Dear Financial Samurai,
After nine months, the Fed finally resumed cutting rates, this time by 0.25%. Expectations are for another two rate cuts by year-end. The S&P 500 briefly sold off on the news, then finished the week at a new all-time high. Hooray!
The 10-year bond yield also dipped below 4% before closing at 4.14%, steepening the yield curve. A steeper curve is usually good for financials—banks borrow short (paying deposit rates) and lend long (mortgages, business loans). But an overly steep curve also signals the market’s lingering doubts about the Fed’s ability to control inflation and rising fiscal risks.
Notes released after the Fed meeting revealed sharp disagreement among governors over whether to cut and by how much. If we do indeed see another 0.5% of cuts this year, I expect the 10-year yield to head south again.
What I feel strongly about is this: the end of the commercial real estate recession is finally here (new post and podcast). This doesn’t mean prices will suddenly rocket higher as real estate always moves more slowly than stocks. But the next three years look poised to be far better than the last three, which makes this an important time to diversify accordingly.
A Magical Week in San Francisco
As a tennis fanatic, it’s been an incredible week in San Francisco with the Laver Cup in town. A few of us got to meet Roger Federer and watch him hit with some Youth Tennis Association kids at a local park. Yannick Noah, the 1983 French Open champion, even made an appearance.
The experience reminded me that time is the ultimate equalizer. Whether you’re an international superstar worth over $1 billion or a broke college graduate still job hunting, each of us wakes up with the same 24 hours.
Sure, Roger likely flies private and lives in a mansion, while the broke graduate lives with his parents. But if you’re healthy and have friends, how much better is Roger’s life really? He can’t walk through a park unnoticed, while the rest of us can savor anonymity and peace.
Let's make the most of our time and better appreciate the lives that we have.
Related post: Be Rich, Not Famous: The Joy Of Being A Nobody
The Power of Staying Put
Even though relocating to a lower-cost part of the country (or world) makes financial sense once you’ve FIRE’d, moving is easier said than done. Leaving friends, finding new doctors, uprooting your kids, selling property, and buying a new home are all heavy lifts. Inertia often wins.
And when world-class events like the Laver Cup or NBA All-Star weekend roll through your city, staying put feels even more appealing. There's just so much fun an excitement.
Instead of a full relocation, consider geoarbitraging within your own city first. Switching neighborhoods alone can unlock surprising savings while preserving your social network, medical providers, and familiar routines.
Party Hard, Grind Harder Until You Can’t
Speaking of San Francisco, an economist at Ramp (a private corporate card company I invested in through the Fundrise Innovation Fund) released an eye-opening report: grindcore culture is back. Corporate card usage spikes sharply from noon to midnight on Saturdays, a pattern unique to San Francisco—at least for now.
I suspect other major cities will follow as competition heats up. While mass media loves to preach work-life balance, a bull market calls for maximum effort if you haven’t yet reached your net worth goals.
The window to build wealth doesn’t stay open forever. The bull market will end, your health will fade, or your motivation will flicker out like a candle in the wind. Seize the opportunity while your own Arc Reactor still hums.
For example, I’m typing this section with my eyes closed because my lacrimal glands no longer work properly. My daily screen time is capped at roughly two hours. One day, I may develop carpal tunnel or arthritis that limits my productivity even more. How sad. But that's the reality.
Don’t take your health or energy for granted. Grind while you can.
Related: How To Love Grindcore Culture Even More And Profit
Final Thoughts
Markets are hitting fresh highs, the Fed is cutting, and commercial real estate is finally stabilizing. Now for some extra good news from JP Morgan:
“The Fed has cut rates with equity markets within 1% of all-time highs 16 times in its history. The S&P 500 was higher a year later every single time with an average return of nearly 15%.”
Of course, there are no guarantees when it comes to investing in risk assets. But I’ll gladly take a 100% historical hit rate one year later as a tailwind any day!
To Your Financial Freedom,
Sam
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