Although real estate investors deal with real assets and not volatile holdings, we think it’s crucial to understand the larger economic picture.
We’ve been attending Freedom Fest since the 2008 financial crisis.
Conventions like Freedom Fest bring together leaders of all types and set the stage for respectful dialogue between smart people with varying opinions.
We’re thrilled to bring some of those smart people on the show today and get their insights on U.S. and world economics.
A disclaimer … our guests today lean right, politically. The Real Estate Guys™ don’t endorse any political viewpoint.
Whichever side of the spectrum you stand on, we recommend you step back for this episode … and look at the information presented from the edge of the coin, objectively.
In this episode of The Real Estate Guys™ show you’ll hear from some pretty smart guys:
- Your freedom-loving host, Robert Helms
- His fun-loving co-host, Russell Gray
- Billionaire publisher, Steve Forbes
- Legendary investor, Jim Rogers
- Economic pundit, Peter Schiff
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We hope you’re already familiar with Steve Forbes, head of one of the world’s most influential business magazines (and two-time presidential candidate in the U.S.!). We asked Steve for his thoughts on the world of media.
Steve shared a quote from his grandfather, B. C. Forbes, the founder of the magazine, who said, “The purpose of business is to produce happiness, not pile up money.”
“I always try to remember the spirit of Forbes,” Steve told us. That means adapting to the age of online media and “fake news.”
“Businesses have an incentive to get their message out there,” said Forbes. Forbes publishes approximately 110,000 articles a year on the web, always aiming to maintain a unique angle … one that doesn’t resort to tabloid journalism.
We asked Steve how people can be smart consumers of media. “Compartmentalize when you read the news,” he told us, “and concentrate on what’s actually being done.”
For example, Steve sees exciting things happening in the areas of deregulation and tax cuts. He’s keeping his eyes peeled to see what will happen.
What does Steve think about the state of real estate investing in the U.S.? “Location, location, location!” (We agree wholeheartedly.)
“In a vibrant economy, people want spaces to work and live,” Steve said. “Prosperity solves a lot of problems and covers a multitude of sins.”
Jim Rogers is a legendary investor, and we’ve been itching to do an interview with him for years. We asked him for his thoughts on the state of today’s markets.
“Interest rates have never been this low,” Jim told us. “The central banks have made mistakes. Debt has gone through the roof across the world.”
His conclusion? “The next time we have a problem, it will be worse than 2008 because there’s so much debt.”
What do U.S. investors need to know about the global picture? “All investors have to understand the world now in 2017,” Jim said. He advised investors to think … which nations have the largest economies? Which nations are the biggest creditors? A clue … all these countries are in Asia.
And which are the largest debtor nations? “Look out the window,” Jim said.
What can folks do to stay sharp in a multi-media world? Jim had a few words of advice. He told us investors need two essential things … knowledge and judgment.
How can investors obtain both knowledge and judgment? Read and listen to a lot of different media types from different sources and countries. “You won’t understand just by reading the American press,” he said.
Once you obtain a wide variety of perspectives, that’s when you use your judgment to sort out what makes sense.
And what about real estate? “Many cities are in a bubble right now. But in rural areas, there isn’t quite as big a bubble,” Jim told us. He sees the most promising opportunities in agricultural investing (a topic we love to discuss!).
“I don’t know how to farm,” Jim admitted. Luckily, there are many ways for non-farmers and small investors to align themselves with agricultural investments today.
How about gold and silver? “I own it. I haven’t been buying it since 2010. I hope I’m smart enough to buy a lot at the right time,” he said.
Jim predicts that people will eventually lose confidence in paper money. When that happens, he says people will buy land, gold, and silver. “Why not start today!” he said.
We asked Peter what’s changed and what’s new since the advent of the Trump administration? “Not much has changed with Trump,” he said.
He told us he sees a lot of talk and very little action, a lot of hypocrisies.
What about the Fed’s interest rate hike? “They’ve raised rates, but not much.” Peter noted we’re at the same levels we reached at the bottom of the housing recessions and told us the Fed’s talk of quantitative tightening is “a bunch of talk.”
In an age of conflicting reports, what does he think investors should pay attention to? “Actually look at the markets,” Peter advised. “Look at the dollar, the price of gold. There are still lots of bubbles in the market.”
He noted recent high-profile disasters happening in the stock market and the possibility of less market protection from the Fed. “The key is to pay attention and be prudent.”
What can investors do in tiring times? No. 1, “Diversify out of the U.S. dollar,” said Peter. “The dollar is a tailwind for foreign stocks, which will be a safe haven.”
We also asked Peter about the advantages of obtaining residency and doing business in Puerto Rico. He has first-hand experience … he lives there with his wife and kids.
“What people don’t understand is that Puerto Rico holds all the benefits of being in the U.S. without the cost,” Peter said. Residents of PR don’t have to pay federal income tax and gas tax, Obamacare penalties and taxes, or tax on capital gains.
Choosing the right ingredients for your investment blender
While none of our three guests today are primarily real estate investors, they possess a wealth of knowledge on business trends and economics.
These guys study the key components of what you put into your own investment blender … taxes and investing, owning property, job markets, financing, and more.
We love talking to knowledgeable people like Steve, Jim, and Peter because they take those essential components of the U.S. market and try to figure out where we’ll be years in the future.
If you’re trying to build a real estate empire, there’s nothing more important than being well-informed about a market you might be married to for years or decades to come.
We hope you were taking notes … because like we always say, education is the path to effective action!
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