2459: The Hartman Risk Evaluator- Reducing Downside Risk Through Land to Improvement Ratios

This show is produced by the Hartman Media Company.

For more information and links to all our great podcasts, visit HartmanMedia.com. Larry Elder here. Now, after personally meeting with Jason Hartman about real estate investing in growing markets, I knew I wanted to share him with you.

So here's Jason.

You know what? I keep hearing that many people believe the best investments are sold at places like Merrill Lynch, but how many people do you know who got rich in the stock market? I thought so. This is Jason Hartman. Isn't it time you acquired property in a growing market where you can realistically earn 40% or more? Why are you sitting on savings, stock, or home equity? Make your money work as hard as you do and build a real estate empire. Real estate is America's proven investment. We'll show you how to be successful at it. Jason Hartman is the real deal. As with any investment, do your homework and ask the tough questions. You know I did. Call them right now and tell them Larry sent you.

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.

I have a question for you. If it is illegal to build a church in Saudi Arabia, why are there over 3,600 mosques in America? Let me say that again. In Saudi Arabia, our American ally, it's illegal to build one single church. It's illegal to wear a cross in public. It's illegal to carry around a Bible. And if you are caught practicing Christianity, you can be arrested, deported, or worse. In In Somalia, there's not one church building left standing. Christians are executed on sight. Al-Shabaab has declared that any Somali who converts to Christianity will be executed, and they do it. In Afghanistan, zero churches. In the Maldives, importing a Bible is a criminal offense, you know, like heroin is illegal. In Iran, converting from Islam is punishable by death, and they do carry out the sentence. Now here's the question. Nobody's allowed to ask. These countries ban every trace of Christianity from their soil. They criminalize the Bible. Some countries execute converts. And yet in America, we've built over 3,600 mosques. We give them tax-exempt status. We protect them under the First Amendment. We celebrate their religious freedom. And what do we get in return? Well, 45,000 people chanting death to America a few days ago in Dearborn, Michigan. Imams who are calling for the death of all Christians and Jews inside American mosques, and they put it on YouTube. A man in Michigan was attacked with a rock on his head for the crime of saying Jesus is King. This is not about banning mosques. This is about asking one simple question: why do we give religious freedom to people who come from countries that would execute us for our religious freedom? Those people chant death to America, death to Christians and Jews as religious freedom of speech. Is this the First Amendment? Where's the reciprocity? Where's the fairness? Where's the basic respect? They ban our churches, they burn our Bibles, they kill our people, and then they come here and demand we tolerate them while they chant for our destruction because, well, they have First Amendment protection. That's not tolerance. That's insane. That's submission. Are we nuts to allow this to continue? By the way, do you know what the only country in the Middle East that allows unlimited churches? Care to guess? Yeah, it's this one— Israel. Bet you didn't know that. Share this video with every Christian you know and smash that follow button because I am not done yet.

Good day, Empowered Investors. Welcome to episode 2459. 2459. Thank you for joining me. Let's go back to basics and talk about one of the fundamental things that we all need to do when we're investing in any asset class. But I'm going to tell you how to do it with real estate today. Now, this doesn't just apply to income property. This applies to a personal residence. One of the examples is a personal residence I purchased maybe 18 years ago. I'm going to talk about that and how I made this amazing discovery that took me 19 years in the real estate business to discover, and that is how to dramatically reduce downside risk when investing. So I gave it a name, the Hartman Risk Evaluator, and we're going to go into that today and show you how you can just really, really make your investments much, much safer than most people. Most people are investing like gamblers, like speculators. like massive risk-takers. And the older I get, the more conservative I become. And, you know, it was hard to earn this money. I don't want to lose it. So let's make good decisions when investing, and let's do that by using the Hartman Risk Evaluator as our guide to fundamentally reduce risk when investing. And let's also remember that we're not necessarily real estate investors. We are packaged commodities investors, or you might say assembled commodities investors. Now, I've been teaching this strategy for 22 years, so I'm going to play for you an old clip. So if there is an old reference, it'll come through, but an old clip of me teaching this concept. And before we do that though, I want to say that we just finished our monthly masterclass. Be sure you join us every month for these. People love them. I got 3 thank you notes after this masterclass. People really just get tons of value out of it. We talked about estate planning today. We had one of our attorneys as a guest. He was great. And we talk about a variety of topics every single Wednesday. Just go to empoweredinvestor.com/wednesday. Why the funny name? because they're on the 2nd Wednesday of every month. So empoweredinvestor.com/wednesday to register for those. Be sure you get your free Property Tracker account and use the best deal analysis software in the industry. And that is Property Tracker. It's free. Go check it out. Now I want to show you something. If you're watching on video, you're going to like this. If you're listening on audio only, you're still going to like it because I'm going to explain it to you. So if you go to your favorite website, empoweredinvestor.com, that's what I have on the screen. You click on the properties page. And by the way, we made a separate domain name for the properties, and that's empoweredinvestormarketplace.com. So you can get there either way. But let's just pick a property and let me show you something super, super cool. In fact, it's even better than that. Let's just pick this random property here. Let's pick this one in Oklahoma City area, right? Now we look at the pro forma, we see our 1-year projection, and it gives us the basics of the property, right? $358,000. This is a duplex, 25% down. Oh, by the way, I got a big announcement here. We have investor loans available now up to 90%. Yes, you heard that right, up to 90% investor loans. We have 2 other really unique products that not too many people have access to. One is great investor loans with good rates and terms for foreign nationals. So if you are like many of our Canadian or Australian or European clients, if you are one of those, or Asian clients, whatever, from anywhere in the world, you can get U.S. real estate with really good terms. That has been something that has been largely absent from the market for many, many years, but we have good products for that. We also have A really good product that is a 40-year term. You know I love just paying later. That's the best way to go. Wimpy from Popeye taught me this. I'll gladly pay you Tuesday for a hamburger today. Or was it a cheeseburger? I can't remember. That was a long time ago when I was a kid watching that cartoon. Anyway, it's the time value of money, folks. Inflation-induced debt destruction. That's what you want to take advantage of. So check out this 40-year product, okay? The first 10 years interest only, then it has a 30-year amortization schedule starting in year 11. That has got to be one of the coolest products. But even better is only 10% down on rental properties. Wowza! Supercalifragilisticexpialidocious. Reach out at empoweredinvestor.com or 1-800-HARTMAN. Call your investment counselor. Talk— you've probably got an investment counselor if you're listening to this. Most people do. But our investment counselors will match you up. They will refer you to the lenders, the asset protection people, the whole team, everybody you need, and help you with the software too. Anyway, going back to the marketplace here, we've got this property and this is just a typical property. It's a nice deal, projected rent $2,730 per month. But now we have ROI or return on investment in 3 different ways. Now we have more metrics than that. We have cap rate or crap rate, as I call it. We have cash-on-cash return, gross rent multiplier, debt coverage ratio, rent-to-value ratio, all of that stuff, right? All the normal stuff. But what we've added is we've added a new return on investment, which is ROI with cost seg and inflation-induced debt destruction. So this is the stacked return, right, with those things. It's your base ROI, which is on the pro forma. This particular property is projected at 23%. By the way, we got more conservative too. I know the numbers sound too good to be true if you don't understand how to do the math of income property, the most historically proven asset class in the entire world. 23% is the projected base return on this duplex with inflation-induced debt destruction, 31%.

Wow.

But here's the new one. We just pushed the code for this. It's on all the pro formas in the marketplace now, and that ROI with cost segregation tax benefits and inflation-induced debt destruction. Now, I must tell you, this cost seg estimate is a rough estimate, but it'll probably hold up on most investment properties pretty well. And Talk to your tax advisor. Taxes are a complicated thing, but cost seg is an awesome thing. So it's projected at 50%. That's not 15, that's 5-0%. Now you don't get that the second year because cost segregation, that's pulling your depreciation tax benefits forward. I would rather pay money later And save money now and get the advantage of having money now. Time value of money, inflation-induced debt destruction. Okay, but here is the calculation that goes into that. And you can always hover over the little i, which is called a tooltip, and it'll explain how the math is done in the software. So you can do the math by hand. You can just pull out your calculator. or pull out a piece of paper, do it longhand if you want, I don't care. And it shows you there's— everything's transparent here, shows you how the math is done. So now above inflation-induced debt destruction, in the net performance square on your Property Tracker pro forma, we have potential cost seg tax savings. And on this property, it's projected at $1,790 per month or $21,480 per year. Wow, this is phenomenal. I mean, this is why you all know lots of people who got very rich with investment properties. And you probably don't know anybody who got very rich in the stock market, or cryptocurrency, or precious metals or anything else, right? All of those things, they're not multi-dimensional like this. They're not tax favored like this. Income property is the best thing since sliced bread. Even before sliced bread, whatever. So we got more conservative on our appreciation projections, and the maximum— okay, you can always change it, but the maximum we allow is now 5%. It was 6%. If you look over the last couple of decades, depends what survey you look at. Of course, everybody can cherry-pick time periods. We all get it, right? But you know, 6% is a pretty reasonable expectation. But we want to notch that down to 5%. And, you know, during COVID I mean, gosh, you, you know, in, in a couple of years there, you made like 55%. So this is a very conservative number. We've got the inflation numbers in there, but cost seg is what we added. And now you can see the return potential with the potential cost seg tax savings. So it's pretty phenomenal. All right, I wanted to tell you that. Go get your free account at propertytracker.com. Start using the software. Do the pro formas. This is what will make you a good investor, because it will help you understand the math. There's nothing like doing it yourself, pushing the buttons, doing it yourself to make you understand it. And I really just can't recommend that highly enough. PropertyTracker.com, go get a free account. You'll love it. You can upgrade if you want, get a paid account, but you really don't need to. The free account does tons of stuff. So just take advantage of that. All right. Let's get to our main portion of today's episode, where we talk about how to dramatically reduce risk when investing in properties. And hint, hint, hint, LTI ratio. Yes, I invented that. That's the land-to-improvement ratio. We all know the LTV ratio, loan-to-value ratio. This is LTI. So listen up, here we go. Welcome, Empowered Investors. Great to have you. Be sure to join us for Empowered Investor Live. Thank you for all of you who have been buying tickets for that. We look forward to seeing you in April, in just a couple of months. Today I want to talk about packaged commodities investing. You know, yesterday I was reading this Wall Street Journal article and it talked about how there is this race. It said game is on to get construction materials and labor to rebuild Los Angeles, North Carolina, Georgia, Florida. I mean, so many places are affected by all of these different disasters right now. They said it was one of the scarcest times for construction materials and labor. So the race is on. Position yourself to own packaged commodities investments. That is the thing to own right now so that you are in the right position to benefit. From all of these supply and demand issues that are happening. So again, packaged commodities, assembled commodities, the Hartman Risk Evaluator, that is your thing to follow right now at this time. And we're going to do a little clip from a live presentation I gave about the Hartman Risk Evaluator, comparing it to fiat currencies, talking about things that have intrinsic value like these construction materials. And that is so, so important. So let's go ahead and dive into that. But for Empowered Investor Live, go to empoweredinvestorlive.com, get your tickets. It's going to be great to see you there. You got 3 ticket choices. These are the lowest prices they will ever be. So you can buy general admission very economically. If you want to upgrade, you can do VIP or elite status, and those give you some other benefits. But either way, it's going to be an awesome event. And we're going to have a whole bunch of our providers there. You can come and meet them. You can look them in the eye, all of the providers for all of a bunch of different things. So do not miss Empowered Investor Live. We haven't had this event for 2 years, so be there or be square. And it's at a beautiful, newly remodeled resort hotel that we've held many events at. It's our favorite venue for our events. So we will look forward to seeing you there in Southern California in just a couple of months. Go get your tickets in Empowered Investor Live. Today, let's talk about something from 20 to 21 years ago. And that is none other than the Hartman Risk Evaluator with current data looking at the producer prices of construction materials and what this means to all of us. Now, look, I have long said that as a real estate investor, that's not really the best thing in the world. The best thing is to be a commodities investor, more specifically a packaged commodities investor. Well, what do I mean by that? Here I am in my house and all around me there are commodities. In front of me, I see glass. Behind me and on the side, we see drywall or gypsum, right? And below me, concrete and of course other materials. I'm just naming some of them. In the walls, we have lots of copper wire for electrical. We have lots of petroleum products for all sorts of things in a house. And these are all commodities that have intrinsic value, and everybody in the world needs them. Everybody needs these commodities. So rather than going to the commodities exchange, rather than doing that— because if we went to the commodities exchange and we bought copper, for example, or we bought lumber, or any one of a zillion other commodities, We would not get 30-year fixed-rate financing. We would not get special tax benefits. We would not be able to leverage those commodities the way we get to leverage them with real estate. See, as soon as you stick the real estate label on something, suddenly you get all of these different benefits. But what you're really investing in largely is these commodities. And that's why with the Hartman Risk Evaluator— and I'll get to that in a moment if you're new and what that really means— this is a way of dramatically limiting downside risk on a real estate deal. That's the Hartman Risk Evaluator. But back to these commodities. So we want to invest in these commodities that have intrinsic value. Look, if I pull out this thing, right, what do you call this? Well, this is a $5 bill, and today it's called a $5 bill. But guess what it was called 30 years ago? It was still called a $5 bill, and the value of it has dramatically changed, and it's just made of paper. And now if I pull out these, these are Zimbabwe dollars. So this one is a 100 trillion Zimbabwe dollar. And it's basically almost worthless. And the $5 bill, the US $5, is not worth as much as it used to be. And all of these paper currencies have gone down in value. Now, the US dollar has been incredibly resilient, and it has lasted so much longer than other currencies have, and it has held its value so much longer because it is the reserve currency of the world, and it's likely to stay that way. But the history is littered with paper currencies that have zero value. It's a race to the bottom, folks. Every fiat currency ultimately goes to zero. But what has intrinsic value? Well, these commodities, right? The commodities, they have intrinsic value because, look, drywall, gypsum, concrete, lumber, petroleum products, copper wire, glass, steel. All of these things are needed because every human being needs shelter, and they are traded globally and denominated in many, many different currencies. So they have intrinsic value. So as a real estate investor, we get to be commodities investors in the best way. We get to invest in packaged commodities. I also refer to this sometimes as assembled commodities investing, because that's what it is. When you buy a house or an apartment complex, they have the land. That's one component. But then they come to the land, they bring all these commodities, and they assemble them, and you buy them in a big package. And that dramatically limits your downside risk as a real estate investor by being a packaged commodities investor. All right, well, let's look at the packaged commodities and let's see what they're doing. Now, this is a brand new report that just came out. I got it in my NAHB newsletter, National Association of Home Builders, because what are those home builders very, very concerned about? They're concerned about input prices, right? All of these ingredients, these commodities, these ingredients that they need to build houses— if they go up in price, they have to do one of two things: either cut into their profit margins and decide, hey, We're going to make less money. And then they have to go to their shareholders and they have to do an earnings call. And D.R. Horton, Lennar, whatever, Toll Brothers, whatever builder, right? They have to say, hey, we've decided to earn less money because the prices of all these commodities have gone up and the executives have all decided to take a pay cut because the prices of the commodities go up. Now, how likely is any of that? Very unlikely, right? They are going to simply pass the cost through to the buyers of their products, their homes. So they will raise prices. And this is one of many reasons that real estate is the world's best hedge against inflation. It's the best one because these commodities have intrinsic value. And they tend to go up in value, or at least they will hold their value because a piece of wood will always be worth a piece of wood. Now, this is one of the other reasons I created the Hartman Comparison Index. We haven't talked about that that much lately on the show. We got to get back to the Hartman Comparison Index a little bit. We have been working on that behind the scenes, making it better, adding more commodities. But that's what the HCI does. It compares the value of these commodities Trading against the dollar and against each other and against other currencies, because that's what really counts. It's not the nominal value of something, the name of it. This is a $5 bill. It's called a $5 bill today. It was called a $5 bill 30 years ago, but the value is obviously lower than it used to be due to inflation. All right. So let's look at some of these prices. for the ingredients, the commodities, the packaged commodities that have to be assembled or packaged into a complete home. So overall producer prices in February, they were up. And if you're looking on video now, what we're seeing here is we're seeing very high increases in these prices during the COVID era. But there was a lot of supply shock back then because of the supply chain problems. And we reported on that. frequently on many, many prior episodes. But if you look at the prices right around our time now, you see that prices are way, way up. And if you take out the COVID era, they are historically up at the highest increases on this chart. So these commodity prices are getting a lot more expensive. And what that means is that the end product The packaged commodities, the assembled commodities, will be higher priced in the future because the builders will simply pass these prices along to homebuyers. Now, what have builders done because of the housing affordability problem? Well, they have, of course, downscaled the size of their houses. They've made them smaller and they've made them cheaper. So they are now putting inferior finishes into these homes, and they are making smaller homes. to try and make the packaged commodities or the assembled commodities more affordable to the end home buyer, right? So again, that's going to skew the data a bit. Get ready for that because it's coming, right? It's coming. When you see some survey in the future and it says new home prices only went up by 5% last year, for example, What it won't tell you is it won't tell you that the size of the home got smaller and the quality of the home got lesser because the builders are doing shrinkflation, right? They are providing less, just like that bag of potato chips keeps getting smaller, that candy bar keeps getting smaller. In fact, the bag of the chips might be the same size, but it's filled with air and there are fewer ounces of potato chips in the bag. We've reported on shrinkflation many, many times. Now, Baselane, our sponsor, it is the number one banking platform built for real estate investors. It's banking, online rent collection, bookkeeping, tax reporting, analytics, and more. You can enjoy real-time cash flow analytics on your properties. You can get ready for tax season with automated bookkeeping and financial statements ready for your CPA. Join more than 40,000 real estate investors who trust Baselane to manage their rental property finances. Go to baselane.com/jason for a chance to win a $500 Amazon gift card. Okay, so this is the overall PPI, the Producer Price Index. That's what we're talking about and looking at now. But let's look at some specifics. Let's look at softwood lumber. Now, we all know the insane lumber price problems we had during the pandemic era, and they went through the roof. I remember one time during the COVID era on the show, I took a picture as I was out walking the dog one day. I took a picture with my phone of a lumber delivery truck, right, with, you know, with a bunch of 2x4s on it. And I thought, forget about armored cars. If someone hijacked this truck and stole it with that lumber on the back, that was incredibly valuable. Now, since the supply chain problems have largely cured themselves and the ships are shipping and the lumber mills are running and we don't have the COVID-era insanity we used to have, lumber prices have adjusted to a more normal level. But not really. Look at the difference between the pre-COVID era and lumber prices now. I mean, if you look at 2019 to today and we take out these radical price increases during the COVID era, we see that lumber prices are what, in terms of the index, they are dramatically higher than they used to be, right? So lumber prices much, much higher. Taking out the COVID era. Now, this one is absolutely shocking. This is wallboard gypsum, right? Drywall. And we look right here, and as I'm knocking on my wall here on my house, we see that these prices have absolutely skyrocketed, and they really haven't come down. They have just gone straight, straight up. They don't look like the other charts with the COVID supply shock type of problem. Okay, so here we see that this ingredient has become a lot more expensive. All right, we've got ready-mix concrete, same kind of chart, incredibly, incredibly expensive in terms of the price increases. And then we've got steel mill products, right? So steel, definitely an ingredient of your houses, and they're When we take out the COVID-era supply shocks, we see prices dramatically, dramatically higher than they were in the pre-COVID era. So all of these prices go into the Hartman Risk Evaluator. Now let's talk about the Risk Evaluator for just a moment. And if you'd like the full episodes on that and a full explanation on it, just go back, go to JasonHartman.com, type in Hartman Risk Evaluator or just Risk Evaluator on the search engine there, and it will serve up to you all of the prior episodes where we have talked about that. But why has the Risk Evaluator been so valuable to so many investors over the last 20 years? Well, it really came about when I purchased my first out-of-state property, and this was about 21 years ago, I guess. I was living in California and I was buying this property across the country which I had never seen. And I was buying a personal residence in California, and the personal residence at the time was $815,000. Now that property is well over $2 million, by the way. And the property across the country was $159,000, and I was using the same insurance broker, Jennifer, for both properties. And she called me up one day and she said, Jason, I've got your insurance quotes on both properties, the rental property you're buying and your personal residence. And I said, Okay, great. Fire away. What are the quotes? She tells me the prices of the insurance, but the key thing that Jennifer told me is she told me the amount of insurance. In other words, the amount of coverage they were offering. And here's what I discovered on the personal residence: that was mostly land value. Why? Because the insurance company only insures the house sitting on the land. It could burn down, so that's what they're going to replace and insure. And on that one, they said, we're going to give you $156,000 worth of insurance. I couldn't believe that this $815,000 property was only— $156,000 of it was improvement value, the house sitting on the land, whereas the property out of state, that was $159,000 total price And they said the improvement value was $135,000. So on that one, the land value was $24,000, whereas if you do the math on the Southern California property, the land value there was $660,000, just rounding off. Okay, so if you want to lower your risk as a real estate investor, how do you do it? What do you do? Well, if you want to lower your risk, you simply do this: you invest in mostly commodities, ingredients, packaged commodities, the things that make up the house. The walls around me, the ceiling above me, the floor below me, the big window in front of me— all of those packaged commodities, the glass, the steel, the concrete, the lumber, the petroleum products, and the labor, by the way. Labor is also a commodity. All of those things are much more insulated from market fluctuations than land. Land— when the money printer goes on and the money gets easy, land values skyrocket. Now, you've heard me talk over the last 20 years many times about 3 major types of markets: linear markets, cyclical markets, and hybrid markets. Just a little review here. Linear markets, if you're looking at a graph of appreciation over time, they just kind of chug along and they're kind of boring, right? There are small ups and small downs, but again, not very pronounced. Whereas cyclical markets, that chart looks like a roller coaster. Glorious highs, really ugly lows, and then highs and then lows and highs and lows through history, right? That's a cyclical market. Hybrid market, somewhere in between. Where are the cyclical markets? They are anywhere in the country and anywhere in the world that you have high land values. Now, another thing I invented to help understand this is what I call the LTI ratio, the land-to-improvement ratio. You've all heard of the LTV ratio. That's the loan-to-value ratio. Well, this one is the land-to-improvement ratio. And what it shows you is how much are you paying when you buy a property. You're not buying one thing, you're really buying 2 things. You're buying land and you're buying improvement— the house sitting on the land and the land below it. So what is the ratio of LTI? Well, in a good solid linear market with lower risk, better cash flow, better return on investment, and usually landlord-friendly laws, okay, and usually more conservative government— not always, but most of the time— leading to landlord and business-friendly regulations, this land-to-improvement ratio will typically be somewhere around 80/20. It'll be 20% land value and 80% improvement value, whereas in the cyclical market it will be the opposite of this. It'll be— the vast majority will be land value with very little improvement value, leading to much higher fluctuations. Now, in a cyclical market, you can make more money on appreciation being a speculator during the good times when the money printer is printing and the money is just flooding the markets. You will make big home runs in cyclical markets. However, you will have to support that property with negative cash flow or dramatically higher down payments, which means you have an opportunity cost because you can't use the money for something else. So we don't like cyclical markets, okay? Although, you know, occasionally you dabble in them a little bit, you just don't make that your main thing because it's very risky, and we want to be prudent investors Investing for the long term, not gambling, not speculating. We are investors, not gamblers and speculators. 10% of your net worth, okay, gamble a little bit, speculate a little bit if you want. Occasionally you'll hit a home run and that'll be great. But most of the time you're going to do better in the boring linear market where prudent investors invest. That's where you're going to make your real money that's reliable and dependable. In the linear markets. All right, so you want to invest mostly in commodities because commodities are more stable. Land— yes, it's fair to say land is a commodity. That is true. But land prices fluctuate like crazy. So it is a much riskier investment. And you want to monitor the cost of these commodities, of these inputs, of these ingredients that builders need to build houses because it sets something of a floor as to how far things can decline in a declining market. And when we look at the linear markets, no matter what cycle you're in, those have a much lower decline. Why is that? Because the commodities, they could get cheaper during a recession, no question about it, but they won't get that much cheaper. And the prices of those commodities are influenced by natural disasters and by development all over the world, not just in your market area and not just in the U.S. So when there is a catastrophe in some other part of the world or a war and they need to rebuild these areas, that increases the prices of all of those ingredients of a house globally, not just locally. So, you know, the old saying that I always talk about All real estate is local, right? Definitely true. That is true. But when you invest in the boring linear markets, the sensible markets, you get the best of all worlds. You get that local linear market that's conservative and prudent, but you're investing mostly in commodities, packaged commodities, assembled commodities. So you get the benefit of all of the consumption of those commodities worldwide because they're traded worldwide. So when you look at these prices of these builder inputs, whether they be steel— and I'm just going backwards now— steel or ready-mix concrete or gypsum or wallboard or softwood lumber or overall producer prices, you see that as a good linear market conservative prudent investor, you are going to win The game. Much better than keeping your money in this stuff, and definitely much better than keeping it in this stuff. And by the way, for those not watching on video, I held up that $5 bill, then I held up the $100 trillion of Zimbabwe. Well, that's just one bill. I've got many Zimbabwe bills here. $10 trillion Zimbabwe dollars, $20 trillion Zimbabwe dollars, $50 trillion Zimbabwe dollars. It's absolutely shocking how fiat currency always goes to zero. That's its ultimate destination. With the US dollar, since the US has got such hegemony, it's going to take a very long time to get there. I'm not worried about the US dollar losing its reserve currency status anytime soon, folks, but it will happen eventually. It has to. That's the direction of all fiat currencies. So you are much better off investing in commodities, things that have intrinsic value, like all these great ingredients of our single-family home investments. Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out the show's specific website and our general website, hartmanmedia.com, for appropriate disclaimers and terms of service. Remember that guest opinions are their own, and if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.