What Trump's Economic Plan Means For YOU!
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What's up, rich friends? Welcome back to another episode of Net Worth and Chill. I'm your host, Vivian Tu, aka your rich BFF and your favorite Wall Street girly. If you're listening to this, Trump just got inaugurated. And there has never been a more important time to become financially literate. Donald Trump won the election in no small part due to his stance on the economy and the policies he implements are going to impact you.

And whether you feel powerful or powerless right now, it's really important that you understand what's going on and what moves you can make to put yourself in the best position possible. So this episode is going to cover a few major changes that we can anticipate and what you need to do to take advantage or defend against what's about to happen. Let's get into it. Okay.

So first up, let's talk about corporations. Donald Trump has said that he plans on providing corporate tax cuts and limiting government regulation. And this has been something that has been a strong talking point of pretty much all Republican presidents, but in particular with the Trump administration. And no surprise, when corporations are allowed to do whatever they want, they're going to prioritize one thing.

making a lot of money. They do not care about literally anything else. And again, this is not even a knock on corporations. Publicly traded corporations are legally bound to do right by their shareholders. And this typically spurs economic growth. And if you're an investor, you will get to participate in this money making. Yay!

But the problem is different socioeconomic classes and consequently ethnic groups and genders and pretty much every other identity class invest at vastly different rates. In 2022, 66% of white families own stocks directly or indirectly.

compared to only 39% of Black families and 28% of Hispanic families. This shows a significant disparity in investment rates across racial and ethnic groups, which often correlates with socioeconomic status. Higher socioeconomic groups allocate a much larger portion of their wealth to investments because they can afford to.

No surprise, when your basic needs are met, you are able to take any discretionary income and spend it on investing. But if you're more worried about apples than apple, of course, you're not going to have the money to necessarily do that. So ultimately, the rich get richer through investing, but a lot of poor people won't be able to participate. And again, I do not want to sound tone deaf, but

You cannot invest your way out of poverty, but...

If you're a part of the majority of people who live somewhere in the middle, not uber wealthy, but also not truly just making ends meet, investing will be the difference between your ability to be a have versus a have not. And this is then money you can put towards your future or causes and issues you care about, whether they align with the Republican Party, the Democratic Party, or just your personal moral compass. So it is important for you to get rich. It is important for you to invest.

So now you're probably listening to this or watching this and you're like, okay, Viv, you've talked so much about why it's important to invest, but how do you do that? And honestly, what's the easiest, simplest way? Because I don't have time for that. Great. Just get a robo-advisor. You can be invested in 45 minutes. Think about it like this.

A robo-advisor is just like Spotify, but for your investments. You know how you listen to certain types of music and at the end of the year, Spotify gives you this wrap-up report of what you've listened to, your Spotify wrap, but also they make a playlist of like all the stuff that you've had on like repeat or things that you might like because you like the songs you like. They know that because of your listening data. With a robo-advisor, you can do something really similar. You go online, just literally Google best robo-advisor 2025,

And then you are going to find a robo-advising platform where you like the user interface, the user experience, the app makes sense to you, the platform makes sense to you. And then you are just going to take a quick quiz about your money goals. You're going to answer questions like, hey, how much money do you make? How much money do you have? How much debt do you have? When do you want to retire? What's your family situation look like? Where do you live? Because that'll help determine your tax situation. And once you have that done, the robo-advisor will just go...

And then spit out a diversified portfolio that makes sense to you. And the best part is they'll probably send you an email once every year or every two years to ask you to take that same quiz again. And the reason is, is things change. Maybe you have kids, maybe you get married, maybe you get divorced, maybe you get a new job, maybe you start making more money or less money or all of these different things can happen. You don't know.

Investing is an art, not a science. There is no perfect answer, but a robo-advisor gets you pretty close. The fees are manageable enough, much lower than a human advisor, and you're going to be able to be invested sooner rather than later. And honestly, time in the market beats timing the market or picking the perfect investment every single time. Okay, now moving on to another hot, hot, hot talking point, childcare.

So on the campaign trail, Trump suggested expanding the child tax credit, which provides financial assistance to parents in the form of tax breaks. He hasn't said too much else about this, but during his first term, the 2017 Tax Cuts and Jobs Act temporarily expanded the child tax credit from $1,000 to $2,000. That credit is set to expire at the end of 2025.

But with approval from Congress, which is, to be clear, now a red majority Senate and a red majority House, Trump could extend those tax cuts or introduce a new policy.

I mean, VP J.D. Vance even made an offhanded comment about how it could be $5,000. Again, we don't know what's actually going to happen. And we do have to remember that these talking points are just talking points until these policy changes actually are enacted. So if you've got kids and these funds are vital to your family being able to afford child care or key services, you need to make that known.

Contact your local representatives, email your senators, tell them that you care about this, that this matters to your family, and make sure they keep it a priority. Additionally, there is something else that you can do, which is called a dependent care program.

This is money that you are putting aside that is pre-tax that you can then spend on caring for your dependents, as the name suggests. And this is a really great way to take care of some of those costs. Not only can it be used for young children and the child care that you have to do for them, but also if you have older parents and need some of those credits to help them take care of, you know, somebody to come into their home and help with certain things.

medications or help them with their day-to-day, a dependent care FSA is a really great strategy. So look into it, consider it. Now we've talked a little bit about the childcare. Let's go on to the flip side and talk about our elders. Social security. Donald Trump has promised not to cut into the social security budget.

But he's also made some pretty contradictory statements in that he said he wanted to eliminate federal taxes on people receiving that Social Security tips and overtime pay.

And this doesn't make sense because tax revenue is used to fund federal aid programs like Social Security. So doing this would ultimately deplete what remains of this program even further. Under Trump's proposal, the fund reserves for Social Security would run dry by 2031, according to the Committee for a Responsible Federal Budget.

So let's talk a little bit about social security. It is, and I say this a little tongue in cheek, a little jokey, one of the largest Ponzi schemes that we have just accepted as a society, right? You've got boomers and Gen Xers who have paid into social security. Essentially, it's part of the taxes you pay on what you make. And then in their old age, their expectation is to be able to take money out. This worked for a while, right?

But then people started living longer. The birth rate started to decline. So there's now fewer people in, you know, certain demographics than there are supporting the larger demographics of the generations before them. So,

people like myself who I'm a millennial gen Zers, gen alpha, and even gen beta, like we are likely going to eventually in our lifetimes pay into a system that we will probably not see a penny of unless there is some major change that happens. And so for you, I think it's really important for you to think about the fact that if you are banking on social security as your retirement plan,

That's probably not a good idea. Now, back specifically to Trump, he has not yet gone through with these plans of reducing or getting rid of Social Security taxes on things like overtime pay and tips just yet. And even under a Harris administration, things like I mentioned, we're not looking good for this program.

But regardless of who you are, I would not bank on Social Security to be able to support you in retirement. I would certainly have my own plan and my own money. So this is a really good time to think about contributing as much as you can towards your tax advantaged retirement accounts like your 401k, your Roth IRA or traditional IRA, because ultimately no president or governmental body is going to be able to save you in retirement.

And the sooner you realize that, the better. You're going to have to plan for retirement yourself. And if you are over the age of 50 and panicking, just remember that you can also make catch-up contributions. So you and anybody over 50 are actually able to put more towards your retirement than anybody else. The exact amount changes every single year. So be sure to check the updated 2025 tax code for the exact amounts for each of these different types of tax-advantaged accounts.

But if this is something you're worried about, I'd certainly prioritize it because there are likely to be fewer and fewer governmental provided retirement benefits versus more and more. Okay, now let's pivot to something that has been the topic of headlines, fear-mongering, pricing, and tariffs. So...

Some people don't completely understand what tariffs are or what will happen when Trump raises them. So let's just break it down really simply. Simply put, tariffs are taxes. And in this case, on foreign imports. And the main thing people get wrong is who pays them. China isn't going to start paying more taxes to send us their stuff. We, as American corporations, are going to be the ones footing that bill.

And I know people are like always going to say like, oh, well, I don't need anything from China. I don't need anything from these other countries. Yes, you do. Your Brazilian coffee, the fast fashion you wear from India and China. I mean, the girl is getting injectables. Let me tell you those drugs. Those are made in the UK and Ireland. Corporations are here to make money.

Health and Human Services Secretary nominee Robert Florey Kennedy Jr. went before the Senate today in fiery confirmation hearings. Did you say Lyme disease is a highly likely militarily engineered bioweapon? I probably did say that. Kennedy makes two big arguments about our health, and the first is deeply divisive.

He is skeptical of vaccines. Well, I do believe that autism does come from vaccines. Science disagrees. The second argument is something that a lot of Americans, regardless of their politics, have concluded. He says our food system is serving us garbage and that garbage is making us sick. Coming up on today explained a confidant of Kennedy's, in fact, the man who helped facilitate his introduction to Donald Trump, on what the Make America Healthy Again movement was.

And when they spend more to get stuff, they're going to pass that cost onto you. And just because your product or whatever has a sticker that says, oh, American made,

It doesn't mean that it was entirely made in America. In fact, you can actually have something say made in the USA if all of the parts come from different parts of the world and then they're just assembled in the US. So we have to be really, really careful. This is going to impact everybody.

And another arguing point that people like to say is that if we put in these tariffs, oh, amazing, people are going to buy more American-made goods. It'll be cheaper. It'll be better. It'll be homegrown. No, it won't. I think we are forgetting things like exchange rates, cost of living, and the fact that developing nations exist. The monthly minimum wage in Bangladesh is $113 U.S.,

Who in their right mind in the U.S. would work for $113 a month? Name one person. Name one corporation who can get away with paying somebody that.

You can't. We as a country cannot make stuff for as cheap as other countries. Not only are raised tariffs going to make the cost of living go up for everyone, they're going to disproportionately impact lower income folks because these baseline necessities are going to be a larger portion of these people's incomes because tariffs are something called a regressive tax.

So when you, you have progressive and regressive taxes, progressive is essentially the more you earn, the more you pay. Whereas a regressive taxes, the less you earn, the less you have, essentially the more expensive something is or the more it costs you.

So I think a great example of this cost difference would be toilet paper, right? So you've got your uber rich people who are buying that super soft Charmin ultra strong. This is what I use by the way. Like I, your girl has IBS. Like I need to have that super soft toilet paper. I am not chintzing here. I don't think that.

Elon Musk and Paris Hilton and the celebrities in Hollywood are using toilet paper that that's, that is that much more expensive. They're using the Charmin ultra strong. Great. The family that is really just making ends meet. They're probably getting crappy one ply toilet paper. Okay. But no matter who you are, you need to buy toilet paper.

But the price differential between the crappy one ply and the really nice stuff is not that large, but in relation and in percentage of what it's somebody's take home pay is

It is so much larger of a portion of a broke person's take-home pay than it is of the rich person's, right? Like the more expensive thing is a much smaller percentage of a rich person's take-home pay than the cheaper item is of someone who doesn't have that kind of money. This is really frustrating because this happens in so many other industries. Think about it, right? Like you've got rich people buying the grass-fed beef, all organic, no GMO, great, right?

That's probably a couple bucks more than the crappy whatever version of it is. But again, these increases in costs, whether they be 50 cents or a dollar, are going to have a bigger hit on the pockets of people who make less. They just don't have those dollars to even stretch.

This is a huge thing that we should be keeping our eye on. Pro-Trump Republicans are saying that people are blowing this tariff thing way out of proportion. He's going to use it as a negotiation tool. He's not actually going to do this. And then doomsdayers on the other side of the aisle are screaming at the top of their lungs to buy stuff now, hoard the paper towels. It'll be like COVID all over again. I'm telling you, I, and I think you, should take a more muted approach. That said...

I just do not see a reality where tariffs don't lead to a higher price in your everyday living, in your everyday goods. I think they're going to have a huge impact on the American consumer and things are going to get more expensive.

But that doesn't necessarily mean you need to stockpile. It realistically means the folks at the top are barely going to notice a difference. The folks in the middle will need to be more mindful when spending and they may have to switch to cheaper alternatives and also be really mindful about shopping in bulk and using coupons and getting manufacturers discounts. And frankly, some of the brands that they're used to shopping for, they just may not be able to afford anymore because

But the real group that's going to suffer is the folks in the bottom 25%. They are going to have a much harder time affording basic necessities. And if they are not militant, and I truly mean militant, stringent, like so, so tight about budgeting and responsible spending, things could get very bad very quickly. My two cents, take it or leave it.

So we've talked about tariffs, which is just a fancy word for taxes, but let's talk about taxes for us as people. Trump has proposed a wide variety of tax policy changes.

But taken together, these proposals would on average lead to a tax cut for the richest 5% of Americans and a tax increase for all other income groups per the Institute on Taxation and Economic Policy. Okay, so I wanna be very, very clear. I wanna actually look up the data so I can share it with you. When it comes to taxation, the poorest 20% of Americans

would likely see a 4.8% increase in their taxes. The second 20% would likely see a 3.5% increase in their taxes. And that covers everybody who makes up to $55,000. The middle 20%, so 55 to 94-ish, you would see a tax increase of 2.1%. The fourth 20%,

from 94,000 to 157,000, you would see a 1.4% tax increase. The next 15%, from 157,000 to $360,000, you would see a 0.3% tax increase. But then this is where things start to get interesting. The next 4%, so people who make 360,000 to 914,900 would actually see a 1.3% tax reduction

under these policies and the richest 1%. So people who make $914, $900 a year and more would see a 1.2% reduction. That to me does not make sense when it comes to wanting to basically grow the middle class. We've heard the headlines of a middle class is shrinking year in, year out.

But it sounds like things are going to get a lot harder if you have no money and easier, which you don't need, if you are at the opposite end of the spectrum. And I say that as someone who has their annual income posted online for everybody to see. It's no surprise. I tell you in all my videos, I'm a millionaire. I make seven figures every year. I am going to get a tax cut, but I don't feel good about it. I don't feel good about it because frankly,

I don't need the tax cut. It isn't going to change how I live my life. But some of these policies could be the difference between whether or not a family eats. And for me, that is quite frustrating to see. But before we all get up in arms, this is not to say all of Trump's proposals will actually come true.

But if some of the main tax changes are implemented, the top 5%, particularly the top one and the top four, you know, we're going to see some large tax cuts generally leading to that shrinking middle class. And

Honestly, I almost didn't even talk about taxes in this episode because there isn't too much you can do here. It's really a wait and see. A couple things that you should know. We have a red Senate and a red House and a red executive branch coming. But it's really important to see how this shakes out as it'll impact how much you get to keep in your pocket versus how much you're coughing up to the government.

But unfortunately, there isn't too, too much you can do about this aside from writing your legislators, making sure that they know what you care about. But we also have to be mindful of where we're spending our dollars because certain lobbying groups, ultimately high net worth individuals that may benefit from certain industries are going to lobby a certain way.

And they're not going to be the same way that you as a regular person are going to want your incentives aligned. So again, taxes are tough. Just keep an eye out. It's really important that you understand how that works. But before we get to our final talking point of Trump's financial implications, I do want to give a quick breakdown of how taxes work because

It frustrates me to no end when the guy from your high school who took remedial math and, you know, doesn't know anything about money is soapboxing talking about, don't take that bonus. Don't get that raise. Don't take that promotion because it's going to bump you into the next tax bracket and then you'll pay more and you won't even make as much for working harder. That's not how that works. Okay. Taxes are marginal. And if you still don't understand, I'm going to explain it to you in a way that everybody can. Okay.

Suddenly, instead of getting paid in dollars, which are all green and all look the same, you are going to get paid in pizzas. And these pizzas come in different varieties. So for the first 11,600 pizzas that you make, you get pesto flavor.

And everybody knows that pesto flavor is disgusting. Whether you are Richie Rich or Broke Becky, you are getting paid in pesto pizza. And the government's like, oh, pesto pizza, that's kind of disgusting. We'll just take 10%. You're good. Like, we'll take 10%. It's no problem. But once you start making more than 11,600 pizzas...

you level up to the next flavor, mushroom. The government likes mushroom a little bit more than pesto. And they're like, okay, cool. We'll take 12% per pie. Great. At this stage, nobody has gotten any good pizza toppings yet because we all level up at the same levels. These brackets are the same for everybody. Unfortunately for Broke Becky,

She's just getting that. That's it. She doesn't make any more money. She doesn't get any more pizzas. Great. The government's not taking too much from her because she didn't have that much to begin with. But at the next level, at the next bracket, we get sausage. And suddenly the government's like, yum, we love sausage. We want 22% per pie. Great. Next level, pepperoni. Everybody loves pepperoni. They want 24% per pie. That is where a lot of people stop.

But if you keep going, Richie Rich, he is going to unlock some incredible flavors. I mean, this guy is making tons of money. He's making tons of pizzas, right? So he's going to unlock flavors like barbecue chicken, buffalo, and even the ultimate pizza flavor, Hawaiian, of course. And the government loves those pies. So they're going to take 32, 35, 37% of each type.

That is what marginal means. When you move into a higher tax bracket, you aren't suddenly giving away a bigger slice of every single pizza. You are only giving away a bigger slice of the next incremental flavor. And...

Now, I just want you to replace the word pizza with dollars. So now you know that it only taxes higher for incremental dollars and you will not make the mistake of turning down bonuses, raises or promotions. Those are always a good thing. You will always make more money. So do not fret. Get your money. And into our final financial implication of a Trump presidency. Let's talk about something that all of us need. Housing. Housing.

Trump's policy platform is largely pretty supportive of home buying. He wants to promote home ownership through tax incentives and support for first-time buyers. He'll also likely cut red tape to encourage business and real estate developments. Housing costs are often largely dictated by local regulations instead of national policy. So, you know, you know the saying, location, location, location. That said, his plans for mass deportations could shrink the labor force in the construction sector.

putting a strain on an already tight supply of housing and in turn causing higher prices.

But we also do know, generally speaking, the Fed plans on continuing to slowly lower rates. They're not going to be dropping rates as rapidly as they have recently, but hopefully we're going to see the cost of borrowing come down, meaning mortgages themselves are going to be less expensive, even if housing prices do go up a bit. If you're curious about buying a house and whether it's a good decision versus renting, I highly recommend everybody go online and just Google this,

New York Times buy versus rent calculator. It's a great way to input all of your personal details since this is such a personal conversation and see if it might make sense for you to consider purchasing a home. It'll also help you take into account things like property taxes and hidden costs like maintenance and taking care of a place that you own. You know, there's a little bit of emotion that goes into that.

So whether you ultimately want to keep renting, if you want to buy a place, just know that some of these changes may have an impact on what buying costs, but ultimately that'll also impact what renting costs. Because if your landlord is paying more for new units and you are getting into a new unit, that might change what your rent is. So again, keep an eye on how those regulations shake out. It's really important that regardless of what decision you make, you are actively making that decision

You want to make sure you have an internal locus of control. You can control things. You can change things. And don't be afraid to make decisions that make sense for you, not just based on what everyone else in your life is telling you to do. Okay. So to kind of wrap up this episode and close us out, ultimately,

The net net takeaway here is that no president or government is going to be able to save you. There are certainly administrations that are going to be able to make it easier. There are certainly administrations that may be more positive for you and your financial situation. But just because these things impact you doesn't mean you can't make changes in your own life to better your living situation as well.

We have to make smart financial decisions for ourselves and our families to ensure that we can live the best lives possible. But it's also important to keep an eye on all of these changes as they will have a meaningful impact on the next couple years to come. I hope this episode was helpful in explaining some of the changes that are likely to happen and how they'll impact you.

If there's anything that you take away, it's that you and your loved ones should have a conversation around your finances and how you guys can best set up a system to manage your money, responsibly invest as much as possible and plan for the future. So thank you guys for joining me and I'll see you guys next week.

Thanks for tuning into this week's episode of Net Worth and Chill, part of the Vox Media Podcast Network. If you liked the episode, make sure to leave a rating and review and subscribe so you never miss an episode. Got a burning financial question that you want covered in a future episode? Write to us via podcast at yourrichbff.com. Follow Net Worth and Chill Pod on Instagram to stay up to date on all podcast related news. And you can follow me at yourrichbff for even more financial know-how. See you next week.