The Borrow Smart Chronicles - Everything Compounds Like Interest

Episode 30

Author

Todd Ballenger
May 31, 2024

❝

People choose the paths that grant them the greatest rewards for the least amount of effort."

David Shore

We have a saying - that ‘everything compounds just like interest.’ Efforts, money, problems, and opportunities. Imagine life as a garden. Every dollar you invest, every minute you spend, every ounce of effort you exert is a seed you plant. At first, the growth is barely noticeable. But with patience, each seed starts to sprout, and we move from sleep, creep to leap.

We may struggle with immediate gratification and that gets in the way of being willing to do the small things now that lead to the big things of the future. Never underestimate the power of dopamine and how it drives us to make very short-term decisions that aren’t always aligned with longer-term goals.

As interest compounds, money grows. Time accumulates, and effort magnifies. Before long, what began as a handful of seeds transformed into a lush, thriving garden. The results? A bountiful harvest that keeps on giving back.

So, keep planting. Because in the Garden of Life, everything compounds. Your small acts today will bloom into something magnificent tomorrow.

What is one seed (action) you can plant (take) right now?

a BORROW SMART CONCEPT
The First Million ‘is’ the Hardest

If you haven’t started saving, that is ok. If you have, that’s great too. The key is to let the compounding magic work. The sooner you start the faster you’ll see things grow. It is the growth on growth that really starts to become exciting.

In our Certified Liability Course, we talk a great deal about assets and liabilities and how they work together. Compounding is a big topic as it can work for or against you - as illustrated above.

the FIRST MILLION

the SECOND MILLION

the THIRD MILLION

LIABILITIES and DEBT
What’s Happening?

Just in case this is how things do play out, plan and prepare for higher for longer rates… we have moved from 180bps cuts this year to an estimated 30bps in cuts and some feel rates could go higher before they go lower.

consumers are using more debt at higher rates, bringing their average cost of borrowing higher - there will be more refinances ahead

as a $100,000 in credit card debt at 20% and $300,000 mortgage at 4% = 8% overall cost of borrowing and with high equity or no mortgage people will need to refinance

rates are not coming down fastly

and spreads are still higher than usual by about 80bps

commercial is causing pain that will help residential rates in time

most losses are unrealized

“He who blames others has a long way to go on his journey. He who blames himself is halfway there. He who blames no one has arrived.”

- 36 Stratagems in Ancient Chinese War

REAL ESTATE
What’s Happening?

improvement from the prior week to 6.1 out of 10

people are starting to move again or plan to move

listing prices are being dropped

or taken off the market

new inventory is coming

and it is badly needed

we have a huge deficit

but many new houses are being built to rent - they’ll eventually be sold

supply is slow to show

and that keeps house prices higher

but all higher prices as all real estate is local

“Only those who risk going too far can possibly find out how far one can go.”

- T.S. Elliot

ASSETS and INCOME
What’s Happening?

last week (and this one) are putting pressure on stocks and savings

expectations are higher for this year, but elections will create volatility

money supply IS KING and it is increasing again

if you have to invest, stay invested and if you are active, consider strategies to INVEST SMART and SAVE SMART

“Love the ones you can. Touch the ones you can reach.
Let the others go.”

- Real Live Preacher

ON BEING HUMAN
What’s Worth Sharing?

AI is scary, this was an advertisement about the danger of electricity and why we should avoid it in the future… change is usually frightening…

“When you understand that nobody wants to read your shit, your mind becomes powerfully concentrated. You begin to understand that writing/reading is, above all, a transaction. The reader donates his time and attention, which are supremely valuable commodities. In return, you the writer must give him something worthy of his gift to you.”

Nobody Wants To Read Your Sh*t - Steven Pressfield

DOPAMEMES
And Other Happy Moments…

I’m applying - this is my last newsletter!

A boy walks up to Mark Zuckerberg and says, “My daddy said you were stealing our information.”

Mark Zuckerberg replies, “He isn’t your dad.” 👀

Artificial Intelligence
And the Future of Work…

Need a vacation?
https://journeypilot.ai/

This is scary - said ChatGPT/BINGAI…

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