The Wealth Gap Is Accelerating Out-Of-Control | Lacy Hunt, Judy Shelton, Darius Dale & others
Summary
Wealth Disparity: The podcast discusses the accelerating wealth gap in the U.S., highlighting how the top 1% have seen their wealth skyrocket compared to the bottom 90%, which poses significant societal challenges.
Market Dynamics: The conversation touches on the concept of a K-shaped recovery and the potential shift towards an "I-shaped" economy, where wealth and advantages are concentrated among a small elite, leaving the majority behind.
Investment Strategies: Emphasis is placed on the importance of converting labor income into capital investments to benefit from compounding and protect against inflation, especially in an economy favoring capital over labor.
Economic Outlook: The podcast anticipates a potential market correction and recession, which could narrow the wealth gap temporarily but may also negatively impact the broader economy and employment.
Housing Market Trends: Discussion includes the current state of the housing market, noting that new homes are becoming cheaper than existing ones due to builders offering concessions, indicating a potential correction in housing prices.
Financial Planning: Listeners are encouraged to engage in proactive financial planning, potentially with the help of financial advisers, to navigate the current economic environment and prepare for future uncertainties.
Long-term Societal Implications: The podcast explores the possibility of societal unrest if the wealth divide continues to grow, suggesting that significant changes may occur in the next few years as part of a "fourth turning."
Conference Announcement: The Thoughtful Money fall online conference is announced, featuring prominent speakers like Lacy Hunt and Judy Shelton, offering insights into macroeconomic and market trends.
Transcript
What you can see here is that the top 10% is running away from the bottom 90% but that itself is dwarfed by the top 1% just skyrocketing higher in terms of the wealth that's concentrating in the pockets of the very few up at the top there. This is a societal challenge is probably the nicest way I can say it. Some might call this a societal calamity. [Music] Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Tagert. Welcoming you back here for a special video. Um, in this video, we're going to talk about a chart that's making its way around the internet right now. I'll put it up here real briefly. Um but this is a chart of uh net personal wealth and it shows you the breakdown of that uh between the top 1% the top 10% uh the bottom half of uh society and then the bottom 50th to 90th percentile this is all in the US and what you can see here is that the top 10% is running away uh from uh the bottom 90% but that itself is dwarfed by the top 1% % uh just skyrocketing higher in terms of um the wealth that's concentrating in the pockets of the very few up at the top there. Um this is a societal challenge is probably the nicest way I can say it. Some might call this a societal calamity. Um you've heard me talk folks uh many times on this channel about the K-shaped recovery that we've largely been in since CO. Um the the K shape is to capture the top end of the K is is really you know the top part of society that's continuing to do quite well. The larger bottom part of the K is supposed to signify you know the bottom 80% maybe as this chart shows bottom 90% really increasingly starting to fall behind or increasingly continuing to fall behind. Um I have of late started warning about how this trajectory if left unchecked uh may bring us to what I consider to be a lowercase Ishaped economy. Um meaning you know a small number of people at the top where the wealth and the advantage has fully concentrated and then the rest of society is the bottom half of the eye just again getting increasingly left behind. You look at a chart like the one I just showed definitely shows you that we are h hurtling right now towards that eye-shaped destiny. Um so it raises a bunch of questions. What does that mean for society? Is this a fatal comp plea or can we reverse this? Uh and probably more importantly more relevant to all you viewers. What can we do as individuals to make sure that if there is going to be a continuing wealth gap that we at least individually try to fall on the right side of that uh to protect ourselves and those we love about and then obviously what could we do to help society. Uh before we do that though I just want to make an official announcement here. Um the um fall online conference for thoughtful money is now officially uh open and ready for ticket purchase. So, this is going to be the conference itself is going to be on Saturday, October 19th. It's an all-day event. If you've watched our previous online conferences, you know what to expect. If you haven't, folks, it is a fantastic day packed with over 10 hours of presentations and live Q&A with the best minds in money in the markets. This year is going to be absolutely no exception. Uh the faculty that we're building for this looks on track to be our best ever. Uh just to throw out a couple of names, uh Lacy Hunt will do the kickoff keynote as he has done in our previous conferences. Um if you have seen them folks, you know that these are graduate level seminars uh in uh macro and monetary matters. Um this year again will be no exception. Lacy is going to walk through a bunch of new charts uh explaining where he sees things going on the macro side of things. Um he'll be followed by James Grant, the godfather of interest rates. very important this year where we're now starting to looks like we're going to be switching to an era of uh Fed rate cuts coming over the rest of this year and early next year. Um we'll have Judy Shelton joining us for the first time ever. Um as you know, Judy has been uh you know in the running uh for a Fed seat. Um she is a highly influential adviser to the current president's economic team. Um uh they'll be followed by uh Darius Dale uh on his latest market update. Uh we'll have Michael Howell giving us the latest update on liquidity. We'll have uh Grant Williams and Stephanie Pomboy together uh giving their latest macro and market outlook. Uh we've got a number of other people that are scheduled as well. I'm going to reserve those names uh to announce later on as we get closer to the event. But as you can tell folks, this is going to be a phenomenal event. Don't worry if you can't actually watch the conference live on Saturday, October 18th, because replay videos of the entire event, all the presentations, all the live Q&A will be sent to everybody who buys a ticket for uh the conference. So, if you're interested in learning more about the conference and hopefully in signing up for it, um you want to go to thoughtfulmoney.comconference. And right there now, you can buy tickets at the lowest price we'll be offering. that's at the early bird price discount. So, make sure you go there sooner rather than later to lock in that early price. And if you're a premium member of our Substack, um then make sure you look at the email you should have received from me that contains the discount code to use to get an additional $50 off of that low early bird price discount. I want to make sure that everybody is paying the lowest amount for this conference that they possibly can. And honestly, if you want to gain the system and just sign up for the uh the premium Substack uh for a month, uh it cost $19 to get the $50 discount. You get to pocket the $31 uh benefit to you. I don't mind if you gain the system like that. Like I said, I just want everybody to get the lowest price possible for this conference that they can. So folks, if you can run, do not walk to thoughtfulmoney.com/conference and lock in your ticket for the upcoming October 18th conference. Uh all right. So to talk about that chart of uh the growing wealth divide in this country and what it means uh I'm joined by the lead partners from New Harbor Financial, John Lodra and Mike Preston. Gentlemen, thank you for joining me for this very important discussion. Great to be with you, Adam. Thanks for having us. And uh we're going to chime in here. We we have had the privilege of joining you, our team, in your annual conference as a as a sidekick, if you will, but mostly what we get out of it is a tremendous amount of knowledge and learning. You know, we we tune in all day and we're able to uh gain the perspectives of all your distinguished guests and it's always a great uh intensive day for us. So, we highly encourage folks that are are watching this to to think about u signing up to attend. It's a great great event, great uh informationpacked day. you won't be disappointed. And thank you, Adam. So, we'd be happy to talk about this chart. Maybe you want to bring it up again, but um the growing wealth divide is a is a really sore spot. Uh you know, it's a really sore point that I think is very important to understand where we are in this fourth turning. We we're coming out of really several decades, and it's seriously probably going back to the early 80s here. We're going on four decades of just continual monetary expansion and every small hiccup in the markets or in the economy has been papered over with more and more money printing. And so that chart that you just showed a minute ago talked about the growing wealth divide. And this is really all because of the focus on the wealth effect. Here it is. Yeah. The net personal wealth. And really take a look at what happened since the year 2000. And that's where things started to go parabolic. For the top 1%, they've seen their wealth triple over that period of time, you know, from um from uh millions of dollars, 5 million millions of trillion um five 5 trillion 15 trillion over that period of time. And the rest of the group hasn't nearly kept up. I'm going to show another couple charts if that's okay with you, Adam, to to share something uh to show some similar things. And this is from a person that we know that is your good friend, Charles Hughes Smith. So this is Charles Hughes Smith blog of two minds.com. He does some great writing and I try to tune in there as often as I can. But uh when we were chatting a little bit offline about this growing wealth divide and decided to talk about this today, I took a look at Charles Hugh Smith blog and saw a recent piece here that he wrote on August 8th or 9th. I think it was. This shows and right off the St. Louis Fed's uh website, this is the the Federal Reserve's data, the net worth held by the top 1%. If you take a look, and this is actually in millions of dollars, but you can this you can illustrate this any which way you want, and the chart looks similar. It could be percentage of wealth or whatever. This happens to be millions of dollars. Since the year 2000, the top 1% have increased their net dollars or their gross dollars, I should say, five times since the year 2001. And I think the Fed knows this and I think the Fed looks at this as a necessary evil that this has to happen because our debt federally, which is at 37 trillion and growing by close to 3 trillion a year, there's really no way to ever pay that off. And the only way for this to continue to have a good outcome is for prices to go up across the board. So here's what happened to the top 1%. Now, this isn't a new story, although every single time we have a recession and the Fed comes in with more stimulus, the top 1% have an increase in their wealth every single time. Whereas, if you scroll down a little bit more in the article, for instance, to this chart, you'll take a look at share of gross domestic income compensation of employees. This is workers. What does wage and salaries look like? Well, take a look here. Since 1980, there've been a steady decline from about 50% of total um gross domestic income down to about 42% or so. And so, you know, Charles H. Smith writes here that start of globalizations and and after COVID stimulus, you saw workers percentage compens compensation peak and then decline. So, these are trends that are continuing because of the Fed's just insistence on targeting the wealth effect. And maybe they don't have a choice. I guess I have to admit that maybe there is no alternative. But the truth of the matter is that the underlying social tension and potential conflict that can come out of this is something to to be concerned about. It's not going to matter until it matters. It's not going to matter until the market crashes and 401ks crash and that type of thing, but then it will matter in a big way. And all of the the years that we've been talking about this, people like you and Charles Smith have been talking about this and we here at New Harbor will finally matter. So, great point, Mike. Um, thank you for bringing up those charts and yeah, um, huge fan of Charles, great friend of mine. And folks, if you're not familiar with his website yet of.com, you should definitely go there and add that to your reading list, your regular reading list. Um, so, uh, there's a bunch of questions that are begged by this. Um, and one, Mike, is, you know, is this not a bug of the current system? Has it become a feature, right? Um, where it's actually something that is is, you know, being engineered by those that are running the system. And as we've heard, you know, from many administrations, uh, the Fed and the whatever administrations, you know, in power at the time is always trying to engender a wealth effect, right? And and in their mind, it's a wealth effect to get spending flowing and the economy running. Um, it doesn't necessarily care where how the wealth is distributed. It just wants uh wealth in the system to be able to get out there and kind of, you know, grease the economy. Uh, and of course in the Reagan era, you know, we started to hear the term trickle down economics, which is, hey, let's feed the people at the top and that will, you know, hopefully get down to the people at the bottom. But as long as the people at the top feel flush, they're going to go out there and invest in the financial markets, they're going to buy real estate, they're going to, you know, uh, make capital investments, uh, that, you know, help the economy. And and that has that has worked. I mean it's kept things going but the price of it has been this increasing disparity between the halves and the have nots and as you said there you know increasingly capital has been what has benefited um not labor right it's come at the expense of labor um sorry I can see you want to say something so I'll let you jump in well I'll say it quickly if I can it is absolutely a feature and it really did start back in Reagan's time as I mentioned a few minutes ago it's been going on for 40 years but accelerating uh parabolically I guess is the word not asmmptotically parabolically it's been it's been accelerating and it has to keep going and this is a feature everywhere you look in the economy we talk all day long to people about their assets including their homes and it's more common than not that somebody says gee I'm selling a home now for 1.5 million or 2 million I bought it 10 years ago for 400,000 you know it happens everywhere young people are mad they can't get in older people are glad that they have those assets assets. But think about what the towns and cities are doing. They are re um valuing their tax base so that their revenues are going up at the same rate 2 3 4x over the last 5 10 years and they can't survive on a penny less. So the whole system needs this. When we had the last big test and that was the great financial crisis in 2008 2009 central banks around the world had to push rates to zero for over 10 years just to recapitalize the system. That wasn't fair either. that stole $3 trillion out of the pockets of savers roughly. So, we're not even talking about the unfairness of that, you know, but the unfairness of the wealth effect is real. And the bottom 50% did not take the ride up in the same way that the top 10% did. And certainly not the same way the top 1%. And as you talked about earlier, we we would encourage your viewers to think about how to protect yourself from that. As we continue this conversation, I think we can come up with some ideas. But it is inherently unfair and we've been talking about it forever, more than 10 years. But we do believe we've got a date with destiny destiny and that we're entering soon the crisis and the climax phase of this forth turning that we're living through. We want people to protect themselves from that. It's just unfair and we just felt like a little bit of a rant today was was due after talking about these charts. Well, it I mean look, it's it's a very real thing whether you like it or not, right? And so, you know, there's a short-term question here and a long-term question, right? The short-term question is is okay, as long as the game is continuing, you know, how do we as individuals make ourselves less vulnerable to ending up on the wrong side of this wealth transfer, right? And I think part of that is, you know, capital is important, right? So, if capital is favored over labor, you know, try to convert your labor, right? The money that the income that you're making, convert that into capital that is being invested, right? and try to get, you know, the magic of compounding working in your favor. But, you know, it's sort of like don't hate the player, hate the game, right? You know, we can say, look, we don't like the game, but as long as it's the driving force, you want to be using it to your advantage, not having it work against you, right? So, we can talk about, you know, strategies for there. And of course, this is one of the main reasons why I connect people with financial adviserss like you, because you get you can help them be better at managing their capital, right? Then the long-term question is well you know what does this mean for society right so um another chart that's been making its way around the internet that I put up a lot here I won't so I won't put it up again but it shows the percentage of 30 year olds who were both married and homeowners and in 1950 that was above 50% now here in 2025 it's like 13% right so this goes back to your point Mike about younger generations just getting priced out right just not being able to afford this stuff and so you mentioned the fourth turning earlier, Mike, you know, the trajectory that we're on here as assets get hoovered up more and more by a fewer a smaller and smaller group of people, this eye-shaped economy that I fear we're on our way to, you know, that's an aristocracy. That's almost a feudal society, right? And and history shows when you get to a certain level of wealth imbalance, you start having revolt, unrest, revolution perhaps. Um, and so, you know, a big key long-term question that gets raised looking at this is just how much time does this have left in front of it before things really start breaking society. So, anyways, two really big questions. John, I'll let you chime in here. Um, anything to add to what Mike and I have already said and I think you already have a couple of other supplementary charts too, correct? Yeah, sure. No, this is very timely and um you know there there actually was an article today that quoted Mark Xandandy from S&P and he he he pointed out that um the top even just the top 10% which isn't even quite as extreme as the the top 1% if you look at consumer spending just 30 years ago the top 10% comprised only about 10% of of the consumer spending which was almost like you know what you might expect in a in a fair society right Today it's approaching 50%. It it's it's been over th those three decades, which is not that far. We're talking about just before the dawn of the internet, right? We're not, you know, I was I was an adult by then, right? And dating myself here, but that's not that long ago. And and to see in such a short period of time, and it's no coincidence that much of that period of time has been defined by really really um uh intervening Fed policy, interest rate policy, and whatnot. and that and and they have been reactions to asset price bubbles and the rescue of asset price price bubbles. So, you know, Mike already did a good job with you to talk about that, but let me just share, you know, where this one one thing that I think is is missed in some of those statistics is that it's not a a linear degree of of disparity. And what I mean by that is, you know, we can look at these these big, you know, chasms between the top 10% and the 50 or bottom 10%. But it's not like it it's not like every bit of that disparity is uniform because because what you and and this chart here was in an article that I I just came across that that kind of speaks to this a little bit. Um and it basically shows the uh even just since the fourth quarter of 2019 the ascension of uh personal outlays you know consumer spending basically by group even just the top 20% you can see it's far outpaced the rest of the demographics right so consumer spending has disproportionately been um by the upper echelon if we looked at the top 10% or top 1% it would be even even much more extreme than that but um you know, for for the the bottom rungs or the even the middle class or middle rungs of society. They're just scraping by to to make ends meet for just basic living necessities. We're not talking about uh discretionary spending on on on stuff that is nice to have. And perhaps no better place, and you just alluded to this, Adam, uh to to look to is in the housing market. This is a a chart that Nick Girley, who you've oftentimes had on your channel from uh Reenture, put out and it basically shows the cost to rent versus the cost to buy versus, you know, visa via mortgage cost and you see this huge disparity. Now, first and foremost, even the cost of renting has gone through the roof, right? So, it's not like renting has become easy for folks. Um and but the cost to buy has in no small part fueled by interest rate suppression of the last you know obviously we've seen higher rates lately and that's why we're starting to see the the housing market start to to fracture and the real estate market start to fracture but this is a a long-seated problem that that was not overnight in the making and it's not going to be overnight in the resolution but there are some practical things I was talking to my I've got two young adult sons they're both fully employed thank thankfully they've worked hard. Um, and my younger son lives at home with us, right? He's he's got a a 50 plus hour a week job. He he electively works overtime. Some he works in a specialty machining company. They do specialty machining. He's a CNC machine operator. Um, he lives at home. Um, right. Does he really want to live at home? No. Um, but it's it's a wise, sensible choice for a lot of young people to be making. We make him, you know, he's a full citizen in our house. he's not, you know, a free lunch in the sense that, you know, we expect him to contribute and he does helpful things around the house, but we had a chat last night about, hey, dad, when it does come time to me to to move out, I, you know, it seems to me that it just seems like a waste of money to go rent and I want to start looking for something that I can buy. And, you know, I pulled this chart up and looked at it with him and said, "Look, you know, look what happens here. There are times where this this equation gets really distorted and it's not your fault. It's not your generation's fault. It's it's beyond your control." Uh but but these things tend to correct themselves and they tend to correct themselves in in in very uh profound ways and maybe we're seeing a start of that. This is a a chart that came out today. This is showing uh the average days on the market for a typical home under under contract and in July that number peaked up to 43 days on average. You can see this trend here the last bunch of years we're back to the levels that were not last seen until uh you know 2015. So there are some signs that there's some some kind of reconciliation going on here to these extremities, but they don't happen overnight. And in the meantime, you know, this this uh social fabric is is tense, right? And and uh you know, so there's a couple chart charts that I thought would would great charts just on that that last one. Um so if you are wondering, you know, if and when that imbalance is going to start correcting, um highly recommend you watch the video that's coming out this Sunday with Melody, right? housing analyst Melody, right? Uh because she believes that correction is is happening. Um we're still in the early stages of it. We've got some really painful years ahead of us in the housing market. Um but she gets very specific as to the reasons why. So if that's something you're interested in, make sure you catch that interview with with uh Melody. Um you know, John, I also talked to housing analyst Ivy Zelman earlier this week. Um we talked specifically about that chart that you just showed about the the high cost of of owning versus renting right now. Now, Ivy did say um somewhat similar to to Melody that um it is starting to become a buyer market in more and more markets across the country. So, we we are starting to see a correction in the housing market underway. And both Melody and Ivy, I think for the first time in in many years, both agree that that 2025 will be a down year for housing prices nationally, which we haven't seen in a long time. We haven't seen a down year in a long time. So they feel that they both feel that gravity is going to start winning this year. Um but what uh what Ivy was saying is is what's interesting in the housing market right now is it is more expensive to buy than rent given that chart uh said but you actually can buy can find pretty good deals now in new homes which are actually for the first time in a very long time. It's very aarent. it is cheaper to buy a new home now than it is to buy an existing home. Um, which doesn't make a lot of sense, but when when you realize what's going on, the new home market is showing you where the housing market needs to go, which is these uh builders, they're building the homes and they've got to sell them, right? Because an unsung sold home is no value to them. They're realizing to move that inventory, they've got to give mortgage uh buy downs, they've got to give other types of concessions, price and otherwise. um that make the homes a substantially better value right now towards existing homes. So, you know, that's a very telling um data point that says, hey, this is where overall home prices are going to have to go uh to start clearing this inventory, especially as more and more inventory starts coming onto markets. So, you got all that going on. Um uh you know, so I talk about the difference between short-term and long-term. Let me talk about the short term for a moment. So, uh, if you have so much spending, you know, we're still a 70% consumer-driven economy, uh, consumer spending driven economy. Um, if so much of that spending is being done by the the top 20%, right, as your chart showed, John, um, yep. Their spending really matters uh to uh economic growth going forward. And if there's a cooling off in their spending, that has a much bigger impact on GDP than a cooling off in spending from the the bottom 50%. Um, and we are starting to see some signs that the the high-end consumer for the first time in a long time is starting to tighten the purse strings. I don't want to I don't think yet we're seeing anything that's calamitous. Uh but we're, you know, we've definitely been seeing some um disappointing sales for a lot of luxury brands, things like that. Um you know, we are starting to see uh housing prices start to weaken here. And you know the uh and we are seeing um uh equity prices you know kind of at all-time highs but in ways that that you have talked about you know with me that um are very indicative of sort of latestage rally signs. Um so as the markets correct, as housing corrects, um you're going to see a negative wealth effect and that is likely going to impact the top 20% more um than the bottom 80% simply because the top 20% own way more assets, right? So what's interesting is is you know this wealth divide can can narrow one of two ways. you know, it can narrow because we decide to start prioritizing Main Street over Wall Street and wages go up and and the labor starts doing better than capital. Honestly, John, even despite the new administration's lip service to that, I don't necessarily see that I I don't see us entering a new era for the, you know, wonderful era for the the general worker. I'd love for that to happen, but but I'm going to wait until I see it before I believe it. But we could have a market correction. We could have a recession that brings asset price values better into balance. Now, is that going to close this wealth gap? No. But it might it might, you know, at least the growth of the 1% running away from from the folks we're seeing in the near term. And the reason why I'm kind of harping on this is we're just seeing lots of signs right now that there could be a period of negative wealth effect for this top this upper echelon. And what that means for you on the lower end, if you're not in that top 10 percent, is that you better prepare for lower prices in your 401k, you better be prepared that, you know, companies might start laying people off at a at a more violent rate than they currently have been so far this year. Um, so, you know, again, may maybe good for us that the wealth gap doesn't grow as much in the short term, but maybe bad for a lot of people in the sense that that's going to hit the bottom half a lot more than it's going to hit the top half. So, I just want to underscore that so that we can just be prepared for what may happen here. Um, of course, we can talk about things that could could change in the longer term. But before I get there, let me take a breath. John, I'll give it to you and then we'll go back to you. Mike, anything to say about the sort of, you know, near-term be a little prepared if we get what we wish and the top 20% doesn't do as well as they're they've been doing, but the knock-on effects for the rest of us might not feel that good either. Yeah. Yeah. And that that really gets to the heart of why I think you have this channel, Adam, and we do what we do is, you know, what can we do about it, right? What can we do for real people to help them not just be a a um a consequence of the system, right? How how do we help collateral damage of whatever happens? Yeah. How can we help them gain agency and control what they can control and you know make the most of what they've been able to build for themselves and and and and make their pos their situation as good as possible despite some of these things being stacked against them. So first and foremost like you know even though one might not have $10 million most folks have you know learned the idea of saving some and and you know having some of their hard work you know uh saved in financial assets. Well, you know, the best way to to get ahead certainly when you get in late stage markets that are at all-time high valuations, not not just extreme valuations, literally all-time high. Let's let's not mince words. And and those are very poor short-term retirement indicators, but they have dramatic historical relevance in terms of what the likely returns over say the next decade are likely to be. So, so taking a protective approach, taking a a less risky approach when when you get the conditions, you don't need to have a lot of money to have that mindset. You could have $10,000 and that $10,000 still every bit as important to you because it's hard earned and you you sacrifice to save it. You might as well uh take some actions to protect it and then when things are more conducive to solid follow-through and sustainable returns, absolutely take the risk then. But those are, you know, whether you have 10,000, a million or 10 million, those are all things that one can and should be doing. Thinking about playing a little bit more defense right now or a lot more defense as the case might be. Um, what else can you do? I mean, you know, there are so many ways that we have been seduced to be part of this machine. And I think about um college for example. you know, earlier this year there was some stat or I guess this summer there were some stats out about, you know, the the jobless rate of recent college graduates and there's some distinction I think there between male and female and who knows what's behind that. Maybe male counterparts of ours are a little bit more laxidasical than their, you know, than their female peers. The point being is that this idea of you know uh taking on uh anything and everything you can to get that college education especially the more prestigious the school the better and going into debt you know don't don't jump on that bandwagon the you know we we keep hearing about the you know the likelihood of AI displacing many jobs you know certainly don't ignore that you know there's a lot of hype behind that but also don't go out you know fall over yourself to to uh in debt indenture yourself uh uh for what might be decades to to go and I'm speaking to parents and students here. Y you know there there are many different ways to to to do this. You know you can go to community college, you can go into trades, you can you know start a you know try and start an entrepreneurial business but the point is just make sure lifestyle is consistent with your means. that is the single most important thing you can do and and that's something you can control to a large degree that that's not someone else's policy or or you know kind of distortion of the economy. These are these are all things that you know we think are really really important in this kind of cycle this phase of the turning as we fourth turning as we we we like to call it and Neil Hal of course coined the term um those are real life things that are hard to do because we're on this conveyor belt but they're very important things that one should be mindful about so so many great points in there and Mike I am coming to you here in just a minute um uh and the word you mentioned I think is really important here is agency right is it's it's easy to kind of look at some of these big macro trends and and just feel like it's hopeless, right? Um a and maybe society it might be too late to to change some of these trajectories until we enter some real pain that forces us to start doing things differently as a society, but you as an individual have the ability to change your behavior today uh towards behaviors that will serve you even better in the future. Um and uh so the the the schooling example is a great example of that. What one other one that I'll talk about more in future videos coming up here is um uh there's a a woman I'll be interviewing in a couple months named Meg Jay who has one of the most popular TED talks of all time talking about how um there's this narrative that the 30s are the new 20s that you don't have to really get serious about your life until you get to 30 and you can spend your 20s just kind of flitting around and sampling from the dim sum of life and kind of having fun and making memories and stuff like that. and she basically says that is hogwash and uh the 20s are the time to be setting yourself up for success in life and and she'll explain why in this this TED talk video. Um but again, you know, just great examples of ways in which we if if you know you're a Gen Zer watching this or if you're a Gen Xer or a boomer watching this, you can you can help guide your kids to be making better decisions today. And they might be decisions that are quite contrary to what have been prevalent over the past 20 plus years. To your point, John, maybe getting the most expensive degree from the most prestigious university may not actually be the right thing to do going forward in the new type of economy that's coming on and the changes that are going to happen whether it's with AI or whether it's where you know uh the government is placing its its uh priorities going forward. So anyways, there's that whole agency element there and um you know things like uh think of the agency as a spectrum too. So like I talked about converting your labor to capital, right? So this is really, you know, one thing you can control is, okay, how can I live even more within my means, take more of what I earn or or or work to create multiple streams of income beyond just the one I have right now and start putting that away and and socking that, you know, into into your capital account. Now, really important point, John. I can work hard to get an incremental $10,000 and put it in my capital account and that helps. But if that were just to stay in $10,000 over the next 30 years, well, it would be losing a lot of purchasing power. And that's one of the things we've talked a lot about on this channel is how the loss of purchasing power of fiat currency highly likely to continue from here. Uh maybe even at an accelerating rate. So you've got to not just put more more money away into your capital account, you've got to figure out how to manage it. So at a minimum you keep pace with that devaluation and hopefully you can actually get ahead of it and that's where compounding interest and you know all sorts of things can help you build incremental wealth over time have your money start making money for you right but that's not going to happen in and of itself that's something that is a result of a plan and then executing well against that plan and so I just again want to underscore what you said earlier John which is you know people should look at their financial advisor as like a personal wealth trainer, right? Like just like I go to a personal fitness trainer every week. Um, you know, I can't just work out once a year. It's something I got to keep at it and be consistent and disciplined about. It's the same thing with your money, right? You've got to come up with a plan. You've got to keep updating that plan given what's going on in your life, giving it what's going on with the markets and in the greater economy, and then working that and iterating it and changing it when need be as conditions change. And so um you know if you are if you are not a very successful DIY investor with a long track record of having been so highly recommend most people you know get yourself a financial adviser but more importantly like avail yourself of the expertise of that adviser. Do the financial planning do the sensitivity analysis. Answer the question how many years at my current you know um in my current situation will it take for me to hit my financial goals? Am I happy with that? Do I want to try to hit those goals sooner? Do I need to put more away? Do I need to get a a stronger return than what I'm currently getting? And if so, how much risk does that mean I'm going to have to take on? And what are the implications of that? There's just an awful lot of that kind of agency here that um is available to people, but they've got to seize the initiative and drive it on themselves. So, okay, I'll get off my soap box. Mike, coming back to you. Um, first off, anything you want to add to what what John said and then I want to ask you some long-term questions about sort of, you know, four forth turning type questions? I think you guys both made some very good points. John talked about reducing risk and lifestyle choices. Those are good points. I'm going to say a few things that aren't um that that are going to seem obvious and that are not easy to do, but if you want to uh if you want to benefit like the 1% have benefited now and in the future, take a look at what they do. And these are not easy things to do. But the obvious things that I can say are things that I've we've we've all encountered here at New Harbor, the people that we work with. Where do people find their wealth? Entrepreneurship. you know, at least once in your life, try entrepreneurship if you can. That's not an easy thing to do. But the top 1% are by and large entrepreneurs. So, um, if you can do it, if you can think about it, if you have the ability to take that risk, then consider it or andor encourage your kids to do it. Entrepreneurs are the wealthy in this country. So, if you can if any which way you can, if you can start a business, think about it. The very wealthy have their money and assets. Well, that's easier said than done as well. If you don't have any money, you can't put them at assets, right? But if you have the ability to do so over time to accumulate assets, it makes sense. If you start early and you start uh in your life and you start acquiring income properties and then use debt to pay them off over a lifetime, that's a business that you can have when you're retired. Depends upon where you are in your life cycle. Now, what makes it really difficult right now is that to own assets is very hard because they're so darn expensive. And so I have to say all of this with a caveat. Be very careful about what assets you do buy. Maybe the best thing to do is to raise cash for the next downturn. And frankly, I think that for a lot of people that is probably the right thing to do. The old tea bill and chill trade, wait for a big stock market drop, wait for assets to drop in price. But at these thoughts that you should have are long-term thoughts over the rest of your life. Think about ways that you can be an entrepreneur. Think about ways that you can buy assets in the future. So, it's a very difficult time because as we said earlier, it's a psychological time. On one hand, I'm telling you to play the game if you can buy assets and be an entrepreneur. But at the same time, I'm admitting that we're in the final acts of a fourth turning, probably the final five years. And everything is directed towards this fake wealth effect. And so, a lot of people we talk to just want to disengage from the game. So, it's like, do I play the game? Do I disengage from the game? Which one is right? It's almost like you got to try to do both. Play the game to some extent, but realize that a lot of this is fake and we are being targeted psychologically and we want you to survive the crisis of the fourth earning which hasn't happened yet. That'll probably start with the kickoff of a stock market crash and the climax which has not happened yet. Those two things should happen over the next 5 years. So look to play the game very long term. right now. If you com try to, you know, either partially or completely disengage from the game, I can't blame you. Uh we're here, we're we're available and here to talk with you, no matter which you choose to do, even whether it's one or both or neither. But uh we talk all day long with people, help them through these psychological um difficult times. Okay? And just to be clear too, because a lot of the viewers here are, you know, Gen Xers and boomers, um, you can talk to people, those people about their specific situations and what they should do, but you can also give them counsel about how do I help my children as they're beginning to launch into adulthood. You know, how can I help them set things up so that they'll be positioned better than the average kid jumping into the world? Correct. Absolutely. I mean, a lot of our a lot of our clients are older, you 60 65 years and up, and they have enough money no matter what happens, you know, uh and and certainly they're concerned about u things that that are going to happen during the climax of this fourth earning, but they're by and large more and more worried about their children and helping their children get a leg up and preserving a legacy for their children. Absolutely. were available to talk to people about those things all day long and I believe we're uniquely equipped to do so because we have been tested tried and tested through the fire so to speak um you know talking out about this bubble uh that we're living through the the central banking bubble and we've certainly been early we've admitted that a hundred times but I don't think we're wrong and so people are going to need somebody to lean on particularly if they're not in this business particularly if they don't have the experience of going through this. Um, and so we're here to help. We're help we're here to help people with those issues and I think we're uniquely available to do that. Okay. Well, look, I I just want to start concluding um by referencing this video that I watched the other day and it was sort of a man on the street video where he was um stopping people walking by and just saying, "Hey, how much debt do you have?" And uh it was every bit as bad as you guys are probably thinking. Um you know I would say the average answer was somewhere between 50 to $150,000. Uh and and this was not people were not including their mortgages in this. So this is either student debts uh car loans, credit card debts, things like that. And um you know I think I said earlier like it's it's it it you can kind of understand people's psychological reaction to this data we're talking about where it's kind of like a giving up um or I almost call this like a doom spending where it's not necessarily that they're going out and buying jet skis and stuff like that though some definitely are um but it's just a sense of like um it doesn't matter this this is like I feel so disadvantaged anyways that you know, I'm not even really going to pay attention to it. And most people when asked, you know, I've got $140,000 debt and that's $100,000 student loans and a 40,000 car loan. Yeah. The guy doing the interview was like, and that doesn't worry you. And they're like, h, you know, whatever. Money comes, money goes, or you know, I'm just not going to worry about it yet. Um, there were a few young women who were like, well, I'm just going to marry rich, right? Which, okay, good luck on that, but that's not going to work for everybody. Um, but uh, you know, that's a very easy trap to fall into. Um, and especially I think even easier for for younger adults as they're launching in life to fall into because they're already feeling like they're behind the eightball. They're already feeling like things are too far out of reach for them. And at the same time, the credit industry is still throwing credit at them. You know, please take these extra credit cards. you know, you deserve to spend money on yourself type of deal or colleges, hey, you need to get that pricey degree from this big brand university uh to get ahead in life, even though, like you said, John, the data is increasingly showing that that helps fewer and fewer people going forward. So, um I guess where I'm just going with all this is, you know, you you've got to really work on a resisting those emotional siren songs of capitulation or hey, it doesn't matter or hey, everybody else is doing it. why shouldn't I do it? Right? And um you want to assume that proactive agency so that even if that's where sort of society continues hurdling, you individually are not. You're bucking that trend and hopefully going to be much better off. So um Mike, I'll ask you this last question and then we'll we'll wrap things up. Um so long-term, you know, personally, one man's opinion, I I have a hard time seeing this continue forever, right? I do believe that it's probably going to continue for a lot longer than we would like that this this expansion of the wealth divide because as if indeed we become more of an eyesshaped economy, those that have all the wealth and the advantage, they reinvest that to protect their advantage, right? They're the people that support political campaigns, they're the people that, you know, uh have politicians on speed dial and whatnot. They will do everything they can to protect their advantage. So that will continue going until some societal breaking point. And that breaking point might be political. You know, maybe we start electing people that promise to put in wealth taxes, confiscatory wealth taxes on the top 1% or whatnot. We'll see. Um or it could be something, you know, uh more drastic than that. I hate to use the word, but maybe more violent. You know, we've definitely seen time and time again in history where when enough of the populace loses hope in the social contract, you know, that that that's where real unrest starts to happen. So, anyways, I'm just curious any sort of parting thoughts about, you know, where this really ends up in the long run. You're right, Adam, that these things go on longer than we think, and it already has gone on a heck of a lot longer than we thought it could, as we've said that a lot of times. I really do think the fourth turning construct is very helpful here. Nothing in theory is exact. Nothing about history predicts the future perfectly. But the fourth turning has been pretty spot-on if you take a look at um you take a look at the writings of of Neil How. But this fourth turning started back in 2008. I I agree with Neil how on that. And so they last around 20 years. That would bring us to around 2028, 2030, maybe 2032. The bottom line is we're probably in the in the last 5 years of this cycle. So that tells us a lot. Taking a look at just how sorry to interject, but just to add this so you can continue. It is true that that's how much they usually last for, but the activity in a fourth turning isn't evenly distributed. So the the turmoil and the change is backloaded. So even though we might only have 30% of it left or whatever, 25% of it left time-wise, change- wise, it might still be the majority of change we're going to see in the turning still ahead of us. Yeah. So many people ask, you know, when do these things change? And like you just said, well, nothing happens for years and then everything all at once happens. So you get a step change. So a lot is likely going to happen during these next 5 years or so. We don't know exactly, you know, when or what, but we know a lot of things are going to change that are unexpected. We know that this is a climactic time that is full of risk and full of, you know, all hands- on deck effort. Think of what happened back in World War II. So that'll likely happen soon. We don't know exactly what it will look like. stock stocks are at least three times overvalued. That means stocks could fall by twothirds and still not be undervalued. We don't know what that'll look like or when that'll happen or even if that will happen. So, just don't be caught blindsided. Prepare yourself psychologically for what is likely to come. Just realize that it's going to be a very, very different time than the last 10 or 15 or 20 years. and that all you really have to do is take a look at some of these charts that we show every week or the people like us show every week of the debt and the income divide and everything else that's unsustainable. We become so numb to it because it's been going on so long. But when all of that matters all of a sudden, all kinds of unexpected things can happen and will happen in the next few years in my opinion. All right. Well, well said. And look, I just want to, you know, end here on that word agency, which is that we all have individual agency and definitely your destiny is going to depend on how much agency you take to try to set yourself up for the best outcome going forward into whatever the future holds here. Um, and as I said earlier, you know, the the whole like hate the game, not the player thing. Um, I don't like that saying, but I think it is largely true here. And um for people that maybe that feels, you know, uncomfortable like, oh, I got to be part of a system I don't believe in um to to take care of myself, think of it like the old airplane, you know, recommendation. Put your your oxygen mask on first before you help others. Meaning, if you put yourself in a position to be a positive resource um for those that you care about in your life and then your wider community, you know, then you can play a constructive role in trying to help society get to a better place through all of this. But you can't if you're not first in a position uh of of, you know, security and and hopefully prosperity. So, you know, whichever way you want to look at it, you know, put your own oxygen mask on first. Focus on your agency in this story. Um, and a great way to do that is, you know, update your plans, your financial plans for the future, and update your strategy for how you're going to execute those plans by the time you want to hit them. Again, like I said, if you're if you've got a good DI record, DIY record on that, great. You know, can just focus on it and and you know, put in the work. If you don't, then focus your efforts on finding the right financial quarterback to do that for you. And I'm impartial who you work with, just as long as they're good. Um, but if you want to get some help from one of the financial adviserss that Fal Money endorses, these are the firms you see with me on this channel week in and week out, perhaps even John and Mike and their team there at New Harbor Financial, you can definitely set up one of those free consultations by filling out the very short form at thoughtfulmoney.com. And as a reminder, these consultations are totally free. There's no commitment to work with these firms. It's just a free service they offer to help as many people as possible. Um, but like I said, whoever you're working with, make sure it all starts with putting together a good financial plan. Uh, and then obviously a really good way uh to inform yourself on how to make better decisions around your money is to attend the thoughtful money fall online conference. Again, as a reminder, that's Saturday, October 18th. Uh again, if you can't watch live, don't worry. Everybody who registers uh will get a copy of the replay video of the full event. And to sign up for that and lock in the lowest early bird price right now, just go to thoughtfulmoney.com/conference. And again, if you are a premium subscriber to our Substack, use that code to get the additional $50 off. John and Mike, thanks so much, guys. This was a great discussion. Look forward to seeing you guys next week. Thank you, Adam. Always a pleasure. We'll see you next week. Thank you, Adam. All right, and everybody else, thanks so much for watching.
The Wealth Gap Is Accelerating Out-Of-Control | Lacy Hunt, Judy Shelton, Darius Dale & others
Summary
Transcript
What you can see here is that the top 10% is running away from the bottom 90% but that itself is dwarfed by the top 1% just skyrocketing higher in terms of the wealth that's concentrating in the pockets of the very few up at the top there. This is a societal challenge is probably the nicest way I can say it. Some might call this a societal calamity. [Music] Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Tagert. Welcoming you back here for a special video. Um, in this video, we're going to talk about a chart that's making its way around the internet right now. I'll put it up here real briefly. Um but this is a chart of uh net personal wealth and it shows you the breakdown of that uh between the top 1% the top 10% uh the bottom half of uh society and then the bottom 50th to 90th percentile this is all in the US and what you can see here is that the top 10% is running away uh from uh the bottom 90% but that itself is dwarfed by the top 1% % uh just skyrocketing higher in terms of um the wealth that's concentrating in the pockets of the very few up at the top there. Um this is a societal challenge is probably the nicest way I can say it. Some might call this a societal calamity. Um you've heard me talk folks uh many times on this channel about the K-shaped recovery that we've largely been in since CO. Um the the K shape is to capture the top end of the K is is really you know the top part of society that's continuing to do quite well. The larger bottom part of the K is supposed to signify you know the bottom 80% maybe as this chart shows bottom 90% really increasingly starting to fall behind or increasingly continuing to fall behind. Um I have of late started warning about how this trajectory if left unchecked uh may bring us to what I consider to be a lowercase Ishaped economy. Um meaning you know a small number of people at the top where the wealth and the advantage has fully concentrated and then the rest of society is the bottom half of the eye just again getting increasingly left behind. You look at a chart like the one I just showed definitely shows you that we are h hurtling right now towards that eye-shaped destiny. Um so it raises a bunch of questions. What does that mean for society? Is this a fatal comp plea or can we reverse this? Uh and probably more importantly more relevant to all you viewers. What can we do as individuals to make sure that if there is going to be a continuing wealth gap that we at least individually try to fall on the right side of that uh to protect ourselves and those we love about and then obviously what could we do to help society. Uh before we do that though I just want to make an official announcement here. Um the um fall online conference for thoughtful money is now officially uh open and ready for ticket purchase. So, this is going to be the conference itself is going to be on Saturday, October 19th. It's an all-day event. If you've watched our previous online conferences, you know what to expect. If you haven't, folks, it is a fantastic day packed with over 10 hours of presentations and live Q&A with the best minds in money in the markets. This year is going to be absolutely no exception. Uh the faculty that we're building for this looks on track to be our best ever. Uh just to throw out a couple of names, uh Lacy Hunt will do the kickoff keynote as he has done in our previous conferences. Um if you have seen them folks, you know that these are graduate level seminars uh in uh macro and monetary matters. Um this year again will be no exception. Lacy is going to walk through a bunch of new charts uh explaining where he sees things going on the macro side of things. Um he'll be followed by James Grant, the godfather of interest rates. very important this year where we're now starting to looks like we're going to be switching to an era of uh Fed rate cuts coming over the rest of this year and early next year. Um we'll have Judy Shelton joining us for the first time ever. Um as you know, Judy has been uh you know in the running uh for a Fed seat. Um she is a highly influential adviser to the current president's economic team. Um uh they'll be followed by uh Darius Dale uh on his latest market update. Uh we'll have Michael Howell giving us the latest update on liquidity. We'll have uh Grant Williams and Stephanie Pomboy together uh giving their latest macro and market outlook. Uh we've got a number of other people that are scheduled as well. I'm going to reserve those names uh to announce later on as we get closer to the event. But as you can tell folks, this is going to be a phenomenal event. Don't worry if you can't actually watch the conference live on Saturday, October 18th, because replay videos of the entire event, all the presentations, all the live Q&A will be sent to everybody who buys a ticket for uh the conference. So, if you're interested in learning more about the conference and hopefully in signing up for it, um you want to go to thoughtfulmoney.comconference. And right there now, you can buy tickets at the lowest price we'll be offering. that's at the early bird price discount. So, make sure you go there sooner rather than later to lock in that early price. And if you're a premium member of our Substack, um then make sure you look at the email you should have received from me that contains the discount code to use to get an additional $50 off of that low early bird price discount. I want to make sure that everybody is paying the lowest amount for this conference that they possibly can. And honestly, if you want to gain the system and just sign up for the uh the premium Substack uh for a month, uh it cost $19 to get the $50 discount. You get to pocket the $31 uh benefit to you. I don't mind if you gain the system like that. Like I said, I just want everybody to get the lowest price possible for this conference that they can. So folks, if you can run, do not walk to thoughtfulmoney.com/conference and lock in your ticket for the upcoming October 18th conference. Uh all right. So to talk about that chart of uh the growing wealth divide in this country and what it means uh I'm joined by the lead partners from New Harbor Financial, John Lodra and Mike Preston. Gentlemen, thank you for joining me for this very important discussion. Great to be with you, Adam. Thanks for having us. And uh we're going to chime in here. We we have had the privilege of joining you, our team, in your annual conference as a as a sidekick, if you will, but mostly what we get out of it is a tremendous amount of knowledge and learning. You know, we we tune in all day and we're able to uh gain the perspectives of all your distinguished guests and it's always a great uh intensive day for us. So, we highly encourage folks that are are watching this to to think about u signing up to attend. It's a great great event, great uh informationpacked day. you won't be disappointed. And thank you, Adam. So, we'd be happy to talk about this chart. Maybe you want to bring it up again, but um the growing wealth divide is a is a really sore spot. Uh you know, it's a really sore point that I think is very important to understand where we are in this fourth turning. We we're coming out of really several decades, and it's seriously probably going back to the early 80s here. We're going on four decades of just continual monetary expansion and every small hiccup in the markets or in the economy has been papered over with more and more money printing. And so that chart that you just showed a minute ago talked about the growing wealth divide. And this is really all because of the focus on the wealth effect. Here it is. Yeah. The net personal wealth. And really take a look at what happened since the year 2000. And that's where things started to go parabolic. For the top 1%, they've seen their wealth triple over that period of time, you know, from um from uh millions of dollars, 5 million millions of trillion um five 5 trillion 15 trillion over that period of time. And the rest of the group hasn't nearly kept up. I'm going to show another couple charts if that's okay with you, Adam, to to share something uh to show some similar things. And this is from a person that we know that is your good friend, Charles Hughes Smith. So this is Charles Hughes Smith blog of two minds.com. He does some great writing and I try to tune in there as often as I can. But uh when we were chatting a little bit offline about this growing wealth divide and decided to talk about this today, I took a look at Charles Hugh Smith blog and saw a recent piece here that he wrote on August 8th or 9th. I think it was. This shows and right off the St. Louis Fed's uh website, this is the the Federal Reserve's data, the net worth held by the top 1%. If you take a look, and this is actually in millions of dollars, but you can this you can illustrate this any which way you want, and the chart looks similar. It could be percentage of wealth or whatever. This happens to be millions of dollars. Since the year 2000, the top 1% have increased their net dollars or their gross dollars, I should say, five times since the year 2001. And I think the Fed knows this and I think the Fed looks at this as a necessary evil that this has to happen because our debt federally, which is at 37 trillion and growing by close to 3 trillion a year, there's really no way to ever pay that off. And the only way for this to continue to have a good outcome is for prices to go up across the board. So here's what happened to the top 1%. Now, this isn't a new story, although every single time we have a recession and the Fed comes in with more stimulus, the top 1% have an increase in their wealth every single time. Whereas, if you scroll down a little bit more in the article, for instance, to this chart, you'll take a look at share of gross domestic income compensation of employees. This is workers. What does wage and salaries look like? Well, take a look here. Since 1980, there've been a steady decline from about 50% of total um gross domestic income down to about 42% or so. And so, you know, Charles H. Smith writes here that start of globalizations and and after COVID stimulus, you saw workers percentage compens compensation peak and then decline. So, these are trends that are continuing because of the Fed's just insistence on targeting the wealth effect. And maybe they don't have a choice. I guess I have to admit that maybe there is no alternative. But the truth of the matter is that the underlying social tension and potential conflict that can come out of this is something to to be concerned about. It's not going to matter until it matters. It's not going to matter until the market crashes and 401ks crash and that type of thing, but then it will matter in a big way. And all of the the years that we've been talking about this, people like you and Charles Smith have been talking about this and we here at New Harbor will finally matter. So, great point, Mike. Um, thank you for bringing up those charts and yeah, um, huge fan of Charles, great friend of mine. And folks, if you're not familiar with his website yet of.com, you should definitely go there and add that to your reading list, your regular reading list. Um, so, uh, there's a bunch of questions that are begged by this. Um, and one, Mike, is, you know, is this not a bug of the current system? Has it become a feature, right? Um, where it's actually something that is is, you know, being engineered by those that are running the system. And as we've heard, you know, from many administrations, uh, the Fed and the whatever administrations, you know, in power at the time is always trying to engender a wealth effect, right? And and in their mind, it's a wealth effect to get spending flowing and the economy running. Um, it doesn't necessarily care where how the wealth is distributed. It just wants uh wealth in the system to be able to get out there and kind of, you know, grease the economy. Uh, and of course in the Reagan era, you know, we started to hear the term trickle down economics, which is, hey, let's feed the people at the top and that will, you know, hopefully get down to the people at the bottom. But as long as the people at the top feel flush, they're going to go out there and invest in the financial markets, they're going to buy real estate, they're going to, you know, uh, make capital investments, uh, that, you know, help the economy. And and that has that has worked. I mean it's kept things going but the price of it has been this increasing disparity between the halves and the have nots and as you said there you know increasingly capital has been what has benefited um not labor right it's come at the expense of labor um sorry I can see you want to say something so I'll let you jump in well I'll say it quickly if I can it is absolutely a feature and it really did start back in Reagan's time as I mentioned a few minutes ago it's been going on for 40 years but accelerating uh parabolically I guess is the word not asmmptotically parabolically it's been it's been accelerating and it has to keep going and this is a feature everywhere you look in the economy we talk all day long to people about their assets including their homes and it's more common than not that somebody says gee I'm selling a home now for 1.5 million or 2 million I bought it 10 years ago for 400,000 you know it happens everywhere young people are mad they can't get in older people are glad that they have those assets assets. But think about what the towns and cities are doing. They are re um valuing their tax base so that their revenues are going up at the same rate 2 3 4x over the last 5 10 years and they can't survive on a penny less. So the whole system needs this. When we had the last big test and that was the great financial crisis in 2008 2009 central banks around the world had to push rates to zero for over 10 years just to recapitalize the system. That wasn't fair either. that stole $3 trillion out of the pockets of savers roughly. So, we're not even talking about the unfairness of that, you know, but the unfairness of the wealth effect is real. And the bottom 50% did not take the ride up in the same way that the top 10% did. And certainly not the same way the top 1%. And as you talked about earlier, we we would encourage your viewers to think about how to protect yourself from that. As we continue this conversation, I think we can come up with some ideas. But it is inherently unfair and we've been talking about it forever, more than 10 years. But we do believe we've got a date with destiny destiny and that we're entering soon the crisis and the climax phase of this forth turning that we're living through. We want people to protect themselves from that. It's just unfair and we just felt like a little bit of a rant today was was due after talking about these charts. Well, it I mean look, it's it's a very real thing whether you like it or not, right? And so, you know, there's a short-term question here and a long-term question, right? The short-term question is is okay, as long as the game is continuing, you know, how do we as individuals make ourselves less vulnerable to ending up on the wrong side of this wealth transfer, right? And I think part of that is, you know, capital is important, right? So, if capital is favored over labor, you know, try to convert your labor, right? The money that the income that you're making, convert that into capital that is being invested, right? and try to get, you know, the magic of compounding working in your favor. But, you know, it's sort of like don't hate the player, hate the game, right? You know, we can say, look, we don't like the game, but as long as it's the driving force, you want to be using it to your advantage, not having it work against you, right? So, we can talk about, you know, strategies for there. And of course, this is one of the main reasons why I connect people with financial adviserss like you, because you get you can help them be better at managing their capital, right? Then the long-term question is well you know what does this mean for society right so um another chart that's been making its way around the internet that I put up a lot here I won't so I won't put it up again but it shows the percentage of 30 year olds who were both married and homeowners and in 1950 that was above 50% now here in 2025 it's like 13% right so this goes back to your point Mike about younger generations just getting priced out right just not being able to afford this stuff and so you mentioned the fourth turning earlier, Mike, you know, the trajectory that we're on here as assets get hoovered up more and more by a fewer a smaller and smaller group of people, this eye-shaped economy that I fear we're on our way to, you know, that's an aristocracy. That's almost a feudal society, right? And and history shows when you get to a certain level of wealth imbalance, you start having revolt, unrest, revolution perhaps. Um, and so, you know, a big key long-term question that gets raised looking at this is just how much time does this have left in front of it before things really start breaking society. So, anyways, two really big questions. John, I'll let you chime in here. Um, anything to add to what Mike and I have already said and I think you already have a couple of other supplementary charts too, correct? Yeah, sure. No, this is very timely and um you know there there actually was an article today that quoted Mark Xandandy from S&P and he he he pointed out that um the top even just the top 10% which isn't even quite as extreme as the the top 1% if you look at consumer spending just 30 years ago the top 10% comprised only about 10% of of the consumer spending which was almost like you know what you might expect in a in a fair society right Today it's approaching 50%. It it's it's been over th those three decades, which is not that far. We're talking about just before the dawn of the internet, right? We're not, you know, I was I was an adult by then, right? And dating myself here, but that's not that long ago. And and to see in such a short period of time, and it's no coincidence that much of that period of time has been defined by really really um uh intervening Fed policy, interest rate policy, and whatnot. and that and and they have been reactions to asset price bubbles and the rescue of asset price price bubbles. So, you know, Mike already did a good job with you to talk about that, but let me just share, you know, where this one one thing that I think is is missed in some of those statistics is that it's not a a linear degree of of disparity. And what I mean by that is, you know, we can look at these these big, you know, chasms between the top 10% and the 50 or bottom 10%. But it's not like it it's not like every bit of that disparity is uniform because because what you and and this chart here was in an article that I I just came across that that kind of speaks to this a little bit. Um and it basically shows the uh even just since the fourth quarter of 2019 the ascension of uh personal outlays you know consumer spending basically by group even just the top 20% you can see it's far outpaced the rest of the demographics right so consumer spending has disproportionately been um by the upper echelon if we looked at the top 10% or top 1% it would be even even much more extreme than that but um you know, for for the the bottom rungs or the even the middle class or middle rungs of society. They're just scraping by to to make ends meet for just basic living necessities. We're not talking about uh discretionary spending on on on stuff that is nice to have. And perhaps no better place, and you just alluded to this, Adam, uh to to look to is in the housing market. This is a a chart that Nick Girley, who you've oftentimes had on your channel from uh Reenture, put out and it basically shows the cost to rent versus the cost to buy versus, you know, visa via mortgage cost and you see this huge disparity. Now, first and foremost, even the cost of renting has gone through the roof, right? So, it's not like renting has become easy for folks. Um and but the cost to buy has in no small part fueled by interest rate suppression of the last you know obviously we've seen higher rates lately and that's why we're starting to see the the housing market start to to fracture and the real estate market start to fracture but this is a a long-seated problem that that was not overnight in the making and it's not going to be overnight in the resolution but there are some practical things I was talking to my I've got two young adult sons they're both fully employed thank thankfully they've worked hard. Um, and my younger son lives at home with us, right? He's he's got a a 50 plus hour a week job. He he electively works overtime. Some he works in a specialty machining company. They do specialty machining. He's a CNC machine operator. Um, he lives at home. Um, right. Does he really want to live at home? No. Um, but it's it's a wise, sensible choice for a lot of young people to be making. We make him, you know, he's a full citizen in our house. he's not, you know, a free lunch in the sense that, you know, we expect him to contribute and he does helpful things around the house, but we had a chat last night about, hey, dad, when it does come time to me to to move out, I, you know, it seems to me that it just seems like a waste of money to go rent and I want to start looking for something that I can buy. And, you know, I pulled this chart up and looked at it with him and said, "Look, you know, look what happens here. There are times where this this equation gets really distorted and it's not your fault. It's not your generation's fault. It's it's beyond your control." Uh but but these things tend to correct themselves and they tend to correct themselves in in in very uh profound ways and maybe we're seeing a start of that. This is a a chart that came out today. This is showing uh the average days on the market for a typical home under under contract and in July that number peaked up to 43 days on average. You can see this trend here the last bunch of years we're back to the levels that were not last seen until uh you know 2015. So there are some signs that there's some some kind of reconciliation going on here to these extremities, but they don't happen overnight. And in the meantime, you know, this this uh social fabric is is tense, right? And and uh you know, so there's a couple chart charts that I thought would would great charts just on that that last one. Um so if you are wondering, you know, if and when that imbalance is going to start correcting, um highly recommend you watch the video that's coming out this Sunday with Melody, right? housing analyst Melody, right? Uh because she believes that correction is is happening. Um we're still in the early stages of it. We've got some really painful years ahead of us in the housing market. Um but she gets very specific as to the reasons why. So if that's something you're interested in, make sure you catch that interview with with uh Melody. Um you know, John, I also talked to housing analyst Ivy Zelman earlier this week. Um we talked specifically about that chart that you just showed about the the high cost of of owning versus renting right now. Now, Ivy did say um somewhat similar to to Melody that um it is starting to become a buyer market in more and more markets across the country. So, we we are starting to see a correction in the housing market underway. And both Melody and Ivy, I think for the first time in in many years, both agree that that 2025 will be a down year for housing prices nationally, which we haven't seen in a long time. We haven't seen a down year in a long time. So they feel that they both feel that gravity is going to start winning this year. Um but what uh what Ivy was saying is is what's interesting in the housing market right now is it is more expensive to buy than rent given that chart uh said but you actually can buy can find pretty good deals now in new homes which are actually for the first time in a very long time. It's very aarent. it is cheaper to buy a new home now than it is to buy an existing home. Um, which doesn't make a lot of sense, but when when you realize what's going on, the new home market is showing you where the housing market needs to go, which is these uh builders, they're building the homes and they've got to sell them, right? Because an unsung sold home is no value to them. They're realizing to move that inventory, they've got to give mortgage uh buy downs, they've got to give other types of concessions, price and otherwise. um that make the homes a substantially better value right now towards existing homes. So, you know, that's a very telling um data point that says, hey, this is where overall home prices are going to have to go uh to start clearing this inventory, especially as more and more inventory starts coming onto markets. So, you got all that going on. Um uh you know, so I talk about the difference between short-term and long-term. Let me talk about the short term for a moment. So, uh, if you have so much spending, you know, we're still a 70% consumer-driven economy, uh, consumer spending driven economy. Um, if so much of that spending is being done by the the top 20%, right, as your chart showed, John, um, yep. Their spending really matters uh to uh economic growth going forward. And if there's a cooling off in their spending, that has a much bigger impact on GDP than a cooling off in spending from the the bottom 50%. Um, and we are starting to see some signs that the the high-end consumer for the first time in a long time is starting to tighten the purse strings. I don't want to I don't think yet we're seeing anything that's calamitous. Uh but we're, you know, we've definitely been seeing some um disappointing sales for a lot of luxury brands, things like that. Um you know, we are starting to see uh housing prices start to weaken here. And you know the uh and we are seeing um uh equity prices you know kind of at all-time highs but in ways that that you have talked about you know with me that um are very indicative of sort of latestage rally signs. Um so as the markets correct, as housing corrects, um you're going to see a negative wealth effect and that is likely going to impact the top 20% more um than the bottom 80% simply because the top 20% own way more assets, right? So what's interesting is is you know this wealth divide can can narrow one of two ways. you know, it can narrow because we decide to start prioritizing Main Street over Wall Street and wages go up and and the labor starts doing better than capital. Honestly, John, even despite the new administration's lip service to that, I don't necessarily see that I I don't see us entering a new era for the, you know, wonderful era for the the general worker. I'd love for that to happen, but but I'm going to wait until I see it before I believe it. But we could have a market correction. We could have a recession that brings asset price values better into balance. Now, is that going to close this wealth gap? No. But it might it might, you know, at least the growth of the 1% running away from from the folks we're seeing in the near term. And the reason why I'm kind of harping on this is we're just seeing lots of signs right now that there could be a period of negative wealth effect for this top this upper echelon. And what that means for you on the lower end, if you're not in that top 10 percent, is that you better prepare for lower prices in your 401k, you better be prepared that, you know, companies might start laying people off at a at a more violent rate than they currently have been so far this year. Um, so, you know, again, may maybe good for us that the wealth gap doesn't grow as much in the short term, but maybe bad for a lot of people in the sense that that's going to hit the bottom half a lot more than it's going to hit the top half. So, I just want to underscore that so that we can just be prepared for what may happen here. Um, of course, we can talk about things that could could change in the longer term. But before I get there, let me take a breath. John, I'll give it to you and then we'll go back to you. Mike, anything to say about the sort of, you know, near-term be a little prepared if we get what we wish and the top 20% doesn't do as well as they're they've been doing, but the knock-on effects for the rest of us might not feel that good either. Yeah. Yeah. And that that really gets to the heart of why I think you have this channel, Adam, and we do what we do is, you know, what can we do about it, right? What can we do for real people to help them not just be a a um a consequence of the system, right? How how do we help collateral damage of whatever happens? Yeah. How can we help them gain agency and control what they can control and you know make the most of what they've been able to build for themselves and and and and make their pos their situation as good as possible despite some of these things being stacked against them. So first and foremost like you know even though one might not have $10 million most folks have you know learned the idea of saving some and and you know having some of their hard work you know uh saved in financial assets. Well, you know, the best way to to get ahead certainly when you get in late stage markets that are at all-time high valuations, not not just extreme valuations, literally all-time high. Let's let's not mince words. And and those are very poor short-term retirement indicators, but they have dramatic historical relevance in terms of what the likely returns over say the next decade are likely to be. So, so taking a protective approach, taking a a less risky approach when when you get the conditions, you don't need to have a lot of money to have that mindset. You could have $10,000 and that $10,000 still every bit as important to you because it's hard earned and you you sacrifice to save it. You might as well uh take some actions to protect it and then when things are more conducive to solid follow-through and sustainable returns, absolutely take the risk then. But those are, you know, whether you have 10,000, a million or 10 million, those are all things that one can and should be doing. Thinking about playing a little bit more defense right now or a lot more defense as the case might be. Um, what else can you do? I mean, you know, there are so many ways that we have been seduced to be part of this machine. And I think about um college for example. you know, earlier this year there was some stat or I guess this summer there were some stats out about, you know, the the jobless rate of recent college graduates and there's some distinction I think there between male and female and who knows what's behind that. Maybe male counterparts of ours are a little bit more laxidasical than their, you know, than their female peers. The point being is that this idea of you know uh taking on uh anything and everything you can to get that college education especially the more prestigious the school the better and going into debt you know don't don't jump on that bandwagon the you know we we keep hearing about the you know the likelihood of AI displacing many jobs you know certainly don't ignore that you know there's a lot of hype behind that but also don't go out you know fall over yourself to to uh in debt indenture yourself uh uh for what might be decades to to go and I'm speaking to parents and students here. Y you know there there are many different ways to to to do this. You know you can go to community college, you can go into trades, you can you know start a you know try and start an entrepreneurial business but the point is just make sure lifestyle is consistent with your means. that is the single most important thing you can do and and that's something you can control to a large degree that that's not someone else's policy or or you know kind of distortion of the economy. These are these are all things that you know we think are really really important in this kind of cycle this phase of the turning as we fourth turning as we we we like to call it and Neil Hal of course coined the term um those are real life things that are hard to do because we're on this conveyor belt but they're very important things that one should be mindful about so so many great points in there and Mike I am coming to you here in just a minute um uh and the word you mentioned I think is really important here is agency right is it's it's easy to kind of look at some of these big macro trends and and just feel like it's hopeless, right? Um a and maybe society it might be too late to to change some of these trajectories until we enter some real pain that forces us to start doing things differently as a society, but you as an individual have the ability to change your behavior today uh towards behaviors that will serve you even better in the future. Um and uh so the the the schooling example is a great example of that. What one other one that I'll talk about more in future videos coming up here is um uh there's a a woman I'll be interviewing in a couple months named Meg Jay who has one of the most popular TED talks of all time talking about how um there's this narrative that the 30s are the new 20s that you don't have to really get serious about your life until you get to 30 and you can spend your 20s just kind of flitting around and sampling from the dim sum of life and kind of having fun and making memories and stuff like that. and she basically says that is hogwash and uh the 20s are the time to be setting yourself up for success in life and and she'll explain why in this this TED talk video. Um but again, you know, just great examples of ways in which we if if you know you're a Gen Zer watching this or if you're a Gen Xer or a boomer watching this, you can you can help guide your kids to be making better decisions today. And they might be decisions that are quite contrary to what have been prevalent over the past 20 plus years. To your point, John, maybe getting the most expensive degree from the most prestigious university may not actually be the right thing to do going forward in the new type of economy that's coming on and the changes that are going to happen whether it's with AI or whether it's where you know uh the government is placing its its uh priorities going forward. So anyways, there's that whole agency element there and um you know things like uh think of the agency as a spectrum too. So like I talked about converting your labor to capital, right? So this is really, you know, one thing you can control is, okay, how can I live even more within my means, take more of what I earn or or or work to create multiple streams of income beyond just the one I have right now and start putting that away and and socking that, you know, into into your capital account. Now, really important point, John. I can work hard to get an incremental $10,000 and put it in my capital account and that helps. But if that were just to stay in $10,000 over the next 30 years, well, it would be losing a lot of purchasing power. And that's one of the things we've talked a lot about on this channel is how the loss of purchasing power of fiat currency highly likely to continue from here. Uh maybe even at an accelerating rate. So you've got to not just put more more money away into your capital account, you've got to figure out how to manage it. So at a minimum you keep pace with that devaluation and hopefully you can actually get ahead of it and that's where compounding interest and you know all sorts of things can help you build incremental wealth over time have your money start making money for you right but that's not going to happen in and of itself that's something that is a result of a plan and then executing well against that plan and so I just again want to underscore what you said earlier John which is you know people should look at their financial advisor as like a personal wealth trainer, right? Like just like I go to a personal fitness trainer every week. Um, you know, I can't just work out once a year. It's something I got to keep at it and be consistent and disciplined about. It's the same thing with your money, right? You've got to come up with a plan. You've got to keep updating that plan given what's going on in your life, giving it what's going on with the markets and in the greater economy, and then working that and iterating it and changing it when need be as conditions change. And so um you know if you are if you are not a very successful DIY investor with a long track record of having been so highly recommend most people you know get yourself a financial adviser but more importantly like avail yourself of the expertise of that adviser. Do the financial planning do the sensitivity analysis. Answer the question how many years at my current you know um in my current situation will it take for me to hit my financial goals? Am I happy with that? Do I want to try to hit those goals sooner? Do I need to put more away? Do I need to get a a stronger return than what I'm currently getting? And if so, how much risk does that mean I'm going to have to take on? And what are the implications of that? There's just an awful lot of that kind of agency here that um is available to people, but they've got to seize the initiative and drive it on themselves. So, okay, I'll get off my soap box. Mike, coming back to you. Um, first off, anything you want to add to what what John said and then I want to ask you some long-term questions about sort of, you know, four forth turning type questions? I think you guys both made some very good points. John talked about reducing risk and lifestyle choices. Those are good points. I'm going to say a few things that aren't um that that are going to seem obvious and that are not easy to do, but if you want to uh if you want to benefit like the 1% have benefited now and in the future, take a look at what they do. And these are not easy things to do. But the obvious things that I can say are things that I've we've we've all encountered here at New Harbor, the people that we work with. Where do people find their wealth? Entrepreneurship. you know, at least once in your life, try entrepreneurship if you can. That's not an easy thing to do. But the top 1% are by and large entrepreneurs. So, um, if you can do it, if you can think about it, if you have the ability to take that risk, then consider it or andor encourage your kids to do it. Entrepreneurs are the wealthy in this country. So, if you can if any which way you can, if you can start a business, think about it. The very wealthy have their money and assets. Well, that's easier said than done as well. If you don't have any money, you can't put them at assets, right? But if you have the ability to do so over time to accumulate assets, it makes sense. If you start early and you start uh in your life and you start acquiring income properties and then use debt to pay them off over a lifetime, that's a business that you can have when you're retired. Depends upon where you are in your life cycle. Now, what makes it really difficult right now is that to own assets is very hard because they're so darn expensive. And so I have to say all of this with a caveat. Be very careful about what assets you do buy. Maybe the best thing to do is to raise cash for the next downturn. And frankly, I think that for a lot of people that is probably the right thing to do. The old tea bill and chill trade, wait for a big stock market drop, wait for assets to drop in price. But at these thoughts that you should have are long-term thoughts over the rest of your life. Think about ways that you can be an entrepreneur. Think about ways that you can buy assets in the future. So, it's a very difficult time because as we said earlier, it's a psychological time. On one hand, I'm telling you to play the game if you can buy assets and be an entrepreneur. But at the same time, I'm admitting that we're in the final acts of a fourth turning, probably the final five years. And everything is directed towards this fake wealth effect. And so, a lot of people we talk to just want to disengage from the game. So, it's like, do I play the game? Do I disengage from the game? Which one is right? It's almost like you got to try to do both. Play the game to some extent, but realize that a lot of this is fake and we are being targeted psychologically and we want you to survive the crisis of the fourth earning which hasn't happened yet. That'll probably start with the kickoff of a stock market crash and the climax which has not happened yet. Those two things should happen over the next 5 years. So look to play the game very long term. right now. If you com try to, you know, either partially or completely disengage from the game, I can't blame you. Uh we're here, we're we're available and here to talk with you, no matter which you choose to do, even whether it's one or both or neither. But uh we talk all day long with people, help them through these psychological um difficult times. Okay? And just to be clear too, because a lot of the viewers here are, you know, Gen Xers and boomers, um, you can talk to people, those people about their specific situations and what they should do, but you can also give them counsel about how do I help my children as they're beginning to launch into adulthood. You know, how can I help them set things up so that they'll be positioned better than the average kid jumping into the world? Correct. Absolutely. I mean, a lot of our a lot of our clients are older, you 60 65 years and up, and they have enough money no matter what happens, you know, uh and and certainly they're concerned about u things that that are going to happen during the climax of this fourth earning, but they're by and large more and more worried about their children and helping their children get a leg up and preserving a legacy for their children. Absolutely. were available to talk to people about those things all day long and I believe we're uniquely equipped to do so because we have been tested tried and tested through the fire so to speak um you know talking out about this bubble uh that we're living through the the central banking bubble and we've certainly been early we've admitted that a hundred times but I don't think we're wrong and so people are going to need somebody to lean on particularly if they're not in this business particularly if they don't have the experience of going through this. Um, and so we're here to help. We're help we're here to help people with those issues and I think we're uniquely available to do that. Okay. Well, look, I I just want to start concluding um by referencing this video that I watched the other day and it was sort of a man on the street video where he was um stopping people walking by and just saying, "Hey, how much debt do you have?" And uh it was every bit as bad as you guys are probably thinking. Um you know I would say the average answer was somewhere between 50 to $150,000. Uh and and this was not people were not including their mortgages in this. So this is either student debts uh car loans, credit card debts, things like that. And um you know I think I said earlier like it's it's it it you can kind of understand people's psychological reaction to this data we're talking about where it's kind of like a giving up um or I almost call this like a doom spending where it's not necessarily that they're going out and buying jet skis and stuff like that though some definitely are um but it's just a sense of like um it doesn't matter this this is like I feel so disadvantaged anyways that you know, I'm not even really going to pay attention to it. And most people when asked, you know, I've got $140,000 debt and that's $100,000 student loans and a 40,000 car loan. Yeah. The guy doing the interview was like, and that doesn't worry you. And they're like, h, you know, whatever. Money comes, money goes, or you know, I'm just not going to worry about it yet. Um, there were a few young women who were like, well, I'm just going to marry rich, right? Which, okay, good luck on that, but that's not going to work for everybody. Um, but uh, you know, that's a very easy trap to fall into. Um, and especially I think even easier for for younger adults as they're launching in life to fall into because they're already feeling like they're behind the eightball. They're already feeling like things are too far out of reach for them. And at the same time, the credit industry is still throwing credit at them. You know, please take these extra credit cards. you know, you deserve to spend money on yourself type of deal or colleges, hey, you need to get that pricey degree from this big brand university uh to get ahead in life, even though, like you said, John, the data is increasingly showing that that helps fewer and fewer people going forward. So, um I guess where I'm just going with all this is, you know, you you've got to really work on a resisting those emotional siren songs of capitulation or hey, it doesn't matter or hey, everybody else is doing it. why shouldn't I do it? Right? And um you want to assume that proactive agency so that even if that's where sort of society continues hurdling, you individually are not. You're bucking that trend and hopefully going to be much better off. So um Mike, I'll ask you this last question and then we'll we'll wrap things up. Um so long-term, you know, personally, one man's opinion, I I have a hard time seeing this continue forever, right? I do believe that it's probably going to continue for a lot longer than we would like that this this expansion of the wealth divide because as if indeed we become more of an eyesshaped economy, those that have all the wealth and the advantage, they reinvest that to protect their advantage, right? They're the people that support political campaigns, they're the people that, you know, uh have politicians on speed dial and whatnot. They will do everything they can to protect their advantage. So that will continue going until some societal breaking point. And that breaking point might be political. You know, maybe we start electing people that promise to put in wealth taxes, confiscatory wealth taxes on the top 1% or whatnot. We'll see. Um or it could be something, you know, uh more drastic than that. I hate to use the word, but maybe more violent. You know, we've definitely seen time and time again in history where when enough of the populace loses hope in the social contract, you know, that that that's where real unrest starts to happen. So, anyways, I'm just curious any sort of parting thoughts about, you know, where this really ends up in the long run. You're right, Adam, that these things go on longer than we think, and it already has gone on a heck of a lot longer than we thought it could, as we've said that a lot of times. I really do think the fourth turning construct is very helpful here. Nothing in theory is exact. Nothing about history predicts the future perfectly. But the fourth turning has been pretty spot-on if you take a look at um you take a look at the writings of of Neil How. But this fourth turning started back in 2008. I I agree with Neil how on that. And so they last around 20 years. That would bring us to around 2028, 2030, maybe 2032. The bottom line is we're probably in the in the last 5 years of this cycle. So that tells us a lot. Taking a look at just how sorry to interject, but just to add this so you can continue. It is true that that's how much they usually last for, but the activity in a fourth turning isn't evenly distributed. So the the turmoil and the change is backloaded. So even though we might only have 30% of it left or whatever, 25% of it left time-wise, change- wise, it might still be the majority of change we're going to see in the turning still ahead of us. Yeah. So many people ask, you know, when do these things change? And like you just said, well, nothing happens for years and then everything all at once happens. So you get a step change. So a lot is likely going to happen during these next 5 years or so. We don't know exactly, you know, when or what, but we know a lot of things are going to change that are unexpected. We know that this is a climactic time that is full of risk and full of, you know, all hands- on deck effort. Think of what happened back in World War II. So that'll likely happen soon. We don't know exactly what it will look like. stock stocks are at least three times overvalued. That means stocks could fall by twothirds and still not be undervalued. We don't know what that'll look like or when that'll happen or even if that will happen. So, just don't be caught blindsided. Prepare yourself psychologically for what is likely to come. Just realize that it's going to be a very, very different time than the last 10 or 15 or 20 years. and that all you really have to do is take a look at some of these charts that we show every week or the people like us show every week of the debt and the income divide and everything else that's unsustainable. We become so numb to it because it's been going on so long. But when all of that matters all of a sudden, all kinds of unexpected things can happen and will happen in the next few years in my opinion. All right. Well, well said. And look, I just want to, you know, end here on that word agency, which is that we all have individual agency and definitely your destiny is going to depend on how much agency you take to try to set yourself up for the best outcome going forward into whatever the future holds here. Um, and as I said earlier, you know, the the whole like hate the game, not the player thing. Um, I don't like that saying, but I think it is largely true here. And um for people that maybe that feels, you know, uncomfortable like, oh, I got to be part of a system I don't believe in um to to take care of myself, think of it like the old airplane, you know, recommendation. Put your your oxygen mask on first before you help others. Meaning, if you put yourself in a position to be a positive resource um for those that you care about in your life and then your wider community, you know, then you can play a constructive role in trying to help society get to a better place through all of this. But you can't if you're not first in a position uh of of, you know, security and and hopefully prosperity. So, you know, whichever way you want to look at it, you know, put your own oxygen mask on first. Focus on your agency in this story. Um, and a great way to do that is, you know, update your plans, your financial plans for the future, and update your strategy for how you're going to execute those plans by the time you want to hit them. Again, like I said, if you're if you've got a good DI record, DIY record on that, great. You know, can just focus on it and and you know, put in the work. If you don't, then focus your efforts on finding the right financial quarterback to do that for you. And I'm impartial who you work with, just as long as they're good. Um, but if you want to get some help from one of the financial adviserss that Fal Money endorses, these are the firms you see with me on this channel week in and week out, perhaps even John and Mike and their team there at New Harbor Financial, you can definitely set up one of those free consultations by filling out the very short form at thoughtfulmoney.com. And as a reminder, these consultations are totally free. There's no commitment to work with these firms. It's just a free service they offer to help as many people as possible. Um, but like I said, whoever you're working with, make sure it all starts with putting together a good financial plan. Uh, and then obviously a really good way uh to inform yourself on how to make better decisions around your money is to attend the thoughtful money fall online conference. Again, as a reminder, that's Saturday, October 18th. Uh again, if you can't watch live, don't worry. Everybody who registers uh will get a copy of the replay video of the full event. And to sign up for that and lock in the lowest early bird price right now, just go to thoughtfulmoney.com/conference. And again, if you are a premium subscriber to our Substack, use that code to get the additional $50 off. John and Mike, thanks so much, guys. This was a great discussion. Look forward to seeing you guys next week. Thank you, Adam. Always a pleasure. We'll see you next week. Thank you, Adam. All right, and everybody else, thanks so much for watching.