If the economy is so dang good... Why do I feel poor? - Jan 2024 (#3)

Hey dear reader. Your dude Brent is coming at you fast today. A big welcome to the new subscribers who I’m about to either delight or offend (hopefully both!?). Let’s get after it!

Motivation

Money

There’s a question that seems to be on a lot of people’s minds lately. ‘I keep hearing how great the economy is in the news, but it sure doesn’t feel like it. What gives???‘ The major U.S. Stock market index just hit an all time high, inflation is coming down, and the jobs market is supposedly really good. All these combined should translate to people feeling a bit more relaxed when it comes to money. However, people’s sentiments on the economy tell a different story. Terms like ‘Silent Recession’ or ‘Depression’ have even trended on social media. So… what’s the deal?

While I can’t know every reason so many people are feeling the way they do. Here are three points that, I think, make things clearer:

1. Housing affordability completely sucks right now

In much of the western world and especially in the U.S. buying a home is considered a right of passage. Well, right now it’s effing difficult to buy a home. Housing costs went bananas during the pandemic when money was easy and interest rates were low. Now rates have more than doubled since they bottomed. And housing prices in most places haven’t gone down near enough to get monthly payments back into the range of affordability. As an example, I was lucky (and obsessive) enough to nail the bottom on a 30 year mortgage refinance. If I refinanced today, it would increase my monthly payment by about 40%!!!

Rent is a similar story, dollars flooded the economy during the pandemic and the amount of housing available barely budged. So what happened? Rent shot up and it’s stayed up.

2. People’s pay has not kept up with inflation

The below chart says it all. Yes, you’ve likely (HOPEFULLY) gotten raises over these last few years, but inflation has likely gone up more than your pay has. So basically crap is costing more and you’re less likely to be able to pay for it…

3. Higher interest rates = 😔 (sad face…)

Want to do something like start a business? Buy a car (or house, but we covered that already)? Carry a balance on your credit cards? Well all of that is much more expensive with higher interest rates. Especially compared to just two years ago. Making things worse, credit card balances are at a 10 year high. Between that and inflation basically everything FEELS more expensive right now.

The bottom line is that the economy might be doing well on paper, but the average person’s finances are not. Economists and The White House can rave about the economy til they are blue in the face, but it probably FEELS like BS if your feeling the squeeze in your own finances. And most people are.

The Bottom Line

Until housing gets more affordable, wages catch up to inflation, and/or interest rates come back down to earth the average person is going to feel the squeeze. More likely than not this will take time. Until then, there’s not much to do aside from embrace the suck and remember it’s not just you…

Back To Crypto

This is part 1 of my series on crypto. As a reminder:

A cryptoasset needs to be:

1. Fast

2. Cheap

3. Secure

Today, lets talk about FAST. So why is speed important? Simply because everything is getting faster in business… and our current payments system is NOT keeping up.

Years ago, I was a partner at a startup that had production in China. 🇨🇳 One of the WORST parts of the whole process was getting our suppliers paid. It took two days MINIMUM. And thats if the dingbat tellers behind the bank counter didn’t somehow mess something up, or the intermediary bank, or the final destination bank, or yours truly. If it was the first time we were paying a supplier it was basically a 50/50 shot we’d end up in a nightmare on par with trying to get customer service out of an internet provider (SUCK IT Comcast!).

And to be clear I’m talking FINALITY. As in money in your account you can actually take out and use for something else IMMEDIATELY. Ever received a payment in your account and then get told you couldn’t do anything with it for a number of days? Ya, our current system super sucks. Crypto is here to fix that.

Speaking of Crypto lets bring it back to Solana. Solana is FAST, like REALLY FAST. Solana is several THOUSAND times faster than bitcoin and millions of times faster than a traditional bank wire. In fact, Solana is THE FASTEST cryptoasset out there. Not only that, Solana is essentially programmable value (the industry term is Smart Contract). As an example, you could program Solana so that after 100 people click on an advertisement the advertiser receives the Solana as payment. There are way more examples, but just know it has enormous potential to change the way we do business.

FINAL MEMES

That’s it, that’s all! Until next time!

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The information contained on this Newsletter and any resources available for download through this newsletter are not intended as, and shall not be understood or construed as, financial advice. I am not an attorney, CPA, or financial advisor, nor am I holding myself out to be, and the information contained on this newsletter is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation. Make your own choices and don’t sue me please.


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