Transcription
I was just on a podcast and the host asked me what's going to happen to our economy based on the great wealth transfer after President Trump's new tax plan. Now, I thought that was a very interesting question. So, I want to break it down deeper in this video because in 2025, President Trump signed the one big beautiful bill act. It's a new tax plan which changed the estate tax laws. What it said is that you don't have to pay any estate taxes, meaning death taxes, when you pass your assets down to your kids, unless you're passing down more than $15 million per person. That's $30 million per married couple. So, if I pass down $14.9 million, I don't have to pay any taxes. Over $15 million per individual, now you have to pay taxes. And over the next 20 years, it is anticipated that something around 120 trillion dollars are going to be passed or changing hands in America because of something called the great wealth transfer.
What is this great wealth transfer? Well, baby boomers in the United States own more than 50% about 51% of all wealth here in the United States. And as baby boomers get older and they start to pass, they're going to pass these assets on to their kids, their grandkids, to charities and other places. And as this money changes hands, that is going to change how money is spent in our economy because we're talking about a trillion dollars a year, which is already changing hands, and it is going to be accelerating every year over the next two decades. And the question now is how does this impact our economy especially based off this new tax laws and how is this going to change investment opportunities.
And the reality is the first thing you want to understand is that younger people, millennials, Gen Zers and even Gen Xers spend money very differently than baby boomers. And we can look at this from a spending perspective but also from an investment perspective. Starting with the spending perspective, there is a concept called the third generation theory. The idea is that somebody works to build wealth. And then by the third generation, that's the generation that screws it up because they spend all that money. Now, of course, it doesn't happen for everybody, but it's happened time and time again where you go and you build wealth. Your kids saw how hard you worked and so they maintain, preserve, and try to grow that wealth. Your grandkids may not have that same touch. And so now this is where things get a little dicey. Sometimes the grandkids are also taught how to maintain and grow that wealth. Sometimes they're not. But by the great grandkids now a lot of times that knowledge, that hard work, that that understanding of the value of that dollar starts to get lost and that's where that fortune gets dispersed because now they just spend all that money recklessly. So the first thing is the most expensive kind of money is free money. And so when people get free money, whether it's in the form of an inheritance or whatever, they're much more likely to spend it. So when this great wealth transfer accelerates, the first thing that you can expect is a growth of spending. Because when people get more money, especially when they don't have to work for it, many times they will spend a lot more of that money.
The second thing you want to think about is which assets get passed down because more specifically in the United States, everybody says your house is the most important asset and that's how you build generational wealth. And so many people are going to pass down a house. Maybe it's free and clear, maybe it's not. The idea is now if I pass down a house, you're going to become wealthy. But let's play the scenario out. Let's say you bought a house for half a million dollars. It grows in value. It's worth a million dollars. Now you feel like, "Wow, this is amazing. I own a a asset that really grew in value and you pass this down." Well, that million-doll house now has property taxes. It always has property taxes. But when it's a million- dollar house, now you have to pay property taxes on a million- dollar house, which means your property taxes just got a whole lot more expensive because property taxes go up as a house becomes more valuable. And so we've seen this happen time and time again throughout history is that as housing values go up, if people can't afford the cost of the property taxes, they may have to sell that house. But don't forget also the insurance because as your house becomes more valuable, you now have to insure a million-doll house. So if more houses get passed on and people can't maintain the cost, meaning the property taxes, the insurance, the maintenance, the upkeep of the house, we could see more people selling these houses uh because they just can't maintain that cost. Then it's a spending that you can expect more people to spend as well.
But then if we flip the gears and we look at the investment side, younger people also invest their money very differently than older generations because baby boomers for the most part followed a more traditional stocks and bonds investment strategy. Well, millennials, Gen Zers, and even some Gen Xers don't follow that same strategy. It's not the same stocks and bonds. it's some stocks and instead of bonds, maybe it's crypto, maybe it's gold, maybe it's startups, maybe it's other private equity investments. It's a very different investing strategy and all of this changes. Now, the way you should be thinking about investment as well because all of this means money is moving and as an investor, your job is to invest where the money is moving. And in the investment market, the price of anything, whether it is gold, stocks, real estate, Bitcoin, always depends on supply and demand. When you have more buyers for an asset than sellers, the price of an asset goes up. When you have more sellers of an asset than buyers, the price of the asset goes down. So, as now this money gets transferred from the older generations now to the younger generations, number one is going to be spent, which is going to benefit investors. I'll talk more about that in just a minute. But number two, when it gets invested, that invested money, you can expect it to be more diversified across newer asset classes which generally haven't seen that older money go into yet. Something to keep in mind.
Now the question then is well just how do you take advantage of this? Because this is really where the opportunity is. And understanding now in this economic system, the person that becomes wealthy is the owner of the assets. Because if somebody now gets more money, free money, get whatever, and they spend more money at Apple, who is benefiting. It's not the employees at Apple. It is the owners of the Apple company. And you're going to say, "Well, Dustin, that sounds great. How can I be the owner of the Apple company?" Well, you can invest in the Apple stock. You can invest in the companies that are producing these products and it becomes and is going to become more important than ever before. It has been extremely important but it's going to become even more important for this reason because as people get more money and they spend more money who do you think is going to become wealthier? It is going to be the investors. And this has already been happening because number one, our spending already makes the investor wealthier because when people get money and they spend it at Chipotle, they spend it at Amazon, they spend it on Apple, it is the investors in these companies that are getting richer. Number two, inflation makes the investors richer. And we've been seeing this happen time and time again. Decade after decade as money gets printed, as inflation happens, the prices of things go up. It's not the employees that are getting rich. It is the investors that are getting richer because that means more dollars are going into the hands of the investor. Number three, our tax code is designed to benefit the investor, not the employee. I'm telling you this as a licensed attorney who is not your attorney. Our tax code gives investors lower tax rates or bigger tax breaks. As an employee, you qualify for a different tax bucket. It's called ordinary income. Sometimes they call it earned income. that comes with the highest tax rates and the lowest tax breaks. And finally, number four is our entire economy is built on making the investor rich because the CEO of your company has what's called a fiduciary duty. It is a legal obligation to make one person rich, the shareholder. It's not the employees, it is the shareholder. Companies are led with a duty to make the shareholder richer to improve share prices. This is how our economic system works. This is why it has been important to be an investor. But what we know is as more money is spent that more money being spent benefits the investor. And as this great wealth transfer continues to happen and it continues to accelerate in 2026, 2027 and as these tax changes allow more money to be passed on. That all is a recipe for benefiting the investor in the long run. Because that means as more money now is going to be able to be spent. That's more money that's going to be able to go into the hands of the investor's pockets. Which is why it becomes incredibly important for you to be an investor.
Now, number one, I got to remind you, investing has risks. You are never guaranteed to make money when you invest. In fact, you will lose money at some point. So, make sure you always do your own due diligence and never blindly trust a random guy on YouTube. Number two, you don't have to invest into the Apple stock or the Amazon stock or to any individual company. This is a mistake that a lot of people make is they start to chase headlines. They hear about what's talking about on Reddit or Tik Tok or whatever is happening CNBC and then they buy those stocks and now you're chasing headlines and you're hoping that you pick the right stock and now you're gambling and then you buy high and sell low because you don't have an actual strategy. There's nothing wrong with buying individual companies. In fact, it is a good strategy when you have the right research. But the first thing you want to understand before we get into there is there are ways for you to just buy a piece of the economy. There are funds out there, index funds, ETFs, mutual funds that will give you exposure to the broad economy. And if you focus in on ETFs, because this is the most accessible, there are funds that give you exposure to the total stock market. There's about 3,3500 stocks in the United States stock market. You can own a piece of all of them by buying one fund. It's called VTI. Again, I'm not telling you what to invest in. I'm just showing you how you can think like an investor. This gives you exposure to the total stock market. Now, if you wanted to get a little bit more niche, there are funds that give you exposure to the S&P 500. That's the 500 largest companies in the stock market. Now, the nice thing about this is if one of those companies like McDonald's serves really crappy hamburgers and they're no longer a part of the S&P 500, they're going to get kicked out of the fund and replaced by another stock and you don't have to do anything. It's completely passive for you. So, if you wanted to invest in something like the S&P 500, there are funds like SPY, SPY that can give you exposure to that. If you wanted to take a one step more niche, there are funds like QQQ that give you exposure to the NASDAQ 100. That's a group of the 100 largest companies in the stock market that are not financial. So, these are primarily tech companies. It's more volatile, meaning it goes up more when markets are up and it goes down more when markets are down, but it gives you more niche exposure. And then you can get even more niche by looking into individual industries. You can invest in AI funds, healthcare funds, real estate funds, Japanese funds. There's funds for pretty much anything that you can imagine. So if you want to invest in the total stock market, something like VTI. You want to invest in something like the S&P 500, something like SPY. You want to invest in something like the NASDAQ 100, something like QQQ. And again, I'm not telling you what to invest in just so you can start thinking like an investor because we know that this shift is happening. This shift is going to make some people richer. It's not just the people that are getting the inheritance. It's the people that understand that when people get that inheritance, they are going to spend that money. Because a lot of us are not going to get an inheritance like that. Okay? A lot of us didn't grow up learning about money and investing. Trust me, I know. But the reality is is you can benefit even if you don't receive a million dollar inheritance or even a $10,000 inheritance if you understand how money moves through the economy. And what we know is that there are trillions, not millions, not billions, but trillions of dollars that are going to move hands over the next couple of decades. More than a trillion dollars a year. A big chunk of that is going to be spent because people don't have the best financial education. And the people that are going to benefit from that spending are going to be the investors. And this is where you got to understand how the system works. It doesn't mean the markets are going to go straight up. We know that recessions happen. We know that market crashes happen. They're a part of our economic system. They've happened in the past. They're going to continue happening in the future. In fact, we have averaged more than one decade, one recession per decade over the last century because we've seen 16 recessions over the last 100 years. We've averaged more than two market crashes per decade over the last 100 years because we've seen about 25 market crashes over the last 100 years. They're a part of the economy. And in fact, these market crashes and recessions create more and bigger wealth buildinging opportunities because they can allow the financially savvy to come in, buy good investments when they're on sale. Because when everybody's selling and everyone's freaking out, people panic and they sell. Well, if it's a good investment now, you can come in and buy it at a discounted price. But you have to have the right psychology. You have to have your money in order. And then you have to have the cash to be able to actually invest in these opportunities. This is why investing your money and understanding this financial education has been so important, but it's going to become even more important as more money changes hands because when people get money that they don't have to earn, they tend to spend it. We've seen this happen. Just look at what happened during the pandemic when the stimulus checks were going out, the unemployment checks were going out, people were getting this extra money that just kind of dropped into their bank accounts. Spending went through the roof. And I know this because I was uh living in Chicago for a little while. Uh my wife and I got an Airbnb in downtown Chicago. Beautiful area by the way. And there was a period where there was 2-hour lines to get into any of the high-end stores on Michigan Avenue, Gucci, Louis Vuitton, whatever the stores were. People were lined up in the middle of a day on a Wednesday, not working, but waiting to spend money in line at these stores. It was crazy. So, as more people get money, expect more spending to happen. And the spending benefits the investor, which is why you want to pay attention to this.
Now, again, if you are an investor, want to become an investor, I put together a brand new and free investing master class where I'll walk you through how you can get started as an investor and find hidden investment opportunities before everybody else. It's a free master class. There's a ton of value in there and I'll even show you the exact framework that my firm and I use to research investment opportunities before they hit the headlines. When you register, you're also going to get access to market briefs, which is my newsletter for investors, completely free. So, if you want to get Market Briefs and my investing master class, all you have to do is register. I have that link for you down in the description below. And if you got value out of this video, the best thank you was a referral. So, if you could please share this video with a friend, family member, colleague, or fellow investor. That way, we can continue to spread this type of financial education. Thank you. Gold and silver has been falling at the fastest rate we've been seeing in more than a decade. And Bitcoin prices are getting hit hard. Why? Because of what President Trump just said. President Trump has been very critical of the Federal Reserve Bank. So although President Trump has been demanding lower interest rates, the Federal Reserve Bank has been saying no. President Trump just announced his