Jason Hartman starts the show with Venture Alliance member Carmen in Naples. They discuss the significance of music in society. They also talk about why complaining is actually important and how society benefits from it. Then Jason gives some book recommendations on the economy and real estate. Jason ends the show exploring the current single-family rental demand and what the demographics are looking like for the next 10 years.
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 investors.
Jason Hartman 0:52
Greetings from Naples, Italy, the home of the invention that has changed so many years. lives. Yes, this invention. It’s something that you have definitely. I’m sure everybody listening all our listeners in 165 countries worldwide have taken advantage of this invention. What is this invention? That was invented in 997? ad 997 ad about what’s that? 11 1200 years ago now? It’s hard to calculate. But 997 ad, the invention that changed the world was pizza. Yes, Pizza Pizza here in Naples, Italy. We went to a fantastic pizzeria yesterday last night, waited about an hour to get in. It was excellent. I mean, it was, I think the best pizza I’ve ever had in my life. I’m here with our venture Alliance member and client and friend, Carmen San Diego. Carmen, what do you think about pizza last night?
I agree. That was the best I had
Jason Hartman 2:00
ever, ever and you’re from Venezuela.
I’m from Venezuela, but I, I eat all kinds of foods from everywhere. And it’s great pizza. I
Jason Hartman 2:08
know you’re definitely a foodie. Do they have pizza in Venezuela?
Yes, yes. I mean, there’s a lot of Venezuela. There’s a lot of immigration from everywhere in Europe and a big food culture, there is Italian food.
Jason Hartman 2:20
And you left Venezuela about 19 years ago. And so even under socialism, the heavy hand of socialism and communism, its big, ugly brother communism. They had pizza hut. So pizza has changed. The world hasn’t. Yes, yes. I wonder if they have pizza in North Korea. Hey, folks, did you know that North Korea is sitting on about 6 trillion that’s trillion dollars worth of mineral assets? So remember, Nixon’s historic trip to China back in the early 70s? Well, you know, that was very historic. We all learned about it and well, maybe you didn’t learn about it if you’re a millennial, because you’ve been reading revisionist history. promoted by the government propagandized public school system. But if you’re a little older than a millennial, if you’re a Gen X or like myself, then maybe you studied Nixon’s historic trip to China right when he really opened up China. And I’ve always wondered if Nixon because think about it. In 1971, Nixon took us off. That was the last connection. I don’t want to say he took us off the gold standard. That’s what I was about to say. But it was really the last tethering of the US dollar to gold right, when he totally closed the gold window and made it non exchangeable. And the reason that at least I and many other economists speculate about this is that the government just could not do it anymore. It couldn’t control its spending, and it saw the opportunity to spend more to maintain power, you know, for politicians and competent politicians to give things away. way and give goodies away. And in doing this, they had to break the bond with gold so that they could inflate, inflate, inflate. And of course, as real estate investors, we love inflation because we align our interest. This is my philosophy, of course, we align our interests with the most powerful forces the human race has ever known. Yes, central banks and governments, they are the most powerful forces the human race has ever known. So in doing this, you know, Nixon maybe saw China is this huge bastion of incredibly cheap labor. And he thought, I gotta make a trip to China. We got to open up China, because we must create a marketplace for cheap labor right where they could get cheap labor. And obviously China became the biggest exporter. The workshop of the world right in the US became the biggest customer of China. years later and you could see it If you remember that podcast I did, I don’t know, hundreds and hundreds of episodes ago with Gary, one of our other clients. And he talked about how he had so many trips to China. And now he owns a company in China. He lives in China, and does a lot of business there, of course, and he talked about how, By the mid 80s, you know, just 1415 years after Nixon’s historic trip to China, you could see the Western culture coming in, you know, the music was starting to come into China, the American music, the western music, not just the American music, the British music, certainly to but the western music, right. And I’ve said it before, okay, and I think it was that famous Baron Rothschild quote, Carmen, I repeated this one for you last night. Yes. Yeah. You know, what I’m gonna say about There is, of course, the Rothschilds. They’re the biggest banking family in the world, right? They control the central banking system of planet Earth. Yeah, it’s a minor thing. They’re just slightly involved in banking. This thing This Rothschild family right? So I think it was Baron Rothschild who has the quote that goes something like this. Let me control the money supply the currency, and I care not who makes the laws. Well, the Jason Hartman quote is, let me control the music and I care not who controls the money or the laws, because the music is what changes the world. Think about it. Think about the incredible power of music. Okay, I hate Listen, you know how much I love music. Many of you were at our meet the Masters event last January in La Jolla, California, where we had about 300 people we had Ron Paul is one of our keynote speakers and a whole bunch of other great speakers. And of course, what did I do for the first time? Well, we hired a journey cover band and we had music. We had a concert. Next time we do a concert. I figured out one more thing you know, I’m very picky about acoustics. I like the sound to be right. I realized that the one lesson we need to fix our next time we do music is we need Drum enclosure, yes, because you can mix the sound better. But it wasn’t bad. It was a lot of fun. And so music really has a huge influence think about the impact of Elvis Presley and the Beatles, and all of the other music that changed the world. So that change happened in the 50s and the 60s and even into the 70s. And look how nice and polite if you will, the music was in the 70s right? It was this romantical music. I know, I made up my own words. romantical Actually, I didn’t make that word up. My ex girlfriend Hillary did and she used to say, Oh, I love it when you’re romantical so I thought it was pretty cute word. Anyway, the music was very romantical think about the 70s music right? It was this wonderfully romantic music and then by about 1990 that my friend Rick calls the peak of civilization 1990 right and he may be right about This by the way, and I further expanded on his theory of the peak of civilization concept. All the music became well, for lack of a better word disgusting. And the Seattle grunge movement was popularized by MTV and Sumner Redstone. And then all around the world, you could go all around Planet Earth, to almost every country, right? And I’ve been to 81 countries now I sadly I’m not increasing my country count by because I keep coming back to the same places over and over. I’ve certainly been in Italy many times. And then we just got done sailing on a yacht in Croatia for a week. So I’ve been to Croatia now, three or four times. By the way, Croatia is gorgeous. In fact, a little side note here, Carmen, you have to remind me what I was talking about the music or something like that. Italy is falling apart. Yes. You’ve heard about the pigs, right. You know, Portugal, Italy, Spain, Greece, right collapsing. Interestingly, I would argue that currently is almost more advanced and certainly more up and coming than Italy. And, you know, a lot of this has to do with birth rate and all this kind of stuff, right. But back to the music for a minute because I know I’m gonna forget what I was talking about. So the music, you know, that’s when in 1990s in the early 90s, it’s when all the rap and the hip hop and the, the Seattle grunge music all started, right, this really ugly music. And that just changed the culture and I would argue in a lot of ways, ruin the culture. Okay, we got in the rental car shuttle yesterday after landing here in Naples, in the rental car shuttle, the guy was playing this just degrading, awful American music. You know, this just told, you know, it’s most degrading to women. It’s really degrading to women and law enforcement. Okay, this 1990s era music it started then and is still Certainly even more popular today, sadly, is really degrading to females and law enforcement law in order conceptually, right. Interestingly, though, sadly, people have just bought into it. I don’t know why. But you look at the economies of Europe and look at the economies of the United States and hey, I said it before. I don’t know why it is. I keep coming back here to Europe. I’ve been here twice this year. I was here twice last year. I don’t know. I don’t know. Why do I go? I’m a complainer, right? I’m good. Hey, Carmen. Would you agree that I’m a complainer? Oh my gosh.
We talked about that we won’t finish these buckets.
Jason Hartman 10:40
Okay, so I would say I submit to you listeners complainers change the world. Remember, Gandhi was a complainer Martin Luther King was a complainer. All the great world changers throughout history were complainer’s. They were not satisfied with the status quo. They looked For in pointed out problems with society and, and government and whatever, right, so I’m gonna keep complaining. I’m gonna complain about the unethical scumbags that rip people off. You know, and that’s a great cost to me actually. I mean, I’ve got this troll, you know that I’ve talked about, who is just out there telling lies and lies and lies. This is Charles sells with Platinum investment properties. The guy who I’ve alleged in this lawsuit of running a Ponzi scheme and racketeering, we’ll see where that goes. But more to come. But yeah, hey, listen, you got to be a complainer when you discover someone ripping you off or committing some injustice. You gotta bring it out into the open. It’s just very, very important. That is our duty as citizens to do that. Here is how you sum up. Europe versus America. And remember, I love Europe. I was born here. Okay, I was born here. I’ve spent tons of time here. The Skipper on our boat last week. Remember, sangean?
Yes. What a character,
Jason Hartman 12:02
total character. So we’re on this yacht and Croatia sailing around with a bunch of friends here. We’ve got a siren coming by. There are just things that just were not done. Well, you know, it’s this sort of European mentality of it’s just not like a real ambitious mentality. put it that way. Right. It’s kind of like enjoy life. Here we are in Italy, Lidl beat, you know, the sweet life in the Linson self-indulgence, right? Look at where it’s gotten the country, but hey, Italy has a new government. So maybe things are turning around. We’ll see how it goes back to sangean, our Skipper in Croatia at one point on the journey. Now, this was a week long journey, right? It was seven nights on the boat, almost eight days. And it one time we ran out of water. And Sanjay said as we ran out of water. Do you remember what he said?
I think he said that we use too much water. It wasn’t a problem of refilling the tank right?
Jason Hartman 13:00
Sandrine said, we run out of water, you know, like in a sort of Russian Croatian accent, you know, he says, to too many showers. And I said, too little refilling. Okay, it’s not that we took too many showers. It’s that you did too little refilling of the water. Like, like that. That just sums up the mentality.
Yeah, yeah, it says, You know, I think overall, this is a generalization, but these culture adapts to the situation. They don’t look for ways to improve it, right?
Jason Hartman 13:30
Yeah, I would agree that’s a good way to put it right. So sangean or Skipper is too many showers. But the American me I instantly reply back to them, too little refilling of the water, okay. It’s like just this sort of passive, just accept it, rather than improve it concept, which just drives me crazy. I don’t know. You’re probably all saying Jason. Chill out, dude. You’re too In terms, I don’t know, maybe, maybe not, but complainer’s change the world. Okay with that in mind, let’s talk about demographics and how they influence the rental housing market. But before we do that, let’s take a listener question. This is a good question about the two basic schools of economic thought it comes from my Garrett camp. And Austrian versus Keynesian economics, right? These are the two diametrically opposed points of view in the economy. Okay, as to how the economy should be managed in the Austrian School methodology or the Keynesian School of Economics. Carmen, what does he say? This is Garrett camp, right?
Yeah, so Gary’s question is, I am interested in the economic side of real estate investing. I do not know where to start to get a better understanding of how everything works, including monetary policy against yen and Austrian economic thought and the impact of federal Reserve decisions. I was wondering if you had a couple of good books to help me start painting a better picture of what this economic environment looks like, and what are the important factors at play that I need to pay attention to thank you for your interesting show, and for piquing my interest in real estate investing,
Jason Hartman 15:21
thank you, Garrett for the question. Good books. Gosh, there are so so many. Let me see if I can even remember some of these books. Of course, you’ve got to read the creature from Jekyll Island by G. Edward Griffin. He’s been on the show many times. Also, Niall Ferguson, or Neil Ferguson. I guess it’s spelled like Niall. But it’s, he says, Neil, whenever I hear him interviewed, and I want to get him on the show. He’s really written some brilliant books. I think what was the name of that book, I think it’s called the history of money. And interestingly, by the way, a lot of you, including myself, I own four properties in Memphis, and many of you listening on many, many properties in Memphis many more than me, because you’ve been buying there. He starts off the book, The history of money. I think it’s called the history of money, talking about Memphis and how people would during the housing crisis, just walk away from their houses, and they just didn’t care. But hey, that wasn’t unique to Memphis as we saw. I mean, that was everywhere. In America, people were just everywhere around the world, people were just walking away from their properties and saying to the lender, you know, that’s the business deal we struck. The deal is, I either pay the mortgage or I give you the collateral here, you overvalued the collateral, because you didn’t put any safeguards in appraising the properties. And you ramped up the bubble. Remember that famous article, I think, was a Rolling Stone magazine. Oddly, Goldman Sachs, the giant bubble machine and it just talks about we’ve talked about on the show many times over the years about how the, the whole banking system this is kind of conspiratorial is basically set up to create these waves and bubbles in the economy and How the big institutions like Goldman Sachs, and the powers that be in general, basically profit from this in a giant, giant way, because what they do is they create the bubbles in the economies throughout history, right? And they overvalued, they get the assets all ramped up and overvalued, and all of the middle class people, you and I, right, upper middle class, lower middle class, middle, middle class, whatever we come in, and we buy up all these assets. As you know, you look at this visualize right now a graph, a graph that looks like a roller coaster, as these cycles occur in the economy. The prices are bid up, the prices are going up, up, up, up, up, you know, the roller coaster, you’re being pulled up up the hill, and then as you get to the top and it’s about to go down really fast, right. So these cycles are created by the powers that be so what they do is they benefit from the evil Increase in asset values, because they’re financing all those credit based assets like real estate. And then all of the lesson formed money that’s, you know, the middle class, right? goes in, they buy up all these assets because they get the fear of loss. It’s like if we don’t buy a house now, we’ll never be able to afford it. We’ll never be able to get in, we might be left out forever. This is what the first time buyers thinking. So they go in, they buy up the assets, and then the assets ultimately crash. And guess what all of their credit is damaged. And then all of the lenders in the banking system are able to stick them with much higher fees the next time around during the next cycle. And usually people feel guilty about it. They just feel like oh, they’re bad people. You know, they weren’t careful enough, or they didn’t pay their bills, but the reality is that the system screwed them. This is a much bigger issue than just an individual’s issue here. Okay, so I don’t know if I’m explaining as well as I have before, but we’ve certainly talked about it over the years. But other books gosh, you know, this is not a book about economics per se, but it is about economics also. And it is really fantastic. It’s really good. And I, oddly am going to tell you that our former president, comrade Obama, Yes, Comrade Obama, the communist. He recommends this book and I’m gonna recommend it too. I believe the author’s name was like Yuval Harare. I’ve recommended it before on the show. But it is so interesting. It’s, it’s called sapiens, a brief history of humanity or something like that. Really, really good. He talks a lot about economics, but he talks about everything, I think is a brief history. The human race is what the subtitle is. And so that one is quite good, but understand That’s coming from a very left wing perspective. But it’s a great book I, you know, I listened, I listened to in digest media of all types from all political spectrums, because if nothing else, I want to know what the devil is saying if the worst, but at the best, you know some of these people have some really good points, okay. And I’m not closed minded to their ideas or anything. I think there are a lot of good ideas on both sides of the political spectrum. But at the end of the day, the left is a failure. And it’s just documented throughout history. There is no place on earth. And there is no time in history where the concept of big intrusive, high taxing government burden has made life better for people. It always makes life worse. look at Europe, and it’s it’s a poster child. Look at Detroit, a poster child for leftist disaster. It’s just reality folks. Have a You know, and I know you’re here it comes here comes the hate mail from the socialists, who are the intolerant ones who don’t want to listen to any other ideas. But let me see. Ah, gosh, other books. Oh, and of course, you should read the books by Ron Paul. Okay, former guest on the show presidential candidate a couple of times, and speaker at our meet the Masters event, but I want to recommend another book to men and women. Now, I would say that about 65 to 70% of our audience is male. And this is a book though that it is very important for women to read, especially women, okay, but men should read it too or get the audiobook I listened to the audio book recently. It’s called men on strike. And the subtitle is why men are boycotting marriage, fatherhood and the American dream and why it matters. And this is by Helen Smith, PhD. fascinating facts Fascinating, and really quite sad in many ways, but it really addresses a lot of the changing demographics that affect real estate investors. So I think that is a very important book because that trend has been existing for many, many years. And it is very important that everyone read that book. I’ll see if I can get her on the show. Maybe we’ll make that a 10th episode show where we talk about non financial topics, but that certainly affects real estate investors. I mean, think about it. You know, there is a school of thought that believes that the big corporatocracy, the all of the corporations out there have really tried to make divorce popular, and they’ve tried to destroy the nuclear family concept, because it’s more profitable for them. Hey, look, it’s better to need two houses than one right for them, that’s better for business if they can People aren’t married. And everybody’s single like yours truly. Who doesn’t want to be single, by the way? Very much. Um, oh, we have a comment from the peanut gallery here. No, Carmen doesn’t want to comment. But she’s nodding her head here or something. I don’t know which way she was nodding her head yes or no, I’m not quite sure.
Jason Hartman 23:21
Look, you can double the size of your market. Look at the s&p 500 index of that index. About 72% of it is consumption. Okay, American consumption. Think about it. If you have half the market, that’s going to go down significantly to what 35% or something like that, right. If you double the size of the market, that means more business for big corporations. Everybody instead of needing one microwave oven, they need to instead of needing one house they need to instead of needing one sofa they need to. Everything is dumped. When everybody’s single, right, if people are married, they share stuff. So if you want to double the size of the consumer market, I look at, if you’re married, you only need one set of plates. If you’re single, you need two set of plates, right? Why don’t each household you need to have everything, certainly two cars. I mean, the idea of people not having to cars is kind of crazy nowadays, but in the old days, look for a long time. If you’re running the corporatocracy, and you want to increase the business of the s&p 500, right, have all of these companies in the s&p represented there, and it’s 1950 or 1955. And people typically shared a car, they just have one car, right? You know, how do you increase it? Well, you got to get people separated. You can’t keep them married, right. So these demographics are very important and they are driving housing demand. They have been for decades. This is not a new concept, single family demand. I want to talk about that for a minute and then we’ll wrap it up here today. So us homeownership rates have been declining since 2005. causing a big increase in the renter population. Right? We all know this. We’ve talked about it before. And single family rentals make up about 57% of the total rental market. Now, that’s pretty amazing. Because most people, at least in the old days, and old days I’m talking 10 years ago old days, think of renters is renting apartments, not single family homes. They think, Well, no, if you’re a renter, well, you probably live in an apartment not so much anymore because more than half the renters now live in single family homes. Okay. single family home rentals have increased by 23%. Since Oh, five, okay. And oh five is obviously kind of a key time 13 years ago, because that was the start of the Great Recession. Remember, I’ve told you before, I sold my real estate company my traditional real estate calm To Coldwell Banker, and the deal closed November 11 2005. And everybody said, Jason, your timing is phenomenal. That’s amazing that you did that. And I started in the investor only business about a year before that as I was negotiating the deal with Coldwell Banker. The story is just quickly, I had a big huge cheque coming from the sale of the company. I needed a place to invest it. I started going to all the financial services firms, because I needed to do something quick. As soon as I received that big fat check from Coldwell Banker, I needed to deploy it. And they all told me the same thing. You know, they gave me a little pie charts, modern portfolio theory, blah, blah, blah, you know, and you’re I’m dealing with the high net worth people at Merrill Lynch, Ameriprise, Charles Schwab, all of these financials, some of these like private boutique firms that I went to. I talked to all of them, and they all gave me the same stupid thing, right? small cap, large cap International, blah, blah, blah. like none of them had any original ideas, I was so unimpressed. I thought, What am I doing? I’m a real estate investor. Why am I talking to these people? You know, I got this big giant check coming in from the sale of the company, and I’m gonna put it in the stock market. And then I did put some of it in the stock market because I couldn’t deploy it all that quickly. I remember I walk in one night as they were closing to the Charles Schwab office in Newport Beach, and I’d already had an account there. And I give them a check for a half million dollars. Yeah, $500,000 check. And I’m thinking that this is going to be like, sort of meaningful in some way. And the guy treated it like I was buying an ice cream cone is he didn’t even care. Okay, ice cream cone. Yeah. And you’re laughing Carmen. Why is that?
Because I love ice cream. So I’ll probably say that for
Jason Hartman 27:47
folks. I have to tell you ice cream is overrated. Ice cream is overrated. You know what’s not overrated Nutella crepes, or as they say here craps. Well in Italy. I don’t know if they say it that way but in Croatia, they do. Those are so good. But Nutella. That stuff is horrific for your body. It is so full of sugar. It’s mind boggling. That stuff is just diabetes and a cam, or diabetes in a jar. Nutella. Nutella tastes good. But it is overrated. It’s all overrated. Everything’s overrated in Jason’s eyes. Okay, so 2005 is kind of a seminal date for them to be talking about these, these statistics and numbers. So I’ll go into a little more of this probably on the next episode, but these demographics are very important, but suffice it to say, like I’ve been telling you for years, folks, the statistics and the demographics coming at the rental housing market over the next decade, are nothing short of phenomenal. They are phenomenal. get in on this. And I was saying at the next 10 years, I was saying that a few years back It’s still, I mean, there’s another 10 year run of phenomenal rental opportunity, you know, for real estate investors. So you definitely need to be in on this. And to help you do that. We’ve got a great conference coming up. Well, we got two events coming up in Hawaii, the first week of November. We’ve got the prophets in paradise conference. This is a totally new two day conference. It is not meet the masters and meet the Masters will not be until approximately March. Now we are moving that back so that we can space out these two events. We don’t have a location for meet the Masters yet. But again, it will be our 21st anniversary of meet the Masters when we do that in 2019. But before that, we’re going to do this new conference with new material, new concept prophets in paradise. first week of November in beautiful, stunning, spectacular Hawaii and We will take a day off after that two day conference for travel time can get a special deal. If you sign up. Of course, there’s an incredible early bird deal at Jason hartman.com for the profits and paradise conference, but you will also get the opportunity to register for the first time ever offered for our venture Alliance retreat, which is just a day later in beautiful Hawaii. Yes. So it’s a $75 plane flight last time I checked from Waikiki Beach, where we will have the profits and paradise conference over to quiet where you’ll spend another two days joining the venture Alliance retreat as an optional thing. So check out those two opportunities. They are really a great deal right now. This is the super early bird pricing. And again, we’ve got a few months before that conference. We we really got a conference planned early here for a change. So take advantage of that very, very low pricing. I know many of you have already. We got some of our clients right in Why, of course they’re coming. And hopefully we’ll get some of our clients from some of the Asian countries flying over for that we’re the closest we’ve ever been to you if you’re in Asia. So come on over and see us in gorgeous Hawaii in November. And we’ll look forward to seeing you there again, Jason hartman.com. For that, thank you for listening today. Happy investing, and I’ll talk to you in a couple of days. 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.