In this episode of the Creating Wealth Show, host Jason Hartman and co‑host Michael break down real‑estate wealth‑building advice for three distinct investor "avatars": (1) early‑20s savers with modest cash, (2) young families juggling debt and high‑cost living, and (3) senior executives with sizable 401(k) balances but little real‑estate exposure. For the youngest group they stress aggressive saving, side‑hustles, and using wholesale deals to accumulate a down‑payment, recommending a "4321" approach of scouting four‑plexes. For the family avatar they prioritize paying off high‑interest credit‑card debt, advocate renting in expensive metros while building a portfolio in cheaper markets, and highlight geographic arbitrage and quality‑of‑life benefits of moving to lower‑cost states. For the senior executive they push getting into real‑estate now, using cash‑flow games to understand leverage, and warning against sunk‑cost fallacies that keep high earners stuck. Throughout the conversation Jason repeatedly distinguishes real‑estate as a wealth‑building tool rather than a primary income source, introducing his "perpetual motion machine" concept where income properties fund additional acquisitions. The hosts also share personal anecdotes about tax savings from moving out of California, and promote upcoming live events. The tone is conversational, enthusiastic, and persuasive, aiming to empower listeners to take concrete steps toward financial independence through real‑estate.
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In Alabama, I have a property that is being property managed. I was contacted by the maintenance director. There was an issue and I decided to try it myself. I went through thumbtack, cost me $82. Wasn't not a big issue. He coordinated with the tenant. It took me literally 20, 25 minutes. The empowerment that I felt from it was amazing. Live, obviously in Phoenix, that's what gets to be daunting is how do I find someone, right? But it worked great. It really did.
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. 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.
Alrighty, folks, we're gonna do something special in this episode. We're gonna take three or four different avatars and Jason and I are gonna break down. What would we do if this is us? But first, first we need your help. You see that cute, adorable little puppy there? We need a name. Currently, the two options are Sophie or Panda. If this was your puppy, which one would you choose? Let us know in the comments below. Are you leaning into Sophie or Panda? This ought to be fun, Jason. Let's see what the.
She looks like a panda bear.
Yeah, yeah, exactly. Well, Jason.
And we'll get some good comments here. So that's.
Yeah, I hope so. Yeah, some people are creative. They may come up with some other unique names, but I want to get into this again. We have the ORAD event coming up in less than two weeks. You're going to see you in Vegas. So thank you for that. Your session is the morning of day one, so I appreciate the fire that you're going to bring there, but I'm going to just break down a couple of examples of people who are going to be in the audience and I just love to give your thoughts. Like, hey, if this was me or my sister or whatever, this is what I'D recommend. You ready?
Sure. Let's go for it.
All right, let's just go by ages and we'll start youngest to oldest. Let's assume you're between 20 and 25. You're out of school, whatever that school is. High school or college, it doesn't matter. Whatever it is, let's say you have a job. Let's say you're making, I don't know, 50k a year and you're currently. Let's say you're living at home. Let's say you're, let's say you're living at home. What would be kind of the first two or three steps if that was you, Jason, that you would do? Going for. This is going to be fun. This is going to be exciting. So again, what would you tell?
That depends how much money, you know, Depends how much money you have. Right.
So, okay, so let's assume you got, you've already secured ten grand. Say you've tucked away ten grand. I don't know from babysitting money, I, I don't care. You've got 10 grand, you have a job, 50k living at home. Let's assume no car payment. Let's assume you're not, you don't have a thousand dollar car. Maybe let's, so let's just kind of set that up.
What about a student loan?
Let's assume new student loans. No student loans either. So minimal expenses, living at home, ten grand, early twenties. What do you do?
Possible. Possible answer for that is side hustle. A business might be the best investment. You know, of course, I'd love to say buy some rental property, but it's pretty hard to buy rental property with 10 grand.
So you're, so you're, you're, you're leading into increase income.
Yeah, yeah, increase income. That's, that's just a key thing. You know, people try to use real estate for income and it's not great at that. It's great at wealth building. But that's more complicated equation where using it as income is harder. So it doesn't produce great income. Building wealth, real estate rental, real estate income, property is the best. So I'd say, you know, put it into a business side hustle. If you can use that to increase income, that would be, that would be great. The other thing, as far as the real estate side is consider doing wholesale because, you know, you do a couple of those and you have enough money to buy your first rental property. The problem is most people that wholesale flip and do that kind of like those Quick deals. Problem they have is they spend their money, they don't invest. Right. And that's what just leads to kind of the constant treadmill in life.
Yeah. So when I think about this person, and again, I love this conversation because I'm with you, the answer that probably shocks people is neither you or I say go buy real estate. The first thing I would tell you is keep doing what you're doing. Right. So again, living at home, no debt, no crazy expenses, that $10,000 is going to compound very quickly. Right. Because if you're, if you're making 50k, you're probably net like post tax, you're probably 45k. And again, if you have almost no expenses, you probably can save two grand a month. In fact, that'd be the first thing I would do is I would find a bogey that is hard but not impossible to save. Like, I would probably, in this situation, try to stack two grand a month. So it goes from 10 to 12 to 14.
That would be pretty good.
Yeah, I would do that. And then you're absolutely right. I would find a way to lean into what we call a side hustle today. And there's just, it's never been easier to do that because again, I think you're absolutely right. And again, the beauty of this is it could be something you've had a hobby with. People don't realize, like, if you're 25, you've probably liked something for a decade and I don't care what it is. It could be Star Wars, Pokemon cars, Ford Mustangs, it doesn't matter. There's a, there's a world out there where you can create a community and monetize that in a side hustle. So I'll close on this. The thing that I would try to get to is what a friend of mine, Matt the lumberjack, calls the 4321 strategy. So I would start shopping for a four plex in my area. And again, you're probably not going to get to it with 10 grand down, probably not even 20 grand down. But I just want you to look at them to understand what they cost, because that's the first thing you're going.
To buy is a definitely being being aware of the market. You know, whether you buy a single family home or whatever, you got to get educated. Like when I was young, I was always looking at properties. I couldn't even afford it, but I was looking.
Yeah. All right, now let's, let's go to number two. Let's assume now you're Married, so it's a couple. Let's assume you have a kid, kids, I don't know, under five. So a baby, let's call it a baby. Dual income now you're making one 25k, you're renting, you're a renter. And I don't know, let's say you've got a car payment, I don't know, 800 bucks a month. You've got some credit card debt. I don't know anything else you want to know about this situation?
Well, what should you do at that point? I'd be buying rental properties. That's when you become the long term buyer investor. You can get one a year. Whatever it is, you just got started.
I've never asked this question of you. Let's just assume they have eight grand in credit card debt paying 24 interest. Are, are you of the mind? You got to pay that off kind of first because that's just an immediate 24 savings. Is that where you go?
Well, thank you. To Donald Trump. It's only going to be 10%, right? We'll see with his new proposal. Yeah. And, and so, so yeah, you know, I'd probably get that. That's, that's pretty expensive. So I'd get that then paid.
Yeah.
You're just getting killed. You know, you basically think of it like this, you know, when, when you're paying that kind of really userious interest, you're basically renting. Yeah. You know, it's so hard to ever be chunking the principal way. You're just renting the money and paying 24%. I mean that's just insane.
Yeah. Let's assume you live in a crazy expensive part of the world, New York City, Silicon Valley, Miami. And you know, you're building a real estate portfolio somewhere else that you know, where the numbers make sense.
Right.
I'm curious where you come down on this. Are you of the mind? Rent where you are like rent in the Valley and then buy assets somewhere else. Yeah. So talk about that.
Definitely rent the expensive home because the rent to valuation is very favorable for the tenant. The higher the value of the property, the more rent value ratio, RV ratio is in favor of the renter, whereas the inexpensive properties, it's more in favor of the landlord deal. So you definitely want to arbitrage that. But I would say more than that. More broadly speaking, consider building, living in a lower cost place. And here's the counterintuitive thing. Look, I, I grew up in Los Angeles as a kid, I lived in Orange county as an Adult living in Newport beach, coast, Irvine, very expensive markets. I'll tell you, it's counterintuitive, but when I moved to Arizona in 2011, my quality of life became dramatically better. The more expensive market does not necessarily mean the quality of life is better. Sometimes it's actually worse. Let me tell you why. I, I developed a whole theory around this a very long time ago. When the real estate is really expensive in a market, you go to a coffee shop and you can't get a seat because everything's smaller, everything's more crowded, everything's more dense. Okay. And people are competing for very limited resources. Also people are more grouchy. Okay. Because you know, there's, there's, there's a famous experiment on this, right. You put a whole bunch of rats in a small space and they fight, right. You know, they're fighting for resources versus a large space where they're spread out or they get along fine. Okay. And so I would never want to live in New York City, even though I can easily afford it and I could live very well there. Like why the quality of life is not better. People don't live as long living in high density cities as they do in suburban or rural areas. Like, they live longer, they're healthier, it's just better. You know, nowadays with communication, you don't need to live in any certain place. Yeah.
You know, I think that is something that I think more and more people need to realize. I especially if you're Gen Z, they are realizing it.
I mean, they are realizing it.
Yeah. You're seeing, yeah, you're seeing the migration patterns for sure. But it's okay, right? Again, with communication vehicle, you know, you know, tech, it's just the right option for a lot of people. Quality of life just gets better when.
You can make those moves.
Yeah.
So now, and the taxes, I mean. Yeah. To the government, you know, it really inhibits your ability to build wealth.
Yes, agreed.
You can't. I mean, if you're just paying the government. And remember, it's not just income tax in a lot of other ways the cost of everything you buy is impacted by the cost of taxes in that jurisdiction. So.
Yeah, I'll give you a real example. So I, I left California over three years ago and I bought a crazy expensive house in Vegas. And my tax savings from state income tax pays my mortgage.
Oh, no question. Yeah, yeah. I'll share my own example. When I lived in Orange County, California and I sold my house there, I think my all in ITI plus association fees, I was paying $11,000 for my house there. And it wasn't any, you know, gorgeous mansion or anything. It was, you know, it wasn't that big a deal. I mean, it had a nice view and stuff, Right. You know, it was not a big. And. And so I went from $11,000 a month as an owner to renting a penthouse here in Arizona for 3, $600 a month. Wow. 3, 600 square feet. Brand new, 10 foot ceilings, floor to ceiling glass. I mean, it was gorgeous. Right. I just couldn't believe how much better life got in, like every way and how I could build wealth so much faster because I wasn't paying the government, I wasn't paying 11 grand a month. And you know, adjust that for inflation. Okay. By the way, 2011. So the 11 grand a month then would be equivalent to like, you know, $23,000 a month now, probably. Right? Probably.
Yeah. And.
And that rent would be equivalent to about 7, $200 now. Maybe about double it.
Yeah, yeah. All right, let's do one more avatar because I get this a lot. Again, a lot of the audience sometimes gravitates to who the creator is. So let's assume you're 45 or older, you're a senior executive making a couple of bills at least a year. You know, you got a 401k, let's say, you know, 800 grand or something, maybe even say it's a million bucks. But you got no real estate. What do you tell people like that? Do you just say, hey, hold on tight and hope luck happens and the 401k doubles or what are you telling these folks?
Yeah, you know, Michael, you got to get in the game. I think you're just going to get left behind because, you know, the first time everybody's familiar with the Castle game, the rich dad cash flow. And we used to host that game at my office in Newport Beach. And once a month would play it, people would come in and play. We had a whole bunch of them. The first time I ever played it, I was the doctor and I thought, oh, I'm going to win. Right? And I actually lost because, yes, the, you know, people, they're expensive. You know, even if you have a high, your expenses meet the.
That was such an eye openening.
Right again.
I will. It's funny, I played that game hundreds of times now, actually. I have it on my shelf right there. And I will play anybody. If you want to be a doctor or a lawyer and I'm a, you know, teacher or policeman or whatever, I'll crush you 99% of the time. Right. This is why getting wealthy is, is. It's the thing that taught me this. If you have an income making 400 grand a year, it's really hard to replace that. It takes a long freaking time. But if you make 40 grand a year, you could do that in five years.
Yeah, it's pretty interesting. Yeah. You know, and it keeps you stuck. Whenever you have something, there's the sunk cost fallacy, among other fallacies that come into play. Right. Where you just don't want to give it up. You might be in a relationship, a marriage, have a career. You know, if you went to medical school, you know, you're not going to like leave that because you invested too much. There's too much self cost in the relationship, the medical school, whatever, to do something else. And so a lot of times that keeps you trapped in a cage, whereas that can really.
Yeah. Well, folks, I want to give you a little tease here again. We obviously have our Vegas event coming up in a couple of weeks, but more importantly, I'm gonna live stream it inside my school community. So again, Jason will be speaking day one, the morning of. There's four invites already in school. If you wanted to tune in for Jason's again, it'll be day one, Saturday in the morning. Jason, you give us just a little tease of what your talk's going to be about.
Yeah, well, I'm gonna, I'm going to hopefully blow up a lot of myths about this belief in the economy and market. I'm definitely doing that. Michael, depending on. Tell me how much time I have. Let's. Maybe after this we'll look at the schedule.
I, I have one hour. You, you're. You kept the hour.
I'd love to get into what I call the perpetual motion machine. Income property and how your properties basically buy more properties for you. You know, no one, no one could ever invent the perpetual motion machine. Around the turn of the century, from the 1800s to the 1900s, that was all over where people were trying to invent this, this machine that can't be invented. Right? Because at least so far, because physics, it just breaks the laws of physics. But with income property, it does exist.
Again, folks, tune in, join school. It's only 20 bucks. Last year I sold live streams for a hundred dollars or 99. I'm not doing this year. I want you in school, I want you around the other 500 wealth builders. See all the other goodies in there. So again, if you want to cheat the system and be frugal, buy a month and leave. That's okay. I think you're going to find the community pretty awesome and you're going to stick around. Jason Perpetual Money Machine, let's go.
Thanks buddy Motion yeah.
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