Walter Storholt 0:10
It’s the Roth guy with holistic wealth advisor, Jude Wilson.

Marc Killian 0:19
So some people wonder, are we, do we tax ourselves out of this hole, or do we have to cut spending and tax? And it really sounds like it needs to be both, correct. That’s the only way it’s going to get done.

David Walker 0:29
Here’s what’s important. I mean, what’s important is not necessarily what I think, or either of you think. What’s important is, what are the American people think? Yeah. And in my latest book, American 2040, still a superpower. Question mark, okay, I lay out in that book the results of a 10,000 mile, 27 state, national fiscal responsibility bus tour that I conducted, which was largely underwritten by the late H Ross Perot senior, May God rest his soul. And in that tour, I was able to get 77 to 97% agreement from representative groups of voters in swing districts and swing states on specific reforms that would get debt to GDP down to a reasonable, sustainable level on about 10 to 15 years that include budget reforms, tax reforms, Social Security, Medicare, Medicaid, healthcare, defense, government organization, operations and political reforms, 77 to 97% but people are way ahead of the politicians. Now the only bad news is they’ve done little of that since then, and the numbers are much worse.

Jude Wilson 1:38
The thing that you mentioned that I have to love, because we haven’t had this conversation before, but the way that you present the future, you’ve said it several times today, the potential ticking tax and so we have a separate website that’s called the ticking tax time bomb. And so you and I are exactly on the same page. You know, we’ve talked about what the problem is currently. We’ve talked about what the effects could be in the future on everyday Americans. Let’s shift a little bit, because I’m sure there’s some people listening now that are pretty depressed, listening to all of the things that could buy.

David Walker 2:19
I normally speak right before a happy hour.

Marc Killian 2:22
That’s a good idea.

Jude Wilson 2:24
The bartenders love you because they get good. Oh, yeah. So let’s, let’s talk about personal responsibility. If we, if there’s no way for us to actually force our politicians to take action, we can all vote for whoever we want, obviously. But what can we do as individuals? Are there strategies or things that you would suggest that we can do now?

David Walker 2:49
Yeah. Well, just last night, I was in Georgia, and I gave a speech in Georgia to a friend of mine, who’s a financial planner in that state. You know about 80 people that came to a dinner there, and what I talk about is what individuals need to do in order to inform themselves about the federal government’s true financial condition and what’s likely to happen over time, and to try to influence their elected officials to start taking action on this and to consider this and deciding who they’re going to vote for for whatever office, it might be okay. But the second thing I do is say you need to consider what the impact is going to be on you and your family, and you need to do what you can to try to make adjustments with regard to your savings strategy, your tax strategy, your investment strategy, your you know, your your will and estate planning and things of that nature in order to do what you can to protect yourself and your family, all right, and I’m a big believer in practicing what I preach and leading by example. So what I’ll do is I’ll tell them about the challenges. I’ll tell them what’s likely to happen going forward, and then I’ll tell them what I’ve done, which, by the way, also includes Roth hours, but not just Roth hours, okay? I’ll tell them what I’ve done, and I’ll say, look, what I’ve done, what I’ve done doesn’t necessarily make sense for you. Okay, you need to have independent professional advice from people who you trust to decide what you ought to do, but you need to do something all right? And I think you know, one of the things I want to touch on, too is what needs to be done by our leaders to diffuse this ticking debt bomb. And there’s three things. The biggest deficit this country has is a leadership deficit. We haven’t had a president who led on fiscal issues since Bill Clinton. That must change, and so the first thing we have to do is we can’t expect people who are running for office. To say, to get into a lot of details about this is how I’m going to change the tax code. This is how I’m going to reform Social Security. This is the spending I’m going to cut and how I’m going to cut it. We can’t expect them to do that, because they’re trying to get elected, right? But what we can do is we can, we can get them to say three things, I know we got a problem. I know we got a ticking time bomb. I know it’s going to be really ugly if it goes off. I’m committed to diffusing it. That’s number one. Number two, I’m committed to to pass a statutory fiscal sustainability commission that will engage the American people, the facts, the truth, the tough choices, solicit input and make a package of recommendations, where everything’s on the table, but not everything is equal, all right, for a guaranteed vote in Congress. So till the ground, set the table, Prepare the way for a tough vote. And thirdly, I support the need for a constitutional amendment that will establish a credit card limit based upon percentage of GDP, how much debt we can have as a percentage of GDP, absent extraordinary circumstances. And because that’s the only thing that can bind current and future congresses, nothing else will bind and that will force them to make tough decisions, not just to be able to get us on the right path, but to stay on the right path. They can do those three things. And if they do those three things, those are very, very positive, and then we can work out the details later. And it will also keep them from having to be able to get into the details. Somebody says, Well, how are you going to reform Social Security? Well, I support this commission. I want them to do the work. I don’t want to predispose them as to what, you know, I would or wouldn’t support. You know, it’s not just what do we need to do? How do we get it done?

Jude Wilson 6:55
Absolutely.

David Walker 6:55
How do we get it done?

Jude Wilson 6:57
By the way, I got the website, my own website, incorrect. It’s the tax bomb.com

Marc Killian 7:05
and I almost corrected you, but I didn’t.

David Walker 7:08
And mine is America in 20 forty.com America in 20 forty.com.

Marc Killian 7:14
And we’ll put links to all that in the show descriptions this week for folks to check out as well. Yeah.

Jude Wilson 7:18
Well, the thing that you hit on in your latest response was that it’s not for in regards to personal responsibility, it’s not a one all solved type of problem like you spoke about the fact that you have Roth accounts, but you should be looking at your finances holistically. And that’s really the purpose of the show. We named it the Roth guy to try to get attention for our for our audience. But we’re really about tax smart, holistic planning, and so, you know, I can’t thank you enough for bringing that out, because that’s the message that we really want to get across. You should look at your finances holistically and be as tax efficient as you can. So let’s, let’s bring this down to a couple of items. One of the things you said is that you yourself have a Roth oftentimes we, we’re, we’re meeting clients or potential clients who have heard of the Roth. They know a little bit about the Roth, and they’re doing Roth conversions on their own. Have you had your conversations as an author and a speaker? Have you talked about Roth conversions as a particular strategy?

David Walker 8:31
Yeah, I have. But typically what I do is, when I give my talks, I’ll give them the macro, the big picture, I’ll talk to them about what I’ve done, and then typically, you’ll have, you know, you know, a financial planner or somebody else that will end up getting into more details, right, you know, if you will, including talking about Roth conversions, Q lax, you know, all kind of strategies, all kinds of strategies, if you will. I mean, one of the first things that I wanted to do is, is get out of debt so I have zero debt. Okay, the other thing that I wanted to do is I wanted to be able to make sure that I had an adequate stream of income throughout my lifetime. And so I have three different annuities, okay, one of which is fully indexed to inflation. I don’t think you can buy that anymore. The second one is index 3% a year, no matter what inflation is. Of course, the Fed’s target is 2% right? And then the third one is not indexed. But those are all life annuities, okay? And so they will provide me enough income for the rest of my life. A supplement to that is Social Security, right? Absolutely, I myself have Social Security. You know, we have IRAs, including Roth and traditional IRAs that will you have minimum distributions, so we’re set all right? So the real question is, what do I need to do with regard to legacy, you know, what I need to do with regard to the rest of the assets in order to. You know, provide for my family and or charities that I care about. And it’s both All right, but, but again, first thing was get out of debt and then make sure I have a lifetime stream of income, and then the rest, you know, have appropriate investment and tax strategies, you know, to try to deal with the balance of of my net worth.

Jude Wilson 10:20
David just came across my desk. We found out that the Fed has cut interest rates by 50 basis points, half of a percent. Tell me your thoughts on that. Is that beneficial or could that be detrimental?

David Walker 10:31
Well, first, I’m not surprised at all that the Fed cut rates. I felt they were going to cut it by 25 to 50 basis points. Personally, I probably would have done 25 especially now that we found that’s what I was expecting. Yeah, I would have probably done 25 because now we’re hearing about a potential longshoreman strike on the East Coast and the Gulf Coast, starting on October one. If that happens, it’s going to have a serious adverse impact on the economy and upward pressure on prices. But I think they got pressured to do more than 25 basis points, because the general view was that they were, they were late in raising rates, and they were, they were late in raising rates, and so I think they felt like, well, maybe we need to do a little bit more, because we don’t. We don’t want to be accused of doing too, too little, too late this time around. So, you know, we’ll see. You know, we are in election season, though, and you know, you know, there’s a lot of people that speculate. Well, it was 50 basis book cards, because they’re trying to do this. But so I’m not surprised. Personally, I would have done 25 but, you know.

Marc Killian 11:45
What? What’s the impact for the average person on when they do something like this? Obviously…

David Walker 11:51
Let me, let me tell you what I think the quickest impacts going to get, what you’re gonna what you’re going to earn on the asset side, is going to go down quicker than what you’re going to pay on the debt side. All right, ultimately, you’ll, ultimately, you’ll see some benefit on rates, you know, whether it’s mortgage rates or whatever else, okay, that tends the lag what they’ll pay you on, you know, on, you know, gigs or whatever you might have, all right, CDs, whatever you might have. And of course, you know, 50 basis points is real, but mortgage rates are over double what they were three and a half years ago. And credit card rates are, you know, at or near record levels, right? So you know, it’s not going to have a big impact, I think, over the next 48 days, which is what the election is. And I fully expect that they’ll end up doing more if inflation continues to come down, and of course, if we end up having a longshoreman strike that’s going to have an impact on economic growth and unemployment and things of that nature.

Marc Killian 13:07
Supply chain, yeah.

David Walker 13:08
Let me say one other thing about the Fed. I think the Fed, we need to refine the mission of the Fed. In my view, the Fed should be focused on one thing, overwhelmingly, that is maintaining stable prices, all right, modest inflation over time. The second thing they ought to be focused on is promoting economic growth. I don’t think it’s their job to focus on unemployment. And let me tell you why I say that, because if you focus on growing the economy, and if you focus on maintaining stable prices, it will help create a positive environment for full employment, all right, yeah, but the things that affect employment more than anything else are things that they don’t have anything to do with, okay, such as education policy, immigration policy, regulatory policy, tax policy, those things affect employment, welfare policy, those things affect employment more than anything else, and they’re all the responsibility of the Congress. The other thing I think we have, we have to rethink, is, I don’t like the fact that the Fed does a lot of self dealing in our own debt. When we ran these huge deficits during covid, the Fed bought, bought most of that new debt. It didn’t go to the market and pay market rates of interest, which is short term gain and holding rates down, but long term pain, when you have to rewind it over time, right? I think, you know, we’ve, we got to be careful that we’re not. We’re we have limitations on our ability to do those kinds of things, because it’s, you know, frankly, you know, one of the reasons that Roth exists is. It because the government, especially politicians, are very myopic. They think about today. And the reason that Roth came in was because you don’t get a deduction, so that means you get more taxes in the short term and less taxes in the long term. And they weren’t worried about the long term. They were just worried about the short term. So we have three maladies in this country, from the standpoint of politicians, myopia, nearsightedness, tunnel vision, looking at one issue at a time, not understanding the collateral effect, the domino impact. If you make a change here, here’s what’s going to happen there. And thirdly, self interest, namely, getting reelected. Those three things have combined to achieve an epidemic that threatens the future of our country and our families. What’s going on now is irresponsible, it’s unethical, it’s immoral. It needs to stop.

Jude Wilson 15:58
Well, David, I can’t tell you how much I’ve enjoyed this. You are probably the best umpire I’ve ever seen. You just call balls and strikes regardless of political party, and this has been educational. I love it, and you know, to thank you, and also to provide some value to our audience, we want to give away your book, America, 20, 2040, still a superpower question mark, as you said, and so we’re going to give away your book. We’re also going to give away a Roth conversion flowchart. Because several times people ask me about Roth conversions, but they’re not following any strategy, and they don’t know what consequences doing Roth conversions without having some really good advice. Now this is not going to give you all the advice you need, but at least puts you in a direction to understand some of the consequences and some of the things you should be thinking about. So if you would like a copy of David’s book, all you have to do is text 941, 260, 924. 92499, now we have a limited supply. Dave, I’d love to buy all your books, but I have to be fiscally responsible too.

David Walker 17:09
It’s just in time printing. So they don’t even print them until they’re ordered. Yeah, there you go.

Jude Wilson 17:15
Wonderful. So again, if you’d like a copy of David’s book, please text that number, we’ll give them out as long as supplies last, but everybody who texts that number will receive a copy of the flow chart. Thank you. Thank you. Thank you again. This has probably been the most educational episode that we’ve done, and I hope it helps a lot of people.

David Walker 17:35
Well, thanks to both of you and all the best.

Marc Killian 17:37
Thank you very much for your time. We appreciate it. Text that number. Send me the book. Just text that in there. Put to 941-269-2499, we’ll put that up on the show notes as well for folks to be able to see that so you don’t have to write it down. Thank you so much to David Walker for being here. Thank you for Jude for putting on the podcast. And as always, don’t forget to subscribe to us on Apple, Spotify and YouTube, and we’ll see you next time here on The Roth Guy.

Walter Storholt 18:04
Financial planning and advisory services are offered through prosperity Capital Advisors, PCA and sec, registered investment advisor with its principal place of business in the state of Ohio, centrist financial strategies and PCA are separate non affiliated entities. PCA does not provide tax or legal advice. Insurance and tax services offered through centrist financial strategies are not affiliated with PCA. Information received from this podcast should not be viewed as individual investment advice. Product discussions and illustrations are hypothetical in nature and will vary based on many factors, including, but not limited to age health product insurance carrier and product design, you should consult the insurance carrier website and policy for detailed information, for information pertaining to the registration status of PCA, please contact the firm or refer to the Investment Advisor Public Disclosure website, www.advisorinfo.sec.gov, for additional information about PCA, including fees and services send for our disclosure statement as set forth on Form ADV from PCA using the contact information herein, please read the disclosure statement carefully before you invest or send money foreign.

Transcribed by https://otter.ai