Good afternoon,
These days it matters little where I happen to be located geographically as I compose the WMR, so I’m generating this week’s message from sunny south Florida. It’s getting a little, or a lot, too cold to work from the patio up in MI and we’re not yet allowed back into the cigar room at the golf course, so I took up an offer to visit the beach and get some genuine vitamin D in person. This is just my opinion, but life is brighter in sunny warm weather.
I’m not the only one. Like I’ve pointed out before, Florida, Texas, Arizona, Nevada, the Carolinas and a few other states will be gaining people and companies from higher tax and business unfriendly states. Especially hard hit is California. Despite its beautiful locales and mostly great weather, companies and people are leaving rapidly. https://www.cnn.com/2020/12/13/tech/silicon-valley-moving-to-austin-miami/index.html
A quick internet search shows that it’s almost 4x more expensive to rent a one way truck from CA to TX than the reverse trip. Ditto for New York to Florida. It’s not complicated, money (and correspondingly the people who strive for it) migrates to where it is treated the best. High taxes, too much regulation and high cost of living are not friendly. Throw in cold weather in some places (are you listening Illinois, Connecticut and New Jersey?) and that’s a recipe for people to leave. Unless the leaders in the unfriendly states read the writing on the wall and change course, the population drain will continue.
Here is a succinct story from a NY to FL transplant.
https://www.foxbusiness.com/lifestyle/new-york-florida-2020-covid-pandemic
I’ve mentioned Elon Musk and Tesla in the WMR many times in the past so let’s keep the Cybertruck rolling and mention him again. He too is leaving CA for TX. Tesla is building a factory there and Musk himself has moved there personally. https://www.cnbc.com/2020/12/08/elon-musk-confirms-he-moved-to-texas.html?&qsearchterm=elon%20musk%20to%20texas
Tesla will be joining the S&P 500 index later this month, which has been understandably beneficial to the stock price. I say “understandably” because whenever a company is added to the index, any manager or any fund that tries to mirror that index will now have to own shares in the company, so the demand for the shares go up which can inflate the price. Mr. Musk, who is unquestionably a bright guy and good businessman, is using the recent run up in TSLA stock to issue more shares and raise another $5 billion of operating capital.
Very smart move on his part. Tesla makes more money, way more, selling stock than they make selling cars. At least for now.
Tesla is worth more than GM, Ford, Toyota, Volkswagen and BMW, combined. That’s a lot.
I’m not allowed to offer buy or sell opinions in the WMR, so I won’t.
Keeping it short this week, this is a gentle reminder that there are only a few business days left in 2020 in which to wrap up those year end tax planning, retirement plan and charitable contribution strategies so if you haven’t done those things yet, make sure to get them completed in time. And it’s also time, past time really, to start thinking about what needs to be accomplished in 2021. We will eventually be past this current crisis and it’s time to start thinking about how we might like to look after we’re beyond it.
This week’s chuckle is from Seinfeld. Remember when Kramer retired to FL? https://www.youtube.com/watch?v=IP2WEiWVY4M
LF26 – “There is no such thing as bad weather, only different forms of good weather.” – John Ruskin.
Have a great week and stay healthy.
The opinions expressed are those of Michael Acho and not necessarily those of Lincoln Financial Advisors Corp. CRN-3376029-121720
Michael J. Acho, MBA, CFP®
Private Wealth Advisor
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