Don’t Hope It, Do It
A well spoken friend reminded me this week that ‘hope’ is not an active verb. It is apassive verb. This minutia wordsmithing has been ringing in my head as I observe the word ‘hope’ all around me. I see hope filling the media, embedded in handbags in advertisements, on t-shirts. President Obama is aware that just hoping for change is not enough, and change for change’s sake will not bring the results most people desire.
Like the butterfly’s wings, every change has wide-ranging effect, even if we don’t at first observe the results. Trillions of dollars poured into the banking system, may appear to have done little to change the housing crisis. The mountain of money injected in October is just now clearing the bank accounts of the initial bank reciepients.
The media has been asking ‘where did all that government money go?’
The best answer I have heard is from a Midwest bank president who said: “When an airplane is crashing, and the oxygen masks come down, it is purdent to put your own mask on first. Then help other passengers with theirs.” It was interesting to me that we just witnessed all the passengers survive an unsurvivable jet crash in America. We will survive too!
The banks are stablized. They have taken massive losses in Q4 2008. The blood letting has occurred, and the system has been flushed. Is it over? Only if people regain faith, and help their fellow passengers in a calm and orderly manner will we all get out of this alive (and with our 201k accounts in tact.)
It’s time to spend a little money again. I’m buying a new Jeep this week, 7 months early. I appreciate Chrysler and the American heritage of this institution. ‘Most likely to fail’ – I like to beg on the underdogs. As an American tax payer, I also now have a stake in their survival. Like the butterfly’s wings, every action we each make toward economic productivity is a little closer toward helping the pilots pull us out of the nose dive.
Buying a second home may also be the wisest investment of a lifetime. I will be in Vail later this week. A couple years ago while on a chairlift in Aspen, I met a man who claimed the best investment in his lifetime was buying a home in Aspen in the recession of the 1980’s. He paid $300,000 which was a lot of money, and hard to part with at the time. Banks weren’t lending. It was his life’s savings then. He had since collected 5 times more in rent, and he felt the home was worth $5 million! That was a 2007.
Fast forward to 2009. Is the home still worth $5 million? Yes, Aspen has held up. But assume it was in a lesser area, real estate purchased in 1980, would still be a great investment today. All that money poured into banks – will – it WILL – create future inflation. Real estate is a great hedge against inflation.