HI 99 - Eight Financial Rules That Apply to Everyone and Their Money

Welcome to the Heroic Investing Show. As first responders, we risk our lives every day. Our financial security is under attack. Our pensions are in a state of emergency. A single on duty incident can alter or erase our earning potential instantly and forever. We are the heroes of society. We are self reliant and we need to take care of our own financial future. The Heroic Investing show is our toolkit of business and investing tactics on our mission to financial freedom.

Hello and welcome to episode 99 of the Heroic Investing show where we focus on the challenges unique to members of the armed services, first responders, active duty and those retired. But we also focus on those issues that are common to all investors. We we aim to provide the tools that enable our listeners to secure their family, their future and their retirement. And we help them put in place a solid plan to replace that W2 job with passive income so that they can start to focus on things that, if it's true, are more exciting to them. Hey, a lot of us get 100% satisfaction out of doing the job that we're doing. I got pretty close to that at different times during my career, certainly when I had the pleasure of commanding an awesome crew on the USS Tucson. But there's also times in our career where we're ready to move on. You know, I was an entrepreneur at heart, which is why I loved commanding my own little submarine and taking it, you know, places where we could operate on our own, with our own decisions. Obviously not free of all requirements, but we did certainly have the ability as a unit, as a cohesive unit to make decisions, plan our own destiny and control some stuff. And I absolutely love that because that's what an entrepreneur does, right? They have a business, they have a vision, and they're able to guide their team and their business in a direction where they feel that they can be most successful, make the largest impact on their audience. So that's what we try to do here at Heroic Investing through suggestions, through advice from guest speakers, speakers or guest podcast interviewers or interviewees, but also simply through some prudent passive investments and teaching individuals lessons that I've learned and other real estate investors have learned using the passive source of income producing rental properties. But listen, there's more than just rental properties as well. There's all kinds of alternative passive income. I help people do different versions of that, you know, whether it be real estate or being a lender, intellectual property, oil and gas, things called life settlements. So there's, there's lots of options of what you can do to bring passive income into Your life. I just happen to put real estate at the very top of that list. As you know, Jason Hartman does for many reasons because as he says, it's a multi dimensional asset, but, but it certainly has lots of tax benefits that will, you know, if you can protect yourself from taxes. Again, that's part of my day job, helping people protect themselves from taxes. You can grow wealth at a rate that you can't achieve in the normal tax environment that we have found ourselves here. So In Heroic Investing 99, Jason is going to talk with us for quite a while about eight financial rules that apply to everyone, whether they be real estate investors, Wall street investors. Again, just trying to bring some assistance in your fledgling real estate world. Unless you're a big time real estate investor with lots of experience. And then I need you on this show helping me help others. Jason has quite a few of these lists, like the Eight Financial Rules. You know, for example, his Ten Commandments of Successful Investing. That one's coming up actually two episodes from now on Heroic Investing 101. I thought that that was a really perfect title if you think of 101 as kind of the college level entry course, the beginner's course. Certainly the Ten Commandments fall right in line with that. He also had a little Lesser known next 10 commandments, the commandments 11 through 20. I haven't ran those yet on Heroic Investing. He came up with those in one of the Meet the Masters that I went to several years ago. And we just haven't highlighted them quite as much, but I will get those on this show coming up soon. We also did 30 financial mistakes that every investor makes or that investors make. Not every investor, but that investors make. That was a two part episode here on the Heroic Investing show. Jason started with the first half, a little over half of them on Heroic Investing 55. And then I followed up on Heroic Investing 56 with the second part. A little bit of overlap there between that and the Ten Commandments and maybe these eight financial rules, but they are all gems that someone else learned and that's the key. Someone else learned those in spades. So that hopefully you don't have to repeat them. If you can learn from others mistakes, in my opinion, that is demonstrating true intelligence and maturity. Of these lists of eight, my favorites are numbers four and five. And I'm not going to ruin the surprise. I'll make you listen to them to see what they are. But once you do hear them, you will say, yep, that makes sense. That sounds like Gary One that I will kind of Run as a spoiler is number six. I thought this one was really timely and consistent with what I've spoken about at the beginning here and we have on recent shows, and that is specifically to spend more time on failures than you do on successes. So there's really kind of two subjects there. I mean, we just talked about spend time learning from others failures. And if you do that in listening to these podcasts, I think you will be far more successful. And that's really what These lists of 30 mistakes and 10 commandments and all that, that's what they're doing, is teaching you what others have done throughout history incorrectly and what they've learned from it. But it's also a personal thing about don't, you know, listen to too much of your own press, Right. Avoid hubris and spend more time thinking about how you can improve, evaluate, and then improve places where you've had some mistakes. You know, in the Navy, at least in the submarine force, we have really rigorous, mature program about doing something we called a hot wash, which was evaluating every evolution, every exercise, every mission, and comparing them to what we were supposed to do, what the requirements were, or what we said we were going to do in our plan. You know, what went as expected, what didn't. And then even that stuff that did go as expected. How can we make it better next time? And then we capture those lessons learned, we share them with everyone in a post event training. And then when we're going off to do that event again, we dust that stuff off and remind ourselves what we did wrong last time or how we figured out we could be more efficient the next time around is a really, really good process. It's a process that I think in my business and a lot of people in their businesses out here in the real world don't take the time to do. We know it's a good idea. We just end up getting caught up and not taking the time to do it. And that's certainly to our own peril or at least to our own inefficiency. So please think about those kinds of things. When you have that kind of an opportunity with your team, take it. Seize that opportunity. Figure out the lessons learned by doing a hot wash and then recording them and dusting them off before you try that thing again. So, all right, so enough of all that. Here we go, Jason, sharing some wisdom for the ages.

Today, our guest will be yours truly, Jason Hartman. What I mean by that is that we made a little bit of a mistake that was on the last episode. And we always endeavor to correct our mistakes as quickly as possible here. We are not infallible. We make them just like everybody else. The difference is we're gonna be here and we're gonna try and fix them when we do. So we will do that here in a few moments, and I will explain that to you in further detail. It will all become apparent. But first, there was a really interesting little article. You see all these things in the news media, right? Seven rules for this. Ten tips for that. I've got the Ten Commandments. Actually, I've got 20. Now, there's. There's two versions of Ten Commandments. The. The first set and the addendum. And there will be another addendum forthcoming, by the way. So we're going to have 30. This investing stuff, I don't know, it's kind of simple, but in some ways, it can be a little complex occasionally, too. So this one was good. And then, of course, the great book, the 7 Habits of Highly Effective People by the late Stephen Covey. Boy, I wish we could have gotten him on the show while he was still around. What a great thinker. And just put out a lot of fantastic material. I was a huge Stephen Covey student for many, many, many years, and I had the pleasure of meeting him on a cruise ship in Russia once. There was a little event on the cruise ship, and they mentioned his wife's name that I can't remember. But so. And so Covey from Salt Lake City, Utah. And I thought, is that Stephen Covey's wife? And so I went to my stateroom on the ship, and I called the front desk and I said, may I speak to Stephen Covey? And they patched me right through to his room, and he answered the phone and I talked to him. And then we met up on the ship and talked for a while. What a great guy. Anyway, Seven Habits, ten Tips, ten Commandments, whatever. Well, this one was eight Financial Rules that Apply to Everyone and their money. And it was a Business Insider article. And as I was reading it, I was kind of thinking, you know, these are pretty good tips. A lot of these things that you see like this are just junk in the mainstream media and part of the vast Wall street conspiracy. You know, you read some of this junk, and I hate to pick on it, but like Money magazine or like Pop Culture for investing, just really amateurish. In my humble opinion. There's some good stuff in there, too. So I'm not going to completely throw the baby out with a bath water, but a lot of it is just junk. Okay. Let's just come to that conclusion, because it is. But these were pretty good, and I thought I would go over them with you and then add my own take on them because I thought they were pretty solid. So these eight financial rules that apply to everyone and their money, and this is by Morgan Houselike, I hope I'm pronouncing that correctly. It's a Business Insider article, and it says, number one, spending money to show other people how much money you have is the surest way to have less money. I couldn't agree more. We've all probably been guilty of that at one time or another. And we all have an ego, and an ego is a very important thing. I think ego is much maligned in our culture. Everybody likes to say, oh, that's just ego. That's bad. No, the ego really is a great catalyst for progress, but it needs to like everything. It needs to be kept in check. So we need to keep our ego in check. And how many times have you seen or engaged in spending money to impress other people? Now, this is, as they say in tip number one here, the surest way to have less money. And I couldn't agree more. I think that you should spend a little bit of money to impress yourself, though. And I'll get to that in just a moment. And as I talk about in the Creating wealth seminar that I do, and we just did the recent one in Little Rock and then one before that in Irvine, California, you know, I always talk about how most people go into debt and they do that by spending money on the appearances of wealth rather than the things that create actual wealth. So don't be in that trap of spending money on the appearances of wealth. It's the guns and butter kind of philosophy. Spend your money on guns. And in the investing world, the guns are things that will make our money work for us, things that will give us a return income. Property certainly is a great gun. The butter is that expensive depreciating car, that expense of depreciating clothing, that big house that you live in that is costing you a fortune. Because we know better. We know that our home is not an investment. Our home is simply an expense. If our home produced income for us, like income property does, then it would be an investment. But if it costs money, it is simply an expense. So we've got to make sure we're spending money on the things that will create wealth for us. Now, that doesn't mean being a miser or a cheapskate, because I think we can go too far with this Obviously. And I think that the miserly cheapskate philosophy is really counterproductive also. And here's one of the things that I have found, although I don't do it enough myself, but here I go again, not practicing what I preach. Yes, I do that occasionally. I say to my listeners, you should all get really organized. And then I look at my desk and I think, and my luck at my computer. And I think, maybe I should get really organized too. Human failings, we all have them, okay? But one of the things that I think is very effective and when I've done it, I think it's been very effective for me too. I haven't always done it and I probably need to do it more. And that is celebrating little victories and rewarding yourself for little victories, okay? So when something good happens, when you have a property that's going well and you're making money on it, have a little celebration. And the reason you should have a little celebration or a reward, say you want to buy that consumer item, you know, you want to buy a swanky new car or a swanky new outfit, or go on a nice dinner, you know, or a nice vacation. I think it's okay to do that to some extent. The difference is don't get into things that depreciate in value or cost, expense that have a fixed overhead. You want to celebrate these things with ideally small treats. And those things do not create a three or a five or a ten year obligation. They're just little treats along the way. I even mentioned a car. You know, it all depends how big the win is. But one of the reasons I think this is so important is that we set up our subconscious mind to be basically like a Pavlovian dog. Of course, we all know Pavlo's famous experiment with dogs where he rang the bell and fed the dogs and rang the bell and fed the dogs and rang the bell and fed the dogs and did that over and over. And then he would just ring the bell and the dogs would start salivating as if they were going to be fed even though he didn't feed them. And so our subconscious mind, you know, we can play some tricks on it. We can play some tricks in setting up this reward response cycle. And I think that's important because I think that will ultimately lead us to do things that increase our return on investment and help us make prudent financial decisions. So the miser doesn't do this. The miser just hoards and hoards and hoards and invests and invests and invests. And I say that the miser does not ultimately get as far in life as the person who prudently and conservatively rewards themselves along the way for those small victories. I think they will have a bigger, more abundant, more expansive life if they do that. So that's my advice. I don't always do it. I should do it more. You should do it too. Okay, so number two, wealth is completely relative. Well, I talk about this as well at the Creating wealth seminar. And by the way, of course, you can get that as the home study course. You can get the physical version of it for half price. Yes. When do you ever see the digital version of a product at normal price and the physical version of the product on sale? Well, as I mentioned on the last episode, if you heard it, well, you're about to hear part of it again, that we've got a big sale that@jasonhartman.com because I had this excess delivery that I didn't know about of two of my physical products and they're in my storage unit and I really don't want to even have that other storage unit. I've got a whole bunch of storage units anyway, so buy those and you can hear more about this stuff. But wealth is completely relative. That's point number two. And what I mean by that is, look, if you look at the doom and gloomers who say the world's going to end, the dollar is going to collapse, and those are the people listening to my holistic survival show. And I think there is some validity to that. It's not completely valid. I thought it was more valid when I started that show. And now that I've done, you know, 200 plus interviews interviewing all the people who think the world is coming to an end, I really kind of don't think it is coming to an end. I think it's actually going pretty well, even though we have very imprudent financial things going on in the world. And I think there will be another shoe dropping. I think that will ultimately be a very inflationary shoe. And I've outlined a good investing strategy for that. And even if it doesn't happen, I've got two other strategies where you'll do okay, but the point is wealth is relative. Okay? So think about it. If the doom and gloom scenario happens and everybody goes broke, all you need to be is a little less broke than everybody else. If everything goes great and the future is massively abundant, all you need to be is a little bit ahead of everybody else. Because all of the products you buy. And all of the services you buy in the economy are based on relative pricing. So they will adjust either in an inflationary curve or a deflationary demand curve, depending on the relative wealth of the general population. Okay? So if you're in a westernized advanced country, and I know we've got listeners from 164 countries listening, so we do have a pretty good variety of people at probably very different socioeconomic levels throughout the world listening, and we welcome all our listeners. And the one thing to understand about that is, is that if you're living in a westernized advanced economy, you are already wealthier than about two thirds of the world's population. So consider yourself very, very fortunate in that respect. Okay? Wealth is completely relative. Just understand that. All right? Number three, the goal of investing isn't to minimize boredom. It's to maximize returns. Wow, that is a good one. Now, what I take that to mean is that if you look at the gambling mentality, you look at the people who are always tinkering with the stock market, who never seem to win, who are always talking about the next big deal. This week they're doing day trading. Next week they're doing options. Next week they're doing a different variety of auctions. They're doing covered calls or naked straddles or naked shorts or whatever the heck they call them. They've got so many creative names just to minimize boredom. That's the same way it is gambling. I'm on my way to Las Vegas in two days to a conference on discounted mortgages and notes and paper and hard money lending and private lending. I know. I've been talking about that a little bit on the show. And I got to tell you, that world is fraught with potential problems. And I am really trying to do unlike some. Some of my competitors out there. Really, really deep, broad investigation. And I'm taking one of our clients with us, actually one that you may have met. He's been in a lot of our live events, and he's going with us as well to check out this event. And in Las Vegas. Think about it. Gambling, it's so complicated. I mean, I never got into gambling, number one, because I'm just too darn conservative. But number two, it's just so complicated and hard to learn. There's all these different names for things and the different cards and this and that. And if I ever did get interested in gambling, I guess I'd be interested in poker. But that one's really complicated, too. I mean, all of these funny names, they have for stuff, you know, like the turn, the river. Where do they get all this stuff from? But this is really like the stock market. It's the same thing. It's the same thing with the house flippers and the options traders and the stock people and all of their ways to minimize boredom. Okay? That's, that's not what investing is about. Investing, good investing is really pretty boring. So good, prudent, long term investing should be somewhat boring. That's the way it should be. You shouldn't have to watch it all the time. You shouldn't have to pay a ridiculous amount of attention to it. It shouldn't become your day job unless you have a huge portfolio. That's the thing, okay? It should be be a little bit boring. And the point is not to have it entertain you. The point is to have it create wealth for you. Okay? Number four in this article is the only way to build wealth is to have a gap between your ego and your income. Well, this really relates to the earlier point, right? And it just says getting rich has little to do with your income and everything to do with your savings rate.

Remember, you're listening to Flashback Friday. Our new episodes are published every Monday and Wednesday. Now that is ultimately true. However, you've got to be an investor because you know, nobody ever got rich saving money, okay? And the reason you save is so that as soon as you have enough capital to invest, if you're buying your first property or your 100th property, you need anywhere from 20 to $100,000 per property, somewhere in that range, okay? If you're buying a big apartment complex from us, maybe you need more, okay? But I'm just using the good old standard, dependable, reliable, safe investment, single family home type investment, okay? And when you do that, you need to save money to accumulate the capital. But as soon as you save enough to purchase that property and have adequate reserves of about 4% of the value as your minimum, then you need to invest. You need to move that money out of savings and into investment, okay? Because as we know, saving money will destroy our wealth if we are in an inflationary environment and if we pay taxes. So saving money is a dangerous thing. You know, sometimes the biggest risk in life is not to take the risk. Sometimes the riskiest thing is to do the thing that is perceived as the least risky, right? And so that's point number four. All right, okay. Number five, the most valuable asset you can have is a strong propensity not to care what others think. Now this one I would agree with, okay? It's so easy to get distracted by all the armchair quarterbacks, all the seemingly well meaning but possibly envious and jealous people who are our friends. Yes, that's one of the human traits we have to watch out for and guard against. Even our friends and loved ones will not always really want us to do the thing that's going to make us succeed. Why is that? Insecurity is one of the reasons for sure, right? Misery loves company. You've heard the old saying, hard to soar with eagles when you work with a bunch of turkeys, as the saying goes. So we've got to make sure that we don't care too much what other people think about what we're doing, okay? We've got to follow the tortoise and the hare path and just move along and create that wealth with our day to day discipline to just put our money in the game. Be good managers of our managers. Most of us have property managers and we don't manage our own properties directly and just be a good steward of these assets for the long term. The buy and hold investor, as I've always said, is the one who comes out on top. Okay? I have just noticed over my many years of experience in this and the thousands and thousands and thousands of people I have trained and met and spoken with, the people who are in the flipping and the speculation business, they have spending money. The people who are the buy in holders have real long term wealth. So you decide which one you would rather be. Hopefully you're in that second category, the real long term wealth people. Okay? So have a strong propensity not to care too much about what other people think. I think that's good advice, okay? Because everybody else, they're wooed by the siren song of the deal of the day, the flavor of the month, the hot trend and you know those people chasing those hot trends. All you got to do is live a few years and you realize that that rarely if ever actually works. Number six, spend more time studying failures than successes. Now that's an interesting one. It seems that we all look to success and we look at these role models, especially of extreme success. And I don't think there's very much to learn usually from extremely successful people. The people you can learn the most from, I think are the people who are about two or three steps ahead of you. Like I've said before on the show, is that great quote by Jim Rohn, the late, great business philosopher Jim Rohn, who I was fortunate to learn about and follow at the ripe old age of 17. He and Dennis Waitley and Zig Ziglar and Earl Nightingale, and then later Brian Tracy to some extent, who's, by the way, we've had Dennis Waitley and Brian Tracy on the show before in past episodes. They taught me a lot. And one of the things that Jim Rohn said is he said your income will be the average of the five people you spend most of your time with. And one of the great things about that quote is that we don't have to be influenced too much by our five close friends because now we have the opportunity to reach out and have, I'll call it virtual friends and virtual mentors. You've got me, right? I mean, I know a lot of people listening are ahead of me in the financial game. I'm not that big a deal. I mean, I'm doing all right, but there are lots of people who are doing much, much bigger things than I am. And one of the things we've got to do is we constantly want to be in an environment where we're listening to and being mentored by and hanging around with, even if it's virtually hanging around with people who are more successful than we are, because they allow us to see the possibilities and they help bring us up. They help foster maybe a little bit of that competitive spirit. That competitive spirit will drive us. Maybe that ego drive is like, hey, you know, I don't want to let them beat me. I gotta perform better, I gotta do more. And that can be a very good thing. So study failures as well as successes. So I guess my point was don't be the studying, only the extreme successes. You know, the super famous people. You know, if you're looking at Warren Buffett and Donald Trump and Mark Zuckerberg, how much can you really learn from them? A little bit, sure. But the most of the learning will take place from people who are just a few steps ahead of you. It's reachable and realistic. One of the other interesting things about actually studying failure, I'm talking about studying moderate successes there. In this article, it talks about economist Eric Folkstein, and he summed it up well. And I quote from the article here and from him, it says, in expert tennis, 80% of the points are won, while in amateur tennis, 80% are losses. The same is true for wrestling, chess and investing. Beginners should focus on avoiding mistakes. Experts should focus on making great moves. And you know, that is so true. And that's what I love about my own investment strategy, my own buy and hold investment strategy. And really, it's not My strategy, I mean, look, I've added some things thought to it and some new thought to this strategy, certainly through the inflation induced debt destruction technique, the risk evaluation technique and the land to improvement ratio, the LTI ratio, which I've talked about before. But basically this old buy and hold strategy, I mean, William Nickerson, Bill Nickerson, way back a long time ago, I don't know when he wrote his first book, but he was like the king of buy and hold real estate. And he wrote it back in, I don't know, the 50s, the 60s, you know, a long time ago. Okay, so the strategy is so proven and so renowned it's well worth considering. Okay, number seven, people are flawed. So a lot of stuff makes no sense. That's a good point. All right here in the article it's talking about be careful who you follow and understand that, you know, you might get one piece good advice from a person in one department, but it doesn't mean you should make them your life role model. Different people can serve as role models for different things. Okay? James Grant put it, and then he says, quote, to suppose that the value of a stock is determined purely by the corporation's earnings is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin, and believed Orson Welles when he told them over the radio that Martians had landed, Unquote. And you know, that's so true. I mean, people fall for all sorts of silly things in the investing world, in the speculative world. Look at the tulip bulb bubble. Look at the last housing bubble, you know, from just a few years ago, the subprime mortgage bubble. The most sophisticated people fall for incredible, incredibly stupid, stupid things. So understand, people are flawed and there's just a lot of nonsensical stuff out there. Okay? And finally the eighth point. Anything can happen at any time for any reason. And the article just goes on to say you might be laid off next week, you can be sued tomorrow, or win the lottery. Maybe you'll get cancer or a huge promotion. Stocks can rally for twice as long as you think and crash twice as fast as you assumed. History is one damn thing after another. Most of it involves money and there's nothing you can do about it. And you know what? I think that's a good point. It's good to understand you've got to have contingency plans and that makes sense. So, you know, maybe you'll have a big surprise repair on a property property. Maybe you'll have a bad tenant and you'll have to go through an eviction and a make ready. As the old saying goes, shit happens, right? It does. We do not know what the future will hold, but with a long term prudent buy and hold strategy, we can really mitigate a lot of these problems with prudent conservative investing where we're buying properties, we're following my 10, really, my 20 commandments of investing. What's number five? Thou shalt not gamble. Buy properties that make sense the day you buy them. Number three, don't invest in other people's deal. You know, thou shalt maintain control is that commandment. Follow those commandments and you are going to be in pretty darn good shape. Okay, let's get to our guest segment. I'm joking when I say that we're just correcting a mistake here from Friday, folks. So we are going to play what we did not play on the last episode. So listen in. And I know this sounds a little funky because we're doing it backwards, but this is the intro for the last episode that was not posted on Friday. So here it is. And gosh, we got a lot of good shows coming up, too. So many good ones. You know who I'm interviewing today? The great, the great Bill Bonner guests, a guy who almost never does radio interviews. Bill Bonner. He's a great writer. He's written many, many books. He is the founder of Agora Financial. And I am interviewing him today. So we'll have that on an upcoming episode soon. Here we go with the intro for last episode. Hey, welcome to the Creating Wealth Show. This is your host, Jason Hartman. And thank you so much for joining me today for episode number 421. I sure hope you enjoyed our last episode, a tenth show with Mark Devine talking about the Way of the Seal, which was really interesting. I also just finished an interview for probably my holistic survival show with John Tegan, who was a Blackwater contractor and a former Marine, but a Blackwater contractor who was right there on the ground at Benghazi at the time of the tragic incident there. And he wrote a book called thirteen Hours I think is the name of what really happened in Benghazi. And it's been on the New York Times best seller list for the past few weeks. And that was a very enlightening interview. So just speaking of military people, I just it's called 13 the Inside Account of what really Happened in Benghazi. And he's a former security contractor for Blackwater, which, you know, is the huge, huge military contractor that is controversial to say the least. But for whatever that's worth is a great interview. Anyway, look for that when it's posted if you're a follower of any of my other shows, and I think you'll be interested in that. Again, we try to give you some broad good content on a lot of things, but especially personal finance and real estate investing, which is of course our main focus on this show and a few of my other shows as well. And gosh, what should we talk about today? Well, a few things. Number one, and most importantly, we have a fantastic video on my YouTube channel. If you go to YouTube and type Jason Hartman Media Jason Hartman Media We've got a couple YouTube channels, but that's the one where we're posting a lot of content right now and video versions of our shows as well, of several of the shows. And this video on how to read a performance is just critical and I played the audio of it several episodes ago and I tell you with some of the questions I get, I really just want to play it again and again, but I'm not going to do that to you. I'm going to ask you to go review that video on our YouTube channel. And I was really upset with YouTube because they took that video down and reposted it. I guess it was getting too many views and they thought that was suspicious. We had like, I don't know, 3300 views really quickly when that video was originally posted and YouTube said that they thought the views were fake. And I guess a lot of people kind of game the system on this stuff. So anyway, I was quite upset with them. We had spent a bunch of money to advertise that video, which I think is a really, just a critical foundational understanding with investing. Okay, that is just fundamental stuff that how to read or perform a video. So please, please do check that out on YouTube or check out at least the prior episode if you want the audio only version of it. But it really does help to see it and see what I'm looking at and highlighting on the performance. So please check that out. Fundamental knowledge and help for you on being a better real estate investor and understanding how to analyze a data deal. So check that out. And a couple of interesting articles here. I haven't had time. I just accumulate all these things I want to talk to you about and it feels like I'm always behind on this stuff and I just never have time. This one published in business insider on September 15th. So it's not that old, only two weeks or so. And it is a really Interesting thing. It's talking about the different states throughout the country that have the highest percentage of single adults. And it talks about how singles, and this is something I've been saying for quite a while, are a huge, huge demographic cohort. And why is this important to us as real estate investors? Well, I'll tell you why. Many, many years ago, when I first got into the business, more years ago than I even care to think about now, it's been so long. It's amazing how a couple decades will just pass and the snap of a finger and the blink of an eye, but they do. Many years ago you would never want to consider buying a one bedroom property that was just like the curse of death. And it still is. A one bedroom property is never going to get you kind of the ideal, most stable tenant. However, it's not as bad as it used to be. In fact, there are some decent opportunities in one bedroom properties. And the reason I mention this is because of the many massively increasing single population. For the first time in the history of the country, from what I understand, there are actually more single adults of marrying age, we'll call it, than there are married couples. It's like 54%. And this is a major, major thing to think about as a real estate investor. Now there are some interesting kind of broad conspiratorial theories about this, about the government wanting people to be single, the government disincentivizing through tax code and welfare and so forth, marriage. And we've certainly seen this in some certain racial components of the society where there's some realistic reason for this belief that they've encouraged and single households with children's and discouraged marriage through the tax code and so forth and through many other things. And this conspiracy also relates to good old Madison Avenue, the advertising community, Mad Men, if you watch the show. And it relates to them because if you think about it, if you're in the business of selling consumer products or you're in the real estate business, heck, isn't it better to sell two toasters and two blenders rather than one? Well, certainly it's a much bigger market if you have more single people, right? Because a single household will buy all the same basic things that a married household will buy. They're two households instead of one. So they're going to have two of everything rather than one of everything rather than sharing things. So this is a big deal. And I've talked before on prior episodes about how in the last three presidential elections, the largest voting block, although it's not really Considered a voting block, oddly, was single adults. And most people think of voting blocs. They divide them by racial and ethnic categories, they divide them by age, like the aarp, that's a huge demographic or a huge voting block and a huge lobbying organization. Or they divide them by generation Y or generation X, my generation, which is very small generation, or the baby boomers and all these different things. Really the biggest, broadest cohort, if you will, is singles. That's the biggest one. And so when you look at this, it means that smaller properties are more desirable than they've ever been in human history in terms of what that household would contain. Being just a single person household. Of course I'm single and I guess I'm just ahead of the trend on all this stuff, folks. Now, now I'll probably get married or hopefully I'll get married sometime soon and then I'll be ahead of that trend when the pendulum swings back to marriage being more popular. But. But yeah, it really is amazing. This is an amazing article. And it, it's by Richard Florida, who I've been wanting to get on the show for a while. Admittedly haven't tried very hard, but I've talked about him a lot where he talks about the creative class cities and what that means to real estate investors and so forth. But get this, I thought I'd share a couple of these rankings because they're pretty interesting and kind of counterintuitive in some ways. In terms of singles, it says singles make up more than half the population in 27 of 50 states. And the share of single adults ranges from a low of 43.6 to a high of 55.7%, as the map above shows. And here are the top 10 and the bottom 10 states. So the states with the most single people, this one really kind of amazed me in some ways. Number one, most single people. You're not going to believe it, Louisiana. But if you think about that and you think about the conspiracy theories about the government promoting single households, right, because singles tend to be more skewed toward the left, they tend to be more democratic in their voting, and they tend to receive more government aid and more government benefits. So Louisiana, ranking number one, 55.7%. Rhode island, number two, the same number, New York. Now that one doesn't surprise me because when you take into account the highest populous part of New York State, which would be New York City, 55.5%, lots of single people in New York City. Mississippi, number four, New Mexico, California, that doesn't surprise me. Florida, number Seven. California was number six, Massachusetts number eight. And you look in the cities and there's a lot more single people in cities, of course. So you got Boston there, Nevada number nine. That's I guess a little surprising. I don't know. Vegas, baby. What happens in Vegas? State stays in Vegas. Maryland number 10. And then the bottom 10 with the fewest single people. These don't surprise me too much, I guess. Montana number 41, North Dakota 42. Minnesota, Kansas, New Hampshire, Nebraska, Iowa, Wyoming, Idaho and Utah being number 50. You don't want to be single in Utah. You're definitely a minority. There's, and that's really no surprise. Utah, very family oriented state. You've got the great Mormon religion, which I don't care what people say. Listen, I'm not Mormon, but I think every Mormon I've encountered has been a good person. Sure there are bad ones out there, but pretty good group of people. And very family and community oriented, very self reliant people and I applaud them for that. Anyway, that's kind of interesting about single people. Okay. And I know by the way, a lot of my fellow Christians think the Mormons are cult members, blah, blah, blah. I'm kind of not buying into that. So there you go. For whatever it's worth, I remember. I do remember though, an ex girlfriend years ago brought over a videotape, yes, a videotape, not a dvd, and showed me this big tape about the Mormon religion and all of these idiosyncrasies and so forth. And I don't know, I just know my own personal experience has been pretty positive. And if Romney were running for president, I'm not saying I like everything about him, but I do like his business savvy. And a turnaround specialist would probably be a pretty good thing, at least financially for the country. So that's my story. Hate me or love me, but that's what I think. Okay, just a reminder, you're listening to Flashback Friday. Our new episodes are published in every Monday and every Wednesday.

Now another thing which is interesting. I talked about this before, I believe, but it was a USA Today article from a while ago about why $1 million may not be enough to retire. And if you're investing in income property, I'll tell you, you can easily achieve financial happiness and financial independence with good investments. And you know, because I've talked about refi till you die before and how absolutely excellent that plan is for investors in this article they talk about assuring that you'll have enough to retire. They look at a Million dollar portfolio and a scenario. And now this is of course part of the vast Wall street conspiracy here and toeing the Wall street company line of absolute stupidity. And it says in the past 10 years, a portfolio equally divided between the Standard and Poor's 500 stock index, 10 year treasury notes and three month treasury bills returned an average of. Get this folks, don't fall asleep on me because this is disgusting. 4.24% a year where inflation, of course they're believing the idiotic official statistics. Most of these people, they've been losing money, okay, in this portfolio, but they think they're slightly winning because inflation averaged 2.4%. So basically their margin of return here before taxes take away probably a good 40% of it. Okay? Their margin is 2%. And then you impute inflation and you know, what are you left with there? You're left with what, 1.2% above the official inflation stats after you pay taxes and then you put in the real inflation rate and you know you are losing money. You are completely underwater, okay? So that's what's going to happen to you if you're investing in the vast Wall street conspiracy and the typical absolute disgusting stupidity in the financial press. If you invest in income property in the most historically proven asset class in America, you can easily make retirement work, especially if you got a few years before retirement. And by a few I mean, you know, 10 or 20 would be ideal. If you've got more, that's even better. But remember I've cited before that pretty famous study that was done and I believe it was back in 1994 and it was about can money buy happiness? And I have talked about this before and I'm going to pick 1994 again. It's just from memory, but what I remember from that study in reading it and it was pretty kind of revered at the time and I do agree with it. You know, in $1994, $1.5 million would be kind of the number that would, in quotes, buy happiness. Okay? That would be the number that would buy happiness. And if that's true, let's just adjust that for inflation. And based on the official statistics, which of course understate inflation, that would mean that today you would need two point. Well, I'll tell you exactly how much you need. $2,407,408.91 is how much you need to quotes buy happiness. Can money buy happiness? Well, no, it can't, but it buys a lot more happiness than poverty, that's for sure. And it's hard to argue with that one. Okay, so two and a half million bucks basically is the number you need. Well, through the plan that I've outlined, with a modest start, you can really, really achieve that by or before retirement, depending on what age you are. And remember, retirement isn't really something I think that any of us should be considering in any real way. Because retirement, my humble opinion, it's just not a good thing. It's not good for us. We need to be engaged, we need to be active, we need to be stimulated, we need to be challenged. That's the way the human animal works. So retirement not ultimately a good idea. I think we should stay active and keep working and do whatever our passion is. But it's sure nice to be able to choose to make our own hours and to do something that inspires us and something we're passionate about, rather than being Dilbert and working the corporate job in a cubicle. Right? And so to be able to have that choice, you can achieve this pretty easily. And you only have to beat real inflation and real taxation and returns and other investments because all the returns, like these idiots getting the 4.4% per year return in the USA Today outlined portfolio, terrible deal, right? But let's say that to keep up with inflation and to pay taxes and to have kind of a net that you really have to earn about 8% on your money. Okay, that's. We'll call that the break even number. I'd argue that it's even a little higher, but I'm gonna go with a lower number just to be more conservative and more in line with the vast Wall street conspiracy. And so if we can earn from our income property investments, if we can just earn 12 to 14% annually, we are vastly, vastly beating the rest of the human race. You're going to be in a very comfortable position if you just let some time go by and you can earn only 14% on your portfolio. Of course, if you go to JasonHartman.com and you look at the property pro formas there, you can see that properties have pro forma returns of easily into the 25, 30, 35, 40% annually return. And if it only goes half as well, well, what are you earning? You're earning say, 20% in that example, and you can encounter quite a few problems and, and still earn 14% on your income property portfolio. You can encounter unexpected repairs, you can encounter evictions, you can encounter make readies between tenants where they mess up your property. Now, of course, you should get a judgment against that tenant. You probably eventually collect on that judgment and you'll collect with interest, okay? But you can encounter a lot of problems in and still come out a big, big winner if you'll let 5, 10, 15 or 20 years go by and just keep running your portfolio.

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