The Language of Money

The world has come a long way since the days of the short wave radio. Back then you could hear people speaking in other languages while tuning into radio stations from all around the world with your radio. What a notion! No big deal in today’s world though as we do it all the time and today, Jason has one of the longest running podcasts and great listeners from 189 countries, so thank you for listening from all around the world!

The world used to seem like such a vast place, but today quite the opposite is true, even if you haven’t done a lot of traveling. Nowadays, we think nothing of talking to and making deals with people all over the world on a regular basis. Location and geography are less meaningful than they have ever been in human history, as Jason has been saying for the last nine years.

So, how does that impact an asset class which has that old saying: what are the three most important things about real estate? Location, location, location. Well, not anymore. Now, counterintuitively, the better location is not to be in the places that used to be considered well located! Things change over time, but linear markets hold true as being much more successful over the long run. Take the case of Florida for instance; it’s doing so many things right to attract businesses and people, and people are moving there in droves – a good lesson for us real estate investors to consider.

Speaking of lessons, Jason is very grateful for all the things that you, his readers, listeners and clients teach him. One of the Empowered Investor Inner Circle members asked an important question recently about Jason’s brand new Hartman Comparison Index™ which values real estate by asking life’s most important question: compared to what? For example, we cannot just assume that something is expensive without first asking ourselves: expensive compared to what? Most people have a huge blind spot because they are only comparing the value of housing or real estate to one thing: the US dollar. That is a huge mistake, especially in an era when the dollar is losing value so quickly.

Remember hearing all those different languages from around the world on the short wave radio? Well, think of the dollar as a language. You can say the same thing in many different languages, convey the same meaning and get the same result. However, some languages hold cultures back because they don’t have words to describe certain things. Jason would argue that part of the success of the English speaking world should be attributed to the fact that English is a thief! The English language has stolen words from many other languages. So it’s fair to ask – can you even conceive of something if your language doesn’t have a word or label for it? Can you truly and accurately represent something with the given limitations of a language?

Thinking about the dollar as a language easily exposes its limitations in valuing something. If the dollar is just one limited way to express the value of something (and put simply, that’s what it is), how can we get a complete picture of the true value of something? What if we change language? What if we use a different currency, for example, a commodity? Or many different commodities? Can we more accurately understand the value of something? Well, that’s exactly what the Hartman Comparison Index does. It interprets the value of housing and mortgage payments over time by using other “languages,” aka commodities. Once you start speaking these languages, then and only then, can you finally answer the Jason Hartman question with the confidence of an empowered investor: compared to what?

Ashley & The Jason Hartman Team