Economists define a recession as 2 consecutive quarters of negative GDP growth. Based on this definition, the United States of America is not in a recession. Blah, blah, blah! Does it really matter whether the technical criteria are met? Not to me.
My year-over-year spending power and net worth are down. In fact, my net worth seems to be dropping hour-by-hour. Gas, food, clothing, and beer prices are all up. When prices increase on the necessities, there is less room for discretionary spending. I am definitely in a recession.
One proposed solution that I've heard is too focus on all the positive things in life. Supposedly, this causes good things to happen. I am an optimist and I have plenty of things to be grateful for, but my general response to this "happy, happy, joy, joy" attitude is, "BS!"
Making good decisions and acting upon them causes good things to happen. You can wish for gold bars to appear before you all day long, but unless you develop a plan to knock-off an armored car, chances are you will never see one let alone melt it down and convert it to something sellable. (Not advocating theft here, I'm just saying..)
The markets (housing, stock, action figures, etc) will come back. Not next week or next month and maybe not next year, but they will return. In the meantime, opportunity awaits. "Buy Low, Sell High," is among the most cliché statements ever uttered. Yet, the truth of remark is undeniable. I know it and you know it.
So, how do we sort through the chaos and seize these opportunities? We plan and we execute. The first step is identifying our wants, needs and interests. The last item may be the most important as it is easy to lose focus on something you are not interested in. Once we have identified these things, we make a plan to achieve the needs and wants.
Focus on the things that you can control. You cannot control the markets, but you can control where and how you spend your time and money. Wherever possible start spending both on things that contribute to your goals. If that means paying down high interest credit cards, great! If it means investing in an IRA or 401K, great! If it means buying a new house, spectacular! Shameless Plug Alert ---> If you need a good agent...
For me, the choice is simple. I know real estate. I know homebuyers can purchase move-in ready homes at a discount right now. I know savvy buyers will be rewarded with instant equity and great appreciation in a few years. I know investors can find great rental and flip properties in my area. I also know tightening lending standards and fear have created a large pool of renters. Because I know these things, I will buy.
Hiding your money under the mattress will not end the recession. Marveling at the red poppies beside the yellow brick road won't get it done either. Plan, execute and end your own recession.
I have a plan and am working on it. Are you?
Erik, I like your post! Most of us are in a recession although I know of some agents who are having record setting years and doing VERY well.
Erik - You words ring true in my ear. I am not a rah rah kind of guy. I am not inspired by most things I read. It usually takes actions for me. Bottom line is we will get through this at some point and when we did it will probably be the most prosperous time in our history.
Lots of opportunity for those who understand that now is the time to grow market share in our business. By the way, my plan is to invest in real estate and stock...and then buy my own gold bricks instead of stealing them! Thanks for the fun post.
Erik, I agree... we are in a recession. However, our challenge is to make the best of what we have. I have been seen my own activity remain fairly steady and at times it seems as if it is growing. My view remains that the only way to go from here is upward.
Yes I have a plan and it is working. We are still generating leads, and closing referrals.
Janna - Thanks. I'm certain that those doing well are doing so because they are taking control of their situation and executing a strong plan.
Bill - You are right. I just don't want to be looking back and wishing that I'd done something to take advantage of the situation. In a few years, we will have perfect clarity of what today's the real deals are. However, I strongly believe that real estate is one of them and I'm going to attempt to capitalize on it.
Donna - After reading your comment, I think that I'll revise my plan. The new plan is to marry a smart, successful woman who gets it and live off her gold. Oh wait, I'm already married. Back to Plan A.
Jon - Regardless of whether we are near, at, or just past the bottom, the market will go back up. Sooner or later irrational fear disappears (due to the irrational part). You sound like you will be ready when it happens.
Jim - I have no doubt that you are keeping busy. I've read a lot of your posts and know that you are in it for the long haul.
Excellent post, Erik. Eerily similar to my own sentiments, on several fronts. As the creed goes, invest in what you know. Glad I'm not the only one who has had it up to here with the "Happy, happy, joy, joy" posts. Positivity is one thing, willful ignorance is quite another. When you accept the realities around you, then you can put your knowledge and expertise to productive use. When you stick your head in the ground, ignore the news and keep yourself unaware of the larger market forces in attempt to "remain positive" you do yourself and those you would serve a grave disservice. How can you maintain the knowledge needed to navigate an ever changing market (in goods times as well as bad) if you don't permit yourself to read the news or accept the difficulties? If you just blindly plow ahead doing what you have always done, you are on a one-way trip to pauperdom. Just like I don't want to be around the guy who is always bemoaning his fate and the forces at work that are pinning him to the mat, I don't want to surround myself with the shiny, happy deniers of objectivity either. Both are equally destructive.
Erik, I have been telling people that this is a good time to buy, rates still low, lots of inventory, motivated sellers. Not as some are saying the market is awful, or the Happy-Joy never been better crowd. Another thing is the ready to move into home, being more important than ever. Buyers often don't have a lot of extra cash to put into immediate updates and repairs. Sellers with a move in condition home priced correctly are the listings I want.
Erik, Thanks for reminding me that beer prices have increased. I think I'll invest in a few cases and store it in the garage. Love the post. You made some excellent points. As far as planning goes, yes I have a plan. It's taking longer than expected to reach the goals, but it keeps me focuses each day.
Erik, Great post. Makes one think about a lot of things. I am a firm believer that we each control our own destinies, yet some people don't take the time to sit and analyse things like this. You can't control what you are not aware of.
Paul - I agree completely. As you are well aware, real estate is a very personal business. Clients confide information to us that they do not share with close friends. To many, buying and/or selling is disconcerting at any time because of the size of the investment and the unknown. When the economy is in turmoil it is even more so. If you chose to ignore the realities of the economy and the market, you simply cannot address their specific fears and make sure that they act in their own best interests.
Rich - Sounds like you having been giving out excellent advice.
John - Focus is definitely the key. As times change, so must our plans. The goal, however, remains the same. As long as you remain focused, you will get there.
Lisa - I often think of that old saying, "If you don't know where you are going, how do you know when you get there?" We need goals and plans to achieve them.
Excellent post Erik! I'm in total agreement. I'm a positive person, but I'm not up for being the bubble headed perky cheerleader who ignores what's going on in the stands. Taking everything into consideration, I can formulate my plan and figure out where to go from there.
Well Said Erik.
I guess by the governments definition of recession that we are all in the same boat from time to time. Do I have a plan? Yeah, I would say so. I'm like you in the regard that I focus on the positive things in life and do my best not to get pissed or angry about what I cannot control.
Great post.
How did I miss this and why is it not featured? I've been saying that if I had the cash, I would be scooping up some of the great bargains in real estate right now - investors who are savvy enough are buying and holding at this point and will reap those rewards later for HAVING A PLAN. Great post, Erik!
Greg - As long as you have a plan and can adapt to the changing circumstances that we all face, you will be ok. Without a plan you are liable to end up wherever the wind blows and right now it's blowing towards the dump.
Lisa - The increased cash requirements are making me sick. I've been buying where I can, but I've had to pass on some great deals. Thanks for the compliments!
Bravo! Perfect read for me this early morn. I'm ready for my plan. Have a brilliant week.
Those entertainment books, full of buy-one-get-one free deals, that the civic clubs and community service organizations sell, sure help beat the recession.
More millionaires were made in the Great Depression than any other time in American History. No, we are not in the Great Depression or even close, but point is recession or not, this and that, opportunity is knocking----BUYERS,,,,CAN YOU HEAR IT??
Christina - I have no doubt that you are on top of your game. Have a great week as well!
David - Maybe someone should make coupons for 50% stocks and houses. Oh wait, you don't need a coupon. It is crazy not to be buying something right now.
Winter - So true. I am sickened by the fact that people are missing what may well be the best opportunity of their lives. I am also sickened that I don't have more money to pour into that markets to take advantage of it further.
I've been lucky (perhaps) because I've never personally experienced a recession even though the country has. I credit my wise old grandmother who taught me to persistently and consistently dedicate 10% of my gross sales to marketng and advertising, especially in the good times so that I had branded myself when the bad times came around. It's always worked.
Good post Erik. Even though some people say that we are in an economic crisis, I look at it as being a great opportunity to make money...
BTW Eric... I'm giving you DA Boot!!!
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