1292: Recessions, Manufacturing, Globalization & Wealth Simulations

My wife and I were drawn to you because we liked the idea of.

Putting money down, qualifying, making sure we.

Can cover the mortgage and have reserves. Like you were talking a language that was very appealing based on what we.

Had gone through before.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh.

New approaches to the world's most historically.

Proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants, and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode 1292. 1292. Hey, we're almost at episode 1300. Thanks for joining us today as we talk about something very important and that is the looming recession that will inevitably come. In fact, many, many would argue that it is overdue. It is overdue. And one of the things we're going to be doing at Profits in Paradise is we're going to be talking about stress testing your portfolio so that you sail through the recession in comfort and luxury versus many investors out there, especially those speculators and those people who bought bad properties and those people who didn't know how to either manage their managers or self manage successfully. We're going to dive into that today. And I've got Adam here with me. Adam, welcome back. How you doing?

I am doing well. Thanks for having me back.

Good to have you on. And when do you think the recession will come?

I think it's going to get pushed back until at least after the presidential election. I don't see the politicians willing to do anything to mess with it before then.

Well, yeah, I've long thought about that in every election cycle for, you know, decades now. I don't know. Trump's opponents would love to see the economy fall down during the heavy part of the election season.

Well, I think they're going to be focused way too much on impeachment to worry about the recession.

Yeah.

Honestly, I think they'll push that back.

They'll put that on the table. Huh. Well, it's not that they can exactly control this stuff anyway, but we all sort of believe that they exert some control over which they do a little bit, but not completely. So stress testing. You've heard a lot coming out of the Great Recession ten years ago about stress testing the banks, stress testing the financial system and how the Fed has implemented new programs to do this. But what about us? What about all of us investors? Are we stress testing our own portfolios? Can we make it through the next cycle? That is definitely coming up. Having gone through many recessions in my career now, in fact, I just had my anniversary and I forgot to mention it, got my license on September 13th many decades ago.

So 19 something something.

Yeah, yeah, 19 exactly. That's when I got it. I've been in the real estate business a long, long time and I have seen lots of stuff and approaching, although I do not know the exact number in which I did, but I'm getting close to through my various companies over the years and personally getting close to that 10,000 transaction mark. Yes, dear listeners, you are listening to a person with a big long resume who's made lots of mistakes and seen lots of things and seen lots of other people make mistakes. And I've had lot, lots of success too. And I've seen lots of our clients be very successful. So there's a lot of knowledge that I want to impart to you on this podcast five days a week and then through our guided visualizations on our bonus day on Saturday and then of course at our live conferences like the upcoming Prophets in Paradise. So stress testing, a very important thing. Now on Thursday, we talked a lot about gdp, gross domestic product and what that means. And you know, they'll talk about GDP as it relates to a nation, which is what it's really meant for. But people also apply GDP to states and even cities and they apply it to the entire planet Earth. What is the entire human race's GDP every year? And by the way, that number is somewhere in the neighborhood of $60 trillion. Of course, the US is around $20 trillion and then China and Japan trail the US economy. So a recession is when GDP, well, the academic definition of recession is when GDP declines for two straight quarters or more. Let's take a look at what a recession is and dissect this a little bit. So cnbc explains on YouTube has a great series of videos and we're going to share one with you here about recessions.

The last time there was a global recession was in the late 2000s. The scale and timing of that Great Recession, as it's now known, varied from country to country. But on a global level, it was the worst Financial crisis since the Great Depression. Now, a decade on, some people are worried the next worldwide downturn may be just around the corner. While there is no universally accepted definition of a recession, a technical recession is a decline of gross domestic product, or gdp, for two consecutive quarters. That means the value of all all the goods and services produced in a country went down for six months straight. But the U.S. national Bureau of Economic Research, which tracks the start and finish of each US Recession, says a recession can begin even earlier than that. The bureau measures and collects monthly data for four other areas in addition to gdp, real income, employment, manufacturing, and retail. If these economic indicators decline, it's likely GDP will too. Now, a recession is not the same as stagnation. That's simply a period of low or zero growth. Nor is it a depression, which is a more severe decline that lasts several years. Between 1960 and 2007, there were 122 recessions in 21 advanced economies. This may sound like a lot, but those economies were really only in recession for around 10% of the time. Each recession is unique, but they often share several characteristics. Recessions usually last about a year, and a country's GDP typically falls around 2%, although in some severe cases, that decline can hit 5%. Investments, imports and industrial production normally drop, and financial markets frequently face turmoil. All this can have a very negative impact on a country's population. Many people lose their jobs, and if they can't afford their mortgages, they lose their homes and house prices drop. They also have less money to spend in shops and restaurants. That means businesses make less money and many go bankrupt. So is there a way to spot a recession before it hits? Some economists focus on the number of people employed in the manufacturing sector. In the world of manufacturing, orders are often booked months in advance. When a factory or company gets fewer orders, they'll stop hiring new workers and potentially lay off some existing workers, too. This is a good sign. Other parts of the economy will slow.

As well as now. That's not as good as it used to be, though, that indicator, because we are not in what Alvin Toffler called in his fantastic books, one of which is Power Shift, that I read back, I think around 1990 or so, where he talks about the smokestack economies. When we lived in a world of the industrial age of smokestack economies, that really mattered. But now that we are in the newer and cleaner age, the information age, that isn't as telling as it used to be. So you see how all of these indicators aren't what they used to be. Because GDP isn't the same as it used to be. It changes over time as technologies change. So the smokestack industries being the Industrial revolution, the symbol of the industrial Revolution, and the information age, the one we're in now, it's different. The manufacturing jobs, I mean, yes, that matters. Of course it matters. And when we look for markets where we want to recommend properties to you, which, by the way, Adam, you've got one to talk about today. We like to look for markets with a good, stable manufacturing base. Why? Because manufacturing doesn't just get up and move like information businesses. Right. As we've talked about on prior episodes, tracking where, say, the millennial generation is moving, where the retiring baby boomers are moving. Well, a lot of these people with these types of careers that they tend to focus on, whether it be retiring baby boomers who have a second gig, and it's largely maybe an info based business or a technology oriented business, or millennials who are very high tech, they move easily, right? They move from city to city. They're not working on an assembly line. Now, one of our longest running markets, well, Indianapolis is our longest running market of them all. But one of our other longest running markets would be Memphis. Memphis has a fair amount of manufacturing, but more logistics. So FedEx, for example, one of the huge employers in Memphis, is not going to just get up and move, even though their business is about moving packages. Their plant in Memphis is very expensive and very difficult to move. So these businesses aren't as mobile. You see people and you hear stories of it all the time. Like when I had dinner with Tim Ferriss, the author of the Our Work Week, about two years ago, he moved from Silicon Valley area to Austin, Texas. He doesn't have any equipment to move other than maybe his laptop. Right. He's an infopreneur, he's a marketer, he's an author. These people in these knowledge jobs, these information age jobs, they can just get up and move easily. And as investors, we don't like that because it's too easy for an economy to shift quickly in those types of areas. When you have a strong manufacturing base, they're really rooted. Those employers are really rooted to that city. Adam, any thoughts on that?

Yeah, I was looking at the. When they discussed how much the recession hits, you know, GDP can drop 2% in the United States. If you look at a $20 trillion economy, that's only about 400 billion, which seems like a big number. But if you look at especially things like the trade war hit and stuff, and you see that can affect, you know, our trade deficit right now. And our trade alignment is about 700 billion. If we make it to where companies are paying $400 billion in tariffs or, you know, even $100 billion in tariffs instead. And that's being passed down to us, that is half a percent or a percent of GDP right there that we're paying in tariffs as we import these goods still. And so that's one of those things that if you see those happening and government spending isn't going up to offset that, that can drive us into the recession pretty quickly.

Well, I know you are a big fan of government spending.

Not necessarily.

I'll always tease you about that.

Oh, I know you will.

You know, you know, in like 50 years I'm still going to be bugging you about your socialist tendencies. But by then we, we will have more evidence. But hey, there's no lack of evidence now as to modern monetary theory and all of this stuff. So very interesting. Okay, let's continue with the video.

Other experts examine the government bond market to see how willing investors are to lend money to governments over a long period of time. When investors are concerned the economy might be slowing down, they often sell their shares in public companies and instead loan their money to governments by buying bonds. That's because bonds are usually seen as a less risky investment. So those are the warning signs of a recession. But what actually causes them? A healthy economy has lots of money flowing through it. Company owners are putting money into their business and hiring more people. Consumers are spending money on their products and services. But if businesses and consumers stop spending that money, less money flows through the economy and growth begins to slow. A few factors can block that flow of money. One of those is high interest rates. When rates are high, people get more money for putting their savings in a bank account. But they also end up having to shell out more to get a loan. This can encourage people and businesses to save more and borrow less, causing their spending to fall. Consumer confidence is a way to measure people's psychological approach to money. Economists track this closely. Low levels of consumer confidence means people are worried about the economy. And that can cause them once again to hold onto their money rather than invest or spend it. A stock market crash, for example, is one of the most sure fire ways to shake up consumer confidence across the board. But inflation may be the biggest factor. It causes the prices of goods and services to increase. If your paycheck isn't growing alongside it, that means you'll have to cut back and buy fewer things. When this happens, people and businesses once again tend to reduce spending and save more. And an economic slump that starts in one country is can spread beyond its borders, creating a domino effect. Let's explore an example. The 1997 financial crisis in east and Southeast Asia. It began in Thailand when the value of the country's currency, the Thai baht, collapsed. Investors had lost confidence in the country and that lack of confidence contaminated the rest of the region. Travelers face strict limits on the amount of currency they can take out of the country. Other Asian currencies like the Malaysian ringgit and Indonesian rupiah began to lose value too soon. Investors around the world have become reluctant to lend money to any developing country. More recently, the trade war between the US and China has also affected many other parts of the world. These two economic superpowers produce and sell about 40% of all global output. And economists worry the knock on effects from their continued conflict could create the next major international recession. Take Germany for instance. Its economy is largely built upon export. It makes money by building machinery and equipment and sending it abroad to other countries like China. But if China anticipates less demand for its products from the US because of the trade war, it's going to order less of that machinery from Germany to make them. Germany is the biggest economy in the Eurozone, which means if it goes into a recession, the rest of Europe will likely suffer too. Some experts say that the financial crisis in 2008 ushered in a new era of deglobalization. That means nation states are less focused on international trade and more focused on their domestic economic agendas. They say all this could lead to more frequent recessions. And because of that, these experts believe we should reconsider what constitutes economic success in developed countries. Total debt burdens will rise.

It's sort of interesting how they say, but don't bother to ever elaborate or explain on how the de globalization that they're talking about could lead to more recessions. I mean, I love how they just glossed over that. It seems like a pretty darn important point. I'd like to know the theory behind that. I'm just not sure what that would be. Any thoughts?

No, I don't know exactly how that would be. I mean, you would think it would matter, especially talking about that domino effect that the more globalization you have, the more that we rely on each other, the more it would impact. Now I will say the Eurozone, that being a big part of it, that could have a quick domino effect because you know, when one country goes under or goes into crisis, there's Just not much they can do as their own country. You know, they have to rely on the other countries as well. And if the other countries look at it and say, yeah, we're not going to help you out right now, and they can't help themselves, you're at a, you know, that's just a spiral that you can go down. Now, I will say the Eurozone, because of globalization, are more likely to help each other out because they know it's better for them as a, as an area to do it, as a region.

Yeah, yeah, well, they're, you know, super connected, obviously. And we've got all this stuff with Brexit and I mean, Europe is a mess, as I've said before. It's really quite a mess. I mean, I don't know, that's like too much to talk about today. So I don't even want to open that Pandora's box.

But, yeah, I don't understand how globalization would cause more recessions.

Yeah, me neither. That seems like a faulty point. I mean, I don't know, it's, you know, clearly someone's theory, but I don't know that it's enough to say that that's true. I mean, the interdependency in the economy is good for peace. We're very unlikely to go to war with our own customers. Right. We're unlikely to destroy our customers as people. So that's great news for society in keeping the world. Peace is more and more trade, but it definitely has some problems. And you know, Trump is bringing those up, and I gotta tell you, I applaud him for doing that. It's very unpopular what he's doing. But you, you cannot have opened, as I've said many, many times, you cannot just have these ridiculously open trade borders. When countries are unequally yoked from that old biblical concept of like in a marriage, the parties need to be equally yoked. And the same is true with a business deal. The parties in the transaction need to be equally yoked. And China is not equally yoked. With the US we have these massive regulations. We have a very litigious world where employers can be sued for anything and everything. They've got to obey by all sorts of environmental, labor, osha, health and safety regulations, et cetera, et cetera. China doesn't have to do that. They don't have these minimum wage requirements that we have over here, our companies have to deal with. So they just can't come in and dump products on the consumers. They have to pay for access to our market. We have the biggest economy in the world, 72% of it or so is consumer spending. And hey, as a libertarian, I wouldn't say this, but I think just from being a practical person, if you want access to our giant trade show called the United States of America, you gotta pay for a ticket. China, okay? If you want to sell your cheap stuff here, that'll bring the jobs back to the U.S. adam.

And also as a real estate investor, you want to look at our states as similar to the countries like you were talking about. Which states are equally yoked, which states have a looser yoke for businesses so are going to be driving them in. So you want to take a look at each individual state and figure out which one of these is providing the environment that is needed and is allowing businesses to flourish instead of cramping them back and making them follow more strict guidelines. Now, you may think as a person, you may believe that those stricter guidelines are better for the environment or better for this, that or the other. And that may be true. But the fact of the matter is this is the society we live in, and you need to understand how businesses are going to react to the regulations that are in each place.

Right? You're absolutely right, Adam. There's no question. That is a very good point. So the same is true on a global scale as it is on a national scale. You see people fleeing these high regulatory, high burdensome, high yoking. I mean, Texas and California, for example, are not equally yoked. Florida and California are not equally yoked. So people are voting with their feet and they're leaving the places with the heavy yoke and moving to the place with the lighter yoke. And they're taking their money and their ideas and their ambition and their businesses with them. And that is very bad for those states with heavy, heavy yolks. So good point. Okay, let's finish this up and then we got to move on to the stress testing and the game we have coming up.

Populations will fall, as will the productivity of our workers. And so it's unrealistic, they say, to think that growth rates can continue to rise in the way they did in the second half of the 20th century. They suggest an alternative approach is to focus on economic satisfaction and contentment with a number like per capita income growth. This essentially measures how much money the average person makes. While the warning signs are there for another global recession, geopolitical tensions and de globalization makes it even more difficult to predict the future. But one thing's for sure, we're living in a new Age of uncertainty.

All right, so that's cnbc. Thanks for contributing that, Adam. People have got to prepare for recession. It is coming. There's no question it's coming. Let's make sure our listeners are prepared for that. And one of the ways we're going to do that at Profits in Paradise is with our Saturday Lunch and Learn Game. Okay, so we're going to do a new game. It will involve stress testing your portfolio. Is your portfolio ready for a change in the economic cycle? And are there properties you should dump? Are there things you should reallocate? Should you do a 1031 exchange? Maybe if you're just getting started, what properties should you be buying now? How do you make those choices to make sure you have a stress tested portfolio? So let's go to a little segment I recorded last week with Doug, who is running the game and why don't we play that now and then we'll come back and I want to talk about Congress's new attack on or investigation into something that we already solved this problem for our event attendees, but it's quite interesting. It's known as the most hated fee in travel. So we'll talk about that. And then we've got a property present as well. So the last several years we've been conducting some really interesting participatory exercises that we do at our events. And this here at Profits in Paradise we're going to do this as well. So I've got Doug here with me and he's got some ideas for how we are going to do the simulation this year. And I think it's going to be very educational even if you're not coming to Profits in Paradise, which is crazy by the way, you will learn something from this segment. Doug, welcome back.

Great to be back, Jason. So yeah, what we're doing is we're taking the wealth building simulation that we did last year where last time we actually expanded on the portfolio game, where in the prior portfolio game people would pick a portfolio and they explained why they wanted to pick one property versus the other. Now we took it up a notch at last year's Profits in Paradise and we built out a range of projections for those portfolios for multiple years. So then people could see, okay, well, you know, your vacancy isn't always going to be just 8%. Some years it'll be zero. Some years you'll have multiple vacancies and multiple property turns. And so what happens is that range of outcomes means that if you have one property in your portfolio that it'll be really volatile. But as you start getting more properties in your portfolio, you start to get increased stability and you have an increased ability to take advantage. And you know, it's something that we always talk about, but it's something that's really hard to quantify just because the numbers get really complex. So what we're doing is we're increasing the level of sophistication in our models. And in fact we're even going to be incorporating the idea of becoming an empowered investor to be able to say, okay, you know, as an empowered investor, I've decided that I am going to select a small number of markets or, you know, a few markets and then I'm going to self manage my properties there. I'm going to build relationships with some maintenance people, potentially with somebody who might be a property management, but would help with keys as opposed to doing full property management and be able to have better control over repairs and maintenance, better control over tenant selection, and then also be able to, you know, help keep the repair costs down and most importantly, just keep the quality of the tenants up.

Keep the repair costs down and the quality of the tenants higher.

Right, exactly.

And see this by the way, when we talk about becoming an empowered investor, I think this is one of the really the hidden benefits. Everybody sees right away that if you decide to self manage, you're going to save, you know, twelve hundred dollars a year, for example, on direct management for fees, but you're also going to save on repair costs, tenant turn costs, and you're going to, I believe, have fewer tenant turns because you're going to overall have better quality tenants that are going to stay longer and they're going to have a personal relationship with you. So these things are hard to quantify, aren't they?

They are, but you know, because I'm actually going through this right now with some of my properties. But the tenant that gets placed in your property is the single most important factor that determines your overall performance. Because if you have somebody who goes in, who gets put in a property and then goes delinquent on the second or third month, you're going to lose tons of money on that tenant. On the other hand, if you have somebody who takes reasonable care of the property, stays for 3, 5, 10, 15 years, that tenant is literally a gold mine. And so what you can do when you are self managing is you can be very specific with your screening credit criteria. You can be a lot more accurate in pinpointing the tenants that are going to have a better opportunity to really stay with you a long Time. Because the problem that most property managers have is that they just have to fill a lot of vacancies so they don't have the option of being as picky.

They're not being careful. Nobody manages, nobody keeps the shop. Like the shopkeeper.

Exactly. And so that's one of the factors that we're going to start incorporating into our wealth building simulation this year is to say, hey, you don't have to decide that you want to self manage, but if you do decide you want to self manage, how is that going to impact the next 10 to 20 years of your investing career?

Okay, good point, good point. So what else are we going to do in the simulation?

Basically what we're going to do is everybody's going to get together in teams, select their portfolio, select how they want to build it. So in other words, you select, you know, do they want to self manage a few other factors, and then we're going to run the portfolio out for a few years and see how each of the teams perform. Because all the properties will be identical. You know, the performance for say, property A will be the same for every team, but the teams will perform differently depending on how they arrange their financing, based on how they whether they decided to self manage, based on how many markets they diversified into, based on how much leverage they decided they wanted to take on. And then after, you know, after probably about five to ten years of simulation, we're going to give the teams the chance to execute a refi till you die cycle and extract the equity from their properties to buy more properties. Because we've always been saying we want to quantify how refi till you die really works.

Doug, I want to add to that idea because we could do refi till you die. We could do the big boring idea which we talked about at Meet the Masters, which is simply amortization, not a big secret. We could do 1031 exchange, but we could also do the new vehicle. Now, it's not a new vehicle, but it's the first time I'm using it and I'm really quite excited about this. And this is a way it might actually be better than a 1031 exchange, which is hard to beat. So you do the simulation, which by the way, doesn't take 10 years. It's just an example. It's an example of your portfolio over 10 years. And then I want to interject and add to that at Profits in Paradise. The way you can use this vehicle that I'm really interested in right now.

Okay, well, we can absolutely do that. Because the whole idea behind our wealth building simulation is every year to make it better and more realistic.

Right. And it's more in depth each time because, you know, when we first did this at a JHU event, Jason Hard University one day conference in San Diego, it was a pretty simple game, but it was a good exercise. People really liked it. And this will be Saturday at lunch. People will do this. We'll break everybody up into teams. They'll work together. It's a nice way to meet some new friends, to learn from some other investors and to really just have a good time and see how the portfolio will perform. Anything else you want to say about it? Done.

One aspect that a lot of teams did last year without being asked, that I'm going to be including this year, is for each team to come up with a name for themselves. I think Team Maui Wowee is still my favorite.

Right. That was from last year when we were in Hawaii. We weren't in Maui until afterwards, but still. Oh, no, we went to Kauai. Sorry, not Maui. We weren't in Maui at all. But that was a funny name.

A full year later, Maui Wowee still sticks in my mind, which is a.

Lesson for all of these cannabis entrepreneurs. If you want to be taken seriously as medicine, you got to name your products in a little more clinical fashion than Purple Haze and Maui Wowie. I saw a magazine article about that, I think in Forbes, and I thought, that's pretty funny, you know?

Yeah, totally good stuff.

Okay, so, yeah, this is going to be a lot of fun. So before lunch, you'll set up the game, you'll give out the handouts to people and then they'll play it at lunch, come back afterwards, we'll do a debrief of the whole thing. And that was really fun how you did it in Hawaii last year. I really enjoyed that.

Absolutely. Because, yeah, it, you know, it started out as a friendly competition and turned into a horse race. I'm pretty sure I even heard some trash talking in the back of the room.

And you were very funny presenting that horse race too, by the way. You could, you know, if you ever want a plan B career and you don't want to do investment counseling anymore, maybe. Horse race announcer.

It may be. You never know.

Who knows?

How do you know? I don't want to be an investment counselor so I can be a horse race announcer.

You never know. You never know.

You never know.

Well, Doug, we'll look forward to seeing you at Profits in Paradise. And by the way, folks, if you haven't Done So already get your tickets at Jason Hartman live.com that's Jason Hartmanlive.com and we'll look forward to seeing you in Orlando the end of October. So you're absolutely going to love that game that we are going to play on Saturday. You know, you can learn a lot through games. That's why so many educators have really gotten into gamification and that's what we're doing. Last year at Profits in Paradise when we were in Hawaii, Doug ran an excellent game for all of our attendees. And this year in Orlando, we're going to do the same thing. So get your tickets for that@jason hartmanlive.com Jason hartmanlive.com Thanks to all of those who have already signed up. We look forward to seeing you. Adam, you got a featured property for us?

I do. We have one that came available last week I believe in Baltimore, Maryland. Now this is one of the higher priced properties you'll see on the website. In most cases it's a little over $200,000. It's $206,500 but it rents for 1950 which is just below the 1%. However, because of the lowish property taxes for the price and the 6% management fee, you're able to cash flow $433 a month projected in this you're looking at and this is with the 25% down and 4¼% interest rate. Now this, this team, one of the reasons I like this general area is it offers a wide range of prices. There's homes as low as $90,000 going up to the $200,000 mark. And they do a really great package. You know, when they do the rehab.

Oh yeah, their rehabs are fantastic.

They're really this has a new architectural shingle roof with a lifetime warranty, oversized gutters, you know, new siding, new exterior doors, kitchen refurbished with quartz counters and slate appliances. They renovated the two bathrooms. I mean it's got a full package for your $200,000 for your investment property.

Good stuff, good stuff. So that fee that I was talking about is what everybody hears about. They call it the resort fee, this scammy little fee that is on top of the hotel price. Just saw a news article about it that Congress is looking into these resort fees, right? They call it, you've encountered them sometimes they call it destination fee. When we were in New York City last year for a Venture alliance meeting, I stayed several extra days there at a different hotel. Not where our Venture alliance mastermind meeting was. A few of Us were there, and they called it the residence fee. So I assume that after paying your $250 a night for that hotel, the extra $25 per night residence fee, whatever that means. So does it mean if you. If you're unwilling to pay the residence fee, that you don't get to stay in the hotel? What is the point? The destination fee? The resort fee? The residence fee? Well, you'll be happy to know I think these fees are crap. And so in our deal with our host hotel, which is gorgeous, by the way, it's a. It is a resort for profits in paradise coming up in late October. I negotiated that on your behalf. Their normal resort fee is $35 a night. Yes, $35 a night. And it really is a beautiful resort. I mean, wait till you see it. It's. It's incredible. I've stayed there a few times, and I negotiated that down to 10 bucks. They'll only nickel and dime you for 10 bucks rather than 35. Our room block is a great discount of 159 per night.

I love this where hotels are saying that they need the fees to cover services like bottled water, WI Fi, and those kind of things. So can you imagine how much a bottle of water or WI Fi would cost if they weren't making you pay $35 a day?

Well. Oh, by the way, I should tell you, I just got back from New York. I was there for a conference last week, a very mediocre conference, which, by the way, I paid $2,000 for the ticket. I couldn't believe how sort of disorganized it was and how nothing was included except there were a couple of lunches included. But when they served you lunch, it was literally like an appetizer. It was like this tiny little piece of meat and a tiny little piece of vegetable. It was. It was an appetizer. Terrible $2,000 conference this was. But one of the nights I met up with a friend of mine, and we went to the Baccarat Room, and I didn't know that. Baccarat? Yes, that's the Crystal Company, if I'm saying the name right, you know, the company that makes all these beautiful crystal. They have a condo project and a beautiful restaurant bar area there. And so we went there. And the drinks, Adam. Well, you probably saw it on my Facebook, so that's a spoiler. But the drinks, guess how much they were. If you didn't see my Facebook post. For a single drink. One drink. An alcoholic drink, but just a drink. How much was one drink? What do you think the price range was.

I would say between 20 and $30. Okay, well, I didn't see it on your Facebook page, but that would be my guess if you were somewhere fancy.

So the drinks started at $29.

Cool.

For one drink. 29 bucks. Yeah, but they had many drinks that were more Expensive. Up to $450 for not a bottle. One drink. But I tell you, it was. It was beautiful. It was a really nice experience.

You can stock your own Bar for $450.

I know. Hey, listen, if you go to Costco, you could. Well, you could almost. Well, you could stock your bar for the price of two of those drinks at 29 each. For 60 bucks, you could have a kind of a semi stock bar from Costco. So there you go. Who says there's no inflation, huh? But, yeah, so create wealth and live the life of luxury. And you can do some things like that and not worry about the cost, but still comment on how ridiculous they are. So good stuff. Okay. Hey, we'll be back tomorrow with another episode. Go to jasonhartman.com to take a look at the properties like the one Adam talked about, or to register for our upcoming Profits in Paradise event. And we'll look forward to seeing you there. And until tomorrow, happy investing. Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out the show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest opinions are their own, and if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to itunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.