EconomymultigenerationalReal EstateSANTA CLARA COUNTYWealth May 11, 2022

Why Diversifying Your Concentrated Portfolio Is A Smart Move

The Bay Area is a hub for many industries, including tech, and investors here often find themselves with a concentrated portfolio due to restricted stock grants and incentive stock options. If this describes you, take note: Diversifying your investments can be a smart move.
Lynne MacFarlane Blog - What does job market mean to real estate market?
Silicon Valley tech employees have been jolted by their stock options performance lately. At Intero Los Altos’ Monday office meeting, our title company rep brought up a point reminding us that in 2009, people who sold their stocks to buy residential real estate have done very, very well!
The Bay Area has historically been home to many companies that offer stock incentives to high-level executives. If you’re a leader in one of those companies, you may hold far too high of a percentage of wealth in your employer or previous employer’s stock. Here’s a recent article which considers the recent plunge in technology shares providing investors with a harsh lesson in that can hamper employee retention and threaten cash flow when share prices collapse.
“As stock prices fall, companies may have to offer employees even more shares to achieve the same compensation levels.” Here are companies that heavily rely on employee stock rewards.
Having a large percentage of your holdings in a single company can help you build wealth quickly when that company is on the rise. However, that same volatility can wipe you out if something goes wrong.
It may seem counterintuitive to cash out stock options now. Nobody wishes to cash in when their stocks are plummeting, but remember that nobody wants to let go of their stock when it is skyrocketing either. Real estate is a safer haven during times of inflation. It appreciates over time and it’s tangible. There are many ways to profit from real estate, from cash flow of rental properties to
appreciation of assets.
Consider balancing your asset class portfolio and cash out. Why not buy a multigenerational house? Think of an extra guest space for relatives visiting, building an ADU, or buying a property under $800K (I can suggest several areas). Real Estate can create passive income with lower volatility and that might be the right move for you.
Let me know if you would like a no pressure introduction to our financial wealth advisors providing Intero concierge service and advice before making any financial decisions.
Also please keep in mind that I’m always available to help your family/friends with any real estate or financial questions.
Lynne Watanabe MacFarlane, Realtor
Intero | Berkshire Hathaway affiliate
408-800-1141 or 831-346-2743
Buyers April 6, 2019

Want To Increase Your Family’s Wealth? Here’s How!

Everyone should realize that unless you are living somewhere rent-free, you are paying a mortgage – either yours or your landlord’s. Buying your own home provides you with a form of ‘forced savings’ that allows you to use your monthly housing costs to increase your family’s wealth.

Every month that you pay your mortgage, you are paying off a portion of the debt that you took on to purchase your home. Therefore, you own a little bit more of your home every month in the form of home equityAs your home’s value increases, you also gain home equity.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists. They are asked to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).

The latest data from their Q1 2019 Survey revealed that home prices are expected to round out the year 4.3% higher than they were in January. For the next 5 years, home values will appreciate by an average of 3.21% a year.

This is great news for homeowners!

For example, let’s assume a young couple purchased and closed on a $250,000 home in January of this year. Simply through their home appreciating in value, those homeowners can build their home equity by over $40,000 over the next five years.

Let’s look at the potential equity gained over the same period of time at some higher price points:

In many cases, home equity is a large portion of a family’s overall net worth.

Bottom Line

Whether it’s your first or your fifth, if your plan for this year includes buying a home, let’s get together over some tea/treats and we can discuss your real estate goals and I’ll do my best to help you understand where prices are headed in our area (or areas where you might want to invest.)

Lynne MacFarlane – email:  lmacfarlane@intero.com phone: 831-346-2743