A quick breakdown — in case you don’t have the time.

If you’re a listener of the show, you know we love passive income.

The passive income-loving folks at NEOS Investments just launched their own podcast and the first episode is live on YouTube! They’re going to get on Spotify, Apple Podcasts, and everywhere else too — but for now throw them a subscription on YouTube!

Government spending is out of control.

As Stanley Druckenmiller famously said — our government spends like drunken sailors. Since his inauguration, President Trump has put Elon Musk in charge of the Department of Government Efficiency (DOGE) with the mission of mitigating government waste. According to Elon, DOGE is trending toward saving the American taxpayer $1B per day throughout 2025 — that’s potentially $365B in savings.

But reeling in government spending is only one side of the equation — we must also increase government income.

Historically speaking, there are two ways to do this — raise federal income tax rates on the American people and / or tariff the important of goods. As you’ve likely seen this week, President Trump announced his intention to implement tariffs on goods imported from both Mexico and Canada.

At the moment, we’re in a “wait and see” point of this supposed “Trade War.” So let’s use this time to reflect upon the Trade War we experienced under Trump’s previous Administration — January 2018 through June 2019.

Below is a (blurry) chart that illustrates the operating margin of the S&P 500 between 2012 and 2024 — with a white box outlining our previous Trade War. As you can see, the operating margins of the 500 largest and most profitable companies in the United States, on average, decreased by about -1.5%.

In the grand scheme of things, a -1.5% decline in operating margins isn’t a big deal — with that being said, if we see something similar happen in 2025 / 2026 it’s not unreasonable to expect a “re-rating” of their valuations.

Remember, the stock market is forward looking — the reason we experienced such a violent sell-off earlier this week is because analysts were trying to answer the question “If history repeats itself and margins compress by -1.5%, how many billions of dollars in profits are these companies now going to lose… and how will that discount back to current valuations?”

Today’s Rich Habits Newsletter is brought to you by Public, the investing platform trusted by millions. On Public, you can build a multi-asset investment portfolio of stocks, options, bonds, crypto, and more.

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👉 Ep 103: The 5 Types of Wealth w/ Sahil Bloom

In this week’s Monday-morning episode of the Rich Habits Podcast (linked here) — Robert and Austin interview Sahil Bloom. He’s on a mission to redefine what it means to live a wealthy life.

Here’s what they talked about:

Don’t forget to order his new book, The 5 Types of Wealth! It’s a page-turner and includes some incredible stories, anecdotes, instructions, and motivation.

👉 Q&A: $850K in SpaceX Stock, Building a Barndominium & $50K in Credit Card Debt

Here’s a link to the Q&A episode that was posted this morning.

We answered questions from: Aquiles V, Trey D, Brendan O, Keiko T, Brady B, Benjamin F, Austin M, and Mr. F.

You can submit questions for these episodes by asking them inside of the Rich Habits Network, replying to this email, or sending us a DM on Instagram.

The Rich Habits Podcast is available on Spotify, Apple, iHeart, YouTube, and wherever else you get your content!

Crypto adoption is clearly growing in 2025.

Three massive things are going on in government right now that are bullish for the crypto world. While many are calling for a top in the market, I believe we have a ways to go.

#1 — Trump signed an executive order establishing a sovereign wealth fund (SWF) for the United States. If you’re not familiar with this term — it’s a state-owned investment fund that invests in real and financial assets like stocks, bonds, precious metals, alternative assets, and more. Taxpayer dollars are being spent, but taxpayers can also theoretically reap the rewards of a SWF that grows its value over time because it’s good for the U.S. “balance sheet.”

The U.S. SWF will be led by Howard Lutnick and Scott Bessant — both massive crypto bulls. Lutnick has even said that he has “hundreds of millions” in Bitcoin exposure.

Here’s a list of other SWFs from around the world, including $1.7 trillion for Norway and $1.3 trillion for China.

#2 — Trump has appointed David Sacks as his “Crypto Czar” and the “Crypto Task Force” has been established with numerous members of Congress. Sacks said during a recent press conference that he “looks forward to working with each of you in creating a golden age in digital assets.”

#3 — Lastly, we have a sitting president that plans to launch a “Bitcoin Plus ETF” via his media company — Trump Media & Technology Group. Not to mention, World Liberty Financial — a company that’s independently operated but connected with his family — has been pouring hundreds of millions into crypto.

February is typically the worst month of the post-election year.

That said, what comes after tends to be just fine.

Market history tells a clear story: When the S&P 500 gains at least +2% in January (like it did this year), the index delivers a median return of +13.4% over the next 11 months, bringing the total calendar year return to +19.3% — with an 88% success rate!

So while short-term pullbacks or market weakness may grab headlines, history suggests that buying this fear has consistently paid off for the long-term investor.

This is exactly why I continue to stress the importance of a “less is more” approach. Investors who stay focused on long-term market dynamics — rather than getting caught up in daily noise — tend to come out ahead.

We’re in a bull market, and we have been for more than two years.

Trying to time the end of a bull market has rarely been a winning strategy. Markets typical grind higher by climbing a wall of worry, and history shows us that asset prices trend higher over time.

With that being said, I continue to believe double-digit pullbacks in some of our favorite names will continue to happen throughout the year — and I’ll be buying the weakness.

Below is a list of our featured partners that we’ve vetted — with whom we have a personal relationship. Browse these exclusive offers curated just for you:

Disclaimer: This is not financial advice or a recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

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