Number One: The Wealthy Baby Boomers
The aging of the baby boomers is affecting housing because they are downsizing. They are affecting job creation because they are working longer. And, there is a generational wealth transfer happening where they are leaving their money to younger generations.
Unfortunately, I believe that the younger generation, what we call the Y generation, or people born after 1979, are less financially sophisticated than Generation X and all of the generations that came before Generation X, including the baby boomers. We need to make sure that we are not only leaving our children and grandchildren financially well-off, but that we are also educating our kids on how to continue our legacy of financial well-being. We’ll talk about this a little bit later and how educating our kids in financial matters and investing properly is so important. If you have kids that are living at home right now who are between the ages of 18 and 29, I want you to call them into your office or wherever it is you are sitting right now because they need some financial education so that you can get them out of your house. Let me say in advance, you are welcome!
Number Two: A More Active Role in Personal and Financial Planning
Paying a high mutual fund expenses to a manager who underperforms on benchmarks no longer makes sense. More and more people are beginning to manage their own money, which is important. I think that most of you will find that the downside of managing your own money is suddenly you are responsible for the wins and losses, which is why a lot of people choose to go with a financial planner or a money manager. They assume if they screw up it’s on their manager’s head. However, I think that is a really horrible outlook. The last thing I want to do is give someone else total and complete control of my financial well-being. I encourage you to take a more active role in your financial growth and well-being.
Number Three: Market Volatility
With so much change ahead, most forecasters predict more volatile markets. This will force investors to continually seek new, safer harbors for wealth generation.
Number Four: Alternative Investing
Because interest rates are low, the returns you make on a bond investment are also pretty low. Low interest rates mean low returns on your investments in a savings account or CD. Peer-to-peer lending is fast becoming a hot trend because it doesn’t play in the same interest rate circles as these other investment mediums.
This is important information that if you’re a PME affiliate or Broker Certification Graduate you should be sharing with your clients.
The Dow recently closed at 16,743.63. This is coming off of a record low in 2009 where it was just barely north of 6,000. That means the market has increased 10,000 percent. If you take a five year period, that is a 2,000 percent increase per year. But, you have to understand that if you chose the wrong stocks, you didn’t achieve those increases. Some of you that are sitting on significant stock portfolios right now are thinking, “This guy is up in the night because I have made 80 percent this year.” That’s great news, but here is what you need to know: over any 10 year period, whether it is the 80s, the 70s, the 60s, or even the 2000s, you will see that when you average your highs and your lows, the average return from the stock market hovers around 3.8 percent. So, it is great if you are experiencing big wins now, but at some point you will need to exit the market and get the money into something more stable as the market corrects and adjusts.
Lee Arnold is an international speaker, trainer, author and licensed broker who has spent many years perfecting the real estate and private money mortgage lending process through thousands of transactions. Lee is a leading expert on private money mortgages and has been featured as an investment strategy expert by Forbes, the Boston Globe, Market Watch, Reuters and Business Week. He has also consulted and taught for Donald Trump Companies.
As a master of networking, Lee connects private investors to borrowers from across the United States and Canada. To leverage the power of these relationships Lee and the Secured Investment Corp’s executive leadership team have created Cogo Capital – The Private Money Company, Lake City Services and The Lee Arnold System of Real Estate Investing. This family of companies has become the fast growing private money mortgage firm in the United States. Key to the company’s values is integrity and trust.
Reprinted with approval from The Lee Arnold System of Real Estate Investing.
© Copyright 2015 by The Lee Arnold System of Real Estate Investing