All Forum Posts by: Darius A.

@Nikki Yankowski

Nice insightful comment, definitely something to keep an eye on 🙂

My two cents:

Immediate impact: already seeing an increase in energy and commodity prices (inputs to real estate). This will fuel inflation and our government reaction to these increase in input costs could make inflation even worse. This will put the Fed in even more of a pickle with regards to increasing rates which could impact RE prices.

Long term impact: the invasion of Ukraine could trigger other geo-political events that could have massive implications for all investors regardless of asset class. Russia has already threatened Finland and Sweden and China is already making bold statements with regards to the Russian invasion of Ukraine. If Russia threatens the sovereignty of other European nations and/or China intensifies rhetoric/action against Taiwan, things could get very volatile in the markets globally, which could have a negative "wealth effect" which may impact RE investing. Also watch the U.S. dollar. Given the massive amounts of stimulus, our record debt, and how much the Chinese own in U.S. treasuries, the dollar could be under long term pressure which could have major implications for investors.

Please re-read what I wrote- I'm not saying crypto is dead. I'm simply saying that investing in only two asset classes increases your overall risk.

@Michael Garrett different take- 401k can be a valuable tool to build wealth and I disagree that they are a failure across the board. They fail because people let them fail- they don’t know how to manage them and take advantage of what they offer. Many people claim that you should “set it and forget it” with respect to 401k but that is a strategy for failure. Asset classes crash more than people think and you have to actively manage your 401k and manage your risk to avoid those traps. Additionally company match, the ability to grow tax free and withdraw tax free (talking Roth here) are huge benefits to the so called worthless 401k. People should also not rely 100% on a 401k or pension as things can go wrong.

Lastly, if you want to invest in only two asset classes (real estate and crypto) then you put yourself at increased risk when those asset classes crash (notice I didn’t say if). Asset classes more than people think and when they do, folks who are diversified across many asset classes will be able to protect their wealth and better take advantage of those corrections as all of their eggs aren’t in one basket.

Different take- the question is not if there will be another asset class downturn (not just housing), but when. To pretty much everyone's point it's a fools game to try and time markets.

Here's the rub- folks who are prepared with dry powder will be able to capitalize on the downturn obviously much better than folks who have no reserves/dry powder. Take a look at your balance sheet to decide what amount of dry powder you are comfortable with.