Right Sizing Your Operation and Your Wallet
HELLO FROM ZION 😊
Sorry for the delay in the newsletter, we are out and about in the cayons and I was a little under the weather. If you haven’t been to Zion National Park, I would highly recommend it! It is one of the nicest camp grounds I have visted. The cooler weather made the dessert hikes much easier. It’s absolutely worth a trip.
https://www.nps.gov/zion/index.htm
Now back to the Sunday Snips:
As the economy starts to cool off, rates creep back up, and the market settles into a new norm, eyes are being cast towards right sizing and expense reductions. Although everyone knows mortgage is a cyclical industry, most do not know how to effectively grow and shrink with the movements of the markets. As production teams increase their success and grow their volume so grows their support teams and their lifestyles. Because most mortgage professionals are heavily growth minded most ignore, avoid, and don’t really know how to contract. Effectively managing these areas (while still focusing on growth) will always dictate long term success.
While I am vehemently against laying off people or cutting all expenses just because the market contracts, I am a huge proponent for keeping the business lean and healthy. And now is a great time to invest in improving in these areas for both your business and financial life.
Four key questions to ask yourself:
What do you really need?
Where can you eliminate waste?
What is not producing for you?
What systems or habits do you need to put into action to make things work?
I’ve included a few resources to help manage lifestyle inflation in both your personal and professional lives. Enjoy and Happy President’s Day weekend 😊
Notes that Resonated:
What gets written down gets done
Shiny tools alone won’t fix the issue you have to create processes first…. It’s not about the tech it’s about the framework and the process
Invest in building your energy…. Spiritually, mentally, and physically. You can’t give away what you don’t possess
Gratitude unlocks abundance
Inner peace is priceless
Everything is temporary… we are all travelers, and we are only passing through… enjoy the journey and the short time you have on the road
Most of the things we worry about in life are wildly unimportant
A man is a product of this thoughts… what he thinks he becomes- Mahatma Gandhi
Where has your mind been over the last week? Where does it need to be? Go there
Things to read:
Reducing your spending and the need to upgrade everything with a few simple tips
The Diderot Effect: Why We Want Things We Don’t Need — And What to Do About It
“The Diderot Effect states that obtaining a new possession often creates a spiral of consumption which leads you to acquire more new things. As a result, we end up buying things that our previous selves never needed to feel happy or fulfilled.” - James Clear
Podcasts to listen to:
Financial habits and mindsets to grow your money and improve your financial security
In this episode you will learn,
• The habits Graham developed to become a millionaire.
• How to prepare yourself for a recession.
• The 3 best assets to invest your time in.
• How house hacking can benefit you.
• How YouTube has the power to transform your career.
• The money beliefs that can help you move forward or hold you back.
Managing workforce reductions in the right way:
https://podcasts.apple.com/us/podcast/hbr-ideacast/id152022135?i=1000598514327
Know your rockstars and the desired traits and culture before cutting
Invest in helping employees find another place to work or an internal work reassignment
Create soft landings for employees
Don’t hire in one area and layoff in another
Leaders need to own the deficiencies that lead to the layoffs
Communicate with transparency, humility, and honor
Off board in a way that people will sing your praises on the exit.
Understand the true economics of the layoffs- the cost cutting doesn’t always pencil out (direct costs and hidden costs)
Don’t wait until financial performance is so poor layoffs are the way to bring things to center. cut poor performers or excessive employees along the way. Always manage to the culture and the metrics. Prune as you go
Carefully forecast future volume, needs and growth before cutting
Make sure you understand and have mapped out the post layoff world
Careful of the trust killer of layoffs
Don’t underestimate the value people bring
Understand the unintended consequences this will create
Across the board cuts rarely work
Videos to watch:
Top Quotes:
“You never really understand a person until you consider things from his point of view ... until you climb into his skin and walk around in it." ― Atticus Finch
“When you continue to be irritated by someone who refuses to change you also refuse to change” - Bhavna Karnani Killa
A man is a product of this thoughts… what he thinks he becomes- Mahatma Gandhi
Housing Market Update:
https://www.redfin.com/news/housing-market-update-recovery-stalls-mortgage-rates-rise/
Key Takeaways: Overall, the market is cooling but not bottoming out. The cost of housing is still extremely high but tight inventory is still a problem. This coupled with higher rates is keeping buyers on the sidelines. But because most homeowners have less than a 5% interest rate they are staying in their homes and keeping buyers’ options minimal.
mortgage payments are up 24% year over year
purchase applications are down 43% YOY
home purchase google searches were up 35% from Nov. ‘22 but down 24% YOY
median home price $346,725 versus $250,000 in Feb 2020
pending home sales were down 17% YOY
actively listings were up 22.3% YOY
average days on market was 51 days, up 33 days from a year ago
month of inventory supply is 4.1 and increase of 1.9 months YOY but still below early 2020 levels
85% of homeowners have below a 5% interest rate