The Death of Easy Money

This episode explores the end of the era of easy money, its causes, and what it means for investors and business owners. Wade Lopez and Gary Aiken discuss structural changes in interest rates, market dependence on cheap capital, and strategies for navigating the new economic environment.

Transcript

The End of Easy Money

SPEAKER_01 0:00

Views expressed are solely those of the speakers and do not represent this show or its team. People keep doing the same thing over and over and over again until it really bites them hard. It takes a crisis to change somebody's mindset. I think it's going to take a real reset of expectations from some massive market move to shake people from this idea that they're getting entrenched in, which is inflation is a problem. I need to act as though inflation is a problem.

Wade Lopez 0:32

Welcome to Built to Last Conversations About Wealth, Work and Life. I'm Wade Lopez, and I'm joined by our chief investment officer, Gary Aiken. Today we're going to be talking about something that I believe is quietly reshaping every part of the economy. I'm calling it the death of easy money. For well over a decade, we operated in an environment of near zero interest rates, cheap capital, massive liquidity, and easy access to financing. That environment impacted everything: stock valuations, real estate, business growth, investor behavior, and even how companies were managed. Here's what I think is getting overlooked. An entire generation of investors and business owners have never really operated in a sustained higher rate environment. This is not a temporary adjustment from any of them. This is an entirely new experience. So today, it's not about predicting the future or making wild claims, it's about helping people think clearly about what this shift actually means for investors, for business owners, and the broader economy moving forward. Gary, let's start with the big question. Do you believe the era of easy money is actually over? And if it is, how significant is that?

SPEAKER_01 1:49

Hey, Wade, good to see you again. The era of easy money definitely ended in March of 2020 when the 30-year bond reached 0.98%. And I think it's a significant item that uh that all business owners and investors need to consider going forward.

Wade Lopez 2:09

Yeah, I would agree. And before we talk about what comes next, I want to make sure our audience understands what actually created this environment in the first place. A lot of people lived through it without fully understanding the machinery behind it. What exactly created the money era? Was it primarily federal Federal Reserve policy, government spending, globalization, or was it all of the above?

SPEAKER_01 2:33

So I think it's a combination of technology getting better, globalization forcing costs down or slowing the rate of inflation. And then finally the Federal Reserve reacting to every crisis by printing more money to solve the crisis. Those three things together created an era of easy money from say 1982 uh

Understanding the Era of Easy Money

SPEAKER_01 3:01

and then and then really starting to ramp up in the 2000s uh to the uh pandemic in 2020 where it where it all came crashing down.

Wade Lopez 3:12

Do you think the markets became so deeply dependent on cheap capital then?

SPEAKER_01 3:18

I don't think the markets became dependent on cheap capital, but uh certainly in different times we have become dependent on cheap capital. I mean, the the financial crisis in 2008-2009 was a direct result of cheap capital going to people who didn't deserve cheap capital. Uh and we've had those those issues before. And certainly, you know, we can trace you know each financial panic or each um each uh you know financial crisis that we've had to money being too cheap, too available to people who don't uh have good uses for it. Um but um but I don't think that um that that that markets are necessarily dependent on cheap capital for growth.

Wade Lopez 4:07

Okay. Do you think most people genuinely underestimated how abnormal the last 15 years actually were?

SPEAKER_01 4:15

Yeah, I think so. I was actually thinking about that this morning, uh driving into the office, uh, you know, listening to Bloomberg Radio and talking about um talking about inflation and where it is today, you know, that inflation is around 3%, maybe 3.2%. And and uh it got me thinking, look, you know, long-run inflation has been about 3%. So if anything was abnormal, it was it was an era where interest rates were zero and inflation was sub 2%, that that was probably the abnormal period.

Wade Lopez 4:49

Do you think that's more structural than temporary, or do you believe we're still working through a post-pandemic distortion of interest rates?

SPEAKER_01 4:58

I think in the post-pandemic world, um, that we are going to have interest rates be structurally higher. That we are we are purposefully, both we and other countries are purposefully reducing globalization in favor of near-shoring and onshoring. Uh that is making trade uh more difficult. Certainly the wars in Iran and uh Ukraine are making uh making transitive goods and services more difficult and more costly around the world. Um and uh and then finally, um, you know, the Federal Reserve and other central banks are fighting inflation greater than they did the previous 20 years, and and so interest rates are going to be higher. So I think that, you know, structurally speaking, we are in a different place than we were, you know, pre-pandemic.

Wade Lopez 5:51

What role is the government debt? You know, thinking about rates, where do they go from here?

The Impact of Higher Interest Rates

SPEAKER_01 5:57

You know, generally I think that long-term rates are likely to go up over the the medium term and long term. Um, you know, we are certainly going to be printing a lot more uh money to to deal with uh expanding deficits uh that are mostly the result of um Social Security and Medicare um spending in the U.S. Um So, you know, if if we can't find buyers at the current price for government debt in the future, then the price has to go up, and the price is quoted in interest rates, and interest rates are therefore likely to go up more than they're likely to go down.

Wade Lopez 6:38

Yeah. Does the Federal Reserve realistically have the same flexibility it once had, or has that changed now?

SPEAKER_01 6:46

Uh the Federal Reserve still has its independence and can still uh work around the edges. Um, and of course, the Federal Reserve mostly deals with short-term interest rates. It's only a near-term phenomenon that the that the Fed uh you know tried to impact uh other parts of the yield curve, you know, by and buying other instruments other than T-bills. Uh if anything, I think the Walsh Fed will probably return to to using T-bills mostly to affect government policy and you know being being less uh experimental with um with buying mortgage-backed securities or longer dated treasuries or trying to you know uh rescue markets.

Wade Lopez 7:29

Do you think we're entering a period where interest rates remain structurally higher for longer, uh not just temporary temporarily elevated, or where do you think that kind of folds out?

SPEAKER_01 7:42

So I think what I would characterize as structurally higher is we're going back to this idea that, you know, when we look at interest rates, it ought to be comprised of a real rate of return plus an inflation expectation. And so therefore, if we think that growth is going to be 2% and inflation is going to be 3%, then interest rates ought to be somewhere around 5%. And guess what? You know, the the 10-year treasury uh, you know, got to 4.6%. So sort of right in line with that, um, that idea. And so we're getting closer to what was normal before the era of 0% interest rates and abnormally low inflation. We're getting back to normal. And I think that that is gonna seem structurally higher to people like you talked about who, you know, who had readjusted what they thought was normal to to zero percent. Um and but but it's not gonna be abnormal for people who remember life before that.

Business Fundamentals in a New Environment

Wade Lopez 8:47

I agree. And and the one thing that we've noticed, me personally, is the businesses I operate that easy money can kind of hide a lot of problems, right? When when capital is cheap and liquidity is abundant, mistakes are survivable, weak business models keep their doors open. Average operators look like great ones, but when borrowing costs rise and liquidity tightens, the picture changes quickly. I think discipline starts to matter again in a way that it has not mattered for a long time. And I also think about this inside our own firm, right? How we think about debt, how we manage cash flow, how we evaluate new opportunities. The calculus is generally different in this environment than it was three or four years ago. And I think business owners who've not updated that calculus are certainly feeling it or they're gonna feel it. So, Gary, moving back toward fundamentals, is this shift deeper than just a simple return to basics in your mind?

SPEAKER_01 9:50

I don't think it's deeper than a return to basics. I I think it's exactly a return to basics. And and so as long as we keep our heads around that and we don't uh and we don't think or or or calculate a scenario where we go back to zero percent, and and we also sort of fade the fear that interest rates are going to eight, eight percent or ten percent. I think as long as we sort of say, look, we're sort of we're gonna be kind of range-bound here between, you know, four percent and say six percent on the 10-year treasury, and between, you know, call it 3% and 5% in Fed funds, that we can plan for that. Uh, there's nothing wrong with with planning in in an environment like that. Um, and you know, markets have gone up uh in in an environment like that before, um, and businesses have been able to implement uh their their uh their game plan. Um so uh so I don't think it's it's really that that big of a deal. Um I think the biggest deal was making sure to get it right out of the transition from 0% back up to something quote unquote normal.

Wade Lopez 11:06

Yeah, well you you mentioned businesses, but what what businesses do you think are going to struggle more in this environment and why? I think banks uh could could struggle a little bit. Do you think banks, financials all together, or just banks in general?

SPEAKER_01 11:21

I think banks in general, um, you know, banks that have larger trading departments or asset management departments or other types of um companies uh that like insurance companies, you know, I think they're different from from banks. But I think banks themselves, you know, may uh have have more of a problem in the in this kind of environment as their costs go up, as they also need to, you know, restrict maybe lending opportunities um and uh and and reevaluate also the massive amounts of underwater bonds that are holding back their ability to to sell things to create new new capital for opportunities.

Wade Lopez 12:02

Aaron Powell

Identifying Durable vs. Fragile Businesses

Wade Lopez 12:03

What about the mid-level and regional banks?

SPEAKER_01 12:05

I mean, they've been struggling a little bit. Yeah, I think they've been struggling because of asset allocation and asset um liability decisions that they made when when rates were abnormally low. Aaron Powell Exactly. I agree, totally. And the Fed did not forecast correctly what its plan was going to be. In fact, it it told many of these banks um, don't worry, you can buy things that have 1% or 0% interest rates, and it will be okay. And then it wasn't okay, and it still isn't okay.

Wade Lopez 12:37

For our listeners out there, explain why high rates specifically can expose weak operators in ways that low rates just simply don't.

SPEAKER_01 12:46

Yeah, I think uh Warren Buffett said it uh best. You know, you find out who's swimming naked when the tide rolls out. And um and so once once your your variable rate interest rate or the loan that you got five years ago resets, and we're gonna see a wave of resettings in in uh in you know five-year loans that were that were done in 2021 and 2022 when interest rates were very low, we're gonna see those start to reset here. Um, and you know, you're gonna find out companies that, you know, their their rates on their loans are gonna go up 400, 500 basis points, how they're gonna be able to respond and how their lenders are gonna be able to respond to that as well.

Wade Lopez 13:28

Let's talk about I think there's gonna be significant consolidation across industries. Do you see that as well?

SPEAKER_01 13:34

I don't know if there'll be considerable consolidation. I mean, I I I don't see a lot that will necessarily change with it. Like, like I said before, I think the economy is in decent shape and a four and a half, five percent base rate, uh, you know, added on 300 to 500 basis points on top of that, you know, most businesses can borrow at 8% and they can still uh can still do just fine. Um I I so I don't see I don't see that that's a real a real shift that's going to create a demand for um for consolidation or that's going to make people do things different differently. It may just temporarily reduce um uh temporarily reduce their their uh their their profitability.

Wade Lopez 14:24

I I hope you're right. Um my next question is about the environment. Does does this environment favor experienced operators over younger, more aggressive ones?

SPEAKER_01 14:33

Uh I don't I don't know uh on that one. Um I think that you know uh experience always matters. Um but uh you know an aggressive young entrepreneur with with a good idea um uh is is usually hard to beat.

Wade Lopez 14:50

Well when you think about businesses, what do you think separates a durable business from a fragile one in today's environment?

Investment Strategies in a Higher Rate Environment

SPEAKER_01 14:57

I think a durable business will have uh a plan uh going forward um and and a customer base that uh that is going to stick with them uh when they when they have to raise prices. I think that's that's part of what's going on here as well, which is that prices are going up. That inflate in a world where you know structurally inflation is three to three percent or higher, um, you know, your your business is going to have to raise prices in order to raise wages for your employees and to buy the buy the things that are inputs for what you're building for your customers. Um everyone's prices are going up. We saw the producer price index is now you know almost 5%. That's gonna get passed along to customers, and customers are gonna have to pay it. Um, and uh and so the durability of your business will be, you know, directly related to whether you're able to pass on those costs to your customers.

Wade Lopez 15:58

Absolutely. And when you were talking about a plan, so when business owners are thinking about their plan, how do they think about debt today versus how they thought about it five years ago?

SPEAKER_01 16:09

Yeah, I I think debt when when it's cheap is easy to say, hey, we can just finance this project, uh, you know, and interest rates will be zero forever and no problem. Um I think now, I know I think now it's it's uh uh you know a little more caution. Uh but but it's not it's not necessarily more caution than they had, you know, when interest rates were at this level, you know, several, you know, uh a decade ago, right? It's it's um we went through this period where things got really, really crazy. And I think you know, we're getting back to sort of normal. And I I hate to use that word normal, right?

Wade Lopez 16:52

No, I think it's a good word. I I I agree because you know there was a period where growth was was the strategy, right? It's uh it became the strategy. Is profitability, cash flow, and operational efficiency finally back in the driver's seat, in your opinion?

SPEAKER_01 17:09

I mean, for me, cash flow has always been king. I mean, cash is cash is the thing that gives you the most flexibility. Um uh, you know, we were talking in our in our dot-com uh podcast uh about uh you know my my roommate and his his burn rate. Um you know, at that time I was buying Philip Morris uh Alt Altria. Why? Because I knew that you know they were gonna sell a lot of cigarettes and cash flows were gonna be there, and I didn't need to worry about whether, you know, what their burn rate was a huge positive because as long as customers were burning cigarettes, they were making more money.

Market Concerns and Opportunities

Wade Lopez 17:47

Different burn rate. Yeah, exactly. Yeah. So the investment side of this conversation is just as important because easy money affected asset prices across the board, right? So stocks, bonds, commercial real estate, uh, venture capital, almost every asset, you know, kind of every class benefited from extremely low rates. You know, I mean, think about where we were. Some of the largest investment losses in history came from investing in real trends at irrational prices. The trend may be correct, timing and valuation may not be. So, Gary, how does a sustained high rate environment change the investment landscape at a fundamental level?

SPEAKER_01 18:31

You know, I I don't think it changes it at a fundamental level from here forward. I think I think it did change it dramatically when we went from zero to to four or five percent. But as long as we're in this in this era, I think I think that you know uh we are now reset to to something that that makes sense for an era where interest rates are going to be around this level, uh, you know, plus or minus.

Wade Lopez 19:02

Okay.

SPEAKER_01 19:03

And and so I think we can just baseline it now that this is where we are, and this is what we should plan for, and this is what we should expect out of valuation. Yep.

Wade Lopez 19:15

Well, it sounds to me like you think that uh the valuations and the markets already priced this into the new reality. Is that what you're saying?

SPEAKER_01 19:23

I think for the most part, you know, four percent, five percent interest rates are priced into to stock prices. You know, we we shouldn't expect uh we shouldn't expect anything particularly different um you know uh going forward. And also because interest rates are going up still, I think partially for the right reasons, that there is a tremendous amount of growth coming in the U.S. economy. It's not just all negative from inflation, it's also that we're seeing a lot of growth in the U.S. Um, and so interest rates are going up both for you know good reasons and for bad reasons, um, but but it's not primarily just for one or the other.

Wade Lopez 20:05

Yeah. So I think that's breathing a little life in the bonds, too, right? So how should investors be thinking about fixed income right now?

SPEAKER_01 20:13

I still think investors should be, you know, relatively short duration. There's like I said, there's upside risk to rates on the long end of the curve. Um, you know, in in tactical places, I think that what we've also seen is that, you know, with the war in Iran, um, we've seen first in first central banks selling gold to defend their currencies and to buy energy and other commodities um in their countries. Um, and then secondly, started to sell U.S. treasuries uh to defend their currencies. And so I think that has been part of the the rate story on the long end of the curve uh here recently, um, in addition to the underlying inflation story, but they're they're both connected. Um but I think that you know ultimately, ultimately, I think, you know, we're at a relatively fair price here for the for the US tenure

Consumer Behavior and Economic Resilience

SPEAKER_01 21:11

at four and a half percent, but but I don't find it particularly attractive just because it's a fair price. I'm not looking for I'm looking for fair prices in stocks. I want to get a real deal if I'm going out 10 years to buy a bond. And um, and so I just don't think that that that there's that where we can compensate it for the risk that we're taking. Uh a 10-year risk ought to ought to carry more return than that.

Wade Lopez 21:36

You know how I feel about bonds anyway, but one of the things I'm I'm seeing investors, you're hearing it more, actually seeing it more, you're reading about it more, they're buying on the dip. So that to me, that conditioning is dangerous in this environment. Do you agree with that? And if so, why?

SPEAKER_01 21:55

You know, it seems like buying on the dip has been a good A good strategy. Dips have been fewer and further between. We've only really gotten one sizable dip per year the last two years. And so, you know, in a bull market, you know, one of the conditions tends to be that, you know, every day or so you make a new all-time high. And, you know, I like to think about it in terms of maybe the, you know, in the 1980s, you know, you couldn't, you know, if you were always scared that you're buying stocks at an all-time high, well, then you missed out on the next day, which was an all-time high too. Because if you're at an all-time high, anytime the market goes up, you're at another all-time high. So being afraid to buy stocks just because they're at an all-time high doesn't make a whole lot of sense to me.

Wade Lopez 22:48

Yep. I agree. And uh I think what what I've seen also is that passive investing behavior is you know is not really the type of environment compared to what investors experienced over the last decade, right? So what would be your rule of thumb? You know, I don't believe investing in dips. I don't believe in being passive. You know, so my question to you are what are the market concerns you have most right now?

SPEAKER_01 23:19

The market concerns I have most right now are uh related to uh the the war in Iran and uh what's what's really going to happen there. Um and uh you know if if we get uh a scenario where we sort of walk away and oil is and energy commodities and and other things are are 20 to 25 percent higher, you know, then

Preparing for a New Economic Reality

SPEAKER_01 23:48

I think that's gonna be that's gonna be tough for the non-technology sectors of the market. Um it it may impact the technology sector a little bit um on the margins, but I think you know, markets uh investors right now are are poised to sort of look through that. But for but for other companies um, you know, that that are more traditional and not being thought of as as um as technology companies, I think that that environment where you know their their costs are going up, maybe they can't pass it on to consumers quite as much. They're getting squeezed. I think that's gonna be that's gonna be problematic for them. And so as I think about the market as a whole, you know, there's there's there's a whole slew of companies that are not in the technology sector. And so that those are the ones that that could get squeezed um, you know, with higher interest rates and with lower profitability. That's a that's a that's a bad situation to be in.

Wade Lopez 24:48

What do you actually see opportunity or where do you see that the market may not be fully appreciating it yet? Like right around the corner, maybe. If things go the way you want them to go, that may be something people aren't really looking at or can appreciate right now.

SPEAKER_01 25:05

You know, Wade, I think that um that uh maybe uh tips are an area that are that are potentially interesting. Um I I don't I don't really see a whole lot of areas that are unexposed right now to trends that are continuing. It's kind of a boring answer, but but unfortunately I think that's our that's our answer right now, that I don't see anything that isn't already, you know, sort of in play, um uh, you know, uh presenting massive value that that that I can see right now.

Wade Lopez 25:48

Okay, so we talked about in a show uh uh w not too long ago, international markets, right? So how do you feel about international markets? Do they benefit more in this environment relative to the US markets where we're at with all-time highs?

SPEAKER_01 26:03

Yeah, I think I think that that is an area where we're probably going to want to, you know, uh dip our toes back in um, you know, when when and if the war ends. Um that uh you know, the the trends that that that happened during the war of the dollar going up and the US markets, you know, sucking all the capital in with dollar assets is is probably gonna flow back the other direction. And so so yes, uh, you know, I think I think uh that's that's where we want to buy by international. And again, you know, international related to commodities, international related to technology are gonna be our our our sectors where we want to be the most. I I I totally agree.

Wade Lopez 26:49

Totally agree with you. But throw a curveball here. What do you think happens to portfolios that are not prepared if rates stay elevated for years rather than just months?

SPEAKER_01 26:59

You

Final Thoughts and Key Takeaways

SPEAKER_01 27:00

know, a portfolio that is not uh positioned this way um will one have see their bond portfolio become a liability rather than an asset, that it will become a source for perpetual losses rather than per rather than for income that they can depend on uh and and and also assets that they can need for liquidity. Um it will be a loss generating machine if they're not careful. I I totally agree. I totally agree.

Wade Lopez 27:32

I also think there's a psychological adjustment happening that that we don't talk about enough. Uh you think about people become unaccustomed to ultra-low mortgage rates, rapidly rising asset prices, abundant liquidity, and the idea that central banks could always step in and rescue markets quickly. That mindset shaped behavior in ways that are going to take some time to unwind. Gary, do you think investors will expect the Federal Reserve to rescue markets when things get difficult? And is that expectation realistic moving forward?

SPEAKER_01 28:04

I think a lot of investors live in a world where they think that the Federal Reserve has to rescue investors, uh, that the world is so dependent, or U.S. investors and their 401ks are so dependent on uh on those stock prices continuing to go up and being maintained, that the Federal Reserve will have to step in to um to provide liquidity to markets to prevent stocks from going down. I think that is a folly. It's while it has happened quite a bit and quite a bit more than I would want it to, um I don't think that we can depend on that anymore. Um or that we should depend on that as a and and people who who are, I think are taking a much bigger risk than they than they uh than they think they are.

Wade Lopez 29:01

Yeah. So we know consumers are beginning to feel you know pressure, higher capital costs in their daily lives. And what do you what does that mean for spending in the broader economy around the corner?

SPEAKER_01 29:14

So so far we have seen the consumer be relatively resilient. They are choosing, uh choosing wisely, as we would expect. Um, you know, they're substituting um, you know, uh chicken for beef, you know, as beef prices have gone up. Um, you know, they're they're looking to shop more at uh at um you know uh at stores that provide excellent value. Um and uh and and I think that even wealthy consumers now are are in that boat. You know, you've seen wealthy a trend where wealthier investors or wealthier people are shopping at dollar stores or shopping at Walmart. Um and uh and so I think um I think uh inflation has become psychological to a very, very important degree. And and uh and and whether it's actually pinching pennies of consumers, consumers are acting as if it has. And uh and I think we've we've seen that uh with real wages not increasing faster than inflation for uh you know uh some period of time here and the consumer falling behind.

Wade Lopez 30:27

Yep.

SPEAKER_01 30:27

Um and uh and I think I think that's a real issue.

Wade Lopez 30:31

I do too. And you you mentioned, you know, psychologically, and I'm not asking you to be a PhD in this, but how long does it take investors and business owners to adapt, in your opinion, to adapt fundamentally to different economic eras, right? So how long does that shift typically take in your opinion?

SPEAKER_01 30:50

I think you know, I I'm not a PhD psychologist. Uh and I I guess I'm gonna play one on this podcast right now, but I I think people you've got a little experience, Gary. Just you know, you've been around a while now. Okay. So from a markets perspective, people keep doing the same thing over and over and over again until it really bites them hard. It takes a crisis to change somebody's mindset. And so so I think it, you know, I think it's going to take a real reset uh of expectations from some massive market move to to shake people from this idea that they're getting entrenched in, which is inflation is a problem. I need to act as though inflation is a problem. Um and uh and that's something that we didn't have in this country for, you know, the better part of 20 years or so, right? And um and I think now we're getting, you know, we're getting dangerously close to you know what people felt like in the in the late 60s and through the 1970s and into the early 80s, um, you know, worried about inflation. And uh and so so I think that's that's a that's something that is gonna stick with us.

Wade Lopez 32:09

So your honest assessment at this point, are people really prepared? Are they still operating in the assumption of the last decade uh last decade right now?

SPEAKER_01 32:19

No, I think I think people are prepared. And their base, their base case scenario now is that inflation is here with me. And um, you know, that what does that do? Well, it increases consumption in the near term because you say, well, if I don't buy this today, right, tomorrow it's gonna be more expensive. And so, you know, we're we're seeing people make purchases today that maybe they would have put off. They're not saving as much. They're they're they're consuming because they think that the thing that they're gonna consume is gonna be more expensive tomorrow. And and so that that can have that can have you know serious uh uh capital allocation issues in the broader economy, uh, if people reduce their savings rates and then are not prepared from a savings perspective for you know when when something when that when those savings are needed.

Wade Lopez 33:11

Yeah, when life happens. Yep. All right. So Gary, let's bring this home. We've covered uh what created this environment and what it means for business operators, what it means for investors, uh, what it means psychologically for the people living through it. And as you know, I always close with three questions. Given the weight of everything that we've discussed today, I think these are going to be pretty difficult versions again. So the first question for you is what's the single most important thing that matters right now for investors or anyone navigating this new economic environment?

SPEAKER_01 33:48

The single most important thing is to uh to put away this notion that rates are ever going to be zero percent ever again in your lifetime. I think that is a fair thing to say that rates are never going to be as low as they were a couple of years ago, and and uh you should you should expect that rates were, if anything, will be higher.

Wade Lopez 34:12

I agree. Very good. What are you watching over the next six to twelve months that every person in the audience should be paying close attention to?

SPEAKER_01 34:21

I'm gonna be watching the uh the Federal Reserve like a like a hawk. Um and uh and and and expecting them to uh is uh trying to figure out whether they're gonna be hawkish or dovish, but I'm gonna be watching them like a hawk uh and and reading the tea leaves as much as we possibly can.

Wade Lopez 34:40

So if they announce their expected lifetime inflation rate, are you going to give up on them?

SPEAKER_01 34:45

If they if they continue to talk about 2% like it's a real objective, uh I think they lose credibility every time they say it.

Wade Lopez 34:53

Yeah, I would agree. All right, and finally, what do investors and business owners absolutely need to avoid right now?

SPEAKER_01 35:01

The the trap of dipping into savings for things that aren't necessary. I think the the idea of going to quick consumption or making investments now uh at the at the at the expense of their of their nest egg is is something that they need to be careful about. And frankly, it's a great reminder of the value of a terrific financial planner to keep you in keep you in shape for for thinking about what the size of that nest egg should be, and to also make sure that that nest egg is invested appropriately, uh, which is something that we do here at Concord uh very effectively.

Wade Lopez 35:42

I think the biggest takeaway today is this the economic environment is shifting back towards something more historically normal, even if it feels unfamiliar after the last decade and a half. That's not necessarily bad news, it's just a recalibration. In periods like this, the businesses and investors who thrive are not necessarily the ones with the most capital or the highest risk tolerance. They're the ones with strong balance sheets, honest cash flow, operational discipline, and the patience to make long-term decisions without being rattled by short-term noise. Cheap money rewards speculation. More expensive money rewards discipline. And if you're building something you want to last for your family, your business, or the community you live in and serve, discipline is always the answer. Gary, great discussion as always, and that is exactly why we call this built to last. See you next time.

Announcer 36:40

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