Turn your castle into a kingdom! This is one of Jason’s fantastic old ads. With this message, he wanted to make sure that every asset you have is working as hard as possible for you and this still holds true. A hidden asset that everyone has in their house is equity, but as a metric, the return on equity can be misleading. It doesn’t really have a return which is easy to discern by asking how much did I get back vs how much I invested. Real estate is different than other investments which require you to pay 100% down. You might put in 20%, then the bank puts in the rest. As a result, your equity position is lower and you get the benefit of leverage and inflation induced debt destruction. However, just considering leverage alone, it’s pretty powerful because you’ve only put in one fifth of the cost, but you get the return on the whole deal. The less equity you have, the higher the return. The more equity you have, the lower the return. The investment will work harder for us with less equity. See why education is so important? Low information investors leave equity sitting around!
Your Home Is Your Castle
Jason wants you to notice that you receive a 1099 for your other investments because you got a return on something. There is no 1099 saying: this is your return on equity. Why? The home would have appreciated or depreciated regardless of your equity position, so the lower the equity position, the better return on investment. So when you turn your castle into a kingdom, you take that equity, or the equity in your other rental properties and you strip it out and you use it to buy more common sense properties through debt leverage. Of course, debt needs to be used responsibly, but it’s a very powerful tool.
Those who have saved money and delayed gratification are getting largely ripped off by inflation. But this is the world in which we are living, so we must do the best we can to game the system in order to win in the current environment and leverage is your best bet.
In sixth grade, as undoubtedly many of you did, Jason studied Ancient Egypt and went to study the King Tut exhibit in LA and was fascinated by the mystery of it all. But regardless of who built the pyramids, they most likely used leverage to build it. It’s an incredible tool. The great mathematician and philosopher Archimedes said: give me a lever long enough and a fulcrum on which to place it and I will move the entire world. With enough leverage, you can move anything! You can move 16 tonne rocks to build a pyramid, or you can leverage debt and that’s why our investment returns are so high with income property. So Jason encourages you, if you have equity sitting around, let him and his team help you leverage it. You’ll still have the same amount of equity, it will just be diversified more prudently into multiple properties instead of all in one place.
Your Castle Is Your Kingdom
So by now, you get the message: turn your castle into an entire kingdom by using the equity that might be sitting in your personal residence or in your rental properties. But where do I start? Jason and his team of experienced investment counselors will do a free portfolio makeover and tell you how to get the highest and best use out of equity and properties, money in a 401K or IRA, money in stock accounts, in bonds, in mutual funds, etc. They will show you how you can get the highest return and the highest and best use for these investments to turn your castle into a kingdom!
Many of you might not even know that you are sitting on a potential kingdom right now. Make sure you are using it; your home will appreciate or depreciate at the same level regardless of the amount of equity in it. Your rental properties will rent for the same amount of money, regardless of the equity you have in the property. So learn more about equity stripping, tax strategies and asset protection with this free web class at JasonHartman.com/protect. Put your equity to work and let it leverage your castle into a kingdom.
Ashley & The Jason Hartman Team
