, a little humor to keep it light, and yes, a Bo Know$ segment at the end to give you actionable steps - and we've got a fancy new theme song for that segment as well. I hope you like it.

Because while elections come and go, your financial goals don't take a holiday. So grab your coffee, your notebook, or maybe even a stiff drink because understanding politics and finances can sometimes feel like you need one. So let's get after it.

• Read More

  Alright, let's get into it. First, I want to set the stage. This is not a political conversation. Politics unfortunately has a way of dividing people, but I'm coming at this from purely a financial perspective. What do the recent elections mean for your money? That's the question we're answering today.

  As someone with a background in team sports, I know the value of unity. Sports brings people together, no matter their background. And I want this conversation to have the same effect.

  So, with that stage set, let's kick things off with two topics that can make your eyes glaze over faster than I do after a big plate of Thanksgiving dinner. Taxes and inflation. Stick with me though, these were two core issues in the recent elections and they're critical to understand.

  So let's get after it. Remember the 2017 Tax Cut and Jobs Act? That's sweeping legislation brought about some of the biggest changes to the tax code in decades. It lowered the tax rate across the board, boosted the standard deduction to nearly double, and expanded the child tax credit for families. On the business side, it slashed corporate tax rates from 35 % to 21 and created a 20 % deduction for pass-through businesses like LLCs and S-Corps. Big moves.

  Here's the kicker. For esstate taxes, it's temporarily doubled the exemption limit. Right now for 2024, the exemption for single filers is about $13.6 million. Double that for joint filers. But here's the fine print. All of these changes are set to expire at the end of 2025. Cutting those exemptions and those tax cuts away.

  Now, however, with Trump back in the Oval Office and Republicans controlling the Senate and House, it's highly unlikely that these will expire. In fact, we might even see them expand further. For individuals and businesses, this is an ideal time to reassess your tax strategies and your tax planning. Are you taking full advantage of these opportunities? If not, now's the time to plan.

  But here's the twist. Trump and the GOP are signaling they will replace some of this income loss from the continued tax cuts with tariffs on imports. What does that mean for your wallet? We'll get to that in a moment.

  But first, let's shift gears to inflation, the financial buzzword that sends shivers down wallets everywhere. One of Trump's cornerstone policies is achieving energy independence, which is often promoted as a way to lower costs. And while it's true, energy impacts everything from plastics to transportation, and we all feel it at the pump, energy prices weren't the main driver of the inflation spike we saw a few years back.

   So what was? Let me drop a jaw-dropping fact for you. Between 2020 and 2022, the U.S. money supply grew by 40%. That's right. 40 % of all dollars in circulation at the end of 2022 were created in just two years. Imagine having 10 people bidding on a single pie and then handing each of them an extra $20. That pie's price is going up. It's just simple economics. The real culprit here wasn't energy, but government spending and explosive money creation.

  So while energy independence is a great policy for stabilizing specific costs. It's not the silver bullet for inflation. The key lies in controlling government spending, and that's where the new Department of Government Efficiency comes in. Or DOGE. No, not the meme coin. It's aimed at reducing waste and increasing accountability in government budgets. Sounds promising, right? But here's the reality check. Cutting inefficiencies is a Herculean task. Bureaucracy doesn't just disappear and entrenched systems aren't quick to change. So while it's an intriguing idea, it's not something I'd bet the farm on just yet.

  So let's wrap this segment up with tariffs. Another hot topic that's making headlines. Tariffs were a big part of Trump's first term strategy and they remain relevant today. Many of the tariffs he imposed, like those on Chinese imports and aluminum, are actually still active today under Biden. Think about that for a second. Despite all the political back and forth, even Biden kept them in place. Why? Because they're more than penalties. They're bargaining chips. Tariffs help level the playing field in trade, protect key industries, and even raise revenue to offset tax cuts. And while some people worry Trump's proposal for broader tariffs might create inflation or chaos, I don't buy that narrative.

  Politicians, especially those aligned with Trump and his policies, want stability and reelection, not chaos. And let's not forget, during Trump's first term, inflation was tame, rising around 2 % annually. At the end of the day, tarriffs are a tool, tools that aren't going anywhere anytime soon. The real question is whether they'll strengthen industries and achieve their intended goals without putting undue pressure on consumers. And only time will tell for that.

  All right, we've covered taxes, inflation, and tariffs. Three key pieces of the puzzle. Next up, we're diving into interest rates, housing, and stock market volatility. Three areas where the election results can really shake things up. Grab or refill your coffee and stretch your legs because segment two is where things get even more interesting. Stick around.

  All right, folks, welcome back. Let's tackle the double whammy of interest rates and housing. Two topics that can make or break your wallet faster than I can polish off a double smash burger from Burger Boss on game day. There's a lot to unpack post-election, but I promise to keep it simple, relatable, and maybe a little bit entertaining. So let's dive in. First, let's clear something up.

  Politicians don't control interest rates. They can talk about the economy all day long, but the Federal Reserve, those folks behind the curtain, steer short-term rates. And here's the kicker. The Fed is independent and should stay that way. Their job is to focus on inflation and employment, not political wins. Now, when it comes to longer-term rates thats the 10-year Treasury, which impacts your mortgages.

  That's a different story. Those rates are set by the open market. Things like growth, inflation, deficits, and perceived risk are the puppet masters here. And let's be real, hoping for pandemic-era low rates again is wishful thinking. Those sub-3 % mortgage rates, a unicorn born from an economic crisis, not something we're likely to see again soon.

  So, what's my take? Mortgage rates aren't dropping significantly from where they are now. Sure, there might be some wiggle room, but that ship has sailed and it's probably docked in a harbor called “Reality Check.”

  Now, let's talk about housing, which is feeling tighter than my belt after Thanksgiving dinner. Housing affordability is hovering near all time lows. If mortgage rates aren't dropping, we need one or two things to happen. Real incomes must grow or home prices need to stabilize to come down. One way to cool prices, build more houses. It's a classic case of supply and demand. The more homes we have, the more prices cool off.

  Sounds simple, right? Well, here's the rub. Building more homes isn't just about hammering nails and pouring concrete. It's about cutting through the red tape. Regulations and zoning laws are major roadblocks. During Trump's first term, housing starts jumped 32 % thanks to loosened regulations. Over the past four years, they've dropped about 20%. That's a big swing and it's part of why housing feels so tight right now. Here's the deal. If we want housing affordability to improve, we need more homes on the market. To get there, we've got to make it easier for builders to build. Right now, the housing market feels like musical chairs. If you don't have one already, it's tough to grab one.

  Let's quickly touch on the stock market. Here's the truth. While everyone loves to debate politics, the market couldn't care less who's in the White House. Historically, the average annual return during U.S. presidential terms is roughly about 10%, regardless of whoever's in the office, a D or an R. What really drives stock prices? Earnings and valuations. Right now, U.S. valuations are looking full, in my opinion, especially when you compare the earnings yield on the S &P 500 to the 10-year Treasury yield. For stocks to justify current levels or climb higher, we need to see earnings growth broaden beyond large US tech. A more balanced market would help stabilize valuations and help reduce that top heavy risk.

   So what's the takeaway? For housing, it's all about increasing supply. Watch for policy changes that can make building easier, because that's where real progress happens. For stocks, remember, it's not about who's in office. It's about businesses adapting, thriving, and finding ways to grow.

  So let's take another quick break, and then we'll come back and we'll tie all of this together around everyone's favorite holiday and mine, Thanksgiving. In our Bo Know$ segment, we'll break down how taxes, housing, and even tariffs relate to piling up your plate and finding balance at that dinner table. Don't miss it. I'll see you after this.

  Alright folks, it's time for everyone's favorite segment, Bo Know$! And how about the fancy new theme song? Hope you enjoyed it. It got me feeling pumped to tackle this Thanksgiving theme finale. Because if there's one thing I love more than talking about money, it's piling my plate with turkey, mashed potatoes, and a slice or two of my famous pumpkin pie. So let's tie this all together.

  Think of taxes like the appetizers at your Thanksgiving dinner. They set the tone for the meal, just like they set the tone for your financial life. The 2017 Tax Cut and Jobs Act was like your favorite deviled eggs. My grandmother used to make the best. He gave everyone a little something to chew on. And now with Trump back and the Republicans in control, it's like they're bringing the same appetizer to the table, but maybe with a little extra spice.

  The takeaway, plan ahead to enjoy the benefits while they're hot, because you never know when the recipe might change.

  Inflation? That's the overstuffed plate you regret by the time dessert rolls around. Between 2020 and 2022, it's like someone kept refilling the gravy boat. 40 % more money in circulation, chasing the same amount of turkey, stuffing, and sweet potatoes. The result? Prices went up and the plate got heavy. Trump's push for energy independence might take the edge off of one side of the plate, but controlling the gravy, aka government spending, is the real solution. Just like Thanksgiving dinner, balance is key.

  Tariffs? They're like cranberry sauce. Not everyone's favorite, but they're always there. Tariffs can sweeten the deal on trade and even offset costs like tax cuts. Biden kept most of Trump's tariffs for a reason. They work. While new proposals might spark debate, tariffs aren't about chaos. They're strategic tools to level the playing field and protect industries. Like cranberry sauce, they're not the star of the meal, but they'll play an important role.

  Interest rates and housing? That's your family drama at the dinner table. The Fed is like the family elder, managing short-term rates, while the market sets the tone for long-term rates like the 10-year treasury. And just like your cousin's unsolicited life advice, you can't always predict how it will play out. When it comes to housing, we're dealing with an affordability squeeze here, like running out of mashed potatoes before everyone gets a scoop. The solution? Build more homes. During Trump's first term, housing starts jumped 32 percent. But over the past four years, they're down 20%. If we want prices to cool, we need more supply. It's just simple economics. The more mashed potatoes on the table, the less competitive things get.

  Finally, the stock market, that's dessert. Because no matter what happens at dinner, there's always room for pie. Over the long run, the market keeps moving forward. It doesn't matter if there's a D or an R in the White House. Businesses adapt because survival is their incentive. And just like dessert, a well-planned and balanced approach makes all the difference.

  As you sit down to enjoy your Thanksgiving dinner, remember, planning your financial future is like planning that perfect meal. It's easier when you've got the right team. The political noise may feel overwhelming, but it's just that, noise. The real work happens in businesses, communities, and in your own planning. If you're feeling unsure about your next steps, give us a call. Julius Wealth Advisors 201-408-4644. Email us at info@JuliusWealth.com or visit www.JuliusWealthAdvisors.com. Let's create a game plan to help you live the financial life you deserve one step at a time. Because building wealth is by choice, not chance.

  Until next time, I'm Big Bo, AKA Jason Blumstein, CEO and Founder of Julius Wealth Advisors, wishing you and your family a Happy Thanksgiving. And remember, live a life of integrity, obtain as much knowledge as possible, and always live a life that you're passionate about. Until next time, all the best. Thank you for tuning into the Big Bo $how.

Disclosure:

The content is developed from sources believed to be providing accurate information. The information in this podcast is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Julius Wealth Advisors, LLC (“JWA”) is a registered investment adviser located in Englewood, NJ. Registration as an investment adviser does not imply a certain level of skill or training.  The publication of The Big Bo $how should not be construed by any consumer or prospective client as JWA’s solicitation or attempt to effect transactions in securities, or the rendering of personalized investment advice over the Internet. A copy of JWA’s current written disclosure statement as set forth on Form ADV, discussing JWA’s business operations, services, and fees is available from JWA upon written request.  JWA does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. JWA is neither your attorneys nor your accountants and no portion of this podcast should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.