About ten days ago Funeral Director Daily wrote our first column titled “The World Around Us“.  The column, which will appear on a periodic basis, was created with the thought process that people in the funeral business stay pretty busy and don’t always find time to find out what is happening outside of the “Headline News”.   Yet the more we understand of what is happening in the “World Around Us” the better we will be at our decision making for our own businesses.

 

“The World Around Us” is our periodic attempt to keep funeral home owners and managers updated on what is happening and how it might affect their business.  Our first episode was very well received so here we go with Episode #2.

 

Funeral Director Daily take  —  For the past couple of years the Federal Reserve has moved interest rates higher to keep inflation in check.  The higher rates have caused the “Cost of Money” to increase for funeral homes on everything from mortgage rates on buildings to loans for livery vehicles to the cost of lines of credit for purchases.  Now, just as we are looking for the Federal Reserve to ease some of those loan rates we find that “Bad Loans” may be increasing in number and keep the “Cost of Money” advanced by smaller banks at elevated levels.

• Regional Banks’ bad loans spark concern on Wall Street.  ABC News (print article)

 

Funeral Director Daily take —  Somewhat in line with the previous statement and article, here are some more indications that many American consumers have reached their limit on stretching their financial resources.  While I am not sure as to how this plays out for Death Care businesses, I would guess that the more resources one has available to pay for funeral or cremation services the better funeral homes, crematories, and cemeteries will do financially. . . . Now, it appears that we may be moving in the opposite direction on that front.  I think it is just good, sound, business philosophy that funeral directors understand some of the reasons that clients choose limited services has to do with available current resources and not always their preferred Death Care wishes.  And, extending credit using credit cards and other means to them is good and will probably help average call sales revenue, but be careful not to over-extend your firm’s accounts receivables in situations where you may never get paid.

• Auto delinquencies are soaring, with consumers hit by by high car prices.  Yahoo Finance

 

 

Funeral Director Daily take —  I remember my first day on the job as a licensed funeral director like it was yesterday — June 9, 1980.  That’s now over 45 years ago.  And, in looking back, moving through the days of buying my first house, getting married, raising a family and all other events I realized that I had to balance current living expenses with saving expenses of college educations, whole life insurance, and, of course, retirement savings.

 

I think sometimes we, and our team members, get caught up in the moment of current expenses.  I was lucky in those early working years that I had a local banker and fellow church member who always told me “pay yourself first”.  What he meant by that was “the first part of your paycheck should be put away for a later date”.  It turned out to be great advice.

 

I think it is important, especially for owners of funeral homes, that we keep our retirement goals on track.  I recently came across this article that has some guidelines for doing just that. . . I think it is a good little reminder, that like it did for me, retirement will come sooner than you think. . . . Share this article with your team members as I think it is pretty well proven that financially secure team members will be better team members.

• How much do you really need to save for retirement?  Yahoo Finance

 

Funeral Director Daily take —  Just last week Funeral Director Daily wrote some articles that dealt with transactions in the Death Care profession/industry and all of those transactions involved private equity as investors in one way or another.  We also wrote this article back in June about why private equity seems to be a good fit for Death Care operations.

 

One of the points brought up in that June article was that of all the businesses in America 91% are private and only 9% are public companies where the average American can buy stock for ownership.  The article also points out that “Private” companies have returned a 14.9% annual return to investors over the past 20 years while “Public” companies have returned only a 7.9% annually over that same period.

 

However, because of the ability to lose your investment, potential investors in almost all “Private Equity”  funds need to prove that they are “Qualified” investors with net worth of $1 million or more.  Many people feel that is one reason the American economy is now thought to be “K-shaped” where those with “private” assets are gaining more net worth while those without the ability to invest in those “private” assets are falling behind.

 

I think you are going to be hearing more and more about the pros and cons of who and how one can invest in private fund companies.  I think the discussion is beginning and this article will give you some insight on what the issues will be in that discussion.

• The Democratization of Private Equity could create a “Systemic Risk Machine“.  Stanford Business Graduate School Insights

 

Funeral Director Daily take —  Finally, we present a press release from Matthews International.  Matthews International is a large, multi-faceted supplier to Death Care.  They are also, however, a consolidated company that has other “irons in the fire” including development of parts of the future in the electrode battery industry.  Here’s a recent press release from Matthews pertaining to that industry.

• Matthews International prevails in federal court ruling affirming arbitration award against Tesla.  Global Newswire

 

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