SOMETHING INTERESTING

The vacation rental market may be the next major institutional asset class. It’s poised for huge growth in the coming decades and currently has low competition due to existing barriers of entry. A very thought-provoking thread for real estate investors:

MARKET MOVERS

  • This is an interesting listen (18:55) on exploring a Health Savings Account as an investment vehicle - minus the TAXES!  Some HSAs and IRAs offer investors the opportunity to buy real estate tax-deferred, meaning they can invest in real estate now and pay taxes on it later (23:00). Keeping your “savings'' accessible in liquid assets, as well as tax-deferred investment opportunities, are the way of the top 1%.

  • Real estate investor Matt Frankel, CFP, believes that within two decades, the traditional model of buying and selling real estate will go away, and iBuying, selling your home directly to companies, will dominate the market. There's likely going to be a one-stop end-to-end real estate platform that people will flock to. Now add in smart contracts and blockchain, combined with decentralized decisions - this will replace ALL the middlemen. Buckle up. Read more here.

  • Cutting unemployment benefits is not increasing employment, despite jobless claims reporting lower. People used the year of lockdown to level up, gain new skills, and find new careers. Like we said in this digest, we’ve never had more gainfully employed people quitting their jobs - especially to move to something entirely different. Plus, more people are starting up new businesses than ever before (new business formation at a record-breaking pace in 2020). There’s so much more opportunity to build and create wealth in new ways. It’s an exciting time to be alive, folks. Read more here.

  • Oil could top $80 a barrel by end of the year. Jeff Currie of Goldman Sachs suggests the oil market is going to transition from being supply-driven to demand-driven. Much of the recovery in global economic activity has played out, oil demand is nearing pre-Covid levels, and there are growing concerns with supply (especially since Hurricane Ida). Read more here.

WHAT TO WATCH

  • The Social Security trust fund will run out of money by 2034 (one year sooner than was expected last year), according to an annual government report. Not a huge shock, as the SS has been set up to fail for a while now (more going out than in). After the fund’s retirement program exhausts reserves, it will only have enough income to pay about 76% of scheduled benefits (unless Congress steps in to fund the program). Someone here is getting the raw end of this deal (likely the wealthy and the Gen Z-ers and beyond). Food for thought: How will the government fund the program if SS money runs out? Read more here.

  • Paypal is on the radar announcing the addition of cryptocurrency in their services. Motley Fool thinks the integration will be smooth because of their existing community and their track record of sustained growth. Crypto should be complementary to their already strong business. So many businesses incorporating crypto. I’m sure it’s nothing. Listen to more here (37:16).

  • NFT technology really has our attention for many reasons, one being that they are an innovative way to truly respect, celebrate and support the artist. NFT’s are kind of the new Kickstarter or IndieGoGo to support a business or cause. It's about building a community where you can let people know of up and coming talented people and the community has the option to support them via NFT. Of course, there are even more beneficial implications with this technology, we’ll save for future digests. Fascinating listen here (28:50).

  • YouTube’s music streaming services reached 50 million paid subscribers, the sharp jump from last year and also a milestone for YouTube’s owner, Google. Experts say YouTube Music is attracting users in emerging markets and also younger audiences. They say it’s becoming to Gen Z what Spotify was to millennials half a decade ago. Tie this with what we said yesterday about Facebook’s slip in the ads market. Money is made online where the most time is spent. Listen here (1:10).

FINAL THOUGHTS

“If you’re going to be in this game for the long pull, which is the way to do it, you better be able to handle a fifty percent decline without fussing too much about it. And so my lesson to all of you is, conduct your life so that you can handle the fifty percent decline with aplomb and grace. Don’t try to avoid it. It will come. In fact, I would say if it doesn’t come, you’re not being aggressive enough.” - William P. Green, Richer, Wiser, Happier: How the World's Greatest Investors Win in Markets and Life

Those that have gone before us and “won big” have usually sustained periods of losing big, too. Resilience is necessary to stay in the game and win.

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