Hey guys , ryan Amint , hope you guys are having a great day today . On the podcast , you guys have me . I know I wanted to do a little follow-up . I had a guest schedule but she had to reschedule so I will get her back on . She'll have a great conversation , but this week keep it short .
Somewhat sweet , but also a little bit of learning in all this whole process . So from the last time I was on by myself , we talked about just the nuances of what we're doing on Bayard Park loan officer . I now have an update on True Community , our nonprofit . We're officially a 501c3 . Yeah , baby , 19 months later I finally got it done .
That in itself has been a journey . And then today , as I'm recording this , on September 19th , I had no clue and if you're a nonprofit you need to go check it out . I just applied . Someone told me about it . Google will give up to $10,000 of ad spend , so specific Google ads , up to $10,000 for nonprofits , and they'll help you with the platform .
They get you marketing so you can get donors and get exposure to your project . So that will be huge . Once I get approved , I'll let you guys know and I'll continue to go through that , but this week I really want to talk about not just ups and downs , but the crappiest times of this market .
And I say crappiest because I don't think even in the great recession or the great downturn of 2007 , 2008, . The market wasn't the way it was . The market is what it was , but it's not today , and all of these individuals are talking about all these same things that are happening , and it's truly not Today .
We have headwinds with interest rates , we have headwinds in inventory and back then the market crashed . You had all these other financial institutions falling apart . We had all these shadow loans , properties .
I lived in Vegas at that time and I was seeing people that were exotic dancers and people that really didn't have any verifiable income owning six , eight , 10 houses on arm mortgages and then , when the interest rates jumped up , they lost their houses and there was houses in my development that I was living in , that people were going in and raiding and taking the
copper out and everything like that . It was crazy . Do I think there's troubles in the market ? Yes , we're in them right now . For all of you guys out there , the only way to know what to say it is we've been in a recession for months .
This has been a very long time coming and you can't throw all of this money into the economy and then expect there not to be inflation . And inflation has been a huge headwind in this whole process . And now it's coming down and we're going to go back up because we've got oil over $90 a barrel .
We have gas prices at least out here in Arizona I'm close to $5 . I just read an article this morning in the Wall Street Journal . California has now gone over $6 a gallon . Those are all additional headwinds that we're facing and when you have an entity like the Federal Reserve , everything they do has a lag effect .
You can't move the levers and then expect there to be change that quickly . The system doesn't work that way and I only think things are going to change .
On interest rates , whether I'm right or wrong is if something big breaks in the system and that's what I really want to talk about If there's banks that fail , we have lending issues to where we have defaults coming through . Crazy Auto industry the average interest rate on a used car note at this point is over 13% . That's just ridiculous . Crazy .
Mortgages are over 7% , pushing 8% , and rents are still high , even though they say they're coming back down if you start looking in some of the hotter markets that were growing like weeds , like out here in Arizona , rents are going back up again and it's because there's not enough inventory , even though there's inventory in the backlog that's coming , it's just not
coming quick enough and with people migrating and moving , you have this whole shifting of the board and the board is all over the place . But I'm going to share a technical term the yield between the 10-year and the two-year treasuries .
It's been a leading indicator for the last 15 recessions and so forth , and I'm not going to go crazy into it because I'm no economist , but I can tell you the basics . The two-year and the 10-year have been inverted for almost 16 months 18 months and from that point on that really is the indicator of the recession .
But the true pain doesn't come until it reinverts again and goes positive , and we're not there yet . So I still think we have more time with paying , but also headwinds in all the financial markets . The only thing that's going to change that is if , like I said earlier , if something breaks , if banks fail , lending fails , the dollar crashes .
There's so many things that can go in there and I don't know all the levers , but at the end of the day , we have to be prepared for what's happening in the market , educate ourselves , but also understand . The world is not falling apart .
We're just going through a downward spiral of the economy and the numbers that come in with unemployment and gross domestic product , they've all been adjusted . They've been adjusted backwards , so we're losing ground . Unemployment's going up and we're going into a election year and the Federal Reserve has two mandates Inflation , unemployment rate .
So if either those two get out of control , they have to pull a lever . But unfortunately , pulling their lever means either raising interest rates or lowering interest rates , and if they do either , or it's a delay and you're not going to see much of a difference when it comes to changing the economy .
I don't know about you , but for me personally , I rather see interest rates stay higher for longer than seeing a million or two million people out of a job . I want to see people working , getting through it . It being tight , I get that , but I'm also not willing to let there be two million people trying to get another job and there are no jobs to be had .
That's a problem . But we also have some good news in all that , and the good news is there's still almost nine million open jobs available , even as the hiring has slowed . There's still nine million jobs to be had . So that's a positive . But in the end we have to be prepared for the worst . And I think the worst has not come yet .
And I'm just being real with you guys and I'm in the market . We're building houses in Evansville . And am I worried ? Yes , I'll give you an example . I had a conversation with our realtor today and I really put the screws to him to tell him hey , these houses need to get sold ASAP . You need to do everything you possibly can to get them sold .
We have seller concessions . I will buy your rate down a 30 year fixed . As of today , rates change daily , hourly , sometimes down to five and a half percent . That house is being sold for 189,000 . That would make the principal and interest taxes payment roughly about 1200 bucks . That's still more affordable than paying rent . In Evansville Average rent is $1400 .
So you're saving $200 a month , $2,400 a year . Is there upkeep on a house ? Sure there is , but it's a brand new house . So you've got some delay and you'll also get a 210 builder warranty with it . But my point was this when I was speaking to our realtor . He had some excuses and that just reminded me about what we're talking about .
In the economy , everyone's got excuses about what's going on or how it's happening . Instead of using an excuse , find a way to get through the hurdle .
Good example , and I'm nowhere close to doing this , but I have a good idea and I write it down and I mark myself when I don't do well Budget Making sure you have a budget and keeping track of what you spend on a monthly basis . Credit cards are out of control right now .
Why do you want to continue to charge on your credit card at 18 , 19 , 22 percent interest ? Pay them off . Use the snowball effect . Take the smallest balance . Put the most towards it . Pay your minimum payments towards the other . Get out of debt .
Have an emergency fund A thousand dollars or more in the savings account just in case and don't go out and chase the Joneses . You don't need the things right now , even when everything is great , you don't need all the payments . Why take on the payments if you don't have to ?
It just amazes me that people want to take on all these payments and then they wonder why they're having problems . I was talking to a potential buyer and they've got a thousand dollar car . Note , a thousand dollars . They're not too far off from my mortgage payment . So I said hey , man , why don't you pay my mortgage while you're at it too ?
It just it makes no sense whatsoever and I don't know how to explain this . Other than you should be scared Always , whether we're in a good economy or bad economy , to where you're managing your money and you know exactly what goes in and goes out , because I know you don't want to live paycheck to paycheck .
And with inflation , interest rates rising and slowing down of the economy , it just makes it worse . And it's just , it's sad that we continue to let these things confess to her when we can fix these problems in our households and be able to be financially secure or sound . But we are such consumers that we feel like we're missing out on this next purchase .
And I'll be the first one to tell you I'm selling houses . And the first thing I tell people when they contact us about buying a house excuse me , a home . You got a budget . How much can you afford on a monthly basis ? Do you have reserves ?
These are questions that we should be asking ourselves on a daily basis to make sure that we're on top of exactly what we're doing , because if you're not managing your money , excuse me , if you are not managing your money , who is ?
And if no one's managing it , probably likely going to be having some issues , if not already and the housing market is very unique right now .
There's a lot of levers you can pull , whether you're a real estate agent or a developer like me selling houses , or a loan officer like me also , you can do different things , but you have to be willing to get outside of your comfort zone to do them , and when I was speaking to a potential buyer , she thought I was crazy that I asked her what her budget was
and are you ready ? Are you prepared to buy a home ? Because it's a commitment , and she's . I've spoken to quite a bit of people that are selling houses and you're the very first person to tell me that . Are you prepared ? Do you have a budget ? Do you have money saved up ?
Because with our homes , we have down payment assistance to where really the buyer doesn't have to come out of pocket with very much . It's very little , because having skin in the game is a good thing , but I also like down payment assistance too , but if they're not financially secure and prepared for a home ownership , they should continue to rent until they are .
If they have out of control debt , they won't get approved for a mortgage . And that's the other difference , guys . Today we have so many fail safes in place to where they are not . The lenders are not giving out shadow mortgages or crappy mortgages . They're verifying everything . So from a mortgage standpoint , I don't think we're going to have a collapse there .
Will we have some troubles in the auto industry ? I think so because of these high interest payments on these cars $1,000 , $1,200 , $800 . That's crazy . Somewhere that's going to break . And then now we add in student loans that are going to start being repaid next month . That also adds a layer of issues that are going to come up .
But to make this short and not drawn out , you can be prepared for all these things to where you can eliminate debt , get yourself out of debt so you don't have to fight with your monthly payments and living paycheck to paycheck , by budgeting and ensuring you know exactly what goes in and what goes out . And I've said it a hundred times .
I'll say it a hundred and one times If you don't know , no one else will do it for you and that will leave you in a pretty bad place . Bankruptcies will probably be on the rise out of this run , more than likely . But what can you do ? You don't want to be a statistic .
You don't want to be somebody that files bankruptcy , because that is just going to ruin your life for a very long period of time . The more , the more you can get into your finances and manage them effectively , the better off you're going to be . Ask people questions , especially if you are at a company that offers a 401k . You can call them .
They might have financial coaching for you or financial advice . I'm not sure . Some places do , some places don't , but why not ask ? They could help to put a budget together for you and then you can manage it and you're not having to pay for it . You're paying through it on a 401k , your employer is , or you potentially could be also , I should say .
But in the end , use the tools at your fingertips to get yourself in the right place , because ultimately , you are the only one that's going to be able to make the change and get through all of this . It's going to be a rough ride .
It's going to be bumpy , but I think there's going to be some bright spots and some green shoots coming out of it , and one I still believe is the housing market . There's still opportunity there . Prices are ripe . There's still markets out there to be had . But if you can get a mortgage interest rate at 5.5% and pay $1,200 a month , that's still a win .
That's still setting you up for success . So , guys , prepare yourself , get ready . There's going to be pain in this process , but the better you're prepared , the better off you're going to be . And if you are looking for a house in the market , do your homework .
Lay out all the costs of renting , lay out all the costs of homeownership and make sure that it makes dollars and cents for you . If you can't afford it , continue to rent . And if your rent is going up and you can't afford it , go find another place to rent . You have to find something that works for your budget .
You can't just keep on taking it and saying , oh , I'm going to make it work somehow . Make your budget work for you and you will be taken care of financially in the long run . Could it be painful ? Is it going to be painful in the short term ? Of course , but once you pay off your debt and you're not living paycheck to paycheck , life is so much better .
Have a go , guys . I'll talk to you guys later .