I had the opportunity to attend a luncheon today at Dallas Baptist University and heard Wayne Hast speak. He is a former Director for the 11th District of the Federal Reserve, an economic professor at DBU, and President of Financial Education Fellowship. His presentation, “Economic Futures: Principles of Proseperity” was quite interesting.
While the media has us all convinced that the economic sky is falling, Mr. Hast believes our economic future to be quite bright. While there are some clouds in the sky, we would do well to remember that we survived 1979 when interest rates were over 13%, home mortgages were going for 18.5%, and unemployment rates were at 10.8%. Times might be tough, but that does not mean that we can’t overcome them.
One part of the good news is that Texas is in better shape than the rest of the nation. The National Median Home price is $220,800, while the average for the 12 largest metro areas is $353,300. But, the median home price for Dallas is $146,800, the second lowest of the top 12 metro areas. Furthermore, in the Dallas area, 62% can afford a median priced home compared to only 2% in Los Angeles. Job growth is 3%, oil and gas drilling is at an all time high, and non-residential construction is very strong (check out the skyline in Fort Worth and Dallas and count the cranes in the air).
There are four primary areas of concern for the economic future. First, energy. Our nation still does not have a national energy policy. Second, the rising cost of food for humans and for animals and the increase in global demand for that food. Third, inflation. Even at 3% inflation, the price of goods will double in 24 years. This will hurt the poor and retired (fixed income) the most. Finally, financial education, or lack thereof. This is evidenced by high consumer debt, the rise in foreclosures, 7 year new car loans, and the incredible “payday loan” business (Did you know that there are more payday loan centers than there are McDonalds, Burger King, and Wendy’s combined?).
So what were his principles for personal prosperity?
1. Faith and confidence in the sovereign God and in our economy to handle rough times. We act in line with our perceptions as to how well we believe we will be in the future.
2. Create a financial plan. This includes a written budget, specific goals for saving and spending, a commitment to live beneath our means, and a committment to develop financial skills.
3. Use debt wisely. Good credit is a valuable asset, so limit consumer debt. Don’t buy all that you can afford. Debt is really a tax on your own future.
4. Develop human capital (educate yourself for a better tomorrow).
5. Discipline your work and family life.
6. Save regularly and invest carefully. Learn the fundamentals of saving by attending a seminar or reading a book.
7. Give generously to your church, to a mission agency, to a non-profit charity like the Red Cross (they aren’t just for those who don’t go to church), and give your time and talent to a non-profit that meets your skill set.
8. Commit to making a difference. Use your time and talents for greater value, like running for public office.
One final plug not related to the seminar. If you have not discovered Dave Ramsey yet, you need to. He is a Christian financial advisor and can be heard on KLIF 570 AM each weekday from 1 to 4 PM. “Debt is dumb, cash is king, and the paid off home mortgage has replaced the BMW as the status symbol of choice.”
Hope this helps,