HS 217 - Investing to Survive with Heather Wagenhals

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

Welcome to the Holistic Survival Show. This is your host, Jason Hartman, where we talk about protecting the people, places and profits you care about in these uncertain times. We have a great interview for you today and we will be back with that in less than 60 seconds on the Holistic Survival Show. And by the way, be sure to visit our website@holisticsurvival.com you can subscribe to. Our blog, which is totally free, has loads of great information and there's just a lot of good content for you on the site. So make sure you take advantage of that@holisticsurvival.com we'll be right back.

It's my pleasure to welcome Heather Wagenholz to the show. She is host of Unlock youk Wealth Radio and author of yes you can and Bushido, the Fine Arts of the Modern Professional, co authored with Tom Hopkins, Brian Tracy and the late Stephen Covey. Heather, how are you?

I am unbelievable. Thanks for asking and thanks for having me on the show. I'm so excited.

Well, the pleasure is all mine. And you do a great job with your show. I know that firsthand. And so it's great to have you on mine, too. And let's talk a little bit about saving and investing and spending and why don't we? The logical mind says we should spend less, we should save more, we should plan for the future. And by saving, I think both of us, knowing you and your background and of course, knowing myself, we're not really necessarily talking about saving. We're talking about saving so that we can invest, because investing is what it's really all about. But first you've got to save so you have capital with which to invest. But why is it that humans don't do what they should?

It's because of how you opened the comment and the question, because logically it makes sense. We should spend less and save more. And when people ask me, what is the secret? And I said, and I say spend Less and save more. They're like, no, really, like I'm not telling the truth.

Yeah, but the problem is that's too basic for them, right?

Well, yeah, because they think that it's got to be something else because they already know that, but they don't do that. And there is the disconnect because we assume incorrectly that we're logical beings, but we're totally not logical beings based on the way our DNA sets us up in our evolution, we are biologically doomed to long term investment. We should not be successful at it biologically.

Yeah, interesting point, interesting point. So why aren't we wired this way? Is it because from an evolutionary perspective, it was so hard in the past to just to survive and we didn't think we were going to survive very long, so we sort of spent it all, whether it be whatever kind of resource we're talking about quickly rather than saving and planning.

Well, you got part of it right. So our first brain was all about survival. So it was about seeking pleasure and avoiding pain in this moment. So our brains were geared to elude saber toothed tigers, unless of course, we were hungry and then we wanted to go hunt them so we could eat. And the way we evolved over time is our brains built themselves one upon another. So since you're a real estate investor, imagine starting with a small one room house, and that's our first survival brain. And we added on two more after that. And the next brain we added on was our emotional brain. Okay, so this is where we, after we have a stimulus that we perceive out in the environment, like a saber toothed tiger or whatever, we're going to either fight, freeze, flee or do nothing because it's not going to send us in any kind of a panic. And if we do nothing, then that stimulus is going to come into this second brain of emotion. So we're going to assign a feeling to it that we give it a name and then we're going to be able to remember that. So this is where our kind of memory comes in. And only after that we have that emotion and we file it away, then can we be logical. Because that third brain was the next addition where our logic brain was built on after the first two. So it takes us that long to get there. And if one of the five basic emotions start pairing up and ganging up on the stimulus that comes in in either house, whether it's the survival brain or the emotional brain, if we get catapulted into a significant level of emotion or alertness, our body starts dumping hormones and it literally, literally shuts the circulation off to that logic part of our brain and sends the blood rushing to our extremities so we can fight or run away. So we have all of that adrenaline ready to go and it's moving to our bodies. That's where our superhuman strength comes in in emergency situations. So we can run really fast, jump really high, you know, scale offense that we're totally out of shape for and we would never do in a regular day. And that's the challenge that we have because biologically and evolutionarily we are set up to fail. Because it starts with, okay, is this fun or is this something I need to get away from or unpleasant and I need to move away from it. So either I'm going to move towards something I like and move away from something I don't like, and then we can go with that. But the logic brain says, hey, you know what? I'm going to live past tomorrow. Because that's what gives us the ability to know our own mortality. And that's what we have over other animals. They don't really know their own mortality. They know when they get sick, but they don't know that they may die from it. We have that and that's what gives us the edge. But if we can never access that edge, that's why we're going to be, like you said, spending everything in this moment, living for today.

Yep. And those are the people that don't get very far in the world. But in a way, thank God that we are so illogical because there wouldn't be a Madison Avenue if it weren't so.

Right.

Well, exactly, you know, because we were able to create more carrots to chase as a result.

Yeah, yeah, no question about it. Well, let's talk a little bit about investing then. When it comes to survival investing, where is the best place to have have money? People are afraid that the stock market is on the verge of collapse. I mean, depending on you look at it. I just had Robert Kiyosaki on the show and he was talking about how the Dow is at a triple top right now. And many people that are even more doom and gloomy think the banks will fail. And I mean, there's a lot of fear out there. What should people do?

Well, we have to remember first that the acronym of fear is False Events Appearing real. And one of the things that we most fear is the unknown or uncertainty. And so if we can make the unknown known by exploring, researching, gathering evidence for and against and then evaluating it while we're not emotionally engaged into something, then we can make an effective decision on it. And so for every person that's saying, oh, everything is going to fail, there's another person that's looking forward to that happening because they're hedging the bet. And in either case it doesn't matter because the stock market's been crashing since probably its inception. You know, and if you're, if your great grandpa would have invested at the first crash in the 20s, you'd be a kajillionaire right now with a one time lump sum investment of $10,000, even with all the crashes since then. So my thought is why would you, if you are afraid of that and don't want to take the time to go look and explore and do all of that research, that's not your bag of cookies. Maybe you don't have, you know, the educational background to do that, but you still want to make money and you're good at making money and you're good at saving money. But a savings is not an investment. So how do I flip that switch and what do I do? You got to seek out stuff that's not market dependent. And so you have to find stuff that you can invest in that if your investment part tanks, you have something that left over and that is asset backed investments.

Yeah, well, I definitely agree with you about that. Asset backed investments for sure. But just one couple notes on what you said about the stock market. First of all, I have never ever seen, spoken with or met a successful market timer when it comes to the stock market. So that's the first thing. So that's a pretty big if. I didn't want to give anybody any false hope that they could actually do what you mentioned. And I'm sure you would.

Well, you could mitigate your risk or your uncertainty about an investment by researching it. Still doesn't mean it's going to be good, but that's how you mitigate your risk. So forgive me for not being clear on that.

Yeah, yeah, no, fair, fair enough. And then, and then the other part of it is that you have to adjust that return for inflation. And when you adjust it for inflation, you know, 1929 to present day, really, the only returns have been dividends in real returns in the stock market. If you don't adjust for inflation, you've got nominal returns. Sure. But if you adjust, it's pretty much a dividend game. That's.

Well, I was pretty good in the 90s. I was a stockbroker and then I went to investment advising because I went to the day to day seek pleasure, avoid pain. And so I made a lot of money doing that, but there wasn't any value for me at the end of the day. I helped a rich person get richer. So that's when I went into investment advising so I could help people plan and still get there even if they didn't start out rich. That was kind of my thought. And so if it wasn't the market getting you like what you're sharing, I did really well, you know, just rolling stocks and stuff for like a year. I didn't even work and I just, I traded and I day traded until like Uncle Sam made it financially uncomfortable because in addition to inflation adjust, you have to adjust for the amount of tax to really evaluate whether or not it's a quality investment. And once Uncle Sam gets his gritty paws on you, he's going to decimate you.

Yep. As as usual.

No question about it. Okay, well, good. Well, let's go just so. So we kind of cleared a few of those things. Let's go to the asset based investing. So, asset based investing, what you're basically saying then, Heather, is that even if things go to hell in a handbasket, you still have an asset that produces income, right?

Correct. That's exactly what I'm saying.

So does gold qualify?

Well, gold, you know, gold is a great way to save. And here with gold, your challenge is that or any other precious metals is it's market dependent. And when the zombie apocalypse comes.

You'Re gonna, you have something to trade, but you only have something to trade to the extent that someone else recognizes that same level of value. If not, you're not going to make a trade.

Yeah. And so for the see the problem with the gold bugs, and I've never been a gold bug. I mean, I think gold is okay. You know, I just think people make too much of it, like it's some bigger deal than it really is. If the zombie apocalypse happens. Yeah, it doesn't. It's a speculative gamble. Okay. You know, if you invest in anything that does not produce income, you're a gambler. I'm sorry, that's just all there is to it. And if it's the zombie apocalypse that we're worried about, I'd much rather have a stock of bullets or food or water or something that's actually useful. I can't eat my gold. And before that'll become an actual currency, that would be a long time after the zombie apocalypse. You'd have to be way into it.

Right, exactly, exactly. You Know, and because we're off the gold standard, you know, who's going to. You still have to have an intermediary to interchange it for some other value. I mean, and the bottom line, for me, it doesn't qualify. Like, it's cool if you have it, but there again, what are you going to do with a block of gold other than maybe have somebody steal it from you because it's not making you any money, right?

Yeah. No income. It's speculative. Yeah. Okay, good. Well, we definitely agree on that. So assets have to produce income to be considered an asset, Sort of an investment. Or an investment. Yeah. So what are we down to? We're down to income. Property. Income producing real estate. Right.

It's stuff, I mean, stuff that we can either own and rent out or stuff that we can recover and lend on. So we can do loans on homes, we can do loans on cars, we can do loans. You know, I always joke around, one of my friends has those rent to own furniture stores and appliance stores, and it's renting to own. So, you know, I always say, and I was like, you know, you're the only man that I know that has more refrigerators than my entire state does in population. And he thought about it and he goes, you're right, I do own all of that, don't I? Because until they actually pay for it, they're renting it, you know, and so. So you can. So you have to have. So you have to have an asset that generates income. And. And the tangible ones for me are stuff that I know. And when I was in high school, I learned a few lessons. There were two classes that I took that I thought were the most important classes. One was anatomy and physiology because I needed to know how my body worked. And the second was auto shop. I was the first cheerleader at my high school to take auto shop, and I needed to know how my car worked.

Heather, that's awesome. Yeah.

Well, we grew up dirt poor, and my mother was always being taken by shyster mechanics. We always had a piece of crap car. And so I started working on just. I was learning just from, you know, I would go hang out with the boys that, you know, had their little hot rods and I would learn from them and I would come back and then I thought, why don't I just take auto shop, learn that. And the other thing that I learned is that when we went from. My parents divorced and my mom had had a double mastectomy, so we were living with grandpa in a bedroom. And then we went to an apartment. But once we got into a home, that was stability for the next 10 years of my life. And that allowed me to flourish and excel at what I'm supposed to do as a kid. And that's to prepare to be an adult. And so I was able to learn everything I needed to learn. And it was such an incredible foundation. And so taking that into consideration, what I know best are houses and cars and I can fix anything. My grandpa, when he retired from Ford as an engineer, used to build all kind of stuff. And I grew up in his workshop building things. And so he taught me I could build or fix anything. So I like houses and cars because I can fix them both if people mess them up. So I figure, okay, this is how I can start making some money.

So you're an investor in both. Those are your asset based investments? Yeah. Good, good, good.

And for building wealth.

Yeah. Fantastic. Hey, I want to. Yeah, no, I agree. Well, that's what investments are for. No question about it. Before you go though, Heather, I want to talk to you about some of the great stuff on your website, Unlock your wealth radio. You've just got so many great stories. I especially like the Scam alert section. Tell us a little bit about how this all evolved.

The Scam Alert is a really important feature on our website, and we introduced that about a year and a half ago because I'm an identity theft risk management specialist. I used to do credit repair for folks and cybercrime and identity theft is right up there. And it's not just the dollar amount that makes a difference, but it's what it does to you physically with the stress that it puts on you as well as the life things that it interrupts. You know, you can't go to work and sit on the phone trying to get your credit fixed or deal with something that happened to you fraudulently. And if we can provide you information on current and recurring scams that you may fall prey to, that will make our listeners and our website visitors that much more savvy when it comes to maintaining and keeping the money they've worked so hard to earn and invest.

Yeah, no question about it. Scammers just. It just drives me crazy. The number of scam artists and snake oil salespeople out there nowadays is just beyond, beyond ridiculous.

I get updates every day from the FBI, like 10 or 20 of them. And so we kind of just pick the ones that I think are really relevant that are financially detrimental.

Anything you want to highlight in particular here? I mean, there's just so many stories about, you know, whether they be charity scams, Facebook scams, employment scams, I think, you know, some of this stuff in terms of the cybercrime is actually going to get quite a bit tougher. Namely, I think Apple is going to make a big contribution to that in making it tougher in their new operating system with the fingerprint passwords. And I just have a feeling they're going to be the one company that really does it. Right.

Well, I think that any contribution that any company can do to further security is great. Here's one of the interesting statistics that many people don't realize and why understanding how our brain works and how we make decisions is that most of the time, we know who's committing the crime against us. Okay? Typical frauds and scams. We've got telemarketers. So they call, they build rapport. You've got relatives. Think about if Bernie Madoff was your buddy, for goodness sakes, you know, and my mother can't manage her money to save her life. And my brother and I were put on check systems for five years. For those people that don't know, it's like the bad credit report for checking accounts. And we could not open up a bank account for five years because my mother had bounced so many checks. And she would always put my brother and I Social Security number on everything. And so your parents and they. When I went to file a fraud claim with my credit card to get out of something that she had, she applied for a credit card in my credit and got a card and then defaulted on it. And they said, well, the only way they would let me out of it is if I filed fraud charges against my mother. And so that's one of the things that victims count on, that they know you that, like, they're your relative. They're not. Are you gonna put your mother in jail? You know, so they take advantage of it. So the key is, you know, when anything comes around is know what your motivation is. And if you are emotionally drawn one way or the other, you need to take a step back because you're not gonna make an effective decision about something. And nothing has to happen today. How many investments that. Oh, my God, it's got to close today, Jason, or, you know, you're going to miss the boat.

I agree. You know, whenever there's this kind of, like, false urgency like that, that's usually the sign of a scam, you know, unless it's just marketplace urgency. Like, certainly take the real estate market, for example. We all. If we're going to Be investors and we're going to play in a certain field, we should have our finger on the pulse of how the market is. And you know, there are certainly times when deals are moving really quick and you gotta make a decision quickly, but you not that person until you know the market and you know this is the way the market is and you have that awareness. It's not some promoter saying, oh, you gotta invest in this oil well and pool your money with a bunch of other investors. Those things are usually scams.

I mean, there are. So I have some friends that are wildcatters, that do very well. But unless you know what's going on, if you know the market, you know how to read the data. You're right. My husband says the only time he's ever lost money is when he went outside his realm of knowledge.

Yeah, right, right. That's an important lesson, Heather. You look at the landscape, figure out what are the one or the two or maybe even three things that really, really interest you. And I love income property because it's a multi dimensional asset class. It's got multidimensional characteristics. And so when I was 16 years old, I started to like real estate because I grew up without much money either. And so I thought, this is really the thing. And then by the time I was 18, I got more interested and by the time I was 20, I owned my first rental property.

And so Yesterday. Right.

Only 29 now. Sure, yeah.

Right.

And so, but, but you, you really make yourself an expert about, look at the whole landscape and then drill down on one, two, maybe even three things and become a, become an expert in those things. And then you're a lot less likely to get ripped off or fall victim to some scam.

Right. And, and real estate is the easiest one for people to become an expert because guess what, most of us have had a place to live, so we know that faucets go bad. We know that sometimes the toilet overflows. You know, a kid playing, you know, out in the street, I know that doesn't happen much anymore, but they play kick the can and the ball comes through your window. So like you can anticipate what your challenges are going to be with a particular asset, you know, and that's why, I mean, and you know, because you've lived in a house, so it's not like you're not an expert because you've had to fix things around your house. So it's real easy to get involved in real estate investment. And one of the reason why I like real estate investment over so many other things is because it's not dependent upon somebody liking or desiring something. Everybody needs a place to live.

No question about it. It's a fundamental human need. In fact, it's right on Maslow's hierarchy of needs.

Ding, ding, ding, ding, ding. You took the words out of my mouth.

Oh, I did? I didn't know that. I said that for years before I knew you. Yeah. Good, good. Absolutely. Well, good stuff. Well, just any comments in closing, give out your website. Tell people where they can learn more about you.

Absolutely. So if folks want to get involved with the radio program, we're syndicated all across America, but you can always get us@ unlockyourwealthradio.com and I'm just finishing up and turning in my next book called Cracking youg Money Code. And if you'd like to start receiving email updates and tidbits from the book at a little Insider's Peak, visit crackingyourmoneycode.com and you can sign up to receive the newsletter and get first dibs on pre orders when the book becomes available.

Excellent. Well, Heather, thank you so much for joining us today. And I think we learned some good tips.

Oh, the pleasure was mine, Jason. And you know, you were a wonderful guest. We got a lot of traffic with you, so I want you back.

All right. Well, I'd be happy to come back on your show, too. Thanks for joining us, Heather.

Make it a great day.

I've never really thought of Jason as subversive, but I just found out that's what Wall street considers him to be.

Really? Now, how is that possible at all?

Simple. Wall street believes that real estate investors are dangerous to their schemes because the dirty truth about income property is that it actually works in real life.

I know. I mean, how many people do you know, not including insiders who created wealth with stocks, bonds, and MU mutual funds? Those options are for people who only want to pretend they're getting ahead.

Stocks and other non direct traded assets are a losing game. For most people. The typical scenario is you make a little, you lose a little and spin your wheels for decades.

That's because the corporate crooks running the stock and bond investing game will always see to it that they win. This means unless you're one of them, you will not win.

And unluckily for Wall Street, Jason has a unique ability to make the everyday person understand investing the way it should be. He shows them a world where anything less than a 26% annual return is disappointing.

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Thank you for joining us today for the Holistic Survival show protecting the people, places and profits you care about in uncertain times. Be sure to listen to our Creating wealth show, which focuses on exploiting the financial and wealth creation opportunities in today's economy. Learn more@wwe www.jasonhartman.com or search Jason Hartman on itunes. This show is produced by the Hartman Media Company, offering very general guidelines and information. Opinions of guests are their own and none of the content should be considered individual advice. If you require personalized advice, please consult an appropriate professional information deemed reliable but not guaranteed.