Election season is over! Yet the ramifications have just begun.
So far the markets hate it, and roughly half the country’s population has signed on to the oldest cliche in politics — changing citizenship. To the point where Canada’s immigration website has folded under the pressure and gone offline.
But is it time to cash out all your accounts and bury your money in the backyard? Hardly.
Let’s take a deeper look at what the 2016 presidential results actually mean for your finances:
The Story
Donald Trump overcame long odds — at one point he was given just a 7% chance of winning — to become the United States’ President-elect.
It’s an huge upset that saw Trump beat out 15 other Republican contenders and 1 formidable opponent in Hillary Clinton.
“Upsets” are not usually celebrated on Wall Street. Investors like predictability, and so far they hate Trump’s surprise victory.
Key Details
Around 8:00pm Eastern time, investors started to figure out a Trump victory was likely. The DOW, Nasdaq and S&P futures all nosedived, with the latter two automatically halting trades until the morning.
One Hedge Fund manager implied Americans can kiss their 401(k)s goodbye.
And Mexico, a frequent target of Trump’s criticism, saw their currency drop to an all-time low.
So is this the start of another global recession? Not likely.
The Bigger Picture
After Brexit, when the United Kingdom voted to leave the European Union, stocks plummeted on the London Stock Exchange. And then quickly recovered.
It’s common for political shocks to send markets tumbling down, only to see them recover days or weeks later.
And if the Bank of England is any indicator, Janet Yellen and the Federal Reserve may decide not to raise interest rates in December in order to maintain “calm” within the economy.
That will mean interest rates have been near zero for 8 years and counting. And that means there’s a lot of cheap money out there keeping the economy afloat, for now.
Winners and Losers
Last year, S&P 500 companies used all that “cheap money” floating around to set a record.
They spent a record total of $589.4 billion to reinvest in themselves through stock “buybacks.”
And that matches what we, at Wealth Factory, have been saying all along.
Instead of investing in the stock market, which falls victim to current events you can’t control, invest in scaling your business just like the world’s largest companies are doing.
With interest rates so low, and common investments providing such a meager return, investing in your business is your best opportunity to grow your income and wealth.
What To Do Next
Here’s a 3-step action plan for wisely investing more money into your business:
- Regularly put money aside to be used ONLY for investing in your business or Soul Purpose. We recommend saving 15% of your income in a Wealth Capture account just for this purpose.
- Next, look for opportunities to invest, grow and scale your business NOW while money is cheap. If you wait until interest rates rise, maybe even to double-digits like they did in the 1980s, you may regret it.
- And three, take a deep breath. This election season has been exhausting for anyone who hasn’t achieved Zen master status, but it’s over. And now you can focus your energy on growing your business.
That’s it for now.
But be on the lookout — next week we’re introducing a new way to invest and grow your business, and you won’t want to miss it.
Build the life you love,
The Builders at Wealth Factory
What is Living Wealthy Weekly?
Each week we share timely trends, news stories, and current events that affect your life. We help you see the impact, personally and socially, and give you possible solutions to avoid any negative effects. We also give you additional links and resources if you want to investigate further. The purpose is not to be the last word on any topic. Rather it’s to help us all stay informed of what’s going on in the world without letting those events negatively impact your lifestyle. Our goal is to help us all live richer, fuller lives from a position of financial strength. This allows you to weather economic hard times, and seize whatever new opportunities arise in our changing world.
