AMA 366: Market Crash Predictions, California Climate Policy, Crypto History, Bitcoin & Mark Moss

Investor, entrepreneur, and Crypto Expert, Mark Moss, returns to the show today discussing what’s happening in Mexico compared to California? Moss, a California resident, shares some aspects of California that are proving problematic moving forward. Will these bills in motion and aggressive attempts to combat climate change cause a California market crash?

“Every problem boils down to the money,” says Mark Moss. Mark Moss talks with Jason Hartman about his feelings on bitcoin and why it might be the most favorable currency, even over the dollar. This talk includes a quick history lesson sharing one aspect of currency evolution. As well, what will happen when the stimulus ends?

Key Takeaways:

Mark Moss

[2:00] Why is that the power stays on in Mexico, but not in California?

[5:00] California is leading the charge on fighting back against climate change.

[8:30] And what do experts say about the cause of the fire?

[13:00] With California’s chaos and the four bills in working order that could affect real estate, what will happen with the California real estate market?

[15:30] Will there be a real estate crash in 2021?

[17:10] Mark speaks about one market misconception.

[18:30] The markets; stock, real estate, gold, etc., have become disconnected.

[20:00] What happens when the stimulus ends?

[22:30] How will this change cryptocurrency, like bitcoin?

[25:15] What makes bitcoin superior to gold or the dollar?

[26:45] A history lesson on African cowrie/aggry beads.

[28:40] “If the people understood the banking system, there would be a revolution overnight.” Henry Ford

Websites:

Mark Moss on Youtube

JasonHartman.com/Ask

JasonHartman.com/Start

JasonHartman.com/Recordings

JasonHartman.com/Asset

JasonHartman.com/Webinar

JasonHartman.com

JasonHartman.com/properties

Jason Hartman Quick Start

Jason Hartman PropertyCast (Libsyn)

Jason Hartman PropertyCast (iTunes)

1-800-HARTMAN

AMA 365: Nominal Confusion, FedNow, Capital Formation, and Dynastic Wealth, Lynette Zang

Jason Hartman interviews Lynette Zang, Chief Market Analyst at ITM Trading, about everything monetary policy. Opening with one of Lynette’s favorite charts shared from the FRED, Federal Reserve Education Department, Lynette, and Jason guide us through a discussion to clear up nominal confusion. Zang shares recent developments with FedNow and how this will affect the individual.

Jason asks Lynette what she recommends we should do to protect ourselves? Lynette expresses her confidence in gold and why this is one of the three central pillars of dynastic wealth. As well, Jason and Lynette discuss inflation, the how and why of its existence, and how it’s controlled.

Key Takeaways:

[2:30] Looking at one of Lynette’s favorite charts from the FRED, Federal Reserve Education Department.

[3:45] Fiat literal translation: government decree.

[6:00] Nominal confusion; ‘they’ knew that people do not understand inflation and that they marry the legal money of the state because inflation causes nominal confusion.

[9:00] What is a total financial reset?

[11:10] The FedNow is about you, the individual, having an account directly linked to the Federal Reserve.

[13:45] The basis of wealth is capital formation. You’ve got to save in order to invest.

[19:00] What is Gavi, The Vaccine Alliance?

[27:00] Whenever you hear the term nominal, you must understand that the truth is being hidden.

[28:30] What should we be doing to protect ourselves?

[29:10] Dynastic wealth is real estate, rare metals, and gold money.

[31:40] Gold acts as wealth storage, holding its value over time.

[33:55] Inflation is an invisible way for the government to tax you more.

[35:40] Real estate inside of a reset faces two issues.

[37:30] There is almost no such thing as a free and clear property?

[43:30] How do negative interest rates work/exist?

[51:40] What does it mean when the LIBOR goes away?

Websites:

ITMTrading.com

PandemicInvesting.com

JasonHartman.com/Ask

JasonHartman.com/Start

JasonHartman.com/Recordings

JasonHartman.com/Asset

JasonHartman.com/Webinar

JasonHartman.com

JasonHartman.com/properties

Jason Hartman Quick Start

Jason Hartman PropertyCast (Libsyn)

Jason Hartman PropertyCast (iTunes)

1-800-HARTMAN

AMA 364: Macro-Economic Trends, Debt to GDP, Inflation, Japan George Gammon

George Gammon joins Jason Hartman remotely from Saint Barthélemy. What’s happening with Japan’s debt to GDP ratio, and how can the US compare to this? George talks about the change in the savings rate due to Coronavirus and how it is manipulated.

George and Jason discuss some ideas that the Fed may not want the common man to understand. As well, is deflation good or bad? Where are interest rates headed, and how can you come up with a prediction for that?

Key Takeaways:

[1:00] Life in St. Barts, low crime rate, yachts, and more.

[7:45] Jason opens the discussion on Japanonomics.

[8:55] The US deficit just this year will be the same as the total amount of debt accumulated from 1776 to 2000.

[12:00] George talks on trades surplus.

[17:00] How did Coronavirus change the US savings rate?

[20:00] How has the savings rate been manipulated based on IRS’ estimates.’?

[21:15] What is it that the Fed, or the powers that be, don’t want us to know?

[21:29] Is deflation good or bad?

[24:00] Who ‘owns’ the Fed?

[29:30] In a truly free market, one is always trying to create a product that has more value than the money in your pocket.

[30:30] Where do you think these interest rates are going?

[33:00] George discusses using the Fisher equation to determine interest rates in the future.

[38:00] Is inflation necessary?

[44:30] Be prepared or you’re going to be a victim

[48:55] What is Rebel Capitalist Pro?

Websites:

GeorgeGammon.com/Pro

JasonHartman.com/Start

JasonHartman.com/Recordings

JasonHartman.com/Asset

JasonHartman.com/Webinar

www.JasonHartman.com

www.JasonHartman.com/properties

Jason Hartman Quick Start

Jason Hartman PropertyCast (Libsyn)

Jason Hartman PropertyCast (iTunes)

1-800-HARTMAN

AMA 363: AMERICA, What Went Wrong? The Crisis Deepens, James B. Steele, Pulitzer Prize & George Polk Winner

He is one of the most famous economic investigative journalists of all time, Jason Hartman interviews James B. Steel. Jason ask James about the decimated middle class, how did we get here, and how can we get out? As well, James touches on health care and the American dream, and how to make the middle class viable again.

Book: 

The newest book, America What Went Wrong, the Crisis Deepens

Key Takeaways:

[0:45] The middle class has been decimated, without a real dollar raise in four decades. How can this be?

[5:00] Discussing how the median income is behind pace.

[9:30] The free market has been wonderful for this country but it cannot solve this problem we’re in.

[13:00] How could health care be solved?

[17:00] Who are the global money men?

[18:00] Is there hope for the American dream?

[21:15] The solution; what is the foundation that makes the middle class viable again?

Websites:

barlettandsteele.com

JasonHartman.com/asset

JasonHartman.com/Webinar

www.JasonHartman.com

www.JasonHartman.com/properties

Jason Hartman Quick Start

Jason Hartman PropertyCast (Libsyn)

Jason Hartman PropertyCast (iTunes)

Special Announcement: Pandemic Investing Summit

Zoom Virtual Event: October 17th, 2020

Early Bird Admission: PandemicInvesting.com

Get Instant access to Jason Hartman’s newest report, you’ll learn…

  • The modified square root shaped recovery
  • Understanding the rare economic malady of supply/demand shock
  • Generational PTSD and what it means to you & society
  • The six lifestyle mega-trends that will change the world forever
  • And much much more!

PandemicInvesting.com

AMA 362: CARES Act, HEROS Act Stimulus with Julio Gonzalez

Jason Hartman talks with Julio Gonzalez, founder of Engineered Tax Services, a licensed engineering firm that focuses on tax benefits at federal, state, and local levels. Julio’s expertise on tax credits gives us a different perspective on where the economy is headed. Today, Jason and Julio discuss property reuse for affordable housing and redistribution centers. Julio shares knowledge about tax credits from selling air rights to 5G infrastructure.

Key Takeaways:

Julio Gonzalez

[3:00] Is there a chance to see property reuse like hotels shifting to affordable housing?

[4:00] Many REITs are trying to redesign shopping centers into redistribution centers.

[9:00] It’s hard to make predictions about where the economy will be without any history of vaccinating 7 billion people.

[11:15] There are twenty tax credits associated with investing and real estate at the federal level.

[13:00] The government is incentivizing 5G infrastructure as a tax credit.

Websites:

EngineeredTaxServices.com

www.JasonHartman.com/asset

www.JasonHartman.com

www.JasonHartman.com/properties

Jason Hartman Quick Start

Jason Hartman PropertyCast (Libsyn)

Jason Hartman PropertyCast (iTunes)

1-800-HARTMAN

Digital Human & Digital Bank, Launch A Digital Bank with Chris Skinner

Jason Hartman starts the show giving a background on defaults. In the interview segment of the show, he hosts Chris Skinner, Chairman at the Financial Services Club and founder of Finanser. Chris has authored the books: Digital Bank: Strategies to Launch or Become a Digital Bank, Digital Human: The Fourth Revolution of Humanity Includes Everyone, and Doing Digital: Lessons from Leaders. They discuss the acceleration into the digital world and the future that technology plays. Skinner ties this with modern banking and then ends with a discussion on robotics, ethics, and philosophy.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multimillionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:54
Welcome to Episode 1507 1507. And hey, I’ve been writing about A lot of predictions, maybe, maybe maybe this is just another one. Yesterday, not less than yesterday, I talked about helicopter parenting. When I was giving advice to our listeners based on I believe it was a tools question about moving out of the San Francisco Bay Area. I think that was where that came up as I recall. And then today, today, there is an article in the Wall Street Journal that says, has COVID brought an end to helicopter parenting. The pressures of the pandemic have forced families to abandon the hyper vigilant approach popular since the 1990s. That could help kids become more independent. Yay. And of course the article has, but also comes with risk. Oh my god. Guess what, everybody? If we want to risk free life, we have to either be unborn, or dead. Everything between those two bookends is filled with risk filled with risk. Yes, living is a risky endeavor. No question about it. But, you know, this hyper vigilant helicopter parenting approach. By the way, this is a financial show we’ll get we’ll get to that in a moment. It’s been popular since the 1990s. Guess who was probably born in the 1990s. Millennials and also Gen Z, right. But millennials especially we don’t know enough about Gen Z yet too early to tell how they’re going to turn out. But millennials, most definitely the most catered to generation in all of human history, like not even close. Now this article in the Wall Street Journal backing up my thesis from yesterday. Right, right. See now I can maybe I’ll start a new podcast about parenting advice. Yeah. parenting advice by a completely unqualified non expert. Yours truly, it says about half of, I guess they did a survey of about 2000. Little over 2000 adults said they’re allowing their children to go to bed later 46% of them and wake up later 51% and are allowing more screen time. According to a survey conducted by Harris Poll on behalf of the University of Phoenix, a separate poll found that nearly 30% of parents said their child rearing styles are at least somewhat or much more relaxed than normal, according to a June survey of 900 parents by Pittsburgh based consumer research firm civic science, okay, so folks, Look, my comment, not that I know anything. I’m gonna just really encourage everybody To end the helicopter parenting, kids have got to develop some of their own strength. They’ve got to have some of their own hardships. And not only that, back in the day I know it seems like forever ago when you were carton your kids around a soccer practice and, you know, musical instrument practice and being a chauffeur, all that I mean, I’m absolutely shocked at how parents are literally chauffeurs. I’m sure you’re amazed, do parents when you were carting your kids around all these things and making sure your kid has not one second of downtime? Think about that. Was that anything like your childhood? No, of course it wasn’t. You had a lot of downtime, I’m sure you had downtime to think, to be creative, to explore your world. You know what I used to do all the time. I used to read I remember this because I was always read it. Maybe remember this book. I don’t even know if it’s still around. But it’s called the book of lists. And then almanacs. I used to love to read almanacs, and the book of lists, that’s plural lists. How do you say it’s hard to say, without our lists?

I used to read those all the time. And I just found it fascinating. You know, other stuff too. And I used to explore things. I think that was really good for me to have downtime, even to watch TV. And now we didn’t have the internet back then. Because, you know, I grew up in the Stone Age, but I just can’t imagine this is good for kids to be carting them around, catering to them, helicopter parenting all the time. I used to ride my bike all over Los Angeles, like miles and miles and miles away from my home, miles and miles. I used to go get my own meals and McDonald’s and restaurants and all this kind of stuff. Not saying McDonald’s, I’d never eat at McDonald’s anymore. It’s disgusting. But you get the idea. Like, look, folks, you know, kids got to do some stuff by themselves. help them grow up. That’s all I’ll shut up. Now, that will be the conclusion of my parenting advice on this show. You’re never gonna hear it again. Well, I might break that promise. I’m just gonna warn you in advance. But Wall Street Journal even thinks we might be at the end of helicopter parenting. So I just finished interview I was on with Rick Sanchez with RT television again today. And he asked me to come on and talk about how the banks, the banks are stockpiling money. What does this mean? What does this mean? Well, they have stockpiled the three piggy banks, JP Morgan, Citigroup, and Wells Fargo. Yes. The crooked scam artist at Wells Fargo. Hey, they’re all crooks. Okay, I’m not gonna I’m not gonna just pick on wells, but that’s the one to pick on in the last few years because they are disgusting. It’s like Wells Fargo with scandal every week. Who are we ripping off this week and what government fine are we gonna pay this week? Ask Wells Fargo anyway, they’ve stockpiled these three big banks about $28 billion. Now, compared to what is the question compared to what is the question? Okay. So, if you compare this and I am looking at a chart, and you know why I love charts, because they always answer that Jason Hartman question, which is compared to what, and compared to the second quarter of 2019. When this chart starts, you can see the three big banks, the biggest one of them, JP Morgan, they were stockpiling about $2 billion. That’s one year ago, $2 billion. Now in the last quarter, they stockpiled about $12 billion, or no, no, sorry, 10 and a half billion to be exact. $10.47 billion. The chart goes up to 12 billion and it looked like the graph was hitting the top but it wasn’t I stand corrected. So 10.4 7 billion JP Morgan Chase, and Wells Fargo stockpiled almost 10,000,000,009.7 5 billion, and Citi group a little bit less. Okay. So the point is, they are getting ready for a wave of defaults. And I’m not talking about mortgages here mortgages are just one part of the portfolio that these banks are, well, that they seem to be worried about. We don’t know what they’re thinking. But by their actions, it looks like they’re getting ready for a wave of auto loan defaults, credit card defaults. I don’t know how much they play in the student loan market, but there’s going to be a lot of defaults there. We’ve talked about that extensively, not dischargeable in bankruptcy, etc. Total scam, Harvard, disgusting shame on Harvard, as we talked about, I think last week, everybody’s got to go do their classes on a 13 inch laptop screen, but we’re not lowering our prices at all. We’re still gonna try Your $47,000 and change to attend Harvard online it should be like $5 what a complete scam. I’m so glad. The student loan debt enslavement complex. Well, the government student loan debt enslavement University disgusting complex is coming to an end, folks. Thank God for COVID-19 it has put a nail in the coffin. Everybody has realized that the emperor has no clothes. This is a scam. They have been scamming people for decades. And it’s finally finally going to start the end. The beginning of the end is here. Oh, by the way, I want to make sure I mentioned we have our first live stream tonight. Yes, we’re live streaming. And so that’ll be on my YouTube channel. And on our Facebook page or Facebook By the way, the name of our main Facebook pages hartman.com Yes. So you go facebook.com slash Jason Hartman calm and it comes up, and we’ll be live streaming there. If you’re friends with me if you’re one of my 5000 friends on Facebook, unfortunately, you have to cap out at 5000. It goes on to my personal page as well. So come on live stream, join the live stream, ask questions, get your questions answered. And we might surprise you and invite you right on on camera with us as well. And we’re gonna have Evan and Lisa are two of our team members on with me to do this live stream talking about some interesting stuff. And we plan to do those regularly. So if you can catch it tonight, it’s at eight o’clock eastern eight o’clock eastern. And then of course, you can watch the replay on the YouTube channel or the Facebook pages after that. But if you want to catch it live, ask questions. get your questions answered. Join us join us live this evening. You may not hear that soon enough. But it’s eight o’clock eastern five o’clock Pacific tonight on YouTube and Facebook. So anyway, as we are in the third inning, I believe, of this whole pandemic. And as we are operating one of the things Doug and I talked about this morning, by the way, you’ve heard back on the show many times. And Doug and I were commiserating over the idea that everybody is just assuming they’re making a giant assumption about this. They’re making an assumption that I mean, everybody’s making this assumption, what assumption are they making? They’re making the assumption that a vaccine is coming. Why are they making that assumption? I mean, maybe a vaccine will never be developed. Maybe there will never be a vaccine. And we will have to socially distance until the entire planet achieves herd immunity, which could take a long time. And we could have a lot of illnesses before then.

You don’t know we’re operating under a faulty assumption, in my opinion, and then Doug volunteered a story about a disease. He couldn’t think of the name of it, so I can’t share it. If you but some disease, there was a pretty big deal in South America, and they finally came out with a vaccine, but the vaccine was worse than the disease. See, sometimes the cure is worse than the diseases that is that old saying goes, you know, we don’t know. Let’s not assume that there’s ever going to be a vaccine. Hopefully there will. But again, we don’t know. We just don’t know. Anyway, hey, today we’re going to talk about digital banks, and how you can actually create your own bank. Do you like to have your own bank? No, this is not about infinite banking or something like that. This is about a real digital bank. So you can hear about that. It’s interesting, and I think you’ll like it. And so let’s dive into that. Be sure you get your tickets for our upcoming meet the Masters tickets selling like hotcakes, and you know, hotcakes, they go fast. So Jason hartman.com slash masters for that early bird pricing available on the second tier of early bird available till Friday of this week. So get those tickets right now. Let’s go to our guest. And let’s talk about digital banking. And we are going to have a little Cameo appearance from George gammon in the show as well. So here we go. You’ve heard him on the show before. And it’s my pleasure to welcome George Gammon back just for a brief discussion of what he is going to talk about at her upcoming meet the masters of income property conference. This is the first time we’ve done it virtually it’s our 22nd anniversary event. And George, we are so excited to have you tell us what you are going to be sharing with our attendees.

George Gammon 13:35
Well, I just can’t wait first and foremost, Jason to get there and share hopefully what’s going to be some knowledge bombs and some serious value with your listeners with your viewers of the people that are going to attend this virtual conference. So the first thing I’d like to talk about is something that nobody understands and I think it’s just gonna blow people’s mind and that is in the most recent tax bill. came out in 2018, the tax bill that we thought lowered people’s taxes actually is going to increase people’s taxes substantially over the long run. So how is this going to happen? Because they switched the CPI measurement, and that’s the rate of inflation for the tax brackets. So if they increase the tax brackets too slowly, in other words, they use a rate of inflation that understates the CPI dramatically, then the tax brackets will move up slower. That means you are going to pay more and more of your income to the government over time and I won’t go into great detail, but trust me, this is something that everyone is going to want to find out about take notes so you can prepare in the future. So you’re not getting ripped off by the government. George,

Jason Hartman 14:53
that is fantastic. I saw you talk a little bit about this before with your famous whiteboard and your You’re great with the whiteboard for sure. That is a super important topic. And it is amazing, the kind of really sleight of hand that the government plays with the IRS with monetary policy with fiscal policy. It’s just incredible. And it’s so important that people understand this, isn’t it?

George Gammon 15:19
It absolutely is. Because as real estate investors, we can take advantage of certain tax opportunities. We’ve got depreciation, I mean, you go into this and a lot of your videos and I’m sure we’ll be talking about it more at meet the Masters, but we’re going into an environment in the United States where taxes are going to increase, I can almost promise you that are its corporate taxes, whether it’s income taxes, or maybe capital gains tax. So you need to be cognizant of what’s going on. Because you’ve got two options right now going into the future. You can either be prepared or you can be a victim. And Personally I’d rather be prepared. Yeah, absolutely. Well,

Jason Hartman 15:58
we can’t wait to have you and It’s your first time speaking at meet the masters. We originally folks had this scheduled as a live conference. It will be live now, but it’s, but it was going to be an in person physical conference, I guess I should say, in Southern California. And then we postpone that and turned it into a virtual event. So here we are, George, we can’t wait to have you. And thank you again for joining us. And I’m sure the audience is just going to be really looking forward to what you have to say. So thanks again.

George Gammon 16:28
All right, buddy. Well, I can’t wait to see you and everyone else. July 31, August 1 and August 2,

Jason Hartman 16:35
we’ll see you there. You got it. Looking forward to it. It’s my pleasure to welcome Chris Skinner. He is chairman at the financial services club and founder of financer he’s author of the best selling books digital bank strategies to launch or become a digital bank, digital human. The fourth revolution of humanity includes everyone The new book doing digital lessons from leaders. Chris, welcome. How are you? Yeah,

Chris Skinner 17:05
I’m good. Jason, thanks for having me on.

Jason Hartman 17:06
It’s good to have you and you’re coming to us from Poland

Chris Skinner 17:08
a great place. I’ve been to many times, what city are you in? Just outside Warsaw in the suburbs? Luckily, we moved to a place with a big garden in November. So it’s not been so bad for the last three months when we couldn’t get out of

Jason Hartman 17:21
the house. Right? Absolutely. Yeah, the world has really changed. And all of this change is accelerating what economist Joseph Schumpeter called creative destruction. And it is really accelerating change in the world in so many ways, a lot of it for the good. I mean, a lot of things that would have taken five or 10 years to happen in terms of convenience, technology, so forth are happening right away. And so there’s definitely some good good bits coming out of this, no question about it. But tell us what’s going on in the world of money and banking and how that affects all of us and in the economy in general.

Chris Skinner 18:00
Well, I’ve been saying for a long time that banks are challenged fundamentally by technology, because they have, in many instances, not upgraded their systems for over half a century. A stunning statistic from Reuters is that 43% of the big bank systems in America run on COBOL that was developed back in the 1970s. In most cases. So this is a issue because today, everything is being born on the internet. And everything is moving to be cloud computing based, and allowing people to plug and play software wherever they want to be able to work in whatever way they want. And that’s led to what’s called a FinTech revolution in the last decade, and in particular, in the last decade, there’s been a big pressure on banks to move to being more digital. And they’ve resisted that move because they have leadership that doesn’t understand technology that well, and then the lockdown arrived at one had to work from home and then all suddenly They’d left those decisions way too late because they didn’t have a digital backup, the physical operations only had physical backup. And suddenly they needed digital backup and they didn’t have it. So we’re going to see a massive change not just in banks, but in retail and all institutions to digitalization over the next couple of years that you might have might have taken a decade, it’s gonna happen in 12 months.

Jason Hartman 19:21
Yeah. So they’re old systems, that software that runs their businesses just won’t integrate with the internet, or how does that

Chris Skinner 19:30
play out? Well, a lot of people describe the systems of any large institution that’s been around for more than a 50 years as spaghetti structures. And what they’ve got is a lot of underlying core technology that some dating back to the 1980s 70s or even in some cases, the 1960s, you wouldn’t believe, and they’ve layered everything on top of it through the years. So it’s now become incredibly complex. And I liken it to the New York subway future Put in a brand new subway line, navigating through the existing subway system is incredibly difficult. And that’s what banks are trying to do, and large companies are trying to do when they add the internet to the old systems. Instead what they should be doing is re architecting completely fresh and new for the internet era and the digital era and eventually dumping all those old systems.

Jason Hartman 20:22
So tell us how it will change I mean, what can we expect in what will happen to the criminal organization known as Wells Fargo? Or or the criminal organization known as chase or Bank of America? You know, they’re they’ve all had their, their foibles. But lately, Wells Wow, it’s like one scandal after another. It’s incredible. Are these banks just going to kind of fade away? Will we all be using Venmo? Or what what’s going to happen? What does the future look like?

Chris Skinner 20:52
Well, I keep coming back to the fact that unfortunately, the big banks will not go away and they’ll just get bigger. You know, we thought they were disappear after 2008 and the global financial crisis, but they’ve actually gained market share, and they’re bigger than they ever were, when they’ve

Jason Hartman 21:06
consolidated more, there’s a lot less choice, right? Because the, the too big to fail, created a consolidation of power.

Chris Skinner 21:14
Exactly. And that will continue. And a lot of that has to do with the way in which the financial system is completely integrated into the governmental and economic system. So you can’t take that away. And because a lot of its to do with trust, and regulation, then it’s very difficult for it to to change. And in my lifetime, I’ve spent many times thinking that banks would eventually disappear, but they just get bigger because of that regulatory structure. There’s an interesting statistic again, in the US, which is the average bank in America deals with 128,000 regulations. The average technology company deals with 27,000. So it’s five times more regulations to deal with and if you’re dealing with pure technology play, but what is happening is the pure technology players are Wanting to make an impact, particularly around credit loans, payments and savings. So you’re absolutely right when you mentioned Venmo, or square or stripe, or Lending Club. Sophie? Yeah, all of these new companies that have just appeared in the last 12 years Born on the internet, after the financial crisis, are really starting to have an impact. But the impact is on the margins and profits. It’s not on the core business of banking.

Jason Hartman 22:23
But stripe isn’t a bank, for example, that’s just a merchant credit card processor, right? Or is it? Is it more than that?

Chris Skinner 22:29
Well, it’s a little bit more than that. I mean that my favorite FinTech company, and FinTech is this term that describes the integration with finance and technology. Yeah, this came around in the last just over a decade. And a lot of that’s resonating around cloud computing the internet and platforms and marketplaces which will turn you in but

Jason Hartman 22:46
but I don’t get it I mean, authorize dotnet a big old credit card processor. They have a website so to stripe stripes is better, but what’s the

Chris Skinner 22:56
real fun side Jason stripes unique aspect is that they offer beautiful sort of piece of code that allows checkout to be created really easy and simply for anybody trying to do merchant checkout as a company on the internet, and also some of the code. And they launched in 2011. And they’re now worth 36 billion. I know

Jason Hartman 23:19
they’re, they’re amazing. I follow their story. If our

Chris Skinner 23:22
context, one of the oldest and biggest banks in Germany is commerce bank, and stripe is over seven commerce banks in value. So amazing. Isn’t this a phenomena?

Jason Hartman 23:32
Yeah, but just to ferret that out a little more. And we don’t, you know, we don’t have to belabor this point. If you sign up with authorize net to do your merchant processing, that’s sort of an old company, or you sign up with stripe. I mean, they both have integrations, a lot of various merchant websites. Just have like a one click integration, they will both integrate right or what am I missing there that makes stripe such a big deal. I think

Chris Skinner 23:56
it’s the simplicity and beauty of the code that they do a lot too. offer and that they do have competition, but it’s not from companies like authorize dotnet. It’s more from companies like ad yen or Ali pay players with different industries and countries and different markets. And the reason why strikes being so successful is that they got a lot of traction with the new big players, the sort of Ubers or lifts or Airbnb ease of this world. And as a result, that traction gained a lot of momentum. And when people are developing code, they look at the plug and play code, which are called API’s that they can get from other players. And what they tell me is stripes that, you know, the engineers and developers that are developing code online, look at their code and go, Oh, it’s just art. It’s beautiful. So it’s almost like saying, Would you rather have you authorize dotnet which would be let’s see, you you too, or would you like to have Snow Patrol or Taylor Swift or whatever, but it’s kind of just some old guys on the bus. Nobody goes, Yeah,

Jason Hartman 25:01
something a geek would appreciate for sure. But okay, what about all the other services that banks offer? I mean, banks offer a variety of whole cafeteria services. And they largely suck at it. They’re pretty bad. The surface is pretty terrible at banks, everybody complains about them, kind of the way people used to complain about the phone company, the old traditional phone company, you know, are these services all discombobulated among a bunch of different companies now? Or, or maybe none of them exist outside of banks in terms of, you know, certain services. I mean, there’s a whole infrastructure of various services, right, a big variety.

Chris Skinner 25:39
Yeah, I mean, what’s happening and I often talk about this specifically is that there’s thousands of new companies doing one specific thing like the strikes in the edge into this world and the squares, just doing a retail payment or merchant payment online with a bit of code. So that stuff that is replacing just a very small piece of processing Within the financial network, and when you think about the financial investing in mortgages and real estate and payments, and high street deposit, taking full service accounts, etc, etc. There’s a myriad of services that banks are offering. And what’s actually going to happen over time is they’re going to start providing those services by picking these guys who are the new kids on the block and bring them to the customer. I call it the curation of technology, which banks haven’t got there yet, but some are moving in this direction. You know, more and more quickly are saying, we know we can’t develop everything ourselves. We’re not good at everything. We’re going to start bringing the best things out there to the customer. And we’ll do the integration, we’ll do the delivery, because why should you or I as a customer, don’t find out Can I trust stripe or square or add Yuan or Ali pay? Let the bank do it for me and then bring that to me and make it something that’s a really great service.

Jason Hartman 26:49
One of the bank names that comes to mind. It was probably from the sort of the first.com bubble era is Ally Bank. You know, I remember I called them once. And it seemed as though the disconnect was they just do consumer banking, and I need business banking. So they weren’t for me, these old fashioned banks really seem to still have a lock on, like real business level services when it comes to banking. I mean, I assume that will change. But with all the know your customer rules and so forth to how do you really operate an online bank when you can’t meet your customer? That’s a, I guess, another part of it right?

Chris Skinner 27:29
Well, times are changing. And it’s all around timing, to be honest. And that’s, you know, for many years, there’s been many technologies, everyone’s forecast will change the way we do travel, shopping, buying houses by doing banking, you name it, and it hasn’t actually made huge differences yet. So Alli bank was kind of maybe before their time, and they’ve got time in the US which are doing pretty well. And in the UK, it’s been really interesting because there’s lots of new banks that have been launched. The two biggest names on one’s own styling, and styling, it’s only been going for three years already has almost 3% of the UK small business marketplace, Monza has got 3 million account holders, which is pretty substantial in a market of 30 million accounts. So you start to see changes happening. And it’s just timing. And one of the really interesting things about a lot the likes of chime and monzo is what they end up doing is becoming quite hip and cool as brands because people like to show their card and their service and so they get your lifestyle payments and and services and the old bank still maybe you have an account with them, you still might have an account with a wells or Chase, but they become boring or bank with boring or bills. So it’s your utility bills for electricity and gas or whatever is your mortgages and loans and foreign exchange but your everyday living is in the new hip and cool bank.

Jason Hartman 28:53
Interesting. Hey, let’s switch gears and talk about your other two books for a moment if we can well really not too But first of all, strategies to launch and become a digital bank. Can anyone do this? Is this? Is this a business opportunity for the common person? Or is it still only for banksters? banksters? It

Chris Skinner 29:12
is for anybody. It’s for absolutely anybody. One of my favorite stories was a bank that was launched in Britain. Unfortunately, it didn’t succeed for various reasons, mainly to do with funding. But it did get quite a lot of users and a lot of support amongst the millennial and Gen X community. And it was a bank called loot launched by 21 year old University dropout, lots to

Jason Hartman 29:37
love it. So, but but in the US, I mean, you’ve got to get FDIC insurance, and that’s gotta be super complicated, right? navigating that you’ve got to have, you know, a million FBI background checks and tons of regulations. So when you talk about launching a digital bank, is that outside of the US, or can you do it

Chris Skinner 29:59
more And then 26 and and others are coming to the US from Europe. And what they’ve realized is that the best way to start a bank is not to be a bank is to be a prepaid card with a cool brand. And then you build the online community, the social network on finance. And you do it in such a way that people like the way that you talk and the transparency that you offer. And you got gradually launched more and more services and loops going back to being launched by 21 year old University dropout. Again, it wasn’t a full bank, what it provided is the front end app. And it then brought in API’s and back end services from other providers who did a lot of the regulatory piece, for example. So y card is a big financial back office provider in Europe that does a lot of the pain of regulation and allows people to go and do the cool stuff at the front.

Jason Hartman 30:49
But how much capital Are you talking about that someone needs to start a bank? I mean, that sounds like a just a giant undertaking. I do see the way I see the path that you mentioned. And I think that it Really cool, by the way, you start with your audience. And you you start with maybe one application, and you build from there and just keep adding services. But when do you become a bank bank? You know, sort of what’s the definition of ads? I guess, when you take deposits,

Chris Skinner 31:18
right? That’s the bank. I mean, to build to be a full bank, you have to take deposits. That’s when you have to have the FDIC capital coverage of all of your operations. And you also have to have the due diligence of the Federal Reserve looking over your shoulder making sure that you’re doing the right things, you’ve got the right governance, the right people on the executive team, etc. That sounds

Jason Hartman 31:38
like a lot of money and compliance cost and lawyers, accountants, auditors, etc.

Chris Skinner 31:44
So first off is Jason, the minimum amount you need to be a full service bank from the get go is $30 million. And that’s just to get the license. That’s not to launch the operations. That’s just to get through the gate, right. So $30

Jason Hartman 31:55
million, is considered ultra wealthy 30 million net worth and above So I don’t think a lot of our listeners will qualify for that, I actually know that a couple of them will.

Chris Skinner 32:08
If you roll it back to my university dropout, you can launch the tertiary services with $50,000. You don’t need 30 million. And then you build and build and build. And as you get the momentum, you get the venture capital and investor support, you get the customer support, and you take it from there. So it’s step by step. Don’t try and eat an elephant all at once. didn’t do it one piece at a time.

Jason Hartman 32:31
Okay, so the future and you know, in your book, the digital human, you talk about robotics and other fascinating things. Let’s switch gears and talk about that a little bit.

Chris Skinner 32:42
Yeah, I mean, I’m a big fan of technology. I’ve always been in the technology industry in financial services, which is why I was talking about those two things. And I always focus on the future because that’s what we don’t know. But what was interesting is that until the pandemic, I’ve pretty much been traveling non stop for a decade, and I’ve seen nearly every nook and cranny of the world. And I generally ended up in museums and churches and temples, learning a lot about the history of humanity. And it kind of struck me during those travels that we initially became human because of shared beliefs, because we could communicate because we haven’t voiced a larynx. Then we had another revolution when we became civilized and created farming, so we could live in cities and towns. And then we had and at that point, we invented money. I mean, another revolution when we started to connect across borders and across continents, and went through the Industrial Revolution, which is when we invented banking. And now we’re going through another revolution because for the first time ever, in humanity’s history, every single human on Earth can connect directly in real time, anytime all the time. And you and I are experiencing that right now because we’re on different sides of the world. And I have Zune calls almost every day where I’m meeting people in every single country of the world. But the fact I still have that global connectivity, although I’m sitting at home for the last three months is quite incredible. that’s never been something available to humanity before and it’s changing the way we think and do things. And a lot of what’s happening right now is going to turbocharge that technology transformation. I just was writing something about 2030 arrived in 2020, which is because when it was being locked in at home, suddenly everyone said, Well, we have to do things differently. We have to shop from home, get everything delivered. And that behavioral change is going to be fundamental shift, that will actually impact your audience massively, massively because of the real estate drop, you know, in the UK just got a statistic that they just ease the lockdown and everyone’s gone to the shops. But compared to a year ago, the numbers that went to the shops is down 69%. Yeah,

Jason Hartman 34:41
absolutely.

Chris Skinner 34:42
Yeah. Amazon and Kobo going through the roof.

Jason Hartman 34:44
Yeah, right. And you know, the three primary value drivers for real estate have always been even since we were living in caves, location, location. And eight years ago, in 2012. I started saying That location is less meaningful than it’s ever been in human history. I started saying that on my show back then, eight years ago, and I was primarily saying that not necessarily because of all the technologies and you know, we had WebEx 20 years ago, okay, you know, this, we had Skype many years ago to these technologies are not really new. But the adoption has been, you know, somewhat mediocre, really, until the last three months, which is great. I mean, they’re, it’s wonderful that people are finally, really, really using these things. I mean, even my mother now will use all this stuff, right? She wouldn’t work. And the reason I said that in 2012, was because of the rise of autonomous vehicles, the self driving car was gonna change the location being so meaningful. And you know, like you said, You live in Poland, in an somewhat out of the way place it sounds like and you can still be fully connected. That’s great. That’s incredible.

Chris Skinner 36:00
You know, I was just gonna say there’s two big big behavioral shifts that happens. Immediately this lockdown came in. One is that for some reason everyone wants to connect on a video call, which we never did before, quite happy with a phone call. And actually, we’re connecting more and more often. So take your mother. And my mother might mean my mom is 92. And I’m talking two or three times a week on zoom when I used to speak to a one time a week on the telephone, yeah, but the other second big shift in behavior is that people have downloaded loads and loads of apps to have more things that they can do easily on on their mobile devices, specifically mobile banking, and a lot of people were wary about using digital bank services that’s again completely fundamental shifted. Now we’re not going to go back to doing the way that we were doing things before and one of the trends that I spotted going to your point from 2012 about location location is you I saw it in China first twitches and and India Which is a lot of entrepreneurs who had to move to cities to get work, have now gone back to the villages because they use the internet to work, right. And that is a massive shift in the way in which urbanization and society will operate.

Jason Hartman 37:12
Right. But it’s also a digital divide, because some people can’t do that. And man, that’s what that’s what we’re really seeing. And I think that’s going to shift the pay structure a lot. I think all of these people that have been doing these physical jobs have sort of been getting gypped they haven’t really shared and a lot of the prosperity in the economy. I mean, it’s kind of odd to me that, like, Why do Why is it always been food workers get paid so poorly? You know, if you’re a waitress, you can make good money with tips, right? Or at least in the States, you can, but you know, if you’re the cook in the back, unless you’re like a famous celebrity chef or something, you’re getting meager wages, and that job isn’t very enjoyable, in my opinion. It’s just sort of a it’s odd that it’s that way, like I don’t know why evolved that way. I mean, obviously a lot of people have that skill a lot of people can cook. So there’s there’s not a rarity to it. But a lot of people can do digital work too. The technologies become so easy thoughts on that

Chris Skinner 38:12
was interesting that I’m going back to your earlier questions. I didn’t really answers some about robotics and artificial intelligence. And the word robot actually comes from where I live right now, Poland. It was first used, in fact, the Czech Republic, which is a next door country, and to describe forced labor, doing drudgery. And that’s what robot means that it’s doing drudgery work, right. And so many people are doing that sort of work. Is that What amazed me and again, to your point is that when we had this lockdown, who were defined as essential workers, well, it wasn’t bankers and technology. Exactly.

Jason Hartman 38:50
Right. And hospitals and driving buses and working at the grocery store.

Chris Skinner 38:53
Yeah, exactly. Exactly. And so what’s gonna happen and this is a huge debate, and I don’t know the answer. But being honest because I’m I’m not an economist, and this isn’t an economic question is what happens when people no longer need to work? What? How will we structure society?

Jason Hartman 39:09
I’ve been wrestling with that forever. I mean, is it universal basic income. You know, when you look at the robotic revolution, it’s way more than just these menial, repetitive tasks, you know, flipping burgers, etc. It’s writing music, writing articles doing all sorts of things humans do now. Are we all just going to live in this world of abundance that’s created by the machines or is there going to be massive unemployment and civil unrest? I mean, which way is it going to go

Chris Skinner 39:36
when we got a little bit of an answer around it during the last three months in the some Coronavirus crisis, which is what have we been doing at home in my case, I’ve been getting much closer to my loved ones sharing a lot more time with them learning door trying to learn to speak Polish, which I’ve never had the time to do before, I think getting by on the piano, which I played 40 years ago, but haven’t touched since. And that sort of stuff and so it He says the online a lucky position because I can afford to do that. If you don’t have the universal basic income, if you don’t have some way that he would just get the basics of food and shelter, then you have an issue. And I think what we’ll see is that governments will be forced in the next 10 to 20 years as more and more jobs are automated, that they will have to give people food and shelter as a basic human right.

Jason Hartman 40:23
And I agree with you, even my most libertarian friends that don’t want the government to do any of this stuff are saying UBI is the future. It’s it’s going to happen. And it’s all we’re already seeing evidence of that now. You know, I agree. I had Andrew Yang, the presidential candidate on my show that was a big part of his platform was universal basic income. And that’s gonna happen, right? That’s it’s just got to do

Chris Skinner 40:49
maybe, because there’s a downside to it, which you’ve seen, maybe on the first peoples reservations in the USA or we’ve seen an experiment So being taking place in the Nordic communities in Finland and Norway, which is if people are given everything, so they don’t have a work ethic, they can fall, fall off the wagon and start to abuse themselves. So it’s kind of where’s the pride in not doing anything? You have to encourage people to do something. But the question is, what are we going to encourage people to do? Is it to be creative and emoting or share emotions and relationships? Or is it going to be to do drudgery? It definitely won’t be to do drudgery. So it will rise to be something new above what we are today, I hope.

Jason Hartman 41:34
Yeah, there’s definitely a moral hazard in that and we’re already seeing it with these enhanced unemployment benefits in the US, people won’t come back to work now that we’re having things reopen. A lot of people are just deciding, you know, I’ll just stay home and collect, collect my government money. So it’s quite interesting. Yeah, yeah. Wrap it up with a closing thought and give out your website.

Chris Skinner 41:55
sure that the website is the financer.com with an S because it’s short for financial services, and also Chris Skinner dot global which is where you’ll find everything about me.

Jason Hartman 42:05
All right, any closing thought you want to mention?

Chris Skinner 42:08
I think bottom line is you know some people said that I’m way too optimistic because digital human and this was the view that eventually we moved to being far more like Star Trek and Gene Roddenberry when he invented Star Trek categorically refused to allow money to be exchanged, because in the future, his view was that we deal with the betterment of humanity and not with the generation of wealth. That’s an interesting thought will ever happen. I don’t know. But it would be interesting if we all just talk about the humans.

Jason Hartman 42:36
Right. That would be interesting. We’ll see if that can happen. Chris Skinner, thank you so much for joining us. Cheers Dyson.

Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website Hartman Mediacom for appropriate disclaimers and terms service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

AMA 361: The Coming Financial Crisis & Crisis by Design by John Truman Wolfe

Former senior credit officer for two California banks, and editor and publisher of The Strategic Financial Intelligence monthly newsletter, John Truman Wolfe joins Jason Hartman today talking about the coming financial crisis. The question is, will the bubble pop, if so, what will happen? As well, John and Jason talk about banks worldwide, who to trust, how much to evaluate them, and what they’ve done wrong. Will banking eventually lead to a global digital currency?

Books: The Coming Financial Crisis & Crisis by Design by John Truman Wolfe

Key Takeaways:

[3:30] Big news from the Federal Reserve.

[9:30] How long will the Fed keep interest rates low?

[13:00] People keep predicting the end of the world, and it’s yet to happen.

[14:00] John Truman Wolfe

[1:15] Talking derivatives: the thing about the thing.

[1:45] Will this bubble pop, and what will happen if/when it does?

[6:00] John discusses the BIS (Bank of International Settlements) and the Bail-In Policy.

[8:45] What should people do, and what banks are safe?

[13:40] How often should you evaluate your bank, and in what should you look?

[18:45] The biggest problem for the U.S. dollar is that the Fed has thrown 5.2 trillion dollars into the economy out of thin air.

[34:00] Could we move to a world monetary system in the form of digital currency?

Websites:

StrategicFinancialIntelligence.com

johntrumanwolfe.com

JasonHartman.com/Asset

JasonHartman.com/Webinar

www.JasonHartman.com

www.JasonHartman.com/properties

Jason Hartman Quick Start

Jason Hartman PropertyCast (Libsyn)

Jason Hartman PropertyCast (iTunes)

1-800-HARTMAN

The Economy of the Spanish Flu

Jason Hartman centers the show around the historical example of the Spanish Flu in relation to the current pandemic. He gives us insight into the state of the economy before, during, and after the Spanish Flu. He talks about the change in value of currency then looks at how our pandemic recovery might look like. Later he discusses the largest wealth transfer in history. As more baby boomers are passing their wealth to millenials it is interesting to see how this generation will use the inherited wealth.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multimillionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:53
So Today we have got several good things to cover. Number one, let’s look at history a little bit and talk about the economic recovery after the Spanish Flu 102 years ago, we had another pandemic, actually, we’ve had some other things between between that and COVID 1984. But we need to look at an analyze how and why there was recovery after the Spanish Flu of 1918. So we’re going to do that. We’re going to talk about the biggest wealth transfer in history. And I am so glad that somebody else is finally talking about this, because I’ve been talking about it for a few years now. And no one has really looked at this mature, talked about it or published any statistics on it that I’ve seen. I mean, when I say nobody, of course, it’s a figure of speech. I’m sure there’s somebody The 7 billion people in the world that have done that, but it’s been largely a secret. But today, we will explore Today we will explore. And I want to remind you that this Saturday, we have for meet the Masters attendees, we have our follow on, we’ll call it an extension class on asset protection, a deep deep dive into asset protection. And that will be on Sunday that is a live class with our asset protection specialist attorney. And he’s going to be going into a much deeper look than the webinar he did for us a couple of months ago. And we’re going to be discussing some advanced techniques and some other options outside of the usual you know, most of you have heard the usual by now, but we’re going to talk about some stuff that’s kind of the next level the next level of asset protection. So if you attended meet the Masters, you got an email a text message or maybe both about this. And it starts at 8am, Pacific 11am, eastern time on Saturday. And then of course, Sunday we have a live stream, where we’ll be talking about becoming an empowered investor. But let me share with you a few things that relate to becoming an empowered investor before we start on all of this other great stuff. Number one, let’s talk about some beliefs, some beliefs. What do we believe in? You know, it’s been said that the history of the human race is nothing more than the history of belief. And if you think about that, Isn’t that the truth? The history of everything in the human race is simply the history of belief. And it is so incredible how powerful beliefs are, and how they can really fool us because a lot of these beliefs are hidden below the surface. And they cause us to think and act in certain ways that we don’t even know we don’t even know we’re being influenced by these beliefs. So for those of you who have been following my work for a long time and attended live events back in 2004 2005, on up to about 2009, when we used to host events at our office in Newport Beach, and then later our office in Costa Mesa, California, and we had a smaller office after that, as we were getting to be more virtual, more remote. And that was an office in Irvine, you probably never visit us at that office, you might have if you just had an appointment with one of our investment counselors, but not for an actual conference because at that time, we were doing the conferences in hotel facilities. So we used to have these tiles on the wall. They’re literally porcelain tiles. And it’s an old saying, and it is so good. It is so valuable as to what it talks about belief. So I literally just pulled the tiles off my shelf here. You can hear them that claim plank. These are actual tiles I’m reading from Yes. You know, it’s like some ancient tablets, right? Or scrolls or something like that, right? It’s like the, it’s like the 10 commandments, you know, written in stone. So here it is. These are such great words. Watch your thoughts. They become words, Watch your words. They become actions. Watch your actions. They become habits. Watch your habits. They become character. Watch your character. It becomes your destiny. Wow, isn’t that good? That’s so good. It’s worth rewinding and playing that again. Isn’t it? Okay, so what are some of the beliefs of an impact investor. Number one, and there are many. So I’m just going to go through a couple of them today a few. We believe in ratios. We believe that ratios are much more important than absolute numbers. Why? Because ratios answer the Jason Hartman question, compared to what? A ratio a percentage, much more important than an absolute number. You know, many of these, you’ve heard me talk about them. You’ve heard me say them in other ways. They’re woven into the core of the philosophies we’ve been teaching for the last 1617 years. Okay. We believe in the theory of relativity, as it applies to investing. No, not Einstein’s theory of relativity, not equals mc squared, the theory of relativity as it applies to investing. And that really is about compared to what it’s about the size of the economic pie. It’s about relative To asset prices in any given market, so just understand that it’s all relative. We also believe that nothing can take the place of persistence. There’s that great quote, you know, nothing can take the place of persistence, talent will not genius will not etc, etc. I don’t have the quote in front of me, but read Richard Nixon’s book in the arena. I know, this is old school stuff. But that is a brilliant book by tricky Dicky, or late President Richard Nixon. It’s a really good book. He was he was a good writer, and someone who has been through all the stuff that he had been through in his life really can teach us something I’m not, you know, endorsing him or saying anything. But you know, he really did become a great elder statesman in a way and has some great advice to share in that book, in the arena about persistence, and about what it takes to get through tough times. And we’re all going to go through them. In one way or another, we believe in alignment of interests. And that is critical to success. Now, that’s what I really talk about. When I talk about being an empowered investor. And on Sunday’s livestream, both on YouTube and Facebook, you will hear me talking about becoming an empowered investor. And some of the ways you can do that. And we also believe that it is an amazing time to be alive. It really is an amazing time to be alive as is bad as so many things are in the world. There are so many amazing things at the same time. We believe in the long game, and the big picture, the long game and the big picture. We don’t look at day by day stuff. We look at the big picture. Now we live successfully every day. But that daily success is just like putting One more brick in the building that you’re building. Each of those days, each of those bricks come together to make a great month. A great year, a great life. Okay, so those are some important beliefs of the empowered investor. So we’ll get to more of that stuff as time goes on. Okay, now, let’s talk about the biggest wealth transfer in history, and why it is upon us. Now, this is a great clip from economics explained, I absolutely love these guys. I support them on Patreon. They do a great job and have some great content there. You can find their YouTube channel. And then I want to talk about the Spanish flu. And take a look back in history, see what happened and how the world recovered from that. And what am I tell us about current day? So let’s first take a look at this video. wealth transfer, again, something I’ve been talking about for quite a while. And really just nobody’s talking about this. And so this was the first I saw of it. And they really did a good job talking about it. So let’s dive in,

A Clip from “Economics Explained” 10:14
prove the laws of a new wave of middle class workers.

Jason Hartman 10:17
So what they’re talking about here is, as the now called baby boomers came back from World War Two, and the US was really the, the country that had the industrial powerhouse left, you know, Japan was destroyed, Europe was destroyed. And the US was the the sole in big industrial actor in history. That was a very powerful thing that led to waves of ongoing prosperity. But we know that it led to a lot of other things that weren’t always so good.

A Clip from “Economics Explained” 10:53
It’s all coincided with a massive spike in birth rates, because well, people would lose three years years of grueling conflict and they were ready to start families. The generation formed by this boom and new babies needed a name, but the jury’s still out on what that will be. generational naming conventions aside these posts, all babies are coming up against some harsh realities, sad guarantees in life or death and taxes. We will actually cover both of those here. But the important one for now is that the wealthiest generation in history is starting to retire and die. In doing so they will be responsible for the largest wealth transfer in history as they pass along a collective $30 trillion to their beneficiaries over the next few decades in the United States alone.

Jason Hartman 11:39
Okay, so, you know, the concept of these demographic cohorts whether they be the silent generation, the greatest generation, the baby boomers, the Gen Xers, my generation, the generation, why are millennials and now the Gen Z ers right? Those really Not completely even across the globe, of course, we’re only really looking at them in terms of the US. Okay. And so the baby boomers, about 76 million Americans depending on who you talk to and how they’re doing the math in terms of the exact birth here and, and such a demographers disagree on this stuff slightly but, but that’s the gist of it. This equates to about 10,000 people turning 65 every single day now at this rate, and it is truly startling as we’ve watched this group move through the economy. It is absolutely amazing the impact they’ve had. And you know, this is why I say, watch old movies, watch old TV shows so you can understand how they think. Maybe you are one of them. And you already know how your generation thinks Okay, fine. But sometimes you even need to be reminded, you know, that’s why I say watch a movie or a doctor. documentary about the famous Woodstock concert in 1969. Okay, in Woodstock, New York that really tells you a lot about the formative years of this generation, as they were coming of age. It’s very, very enlightening. Last week, or maybe a week before I watched the doors movie, you know, I had originally seen that movie years ago when it was in the theater. And I watched it again, you know, other than thinking the music of the door, some of their music is quite great, really good stuff. You know, it’s just really interesting to watch that movie and see what it was like back then. Of course, a movie is never a perfect depiction, I totally understand. But it gives you a sense of it, and nothing really does that better than a movie, TV shows. Second, the book third, you know, reading old newspapers, things like that. But it’s really important to understand how these generational demographic cohorts influenced the world and how they think of capital movement. is going to have some extremely significant impacts on the economy, some of which we’re already starting to feel. So what is actually being passed along? Will this stuff maintain its value in the hands of its new owners? Should we tax it? And finally, how might this actually be a huge economic problem? So we’re talking Remember, we’re talking about $30 trillion, with a tee. This is hugely significant. So for all of you who have heard and are thinking, Well, you know, the millennial generation as a bunch of slackers, what are they gonna do? They gotta get their act together. It’s not all their fault. They sort of came of age in a bad economy, some of them not all of them, but some certainly did. Some are graduating college around the time that the economy was in the Great Recession. And it’s all different because it’s many years right. There are millennials that are turning 40 and then there are millennials that are younger, so it varies. But most of this wealth transfer goes to the millennial generation. So get ready folks, because everything is going to change as this transfer occurs.

A Clip from “Economics Explained” 15:11
Beanie Baby collections share portfolios and houses. All of this money changing hands is bound to give a boost to the wallets of a younger generation, which has famously been saddled with economic headwinds like student loan debt, stagnant wages and turbulent job markets. You might be forgiven for thinking this is great is finally going to give them millennials the healthy financial boost that they need to get into homes or unsettled themselves have debt or just become bigger spenders in the economy. And while there are definitely going to be some good things that come from this transfer, it may not all be good news, but from the top. The first impact this will have is an upward pressure on demand. A paper published by the American Economic Review found that around 70% of households who received an inheritance windfall and spend all the money we In the space of five years,

Jason Hartman 16:00
you know what they say it takes one generation to earn it and one generation to blow it. And then it circles back again, the next generation earns it, and then the next generation blows it. This is a historical fact. It just happens throughout history, right? So can you imagine someone inheriting this kind of wealth and just frittering it away inside of five years rather than investing it? And hopefully, that won’t happen. But we’ve all heard the stories of the lottery winners who are broke two years later. So we’ll see. Let’s hope that the millennials do a better job with their inheritances. But, you know, I’ll tell you something to the millennials credit. A lot of them are pretty frugal people. Now, I’m not you know, maybe some are overly frugal, but they have just found ways to get by and keep your expenses low. And some of them are pretty pretty, you know, they’re not like I guess like, my generation might generation was bad, even though probably nobody noticed. But my generation during that bit came of age kind of in the womb, depends what part of my generation, but some of my generation, some of every generation, and certainly some of the baby boomers were really showy with their money. You know, they’re buying expensive cars, they’re buying trophy assets or not assets, trophy lifestyle, perks, designer clothes, yachts, whatever private jets, etc, etc. And some of them are just more prudent with the money. But I think Millennials are pretty, pretty cautious, prudent generation, of course, you can’t can’t stereotype completely with anything, but we’ll see. And, you know, what does this mean for the economy? What does it mean for the real estate market? These are all big good questions to be asking

A Clip from “Economics Explained” 17:48
financial management on their behalf but for the wider economy that frivolous spending will create jobs and business opportunities for people from the people in the jetski industry and it is worth quickly noting that this paper and its findings are old. He was originally published in 1959 and then revised in 1961. But since then consumers Marginal Propensity to Consume has only risen, meaning that for every extra dollar people are receiving, they are spending a larger portion of it rather than saving. Also, more recent, but less comprehensive studies are still finding the same figures, this interesting phenomenon and there are a few things to pull apart from these transfers. For starters, smaller inheritances are more likely to be squandered. Now, obviously, it is easier to spend less money than it is to spend up more money, but it actually has more to do with what this money can do. And inheritance of less than $100,000 is not necessarily life changing for most US citizens. Don’t get me wrong. It’s a lot of money, but it won’t let the average person quit their job and it probably want to call it I have purchased item.

Jason Hartman 18:55
Okay, now, let’s switch gears here. Okay, and we’ll we’ll switch back and forth for a moment. I want you to consider the recovery from the 1918, Spanish flu. I’m going to play a clip for you. That explains it. This is just part of a channel called history time. Okay, just a very small clip. And I want you to consider what happens if this type of recovery occurs. And it is combined with this huge wealth transfer. What does that mean to the economy? What does it mean to the real estate market? And all of this considered in the backdrop of the Jeremy Siegel, Michael Milken article that I was sharing in my creating wealth seminar back in 2004. And I’ve mentioned it here on the show several times over the years. And it is the article where Jeremy Siegel says There will be a huge asset shortage. He says, with all the people coming out of poverty into the middle class at that time, by the way, it was much lower number, because he was talking about how 270 5 million people have been pulled out of poverty and into the middle class around the world. Okay, so that’s 270 5 million out of, you know, 7 billion plus a very significant number. Because already a lot of people around the world we’re in the middle class, you know, this is if you’ve got the 3 billion in the lower classes 270 5 million is nothing to sneeze at. That’s very significant. And it’s only become more so since then in the last 15 years. So think about that. Think about this is Jeremy Siegel put it, the looming asset shortage and listen to this

A Clip from “History Time” 20:55
in the US at least in a shortage of Workers, those who’ve lost their jobs, it’s small or an essential businesses that have been shut down during the pandemic found new work with factories and assembly lines where the demand for workers skyrocketed, and the qualifications required for minimum. For the most part, those who wanted work could find it. And sometimes it’s the power of unions grew. They could demand more for their services than ever before. increasing social mobility and eventually leading to the establishment of the American middle class.

Jason Hartman 21:42
Remember, they didn’t call it the roaring 20s for nothing. Okay, so you’ve got up into the beginning of the Great Depression, which most people kind of consider to be 1929 stock market crash that wasn’t really the start. But we’ll go with AP just because that’s how most people commonly look at it. But between there, there was a boom time that wasn’t replicated until the post World War Two era when the baby boomers came back and America had its love affair with television and the automobile and home appliances, which they really weren’t a thing until the baby boomers. They were a little bit of a thing in the 20s. But they really got big after World War Two.

A Clip from “History Time” 22:30
a shortage of labor due to the pandemic in due course gave rise to escalated workers wages, meaning that is the roaring 20s dawn. For the first time, many US citizens could spend a portion of their paycheck on astounding new consumer devices like vacuum cleaners, cars and refrigerators, cutting edge appliances for the 1920s

Jason Hartman 22:55
now, you know I’ve talked to you many times about Edward Bernays and the beginning of the materialism era, and the birth of Modern Marketing, modern advertising and the whole concept of public relations. It’s right here at this time in history. Isn’t that interesting?

A Clip from “History Time” 23:18
Working Capital poured into post war you’re, there’s prosperity to a certain extent filtered in there to even Germany enjoying a brief period of economic food, social freedom.

Jason Hartman 23:31
Now, of course, that was Germany before the Weimer Republic inflation disaster, where literally, it was a word wheelbarrow full of currency to buy a loaf of bread. Unbelievable. In fact, pardon me when I repeat myself, I often do but if we’ve been doing this a long time, there’s a lot of episodes so you got to repeat yourself a little bit. But there was one story in the Weimer Republic Germany when I A person had their wheelbarrow full of currency full of stacked up paper currency, right worthless paper currency. And they couldn’t get the wheelbarrow through the door of the shop. And so someone came along the thief and dumped all the cash out of the wheelbarrow sitting outside and ran off with wheelbarrow because it was more valuable than the currency was in the marks. So think about that. What has intrinsic value, commodities have intrinsic value, and that’s what we invest in, especially in the form of packaged commodities. That’s what we call income property packaged commodities investing.

A Clip from “History Time” 24:43
As demand for fuel skyrocketed. Texas became rich from the oil industry. new roads were built to accommodate cars, resulting in greater mobility and in turn better job opportunities.

Jason Hartman 24:57
Remember how I’ve said to you over the years, the best thing you can have on a resume is mobility. There you go. greater mobility equals better jobs, which means people should not necessarily own the home in which they live, they should rent it. So they have greater mobility to go to where the best jobs are now granted with the remote working revolution, that’s less important. And by the way, I was reading an article this morning about school districts. And you’ve got to ask yourself, not just for career and work, but what about for school districts? How important is a school district when your kid is going to school online? Something to think about for sure. Maybe that structure is being diminished and torn down as well as it should be? I mean, the whole school district thing I always thought that was just ridiculous. Why are you destined to go to one school or another, depending on you know what block you live on. That’s just silly. It’s an old, archaic, public school idea that just doesn’t make any sense as most of the public schools don’t make any sense in the modern era, but it is what it is. That’s, you know, every everything evolves,

A Clip from “History Time” 26:14
funding steadily surged upwards. For the first time in US history, more people lived in urban centers than in the country, giving rise to better health care access for millions of people, better work opportunities, and the chance to indulge in newly invented technology.

Jason Hartman 26:33
So you see how that model is his reversing a bit right? Where you don’t need to live in the city obviously, you can live in the burbs or the country as long as you have a good internet connection and work remotely.

A Clip from “History Time” 26:46
So as an unusual side effect of Spanish Flu workers wages soared. Increased investments are made in scientific research and technology, better healthcare systems put in place greater levels of consumer spending and ever before the US became a lender for the first time, rather than a debtor.

Jason Hartman 27:10
Which, by the way, I was reading a book this morning about debt, a debt to GDP ratio. And I couldn’t believe how this author’s thoughts mirrored my own about how the debt really isn’t that high. And you’ll remember I’ve talked to you about that in the past, I compared the typical debt of a country, compared to the income of the country, the GDP is considered the income and then comparing that to an individual or a family. Typically, they’re going to buy a house to live in, that is maybe three times or four times their annual income. That’ll be the typical thing. And so why is it so significant? That if a country has a 100% debt to GDP ratio that’s so bad. I mean, I’ve always thought that these debt hawks are just going overboard on that. It just doesn’t seem that significant to me. But you know me, I like leverage. I like good quality, long term fixed rate, debt, and pay, especially if you have a reserve currency and you get to inflate your debt away. That’s a pretty awesome deal, pay your debt back in cheaper dollars.

A Clip from “History Time” 28:27
But perhaps most of all, the influenza pandemic of 1918 to 1920 gave people a change in perspective towards their own lives.

Jason Hartman 28:37
Now, this is important. This is the psychology in a post pandemic world, the PTSD that post traumatic stress disorder has different effects. And one of the effects and I’ve certainly noticed it with myself in the post 911 world in the COVID world, one of the effects is this slight feeling. I mean, it’s only slight in me, maybe it’s bigger than you, but I’m sure it’s crossed your mind is Hey, live for today life is fragile. Nobody knows how much time they have left. So enjoy yourself. And that’s exactly what happened in the post Spanish Flu era,

A Clip from “History Time” 29:20
encouraging them to go out and enjoy themselves while they could. Unfortunately, this heedlessness towards the dangers of economic instability, much like the events leading up to the 2008 financial crash would create a massive economic bubble. What goes up, must come down.

Jason Hartman 29:46
So that would be like the 80s into the 90s. You know, the 60s into the 70s that just that cycle just repeats itself over and over again, the early 2000s Late 90s, really into the.com bubble. And then that being fixed by Alan Greenspan, the maestro, and I say fixed very sarcastically, because he didn’t fix it. He papered over it with money with with easing the money supply, and then you went into the Great Recession. But then coming out of that, well, we all know because we all just live that the last 10 years right or 12 years depending on how you look at it.

A Clip from “History Time” 30:25
In 1929, much of the progress wrought as a result of unbridled laissez faire capitalism would be undone when the New York Stock Market suffered its worst collapse in history, ultimately, leading to intense poverty and hardship in places like Germany, that have been propped up by us investment, where for a time wheelbarrows full of cash needed to buy a simple loaf of bread.

Jason Hartman 30:53
Hey, I think I just said that right. If you go to Wikipedia and you look up the word inflation, you’ll see a picture of a woman in the Weimer Republic, basically throwing the Deutsche Marks into the furnace, because they were more valuable that paper currency was more valuable to yield heat and actually spend it. Can you imagine burning $20 bills, burning stacks and stacks of $20 bills to stay warm? That was actually a worthwhile equation back then, because the inflation was so rampant, that the money just became totally worthless. And of course, this led to the rise of a tyrant, and you know what his name was ate off,

A Clip from “History Time” 31:40
as well as American Midwest farmers who stopped to death in droves.

Jason Hartman 31:45
And what did that lead to that led to the mass migration and The Grapes of Wrath, john Steinbeck’s novel

A Clip from “History Time” 31:53
for the 1930s partly as a result of this economic depression fascist on the rise, another intensely difficult error down. But that’s a story.

Jason Hartman 32:06
And let’s not forget about Mussolini either. Anyway, we better wrap it up. I hope that helps. I just wanted you to think about those converging trends, okay, these converging mega factors, if you will, the pandemic recovery, the inheritance, this giant wealth transfer, the biggest that has ever happened ever in human history is upon us. 10,000 people a day, becoming 65 years old, only in the US the graying of America, the graying of Europe, the extinction literally, of Western Europe, Russia, Japan, and this PTSD. If it hasn’t set in yet, it will set in and people react to that differently. In many ways. I think, you know, I’ve talked about the modified square root recovery, right that if you look at the square root Sine, it won’t be like the typical square root sign where you’re coming along, it goes down, and then it goes way up. This will be the opposite. In my opinion, I think we will wake up into a smaller, more conservative economy. But when those wealth transfers, those estate transfers start hitting, it’s anybody’s guess, how will the millennial generation react to their inheritance? Now, certainly a lot of them won’t inherit anything. Because, you know, we know that so many Americans, if they had a $1,000 emergency couldn’t come up with the money. So that’s a problem, too. It’s uneven. But suffice it to say, there’s a lot of money sitting in the wings, that is going to transfer between the generations. And that is going to have profound effects on the economy, on the real estate market on the asset shortage that Jeremy Siegel and Michael Milken talked about wrote about so many years ago, I get that article so I can share it with you again. I haven’t looked at it in years. I just remember it because it was a very profound statement. No question about it. Anyway, we better wrap it up for today. I will see you meet the Masters people Saturday morning for our extension class Saturday morning. 11am. Eastern. We’re back on the online meeting for that meeting virtually. And then all of you all of you are invited Sunday 8am Pacific 11am. Eastern for our live stream on YouTube and Facebook. Join me get your questions answered. Live q&a asked me whatever you like. I love getting your questions, and we’d be happy to answer them but we are going to talk about what it takes to be an empowered investor. Until then, happy investing.
Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to Check out the show’s specific website and our general website Hartman. Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

Asset Matrix – Inflation versus Deflation

Jason Hartman starts the show by looking at single-family home sales and inventory. There’s been a low inventory in housing and one way to get more access is through the network. Jason shares a clip from a Creating Wealth Seminar explaining why single-family income properties are the most logical investment in an inflationary period. He discusses why the US is entering such a period under the Trump administration.

Jason Hartman 0:00
Welcome to this week’s edition of flashback Friday, your opportunity to get some good review by listening to episodes from the past that Jason has hand picked to help you today in the present, and propel you into the future. Enjoy. Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. Here’s your host Jason Hartman with the complete solution for real estate investors welcome listeners from around the world to episode number 797. Pleasure to be here with you today. Thank you so much for joining me. And thank you for reviewing rating and of course subscribing to the show. Really appreciate you listening and we also very much appreciate your feedback. And of course your reviews on the show on iTunes or whatever podcast platform you use. So thank you so much as we approach episode number 800. And then Episode Number 1000 will be here before we know it, won’t it? We have got an inventory shortage in the real estate world don’t we? Yes, we do. So in the news was out with an article just a couple of days ago, and it said January existing home sales show the fastest, seasonally adjusted annual sales growth. In almost 10 years, yes and IRS chief economist Lawrence Yoon, we had him on the show before. And you know, you got to take all the NAR National Association of Realtors stuff with a grain of salt. Of course you do. Because what does this largest trade lobbying organization in the world do? Well, they get paid to promote the idea of buying real estate and homeownership and all of this stuff. Some of the good, some of it bad. I would say that homeownership for oneself is not necessarily good, contrary to popular belief. And by the way, I’m glad to see that that belief is becoming a lot less popular. In fact, some of our colleagues in the industry that do similar things to what we do, and they do very well. They have a lot of investments, they’ve done very well for themselves. Interestingly, they like your humble host today. Are renters? Yes. I’ve been a renter for about five years now. No, actually six years, I used to always own my houses. And I just kind of don’t see the point. I like the flexibility. Now, I certainly believe in owning a lot of investment property, the most historically proven asset class in the entire world, only one one’s own home. Yeah, not so much. I don’t

Jason Hartman 3:27
see what the big deal is. It’s such a bargain to be a renter of an upscale property and in such a bargain to be an owner of a lot of bread and butter, basic properties that you can rent to other people. And again, so many people ask me this question. That’s why I just mentioned it for a quick moment here. What is the cutoff point? Right? Well, the cutoff point happens to be, I believe, just below the current national median home price, and what is the National median home price is $228,900 in the good old us of a single family homes a little higher than the median, because their median price is 230,400 and condos and co ops 217,400. And again, when you’re an investor, really, really, you know, I’ll make an exception to this once in a while if the deals good enough, but get yourself a single family home. Don’t be investing in condos and townhomes. They just ain’t is good for many reasons. They’ve got complexities to them. When you get a big, overbearing homeowners association and a bunch of people sharing the walls and things get complicated. Yes, collectivism does not work very well. This is one of the areas that doesn’t work. It didn’t work in the former Soviet Union very well either in it. It doesn’t work in Cuba, and it doesn’t work anywhere. It’s tried. It’s always a disaster, collectivism, communism, whatever. So, yeah, get yourself a single family home. That is really the most historically proven asset class in the entire world. But yes, sales are up, inventory is down. According to NAR home sales increased 3.3% to a seasonally adjusted annual rate of 5.69 million homes. January’s number show a resilience of homebuyers. In other words, businesses is booming. One of our clients who was just on the show recently and that was Matthias What a great contributor. And by the way, you haven’t even heard all of Matthias contributions. We have thousands of clients out there and we love it. When you guys you know, jump on the show with us contribute, share your experience, and you have a lot of great ideas and you do a lot analysis. So we really learn from you, we’ve been doing this so long, and it’s just been such a wealth of information has really come from our clients. Now, certainly a lot of it from my own reading from the company’s research and, and that’s what we do and hey, that’s what you pay us to do. That’s how we earn our money, doing research, sharing experiences, collecting and aggregating experiences of our clients and sharing them back with you. And that’s a big part of our job here. Yeah, Messiah just sent me a voxer this morning, saying that he had lost out on a couple of properties he was hoping to buy. I’m really sorry about that, that is a symptom of the market. And it’s a symptom of these local market Specialists of ours being just inundated with business and, you know, we we definitely hold sway with him more than any other source. So you know, they’re all in their local markets and they’ve got some buyers Coming to them directly, and so on and so forth, as you would expect, but for most of our providers, we are their biggest source of business, they really go out of their way to please our clients, and to take care of business with our people first, and you will certainly see the benefit of that. But again, some properties do slip through the cracks. And I just kind of try to

Jason Hartman 7:25
surrender to some things in life. I’m not much of a surrender person. I’m not very Zen like I wouldn’t say but I certainly value that concept. And I try to, I try to let that balance me and, and you’ve got to do the same thing in your own thinking in your own mind. And, and sometimes, you know, one door closes and another door opens. And when you look back on it, you just find out that hey, it was really good that that happened. That thing that seemed like a misfortune at the time, really turned out to be great news. So anyway, that’s that’s how it goes. Yeah, listed. are in short supply inventory is in short supply. Get with your investment counselor at our company, let them help you let them work with you individually, of course, go to the Jason hartman.com website, click on the Properties page. But again, and you know, this is true in a lot of areas of life. Sometimes the best properties just aren’t on the market yet. And you’ve got to work with the investment counselor, and really, really, you know, get those properties. The second they come up. Okay, that is the market we’re in. And it’s probably going to be the market. We’re in for a while as we work away under the new Trump administration that is going to be, in my opinion, just a boon for the economy. I mean, things are just the growth is going to be fantastic. I know Trump is making a lot of missteps. I agree. I mean, he’s he’s pissing a lot of people off, but hey, some of it. I actually Like, and I totally agree with him on some I don’t like too much, but it is what it is. But for the real estate market and for business, our first real estate president, our wealthiest president ever, really one of the few business people presidents we’ve ever had. And now we have had a few throughout history, but not

Jason Hartman 9:18
many, not many. And so I’m I’m really, really optimistic now, with optimism, and with economic recovery and progress and advancement comes what the natural thing that comes with that is in fallacious and what comes with inflation, higher interest rates, yes, Goldman Sachs is out with a report talking about how interest rates will rise to 5.5%. Now talking about mortgage interest rates will rise to 5.5% by 2019. That’s not far away. You know? What a good year in three quarters. Right? And remember, when I talk about those in mortgage interest rates, we’re talking about owner occupied homes. Okay, that currently sit around 4.15%. So that is a very, very, very significant increase in rates. Okay? Remember, don’t be the fool who thinks that when the rate goes from 4% to 5%, it’s a 1% increase? No, it’s not a 1% increase. It is the delta between those two. So here, Goldman Sachs is talking about rates going up. What would that be? You know, I’m not looking at my calculator right now. But that would be more than 25% that increase in rates right. What am I right on that? Yeah. You know, when you when you take 4.15 and compare it to 5.5% That is hugely, hugely significant. Okay? And remember, for if you’re if you’re one of these really, really foolish people, okay? And look at no person is always foolish at all or always smart, right? We just have moments of foolishness we all do. You know, it’s like that great lyric and one of the Android rubber Weber songs, he says, I think it says, Love makes fools of all of us, right? Love makes fools of all of us. And so, we get foolish look at we’re all human, we all go with a mob mentality. And that can really hurt us sometimes. Sometimes, you know, the momentum of the market and, and the vibe of people. It’s a good thing. You know, it just depends. That’s why we have to use our intelligence and we have to really think things through and and use our power of reason and iron Rand’s philosophy of objectives. Yes, we had urine Dr. Urine Brook on the show recently, one of the one of the people who heads up the iron Rand Institute in Irvine, California, where I took some objectivism classes years ago. Good, good stuff who is john Galt? Yeah, I mean, hugely significant increase in interest rates potentially coming. So if you’re being silly and you’re being foolish, and you think you’re going to time the market, and you’re waiting for the big Harry dent crash, where he doesn’t identify the difference between linear markets, cyclical markets and hybrid markets it just foolishness, Harry, think think think,

Jason Hartman 12:42
come on. You can’t call all real estate the same. It’s not the same. Just in the US alone. 400 real estate markets for hundred real estate markets. How can you talk about real estate as if it’s one thing How can you talk about the entire planets real estate as though it’s one thing that’s absolutely psychotic, it makes no sense whatsoever. But that’s why you need to listen to a real estate specialist, not a generalist, because generalists don’t make distinctions. They talk in sound bites, and they’re talking about so many different subjects, that it just doesn’t it doesn’t work, right. It doesn’t work. Well, hey, look at without much further ado, here. We gotta get to our guests segment today. And our guest is Jason Hartman. Yeah, he’s going to be talking sharing a live talk that I did several months ago at our event in Phoenix. And I think you’ll really enjoy this. I talked about it many years ago at meet the masters of income property, one of them that we had in Orange County, California years ago. And it is the asset matrix, where we talk about and I compare how different assets perform in inflationary environments and deflationary environments and stagnation environments. Okay, so the three basic economic maladies, inflation, deflation, stagnation, deflation literally being the scariest and the worst and something that central banks and governments just cannot let happen. So they will print money into oblivion to stop deflation. And I believe they will succeed because there is no limit to the amount of money they can ever print. So if you think they’re gonna let deflation happen, I wouldn’t bet on that, you know, never bet against the Fed. never bet against the government. never bet against the most powerful forces, the human races ever known governments and central banks. Okay, do not do that. Always bet with them. If you’re betting against them, what are you doing? You’re buying gold? Okay, you’re crazy. Gold has been a terrible Performing asset over the course of, you know, the last several decades since we went off the gold standard in 1971. Now it’s had its moments of greatness, no question about that. But overall, crappy terrible tax treatment. No cash flow. No financing available gold. Yeah. Amateur investment? For sure. Insurance. Yeah.

Jason Hartman 15:20
Okay have a little bit if you want, but it’s not an investment. Income property, you’re betting with the Fed, you’re betting with the government, you’re betting with every central bank in the world, you’re betting with every government in the world, you’re betting with your hitching your wagon, you’re hitching your star to the most powerful forces the human race has ever known. And that is very, very good. So let’s get to this talk. But of course, and by the way, I am so happy that we have several new guests, coming to our upcoming venture Alliance weekend here in Las Vegas. Nevada, that is going to be March 10 through the 12th. We’re going to be at the gorgeous Wynn and encore Hotel in Las Vegas. And we’re just going to have an awesome weekend. We’ve got the former governor of Nevada coming to speak with us. We’ve got a couple of other speakers we’re talking to having lined up yet. You’ve heard them on the show. One of them is quite famous, by the way, and we’re going to do some funny stuff too. We always make sure we combine fun in there with our networking and our thinking and our masterminding. And it’s just gonna be a fantastic event. Some of our local market specialists are coming this time. So if you want to really get close to some of our local market specialists in the different markets, they will be there. You can talk with them, you can get in good with them so you get the first pick of the best properties. You can come one time as a guest for just a $2,000 one time fee if you decide to become a member, we apply your guest fee to your membership so long As you join, you know, within a week or so, after coming, you can’t think about it for six months and then say, Yeah, I want to join, then you got to pay full price. But yeah, it’s it’s a great thing. So come and join us in Las Vegas, you can check that out at venture Alliance mastermind calm or on Jason Hartman calm in the events section. And then also, of course, we’ve got our Memphis property tour that by the way, certainly that has not sold out yet. But you know, those tickets have been selling like hotcakes. That event, I’m pretty sure is going to sell out our big Memphis property tour at the beginning of April. So check that out at Jason Hartman comm as well in the events section, and we will look forward to seeing you at these next two events. And by the way, venture Alliance members get our property tours, our meet the Masters event are creating wealth seminars, our GHQ live events, they get those all for free. And that’s really great. Remember, You’re listening to flashback Friday. Our new episodes are published every Monday and Wednesday. Join us for those two events. We’d love to see you there. And let’s get to this live clip where I talk about the asset matrix and how different assets perform in the three basic economic scenarios. Here we go.

Jason Hartman 18:26
One of the things I talked about at a meet the Masters event several years ago is I talked about the asset matrix strength of various investments in different economic scenarios. And so here we’re just covering inflation, deflation and taxes, not stagnation. But as you can imagine, of course, stagnation is somewhere in the middle, right. So this is an interesting matrix, because when you talk to the inflation people, and we know that income property as the most historically proven asset class in the world is fantasy. pastic in a deflation in an inflationary scenario, it’s a home run, right? But you’ll talk to other people who are, you know, big Federal Reserve conspiracy type people and so forth. And they’ll say, Well, you’ve got to own gold. The gold bugs will definitely say own gold, own precious metals. But I say gold because it’s a one dimensional asset class is very, very inefficient. And it has no tax benefits. Of course, it has no cash flow, and so on and so forth. All the stuff you hear me talk about on the podcast, but your mortgage is an asset. Most people consider it just a liability, right, but your mortgage is a fantastic asset, because you can take advantage of what we all talk about inflation induced debt destruction, inflation induced debt destruction, and that means that the mortgage will vastly outperform gold, okay, in the inflationary scenario, but really what you want in any inflationary scenario, of course is commodities in general. commodities are fantastic. So when you look at an income property, our properties are, of course made of all those ingredients. They’re made of concrete. They’re made of lumber. They’re made of glass, steel, copper wire, petroleum products, all of these great commodities that are traded around the world, and they’re not attached to any one currency. They have universal need. Everybody on earth needs these commodities, because they are in the the ingredients of any structure, any house or any, any kind of building. So when you look at gold, it’s helpful to just tell a little story that happened to me many years ago. This was back when the gold price was just over $400. And I got a call from this company, a gold dealer in Newport Beach, who advertises on the radio extensively, and this is when I lived in Orange County, California. And the guy calls me up and he says, Mr. Hartman, you know, you’ve got to invest in gold because the Federal Reserve and Iraq and Iran and all this uncertainty in The world you know, the the gold bugs love gold because of the doomsday scenario or the inflation scenario, either one, they love it for that reason. So he goes on to say, all of these reasons you’ve got to have gold in your portfolio. And I said, Okay, okay, stop, stop, stop. you’ve sold me. I will buy a dozen coins from you. A dozen one ounce you know, American Eagle gold coins, and I will send you the money. I’ll just send you a cashier’s check on Monday. You send me the gold. Great. So you’ve sold me Stop pitching me. Now. I go on to explain to him and this is admittedly just to do the Jerry Seinfeld thing and kind of razz him a little bit. You know what he does to telemarketers, right? And I said, so I’m an income property investor. I love investing in income property. And one of the reasons I love income property is because I can acquire that asset and I can rent it to somebody else and that produces income for me. Do you know anyone who will rent my gold coins? And of course, he says, No, people don’t do that with gold coins. And they said, Okay, fine, fine. I’ll give up the income. But the other thing I love about income property, and the reason I think it’s the most historically proven asset class in the world, is that income property can be financed for three decades with incredibly low, historically low fixed rate mortgages. And it’s debatable, like we were talking about at dinner last night, that that fixed rate mortgage is actually a negative interest rate. In other words, I’m literally borrowing money below the rate of real inflation, not official inflation, because we know the government manipulates those numbers and understates them. How do they understate them while they understate them with three major techniques waiting, substitution, and what hedonic makes the hedonic in index, which means the amount of pleasure you get from an item versus what you paid for the item, right? So the way weighting works is they just give more weight to one thing and less weight to another thing, right? And that will change the inflation index. And the way substitution works is they say, Well, if the price of beef goes up, they just think, Well, everybody will just switch to chicken. But maybe you don’t like chicken you think chickens a dirty bird, right? Which I, by the way, think. So that’s the reason that it’s manipulated just in those two ways. But with hedonic, it even gets more complicated and conceptually, the idea of hedonic adjustments. Remember the root word here is hedonism. Pleasure seeking, right? Is that they, they they have a logical basis, but in practice, what it means is that we as people, you, all of us are not entitled to progress. We’re not entitled to progress. So here’s an example. This computer when I bought It’s about two years old now cost about 20 $800. And now, I can get a brand new computer that is dramatically better than that one from almost two years ago. And the interesting thing is, if you, you know, buy Apple products, you know that they’re pretty much always the same price. You know, every new iPhone is pretty much the same price as the old one. It’s just better, right? And that’s the same thing that happens. So I’ll pay when I buy a new one, I’ll still pay about 20 $800. I always seem to pay about 20 $800 for a new Mac, right? But they keep getting better and better. So what the hedonic index will do is it will adjust the price and say if the new computer is twice as good as the old one, because what that’s Moore’s Law, right? The speed of the processor every 18 months, doubles and that’s why we get this massive obsolescence and that’s why if you fall At all my show the longevity and biohacking show. And you might also follow if you follow that show Ray Kurzweil right. He talks about singularity, this whole idea that humans will basically merge with computers by 2030. And one of his metrics for that is that a, the processing power of a computer would be equivalent to the human brain for $1,000. In today’s dollars, for $1,000, you could buy another human brain, pretty awesome deal, right? We’re not there yet, or they’re not there yet. But imagine what the hedonic adjustments will be then because literally our brains are the most incredible miracle in the universe so far that we know of right. So in the hedonic adjustment not to get off on another tangent in the hedonic adjustment. If this if the new computer is twice as good as the old one, and I still pay 20 $800 the index will assume I only paid 1400 dollars. That’s the hedonic adjustment. But I really didn’t pay 1400, I really did pay 2800. But what I got was twice as good. So you see how that works, the hedonic adjustments. So the mortgage because of inflation induced debt destruction, is the most powerful tool by which to take advantage of the home run of inflation. And I totally get that inflation is relatively now low now. And it has been for a couple of years unless you talk about the cost of health care, college tuition and real estate. What’s interesting is that nobody considers inflation to be the they consider to be the what’s called the rental equivalent in the price of a home that you’d have to live in, right, because we all need to live somewhere, but they don’t consider the price of becoming an investor. Interestingly, so and I don’t know of anyone that talks about this, but I think it’s a little legitimately part of the concept of inflation, because if the s&p and the Dow Jones and the price of investment property is higher, then it costs more money to enter the investor class. And we all know that the only way you really get ahead is being part of the investor class, right? Otherwise, you get creamed. If you have a regular w two day job, you are taxed at the highest rate of anybody. And if you rent, and if you don’t own income property, you basically have no real tax deductions. I mean, you can donate money to charity, but you still, unlike the beauty of depreciation, you still have to write a check for that, right? If you have your own business, or you’re an independent contractor, you can spend more money on your business and get a tax deduction for that. But you don’t get to take advantage of the non cash write off for the Phantom write off. So commodities are the typical hedge for the gold bug inflation, mindset people, right? So we here’s the what I call the ultimate investing equation. Basically what we do is we acquire a package of commodities because I call it packaged commodities investing, right? When you buy a single family home or an apartment complex, you’re buying all of these commodities that are traded globally, the copper wire, the glass, the steel, the lumber, the the labor that goes into it, the energy that goes into all of these commodities that have universal need and are traded globally not indexed any one currency, that’s important, because they have intrinsic value outside of any given currency. All right. So you acquire the commodities, that’s the house and the land is also a commodity. And then you go to the bank and you say, look, I want to buy these commodities, but I only want to put in a small portion of the money to acquire them. So the bank says, Okay, well, if you’re an investor And you’re going to rent these commodities. They don’t refer to it this way, of course, to somebody else, then we want 20% down. So the bank now gives you 80% of the money. And your leverage ratio is now four to one. Okay, so you’re already four times bigger than you otherwise would be, because the beauty of leverage, right, so so far, that’s the first part, the first two steps of the ultimate investing equation. You buy the package commodities already assembled for you, by the way, in the form of a house or an apartment building. You use, you use 80% of somebody else’s money to acquire them. And then you say, Well, look,

Jason Hartman 29:43
you know, this Jason Hartman guy tells me that debt is great when it’s used properly, but I don’t want to pay my own debts that would be really burdensome to pay my own debts. So I’m going to outsource the debt obligation to somebody else, and I’m going to call them a tenant. Okay. And in addition to telling that tenant to pay my debt for me, I’m going to tell them to pay me a little extra every month. And that’s called positive cash flow. Right? So now think of what we’ve done in the ultimate investing equation, we acquired a package a commodity is not indexed to anyone currency that is intrinsic, universal need. Every human on Earth needs these commodities, and they have certain scarcity limitations to them, right? And then we use 80% of somebody else’s money. And we get that money at three decade long fixed rate loans. So if we borrow this money today, in 2016, we won’t make the last payment or really our tenants won’t make the last payment on that mortgage. Until 2046. That is absolutely a spectacular idea. Okay, because in 2000 byte, by the time we go through the next three decades, do you think things will change? Do you think with all the debt The country has, and the unfunded entitlements? The what’s called the when I have Laurence Kotlikoff, the economist on the show twice, he talked about it and called it the 220 trillion dollar time bomb, trillion with a T, okay, the 220 trillion dollar time bomb. And with that, I mean, there is no possible way we can pay for this stuff. It’s impossible to pay for it by taxing the rich as all the liberals would say, you know, let’s just tax the rich, the rich don’t have that much money. We can’t possibly tax tax the rich enough to pay for the problem. And if we did, that would simply make the economy smaller anyway, right. So that’s impossible. Okay. So where are we in the ultimate investing equation? We bought the commodities we borrowed 80% of the money, we outsource the debt obligation to somebody else. But wait, there’s more. As they say on that late night infomercial, right? You get an extra Ginsu knife included, right? Well, it gets better, because then we say, look, the largest expense in any of our lives are taxes. And if we can eliminate or dramatically reduced the largest expense any of us have in our lives, we can build wealth so much more quickly. And so we go to the government and we say, hey, look, I’m doing exactly what you’re incentivizing me to do. I’m providing rental housing to people. And the real estate world has this giant lobby and this huge amount of special interest. And so they give it very favorable treatment, making it the most tax favored asset class in America. So we want to save money on life’s single largest expense. The government says, Okay, we’ll let you depreciate the value of your improvement on the property over 27.5 years. And we went over that yesterday. In Depth, we talked about real estate professional, we talked about qualifying for that, and how it does phase out, and so on and so forth and how you might be able to get it back if you can qualify as a real estate professional. But let’s say we can’t take advantage of depreciation immediately. And over time the asset appreciates in value like the refi to die scenario I talked about earlier, or Michelle’s great video talked about really, then we can 1031 exchange that asset and sell it tax deferred. So we get to reinvest all of the money over again

Jason Hartman 33:36
into a new asset. And as the cashflow dynamics change as properties appreciate what happens, the rent to value ratios get out of whack, right? That the rents lag appreciation always. It’s always rents that come up the slowest. And appreciation happens more quickly in the cycles where you have appreciation. So that’s the ultimate investing question. It’s pretty beautiful. And that’s why we’re all interested in this asset class. But just to finish the gold story, so as I’m heckling the telemarketer guy that’s selling me the gold, just to finish the gold story, I tell him, Look, I want to rent out the gold. He says, nobody does that. I tell them, I want to finance the gold for three decades in historically low fixed rate interest rates that are arguably below the cost of inflation. And since every gold bug is an inflation bug, he has to believe this right? Because he thinks the hedonic adjustments and the waiting and the substitution adjustments that they make to do the consumer price index are BS. Of course he does. He’s a gold bug, right. And then I say to more look, another great thing I love about my income properties is they’re very tax favored, right? So you know, certainly can i depreciate my gold coins? Hmm, what’s that? No, you can’t do that. Well, what about when I sell them? Can I sell them and exchange them for silver coins without paying the game And he tells me no gold actually has far inferior tax treatment, because it’s a collectible. And collectibles pay an even higher tax rate. Okay, so it gets even worse, right? So this is not the answer. Look, remember, part of my teaching? Is that anything that and this is worth writing down if you haven’t been to my creating wealth program, right? Anything that does not produce income is not an investment. Anything that does not produce income is not an investment. It’s just a speculation. It’s got to produce income. That’s why instead of calling it real estate, I try to catch myself and call it income property, because there’s a difference. Okay, so the mortgage gets devalued over time with inflation and do step destruction and we’ve talked about that a lot. So I won’t cover here. The value of the real estate because it’s a commodity is hedge to inflation. But if you look historically, real estate doesn’t really Go up that much in compared to inflation, it sort of tracks it pretty, pretty close. You know, it’s it’s not that great. If you didn’t have the leverage the leverage is what makes it phenomenal. But even if you didn’t have any leverage and you paid cash for it, it’s still much better than really any other asset because it produces the income and the potential tax benefits and certainly not potential. The potential tax benefits are just on depreciation. There are real tax benefits when it comes to 1031. Exchange. Okay, so that’s phenomenal. The best things in the inflationary environment, the strength of the investment versus inflation, gold, but very limited one dimensional asset class, the mortgage and the value of real estate. When you split those two components up, very powerful. The income from your job, medium strength, hopefully you’ll get cost of living adjustments from your job income, hopefully your rental income will increase at about the rate of inflation. That’s probably pretty likely, okay. And then your stocks will hopefully keep pace with inflation. Hopefully you don’t even own stocks after we’ve talked about this because Wall Street is the modern version of organized crime. Okay, so then what has really low strength against inflation? Well, certainly cash, cash gets destroyed by inflation, it gets devalued. Because if you take out and you know, take, take some money out of your wallet, right? And let’s see what we have in here. I’m not much of a cash person. But here I’ve got what is this called? Can you see it from here? $5 It’s called $5. Today, what was it called? 100 years ago? Lots of money. That’s good. Yeah. No, no, it’s one penny now compared to years ago, right? Yeah. Yeah, you you you I know you understood that a lot. But the $5 was called $5 100 years ago. Just a reminder, you’re listening To flashback Friday, or new episodes are published every Monday and every Wednesday.

Jason Hartman 38:09
The name has not changed. That’s the difference between nominal dollars in name only. That’s the meaning of nominal versus real dollars, which is the value of the dollars today, right? So cash gets destroyed by inflation, and that’s why they call inflation a pickpocket. Because literally the money in your bank account in your wallet, okay, is constantly being attacked, you’re being pickpocketed because the value of it is being debased by inflation. So it’s terrible. bonds, terrible in inflation, pension income, awful in inflation because there’s no adjustments to it. Bonds are just alone. Okay, let’s go back to bonds for a second. Bonds are alone. So remember, to take in flus to take advantage of an inflationary environment, even if it’s moderate and low, if it’s two or 3%. Or if it’s 10% or 13%, or if it’s hyperinflation, and it’s 50, or 100%, which we’ve never seen in the US. We have seen significant inflation from the wonderful policies former President Jimmy Carter, that’s sarcasm, by the way, just so you know. Probably a very good man but a terrible president. Okay? So bonds are just alone, you’re on the other side of the loan, you’re the lender. So the value of bonds gets massively debased by inflation. Taxes are interesting. The IRS does not account for inflation. And this can work for you or against you. And it can be beautiful or it can be terrible. people that do not have tax advantaged event investments like we do, they are getting destroyed on taxes. But the IRS in the tax code you can just see it through and through. And you know, we could go off on a really long tangent talking about this one. It does not account for inflation and it’s really good for us as investors but bad for most people. Okay, so let’s look at it versus deflation in a deflationary environment and I’ll make this one a little quicker. Cash actually goes up in value in a deflationary environment, so to bonds, so does pension income. So if your pension income says that, okay, you have this pension and it will pay you $5,000 a month. Well, if you have deflation, that $5,000 is going to become more valuable. So the value of that pension income performed very well and had a lot of strength against deflation. It was wonderful, right? And taxes pretty good because the IRS doesn’t account for inflation. Okay. So job income kind of medium because it will usually deflate in a deflationary environment. You’ll have actual pay cuts. That’s no fun. rental income. We’ll probably stay about the same or even deflate a little bit in a deflationary environment in less you consider and this is what we don’t necessarily know what I was talking about this morning when I talked about the three dimensions of real estate, right. So that rental income adjusts, first of all very slowly because most rents are set up on one year leases, right? That’s the first thing to understand. But the second thing to understand is that when the value of the properties deflates, and as long as the population is stable or increasing, people never have incentives to move from the renter pool to the homeowner pool. And therefore rents can actually strengthen in that deflationary environment. And I’ve certainly seen that happen before in my lifetime and my time in the business. I saw it happen not too long ago actually. Okay. So gold terrible. The mortgage is terrible because the value of the debt in increases, right? The burden actually becomes higher because you have to pay it back in more valuable dollars, versus what we talked a lot about is inflation and debt destruction, you pay the debt back in less valuable dollars later. The idea being in 2046, the dollar today will still be called $1. But it’ll be a lot less valuable. So you pay it back and cheaper dollars over time. And that’s a beautiful thing. But in a deflationary environment, that debt becomes more of a burden. It’s worse for you, right? And so this can theoretically crush you. But wait, there’s more.

Jason Hartman 42:40
Because what really happens in real life is this in real life, the implicit what I’ll call nuclear option. The backdoor option is that people just default, they strategically default. We saw millions and millions of millions of people do that on the last cycle. We saw doing On the cycle before, and guess what? It’s unfair. We all agree it’s philosophically wrong. But it is the way it is. It is reality. The people with the highest loan balances, got all the bailouts. They got all the loan modifications. They walked away. They lived in their house in Florida for sometimes three and a half years and didn’t make a payment. They live there for free. And then the lender came along and said, some in some cases by countrywide be evaded, we will pay you we will literally pay you to do what’s called a cooperative short sale. You don’t have to supply any documents, just put your house on the market and sell it and we’ll pay you between 3000 and get this $32,000. Okay, to help us sell the house, because if we take it back, it’s going to cost more and remember That’s just what the contract says. The contract the deal is when someone gets a mortgage is exactly this. Either the borrower will pay the mortgage, or give them the collateral. That’s the deal. That’s what the contract says. So you have those two options. One option is pay the mortgage. And if you decide you don’t want to pay the mortgage, or you can’t pay the mortgage, then give them the property back. That’s what the contract says. Okay? And that’s the way it’s worked for a long, long time. So the mortgage gets more burdensome with the exception, the little asterisk is the nuclear option. All right, the value of real estate becomes lower because in a deflationary environment, those commodities become less expensive, right? I don’t want to say less valuable. You notice I was about to say less valuable, and I caught myself when I said less expensive in in real dollars. Okay. So There you have it, the mortgage really moves up into the medium category, I think, maybe even the high category. So that’s kind of the investment matrix. Now what about taxes? Okay, so with taxes, it’s a funny thing. And I don’t have a lot of time to go into the tech stuff, unfortunately, because we’ve got to talk about manage property managers versus self management, and do a whole bunch of other things today and, and have Michelle finish out the property tracker segment as well. But the mortgage highly valuable, because it’s tax deductible, right? It’s beautiful thing, but it’s not nearly as good as depreciation or 1031 exchanges. And there is actually another tax benefit that I pretty much never even mentioned, because it’s pretty small, but it’s a little perk and it’s not bad with your real estate that you own in different parts of the country. Remember, you can travel to visit your properties and take deductions on those expenses. Now, remember, we have this one speaker come in I really just railed on him after he spoke. Because he was basically saying, well buy properties in places you like to visit because then you can go there and deduct your trip. And I said, Are you joking? You’re telling my audience to to buy a property and make $100,000 property decision to deduct a $400 airline ticket. Talk about the you know, the what’s the cart driving the horse? Sarah, what’s the right? Say? Yeah. We’ll get that thing backwards. Right. Don’t shoot yourself in the two. All right. So it’s just a little perk. It’s a little side work. It’s not a big deal. Okay, cash medium in the taxation world. rental income medium, of course, you have to declare it obviously, your job income, terrible performance against taxes, get slaughtered against taxes. All of you need to have your own business. I know the vast machine of this room, you know, we got a lot of Silicon Valley people, all of you pretty much in this room have corporate type jobs, few of you have your own businesses, right. But the corporate type job is just the worst deal ever tax wise. You’ve got to have some little small business on the side, do anything. You know that person that’s bugging you to join their network marketing program. Just join it so you can have something to have tax deductions with. Right? Okay. Don’t buy too much soap though or anything like that. All right. Or wine. Just buy enough to consume right? Okay, so bonds terrible in the inflationary environment.

Jason Hartman 47:39
No benefit there at all. Gold, or sorry, we’re talking about taxes versus taxes. Gold is awful. Stocks are absolutely awful. You sell one stock, you got to pay the tax before you buy another. When I sold my last company. I went to so many advisors, you know really high level advisors. I said Is there anything I can do look, I will buy Another business. Okay, I will not call this my retirement and, you know, I will just buy another business in real estate. Can I do a 1031 exchange? I’ll reinvest all the money into another business. Nope. pay taxes. That’s it. That’s it. Nothing. The income property the most tax favored asset in America. So that’s that. Okay. So I just wanted to present that to you. Thank you. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website Hartman Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional and we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform are using and write a review for the show we would very much appreciate that and be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.