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Key Factors RealEstateAF
Educational Podcast for Consumers, Mortgage & Real Estate Industry Professionals. We'll Talk About It All! Key Factors podcast, powered by https://ReviewMyMortgage.com . Your Host Mark Jones invites Industry Pros to help uncover & educate on the key factors of various topics. There’s something for everyone so let us be your guides and get educated. Subscribe & Follow on Spotify, Apple Podcast, Facebook, Instagram, & all other podcasting platforms. Host : Mark A Jones Founder of ReviewMyMortgage.comProducing Branch MangerSr. Loan Officer. NMLS ID# 513437NMLS Consumer Access: http://www.nmlsconsumeraccess.org/Powered by ReviewMyMortgage.com
Key Factors RealEstateAF
Risk & Reward | Understanding the Capital Markets | Stocks & Investments
Get ready for some real talk on financial struggles as we address the often misleading perceptions of success perpetuated by social media. Preston shares his personal story of transition and success, emphasizing the significance of educating young people about financial literacy. We advocate for a game-based approach to financial education for youth, making lessons relevant to everyday life. Our dialogue extends to the evolving job market, the rise of remote work, and the global competition that demands adaptability and entrepreneurship, all while stressing the importance of personal decisions and perseverance.
Finally, we'll explore the intricate world of investment strategies and real estate. Discover how changes in Japan's interest rates ripple across global markets, impacting everything from stock investments to real estate transactions. We also discuss the benefits of homeownership versus renting and the significant role of financial education in navigating these decisions. Joseph Milhouse brings his expertise to the table, offering nuanced perspectives on market trends and financial advising. Celebrate with us as we reach 9,000 subscribers, and join our commitment to providing valuable content aimed at financial empowerment and resilience.
Key Factors Podcast is Powered by ReviewMyMortgage.com
Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
If you would like to work with Mark on your next home purchase or as a partner visit iThink Mortgage.
Someone has already done and is already doing what you want to do. And no, they didn't fall into a rich family to do so. They were not born lucky. You know you can be more, you can have more, do more and be more. You know this.
Speaker 2:You wouldn't be listening, otherwise what we know about the market turmoil in the US and around the world?
Speaker 3:It started with this 12 plus percent drop in Japan's Nikkei Index, spurred by the unwinding of an investment strategy called the carry trade. In a carry trade investors, they're borrowing currency of a country with a really low yielding government debt, like Japan. They're selling that currency and buying, in this case, dollars with it.
Speaker 2:But on July 31st the Bank of Japan raised rates to 0.25%, sparking a rally in the yen, and just a few days before economic data out of the US had put investors on edge.
Speaker 3:The Fed meeting Wednesday, the central bank held interest rates steady, and then on Friday we had this jobs report come out. That was a lot worse than pretty much anyone in the market was expecting.
Speaker 2:These three events fueled a broader market sell-off that has included the biggest tech stocks, shedding more than $650 billion in market value in one day.
Speaker 4:And there you go. Ladies and gentlemen, if you were wondering what took place in the past I don't know what was it probably about week or so with the markets going nuts. That's the explanation. It's all you get. I'm joking.
Speaker 4:We are back with another episode of Key Factors Podcast Real Estate, af and the AF stands for and finance, and we're going to continue the discussions on finance. We just had two great back-to-back episodes with some experts in the real estate game discussing the US debt clock, the crisis that we're facing and how to help you guys kind of interpret at least the basics and overall understanding of how economics works supply, demand, all that good stuff. So today I've brought along two guests and I want to dive a bit deeper into the stock market, how things are tied together, a bit of education. So I'm going to introduce my first guest and he is back from a sabbatical. I'm going to call it. He was actually joined me on my very first podcast episode. It was two and a half years ago. That was entitled Becoming a Loan Officer in 2021. And, without further ado, preston Jones.
Speaker 5:Hey, welcome back. Yeah, man, I'm excited, very, very, very, very excited to be back here over at, I Think, mortgage, and ready to hit the ground running and get after it again.
Speaker 4:Amen to that. Now. Preston, it's probably been a while since the listeners out there have caught you on a podcast. You were on a couple back in the day discussing social media leveraging that. We had a great discussion with Brian Paris about discrimination and if it's real or not, or is it just education or lack thereof. So if you could just take a moment and tell our listeners who you are, how you got in the business and what your next step is.
Speaker 5:Yeah, definitely, I mean my again. My name is Preston Jones. I've been in the business for coming up on my fourth year, I believe. The more I say that I feel like I'm starting to get older. Time flies. Yeah, the grays in my beard are starting to say hey, man. But yeah, I've been in the business for about four years. Got in the business after the tail end of the pandemic. I've been a basketball coach. I own my own basketball program. I've been doing that for 13 years. Decided that I wanted to do more. I had more time on my hands, so jumped into mortgage and fell in love with it. Fell in love with helping people become homeowners you know the American dream so fell in love with that. And ever since then I've just been chugging along trying to help as many people as I can still coaching basketball.
Speaker 5:And yeah, good deal.
Speaker 4:Well, it's good to have you back here at home. Absolutely, baby, absolutely. Now my next guest, uh, is a gentleman that uh, actually, goodness, I've known him since we were younger. Um, and seeing his growth is, is is incredible, uh, as a person, both personally and professionally. So much so that I asked ChatGPT who he is and this is what it said.
Speaker 4:Joseph Milhouse serves as a senior vice president at PNC Private Bank, where he plays a critical role in guiding high net worth clients through the complexities of financial planning, wealth management and investment strategies. With a deep commitment to empowering the next generation, milhouse emphasizes the importance of financial literacy and mentorship in his work. He approaches the relationship building and financial advising is marked by a strong belief in fostering genuine connections that lead to mutual success. At PNC, milhouse is known for his expertise in navigating the stock market, helping clients make informed decisions that align with the long-term goals. He also advocates for embracing failure as a critical learning tool. Advocates for embracing failure as a critical learning tool, encouraging transparency and self-reflection as a key resilience and growth in both personal and professional realms. His leadership and insights have made him a respected figure within the financial community Without further ado.
Speaker 2:Joseph Milhouse I told you that was good.
Speaker 6:That's you, man. It's kind of unbelievable that that came out. There you go. Hey, appreciate it. Chatgpt Drinks on me next week.
Speaker 4:That's awesome. Yes, sir, yeah man. How you doing Joe.
Speaker 6:Man, I'm doing well, man, I can't complain. I'm just happy to be on this great platform. And that sentiment is shared, right? Because the three of us grew up in the same neighborhood, and so to see the three Parkwood guys doing what we're doing today is amazing.
Speaker 4:I have to agree with that. I mean, I can't say, and a lot of at times I will say, man, I came from nothing and compared to the other kids that we grew up with, we did have nothing. You know Now, we weren't well off, we weren't poor, but we were middle class at the time and middle class was the.
Speaker 6:OK place to be. There was a place for middle class.
Speaker 2:Yeah, that's a great point.
Speaker 4:Absolutely middle class. So, that being the case, first time on Key Factors podcast, we're going to find a way to tie in what you do to real estate at some point in time throughout this. But before we do, I want you to tell us, our listeners, our audience, who you are, how you got to where you are today, because I can tell you big strides, brother Big strides.
Speaker 6:Yeah Well, you know that's a very interesting and good question because we have Preston here, right? So I'm going to take it back to high school.
Speaker 4:Okay, and by the way you guys, preston is co-hosting with me today. All right, we're not interviewing Preston, he's going to be helping me chop this up.
Speaker 6:So in high school, right, so I went out and tried out for the basketball team and didn't. I didn't make it, you know, and I was. I was upset, you know. Actually I made JV but I wanted to make varsity and I was upset about it and I was very competitive, and so my mom was the one. When I came home I told her about it. She was like, well, hey, you know you have these ambitions of going to law school. She was like why don't you try out, maybe speech and debate?
Speaker 6:And I was like mom, like, like I'm cool, I like girls, like that's for sure. And so my mom was just just try it out, right? So went ahead, tried out for speech, speech, debate. And I sat in the back of the class and shout out to Ms Ann Smith because she was the game changer with it. She was our debate coach. And so my junior year I waited and went to the. You had to do a tournament. The very last semester, or I think it was, I want to say it was December of my junior year I went and I was trash. I think there was 10 people in this particular event and I placed 10th. I didn't try anything like that. And so I came back and I was like, wait a minute, these people aren't that much better than me. And so I'm like maybe I'll just try a little bit. And so I started trying, man, and from there it just took off. I went to George Mason University for a speech debate camp. That's the most nerdiest thing. I went to a speech debate camp at George Mason my summer, going to senior year, and I came back my senior year and rocked out.
Speaker 6:Man, I was six in the state of Texas and got an opportunity to go do speech and debate on a collegiate level, got a full scholarship doing that. And then 2008 hits right. So I remember I'm in personal finance class at the time and I'm watching Lehman Brothers go under, and so at that time I was still thinking politics, you know. So, hit law school, maybe shift into that. And all of a sudden I saw an opportunity. I was like, well, wait, you know so, hit law school, maybe shift into that.
Speaker 6:And all of a sudden I saw an opportunity. I was like, well, wait, you know, there's a I don't really understand this personal finance thing going on right now, but it sounds like the wrong people were investing these individuals' monies and taking different bets with people's money. And I saw an opportunity there. I was like, well, I'm pretty good at taking complex topics, simplifying them to my audience, and I also saw that, well, I'm pretty good at doing building that relationship side of things Right, really cultivating that trust personable, definitely relatable example of how our ethos myself Preston's is so high caliber simply because we grew up around so many different types of cultures.
Speaker 6:Absolutely, but go ahead and it worked out. I remember when I graduated I wanted to go up to either Chicago, new York and work, but no one was hiring because it was right after financial crisis and you and I kind of got into the mortgage payments and so I went through Wells Fargo's analyst program is called the talented 10th after WB DeBoys and had some great mentors that brought me through that program man and was client facing immediately, which was great because I started in mortgage and this is right after the financial crisis. So this is the toughest subject to have with somebody because mortgages, you know that's going to be the largest purchase that most people make in their life, absolutely. And so when you're having a conversation with someone and you're like 22 years old, I mean I didn't have a home, I didn't have any money.
Speaker 6:And I'm over here talking about hey, I can help you. You know like that started. You know the for me, my career and being able to number one, cultivate those relationships and then get beyond the. I would call it the imposter syndrome.
Speaker 4:Yeah, yeah, yeah, right Fake it till you make it.
Speaker 6:You know what I'm saying, because all of a sudden I'm thrusted in this and I'm getting. I remember the first lady I sat with man. She hit me with the. You know how can you help me with my mortgage? You can't even grow facial hair. You know so. And so from there, you know, my career just began to progress. You know I did well in mortgage. I wanted to learn the other side of the balance sheet to be able to kind of advise holistically as well, absolutely. And so that took me from there to Morgan Stanley, to Merrill Lynch, to now. I'm a senior vice president now at PNC Private Bank and the role is to be that deep generalist for our clients to be able to discuss everything financial with you. And so it's worked out, man, it's been a blessing.
Speaker 4:That's awesome, and the journey itself, I'm betting wasn't easy.
Speaker 6:You know, you don't have to bet on that, I'll tell you. See, this is the thing. And, mark, I'm gonna give you your flowers right now. Yes sir, I have been an admirer of you from afar for the longest man because there was and it was a natural competitiveness there, because we got in the game around the same time. You're going to make him cry around the same time You're going to make him cry.
Speaker 6:I've gotten soft in my old age, it's so. But yeah, man, like like if you read my resume, it looks like, oh, this guy's career is going like this. But people who have really know, like my wife, my closest friends, man, it's been ups downs and it's really been just getting out there, putting yourself out there, putting yourself out there, and I love the fact that you put yourself out there from the beginning and then you started your own company. Man, I just that's why I was like I need to, I need to get on my guy's podcast. Man, like I got to show some love to him for this.
Speaker 4:Well, this, this podcast, started two and a half years ago. Um, and gosh, man, we JC, we had like zero subscribers for so long and it was like, okay, I'll just put another video out. Row subscribers for so long and it was like, okay, I'll just put another video out, I'll keep putting another video out. And slowly but surely, it has cultivated into this uh platform that allows folks like yourself, like myself, like Preston, experts to be able to be real with the audience. Um, because most people, perception is reality, so whatever they see on social media is what they believe. So, therefore, your friends that just saw the trajectory doing this didn't get to see behind that curtain. So they think, gosh, there's no way I can do it as fast as him, or there's no way I can get to that next plateau to increase my net worth, to increase my livelihood, all of the things, my net worth, to increase my livelihood, all of the things. And what I found is every single guest that I've had on here mind you, I only have experts in the field have all had similar struggles, have had similar adversities that they've overcome, but nobody knows about it. So this gives an opportunity for you guys to be transparent and kind of go through any of the struggles that you've gone through, how you overcame them, how you utilize what you've learned thus far to capitalize.
Speaker 4:And I say capitalize number one because I am a capitalist. But number two, number two, it essentially where we're at right now. I can guarantee you not a single one of us is where we want to end. To end Correct, right, correct. But the world looking in thinks we've already made it. Yeah, right, yep. We're just a couple of dudes in here rapping about some financial stuff.
Speaker 6:That's it. That's it. I think that, um and impressed, I'm going to bring you in on the on this one here. Um, what was your? What was your story that shifted you into the finance and mortgage game? Because that's a tough time during a pandemic.
Speaker 5:That's good, that's a tough time.
Speaker 4:Not only that, but I'm going to toot a horn before you start. Preston was Rookie of the Year when he jumped in.
Speaker 6:So I saw a lot of, and it definitely was his good looks of the year when he jumped in.
Speaker 4:So I saw a lot of baseball and it definitely was his good looks.
Speaker 6:It's always been the looks man.
Speaker 5:Somebody's got to bring it to the family. No, go for it, pete, go for it. To be honest, being what I was as a basketball coach coaching and molding the minds of the youths I always knew that there was more for me. I always knew that there was more that I could bring to the table. Because, at the end of the day, when it comes to youth sports, 99% of the kids aren't going to make it. They're not going to make it making money playing that sport. So how do we do that? How do I mold that? So then I started to think about okay, well, what do I have in my life? What models do I have here? So I took in what my brother here, mark, was doing and I said you know what I can do, that I can get into that.
Speaker 5:So I did real estate for a year. I didn't enjoy that side of it. It just wasn't for me. That side of it of taking people out to find houses and listing houses, that wasn't for me. But how do I help people more than just now? Okay, well, we get into mortgage. It's more than just like you said, you know, it's more than setting people up for right now. Well, okay, you're buying a house now, but you may not be in that house forever. What are you going to do later on?
Speaker 5:So I really wanted to tie that and then also try to bring that towards the kids that I coach. Okay, how do I help these kids get set up? All my high school kids that I coach that are graduating. I talk to them about this stuff. It's not just oh, this is basketball. You got to do this, you got to no. Okay, well, basketball is a small part of your life. What do we do to set you up? Ok, so now I tell kids about internships. All right, what do you want to do? Do you want to come talk to me about mortgages? Let's, let's have conversations. So it really tied in extremely well to what I was already doing in my life.
Speaker 4:Gotcha, my life, gotcha, gotcha.
Speaker 4:I had never heard you answer that kind of honestly and that is a that is a cool concept, because I believe that there's plenty of coaches out there, but there's also plenty of coaches that are not making it applicable to the kids in real life, similar to uh.
Speaker 4:I had a discussion recently about teaching finance in schools at a younger age. And no, I'm not asking you to be a financial advisor to these kids, but put it in the way of a game. Each month, the kid gets a new career and they get a paycheck based on that career and they get to budget, et cetera. So that way they get a little bit of fun, they get a little bit of basic understanding of how this game really works. Because we're not asking our teachers to be financial advisors, but I also can't ask of a teacher, with the salaries that they make and the moves that they're not able to make, be the advisor for what their future should look like budget, wise, financially, et cetera. But simple things like okay, if you want to be a teacher, you're not going to buy that Mercedes Benz, the house that's a million dollars, and you're also going to go on 15 vacations in the next three years.
Speaker 5:Perspective. Yeah, I think I think we hide the struggles too much from our children. I think you know, just like you went through your struggles, he went through his struggles, I go through struggles. We hide those from our kids. We work so hard to let our kids see that everything's okay instead of showing them these are struggles. This is what life is. Not everything's going to be perfect all the time. So if we don't show the kids the struggles when they grow up, what are they going to do? They're going to think oh, their first adversity, they're just going to quit. Yeah.
Speaker 6:Yeah, yeah, see, and I have to totally agree with you on that, right, because I would argue that our generation was the first generation that came out the game, because we're coming through great recession and it's like, hey, we, we did it the right way. You said, go to college. We went to college and a ton of people couldn't find jobs. Still, you know, still, you know what I'm saying, and so you know, and they're still paying off these student loans. That's right. You know, I was fortunate where I was able to do that, but I was able to do it through a different process, right. So and this is, let's just kind of peel it back a little bit yeah, let's go, let's get real. So, all right. So I was fortunate enough to get the internship through Wells, right. So, my mom just being just amazing, truly the same thing with my dad, I mean, they put me in places to succeed, right. And so, like was it in high school? Cause I was thinking about going to the academy and I was a congressional intern.
Speaker 6:My freshman year in college, I interned with Bearing Point. You know, I had a Time Warner marketing internship, right. So I'm thinking I'm doing everything the right way, and when it came for me to go out there and get the big job. I couldn't get it, you know, and so I'd go through the internship program as I was telling you about. But once I decided to pivot into the investment space, to learn that balance sheet, and this is why you got to keep good people around you, right? So I remember I was having a conversation because rates had ticked up. I had really rode the gravy train with the refis, oh for sure.
Speaker 6:You know and so at that time, like and I really wasn't doing what you were doing, which were you were out there building those relationships.
Speaker 4:I didn't even know how to do a refi at that time.
Speaker 6:Everybody was hitting refis and I'm like, yeah, let me show you how to buy a hat. And so you know, I was making, you know, decent money, thinking that this is going to continue. Man rates ticked up. I want to say a quarter percentage. That stuff dried up, yeah. And so that was my awakening, where I was like, okay, I want to maybe get back on path of what I initially was thinking. And so I went ahead and I put myself out there and I was like I will.
Speaker 6:As I was a senior mortgage banker with Wells, I was like I will take a step back. I was like I'm gonna put an internship application in for Morgan Stanley and so I applied for this internship. I'm like they're going to see that man I've done. Well, you know, I'm about four years in my career at this time. I should be able to outshine on these interns, right. And so, right after I put that application in, I went online just to Google like, okay, you know what's the process?
Speaker 6:The first article that comes up and I think they were more so talking about investment banking. But the article read something along the lines of you have a better chance of getting into both Harvard and Yale than getting a Morgan Stanley internship at that time because it was so competitive. So I was like you know what? I'm going to go ahead and do something that no one has ever really done or does in our generation. I'm going to go stop by the office, drop a resume and cover letter off, right. And so y'all know my boy, lawrence man, I mean, that's, that's my guy. And so we were supposed to be going up, going out to hit lunch, and so the Morgan Stanley office is at the McCone's building, so down there, close to the Pearl area.
Speaker 6:Yeah Pearl yep, and so I go up there. Man, I have my suit on. Man, I have my resume and cover letter. Something told me to grab two copies. Walk up there, meet the receptionist. I'm like hey, my name is Joseph Milhouse, I just put in for an internship yesterday and I'm hoping I can sit down with somebody and ask for an opportunity. Lady's like wow no one does this. And so she goes in the back. She's like, hey, the VP's here, let me go talk to him. And so she comes back.
Speaker 4:She runs to the back and she's like I got this nerd over here.
Speaker 6:And so she comes back and she's like well, look, he's on a call, he's getting ready to go to lunch and so if anything jumps off the page, you know he'll reach out to you. So I'm like, damn, I'm getting blown off. And so I'm like you know, just give me his card, I'll reach out to him, right? So I walk out and so Lawrence thought I was going to be up there for a while and I was like, nah, man, let's roll man, they blew me off. And so Lawrence is like well, did you get a card? And I was like, yeah, lawrence pulls out his phone, looks up the guy on LinkedIn. He's like is this the dude? And I was like, I guess, so just sit here and wait for him and you just give it to him. And so I shit you not, sorry, mom, cause it's this story. The story still makes me tear up a little bit, I kid you, not, man, like maybe two or three minutes.
Speaker 6:Dude comes off the elevator, lawrence, like there, you go, right there. I walk up to him and I'm like hey, I'm a Stevenson, my name is Joseph Milhouse. Um, I just dropped a resume and cover letter off upstairs and I wanted to wait to give this to you personally. I'm seeking an opportunity. And the guy looks at me. He's like, huh, no one does this. And so he starts looking. He's like, okay, so you got the mortgage side. Okay, well, do you know anybody who can give you $20 million today? I'm like what? I don't know anybody. I'm like what?
Speaker 6:That's like monopoly money to me man at that time you know, and I'm like no, sir, and he's like well, the job that you want you can't have, but because you showed this hunger to learn, I'm going to create a role for you. Wow, and my man put me into the private banking advisory associate position, which was able to leverage my mortgage experience, my lending experience, and then to pretty much just consolidate that into a holistic role where I'd be able to potentially advise clients on the investment side. I'm excited. Hopefully, right, hopefully. Yeah, man, I passed my seven. And you have one attempt on the seven. I crushed the seven. Crush it. For some reason I couldn't pass that 66 oh 66 and and um.
Speaker 6:You had two attempts and I ended up um and well, I'll come back to that other story later in the pod, but I ended up having to leave morgan. But what I ended up doing is, since I was sponsored for my seven, I still had that hunger and you had to wait 30 days, right. So I went ahead and took it in December. After I failed it in both October and November, passed that thing by three points, went back up there and told my guy hey, I passed my test, man, can I get the job back? I was like, nah, can't do it. We gave it to someone else. But literally I would say, two weeks after that, merrill Lynch calls me and they're like hey, we got an opportunity and it just took off from there, wow, joe, okay, so I want to chop that up.
Speaker 4:We haven't even gotten into our topping, ladies and gentlemen, but this is fantastic and I hope you guys are getting some stuff out of this. You mentioned something that hit real hard and that was at the time that you were doing okay, yeah, mortgage rates went up a little bit. You could have just kept chugging along and adjusted what you do, like most people do. Okay, 99% of people take the safe route. Yeah, but you bet on yourself. Yeah, you doubled down again and again within a short period. Safe route yeah, but you bet on yourself. Yeah, you doubled down. Yeah, again and again within a short period of time. Yeah, and I don't normally bring up this next topic, but I'm going to because I'm with family right now. Yeah, there's a lot of folks out there that believe that we are ethnicity is held down, or held to a different standard, or oppressed. I said it. Yeah.
Speaker 4:You, in your story, in your trials and tribulations that you just articulated, proved that as an example of not giving up going the extra, doing things that others don't do, not don't normally do, no, they don't do it. Yeah, especially this generation. You're lucky if the kid shows up and their parents aren't with them. Yeah, yeah, yeah.
Speaker 4:And again, it's just betting on yourself is a message that I hope rings home with plenty out there. I don't care what your nationality is, any of that stuff, but it all boils down to you, your decisions you make and example. You chose the path of going to college doing fantastic. I went off to college, didn't do so great. Went four years, joined fraternities, learned business, opened small businesses, yeah, and then got into the business sooner than you. Now, if you had to ask me, you'd pencil with me all day long literature books, and that's why I've got you on here to help me digest some of this stuff that we're going to talk about here in a minute.
Speaker 4:the decision, the choices on that journey, the rights and lefts and over the mountain and through the woods that you choose to decide, are always going to be on you.
Speaker 6:Yeah, I a hundred percent agree with you on that, man, um, from a standpoint that it has to be in you, and, and and one of the things that, um, I look at now, now that I'm married, I'm going on, you know, two years in October, man, appreciate it, man.
Speaker 6:And like but it's one of those things of you know, when I even look at just what my wife's family and my family had to go through just for us to be here, yeah, like my wife is really the brains, like her story, her family story, man, my wife. So my wife is a fourth generation physician. Wow, black woman, right, four generation. Like her great grandfather was a slave turned doctor, then her grandfather, dr Dembo, for parents, doctors, aunts and uncles dinner but he grandfather, dr Dimbo for parents, doctors and aunts and uncles dinner, but he didn't learn any skills.
Speaker 6:I'm sorry, I'm not sorry, but it's all on you, and I think that that's the approach that is not taught. I think that there is this. I think there's this idea that everything is supposed to just come to us and if we follow a basic blueprint of well, if I go to school, then good things happen. No, no, no, no, no, no. It's now becoming a level playing field. I agree, certifications are becoming more of the demand. If you're naturally skilled, it's always been in demand, that's right. You're naturally skilled has always been in demand. So this idea that you have to sit there and wait for opportunities, I think is obsolete, because we're now global and so there are people in India that are going to take the opportunities that you're not looking for, because they're more hungry, and a lot of those jobs can be shifted out, right? No, it's actual and accurate.
Speaker 4:I have a virtual assistant that does more for me for $200 a week than I could ever get anybody to do for $200 in an hour here, to be honest.
Speaker 6:And that's really what the pandemic did for us, right? Is that that remote work? So you're no longer competing with people in San Antonio, you're competing with people all throughout the United States and all throughout the world now, and so you have to find a way to make yourself unique, and that's what I'm loving about the generation behind us, I think the idea of truly becoming your own boss and your entrepreneur. I think that that is going to start taking off, because a lot of the Cush gigs are going to be taken up, you know, and so it's really about you creating something from the ground up, I think, and that's why I applaud the hell out of you, bro. Every day is a struggle, man.
Speaker 4:I tell you what? There's nothing that is easy. Like I said, the reason why I do this podcast originally was to get education out, to find a cheaper way for therapy for me, and, honestly, it has now culminated into conversations like this that hopefully will go far and wide and it'll impact one person that changes the course of their outlook life. What have you? Yeah, that being the case, all the mushy stuff. Now that we got out of the way, jc, what are we about? 20 minutes in 31. Okay, oh man.
Speaker 4:So we came here today to talk about some financial aspects, to get a little bit of understanding of what's going on in our market, how things are progressing, are retreating and, overall, affecting everyday consumers. And from your seat on the bus where you advise folks, not only are you advising but you have to interpret and study and understand these predictions because, let's face it, the stock market you're gambling.
Speaker 6:Yeah, it is, it is, it is, I mean. So our strategy is we're goals-based advisors. Right Now, everybody says that it's so commoditized at this point, and so really, what we're looking at is understanding a client's balance sheet, right, and so we then understand your balance sheet and then we extrapolate. You know what your cash flow is needed to sustain that as you're continuing to grow your wealth and then as you end up through your phase of potentially retiring and then starting to take distributions off of that wealth, right, and so our client base as a private bank, it is going to be that high net worth, ultra high net worth space. So you're looking at about 3 million liquid to be a client of ours, typically. We're looking closer to about 10 million, to where we can get a little bit more, I would say more unique in our recommendations and solutions, sure, but the principles and the base, it flows through everyone, right, and so what we're kind of seeing in the market right now is, of course, what we saw a couple weeks ago, right, is that?
Speaker 6:You know, it looks to be that there is some type of correction on the rise. Right, we did have a slight pullback due to the carry trade and what the carry trade is kind of high level. You had the Japanese yen, where Japan had been in negative interest rates, and so rates have been closer to about zero. And so during the pandemic time, so during the time when you got into the mark, got into the mortgage game, we, we knew that rates were going to at some point have to increase. And so there were the smart money or institutional money that went ahead and bought the Japanese yen at about 0%. Okay, they went ahead and bought and borrowed in that currency and then bought, you know, the US dollar, and so, over the course of time, rates started ticking up. And so if I have the Japanese yen at zero, and when rates were at, let's say, today, 5%, I now have a 5% basically spread there. That's right. And so they would then take those, they would take their spread and then invest it into emerging markets.
Speaker 6:Well, it was really the perfect storm again. And so what we saw was that the data from the United States. We started to see that things are slowing down, and then, of course, you had in Japan. They ticked their rates up just a quarter. That's what created what we recently saw, that quick downturn in the market, and that was due to the fact that a lot of people were then dumping those positions, and so that's what then created that quick downturn in the market. But now things are starting to stabilize and the stock market. And this is the deal. A lot of people look at the stock market thinking that that's a great indicator of how the United States and the Americans are doing. This is the thing. Most people aren't invested in the stock market Everyday people, a lot of them aren't going to be invested in the stock market.
Speaker 4:Matter of fact, we talked about it on the last discussion and one of our guests brought up the actual statistics because they came out just recently that I think it's something like the top 10%, like oh my God, I think it was like 10%. Oh yeah, the remainder is that other 20% gap there. So the question was prompted because you see it in the media, the economy is doing great. Look at the stock market. Well, in my opinion, the stock market isn't a good indicator because, if you ask me, I'll be honest, I don't have any money in the market anymore. I took it out.
Speaker 6:We need to sit down and talk about your opinion. I know you've got that brief.
Speaker 4:No, I tell you what my journey with that. I also worked at Chase back in the day. I tell you what my journey with that. I also worked at Chase back in the day. That was one of my first big boy jobs, so to speak. After working at the bank, inside of Walmart I was selling annuities.
Speaker 4:I was referring them to my FA. I had to get licensed. But the idea when that happened in 08, it was like I'm not going to put my money in there I don't understand it enough. Just because I'm licensed doesn't mean I study it or know what's going to happen or even know what kind of prediction to make. To articulate and back up what I just said about it yeah, yeah, you know, yeah, yeah. Then you fast forward and at that time pulled it out, said I'm not doing 401ks, and every dollar extra either went into some type of risk or high risk business that either succeeded or failed, or real estate, because it was safe there, and fast forward.
Speaker 4:Pandemic rolls around. I get a call from Josh Kern, said hey, do you see six flags? What are you talking about? He said it's like six dollars right now. You need to go buy it right now. Buy a bunch of it. Okay, you know, knowing that, regardless, it's cyclical, that it's a seasonal type place, it made sense to me Okay, dump, now I'm in Bitcoin, now I'm in Dogecoin. Now I'm over here in in Alaska airlines, now I'm. Now I'm not doing anything during the day, but playing on my damn phone. Oh, tesla split. Yeah, let's get it, leveraged it all over to Bitcoin and lost my ass, and it was like I'm done again. This is something that I don't have the expertise to advise for myself. Um, and it's tough to trust someone simply because everybody, like you said, everybody's got the same spiel.
Speaker 4:Yeah, you know you don't get to the heart of anybody and know how does this affect you if I lose.
Speaker 6:Yeah, and so, preston, before I jump in I wanted to bring. What are your thoughts on that man?
Speaker 5:Man, I never really got to the point to where I jumped into stocks. You know, same thing there, you know, I'm in that percentage that never really got into it. I never really learned about it, I never really thought about it. I tried to get in for a little bit. You know, same thing my buddy, josh Kearns, that I've known forever, he told me about some stuff. My neighbor man, yeah, told me about some stuff. Yeah, yeah, he knew Josh, yeah, so I never really got into understand it. It's something that I wish I would have gotten to understand, cause there were times whenever I could have you know, when I just I never got into it. I wish I would have. Yeah.
Speaker 4:Now the second thing to add to that, which I think is a big piece of it. You've been self-employed since day one. Yeah, the only things available were Roths and I was just about to say that Go for it.
Speaker 6:And so business owners like yourself, right See, this is the thing is that you already understand risk because you're already in your own business, right, right.
Speaker 6:And so we look at working with business owners, because we love working with business owners, because you understand that bottom line thread and really your nest egg is your business, until eventually you're going to continue to invest, invest, invest and then eventually you're going to sell at some point, or sell or hand off, or hand off, but that's always the rule. You're going to exit your business some way, whether you sell it, hand it off or you die. That's right, right, yep. And so that's where I believe that just having someone who's in managing, who's just basically managing your money, that's not to me. To me, I don't, I don't think that that's the appropriate type of advisor, that that I would solely look to work with. Sure, and in some cases it makes sense, but in most cases I would want someone making sure that, okay, number one, I'm tax efficient. Yeah, like you've had a few of your shows on fees, you know when you've talked about, you know, okay, do I go ahead and discount this? And your argument is no, I'm good, and I'm right there with you. And the reason why, even when I'm sitting across from a client, you know a client would be like you know what do you charge Joe? Well, I'll tell him. Hey, you know, depending upon the asset, you know you're probably going to be for 5 million You're probably looking at, but with that 70 basis points, let me tell you how we're going to help.
Speaker 6:Number one advise your family. So, off the back, we're going to be tax efficient for you. So we're going to be able to help you. If you're a business owner going through business succession planning, we're going to be able to tell you how we can help save you X amount on taxes. We're going to help you establish that estate plan. We're going to also help you advise ensuring that you have minimal risk right. So you're going to help you establish that estate plan. We're going to also help you advise ensuring that you have minimal risk right. So you're going to have that insurance component if you need it, and most wealthy people can self-insure. So that's not something that we typically lead with, but risk management from a standpoint of portfolio management. And let me give you an example, because we were talking about earlier what makes since everything's commoditized how our team goes to market. So, number one, I'm the head like senior relationship strategist on our team. Okay, so my job is AKA HNIC.
Speaker 6:This man sold this to the class, a CrossFit class in Bernie. Never like what is HINC? I was Googling yeah Picture Morgan Freeman comes up. I think, only I think only 80s and 90s babies are going to get that Absolutely.
Speaker 6:But basically the way we work is, my job is to kind of sit down with business owners like yourself, right, and understand your needs, and then I assemble the appropriate team around you. So if you're going to need, you know, let's say, a wealth strategist. If you're at that point for financial planning that, hey, I'm going to need business succession planning, I'm going to bring in my wealth strategist. And that wealth strategist, she's bad. I mean, cal Grant is one of the baddest. My boy, andrew, is one of the baddest. I mean, these people are JD CFPs, have worked on multi-million dollars. I think Cal's worked on a couple of billion dollar deals as well, very experienced and seasoned in that space. I'm going to bring in also my CFA that's going to operate your investment portfolio and our investment strategy.
Speaker 6:Kind of going back to your point, mark, is not going to be this approach from a standpoint of, okay, I'm just going to make sure you have a diversified asset allocation, diversification matters but we start with the bucket approach and what that means is like okay, mark Preston, what are your non-negotiables, what are the things that you're going to need to make sure that you're funding which is going to be like a house and eventually your house is going to be paid off, but what is is going to be paid off. But you know what is that going to look like for you, for your non-negotiables, that your necessities, that you need, and I'm going to buy a 30 year treasury for that. I'm not going to even have any risk for that Safe, safe. And the reason why I want to do that. Well, we'll get into that. Well, well, yeah, well, there's always interest rate risk there, right, of course. But still, if I'm getting let's just say if I'm locking in four and a quarter right, or 4% If rate of inflation, we always look at about 2.5, right. So I got about a 2% spread there, right.
Speaker 6:And so if I'm able to get you 2% on that money plus lock in, and let's say we're funding it over the course of time and that asset accumulation phase, that's going to be your nest egg there and everything else we invest in what we call a surplus account.
Speaker 6:That one we're going to get a little bit more granular with right we're going to be a little bit more aggressive with because the time horizon is further out. And so what we do when we have markets like we had a couple weeks ago, we don't get calls, because our clients are looking at it from a position of well, my nest egg, what I need to live off of, is fine, and we already understand that it's going to be ebbs and flows. There's going to be ups and downs in the market with your long-term money, and so, as long as we're able to sustain what you need up front, everything else takes care of itself, and so it's just a different way of looking at it, because you become more intentional with your investment, versus just saying I just want to buy the S&P and just see what happens.
Speaker 4:And I'm going to tie this back to real estate, because the one thing that separates you from any other investor, manager, advisor is you can justify your value. You just did it. Right now, and where I'm tying this to real estate is there's been a recent I mean bombshell on the real estate side of things to where commissions are changing. People are having to justify their commissions, they're having to articulate what their value is and plenty of them are scared because they've never had to do that. If you got in the business from 2020 to 2022, you've never had to. It was I needed a realtor to do this contract and you're going to make 3%. That's just standard, yeah. And now you're having a lot of realtors that are battling with this concept of what you just did yeah, and take my money. You know that in itself is an example of it doesn't matter what industry you are in. You better be prepared to justify your value articulate your value.
Speaker 6:Yeah, you know, because if you can't articulate it, then there's no way that anyone else is going to be able to see it. That's beautifully said, you know. Because we you can't articulate it, then there's no way that anyone else is going to be able to see it.
Speaker 4:That's beautifully said, you know because we are not selling tangible things yet.
Speaker 6:Correct, correct, correct, and, and I think that it's it's for, for me at least, I think it was kind of going through, you know, my ups and downs in life, where you begin to refine it and that experience allows for you to then say, okay, I think I want to approach business this way now and becoming more of a student of the game. Yeah, and I think that's that's one of the things that you two do, especially with your platform here is that you're providing that, that knowledge, providing that different perspective, and I think that's what people have to do, by listening but then like to shows, like, sure, but they do have to do it and internalize it themselves.
Speaker 5:Absolutely. I think you just made a really great point right there in saying that you had to refine it. I think what many people don't realize is that one way is not the only way and when that way doesn't work, you fail and you go back and do it again and you refine it. But I think people, after they hit one, maybe two walls that didn't work, they stop, they stop, they give up. And that was a very well way to put that of you refined it and refined it and refined it, yep, and you're probably still going to refine it now, like it's not.
Speaker 6:You're not set, because people are people right, and so you know I it may resonate with you know, the business owner that's getting ready to sell their practice, that's also a physician. But I'm also going to want to go, I want to approach the uh biotech company, right, and so you have to be able to number one, read your room, right, and this goes back to what we're just talking about too. You're going to have to be able to articulate that value, prop and finesse it to the needs, because not everyone's going to need the exact same thing. That's right, you know. So let me hit you with this one.
Speaker 6:So we were talking about houses earlier, before we got online here, and so my wife and I, we so we initially had bought in Katerra, manor, right, so we had built in that in that neighborhood. So right off of Babcock, there, beautiful home, and my mom had a stroke in 21, right, and I lost my dad in 21. So 21 was a really tough year and, like I just got engaged that February and lost my dad in April, then my mom had a stroke in September and then I started the job at PNC in October and we just had a lot of stuff and plus, we were planning a wedding for 22. And so we had locked in our interest rate. I want to say our rate at that time was three man. I want to say that thing was call it 3.75, 3.5, somewhere in there. Okay At that time, because we had did the physician loan right. So it's a portfolio loan.
Speaker 6:So they're going to charge up a little bit more, because I want to say we could have got like someone at that time. And so, with my mom having the stroke, I was like, well, my mom may end up coming to stay with us at some point. And so my wife, being the loving person that she is, she's like, hey, we got to figure this out because we had some stairs kind of going up and sure, the turn to the master bedroom or, uh, the guest bedroom where she'd be staying, was kind of tight. And so we were like, well, let's look to move Right. And so we looked in your neighborhood and we came across a property in Katerra Hills and so we went ahead and moved in that neighborhood. I want to say that was during 2020. Well, we started the building process in 2022.
Speaker 6:And this is where I wanted to get you guys advice here. So we sold our home right and we had a great realtor, uh, glenda Cook, and what Glenda was able to do for her, she was like, hey, I need you to look at this in a different way, because we had bought, I want to say, for right around the high six, uh, kind of low sevens, and what I was looking at was like, well, I don't want to come out of the pocket for anything, so I want to make sure whatever we take out of here is rolling into the next house, and so I put the market on. I put the home on the market for 850. And got a couple bites, but no one was tracking for it because, you know, there's not a lot of yard there, you know.
Speaker 6:And so, uh, we had a guy come in and he was like he had, he didn't have a realtor, okay, and we did an open house and he ran into glenda and glenda was like hey, you know, what do you think of the house? Guy was like hey, me and my wife, we love it. Um, then it was like hey, do you have a realtor? She was like well, they were like no, we don't have one just yet. And so glenda calls me, like hey, I would like to represent both sides here, joe. And she's like'm going to cut you a deal to where, since I also had her on the build, she went ahead and worked a deal for me, sure, to where. Instead of charging me 6%, I think, she charged me about four and a half.
Speaker 4:Okay, so basically what that is, ladies and gentlemen, if you're not in the real estate business, essentially it's kind of a move up program and an incentive for that buyer, for that buyer. It dis-centrifizes the realtor but still leaves a long lasting taste, good taste, in that buyer's seller's mouth, essentially allowing that realtor to take 1% on the sale, giving the 3% to the other side and in this case she's taking four, and there's nothing wrong with that. She's having to do both sides, um, and then essentially getting the full comp on the the buy. Yep, and the reason why we do that is hopefully the buy is a little bit higher price than the other ones yeah, but it makes sense.
Speaker 6:And what she did, she actually on the buy. She cut me back a point. That's awesome.
Speaker 6:Yeah, because because, like I said, that's, that's like a big, that's a solid agent, you know, and and uh, we were able to get that done, so, and plus, we had a two month lease back, right. And so I was like, well, man, this is a win. So I pocketed, you know, not only you know the one and a half percent that she saved me, but I pocketed two months mortgage payments, right. Plus, you know, I got the 1% back. And so I think that there's something to you know making sure that you have that level of collaboration 100%, you know, in this business and in this game. And that comes through being around people and learning that, because most people are gonna be like wait, why would I give you back something here? That's right. And it's like sometimes it's better to give than receive, because you're going to end up receiving a bigger blessing at the end of the game.
Speaker 4:Amen to that, and it has happened in my life, I'm sure yours, time and time again. It's the idea of folks looking at the right now benefit or gain versus planting that seed and allowing that to grow, which then spreads into additional customers, referrals, family members. And now all of a sudden you've got a residual based business that's built on your hard work, expertise, value that you provide, the level of service that goes above and beyond the others that aren't able to do that. That's why they got to charge the full amount every time, because they don't know when the next deal is going to come.
Speaker 6:Exactly, exactly, and being full time in that, in that game, you've got to do that, that's right. So I'm going to throw this back to you guys. But because what I've seen is that so when we're going through the bill process right, you know, the appraisal was the appraisal at the time we close on the house, right, and I want to say we closed on the house in December of 22. I get a tax bill. Okay, man, I get a tax bill. I want to say the first week in January, yep, and that thing goes from like around one three from where we initially appraised at to now one seven, and so I ended up having to fight it. Same thing.
Speaker 4:I ended up having to fight it Same thing and we're talking $26,000 in taxes to $28,000?
Speaker 6:Easy, Easy. So my question to you guys in this is how are you navigating that with your clients?
Speaker 4:It's a great question and for us, in our side of the tracks, you have lenders that are just trying to put them in the home, and then you have lenders that are advising them and setting proper expectations, painting the real picture, even if it's not a pretty picture. And in your case scenario, they set you up on unimproved, initially collected a lower amount, made it look really good on paper, then all of a sudden you got your tax bill. Property has been assessed. Yeah, it's not just the land anymore.
Speaker 4:Yeah, yeah yeah, yeah, matter of fact. We just had a massive uptick in values, and you're part of it.
Speaker 6:Yeah.
Speaker 4:No, I know, man, and you're part of it. Yeah, no, I know man, so you did the right thing by disputing it. Yeah, but it's something that I speak to a lot of renters about because they say, well, it's not worth it because taxes are so high. Okay, I get that. I can't argue with that because my taxes are up there.
Speaker 6:They're high man.
Speaker 4:I can't argue with that because my taxes are up there, but at the same time, you're still building equity year after year. Those taxes are something that you can use to write off on your taxes to offset the income that, hopefully, you're striving to increase every year by making yourself better, by listening to this podcast and all of these things. But yeah, you did the right thing. There's nothing really else that you could do in that situation other than sell the house.
Speaker 6:Yeah, downsize, and we don't do that. Yeah, I was like I was like you know, cause we had already kind of planned for it, but it was still kind of a shocker, and even this year, and so we still got the bill. That's right. Now we claimed homestead, right, so that caps us. Yes, yep, I'm still going to dispute that.
Speaker 6:But, um, I think one of the things that, uh, when we were going through the buying process right, because we were talking about people, when they they typically buy what five to seven years, right right around, and so, um, for us I was like let's just go 10-1,. You know, because I don't know necessarily that this is our forever home, sure, and as of right now, my mother hasn't moved in yet, but at some point she may, sure, and we don't have children yet, and so we may want to do something else, and so I think that. But now my wife understood it after I explained it, because at first she was apprehensive. She was like why would we do an arm? Yep, and I'm like, well, I mean, most people probably should do arms, to be honest with you, because they're in and out of their homes. That quick, right, um, but am I off on that?
Speaker 4:Great. No, no, no, you, you, okay. Um, you are off on that only because, okay, and I'm going to give you the reason as to why it was good in your scenario. Okay, also good in my scenario. Yeah, we bought our home in 2019. At that point in time, rates were at 5%. Yeah, I secured a 3% for seven years seven in one arm, okay. So now we fast forward. We're five years into our seven in one arm. Rates are high as all hell.
Speaker 4:Yeah, and we're like, oh man, should we sell? Because we normally sell every three years, but we're in love with the house, we're in love with the neighborhood, everything. But then you sit back and you go okay, wait a minute, it only increases by 1% each year, worst case scenario. So therefore, if we sell and buy again, we're buying less home at a higher rate, versus just letting it tick up to four, letting it tick up to five and once they meet, then it's time to sell. But back to your question point most people should get arms. I advise against it simply because most people don't have the experience, the intellect, the ability to make decisions and moves, educated moves and complete those moves. Gotcha, there are a lot of factors that are at bay when buying a home.
Speaker 2:Credit income assets.
Speaker 4:Yeah, very few Americans are consistent with any of those three. That's true. So you get into a 10 in one arm. That, hey man, it's hard to go wrong with a 10 in one arm because ain't nothing going to happen for 10 years. Most people fall for the three or the five in one arm.
Speaker 6:Or these buy downs I'm seeing now.
Speaker 4:We won't even get into that. So essentially what they're doing with a buy down is just paying the interest upfront so that it lowers their payment on paper. But you already paid the money.
Speaker 6:You already paid the money. Yeah, it doesn't grow. You've already paid the money, but they finance that into the loan, don't they? So your tech, yeah, yeah, that doesn't yeah.
Speaker 4:Not, it's not a good Avenue, but in this case scenario, most people at year three and I've just seen it because I've been in the business so long things change. Financial aspects change, jobs change. Maybe somebody lost their job, now they don't qualify. Maybe you missed a payment on something, now you don't qualify. So now you get to year let's call it a three or a five and rates are about to go up. So now what happens?
Speaker 6:It's a tough spot.
Speaker 4:That's that idea of looking at that short-term benefit, short-term gain, not looking down the road at okay, what is my financial future really going to look like, seven years, 10 years from now? And is this if I were to be stuck in this, would that be okay?
Speaker 6:Yeah, so kind of gauging the san antonio market, right. So I mean we've had what I think it's. I think it was in 2020. It was a what was a 19 increase or uh in property property property value. It was upwards of 2025 and then I think yeah, because I think it went 19, 20 again and then it happened again, right sir? So I can tell you my.
Speaker 4:We went from one point one to now. I think it's at one point nine.
Speaker 6:Dude, yeah, yeah.
Speaker 4:In five years. Yeah, so that's. That's a pretty substantial increase, and we're not the only ones that have felt it or benefited from it, because there are. And, mind you, at the same time, it's almost a blessing in disguise, because what we're facing is the largest credit card debt in America has ever seen this is true. So folks are now leveraging that equity to pay off the debt and kind of hit that reset button.
Speaker 6:Yeah, yeah, because really, covid, what we saw right during the pandemic is that you know you couldn't go anywhere, so credit debt, you know, kind of went down because people weren't spending as much. And so initially we weren't really concerned about the data points coming in because we were like, okay, well, this is just stabilizing, but now it's hit a it's hit a point where it's like, well, no, no, no, no, this isn't stabilizing.
Speaker 6:This has now gone through that previous number that we have right, or to where now it's like everything is so high because inflation hit, yeah, that now people are pretty much charging, like things like netflix, where you're supposed to be paying off. Correct.
Speaker 6:You know, and so that's what I was getting at, where I was like, when we're talking about the stock market as an indicator of how the economy's doing, it really isn't, yeah, and so that's why I'm asking, like, from a mortgage banker perspective, you know, how are you seeing clients or prospects get into homes now, because the price point is now shifted? What's the median price in San?
Speaker 4:Antonio $300, $320, right at that range. But anything under that price point is either going to be multiple offer situation because it's worth it or it needs work and folks that qualify for that amount aren't able to come up with the funds, aren't able to qualify for a 203k renovation type. But that's what we're facing currently and, the oddest thing, values are not going down.
Speaker 6:And that's what. So if supply because really supply and demand's impacted that too, Absolutely, so are we in a bubble.
Speaker 4:I can't say we're in a bubble because we're in Texas and what I have to rest my hat on is history. So history repeats itself 2008,. If that were to happen again, some type of bubble. That bubble was caused due to fraud. Yeah, this bubble, essentially, let's look at supply and demand concept. Right Right now, we're at about in San Antonio about four and a half five months of inventory. In order to become a true buyer's market, it has to get to a six month or a greater. Yeah.
Speaker 4:Now interest rates start trickling down, so there's hundreds of thousands of people sitting on the sideline waiting to throw their hat in the ring for rates to go down. Well, guess what? All the rest of the people waiting are going to do the same thing, their prices go up even more.
Speaker 4:That's right, and that is what we are on the cusp of happening, because it's not like people that wanted to buy a year ago said I'm not going to buy, I'll rent forever. Very few despite what the media says, very few want to be renters forever.
Speaker 6:Correct, correct, because I mean that's the easiest and probably well, yeah, it's definitely the easiest way to grow your net worth right Is to be able to take hold of an asset that just naturally appreciates.
Speaker 4:The average net worth of a homeowner is upwards of 300,000, whereas the average net worth of a renter is about 6,000.
Speaker 6:Wow, I did not know that True statement.
Speaker 4:I mean, that is coming directly from the data that just came out. So, that being the case, jc, we're over an hour, an hour and two minutes. I love it. We're on the money, okay. So I'm gonna have to wrap this up soon, but I don't honestly know how. But we can't run for some face right. We may need to have a round two of this with a little bit more itemized agenda, but what I want to ask you, and hopefully you can help us with this aspect, because I don't claim to know everything.
Speaker 4:I'm a student of the game and even if that game is the stock market, in your opinion expertise, how does the real estate market affect the stock market?
Speaker 6:Well the real estate market's going to, I would say they're not really necessarily directly correlated.
Speaker 6:Okay, when you're looking at still indicators like so, kpi, so key performance indicators as to how the economy is growing, it is information that you're going to take a look at from a standpoint of how many mortgage applications are in right Default rates, right.
Speaker 6:So you're going to be taking in account how those valuations are fluctuating and that's going to be an indicator as to, in this particular case, like we're thinking that the Fed's going to reduce the Fed funds rate in September 50-50 chances to 50 basis points, maybe 25. I'm thinking now 25. So that's going to, of course, affect the borrowing power that's right which we're hoping that that's going to lower, you know, over the course of the next maybe 6 to 12 months. You know we're thinking that we may get somewhere closer to about four, four, four, between four, four and a half, somewhere in there, you know, and so I would say that that is one of the ways that we're kind of evaluating the mortgage market, sure, or the housing market, as it pertains to the economy, as well as the, as well as, of course, the stock markets. Now you can still buy mortgage-backed securities, sure, well as, of course, the stock markets. Now you can still buy mortgage-backed securities, sure Right.
Speaker 6:That's a part of the market as well, and if I'm not mistaken, it's a pretty big part of the market. No, it is, it is. It is. Mbss are a huge part of the market, right, so it is impacted in that. But that goes back to your diversification, because a lot of our clients, because we're risk managers, you know we had already gotten out of night to say this more. We had already, you know, been advising our clients that you know, crypto is not the way to go.
Speaker 4:No, you're right.
Speaker 6:You know, blockchain technology is huge Sure. Right no-transcript how the market's flowing.
Speaker 4:That makes great sense and easily digestible conversion of what he just said, because that was very well said the idea of if you are trying to lock up a 30 year mortgage right now at 7% 6.5%, that mortgage has to be purchased by an investor. That investor is intending to buy this note and receive 30 years worth of interest at X rate. But if there is a indicator that shows rates are going to be coming down soon, do you think you as an investor want to buy that um higher interest rate loan mortgage backed security that is going to probably yield you maybe six months to a year of interest versus 30? That's what's happening, yeah. Yeah, yeah.
Speaker 4:Um, and those of you out there locking in interest rates and being asked by your lenders to pay one to two discount points that's also the reason is they want to get some of the money up front as an investor, because they know damn well you're going to be refinancing this loan and paying off the current that they just purchased to get into a lower interest rate. It's just what we do when rates go up and down. But yeah, that's a great way to leverage the concept of what you do into our industry and making sure that us professional experts in the mortgage side we don't have to know what the market is doing in regards to the stocks, but we do need to know how real estate affects stocks.
Speaker 6:Correlation yeah.
Speaker 4:The correlation between the two. Yeah, absolutely Gosh. There's so much more we can talk about. We are out of time, guys. Joseph, is there anything else you want to add to this? Because this has been, for me, an incredible discussion with two fine young men that I grew up with that I'm very proud of, and being able to have intellectual conversations like this man, that's deep.
Speaker 6:Yeah, man, I just want to again just show my appreciation for just having the opportunity to come on here with you guys. It's again to see the three of us from Parkwood doing what we're doing today, married with families. It's amazing and I couldn't have imagined that this would have been my life today, and my encouragement to everyone else is that it's never too late and you're able to create whatever you want. It just starts with you taking responsibility for everything that you're able to do.
Speaker 4:On the money Gosh. I couldn't have said it better. Preston, is there anything that you'd like to add to this?
Speaker 5:I just want to say if you didn't learn anything today, you weren't listening. If you did not learn, you weren't Because I learned a ton today, absolutely. If you did not learn, you weren't Because I learned a ton today, absolutely, and with these discussions.
Speaker 4:Because I'm a host, people believe that I know everything. I don't know shit guys. Look, this guy does know a lot more than he's given up, but I am a sponge when it comes to many of the topics that we go into and I love being able to treat it like an infant so that I can soak it up. I guess.
Speaker 4:I'm not just the type that is going to take this and all right onto the next whatever in life. I'm now going to dive into this to learn more about it, so that I then can articulate to my customers I'm not the expert, but this are the facts, here's what the logic is behind it and, okay, you can put the dots together for yourself.
Speaker 6:Absolutely.
Speaker 2:Again, we need to have a talk about your man money management. Okay, joe, get you a plug in.
Speaker 6:Y'all remember it. I'll end on this one here. Y'all remember Chappelle's show had Wu-Tang Financial. Oh, absolutely, I want to drop that line on you. You got to diversify your bond.
Speaker 4:Well, if anybody would like to get in touch with Joseph Milhouse, how would they get a hold of you, brother?
Speaker 6:Man, just go ahead and reach out to me on any social media platform. Very good. I'm out there and I'm actively on that and we can have a conversation.
Speaker 4:There you go. I really appreciate the company, the conversation and the education that we just witnessed here. Yeah, I would like to have you on again so that we can talk some more, dive deeper into these rabbit holes. Absolutely, because the folks out there, these are not topics that come up in school. On again so that we can talk some more, dive deeper into these rabbit holes, because the folks out there, these are not topics that come up in school. These aren't topics that you typically would see on social media. You have to go and find these things Correct. If we can continue putting it in the forefront and making it as cool as it just was, I think people will dive in and learn a little bit.
Speaker 6:Absolutely, there we go. Teach one, teach one right.
Speaker 4:Amen to that. So, that being the case, guys, if you got anything out of this discussion, please make sure to like, subscribe, share with a friend. We are now up at 9,000 subscribers and growing. It still blows my mind, as to number one, how long it took, but now that we're here, we're not stopping. I will continue to bring you guys, um, expert guests with, uh, the real, the real goods. Um. That being the case, thank you for uh continuing to tune in and until the next one, catch you later.
Speaker 1:Someone has already done and is already doing what you want to do. And no, they didn't fall into a rich family to do so. They were not born lucky. You know you can be more, you can have more, do more and be more. You know this. You wouldn't be listening otherwise.
