This past year has been a challenge for a lot of people, and certainly the real estate industry was one of the hardest hit. Sellers have had a tough time finding enough good buyers to generate reasonable offers - if any - on their homes, and so quite a few of them have decided to hold off for awhile until the dust settles.
Agents have left the industry in droves, with many of them not able to make enough money to even cover their expenses, let alone support their families and have any fun money left over. So...what will be next?
I'm optimistic about 2009. Our page views have shot through the roof on our website since the day after Christmas, and that means there are waterfront buyers out there starting to look already. That is generally what happens after a slow market like the one last year. And the 2009 sales may speed up even more quickly because of the low interest rates!
At the same time, we are making several changes to our overall marketing plan for our listings. In an attempt to make sure we find every possible buyer out there for our listings, we have created several new concepts that are proving quite interesting.
You will be seeing some of these on our website in the days ahead. But, if you're thinking of selling fairly soon, feel free to contact us for more information on how you can benefit from some of these cutting edge ideas.
Remember...the spring market starts way before spring. So don't let it pass you by!
Thursday, January 1, 2009
Thursday, December 11, 2008
A Few Bright Spots
There was a good comment today on my last blog article about doing what you do best and staying positive. Those are definitely good recommendations, and we should all try to focus on the positive things going on around us.
As many of you may already know, we also own the websites at LakehomesUSA.com, RiverhomesUSA.com, and OceanhomesUSA.com. In doing so, we communicate each day with real estate agents and brokers across the country. Recently, although sporadic, I'm starting to hear more comments about good things going on in various markets, and that tends to shine a brighter light on days ahead.
Just in the last week, I've had positive comments from agents regarding their markets in California, Alabama, New Jersey, Florida and Mississippi. It's not all rosy out there, but there seems to be some sense of doom and gloom subsiding a bit.
We've also had a few more buyers contacting us recently, and in Minnesota you can't complain about that this time of year. See, I'm already in a better mood.
I spend a lot of time these days sitting at my desk and running this company, so it might be good for me to get outside a little more often. If any of you would like the company of an experienced lakeshore specialist in your search for just the right lake place, give me a call or email and we can get to work on it right away!
Dan
As many of you may already know, we also own the websites at LakehomesUSA.com, RiverhomesUSA.com, and OceanhomesUSA.com. In doing so, we communicate each day with real estate agents and brokers across the country. Recently, although sporadic, I'm starting to hear more comments about good things going on in various markets, and that tends to shine a brighter light on days ahead.
Just in the last week, I've had positive comments from agents regarding their markets in California, Alabama, New Jersey, Florida and Mississippi. It's not all rosy out there, but there seems to be some sense of doom and gloom subsiding a bit.
We've also had a few more buyers contacting us recently, and in Minnesota you can't complain about that this time of year. See, I'm already in a better mood.
I spend a lot of time these days sitting at my desk and running this company, so it might be good for me to get outside a little more often. If any of you would like the company of an experienced lakeshore specialist in your search for just the right lake place, give me a call or email and we can get to work on it right away!
Dan
Thursday, December 4, 2008
Heading For 2009
You may notice a slightly different look to our website today. Over the coming months we plan to bring Lakehomes.com to a new level of design and format, and the logo seemed to be a good first step.
You've probably also seen a few video camera graphics popping up to the side of some of our listings, which will make it easier for long distance buyers to get a better perspective of a property before they make a trip to see it. More and more of these will be available in the days ahead.
As the new logo points out, Lakehomes.com has been around since 1996 - longer than any other waterfront website. It is based on the simple concept the "Specialized Agents" can do a more productive job in guiding waterfront buyers and sellers to their desired goal. And with the Lakehomes.com name behind them, our agents have some of the best resources available in Internet marketing and expert knowledge to make sure their clients are getting the exposure and guidance they deserve.
The real estate business has changed immensely over the past twenty years, when I first started my career. The days of sending an ad for a new listing into the newspaper several days in advance, have now been replaced by immediate and thorough exposure for those properties on niche websites such as ours.
As a seller, it is probably more confusing than ever to try and figure out what types of online - or offline - marketing may work best. And with the slowdown in the economy, the decisions you make may be more important than ever.
I have had a lot of calls lately from prospective sellers asking me what kinds of things we can do - or they can do - to attract a buyer to their home or property. The most honest answer I can give is, "I'm not sure." Having great exposure is no doubt a big part in getting buyers to find you, but there will be many other factors that come into play on each particular property...and the expertise of the agent you choose to work with is a huge one.
It has been our goal for many years to provide a deeper value to Lakehomes.com than just as a website to find properties. The site - and the agents you see on it - are an extension of the waterfront niche that we built long before our competitors came around. And from personally working with thousands of lakeshore buyers and sellers throughout the years, we have a pretty good sense of what is important to them, in general.
The next stage of Lakehomes.com will be different from the past. I firmly believe the real estate industry will need to re-tool along with the automakers if they are to come out of this downturn in decent shape. Many brokers have continued to hang on to antiquated methods of doing business, and I don't plan to be in that camp.
So it is now time to move ahead with new ideas. Many of those are in my head, and I'll release them to the website now and then. But the real change will be the philosophy on how the business operates to benefit the consumer the most...far beyond changes in design or added features.
The one thing I'm sure of is that you will see a lot more of Lakehomes.com soon. And...you will see a lot more waterfront real estate sold because of it!
You've probably also seen a few video camera graphics popping up to the side of some of our listings, which will make it easier for long distance buyers to get a better perspective of a property before they make a trip to see it. More and more of these will be available in the days ahead.
As the new logo points out, Lakehomes.com has been around since 1996 - longer than any other waterfront website. It is based on the simple concept the "Specialized Agents" can do a more productive job in guiding waterfront buyers and sellers to their desired goal. And with the Lakehomes.com name behind them, our agents have some of the best resources available in Internet marketing and expert knowledge to make sure their clients are getting the exposure and guidance they deserve.
The real estate business has changed immensely over the past twenty years, when I first started my career. The days of sending an ad for a new listing into the newspaper several days in advance, have now been replaced by immediate and thorough exposure for those properties on niche websites such as ours.
As a seller, it is probably more confusing than ever to try and figure out what types of online - or offline - marketing may work best. And with the slowdown in the economy, the decisions you make may be more important than ever.
I have had a lot of calls lately from prospective sellers asking me what kinds of things we can do - or they can do - to attract a buyer to their home or property. The most honest answer I can give is, "I'm not sure." Having great exposure is no doubt a big part in getting buyers to find you, but there will be many other factors that come into play on each particular property...and the expertise of the agent you choose to work with is a huge one.
It has been our goal for many years to provide a deeper value to Lakehomes.com than just as a website to find properties. The site - and the agents you see on it - are an extension of the waterfront niche that we built long before our competitors came around. And from personally working with thousands of lakeshore buyers and sellers throughout the years, we have a pretty good sense of what is important to them, in general.
The next stage of Lakehomes.com will be different from the past. I firmly believe the real estate industry will need to re-tool along with the automakers if they are to come out of this downturn in decent shape. Many brokers have continued to hang on to antiquated methods of doing business, and I don't plan to be in that camp.
So it is now time to move ahead with new ideas. Many of those are in my head, and I'll release them to the website now and then. But the real change will be the philosophy on how the business operates to benefit the consumer the most...far beyond changes in design or added features.
The one thing I'm sure of is that you will see a lot more of Lakehomes.com soon. And...you will see a lot more waterfront real estate sold because of it!
Friday, November 21, 2008
A New Focus to this Blog
My dad was a math teacher for more than thirty years. I always thought it would be a terrible job trying to create new and interesting subject material each day from a basic foundation that really doesn't change. He was a great teacher, but I think he got a little bored near the end of his career.
There were a lot of other teachers I knew who also seemed like they had lost interest in new ideas as the years wore on them. Some would not even let their students have copies of the tests that they took, because they would surely get passed around and it would be extra work to think up new questions for the following year.
It certainly isn't just teachers that go through these stages during their tenure, but it may be easier to recognize since they tend to focus on a single main subject...from the time they enter their profession until the end of it.
Sadly, many of those intelligent people - who were very motivated when they began their careers - got tired. And that is pretty much the same thing that happens to any of us in time, unless we change our focus now and then.
As much as I enjoy writing about my experiences with lake property and the real estate market in general, the writing style becomes a little stale after awhile. Once that happens, I become less interested in providing new information, and you have less interest in reading it.
You may have already noticed that a lot of my earlier articles provided a reasonable amount of experiential knowledge on what types of things to keep an eye out for when buying or selling lake property. If you haven't read them already, you can easily look back at those jottings to get some insight into my two decades of work in this niche. Several people have mentioned to me how valuable some of that information was to them, and it made them think differently on how to approach the market either as a seller or a buyer.
However, as the 2008 market wained, it got a bit repetitious to think of new ways to talk about a limited bucket of items, like the difference in values between sandy shoreline or the mucky variety. So I started spewing my personal thoughts on several things tied to the economic doldrums. After all, I think blogs should be a direct flow of one's own beliefs from the brain to the keyboard...even if it is off the subject a bit.
Now, as we turn to the last page of the current calendar, I'm also getting tired of this subject. I've seen enough news reports on deflation and bailouts to sicken me for quite some time. So, I'm searching for a new slant to this blog! I'll happily accept recommendations, so if you have some ideas just throw them my way.
But until I get zapped with enthusiasm from some type of turnaround - or at least a teeny little glow at the end of the tunnel - I'm going to look around for subject matter from a few of my colleagues across the country. Maybe with less of a focus entirely on waterfront property, but ideas and successes that seem to be working for people in other areas who are attempting to play the real estate game during in this dreary climate.
So let's quit focusing on the bad news (like the Dow dropping almost 700 points today), and instead turn to all the positive things going on in the world of real estate. If nothing else, it will keep me pretty busy trying to dig some up! And if it helps a few of my readers with their 2009 real estate plans, I did my job.
Dan
There were a lot of other teachers I knew who also seemed like they had lost interest in new ideas as the years wore on them. Some would not even let their students have copies of the tests that they took, because they would surely get passed around and it would be extra work to think up new questions for the following year.
It certainly isn't just teachers that go through these stages during their tenure, but it may be easier to recognize since they tend to focus on a single main subject...from the time they enter their profession until the end of it.
Sadly, many of those intelligent people - who were very motivated when they began their careers - got tired. And that is pretty much the same thing that happens to any of us in time, unless we change our focus now and then.
As much as I enjoy writing about my experiences with lake property and the real estate market in general, the writing style becomes a little stale after awhile. Once that happens, I become less interested in providing new information, and you have less interest in reading it.
You may have already noticed that a lot of my earlier articles provided a reasonable amount of experiential knowledge on what types of things to keep an eye out for when buying or selling lake property. If you haven't read them already, you can easily look back at those jottings to get some insight into my two decades of work in this niche. Several people have mentioned to me how valuable some of that information was to them, and it made them think differently on how to approach the market either as a seller or a buyer.
However, as the 2008 market wained, it got a bit repetitious to think of new ways to talk about a limited bucket of items, like the difference in values between sandy shoreline or the mucky variety. So I started spewing my personal thoughts on several things tied to the economic doldrums. After all, I think blogs should be a direct flow of one's own beliefs from the brain to the keyboard...even if it is off the subject a bit.
Now, as we turn to the last page of the current calendar, I'm also getting tired of this subject. I've seen enough news reports on deflation and bailouts to sicken me for quite some time. So, I'm searching for a new slant to this blog! I'll happily accept recommendations, so if you have some ideas just throw them my way.
But until I get zapped with enthusiasm from some type of turnaround - or at least a teeny little glow at the end of the tunnel - I'm going to look around for subject matter from a few of my colleagues across the country. Maybe with less of a focus entirely on waterfront property, but ideas and successes that seem to be working for people in other areas who are attempting to play the real estate game during in this dreary climate.
So let's quit focusing on the bad news (like the Dow dropping almost 700 points today), and instead turn to all the positive things going on in the world of real estate. If nothing else, it will keep me pretty busy trying to dig some up! And if it helps a few of my readers with their 2009 real estate plans, I did my job.
Dan
Wednesday, November 12, 2008
Living In The Moment
They say that time passes us by if we don't "live in the moment." We miss out on all the beautiful things around us by always looking ahead. And later we look back on memories that we wish we would have spent more time enjoying when they were taking place.
Most all of us do it. We are excited to get on with the next stage of our lives, whether it is an upcoming wedding, a new car, a creative marketing campaign, or next month's vacation. But whatever that next big event is on our calendar or in our mind, we pass up opportunities to take advantage of the little things that can truly make us happy.
I believe there is also a variation of this "living in the moment" philosophy called "getting caught up in the moment," but not in the sense of just an isolated event. It could be that a great majority of the American public is now caught up in the moment of how bad the economy is...or seems to be. And this is pretty much just the opposite of its cousin: "living in the moment," because it won't let people move ahead - or even think about moving ahead.
It is no doubt true that there is a wide array of financial difficulties tied to this economic downturn. Financing is more difficult, and equity has been eaten up rather quickly. But there is still a lot of capital available, and we are seeing more cash sales than we used to.
No matter what situation we are in, there is always a group of people that look beyond the news stations and the barrage of negative reports, and just charge ahead. They don't do it carelessly or haphazardly, but there seems to be another driving force of self confidence involved that gives them comfort in making forward-thinking decisions that others wouldn't risk.
Everyone knows these types of people. Nothing bad really ever seems to stick to them, and they tend to be genuinely happy. Whereas, those who constantly worry about the terrible things that might happen today or next week - or the fact that their 401K has lost 27% of its value and may never come back - cannot pull themselves out this self-perpetuating rut of scarry thinking.
Obviously, real estate has become a large part of this worry. Those who can't seem to sell their homes are worried that the real estate value they perceived as rock solid may never come back, and they don't have enough equity left to even move on with their lives. These are real worries, and there are no great answers to that problem currently. Sellers in this position need to use every resource possible to figure out how to get the best exposure for their properties, and to make them as appealing as they can.
On the other end of the rope are the buyers that would never think of venturing into this imaginary vortex called the real estate market, where they might get swept away in a whirlwind of shrinking values. It's true that something like that might happen, but it's also true that I might get home tonight and find Martians have taken over my house and made "Ollie the Dog" their leader. We just don't know what the future holds, and that is what makes life so interesting.
If we are too petrified to take chances and are unable to consider what types of positive experiences may await us if we do, then we are simply "caught up in the moment." And we will pass by those opportunities, leaving others to take advantage of them instead. Only to later say, "Boy, were they lucky to buy that when they did! I can't believe the price they got that for!...blah, blah, blah, blah, blah!"
That is what is happening with real estate sales right now. Home prices in many areas are similar to prices from 2004, and some buyers who are peering into the future are seeing happy times at their new lake cabin or the enjoyment of an upgraded home they could never have afforded in the past. For many of them, the crystal ball is showing visions of instant equity as soon as this market turns around. They know that buying anything at the bottom is a matter of luck, and they are convinced that we are close enough.
Since most people purchase waterfront properties for reasonably long-term enjoyment, buyers in this category are assuming a little bit of risk while increasing their "utils of satisfaction." They don't need immediate gratification from all ends; instead they look to a steadily increasing level of enjoyment - both in new experiences with family and friends...and most likely in real estate value in the not too distant future.
To make this even more exciting for waterfront and recreational buyers, prices and availability for lake properties and large parcels of raw land are pretty impressive. In the two decades I've been in this business, I don't think I've seen such a wide selection of good vacation properties for sale. Not only are values low compared to construction costs, but there are plenty of choice properties that you would never have seen hit the open market in past years.
So try not to get too caught up in all the bad news. If the Dow keeps going down 400 points each day, we only have about 20 of them to go anyway. You probably won't even be able to close before then!
And if it doesn't keeping dropping, you'll have plenty of time to "live in the moment" at your new lake home.
Dan
Most all of us do it. We are excited to get on with the next stage of our lives, whether it is an upcoming wedding, a new car, a creative marketing campaign, or next month's vacation. But whatever that next big event is on our calendar or in our mind, we pass up opportunities to take advantage of the little things that can truly make us happy.
I believe there is also a variation of this "living in the moment" philosophy called "getting caught up in the moment," but not in the sense of just an isolated event. It could be that a great majority of the American public is now caught up in the moment of how bad the economy is...or seems to be. And this is pretty much just the opposite of its cousin: "living in the moment," because it won't let people move ahead - or even think about moving ahead.
It is no doubt true that there is a wide array of financial difficulties tied to this economic downturn. Financing is more difficult, and equity has been eaten up rather quickly. But there is still a lot of capital available, and we are seeing more cash sales than we used to.
No matter what situation we are in, there is always a group of people that look beyond the news stations and the barrage of negative reports, and just charge ahead. They don't do it carelessly or haphazardly, but there seems to be another driving force of self confidence involved that gives them comfort in making forward-thinking decisions that others wouldn't risk.
Everyone knows these types of people. Nothing bad really ever seems to stick to them, and they tend to be genuinely happy. Whereas, those who constantly worry about the terrible things that might happen today or next week - or the fact that their 401K has lost 27% of its value and may never come back - cannot pull themselves out this self-perpetuating rut of scarry thinking.
Obviously, real estate has become a large part of this worry. Those who can't seem to sell their homes are worried that the real estate value they perceived as rock solid may never come back, and they don't have enough equity left to even move on with their lives. These are real worries, and there are no great answers to that problem currently. Sellers in this position need to use every resource possible to figure out how to get the best exposure for their properties, and to make them as appealing as they can.
On the other end of the rope are the buyers that would never think of venturing into this imaginary vortex called the real estate market, where they might get swept away in a whirlwind of shrinking values. It's true that something like that might happen, but it's also true that I might get home tonight and find Martians have taken over my house and made "Ollie the Dog" their leader. We just don't know what the future holds, and that is what makes life so interesting.
If we are too petrified to take chances and are unable to consider what types of positive experiences may await us if we do, then we are simply "caught up in the moment." And we will pass by those opportunities, leaving others to take advantage of them instead. Only to later say, "Boy, were they lucky to buy that when they did! I can't believe the price they got that for!...blah, blah, blah, blah, blah!"
That is what is happening with real estate sales right now. Home prices in many areas are similar to prices from 2004, and some buyers who are peering into the future are seeing happy times at their new lake cabin or the enjoyment of an upgraded home they could never have afforded in the past. For many of them, the crystal ball is showing visions of instant equity as soon as this market turns around. They know that buying anything at the bottom is a matter of luck, and they are convinced that we are close enough.
Since most people purchase waterfront properties for reasonably long-term enjoyment, buyers in this category are assuming a little bit of risk while increasing their "utils of satisfaction." They don't need immediate gratification from all ends; instead they look to a steadily increasing level of enjoyment - both in new experiences with family and friends...and most likely in real estate value in the not too distant future.
To make this even more exciting for waterfront and recreational buyers, prices and availability for lake properties and large parcels of raw land are pretty impressive. In the two decades I've been in this business, I don't think I've seen such a wide selection of good vacation properties for sale. Not only are values low compared to construction costs, but there are plenty of choice properties that you would never have seen hit the open market in past years.
So try not to get too caught up in all the bad news. If the Dow keeps going down 400 points each day, we only have about 20 of them to go anyway. You probably won't even be able to close before then!
And if it doesn't keeping dropping, you'll have plenty of time to "live in the moment" at your new lake home.
Dan
Monday, October 27, 2008
Shhh! Did You Hear That?
As I was driving somewhere today, I heard a voice come out of the radio about housing sales being up about 2% in September. Now they really didn't say if they were up from August, or up from September last year, but at least they were supposedly up from something!
While I continued to cruise along thinking about how great this was, and imagining SOLD riders springing up on For Sale signs faster than buyers could gas up their cars, I switched radio stations and heard another voice mentioning that home values are at the same level that they were in September of 2004. And someone told me last week that they heard this whole housing thing was supposed to pick up in the 3rd quarter of 2023.
In just five or ten minutes of watching CNBC or FNN, you will get a similar array of stupidity from an endless parade of experts regarding the stock market and the financial mess. The political process is worse yet, with hour long debates from a cast of characters about "Joe the Plumber!"
Jon Stewart, of The Daily Show, may have done the best job on this nonsense with his bit piece this evening on political analysts called: "Who the "BLEEP" is This Guy?"
It seems to me that the rate of consumer indecision correlates directly to the number of analysts spewing out garbage at any given point in time. In fact, I may attempt to prove that in a theorem, since the real estate market is still a bit slow from what I've seen. Although, then I suppose I would have to think up a good name for it, because no one wants to go through the trouble of creating a time consuming theorem without giving it a catchy name!
Look at the Pythagorean Theorem. Now that's one catchy name for a theorem! Athough, it didn't hurt that he already had kind of a fun name as Pythagoras. Parents just seemed to be a lot more creative with names back then.
And wouldn't you know it, there's already an Anderson's Theorem. I suppose that if this real estate market picks up any more I might just have to name it Dan's Theorem to save some time. I don't think there's one of those yet.
Maybe someday analysts will get paid based on merit and how accurate they are with their prognostications, and maybe then we will be able to believe them. But until that time we will have to make political decisions, investment decisions, and real estate decisions based on incessant babble from talking heads...or on our own gut feelings.
Oh...gotta go. ABC News just called and they're having a round-table discussion tomorrow morning that includes all the people with eight letters in their last name, and how that relates to your lifetime earning capacity. Hopefully, I can get a few words in because I have some pretty strong opinions on this subject!
While I continued to cruise along thinking about how great this was, and imagining SOLD riders springing up on For Sale signs faster than buyers could gas up their cars, I switched radio stations and heard another voice mentioning that home values are at the same level that they were in September of 2004. And someone told me last week that they heard this whole housing thing was supposed to pick up in the 3rd quarter of 2023.
In just five or ten minutes of watching CNBC or FNN, you will get a similar array of stupidity from an endless parade of experts regarding the stock market and the financial mess. The political process is worse yet, with hour long debates from a cast of characters about "Joe the Plumber!"
Jon Stewart, of The Daily Show, may have done the best job on this nonsense with his bit piece this evening on political analysts called: "Who the "BLEEP" is This Guy?"
It seems to me that the rate of consumer indecision correlates directly to the number of analysts spewing out garbage at any given point in time. In fact, I may attempt to prove that in a theorem, since the real estate market is still a bit slow from what I've seen. Although, then I suppose I would have to think up a good name for it, because no one wants to go through the trouble of creating a time consuming theorem without giving it a catchy name!
Look at the Pythagorean Theorem. Now that's one catchy name for a theorem! Athough, it didn't hurt that he already had kind of a fun name as Pythagoras. Parents just seemed to be a lot more creative with names back then.
And wouldn't you know it, there's already an Anderson's Theorem. I suppose that if this real estate market picks up any more I might just have to name it Dan's Theorem to save some time. I don't think there's one of those yet.
Maybe someday analysts will get paid based on merit and how accurate they are with their prognostications, and maybe then we will be able to believe them. But until that time we will have to make political decisions, investment decisions, and real estate decisions based on incessant babble from talking heads...or on our own gut feelings.
Oh...gotta go. ABC News just called and they're having a round-table discussion tomorrow morning that includes all the people with eight letters in their last name, and how that relates to your lifetime earning capacity. Hopefully, I can get a few words in because I have some pretty strong opinions on this subject!
Friday, October 10, 2008
Here's A Thought
Well, I really wanted to get off this stock market stuff this week, but it seems to be taking center stage in our lives. Every day they tell us we lost another Trillion Dollars or so...but I'm really not sure where it went!
Maybe we are just dealing with "funny money" here. Not that it's funny how everyone is losing their retirement accounts and other supposedly safe investments, but how did we really get here? I imagine that a good part of it stems from the idea that we should be able to make a buck from someone else's actions - but it just doesn't seem to work that way.
What I'm talking about is this...
When I built my real estate business, or when the guy down the street started his hardware store, we each had to put a lot of money, time and hard work into making a profit. There were no guarantees other than looking at similar businesses that seemed to be making money, and trying to run our businesses as well - or better - than they were running theirs.
If we did have some extra money at the end of the month, we generally put it back into our business in the form or advertising, capital improvements, or other investments that we thought would help us grow - and sometimes we needed to borrow money to accomplish these same things - but if we were to succeed or fail, it would be our doing. We firmly believed that no one could make us more money that we could make ourselves!
Somewhere along the line things got a little bit blurred. Instead of people wanting to start businesses and build them from scratch - mutual funds, stocks and all kinds of fancy investment vehicles began offering returns that were out of sight. What sense did it make to work 20 hour days to create a successful company when you could just invest in one (or several through a spectacular fund) that paid back 50%, or more, on returns last year? Why not let someone else do all the work?
That is what a lot of people did. And many of the whiz-kids who were handling once-safe retirement accounts decided to do that too!
Hedge fund managers and others in high finance made tens of millions, if not billions, managing all this easy money. But everyone kind of forgot what the money was for.
The reason the money was even there in the first place was to invest in little companies (like yours and mine) that grew to be bigger companies over time because of our hard work. We may have brought in an investor or two during our early years who truly believed in our vision and wanted to be a part of our growth. But as we got bigger, most investors didn't even know what our vision was anymore...however, they were sure that the money manager they put their $50,000 nest egg with understood it completely.
And, of course, now that we worked and worked to get our little businesses to a level that might sustain our kids' college educations and our retirement, our little businesses are having a hard time making money because no one has anymore to spend. All the people who invested in the big companies - hoping to create their own nest eggs for college and retirement - have an egg or two missing. And the nest, itself, is getting a bit tattered.
It might not have been a bad idea for the government to hand out $100,000 loans last week to the little guys and gals who would build their own businesses from scratch, instead of throwing $700 Billion into the "abyss" like they did. That would have been enough to get about 7 million motivated people up and running...and in control of their own destiny!
Maybe we are just dealing with "funny money" here. Not that it's funny how everyone is losing their retirement accounts and other supposedly safe investments, but how did we really get here? I imagine that a good part of it stems from the idea that we should be able to make a buck from someone else's actions - but it just doesn't seem to work that way.
What I'm talking about is this...
When I built my real estate business, or when the guy down the street started his hardware store, we each had to put a lot of money, time and hard work into making a profit. There were no guarantees other than looking at similar businesses that seemed to be making money, and trying to run our businesses as well - or better - than they were running theirs.
If we did have some extra money at the end of the month, we generally put it back into our business in the form or advertising, capital improvements, or other investments that we thought would help us grow - and sometimes we needed to borrow money to accomplish these same things - but if we were to succeed or fail, it would be our doing. We firmly believed that no one could make us more money that we could make ourselves!
Somewhere along the line things got a little bit blurred. Instead of people wanting to start businesses and build them from scratch - mutual funds, stocks and all kinds of fancy investment vehicles began offering returns that were out of sight. What sense did it make to work 20 hour days to create a successful company when you could just invest in one (or several through a spectacular fund) that paid back 50%, or more, on returns last year? Why not let someone else do all the work?
That is what a lot of people did. And many of the whiz-kids who were handling once-safe retirement accounts decided to do that too!
Hedge fund managers and others in high finance made tens of millions, if not billions, managing all this easy money. But everyone kind of forgot what the money was for.
The reason the money was even there in the first place was to invest in little companies (like yours and mine) that grew to be bigger companies over time because of our hard work. We may have brought in an investor or two during our early years who truly believed in our vision and wanted to be a part of our growth. But as we got bigger, most investors didn't even know what our vision was anymore...however, they were sure that the money manager they put their $50,000 nest egg with understood it completely.
And, of course, now that we worked and worked to get our little businesses to a level that might sustain our kids' college educations and our retirement, our little businesses are having a hard time making money because no one has anymore to spend. All the people who invested in the big companies - hoping to create their own nest eggs for college and retirement - have an egg or two missing. And the nest, itself, is getting a bit tattered.
It might not have been a bad idea for the government to hand out $100,000 loans last week to the little guys and gals who would build their own businesses from scratch, instead of throwing $700 Billion into the "abyss" like they did. That would have been enough to get about 7 million motivated people up and running...and in control of their own destiny!
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