Tuesday, August 16, 2022

I was recently doing a presentation for a group of real estate professionals that ranged from veterans to new hires. I went around the room, asking everyone to introduce themselves and to tell me a brief description of what brought them into the real estate business.

One gentleman introduced himself, spoke of his illustrious career in the industry, and ended with, “I got into the business for financial freedom.” He must have been in his late 60s or early 70s, but he was sharp and very young at heart. I asked if he had achieved his financial freedom yet, and he replied, “I’m still here, am I not?!”

The meeting got me thinking. Is financial independence a myth, or is there a time when someone can sit back at a reasonable age and say, “I’m done with the day-to-day grind”? In discussions that I have with clients and acquaintances, those conversations are rare and very few, if at all.

These thoughts come as the higher cost of living due to inflation forces many consumers to spend much of their disposable income on mortgages, rents, and daily living expenses. As a result, many are forced to dip into savings or use credit cards to help bridge the gap.

According to the New York Fed, new credit card accounts opened in the first quarter of 2022 in the US reached historic numbers exceeding pre-pandemic levels. Additionally, credit card balances and interest rates continue to climb and are expected to reach 18% interest by year-end.

The personal savings of the average US household has been decreasing steadily since March 2021 and is at the lowest level since the 2008-2009 financial crisis, according to data from the Bureau of Economic Analysis.

As of this writing, it is likely that we have officially entered into a formal recession, most often recognized as two consecutive quarters of declining GDP. June 30th represents the second quarter of 2022, but we won’t get a GDP reading for another few weeks.

I write these observations not to scare individuals about their financial vulnerabilities but to encourage those who are concerned to take action. As I keep repeating, the financial decisions you make today will impact your well-being for years to come. Financial independence and freedom are achievable, but they will best be attained by aligning yourself with like-minded professionals who can custom tailor a path to match your objectives.

Special shout out and birthday wishes to Howard Bromberg, Melissa Einhorn, Dov Erdfarb, Ari Feldman, Shaina Giller, Dr. Chaim Herman, Jill Kirsch, Jacob Kramer, Eric Mauskopf, Moshe Niehaus, Michael Neuman, Sigalit Pollack, Yoni Pollock, Estie Rottenstreich, Debbie Shushan, and Michael Thorry.

Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected]

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