9/28/14: Your International Economic Plan

The world’s economy is growing ever more global. Is yours?

Governments, corporations and wealthy investors have been investing globally for decades.  Even Mom & Pop paper asset investors practice international diversification through foreign stocks, bonds and currencies.

But real estate investors tend to be very geographically focused.  Many only invest in the particular area they happen to live in.  Maybe it just seems too daunting or troublesome to invest the time and money to figure out how to invest out of area, much less out of country.

However, there’s a reason why most non-real estate investors have a global strategy.  So doesn’t it stand to reason real estate investors should think about it too?

To find out, we sit down and visit with two international experts.

On location at Planet Hollywood in Las Vegas, Nevada:

  • Your international host, Robert Helms
  • His homely co-host, Russell Gray
  • The original international man and renowned global investor, Doug Casey
  • A purveyor of international properties that come with an amazing bonus, Jon Green

One of the first rules of investing is diversification.  After all, no one can predict the future.  And there are so many wild cards, how can you know how any investment will really come out?

You can’t.  So the wise thing to do is organize your investments in such a way that if one or more components of your portfolio fail, it doesn’t completely wipe you out.

And according to many of the pundits we’ve spoken to, for Americans especially, going global is more important than ever before.

They point out that for many decades, Americans have enjoyed a unique position in the world, but things are changing.

Specifically, since 1944, the United States has enjoyed having the dollar holding the envious position as reserve currency of the world.

After World War II, the U.S. had the biggest gold hoard, the strongest economy, the biggest army and the most stable government.

Most of all, the U.S. dollar was backed by real gold.  And because you could exchange $35 of your dollars for an ounce of gold, the dollara was literally “as good as gold”.

After 1971 that changed, but the U.S. still had the world’s strongest economy, the largest storehouse of gold, and a strong balance sheet.

Today, it seems apparent that China could very easily pass up the U.S. as the world’s biggest economy.  Uncle Sam is also no longer the biggest creditor, but instead is the world’s largest debtor, owing nearly $20 trillion…not counting unfunded liabilities which could run the total well over $100 trillion.

To top it all off, there are several fairly credible industry watchers who suspect that most of the U.S. gold supply is effectively gone.  That is, it may physically be in the warehouse (though no one knows for sure, since they won’t show it to anyone), there may be multiple claims on all of it.

So who knows what will happen?

No one.  Which is why it’s important to diversify.

The point is that based on the substantial changes in the global financial landscape, there are different risks…and OPPORTUNITIES…that didn’t exist before (at least not on the same scale as today).

So it’s no wonder that corporations and wealthy individuals have established a presence in multiple jurisdictions.  And it isn’t just for tax benefits, privacy, asset protection and escape from burdensome regulations.

There are also great opportunities which present themselves when people, money and industry move around.

Doug Casey tells us about several real estate purchases he made going back to the 70’s.  As you’ll hear, Doug did quite well.  And it was simply a matter of recognizing economic and demographic shifts and getting in front of it.

Those changes are continuing.  In fact, it could be argued they’re accelerating.  Certainly, the ability for every day investors to discover these opportunities is greater today than ever before simply because of the speed at which information flows.

Also, some Americans are looking to invest off-shore not just for the return on investment.  They’re looking for a different kind of diversification.  Specifically, they want to have citizenship, a passport and a home in another country.

Some may think that’s radical.  Others might think it’s cool.  But for the people who do it, it’s a strategic move to give themselves a plan B….a way to move around the world, own assets or establish a life outside the United States.

Why would anyone want to do that?

Because no one knows what will happen.  And when you’ve built up enough wealth, you grow concerned about how to protect it from failing currencies and financial systems, or confiscatory taxation, or asset seizure by overly indebted governments.

If you don’t have enough wealth yet to worry about this, then we hope you’re on your way.  To help you know what to do when you get there, listen in to our conversation with international man, Doug Casey and economic citizenship concierge Jon Green.

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed.

11/24/13: Follow the Money – Clues Where the Economy is Headed

John Denver once sang, “Life on the road is kinda laid back.”

Not for us.  But thank God we’re real estate guys.  For you youngsters, this is a reference to a classic John Denver tune, Thank God I’m a Country Boy.   You know…John Denver?  Rocky Mountain High?  Blond hair, little boy haircut, high voice?  No?  Just stay up late one night and watch some infomercials about 70’s music….

Anyway….

This episode is from yet another out-of-office experience for The Real Estate Guys™.  This time, we’re in the fabulous city of New Orleans for the 2013 New Orleans Investment Conference.  We attended this event last year and it was so much fun, we came back this year.  The to-die-for grilled oysters at Drago’s may have influenced our decision.  😉   We’ll be back in 2014!

For now, in the mobile studio-in-a-box for this jazzy episode of The Real Estate Guys™ radio show:

  • Your Duke of Discussion, host Robert Helms
  • His Dizzy co-host, Russell Gray
  • Best selling author and radio personality, Charles Goyette
  • Top performing mutual fund manager, Frank Holmes
  • New Orleans Investment Conference organizer and precious metals commentator, Brien Lundin

When you walk around the streets of New Orleans, which is VERY fun to do, you’ll see (among many things) collections of jazz bands performing.  It doesn’t take long to realize that the key to producing great music is the diversity of the ensemble.  Strings, winds, horns and percussion – and variations of each of those – all coming together to create a sound that’s unique to jazz.

We’ve been real estate guys for a long time.  And pre-mortgage meltdown, we were narrowly focused on all things real estate.  We lived, like many real estate investors, in a bubble (pun intended) – only seeing things from one point of view.  It’s like a one instrument jazz band.  It’s okay, but not as rich as full complement of instruments.

After being blind-sided by the crash (yes…we know we’re in good company, but that’s not much consolation when cleaning up the mess), we made a concerted effort to expand our minds by studying foreign markets, other asset classes, and trying to understand how global, economic, and yes, even political, factors affect real estate investing.  It’s something we thought was missing from most real estate related commentary and we’ve tried to fill that gap.

Along the way, we’ve met and interviewed many amazing and smart non-real estate people, like Peter Schiff, Herman Cain, Mike Maloney, Mark Skousen, Steve Forbes, and many more.

We’ve learned a ton.  And we’d like to think we’ve helped expand the perspectives of real estate investors around the world.  After all, the podcast version of the show is heard in over 180 countries.  Amazing.

But a funny thing happened as were preparing to go back to the New Orleans Investment Conference this year.  Conference organizer, Brien Lundin invited us to speak not once, but twice, on real estate. We’re obviously used to talking about real estate, but not to resource investors.

Our first talk (with the help of Summit at Sea™ faculty member John Turley) was about offshore real estate investing.

Our second talk was an updated version of a presentation we did at Freedom Fest 2012 on using real estate to short the dollar.  We expanded the discussion to include the idea of Real Asset Investing™ in the face of a fragile dollar.  You’ll be hearing more about this in the months ahead.  We think there’s a bubble brewing and the Real Asset Investing™ strategy is designed to not only provide protection, but produce profit.

Both talks were very well received even though the New Orleans Investment Conference isn’t really a real estate conference.  It’s more about resource investing (precious metals, mining stocks, oil and gas, etc.).

So why were The Real Estate Guys™ invited to speak at the New Orleans Investment conference?

Apparently, just as we’ve seen the benefit of studying other asset classes, the non-real estate investing community is beginning to see the wisdom of real estate as an investment, which to us, makes perfect sense.  After all, isn’t real estate the ultimate resource?

Of course, while we at the conference, we attended lots of sessions.  In addition to all kinds of investing experts, there were engaging panels and debates featuring a pretty well known cast of characters including Ben Carson, Charles Krauthammer, Ron Paul and our 2013 Summit buddies Mark Skousen and Peter Schiff (Peter’s coming back on our 2014 Summit at Sea!).

Even though you might think these guys all sing from the same songbook, there was quite a bit of disagreement among them, which we thought was helpful (and highly entertaining).  Next year, former Fed Chairman Alan Greenspan will be there.  We’re guessing that one will be entertaining too!

After listening to the sessions, we came up with the theme of “follow the money” for this episode.  And as much as we’d like to interview EVERYONE at the conference, everyone was very busy, and with only one hour for the episode we focused on three guests.

First, we talk with first time guest, Charles Goyette.  Charles is the author of the best-selling book, The Dollar Meltdown.  He just released his latest book, Red and Blue and Broke All Over – Restoring America’s Free Economy.  Charles is also the co-host of a daily radio commentary featuring legendary former Congressman and Presidential candidate Ron Paul.

You can probably tell by the book titles and his association with Ron Paul, Charles is a free market, small government, individual liberty guy who’s concerned about the direction of the U.S. economy.  While he doesn’t think America will fail, he thinks there are some choppy roads ahead.  He says the answer is to free the markets from overly burdensome government intervention.

One of the best practical tidbits he shares is how to know a bubble from a boom.  It’s quite simple he says.  Just follow the money that’s driving the growth.  Is it from production or from printing?  If economic activity (measured in people working, products and services being produced) is driving the growth, it’s a boom.

However, if monetary stimulus (i.e., quantitative easing, artificially low interest rates, financial speculation) is the source, then get ready…it’s a bubble.  And he contends that while the Fed might attempt to mitigate or avoid a bubble bursting, ultimately the market is bigger than the Fed.  So it’s wishful thinking to believe the Fed can overpower market forces to stop a bubble from bursting.

Obviously, bubble watching is important to real estate investors.  When a bubble bursts or just passes lots of gas, it can be very disruptive to job creation, interest rate stability (especially if you have adjustable loans), and availability of capital to finance your real estate purchases and sales.

The theme of Charles’ new book is that freedom creates prosperity.  That connection is less obvious, but equally important (if not more so) than how to recognize a bubble before it bursts.

Charles Goyette’s contention is that when people are free to innovate and produce, and are left enough of the fruits of their labor and risk taking, that they will become highly productive.  In turn that high productivity creates abundance, affordability and excess capital to be re-invested in greater production and efficiency.  All of that means jobs, and the purchase of all the things necessary to build and maintain a thriving community.  Best of all, the prosperity extends farther down the socio-economic ladder to the working class (our tenants).

All of that bodes well for the local real estate market.

So, if Charles is right, a savvy real estate investor can look at the “freedom factor” of any given market and index its future growth prospects to its relative freedom factor strength (compared to other markets).  Later in the show, Frank Holmes talks about this exact phenomenon in Texas, which is home to some of the fastest growing cities and strongest real estate markets in the U.S.  So maybe Charles is on to something!

Speaking of Frank Holmes…

Frank is the next guy we talk to.  Long time listeners may recall our first interview with Frank a few years back.  We were impressed with his vast and amazing knowledge of global markets and the performance of his managed funds.  Now, here we are three years later, and Frank is still sharp as a tack, his funds are still top rated, and he’s as positive and optimistic about the future as anyone we’ve met.

Frank also takes up the theme of “follow the money”.  He says there’s big money on both sides of the political debate (big government versus small government) and both are super smart.  Dumb people seldom accumulate money and those that do don’t manage to hold onto it very long.  So whether or not you like their politics needs to be set aside so you can objectively ask, “What is the smart money doing and WHY?”

Did we mention that Frank’s a smart guy?

He goes on to give us important insights into the impact of the Unites States new found position as an energy producing powerhouse.  We’ve been following the oil and gas business for multiple reasons (local market job creation, support industry job creation, impact of production on absorbing inflation and slowing the dollar’s descent) and thought we were pretty sharp.

But Frank adds a new perspective we hadn’t previously considered.  Did we mention that Frank’s a smart guy?

He explains to us that the American economy has a HUGE competitive edge over foreign markets because of our cheap energy.  That’s right. CHEAP ENERGY.

Yes, we know that $4 gas doesn’t seem cheap.  But that’s an American paradigm.  Canadians pay $6 a gallon.  And it can be worse in other parts of the world.  And then there’s natural gas, where the edge is even bigger.  Foreign markets can pay as much as 3 times as much as American citizens and business.  Yikes!

“So what?” you might ask.  As did we.

The “so what” is that cheaper energy mitigates some or all of the disadvantage of cheaper labor.  Hmmmm……

We’ve been concerned that a falling dollar means rising (denominated in dollars) commodity prices (like food and energy, which are conveniently left out of the Consumer Price Index…but that’s a different rant…).  Rising prices combined with soft labor means tenants can afford less rent – and certainly are going to be resistant to rent increases.

So while Frank didn’t persuade us that we shouldn’t be prepared for a soft rental market, he did move us from “worried sick” to “moderately concerned”.  Maybe with a little more time, we could get up to “cautiously optimistic”.

As for Frank, he’s very optimistic about the U.S. being competitive in global markets.  We hope he’s right because that means less downward pressure on labor, which of course is positive for rental income. 🙂

Last on our dance card is Brien Lundin.

We’ve really enjoyed getting to know Brien and his team.  They’ve been producing the New Orleans Investment Conference for many years and our interactions with him have been great.  He’s a real pro and is well respected in the investment community.

When he’s not producing the New Orleans Investment Conference, Brien writes a newsletter on precious metals.  We don’t talk too much about metals on this episode, but you can expect to hear more from Brien on The Real Estate Guys™ radio show, podcast and blogs.

For now, we reflect on another successful conference, the integration of real estate and resource investing, and we look forward to next year’s 40th anniversary New Orleans Investment Conference which will feature former Fed Chairman, the legendary Alan Greenspan.  THAT will be amazing.  We can’t wait!

Meanwhile, listen in to this episode of The Real Estate Guys™ radio show…brought to you from the floor of the New Orleans Investment Conference.

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1/29/12: Where in the World to Invest? Tracking Trends in Global Real Estate

Emerging economies, free(er) trade, high speed communication and the troubled financial systems of the U.S. and Europe all add up to people, money and opportunities moving around the globe in unprecedented fashion.

It’s a lot to keep up on!  But have no fear, The Real Estate Guys™ are here!

In the studio, behind the shiny silver microphones for another scintillating soiree into broadcast excellence:

  • Your emerging, high speed host, Robert Helms
  • Your troubled co-host, Russell Gray

In this episode, we flip the mirror around and look at the world from a different angle.  Now that we’re big shot international podcasters (being downloaded in over 160 countries!), we can’t just look at the world exclusively through our U.S. centric eyeballs.

Besides, we’ve discovered through our recent trips to South Florida and Phoenix, that non-U.S. citizens are actively buying U.S. real estate that they view as being on sale.  So even if you’re a U.S. citizen with no interest in off-shore investing, your domestic real estate is being affected by foreign activity.

Plus as the Chinese economy continues to climb up the food chain (nipping at the heels of Uncle Sam at last check), wealth being created overseas is affecting markets all over the world.  One of our fastest growing audiences is in Australia.  What’s the connection?  Australia is a big exporter of commodities to…drum roll please…China!  And how’s Aussie real estate been doing?  Pretty hot for quite some time.

And just so you don’t think it’s just all about China, Brazil is starting to light up the economic scoreboard also.  Our sources tell us the Brazilians make up a significant chunk of the buyers gobbling up South Florida real estate.

And don’t forget the Canadian dollar, eh?  It’s been strong against the U.S. greenback, making U.S. dollar denominated assets more attractive.  It’s too bad old guys like us don’t get more attractive when our dollars gets weak…but we digress.

Our point is, as we all learned as children at Disneyland, it’s a small world after all.  And what happens in the big economies of the world, can affect you – pretty much wherever you are.

So, listen in as The Real Estate Guys™ talk trends in global real estate – and consider how those trends might create opportunities or challenges you should be aware of.  Hey!  It it was easy, everyone would do it.  But if it can’t be easy, you can count on us to make it fun!

And speaking of fun (warning: incoming shameless plug), we’re getting close to last call for our fabulous annual Investor Summit at Sea™.  As of this post, we have investors coming from at least 13 different countries.  It’s a great opportunity to build you global network and gain direct personal insights into real estate markets and mindsets from around the world.  To get in on the fun, click here now!

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

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 an 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.