Shifting Gears: Smart Moves for a Rapidly Changing Economy

Buying Your Freedom

This past week I attended a funeral for a neighbor. He was a good man who was loved by all, and he passed away at the young age of 55. As I was sitting at the service and listening to the story of his life, it drove home the point that we all have limited time on this earth. We spend most of our days trading the precious time we have for money, as if our time was unlimited. The hard truth is; however, time is the most limited and precious resource we have. Conversely, there is plenty of money in the world. It is a renewable resource, and money is printed every single day. The only way we can ever escape the reality of trading our precious time for money, is owning assets that create a profit.

We all assume we will have both a job and be able to work at a job for as long as we wish to pay off the debts we owe. Reality, though, often has very different plans for our future. An illness or injury could easily derail our ability to obtain top dollar for our future time and labor.

The American Journal of Public Health reported that a job loss or work reduction in hours due to illness creates 44% of all bankruptcies in the USA. The hard truth is almost 50% of all bankruptcies initially stemmed from an unexpected illness. Not only that, an illness can severely limit your ability to work or even continue working. When you view things in this light, it becomes clear why you should not put off saving and investing for retirement until next year. Stocks, bonds and real estate (income producing assets) literally become your golden tickets to clawing back your time from this ongoing trap of trading your time for wages.

If you prioritize paying down debt and buying assets, long before you can purchase your freedom outright, you will enjoy the many benefits of living a less stressful life. Ownership brings financial security, but more importantly, it vastly improves the time you have left on this earth. Financially secure people have the ability to say “NO” to a toxic work environment or “NO” to a toxic romantic relationship just because the spouse provides financial support. 

Every investment you make, every debt you pay off, every financially smart choice you make moves you one step closer to your final escape from the perpetual time-for-cash trade.Buy CDs Before the Fed Lowers Interest Rates

When will the Fed lower interest rates? Who really knows? Right now, however, may be one of the last opportunities for a while to obtain high returns on safe, fixed-income investments like Certificates of Deposit (CDs). Many banks and credit unions are still offering CDs close to 5%. Once the Fed begins cutting rates, those interest rates will drop.

The key benefit of buying a CD before rates fall is locking in today’s high rate (yield) for the life of the CD. You can purchase a CD for a certain period of time, typically in 3 month or longer increments such as 6 months, 1 year, or even 5-years, during which time, your interest rate is guaranteed; You’re protecting yourself from rate drops if/ when the Fed lowers CD rates.

Diversify Your Portfolio

When the stock market is soaring, it’s easy to get caught up in the excitement and slowly let all your funds migrate into the stock market. After all, who doesn’t want to chase returns when the S&P 500 is hitting daily highs? But history reminds us that what goes up can come down—sometimes dramatically.

Just as I encouraged everyone to put money into the market when it was down, I also encourage everyone to make sure they stay diversified by having fixed income producing assets like bonds and/or CDs.

A study by Vanguard shows us that a classic 60/40 portfolio (60% stocks, 40% bonds) outperformed an all-stock portfolio during 8 of the last 10 downturns. I am not predicting a stock-market downturn, but I am predicting that those with a diversified portfolio will do better in the long haul. 

Diversify your investments without delay!

A Rapidly Changing Job Market Also Brings Big Opportunities

Our economy and culture seem to be going through a major directional shift. After 5 decades of our economy being dominated by tech, finance, and service-based growth, converging events have supercharged the demand for industrial and trade-based workers.

The converging events include:

• Infrastructure overhaul initiatives

• Reshoring manufacturing

• The reindustrialization of America

Most desperately needed skilled trades today and tomorrow:

• Electricians

• Plumbers, pipefitters, & steamfitters

• Welders

• HVAC Technicians

• Carpenters

If you have a high school student in your family or know someone who needs to make a change in their life, make sure they understand the huge opportunities available in these fields. The future will belong not only to tradespeople, but tradespeople who can blend technical trade skills with the appropriate supporting technology such as smart tools, diagnostics, 3D modeling, automation technology, and even AI.

What if your high school student is not good with their hands (like me) or has zero interest in working in one of these physical trades?

High demand TECHNICAL skilled trades that do not require a tool belt or dirty hands:

• Project estimators and construction analysts utilize software to calculate job costs, timelines, and materials.

• CAD designers / BIM Technicians create 3D models of buildings, HVAC systems, electrical plans, etc.

• Logistics and supply chain coordinators manage materials, equipment delivery, and help with job site coordination.

• Drone operators and inspectors handle drones used in roofing, electrical line inspection, real estate, and construction.

• Technicians and control specialist programmers monitor software that runs smart factories and their HVAC systems.

High demand BUSINESS roles in our new industrial economy: 

• Operations and supply chain managers coordinate materials, equipment, and labor across various job sites and factories.

• Project and construction managers run complex, multi-million-dollar building and infrastructure projects.

• Finance and equipment leasing are people who help contractors and companies secure funding, manage costs, or lease expensive equipment like cranes, trucks, and robotics.

• Marketing and sales in B2B industries personnel work in companies that need branding, websites, digital advertising, and professional sales teams to win contracts.

• Data analytics for field operations are workers who use data to improve job site efficiency, safety, and performance.

Our society is rapidly changing. Those who prepare will prosper; those who procrastinate will struggle. Such is the way it has always been. 

—Larry & Lisa Faulkner