CW 1104 - Market Softening, The Peter Principle & Setting New Year Goals

Thought the event was amazing. I thought that I knew a lot about real estate, but coming to your seminar, I realized there's a lot of things that I don't know. And one thing that you did, besides teach me a lot about real estate, is you inspired me to look beyond where I live and to, you know, kind of shrink down the world and make it smaller so that I can invest in places that are further away and get better returns. So I really appreciate that and I'm excited to be here this weekend. And again for me and from all the people I heard there, thanks for doing these events because they're great.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants, and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode 1104. 1104. This is your host, Jason Hartman with the last episode of the year. Yes, we've got another New Year upon us and a great quote that is really not just about the New Year, but it's about all of life. This one is from Vern McClellan and it says what the New Year brings to you when will depend a great deal on what you bring to the New Year. And isn't that the truth about everything in life? Right? Life is a do it for yourself, a do it to yourself project. Right? It's a diy, a do it yourself project. And it is a project that is always under construction. Life is always under construction. The road to success is always under construction. One never arrives at a point called success. They just constantly iterate and adjust the course along the way. And when things go wrong, they go through the problem. They just take care of it. That's the way successful people work. So what we bring to the New Year will decide how our New Year is, isn't it? And what we bring to life will decide how life is for us. That's the way it works. And we all know this logically. But do we always act that Way, when it comes right down to it, right? That's the thing. So that's the trick, that's what we've got to do is remember that it is what we bring to the table that matters, right? So a lot of stuff going on, the economy is definitely changing. High end housing markets. And when I say high end, you know, that is such a, I don't know, I have problems with that phrase. High end, what does that mean? High end, low end, you know, middle end, whatever. But the market markets on the coast, the higher price markets, the cyclical markets around the country and around the world are starting to show signs of significant suffering. We've been reporting on this for a long time here on the Creating wealth show and my other podcast. And there is no question it is happening. No question. We should be mindful of that. Now I've always noticed in my many, many, many years, well, I could say in my few decades in real estate now, the only real career I've ever had, the real estate career, you know, I've always noticed that in each cycle and I've been through many cycles, not like a lot of these inexperienced so called gurus out there. It will either start at one end or the other. Sometimes the first time buyer market, the slow end, the low end of the market slows down first. And sometimes the higher end of the market really gets very squishy first, right? And it changes. But this time it's definitely the high priced market that is very squishy, very soft. You know, I just like that word squishy. Talk about a word that describes something accurately, right? Squishy, pretty good word. Anyway, that part of the marketplace is very soft and why we have to be mindful is, look, hey, we're not investing in those markets because they don't make any sense. They never make sense. Even when you buy at the bottom of those markets in the troughs, the properties don't make sense. But, but, but, but we have to be mindful because this, like so many things may well trickle down. It certainly has not yet. The low priced entry level housing markets are still very, very tight. Inventory, very tight. But that too will change at some point along the way. So buy the properties, right? Long term vision and all the other things we talk about on the show and you'll be okay. So couple little updates, little economic news here. A recent survey of homeowners showed that aesthetic appeal, affordability and commute times along with a neighborhood character were the top reasons for picking a home. Now you, you know, a statement like that Just makes me wonder, do you really need a survey to tell you that? I mean, what else are they going to say, right? Are they going to say, well, we really like ugly, overpriced homes with long commutes in neighborhoods that completely lack character? Yeah. You know, sometimes you really wonder why you need a survey for something like that. Okay, now, we have not talked, although I should have talked about it last week, but time did not permit. We have not talked about one of my favorite things, the government shutdown. Yay. Yes, with the government, it's called a shutdown, but it's really not a shutdown. It's a shutdown of some departments of our massively over expansive, over intrusive, ridiculously overweight government. You know, some of the departments have shut down. So our government workers, when I'm talking about the workers, that's different from obviously the lawmakers. I should really say the lawmakers. Right, the lawmakers, when they are on hiatus, they're not available to restrict our freedom. Yeah. They're busy doing something else. Right. But when they're in session and when they are putting their dictates through to these various government agencies, when those agencies are in operation, what does that do for us? I would submit to you, you know, maybe some of you will disagree with this, but then again, you're probably not looking at it deeply enough. I'm just saying. Okay, but I would submit to you that they do very little to improve our liberty and a lot to restrict our freedom. That's what they do. And the concept of anything in government is always, you gotta do more, you gotta do more. And what does doing more in the world of government mean? It means rob Peter to pay Paul. It means that. Right. That's always what government is doing. Right. Robbing Peter to pay Paul. The other thing they do is they got to make a new law, a new regulation, a new restriction, a new way to squash our somewhat squishy freedoms. Right. You know, if the founding Fathers saw what we have today, they would be rolling over in their graves, as the saying goes. And I'm sure they're doing that. Right. But yes, I am in favor of a government shutdown because it really shows us. Now, look, I know it's massively inefficient. It causes many inconveniences, including things with real estate. Right. It slows a lot of real estate deals down. But, but, but that's just temporary. Look at if these parts of the government were to permanently shut down. Right. Then the market would work its way around this Stuff A lot of people don't realize that, right? They think, oh my gosh, the government shut down. Look at this inconvenience. This is why we need it open right away. Please think differently, okay? Think differently about that, right? You could think that, well, what if this whole area of the government just went away forever and then we wouldn't need the government at all. It wouldn't be in our way. And if we needed something there, the private sector would have filled that void like they always do. You know, I was talking to my girlfriend just this morning about this, okay? And she sells on Amazon, okay? Sells products on Amazon. And it is amazing to me how when a new product category has like one seller, right? And then the word gets out and the capitalist market, the free market responds so efficiently and so many more products, so many more sellers come in to fill the void. She, for example, is always searching for a new product to sell, looking out into the marketplace and saying, what are the needs? What does the market want? What will the market pay me for? You know, we're traveling around Europe and she's looking at this trinket, that trinket, that product, is that something people would buy? You know, always thinking, how can I feel fill a need? How can I create that win win that takes place in a free market? The government, on the other hand, does the complete opposite, right? Most of the time, not always. Look at, I, I'm not an anarchist, okay? I like a little bit of government. I like the government. We can see, okay, the, you know, any 10 story government building, as the old saying goes, you know, keep the first three floors, all those people are actually doing real work, right? We need those people, you know, police, fire, some degree of regulation and, and governance, right? I'm not an anarchist, but the top seven floors above those where the mostly overpaid bureaucrats fighting to keep their jobs, victims or the taxpayer is the victim of what's known as the Peter Principle, right? Remember that old book from many decades ago, the Peter Principle? I remember when I was a young kid, I pulled it off my mom's bookshelf and she was reading it to me. And at a very young age, I don't know how old was I back then? Maybe, oh, seven or eight years old, right? Back then. I remember her reading the Peter Principle to me. And the Peter Principle is, is that everybody in their career or in life in general, think about this and think about how it applies to the person in the mirror, right? I think about this, how does this apply to me, right? And it does it applies to me? It applies to everybody. We all reach our level of incompetence. Yes, the Peter principle. We reach our level of incompetence. And when this happens inside a big corporation or in even more so in a worse way in government agencies, right. We reach our level of incompetence. You know, we, we have competence at a level, we get promoted, we have competence on another level. We get promoted, we move ahead. And you know, maybe you don't have a job where you get promoted. Maybe you're a salesperson or an entrepreneur or some kind of independent contractor. So there's not an official promotion, but you basically promote yourself because you become more efficient, you earn more money, you know, your hourly rate goes up. Right. It doesn't have to be a named promotion like it is in big organizations or the military or government or in a big company. Right. You don't have to have a title with it necessarily. But you know what I mean? There's still a promotion that occurs and this eventually stops. Right. And at some point we've reached above our pay grade. This happens all the time. I've seen it over and over. You know, we have these laws in the US that you can't, as an employer, you can't discriminate on the basis of many things, including age. Right. So we have these anti discrimination laws to protect people who are over 40. I believe over 40 is when you can claim age discrimination. Right. And so guess what happens? And I've seen this happen tons of times with 50 year olds or 50 plus year olds. They reach a very high level in their corporate job and they've many times, not always, but many times have reached their level of incompetence and they're getting a massively high salary or, you know, a massively high comp plan with bonuses and stuff. And then guess what happens? You know what I'm gonna say, don't you? Do you know what I'm gonna say? They get laid off, right? They get laid off or they get fired and then they can never regain that same level. And they wonder what's happened, right? Well, the world has changed. And they're right about that. The world has definitely changed. There's no question. Right. When they were doing that job for the last 20 years, the world changed around them. No question. But you know what they do. And you know how I know so many of these people? They get into real estate. Yeah. And I'm talking traditional real estate. When I used to have my traditional real estate company from 1997 to 2005, when Coldwell Banker bought it from me, and that was in Orange County, California. And I had many, many people who were like 50 plus people. I mean, maybe in their 40s sometimes, but mostly 50 plus. They had this big corporate job. They were earning many hundreds of thousands of dollars a year, and they got laid off. And so what do they do? The default answer is, hey, I'll get into real estate. I know a lot of people, I live in an expensive area here in Irvine or Newport beach, and I'm going to sell houses, right? And they struggle. They. A lot of times they struggle because they don't have the mindset of the entrepreneur where you've got to go out and spend money first and make effort first, and then hopefully you got to have faith that those rewards will come. Well, the same is true with real estate investing, right? Because as we move into the new year, and I want to liken this to how I would train real estate agents over many, many years. You know, a lot of us have New Year's resolutions about our investment portfolio. Some of you are saying, I'm going to buy one or two properties every month. So I'm going to acquire maybe 12 to 24 properties next year. Many of you listening, who are our clients? I know you'll do that and we'll help you do that, and we love you and thank you for your, your faith in us and your continued business. And some will say, well, I'm just, I just want to buy a house a year. If I can buy one property per year for the next 10 years, that's going to be a nice retirement for me. Right? And so that's your New Year's resolution. That's your goal. Acquire one more property, acquire six more properties, or acquire 12 more properties in the new year, whatever that number is, or 24 more properties, whatever it is, right? Whatever it is, just stay on that path and do it and take incremental steps to move forward on that path. Now, here's one of the things. When I would train real estate agents, many of them who reached their level of incompetence in corporate America or maybe a government job and in the government. The problem is, the problem with the government is they don't lay people off, right? You know, those jobs are way too secure. And so people really lose their edge. It's not good for the person, right? You'd think it's good for the person, right? Hey, you know, it's good to have a squishy, cushy job. You know, it's easy. I'm making a lot of money, I got job security, blah, blah, blah. But you know what? That might seem good on the surface, but it's really not good at all. Why is it not good? Because it causes people to lose their edge. They become lesser people. It's like my mother when she graduated from UC Berkeley in the 60s. Nonetheless, remember Berkeley in the 60s? You know what I'm going to say what it was like back then, right? And she got a degree in social welfare and she became a social worker. Can you believe it? I am the kid of a social worker who graduated from liberal berkeley in the 60s of all things. I know, it's crazy. And mom and I share pretty much the same political views most of the time. It's kind of odd that she has those views because she doesn't seem like it with her background. You know, she grew up poor, upstate New York on a dirt road, goes to Berkeley, very good school, but very left wing school. Even then back in the 60s, you know, the hippie era, and then gets a degree in social welfare, not business. And then guess what, after that, she becomes a social worker, right? And she saw she was responsible for knocking on people's doors, having cases, visiting people, visiting families, and doling out government welfare to them. And she said she couldn't stand it because after doing that for a few years, she saw how the more money the government gave these people, the worse they became. It didn't make them better people, it made them worse. It took off their edge. It made them lazy. You know, as humans, we all need some challenges. You know, we. We need to engage in the chase. I just got back from my daily ritual, sometimes twice a day, hopefully of taking my dog out and throwing the ball to her. And my dog is a predator. Wow. She is a. Dogs have several drives, you know, if you know anything about dogs, right? They have a prey drive, they have a food drive. You know, they have an affection drive and a, you know, they have all these different drives, just like we do as humans, right? We have the same drives too, in a different sort of way. But my dog has a very strong prey drive. She loves to chase prey. You know, if it's wabbit season, she loves chasing those wabbits. Let me tell you, those wabbits, you know, duck season, the ducks not so much, but wabbit season, definitely wabbit season. And so she loves chasing the ball because the ball is prey, right? And you know what I notice is that the more challenging I make it for her, the more she likes it and the better she gets at it. Right? So a little challenge is important. Take relationships, romantic relationships. Right. You know, there's this tendency when you're in them for a long time. We all do this. I know. We all do it. It's not just me. We're all pretty much wired the same out there. You know, after a while, we sort of become complacent. We get a little lazy. We gain some weight. We stop doing the things that got the person interested in us in the first place or us interested in them. And you need to keep a little edge in the relationship. Right? A little edge is good. Right? And so this is true of all things human. We humans, generally speaking, we all like some challenges. You know, steel is hardened by fire, right. Diamonds are, you know, polished by pressure and. Well, they're made by pressure and polished with friction. Right? So this is all good stuff. Right? So don't lose your edge and do things to increase your edge Intentionally. Sometimes. I would submit in the new year, right? Intentionally, once in a while. Don't make this a habit. It's just something you do once in a while. Do things to make your life harder. Intentionally. Yeah, I really said that and I really mean it. Do things to challenge yourself. Do things that will make life harder for you. Sometimes. Don't do it a lot, just do it a little bit. Don't be a masochist about it, but do a few things that are going to make you grow, right? You know, you got to prune a tree, right? And it grows stronger when you prune it. Many ways to do this, obviously, but one way is the mastermind, the mastermind principle. Getting in a mastermind group because you'll be challenged and held accountable. Come to events like our upcoming Meet the masters. Jason hartman.com masters many of you have started registering for that, so we're looking forward to seeing you there in Southern California in March. Okay, so that's coming up. We're going to announce more specifics soon. But you got super early bird prices, which, by the way, if you're listening to this Monday on New Year's Eve, you've only got till Friday. Then we the price goes up. Okay, we're on a super early bird price right now. So those tickets are very, very cheap. Go ahead and get those. We will be announcing speakers and topics and all that kind of stuff. This is our 21st anniversary Meet the Masters. Go to jasonartman.com masters and get your tickets ASAP. And here's the thing is, I would train agents Though I want to get back to that because I think this is very true of investors. You know, one of the things non entrepreneurs come to the mindset, they come to the mindset of, hey, look, I'm going to provide a service to my employer and they're going to pay me for the service. Right? That mindset varies with investors and entrepreneurs a little bit because the investor and the entrepreneur, they need to put the wood into the fireplace first and then they get the heat, right? So as investors, let's think about it from the. Well, let me tell you what I used to say to real estate agents. They'd come in, they'd have these lofty goals when they interviewed me, and they'd say, well, you know, I'm new in the business, but I want to make $100,000 or $200,000 my first year. Right? Those are pretty big goals for a beginner. Okay, I think those are big goals. And some, you know, maybe more, but that would be something I'd hear a lot. And the typical expense ratio for a new real estate agent is about, well, it should be about 50%. Okay? So whatever you earn gross, you should plan on netting about 50% of that. So I would say to them, look, if you want to make $100,000, I'm not going to ask you how you're going to make $100,000. What I want to talk to you about is how are you going to spend 50,000? How are you going to spend $50,000 marketing yourself so that you can earn $100,000? Put in the wood first and then the marketplace will give you some heat. Right? You got to put in the wood first. And as investors, it's the same thing, isn't it? Because we're not the type that falls for that, you know, 2am infomercial that says, oh, you know, I bought someone's, you know, audio program and I made $30,000 my first month. No, we're going to put in the wood first. We know most of those things are bs. I mean, they got like one or two examples out of a million, right? Look at. In every area of life, folks, there's a one in a million example, okay? There's someone who did it, got lucky, overcame incredible odds, whatever, you know, it's all certainly possible, but it's highly unlikely. Okay? So you save up money and then you invest the money, and then the return trickles back to you rather slowly, right? Usually. And so you save up $30,000, $25,000. You buy a property, you go to jasonartman.com you click on the properties page, you talk to our. One of our investment counselors, you buy your first property, right? And then the return comes out slowly. But wait, it's not always that easy. Sometimes, you know, God or fate just throws another roadblock in your face, and you think it's all going to be smooth sailing. And then a problem occurs. An unexpected repair, maintenance issue, bad tenant, an eviction, whatever, right? There are problems. This is life. Come on, get over it. Yeah, that's the way it goes, okay? And the test, the test will be, can you get through it? Can you overcome it? And you know what? If you don't love a challenge, teach yourself to love a challenge, okay? And one of the ways you teach yourself to love a challenge is by overcoming challenges, right? You know, it's. It's like the old saying, right? You can't get the job unless you have experience. And you can't get any experience unless someone will give you a job so you can get some experience, right? I mean, it's a. You know, but somehow most people get their first job and then they get some experience, right? This happens, right? What came first, the chicken or the egg? And so overcome challenge. Challenge yourself to things and overcome a small challenge, and then you can overcome a bigger one and a bigger one. One of my favorite quotes is something to this effect. And I can't remember who said it, but here's the gist of it. People are like teabags. You never see how strong they are until you put them in some hot water. Think about that. People are like teabags. You never know how strong they are until you dip them in some hot water, right? Just like that tea bag. That's the thing. Overcome some challenges, overcome some problems. So, you know, Norman Vincent Peale, the late Norman Vincent Peale, motivational speaker, positive thinking guy, he used to go on stage and, like, do this prayer like, God, please give me another problem. I need another problem to show. Let me show you that I'm worthy, right? You know, give me a problem so I can overcome it, something I can sink my teeth into. So, you know, I think these are just some ideas of how we should look at the new year, right? And how we should look at our New Year's resolutions. Now, the other thing is 80% of Americans, they say, don't have any goals. No goals at all. 80% of the population, right? So if you have a goal or hopefully a few goals, you're in the top 20%. Congratulations. Now, of the people that have goals in that top 20%. Guess what? How many do you think have written goals? You know, they have a vague idea of the goal in their head, right? But when it's written, it becomes much more real. You gotta write it down. And I would submit to you that, you know, the age of typing, everything, I don't know, it's not the same. There's a certain quality to writing with your hand. I would say that this is one, you know, a lot of people listening. Journal, right? Are you, are you a journaler? Do you engage in journaling? I've never been able to get myself to do that quite much. You know, to do. Well, I've never been much of a journaler. I think it's probably would be a great idea, but I've tried it many times. It just never quite catches on with me. So whatever, I'll accept myself as I am and not agonize too much about that. But if you're not a journaler, write down a couple three goals, top three goals on a card and stick it in your wallet and look at it, make it your screensaver on your computer, whatever, you know, a lot of things. But get it written. And when I say written, yeah, it could be typed, but I think there is something to actually writing. Okay. In fact, you might want to write it over and over, right? These goals you have and make them smart goals, you know, so they're measurable and they're time specific and the goal is specific and you know all of those things we've talked about on prior episodes, right? Smart goals. Go to the Google and look it up when you're on the line online. Google, I know, remember that movie? I'm going to go on the line and I'm going to go to the Google and ask it.

Funny, funny comedy, right? Do that. Get those goals committed. Look at them often, okay? Look at them often. So if your goal is to buy one property in the coming year, if your goal is to buy 12 properties one per month or 24 properties, two per month, whatever your goal is, get it written down and look at it often. Don't just write it down and forget about it, look at it all the time, you know what a good thing to do is Most, most of you listening, I'm sure, use electronic calendars, right? So if you use say the Google suite and their calendar, right? Just put a reminder every week or every month or hey, every day, you know, you can just do the repeat function for your goal, write it in your calendar and it will just keep popping up and you'll see it all the time. That's a good way to do it. That's a more modern way than a little card in your wallet. But whatever, just do it. Get your goals written down, look at them often, think about them often, and an amazing thing happens. Things just start happening now with every goal you need certain things. You're going to need to involve others, right? You're going to need to involve people in your goal, right? So obviously the first place is, you know, your significant other, your family. Share these goals with them, maybe declare them publicly. That makes it a lot more real when you do that. That's another big value of a mastermind group like the Venture Alliance Mastermind shameless plug venture alliancemastermind.com okay, that was a subliminal message. Now we'll get back to our regular programming and declare them to your family, declare them publicly and then think of the people you need to involve. So in the case of investing in in properties and building your portfolio, you need to involve us. Hopefully you're listening to every single podcast episode I have. Thank you for listening. And then you are engaging with our team, one of our investment counselors and the rest of the people on our team, our local market specialists, etc. And you know what we're all here for. We're all here. This whole team of people is here to help you achieve your goals and own more of the most historically proven asset class in world history, income, property. And that's what we're here for. So we'll talk more about goals in the coming year. I see that I am running up against a time limit here, so I must bid you a farewell and a very happy new year. We'll talk to you in a couple more days. We're on every Monday, Wednesday and Friday, of course. Jasonhartman.com Masters get your tickets before Friday before this Friday for the Super Early Bird special. Hey, you can get a Master, but you're gonna pay a little more. It's like the airlines, you know, the price goes up as the time approaches. Make sure you register and get your tickets for Meet the Masters. We've got a great hotel rate, by the way, only $169 per night. I think that's the number on our room block and very nice hotel in a very prestigious location soon to be announced. So jasonartman.com masters and until the next episode, happy investing and of course, a very happy and successful new year. Talk to you on the next episode.

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