I was in the Omaha Airport and saw this most recent issue of Money Magazine and it reminded me of the golden years of 2006-2007. The very years where the media and investment pundits were pushing real estate as the investment vehicle sure to make all of us rich as thieves! You remember these years, when housing values were skyrocketing, construction was rampant, and soccer moms were moonlighting as landlords. Well were back….At least according to Money Magazine!
My question is, what is different in 2013, than was in 2009 after the crisis had seemingly made us all poorer? The fundamentals of the economy are the same or worse. Granted, companies have rehired a bit, but unemployment is still at an unacceptable level of about 8% nationally. More individuals reside on food stamps, welfare, and unemployment insurance, than prior to the crisis. Gas prices have nearly doubled since 2009, as evidenced here. People have less expendable income now, than they did in 2009.
To to answer my rhetorical question, what is different than in 2009. Its perception. Consumer perception and confidence has increased. The election is over, so the contrarians expressing their concerns about the economy are virtually silent. The stock market has hit an all time high, and seems to be sticking around here for a while. Spring is right around the corner, which is typically the best time of year to buy or sell a house. Lastly, folks are at cocktail parties discussing their portfolios and the insanely low rates they just got to refinance their homes. All this is helping drive consumer confidence, but is it superficial? Does the media and our friends in Washington want to make us think that we are doing better financially, so we will keep quiet? Are they wanting to create the mirage of economic excellence, just so we will credit them for having solved the problem? Not so fast, there Barney, you were the one’s who got us in this mess! See here, pay particular attention to his statement made at about 1.36. These are the people creating the playing field by way of Fannie Mae and Freddie Mac, for this to occur!
Not to be Debbie Downer about the economy, as a matter of fact, I am looking at refinancing. I am grateful for the gains I have, but I am simply proceeding with caution. I have liquidated nearly all my positions, the only funds I have left are two Gold Funds, which I plan on holding for the long term. I am looking at moving from a traditional IRA into a self-directed IRA, and hope to buy tax liens, real estate (rental properties) or perhaps cattle. I am leery about the stock market, maybe I lose out on some good moves, but I am ok with that. I would rather invest in something I can see, feel and well, eat (as in the case of cattle). So, if you are looking at buying or selling real estate, now is a good time. I believe the market is heating up, interest rates are low. I would just avoid any pressure to buy more house than you can afford, be prudent, put at least 20 percent down and have your emergency fund, before you buy!
With that said, since today is Monday, I want to mention the posts that had a positive impact on my life. So here is the second addition of Monday Mention Madness!
I had the good fortune of meeting John from Frugal Rules last week, we had a great time discussing the growth of our sites. So thanks John!
Debt Roundup wrote a great post regarding his son’s first day of daycare. This hit close to home as I had a similar difficult experience, just 2 years ago. Grayson, I am glad to see that he made it through his first week successfully.
Krantcents wrote a wonderfully honest and insightful post about how to raise successful children. He explained that most of the lessons his children learned were from being around adults, often times by taking them to work with him. I used to go to work with my father as well, which I believe had a positive impact in my life.
1500days.com wrote a wonderfully entertaining post about the difficulty our parents have in talking about money. Sex is a conversation they seem to have no problem discussing, but money and earnings…Now that’s taboo!!
Lastly, johnnymoneyseed.com mused that we should live everyday like it was a recession, I wholly agree. I think that we can safely assume that history is destined to repeat itself. Also, those pulling the levers and pushing the economic buttons are sure to make decisions which will win votes, not necessarily help the long term growth of the economy!