647: Unlocking Financial Success- A Guide to Building Wealth in Uncertain Times with Meet Kevin

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Welcome to the Holistic Survival show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary to survive and prosper? The Holistic Survival show is your family's insurance for a better life. Jason will teach you to think independently, to understand threats, and how to create the ultimate action plan. Sudden change or worst case scenario, you'll be ready. Welcome to Holistic Survival, your key resource for protecting the people, places and profits you care about in uncertain times. Ladies and gentlemen, your host, Jason Hartman.

It is my pleasure to be interviewing. Meet Kevin on his private jet. Isn't this gorgeous, this beautiful phenom 300? It's an absolutely gorgeous plane. Beautifully appointed. But more important than that, we've got an expert here in so many things. Of course, you've probably found his channel on YouTube and it's great to have him on today. Kevin, thanks for coming out to Dallas to see us. Kevin was a speaker at our collective Inner circle Mastermind today and everybody just loved your talk and we just want to hear more about your thoughts on the economy and where we're going.

Yeah, it's kind of like we got hit with this massive hurricane and so much was messed up because of that, specifically prices being so elevated now with the inflation that we've gotten hit with and, and now I guess that better analogy would be the earthquake analogy. I like that one better because we can think of aftershocks. So there's a big storm or a big instance that happened and now we're dealing with the aftershocks, the geopolitical aftershocks, the Ukraine, Russia, Israel. A lot of these things are due to pent up frustrations, in my opinion, with not only political issues, but then also just individual consumers are very frustrated with inflation that has occurred. So that frustration is going to take years to get away. Much like 1982, 83, where I think that's probably more where we're similar to that. We had the crash of the early 80s and now we're coming out of that. It could take until 20, 26 or 7 for people to really feel, wow, inflation really isn't taking off again. Yes, prices are higher, but they're not rising anymore.

Right. You're making me think of consumer sentiment.

Oh, yeah.

You know, that seems to be pretty positive. In the holiday season people were spending and a Lot of people were surprised by that because you look at credit card balances, they're higher, auto loans are in trouble and you know, the car market's definitely softening. So putting that all together, there's a lot of other factors too. But what do you make of those?

They're definitely cracks forming. And I think the cracks that are forming are the starting sign that the Federal Reserve's got to take the foot off the brakes, so to speak, which is the raising of interest rates. So if the Fed fails to respond quickly, we're going to have a joblessness recession really quickly. Once that cycle begins, it's too late. Jobs as we know is, they're a lagging indicator. So as soon as people start losing their jobs, it's already too late. The cycle of unemployment has started. The Fed's really got to act to prevent that. And I think they will. I think they realize that they've solved the inflation problem. They're not going to declare that victory because that could unanchor expectations, which they don't want to do. They're playing with people's psychology basically. But I think there's a chance we can lower rates substantially, even turn the proverbial money printer on again and essentially expand government debt and kind of just keep the game going. Coming out of the shocks of COVID.

Kick the can down the road. That's what they always do.

Well, eventually it's all going to collapse. There's never been a single fiat currency that has existed that has not collapsed. So it will collapse eventually. I just don't think that's it.

Right. Yeah, and I agree with you. I think they can kick that can down the road for a long, long time. So Kevin, when you talk about the Fed and jobs and their stated goal has been to increase unemployment, Right. They literally want to put you out of a job, you know, which is kind of weird. But it sounds like you think the Fed went too far in the tightening side. Right. And maybe let the money printer run too long.

Oh well, absolutely. They were definitely late. But the problem is if they're late now, they could cause something that's much more irreversible. Massive joblessness. Because again, that vortex that starts, you know, one company lays off which now you have significantly less consumption by all those people and they can't get new jobs, then the next company lays off and so you create a self fulfilling cycle that's very hard to sort of stimulate your way out of. That would be very bad. I think supply chains are loose enough now that we could Actually expand demand without causing inflation again. The big bear argument now is that, well, yes, things are going to get bad, something's going to break or the Fed will realize they've gone too far, they'll print money again and that'll cause inflation again. I actually don't think it'll cause inflation again. I think if they don't print money, we will have deflation. So they will print, essentially, thanks to innovation, will face deflation and the money printing, the support that they give the economy will just bring us back to that 2% level into this is the.

Concern and you just very slightly hinted at it, and that is the technology side and job displacement. In the last just over a year, we saw amazing, literally amazing advances in artificial intelligence. And now the whole world is understanding what that is, getting an idea of what it's capable of. And you know, it's capable of way more than we've already seen, of course, but everybody's talking about it. It's interesting though, Kevin, because throughout history, every technology that has come along from the steam engine, before, after the steam engine, the cotton gin, et cetera, et cetera. Right. Have all been net positives for jobs and for the economy and growing the pie and making people richer.

Yeah.

Is it different this time?

Well, yes and no. I think it won't be different in that I think as the economy grow, grows and per capita GDP increases, everybody is generally better off. However, there is also realization that the more we print, the more the rich get richer and the wealth gap widens. So while I think net humanity will have a better standard of living, the difference between the working class and the wealthy will be vastly more extreme than it even is today.

And it's pretty extreme.

It's already very extreme. It's just gonna get worse.

Yeah. So why is that? Is that sort of like cantalon effect or what's your take on that, on the wealth?

Well, I think one thing that protects you from the expansion of money supply, money printing, inflation, the inflation that they're forcing is owning assets. And so generally working class doesn't own assets. And that is going to consist of businesses and real estate, obviously stocks, but stocks are really just shares of businesses. So businesses and real estate. So there's the. Look, we have a capitalistic economy. Capitalism rewards the ownership class first who have capital. Right, exactly. Yeah.

It's in the name, as the name would imply.

Right. So they, they get rewarded first almost always. That's why there's so much frustration of. Look at this last 10 year expansion. Jerome Powell Wasn't cheering lower black and Hispanic unemployment until 2018 and 19, and said, finally, minority races are benefiting from our capitalistic and expansionistic policies that took a decade from the global financial crisis to actually start seeing those benefits accrue in minorities. And the Fed was cheering that. But that means wealthy folks who survived the GFC started benefiting immediately. People who bought real estate in 2011, 12, 13, they started benefiting right away. Businesses that were created in the early years, after the recession, they started benefiting right away, but the minority working class did not until the end. And then Covid hits, right?

In other words, they don't. When that cycle happens, the working class that doesn't have much capital, right. They don't benefit until they're hired or they get a raise. Right? But all the people that own all those assets, they benefit right away because those assets inflate. And if they have debt against the assets, as I talked about on your show, debt devalues vis a vis inflation, right?

And they will never want deflation because deflation would be depressionary. It would be very bad.

Oh, it's a terrible spiral.

Very bad.

It's the worst malady, I always say.

That's interesting. Good to hear that somebody else said, because, like, right now, it seems to be a trend that people are like, oh, no, I want deflation. Like, oh, you don't, because you'll lose your job, companies will go bankrupt, you lose your house, you lose everything. And that was my childhood, okay? So my childhood. I lost my childhood home because my father's business collapsed and we lost our waverunner, my school, the friends. I had, everything. So I went through that hell, and I never want to go through that again. So that's very painful, and I don't think people realize that. So deflation. Dronepile knows this. They won't allow deflation to happen. They will print very quickly and massively.

Right. And so the Elliott Wave people and Harry Dent, they. They think deflation could happen, but they can always make sure deflation doesn't happen because there is no limit to the printer, right? There's no limit to that.

Right, yeah, but.

But back to the technology thing, which is deflationary. That's deflationary, right? Yes.

So it's a license to print. The more we innovate, the more they're allowed to print.

Well, right, because it gives them license to do it because the technology is deflationary against.

Yeah, exactly.

Yeah, that's a very good point.

If they create 4% inflation, we're a negative 2% due to innovation.

We' and the reason that deflationary spiral is so deadly is because everybody starts to think, well I'm just going to delay my investments, my purchases because they're cheaper.

Right, well that and you won't want debt because the debt will become more expensive.

The debt gets onerous and with a debt based economy they're just very likely to ever let that happen, right? Yeah, yeah, absolutely. Okay, so let's maybe switch gears for a moment to what people watching or listening can do about it. You know, and you have, you know, I mean you have so many licenses in addition to your driver's license. I'm not much of a stock market person so I kind of like you to talk about the stock market and you know, I mean, do you like Dividend Aristocrats or you know, what do you like?

Well, I think most people probably just shouldn't touch stocks until they own real estate. And their net worth is in excess of 500 to $1,000 to a million dollars. Mostly because I think with, you know, just the arbitrage, you could do with a 30 year fixed rate mortgage on a Fannie Freddie loan, on a single family house, duplex, triplex, fourplex, you put three and a half or four percent down. Why would you not buy single family or duplex real estate and lock that debt in for 30 years talking owner occupied.

In that case.

You can only occupy one of the three or four units.

Yeah, but, but so you live there for a year and then if you want, you move. Right. You have a built in rental property.

Right.

You don't need much, you don't need much money. The danger is people over improve when they buy real estate because, well, I live there. So it has to be, it has to be their way. That's bad, very dangerous. But yeah, I would buy, I would try to control assets, so I'd control real estate. And if, if I was working at a company, I would try to expand my ownership within the company, stock options or if I was creating a business, I would want to expand that business. So business and real estate first talks later.

Yeah. Okay, so at that later point, yeah, net worth of at least 500,000 to a million dollars or above. Obviously someone's looking at the stock market and I want to ask you about this because I really hardly ever talk about stocks and you're a guy to ask, right?

Well, I think something that maybe is something you can consider in a retirement portfolio. But I hate the idea of somebody sending me a check and me having to pay taxes on it.

Right.

And so I'd rather than having a dividend company of a growth company, but it depends on where you are in your life stage as well. Usually I argue, when you're in the accumulation phase, you should be acquiring assets. And honestly, growth stocks is what I generally think. Now, that's. That's not specific advice to anyone. I mean, it's just super broad based of a suggestion, and you get to get exposure to that, obviously, through just The S&P 500, you know, ticker Spy, for example, or qqq for the NASDAQ 100. Very, very simple. But most of the time, the biggest enemy you face in stocks is yourself, because you look every day and you see the fluctuations.

So glad you said that.

It's very bad. It's psychologically damaging because then people also get into trading, which then amplifies how often they're in the app. And basically, moods are dictated by what the stock market is doing. That's bad.

Very bad.

Yeah.

And it's very hard to hold when things are going badly. Right.

Because you think you made a mistake.

Right. The psychology is the hardest part about that.

Yeah. Because, like, if. What. What do you. What can you do if you bought a stock and it falls? Well, generally when we have pain, there's fight and there's flight. Well, flight is selling. You can't fight it. So you only have one option.

Right.

It's. It's keep, you know, or flee.

Right. Suffer through that very, potentially very long winter. Yeah, yeah.

Oh, yeah, yeah. So. So that's. It's very unfortunate for stocks, but that's why I also like real. It's not measured every day, so that makes real estate a little bit more relaxing. And also, when real estate crashed in the global financial crisis, your max decline was somewhere around 1.9% a month. Max.

Right.

Okay. Well, like, just as we were pulling it over here, we're like, oh, what's Southwest stock doing? Oh, it's down four and a half percent in a day, right?

Yeah, we literally look that up in the car on the way to the plane. Yeah.

Four and a half percent in a day. That's the equivalent of two months of real estate that happened in a day during the global financial crisis. Happened in one day.

So I'm really glad you brought this up, because all of the fans of the stock market, the stock people will say, I don't like real estate because it's too illiquid. You know, with my stocks, I can go online or in an app, and at the click of A mouse or a tap I can sell and get out of my position. But I've always said that liquidity is what creates the volatility.

100%. Yeah, yeah. I mean there's, there's a benefit to. And if you need to sell real estate quickly, you can. I mean, if you put properly price a property, it'll sell within three days and it'll be closed within 45. So. So real estate can be liquid. You can also finance it usually within 60 to 75 days. It can be liquid, but yes, not daily. Which is probably good to protect yourself from making mistakes.

Exactly, exactly. It's, it's. The prices are very sticky. They move slowly. You, you have time to think.

Yep.

And figure it out. Versus the stocks. They're so erratic.

Agreed.

That you can, you can really get in trouble. So what does Kevin think about, you know, cryptocurrencies, precious metals, life insurance products? You know, because a lot of life insurance is marketed as an investment.

Yeah. I'm not a big fan, but probably because I just don't understand all the intricacies of it. I mean I've taken so many licenses and that's the one part where I'm like, I understand enough to pass the test, but. So that's a tough one for me. I understand term life insurance, but the investment related products, variable life, you know, whole. No idea. One of the things that I run into is I see people who have those plans. The fees can be very high. So I think as long as somebody's paying attention to what they're doing, I'm sure there's, there's a great feature there in that I'm not much of a commodities person. Mostly because I see less of an opportunity to find a way to differentiate value. You know, one bushel of hay isn't necessarily better than somebody else's bushel of hay.

So you don't, you don't have pork bellies and coffee beans and none of it.

I would drink coffee daily and I'll eat.

And so what about, you know, commodities, like building materials? I mean, you like real estate?

Yeah, I mean, look, I think it's great, but for what's, what's crazy is, you know, this like. And this my naivete. And so I don't know much about commodities. I just know during the pandemic we had, everybody's like, oh, Ev is going to take over the world. Lithium prices skyrocket. Well then Elon Musk on earnings calls is going, oh, you want to get rich? Just print money with a lithium you know, mining facility. So now all of a sudden you have this massive expansion of supply of lithium suppliers and the price of lithium has collapsed. It could be cyclical, it could be supply. It's probably both. I, I just don't know. I don't know. It's like on the levels of competency, I know I don't say one of a very well performing asset for me. And I only bought this because somebody dared me to. I bought some uranium that, that's done very well. I have no idea why. I just look at it go, ha. See, I bought uranium there.

There are factors that experts know that regular novice investors, they just can't know all these things.

You almost have to pick like, you know, the fact, the fact that real estate and stocks is very rare. Usually you have folks do one and you look at, for example, they're real estate agents and then they're financial advisors. Most financial advisors don't touch real estate, which is ironic because you're supposed to advise people on finance. But how do you do that without doing real estate? Well, there's no commission in it. There's no aum. So. So it's very bizarre. But yeah, they're two, almost two different worlds.

You know what I always say, Kevin, is that the world of Wall street and all the financial advisors, they have the best sales force, they have more sophisticated people and. But they have the, you know, asset class, it's not as good. Now real estate has the worst sales force with the best asset class.

Oh, I didn't know where this was going.

You're not going to get investment advice from a Realtor most of the time.

Right, right, right.

I mean, listen, there are some, there's.

Some great who invest. I always like to say, if you could find a Realtor who invests, that's great, but it's also oddly rare.

Yeah, I know, it's terrible. Most of them are just making commissions and trading, which by the way, you know, I don't know if you have any opinions on this, but you know, you were in real estate, right? The big nar lawsuit.

Yes, yes.

I mean, for those who don't know, there was a giant lawsuit class action that is now being copied all over the country. $1.8 billion verdict against major real estate players, including the national association of Realtors, which is really trouble. Damages. It's 5.5 billion with a B. Okay. And now there's a ton of copycat lawsuits. Is that an industry? Game changer for a giant industry.

Yeah. I mean, not immediately just because of Habit, really. What, what it will do is it'll start slowly, very slowly. I think sellers will start realizing, oh, I can, I can list properties on the. With zero commission. I don't know how they're going to pull that off, because who's going to list it?

Who's going to sell it?

Right. So if, I don't know, I mean, I personally, I think. Let's go to the extreme. What is the best case scenario for property transactions? It's one national mls, one database. Everything goes into the fact that there are different numbers in different sales reported on Zillow. LoopNet doesn't have any sales history that you can get easily for commercial property. Exactly. You know, Redfin has different data. The mls, it's a. No, it's a terrible.

It's a mess.

It's a mess. You know, some properties don't even show up in the database. You have to find them in the tax rolls. It's terrible. So the, the information asymmetry, though, creates opportunities to actually make money. But is it the best for a regular consumer? Now this current system is broken.

It is broken. And I, I totally agree with you there, but when you look at. Compared to what, I mean, compared to other countries.

Oh, it's even more broken.

The US has fantastic data.

Yes. Way better.

Many of these other countries, even developed countries, they don't even have an mls.

There is no data.

Shocking.

Yeah, you go to banks, like, I think in Germany, you go to different banks and they all have their own listings.

And we were both born in Germany, by the way. That's funny. Commonality. But, but yeah, you go to, you go to different estate agents and it's a different set of listings. So it's very hard to understand value and comparables and things like that. Yes. So we have it better than that. Yes. But like you said, that asymmetry of information really is where opportunity. If you're smart and you, you know, you watch your channel and you're, you're learning this stuff, you can benefit from it. And that's, that's why, like in stocks, you know, it's, the market is too perfect.

Yeah, right.

You can't, you can't go to your say, hey, I've got this Apple stock and you know, I know it's trading at $150 or whatever it is, but I really want you to push it and market it better and sell for 170.

Yeah, right, right.

It's impossible. Right. Because everybody. The trade price.

Right.

Yeah. So, so that's where opportunity.

I agree yeah, yeah.

Good stuff. Well, any final. Do you want to say. I know you're getting ready to take off. It looks like the crew's ready to go and I just got you before you're headed back home.

No. Yeah, that's it. Thank you. And yeah, get. Get your hands on assets and stocks, real estate businesses, and figure out a way to. To provide more value. That's always the hardest thing is like, how do I provide more value to my boss? How do I provide more value to my community? How do I provide more value to my customers? Because eventually you'll get rewarded.

That's actually one thing I didn't ask you. So final question is on businesses. Yeah, right. Any particular types of businesses you might recommend people look at. Consider the easiest thing to start with.

Is a professional service because you could go from, you know, zero to 60 really quickly. Somebody who has no skill whatsoever can get a real estate license at 18 and, you know, within a year, training at a brokerage, which they basically hand out for free because they're hoping for you to get licensed, like to sell you. You can be professional. And so that's amazing to think that you can go from no skill to professional. And there's a lot of value in that. So that could be the same thing for a little harder in some trades. But if you want to be a lender or cpa, a nurse, whatever, but getting to that professional designation level, huge game changer for income.

Right. And then there's all kinds of things that could spawn out of that. Right. You might discover something missing in that industry that needs to be filled and you can fill it. Yeah, that's. That's great. Kevin. Where can people find you? You're all over YouTube, obviously, but, you know, just give out any.

Kevin. M E E T. Not M E A T. Meet Kevin on the Internet.

Awesome. Meet Kevin. Thanks so much.

Thanks.

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