Welcome Empowered Investors! Jason is back from another live event where he shared the latest real estate market statistics with the knowledge hungry crowds, eager to learn his strategies and hear his predictions! Jason sat down with another speaker at this event, Joseph Wang, aka The Fed Guy, for Episode 1861 of The Creating Wealth Show for an intriguing interview on the Federal Reserve. Who better to talk about the inner workings of the Federal Reserve than someone who actually worked there? Joseph Wang is a former senior trader on the open markets desk at the Federal Reserve and the author of Central Banking 101. Jason asks him the single most important question on the minds of income property investors: will mortgage rates go even higher? Check out this great episode here!
Jason spoke at the Rebel Capitalist Live event in Miami last weekend. Now, If you compare an event such as this to an event like the G7 Summit, you can easily see the difference; the people at events like RCL want to empower you, make you a better investor, make you richer, and they want to help you get financially free. The world leaders attending the G7 Summit want to destroy the value of your savings, your stocks, your bonds, your mutual funds, and even your equity in real estate by devaluing their currencies. Whenever there is an economic crisis and the G7 meets, their ultimate conclusion of how to deal with the problems is to print more money, do more quantitative easing and devalue all the existing currency in circulation already in the hands of the people through inflation. These elites are oppressing the world. Perhaps not all of them have that intention, maybe some of them are actually good hearted, but we can only judge them on the result of their actions. The proof is in the pudding… Just take the case of Justin Trudeau from Canada. We all saw what he did with the truckers by quashing their protests, closing their bank accounts, and trying to get their trucks repossessed. That is a very high level of oppression and is so anti-democratic in every single way, sadly.
The Math of Real Estate
But that’s why Jason and others like him are here and want to make you financially free and empower you to make things happen for yourself. Jason’s speech on Saturday centered around mortgage sensitivity. We’ve all seen these really sharp rate increases and a lot of people are freaking out, but you have to get out your calculators and do some math – the math of real estate: understanding negative interest rates and real interest rates. And we still have very, very substantial negative interest rates! Even though the mortgage rates are higher, you’re still getting paid a huge amount of money to borrow. Think about this: if mortgage rates were 4% or 3%, you would probably think they’re a great deal being so low and that you should borrow as much as you can. At the same time, if the inflation rate was 2%, how would you feel? Well, most people would probably feel pretty good because they don’t get it. They don’t know how to do math.
Currently, we have negative interest rates and here’s why. The official rate of inflation is at about 8.6%. You can borrow at about 5.5 – 6% depending on the type of loan you get. Of course investors will pay a little bit more, but with this typical mortgage rate, millions of people are getting paid to borrow money. But think about it: if the interest rate was 3% and the inflation rate was 2%, the unaware people, the low information investors would think they’re getting a bargain. Yet they would actually be paying higher than the inflation rate to borrow the money. Right now, they’re paying below the inflation rate to borrow the money.
Even Jason is still buying properties in this environment. Is he crazy? No way! He just closed a deal two weeks ago and he’s totally fine building his portfolio right here, right now. It’s an amazing time to be alive if you know how to do the math. People think mortgage rates are now getting too high, but the truth is that they are still below inflation levels, official and unofficial!
Ashley & The Jason Hartman Team
