In this informal on‑site conversation at Signature Flight Services in Boca Raton, host Jason Hartman chats with real‑estate investor Ken McElroy and macro‑commentator George Gammon about how cash‑flow‑generating assets enable the purchase of high‑end luxury items such as private jets and supercars. The trio emphasizes that true wealth comes from owning income‑producing properties—multifamily, single‑family, or other cash‑flow assets—rather than buying depreciating vehicles. They outline a "10‑80‑10" portfolio rule: roughly 10 % of capital can be allocated to speculative bets (e.g., crypto, commodities), about 80 % should be in cash‑flow‑producing investments, and the remaining 10 % in other holdings. The discussion weaves in macro themes, noting the end of the gold‑standard 50 years ago, the rise of fiat currency, and the resulting "financial repression" of ultra‑low interest rates that push investors toward speculation. Ken shares his personal scaling story—from a first rental property to a portfolio that funds jets—illustrating that the process at scale mirrors the steps a beginner takes. They stress that any asset bought must generate positive cash flow from day one, making price fluctuations irrelevant for long‑term holders. The conversation also critiques modern culture’s focus on short‑term capital gains, urging listeners to work hard, understand property management, and keep speculation under 10 % of the portfolio. The dialogue is peppered with light‑hearted banter about exotic cars and aircraft, but the core message is a practical roadmap to building cash‑flow wealth and using it to afford luxury without sacrificing financial stability.
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Hey, everybody, it might be kind of loud, but we're here at Signature Flight Services in Boca Raton.
What's that? It's a very good loud.
It's a good loud? Yeah. Why is it good?
Because you got exotic backing up right here. That is loud. But it's a very, very good loud.
Yeah. Okay, there you go. And, and check out that gulf stream, that G5 back there. And that's pretty cool.
And the Runway show.
Yeah, we're at the wings and the fashion show. So this is George gammon, that's Ken McElroy, and I'm Jason Hartman.
What's happening?
Yeah, what's happening, folks?
I'll tell you one thing is happening. Florida is open.
Florida is open for business. And nobody's wearing this.
They gave us the door, but they said, yeah, kind of nice.
Hey, so to afford all of these toys here, like a 20 to 60 million dollar private jet, $400,000 cars, what do you have to do to do that? You've had a couple of Ferraris, you got a whole bunch of exotic cars. So what do you have to do to do that? What does Robert Kiyosaki, you were just talking to him. What did he say about that?
Cash flow, baby, cash flow. You know, there's nothing wrong with capital gains, but you have to have some cash. At the end of the day, if you sell everything, you want some reoccurring.
Revenue, of course, but, but specifically, Ken, you know about the idea of if you want a new toy, then you need to buy an asset that'll pay for the toy.
Right, right.
So.
So I'll buy. I'll buy a multifamily property that kicks off the cash flow to pay for the Ferrari.
Right? Yes.
Or even a single family or whatever.
Yeah, yeah, exactly.
It just depends on the scale.
Instead of buying a car that depreciates.
Yeah.
You buy an asset that the people pay off for you.
And then you put down, the people are making your Ferrari.
Yeah, yeah, yeah.
And by the way, that's what I always say, folks. You know, we don't pay our own debts with real estate. We outsource the debt obligation to people called tenants. They pay the debt m. Pay us a little extra every month. Yeah. It's like positive cash flow.
You got it. You gotta have cash flow, but you gotta work your ass off. That's the name of the game right now. I think we're losing that in the United States right now. We're getting everything handed to us as a society.
Terrible.
And we're forgetting that you know, it's interesting, when I grew up, your buddies, no one ever talked about investing in the stock market to get rich or doing when I was growing up, saving money, it was saving money, working your ass off, starting a business, producing a good or service that people value more than the money in their pocket. That's how you get rich. But now it's completely flipped on because you've got to speculate so much, you got to gamble. And it's all about capital gains and who cares about the cash flow. We're all, we just want something that's going to triple in value for the next three days.
Which really, if you think about that, isn't that an immature style of investing?
Well, it's a lack of sophistication, lack of witness, a lack of experience. Because there's only so far that that game of musical chairs go before dance.
But also, when we were growing up, the dollar was tied to gold.
Well, when you were growing up. Yeah, when I was growing up. Hey, this is the 50 year anniversary of that.
Oh, that's true.
Yeah.
August will be 50 years off the gold standard since Nixon closed the window and temporarily close the convertibility of the dollar into gold. Right, temporarily. For 50 years later.
But since then, man, it's been a floating fiat currency.
Yeah. But the thing is though, with, with, with the way you invest, you know, it's something that actually.
Keep talking. I'm just going to show them some view here.
Yeah, it just plays into the inflation narrative. That's what the trick. If they're able to create inflation, who knows who could have a deflationary bust. You never know. But it's, it definitely puts you on the side of inflation, like shorting the dollar like we said last night. But you know, going back to cash flow and you got someone like Ken started off just understanding the property management game. That's really the hardest part of the equation.
That's where the rubber meets the road or on these cars with these giant tires here.
Yeah. Literally or figuratively.
Right.
So that's where Ken really got his experience. And he just parlayed that into just bigger and bigger and bigger, just scaling what you're doing. But really what Ken does right now is still the exact same as someone who's 20 years old, 30 or 40, who's buying their first rental property. The process is the same as Ken does it. At scale.
Yeah, yeah, yeah.
That's all it is. Yeah, yeah.
So that's why people that want to be here, maybe they want to buy their own jet or Whatever, you know, you. They will never, ever get there. Because I'm just starting with one rental property. You shouldn't have that mindset. If you want that, that's fine.
Everybody starts somewhere.
That's right. That's right.
No questions around it. I mean, there was a time when I was poor and, you know, I was 20, I bought my first rental property and, you know, built up from there, you know, But. But here's the great thing about. Oh, yeah, I. We don't have a good cameraman. That's all right. Yeah, yeah. But here's the funny thing. Ken said to me maybe an hour ago, right? We're looking at this Rolls Royce that I really like. And. And I. And I said, Ken, that's 400, 4,000. You know, my birthday's in October. And. And he goes, jason, that's a line item. So he can just pay for that for me. So thank you. Instead of COVID it says roll.
You know, one thing, though, that you say frequently that I think people might just overlook or they might not pay that much attention to, but it's very powerful, and that's that you need. The asset that you're buying needs to make sense from day one, right?
Absolutely.
Because then the price goes up or down, and it really doesn't matter to a significant degree because you're buying it for the cash flow. Right, Right. And that's why talk to people, you know, they always ask me how I investor. I say this 10, 80, 10. And the 80% of the portfolio is investing, which I define as something that pays you to own it.
Absolutely.
And that's the reason why. Because I could be a dumbass. I can be stupid. I don't have to be sophisticated. I don't have to predict the price direction because it works for me. From day one, the numbers pencil out because I'm buying that cash.
If the property doesn't make sense the day you buy it, you don't buy it unless you're playing with a small portion of your network.
Yeah, but my point. But my point is it's hedges price fluctuation. Because if you're not going to sell it for 20 years, what do you care if the price goes up or down from year to year?
You just don't care.
It's like buying a McDonald's. It's the exact same thing.
You don't worry about it. So. So what I say about that, you say it a different way. And what I've always said is that the definition of an investment is something that produces insight yeah. What's big now is, you know, of course, cryptocurrencies and bitcoin, they don't produce income. Yeah. So, but you know, people have made fortunes.
Yeah. That's why I divide that portfolio into a 10, 80, 10. So you've got a 10% allocation to speculation, which bitcoin would fall into, or uranium or platinum or things that you own. Yeah.
You've got earned income, passive income and portfolio income. And, you know, one that's strongest is.
So how much of your portfolio can you allocate towards speculation?
Probably less than 10%. Yeah, yeah, yeah, less than 10%.
Because you're a real estate expert.
Right? Yeah, because I'm actually pulling that money away from stuff that I know is going to cash flow, you know, so I'm really banking on capital gains, but I definitely do it. But, you know, we're at the point now to almost everything we're doing.
But you know, another interesting thing, and we were talking about this today, we've talked about it before, is in the world we live in, some refer to it as financial repression. Right.
Yeah.
Where basically, like you said when you were growing up, people could literally get ahead by saving money.
Right.
That was a legitimate.
Well, that was the objective. That was the way you got ahead. That was the narrative. That was the mainstream narrative. You get ahead by working hard and producing more than you consume.
But that narrative wasn't entirely false. And what made that narrative become less and less true over the years is these artificially low repressed interest rates.
Inflation. Well, inflation, because you get negative, negative real rates. So the rate of inflation exceeds what you're getting in the bank. Therefore you're losing purchasing car by actually saving, which forces you to go and speculate. And if you're not a real estate pro or if you don't listen to Jason Hartman.com or your YouTube channel, then you're going to go out there and you're not going to know what you're doing. And most likely over the long run, you're going to lose, even if you're making money short term on these capital gains.
So because you were born in the 80s. No, no, yes, yes.
He's going with 80s.
Well.
Broke the back of inflation. But the point I want to make with that is the way you said it today, and I've heard it before, that way is that it forces people to go higher up the risk curve. Yeah, yeah. Further out the risk curve. And take risks they shouldn't have to take. Like older people speculating crazy stuff or.
Private equity or angel investing, which is great, but that. That shouldn't be 90% of your portfolio, which is what you need to make it right now in order to get it.
Let's get this Lamborghini here, you know, right there. Oh, there's another one over there. So, you know, you just gotta rev them up. Right, to show it off.
We gotta. I think they're moving around the cars.
Well, the Jeep here isn't moving. We're resting on the Jeep.
On this Hummer. Yeah.
Okay, so what other ideas you want to share? And let's wrap it up.
I think that's it. I think that we gave them some good nuggets of information, kind of gave an insight on the stuff we talked about as a group.
Don't get discouraged by the news, you know, all the law changes and all that stuff, because Just got to work with it, right?
Yeah.
You got to remember that there are places in the world that are free and open up, and hopefully the place where you are, if you're restricted right now, that your place will open up in the near future as well. I've done a lot of research on the Spanish flu in 1918 to try to get my head around what's happening today. And we are not. Not living in unprecedented times. A lot of these walk. Well, not necessarily the extent of the lockdown. We saw very draconian measures back in the 19. Late 19 teens and 1918.
Let's get that. I gotta get the. The whole parade is leaving. George. Excuse me one second.
Yeah.
There they go. That's not all of them by any means, but okay. Spanish flu is what you were talking about.
Well, but after the Spanish flu, we had the roaring 20, so I. I mean, I know it's a lot different right now, but. But just there is a way to look at this as a glass app wall to be optimistic about the future. Although there's a lot of crazy things happening right now.
Okay, so that's the point. Ken says don't get discouraged about the news. If you want to buy doodads, make sure you buy assets first so you can afford the doodads.
Take out debt, make sure it's on an asset. It's going to pay you to own it and fixed.
Yeah. And there's a lot of other advice, but you guys can get that on the podcast. Oh, and now we got a helicopter. I. I just want to show. I wanna. I'm gonna end it over here. I want to show them this golf stream, this Gulf stream. I was in this Gulf stream earlier this thing is incredible. Now, they don't make that anymore. That's the G5. But, yeah, here. Here's another Rolls Royce. You can't even see it, it's so dark. What's your favorite car here?
I mean, take your pick. Yeah, I love the Ford gt, but that Pagani is probably okay. I love the Lamborghini, love the McLarens, the Ferraris. The Pagani is just so rare and unique.
And that's about $2.6 million. How much is the GT?
Oh, gosh. Depends on the year, but probably, yeah.
The new GT, the 2017, I think that's about a million now. Something like that.
And then we had the Carrera GT too.
Oh, that's amazing. An old school supercar.
Yeah, yeah, yeah. So there's the cars and the planes and. And the fashion shows going on. So we, we want to get back to the party. And, you know, all the drinks are included, so we gotta go, folks. Good night, everybody. Happy investing. Cheers.
