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  • 550: Real Estate Pays 5 Ways: Your Audio Masterclass to Financial Freedom
    Unlock the Wealth-Building Secrets of Real Estate Investing! Learn how strategic real estate investing can dramatically transform your financial future. Discover the Revolutionary "5 Ways You Get Paid" Strategy, updated for today's times: Appreciation: Turn a 5% property value increase into a potential 20% return Cash Flow: Generate steady monthly income from tenants Return on Amortization (ROA): Let tenants build your equity for you Tax Benefits: Enjoy generous government incentives for providing housing Inflation-Profiting: Transform economic challenges into your personal wealth generator  Key Highlights: Potential 38% first-year return on investment No special certification or license required Ethical wealth-building using other people's money Proven strategy for creating generational wealth Simple, accessible investment approach for ordinary people Your wealth-building journey starts today! Share the wealth by sharing this episode with a friend. Free Resources: Connect with a free GRE investment coach at GREinvestmentcoach.com Download the infographic gift summarizing the five ways real estate pays here. Show Notes: GetRichEducation.com/550 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: [email protected] Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, real estate pays five ways updated for today's times, even with conservative assumptions, watch your total return from real estate climb to great heights today. You'll understand what billionaire real estate investors don't understand a new free audio course today on get rich education.    Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who keep top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Speaker 1  1:12   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:28   Welcome to GRE from Belgrade, Serbia to Bellingham, Washington and across 180 nations worldwide. I'm Keith weinholder. You are back inside get rich education. Today you're going to understand real estate investing really well, probably better than anyone that you know, in less than an hour. Now, before I begin investing in real estate, I seriously wondered how in the world it could possibly be a lucrative investment vehicle. I mean, like, how would that even work? Because you've got this physical structure where elements wear down the outside, tenants wear down the inside, and the whole thing only appreciates it about 5% a year. Yawn. That is really boring. Well, later I would start to put the pieces together. And actually didn't really understand leverage in cash flow until after I had bought my first rental property, I became the person, however, to coin the real estate pays five ways concept, and I discussed that years ago on the show here, and now I have updated it for today's times. So the principles remain the same, but the numbers are different. That's because today, cash flows are lower and interest rates are higher than they were five and 10 years ago. So let's see what total rate of return we come up with today, and just how we get there. And on the way, you'll see even more evidence of why compound interest does not build wealth, and getting your money to work for you doesn't build wealth either. And to say that is total heresy. In a lot of financial circles, you'll clearly see how real estate has really made more ordinary people wealthy than anything else. This is course level instruction, and you're getting it all free right here today as part of one of our weekly episodes. This will help you retire earlier than you ever imagined, or just find the time for yourself to become the best version of yourself. Now, for long time, listeners, I've got to tell you first, much of today is going to sound like a review, but I've got a really surprising twist at the end here, in the fifth of five ways that you're paid, I also have a free gift to give to you and to all listeners today. And this is not in any way, replay of old material. It's not AI generated. It never is. It is me talking to you updated for today's times. And this is we're about to get started. This is just with simple buy in hold real estate. So you don't even have to be a house flipper or a wholesaler or a landlord, and you can just use normal 30 year mortgage loans. And as we see, it doesn't even take a ton of money. These are fundamental wealth building attributes that lay people don't understand and will change your life. I mean, more than 95% of real estate investors don't even understand what I'm about to share. We're going to calculate your rate of return from each of the five ways we'll calculate, then your cumulative return on investment until it builds up and culminates. In your total return at the end today, and I'll tell you anything less than a 20 to 25% total return in this buy and hold real estate is actually disappointing, and you don't even need to take on inordinate risk. But you'll see the exact percentage that we get up to today, and how it gets even higher than 20 to 25% I mean, this is how real estate creates Young Money and old money and Fast Money and slow money, and gives you access to other people's money. Ethically, all of that, we have some new listeners dropping by today. So if you're new here, I'm Keith Weinhold, get rich education founder, Forbes real estate council member, best selling author, and long time real estate investor, also an incomprehensibly slack jawed and snaggletooth to podcaster. But see here in the audio only, you only have to hear the slack jaw, but video platforms where you'll find me and this course on YouTube and rumble, oh, through a disaster, because you both hear my slack jaw and have to see my snaggletooth. It's dreadful.    Getting back to the course here, you know, school did little to teach you and I about the most important things in life, like nutrition or relationships or money. And you know what drives most divorces? Can you guess what it is? I mean, it's not arguments over trigonometri or English grammar or the periodic table of the elements. No, it's money problems. Well, the financial education in this course, it's gonna help you solve that as much as anything you need to take on the mindset of how you must unlearn what you've learned before you can believe something else.    We're gonna use this same simple example of a $200,000 income property throughout the course a rental, single family home. Yes, you can still find many of these, and it's with a rent paying tenant. Now, if you want to think bigger than a 200k property, no problem. Say you want a $20 million apartment building, you can just multiply everything by 100 because we're talking about ratios today. Say that when you buy this property, your down payment and closing costs have you putting in 25% All right? So you've now got 50k invested on this 200k property.    Well, in the first of five ways you're paid appreciation is what it's called. Well, historically, real estate appreciates at about 5% per year. All right, see your 200k Income Property appreciates to 210k There's your 5% yawn, boring. That might only be about the real rate of inflation. That's what most people think. But look at what you just did there already. You just did something amazing. You already benefited from a force greater than compound interest. You just created compound leverage, and most people don't even know it, because your return is far greater than the 5% total appreciation your return on investment is your gain, which is 10k divided by the amount that you have invested, which is 50k because that's all that you put into this. You just got a 20% return from only the first of five ways you're paid appreciation. And now, if you're scratching your head wondering how that just happened, how did 5% return go to 20% no worries, I will slow it down. And this course never gets more complicated than this, you achieved a 5% return on both your 50k invested and the 150k that you borrowed from the bank. See the return on the bank's money doesn't go to the bank, it goes to you all while the tenant pays the interest on the mortgage loan. We'll get to that part later for you, this could be your first moment of epiphany in this course, a light bulb moment. Yes, today you'll get more light bulb moments than Thomas Edison. That is the magic of leverage. It's so simple ethically use other people's money, but most people are only getting compound interest, a return on their money, only not theirs and others like they could have great so where does appreciation come from? What is its source? Supply versus demand for real estate an area's wage growth, population growth, a region's infrastructure improvements contribute to this. The shrinking availability of developable. Land and more. Now what if real estate prices go down? You're covered. That will be addressed shortly. Here we are just scratching the surface. You're starting to figure out why wealthy people's money either starts out in real estate or ends up in real estate. And the thing is, is you can do this the same simple way that I did when I began as a real estate investor. You don't need any degree or certification or real estate license in order to do this. Real Estate pays five ways.    Now that you know about the first appreciation, leveraged appreciation in real estate's case will carry forward your 20% gain and add it onto the second of five ways you're paid, cash flow. For many, this is the most important one. One way for you to think about this second way cash flow is that it's the recurring income from your tenant that shows up, whether you had any involvement with the property that month or not. That's why this is passive income most months. This one is the most liquid of the five ways, because it pays you cash every month, and therefore you can immediately either reinvest it or just spend it and increase your standard of living. This is effectively your salary increase plan. Yes, it's the opposite of a 401 k, which is a salary reduction plan, which actually was an early name of 401 K plans, since this income is sourced by your tenant rent payment, minus the property expenses. Your Cash Flow is sourced by jobs, because that's how your tenant gets their rent payment that they pay you, and this is why I like larger metro areas, your market selection is more important than your property. That's a huge lesson right there, because it's about the durability of this cash flow. All right, we're about to run the numbers and see what your rate of return from passive cash flow is. Let's do it. We'll build on our example of your ownership of a 200k income property with your 50k down payment. All right, on the 200k rental single family home, say that your rent is $1,500 a month. That is therefore $18,000 of annual rent income. But then you need to deduct out your expenses, and you do have a lot of them. They are your mortgage and your operating expenses, like I've shared with you before. The easy way to remember those operating expenses is with the acronym VIMTUM, vacancy, insurance, maintenance, taxes, utilities and management, and paying that manager is what keeps this mostly passive for you. So to be clear, your rent income minus your mortgage in VIMTUM operating expenses equals your cash flow. You can kind of think of that as your rent overflow. Okay, here we go. Say you figure that from your 18k of annual rent income that you need to pay out 15k worth of annual expenses, that leaves you with $3,000 of cash flow, or so you thought, but you have a freak plumbing problem that creates a bill of 1000 bucks. However, you have property insurance, but say your insurance deductible is $1,000 so you've just got to come and pay out of pocket for your managers, plumber to fix it, and now the $3,000 of annual cash flow you thought you'd have only leaves you with $2,000 somewhat of a thin cash flow. Then that's a higher maintenance expense than you had previously forecast in your pretty looking pro forma projection. That often goes wrong, because something stupid often happens out of the blue in real estate investing, all right, well, with your $2,000 of cash flow, which is passive income, that's divided by your same 50k invested that gives you a return of 4% from the second of five ways you're paid. That number is what's known is the cash on cash return. You thought it would be 6% but we're being conservative. The Freak plumbing problem made it just 4% add this to the 20% from leverage depreciation in the first video, and you now have an accumulated 24% total rate of return from this income property already, and we still got three ways to go. We're just gonna keep piling onto this return in the next three ways you're paid. How high is this going to go? And you know what's interesting with this? Luke. Conservative math adding up your lofty return. It's actually conservative as we proceed, you'll note that I'm using simplification and rounding you're going to see me round down more than round up. To keep this conservative and real estate math is simple. It's just add, subtract, multiply or divide. There's nothing complex, no trigonometri or calculus or exponents. This is easy. You just have to know what numbers to use, and that's what you're learning and reinforcing today.    Now here's a weird scenario. Imagine if you had a stranger out there funding a bank account for you, making monthly contributions into this illiquid savings account. I mean, does that sound too good to be true? Nope. It exists. The third of five ways that real estate pays is exactly why this is real, as this free audio course, real estate pays five ways continues for you. Real estate has so many ROIs returns on investment that one of the five is called an Roa. That's the third way you're paid. And none of this material is new or esoteric or avant garde. It's always been out there. There's just been no one else that's put it together before this, most people were never taught how to build real estate wealth in the real world. And what's insane about this third of five ways you're paid is that now you're probably already getting paid more ways than you ever have. I mean, instead, what is most people's investing experience, it's in stocks, bonds, mutual funds, ETFs, gold or Bitcoin. I mean, that's where you're typically only paid one way, capital appreciation, if you even get that, and maybe a second way is if you have a dividend paying stock. But I mean, that's all you've got. One way, maybe two. If you want to build wealth, you've got to give your money multiple jobs. That's exactly what we're doing here. ROA stands for your return on amortization this third way you're paid is the monthly principal pay down portion of your mortgage. That's your return. So we're going to add your ROA to the 24% total return that we've accumulated so far. And now you might think you already have experience with an ROA if you have a mortgage on your own home, your primary residence, but no, not actually, because in your own home each month, a portion of your mortgage payment goes toward principal pay down and the rest of pay interest, but all you did in your primary residence is you went and you had to work to earn money all month. All you did at the end of that month was move that money from your cash pocket over to your equity pocket when that mortgage payment gets made. So that's merely a transfer of funds, but with income property, your tenant earned that cash that month to pay your mortgage principal payment, and we'll tally that up in a moment. On top of the principal, they pay your entire interest payment, plus your tenant pays you a little on top of that each month called cash flow, which was the second way you're paid. So yes, your tenant is going to work for you. If your tenants rent payment is a third of their income, they're working close to 10 days a month just for you, just to pay your rent. I mean, that is amazing. If you add properties with rent paying tenants like this. It's sort of like you have all these employees out there working for you, and yet you don't have to manage them at work. It is amazing this third of five ways focuses on that return on amortization, and the etymology of the word amortize that comes from the old French meaning death. And that makes sense, your tenant is slowly killing off your mortgage balance for you over time. So let's do this. Let's add up your ROA, all right, we're using this same example where you got a 150k loan on your 200k rental, single family home. Let's say that you got a 7% interest rate on a 30 year fixed rate mortgage, so just the plain everyday loan. Just look up any amortization calculator, enter those numbers in there, and you'll see that in year one, your tenant pays down over $1,500 of your income properties mortgage balance for you, let's round it down to just 1500 bucks, because it could have been some vacancy in there as well. Your ROA is simply this year, one principal pay down divided by your amount invested again, that is 1500 bucks divided by your 50k Of down payment and closing costs that you have in the property your skin in the game. And this is another 3% return for you. That's your Roa. I mean, you are beginning to really build wealth now. This is somewhat of a hidden wealth generator that a lot of investors never consider. Many of them are aware of this, though, it's like your tenant is funding an ill, liquid savings account that has your name on it. We'll add this 3% ROA to the tally of a 24% cumulative return that we figured from the first two ways. Yes, you are now up to a 27% total rate of return from appreciation, cash flow, your ROA, and we still have two of the five ways to discuss. We're just gonna keep piling onto your return. What is the source of your Roa? This 3% it is jobs again, your tenants income. If interest rates fall and you refinance, you'll get an even higher annual chunk of tenant made principal pay down, even with the initial loan kept in place this 7% mortgage note, how in future years, your amount of 10 it made principal pay down. Only keeps increasing over time. But we're only talking about year one in this whole example. We're going to carry forward your 27% total rate of return so far into the next one as this real estate pays five ways. Audio course will continue here in Episode 550 of the get rich education podcast, yeah, even the episode number has some fives in it as we roll on, breaking down just how the five ways build wealth more after the break, I'm your host, Keith Weinhold, this is get rich education.   You know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time, in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom family investments, liquidity fund again. Text family to 66866. Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group and MLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Chaley Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com That's ridgelendinggroup.com.   Speaker 2  23:45   This is Ridge lending group's president, Caeli Ridge listen to get rich education with Keith Weinhold, and remember, don't quit your Daydream.   Keith Weinhold  24:10   Welcome back to get rich Education. I'm your host. Keith Weinhold, as we continue with the real estate pays five ways audio course, before the break, we're rolling forward a 27% total ROI from the first three ways that you're simultaneously paid. Again, nothing complicated, just with a piece of buy and hold real estate that you purchase carefully. You don't have to do any renovations. You don't have to be a landlord. This is how you're going to build forever wealth, legacy wealth, if you don't come from money now, money can come from you. This can shake up your entire family tree. After today, you'll have a concrete plan. I don't come from wealth. I build it myself, and I'm laying out the architecture of how I did. Just that in a simple way for you, the fourth of five ways you're paid is that real estate investors are rewarded with a generous basket of tax benefits from the government because you are doing what the government wants. You're providing others with housing. Informed people know that if you spend money on certain things like solar panels for your home or education expenses, you get a tax break for spending that money. Well, with real estate, you don't even need to spend any money to get a tax break every single year. Incredibly, you get the tax deduction anyway. It's easy. Let's do it here. And you know, it's time to make something crystallized for you. And this can rock your world and even induce some disbelief. Some people say, don't get your money. Get your money to work for you. We've all heard that. Here is the heterodox. Here is the paradigm shift. If you want to build wealth, don't get your money to work for you. Outside of this show, I bet you have never heard that iconoclastic stance your best and highest use as an investor is not to get your money to work for you. It's making other people's money work for you. OPM, now, you probably heard that before as well, but I've got a twist on that. But see if you want to build wealth, do you think you'd have to both think and act differently than the masses? I mean, yes, you certainly do, but this is your differentiator, even multi decade billionaire real estate investors don't realize what I'm about to share with you forever. Wealth is built. Early Retirement, wealth is built. Your standard of living is indelibly elevated beyond what you ever thought possible because you are ethically using other people's money three ways at the same time, the bank's money for leverage in the loan, which we covered in the first way, you're paid the tenants money for cash flow and loan pay down, which we covered in videos two and three. And now here you are using the government's money for generous tax benefits at scale, which we're covering in this fourth of five ways you're using other people's money, three ways at the same time within this, this is why you're building wealth. And of course, this does not mean you're exploiting people by using their money, just the opposite. You're doing good in the world. Provide people with housing that's clean, safe, affordable and functional. Do that, and you'll be profitable in the long term and never get called a slum lord. Rental property income is generally taxed at ordinary income tax rates, but you don't have to pay tax on all of your rental income. The tax deductions are generous from rental property, you can deduct out your mortgage interest and your operating expenses, which I will not cover in our example. You also get a depreciation deduction. We'll look at that one closely, and when you sell, you can endlessly defer your capital gains tax so you never have to pay it all of your life, all right. Well, what does this really mean? If you buy a rental property for 200k and after a bunch of years you sell it for 500k your capital gain was 300k in most investments, you need to pay capital gains tax of at least 15% on this you would take a $45,000 tax hit. But with real estate, when you sell if you generally replace it with a property of equal or greater value, your capital gains tax is zero, absolutely zero. Now, rental property taxes are somewhat complicated, and I am not a CPA, I'm giving general guidance. I'm not going to get into things like your adjusted basis and other details. In fact, I'm not even going to consider this benefit of deferred capital gains tax in tallying up your rate of return. So instead, let's only look at your return from the tax depreciation portion of your full basket of tax benefits. It's going to keep things simple, and it'll also keep our example more conservative. Yes, even though your 200k rental property in our example tends to appreciate in value, the government says you can get a tax break because they say that the property wears out over 27 and a half years. That's just what the IRS guideline is. This only applies to rental property. There's no depreciation deduction on a primary residence. Let's do it on your 200k property, you can only depreciate the structures value called the improvement, not the land portion. We'll say that your structure or house's value is 150k and the land is 50k even the IRS knows that land doesn't wear out, only the structure. Divide your 150k structure value by 27.5 Yep. Pretty weird, arbitrary number, but that's how long the IRS says it takes to wear out. That gives you $5,454 that's how much you can depreciate or shelter from taxes if you're in the 24% tax bracket, that's $1,309 in tax savings for you. Divide that by how much you have invested in this 200k property. Again, that was 50k when you made the down payment and closing costs. This is a 2.6% return. Let's keep being conservative and round that down to 2% there it is our number from the fourth of five ways you're paid. We are layering on another 2% return. Now, can you really call a tax break part of your return? Is that fair? Should that be considered? Yes, it is, in this case of tax depreciation, because you did not even have to incur an expense in order to get that deduction, that's why some people call it the magic of depreciation. Usually, to get a tax break, like I was saying earlier, you have to make an out of pocket expense, like pay for fees to attend a conference or buy solar panels or pay automobile expenses. But you don't have to do that here, so the 2% rate of return for your tax benefit is even more conservative when you realize that we also are not digging into how this piece of real estate can also make you eligible for other tax benefits like a qualified business income deduction, a cost segregation and bonus depreciation. And for simplicity, we're not going to go run examples on different marginal tax brackets, and there are income thresholds and other thresholds, whether you're married or single. And of course, we are excluding that erstwhile capital gains tax that you can legally duck out of to collect all the tax benefits without me having to get deeply involved. At the end of each year, my property manager just sends my property's financials directly to my bookkeeper. And yes, I know we've got some CPAs listening to this right now thinking that 2% that is much too low of a return from your basket of tax benefits, but that is all we're going to use. We're going to add this to the ROIs that we accumulated from leverage appreciation at 20% in the first way, cash flow at 4% in the second way, and an ROA of 3% in the third way, plus this 2% from tax benefits here in the fourth way, here we are up to a 29% first year total ROI from your 200k single family income property that you so wisely purchased. Now you know how to use other people's money three ways at the same time again, the banks, the tenants, and with these tax breaks the governments.    Let's move on to the fifth of five ways. Add up your total rate of return, and then I'll give you some more important takeaways to give this context, and I'm going to give you your free gift. Your fifth way is your second biggest profit center, and most real estate investors don't even know that it exists, you're going to profit from something that actually makes most people poorer. So we're going to take our 29% add the fifth way to it, and it's going to culminate in your total number. The fifth way is called inflation profiting. Remember, it's not inflation hedging. Real Estate bought the right way is not an inflation hedge. Hedging is defensive, meaning that you break even from inflation, but no instead, you're actually profiting from inflation. That's different. This is offensive. Now a conventional financial advisor. You know, they're often out there selling investment products that tout something like a 10% rate of return. You know, synonymous with a return from the s, p5, 100. Ask your financial advisor about the five drags on that return. It's 10% minus inflation, emotion, taxes, fees and volatility, and your adjusted return is often less than zero. Just look at their track record. Stocks and mutual funds don't make anyone wealthy. They might just preserve wealth if you already have it strategically bought. Real estate has hegemony over all the other. Set classes precisely because it pays five ways. Either you can be a conformer or you can build wealth. If you want to escape financial mediocrity, you can't run with the herd. You need to get into a lot of good debt. It sounds scary until you realize that debt is tied to a carefully selected income property, meaning your entire debt payments are therefore reliably outsourced to tenants. DEBT, TAXES and inflation are three forces that make most people poorer. It makes most people poorer because they either don't have the resources, or they don't have the know how to arrange their financial life. They don't have any strategy. Well, today, you're learning how to make these three forces, DEBT, TAXES, inflation, those three wealthier with the Debase purchasing power of the dollar. You know most people, they see the price of a new car that goes from 50k to 60k or that their favorite Subway sandwich goes from nine bucks to 10 bucks, and then they just kind of hope that their salary keeps up. You know, that's sort of the average experience with inflation. Now, you and I, we would not save by stashing a million bucks under the mattress, because 3% inflation would de base its purchasing power by 30k every single year. That's why we do the opposite of saving. We borrow. For every million you borrow, we'll every year say that with inflation, your wage, salary, rent, income, all go higher by 3% now it gets easier to pay back your million dollar loan all while the tenant pays the interest, and you're profiting 30k each year. So after one year, you only owe the bank back 970k and inflation adjusted dollars and 940k after year two, and 910k after year three, inflation debases savings and debt at the same rate, so borrow instead of Save and see, this is the reason why the top selling financial author of all time, Robert Kiyosaki, a frequent guest on our show here, he says, savers are losers, debtors are winners. In an inflationary world, don't be a saver. Be a savvy debtor, because in the future, you can count on more inflation. See, the government needs inflation to occur. The easiest way for the US to repay its 10s of trillions of dollars in debt is to just keep printing lots of dollars, and that process debases every dollar that you're currently holding on to. Who cares about your debt when both tenants and inflation are just relentlessly paying it down for you? That is if you're doing real estate right, which means buying an income producing property with a loan. That's the whole formula here. That's all we're doing, buying a rental property with a loan. But when you understand how inflation both pumps up your real estate value and simultaneously debases your debt, it turns your world upside down, you almost become this inflation cheerleader, because inflation is now good for you, as this audio course is now covering the fifth of five ways you're paid. Please understand some risk still exists. You could buy in the wrong market, hire the wrong property manager, or just buy the wrong property no matter what, you're going to have some inevitable problems along the way, like that plumbing problem I mentioned earlier in the second of five ways you're paid over leverage is a risk over leverage means that you take on so much debt that you can't make the monthly payments so you can still lose money. But from listening today, you vastly increase your chances of being profitable, and that's why we say that carefully bought real estate has the best risk adjusted return. Here we go, following through with our example across all five ways on your 200k income property that you made a 50k down payment on, that is therefore a $150,000 loan that you took out at a 3% inflation rate each year, your debt is then being debased by $4,500 this is a quiet, hidden wealth generator that most investors don't even know about. $4,500 of inflation profiting divided by your same 50k down payment means that you have another 9% rate of return. Wow, a 9% rate of return that you're getting that most investors don't even know about. I mean, in the conventional financial world, I mean, they're proud to offer you a nine. Percent mutual fund return over time, and they advertise that as something good here by putting a down payment on a rental property. This 9% is another sweetener that no one even notices, and that gets added on to everything else. It's just incredible. Yes, 9% now, in the past, I used to think this return was just the inflation rate that we're using here, 3% but see, this is leveraged as well a 9% return from inflation profiting. And like I mentioned, uh, towards the beginning of the show, this is the twist for a long time get rich education. Podcast listener, see 3% that would merely be a hedge. So add this 9% to the 29% running total in the first four ways, and there you have it, an astounding 38% total rate of return from the five ways that real estate pays 38% I mean, you are really understanding why wealthy people's money either starts out or ends up in real estate, and that you don't have to be wealthy to start everything we discussed there was in year one. I mean, if someone asks you why you're investing in real estate, you can just hold up five fingers and share this episode with them. I mean, this says it all, and we could have surely come up with a higher number than 38% if you had used a 20% down payment instead of 25 then you'd have more leverage, and your total ROI would be in the mid 40s percent, and we really handled the tax portion conservatively. Here another reason your return could be higher, this was with a 7% mortgage rate and a pretty modest 4% cash on cash return as well. Yes, your total ROI is 38% now after year one returns fall over time due to the accumulation of equity in your property, so the denominator for the calculation is larger. You got 38% in year one, perhaps year two is 31% and year three is 24% but you can really see how you're getting ahead of the world in three years like that in other episodes of the show. Here, I do talk about how to limit the return attrition through refinancing and some other techniques, but these are amazing rates of return, compounding evidence that compound leverage blows away compound interest, and again, it's DEBT, TAXES and inflation that are making you wealthy. How you should know by now the formula is really simple. Just buy an income producing property with an everyday 30 year loan, even if real estate values fall, you can get paid for other ways and still have a positive return. Real estate values have always bounced back even after 2008 and see if the property is temporarily suppressed in value, you're going to have little concern with wanting to sell it when tenants are still paying you a monthly income during that time. Very few veteran real estate investors understand the five ways. Most real estate educators don't understand this either, but now you do, and to get this 38% total ROI again at times I simplified throughout I mean, your real world return is likely going to be different. It's going to be higher or lower than 38% probably. But now you know about a vehicle for actually creating durable wealth, and I would like to think that what you learned today is the most complete yet still concise way of understanding how a real estate investor gets paid. You gotta know this. This is the motivation for wanting to do this in the first place.    And hey, if you like what I've shared so far, I'd love to ask you for something, and then I have more important things to tell you and give you your free gift. As I made this course free. Hey, if you would please just share the wealth. Share this episode with a friend. I'm sure you know somebody that would benefit from this. It's really a big aha moment when you finally know how it all goes together. If you subscribe to our newsletter, you were already sent the video version of this course here in just the past couple weeks that's going to help you see how all the numbers go together. And the video course was also released free on YouTube, so if you're listening to this within a few weeks or months of the episodes release, it's still easy to find on our get rich education YouTube channel and four. Finally, in order to make this actionable and actually profit from what you learned, you can just copy me and buy properties from where I buy them at GRE marketplace, that's where there are properties conducive to the five ways you're paid. It probably does take about a minimum, oh, of a 35k to 55k down payment in order to get started. Properties are either new build or renovated. Tenants are in place. There's a property management solution, if you like, and optionally, our free investment coaching service there learns your goals, then helps match you with the right areas and properties and hey, I'm happy to tell you and announce that you can now connect directly with our completely free investment coaching service at GREinvestment coach.com, yes, this is a new URL to make it easier for you to connect with a GRE investment coach. Yeah, I kind of thought that was a good one, huh? How do you connect with a free GRE investment coach? Well, at GREinvestment coach.com I've got a free gift for you. Everything that we discussed in this course today was distilled down into one colorful infographic that we designed and laid out here so you can view it, download it, or even print it out on one eight and a half by 11 inch sheet of paper. Yeah, my team and I went back and forth on this infographic for quite a few rounds to make it just right. I like how it looks, and I've never known anyone else to do this all the ways real estate pays concisely onto one sheet of paper. The link for that infographic gift is in the show notes for this episode at get rich education.com/ 550 since this is episode 550 get it at getrice education.com/ 550 Yeah, the infographic gift is a memento of this course and the time that we spent together today. Think of it as your diploma, and it's a diploma that doesn't come with 12 years of student loan payments either. Yes, it is just a piece of paper, but is it worth more than the piece of paper known as your bachelor's degree or your MBA? I don't know. You can be the judge. So congrats, graduate. Now you know how real estate makes ordinary people wealthy, but learning this today really doesn't benefit you if you don't find the right property in the right market with a property manager. If you so choose a property manager, you've got to take action. You usually want to start small, including with investor advantage, single family rentals for as little as 200k just like our example, some cost even less. We will help you do just that, and do it for free with our coaching book a time and get it on the calendar at GREinvestmentcoach.com that's GREinvestmentcoach.com    I'm get rich education's Keith Weinhold, thanks for being here, but you weren't here for me. You were here for you. I'll see you next week. Don't quit your daydream.   Speaker 3  48:25   nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC exclusively.   Keith Weinhold  48:49   You know, whenever you want the best written real estate and finance info, oh, geez, today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers, it's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters, and I write every word of ours, my self, it's got a dash of humor, and it's to the point, because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream. Letter, it wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to 66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866.   The preceding program was brought to you by your home for wealth, building, get rich, education.com.  
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  • 549: Who You Are vs. Who You Could Be with Loral Langemeier
    Keith introduces the three types of freedom: time freedom, money freedom, and location freedom, and how real estate investing can provide all three. He is joined by special guest, Loral Langemeier, a global wealth expert, who shares her journey from a $25,000 investment to becoming a millionaire through real estate and mentorship.  Debt is Not Negative: Loral emphasized that debt is simply the cost of money and can be a positive tool when used responsibly. Tax Strategies for Wealth Building: She introduced the "tax trifecta" - understanding how you make money, how to activate tax code deductions, and how to invest in alternatives like real estate to reduce taxes.  Active Engagement and Mentorship: Loral stressed the importance of actively engaging in your wealth-building journey, getting the right mentors, and continuously learning. She believes the difference between those who succeed and those who struggle is their level of active participation and willingness to learn from experts. Resources: Ask questions and make requests at AskLoral.com to receive free tickets, ebooks, and other resources. Show Notes: GetRichEducation.com/549 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: [email protected] Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, it's the first time that we have a certain legacy finance personality on the show. We're talking about how you can cultivate your own personal wealth mindset, how to creatively add value to your real estate and how to put your kids to work for big tax deductions and more. Today on get rich education.    Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, who delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:12   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:28   Welcome to GRE from the second state of Pennsylvania to the second to last State of Alaska and across 188 nations worldwide. I'm Keith weinholding. You are back for another wealth building week. This is get rich education, and coincidentally, they are the two states where I've lived my life. Every single one of us has a gap in our lives. There is a gap between who you are and who you could be. And today, my guest and I will talk about this some more. Look, there are people who should already be financially free, but they're not. Their residual income could exceed their expenses by now, yet they aren't financially free. It's not because they're lazy, it's not because they're stupid, it's because they're stuck in one of these three traps. Number one, they're working harder instead of smarter. Number two, they're playing small instead of playing to win, which is like paying off low interest rate debt instead of keeping their own money, like I discussed last week, or thirdly, investing in all the wrong things, or not investing at all. And the worst part is that these people don't even realize that they're doing it. Most people aren't even cognizant. They don't have any awareness of the gap. You're not going to make progress on closing a gap that you don't know exists, you've got no chance of hitting a bull's eye when you're aiming at the wrong target. And I think it helps to develop a structure in your life where you have to tell yourself, I better do a good job here, or else. Yeah, it's the or else part that's a motivator. Now, some people won't extrapolate that mantra beyond the workplace. The number one thing that keeps employees showing up at work is fear. They tell themselves, I better show up at work on time, or else, I better do a good job on this project, or else I better give a great sales presentation. Or else. Now that's all well and fine, but to close the gap between who you are and who you could be, tell yourself something on a higher level, like I had better get some residual income outside of work, or else I'm going to stay stuck in a soulless job forever, and I'll never get that time back. So you've got to set up the right for else consequence for yourself. And then, yeah, of course, there are smaller ones like, I better avoid eating kettle chips, or else I'll gain weight. Let's be mindful that there are three types of freedom. You've got three types time freedom, money freedom and location freedom. Real Estate Investing gives you all three. You can make an unlimited income. There's the money freedom part. You can remotely manage your property managers from anywhere. There's your location. Freedom. And since you're not directly responding to your tenant, your property manager is, well, there's your time, freedom, you've got a buffer from emergencies, once you get this dialed in, and it does take a few years, oh, now you've got the time freedom, the money freedom and the location freedom. What do you want to avoid only making a big income? It was recently reported that Wall Street bonuses were way up this past year. Okay, yeah, but how happy are those finance worker Manhattanites who wear an iron pressed button down shirt and a Patagonia vest for 14 hours a day. That's not time freedom for sure, and it isn't location freedom either, unless it's 100% work from anywhere. You know, in my life, I recently got a great reminder of this. It really hit me. I have this close friend. He was the valedictorian of our high school class. I think I brought him up before. He's still a tight friend. I mean, sometimes we go on vacations together. Well, we have a high school class reunion back in Pennsylvania this summer, and among him and our other like, closest group of friends, my tightest guys, I'm always encouraging everyone to, hey, spend at least a week together, because we can't all get together like this that often, and because I have the time freedom to kind of suggest that and even push for that. Well, my valedictorian friend, he is a surgeon in St Louis, and among this tightest knit group of friends, he's the only one that cannot get the week off so that we can all hang out together more after the reunion. Instead, he can only get three or four days. He's got to get back to work as a surgeon in St Louis. Now, I'm sure he's compensated really well, and he doesn't live a bad life, but as a surgeon, you know, it's just become blatantly obvious that he doesn't have either the time freedom or the location freedom. Yet I do as a remote real estate investor, even though it's not something that I studied in college, but my valedictorian surgeon friend, you know, he had a long educational path, you know, undergrad and med school and residency and a ton of training and all these years tied up in his medical education. Therefore, you know, sometimes when people do that, they feel obligated, like that's what they should do, that's what they have to do, because he's already put so much into it. But he only has one of the three types of freedom. And no matter what you went to school for, if you find out about something better, like a great business idea or remote real estate investing, you've got to consider pivoting into that and go into that if it makes sense for you, the world changes. It keeps getting faster, and you've got to change with it. So obtaining financial freedom through real estate helps you deal with an external locus of control issue where life is constantly happening to you, rather than something you can influence. When you're an employee, life happens to you more often than when you're the one pushing the buttons, when you control the three freedoms now, you are narrowing that gap between who you are and who you could be.    I didn't mention it previously. Two weeks ago, I brought you the show from Las Vegas, Nevada, last week, from just outside Colorado Springs. And today I'm here in Anchorage, Alaska, where I'll be for a few weeks before heading to London, England, and then from there, on to Scotland. I plan to visit the former home of the father of economics when I'm in Edinburgh, Scotland, of course, that is Adam Smith, the author of The Wealth of Nations. I might tell you more about that at that time.    Before we bring in our guest this week, a quarter recently ended.  Here is our asset class rundown. The NAR reported that the median sale price of an existing home rose 3.8% year over year in February, marking the 20th straight month that sale prices increased year over year. Mortgage rates fell from 6.9% to 6.6 per Freddie Mac this is all year to date. Q1, the S, p5, 100 was down four and a half percent. The NASDAQ down 10 and a half percent. That's officially correction territory, as those tariff years dominated. The quarter interest rates of all kinds are a little lower yield on the 10 year, Tino falling from 4.6 to 4.2 despite inflation concerns, inflation hovering just under 3% for most of the quarter, Bitcoin down 12% oil is still super cheap, beginning the quarter where it ended near 70 bucks. Gold has been the star performer this year. Are up 17% just in the quarter, and for the first time in history, has searched the over $3,000 an ounce, its best quarter since 1986 in fact, this century, gold has now outperformed the S, p5 100 by two and a half times. Just incredible. There's our asset class rundown. Let's speak with this week's guest.   This week's guest has been a long time, prominent, well known name, perhaps even a household name. She is a global wealth expert, six time New York Times, best selling author, and today, she runs integrated wealth systems and other alternative asset platforms since 1996 she's been involved in multiple areas of finance, mentoring, real estate investment, business development and gas and oil. And much like me, she teaches people her strategies on how to make money, invest money and keep money, but together, you and I can look forward to getting her spin today, and you've seen her seemingly everywhere over time, in the USA Today, The Wall Street Journal, the view Dr Phil in every major legacy network channel, many times she is on a mission to change The conversation about money. She was known as the millionaire maker from back when a million was actually a lot of money. Welcome to GRE Loral Langemeier.   Loral Langemeier  11:31   hey, thank you. It's great to be here. Look forward to talking with your audience,   Keith Weinhold  11:35    Laurel, though we're a real estate investing show and audience here, I think that you and I would agree that wealth building starts in the mind that most valuable six inches of real estate between our ears. What's your take on cultivating a wealthy mindset?   Loral Langemeier  11:50   You got to hang out with millionaires. I said the fastest way to become a millionaire is hang out with them. Is for me. I knew that's what happened. 1996 Bob Proctor introduced me to Robert Kiyosaki, Sharon Lechter, I flew down, sat at her kitchen table. I walked out that day. I flew in as an exercise physiologist for Chevron, building fitness centers in their blue collar like offshore oil rigs, refineries like the sexiest places in the world, Kazakhstan and goal Africa. I went in as an exercise physiologist. I went out the next day as a master distributor with a cash flow game. And I jumped, I quit my job and said, I'm going to go follow this Japanese kind of game around. And I was teased and teased and teased. Keith because, I mean, Rich Dad, Poor Dad didn't really hit until 1998 so sort of this risky proposition. But like with anything you say yes, you figure it out. And I knew people asked me over the time. They said, What would have happened if Rich Dad, Poor Dad didn't hit, if it didn't become as big? I said, we just opened up another door that's such a message for people, their need to see the path of how to do everything before they move is honestly one of their biggest saboteurs. So for mindset, I think mindset also goes with knowledge, because I just know, having taught this, you know, just this whole millionaire hold like a millionaire maker book. And for all your listeners, I can give them a ebook copy of the millionaire maker. So love to give that out to everybody for free. However. You want to do that in the show notes, but becoming a millionaire is the same thing as take like you said, you got to learn to make money. As an entrepreneur, even if you have a job, you've got to learn to make money. You've got to learn to keep it through better tax planning, and you have to invest in alternatives, which is why real estate was my first millionaire status. And I've been a millionaire now in nine industries. So that's kind of exciting new hit nine industries this last year. So done in a lot of different categories. Real Estate was my first in 1999 and during that period, if it wasn't hanging out with Robert Sharon, Keith Cunningham, like Bob Proctor. I mean the guys. I mean when you're living around millionaires, the fastest way to not only get your mindset, but then your behavior and your knowledge levels just skyrockets because you're around I mean people who live it, and they're living it every day. I think those who sit on the bleacher seats, I call it Keith, where they're just watching, reading, but never getting in the game. They're the ones who like they're sitting in the oyster seats, right? They're just watching. They're not actually get on the playing field.   Keith Weinhold  14:09   Sure, it harkens back to the classic Jim Rohn quote, you are the average of the five people that you spend the most time with. Laurel when it comes to mindset, one thing I think about is that every single day, 8.2 billion humans wake up, and every single one of us has this gap between who we are and who we could be, yet most of us make zero progress on this ever present gap. So when it comes to wealth mindset and finances, what can we do?    Loral Langemeier  14:38   You gotta get a mentor and a coach. And I got a mentor and a coach when I was 17, what shifted me and really changed the whole trajectory of my life. I grew up at farm in farm girl in Nebraska, and at 17, I was going off to university, also going to play basketball. And so I went to one of those pre sports seminars, and Dennis Whateley was a speaker. And. And I ran to the front of the stage, and I got the book, Think and Grow Rich, and that I can tell you, a farm girl 17, going like, there's a whole other way to live. So instead of going to school to get a law degree, which is what I went into, which I still think I'd be a heck of a little debater and negotiator, but I do that enough in business now, I got a finance degree, and I just studied. And my first mentor at 17, I walked into a bank, and I remember asking the bank president, will you mentor me? Because rich people put their money here. I need to understand money, because I don't understand it. And I was never really raised in that conversation, which I would say, 99% of the planets that way. And I have taught and traveled this work since, you know, 1999 when I became a millionaire, Keith, I've put this work into six continents, all but Antarctica. So I know it works in principle. Everything we will talk about today works in every continent. The benefit is the United States has the most corporate structure, the best tax structure, the best tax strategist, stack strategies. So even my high net worth international clients end up, typically in Nevada, with a C Corp or some sort of asset company or trust, where then they can buy us real estate, US gas and oil and activate our tax code for them. So we do a lot of really high, high level international strategies. Just because I bent all over to do that, when very blessed to do that, it's interesting, because I think mentoring, you're not going to be taught this. And what drives me crazy when people say, and I'm sure you've heard this a million times on your podcast too, Keith, schools should teach this. No, they shouldn't. Parents, you need to teach it. You need to be more active in your household than your family. And instead of letting Tiktok raise your kids, you need to raise your kids. So I do a lot of work in this category, because my kids are now 18 and 25 raised them a single mom, but legacy work is critical, and that's why I have a game. I have a millionaire maker game. So from the cash flow game, I have a game, and I think the parents have got to put the conversation about money in the household, and they got to monitor like, what they say, you know, don't ever, ever say to a child. Don't ask for it, or, you know, or we can't afford it, because you can afford anything you want if you learn to make money. And I think Keith is part of this. I know we're in a real estate show, but you know, how many people want to be real estate millionaires and never make it? How many people want to do like you said, whatever, the life they're really meant to live? But again, I think they're in I don't think I know their environment, who they hang out with, who they spend time with, what they read there. Are they binging your podcasts and my YouTube channel, or are they binging Netflix and Hulu and watching John like how you feed your mind and what content, how many books you read? I don't care if they're ebooks audiobooks, but you've got to put new content in your brain all the time and be around the people making it happen.   Keith Weinhold  17:41   Oh, that's great. Sure. To change yourself. You got to change your five, change your mentors, change your influencers, and, yeah, be that parent that teaches your children about money, and you don't have to teach that money is a scarce resource. I really just think that's one part of a mindset. That's where most people's mind goes when they think about money. They think about it as a scarce resource for one thing, and it's pretty counterintuitive with the mindset. I mean, if you want to be in the top of 1% you're probably going to be misunderstood and even iconoclastic.   Loral Langemeier  18:13   Yep, I would agree. And you know, another thing with mindset that I think is interesting is, and again, I'm gonna go back to knowledge, about consuming the right knowledge. And on my YouTube channel, which is, you know, Laura Langmuir, The Millionaire maker, it's family friendly. It's for five years old and up. We actually have a YouTube journal, Keith, that we did, where it says, What day did you watch the video? What did you learn? What will you do? And in 365, days, because I'm there every day, here is your this. And that's what I tell parents. I said, get yourself and get your kids a journal and at least one lesson from every recorded, you know, video. So I would say, give me five to 10 minutes a day just for a new piece of content. And the biggest one that is searched on my channel. I want to relate this to real estate is people's mindset and understanding with debt. They have such a negative, negative relationship to debt. And I want to start with this. Debt is the cost of money period. It is not negative. I think it's the most positive thing you could do. And as a real estate investor, arbitraging debt, meaning, if you can get debt for two, 3% or 0% I have over 500 sources, I can get 0% financing for 21,24 months, that's free money that's not hard money, that's not 13% 14,15, that's free. And I would go into a million dollars of 0% debt I have, and I will at the end if I can invest it and make 10,12, 20, 30% so people need to learn, debt is your friend. If you use it in a responsible, organized and educated way, it is absolutely your enemy if you're using it to buy lifestyle crap. So like, debt is such a weird thing. Keith and I don't care how long I've had clients, if they grew up with a lot of debt and a negative impact around money, they can be a millionaire and still have this weird relationship to death. Oh my god, debt, and it's literally. They tremor. It's like it's just money, and there's plenty of it. It's just the cost of it. Or is it being paid to you, or are you paying it out and arbitraging that that range could build. I mean, that alone, if you just learned that strategy and applied it on top of your real estate strategy, would triple, if not 10x your portfolio,   Keith Weinhold  20:19   like we say around here at GRE financially free beats debt free. You understand the difference? So does our audience. A lot of people don't. In fact, trying to retire your debt and slow your progress toward being financially free. I love it. Yep, you know what's funny, Laurel, just like you're coming on this show today, sometimes I'm a guest on other shows, and the way I've started to have the host introduce me to say, Hey, if you want your show to get some attention, say that our guest today, me has millions of dollars in debt, and he has from a young age that attracts attention. They think it's a negative thing. They don't know that my debt is outsourced to tenants. They don't realize a net worth statement. That's only the debt side of the column. We haven't talked about the asset side of the column, so it's really just an example of being paradoxical and iconoclastic. There we move beyond the mindset Laurel. I know you have some really actionable things on how you can help people build wealth quickly. Tell us about that.    Loral Langemeier  21:16   So again, using debt is a massive piece of it. I'll just talk about some of the stories, like when I got into real estate in 1999 real estate in 1999 I lived in Marin, California, Sausalito, specifically right on the water. I shouldn't be on one side, right the San Francisco Bay. And got pregnant at 19 January, 8 was like, Oh, little sticks like, Oh, I'm gonna be my mom. And I knew I'd be a single mom. So I entered parenting as single mom, and I struck that, you know, another check for $25,000 seems to be the number for a real estate mentor that I've been kind of putting off. And I said, Oh, it's time. I said, so right now let's go. I have nine months. And he said, Why do we have nine months? I said, I'm really close to being millionaire, but I gotta hit millionaire status. And I need this much cash flow by my 34th birthday, which was June that year. I said, because in September, I'll be having a baby. And he went, what dropped the phone, and so he said, All right, so I wired him the money, and he said, meet me in Oklahoma City the next day. Yeah, well, there's a ticking clock. Yeah, there was my timeline nine months. But we went straight to the streets. And I think for the for me, I was privileged to be with a whole team, and I don't think I am a massive advocate. If you don't know what you're doing and you haven't done it, why take 100% risk in any industry that you've never played so I only got 15 20% of that run. But here's what I came with. In 1999 I knew how to build a database because Bob Proctor taught me that. So during the cash flow era, I bought my own inventory, took out debt, bought $500,000 of games, put them in my own warehouse so I could collect my own database. So from 96 to 99 I had acquired 18,000 people who had bought Rich Dad, Poor Dad books, cash flow, cash flow, 101202, all his the products, and I had my own financing. So I was doing my own product. I had my own stuff. And all this is a big backstory, because a lot of you in real estate don't have a database. And here's the value I brought to that team that earned me another almost 10, 15% of equity is I brought 18,000 people, and when they saw that, they're like, you could help us raise the money, I said, I don't know to raise money. And they said, we do so again, I bought my way into a team for 25,000 in a mentoring program. There's about 10 of us that met in Oklahoma City, went down to Norman, and within less than a month, we raised $16 million out of that database. They did. I didn't know how to do it again. I sat on the sideline, but highly mentored and guided. So I was on a winning team from the beginning. We bought so much real estate, and then we went into the remodel. And so right then it's like, well, let's own the construction company, so that way we could get better buys. We can buy for the whole street. We can buy for the whole apartment. So we bought we started construction companies. We started being the distributor of the windows and doors in Oklahoma. We did that in Kansas. Now we do flooring as part of the distribution. We've done stoves. I mean, you name it, if you're going to buy it, buy it from yourself, or some way that you get paid extra. And then, like I told you before we went on the show, I would have the property management company. So we would start that, which was then came along with the cleaning companies. Gotta have the cleaning companies, the cleaning crews, the hauling crews. You're gonna pay one 900 got junk, buy your own truck, lease your own truck, haul your own stuff, and then rent it out lease it to others. So when we say cash flow fast in real estate, I went all in. So I own 51% of every property management company, and I put a ad in the paper for an electrician or a plumber, because they were mine most of two expensive things. And so they became partners. And I just made a lot of stuff, quite frankly, but I made it up with a lot of mentoring and guidance, of which those guys are still great, great friends of mine. We still own a little bit of property together. We went to Mexico and did a whole run through Mexico. The team was the most vital part. And what I say to folks in real estate, if you want to go big is you better get a database. I just find key that so many people in real estate don't understand. The Association of having a database, and the way I describe it is, today I might not want to buy, but if you don't have my name, phone number and email, and you don't continue to market to me the day, I am ready to buy or sell, you're no longer on my radar because you're not keeping in touch with me. Your job is an agent, a broker, an investor, I mean, is to build this database of people who then will go along with you on a journey. And I can tell you, it was a very blessed to have done it that way, but that 18,000 is what helped me become a millionaire. Because I had the people. I didn't know what to do with them. I didn't know how to raise my I didn't know anything about a PPM. I knew nothing, but I learned it all, and I was under a very, very successful. You know, decades and decades of success team. So, you know, they were 20,30, years my senior, but boy, I learned. I really leaned into it. And I think people do buy into programs and mentoring communities, but they don't do the work. And I see it all the time, I don't know how many people, and I'm holding up my millionaire maker book, and then this latest one, which is how I made my kids millionaires on paper at 10, again, by using trust real estate. Put them in my real estate company, shareholders,   Keith Weinhold  26:05   make your kids millionaires. Is the title of the book you just held on that second one.   Loral Langemeier  26:10   That one's a 2022, that was my latest best seller, and how I did it with my kids. And again, this back to The Parenting. So I can go a lot of ways, Keith, but I think the do it fast is go wider. I think so many people just go into buying just the asset, and they don't like I'm in the cannabis space right now in Nevada, legal. I'm an illegal cannabis I have licenses and very similar, if you're going to go in and you say seed to sale, you own everything like so I mean, the guy who's running my farm, he owns the label makers. He owns the, I mean, if you name it, he owns the nutrient company, because you need nutrients for the plant you're going to own. You're going to own. So the more you own of what you do and you have to pay, the more you keep your cash flow. And again, I see that mistake with real estate people subbing all the work to so many people. It's like there's so much cash that just went out that could be at least a percent of that could have stayed home with you. Sure   Keith Weinhold  26:59   100% there's an awful lot there. You're a big believer in vertical integration, in bringing in all these levels and stages of construction and management and so on, and bringing them in house. And yeah, it's interesting. You talk about the importance of the team. Here, we talk about how your team, whether that's your property manager, your mortgage loan officer, your 1031 exchange agent, how your team is actually even more important than the property itself. And yeah, when it comes to having a database these names Laurel, it's amazing, in a way, reassuring, in a high tech world with AI, that it still comes down to that primordial human connection of people and who you know you're the listener. As you've listened to Laurel, you could probably tell that she was a star student, which is why she's now a star teacher and mentor so much more when we come back with Laurel Langemeier, this is Get Rich Education. I'm your host. Keith Weinhold.   you know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back, no weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom. Family investments, liquidity fund again. Text family to 66866.   hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridgelendinggroup.com that's Ridgelendinggroup.com.   Hal Elrod  29:43   This is Hal Elrod author of The Miracle Morning and listen to get it rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  30:01   Welcome back to get rich education. We have a well known name in the finance space. For decades, Laurel Langemeier with us. She has done an awful lot of real estate investing in her career, and as you can tell, she's got her own recipe, her own formula. She does things differently, she integrates. She brings things in house. Has multiple companies, and Laurel knows that you can be a profiteer when you serve the customer or the tenant, really, to the maximum amount. A lot of people have a gap there, and there's an opportunity cost. And Laurel, I know that one way you serve people is with Airbnbs in the Ozark region of Arkansas. Tell us about what you're doing there. That's really interesting.   Loral Langemeier  30:41   So we bought pretty big houses, and a few of them we actually the one we were remodeling it, and that's when we really got to know the Ozarks. And there's a lot of tentacles. And so to get, like, from the properties we were buying to where you would rent a boat or a jet ski or get your watercraft, it was all the way around the lake. I mean, that's two lane roads, and it just took forever. And I thought, well, let's so we have another LLC that we bought some boats and jet skis. And again, when you get to know what do people really go to the Ozarks part that we call it the Redneck Riviera. They go to party. They go to party more than they need some bougie house to stay in. That's not what they really come they want to stay on the docks. So instead of putting a lot of money, we said, how can we force Do we have one property has 22 beds, so 22 people can sleep, but they just barely sleep there because they party. So we put more money in rehabs, into the dock, expanding the dock, big sound systems, a big bar, refrigerators, just made it super fun. And then when the tenants come, they don't just rent for the night. We also give them. We'll get your groceries and booze. We'll stock your bar down on the dock if you want. We'll pull up our boats and jet skis. So we had our own small fleet. Again, we just stacked on more service. So when the tenants arrived, a we got, you know, anywhere between depending on the boats and the jet skis and the tubes and all the ropes and everything they wanted, water skis. I mean, whatever they wanted to rent. Basically, we became like a rental company, and everybody freaked out, and they said, Oh my gosh, you're going to get killed in insurance. You're not. I mean, yeah, it's a lot more planning, and it's more work to get all that prepared. But that was anywhere between 500 to 1000 more a night in just the Airbnb. So again, why? If you're going to do one thing, do more for them, the more you serve a client, I don't care what area it is, yeah, the more you serve people, the more money you will make, because they're going to buy it, they're going to have to go get their booze on their own. They're going to have to go get groceries like that's a whole day of getting all that gear to their property versus, let us just save you a day on your holiday and let us do it all for you. There's so many creative ways that you could just serve people, and if you don't know what to do, ask them, What a novel concept. I do surveys all the time, like always doing polling and surveys. Hey, I'm a money expert. What do you want me to talk about? That's what right now, if you really look at a lot of my YouTube and a lot of my social media, people want reduced taxes. So like, I'm doing a heavy, heavy lift, because it was a survey that told me to do it, not just because Laurel decided to do it. And I think so many of you don't realize your audience will tell you what they want and how they want to be served. If you're listening, that's how you make money. And so many people as you know too Keith, that come as the entrepreneur saying, This is what I'm going to teach you. Well, nobody asked, nobody asked for that content. You wonder why it's not working. Is because you're pushing your agenda versus pulling and giving and serving their agenda?   Keith Weinhold  33:23   Well, that is a great point. How do you know what people want? Two words ask them, which is exactly what you're doing there and the way that you're adding value and amenities onto a property there, like with what you're doing with Airbnbs in the Ozarks. It actually brings up a thought for another Jim Rohn quote. Jim Rohn said money is usually attracted, not pursued. Tenants are attracted to your rental units, new luxurious floors, and you'll soon profit when they compete over it.   Loral Langemeier  33:52   Yeah, it's a lot of this stuff. It's not difficult. It's just different. And I use that saying all the time because people are like, Oh my gosh, it's so scary. He said, It's not scary. The only reason why people put fear and risk and that kind of negative energy and words, you know, language around, I think real estate or money or any of that, is the lack of knowledge. Because if they don't know, anything that you don't know is scary, like you and I talked before the show about aliaska. I mean, if you don't know how to ski and you try to go to aliaska, good luck. You would be scared out of your mind. But once you learn, it's exhilarating. And I find out with everything. So anything you approach and just notice the hesitation, is it because you need to learn it then lean in and find the best in class to teach you and like, shortcut your learning curve. You don't have to study for years and years and years and years. Becoming an entrepreneur is a decision right now, today, in two minutes, make a decision, and then get to work on what your offers are. You say, Well, what am I going to offer? People ask them, and they'll tell you what they're going to buy from you, because they're buying stuff all day long in this economy, they are buying and going to continue to buy.   Keith Weinhold  34:56   If you yourself have a question for Laurel, you can always ask. Ask it at Ask loral.com L, O, R, A, L and Laurel, what are some of the more outstanding questions that you get over there, and how do you help them with some of the most important ones?   Loral Langemeier  35:12   I'd say the number the biggest flood of content and questions right now is, how do we reduce taxes? I made up this term called the tax trifecta, because what affects your tax return is how you make your money. If you're just an employee, meaning a w2 like in America, that's what it's called. And Kiyosaki said it best in Rich Dad Poor about there's two tax systems. You're an employee, you're going to get tax pieces. You live on what's left. You're an entrepreneur, and you make money inside of a company. You activate 81,000 pages of tax code, and then you pay tax. So you decide how, where you want to pay tax. I call this living corporate life. So when how you make your money inside, what kind of a company? Right? And then activate the 81,000 pages of code for the deductions. Like I teach my people, they'll never go on a vacation. They're gonna have a business trip. And when you're in real estate, you can go anywhere in the world legally on a business trip, as long as you do what's required to actually make it a business trip by looking at real estate, and it's not that difficult. I mean, the reason I'm in a lot of different businesses is my kids have never been on a vacation. I don't take vacations because they're not deductible. I take business trips. So I teach families how to employ their kids. How to do all of that, like, how do you activate your kids? I mean, when my son was born in 1999 he was employed day one. He had Roth IRA By the second day of his life, and he was funded every day. And he's 25 now, just that one move made him a millionaire, just the one move of maximizing your Roth IRA strategically using it to invest in real estate. So I use a lot of participating notes. I did all sorts of different plays to grow their Roths tax free, tax deferred. So I'm super active about the whole family being in a real estate business. I think real estate is it's the first one I went after, and it's still the first one I tell lots of families. I mean, it's got to be in your portfolio. I still own a lot of commercial real estate, some residential, I said, in the Ozarks, but most of mine went commercial within the last especially COVID, I went all commercial for the most part, besides a few pieces of residential. Back to what do I that tax trifecta, how you make money, how you activate the tax code. And then the biggest one that nobody in financial planners will not tell you about it, your tax, your CPA, won't tell you about it. TurboTax is never going to tell you about it. It's how you invest in alternatives. So real estate, obviously, is a big one. Gas and oil is a massive one. Aviation, water rights, mineral rights, conservation easements, carbon credits, those are the ones that affect your tax, because you get the depreciation schedules. So it's how you make it, how you use deductions and how you invest collectively makes up your tax. And so those are the kind of questions key some category of that, like I told you before the show, I have a new guy that just joined by over $20 million of real estate and only a few LLCs, no S corp, no C Corp, no trust. I'm like, and then you have these ridiculous insurance agents who say insurance will cover it all. You don't need to have an LLC or an S corp RC. You do? You do too. I would never live on just insurance that is such as 1960s conversation, like you guys got to grow up?   Keith Weinhold  38:17   Yeah? Well, you know, totally. And you mentioned Rich Dad, and it's really the Cash Flow Quadrant. And one thing that the Cash Flow Quadrant helps delineate is you touched on it your tax treatment. Tom wheelwright is the most frequent guest that we have ever had here on the show, being the tax guy coming from the rich dad school. And Tom wheelwright was really the first one to inform us that something like 98 to 99% of the tax code is actually a road map for where the deductions are. Only one or 2% of maybe are the tax tables and what you must pay almost all the rest of it, is this roadmap to give you a guaranteed ROI if you follow it, something that you don't usually get in investing. And you brought up a few interesting tax strategies there. I think one of them is how you employ your kids and get deductions that way, while your kids learn. Tell us more about that.   Loral Langemeier  39:11   I mean, when Logan was two, I put him out. He was painting buildings. He was around all sorts of, you know, title companies and closing tables. And then my daughter's same thing. So I take them with me. There's again, part of parenting is they have to be involved in your life. And I think so many parents just leave their kids home. They leave them with the device or their phone or some iPad. None of us have it like if they're gonna sit at a time, you know, a closing table, then I want them if they may not know everything at that moment, but that experience in that environment of just being a natural environment for them to know, to do business deals. It changes them. Changes your kids drastically. And then fast forward, when my kids are 18, they get an LLC for their birthday, and they're added on shareholders in a bigger way, because then I use again the roadmap. Because, you know, well, I always. Laugh, I say, but people read fiction novels and junk whatever. I'm reading the tax code. I think the tax code is the most creative, freeing body of work that has ever been done. It's fascinating. It's so creative. My son's becoming a CPA because of it. So when my son went to school, he was on a football scholarship. He played for Georgia, Southern starting center five years because I'm a single mom and I only make $42,000 I don't even own a phone. I don't own a car. I don't own a home, actually, because it's held in LLC It's an estate property   Keith Weinhold  40:32   I put or on paper or on papers.    Loral Langemeier  40:34   No companies own it all and trust on it all. So I own nothing like I literally live Rockefeller style, and I teach people that this really was beyond the millionaire maker stuff. But my point with the kids is then when he goes to school. So instead of going every Friday to watch him play football, on a Saturday, I went on a business trip to see my son, and he and I actually are looking again. That's in states pro Georgia, where Georgia's other is buying some apartments that we can then back into, and then then we go to the athletic department, and we know how much they will guarantee rent paying scholarship men to live in our apartment, like there are so many cool ways, and that that's how my son will get involved. So during all of my trips to watch him, Yes, I took one hour to watch him play football. Otherwise, I went to see my business partner. So my point is, and when he came home, he had to come home, not to just come home, but he came home to see his business partner happened to be his mom. So there's a way to put your kids into these businesses early and put them through school, have school that can't be written off. And even though he's done a scholarship, all that travel was still not a deduction, unless we structured it as a deduction to the real estate company. There's so many strategies that I honestly, Keith, I made a lot of these up. And I went to, you know, my top tax team, and I said, why can't we do this? I said, I want this to be done. Tell me the legal way to do it, and then they would guide me. So then I just turn around and I teach other people that when you do your own taxes, number one, you're not educated enough to do your own taxes, so why people do Turbo Tax or even H R Block? I mean, that's where kindergarteners play. And if you want to be a millionaire, you have to get experts around the table that really know what they're doing. I mean, a proper tax strategist at the level we have, and I have, like, 28 people on my financial teams that integrate. I mean, they have masters of accounting. So they've gone to school five and six years. They've sat for four exams and had 2000 hours of audit. So whenever, like an engineer or somebody, even a real estate investors, try and do their own taxes, I'm like, it's a highly, highly skilled expertise. So anyway, I could go into the team approach. I don't think Keith, I know so many people are so close to getting it really all right, but their sequence is completely out of order, and they're just at call tax and invisible paying. You're just used to it. You're just used to paying it because you think you have to. And you've been scared by the media that it's this big, scary thing, and the IRS is going to come get you. It's like, no, they're not. This is legal to do all this stuff. You just have to do it right and document it right   Keith Weinhold  42:57   right. And that's part of your team, your tax team, and that's another good ROI. If you pay a tax preparer and strategist 5k which is more than most people, maybe they're making you 10x that or more with their knowledge of the tax code. And for you, the listener that might find the tax code to be dry reading, you know, for a lot of people, you're probably right that it is dry reading. But if you think of it this way, if I act on what I read, then I am getting paid for what I'm reading here in the IRS tax code. Well, Laurel, do you have any just last thoughts, overall, whether that's about wealth, mindset or real estate or anything else, as we're winding down here   Loral Langemeier  43:35   any question ever you just go to ask Laurel, A, S, K, L, O, R, E, L, ask questions. Make a request you can ask about I have online events. You can ask for free tickets. You can ask her ebooks. So ask her whatever you want. We're super generous on giving gifts away to especially our new listeners and new folks. But a lot of it's, I'm going to say it's active engagement. That's a term I've used as I walked into 25 and I look at the people I've made over 10,000 millionaires, probably 12, 14,000 by now. But the difference between those who make it and those who still struggle is active engagement. I'm showing this on your screen just to have it on video, but I got this magic wand because people say I have a magic wand. I said, I do. I naturally now officially have one, and it comes with pixie dust. But it doesn't really matter. It won't work. I can't just, you know, anoint you with my little wand, and all of a sudden it's magically going to change. You have to actively, like you said, study the IRS code, study my books like my millionaire maker is a blueprint for how to be a millionaire. So there's seven families in the book. Pick which one you're closest to and what you've done to yourself, and then start the pattern, and there's a pattern and a sequence for everybody, for seven different kinds of family, and what you've done to yourself. And I also live the last kind of words I would say to people is that I've been doing this way too long. I have no judgment, no criticism about what you did to yourself. A lot of people are ashamed or embarrassed, like I can't believe I'm this old and I should be farther along. So what now? What is my. Saying, so what happened or how you got here? What do you want to do about it now? So we start with a new, fresh line and stand and let's go and you can create anything you want with the right team around you and the right initiative. So just know you'll be actively engaged in this. This isn't me, doing it for you or to you. It's with you, and you have to own it. You have to own your own wealth. Nobody else cares about it more than you.   Keith Weinhold  45:23   these strategies work as long as you do. Laurel, it's been a great mindspring of ideas for the listener here. Thanks so much for coming onto the show.   Loral Langemeier  45:32   Thank you. Appreciate it. Look forward to hearing from many of you and helping you out.   Keith Weinhold  45:35   Oh, yeah, a wide range of expertise from Laurel Langemeier there. And you know, we're talking about the awareness of the gap between who you are and who you want to be earlier. Really, there could be a gap between how you're utilizing your rental property currently and what it could be Laurel found more ways, for example, to serve her short term rental tenants in the Arkansas Ozarks with providing boats and jet skis dockside to her tenants. In fact, there's a book all about this called the gap and the gain. It was published about five years ago, and let me tell you what it's about and maybe save you 10s of hours of reading most people, especially highly ambitious people, are unhappy because of how they measure their progress. We all have an ideal. You have an ideal. I have an ideal. It's a moving target that is always just out of reach. Well, when you measure yourself against that ideal, you're in the gap. However, when you measure yourself against your previous self, you're in the gain measuring your current self versus your former self, that can have enormous psychological benefits. That's how you can feel like you're making progress, and that gives you confidence, and you make more progress. You might have only owned two rental properties last year, and you're going to have four this year. So you want to make that comparison, don't make the comparison that Ken McElroy has 10,000 units and you never will big thanks to the driven and experienced Laurel Langemeier, today, I feel like she has a narrow gap between who she is and who she could be.    There is a lot happening here at GRE in our newsletter called The Don't quit your Daydream letter. I recently let you know about what chat gpts ai updates mean for real estate investors, and I showed you that before and after photo of how you can now tell AI to just renovate your rental unit, and within just a minute, it shows a pre and post renovation, it shows what the renovation would look like. AI is also being used for fraud, like to generate fake receipts or insurance fraud that makes a property look damaged when it really isn't. And every few weeks, I like to send you a good real estate map, like the recent one that I sent you, showing the cost of living by county and how that map was almost like a cheat code on how you can find the best real estate.    Also here at GRE our free coaching is helping connect you with properties. Many of you are interested in BRRRR strategy properties lately, I recently reshot the entire real estate pays five ways course, and I updated it for today's times with today's numbers. I'm giving that away for free, those videos and even giving a free gift at the end of the course, I share those resources with you in the Don't quit your Daydream letter as well.    And then, of course, I sent you details on the Great Investor Summit at sea cruise starting in Miami, sailing the Caribbean June 20 to 29th and how you can have dinner with me and the other faculty, like Robert Kiyosaki, Robert Helms, Peter Schiff, Ken McElroy and more. And this particular cruise event is not cheap to attend, although I don't make any money from the event, but our Don't Quit Your Daydream letter is totally free. I would love to have you as a reader, and you'll stay informed on all these Real Estate Investing Insights and trends and events and more, otherwise, you're really missing out. See, the reason that I write the letter is that I have visual things to show you that I cannot do on an audio medium here, like this, like those real estate maps. And before and after photos. I write the letter myself. You know so many other letters are now AI generated. I write this myself. It is all from me to you. And if you aren't already a reader, you can get the Don't quit your Daydream. Letter free right now, just text text GRE to 66866, and by the way, we don't text you the letter each week. That would be intrusive. The letter is emailed. It's just a convenient way for you to opt in. You can do that while it's on your mind again. Text GRE to 66866, and I'll turn it alternative way to get the letter is to visit get rich education.com/letter that's get rich education.com/letter. I've got a lot more for you next week. Until then, I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 1  51:01   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  51:25   You know, whenever you want the best written real estate and finance info, oh, geez, today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to 66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866.   The preceding program was brought to you by your home for wealth, building, getricheducation.com    
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  • 548: A 7-Figure Income is the New 6-Figures, Car Loans, Pros and Cons of Turnkey Real Estate
    Keith discusses the shift from a six-figure to a seven-figure income being necessary for a comfortable lifestyle and argues that a $5 million net worth is a minimum for financial security. He explains the benefits of leveraging a car loan for arbitrage, using a 3.99% interest rate to invest in real estate with a 20-25% total return. He also discusses the current state of the real estate market, noting that home prices and rents are expected to increase by 3-5% annually. Lower mortgage rates could increase affordability and bring more buyers into the market, potentially leading to higher home prices. Two-bedroom rents have increased by 3.7% nationwide, with significant growth in Nebraska metros. Resources: Get our wealth-building newsletter free— text ‘GRE’ to 66866 Show Notes: GetRichEducation.com/548 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: [email protected] Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold today, why earning a seven figure income is the new six figures? Then a discussion on the direction of real estate prices and rents. I just bought a car though I could have paid all cash. Why did I get a loan instead? Then learn about how to perform due diligence on buying an income property with the pros and cons of turnkey real estate investing and the mistakes you must avoid today. On getricheducation.   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:20   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:36   Welcome to GRE from the first State of Delaware to the 50th state of Hawaii and across 400 nations worldwide. I'm Keith weinholden. This is get rich education, the voice of real estate investing Since 2014 Are we really gonna change the name away from the Gulf of Mexico? Well, I'll tell you one thing. There is zero history of hurricanes in the Gulf of America, therefore, I expect the appropriate adjustment to my insurance premiums big savings. Hey, you know, despite being a geography guy, I'm really not emotionally invested in this movement to change the names of giant pieces of real estate like Denali back to Mount McKinley and the Gulf of Mexico to the Gulf of America. It's only a little interesting to me. I mean, there are just more significant things to concern oneself with. So call it either one. I don't care. I know what you're talking about. Before we talk real estate, let's discuss your personal finances. I recently watched Dr Steven Franson speak surfacing this topic, and it got me thinking, when it comes to annual income, is you earning seven figures like the new six figures. Now, I guess that earning six figures could still be a short term goal to some people that are new to the working world, but maybe as little as a decade ago, having a six figure income was aspirational, or even a sign that you made it, or could even feel wealthy. I remember that today that is so far gone. Now, of course, it depends on where you live, but today, you need 50k just to survive. Your housing would be pretty standard in that case, and I don't know that you could get much fresh, healthy food at 50k per year, you might still have to be living with your parents. You need 100k just to sort of live. Perhaps that's if you're single and you're near the coasts, or you're married without children today, you need 200k for a life with travel and some dining out. I mean, you couldn't really even ball out on your vacations, like on 200k you're gonna balk at 500 bucks a night for a resort hotel. I mean, you're staying at more of a hotel than a resort, but at 200k of income, you can usually do some discretionary spending. At 300k in a lot of places, that's what a full family needs, a household with kids in order to live a little bit beyond that, and that's a combined income both spouses. If you make 450k today, now you're able to travel pretty well. You're probably still flying coach more than first class at 450k you may or may not be paying for the airline lounge, but you are staying at some comfy hotels. You really need to make $1 million a year today to live pretty close to all out fly first class travel well. But you're still flying commercial on a million dollar salary. You're not chartering anything. If that has not bought you time to cook, you can afford an executive chef with a million dollars so that you don't have to eat restaurant food. You know, restaurant food, even at finer restaurants, is laced with seed oils. This is why what used to be a six figure lifestyle is now a seven figure lifestyle. My spin here on this also is whatever you do at any income level, 50k a year to a million bucks a year or more, buy enough time to exercise that's something that's going to matter both to you and to those that you love over the long term. All right, so that's income. How about when it comes to net worth? There is a minimum amount in my mind that you need to have in net worth for me to say that you've got it made in America today. What do you think that number is? How about that? What do you think is the threshold? What's your thought? It is $5 million that is just a starting point, a minimum net worth that you need, if you just invested that you could probably live off its income for the rest of your life. For most people, compound interest will not get you to the $5 million net worth Mark anytime soon. Only leverage will. But yeah, after the COVID induced wave of inflation years ago, you've gotta recalibrate what you think of as a lot of money, and some people haven't caught up with this still. Now, I was on that great riverboat tour of Chicago not long ago. I think I brought this up to you in a previous episode, but you know, one thing that struck me as odd was that the tour guide, he was describing Chicago skyscrapers and the architecture around us, and he said they poured millions into that project. I mean, really emphasizing that millions were spent. I mean, today millions can mean as little as 2 million. That's an amount so tiny today for a construction project that what is that like, four average homes would be $2 million I mean, some entire counties in the Bay Area have a median home price of more than $2 million just one mediocre home. So let's talk about the direction of home prices and rents nationally here. Now I do not think that home prices or rents can really climb a whole lot over the next year, like 10% appreciation. I don't see it now. I also don't see how home prices and rents could fall substantially. The reason that prices cannot spike dramatically, it's still due to an affordability constraint, and I don't expect that prices or rents are going to fall a good bit either, or really fall significantly at all, because housing demand still exceeds supply. So that's the constraint on the downside. Really, nothing has changed there. The average for sale home today, it gets between two and a half and five offers that obviously depends on the area, so you keep seeing both prices and rents increase at this range of three to 5% that's the zone that we're in now, and we've been in that zone for most of the last Two years. Really pretty modest, not exciting, appreciation rates. Zumper tells us that two bedroom rents are up 3.7%   nationwide. Rents have actually declined in some Sunbelt cities, Durham, North Carolina and Nashville are some big losers I was describing Austin to you a few weeks ago. Do you know that two national leaders in rent growth are both in the same state. Yes, these two cities are both up more than 20% in rents year over year. It's in the Midwest. Any idea where I'm talking about it is Lincoln and Omaha, Nebraska both up over 20% and perhaps recent GRE listener guest grant Frankie is happy about that. He's the only person I know that invests predominantly in Lincoln, and this is due to strong job growth and also that supply that still hasn't kept up with demand. Now back to my point about how nationally, both rent growth and price growth are still pretty modest, which is still a highly profitable formula for a leveraged investor that bought right But historically, it is kind of boring. Many believe that as soon as mortgage rates fall sharply, and a lot of surveys show this, if. That five and a half percent is the magic mortgage rate level that will increase affordability so much that home prices will soar. I'll tell you my spin on that is maybe even that remains to be seen from listening to me for 10 and a half years now, you know that the direction of the economy has a substantial effect on housing, rents and prices, a force bigger than just mortgage rates. And when mortgage rates fall and other interest rate types fall, that usually means that the economy needs the help, which might mean that employment is down. If employment falls, home prices can still rise. They usually do, but perhaps not as much as you thought they would. So my point is, is that when mortgage rates fall significantly, that does not automatically translate into soaring price growth. Again. You gotta take history over hunches. If there's one thing that feels a little different in this cycle though, it's that we do have this palpable amount of pent up housing demand, so lower rates really could bring a lot more buyers off the sidelines. So therefore, it is possible that home prices will soar if rates really plummet. It is just not axiomatic. Now I just bought a new car, though I could have paid all cash. I chose to get the loan. And before I tell you about why I considered not getting a car at all and just using Uber Lyft ride sharing services forever. But sometimes I like to go off the beaten path and trek in some remote places. So that just wouldn't work. I also travel a good bit, and I considered not owning any car that's tethered to just one place. It's just not that efficient. But it came down to freedom. I enjoy my freedom and autonomy to hop in my own car and drive it on a whim. Though I could have paid all cash for this new car purchase, I chose to put the minimum amount down, and I got a loan for about 95% of the cost of the car. Why would I do that? Car debt is surely not as good as real estate debt. With car debt, I have to repay my own loan. I cannot outsource these car debt payments to tenants, and the payment is about $900 a month. I'll have to pay all of that myself. Also, unlike real estate, a car is a depreciating asset. Unlike mortgage interest, car loan interest is typically not tax deductible either. I'm not going to rent this car out through Toro and try to get an income stream off the car. Nothing like that. So this might sound like three strikes against a car loan. I've got to make the payment myself. It's declining in value, especially as a new car. It starts depreciating fast as soon as I drive it off the lot, and I'm not going to have any tax breaks. Oh, come on. I mean, that might sound like bad debt to a lot of people. Leading GRE I am a staunch advocate for good debt. So why did I embrace a car loan to the maximum leveraged amount? Because I am making my car loan good debt. The definition of good debt is debt that makes money for you. Car loan debt is secured, meaning there is underlying collateral, the car itself. And by the way, credit card debt is an example of unsecured debt. The big reason, though, is the financing through the dealership BMW is a 3.99% interest rate for five years, my credit's perfect. So I got a good rate there. Therefore this car loan is a simple arbitrage play. I'm borrowing at a lower rate to invest at a higher rate. Look, even if my car loan rate were double 8% I would probably still get this car loan, but it's 3.99How do I have confidence that I'm going to beat that on an annualized basis over the next five years? Well, first future inflation expectations are elevated, like I touched on on last week's show, if true, inflation the real diminished purchasing power of your dollar over the next five years is 4% I mean, that's a break even for me, right there already, but I'm gonna do a lot better than that. As a real estate investor, I know that instead of sinking this money into the car, that's enough of a down payment for a rental single family. Home or almost a low cost duplex, and being cognizant that real estate pays five ways, I expect a minimum of a 20 to 25% total rate of return with low risk. Now, if you're a new listener, that last part sounded far fetched. I know that's okay. You just don't know how to calculate your ROI for an income property with a loan. Yet another way to describe my strategy here is though I could pay cash, why would I tie up that many funds in a car? So I'm cognizant of opportunity cost. Opportunity cost means that you're missing out on a greater benefit when you choose one option over another. This loan approach also keeps me more liquid. Look, keep your money. Don't give it to a bank. Make your bank take five years to get all the money, while my $900 monthly payment stays fixed the whole time as inflation just keeps relentlessly debasing the bank's payment that they get from me. I mean, with that part, it works the same way as it does in real estate or any fixed rate loan that you could get. Be mindful, by paying all cash, you would not improve your net worth at all. Nothing happens to your net worth. Paying all cash reduces both your asset column and your debt column by the same amount, and it hurts your liquidity. Now, if you've got an emergency, you could be in a case where all of your funds would be gone if you paid all cash, they're inside the car, and you might not be able to extract them back out. All right. Well, what about the depreciating asset part of this equation? That's what most cars are. Well, just like a piece of real estate, your car's value will rise or fall regardless of your equity position. That doesn't influence it at all. So I will be underwater on the car. That's a way that some people might look at it. That means that I'm going to owe more on the balance than the car is worth. That appears irresponsible to some people. Well, yeah, that just means that the bank's money is tied up in the car, not mine. I've got it off giving me a good return. Look, when you have loans, you have another type of leverage, and it's not the mathematical type that I often discuss here. I mean, have you ever owed a friend money when something untoward happens? Who is motivated to talk between the two of you? You are your friend, your friend. They're going to be the one that's willing to work with you and help you out. They've got to give you levers when there's a mal apropos occurrence and the borrower loses their job or has a medical disaster and a huge bill, the person that's owed the money is always going to keep communication lines open with you, you as the borrower, are the one that is in control. Keep your debt on, keep your own money, stay in control. And how is this car loan making money for me, if I get a, say, 23% total return from income property and keep paying a 4% car loan, that is 19% arbitrage, I mean, what an easy choice. Again, the definition of good debt is debt that is used to increase your wealth. So getting the Max car loan allows me to avoid paying that opportunity cost of having all the funds tied up in a depreciating asset. And that is how a real estate investor buys a car. Now you're a smart investor. I mean, we have a really wise, responsible audience comprised of people just like you. But what would be some reasons that a real estate investor should pay all cash? Because there are some, and a lot of them revolve around, if you're financially irresponsible, if instead you got a car loan so you could stay liquid and maintain your life as a profligate and reprobate gambling degenerate and lose it all on sports gambling through the freaking Draft Kings and FanDuel apps. Okay, that's not a good reason. But as a GRE listener, that probably is not you. I was probably not talking about you, right. There another reason to pay all cash rather than getting the loan like I have, is if you don't have the liquidity to service the 900 Dollar monthly debt payment yourself, you could be over leveraged. See the chunk that I'm investing in real estate instead of the car that real estate will produce income for me, but it actually will not produce as much as $900 in cash flow to fully offset the car payment. Now it's going to produce a few $100 but my arbitrage is being created with the summation of all of real estate's five profit centers. I've got the whole shebang now, the leverage appreciation, the cash flow, the ROA, the tax benefits and the inflation profiting all coming at you. All five. My liquidity comes from elsewhere. A third reason why a real estate investor would want to pay all cash for a car is because say that you would effectively be forced to pay all cash for the car. Because if you took on a $900 monthly payment, that would dent your mortgage loan qualifications, debt to income ratio that mortgage loan underwriters are going to look at it would hike up your DTI so much that you couldn't qualify for future income property loans. So right, there are, what was that? Three reasons that a real estate investor would want to pay all cash if they could. But let's not lose the bigger point I was talking about the exceptions there. The bigger point is that consider getting the maximum loan for your next car, or even getting a loan against your current car if you already have one without any debt on it. It's actually a rational approach, because you want to consider the loan first, since this is your money, you earned it, approach it with the strategy first of keeping your own money that you traded away your finite life's time for. Think of keeping it first and only then consider giving it away next. I am getting the biggest car loan that I can and making the minimum monthly payments all 60 months five years, I did the same thing with my last car. It is an easy choice for me in just one word, it is for the arbitrage one word, most experienced financiers and real estate investors have not been exposed to those ideas that I just shared with you, and at the least, I am confident that I just gave you something to chew on mentally. There I've been talking about the intersection of your personal finances and real estate investing. Today, I'm your host, Keith Weinhold here on episode 548 of the get rich education podcast    what have GRE listeners been doing these past few weeks, they have been scooping up BRRRR properties, employing the buy, renovate, rent, refinance and repeat strategy fueled by GRE 's recent live event. You can watch the video of the event on demand right now, get an understanding of the strategy, see why it's so lucrative, and if it interests you, even get you paired up with actual property addresses conducive to the strategy. You can do that at GRE webinars.com this event can indelibly elevate your entire socio economic class and shape your legacy. That is a deep statement. Hey, this is what 8x leverage and $500 plus of cash flow on each single family rental property can do for you with the burr strategy in Cleveland. I mean, how much earlier will this allow you to retire? The event is free to watch. You can watch from home. I mean, come on, what else are you going to do at home tonight? Spend that time cleaning out your closet or smoking meats. Maybe at least, spend that time getting a car loan. What's the opportunity cost of you smoking meats tonight when you can actionably Build a real estate legacy with the BRRRRstrategy? Strategically outsource the meat smoking to somebody else. That's what I do. It does not take much to get started. These pre renovated homes are often about 60k some GRE followers have already bought two or three at a time. You'll see Jerry's investment coach Naresh and event co host Phil. I mean, just watching him talk is amazing. Phil is America's preeminent authority on burr real estate investing. Again, you can watch the event right now, and I don't know how long we'll keep it up for, just visit GRE webinars.com    Next fatal mistakes that you've got to avoid when buying income property with some vital due diligence tips. I'm Keith Weinhold. You're listening to get rich and. Vacation.    You know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it. If I wasn't invested myself, you can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom, family investments, liquidity fund, again. Text family to 66866    Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Chaeli Ridge personally. Start Now while it's on your mind at Ridge lending group.com that's Ridge lending group.com   Robert Kiyosaki  26:49   this is Rich Dad, Poor Dad. Author Robert Kiyosaki, listen to get rich education with Keith Weinhold. And the reason I respect Keith, He's a very strong, smart, bright young man.   Keith Weinhold  27:10   Welcome back to get rich Education. I'm your host. Keith Weinhold, it's been a while, but I know that I shared with you before that my first ever out of state rental property that I bought ended up being a loser, and this is despite the fact that the turnkey provider and property manager that I was hiring for the property, they even told me not to buy the property because they couldn't keep it occupied in that neighborhood, and they told me to buy a different one instead. I didn't listen. I bought it anyway, and I lost we couldn't keep it occupied, so after a few years, I sold it to an owner, occupant, family for a small profit, but it was after years of negative cash flow, so there really wasn't any profit there, because, like I just said, we couldn't keep it occupied with a rent paying tenant that was back in 2012 near Fort Worth Texas. I bought it because it was cheap, just 153k and it looked pretty. It was brick. Those are both bad reasons to buy. Cheap doesn't always mean good. And the fact that a property looks pretty, I mean, I guess that's a somewhat good thing, but it should not be a deciding factor. I was never going to live there facts Trump feelings in investing. So my first bad experience was totally avoidable. I can only blame myself. Let me tell you about some other fatal mistakes to avoid, as we talk about some turnkey real estate investing due diligence. Since turnkey means all done for you, or another way to describe the property is a rent ready property. You know that word turnkey? It's sort of this compelling, even seductive buzzword, and it just might make you think that, ah, everything is just handled now and forever. It's gonna sail along just fine. No, it won't. Now, this is the type of investing that can change your life. This is the real estate pays five ways. Compound leverage Trumps compound interest, type of vehicle. Financially free beats that free type of vehicle. You're winning the inflation Triple Crown all those great, formulaic GRE mantras, but you better check to make sure before you get too far into it. And that's why we're talking about vital due diligence here. I think you know by now that turnkey, it means a property that's really just got three things. It's already renovated or new. Secondly, has a tenant in it, and it has professional property management from day one. Now, the property providers at GRE marketplace, they are some of the good ones. They have good reputations. Many have been in business for a long time, but some others do not. So what about a provider? Provider that's in, say, Oklahoma, but you live out of the area on one of the coasts, and this Oklahoma provider, they're trying to pass off a property in Oklahoma City or Tulsa to you, it's actually in a class D neighborhood the worst. And they're sort of presenting it like it's a Class B minus neighborhood, right? How can you hedge against that? How can you know that things are not being misrepresented to you? Well, of course, everyone knows about Google Street View. You're probably going to look at that first that's going to tell you about the street scene. It's free to use a paid service that gives you neighborhood analytics. Is it neighborhoodscout.com you want to verify crime rates in areas, income levels, poverty levels, education levels and school quality to make sure that the property characteristics are what you are being told, and some of those attributes always matter with property. I mean, crime rates matter because even though you're not living there so you're not going to be able to retain respectable rent paying tenants that would tolerate a high crime neighborhood. Understand, though, that not all crime data is the same. Violent crime is probably the worst shoplifting, I'll call that in the middle. And then most traffic violations, they're light crimes. Now, if you're buying a single family rental type, of course, the quality of the school district, well, that's going to matter more than if you're buying a building of little efficiency apartments where the school district hardly matters there, because you're not catering to families. I've mentioned before that we go look.com. Is a service where you can hire an independent inspector, not even a real estate related person, necessarily, but just an independent on the ground inspector to just go check out a neighborhood at any hour of the day or night. Now, if you have any question about the out of state neighborhood that you're buying in an easy way to get a check on the decency of the neighborhood is something really simple. Make sure the turnkey provider owns properties in the area that they're selling to you. This helps ensure that they're not offloading their problem properties onto you. That's something that's probably only going to happen with an inexperienced provider that doesn't have a reputation to protect yet. But when it comes to neighborhood quality, once I'm pretty serious about buying a property, do you know who I usually get reliable information from? And it's virtually free, and you're contacting this party anyway, so it's so easy for you that is just simply ask your property inspector. I mean, you always want that independent, certified Property inspector to walk inside every room of your prospective purchase, and they make that punch list for your seller before you close that's on either a renovated or a new build property always get that inspection. I've talked about that before, and that often costs $500 or less on a single family home, and today it's about $800 or less on a duplex, well before my inspector even checks out the place. I like to let them know that I live outside the area, and I want their insight on the neighborhood as well. I mean, inspectors live locally there, so they'll probably be able to give you a good answer before they even do your physical inspection. They already know the area really well, and it doesn't even cost you any more above your normal inspection cost to just get a little on the ground intelligence. And of course, your inspector works for a company independent of your property provider, so their information should be unbiased. They work for you. Now after the inspection, how about your appraisal and some due diligence with that, what if your appraisal comes in low. Everyone wants to talk about if your appraisal comes in high, that's instant equity that you have, but see if the appraisal comes in low with a turnkey property where everything was renovated, that may or may not be a problem, because the comparables that were used for your valuation, they don't have everything renovated in them like your property does. So the subject property, the one that you've got under contract to buy that could very well have a lot of say, new plumbing, electrical, HVAC, the roof, bathrooms, paint, flooring, lighting, kitchens. I mean, most, or all of those components could be new in yours. It's common for yours to have all those components, and then the comparables do not have those now, you and your seller, you will have to negotiate on who's going to close the appraisal gap. I've discussed that part on a previous episode, but I'm point. Out how you can still be getting value even when your appraisal is low and it's worth it. Down the road, you're going to have less maintenance headache than your appraisal comparables will most of the time. Turnkey properties are renovated to cover major systems, and that means you do not have major expenses. Soon these expenses get wrapped into your mortgage payment, and that's a lot better for you than coming out of pocket three years later to replace an entire roof. Another thing to keep in mind is that a property provider that's been in business for a lot of years, they do not have interest in selling you a lemon of a property and hurting their reputation, but that seller does have a little interest in getting the maximum dollar. I mean, that's almost intrinsically natural in human beings. I mean, everyone has that motivation, just like you do when you sell your property down the road. So these rent ready or turnkey properties, they're almost always better if you're a busy professional or you just want to spend your time doing something else. I mean, I think that's a pretty well established concept in the investing industry, but I really think these rent ready properties, they are better for even more people than just busy professionals. I mean, consider the alternative, if you try to screen and identify a property yourself and do all the rehab and manage the contractors. I mean, first of all, you can be dealing with a hard money loan where you're paying four or five points plus a 12% interest rate, since that's all that's available for distressed properties, and unless you have experience managing contractors, oh, boy, you could have construction timelines that go over by several months. Well, now that can eat a huge portion of your investment that you thought you were making. You're paying 12% and you have no tenant all this time, but instead, when you buy a rent ready property, and you've got the best mortgage rates and terms from day one, and you've got a rent paying tenant from day one, and not all these headaches and time lost and contractors are trying to manage with turnkeys at GRE marketplace, those rehabs are done by crews that work full time for the turnkey provider, so they work at more affordable rates than what you could get as an out of state buyer if you're trying to patch together contract and crews yourself. So at scale GRE marketplace providers, they're also dealing with the same material types over and over again, so they're faster at doing it. The materials are also reliably sourced. You won't have the 10s or hundreds of hours managing all this, checking with the rehabbers, checking for quality control, making sure the amount of work that you were paying for was actually done. I mean, some people listen to this show and they had that real estate pays five ways, epiphany, that big light bulb moment, but then they try to do this rehabbing and investing themselves to save a few dollars, is what they thought, and it's rarely worth it. So avoid the massive time commitments with all this. I mean, you're also going to be doing other things, coordinating inspections and permits with city municipalities. I mean, what a nightmare. GRE marketplace providers, they've already done all of that for you and more now that you've bought the property, all right, what about the potential for poor management? Choosing your property manager is of utmost importance, because that person or firm, they're going to vet your tenants, handle the repairs, collect your rents and take care of any other issues at your rental property. They'll understand the local landlord and tenant law, you're going to be seeing the property infrequently, if you ever see it at all, so keeping an eye on things becomes key. Now, once you own the property and you have the tenant in there, there is always the potential for your property manager to do a poor job, costing you money, making your investment less lucrative, I like to ask my manager if they do regular property inspections, like getting inside the unit every six months. Now, you can read online reviews, like the star reviews, the number of stars for property managers. I mean, that could be helpful. It can also quickly get misleading. You can get a lot of bad reviews on an adequate manager. Because property management is such a tough job, I think that one of the best things you can do when vetting a property manager is to ask a friend. A lot of people don't have that option. So then do a search on the bigger pockets. Forums for your prospective property manager. So read reviews. Don't just look at star ratings. And I'll tell you, property management is one of the few areas in my life where I am willing to accept a service level of adequate or mediocre. Almost no one raves about their property manager, but I do have managers because they are the guardians of my quality of life, of your standard of living. We want them to serve our tenants, but I don't want 80 tenants being able to text message me. So there you go, armed with a number of due diligence items that can help you make sure that you buy your next income property, right? GRE marketplace, we typically connect you with the experience providers, but I'm telling you this because it's prudent to do some checking on your own and inquiring like this too, in case you have any doubt. Now, you notice on GRE marketplace, where you can connect with free investment coaching as well, that the properties, at times, they seem less expensive than you would expect. Why is this? Well, investor advantage markets, they have low prices. I mean, that's just one reason that they are investor advantaged like Ohio, Indiana, parts of Pennsylvania, Michigan, Missouri, Kansas, Nebraska, Tennessee, Arkansas, Georgia, Alabama, Oklahoma, Texas and some of the other Mid Atlantic states And Florida, another reason the GRE market prices seem low is that there is no agent that has to be compensated. It is a direct model. Another reason is economies of scale. Providers provide homes in bulk, so there are savings that way, and there also aren't any owner occupied emotions evolved with income properties. Those emotions can run up the price, or what they really do is they keep it stuck at a high price. So to help you review what you've learned today, a seven figure income is the new six figures. Real estate prices and rents just keep moving up, but modestly for the time being, a car loan can be good debt when you have a reasonable expectation that you can create arbitrage and sufficient liquidity in your life. And though income property is perhaps the most proven wealth generator ever, there are some mistakes to avoid when it comes to buying right between the guidance that you have today and the help of our completely free investment coaching another safety layer. If you're confident that it can benefit you, I encourage you to engage and move at the speed of instruction. It's the only way that you'll benefit I built this resource. I really wish it existed when I started out, and it's available for you at GRE marketplace.com, until next week. I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 1  43:18   Nothing on this show should be considered specific, personal or professional advice, please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  43:42   You know, whenever you want the best written real estate and finance info, Oh, geez. Today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long. My letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866.   The preceding program was brought to you by. Your home for wealth, building, getricheducation.com.    
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  • 547: Is Hyperinflation Ahead? People are Frightened About a Coming Depression
    Keith shares some historical perspective on inflation highlighting the cost of a Taco Bell meal in 1999 to its cost today. He also touches on the concept of service inflation, where services like mail delivery and self-checkout at grocery stores have become less convenient but not cheaper. Keith reviews the historical performance of real estate during the last eight recessions, noting that housing prices usually rise during recessions. He explains the concept of the Inflation Triple Crown: asset price inflation, debt debasement, and cash flow enhancement. Housing prices usually rise during recessions, as demonstrated by historical data. Resources: To learn more about the Inflation Triple Crown go to: getricheducation.com/itc. Show Notes: GetRichEducation.com/547 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: [email protected] Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, is higher inflation or even hyper inflation now in our future, and is an imminent recession, or even worse, a depression lurking. What's it all mean for your investments and your real estate? We'll investigate exactly what happens to real estate during recessions, historically today, on get rich education,   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold rights for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:19   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:35   Welcome to GRE from Hartsdale, New York to Springdale, Utah and across 488 nations worldwide. I'm Keith Weinhold. I think you know that by now, you are inside one of America's longest running and most listened to real estate investing shows. This is get rich education. Most people have two plans. Plan a get rich. If that doesn't work out, the alternative is Plan B, which is hate rich people.   We are firmly rooted in plan a for you here. So yes, we're about building your wealth, but ultimately we are a lifestyle improvement show. I'm going to get to high inflation and the potential for a recession or depression in just a minute. But I recently got a reminder on the fragility of life and its finite nature. My oldest friend recently died. He was almost like a mentor to me, a friend of mine's grandmother recently died, shattering her world, and it's a reminder that you won't be remembered for the money that you make. You won't even be remembered the real estate portfolio that you build. I mean, that surely won't last. The tennis that you serve, they'll die as well. I will be forgotten. This show will be forgotten. The people that love you, their opinions will die with them. Your Haters, their opinions will die with them. You can confirm that this is true right now by naming your eight great grandparents for me, there. Go ahead. You can't do it. I can't either. So what can you do, at least in this finite life that you have on earth? What you can do is enjoy your existence. The good news is, because you can control this, you can control enjoying your life and existence as get rich education is ultimately a lifestyle improvement show, and we are squarely helping you do that right here. And one way that I've done that over the years is by pointing out how inflation is actually advantageous to real estate investors. Well, it impoverishes most people. You're initiated on that by now. That's something that you really found out tangibly back during the pandemic. Now today, though, wow, people are frightened. I've got some contemporaneous material to share with you today, but I'll give you some lessons so that even if you're listening to this 10 years from now, you're going to learn some lessons. Americans inflation expectations for the next five years. They just hit the highest level since 1993 Yeah, expecting a lot of inflation, tariff pressures are a huge concern now. Last week, inside our newsletter, I sent you something that gave you some perspective on inflation. I sent you a photo of a Taco Bell receipt from 1999that might have left your mouth agape if you didn't see it. I'll tell you about it here and expand on this. And yes, it could leave you aghast, stupefied, gobsmacked, or even flabbergasted. In a sense, 1999 was not that long ago. It's sure not like ancient history. I mean, I was alive then, yes, I am here, and I'm from the 1900s. Well, this 1999 Taco Bell receipt that someone found perfectly preserved in the pages of a book. It shows a complete meal that was purchased for $3.50 it was actually just $3.26 and then the rest was tax added in. That's 350 for a chili cheese burrito, a taco nachos and a 16 ounce Pepsi. That's not the price for each item. That is the combined total from 1999 All right, how much do you think those same items would cost today? I don't eat there. I went to the Taco Bell website and found out. I mean, what an inflation measuring stick. This is what cost, 350 A Taco Bell in 1999 costs $11.44 today I use the same sales tax rate to come up with that. So today it's 1144 and today they also ask you a question a Taco Bell, if you want to round up for the kids or something like that, and then just watch, pretty soon, they're gonna request a tip too. That's a 327% price increase, and few people's wages have risen that much since 1999See, I told you that you would be left slack job and flabbergasted. All right, so let's look at where we are today. Now it's not an apples to apples comparison, but you know, Taco Bell is a fast food restaurant. Let's look at the price of a consumer item at a sports stadium today. All right, because both are places that everyday Americans frequent college basketball's March Madness tournaments have been taking place the last few weeks. Well, for the first time ever, the SEC is selling beer at its tournament. The price for one large premium draft beer is $17.50 so before tax or tip, 1750 for one beer all in that might be $20 or more, and I doubt that the beer is really that premium. I mean, you know what kind of beer you get at stadiums. So we look at inflation, one beer today is at least five times the cost of a complete Taco Bell meal in 1999   that's price inflation, and that's the stuff that's highly perceptible. Okay, you've been seeing that effect all of your life. It's making most people poorer. It's making real estate investors wealthier. And then there's the inflation that few people consider the less perceptible stuff, service inflation. And what are some examples of service inflation growing up the postal service delivered mail right to my parents porch, and they still do deliver mail right to my parents porch. Their neighborhood was built more than 100 years ago, but look, when new neighborhoods are built today, like places I've lived and perhaps where you live now, the postal service doesn't deliver your mail right to the individual mailbox on your porch. Today, you've got to walk both ways to your neighborhood's mailbox cluster. Some people even have to drive to get their mail. So your mail is no longer being delivered. Really, you have to go pick it up. Well, they don't lower the price for that reduced service level. That's service inflation. A second example is more obvious, grocery self checkout. You're taking the time and doing the work of scanning your groceries, but yet, they sure aren't lowering the prices of your lettuce and your beef jerky. And look service, inflation is here to stay. That is because companies make investments in it. The Postal Service bought those mailbox clusters, the supermarket bought those self checkout kiosks.    All right, so with this ramp and price inflation and service inflation, along with it, and the other forms of inflation that I've talked about on the show before, like stagflation, tip inflation and Shrink flation and skimpflation. What is an individual investor like you supposed to do? Well, stock and mutual fund investors get killed by inflation. I mean, think about it this way, just killed if the Sp5, 100 gains 10% but there's 5% inflation. That's a 50% hidden tax on your gain, plus you might pay capital gains tax. On top of that, savers really get obliterated. I mean, just destroyed if your bond yield or your savings account pays 4% interest, and there's 5% inflation. That is a 125% hidden tax on your gain, and then you might pay regular tax on top of that. So stocks and mutual funds and savings accounts are not the answer. What is the answer? Real Estate and borrowing the opposite of saving. And let me address now, whenever people get fearful that another wave of inflation is coming, whether that's tariff induced or otherwise, let's not get carried away and think that Hyperinflation is right around the corner, although definitions of hyperinflation vary, the most accepted one by economists is a 50% inflation rate per month, not annually, per month. So that would be over 600% a year, with compounding. I mean, that would be really hard to get, but what we do know is that inflation is still elevated above the Fed's 2% target. It's 2.8% today. And what we do know is that more inflation is coming at what rate nobody knows. These facts almost necessitate that you have either got to start your own business, which is tough, or become a real estate investor which is easier, in order to escape this and acquire some lasting wealth. Any devoted listener here knows that the formula for beating it is luckily, not highly sophisticated, not esoteric, not anything that you need a degree or certification for, just own income properties with loans, and that's when inflation produces three profit centers. As we know that is something that I coined as the inflation triple crown. So if you're new, you're learning something. If you've been around here for a while, here's a little comprehension test for you. What are the three crowns in the inflation Triple Crown, you win with asset price inflation, debt debasement and cash flow enhancement. Asset price inflation benefits you because you have leverage gains debt debasement passively lightens our debt burden for us, and then cash flow enhancement, that boosts our cash flow above the inflation rate, because our principal and interest payment stays fixed. And you can learn more about that totally free. You don't even have to leave your email address or anything. You can watch the three videos of the inflation Triple Crown at get rich education.com/itc. For inflation, Triple Crown, it's just good free learning for you there I've made available at get rich education.com/itc, it is a foundational financial education. Is a recession or even a depression eminent, that's straight ahead. I'm Keith Weinhold. You're listening to get rich education.   You know what's crazy? Your bank is getting rich off of you, the average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom. Family investments. Liquidity fund again. Text family, to 66866   hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties, they help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Chaley Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com   you   Dani-Lynn Robison  15:45   This is freedom. Family investments. Co founder, Danny Lynn Robinson, listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  16:00   Welcome back to get rich Education. I'm your host. Keith Wynne Holland, you are inside episode 547. I'll tell you, being a landlord or real estate investor can really change you now. I was using the stair climber at the gym just before talking to you today, I like to set up a big fan down on the floor to keep me cool before running or climbing. Plug it in, set up a fan. When I'm done, I turn off the fan. It's just a habit. I don't pay the electricity bill at my gym, but it's just the way that I would want to be treated. But you know what? When I find a fan that's already set up before I grab it and start on the treadmill. That fan is always running when no one is using it. No one turns off their fans when they don't have to pay for the electricity. And this reminds me of when I owned apartment buildings in Anchorage, Alaska, and tenants kept their windows open, even during the frigid winter, so that they could get fresh air. Yeah, you can guess who was paying the heating bill. It wasn't the tenant. It was me. The larger the apartment building is, the more likely that the owner is the one that pays for more of the utilities. And of course, in that case, you can look into utility sub metering. That process can be costly, but it might be worth it. It can increase your cash flow and your net operating income, which, when it increases your net operating income, that means that it also increases the apartment buildings value. And you know, in real estate today, you've got to look for where the opportunities are. There are opportunities in every market today. For places where there are specifically good opportunities are apartment buildings where their values have fallen 20 to 30% in some markets, it's wise to invest in beaten down sectors that you just know are going to come back like you know, the demand for apartment buildings is going to be there long term. This doesn't mean that you want to invest in any beaten down sector, like Office real estate in general. I don't see how that's coming back. A second strong real estate opportunity today is to find over built pockets, especially ones that exist in Texas and Florida. I mean, this is why they call them buyers markets. A Texas or Florida seller might make you a deal, and that doesn't mean everywhere in these states. For example, Southwest Florida is one area that's specifically over built, even amidst the national landscape that's under built. A third and a fourth area of specific real estate opportunity today are two that I have mentioned before, but they persist. That is still brand new, properties where many builders are still motivated to buy down your mortgage rate to about 5% even 4.75% in some cases, and new builds have low insurance premiums too. And then a fourth opportunity. That's something that we've covered a good bit here these past few weeks. BRRRR, real estate investing, buy, rehab, rent, refinance and repeat. That's a specifically good strategy if you don't have, say, hundreds of 1000s of dollars in liquidity to invest. Now you might ask, do those four strategies have validity? Do they have cogency in today's market, where there are these fears of an economic slowdown. Oh, yes, they do, or I would not have gone over them, but these palpable recession Fears are growing, and some are even asking, is a new Great Depression eminent? There is tons of bad economic news right now, not just in the US, but the global economy is on the edge, starting earlier this month, stock market tremors have turned into full blown convulsions. Trillions of dollars in wealth have just vaporized, wiped out. Investors are rattled, consumers are anxious. Business owners are confused, and those in power in the administration, they insist that tariffs and policy swings are all just part of a transition period, but a transition to what some have even asked, Is the everything bubble finally about to pop. Is this the brink of a recession or something even deeper, a D pressure? Well, one thing is undeniable, from stocks to crypto asset prices recently made a free fall, and I've got some long term lessons for you today, even if you're listening to this years from now, including what a phenomenon like this historically means for the real estate market, it's about what really happens to property values during an economic recession. Stocks recently had their worst week since 2023 barreling toward an all out bear market crash. A bear market means when 20% of the value has been lost from a recent high. Even Bitcoin, the poster child of speculative excess, has cratered. The carnage has been everywhere. But yet, instead of taking steps to prevent an economic meltdown, the administration in power, whether you like them or not, they have introduced more and more radical policies that could accelerate the crisis. Now, some of the tariffs could help long term, but the short term pain is perceptible, and you've got to be able to survive it. We've got new tariffs on multiple countries, and these are our biggest trading partners, even if these import taxes diminish, this is already strained friendships long term, especially with Canada. These countries keep retaliating with tariffs of their own, Canada, Mexico, China and the EU government spending is being slashed. Mass layoffs of federal employees have been underway for a while now. This is not just an economic experiment. I mean, this is a high stakes gamble with global consequences. So is this a detox period, or is it an economic freefall? Treasury Secretary Scott tebescent described this economic shift as a necessary detox period. That's the phrase that he used, and yes, I need to acknowledge there is no more grandma Yellen running the Treasury for long time, listeners, that is a reference to the long running joke about how my late grandmother resembled former Fed chief and former Treasury Secretary, Janet Yellen, but anyway, according to Besant, the US must break free from what he calls its addiction to government spending in return to private sector growth. Now, hey to me, that sounds good. Actually, that sounds like a good plan for the long term. But here's the problem, that addiction has been the lifeblood of the US economy for decades. And you know, this is something that regular GRE guest macroeconomist Richard Duncan has talked about when he's here. Remember what he's told us for over a decade here on the show, if the US doesn't have 2% real credit growth, credit expansion, well then we go into a recession. Well, what happens when the government cuts spending during soaring consumer prices due to trade wars? What happens when businesses hesitate to invest in the face of extreme uncertainty? Well, the bad news is that tariff whiplash and massive layoffs mean that businesses can't plan, and when businesses can't plan, they freeze. Look, just the other day, I talked to the President of a manufacturing company they make stainless steel tube valves and fittings. Due to all the tariff uncertainty, he's had to set up a reserve account based on what happens next, all right. Well, with that reserve account, that means that that's not money that's going into equipment reinvestment, that's not money that's going into making new hires. What happens when more confidence shatters and markets spiral lower? We may be about to find out. So has the recession, which is a precursor to any depression, already begun? Well, the warning signs are multiplying. Most ominously at last check, the respected Atlanta Fed tracker is now forecasting a more than 2% contraction in US GDP this quarter. That is quite a drawdown and two negative GDP quarters in a row. I mean, that is the definition of what a technical recession is. And here's a quick history piece for you in 1930 to try to quell the effects of the Great Depression, tariffs were passed. Alright. Do you know how badly that turned out back then in 1930 it was called the Smoot Holly Tariff Act. It raised tariffs to try to collect more revenue for the government. It didn't work, and the US sunk deeper into the Great Depression, with rampant unemployment and poverty and social unrest. There was a rise in crime, there were bank failures, even hunger and malnutrition. That's what a depression looks like, right there. Well, back to today. Right now, consumer confidence is collapsing. Retail Sales are plunging. The bond market is signaling distress, and yet those in power appear kind of oblivious to the magnitude of the risk. So what if it's not a transition and it is a start of something far worse? And see, this is just part of what's made investors raise their bets on a recession. Stocks are down like a global trade war has begun. Crypto has fallen like risk appetite has collapsed. Bond prices are rising like inflation is declining, and experts have priced in a 52% chance of a recession in the next 12 months. Okay, 52 that's like flipping a coin and just hoping that it lands on good news. Now in the real estate world, when we talk about direct threats from tariffs, as I've touched on before, the biggest direct threats are tariffs on lumber and on gypsum board. The lumber is used in house framing and trusses. Gypsum board, that just means drywall, the base case for tariffs on Canadian lumber alone, that adds about $10,000 to the cost of a new build typical single family home, which in turn jacks up all existing housing prices and their replacement cost. But let's look beyond that now at market factors. How is real estate adversely affected if the economy slows? Though historically. Let's look at how recessions really affect housing prices, and this is, again, as I like to say, where we take history over hunches. It's easy to have a hunch about what you think is going to happen, but let's look at what has really happened. How do real estate prices perform during recessions. When we look at the last eight recessions, okay? And the most current of those was in 2020, and then when we go back eight recessions ago, that is the 1960s Okay. Well, let me move along in chronological order here, during those eight recessions, starting in the 1960s leading up to today, housing prices, and this includes single family homes up to multifamily apartment buildings, they were just rounding to the nearest whole number here, up 5% there in The late 60s, in that recession, and then up 18% up 14% in the next recession, and then no change, down 1% and then up 6% and then down 13% that was during the 18 month recession, around 2008 and then finally, home prices were up 8% in the latest recession, alright. So in our total of eight recessions since the 1960s home prices only fell significantly one time, and they usually rise that one timethey fell. Let's explore that. That was during the 2008 global financial crisis, which involved more than just the recession. It was a deep recession, that's why it's called the Great Recession, but it also involved more than that. 2008 was special because that was a time of housing oversupply and low homeowner equity positions and a complete mortgage meltdown backed by flimsy liar loans. Well today we are in the opposite of all three of those conditions. We have a housing under supply. Americans have a record 300k plus in protective equity that they are not going to walk away from. And more.   Underwriting is stringent, the opposite of a liar loan. So housing prices usually rise in recessions, and if we're teetering on the brink of a recession, there are a lot of reasons to think that housing prices will go up yet again. And by the way, I felt what was happening back in 2008 I invested through it. I think I let you know before that, that's when I owned two four Plex buildings, 2008 but it didn't feel that bad to me, because my properties were temporarily suppressed in value, and that part didn't feel good, but my rents and rental demand went up because no banks would give loans to borrowers to buy properties, so I wouldn't want to sell when the buildings were paying me a higher than ever monthly income. But let's not lose the greater point what I'm telling you here that housing only fell significantly one time through the last eight recessions. That demonstrates the resilience of the housing market. And by the way, those stats were sourced by the NAR and the NB er National Bureau of Economic Research. All right, so why is this? Why is housing resilient in the face of a recession? There are a few reasons, but a main one is see, even if and when times get tough, people still need a place to live, and they will pay for it, especially now, when they have record equity, people are motivated to make mortgage payments and make rent payments, or else they are going to be homeless. So tough times when consumers they get less likely to pay for their car loan are less likely to pay for student loans, and when they default on credit card payments, that's when this stuff happens, but people will fight like heck to avoid losing their home. I mean, people will pay for food, shelter and safety. And also, when it comes to recessions, let's not forget how many bad just God, awful, wrong recession calls there were from over the past two to three years. I mean, the so called experts were wrong, wrong, wrong. Today, the economy is actually starting from a good place. And what do I mean here today, consumers still have money to spend, and they probably will. This is huge, because consumer spending is 70% of the economy, but how will they respond when these higher tariff induced prices hit more shelves at Walmart and Target? We'll see unemployment is still so low that it's practically down there doing squats. But you know these numbers, they're always backward looking, so it does only aim to get worse. The labor market is firm. Interest rates have been pretty steady. They've fallen a little. Energy prices are still down. So really, the bottom line with what I've shown you so far is that federal policies have induced economic trauma, and it does increase the chance of recession over the next 12 months. During recessions, housing is a top performer, and interest rates usually fall as well, and specifically interest rates of all types, including the Fed funds rate, mortgage rates, pretty much every interest rate type, they tend to fall in the mid and late stages of a recession. So this is what you can expect based on history, not hunches. But as for a depression, that is super unlikely. We haven't had one in 90 years, and today. I mean, come on, we have seen what the powers that be do. We can see how they respond to crises. They will just print and print and print more dollars to help pave over any problem. And that's not responsible long term, and it creates more inflation, but that's exactly what the government did to pull us out of the Great Recession and to pull us out of the COVID slowdown. We'll review what you've learned today in just a minute, but let me tell you, though you may very well have the majority of your capital smartly invested in real estate, since that's where the long term wealth creation is, those funds are not very liquid. So what about your liquid funds? Like I pointed out early in the show today, amidst higher inflation expectations, inflation really destroys those in the stock market, and it absolutely crushes savers. Savers really get destroyed, because if your bond yield or your savings account pays you 4% interest, and there's 5% inflation, that is a 125% hidden tax on your gain. And if that's the. Damaging enough there might be tax that you have to pay on that gain, which is not really a gain. This whole thing was a big loss.   So for some people, including me, what I do is become a lend. Lord, yes, I get a higher yield by lending to others a lend. Lord. I mean, why settle for just a, say, four and a half percent yield on your liquid funds? I mean, that's the level at both the 10 year bond and the savings account yield today, about four and a half percent. I've parked my own liquid funds for a steady 8% yield that I've been getting for years with a long time established real estate company. I make the loan to them, they have paid on time, every time, for that steady 8% return. And see, when you understand that directly investing in real estate pays five ways, and that a 20 to 30% total ROI, therefore is common and even expected. You can understand how they can pay you and me an 8% return on your liquid funds. You can see where the arbitrage is. Just a little insider tip here. It's called Freedom family investments. If you want to learn more, text family to 66 866. Their minimums are pretty low to 25k and you don't have to be accredited. So for steady 8% returns from the same place in the same vehicle where I've been getting my 8% you can just do it right now. What's on your mind? Text the word family to 66866.    Let's review what you've learned today, Americans have higher long term inflation expectations than they've had since 1993 a 1999 Taco Bell receipt really brings to light how much inflation you have experienced in your life. Though, higher inflation can come. Hyper inflation is unlikely. Let's not get carried away. The prospects for a recession are 52% in the next 12 months, per a plurality of experts, but a depression is really unlikely. Now you know how real estate performs in recessions and why it holds up so well it even tends to appreciate coming up here on the show are some prominent guests, including the leader of rezzy club. You might know about them. Sometimes I share their great charts in our newsletter. Yes, rezzy Club's Lance Lambert will be with us. Also, Legacy finance expert Laurel Langemeier will be here with us on another upcoming episode. Thanks for being here, but you weren't here for me. You were here for you. I'm Keith Weinhold. Don't quit your Daydream.   Dolf Deroos  37:53   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC exclusively.   Keith Weinhold  38:16   You know, whenever you want the best written real estate and finance info. Oh, geez, today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read. And when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text. GRE to 6866 while it's on your mind, take a moment to do it right now. Text, GRE to 6866   The preceding program was brought to you by your home for wealth, building, get rich, education.com.    
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  • 546: What the Bible Says About Money
    Keith hosts a discussion with Pastor Jon Sanders on the Bible's teachings about money.  They explore the context of biblical verses, emphasizing that wealth itself is not sinful but how it's used matters. They discuss tithing, noting it's a principle of generosity, not a legalistic rule. The Bible does not condemn real estate or property ownership, as it is not explicitly forbidden. Wealth can be a tool for doing good and providing housing for others. Resources: Explore the EntrePastors platform to learn more about Pastor Jon Sanders' work in helping pastors with entrepreneurship and financial management. Show Notes: GetRichEducation.com/546 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: [email protected] Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE, I'm your host. Keith Weinhold, what does the Bible say about money? Is it virtuous to acquire wealth, or are you going to hell for that one Bible verse reads, "it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God". I asked Pastor John Sanders all about it, as well as what other religions say about money today on get rich education   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, who delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:19   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:35   Welcome to GRE from Bel Air, Maryland to Bel Air, California and across 188 nations worldwide. I'm Keith Weinhold, and this is get rich education. I hope that your week's off to a good start with 546 weekly episodes. We've approached investing from a lot of angles. Commonly, it's a strategic approach, but there are other wealth building approaches we discussed here, like mindset, what type of vehicle you're going to use, the academic perspective, the protective approach, then there's a mathematical angle. But today, for the first time, it's the theological perspective. Now, even if you're not a Christian or religious at all, what the Bible says about money has import, because the Bible is the number one selling book of all time, so it surely affects the mindset and the approach of those around you. I've got a pretty inflammatory question for you, if money is the root of all evil, then why do they ask for it at church? Now I say that a little jokingly. We're going to debunk that in fact and more as Pastor John joins us shortly, I will hit that verse head on and ask him about it, the verse that says it is easier for a camel to go through the eye of a needle than for a rich man to enter into the kingdom of God. I'm really interested in what he says about that. I mean, in fact, that's actually something I wanted to know about for decades. That's always piqued curiosity inside me, and especially since I'm the 10 plus year host and founder of a platform called get rich education. There's a lot I'd like to ask about that. There is more that I'd like to ask about, if we get time. I'd also like to know what the Bible says about tithing and real estate and gambling and more. Let's meet Pastor John.   With over 20 years in pastoral ministry, this week's guest, also has a passion for using his voice to motivate and inspire ministry leaders. His father was also a pastor. He is non denominational. Hey, welcome to GRE Jon Sanders.   Jon Sanders  4:04   Keith, this is my pleasure to be here. Man, been looking forward to this conversation, so thanks for having me on the show   Keith Weinhold  4:09   me too. We're doing something really different this week. I've been anticipating it, and I sure have some specific things I want to ask you, even some Bible verses later that are somewhat antagonistic to wanting to build wealth. But before we drill down and get into that, just big picture, John, when we talk about what the Bible says about money broadly, what should we keep in mind    Jon Sanders  4:34   with anything when it comes to Scripture? One of the greatest principles to keep in mind is that context matters, because without context, you can make the Bible say about anything you want it to say. And that's probably what we're going to dig into a little bit, is that if you just read a verse in one little snippet and divorce it from not only its context, but the rest of Scripture, you can come away with a pretty skewed view, as many people in the world. Have, as well as many people in the church, many Christians have a skewed view about money and about wealth because of some, you know, certain verses that I'm sure we'll get to today, I would say just an overarching principle, context matters, and hopefully we can show a little bit of that context in our conversation and just see that maybe what you thought the Bible says about money is not, in fact, what the Bible says about money. We'll see where this goes.   Keith Weinhold  5:24   Context matters and mindset matters. You know that we're a real estate investing show, but episode number one of the get rich education podcast from 2014 is titled, your abundance mindset. Do Christians worship a God of abundance, where he would want you to use your God given talents to flourish and produce and make more in this world. Or do you not see it that way?   Jon Sanders  5:53   I 100% see it that way. And what's interesting to me is that as believers, we would say, many of us would agree with things like we believe in this limitless God who spoke the universe into existence by nothing more than the power of his spoken word and just the abundant world in which we live like we believe in that God who can do all kinds of miraculous things. And yet, then, when it comes to the subject of money, so often, we live out something very different than that. With such scarcity, we act as though there's such limited resources at our disposal, and our thinking is so enmeshed in poverty thinking and scarcity thinking. And I think as God's people, we ought to be some of the most abundant thinking people there is because we are supposedly tapped into the most abundant source the world has ever known. So there is a discrepancy there, but I'm 100% with where you are on that we serve an abundant God, and we would do well to think in abundant terms, because I think we're gonna find that his resources never run out.   Keith Weinhold  6:57   Right? We're here to think abundantly in flourish. One thing I like to say is, don't live below your means. Grow your means. Christians should when I'm asking you as a pastor, I would think they would believe that God was an abundant creator. He created the earth that we live on a gigantic piece of real estate.    Jon Sanders  7:17   Yeah, and so much more. And like I said, it never runs out. Whether we're talking about his physical resources or we're talking about the more intangible resources that we can't necessarily hold in our hands. There is always more than enough with the God that we serve. And yet, how then do we come to such places of scarcity and limitation? I would contend this Keith that if someone is actually reading the Bible, applying the principles to their life, they will inevitably, more and more grow in their wealth and in their abundance and in their ability to manage well the resources that God has put into their hand. Now that's not the same as what some might put into the category of what they'd call the prosperity gospel, where God wants everyone to be rich and never to have any sickness or financial difficulties like those are not the same messages. We're not all promised the same exact outcomes, but I believe if we follow the timeless principles, the laws that have been established by the Creator that he's shared with us through His word, I think we can expect to flourish and thrive and prosper and do well and continually grow whatever resources he's put into our hands. As a matter of fact, I would point to a parable that Jesus told, many of the parables that Jesus told in the Gospel accounts of Matthew, Mark, Luke and John, many of them deal with money. Now, all of Jesus's parables got to a deeper, like more Kingdom spiritual lesson. But in many of them, he used something that all of us can relate to, and that is money. Because scripture has a lot to say about money. And then, specifically, in one of those parables in Matthew 25 I believe Jesus told a story of the master who represents God in the story how he gave differing talents or financial amounts to three different servants based upon their own abilities. And right in there, there's some truth that we can learn and apply, that we don't all have the same abilities, but God allows us, He gives us certain things that are in our capability to handle, and then with that comes an expectation that we manage that well, because it doesn't actually belong to us. That's a big principle of money in Scripture is that none of it actually belongs to us. All of it belongs to the Lord, but we are stewards. That's kind of a Bible word. We are the managers of the resources He's given us. And even from that parable I mentioned in Matthew 25 there is an expectation that we take what has been entrusted to us and we multiply it. And if we fail to do that, the words of the master that Jesus. In that parable, were you wicked and lazy servants? The words of the master to the one servant who basically squandered what had been entrusted to him, he was called a wicked and lazy servant. So there's an expectation that we are not wicked and lazy servants, but that instead, we take whatever resources have been entrusted to us and multiply them for the good of God's kingdom and for His glory. So that's just one. I mean, there's countless stories that Jesus told that we can learn principles like that from.   Keith Weinhold  10:30    I think building prosperity is being the opposite of laziness or sloth. Is it bad to be wealthy?    Jon Sanders  10:39   I would say, according to the Bible, 100% No, it is not wrong or immoral or sinful to be wealthy. We can point to many heroes of our faith who were men and women of great wealth. We can also point in Scripture to wicked people who also were men and women of great wealth. So the question is not whether or not someone has money. That's not what sets them apart as righteous or wicked. It's what they do with that money. It's how they live. It's their character that really is what we measure that by. And so here's what I would contend without money, it's really hard to do good things in the world. You're very limited when you put money in the hands of good people, those people can use those resources for all kinds of good purposes and to help a lot of people. I mean, that's just common sense, and so it's not a bad thing for righteous people to multiply their wealth and to grow in their wealth in order to be in a position to help even more people.   Keith Weinhold  11:39   The way I think about it, is that producers and entrepreneurs, they need to give first before they can create any prosperity for themselves. And what's foundational in our mission here at GRE is to do good in the world, provide housing that's clean, safe, affordable and functional. You're giving you're qualifying for a loan, you're buying property, you're taking on risk before anything can possibly come back to you and John here, I've often touted, hey, we provide housing that's clean, safe, affordable and functional. We can maybe abolish the term slumlord, for example. So that's what I'm talking about with doing good in creating prosperity for ourselves as a result of that.   Jon Sanders  12:24   Yeah, and I'll point out another biblical principle that you just outlined, whether you realize it or not, and that is the law of sowing and reaping. It's the law of the harvest. You don't have to believe in God for this to be true. If you go plant something, you will get more of the thing you planted, if you tend to the soil well, and if the conditions are right, and you mentioned it, that is risk. Like there's risk involved. Every time a farmer goes and sows seed into the soil, like there's no guarantee that I'm going to get that back, things can happen. It's a believable risk. It's a relatively manageable risk. It's a risk, nonetheless, to take a great amount of seed and put it into the soil in faith. And I want to point that word out. There's faith when we as entrepreneurs go out, we're acting in faith when we take that risk. And again, it's something that we have to kind of weigh it out, is this a wise risk to take? But at the end of the day, there still is no guarantee. But there is that law of sowing and reaping and the law of the harvest. And I think God honors that, I know he honors that I believe he is honored by our faith. It literally can be an act of worship done to him was we go start businesses, as we invest in real estate, as we buy properties like that, actually can be part of our worship, and us fulfilling the very purpose for which God put us here, to manage what he's given us, to multiply it, and then to do good with it, as you're describing. I agree totally.   Keith Weinhold  13:48   that's a good point. It really is an act of faith to provide an income property, faith that you're going to have a rent paying tenant, faith that you're going to be able to maintain the place, faith that you're buying a property in a market where you have a good expectation that you're going to be able to have future rent paying tenants. Yeah, it really is an act of faith. Well, John, there are some specific verses in the Bible that are really well known and deal with money. One is the often misquoted verse that everyone is familiar with. And what's misquoted is that people say that money is the root of all evil. But as we know, that verse from the book of Timothy is misquoted. It is for the love of money that is the root of all evil. Can you tell us more about that, why it's misunderstood, and actually, just what that really means for the love of money is the root of all evil,   Jon Sanders  14:42   by the way, just stepping back a second in the conversation to your question, is it wrong to be rich? Here's another supporting text where the answer is no, because the verse you're speaking of the apostle Paul wrote this in a letter to Timothy. He's telling Timothy again, in the context, he's telling Timothy. To address the rich people in the church and say some things to them, teach the rich people some things, and he didn't tell them, you know, shame them for having wealth and for being rich. Instead, he's teaching them how to be rich, how to be a good rich person. And it's in that context where that line is found, that the love of money is the root of all evil. Fast forward to modern times. We've kind of thrown the word love out of it, and we just said, There it is. Money is the root of all evil, and we say it with a sense of self righteousness. As I'm sitting here, broke, living paycheck to paycheck, I don't want to be one of those evil rich people. That's not what it says at all. It's saying the love of money is the root of all evil, and we do need to step into this for just a moment. There are warnings in Scripture about money, because if we don't realize and recognize the power of wealth and the power of money, I believe probably one of the reasons God's word says more about money than it does so many other topics is because the danger that money has to compete with God himself. I often say I don't think it's God and the devil that are in competition with each other. In many ways, it's God and money, because Jesus even said you can't serve both. You can't have two masters. You'll either love the one or despise the other. That doesn't mean you can't worship God and have money. It says you can't worship them both, because your allegiance is going to go one way or the other, and the more wealthy we become. There is a danger in that, or maybe even before the wealth shows up. If there is this just burning desire to be rich above all else, it can pull us off course. It can pull our focus away from the Lord. So there is a warning in that that we should heed and listen to. Apparently, according to Scripture, money is powerful, and it's powerful for good and it's powerful for evil. And so if we're going to have some of it, and if we're going to grow the amount that we have, it sounds like it's a pretty powerful tool that we ought to know how to use and how to use properly, no different than when you throw the keys to the car to your teenage driver, like we just put a very powerful tool in their hands, and we pray and trust that they're going to use it wisely and not drive it off the cliff, you know, or kill someone in the process. And money's very much the same way. So the warning is good, but what's not good is to take it out of context and build this paradigm of somehow, the less money I have, the more righteous I am. And in the platform that I'm building, we have a online community. We call it entree pastors, that specifically helps pastors do better financially through entrepreneurial business man, we combat this mindset all the time, because we're dealing not only with people who've been in the church most of their life, but people who have led in the church, and there is so much scarcity thinking around money that we have to address so many of these themes that you and I are unpacking right now. So yeah, often I have found myself taking people to this Scripture and having them read it again and again until they hear themselves say that the love of money is the root of all evil, not having money that is not the root of all evil, it's the love of it. So hopefully that helps shine some light on that confusion   Keith Weinhold  18:15   yes, so one can take it too far if it becomes the love of money? Well, there is a verse in the Bible. In fact, I think it occurs in more than one place. That verse is it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God. How does someone that's building wealth for themselves square that up. We're going to talk about that more when we come back. I'm talking with Pastor John Sanders about what the Bible has to say about money. I'm your host. Keith Weinhold,    you know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk, because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom. Family investments, liquidity fund again. Text family to 68866    Hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group and MLS 420, 056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage, you can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lending group.com, that's Ridge lending group.com   Chris Martenson  20:40   this is peak prosperity. Chris Martinson, listen to get rich education with Keith Weinhold, and don't quit your Daydream.    Keith Weinhold  20:56   Welcome back to get rich education. We've got a pretty special episode today. Our discussion is what the Bible has to say about money, and we're talking with Pastor John Sanders. He's breaking it down for us. John, this is the one thing I thought about more than any other before chatting with you today. It is that well known verse about the camel going through the eye of a needle. And John, I first remember my mom telling me about this verse. Perhaps I was as young as age 12, and that verse is, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God. Here I am a 10 plus year host of a show called get rich education, helping people build wealth ethically through real estate investing. But how do we square up that verse if we're looking to make more of ourselves financially?   Jon Sanders  21:53   Yeah, and like we said at the beginning of the show, if that's all it said, and if that's the only thing you knew, you would come away from that pretty convinced that Jesus thinks it's impossible to love God and also be rich, like there's just no way a rich person can enter the kingdom of heaven. But as we said, context matters. So if we kind of zoom out a little bit and look at the greater context of what's happening in that passage of Scripture, you will recall, and maybe some are hearing this for the first time. But there was a rich man who approached Jesus, and he basically was kind of wanting to justify himself, and so he asked the question, you know, what good things must I do to inherit eternal life and inherit the kingdom of God? And Jesus starts by saying, follow the commandments. And this rich guy basically says, I'm paraphrasing all of this. You can go read it for yourself, but he's saying I've done all those things which, by the way, side note, No, he hasn't. None of us have followed all of God's 10 Commandments and more, like we just I've broken every single one of them. We're all sinners. Probably you have too Exactly. So he's already off base, this rich guy. So then Jesus hits him where he knows it's gonna hurt, and he says, Okay, here's the one thing you're still lacking. Go sell everything you have and give it to the poor, and then come and follow Me. And what it says is that the rich man turned away very sad, because he had great wealth, and see Jesus exposed what this man really worshiped in that I don't believe that that is a commandment from Jesus to all of us to go, sell everything we have, give to the poor and come follow him. That was a specific statement spoken to this specific man, and it did exactly what it was meant to do. It kind of smoked out the real heart issue that was happening here. So then Jesus turns to his disciples after this man walks away sad because he was not willing to pay that price. And that's where Jesus makes this statement that is so classic, where we all know, you know, it's easier for a camel to pass through the eye of a needle than for a rich man to enter into the kingdom of heaven. If you keep reading a few verses later, Jesus goes on to say, with man, this is impossible. But with God, all things are possible. So it is possible for a rich man to enter the kingdom of God. It may be more difficult. It may be more challenging because, as we said a minute ago, when we do have great wealth, that wealth competes in many ways with our heart for the place that God wants to hold in our heart. It is easy when we have margin and we don't need God as much, or we don't think we need God as much. We don't necessarily have to humble ourselves as much when I have all these resources. But that's not impossible. It is possible for godly people to have great wealth and to bow in humility before King Jesus, and to worship Him, and ultimately, to inherit the kingdom of heaven and be better for it, and not, you know, worse off. So again, I hopefully that explains that a little bit or gives some more light to that, because if you just take that little snippet, you're essentially taking it out of the greater context and missing the point, and you're. Making the point something that Jesus never intended, which was to say, rich people can't get to heaven. That's a mishandling of that text   Keith Weinhold  25:08    yeah? Because I think it states that, or something close to it three times in the Bible, in the Quran, the Muslim holy book, also has something similar in it, yeah.   Jon Sanders  25:19   And again, I know in in the New Testament, where it's mentioned multiple times, it's probably because it's found in those Gospel accounts that basically tell the same story just from four different authors. So that's sometimes where you see that repetition in the New Testament is because it's the same story being told just from a slightly different vantage point a different author. But the principle is there, to try to say that scripture forbids people from being wealthy or from pursuing wealth, would be a complete misstatement. It's simply not true. You know, to read scripture in its entirety, you can walk away from it with this understanding that God, not only is he not opposed to wealth, but God is the source, because he owns it all. It all belongs to him, and he actually the more I walk in faithfulness with what he's given to me and what he's entrusted to me, the more I can actually expect will be given to me, because I will see the fruits of those labors multiplied. That's the path I'm on right now, unashamedly, unapologetically, I am working on growing wealth, not only for my family in this generation, but scripture says a righteous man leaves an inheritance to his children's children and man, what if we started telling that story more than trumpeting these verses that make it sound like God is really upset with people who have Money? What if we actually encourage God's people to go build wealth and create more of it? Yeah, because   Keith Weinhold  26:46   I've heard a few different takes on that verse, John, about a rich man not being able to enter the kingdom of God. You know, some have joked, Oh, does the church just want you to put everything in the offering plate and not have anything for yourselves? Another take on it, I guess. If I read the verse closely about how a rich man cannot enter the kingdom of God, well, don't die rich. You be wealthy and then bequeath everything to your heirs upon your death. So technically, you're not dying rich. There are a lot of takes upon that verse. Really appreciate getting your perspective and your interpretation on that context piece being really important, John, when we think about what the Bible says about money, in the intersection of both money and the Bible, oftentimes we think about tithing, which I think of that is giving a 10% of your income to the church. So do you have any thoughts about tithing, or just some of the other general things that the Bible says about money.   Jon Sanders  27:41   I certainly have some thoughts, but more importantly, Scripture says some things. So it really doesn't matter what John thinks about it, but tithing is a controversial subject, so let me start with maybe something that's not so controversial, and we can jump into the tithing. Here's something that is not controversial from Scripture. The more we give, the more of a blessing it is for us. The more that we can give, the more God blesses us. God blesses generosity. So hopefully we can all agree upon that For God so loved the world John 316 that He gave His one and only son. So there's a direct correlation between loving and giving. And the more that I give, the more God seems to bless my life. And I know it sounds cliche, if you grew up in the church, we always heard statements like, you cannot out give God. The more I give, the more God gives back. And again, I'm careful to say that because I don't want to treat God like a cosmic slot machine where I put in $1 and pull the lever and hope to get 100 it is, again, it's just one of those laws that God has established that he blesses generosity. So then the question just becomes, what does our giving look like? What does our generosity look like when we look to Scripture, Old Testament? Bottom line tithing was, I mean, it was commanded. It was part of the overall giving that God required of his people. And a tithe is a 10% of the first fruits 10% off the top. And it's like when people argue that, or they say, Well, I'm tithing 2% that's like saying you ran a three mile marathon. My marathon is not three miles, right? Yeah, tithing is 10% the question is, is tithing for modern day believers? Are we supposed to be doing that? I will share my quick thoughts with you. I believe we are under grace. We are no longer under law. So I don't think that this is a matter of salvation. It's not at that level. But I will say this, I believe Jesus commended tithing, and I'll tell you where it took place, and you can go look at this on your own if you want. I think it's in Matthew 23 again, the context is not really about tithing. The context is Jesus is dealing with the religious establishment. The people he had the harshest words forever were the religious leaders, and he's taken them to task. And he says in there, like you guys tithe off of your mint and your dill, like you're tithing off of everything, like the illegal. Stick level, and yet you're ignoring the greater elements. You know, mercy, love, sacrifice. And then he goes on to say, You should do the first without ignoring the second. And I'm paraphrasing again, so go read it for yourself. What many people look at that passage and they say, here it is, Jesus commended tithing. He basically said, No tithing is good. You should do that. One other case I would make for New Testament, tithing is simply this. When Jesus stepped onto the scene in the New Testament, He never lowered the bar that was set in the Old Testament law. He actually elevated it. I'll give an example. Jesus said something like you have heard it said, You shall not murder. But I tell you, if you hate your brother, you're worse than a murderer. So he elevates it from just the physical act of killing to the heart condition of hating that leads to the killing. He did the same thing with adultery. You have heard it said, Thou shalt not commit adultery, but I tell you, if you look at a woman with lust, you've already committed adultery in your heart. So he raises the bar, not lowers it. So my question has always been, when it comes to tithing, would we believe Jesus to lower that bar and say, Ah, it's not important. Don't do it. You don't need to do it. Or would we expect him to raise the bar? I actually think the bar has been raised. He commended the poor widow that gave everything she had, and it wasn't much, but it was 100% sacrifice, and Jesus praised her. Now I don't think he's that's prescriptive of all of us to go drain our bank accounts, but I think what God is celebrating in the New Testament is sacrificial giving. For me personally, my personal opinion is that tithing is just kind of a good starting place for biblical giving. But I don't hold it up as a legalistic rule that says Thou shalt tithe based on what we see in the Old Testament and how we see it transition over into the New Testament. That tithing is not a bad idea, but if you're a modern day Christian that says I don't believe in tithing, I don't think I need to tithe. Okay, cool. I'm not mad about it. My challenge to you then would simply be this, what does generosity look like to you, and are we lowering the bar? Are you pushing back on tithing because you desire to give less? And if so, maybe there's a heart condition. There of you wanting to cling to something instead of being open handed. It's not my place to sit and look over your shoulder and go. You need to give more of your income. I mean, the Holy Spirit does a better job of being the Holy Spirit than than I do. So really, that's between you and the Lord. But my question and my challenge to modern Christians would be, what does generosity look like for you. You know, what is your discipline or your habit, your system around giving? If there is none, I personally think that's a problem. I think there ought to be some level of generosity happening in your life, because you'll be blessed, and God will use you to bless others. And that's a pretty cool thing, when God gets to channel his resources through you to someone else. So I don't believe everything that God allows us to have in our hands is 100% for us to hold for ourself. I think some of it is he's using us as a channel or a conduit to flow those resources in other directions. So those are just a few kind of high level thoughts of not only what Scripture says about tithing, for sure, but also maybe how we might look at it in a New Testament context,   Keith Weinhold  33:23   there's some good questions for you, the listener, to ask yourself when it comes to the framing and the importance of your giving and your tithing. John, what does the Bible say about real estate or property?    Jon Sanders  33:35   There are places I can't tell you you know exact location in Scripture off the top of my head, but I know there are places in Scripture that talk about going and purchasing land, or somebody owning land, and so I believe scripture upholds the idea of personal private property, and private property ownership, obviously, under the context of what we said earlier, that all of it ultimately belongs to the Lord. But I think it's a good thing. I certainly will tell you this. It's not condemned in Scripture. I know of nowhere in Scripture where we are forbidden from pursuing real estate or pursuing land. Is it like I say on the flip side, I could find examples where people bought and sold land. I'll give you one. Just popped into my head. In the early church, Ananias and Sapphira, they actually were put to death. And it's a really deep story. The issue, the reason they were judged instantly is because they lied about it. But they had land, they went and sold it, and they did not give all of it to the church leaders. And that was not the issue. The issue was they lied about the fact that they were giving all so they wanted to look a certain way, and that's the sin that God was kind of rooting out of the early church. But right in there, I think it's in like Acts chapter four, maybe or five, right in that area, it says directly, was not the land yours before you sold it and after you sold it, was not the land the money yours to keep. Why have you done this wicked thing? And the thing, again, that they were being judged for was lying to the Holy Spirit. And it was kind of like in that moment in the early church, the Lord was saying, we're not doing this like we're not going to live this fake, hypocritical life. And he judged it instantly, kind of grateful that God doesn't still deal with us in that way. It's not to say that he could not. That's a quick story that popped into my head as an example of buying and selling land. So if you do buy and sell land, just don't lie to the Lord about about how much you sold it for, because he knows it was his in the first place. He knows how much you sold it for. So just be honest in your dealings. There you go.    Keith Weinhold  35:39   Well, I'm grateful that the Bible doesn't say you have a limit of five rental properties. That's really good to hear. Right? Well, John, as we're winding down here, we've talked about Christianity and what the Bible says about money. Are there any non Christian religions that, just if you could spotlight one, that have a really interesting approach to money, whether that's Muslims avoiding debt, or anything, Hindus or Buddhists believe just any one thing. That's particularly noteworthy with non Christian religions approach to money.    Jon Sanders  36:09   I'm going to acknowledge a lot of my ignorance when it comes to other world religions. I can speak of one thing very locally to where I live, I don't know. It's kind of a religious thing. It's kind of a cultural thing. So where I live in South Dakota, I'm surrounded by, you know, an Indian reservation not too far from me. And the Native American culture is very prevalent here. And one thing that's been interesting to me to learn over the years is that, as I understand it, the Native American culture does not believe that you can own property. So they don't own land. They don't believe in owning land, at least historically, traditionally. So again, is that a religious thing? Is that a cultural thing? Not exactly sure. I don't share that belief, but it's an interesting take on things. So I'm sure there's so much more that a different guest could give you in terms of insight on other world religions when it comes to, you know, their view on certain deaths and philosophies around finances and things like that. For me, I really have studied one very deeply, and that's Christian faith. So I don't really feel like I'm much of an expert to speak from those other perspectives.   Keith Weinhold  37:18   Well, John, this has been enlightening to me. I've learned some things, and I sure might now know how to explain my way out of the whole camel in the eye of a needle. Verse there, if someone wants to learn more about you, tell them how   Jon Sanders  37:34   you can look me up online. I have a website called entrepastors.com me and my partner, les Hughes, as I said earlier, we help pastors provide better for their families through entrepreneurial business. If you want to connect with me, if you just go to entrepasters.com all of the links to connect with my social media and everything else are right there, and I'd be happy to jump on a call or serve you in any way that I can. So I would welcome you reaching out.    Keith Weinhold  38:01   Oh, thanks a lot for offering that to our audience. It's been a pleasure hosting you.   Jon Sanders  38:05   Thanks, Keith. Been a fun conversation. I appreciate you having me.   Keith Weinhold  38:15   Oh, yeah, good stuff from Pastor John today. I did not know that Pastor John would agree with me this much. I guess I'm frankly, a little relieved I learned some things too. Check out his platform again. It's called entre pastors. This was definitely an anticipated episode here today. The good news is we've got more anticipated episodes amidst an expected economic slowdown in potential recession. What actually happens to real estate in a recession? I will cover that and then with a lot of political turmoil and policy change coming from the White House that promises to massively swing the economy. I would like to have someone that's inside the White House and advising President Trump himself on his economic policy to come here on the show so that I can go ahead and ask them about it. Well, that's hard to do while they're in office and the administration is in full swing like this. So speaking of anticipated shows coming up here on the GRE podcast in future weeks, we have the financial advisor, the budget director of a past president that advised that president in the White House. He will be our guest here on the show. You'll learn what you can expect from him for the next nearly four years. And you know, something that might be even better to have that past president's White House Advisor here on the show, because he will feel emboldened to be more critical. Perhaps. Stay tuned for that big thanks to the terrifically knowledgeable John Sanders today in. Till next week, I'm your host, Keith Weinhold, don't quit your Daydream.   Dolf Deroos  40:07   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC exclusively.   Keith Weinhold  40:31   You know, whenever you want the best written real estate and finance info, oh, geez, today's experience limits your free articles access and it's got paywalls and pop ups and push notifications and cookies disclaimers, it's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters, and I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video, course, it's all completely free. It's called the Don't quit your Daydream. Letter, it wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to 66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866.   The preceding program was brought to you by your home for wealth, building, getricheducation.com
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This show has created more financial freedom for busy people like you than nearly any show in the world. Wealthy people's money either starts out or ends up in real estate. But you can't lose your time. Without being a landlord or flipper, you learn about strategic passive real estate investing to create wealth for yourself. I'm show host Keith Weinhold. I also serve on the Forbes Real Estate Council and write for Forbes. I serve you ACTIONABLE content for cash flow on a platter. Our bottom line in real estate investing together is: “What’s your Return On Time?” Where traditional personal finance merely helps you avoid losing, you learn how to WIN. Why live below your means when you can grow your means? Since 2002, international real estate investor Keith Weinhold owns multifamily apartment buildings to single family homes to agricultural real estate. New episodes are delivered every Monday.
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