How we’ll generate $5 trillion of wealth for millions of Americans
What if we helped the 100 million retail investors save on average $5,000 every year? That means in ten years, we can have potentially saved people like us $5 trillion and earned ourselves an additional $5 trillion in wealth.
For the last decade, there has been a pervasive problem in our politics and culture — the widening wealth gap in America. In the last few years, the top 10%, those with net assets above $2.5 million, amassed $91 trillion worth of wealth while the bottom 90% accumulated only $40 trillion.
How have the top 10% wealthiest Americans amassed more than twice the amount of wealth than the bottom 90%? Taking a deeper look at the top 10%’s portfolios may help us answer.
The top 10% own 89% of the stocks and mutual funds held in the United States, and fortunately for them, the stock market has been on a massive bull run in the last decade. The S&P 500, an index that tracks the biggest companies in the United States, returned 258% from 2010–2020. That means someone with a $100 million portfolio would have ended 2020 with $358 million just by owning stocks and mutual funds investing in the market index. A primary example of the wealthy’s key belief: let your money work for you.
Letting your money work for you means investing in assets that appreciate without letting things like management fees or taxes reduce your total return. It wouldn’t make sense to invest in something if you had to pay 20% in fees and 80% in taxes, for example. The wealthiest individuals look to maximize their gains and minimize their expenses. Pretty obvious right? So why don’t the 90% of us invest in stocks and mutual funds as well as understand the importance of minimizing costs?
Up until a few years ago, investing was a pretty complex and secretive practice. Thanks to Robinhood and social media forums, retail investors comfortably learned the basics and entered the arena. In 2020, they traded actively enough to account for as much volume as mutual funds and hedge funds combined. So the 80% are starting to understand the power of compound interest and investing in a booming stock market.
Sadly, minimizing costs is still an area that still needs massive improvement. Investing isn’t what you make, it’s what you get to keep after taxes. Most new investors don’t understand that fees and taxes can eat away a significant portion of their returns. In some instances, taxes can total more than gains. In the case of one Robinhood trader, he made a $45,000 profit but owed $800,000 in taxes. He clearly wasn’t aware of the wash sale rule, which inflates your tax liability because it disallows certain losses to be deducted from your gains. Wealthy investors, however, typically avoid these miscues because of their army of seasoned tax experts and advisors. The rest of us have to rely on a mix of friends, family, and social media for guidance. Here’s where we’re stepping in with technology to level the playing field to help retail investors start generating long-term returns that can rival the Berkshire Hathaway’s or Blackrock’s of the world.
By giving retail investors technology that automatically game plans tax strategies, they’ll benefit from lower yearly tax liabilities, meaning more money to invest! Here’s the power of compounded tax savings: if a regular investor saves $5,000 in taxes annually with our software and reinvests that amount into a stock market generating 10% yearly, they’ll turn that into $100,624.55 at the end of ten years. So that’s $50,000 in tax savings that led to an additional $50,624.55 in gains. That’s why tax-loss harvesting and other tax strategies are critical for retail investors and why the wealthy have such a leg up. You can simultaneously save and make more money at the same time!
Now, here’s the crazy thought — what if we helped the 100 million retail investors save on average $5,000 every year? That means in ten years, we can have potentially saved people like us $5 trillion and earned ourselves an additional $5 trillion in wealth. Imagine what an extra 10% in after-tax investment income can do for you. How much sooner can you buy your dream house or retire ahead of schedule?
Sign up today and get started with a free 30-day trial. We promise we’ll do everything we can to help you become a better, wealthier, more prudent investor.
Sincerely,
Jaimin Desai
