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EMILY BIGHAM: Welcome back to MakingCents, the podcast brought to you by Navy Federal Credit Union. I'm Emily Bigham. Thank you again for tuning in, and remember that you can subscribe to this podcast wherever you get your podcasts.
This week, we're going to be talking about mortgages, specifically VA loans. Service members and veterans often hear about VA loans, but they can be pretty difficult to grasp. And so today, we're going to try to simplify those for you so you can understand and also take advantage of their true value.
So today, we have an expert on VA loans, Kevin Parker. Kevin is the VP of field mortgage here and Navy Federal, which means that he manages the team of loan officers. They're member-facing, they're actually on the ground talking to members and, I guess, get a lot of these hard questions. Welcome, Kevin. Thanks for being here.
KEVIN PARKER: Thanks, good to be here.
EMILY BIGHAM: So I have a little bit of a question to throw you off today, just to start the day. Now that we've been working from home for a little over seven months, how was your morning routine changed?
KEVIN PARKER: Much different. So, I do not have the hour and 50 minute commute that I used to have. So that time, I found that I was spending a lot more time laying in bed.
I also have two little girls, a 9 and 12-year-old. So they're in school. So I'm finding myself to be a breakfast chef, and--
EMILY BIGHAM: Nice.
KEVIN PARKER: --trying to get them ready for school as well too. So it's definite changed a bit, but, you know, we've all been able to basically manage through and still add value. Whether it's being a part time father or a professional or working in my pajamas at home.
EMILY BIGHAM: Nice. Well, next time I'll have to have you bring me breakfast.
KEVIN PARKER: Ah, sounds good.
EMILY BIGHAM: [LAUGHS]
KEVIN PARKER: Sounds good.
EMILY BIGHAM: So VA loans. I hear a lot about VA loans. In fact, my mother-- shout out to Patty Bigham-- she texted me the other day and she was asking me questions about VA loans. And I was like, first of all, mom, that's not my area of expertise. I'm going to kick you over to the experts in Kevin's department. But, you know, it led me to realize just how complicated they can be. Because my parents have had a few mortgages in their lifetime, and to still be asking questions about VA loans and their benefits just made me realize how confusing they are. So why do you think that there's this perception?
KEVIN PARKER: Yeah, it's a great question. And I think that's a great topic because we're always out there trying to dispel the myth of VA loans and them being confusing or harder and the perception. The reason the perception is out there is because the purpose of a VA loan is to help members get into a property that's viable, a property that's going to hold value. But also, a product that's going to be beneficial to their specific needs.
And by specific needs, I mean more times than not, a lot of our military members maybe can take advantage of not putting down as much money as what a typical non-service member. And by that, we mean, there are a lot more low down payment options when getting a VA loan. So that right there is an instant benefit, meaning more cash. That's cash that you can use towards buying furniture or fixing up the property, things of that sort.
But the overarching point of VA loan is, that loan is there to protect service members and make sure that they're getting into a financial product that can be beneficial to them, specifically.
EMILY BIGHAM: So when you talk about less of a down payment, you know, there are a lot of mortgages out there that don't require a down payment or a large payment. And so if you had to boil it down to the best benefit of a VA loan, what would that be?
KEVIN PARKER: The interest rate.
EMILY BIGHAM: The interest rate. OK.
KEVIN PARKER: Right.
EMILY BIGHAM: Even in a low rate environment like we're in today?
KEVIN PARKER: Even at the low rate. So I should say, lower interest rate.
EMILY BIGHAM: OK.
KEVIN PARKER: Lower than typically your conventional loan, which in layman's terms means, less money, meaning your monthly mortgage payment is going to be a little bit lower than it typically would for other products. So that's a huge benefit.
Two, right behind it, as I just mentioned, the low down payment, meaning that's a lot less cash that you have to put down. And let's kind of touch on that for a moment, just in terms of just the cash aspect of it. When we provide loans to consumers, the more equity you have in the home, the less risk it is for the institution.
EMILY BIGHAM: The more equity.
KEVIN PARKER: Right. And by that I mean, let's say the home was worth $100,000. And you do a loan for $80,000. So the difference of $80 to the $100, that's the equity in the home, meaning cash, liquid in the home. Worst case scenario, that extra $20,000 is there as a cushion in case the lender has to get their money back. So that's the whole thing about why is it such a big deal putting down cash versus not? And for a VA loan, the VA comes in and helps us, basically securitize our loans. Which means that, if anything goes wrong, the VA is going to be there to back up that loan. That's really the benefit of where the Veterans Administration comes into place.
EMILY BIGHAM: And so that's why the lender is able to give a lower interest rate?
KEVIN PARKER: Correct.
EMILY BIGHAM: Got it. OK.
KEVIN PARKER: Because the VA is backing half that loan for us.
EMILY BIGHAM: So is it more difficult to get a VA loan then because you're going through the lender and then also the VA?
KEVIN PARKER: So ironically, it's not. So you would think so. That's a great question. But that's where the benefit of the Veterans Administration comes into place-- that, not only will we secure half that loan for you, but they're also going to give you a better interest rate. So you're kind of get a double benefit of being able to not put down as much money, keep more cash, and have a lower interest rate, keep even more cash.
EMILY BIGHAM: Sounds good to me.
KEVIN PARKER: Yeah.
EMILY BIGHAM: So then, I guess my question goes back to, then why is there such a perception that they're so difficult to understand? Is that where the eligibility question comes in or what's that perception?
KEVIN PARKER: Yeah, eligibility. And then also, one of the main purpose for the VA loan, once again, is to make sure that we are lending a house that's viable. And by viable, I mean, it's structurally sound, it's not a lemon, you're going to keep that property for a long term.
And so by that specifically, the VA has very specific requirements when they do appraisals, when they do home inspections. And so that's why you're going to get maybe some of the more-- what seemingly can be restrictions around VA loan is because sometimes the VA might require some additional inspections. Or not inspections, but some additional improvements done to the home based off the home inspection. That's where the perception comes from that it may be a little bit harder. But the key--
EMILY BIGHAM: Just because the--
KEVIN PARKER: --thing is--
EMILY BIGHAM: I'm sorry to interrupt.
KEVIN PARKER: No, no. No, no. Not at all. I'll say, but the key thing is working with the lender that's very familiar with the type of appraisals, type of home inspections. Because for us, like Navy Federal, we're specialists when it comes to VA. So we're very used to working with our members and working with the appraisers if anything needs to be done on a property. But more times than not, it's a common appraisal like any other conventional product.
EMILY BIGHAM: So how many times can you take advantage of the VA loan?
KEVIN PARKER: Great question. So the VA allows some flexibility in terms of what you call VA eligibility and we also call subsequent use, meaning you can use it multiple times. But it's really based upon your specific situation.
For example, some will want to get a VA loan for the purpose of an investment property or for a second home. Some would want to get a VA loan-- most want to get it for the purpose of a primary property. And so it really depends upon that person's unique needs, which is why they make you go through the Veterans Administration to actually find out what your eligibility is. And we help our members with that process early, before they even apply.
EMILY BIGHAM: So even if you're eligible for a VA loan, is there ever a right or a wrong time?
KEVIN PARKER: No, I wouldn't say they're the wrong time, because the VA is such a good product. I mean, we really believe in it and think it's a very, very beneficial product. So I wouldn't say there's a wrong time. More times than not, more veterans are going to use it for primary purpose. So that's your overwhelming, I would say, the purpose of getting a VA loan, for primary resident.
EMILY BIGHAM: What are some of the other options that you guys recommend if they're not going to take advantage of the VA loan?
KEVIN PARKER: Yeah, so--
Now fortunately, we're lucky. From the standpoint of, we are a portfolio lender, which means that we keep some of the loans that we issue on our books, meaning we don't sell them to Fannie Mae. And what I mean sell them, Fannie Mae buys loans to help securitize loans. Well, for Navy Federal, we keep some of our loans on books, which means that we have a bit more flexibility, which means that we can create products very specific for unique needs.
For example, we have a program called Military Choice. It's almost very close to what a VA loan is. The only difference is you're not using your VA eligibility. So if we have a member who does not want to use their eligibility for whatever reason, well, we have a different option of our Military Choice program in which the rates-- almost just as good, it's not quite the same. But it's almost just as good as a VA loan.
EMILY BIGHAM: So to me, that kind of makes sense. You know, you want to have options, especially because military members are moving quite often. And sometimes they don't know if they're going to relocate or if they're going to go overseas. Does going overseas or being here in the United States, does that change anything about the VA loans or eligibility?
KEVIN PARKER: No, because it's based off what the property is. So we lend in all 50 states. So regardless of where the member is, the reasons for their mortgage could change. But as long as it's in the 50 states, it doesn't matter where they are.
EMILY BIGHAM: And can you refinance a VA loan?
KEVIN PARKER: Absolutely. So that's was a great question. So there's a pro product called Interest Rate Reduction Loan, and that's a special program. Because every time you do financing, it cost money. All right? There is an appraisal fee, you have to do title, you have to do title work. And all those are different fees of cost associate with the loan. Well, with the Interest Rate Reduction Loan, those costs are reduced because you're not going to have to do an appraisal, in essence, we're saving money on the expense to do your loan. And it's a much faster process. And so we actually have a dedicated channel just to handle our Interest Rate Reduction Loan for our members.
EMILY BIGHAM: So I'm going to switch gears a little bit and kind of talk about what's going on right now. We're in a recession, but the environment's very different from that 2008 housing bubble recession. Have you seen any change in consumer, I guess, member behavior when it comes to home buying?
KEVIN PARKER: Yeah. So ironically, not as much as you would think. So right around March when COVID really hit, we did see a touch of a decline in terms of homes listed for sale. If you think about it, people didn't necessarily want to sell their-- list their home because they didn't want people maybe walking through and doing inspections. And on the other side as well, people buy homes-- they're a bit hesitant of going out there and shopping for new homes, et cetera.
But after March, we started to see home purchases kind of trend back up to normal levels. If you look today, even the same purchase trend is about the same that historically has been. So we haven't seen a huge shift in behavior. Our production from a Navy Federal perspective, still gonna be on target pre-COVID that what we thought. So no, I mean, honestly you haven't seen a big change.
EMILY BIGHAM: So I assume probably with the low interest rates, you guys are getting a lot of refinancing applications.
KEVIN PARKER: Absolutely.
EMILY BIGHAM: Yeah.
Well, that's good.
KEVIN PARKER: A huge number.
EMILY BIGHAM: That's smart, right? That's what you want members and consumers to do.
KEVIN PARKER: Absolutely.
EMILY BIGHAM: Is take advantage, when they can, of what's happening. And so tell me about your first home.
KEVIN PARKER: Great question. So my first home was actually right out of college. So I went to Hampton University down in Virginia in the Tidewater areas. So as you can imagine, it's a lot of military members in that particular area. And at 23 years old, a buddy of mine, we wanted to buy an investment property.
And ironically, the person buying that property was a veteran. And they actually did a VA loan on their side. So I got to experience a VA loan as a seller, in which talking about the appraisal and talking about the inspection on the seller perspective. And so that was my very first opportunity of basically buying a home as an investor and then selling it to a VA member.
EMILY BIGHAM: So, you know, from a seller perspective, I assume that's a lot different from being a buyer. What are maybe some, like, old tips that you can-- or I guess things to know about being a seller on the VA side that members should be aware of.
KEVIN PARKER: Yeah. I think that's a great question. I think one of them is understanding, maybe, what some of the red flags might be for the property type or the type of property or just inspections in general, improvement just in general. More times than not, if the home is viable, once again, structurally sound you're gonna be able to sell it regardless of what type of loan that you do.
But there is some in regards to painting and plumbing that, I think, maybe if you're selling it to a VA buyer, it might be helpful to know. But in more times than not, that's going to be on the realtor. The realtors, that's what they there for. We work very closely with our realtors. A lot of voters are very experienced and they're familiar with VA loans.
But one thing we do recommend for our members, our buyers in general is, you want to work with professionals who are familiar with that specialty. And by that I mean, I use the analogy of, when I want a steak, I'm going to go to a steakhouse.
Same thing for if I want seafood, I'm going to go to the restaurant that specializes in seafood.
EMILY BIGHAM: [LAUGHS]
KEVIN PARKER: Certain lenders specialize in VA loans versus others. I think we take a lot of pride, Navy Federal, working very closely with our military members and their families that we are a VA specialists. More than half the loans that we originate are VA loan. So we're very experienced and we're very comfortable in helping our buyers, helping our members. But also, working with realtors, and working with title companies, working with appraisers and working with homes inspectors.
EMILY BIGHAM: There's a lot that goes into the mix.
KEVIN PARKER: Yeah. It's its own ecosystem. And so that's something that we're very comfortable and confident in working through that process for our members.
EMILY BIGHAM: And your loan officers are across the country, right? I mean, I assume everywhere there's Navy Federal branch, that you probably have loan officers. And does that get a little bit complicated, especially in this current environment, do you see the different markets kind of acting differently or do you feel like across the board things are shifting and trending in the same direction?
KEVIN PARKER: That's a great question. Yes, we do see things typically trend differently, different parts of the country. Whether it's the inclement weather, whether it's the market, whether it's the market prices in that area.
For example, in our San Diego market, we tend to see home values--
EMILY BIGHAM: Patty Bigham, are you listening?
KEVIN PARKER: [LAUGHS] There you go. We tend to see home value is a lot higher in that market versus other parts of the country, whether it's southern Texas or parts of the Carolina's in which the bang that you can get for your buck is actually phenomenal. And so, the trends are a lot different for us, because we also have to go by state laws and all of our loan officers have National Mortgage Listing Registration, meaning they have to be certified to be able to talk mortgages to members. And that's something that we do manage and we take very seriously in making sure that our loan officers are very skilled at really helping our members.
And the great thing about offering mortgages, every mortgage is not for every person. And for us, it's about teaching our members and educating our members. This is a personal finance product. And for us, that's about financial literacy. It's about making sure our members understand because we know at Navy Federal, this is a relationship. And we want them to come back in five years or 15 years and we want to be able to help them for whatever need that they have. And so we take a lot of pride in making sure our loan officers are very comfortable in understanding each member is very specific need.
EMILY BIGHAM: Yeah, and so, if a member moves from market to market, do they stay with the same loan officer or is it typically, you know, you want to talk to the expert in the area?
KEVIN PARKER: So they can. So we actually to give them a choice. We try to let our members interact with us. However they want. So if they want to do it digitally, we have what we call a Home Squad System in which they can apply online. If they want to call on the telephone, if they want to walk into a branch. We want to let them interact how they want interact. And if they want to stay with a loan officer from a different part of country, they can.
A lot of times they might want to work with a loan officer or see a loan officer in person in that market. And we can do it as well too.
EMILY BIGHAM: I'm sure that's shifted a lot too, just given current situation. [LAUGHS]
KEVIN PARKER: Very true. Very true.
EMILY BIGHAM: I don't even want to get into that because I don't even-- that's just a lot.
KEVIN PARKER: Well, the good thing about loan officers too, our loan officers, they'll FaceTime.
EMILY BIGHAM: Oh.
KEVIN PARKER: They'll text members. However members want to interact.
EMILY BIGHAM: Digital?
KEVIN PARKER: Digital, yeah. So we try to make it easy, because we realize we have our loan officers who are part-time teachers and part-time cooks, just as we are. So we try to make sure that we give them the flexibility, and they're able to work with our members, based on what their needs are.
EMILY BIGHAM: That's great. So I have a question back on eligibility. You know, military spouses, would they be in the mix for being eligible? Or how would that happen? Do they have to be on a mortgage with their spouse who is active duty or a veteran? Or can you get into a little bit about eligibility?
KEVIN PARKER: Yeah, so there's two ways to answer that. One, the eligibility is based off the military member, not the spouse, so the military member does need to be on the loan. And certain states require that the spouse is actually on the application. For example, California is a state that if you apply, even in your own name, that military spouse has to be on a loan.
And so it's really state-specific, so that's why it goes back to-- we like having loan officers in different parts of the country, who understand those state-specific requirements, and we can help our members walk through whatever their needs are in their specific state.
EMILY BIGHAM: All right, so we're about to wrap it up here. And I think we've given-- I mean, you've given me, at least, a lot of great information. Do you have any last tips or tricks you'd like to give the audience about VA loans?
KEVIN PARKER: Sure. One, your mom better call us.
Two, once again, go onto our website, whether it's our website, or you have other websites like the VA. You have the CFPB website. There's a lot of information out there to just help people consume and understand.
We realize that buying a home, refinancing a home, is a really, really big, probably one of the most, important transactions, and so for us, we try to be teachers. And there are a lot of calculators on our website, a lot of great tools that members can take advantage of to make sure that they learn as much as possible about the VA loan.
So when they do find their home, we're going to try to make it as frictionless as possible, so that they can enjoy the concept of, what school are their kids going to go to, and the new furniture.
EMILY BIGHAM: There's so many other things to worry about, too, when you're in the military and you're moving from state to state. I mean, I grew up as a Navy brat and even moving overseas, you have to send half of everything you own six months before you get there. The anxiety I felt as an 8-year-old. I can't imagine how would parents feel.
So I think you cleared up a lot of the perceptions, and, to me, I think action relieves anxiety, so I would say just call. Whatever lender you're working with, just call and talk to them about your options. And a VA loan sounds like a great benefit that everyone should be taking advantage of.
So thank you, Kevin, again, for being on today's podcast. And, for the listeners, please feel free to call if you have any questions, and, of course, subscribe to the podcast wherever you get your podcasts. And thanks again for tuning into Making Cents.
NAVY FEDERAL CREDIT UNION REPRESENTATIVE: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information, and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation.
References to, or participation with, the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender.
Navy Federal Credit Union. Our members are the mission.
Episode 3: Understanding the Value of VA Loans
VA loans are a great perk for servicemembers to take advantage of when buying or refinancing homes. In this episode, Navy Federal's Vice President of Field Mortgage, Kevin Parker, makes it clear what to expect when getting a VA loan, including understanding funding fees and navigating eligibility confirmation.
- a discussion of VA loans, funding fees and obtaining a Certificate of Eligibility
- tips on what you should be doing to make the most of a VA loan
GUEST: Kevin Parker is Navy Federal's Vice President of Field Mortgage. A long-time mortgage professional, he has helped Navy Federal members become homeowners for the last 7 years.
[MUSIC PLAYING] Hi and welcome to the podcast Making Cents, brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham, and each week, I'll be taking your questions to the experts, to help you make cents of your money. Pun intended.
This May, during Military Appreciation Month, Navy Federal partnered with Operation Homefront on a special social media campaign asking members to share pictures or stories of themselves or their family members who served. But most importantly, we asked them to share how many numbers of years that they served, because we donated $5 for every year of service shared. And I'm happy to say that after receiving over 1,000 messages and a cumulative total of 14,000 years of service, we were able to reach our $50,000 donation goal.
And today on the podcast we have a very special guest, Robert Thomas. He is the chief operating officer at Operation Homefront, formerly in the US Air Force. Thanks so much, Bob for being on the podcast. How are you today?
ROBERT THOMAS: Hi, Emily. Thanks for the invitation.
EMILY BIGHAM: No problem, glad to have you on. So can you tell me a little bit about Operation Homefront and how you started with the organization?
ROBERT THOMAS: Well, Operation Homefront's mission is to build strong, stable, secure military families, so they thrive, not just struggle to get by, but thrive in those communities they work so hard to protect. So what makes us a little different than some other organizations serving military veterans is we serve the family. And, of course, the veteran, or veterans, that wear a uniform to work every day are key members of the family, but our focus is really on family programs. And if you help a family by paying rent or a mortgage, you're really helping everyone in the family, so that makes us a little bit different.
EMILY BIGHAM: So when it comes to military appreciation, I think you guys are definitely making a well-rounded effort, right? Because like you said, it's not just about those who are serving, it's also about the family. And so you mentioned financial assistance and mortgages. Can you get into a little bit about Operation Homefront and what makes you guys different?
ROBERT THOMAS: Well, we have a whole portfolio of relief resiliency and recurring family support programs that help us accomplish our mission. And each of those programs are targeted on a specific area where military families perhaps need a little help. And by military families, I mean both those on active duty and veteran families.
EMILY BIGHAM: You spoke about the different programs, I think you said relief and resiliency. How many programs do you guys have?
ROBERT THOMAS: Boy, we've got-- we've got about a dozen total programs. We have a handful that are our flagship program. You know perhaps our biggest program is our critical financial assistance program. And that's where we help families who are just in a tough spot financially. And all you have to do is think about what your top bills are every month, and for me, like millions of other Americans, it's I got to pay my mortgage or I got to pay rent, utilities, a car payment, an insurance payment, and perhaps some unexpected bill that pops up out of nowhere, like a home repair. And a lot of families, a lot of military families in particular, don't have a lot of savings. And so when something unexpected happens, whatever that might be, it can really put them in a tough spot very quickly. So what we want to do is we want to be there for those families, provide the assistance that they need, so they get over the tough spot, and they move on to a bright future, rather than doing something crazy like take out a payday loan or run the credit cards way up, and now, it's a downward spiral if you're not careful. So we want to be there for the families. Our military families have been there for us in our time of need, and we want to be there for them.
EMILY BIGHAM: Just the responsible assistance that you guys provide, I think it's really incredible and it's setting service members up for success as well, and their families. And I know you mentioned the critical financial assistance program, but Operation Homefront caught my eye a few years ago. And I live in the area where you guys have some of your transitional housing programs. I want to talk a little bit about that, because that to me is just incredible, the things that you do to actually-- like talk about setting people up for success and the families and taking care of them. Can you talk a little bit about those housing programs?
ROBERT THOMAS: Yes, we have a three transitional housing program. Let's just step through them real quick. The first is our transitional homes for veterans. And for those of us who have been in the military, I kind of think of it like base housing. So Operation Homefront has purchased a portfolio of homes. By 2026, we'll be up to 27 total homes. And what we do is we select families to live in those homes for two to three years, and while they're living in the homes, they'll do all the things that we all should be doing every day, work to pay down debt, increase savings, work on a personal goal. In many cases, those families, their goal is completing some kind of academic degree or technical training program. And then ultimately for most, it's getting that great civilian job.
What we find is a lot of military veterans after they get out, they actually go through two or three jobs before they find that one that becomes their second career. And so we want to provide stable, secure housing for the families. It takes the number one bill they have every month off the plate so they can save dollars and focus on other family priorities without having to worry about housing.
And we pick families that want to reside long term in the locations where the homes are. So for example, we have three homes here in San Antonio, Texas. A lot of folks in the military, especially the Air Force come through San Antonio, very popular place to retire or to start that second career. And the thinking is, we'll put you up in our home for two to three years. You can put down roots, your kids can enroll in school, you can find that great job, you can start that academic degree. And at the end of that period, you don't have to rip it all up like a PCS in the military, when you move across country, lose all your friends, lose your job, start over with a new school, find new doctors in the specialties you and your family need, because the families want to live in these cities already long term. So we pick them families that have a genuine desire to live in those locations. We put them up in the home, and we work to set them up for the future.
Now the best part about this program, I think, is the families are asked to pay a stipend of about $500 a month to get them used to budgeting for housing. And even when you own your home outright, you still have to budget for the escrows, the insurance, all those kind of things, the home warranty we highly recommend. So we ask them to do that. But at the end of the program, let's say at the end of three years, 36 months, we'll give them all the dollars that they contributed to that area back in cash. And so that is a great lump sum that they can use to put down on a house or to service some other family priorities.
But it's a great program. We want to set that families up for success. And anyone who has been in the military knows that that first day when you wake up and you are retired for real and you don't put on a uniform to go to work, it feels completely different. And a lot of folks I know, I'll add my name to the list, you work until the last day, and you try not to think about it, because it's out there in the future, and then all of a sudden it's right on top of you, and you really don't have a great plan. So we want to be there for those families and set them up for success long term. And so I think that's a wonderful program.
We've got houses in about six or seven cities now. We're growing very, very rapidly, trying to find cities where the housing is affordable and military families can live. So for example, we don't have any houses in San Diego, California, because the houses there are unbelievably expensive. So most folks that leave the military cannot afford to live in San Diego, at least not initially. So we try to find locations like San Antonio that are still affordable, because we love for the families to buy their own home when they graduate. It's not a requirement, but we'd like for them to be in a position to buy their own home if they chose to do so. And buying your own home is not the right answer for everyone, but if it is, we want the families to be well-positioned to take that next step.
So that's one of our programs. And of course, all of these programs have the same common themes which are, you're assigned a caseworker, you meet with them on a monthly basis. When COVID is over, we will meet in person three or four times a year, but right now, we're meeting on video calls. Look over your finances, you'll establish a budget, work to pay down debt. All those themes in this program are the same as the other housing programs.
EMILY BIGHAM: I wanted to commend you guys on all the work that you're doing. And coming from the military background, I've lived overseas. I have three siblings, and I know that every time that we had to move, every couple of years, it was always a really big burden on my mom. Even having to move to Japan, you have to figure out, OK in three months we're leaving, so we send half our stuff now and half our stuff later. You know, you have a two-year-old and a 12-year-old, and the two kids in between, you're trying to figure out schools. There's so much that goes on while you are serving in the military that I feel like once you're out, it's kind of like, whoa, what have I done to prepare for this transition? You know the military take such good care of people who are in the military and all the families. To me, the security and the comfort that you guys provide for these military families is something that you cannot even measure. They probably don't even really know how much you're doing for them until maybe they look back, and they're like, whoa, you changed my life. Do you get any of those stories from people who have gone through your program?
ROBERT THOMAS: Yeah, we absolutely do. And like you said, a lot of families-- there's so much going on right around discharge time, you know, your head's swimming. And it takes some time to look back and realize what a challenging time it was for you and your family. So we absolutely want to be there. A lot of our programs are focused on veterans within seven years of discharge.
What we find is, if we can really double-down on those veterans right around discharge time and take care of them and make sure they're off to a bright future, we don't see them again 10 or 15 years down the road in some kind of terrible economic situation. We really want to get everyone started on the right foot.
I get it, I was a military kid myself, just like you were, so I absolutely understand all the challenges. And you know, my dad had just retired when I turned 18, and I joined the Air Force right away. So for me, when I finally retired retired it was completely different. And I still to this day feel like I'm a military guy not wearing a uniform to work every day, because it is different. And I think I'll always be used to the military way of approaching things. But we want to be there and help those families in that transition period, very difficult time.
EMILY BIGHAM: I was in DC a couple of years ago, and I ran into an old family friend in the Metro, and I didn't even recognize him, because he was in civilian clothing. Like someone that I've known my entire life, like very close with this family friends. We lived all over together, and I didn't even recognize. Because I'm like, you're not in uniform! You're completely changed. And you know, he said he had a hard time figuring out what he was supposed to wear in the civilian world, and he had to go to Nordstrom's and get some help.
But you know, it's those little things. It's like you wouldn't even think that those little things are such stressors, but they are. And so I just think it's wonderful what you guys are doing. You mentioned within in seven years of discharge. What are the other parameters, and how can people apply and get in contact with Operation Homefront?
ROBERT THOMAS: Well, each program is a little different. So the transitional housing program, we want to catch families within one year of discharge. We're very much focused on that transition. Our other transitional housing programs are transitional homes for veterans or are transitional housing villages. That's for families going through the medical discharge process. And this, again, is a very tough transition, even more so, because a lot of these veterans were planning on a military career, everything was good, and boom. They're in a training accident, or they go for their annual physical, and the doctor says, Oh, I got your lab results back, we need to do some follow-on tests. And all of a sudden, it's some life-changing news coming out of nowhere.
So we have three of these. We have one in Gaithersburg, Maryland, one in San Antonio, Texas, one in San Diego. They're co-located with the big medical facility. So Balboa, Fort Sam, and Walter Reed in Washington DC. And it allows families to stay together while the service member is going through the medical discharge process.
A lot of times it's very stressful, there may be some follow-on medical treatments that are very demanding, and it allows the families to be together. And in that program, we've got 30 total units, so 10 client units at each location. We pay the rent, we pay the cable, we pay the utilities, and we take that burden off the families. A lot of them have no savings, and it's a very tough time, and it allows families to stay together.
And the families stay there as long as they need to. We want to see their medical discharge process complete. We want to see their VA benefits in place for six months. And we'll work with them to make sure they have a good, solid follow-on housing program. So there's no hard stop to that program.
But that one is just anyone going through the medical discharge process. And every once in a while we have someone that's got a very unique and compelling situation in which case, which is the same in all of our programs, we can kind of provide-- I can approve an exception to policy for really compelling situations that are very unique.
And the last one is transitional housing apartments. This is different yet again. This is for veterans within one to four years of discharge. It's very similar to transitional housing. Right now we're in a beta test. We have two apartments in Delaware. We provide one year of rent and utility-free housing, and we also pay the cable for veterans that are just discharging, and they just need a little stability. They need to be relieved of that big bill every month, paying the rent, paying the mortgage. We put them up for a year, and we provide this a little extra stability, a little debt relief, in the form of them not having to pay rent. And we help them get off to a bright future. So we're hoping to expand that program to other locations in the near future.
Each program targets a slightly different segment of the military population, so the qualifications are slightly different. Now, the best way to know what they are, because I'm certain no one will remember, is go to the website, operationhomefront.org, all the programs are listed there, all the criteria is listed there. And then the best way to know is to apply for the program, and then the caseworker will reach out to you and explain it. So I wouldn't think about it too hard, I would go to the website and apply. I mean that's the best way to know, and then off you go.
EMILY BIGHAM: Great. Yeah, I think that's definitely a good point to make, because sometimes, people are a little bit nervous about applying for things, because they're not sure if it's going to be the right thing, or if they'll hear back, so we'll make sure to put that in the show notes so people know where to go.
So switching gears a little bit, I want to read some of these numbers that I'm seeing here about how much assistance you guys have given, because it is so impressive. So for your critical financial assistance program, you fulfilled 40,000 requests, totaling over $31 million since 2011. That's amazing. And then since the onset of the pandemic, the COVID-19 pandemic, you've seen an increase in requests. And that time you fulfilled over 2,000 requests, providing over $1.3 million in assistance. That's incredible.
And then looking at your housing programs as well, you've provided over $95 million for the permanent homes for veterans. That is a huge number. That's incredible. If people wanted to donate or provide assistance to Operation Homefront, how can they-- how can they get Involved?
ROBERT THOMAS: OK, well, the best way to get involved is go to the website. We've worked really hard to make the website one stop shopping. So if you go to operationhomefront.org, you can learn all about Operation Homefront, you can get the details on all of our programs, you can learn about the leadership of the organization, and you can see who our donors are. 97% of the homes that we deeded, and we deeded 624 homes, and that's where that $95 million number comes from, because that's a deeded value of all the homes. 97% of the families that are in homes are in that home that we deeded to them, or they use the equity from that home by selling it to buy another home. And so it could be, hey, I got a great job 100 miles away, I got to move. My family got bigger, I need a bigger house. Or my favorite one is, I've been working really hard, and I want to live the American Dream, and I want a nicer house with a bigger yard and a two-car garage.
And these are starter homes. The median value of the homes is about $154,000. So these are not crystal palaces by any means, but they're great homes. They're in good shape, they're in good locations, and we want to set the families up for success long term.
EMILY BIGHAM: Well, and the important thing there too, is that you're teaching them the value of investment and the value of assets. You know what I mean?
ROBERT THOMAS: That's right.
EMILY BIGHAM: And it's tough to ever get ahead or ever feel like you're really secure where you are if you're always paying rent, always having to think about the next bill, and if you're putting money towards a home. Not everyone can afford a home right now, but with your assistance, they're able to do that. But just learning the importance of investing and then being able to see that non-equity and being able to graduate to another house, I think not everyone learns that. But I think with military housing, and again it goes back to the military always taking really good care of people and living overseas and living on bases and providing assistance for housing, that's a piece of the puzzle that is probably missing for a lot of people when they're transitioning.
ROBERT THOMAS: It is. The way I like to think about it is you can have this great job, you can be in a great city, close to friends and family, you can find the perfect medical care that you and your family need, the perfect school, but until you have safe, stable, secure housing, none of your dreams can really come true. So housing, and the way I think about it, it's a foundational requirement.
And part of the program, that two years, is teaching the families how to be homeowners. The last thing we want to do is deed them home, and then they don't pay their taxes and their home-- and they lose it. So a lot of our families have never owned a home, no one in their family has owned a home, so a lot of the time is spent teaching, providing some training on, hey, what are your escrows? What are your taxes? How does a tax assessment work? When do I have to pay it? What's the difference between home insurance and a home warranty? What's a homeowner association, and why do I have to comply with that? All those little things, and then part of it is upkeep. If you don't reinvest in your home, like you said, if you don't keep it up, pretty soon something bad's going to happen.
So that two year period, a lot of that is spent coaching the families on how to be homeowners, because once we pass the deed to them, it's theirs free and clear, and they've got to take care of it.
EMILY BIGHAM: That's great. I love that. I want to talk a little bit about you, because you have a very interesting career. You spent 31 years in the Air Force. Thank you so much for serving. That is my life.
But I want to talk a little bit about the Air Force and what you did in the Air Force and how you got into Operation Homefront and what drew you to this community.
ROBERT THOMAS: Well, I was a pilot in the Air Force. My father was in the Air Force, and he was a pilot. So growing up, I had one goal, and that was to be an Air Force pilot, just like dad. And I feel very comfortable in the Air Force. To this day, when I'm on a base, I just feel a level of comfort I don't feel in my own neighborhood. It just feels like home, no matter where I'm at.
And after a while, like any military person will tell you, you can't do your primary specialty, you got to-- you got to go up the food chain and have bigger jobs and different responsibilities. So I was really fortunate. I got to fly for a very, very long time. I had six command tours. I ended up, and a great way to finish, which was in charge of the Air Force Officer Training School and ROTC programs, making sure the next generation is ready to go at 145 colleges and universities and deciding who gets scholarships, for example. Unbelievable, because all these young people are so smart and so capable.
I was really-- one of my last briefings I gave. It was fun. I was briefing the four star and the three stars at the table, and I was at one star at the time, and I said, hey, sir. Truth be told, I know what your GPA was in school, because I've heard you talk about it numerous times in speeches. I know what the three star's GPA was, because I was his roommate. I know what mine was, and truth is, none of us would be competitive for commission today, because the kids are so smart.
Anyway, I really enjoyed my time in the military. And then I think, at the end, I ran into my old boss who is the CEO of Operation Homefront, at a big meeting and asked me what I was up to, and, ultimately, he asked me if I was interested. But as you think about it as a commander, at times, you're talking about the big plan, and you're talking about some military stuff like you might see in the movies, but that's a very small percentage of the time.
Most of the time, in my case, I was in the Air Force, you spend your time taking care of your airmen. And the way I look at it is if you take care of your airmen, you give them decent housing, their paycheck, good medical care, take care of the family, good on-base schools, you know they're going to be able to focus on the mission. And there's nothing worse than being downrange on a deployment and a young airman is worried about the safety of their family back home or the medical care their kids are getting, they can't focus on their jobs.
What worked for me and what works for a lot of successful commanders is you focus on your airmen, and they'll take care of you. And so this job was just a natural extension of that. I'm doing the same exact things I did on active duty in many cases, taking care of airmen that have hit a bump in the road, they just need a little bit of help, and we want to work to make sure they can take care of themselves. I mean this isn't charity outright where I'm just going to give you this cash stipend. No, I'm going to help you out. I'm going to make sure that I give you the assistance you need so you don't get in this situation again. And I'm going to applaud you when you have that bright future and the house on top of the hill later on.
EMILY BIGHAM: And I think that's where it goes. And when you're providing a little bit of assistance, and you're like, OK, well, you know I'm going to give you this, but then I need to see that you're making the right choices with it. And I think that's another important part of what you guys do is not only do you provide the assistance, but you know you're also like, hey, I want to see the documentation. I want to see that you have your VA benefits all ready to go, because people can say they do, but then maybe they don't. And I think you're looking out for their best interest when they're maybe on a very emotional point in their life. I don't know if you guys have certain things in the Air Force, but it's one of those like teaching moments I feel like. And something that I try to also do at Navy Federal.
Back to the transition from the Air Force to Operation Homefront, did you do anything in between those two? When you were transitioning out of the Air Force, was there a time in between that, or how did you go for you?
ROBERT THOMAS: No, this is my first civilian job. So I think that if it all works out, when I'm said and done, I'll have had two jobs in my life, Operation Homefront and the US Air Force. But it was a difficult time. Like a lot of military families, I was going to-- I retired on the 31st of December, because it had to do with a calendar year, and strength issue, but I didn't want my kids to have to change schools again.
I mean, your military listeners will get it. So I sent the family to Delaware so the kids could start school on time and wouldn't have to change schools yet again. My little boy had been, by the time he was in sixth grade, he had been to five different elementary schools. So the poor guy, you know the last thing I wanted to do was to do that to him one more time. So I finished up at Maxwell Air Force base, and then I joined the family in Delaware.
We got a small condo to live in, because I wanted to be able to say yes to any opportunity that popped up. And so I didn't want to buy a house and be anchored to a certain location. I wanted to be able to move if I needed to. I didn't want to burn my last military move.
And I was applying for jobs all over the place. I applied for a job in Alaska, which I thought would be just fantastic. I was looking at possibly going downrange again as a contractor. And then, fortunately, I ran into my old boss, who was very familiar with me, I had two tours with him, and asked me if I was interested in the nonprofit space. And, of course, I said, you know, absolutely. I'm actually ready to go and do just about anything. But when I heard more about the position, I thought, man, I think I could really do a good job in that position.
So I ended up at Operation Homefront and moved back to San Antonio seven miles from where I was born at Fort Sam Houston. You know, I never thought that would happen, but here I am, right back where I started and working with military families every day. So it's just a wonderful job.
EMILY BIGHAM: It probably makes you feel good, right? You're continuing to give back to the military. I love working at Navy Federal, because I just love helping the military. And if I'm not going to be in the Navy or in the military, then I think the second best is Navy Federal.
But also remind me, I need to introduce you to my dad, because he would definitely move to Alaska if he had the choice. He's actually going on a fishing trip next month. He does this like big fishing trip in Alaska with all of his friends, and they just, I don't know, fish for like 10 days, and he doesn't even eat fish, but has the best time. So we'll have to connect on that.
Yeah, two jobs. That's pretty amazing. And your former boss is very smart, because you are the perfect person for this role. Again, thank you for your service, and thank you for everything you're doing for the families.
So I know we talked a lot about Operation Homefront, a lot about how you got into Operation Homefront. What are the plans for the future for Operation Homefront?
ROBERT THOMAS: We want to be there for the military families in the areas where they need help. So we've got to be flexible. I think families are going to always need some financial assistance. I can't see the day when there's no longer a need for that program.
We do want to be there in the housing space for the reasons I talked about, because that housing is so critically important to every single issue you do. I mean, try to think of a situation where you can be successful if you don't have safe, stable housing. It just doesn't happen. So we want to be in the housing space.
We want to be there in the recurring family support space. Our two big programs are Back to School Brigade, where we give backpacks full of school supplies to military kids. Our big partner there is Dollar Tree. And we want to be there in the holiday meal space, where we give families a holiday meal. And in those recurring family support programs, we focus on our junior enlisted pay grades. So pay grades E1 to E6, because they have the smallest paychecks in the Department of Defense, they tend to have young children in the house.
And those programs are really financial relief programs in a lot of ways, because the families are going to make sure the kids have the school supplies they need, even if it means cutting back in other parts of the budget. So we want to be there for the families, give the kids a backpack full of school supplies, provide some financial relief to the families, and just say thank you for your service.
EMILY BIGHAM: That's amazing. I was able to participate in the holiday meals with Operation Homefront a few years ago, and it was such an amazing experience just to see the happy kids and the families, and everyone coming in, and just take advantage of all the little games and the different activities that you guys had. And then being able to leave, you know the parents are walking out with a full holiday meal, all the things you could possibly need. So everyone comes in, and everyone leaves happy. And it was a really fun activity.
ROBERT THOMAS: A funny story, well not a funny story, but the program started way back at Fort Drum, and there was an executive from Beam Centauri, the makers of Jim Beam whiskey. He was standing in line behind a young military spouse at the grocery store, a couple of small kids, trying to keep the kids under control checking out, and you know, you've been there before, all of a sudden, the total of all the food you bought is way more than you realized. And this young mom, she didn't have enough money in her checking account to cover it. And so the exec from Beam stepped up and said, you know, I'm going to take care of this for this family.
And then he took that back to the boardroom and said, hey, there are military families out there that are really struggling, and they want to do something special around the holidays, we've got to get more involved. And so that's how the program started. And traditionally, it started out around the Christmastime, New Year's time, and now it's really covering all 12 months of the year. And we try not to have all the programs in the fourth quarter, but we try to have some in the summer, some around Mother's Day, we had a big Mother's Day program this year. But we want the military families be able to enjoy something a little bit special at certain times of the year. And for many families, they just don't have the budget to do that. So it allows us to step in and give them a little something extra.
EMILY BIGHAM: Yeah, it's really nice. I had a good time at that holiday meals activity, and I'd like to keep-- I would like to do it next year and in the future. We're going to wrap up here in a little bit, I know that I've had a lot of your time, and I really appreciate you coming on. We've covered a lot here, you guys do a lot. And I just wanted to mention one more time that the best place to apply for assistance or to help Operation-- or to get involved and provide assistance to you guys is on your website operationhomefront.org. Are you on social media as well? Facebook, Instagram?
ROBERT THOMAS: We are. You can find all the links right on the website. Once you register for the first program, any of our programs, now you're in the system, so to speak. So now when you come back, let's say you register for the back to school program, when you come back to register for the holiday meals program, you're already in the system. So now it's just one or two mouse clicks away. So the website is the key to success. Just go to the website, get in the system, see how we can help you out. I mean, we always would like to do more, but like every nonprofit out there, you know, we have to live within our means, so to speak, but we do want to help as many people as we can, and the website is the key.
EMILY BIGHAM: Well, and again, to tie it back to Military Appreciation Month, thank you again for all the things that you're doing. We appreciate Operation Homefront and everything you're doing for the military. Is there anything else that you would like to touch on or cover before we wrap this up?
ROBERT THOMAS: Well, I'd just like to thank Navy Federal Credit Union, and they've been a partner with ours since 2015. For a long time, they've contributed directly to our critical financial assistance program, they've contributed to back to school, they contributed to holiday meals, they're one of our partners that make all the other things possible. So I just want to give credit where credit's due and thank Navy Federal for all they're doing for our military families through Operation Homefront and through their normal business operations every day.
EMILY BIGHAM: Wonderful. Thank you so much, and thank you so much for being on the podcast today, Bob. And I hope you have a wonderful Memorial Day weekend.
ROBERT THOMAS: All right, you too, Emily. Thank you for giving us the opportunity to tell everyone a little bit more about our programs, and we hope they apply so we can give the families the help they need.
EMILY BIGHAM: Absolutely. Take care.
NARRATOR 1: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation. References to or participation with the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender.
NARRATOR 2: Navy Federal Credit Union. Our members are the mission.
Episode 9: Navy Federal and Operation Homefront Celebrate Military Appreciation
In this episode, we’re joined by Operation Homefront for a wrap-up of our Military Appreciation Month celebrations. Hear from Robert Thomas, Operation Homefront’s COO, as he shares about the organization and their mission. The conversation also touches on military lifestyle and personal finance, and the key moments in servicemembers' careers. Tune in to hear more and visit operationhomefront.org.
[MUSIC PLAYING] EMILY BIGHAM: Hi. And welcome to the podcast, MakingCents, brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham and each week I'll be taking your questions to the experts to help you make sense of your money, pun intended.
Hi, and welcome back to MakingCents. Today on the show we have Robert Frick. He is our corporate economist here at Navy Federal. Bob, how are you?
ROBERT FRICK: I'm having a good day. How about you?
EMILY BIGHAM: Oh, I'm having a good day as well. The sun is shining. Weather's turning around. I feel like people's attitudes are turning around. And feeling good.
ROBERT FRICK: Yeah, good. We just had our driveway topped. It's nice and black and perfect and smooth. And when you live in upstate New York as long as I do it, that's like the epitome of home remodeling is having a nice driveway. So I am unnaturally happy about my new driveway.
EMILY BIGHAM: Nice. That's awesome. Yeah and I wonder how long it's going to take until the pollen starts to coat it because I was feeling really good about my very crisp clean new car and then two days later it was covered in pollen. But I did just get it washed so it was kind of like you just feel so good about having something just redone or washed or taken away and you can start fresh, I kind of feel like that's the attitude of the United States right now.
ROBERT FRICK: Now you totally ruined my good feeling because I realize I'm going to have a yellowish green driveway now probably for the next three years. So thanks.
EMILY BIGHAM: Well, you know what, I mean, hey. We also have those afternoon thunderstorms. It is the spring on the East Coast. So every day it'll clear it up. But so I do have a little bit of an agenda for us today. Typically Bob I like to just kind of chat with you because I feel like you and I just have so much to talk about and I love all of the topics that you cover here at Navy Federal. And before I kind of go over the agenda, do you want to for the listeners who are maybe first time listeners or we haven't spoken in a very long time, do you want to talk a little bit about what your role is at Navy Federal?
ROBERT FRICK: Sure. So I mean corporate economist. And I talk a lot to the media about our view of all things that we do. Auto loans, mortgages, interest rates, all that stuff. I also do a lot of internal reporting and I speak to people around the company about the one specific to their particular businesses. I was a business journalists for 30 years and that's my background. And kind of how I got into this role is I used to cover all of these things that we do home, auto, credit cards.
EMILY BIGHAM: I was thinking about why I have so many topics that I want to cover when I talk to you and I think it's because you take on so many different perspectives when you're pulling together the various reports or just the different things that you do. Because not only are you covering what's going on in the economy at a high level so we can make sure that our lending products are gauged in the right direction, but also you think about the consumer. And in the past year consumer sentiment has probably been all over the place a little bit. Can you talk a little bit about what you've seen there on the consumer side?
ROBERT FRICK: Oh yeah.
EMILY BIGHAM: Economics?
ROBERT FRICK: Yeah. Well, consumers were very depressed for a long time. We actually never hit the bottom that we did right after the housing bubble because that crash actually affected many more Americans it just wasn't as steep as the COVID crash. But just in the last month and I'm sure we're going to get back to this theme over and over again, consumer sentiment is way up. It isn't back quite to pre-COVID levels, but it's going to get there in the next couple of months I feel sure. Because vaccines are out, the weather's warmer, people have an incredible amount of money. Not everyone, but most Americans are in good financial shape right now because of all the stimulus.
EMILY BIGHAM: I've done a lot of research on this lately and I've been listening to other economists as well talk about this and it's a little bit confusing to me the consumer sentiment. I mean, it makes sense that given all of the cash that the government's been handing out consumers are happy. They do have a lot of money like you said. But is that almost a false sense of security because that is money that is just being printed by the government?
ROBERT FRICK: Well, that gets into the whole idea of deficit spending. All this is going to come out to bite us that we're another $5 trillion in debt. And I actually just did a very short position paper, white paper, on that. And it is true that our level of debt has only been this high right after World War II when we went into debt to pay for the war. But there's a huge difference because interest rates are so low now the US government is actually paying less on its debt than it was five years ago even though we've added trillions. So you have to balance those two things.
Yeah, our actual level of debt is higher, but what really counts is how much do we have to pay in interest? And that's relatively low. So the future is uncertain. So I'm not going to say it's never going to be a concern, it probably will be a concern, but not in the next few years at least.
EMILY BIGHAM: Right. So I was thinking about that as well because it seems like short term things seem really good. But when you are a consumer or a small business owner and you're trying to plan strategically maybe five years, 10 years, is that a cause for concern? Like how are you supposed to make large financial decisions like a mortgage that's going to be a 30 year mortgage, how can you feel secure in those big financial decisions? Or for instance my parents are thinking about selling their small business. My dad's a physician and they've been going back and forth on this. And I think they're just a little bit reluctant to make a big decision either way because they're not sure again what's going to happen in the next three years, five years. Do you have any advice for people in that topic?
ROBERT FRICK: Well, we are at a time right now in which there's a lot of uncertainty because we've never been in a time like this. We've never had to recover from such a deep depression. We've never been coming back from a pandemic and we're not out of that yet, although we're making good progress. So there's a lot of uncertainty. I get that. What does the next three years look like? In the next three years looks good. For one thing, we're going to be getting jobs back although it's probably going to take a couple of years until we get back to pre-pandemic levels.
For another thing, yeah, we went into a lot of debt. But that's not going to bite us in the next few years. And that means that people are going to have a lot of money. The things I worry about is how is the economy going to restructure? So if I, for example, own commercial real estate that wasn't retail at least I'd be pretty concerned right now because a lot of people have left their offices never to return. On the other hand, there's a lot of great opportunities right now. You mention small business. There have been more small business filings, filings to open small businesses, in the last six months than at any time in recorded history. So a lot of people see that they're going to be able to rebuild. And that's America, right? That's the entrepreneurial spirit.
A lot of people see that they're going to either be able to restart their own business, start a slightly different business, or start a new business to take advantage of all this money and all the boom times. Which are certainly going to be this year where we're going to have at least a 6% GDP, which is historically high, and into next year. So if I were making decisions right now I would wait two years and then after that who knows. But we never know what's going to be three years out. I mean, a year and a half ago we had no idea there's was going to be a pandemic. So good things can happen, bad things can happen. But we know the next few years are going to be good.
EMILY BIGHAM: So back to the topic of new businesses. The amount of new businesses that were started I guess during the pandemic, was that a direct reaction to the PPP loans?
ROBERT FRICK: No actually that was something different. Really what it was was people recognizing-- now this is America's entrepreneurial spirit that businesses have to change. They're going to be new business opportunities. I may have closed my business, but I'm going to reopen it again in a different guise. Yes, there are certain segments of small business which are really been hammered. Restaurants, for example. But there are other aspects of small business. I mean, internet commerce which are absolutely booming. And if you're in one of those businesses or if you're starting one of those businesses, the next few years are going to be a great time to launch a new venture.
EMILY BIGHAM: Is that kind of what you mean when you say economic restructuring? So for example, if you have a small business that you started 20 years ago and maybe now is a good time or the opportunity to pivot into something that's a little bit more relevant.
ROBERT FRICK: You should at least retool. I have a couple of friends who are small business consultants, small to medium sized business consultants. And what they've been counseling their people to do is take a breather. Get your PPP loans if you need them just so you can kind of tread water for a while. But think about what the new economy is going to look like. And for a lot of them that means their whole sales function is going to change. It's going to move to the internet. So they're going to be hiring a lot of programmers.
A lot of them, if they can, are thinking about if they make a product which is used in the home or might be used in the home really play that up because people not only have been nesting while they've been at home during COVID, there is going to be I think and a lot of people think it's going to be much more focused on the home, where you live, how your home is. I have a cousin who owns a hot tub business. And they are booming right now. They can't be doing more business. And you'd think that would be letting up now, but it's not.
EMILY BIGHAM: I wish I had space for a hot tub. Let me tell you.
ROBERT FRICK: I wish I had a wife who wanted a hot tub.
EMILY BIGHAM: [LAUGHS]
ROBERT FRICK: We have the space.
EMILY BIGHAM: That's funny.
ROBERT FRICK: But not the will.
EMILY BIGHAM: Well, I think people just spend so much time at home. Like I'm sitting we're at home right now and I'm recording this podcast. And I'm kind of looking around like, god, I've been looking at that couch for like 13 months now. And it's a nice couch, I'm kind of sick of looking at it. So I wonder if that's part of it. But then also what's going to happen when people start going back to work? How is that going to impact the economy? The price of oil is going up. There's a lot of things that I want to be really positive about, but at the same time there are some concerning reports that are coming out. I mean, first of all, we have the rising cost of goods. But then also if it's transitory and it's coronavirus and we're kind of a global economy at this point imports, exports, the rising cost of oil. If there are other countries who are impacted by a second wave or if they take stricter measures than the United States, doesn't that impact us also? So how much control do we even have over inflation and rates at that point?
ROBERT FRICK: That's a really good question. And the answer is not much. And the Fed for years was trying to get inflation up to 2% and they just couldn't do it. They kept rates low. They kept shoveling money in. And they couldn't get inflation up to their target. And 2% is kind of like a really good pulse. That's like 60 beats a minute, right? It's not too high, it's not too low. It shows the economy is on an even keel.
So the Fed really can't control inflation that much. They can use kind of these rules like inflation goes up, they jack up interest rates and that slows down the economy. And that's kind of like giving medicine to a patient. The medicine works but the patient dies. It's just not a good strategy. So the Fed is changing that strategy.
But you mentioned just speaking about inflation. It's not high yet. We just had an inflation rat this month or this week rather. It's not up. It's low. It's not even 2% yet on an annualized basis. So the inflation barons are saying all this bad hyperinflation is coming. There's no evidence that's going to happen. And you mentioned international. Globalization keeps our prices low. Think about this. When we import goods from India, China, Mexico, Vietnam, those are cheap goods. And that essentially means we're importing deflation.
Above and beyond that, we're exporting jobs which is not good. Right? We're exporting jobs to places like India. I happen to know someone who is in charge of essentially collapsing a back office unit of 40 people in Virginia and opening a unit of 40 people in India working at 1/10 of salary. So not only are we importing cheap goods which keeps inflation low, we're exporting higher wages which keeps inflation low. Again, that's not good for the people lose their jobs.
But if we're just talking about inflation, I'm not worried about inflation. It may spike. It may go up to 3% for a couple of quarters. Fed's going to hold firm. And then when the economy boots up, there's always inflation because there's shortages and prices get bid up. Rental car prices are going through the roof. When airlines really start flying again, airline tickets are going to be fabulously expensive.
EMILY BIGHAM: Oh, they already are. Let me tell you.
ROBERT FRICK: Are they? OK.
EMILY BIGHAM: I just flew back from San Diego and the price of my ticket, I was like, I am upset. The last time I came here it was so cheap and there was no one on my flight.
ROBERT FRICK: Right.
EMILY BIGHAM: This time it was way more expensive and there were people on my flight. Which, you know, it's a good sign that people are out and about and like you said spending money. But it was just so funny. I was like, yeah, people probably forgot what normal life was like and now you're going to be seeing-- I mean, the line at Trader Joe's the other day was like wrapped around. It was shocking.
ROBERT FRICK: Well, if you drive south as often as we do we have two of our three daughters now live in Wilmington, North Carolina. And my wife just took a trip down to see our daughters because she's vaccinated. I am not so I had to stay home. And she got caught up in an hour and a half gridlock. And she was complaining about it and I said, yeah, but you know that means the economy's coming back. So it's a double edged sword.
EMILY BIGHAM: It is. It is a double edged sword. But it is really nice to see that people are out and about and spending money and going to restaurants. And that's how it's supposed to be. That kind of environment and atmosphere is what makes people happy.
ROBERT FRICK: And there's so much pent up demand for that stuff. They call it revenge spending. And I'm not sure that's a good term, but the idea is people who are so hungry for services travel, restaurants, et cetera, et cetera, in-person commerce basically face-to-face commerce and travel, they're just ready to spend. The issue is they're not going to be able to spend because a lot of those services aren't going to be quickly available. Or as with airfares, when they do come back they're going to be so high that people aren't going to want to spend on them. And obviously they'll come down in time. So there's a lot of things that are going to keep-- this gets back to your inflation question. There's a lot of things that are going to keep people from spending as much as they want and that's also going to keep inflation low.
EMILY BIGHAM: So I understand the part about different services not coming back. And I mean, that makes sense to take time to hire. And I think I saw that the job openings number is at a record level as well. So to me that means that businesses are coming back and they're posting jobs. But people are not taking those jobs. I do think that that's going to become a competitive market.
ROBERT FRICK: I think people look at the the JOLTS number, those job openings numbers and read them wrong. And you can have crazy high and crazy low job openings numbers and they don't really mean much of anything. You have to really parse those numbers. So the fact that there's a lot of openings out there and people say, oh well, there's no one there to get them. There's no one there to take them. Well, by in large that's not true. A lot of times people just post a job and they're just fishing for someone to hire. And they don't even expect to hire them or they have to post it because HR says they have to post it.
So I don't look at those JOLTS numbers now and think people don't want to work or people don't have the skills. It's not an epidemic of problem. It's not an epidemic kind of problem. It's just what happens when an economy boots up again. It solves itself in time, it always does. The thing I worry about as far as jobs goes is there's a certain number of people, 70% of workers, who have good jobs. Remember my example people work in back office operations. This is for a big consulting accounting firm. Those are gone. Office worker jobs are gone and [AUDIO OUT] because only a portion of the people who don't work in offices anymore are going to go back. People are going to need to be retrained, education and training. And that takes time.
Also, there's a lag between when people realize their job is gone for good and when they really get on their horse and start looking for a different job and get new training. That takes time. So that's why it's going to take at least a couple of years for us to get the jobs back that we lost. Not because the economy isn't reopening fast enough, it's because the nature of work has changed for many Americans.
EMILY BIGHAM: Well, you bring up a really good point. Well, first of all, I would like to say that you are definitely calming my nerves because a lot of the things I've asked you about you don't seem to be very worried about so that makes me really happy. And I need to find similar I guess resources or sources to read. I need to read what you're reading so I can sleep at night. But as far as the different jobs that are coming back, have we seen a rise in automation in the past year just because of the fact that human beings weren't necessarily able to do certain jobs because of the restrictions? Have they found ways to use technology instead? And is that replacing human beings in that?
ROBERT FRICK: That's common. And you go to CVS or even a lot of grocery stores and there's self checkout.
EMILY BIGHAM: It's good too. I mean, the self checkout has really improved.
ROBERT FRICK: Yeah. I have to agree. Self checkout and Apple Pay, man, that is wonderful. And there's a lot of automation. And industrial automation, that started years ago. And that's going to continue. It's not going to accelerate particularly. I have a lot of contacts all across the country in different forms of commerce. And I talk to people in manufacturing. One of them is my old roommate from college. And I asked him about how's their automation going? And they're pretty much fully automated by now. And the people they hire have computer skills to set up the machinery that's going to do the work. And they have quality control experts. So you have statisticians.
So the days of them hiring someone to slap a weld on a pipe or bend a pipe or fabricate something, those days are gone. But the employment level is gone. But the people who work there now have high skills which are transferable and they're constantly getting upgraded. And that's a much better job. I mean, I used to work in Rochester, New York and there was two big automotive parts manufacturing plants there. And I'd go there and I'd interview guys and women there and they just were miserable. And their jobs seemed miserable to me. And when their jobs started changing and becoming more technical and a lot of them would get say associate engineering degrees, two year engineering degrees, which allowed them to do higher skilled technical work within manufacturing plants, much happier. Much more money. And those who didn't want to do that, they had to go on to other jobs. Sometimes lesser jobs, sometimes different jobs.
So I'm not worried about automation so much as I am just these huge changes in how people are going to be working. Again, office workers going to be way down. Big shifts in health care workers. You can pretty much go down the line and you can see which occupations are going to be most affected by COVID. And my back of the envelope calculation is probably about three or four million Americans up the back who aren't going to have those jobs. I mean, restaurant workers. There aren't going to be as many restaurants because we've gotten used to take out.
I don't know about you, but now that we've spent a lot of time and money in our house, I'd much rather get good take it out and sit out on our deck and have a couple of friends over than go through the restaurant experience which is hit or miss. Right? I mean, I love a good restaurant.
EMILY BIGHAM: Well, I mean for me it's less about my wanting to stay at my house it's so nice, it's more about my not so great cooking skills and the fact that I'm sick of cooking for myself to be honest. I've tried. I've tried to make that one of the things that I improve while I'm at home and spending all this time at home, but I just have the same things that I go to. And it is really nice to have different cuisine. So I mean, that is good news about the jobs. But if I were in someone's shoes who lost their job due to COVID and then let's say I'm not going to get it back because of technological advances, but what should I be doing? I mean, yeah, you can say, oh, well, just go and learn some new skills or up your skill sets. Well, how? How do you do that and where do you start? And do you have to go through formal training?
ROBERT FRICK: The first thing and this is a behavior problem, especially if you have a passion for certain kind of work, you have to get over the fact that you love your job but your job or your industry no longer loves you. And so you've got to move on. You've got to do something different. I was in the newspaper business in the 1990s. And the newspaper business was collapsing as the internet was rising. And I got the best piece of advice I ever wanted to get I could ever have hoped for. Because an analyst said, look, you can get another job. You can go be a business editor somewhere else. But then that job's going to disappear unless you move up to the New York Times, which I didn't want to do. You're always going to be sitting on a shrinking iceberg. It's time for you to get out.
And I went into magazines after that. And that lasted for about 15 years and then that iceberg started to shrink. But if you can't find a job or the job you find doesn't pay as much as it did before COVID, don't expect that's going to get any better at least no time quickly. The thing to do is just get online and Google where the jobs are. And start at your local community college or see if there is a course you can take online and reskill. But make sure when you reskill that once you get that skill, there's going to be job ready for you when you get out in six months or a year or a few years.
I've been giving that advice for many, many years. There comes a point in which you're basically in a situation that is not going to work for your personal prosperity. Sometimes it's where you live. Again, I was in upstate New York in Rochester. And tens of thousands of Kodak jobs disappeared and were never going to come back. And tens of thousands of Kodak workers wished they would and sat around and collected unemployment. And then finally either moved out took lesser service jobs or reskilled. And the ones who reskilled were definitely the happiest. I've had to move many of them and I know a lot of them. But they made that decision.
Sometimes you can't make incremental changes and expect to have a big improvement in your life. Sometimes you have to make big improvements in your life to expect big changes. And a lot of Americans are going to be facing [AUDIO OUT]. In fact, I tweeted the other day, Robert Frick NFCU, that I wished journalists, again, I used to be one, I wish business journalists would start doing stories on people who have essentially been COVIDed out of a job and what they're doing to change professions. So I'm right there with you. That's a really good question. And that's the best answer I can give. And the answer, there's no easy solution. Play the lottery. Win the megamillions. But there's no easy solution. Sometimes you have to make a big change and even take some risk in order to improve your situation.
EMILY BIGHAM: I think part of it too is that people are used to getting things immediately.
ROBERT FRICK: Yes.
EMILY BIGHAM: And that kind of goes back to automation, technology, take out. I mean, you can see where the driver is on the app delivering your food. So people are used to just immediacy. And I know I tend to be a little bit impatient. But I do know that when it comes to my job and skill sets and things like that, I'm always looking for ways to pivot. And I know small incremental changes or improvements will eventually get you to where you need to be. I think people expect immediacy. Even with things like the stimulus checks, that was a direct deposit into your bank account for most people. And it's passed and all of a sudden see a ton of money in your account.
I mean, how are you supposed to go-- and that also goes back to the psychology behind it. Right? I mean, you get that immediate feeling and the dopamine and the serotonin and all of that. And then you have to think about, OK, well now I'm looking for a job. And I've had to do this many interviews and these people didn't call me back. And that's just something that you have to do. That everyone has to do. So I'm going to switch topics from that. I'm staring at this whiteboard that I have where I have all of these things I want to talk about. But I do want to pivot a little bit to housing because this whole renting versus buying, the housing market, the soaring price of houses, rates are still low. What's going on there?
ROBERT FRICK: Well, the bottom line is after the housing crash 2008, 2009 a lot of home builders went out of business. In the decades of the 2010s, so basically the last 10 years, fewer houses were built in the US than were built during the worst decade to that point, which was the 1940s when everybody was building stuff for the war effort. So there's a tremendous dearth of homes in America right now. And people want homes. There's still millions of Americans who are really in tough shape. And we have done I think as an institution everything we can to help our members who are down on their luck financially. But there's still millions of Americans who are down on their luck, but most Americans aren't.
And most Americans are making more money now than they did before the pandemic. So there are a lot of people with a lot of money. They're buying what houses there are. Those can't build them fast enough. They're restricted because lumber, land zoned for building, and labor, the three L's we call it, are all working against building houses more quickly. So we're not going to build ourselves out of this anytime soon. So the housing situation is not good.
I saw an amazing statistic, which I should have known because I talked to our mortgage people, but it's something like a third of houses bought haven't even been built yet. People have bought the land and contracted with a builder. Like my oldest daughter, she and her husband essentially became their own general contractor. They bought a lot from someone who couldn't afford the payments anymore and they hired a builder and they built this beautiful house. That's getting harder and harder to do.
So I don't have any good news when it comes to housing. There's been a lot of forbearance's, people don't have to pay the rents. That's going to end. If you want a house, you have to be incredibly aggressive. And the thing I tell people is if you can't afford the house you want, buy a house with potential. The house I'm standing in right now, it wasn't nearly as nice as the house we left in upstate New York because housing in the D.C. area is so expensive. There are a lot of things we looked at and cringed.
Well, over the years we've redone everything. And it's a nice house now. And we didn't have the money at first and we just had to save, but we got into a house and now our house has tripled in value as all houses around here have done in the last 20 years, 25 years. So mortgage rates are not going to get any lower, but mortgage rates aren't the biggest thing you need to be thinking about right now. You need to be thinking about a house you can afford and buying it before prices go up even more. Prices were up 15% in the last year. That's incredible. I mean, that is housing bubble rates.
EMILY BIGHAM: Is it bubbled or is it demand?
ROBERT FRICK: Well, yeah, that's a good question. And I was just going to say there's a scarcity and that's supply and demand. So the supply is low. And the demand is strong, but it's not crazy like people flipping houses and stuff in the 2002 through 2005. So it's not crazy bubble stuff. If there were more houses on the market, I'd say we were in a housing bubble right now. And there may be some contraction.
EMILY BIGHAM: Well, so is it also potentially like a shift of-- and I have no idea there's even a way to measure this, but it could be there are people who are in their current home and they've also purchased a new home and they're waiting to move in. But then how do I even phrase this question? The percentage of I guess the rate of people who are looking to buy or have bought a new home and are moving, is that just really, really high abnormally high?
ROBERT FRICK: That really isn't a factor. Americans are moving at the lowest rate in history right now.
EMILY BIGHAM: OK, never mind.
ROBERT FRICK: Yeah and there are a lot of reasons for that. A lot of baby boomers are retiring, they'd like to move but they can't because the place where they wanted to move, the housing prices have gone up. But also COVID has had a real-- I believe, and there's scant evidence to support this point of view, but I just have some anecdotal evidence. People around my age, I'm in my 60s so, have been super paranoid about COVID and rightfully so. And so they've been sheltering in place and not even thinking about moving.
We have neighbors across the street two doors down good friends of ours who've been planning their move forever and they're moving to North Carolina the Raleigh area and they are finally moving in a couple of months. But what they had to go through, they bought a house that was still under construction. They sold their house here. There going to be kind of living I think in one of their sisters homes for a while. But they've had to jump through all these hoops just to make this work because they've delayed because of COVID. And both of them are older than I am in their later 60s. So they got their shots and now they feel safe to move.
I have a feeling and we'll see if it's true or not that we're going to see a lot of existing homes come on the market this spring with vaccinations. I wish I could say that because COVID levels were so plummeting, but they're not unfortunately. COVID levels are actually up and COVID deaths are actually up. Obviously not at levels we've seen before, but that's worrisome. There are a lot of reasons for that but I think we'll get licked by the end of the year but COVID's still an issue.
EMILY BIGHAM: Well, and that's another thing that is again, something I think that might be in the back of people's minds. Is like, OK, well, I want to take this big step to finding a new job and learning new skills. But that uncertainty part of it, I mean, that's just killer for a lot of people.
ROBERT FRICK: I think COVID is an uncertainty for some people. I really think we're going to see, I know we're going to see a boom 2021 and I bet it extends into 2022. It depends on what industry you're in. It depends on if you have a job or not. It depends if you're one of those people with more savings as opposed to people who have exhausted their savings and have run up debt. It depends on your individual situation. But I would not let if you have a job and you're in a fairly stable industry, I wouldn't worry. If you don't have a job and are worried that your job is gone for good, I'd start looking for a new profession.
EMILY BIGHAM: Well, Bob, you've made me feel a lot better today just let me tell you. So we should have these conversations more often.
ROBERT FRICK: I can't believe it because usually the roles are reversed. I'm the doomsayer and you're saying, why are things so bad, Bob? But no, things are good. Six months ago I predicted that we'd have fewer jobs in December and everybody thought I was crazy. And we did it. And I predicted that along with the third COVID wave we were going to see a tremendous spike in people losing their jobs and we did. But now everything has changed. We've seen a real sea change in the economy. And that's going to continue for at least a year.
EMILY BIGHAM: Another thing that you predicted on the last podcast was well, I think you did mention the fact that in 2021 we would see the economy bounce back and it has. We were talking about the third stimulus and we did get that. Do you think there's going to be another stimulus? Do you think it's going to be necessary to get us to whatever that next step is in this proposed economic boom?
ROBERT FRICK: I don't think we need a third stimulus. Though I do think we need to probably extend unemployment benefits to millions of Americans who are going to run out of them in August and September. But I do hope that the parties get together and fund, not go into debt, but fund an infrastructure plan or plant because the US is a C minus country as far as infrastructure goes. And it really hurts us. Plus the jobs that we create that will be created are good trade jobs. We need carpenters, pipe fitters, we need our manufacturing companies to make heavy equipment get a big boost. All that's going to be terrific for the economy is going to build good blue collar, middle class jobs. And we need many more trades workers in the middle class. We've lost so many of them. And that isn't good for the economy in general.
And broadband is something that we should be ashamed about. The fact that we don't have broadband in a lot of rural areas when pretty much every other developed country does. Why do people who live in a rural area get second rate internet? That's really harmful to them in so many ways, including education.
EMILY BIGHAM: You make a really good point. And I do look forward to seeing that type of stuff, the infrastructure. I was reading something about and I don't even know if this is relevant, but water shortages in California and Oregon. And I just couldn't believe it. I think there's a lot of things that have been overlooked that we haven't been taking care of necessarily and it looks like maybe we are now putting more of an emphasis on just doing the basics the correct way.
ROBERT FRICK: Right. Well, in California the infrastructure would be to build snow machines because your folks don't have enough snow out there which is why water is so low. And I don't know the reason for that, climate change or whatever. But we have to build infrastructure that addresses that. How can we have the same cities, the same quality of life using fewer resources? Those are infrastructure questions. And water is one of those things where you have it or you don't. And the only thing you can do is just build more efficient systems.
EMILY BIGHAM: And sometimes you have to pause in order to fix things. I think we're always like rush, rush, rush. And talking about the impatience of people because some things are automated and some things are so fast that the minute that you don't get a response right away or get what you want right away, everyone's in a tizzy. And I'm glad that we're looking towards doing those things those basics in the correct way.
ROBERT FRICK: I hope the two sides get together and we can pull it off. I really do. I don't think people understand that for every dollar you spend on infrastructure and I mean traditional infrastructure, you're going to get at least a dollar and a half back in the economy. And people are critical of-- I won't put my thumbs up on every type of infrastructure. But Pre-K-- my wife is just leaving a multi-year job as director of a preschool. The kids get and so the benefits the economy gets through pre-K education is been documented over and over again.
And we're one of the worst countries when it comes to having mandatory pre-K programs available. You don't have to send your kids, but most people do. And that means their kids start first grade just right out of the gate and become great learners. And don't we want that for our kids? And don't we want that for the economy?
EMILY BIGHAM: That's a good point too. And then the impact, we won't know the impact of this past year on kids who have been schools. But I haven't heard of such wonderful things across the board.
ROBERT FRICK: I know. And it really depends on your kid. I have a granddaughter and this kid is like up at dawn. She actually wears her school uniform to go in front of her computer and be in her virtual classroom all day. If I had to do that at her age, she's nine, I would have flunked out. I would have been selling newspapers or apples on the corner because I don't have the kind of discipline she has. I was a pretty lousy student in general at her age. But some kids are going to do fine, some kids are going to excel, but many, many kids have lost a year. And that's tragic.
EMILY BIGHAM: Yeah. I guess it does depend on and also depends on your home environment. I can't imagine people who their mom and dad are both working from home and the kids are also trying to do online schooling. I just I really cannot imagine that scenario. And so I think that that's probably another reason why we're seeing such optimism is because we are heading into summer. It just feels like everyone's going to get a break.
ROBERT FRICK: Yeah. One of the great things in the last jobs report was all the teacher jobs have come back. I mean, state, local teacher jobs. You know 50,000, 100,000, 150,000. And that's just the beginning. And so by certainly the fall all the teachers are going to be back and we'll be back at full staff. And both my parents were teachers so I have a soft spot for teaching, but man, we don't pay teachers enough. And the fact that so many of them have lost their jobs and have been on assistance for all these months I feel real badly. I'm grateful that they're going to be coming back.
EMILY BIGHAM: Yeah. I think that everyone is going to be grateful come fall. I mean, it seems like the summer kids will get a break from school and then a lot of the larger companies have been saying that they're going to have workers coming back into the office. So that gives people a bit of time to plan which I think is good. I think announcing that early is probably a really smart move so people can get their home life situated.
ROBERT FRICK: Yeah. Well at Navy Federal, many of us will be returning. Some of us will probably be only going in a couple, three days a week. And I think that's great because I think we found efficiencies. I know with what I do, I miss going into work but I also if I couldn't stay home two or three days a week, I'd miss kind of the efficiency of rolling out of bed and just working like 7 to 5. And just really crushing it. You can't do that when you're in the office. You really can't.
EMILY BIGHAM: Yeah. I think it's also the balance though. I find myself doing really crazy hour. I mean, I wanted to though. Everyone was working crazy hours to try to help everyone and help members. And then I think teams are really good at helping out when one team member couldn't necessarily be online certain hours and because of kids or whatever. I think everyone at Navy Federal really stepped up in that way. But it was hard to find a balance. It really was. Especially for someone like me where I really truly, I really do love my job and I learn something every day so I'm very engaged. And if something comes up and it's 6:00 PM, I don't care I want to work on it because I just I want to and it helps members. And it sound so cheesy but that's a really big deal.
ROBERT FRICK: No. It doesn't sound cheesy to me at least, it doesn't sound cheesy at all. But if you're in a company that is always looking for new business and if your real estate has changed and if your client needs a change, it's been a real struggle. And I think that's something that has been hurting the economy in the last year.
EMILY BIGHAM: Well, Bob, this has been a lovely conversation. I have kept you way too long. But I want to kind of end it on a positive note, not that this hasn't been truly positive, but I want to bring it back to your outlook for the next few years and some of the optimism that you had. The fact that existing home sales this spring is going to pop, some of those other, give me some of your natural optimism for the next few years.
ROBERT FRICK: Well, I'm neither optimistic or pessimistic. I'm sarcastic.
EMILY BIGHAM: So you're dramatic.
ROBERT FRICK: Right. I'm dramatic. No, I'm realistic, Emily. I'm a realist.
EMILY BIGHAM: OK. Well, that's what people say about me too, dramatic and I'm a realist.
ROBERT FRICK: You say it better than I do. So I'm a realist. A year ago I was pointing at the economy and saying, man, things are really going to get bad. A lot of people were saying, oh, you're exaggerating. I wasn't exaggerating. And then last time we spoke I said, it's going to come back but we hadn't seen any signs of it yet. The first quarter is going to be the quarter in which we turn the quarter. And that's exactly what happened.
Unfortunately, I wasn't the only person saying that. Many people were saying that. But we were all right. When you look at all the January numbers that are coming in, retail sales, jobs, even consumer price index, it's all up. It's all positive. It all shows that the service sector is coming back. And the service sector consumer spending on services is the biggest part of the economy. It's like 45% of the economy. Goods says another 25% that you have manufacturing, imports, exports. Blah, blah, blah.
But all these things are what actually happens in the business cycle and people shouldn't be alarmed by it. People should be grateful that we're finally out of this quagmire that we've been in for so long.
EMILY BIGHAM: Yeah. For a while it felt like phew, was it ever going to end? Well, Bob, it was so great talking to you today. And for listeners who want to find more about your insights, where can they read your stuff? Where can they find you?
ROBERT FRICK: I've really got into Twitter. So Robert Frick NFCU. I generally tweet-- today I had five tweets. There's some of them about the economy, there's a lot of news today, some of them are just snarky. But all my snark has a purpose because for example I poked fun at people who are worried about high inflation today. And I got kind of a rise. I wasn't trying to troll anyone, but I got a rise out of it. So I would say please follow me on Twitter especially if you remember I guarantee I'll follow you back. I have a lot of great conversations with members in messaging on Twitter. That gives me a lot of great insights. And that would be my number one thing. And if you really want my feed, the best way to do it is through Twitter.
EMILY BIGHAM: OK. So @RobertFrickNFCU. So it's R-O-B-E-R-T F-R-I-C-K N-F-C-U. Well, now you're probably going to be tweeting and trolling me because I was being so dramatic about inflation. But I was just confused. And I think the short term long term gives a lot of really good perspective. So Bob, thank you so much. Is there anything else that you would like to say before we wrap this up?
ROBERT FRICK: I think you have completely vacated everything in my brain, Emily.
EMILY BIGHAM: Me too. I'm exhausted.
ROBERT FRICK: Yeah, I'm exhausted. So thank you very much. This has been great as always.
EMILY BIGHAM: All right. Go drive down your driveway.
ROBERT FRICK: OK.
EMILY BIGHAM: All right. It was good to talk to you, Bob.
ROBERT FRICK: Yeah, see you later.
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Episode 8: Navigating the Economy in 2021
In this episode, we welcome back our corporate economist Robert Frick, an expert in behavioral economics and former journalist. Join us as Robert and Emily chat through the current economic climate, COVID-19’s impact on travel and small businesses, what we can expect going forward for our own finances and investments, and more.