The Governments Secret Wealth Strategy | Keith Weinhold

Today I'm sitting here with Keith Weinhold. We're actually on the Real Estate Investor Summit cruise in the Caribbean right now and he had an awesome presentation. He is a single family one to four unit real estate investor and helps other people invest in one to four unit properties. He is the host of the Get Rich Education podcast and he also serves on the Forbes Real Estate Council. So excited to chat with you on a quick talk today and just want to know, why should people consider even investing in real estate? What are some of the values that you found throughout your investment journey?

It opens up freedom for you. Freedom is probably what you really want in life. If yes, most people what their definition of wealth is, freedom comes to mind. There are three main types of freedom. Income freedom, time freedom and location freedom. A lot of people go for the income, but they forget about the other two. So as a real estate investor myself, and the way that you could arrange your affairs potentially is I own real estate in multiple United States markets. My property manager sends me monthly statements from these various markets and I just take a look at the statement and I get my owner draw. Now it took a few years to get to this point, but this gives me income freedom because there's no limit to the amount of times that I can do this because it gives me time freedom because I only buy a property if I know there would be income after paying a management expense. And I also have this location freedom. It's geographically agnostic. I can do it from absolutely anywhere. This really changes one's mindset to buy assets that pay you while you own them. What do most people do? The poor and the middle class, they work for an employer, which is just how I started out. They trade their time for dollars, they sell their time for money. And that's why spending money feels so painful, because they've actually traded away a part of their life in order to get that income instead. When you own assets that pay you while you own them, money does not feel like a scarce resource, it feels like an abundant resource instead. So really that's the mindset shift. And some of the reasons for being a real estate investor so good.

And I mean, that was me too. I had no freedom, no money, but I had time and I had to eventually work for money first. And then as soon as I was able to invest that money into real estate assets and I started in the single family one to four unit space as well, and that was able to start to create passive income for me and buy back my time and give me a sense of freedom and, and then it continues to appreciate. And we talked a lot about inflation in your presentation as well, and how inflation could be a really bad thing in people's perspective. Right, because that's all you hear all over the news. Inflation, inflation. Inflation is causing all these issues. But you talked about some interesting concepts of how inflation is very good, especially when it comes to real estate investing and for those who own assets. So you touch on that.

Yeah, inflation impoverishes most people. But as a real estate investor, you can take this malady and flip it to your advantage. We all know that during inflationary times, which are most times, you don't want to be a saver because savers savings get debased by inflation. What's the opposite of saving? It's actually not spending. The opposite of saving is borrowing. You can profit when you buy income, property with a loan. What is it, Hannah? Just six words. Buy income, property with a loan. That's the formula. The way you benefit from inflation is a way that you can do it in three different methods at the same time with something I've coined called the inflation triple crown. If you buy a million dollar asset, maybe you're not starting off buying a million dollar asset, but it's just simple numbers and it all scales. If we have inflation, that certainly pushes up your asset value. Secondly, if you have say a million dollars in debt, a lot of people don't understand this inflation profiting concept. The bank doesn't ask to be repaid in inflation adjusted dollars, only nominal dollars. So if you had a million dollars in debt, where the payments are outsourced to your tenants, they pay your principal and interest, imagine paying back the bank in 30 years. That million dollars would really only feel like 300k debt to you because over time, wages go higher, prices go higher, salaries go higher. So savvy borrowers that outsource their debt to others actually profit from this arrangement. And then thirdly, if you have a loan on your property, your cash flow often goes up faster than the rate of inflation. This is because your mortgage, principal and interest payments stay fixed. Inflation can't touch that. So really these are the benefits of having good loans, something that you actually help people with, Hannah.

Yeah, exactly. I know. And that's the great thing about inflation, if you invest it right. Robert Kiyosaki, who's on this trip with us as well, he says savers are losers. And that video I posted with him on when he was on my podcast, went viral with millions of views. Because so many people are taught to Go to school, get a job, save money. Da da da da. But when you invest property, inflation can actually be a really good thing because it helps our assets go up and it helps our debt value actually go down. And this is how the government uses inflation to help with their debt too, to lower the real cost of their debt over time so they actually have the ability to repay it and that's what leads to them continuing to print money.

Yeah, that's a great point. And it is special that Robert Kiyosaki is here on this cruise with us to your point. And Robert Kiyosaki gave us the all time bombastic statement, savers are losers, debtors are winners. And I really just described why. And you know, a lot of people try to make predictions about the future. Well, if you think the future is going to be this, invest that way. But if you think it's going to be 180 degrees opposite, think that way. But here's a new thought paradigm for you. Why don't we just align our financial affairs with, with a near certainty, something that's almost guaranteed out there, and that is inflation. We know more is coming. The Federal Open Market Committee, the powers that be, they even tell us that they're trying to create more inflation. So borrow in a savvy way and arrange your affairs to profit from this rather than be destroyed by it.

Exactly. Yeah. They have an inflation target of 2% a year. So they're targeting to continue to inflate and devalue the dollar, to do all the things that we just talked about. Right? Reduce the cost of the debt over time, raise the cost of assets over time. So savers are losers because this is just the way the economy works. But yeah, that's why people invest in real estate, gold, silver and these other assets that will actually benefit from inflation.

Inflation is worse than you think. Either you can get mad about it or you can learn how to be a savvy borrower and do something about it. I gave a presentation here at this Summit at Sea event that was well received where I broke down how price inflation is worse than you think. We have something else called service inflation. We have shrinkflation, where manufacturers often shrink the package sizes of something, but there's not a commensurate decrease in price. We have skim inflation where they skimp on ingredients as well. And all of this conspires to create a higher inflation rate than what's stated in the CPI, which has been between 2 and 3% for a long time. So let's be a savvy borrower and do something about it. And you're uniquely positioned in real estate because you can get access to and borrow large chunks of money. You can't borrow a large chunk of money on your credit card. And on your credit card you have to make those payments. Tenants can't do it for you. So this is why real estate investors are uniquely positioned to. It sounds paradoxical, but yes, actually benefit from inflation.

Exactly. Well, thanks so much for your insight on all that. And what's the best way for our audience to get a hold of you?

Follow me. On the Get Rich Education podcast or the get rich education YouTube channel, we actually talk about how you can use real estate to build wealth. And as you know Hannah, we even have free in house coaching where we connect you with the exact properties like say 3, 2, 1 Mockingbird Lane in Memphis, Tennessee with the exact address that can make a good long term rental property and provide you with an income stream and that inflation profiting benefit. So it's the Get Rich Education podcast or the get rich education YouTube channel.

Awesome. Well, thanks so much, Keith.

Thanks Hannah. It's been.