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The Borrow Smart Chronicles - Fear and Market -vs- Management
Episode 4
Todd Ballenger
December 01, 2023
"Where your fear is, there is your task."
Weekly Spotlight: Cycles happen.
My question for you is - how are you managing this cycle? The black curve below is the Market. The Market is always right. It will go up and down. Rates go up and down. Everything cycles. That’s the Market stating it's truth now.
The green dots - represent your Management. Management is your capacity, capability, creativity, and/or courage that you deploy to make the up cycles more up, and the down cycles less down. Be aware of the market cycles. Then ask how you are learning to manage them.
a BORROW SMART CONCEPT
What is Liability Management?
What is liability management? It’s about a broader perspective - it is about having a major impact working with clients to minimize their cost of home ownership over their lifetime. Positioning a client for life to see the value you provide in a new light. Helping clients and partners think differently about what you do for them to make your value both visible and valued…
READ THIS NOW! - It takes less than an hour, and it distills how to position financial literacy to work with clients, realtors, and advisors (insurance, accounting, and financial).
 The old saying ‘seeing is believing’ is backward, the real truth is ‘believing is seeing’ - once you believe you see opportunity everywhere |
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LIABILITIES
What’s Happening?
housing affordability is likely to improve in 2024 from lower rates and lower housing prices - it’s less worse, but that’s an improvement!
this is a useful chart for consumers - buying something smaller that you refinance later isn’t the end of the world, and it can allow greater wealth creation in time
help consumers with their problems - increasing cash flow through debt consolidation, learning to manage cash flow, improving credit, all give back in a real way
REAL ESTATE
What’s Happening?
A big shift this past two weeks, as articles about lower rates, it being a good time to sell and move, etc. - this trend needs to hold for us to see sentiment shift
NAR data on who is buying and at what age
H/T - Logan Mohtashami
The Case Shiller 3-month moving average and it shows house prices moved up 3.9% nationally from July to September
The expectation for house price appreciation for full year 2024 = +2.8% (Fannie Mae)
Inventory is slowly growing—increased from 3.1 months to 3.4 months - and needs to be over 6 months of inventory historically to put downward pressure on house prices, otherwise, housing prices tend to stay flat or continue higher.
builders have a lot of stored value in land; they can lose money on the house to release a lot of equity in their land
consumer confidence is a big driver of open house traffic
Investors realizing houses don't cash flow with rates this high, that will flip in time—pun intended - when rates (or prices) come down
from Bloomberg: the rock and hard place for the consumer
is rent is rising as fast as house prices
Three questions you can use to grow your business with each client interraction. After each client engagement ask three questions:
Is there anything we didn't talk about today that you were hoping we would cover that would be helpful or valuable to you?
What are the top 2 or 3 things we talked about that were most helpful or valuable?
Is there anyone else you know in your life who needs help with those things?
ASSETS
What’s Happening?
cycles and cycles, it is important to note that the market does very well preceding election years, as politicians want you happy come election time
as rates turn back down, you’ll want to look closely at XLRE and other real estate opportunities, like home builders and REITs
each decade has an investment theme, and we are still in the big-cap tech phase, this decade keeps rolling as we transition into AI which builds on that prior theme
many are in disbelief that Bitcoin is not only a thing but that it is outperforming all other assets. If the new ETF is approved, we could be mooning
consumers are fragile, as this $2,000 hasn’t been adjusted for inflation or it would be $2,500 Either way, 1/3rd of citizens are one expense away from trouble
most years are up; there is a continuous flow of new money from inflation (more money being created) and from gains in up years that have to be invested, so the game is rigged LONG - best to invest and dollar cost average over time
Real versus nominal is important in wealth creation; nominal is what you have to spend, but real is what you can buy with what you spend…
“The shoe that fits one person pinches another;
there is no recipe for living that suits all cases.”
“If you mix raisins with turds, they’re still turds.”
In memory of Charlie MungerON BEING HUMAN
What’s Worth Sharing?
Wayne Dyer says: “Too often we jump to the conclusion that something is impossible simply because we cannot see the solution.”
He then brilliantly adds: “No one knows enough to be a pessimist.”
“If you believe it will work out, you’ll see opportunities.
If you believe it won’t, you will see obstacles.”
“When you can bear your own silence,
you are free”
DOPAMEMES
And Other Inspirations…
Ben Lionel Scott - creates some great motivational videos; watch one and see if you can sit still in your chair.
it’s fun to fly, but I like to watch - @FlightRadar24)
AIdeas
Future Hacks…
A favorite AI tool for taking notes after a conversation with a client or a partner: AUDIOPEN - https://audiopen.ai/
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