Jason Hartman interviews with returning guest, now client, Naresh. The two discuss Naresh’s journey in buying his first income property and why he is now leaning away from investing in unreliable, speculative investments like stock, cryptocurrencies, and precious metals. He has purchased his first income property and is in the process of his second income property purchase while he rents his current apartment in Florida.
The two also discuss the portability of today’s society, as well as the rise of the sharing economy. Hartman delved into the different methods of sharing in our economy and the impact it has had on the way we live. He also explored the value of the American dollar with Naresh, and Naresh shares a story about a robbery that took place during his recent trip to Columbia.
Getting Started
Before covering the chosen topics at hand, Hartman reminds listeners to finish up their submissions for the 5-Year Plan contest, because it is coming to a close around Christmas, and at that time, there will be no more entries permitted. For more information about the contest, visit www.jasonhartman.com/contest.
Hartman asks Naresh about his plan, why he’s decided to step into income properties, and why he is renting an apartment in the Tampa Bay area, even though most young people pursuing marriage feel it necessary to buy a family home.
How Hartman and Naresh Met
Naresh explains that he has listened to Hartman for years, and because he lives in Florida, he is in the middle of a good housing market. He notes that the properties are too expensive to invest or purchase in the area. A friend of his purchased a waterfront penthouse in the Tampa Bay area for $600,000 and Naresh points out that buying a place like that was not in his best interest, nor was investing being that renting it out wouldn’t bring in enough money to make the investment wise.
Naresh explains that he went to Duke University to complete his master’s degree, and attended Syracuse University for his undergrad credits. He is also well-networked and has authored several books.
Hartman mentions that Naresh has been on the podcast several times in the past, and that he books guests for the episodes, amongst other things. Moneyball Economist and upcoming Meet the Masters speaker Andrew Zatlin dubbed Naresh “the fixer,” being that he finds ways to assist with different needs and issues.
Naresh points out that he is not interested in finding another corporate day job. He recalls the time he worked with Stansbury’s radio network five or six years ago, and speaking with Hartman for the first time over the phone. Naresh was the first person with Stansbury to return Hartman’s correspondence. Hartman told him about his company and how he stepped away from the confines of a physical office and went virtual in 2012. He mentioned his financial freedom and his ability to travel and have fun.
Hartman explains that he felt like a facilities manager when he worked in a physical office, because he had several employees to oversee as well as taking care of any issues that were related to the office. He gives an example of a pipe bursting on the floor above his and the ensuing flood having a negative impact on his business. Offices were a distraction, so he decided to go virtual.
Portable Society and Sharing Economy
He relates this to the portability of today’s society and the rise of the sharing economy. Because of that, people can live anywhere they want in this day and age. It’s not about physical space anymore. It’s more important to consider the power of the network we have. Hartman offers resources to his clients, rather than dazzling them with a big, shiny office space.
He points out that in his personal household, all of his stuff has gotten smaller and more portable. As an audiophile, he has noticed that in years past, he used to have much larger equipment and speakers to listen to his music, and now everything has gotten smaller and easier to pick up if he needs to move. Nothing is significant, and it all fits into a small space if needed.
This goes right along with the concept of the rise of the sharing economy. Everyone used to have to own a bike or a car, and now there are bike stands available to rent bicycles to use. Also popular in places like Austin, Texas, is the availability of smart car rental. Hartman explains that it’s easy now to rent a car, perform errands, and then leave the vehicle in a parking space whenever you’ve finished so that the next person in line can rent the car.
Naresh states that he didn’t know anything about the rise of the sharing economy six years ago. He was surprised when Hartman got rid of his office and was still the CEO of eight different businesses. Naresh explains that he was trained to go to school and get one job throughout his entire life, but he saw that Hartman was living the dream. It opened Naresh’s eyes and he purchased his first income property a few months ago, with the second income property currently under contract.
Hartman states that the message he’s trying to explain is that many of us have old ideas. The world is constantly changing, and sometimes we don’t realize it. Hartman mentions that he has a lot of friends in the younger side of the baby boomer era that have an old-fashioned way of thinking. They still hold onto the idea of space and status that nobody else cares about anymore. People are still talking about old paradigms that don’t work in our society today.
He gives the example of the college degree paradigm. Naresh states that though he went to an expensive school and spent a good deal of time pursuing his degree, college can be a waste of time and present no real value when it comes to business. He hopes, however, that the college world will be different when his future children attend college.
Naresh’s Change in Investing
Naresh states that he has been investing for the past ten years, and that his journey started with the stock market. It’s the norm for people who have money to experiment with. He started trading stocks around the time of the financial crisis. Afterward, he was introduced to gold, silver, and other precious metals. Eventually, he started listening to Hartman’s podcasts, met with him, and has been a client of his for the past six months. He states that he sleeps better at night with his real estate investments than he ever has with other forms of investment.
Real estate has better returns than what he’d receive with a CD or savings plan, he says.
Naresh explains that in the education system, finance professors never talk about investing in real estate. Throughout his time in college, he didn’t learn about the benefits of real estate investment. It wasn’t until he started listening to Hartman that real estate became an option to consider. It took three years for the concept to become something he was interested in pursuing.
He states that real estate makes sense, unlike other forms of investment. He gives an example of having $100,000 and putting it on a CD at 2%. It would only generate $200 per month in income. Stock is also unreliable as the market could crash or have unpredicted ups and downs. Cryptocurrencies are just as unreliable at the end of the day.
Hartman points out the stress level presented to people who speculate on stock, cryptocurrencies, and cyclical markets, rather than investing in real estate. The potential is always there to lose a great deal of money and it could very well lead to the development of Post Traumatic Stress Disorder.
Something for Nothing?
Hartman explains that it’s part of human nature to want something for nothing. It isn’t a bad thing, but that kind of thinking could lead to trouble. It’s dishonest to ourselves to wait for our ship to come in rather than swimming out to meet it.
He states that it’s a gamble to speculate on unreliable markets, not calling stocks and cryptocurrencies an “investment” because it is only speculation, and there is always something to lose.
The cryptocurrency bubble is becoming bigger and more dangerous all the time. It continues to become a more serious disaster even as it grows. It requires too much power to process a Bitcoin transaction, as it is fake work that brings about real environmental destruction.
Hartman predicts that the cryptocurrency system will cave in on itself, as the weight of processing a transaction takes enough energy to run a home for a week. It is not a sustainable system, and mining these coins to use in transactions consumes even more energy. It’s what Hartman calls a “tulip bulb mania”.
Naresh and Linear Market Investments
Naresh bought his investment properties in Memphis, Tennessee, part of the steady linear market. He has steered clear of cyclical up-and-down markets of the Los Angeles and San Diego areas.
He states that he has matured and learned a great deal about investment. He enjoys knowing how much cash flow he is going to bring in each month. Even during a housing drop, he is safe in the linear market. As long as his tenants pay their rent, he’s happy and doing well. Bought his properties in Memphis, linear market. Naresh.
The Trip to Columbia
Hartman states that there are people that believe the US dollar is not backed by anything, yet they feed into the concept of Cryptocurrency, something truly not backed by any sort of value system.
The dollar has intrinsic value, and is backed by history, a large and powerful military, and the American brand. There isn’t anything bigger than the United States brand in our world today, Hartman says.
Naresh recently took a trip to Columbia and learned about the value of the US dollar from personal experience.
Naresh took a trip to Columbia in South America and found himself somewhat disappointed in the area. He has several friends visit the area and they made a big deal about how lovely the land was, how beautiful the women were, how good the food and parties were, and the low cost of everything. Naresh started the trip with high expectations, but found that he enjoyed his home in Florida just as well.
During his trip, there were tour guides that traveled with the group to ensure their safety and provide direction. These guides warned the guests ahead of time that the US dollar holds a great deal of value in Columbia as well as the entirety of South America.
One of the travelers were robbed during the tip, and all that he had stolen were his American dollars. There was over 50,000 pesos in his wallet, the wallet itself, and electronics that were available to steal, but the thieves only made off with roughly $15 US dollars. The guest’s wallet and other personal belongings were left untouched and the man was not harmed.
This says a lot for the value of the American dollar.
