THIS just happened… how are YOU going to benefit?- August 2024 (#34)

Hey Team! Something BIG just happened… and your dude Brent wants to make sure YOU dear reader, are set up to benefit. OK, let’s get down to making money!

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Money

So in case you didn’t hear the Chairman of the Federal Reserve Jerome Powell just mentioned in a recent speech it’s time to cut interest rates. To everyone except finance nerds this is pretty boring news. However, this is MASSIVE MASSIVE news! Why? Because interest rates are the price you pay for money thats why! And when borrowing money gets cheaper it throws fuel on the economic flames! In all honesty higher interest rates have made my life as a real estate investor a LOT tougher and I’m starting to see light at the end of the tunnel lol.

Ok, so I want to make sure YOU dear reader are correctly positioned to benefit from what is most likely about to happen. Of course I cannot give you financial advice, but I can tell you what I’m doing.

• Making offers on investment properties, I’m shopping hard for deals that make sense now with where interest rates are at… that way if/when rates go lower I get a little extra gravy…

• Rotating to riskier assets, things like high interest savings accounts are about to make you less money and riskier assets like stocks are likely to make more money in the foreseeable future.

• Lock in that higher rate now, if I were planning on buying a CD or a bond… now is likely a good time.

• Making sure my credit is right. If you’ve got a credit score below 720 now is the time to work on getting it up. As rates lower your more likely to use credit. Here are a few ways to crank up that credit score. 

Keep in mind these rate cuts will likely be small. Usually only .25 bps or ¼ of a percent. So it will take a few for meaningful change that impacts your day to day life. That said, the markets are predicting a full 1% drop by end of year. If that’s correct, that is a VERY meaningful difference on your pocketbook. As an example, on a 500k home a 1% difference in interest rates changes your monthly payment by about $300!

Also, keep in mind that just because everyone says rates are dropping doesn’t mean they will continue to drop. If inflation spikes, its very likely we’ll see rates come right back up. As I mentioned in a previous post the Fed chair Jerome Powell is a student of history and knows that inflation is a tough beast to tame. All that said, he has clearly signaled the Fed’s intentional path, and that is DOWN.

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That’s all folks!

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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.

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