Weathering the Storm

Quote for the Week

“Tough Times Never Last, but Tough People Do!” - Robert H. Schuller

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This Week’s Podcast Episode

Weathering the Storm

https://www.theascentperformancegroup.com/weathering-the-storm/

?(You can also listen on your favorite podcast app)

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From the Skybox

I remember about a year out of college getting into the mortgage business. I was recruited from my first job to be a mortgage loan officer at a bank.

Shortly after getting into the business the 30 year fixed rate mortgage interest rates hovered around 8%. In 1987 30 year mortgage rates jumped to 11.5. The inflation rate went from 1.1% to 4.4% and we experienced the Black Monday stock market crash.?This was a challenging time.

Business went from easy to hard in a short time. I remember getting laid off in1988 shortly after getting married and buying our first home at a rate of 12%. Talk about being devastated.

I quickly got another job at a savings and loan that offered adjustable rate mortgages and had monies at below market rates for first-time homebuyers. This taught me some valuable lessons.

I learned to always have a rainy day fund and there will always be challenging times followed by easier times.

In 1993 30 year fixed interest rates went from around 7% to around 9.50% in 1994. The inflation rate was 2.7% in both years. We had just finished building a new home and fortunately got a rate in the low 7’s.?

Business was a lot more challenging in '94 than '93 due to the rate increase. I listened to a mentor and stuck to the fundamentals, ignored the naysayers and still did way better than most.

In 2000 we had the tech bubble burst in the stock market. 30 year fixed rate mortgages hovered around 8.25%. They dropped to 7.25% the next year.

People went from making tons of paper money in the stock market on tech stocks only to see it all go away overnight. People were checking their stock accounts on a daily basis to see how much their accounts were growing.

Those that were smart enough or lucky enough to cash out did great. Those that rode it out saw their accounts dwindle.

This was also the time that the "experts" were saying the rollover of the year to 2000 would impact computers and potentially cause a computer based apocalypse. Fortunately it did not happen.

In 2008 we had the Great Recession which lasted for 11/2 years. Inflation was a whopping .1%. 30 year fixed mortgage rates peaked at a little over 7% in August.

Most people will never know how close we were to a total financial collapse in 2008.?Lehman Brothers and many other financial institutions went bankrupt and there was an international banking crisis.

In 2014 I started coaching full-time. It is my passion to help others succeed and grow to become their best self in their work and lives.?I had coached and developed my leaders and managers for the past 15 years. It my favorite part of the job.

Until that time I had been leading a large area of the midwest for the largest mortgage company in the U.S. at the time and was downsized after 14 years with the company.

In 2020 we had the Covid Pandemic. Inflation at the time was 1.4%. We saw 30 year fixed rate mortgages averaging at historic lows around 3.7%.?

Many people were able to refinance their homes or move up to new homes during this time. We saw home prices jump dramatically due to the demand.

Today we have an inflation rate of around 8.2%. 30 year fixed rate mortgage are around 7%. We have seen a tremendous increase in interest rates and inflation. We are in a recession and this is going to be a very challenging time.?

The economy has always had cycles. There are times that are challenging and there are times that are easier. It will always be like this.?

Many young people in the workforce have never had to experience a challenging economy or being laid off. This is something for leaders to understand and educate their teams on the fact that tough times don’t last forever.?This too shall pass, but it is going to be very difficult until it does.

We are seeing and will see more layoffs and cost cutting by businesses. Many people will be laid off for the first time in their careers even though they are performing well.

This is an opportunity for lean and growing businesses to pick up top talent.?

After 1987 I changed my mindset. Any time there was a rough patch in the economy I chose not to participate. I chose to succeed no matter what the economy was doing.?

I chose not to listen to the naysayers nor did I spend time with them. I chose to listen to and surround myself with people that were making things happen.?

I learned that people with this type of mindset do much better during challenging times than their competitors. I did not do as well in challenging times as I did in easy times, but I did a whole lot better than the people that had a "poor me" scarcity mindset.

You can too.

There will always be opportunity available to those that have an abundance mindset. They will always succeed no matter the economic conditions.?

Some of the greatest businesses have been built during challenging times. Some of these include Hewlitt-Packard, Microsoft, Trader Joes, Airbnb, Groupon and WhatsApp among many others.?

Are you going to participate in this recession or are you going to choose to not participate?

The decision is yours.

Be Audacious!

Coach Jeff Garrett