A Wealth of Common Sense: An Ongoing Stimulus In the Economy For Years to Come

Investors tend to be focused on the prices of assets. It doesn’t matter if it’s stocks, bonds, real estate, cryptocurrencies, and so on. However, many of those assets produce cash flows. And looking at investments from a cash flow perspective can lead to radically different results.

One way that individuals can control their cash flows is to find ways to lower costs. And many took advantage of a big cost-saving measure in the past few years.

Millions of homeowners took advantage of historically-low interest rates to lock in a lower rate. Some homeowners were able to save hundreds of dollars on monthly payments.

Over a 30 year mortgage, or 360 payments, the savings can add up to hundreds of thousands of dollars.

That savings could potentially act as a stimulus for the economy. The extra few hundred per month per household not going into home payments can go into other forms of spending.

About 66 percent of U.S. households have a home with a mortgage. And mortgage debt makes up about 70 percent of all household debt in the U.S.

Total refinancings saved billions in annual cash flow. If that continues to go towards other forms of consumer spending, it’s clear that there’s a lot of capital flowing where there wasn’t before.

That could lead to continued inflationary pressure for years to come.

To read the full analysis, click here.