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🍽️ Every family needs a safe word

🍽️ Every family needs a safe word

Plus: ChatGPT can be wrong, housing market updates, lower your water bill, and more...

Future Funders
July 24, 2023

Together With

Happy Monday Future Funders Family!

It was a big weekend in our household as our eldest daughter is finally expressing interest in tolerable Disney movies.

While Ms. Rachel did get us through some dark times… Cocomelon is no longer a welcome guest in this house.

Okay, let’s get to it!

💬 Quote Of The Week

“The easiest way to teach children the value of money is to borrow some from them.”

-Unknown

🍽️ The Main Course

Headlines That Matter

Housing

Did We Miss The Housing Recession?

🚀 The quick version: The housing market has been sluggish and hasn’t seen its typical spring and summer boom this year.

Recent data is pointing to a market that is ready to rebound. Here are the details:

Existing homeowners can’t sell (for now). Existing home sales for June fell about 19% from last year (the slowest pace since June 09’) as sellers continue to be reluctant to give up 3% mortgage rates for something now closer to 7%. Consumer confidence and savings rates remain favorable however, telling us that maybe we are near the bottom.

Homebuilders are turning optimistic. The lack of existing home sales is creating an opportunity for homebuilders to increase supply of new homes. They are starting to take advantage with single family housing permits for June increasing 2.2% (largest in over a year). Also the National Association of Home Builders/Wells Fargo Housing Market index (a monthly survey of homebuilders) indicated homebuilder optimism hitting a 13 month high.

Companies seeing a better 2H and 2024. Companies like Zillow, Redfin and Realtor.com recently released reports covering their outlook on single family housing— all seeing increased pockets of market strength. Home prices seem to be holding, and they all think we see lower mortgage rates (likely 6% vs. about 7% today) by the end of the year which could entice existing homeowners back to the market.

Banks (starting) to turn more positive. Several large banks reported quarterly earnings recently including Wells Fargo, the nations largest bank mortgage lender. When talking about lending conditions, CEOs on the whole were hopeful that a near plateauing of interest rates would start to improve the housing market later this year and into 2024.

👪 How it affects your family: The one common indicator to watch from here are interest rates. If they stabilize in the 2H of the year (we think they will) and into next year even possibly start to come down, we would expect a short lived lull and a national rebound in the housing market.

Here are some things you can do today depending on your situation:

Buyers: look at options to pay lower rates. If you are a buyer and can’t wait to make a purchase, we would look closely at adjustable rate mortgage options or other ways to buy down your rate today. We are willing to bet that interest rates are lower a year or two from today.
Buyers: think about a new vs. existing home. With homebuilders about to ramp up supply, if you are a buyer we would consider looking at new homes vs. existing ones. You will be in a stronger bargaining position as homebuilders need to sell their inventory. We are already seeing some signs of buyer bargaining power as builders are starting to offer buyers ways to effectively pay lower mortgage rates. The reason they are doing this is so that they don’t have to lower the home sale price (if a builder lowers the price on one house then they likely have to mark down the rest of their portfolio- no bueno).
Sellers: maybe use spare cash for a renovation. As a seller, If you want to wait for a likely better housing market in 2024 or lower mortgage rates, now may be a good time to look at using spare cash to do a value enhancing home renovation as you get ready to sell (check out our discussion on home equity loans).
Everyone: think about establishing a living trust. If you don’t have a lot of urgency to do anything with your home at the moment but know you want to leave your home to your kids, now would be a great time to set up a living trust so they don’t have to deal with probate court (as we explained last week).

Parenting

Deepfaking

🚀 The quick version: Artificial intelligence is an exciting new technology with many potential positive applications for our future. That said, there is a scary trend increasing around one attribute of AI that all parents need to be aware of. This trend is deepfakes.

A deepfake is an increasingly common type of video or audio content created with artificial intelligence that depicts false events that are increasingly harder to discern as fake. The FBI is now warning people that they are seeing a large number of these cases.

Whether it is emailing you fishy content from what appears to be a friendly source, calling you with a family member’s voice, or even attempting to convince you that they are kidnapping your child, deep fakes are starting to pop up everywhere.

Probably the most famous case was that of Jennifer DeStefano and her family. She received a call from kidnappers demanding ransom while playing what sounded exactly like her daughter’s voice on the other end of the line. Turns out her daughter was fine and the kidnappers deepfaked Jennifer using AI.

It doesn’t take much for a scammer to use AI against you. They may just need a social media profile, some basic location data, or just a few second recording of a family member’s voice to try to fool you.

👪 How it affects your family: We expect to continue hearing more and more about these types of incidents in the future as regulation is always slow to catch up and the technology continues to evolve at a very fast pace.

To prepare, here are things you and your family can do today to guard against a potential deepfake:

Create a family safe word. If someone calls and says they’ve kidnapped your child or you hear what sounds like your child’s voice on the other end of the phone, you can ask for the family safe word as a way to help determine if it is real or not.

Talk to your kids about social media. Discuss how what they post can attract the wrong kind of attention. Talk to them about being especially careful posting when they are away as it gives a scammers an opening to plausibly convince you a kidnapping is taking place.

Account privacy = better. Whenever possible make your accounts private or utilize privacy features to keep your information from getting into the wrong hands. Also we would monitor the kids accounts and run frequent searches for personal and family member information online.

Be wary of unexpected phone calls. Even from people you know, as caller ID numbers can be faked. Also be on high alert if something sounds funny or you get an unusual information request.

In the United States, all public companies are required by law to report their earnings ________ time(s) a year.

Answer below (no peeking!)

🥘 The Side Dishes

A few things to know…

🎓 ChatGPT is getting dumber. A new study points to some alarming deterioration in ChatGPT’s accuracy over the last several months.

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🧺 Parents everywhere, watch out for this new trend! Kids are putting laundry pods in their mouths again and it’s picking up steam on TikTok. This time it’s not Tide pods, it’s Borax, and it’s being falsely billed as giving you various health benefits if you do it.

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🚰 Water is not free. Water bills are rising everywhere as water systems replace old pipes and equipment but here are some creative ways to save on your water bill.

🧠 Alzheimers progress worth celebrating. Eli Lily came out with some exciting news this past week that their experimental drug appears to be even better at slowing down the disease than another one that was just approved by the FDA.

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🗓️ The Week Ahead

July 24th

Today we will get the July results for both the Manufacturing Purchasers Manager Index (PMI) and the Services PMI as a good gauge on how two important sectors of the economy are trending (see our last discussion here on how these sectors are trending).

July 25th

Today is National Hot Fudge Sunday Day! Given the fact that Americans are eating six pounds less ice cream per year, this is a day we will certainly will be observing in our family.

July 26th

The next FED meeting is today. Most people are expecting a potential final interest rate raise and continued language around inflation cooling.

🍨 Dessert

This Week’s Deals For Families

Help your family save and spend smarter*

🔥 REI’s Summer Sale Includes 5,000+ Markdowns — but These Are the 10 Best Deals Starting at Just $16.

🎨 Turn your kid’s art into a beautiful memory. Artkive has their summer sale for a limited time.

👚 Last days of J.Crew’s end of season sale - 60% off items with code SHOPSALE.

*we won’t earn on any of the deals above this week - just thought they were the best ones we found and wanted to share them anyway!

Dinner Discussion ❓

Answer: The SEC requires companies to report four times a year. In fact, most companies are required by law to file their quarterly statements no later than 35 days after the end of the quarter, and their annual report no later than 60 days after the end of their fiscal year.