28 June 2018
Question: What are the 16 most important assets that will increase your net worth?
Millennial moment – Pg. 7
– …the strongest growth in America’s millennial population between 2010 and 2015 was not in coastal cities such as New York and LA, but in smaller ones in the south and west
– The double-digit increase in 10 large metro areas, from Colorado Springs and Denver to San Antonio and Austin, contrasts with Mid-western cities such as Chicago and St. Louis, whose millennial populations rose by less than 1%
– This millennial migration is largely being driven by affordability (Prof Note: I absolutely believe location and happiness are highly correlated!)
– Denver’s population has jumped by 100,000 to 704,000 since 2010….
– Denver’s residential property prices are 50% above their pre-crisis peak, dividing the city into those who bought and have watched their assets appreciate and those wondering if they will ever get on the housing ladder
– Millennials represent America’s most diverse group: 54% are non-white….
China’s bear market woes run deeper than trade war with Trump – Pg. 19
– Blame for the sell-off of China’s stock market has been levelled at the Sino-US trade war but Beijing’s problems have been evident for some time and run much deeper
– China’s key stock market index, the Shanghai Composite, has now tumbled into bear market territory – a downswing of 20% – for the first time in more than two years, falling another 1.1% yesterday
– The last major sell-off at the start of 2016 was driven by a clutch of bad economic indicators. This time….mounting trade war with the US and failing overseas projects, to tighter credit and a pullback from institutional investors….
– Banks have been forced to recognize many off balance sheet assets. This has led to a tightening of liquidity in shadow lending channeled through asset management companies
Answer: (1) Owning your primary residence (Prof Note: Provided the loan product is CPM and it amortizes over time and the equity is consumed through financial devices, e.g. HELOC); (2) Education (Prof Note: I worry that education is no longer a value. Education comes in many forms and as I age, the more I respect Trades); (3) Vacation homes (Prof Note: Help me Rhonda! NO!!!! Unless this is really a rental unit.); (4) Retirement savings; (5) College savings (Prof Note: I believe more care must be placed in majors, i.e. pick the major with a reasonable ROI unless your family is wealthy); (6) Rental real estate; (7) Health; (8) Expertise; (9) Investments; (10) Household items (Prof Note: The article was referencing considering longevity, maintenance and operational costs); (11) Private lending (Prof Note: Do not agree. Underwriting is not a simple task); (12) Collectibles (Prof Note: Buy smart. Hess trucks, nice but no value; Buddy L Trains…Amen brother!); (13) Permanent life insurance; (14) Vehicle; (15) Boat (Prof Note: I do not even know how to respond to this!); (16) Private jet (Prof Note: WHAT??? I have looked into NetJet for trips to Nevis. Note, after doing the research I continue to find myself in the coach section of American Airlines)