Mostly good, with some pains, Denver is growing up

Wealth manager weighs in on boom town finances

Less than 10 years ago, in the midst of the great recession, we all knew things were bad. If we weren’t directly affected ourselves, we had family members who lost their jobs or a friend who lost their home. 401(k)s were being called 201(k)s – the loss was tangible. The media stoked fear and, in some capacity, we all felt it – the anxiety was palpable. During these times, our intuition told us to circle the wagons.  Understanding when times are poor in the moment is an instinct built into humans.  And, we do not forget the bad times quickly. 

The opposite can be said of the good times. We take the good for granted and expect it will continue forever.

As a wealth management advisor, I get an intimate look at what is happening behind-the-scenes with personal finances across Colorado. This intimate access has led me to one conclusion based on evidence I see over and over again:

Colorado is booming. 

Twenty years from now, we will look back on these times and refer to them as the good ole days.

Let’s Go Public

A friend of mine is a mid-level employee for a Denver-based company that just completed an initial public offering (IPO). An IPO is when a private company becomes a public company by offering the very first sale of stock to all investors through an exchange.  Typically, a company will give restricted stock to employees as a reward when they go public. Since the company’s inception four years ago, she has worked hard and been loyal. The organization treated her well, but she never expected the windfall she received when her company went public. She found herself with thousands of shares worth close to $1 million. She came to me to help her make the exhilarating and tough decisions with her newfound wealth.

Throughout 2017, this scene has replayed itself across Colorado.

Led by the energy industry, multiple Colorado companies have already gone public or filed the paperwork for a future IPO. With companies like Jagged Peak Energy and Wide Open West already going public this year and companies like Frontier Airlines and Liberty Oilfield Services eyeing initial public offerings, there is no sign that this scene will end. These are the good old days in Colorado.

Resume Gap No Problem

I have a client who was an analyst in big corporate America for many years. He was paid well, but work was a grind. He became burned out with his career and looked for a more rewarding career in something he was passionate about. His answer was … beer! He found a job in the thriving craft beer industry here in Colorado. It was a refreshing change from his previous position, but the pay was much, much less. After a three-year stint in the suds industry and a child headed to college, this year he decided it was time to go back to a higher paying job as an analyst. He felt reenergized and ready to go back to corporate America. In past times, decades, years or with a different economy, having a gap in your resume and being out of your field of business, may have caused issues finding a new job. Not only did he find a job in two months, he was being paid 20 percent more than when he had left.  These are the good old days in Colorado.

The Numbers

With a thriving startup community, diversified economy, educated workforce and a mountain playground in our backyard, the economic numbers backup the previous stories. According to the Bureau of Labor Statistics, Colorado unemployment has dipped to a record-low 2.3 percent. To put things into perspective, this mark has only been touched four other times by any other state in recent U.S. history. Given the tight labor market, wage growth has increased. Companies have no other choice but to raise rates if they want to attract qualified employees.  Earlier this year, Case-Shiller reported a year-over-year increase of home prices in Denver of 8.5 percent. This comes on top of multiple years of high single-digit and double-digit home price appreciation across the Front Range. In a recent report, U.S. News and World Report listed Colorado as the state with the No. 1 economy. These are the good old days in Colorado

Daily, I encounter these stories. In the last month, a client called me to see how to invest a big bonus.  Another client called me to let me know they switched to a higher paying job. I met a business partner for lunch at my favorite Denver restaurant only to find out they can’t find enough help during the day so they are now only open for dinner. A friend has a home equity line of credit available so he is getting his basement refinished. With no vacancy in my office building, the leasing company has the leverage to raise my rent. Mostly good, with some pains, Denver is growing up. These are the good old days in Colorado.

Categories: Economy/Politics