August Letter from My Heart

Good morning to Summer Days of Vacation and Family,

A fun fact of history: From days past, August was often called “Summer Doldrums”. A time for family vacations that left many businesses short handed. It was also a time all new Federal contracts were getting cleared for the new fiscal year.

In a good way, our local markets are using these Summer Doldrums as an opportunity for a healthy pause. Adding to this, the uncertainty being generated by Fall elections is in need of digesting. For the observant investor or buyer, this could prove a good opportunity to act.

Yet some of our callers are wondering, “what is happening”. Sadly I sense an uncertainty based too much in fear. It is why we work with facts and helpful numbers, leaving the emotional ups and downs alone. We are politically neutral. So, is it time to begin to speculate on the next real estate crisis? What about world debts and a possible domino effect?

For start-up venture capital projects, this maybe a concern. Yet such talk is always associated with the “IPO” market. If you have fears, check with your stock broker and learn how to “short” such a market. How about the $4 Trillion in corporate debt being re-written annually? The tax cuts for corporations and families should help ease this concern. Add to this needed reforms and our businesses should get even stronger financially. Even more, the rapid increase in our employment numbers, across all sections, is another good sign for our future.

Please let’s not get ahead of the curve and please do not let fear dominate your thoughts.

If there is a risk for a negative domino effect in the debt market, first think China. Their debt to GDP, is extremely high and puts their future at risk. Yet even here, they may finally discover the benefits of being a fair, open trading partner. It would make the world a bit safer as well.

In the question of debt, let’s carefully consider more than “debt-to-income”. Consider as well the value of the individual 401(k)’s, IRA’s, stock accounts, and growing net equity in one’s home. Also note, with the economy growing far faster than anticipated, tax revenues are now far ahead of schedule and expected expense for the social safety net, is decreasing faster than thought possible. All good news to help ease the US debt fears. And for the real estate market, more good news. I don’t see an over-supply of freshly built houses in need of a quick sale.

As you perhaps can tell, head lines are not our focus. Instead we strive to ask pertinent questions about you and your personal view of today and tomorrow. With this, we are best able seek out the legitimate pro’s and con’s – of differing strategies – that address who you are and keeps you sleeping well at night and feeling safe. We are here and ready to listen. Give us a call.

Points of Interest:

1) Wage inflation: There are signs, with our area running about 1/2 of National numbers. Yet, we haven’t seen the coming benefit of technological innovation, as a tool to offset inflation.

2) SSI: When FDR created Social Security, life expectancy was around 56. With today’s life expectancy, 82 would be a similar retirement age – except we do pay into SS much longer, as well.

3) 1998 Financial Bailout: Interesting numbers. The bailout in 1998 cost $90 billion. What has been paid back is $270 billion. The good news: This extra income is going into the general fund of our US government. However: Will our elected officials get serious about reforming this cash cow back to the benefit of the investors, who were ripped off – particularly Pension Funds? Regardless the D.C. rational, this multi-billion dollar funding platform should be “privatized”. Will it? Not likely!

Our Monthly: The Good, Bad n’ Ugly:

The Good:

Following numbers not rhetoric: While perhaps we hear too much complaining about our Twitter in Chief in regards to trade, tariffs, and energy prices, most interesting how the DOW is back over 25000, how jobs are still being added to the workforce, and inflation is quite mild by anyone’s standard. The numbers are good and most measures say so. This is good news.

The Bad:

Within the political class, there seems a great divide whether it be about the US, Europe, Russia, China or even North Koreas. It is more about the echo chamber than finding solutions. Not long ago, Ronald Reagan and Tip O’Neill could sit together and work on Social Security. Bill Clinton and Newt Gingrich could sit down and not only modify welfare, but balance the budget. As John Mauldin might say, “those days are gone.” This is sad, bad, and unnecessary.

The Ugly:

When some librarians think Dr. Suess children’s books are racist and therefore unacceptable, this is not a good direction for us to be heading!

In Closing

Our initial conversations are usually in two phases. First, we gain a mutual understanding of your situation, helping us determine possible options best fitting for you, Then we initiate a focused conversations with our lending partners. Next is phase two, where we review and share with you solutions that meet your needs, expectations, and situation. Then the Good news: You decide the next step. Sound like an approach that works for you? Please give us a call.

Preparation is key and our team is ready to help you achieve your dream, now.

Call today!

Have a blessed day as we remain gratefully yours.

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