While we are all focused on protecting ourselves, family, co-workers and friends from becoming ill, survival for most of us is a near certainty. We, therefore, must look to the future with a view towards recovery from the economic damage that has been and continues to be wrought from the near shut down of commerce throughout the United States and the world.
The slogan “all for one and one for all” feels good, but let’s be real, it is, and always will be, the human instinct to preserve and fend for ourselves. My genetic makeup is infused with survival genes, as I am the son of two holocaust survivors … not the ones that were lucky enough to be hidden by caring families or who survived in the woods while hunting for food and, on occasion, shooting the enemies, but two parents that survived death camps (Auschwitz and Bergen Belsen).
For those of you who know me personally, you may recall my embrace of the slogan “luck and timing are largely responsible for success.” Largely responsible for sure, but worthless without foresight, preparation, intelligence, rational thinking, and action. Sitting back and simply opining on what may or will occur, watching and reading the plethora of reports from all the “experts” on all subjects, absorbing the vast amount of information and data is great, but doing nothing yields nothing.
Rational thinking … how simple that seems. Sure, many of us believe we are “rational”. But the opposite is true more often than not. Intellectual thinking that is not blended with rational thinking (“street smarts”) is of no significant value when it comes to survival, progress, and success in life and in business.
I am blessed (as far as I know), with a pleasant balance of intelligence and street smarts. So, with that in mind this morning, here are my insights for today;
- The United States is the most durable, capable, productive, and democratic country in the world.
- History has proven the resilience of the American people to withstand all forms of threats to its citizens.
- The wheels of all governmental agencies are churning faster than ever before to not only protect the health of all citizens, but also to ensure the economic damage is contained and overcome.
- Yes, there is divisiveness and dysfunction between many of the federal, state, and local governmental entities and agencies.
- Divisiveness will take a seat behind the combined efforts of all to move our economy forward through recovery and beyond.
- Real estate is, and has always been, a key driver of economic recovery.
- Since the Great Depression, government policies have been enacted to stimulate real estate investment as a means of providing jobs across a wide range of industries. The Economic Recovery Tax Act of 1981 is a prime example, as it included the Accelerated Cost Recovery System (ACRS), which was a tremendous “once in a lifetime opportunity” for real estate investors to benefit from the generation of huge non-cash losses to offset profits from real estate and all other forms of income.
- The various actions recently undertaken by the Federal Reserve and Congress will provide tremendous incentives for growth and prosperity for all who take advantage of what is being offered.
- Interest rates have been slashed to nearly zero.
- Borrowing is being made easier every day, despite what the media has been reporting.
- Tax incentives for real estate investors are now better than at any time since 1981. More on that later.
- Real estate is tangible. It provides solace in times of distress and is not disposable at the click of a button.
- “Tangible and non-disposable real estate … ugh.” Not so! Remember, disposition of an investment with a click of a button (stocks, bonds, etc.) is often intellectual irrationality.
- Even if rational, the pressing need to “get out” of an investment creates opportunities for others that have the foresight and capacity to avail themselves of the opportunities that are present and will become available.
- Given my 47 years of real estate investment experience without ever having lost a penny, I think I have this one right.
Stay tuned for more. Be safe, remain positive, focus on rational thinking, and look to the future with glee and anticipation of the great opportunities for success that are up for grabs.
Lawrence N. Taylor