2408: How to Get Rich in American History- 300 Years of Financial Advice That Worked (& Didn't) by Joseph Moore

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Hey Jason, I just want to say this. Your presentation in Tampa was one of my favorites. I have been sharing that slide that I took a picture of with like just about everybody I know about, uh, price of housing versus gold per ounce, man.

Just incredible. 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.

Greetings empowered investors. Welcome to episode 2408 in Thank you so much for joining me today. We've got some great news as the world is being reordered by President Trump and the pieces are moving all around the chess table. I think it's going to be great, but I gotta tell ya, so many people live minute to minute, day to day. They just don't have any patience or any big, like, vision for anything, it seems like. Doesn't this drive you crazy? It must. Because as a real estate investor and someone who follows this work that we've been doing for the last 22 years, you know better, right? You're not agonizing over the fact that oil prices went up or down today, or the stock market went up or down today or in the last hour. I mean, that's just not mature. The mature way to look at things is the big picture, right? Back up, delay gratification. Look at the big picture. And imagine this— no president in 47 years had the guts to do anything about an enemy that's been chanting death to America for 47 years. And finally someone did something. So there you go. So that is my commentary on the geopolitical situation. But I've got the good news. That wasn't the good news, by the way. The good news is And you may not know this, that the IRS has quietly issued some guidance on 1031 exchanges. Now, you already know that income property is the most historically proven asset class in the entire world. You already know that income property is the most tax-favored asset class in America and the most debt-favored asset class in America. And I mean debt in a good way because it gives you inflation-induced debt destruction and leverage and lowers your risk. So that's all good, right? But there's even more, and here it is. The IRS has issued some interesting guidance. New 1031 exchange flexibility rule. Reach out to our investment counselors for more details on this. You can call them at 714-820-4200 extension 2, and you'll get an investment counselor, or just go to JasonHartman.com and reach them. And do remember though, that we are not tax advisors. Consult the appropriate professional for any related field that I might talk about on the show, yada, yada, yada, right? Disclaimers. See terms of service on the website, et cetera. All right. But quietly, the IRS has updated guidance expanding 1031 exchange timelines. This is really big news, okay? Where you can possibly extend them for various reasons. And this is great. Also, the other bit of good news is DSCR loans. A lot of you have been taking advantage of these DSCR loans for financing your properties. Now, what does DSCR mean? It means debt service coverage ratio, and these loans offer a lot of ease and flexibility for investors that make it really easy. But we have got some new relationships where you can get rates that are 25 to 50 basis points lower than normal on the DSCR and more flexible rent-to-income thresholds. I am reading this, by the way. Reduced reserve requirements for investors. You definitely got to check this out. So reach out to our investment counselors, 714-820-4200 extension 2 to reach them, or through JasonHartman.com. Also, I wanted to show you this and announce a little contest. For a free Empowered Investor Live ticket. And maybe second place will do a $50 Amazon gift card. How's that sound? This is it. So this I found while moving. This is an old MLS book. Yes, the Multiple Listing Service. It's a book. It was mine. I use this. This is how we looked at properties. If you're only listening on audio, you can see these are terrible black and white single photos of each property on newsprint. You can hardly tell anything. You had to be a really good detective, and it's got some information about it. So this is from the Orange Coast Association of Realtors in Newport Beach. This is my MLS book. This is not my first one. My first one was way before this, but I put a piece of tape over the date. And by the way, I must tell you, if you're a regular listener or viewer, I have shown this on the show before. But the difference is today, let's make it a little contest. We've got Empowered Investor Live, our annual event coming up in Irvine, California. You want to get a free ticket for that? Go to JasonHartman.com/ask and put in your guess for the date of this MLS book. What date is this MLS book? Okay, so do that. I can tell you that it's old. But I was in the business for quite a while before this book, but this is one that I happen to keep. So, uh, really interesting. You look at, look at these, the, the way people used to buy properties. It's just, it's just mind-boggling. And the thing that technology has offered us today, and look at the statistics here. That's how the market's doing. I wanted to show that quickly because I didn't know if there was a date on that page. All right. If you can guess the date of this MLS book, win some prizes. First prize, Empowered Investor free ticket. Second prize, $50 Amazon gift card for the person who gets the second closest to this. JasonHartman.com/ask. And you can ask any of your questions there. Always, we'd be glad to help you with those. Many of those questions we'll answer on the show. So that's coming up. All right, before we get to our guest who's going to talk about 300 years of financial advice in America. 300-year history of financial advice. Before we get to that, we've got Empowered Investor Live coming up. EmpoweredInvestorLive.com for tickets. MastermindYachtAdventures.com for the Mastermind superyacht adventure. And what else do we have? Free property tracker accounts. And we have massively upgraded especially the performance, but the system in general at PropertyTracker.com, please go get yourself a free account, no strings attached. This is almost like a philanthropic mission for me because so many real estate investors, all of their issues, all of their questions come down to just simply understanding the math of income property. And that's what PropertyTracker will help you with for free. Go get a free account at PropertyTracker.com and make sure you do that. And we're going to be going over those performance a lot at Empowered Investor Live in May in Irvine, California. So be sure you got tickets for that. Okay, our guest today is going to be talking about 300 years of financial advice that worked and didn't work in America. How to get rich in America over the past 300 years. This is an interesting discussion. Here we go. It is my pleasure to welcome Joseph Moore. More to the show. He is the author of a book on a very interesting topic, How to Get Rich in American History: 300 Years of Financial Advice That Worked and Didn't. Joseph, welcome. How are you?

I'm so glad to be here, Jason. Thank you.

Good to have you. Where are you located?

Uh, outside of Atlanta, Georgia.

Fantastic. Well, getting rich has been something that has fascinated people probably since the beginning of time, pretty much. And when you look at American history. You know, we're right at about our 250th birthday here, but of course, there was a lot going on before the country was formally formed. And you've got 300 years of financial advice here. Take us through it.

Well, this all started for me, just kind of how I stumbled into talking about this. I'm a historian by training, but, but not about any of these topics. I was doing other things. And it was 2008, and everybody said, you know, the lesson of history is clear: you're supposed to buy a house because renting is throwing your money away. This is about 2005. And I said, oh, well, I just shrugged my shoulders and I didn't investigate that any further. And so my wife and I bought a little tiny townhome with, you know, the ninja loans, right? No money down. We're graduate students. And we went to a class that a friend of ours hosted at a local church on personal finance in 2008 because he asked us to come because he was scared nobody would show up. Long story short, we go home, we do a budget, and we go, who gave us a mortgage? And we sold our house. Put it on the market on a Monday, sold it by Saturday. The next Saturday, our neighbor put her house on the market. It never sold. We were the last people off the Titanic. And this left me just, just blown away. How did I get so lucky? And so I began like, what did people think they were supposed to do with their money? And how was it?

I just—

I had a PhD in history and I just got lucky, right? And so I began studying this for 10 years. And what do we find is we— looking back over 300 years, of financial advice that Americans got is that what always worked was always changing because the economy has changed and been so dynamic in American history that there are eras, for instance, when people tell their grandkids, whatever you do, don't save money because money was a very different thing in the 1800s than it became in the 1900s and the 21st century. In fact, some ways crypto, we're going back to that. So there's a lot of things we can learn by how much people adapted to change and how we have to adapt and change our own financial lives.

Okay, so what did we do? I mean, when you go back this far, you go back to, you know, long before the Federal Reserve.

Yes.

Long before credit markets, long before just everything, uh, right, you know, certainly way before LLCs even existed.

Yes.

Or corporations did, but not LLCs. So, you know, and it's just interesting to look at the various ways that people have tried to create wealth over many, many years. But, uh, take us through— do you want to do it kind of chronologically?

Sure. What we could do, maybe the kind of the first thing is like what actually worked, right? Let's, let's think through like, okay, if you go over 300 years, because there is so much change— let me give you, let me give you an example of that. In the 1800s, you could literally create your own money, much like people create cryptocurrency today. The problem with that is that nobody wanted to save it. You might want to spend it, but you couldn't save it, right? So everything has changed and been so dynamic in the American economy. So how do you find things that everybody who succeeded did? And generally it boils down to about 7 things. They built their own business, or they took a large income from someone else's business, or they combined a lot of smaller incomes, right? Side hustles, these kind of things. Side hustles are very, very old. Airbnb is 300 years old. Uh, people have been renting out rooms in their houses forever.

Or you don't mean the Airbnb— the company, of course, isn't that old, right? Exactly. Renting a room, right?

Yes. The concept of monetizing your space is very, very old. And we'll talk some about that. But, you know, some people invested truly extreme portions of their income, what we call today the FIRE movement, this idea that I'm going to live on 50% and save 50% or whatever ratio. That was actually an immigrant strategy for over 100 years of how immigrant families would climb ahead. And then some people take leveraged high payout opportunities with debt or risk. Some people invest steadily over a long time. And that's what we think is the timeless financial advice. But here's the interesting part about that. If you had worked one job and saved 10% of your income in stocks for 40 years, the failure rate for that to fully fund a retirement in American history is right under 50%. If you actually take the financial data of every year in American history and you just assume someone is saving 10% in stocks, it fails 40-some-odd percent of the time. So, and then the final, of course, the, the maybe the most universal advice in American history ever financially is marry well. So, you know, marry age matters a lot for success financially. So these people who succeeded did at least one of these 7 things, and often they did several of these combined. And not everyone works every time, but the people who have consistently done these things have generally succeeded. We think of financial advice as solving our own problems, right? Should I drink lattes? Should I invest in crypto? Those are all about you and your problems. Most wealth is actually created solving someone else's problems. Like if you're, if you're in real estate, you know very well your tenant is your customer. You are making money by solving their housing needs. It's taking risks, marrying well, being willing to move. Mobility has mattered a lot in American history and very simply believing you can. There was a study by the Consumer Financial Protection Bureau, studied 150,000 families, and it found that a positive attitude combined with a habit of saving better predicted financial wellness than inheritance.

Mm-hmm.

So believing that you can succeed is kind of part of the American experiment, the idea that everyday people can actually get ahead. Now, on the flip side, why do people fail? Many times they went off without experience. They didn't get training, they didn't get tutored. So you see a lot of people who rush out into an investment idea that they don't really understand. That's been tripping people up for 300 years. In fact, we have the bankruptcy records of the 1840s, and we can see that's the number one predictor of failure is inexperience. No one mentoring you in a field. Overspending, which we all have that habit and we've always had that habit. Overextending yourself, kind of doing way more business than you have the credit for. Cosigning a loan, universally don't do it. It has failed in every era. It even tripped up a U.S. president, William McKinley. And, and yeah, yeah, he signs, he signs this thing and trusts his friend to handle it and his friend goes broke. And then bad luck. I mean, some people do everything right and yes, bad luck can strike, but Generally, the things that bring failure into someone's life are one of these 5 things. You had asked about going through this chronologically. I'll just kind of point out, I come from a family that kind of leans far to the left, which is rare in the South. This is the Communist Party headquarters in Gastonia, North Carolina, which was raided by the police in one of the famous workers unions, the 1920s. My family was involved in this. My family were like holding the Communist Manifesto saying capitalism Communism is evil. And my dad growing up—

at least you admit it.

Yeah, no, I know. This is part of my family history, right? There's not many communists in the South, but we were some of them. My dad voted communist for president for my whole childhood growing up. It was a strange trip for me to study financial history because I actually thought I was going to find that it was all a scam and that people were being misled and that people didn't really get ahead. The American dream was kind of a farce. What I found over 10 years of research is I was wrong, and capitalism has been the single greatest driver of prosperity for everyday people. Not just for the rich, not just for the billionaire class, but for everyday people to get ahead. And so I start there to say I started this experiment as a skeptic, and it took researching financial life in America for me to actually come to see it as the empowering tool for people that it really can be. People have been saying the American dream has been dead since about 1676, not 1776. In 1676. Wow. There was a populist uprising that burned down the capital of Virginia. Expressly because everyday people couldn't get ahead anymore. So this idea that the American dream is dead is actually older than the idea of the American dream, because the American dream, that phrase, doesn't pop up until the 1930s. But people were saying even in the 1800s, the rungs on the ladder to success have been cut off, no one can get ahead.

Why did they think that way back then before the country was even formed?

So there's many times at Pops up over and over and over. Generally speaking, there is an assumption that the people who got ahead of you came into the economy a particularly great spot, a great time, and that you missed the boat, right? Oh, if I had only been here in 1666 instead of 1676, then I really, really had a chance, right? Let me give you an example. In 1980, there were headlines blaring, the baby boomers will never retire, they missed the boat. I want you to think, like, how did that work out?

Right?

Like this, it's, I think it's a universal phenomenon of when you're living through economic change, you assume the people who went ahead of you didn't have to live through that change.

Right, right, right. That is so valid. I'm so glad you said that because people tend to assume all of these doomers and what I call the crash bros. Yep.

I know who they are.

They point out all of the problems we have today. $39 trillion in debt, this, that, and the other thing, unfunded mandates, whatever. Right. And they think that prior generations had no problems.

Like, right.

You know, they had tons of other problems.

Yes.

Pestilence, famine, all kinds of things we don't have problems with at all. You know, well, and that's the—

as I talk to people about this, this research, what I try to tell people is I'm not trying to tell you that your life is easy. What I'm trying to dispel is the notion that everyone before you had it easier. Right, because that is what's not true. It is, you know, we, we have a lot of kind of okay boomer language going on these days. And look, the boomers did get particularly lucky in some ways.

Yeah, but they also contributed a lot. Exactly. Yes. And listen, I'm not a boomer, I'm a Gen Xer, so, you know, I don't have a dog in this fight, right? But the boomers, I mean, all the, the sacrifices they made, the inventions they made, the hard work that they did, I mean, You know, the boomers aren't all bad.

Okay, I, I agree with you. And I think that what one of the things that's happened is a sense that it was particularly easy for them, which kind of blows past things like 20% inflation rate, uh, you know, or 20% mortgage rates briefly, you know, in the late '70s, early '80s.

They had almost 14% inflation at one point. You, you didn't look for that, you know, right?

Exactly. No, I, I've met people who took out 20% interest mortgages in doing this research, right? In fact, in 1981, which would have been when the boomers were just kind of prime, you know, moving into their middle, very much in their middle age. In 1981, a new mortgage cost 51% of median income, 51% for the payment. So anybody in 1981 who was buying a house, they really felt like they were in the middle of a housing crisis, right?

Yeah. And let me tell you, your houses today are way nicer than their houses were.

Yes, they are. Better insulated, safer. Bigger. I mean, bigger by over 1,000 square feet. So again, it's not that I'm saying your life is easy. I'm saying don't pretend they had it easier.

It's just a different set of problems, always.

Yes. So let me give you an example. So I pulled some quotes from the New York Times through the years, and I won't read all of them, but things like this: retirement for the majority is going to be difficult and unhappy period of readjustment with loss of needed income and a lower standard of living. That's from 1958. You know, things like, everyone agrees this system needs to be fixed quickly because otherwise it's going to run out of money. That's from 1998. I mean, I can find— I— this is shooting fish in a barrel as a historian. I can find quotes saying that people are going to fail to have a great retirement. There was a bestselling book in 1980, it hit the bestseller list, 1980, saying the baby boomers will not be able to afford to retire. You know, this was, this was the top thing on the shelf. That people were reading.

I interviewed Ravi Batra on the show, and I remember in the '90s I actually read his book entitled The Great Depression of 1990. And then I interviewed him, you know, 30 years later. And, you know, he obviously was wrong.

The sheer number— I mean, I've read— I probably—

this is—

this sounds like I'm bragging. It's more that I'm confessing. I've probably read more financial advice from American history than any person alive. Like, I tried to read literally everything from every era, no matter how boring it was, no matter how popular it was.

Yeah.

And you could crush a car beneath the weight of the predictions of crashes that don't happen.

Okay. Okay. Well, do you have any examples from us of people that, you know, succeeded and failed throughout this 300-year history? Well, you know, some lessons we can learn from them.

Yeah. Well, how about this? One of the lessons that I try to teach people about is what I call fast time and slow time. Every history that you've probably read about finance is what I call fast time history, where everything is happening all at once. It's 2008, it's 1929, you know, everything is crashing everywhere. But here's the problem: that's a fast time history. Most of your financial life is lived in slow time. Most of what it actually takes to do something financially is to, uh, is going to be built up in slow time. So I don't know if you're familiar with Kim Basinger, the, the famous actress from the '80s, '90s, 2000s, '80s and '90s icon.

She was so gorgeous. Yeah.

Kim Basinger bought the town of Braselton, Georgia, in the '90s because her idea was, I'm going to build a movie studio in rural Georgia outside of Atlanta and make it a tourist attraction. Yeah.

I mean, I know she went bankrupt and she went bankrupt from that. Yes.

And she went bankrupt because doing something like that, it turns out, is hard work and takes slow, laborious time to build up to get those factors in play. And so Eugene Levy found this in a Google search, turned the idea into the show Schitt's Creek, and it became kind of COVID-era comedy gold that we all sat around and watched. But who gets the last laugh? Because the fastest growing studios in the world right now are outside of Atlanta, Georgia. The town she bought— and this is a reference to— it's called Château Elan. It's a French luxury on Georgia clay. It's one of the biggest tourist attractions in Atlanta. Everything that she thought would happen did happen. She was right. She was just too early.

Right, exactly. Yeah.

And so a lot of times when we think— if I talk to you about the 1990s, we would talk about times of boom, right? Ace of Base saw the signs and, you know, everything was going to go great. But if I talk to you about the 1930s and the Great Depression, we assume everybody's— everything's going wrong all at once. And yet there are huge fortunes created in the Great Depression. Right. So in the 1920s, it's a man named Edward McKay, and he goes to an HBCU and he works through the 1920s for very little pay, gets no lucky breaks. He'd studied banking and banking law, and he just could not break through. Then the 1929 crash happens, the 1930 Depression happens, and he takes a risk. He goes out with no money down. This is a Black man in the Jim Crow South. He goes with no money down and he starts buying up rental properties. This is before BlackRock— before, I'm sorry, Blackstone— before any of that. He bought over 100 rental properties with basically no money down because he understood banking law and he had studied. He'd been careful, he'd learned, and he just knew he could hold on and make the payments through rental income until things turned around. And that's exactly what he did. And this leads him then, from the money he makes in real estate in the Great Depression, he becomes one of the first men to break the race barrier on Wall Street as a stockbroker. But it's all because in the middle of a fast time when everything was breaking all at once, he had the presence of mind to act smartly.

Okay, so that means, in other words, invest when everybody's fearful is what you're— that, that's the point of that?

Well, I think it's definitely what worked out in many times over. I mean, if you actually look at the majority of successful American businesses, most of them, or very close to half of them, are founded during recessions or depressions.

Right.

And we think of this as a time when everything crashes, but it's actually when most things are built.

Yeah.

For all kinds of reasons.

That's when, that's when, you know, just to use your— that's when Airbnb was created, Uber was created. You know, all of these big innovative ideas seem to come out of hard times, right?

Yes. And one of the things that happens when things are very good is that everyone chases the next big thing. Here's a good lesson of history. The next big thing is usually a bad idea.

Mm-hmm.

We all know AI and crypto and the next big thing that has been in our generation, but we forget there were next big things before that.

Sure.

In the 1800s, the next big thing was canal building. Everyone was going to get rich building canals because the Erie Canal opened up New York to Canada and this opened up the Midwest and this was going to change everything. And so every investor in every city in America was going to build a new canal. 90-plus percent of them went completely bust. In the 1830s, the next big thing was beet sugar, which I know doesn't sound very exciting, but the idea was we can make sugar instead of from sugarcane, which, A, involves slavery, which many people said clearly, right, this is immoral, we don't want to have sugar from immoral sources. But what if we could raise it with beet— with beet sugar? Okay, millions of dollars was poured into this. Every single dollar was lost. Lydia Maria Child is a famous feminist who wrote books like The Frugal Housewife. The reason she had to write the book The Frugal Housewife is because her husband went broke investing in beet farming because everyone was sure it was going to be a huge success. Politicians were sure it was going to be a success. They, they put up tariffs to protect it. It didn't matter. No one could turn it into a profitable business. So if I go to the 1850s and '60s, the early era of fracking, what we called a day fracking, but was, you know, this idea of extracting oil from, from various sources in the United States. Every one of these goes bust. So there's been a next big thing over and over and over in America. They tend to actually be bad investments. They tend to be great innovations for the economy as a whole, but bad for the investors who invest in them early.

Interesting. So what's the distinction there that we need to think about? That it's like the old saying, how do you know who the pioneers are? They're the people with the arrows in their back, right?

Yeah, that's— I've not heard that, but that's a good one. So what I tell people often is you don't know who's going to win the race to the future. So if I go to 1986, what everyone will remember is that that's the year that Microsoft had its IPO. And you're like, oh, if I had just bought Microsoft. When it went public, right? Okay, well, who else was building the computer future in 1986? Atari, Commodore, MIPS, right? They're all gone.

Yeah, right.

They either went bankrupt or were absorbed by other companies. So you don't know who's going to win the race to the future. Sometimes, for an average American investor, the more boring industries actually perform better. If you had bought McDonald's stock the year I was born, it would have outperformed pretty much every tech stock that year.

Interesting, interesting.

Just flipping hamburgers.

Yeah.

Here's another— when I talk about how much the economy has changed, if I walk into any investor conference and I sling a wet rag, it's going to land on somebody who tells me to buy stocks for the long run, right? Because stocks is stocks, always everything goes up and to the right. It's always going to be. And we know this because some people don't even know that there was a book called Stocks for the Long Run. But that's a phrase people use over and over. Sure. What we now know is that the historical data that was used to construct that argument missed a whole lot of the stocks that went broke. So a lot of stocks that went to zero weren't in the dataset. So Edward McQuarrie and William Bernstein have done some work on this with recent papers that have basically said, if we actually look at the full dataset of every stock price that we know, stocks underperformed bonds for the 1800s, and they were tied until about World War II, which means that stocks always beating bonds is only as old as our last two presidents, right? This is a recent phenomenon. I mean, I'm a historian. 80 years is a rounding error. So the idea that stocks always go up is a new phenomenon, right? But if you talk to your typical American financial advisor, everything goes up and to the right. I mean, I remember going with my wife to sit down the very first time. We— it was right after we sold our house. We had like $5,000. We thought that was a huge amount of money. What are we going to do with $5,000? I guess we should do what grown-ups do. We should invest it. And so we sat down with a with a financial advisor, and he showed us a chart that looked, you know, very much like the ones that you always see. And it said, look, if you had invested basically $1,000 right before the Great Depression and you had held it all the way to today, it'd be worth roughly $10 million. Well, this begs a lot of questions.

Well, first you got to adjust for inflation, obviously, but yes.

Well, which they very rarely do. Right.

A lot of money. Yeah.

Yeah. But I remember as a historian listening to this person tell me this and thought, wait a minute, So this person— and first of all, I think the chart I saw was $10,000, and I remember pointing out that a house did not cost $10,000 in 1929, right?

Yeah.

So somebody took the price of a house, they invested in the stock market, they lost 60%, they lived through a world war, they lived through the Cuban Missile Crisis, they lived through double-digit inflation, they watched Ross and Rachel get back together, and they never once touched the money. Yeah, right. Like, this makes no sense. Like, you would have to live on the money.

This, by the way, if you read any of Morgan Housel's books or you read The Behavior Gap, this is why the investment has a different return than the investor gets.

Yes.

The investor has to have just an iron will to have the faith to not sell when things are going badly. There's just this total temptation to bail out. And this is what people do. They bail out at the wrong time. They get in at the wrong time. And their return is dramatically different than the return of the actual investment itself. The investor return is different than the investment return. That's a very important distinction.

It is. And it's one of the reasons that if you actually look at what everyday people did, because in this book, I didn't particularly want to know what did, what did JPMorgan do with his money? For one thing, that's that the history's already been written. But I wanted to know what everyday people were doing. And if you actually look at everyday people's wealth building, very few of them won by compound interest for two very particular reasons. Number one is very few people lived long enough for compounding to work.

You know, the average life expectancy and they bail out, which is—

yeah, well, and very few people live past the age of 45. You know, if, if 90% of Warren Buffett's wealth comes after his 60th birthday.

Yeah.

I think it's 99% of his wealth comes after his 60th birthday. Very few people live that long. And the second thing is that most people's wealth was in land, and land doesn't compound. But here's the thing land does. Here's the thing real estate does. To your exact point, you aren't tempted to bail, right? There's much less temptation to, oh no, things are crashing. Selling land is— there's a lot of friction in that process.

Exactly, exactly. It becomes a forced savings program.

Right.

You know, one of my friends who has become kind of famous as a YouTuber, I saw him being interviewed, and I've known the guy for 35 years or something, right? And I saw him being interviewed on someone else's YouTube channel, and he's always been very indulgent, very irresponsible, you know, made a lot of money, right?

A lot of money. Yeah.

And he's, he's married with kids, you know, and you think that would, like, his wife would ground him a bit, but apparently not. And, and what he said was really interesting, you know, when they, when they interviewer asked him, what's been the best investment for you? And he said, you know, it's been the real estate, because with the real estate I can't spend it. And he has a self-control problem, he will be the first to admit that. And there's a lot of friction in selling the real estate because it's not liquid. You know, most of the stock people will say, I love stocks because within the click of a mouse I can be in and out of my position. But that's what makes it volatile, and that's what makes you a volatile investor, is the fact that you can be in and out so easily, right? When there's friction, it forces you to rethink things and be cautious and plan, and, you know, it's just, it's just better. Yeah. Yeah.

So that, and that's why most everyday people got most of their wealth building through those types of assets. It was either real estate or owning a business or building a small business, because you can't just turn that around and sell it on a whim.

Right.

One of the other things that everyday people did was they side hustled. We think side hustles is this very new conversation that we have because the economy is broken and all these— back to what we were saying, like the idea that it used to be easy and you could work one job and you could still get ahead. That is just not true. So this is a picture of, I think, Waverly Avenue or Waverly in New York, Waverly Street. Forgive me, New Yorkers, if I'm, if I'm not getting the right designation there. There's a brownstone on this street that was bought by a man named William Taylor, who was a police officer in the New York City police force. And that's a problem because how can you afford a brownstone on a policeman's salary?

Okay.

Even then, you know, that— his exact address, I looked it up, is worth like $10 million today. It wasn't that expensive, but it wasn't cheap.

Okay.

And the answer is his wife, who, if you look in the historical record, her name is Agnes. Agnes Taylor. Agnes in the historical record doesn't look like she's working, but she actually is working. She rents out every single room in the house to boarders. This is what I mean by Airbnb is very old, is this is the 1870s— I'm sorry, 1890s— and she rents out 10 separate rooms in their brownstone, and that is how they made their mortgage payment, right? After about 8 years, they had paid down the mortgage and they were able to sell that house and buy their own house without needing any renters. Now, that's not necessarily a fun experiment, but it is how a lot of people got by. 1 out of every 2 homeowners at some point in American history prior to World War II, 1 out of every 2 homeowners rented out rooms in their house.

Mm-hmm.

And at any given moment, it was 1 in 3. This was one of the most common phenomenon of Americans using their home to monetize their space and move ahead. It has been going on since the 1600s.

Yeah. Yep.

The other idea we have, kind of a misconception, is that dual incomes are kind of a post-1960s thing. And I argue in the book that is just completely bafflingly wrong. Women were monetizing their time. Married women were monetizing their time. Dual incomes were normal. Throughout American history. Now, the reason we think they weren't is because, to that point about Agnes Taylor, Agnes Taylor in the historical record is shown as not having an income, but she's actually the one who's paying down the mortgage for the family by managing the, the borders and the rental in that process. Women raised chickens that they sold with, you know, eggs in the market early in the mornings. They would weave hats. This was a very Airbnb— there was a, there was a phenomenon of the 1830s where women would weave hats and sell them at market. They were kind of like the early cowboy hats. This was as popular as driving for Uber at one point. And women were doing this and they were bringing in 10 to 15 to, in some places, 25% of the family income. Women's income was the difference between surviving and thriving, and that's been going on forever. So this idea that we have dual income families and it's new and men have to figure out what to do with that—

no.

Men, your wives have been working since the 1700s. And when the stay-at-home wife movement got started, it was men who wrote angry letters to the newspaper saying, why does my wife think she should stay at home?

I—

we need her working. We need that income.

Yeah.

And so back— and just to kind of keep on this idea of like, women have always been active parts of the economy. Women have always been active investors. Abigail Adams, the First Lady of the United States, wife of the second president of the United States. John Adams was obsessed with investing in land and he wasn't very good at it. So all of his investment records are buying like kind of junky farmland in Massachusetts. And she is constantly writing him letters going, you should be investing in other things. And finally, about halfway through their marriage, she's given— she just starts investing on her own, sometimes with John knowing about it, sometimes with John not knowing about it. But because of the fascinating work of a historian, we know what her lifetime returns are. Her lifetime returns were roughly 18-plus percent. Warren Buffett's is 19%. She was, she was a hair beneath Warren Buffett's lifetime returns.

That's respectable.

Women have been active investors in— they owned 50% of the shares of AT&T. Every single women's magazine in history had a financial beat writer. Because women wanted to invest. Interestingly, just one real quick side note is most of what they invested in was mortgages. Women were actually lending mortgages for really all the way to the New Deal when we got standardized mortgages. But you used to go to like a woman in your church to find someone who would lend you money for a house.

Interesting. Wow. What are we—

so you're a real estate— yeah, Jason, you're a real estate investor. I'm a real estate investor. I'm a huge fan of real estate, real estate, and I will tell you know, in all transparency, I started experimenting with these ideas as I started researching them. And I went from being a professor— and I would just promise you, professors do not make a lot of money, and I did not come from money— to being retired in my mid-40s. And most of that was through real estate. Not all of it, but, but a good bit of it.

Yeah.

But there are a lot of illusions in real estate investing that especially novice investors, when they're starting out, don't understand. And The way I generally hear it framed is all investing in real estate is passive. It always goes up, right? Real estate always goes up. Investing in it is passive. And this is how the really big fortunes were made. No, it doesn't. No, it isn't. No, they weren't. Yeah, real estate is great for building mid-sized fortunes. And for me, a mid-sized fortune is plenty, right? Like, if you want to be a deca-millionaire, if you want to be worth kind of 1 million to 50 million. Real estate's great, but it doesn't always go up, and you have to know that.

Yeah, right. So like everything else. So this, this— you've got a chart on the screen here.

Yes.

And this is the Home Sale Price Index, 1948.

Yeah, 1948 is considered, uh, 1. So it's just kind of— yeah, you look at this, uh, home prices in St. Louis from 1948 until about 2000. Are pretty much the same. In fact, they've gone down over time.

Interesting.

In fact, there are multiple cities— Pittsburgh, Atlanta— the price of a home, inflation adjusted, in Atlanta in 1997 was the exact same price as a house in 1887, inflation adjusted.

Here, here's the thing, though, that people have to understand about that, right? Because if you adjust for inflation, you should— that's great. But what it doesn't tell you and what the stock market people or anybody selling any other investment will say is, well, real estate ain't that great. But the thing with real estate is it's a multidimensional asset class, right? And so when you leverage this real estate, that return is massively amplified. For example, 10% down on a property that only goes up 6% a year, which is about the average most people will agree. I mean, it depends what study you're looking at. Yeah. Right, you know, what time period exactly, you know, I get it, okay. But you're basically turning that return into a 60% return. And so even in an era of super high inflation where, God forbid, it's like 13% like it was in the early '80s, you know, you're still beating inflation handily with leveraged real estate, not including cash flow, mortgage pay down, tax benefits, everything else, right?

That's right. And that is why most Americans who built wealth— and again, here I'm not looking at the JPMorgans, right? I'm not looking at Andrew Carnegie. I'm looking at the everyday most of that wealth was built through real estate for exactly what you're talking about. The only other place that you could go get that kind of leverage on an investment is the Chicago Board of Trade. And you just don't knock on the door of the Chicago Board of Trade and ask for that kind of credit. So the leverage in real estate is what has allowed most Americans to leap forward consistently over time. It's basically a short on the dollar. And this is especially true after 1917 when inflation takes off. You got to remember, inflation is not that big a deal before 1912. 1913. The price of milk in 1912 was the same price of milk in 1812. So inflation had not been a big deal for most of time. From 1912 forward through our time, inflation is a huge deal. And so most modern financial advice is in essence an attempt to beat inflation. And what you were just talking about, the ability to leverage up an asset that's going to go up in value, is what sets real estate apart as an asset class.

Yeah, it's among other things, but okay, go ahead. Let's keep moving along.

It's also the— especially in an age when there's almost no dividend-producing stocks anymore, it functions very much like bonds or dividends used to function. I like to talk to people who've read various hot topic books. You've heard The Latte Factor and many of these, many of these things that kind of take off as an idea. I can find almost all of these in history. So this is an advertisement for a bank. In the 1870s. At the bottom it says, save the small sums, cut off your vices, don't smoke, don't drink, don't buy lottery tickets, put that money you save into the bank. And, and they're offering like this silly advice, don't buy a latte. Yeah, yeah, exactly. And I could find— don't— I could find an entire treatise written on if the money— if you did not drink beer and you invested that beer money, here's how much it would be worth in 20 years. I could find all of this stuff. Yeah, right. And so tobacco, lottery tickets, beer— this has been an— this is a very old conversation. And I've already mentioned, you know, Airbnb. But so many of these things that people think are new, people have been doing for a very long time. Here's another example. I'm sure you're familiar with the FIRE movement. Many of your viewers will be familiar with the FIRE movement, right?

Financially, all these 30-year-old retirees.

Yeah, exactly. The very first explicit FIRE manual was published in 1919. It was called Financial Independence at 50. Now we keep moving the goalposts. Then it was 35, or it was 40, then it was 35, and then it was how fast can you get there? But we have seen all of this before. In fact, there was, there was a huge kind of idea of being financially free by going back to farming movement in the 1800s. And there were so many bestsellers about this that a magazine sent an investigative reporter and found out most of the people who were talking about how free they were were actually selling real estate to new farmers. So we've just, we've seen so much of this before, this idea that I can be financially independent and, and people selling that dream. Now that said, and this is what I'm, what I'm making the book, believe it or not, we have had people who are financially independent for all of American history. Pretty much every town had at least one person who had made enough money to cash out of the game and decided, I'm going to, I don't need to pursue more because I have enough to live the life I want to live. Most of the histories of New England that we have written are by this guy who cashed out in the, uh, in the 1840s, had enough money, and decided, well, now I'm going to do what I'm really passionate about. I'm going to write histories of New England. And he goes all around New England collecting this stuff, but it's only because he had made enough money and sold off his business to do that. Yeah, so we've, we've actually had financially independent Americans, uh, before. Sure, we've also had scams, right? All the scams that you think of today are very old. I can find pretty much every scam you find on the internet in a newspaper in the 1800s. One of my favorite sections of a magazine, of a newspaper in the 1800s was called Sundry Humbugs. Humbug just means scam.

Okay.

So if you— when you hear, you know, they're saying to Tiny Tim, ah, humbug, he's saying that's a scam. That's what it means.

Interesting. I didn't know that. I thought it just was like a— I don't know. I thought it meant something different. Yeah.

No, that's— that's why he's like, ah, giving money away is just a scam, right? But it's the art of what the word means. And so there would be these lists of here's the humbugs that are going around today. And if you read them, they read like a list of things that are going around the internet. The Nigerian prince scam was originally the Spanish prince scam. He was a Spanish prince caught in Cuba. And if you could just help his daughter get the money, then he'll split it with you. We've seen this all throughout American history. So, you know, the big takeaways here?

It's, it's like you're just reminding me of Ecclesiastes in the Bible, you know, there's nothing new, nothing new under the sun.

Yeah, exactly.

Yeah.

So, you know, I, I would just kind of sum up for your, uh, for your audience. Number one, there's a lot to learn from understanding people came before you. You are not the first person to encounter any of this, right? And if you can step back and understand that you live in time, time is your most valuable asset. It is not the money, right? It's not the real— it's the time. And what is going to maximize how far you can get ahead in the time you have? And you're not the first person to try to figure that out. But then also believe that you can get ahead. This is coming from a professor who used to assign the Communist Manifesto on the first day of class. Oh my God, that was the first thing I did, is like, and here's your syllabus and here's your copy of the Communist Manifesto. Okay.

It's all here.

Exactly, yeah. Now, what I want people to understand is the more you study American history, the more you realize people really have been getting ahead. You really can get ahead. Your time is not harder than any time that came before you. In fact, this may be the easiest time to get ahead in American history.

Mm-hmm.

And I detail some of that in the book. But it's a chance for us to kind of learn from the past. How do you apply it to your present so you can have a better future?

Fascinating stuff. Give out your website.

Yes, josephmoorebooks.com. You can find the book on Amazon. You can find the book on all the places they sell, they sell books. And I also write a Substack, which josephmoorebooks.com will lead you to, and would love to engage with folks on any social media. Thanks. Thanks for— I hope people really find this to be a useful history.

Yeah, really, really fascinating stuff. Joseph Moore, thanks for joining us.

Jason, thank you so much.

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