30 Years of Summer ☀️ 30 Years of Winter ❄️

Brock's newsletter | APRIL 20, 2025

Who knew trying to keep up with “the economy” could be this exhausting? I try to ignore the day-to-day and keep my eye on the big picture.

They say interest rates move in thirty years cycles. 30 years of summer, followed by 30 years of winter.

And what a summer it’s been. Starting in 2000, when the Fed bailed out the tech stock crash, we have been living in an “Era of Easy Money”: low interest rates, with tons of cash periodically pumped into the economy (2008 crash, Covid, etc.). What happened was that all that cash made asset prices balloon (specifically, stocks and real estate).

You can see it here in this graph of US home prices, adjusted for inflation: flat from 1890 until 2000, then whoosh, straight up. That bubble burst in 2008, but went right back up again.

The Era of Easy Money has now coming to a close. As they say on Wall Street, they’re taking away the punch bowl.

Now, we not only have high interest rates to contend with, but all that cash that we pumped into in the economy is causing long-overdue inflation. It’s a two-front war.

So the game of life for all of us just got harder, especially in a big city like LA. I’ve read more than a few articles and Substacks about the “end of the American Dream.” I wouldn’t go that far.

But it’s safe to say in this chaotic, inflationary economy, it’s difficult to “get rich.” I mean, that was always true - it's hard to make money, and harder to know how to save and grow it.

But it’s even harder today (and congrats to the millennials on their fourth “once-in-a-century” economic meltdown). High-paying white collar jobs are going away, and there is probably a “lost decade” of flat stock market returns coming, after the current hits on our Vanguard accounts stabilize. Good luck saving up any significant amount of money (a bundle of Bounty costs $40 now?). Start a business? Oof. And good luck with your crypto, if that’s your thing.

But all is not lost, and here’s why. You can still get house rich. It’s hard to do, but you only have to do it once.

Buy a house for $1.2mil, let it grow to $2mil over a 10-15 years, now you owe $700K on the mortgage….presto, millionaire. The truth is, if all else fails, the vast majority of people reading this newsletter can be home equity millionaires, and for most Americans, their home equity is the vast majority of their net worth. That won’t change.

And remember, tax law favors homeowners, allowing you to wipe out out a substantial portion of the capital gains on that mil. Another real estate windfall (and there are many).

Inflation is here to stay and a there's a likely recession breathing down our necks, but there’s no way NOT owning a home is any kind of sound financial strategy.

So while “the economy” dominates the headlines, and financial and market uncertainty has never been greater, the boring old house with the boring old 30yr mortgage remains, to me, the best and simplest bet to keep yourself on a firm financial footing.

Until next week,

-Brock

P.S. Buying a home starts with financing. Reply to this email to strategize on how to get the best rate and to be connected with a lender. Let's start shopping!

P.P.S. Don't see anything you love on Zillow? Many of the homes we sell trade off-market. Let's discuss.

🚨 🚨 Are We All Living Beyond Our Means Now? With rising costs of living, debt, and the doomscroll-to-checkout pipeline, we’re overspending more than ever.

👩 💰 Money With Katie is one of the best financial writers out there with great deep dives on how personal finance intersects with culture etc. Good IG too. Sign up for her newsletter.

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