WIN 23 - Pay It Off or Buy More Properties, and Trying to Save Capitalism from Wall Street with Nicole Gelinas

Welcome to win the Women Investing Network, the podcast where you can learn from successful entrepreneurs, business leaders and real estate investors who are winning in business and life. Learning from others is the fastest way to grow your skills, gain knowledge and avoid pitfalls so you can win. Join our hosts, Elizabeth Embry and Jason Hartman. Elizabeth is a seasoned real estate investor, experience experienced corporate executive and skilled mentor. Jason is a self made multimillionaire investor, entrepreneur and highly acclaimed thought leader. Together with their successful guests, you'll get the tools you'll need to win.

Welcome to another exciting episode of the Women Investing Network where we help women win in investing and in life. I'm your co host, Elizabeth Embry. This is episode 23 today. Our guest is Nicole Jelinas. She's a certified financial analyst, is also an author of the book after the Saving Capitalism from Wall Street. And so Jason's conversation with her is quite good. It's quite entertaining because you know how Jason is, he gets so excited about his strong point of view that Wall street is full of crooks. Modern, what does he call it? Modern day, Modern day crime organization, I don't know, something like that. But always fun when Jason talks about his passions and I think hatred of Wall street might be one of his passions. So, you know, we were in Oklahoma City and it was such a great tour. It was so neat to see all of those different properties and interact with all of the fun people, but man oh man, was it hot. And so I was able to escape Oklahoma City and go to Chicago. Chicago is a lot cooler. But also the work that I was doing looking at opportunities in that area, it allowed for a lot of escaping of the heat. Certainly it's a lot windier in Chicago than it was in Oklahoma City. So that was a nice change. But of course I always fly the same airline. And this is where Jason and I constantly have a debate because he is always looking for the least expensive direct route. And you know, as many of you listeners know, he's living in Las Vegas right now and he has this great airport where he can fly direct to a lot of places nationally and internationally. And you know, everybody wants to fly in and out of Vegas. So he uses Southwest, he uses Allegiant, he uses all of these airlines that honestly most of them I've never heard of. And I am, you know, a die hard Delta fan. So I fly Delta almost everywhere I go. And part of that is because, you know, the point system has really sucked me in. I'm diamond or almost diamond, you know, for the year, for Next year. And, you know, I enjoy my perks of being a platinum member. And I think that that philosophy difference of do you have brand loyalty and stay with one company and really earn those points, or do you go for the quick win? You know, I think that that's a fundamental philosophy difference. I'm all about the loyalty. Not loyalty necessarily to Trump, but I'm all about the loyalty. And I enjoy my ability to go first class from here to there, but it's not always direct. And this is where Jason constantly needles me. I don't think I talked about it, but when I was on my way to the Memphis property tour, I was going through Minneapolis and my flight was delayed and it was already a late evening flight. So instead of getting in at 11:50 at night, I got in at 4:45 in the morning because the flight that was connecting in Memphis was coming out of New York. And so, yeah, I really got caught in it that time and I took a couple hours nap and then I was able to hit the Memphis tour. This time when I was going to Oklahoma, I think that I also went through Minneapolis. Oh, I went through Salt Lake. I went through Salt Lake and then on the way to Chicago, because I had to alter my plans and go check out some things in Chicago. And so, of course, instead of flying Oklahoma City, Chicago, I had to fly through Atlanta. And of course, my flights actually were perfectly on time. Everything went well. Of course, it was a lot of flying time, but, you know, hey, the way I looked at it, I actually got more points that way.

Jason thinks I'm totally crazy, but. And then on my way back from Chicago, I went through Minneapolis again. But it was, you know, like I said, it's a fundamental philosophy difference. And one of the things that a lot of listeners and, you know, people that I support as a real estate planning advisor, if you will, or coach. I guess the proper term is coach. Should I pay off my property or should I buy more property, more leveraged property? And that's a pretty comp. It's. On the surface, it's very simple. Well, gosh, of course, if you can pay things off, pay them off, you'll get more cash flow. Isn't that great. But on the other hand, the more you can leverage, the more you diversify your risk, the more you can take advantage of the fluctuations in the market or, you know, the fluctuations that you might have going from market to market. So, for instance, you might have some in Indiana, some, some in Memphis, and you're not yet in Oklahoma City. So if you have more cash and you can afford to either pay off or buy more, well then now you can go into a next to market. And so I think that that's. It all comes back to your investment philosophies, where you're at with your goals and what type of goals you're trying to achieve. So to break it down a little bit further, like I said, it's not black and white. Every situation is unique. But you have to ask yourself some really fundamental questions. Do I need the cash flow? So if you have, let's say you got a bonus and you can afford to pay off some property, or you had a windfall of some sort, an inheritance, some unexpected money came your way, and now you have a choice. I can pay off. Let's say you've got two rental properties in someplace like Memphis. Well, if you've already put 25% down, that 75% loan isn't a lot of money. It's, you know, probably $75,000. Let's say if you're buying in that $100,000 range, so you could pay that off and instead of getting after all of your expenses and everything, let's say 2 to 300, 200 to $350 per month in cash flow, setting aside your maintenance, setting aside your fees, setting aside your taxes and insurance and all of that other stuff, right, you're straight in the pocket cash flow. If you were to pay it off, then you'd have, you know, 3, 4, $500 more in your pocket every month. And so isn't that a good thing? Well, if you need the cash flow, it absolutely is. So you could take the money that you have now, pay those loans off, which frees up those loan slots so you can go buy something more someplace else. If you're short of loan slots and can still get Fannie Mae loans, it also allows you to have, like I said, that larger cash flow. But one of the things that you're losing with that is you're losing the tax deductions, right? You're losing that financial incentive of having that leveraged money and not being able to take advantage of the tax discounts and depreciation that you would normally get when you're fully leveraged. On the other hand, to buy more property, you know, to leverage for more property, one, you have to be able to be qualified for the loan. So let's say you're getting close on your Fannie Mae slots or you no longer have your W2 position. You know, getting that Fannie Me loan might be more difficult. Now, the other thing is, more doesn't always mean more. You know, there's a complexity that comes with being in multiple markets, multiple having multiple tax jurisdictions that you're having to take care of. And so these are all of the things that you need to be thinking about when you make that, should I pay it off or should I buy more? Leveraged decision. You know, at the end of the day, I think that it really comes back down to what are your ultimate goals? Are your ultimate goals that you want to get as many properties as possible as fully leveraged and there's a longer outcome that you're looking for with that, or are you trying to cover your living expenses right now, today? And by having a higher cash flow, you can potentially live off the income that's coming in from your real estate. So, like I said, it's simple on the surface, but you really have to think through all the permutations of the advantages, the pros and cons of each. And it's funny because my husband and I are working through our portfolio. We come through that decision point a lot, a lot more than you would think, in all honesty. I mean, we've had this discussion multiple times where we're in seven states right now. And being in seven states, that's a lot of tax jurisdictions, that's a lot of utility bills that you might be potentially addressing. That's a lot of working with your local HOA in these various locations. It can get pretty complex pretty quickly. And, you know, like, Jason was talking, I think at one point he was in 11 markets, and I think he's pared it down to maybe six or seven. I know it's crazy. I don't know everything about Jason. Right? Surprise. But he decided to slim it down so he doesn't have less property. He just has less locations in which he has property. But we constantly are vacillating between, should we have a smaller amount of properties in which we're getting higher numbers, or. Or should we have a larger number of properties so that we can diversify? Diversification is so key, especially when you're starting to accumulate property. If you are in multiple states, if you're in multiple locations, you really get that opportunity to see what is working right for you. Now you have this idea in mind. When you start investing, like, oh, I'm going to have X number of properties, they're all going to perform a certain way. Everything's going to be beachy gain. And then when you get in there, you realize that a market may not be exactly the way you thought it was. Gosh, this market's a lot better than I ever anticipated. Or, gosh, you know, I've got a great property management team. But I'll get to tell you I don't like how they handle their information and communication. So it's a weird, quirky stuff that makes you start to go, hmm, is this working for me? Is this not working for me? And so this is where you start doubling down in some areas. So, you know, I bought four in Arkansas this year, for instance, but I've also am in the process of selling a couple in Indiana. And it's not that Indiana's bad and it's not that Arkansas is that amazing. It's just that based on what my needs are today, well, Arkansas is actually pretty amazing. But based on what my needs are today, the combination of factors in Arkansas works a little better for me than the combination of factors for me personally in Indiana. And so it's just a matter of you really have to be willing to experiment, understand your data, right? Understand how properties are performing, understand how the individual performance and the market performance is working for you specifically. So there's large scale trends and there's individual performance. And so just like, you know, if you were the COO of a company, you have to look at all the numbers, you have to look at all the performance and you make decisions based on the data that you see. Well, at the end of the day, you're an entrepreneur managing your business, your portfolio. And when you do that, you have to understand all of the moving parts of the metrics in order to make the decisions about where you're going to double down in where you're going to be moving out of, what you're going to be moving into. And the numbers always tell you what to do. And so that's where it's easier then to make that final decision of paying off or buying more. For the most part, we have continued to buy more rather than pay off because we've been able to. And it's been a really interesting ride. So with that, hopefully you found that informative. I think I came back to the full circle of, you know, you could do either one, they're both good. So I don't know that I helped anybody answer any questions actually today. But with that, I'm going to turn it over to Jason and our guest, Nicole Jelinas. Thank you.

It's my pleasure to welcome Nicole Jelinas. She is a charter financial analyst, She's a contributor to the New York Times and New York Post, contributing editor to the Manhattan Institute's City Journal and author of after the Fall Saving Capitalism from Wall street and Washington. And as you know, you regular listeners, I certainly believe that capitalism needs to be saved from Wall street in Washington that are really cronyist organizations. So let's dive in with Nicole. Welcome. How are you?

I'm doing well, Jason. Thanks for having me on.

It's good to have you on the show. And is it correct to assume that you're coming to us from New York?

Yes, right by Grand Central.

Fantastic. Well, talk to us a little bit about the crony organization. I call it the modern version of organ crime. It's known as Wall street and Goldman Sachs and this really crony cartel that exists that I used to believe was capitalistic, and I no longer do. How are we going to save capitalism from Washington and Wall Street?

Well, what's interesting is that the voters are really trying to save capitalism in their very imperfect way. If we look back to 2008, people all across the political spectrum were very upset at these bailouts that we saw starting in the spring of 2008 and continuing through the fall and really continuing until today. And people weren't upset because they don't like to see rich people or they don't want people to make more money, or they don't like bankers. They're just upset because they can see that this is not a fair system. You know, if a bank does very well and it succeeds or fails on its own merits and people are paid well, that's terrific. But people could see that these large financial institutions, many of them should have failed. They should have gone bankrupt, their creditors should have lost money, and that did not happen. The government stepped in to save them, whether it was AIG or Citigroup or bank of America through these extraordinary bailouts. And then the people who represent the industry, they very, very infrequently acknowledge the public's right to be upset. A lot of times, what you heard from people like Jamie Dimon in charge of JPMorgan Chase or Stephen Schwarzman in charge of Blackstone was people kind of complaining that it was so terrible that everybody hates banks and everybody hates capitalism. But that's not true. People just see that this is an unfairness. And the political class has never understood this either. If you look at the 2008 election, Obama seemed like the best candidate to come in as an outsider. And McCain said ridiculous things about the financial industry, which made it seem like he just didn't even know very much about it, it didn't give the voters a lot of confidence. And then in 2012, Mitt Romney, of course, was a representative of this industry. And that doesn't make you automatically disqualified in this political environment. But he never acknowledged that people had very serious concerns about this industry. And now, of course, we had a succession of establishment candidates for try their best and fail to take on Trump, because Trump, for better or for worse, and maybe for worse, is seen as the outsider here. But whatever you think of the candidates, it is healthy that the public does not want to see this establishment and this failed establishments really come back to rule us.

I agree that that is very, very healthy, that the public is fed up with this. And when we see someone like Hillary Clinton, I mean, she's just part of the game. She's in with all of that. America was not designed to be a country where we have these political legacies, whether they be Kennedys, Bush's or Clintons. I just think that that in and of itself is problematic, not even talking about Wall street and Washington per se. But do you agree with that?

Yeah, I mean, it's just insane that people thought Bush had any kind of chance. And I am, I'm not a Trump fan. I don't support anybody. But this idea that his brother had the biggest.

Repudiation of the system of free market economics that anyone has ever seen in his or her lifetime, presided over the worst economic crisis that we've seen since the Great Depression, and of course, many foreign policy issues as well. But the idea that his brother could somehow win this primary, it just shows how out of touch this the party is and was. And again, I don't support Trump, but I can see why other people, out of tremendous frustration more than anger, have voted for him. And frankly, Hillary Clinton has had almost as difficult a time. Bernie Sanders is still doing well. It is the middle of May, the primary season is almost over. She hasn't put him away as Trump put his 16.

Opponents away. And Bernie Sanders will probably win in West Virginia. He'll probably win a few more primaries in a few more weeks. And people.

Have not gotten the message that this election is over. They are still taking time out of their busy days to go and vote against Hillary Clinton, even though they are told there is really no point in doing it. And it shows how strongly people feel about this establishments.

They sure do. And, you know, I can only hope, Nicole, that this really leads to a real third party eventually. May certainly not in this election cycle. Maybe in the next one, maybe in the one after. Maybe it's 2024, who knows? But if we could see a real potential for a Libertarian Party, that would be wonderful news to me. Many out there listening might be, say it's Green Party, whatever. I would just love to see some breakup of with a two party system because it's just a ridiculous concept. In general, when we look at Wall street though, I don't think you mentioned the name that just. You can't have this discussion without talking about Goldman Sachs. I mean that that group has been criticized in so many different ways and I think deservedly so. You know, more than any other bank, they have had this giant impact on Washington, on Wall street, on Main Street. Just what are your thoughts in general about Goldman or anything you want the listeners to hear?

I think one of the problems, whether it's Goldman having top level people go to work in the treasury or whether it's Citigroup having people like Robert Rubin advise Bill Clinton back in the Clinton administration and then go to work for Citigroup and.

Be very closely related to Clinton ending Glass Steagall and then Citigroup obviously being able to become much, much larger while he was there. There is this problem with Washington policymakers. They tend to think that whatever is good for the financial industry must be good for the country. And I think that is slowly going away. We don't, we don't.

That isn't true at all. The financial industry is full of these kings and queens, these kingpins that intend to just rule over the lower classes, over the hoi polloi. It's interesting that you mentioned this because I just returned and we're not talking about central banking per se, but I just returned yesterday from Jekyll Island, Georgia where I hosted my mastermin group there. And that's the auspicious.

Birthing place of the Federal Reserve. And it was just so interesting. We had one of our meetings in the actual room that is called the Federal Reserve Room where the Federal Reserve was created just over a hundred years ago. And what a massive conspiracy. I mean just, even, even if you're not a conspiracy theorist, you just have to realize how incredibly powerful this is. But they're part of the bankster group. These are all just banksters. Right. I stayed in J.P. morgan's condo when I was. It's fascinating how these people, they still rule the world after all this time.

Yeah, I think the problem is if you come from this industry, you tend to naturally look out for it. And it's true in any industry. I mean, if I came from the steel industry, I would think it was a terrible crisis. All of these below market price steel dumping that China is doing right now in harming the western world steel industries, not really done on a free market basis. But in all of the millions and millions of manufacturing jobs lost over the past four decades, the upheaval that the working class and middle class has seen, no one ever said, this is a terrible crisis, we have to do something about it. But when it came to the financial industry in 2008, people said, we can't have these firms fail. It would be a terrible crisis. And it's certainly true that you don't want your whole financial industry collapsing all at once. It never should have got to that place. But people can see no one ever cared when they were losing their jobs, when they were losing their income. And then when Wall street got into a crisis, suddenly all of the important people care. And that has really contributed a lot to, to our toxic politics.

Talk to us a little bit about, you know, I guess maybe I'm asking for a prediction here, Nicole. Is there another shoe that's about to drop? We look at incredibly complex legislation that came out of the financial crisis, like Dodd Frank, for example, so hard to understand. What is it, 2200 pages or something like that? Do we have safeguards this time around or are we on the verge of another crisis? You know, these seem to come every 10 years. Granted, the last one was the biggest.

In 70 years and it is almost 10 years.

Yeah, that's what I'm saying.

And the housing market actually peaked more than 10 years ago. If you think about house prices peaking nationwide in the spring of 2005.

2005 or 2006.

Right. I mean, people always say, well, what if we have a lost decade? Well, we just did have a lost decade. It's not really a theoretical thing anymore. Will there be another crisis? Could there be another crisis? I think, of course, I mean, I wouldn't predict when, but we haven't stopped this boom and bust cycle. There are a lot of worrisome things that almost, you know, you don't really need a crisis to be concerned about what's going on today. I mean, house prices are still too high. We've since, since 2008, we've had a policy of trying to prop up house prices and. Because why do we do that?

Well, let me just interrupt you for one second. We've had that really since the end of the Great Depression because they've been subsidized by Fannie Mae. Right. So, but, but yes, we had it again with the CRA, we had it again with this very liberal and 0% interest rate. Absolutely, no question. And Wall street too. I mean, look at what Wall street, it's the same phenomenon there, just in a different way. But go ahead with what you were saying.

Right. With less than 4% mortgages for many, many years, just up until the past few months, we've encouraged people to continue to go out and borrow too much money to buy their first home or buy a bigger home. And why do we do that? Well, if house prices really were to be where they should be, a lot of older people would lose their net worth. I mean the baby boomers net worth is so caught up in these housing prices and so it's tied up in their house. Right. And so we continue to prop up this market so that we don't make our retirement crisis even worse than it would be. And yet we still have people. You remember the play Death of a Salesman? Willy Loman paid off his mortgage. I mean, we've got people in their 40s, 50s, early 60s. They'll never pay back their mortgages. They still owe a 30 years worth of mortgage on their house because they kept refinancing and taking money out and so forth. And we still don't encourage savings. It's impossible to save money. I mean, you used to get a form from the IRS saying how much income you made for the year, but now nobody gets those because nobody makes more than $100 worth of interest income. You know, you have to have a lot of money to make even a tiny little bit of interest. Because we're still encouraging borrowing rather than saving. Have we made.

And we're also, I should just point out, and I know you know this, but we're also encouraging risk taking, malinvestment, speculative activities amongst groups of people, demographic cohorts that are at the age where they should really be very conservative, but they can't because of monetary and fiscal policy. They are forced into these very risk laden investment strategies because there's no yield in laddering CDs anymore, which you could do that in the old days and have a reasonable yield and have a reasonable retirement, albeit of course, it gets eaten up by inflation. And just one other thing I want to mention too. Respond to it whenever you like or maybe just leave it as a rhetorical comment and that is that. But you are absolutely right that nobody's really paying their mortgage off anymore like Willy Loman did in Death of a Salesman. But.

I would argue on a philosophical basis, you're absolutely right. That's very disconcerting. But on an individual basis, I would argue that that's actually a great strategy. You know, why pay it off? It's so cheap to borrow the money. You should just keep, keep it out. And if you, even if you have the cash, use it for something else.

Yeah, it would be fine if they had money saved up, up somewhere else and they were just doing this as a financial strategy. But.

Good point, but, but they really only have $3,000 in the bank. It's not a financial strategy, it's a.

I do wonder what are people going to do when they retire. I guess a lot of people just won't retire, which is fine. I think working is, is good. Working probably keeps a lot of people alive and, you know, keeps your mind active, keeps you busy. But if you, if you can't.

I agree completely.

Yeah. I mean you start to, if you start to decline, you know, very late in life and you're unable to work for people to go down to just having Social Security income and maybe not have as many opportunities to borrow money, it will be very difficult transition.

Yeah, very good point, Very good point. And especially if they need very expensive long term care. No question about it. Okay, so back to that concept of the other shoe to drop and anything we've done to prevent it, whether it be Dodd Frank or anything else. Or maybe the better question is what strategies should listeners be adopting to protect themselves?

Well, I think the good news is we have some higher capital requirements. We really didn't need Dodd Frank to get these higher capital requirements. I don't know why you need a, a 900 page bill and then tens of thousands of pages of rules and regulations that go along with the law to do what the Fed could have already used its discretion to do. So.

Well, I'll tell you why, because there's a bunch of cronies that you need to offer pork barrel legislation to.

But I think for personal finance strategies, I always think it's very simple. I mean, save as much money as you can. First of all, make as much money as you can. I mean, most people's financial problems are because they don't make enough and they spend too much. I mean, there's almost no financial engineering strategy that can get you around. Make more money, spend less money and save more money. And so the first thing you do is you should really have a year of expenses saved up that should not be in the stock market. And you say, well, wait a minute, I can't make any money in a savings account. That's not the point. You should have a year's worth of liquid assets so if you lost your job, you can take some time to figure out what to do. And you say, well that's impossible for me to do. Well, you have to start doing it. I mean before you start messing around with the stock market or anything else. That's what people should do first. And I think after that, any money that you put into the stock market over time, a wide portfolio of stocks should still be a good idea for people who don't need the money within the next five to 10 years. If this is money that you're planning on needing in the next five to 10 years, whether it's for your kids college or you want to have more kids and buy a house or what have you, again, that money should not be in any risk market. I mean you have to really do the opposite of what the government wants you to do. If you're putting money in the stock market and stock market were to go down by half again, don't come complaining and whining that you need to take that money out because any money that you need within half a decade or a decade, you should not be taking any risk with it now. Money that you want for retirement, money that you just want someday in the future. Nothing wrong with buying very low cost index stock funds and just keep up with the global markets or go get yourself a brokerage account and start building up 10, 20, 30 individual stocks. You get the dividends, you get the capital appreciation. Really nobody should be doing short term trading. I have no idea what's going to happen to Exxon or Citigroup or any other company within the next few years. I do know if you put long term money into these markets, you'll do all right. But the key is buy the stock and then just forget about it. You know, you buy Caterpillar, don't read the paper about the sales going down in the short term. You know, you shouldn't be thinking about it for 20 years and you're certainly.

Not going to beat the high frequency traders anyway.

Right? And of course, you know, companies go bankrupt, I mean you could say, well what about Enron, other companies? Well that's why you should never have have very much of your money in one individual company. You're always going to make one very bad bet. And so you just. The key is if you're going to be really hurt by that bad bet, you shouldn't be in that bet in the first place.

Right? And I'd like to just ask you To Nicole, as we wrap up, you mentioned house prices recently and I know you have a chapter in your book entitled Safe as Houses, which is an old cliche and I would very much agree with you that real estate is highly overpriced where you live in New York. I mean, it's massively overpriced. Granted it may even go up more, but it's, it's still fundamentally unsound. And in all of the higher price cyclical markets, whether it be anywhere in the socialist republic of California or South Florida or the expensive northeastern markets, Washington, Boston, whatever, certainly New York, as I mentioned. But in these very linear, boring markets in the Southeast, in the Midwest where you can buy a $100,000 single family detached home that you can rent to somebody for a thousand dollars a month, those just haven't seen this radical appreciation, at least not yet. They probably never will because they're very linear in nature. But they produce fantastic returns without appreciation. You know, where you can get 10, 12% cash on cash and if it appreciates, your overall return on investment can be 20, 30, even 40% annually with, with a modest average appreciation over the last couple of decades. What do you think of that? I mean, it seems like whenever I talk to New York person, they're so sort of marinated in the financial markets there, even with you disagreeing with a lot of their tactics. You know, it just seems to be so omnipresent, the thinking that if you're an investor, well, you're going to invest in stocks. That's what investors do. Any thoughts on that? Any comment?

As a personal investment strategy, people have to do what they feel comfortable doing. But if you live in one of these communities where you see good value for house, you do the math. You figure out, I can rent this out on a permanent basis and I'm going to make X amount of profits. And of course, you have to keep in mind it's going, it may be $100,000, but you'll have to spend $25,000 for a new roof. Maybe tenants cause damage. If you haven't done a landlord.

I understand.

All right. Maybe you'll have to hire somebody to maintain the property. If you have more than one property, I mean, it's a. Hopefully you have.

A big portfolio of them.

Yeah, right.

Obviously a lot of large New York investors have purchased single family homes on a very mass scale and are now some of the biggest landlords of single family homes to renters. Is this a business an individual should get into? It certainly may be good for people who don't mind taking the risk, don't mind doing the work and so forth. But it is still a risk based business. And so that's up to people on how much risk that they want to take.

That is the problem. Everything is risk based nowadays. And unfortunately just putting your money in the bank is so risky because it, it doesn't earn anything after inflation and tax, you're losing money. It's, it's. And that's what we really talked about before is that this is the behavior that, that you have to engage in nowadays. You can't get away from it. You, you just can't there, you can't do these safe things anymore. Certainly you can't do bonds. Those don't make any sense, especially if we start seeing inflation rear its head again. So it's. Yeah, we live in interesting times, as the Chinese saying goes, right? Yep. Yeah, yeah, we sure do.

I mean I, as a policy issue, if you look at a 30 year bond and maybe the State of New York or whomever is issuing a bond and the interest rate is 4%, if you are buying that bond, you really have to be saying to yourself, do I never expect interest rates to be higher than 4% for the next 30 years? Because if they are and if they stay higher, you're going to lose a lot of money. And maybe that person is right. Maybe we'll never see high interest rates again. But I think a lot of people, they buy these bonds thinking they're safe investments and they don't realize, you know, a bond fund, if interest rates were to go up to 6,789 double digit percentage rates, these bonds are just like stocks. They're just going to lose a lot of their value.

Worthless. Yeah, yeah.

I mean they're not worthless, but they can, Bonds can certainly lose, you know, 20, 30% of their value even more. And I don't, I think a lot of investors don't realize that. They just think naturally they're safer than stocks. And of course if you know the risk and you want to take the risk, I think it's fine. But a lot of people, they don't even know about the risk. They think these bond funds are just very good safe investments.

Right. Absolutely. Absolutely. Give out your website and tell people where they can find out more about you and your book. And the Manhattan Institute.

Sure. We are at city-journal.org is the Manhattan Institute's quarterly magazine. And then we put up web items pretty much every day too. So, you know, you don't have to just come every quarter. And then my book is called after the Saving Capitalism from Wall street and Washington. And I'm on Twitter. Just look for my name. Nicole Jelinas.

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