How Does Your Financial Life Change After The Presidential Election?

Hillary Clinton versus Donald Trump
Credit: DonkeyHotey/flickr

Some people have told me they plan to retire abroad if Donald wins. Others have said they'll just stop working so much if Hillary gets elected. Will you be doing anything differently if Hillary or Donald gets elected now that Donald is going to be the POTUS for the next four years? I'm curious to know whether your life changes at all after the presidential election.

My post college work career started during Bill Clinton's second term and ended during Barrack Obama's first term. Irrespective of who was president, I was focused on aggressively saving and investing as much as possible in order to escape the rat race early.

I didn't obsess about whether our president would do the right thing for the people because I believe everything is rational long term. Politicians crave power; therefore in order to stay in power, they must do right by the majority. I just focused on what I could control. You should too. 

Taking Things Easier Post Obama

Obama started his presidency on January 20, 2009 in the middle of the financial crisis. Six months later I started Financial Samurai as a way to cope with the chaos.

Because I figured income taxes would eventually get raised under a Democratic president, I worked as hard as I could to make as much money as possible until I left work in 2012. The severance was an enticing catalyst to leave, but so was the likelihood of higher income taxes.

We all knew 2012 would be the last year someone could pay the highest marginal federal income tax of 35% because Obama signed a two-year Bush tax cut extension on December 6, 2010. The strategy at the time was to front load as much of your income as possible before the top marginal income tax rate went up by 4.6% to 39.6% in 2013.

Paying 39.6% federal income tax + 12.3% for California income tax + 6.2% FICA tax (on your first ~$108,000) meant paying a total marginal tax rate of over 52%. Can you imagine the government taking more from you than you could keep for yourself? That's crazy! I was already burned out from working 60-80 hours a week for 13 years, so higher taxes gave me one more reason to take it down a notch.

Top US Federal Income Tax Rates And Capital Gains Tax rates

It has felt amazing not having to work for a living since 2012. Even though my income was much lower for two years, my happiness surged due to a lower tax bill and much greater free time. It would be one thing if the government was efficient and used 100% of my money to help the sick and poor. But when you read things like $6.8 trillion in fudged government accounting, there's no way our tax dollars are being put to optimal use.

The Obama administration has helped me live a more balanced life. If taxes were still the same under the Bush administration, chances are high I would have kept on working for six more years until my original goal of age 40. If I did, I'd probably be less healthy, more stressed out, and a much saltier person.

By raising taxes, Obama ironically allowed me to pay way less taxes while also using more public resources. Almost every day I go for a walk in the botanical gardens or play tennis at a public park. I now have the time and financial strength to have lots of kids to send them to public schools too. I even learned how to start a more tax efficient lifestyle business through an S-Corp. When I was slaving away between the ages of 22-34, I had little time to enjoy much of anything, despite paying six figures in taxes each year.

Life has been great thanks to a strong economic recovery and a tax structure that disincentives people from working crazy hard, just hard enough.

What About The Future?

As I wrote in the past, to get rich we must try to predict the future.

If Hillary gets elected, it's business as usual. We'll have to watch out for other surprise tax legislation such as the Net Investment Income tax of 3.8% introduced in 2013 for singles/married couples who make over $200,000/$250,000. Other than potentially higher taxes, it doesn't seem like many of our lives will be affected by the government. I don't think my lifestyle will change one bit.

If Donald gets elected, it's hard to know what to expect. Due to uncertainty, the stock market might sell off by 5% – 15% just like what happened post Brexit. As time passes, there will be more clarity from Donald on his various policies, and the market should recover and begin to trade on fundamentals again.

One of my biggest concerns now that Donald is elected is that my life will change for the worse due to my own greed. Donald will probably try and lower taxes for everyone, especially since Republicans control the Senate and House. As a result, I'll be highly tempted to find full-time work again and more consulting gigs to boost my total income. I'll also start publishing more content on Financial Samurai to try and generate more traffic and revenue. I may even try and start a bigger business that piggybacks off the Financial Samurai content. All this means an extra 40-50 hours of work a week!

Going back to working 60 – 80 hours a week as a middle-aged man sounds very depressing. But it's very hard to pass up a deal, even if the deal is just letting you keep ~5% more of your money each paycheck.

Whoever wins, my hope is the government will continue to be dysfunctional and gridlocked so the doers of the world can keep on doing what they've always been doing. I'm not going to let a president get in the way of my freedom!

Update: Trump wins! Amazingly, Republicans now control the Presidency, Senate, House, and will choose a new Supreme Court Justice. Let's hope Donald can start work on healing our nation quickly, at least for our investment's sake.

Which candidate did you or will you vote for in the 2016 presidential race? (poll is completely anonymous)

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Related:

Fight For Financial Freedom Every Single Day

Build Passive Income To Avoid Being Someone's Whipping Boy

The Top 1% Net Worth Amounts By Age

Readers, tell me how you think your life will change under a Donald presidency? 

81 thoughts on “How Does Your Financial Life Change After The Presidential Election?”

  1. Unfortunately, this election could cost me a lot of money. I’m only in my 30s but I am disabled and unable to work full time. I receive SSDI, which has not had a cost of living increase in 2 years and could easily be reduced under the current government. Of course, my SNAP benefits are also at risk.

    But by far my biggest concern is healthcare. I already pay about $500 per month for treatments that insurance doesn’t cover. If the GOP privatizes Medicare (Ryan has already proposed this) and rolls back pieces of Obamacare including the Medicaid expansion, I would lose my health insurance. Even though insurance companies would likely still be required to cover those of us with pre-existing conditions, they could hike up the rates like they did before Obamacare. It could easily cost me thousands of dollars per month. But what’s the alternative? To die? To become bedridden? No thank you.

    I’m glad that I have savings from when I was working, but how long will those last? SSDI doesn’t even cover my rent in a simple 1 bedroom apartment. It won’t cover health insurance under privatized Medicare. So for me, this election has a huge impact.

  2. It’s really interesting to read this AFTER the election. I’m curious that you would let your self-described greed get you back into work. But, I trust that you know yourself. I’m less interested in the great deals that may be available, because I’m worried about the impacts on my clients who are very wary of the uncertainty. We shall see.

  3. NW target is $10m, or about $30k after-tax for myself, wife, and 1 future kid in Manhattan. I’m assuming that $12-14k in that amount is mortgage and still save about $5k most months. $350k for a family of 4 in Manhattan with a mortgage would be REALLY tough. You would need to live cramped and send them to one of the crappier public schools ($17k per month after-tax here is not good for kids). Either you pay up for a better neighborhood or send to private. Either way, it is about $3k per month per yr per kid after they turn 5 & other kid expenses.

    I get working harder if the tax rate drops from 44% to 15% as he has indicated. However, 3-5% shifts are really minor in the overall scheme of things, especially if you have a business, because businesses are hard to fine-tune anyways. I can’t reliably predict my revenue for next year within 10% as it is. It would be foolish for me to rest on my laurels, because in business, the tax rate is not the issue, it’s losing competitive advantage. For that reason, I work very hard. Also, working harder does not mean making more money, if you are building a scalable business. If and/or when my numbers triple, I will actually probably work less (in fact, that is the general direction it has been going).

  4. I can’t imagine there being too much of a change. I don’t like either of them, but I also don’t fear a Trump presidency. It’s not like presidents ever keep their campaign secrets anyway.

    Honestly, the only thing one could–and should–do is to continue living below their means, saving, investing in income producing assets, and growing their passive income streams. Financial freedom is always the best defense against uncertain macro environments, including an upset of a presidential election.

    Sincerely,
    ARB–Angry Retail Banker

  5. Black swan? Market has been interesting at the open.

    If you go back to work, are you thinking Wall Street again?

    Can someone please securitize reality TV stars? Their value just skyrocketed.

  6. I realize how under utilized my talent to see all the pieces, whereas majority of ppl can’t see it. I had a feeling Trump would win and supported him with posts starting summer last yr only to have them censored by fb and mainstream media comments. He would take the election cause ppl who graduated high school and can’t get nothing more than a long term part-time minimum wage job at a corporation with no coverage. Do you care, probably likely no? But I care for them.

    The ppl who graduated from non tech college degrees now working in restaurants or baristas who watch kim k and listen to kanye w e s t voted for the clinton. Ppl of color who experienced any white racism voted her, though it is only cause they’ve never also experienced racism shouted at them from other pp of color. Sad but I know many who voted for her cause they were bitter from racist white teasing a decade long ago. All ignoring clinton $250 million stolen in slightly over a decade, using non profit funds to fund chelsea’s wedding, bill clinton writes how terrible life is growing up with a dad yet his black son whose facial feature are the same as his was a deadbeat dad to his black arkansas son for TWO decades never visiting him or his mom personally but only having governor state troopers deliver a few presents during xmas each yr. My programmer friends voted for her cause they have daughters and ignore 100% the leveraged corruption the clinton turned an honorable justice system into a complete joke. My unbelievable successful businessmen friends voted her cause today’s ratio is 1:6 USA:India you can hire 6 of the same tech skill level in India for the price of one equivalently tech skilled American. I am surprised to discovered that not a single one of them, they cannot fathom an objective analysis into the presidency becoming very median in this area of their lives.

    They cannot understand or more importantly care about ppl who worked in factories. Y’all know factories that build or built appliances, cars, computers, phones, processed materials, clothes, plastics, drugs. I learned how they ignored all criminal elements in pursuit of some superficial personally relatable common goal out of a list of trivial goals presented by the Democrat party. I guess one reason why all my posts were never heated is because I will become a globalist very soon. But I voted President Trump cause I can understand the factory workers mad their medium income jobs are taken by China and Mexico. My small company soo soon to be medium sized intends to leverage hire very cheaply in India instead of here in the expensive West employee for profit. I have no other reason aside from purely more profit. I won’t spin it with a lie or fake reason why I hire Indians instead of Americans. I will do well under either it would never really affect my lifestyle. Another reason is cause everyone is soo greedy and I am not, the India hirings is merely a strong advantageous business move. I don’t have emotion attached to it. This is a small part why I can see so clearly what the majority can’t cause they’re really greedy. But I also learned there is little to no compassion, no empathy, no honor, no nationalism here by many successful and the college vocalist whose existence revolves around the pop culture of today.

  7. Well, I’m not from US, but my life has been seriously changed anyway. My country shares a border with Ucraine and also hosts part of NATO anti missile shield so we have a target placed on us.

    We’re screwed, since Trump obviously likes Putin and the war in Ucraine is only on hold right now. It could always flare up and I don’t believe Trump would give a rat’s ass if it engulfs my country as well.

    As such, I’m stockpiling gold and cash and looking into emigrating. In case you think this is an exageration, I would ask you what would you do if Nevada got invaded by Mexico and your president would say : “Weell, they’re losers who are not paying their fair share of the army bugget”. I bet good money that lots of people in California would flee the country as well.

    1. I’m sorry for your situation. I hope this doesn’t happen but my gut tells me you’re right. Congress could intervene or we could have WW3 too. Who freaking knows with this guy? Best wishes and if you choose to emigrate, I hope it all goes well.

  8. PatientWealthBuilder

    I’m watching the dow futures drop like a rock as Donald Trump picks up Florida, Ohio, North Carolina, and Georgia. I think the Stock Market was expecting a Clinton win and clearly it is reacting negatively to being surprised. I see it as a buying opportunity.

  9. The more the government takes the less I want to work. The less I work, the fewer employees I hire.

    Pretty simple

    So to answer your question, will this election change my lifestyle? absolutely not, but it will change potential employees lifestyle when its harder to find a good job because people like me aren’t willing to hire.

    Thanks, Bill

    1. Bill, I agree with you, but that is only half of the equation. I actually buy less stuff because taxes in my state are awful. I live in CT where we have one of the highest sales taxes, income taxes, and property tax rates all rolled into one lovely state. I’d love to go buy a house and a sports car, and I have more than enough money to do it, but when I think about the 10k a year in property taxes I’d have to pay for those things…I just don’t buy them.

      Unfortunately I can’t just move my job to a different state, but in the mean time I don’t know why I’d let this state hammer me in taxes when the alternative is to just save more, retire earlier, then move to another state where I can buy an equally nice house and equally awesome car if I want and pay a fraction of the taxes I’d have to pay now. I sometimes wonder how deep of a hole people will have to dig before they figure it out, but with the way things are going I’ve realized the average person just wants to keep digging that hole until it caves in on them. I’m making sure I have the financial means to walk away when that happens…luckily its much easier to escape a poorly managed state than it is country.

      1. Being that I’m from just above the poverty and move through the spectrum I can see more. When you’re a struggling and poor you need every penny just to pay the bills. As you move up the income ladder naturally you want to live a better standard of living so you spend your money and then end up going into debt (this seems to be the group that once they start making good money they don’t think about the rainy day sure to come – you can get yourself into real trouble here). If you can mentally move out that mindset that’s when you begin to start making financially smarter decisions.

        If you are poorer you see what others have and you want it but you fail to understand that much of it is obtained by using debt. Robert Kiyosaki said it best

        The Poor: They spend every penny they get (survival),

        The Middle Class: As they become more successful they use debt to buy liabilities that take money out of their pocket. They end up in the rat race.

        The Rich: Buy assets that pay for their liabilities

  10. Terry Pratt

    Where is this “strong economic recovery” to which you refer? Millions of Americans are not seeing it.

    1. There won’t be a strong economy especially with high taxes and high health care premiums. You can spend your money only one time and it won’t be circulating through the economy.

  11. Your First Million

    The only thing that we really have control over is our own personal economy. We have to do our best not to get discouraged over outside factors that we do not have control over and really focus on the things that we do have control over. Yes, each presidential candidate may have their own policies that can affect our daily lives, but there are more things that we can control ourselves that can have an even bigger impact on our lives. We need to take responsibility for ourselves and for our own financial futures and realize that almost all politicians are crooked and in it for themselves, republican or democrat… (yes maybe some much more crooked than others, not saying any names here). We need to be in it four ourselves and not be dependent on the government no matter which side of the isle you sit on. Self sufficiency is key.

    1. I agreed. All these empty promises. Taxes will only go up, never down. If it went down, it’s due to deficit spending without scaling back on military spending. In the past 3 decades, the only president that have a surplus when he left office was Bill Clinton. It was because he closed many navy and army bases across the country. Check out the congressional budget, it will provide many facts. The current situation in the US is not rosy, 1/3 of people on some kind of government assistances and 1/3 of people in public services. This leave 1/3 of people supporting 2/3 of the population. On top of that, our military budget is the total of the next 6 countries’ military budget combined – UK, Japan, Germany , France, China and Russia.

  12. The Green Swan

    I am VERY curious to see who will pull out the win tomorrow, but more so out of that sheer curiosity and not due to how the turnout will affect me financially. I am also VERY ready to stop receiving so many political mail pieces and no more TV ads!

  13. I wonder if people have considered that if Trump were to win the markets would drop because the market does not like uncertainty but being that stock prices are valued high it takes more money to buy dividend stock (income). If the stock market drops it would be a good time to buy and ride the stock market up (increasing net worth) at the same time buying income, if you buy dividend stock at lower prices. Thoughts?

  14. Most folks get up in the morning and go to work. That’s true in Cuba as well as 90 miles north. It’s the resulting standard of living that hard work will buy you and if you are able to make excess money to use to work for you that makes the difference.

  15. Why does either candidate want to win in 2016? For Trump, I think best case scenario is for him to win the popular vote and lose the electoral vote. This way, he can claim he won and get back to enjoying his life without the stresses of governing.
    I believe the economy or the market may tank in the next 4 years after the Fed start to increase rates and unwind its balance sheet. At the very least, it’ll probably cause a recession. Whoever is in the office will likely be blamed for it and become a 1 term president.

  16. I was once just above the poverty line but was never angry about rich people. We were taught to keep learning and trying, never hold a chip on our shoulder. My thought process lines up with yours. In short, I was in healthcare for 20 years always knowing there was a better way. I took a huge risk and started my company in the Bush years. I became a HENRY (High Earner Not Rich Yet). Because I never wanted to ever go back to healthcare I cautiously increase my standard of living and instead focused on putting money aside pre and post tax, slowly dipping my toe into stock. I didn’t pay attention to politics at the time. I was getting nailed with taxes and that was disheartening. And hearing Obama say make the rich pay more that caught my attention. What? Just because someone makes high income does not mean they are rich. That rhetoric I knew for a fact was misleading to gain the support of people who don’t know better to raise taxes and funnel more money to the government.

    As a result I really buckled in and instead of spending I hoarded more. I began to realize that it’s not how much you make, the type of income, it’s how much you keep and what you do with it. Working as hard as I was only to be taxed into oblivion is crazy! I was already burned out so higher taxes also gave me one more reason to take it down a notch.

    With the talk of lower taxes I did consider re-investing in my company but that would take a Trump win. This would have resulted in going back to full steam again and hiring more people but with Hillary saying she would raise taxes further down on the income scale I opted to stay status quo instead. So yes I agree, Obama and potentially Hillary encouraged me to refocus not on building a bigger business but to enjoy my time more.

    Hey, I got my time and time is the most valuable thing we have.

    1. GREAT comment, Elizabeth. You are correct on “high income rich”. There is probably a number where an extra 5/10/20 percent in taxes doesn’t matter (5M+?), but it’s a BIG deal taking extra amounts at 200-400k. Yes, that’s a lot of money, but it’s not RICH.

      That’s why the multi-millionaires and billionaires don’t mind more taxes. I used to not understand why they weren’t as offended as me. They ARE rich. 300-500k away from 5M is not the same as 50k away from 400k. It’s just not. A small business owner can do A LOT with 50k more money — invest in business or in savings. It’s a lot of money. Someone making 5M+ will probably never miss 500k.

      Mind you, I’m not saying 5M+ should pay more in taxes; I’m simply saying it’s not the same as someone making 400k. I believe taxes should be FLAT, and everyone should pay the same thing. Everyone should be contributing towards the country in some way.

      1. Understanding the difference between High income vs High net worth is basic stuff. Obviously some people don’t understand the difference and because they lack the knowledge politicians are able to mislead people into believing raising taxes on “income” makes the rich pay more. Then they scream bloody murder because a rich man was able to use the tax code to reduce his taxable income (just like all rich people do) so they can keep more of their money. It’s amazing that people can’t connect the dots.

        It is better to be low income and high net worth

    2. Elizabeth, I definitely agree with the balance between work and life being based heavily on what the government does. Ultimately I plan on retiring very early, and exactly when that will be is based mainly off 3 things…current tax rates, how much I’m entitled to from the government, and my nest egg(passive income). Its really quite simple…if taxes go up and the government gives out more “free” stuff, it means I’ll have less incentive to work and can retire with a smaller nest egg, which means I’ll pay less to the government over my life time and get more in benefits, which long term will be a net loss for the government.

      It just scares me how many people out there think doing exactly that will be a viable long term model for our country. I often just imagine what the country would be like if some of my fellow millennials were in charge and we had a universal basic income, paid for college, and universal healthcare…who the heck would want to work if everything was provided for you just by birthright and when you did show up for work you ended up with some insane 80% tax rate or something because someone has to pay for all that “free” stuff.

      I find this to be an interesting topic because when I was making 40k a year I thought if I was making 100k a year, I wouldn’t mind paying more in taxes. Problem is, now I’m clearing 100k a year and the extra taxes suck…so I’m certainly not going to point my finger at someone higher up the income ladder and say tax that person more, they won’t mind, because I’m sure it sucks for them as well. Everyone is going to have their tipping point…it seems like you have hit yours already, and although I haven’t hit mine yet I’ll certainly know when I get there.

      1. Actually we in a way do have universal basic income. It’s called welfare but welfare doesn’t give a good life and income limits to qualify are very low and if you do work to make a better way you lose benefits that is hard to make up for by working (in other words it keeps people discouraged from working and keeps them in a low income life style).

        Universal basic income is just a way of saying that they want the life of a hard working solid middle class person but they want it on someone else’s dime without effort on their own.

        Essentially you can say policies have discourage people on the bottom from working and now they are discouraging higher income from investing to grow which would have resulted in hiring people, then led to higher competition for employees, which would result in employees having to pay higher wages.

        Bottom line is people who buy into these policies aren’t thinking or they are so dug in to wanting things they didn’t work to earn they refuse to see the obvious.

        Greed is taking something for which you gave nothing of value in return.

    3. Great job Elizabeth! Sounds like we’ve lived similar experiences, although I was never just above the poverty line. Must feel sweeter to get to where you are now.

      I don’t mind living a more kick back lifestyle. Neither of us will regret having worked more when we are on our death bed.

      1. I’ve come to my conclusions through experience. People always complain they can’t put money aside but support high taxes, that always perplexed me. They don’t understand that the government uses the tax code to encourage behaviors they want yet they’ll attack people who use the tax code in their rhetoric to gain support for people who don’t know better. Real estate for example, government doesn’t want to be landlords so they give tax benefits to people who invest in real estate so they can rent to people who can’t afford to buy a house. I equate people who buy into the tax the rich rhetoric of higher taxes to that of someone going to a divorcee asking for marital advise.

        In business as I was working my butt off there were nay sayers all around and for anyone who wants better you have to ignore them. I was shocked to hear Obama and Liz Warren say I didn’t build that, again you have to ignore these types, we are back to asking asking a divorcee for marital advise.

        Yes it feels good to move up but gov puts road blocks in the way. Now that I am relaxing I’m having to care for an sick elderly mom who is just above the poverty line and can’t get any help for the so called “safety net” so I’m having to financially help. But in the end, if I was pushing to grow my business I wouldn’t be spending the time with her. So yes, time is the most important thing we have.

        Time is money and I refuse to give an unreasonable amount of my time away. I don’t understand the mentality where people think we would be encouraged to grow our business only to be forced give money away. The mentality is out there.

        Sorry so long, but so many thoughts from starting at the bottom to where I am now.

        1. More great stuff, Elizabeth. I have been surprised at some of the tax benefits related to real estate. It’s silly that the US is not an even playing field, and there are real advantages to real estate investing.

          In a normal business, I can’t save my money without paying taxes on it. In real estate, you can keep spending it buying more real estate (which is very close to being able to save it), and you keep putting off paying taxes on it — all the while getting depreciation of real estate. It’s almost a Ponzi scheme compared to other businesses, except the Ponzi money is going to you.

      2. The kids going to college, accruing debt, also perplex me. Are they going to college to make low income?

        1. If one is considering paying 100k for their kid to go to college, it’s almost a better plan to fund a retirement account for them. At the 7%/10 year doubling rate, 100k becomes 3.2M at 68.

          18 – 100k
          28 – 200k
          38 – 400k
          48 – 800k
          58 – 1.6M
          68 – 3.2M

          There are plenty of jobs where you can make an OK living, especially if you know the more you make the more taxes you pay. I get a chuckle thinking how all these FIRE folks are living a 25-50k a year, a million or two in assets, and paying little to no taxes, and super cheap, government assisted healthcare. I don’t blame them for gaming the system. If things don’t change, I’ll be doing the same soon.

          1. That’s where I’m heading too. I just got a letter from my healthcare insurance company telling me they are cancelling our insurance policy and offering a suggestion. Our rates

            prior to Obamacare was $450 a month with a $2,500 deductible,
            this year it was $800 a month now (separate policies $5k deductible)

            The cancellation letter is hey a policy where we will now pay over $1,100 a month, $5k deductible each. And we are supposed to be happy about this or we are racist?

            Financial Samurai wrote an excellent article about Obamacare – PLAN FOR HEALTH CARE SUBSIDIES. (Sam can you link to the article if it’s still posted). It is better to be high net worth and low income.

            1. Sam, it would be helpful when you rewrite your article that you extrapolate what costs would have been if Obamacare had not been implemented. My recollection is that rates were skyrocketing for years prior to the implementation of Obamacare, and therefore would be exorbitant now as well. And the Medicare cost curve has flattened considerably since its implementation.

              As someone who has worked in health care for 20+ years, I am just concerned that folks will simply assume there is a much cheaper alternative to Obamacare out there–I sure haven’t found it after all these years. An excellent resource in this regard is the blog The Incidental Economist (I have no affiliation with that site).

          2. Its so true about FIRE. I’ve been one of those anti-debt people all my life and the only loan I’ve taken was a mortgage on a condo that is almost paid off and at a 2.79% rate so I’m in no rush to pay it off, and I tell people around my age all the time I need like 1300 bucks a month live and anything over that is just fun money or money that goes right straight into savings and they don’t believe me.

            Of course, those same people have 500 dollar a month car payments, student loan payments, credit card debt, fancy cell phones, lifelong rent payers with 0 equity in a home, etc, have no clue whatsoever when I try to explain to them how people with a million + in assets are pulling money out of ROTHs, effectively showing zero income, and qualifying for medicaid on their backs lol.

            Unfortunately, those same people who think such broken programs are “good,” and all the people gaming the system get the same vote as those of us who understand how ridiculously bad such programs actually are. In the end what are you going to do? You can work 10 years longer to subsidize other people that are milking the system just to feel all warm and fuzzy inside that you are paying your own way in life, or just say screw it and milk it yourself as well because the system punishes you for not doing this.

            I tell various liberals I know all the time if we get universal healthcare 3-4 years down the road I’ll be retiring shortly after. They laugh at me because they think I’m kidding. I laugh at them because they’ll be subsidizing my retirement at 35. They’re just totally clueless that while they blow 10-20k(as the average person these days seems to have resigned themselves to being debt slaves forever just to have nice things) on interest for various debts they have, it looks like I’m going to be finishing up about 25k for this year on my investments, which is essentially like I’ve made 40k more than them. Fast forward a few years and my passive income will be 2-3x what it is now as I continue to save and hopefully watch my balance compound, where as many people in debt right now will be in equal or more debt as they’ll end up going out and financing a newer car, charging more vacations on credit cards, etc.

  17. Unless someone is serving in the military, the average American’s life won’t change much regardless of who wins. I tend to believe a president’s domestic policies tend to only has a minimal gradual effect on a person’s life, but their foreign policy can potential impact for people who are in military or have family members in it since we tend to get involved in overseas conflicts. Some people are afraid of equal marriage rights or abortion rights being taken away, all illegals being deported, but I don’t believe any president has the power to do that.

    I never understood why people get so upset or gleeful about any presidential candidate. I recall some of my friends mentioning in 2004 how they’ll move to Canada if Bush wins or celebrating as if they won the lotto when Obama won in 2008. The average person should just focus as you did in increasing their economic value to society while saving and investing.

    1. I bet 0% of your friends moved to Canada. There’s so much hyperbole and media sensationalism, it’s nuts, but sometimes entertaining.

      Focus on what you can control folks!

  18. I don’t understand how any reader of this blog (assuming mostly upper middle class college educated people), let alone 32%, can think that Trump is competent to be president. I understand people are disenfranchised, but he is dangerous.

    I don’t necessarily think Clinton is going to be better for me personally, but I can’t imagine what America would look like under Trump.

    In fact, given that ~30% of Americans support him (including stellar groups like the KKK), I’m not sure what to think of this country sometimes.

    1. Newport Ned

      Right back at ya! I don’t understand how any reader of this blog (assuming mostly upper middle class college educated people), let alone 40%, can think that Hillary Clinton is competent to be president.

      1. I think Jason was weighting in both candidates. Newport, what is it that you like about trump?

        1. Discussing politics and religion is a losing proposition since it’s next to impossible to convince people to change their positions. Most of the time, people retreat to their battle stations and argue with each other only.

  19. Jack Catchem

    I agree not much will change for me personally or professionally regardless of who gets the presidential spot. What will change dynamically is the professional environment here in California if the recreational weed and decriminalization propositions pass. Huge opportunity for business growth in the Marijauna industry, sales, regulation, and delivery as well as great training opportunities for officers like myself to bone up on Driving Under the Influence of Marijuana (Colorado agencies have reported a huge spike). Also, burglars everywhere will be thrilled it will not be a felony to break into someone’s home anymore as long as the house is empty!

    1. Sounds like you have a recession-proof job. As a CA resident, I have mixed feelings about MJ legalization. As for burglars: I thought Prop 57 didn’t change burglary from a felony to misdemeanor, just changed sentencing and parole criteria. Am I reading this wrong?

      Would love for FS to write a blog on the huge number of propositions we have to vote on in CA. Takes hours to research them all, and even then the impact is sometimes unclear. Especially the San Francisco ones–I am a pretty liberal guy, but there appeared to be some crazy and financially irresponsible ballot items this year.

      1. Jack Catchem

        I apologize, you have it correct. Burglary becomes a “non-violent felony” eligible for 50% sentence reduction at the system’s discretion.

  20. Go Finance Yourself!

    I just wrote about this same topic. My thoughts line up with yours. If Hillary wins, business as usual. If Trump wins, he creates uncertainty because no one knows what a Trump presidency will look like. Uncertainty creates fear which leads to people making emotional decisions and selling out of stocks in the short-term.

    For me, I’m not changing anything. I’m continuing to focus on increasing my income and savings rate. My savings rate after taxes and 401k max out should be 40% by early next year, with a goal of hitting 50% within a year after that. Even though there could be some volatility in the short-term, long-term we’ll be just fine. This and continuing to diversify into real estate and some P2P lending is what I plan for the future, regardless of who ends up being President.

  21. I bought some stock on Friday so I was happy to see today’s rally thanks to the FBI clearing Hillary. The timing is nuts – doesn’t feel like the election is actually tomorrow. Although I think many people will be glad once it’s over and we can move on. I’ll miss the SNL skits though. :)

    I don’t think my financial plan will change dramatically with either candidate getting elected except I’d probably become even more conservative if Donald were to get elected.

    It will be one memorable election to watch tomorrow!

  22. I don’t understand the concept of working harder just for 5% net. Let’s say you can make $110k per month gross but currently make $10k gross. Currently, you can earn an extra $100k gross pre-tax or $50k after-tax. But, you won’t do that until you can earn $55k after-tax? Seems irrational.

    1. Because, Mercury, there comes a time when the extra effort is not worth a little more money. That extra 5% is the difference between doing it and not. Mentally, the 55k feels better than 50k… it’s not the $, it’s the %. When you reach the point that the government is taking 50% of your dollars, MENTALLY, it doesn’t feel worth it.

      My small business currently makes about 720k/year. I’m netting 450-500k. There ARE some things I could do to bust it and maybe hit 1M/year, but I have no desire to make another 300k when I know 150k is going to go to government. You would say, yeah, but it’s 150k! — it’s just not worth the effort.

    2. I find myself doing the same thing as Jeff. Perhaps it depends upon your age (and financial stability). I’ve worked crazy hard my whole life, now interested in a better work/life balance–and higher taxes make it easier to choose life over work. That leaves more work out there for someone younger and more energetic; not a bad trade-off.

      1. Agree, JC, on higher taxes making it easier. I’ve worked crazy hard, too. I still work a good 40 hours, but not nearly what I did for many years. I almost feel lazy these days only working 40 hours. I didn’t hit the 400-500k net until a couple of years ago. I’m just now at a point where I can save like crazy. I’ll be 50 next year. I worked at this business for almost 25 years to finally “make it”. I’m now focused on saving and living debt free. I paid off my house just last week, and am now 100% debt free. My business is a bit of a niche, and I believe I have another 5-10 year window to net those numbers. My goal is to save half in stocks (VTI) and half in rental houses until the high income stops.

        1. I have a small business that nets $1m on $3m rev. I still don’t get it. Mathematically, an extra $50k saved and investment per month will significantly accelerate retirement for just about anyone. I live in NYC and my marginal rate is over 52%, so I am not immune to this. If anything though, the high rate makes me work harder because I need to, in order to hit my net worth targets. I would still rather make $100k per month and get $40k after taxes per month than where I am now.

          Also, I don’t agree that working more automatically means earning more. Otherwise, people would start to cap out at $2-3m, yet people make much beyond that.

          1. Wow. Nice job with your business! I guess, then, how much you decide to work/earn is dependent on your net worth target. How did you arrive at that target?

          2. Good stuff, Mercury. My point has to do with the level of effort to make X more dollars. If I can COAST a bit now a make good (the same) money, why BUST it to make 30% more if the government is going to take half.

            It’s a risk/reward kind of thing. If all goes as expected, I’ll retire early with at least 5M. Maybe more. And the level of effort I have to put in now feels semi-retired since I work from home.

            At some point, if you’ve got enough (and you’ll have more than I will I expect) — why keep busting it. The only thing money could buy, that I would want, is to own the Dallas Cowboys. Since that number is WAY out of reach for me ($4B+), I have nothing else to work for. I have most anything I could want, and I’ll be able to donate and pass some on. I’ve changed my family tree already.

            If I kill myself working, maybe I end up with 8M instead of 5M??? Not a game changer for me.

            Also, may I ask how old you are? If you’re still in your 30’s, you won the game way before I did, and you probably still have more fire in your belly. I’m pretty burnt out.

          3. Mercury – It’s because you aren’t satisfied with your wealth yet and haven’t achieved your number that makes you happy.

            Based on my experience living in SF and and Manhattan for the past 17 years, I’ve found that $200,000 – $250,000 a year is the amount I need to experience maximum happiness. Any more doesn’t do anything for my happiness. With a family of 3 – 4, that number shoots to about $300,000 – $350,000.

            As soon as you find your income and wealth number, you’ll realize any more money just isn’t worth it anymore.

            Remember, the richest man is not he who has the most, but he who needs the least.

            1. “$200,000 – $250,000 a year is the amount I need to experience maximum happiness”

              “the richest man is not he who has the most, but he who needs the least”

              ಠ_ಠ

              Sometimes I cannot tell when you are serious. This is more than most people will ever make in a year,or even their lifetimes.

          4. Ok, sorry about the delay, busy news week, lol!

            I am 40. My NW target is $10m because that should net me $30k per month after-tax, if I play my cards right. I agree that for a family with 1 kid in Manhattan, this should be enough. However, this is closer to $600k gross (not sure if you mean gross or net). If you think a family in prime Manhattan will do ok on $350k gross, or $17k per month, I buy that only if they have no mortgage. Otherwise, things could get really tight. In the areas with good public schools, 1,500 sq ft is about $2.5m, or about $12-14k per month, including HOA/taxes. Private schools cost about $3k per month per kid.

            To be clear, I understand hitting your targets and then quitting, that’s not my point. My point is that if you gross $100k (month) and net $52k, it’s unlikely that making $55k is going to cause a massive shift in the behavior of most people whether they hit their NW target or not. At that point, you are talking about really small amounts. If you run a business, the monthly variation is much more than this typically anyways.

            Also, if you net $55k, why work when you could net $58k? Why work if you net $95k? They still took 5%. This can keep going.

            I completely understand if work ethic shifts if the tax rate is slashed from 44% to 15% as he is proposing for businesses. But, 5% shifts do very little in either direction, imo. In the long-run, that is a rounding error. I suspect things are going to be really good for business owners in the next 5-8 yrs assuming Rome doesn’t burn. That is also a possibility.

  23. With dual citizenship ( US and U.K.) there are always options. The U.K. is very stable and not undergoing any sort of change. Not a worry that side of the pond. Oh, hang on. Scratch that…..

    Never a better time to look at geo arbitrage from a global perspective. Yet that seems a bit like running away, which we don’t do…. In history, there have been much tougher times our country has faced to be very frank. Shitshow media propagates all sorts of stuff that many are finding hard to navigate through unfortunately. Never been a better time to be alive in the US with amazing waves of innovation (tech, medicine and finance) making our life easier, not harder.

    1. Newport Ned

      “The U.K. is very stable and not undergoing any sort of change.”

      haha! apart from those little things called population replacement and creeping sharia thanks to mass immigration policies.

        1. We all got it. Well, except for Newport Ned :)

          I plan on taking a property hunting business trip to Kensington, Chelsea, Knightsbridge, and Notting Hill next year to by myself a flat!

          1. Terry Pratt

            Make sure you do that hunting in London; you don’t want property in Philadelphia’s Kensington.

  24. robert clayton

    I really see zero changes for the country or my life. This country is too divided to see any major legislative change. It will be a minimum of 10 years before you see any majors changes, and that will be because of demographic changes that are slowly happening in our country (less white, getting older). If I am wrong I always have a fallback and move to Canada. As a Naturalized US citizen I can always go back to the country I was born in!

    1. Hopefully, ALL of us will be financially independent by 10 years. That is a lifetime!

      Can you still get free healthcare and retirement benefits in Canada if you haven’t been paying taxes there for most of your career?

  25. I don’t think either candidate will materially impact my lifestyle. I’ll still work hard, save money, invest, and try new ideas.

    That being said, I find the stock market (and currency market) reactions to the presidential news to be very interesting…

    Dow up 270 points because the FBI cleared Hillary’s new emails (Mexican Peso was up 2% the prior night when the news story broke).

    I agree that if Trump wins there will at least be a short-term correction in the market. I’m ready to scoop up more shares when/if it happens!

  26. Apathy Ends

    I don’t care all that much more who the president is, I don’t think there will be much change (if any) to us.

    The short term market fluctuations will be interesting to watch – the candidates are so polarizing I hope people keep their head regardless of how it shakes out.

  27. As long as the Senate and House remain in different parties than the President you should continue to see gridlock in Washington which is normally a good thing for the stock market.

  28. The politics of choosing a winner is something I’ll avoid but I will add this. Studies have shown that presidents themselves have little effect on the economy. Congress makes and passes the taxation and spending rulings with the president only approving or vetoing. I find it unlikely after perhaps an initial shock of the market that either president will impact the economy. I do find it likely there will be inpacts felt elsewhere but that’s more around personal politics.

    1. Stubborn Old Guy

      I think there is some evidence this is changing. As the executive branch gets more ability to make law by itself I think this system changes making that role more impactful for the economy. Interestingly I would wonder how much the psychology of the nation changes based on the leaders – the animals spirits adjust depending the leaders.

    2. I agree with your saying of the role of Congress, but I think the President colors that role because of his option to veto. Like they’ll think “Well this will never get approved, so we’ll put this forward instead cause it has a chance.”

  29. Fortunately for me, my path will not change based on the outcome of the election. (Unless Donald gets us into a major world war, of course)

    I’ve got nine more years at global mega-corp and then I am out with my 401k, pension and IRA’s. Bot kids will be out of undergrad and the house will be paid-off. I just need to keep socking away the money and kicking butt at the office.

    That’s the plan anyway, hopefully real life won’t intervene to screw things up! :)

    1. Man, 9 years… I hope you crush it with flying colors! I could kill myself for 4 years to try and accumulate more wealth under a Donald presidency, but after that, I’m going to retire again! I couldn’t do it for an 8 year term, let alone 9 years.

  30. I’ve tried to envision some stock market winners or losers, but my crystal ball is broken. Clinton wants to increase the capital gains tax, but Donald is just too unpredictable. I think I’m just gonna stick to blue-chips and consistent dividends for the time being.

    FS, do you think would go back to an actual W2 job or just increase your consultation gigs to go full-time?

    1. I will probably ramp up my consulting gigs AND go back to work full-time AND publish at least one more post a week on FS if Donald wins and successfully lowers income taxes, lowers estate taxes, and raises the level of wealth for when the estate tax kicks in. I’ll probably also look for more dividend paying stocks if he lowers the investment income tax rate as well and abolishes the 3.85 net investment income tax.

      It’s just too hard to resist taking advantage of income opportunity in such a scenario. I’m always looking for motivation to do things b/c I like to keep active. Maybe another bubble grows again and then a Democratic president comes in after four years, then it can be time to take things down.

      It would be exhilarating to go all out again, but I suspect I will burn out.

      1. Interesting insight as always! Your post reminding me of something I read in the book “How Not to Be Wrong”. The book talked about how the rich were the only ones that could really game the tax system, so tax increases on the rich don’t necessarily lead to higher tax revenue. The middle class cannot afford to work less to avoid paying higher taxes, and will continue to work in spite of higher taxes.
        The overall conclusion the book comes to is tax changes on the rich don’t do a whole lot because the rich game the system, as you smartly do. The middle class have an inelastic demand for income and they will keep working even as takes go up.
        It’s always risky talking politics, but I appreciate you doing so in a fairly non-political, “just the facts” kind of way.
        I find it ironic the the two most taboo subjects, money and politics, are the two areas where positive dialogue could do the most good.

        1. I don’t like the word “game the tax system”. Lets not forget that the tax code is written by the government and used to encourage people to do things the government wants.

          I agree that the middle class can not afford to work less (many living on debt) to support their lifestyle. If they do get higher paying jobs the government takes a higher percentage off the top so it’s hard for this group to grow their seed money.

          The most important point is when a politician says they are going to make the rich pay more by raising taxes on income, they are misleading people because the rich already have their money, they have options to reduce their taxable income where the middle class doesn’t. Unfortunately trying to tell someone who believes the rhetoric is like talking to the wall. Each class has their own mindset that most won’t be able to break away from even if doing so would open their eyes to a whole new world of opportunity.

          1. For the record, I was using the books words (I think), not mine, when I said “game the system”. I definitely see your point. “Gaming the system” does unfairly imply shady or unethical dealings.

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