Our federal government has been borrowing and spending money at an alarming rate for many years. Uncle Sam has literally been doling out billions and trillions of dollars like it was pocket change. I think the magnitude of this spending deserves a closer look.
Let’s consider the numbers in terms of time travel. A thousand seconds equal 16 minutes and 40 seconds; a timeframe easy to comprehend. Bump the time up to a million seconds and you’ve got 12 days. Increase it to a billion seconds and it’s 31.5 years.
I think most of us can grasp 31.5 years but when you get to a trillion seconds, you’re time traveling into the distant future because a trillion seconds are 31,688 years.
Numbers alone can often be difficult to visualize. Just adding a single zero can increase the amount exponentially. And the numbers being discussed in our nation’s capital are so far beyond comprehension that I believe a reality check is in order.
I’ve often wondered how many of our elected officials have taken and passed a math test. As a financial advisor, I can learn a lot about a person’s knowledge of money and comfort with investments by reviewing their tax returns.
For years, the media wanted to take a peek at former President Trump’s returns. Although they haven’t been released, he frequently mentioned them on various business networks. Stating the obvious, he’s heavily invested in commercial real estate.
Listening to him, he appears to have a fairly good understanding of our complex tax code, including items such as capital gains and depreciation. I was a bit surprised that he claimed to have minimal stock holdings.
With much fanfare, President Biden just released his most recent tax return. I’m thinking he may have repositioned some investments prior to the election. Because, as an advisor, if I were trying to determine what kind of investment experience he had, I would say minimal based on his tax returns. Most of his income came from Social Security, pension and an annuity, which all in all, is fine.
But what surprised me is how much bank interest he earned, and there do not appear to be any investments in equities. Knowing that we’re in a low interest rate environment and based on his bank interest earned, you’d guess that he has around $2 million sitting in various bank or credit union accounts.
Both former President Trump and President Biden are similar in that they appear to support big government spending. Also in common is that both are considered senior investors according to the standards established by financial regulators. Simply stated, the regulations require that advisors be extra cautious when interacting with the vulnerable elderly and stay clear of high-risk investments. Senior citizens are more susceptible to being taken advantage of by unscrupulous advisors.
Personally, some of my sharpest clients are defined as seniors and are quite astute with numbers. For some time, they’ve expressed concern about the financial burdens we’re putting on the shoulders of their children, grandchildren and great grandchildren.
I just wish our elected officials would bring mathematics into the equation, have a reasonable grasp of investments and, most important, be responsible stewards of our tax dollars. How far into the future can you spend money you don’t have?
Do you know someone who would like to meet with a financial advisor?
Ken Morris 248.952.1744
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Ken is a registered representative of LPL Financial. Securities and financial planning offered through LPL, a Registered Investment Advisor, member FINRA/SIPC. Ken is Vice-President of the Society for Lifetime Planning in Troy. All opinions expressed are those of Ken Morris. LPL and Society for Lifetime Planning are independent companies. Investing involves risk including loss of principal. No strategy assures success or protects against loss.