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EIGHT FINANCIAL RULES THAT APPLY TO EVERYONE AND THEIR MONEY

In this solo episode, Jason Hartman shares his thought about an article from
Business Insider about the Eight Financial Rules That Apply to Everyone and
Their Money. Then, he talks about his commandments of successful investing.
Later on, Jason discusses the changing demographics in the United States and how
it could affect real estate investing.

Announcer 0:04
Welcome to the heroic investing show. As first responders we risk our lives
every day our financial security is under attack. Our pensions are in a state of
emergency. A single on duty incident can alter or erase our earning potential
instantly and forever. We are the heroes of society. We are self reliant, and we
need to take care of our own financial future. The heroic investing show is our
toolkit of business and investing tactics on our mission to financial freedom.

Gary Pinkerton 0:39
Hello, and welcome to Episode 99 of the heroic investing show, where we focus on
the challenges unique to members of the armed services, first responders, active
duty and those retired. But we also focus on those issues that are common to all
investors, we aim to provide the tools that enable our listeners to secure their
family, their future, and their retirement. And we help them put in place a
solid plan to replace that w two job with passive income so that they can start
to focus on things that if it’s true, or more exciting to them, hey, a lot of us
get 100% satisfaction out of doing the job that we’re doing. I got pretty close
to that at different times during my career, certainly when I had the pleasure
of commanding an awesome crew on the USS Tucson. But there’s also times in our
career where we’re ready to move on, you know, I was an entrepreneur at heart,
which is why I loved commanding my own little submarine. And taking it you know,
places where we could operate on our own with our own decisions, obviously not
free of all the requirements. But he did certainly have the ability as a unit as
a cohesive unit to make decisions, plan our own destiny, and control some stuff.
And I absolutely love that. Because that’s what an entrepreneur does, right?
They have a business, they have a vision, and they’re able to guide their team
and their business in a direction where they feel that they can be most
successful make the largest impact on their audience. So that’s what we try to
do here heroic investing with through suggestions through advice from guest
speakers, or guest, podcast interviewers or interviewees. But also simply
through some prudent passive investments and teaching individuals, lessons that
I’ve learned and other real estate investors I’ve learned using the passive
source of income producing rental properties. But listen, there’s more than just
rental properties as well. There’s all kinds of alternative passive income, I
help people do different versions of that, you know, whether it be real estate
or being a lender, intellectual property, oil and gas, things called Life
settlements. So there’s, there’s lots of options of what you can do to bring
passive income into your life. I just happened to put real estate at the very
top of that list, as you know, Jason Hartman does, for many reasons, because as
he says, it’s a multi dimensional asset. But it certainly has lots of tax
benefits, that will, you know, if you can protect yourself from taxes, again,
that’s part of my day job helping people protect themselves from taxes, you can
grow wealth at a rate that you can’t achieve in the normal tax environment that
we have found ourselves here.

So on heroic investing 99, Jason is going to talk with us for quite a while
about eight financial rules that apply to everyone, whether they be real estate
investors, Wall Street investors, again, just trying to bring some assistance in
your fledgling real estate world unless you’re a big time real estate investor
with lots of experience, and then I need you on this show, helping me help
others. Jason has quite a few of these lists, like the eight financial rules,
you know, for example, His 10 commandments of successful investing. That one’s
coming up actually two episodes from now on heroic investing 101 I thought that
that was a really a perfect title. If you think of 101 as kind of the college
level entry course, the beginner’s course. Certainly, the 10 commandments fall
right in line with that. He also had a little lesser known next 10 commandments,
the you know, commandments 11 through 20. I haven’t ran those yet on heroic
investing, he came up with those and one of the meet the Masters that I went to
several years ago, and we just haven’t highlighted them quite as much, but I
will get those on this show coming up soon. We also did 30 financial mistakes
that every investor makes or that investors make not every investor but that
investors make and that was a two part episode here on the heroic investing
show. Jason started with the first half a little over half of them on heroic
investing 55 and then I followed up on heroic investing 56 with the second part,
a little bit of overlap. there between that and the 10 commandments, and maybe
these eight financial rules, but they are all gems that someone else learned.
And that’s the key. Someone else learned those in spades so that hopefully you
don’t have to repeat them. If you can learn from others mistakes, in my opinion,
that is demonstrating true intelligence and maturity, these lists of eight, My
favorites are numbers four, and five, and I’m not going to ruin the surprise,
I’ll make you listen to them to see what they are. But once you do hear them,
you will say yep, that makes sense. That sounds like getting one that I will
kind of run as a spoiler is number six, I thought this one was really timely and
consistent with what I’ve spoken about at the beginning here, and we have on
recent shows, and that is specifically to spend more time on failures than you
do on successes. So there’s really kind of two subjects there.

I mean, we just talked about spend time learning from others failures. And if
you do that, and listening to these podcasts, I think you will be far more
successful. That’s really what these lists of 30 mistakes and 10 commandments
and all that that’s what they’re doing is teaching you what others have have
done throughout history incorrectly, and what they’ve learned from it. But it’s
also a personal thing about don’t, you know, listen to too much of your own
press, right, you know, avoid hubris, and spend more time thinking about how you
can improve, evaluate, and then improve places where you’ve, you’ve had some
mistakes. You know, in the Navy, at least in the submarine force, we have really
rigorous mature program about doing something we call the hot wash, which was
evaluating every evolution every exercise every mission, and comparing them to
what we were supposed to do, what the requirements were what we said we were
going to do in our plan, you know, what went as expected, what didn’t, and then
even that stuff that did go as expected, how can we make it better next time.
And then we capture those lessons learn. We share them with everyone in a post
event training. And then when we’re going off to do that event, again, we dust
that stuff off and remind ourselves what we did wrong last time, or how we
figured out we could be more efficient than next time around is a really, really
good process. It’s a process that I think in my business, and a lot of people in
their businesses out here in the real world don’t take the time to do we know
it’s a good idea, we just end up getting caught up and not taking the time to do
it. And that’s certainly to our own peril, or at least to our own inefficiency.
So please think about those kinds of things. When you have that kind of an
opportunity with your team, take it seize that opportunity, figure out the
lessons learned by doing a hot wash, and then recording them and dusting them
off before you try that thing again. So alright, so enough of all that, here we
go, Jason sharing some wisdom for the ages.

Jason Hartman 7:51
Today, our guests will be yours truly Jason Hartman. What I mean by that is that
we made a little bit of a mistake that was on the last episode. And we always
endeavor to correct our mistakes as quickly as possible here, we are not
infallible, we make them just like everybody else, the differences, we’re going
to be here and we’re going to try and fix them when we do. So we will do that
here in a few moments. And I will explain that to you in further detail. It will
all become apparent. But first, there was a really interesting little article,
you see all these things in the news media, right? Seven rules for this 10 tips
for that I’ve got the 10 commandments section, I’ve got 20 now there’s there’s
two versions of 10 commandments, the first set and the addendum. And there will
be another addendum forthcoming, by the way. So we’re gonna have 30 this
investing stuff, I don’t know, it’s kind of simple, but in some ways, it can be
a little complex, occasionally, too. So this one was good. And then of course,
the great book, The Seven Habits of Highly Effective People by the late Stephen
Covey. Boy, I wish we could have gotten him on the show while he was still
around what a great thinker and just put out a lot of fantastic material. I was
a huge Stephen Covey student for many, many, many years. And I had the pleasure
of meeting him on a cruise ship in Russia Once there was a little event on the
cruise ship. And they mentioned his wife’s name, and I can’t remember but so and
so covey from Salt Lake City, Utah, and I thought is that Stephen Covey’s wife?
And so I went to my state room on the ship, and I called the front desk, and I
said, may I speak to Stephen Covey, and they patch me right through to his room.
He answered the phone and I talked to him. And then we met up on the ship and
talked for a while. What a great guy. Anyway, seven habits, 10 tips, 10
commandments, whatever. Well, this one was eight financial rules that apply to
everyone and their money. And it was a Business Insider article. And as I was
reading it, I was kind of thinking you know, these are pretty good tips.

A lot of these things that you see like this are just junk in the mainstream
media and, and part of the vast Wall Street conspiracy. You read some of this
junk, and I hate to pick on it, but like Money Magazine or like pop culture for
investing just really amateurish, in my humble opinion. There’s some good stuff
in there too. So I’m not going to completely throw the baby out with the
bathwater, but a lot of it is just junk. Okay, let’s just come to that
conclusion, because it is, but these were pretty good. And I thought I would go
over them with you, and then add my own take on them, because I thought they
were pretty solid. So these eight financial rules that apply to everyone in
their money. And this is by Morgan housel. I hope I’m pronouncing that
correctly. It’s a Business Insider article. And it says, number one, spending
money to show other people how much money you have, is the surest way to have
less money. I couldn’t agree more. We’ve all probably been guilty of that at one
time or another. And we all have an ego and an ego is a very important thing. I
think ego is much maligned, in our culture. Everybody likes to say, Oh, that’s
just ego, that’s bad. No, the ego really is a great catalyst for progress. But
it needs to like everything, it needs to be kept in check. So we need to keep
our ego in check. And how many times have you seen or engaged in spending money
to impress other people? Now, this is, as they say, in tip number one here, the
surest way to have less money. And I couldn’t agree more, I think that you
should spend a little bit of money to impress yourself, though. And I’ll get to
that in just a moment. And as I talked about in the creating wealth seminar that
I do, and we just did the recent one in Little Rock, and then one before that in
Irvine, California, you know, I always talk about how most people go into debt.
And they do that by spending money on the appearances of wealth, rather than the
things that create actual wealth. So don’t be in that trap of spending money on
the appearances of wealth. It’s the guns and butter kind of philosophy, spend
your money on guns, and in the investing world, the guns are things that will
make our money work for us things that will give us a return. Income property
certainly is a great gun. The butter is that expensive depreciating car, that
expensive, depreciating clothing, that big house that you live in, that is
costing you a fortune. Because we know better, we know that our home is not an
investment.

Our home is simply an expense. If our home produced income for us like income
property does, then it would be an investment. But if it costs money, it is
simply an expense. So we’ve got to make sure we’re spending money on the things
that will create wealth for us. Now, that doesn’t mean being a miser or a
cheapskate. Because I think we can go too far with this, obviously. And I think
that the miserly cheapskate philosophy is really counterproductive, also. And
here’s one of the things that I have found that although I don’t do it enough,
myself, but here I go, again, not practicing what I preach, I yes, I do that
occasionally. I say to my listeners, you should all get really organized. And
then I look at my desk and I think and my luck on my computer. And I think maybe
I should get really organized to human failings, we all have them. Okay. But one
of the things that I think is very effective, and when I’ve done it, I think
it’s been very effective for me to I haven’t always done it, and I probably need
to do more. And that is celebrating little victories, and rewarding yourself for
little victories, okay. So when something good happens when you have a property
that’s going well, and you’re making money on it, have a little celebration. And
the reason you should have a little celebration or reward, say you want to buy
that consumer item, you know, you want to buy a swanky new car or a swanky new
outfit, or go on a nice dinner, you know, or a nice vacation. I think it’s okay
to do that, to some extent, the differences don’t get into things that
depreciate in value or cost expense that have a fixed overhead. You want to
celebrate these things with ideally small treats. And those things do not create
a three or a five or a 10 year obligation. There are just little treats along
the way. I even mentioned a car, you know, it all depends how big the win is.
But one of the reasons I think this is so important is that we set up our
subconscious mind to be basically like a Pavlovian dog. Of course we all know
pavlos famous experiment with dogs, where he rang the bell and fed the dogs and
rang the bell and fed the dogs and rang the bell and fed the dogs and did that
over and over and then he would just ring the bell, and the dogs would start
salivating as if they were going to be fed, even though he didn’t feed them. And
so our subconscious mind, you know, we can play some tricks on it, we can play
some tricks in setting up this reward response cycle. And I think that’s
important because I think that will ultimately lead us to do things that
increase our return on investment, and help us make prudent financial decisions.
So the miser doesn’t do this, the miser just hordes and hordes and hordes and
investment in investment invest. And I’d say that the miser does not ultimately
get as far in life, as the person who prudently and conservatively rewards
themselves along the way, for those small victories, I think they will have a
bigger, more abundant, more expansive life if they do that. So that’s my advice.
I don’t always do it, I should do it more, you should do it, too.

Okay. So number two, wealth is completely relative. Well, I talked about this as
well at the creating wealth seminar. And by the way, of course, you can get that
as the home study course you can get the physical version of it for half price.
Yes. When do you ever see the digital version of a product at normal price and
the physical version of the product on sale? Well, as I mentioned, on the last
episode, if you heard it, well, you’re about to hear part of it again, that
we’ve got a big sale on that at Jason Hartman calm because I have this access
delivery that I didn’t know about, have to have my physical products, and
they’re in my storage unit. And I really don’t want to even have that other
storage unit, I’ve got a whole bunch of storage units. Anyway, so buy those, and
you can hear more about this stuff. But wealth is completely relative. that’s
point number two. And what I mean by that is, look, if you look at the doom and
gloom ORS who say the wind is going down, the dollar is going to collapse. And
those are the people listening to my holistic survival show. And I think there
is some validity to that. It’s not completely valid, I thought it was more valid
when I started that show. And now that I’ve done, you know, 200, plus
interviews, interviewing all the people who think the world is coming to an end,
I really kind of don’t think it is coming to an end, I think it’s actually going
pretty well, even though we have very imprudent financial things going on in the
world. And I think there will be another shoe dropping, I think that will
ultimately be a very inflationary shoe. And I’ve outlined a good investing
strategy for that. And even if it doesn’t happen, I’ve got two other strategies
where you’ll do okay, but the point is, wealth is relative. Okay, so think about
it. If the doom and gloom scenario happens, and everybody goes broke, all you
need to be is a little less broke than everybody else. If everything goes great
in the future is massively abundant, all you need to be is a little bit ahead of
everybody else. Because all of the products you buy, and all of the services you
buy in the economy, are based on relative pricing. So they will adjust either an
inflationary curve or a deflationary demand curve, depending on the relative
wealth of the general population.

Okay? So if you’re in a westernized, advanced country, and I know we’ve got
listeners from 164, countries listening, so we do have a pretty good variety of
people, it probably very different socio economic levels throughout the world
listening, and we welcome all our listeners. And the one thing to understand
about that is that if you’re living in a westernized advanced economy, you are
already wealthier than about two thirds of the world’s population. So consider
yourself very, very fortunate in that respect. Okay, wealth is completely
relative, just understand that. Alright. Number three, the goal of investing
isn’t to minimize boredom. It’s to maximize returns. Wow, that is a good one.
Now, what I take that to mean, is that if you look at the gambling mentality,
you look at the people who are always tinkering with the stock market, who never
seem to win, who are always talking about the next big deal. This week. They’re
doing day trading next week, they’re doing options next week. They’re doing a
different variety of auctions. They’re doing covered calls, or naked, straddles,
or naked shorts or whatever the heck they call them. They’ve got so many
creative names just to minimize boredom. That’s the same way it is gambling, why
I’m on my way to Las Vegas in two days to a conference on discounted mortgages
and notes and paper and hard money lending and private lending. I know I’ve been
talking about that a little bit on the show, and I got to tell you, that world
is fraught with potential problems. And I am really trying to do unlike some of
my competitors out there, really really deep, broad investigation, and I’m
taking one of our clients with us actually one that you may have met. But he’s
been in a lot of our life events, and he’s going with us as well, to check out
this event. And in Las Vegas, think about it gambling, it’s so complicated. I
mean, I never got into gambling, number one, because I’m just too darn
conservative. But number two, it’s just so complicated and hard to learn.
There’s all these different names for things and the different cards and this
and that. And if I ever did get interested in gambling, I guess I’d be
interested in poker, but that one’s really complicated, too. I mean, all of
these funny names they have for stuff, you know, like the turn the river, where
do they get off and stuff from, but this is really like the stock market, it’s
the same thing. It’s the same thing with a house flippers, and the options
traders and the stock people and all of their ways to minimize boredom. Okay,
that’s, that’s not what investing is about investing, good investing is really
pretty boring. So good, prudent long term investing should be somewhat boring.
That’s the way it should be, you shouldn’t have to watch it all the time, you
shouldn’t have to pay a ridiculous amount of attention to it, it shouldn’t
become your day job. Unless you have a huge portfolio. That’s the thing, okay,
it should be be a little bit boring. And the point is not to have it entertain
you. The point is to have it create wealth for you.

Okay, number four in this article, is the only way to build wealth is to have a
gap between your ego and your income. Well, this really relates to the earlier
point, right. And it just says getting rich has little to do with your income
and everything to do with your savings rate. Remember, you’re listening to
flashback Friday, our new episodes are published every Monday and Wednesday.
Now, that is ultimately true. However, you’ve got to be an investor, because you
know, nobody ever got rich saving money, okay? And the reason you save is so
that as soon as you have enough capital to invest, if you’re buying your first
property or your 100th property, you need anywhere from 20 to $100,000 per
property somewhere in that range. Okay, if you’re buying a big apartment complex
from us, maybe you need more, okay, but I’m just using the good old standard,
dependable reliable, safe investment, single family home type investment, okay.
And when you do that, you need to save money to accumulate the capital. But as
soon as you save enough to purchase that property, and have adequate reserves of
about 4% of the value as your minimum, then you need to invest, you need to move
that money out of savings into investment. Okay, because, as we know, saving
money will destroy our wealth if we are in an inflationary environment, and if
we pay taxes, so saving money is a dangerous thing. You know, sometimes the
biggest risk in life is not to take the risk. Sometimes the riskiest thing is to
do the thing that is perceived as the least risky, right? And so that’s point
number four. All right.

Okay. Number five, the most valuable asset you can have is a strong propensity
not to care what others think. Now this one I would agree with, okay, it’s so
easy to get distracted by all the armchair quarterbacks. All this seemingly well
meaning but possibly envious and jealous people who are our friends. Yes, that’s
one of the human traits we have to watch out for and guard against, even our
friends and loved ones will not always really want us to do the thing that’s
going to make us succeed. Why is that? insecurity is one of the reasons for
sure, right? misery loves company, you’ve heard the old saying, it’s hard to
soar with Eagles when you work with a bunch of turkeys as the saying goes, so
we’ve got to make sure that we don’t care too much what other people think about
what we’re doing. Okay, we’ve got to follow the tortoise and the hare path and
just move along and create that wealth with our day to day discipline to just
put our money in the game. Be good managers of our managers. Now most of us have
property managers and we don’t manage our own properties directly. And just be a
good steward of these assets for the long term. The buy and hold investor, as
I’ve always said, is the one who comes out on top. Okay, I’ve just noticed over
my many years of experience in this and the 1000s and 1000s and 1000s of people
I have trained and met and spoken with the people who are in the Flipping in the
speculation business, they have spending money. The people who are the buy in
holders have real long term wealth. So you decide which one you would rather be,
hopefully you’re in that second category, the real long term wealth people,
okay? So have a strong propensity not to care too much about what other people
think. I think that’s good advice, okay? Because everybody else, they’re wooed
by the siren song of the Deal of the Day, the flavor of the month, the hot
trend. And you know, those people chasing those Hot Trends, all you got to do is
live a few years, and you realize that that rarely, if ever, actually works.
Number six, spend more time studying failures than successes.

Now, that’s an interesting one, it seems that we all look to success. And we
look at these role models, especially of extreme success. And I don’t think
there’s very much to learn, usually from extremely successful people, the people
you can learn the most from, I think, are the people who are about two or three
steps ahead of you, like I’ve said before, on the show is that great quote by
Jim Rohn, the late great business philosopher, Jim Rohn, who I was fortunate to
learn about and follow at the ripe old age of 17, he and Denis waitley, and Zig
Ziglar, and Earl Nightingale. And then later, Brian Tracy, to some extent, who’s
By the way, we’ve had Denis waitley. And Brian Tracy on the show before in past
episodes, they taught me a lot. And one of the things that Jim Rohn said is, he
said, your income will be the average of the five people you spend most of your
time with. And one of the great things about that quote is that we don’t have to
be influenced too much by our five close friends, because now we have the
opportunity to reach out and have a call it virtual friends and virtual mentors,
you’ve got me, right. I mean, I know a lot of people listening are ahead of me
in the financial game, I’m not that big a deal. I mean, I’m doing all right. But
there are lots of people who are doing much, much bigger things than I am. And
one of the things we’ve got to do is we constantly want to be in an environment
where we’re listening to, and being mentored by and hanging around with, even if
it’s virtually hanging around with people who are more successful than we are.
Because they allow us to see the possibilities, and they help bring us up, they
help foster maybe a little bit of that competitive spirit, that competitive
spirit will drive us maybe that ego drive is like, Hey, you know, I don’t want
to let them beat me, I got to perform better, I got to do more. And that can be
a very good thing.

So study failures, as well as successes. So I guess my point was, don’t be the
studying only the extreme successes. You know, the the super famous people. You
know, if you’re looking at Warren Buffett and Donald Trump and Mark Zuckerberg,
how much can you really learn from them? A little bit? Sure. But the most of the
learning will take place from people who are just a few steps ahead of you. It’s
reachable and realistic. One of the other interesting things though, about
actually studying failure. I’m talking about studying moderate successes there.
In this article, it talks about economist, Eric Fock Steen. And he summed it up
well, and now a quote from the article here and from him. It says, In expert
tennis, 80% of the points are won, well, an amateur tennis 80% are lost. The
same is true for wrestling, chess, and investing. Beginners should focus on
avoiding mistakes, experts should focus on making great moves. And you know,
that is so true. And that’s what I love about my own investment strategy, my own
buy and hold investment strategy. And really, it’s not my strategy. I mean,
look, I’ve added some thought to it. And some new thought to this strategy,
certainly through the inflation and debt destruction technique, the risk
evaluation technique and the land to improvement ratio, the LTI ratio, which
I’ve talked about before, but basically this old buy and hold strategy. I mean,
William Nickerson bill Nickerson way back a long time ago, I don’t know when he
wrote his first book, but he was like the king of buy and hold real estate. And
he wrote it back in. I don’t know if the 50s the 60s, you know, a long time ago.
Okay. So the strategy is so proven and so renowned. It’s well worth considering.
Okay. Number seven. People are flawed. So a lot of stuff. Makes no sense. That’s
a good point. All right. You’re in the article it’s talking about Be careful who
you follow and understand that You know, you might get one piece of good advice
from a person in one department, but it doesn’t mean you should make them your
life role model. Different people can serve as role models for different things.

Okay. James grant put it and then he says, quote, to suppose that the value of a
stock is determined purely by the corporation’s earnings is to forget that
people have burned witches, gone to war on a whim, risen to the defense of
Joseph Stalin, and believed Orson Welles when he told them over the radio that
Martians have landed on quote, and you know, that’s so true. I mean, people fall
for all sorts of silly things. In the investing world in the speculative world,
look at the tulip bulb bubble, look at the last housing bubble. You know, from
just a few years ago, the subprime mortgage bubble, the most sophisticated
people fall for incredibly stupid, stupid things. So understand people are
flawed. And there’s just a lot of nonsensical stuff out there. Okay. And
finally, the eighth point, anything can happen at any time, for any reason. And
the article just goes on to say you might be laid off next week, you can be sued
tomorrow, or win the lottery, maybe you’ll get cancer, or a huge promotion,
stocks can rally for twice as long as you think and crash twice as fast as you
assumed. History is one damn thing after another. Most of it involves money. And
there’s nothing you can do about it. And you know what? I think that’s a good
point. It’s good to understand, you’ve got to have contingency plans. And that
makes sense. So you know, maybe you’ll have a big surprise repair on a property,
maybe you’ll have a bad tenant, and you’ll have to go through an eviction and
make ready. As the old saying goes, sh it happens, right? It does. We do not
know what the future will hold. But what a long term prudent buy and hold
strategy, we can really mitigate a lot of these problems with prudent
conservative investing, where we’re buying properties, we’re following my 10
really my 20 commandments of investing, what’s number five, Thou shalt not
gamble, buy properties that make sense the day you buy them. Number three, don’t
invest in other people’s deal. You know, thou shalt maintain control is that
commandment, follow those commandments, and you are going to be in pretty darn
good shape.

Okay, let’s get to our guests segment. I’m joking when I say that. We’re just
correcting a mistake here from Friday, folks. So we are going to play what we
did not play on the last episode. So listen in. And I know that sounds a little
funky, because we’re doing it backwards. But this is the intro for the last
episode. That was not posted on Friday. So here it is. And Gosh, we got a lot of
good shows coming up to so many good ones. You know who I’m interviewing today?
The Great, the great bill Bonner. Yes. A guy who almost never does radio
interviews, Bill Bonner. He’s a great writer. He’s written many, many books. He
is the founder of a Gora financial, and I am interviewing him today. So we’ll
have that on an upcoming episode soon. Here we go with the intro for last
episode. Hey, welcome to the creating wealth show. This is your host Jason
Hartman. And thank you so much for joining me today for episode number 421. I
sure hope you enjoyed our last episode a 10th show, with Mark Devine talking
about the way of the seal, which was really interesting. I also just finished an
interview for probably my holistic survival show with john tieghan, who was a
Blackwater contractor and a former Marine Blackwater contractor, who was right
there on the ground at Ben Ghazi at the time of the tragic incident there. And
he wrote a book called 13 hours I think is the name of it. What really happened
in Benghazi, and it’s been on the New York Times bestseller list for the past
few weeks. And that was a very enlightening interview. So just speaking of
military people, I just scrolled 13 hours, the inside account of what really
happened in Benghazi. And he’s a former security contractor for Blackwater,
which you know, is a huge, huge military contractor that is controversial, to
say the least. But for whatever that’s worth, it is a great interview. Anyway,
look for that when it’s posted if you’re a follower of any of my other shows,
and I think you’ll be interested in that. Again, we try to give you some broad
good content on a lot of things, but especially personal finance and real estate
investing, which is of course, our main focus on this show, and a few of my
other shows as well. And Gosh, what We talk about today.

Well, a few things. Number one, and most importantly, we have a fantastic video
on my YouTube channel. If you go to YouTube and type Jason Hartman, media, Jason
Hartman Media and we got a couple YouTube channels but that’s the one where
we’re posting a lot of content right now and video versions of our shows as well
of several of the shows. And this video on how to read a performer is just
critical. And I played the audio of it several episodes ago. And I tell you,
with some of the questions I get, I really just want to play it again and again,
but I’m not going to do that to you, I’m going to ask you to go review that
video on our YouTube channel. And I was really upset with YouTube because they
took that video down and re posted it, I guess it was getting too many views.
And they thought that was suspicious. We had like, I don’t know, 3300 views
really quickly when that video was originally posted. And YouTube said that they
thought the views were fake. And I guess a lot of people kind of game the system
on this stuff. So anyway, I was quite upset with them, we had spent a bunch of
money to advertise that video, which I think is a really just a critical
foundational understanding with investing. Okay, that is just fundamental stuff
that how to read perform a video. So please, please do check that out on
YouTube. Or check out at least the prior episode if you want the audio only
version of it. But it really does help to see it and see what I’m looking at and
highlighting on the performance. So please check that out fundamental knowledge
and help for you on being a better real estate investor and understanding how to
analyze a deal. So check that out.

And a couple of interesting articles here, I haven’t had time I just accumulate
all these things I want to talk to you about. And it feels like I’m always
behind on this stuff. And I just never have time. This one published in Business
Insider on September 15. So it’s not that old, only two weeks or so. And it is a
really interesting thing. It’s talking about the different states throughout the
country that have the highest percentage of single adults. And it talks about
how singles. And this is something I’ve been saying for quite a while are a
huge, huge demographic cohort. And why is this important to us as real estate
investors? Well, I’ll tell you why. Many, many years ago, when I first got into
the business more years ago than I even care to think about now it’s been so
long, it’s amazing how a couple decades will just pass the snap of a finger in
the blink of an eye but they do many years ago, you would never want to consider
buying a one bedroom property that was just like the curse of death. And it
still is a one bedroom property is never going to get you the kind of the ideal
most stable tenant. However, it’s not as bad as it used to be. In fact, there
are some decent opportunities in one bedroom properties. And the reason I
mentioned this is because of the massively increasing single population, for the
first time in the history of the country, from what I understand, there are
actually more single adults of marrying age, we’ll call it then there are
married couples, it’s like 54%. And this is a major, major thing to think about
as a real estate investor. Now, there are some interesting kind of broad
conspiratorial theories about this about the government wanting people to be
single the government disincentivizing through tax code and welfare and so forth
marriage.

And we’ve certainly seen this in some certain racial components of the society
where there’s some realistic reason for this belief that they’ve encouraged in
single households with children’s and discouraged marriage through the tax code,
and so forth and through many other things. And this conspiracy also relates to
good old Madison Avenue, the advertising community, Mad Men if you watch the
show, and it relates to them, because if you think about it, if you’re in the
business of selling consumer products, or you’re in the real estate business,
heck, Isn’t it better to sell two toasters and two blenders rather than one?
Well, certainly, it’s a much bigger market if you have more single people,
right? Because a single household will buy all the same basic things that a
married household will buy their two households instead of one. So they’re going
to have to have everything rather than one of everything rather than sharing
things. So this is a big deal. And I’ve talked before on prior episodes, about
how in the last three presidential elections, the largest voting bloc, although
it’s not aren’t really considered a voting bloc, oddly, was single adults. And
most people think of voting blocks, they divide them by racial and ethnic
categories. They divide them by age, like the AARP, that’s a huge demographic or
a huge voting bloc, and a huge lobbying organization, or they divide them by
Generation Y, or Generation X, my generation, which is very small generation, or
the baby boomers, and all these different things. Really, the biggest, broadest
cohort, if you will, is singles, that’s the biggest one. And so when you look at
this, it means that smaller properties are more desirable than they’ve ever been
in human history in terms of what that household would contain. being just a
single person household.

Of course, I’m single, and I guess I’m just ahead of the trend on all this
stuff, folks. Now, now, I’ll probably get married, or hopefully I’ll get married
sometime soon. And then I’ll be ahead of that trend when the pendulum swings
back to marriage being more popular, but But yeah, it really is amazing. This is
an amazing article. And it’s, it’s by Richard Florida, who I’ve been wanting to
get on the show for a while, admittedly haven’t tried very hard. But I’ve talked
about him a lot, where he talks about the creative class cities, and what that
means to real estate, investors and so forth. But get this, I thought I’d share
a couple these rankings because they’re pretty interesting. And kind of
counterintuitive in some ways. In terms of singles, it says singles make up more
than half the population in 27 of 50 states. And the share of single adults
ranges from a low of 43.7% to a high of 55.7%, as the map above shows, and here
are the top 10 in the bottom 10 states. So the states with the most single
people, this one really kind of amazed me in some ways. Number one, most single
people, you’re not going to believe it, Louisiana. But if you think about that,
and you think about the conspiracy theories about the government promoting
single households, right, because singles tend to be more skewed toward the
left. They tend to be more democratic, and they’re voting, and they tend to
receive more government aid and more government benefits. So Louisiana ranking
number 150 5.7%. Rhode Island number two, the same number New York. Now that one
doesn’t surprise me because when you take into account the highest populous part
of New York State, which would be New York City 55.5% lots of single people in
New York City, Mississippi, number four New Mexico, California, that doesn’t
surprise me, Florida, number seven, California was was number six,
Massachusetts, Number eight, and you look in the cities, and there’s a lot more
single people in cities of course. So you got Boston there, Nevada, number nine.
I guess a little surprising. I don’t know Vegas, baby. What happens in Vegas
stays in Vegas, Maryland number 10. And then the bottom 10 with the fewest
single people, these don’t surprise me too much. I guess Montana, number 41.
North Dakota 42. Minnesota, Kansas, New Hampshire, Nebraska, Iowa, Wyoming,
Idaho, and Utah being number 50. You don’t want to be single in Utah. You’re
definitely a minority there. And that’s really no surprise Utah, very family
oriented state. You’ve got the great Mormon religion, which I don’t care what
people say.

Listen, I’m not Mormon. But I think every Mormon I’ve encountered has been a
good person. Sure, there are bad ones out there. But pretty good group of people
and very family and community oriented, very self reliant people, and I applaud
them for that. Anyway, that’s kind of interesting about single people. Okay. And
I know, by the way, a lot of my fellow Christians think the Mormons are cult
members, blah, blah, blah. I’m kind of not buying into that. So there you go.
For whatever it’s worth. I remember. I do remember though, an ex girlfriend
years ago brought over a videotape. Yes, a videotape, not a DVD, and showed me
this big tape about the Mormon religion and all of these idiosyncrasies and so
forth. And I don’t know, I just know my own personal experience has been pretty
positive. And if Romney were running for president, I’m not saying I like
everything about him, but I do like his business savvy. And a turnaround
specialists would probably be a pretty good thing. It least financially for the
country. So that’s my story. Hate me or love me, but that’s what I think. Okay.
Just a reminder, you’re listening to flashback Friday. Our new episodes are
published every Monday and every Wednesday.

Now Another thing, which is interesting, I talked about this before, I believe,
but it was a USA Today article from a while ago about why $1 million may not be
enough to retire. And if you’re investing in income property, I’ll tell ya, you
can easily achieve financial happiness and financial independence with good
investments. And you know, because I’ve talked about refi, to you die before,
and how absolutely excellent that plan is for investors. In this article, they
talk about assuring that you’ll have enough to retire. They look at a million
dollar portfolio, and a scenario and now this is of course, part of the vast
Wall Street conspiracy here and towing the Wall Street company line of absolute
stupidity. And it says, In the past 10 years a portfolio equally divided between
the Standard and Poor’s 500 stock index, can your Treasury notes and three month
treasury bills returned an average of get this folks don’t fall asleep on me
because this is disgusting. 4.24% a year, where inflation Of course, they’re
believing the idiotic official statistics, most of these people, they’ve been
losing money, okay, in this portfolio, but they think they’re slightly winning,
because inflation averaged 2.4%. So basically, their margin of return here
before taxes take away, probably a good 40% of it, okay, their margin is 2%. And
then you impute inflation and you know, what are you left with? You’re left with
what 1.2%, above the official inflation stats, after you pay taxes, and then you
put in the real inflation rate, and you know, you are losing money, you’re
completely underwater. Okay. So that’s what’s going to happen to you, if you’re
investing in the vast Wall Street conspiracy in the typical absolute disgusting
stupidity in the financial press.

If you invest in income property, in the most historically proven asset class in
America, you can easily make retirement work, especially if you got a few years
before retirement. And by a few I mean, you know, 10, or 20, would be ideal. If
you’ve got more, that’s even better. But remember, I’ve cited before that pretty
famous study that was done, and I believe it was back in 1994. And it was about
can money buy happiness, and I have talked about this before, and I’m gonna pick
1994. Again, it’s just from memory. But what I remember from that study in
reading it, and it was pretty kind of revered at the time, and I do agree with
it, you know, in 19 $94 $1.5 million would be kind of the number that would you
in quotes, buy happiness, okay, that would be the number that would buy
happiness. And if that’s true, let’s just adjust that for inflation. And based
on the official statistics, which of course, understate inflation, that would
mean that today, you would need 2.0 Well, I’ll tell you exactly how much you
need. $2,407,408.91 is how much you need to, quote, buy happiness, can money buy
happiness, well, no, it can’t. But it buys a lot more happiness than poverty,
that’s for sure. And it’s hard to argue with that one.

Okay. So two and a half million bucks basically, is the number you need. Well,
through the plan that I’ve outlined, with a modest start, you can really, really
achieve that by or before retirement, depending on what age you are. And
remember, retirement isn’t really something I think that any of us should be
considering in any real way. Because retirement, my humble opinion, it’s just
not a good thing. It’s not good for us. We need to be engaged, we need to be
active, we need to be stimulated, we need to be challenged. That’s the way the
human animal works. So retirement, not ultimately a good idea. I think we should
stay active and keep working and do whatever our passion is, but it’s sure nice
to be able to choose to make our own hours and do something that inspires us and
something we’re passionate about rather than being Dilbert and work in the
corporate job in a cubicle right. And so to be able to have that choice, you can
achieve this pretty easily and you only have to beat real inflation and real
taxation, and returns and other investments because all the returns like these
idiots getting the 4.4% per year return in the USA Today. Outline portfolio. Do
terrible deal, right? But let’s say that to keep up with inflation and to pay
taxes and to have kind of a net, that you really have to earn about 8% on your
money, okay? That’s we’ll call that the breakeven number, I’d argue that it’s
even a little higher, but I’m gonna go with a lower number just to be more
conservative and more in line with the vast Wall Street conspiracy. And so if we
can earn from our income property investments, if we can just earn 12 to 14%
annually, we are vastly, vastly beating the rest of the human race, you’re going
to be in a very comfortable position, if you just let some time go by, and you
can earn only 14% on your portfolio.

Of course, if you go to Jason hartman.com, and you look at the property
performance there, you can see that properties have performer returns have
easily into the 25 3035 40% annually return and if it only goes half as well,
well, what are you earning, you’re earning say, 20% in that example, and you can
encounter quite a few problems and still earn 14% on your income property
portfolio, you can encounter unexpected repairs, you can encounter, evictions
you can encounter make readies between tenants where they mess up your property.
Now, of course, you should get a judgment against that tenant, you probably
eventually collect on that judgment and you’ll collect with interest, okay, but
you can encounter a lot of problems and still come out a big big winner. If
you’ll let 510 15 or 20 years go by and just keep running your portfolio.

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