Do you think politicians like power? It’s an obvious answer. It’s a rhetorical question. Of course they like power! That’s why they’re in the game, right? Politicians want to remain in power. Do you think politicians want to shoot themselves in the foot? Of course not. They want to do things that are going to get them votes. They want to do things that are going to make their constituency happy. And they are sellouts. So let’s understand that. Let’s understand that that is the way of the world and let’s be clear that it’s not likely to change. Ever. That’s just the way the human race is. We have fallen.
And so since they like to stay in power, what are they going to do? What actions will they take to keep buying votes? A lot of people often wonder, will they attack real estate? Will they take this benefit away? Try to introduce more regulation? Will they take away the punchbowl and this gravy train of awesomeness that we call income property investing? Will they do that? No. They won’t. Last week, Jason explained on The Creating Wealth Show exactly why they will do whatever they can to preserve the sacred cow known as the real estate industry.
An article from Real Trends says the real estate industry accounted for 16.9% of the Gross Domestic Product in 2021. The National Association of REALTORS estimates that each home sale on average generated $113,000 of economic impact. Wow! What other industry, for every transaction, generates $113,000 to the bottom line? And the way a politician looks at the bottom line is the way an economist looks at the bottom line: GDP – the size and growth of the economy. This is absolutely staggering and nobody is going to want to stand in the way of this because it would literally be a career killer for a politician.
The article continues: it says the real estate industry was responsible for 3.9 trillion or nearly 17% of national GDP. So what is included in NAR’s nationwide median home sale economic impact estimate of $113,000? What are those things contributing to this number? Commissions, real estate agents, lenders, mortgage people, title companies, escrow companies, fees, moving expenses, expenditures related to the home purchase, new home construction and the list goes on.
The Bottom Line = Gross Domestic Product
This is why real estate is a golden goose, a sacred cow or whatever metaphor you want. Now, the states that had the largest income generated per home sale in 2021 included Hawaii $306,000, the District of Columbia $280,000, the Socialist Republic of California $247,000, Massachusetts $192,000, Washington State $188,000. But compared to what, right? At the other end of the spectrum you’ll find Arkansas $62,800, West Virginia $67,900, Oklahoma $68,000, etc. But try to think of this as a ratio instead of just thinking in dollars in order to answer life’s most important question: “compared to what?” Percentages and ratios help us answer that question. So as a ratio, Hawaii, California, Massachusetts, etc. did not generate as much income for the GDP, so the ratio is actually higher in lower price linear markets. Last year, 6.12 million existing homes were sold, and an estimated 761,000 new homes were sold. No one is going to risk their political career by not supporting this sacred cow, this golden goose that is the real estate industry.
Align Your Interests
So whenever you can, align your interest with the most powerful forces the human race has ever known: governments and central banks. And you might say – Jason, the central bank isn’t political. Wrong. The central bank is most definitely political, even though they say they’re not.
Another possible reason to leave the Socialist Republic of California that Jason wanted to share with you on this episode of The Creating Wealth Show was an article he read about the possibility of debt collectors going after your IRAs. And the answer to this question was “assets are fully protected from creditors in both types of retirement accounts. But in California, creditors may come after any IRA assets not deemed necessary for living expenses. They may also come after any distributions you take from your IRA.” Wow, that’s pretty scary. Remember, this stuff varies state by state and generally speaking, left leaning states offer less protection for you. But in California, some judge is going to make a decision on whether or not this amount of money is deemed necessary for your living expenses.
Protect Your Assets
You must engage in asset protection strategies before it’s too late. Go to our website and reach out to our investment counselors. For more on asset protection, go to Jason hartman.com/protect and check out a free web class with our lawyer and educate yourself. You can’t afford not to!
Ashley & The Jason Hartman Team
