In this Flashback Friday episode, Jason Hartman shares an issue of The Financial Freedom Report. This premium monthly newsletter provides cutting-edge investment knowledge that removes the guesswork and uses clear language to describe the strategies of how you can implement income property investing the right way. The topics in this newsletter include the steps to create your own economic recovery, four pillars of wealth, and a Financial Freedom case study.
Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts visit Hartman media.com.
Jason Hartman 0:09
Hey, this is Jason Hartman, thank you so much for joining me. Do you know what day it is? Yes, it is flashback Friday, where you hear the best of the creating wealth show and you hear some good prior episodes, some good review. Remember, we’ve got almost 500 episodes out. And you know what? iTunes doesn’t even hold them all if you’re an iTunes listener, if you are listening on Stitcher, thank you for joining us. So we want to bring you some good review stuff. Now. What’s interesting about flashback Friday, it’s a little scary for me. I got to be very, very candid with you on that. Because you the listener, you get the chance to hold my feet to the fire. Did I make any predictions? Was I right? Was I wrong? I’ve been right about a lot of things, but I’ve been wrong about a few. So you can give me a hard time about that if you wish. But it’s flashback Friday, and we will give you the uncensored Best of the creating wealth show with a prior episode. So let’s dive in. Here we go. Remember, this is not current. It’s flashback Friday.
Announcer 1:22
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur whose own properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 2:11
This your host, Jason Hartman. Thanks so much for joining us today. I have here in the office with me, Brittany. Hey, Brittany, you haven’t been on for a while.
Brittany 2:19
I have not. Thanks for having me.
Jason Hartman 2:21
How’ve you been?
Brittany 2:22
I’ve been pretty good.
Jason Hartman 2:23
Have you been swanky.
Brittany 2:24
I have been very swanky.
Jason Hartman 2:25
Swanky is good. Before we get into today’s show, let’s talk about what? You want to talk about?
Brittany 2:31
I want to talk about some of our events that we have coming up. We have our creating wealth bootcamp on July 31. And that location is TBD.
Jason Hartman 2:41
Last show, I mentioned that we were thinking of LA, we didn’t get any feedback on that. So we’ll just stick to Orange County, probably.
Brittany 2:47
Well, stay tuned for our location on that.
Jason Hartman 2:50
In the OC, it’ll be either in Costa Mesa Newport Beach, I’m sure. Which is an easy deal. If you’re coming from out of town. Last event, we had people come from Hawaii, from the East Coast all over and the Pacific Northwest up in Oregon. It’s easy. You find a john Wayne Airport, we will pick you up one of our people will come and pick you up at the airport, you don’t even need a rental car, you can come in and stay for one night at the same hotel where we’re conducting the event. And it’s just really easy. I mean, any of these hotels are within five, maybe 10 minutes of John Wayne Orange County Airport. And the airport code for that if you’re traveling in is S n a n a and it gets one better Brittany.
Brittany 3:27
And Jason, are you gonna tell him about if they have to hop on a plane to get here, how they get their tickets for free?
Jason Hartman 3:33
If you have to fly, we’ll cop you.
Brittany 3:35
What a deal.
Jason Hartman 3:36
So, that will more than pay for the cost of your hotel. You can stay in a nice hotel here, this time of year, for two nights, for less than that. So we’ll cop you. So that’ll be good. You and a guest Come and join us bring your significant other and join us for that. Brittany?
Brittany 3:47
Yeah, we’re looking forward to that event. We had a great turnout last time and we’re looking for another great turnout this time on July 31st.
Jason Hartman 3:54
Yep, that’ll be good. So that’s Saturday, July 31. And I have to tell you, I was at another event today another event. And I just. It is unbelievable. To me the number of events out there that are charging people, absolute fortunes, this event was $6,000 per person that I went to today. I attended it, I got in for free. Because I’m in the I’m in the biz, but it was amazing how little content was presented at that event. Just unbelievable. If you like content, and you don’t want me talking about my family and my dog for the whole day, which I don’t, you will get real content. You won’t get a big sales pitch on products or upsold to the next event or anything like that. We have real content, creating wealth in today’s economy. We’ve had several thousand people come through that course and we’ve got just rave reviews. And it’s $300 it’s less than $300. Do yourself a favor. Come to that you will really really be pleased.
Remember, you’re listening to flashback Friday. Our new episodes are coming Every Monday and Wednesday.
The other thing I wanted to mention is I’m looking at a property that I got from a commercial real estate broker. And the reason I bring this up is because this property and Brittany there it is, is a blockbuster video store on a triple net lease. And I showed this and talked about it a little bit at my last seminar. And every time I get the same email, because I’m on their email list, I email the broker and he never responds to me. And I think that’s really lame. And I simply very courteously asked this question. I said, Hi, what’s his name, Brad? Yeah, Brad. I said, Hi, Brad, just out of curiosity, who would buy this? And why would they buy it, blockbuster is basically closing down. Everybody knows DVD rentals are a thing of the past already with technology. And if you lose this tenant, you are 100% vacant and a property that is $1.3 million. Now this is advertised as a 10% cap rate, I don’t know who in the planet would be stupid enough to buy this property. Now, this is the kind of thing that a commercial broker preys on to sell to investors who usually think these triple net leases are really simple deals. You’ve got an A credit tenant Blockbuster Video, I agree with that. And they have over it listen to this, they give their stock symbol on the nysc, which is BBI. They have over 9000 stores in 25 countries, and they show that they have revenues of more than $4.6 billion. And this is just crazy. This store, I’ll bet you now I could be wrong, it could be converted to something else. But I bet you this thing’s gonna be vacant in a couple of years, if not sooner. So 10% cap rate, we’ve got properties with cap rates better than 10%. And because you get better leverage and better tax benefits on housing, they’re just far better investments. I mean, they’re just far better. Hey, Brittany, let’s go back. And I’ll stop my rant here and tell them about the Masters weekend product. This is a great product, folks. And there are two products you really need to purchase out of the store at Jason hartman.com.
Brittany 7:04
Well, we do have our masters weekend live event coming up Jason on October 16, and 17th. And you can sign up for that on our website. Right now, it is $647. It goes up I believe, by 50 or $100 on June 15. So go ahead and purchase your tickets right away. So you get in for that early bird special. And we also have a deal where you can get this event. It’s kind of the best of masters weekend as what we like to call it from years past that we’ve done this event. I believe it’s this our eighth time we’re going to be doing this event seven.
Jason Hartman 7:39
Lucky number seven this time. And this master’s weekend home study course is $497. And it has 22 speakers on everything from best practices and property management market profiles of several markets tells you how to analyze properties, my economic outlook and monetary policy outlook property evaluation and tracking how to properly structure legal entities for maximum asset protection, how to get cost-effective legal services, the client panel. There’s so much more here and you don’t have to waste time you get a digital download of all the audio. You don’t have to travel for this and you don’t just from this morning’s experience. I’m so, I tell you, I go to these other events and it really makes me feel good about what I’m doing. I’m gonna pat myself on the back, you know, our stuff is good content. I’m being objective, folks, I really am.
Brittany 8:33
And let me tell you, I was on this team of putting this product together and it is loaded with content.
Jason Hartman 8:39
Yeah, it is just the materials kit that comes with this. The Masters weekend home study course audio plus materials kit and materials kit. I believe is about 500 pages, right, Brittany?
Brittany 8:49
Yeah. I believe it’s 499, actually.
Jason Hartman 8:53
499 pages, if you count the cover, it’s 501 how’s that front and back. So anyway, look at get a copy of that, you’ll really like it, there’s one more product that you really need to get. And that is the one that I’m going to give you a free sample of right now. And that is my financial freedom report newsletter. So we gave this one away as a freebie sample. So we figured we’d also podcast it. And what you get is you get the 20 page. It’s usually about 20 pages PDF that’s in full color. And it’s really beautifully illustrated has charts, graphs, performers, with examples with call outs, it has articles, there’s a lot of text in it every time a lot of articles, a lot of action steps of actionable things you can really do to improve your wealth, through online businesses through home-based business through real estate investments, predictions on the stock market predictions on the economy, all kinds of great stuff. So get a hold of the financial freedom report. It’s a subscription. It’s $197 a year you get the PDF copy on every issue and you also get The audio version of the newsletter and you are about to hear that right now look forward to seeing you on July 31. At the creating wealth in today’s economy boot camp, and hopefully also at the Masters weekend in October.
Let’s listen in to the Financial Freedom Report. Here’s a free issue sample for you. Be sure to subscribe and you can get all of this stuff at Jason hartman.com.
Announcer 10:25
Jason provides an extremely unique service deal evaluator. Are you interested in a property outside of our network? Need a second opinion? No problem. Let our experts evaluate the deal. Find out more about it at Jason hartman.com. The price is only $50.
Penny 10:50
Welcome to the Financial Freedom Report, volume 10, issue number five. I’m Penny Haynes,
Rich 10:57
and I’m rich Rozell and in this issue, we’re bringing you the three steps you need to create your own economic recovery.
Penny 11:03
We’ll talk to you about the four pillars of wealth, and just a hint, none of them is money.
Rich 11:09
There’s also something new a financial freedom case study, plus online business advice, the secret to property investing and much more.
Penny 11:18
So let’s get started. Rich, I realized that most of us could really use a bailout. But we all understand that no such thing lies on the horizon for us.
Rich 11:27
Well, you’re absolutely right penny. And that’s why Jason has chosen to start us off with a type of self bailout.
Penny 11:34
Yes, he has create your own economic recovery. One of the most common editorial themes in the news media is a consistent search for signs of economic recovery. Every gyration in housing sales or consumer demand is viewed as a possible sign of rejuvenation by those who are desperate for signs of life in the economy. The intense micro analysis that accompanies every release of information from the Bureau of Labor Statistics, or the Bureau of Economic Analysis has consistently missed two key insights. These insights are that a real market recovery cannot happen until more people are able to pay their bills, and that the recent increase in near term spending is being financed by borrowing. key points to remember, real market recoveries only happened when more people can pay their bills. Markets are dynamic, and the only real forces that push them up or down are an increase or decrease in the number of people who supply or demand products and services, with demand being assumed to mean willingness to pay versus simply demanding that something be given to you for nothing. And the way that this dynamic effect works is that people specialize in the area of their job and produce an income that is paid by their employer as compensation for their part in creating a product or service. This income is exchanged for products and services produced by others. In this kind of system, everyone enjoys a higher standard of living than could be created if completely self sufficient for the necessities of life. Many pioneers in the Old West were self sufficient out of necessity. However, their lifestyle is not one that many people are anxious to emulate. This perpetual exchange automatically elevates the best products and services, while diminishing those that are either inferior, cost prohibitive, or not suitable for the current marketplace. However, this exchange only works correctly if people are actually producing something of value to exchange with other people in the marketplace. When a high percentage of people rely on subsidies and entitlements, it skews the marketplace toward those who have political connections, instead of those whose ideas and products are the best in the current marketplace is not producing any discernible growth in people that produce enough to finance their consumption. This is resulting in a marketplace that is manipulated by government policy and moving further away from a real recovery with each passing month. The remnants of free markets are likely to produce some form of recovery over time, but it will be very long and slow incoming. Short term spending that is financed by borrowing does not create wealth. One of the great deficiencies of the Canadian GDP formula is that short term consumption, government investment and net exports spending is added together, but no allowances made for increases or decreases in debt. This means that a massive influx of borrowing that is used to finance large amounts of spending will look like growth when it actually is just a perpetually increasing mountain of debt that has not yet come to the most troublesome form of debt is the public debt that has been racked up by countless countries across the globe. The reason for this is that sovereign nations have the ability to print money as a way of finance They’re spending. These increases in the supply of money have the effect of devaluing all currency already in circulation and driving price inflation or hyperinflation. The current trend of presenting debt financed consumption as legitimate demand is not new, but is currently being done on a scale that was never dreamed of before. This is hurtling the nation on the fast track toward inflation, that will impoverish those who are dependent on the government for subsistence. And, since it is painfully apparent that a market recovery is not currently underway, astute business people must go about creating their own economic recovery. The best way to turn this strategy into a reality is by following three core steps. Number one, create immediate free cash flows. Most opportunities require investment capital, it is difficult, although possible to go from nothing to something all at once, most people need to build a base of capital before they can begin a program of investment. One way that free cash flows can be created is by reducing your spending. This is something that can be done immediately and will have an instant effect. Another method for creating free cash flows is with a small business that you operate in your spare time. In either event, the item of paramount importance is the creating of positive cash flows. Number two, build a reserve fund. One of the worst things that can happen to a person is when they need something and have completely run out of financial resources. This can range from a repair to your home or automobile all the way down to a downturn in your business revenue that forces you to absorb losses until conditions turn around. In either event, it is critical to have a reserve fund liquid capital that can be used to meet unforeseen needs. Many financial planners recommend three to six months of expenses as a personal reserve fund. The exact amount will be unique for each person. But creating and building this fund is a matter of critical importance. Number three, shift your investments towards areas of opportunity that emerged from greater dependence. The economy is currently slipping into a three tiered system, where the bottom is populated by a dependent class that requires government subsistence for the necessities of life, the middle tier of income producers that are squeezed by taxes and inflation, and a wealth owning class who own income generating assets. This will create many opportunities in the areas of basic services such as housing, the population of people who can afford luxury goods is quickly shrinking, and the growing area of opportunity is quickly shifting toward the bottom of the marketplace. astute business people will recognize this trend and act accordingly. This economic prognosis is not particularly optimistic, but remains highly likely if the current economic course is not drastically changed. The good news is that most people still have the opportunity to escape this trap and elevate themselves and their family to the wealth ownership class before the transformation is complete. By successfully implementing these action principles, you will be able to create a life of wealth and prosperity for your family and many subsequent generations of action item. immediately begin adjusting your income, investment and lifestyle strategies in anticipation of a long, slow recovery. Emphasis points create immediate free cash flows. Build a reserve fund that allows you to absorb bumps in the marketplace. shift the focus of your investment program toward the areas of opportunity that will emerge as more people become dependent on the government.
Rich 18:54
The four pillars of wealth. In 1776, Adam Smith published his globally recognized masterpiece entitled The Wealth of Nations that conducted a critical inquiry into the basis and origins of real wealth. The book was primarily written as a rebuttal to the prevailing economic system of mercantilism. Now mercantilism is best described as the system of economic nationalism, where nations believe that global output is static, and monetary wealth is synonymous with physical wealth. Under this system, nation sought to increase the quantity of capital or gold in their possession. The way this goal is accomplished was by restricting trade and imposing tariffs to ensure the capital did not leave the borders of a particular nation. Sound familiar? Well, what Adam Smith rightly noted was that real wealth is not currency or gold. In other words, money, since those things are inanimate and don’t produce anything that’s a value in use. They’re simply a medium of exchange, the value of which is frequently manipulated. By speculators and governments. The way for a nation to increase its true wealth is by maximizing the amount of products and services it controls through productivity improvements and trade. This is the fundamental basis of capitalism, and its validity persists to this day. As we’ve seen, wealth is a term that many refer to, but few truly understand. Most people think about their personal net worth and wealth in terms of money or currency. However, money only represents a medium of exchange for products and services. The fundamental building blocks of these products and services are what constitute real wealth. By placing ourselves directly in control of these building blocks. It creates a layer of immunity against currency manipulation by speculators or governments. these building blocks break down into four pillars of wealth. These pillars are resources, media, banking, and technology. First, let’s talk about resources. Resources represent the physical things that are used to create other products and services. securitized resources are often referred to as commodities. But the pillar of wealth is much more expensive than gold or oil, fundamentally, or resources, something physical that has a limited supply and growing global demand. One way to control resources is by directly owning oil mining, farming or forest product operations. This can be implicitly dangerous since commodity prices are highly volatile, and there may be market gyrations that create extremely difficult business conditions. In addition to this, the capital requirements for directly entering the commodity business can be extremely vast. Most people don’t possess the necessary capital to directly enter the business of controlling resources and investing in stock carries difficulties of its own since company management maybe in competent and market prices can be manipulated. In the most efficient way to control resources is through packaged commodity investing and assets such as rental housing, that are built with basic commodities and rented out to tenants. As the demand for building supplies such as wood, petroleum and concrete increase, it will escalate the replacement costs for new housing. This effect will drive up the value of existing housing and create an opportunity for the owner of packaged commodities to realize profits. action item, control resources by investing in packaged commodities so that the price inflation benefits you by pushing up the replacement cost of similar assets. Now let’s look at the second pillar media. Media represents the ability to broadcast ideas and entertainment to multiple people simultaneously. The power of media comes from two distinct vectors. The first is through influence and the second is from advertising or product revenue. Influence allows you to become a thought leader and shape the outlook of others. By establishing yourself as an expert. It creates a loyal audience of people who are interested in hearing your perspective while shaping their own opinions. influence is extremely useful when you’re attempting to create new business paradigms or carve out a new market niche. revenue from media is typically produced by income from advertisers or from direct sales of products and services. By creating compelling content that attracts an audience you have the opportunity to gain revenue from marketing affiliate partners in exchange for access to that audience. The business model of media is built around compelling content that attracted viewers whom advertisers desired. recent decades have seen seismic changes in media because of the Internet. The channels of audio and video media distribution used to be exclusive property of radio and television networks that were tightly held by a smaller number of companies. The old roadblock to media was access to distribution. But with the advent of blogs, podcasting, and YouTube, it’s now possible for any person to broadcast their ideas and entertainment to an unlimited number of people. The new roadblock to media is acquiring an audience with compelling content. With the friction between people, providers and consumers of content virtually eliminated by the internet. There’s an unprecedented opportunity available for people who can create compelling content that attracts a significant audience. This opportunity exists both in the sphere of influence and an revenue action item. Build a personal media empire by creating newsletters, blogs and podcasts that are dedicated to communicating content on a subject matter where you possess knowledge and experience. Now, the third pillar banking, banking represents the ability of an institution to create loans from deposited funds that exceed the amount of those deposits It’s in accordance with a national required ratio between loan funds and liquid reserves. The way that banks make money with this model is by charging interest on loans and then paying a lower rate of interest on deposits. This spread between the interest rates is what allows the bank to cover its expenses and generate profits. The reason that banking holds such great power and wealth creation is because of its place of prominence in large investment projects. Since most entities do not have sufficient cash reserves to finance projects, such as building new factories, office parks or shopping malls, they must obtain a loan to finance the project. By controlling access to these loans, banks are in a position of extreme power over the creation and preservation of wealth. Unfortunately, this avenue of wealth is not accessible to most people, since banks are highly regulated, and it’s extremely difficult to launch a new banking entity. However, there is an aspect of banking that can be used to the advantage of individual people. That unique aspect is the willingness of banks to offer long term fixed rate loans. These loans are especially powerful when tied to assets such as residential real estate and fixed for a long period like 30 years. The power of fixed rate financing comes from its ability to hedge against inflation. When inflation pushes up interest rates and asset prices, people who finance their assets with fixed rate loans will still experience a fixed interest payment.
Jason Hartman 26:34
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.
Announcer 27:46
This show is produced by the Hartman media company All rights reserved for distribution or publication rights and media interviews, please visit www dot Hartman media.com or email media at Hartman media.com. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax legal real estate or business professional for individualized advice. opinions of guests are their own and the host is acting on behalf of Platt