CW 926 - Rental Demand, GOP Tax Plan, Trumpbook, & YouTube Censorship with Naresh, Part 2

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Hey everybody, welcome back. This is episode 926, yesterday's episode on the Portable Society, the Bubble Economy and a Client Case Study with Naresh as well as the Sharing Economy and cryptocurrencies and Bitcoin mania and all that good stuff went a little long. So we are continuing part two of that today. One thing I want to remind you is we are going to wrap up the five year plan contest here in just six more days. Just six days. You got to have all your entries in by Christmas. How's that sound? And let's get you a nice Christmas present. This is a great, great opportunity for you to clearly define and paint your picture of your future life based on your real estate investments and everything else going on. So thank you to those of you who have already entered the cont. We've got prizes valued up to $4,300. This is the most valuable prize we've ever given away for any, any contest we've held over the last, what, 13 years or so. So we really want you to get your entry in Jason hartman.com contest Jason hartman.com contest just do not miss this. Do not miss it. It's really important. You're doing this more for you than you are for even the contest. So get your entries in quick@jason hartman.com contest just six days left. And of course meet the Masters of Income properties coming up with Ron Paul and all of our other awesome speakers. Jason hartman.com Masters with a beautiful new landing page for that by the way. So check it out. Even if you already purchased your ticket. Jason hartman.com masters and if you are interested in upgrading your ticket, you can do that there as well. You can also do That I believe, although I'm not looking at this link right now. At Jason Hartman.

Upgrade, we just try to make that easier for you to access at its own URL its own domain name. Okay, so what else did I have to mention to you? I know there was something else important. Well, five year plan contest, obviously. Very important. Keep your eyes peeled for a bunch of great content coming up. We are going to have, I think, a very special show on Christmas day because Christmas is one of our normal publishing days. And I am trying to line up a guest this week to interview for a Christmas episode on the biggest Christmas gift you ever got in your life. Okay. It is big. It is the biggest Christmas gift ever for real estate investors. Yes. I will tell you what it is, hopefully on Christmas Day. I have not done this interview with this guest yet, but I've talked to him extensively and hope to get it scheduled this week so we can release it on Christmas Day. So that's coming up. And then, of course, we will have a regular scheduled Monday, Wednesday, Friday, tomorrow's Wednesday episode, tomorrow again. So we will look forward to also seeing you tomorrow. Anyway, here's part two where we talk about what I call the portable society, a very important concept and a whole bunch of other things. Here we go. Let's move on because we got to wrap it up here to the GOP tax plan. Did you have a question about this, Naresh?

Yeah. Well, it's obviously a humongous, humongous bill, and I don't think anybody's read through the entire thing, but I think we.

Got to pass the bill to see what's in it. That's what Nancy Pelosi told us about health care.

That's true. And with this Roy Moore losing, we don't even know if it's going to pass. But there are all these new deductions that they're adding, and they're taking away certain deductions. And I'm a small business owner. Jason, your listeners are small business owners. You know, having a real estate company is, you know, small business. So I'm just curious to know what. What does this mean? Is it good for real estate investors? Is it good for small business owners?

Yeah, good question, Naresh. This tax plan, if it passes, is going to be really good for real estate investors. Why? Because it reduces the amount of deduction homeowners get. It disincentivizes homeownership a little bit. It's not huge. Well, if you live in an expensive market like New York City, for example, or California or any of these expensive real estate markets, if your ability to deduct your property taxes is diminished or lessened, and if your ability to deduct mortgage interest is lessened, which it will be under the current iteration of the plan. In addition to that, the incentive to be a freelancer and have your own business, like as a consultant, to lose your job with your company and be rehired maybe by the same company or another company in the sector that you're knowledgeable about and to be an independent contractor and have, you know, your own business, those are going to be huge incentives of this plan, okay? They're going to be huge. Ultimately, it's good for real estate investors from the concept of it disincentivizes homeownership and makes more people want to rent, okay? Because that, it balances that equation out a little more. Historically, the equation has always been incentivizing homeownership. That's what the government has always done for, you know, all my lifetime at least. But here's the other thing. Remember I talked about the portable society, as I've dubbed it the portable society. So if people are in incentivized to be freelancers and work in what's known as the gig economy, okay, the gig economy to be consultants, to be independent, which they definitely are under this plan, because employees get hit the hardest, earned income by employment is always the least favorable income you can have in the U.S. it's, I'm not saying it's right or wrong, I'm just saying that's the way it is, okay? So being a salaried worker is a bad deal and it's going to be a worse steel under this plan, okay? You're going to get hit harder than you already are. And I know you're already getting hit really hard. So if it incentivizes people to go out on their own and be part of the gig economy, those people can be portable a lot of times and they can geo arbitrage and they can live anywhere they want. So the incentive now becomes to live in desirable places with a low cost of living, whether it be low real estate cost, low tax costs and so on and so forth. So this, this hits the left leaning liberal states the hardest and maybe this is intentional. Trump wanted to nail these states for not supporting him in the election. So I don't know, you know, maybe, you know, maybe it wasn't that clear. Never is. It always gets murky, but that's the result of it. And so if you're offering rental property and you're offering someone portability and mobility to go where the jobs are, to go where the lower cost of living is in nice, linear markets. Hey, congratulations. You're gonna see upward pressure on rents. So as a real estate investor, I think it's a pretty good deal. I don't think it's a good deal for homeowners, though. It's definitely not. But as an investor, good deal. That's my take on it. Now let's play a little quick video that's kind of funny. It's sort of surprising. This came from the White House. Actually, Democrats will hate it, but it's kind of funny and it gives a good example. Now, here's the thing you gotta remember about taxation. Okay? So, well, let's play that video now, and then I'll come back and comment on it. So here we go.

Suppose that every day, 10 people, for our purposes, we'll say, reporters go out for beer. And the bill for all 10 comes to $100. If these 10 reporters paid their tab every night the way we pay our taxes, it would go something like this. The first four, the poorest, would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth, the richest, would pay $59. So that's what they decided to do. The ten reporters drank in the bar every day and seemed quite happy with the arrangement. Until one day, the bar owner threw them a curveball. Since you're all such good customers, he said, I'm going to reduce the cost of your daily beer by $20. Drinks for the 10 reporters would now cost just $80. The group still wanted to pay their bill the way we pay our taxes. Taxes. So the first four were unaffected. They would still drink for free. But what about the other six? How could they divide the $20 windfall so that everyone would get their fair share? These are the reporters, after all, so they're concerned with fairness. They realize that $20 divided by 6 is $3.33. But if they subtracted that from everybody's share, then the fifth reporter and the sixth reporter would each end up being paid to drink beer. So the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was. By doing that, he explained, they'd continue following the principle of the tax system they'd been using. So he proceeded to work out the amounts. He suggested that each should pay now. And so the fifth reporter, like the first four now paid nothing. He got a 100% saving. The sixth now paid $2 instead of $3, a 33% savings. The seventh now paid $5 instead of 7, a 28% saving. The eighth now paid $9 instead of 12, a 25% saving. The ninth now paid 14 instead of 18, which was a 22% saving. And the tenth now paid $49 instead of $59, a 16% saving. So each of the six was better off than before. And the first four continued to drink for free. But once outside the bar, the reporters began to compare their savings. I only got a dollar out of the $20 saving, declared the sixth reporter. And she pointed to the tenth reporter. He got ten. Yes, that's right. Exclaimed the fifth reporter. I only saved a dollar too. It's unfair that he received 10 times more benefit than me. That's true. Shouted the seventh reporter. Why should he get $10 back when I only got two? The wealthy gets all the breaks. Wait a minute. Yelled the first four reporters in unison. We didn't get anything at all. This new tax system exploits the poor. The nine reporters yelled at the 10th and made him feel bad. So the next night, the 10th man didn't show up for drinks, and the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They no longer had enough money between them all to even cover half of the bill. And that, ladies and gentlemen, is how our tax system works.

So, Naresh, isn't that a funny video about going out, you know, the beer and the cost of beer? It's pretty funny. But basically the big picture thing, and I know you understand this very well, Naresh, and Ron Paul, who's speaking at Meet the Masters, understands it quite well, obviously. And people in the know that understand economics get it, okay? Look at when you reduce taxes, you increase economic activity and ultimately that is better for the economy and it's actually a better deal for the government because it ultimately increases tax revenue by lowering the burden on people. And if you don't believe me about this, then just look at the examples. And probably the best modern example, Naresh, of this is Great Britain. Look at before and after Margaret Thatcher. I mean, England used to be everybody's on the dole and high unemployment. I mean, it was pathetic. It was terrible there. And then the Reagan Thatcher revolution happened around the world in these two giant economies, you know, England and the U.S. right? That revolution happened. It was the supply sider revolution. It was the Laffer curve. Arthur Laffer, you know, that basically it proved, I mean, it was the largest PeaceTime expansion in U.S. history under Reagan until the Internet expansion, which is not the Clinton expansion, by the way. The Internet revolutionized the world. Clinton just happened to be sitting there when it happened, okay? So I'm not giving him credit for anything, except one thing is he kind of was a little bit laissez faire. So I'll give Clinton some credit for that. He didn't interfere too terribly much, even though he probably wanted to. This works, okay? This stuff works. You got to back up and see the big picture. You got to understand it's not a zero sum game. The zero sum game would say that if you tax more, you will increase revenue. Well, if that was true, then you wouldn't see all these people that left Great Britain. You wouldn't see all these people dying to get out of North Korea. Okay? Now I know it's not quite the same system where they pay taxes necessarily, but the point is big intrusive government limiting people's earning power. All these big government countries are just a mess, and the big government states are a mess. People are voting with their feet. They leave. The economic activity goes away. When you overtax it, that's just a fact of life. It's not a zero sum game. Remember that key term zero sum game? And for any listeners that don't understand that concept, just look it up. Zero sum game. Okay? Check it out. Thoughts, Naresh?

Well, I want to say that I didn't live in another country that was high tax, but before I moved to Florida, I lived in Maryland, which is a very high tax state, very Democratic. I think like in 2012, Obama won like around 90% of the vote there. And one of the reasons why I moved out outside of Baltimore, just being a really, really crappy place to live was high taxes. And I moved to low tax Florida.

So a question for you there is, did the government make Baltimore and Detroit, the poster child for economic disaster, a crappy place to live? Or was that just a coincidence that it was a crappy place to live in, had high taxes at the same time, you know. Right.

Well, these places, you know, you know, history. Well, Jason, Detroit, New Orleans, Baltimore, what I call the killing fields, These were not what they are today.

Yeah, right.

Detroit, what used to be, I'm sure you spent some time there and you like cars and it used to be an incredibly industrial, safe city.

Detroit in the old days was like one of the, the flagship cities of planet Earth. I mean, it was an amazing place. It was a great place.

Absolutely. And so I don't have a clear answer to your question, but what I do know is that the governments have not helped those cities. They have not helped their situations. Instead, they've gotten worse. So Baltimore this year, there are, what, two weeks left in this year, and it is on pace to have the most homicides per capita, I believe, in US history. Definitely in its history, it's going to be 2015, which was its highest kind of homicide year, but this year, it's going to be even worse. So the killings keep going up.

And look at Chicago. You know, all of these places, folks. It's just a. I mean, when do we ever learn our lesson in this world?

Big government does not work well.

Well, it's funny because I don't watch the news much, but I saw everyone on Facebook posting about Roy Moore losing in Alabama. So I said, oh, let's just turn on the mainstream news media, see what they have to say. And I saw Charles Barkley, who's from Alabama, on cnn, and he was there live at the headquarters for the Democrat who won. And he actually mentioned Baltimore, Detroit, New Orleans, Chicago. And he said Disney has to be a turning point for the Democratic Party because Democrats have gotten the African American vote all this time without really doing anything. The Democrats have. You can make the case that they've even abused the African American.

Oh, totally, totally.

And so he was saying, yet the Democrats have abused us. They haven't done anything to make our lives better. This should be the turning point for the Democratic Party. And that they can't just take. Take it for granted that they're going to get the African American vote. They actually have to stand up and do something and improve the lives of their constituencies. And that hasn't happened in any of these, you know, the Baltimores and Detroit's. So I thought he was absolutely right about that. And, you know, we'll see. I don't think it's a turning point. I don't think this election. The guy who won Jones is going to.

It's not that big a deal. He's only going to be there two years anyway unless he's reelected. But. But it's a barometer, right? It's a barometer. Okay, Naresh, we got to talk about interest rates before we go. Okay. This is super important. We probably should have started with this topic. So thank you for the commentary on that. Let's talk about rates for a minute. So look at. Rates are going up, folks. The Fed has said, okay. And they don't the Federal Reserve does not directly impact mortgage rates. It's indirect. Okay. But it definitely has an impact. Okay, so the Fed is going to raise rates one more time this year according to what they've told us. Okay? This is not the old Fed where you had Alan Greenspan talking in, you know, talking in hieroglyphics. Right. This is a more transparent Federal Reserve, okay. Than, than in the past. And so they, and they say they're going to raise rates three times next year, 2018 and two more times in 2019. Count them, that's one this year, three next year, and two in 2019. That six rate increases the Fed is saying they're going to do. And folks, that is going to be huge, Huge, huge. One Wonderful for you real estate investors who get in now, okay? You got to get in sooner than later, okay. To take advantage of that. So when those rates go up, that means it puts upward pressure on rents. This is my three dimensions of real estate concept. And go to Jason Hartman.com and look that up. If you don't know what that's about, listen to the old podcast on the three dimensions of real estate. And it puts upward pressure on rents. It has the effect of cooling down price appreciation, obviously, but that's not what we invest for anyway. And we aren't investing in over appreciated markets. Our markets, unlike Los Angeles, for example, you know, just one of many examples have fundamental intrinsic value that is understood when you understand the Hartman Risk evaluator. Another thing to search on our little search engine@jason hartman.com and listen to the old shows about the Hartman Risk evaluator. Okay, Very important things. But people will be knocked out of the home buyer market. They will be forced to rent. And that is going to put incredible upward pressure on rents. Okay? And we've already had a lot of upward pressure on rents over the past several years. Years. But it's going to get even better. So the idea is you want to buy as soon as possible while rates are low. You want to lock in that rate for three decades as a fixed rate loan. And then everybody coming after you that thinks about investing will find it harder to make those numbers work. Your rents will go up. Rents always trail prices. Okay? So that equation, those two curves really work in your favor as an investor. And again, I go back to this John Burns graph and I'm going to ask him to really dive into this and take a deep dive at Meet the Masters because he's, he's speaking there. And Naresh, thank you for booking him. Want a Speaker booked Naresh the picture smuggle arms into North Korea. Naresh, I hope you don't go to North Korea and they put you in jail because I said that. It's a joke, folks. That is a joke. Okay? We are joking. Naresh does not do arms smuggling. Not that I know of. Okay. Anyway, if rates continue to rise, more will be forced to rent. This is the top of the slide I'm looking at right now. 1% increase in mortgage rates could disqualify 5 million households from owning a $200,000 home. A 1% increase in mortgage rates disqualifies 5 million households, not 5 million people. 5 million households from owning just a $200,000 house. This is ginormous investors. Listen to me, and I'm telling you something. Don't be so picky about price and the deal. You got to be less picky, because that deal in the rearview mirror is going to look way better than it does today. Now, there are only two things that could ruin my. My prediction here, which basically, this is a prediction. Okay. Number one is another ginormous financial crisis. Like, you know, it took us 70 years to have those, and we just had one, so we're probably not gonna have another huge one. And the banks have been super conservative on the lending, so it's not going to be a mortgage crisis. We got consumer debt. We got auto loan debt. We got student loan debt. Yeah, I know those are clouds on the horizon. I get that. But I don't think that directly relates to this. And the student loan debt actually helps rental housing, so that's good. The other thing is some sort of just unknown crisis. I mean, I'm betting we're gonna have a lot of money. People losing money in cryptocurrencies, maybe the stock market. All of these things seem massively overvalued. So, you know, those people might need to step down their lifestyle, and you catch them on the way down as a landlord, so, you know, you offer them housing. So, yeah, it's. It's really looking pretty. Pretty awesome. And. And then you just talk about demographics over the next 10 years. They're nothing short of phenomenal, as we've discussed already. So, Naresh, we gotta wrap it up with a couple of things here. Number one, I want to give you a little mention. You published a book recently. The Trump Book. The Trump Book. And there's been some censorship going on, hasn't there? Just a quickie little thing on that. And then I got two more quick announcements.

Yeah, well, the book is called Trump Book. How Digital Liberals Silenced a Nation into Making America Hate Again. And it's a book. I think it's fairly neutral. It's not pro Trump, it's not anti Trump. It's really anti. What I call digital liberal. Anti digital liberal. And the book has done well. It sold well. It has great reviews on Amazon. It's available on Kindle audiobook and paperback. And yes, this book has been censored by various book promoters and book marketing companies that I've been working with for years to publish not just my books, but other people's books. And these are the same companies that are promoting former Democratic congressmen and women. Hillary Clinton's book. They've banned my book because they say it's too controversial and it's very inciting to their audience.

This is insane. Even though I was. You know what I love? I've talked about Prageru, Prager University, Dennis Prager's charitable in endeavor. They're suing YouTube because YouTube doesn't show their videos in the search results. I mean, this is just. Folks, you have to realize this. We live in a bath of dishonesty all of our lives. We don't even notice it. We just live in this whole context of dishonesty. You can't hear the dogs that don't bark. You can't think a thought that you never got exposed to. Okay. You can't get your head around an idea if you never heard about it. Okay, so this is the thing. Like, Naresh's book is a great example how you're. You're just being censored. You know, these disgusting companies like Facebook and Google, that owns YouTube, and. Well, then there's the disgusting banks. Hey, there's another Wells Fargo scandal out. Risk of being on a tangent, the Navajo Nation is suing the scumbags at Wells Fargo. But Naresh, yeah, it's just unbelievable. People are just censoring you. This is Fahrenheit 451, man.

Yeah, and here's the thing, Jason, because I sent you free copies of the book, I was promoting my book and giving it away for free. It's not like I'm taking people's money. And then they read it and they say, oh, this is a bad book. I'm angry. I want my money back. This is something that people would get for free. You know, the Kindle or the audiobook version. And I'd be glad to share this offer with your listeners as well.

Okay, Share it. How do they get it? Tell them how.

Yeah, well, easy. Just go to my website nareshvisa.com and shoot me an email through there or get on my mailing list and respond to one of the emails that I send out there and I will get you free copies of Trumpbook. And so going back to the censorship, I was giving the book away for free. So if people got angry, they could just stop reading. And it's not like they spent any money or any refunds need to be processed. They could just close a book and move on with their lives. But what I was told from these various book marketing companies, they said it was an inciting book that would really anger their audiences and it was too controversial and political and therefore they couldn't run it. And on the other hand, but they don't censor.

They don't censor Maxine Waters, that disgusting, violent person for saying no justice, no peace. You know, I mean, and all these other Trump haters. And listen, I don't love Trump by any means, okay? I think he's a strange dude for, you know, for sure. But it's unbelievable how imbalanced the whole thing is. Okay, Naresh, you got your piece out there. They can get it at your website. Meet the Masters is coming up. Coming up quick, folks. You got to make your, you're got to register, get your tickets or upgrade your tickets today@jason hartman.com masters. We've got a new page up there, by the way, even if you already bought a ticket, you might want to just check it out because there's some new info up. Jason hartman.com masters and the five year plan contest. We're going to wrap that up soon. Get your video done. Naresh, I'm looking forward to your video. I know you're going to submit one soon. Go to Jason hartman.com contest Jason hartman.com contest and enter to win up to $4,300 in prizes and do your five year plan for you. Not for us, not for the prizes for you. It'll mean a lot more than $4,300 to you as to where you see yourself in the next five years, especially with the help of income, property or real estate investing. So good stuff. Naresh, thank you for joining us. We've gone long as always. We got to wrap it up. Happy investing, everyone. Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out the show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that you guest opinions are their own. And if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that and be sure to make it official and subscribe so so you do not miss any episodes. We look forward to seeing you on the next episode.