Skip to main content

44 Ounces of Wisdom (Posted September 5, 2016)

I walked into a local Circle K recently to grab a quick fountain drink – I don’t need anyone telling me how soda is bad for me and my kidneys, so just go with me on this – when I looked up and saw there was a small dispenser that you could use to add a flavor shot to your drink of choice.  You love Mountain Dew but want to add a little lemon to it, pop your styrofoam cup under the dispenser, press “lemon”, and out shoots a short burst of yellow-colored syrup that – I’m assuming – is lemon flavored.  Variety is the spice (or syrup) of life, right?

What caused me to pause, though, was on this particular dispenser there were four choices: lemon, vanilla, cherry, and cherry (zero calories).  Did I mention that the shot that comes out when you make one of these selections is enough syrup to fill, at best, the cap on top of a two-liter bottle of soda?  How many calories could there be in the regular, unadulterated cherry syrup that made it necessary to come out with a zero-calorie alternative?  Was there a rash of cases of young children and small Chihuahuas being rushed to the ER as a result of diabetic comas brought on by this calorie-laden cherry syrup that Circle K HQ made it their top priority to come out with this alternative?  So many questions ran through my mind! 

The truth of the matter is if you’re standing there filling up a foam chalice with 44 ounces of soda, is cutting down on the 10-15 calories (if that many) by going with “cherry lite” REALLY doing you any good?  Chew and swallow the Twinkie in your mouth before answering.  While you’re doing that, I’ll get to my point – I promise I have one.

This past week, I’ve conducted some informal research on millennials (read: I had a conversation with two people who are college graduates and are in their mid 20s) related to the real estate market.  To wit, I asked them what is keeping them from purchasing their first home.  You can guess at some of their answers and be dead nuts on, but the one answer I got from both of them that caused me to think about the subject of this newsletter is this: they don’t want to be tied down – they view purchasing a home as being chained to a particular city and giving up freedom.  Light bulb moment!

Up until this very moment, the vast majority of us had the mindset of “once the millennials take a moment and realize that home ownership is the American dream, we’ll be good to go – just give them a little time.”  After talking to these two people, I realized that mindset, when it comes to millennials, is similar to the thinking behind offering a zero-calorie cherry syrup – it’s dumb! 


What I’m about to suggest is not intended to be THE answer – millennials, like everyone else, are individuals and have their own opinions – but I think it’s a good one: we need to treat them like investors, not home owners.  We need to educate them on how to get the most house in the best neighborhood for the least amount of money.  We need to demonstrate to them that a purchase is a wealth-building tool just like many other business ventures they might be considering to improve their station in life.  This means helping them understand what others (renters in particular) are looking for in a house and pointing them in that direction – this will help them to see a purchase as a sense of financial freedom rather than being chained down.  This approach, in many instances, is going to take more time than just getting a pre-qual and then putting them in a car to go look at houses, but those of us who put the time in now will do much better as this segment of the market is only going to grow.  And when we start seeing the benefits of the time we’ve put in to help these investors, we’ll be able to take a break and have a soda – splurge, and get the real cherry.

Comments

Post a Comment

Popular posts from this blog

Financial Nearsightedness

Years ago when the Consumer Financial Protection Bureau was created, we had some wacko thought that part of the job of the folks filling its ranks would be to . . . protect the consumer.  In some people’s view, this would mean that builders of new homes would no longer be able to dangle the carrot of “free” incentives if the buyer would finance the purchase through the builder’s in-house or preferred lender.  To those same people, it just made sense that the CFPB was created to even the playing field and make it so that the consumer got the very best deal available.  Well, we were wrong. Builders ARE allowed to offer incentives for using their in-house and preferred lenders despite the fact that sort of goes against the idea that the consumer is getting the very best deal available. And for most consumers, all they see is the incentive, and this computes to less money coming out of their pocket at closing  –  and they’re right (sort of).  The purpose of today’s article is si
Post a Comment
Read more

Topless Professionals - Nope

Fads come and go, certainly, but you can’t always tell the difference in the moment between a fad and a trend  –  because refusing to adapt to the trends can be limiting . . . if not disastrous.  Let me share a couple of examples where failing to see where things were headed didn’t turn out well.   An engineer presented the idea of a “filmless camera” to the executives at Kodak back in 1975, but they laughed him to scorn.     In 2012, Kodak was forced to file for bankruptcy because they failed to adapt to the digital world.     We all know Steve Jobs and Steve Wozniak, but how many of us recognize the name of Ron Wayne (and, no, that’s not Batman’s brother)?     Ronny was the third founding member of Apple, and he sold his 10% stake in the company in 1976 for $1500.     His shares would now be worth over $50 billion.     WAY BACK in 2000, Reed Hastings approached Blockbuster and offered to sell Netflix for $50 million.  Blockbuster turned Hastings down.  Netflix is now wor
Post a Comment
Read more

Sitting on the Fence Only Gives You Splinters

“I woke up this morning and couldn't find my socks, so I called information.   She said they were behind the couch.   She was right.”   Reading the words of comedian Stephen Wright isn’t quite the same as actually hearing them with his deadpan delivery, but they’re still funny.   The same can be said for timeless wisdom: whether you hear it coming directly from the lips of a wizened old sage or you read it in a little missive such as this, it’s still wisdom, right?   They say a picture’s worth a thousand words, so you’re about to get 2,000 words’ worth right here: I’m going to show you two graphs that are going to speak volumes about buying power and interest rates – far more than I could convey if I tried to write over 2,000 words (and probably put you to sleep).   Obviously, this first graph shows how even a slight change in interest rates can affect someone’s buying power in the real estate market.   There’s a fairly big swing between what someone can a
Post a Comment
Read more