April 2022 * VOLUME 46 * ISSUE 4

Meet Our Chamber Volunteers!

We are fortunate to have willing and able volunteers keeping our Chamber office open from 11:00 a.m. to 2:00 p.m., Thursday through Friday.

Gary Dove and Coleen are in their first year in the position, but both have been in Los Osos for over forty years and bring a lot to the job from their experience.

Here is more information about our wonderful volunteers:

Kathy Lindsay: Kathy and her husband Mike are relatively newcomers having arrived in 2014. They became and continue to be active members of Trinity United Methodist Church. She has been volunteering at the Chamber for three years and her experience makes her very helpful to visitors.

Coleen Power: Coleen and her husband Bruce have lived in Los Osos since 1978. Coleen has taught at every Los Osos school in her teaching career. She retired in 2005 but continued some part time work as a reading specialist. She enjoys her time at the Chamber, and she says she continues to learn things about Los Osos and the area.

Gary Dove: Gary and his wife Cheryl arrived in Los Osos in 1974--48 years ago. Gary has been past president of Los Osos Rotary, the South Bay Community Center Board and has served on the Los Osos Community Advisory Committee. He is always been interested in what's happening in Los Osos and sees his time on the Chamber as an opportunity to keep up. Recently, Gary joined the LO BP Chamber Board of Directors.

Ed Gelb: Of our volunteers in the office, Ed is another newcomer having been here for only 9 years. However from almost as soon as he arrived, Ed became a Chamber volunteer. He is the senior member of the group. He also serves in many ways besides being an office volunteer. He assists the Board Secretary to put out a monthly newsletter, and has contributed both photos and writing over the years for the annual Chamber Directory.

How to be a good money manager in retirement

If you reach retirement with a significant amount of assets, you’ve done a great job of saving and investing. But now comes another challenge – making that money last.

You might think that this task, as important as it is, won’t be as hard as accumulating the money in the first place. Yet, a sizable number of people have reached a different conclusion. In fact, 36% of retirees say managing money in retirement is more confusing than saving for retirement, and 56% say they wish they had budgeted for more unexpected expenses in retirement, according to the Edward Jones/Age Wave Four Pillars of the New Retirement study.

What steps can you take to help you become an effective money manager during your retirement years? Here are a few to consider:

• Set your goals. Your money management needs will certainly depend, to some extent, on what your goals are for the coming years. Will you travel extensively? Stay close to home and pursue your hobbies? Or maybe even open a small business? Once you identify your vision for retirement, you can estimate how much it will cost, which will then dictate much of your spending and saving needs.

• Stick to a budget. If you’ve followed a budget throughout your working years, there’s no reason to stop now – in fact, budgeting may be even more essential when you retire. Of course, you don’t necessarily want to force yourself to be as frugal as possible – after all, you worked hard, saved and invested so you can enjoy a comfortable retirement lifestyle. Look for reasonable cost-cutting opportunities, such as eating out less often or eliminating streaming services you don’t use.

• Don’t underestimate health care costs. Even when you’re on Medicare and pay for supplemental insurance, health care costs could still be one of your biggest expenses during retirement. Initially, budgeting for $4,500 to $6,500 per person annually may be a good starting point for traditional health care expenses in retirement. However, depending on your health, prescription drug usage and other factors, your costs could be higher or lower. And you may also want to estimate long-term care expenses as part of your plan.

• Look for senior discounts. Once you’re a senior, you may be able to find discounts on a wide range of items and activities, such as movies, transportation, groceries, gym memberships and more. By taking advantage of these discounts, you can save a surprising amount of money and ease pressure on your cash flow.

• Establish a sustainable withdrawal strategy. For decades, you’ve been putting money into your IRA and 401(k). But once you’re retired, you will likely need to start taking withdrawals from these accounts. It’s essential that you don’t withdraw so much early in your retirement that you eventually run the risk of outliving your money. You may want to work with a financial professional, who can analyze your entire situation – assets, expenses, lifestyle, expected longevity, etc. – and recommend a sustainable withdrawal rate. Keep in mind that once you turn 72, you may be required to take out a certain amount each year from your 401(k) and your traditional IRA, so you’ll want to incorporate these withdrawals into your overall income strategy.

Do whatever it takes to become a good money manager during retirement.
You’ll find that it’s well worth the effort.

Hedge Against Inflation With These 3 Real Estate Investment Types

The annual inflation rate in the United States is currently around 7.5%—the highest it has been since 1982.¹It doesn’t matter if you’re a cashier, lawyer, plumber, or retiree; if you spend U.S. dollars, inflation impacts you.

Economists expect the effects of inflation, like a higher cost of goods, to continue.² Luckily, an investment in real estate can ease some of the financial strain.

Here’s what you need to know about inflation, how it impacts you, and how an investment in real estate canhelp.

WHAT IS INFLATION AND HOW DOES IT IMPACT ME?

Inflation is a decline in the value of money. When the rate of inflation rises, prices for goods and services go up. Therefore, a dollar buys you a little bit less with every passing day.

The consumer price index, or CPI, is a standard measure of inflation. Based on the latest CPI data, prices increased 7.5% from January 2021 to January 2022.¹ A little bit of inflation is considered healthy for the economy, but 7.5% in a single year is high.

How does inflation affect your life? Here are a few of the negative impacts:

Decreased Purchasing Power

We touched on this already, but as prices rise, your dollar won’t stretch as far as it used to. That means you’ll be able to purchase fewer goods and services with a limited budget.

Increased Borrowing Costs

In an effort to curb inflation, the Federal Reserve is expected to raise the federal funds rate. Therefore, consumers are likely to pay a higher interest rate on new mortgages, car loans, and variable-rate credit cards.³

Lower Standard of Living

Wage growth tends to lag behind price increases. According to Moody Analytics, when adjusted for inflation, average weekly earnings in January were down 3.1% from a year earlier.⁴ As such, life is becoming less affordable for everyone. Inflation can force those on a fixed income, like retirees, to make lifestyle changes and prioritize essentials.

Eroded Savings

If you store all your savings in a bank account, inflation is even more damaging. As of February 2022, the national average interest rate for a savings account is 0.06%, not nearly enough to keep up with inflation. And economists don’t expect that rate to go much higher.³

One of the best ways to mitigate these effects is to find a place to invest your money other than the bank. Even though interest rates are expected to rise, they’re unlikely to get high enough to beat inflation. If you hoard cash, the value of your money will decrease every year and more rapidly in years with elevated inflation.

REAL ESTATE: A PROVEN HEDGE AGAINST INFLATION

So where is a good place to invest your money to protect (hedge) against the impacts of inflation? There are several investment vehicles that financial advisors traditionally recommend, including:

Stocks

Some people invest in stocks as their primary inflation hedge. However, the stock market can become volatile during inflationary times, as we’ve seen in recent months.⁵

Commodities

Commodities are tangible assets, like oil, livestock, and minerals. The theory is that the price of commodities should climb alongside inflation. But the classic choice–gold–hasn’t risen consistently during periods of inflation since the 1970s, according to data from Morningstar Direct.⁶

Inflation-Indexed Bonds

Treasury inflation-protected securities, or TIPS, are U.S. government-issued bonds that are indexed to the inflation rate. Bonds are considered low risk, but the returns they offer are generally low, as well.⁷

Real Estate
Real estate prices across the board tend to rise along with inflation and often rise faster than inflation.⁸That’s one of the reasons demand for real estate is soaring right now.⁹

We believe real estate is the best hedge against inflation. Owning real estate does more than protect your wealth—it can actually make you money. For example, home prices rose nearly 17% from 2020 to 2021, 10% ahead of the 7% inflation that occurred in the same timeframe.¹⁰

Plus, certain types of real estate investments can help you generate a stream of passive income. In the past year, property owners didn’t just avoid the erosion of purchasing power caused by inflation; they got ahead.

TYPES OF REAL ESTATE INVESTMENTS

Though there are myriad ways to invest in real estate, there are three basic investment types that we recommend for beginner and intermediate investors. Remember that we can help you determine which options are best for your financial goals and budget.

Primary Residence

If you own your home, you’re already ahead. The advantages of homeownership become even more apparent in inflationary times. As inflation raises prices throughout the economy, the value of your home is likely to go up concurrently. At the same time, you’ve locked in a set mortgage payment for the next 30 years, so you’ll be immune to rising rental costs.

If you don’t already own your primary residence, homeownership is a worthwhile goal to pursue.
Though the task of saving enough for a down payment may seem daunting, there are several strategies that can make homeownership easier to achieve. If you’re not sure how to get started with the home buying process, contact us. Our team can help you find the strategy and property that fits your needs and budget.

Whether you already own a primary residence or are still renting, now is a good time to also start thinking about an investment property. The types of investment properties you’ll buy as a solo investor generally fall into two categories: long-term rentals and short-term rentals.

Long-Term (Traditional) Rentals

A long-term or traditional rental is a dwelling that’s leased out for an extended period. An example of this is a single-family home where a tenant signs a one-year lease and brings all their own furniture.

Long-term rentals are a form of housing. For most tenants, the rental serves as their primary residence, which means it’s a necessary expense. This unique quality of long-term rentals can help to provide stable returns in uncertain times, especially when we have high inflation.

To invest in a long-term rental, you’ll need to budget for maintenance, repairs, property taxes, and insurance. You’ll also need to have a plan for managing the property. But a well-chosen investment property should pay for itself through rental income, and you’ll benefit from appreciation as the property rises in value.

We can help you find an ideal long-term rental property to suit your budget and investment goals. Reach out to talk about your needs and our local market opportunities.

Short-Term (Vacation) Rentals

Short-term or vacation rentals function more like hotels in that they offer temporary accommodations. A short-term rental is defined as a residential dwelling that is rented for 30 days or less. The furniture and other amenities are provided by the property owner, and today many short-term rentals are listed on websites like Airbnb and Vrbo.

A short-term rental can potentially earn you a higher return than a long-term rental, but this comes at the cost of daily, hands-on management. With a short-term rental, you’re not just entering the real estate business; you’re entering the hospitality business, too.

Done right, short-term rentals can be both a hedge against inflation and a profitable source of income. As a bonus, when the home isn’t being rented you have an affordable vacation spot for yourself and your family!

Contact us today if you’re interested in exploring options in either the long-term or short-term rental market. Mortgage rates are expected to rise, so you’ll want to act fast to maximize your investment return.

WE’RE INVESTED IN HELPING YOU

Inflation is a fact of life in the U.S. economy. Luckily, you can prepare for inflation with a carefully managed investment portfolio that includes real estate. Owning a primary residence or investing in a short-term or long-term rental will help you both mitigate the effects of inflation and grow your net worth, which makes it a strategic move in our current financial environment.

If you’re ready to invest in real estate to build wealth and protect yourself from rising inflation, contact us.Our team can help you find a primary residence or investment property that meets your financial goals.

The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

Hello from your Los Osos Library!

It has been a long time...
in years past we had live in-person events, many events – every month.
We are starting community events again, we are starting out small.

Here are a few events for April:

FEATURED ARTISTS - THROUGH APRIL

Art by Ken Christensen is on display during the month of April. Come see his original art for the SLO library patron card released last year. Los Osos Library 2075 Palisades Ave, 805-528-1862. Free.

Spirit Dolls by Jay Bonestell. In the display case as you enter the Los Osos Library. 2075 Palisades Ave, 805-528-1862. Free.

PAWS TO READ - WEDNESDAYS, 3:30-4:30
Berkeley the dog is waiting at the library. She is all ears, come read to her on Wednesdays. School Age. Los Osos Library 2075 Palisades Ave, 805-528-1862. Free.

STORYTIME - THURSDAYS 10:30-11:00
Story time is more than stories, we have songs, shakers and fingerplay. Preschool, Toddler. Los Osos Library 2075 Palisades Ave, 528-1862. Free.

BOOK DISCUSSION GROUP - THU APR 14, 5:30-6:45
All adults are invited to attend our reading and discussion group on the third Thursday of each month. Los Osos Library 2075 Palisades Ave, 805-528-1862. Free. You may attend remotely, Zoom link is available on the slolibrary.org events calendar.

STAFF TRAINING AND CLOSURE – FRI & SAT APR 22 & 23
The library will be closed on April 22 & 23 for training. The library will be open 10-6 on Tuesday,
April 26.

READ TOGETHER - APR 28, 5:30-6:45
Jonniepat Mobley facilitates the group reading of a play/script. No audition necessary. Come in, take a script and we will read the play aloud together. Los Osos Library 2075 Palisades Ave, 805-528-1862. Free.

QUESTIONS?
Contact:
Victoria Heussen - Library Associate III
lososos@slolibrary.org
805-528-1862
Los Osos Library
2075 Palisades Ave
93402

Bonnie Richan, Branch Manager

Business funding programs for the state of California
can be found off of this link:

https://calosba.ca.gov/funding-grants-incentives/funding-programs

The CA Microbusiness COVID-19 Relief Grant Program is kicking off across the State of California! San Luis Obispo County has not been added as of this April newsletter, but more counties are being added soon, so please check back.