CW 398: Wall Street Stock Swindlers & Student Debt with Zac Bissonnette Author of ‘Good Advice From Bad People’

Welcome to Creating wealth with Jason Hartman. During this program, Jason is going to tell you some really exciting things that you probably haven't thought of before. And a new slant on investing fresh, new approaches to America's best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self made multimillionaire who not only talks the talk, but walks the walk. He's been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason's footsteps on the road to financial freedom. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to the Creating wealth show. This is your host, Jason Hartman. This is episode number398. 398. And we have two guests for you today. First of all, helping me with the intro is Randy Lubke, Morgan planner and financial planner. Randy, how are you?

I'm good. Jason, how are you today?

Good, good. And we will get to you in just a moment. And our second guest today is Zach Bissonnette who has written a few books, the latest entitled Good Advice from Bad People, Selected Wisdom from Murderers, Stock Swindlers and Lance Armstrong. What a title. Randy, you gotta hear that interview.

I will definitely look forward to that one, Jason.

There you go. There you go. Before we talk to Zach today, I wanted to you come on. And you so graciously joined us for our members only monthly conference call just about two weeks ago. We talked about some very interesting financing available that is not in the mainstream conventional market. This is not the financing you're going to get from conventional lenders. It's not the Fannie Mae, Freddie Mac brand of financing. And what's nice about it, Randy, is that it is a good fit for those investors who have more than 10 loans, want to be in the game and want to be buying more income properties or they want to refinance existing income properties they have in order to buy more income properties or at least get most of their money out of the deal. So that's what we're going to talk about before we get to our guest today, Zach. So tell us about this opportunity and if you would, how it came about and let's just dive into what the opportunity is for investors.

Essentially, as you just stated, when you're buying these rental properties, the ideal loan to get are these Fannie Mae and Freddie Mac loans, 30 year fixed, low cost leverage. You can get in for as little as 20% down and have these interest rates that are fixed for three decades, but the window, the opportunity to get into those types of loans is very limited. There's 20% down on the first four properties and then after that is 25% down. And once you get 10 properties that are financed, you're done. You can't have access to any more leverage. And so what that's forced people to do until this particular product came along is go into the private money market, which can get very expensive, 9, 10, 11, 12% and points and prepayment penalties and things like that. So what this product aims is that those people, as you said, that they're above the Fannie count, if you will, in the number of properties they have, but they still are good borrowers and they'd like to get at some very good interest rates and have access to credit that they wouldn't otherwise have. That's what the program is all about.

The thing to understand for the listeners is that one of the things that makes the United States such an incredible place to invest, and as I've said many times, I kind of hate to repeat myself, but I know I have to because people always ask if I don't. I've been to 71 countries, I've looked at properties in the vast majority of these countries. I've gone out with local real estate agents, real estate brokers. Most of them in other countries are unlicensed. So they're just call themselves or a real estate agent or broker. And you go out and look with them, you know, nothing too formal, you know, they just don't have the financing opportunities. And that's one of the things, among other things like the MLS system and rule of law and all kinds of attractive things that make the US market so much more advantageous. But in terms of the financing aspect, what people have to realize is that we have it too good here. Because real estate has been basically subsidized by the government through their government sponsored entities, the GSEs, known as Fannie Mae and Freddie Mac for Fannie Mae, really, since right after the Great Depression. That's why borrowing has always been so cheap and so plentiful and so easy here because we've had this government guarantee, implicit guarantee, it's not explicit, we all saw that in the last financial crisis from a few years ago. But as a secondary market that will buy the loans and keep the velocity of money going, if you will, through the system, so that banks can continue to always look for new loans because they can always sell the loans off. And it's Made rates very low, financing very plentiful and very available here. And so when you compare it to what's available on the private market, it just never looks that great. But this is about the best it's ever been. Randy, for something that's not through a gse, through a government sponsored entity like Fannie or Freddie, I have never seen anything quite this good as what we're talking about today. It's not as good as the Fannie Mae, Freddie Mac type conventional stuff, but it's pretty good, isn't it, for the.

Right person in the right situation. It's an amazing loan. Let's finally get into some of the details of it.

Yeah, absolutely. I mean it's definitely not 9, 10, 12% here, right? That' what are the details?

While we're talking about interest rates today and It's August in 2014. I know it's a podcast so you know, they might listen to this 10 years from now, but today the interest rates run between 5 and 3/4 and 6 and 3/4%. Now that's pretty good for basically a commercial loan. Let's kind of start it with my hit list here. One of the things that a lot of people have done, of course, over the last few years is put their properties from owning them as their own, putting them into entities, owning them in LLCs or corporations. And this particular product does lend to LLCs, not individuals, which is a big deal in and of itself. Again, this is a commercial, so it's also offered as recourse and non recourse type loans. Do you want to talk a little bit about that?

Yeah, absolutely. Explain to the listeners recourse and non recourse.

Typical mortgage on a home is really considered a non recourse loan, meaning the security for the loan in the event of a default would be the property itself and it would go back to the bank if there was an issue. In some circumstances we need to have fully non recourse loans. So for example, if I own real estate inside of an ira, I can't guarantee that loan with my signature. I have to have a non recourse loan. Well, this loan would fit perfectly for that because they will offer it as a non recourse, meaning the property is the only security or you can actually improve the interest rate or maybe increase the loan to value if you're willing to sign for and back the loan as a recourse loan. That means if something goes wrong, you are personally liable for it.

That's one of the great things about income property is that you can basically delegate a lot of the borrowing responsibility to the property. Because in a non recourse loan only the property is liable for that debt if you default on it, if you should ever have to default. And I call this the nuclear option. You know, it's the last thing you want to do in case it ever happens where you need to default on a property. Millions and millions of people did this by choice, okay? By total choice. Not because they had to, some had to, but a lot of people did it by choice. They called it strategic default. We've done some shows on it. We've talked about it in some of the past episodes and interviewed some experts on it. They just felt it was a good part of the business plan. The deal they agreed to with the lender is, look, I am signing you the rights to this property if I don't pay. And then they decided at some point, you know what, I don't want to pay. So here's the property. That's the deal we entered into, okay? And it's nothing more than that. And the only liability they had was damage to their credit score, which you know is significant and should not be taken lightly by any means. Just understand that people made that decision consciously. Many times you really do offload or delegate a lot of the borrowing responsibility to the property. It's almost like cloning yourself. You can say, okay, you know, here's a property, the property will take on this obligation and this property will take on that obligation and that property over there will take on this obligation over there. It's a great thing versus typical borrowing where you personally have to take on all of the obligation. Certainly many of our listeners own their own business and many of them have tried to go out and get financing for their business and you know, you can't. And if you can get financing, which is pretty hard with a business, you've got to take on that liability yourself. You can't delegate it to the business. Almost never can you do that unless the business is really large.

And that's a good point, Jason. This is a commercial loan and they do look at it as a business. So the property has to be able to support itself, which fits very nicely into the model of the properties that you represent. Because they have cash flow, we have to have positive cash flow, or if it doesn't, you're not going to get the loan. It has to hold its own. Hold its own being based on the cash flow it receives. That's the way it works.

Yeah, excellent. Good points. Okay, talk about the rates again. If you would. And then all of the terms on the loan. I mean, it's not just about interest rate. You know, there's the length of the loan, there are the points and fees to get the loan. Does it adjust? That's a question. There are many factors. So let's just review all of those if we can.

First of all, the minimum loan size is $500,000. Now, when you think about the types of properties that we generally see, and talking about homes that maybe range from $90,000 to maybe $150,000. So what this loan allows the investor to do is bulk package those properties into one loan. Let's say we have 10 $100,000 homes that were potentially owned free and clear. They paid cash for them. Well, you could get a $500,000 loan and be at 50% loan to value. That's how it would work. So we both packaged the loans. The minimum loan side is 500,000. The maximum loan size is, for all practical purposes, unlimited. They've made loans north of $10 million to investors with apart. So there's no limit there. And there's also no limit on cash out, which is another important thing. With the current Fannie Mae guidelines, once you have four properties financed, and by the way, one of those four includes your primary residence, you can't get cash out on a refinance anymore. All you can do are rate and term refinances. So this opens up the door to people that have more than four properties and they want to get at some of the equity in those properties and the loan to value. Jason, we can go as high as 75%. And the last thing that's important to understand is something we generally don't talk about, which is debt coverage ratio. You want to talk about that a.

Little bit in a moment. Yes, definitely want to talk about that, because one of the properties we'll actually talk about today is we'll review the debt coverage ratio on that. It's on the pro forma I sent you, so we can sort of use a live example, if you will, which will be interesting. And debt coverage ratio is one of the metrics we definitely look at when investing. I wanted to go back to those. So the minimum loan amount is half a million. And we have a lot of investors who were very wise and they were contrarian in their thinking, and they purchased properties through our network back three, four years ago when things looked pretty gloomy. And now they are sitting pretty because they had the foresight and the guts, and you needed some guts back Then to do it, to see that this was going to turn around. And it of course did. It always seems to, if you look at history. But there was no financing available back then, or it was much more limited than it is even today. And today investors think it's limited. It was worse back then, four years ago or so. So now they're sitting on a portfolio of properties that they paid cash for, but they bought them so cheap, and now they could turn around and refinance this portfolio of properties and pull up to 75% of the value out. So in the example you gave, and this is how it might have looked, you know, I'll just give you sort of a very rough concept here. Maybe they were purchasing properties for $60,000 each, and they were doing this four or five years ago when it was pretty gloomy. And now those properties are worth 90 or 100,000 each. And in your example, they've got 10 of them. Let's say they put in $600,000 to buy those 10 properties at 60 grand a pop, and now they're worth, for round numbers sake, let me just say a million. They're worth 100,000 each. They've got 10. They've made $40,000 per property in this example, and now they can turn around and they can refinance $750,000, or 75% of 1 million, which, following my example, is $100,000 each times 10. Okay, yes. So they not only get their $600,000 back, but they get an extra $150,000 out for their trouble, which is really nice. Then they've got these properties financed, and with that $750,000, they can go shopping again and they can go out and acquire more properties.

They can absolutely do that again. It's freeing up equity in the home that was otherwise trapped there. And that equity, of course, isn't providing them any direct benefit. Yes, there's the cost of financing's being saved, but the ability to go out and re leverage that money and buy another one or two or three more properties.

That's one or two or three. It's way better than that, Randy, because what they can do.

$50,000. You're right.

Yeah. They've got $750,000 now to go shop with. And with this loan to value ratio, like if they were to pick another portfolio, okay. And say they were to go and find $2 million worth of property to purchase, and with 25% down, they need $500,000.

That's right. That's right. I was only looking at the difference between the $150,000. But you're right, they pay cash for the property.

Oh, no.

For example, they have a lot of money. They can buy a lot more houses.

This whole investing thing, if you can overcome your own psychology and some of the bumps in the. Understand that you're going to have bumps in the road. Life is about dealing with problems and solving them. It's not about whining about them. It's like Zig Ziglar, one of my favorite mentors, the late, great Zig Ziglar. I was really excited that I got to many years ago go on a speaking tour with him and do a four city engagement. But Zig Ziglar used to say that the bum on skid row and the happiest, most successful person in the world have one thing in common. They both have problems. The only difference is one has learned to successfully deal with and overcome problems and the other, unfortunately, has not. With the real estate portfolio, you know, it becomes really addictive. I mean, people love this stuff. The product that is sold through our network is just about as addictive as Starbucks coffee. So people really want to, they want to get back in and get in the game. So now look at what you've done. I talk about the refi till you die concept. And what you've done here is you've taken that portfolio of 10 properties you bought at a bad time, what seemed like a bad time, but it was really a good time. But you know, you had to overcome all the negative psychology out there in the news media, right? And all the stuff your friends were saying and go the other direction and usually go it alone. Worry a lot, you know, no guts, no glory. And so you did that and now you're sitting on that portfolio and you can go from 10 properties to 30 properties in this example. And so now you've got 10 properties originally, you can buy 20 more and still have 150,000 cash left over to stick in the bank and use for your emergency fund. And by the way, people have asked that question and I just want to. I haven't talked about it much on the show lately, but what is the reserve? What should you have in reserve when you're buying these properties? I think the minimum number is 4% of the value of the portfolio. So if you have a two million dollar portfolio, you should have $80,000 in the bank for vacancies, surprises, problems, repairs, whatever. This is what keeps you in the game. It gives you staying power at least 4% of the value of the portfolio.

Another way to look at it, Jason, I say three to four months rent if you have an RV factor of one, right?

RV ratio, 1%.

It's the same thing. Because really what you're trying to do is ensure that if there is a vacancy or a big maintenance, maintenance issue comes up, that you have the cash there to see you through that downtime that you're going to inevitably experience. So by having three to four months of rent setting aside for each property can easily cover that.

Tell us more about the loan. I think we were going to talk about debt coverage ratios right before we hit that.

Let's talk about the term because you mentioned that as well. And this is unique in that respect because these aren't 30 year fixed rate loans, right? These aren't the Fannie Mae loans. These come in two durations, a five year fixed and a ten year fixed. But the loans are amortized over 30 years. So let me explain a little bit about how that would work. Going back to the 30 year fixed, what happens of course is every month you make a payment, at the end of 30 years, the loan's completely paid off. These types of loans though, the interest rate will be fixed for five years, but then it's a balloon. The whole loan needs to be paid off and then either refinanced again or something has to happen either five or ten years. Those are your two choices. But they're not five and ten year loans. Because if you think about it, the cash flow would be terrible. If you had to pay off a LOAN in just 10 years or five years, you would eat up all the cash flow, giving the principal back to the bank. So most commercial loans are either a 15 year duration, meaning the loan has a 15 year amortization. This one has a 30 year amortization. You get the benefit of longer term financing in terms of cash flow, but you get again a good interest rate because it's only fixed for five to 10 years.

We've gone over rate and term. Amortize, that's just from the Latin term. It means amort, to kill. You're killing the loan, you're amortizing it away. Debt coverage ratio. What is the required minimum debt coverage ratio? And see what this means for the lender is this means how reliable is this property? See, it's not really the borrower, it's the property. Remember I talked about how you're basically outsourcing the debt or the borrowing obligation to the piece of property. So what they're asking, when they look at the Debt coverage ratio is. How likely is it going to be this property is going to pay me back?

Do we want to look at your pro forma while we're talking about debt coverage ratio?

Yeah, not necessarily. Yeah, we do in a moment. But what is the debt coverage ratio required?

The requirement on this one is actually pretty low. It's only 1.2.

Oh, that's a cinch.

Yeah, yeah, yeah.

Let's look at the Performa.

Yeah, yeah, yeah. Should we look at the performer? Yours looks really good. The one we're looking at.

Absolutely. Let me tell you about this property. And I picked it because we've got a property tour coming up there at the end of September. You gotta join us folks, for our Little Rock property tour and Creating wealth bootcamp. And that has got great early bird pricing. @jasonhartman.com Click on events. I think it's only $147. We basically lose money on these events, but the way we profit is that people actually invest in properties that will be at the end of September. You can register for that@jasonhartman.com in the events section. This property, the debt coverage ratio is 1.48. And it gets even better, Randy. It's 1.48 with 20% down. Now this lender is requiring 25% down. So that's going to make the debt coverage ratio even better. I can't do the MA for you right now, but I bet you that debt coverage ratio is going to be like 1.55 or 1.6, which is phenomenal. I mean, it's phenomenal.

It is.

I was gonna say it's probably 1.6, 1.65 because maybe. Yeah, with that, that larger down payment. Just so people understand, what we mean is we want the rent, the net rent to exceed the debt by a minimum of 20%. This property with 25% down, it's going to exceed it by 55 to 65%. That's to going crazy.

So this property is $92,900. It's 100% rehabbed this year. It's got a brand new rehab on the property. So it's in really good condition. And this one is already rented. I like to say this is a Performa. It is a Performa and there are multiple dimensions to the property. Performa. And the projections that we're going to talk about, we know it's rented for 950amonth, more than 1% of the purchase price, which is 92,900 and 950 rent. So your RV ratio is good. It's more than 1% the cash flow in this property. It is rented, assuming the expenses stay consistent. And we've got some pretty conservative assumptions in here, is just over $2,300 annually, making the debt coverage ratio with only 20% down of 1.48%. And the cash on cash return at 10% annually. And the overall return on investment because we know income property is a multi dimensional asset class. So get this, folks, he's sitting down. 39%, 39%. 1% shy of 40% annually. And this is why we like Little Rock, Arkansas. A little town you don't think much about, you don't hear much about. If it wasn't for Bill Clinton, probably wouldn't even know where Little Rock was. Most of you, right? And no offense to people who live in Little Rock, I'm sure we'll have a couple of those there too as well that come on the tour with us. This is a market that hasn't been invaded by a bunch of big institutional investors. It's a below radar market and we think that's what represents the opportunity. Because in markets like Phoenix, where I live, institutional investors have just come in and ruined this place. We used to recommend Phoenix, but it just got stupid here. The institutional investors came in, the private equity groups, the hedge funds, they push the prices up too high and it just doesn't work. The numbers don't work here anymore. I wish they did. I would love it if they did, but they. They just don't.

You found a winner here, Jason. This is a great property.

We've got more great properties in this market. And we always ask, by the way, our local market specialist, to save some properties just for the people on the tour. So they will be holding properties off the market until after the tour to give people a first come, first serve chance who are on the actual tour to buy those properties. And here's the assumptions I wanted to tell you about the maintenance percentage assumption, especially you've got your management fees, your vacancy rate, your appreciation rate built in there. Those are all very conservative. But the maintenance percentage is at 8% annually. And what that means is that we're assuming you're going to spend $76 per month or almost $1,000 per year to maintain this property that was just rehabbed probably a month before you bought. Pretty good, huh?

I'm looking at your capitalization rate in here at 7.6%.

Yeah. Don't try that in California. Well, no.

So if you didn't use leverage, if you paid cash for this, still giving you a 7.6% rate of return on your money, which is phenomenal. And then you see when you throw the leverage into it, that's what enables you to multiply that and get it up to that 39%.

I like to say that leverage is a two sided coin. It's a two edged sword. It's a knife that can cut both ways. As the saying goes, leverage is a very powerful tool, but certainly people have gotten themselves into trouble with leverage, no question about it. But when you have a debt coverage ratio of 1.48% with 20% down, you know, buying this property is only going to take $23,000 and change with down payment closing cost. It's just so unlikely that you're ever going to get yourself into trouble with a property with a debt coverage ratio like this because you've got positive cash flow from day one.

Leverage kind of got, especially the last few years, a bad name. The truth of the matter is it actually protects you because you know, having less equity in the home makes it less of a target for people to sue you. Having less cash in the property could mean that you'd have more cash in the bank to protect you when something goes wrong. I mean, there's a lot of benefits besides the ability to increase your rate of return by holding onto your cash instead of sticking it into the property.

So anything more you want people to know about the financing opportunity?

You know, one thing I didn't mention, this is an assumable loan too.

Oh yeah, cool.

I forget to say that, you know, this is a loan that again we're going to be lending to an llc. The LLC is going to own it and the lender will allow you to sell that LLC interest to other parties at some point and the loan goes along for the ride.

So great. So if you ever wanted to exit the property, got an attractive financing option that can be assumed by a new buyer. But that refi to you die example folks that I mentioned mentioned where you take 10 properties and turn them into 30 properties and get $150,000 in change and more positive cash flow every month. Wow. I mean I love income property. It is literally the most historically proven asset class in America, if not the entire world. But I can definitely say in America, try and beat it. Hey Randy, thanks for joining us. We went a little long. Let's get to our guest here is Zach Bissonette with good advice from bad people People. It's my pleasure to welcome Zach Bissonnette to the Show. He is the author of Good Advice from Bad People, Selected Wisdom from Murderers, Stock Swindlers, and Lance Armstrong. Great topic, Zach. Welcome. How are you?

I'm great. How are you?

Good, good. You're coming to us from New York City today. Always like to give our listeners a sense of geography. Tell us a little bit about your research and background in this field of selected Wisdom from Murderers, Stock Swindlers, and Lance Armstrong.

The book kind of started, I guess, about a year ago when Lance Armstrong was doing his sort of pathetic apology tour, where he went on Oprah, you know, and did his whole shtick about, oh, I'm so sorry. I was a liar and a cheat, and I, you know, would do anything to get what I wanted. And just a few years ago, this was one of the most respected people in America. Something everyone would say to their kids, you know, look at him. I want you to be like him. Then I started thinking, what. What did we even know about Lance Armstrong that made us think he was such a wonderful guy and a great role model? He was really good at riding a bike, which until Lance Armstrong, no one gave a crap about people who were good at riding bikes.

Okay?

So we knew he was good at riding a bike. Then we knew that he had cancer, which is really sad, and that he had a prognosis that allowed him to come back from that cancer with good medical treatment, which is good for him. And I'm happy that he got the help he needed. And then he went back to riding his bike. And, you know, I remember saying the people who were so convinced that he was such a hero, you know, if he had had a more aggressive, you know, a more tragic diagnosis, you know, and he hadn't been able to come back, would that make him less heroic because the cancer was more aggressive? I never really understood why this guy was a hero. And a big part of why this guy was a hero was that he told us he was a hero. And there was this huge PR campaign, and he was using it to get enormous endorsements that were unheard of in the history of cycling. Then, of course, it all came crash down because, you know, Lance Armstrong, you know, said, you know, winning is all about heart. It's gotta be in the right place. But it turned out, you know, what he was pumping with, his heart was, you know, transfused blood and testosterone and violent threats leveled at anyone who said they would expose him.

You know, interesting. Very interesting take on that. I agree with you to some extent. It's crazy how our society just reveres people for Mostly celebrity oriented reasons. Not for the quality of the person, not for something that they've really done to help the human race.

It's often that they will have been really, really good at one thing. One often pretty narrow thing that really is unrelated to most other sort of elements of living a successful life. In the late 1990s and early 2000s, Tiger woods father wrote not one, but two parenting books. Parenting books, not golf books. Parenting books. And all that we knew about Tiger woods was that he was really good at golf. And he also talked about being a role model and did sort of the role model PR stuff, but we knew nothing about this person. And over and over again with these people who become role models and then fall, when you look back, it's like, well, wait a second, we actually really never had any basis for making this person a hero.

In the world of branding, this is called brand extension. People try to extend their brand into other unrelated areas and it usually doesn't work very well. The best example I can think of just offhand here is Paris Hilton. I mean, what has she ever seen.

Done, you know, to Paris Hilton's credit? Which is a phrase you will never hear me say again.

Okay.

She never claimed to be a particularly wonderful person. I mean, she was a, you know, a coked out, kind of trashy person who built a brand around that. I never found anything particularly hypocritical about her. I just found her terrible.

I kept wondering and asking myself, where is her talent? She's just sort of famous for being famous. There's no actual reason that I can see. Yeah, yeah, very interesting. Well, talk to us about Wall street and stock swindlers. Wall street is like digging in a pure ve vein of gold because there's literally a scandal every day. I mean, there's so many criminals on Wall street, it boggles the mind. I call it the modern version of organized crime.

There are so many sort of creepy losers on Wall street who ascend to great power. And then you find out, sort of like Lance Armstrong. Wait a second, why did. Why was this person up on this pedestal? One of my favorite examples is Richard Fuld, who was the CEO of Lehman Brothers. And in 2006, at the height of his power, he went back to the University of Colorado at Boulder to do a commencement speech in which he said, when you know what you are talking about, others will follow you because it is safe to follow you. And then two and a half years later, investors and employees, and to a certain extent the US economy followed the leadership of Richard Fuld. Into the largest bankruptcy in U.S. history. That happened precisely because Richard Fuld climbed the race and became CEO of a company that was involved in huge amounts of esoteric financial products that he knew nothing about.

It's just mind boggling. I mean, whenever you hear about Wall Street's financial innovation, head for the hills, for real. It's just amazing. Crime today is committed really through lobbyists, lawyers, accounting firms and PR firms. This is the way modern crime is done on Wall street or with big corporations in general.

And there tends to be very little accountability. There's an old Jimmy Cagney song from a musical from, like the 20s, I think, that had a line in it, steal $100 and they put you in stir. Steal 100 million and they address you as sir. And I think that's sort of the lesson that people took from that. One of my favorite financial losers, I'm sure one of yours, too, is Donald Trump, who in 1991, following up on his book the Art of the Deal, which is still a popular book, God only knows why, he wrote a book called Trump, Trump Surviving at the Top. And what was very interesting with this book was that it came out right as Donald Trump's empire was unraveling under the weight of, you know, excessive debt born of grandiosity. In that book, he said, you have to be confident as you face the world each day, but you can't be too cocky. Anyone who thinks he's going to win them all is going to wind up a huge loser. So, you know, it was Donald Trump who, I think if you were to do a public opinion survey, most people would probably say he's the cockiest person in America. The previous America. Oh, Donald Trump, easy. And he was out there while his company was imploding because of his own grandiosity, lecturing people about the dangers of overconfidence. And the title was so ironic at the time because his financial woes were all in the papers that a reviewer in the Los Angeles Times wrote that Donald Trump coming out with a book called Surviving at the Top, it would be as if Marie Antoinette had written a book called Keeping My Head.

That's hilarious. You know, one of Trump's companies embroiled in a huge lawsuit, and that involves his Trump University. I don't know what the outcome is. I haven't followed the story, but has.

Been no outcome yet. But it's still an ongoing thing. But, you know, I think that the best thing you could say about Trump University, you know, and I've read a lot of it, I'VE written about it, actually. That it was sleazy and exploitive. Whether it was criminal is something the court left to decide, but it certainly was embarrassing.

That's kind of the problem with today's world. These big wigs, big people, big companies, they have so much power in the system. They have these incredible law firms that can reduce and cloud issues that are just so obvious into massive amounts of technicality.

And these issues that if you actually stop and think about them for three seconds, are not hardcore. I mean, in Trump University. And I had to be a little bit careful because it is, you know, there hasn't been any outcome with it, but it's pretty obvious that the representations made about what the program would provide for what it cost were not in line with what the programs actually provided. I mean, that is a manifest from looking at any of the legal filings, any of the media coverage, any of the company's own ads, you know, and yet they have to argue about, you know, these technicalities.

There's a really interesting one. I bet you've seen the video. I hope you have. It's with Jim Crow. Now, of course, Jim Cramer is a very famous Wall street pundit. He is literally bragging about how the sec, the securities and Exchange Commission, we'll call it the Scoundrels Encouragement Commission, but as some people do. And he is literally bragging at how he has hoodwinked them, how they are so stupid, how.

Yeah, I remember that.

Then I heard stories about Kramer going around suing people for putting that video on their website. You know, I doubt it's on YouTube anymore. I hope the listeners will look for it. It. It's a shocking video. He's literally giving investors and the law and the government the finger on the video.

It's a tough thing. I mean, I used to work at cnbc, and the thing I will say, I think Jim Cramer is a very smart man.

Oh, sure he is. Of course I'm not.

And I think that there's also, and this is true of pundits and experts in general, there is an inverse correlation between the amount of time you can spend on television and the amount of stuff you can actually know. Tim Cramer is on television too much to actually know anything at this point. But, you know, all the. All the research has to be done by, you know, a bunch of people who no one would take advice from. Then he's sort of the mouthpiece for it because he's too busy being a brand to actually do anything.

That's a great equation. The inverse correlation There, I love it. Some of the topic areas that I know you cover is student loans. We'll call it the college student loan government complex maybe or something like that. But that seems to be just, just beyond absurdity nowadays. I mean the cost of college is ridiculous. Student loan debt is not dischargeable in bankruptcy. It's the only kind of debt that is that way. Is this thing just a big scam? The cost of it and the market?

Yeah, I think largely, I would tend to agree with you. I think some of the reasons the costs have gone up are sort of outside of control. People. You know, the affordability thing is, I think the student loan thing is, you know, the bankruptcy. I totally agree with you on what.

Did you mean there? You kind of, you kind of faded out. I mean, you know, my theory is that the government started putting all this money out there by guaranteeing student loans. And of course the universities did what any good business would do and they.

Are businesses then they just absorb that and increase the price. What's funny is, and the kind of canary in the coal mine for this stuff is the for profit colleges because they're publicly traded, most of them, and they, you know, release reports and talk to their investors, course of selling stock, they kind of have to brag about their business models a little bit. The parent company, the University of Phoenix once actually noted that they'd increased their tuition price because of an increase in the federal staffers loan limit that year. They just said that because of the increase we were able to do this increase and no one picked it up and no one even remembers maybe 10 years ago, but it was hysterical. Everyone denying, within the government, within education, everyone denying that this relationship existed. No, colleges aren't raising their prices just because the loan limits go up. But they said they did.

It's the classic definition of inflation. You've got more money, more dollars, chasing a limited supply of goods and services.

The other side of this that I think is undercovered is that state appropriations for public colleges have tanked over the past 30 years. So the increase in tuition for in state students at public colleges is in large part being driven by that. The fact fact that their tuition used to be mostly covered by taxpayer subsidies to the colleges. Now those institutions have been largely privatized where students are covering the bulk of their cost of education. I think that's undercovered, but that's a huge part of it.

Before you go, you gotta give us some advice from murderers. We haven't heard about them yet.

Ah yes, well, O.J. simpson, who you know, Was criminally acquitted, somewhat controversially. Right, of course, but withheld civilly responsible for the death. So I don't really have anything probably calling him murder and that he admitted to it in a book. But he said, the day you take complete responsibility for yourself, the day you stop making any excuses, that's the day you start to the top. And now he is in prison for armed robbery, but is appealing it on the grounds that his lawyer didn't do a good job. So that's him taking responsibility, I guess.

You know, lawyers don't do good jobs. So, you know, I gotta give them a little bit of. You've got a great quote from Rod Blagojevich. You know, I'm not sure if you remembered all of it. I don't want to put you on the spot, but, you know, do you want me to say it or do you want to say it? It's. It's.

You can say it. It's fine.

You got it. I think the most important thing is to restore a sense of idealism and end the cynicism. I mean, Rod Blagojevich was just a hilarious character in the media.

He went on Donald Trump's Celebrity Apprentice after he had been indicted.

I didn't know that. Wow.

Yeah, I know. It was really, really weird. And Chicago politics, it's been a hotbed of corruption for. I mean, he was the fourth of their last seven governors to end up in prison. Blagojevich, I think, certainly did not succeed in his goal in ending cynicism about government.

Certainly true. Well, very interesting. Zach. Give out your website or tell people where they can get the book. Whatever you want.

Amazon.com is fine.

Amazon.com, the book is on there and it's entitled Good Advice from Bad People. Selected Wizards from Murderers, Stock Swindlers, and Lance Armstrong. So, Zach, thank you so much for joining us today.

Anytime. Thanks so much.

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