Do your daily life and work activities provide you with significant and lasting fulfillment? Do they make you feel like you are making a meaningful contribution to the world? If you can say “yes” to these questions, then you will feel more engaged and fulfilled in your life compared to those who feel that there is little or no meaning in how they live.

Work and money with meaning tends to lead to philanthropy—greater service and contribution to the world.

Work and money without meaning tends to lead to escapism or debauchery.

You have a unique set or hierarchy of values and priorities that make you stand out. Whatever is highest on your list of values is the value which provides you with the most purpose and meaning when acted upon and fulfilled.

Whenever you are sticking to high-priority daily actions, ones that fulfill your top three highest values, you will feel more purposeful, productive and alive. Your life will feel more meaningful and fulfilled.

Whenever you are allowing yourself to take on lower priority daily actions, ones that do not fulfill your top three highest values, you will feel less purposeful, productive and alive. Your life will feel less fulfilled.

Dedicating yourself to what is truly higher on your list of values liberates you from a quiet life of desperation and initiates a more engaging life of purpose, meaning and inspiration. This can add years to your life and life to your years.

There are two ways of adding purpose and meaning to your day:

1. Do what you love through delegating.
2. Love what you do through linking.

Doing what you love through delegating means identifying what is truly most inspiring and meaningful to you and focusing your attention and energy on these items.  Saying “no thank you” to all other lower priority distractions and saying “yes” to what is most meaningful and fulfilling, liberates.

Loving what you do through linking means clarifying whatever lower priority daily actions you feel you are currently unable to delegate and linking them to what is most important.

“How specifically is temporarily performing this particular action step (until I can find someone to delegate it to) helping me fulfill what is truly most meaningful and fulfilling?”

When you are unfulfilled and feel your life is meaningless, you may seek immediately gratifying behaviors to compensate. You will possibly try to fulfill your gut with sugar, food or alcohol or fill your house, closets or garage with consumer items or your mind with escaping drugs or thoughts of sex.

A few years ago, I was asked to assist a fellow executive performance coach colleague with consulting one of his wealthy entrepreneurial clients. This client previously owned a multibillion-dollar, multinational company, but had recently sold it, cashed out more than handsomely, and retired. Although this client was a moderate social drinker before retirement, he soon found himself escalating his drinking to the point of excess and throughout most of his overly leisureful day. When I spoke with this client on Zoom, he was sloshed and could barely speak fluently. He was fully aware of his drinking escalation but was having a challenge controlling his behavior.

I asked this gentleman when he first started noticing his drinking escalation. It was quite evident to him that it began upon selling his business months earlier. I asked him why he sold his business. He stated that he was in his mid-seventies and was sensing it would be wiser to exit when he did before his health declined so he could “relax” and supposedly “enjoy” his leisure life after working so hard for so many years.

I jokingly (but not jokingly) told him: “There is nothing wrong with retirement as long as it does not get in the way of your meaningful work.”  He was already starting to wonder if retiring and no longer working was truly as meaningful and fulfilling as he assumed it would be.

If you do not fill your day with meaningful actions upon retirement, you can begin to “lose” your faculties and end up with senility or indulge in immediately gratifying forms of debauchery as a compensation.

I suggested that he consider renegotiating with his previous company’s new owners and leaders that he return and once again contribute his skill and expertise in the capacity of closing big multimillion or billion dollar deals for them for a fair compensation.

The client was brought to tears considering this suggestion and said he missed making his big global deals. So, the next week he did exactly what I suggested and almost immediately reduced his drinking by 90 percent. He kept his daily diary full by calling, scheduling and doing big deals, which kept his daily life more meaningful and productive. It was not the alcohol causing his excessive behavior. It was his reduction in meaningful, productive daily actions that resulted in his ungoverned behavior.

When you fill your day with high-priority actions that are truly meaningful, your blood, glucose and oxygen flows up to the executive functioning area of your forebrain, your medial prefrontal cortex, which then calms down the immediately gratifying, desire center of your brain, your amygdala, which allows you to more effectively self-govern any of your impulsive or addictive behaviors.

Meaningful service and contribution are now adding years to this gentleman’s life and life to his years.

Keep your day filled with high-priority meaningful actions before low-priority meaningless actions dissolve your life away.

Dr. John Demartini is a human behavioral specialist, educator, internationally published author, consultant and founder of the Demartini Institute.

Drdemartini.com

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Unlike in other countries, homeownership in the United States has always been very attainable. The playbook traditionally went like this: you graduate from school, rent for a few years and then buy your first starter home. Most people were out of the rental rat race by thirty-five years of age.

However, now the United States is moving towards a renter nation. Homes are now unaffordable to most people in their thirties, and many young people have given up on the prospect of being able to purchase a home. Instead of buying a home, many successful young people are moving into luxury rental units that are much nicer than a home they could afford.

Forever renting is being glamorized by the younger generation. They look at the lack of responsibility and the ability to move around as they please as the benefits of renting. However, this is a young person’s game. Most of them will want to settle down and raise a family, and homeownership and a set monthly mortgage payment provide the stability later on in life that most of them will desire.

What the younger generation needs to understand is the incredible upside to owning a property. To start, in the United States, banks offer a thirty-year fixed loan that doesn’t move with inflation. Rents/mortgages are about thirty to forty percent of someone’s monthly expenses on average. Imagine if this cost is fixed for thirty years. It would mean that as you move up through life and your salary increases, that large cost of shelter will remain the same. If you are a renter, your rent will continue to slowly climb year over year.

In the United States, owning property is the main staple of building wealth. For most older Americans, their net worth is primarily the value of their home. It is based on them paying down their mortgage over thirty years and the home appreciating over time. If the younger generation doesn’t have that, they will have a harder time building wealth and being able to comfortably retire.

How Gen Z Can Afford a Home

As stated above, traditional homeownership is out of reach for most of the younger generation. The average cost of a starter home is over $400,000. That is why the successful kids of Generation Z are getting creative. Below are ideas I have seen from this generation on how they are obtaining homes.

1. House Hacking

This generation is all about affordability and house hacking provides this. House hacking involves purchasing a property and living in one of the rooms while renting out the others. The rent collected from the other rooms can offset the mortgage payment, making the property more financially manageable.

2. Rent to Own

In a rent-to-own arrangement, you can rent the property for a specified period with the option to buy it later. A portion of your monthly rent goes towards the home’s purchase price. This allows you to save for a down payment over time. It is beneficial to the landlord as they are slowly getting paid on the property year over year vs. one lump sum which would be more heavily taxed.

Conclusion

While most of Generation Z is focused on living in the moment, those who want to set themselves up for success will own a home. Creative strategies like rent-to-own and house hacking can make homeownership more attainable at a younger age. The new narrative of “you will own nothing and be happy” is a lie, and this generation needs to open their eyes and understand that home ownership is the anchor of the American Dream.

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Dr. John Demartini – Seven Common Fears That Can Hinder Business Growth

Are you feeling that you are plateaued in your business development or company growth? Are you wondering why you are not breaking through and going to the next level?

There are at least seven common fears that can at least partly underlie business plateaus. But, before I share them, I would first love to share a story involving a very common one.

Recently I had a 40-year-old business entrepreneur approach me and ask if I could consult with him about his business growth concerns. I stated, “certainly.” We scheduled a time, and I began the session by asking him to prioritize what he felt he wanted to work on first and foremost. He stated that no matter what strategy he has tried over the past three years, he just can’t seem to break through the business growth ceiling he is at and he feels stagnant and stuck.

I then asked him a simple straight forward question: “If all of a sudden you were to break through this current ceiling in your business and take your business to the next level, what would you be afraid could happen?” He stared at me for a moment and suddenly stated: “I am afraid my wife would divorce me, because of all the extra time and effort it would take.” Then he explained that three of his friends and business colleagues previously took off in their businesses and became a bit cocky, preoccupied in their businesses, and soon did not meet some of their wife’s needs. They all ended up in a divorce, which cost them a substantial portion of their existing fortunes and nearly completely crumbled their businesses, at least for a while. He said, “I guess the idea of that possibly happening scares the daylight out of me and maybe it is adding at least one of the brake pedals on my business growth.”

I was sure there were other fears and reasons, including certain management and delegation issues to be addressed, but I tackled his first concern on the spot. I stated, “Every decision you make and action you take will be based upon what you believe will give you the greatest advantage with the information you have according to your current hierarchy of values. Unless you find ways in which doing the proven actions to grow your business can enhance or build your marriage more than destroy it, you will probably plateau to protect you from this anxiety and its potential outcome.”

I explained to him that if his wife did not feel she would be winning if he were to grow his business, she will probably respond in a way to try to get what she wants. So I asked him how growing his business to the level he desired could help his wife achieve what is highest on her set of values and what he perceives her life is being inspired by and dedicated to.

At first, he could not see any immediate advantages to her or the family.  But Demartini prompted some possible benefits to her of him achieving his dream. As we continued, he made new beneficial associations in his mind of how getting what he wanted could help her get what she wanted. The more links we found to help her fulfill her family dreams and social contributions, the less anxiety he was feeling about achieving his goal.

He also saw how delegating some of the lower priority actions he was still doing at could liberate him and allow more quality time for his wife and family. Plus, he saw how it could liberate her from doing more mundane actions at home and allow her the freedom to pursue some of her more meaningful objectives.

His energy immediately started rising and new creative strategies and action steps started emerging and flowing. Once he saw how growing his business would not be in the way of a lasting marriage, he was inspired and ready to take action. He could not wait to go home and share the new advantages he could provide his wife and family by stepping up his business growth.

Over the next six months, his business took off and broke through the previous ceiling, but he kept his focus on how it could benefit his family. This is the definition of caring.

In addition to the fear of losing the respect of loved ones, there are six other common fears that can hinder an entrepreneur’s business growth and prevent them from getting to the next level. These are the fear of:

• Not knowing enough to strategically plan and execute business strategies to meet objectives.
• Defeat or failure by not achieving the business objectives they envision.
• Not making enough income or losing money by pursuing business objectives.
• Being rejected by social authorities they look up to for pursuing business objectives.
• Not having enough vitality, stamina, or wellness to achieve their business objectives.
• Breaking the morals or ethics of a spiritual authority they are subordinating to by pursuing their business objectives.

Each of these fears can hinder the achievement of your chief business aim. By confronting each of the existing fears that can cause you to plateau by answering specialized questions like those in the story above, you can become conscious of what you are unconscious of and see beyond the associated disadvantages holding your back and bring them into balance.

The seven common fears are simply assumptions that you are about to experience more drawbacks than benefits. So look for the advantages to these imagined fears and balance them out by holding yourself accountable and liberate yourself from the ceiling your imbalanced mind has temporarily imagined.

Dr. John Demartini is the founder of the Demartini Institute, a human behavioral specialist, educator and international best-selling author.  Drdemartini.com 

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Twenty years ago, we didn’t hear much about sustainability from companies or their approach to social responsibility. But flash forward to today, and if you are a manufacturer that isn’t talking about these two topics, you’ve fallen behind. Sustainability and corporate responsibility have not only become unique selling points but are often interwoven into a brand’s story and messaging. Socially conscious customers are responding with their purchase power and loyalty, proving the importance of ethical branding in business. And brands are responding by aligning with their customers’ values, growing trust and sharing their actions for building a safer and healthier future.

Here are a few ways to do that:

Discover what is important. According to the Capgemini Research Institute, 79 percent of consumers are changing their purchase preferences based on social responsibility, inclusiveness or environmental impact. That makes it all the more important to discover what your customers and prospects hold most significant. Take the time to survey and talk with them. Then use what you learn to determine how you can align your mission to achieve meaningful environmental and social progress.

Make it a differentiator. Any efforts your company makes to reduce its environmental impact and act in a socially responsible way should be used as differentiators. I’ve worked with manufacturers that actively develop innovations that allow them to reuse natural resources or reduce, or even eliminate, waste in their facilities. Some of them even help customers operate more sustainably by visiting their facilities and advising them on the most efficient ways to use their products or how they can change their processes to be more productive. These are all powerful differentiators that set them apart from competitors and appeal to customers who seek out suppliers with environmentally responsible operations.

Give teams meaning and purpose. The most important thing you can do is give employees and sales teams meaning beyond their day-to-day jobs. Engaged, loyal teams recognize their value and see their role in driving the company’s mission forward and doing work that matters. Employees will be less likely to leave a company that actively cares for and protects the environment, people and communities, especially if they have opportunities to personally contribute in these areas. From company-wide recycling programs to special days throughout the year where teams can volunteer their time, environmentally and socially conscious activities create a positive, uplifting culture that attracts and retains talent.

Get it out there. Businesses may be inclined to keep their sustainability progress under wraps until they’re well on the way to achieving their goals. They may feel the company isn’t far enough along or that it’s lagging behind competitors. But sharing environmental and social goals early and often will let customers, employees, suppliers, the community and the industry know that you are working toward meaningful progress. Silence will only lead them to assume you’re doing nothing in these areas. Annual reports, websites and social media are just a few of the ways you can share progress on your sustainability and corporate responsibility goals.

Protect the people. For the best manufacturers, the safety of their people is an ongoing focus. These companies must share their safety story and make it part of their brand messaging. No customer wants to purchase products from a company that puts human lives at risk in their manufacturing process. They also don’t want to purchase from businesses that fail to protect human rights within their material sourcing or supply chains. Brands must explain how they’re keeping their employees safe and protecting the lives of those who contribute to their production and distribution processes.

Live up to your promises. Ethical brands live up to their promises. They avoid saying one thing and doing another. They are transparent and honest in their messaging and business practices. And when issues arise, they own up to their mistakes. When Netflix separated its DVD service from its streaming service, customers who wanted to keep both were faced with a steep price increase. The CEO issued a letter explaining the changes, and while the prices didn’t change, the company was more transparent about the what and why of this significant shift in their brand model.

Today, consumers have more choices than ever on the products and services they purchase. Increasingly, they are seeking out environmentally and socially conscious brands whose mission aligns with what’s most important to them. That’s why companies must communicate their values and position their sustainability and social efforts as differentiators to not only win the hearts and minds of their customers but also become leaders in their industries.

For more business insights check out our business category here.

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Would Lowering Interest Rates Be a Magic Bullet for the Economy?

In the last few years, due to printing money and low interest rates, inflation has become a big problem in the U.S. economy. This has happened in past administrations, the most notable being the 1970s, which was called the time of “Great Inflation.” At the time, Paul Volcker was the FED chair and he reduced inflation by increasing the Federal Funds rate to a whopping 19 percent in 1981 and inflation eased to 2 percent by 1983.

Volcker’s tough on inflation stance is Jerome Powell’s current strategy. Powell believes if we raise interest rates, it will slow down the economy and decrease inflation. While it sounds good in theory, I don’t think the FED’s strategy of raising rates can get us out of the high inflation predicament we are in. In fact, there is an argument to be made that lowering rates is the only way to bring inflation down to anywhere near their target 2 percent. Let’s dive into the numbers so I can explain this to you.

The Consumer Price Index, or CPI, is broken down into eight categories. One of these categories is shelter. Shelter accounts for one-third of the CPI, so if shelter prices substantially rise, the inflation numbers increase drastically. So while inflation came in at 3.7 percent across the board last month, shelter came in at 5.7 percent. This shows us the real problem in the inflation numbers is housing.

Housing has very little to do with interest rates, and a lot to do with supply and demand. In the time of the “Great Inflation,” we had an overabundance of housing. When rates increased, this made shelter prices decrease, as you would see in a traditional raising of interest rates environment. What is currently different is we have a deficit in the supply of houses on the market. This deficit creates a problem for the FED because even with high interest rates, there is no supply to let the market pricing naturally decline. To get shelter inflation under control, you need more supply. There are two ways to achieve more supply on the market and both of them involve lowering interest rates.

The first reason lower rates would create a housing supply is it would allow people to list their homes. Currently, many people would love to move, but the 3-4 percent interest rate they are locked into prohibits this. If rates dropped dramatically and were closer to 5 percent, people would take a slightly higher rate to be in a home that fits their needs, but most people wouldn’t take on an 8 percent interest rate to do so.

Secondly, lowering rates would increase supply because it would increase building. Most of you probably don’t pay attention to this, but anything you see being built now is only being completed, not started. This is because construction loans are currently sitting around 10 percent. I know in my company, MC Companies, we have put six apartment projects that we haven’t started on hold until rates are at a more reasonable level. This is going on with developers all over the country.

However, lowering rates isn’t a magic bullet. Low rates will stimulate the economy and create more inflation. Lowering rates would only help the housing piece of the CPI. Printing money and extremely low interest rates put the U.S economy in this situation and with the lack of supply of housing, this is uncharted territory. It will be interesting to see if the FED can get us back to 2 percent inflation or if they accept a higher inflation benchmark in order to start lowering rates later this year.

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IncomePlus – How Multifamily Real Estate Can Help Protect Your Family Wealth.

By Michael Episcope, Co-CEO and co-founder, Origin Investments

Investing is more than a financial transaction. It’s about enabling you to do what you enjoy and build a family legacy. I began investing in real estate to protect and grow the wealth I built in my previous career, but I found investment opportunities to be mediocre at best. Sponsors were more interested in making my money their money while exposing me to extraordinary risk. My business partner, Dave Scherer, and I co-founded Origin Investments to change the industry by empowering investors to truly realize the benefits of owning real estate.

Passive Income While You Sleep

Financial freedom is about having your assets work for you by generating passive income, something I believe no asset class can do better than real estate. Long-term property leases act like a series of bonds that create stable income for the property owner. Plus, appreciation is realized as leases are renewed at higher rates—key to protecting capital from rampant inflation. But not all real estate is created equal. Origin only invests in the multifamily sector because apartments are a lower-risk, need-based asset class and a proven hedge against inflation. However, there’s a difference between knowing what to invest in and how to make money. Making consistent returns in multifamily real estate begins by investing in cities with robust population and job growth and investing with a manager with a proven track record.

Origin’s IncomePlus Fund was designed to deliver both growth and income by investing in multifamily properties in Sunbelt markets. This all-weather fund invests in debt, common equity and ground-up development to both reduce volatility and maximize returns. Dave and I designed it to generate more wealth with lower risk than other vehicles, which is why we’ve invested millions of dollars of our own personal capital in this fund.

Given the unique needs of investors, we understand the IncomePlus Fund is not for everyone. Credit funds are another way to earn passive income because they invest in the more protected part of the capital structure and their returns are generated through contractual income rather than the promise of future growth. The Strategic Credit Fund, offered through our affiliate firm, was designed to deliver stable monthly income to its investment partners by investing in debt collateralized by multifamily properties. I believe that today’s high interest rate environment, combined with the safety of multifamily, make this fund another option for income-seeking investors to seriously consider.

Your Wealth, Your Way

Dave and I have always offered this advice to investors: Ask tough questions, work with an experienced team, and seek advice that fits your unique situation. This way, you can focus on things you truly enjoy, knowing that your wealth is protected for the next generation.

To learn more about the advantages of investing in multifamily real estate, visit Origininvestments.com.

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A couple of interesting bills have been proposed in response to corporate America being more involved in the single-family home market. These bills were proposed because affordable housing is becoming an issue nationwide and corporate America is fueling that problem. They are easily able to outbid homeowners and even regular investors.

In the last ten years, there has been an increase in corporations purchasing single-family homes. This trend has been accelerated since the pandemic. I believe this was because there was such an increase in home prices that large corporations saw those investments doing better than other investments they had in their portfolio. I was unaware this was happening on such a large scale until a good friend of mine who invests in single-family homes went to a conference this year and told me there were way more corporate employees there than the mom-and-pops who usually attend.

In response to the increasing acquisition of single-family homes by hedge funds and corporate entities, two bills have been introduced in the U.S. Congress. The “End Hedge Fund Control of American Homes Act of 2023,” which seeks to restrict hedge funds, defined as corporations, partnerships, or real estate investment trusts, from owning single-family houses. It mandates these entities to divest their single-family home holdings over a ten-year period, ultimately prohibiting them from owning single-family homes.

Similarly, the “American Neighborhoods Protection Act” targets non-corporate owners who possess more than 75 single-family homes. It requires these entities to contribute an annual fee of $10,000 per home into a housing trust fund. This fund is intended to provide down payment assistance to families, facilitating more accessible home ownership, particularly for those with lower incomes. As those who invest in single-family homes know, you would be lucky to net ten thousand a year on the actual home, so the government is simply proposing you don’t own over 74 homes.

The Impact of Corporate Ownership on Housing Markets

While institutional investors only own three percent of all single-family rentals nationwide, they have a substantial presence in more affordable markets. For instance, in Charlotte, North Carolina, institutions own 20 percent of single-family rentals. Such significant ownership by institutional investors can drive up housing costs and limit the availability of affordable housing for individual buyers and families.

The Future of the Bills and How I Feel on The Matter

The million-dollar question people are asking me is how I feel about this. To start, I hate when the government puts its nose where it doesn’t belong. We have a housing shortage and anything that limits creating housing I am going to oppose. However, these corporations do drive up prices for normal Americans.

I don’t believe these bills will pass into law. This is because there will be a negative effect on the economy if they do. If corporate America was forced to sell their housing stock, it would certainly drive down home prices. This would be great for first-time homebuyers, but those who hold the majority of their wealth in their home would be upset. As would a majority of the members of Congress and the Senate who are also homeowners and don’t want to see their assets lose value.

Secondly, a lot of these institutions get their money from pensions, people’s 401(k)s and other saving vehicles. The government wants to see these assets perform, as well. As do the people whose money they are investing. Real estate is a great diversification for these funds.

However, this is an interesting topic. It really will put to the test how much the legislators want to see housing become more affordable versus how much they want to appease their donors, who want a growing economy. As I discuss a lot on my podcast, “Real Estate Strategies with Ken McElroy,” the only way to make housing more affordable is to deregulate zoning and create more of a supply. Once we can do that, it will be less expensive and easier to get a home. Until then, the trend of moving into a nation of renters will remain strong. That is why I think real estate will stay a good investment for many years to come.

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Unless you have been living under a rock for the past three years, you know that home prices have been elevated since 2020. The initial spike occurred because of low interest rates, and it has continued due to the lack of housing supply. So when everyone asks me when real estate prices will start to come down, what they really want to know is when more houses will come to the market, increasing the supply, and offsetting the high home prices.

I personally don’t think we will see a major housing correction anytime soon. This is because I don’t think we will have enough of a housing supply coming to the market to lower prices. Below, I am going to go over the factors at play that I believe will keep inventory low into 2025.

Interest Rates

Interest rates are the biggest factor that will keep the supply of homes listed for sale very limited. Currently, rates sit at around 7.5 percent, which historically is not high. However, at the low point during the pandemic interest rates sat closer to 3 percent. This 4.5 percent difference is a lot of money when looking at a monthly payment.

To put it into perspective, If you had a thirty-year $400,000 mortgage at 3 percent interest, you would be paying roughly $1,700 monthly. That same $400,000 mortgage at 8 percent would now cost you roughly $2,800. So even if a homeowner is looking to replace their home with one of equal value, they would be almost doubling their mortgage payment each month. Even those looking to downsize are realizing the cost of their new smaller home may have the same payment as the home they currently live in.

I know the Federal Reserve has discussed cutting rates this year. However, I believe these cuts will be small—maybe a quarter of a point each. Once they start to cut, you will see housing pricing climb back up as demand increases. It would take interest rates moving back under 5 percent, in my opinion, to make those sitting on low rates list their homes. I don’t see that happening in 2024.

Building Costs

Not only are homeowners not selling, but builders are not building. Now you may be thinking that’s not true because you have construction all over your town. Those cranes are from projects already started that need to be finished. Hardly any new projects are starting at this time. At MC Companies, we have shelved six of the land deals we were planning on building. Rates are too high, building costs are too expensive, and bridge loans are too uncertain.

Expect an increase in rental supply in 2024 from these construction projects. However by 2025-2026 when nothing new is coming to the market, you will once again have a rental/housing shortage.

Looming Recession

There is a lot of talk about a recession being right around the corner. Recessions make people nervous and make them want stability. They try to not take on additional and unneeded expenses. Homeowners are trying not to get stuck with something they can’t afford so they are choosing to sit tight until the economy stabilizes. This diminishes the number of homes being listed. Some are still talking about a soft landing and the Federal Reserve may just pull that off, but no one knows for sure just yet.

However. . .The moral of the story is we need supply. Even though I just listed why I don’t see a large supply of homes coming to the market anytime soon, there is one event that could trigger a surplus of houses being listed. The only thing that could be a catalyst for supply is a large recession. Extensive job loss will make people sell their homes and that will add supply, hence lowering prices. As of now, I don’t see that happening, but we have been on a wild ride the past three years and I am closely tracking the economy into 2024.

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Decisions such as renting vs owning impact your median net worth.

If you read personal finance articles, you will constantly see that most Americans don’t have enough to retire. That thought can be scary as you’re looking at your own finances. However, the real question is, what is the net worth of the average American your age? Remember, your net worth is the total value of your assets less any debts you may have. In this article, I am going to break down the average net worth by age, but also discuss how adding real estate can help grow your net worth in the future.

18-24-Year-Olds 

Since they are just beginning their journey into adulthood, they don’t have a big net worth. The median is just eight thousand dollars, not surprising because a lot of them are in college or starting low-paying jobs. If you are in this age group, I recommend getting approved for a credit card in order to build your credit and pay it off every month. This will set you up for your future investing endeavors.

25-29-Year-Olds

At this age, your average net worth actually goes down! This is largely due to student loans starting to come due and credit card bills beginning to rack up. Your average net worth at this age is seven thousand dollars. This is the time to start dabbling in investing. Even if it is just investing $100 into the stock market, you need to start following what is happening with the economy. Also, you should pay off any outstanding credit card debt you have to avoid having bad debt hold you back in years to come.

30-39-Year-Olds
Your thirties are when wealth starts to be built. Your median net worth at this age is 45 thousand dollars. A lot of people in this age group are beginning to save for a house, and this is a wise investment move if you want to have enough to retire in your later years. The extra work you put in at this age to secure your future will really pay off.
40-49-Year-Olds
The median net worth for this group jumps significantly to 169 thousand dollars, predominately due to homeownership. Instead of paying rent, they are making a monthly house payment that increases their equity and net worth. In this age group, a large gap in net worth starts to form between those who purchased a house in their thirties and those that remained renters.

50-59-Year-Olds
The average net worth in this group is 171 thousand dollars. This comes from paying down their mortgage and their home accruing equity. Also, at this point, most people are making much more money than they made in their twenties and thirties.

60-69-Year-Olds 

By this age, many people have their homes paid off and are enjoying retirement. A paid-off home has a lot of equity, and this home is where most people store their net worth. Those that are still renters in this age group will have a difficult time retiring as they never received the benefits of equity in their home.  

Your Home is Your Net Worth

For most Americans, their homes are their net worth. This is why your first goal of investing, regardless of age, should be home ownership. I believe we are headed into a recession and lowered real estate prices. If this is the case, those who do not yet own a home need to start preparing to become homeowners. Saving for a downpayment, paying down bad debt, and improving your credit are all things you can be doing to get ready for these buying opportunities.
 

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This is the first of a two-part guide to art investment presented by Artelier, a UK-based art consultancy that specializes in curating art for luxury residences, yachts, aircraft, hotels and corporations.

Art holds a unique place in the world of investments. Financially, art is an excellent way to diversify your portfolio—a practice that can help protect against downturns in any particular sector. Art is also one of few asset classes that consistently increases in value over time, has a tangible value and typically isn’t subject to the same market volatilities—making it a stable investment. The UBS Global Art Market 2023 report showed how the market grew strongly in 2021. Despite the far-reaching impacts of the pandemic on global markets, aggregate sales of art were estimated at $65.9 billion, representing a 31 percent increase on the previous year. Additionally, the art market itself is diverse, offering opportunities for both high-end and speculative investments.

The attractive aspect of art investment, however, is that art holds a cultural and personal value. Collecting important work contributes to the passage of art history. Collectors are positioned among museums and institutions for key acquisitions, allowing them to impact the cultural landscape at national and international levels. Building a personal collection is also emotionally fulfilling in a way few other assets provide. Many choose never to sell, preferring to leave their collection to institutions as part of their legacy, or to be inherited by future generations. Most art investors are therefore truly committed to learning and engaging with art—if you collect what you are passionate about, there is always a return on investment.

Understanding the Art Market

Saatchi by Christoph Schrein

Piece by Lee Jae Hyo

If you’re ready to invest, the place to start is by understanding how the art market functions through a primary and secondary market. The former refers to the initial sale of the artwork by the artist or their representative. Any sales made afterwards by the likes of dealers and auction houses are secondary market sales. What does this mean for aspiring collectors? The primary market is spearheaded by galleries and is essential for artists to gain exposure and become established; buying on the primary market typically benefits from more stable and lower prices. The secondary market, however, gives the opportunity to buy rarer pieces and those by historic artists, although caution needs to be applied to not pay an inflated price beyond typical market value. Works sold on the secondary market are more sensitive to market demand and recent developments in the artist’s career—this is where record-breaking auction prices take place, and where publicity can have a huge impact on the price achieved. Each channel has its own benefits, and, ultimately, they’re interdependent in their influence on long-term growth. Here are the top considerations to keep in mind:

Buying from artists directly

Going to the source allows the collector to interact with the artist and learn about their creative process. Purchasing directly from the artist also eliminates the gallery’s commission, making the work more affordable. Beneficially, there’s no question of authenticity, which makes the acquisition more valuable long-term. However, buying from the artist may lack the reassurance of specialist appraisal or market forces.

Traditional art galleries

Art galleries represent artists and sell their works on their behalf, ensuring a fair price for the artwork and professional management of the sale. Galleries work to publicize the artists they represent, increasing the artist’s market value. However, buying from galleries can be exclusive, and many galleries prefer to sell to reputable collectors or long-standing clients.

Art fairs

Art fairs bridge primary and secondary markets, as exhibitors may be selling new work or re-selling. As galleries worldwide exhibit at the likes of Frieze or Art Basel, it provides an unparalleled opportunity to discover new galleries or artists, and collectors can see the work first-hand rather than online. However, it can be tempting to make impulsive choices, so inquiring with the gallery and then seeking independent advice from a specialist is advisable.

Dealers

Dealers are knowledgeable in their field and are often highly specialized, allowing access to rare pieces and niche interests. They provide authentication documents, condition reports with details of any restoration, and documentation of the artwork’s provenance. However, finding a reputable dealer is paramount. Ensure they are members of professional organizations such as the Art Dealers Association of America or the British Antique Dealers Association to give confidence that they have a proven track record of offering high-quality, authentic works of art.

Auctions

Auctions are highly accessible since sales and lots are publicized, giving wider access to collectable modern masters. Auction houses such as Sotheby’s and Christie’s ensure accurate provenance, and extensive condition reports and forensic analysis can authenticate and date a work. Prices, however, can skyrocket beyond even experts’ expectations—which is positive for an artist’s overall reputation and market value, but can limit your returns if buying for investment. Setting a reasonable limit on bids is crucial for buyers seeking to re-sell at a later date.

Off Market Deals

Many art pieces are sold privately, away from the public eye, and these exclusive sales can offer unique and unexpected finds by world-renowned artists. Gaining access to this network depends on your own reputation as a collector and relies heavily on word of mouth through connections. Working with art advisors can help gain entry to this elusive market.

Developing an Art Strategy

Strategy is paramount when beginning to invest in art. David Knowles, the director of Artelier, an art advisory that specializes in investment, gives guidance for investment collectors: “Investing in art requires a long-term view, as the market can be unpredictable and not transparent. It is generally advisable to hold onto artworks for over five years before re-selling, giving the artist’s career and reputation time to grow, which increases the return on investments. A diverse art portfolio is the best complement to time. Collectors need to consider diversifying their art investments among various types of works that complement one another in terms of initial cost, risk/return profiles and capital preservation characteristics.”

A sound approach is to buy at different price points from varied artists who are at different stages in their career. Advisors consider four key categories of artists when choosing investments: emerging artists, established artists, contemporary blue-chip artists and modern masters. Emerging artists are defined as artists who are beginning to receive recognition for their work, while established artists have been active in their field for at least 10 years and have a solid track record of exhibitions and sales. Contemporary blue-chip artists are those whose work has been consistently sought after by collectors and commands high prices in the market, while modern masters are historical artists from the 19th and 20th centuries whose distinguished oeuvre has confirmed their significant role within art history. Each category comes with different benefits and risks, and who to choose depends on your identity as a collector.

Investing in a modern master like Pablo Picasso or a blue-chip artist like Yayoi Kusama is reserved for the most exclusive collectors due to the high entry price point. Yet, since their work’s value is well-established in the secondary market, they are considered stable and reliable. If budget is a concern, investing in artworks by blue-chip artists is still possible through limited-edition prints and multiples.

Established artists are attractive for investment as they are more affordable than blue-chip, but the trajectory of their careers is clearly defined compared to emerging artists, and therefore easier to predict. However, an existing active market for their work can present a barrier to access compared to emerging art, as there may be more competition and higher prices.

Meanwhile, investing in an emerging artist often means direct access to their primary market and a significantly lower price. They therefore have a great potential to yield high ROI, but with fewer guarantees. Looking at the trajectory of Banksy’s sales at auction since 2000, for example, both the number sold, and the prices achieved, saw an exponential growth that worked in the favor of early investors. The challenge is identifying similar opportunities in the current art market, while being realistic that many emerging artists will not have such dramatic increases in demand. If you are not as concerned with returns, however, emerging artists often present fantastic value for money, can be highly innovative and bring something original to your collection, and are most likely to be open to bespoke commissions.

Receiving specialist advice on rising names, market forces and fair valuation of particular artworks gives buyers greater confidence. It is also essential to assess your personal, financial and social goals, and integrate them with which artists to buy, and from whom. Artelier have introduced a new concept to the world of art investment, the role of a personal “Art Concierge,” a specialist who develops bespoke strategies based on independent advice, acts as a representative with galleries and dealers to confidently acquire pieces and provides turnkey installation and curation services as part of collections management. Each collector receives tailored support, whether acquiring a standout piece, commissioning new talent, looking for portfolio appraisals or ongoing management of existing collections.

In the next issue of Jetset, we will introduce Part 2 of this guide, where we look more closely at a step-by-by criteria one can apply to investing in the art market. We will also look at collections management—how to keep your investment safe while maximizing enjoyment.

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