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Isaiah McCall

The Greatest Wealth Transfer in History is Happening Now

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Isaiah McCall
Isaiah McCall
 21 days ago
The greatest wealth transfer in historyUnsplash

The largest generational wealth transfer in human history is upon us, but I don’t think anyone is ready.

Baby Boomers, the generation of people born between 1944 and 1964, are expected to transfer $30 trillion in wealth to the younger generations over the next few years.

Meanwhile, what makes this monumental transfer different than the rest — besides the grandiosity of it — is the state of the world.

The old way of doing things is dying. Financial institutions are failing. Conspiracy theories permeate even the most stoic of minds. And the government is full of clowns, charlatans, and tricksters hellbent on preserving their status, not helping the middle and lower classes.

Trusting in these archaic financial is not wise. In short, no matter how much (or little) you make over the next decade, all of it is at risk from external forces and/or your own lack of financial literacy.

This is what you should know to prepare yourself during these uncertain times —

Don’t Diversify Your Portfolio

The spray and pray approach to investing does not work. You shouldn’t be using a shotgun to invest in companies, you should be using a sniper rifle.

Diversifying to a degree is smart, but don’t buy up 10 or 20 penny stocks or low market cap cryptocurrencies expecting them to be your lottery ticket out of poverty. As Peter Thiel, the co-founder of PayPal says, it’s immoral to treat companies like lottery tickets.

“I think the real reason people spray and pray in their investing, is that they’re lacking in any conviction, and perhaps because they’re too lazy to really spend the time to try to figure out which companies what companies are ultimately going to work.” — Peter Thiel, Founder of PayPal

If you want better exposure to the market then invest in a mutual fund or ETF like ARK Genomic Revolution or Vanguard 500 Index Fund. At least don’t be one of 50% of Americans who are too scared to invest at all in the derivatives market.

That’s how you lose in the great wealth transfer.

The Government Will Get Much Worse

Do not rely on the government for anything. They will disappoint you every single time. Use unemployment or any governmental assistance at your serious peril. Deals with the devil always come with a catch.

My sister received unemployment last year after coming down with COVID-19 in April. She was recently told by agents she’d have to pay all $10,000 of it back because she wasn’t qualified despite losing her job. They didn’t care that she had statements proving she was hospitalized.

Take full responsibility for your life. Don’t rely on the government.

2 Surefire Assets to Grow Your Wealth

1) Roth IRA’s — Become a Millionaire When You Retire

Roth IRAs offer a unique tax advantage when compared to a 401(k): You can withdraw your money in retirement tax-free.

That means, your money will be growing 5–7% annually, and you can withdraw every penny tax-free when you’re older.

Important to note: You’re only allowed to invest $6000 per year if you’re under 50 years of age ($7000 if you’re over 50). This means you could invest $500 a month to max out your earnings.

Assuming you earned a 6% return, it would take you a little over 41 years to hit the million-dollar mark if you maxed out.

2) Triple-tax Advantaged Health Savings Accounts

HSAs are a much better investment than 401(ks) because they are triple-tax advantaged. This means you receive pre-tax advantages, tax-free interest, and tax-free payments for qualified medical expenses.

Health expenses are like the great flood from the ancient biblical stories. Once it hits it can wipe you out entirely. Your only hope is to build an ark that steers you through the chaos.

The Truth About Bitcoin & Ethereum

The current financial system is beyond repair. Historically speaking this makes sense. Whenever a country has converted to fiat currency — money that isn’t backed by anything other than belief in it — it’s failed due to hyperinflation or a new system eclipsing it.

Enter cryptocurrency.

DeVere, a financial advisement website, found that more than two-thirds of the Millennial clients it surveyed said that they preferred Bitcoin to gold as a safe-haven asset.

This makes sense too. The 2008 financial crisis happened right when they were beginning adulthood. I wouldn’t trust our financial system either.

Bitcoin’s greatest strength is that you do not need to trust anyone in this financial system. It’s trustless and uncensorable.

Cryptocurrency will have a direct role to play in the great wealth transfer. The question is, which one of them? My money is on Ethereum and Cardano which are more efficient, interoperable and technically superior to Bitcoin.

But I don’t see Bitcoin ever going away either.

Once the banks start buying crypto to save themselves from inflation it’s game over man, game over. They’re already doing it by the way. And as these institutions buy more the price of crypto will skyrocket so that average joes like you and me can’t meaningfully invest. Thankfully it’s still early. Lucky you.

Modern Monetary Theory is Broken

The Federal Reserve promised that quantitative easing — or an injection of printed U.S. dollars — will not taper off until the labor market sees substantial growth.

But look around you. Why are there so many “Help wanted signs?” It’s because no one will go back to work when they can game the unemployment system and receive universal basic income (stimulus checks).

The laughably bad April employment report reflects this.

Right now we’re in one giant Modern Monetary Theory experiment. It’s playing out before our very eyes. What MMT does is question the link between money printing and inflation. It posits that it doesn’t exist.

MMT postulates that money printing won’t cause inflation if Americans spend spend spend. The problem is, however, that’s not what anyone is doing. Not even in the slightest. We hit record savings rates last year and record amounts of people invested in crypto and stocks. Combine this with less production and you have a recipe that steamrolls American purchasing power (especially those in the middle class).

If you want to enjoy the great wealth transfer properly own less cash and more hedges against inflation. This could be commodities like gold or silver, collectibles that appreciate in value (like Beanie Babies!), cryptocurrency, or real estate/land.

The U.S. economy is rife with corruption. It’s best to ease your way out and not in right now.

The Takeaway

In summation, this is what you should look out for as substantial amounts of money changes hands with younger generations —

  • Not over-diversifying your portfolio and treating the stock/crypto markets like a casino.
  • Not relying on the government which is built on crony capitalism and taxing the middle class to pay for useless programs.
  • Make surefire investments like investing within a Roth IRA or into an HSA
  • Consider inflation hedges like gold, cryptocurrency, or collectibles as the U.S. government puts MMT into full-effect

If you feed off the corpse that is traditional finance you will burn through any sort of wealth you acquire right now. This isn’t a time for beginners. But that’s alright. If you accept your place as a lifelong student you can overcome any turmoil in the market.

Brace yourselves. We’re in for a bumpy ride.

Ever since I was a child it was my dream to become a financial advisor. Unfortunately, it never came true. Therefore I am not a financial advisor and you should do your own research and not just listen to random people on the internet. Nothing contained in this publication should be construed as investment advice.