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511: Freedom, Liberty, and Real Estate Investing

Complete episode transcript:

Keith Weinhold 00:00:01 Welcome to GRE. I'm your host, Keith Weinhold. Why do people vilify wealthy business owners and landlords but praise wealthy actors and athletes? Rent control plans must be killed where the real opportunity is in today's real estate market. Then my in-person sit down interview with the president of the micro nation of Levelland today and get rich education.

Robert Syslo 00:00:27 Since 2014, the powerful Get Rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate, investing in the best markets without losing your time being a flipper or landlord. Show host Keith Reinhold writes for both Forbes and Rich Dad Advisors, and delivers a new show every week. Since 2014, there's been millions of listeners downloads and 188 world nations. He has A-list show guests include top selling personal finance author Robert Kiyosaki. Get Rich education can be heard on every podcast platform, plus has had its own dedicated Apple and Android listener. Phone apps build wealth on the go with the get Rich education podcast.

Robert Syslo 00:01:05 Sign up now for the get Rich education podcast or visit get Rich education.com.

Corey Coates 00:01:13 You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.

Keith Weinhold 00:01:29 Welcome to Greece. From Dubrovnik, Croatia, to Dublin, Ohio, and across 188 nations worldwide. I'm Keith Weinhold than you are inside episode 512 of get Rich education. You can set up your life so that you stop using your time to make money. Use the bank's money to make money. People come from scarcity families, just like I did with a scarcity mindset to think all debt is bad. Hang off debt won't make you wealthy. You don't build wealth. So by the time you reach age 62, you think, hey, I just paid off my last debt and now I can retire. It doesn't work that way. Well, why couldn't you retire sooner? Sheesh. So what do people mistakenly do? They end up working their whole life for people that have debt. Successful business owners and real estate investors carry debt.

Keith Weinhold 00:02:29 That's how they can own so much productivity and so many assets. And you know what's interesting here? Business owners and real estate moguls, they're the ones that often seem to be vilified, criticized, ridiculed for obtaining wealth when they took risks, took out loans and provided jobs or housing for others, yet Yet at the same time, somehow actors, athletes and singers are all praised for obtaining wealth as a performing artist. That makes zero sense. Why would you criticize a successful business owner like Amazon founder Jeff Bezos? Bezos probably made your life distinctly better by offering you convenient shopping for anything. Protein bars with a few clicks, free shipping, and pioneering drone delivery. A landlord is often vilified. Most landlords are mom and pop types that aren't even that wealthy. But even if they were, as long as they're not a slumlord, I mean, they took on risk debt, operating expenses, and being on call 24 over seven in order to provide others with housing. So with Bezos types and landlords, we're talking about taking risk to provide society with essentials like food and housing.

Keith Weinhold 00:03:58 And while the business owners get vilified baselessly performing artists like actors, athletes and singers do not. Yet they merely provide entertainment to society. Now I like entertainment and I follow sports to the NFL. Major League Baseball, the NBA. But their services are not essential. Take a movie actor. They get paid well for pretending to be somebody else. Consider how absurd that sounds. And yet they're praised for obtaining wealth from doing that. So this is really backwards. And, you know, I think that a lot of this resentment for business owners is that you can't really see what they do for you. Like, you can a performer that's on the front stage, like Beyonce or Lizzo or Taylor Swift, Business owners, real estate investors, they're on the back stage. And what an entertainer does front stage that is highly visible. I mean, that's my best guess about why this is. And a lot of the time it just comes back to these primordial human emotions like resentment and jealousy and envy. There is no reason to criticize the rich just solely for being wealthy Because deep down, it's all where we want to be.

Keith Weinhold 00:05:21 Anyway, how is Bezos bad and Lizzo good? I don't get it, but it's been that way for a while now. When you look at surveys of institutions that are most trusted over time, and it's been pretty much the same these past few decades, what's at the top of the polls are small businesses. People say that they're trusting of small businesses in your rental property. Business surely counts here. Small businesses trusted more than institutions like the media or politicians. So I encourage you on social media and wherever else to support small businesses. And it's kind of funny how friends they often might not put a like on your small business, though they say that they trust them and that they resent large businesses, you know? Then that friend turns right around and supports Apple, Coca-Cola, and Starbucks. people say they trust small business, but so often then they go patronize large businesses. Nothing wrong with patronizing large businesses, but you're just not doing what you're saying. So my point is, don't resent anyone just for financial success and consider outwardly supporting small businesses.

Keith Weinhold 00:06:40 If you indeed put a lot of trust in them yourself, just like much of America says that they do. Now, is there a movement afoot to disenfranchise big wealthy business owners or big landlords. I mean, we're talking about these very people that are resented. Well, one way is with rent control, that is capping the amount of rent that landlords can charge. Now, since Covid hit in March of 2020. Apartment rents are up 18% and single family rents are up 25%. Okay. Those are cumulative figures over this four plus year stretch. And that's actually not that much. It's about 5% a year. And now sure, political news has been like galactic big this month with the Trump shooting and the Biden drop out and the Kamala Harris endorsement as a Democratic frontrunner. And we rarely talk politics here for a few reasons. Number one, it's divisive. People lose their minds. Secondly, speculation is cheap. So much of politics is speculating on what might happen in the future. Well, there's one known here.

Keith Weinhold 00:08:01 Whether you like it or not, expect six more months of President Biden. And thirdly, politics is overblown. Its importance is inflated. A president rarely changes your life. But the good news in this is that you can your autonomy, your freedom, your decisions. You can change your life. So to put the politics aside, let's stick to a one issue subject. The white House revealed published what I call a rent control lite plan earlier this month. And to give some credit first, this the same plan it also repurposes publicly and to build more affordable housing. I sent you a link to the whole thing in our newsletter last week. Well, this rent control lite thing has almost zero chance of becoming law. VP Kamala Harris endorsed it on ex. President Trump would kill it even if it's revived under the next president. It has no realistic shot of passing a divided Congress. But let's look at this anyway. What was proposed is that if a property owner increases rent more than 5% annually, it would reduce tax incentives for large landlords.

Keith Weinhold 00:09:23 I'll tell you what large landlords are in a moment. Now, you could still increase rent by more than 5%. It would just reduce the federal tax breaks and it would have lasted for only two years. And the reason the white House put this proposal together for just two years is as a bridge to a time when more homes are expected to be built. I mean, that's the real intent here. And importantly, this all would have only applied to owners of 50 plus units. So that's mostly for apartment owners. Single family rental owners would be largely untouched, but consider how apartment owners could have lost their accelerated depreciation benefit, also known as their cost segregation. And note that I'm already talking about this rent control light proposal in the past tense, not the present tense, because this whole thing, it's just a bunch of virtue signaling to try to show that something is being done to rein in housing inflation. Well, this is really odd and awkward since the inflation came from the government in the first place.

Keith Weinhold 00:10:30 I mean, sheesh, this is like shooting someone in the foot and then trying to get praise for bandaging the victim that you just shot. Well, the federal government, they just don't do rent control on this level at all. They haven't. In fact, the feds haven't regulated rents on private buildings since World War two. So this really isn't a thing, but it just brings to light that rent control is a bad idea. It puts a cap on risk. Time after time after time. History shows us that it makes developers stop building. Now, the white House plan did have a carve out for new builds. Also, what this does is that landlords have no incentive to improve property. That's why it reduces housing supply, which is already low, and it creates long term dilapidated living conditions, like I touched on here just a couple episodes ago. But how weird to even make such an ill advised proposal. I mean, look, if government puts a price cap of $2 on a gallon of milk, then dairies will stop producing milk.

Keith Weinhold 00:11:41 Milk shelves are going to be empty. It's like in communist countries. This is why you saw photos of bread lines. When there are price controls, then manufacturers don't produce. And just the same, landlords would stop providing housing. If I didn't put a fine enough point on this yet. President Obama's top economist, Jason Furman. He probably said it best in the Washington Post. Furman says, quote, rent control has been about as disgraced as any economic policy in the toolkit. The idea that we'd be reviving and expanding it will ultimately make our housing supply problems worse, not better. End quote from President Obama's top economist 94% of economists agreed that rent control reduces quality and quantity of housing available. It is the most effective way to destroy a city. Aside from bombing it, what an ill conceived plan to regulate rents. That's rent control, but the most dangerous drinking game of 2024 that is still sipping at every mention of the interest rate lock in effect on a real estate or economics podcast. Though it's been two plus years since they made their dramatic rise.

Keith Weinhold 00:13:05 Many are still transfixed on mortgage rates. They recently hit a five month low below 7%, and a lot of people still expect mortgage rates to fall between today and next year, since inflation has now plunged from a high of 9.1% two years ago, down to 3% now, the Federal Reserve has held rates steady for more than a year now, and most don't expect any change either when they meet in two days. But be ready. Be prepared when mortgage rates fall substantially. Millions more buyers will qualify to buy a home, and this could substantially stoke housing demand and lift housing prices further. Now last week on the show, you heard gray investment coach narration. I discuss Libre land libre, land libre land. Earlier this month, I visited the exhibit hall at an event called FreedomFest. I saw the library and booth and I recognized their name, and I congratulated the people there in the booth. On that, the fact that I have heard of Liberland before, that's somewhat of a compliment to them. It shows me that they're doing something right, liberal, and is a small piece of land between Serbia and Croatia in Eastern Europe, and it apparently hasn't been claimed by any other nation for decades.

Keith Weinhold 00:14:32 The name Liberland, and I think it's easy to remember because it sounds like liberty. So that's how you pronounce it. Well, I got to talking to some of their representatives at the exhibit hall. They're all smart people, but there was no one person that had all the answers I was looking for. So I requested to speak with the president of Liberland. And about two hours later we made that happen. So today, shortly you will hear Liberland President Vit Jedlicka and I together. Now, the United Nations doesn't yet recognize Libya and all. Ask the president if other nations recognize it. Wikipedia calls liberal and a micro nation. It is seven square kilometers. That's almost three square miles. It's mostly forested. I don't believe there are any mountains there that I can see in the photos. It has Danube river frontage and just a few people there. The Danube river frontage is key because it contains an island that belongs to Leon, and also the Danube is key because it also connects to the Black Sea.

Keith Weinhold 00:15:40 And we'll see if it can be a tax free haven, which is apparently the intent. You might be able to see this working when you compare it to micro nations like Monaco and Liechtenstein. Some journalists have been skeptical about libre land. You'll see how I approach it with the president shortly. He champions laissez faire capitalism. Laissez faire means a minimal government. They're also making the new nation's laws transparent on the blockchain and an economy based on cryptocurrency. As for liberalized population, by March of this year, liberalism had 1200 registered citizens who had paid up to $10,000 for labor and passports, but fewer actually living in the nation now, working on it and building it. Neighbouring Croatia has at times been hostile and blocked off access to libre land. These past few years, you will hear some background noise in President Witte and his upcoming interview. So I ask for your attention and patience there and for all. We are in an exhibit hall at a conference. I'll just call him whit in the interview. And what does his day to day look like? He travels globally a lot, often trying to get into international diplomatic and friendship agreements.

Keith Weinhold 00:17:01 But how do you just adopt statehood out of nothing? That's what's interesting here. Now, when he describes libre land to me, you can't see it here in the audio only. But he often points to Liberty Island, an island on the Danube river that's part of Liberty. And does having a free nation mean that you have the freedom to do whatever you want on your land, or they're soon going to be hos there? I'll ask him that very question, literally. President and I coming up here shortly. First, as for more, I suppose, a familiar land here in the US. You can't make any money from the rental property that you don't own. We are here to help get you started being profitable that way. And it's free. Get some of those. Real estate pays five ways properties. Then we have access to a good number of them here at great a good variety, different property types, different geographies. But at times I'm asked where is the real estate opportunity today in this real estate market, with higher prices, higher rents normalize interest rates, higher operating expenses and low housing supply? Really the opportunity is in affordable housing.

Keith Weinhold 00:18:25 If I could just put two words to it. That's the short answer of affordable housing. Like I often say, provide housing that's clean, safe, affordable and functional in today's market really emphasizes the affordable. That's where the sustainable demand is. Since so many want to be first time homebuyers are priced out of the market currently, it's like a dam that's waiting to break once interest rates go lower compared to a year ago, America has a lower proportion of homeowners and more renters, and the renter numbers just look to keep increasing due to that low affordability. And also this surge of immigrants from the past year or so. That is why you want to own affordable rental housing now. Affordable housing really that can mean a few things in a physical form. That could mean mobile home parks, single family homes, duplexes to fourplex or larger apartment buildings, but in any case, an income producing asset. Do you know what that does for you? That's like an employee that's working for you 24 over seven and without the personality problems, and they never call in sick.

Keith Weinhold 00:19:40 And when you're looking for a property, it's easier to screen properties that it is higher in screen employees. We can help set up an entire real estate investment plan for you with properties like a couple properties. I'll detail for you here shortly. And I also sent you these property details in the second section of last week's newsletter. You also got to see a photo of one of them. And by the way, you can get our wealth building newsletter by texting GR 266866. Just do it right now. What's on your mind for our free? Don't quit your daydream letter. Text GR 266866. And what's been in our newsletter lately? I showed you exactly where I think home prices are going to go by the year 2028. I loved writing about that and researching that for you in the Don't quit Your Daydream letter. Also, in recent letters, you got need to know details about our banks in real trouble now. The Wolf of Airbnb sentenced to prison y new homes will keep getting smaller. Why you can't blame investors for pricier housing.

Keith Weinhold 00:20:54 Why prioritizing property is a huge mistake, and the ten cities where you will regret buying property. And if those stories don't interest you, if getting the first crack at profitable income property does not interest you, then you won't want to subscribe. But if it sounds like those details interest you again, you can get the don't quit your day dream letter by texting gray to 266866 available properties we've had at Gray Marketplace lately that our investment coach can help me with are these two brand new single family homes that make great rentals. The first one is in Prairie Grove, Arkansas. These are the places where the numbers work, and Arkansas has been named the most landlord friendly of all 50 states. It is four bed, two bath purchase price of 288 K and a rent of $2,200. Good numbers for a new build there. It's 1500 and 50ft². The second property, also a new build, is in Pinson, Alabama that's just northeast of Birmingham. And this single family rental is three bed, two bath. The purchase price is 303 K, the rent is $2,000, it's 1400 and eight square feet.

Keith Weinhold 00:22:14 And that rent to price ratio that's not as good as the first one in Arkansas. But of course, Alabama's got those ultra low property tax rates that you get to pay. Yet you can own it and reside in any state or nation. We can help set up an entire real estate investment plan for you, whether it's with properties like these or others, with our investment coaching and it is free for you. Yes, it is just this free as sun, fresh air and hugs. If you think you're ready to buy some real estate pays five ways property. Book a time to chat at Gray marketplace.com/coach to help connect you with a marketplace of income properties. That's grey marketplace.com/coach liberal and president what you'd like and I straight ahead you're listening to get rich education. Hey you can get your mortgage loans at the same place where I get mine at Ridge lending group Nmls 42056. They provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire.

Keith Weinhold 00:23:32 With leverage, you can start your prequalification and chat with President Ridge personally. Start now while it's on your mind at Ridge Lending group.com, that's Ridge Lending group.com. And your bank is getting rich off of you. The national average bank account pays less than 1% on your savings. If your money isn't making 4%, you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk Your cash generates up to an 8% return with compound interest year in and year out. Instead of earning less than 1% sitting in your bank account, the minimum investment is just 25 K. You keep getting paid until you decide you want your money back there. Decade plus track record proves they've always paid their investors 100% in full and on time. And I would know because I'm an investor, to earn 8%. Hundreds of others are text family 266866. Learn more about Freedom Family Investments Liquidity Fund on your journey to financial freedom through passive income. Text family to 66866.

Robert Helms 00:24:54 Everybody it's Robert Elms with the Real Estate Guys radio program.

Robert Helms 00:24:57 So glad you found Keith wine old and get rich education. Don't quit your day dream.

Keith Weinhold 00:25:11 Hey. Welcome back to get rich action. We're talking with someone that's going to explain a different subject to us. We're talking about starting up and the potential new nation. I was the president of that nation called Libre, Leon, I was there. President Witt, welcome in. Good to meet you. It's so good to have you here. And, you know, interestingly, we met at an event called Freedom Fest. So this is potentially so parallel with that as you're looking to develop your own nation now at a place like Freedom Fest, I think we have a lot of people that have a certain set of opinions, and a lot of people at a place like Freedom Fest, where you champion ideals, would probably love to tell you how they would like changes to be made in the United States. But I think if you ask that same person, okay, what if you begin with a clean slate? How would you begin a nation anew, but you're actually trying to do that? So tell us about Libber Land.

Keith Weinhold 00:26:04 It's pretty.

Vit Jedlicka 00:26:05 Exciting to.

Robert Helms 00:26:06 Hear Kennedy.

Vit Jedlicka 00:26:07 The candidate for president, talking about his plans to utilize blockchain to make the country transparent and or functioning. Libra is, I would say, at least 5 to 10 years ahead of any other nation states. And utilizing that, we are combining the best technology that is out there with the best ideas, ideology that is out there, which is, of course, libertarianism, making sure that the society as free as possible within some framework of basic rules. So this is exactly what we're doing. And we were looking for a piece of land to manifest that in physical world. And here we go. It's so liberal and it's a beautiful piece of land between Russia and Serbia that was not claimed by any other country for more than 35 years. We came there, we struggled with like we actually took nine years to even get inside of it properly. And now we're building and living there for more than a year.

Keith Weinhold 00:26:58 So this seven square kilometer plot of land between Croatia and Serbia, that is on the Danube floodplain, you've got frontage on the Danube river, even an island and the Danube river here in this Start-Up nation, if you will, of libre land.

Keith Weinhold 00:27:14 Really, as I've come to understand it, one real goal of liberalism is just to have any nation in the world recognize it as its own sovereign nation.

Vit Jedlicka 00:27:25 We actually got a couple countries to write or sign a regular deals, like with other states. We started with Somaliland, which was at the time unrecognized country. It's fully functional. Interesting story. It's actually former Peace of Somalia, which got independence like 25 years ago. And they're fairly finally prosperous and functioning, even without any recognition by any other country in the world. Now, they got recently recognized by Ethiopia. We followed up with Haiti agreement. We were signing a couple more agreements. Right now, I'm actually heading to one of the African countries to sign some friendship agreement. So it's not that the other countries don't recognize us now. We're working hard on diplomacy. You know, we have diplomatic relations with places like El Salvador, where we were on official diplomatic visits. So, of course, traditional form of recognition is one of our priorities.

Vit Jedlicka 00:28:13 But it's not the number one priority, really. Our number one priority is to finish a very close, a whole model of statehood and utilize the 745,000 people that applied for citizenship, for really real building of the country itself and the nation.

Keith Weinhold 00:28:31 Some recognition is coming slowly, but pulling back a bigger picture. Why do this? Why take this on? Why start your own nation?

Vit Jedlicka 00:28:39 Why not? I think leading by a good example is the best way to do things like talking about liberty. I did a lot of educational work on explaining people why liberty works, but it's much better to do things in the practical terms.

Keith Weinhold 00:28:53 Now, what's interesting is, you know, we've talked about freedom and the ideals of freedom earlier. This freedom mean freedom to do whatever you want.

Vit Jedlicka 00:29:03 You know, within some boundaries, of course, as long as you don't breach other people's freedoms and you have to find the right set up. And but right now, the problem with the current society is that there are so many regulations, you don't even know what you're reaching, and you're usually not reaching anybody's property or anybody.

Vit Jedlicka 00:29:20 It's just a bunch of stupid regulations that make your life tough. You cannot do business. You cannot even help your community. It's funny what kind of stuff we are dealing with in Croatia right now. There is a mosquito calamity in the neighborhood around Libre land and the local municipality don't have money to fix it. And they also don't let us to fix it because you have to have special license for fixing it. So everybody is suffering under the mosquito calamity, which is California.

Keith Weinhold 00:29:47 Okay, so that's an example of overregulation, potentially too many laws. You just brought up one of the limits of freedom, potentially. Well, we don't want people to be able to do anything or therefore they might be.

Vit Jedlicka 00:29:57 Able to hurt or to.

Keith Weinhold 00:29:58 Harm another person, but therefore that would be some sort of of law. And then there would be some need to sort of enforce that. So how does a start up country that wants to be a free nation, you know, how do you meet needs like laws and enforcement and perhaps a judicial process.

Vit Jedlicka 00:30:16 Or do you have a standard framework for the country? There is now a newly elected Congress. It's still a test election, but it has been already elected according to all the principles that the blockchain is bringing full transparency, immutability. It happens within the split of second of the very minimal cost. So all these things are actually already happening, and the Congress will now take all the laws that were prepared by the Preparatory Committee. And only if we have the whole framework of the laws necessary to run a state. I have 250 pages of regulations, very simple framework, which already allows a society to function quite well. And I would like to keep it that way. You know, keep the Constitution at the, let's say, the 20 pages and another 230 pages of different laws that define the the ways that the society should work. And anybody basically allowed to read all the regulations in the country within one day. It's not like here, right in the US.

Keith Weinhold 00:31:10 Yes. But its population grows, is the infrastructure grows, is more complicated, needs must be met.

Keith Weinhold 00:31:16 The size of government invariably and inevitably seems to expand with all existing nations in the world. I think the UN recognizes 193 sovereign nations currently. How do you keep the size of government from expanding over the long term in Libya?

Vit Jedlicka 00:31:32 It's a challenge. Of course, but the way we keep it is the way that there is only one institution that can make new laws, and it's kind of a corporate governance of liberalism. But that governance is in check by three other institutions that can get rid of the laws. The first and most important one is public veto. So majority of citizens can veto any law or regulations that they don't like. Second one is the Constitutional Court. So the Constitutional Court looks into the law if it basically is only focused on security and justice or diplomacy, so that the state shouldn't legislate on other things, really let other things to the private sector. So the Constitutional Court strictly looks if it adheres to that. That's another important institution. Then there is something like House of Lords of liberal minded, who can also veto the laws that the corporate governance the Congress actually creates.

Vit Jedlicka 00:32:23 So one institution to make laws and three institutions to get rid of it.

Keith Weinhold 00:32:28 Else about what's there now, the natural resources, the population and the infrastructure.

Vit Jedlicka 00:32:33 Well, that's the beautiful territory with the island next to liberal land. This is part of liberal land. It's called Liberty Island. It's a long, beautiful sandy beach. Right now, the under construction, there is 24, three houses in this area. So it will be one of the third thing will be the tourism. And we need to be able to host the visitors. We are planning two major music festivals and conferences in the summer, which will take place in August and in September. Of course, you're very well invited. We want to promote the tourism in Berlin, but also in the whole region. The biggest resorts. And it's like that with any country that is prosperous around the world. Be it Hong Kong or Singapore, is not the natural resources. It's the capacity of people to freely make, trade and do business.

Keith Weinhold 00:33:20 You're right.

Keith Weinhold 00:33:20 In fact, a place like yes, Hong Kong or Singapore or even Japan itself have been exemplary of that. A place can be prosperous without having many natural resources. It's truly about the ingenuity of the people we talk about. The people tell us more about the population.

Vit Jedlicka 00:33:35 The population. Right now we've got 800,000 people, almost that sign up for citizenship, which is a huge pipeline. I think the reasonable like ideal population of Liberal would be around 140,000. So we cannot even accept everybody to physically live in liberal land because we would be so overpopulated. Right now we've got some thousand citizens and 6500 residents that basically went through the pipeline, and there is a couple dozens of people living on the territory of liberal lands and working and building stuff. So it's kind of fun to see that initial development. very early into the development. There is still a quite a bit of obstacles to really speed up the development of the brand, mainly installed by Croatia, but we're very happy that after all these years we're able to actually be there physically and develop stuff.

Vit Jedlicka 00:34:23 So we're building a small hospital. There are seven construction workers that take care of it. We're also building the Treehouse resort. There is another ten guys working on that, and that there is a bunch of people that came to settle and they're helping with some stuff for the site. And then there is around 150 people that live around Liberal and that are connected and are supporting the movement. Well.

Keith Weinhold 00:34:44 Now we're a real estate platform. We're going to have both public land and privately.

Vit Jedlicka 00:34:50 Every land is private, in a sense. In labor land. The deal is that right now, people can actually come to the land and claim piece of land if they have enough merit. There is are the the shares of liberal land and can actually not even exchange them if they just have them. They have the right to settle things for fun, which is kind of exciting even though there are all these obstacles. But we're helping people to get over them and get the development of the country going as fast as possible.

Keith Weinhold 00:35:16 Can a person purchase merits or purchase land in labor land right now?

Vit Jedlicka 00:35:21 Anybody that donates to Libre land on the website gets the merits.

Keith Weinhold 00:35:26 Are there going to be things like Hoa's in Libre land? Is that something that you foresee? What is actually homeowners associations where you have neighborhoods and boards in those neighborhoods where you know they need to approve of things like, hey, you can only paint your home for different colors, and you need to mow your grass within every two weeks.

Vit Jedlicka 00:35:46 Well, that surely there will be different types of associations and liberal. We're not going to force one or the other type. This property development here on Liberty Island, the three houses and this area will be kind of association of sort. We want to have 24 people that that invest into the tree house, and they would act as a community. They will help each other, but they will also have the place to visitors. To really make sure that we have a good initial settlement for the permanent population. And I would like every single one of these guys to like some nice story behind how they came to live and then why they're building a house there. We want to make a reality TV show out of it as soon as possible as well.

Keith Weinhold 00:36:28 What about currency? The euro is used in the area. But you mentioned blockchain earlier, and I don't think you plan on using the euro in liberally. Tell us about that. We don't do.

Vit Jedlicka 00:36:38 That. We use liberal and dolar. We use liberal and merit. Those are the main currencies that are tied with our blockchain. And the pound dollar was launched on exchanges three months ago, reading quite nicely, steadily at 2 USD per $1 billion. So this is like also demanded currency by our suppliers.

Keith Weinhold 00:36:56 Is it a cryptocurrency? Yes.

Vit Jedlicka 00:36:58 It's just my own currency of our blockchain. Our blockchain is standalone. It's not depending on any other blockchain. Our citizens are the one ones that securely network and run the network. They run the servers. Every single citizen in Lebanon has the right to run the run the network. That's kind of all we know. We're not really being dependent on any other network like Ethereum or Polkadot. We are simply running our own thing with its own main token. The main token is liberal dollar, but the main political token is liberal and varied, and that also comes with the political voting rights.

Keith Weinhold 00:37:32 Do you foresee there being a future rental property market on libre land?

Vit Jedlicka 00:37:39 Oh, of course, of all these, all these three houses are meant to be for rental for bigger events or team building. So this is something that is happening right now, and I wish we could have at least, you know, 50 bedrooms there by the end of summer.

Keith Weinhold 00:37:54 You know, we talked about how society might work on liberally, and why don't we pull back a bit more and talk about that physical geography, because you chose an area that's basically on the Danube floodplain. So it's probably pretty fertile and it's near some other populated nations. But of course, there are some areas of the world that no one else is claiming. Tell us about how you chose this area over. All the others in the.

Vit Jedlicka 00:38:16 Area was in the most reasonable place, I would say, between the two countries that had war, and they learned to sort out things in a peaceful way. And, you know, Antarctica is also on claim, but you don't want to stay there.

Vit Jedlicka 00:38:27 It's for freezing, right? This particular place is heart shaped. It's seven square kilometers. It was a culturally similar environment to where I was born, so I was considering it as a perfect place to start. And you can fit.

Keith Weinhold 00:38:39 You can get all four seasons in Libre land. What else should one know about Libre land that they come approach you with questions about what do people really want to hear about?

Vit Jedlicka 00:38:50 They of course are interested in the sport. They want to see how what kind of utility does it have? They're a bunch of countries where you can use it to get in and out, which is kind of cool. But the main utility for Americans, for example, is that they use it on crypto exchanges, or they use it with different financial institutions as a second passport. If the US passport is not good for that, it's a great membership club, you know, in the country that is just being born. And and it's a great social gathering. Think about this. 35,000 Americans that sign up for citizenship as well.

Vit Jedlicka 00:39:22 We've got a small consulate in every bigger state, or at least a representative person. The branch, for example, here is representing liberals in Washington, D.C. so we've got a nice network of nice guys all around the place, and then a potential big supportive network with all of these people that sign up for citizenship.

Keith Weinhold 00:39:41 Now, how do you get the word out about libertarians so that people can get interested? Of course, we are an example of this right now, as our audience is learning about liberal land and the pros and cons of this concept of a potential condition. How do others learn about it?

Vit Jedlicka 00:39:55 There were articles written in Liberal, and I believe in more than 40,000 different medias actually, so we were pretty heavily covered in past. I believe more than 1 or 2 billion people learned about it through the media outreach, but the word is also spreading from person to person. Like people like it. They get on board their friends, their families. It's kind of exciting to see that.

Keith Weinhold 00:40:18 What about the language in the culture that you see developing here? Will it feel European just based on its geographic proximity? Is that what you foresee, or does it have more to do with where the inhabitants come from?

Vit Jedlicka 00:40:31 The English, of course, is number one language, but we are also developing liberal English out of all the mistakes that we make in English, that makes the language a little bit difficult to learn and understand.

Keith Weinhold 00:40:41 Americans have to learn English.

Vit Jedlicka 00:40:43 We've got a quite nice culture there, which is, of course mixture of the local Slavic culture with this international make sense nowadays, people, a lot of people from Scandinavia that are moving in. I think we've got a very good German group now coming. There is quite a few Americans that are being involved. It's quite difficult, for example, for Americans to stay liberal. And right now we have to improve our relationship with Croatia because Americans are being banned from actually, for some strange reason.

Keith Weinhold 00:41:15 Okay, still some antagonism with your neighbor Croatia. That's kind of.

Vit Jedlicka 00:41:20 The situation.

Keith Weinhold 00:41:20 In Croatia has created some access problems as well. Tell us about that.

Vit Jedlicka 00:41:25 Well, there's been solved. Last year we when we we we came in to liberalize with more than 60 people at the same time. So they had no means of preventing that access. And since that time actually have free entry in an hour of liberalized. We have a small border crossing there with the with the Croatian police and kind of agreement that we can pass in and out, which is nice.

Keith Weinhold 00:41:46 Try to keep things smooth with Croatia there on the one side of Liberal and here this new Start-Up nation. And we're talking with president Vit here of Liberal. And are there any last things that people need to know about liberalism before I ask how they can go to your website and learn more? Are there any just other last things I think we should know?

Vit Jedlicka 00:42:05 It's a great opportunity to visit now with these two festivals. Those are nice social gatherings. It's the floating metal festival in August. That's the way.

Keith Weinhold 00:42:14 Man. Like the Burning Man.

Vit Jedlicka 00:42:15 Yeah, about the float. That's floating, man. Because we're on Danube. And then there is the Liverpool Echo, which is a major international festival that has moved on this year, which is based on an article, a famous Mexican festival that will be a probably the biggest cultural event this year.

Keith Weinhold 00:42:33 Well, literally. And be a success if it is a net exporter rather than a net importer, because it's difficult to have sectors for everything from industry to agriculture in Beyblade.

Vit Jedlicka 00:42:46 Well, our biggest export is freedom. Ideas like it's like Chile spreading like wildfire. think about it. Like for two months we had the biggest immigration in the world. We go to the United States, where there was more people applying for citizenship of liberal. And then there were applicants for green cards in the United States. The idea itself, it's something that the time has come. There is amazing interest in building new countries, building free countries. And right now I can see that we are on the right track when people like Canada are pushing for transparency through blockchain, because we know what they are talking about. We have already done it and we are applying it in the real world.

Keith Weinhold 00:43:24 Well, it's an interesting experiment in this way. You, the listener of the viewer, you can follow it as an experiment, as an example of what to not do or what to do as live land develops. Why don't you let our audience know how they can learn more about it?

Vit Jedlicka 00:43:42 Fairly easy to apply for citizenship.

Vit Jedlicka 00:43:44 You can first become your resident and then come and help some different means. Or you just directly go for the citizenship. It's an investment of $10,000 or donation of $10,000. And you become a member of of our community with the passport and with the right contacts to the right people. That will really help you to get the best out of the community.

Keith Weinhold 00:44:04 Well, I don't have a great chat with a national president every day, but I sure did today. Thanks so much for your time. It's been interesting learning about liberalism. Thank you very much.

Vit Jedlicka 00:44:15 Made me think UK and I hope to see you a liberal one.

Keith Weinhold 00:44:17 Maybe you will. It sounds like a donation of ten K gets you a liberal and passport. Like I said earlier, as of March 1200 people had paid up to that amount for the passport. Music festivals and conferences in Libya. In the next few months, that could be a way to check it out. Now, it's certainly something I'd need to know more about before I could either endorse it or reject it.

Keith Weinhold 00:44:48 Citizenship in Libya planned to get more of the skeptic side. The criticism I would visit the Libyan Wikipedia page and get ready for some dismissal of its diplomatic recognition there. Then you can visit Libre Land Oregon, learn more about citizenship status, the passport actually helping with the construction of the territory and earning libre land merits, which is a cryptocurrency. If you find it interesting, it's a matter for you to do some deep due diligence on next week. The King of Commercial Real Estate will be here with us. Until then, host Keith Wendell. Don't quit your day, Adrian.

Speaker 6 00:45:31 Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial, or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of yet Rich education LLC exclusively.

Keith Weinhold 00:45:59 The preceding program was brought to you by your home for wealth building. Get rich education.com.

Direct download: GREepisode512_.mp3
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Mon, 22 July 2024

Coming to you from FreedomFest in Las Vegas, I talk with Founder Mark Skousen. He’s been named one of the World’s Top 20 Living Economists.

Also, an event summary with GRE Investment Coach, Naresh.

Learn about the deleterious consequences of rent control. President Joe Biden supports it (somewhat).

If four tenants live in identical fourplex units, it actually makes sense for them to pay different rent amounts. I explain.

We can construct more housing by relaxing zoning requirements in the right way—reduce off-street parking requirements, increase ADUs, no rent control, reduce minimum lawn sizes.

There’s higher homelessness in L.A., San Francisco, and Austin than Houston. Houston has a lower-cost market, few zoning requirements, and less NIMBY mindset.

Politicians run on platforms like immigration, abortion, and inflation. But they don’t run on reducing the debt because they don’t see it as a problem that they created.

At FreedomFest, I attended a presidential debate between the current candidates of the Libertarian Party, Green Party, and Constitution Party. Most or all agreed that the Fed should be abolished.

The common theme at FreedomFest was: “Government, get out of the way.”

Resources mentioned:

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Complete episode transcript:

Keith Weinhold** ((00:00:01)) - - Welcome to GRE. I'm Keith Weinhold. I'm here at the world's largest gathering of free minds. It's a conference called Freedom Fest where I talk to the conference founder. He's been named one of the top 20 living economists in the world today, as well as a talk with one of our great investment coaches to learn what my conference takeaways are and more. Freedom, life, liberty and the pursuit of real estate and investing today. And get rich education.

Robert Syslo** ((00:00:36)) - - Since 2014, the powerful get Rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate, investing in the best markets without losing your time being a flipper or landlord. Show host Keith Weinhold writes for both Forbes and Rich Dad Advisors advisors and delivers a new show every week. Since 2014, there's been millions of listeners downloads and 188 world nations. He has A-list show guests include top selling personal finance author Robert Kiyosaki. Get Rich education can be heard on every podcast platform, plus has had its own dedicated Apple and Android listener.

Robert Syslo** ((00:01:10)) - - Phone apps build wealth on the go with the get Rich education podcast. Sign up now for the get Rich education podcast or visit get Rich education.com.

Corey Coates** ((00:01:21)) - - You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.

Keith Weinhold** ((00:01:37)) - - We're gonna go from Oswego, New York to Lake Oswego, Oregon, and across 188 nations worldwide. I'm Keith, while you are inside, get rich education. I'm attending a free office live and in person in Las Vegas today. One key economic freedom and what makes a free market free is that ability for producers and suppliers and landlords to set prices based on what the market will bear, whether that's a high price or a low price. Now, what's wrong with rent control, which is a law that puts a ceiling on the amount of rent that you're allowed to charge? Well, that sounds like a nice thing to do for one set of people in the short term. Well, rent control has the same effect as price controls on consumer goods.

Keith Weinhold** ((00:02:30)) - - If the government thinks that cars are becoming too expensive, and they set up a new law that says that you can't charge more than $20,000 if you want to sell a new car, well, then those manufacturers will stop producing cars and soon enough, you, the consumer, cannot buy a car. You'd no longer have an automobile market at all. And the consumer suffers under no choice and even austerity. Put price controls on beef jerky and companies will stop making beef jerky. Put price controls on rent called rent control, and landlords have zero incentive to provide property, no motivation to improve property. And there is a raft just reams of evidence and studies out there that show that rent control, that is a surefire way to then reduce the supply of functional housing, just like the supply of cars or beef jerky would get cut. That's especially not a good solution in today's real estate supply constrained world. And, you know, here's what's interesting. The government created the inflation in the first place. That led to the high price problem that they think they can cure through rent control.

Keith Weinhold** ((00:03:52)) - - I mean, government keeps trying to solve a problem that they created. Well, just take a new course, a new direction and stop the inflation. In that way, you'll cure the higher prices long term and then near term. What you can do is relax zoning requirements in order to create more housing. I mean, in three cases here, less government cures the problems, no inflation, no rent control, and thirdly, no stringent zoning. Knock down all three of those walls and instead, now what have you done? You've encouraged a bunch of builders to come into a market. You've encouraged competition. And what does competition do? It increases quality and it yeah, lowers prices. So cure the problem by knocking down the walls. You know, you as a landlord, I don't even think that there should be laws that say that you have got to charge every ten at the same rent amount. Yeah, and that is even if each one of your tenants has seemingly an identical unit, say, in a fourplex building.

Keith Weinhold** ((00:05:04)) - - Now I'm on different fourplex buildings and I have most everyone like throughout history, I've had just about every tenant paid different rent amounts in the same building, even though all of the units were built at the same time and had the same square footage. Now a real estate investing newcomer, you know, they might think that that sounds unfair, that these tenants with basically identical units paying different rent amounts. But we all know how it works in practice, in real life. I mean, one of those four tenants might have the front unit with the best views, while the tenant with the best view. Well, of course they're going to be willing to pay more for that unit. Well, that right there, that's free market supply and demand. The fourplex unit with the best view will rent out faster and for more. But instead of that arrangement, if it's mandated, say, by the government that everyone in the building must pay the same rent, say that each of the four units must pay exactly $2,000.

Keith Weinhold** ((00:06:07)) - - Oh, well, then the tenant with the worst view, which then has less benefit to living there, has to subsidize the tenant with the best view that already has the best benefit of living there, because they must all pay exactly $2,000. And then what about things like several months from now? Say you have a vacancy at Christmas. Well, it's hard to get a tenant to move at Christmas to get them in there. So you'll charge a low rent just to get someone in there then. Versus how you charge more now in summertime, because tenants demand units, a lot of them want to get settled in during the summer before the school year starts. What about a tenants living in your fourplex or rental single family home for five years, and their unit hasn't been painted or renovated in a while, and the tenant has seen you already. Well, they're probably going to pay less then a new tenant will in there say freshly painted unit. So my point is that even making every tenant of one individual fourplex building have to pay the same rent amount.

Keith Weinhold** ((00:07:10)) - - Well, that is a form of rent control and that is actually unfair if they all have to pay the same rent amount. The free market is what's fair and enables a system of rent price discovery, instead of being confined and oppressed under rent control. Now here, the Freedom Fest in Las Vegas and we'll discuss the conference more. Today I attended one panel discussion. It was called How the Government Created the Housing Crisis and what we can do to Fix it, And it really gave specific solutions to provide more housing. This includes things like stop mandating a minimum square area for parking spaces. Stop mandating such large lawns. Instead, people can share a public park and relax the requirements that have so many easements out of property. Well, all that stuff is zoning in its stifles development and it leads to higher housing prices. Now, I maintain that not all zoning is bad. I don't think that you want a housing development surrounded by factories with smokestacks. So it's about relaxing zoning in the right way and promoting the right policies, like the benefits of a yimby movement.

Keith Weinhold** ((00:08:27)) - - Yes, in my backyard. Removing off street parking mandates altogether and allowing more ADUs allow Single-Family homes on smaller lot sizes. And we've already seen some of that. We're seeing home builders do more of that. They're building single family homes closer together, smaller lot sizes. But a lot of the wrong strategies exist out there. And once people get the benefits, like the beneficiaries of these wrong strategies, I mean, they don't want to give them up. Like New York's rent stabilization program that gives rent breaks to wealthy New Yorkers that also have a pricey home out in the Hamptons. Well, that's not the right policy. That's not helping the people that need it most. And you know, when the wrong policies infiltrate a market, the reaction can be amazingly rapid. I mean, how rapid? Like, do you think you would see a construction project literally halt mid construction? Yeah. You actually can like construction cranes just stop swinging. In Saint Paul, Minnesota, you saw construction cranes stop mid-air mid construction.

Keith Weinhold** ((00:09:38)) - - When Saint Paul moved toward a rent control of no more than 3% annual rent increases. Well, that's a form of rent control. When that happens, building stops because the developer knows that people don't want to buy those units or invest in those units or rent those units. And I've got more to discuss on housing shortly, but let's bring in the very founder, host and producer of Freedom Fest here. He has been named as one of the top 20 living economists in the world. Doctor Mark Skosan and you will hear some background noise in these conference interviews. We are at a conference at times. We're in the exhibit hall now. Interestingly, here with Mark, I bring up with him how much I dislike these political labels that just divide the nation. I mean, don't you agree that it would be great if the nation were less divided? Yes, we all would. Well, we can do our part by avoiding saying words like red and blue and oh, you know, I can't stand those maps.

Keith Weinhold** ((00:10:44)) - - Then you see, I've mentioned this to you before. You see these maps in political season that show where the red states are and where the blue states are. I mean, how divisive and polarizing that is not unifying in the United States of America. The fact that this conference has a non divisive founder like Mark Skosan is what attracted me here. Sure enough, here you'll hear me tell him how much I appreciate this. This was prescient because the very next day after this interview that you're about to hear, that was the assassination attempt on former President Donald Trump. Hey, it's Keith Reinhold here. I'm at Freedom Fest with Freedom Fest host and founder Mark Scott. And thanks for having us here. Yeah. My pleasure, my pleasure. Thank you for coming. Well, I've got to tell you one reason that attracted me to this conference. I was concerned that it was going to be too politically partisan. And I respect you so much, because I know you have said that in most of all the books you've read, you've avoided these labels like liberal, conservative, left, right, red, blue, yes, progressive, conservative and all that.

Keith Weinhold** ((00:11:58)) - - So that's what I'd like hearing when we talk about this conference championing principles of freedom and liberty. What does an American really need to know about freedom and liberty that's under attack today?

Mark Skousen** ((00:12:09)) - - I think what we've tried to preach is the Adam Smith model, which you call the system of natural liberty. And what that meant was under the rule of law and justice and a robust competitive model. You've maximized the freedom of choice, freedom to choose your own work, your own business, how much salary you're going to charge or wages you're going to pay, whether you can hire or fire people. So within those rules, within those guidelines, you have maximum security. But in today's world, more and more everything, it's either being prohibited or mandated. So we're being squeezed from both sides. The idea of freedom of best to maximize freedom is for us to come together and find out what are the best solutions to improve our lives is the idea. So we talk philosophy, history, science and technology, healthy living, economics, politics.

Mark Skousen** ((00:13:05)) - - It's all part of the program here. But it's not just a political conference.

Keith Weinhold** ((00:13:08)) - - Part of this is lowering the guardrails and promoting free markets. The only thing that we've all seen happen in free markets is inflation, oftentimes ironically, created by some of those forces that put guardrails in place. So what does an investor there are a lot of investors here. Oh yeah. What does an investor need to know with regard to inflation today. How can the everyday person respond.

Mark Skousen** ((00:13:33)) - - So one thing is we have a whole section on financial freedom because without financial freedom you're limited in what you can do and your influence that you can have. So this is very important. We live in an era of permanent inflation. Since World War two we've had permanent inflation. We didn't used to, but now we do because we're off the gold standard. We've adopted Keynesian economics, which means deficit spending all the time. We have adopted the dollar rather than gold. So we've lost that discipline. The fed is the engine of inflation. And they even have a policy of a minimum of at least 2% inflation rate.

Mark Skousen** ((00:14:10)) - - We had a whole session. Actually Steve Forbes wasn't there, but Nathan Lewis is co-author of in the book inflation. We had a big session on what are the best inflation hedges. So we talk about gold and silver. The stock market, Bitcoin rallies, high bonds, real estate. We had all of those discussion. And that was the great thing about Freedom Fest is that you really do get answers and best solutions. At our conference, I attended that particular. Oh you did? Yeah.

Keith Weinhold** ((00:14:38)) - - From Freedom Fest.

Mark Skousen** ((00:14:39)) - - I've really.

Keith Weinhold** ((00:14:40)) - - Enjoyed this.

Mark Skousen** ((00:14:41)) - - So far. We have an exhibit hall.

Keith Weinhold** ((00:14:42)) - - Which happens to be right. Oh yeah, we have breakout sessions that attendees can go to for the sessions that particularly interest. There are then a big general session where I've enjoyed presentations from Robert Kiyosaki to Ice-T. What is the future potential for getting Fest attendees? What would you like to tell them about what this conference entails? What they can.

Mark Skousen** ((00:15:03)) - - Expect in the.

Keith Weinhold** ((00:15:03)) - - Bank that they can.

Mark Skousen** ((00:15:04)) - - Get? Well, one of the things is just the wonderful camaraderie that you feel, the buzz that you feel the meeting of like minded people who are all trying to seek best solutions rather than labels and attacking people.

Mark Skousen** ((00:15:18)) - - And, we have the presidential debate here, for example. Well, we have all the third parties come together libertarians, the Constitution Party, the Green Party. We have RFK coming. The two major parties decided not to come. So, so much for their belief in democracy. But the idea is there's a there's something for everybody here. You want to improve your lifestyle, you want to prove your financial situation. You want to have better clarity on what is the proper role of government. Read about this A conference for you. This is an annual event that we usually have in the summer in Las Vegas and then other cities, and it's only 3 or 4. You know, we live busy lives, so can we come together once a year to learn to network, to socialize and celebrate liberty? I think we can if we plan ahead. When we.

Keith Weinhold** ((00:16:06)) - - Drop these labels, we can get a clear download of sorts, remove filters.

Mark Skousen** ((00:16:11)) - - And think.

Keith Weinhold** ((00:16:12)) - - Clearly. And this is a largest gathering.

Mark Skousen** ((00:16:15)) - - Of.

Keith Weinhold** ((00:16:15)) - - Free minds. So for Mark Skelton I'm Keith Weigel. You heard Mark Skelton mentioned the presidential debate at Freedom Fest. I watched quite a bit of that. More on it later. Gray Investment coach narration is here in person with me at Freedom Fest. Coming up, he and I give you a download of some policy and real estate investing highlights that you can learn from. That's straight ahead. I'm Keith Reinhold, you're listening to get Rich education. Hey, you can get your mortgage loans at the same place where I get mine at Ridge Lending Group Nmls 42056. They provided our listeners with more loans than any provider in the entire nation because they specialize in income properties, they help you build a long term plan for growing your real estate empire with leverage. You can start your prequalification and chat with President Ridge personally. Start now while it's on your mind at Ridge Lending Group. Com that's Ridge Lending group.com. And Your bank is getting rich off of you. The national average bank account pays less than 1% on your savings.

Keith Weinhold** ((00:17:28)) - - If your money isn't making 4%, you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk. Your cash generates up to an 8% return with compound interest year in and year out, instead of earning less than 1% sitting in your bank account, the minimum investment is just 25 K. You keep getting paid until you decide you want your money back there. Decade plus track record proves they've always paid their investors 100% in full and on time. And I would know, because I'm an investor, to earn 8%. Hundreds of others are. Text. Family to 66866. Learn more about Freedom Family Investments Liquidity Fund on your journey to financial freedom through passive income. Text family to 66866.

T. Harv Eker** ((00:18:23)) - - This is the millionaire mind trick. You're listening to the powerful get Rich education with Keith Weingarten.

Speaker UU** ((00:18:29)) - - Don't quit your day dream.

Keith Weinhold** ((00:18:39)) - - Hey, we're here talking about Freedom Fest, and I'm doing that alongside gray investment coach. The race. Hey, welcome in the race. Hey, Keith.

Keith Weinhold** ((00:18:47)) - - We are here in real life at Freedom Fest in Las Vegas, Nevada. And what Freedom Fest does is it promotes and champions the ideals of freedom in the United States, and it includes a bunch of guest speakers that have made appearances here that you got to see in person, from Ice-T to Robert Kiyosaki to a bunch of presidential candidates as well, sometimes not championing principles of things like freedom and tolerance and liberty and tyranny. And I think anyone can agree to freedom on a this basis. But when you think it through and where the discussion really begins is, oh, well, if you have freedom, does that mean you should be free to do anything at all that you want? Probably not. And that's quite a discussion or tolerance. That's an ideal. That sounds good, but oh does that mean you should tolerate absolutely anything? No probably not. So that's where a lot of the interesting policy decisions and a lot of the interesting debates come in here in the race. And I attended some of these presentations together and other ones separately.

Keith Weinhold** ((00:19:53)) - - So we have some different perspectives on what we've learned here at Freedom Fest. Grace, why don't you tell us about some of the good takeaways that you had? I had a lot of good takeaways, Keith.

Mark Skousen** ((00:20:03)) - - This is not just about freedom in the United States. It's about freedom around the world. And you even interviewed and I believe we're playing that interview soon. If you haven't already played it yet, you interviewed probably the freest nation in the world. It's a brand new nation and it's called liberalism, like liberty, land libre land in Europe. And it touts itself as the freest nation in the world. So there have been all sorts of topics happening or talked about from business, finance, economics, real estate, crypto, bitcoin, gold to non-business and financial topics, which I actually found more interesting simply because.

Keith Weinhold** ((00:20:46)) - - Most of what I listen to and what.

Mark Skousen** ((00:20:48)) - - Is business finance econ. I wanted something a little bit different, especially as a father of two young boys. There were topics on gender and sexuality.

Keith Weinhold** ((00:21:01)) - - And.

Mark Skousen** ((00:21:02)) - - Vaccinations being the vaccinated versus unvaccinated. Robert F Kennedy was the keynote speaker at this conference, and he's a major presidential candidate.

Keith Weinhold** ((00:21:12)) - - RL Jr RFK.

Mark Skousen** ((00:21:14)) - - Jr. Even though he's not part of a major party, he's probably the most popular third party candidate over the last 30 years, so he's a candidate. There were lectures on healthcare.

Keith Weinhold** ((00:21:28)) - - And.

Mark Skousen** ((00:21:29)) - - How to be a better patient. And hold your doctor and hold the healthcare system accountable. The other aspect of this conference is there are some heavy hitters just walking around freely. Like I met Matt Ridley easily, I met Robert Kiyosaki, just he was dressed in very casual clothing to where people didn't even recognize them. And I did and told him how much I appreciated him. You know, you and the great podcast and huge inspiration for me. Yeah, people like Kiyosaki walking around freely, presidential candidates walking around freely, many third party candidates, not just RFK. He wasn't walking around as freely. He was in and out pretty quickly with really heavy security.

Mark Skousen** ((00:22:09)) - - But you had other third party candidates, like the Libertarian Party candidate and the Green Party candidate walking around freely. I ran into Vivek Ramaswamy, his campaign manager, while getting pizza. We are both standing in line getting pizza. We ended up having about almost a two hour lunch. One day talking finance business Vivek's policies his future. So overall this conference very educational, inside the classroom, very beneficial outside the classroom. We're going to bring some guests on the great podcast. We met at this conference, publicists who we met at this conference who represent good guests, some business development opportunities, maybe some not just good guests, but people who we would recommend their newsletters, maybe even outside of the real estate industry, people, contacts within the real estate industry. So it's not all about what you learn in the classroom. It's also about who you meet, the networking, the business development. Overall, just a really, really successful experience. There were a few.

Keith Weinhold** ((00:23:11)) - - Shows that snagged me as a guest while here as well.

Keith Weinhold** ((00:23:15)) - - I'm talking about American freedom here chiefly. But you did mention Lebanon, a startup nation between Croatia and Serbia. That's seven square kilometers in area. You know, I think there are a lot of people at a conference like this and just anywhere in society where if you ask them, well, hey, if you think you could run the nation better if you were starting it all over again, how would you start a nation from a clean slate and actually got an opportunity to do that? Well, I'll be interviewing the president of Lebanon here, where this country is trying to seek recognition from any nation. They want to start their own country, and they want to do freedom and really begin a country of their rights.

Mark Skousen** ((00:23:55)) - - And see is, is is.

Keith Weinhold** ((00:23:57)) - - Is is.

Mark Skousen** ((00:23:57)) - - Bitcoin I think not just crypto but it's bitcoin. And it's interesting because you hear a lot of times you don't like the country that you live in, go somewhere else. These people took it to a whole new level and said, well, we're just going to start our own country.

Mark Skousen** ((00:24:10)) - - And and it's about three square miles. So it's about the size of the area that I lived in. Tampa, not even Tampa, just almost the neighborhood that I live in, Tampa. So it's not a huge country, but it's interesting talking to them. And as you'll hear in the interview, hearing about what it's like to start a new country and there's a lot that you have to go, you know, there's a lot of fundraising if you want to call it that, that you have to do. It's it's a lot it's bigger than the business.

Keith Weinhold** ((00:24:37)) - - You'll learn more about that on an upcoming episode of the show with the nation of Berlin. I attended a presentation called A Forgotten Solution to the Housing Crunch. Most people think of real estate development is either single family homes or multifamily properties. This espoused the building of light touch density of 2 to 4 unit properties, and how that increases the density. But it maintains character. And they showed an awful lot of photos in the presentation where from a street, a four unit building can actually like a single family home when it has the right design and therefore you don't get this NIMBYism pushback.

Keith Weinhold** ((00:25:16)) - - I saw a number of smart design examples of that. And you know what this does? Will this help keep the cost of housing down in an area? What it allows for in a society is it allows the children who grew up in an area to afford the housing there without being priced out. Also called this multifamily missing middle 2 to 4 unit housing. You don't have the NIMBYism pushback that you do with multifamily housing. There are an awful lot of opinions here about people that want to avoid rent control, about how that's typically the bad policy. And many likened rent control to bombing American cities over time because landlords don't have an incentive to improve anything. So rent control is not a good solution to increasing the housing supply. And a lot of the discussion was how you get politicians to say no to rent control, sharing with them. Cato Institute studies on how the free market really makes for a higher housing supply, because that makes developers want to come into the market. And it was noted in one of the panel discussions about rent control and about providing more affordable housing.

Keith Weinhold** ((00:26:27)) - - But if there's a four unit building of owners of all four units of that building, how that's deemed as less threatening than if there's a four unit building of renters.

Mark Skousen** ((00:26:38)) - - So question for you, the housing panels that you attended were these people, were they private investors or they worked for private equity companies? I think maybe a documentary filmmaker who does real estate documentary, what was their background?

Keith Weinhold** ((00:26:50)) - - Think tanks and yes, a documentary filmmaker of a film called Shabbat Vacation. And I did not get to see the film about the perils and ills of rent control on Shabbat vacation. But I talked with one of the people that worked on the project and basically that movie. It does glorify the landlord that was brought up. And typically in popular culture, you don't glorify the landlord. I mean, the landlord is kind of the beleaguered party in this, and it was critical of rent control there. And so it's helping to spread an awareness of how that really doesn't help the housing supply. Quantity work quality over time. I attended another presentation.

Keith Weinhold** ((00:27:33)) - - It was called Homelessness California versus Texas and Homelessness. Of course, it's a multifaceted problem. There are a number of reasons that it occurs, but they really brought up that it often results from the loss of family connection a lot more often than what some people think. And it really brought to light that Houston has a lower proportion of homelessness in L.A. and San Francisco does. What are the reason this that that is the case. And that is because Houston has a lower proportion of homelessness, because it's a lower cost to build there, and Houston has way fewer zoning requirements, you see, almost like a hodgepodge of building across Houston. You have substantially less NIMBYism in Houston. You just have a culture there that doesn't push back on buildings. So those are really some of the key parallels between why the homelessness crisis is worse in California than it is in Texas. In most places, Austin actually has policies that are so agricultural to the rest of Texas, giving Austin a somewhat higher homelessness rate.

Mark Skousen** ((00:28:38)) - - Wow, that's a lot of real estate content that you got there.

Mark Skousen** ((00:28:42)) - - Anything else? Keith?

Keith Weinhold** ((00:28:44)) - - Another presentation I attended was called Permanent Rising Prices. What are the best inflation hedges? And, you know, for a while they didn't even put real estate up there as one of them. And I was almost foaming at the mouth getting ready to ask a question. But they did bring in real estate at the end. When it comes to inflation. Many of them brought up the fact that we have multi-trillion dollar deficits even when we're in good times. I had never thought of it that way before. If most people would look at the history of the world and what's happening with the nation while they're running multi-trillion dollar deficits, they probably think that they're trending toward poverty and austerity. But that's not the case. This is what's happening in good times. And politicians, they really don't run on a platform of reducing our debt. You notice that none of the politicians do that. Instead, you see politicians run on platforms like immigration or the housing shortage or abortion. But, you know, politicians, they don't run on a platform of reducing our debt.

Keith Weinhold** ((00:29:42)) - - And that's because they all see it as a problem that they didn't create, and they don't really want to work their way out of it either. So that's why it doesn't come up. Also, with the best inflation hedges, they showed the rank of asset performance for the last 200 years of five items stocks, bonds, treasury bills, gold and the dollar. And really it was coming down to two guys debating on whether stocks or gold were better. They both made their case either way. And they didn't bring in real estate until the end. But when they brought in real estate, they broad brushstroke and do what so many do, and they just looked at it as an asset class in what is its capital appreciation over time. Yeah. And you know, they didn't separate out income property as its own class like we would. But some of the panelists, they did not like real estate. They talked about how it's not liquid, about how you have to borrow funds, about how there's a maintenance burden and a repair burden with real estate, and you have tenants and management and some things like that.

Mark Skousen** ((00:30:40)) - - Fair, all fair.

Keith Weinhold** ((00:30:41)) - - All fair points. And one panelist brought up that gold has outperformed the gold mining stocks just historically over time. So those are some of the inflation hedges and some of the other issues with inflation that you don't think about very much as you have policy advocates and politicians addressing.

Mark Skousen** ((00:30:57)) - - Well, I'll say gold mining stocks and most traders will tell you traders by gold mining stocks, not investors. So gold mining stocks are meant to be held over the short term. They are not meant to be held over a long period of time like physical tangible gold is. So for people to say, oh yeah, gold outperforms gold stocks over a 30 year period. That's true. But most people are buying gold stocks Like gold mining, stocks are only holding over a short period of time.

Keith Weinhold** ((00:31:29)) - - Well, housing and inflation were such widespread themes here since it has been such a problem, much of it wrought by the pandemic. As we wind down here summarizing what we've experienced at our first Freedom Fest, for each of us, have any last thoughts with respect to housing and inflation since they were such overarching themes?

Mark Skousen** ((00:31:49)) - - Well, the common theme here at Freedom Fest was government got out of the way because if you let the free market work itself out, if you let people be, people work themselves out.

Mark Skousen** ((00:32:01)) - - But the onus on people to take personal responsibility, that in and of itself solves the inflation problem because you don't have government restrictions, government mandates, and And this was a major topic and that was the lockdowns of 2020. The mandatory vaccine mandates of 2021, those were all inflationary because when you have people fired from their jobs or dropping out, quitting their jobs because they didn't want to take this job, that means prices are higher and lower. Workforce means you have to pay the whoever is there higher wages. And that's what ended up happening. So it's not just about dollars and cents. It's something as simple as getting a job caused inflation. And ultimately when inflation goes up, of course that's going to affect rents, that's going to affect housing. There was a major savings rate, which I'm sure you covered in 2020, where people were saving money, being locked down at home. And once things started opening up, that money was spent and that created inflation. And people, as soon as they could get out of their house said, hey, I want to move to Florida, or I want to move to Texas or Utah or where we are here in Nevada.

Mark Skousen** ((00:33:10)) - - And that's why housing values exploded. So the inflation was caused by government. It wasn't just the government spending. It was actual psychological and physical things that the government or the policies of the government did that created an inflation. The government spending, the low Federal Reserve interest rates are just a piece of the pie, or they're just a couple of pieces to the pie. And so it was interesting to learn that all these other areas, all these other, like I said, policies that the government enacted. And that's what Robert F Kennedy Jr, RFK, talked about in his keynote speech. All of these policies affected the purchasing power of our dollar.

Keith Weinhold** ((00:33:53)) - - We have all had more dollars chasing fewer goods and services, one of those being housing itself. Hey, it's been great to meet up here in real life at Freedom Fest this year in a race. I appreciate you sharing your thoughts. Thank you Keith. I'm great. Yeah. Narration I enjoying freedom Fest here. Oh, there's such a wide variety of vendors and viewpoints all around this concept of free thinking, typically with getting government out of the way.

Keith Weinhold** ((00:34:29)) - - In fact, in the exhibit hall, which is right across from where the speaker discussions are, there are booths for gold, real estate, cryptocurrency stocks, a dating app for unvaccinated people, self-directed IRAs, a program for teaching capitalism to school children. There is even a book that espouses biblical capitalist virtues. And then elsewhere in the exhibit hall, atheist virtues. There was also a promoter of a currency called the Nevada Gold Back, and what it is is 1/1000 of an ounce of 24 karat gold. And it is physical like gold back. It looks sort of like a dollar bill, just much, much more in the exhibit hall. Now, one concept that I did not hear any criticism about was Trump tariffs. Tariffs are not free market. In fact, it's akin to erecting a trade wall. And maybe there is a session about it. But there are many sessions going on concurrently and I can't attend them all. And in other sessions I was asked to be a speaker and was interviewed. Like you heard.

Keith Weinhold** ((00:35:45)) - - Doctor Scholes had mentioned there was a presidential debate here. Now the two major party candidates didn't attend. I watched RFK Jr speak here, an independent candidate, and he was not in the presidential debate, though he spoke separately in the security for RFK Jr was formidable, even though he spoke the day before the Trump shooting. The presidential debate was among three different parties. It was Jill Stein at the Green Party, Randall Terry of the Constitution Party, and Libertarian Party candidate Chase Oliver, who is a particularly bright, articulate guy, and most or all of those candidates, they agree that we should end the Federal Reserve. And the presidential debate, interestingly, was moderated by Congressman Thomas Massie, who has more formally proposed ending the fed outside of the presidential debate. I also attended a different session. It was a Bitcoin debate called Will the Bitcoin bubble ever burst? And you had two guys promoting and talking about the virtues of Bitcoin. And then you had two guys criticizing Bitcoin. And one of the two bitcoin critics was Whole Foods founder John Mackey.

Keith Weinhold** ((00:36:58)) - - So this really got interesting. Now I like a lot of the benefits of Bitcoin personally, but I must say in this particular debate the Bitcoin critics decide that Maggie was on. Oh they won this. The proponents best points were the people back in the day said electricity in the internet word feasible. They weren't going to last, but electricity and the internet won and Bitcoin will to the pro camp also espouses that Bitcoin is the first time we've had absolute digital scarcity. You cannot copy and paste bitcoin, but yeah, the critics did a better job. They said that Bitcoin is always made future promises, but it falls short like its awful acceptance rate as a currency. Still today its price levels are dreadfully volatile, just miserably volatile. You can't count on it then as a store of value. John Mackey said that Bitcoin produces no goods, no services and no cash flow. The Bitcoin critics also asked more than once this question how has Bitcoin made anyone's life simpler, easier or better? There really weren't any good answers to that question, and they even critiqued that with its fixed supply at 21 million will, then it cannot grow with the economy.

Keith Weinhold** ((00:38:21)) - - And then what this can do is create deflation and depression. And I would like to adhere myself that each Bitcoin is already divided into 100 million tiny pieces called satoshis. And it might be able to be divided smaller than that eventually. But yeah, the Bitcoin critics won. It is quite a win for bitcoin, in my opinion, that this nascent digital asset that was only worth a few pennies 15 years ago when it came out, I mean, it was something that only cryptographers and digital geeks understood. Well, today you've got presidents discussing bitcoin. So it's certainly had some success just in branding and name recognition alone. That is just about a wrap from Freedom Fest this year here in Las Vegas, there were record breaking temperatures outside in the Mojave Desert in the middle of summer. Inside, it was a celebration of ideals like life, liberty, prosperity, and of course, freedom. Until next week, I'm your host, Keith Wendel. Don't quit your day, dream.

Speaker 6** ((00:39:35)) - - Nothing on this show should be considered specific, personal or professional advice.

Speaker 6** ((00:39:39)) - - Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss the host is operating on behalf of yet Rich education LLC exclusively.

Keith Weinhold** ((00:40:03)) - - The preceding program was brought to you by your home for wealth building. Get rich education.com.

Direct download: GREepisode511_.mp3
Category:general -- posted at: 4:00am EST

Mon, 15 July 2024

Learn how garages and parking areas add value to property. Find out how to earn more rent for your garage space.

Adding a garage to a rental doesn’t fetch much more rent income. But you will rent your place faster and tenants stay longer.

To get more rent for a detached garage, rent it to an off-site tenant.

The future of parking and garages is positioned to be shaken by autonomous cars. Fewer people will need to own or park cars.

Meet me in-person at the next New Orleans Investment Conference. It’s November 20th - 23rd, 2024. Register here.

Brien Lundin joins us. He is the host of the world’s longest-running investment conference, the New Orleans Investment Conference. He’s also editor of Gold Newsletter.

He & I discuss inflation, interest rates, real estate, and gold.

Gold is up 20%+ annually. This is because foreign nations, like China, are beginning to prefer to own gold rather than US debt.

There’s a case for interest rates to go higher, another case for them to go lower.

Brien tells us why he believes the gold price will keep rising.

Increasingly, asset values are positively correlated—real estate, stocks, gold, crypto, oil, and even collectibles.

Personally, though I don’t see evidence that gold builds wealth, history shows that it’s a good place to store wealth.

Meet me in-person at the next New Orleans Investment Conference. It’s November 20th - 23rd, 2024. Register here.

Resources mentioned:

Meet me in-person at the next New Orleans Investment Conference. It’s November 20th - 23rd, 2024.

Register here.

For access to properties or free help with a

GRE Investment Coach, start here:

Get mortgage loans for investment property:

RidgeLendingGroup.com or call 855-74-RIDGE

or e-mail: info@RidgeLendingGroup.com

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509: Legendary Investor Jim Rogers' Dire Warning on US Debt

Complete episode transcript:

Keith Weinhold (00:00:01) - Welcome to GRE! I'm your host, Keith Weinhold. Learn about garage real estate, how garages and parking add value to your property, and how to get more rent for the garage. Then we go from micro to macro. As we talk about the enduring value of a real asset that's minted, not printed, and another chance to meet me in person today and Get Rich Education.

Robert Syslo (00:00:27) - Since 2014, the powerful get Rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate, investing in the best markets without losing your time being a flipper or landlord. Show host Keith Weinhold, who writes for both Forbes and Rich Dad Advisors and delivers a new show every week. Since 2014, there's been millions of listeners downloads and 188 world nations. He has A-list show guests include top selling personal finance author Robert Kiyosaki. Get Rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener.

Robert Syslo (00:01:01) - Phone apps build wealth on the go with the get Rich education podcast. Sign up now for the get Rich education podcast or visit get Rich education.com.

Keith Weinhold (00:01:29) - Welcome to GRE! From Saint Augustine, Florida, to Saint Paul, Minnesota, and across 188 nations worldwide. I'm Keith Weinhold, and you're listening to get Rich education as we cover a component of property that's a little talked about, garages and we're a real estate investing show. You learn about ways to optimize the rent income that a garage can produce for you, too. Now, if the home that you currently live in has a garage, it could be the entrance to the home that you use even more often than your own front door. That's how important and useful it's become. And understand that garages on homes, they didn't even exist until about 100 years ago, because that's when cars began to become popular. The emergence of the garage in American real estate is one reason for the downfall of the big front porch. You rarely see big porches on modern homes.

Keith Weinhold (00:02:26) - Interestingly, some of America's most successful companies began in garages, places where you have workbenches and can tinker around with things. Google and Nike were launched in garages, and it's also where people store lots of things, sometimes so many things that they can't even get their car in there anymore. In fact, the word garage comes from the French garage. Spell that g a r e r meaning to store. But yeah, when cars became more popular in the 1920s and 1930s, that's when you begin to see garages. And then as cars got larger, garages got larger. And by the 1960s, as families began to own not just one car but 2 or 3 cars, garages became larger again, and a three car garage is pretty common today in a single family home, though it's rarely that big in a property that you're going to rent out. Now, if you've got a single family home and it does not have a garage and you want to make a garage addition. Well, you can only expect to recoup 65 to 80% of what you've spent.

Keith Weinhold (00:03:40) - So it is a money loser. Then it really doesn't make sense to add one to a rental, perhaps only your primary residence, since you get the benefit of using it yourself that way. And if you add a garage to a rental, you know you just really can't get that much more in rent for it. It's usually not worth it, although the financials can look better for a carport addition instead. Now, if you've got a rental with the garage rather than without one, it actually can help you get your place rented out faster. But a tenants really not going to pay you even as much as 10% more in overall rent in most every case. Yet see, what happens is that a tenant, they tend to fill up the garage with stuff, and therefore they tend to stay longer than if there were no garage. A garage is one reason that single family rentals see longer tenant durations then apartments. Now, if your property though, if it's in a built up area and there's little on street parking, oh well then the addition of a garage that could have more of an impact on the value of your property than it would out in the suburbs.

Keith Weinhold (00:04:53) - The garage does not count toward the square footage of a property because that's considered unfinished space. And your prospective tenant? They might not know that fact about the square footage. So that's something for you to keep in mind when you're advertising a home with a garage for rent. Now, older houses, they're more likely to have a detached garage is its own separate standalone structure that's built near the house. But you would have to walk outdoors in order to get from the house to the detached garage. In fact, the home that I grew up in and that my parents still live in in Pennsylvania has a detached garage. Their home was built around the year 1915, so more than 100 years ago, and my parent's garage also didn't have an automatic garage door opener for most of my life. I remember the big yank up that you'd have to make on the heavy door. So when my mom was about to back out of the garage when she was going to take me somewhere, what I would do is I would stand outdoors until she backed out so that I could open and then close the door by hand and then get in the car.

Keith Weinhold (00:06:06) - Gotta get those legs under it and enjoy one deep squat there, Well, one reason that old houses have garages often detached from the rest of the home is for risk of gasoline explosion. That's because back 100 years ago, gas was stored in the garage because gas stations were yet to be invented. So you've got this trail of detached garages left behind in older neighborhoods, and some people still prefer a detached garage. Now there's a way for you to get more rent income if you're renting out a single family home with a detached garage, and this isn't always going to be feasible based on how the property's set up. But the way to do it is for you to get an off site tenant to rent your garage. Oftentimes, the renter of your single family home, you know, they just don't have as high of an income as someone does that lives in an upper crust neighborhood that might have a lot of toys to store their, be it a boat or an antique car, or even an RV, perhaps.

Keith Weinhold (00:07:13) - Well, that off site renter in the better neighborhood, you know they're going to pay you to store their cars or their other stuff in your detached garage In that case, your rental home and garage would have two separate tenants, and you will enjoy more overall rent income than if one tenant was renting both the home and the detached garage. So what you really want to learn is you do your research though, is what laws cover the renting of a garage or a storage space because they typically fall outside the jurisdiction of landlord and tenant laws. But you need to verify that depending on your state or your area. Sometimes running a garage is the equivalent of renting a warehouse space, and the rules can be different when it comes to payment issues or other problems. And when you realize that some garages can even have dirt floors, you can see how different it is than a living space. Now, even if you're thinking about renting your garage to an offsite tenant. Most of the time making garage upgrades, it's just really not worth it.

Keith Weinhold (00:08:19) - But note that I said most of the time. On the other hand, if you can make it marketable, maybe you need to do something smaller, like add an automatic garage door opener if it doesn't have one, and then you'll have to run the numbers to see if that is worth it. Now, one mistake that I made out of property, it wasn't that first ever seminal fourplex that I owned, but the second fourplex that I owned there in that building, each tenant had a small, simple one car attached garage, and then as each four plex unit went vacant, I went in and painted the inside the walls and ceiling of all four garages with a fresh coat of paint, and I would learn later that was not a good use of my time. It didn't help me get any more in rent. No tenant is really even going to stay longer for fresh garage paint, but frankly, I'm just not a handyman. I don't know how to fix anything. So one of the few ways that I knew how to add value, I thought was rolling a paintbrush over the inside of garage walls like I know how to paint and not much else replacing a faucet.

Keith Weinhold (00:09:29) - Whoa, that right there. We're getting into, like, intimidating territory. Okay for me. In any case, duplexes in fourplex, they can often have garages, especially newer ones. And I think I mentioned to you here on the show before that I once owned an eight plex. It was a little quirky. It had a small single attached garage that was kind of on the end of the building. So eight units and just a one car garage. And actually this is a good example because those tenants, they paid about $1,500 for their unit, so none of them could really swing it. None of them could afford to pay an extra $400 for the garage. So again, the way to solve that is rent to a more affluent off site tenant. That's what I did. And I got 400 bucks. Now, understand something. When you're driving a neighborhood or you're looking on Google Maps, at times it can look like a home has a two car garage because you're only looking at the widths of the garage door.

Keith Weinhold (00:10:29) - But that can really be a three car garage because on one side, the garage bay goes two cars deep, so you can't always tell how many cars a garage can hold just by looking at the width of the garage door. One reason that developers in Hoa's actually like garages that are too deep is that way. The driveway is more narrow. When driveways are more narrow, that means there's less asphalt and more green space in neighborhoods. Now, in some places, it doesn't matter too much if the garage is full of stuff and you have to park in the driveway, but in a cold, snowy place, it really helps to park cars inside the garage. So garages are typically more valuable to residents in areas that have real winters. In an apartment building, it can help to have assigned spaces for tenants. When I bought apartments, I've always loved it to my property manager to figure out the space assignments and rental property. Upgrading and resurfacing parking areas is another money loser. Now, we don't want to be slumlords, but the truth is repaving and re striping a parking lot that might look nice.

Keith Weinhold (00:11:44) - You might do that. but the reality is that it will get you practically zero extra rent. Not a good ROI. Well, that's a take on garage's past and present. What about the future of garages and parking areas when it comes to the future? And this harkens back to episode 13 of this show. Yes, that's when I discussed driverless cars, also known as autonomous cars. Back in January of 2015, nine and a half years ago. Well, when autonomous cars become popular, which many expect will still happen, it's likely that fewer people are going to own cars at all. They will just have a car subscription. The autonomous car will pick you up and drop you off, and more people will convert their garages into living space like another bedroom. If that does indeed eventually happen. But autonomous car adoption has hit roadblocks since episode 13 of this show back in 2015, and that's generally because autonomous cars keep having accidents. Although Waymo is perhaps the one company that's made more headway lately, you're seeing their autonomous taxis in use in some cities right now.

Keith Weinhold (00:13:03) - Currently, a car spends 95% of its life being parked, but garages, parking lots, and parking garages are all poised to be less useful when fewer people own a car. Instead, these autonomous cars are just going to drop you off, pick you up, and then constantly stay moving. Stay out on the road rather than park at all. EVs are a factor here to electric vehicles. They can be thousands of pounds heavier than the average gas powered vehicle, and experts out there are warning that the extra weight from EVs that could cause older parking garages to collapse unless steps are taken to buttress those structures. I mean, that's a problem. If geotechnical and structural engineers didn't design EVs on older parking garages decades and decades ago parking lots, they have definitely fallen out of favor among some, but they are still building lots of them. Critics say that to have to build minimum parking spaces on new projects, well, that hinders new housing construction, and also encourages people to drive rather than take public transit parking lot.

Keith Weinhold (00:14:18) - Critics. They also argue that parking lots and garages, they fill up precious urban real estate with these sort of soulless, concrete eyesores, making cities more sprawling and less convenient. And you tend to see this more in cities west of the Mississippi River. In the east, you have more cities on gridded street patterns that are more dense because they were laid out and developed before cars took over and sprawled so many cities, but with as many changes that autonomous vehicles could bring to the parking world and make things like car ownership less important and car parking less important, I sure would ask a lot of questions before I invested in any sort of parking related real estate. Today we've been talking about real estate in the micro so far today. Garages and parking surely will pivot to the macro as we discuss an asset that's minted not printed. That's next. I'm Keith Weinhold, you're listening to episode 510 of get Rich education. Listen to this. Hey, you can get your mortgage loans at the same place where I get mine at Ridge Lending Group Nmls 42056.

Keith Weinhold (00:15:36) - They provided our listeners with more loans than any provider in the entire nation. Because they specialize in income properties, they help you build a long term plan for growing your real estate empire. With leverage, you can start your prequalification and chat with President Ridge personally. Start now while it's on your mind at Ridge Lending group.com. That's Ridge Lending group.com. And your bank is getting rich off of you. The national average bank account pays less than 1% on your savings. If your money isn't making 4%, you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk. Your cash generates up to an 8% return with compound interest year in and year out. Instead of earning less than 1% sitting in your bank account, the minimum investment is just 25 K. You keep getting paid until you decide you want your money back there. Decade plus track record proves they've always paid their investors 100% in full and on time. And I would know, because I'm an investor, to earn 8%.

Keith Weinhold (00:16:50) - Hundreds of others are text family to 66866. Learn more about Freedom Family Investments Liquidity Fund on your journey to financial freedom through passive income. Text family to 66866.

Robert Kiyosaki (00:17:08) - This is our rich dad, poor dad author Robert Kiyosaki. Listen to get Rich education with Keith wine old and there is I respect Kate is a very strong, smart, bright young man.

Keith Weinhold (00:17:26) - It's terrific to welcome into the show a man with decades of investment analysis experience that we can learn from. He's the executive editor of Gold Newsletter, and you might know him as host of America's longest running investment conference, the famed New Orleans Investment Conference. Hey, we haven't shedded in a minute. Welcome in Brien Lundin.

Brien Lundin (00:17:48) - Right? To be able to keep it has been a while too long.

Keith Weinhold (00:17:51) - That's right. And now you and I each span the real asset world. I'm a real estate guy. You spend a lot of your work in teaching over there on the gold side. And we both intersect with the general economy. And, you know, Brian, I think of the general economy is having a number of abnormalities.

Keith Weinhold (00:18:11) - Is it always does, but actually many normality to I mean, I've commented that there's actually relative normalcy in the fed funds rate and even mortgage rate levels. If you look at it historically, also home price appreciation rates, in rent appreciation rates, they're all close to historic norms, although the aberrations are probably more interesting to talk about. What are your thoughts on the economy's general direction?

Brien Lundin (00:18:37) - Yeah, you know, it really is weird. We think about today's interest rates and how high they are. And throughout human history, the natural level of interest rates have hovered around 6%. That's kind of what it's always been for thousands of years. So what we went through over the last 16 years or so was a really abnormal period, and even going back a decade or so before that. So yeah, it looks seems like interest rates are at normal levels. What is at abnormal levels, however, is the level of debt that we have today. And and that's been created after over four decades of ever easier money, ever since Volcker killed off inflation in the 1970s and started lowering rates, we see that whenever there was a recession, the Federal Reserve had the same prescription every time it lowered interest rates, and then it would try to raise them back, but could never get past the midpoint of the previous range before another recession would come back, or the markets would throw some kind of a fit in.

Brien Lundin (00:19:40) - The fed would then start easing again. And if you look over time, if you plot or draw a line at the bottom of every one of those interest cutting cycles, see that those bottoms of the cycles get progressively lower and lower. Till 2008, they hit zero. And then they tried to normalize it got up to 2.5% on the Fed's funds fund rate, and then had to go right back to zero at Covid. So the lesson to me is that things might seem normal if you look at the grand sweep of history, but they're anything but normal right now, and the debt loads that we have are so high they preclude anything resembling a normal interest rate. And in fact, my contention is that interest rates have to be below the rate of inflation. In other words, the currency has to depreciate at a faster rate than you're paying interest on these debts, or the whole house of cards collapses. So that's actually, while not good for the fiscal health of the US or other developed economies, it's actually good for the kind of tangible assets, real assets we are talking about real estate, gold, silver, monetary metals, even commodities.

Brien Lundin (00:20:52) - And, you know, everything across the board as far as tangible assets.

Keith Weinhold (00:20:56) - Yeah, we look at the long term history of interest rates 5 to 6% if If you go back hundreds of years or even thousands of years is a historic norm. The fed funds rate is now at about 5.3%. But yeah, I think what you're talking about is we seem to have a decreasing tolerance for what are really normal rates. Nothing abnormal about the rate. All that was abnormal was the rate of increase. And you know, one thing that I think about with the economy, Brian, that maybe people don't talk about enough. Is this labor shortage that we have? I mean, it is difficult to do get anyone to do my landscaping. Last year I stayed in a hotel where when I checked in, there was no human being at the check in desk. It was automated checking. Then last month, I stayed at a hotel where there was a human at the front desk, but they told me that there was not going to be any housekeeping during my state.

Keith Weinhold (00:21:46) - So the reason that I bring this up is that a chronic labor shortage that spells entrenched upward pressure on inflation, because you have to offer higher wages to lure in workers and higher wages paid mean higher consumer prices, higher rents, more inflation and persistently high rates to combat that.

Brien Lundin (00:22:07) - Yeah, absolutely. And you bring up a whole nother factor that very few people consider as demographics. You know, the fertility rate in the US is below the replacement rate. It's about 1.7 now, and it would have to be like 2.1. And as they say, demographics is destiny. We're not the only ones by any means. Japan went over the demographic cliff long ago. We're following all the other developed nations are as well. And in 20 or 30 years the global population will be falling. That brings about a lot of other pressures and real estate. Obviously you have, you know, the baby boomers are going to be downsizing if they can find something to move into. Besides a retirement home, had a decent mortgage rate.

Brien Lundin (00:22:50) - You know, we have so much overhang in real estate that's sitting out there and locked up by the current interest rate. So yeah, it's an interesting dynamic we're in right now. And personally I think it's all just a result of the Federal Reserve and all these other monetary mavens whose PhDs I want to pull all these levers on the economy. And they have unintended consequences in every one of the policies that they undertake. And we're in one right now.

Keith Weinhold (00:23:20) - We've got both inflation and a scarce supply of property that just keeps floating property values higher despite higher mortgage rates. And one place that the high inflation is often reflected is in the price of gold. Gold is up more than 20% year over year. And one thing I want to ask you about here, with regard to gold and the fact that we have this debt that you brought up earlier, Brian, is a real problem. When we look outside the US, the world's biggest economy is by far China. China has been dumping US treasuries, meaning basically that they're no longer buying our US IOUs so they no longer want our debt.

Keith Weinhold (00:23:59) - And instead, China and other nations are increasingly parking it in gold. Now, is that one of the reasons that gold has surged?

Brien Lundin (00:24:07) - Yeah, it is the primary reason. Or, you know, one of the primary factors why gold has surged this year in particular. And it's a weird mix of buying. This year. We saw the gold price start taking off like the 1st of March. And it was for the first six weeks or so. It was literally a relentless rise, not a down day. Setting new price records every day. And it took us a while to try and figure out or to figure out where the buying was coming from. And as it turns out, it was the result of continued buying by central banks renewed buying to an even greater degree by the people's Bank of China, and also some domestic demand from China. And that's something we had never seen before. We'd never seen Chinese investors and savers buying gold on the way up in a price trend. They usually bought on a price downtrend trying to get a bargain, but now they were following the price up.

Brien Lundin (00:25:06) - So that contributed to everything and the factor that we had expected that did not come about in the first half of the year was a fed pivot. You know, if you look back in December, yeah, the markets are pricing in 5 or 6 fed rate cuts in 2024. And that kept getting postponed. And that was expected. I expected in most of the other analysts expected the beginning of fed rate cuts to really drive the price up higher, but it kept getting postponed. That big factor is still ahead of us. I think the markets are going to start pricing that in in a couple of months. And so what all that central bank buying and Chinese buying is done is while we were waiting for the fed to pivot in that big factor, it went ahead and added $300 to the gold price and got us into a new trading range so that when the fed pivot does hit, we're lifting off from a much higher level. So it's a good time, I think, to be an investor in gold and related assets.

Brien Lundin (00:26:07) - I think it's also a good time to be involved in real estate and a lot of other tangible and real assets, as.

Keith Weinhold (00:26:13) - Well as real estate investors we are interested in that interest rate direction. And, you know, if the US is continually finding themselves in a position where they're wondering, well, hey, if not China and others will, then who in the heck is going to buy our debt? And now you? I think the listener you can ask yourself in the same way, if you're trying to get your friends to give you a loan, How do you entice your friends to give you a loan? You would offer them a higher interest rate in order for them to give you a loan. So with that in mind, Brian, is that what the US has to do in order to entice foreign bondholders in the same way, meaning then debt rates would tend to be held high?

Brien Lundin (00:27:01) - Very interesting point there, Keith, because getting back what I was saying, how these PhD economists are pulling all the levers on the economy, the lever they're about to pull is to start lowering rates again, because they recognize these debt loads, they recognize the possibility of a recession, and that if there is a recession and tax receipts fall, then the debt load is going to accelerate even further.

Brien Lundin (00:27:26) - So they feel that policy right now is very restrictive. And they're going to start lowering rates at some point. They have to. But the debt loads being what they are, however you have on the other hand, the bondholders are, which you would hope would be the buyers of the Treasury securities, and they will look and see the potential economic slowdowns. They had the potential for higher inflation and start demanding higher returns on their yields. So there is a tension there. We saw that develop last October, November timeframe and a few months ago when we saw Treasury yields rise at the same time that the dollar index rose versus other currencies and gold was rising, which was a weird kind of strange bedfellows there that typically gold does not rise when interest rates are rising and the dollar is strengthening. But they were all going up together, and that happened a bit last fall as well. To my mind, that is a reflection of safe haven buying. You know, typically we think Treasury yields fall when they're safe haven buying because everybody's going into treasuries.

Brien Lundin (00:28:36) - To me that was reflective of safe haven buying because the markets were really concerned about the fiscal future for the US and other developed countries. So they were going to the safety of the dollar, the safety of gold and demanding higher yields on treasuries. That would be more commensurate with the kind of inflation rate that they saw ahead. But it's been a weird mix of buying a weird mix of economic developments, and I think it all argues toward big money getting more and more into gold because of the uncertainty that lies ahead, and the really the extraordinary nature of the current economic situation to the world we find ourselves in now.

Keith Weinhold (00:29:21) - I did not realize that there is less sensitivity to higher gold prices until I just learned that from you a few minutes ago. So that's really interesting about potential momentum in the future price of gold. And we talk about the future price of gold. We think of that through a supply and demand lens, much like we think about what's moving real estate prices today. Have we hit peak gold, meaning that there's less and less of it to pull out of the ground?

Brien Lundin (00:29:49) - All of the trends in that respect actually favor gold and that we have reached peak gold production as around 32,300 tonnes a year.

Brien Lundin (00:30:00) - Interestingly, a third of that level is being purchased now by China between the people's Bank of China and Chinese citizens. So a good bit of that is taken off. But I'm not a big proponent for the validity or the impact of supply and demand for gold, because it is monetary demand that really drives the price of gold. It has no utility, virtually no utility and industry. It is purely a monetary metal. So when people are concerned about the future purchasing power of the currency, they buy gold and they drive the price up, and that buying on the margin really sets the price of gold. And I think we're about to enter one of those periods where gold really plays catch up for long sweeps of time. You'll see the gold price doesn't do much until something happens. Things get bad to a certain degree where people really start to worry about their purchasing power, and then gold makes a huge catch up move. Really, in the early stages of that kind of a catch up ketchup move, I believe.

Brien Lundin (00:31:06) - I think we're entering a period that would be akin to the 1970s and the 2000, where the price of gold has historically gone up anywhere between five and a half and eight and a half times over during these kinds of secular bull markets. And I think we're in one of those periods right now.

Keith Weinhold (00:31:25) - Five and a half to eight x.

Brien Lundin (00:31:27) - Yeah. If you look at the fact that there's only been three bull markets in gold since 1971, when it actually became, you know, an investable asset or commodity and not money. So 1970 to 75 was a bull market of 76 to 1980 with a bull market. And really, 2000 to 2011 was another bull market run. And each of those instances, each of those three bull markets, gold went up from 25.6 to 8.2 times from the lows. And this market we're in now, the low is about $1,040. So if the price of gold goes up trading 5.6 and 8.2 times, you're talking about 6 to $8000 gold price at the end of this cycle, wherever and whenever that takes us.

Brien Lundin (00:32:17) - And of course, you know, we're up around 2300 and change right now. So that's a good move ahead. Lots of potential. And it's not just where the price of gold goes, but all the associated assets worth it, like mining stocks and the like are going to do, I think, very well over the next few years.

Keith Weinhold (00:32:36) - Yeah. People know gold is the classic inflation hedge. But to your point, it has a lot to do with catching a wave. If you think the real long term diminished purchasing power of the dollar is 3 or 4% over time. Well, you don't see gold go up gradually at 3 or 4% per year for several years. You tend to see it do little or nothing, and then it has this big catch up phase, like those periods of time that you talked about. When we talk about physically holding on to gold, you know, it's cool. It's one of those type of investments where if you do hold it yourself, there's no login or password to access your goal that is physical, intangible.

Keith Weinhold (00:33:10) - And you know, Brad, one thing that a lot of gold people often talk about is a positive attribute to holding gold is that it has zero counterparty risk when it's yours. No one can take it from you. But does it really have no counterparty risk? Because I think about if a person wants to hold physical gold, well, if they outsource it to a third party vault or a bank safe deposit box, then the counterparty risk is there. But if they hold it onto themselves and store it in their own home, which I don't know if that's a good idea, but if they choose to do so, well then the counterparty risk is the thief. So I think gold is a great way to store wealth, but is there really zero counterparty risk associated with gold?

Brien Lundin (00:33:48) - Well, from that standpoint, there's never a zero risk. There's never a zero risk. When you step out of your door in the morning, either, you know, there's always some risk. You can mitigate the risk. And it reminds me of of what I tell people when they're really new to the sector is there are two reasons to buy gold.

Brien Lundin (00:34:04) - One is as insurance and one is as an investment. And insurance is what you need to worry about right away because you're insuring against something you know is going to happen. If you feel like 3 to 5 years, the dollar's purchasing power, it's going to be much less than it is today. I think we can all agree in most likely is then by buying gold today, you lock in today's value of the dollar because gold will make that up, and perhaps even more so, it will protect you against that depreciation. So you can ensure your wealth by holding some physical metals. And I think that's the most important thing you can do, at least initially, is get silver and gold. Now, as far as storing it, a lot of people can store enough gold in their house to gain a good bit of insurance against whatever their wealth is. And by that, you know you will have to invest in a safe. Don't tell anybody about where it is and a good alarm system. And if you haven't and a location where you have a good police force, then you're talking about 20 minutes that somebody's going to get in your home before the police come and knocking, and hopefully they can't find the safe, much less get into it in that amount of time so you can do it in your house to some degree.

Brien Lundin (00:35:16) - You can store it elsewhere, but there are important considerations there. They're very respected storage facilities and the like. You don't want to store it in a bank because one of the things you're insuring against is a bank holiday, thanks to like you to store it there either, but you can find respected institutions to store it. I recommend people don't put all the eggs in one basket and store it with a number of institutions, or as many as they can practically do. But yeah, it is important to own the metals, you know. Otherwise you're going to lose from here. On the day that you decide not to buy gold and silver to protect your wealth from that day on, you're accepting a rate of purchasing power depreciation that we know is considerably more than what the government says it is, and is historically high to begin with.

Keith Weinhold (00:36:09) - I generally think it's a good idea to own at least a little gold if you have trepidation about buying gold. Think of it this way in a way you're not buying gold, You're transferring some of your prosperity over into gold, which has had lasting value for millennia, across cultures and across generations.

Keith Weinhold (00:36:28) - And for some reason, I think a lot of people my age and younger that they don't own any gold. I would imagine that 90% plus of people, I think the statistics are out there. 97% of Americans don't own any gold. And maybe you feel like you don't understand gold and you don't want to own what you don't understand. But you could purchase this a 10th of an ounce of gold for under $300. And you know, by buying just a little bit, you begin to get a vested interest in this stuff. So with that in mind, Brian, how much do you think one should allocate and in what form should they make their purchase?

Brien Lundin (00:37:02) - It's interesting. There have been studies for many years showing that the highest risk adjusted return you can get in a diversified portfolio with about 5% of your wealth, or your investing portfolio allocated to go to heaven. Those same studies done that are indicating more like 10% or more. It's to the point that you sleep well at night, whatever makes you comfortable.

Brien Lundin (00:37:27) - But you know all of those studies back test it and they look back and see how gold and a portfolio meshes with the six, the classic 6040 mix of stocks and bonds etc.. But what we've seen over the last 12, 14 years is that post the 2008 great financial crisis is that all of these asset classes have become more and more positively correlated because everything's dependent on the Federal Reserve and monetary policy. So all of the correlations have started to trend toward one, where they all rise and fall together in unison. Because everything, again, is just depends on monetary policy and the flow of liquidity from the Federal Reserve and other central banks. So that fact alone argues for even a greater holding in gold, because all of that portends greater and greater inflation, greater monetary accommodation, and the kind of thing that gold insures against. So the way to look at gold as insurance is not quite like home insurance. You know, you buy home insurance, you pay the premium every year in case your house catches on fire.

Brien Lundin (00:38:38) - But you really don't expect your house to catch on fire. With gold. You're buying insurance. You're paying the premium, perhaps just once, and you're insuring against something that you know is going to happen, that the purchasing power of your dollars are going to depreciate. So if you have a significant cash balance in accounts, you might as well put it into precious metals and lock in the current rate before it gets the purchasing power of the dollar depreciates even further.

Keith Weinhold (00:39:06) - That is a good point with gold as money insurance from the standpoint that with your homeowner's insurance and your landlord's insurance policy, you need to pay a premium annually. You potentially only need to pay that once upfront when you purchase your gold, and there's typically a spot price differential to overcome. Well, Brian, you are the host of America's longest running investment conference, which is founded on championing American's right to own gold. The New Orleans Investment Conference. It really feels like there is a touch of prestige when you're there. I can speak to that personally because I've attended it at least three times in the past.

Keith Weinhold (00:39:47) - It's coming up in November. I hope to attend again this year. You've got some illustrious speakers there. Tell us about this year's New Orleans Investment Conference.

Brien Lundin (00:39:58) - Yeah, it is our 50th anniversary. You know, I think it's the oldest investment conference in the world today and longest running. And we do have that legacy, that prestige of being somewhat gold oriented. We're actually covering a good bit more real estate lately, but we really cover a lot of the macro picture macroeconomics. We have some of the leading thinkers come to our vet every year and a great audience as well. Very highly qualified, very successful investors. This year is up 50th. So we have another wonderful roster of speakers. We have Jim Grant coming, George Gammon, James Lavish, Danielle DiMartino Booth, Britt Johnson, Abby Gilbert, Adam Taggart, the list goes on and on. Rick Rule, Peter Boockvar, dozens and dozens of top minds. And, you know, we kind of alluded to it in this talk, but these are really strange and interesting and dangerous, extraordinary times that we're living through right now.

Brien Lundin (00:41:02) - And it is amazing to me, having been in the business for 9 to 40 years now, seeing these kinds of periods come and go. And it seems that when they do happen, we get this kind of underground media that arises, and people who really bring in losses come to the fore to comment on what's going on and provide really valuable insights. And after all the years I've been in this business, I know who really contributes value, who the best thinkers are, and I'm getting them all to come to New Orleans. As I have to say, I'm a big fan of all of our speakers. I think they are absolutely extraordinary, and we are so confident that you will find our event to be worth many times the cost of attending, that we have a money back guarantee. If you don't think it does, if you don't think it's worth many times what you paid for, we'll give you registration feedback. So it's very few events that can offer a guarantee like that. And I think you would agree with me that you have to be there to really experience it.

Brien Lundin (00:42:07) - And it really is just an extraordinary experience.

Keith Weinhold (00:42:11) - Yeah, I can't imagine anyone not getting a multiple on their investment with attending the conference. You know, one thing that you do really well there at the conference, Brian, besides just listening to all those speakers that you just mentioned, you also have panel format discussions where sometimes you can learn more when you're listening to a conversation than you can when you're listening to a presentation. You have both choices there. Then if you prefer you want to break, you can go across the hallway to where the exhibit hall is and do some learning and meeting people over there. And then you also have these breakout sessions where you go upstairs into small rooms and learn from presenters in just the niche that you think most interests you or that you want to learn more about. So there's really good variety there.

Brien Lundin (00:42:54) - Yeah, it's kind of a time tested format. It's different than most conferences you'll find out there, but it's worked well for us for 49 years, and our attendees seem to appreciate the unique format that we have and the ability to learn.

Brien Lundin (00:43:09) - And it really is information almost overload. There's so much of value from these speakers. If you are intellectually curious, if you are a serious investor, if you enjoy an intellectually stimulating environment in a destination location, this is really the place for you. And you know, I can go on over and over again for as long as we have time for and more to say talking about it. But the best advertising we do are people who word of mouth from people who have come. And I would encourage anyone who is considering coming to the New Orleans Investment Conference. Number one, this is our 50th anniversary. It's going to be a very special year. But number two, find somebody who's been before. Talk to them about it. And I think you'll get excited about attending this year.

Keith Weinhold (00:43:56) - Each year it is at an excellent location. It's at the New Orleans, Riverside Hilton and Bryan Terrace, those November dates for the event and then how one can attend.

Brien Lundin (00:44:07) - Yeah, it's November 20th to 23rd this year, so it's the week before us Thanksgiving week.

Brien Lundin (00:44:14) - So it's it doesn't interfere with that holiday. It's kind of a good little slot there. And people can learn more by going to one New Orleans conference.com. Very simply New Orleans conference.com.

Keith Weinhold (00:44:29) - All right. It's been great catching up on the state of the economy, real estate inflation, interest rates, gold. And thank you so much for putting on this terrific conference for the benefit of every interested investor. It's been great having you back on the show.

Brien Lundin (00:44:43) - Wonderful to talk to you again, Keith, as always.

Keith Weinhold (00:44:52) - Oh, yeah. Bright, inarticulate thoughts from Brian, as always, when he and I discussed those related factors of inflation and interest rates. I mean, this is such a germane discussion because, like he brought up, there seems to be this increasing propensity for all asset classes to rise or fall together. Like nearly every asset class is near an all time high right now. I'll need to research the incidence of this some more so that it's not just anecdotal, but the Fed's decisions. They seem to increasingly float up or knock down just about every investment class almost simultaneously.

Keith Weinhold (00:45:35) - Real estate stocks, gold, crypto commodities, collectible toys, even nearly everything. And when you're a real estate investor, you are already investing in commodities and metals, and you have direct ownership of those. Now, not so much precious metals in your real estate, but we're talking about items that are built into it, like aluminum and steel and copper. They probably exist in your properties. Well, their prices go into the replacement cost of your property, and they are a reflection of your real estate portfolio's overall value, too. Coming up here on future episodes of the show, it will be the inaugural appearance of the King of Commercial Real Estate here on the show. Also, there seems to be still a mainstream aversion to all debt types, and I suppose it finds me in the position of being real estate's debt proselytizing. Well, coming up on the show, I am going to ask and answer the question for you is any debt worth paying off? Which debts are good to pay down? Which stitch should be paid off, and which debt types do you want to keep, and which debt types do you actually want to get more of? What are the exact distinctions so that you know right where to draw that line on all the debt types that you hold on to.

Keith Weinhold (00:47:00) - So coming up here on the show, is any debt worth paying off? And I am pleased to tell you that if you would like to meet in person, yes, you're going to have a chance to do that at the special 50th anniversary of the New Orleans Investment Conference. Now, I'm not sure that meeting me in person really brings any benefit to you or the event, but yes, I am attending in person in New Orleans. I haven't been there since 2021 and I want to return. Brian London really knows how to put on an event. There is a lot of macroeconomic talk there and you will hear more about both that and gold than you will about real estate, although I expect plenty of real estate investing information there as usual. Again, it's November 20th to 23rd, four plus months away. And the registration link that you can use for this is in today's show notes. I will also get it into the next newsletter for you. Big thanks to the wise and wonderful Brien Lundin today. Until next week, I'm your host, Keith Weinhold.

Keith Weinhold (00:48:03) - Don't quit your daydream.

Speaker 5 (00:48:09) - Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get Rich education LLC exclusively.

Keith Weinhold (00:48:37) - The preceding program was brought to you by your home for wealth building. Get Rich education.com.

Direct download: GREepisode510_b.mp3
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Mon, 8 July 2024

Asset prices are near all-time highs for almost everything: real estate, stocks, gold, bitcoin, and more. This is because in a wave of high inflation, investors chase yields.

Legendary investor Jim Rogers joins us.

Jim gives dire warnings about US debt levels.

Meet me and one of our Investment Coaches in-person at FreedomFest in Las Vegas, July 10th to 13th.

I put $1T into perspective. A trillion seconds ago was 31,700 years ago. That’s when neanderthals roamed the plains of Europe.

The dollar is a monopoly. The US government has no competition for their product, the dollar.

Jim Rogers believes that higher inflation and interest rates are here to stay.

He says: “Before this is over, interest rates in the US are going to go much, much higher.”

Resources mentioned:

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Complete episode transcript:

Keith Weinhold (00:00:01) - Welcome to GRE. I'm your host, Keith Weinhold. I'll tell you about a chance to meet me in person. Then we're joined by a renowned and legendary investor for his sage like wisdom on how you should respond to record US debt levels for forecast the future direction of inflation and interest rates, plus a taste of the Singapore real estate market today and get rich education.

Robert Syslo (00:00:27) - Since 2014, the powerful Get Rich Education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate, investing in the best markets without losing your time being a flipper or landlord. Show host Keith Weinhold writes for both Forbes and Rich Dad Advisors, and delivers a new show every week. Since 2014, there's been millions of listeners downloads and 188 world nations. He has A-list show guests include top selling personal finance author Robert Kiyosaki. Get Rich Education can be heard on every podcast platform, plus has had its own dedicated Apple and Android listener. Phone apps.

Robert Syslo (00:01:02) - Build wealth on the go with the Get Rich Education podcast. Sign up now for the get Rich education podcast or visit get Rich education.com.

Corey Coates (00:01:13) - You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.

Keith Weinhold (00:01:29) - Welcome to GRE. From Sydney, Australia, to Sydney, Nova Scotia, Canada, and across 188 nations worldwide. I'm Keith Weinhold and you're listening to Get Rich Education. Why are our values of almost every asset so high? Well, one reason is because we've had that high wave of inflation. When that happens, savvy investors, people just like you, they ensure that money must flow into assets. And that's because you seek a real return above and beyond inflation. If inflation were low, investors wouldn't have to chase yields this way. I've got more on asset values in a moment. But first, on today's guest, legendary investor Jim Rogers, who will hear from as a returning guest here soon in early 2019. So more than five years ago, he told us right here on the show that interest rates are going to go much, much, much higher over the next few decades and that is going to ruin a lot of people.

Keith Weinhold (00:02:32) - In fact, let's listen into that. Here it is. This is from get Rich education podcast episode 224, which you heard here in January 2019. This is Jim Rogers.

Jim Rogers (00:02:43) - And interest rates are going to go go much, much, much higher over the next few decades. And it's going to ruin a lot of people.

Keith Weinhold (00:02:50) - And then from there, he went on to tell us at that time, rising interest rates will set in for a long time. And this was back when the fed funds rate was just half of what it is today in mortgage rates were 4.5% back there in early 2019. So Jim Rogers made that firm prediction even before we knew about Covid. Then. And on that episode, we talked about getting your debt and locking it in. And then two years later in 2021, he was back here on the show to warn us to expect high inflation. Well, we sure got that too. And as you listen to Jim Rogers on today's episode, consider that, you know, he just often speaks with this sort of, I suppose, nonchalance that I think can make it easy to dismiss what he says.

Keith Weinhold (00:03:46) - But don't do that because countless people have benefited from his guidance for decades. Just like I hope that you do today in the real estate world. Now, agencies agree that the national year over year home price appreciation rate is 6%. That's today per the FHFA, the NAR and Case-Shiller 6% home price appreciation. What about rents? Today, Single-Family rents are up 5%. Nationally, multifamily rents up 2.7%. So why are Single-Family rents growing faster than multifamily rents? Well, it's partly because 2023 saw the biggest surge in new apartment supply since 1987. Yes, that's back when Madonna was the hottest music artist and Reagan met with Gorbachev. But there's less apartment construction this year, so expect a lot of that to get absorbed. Available inventory of Single-Family Rentals is going to stay more scarce than apartments for quite some time, but long term they both expect to be in really great shape. Residential rental demand is sustainable now. Back in 2022, available single family home inventory that was an astoundingly paltry one quarter of what was needed.

Keith Weinhold (00:05:20) - Well, now it's up to half. Some inventory has definitely been added. In fact, I was recently on television being asked about that. But this still means that demand handily exceeds supply. There's not nearly enough housing, especially on the single family end. And what about those perpetually just around the corner, always, constantly just around the corner, fed interest rate cuts. They keep getting delayed beyond a lot of people's expectations. Well, per the CME's Fed Watch tool, here is the chance given of when the first rate cut will occur by the end of July. 10% September 60th 4%. November 70th 7% December 90th 3%. You know, personally, I think the chances are lower than all of those currently inflation's at 3.3%. But here's the thing. Even when it hits the Fed's target of 2%, that doesn't mean that rates must be cut. All right. That's a reality that a lot of people seem to forget. Now here on the show, not after every quarter, but sometimes when a quarter ends, just like one did a week ago, we take a quick look at other asset class moves outside of real estate in order to get a relative perspective.

Keith Weinhold (00:06:43) - Some comparison here. If you're listening to this episode ten years from now, this is really going to help mark this era for you to is we do have many listeners that listen to every single episode. The 30 year mortgage rate is near 7%. Now, all these next figures are year to date through the first half of the year. So this is just the performance of the first half. Stocks have soared. The S&P is up 15%. One way that US stocks changed last quarter is the trades are now going to settle faster. Investors will see their purchases and sales finalized in just one day instead of two. Gold is up 13% to over 2300 bucks. Bitcoin up 44%, oil up 16% to $82. And again, that's performance for just the first half of this year. The world's three largest companies Apple, Microsoft and Nvidia have a combined value of over $9 trillion. Now, a company's total value is known as its market cap, and that is simply found by multiplying share price and shares outstanding. By comparison, all the gold in the world is worth 15 trillion.

Keith Weinhold (00:07:54) - Hey, if you're familiar with an event called Freedom Fest, I have some cool news for you. It's an annual conference that. How would I describe it? Well, I haven't attended it before, but there you can learn to expect more about free thinking and ideas about the size of government. Well, it starts in two days. It's July 10th to 13th in Las Vegas. You can meet one of Gre's investment coaches in person there and you can also meet me. Yes, we'll both be there. If you see us, be sure to say hi. We'd both like to meet you. Hashtag IRL in real life, some of the Freedom Fest speakers include our frequent great guest, Robert Kiyosaki, as well as some other guests that you've heard with me here on the show. Also, Steve Forbes, Iced Tea, the comedian Rob Schneider, Nevada Governor Joe Lombardo, Whole Foods founder John Mackey and the congressman that wants to end the fed, Thomas Massie and more. They're all speaking. So yes, not a lot of notice, but if you're going, it's a way to meet me in real life, perhaps just in a casual way, in two days at Freedom Fest.

Keith Weinhold (00:09:08) - Well, it is public information that the net worth of this week's guest is $300 million. He's been influential for a long time. Let's talk to legendary investor Jim Rogers. This week's guest needs a little introduction. He is a legendary business and investing mogul of our time. He's a Yale educated, prolific author. He co-founded the Quantum Fund, and he even has his own commodities index and ETF. He's also a prolific traveler. He wrote a very well known book about his world travels, visiting some 116 nations. Hey, welcome back to gray. It's Jim Rogers.

Jim Rogers (00:09:51) - I'm delighted to be here. Okay, let's get rich. I need to get rich. I want to get rich.

Keith Weinhold (00:09:56) - Hey. Well, your guidance helps us do that. That's why you're here. And Jim is joining us remotely from his home nation city of Singapore today. And it's always interesting syncing up our times of day here. Jim, where to begin? You've been with us here. I think this is the fourth time you're here and about the last five years, and we're at a time when asset prices of seemingly everything are near their all time highs, maybe even in their inflation adjusted all time highs in some cases.

Keith Weinhold (00:10:25) - What are your thoughts with asset price levels?

Jim Rogers (00:10:29) - Keith. You it's very perceptive of you and insightful. Yes. This is one of the few times in world history that I know about where nearly everything is making new eyes. I think China is probably the only country. It's not making new eyes, but nearly everything else is. Now it's wonderful. It's great. A lot of people are having a lot of fun, but unfortunately, I've been around long enough to know that when things get this good, when everybody's having so much fun, we're getting closer to the end. I am not selling short or anything yet, but I see the signs that this is going to come to an end, as it always does, and it's going to be a mess. And the reason this is going to be a big mess this time. You remember what happened in 2008 because of too much debt each. That's 2009. The debt everywhere has skyrocketed. I mean, even China has a lot of debt now. China bailed us out before, but everybody has a lot of debt now.

Jim Rogers (00:11:31) - Maybe not North Korea, but everybody else does.

Keith Weinhold (00:11:34) - And that sure includes us. I mean, we have these asset prices at all time highs. Yet here we are, still the largest detonation in the history of the world in the United States now at 35 trillion. And we're spending dollars on others wars, something that we couldn't say when you and I talked a few years ago. The biggest line item of our national budget anymore is about $1 trillion in annual interest payments alone in. Jim, we're really on this course now where soon the US annual tax receipts won't even cover the interest payments on our debt, and we may have to borrow just to pay the interest. So where do we reach the breaking point here? With this world in debt led by the United States?

Jim Rogers (00:12:20) - You one makes some very good points. Unfortunately. I wish you didn't. I wish you couldn't make those points right. It's simple arithmetic. Just look at the numbers. And the numbers you recite are just what they admit, what they write.

Jim Rogers (00:12:34) - There's a lot of off balance sheet debt that they don't even talk about. I mean, the numbers, if you try to get out of pencil on a piece of paper, you will realize that the market can never pay this debt. Never. Countries that have gotten into this situation in the past have had big problems. Now it's a good time to be an old American. I don't have to worry about all this for too many years, but I have young children. Oh my gosh. The problem is that their country is going to face in their lifetime. I was staggering. You look back at previous countries that have done this kind of thing. In the 19 to 100 years ago, Britain was the richest, most powerful country in the world. 50 years later, it was bankrupt. IMF had to fly to London and pay their bills. It wasn't fun. It was terrible what Britain went through. But other countries have done the same thing. Maybe we don't like what I'm saying or what's happening, but just read the history and you will see how it winds up.

Jim Rogers (00:13:38) - I certainly don't like it, but I have to deal with facts. If I don't deal with facts, I'll go bankrupt. To which I don't want to do.

Keith Weinhold (00:13:48) - Yeah, sometimes let's laugh to keep from crying. Right? When you talk about how certain government figures are just what the government is willing to admit to, I think that's the right lens to look through. When you look at any government figures. Well, at least that's the part that they're willing to admit to. It's interesting that they're willing to admit to this is interesting that they're willing to admit to 9% inflation like we peaked at two years ago. But when you talk about the future and this huge debt load and children or grandchildren, could austerity be part of it, something that's very politically unpopular. But if we lived in an austere state, wouldn't that really be sort of like the downfall of the American empire at that point?

Jim Rogers (00:14:30) - Well, that's what happened to the British. As I said 100 years ago, they were the richest, most powerful country in the world.

Jim Rogers (00:14:36) - There was no number two. Then if two years later, completely bankrupt, I happened to be in England during part of that time and it was a mess. Wretched. So I don't like saying any of this, but I have to deal with the reality and the numbers you cite or what they admit. You know, the numbers are much worse. I don't know if anybody in Washington really knows. I don't even know if they care enough to check to see how bad things are. But every time a someone from Washington, a politician or a bureaucrat says something, they say, don't worry, everything's okay. We have a Janet Yellen who's a secretary of the Treasury. Are you or two ago said, don't worry, we have everything under control.

Keith Weinhold (00:15:20) - Reassuring isn't it? Not really.

Jim Rogers (00:15:22) - Oh my gosh. He's got a couple of fancy Ivy League degrees, but she still says, don't worry, it's okay. Well, I worry, I'm probably not as smart as she is, but I worry.

Keith Weinhold (00:15:36) - Well, it's interesting that you bring up the fact about the things that we don't know and these numbers, these debt levels and even the deficit gets so big, we're just throwing around this word trillion anymore.

Keith Weinhold (00:15:48) - For some perspective, I happen to know that 1,000,000,000,000 seconds is 31,700 years. In order to help put this into perspective, well, 31,700 years ago, that's just about as far back as when the planes of Europe were being roamed by Neanderthals. That's 1,000,000,000,000 seconds ago. And again, we are $35 trillion in debt, and we have a deficit of at least $1 trillion. The annual thing.

Jim Rogers (00:16:21) - I'm glad you're putting some perspective on this, but I don't need it. I know it's a staggering whatever number you want to look at, whether it's the one they report or the one that's they hide whatever it is, I know, because I can add and subtract. I know that America has a gigantic problem that is going to end up like every other country that's done this sort of thing. It's going to end up badly. America is going to lose its status, not this month. Don't worry. July is okay. But no, I can read, I can add, I can subtract. I know how it's going to wind up.

Jim Rogers (00:17:02) - It's not good for young Americans.

Keith Weinhold (00:17:06) - I mean, we think of the fall of the Roman Empire. You bring up the UK. The UK is still part of the G7, but they're no longer the one predominant power in the world. Jim, when I look at history and I think about sort of the powers that be and how they create and debase the currency, and how those problems percolate into so many parts of the society. I think if the United States is basically they have a monopoly on creating currency, and I just wonder if that's part of the problem. Lennar builds houses, but they have competition from KB homes. John Deere makes tractors and they have competition from New Holland. Heinz makes ketchup and they have competition from hunts. See, when there's competition, there's sort of this incentive to produce quality and provide others with value. But since the U.S. has no substantial competition to the dollar, I wonder if we can think of this as a de facto monopoly from its dilution of the purchasing power of the dollar.

Keith Weinhold (00:18:06) - Its quality is suffering because the dollar doesn't have any substantial competition. So I guess what I'm leading up to, what I'm getting at, is we think about currency creation as a de facto US monopoly. I mean, does the government have to be the exclusive money printer where all this just ends up in the debt column here?

Jim Rogers (00:18:24) - You raise some very good points. But back to the first main point. The main point is there is no way that America can ever pay these debts except by default, Which is one horrible way. Or by printing gigantic amounts of money, which is another horrible way. This is not the first time countries have done this. If you just go back and look, it is never ended well. Never ended well. Yes, England is still there, but nobody thinks about England the way they did 100 years ago. And nobody in England lives like they did 100 years ago, and many people left. I don't know what's going to happen to the US, except I know it's not going to end well because I can add and you can add and subtract.

Jim Rogers (00:19:15) - I wish we could subtract. There's nothing to subtract because the debt just keeps high and higher and higher. And the numbers are very simple. If you get out the amount of debt we have and see the possible income, it just doesn't work. If you have fifth grade education, fifth grade arithmetic, you know it doesn't work.

Keith Weinhold (00:19:39) - Jim, I don't know if you remember this, but the first time you were with us, it was January of 2019. That was more than five years ago. And at that time you said interest rates are going to go much, much, much higher. That was your direct quote, three matches. And you said that it's going to ruin a lot of people. And here we are with a lot of people ruined in the commercial real estate world and the apartment syndication world and so on. So if you continue to think there's going to be more currency creation to make it easier to pay back our debt, does that mean you believe that higher interest rates and higher inflation are going to be a persistent condition, say, just till the end of this decade, which is about another five years? What do you think about inflation and interest rates for these next five years?

Jim Rogers (00:20:27) - I know that in Washington they will print money.

Jim Rogers (00:20:31) - That's all they know. They want to keep their jobs. They don't care about you. I don't care about any of us. They care about keeping their job. And they will do whatever they have to to keep their job the easy way. Now, the proper way, of course, is to buckle up, buckle down, and start doing something about the rendus situation we were in. They don't care. They think they'll be gone by the time those times come, if they're ever coming, and they will say, but we're America. We cannot have problems like that. Well, that's what the British said, too. Once upon a time. And as I say, there was no number two to the British. They were that power. They were that much on top. It's not that I don't like saying. I don't like thinking it. I don't like living with it. But I do hope I can prepare so that I don't go down the tubes like some other people will. But I may just do the arithmetic.

Jim Rogers (00:21:32) - It's very simple. The numbers just cannot work. I didn't say the numbers do not work. I said they cannot work because the situation is that dire. They can hold it off for a while by printing money. Great. But then not for you and me. Certainly not for our children.

Keith Weinhold (00:21:51) - I think that's all they're going to keep doing. That's the most expedient way to do it, to keep printing any politician that proposes austerity. And you having soup for breakfast, lunch and dinner is not very likely to get re-elected. Does that mean in the next five years you foresee historically elevated interest rates and inflation, which is basically where we actually still are now?

Jim Rogers (00:22:14) - Well, of course I do. I mean, there's the market. The problem is right now the central banks still think they're in control, and they pretty much are. But there will come a time. And there always has in history when the market says, wait a minute, we know you're lying. We know this cannot work. And then when the market takes over and the market starts setting interest rates and other conditions, that's called disaster.

Jim Rogers (00:22:41) - That's a real, real serious problem. The market will know how bad things are, and the Treasury secretary can sit there and say all day long, don't worry, don't worry. We have it under control. And the Marquis will say, thanks, but we know better.

Keith Weinhold (00:22:59) - Well, we've got more coming up with Jim, including. He spent some 60 plus years abroad. I want to learn more about what he thinks with living and traveling so much about the United States. You're listening to get Rich education. Our guest is legendary investor Jim Rogers. When we come back, I'm your host, Keith White. Hope your bank is getting rich off of you. The national average bank account pays less than 1% on your savings. If your money isn't making 4%, you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk. Your cash generates up to an 8% return with compound interest year in and year out. Instead of earning less than 1% sitting in your bank account, the minimum investment is just 25 K.

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Speaker 5 (00:25:08) - This is The Real World Network's Kathy Petke, and you are listening to the always valuable get Rich education with Keith Reinhold.

Keith Weinhold (00:25:26) - Welcome back to get Rich. university. So we're talking with investing mogul legendary Jim Rogers.

Keith Weinhold (00:25:32) - He's joining us from Singapore today. He's joined us a few times over the past five years. And with what he said in what's coming, he's really been remarkably accurate. Sometimes he just gives a pretty casual delivery, but you really want to listen in to what he's saying. A lot of people have hung on his every word for decades here. And Jim, part of that is all your worldly experience. From so many of your travels and visiting over 100 nations. I've only visited about 35 so far myself. What do you think that we can learn about the United States from living and traveling abroad?

Jim Rogers (00:26:07) - First of all, I used to tell you I have made many mistakes in my life. I don't think I don't know how to get things wrong. I have many times. But yes, living abroad, I certainly even traveling abroad is an eye opening experience. It's a fabulous education. Rudyard Kipling, who won the Nobel Prize for literature, once had a line and a poem. The name of the poem was The English flag and the lion was.

Jim Rogers (00:26:36) - What can he know of England? Who only England knows. One is you'll know a lot about your own country if you know about the rest of the world. And you will you. If you go to country X and you see they eat different food or wear different clothes, it'll make you realize a lot about America. So my point is it's a fabulous education to see other places. I don't know if it's helped me. I in my view, it has helped me a lot to understand the world and to understand other people.

Keith Weinhold (00:27:11) - Now, in my international travels, which are a fraction of yours, a lot of times I get a reminder that life in the United States is still pretty clean and efficient. We have an abundance of potable water all the way to an amenity like fast Wi-Fi. And you know if someone abroad is traveling in the United States, they get to experience those things, and they probably don't even realize or understand that we're the greatest detonation in the history of the world. It's actually pretty difficult to know.

Jim Rogers (00:27:40) - There are signs that even those travelers will see. If you go to JFK airport, you will see the huge difference in JFK and say, the Japanese Narita Airport. You know your intuitive world when you visit some international airports outside of the US. But it's not just that America. Five star hotels do not compare with five star hotels in other countries. Listen, I don't like any of this because I have to live it. But the facts are. Yes. And you make a very good point that most people do not notice or does not affect them much at all if it affects them at all. But that just makes the eventual problem worse, because it hits us out of the blue and we don't know what happened. At least if we're worried, we can prepare. But you know, if you ride down the highway, most people think everything. It's okay. This is a nice interstate layout of potholes. They think everything is great. I hope that this all changes. I hope I'm wrong, but I have seen enough to dough that it's not going to end well.

Keith Weinhold (00:28:55) - Tell us about where you've lived for a long time. I mean, you come from the United States, but you've lived abroad for a long time. You've been there in Singapore for a while. Singapore, which is a place I haven't traveled to, has a reputation for being prosperous and enterprising in a really clean place. So will you tell us a little bit more about why Singapore is prosperous, including what its real estate markets like?

Jim Rogers (00:29:20) - Singapore is a tiny country. There are only 5 or 6 million people here. So yes, it has been a remarkable success story. It's probably been one of the greatest success stories in the world in the past 40 or 50 years. It still amazes me to see how efficient and how well everything works here. And they don't have yet the getting debt now, but they don't have the staggering debts that some other countries do. I mean, Japan, America. You look at some of the great success stories that come to people's minds. Japan did it by borrowing staggering amounts of money.

Jim Rogers (00:29:57) - Every day, the Bank of Japan borrows huge amounts of money it's going to have a problem to someday. I mean, it's just very simple. I don't want it to sound like some crazy fear monger, but I can read. And I know how this is always wound up. Now there's some very exciting and successful places in the world. And if you go to some parts of the United States, you say, oh my gosh, what a wonderful place. And it is. But underneath seems to me that there are problems developing. If you come to Singapore, you'll say, oh my gosh, and I'm not the only one who knows it all. The international surveys show that Singapore is one of the very top.

Keith Weinhold (00:30:42) - Now in Singapore, is it more of an owner society where most of the residents own the home they live in or like you find in a lot of urban areas? Is there a disproportionately high amount of renters there in Singapore?

Jim Rogers (00:30:55) - Over 80% of the people at Singapore own their own home.

Jim Rogers (00:31:00) - The guy who set out to build Singapore new and he especially because in his lifetime there had been a lot of riots in Asia. And he somehow knew that if people own their own home, they had a huge stake in the country, right? Had a reason to make sure, to try to make sure everything went well. So in this country, over 80% of the people own their own home. Yeah, he may have a mortgage, but still they own their own home. That's part of the reason for the success. I mean, for what it's worth, I'll also tell you he was a huge believer in education. He made sure that everybody spoke at least two languages. I mean, he knew what it took to be successful and he did it. Yeah.

Keith Weinhold (00:31:49) - Homeownership is generally good for communities like you touched on. You just have more of a stake in making sure your neighborhood stays quiet. Or you might show more interested enthusiasm in new clean mass transit coming into your area. You're more likely to be a voter when you own your home, and so on.

Keith Weinhold (00:32:06) - So sure, that gives the residents a more vested stake in their own community, which is good for everybody. Does Singapore have one problem that we have here with United States housing? Do you have any idea if there's a substantial housing shortage there in Singapore, like we're seeing in so many places?

Jim Rogers (00:32:21) - Do not shortage in the sense that you probably mean it? Yes. At times prices go high because there's not an abundance of housing and people keep moving to Singapore because it has been a successful place. So no, it's not like many places that we both know, but there are more immigrants coming here. The population is rising and they got a little somewhere. Yes, people are building homes and so it's not a gigantic problem at the moment. Can it be? Yes, of course it can be. And maybe it will be someday, but not at the moment. One thing I'll quickly say. Many societies, many countries, have a saying that families go from rags to rags and three generations. And there are many reasons for that.

Jim Rogers (00:33:11) - So social reasons. I will point out that Singapore is now on its fourth new government. So maybe if human wisdom is correct, maybe Singapore is going to have some problems in the future. You don't see them now. They might though.

Keith Weinhold (00:33:28) - Well, that's an interesting way to think about it. We've talked about problems in a few nations, Jim. I wonder, do you see there being a bright next up, incoming nation because you have this relative perspective from all your travels.

Jim Rogers (00:33:43) - There are places that are trying to change and do better. Yet, Nam is a perfect example. I mean, what a nightmare it was 40 or 50 years ago. Right now it's on the rise. South Korea is one of the most successful, prosperous nations in the world. And in 1970, North Korea was richer than South Korea. That, of course, is not true anymore. So countries can change and can develop. And it has worked. I'm interested in Uzbekistan now, in Central Asia. It was ruined by the communists.

Jim Rogers (00:34:20) - over 600 years ago. Uzbekistan conquered a lot of the world. I mean, then the communists came along and ruined it. But now they're changing again. So there's always somebody on the rise, and I'll be somebody on the decline. That's key, of course, is to be in the place where things are getting better, not getting worse.

Keith Weinhold (00:34:42) - With that in mind is we're about to wrap up here. Jim, you know, I like an actionable takeaway for the audience. And before I ask you that, if I can share with you what we do here in a nation and a world of expanding debt, Grey's take on debt here is the way that we can borrow large amounts prudently and get our own debt is to buy income producing real estate. If you borrow more, you can only control more and both inflation and tenants passively debase your mortgage debt for you, which enriches that borrower as long as they can control their cash flow. So really, that's one thing that we're doing to play things here in a world of inflation.

Keith Weinhold (00:35:25) - What are your thoughts with that? Or if you think that there's something else that the everyday person can really do to protect themselves in the future.

Jim Rogers (00:35:33) - It's pretty clear that there have been, if you understand that and if you manage it properly, oh my gosh, you can become unbelievably successful and unbelievably rich. The proper words are though, if you handle it properly. History also showed that many people have been ruined by debt, so I hope that everybody understands that debt is not as simple as it looks, but if you handle it properly, oh my gosh, the returns and the rewards are huge. And yes, there are many, many throughout history, throughout the world, many people that made gigantic fortunes from property, from real estate. So I hope you're doing it right. I hope all of your viewers are doing it right. It's not as easy as it looks, but it can lead to great success and great disaster. So yes. Don't stop. Make sure that everybody understands the potential problems and the potential rewards and they don't get overextended.

Jim Rogers (00:36:37) - Oh my gosh, you'll be very, very rich.

Keith Weinhold (00:36:40) - Yeah, that's a little bit like fire. If used inappropriately, could burn down your house. But if you know how to use fire, you can cook meals for the rest of your life. Do you have any last thoughts overall, anything you'd like to share? Anything we really want to know?

Jim Rogers (00:36:54) - I will tell you again that before this is over, interest rates in the US are going to go much, much higher. The debt is staggering. It is just whenever I look at the numbers and think about them, it shocks me, stuns me because I know it's going to lead to huge, huge, huge problems. But the people who are aware and understand what's happening and thrive. So this is not some kind of disaster for everybody, but some people will do extremely well. I hope that everybody you know does extremely well.

Keith Weinhold (00:37:31) - Well, Jim Rogers, it's been a pleasure hearing from you again. As always. Thanks so much for coming out of the show.

Jim Rogers (00:37:37) - My pleasure. I hope we can do it again sometime.

Keith Weinhold (00:37:45) - Oh yes. It's good to get the bigger picture. Sage like wisdom. I'm not sure if you caught it early in the interview, but Jim is not selling short. That means he's not betting that stocks are about to take a big fall. He expects even higher interest rates when it comes to America's swelling debt. Most agree that they're just going to keep inflating their way out of it, rather than default on it. I do, too, but consider that the US actually does have a history of defaulting, like in 1971 when we told the world that you can no longer redeem our debt, IOUs for your gold, that there was defaulting on a promise, we weren't going to give them the gold anymore. Singapore is still growing fast. In fact, it's averaged about 2% annual growth over the last decade. If you discard pandemic aberrations, the value of the median Singapore condo is $1.7 million, and it is 1000ft² in size. That sort of makes you think about New York City real estate.

Keith Weinhold (00:38:52) - And in fact, I had a trip planned to Singapore in February 2020. It was a cruise, but I didn't go. That part of the itinerary got cancelled. If you remember, Covid heated up in Southeast Asia early on, so I ended up spending more of that trip in India and Dubai. As it turned out, with our accelerated expansion of the supply of dollars that have been created since 2020. Here's one result today, more than 43% of Americans have been forced to cut back over the past year, and nearly 20% have had to borrow from family or friends in order to make ends meet. And you know when politicians brag about government funding. Just remember this. They're actually expecting you to give them credit for spending your money. That's what that means. And unfortunately, no one is immune from Congress's spending, which can be reckless at times. If you don't pay for something with taxes, then you pay for it with inflation. And that's exactly the type of issue that we expect to study on at Freedom Fest, where I might be fortunate enough to meet you in two days.

Keith Weinhold (00:40:10) - Big thanks to the iconic Jim Rogers today. His website is Jim rogers.com. Coming up on the show here in future episodes soon, we're going to discuss a few components that add value to your residential real estate that really don't get discussed very often. Garages and also the vacant land that your property sits on. Also, the King of Commercial real estate is set to make his Get Rich Education debut. We'll learn about commercial real estate turmoil and the commercial sectors that higher interest rates have blown up. Well, hey, do you have family or friends that are into investing or real estate? I love it when you hit the share button on your podcasting device or whatever platform you're listening on. Everything that we do here is free, and the share button really helps the show. And be sure to follow or subscribe to the get Rich educational podcast yourself if you haven't already. Until next week, I'm your host, Keith Reinhold. Don't quit your daydream.

Speaker 6 (00:41:19) - Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice.

Speaker 6 (00:41:29) - Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss the host is operating on behalf of get Rich education LLC exclusively.

Keith Weinhold (00:41:47) - The preceding program was brought to you by your home for wealth building. Get Rich education.com.

Direct download: GREepisode509_.mp3
Category:general -- posted at: 4:00am EST

Mon, 1 July 2024

Explore influential quotes and maxims from the investing and business world.

This includes from: Warren Buffett, Mark Twain, Robert Kiyosaki, Albert Einstein, Dan Sullivan, Thomas Edison, Benjamin Franklin, Suze Orman, and yours truly, Keith Weinhold.

“Why not go out on a limb? That’s where the fruit is.” -Mark Twain

“Given a 10% chance of a 100x payoff, you should take that bet every time.” -Jeff Bezos

“The stock market is a device for transferring money from the impatient to the patient.” -Warren Buffett

“Don’t live below your means; expand your means.” -Rich Dad

“The wise young man or wage earner of today invests his money in real estate.” -Andrew Carnegie

“Savers are losers. Debtors are winners.” -Robert Kiyosaki

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