State of OUR Economy November 2023
Meeting Our Panelists
At the 9th AVLMeetup, two experienced investors discussed the latest trends in our economy and provided valuable advice to help responsible investors make informed decisions during unstable markets. Keeping track of multiple factors when making investments can be challenging, but having expert guidance on hand can be a great asset.
Though he didn't have a business background, Bryce Robinson developed a passion for entrepreneurship by working in underground gold mines and traveling the world. He later founded Cultiv8 Collective, guiding passive investors to create financial freedom through investments. Chris Larsen also has an entrepreneurial spirit: after 18 years in the medical device industry, his ambition led him to start Next-Level Income, which is dedicated to educating others on investment opportunities and helping people achieve financial independence.
The Importance of Economic Cycles
Bryce and Chris outlined the economic cycles occurring over the next seven to eight years. They explained that there are periods of growth, followed by downswings—and these cycles don't always follow in an even fashion. According to their observations, we are at the end of a seven-year cycle. The two investors projected what would happen in the next couple of years, predicting that the economy will experience its worst downturn from 2025-2027. However, they do suggest some good news: things will start to turn around after 2027, with a full recovery anticipated between 2030 and 2032. They stressed the importance of preparing for upcoming changes rather than focusing on present conditions.
The investors discussed their analysis of potential investments and were clear in their attention to certain data points. They noted that interest rates, cap rates, and underwriting deals should be monitored to evaluate prices and cash flow accurately. Supply chain issues, contractor shortages, cost inflation, historical cycles, and global events are also taken into account to be fully prepared for changing markets. The investors emphasized the importance of examining multifaceted and interconnected factors.
Thoughts on Navigating Unstable Markets
As Bryce and Chris move into a period of high inflation, they've revealed their strategies for navigating the new market. To ensure he makes a good investment, Bryce typically looks ahead five to seven years and evaluates investor returns. In addition, he doubles construction costs and timelines to account for any surprise costs. It's also wise to double property taxes and insurance based on today's prices so that unexpected expenses don't catch him off guard. By cutting contingencies like these out of the equation in advance, he'll stay afloat – or better yet – thrive in uncertain times. Chris emphasizes the importance of hedging and looking at long-term trends to meet current demand. He recommends diversifying income sources as they provide financial flexibility if anything goes wrong.
For investors Bryce and Chris, being prepared is essential. They emphasize the importance of increasing multiple streams of income and smarter investments that offer more control of liquidity. Additionally, they advocate having at least six months of living expenses readily available in case of unexpected market fluctuations or bank issues. Taking the necessary steps ahead of time will ensure stability in uncertain times. Knowing how to keep your money safe is key for effectively navigating a new economic cycle.
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