The Future is Your Decision

From our July 2011 Creating Confidence Newsletter.

Last Tuesday the 12^th, I spent the morning at the Vistage All City meeting. Our speaker was Brian Beaulieu, a respected economist from the Institute for Trend Research. Brian’s talk, The Future is Your Decision, offered perspectives for CEOs and individual investors based on his trend research.

I found his information useful and have summarized his thoughts below.

Overview

There are 3 mega-trends to be considered when making decisions about your businesses or when investing:

1. Demographics, the World and the US have increasing population. More people = economic growth
2. Inflation, not hyperinflation, but easily 4.5% to 6%
3. Taxes are going up

2011 and 2012 will be periods of modest growth, with continued high unemployment. At the same time, it will be increasingly difficult to fill certain knowledge based positions because our workforce is a) immobile due to being unable to sell their existing homes and b) inadequately trained for the type of jobs available.

2013 and 2014 will likely be a modest recessionary period like the early 1990’s but not as deep as 2008.

Commodity prices are on a temporary rest. 2012 will see increasing commodity prices on items such gold, copper, oil and agricultural products.

The US represents 26% of the world economy. While we are the largest economy in the world, our share of the pie is growing smaller and opportunities exist in emerging economies for investment and doing business. Think Brazil, Australia, and India.

There will be ongoing weakness of the US dollar.

Housing will no longer be in recession but will not be in recovery. Over the next 5 years people will rent and not buy.

Interest rates will remain low and may creep up in 2012 and 2013. A 2014 recession may provide a temporary restraint on rates. Currently we have the lowest rates we will see in our lifetime. Borrow long term, taking advantage of fixed rates now and repay with cheaper inflated dollars.

Remember that normal today is tomorrow’s abnormal.

For Businesses

Look for customers in these growth segments:

• Exporters
• Alternative Energy
• Health care
• Professional services such as law and accounting
• Higher education
• Overseas in India, Brazil, Canada and Australia

Inflation will hit the labor market in 2012. You will need a strategy to employ a mobile workforce. Training programs are more critical than ever, given that you may not be able to find the skill you want in the workforce.

This is a good time to buy other businesses. If you have not positioned your business for sale, you likely do not have time to do so before the next recession. The next good selling season will be 2017 and 2018. Position now to be ready.

Do not let the pain of the past color your vision for the future. Find a sector of your business that is entrepreneurial and expand that segment.

In periods of inflation, metrics and monitoring are critical.

If you cannot raise prices, sell that business unit. Raise prices more frequently and in smaller increments. Think 1% to 1.5% per quarter instead of 4% a year.

For Individuals

The stock market will continue to be volatile thru 2011. Brian is bullish on 2012 and then expects a lackluster market. Position portfolios to take advantage of the 3 megatrends noted earlier.

Invest globally and position your portfolio to include commodities and other investments that do well in periods of rising interest rates and inflation.

Refinance your home if you have not already done so. If you are young and have equity in your home, consider borrowing the equity and investing it outside your home.

Summary

Brian closed with a quote from Dr. W Edwards Deming. “It isn’t necessary to change, survival is optional.”

That sort of says it all. If you can’t love change, at least accept it and position yourself for it. As with any of these ideas, it is best to a) run the numbers for your personal situation and b) consider the impact based on your personal goals.

As your Wealth Advocate, we are here to guide you and your business thru the coming changes. If you have questions or need our assistance, please contact me at Mackey@MackeyAdvisors.com or our team at 859-331-7755.

May prosperity be yours,

Mackey

Go Green: What Shade of Green do you want your Home to be?

Color is such an expression of who someone is, and what message they want to send into the world. We can be bold, innocent, happy, sad, or just plain blah depending on the colors we use in our lives. So can our homes express themselves in color? I think so…..

Do you get giddy over a bold Kelly Green:
Francie Rehwald bought 55 acres in Malibu, California and is building her new home out of a decommissioned Boeing 747 Jumbo Jet with the help of architect, David Hertz.

More Pictures & article here: http://www.shelterpop.com/2010/11/09/plane-home/

Or would you prefer a tradition Hunter Green:
Scottsdale, Arizona based Meritage Homes has brought green to traditional suburban living. Meritage Homes is the only top-10 homebuilder that’s 100% Energy Star qualified at no additional cost. All of the homes they build feature: Energy Star Certified appliances, minimum SEER 14, Low-E windows, low flow faucets, programmable thermostats, and low VOC paints and finishes.

Article here: http://www.earthtechling.com/2011/04/new-green-homes-come-to-texas/

How about an earthy Moss Green:
In Festus, Missouri there is a home that has been sold on eBay twice since 2003, but that’s not all that makes this modern home famous! It features a natural stone roof, 17,000 square feet of living space, and costs as much to heat and cool as a 2,000 square foot home. Oh, and it’s built into a CAVE!!!

More pictures & article here: http://dornob.com/huge-cave-house-unique-modern-underground-mega-home/

I know! Maybe you prefer a relaxing Sage Green:
This 3,500 sq. ft. San-Francisco adjacent hilltop home has a LEED Platinum certification, and feels as if you are in the quaintest of country cottages. SB Architects really focused their attention on not only making the environmental impact of the home as small as possible, but also on designing a home that would aesthetically be in partnership with the environment it was built upon.

More pictures & article here: http://freshome.com/2011/04/08/sustainable-residence-by-sb-architects-nestled-in-the-hills-of-mill-valley-california/

By: Gracie Mohr

The Journey to a New Building: Part 1

Over a year ago, we began looking for a new home for Mackey Advisors. If I had known how difficult this journey would be, I would have likely said, “I think I will pass.” The road to our new space has been filled with potholes, detours, missing map pieces and lots of orange barrels!

We have two goals. The first is to have a space that is simply large enough! We have grown, and subsequently become terribly cramped for space in our current location. We are short of conference room space and have people tucked into every possible corner. Our second goal is to occupy a space that is a living example of our brand.

The first objective was easiest to approach. Taking the number of people times the amount of square feet equals how much space you need. The second goal, creating a living example of our brand, has been a much more challenging task. Naturally, it requires that we have a fundamental understanding of our brand from the inside out.

We began the journey in Covington and Newport with two old and potentially beautiful buildings. We eventually chose not to pursue the one in Newport because it had the misfortune of being located next to a bar painted in the bright orange and black of the Cincinnati Bengals. We were all in agreement that this themed décor did not shout “Prosperity!”

In Covington we found an old bank building and decided to focus our attention there. Sadly, after investing much time and energy into the project we could not make the financials work on the building. Cost effectiveness and conscious spending are two components of Prosperity, so the bank building was soon off the table.

At this point we found ourselves going back to the drawing board. As we continued to look we found spaces that were too big and just as many that were too small. Like Goldilocks, we were having a difficult time finding one that was “just right.”

Unable to find a home in Covington or Newport, we began to broaden our horizons and the small community of Bellevue soon caught our attention. After looking at several buildings we stumbled upon one that, with an addition, would be just right. For the last few months we have been designing, attending public hearings, going through inspections, applying for financing and attending to the many details involved in making this building a new home for Mackey Advisors. If all goes to according to plan, we will be closing by this time next week! We will still have much to do, starting with demolition and ending with a complete remodel.

Along the weaves and turns, we also learned more about our brand, Prosperity. We have always known that Prosperity is more than just money, but usually we are looking at Prosperity from an individual point of view. Throughout this process we had the opportunity to look at it from a business and community point of view.

The building in Bellevue makes financial sense. While Prosperity is not just money, if the money doesn’t work, nothing else does either. With the financials handled, we looked at the larger picture. Prosperity for Mackey Advisors means convenience for our clients and being just off I-471 was a perfect location. Long term, as our clients continue to grow outside the region and our work becomes more Internet based, we know that the building will primarily serve our team.

As we looked at what our team needs to be prosperous, we knew we needed green space. Our new office will have two green spaces, a courtyard and a deck. We will also have a large break room and kitchen. All of the spaces will be designed around the idea that our team needs a place to gather, commune and relax.

We know that the next generation is our future, and they will want to live and work in walk-able communities. Bellevue is one of the few completely walk-able communities in our region.

At Mackey Advisors, we believe Prosperity is for everyone, not just for the well to do. Bellevue has $100,000 homes and $1,000,000 dollar plus condos. It is a community for everyone, from those recently setting out on their journey to Prosperity to those who have been on the path for many years.

Over the next few months we will post pictures so you can follow our progress on our web site and Facebook page. We will also post what the process teaches us about Prosperity along the way.

As always, we welcome your comments and encourage your feedback.

May prosperity invade your space!
Mackey

Sustainable Homestead Tour: August 14th

Join the Kenton County Conservation District on Sat., Aug. 14, 2010 between 10 a.m. and noon to tour Red Sunflower Farm, Kenton County’s self-sustaining homestead in-the-making. Learn how to use permaculture principles and the three pillars of sustainability – reduce, reuse and recycle – to design, create, and steward Earth-friendly indoor and outdoor living spaces. Allow about an hour for your visit, with tours led by owners Mackey McNeill and Barry Schlimme. You will see the Energy Star-rated home, the gardens and the recreational area along beautiful Banklick Creek. Children are welcome. The farm is located on Webster Road. Visit www.redsunflowerfarm.com for directions (directions provided by internet map searches are not accurate). Sponsored by the Kenton Co. Conservation District. Please pre-register by contacting the Kenton County Conservation District at 859-586-7903.

Kentucky Conservation Districts are governmental subdivisions of the state, organized under Kentucky Revised Statute 262. Conservation Districts are responsible for protecting our soil, water and other natural resources. The Kenton County Conservation District was established in 1942 following a referendum of the citizens of the county. Seven locally elected officials, who serve a four-year term without pay, govern the Conservation District. The Conservation District makes technical and financial help available to reduce soil erosion, prevent water pollution, and maintain and improve the quality and productivity of our farmlands, forests, and other natural resources. Assistance is available to everyone in dealing with natural resources issues, including farmers, homeowners, businesses, schools, organizations, agencies, cities and local governments.


For information about this news release, contact Mary Kathryn Dickerson, District Coordinator for the Boone, Campbell and Kenton County Conservation Districts at 859-586-7903 or 859-635-9587 or e-mail: mary.dickerson@ky.nacdnet.net.

Take Personal Action

Want to be a part of the solution? Are you ready to make a difference?

When we went to war, the President called for us all to assist in the effort by buying more stuff. Well, hopefully we are all clear now that buying stuff is not a way out of this mess.

For those who are ready for action, here are two ideas for what you can personally do to strengthen our economy.

1. Lobby Congress to allow for loan modification in bankruptcy. We must stem the tide of foreclosures if we are to reverse the current negative economic cycle. This recommendation comes from The Center for Responsible Lending. http://www.responsiblelending.org/
   Your personal interest is aligned with the greater good in this case. With every home in your neighborhood that goes into foreclosure, your home loses $3000 in value, on average. Learn more at:
   http://www.responsiblelending.org/issues/mortgage/subprime-mortgage-crisis.html
   
2. Ask lenders you do business with to tell you their home owner’s preservation rate. Hold lenders accountable for their actions.

May prosperity be yours,

Mackey McNeill, CPA/PFS, IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com