MAGIC Equity Partners

It’s the second Wednesday of May—what's been catching your attention this week?

As we move further into the month, we’re bringing back a sharp and timely article, “It’s the Debt, stupid.”

This piece dives into the often-overlooked impact of debt on our economy, our decisions, and our future. If you haven’t explored it yet, now’s a great time to take a look and share your perspective.

Let’s keep the dialogue going and dig deeper into what really drives the conversation.

All kinds of discussions going on out there about the interest rates, the Fed cutting or not. Hyperspeculation on whether or not we’ll see reductions this year, next year, never…

But way out in the forest, where the prime evil still prevails, there are some small, faint voices of another kind... “What about our debt? What if we cannot make our payments?”

Not since WWII has our national debt reached the proportions of today. We are spending more to service our debt than the government coffers are bringing in. AND the BIDEN ADMINISTRATION ADDED MORE DEBT (with forgiveness). It’s not clear yet how much the TRUMP ADMINISTRATION will add, but I’m betting it will be substantial.

Most Americans must live on a budget.
Credit card debt is TABOO.
There is a whole industry on that. Cars, Boats, Miscellaneous, all of that ‘STUFF’, when financed, can be toxic and too expensive. We will run out of money.

As a country… WE ARE THERE!!!
Jamie Dimon of JP Morgan is clamoring about that now. So are a number of other “big wigs” who believe that we’ll be pushing over the edge. Ray Dalio has been carping about it for a while also. It is interesting that the guy with the biggest bank (most deposits) is worried about the biggest risk. It’s also curious that one of the biggest Hedge Fund beneficiaries of the economic crash is now so worried about the debt..They are both the proverbial “canary in the coal mine”.

Below is a chart with additional data that supports the notion that we’re overspending. It’s something we all need to be thinking about. If you’re an investor, be it equity, debt, or real estate, you had better be thinking about these kinds of things, highlighted in the St. Louis Fed Report. Ignore them at your own peril.

To learn more, BOOK a call with Bruce!
https://calendly.com/bruce-mandel/30min

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Stay focused on your goals, but flexible with your strategy
Watch MAGIC Equity Partners' newly uploaded video here:
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Stay focused on your goals, but flexible with your strategy Stay focused on your goals, but flexible with your strategy

Uncertain Markets Demand Clear Objectives
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Uncertain Markets Demand Clear Objectives Uncertain Markets Demand Clear Objectives

It’s the last Wednesday of February—what stands out to you as we wrap up the month?

As we reflect on the past few weeks, we’re revisiting an intriguing article, "IT’S DIFFERENT THIS TIME 🧐." It’s a thought-provoking take on patterns, cycles, and whether things really change or just appear to.

If you haven’t checked it out yet, now’s the perfect time to dive in and share your thoughts.

Let’s close out February with fresh insights and meaningful discussions!

When uncharted waters are encountered, the cry often is, “It’s different this time.”
Well… not really.
The basic economic concepts still apply.
The fundamental idea of supply and demand still applies.

My millennial children keep telling me that this is a COMPLETELY different market. That prices are way out of whack, and that they cannot even think about buying property. It’s cheaper to rent… That they will NEVER be able to increase their net worth and live comfortably.

True?🤔 Let’s take a look🧐…

In 1980, I turned 25 (Yes, it’s true!!!).
If you examine the inflation of the dollar from 1980 to 2024, according to research (OMB and Investopedia), $1 is equivalent to $3.87 today. According to the experts, that's 3.125% compound inflation annually. Interestingly enough, if you were to purchase a home in 1980, the average 30-year mortgage rate at the time was 13.4%!!! (and we think that 7.5% is high)

Why do I bring this up?
Because we were talking about “partnering” with others and purchasing real estate.
That is EXACTLY what I did with my longtime friend in 1980. We bought a $28,800, 2 bedroom, 2 bath Quad-style townhome. Common wall, no garage (carport), no yard, no storage.

The response was, “That’s so CHEAP!!”
At the time, we didn’t think so. But is it really? Do the math.
You’ll find that prices and interest rates today are pretty comparable.
Check out this REAL LIVE EXAMPLE:

Remember, we paid

$28,800 x 3.87 = $114,456
(adjusted for the inflated value of the dollar)

The interest rate adjustment is:
Former rate (13.4) divided by the current rate (6.5) is the multiplier factor = 2.062

So the equalized value is:
2.062 x 114,456 = $236,008

Our mortgage was around $240/month. That is equivalent to $929 in today’s dollars.
With 20% down payment, the mortgage payment would be about $1000/month.
Still pretty close. And when interest rates drop, refinance and value will go up.

For millennials,
young professionals,
and strong trades workers,
getting into the real estate market now will only benefit you if you have the cash flow.

It’s NOT DIFFERENT THIS TIME. ❌
It’s just a matter of PERSPECTIVE. 🔎

The best way to learn investing? Surround yourself with the right PEOPLE
Watch MAGIC Equity Partners' newly uploaded video here:
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The best way to learn investing? Surround yourself with the right PEOPLE The best way to learn investing? Surround yourself with the right PEOPLE