The latest episode of "The Capitalist Investor" had Derek and Tony covering a wide range of topics, from current and future tax concerns to March Madness and the launch of the Trump social media stock, $DJT. Here are the top 5 hot topics discussed in the episode:
1. Tax Planning and Concerns: The hosts delved into the importance of tax planning, emphasizing the difference between tax preparation and tax planning. They highlighted the potential impact of tax law changes, especially with the sunset of current tax laws at the end of 2025. The potential increase in marginal tax rates, the use of Roth conversions, and strategic distribution planning in retirement were all key points of discussion.
2. March Madness and Sports Betting: Tony and Derek discussed the frenzy surrounding March Madness and the surge in betting activities during the tournament. They highlighted the record-breaking betting numbers and the surprise that Vegas has enjoyed one of its best years despite the prevalence of mobile betting apps. The hosts also discussed the rise in betting on women's basketball and the excitement surrounding the games.
3. The Launch of $DJT, Trump Social Media Stock: The show's hosts provided insights into the recent news of former President Donald Trump's venture into the world of social media with the launch of a new stock, $DJT. They discussed the potential implications of this move, including the idea that the platform may serve as a forum for conservative voices. They also speculated on the stock's potential to become a meme stock, drawing attention from Trump supporters and short-sellers alike. 4. March Madness and Sports Betting: Tony and Derek discussed the frenzy surrounding March Madness and the surge in betting activities during the tournament. They highlighted the record-breaking betting numbers and the surprise that Vegas has enjoyed one of its best years despite the prevalence of mobile betting apps. The hosts also discussed the rise in betting on women's basketball and the excitement surrounding the games.
5. Upcoming Vacations and Easter Holiday: Derek revealed his plans for a Disney cruise and visit to his mother's place in celebration of Easter. The hosts briefly exchanged pleasantries and discussed Derek's upcoming vacation plans, providing a personal touch to the episode.
The podcast episode provided valuable insights into tax planning, financial strategy, current events, and even a touch of personal anecdotes, making it an engaging and informative listen for individuals interested in the intersection of finance, current events, and personal finance decisions.
Listeners were encouraged to consult qualified professionals for personalized financial, investment, and tax advice tailored to their individual needs. The episode served as a comprehensive source of knowledge and enlightenment, offering information for those looking to broaden their understanding of financial planning and current events. In conclusion, "The Capitalist Investor" episode featuring discussions on tax planning, March Madness, and the launch of $DJT, presented diverse and relevant topics, catering to diverse interests within the realm of finance and current events. The hosts' candid conversations and insights made for an engaging and informative podcast experience.
Hello and welcome to this week's episode of the Capitalist Investor. As always, you have me, diamond hands D. And once more, just the two of us. Yeah. Tony detector. What's going on? Good man. Luke's on assignment again. Yeah, man. Was he out of New York again? I guess so. Wow. Just living a dream. What shows he on out there? I think he hit up Maria Monday. He's on Barn and then some on Schwab network. Cavuto just hit them all up. Nice. Well, good work, Luke. Yeah, we'll see in a couple weeks, probably. But yeah. So, you know, as we talked a little bit last week, the news has kind of been slow, which is giving us an opportunity to kind of hit the planning corner. So, you know, we'll continue over the next several weeks to hit, you know, all the planning topics that we're coming across. You're working with our clients. So we will hit that. And this week, we'll be talking about taxes. Hit it. Oh, so fun. Yep. So fun. Yeah. A lot of good stuff to talk about there. So. And a lot of issues, honestly. So, you know, I always tell people this is one of the, you know, one of the things to pay attention to because it is a definite possibility, ability to impact retirees. So we'll talk about it, how to plan for it, and then a couple topics we'll hit from this week. Obviously, lots of Trump news lately. So, you know, in the world of finance, his, you know, his stock is going crazy for a social media firm. And then we'll talk a little sports betting and March madness because that is crazy. That that's also, it's happening. It's March Madness. And everyone, I don't, you know what, I almost didn't do bracket this year just because I have no idea what's going on in college basketball, just because they move so fast. Like, I just, like, lose interest. Like, they play one year, maybe two, and then they move on. And I, it's so hard to keep up. It's a much different game than when we were kids, that's for sure. Yep. All right. Taxes. So when we hit the financial planning corner, you know, concern about taxes. So it's one of those topics that when I meet maybe a client for the first time or a prospect for the first time, you know, like, yeah, we're worried about taxes. And I'm like, well, why? Like, well, you don't want to pay too much. And I'm like, well, what, what do you have in, what do you have in, what are you doing right now to help lower taxes, right? They're like, well, I use my CPA, and he keeps them down every year. And I'm like, well, that's part of the battle. Because at the end of the day, there's two lenses that a CPA can look through. One would be tax prep, like how to dial in this year's taxes and then tax planning. So this year's taxes are more of a micro view, where tax planning is more of a macro view. Because if you retired, your Runway should still be 20 to 30 years, and there might be incremental moves that you can make today. Maybe pay a little bit extra in tax because it could reap rewards down the road. Aka possibly what? Roth conversions, contributions to traditional versus Roth. What to do, why? Why it's impactful. But doing tax planning right now is so important because the tax Trump laws are sunsetting at the end of 2025. So when we wake up on January 1, there's gonna be. Something's gonna happen. We're either gonna sunset and we're gonna go back to the Obama tax rates and tax laws. And if that's the case, all the incremental marginal rates are going to go up anywhere between 15 and 25%. So the twelve goes to 15%. The rate of change is roughly 20, you know, 25% in that bracket. So we have an opportunity in 2024 and 2025 to do tax planning where we're looking at possible roth conversions so that we can convert at a lower rate. Because odds are they're going up. We're racking up. What are we at, $34 trillion in debt now? And they just passed another bill for another trillion. I saw someone say. Someone said something along the lines, like, man, this economy is booming. And I'm like, yeah, it's taking trillions of dollars to prop this puppy up. Absolutely. Like, holy. Holy cow. But when also comes to tax planning, there's distribution strategies in retirement, ways to create that paycheck for yourself. And there might be opportunities there to, depending on the different buckets of money you have. And what I mean by that is, you know, do you have tax free, like a Roth tax deferred, like a traditional or taxable, like a brokerage account or something? There might be a sequence of distributions to keep your taxes low for many years. You know, if you take a little portion from each one of those buckets, you could keep your taxes very low. Roth conversions. I always kind of. I always allude to it that Roth conversions are most likely meant for people in their retirement, because that's when you are going to go from working and earning higher income to turning on a distribution stream. And your income could or should be lower in retirement than when you were working. And that means you'll be in a lower tax bracket. And if you are, you may have the opportunity to just do a Roth conversion. So what are your thoughts on that, Derek? Yeah, so, you know, the, the tax preparation versus tax planning, that's kind of where things get complicated and why we always refer back to financial plans and financial planning. We get a lot of questions about Roth conversions. Just doing Roth conversions for the sake of doing Roth conversions may or may not help your overall plan. We'll talk more on Roth conversions next week. I think that's the, the topic for next week. But understanding that kind of the top level view that people have been given their whole lives is, hey, you got to save into your plan at work. You got to save into your 401K. So most people are doing most of their savings into that 401K plan. Maybe roll it over to an IRA when you retire. If you've done that, obviously that's great. You've saved, save money for retirement. But if that is where all of your money is saved, you'll be paying taxes, you know, as you go in retirement, as you pull that money out. Yeah. One of the things that, you know, I've seen this in multiple plans that I've, financial plans that I've built is somebody's plan may not necessarily get better on the surface when I do a Roth conversion, but when I take a look at the ending estate value and then I, and then I deduct taxes from the tax deferred and assuming tax laws stay the same and there's a step up in basis on the non qualified accounts and all that's left on the other bucket would be a Roth. That's when legacy planning can really come into the fold. Because what are you going to pass on a tax bomb or something that's a little less, you know, like a little bit less tax burdened, you know, that they don't have to pay as much tax. Right. So, you know, the ultimate legacy tool for the next generation would be a Roth IRA. Right. Because they're going to have to just, they're going to have to take the distributions. But let's face it, like, they don't have to pay the taxes on it. And what I, what I'm starting to find there is that when you're, the second generation starts collect, you know, as they inherit these accounts and they have to liquidate them they're in their highest earning years. So not only did you, as the first generation, do everything you could to help the second generation out, but you, you know, like, it could be inefficient because you left them a bunch of stuff that needs to go to Uncle Sam. Right. I think that's a huge point. The understanding who is inheriting these assets and how they're going to be taxed, that is an enormous part of tax planning that I don't think 99% of America even looks at. Number two, to wrap up some of your points, the. When you talk about financial planning, what is the impact if taxes go up by 10% or 15%? We mentioned, to start off this conversation, hey, if, you know, if taxes go up in retirement, that could affect people's retirement. That's kind of just stuff people say in passing. But if it actually does happen, and there are strong evidence to support that, it will, if your taxes go up in retirement and your financial plan is kind of, you know, strapped for your income, you're kind of at your maximum income. If your taxes go up in that scenario, you're just going to have less to spend. It's that simple. So making sure if taxes go up in retirement, that your plan is still going to be okay, I think is essential to planning these days. Yeah, 100% agree. Um, so taxes are fun, but they're complicated, so I don't know if they're fun. The one thing I would say, though, is that, you know, consult a professional, you know, and you probably need a couple in there when I say that. Like a, you know, a financial planning professional and a CPA before you run off and just start doing a bunch of roth conversions. Yep, for sure. Cause you wanna do it efficiently. You just don't wanna do em. To do them right. So the sizing of them. And when you do them, it could be a multi year step process. I think the one client I work with, like, we've been doing em for ten years and we're still kinda chiseling away at it. Cause we're trying to be as efficient as possible and staying in the, you know, the current 12% bracket while we not getting into the 22 as much and just doing little bits a year, maybe 1015 grand conversions per year. All right, so if you have any questions on taxes, reach out. We can always talk about them and see if we can make things more efficient. D March Madness is upon us. It's going off. There's already. I don't think there's a single. Is there any brackets that you've seen that are alive after the first two rounds. I think there's, like. That are, like, perfect. Yeah. Oh, no, I have not seen it. I know. Like, after the. Going into the second round, it was already, like, a handful out of the millions and millions of brackets filled out. So it's playing out the way everyone thought, you know, just chaos. Right. But the article that I saw that I found was just absolutely amazing, is that March Madness is expected to break betting records ever. Yep. And here's the ironic part, is that Vegas is saying this is one of their best years. Here's why I find that very. What's the word I want to use? Very. I'm very surprised. That's a big word I was thinking of. I'm very surprised because I figured that when DraftKings and Fanduel, they got their apps, like, who needs Vegas? Yep. And what Vegas is actually saying is that we got new faces out here. You know, like, they don't want to. They, like playing around in the app, but, like, hey, let's go where. Let's go where the action is. And that's in Vegas. And I've heard Vegas. It's absolutely awesome in March Madness. Like, it is just literally madness going on in Vegas. Everything's packed, every sports book. You can't move to watch basketball. Yep. It sounds like I've never gone out there for March Madness, but it does sound like an amazing time. And they got that new. What's that place with? It has, like, the giant wall of screen. Circa. Yep, circa, like, the outdoor sports book, basically. You know, I'm going to Vegas. I'm going to Vegas. And. Are you in May? And I'm going to. We're gonna. I'm gonna. I'm gonna visit circa. I've heard great things. It looks unbelievable. Yeah. It looks really cool, but it's just. It's an outdoor pool that just caters to the better. You know, they got screens and everything you command people walking around with, taking your bets. So just making it easily available. But I just. Here's the thing, man, where you're racking up trillions of dollars in credit card debt, and these people are betting on, you know, one of the things. One of the. One of the highest spikes in betting is on women's basketball. Like, you didn't. Yeah. You don't have enough with men's. Like, I mean, when did women's basketball become popular to bet on? I'd say this year. Probably this year. Last year with Caitlin Clark. I couldn't name a college. I mean, I could see them in my mind, but I don't know their name. I mean, the last one I remember is like, what? Rebecca Lobo was the last one that kind of stuck out in my mind. But I don't, I don't know. But, yeah, then, I mean, in between games, like, like, oh, my God, like, I got five minutes of no action. I better go bet on these women's sports. Basketball. I don't, it's just crazy, the mobile. Betting, you know, it's. If you're just sitting there and you're bored, which, you know, you and I probably aren't doing that very often, but there's a large portion of the population that has nothing going on and just endless amount of parlays they can play. That's the thing. Like, I've been on, like, draftkings app. Do they make parlays easy? Cause they build them for you. You think those are designed to win? No, absolutely not. So I don't know. It's just, I saw that and I'm like, no wonder we're racking up trillions of dollars of additional credit card debt because we're trying to hit home runs playing parlays on sports betting. So I don't know. That's just, I barely gamble. But, you know, if you're out there and you want some gambling advice, do not bet a parlay. That is how they, the books make basically all their money. Yeah. I mean, the juice is there, too. Yeah. You know, you gotta, the odds are not in your favor when you start building those out. Yeah. Yep. So if you're out there, you know, Vegas is doing well. Still, that's, that's, that's the thing. And the average consumer isn't because we're still racking up debt. All right. The other thing going on right now is, man, Trump is all over the news. Oh, yeah. His, his, his bail came down from like 404 hundred and some change, millions of dollars to like 175 million or something. Oh, yeah. Yeah. So, like, I think there was a bit of a sigh of relief on his end. But the other thing that's going on with him is he has a new stock, right. The Trump social media. There's going to be the ticker, DJT, Donald J. Trump. Right. And they said that that ticker, he used it way back in the nineties because it had a couple hotels and casinos that eventually went bankrupt. But, yeah, let's rekindle this right out of the ashes. So dd do you know what this is all about? Is this just a, my interpretation of this. What he's doing is creating a Twitter for Republicans. Yep. So that they can be heard. Right. But I think. I think this kind of got pushed to the surface because he needs money. Okay. So going public like this, you know, is potentially going to help him, you know, get those assets that he needs to, you know, pay the collateral or whatever they're, they're calling it these days. Did you see when they asked him how he was going to secure the bond, he said, cash straight. Straight. Cash only. Cash only. So that was, that was pretty entertaining. But, yeah, you know, that's, I don't know. It's obviously just pure wild speculation right now for the pricing. You know, I tried to do some research. It's supposed to. I mean, like, the things I'm understanding and reading is that he's a 60% owner. There's already 5 million subscribers to. What's it. Truth. Yeah. So to put that in perspective, X, formerly known as Twitter, has 550 million subscribers. So it's very small. Yep. But I know that, you know, the don, you know, Mister Donald Trump came out and said that he basically, what he wants to do is create something that is. You're not going to get silenced on my media program or my media. Right. So that's the one thing. But a lot of people are saying this could be the next, like, meme stock because there's really nothing to it. Yeah. You know, I don't even, you know, 5 million subscribers. There can't be much revenue. No, there can't be. Yeah. And so I guess we'll, we'll find out what happens with this. But it's, it's, it's breaking news today. He's been in the news because of his, the bail that he needs. And, and I don't think he is going away anytime soon. Yeah. So it was over, you know, when we started recording on. I guess it'll be Tuesday morning. This week it was over $70, up 42% on the day. So we'll see. We'll see what happens on Thursday when this release is to keep. Can't you see it becoming, like the next, like, meme stock? Like, I mean, GameStop and all them, like, they just rocketed out of nothing, too. Cause, you know, the, the shorts are going to come in on this and then 42% today. Right. So who. But who's going to get squeezed the longer the short? And I know there's some players out there that love to squeeze the shorts. Yep. So. And if that happens, then it just really takes off. Yeah. And then you're going to get natural momentum just for the Trump supporters. Right. Which there's a lot of them out there. The buy. The buy and hold, like one of the commentaries I heard is like, yeah, this doesn't seem like one of those buy and hold stocks. So does not. Well, we'll see how this plays out. But it's definitely news for today. So. All right. D. Because it's Easter, you know, if you celebrate Easter, you know, have a great holiday. I know you're going on vacation, aren't you? Yep. Little Disney cruise. Nice. Yep. So it's just a three nighter. So we'll go down, visit my mom for a day. She has a place outside of Orlando in celebration. So we'll go down there and then get on the boat on Friday and then come home on Monday. Nice. Where do they go? Like they go to like Disney island or something. Yep. It's just NASA. And then they have their own private island in the Caribbean. Nice. Yeah. Have fun, man. I'm looking forward to it, man. Getting out of this weather. Great skies of Cleveland. Yep. All right. All right, everyone. Well, thanks for listening this week. If you have any questions or comments, hit us up at info connect.com and we'll talk to you next week. The opinions expressed in the podcast are for general informational purposes only and are not intended to provide specific advice or recommendations for any investment, legal, financial or tax strategy. It is only intended to provide education about the financial industry. Please consult a qualified professional about your individual needs.