Knowledge and Expertise Are Golden — But Much Better Off With Experience

Those who’ve been comin’ here quite awhile probably remember my ‘I’ve Seen This Movie’ posts. So far, nobody’s died — and it seems, as I spoiled the probable ending of this current horror flick, we’ll come outa this one bowed but not broken. The American people — um, that’d be you and me — allow ourselves a short period of whining, then we buck up and kick booty. Always have, always will. I’m thinkin’ a little economic review would be in order.

Having begun my career during the 1969 recession, a term I thought had to do with hairlines (Please — don’t say it, it’s far to easy.), I went through over 30 years before seeing a fixed interest rate under 7% — really. My first seven years in the business saw me close exactly zip, nada, zilch, zero transactions using non-government related loans. Sounds crazy now, but absolutely true. Think about it — who had 20% down? Not the folks with whom I dealt. Remember too, I was barely 18 when I started, proud to be shaving more than twice a week.

After a few years of school and real estate, I went full time. Turns out I seem to attract recessions, as the ’74-75 recession hit big time. Again, what did I know? Remember, I was still in the housing side of the biz at that point. I’d just started what was called ‘farming’, a new term to me back then, and just plowed through (sorry) my daily farming, oblivious to the national economy swirling around the porcelain fixture.

Then the crashing thud of October ’79 hit like a never ending ton of bricks from the sky. We recovered again — thanks mostly to the combination of the unbeatable American spirit and massive tax cuts. But since our economy, and sadly, our politicians can’t seem to let well enough alone, this movie gets replayed ad nauseam like a movie version of the broken record from hell.

Much like the mid to late ’70′s, the same point in the ’80′s saw us flourishing to the max. Taxes were cut to the bone, jobs were increasing at a feverish rate, real estate was booming, and all was well with our world. Then the mistake was made. I’m not fan of regulation by any stretch of the imagination. But allowing the Savings and Loan guys run around almost totally regulation free may be one of the all-time bonehead moves of the last half of the 20th century — at least economically speaking.

We weathered that one too. Even though the gov’t did their best to create more problems with their so-called solutions, we did what we always do, Gump our way to the next stretch of prolonged sunshine.

We hummed along at a very respectful pace for several years. ‘Course, can’t have that, can we? Nooooo. The powers that be decided the economy needed tinkering, which when combined with politicians promoting real estate loans easier to get than a cold at a pre-school, well you lived it in real time, so ya know where this ends.

It appears (God’s lips to my ears), that we’re at least beginning to emerge from the edge of the Valley of Economic Death (Depression) to a full, if torturously sloooow recovery. The jury is still out on that one, but the signs are there. We’ll see what we see when we see it.

All this to make this one point…

In ’74-75 we suffered greatly. In ’80-82 or so we saw FHA rates hit 16.5%, with inflation in the teens. Prime rate at that time hit over 20%. The common denominator to all those bad times? Nobody died. Sometimes we weren’t in love with the ending, but many of us were all there to witness it. We learned from those bad times — though I think the regular-folk type Americans learned their lessons far better than did the political class did by far.

Experience added to superior knowledge and expertise makes any professional more valuable. Experience improves the application of the skillful practician — they’ve been there and done that many times. Or, put another way, they’ve seen the movie many times, and know the ending — that nobody dies.

It makes all the difference in the world. Specifically, it allows opportunities hidden to most, to be seen in the light of — experience. Not just been there done that, but lived that. Nothing is an acceptable substitute for professional experience.

I’ve walked through these Economic Valleys of Death too many times to panic. I know what comes next, even though the timing is never truly foreseeable exactly. Ah, the timing. Here’s what experience has taught me on that subject.

When coming out of dark times, it’s far more advantageous to be a little early than a little late. That’s been true since I’ve been doin’ this stuff. Those who understand and act upon that will have jumped themselves far ahead of the herd. As sure as the sun will set in the west, that will be the case this time too.

I’m very much interested to hear from you. Call me at 619 889-7100 and figure out what we can Purposefully Plan for your retirement. Have a good one.

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1. Is Your Broker A Pitcher Or A Thrower? Real Expertise
2. Pitchers vs Throwers — Expertise vs …Not Much — Doing Things On Purpose
3. The Good Old Days — Negative Cash Flow Sometimes Golden
4. Selling In A Buyer’s Market — Difference Between Success And Failure Is Expertise
5. Real Estate Investment Seminars — A Two Way Learning Experience