In this episode, Steve and Travis discuss how politics can cloud financial decision-making. They highlight the confusion caused by mixing social issues with complex economic topics and the prevalence of salespeople impersonating fiduciaries. They also explore the impact of numbers like GDP, national debt, and monetary supply on personal finances.
Together they emphasize the importance of understanding these numbers in context and how they relate to individual decision-making. They conclude that while politicians and policies can affect financial well-being, personal decisions play a significant role in financial outcomes.
Looking for additional content that can help you get the most from your life? Check out Unleashing Leadership with Travis Maus, premium bonus content from Ditch the Suits Fans, at https://unleashingleadership.buzzsprout.com/
Thanks to our sponsor, S.E.E.D. Planning Group! S.E.E.D. is a fee-only financial planning firm with a fiduciary obligation to put your best interest first. Schedule your free discovery meeting at www.seedpg.com
Ditch the Suits is produced by NQR Media. NQR also produces the One Big Thing Podcast with Steve Campbell.
You can watch all episodes, as well as other great content produced by NQR Media through their YouTube channel at https://youtube.com/@NQRMedia
In this episode, Steve and Travis discuss how politics can cloud financial decision-making. They highlight the confusion caused by mixing social issues with complex economic topics and the prevalence of salespeople impersonating fiduciaries. They also explore the impact of numbers like GDP, national debt, and monetary supply on personal finances.
Together they emphasize the importance of understanding these numbers in context and how they relate to individual decision-making. They conclude that while politicians and policies can affect financial well-being, personal decisions play a significant role in financial outcomes.
Looking for additional content that can help you get the most from your life? Check out Unleashing Leadership with Travis Maus, premium bonus content from Ditch the Suits Fans, at https://unleashingleadership.buzzsprout.com/
Thanks to our sponsor, S.E.E.D. Planning Group! S.E.E.D. is a fee-only financial planning firm with a fiduciary obligation to put your best interest first. Schedule your free discovery meeting at www.seedpg.com
Ditch the Suits is produced by NQR Media. NQR also produces the One Big Thing Podcast with Steve Campbell.
You can watch all episodes, as well as other great content produced by NQR Media through their YouTube channel at https://youtube.com/@NQRMedia
👍🏼 You can also follow us on Facebook, Instagram and Twitter at @nqrmedia
⭐⭐⭐⭐⭐ We'd also love for you to subscribe to this podcast and leave a 5-star rating and review
Speaker 1:
Welcome to Ditch the Suits podcast, where we share insights nobody in the financial services industry wants you to know about. We're here to help you get the most from your money and life, so buckle up and welcome to Ditch the Suits. Well, welcome back to Ditch the Suits, steve Campbell, here with Travis Moss. Folks, if you didn't know, we are in the thick of an election cycle here, with the US presidential election upcoming. We, if you listened to the last episode, wanted to provide some context around the idea that, in fact, what happens with the presidential election does not have an immediate correlation to your investment results. But in this question, we told you that we wanted to talk about, then, the role that you play with this information that you receive, and we want to ask the big question of how politics might be clouding your financial decision making. So, travis, where is a good place to start as we think about the personal decisions that we make with our money?
Speaker 2:
Well, there's a trend and the louder politics gets, the more confused it seems like we're getting with what is really a threat to us. We're demanding more immediate action and then there's conjecture being utilized to create this kind of hero and villain appearance. And conjecture is when we mix these social issues that are happening all around us that seem to be pretty significant, severe, and there seems to be a lot of protests and stuff like that and we take those social issues, or we take TV personalities who are talking about complex issues that they clearly don't understand. They sound smart, they look smart, but for somebody who actually understands stuff that they're talking about, they are fundamentally flawed in the way that they're presenting risk and opportunity and those types of things when they're talking about the economy and finances and those types of things. But it's entertaining, it gets people to keep showing up.
Speaker 2:
And then we have salespeople that impersonate fiduciaries. So you have people running around trying to scare people into buying, let's say, financial products because it's going to protect them and they're not fiduciaries, where they have very limited fiduciary responsibilities. And we need to. You know, I know a lot of people go out and buy financial products and they're okay with the sales game. They like the sales game. Maybe they're in procurement for a business or maybe they like the game of sales or they think that they can outwit salespeople and get a good deal. When you're dealing with financial salespeople who have survived the attrition of I mean, 90% of financial people fell out, you know financial advisors, investment salespeople, that kind of stuff Insurance agents fell out in the first eight years or so. You're dealing with very, very good salespeople and you're saying that you're going to essentially out-duel them. Come on, to essentially out-duel them. Come on, you know they have so many tricks on selling products that you're fighting and losing in battle and you don't even know it.
Speaker 2:
And then we have these experts. You see them on the news all the time. They bring on some expert. You don't know which experts are being paid to be on there, or which experts are paying the organization to be on there or which experts are paying the organization to be on there. I mean, we get offers all the time, steve. We literally get emails every single week. We can hire a PR agency. We can pay them $1,500 per public event and they will book us on public events as an expert. They don't even verify what we're an expert in. We tell them what we're an expert in, they book us and then we pay them. I mean, you really got to ask how are these people showing up and talking and when they're wrong and they're consistently wrong on most of our news channels and most of our media none of them are held accountable and very rarely do they even apologize.
Speaker 1:
Let's take a quick break to hear from our sponsor. This episode is brought to you by Not Quite Right Media. If you love podcasts and enjoy hearing from creators that aren't afraid to tell you what you need to hear, then check out NQR Media. Their podcasts unapologetically broadcast genuine truth to whoever wants to listen, and their shows cross a wide spectrum of topics, from leadership development to personal improvement, as well as getting the most from your money in life. Who doesn't love that? So start following their shows today at wwwnqrmediacom.
Speaker 1:
That's nqrmediacom, yeah, and I think right now we all make decisions when we're emotional, whether you are revved up with energy because you're ticked off and you want to see things change, or you're just fatigued by what you hear on the news every night down. In a way, you're emotionally revved up that somebody can prey on that. It's very rare that you're going to have somebody step in on a regular day when you're in your right mind and pitch you something You're going to go get out of here. But when you are actively looking whether it's for information on the nightly news or you want to be aware of what's happening around the world if you have these individuals, come on. They know how to prey upon what you're feeling one way or another and sway you.
Speaker 1:
So our whole goal is not that we are going to try to tell you that so-and-so presidential candidate is going to save you, as much as help you try to understand that there might be some underlying ways that you're going about making decisions, that you might be your own worst enemy, and that's not to make you feel bad, as much as make you aware that politics can definitely be clouding your financial decision-making. But we want to provide, maybe, some examples to help you understand. Like what are we talking about? So, travis, hit it with some examples. That might be a little eye opening.
Speaker 2:
We're going to talk about the relationship between three numbers, and I'm not going to get ahead of what the three numbers are that we're going to look at, but three numbers that seem to move in unison together and they kind of form out a story for us.
Speaker 2:
That is a little bit more informative than some of the fear-mongering kind of ways that we throw around numbers that we don't really understand. And the reason why I want to throw these numbers out there and I want to talk about them is because I have conversations with people who are concerned about these things Every single presidential election now. I have conversations with people who are concerned about these things Every single presidential election. Now I have these same conversations about what happens with the debt, what happens with inflation, these types of things, and if this person's elected, we're in big trouble because of X, y, z and there's really good talking points that are triggering incredible reactions to people that I think are very unhealthy and they're pushing us to make very unhealthy decisions or just to live with stress that we otherwise don't deserve to live with. Sure, because we don't understand the numbers. And so the first one for example, if I were to throw out one of these big, scary numbers. Steve, if I were to say $21.3 trillion, what do you think that represents?
Speaker 1:
Boy, that's a big number.
Speaker 2:
You have the show notes so you can let it out. You can tell the audience what it is.
Speaker 1:
GDP gross domestic product.
Speaker 2:
GDP. Yep, you got it, so $21.3 trillion. A lot of people probably think well, that's the national debt, right? Because the only thing we ever talk about trillions is debt, debt over Green New Deal spending bills or stuff like that. Right, it's how much money is Congress spending or how much money are we borrowing. But here's an interesting thing, and I'm going to make an argument that we stop talking about this as a whole. Number like the united states as a whole has a 21, 342 trillion, or, I'm sorry, 21 trillion 342 billion.
Speaker 2:
I had to make it, I had to condense the numbers that could fit on my paper. Um, we're talking about this number as if everything is static, so that number would be specific. Um, as far as the size of it, it'd be, oh my goodness, if we still had the same amount of people and the same amount of money in circulation as we had back in 1952. But we don't. There's a lot more people and there's a lot more money.
Speaker 2:
So if we were to look at this more on a per person standpoint, that means we have $63,530 worth of productivity or GDP per capita per person. That's a dramatically different number. So if I came and said we're producing 63,530 a year. That's different than if I tell you you know what it's $21 trillion of production. You can't get your head around $21 trillion. You can get your head around $63,000. Yep, and I think that that's interesting because if I told you that that $21 trillion has grown 5,941% since 1952, you'd say holy cow, that's a big number, but there's more people doing the work, so it should have gone up right.
Speaker 1:
Yep.
Speaker 2:
And so, really, it's going up 2,705% over that same time period. And now, still, that number is going to blow your mind, because what do you have? That's going up 2,705%. Well, maybe you bought Apple stock or Amazon stock back in the nineties or the early two thousands. Then you probably have seen something like that, right, but a lot of people don't. That's a big number, and part of the reason why the number is so big is because it's since 1952. It's a long time and the way compounding math works, you're compounding on a big number now, so that percentage from whence we started is pretty extreme.
Speaker 2:
Another popular number this is the national debt number, and this is, as of 2023, $27,748,000,000. Whatever that number means, it also means $82,597 per person, and so people get that number. I've heard that number in the news it's $82,000 of debt per person. Now, we could probably do an entire series about national debt and what part of that debt is good debt? What part of that debt is bad debt? Are we in trouble because of the debt? What do we do if we got in trouble because of the debt? All those other things right, completely different discussion for a different day. What I'm going to show here is that there's a correlation with how these numbers are growing and who's behind it all. So if we were to look at this, that means that national debt, if I just look at the $27 trillion number, that means that the debt has grown by 10,714% since 1952.
Speaker 2:
Well, that seems pretty darn scary. Or if I figure it out per capita because there's more people, right. So if you're thinking about I'm borrowing X amount of money per person, let's say, to build infrastructure in the country, it's gone up 4,877%. So still sounds like a lot. It sounds like a lot more, actually, than GDP. Well, there's one more number that we should talk about. We've talked about this in other episodes before the M2, or monetary supply. So, and again, m2, for a lot of history, is pretty much an estimate. It's not an exact science, but it'll give you a pretty good idea. 18 trillion 300 billion. Or, if we break it down per person, $54,474 per person. That's how much money is floating around out there. That's a 6,399% increase since 1952. Or per person 2,913%.
Speaker 1:
Hey guys, steve Campbell with Digital Suits, I just want to take one quick moment to make a big ask, if you haven't already, travis and I would love for you to subscribe to this podcast. 113% for listening to Ditch the Suits Podcast. Yeah, those numbers are great in the sense that, again, when you see a headline, you typically see the larger number, which is very hard for any of us when you're raising kids, going off to build a career, and you see this massive number, that is very hard to contextualize. How many zeros are on that? And it sounds awful. I think breaking it down, which again is just aiding some data to it, is helpful for us to realize, maybe that it's not so bad, but at least it doesn't seem so large, so at least we can begin to make some sense of what does it all mean? So then, talk to us about then. Why is any of this important?
Speaker 2:
I was looking to see I think it's in the next episode we're going to talk about the growth of the S&P over this time period too and that's going to put those other percentages into perspective, because those percentages are still pretty darn big. I'm looking at it going. That's grown 4,877% per person. That right, you know, and particularly because you started with a small number and then the number got big, fast, right, and and the problem with the numbers as they grow, five percent of a number, five percent of a big number, you know, is a lot bigger than five percent of a small number, still five percent. But you know, five percent of a million, fifty 5% of $10,000 is what? 500 bucks, completely different, still 5%. So since 1952, per person.
Speaker 2:
When you actually figure out what that 2,705% actually means, it's right, around 5% per year compounded. And because it's such a large timeframe, there's not a whole lot of a difference between 2,705% and 2,913%. It's a little bit of a rounding. So I just rounded it to make it simple, because otherwise we're going to get into the thousands of a percentage. It's about 5%. That's the monetary increase. And so you say well, what about that big debt number? That's about 2,000% higher. That comes out to about a 6% increase year over year over year. So if I were to say to you we're producing 5 more percent per year in productivity per person, we're printing 5% more money per person per year and we're taking on debt of 6% per person more per year, that doesn't sound as scary as $27 trillion.
Speaker 2:
How can we possibly repay this? Eisenhower was the only president who actually decreased our debt, and he did it in both terms, by about 2%. People like to say well, clinton closed the debt. Clinton had a surplus. He didn't reduce the debt, though the debt still increased 2% over his four-year term. Reduced the debt, though the debt still increased 2% over his four-year term.
Speaker 2:
The only other two presidents that were under 17% growth in debt and this is incredible, because we think that this is a new problem. You know these current politicians Trump, obama, biden you know they're all horrible. All they do is spend our money and blah, blah, blah, blah, blah. Only two Kennedy and Johnson were under 17% outside of Clinton and Eisenhower's two presidencies, and only one of Clinton's presidencies. Clinton and Eisenhower's two presidencies and only one of Clinton's presidencies no, which is basically like? So monetary supply Every president, since Nixon's second term, has increased monetary supply by more than 14%, which is printing money.
Speaker 2:
Basically, they printed money. Every single one. Every single one, doesn't matter Republican or Democrat, doesn't matter who's in charge of Congress, it happens every single presidency. No presidential term has failed to increase GDP. Every single one has increased it. The only one that was under 10% over the four-year time period. And here's a big argument Obama said you'll never have higher GDP and Trump said I'm going to make it grow a gazillion times and whatever right, like all this fight over it. There's not a single president who has actually ever been under 10% for the four-year time period, and that was Obama in 2008. And that you know what? Hello, great financial recession. I'm not necessarily certain that you could pin that on Obama. Right To get to a issue that happened in 2008, the way that it happened took a long time to build up and then pop, and even then he was still positive. He still grew over the four years the GDP. That's pretty remarkable.
Speaker 1:
But what do you do when, again, you turn on the nightly news and you have these figureheads screaming they're spending us over the cliff and it's out of control and it's affecting future generations. How do you begin to make sense of that then?
Speaker 2:
Well, again there's a discussion to have about debt and monetary supply and inflation and this idea that you know, if we just stuff, stuff has to. If I have to pay people more to produce things, things have to cost more. If I print money, there's more money that is going after. You know that has to go someplace and that will push up prices. So there's a correlation between the amount of money in circulation, the amount of productivity and then the more money in circulation and the more productivity, the more you can afford to borrow.
Speaker 2:
Citizens do this all the time Like forget the government for a second right. You get a better job, you have a higher paycheck. What do you do? You buy a bigger house. What do you do when you buy the bigger house? You get a bigger mortgage.
Speaker 2:
But when the government we go, they're irresponsible. Now they are irresponsible in a lot of ways, but not to the dramatic existential we're all going to be doomed if they're elected type of scenario that seems to be percolating consistently to the surface. Here's an interesting thing the whole whether spending is over the cliff, both parties are overspending. Both parties are irresponsible with our money, absolutely 100%. Both parties do not provide us enough transparency. We can say that too much money goes to pet projects. What have you right? But it's both parties and it's at a rate of 0.2% per year, so that debt in relation to GDP and the amount of money in circulation is increasing by 0.2% per year, faster than those other numbers. That's a lot less dramatic than we're past the point of no return. We're all doomed, we're all going to be living in, you know, with dirt floors soon.
Speaker 2:
The amount of national debt well, we talked about it outpaced GDP. But the most significant increase is in national debt per president and Congress. 1980, under Reagan and a Democrat Congress, that is the most significant increase in national debt. It seems like it was either Trump, biden or Obama, right with everything that's happened. But if you go as a percentage of increase per capita, so if you divide the debt by the people in the country and you look at the increase over the four years in that amount per person, the most significant increase was Reagan in a Democrat Congress in 1980. And the second most significant was Reagan in a split Congress in 1984.
Speaker 2:
Then the third most was 2008, under Obama, in Democrat Congress. Again, I think you got to kind of look at 2008 and be like, yeah, there's. There is some pretty significant issue there. It's a little bit of a of a pretty significant scenario. Then you had 1988 under the first Bush. That was a Democrat Congress and then the other. The fifth place was a tie 1972 and 1976, which was Nixon and Democrat Congress and Carter and Democrat Congress. Remember it was all Democrat back then as far as Congress Congress goes. So I'm not sure that you can take anything regarding who was in charge of Congress at that point and say it was like their fault or something like that. So the point here is is it doesn't seem to matter if it's Republican or Democrat. But also when we look at historical context and the amount of debt per person, it's actually slowed down as a percentage year over year growth, especially when you compare it to the amount of money in the system and the actual productivity from the money in the system.
Speaker 1:
Well, I feel like you're laying a pretty good case for the fact that so far, we've realized, looking back to 1952, that presidential elections may not necessarily have a correlation. And now we've looked at okay, what does that mean then? For Congress? There's not as much of a correlation. I think what's hard, too, is for many people separating personal opinions versus what is actually happening within the country. You know no matter of. Let's be honest, you got two very polarizing individuals and Joe Biden and president Trump. Over the last several years, obama mixed the names in. There's people that will say I don't like him, okay, like what, that's fine, but like are you really looking, then, at what is happening within the country, with GDP, with capital, like what you're talking about? So I think, if we can, in this case, kind of remove our feelings, then I think this ties into the bigger question. Then, if it's not presidential elections that are impacting our investments and it's not Congress, then what is really impacting our money?
Speaker 2:
Well, the decisions that we make, and a lot of times the dumb decisions that we make, because we're confused and we start, you know, we're confused mostly because they're throwing these. They know that we can't understand the numbers that they're explaining. They know that nobody knows what a trillion dollars is. You don't actually know what a trillion dollars is. It has no meaning, right, like what can you buy with a trillion dollars, steve, for your family, anything, a country. So there, right, like what can you buy with a trillion dollars, d? For your family, anything, a country. So there is no meaning behind that. Then, at that point, right, it's, it's, it's, it's, it's an arbitrary number, it's, it's, it's a, it's a fictitious thing, right, big to grasp so.
Speaker 2:
So if I throw that out there, it because it is so extreme. It compounds the fact that it seems incredibly irresponsible. But the problem is that one party says they're irresponsible, but then they get elected, they do exactly the same thing. So, whether or not this is extreme, whether or not you want to agree with me on debt and have that discussion or not, that's a different issue. The fact is that both sides of the aisle are saying, oh, they're bad, bad, bad. Look at what they're spending. And then they turn around and spend it. You know, it's just, but think about also 1952. Do you know what the population was? 153 million people. Okay, that's interesting. 153 million people. Guess what the population was in 2023? 335 million people. Guess what the population was 2023? 335 million people can. Does the act, can? Can you even imagine 335 million people? Like, think about 335 million people at a football game? Okay, like, the biggest football game has what? 110,000 fans, or something like that maybe at the most on the stadium.
Speaker 2:
They're gigantic 110,000 fans or something like that Maybe. At the most On the stadium they're gigantic 110,000. So we've increased the population since 1952 by more than 100%. We've increased monetary supply by 5% a year. We've increased productivity by 5% a year. Those have both outpaced the amount of people entered, you know, into our population and of course that has increased. But when you understand that everything's actually growing, it starts to reduce some of the angst about the. You know the size of one of the particular numbers and the reality is there's just more money than there's ever been before. Americans have access you and I have access to things that our grandparents and our great-grandparents and their parents could not even have imagined even if they knew that they would exist, like they just can't imagine that we can do some of the stuff that we do today.
Speaker 2:
And politicians and the media. Basically what they want to do is have us think from a perspective of scarcity. There isn't enough to go around, and people are hoarding it and so on. There is enough to go around. They keep printing it Right. There's more and more and more of it, and at least in our country we're free to start businesses and make investments and take risk. You know that reap rewards for us.
Speaker 1:
And that's a great. So I guess, with all that being said then, then what do we need to realize, or what do we need to think about that can help us with our decision-making.
Speaker 2:
So we need to realize that there's a spigot and all the government does they turn on the spigot. And all the government does they turn on the spigot and they kind of like redirect where the water goes. It's like when you're a kid and you're kind of playing in the mud, in the water, you know, in a ditch or something. You kind of redirect the water and get it to move around. Yep, that's all the government does. They don't actually ever really destroy anything, they just kind of send it in a different direction. Policy decisions and this is where your elections matter the policy decisions certainly can and will destroy individuals' personal financial well-being. Right, if I come out with some kind of regulation or law or something that disrupts your business and causes you your financial livelihood, that's not fair to you and that's a problem. And at the same time, though almost always when that happens, it's done to create an opportunity for somebody else. It's done to create an opportunity for somebody else, so in destruction. When you're talking about money and your investments and government policy and how that affects the broader market, I'm not talking about your personal job, but the broader market. Whatever it destroys, it creates normally on the other side, from a standpoint of investment opportunity. Let's say, right Now you could make an argument about the fairness of the investment opportunity. But here's some examples the solar and coal industry right, and again, you can have a whole debate on this topic. Is solar good? Is coal bad? All these different things right. But we say, okay, we're going to have solar which is going to reduce our dependency on coal. Coal people lose a job, solar people get a job. It's not fair to the coal people, it's exciting for the solar people. Yep, if they reverse that, they say, hey, solar doesn't work anymore, we can't trust solar, we're going to have to use fossil fuels again. Solar people will lose the job, coal people will get the job. So if you were investing and you were investing in solar or wanted to invest in solar, and you didn't invest in coal, you'd be happy If it reversed. You'd be unhappy in coal, you'd be happy If it reversed, you'd be unhappy. But the people who were investing in coal against solar, they'd be happy when the investment. You know when the regulations change Agriculture, you know that there's.
Speaker 2:
I read this in a book, one place, and this gives you an idea of how we work. Going back hundreds of years now, there was a time from my understanding. There was a time where we were trying to improve our relations with Brazil. And so we went to Brazil and we said hey, brazil, we're going to give you some subsidies to grow cotton and then we're going to give you the cotton market in the United States to sell that cotton to us and in return for XYZ, whatever we were trying to get from them. And then we came back to the States and we said to our cotton farmers we're going to pay you not to grow cotton.
Speaker 2:
Unfair for somebody, fair for somebody else. And that's policy in action. It destroys something for somebody, creates something for somebody else. It doesn't mean it's right, it doesn't mean it's wrong, but we just have to understand that the money's just moving around. Instead of going to one person's pocket, it's going to another person's pocket. So when you are looking at politicians and you're saying one is better than the other one, no One moves the money in one direction. One moves the money in the other direction, but it still moves. It's still out there. They're still all printing more money. They're still all borrowing more money. Right.
Speaker 1:
We still keep getting more productive. I think this has been another awesome episode for the fact of it's buried in historical data. We're not just trying to sell you what we think is important, but at least provide a framework and a context. One more episode. Let's give you a little bit of a sneak peek to the headline. Are politicians making you gamble with your future? Stay tuned, we're going to provide context which will help you move the ball forward and get the most of your money in life. But, as always, thanks for stopping by. Ditch the Suits podcast.