Jason Hartman plays an episode from October 2009 for Flash Back Friday. The show centers around escaping the rat race and Jason Hartman is joined by Robert Kiyosaki, author of Rich Dad, Poor Dad. They discuss personal finance, real estate, and how to build passive income.
Announcer 0:00
Welcome to this week’s edition of flashback Friday, your opportunity to get some good review by listening to episodes from the past that Jason has hand picked to help you today in the present, and propel you into the future. Enjoy.
Announcer 0:16
Welcome to creating wealth with Jason Hartman. During this program, Jason is going to tell you some really exciting things that you probably haven’t thought of before and a new slant on investing fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine self made multi millionaire who not only talks the talk but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom, you really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:10
Welcome to show number 111. This is your host, Jason Hartman. Glad to have you here listening today. We have our interview with rich dad author Robert Kiyosaki coming up in just a few minutes. After we chat for a little bit. I’ve got Brittany here with me. Hi, Jason. How you doing? I’m doing well. Thanks. Don’t just say hi to me. I gotta say hi to them, too. I guess we’ll start with you, Brittany. Okay, since we just introduced you, of course, you’ve heard Brittany on the show before, and she just visited her hometown Phoenix, Arizona, and looked at some of our new property offerings out there. And it was hot, right? It wasn’t 113 while I was driving around, but you know, it’s a dry heat. It
Brittany 1:49
is dry. But it’s still It’s over. It’s in triple digits. It’s thinking hot.
Jason Hartman 1:54
Yeah, that’s for sure. But you know, what about what 5 million people live there, so You know, it’s funny when I talk, you know, being in California, we’re pretty much the only place in the country with sort of great weather, but I think it’s kind of boring weather because I love storms. I love changing weather and I love changing of seasons now, you know, you’re always like what you don’t have, right? You know, if you’re, if you’re dating a brunette you want to blonde or vice versa. Okay, now that example, right?
Brittany 2:21
Well, I just
Jason Hartman 2:22
threw that one in there. You know, everybody kind of wants what they don’t have. So when I move, and I am going to move, I’ll see how I like it. You know, maybe I’ll hate it. And I want this boring Southern California weather where it’s always you know, 7580 degrees. Yeah. So you know, a lot of people live in these places. That’s what’s kind of funny in our when we have live educational events here in Southern California. All of the locals say things like, well, who would want to live in Houston? It’s hot and muggy in the summer. Well, the fact is 5 million people live there folks. Okay, you know, the rest of the world doesn’t live in this Southern California climate.
Brittany 2:58
You know, a lot of the people are moving from Southern California to Phoenix,
Jason Hartman 3:01
that’s for sure. And they’re moving everywhere because California is kind of a failed state. In my opinion, it’s a state with huge financial problems. I’m waiting for my tax refund, at least now, I know that I’m not going to get an IOU and the bank stopped honoring I owe us when the state was issuing them. So this state is a disaster of epic proportions chasing business out. And that’s just the way it is. But here I am, on another tangent, Brittany’s pointing at the watch and saying Hurry it up. Brittany, what do you have to say?
Brttany 3:32
All right, like Jason mentioned, I visited the Phoenix market some of the properties we have out there. And yes, it is a hot market figuratively and literally,
Jason Hartman 3:40
well, it’s kind of hot now, because prices have been slashed in half. And you know, as I’ve said on prior shows, we were recommending the Phoenix market about four years ago, I bought a property there and it went way up and then it came way down. So now we think it’s again, we’re not optimistic. We are opportunists. And we think it’s time to look at this market again. Yeah, because the prices have become so low, the RV or rental value ratios are really desirable. Now, this is the time to get in when all the dead bodies are in the streets, you know, you pick up the great deals that way.
Brittany 4:14
Yes, I was able to meet with one of our agents out there and view some of the properties that we have recommended on our site. Unfortunately for you, the listeners and the investors about half of those properties that I viewed are now sold. Yeah, it was two days ago that I visited.
Jason Hartman 4:32
Remember, you’re listening to flashback Friday. Our new episodes are published every Monday and Wednesday. And like you said, the market is pretty hot, you know, its properties are moving out there again, because it is literally now cheaper to buy than it is to rent in many of the Phoenix sub markets. And we’re finding that in a lot of places. So that’s, you know, one of many good signs
Brittany 4:58
the relationship We have with the company out there they have many great properties. They rehab the properties and they most of the time have a tenant in place by the time you purchase these properties need little rehab they’re pretty new most of them built since 2001 property that was just uploaded onto our site today by one of our agents. There. It is in Mesa, Arizona, a great growing area it is only 107,000 is the listing price renting for 950 and that’s a pretty low rent very conservative in the lower 25% for that area, and it’s cash flowing 21% return on investment, great house good curb appeal great income property I’d go on our site and look at that right away
Jason Hartman 5:45
yeah and so what what Brittany is sharing with all of you listeners is the Performa the projection, which is on our website. So it’s all detailed out at Jason Hartman calm slash properties, you click on the map of the United States. Have which state you’re interested in. And we have properties in many states. And then you’ll see you click on list of properties in this area. Once you select sort of the bullseye of the city,
Brittany 6:09
the bullseye, for some reason for Phoenix is listing more over to that patchy junction area, even though
Jason Hartman 6:14
just the way the Google Maps set it up,
Brittany 6:16
right? Yeah. Unfortunately, we can’t change that. But all the properties will be listed there. And yeah,
Jason Hartman 6:21
they’re in the Phoenix area. So you go and you click there, click list of properties in this area, and then you’ll see a whole list of properties. Well, you know, whatever we have available at the time. Then when you click on a specific property, a one page performance projection comes up. And that gives you the projected return on investment before and after tax benefits, cash flow, projected rental rates, etc. square footage, all of the details. Okay. No,
Brittany 6:48
so anyway, that’s a current house that we have available in that area, Mesa, Arizona, go ahead, check it out. We’ll have new inventory hopefully there soon. Like I said, these are going fast. Purchase now.
Jason Hartman 7:00
Okay. Excellent. Good point. Yeah, the market. You know, in many of these markets, the markets are really heating up. And if you’ve been taking in what the news media has been telling you, in the last month or two, you’ll see that buyers are out. I mean, again, we are not real bullish on the general overall economy. But in many of these markets, the bargain hunters are hitting the streets and they’re buying stuff like crazy, because they’re sensing a bottom or we’re sensing very close to a bottom in many of these markets. And I interviewed Gillian tett today, she’s a award winning journalist with the Financial Times, and she wrote a book called fool’s gold, and we’ll have that interview up soon. And you know, one of the things all of the experts are saying, remember, it’s not just about price real estate, or income property investment is a multi dimensional asset class. The interest rates are so darn low now. And the the opportunity you have is that the Treasury China is not buying our debt like they used to. And what does that mean? That means we’re going to see higher interest rates in the future, because we will have to offer as the dollar is being so debased. And again, you’ve heard this discussion on prior shows, we will have to offer higher yields to attract buyers for these bonds. And that means higher mortgage rates, folks, it’s that’s not like some crazy prediction. It’s just a fact of supply and demand. So, look for higher interest rates you want to lock in while prices are low, rates are low. We’re not saying we’re expecting prices to rebound a whole bunch anytime soon. But part of the multi dimensional nature of the investment is the mortgage when you can lock in for 30 years at these low low fixed rates. Okay, what else Brittany, anything else that sums it up? Okay, thank you so much for visiting there and giving us that update. A couple of other things. Before I want to talk about a few more properties in just a moment before we go to the interview. with Robert Kiyosaki, a couple of events coming up, of course, August 15 are creating wealth in today’s economy event here in Orange County, California. We’ve got the Masters weekend on October 10 and 11th. That’s our semi annual event. So it’s only twice a year. And be sure to come out for that we’d love to have you. And I want to thank Richard Lily crop who has been on the show before. We interviewed him a long time ago. He is in England, and he is flying out for the Masters weekend. So I think that’s our furthest away visitors so far. We’ve had many people fly in from New York and you know, all across the US before but I believe Richard, you have got the record. So thank you for joining us. We really appreciate having you attend the event. And we want to see more of you. So I know some of you listeners in Australia, in various parts of Europe, Asia, the Middle East, come on out. We’d love to have you for the Masters weekend, and we’d love to meet you in person on products. We have gotten many new products that were Producing, not the least of which is our new newsletter, the Financial Freedom Report. And our editor Doug has put together a great third issue for August. And we are about to go to print on the app that is available for subscription. This is a there is a fee for the newsletter, but we have some free samples at Jason hartman.com and the members only section so you can get a free sample there. And you can also subscribe under the events and store section of Jason hartman.com. You can buy a subscription there to make sure you don’t miss any issues. And we have got the loan modification the Do It Yourself loan modification kit there. That is a 56 page PDF file, as well as an audio download. So we had it read by a professional voiceover person. And then we have got the creating wealth in today’s economy seminar. Finally, I know we’ve had literally thousands of people ask us for this. We finally got around to producing this Audio in printed format. So that also is available on the site. And we edit it down to a nice streamlined, it’s about two and a half hours long, I believe. If you’d like a copy of that, go to Jason Hartman comm click on events and store and it is there for you. We’ve got the five book series, which is the hard copy of all the podcasts, with extensive visual aids charts, all kinds of great things that many of you have asked for as well. The first book is about to be published for the amazon.com Kindle product. I have the amazon.com Kindle ebook reader, which is a great little product, and it’ll be available that way as well in print and PDF downloads. So look for that as well in that same section, the website, a couple of properties I just want to tell you about real quickly before we go to the Kiyosaki interview, five bedroom house in the student housing development in Columbia, South Carolina, University of South Carolina or USC campus housing. So this one is 1800 36 square feet, it’s 250,000. We got a $5,000 discount for you on that. And the projected rental income is fantastic. Now remember this is brand new. So this is not a rehab this a brand new development, projected rental income 20 $350 per month. Cash Flow is positive by $59 per month, return on investment projected at 20% after tax benefits. And again that’s a turnkey package real simple. If you like that one. Here is a better kind of deal property but not as turnkey and not brand new. This is in Dallas, Texas area, four bedroom, two bath projected rental income 1350 per month, and the price is only $130,000 price per square foot is only $65 per square foot. This is a newer property. Again, you can’t rebuild it for that price. So when you’re buying at or below the cost of construction, you’re in for a pretty good deal. No matter what projected cash flow is 1500 and $98 annually, projected return on investment after tax benefits 27%. So call our investment counselors or contact our investment counselors through the website on any of these properties. Here’s one in Georgia, if you saw the picture of this house, you would be amazed. I love the looks of this house. $102,000, downpayment 50 $330. Again, these are really short on supply. So folks, if you’re interested, you got a call right away, you might have to wait to get one of these they’re a little bit hard to get the projected return on investment here, because of the additional leverage is projected at 52% annually. Don’t try that on a mutual fund very low down payment. So go to Jason Hartman calm and you can fill out the contact us form and contact any of our investment counselors by calling us at the number on the website at Jason Hartman calm another thing about I wanted to mention to all of you listeners is how funny it is. When you look at the precious metals community, the gold bug community, you know, I get this newsletter from a company called lira financial it just an email newsletter comes out once a week, I guess. And every single time I get it, it’s always about how gold is ready to do this and, and that and look at, you know, my position on this. If you’re a regular listener, I think gold and silver are okay. I don’t think they are an investment. I think they’re just money. They’re just insurance. But if you want to really grow wealth, you’re not going to do it with gold and silver. Unless you know you happen to get a lucky break. Okay. for 2030 years, they’ve been talking about how everything’s about to collapse, and gold is going to triple in price and it just hasn’t happened yet. Okay, here I’ll just read a couple of the headlines. Precious metals are ready to shine. Okay is one article. Here’s another one gold will hit 1500 dollars within the next five years. Yours? Well, if that happens, that’s really no big deal. If you have a good leveraged income property, your return is going to be far better than that. Remember, these precious metals don’t produce income, they don’t have tax benefits. I’ve went, I’ve gone over those characteristics before, they’re subject to manipulation, etc, etc. You can’t finance them, folks, these aren’t investments. The problem is people are trying to treat metals like their investments, their money, I admit that they’re better than dollars. I completely agree with that. So I take kind of a middle ground on this whole metals thing. So I just wanted to mention that because, you know, these gold bugs, I hear them on the radio and I look at their stuff. And you know, we’ve got an interview coming up with Howard Ruff, and he’s a real famous gold and precious metals person. So I think you’ll be interested in that interview. I already recorded it, and it will be coming up on a show real soon. Enough talking about this stuff. Let’s go to the interview with famous Rich Dad Robert Kiyosaki and he has about 250 grand a month in cash flow from his apartments and I think you’ll really enjoy this interview. You’ve probably read his books. Here he is. We have a very exciting interview for you today. It is our special special guest, Mr. Robert Kiyosaki the creator of the rich dad series, and more recently, the real book of real estate with 22 contributors, including Donald Trump, and it has had great reviews from Publishers Weekly. And also his newest, very creative venture, which is entitled the conspiracy of the rich, will ask him about in the interview here today. Robert, welcome to the show. Thank you very much. It’s great to have you on board. Tell us a little bit about your thoughts. You know, of course, we want to get your take on the economy. I mean, you’ve had a very distinguished career as an entrepreneur and investor in inventor and of course a best selling author. What recommendations do you have for people wanting to create or protect their wealth in today’s economy?
Robert Kiyosaki 16:59
Well, I always recommend Getting more financially educated. If you look at the people that are hurting financially today, most of it is due directly to a lack of financial education in our school system. And then you look at our financial and political and banking leaders, they haven’t been putting out the best advice for people to follow. So that’s why people are in trouble. So if you want to protect yourself, the best way is to just make it you know, dedicate yourself to getting financial education. That’s what my rich dad did for me. And one of the reasons I’m prospering in this time is very simply because I have an education. I didn’t listen to those guys who sell mutual funds.
Jason Hartman 17:34
Yeah, no question about it. They want you to just stay long in the market, and that doesn’t work anymore. It doesn’t.
Robert Kiyosaki 17:40
I’ve never had that suicide. Why would you put your money into such a volatile instruments such as a stock or a bond or a mutual fund where though, you know, they’re good, they’re really short term investments are not long term. I mean, you’re in and out, like Jim Cramer is a trader, and he’s going to know the market and then the financial planners tell you to go along the market. You’ve got to But it’s crazy.
Jason Hartman 18:02
I agree with you completely, Robert, but you know, I’m sort of wondering why well, the mainstream financial services industry has that advice. I mean, is it because they’re just lazy? Is it because they get? You know, in the olden days, the brokers got accused of trading or churning the accounts. I mean, now it’s all like this managed money model, and they just sit there and they’re long on everything. See, it’s just crazy. That whole industry seems like a big myth. It doesn’t work. It doesn’t work for anybody.
Robert Kiyosaki 18:28
Well, that’s what I wrote about in my book conspiracy of the rich was an online book that’s for free, and it’ll be taken down. I think July 7, you have until July 7 to read it for free is 12 chapters long,
Jason Hartman 18:38
and that’s a conspiracy, the rich, calm.
Robert Kiyosaki 18:40
It’s just no mistake that they’re telling you to put your money in there long because that’s how it gets your money. The same way that a banker tells you to save money, that’s how they get your money. And if you’re not really intelligent, or they tell you your house is an asset, it’s not your asset is the bank’s asset. So I really don’t know why people believe that garbage but like a random conspiracy. So the rich it was, this crisis was a long time coming, you know, coming four years. Sure.
Jason Hartman 19:07
Just a reminder, you’re listening to flashback Friday, our new episodes are published every Monday and every Wednesday. The conspiracy of the rich project is fascinating. I remember when I first received an email on that, and I went to the website and there was one sample chapter there, the subject matters exciting and interesting, but also the way you’re involving people in the project. Can you tell us a little bit more about that it’s really a fascinating model that you’ve created there.
Robert Kiyosaki 19:36
Well, this. This crisis has happened before. It’s happened all throughout history. And so I thought it would be kind of interesting to write a book about history as history was being written. And so as people were reading along, they could actually say that this has happened before. And this is no mistake, it’s not an accident. Now the whole bottle is based upon bailing out the banks. So that’s why we have the Federal Reserve Bank, which is You know, it’s not a shuttle service Federal Reserve’s not a bank. That’s basically how to get your money and my money legally via that system of the government. So if you look at the four things that make people poor every single month is number one is taxes. Number two is debt, you know, car payments, mortgage payments, three is inflation. You know, that’s like you suppose the price of gas going up, would go up and force a retirement plan. So those are the four things that make the average middle class person, but they’re the very same things that make guys like me rich. And if you have a financial education, you can pay I can make millions of dollars and pay zero percent. In fact, I use debt to get rich now for about not against owning a home but I own my own apartment house. And I use debt to get rich. I use inflation to get rich. That’s why I invested oil, gold, silver, copper, and I don’t mean a retirement plan.
Robert Kiyosaki 20:59
And all of that money goes to conspiracy.
Jason Hartman 21:01
Right? That’s the 401k is probably one of the worst deals going nowadays, isn’t it?
Robert Kiyosaki 21:05
Oh, sastras I mean, these, these morons are still out there say, Oh, I called my financial planner, this is just stay there for the long term. I said, Well, you have a you know, I don’t know where you came from, but you’re not very bright person. Yeah,
Jason Hartman 21:18
no question about it. You know, we are definitely living in interesting economic times with government spending and the creation of fake fiat money at unprecedented levels. What are your thoughts on on the opportunities that are out there nowadays for prudent investors? I mean, I want to ask you geographically to as far as real estate goes and product type apartments, single family homes, mobile, home parks, any particular likes and dislikes there,
Robert Kiyosaki 21:43
but my message is the same. If you’re an idiot, you’re gonna lose your money. So you don’t just go and buy something for basic asset classes. Number one is the business and the richest people in the world own businesses, the bill gates of Microsoft and Apple they’ll give jobs. The second is real estate. Third of stock bonds and paper assets. And then the fourth are commodities. So I own all four, but I am a student of all four if you if you don’t have any education, you will lose money at any one of them. So you know people have lost money in real estate, they’ve lost money in gold and silver, they’ve lost money in businesses. And yet they sit there and they still think they can they can get lucky. I don’t know where people get their, their heads off, you know, trying to get rich like flying an airplane. You don’t just climb in takeoff because you won’t crash. So it’s not just not investment, not the real estate or mobile home or apartment houses are a few individual financial education that determines the focus.
Jason Hartman 22:43
You know, you can make money basically in any product type. If you know what you’re doing. That’s kind of the takeaway, okay? Do you feel this is a good time to be stocking up on more income properties and more mortgage debt. One of our big strategies is, is your buying these properties basically is packaged commodities. When you get the land cheaper free, and you buy below the cost of actual construction, then you put long term fixed rate debt against them. And as inflation comes, it makes the value of the commodities increase and wipes out the value of the debt. We see this as the ultimate arbitrage opportunity. Do you feel the same way,
Robert Kiyosaki 23:17
though? How come? Well, because you’re counting on something else. And I don’t do it that I just don’t do it that I what I do is if it doesn’t cash flow, I don’t buy it. And then my whole thing is to buy it and then increase the debt on it not not reduce it. We agree with that, too. I mean, I
Jason Hartman 23:35
definitely agree with that.
Robert Kiyosaki 23:37
See what I’m saying, Jason, is that if you’re not, if you’re not smart, you’re gonna get your butt handed to you out there. Look, real estate, like the economy is predicated upon jobs. So you can buy the best real estate in Detroit and if jobs keep going out of Detroit, you’re still gonna lose money. So I only buy real estate where there’s jobs I hate like Oklahoma’s They Tulsa, Oklahoma, Dallas and Houston because there’s oil there. And as long as there’s oil, there’s jobs. But the other thing is not just buying it and hitting and missing us. And I, in theory, your ideas work well. But there’s far more to it than just real estate and financing. And there’s a lot. That’s what I caution people on. Just because the stock is cheap or real estate is cheap, or businesses cheap, doesn’t mean that
Jason Hartman 24:27
you are so right about that. You know, we see promoters out there all the time promoting these properties in Michigan, especially in Detroit. And, you know, Detroit used to be one of America’s flagship cities, and the population has been virtually cut in half over the last couple of decades. And I just think there’s no real future there. If you don’t have job growth, if you don’t have population growth, you’re dead. And California You know, this is one of the reasons we haven’t recommended California and years. We like the markets you mentioned. We like Texas quite a bit. You know, we have a lot of investors buying properties there. We like the southeastern us, the Mid Atlantic pretty good in the Caribbean. He knows, I definitely agree. But the property has to be sustainable, self sustainable, so that, you know, you’re not in big negative cashflow situations, and then you have that other stuff working for you. So I’m completely agreeing with you. I just want you to, yeah, there’s no difference of opinion on that stuff.
Robert Kiyosaki 25:14
And the other thing is that you have to know whether you’re buying a B’s or C’s, a high end, B is middle middle class, and C A slumlord. And I have focused only on B, the A guys are getting crushed, right? You have to be highly specialized to do those. They call them section eight and all this stuff, right? I don’t touch that. One more guy, right? I’m strictly in the big category. I have been there all my life. So I don’t just jump around the place. I really focus and I know my product. I know my customer. I know my market.
Jason Hartman 25:47
Thank you for listening to the creating wealth show. This is Jason Hartman, your host and we appreciate you following the show. We have many many episodes, hundreds of episodes and some of the older episodes have been archived and placed in our members section, and that applies to this one. So we include a sample that’s about 25 minutes long. And then for the rest of the show, you can go to our members section at Jason hartman.com. Many of the other shows are still in their full length complete version. However, some of the shows like this one are in our members section where you can hear the show in its entirety. And again, you just need to go to Jason hartman.com. And you can get the full show there in the members section plus a whole bunch of other great members benefits and resources, whether it be documents, forms, contracts, articles, other video and audio content, just a great resource, so be sure to join as a member at Jason hartman.com. And thanks again for listening to the creating wealth show.