8/8/10: Don’t Say I Didn’t Warn You! Peter Schiff Reveals How He Predicted the Crash
WHO KNEW the crash was coming? Lots of people have been reverse engineering the causes of the financial crisis. It’s easy(er) to be smart when operating from hindsight. But when someone gets it right for the right reasons BEFORE the event occurs…well, that’s just impressive.
Peter Schiff is one of the few guys who called it way in advance. Not only that, but he put it in writing in his 2006 book Crash Proof (the updated version Crash Proof 2.0 is now on our recommended reading list).
Even more impressive is that Schiff appeared on a whole host of TV shows sounding the warning. But people literally LAUGHED at him, as you’ll see in the 10 minute video below. And there are many other videos of Peter aggressively debating all kinds of people – including next week’s guest on The Real Estate Guys™ Radio Show, Steve Forbes.
Featured on this week’s episode:
- Your host, Robert Helms
- Co-host, Russell Gray
- Fund manager, economist, author and outspoken commentator, Peter Schiff
Politics aside (Schiff is running for the Republican nomination for Senate in Connecticut - with the endorsement of Steve Forbes!), considering what Peter predicted and what actually happened, how can you not be at least curious? It was that curiosity that had us go to Las Vegas for Freedom Fest in July, where we were exposed to many economists who follow the Austrian school of thought. There isn’t any way in a blog post to explain all we learned, but a recommended homework assignment is to review the major tenets of the Austrian viewpoint versus Keynesian. We think you’ll find it very interesting, if not highly enlightening!
What we’re really interested in is being able to best anticipate macroeconomic influences that are likely to impact the value of our real estate, the strength of the jobs market, the growth of wages (which fuels growth in rents); and the cost and availability of loans. We don’t care if you’re Democrat, Republican, Libertarian, fans of rap or a drinker of light beer (okay, we find the last one a little offensive) -if you have something to say that proves true and makes sense, we’re interested. Peter Schiff is a guy that has proven true and seems to makes sense.
So for this entire show, we ask Peter to tell us to our face how he knew the crisis was coming and what’s going to happen next. Based on his track record, we think he’s a guy worth listening to. Check it out and let us know what YOU think!
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8/1/10: Economics, Politics and Real Estate – Interviews from Freedom Fest 2010
If you’re one of those who take The Real Estate Guys™ to the gym, make sure you carbo load first! This one’s a whopper! Our radio audience only got an hour, but the podcast audience gets the whole enchilada. That way whether you like American or Mexican, there’s something for everyone.
A few weeks back, we went to Las Vegas for the 7th Annual Freedom Fest conference. This was our first time and we weren’t sure what to expect. But after our previous interview with event founder, economist Mark Skousen, we thought it would be worthwhile. It turned out even better than we thought!
After being near the epicenter of the financial earthquake which rocked the real estate portfolios of even the most experienced investors, we’ve put a big emphasis on studying economics. Who cares if you’re expert at fixing up properties, managing tenants or putting together syndications if property values are crashing, tenants don’t have jobs, loans aren’t available, and people are too scared to act?
So we started looking for people who saw it coming, put their predictions in writing and got it right for the right reasons. Hindsight’s often 20/20, but seeing the storm coming 
while there’s still time to shutter the windows is better. You might not be able to avoid bad economic weather, but with advance notice at least you can prepare!
We looked at the lineup of speakers at Freedom Fest and decided this would surely be an eye-opening experience. We were especially excited about Peter Schiff, author of Crash Proof 2.0 (a highly recommended read!). Schiff called the crisis for the right reasons – and way ahead of time. We’re happy to say we got a lengthy interview with Mr. Schiff to see what he’s thinking now – which is the feature of our next show.
While we’re boasting about awesome interviews, we also had a chance to talk with billionaire CEO of Forbes Magazine and former Presidential candidate, Steve Forbes. That interview is coming up in a couple of weeks, so stay tuned! The best way to be sure you don’t miss any of our exciting episodes is to subscribe to our podcast via iTunes (shameless plug). 
Today’s episode is about talking to LOTS of people! It was like one of those speed dating sessions. Robert sat at the microphone from early morning to late at night, and Russ rounded up a long line of interesting people to interview.
Featured in this episode of The Real Estate Guys™ Radio Show:
- Your host, Robert Helms
- Co-host and cat herder, Russell Gray
And a long parade of very special guests (in order of appearance):
Jeffrey Verdon, Attorney, talks about estate planning and asset protection strategies utilized by wealthy individuals; including off-shore entities and a very interesting technique for funding life insurance.
Dave Fessler, Energy & Infrastructure Expert for the Oxford Club. Dave discusses his views on the future of energy and infrastructure and their impact on jobs and the economy. He also comments on “the paradox of thrift” – how consumer savings is actually fueling the recession. He tells us how long he thinks it’s going to last, and where he believes America’s best chance for job creation are right now.
Bob Bauman, Attorney, Former U.S. Congressman, Founder of The Sovereign Society; shares his thoughts on offshore investment, asset protection, second citizenship and the growing interest many people have in diversifying globally.
Vernon Jacobs, CPA, is an expert in international taxation. Vern tells us what to consider when investing or employing asset protection strategies offshore.
Robert Barnes, Attorney, is part one of two back to back interviews with lawyers from a premier tax and investment fraud law firm that went 3 for 3 (that’s pretty good!) in three of the top four high profile tax cases in the U.S. (you’d recognize the names). Mr. Barnes reveals the worst thing you can do when contacted by the IRS.
Robert Bernhoft, Attorney, is part two of our tax and investment fraud attorney interviews. Mr. Bernhoft describes what you can do to proactively avoid problems with both your investors and regulators; and shares how his firm uses specialized “non-litigation” techniques to recover misappropriated funds without going to court.
Steve Hochberg, Chief Market Analyst for Elliott Wave, works closely with Robert Prechter. Prechter’s 2002 NY Times best seller, Conquer the Crash, accurately predicted the current financial crisis. While everyone is running scared of inflation, Steve says DEFLATION is actually the big near term threat. He believes we are “on the precipice of the greatest stock market decline of our lifetime.”
Patri Friedman, Executive Director and Chairman of the Board of The Seasteading Institute. A city on the sea? Really??? Before you write it off as Looney Tunes, go to their website and look at their management team. These guys are all brilliant. We’re talking Stanford, Harvard, Yale. Wow. Have you heard of Pay Pal? Yeah,the founder is on their board. And why were they at Freedom Fest? Take a listen!
Leon Louw, Executive Director of the Free Market Foundation, all the way from South Africa! Why? To raise money to advance property ownership rights for blacks in South Africa. For what it’s worth, we didn’t see any evidence of racism at Freedom Fest, though it was full of “tea baggers”. Obviously, Leon felt people at the event would be supportive of his cause. From our observations he was right. But this isn’t a political interview. any more than our show is political. We just want to understand what people are thinking and doing, and how it creates or undermines real estate opportunities. Think about the ramifications on demand in a market where a large part of the population, formerly locked out, suddenly has access to buy property. Very interesting stuff.
Terry Coxon, author of Unleash Your IRA, shares a powerful concept for maximizing your Individual Retirement Account. We thought we knew all about this topic, but Terry shares a strategy we hadn’t considered. Now we’re hyped to read his book. With the demise of home equity, and a growing number of people predicting a tough stock market (at best); and lending getting even tighter from financial reform, we think IRA’s and rollover 401k’s are one of the BEST sources of private investment capital. That makes this a topic worth exploring!
Ron Holland, editor of two financial newsletters and 30 year financial industry veteran, has something to say on the topic of IRA’s. And it’s concerning. He shares what he thinks is the greatest threat to your retirement account.
Terry Easton, author of Refounding America and contributor to Human Events. Terry is uber-conservative / Libertarian and has a lot to say on the topics of economics, politics and real estate. We came to hear a lot of opinions and it just so happens that Terry has a lot of opinions. But since they come from a long history of study and involvement, we think they’re worth listening to.
All in all, Freedom Fest was a great experience and we’re very likely to attend next year’s event. We met great people, got valuable insights, and had our paradigms stretched (we’ve been icing them since we got back). Most of all, we see the economy and real estate from a much broader perspective. As we continue to seek out markets, opportunities and product niches to invest in, we are convinced a bigger perspective will pay huge dividends.
Remember – our next two episodes feature our interviews with Peter Schiff and Steve Forbes!
The Real Estate Guys™ Radio Show provides ideas, perspectives and resources to help real estate investors succeed.
This podcast brought to you in part by Audible.com. To download a FREE audiobook of your choice, click here.
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7/25/10: Entrepreneurs in the New Economy – Getting Paid to Solve Problems
Do you remember the old “new” economy? That was the one where technology companies could go public without profit. In some cases, they didn’t even need revenue. Ahhhh, those were the days.
The new “new” economy (the Great Recession one) hasn’t been nearly as fun – unless you’re an old school entrepreneur. That’s the kind who looks at problems as opportunities. Guys (and gals) like that are having a lot of fun right now because there are opportunities galore coming out of the Great Recession.
The Real Estate Guys™ headed off to Freedom Fest in Las Vegas a few weeks back. We heard that money manager / economist / author / Senate candidate Peter Schiff would be there (among many other people with very strong opinions about the U.S. economy) and we wanted to do some interviews. We’re happy to report we got lots of great stuff, including Mr. Schiff and the CEO of Forbes Magazine, Steve Forbes. Watch for those interviews in future broadcasts.
So we fly into Las Vegas in our private jet (the one operated by Southwest Airlines), and get to the convention venue and start setting up our booth. Before the event had even started, a man stops by and sees our banner for Belize (we were promoting our upcoming field trip to Belize) and asks a few questions. The short of it is that we find out he’s working on a very exciting project in the Caribbean – one that solves a problem we’ve been trying to figure out too. Russ gets so excited that he hugs the guy. Very weird.
After the appropriate apologies and some follow up male bonding, our new friend agrees to do a radio interview. And that’s what this broadcast is all about.
Manning the microphones for this edition of The Real Estate Guys™ Radio Show:
- Your host, the Larry King of real estate radio, Robert Helms
- Co-host, our “I love you, man” booth babe, Russell Gray
- Special Guest, Investment Banker, Entrepreneur and assault victim, Jeff Villwock
Any time we get around smart people, we jump on the opportunity to talk with them. In this case, Russ literally jumped on Jeff. When Jeff recovered, we got him on the mic, so you can listen to what he’s doing, where he’s doing it and why. There’s lots of lessons to be gleaned!
Freedom Fest is an event that attracts people with strong political opinions. In many of the interviews we did there, those opinions come out. Great! We think the world works better when people respectfully debate important issues. Sharing ideas is among the most sacred of our freedoms, especially if you’re radio guys.
We also realize that the U.S. (the bulk of our audience) is pretty polarized right now. Now, we love our entire audience and our show isn’t political. However, policies affect economics and economics affects real estate. There shouldn’t be a serious student of real estate who can look at the last several years and deny that. So politics are going to get into the discourse from time to time, which is a very good thing.
We think these Freedom Fest interviews are great. If you disagree with the political views of our guests, don’t let that get in the way of hearing what’s being said. Here’s why: a big part of real estate investing is understanding demographics and human nature. How people think and believe affects where they (and their money) will be moving. Even if you disagree with them, if they believe it, it will affect their actions. So YOU need to understand them (even if you disagree) if you want to anticipate their behavior.
Did we mention that Jeff’s project is in St. Kitts? It just so happens that St. Kitts is one of the stops on our upcoming 9th Annual Summit at Sea! So we ask Jeff if we can visit his project as part of our already planned real estate shore excursion in St. Kitts. Not only does Jeff agree to allow us to visit, he says he’ll meet us there and show us around. Awesome!
Once again, we’re reminded of the importance of getting out of our cubicles and into the world where real people are. No doubt that virtual networking is powerful, but just as phones did not replace face to face meetings, neither will social media replace conventions as a great place to make important connections. This is one of the reasons we attend trade shows and promote our field trips and the Summit at Sea™. It’s a great way to get to know great people in the real world. We hope to see YOU at one very soon!
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7/11/10: Ask The Guys – Bankrupcty, Tax Liens, Cheap Houses and More!
So we’re wandering around the radio show one day trying to think of something to talk about. Then we trip over a big bag of email and say, “Hey! We haven’t answered listener questions for awhile. Let’s do that!” So today’s episode is all about you and your questions.
Taking the stand and promising to answer each question to the best of our admittedly limited abilities:
- Host and Professional Pontificator, Robert Helms
- Co-Host and Head of The Real Estate Guys Research Institute, Russell Gray
- The Man Who’s Forgotten More Real Estate than Most Will Ever Know, the Godfather of Real Estate, Bob Helms
One of our favorite things to do is show off how smart we are. For obvious reasons, we don’t get to do that very often, but we always look forward to the opportunity. Then again, if you subscribe to the idea that people learn by making mistakes, we’re REALLY smart!
Anyway, we get lots of questions from people and we love it. So please keep ‘em coming! Go to Ask the Guys and ask away! For this episode, we grabbed a handful from the email bag and here are some we found.
(For privacy purposes, we’ve omitted the names, phone numbers, social security numbers, birthdates, drivers license numbers, bank account information, picture, height, weight, race, religion, sexual orientation and favorite ice cream)
I just came out of a Chapter 7 bankruptcy. How can I get a mortgage?
I found properties for $500 – $1000! Seems like a no-brainer. Am I missing something?
Is Dallas a dangerous place?
The Great Recession wiped me out. How do I get going again?
What do you think of using retirement accounts to buy real estate?
Are tax liens a safe investment?
And our personal favorite:
Is it still possible to buy property for no money down?
Tune in for the answers to these and other exciting questions on this episode of The Real Estate Guys™ Radio Show! (theme music plays here).
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Seven Lessons from the Summit at Sea
The Real Estate Guys™ 8th Annual Summit at Sea was a huge success! We feel sorry for everyone that wasn’t with us this year. 
All the energy, education, experiences and relationships are hard to put into words, but we have 7 lessons we believe will help you.
The French Quarter in New Orleans - what a fun place!
We kicked off the 2010 Summit in the French Quarter of New Orleans. Many Summit attendees wisely came in a day early and made plans to stay a day or two later in order to enjoy the hospitality of this amazing city. Those who got the most out of their trip had invested the time to research the city beforehand. When they arrived they had geographical context and some idea about what they wanted to see and do. One of our attendees had plans to attend a certain restaurant he’d heard good things about. The food of the French Quarter was certainly one of the highlights of this trip. Russ took the opportunity to try turtle soup and fried alligator. Both were great and he’d order them again!
Summit Lesson #1: Life’s best surprises go to the curious and adventurous. Invest time to visit new places, meet new people, try new things and discover new ideas. You’ll be the richer for it. If you’re not that way naturally (like Russ) – hang out with people who are (like Robert). Some of our best real estate deals and business relationships have come from simply exploring. Deal hunting is as much art as science. You can’t always script it.
Back to our attendee. So this guy is heading out according to his plan. But when he steps into the hotel elevator, he runs into Rich Dad Advisor® Wayne Palmer and his family. The short of it is our guy ends up going to dinner with Wayne! We’ve been at Rich Dad events with hundreds and thousands of people in attendance, many of whom wait in line for a long time just to get two minutes with an Advisor. Can you imagine being able to enjoy a long casual dinner with Wayne Palmer?
Rich Dad Advisor Garrett Sutton at Dinner. Notice Ken McElroy on the other side of one very fortunate Summit student!
Summit Lesson #2: Great opportunities to meet interesting people and learn new things won’t happen to those who stay home, arrive late, leave early or aren’t flexible. If you want to build strategic relationships, you must go to where the right people are and put yourself in a position to get lucky (speaking purely in terms of business).
As real estate investors, it’s important to practice exploring markets. There’s so much more you learn from actually being there. The internet can’t capture the spirit of a market. From cab drivers, to hotel and restaurant workers, to local shop keepers and business owners, to the people on the street, there is a lot you will discover about what’s REALLY happening in a local economy when you’re physically in it. People living in a community know what’s happening right now with rents, prices, migration trends, demographics and job creation. Only when you add this anecdotal information to your own real life observations can you begin to put statistics into useful perspective. Remember: stats reports things that have already happened – not what’s happening now.
We noticed that New Orleans is a very entrepreneurial city. Perhaps in the wake of Katrina (the effects of which were still apparent) the bravest, most resilient and dedicated people have returned first. In any case, these folks weren’t asking for handouts. They were happy for the opportunity to earn our business – and very thankful for it when they got it. As our nation and world continues to work through the effects of the financial crisis, the people of New Orleans gave us hope. If people all over the world dedicate themselves to working their way out of a mess like these people are, our world is going to come out of this Great Recession just fine.
Summit Lesson #3: Entrepreneurship and hard work (not handouts) are the keys to personal and societal recovery. Everyone who’s struggling in this economy should take a trip to New Orleans and see how winners react to adversity. No wonder the Saints won the Super Bowl. If we all take the spirit of New Orleans back to our businesses, this recession will quickly fade into the rear view mirror.
After a great session in the hotel, the group headed to the pier and boarded the ship. We sailed on the Carnival Triumph, which was SOLD OUT! Cruise lines are actually weathering the financial storm pretty well. Why? Perhaps people realize that a cruise is a great value, meets a basic human need (to refresh themselves) and attracts financially capable people from all over the world (a broad market). Do these principles apply to real estate investing? It’s obvious that real estate meets a basic human need, but we’re reminded of the importance of having a large, financially capable target market. No matter how badly someone wants something, if they can’t afford it (or don’t think they can) they won’t buy.
Summit Lesson #4: Pick markets and properties that appeal to a large demographic of financially capable people and you will weather difficult times more easily.
The next lesson came later, but is an extension of lesson #4. Rich Dad’s Real Estate Advisor Ken McElroy talked about the markets and properties he targets: B-Class apartments (meets a basic human need – housing) with affordable rents (provides a great value) that appeal to working class people (a large, financially capable demographic) in markets with good mid-to-long term job creation (he focuses on areas with fundamental and growing industries such as energy).
What was very interesting is that on the real estate shore excursion to Belize, we saw a very different variation on the same themes.
International real estate developer Beth Clifford explains her vision for a beautiful waterfront development in Belize
In Belize, we visited a piece of beautiful waterfront land and listened as the developer shared her vision for the property. She plans to build high quality, moderately priced residential units suitable for resort, retirement or ex-pat full time occupancy. While the country of Belize is sparsely populated and very poor, it is a land of breathtaking natural beauty and terrific year round warm weather.
Like the cruise ship, the project in Belize provides great value, satisfies a basic human need and desire, and appeals to a worldwide, financially capable demographic. In other words, the project’s success isn’t dependent on the local population to be successful. It attracts people from all over the world. And because there will be so few units available relative to the size of the market, it’s hard to imagine the project won’t be successful. It’s very different than B-class apartments, but like the cruise line, follows a similar fundamental formula.
The stunningly beautiful Cayes of Belize from our airplane at about 1,000 feet.
Summit Lesson #5: Essential principles of successful investing don’t vary much, even though markets, properties and target customers might. Or as the old adage says, there’s more than one way to skin a cat (though we have no idea why anyone would want to do that – it’s cruel).
Even though this was our 8th Summit, there is no doubt it was our most compelling line up of speakers. We were very fortunate to have not one, but THREE of Robert Kiyosaki’s Rich Dad Advisors® teaching at our Summit. Creative real estate genius Wayne Palmer taught a powerful and practical series on how to create capital, produce profits and generate cash flow with the creative use of private notes. Even though people had to ice their brains after each session, Wayne was gracious to make himself available during non-class times. He answered questions and even did some individual personal consultations. These opportunities weren’t part of the official program, but some people at the event got lucky (see Summit Lesson #2). People left the event believing they could use the education they got to do at least one deal which would more than pay for the cost of the entire Summit – and next year’s too!
To quote Robert Kiyosaki, “Savers are Losers”. Though we agree with his premise (and highly recommend you read his latest mega bestseller Conspiracy of the Rich), we’re saying it for a completely different reason. We think people who “saved money” by not coming on the Summit actually lost money. We know. That sounds like sales pitch. But anyone who’s ever tried to do an event like this knows that no one is getting rich by promoting it. More, if you saw the surveys of the people who came, you’d realize that we still haven’t figured out how to over-promote the Summit. Everyone felt it was easily worth the time and money.
When you’re around people who know how to make money in a tough economy; who are optimistic about the future; who are resourceful and busy taking advantage of all the opportunities they see in the market, you quickly realize those who lost out were those who wanted to attend and chose not to because they told themselves “I can’t afford it”. This paradigm looks at the Summit (or similar events) as an expense and not an investment. The difference is that an expense pays for something that is consumed and doesn’t produce a profit. An investment pays for itself and returns a profit. The paradigm should have been, “I can’t afford not to” and “How can I afford it?” Most people believe a college education is worth the price, yet hesitate to invest in non-institutional education. Could it be they believe the degree is more important than the knowledge? What do you believe?
This couple came all the way from Papua New Guinea to hang out with Ken McElroy and the rest of the Summit faculty and guests!
Summit Lesson #6: Paradigms affect potential and profits, so pick your paradigms carefully. The Summit was full of winners and after living with these amazing people for a week we found ourselves picking up new paradigms and making commitments to shed some bad ones. One of the great challenges is to manage the influences to our thinking. We look for every opportunity to hang around top performers.
One common theme we noticed in the presentations of nearly all the speakers was “control”. Wayne Palmer talked about his rules for risk. He follows strict (but flexible) guidelines for collateral, loan-to-values, target returns and cash flows in order to control the risks he takes in any deal. Rich Dad’s Asset Protection Advisor, attorney Garrett Sutton, talked about entity planning and how to structure your affairs in order to control liability and tax risk. Attorney Mauricio Rauld spoke on international entity structures which further control liability and tax risk when investing outside of the US.
Ken McElroy talked about his guidelines for market and property due diligence, as well as his dogged attention to cash flow. He uses these disciplines to control market risk. He says this control is why his real estate investments aren’t in trouble even though he’s going through the same challenging market conditions that are wiping out so many others. He doesn’t rely upon the market to do the work for him. He looks for deals with upside and works to improve the cash flow, which in turn increases the equity. Then he uses prudent leverage to release the new equity and return his seed capital so he can move forward with positive cash flow – all on no money invested. This produces what Robert Kiyosaki calls “infinite returns”. Meanwhile, he recycles the seed capital to do the next deal!
Robert Helms stressed the importance of controlling one’s mindset when investing in the wake of an unprecedented drop in values (see Summit Lesson #6). Each had a different angle, but again, all variations on a theme: control.
Summit Lesson #7: Pay careful attention to the things you can control so you’re able to withstand the challenges caused by the things you can’t (inflation, taxes, market cycles, interest rates, etc). When it comes to investing, most people are out of control. Fear overrides common sense and they buy high and sell low. They turn their money over to bankers and Wall Street and hope for the best (hope is not a strategy). They manage cash flow by feel rather than budgets and bookkeeping. Worst of all, they wait for external circumstances to get better rather than investing in making themselves better with education, relationships, strategies, disciplines, systems and a willingness to take action in the face of uncertainty.
We could go on and on! There are SO many great lessons to glean from the Summit. Of course, the only way to really get them is to actually be there. The Real Estate Guys™ Summit isn’t the only event of its type, but after reading the surveys of the attendees, and even more, hearing the feedback of the Rich Dad Advisors®, we think it’s one of the best. And we’re already making plans to make next year’s Summit even better!
We encourage you to make it your goal to be with us in 2011. Without exception, every survey we received said the event exceeded expectations and was well worth the time and money invested. Over one third of this year’s group has already signed up for next year!
To make sure YOU get the upcoming announcement about The Real Estate Guys™ 9th Annual Summit at Sea in 2011, be sure to sign up for our newsletter. To be extra sure you get the early bird deal, use our feedback page to let us know you’re interested and we’ll put you on our VIP notification list.
Nearly 50 real estate investors hard at work doing due diligence on a new real estate market during this year's Summit. It's just one of the many sacrifices investors have to make.
All the best!
Robert Helms and Russell Gray
Hosts
The Real Estate Guys™ Radio Show
4/11/10: Old School Real Estate -Debt Free Investing
Does debt free mean no leverage? Or are there other ways to optimize return that don’t include mortgages? The Real Estate Guys™ look take a fresh look at an old school concept: investing for cash – even when you don’t have any!
In the old schoolhouse for today’s lesson:
• Your Professor of Profit, Head Teacher and Host, Robert Helms
• Teacher’s Aide and Co-Host, Russell Gray
• Old School Principal and the Godfather of Real Estate, Bob Helms
It’s been said, “There’s no school like the old school.” This is just another way of saying that there’s often great wisdom in fundamental concepts which have stood the test of time. When traumatic events like mortgage meltdowns and Great Recessions occur, they shake the structure of conventional wisdom. What is often left standing are “old school” principals (like Bob!).
So we decided to brush the dust off of some old school ideas and talk about the pros and cons of investing for CASH. Wait! If you love leverage or have no cash, stick with us because there’s something in this show for you too!
Class starts with a Health & Safety lesson on the double-edged nature of financial leverage. Magnified gains are awesome, but magnified losses can leave you cut and bleeding. Don’t ever run with leverage or swing it around wildly.
Our next lesson is in Current Events and begins with the when, how and why purchasing for cash is the best (and sometimes only) option for many opportunities in today’s market. However, our Science book says the caterpillar of cash today can metamorphosis into a butterfly of leverage in the future.
After recess, our Economics class features a discussion of why “cash is trash”. Although it’s fallen out of vogue for bandwagon real estate “investors”, many experts consider real estate a desirable commodity for hedging against inflation.
In Shop class, we discuss how to work with tools to create leverage that doesn’t involve borrowing. Wow! Debt free leverage. Maybe this should be a Physics class?
For Phys Ed, we learn how to play and stay in the game – even if we don’t have any cash of our own. Fun, but sweaty.
Before we know it, the school day is over and it’s time to head home for supper. We guess we’re a little nerdy – because we sure had fun in school today!
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4/4/10: The Brave New World of Finance – How to Master Your Debt with Jordan Goodman
We’ve heard estimates that every man, woman and child in the US is currently saddled with $40,000 to $170,000 in debt – just for the Federal government! Then tack on state and local government debt, and before you even get your first credit card, debt has a dominating hold on your finances. As we boldly go where no one has gone before, it’s more important than ever to be strategic in managing your debt. To help us explore the galaxy of information on this topic, we beamed a best selling author into The Real Estate Guys’™ studios.
On the bridge of our radio starship:
• Captain, Chief “Helmsman” and Host, Robert Helms
• Pointy-eared Co-Host, Russell “Mr. Spock” Gray
• Ship’s Financial Doctor and Godfather of Real Estate, Bob Helms
• Best selling author, the Money Answer Man and ship’s Financial Engineer, Jordan “Don’t call me Scotty” Goodman
“Debt, the endless frontier. These are the continuing escapades of a spendthrift society. It’s apparent mission: to encumber itself beyond any hope of repayment; to seek out new debt ceilings and then monetize that debt; to boldly go where no one is sure we should.” Da ta daaa, ta da ta da DAAAA!!!! Swoosh!!!!
Sorry. We got carried away. All this may sound like a tee up for political commentary (we are soooo tempted), but it isn’t. Our point is that debt, both public and private is a major part of every person’s financial future. And as we attempt to break free from the gravitational pull of the Great Recession, we find ourselves looking at a brave new world of finance – one with new rules that it behooves each of us to learn.
At its core, debt involves getting other people’s money (which we like!) and paying them interest (we like that less). The motivation of the lender is, like a drug dealer, to get you hooked on debt and forever paying interest. The motivation of the addict…we mean borrower, is to enjoy now and pay later (or never). So where does an investor fit in?
As investors, we want to borrow cheap and invest high – just like the banks. But since there are no bailout programs for us, we need to be more careful. The first step is to understand the rules – and then to implement effective strategies. Sound easy, but when the rules change, we need to examine our strategies.
We launch the show talking about the new realities of debt in the post meltdown economy. For the older folks, we’re getting back to “normal”. For younger people, free and easy credit was “normal” and the current environment is no fun at all. We talk about where things are now and where they might be headed.
With the new Credit Card Act of 2010, the rules of credit cards have changed. Credit cards, like light sabers (we know we’re mixing sci-fi metaphors), are powerful tools in the right hands – while they can be equally dangerous when used by the untrained. Since the rules are changing, investors and consumers alike need a little training on the state of the art. Our special guest and prolific author Jordan “Mr. Money Answers” Goodman, brings us up to speed on some of the need to know items.
As the US and the world is coming out of their bunkers and beginning to explore the economic wasteland, governments, industry and individuals are all making adjustments. For many individuals with unsustainable levels of debt, professional help may be the best answer. Jordan shares with us his insights about the important differences between Debt Settlement and Credit Counseling Services. You’ll want to hear what he has to say.
For some people, the aftermath of the meltdown means foreclosure and perhaps even bankruptcy. Does that mean game-over or is there life after debt? Once again, Jordan brings in great practical information and insights to help you chart your personal course.
For the two of you who are facing the brave new world with good credit scores and equity, Jordan reveals an AWESOME strategy for accelerating your mortgage. Long time listeners – and especially readers of Equity Happens - know The Real Estate Guys™ have never been big fans of mortgage acceleration. But Jordan shows us how to use the power of cash flow to accelerate the pay off of a mortgage without amortization. We know it sounds like science fiction, but it’s real. Check it out!
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