1860 FBF: Compared To What? Buyers Markets, Sellers Markets & Brokers Markets, Demographics & Pensions

Today we have Flashback Friday and a 10th episode show. All of you regular listeners know that every 10th episode we do a topic of general interest. It always seems to relate to finance and success in life and success with our portfolios. But the topics are More General. Every 10th episode show and today we combine a flashback Friday with a 10th episode. This show is produced by the Hartman Media Company. For more information and links to all our great podcasts, visit hartmanmedia.com.

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 the Creating wealth show. This is your host, Jason Hartman with episode number 8, 8 5, 885. Thank you so much for joining me today and greetings from Miami, Florida. Yes, Miami, Florida. I know, I know what you're thinking. Am I in knee deep water? No, I'm not. Hurricane Irma rolled through and I'm kind of been surveying informally what's been going on here. I've been talking to people since I arrived earlier today and it seems pretty normal over here. I'm in Coral Gables, which is a swanky little area. I gotta say though, Miami is definitely not my favorite city. It never has been. Every, every time I come here, I wonder why I came back. I'm just not a big fan of Miami. I'm not a big fan of New Orleans, not a big fan of Portland. I know all of those cities have their virtues and they have their nice areas and their bad areas like any city. Hey look, I live in Las Vegas. I, I'm not a big fan of Las Vegas. So, so there, just to be fair. And I'm from the socialist Republic of California and I'm definitely not a big fan of California. So just call me a grumpy old pessimist. I'm not a fan of anything. Nothing pleases me anymore. No, I'm just kidding. I think it's an amazing time to be alive. I am a total optimist, but I like to be realistic and a little snarky. And I gotta tell you, I'm excited today. Yesterday, I just found out that those disgusting criminal scumbags at Wells Fargo settled the class action lawsuit against them, or one of the class action lawsuits against them. I'm not sure how many there are. Maybe it's the only one, but I'm assuming there's more than one. I think it's a fairly safe assumption. I could be wrong on that, but, yeah, they settled it for $142 million for ripping off America. Now, if you ask me, I can see why they settled that. They probably thought that was a pretty good deal. If can rip off a whole country and screw everybody with these duplicate accounts and a bunch of other overfeeing, disgusting, crooked activities. You know, $142 million is pretty cheap. You get off pretty easy for 142 million bucks. And, hey, most of the lawyers get most of the money anyway. I'm sure. It's just unbelievable. It is unbelievable, the times in which we live. It really is.

Here's a theory I'm working on. Okay, maybe I'm crazy, but the last couple times I went to Europe and I. Both times I went to France, I've been to France many, many times. And the very first time I was in France, I was maybe 22 years old. And I've just noticed over the years that the French people, the good old French in France have gotten a little nicer. They're a little more pleasant. And here's my theory. You ready for this? Here's the theory. And it ties into what I was just about to tell you. My theory is that the French have become nicer because of TripAdvisor and Yelp. I don't know. Do they have Yelp in France? Well, even if they don't, they have review sites. I think they have Yelp. They have Google reviews. And I think they've become more pleasant due to the fact that people can go online and talk about their rudeness, the rudeness that they were famous for. Right? I mean, it's like it's a cliche, rude French people, right? It's. It's almost charming in a way. It's. It's like when Kathleen Petticord was on my. My Jetsetter show and we were talking about different countries around the world to think about investing in and so forth. And. And when we came to Argentina, I said, kathleen, what about Argentina? And she says, argentina is so corrupt, it's part of its charm.

I know you can't make this stuff up. It's pretty funny, huh? But yeah, you know what I was going to say, it is a shame that we live in a time when the way you have to get the attention of these big disgusting criminal companies that just roll over people is you have to take to. You have to take to the Internet. Be careful doing that because you can get sued. I've been sued for it twice. You know, on my podcast, outing these. These various crooks and so forth. Well, I use that word very loosely. I don't know that they're actually criminals, but I think they ripped me off. And hey, in my eyes, that's a crime. But that's the only way you can get their attention nowadays. I'll give you an example. Had a less than normally miserable flight over here to Miami on American Airlines. My cousin works for American Airlines. I think they suck. I can't stand American Airlines. But, you know, sometimes you just gotta fly them because that's the flight that works out. And the last time I was going to come to again Miami on American Airlines, of course they screwed up the whole thing. Canceled the flight, didn't do anything for me. They have left me stranded repeatedly. Just a pathetic company. But the last time I got some justice because I went on Twitter and I shamed them and their PR department saw my shaming and they gave me a refund. Now, I should have gotten a lot more than a refund, but hey, I'll settle for that. Okay, so, yeah, that's. That's the world in which we live. But at least nowadays the little guy can speak out. And if, if someone is taking advantage of you, you have some leverage. Be careful using it, okay? Be careful. Very careful using it. But there is some leverage. The other leverage, since we're going down the negative road here to start the show, by the way, I got some other stuff to talk about, of course, but the other point of leverage you have, you know, say for example, a property manager wrongs you in some way. You know, the easy thing you have is you have the government. Now, they may not pay attention. You know, the old rule is what? The squeaky wheel gets the grease, right? That's the old saying. The squeaky wheel gets the grease. So if you, if you cause enough of a fuss and enough people are complaining, hey, they might pay attention at the good old government. Today we have flashback Friday and a 10th episode show. All of you regular listeners know that every 10th episode we do a topic of general interest. It always seems to relate to finance and success in life and success with our portfolios. But the topics are More General. Every 10th episode show, and today we combine a flashback Friday with a 10th episode. So in every state and also at the federal level, you have some various regulatory agencies that you can complain to, and they all have complaint forms and you can go online and just fill out a little complaint form and you know, It'll take you 20 minutes, 15 minutes, maybe 10 minutes. Just write what happened and usually click the mouse and it goes in. It's free. You don't have to hire a lawyer. The problem with lawyers, and this has been my experience with good old legal system, is that first you get wronged by the party that took advantage of you, and then you go hire a lawyer to go pursue justice and then your lawyer screws you too. Yeah, that's about the state of affairs we live in. Right. Most of the time it seems like where you get wronged by the bad guy and then you try and get justice from the lawyer helping you. You hire a lawyer, you spend a fortune, they over bill you and they take advantage of you and they usually just end up selling you down the river. That's usually not a good alternative. Okay, home sales. I don't know. See, I get off on these little tangents. I want to talk to you about the three types of markets today. I want to talk to you about home sales, demographics, pensions, because we talked recently with Nick Giambruno about the pension crisis and. And you think it's bad in the United States. Just wait.

That's what I've been telling you for years now. The US may be ugly and it may have tons of problems, but compared to what? Compared to what? I love it when that left wing hypocrite asshole. Oh, did I just say that? Yeah, I guess I did. Ted Danson years ago came out and he said, and Dennis Prager put him right in his place. I love Dennis Prager, by the way. He's awesome. Prageru. Check out their videos. They're great. In fact, if you have millennial age kids, make sure your kids subscribe to the PragerU YouTube channel. It is fantastic. Short little videos, very concise, done by lots of famous celebrities. Adam Carolla is one of them. And they explain various issues and topics and fiscal policy and monetary policy and social issues and all kinds of interesting things. So Prageru, I'd highly recommend it. I have no stake in that recommendation except the fact that I donate money to them and I think they're Doing a great job. Yet Ted Danson, he, in the 90s, you know, he said, oh, America's a racist nation. Dennis Prager says, okay, Ted, compared to what? Compared to what? Compared to what other country is America so racist? Right? And I mean, it's a good question. That's the question we always have to ask ourselves. When I talk about real estate investing and I talk about how to analyze, analyze a real estate deal, you know, I talk about the ratios and these numbers and it always is a compared to what question. I absolutely hate it when someone cites statistics and they'll say, well, you know, 30 million people this and that, and they don't say something based on a per capita. Right. They don't say based on a percentage or a ratio or a comparison. Maybe a year over year comparison. When you're looking at a real estate deal, you know, it's all about ratios. I mean, the simplest part of it, the first metric we use as real estate investors, the rent to value ratio. Right. It is so simple. Yet you will get people, sophisticated people. It blows my mind. They've got, they've got a bachelor's degree from a great school, they've got an MBA from another great school, maybe Wharton. And they can't get their head around the idea that, you know, because you get $4,000 a month on your home in Los Angeles, California, that's worth $900,000 or a million dollars, and you only get $1,000 a month on that house in Indianapolis and another 1,000 on the house in Memphis that you own. And There you got 2,000 and you only invested 200,000 versus investing 800,000 or 900,000 or a million dollars in the other one that only yields 4,000. It's all about the ratio. The ratio, that's the thing. The ratio is key. Okay, so let's look at a year over year. Okay? Now there are some predictions coming out here from the Mortgage Bankers association and from our friends, our government subsidized lenders, thank you very much, at Fannie Mae and Freddie Mac. And they are year over year comparison home sales this year versus next year, 2018's prediction. Now here is the interesting thing. Before I tell you these numbers, I want you to consider number one, there are three types of markets. No, I'm not going to say cyclical, linear and hybrid. That's what you thought I was going to say. No, this is different. When it comes to home sales, I'm going to tell you that these are the three types of markets. Buyer's market, seller's market and a broker's market. Yes, think about us brokers. Basically, we are a broker, although a non traditional one. We are a referral network. But we do, of course, maintain a broker's license in my home state, the Socialist Republic of California. And in so doing, I have noticed over the years that the typical market that everybody calls a quote unquote good market is a seller's market. And what everybody calls a bad market is. Is a buyer's market. So of course, when it's a seller's market, what we mean by that typically is that sellers are in control. They are able to command high prices, and they are able to dictate the terms of the transaction. And that's a market where inventory is low, but affordability is high. Now, here is the thing we have to overcome. Well, there are many things we have to overcome, but one of the things we have to overcome as real estate investors is we have to overcome our own ego. And in a seller's market, when you're trying to buy, your ego will get bruised. Okay, get ready for your ego to be bruised. Shocked me many years ago, a friend of mine, Rob, who was really involved, by the way, with, you know, helping me get investors and so forth for a while. And he was a mortgage, Mortgage broker. And Rob was a real exotic car aficionado. He used to buy and sell Ferraris and Lamborghinis and all these crazy exotic cars that, hey, I wouldn't touch those things if I were you. But anyway, he was really into them. Now listen, I would be into cars like that too, if you could actually use them the way they were designed to be used, but you can't without going to jail or at least getting a million traffic tickets and paying exorbitant insurance rates. I like a thrill just as much as the next person. You know, going fast can be fun. No question about it. And if you have a lemon Tesla like I do, a piece of junk like my Tesla Model X, then you can still go fast. But the question is, will the doors actually open? They probably won't. Anyway, that's another topic. So Rob surprised me with something he taught me about the exotic car business, and it applies to real estate. Here it is. You ready?

It is very difficult, no matter how much money you have to buy a Ferrari from. Ferrari. Now you can buy one on the secondary market. You can buy used Ferrari. That's not so hard. But if you want to buy one of their cars.

They'Re not just gonna easily sell you one. They're pretty picky and snobby, at least they used to be when Rob was engaged in, you know, buying and selling Ferraris all the time. And that kind of surprised me because as consumers, especially American consumers, in America, service is pretty good. Well, unless you're in Miami, then it's not so good. But.

You know, compared to, say, Europe or most many other places around the world. And listen, I've been to 81 countries, and some of them I've been to many times. I'm going back to Jamaica for the second time tomorrow. I'll be in Jamaica for four days. By the way, do you remember this is my second trip to Jamaica. Do you remember the. Remember the podcast I did in Jamaica before? Yes, I did Live from Jamaica. And I had my butler, our butler. We had a big house with a whole bunch of us, and I put the butler on the podcast. And I asked him, why is everybody here so happy? And he says, well, man, you know, I think it's the marijuana.

I couldn't believe he said that on my show. Go back and listen to that old episode. It was pretty funny. I just about hit the floor when he said that. And we aired it because, hey, it was funny. Okay, so Ferrari doesn't want to sell anybody a car, no matter how much money they have. And not exactly, but you get the idea they're kind of picky about who buys their cars, in essence. And the same is true in a seller's market. As consumers, and especially as American consumers, we're kind of spoiled because service is pretty good and capitalism works really well. I mean, better than anything else, that's for sure. Even though there are some that want to go back to the old way, when people waited in line for 62 hours to get a pair of shoes, and by the time you got your pair of shoes, they didn't have any more in your size. And this is exactly what my guide in Romania told me about how life used to be under communism and many, many people. Because I'm quite morbidly fascinated with communism and the Eastern Bloc and Russia. I've been to many of those countries many times. And every time I have these conversations with people, I just. I get back to the US Of A. And I kiss the ground, and I think how lucky I am. And guess what? There's 320 million of you other people that are so lucky as well. Anyway, okay? And not just the US if you live in any Westernized country, you get the idea, right? It's just the US Is just a proxy for the concept of capitalism. We've done it pretty well over here. But hey, there's a lot of regression, unfortunately. So nowadays, you know, you have money in your pocket, it's burning a hole in your pocket, you're ready to buy properties, and you go out there and it's like, wow, just because I have a bunch of money doesn't mean I can really buy a property. I gotta kind of earn it. Yeah, you actually do a little bit. So that's one of the things, you know. And listen, if you want to overpay or you want to buy crappy properties, heck, you can do that all day with your money and make bad investments. But if you want to buy good quality properties at good prices, then, you know, you might get your ego bruised a little bit. And I remember when I was in the traditional real estate business in Irvine and Newport Beach, California, and those areas around Orange County, California, when we were in sellers markets, I mean, it was amazing. The hoops people would jump through to try and buy a house. You, you couldn't believe it. They would, they would like, find a house they'd like, and they would kind of stalk this, the cellar, and they would drop by with their family and say, please sell us your home. And they'd write them letters and put a picture of their family in the mail with the letter and send it to the seller. And it was unbelievable. And that's a little bit like what we have now. So it's fair to ask. The fair question to ask is, is this the sign of a bubble?

Fair question.

In the cyclical markets, absolutely it is the sign of a bubble. We are in bubbleville if you ask me. Now, I could be wrong, but I don't think I'm wrong. The massively overinflated markets are just way beyond any point of reason. But just like the US and other governments around the world, I mean, look at Japan. The highest debt level in the civilized world. How long can they kick the can down the road? Well, they can probably do it for a while maybe. I mean, you know, Everybody says the U.S. is going to crash, the dollar is going to collapse. I mean, I'm so sick of reading that stuff. I was immersed in some of these ideas for many, many years. And then one day I kind of woke up and I realized how mistaken these belief systems are. Why? Because of the question I open the show with. Compared to what? Hey, Ted Danson. Compared to what? Hey, you know, Peter Schiff, when you say the dollar is going to collapse. Compared to what? Compared to what? Compared to what? Other country Is the US Doing so poorly? You know, that is the question. Now, Trump, of course, gave his first speech to the UN today, and I don't know, you know, that's a little, it's getting pretty frothy over in North Korea, shall we say. But maybe, maybe love him or hate him, maybe Trump is saying what needs to be said and there's kind of a business plan to the idea of war. And trust me when I say this, I hate war. War is hell, thank God. I've never actually been in a war, but I hate the whole idea of war. The idea that war stimulates the economy is the most absurd idea you ever. I mean, that's just a completely absurd idea. Why is it absurd? Well, because it destroys things. It's fake production, it's fake productivity, it's fake work. You know, it's kind of like fake news. So war does not stimulate the economy. War destroys things and creates a lot of government debt or inflation to rebuild things. And of course it has this terrible byproduct of killing people, which isn't so good either. So, yeah, I hate war. And it seems like every president that gets in that office, as soon as they get in, they turn they somehow.

By the powers that be, maybe someone you know from the Bilderberg Group, on the first day in the Oval Office, comes in there and says, we support the military industrial complex, we support globalism, and you're going to be involved in this war in the Middle east and maybe that one in North Korea. But, you know, it's kind of a business plan. It's kind of the Reagan esque business plan of a lot of pain to not have a lot of pain in the future. And you know what I mean by that is obviously bankrupt the Soviet Union by outspending them basically and talking tough, which Reagan did. And I believe in hindsight, that was a very good business plan. I'm not so sure it'll work out that way with Iran or North Korea or the Muslim radicals, I don't know. But we, we shall see. We shall see. Okay, so a buyer's market, a seller's market and a broker's market. So we would be in a seller's market now. But the thing you've got to ask is, could there be a bubble? Not in the linear markets. I, I really don't think so. I mean, call me overly optimistic if you're a doom and gloomer. All the doom and gloomers seem to be wrong all the time. But maybe you're one of those listening and you Think I'm just too optimistic. Well, well, fair enough. You can think that. But the lending has been conservative. The banks are not out of control this time around. People have to really qualify for loans. They have to put real money down. Of course, there's a small margin of fraud going on in the mortgage world. There always will be, but it's nothing compared to what was going on before the Great Recession. It's nothing. And in the linear markets, prices aren't even up that much. I mean, they're not, they're not that high. Okay? That is another huge component of it. Okay? So if you are waiting for the crash in the linear, conservative markets, you might be waiting a long, long time. And here's the problem with waiting. See, you might think in a very simplistic fashion that if you wait and in two years you just keep your powder dry and you keep your money in the bank, where you are surely losing money with taxes and inflation, you are definitely, positively losing money in the bank. Right? You keep your money in the bank and then in two years you think the market will crash and that house that you could buy today for $120,000 will come down in value and you'll buy it for $20,000 discount and you'll only pay 100,000 for it. Or maybe the discount will even be bigger. Maybe the discount will be 30, 30,000. So in two years, you know, if your prediction is there will be a crash next year and then it'll take another year for the prices to, you know, decline and you can buy it for 30,000 less than you can today. Well, what would you have missed? Well, if you go to jasonhartman.com and you look on the properties page and you look at the performas on there and you look at the largely realistic projections. But hey, if you don't like our projections, then, or I should say our local market specialist projections, then subscribe to PropertyTracker and do your own projections. That will make you a good investor. And hey, for $27 a month, you can't beat the price, right? You can do that@propertytracker.com or right through our website at Jason hartman.com right on the front page. And so you can subscribe and you can play with the numbers you yourself. But look.

The numbers will show you that you're probably going to get somewhere in the ballpark of 20 to 35% annual return on investment overall, all things considered. Now, granted, the future ain't what it used to be, as good old Yogi Berra says. And Everything's subject to change and nobody knows what will happen. But I know for sure that for the people out there who think their ego is bruised and they want to wait and they just think the sellers are too greedy and there's going to be a crash and they're going to get their comeuppance and, you know, at some point they probably will. There are cycles in the economy, there's no question about that. No question at all. I wouldn't deny that for a New York minute. There will be cycles. But the problem is while you wait for the cycle, number one, you could be wrong. And market timers are notoriously wrong, wrong, wrong. But let's say you're right. Let's say you're right. You're going to lose the return on investment in the meantime while you wait. And if you're right, are you going to be perfectly right? Are you going to time it exactly right, or are you just going to get it partially right? Are you going to be, Are you going to buy right at the bottom? And if you buy right at the bottom, how did it get to the bottom? Did it get to the bottom because interest rates went up and the mortgage cost got a lot higher? Remember what I said, when it's a seller's market, it means that affordability is high. That's why it's a seller's market. See, step back, step back from the canvas and look at the big picture, right? Don't look at the brush strokes, look at the big picture. Why did, why did the prices get low? Well, they got low usually because the affordability was bad and they had to get low to make affordability better. See, you've heard of the concept in, I remember my college biology class. The concept of what? Homeostasis, right? That means that the body is always trying to adjust itself to find an equilibrium, right? And certainly the market does that too. That's how supply and demand and free markets work. They are constantly, constantly trying to find in equilibrium, they're constantly trying to find what is called price discovery. Price discovery, very key phrase. And Price discovery now says the prices should be higher. And when the interest rates are higher, not low like they are now, then price discovery will probably say that the prices need to go low, lower. In fact. Remember, what's the equation for that? You remember, I've talked about it before, it's 1% equals 10%. So approximately 1% in mortgage interest rate will make a 10% difference in price. So in that example we just talked about, if that $120,000 house goes to 100,000, then that means the likelihood is the interest rate would be about 2% higher and you'd still have the same payment. You see how that works? It's interesting to look at all of this stuff. Now. Here's what that, that, yeah, this is complicated. Everything's complicated. So we'll have to talk about this on another show, but we definitely talked about it it on shows a long time ago. Because see, when you look at the interest rate versus price equation, right, that does play out in a different way as you go forward in time. See, sometimes you can get really lucky. And I'm using the word lucky with a lot of intention because I bet you're not that good. I certainly know I'm not. And I'm probably more experienced than most of you listening because I've been doing this a long, long time and thousands of deals and just lots of, lots of experience, right? And so.

What happens is as you go forward, if you get really lucky, you will buy at the bottom of the market in price. You will go and either.

Take a high interest rate mortgage, which is probably why the prices are low. That's usually the reason, right? And then the market will turn around and it'll turn around because they're lowering interest rates and money supply eases up and a lot of money flows into the market and the rates go down and you refinance. And so guess what, you only tolerated that high interest rate mortgage for maybe a year or two and then you got to refinance it later and your rental property performs better and better. So going forward it does change the dynamic and we can. That's a lot of analysis to really do that, to really delve into it and understand that. But I got to finish on these couple of topics. First of all, see how long it takes me to get to the point sometimes. Okay, I apologize. Total single family home sales. Remember our three friends at the Mortgage Bankers Association, Fannie Mae, Freddie Mac. Their predictions this year? They predict we will have 6.2 million single family homes sold next year. Their prediction is. And they're different, interestingly for each of them. Freddie Mac says we will have 6.3 million sales next year and Fannie Mae says we have 6.5 million. So Freddie Mac says just 6.3. We're going to move up a little bit. Fannie Mae says we're going to move up to 6.5 million sales. But the Mortgage Bankers association is the most optimistic and they should know because they're the ones that pushing the loans through they say that next year we will do 6.8 million home sales. Now, one of the points I really wanted to make when I started rambling on and on about this is this point. Home sales are not necessarily a sign of market health.

Why, why do I say that? Here's why I say that sometimes in. Now remember, we have to make the assumption that health means seller's market, which I don't think it means that, but that's what everybody thinks. So I'm just going to go with the crowd, okay? And I'm going to assume that a seller's market is a good market and a seller's market is a healthy market. Now, I don't actually believe that. I think the healthiest market is the third choice, the broker's market. No, I'm not being self serving, even though I am not immune to serving thyself. And neither are you. None of us are. And that's why capitalism works so well. And when we all come to terms with the fact in life that we all have needs and wants and we're going to try and satisfy our own, you know, what we'll usually do, not always, but most of the time, we will work hard and we will produce value in the world and make the world a better place and create progress. And that's a good thing. And that's why capitalism is a good thing. So why is the broker's market in, in your host humble opinion, the healthiest market? Because the broker's market is more even keel. Remember several episodes I said that. I hope I didn't regret saying this. I said that I wish the market would slow down.

Wow. A startling thing for someone in my position to say. But the reason I said that is because it is, you know, it's hard to operate in these low inventory markets. So what does that mean? Tie that into what I was just saying. Why is home, why the number of home, home sales? Why does that number not necessarily indicate market health? The reason it doesn't necessarily indicate market health is because sometimes the market may be so, you know, so powerfully moving, it may be such a powerful seller's market that inventory is reduced to such low levels that home sales actually decline, okay? So a seller's market, a so called healthy market, does not necessarily mean more home sales. In all of the statistics you have to tease out, you have to tease things out and really understand the dynamics. And this is something that people like Bernie Sanders just will never understand, okay? Because they don't know how things work in the real world, okay? Sorry, Bernie, I'm, I think you probably mean well, but you're clueless, okay? So you have to tease out what things really, really mean, all things considered in here. And so in the market dynamic where you have a very strong seller's market, it first, first you will have very strong home sales and then you will have a point at which the inventory gets so gobbled up and so picked over that home sales actually decline, but prices are pushed up even further to further and further heights. Certainly this, the poster child for this would be.

Drumroll, please. The poster child would be that 7 mile by 7 mile, little bit of a peninsula. Yes, the Socialist Republic of San Francisco. That would be a perfect example of this. Astronomical prices because of low, low inventory. But that doesn't mean it's the place to invest. Okay, let me talk about pensions and demographics for a moment. So we've talked about these subjects, subjects many times over the years. But before we go, I just want to kind of wrap up with this and you know, before I do that, how about a little housekeeping? Meet the masters of income property. Coming up, we've got John Burns. John Burns Real Estate Consulting. I quote his stuff all the time on the show. He is speaking there. We got a lot of other great speakers we are working on that will be in La Jolla, California in January. Jason hartman.com/events. Get your tickets, early bird prices. Venture Alliance Mastermind Group in Palm Springs, California coming up in October. You can go to Jason hartman.com talk to your investment counselor or go to venturealliancemastermind.com for more information on that. And you can always come as a guest to our Venture Alliance Mastermind events on a one time basis. And so check that out. And that, that's just a great group. I love our Venture alliance retreat weekends. Those are awesome. Once a quarter we do them and they are, they're just, they're just one of my favorite things to do. Okay, demographics and pensions. So last time on the show we talked about how messed up some of these states and municipalities are around the US with the pension crisis. And that is absolutely true. But the famous question is compared to what? Compared to what? Well, in the U.S. overall pension liability is somewhere around 6% of GDP in Germany and France. And don't quote me exactly on these numbers because I was listening to them in an audio book by Mark Stein. Brilliant guy.

So I was listening to one of his audiobooks today and he was talking about how in Germany and France and in Europe at large, a lot of the EU countries, the Pension liabilities are about, I mean, are you sitting down? This is mind boggling. 15 to 17%.

And in Greece, the poster child for socialist over entitled lazy economic disaster.

You ready for this one? 24%. Now here is where it ties in, obviously with demographics. You've got the women in Portland who thinks she's so enlightened and she's doing such a favor for the world by not having children because who would want to bring kids into this ugly world we live in? She says, and it's bad for the environment. Never mind that Malthus has been wrong for like what, two, three centuries now. You know, this Malthusian stupidity, okay? People are the wrong resource. People are not the problem. Admittedly some people are the problem, but most, a lot of them are the resource too. You know, they solve the problems of pollution and environmental problems and so on and so forth, right? So if you look at the birth rates, it is shockingly tragic. In Europe, in most of Europe, it's somewhere around 1.3 kids per women, okay? Per female, 1.3, which is extinction. Extinction is forever. As the environment.

Environmentalists like to say extinction is forever. Of course, you know, it's a huge problem when it's a lizard or you know, a bug or something like that. But when it's a human, you know, who cares, right? In the U.S. i think we're at about 2.1 per woman. Okay, so much healthier birth rates in the US and why is that important? Why does it matter? Okay, well it matters because who is going to support the older people? This pension problem, if you simply looked at the percentages, you would say, oh yeah, well the U.S. you know, we got a bit of a problem, but Germany has France. Oh, that's really bad. And Greece, that's a disaster. But you know what makes it more of a disaster? There's no kids to, to fix it there. There's no young people to work and pay into the system. I mean, and even if there are young people, the whole lazy over entitled European mentality. And look, I was born in Europe, I get to, I get a little bit of latitude on complaining about my home continent, okay? In Spain the youth unemployment rate under 30 years old is like 56%. Okay? I mean the author Mark was joking in the book and I don't know if he was joking. It's not really a joke. He's probably right on. Maybe he was using a little artistic license here, but he talked about how the, the typical ideal is you live at home and with your parents and you, you Hang around in and out of college until you're about 38 years old and then, you know, you demand retirement at 47. You spend six weeks per year on the French Riviera. You march in in riots to promote 28 hour work weeks. Folks, at some point someone has to actually create value in the, in the world economy and they got to go to work and they got to pay into the system. So you know, when, when, when, when you take these pension numbers and you look at them, yeah, they're bad, but they are tragic, pathetic. That's why I have said over and over and I hate to say it, Europe is over, it's over. I mean it's all it takes is a couple of decades and then you'll see how top heavy these economies get. Yeah, their pension burden as a percentage of high is high. But the biggest problem they have is they have no birth rate. They have extinction level birth rates. No one to pay into the system. And if, if the young people don't come in and they don't pay into the system to support the older people, it's, it's just like we've got here. I mean, look at the demographic in the US right? Not nearly as problematic. Much, much better in the U.S. but still, you know, definitely some problems. Right? So we have the baby boomers and they were born between, I can't remember the years now, but anyway, you get the idea, you know what a baby boomer is? They're about typical baby boomers, about what, 55 years old is about the youngest baby boomer nowadays. And then they, they go up to about, I don't know, 68 or 70 or something like that. And then you've got Gen X, you've got my generation, right, this tiny little demographic cohort. We're really small generation. So I'm kind of my, my little tiny piddly generation is out there with 35 million people or some tiny amount baby boomers, 76 million. Big huge generation. I, I gotta think how fun like life must have been for the baby boomers who sort of went through the like the 60s and there were so many young people around. And for me it wasn't like that at all. It was like I was in this lost generation, Gen X, it sort of was absent largely. And then the big generation behind them, the millennial generation we've talked about extensively, you're probably sick of hearing about it on my show. Show. Well, that's about 80 million Americans. So that's a huge demographic cohort. That's why the us. You can criticize it all you want and say it's a mess. We spend too much money, we've got too much debt, we've got a pension crisis. And you're right. You're absolutely right. But the question is, the right question is compared to what? Compared to what? That's the right question for so many things in life. Compared to what? You know, the next time someone posts some idiotic comment on one of your social media accounts, simply ask the question, compared to what? Compared to what?

And see if that doesn't, like, blow a circuit in their. In their little brain and see what they say, compared to what? So I guess that's what I'll leave you with today. We got Flashback Friday coming up and then a couple of great new episodes next week. And we'll have some guests so you won't have to hear me ramble all the time solo like this. But I just thought I had to talk to you about a few things. So pension crisis, buyers market, sellers market, brokers market. And begging the question of the waiting concept, we covered all of that stuff, so I want to wish everybody happy investing. And we'll talk to you on the next episode.

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