Jason Hartman brings on Rabbi Evan Moffic back to the show. They discuss Joe Biden’s plan to revive anti-discrimination policies at the federal level. If this plan goes through, we will likely see benefits for real estate investors.
Investor Testimony 0:00
Thanks for your support. Jason, I appreciate your support and your whole network. And it’s really been very beneficial to me and, and a whole lot of others. I encourage everyone to use your resources that you have. But thanks.
Investor Testimony 0:10
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate estate investors.
Jason Hartman 1:03
Welcome to Episode 1404 1404. And I’ve got the rabbi back with me today. I guess you’re my favorite Rabbi now, Evan Moffitt, our client and guy who’s on the show more and more, because he’s just interested in everything like I am. You’re, you’re, you’re like a renaissance rabbi. Well, yeah, I mean,
Evan Moffic 1:25
that’s one of the reasons I love being a rabbi is you kind of you can be a generalist, you kind of have to know a lot about everything. Yeah. Unfortunately, you don’t have to know a lot about any particular thing. So you don’t have
Evan Moffic 1:37
Evan Moffic 1:39
I can indulge my fancy.
Jason Hartman 1:42
Well, you know, they used to call that shallow but I don’t think you’re shallow. You’re pretty intellectual guy. And that’s why I like having me on. He. So this proposal by Joe Biden is interesting. This is actually really quite interesting for real estate investors, because I think you know what he wants to do. Listen, well, basically, I guess the context is and then you can fill in the details. Okay? The context is that Joe Biden, like most left the democrats are he’s exploiting class MD. He’s claiming that there’s racial bias in a place that probably nobody’s considered. There’s racial bias appraisals. He says that home appraisals are racist. Okay, so is he right? That’s one question or is he wrong? And the other thing is, what does it mean to you as a real estate investor? Now, I think there’s a hidden benefit in this. So whether I like a system or not, I’m going to try and align my interest with the powers that be with a system that’s there. So I can benefit and that’s what I want all of you listeners to do as well. Joe Biden, I think a lot of times he’s just off you know, out of his off his rocker okay. And he had a recent thing about that, that he said something another one of his crazy inappropriate remarks, right?
Evan Moffic 3:05
Yeah. He said, he said, I’m Joe Biden. I’m running for Senate.
Jason Hartman 3:11
He doesn’t even know he’s running for president. Okay, good. Well, I think this idea of his though, has a hidden benefit for real estate investors. Maybe a big one. So listen up, folks, you’re you might like this. I don’t know. You know, we’ll see in regardless of whether, I mean, I don’t think Biden has a chance at becoming president, but he did just have a good one in South Carolina. But these ideas get out into the ether, right? And they might have legs with another candidate, okay. You know, or they might come back in two years or four years in the next election cycle. So Biden or not, the idea is out there in the marketplace now. So Evan, let’s talk more about the idea Felicity
Evan Moffic 3:58
interesting thing. So What Biden wants to do is to have a what what he’s pointed out is that appraisals in certain neighborhoods, often African and ones where there is a primarily populated by African American households, that they tend to have lower appraisals for the similar types of property. And he wants to implement kind of a national appraisal standards and figure out ways to address implicit bias. Now, the very vagueness of the proposal is what presents a problem for me like I base I’m not you know, I’m not a big lefty. But I basically I agree that there are some real problems on this issue.
Jason Hartman 4:37
I mean, look, folks, a Jewish guy who lives in Chicago would tend to lean to the left if I didn’t know Yeah, and so I’m just pointing that out.
Evan Moffic 4:45
Yeah, and I don’t I don’t I say okay, if you do, I still like you know, no, I, we’ve had some good conversation. I creep of socialism and the Democratic Party is just so distressing. But I agree that there is a problem. I think Uh, you know, I have several homes in Memphis and one of them got a low appraisal. And the the seller was convinced. And he presented some pretty good case that the appraisal was terrible. The appraiser refused to change it. And he told me the seller that this appraiser was well known for devaluing homes in predominantly African American neighborhoods, and we got another appraiser to come in and that person appraised it I think, $20,000 higher, which doesn’t really mean anything unless you know, the context, which was about 30% higher than the first appraiser. So I think this is a problem. And I can imagine that this happens in other places, but how do you create a solution to it? I just don’t
Jason Hartman 5:42
what what do you do all this kind of stuff ever leads to is a bunch of lawsuits. That’s what that’s what it is. At the end of the day. Any law is only that it only leads to a couple of things. It either leads to people showing up Your door with guns or people taking your money. And if you don’t give them your money, in other words, a judgment in a court or fined by the government. people show up at your door with guns. Inevitably, that’s what happens. Okay, that’s what it devolves into. So this I can just see massive litigation coming out of this because it’s like a judgment call. I mean, look, the three primary rules of real estate since the beginning of time are what location, location and location. So how can you say that a three bedroom, two bath house in a bad neighborhood should be the same price as a three bedroom, two bath house in a nicer neighborhood. This is
Evan Moffic 6:44
what the article says and this is based on a study from Brookings Institution which is
Jason Hartman 6:49
a conservative think tank right?
Evan Moffic 6:51
Well, their center left their their their their,
Jason Hartman 6:54
their, their, their laptop,
Evan Moffic 7:00
majority African American neighborhoods do exhibit features associated with lower property values, including higher crime rates, longer commute times and less access to high scoring schools and well rated restaurants the researchers wrote, yet these factors only explain roughly half of the undervaluation of homes in such neighborhoods. As a result, owner occupied homes in majority African American neighborhoods are undervalued by $48,000 per home, on average, to the tune of 156 billion in lost value nationwide. This so called quote, segregation tax contribute to the persistent racial wealth gap. Wow. That’s a big numbers. But look, if an area has got higher crime, inferior schools, why wouldn’t it be less expensive? I mean, to a degree to a degree but how how much those factors are contributing to the to the under appraisal is the question. Of course it’ll have some less it’ll be less appraised. I mean, you know, a house in Beverly hills is going to be the same size will be much more than a house in receipt. Right? I mean, it’s, but should it be so much less? I think is the issue, I guess.
Jason Hartman 8:10
I guess I don’t know how you put a number on this. I mean, seriously, this is this this kind of ambiguity is just I can just see that loss. It’s filling the courts are so backed up already. I mean, how would you ever settle this? Now the funny thing is, they say that the, you know, owner occupied homes and majority black neighborhoods are undervalued by $48,000 per home on average, and I’m quoting the article, that’s exactly what I’m reading. Right. But it doesn’t say what the price of that home is. I mean, you know, you need to judge everything by a ratio is I’ve taught our listeners for 15 years now, you got to always look at only the ratio, not the amount because it doesn’t give you any reference points. So is that $100,000 house only $52,000 in the other neighborhood or is it a, you know, $300,000 house that’s, you know, $252,000? I mean, I don’t know what the reference point is. Hmm.
Evan Moffic 9:14
Yeah. Interesting, another low around in the study. It says that one of the critics of this proposal said that the study itself was based on valuations from Zillow, and not from human
Jason Hartman 9:26
God. But we know the problems with Zillow if you’re if you’re going to depend on Zillow, you’re already messed up. Right? Well, I mean,
Evan Moffic 9:35
I think, you know, being in Chicago, Chicago has a kind of history of pretty bad racial bias and housing. Right. And so I’m sensitive to this issue. It’s kind
Jason Hartman 9:45
of kind of like certain with global warming. You know, I believe there’s, there’s global warming and there are serious environmental issues. The problem that I see is that people aren’t focusing on the solution. People are always talking about the problem. There is a problem and I think there is a problem with Under appraisals, but I don’t think this is the right solution, in some ways, because of what you just said about lawsuits. I wish we could figure out some other way of kind of balancing this problem. But I don’t know, the complexity of the legal theories that would be built in any litigation on this concept would be, it would be absolutely just beyond the beyond in terms of complexity, because it’s very hard to determine what the right answer is on this kind of thing. This is, I mean, the only wait, look at everybody needs to know there are three kinds of appraisals and I’m going to add a fourth. Okay. That’s like my appendix. Okay. To the real. That’s the real appraisal. Okay. Take it out. No, not that appendix like the appendix in a book. Okay. You’re an author. You know what I mean? Not Not my appendix in my body, right? Okay, so there is the comparison approach, right. And that’s the way residential real estate is appraised, it’s appraised based on comparison. So that’s what this concept is addressing. There’s the income approach where the value of the property is determined on a commercial property by the income it produces. Then there’s the cost approach, where the value of the property is determined based on the cost to rebuild it. Okay. And then there’s the fourth appraisal, which is the most accurate appraisal of all, selling the property to a buyer and having the deal actually closed. That’s the ultimate form of appraisal is when a buyer buys the property, okay? That there’s no better appraisal than that because the market decided and someone actually voted with their money. Okay. But the complexity of litigation that would stem out of this would just be absolutely insane. I mean, it would be so complex, I can’t even believe it. You know, Yeah.
Evan Moffic 12:01
Well, as you pointed out towards the beginning, there could be a benefit for this in that home values. Yeah, in areas where perhaps some of our listeners have invested
Jason Hartman 12:12
values big benefit. Yes. So why would they increase in values? Let’s talk about that. So if this kind of thing went into effect, and all the appraisers were afraid of getting sued for discrimination, right, then they would pump the values up in these neighborhoods. And that wouldn’t only have an effect on values in these affected neighborhoods that we’re talking about, that this proposal is attended to address, it would have a knock on effect in all neighborhoods, because then any common sense buyer who drives into the, for lack of a politically correct term that I’ll probably have to use soon, the inferior neighborhood that is now valued for A brief snapshot in time, at the same value, the better neighborhood with a higher test scores and lower crime rate is valued. They would not buy that home, they would buy the home in the nicer neighborhood, okay? And when they do that, it’s going to push more buyers to the nicer neighborhood. And those values are going to go up. So this will this is like raising the minimum wage. It’s it’s pretty much exactly analogous to that.
Evan Moffic 13:26
If you are Jason Hartman listener then yeah, when the value goes up, right away, you refi till you die. You pull you out. Yeah. I mean, wouldn’t you do that?
Jason Hartman 13:35
Absolutely. Absolutely. This will this will cause home prices to go up pretty much across the board, and it will trickle up. Okay, we talked about you know, you’ve heard all about trickle down economics. Well, this will cause Trickle Up economics the same way it works the same way as minimum wage. If you raise the minimum wage to $15 an hour, then every now and Minimum Wage employee gets more money. But then every non minimum wage employee thinks by reference. Well, you know, I’m making $25 an hour. Why should I make $35 an hour now because the minimum wage people get 15 and I’m by you know, I went to college they’ll say, right, and I’m more qualified, I’m not a minimum wage person and I never have been right that’s what they’ll say it to themselves and then their boss, and it trickles right up. Everybody gets a raise. That’s in that’s called inflation. Right there, right? Yeah. Wow. fascinating stuff. If this goes into effect, if if a thing like this ever happens, everybody listening is going to benefit if you’ve been buying properties at Jason Hartman, calm. Okay, shameless self promoter. All right, what’s next seven?
Evan Moffic 14:55
Well, this actually and your hope that’ll be really good for you because you’ll need the Money as you live longer, because you’ll be making more money and you’ll be living longer. Yeah. And he’s got a video right
Jason Hartman 15:06
here. Well, we got we got a little audio clip here we want to play for you now this is from the healthcare triage channel, which is pretty good. And this is about a study. And the speaker did not do the study. He’s just referencing another study. But it shows that wealthier people actually do live longer. And Evan, it’s nothing to sneeze at here. It’s 15 years longer. 15 years, it’s hugely significant. It’s the difference between living to 65 and 80. Okay, it’s a big deal in 15 years. And, and so, so let’s just listen into this stuff. And we’re gonna we’ll, we’ll stop it and have some comments for you.
Evan Moffic 15:52
The life expectancy in the United States 2001 to 2014 Okay, get this, researchers got a hold of 1.4 billion with the be de identified tax records from 1999 to 2014. Then they got ahold of social security numbers for every single American with a social security number between 1999 and 2014. Then we linked them together and use social security death records to create life expectancy tables. So right off, it’s hard to imagine that you could ever have more complete data. This is like nearly every adult American in the United States from 1999 to 2014. They had data on 1,408,287,218 person, your observations for people aged 40 to 76 years of age. The median household earnings among those who worked was just over $61,000. Over the study period, there were 4,114,380 deaths among men
Evan Moffic 16:53
and 2,694,808 deaths among women.
Jason Hartman 16:57
The women always live longer and that’s why they control all All the wealth in the country because there are the men are dead. Okay, like
Evan Moffic 17:03
jokes about that we probably shouldn’t share them. Okay.
Jason Hartman 17:06
There are jokes about it. Yeah, I’m sure there are I don’t know the jokes are referring to But okay, we won’t share. But this is a big study, folks, this is a lot of data. They’re like they’ve got a good sample size here. And this is one of the reasons you’re listening to the show. This is one of the reasons you’re building a big real estate portfolio, so that you can have an expansive life, right. And not only in in breath, but also in length.
Evan Moffic 17:36
There were four main findings to this study. The first was that higher income was associated with the significantly longer life expectancy, the richest 1% of men live at 7.3 years, compared to 72.7 years for the poorest 1% of men. A 15 year difference for women right there.
Jason Hartman 17:54
15 years amazing.
Evan Moffic 17:57
The richest 1% live 18.9 years Compared to 78.8 for the poorest 1%, a difference of 10 years,
Jason Hartman 18:05
so the women will live 10 years longer than men will live 15 years longer if you’ve got some money.
Evan Moffic 18:13
thing to notice that this gap in life expectancy between the rich and the poor has been increasing over time between 2001 and 2014. Life expectancy for the richest 5% of Americans increased 2.3 years for men and 2.9 years for women. But for those in the bottom 5% of income, it only increased 0.3 years for men and 0.04 years for women. The third finding was that life expectancy really differs among low income individuals depending on where you live in the bottom 25% of earners, the United States life expectancy different by as many as 4.5 years depending on local areas. In some places, life expectancy went up more than four years over the study period. In other places it went down more than
Jason Hartman 19:01
I don’t think he says the areas, but I’m guessing that the warmer climates have longer living people.
Evan Moffic 19:08
Right? I would think so. Yeah. It’s so interesting, but I could just see you know, we were talking politics earlier I could just see some people on the far left saying isn’t that horrible that you know rich people live longer they literally are are taking life away but the truth is life expectancy has gone up from for everybody over the last hundred years by so much it’s kind of like trickle down Yes, the rich are getting richer, but the poor the quality of life for people in the lower you know, 50% has gone up tremendously. So
Jason Hartman 19:39
the poor the poor are getting richer, too. I mean, you know, look, every the rising tide is floating all the ships now. It is, though, there’s a caveat to that. Okay. It’s floating the rich ship a lot more like exponentially more. Okay. But it is floating all the ships okay. There’s no question about that because it like I always say you watch old movies and TV shows, and you can witness a depiction of poverty. In the old days. It was really poverty. It’s not like what you think of today, okay? Where were poor people have iPhones, okay and and you know, the newest Air Jordan shoes, okay? You know, poverty ain’t what it used to be, at least in the US or really around the world because we have this rising middle class and the rising 3 billion people. So
Evan Moffic 20:32
this is the challenge of capitalism means that capitalism is extraordinary at producing wealth. It just keeps producing wealth keeps raising people’s standard of living. However, the way it distributes that wealth is that it tends to distribute towards the top right, at least the predominant so the rich do get richer in capitalism even even as the poor also get richer but but the percentage flows to the rich Oh, so, in that’s it’s an essential Part of capitalism how that works now how, how then you read redistribute, to, you know, preserve the benefits of capitalism but also address the shortcomings. That’s where our debate should be not about whether we should have capitalism at all, which is where debate seems to be right now,
Evan Moffic 21:16
that life expectancy is associated with a number of health behaviors in the lowest quartile of earners. Smoking, for instance, is a big deal. What’s more surprising, though, is what’s not associated with life expectancy. access to medical care, for instance, was not associated with differences in geographic life expectancy, how much Medicare spent, or the proportion of people with health insurance were not associated with differences in life expectancy. Neither were physical environmental factors, income inequality, or labor market conditions what was associated with improved life expectancy in certain areas, having more immigrants in the area, having more college graduates in the area, having more government expenditures in the area wealthier, more concentrated, urban areas have higher life expectancies, even among the poor. In New York, where regulation of trans fats and smoking is common, and social spending is high. There’s a much higher life expectancy among the poor than, say, the rural West. This isn’t to say that
Jason Hartman 22:14
health insurance there really does surprise me and I’m trying to figure out what that wrinkle might be in that because I honestly kind of don’t believe it. What he just said, it doesn’t really seem to make sense. But I, you know, it, it strikes me that in a city like New York, you’re just not going to be as healthy as you are in a more rural area. But I don’t know, you know, see that the problem is, you know, this isn’t adjusted for probably accidental deaths, farming accidents, manufacturing accidents, it probably isn’t adjusted for that. And so if you have someone that works in manufacturing or on a farm or In construction, or is a lumberjack who dies at the age of 26. Right? because of an accident that really skews the numbers like crazy, even though there aren’t many of those, but sadly there are some of them. I don’t know that it’s just sort of doesn’t strike me is
Evan Moffic 23:18
is a leak cities like New York, you’ve got people who walk a lot. So they’re getting a lot of exercise. That’s true, but they’re also breathing a lot of exhaust. That’s true. That’s true, but you got access to healthier foods, you’ve got better health care systems, you know, maybe it balances. Yeah,
Jason Hartman 23:33
yeah, I know. It’s kind of weird. Yeah.
Evan Moffic 23:35
Okay. I’m important. They surely are. But when we’re talking about life expectancy, and population health, it’s important to realize that many other things more in a public health level may make a much bigger difference. Want to make everyone live longer, pay attention to those
Jason Hartman 23:50
things. Very interesting. That’s healthcare triage on YouTube. Alright.
Evan Moffic 23:56
Well, do you think Jason that there is a limit You’ve done shows on on survival and like it was the biohacking
Jason Hartman 24:04
my longevity and biohacking show. Yeah.
Evan Moffic 24:07
Is there an upper limit? Of course there is an upper limit on how long we can live. But But what
Jason Hartman 24:12
is that limit there? There seems to be so far, because it’s it seems to be mostly about the telomeres and the cell replication problem. And what happens is, as we age, our cells essentially become less functional, and and they become damaged by free radicals and so forth. And they need to duplicate. The cells need to replicate themselves. And that’s what keeps us young, right? That’s why young people, you know, they they look better, their cells turn over faster, they shed their skin faster, they grow hair faster, they’re just more vibrant, because the cells just work better. So the health of your body is really the head health of your cells. So the problem is, as we age, the cells don’t replicate as well, or they go into extreme replication mode. And that equals cancer when they replicate too much. So there’s this balance that needs to be achieved. And you know, so far knock on wood, they have not figured that out. But there’s a lot of promising technology that shows we’re on the verge of this stuff. And one of the interesting things and maybe, you know, it would seem to tie in to income and overall wealth. That’s why you’re listening to this show to create wealth, is that when you simply keep yourself from dying, you actually can live pretty long. You know, a lot of people can live, you know, 8090 100 years, if they just will stop dying. And here’s what I mean by that. It sounds sort of snarky, right and It is a little, it’s meant to be a little snarky, but just don’t get cancer, don’t get heart disease, and don’t have an accident. And if you if you can avoid those, like those three things, you can actually live pretty long. Just stop dying, you know, stop dying in early death from those things. So, eat good food, get some exercise, you know, cut down on the meat have more vegetables every time you sit down at a meal, and you look at your plate, just look at that plate for a second and think is this plate at least two thirds vegetables is a two thirds plants and only one third animal products. And you know you’re going to be pretty good if you do that.
Evan Moffic 26:46
It’s good. I just visited with a member of my synagogue that’s 98 years old. And she was just we had the most wonderful conversation totally with it totally engaging. mean it’s possible. Yeah.
Jason Hartman 26:57
Sure is no question about it. And all the The other thing I meant to say, you know, besides the obvious is, and this is obvious, but some drink more water. Oh my god, it’s like the whole country is walking around in de dehydrated state, but you gotta drink more water that’s the best biohack of all. If you don’t flush your system, all kinds of toxins are building up inside you. You’ve got to drink more water.
Evan Moffic 27:23
Tons every morning I drink you know a liter of water. Yeah, first
Jason Hartman 27:27
you gotta you gotta drink more water. Water is water, right after oxygen. Water is life. Okay. All right. Let’s wrap it up. And I think we’re good for today. Folks, if you want to learn more about creating wealth, go to Jason hartman.com or call us at one 800 Hartmann and until tomorrow, happy investing. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes, be sure to check out the show’s specific website. And our General website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.