• Economics

    Happy Phriday!!!

    We've had a crazy week: the stock market is overly erratic, mortgage rates have dropped (and increased) through Fed cuts, coronavirus is causing people to panic, etcetera, etcetera. Have you thought about how these things affect the economy, and specifically your economics?

    What moved me to write this post, as you heard from the video above, was a post I saw on FB that said something like, the mortgage rates are so low right now I'm about to buy a rental property. That may make sense in terms of mortgage rates but the question is why are mortgage rates being cut and does that really help your real estate goals?

    Although mortgage rates are low (they change daily) from an economics perspective, it has an impact on how people borrow money. In short, more people are looking to borrow money cheaply (as rates are slashed) to buy a house. This (along with other factors) causes house prices to increase especially in a real estate market where there are more people buying then homes available. This is congruent with supply and demand, a foundation of economics.

    What does this have to do with your personal finances? It should show you that the economy on a large scale can help you make decisions for your household. But if you don't think through the economics you may make a decision without important information.

    If you don't extract anything from this post please get this, your economy, meaning your household, should make decisions based on multiple factors including your faith in God. Try to remember the big picture and look at your finances holistically. Remember choose Faith over Fear for your Finances and practices wise economics.

    Picture credit: here


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