Get Rich Education

GRE Free Investment Coaching:

Best Financial Education:

Get our wealth-building newsletter free—

text ‘GRE’ to 66866

Our YouTube Channel:

Follow us on Instagram:

Keith’s personal Instagram:

463: America's Frightening Homeless Problem, Crazy Investing Manias—Tulip Bulbs, Beanie Babies

Direct download: GREepisode464_.mp3
Category:general -- posted at: 4:00am EDT

Mon, 21 August 2023

More homeless people have been created due to the housing supply crisis. Homelessness is up 11% since last year, per the WSJ.

The opioid crisis, consumer inflation, and NIMBYism have contributed too.

California has the most homelessness on both a total and per capita basis.

States with higher housing costs have more homeless people.

I share our poll results: “Should we pay to house the homeless?”

Are you a NIMBY? We find out today.

We can increase housing supply with rezoning, construction training, and lower mortgage rates.

The cycle of investor emotions led to wild investing manias. It was tulip bulbs in the 1600s Netherlands and Beanie Babies in the 1990s United States.

I discuss exactly why “buy low, sell high” is more difficult than it sounds.

Timestamps:

The correlation between homelessness and the housing market [00:00:00]

Discusses the relationship between the housing market and the increasing problem of homelessness in America.

Investing manias and lessons from history [00:00:00]

Explores the phenomenon of investing manias and the lessons that can be learned from historical examples.

The tight inventory market conditions and potential solutions [00:04:56]

Lawrence Yun, Chief Economist of the National Association of Realtors, discusses the tight housing market conditions and suggests tax incentives to increase housing supply.

Timestamp 1 [00:10:32]

Affordability of moving to different cities and the proposal of a tax incentive for real estate investors.

Timestamp 2 [00:11:49]

Discussion on the housing supply crisis, mortgage rates, and the homeless population in the US.

Timestamp 3 [00:14:14]

Increase in homelessness in America, reasons behind it, and the correlation between housing prices and homelessness rates.

The impact of high density housing on quality of life and home value [00:21:12]

Discussion on the potential negative effects of building high density housing near single family homes, including reduced home value, increased traffic and noise, and loss of nearby open space.

Alternative solutions to increase housing supply and reduce homelessness [00:23:30]

Exploration of alternative measures to address homelessness, such as trade training for the homeless and relaxing excessive safety requirements in home building.

Giving real change to the homeless [00:25:50]

Encouragement to give directly to homeless shelters or soup kitchens instead of giving small change to individuals on the street, with the concept of "give real change not small change" explained.

Note: The timestamps provided are approximate and may vary slightly depending on the podcast episode.

The Origins of Tulip Mania [00:31:37]

Tulips were introduced to Europe in the 1500s and became a luxury item for the affluent. The cultivation of tulips locally in the Netherlands led to a flourishing business sector.

The Tulip Bubble [00:32:55]

By 1634, tulip mania had swept through the Netherlands, with the demand for tulip bulbs exceeding supply. Prices reached exorbitant levels, and futures contracts were being bought and sold.

Lessons from Tulip Mania [00:37:53]

Tulip mania serves as a model for financial bubbles, with similar cycles observed in other speculative assets like beanie babies, baseball cards, NFTs, and stocks. It highlights the dangers of excess, greed, and speculation without tangible value.

The cycle of investor emotions [00:44:32]

Explanation of the different stages of investor emotions, from optimism to panic, in relation to stock market investing.

The peak of the stock market [00:46:43]

Discussion on the peak of the stock market being the point of maximum financial risk and the difficulty of selling at the right time.

Real estate as a stable investment [00:51:56]

Comparison of real estate investment to speculative bubbles, highlighting the stability and income stream provided by real estate.

Explains how the integration of HOA (Homeowners Association) helps maintain uniformity and cleanliness in the rental property investing world.

Details about the upcoming real estate event [00:38:31]

Promotion of a live event where listeners can learn about new construction fourplexes and have their questions answered in real time.

Resources mentioned:

Show Notes:

www.GetRichEducation.com/463

Get mortgage loans for investment property:

RidgeLendingGroup.com or call 855-74-RIDGE

or e-mail: info@RidgeLendingGroup.com

Invest with Freedom Family Investments. You get paid first: Text ‘FAMILY’ to 66866

Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review”

Top Properties & Providers:

GRE Free Investment Coaching:

Best Financial Education:

Get our wealth-building newsletter free—

text ‘GRE’ to 66866

Our YouTube Channel:

Follow us on Instagram:

Keith’s personal Instagram:

462: How Often Do Home Prices Fall? Homeownership Rate, Join Our Live Event

Complete episode transcript:

Welcome to Get Rich Education. I’m your host, Keith Weinhold. America’s homeless problem has become FRIGHTENING. I describe how that correlates… with the housing market.

Then, investing MANIAS. What drives people to spend more for one tulip flower bulb than they would for an entire luxury home?

And lessons you can learn that’ll benefit you the rest of your life from other manias throughout history. All today, on Get Rich Education.

___________

Welcome to GRE! From Seaford, DE to Carmel-by-the-Sea, CA and across 188 nations worldwide, you’re listening to one of America’s longest-running and most listened to shows on real estate investing. Along with plenty of ongoing hot takes on wealth mindset and the real estate economy.

I’m your host, Keith Weinhold.

See, the crash in the SUPPLY of available American homes is bad and it isn’t just creating more upward prices, it’s a contributor to homelessness.

Let’s talk about some of the drivers of homelessness, understand the problem a little more, how many homeless people ARE there in America, and then… what can we do about it?

As you’ll soon see, one prominent real estate industry influencer actually suggests that you actually SELL your rental single family homes in order to help serve the homeless. More on that shortly.

Also, I have the results from a GRE Instagram Poll. The poll question is: “Should we pay to HOUSE the homeless?”

And the answers that you - the GRE listeners gave… actually surprised me. I’ll give you those super-interesting poll results later, because I have more to explain there.

But first, what IS a homeless person? Let’s define it. I think most anyone knows that since it’s a person without a home, it’s thought of as living on the street.

Really, then, that person might not be homeless but “houseless” in a literal sense. Even if they live in a tent under a bridge, that is then, their home. Though it might be INADEQUATE housing.

More accurately, the unsheltered or undersheltered population could be more apropos.

Then there’s vagrancy. A vagrant is defined as a person without a settled home OR regular work… who wanders from place to place and lives by begging.

So vagrants are PART of the homeless population then. This all helps DEFINE what we’re discussing.

Now, the lack of available American housing supply - especially the affordable segment - is OBVIOUSLY a big contributor to homelessness.

For example, anymore, how many builders even construct a new-build entry-level home for $200 or 250K? Practically nobody… anywhere.

And just how bad is the supply problem now? Well, the NAR has been tracking housing supply since 1982 and it just hit its lowest level ever this summer - EVER - and that’s in 40+ years of tracking.

That’s one reason why just last week, it was announced that Warren Buffett is making a big bet on housing by investing in homebuilders.

Now to keep consistent with the same stats I’ve been reporting to you for you, to update that, again 1-and-a-half million available homes is the baseline supply. That’s the long-term “normal” per the FRED Active listing count.

And through last month, it’s still under 650,000. That is STILL a housing SUPPLY crash of 57% from its peak of 1 ½ million.

I want you & I to listen to this upcoming piece together. This recent interview with NAR Chief Economist Lawrence Yun is from the 8th of this month.

Yes, HE is the one that basically wants you to sell your SF rental properties. And he makes his case for an inducement to get you to do this. (Ha!)

He’s not proposing anything COMPLETELY ludicrous. It’s REALLY interesting. Listen closely for that.

This about 5 minutes in length and there’s a lot of material here within this clip - a nutrient dense piece, so I’ve got SO much to say about this when I come back to comment.

[Yun clip]

Yeah, the NAR Chief Economist there talking about how, much like I have for years, great opportunity is in the Midwest and Southeastern parts of the US.

With this greater ability for people to work from anywhere, when people move in from the pricy coasts, it’s sooo affordable to them.

Moving from Manhattan to Cincinnati feels incredibly affordable.

Moving from San Francisco to St. Louis feels like you’ve upgraded from serfdom to a kingdom.

Moving from Boston to Jacksonville feels like a total life makeover.

That’s why, here at GRE, we’re focused on properties in those INbound destinations.

Before I continue, especially for those outside the US, I know that it seems a little odd that Ohio and Indiana are in what we call the Midwest when they’re actually in the northeastern quadrant of the nation.

But the fact that they ARE midwestern states is rooted in history and in cultural tradition.

So, getting back some new angles on the housing supply crisis.

Lawrence Yun proposed that a tax incentive be introduced to unleash the inventory of SF rentals from individual REIs.

And says that there are over 20 million single-family housing units that are rented out.

If we reduced or canceled the capital gains tax & just got 1% of that inventory on the market, he states that that would help.

Well, yeah, but even that then would only put about 200,000 units of the market - and they’d get snatched up so fast.

Now, if mortgage rates come down to say, 5%, it would unleash both housing demand AND supply.

Both - like Lawrence Yun says. So it’s not apparent that that would help this shortage, if both demand and supply go up.

In a nation of about one-third of a BILLION people now - that’s how I like to express it this year - America now has one-third of a billion people… also known as 333 million - how many do you think are classified as homeless?

As you think about that - as you think about how many of America’s 333 million Americans are homeless, this homeless population figure that I’m about to share with you is from HUD and it’s through last year, so it’s their latest year-end figure.

And I’ll tell ya, it’s hard to believe this number. The Department of Housing and Urban Development states that about 582,000 Americans are experiencing homelessness.

Now, how HUD does this is that their number is a snapshot of the homeless population as of a single night at the end of January each year.

The total number of people who experience homelessness for SOME PERIOD each year will be higher than that.

I just did the math and then that means that just 1 in every 572 Americans are homeless. C’mon. Do you believe that? Only one in every 572 Americans are homeless?

I might believe that it’s something like more than 1 in 200. What are your thoughts?

Even HUD would probably concede that there are shortcomings in that stat and that it’s only a starting point.

And over the last decade, according to HUD, the homeless population is little changed… apparently until just this past year.

Homelessness is surging in America. The number of people experiencing homelessness in the US has increased 11% so far this year over 2022. That would be the biggest jump by far in equivalent government records beginning in 2007.

Now this 11% homeless jump is according to a WSJ analysis of hundreds of smaller & local agencies.

Most agencies say the alarming rise is because of the lack of affordable housing and rental units, and the ongoing opioid crisis.

Inflation is part of that affordable housing problem. Inflation widens the disparity between the haves and have-nots.

To cut some slack to census-type of surveying, homelessness can be hard to measure. Some live on skid row, some live in the woods, some homeless people live in their cars.

Some aren’t interested in being counted. Others are essentially invisible.

I mean, if someone’s between jobs and needs to couch surf at their aunt and uncle's place for three months, are they homeless or not? So, to be sure, there’s a lot of leeway in those numbers.

One in 572 as homeless - that should just be a minimum - a starting point in my opinion.

Now, homelessness broken down by STATE is really interesting.

California at 171,000, has the most of any state, more than double of next-most New York, and then Florida is third.

But let’s break that down by rate - on a per capita basis. So… think of this as the highest CONCENTRATION of homeless:

Washington DC has 65 homeless per 10,000 people. That’s not really a state though, so…

#1 on a per capita basis is STILL California, with 44 per 10,000. So California leads in the nation in homeless on both bases then - both absolute and relative.

The second highest rate is Vermont.

Third Oregon

Fourth Hawaii

Fifth is New York

And then numbers 6 through 10 on the most homeless per capita are Washington, Maine, Alaska, Nevada, and Delaware.

Now, strictly anecdotally. You’ve probably seen just what I’ve seen in the last year-plus - more visible homeless people in your city and other cities.

The state with the FEWEST homeless of all 50 states is Mississippi - and see, housing is quite affordable there. MS is one of the most affordable states for housing.

There is at least SOME correlation between your cost of housing and homelessness.

Recently on our Instagram page, and the handle there is easy to remember - it’s @getricheducation - if you want to participate in future polls, we ran a poll on homelessness.

Here is the poll question that we ran - and I’d like you to think about your answer to this too.

“Should we pay to house the homeless?”

That’s the question.

And in polling, the way that the question is phrased, of course, can skew your answer.

See, if instead, we phrased it as, “Should the government house the homeless?” you might have more ‘yes’ answers - even though it’s the same question - because you FUND the government.

But the question as we phrased it: “Should we pay to house the homeless?” - it also showed a photo of vagrants on a street curb under the question.

Here we the results, which surprised me, to:

Should we pay to house the homeless?

Those answering “Yes” were just 6%

The no’s were 45%

But we also had a third option: “It’s complicated”. 48% answered with that option.

So again, just 6% of you said we should pay to house the homeless and 45% said “no”. “48% said it’s complicated”.

In a way, that makes sense to me since we have a largely entrepreneurial, self-made type of audience. I thought that might have happened.

But what surprised me is in how emphatic it was. It was a landslide. 7 to 8 TIMES as many of you said we should not pay for the homeless as those that said we should.

Well, the reason that I added - and I’m the one that ran the poll myself - they’re quick to do. I added the paying to house the homeless “It’s complicated” option because it IS complicated… that WAS the most popular answer.

I mean, why should you go to work and pay to house a stranger that has no income because he or she doesn’t want to work?

But what if they’re disabled and they can kinda work but not really work… or a zillion other complications.

Substance abuse is obviously a big problem that keeps homeless people homeless… and there’s a substantial thought paradigm that says, if they’re an abuser, then why would I pay for THEIR housing?

Substance abuse is just one reason that there is a population that’s VOLUNTARILY homeless. They don’t want to have to comply with a group home’s ban on substances.

I wanted to address the homeless problem somewhat today, because here we are on Episode 463 of a real estate show and this is the most that we’ve even discussed it.

I think the perspective it gives you is that it helps you be grateful for what you’ve got.

But it’s abundance mentality here. You can be grateful for what you have and at the same time, grow your means.

What else would help with more housing supply which would also move us toward mitigating the homeless problem?

Well, we’ve already discussed a number of them so I’ll only go in depth with some fresh angles here.

Obviously, more homebuilding. We’ve done episodes on how 3D printed homes and shipping container homes are not quick, easy answers. Tiny homes might be but then you could get into a zoning density problem again.

Just last week, my assistant brought me this Marketwatch article that reported that the average American home size is shrinking just a little & that often times, new-build houses tend to be a little closer together.

That’s what gets us into relaxing zoning requirements. But you know something, OK, this is going to be interesting.

This plays into NIMBYism. Not In My Backyard: communities saying that they don’t want high-density housing built next to them.

Now, I think that there are a lot of critics of NIMBYism. But the criticism comes from people that live far out of that area and aren’t affected.

Let me just play a fun little experiment with you here. Let me paint a picture of a fictitious life for you and just… place yourself there.

Say that you live in a nice single-family home, with a quarter acre lot. It’s not a sprawling estate but you’ve got a good measure of privacy that way.

You’re in a SFH, quarter-acre lot and two car garage. That is classic suburbia.

And… just a hundred yards away from your home there’s a big, wide-open field where you walk your dog and use as a little makeshift golf driving range or whatever. Nice open space nearby.

Say you’ve got a fairly idyllic life here. It’s always been this way since you bought the home years ago.

Suddenly, in your neighborhood of all SFHs, you learn that they want to build a bunch of fourplexes in the nearby lot where you used to throw tennis balls to your dog.

What can that do to your quality of life & your home’s value, now that a bunch of new fourplexes and eightplexes were built nearby?

It reduces your home’s value because there are less valuable, high density properties nearby.

It also increases the amount of traffic & even noise in your neighborhood. Now you can’t use that nearby park anymore - it’s been all-built up with these higher-density apartments.

So, let me go back and ask - point blank - did you really want all those new high-density developments near your home?

If that made you uncomfortable, that’s NIMBYism. So it’s quite natural to evoke that feeling type. You’re just a human being.

How else can we increase housing supply to help reduce homelessness?

NOT with rent control. Over time, capping the amount of rent that a LL can charge gives property owners no incentive to improve their property and neighborhoods end up dilapidated.

We need more training for tradesman and laborers. How about training the homeless for that? But then someone’s got to pay for that training.

Another measure that’s become ridiculous is that we’ve gotta relax these excessive safety requirements in homebuilding. Now, some safety is good.

But when every single home - entry-level and all needs to have fire-rated shingles and fired-rated doors and GFCI outlets and smoke detectors in every room and carbon monoxide detectors all over the place, sheesh! Well, that raises the cost of housing for everyone.

In some earthquake-prone areas, you’ve got to have seismic restraining straps on your water heater or you can’t even sell your home. Do you know how big of an earthquake it would take to damage your water heater like that?

And an excessive safety PROPONENT might say, yeah, but did you hear about that one family that died ten years ago that would have lived if they had carbon monoxide detectors?

Well, the counterargument to that is, yeah, but what about all the homeless people that were exposed to the elements and died in the cold because they couldn’t AFFORD the more basic housing, the prices of which have escalated for all this excessive safety stuff.

Are you saying a middle class person’s life is worth more than a poor, homeless person’s life? That’s the counterargument.

Again, some safety is good. But we’ve gone overboard in too many places - in housing & beyond.

Rising housing costs keep people homeless. A few weeks ago, I did that episode about escalating insurance costs.

I now own some properties that have extremely low mortgage rates and the insurance has gone up to the point where I pay more in monthly escrow expenses than I do principal & interest.

But, hey. I’m not homeless, and if you’re listening to this, neither are you.

So when it comes to helping the homeless in the short-term, that campaign called, “Give real change, not small change.” - that really resonates with me.

Don’t give 5 bucks to a vagrant on the corner. That just keeps them showing up at that corner, plus they’re going to spend your 5 bucks on a cheap bottle of Monarch vodka.

Instead, if you’re going to give, give to a homeless shelter or soup kitchen.

That’s what’s meant by “Give real change, not small change.” And that’s something actionable.

Coming up next, investing MANIAS. How wild it gets - paying more for a tulip flower than a SFH, shooting and killing someone over a Beanie Baby toy… and then I’m going to wrap it all up with what all this has to do with the cycle of your investor emotions.

Around here, we don’t run ads for the Swiffer. This week’s sponsors that support the show are people that I’ve personally done real estate business with myself and have benefited from.

Ridge Lending Group specializes in INVESTMENT property loans in nearly all 50 states. Start your prequalification at: RidgeLendingGroup.com

Then, for super-passive real estate returns, check out Freedom Family Investments. Right now, what you can do, is just text “FAMILY” to 66866.

I’m Keith Weinhold. You’re listening to Get Rich Education.

___________

Welcome back to the GRE Podcast. I’m your host and my name is Keith Weinhold.

If you’ve got a friend or family member that you think would benefit from the knowledge drops here on the show, you can simply tell them to grab the free Get Rich Education mobile app.

That’s a convenient option for listening every week for both iOS and Android.

Today’s topics of homelessness and investing manias could very well bring a new audience here, so…

A little more about my backstory. I’m from PA but got my real estate comeuppance in Anchorage, Alaska of all places & grew out nationally & internationally from there. I had humble beginnings and wasn’t born anywhere near wealthy. I had to figure out how to build it myself.

But see, if I were born wealthy, I wouldn’t have learned how to build it, and then I wouldn’t be of much help to you. Likewise, if you’re building it yourself, you’ll be able to help others too.

BTW, I was born in the same PA town as Taylor Swift.

Though she & I don’t have much ELSE in common, I guess that she & I are both best-known for using a microphone.

Though I think that I’m about as likely to start using this microphone to sing into your ears like Taylor Swift does… as Taylor is to launch a real estate investing show.

For hundreds of years, the tulip has been one of the most-loved flowers in the Netherlands. It’s an enduring icon - as synonymous with the country as clogs, windmills, bicycles, and cheese. The tulip has a long and storied history - including the infamous shortage in the 1600s known as “tulip mania”. If you’re someone that has even a fleeting interest in investing, you should at least know what this is.

Tulips first appeared in Europe in the 1500s, arriving from the spice trading routes… and that lent this sense of exoticism to these imported flowers that looked like no other flower native to the continent.

It’s no surprise, then, that tulips became a luxury item destined for the gardens of the affluent.

According to The Library of Economics and Liberty, “it was deemed a proof of bad taste in any man of fortune to be without a collection of [tulips].” Hmmm.

Well, following the affluent, the merchant MIDDLE classes of Dutch society sought to emulate their wealthier neighbors and also demanded tulips.

So to start out with, it was purchased as a status symbol for the sole reason that it was expensive.

But at the same time, tulips were known to be notoriously fragile, and would die without careful cultivation. In the early 1600s, professional cultivators of tulips began to refine techniques to grow and produce the flowers locally in the Netherlands. They established a flourishing business sector that persists to this day.

By 1634, tulipmania swept through the Netherlands. The Library of Economics and Liberty writes, “The rage among the Dutch to possess tulip bulbs was so great that the ORDINARY INDUSTRY of the country was neglected, and the population, even to its lowest dregs, embarked in the tulip trade. Now, everyone’s in - rich to poor.

It’s a little hard to say for sure how much people paid for tulips.

But Scottish journalist Charles Mackay, wrote an extremely popular 1841 book - you’ve probably heard of this book - it’s called the Memoirs of Extraordinary Popular Delusions and the Madness of Crowds…

It does give us some points of reference such that the best of tulips cost upwards of $1 million in today’s money (but a lot of bulbs traded in the $50,000–$150,000 range).

By 1636, the demand for the tulip trade was so large that regular markets for their sale - like a little Dow Jones Industrial Average - got established on the Stock Exchange of Amsterdam, in Rotterdam, Haarlem, and other towns.

It was at that time that PROFESSIONAL TRADERS got in on the action - that’s all that some people do now - is trade tulips… and everybody appeared to be making money simply by possessing some of these rare bulbs.

Dutch speculators at the time spent incredible amounts of money on bulbs that only produced flowers for a Week—many companies were formed with the SOLE PURPOSE of trading tulips.

To everyone, at the time, it seemed that the price could only go up forever.

Pretty soon, demand for tulips EXCEEDED THE AVAILABLE SUPPLY of tulips by so much that people were into buying futures contracts, basically saying, I’ll pay you this much money TODAY for a tulip that you provide to me in 3 years.

By the last 1630s, these futures contracts were like a crack that appeared in the price runup. Demand began to wane when people were just buying a token for a future tulip that hadn’t even started growing yet.

People felt like they weren’t buying anything tangible anymore. That’s one factor that helped create an oversupply of tulips in the market and started depressing the prices. Supply caught up with - and exceeded - demand.

A large part of this rapid decline was driven by the fact that people had purchased bulbs on credit, hoping to repay their loans when they sold their bulbs for a profit. But once prices started to drop, holders were forced to sell their bulbs at any price and to declare bankruptcy in the process.

So people had begun buying tulips with leverage, using margined derivatives contracts to buy more than they could afford. But as quickly as the run-up began, confidence was dashed. By the end of 1637 is when prices began to fall and never recovered.

And the bubble burst.

Buyers announced that they could not pay the high price previously agreed upon for bulbs, and that made the market fall apart.

While it wasn’t actually a devastating occurrence for the entire nation’s economy, it did undermine social expectations. The event destroyed relationships built on trust and people’s willingness and ability to pay.

It’s been said that “the wealthiest merchants to the poorest chimney sweeps jumped into the tulip fray, buying bulbs at high prices and selling them for even more.”

Well, this is what can happen - today it happens with financialization and nothing real backing up purchases.

Tulipmania is a model for the general cycle of a financial bubble. That’s what happened with Dutch tulips.

Now, here in more recent times, similar cycles have been observed in the price of Beanie Babies, baseball cards - I got caught up in the baseball cards as a kid, owning more than 100,000 baseball cards at one time, also non-fungible tokens (NFTs), and shipping stocks.

The example of tulipmania is now used as a parable for other speculative assets, such as cryptocurrencies today or dotcom stocks from around the year 2000.

So, when you hear someone likening an investment to a Dutch tulip bulb, now you’ll know what they’re talking about. It’s a symbol of excess, greed, and FOMO.

But there has been a good bit of more modern scholarship that tells you that tulip mania did indeed occur in the 1600s Netherlands. But that the tale has been exaggerated and it’s something that the upper classes of society were mostly involved in.

Now, that’s the Dutch tulip bubble. But for a more modern-day parable about an investing mania, there’s a new movie about the rise & fall of BEANIE BABIES that’s on Apple TV+.

These were little stuffed, plush toy animals that became more popular among adults than children.

The rise and fall of Beanie Babies—toys that people mistakenly thought would make them rich. The movie is called “The Beanie Bubble”.

It’s a MOSTLY TRUE account of the lovable toys’ boom and bust in the ’90s - comparable to the meme stock frenzies that took place during the Covid-19 pandemic.

These $5 pellet-stuffed plush toys had astronomical appreciation estimates: Stripes the Tiger, released in 1996, was predicted by collectors to surge from $5 to $1,000 by 2008.

Forecasts like these were so enticing that one dad invested his kids’ college funds in Beanie Babies, thinking he’d resell them later for a hefty profit.

At the height of the frenzy, people were ruining relationships and committing felonies to get their hands on some of these sacks of fuzz.

Border officials confiscated more than 8,000 smuggled Beanie Babies at a US–Canada border crossing in 1998.
A West Virginia man shot and killed a former coworker in 1999 after an argument partly about $150 worth of Beanie Babies.
That same year, a divorcing couple couldn’t agree on how to split up their collection, so the judge made them divvy up the toys in person, right on the courtroom floor.

How did that all happen?

Barely anyone cared about Beanie Babies when a company called Ty Inc. launched them in 1994. Stores only got lines out the door once the toy’s creator, now-billionaire Ty Warner, began pulling strings to juice demand. Here’s what Warner did. OK, so here’s how you induce people into a speculative bubble.

He refused to stock Beanie Babies at Toys R Us and Walmart. Instead he created an illusion of rarity by only selling them at small toy stores and independent shops.
Even if you did find a retailer, every store’s supply of Beanie Babies was limited to 36 of each animal, so inventory restocks drew a crowd.

This, combined with Warner’s decision to start “retiring” certain animals in 1995, created artificial scarcity and a mass panic to stock up on Beanie Babies.

Soon, an aggressive resale market was born, replete with magazines and blogs and even trade shows for these Beanie Babies.

One woman’s guide to the secondary Beanie Babies market got so popular that she was selling 650,000 copies per month and, on many days, she did two or three radio interviews before her kids woke up for school. Ty Inc. later gave her an award for boosting sales.

At Peak Beanie mania, Ty Inc. and legions of speculators actually made hordes of money:

The stuffed animals accounted for 6% of eBay’s sitewide sales in 1997 and 10% in 1998. Beanies averaged a resale value of $30—six times their retail price—but rare ones, like the Princess Diana bear, went for hundreds or thousands of dollars (and now you can find one online for $15 bucks).
Ty Inc. hit $1.4 billion in sales in 1998, which is what Mattel grossed in Barbie dolls in 1995. At the end of the year, Ty Warner gave all ~250 employees holiday bonuses equal to their annual salaries.

But most regular people didn’t sell their Beanie Babies at their peak price. And unfortunately for them, the hype subsided. Anticipating a drop in interest as more kids reached for Pokémon and Furbies, Ty Inc. announced it would stop making Beanie Babies at the end of 1999, and that poked a hole in collectors’ this-will-never-not-be-popular mentality and that sent demand plummeting.

There were no underlying fundamentals to Beanie Babies’ value. That’s all that I’ve got on that speculative craze.

So let’s review how this happened with both speculative crazes - Dutch tulips and Beanie Babies:

Investors lose track of rational expectations.
Psychological biases lead to a massive upswing in the price of an asset or a sector.
A positive-feedback cycle keeps inflating prices.
And soon, investors realize that they are holding an irrationally-priced asset.
Prices collapse due to a massive sell-off, and an overwhelming majority go bankrupt.

Now, much stock market investing is based off of buy low and sell high mentality. And stock investors can get caught up in similar crazes.

But because many stocks are tied to productive companies, the stock investor deals with smaller bubbles. A lot of times, the stock price can double, triple, or even 10X even though that company is not even profitable.

Buy low & sell high. Well, that sounds easy. But why is this harder to do than it sounds? It's called the cycle of investor emotions.

It starts here with… optimism. Because you HEAR about 10% stock returns or people making money with Dutch tulips or Beanie babies.

Let’s say that you aren't fully invested in the stock market. But some friends are, and they're achieving small gains.

Then comes excitement. The market is now up some more. Hey, what’s in motion tends to stay in motion.

More friends are telling you how much money they're "making".

You're soon experiencing a full-blown case of FOMO—Fear Of Missing Out.

The next stage is the Thrill you feel. So you jump into the stock market fully, rationalizing with something like, "Hey, I'm a momentum investor". Sounds pretty good, I guess.

Now that you’re in, it actually feels fantastic to you for a short time. You figure that some days, you're making more from stocks than your job. Winning activates dopamine.

Dopamine is a brain chemical that’s known as the “feel-good” hormone. It gives you a sense of pleasure. It also gives you the motivation to DO SOMETHING when you're feeling the pleasure.

So then, you add MORE shares… at an elevated price until you are FULLY invested. Now everyone is "making money", even your Uber driver.

The next stage is Euphoria - The peak! As you can see, this is the Point of Maximum Financial Risk.

OK, now, remember the simplicity of “buy low, sell high”?

Well then, savvy stock investors should now be SELLING here in my example - at the HEIGHT.

Now be “selling”? Leaving the party at its crescendo? Stopping the dopamine flow? Yes, exactly… and THAT’S why it’s so difficult.

What happens after the stock market peak? Overbought, with bloated price-to-earnings ratios, the market soon drops 10% from its recent high.

That’s what’s known as a correction - a drop of 10% or more. Now you feel a little ANXIETY. Your dopamine flow is stifled.

Next, you tell yourself, "I shouldn't be worried because I'm a long-term investor." It's down 15%. You're experiencing DENIAL & FEAR.

Now you're checking the Robinhood app almost hourly to see if it will recover.

Next, comes Desperation & Panic - Stocks are down 20%, that’s the definition of a bear market. You're devoting more mindshare to this each day than what's healthy.

Then there’s Capitulation - Down 30%, you finally surrender to a FEAR of FURTHER LOSS. You’re getting so sick of months of losing. You finally do it and cash out your stocks into a safe money market fund. Now you’re out.

And you rationalize and justify doing this because you tell yourself, "You know, at least when I wake up tomorrow, I'll know that I haven't lost money AGAIN. And THAT gives me certainty.”

The next stage in the Cycle of Investor Emotions is Despondency - You realize that what you've done is the polar opposite of successful investing. It’s complete. You’ve now bought high… and then sold low.

Next, stocks completely bottom out. But this is actually the Point of Maximum Financial Opportunity. Instead, you should be buying.

But you can’t. Because you’re experiencing the next investor stage - Depression. You're so full of contempt for the situation that the idea of actually buying at bargain-basement levels again is simply inconceivable. You've been burnt badly.

Then, there’s Hope & Relief - The market has begun ticking up after the crash. It soon should be clear that share prices are FAIRLY VALUED again.

But you don't buy the recovery story. You wait until enough price growth occurs that the confidence and Optimism stage is felt again before you’ll even consider getting back in and buying.

And the entire pattern repeats.

That's the “cycle of investor emotions”. There's an average of 3-and-a-half years between each stock bear market, BTW.

Of course, we've been kind to call this all “investing”. It's more like speculating.

But here's the real problem—most investors THINK they're better than average stock pickers, so they keep playing this game. This effect has a name. It’s called illusory superiority.

It's like how at least 70% of people think they're better than average drivers, despite the statistical impossibility.

Even professional money managers fall prey to this! Fewer than 10% of active U.S. stock funds manage to beat THEIR benchmarks.

The renowned British economist and value investor Benjamin Graham once said: "The investor's chief problem—even his worst enemy—is likely to be HIMSELF."

Well, as real estate investors, we largely SIDESTEP the cycle of investor emotions for two main reasons.

Returns are more stable.

Real estate, we sidestep this emotional roller coaster. Not only do we have stable prices, but appreciation is one of just 5 ways that you’re simultaneously paid.

RE also has monthly income. Dutch tulips or Beanie Babies don’t pay you a durable monthly income stream. They don’t provide an income stream at all.

And finally, RE is a REAL asset that fulfills a REAL human need.

I hope that you enjoyed this journey through speculative bubbles today and how they play into human psychology and investor emotions.

Go ahead and tell a friend about Get Rich Education.

If you’ve got a friend or family member that you think would benefit from the knowledge drops here on the show, you can simply tell them to grab the free Get Rich Education mobile app.

That’s a convenient option for listening every week for both iOS and Android.

My name’s Keith Weinhold and I’ll be back with you right here… next week. Don’t Quit Your Daydream!

Direct download: GREepisode463_.mp3
Category:general -- posted at: 4:00am EDT

Mon, 14 August 2023

Get our free "Don't Quit Your Daydream" Letter. Text 'GRE' to 66866.

Home prices fell three times since 1975. We explore the reasons why.

The homeownership rate is 66% today. (The long-term average is 65%.) I expect the homeownership rate to fall due to low affordability, which will increase renter households.

If you have dollars in a savings account that pays 5% interest, I describe why you’re losing prosperit.

Our Investment Coach, Aundrea & I discuss the state of the real estate market.

Then we discuss our upcoming live event for new-build Utah fourplexes. They produce cash flow, have great tenant amenities and come with built-in equity. This area is extremely fast-growing: Register here.

Timestamps:

National Home Prices Fall and Causes [00:00:01]

Discussion on the historical trends of national home prices, the causes of price falls, and the impact of the 2008 global financial crisis.

Housing Affordability Crisis [00:00:50]

Exploration of the current state of housing affordability and the impact of the pandemic on home prices.

Upcoming Real Estate Event [00:01:44]

Announcement of an informative live real estate event that listeners are invited to join.

The current state of housing affordability [00:11:45]

Discussion on the challenges faced by first-time homebuyers due to higher prices, mortgage rates, and lending requirements.

Homeownership rate trends [00:13:11]

Analysis of the historical homeownership rates, including the impact of aging population and low affordability on the rate.

Future outlook for homeownership rate [00:19:40]

Prediction of a decline in the homeownership rate below the current 66% due to poor affordability and increasing number of renters.

Rental Market Overview [00:24:10]

Discussion on the current state of the rental market, including cash flowing properties, stable prices, and limited inventory.

Demand for Investment Opportunities [00:26:14]

Exploration of the demand from investors who are looking to invest their existing equity and the regions they are interested in, such as the Southeast and Midwest.

New Build Income Properties [00:28:14]

Introduction of a provider offering new construction fourplexes in the Intermountain West, discussing the market growth, population demographics, and amenities of the properties.

The opportunity for new build properties in a fast growth area [00:34:59]

Discussion on the benefits of investing in new construction properties in a rapidly growing area with good cash flow.

The role of HOA in maintaining property values [00:36:04]

Explains how the integration of HOA (Homeowners Association) helps maintain uniformity and cleanliness in the rental property investing world.

Details about the upcoming real estate event [00:38:31]

Promotion of a live event where listeners can learn about new construction fourplexes and have their questions answered in real time.

Resources mentioned:

Show Notes:

www.GetRichEducation.com/462

Join our Utah fourplexes live event:

GREwebinars.com

Get mortgage loans for investment property:

RidgeLendingGroup.com or call 855-74-RIDGE

or e-mail: info@RidgeLendingGroup.com

Invest with Freedom Family Investments. You get paid first: Text ‘FAMILY’ to 66866

Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review”

Top Properties & Providers:

GRE Free Investment Coaching:

Best Financial Education:

Get our wealth-building newsletter free—

text ‘GRE’ to 66866

Our YouTube Channel:

Follow us on Instagram:

Keith’s personal Instagram:

461: Skyrocketing Insurance Costs, The End of Free Money

Complete episode transcript:

Welcome to GRE! I’m your host, Keith Weinhold. Historically, just how often DO national home prices fall… and what causes it?

Then, learn more about how TODAY’S housing affordability is absolutely awful. Then, our informative live real estate event that you’re invited to join. All today, on Get Rich Education.

__________

Welcome to GRE! From Pennsylvania’s MONongahela River to Mono Lake, CA and across 188 nations worldwide. I’m Keith Weinhold and you are listening to our one big weekly show. This is Get Rich Education.

"Real estate never goes down."

Yeah, a handful of people actually told me those five exact words in the mid-2000s decade. “Real estate never goes down.”

Of course, 2008's Global Financial Crisis (GFC) and Mortgage Meltdown proved them ALL wrong.

And ya know what, I've never heard one single person utter those words since!

Late last year, national home prices took just a small dip for a few months on a m-o-m basis. That’s not something that often happens though.

So as minor as THAT was, that’s the event that actually precipitated the creation of this segment of our episode.

There’s a colorful chart that provides a… terrific visual of the month-over-month shifts in US home prices, per Case-Shiller, dating back to 1975. And if you’re one of our “Don’t Quit Your Daydream” letter subscribers, you got to see it last week.

Winston Churchill said, "The farther backward you can look, the farther FORward you can see."

I don’t know that I’ve contributed anything quite that proverbial to the world on that exact subject yet.

I just say that when it comes to future expectations, I favor "history over hunches".

So, before we look at WHY home prices historically fall, first of all, why go back to 1975 when we’re looking at a history of home prices. Why that slice of time, 1975 to present?

Well, that’s almost 50 years. It’s two generations, so it stops just short of your grandfather’s generation which was back when the dollar was still pegged to gold.

Here's what we can we learn from almost 50 years of home price history on a relatively untethered dollar:

Nominal home prices usually rise, but not always. This is NOT inflation-adjusted. That’s the first takeaway. Of the 500 to 600 little rectangles, that’s how many months there have been since 1975, they’re nearly all blue, which means prices rose.

Before we center on the red areas, which is when & where prices dipped…

The next thing I can tell you is that it shows that home prices are remarkably stable.

A SEASONAL fluctuation is quite apparent. Year after year, home price growth is weaker in winter and stronger in summer.

But do you know how many times national home prices have dipped since 1975? Any idea?

It is… three. Three periods of falling prices in the last… 48 years. Those periods were the erstwhile Global Financial Crisis period from 2007 to 2011, then that tiny dip that occurred in the last few months of last year.

That was due to a late pandemic slowdown.

Before I tell you about the other time, that third time, that so few discuss, let me tell ya, the 2008 GFC went deep red. Most markets had losses of 20% or more.

I WAS an active RE investor at that time.

And that downturn was caused by irresponsible lending, rampant speculation, and an OVERsupply of housing. That’s well documented.

Look around today, and we don’t have any of those conditions today. Today it’s tough lending standards, no wild speculation, and oppositely, as you know, it’s that STARK UNDERsupply of housing.

But few people seem to know about an earlier attrition in prices. It was a mild early '90s downturn. It was really small, just a percent or two per year in a lot of places, but it persisted for more than 5 years.

I think a lot of people DON’T KNOW about that small early ‘90s downturn, that’s why before the Global Financial Crisis, they said what we all know to be false, “Real estate never goes down.”

The start of the ‘90s. That’s before my time - I mean, I was alive but not old enough to be investing, so I had to do some research about what caused prices to circle the drain just a little.

And to boil it down, it occurred for two main reasons - it was from defaults created by high household debt and also, adjustable-rate mortgages kicking in, making those homeowners pay higher rates - and some couldn’t pay it.

So as we look back like Winston Churchill to get lessons from history, I like to look at today’s landscape and see if we have any of those two early ‘90s conditions.

High household debt? Well, rather, really this era’s aberration is the opposite condition. Today it’s households sitting on a lot of cash and equity.

And then the second reason for the early ‘90s price dip - adjustable rate mortgages kicking in.

Well, that is affecting the commercial space, not the residential side, where homeowners have now been long accustomed to FIXED rate debt.

Now, before we look into the future of home prices - and I’ve got some good stats there…

To summarize, the top takeaways from 48 years of looking at monthly HP growth are that:

Prices typically rise, not always
Prices are remarkably stable
Prices rise more in the summer than the winter
And that historically, let’s distill it down to three - three chief culprits for falling prices are an OVERsupply of homes, irresponsible lending, and a distressed borrower

Now, with housing, people tended to use the word “uncertainty” a lot - really, constantly, ever since the pandemic began in 2020.

Now, I think that we can finally say that the clouds have begun to clear. Though, of course, we never have 100% clairvoyance.

Most everyone is confident that the majority of interest rate hikes are done, inflation has come down, mortgage rates are back at historic NORMS right now actually, and home prices are rising at historic NORMS again too.

You have all this money sloshing around the economy that is still fueling consumer wealth from the pandemic.

All this money sloshing around AGAINST a low housing supply, and with more economic certainty.

All this really has a lot of people more bullish than I’ve seen in a couple years.

Homebuilder confidence is really surging right now.

And looking into the next year, more and more analysts are now forecast increasing national home prices.

Fannie Mae recently revised their forecast upward to 3.9% appreciation for THIS YEAR.

CoreLogic now expects prices 4.3% higher from June of this year to of next year. And Zillow expects 6.3% price appreciation over this same time period.

And, our core investor areas have just kept climbing and really didn’t experience last year’s slowdown at all.

I guess this isn’t necessarily good news, right? The bad news might be that there’s no price BREAK.

Higher RATES still didn’t break the market.

Now, I’ve heard some analysts at real estate research firms speculate that if INTEREST RATES fall in the next year with all these other favorable conditions that 10% HPA is possible.

I’d say, that’s speculative alright. It’s so hard to predict future interest rates that I’m not willing to do it.

And like I’ve shared with you here, which is contrary to what people USED to believe, it’s that:

Mortgage rates really don’t have that much to do with home prices!

So when it comes to home prices over the next couple years, I think that the most commonsense expectation is slow price growth and stability.

Now, just wait until you see what’s happening with the homeownership rate today. I want to share that with you shortly.

Before we get back to RE, let’s Zoom out for a moment and look at the broader investing landscape while we’re here at mid-quarter.

Bitcoin is getting less volatile than stocks. That’s one trend lately. Another way to say that though, is that bitcoin prices are in a period of historic stagnation.

Gold has fallen from the $2,000 an ounce mark that it touched recently.

Oil prices have been on a multi-month tear, but you know, when you look at it on an inflation-adjusted basis, which so many people forget to do, oil at under $100 a barrel feels inexpensive.

Elsewhere in investing, some online savings accounts have hit the 5% yield mark.

That might sound good when you consider that inflation has backed off.

But as most agree that the CPI is understated, if you think that the true diminished purchasing power of the dollar is 5% and your savings account rate is 5%, aren’t you at least treading water?

Well, first of all, just treading water means that you aren’t going anywhere or growing.

But you’re not even treading water. Because don’t forget that your interest earnings on savings accounts get taxed.

So it’s good to hold some liquidity - always. But you’re likely underwater with a 5% savings account in this era.

Yes, on your interest earnings, you’re taxed at your earned income tax rate, between 10 and 37%. Say that you’re in the 32% tax bracket.

Well then, real inflation is 5% and your 5% savings account only yielded 3.4%.

On an inflation-adjusted basis, even if you happen to have a savings account with a yield that high, your inflation-adjusted return is negative 1.6%.

That’s why, here at GRE, we typically invest in vehicles that target returns VASTLY exceeding both inflation and taxes.

As much as that might hurt, you know who today’s real estate market is actually really bad for? Even worse for the saver that isn’t even treading water.

It is downright AWFUL out there for those wannabe first-time homebuyers.

They are looking at this triple-headed monster of higher prices, higher mortgage rates, and stringent lending requirements. And then if they overcome ALL that, they’ve got to compete for that tight supply.

It’s made affordability for people in THAT position really awful.

In a lot of markets, a starter home is $400K. With your 20% down payment plus closing costs, that’s $100,000 out of pocket, right upfront, as well as your ongoing monthly payment… all for an asset that doesn’t generate income when it’s your HOME.

Well, that’s an insurmountable hurdle for a lot of people.

This low affordability moves people out of the homebuyer class and adds them to the ranks of the RENTER class.

Well, there's our opportunity as landlords.

You aren’t preying on them. You’re risking your capital to provide good housing for them.

But curiously, the HOMEOWNERSHIP RATE is actually just a touch higher than usual right now, despite souring affordability.

So, let’s take a look at this. And then I’ll break down what it means to you as well as where we’re headed.

Since 1965, the average homeownership since 65% and currently, it’s 66%, running a little high.

BTW, homeownership peaked at 69% in 2004—that's back when you could outright lie about your income, job, and assets, and still get a mortgage. Many people did just that. NINJA loans.

When you hear the acronym, NINJA loans, what that stands for is no income, no job, or assets.

Well, you either rent your home or you own your home. It’s one or the other.

So then, today's 66% homeownership rate means that everyone else, 34%, are renters.

When the homeownership rate drops, then you’ve got more renters.

The low point for homeownership was in 2016 at 63%.

It’s grown since then, and you might wonder… how in the heck is homeownership above average today in the face of this low affordability? How is it 66%.

Well, there’s a few reasons for that and it’s not always intuitive. America’s population keeps AGING.

And that skews figures… because homeowners tend to BE older.

Secondly, incumbents - those that already GOT their home have really low, affordable payments. They’re not going to lose their home & become renters.

80% of borrowers have a mortgage rate under 5%. You’re really happy to stay put when your mortgage rate begins with a “4” or less - and you can also keep making the payment.

It’s a payment amount that does not rise with inflation.

That introduces a lag effect in the stats. It’ll be a little while until this low affordability gets reflected in a lower HO rate.

There’s a low FORECLOSURE rate, under 1%. Americans can afford their payments and they have the motivation to keep making them.

Now, over on YouTube, I shared a great map with you, the Homeownership Rate by state and broke that down. Join us over there. On YouTube, we’re called “Get Rich Education”, of course. I host THAT show and it’s different from THIS show.

What’s the trend here? Well, HO is highest in low cost states like the Midwest and Southeast, and HO is lower in high cost states.

WV has the highest rate at 78%... because it’s low cost.

NY has the lowest HO at 54%... because it’s high cost. NYC drags down the number for upstate NY.

So where are we headed? In the future, I expect a NATIONAL DROP in the homeownership rate.

This is because few expect property prices or mortgage rates to fall significantly. Lending requirements should stay strict.

So it’s the awful FTHB affordability that will continue to take homeownership lower.

See, FTHBers are also exactly the type of people that often have student loan debt repayments to make… if they ever have to begin repaying them.

That’s also going to make it tougher for people to clear that affordability bar. They’re going to keep being your renter.

And that's why I expect the homeownership rate to plummet below 66% where it is now, and then below the long-term average of 65% by 2025 or 2026. That’s where we’re likely headed if market forces prevail.

Depending on who our president is in 2025, government relief programs are just about the only thing that I can see getting in the way of a declining HO rate.

Household FORMATION is high right now… because you have sooo many Americans between ages 25 and 40.

So that question you’ve got to ask is - is that new HH going to be formed as a OO residence or as a rental?

Increasingly, it’s gonna be a rental because of that continued poor affordability.

See, for a ton of people, if they didn't get their ultra-low rate mortgage the past couple years, then, well, it’s too late.

That era is over and that’s why their affordability ship has sailed. That ship has passed. It’s gone.

And that's why more RENTERS are being made every single day.

So if you’re a LL, this is expected to both increase your occupancy rate AND the amount of rent that you can charge.

Carefully-chosen rental property is really where today’s opportunity is.

I’ve got more on that shortly, as I’m about to bring in one of our two Investment Coaches.

You know, you’re telling us that you find it so helpful to have free one-on-one coaching with them, either Aundrea or nuh-RAYSH.

Both coaches have their MBAs. When you read their bios on our Coaching Page, they’ve got some impressive international corporate experience.

But they both live right here in the USA and they’re active REIs themselves - that’s really how they help get you started and connect you with the right market and property.

It’s an in-house conversation with an IC & I straight ahead and we’ll discuss how we can help you.

I’m Keith Weinhold. You’re listening to Get Rich Education.

__________________

Aundrea talked about cash flow. OK, that exists. Great. Yet, I still think of these as better for appreciation than cash flow over time. She’d probably agree.

Maybe you’re thinking a brand new construction duplex in the path of progress IM West could cost $1M or $2M, but no, this builder provides them for less than that.

And then, of course, you’re probably going to finance most of that cost yourself too.

And, BTW, Aundrea did smile at my dorky joke about her loving rap music. A big smile that you couldn’t see through the audio-only podcast here.

But, yeah. You didn’t quite hear a laugh. See, one prerequisite to laughing is that a joke actually be funny.

In any case, Aundrea and the provider are your two co-hosts on Wednesday.

The provider is a powerhouse of knowledge about not just real estate and demographics and fourplexes, but construction and financing too and everything that goes into it in order to optimize the investor experience for you.

HE can answer questions in real-time for you.

It is almost time for the Beehive State to shine as Utah is front, center and under the stage lights on GRE’s Live Event in just two days.

You are cordially invited to join… as long as you don’t ask Aundrea about rap music.

But, really. When you put this all together - a 4-unit building is the most that you can get with best financing terms, the cash flow, new construction, often this BUILT-IN equity at purchase time too, a fast population growth market, all inside a demographic population in Utah that’s young and has good incomes… it’s really quite remarkable. Quite a confluence.

We haven’t had an event for a product type like this before, and I don’t know if we’ll ever have an event quite like this again.

Attend live to get your questions answered and get the first look at the inventory.

But if you can’t make it on Wednesday, then sign up anyway and we will effort to get the replay link for you.

You can do it all at: GREwebinars.com

Until next week, I’m your host, Keith Weinhold. DQYD!

Direct download: GREepisode462_b.mp3
Category:general -- posted at: 7:20am EDT

Mon, 7 August 2023

Sharply higher insurance premiums are affecting property owners nationwide. It’s especially bad in: CA, LA, FL, TX and CO.

This is due to erratic weather (climate) and higher rebuilding costs.

Phenomena like an increasing intensity and frequency of hurricanes, tornadoes, wildfires, and floods are sending some insurers out of business.

State Farm and AllState completely stopped issuing new homeowner policies in California.

Some areas are on the brink of becoming completely UNinsurable. In that case, the only sales that could occur with all cash buyers.

Learn three techniques to keep your skyrocketing insurance costs lower.

As you’ll learn today, landlords have more options than homeowners for navigating spiking insurance rates.

Then, listen to a CNBC clip along with me about how the end of ZIRP (zero interest rate policy) affects your life and investments.

Resources mentioned:

Show Notes:

www.GetRichEducation.com/461

Get mortgage loans for investment property:

RidgeLendingGroup.com or call 855-74-RIDGE

or e-mail: info@RidgeLendingGroup.com

Find cash-flowing Jacksonville property at:

www.JWBrealestate.com/GRE

Invest with Freedom Family Investments. You get paid first: Text ‘FAMILY’ to 66866

Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review”

Top Properties & Providers:

GRE Free Investment Coaching:

Best Financial Education:

Get our wealth-building newsletter free—

text ‘GRE’ to 66866

Our YouTube Channel:

Follow us on Instagram:

Keith’s personal Instagram: