This is as good as it gets

The US economy continues to out-innovate, out-produce, and out-perform every economy in the world. US technology and innovation are the envy of the world. Despite the short-term uncertainty created by a messy political process, our constitutional republic that has lasted over 200 years continues to function and allow innovation and growth to continue.

The US Economy and investments markets are doing as well as can be imagined, so let’s just enjoy it for a second before something comes along and ruins it.

#1 the market is at an all-time, up 22% this year.

This is a symptom of all the causes I’ll point out in the following blog. The economy is rip-roaring, and the stock market is reacting.

#2 GDP

The US Economy continues to grow at a consistent rate. I’m going to say it. Us companies and innovation cannot be stopped. Not Covid, not inflation, not war, can stop the US innovation machine. The French want peaceful lives, American’s want innovative, exciting lives. One is better for your soul, the other better for the economy. The constant innovation, and generally friendly regulation means the US makes better hardware, software, machines, and weaponry than anyone else. It’s good to be on top.

#3 Employment rates continue to stay low, despite record immigration and high interest rates.

#4 Interest rates are trending lower. This is stimulative for the economy.

#5 Oil Prices are low, and because of consistent US energy production. America is no longer beholden to foreign countries for their energy supplies.  

#6 World conflicts are only simmering.

This can be perceived as negative or positive for the world. Generally, when conflicts are simmering it does not lead to all-out war. All-out war (like Ukraine vs Russia) happens suddenly and forcefully. If Iran wanted to go to war with Israel, it would. Like a moth flying into a flame, the US cannot seem to avoid getting involved in all-out wars. The fact that China/Taiwan and Iran/Israel is merely simmering, means the likelihood of a real war is lessened, and I think that’s good for the US.

#7 Housing tells us the story of the economy.

In some ways, housing is the economy. An exaggeration, yes, but it’s the one thing we can’t outsource, build overseas, or move away from. Housing is permanent

“The housing market represents about 15 percent to 18 percent of U.S. GDP, said Lindsey Bell, Investment Strategist at CFRA, citing figures from the National Association of Home Builders. "In other words, a weak or strong housing market can have substantial influence on the direction of the overall economy," Bell added.”

https://www.thestreet.com/markets/why-housing-is-a-leading-economic-indicator-14853734

And we need millions of new units to account for the last 14 years of building coupled with record immigration.

There you have it, a quick look at the best it can be. Enjoy October 2024 because we don’t have many months or markets that feel like it.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

40 Hour Work Week

By: Zachary Bouck, CFP®

Insights on Building Wealth

#1 To achieve wealth, use your cash flow to acquire appreciating assets. I prefer stocks, but options like real estate, collectibles, or other investments can work too.

#2 The more cash flow you generate, the more appreciating assets you can purchase. To build wealth, finding ways to increase your cash flow is essential.

#3 To generate significant income, you must provide unique value that others cannot. This inevitably involves improving various aspects of yourself, enabling you to offer meaningful help to others, who will in turn reward you financially.

This brings us to The 4-Hour Workweek, a book that addresses how to provide substantial value in the shortest possible time. While I’m not a fan of rushing through tasks, Tim Ferriss’s mindset offers intriguing hacks for maximizing productivity.

Though the phrase "4-Hour Workweek" might seem gimmicky, the principles in the book are valuable for achieving our goal of delivering significant value. With limited time each week, we must use it efficiently to accomplish the three objectives outlined above.

The Historical Context of Work

Karl Marx argued that the bourgeoisie seized the means of production, forcing the proletariat into a life of misery. If you were born into serfdom in medieval Europe or as a peasant under the Russian monarchy, it’s hard to dispute his claim.

Consider a scenario where the king owned all the land’s wild game, and hunting for food carried the death penalty. In such a context, it’s evident that the means of survival were controlled by those in power.

Experiencing Historical Hardships

Going camping can give a modern person a glimpse of what life might have been like 200 years ago. Even if you bring food, gadgets, and a comfortable mattress, camping remains tedious. Finding water, dealing with dirt in your meals, bathing in cold streams, and fending off bugs can make you long for a warm shower after just three days.

Even Marx, in his ideal scenario, suggested that people might work just eight hours a day if conditions were right. Thus, the notion of a 4-Hour Workweek is audacious. Who can fathom working only four hours a week when the norm is eight hours a day?

This bold claim is likely what contributed to Tim Ferriss's monumental success with the book. Following the traditional trajectory of school, job, marriage, community, and retirement, the idea of a 4-Hour Workweek seems exaggerated.

Ladders of Wealth Creation

Our discussion connects closely to the “ladders of wealth creation.” After seven podcast episodes delving into Nathan Barry’s concepts, I believe we can enhance our approach for 2024—let’s call it Ladders of Wealth Creation 2.0.

Evaluating the Ladders: Can You Achieve a 4-Hour Workweek?

1. 1st Ladder: If you’re paid by the hour, a 4-hour workweek won’t accumulate wealth due to limited income potential. While you might reduce hours in a salaried position through efficiencies, revealing those efficiencies could jeopardize your job.

2. 2nd Ladder: Highly unlikely. Some high-commission careers, like commercial real estate or heavy equipment sales, are very competitive.

3. 3rd Ladder: Yes, but only after years of work. “Get rich quick” schemes, like stock trading or drop-shipping, are also competitive, and any market inefficiencies you find may vanish quickly.

4. 4th Ladder: Yes, if you have capital, royalties, or rental income. Creating income through an investment portfolio, real estate, or passive content (like music or videos) makes a sub-10 hour workweek feasible.

Key Takeaways

During our podcast on this topic, we discuss how Tim’s idea that “life is negotiable” is a powerful notion today. Regardless of your parents’ jobs or your field of study, all four ladders of wealth creation are available to you. Transitioning between them can be daunting, but if your goal is to reduce work hours or increase cash flow, it’s essential.

When reading The 4-Hour Workweek, focus on what resonates with you and set aside what doesn’t. Personally, here are my key takeaways:

• Life is negotiable.

• Strive for effectiveness, not just efficiency.

• Time, mobility, and options matter more than a specific income goal.

Everyone may draw different lessons from this book, making it worth reading and revisiting every few years.

Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Stock investing includes risks, including fluctuating prices and loss of principal.​ There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.​ ​The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful

September 2024 Blog

By: Zachary Bouck, CFP®

Another month, another fluctuation in the stock market.

Source: Ycharts

When we look at the S&P 500’s performance over the past 50 years (from 1950 to 2024), the average annual return has been 11.48%. Breaking it down by month, this translates to roughly a 1% return per month (though this is a simplification for conceptual purposes). Historically, September has been the weakest month for stock returns, while October, November, and December tend to align more closely with the average 1% return.

Source: officialdata.org

So, given September’s tendency for volatility, is now a good time to invest in businesses through the stock market?

If you're focusing on the next 12 months, be prepared for some turbulence. While economic data isn’t disastrous, it’s not particularly encouraging either. The job market is cooling, which often signals a slowing economy. 

However, if you can look beyond the next year and focus on the next 5 years, the outlook is much more promising. Developed economies around the world continue to innovate and grow. Here are a few major projects currently in development that I find particularly exciting:

We’re also just now figuring out what to do with all the computing power we have.

Source: The Wall Street Journal

Unlike the internet bubble of 2000, today’s platform companies are not only profitable but also poised for continued growth.

Stock market investments are inherently long-term commitments, and despite short-term uncertainties, the future remains bright.

Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Stock investing includes risks, including fluctuating prices and loss of principal.​ There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.​ ​The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly. Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.