The Iced Coffee Hour - This ALWAYS Happens Before A Housing Market Crash… | Michael Zuber

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Starting point is 00:00:25 Start your free trial today. 2026 is a horrible year for most people in real estate. Buyers, sellers. In fact, I think the only person that wins in 2026 are investors. Real estate, it's so much harder than stocks. The stock market every second of the day, you know what it's worth. Real estate is inefficient. You can if you work long enough and you make enough offers. You can make hundreds of thousands of dollars the day you close. Most people won't do that. What is your prediction then for home prices over the next five to 10 years? President Donald Trump posted, the American Dream is increasing.

Starting point is 00:01:01 out of reach for far too many people. My guess is it will take between 8 and 10 years to get back to normal. Do you think people are better off buying a house today than renting? Hey, everybody, you don't have to buy a home. You don't have to. It's not written down anywhere in law. But if you want to get wealthy, you have to own assets. And the best way to do that is to find a seller who is motivated.

Starting point is 00:01:25 So what's the secret to financial independence then? You know what the three-step process to get wealthy is? It's been 100 years this has been true. You want it? I appreciate it the opportunity. You guys are great. So how much in real estate do you have? We have about 167 units because we just sold a duplex last week and about $25 million in total value.

Starting point is 00:01:47 And how much debt do you have? Just over $9 million. And how much do you get in cash flow each month? The worst month we had last year was $40,000. Our average is about $52 and the best month was $60. But the key is, I live on $12. And this is all your money, correct? It's all my money, no partnerships.

Starting point is 00:02:04 I shouldn't say all my money. my wife's money as well. Let's be very clear. Olivia is a big part of this journey. But yeah, we don't take outside capital, never have. We've taken on some debt partners, but just like banks. But I don't want to, I don't want that stress, frankly. And why should people listen to you specifically? Well, I'm not here trying to sell anything, right? I'm a guy that's been looking at real estate for 30 years. I'm an economist. And my goal in life is to simply build something that outlives me by 50 years. That's what's going to be success for me. I'm not here trying to be a billionaire. I'm not even here. trying to grow my portfolio anymore. I live on 12 and make 50. I'm good. We just did three weeks

Starting point is 00:02:41 in Australia, came back for a week, did a week in Canada. My life is good. I'm not trying to be this big guru. I'm just trying to look at the news. I've been doing it every day since college. And I'm trying to help people. That's all I'm trying to do. Yeah, I have to say when we were planning for this podcast, you sent me your research, this incredible spreadsheet. I'm going to put it up on the screen here for everyone to see. The level of detail that you, you put into that to me is incredible. So what is that telling you about the housing market? Well, I think it's important to understand why I created it and why I give it away. I created it because on August 26, 2022, Jerome Powell at Jackson Hole threw away his prepared speech,

Starting point is 00:03:21 which is not normal for a high-ranking, you know, Fed member. And he basically went on a six-minute and 12-second rant that pain is coming. And as somebody who had suffered a huge loss of 80% of his wealth, I didn't want to do that again. I'm 50 freaking years old. I don't want to start over. So I asked myself, what's going to happen to real estate if interest rates go up? What's going to happen to the stock market? What's going to happen to commercial real estate?

Starting point is 00:03:47 What's going to happen to new builders? These are all the questions I had because I was, A, trying to avoid pain. But B, I'm a greedy son of a gun. If there's an easy way to make money, I want that answer. So I built that spreadsheet at the time it was called the 52-year spreadsheet because I went back to 1970 and I collected, I don't know what it is, 34 different metrics. All of it is sourced so you have the spreadsheet.

Starting point is 00:04:11 There's a tab that says sources, fed this, fed that. So it's all source so you could build the spreadsheet. But I wanted to ask myself questions. What happens when rates go up? What happens when rates go up a lot? Have we ever done that before? If we had, what broke? Because something's going to break.

Starting point is 00:04:27 So that's why I did that spreadsheet and it helped me out. What were your findings in this research? There were so many shocking. findings. And again, I didn't have the answer. So the first thing I found was we have actually seen interest rates go up 700 basis points in a four-year period. That shocked me. I did not realize that. We went from 1978, we were 9.6. We went to 16.6 by 1982. That's 700 basis points. The first thing to remember is everybody said that every 1% increase in interest rate, prices were supposed to fall 10%. And that frightened me, right?

Starting point is 00:05:05 I'm a guy with probably $20 million in real estate at the time. And if you're telling me my real estate's going to fall 20, 30, 40%, 40%, I don't want to be there. I saw the GFC. I didn't want that to happen again. So, you know, I had to go figure out what actually happened the last time we did that. So what happened? And how does this apply to, like, the average viewer? because the average year doesn't have $20 million in real estate.

Starting point is 00:05:26 Maybe they want to get started in real estate. Maybe they just have a couple of units. What does this mean for them and what did you find out? Exactly. Yeah, so what I found out, because this is exactly why I did. And this is why I give it away. I don't charge for it or anything like that because I'm just trying to help people. That's all I'm trying to do.

Starting point is 00:05:40 So the first thing I found out was all of these experts, and I'll use quotes, because they were wrong. Prices did not fall 70% from 1978 to 82. interest rates went up 7% and they were supposed to fall. Now, you could argue, hey, okay, they didn't fall 70%, maybe they fell 20 or 30. They didn't fall at all, guys. They went up. Real estate went up. Real estate went up, even in 1981, which is the worst affordability ever.

Starting point is 00:06:11 What did happen in what allowed me to make a great call back in 2022 was transactions crashed 50%. Transaction crashed for new homes, for existing homes. That is a problem. And that's the affordability problem. Why are we not selling more homes today? Why does 72% of people say it's not a good time to buy? It's affordability. But again, the lack of affordability does not mean prices fall. It means transactions fall. Why do you think prices don't fall when affordability goes down? Because you don't have a motivated seller and you need waves of motivated seller. Think about today. You guys own some real estate. You know lots of people that own real estate. Most of them, I'm guessing, have interest rates below four and probably even below three. Do you know what that means? That means they took their second largest expense, X taxes, second largest expense X taxes, and fixed it for 30 years. They are now living a better life because their fixed shelter expense is below rent and below all these others.

Starting point is 00:07:10 So they have more money to deploy on Teslas and Rolex watches and Gucci bags. That's just reality is they have more money to spend because their shelter is fixed. So they're not motivated to sell. So who's getting screwed right now? Because what about the people who bought the last two to three years where they're at five percent, five and a half, six percent? So there are certainly some markets, Austin, Texas being one, Port Louis and Florida being another, that certainly got over their skis and have fallen 20 percent. But these are not national phenomenons. The key to real estate is you've got to hold it for a decade, right?

Starting point is 00:07:42 If you're coming into the game with a one or two year hold period, just rent. Transaction cost alone is going to eat you alive. So again, if you came into this because you thought you were going to be a quick flipper or something of that, you're misguided. Real estate in ownership, you have to think in decades, in my opinion. What do you think of the 18-year cycle that I've seen in real estate? I see a lot of these Twitter posts that go into like every 18 years there's a cycle. And the 18 years for the next 18 years started like a year or two ago. So again, this spreadsheet that you've shared on the screen goes back to 1970.

Starting point is 00:08:15 So I don't know what that is three 18-year cycles. It's not there. right. We had one GFC where prices fell 4%. We had one year in the 80s where it fell below 1%. But that's it. It's just not there. It's just somebody telling a story. So if prices are not going to be falling, is this just the new normal that housing is going to be unaffordable for most people? I don't think so, right? So when I put that spreadsheet together, it said prices don't fall, but transactions do. But it also told you, if you look at it, it told you a timeline to recover. it's just not fast. In 1978, we did 4 million, 3.9 something. By 1982, we did sub 2 million. That's a 50% crash, guys. We did not get back to 3.9 million until 1996.

Starting point is 00:09:03 I'll say that again. From 1978 to 1996, it took to recover to do the same level of transactions. We must have had 15 million more people in the country. We must have had 5 million more housing units. But it's just not a quick recovery. Why? Because wages. This is all about wages. Wages grow four, four and a half percent a year. It's going to take eight to ten years for that to bring back some normalcy. Why did transactions matter, though? Why is it not just what the price is? Transactions matter because we are an economy. Real estate, the collective unit, is about 12 to 13 percent of the economy. Painting, Lowe's, Home Depot, just all the things that go into real estate. If you are at 50 percent of production,

Starting point is 00:09:48 You have 12% of the economy being pulled back. That's why we need to see this get incrementally better going forward. And I think I think 26 was going to be incrementally better by 8 to 10% than we have this Iran war and rates are going up. So maybe not. But having real estate at 50% of normal capacities horrible for the U.S. economy. So in terms of the average viewer watching this then, like I said, maybe they have a couple rental units. Maybe they don't have any real estate at all, but they want to start owning real estate. maybe they shouldn't own real estate.

Starting point is 00:10:21 What would you do if you were 20 years old making the average income, living in the average place? What is your advice to these people? So 2026 is a horrible year for most people in real estate. Buyers, sellers. In fact, I think the only person that wins

Starting point is 00:10:37 in 2026 are investors. Why? Because investors can be patient, right, disrespectful offers, try creative financing. They got to find that one seller. Right? Home buyers,

Starting point is 00:10:48 generally don't do that. Right. So again, unless you're willing to write a hundred offers, which I have done in past years, you're willing to follow up three or four times to get that one seller who has to sell. Because in the game of real estate, you make your money when you buy. You make your money when you buy. You don't pay market rent. You don't pay market prices. You have to keep swinging that hammer. Eventually, the numbers will work out for you. You'll buy something 15, 20, 30 percent below. So if you want to sacrifice and keep renting and keep stacking paper and just keep a buy box and keep trying and trying. Awesome. You don't have, hey, everybody, you don't have to buy a home. You don't have to. It's not written down anywhere in law. But if you

Starting point is 00:11:27 want to get wealthy, you have to own assets. And the best way to do that is to find a seller who is motivated. It just takes time. What is your prediction then for home prices over the next five to 10 years? So I'll give you five years because I called in 22, 22. It would be eight years. It's flat. It's just flat. It's, you know, flats plus or minus 1%. These are national median home prices, so you can hold me accountable, right? So this is probably through 29 or 30. And that's basically where we've been for four years. And that's just where we're going to be because it takes time. It takes month after month after month after month for wages to grow. And then, you know, if we get the tailwind of lower interest rates, great. But it's just, it's going to, it's going to take eight years.

Starting point is 00:12:08 How do you know that prices will be flat until 2030? That just seems like a crazy prediction. to say, what is the research behind this? What evidence do you have to suggest it will be flat? It's funny. J.P. Morgan also just said that their prediction was real estate was going to be zero, which actually means adjusted for inflation, you're negative, allegedly 3% of year. Anybody believe that? But inflation could be significantly higher than that. I believe inflation's probably more like 5% to 6%, which means in real terms, real estate is going down a few percent every single year. Yeah, again, all these numbers I'm referring to, you're absolutely right, are nominal. not adjusted for inflation. So that's a very good point. Again, I can only refer back to that

Starting point is 00:12:48 spreadsheet because I don't have a crystal ball, but I know what happened last time. When rates went up, 700 basis points, it took 14 or 16 years for it to come back. This time, what did we do different? Well, we raised them over an 18-month period. So my guess, it is a guess, you can call it a prediction if you want, educated guess maybe, is it will take between 8 and 10 years to get back to normal. And that just means prices stay flat. So you're comparing today's environment, though, to an environment a long time ago. Obviously, we all know, things are different now. Like, you can't just say because it happened in the past, it's going to happen in the exact same way today with all of the other factors that are playing in. How does that affect your

Starting point is 00:13:29 prediction? Well, first and foremost, you're absolutely right. We're going back 70 years or whatever it is. So again, you know, it's, it is a long time ago. Well, let's go to something a lot more relevant, the GFC, the global financial crisis, the housing crash where people have PTSD and just think it's going to happen again. Again, I invested through that environment. I actually sold all my houses in 06, so I didn't have any houses in 08. I had 80 apartment buildings. So again, I've been doing this a long time and made a lot of great calls. So why did I do that? Well, in 2006, 51% of mortgage originations were adjustable rate mortgages. Most of them had the these toxic two-year balloons.

Starting point is 00:14:11 So what happened in that cycle is in 2008, mortgage payments tripled. Tripled. So they became forced sellers. And oh, by the way, if you want to talk economics, their shelter cost was $1,000 for two years. Then it was $3,000 for the next $28. But rent was $1,700. So for the first two years, they were net positive. After year two and the rate shot up, because this is a teaser.

Starting point is 00:14:38 rate, they were upside down. And that's why everybody stopped paying. They had jingo mail and people just started sending them in. So motivated sales. But now ask yourself, what was it like in 24, 22? We had over 95% of loans fixed. That is magic. People don't understand why this case-shaped economy is happening. We have 60-some-odd percent of people with shelter costs that is artificially low. Artificially, They lucked out with 2% mortgages and 3% mortgages. Now guess what? They have extra money to buy Teslas, extra money to buy Rolexes, extra money to do Gucci bags, whatever it is. Because their shelter costs, their second largest expense is fixed at an artificially low level.

Starting point is 00:15:25 They're not selling. They would be a fool to sell. They're going to make it up, right? Their payments, $1,300 rent for the same house as 21, right? Today it doesn't make sense, right? If you're going to buy today, it's $2,800 mortgage, 21. But we have 60-some-odd percent of people who own homes that have artificially low shelter costs. They're in the catbird seat.

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Starting point is 00:17:10 And be sure to use our code for 15% off. The code is right here and also down below in the description. Thank you so much to Magback for sponsoring this episode. Now, what do you say to this? Because this post on Twitter claims that the entire housing boom was built on peak boomer spending, peak household formation, peak leverage, peak asset inflation. And their justification is that when boomers get older, they're going to be flooding the market with inventory that no millennials could afford. And because people are starting families later in life, they're not having as many kids. There's not as much of a need for all of these

Starting point is 00:17:47 houses anymore. So I would add one wrinkle to that. It's not only houses, but it's the wrong configuration, right? Baby boomers bought big McMansion. So let's add that to the kind of question. So I studied this a lot. And the demographics look questionable by. 2040, in my opinion. So again, some people are trying to rush this like all baby boomers die on the same day. That's not how it works. First and foremost, people are living longer all the time. Medicine is better all the time. In fact, a lot of people are aging out in their homes, right? So they're not going to assisted living or whatnot. So I think a lot of people are onto something. But again, I think we have 12 to 15 years to figure it out. And maybe we'll have another baby boom when millennials, you know,

Starting point is 00:18:33 start having kids, who knows. But I do, I do agree that. demographics are concerning, but it's 10, 15, 20 years from now. I know, by the way, we're the greatest country in the world, and all we've got to do is turn on migration again, and that problem goes away. How could you be wrong about your prediction? So I ask myself that question all the time. There's macro and micro, a macro wrong. I fundamentally believe that Donald Trump, President Trump, wants to win the midterm elections. That's something I fundamentally believe. And in order to do that, he has to get the straight of Hermuz open. And he has to have inflation start coming down. Also, he just put up Kevin Warsh. And my, again, prediction, guess, whatever, is he's going to cut

Starting point is 00:19:18 interest rates somehow, some way, probably by blaming AI for deflation. If those don't happen, stuff blows up, right? That's something I could get wrong. Microlevel. Again, I've been studying my market of the Central Valley for 25 years. Fresno, where most of my units are, is a very red county in a blue state. If that flipped, that could be a problem. So there's all kinds of things that could go wrong. But again, I ask myself these questions every day, and I pivot all the time. I've made some very big calls.

Starting point is 00:19:51 I'm not afraid to make them again. Now, millennials and Gen Z have been called a renter generation. What do you think is a policy change that would actually get them into a house by 2030. We have to make it profitable to build entry-level housing. I don't think we understand what entry-level housing is in this country. The average home in 2024 was 2,300 square feet. The average home in the 1950s was sub-1,000. We need that extra bathroom, that extra this, this, this, extra that. That's not entry-level housing. That's like the next jump or the jump after that. But again, the millennials, Gen Z, you don't have options. Condos are your best thing, but then you

Starting point is 00:20:32 have to deal with HOAs. So we have to find a way to make building smaller homes profitable. How would it be? Because my understanding is that back then in the 1950s and 60s, land was really abundant. You didn't have all these regulations. You didn't have these standards. And because they have to follow so many things and pay a premium for the land with way more risk with labor, they have to build that just to like make any amount of money. If they built any less than what they currently do, they would be losing and they just wouldn't build to begin with. I completely agree. As I said, if they can't do it profitably, they won't do it. And that's why we're not building them. So I don't have a silver bullet or an answer. You could find government land to give them away,

Starting point is 00:21:15 but most of that lands in places people don't want to be. You could try to lower regulations. There's all kinds of things. You just, you have to have a focused effort to say, hey, You know, again, I'm just thinking out the top of my head. If you build a home that's less than 1,000 square feet, you know, we'll waive X, Y, and Z conditions. That could work, right? You have to create a stick and a carrot. And right now there's neither.

Starting point is 00:21:42 Now, in terms of affordability, Ben Shapiro says that if you can't afford an area, you should just go and move to somewhere else that you could afford. You got a lot of backlash for this. What is your take on that? I say you live where you want and invest where the numbers make sense. Again, there are folks that want to always be around their family. The family unit's important, and that's awesome.

Starting point is 00:22:04 That should be celebrated. That's why I think a lot of folks are getting into these multi-generational living. You're actually seeing builders here in Vegas that have multi-gen properties being built for that. I think that's going to become something. So I would not be so, I don't know, I'll say arrogant to say something like that. Dude, we live in a free country. and if you want to live where you want, great. You just have to realize that you have to make other choices.

Starting point is 00:22:30 When do you think it's worth it to buy a house versus rent right now? In 2026? The only answer is if you get a smoking deal. Right? If you get something that's 15, 20 or percent below real value, which can happen, but it takes work. So how would you minimize the work and maximize the reward? Like if someone wants to go out there and find a place 15% off, what would they do? Yeah, and how do you know it's 15% off?

Starting point is 00:22:56 Because I see some of these deals where it looks like 15% off. But then I'm like, well, no, it's just not worth 100%. It's worth 85% to what they're asking. So let's talk about what I did. So I tried to buy rental property where I lived at the time in Silicon Valley, which I lived in Mountain View. And I spent a year every Sunday looking for this magic cash flow. It didn't exist in 2001 and it certainly doesn't exist today.

Starting point is 00:23:22 So I had to make a choice. where could I go find cash flow? Because I was not going to bet on appreciation. I'd already lost my ass in the stock market. So I wanted cash flow. So ultimately, we found Fresno, California, which was two and a half hours away by car, five-hour round trip.

Starting point is 00:23:38 But what did we find? We found Norris Drive, 1818, Norris Drive East, 93703, look it up on Zillow. We bought it for 10.7. It rented for 1095. It beat the 1% rule. That's all I knew back then. So that's what we got.

Starting point is 00:23:50 And that's where we started. So invest where the numbers make sense. But live where you want. What about, though, for buying a primary residence? So I'll tell you what I did. So, um, 20, 23, I made a decision to leave California and move to Vegas. And we were looking all over the place. This is, again, where interest rates were going up.

Starting point is 00:24:10 I think at the time, interest rates were seven and a half percent. And we put a budget of a million dollars. That's just what our budget was, $9.50 to a million dollars. And all the existing home sales, just existing homes didn't meet our needs. But again, back to the problem with the 52-year spreadsheet identified as builders had a problem. They built the wrong inventory, right? They built for the wave, and then they were letting properties out at the wrong time. We now live in a part of Henderson that's up in the hills. We got something that was 15% off. It had zero lot premium with a view, so you guys know that that's money. Somebody else backed out, so we got all the upgrades for free.

Starting point is 00:24:49 and they gave us a 4.99% fixed 30-year mortgage. So again, I always look for the deal. When does renting and just saving the difference of buying actually make a significant difference? Well, I think today it's probably true for most people because I don't think most people want to do the work. So let me go back and answer that question, how to do it. The only way I know how to do it is get remarkably disciplined. I have this idea called a buy box. I'll give you my buy box from 2001.

Starting point is 00:25:20 Again, remember, I didn't live there, I didn't know anybody, I had no experience in this calendar. This spring, denim gets a softer, lighter update. Introducing Old Navy's drapey denim wide leg, a new fit that moves with you. It's everything you want denim to feel like for summer. Easy, breathable, and effortlessly cool. With a fit that creates natural movement

Starting point is 00:25:42 and a wide leg that feels modern, not overwhelming. Plus, that signature, wait, For this price, moment. Old Navy's drapeed denim wide leg. So I picked 9-3703. It's called the Mayfair District. I picked single-family homes, so not duplexes, not condos, nothing else. I picked three or four bedrooms, two car garage, two bathrooms, one story. Why is that important? Because I looked at that criteria and that criteria only every day for three years. So 99% of the market was, might as well not have existed. But by looking at that market, that criteria every single day and tracking the changes,

Starting point is 00:26:27 A, you know what it's worth, and B, you know when you can get a deal. That's where most people get wrong. Most people say, hey, I want to buy something and they're over here and then they're over here and then they're over here. You get no economies of scale. You don't know if anything's a good value. You're just guessing you're trusting Zillow of all things. It's, you know, just people today don't want to be disciplined and do the work. Do you think people are better off buying a house today than renting? We had someone on recently who was making the argument that the average person is never going to invest the difference. And buying a home for the average person out there is a good financial decision, even today, even at 6.5% interest rates, because the alternative is that they would just spend the extra money.

Starting point is 00:27:07 There's certainly a lot of truth in that if you watch consumer behavior. We do not save money, right? You get a stemmy check, you spend it. We actually just had record tax returns. You guys know the tax returns were up 12%. Guess what happened? They spent the money in Q1. Look at all the retailers, Ralph Lauren, all these other people.

Starting point is 00:27:26 It's just we never save money. So there's a lot of truth in that given consumer behavior. But back to the crux of your question, I don't care if you buy a home or not. If you want to, I suggest doing the work and getting a deal. You make your money when you buy. This is a difference between real estate and the stock market. The stock market every second of the day, even Bitcoin or crypto, you know what it's worth every single second of the time. Real estate is inefficient. You can if you work long enough and you make enough offers and you follow up enough and you learn the different creative mechanisms

Starting point is 00:27:58 and you find the right seller. This is about finding the right seller. You can make hundreds of thousands of dollars the day you close. Most people won't do that. Is success in real estate more complicated or difficult? Ooh, complicated or difficult? I'd never been asked that. I don't think it's complicated. I think it's remarkably simple, but it just takes more work than most people want. And the simple answer to that would just be create a buy box, have your boxes you need to check.

Starting point is 00:28:27 It needs to have this many rooms, this many bathrooms, in this location with a pool, no pool, yada, yada, yada. And then look at it every day for 20 minutes a day because it doesn't take a lot of time. I think it's just Leeitzer or somebody talks about 18 minutes to be in the top 5% of any skill. That's all I'm asking for is 20 minutes a day. So you would say if a random viewer out there listen to that advice, that would maximize their likelihood of success in real estate. Like that is... I'll even go one step further. If they do that every day for the next three years, like I did, they will, A, learn their buy box.

Starting point is 00:29:01 They'll know what value is. They won't have to question it. And B, they're going to have an excellent opportunity to find. to discount because it's just a law of large numbers. I've written 100 offers and gotten nothing, right? I've done that before. Another thing that people say is extremely relevant in today's climate with high interest rates, low affordability, would be creative financing.

Starting point is 00:29:22 Sure. I'm curious, what's your experience with that? And do you think that that's a viable solution for someone that wants to get involved in real estate, but they don't quite have the means to do it? Yeah, creative financing is one of those tools that everybody should learn. But let's define creative financing first. let's call traditional financing 5% down owner-occupied or 25% down investor. Let's just define that as standard.

Starting point is 00:29:46 So creative financing is anything other than that, typically involving the seller, giving you some of the loan, right, whether it's a first, a second, or something of that nature. So yeah, creative financing is very powerful. I've used it half a dozen times, maybe 10 times. But it's always finding the right seller. It's funny. one of the things that I've looked at the last year is what owners of people in my buybox have greater than 50% equity. So what am I doing with that? What I'm doing is I'm giving them two

Starting point is 00:30:17 offers. I'm giving them a low cash offer, but I'm also giving them a higher number assuming they could take some equity back as a second loan. So yeah, creative financing is a tool. It is a very valuable tool. It doesn't work all the time. But yeah, it's certainly a valuable tool. most people go wrong when it comes to create a financing? First off, I think too many people sell it as the magic beans or the magic sauce, and they don't know all the required paperwork. It does take a lot of paperwork to protect you and to protect the seller, which should be paramount in this situation. So you've got to work with title, escrow, lawyers, depending on where you are in the country. But I think the paperwork is the biggest thing people get wrong.

Starting point is 00:30:58 They think they can just take a napkin and, you know, Joe Schmo signed it, and that's not how this should work. There should be penalties for miss payments. There should be a, to foreclose all those things. I think people treat paperwork like an afterthought and it should not be. How could you become a professional in real estate, meaning you're an investor, you're making money, you're just doing real estate for a living when you have no money? Again, that's not who I am, right? You guys know lots of really famous people like Pacemore being all these other folks.

Starting point is 00:31:24 They're real estate people. I was an employee, guys. I had a tech job. I was an accountant. I was a sales guy. I was a W-2 employee. I'm not a full-time real estate investor. I now do real estate on my taxes because I get 16, spend 12, so I don't need any more money.

Starting point is 00:31:41 But yeah, I'm not that person. I tell you to live below your means. That's the key to it. You know what the three-step process to get wealthy is? It's been 100 years this has been true. You want it? Yep. Live below your means.

Starting point is 00:31:55 So create discretionary income. That's step one. You have to have money that you could plant, whether it's stocks, crypto, classic cars, whatever your thing is, I don't care what it is. I got a buddy of mine who has a seven-figure portfolio and ice hockey cards, but that's his thing. That's his jam. So be it. So again, have disposable income. Step one, either make more money or spend less. Olivia and I, at 30 years old, so this is 23 years ago, we spent every penny that came in. Over the course of 18 months, we spent half. So we had 50% of our income that we could sock away to real estate and deal with the problems, right? Broken water heaters and eviction

Starting point is 00:32:33 and all that other stuff. Step two is you've got to become elite at something. Find your thing. Is it crypto? Is it stocks? Is it being a YouTube podcaster? Whatever your thing is, commit to that. Become elite.

Starting point is 00:32:45 And this is the one everybody hates. You got to do it for a decade. You need time to compound. You need time for proof of concept. It's just, we all want things easy today. We want instant. It's not how wealth works. Wealth is slow and consistent and sacrifice.

Starting point is 00:33:03 One thing I find really interesting is how you constantly say, okay, well, like, we'll make 50 to 60 a month, but we'll spend 12. You're like one of the maybe two people we've ever had on this podcast that are like, I'm content with where I'm at. Like I don't need more real estate. I don't need to keep growing. I have enough margin. I'm curious what makes you different than most people who continue to push off the goalpost. And how are you able to do? Is it a better way of life?

Starting point is 00:33:27 Well, I'm certainly not in a position to answer that last question. I will tell you that I'm happy. I'm more than content. I can do anything I want when I want with whom I want. And that's pretty amazing. How are you able to do that with 12? Most people would argue, I mean, Graham would argue, okay, well, if you have a family of four, and if you have this, then you probably need $30,000, $50,000 a month.

Starting point is 00:33:47 I would argue $50,000 a month. Well, our daughter is 35, so she's already out of the house. So that's part of it. It's just Olivia and I. And we only have one, I'll call it a vice, because it's probably more than most people spend, and that's eating out. We love to eat out and get good food. We don't look at prices.

Starting point is 00:34:05 But other than that, we stay home. We're kind of boring. And what would you tell someone who feels like they've done everything right there? They follow your advice. They save money. They avoid debt and they still can't afford to buy a house. What I would tell you to do is keep grinding. This is a, this is, this is, it's not easy but simple.

Starting point is 00:34:23 Back to the earlier point. You just got to keep going. It's only three step, guys. If you don't have enough down payment today, get more of a down payment. right, live below your means. Here's a true story. So I just want to get as close to accurate as I can. So it's probably 2015. We've been buying real estate for 14 years. We probably have over 100 units. I go to a housewarming of somebody who reports to me. So like, you know, like you got people to you. So I'm a director and this manager reports to me. His house is better. We live in a condo.

Starting point is 00:34:58 We never upgraded our condo. We had a 13, hundred square foot condo, never upgraded. We had cars that were 10 years old, right? We just never, we took all our money and socked it in real estate. So he had a better house. He had a backyard. We don't have a backyard. He had new cars. He had a third car. We don't have a third car. His kids went to a better school district. So after this, and again, he reports to me, which is really what screwed with my head. I'm trying to drive home, and it's only five miles probably, maybe six. and I get about halfway home, I have to pull over because I'm bawling. I'm crying.

Starting point is 00:35:35 Because for 12 years, I've asked my family to sacrifice, live below our means. And I don't know it's working. 12 years. And, you know, this, you know, direct reports that live in better than me, at least I thought so. So first thing happens is Olivia drives us home because I literally couldn't see the road. And then she pulls up the spreadsheet and shows us. us where we are. Because I had a

Starting point is 00:36:01 job that took me all over the world. I worked 60 to 70 hours a week. I had no idea where we were. I was always next deal, next deal, next deal. And then she pulled up the spreadsheet and showed me it was working. What does working mean? Cash flow was coming in. We were, you know, we could live on that number at the time.

Starting point is 00:36:18 So it just, it dawned to me. But again, I had that moment after 12 years in building a hundred unit portfolio that I didn't know if it was working. Because I'm an employee. I'm not guru. I'm not running around doing on stages and all that stuff. It's not my thing. I'm just a simple guy who loves to, you know, I interviewed Graham one time and he talked about his fish tank. For me, the economy is my fish tank. I have done the same thing for 35 years. I wake up at 6 a.m.

Starting point is 00:36:46 For the next 90 to 120 minutes, I'm reading financial news because it's a big puzzle to me. It's fun. It's fun for me to watch all these things work together. That's entertaining for me. And now because of YouTube, I just do a daily show at 730 and live and let the world know. I haven't, dude, it's like 300 people watch it. But I love it. So again, I don't have these big desires. I don't want to be a billionaire. You know, one of the nicest things that Pace Morby ever told to me, because I talked

Starting point is 00:37:16 to them occasionally, was Zuber, you got to know thyself. And that was, that's like a big weight fell off my back. Because I suffer the same comparison that I'm sure most. guys do. Like, why can I do that? Why can I do that? This, that, the other. But, you know, at some point I got, I got, I have more than, more than what I need. So, 59, 60, 60. Oh, hey, I didn't see there. I was just getting a quick little bicep workout in and technically I didn't even need to be counting my reps. This thing counts for me. Six, seven reps in. It won't forget. Great timing, though, because Amp is actually sponsoring today's episode and they sent one over for our new

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Starting point is 00:39:08 and in fact these past few weeks have been very brutal. We have worked so much, but there is light at the end of the tunnel. I'm actually going to both Thailand and Japan for the next three weeks with a couple close friends. I cannot tell you how excited I am for that. The beaches in Thailand, to die for. The food in Thailand? amazing, and I'm telling you, it's going to be a blast.

Starting point is 00:39:26 If you travel a bunch, you probably don't think twice about your home sitting empty. But when you're away, you could actually list your place on Airbnb instead of leaving it unused. And if you've ever considered hosting but weren't sure how you'd manage everything, the co-host network can help make it feel a lot more manageable. With this, you could partner with a local co-host who has hosting experience. It can help manage things like creating a listing, managing reservations, messaging guests, and helping make sure everything runs smoothly during their stay.

Starting point is 00:39:50 Honestly, it just feels like a practical way to make better use of a space while also bringing in a little extra cash while you're away. At one point, I hosted my place on Airbnb. I kid you not. The guy that checked in was a fan of the channel. I've never said this before. It was a crazy experience, but the entire setup was very straightforward. Everything ran smoothly, and it turned into a genuinely great experience overall. If you're interested in hosting and you want a little help getting started, find a co-host at Airbnb.com slash host.

Starting point is 00:40:16 So on this very impressive 50-year spreadsheet that you made, what were some of the most interesting findings, the most relevant findings that the viewer could use right now to educate themselves, to put themselves in a great spot? Well, let me answer that with the one thing that was shocked me the most, and that's about inflation. Right. We've heard, you know, we had 9.1% currently, if you believe CPI lie, 3.8, whatever it is. They're all talking about 2%, 2%, 2%. So the one question I asked myself after building it was, have we ever had a period of time, an extended period of time? where inflation was over 2% and it was CPI. And the answer, surprisingly, was 1987 to 1997.

Starting point is 00:40:58 CPI inflation was over 2% that entire decade. So we're talking about the Fed getting below 2% and it's been above 2% for four years. But guys, we've been there before. It was over 2% for an entire decade. So what we're going through today is maybe not unusual or unheard of as sometimes the media makes it out to be. For someone who studies the market so much, have you noticed any correlation between the stock market and the housing market?

Starting point is 00:41:25 Because it seems as though the high-end market is really tied to stocks. And if stocks are doing well, housing does well. There is no question that there's a correlation in certain cities, Seattle, Austin, San Francisco, San Jose, markets like that, where there's absolutely a correlation in stock market. And again, you could see that in transactions because I talk to agents almost every week around the country. and when the stock market takes a big dip, which has done a couple of times the last years, showing stop, all this other stuff, because again, it's their asset wealth there. But I actually want to ask you a different question. Back to the 52-year spreadsheet, because I knew I was coming here today.

Starting point is 00:42:02 We've obviously had three years, and I think we're going to have a fourth year of double-digit S&P 500 growth. Do you guys know if that's ever happened before? Yes. Do you guys know what happened the next 11 years? it was suboptimal growth. It was flat. I have the numbers here on the spreadsheet. Right?

Starting point is 00:42:21 It went from like 1280 to 1302 or something after 12 years. So I thought that was interesting. Now, why would that happen? Well, it's called reversion to the mean, guys. You've had four years of 20% growth, and you've probably heard Warren Buffett and everybody else say stocks return 8%. Right? You guys have heard that.

Starting point is 00:42:42 Well, you just had four years of people. 20, in order to get back to the historical run of eight, you're going to have some rough years. So I've heard the argument, though, that we can't look back 50 plus years in the market because our economy has fundamentally changed since the Internet. And when you look starting the year 2000, the price to earnings ratio has skyrocketed. Sure. And now that could be the new normal. And even though we are high on the scale of the new normal, we're not.

Starting point is 00:43:14 not at the peak. And with AI and with our global economy, everyone kind of rising at the same time, they say that these elevated returns might continue longer than you would expect. Well, again, nobody has a crystal ball and that is absolutely possible. History says it's not going to end well. Right. Again, if you want to talk about AI, again, stock market, all of that, I look at it all the time. I think there's a lot of circular revenue in there. I do think that, again, studying economics, if you go back and look at where we've had crises before, you could look at railroads, you can look at utilities, you can look at the internet, DSCL lines, all of that. There's a time where money comes flying in, right? It just keeps invest. Every idea is funded. And then it's not. And, you know, I don't know why AI would be any different. Now, if mortgage rates drop to 4% tomorrow, what would happen to the housing market?

Starting point is 00:44:14 would it be the prices explode or would it be that supply finally begins to catch up? Well, I love that you ask that question because my brain always goes to why it collapsed to 4%. Because that's a different answer. For example, one of the reasons it could collapse to 4% is we are now in a depression. Unemployment's 11%. It could be something nasty like that. Or it could be the other side. Kevin Warsh says we've got some new whiz-bang inflation measure and it's 1.8% and we're this

Starting point is 00:44:44 that and the other, and then he could cut. So there's really two answers to that. Let's say the second answer, because he wants to do what's called trimmed averages. Correct. Which would basically take out the extremes of the inflation report. So in this case, he would take out the extreme of rising oil. Correct. All of a sudden, now inflation goes from four down to 1.8, the other than target, and then they could cut rates. Absolutely. So if that were to happen, because that seems plausible. Oh, absolutely is plausible. One of the, I think Kevin Warren is going to do three things. One has changed the definition of inflation, go from CPI to this median trimmed or whatever it's called. He's also going to stop the Fed presidents from communicating so much

Starting point is 00:45:22 and then he's going to use technology to get better economic metrics. This whole telephone survey nonsense is going to be flushed down the toilet. So those are the three things you could expect Kevin Warsh to do inside 90 days. So what you're describing is a rosy and fun picture. It's really interesting. I actually think prices would go down. because I think we've had four years of restricted selling. And if you take rates to 4%, enough people who have been just kind of getting by, like we talked about earlier,

Starting point is 00:45:55 I think a lot of them would list immediately. And any time you get more supply in a very short window, prices will fall. So I actually think that median home prices fall maybe for four to six months if interest rates go sub four percent, which is probably a probably most people would disagree with, but I think that's pretty certain. So do you think anyone can be a real estate investor?

Starting point is 00:46:21 Can, yes, should, no. Who should and shouldn't? It's folks that can understand this is a journey. It's a 10-year journey to building wealth. There will be lots of twist and turns in some very bad days. People will steal from you. Stuff will break. Permits will be a problem, right?

Starting point is 00:46:41 So not everybody can handle the ups and downs of real estate. So can everybody, sure. Should everybody, no. I don't think everybody's wired to sacrifice for a decade, deal with the BS that happens, and, you know, still smile at the end of the day because there are some very hard days. Is it still worth it to invest in real estate, though? I don't know why it wouldn't be. Again, if you can find the right deal, if you can get the right debt structure and you can hold for more than a decade,

Starting point is 00:47:08 history says you're going to be okay. You've got to own assets. Dude, we live in a fiat-based economy. This is what drives me crazy. You guys think that we're going to go back to the gold standard or something crazy like that? No, we're going to grow our way out of this.

Starting point is 00:47:22 They're either going to default or we're going to grow. Dude, inflation's a feature, not a bug. So why wouldn't you just invest in the stock market instead? Well, again, I think everybody should do their thing. I have a very dark history with the stock market.

Starting point is 00:47:35 I turn from seven to two to go to 40. I chose to become a real estate expert. If you want to take the time to study the stock market, if you want to take the time to do that, then you should do your thing. Right, I'm not here to tell you that real estate's the right answer for everybody. In fact, it's probably not the right answer for most people. Most people should buy index funds.

Starting point is 00:47:55 Most people should buy mutual funds. They should save for their 401K. But if you want to grind and you want to have a buy box and you want to be a freak of nature and look at it every day for three years like I did, then I welcome you to the party. You can get wealthy that way. Real estate is inefficient, guys. The stock market's not inefficient.

Starting point is 00:48:13 The price of Intel or the price of Nvidia or what is known by everybody on the planet at every second. That's not how real estate works. I just sold a duplex. I told you that in the opening. I valued this duplex on my financial statement at $400,000. I would not have bought it for anything more than $250 today. I had somebody offer, somebody reached out to me. They wanted to run a sober living.

Starting point is 00:48:38 facility there because it's two four bedroom, two bath houses on one lot. So big houses like 1,800 square feet or something. It's perfect for what they want. So I didn't want to sell this house or this duplex. You know, I have a list of properties that I'm going to give my daughter, Teresa. And this was on that list because it just prints money, right? It's easy. It's yards. It's got a fence down the line. So it just operates like two houses. It's not connected. I wasn't going to sell. So he kept pushing, kept pushing, kept pushing. And I finally said five, nine Again, I valued it at 400. I'm like, hey, dude, if you want to pay 50% over, I'll sell.

Starting point is 00:49:16 So I say $599, he ghosts me, or at least I think he ghost me. Turns out he's got grant money from the state of California. And he comes back to me at $5.5.5.5. Again, I value it at $400. So I come back at $5.50. We settle at $5.37. I also take the commission from 5% to 1% as is nothing else.

Starting point is 00:49:42 How is that responsible from the state of California to throw money at a property significantly above what it's worth? They have a need, and that is the only house or the only setup. They identified five properties, and mine was the unicorn that fit their need.

Starting point is 00:50:00 And the only way to get it for me was to overpay. So I'm not here. I'm telling you right now, they overpaid. See, I'm going to say this. I'm not saying it's illegitimate, but I've, like, Nick Shirley's video in the hospice situation. I've seen it. It just makes me think that when I was doing real estate in Los Angeles, the sober living people who would reach out were always seen as a bit of a joke because they would come in and offer like double the price for anything. And they were always the most, like, unscrupulous people who would just, like, come in and they

Starting point is 00:50:34 would be wearing chains and this and that and they drive up on a brand new bends. And they just didn't seem like a sophisticated investor or business. But somehow they had 30 grand a month to spend. And it just, it made the wheels turn that like something's off. Something's off. Yeah. So I have no idea if that's what this person. I only did everything over the phone and email because I had a team down there.

Starting point is 00:50:59 But yeah, it could have been. But again, we sold it. We raised more capital. and, you know, we'll probably put in an apartment buildings. What are some of the biggest lies about investing in real estate that you're seeing spread online? Because I'm sure that you see a lot of crazy content, especially from some famous and potentially like people see these people as expert real estate investors. I think a lot of people do two things that annoy me about real estate investing. A,

Starting point is 00:51:26 they try to make it sound easier than it is. The days are longer, the calendar's filling up, and I want to feel as good as this beautiful summer weather. That's why I've been loving Grooons. It's one daily pack of gummies that covers my greens, vitamins, minerals, and even has six grams of prebiotic fiber, so I don't need to juggle a complicated wellness routine on top of everything else. They taste amazing. They're easy to toss in my bag on the go.

Starting point is 00:51:50 Plus, they're vegan, gluten-free, and HSA-FSA eligible for reimbursement. Save up to 52% off with code podcast at grooms.co. That's code podcast at jewns. And B, they try to sell the lie if you don't need any money. I think both of those things are, they're going after the wrong crowd. They're going after the crowd that doesn't have a, doesn't have the money to scrape together to, you know, really get into this. And that's why they should just make more money or spend less and keep saving.

Starting point is 00:52:20 But I think there's a lot of unscrupulous people that are selling the idea of easy and also a version of no money down. So what's your thought then about just buying real estate right now, outright, in cash as an investment. So back to the answer of debt. And this is why what we're going through today in multifamily is exactly what happened with residential and the GFC. It's the debt that blew up

Starting point is 00:52:44 and it's the payment that blew up. You could add on top of this, you know, insurance taxes also in some parts of the country. But guys, it's always the debt. Resolution RTC, debt. Savings and Loan crisis, debt. It's always the debt that rose up. So again, what I tell most people, and you'll hear me fight against this all the time, is just get 30-year fixed-rate debt.

Starting point is 00:53:05 Don't get arms. I don't care if your plan is to live there five years. Don't get a seven-year arm. 30-year fixed-rate debt, because you guys don't realize, you guys probably do, but the audience doesn't. We are so uniquely gifted with the 30-year fixed-rate mortgage. It is a one-way bet. If rates go up, do nothing. Rates go down, you can refine.

Starting point is 00:53:23 Canada, five years. Australia, 10, whatever it is. It's the debt that blows up. That's what Canada's real estate market's in trouble is because the debt's blowing up. So is it worth it then to buy in cash? If you have the cash, is that a good bet? Again, if you're going to be, so the answer to that question, Graham, is where are you in your journey? If it's your first property, most of you will never get there doing the Dave Ramsey, save, save, save, save, save.

Starting point is 00:53:48 Because the price will just get away from you. You can't save fast enough. I believe when you get to the point you can have 50% equity, that is great. right? I think I said the numbers earlier. We're at 25 and 9, so that's even below 50%. But that's where we're comfortable is right around the 50% number. But again, we were not there for a decade. I took every penny out of real estate the first 10 years. I did cash out refies, 1031 exchanges, all that stuff. Because again, I was about growing the base. So you just have to decide what kind of investor you want to be. Are you growing the base and just keep rolling the equity up or at some point do you want to get more conservative? So where are you in? and your journey is the answer. What's the most difficult part about being a landlord? I'll answer that in two different ways,

Starting point is 00:54:32 because being a landlord for a single-family home is very different than apartment buildings, so we'll split that up. So being for a single-family home, it's probably dealing with late payments because, again, that's, because again, in a single-family home, the tenant does all the maintenance,

Starting point is 00:54:49 or at least most of the maintenance, you know, they're supposed to do the yard and water and all of that. So, again, it's dealing with tenants who are telling stories or lies. So collecting rent. And then multifamily. God, so I was not ready for this. It's like you're a counselor.

Starting point is 00:55:06 He's parked in my spot. His music's too loud. The radio's this. The baby's crying. The dog did this. Blah, blah, blah. So you're a social worker. How do you invest your margin outside of real estate?

Starting point is 00:55:17 Because if you're able to save an additional $40,000 or so $1,000 a month, what do you do with it? Do you buy stocks, crypto, real estate? Save it? No. we actually enjoy life at this point. I told you guys earlier, we did three weeks in Australia. That was from the gravy. We just did a week in BAMP. That was from the gravy. We're doing a cruise in a month. That's from the gravy. So we're enjoying life. So you're just spending it. Yeah, we're enjoying life. Because again, I think most people just keep changing the goalposts. And I've been very good about not doing that. How did you not do that? It's, I don't know if it's, I can only speak for guys. It is tough for a man who's a, you know, AAA personality to come. kind of check out. And the nearest thing I could tell you is, you know, we've climbed this financial mountain now 25 years. It's been 25 years. And what Olivia and I have agreed to is we're,

Starting point is 00:56:11 we're going to sit down and we're going to enjoy the view. I am not saying I won't stand up and climb higher later. That's how I get around this. I think at 53, I still have a good 10 or 20 years to really get in it if I want to. But I also know that at 53, I could sit here for 20 more years. So how I get around it is I give myself permission to stand up and grow if we want to. And that is enough for me to not have this voice in the back of my head calling me a loser. Because even where I'm at, the people that we interact with, most of them will call me a loser probably.

Starting point is 00:56:49 Because, you know, I'm not trying to be a nine-figure person or this thing or that thing. I'm like, dude, I got a pretty good life. And so at what point do you think most people could live a life like that? That is the most important question. I believe most people don't know what their life costs. They don't know what their life costs. They don't know where the money's going. So I suggest most people do a 30 or a 90-day audit and track every freaking penny.

Starting point is 00:57:18 Because you've got to know what your life costs. That's what we did. Then what we did is we did a need versus want analysis. Do we need this or do we want this? And we were ruthless. We did this together. But we took our expenses from 100% to 50 by being ruthless. So from $24,000 a month to $12.

Starting point is 00:57:44 Well, again, so again, I was 30 years old at the time. So it was probably 8 to 4, something like that. Did you notice a lifestyle difference? from eight to four, or was it like all these things that you just weren't paying attention to? Our friends did not know what was going on. That's the most thing. That's what it is, right? Again, I was in Silicon Valley and a sales guy and people would drop crazy money on belts and shoes and new cars and lease payments and keeping up with the Joneses.

Starting point is 00:58:11 We were just not participating. We were made fun of, I'm sure, right? Because, again, we had, you know, at the time, eight or nine-year-old cars. I know we were made fun of at our silly little 1300 square foot condo. Right, because we could have easily upgraded three or four times. So, yeah, it was our, it was, we had to change our network because we just refused to participate in the culture of consumerism. I'm always curious how much other people are making. When I see them living this like crazy lifestyle, I'm always wondering, is that like a paycheck to paycheck thing?

Starting point is 00:58:42 Or is that like they're making way more or like, I know, I know hundreds, if not thousands of people in the Silicon Valley. And I mean a salary at Facebook is 386 grand 386 grams the average salary at Facebook and most of them are living paycheck to paycheck because they do dumb shit with money. This is crazy. It's wild. Now some of that's because it's expensive to live there. And then they and again, both parents work

Starting point is 00:59:10 so they're kids in daycare, right? So there's some of that real life stuff. But no, I'm sure you both have seen articles about people making two or three hundred grand living paycheck to paycheck. it is all over the Silicon Valley. And most entrepreneurs don't realize how much time and money they're burning in traditional hiring.

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Starting point is 01:01:47 financial independence then? Well, that's actually really interesting. You guys did an interview with Caleb Hammer. You asked him something like, have you seen people be successful at this, right? Taking his advice and getting on this track for financial freedom. And his answer was very spot on, in my opinion. It's people who have gotten fit or overcome something hard. Why was that? I mean, that was the most valuable part of that conversation for me, because it is so true, getting financially fit is a 10-year journey, and most humans cannot do that for 10 years. But you know what? A health journey? Six months. You could change your body in six months, right? So again, I think he's right. The people that are going to figure out how to get wealthy have done something hard and seen the

Starting point is 01:02:35 benefits. Because if you can't make those connections, why are you going to sacrifice? So again, And I think if you want to get wealthy, get healthy. You know what's something crazy is I read that there are more people in the United States that have a million dollars or more than have a six-pack. I've read that too. And it's not even close. It's pretty crazy. That's crazy. And when you really think about it, a six-pack is simply eating less calories.

Starting point is 01:03:03 Cribb, then you, what? Let's be honest. Neither of us three have a six-pack. I'm just saying. Neither of us three have a six-pack. Okay. Like, how many people do you even know that have a six-pack? Jake Udell. Mike Parker will claim he does, but he knows he doesn't.

Starting point is 01:03:19 And if you're watching this, Mike, you do not, you maybe have a two-pack. Jake does. Jake does. He probably got etching. No, he does. I don't know. Very few people have six-packs. Liver king is-eaching, you know?

Starting point is 01:03:34 Gosh. Yeah, but no, I really do think if you accomplish something hard, and it could be anything, It could be learning a second language or whatever. It's just something that takes shorter duration. You're much more likely to get wealthy because you make the connection. It just reminds me of the same thing. It's the Dave Rand. I feel like every single time someone just absolutely drops a bomb on the podcast,

Starting point is 01:03:55 I'm like, that just sounds exactly like something Dave Ramsey said. What you just said is it's the same thing that he said where it's like, how do you actually motivate someone to change, which is effectively what we're asking here? And he just says, take it from the eyes of a farm. Will a farmer plant the crops? Will he water them on a schedule? Will he do all of the things, tend to his plants to make sure that they grow?

Starting point is 01:04:18 If he thinks they won't actually grow into a nice yield of corn. No, he won't. But if he knows that he does all of the things correctly, then he will have a yield, then he'll do it. And so it's just like the faith, in his opinion, the faith that if you put good in, you'll get good out, which is effectively what you're saying. Have you been through something hard, worked hard at it?

Starting point is 01:04:37 Seen the outcome? Yeah, seeing the outcome. and then you're willing to do it again. I want to give a shout out to Dave Ramsey. So I've seen a lot of presentations in my life. I was a sales guy, so I saw lots of these. He gave the most meaningful presentation I saw. It was at a think media event with Sean Cannell.

Starting point is 01:04:52 And Dave Ramsey basically was on stage saying, I've been saying the same thing for 40 years. He hasn't deviated. And that was such a great thing for me to hear. Because, again, I think getting wealthy is remarkably simple. And I'm going to keep saying the same thing. You guys heard me talk a buy box. I've been saying the same thing. So the fact that Dave Ramsey, after 40 some odd years, it's saying the same thing and still impacting lives, I love that. I love that.

Starting point is 01:05:19 There's the most impactful speech I'd ever seen. What do you think about the fact that Dave Ramsey would not borrow a billion dollars at zero percent interest? Again, you can never judge a man to each his own. I would certainly take that money, throw it in a T bill and enjoy the money and then pay it off. It's brain dead simple to me. But again, if you're anti-dead and, you're anti-dead. And, you're, And you don't want it, that's, you know, I get it. I will say that his, based on the context of his life, context aside, I don't think it makes sense. But in the context of his life, it actually kind of does make sense. If you already won the game.

Starting point is 01:05:50 What do you have to gain from 3% in a T bill? Yeah, if that's the question, yeah. But if, you know, you take a broke person, he would tell them, oh, you shouldn't do that. I'm like, okay, well, in that case, it will actually change their life if they do that. But for him, it's not going to change his life. He gets 3% on a billion. I completely agree with that. Again, it's really funny.

Starting point is 01:06:08 I've seen a lot of people, quote, win the game, and they make one more play, and it blows up. I knew a guy back in the GFC who was worth $10 million, and he didn't take one 50K loss on a custom home, and his entire empire broke. What do you mean by that? So he was trying to sell a house. He was selling big, at the time,

Starting point is 01:06:27 two and three million dollars homes in the Bay Area. Now they're probably $7 or $8 million. But he was into this house, and the buyer wanted to get a $50K, credit for something. I don't remember what it was. And he said no. So he had to put the property back on the market. And then it sat and sat and the interest kept eating him alive. And then that caused another one and another one and another one. And then he was wiped out. How common is that? Well, is when this is, I'm glad this goes back to that spreadsheet. This is why I had to build that

Starting point is 01:07:00 spreadsheet because it's more common than you're not than not. People, you know, they don't realize the cycle changes. They always, think the cycle is going to go up and cycles, that's not how cycles work. Cycles go up and they go down and they go up and go down. So back to building the spreadsheet. I just wanted to know if I was going to get hurt again. So yeah, cycles happen. Do you think I'm missing out by not investing in real estate more aggressively?

Starting point is 01:07:23 Again, you guys have, you are the top 0.1% of what you guys do. You should be full on that. real estate would distract from your gift. It's hard. Now, if someday you get married, for example, and she is interested in real estate, you could get her to be a real estate professional and things of that nature. But I think you are so, dude, lean into what you're really good at. Like selling comfort calls. Do you think that I could just then, like, save up as aggressively as I possibly can, buy a place cash and then just rinse and repeat that process?

Starting point is 01:08:02 like would that be smarter then? Because then I could probably eventually apply for real estate professional status. No, you're never going to. No, you're never going to, no. I don't work too much. Let's just, you know, call for what is. In the event, I do end up filing as a real estate professional. I don't work too much on the ice coffee hour.

Starting point is 01:08:16 You're the income differential would not make that. Okay. It's not going to happen. Sorry. I've thought about it too, but it's not going to happen. But your wife could. That could happen. You guys heard it here.

Starting point is 01:08:26 He's getting married. Yeah. If you're a real estate professional. Or husband. If you're a real estate professional. and you're a woman. You want a date. Yeah.

Starting point is 01:08:35 Let me know. Let me know. So yeah. Okay. Noted, I will not. So let me answer to the. So again, if you are committed to real estate because you just believe it, again, I always go back to know thyself. I would not own properties free and clear.

Starting point is 01:08:48 I would get 50% loans. That's what I would do. If I was in your situation. I have this house right now. I might move out of it at some point. Sure. I have $400,000 in debt on it. It's probably worth $700,000.

Starting point is 01:08:59 I live in it now, so I have the exclusion. from the capital gains tax. Correct. Should I then sell it when I move out or should I just rent it out? Again, I don't know. It's 2.875%. I don't know all the numbers,

Starting point is 01:09:10 but assuming it would cash flow, I guess, assuming there's, it's not, I call it an alligator when you have to feed it every month. Again, at 2.87 or whatever it is, I assume it would cash flow? Yeah.

Starting point is 01:09:20 Just keep it. And again, you don't keep it. Would you throw up? Here's my argument, though. Well, hold on one sec. So again, you could keep it and try it because, again,

Starting point is 01:09:28 that five-year exclusion, you could try to be a landlord for three years. And if you don't like it, then sell it. Then bounce. But sorry. The problem with Jack's house is that any amount of vacancy or one repair or one major thing would eat up a significant check of the profit. And if one thing comes up in the year, the amount that he's netting on this, even with his mortgage, is so insignificant that it's not even worth his brain power.

Starting point is 01:09:52 Like just doing one episode. One episode, a year of the iced coffee hour, would surpass. I'm sure would surpass the rental income. So again, I want to lean into my two earlier answers. Again, you guys are very, very good at what you do, and you should lean into a new income streams and partnership. You guys are at the first inning of what should be a multi, you know, inning game.

Starting point is 01:10:19 So keep going. And you're right. Anytime, you know this, real estate consumes brain. It's like brain damage. And that could set off a bad day and it can cause you to do this. do that or you get antsy. But that said, I do believe that real estate for guys like you could just be a forced savings account. So, I mean, you've got to know thyself.

Starting point is 01:10:42 That's the way I see. At the very least, I have diversification of investments. So, like, I would have, all of my money is in stocks. Do I want more money in stocks? Or could I at least have $700,000 invested in Las Vegas real estate? I don't think that's, like, the worst thing in the world. So, again, I think with that five-year exclusion, you try it out for a couple of years. and you see if it impacts your job.

Starting point is 01:11:01 The second it impacts ice coffee hour, sell the damn thing. Yeah. But then there's going to be that cliff of like year three or maybe it's like, well, maybe this is good enough. But year four comes around. You got to replace that roof. All of a sudden, the AC goes out. You should be.

Starting point is 01:11:16 Tenet moves out. And then it's like, well, then you lose the 250 capital. Well, you should. Well, yeah. That's why the three years is that you've got to be really on that. Because if you're going to get past three, you're in it for 10. Right. What do you think about it?

Starting point is 01:11:30 investing in commercial real estate. So define commercial. So anything that's like multifamily, multi-unit, apartment complex, I'm not talking, I'm talking like living. So multifamily, just so we're clear. Multi-family is an investment that I am looking at personally. Why? Because in the spreadsheet, it showed me that after interest rates went up with Paul Volker, the RTC occurred eight to 10 years later, and properties were sold at significant discounts. So earlier in this episode, I told you about selling a duplex, the fact that we've raised seven figures. I am looking, to buy multifamily apartments at 60 to 70% of debt. That's what I am looking to do.

Starting point is 01:12:07 Now, in my market of California, that's probably still a year away. That's already occurring in Texas. I've seen some things in other parts of the country. But this bomb, it's going to be a great transfer of wealth. And I look to be a part of it. So I think multi, like if you have the stroke, it's multifamily for me. Brandon Turner said something that I thought was very interesting. He said the value of real estate is effectively the cost of the real estate.

Starting point is 01:12:33 Like if you can build cheap. Exactly. If you can build cheaper than the value of real estate will go down. And he thinks that AI will cause things to become so deflationary that you'll have humanoid robots that are able to build a house. This could be 15 years, but they can build a house in a 10th of the time and a 10th of the cost. And if that's the case, then you'd have perfect houses propping up everywhere, which would increase the supply, and then values would go down.

Starting point is 01:12:58 What do you think about something like that? How will AI just affect real estate in general? So first I'll say that I do believe AI is going to be hugely deflationary. It's going to be deflationary in areas other than housing sooner. I don't see the world the same way because, again, it's not only the construction of a home, but it's also the land. A lot of the great pieces of land are already done. They're already taken. right so I think what happens is the land like in the hills around here with views that gets more valuable

Starting point is 01:13:32 because now you're just building little shacks next to each other so I think you're going to see case-shaped housing you're going to see the before and the after what return do you get on your portfolio well that's I mean dude you're talking to a 25 year vet do you want return on equity do you want to return on capital invests do you return on assets first return on return on on assets. So what would that be roughly? 12, 11.5, 12%? And then return on equity.

Starting point is 01:14:01 Well, here's the truth, guys. I have no money in any of my deals today. I've refied everything out. Where is your money? So the money that I put in is a down payment across our portfolio who has already been refied out. So I have none of my own capital. And I already gave you the number is 25 and 9.

Starting point is 01:14:17 I have none of my original capital in that number. So it's infinite returns. It's a very nice number. Do you think today's prices are more about land scarcity or just bad government policy? Oh, government policy. I think what Nick Shirley and others have done, but he's the most recent, have shown fraud, waste and abuse is everywhere. NGOs are everywhere. I think, you know, my personal guess is we're losing 30% of our money to waste fraud and abuse.

Starting point is 01:14:49 What do you think is a public policy that people think is good? compassionate, but actually backfired. Rent control. Right. Rent control has never worked. In fact, there was a, I think he was a German economist once said, the fastest way to destroy a city other than bombing it is rent control. Why is that?

Starting point is 01:15:09 Because you stop investment. You have no movement. You have a family move into a three bedroom. The kids move out. They don't leave. Then you have people coming up that can't get housing. Look at New York City. New York City has the largest rent.

Starting point is 01:15:22 control by quantity and like 20% of their units never get repaired because it's not it's not economical to do it so it just deteriorates yeah it's one of the policies that was the reason why i kept uh one of my properties completely empty because i knew once i planted it out i wouldn't be able to ever sell it uh with a tenant in there yeah if you're in the wrong part if you're in the wrong part of town yeah there's even a triplex that i have and i've kept it i've kept one of the units empty for seven months, another unit empty for five months, just because it doesn't make sense to rent it out. And if I didn't have the rent control and I just had the freedom to say, hey, listen,

Starting point is 01:16:04 you could live in here for a year, I'll give you a great price because otherwise it would be empty, but after a year I want to sell it. Yep. So I'll give you a 60 days notice. You can live there for a year. You can't do that, which is so crazy that you lose control over your own property, the second they move in, they have more rights than you do. L.A. County is probably one of the only counties in the country. If you gave me a house, I would sell it immediately. There's no way. It's communism.

Starting point is 01:16:33 So what places do you think investors should absolutely avoid? And where should people be looking for ease of being a real estate investor and success? Again, L.A. County is the most obvious one you should avoid with the 10-foot pole. I think you should avoid most high-price city. and I'll give you a list, San Francisco, Austin, Seattle, New York City. Because if you go to most of those markets, you're betting on appreciation. And that's not who I am. And that's not what I want you to be. I want you guys to have cash flow.

Starting point is 01:17:04 So again, you're going to be in tertiary markets. You might be in the Midwest. Yeah, that's what I would do. Is there any version of rent control that actually works? I have not seen one. I've not seen one that works. And I've read lots of studies. Are there any policies that you think,

Starting point is 01:17:21 would just be a good idea to implement. And it could be both for the landlord or the tenant. One thing that intrigued me that I read last year, and I don't know where it went, was trying to encourage ownership, almost like rent to own. I think it was Blackstone or somebody was doing that in one of their communities. I think finding a way to get tenants on the property ladder,

Starting point is 01:17:45 it's got to be ethical. It can't be, you know, 5X or whatever. But if there's a way we can help people that are paying rent on time, ultimately become owners of said property in eight years, I think that would be wonderful. What do you think of the anti-landlord movement? I think it's an anti-wealth movement. You know what's crazy?

Starting point is 01:18:07 I saw this post on Twitter, and it keeps coming up over and over and over again. There's a landlord that had not gotten paid for like six months, and he pulled up in front of the property and took a photo. And the tenant just got a new e-classmer. And the landlord said, I can't believe it. This tenant owes me $20,000, but just bought this new Mercedes. They've not been paying their rent. What's going on? And all the comments were like, good for the tenant.

Starting point is 01:18:33 Yeah, anti-wealth. It's just where we are. Why? Why do you think this is occurring to such a degree? Because Adam Carolla made a really good point. He was saying, you know, back when, at least when I was growing up, you see a guy driving down the road in a Ferrari and you would just think, oh, man, if I work really hard, one day and I save my money and I do something great. I could get that Ferrari. But now it's like,

Starting point is 01:18:57 oh, look at that douchebag in a Ferrari. I can't believe that person. Let's throw a rock at the Ferrari. I think of all the good things that social media is done. I think there's plenty of bad things. And probably the worst thing is they've created echo chambers where you just continually get fed the same nonsense. Because again, I sold machine learning. I sold AI products for a decade. and they're non-thinking, really. They're just giving you what you asked for. So if you're watching that content, you're going to watch more of that content.

Starting point is 01:19:28 And it just becomes this toxic soup of negativity. I think one thing that too many people have lost is hope. If you don't have hope, none of this matters. Dave Ramsey. And you know what's so funny is that it's that exact philosophy that is keeping people just, broke. Like if you don't think that you can do the right things and then the right things will come back to you, you're not going to do the things. You're just going to say, oh yeah, look at this

Starting point is 01:19:59 person. They're a landlord. They probably were passed down wealth. It's like, hey, guys, the studies show that that's not how most people become wealthy is because, oh, it's passed down generation to generation. All of the sudden, you just live a nepo life. That's just not the reality of the situation. And if you think that that is, you're going to think, oh, well, success is just out of my control. It's just the fact that I was born in the family. I was born into. I live in the areas. I live in. I went to the school that I went to. None of this is possible for me. So instead, I'm just going to leave hate comments and think that rich people are rich because of something they can't control. Yeah, I can't help. If you have no hope, you're not even going to be in the game.

Starting point is 01:20:35 Yeah. You think that you're poor and like, you think rich people are rich because of something they can't control and you're poor because of something you can't control. It's like, hey, if that's the case, you're going to stay that way. Yeah. If you don't have to. have hope you can't go anywhere. You can't play go. You're not going to be in the game. I actually use this analogy with some of my friends, right? You guys go to, or you guys have been to sporting events, right? There are some people who live in the parking lot. All they want to do is drink beer and scream at the TV. They're not actually in the stands. And then there's people that are actually on the field. Too many people today are comfortable being in the parking lot, drinking and

Starting point is 01:21:11 saying dumb shit. I want to be in the stands or even on the field. And, you know, I think most people are comfortable just saying, hey, it's Friday, let's get drunk. How important do you think it is, though, to really push yourself? Like, it seems like you're at a very comfortable point, but do you think that it might be a benefit to kind of put yourself, you know, against the wall a little bit more and force yourself to keep going? So let's talk about that. So, again, I lived that life for 30 years. I had a sales quota every 90 days I could be fired. I was obviously raising a family trying to keep marriage happy,

Starting point is 01:21:48 traveling 100,000 miles a year. So I lived that in more ways than not. And I just don't have to do that anymore. Right. But I do reserve the right to start again. But again, dude, if you make 40 and you spend 14 and you're already spending the others on crazy trips, why? But that's the difference is that you're able to, finally draw that line.

Starting point is 01:22:16 Correct. Like, what is the difference in the thing that you're saying and the difference in the way that Graham feels? So you two are a lot closer. I know Graham casually. My guess is he's going to always

Starting point is 01:22:27 change the goal posts. Part of that's because you guys are around billionaires, right? You guys are interviewing Mr. Wonderful and all these. So you're around, you know, people that I can only dream up. So you're seeing these things.

Starting point is 01:22:39 I'm not seeing them, right? They're on TV for me. But yeah, I mean, and again, dude, I was to say he's only, you're 30, 31? 36. 36. Oh, damn. Yeah, I know.

Starting point is 01:22:49 So, again, I didn't come to this until I was 51, right? So again, age has something. Like, when you get to be 50, more than half your life's gone. I was a grinder just like him, different numbers, but same thing. I'm not going to judge anybody. But I do think, you know, I think he'll just move the number. He'll go from 50 to 100. Well, I was thinking, because I do a lot of research on the value of a dollar today

Starting point is 01:23:13 and what it's worth. Sure. And I did this whole analysis with Grock. Sure. That said that the ages between 42 to 45, the optimal ages to start shifting from saving to spending, given your life expectancy. Bill Perkins, yeah. Yeah, given your life expectancy and overall health. Yeah.

Starting point is 01:23:37 And then starting in the mid-70s, your health significantly declines. I've seen that, yeah. So it said that, you know, with compound interest, age 42 to 45, that's when you should shift from saving to spending. I would love to see you, because I don't know if this is true and it may have been taken out of context. I heard you spend 2% of your income. No, he doesn't. Oh, I heard that on a togie. Oh, no, 0.5%.

Starting point is 01:23:59 Okay. Well, no, no, 2% is what I base what I could spend. On your income. No, no, on his assets. Oh, yeah. I talk. I don't look at income. Income means.

Starting point is 01:24:08 Okay. Income he doesn't spend any of. And he spends maybe 0.5% of his assets. I don't spend any, no income. So my philosophy is this. If I make $100,000, it's not $100,000. All that is, two grand a year in perpetuity forever. Maybe $2,500 if we call, you know, 2.5% of that.

Starting point is 01:24:26 So the way I see it, every $100,000 I make, $2,500 a year. And that's what I mentally live off of. But he doesn't actually, because that's still too much. Like, actually, how much, like you spend? Oh, I just, I don't need to yet. You spend maybe 0.5%. I don't like to spend the money now because I don't need to spend the money now. But I like the option to be able to.

Starting point is 01:24:49 You'll never need to spend that money. Like, realistically, it's whether you want to now or you want to later. It's going to be a matter of one. But the issue, but according to Grock, it's better for me to wait until 42 to 45 to start drawing down. But that's for most people that don't have the nest egg that you have. That's like telling the average. Like, are you really going to compare your financial situation to the average financial situation? Yeah, but it's invested and it could drop 50%.

Starting point is 01:25:16 And so I also calculate the 50% drawdown. Yeah, but there are studies that show 2.75% has never failed even if you did it at the beginning of the great depression. Mentally it would be stressful for me if it drops 50%. Because then I'd base it on, you know, the 50% value. The way that I see it is this basically if you were to encapsulate everything you just said, mentally, if you can't handle it, then that suggests to me you are mentally very fragile.

Starting point is 01:25:42 And I think if you're going to try to solve... Mentally, very strong. Because I have the fortitude not to be influenced by others' opinions. Yeah, there you go. I actually disagree with that. I think that makes you mentally weak to not be willing to be challenged

Starting point is 01:25:56 with a potentially stronger opinion, right? I could be challenged. It doesn't mean I'm going to, you know, fall to someone else's opinion. Well, you're... You can't choose whether not you're being challenged. You're being challenged right now, whether you like it or not. So, but you can choose how you respond to better logic. No, I'm open. So as a complete outsider

Starting point is 01:26:15 of this fun, entertaining conversation, I've already seen, again, I'm an outsider, so maybe it's wrong, but I've seen Graham already start to loosen up. He's taking more trips than I remember him doing before. Premium economy, too. Dude, well, he's tiny, so he could fit in coach, so it's easy for me. Tiny. But I think he's already evolving. Now, some of these numbers are just like, you know, he's kind of like Warren Buffett. Warren Buffett didn't need all that, but it was the game. He's playing the game. Don't say that, man. Why would you compare him to Warren Buffett? That's like the worst thing that you could have possibly said. Compare him to Scrooge or whatever. Yeah, like not Warren Buffett.

Starting point is 01:26:58 Like, you have Mr. Burns, you have so many other comparisons. And you pick Warren Buffett. The reason why he does this is because people, they say stuff like that. You have to say, Graham, you know, like, I, the reality is everyone's going to say, Jack, why are you telling Graham how to live his life? At the end of the day, I'm not doing that. And if you heard our private conversations, they don't necessarily go like that. I'm always very encouraging. Yeah. And saying, like, Graham, I really wish that you would spend your money a little bit more on, on things that literally just improve the quality of your life. Like, if you want to go see a hockey game because your dad's in town, like go to the hockey. Oh, yeah. Take your dad to the hockey. Come on. We had this challenge.

Starting point is 01:27:33 And the challenge was to spend a certain amount of money in a month. And so I created this budget where I had to spend it in 30 days. Okay. And I'm actually falling short of that. But I was able to take out family when they were in town. We saw a hockey game. We went out to a few really nice dinners. And I got to say it was great.

Starting point is 01:27:55 And just allocating that to the side of having to spend it gets rid of the, I don't want to call it the hesitation of like, oh, I don't really need that. Or we don't have to go there. We could get takeout instead. Yeah. And it helps. You need to realize that you have done some amazing things and you have lots of rewards that are already raining down on you and more will come.

Starting point is 01:28:21 But you also got to enjoy life. And if that's taking your family to a hockey game or spontaneously taking your wife to New York or you've got to have more experiences, it can't all be work. and it's not all about savings as well. So I've done some crazy trips. I did a six-star cruise. It was 50 grand or whatever it was. And when you're on a cruise like that,

Starting point is 01:28:46 it was less than 100 people. So it's a high-end thing. You're around people that are worth 50 to 100 million. Easy. But almost all of them admitted that they worked too long. Think about that. You're worth nine figures. You're 80 years old.

Starting point is 01:29:04 your wife died. I remember a conversation with, I think his name was Mike or Mark. He's like, I've told my wife we'd travel, but I just kept, I just kept going for the next number. She gets cancer.

Starting point is 01:29:15 She's out in six months. Then he quits, and now he's traveling, and he cries all the time because he's not with his wife. You just don't know what's coming. This number here, you should, you know,

Starting point is 01:29:27 you should set some of that aside and just help people or go explore, rain, you know, goodness on other people in your family. it will make you a happier person, I promise you. What are the best things to spend money on? Experiences, not stuff.

Starting point is 01:29:43 It's not that rug that drives you crazy in your house. It's experiences. And I would challenge you the next time you go to Japan, fly business. There's nothing like lying flat. He's flown business before. Yeah, I don't know if you bought your own business flights before. Yeah. Oh, really?

Starting point is 01:30:02 Zip air. Okay. Well, that counts. As long as you can lie flat. Yeah, you're a lie flat. But like hear out Graham's perspective, he's like, yeah. So explain how your justification goes into not wanting to fly business in the future. It depends on the flight.

Starting point is 01:30:20 I said if I can't sleep on the airplane. Even there can I? No. And when you're flying out in the morning, let's say 9 a.m. Sure. I'm not going to get any sleep on the plane anyway. So I think it's a waste to have a lie flat seat. when I'm not going to be able to sleep

Starting point is 01:30:35 I'm just going to sit there and toss and turn. So I may as well save a few thousand dollars when I'm not going to be able to sleep. Now on the other hand, I think if it's an overnight, like a red-eye flight, and you could get sleep on the airplane and wake up the next morning,

Starting point is 01:30:51 then I think, okay, I could look at the value of the next day and just say, okay, then that's a good expense. I would challenge you to change that. I would say any flight less than three hours, Economy Plus, whatever you want to be is fine. But anything over three hours, it's just a better seat. Even if you're not lying flat. It's just you're not crammed.

Starting point is 01:31:11 You're not getting bumped into. Premium economy is nice. Like those seats recline like almost. I've traveled on every airplane. International premium economy? I thought is, I thought international premium economy is... If you don't buy business class on every six-hour flight, you're doing life wrong. Where are you flying?

Starting point is 01:31:31 How long is a flight and what do you flying? It's 13 hours, but it's broken up between two flights, five hours and then seven. With anybody or just- Denmark. Me and Macy, let's go to Denmark. If you ever fly anything less than business with your wife, I'm going to slap you. You might need to slap them. We already bought the flight, but maybe I'm just saying going forward.

Starting point is 01:31:58 Oh, yeah, this one doesn't count. Yeah, this one doesn't count. But again, you have the ability to sprinkle little pieces of goodness on the people that you care about the most. That's what you should be thinking about. You should be surprising Macy with business class. Don't even tell her because she's probably thinking you're going to be an economy. But then here's the thing. And then all of a sudden, now that becomes the new, like, the minimum.

Starting point is 01:32:21 So what? Business. So what? Sometimes it's just a, it just feels like, it's not a good. Graham? It just feels like you're wasting. money. And then it just feels as though that's an irresponsible amount of money.

Starting point is 01:32:36 How many flights do you take a year personal, not business, not all that? Not that many. Maybe three. If you are taking any flight over six hours, in those three, that's not business class, you're not being a good husband. Why do you say that? I'm trying to find an angle

Starting point is 01:32:56 that will open them up to doing that. I don't think that's the angle. That's not the, I took a shot. The point being, I want to see it as your friend. I think the quality of your life will be improved. I agree. Genuinely, and I've said this for years, and every single person that we bring on this podcast, whether they're an AI expert, whether they're an entrepreneur, whether it's Kevin O'Leary,

Starting point is 01:33:16 whether it's Michael Zuber, whether it's Pace Morby, whether it's Alex Hormosey, whether it's literally any single person here, Dave Ramsey. We all say the exact same thing. So tell me what is it within your logical driven brain. tell me what it is that makes you think that you could be right and every single other person that's ever been on this podcast, not a single person has said your level of frugality is productive. Because I'm happy.

Starting point is 01:33:43 Is your wife happy? Yeah. Okay. If that's the case, then I can't, I have nothing to say against that. If that is the case, then I fully... Yeah, but again, as somebody is two decades older than you, almost two decades older than you, I will tell you, life gets short.

Starting point is 01:34:00 And the things that you're going to miss is not the stuff, it's the experiences. And if you're taking three business class flights a year with your wife, and again, you guys are going to eventually have kids. And then that's going to, you know, dent the travel. Just make it more meaningful and more enjoyable. A six-hour flight in business class is better than economy plus. You can't argue that. It's better.

Starting point is 01:34:22 Yes, it's more expensive. But that doesn't matter to you. It does. No, it doesn't. It does. No, it doesn't matter to you. It doesn't matter. It doesn't matter to me, $8,000.

Starting point is 01:34:32 So it certainly doesn't matter to you. If Graham is happy, then I have nothing to say. No, agreed. If that is truly the case, I just question whether or not that is the case. But if you say it, and in your heart of hearts, that is the case. I want to be happy too. I will believe you. I'm just looking out for you.

Starting point is 01:34:50 I would be happier with $8,000 and flying premium economy. Like, that would make me happier. Like, I just don't get that much more enjoyment. Okay. On the bigger seat. Fair enough. If you're happy, Graham, that's all we want for you. That's the most important thing.

Starting point is 01:35:06 Yes. Now that we have excoriated you, what can we be improving on? Both of you? Yeah. I don't think you could improve on it. Your speaking skills are great. I mean, maybe improve some title thumbnails in your channel. Like, instead of going live, just post videos without the live aspect as it cuts down on viewership.

Starting point is 01:35:26 Um, gosh, Jack. Where to start? Oh, man, there's just so much. How old are you again? 27. Wow, my daughter's 35. Wow. 34.

Starting point is 01:35:38 Okay. All right. For a while, I would say Jack would jump from thing to thing to think to think to think. And it's a little scattered. Like the real estate investing thing. Yeah. Like the options thing. And there's all these different things when like just the time would be better spent on the podcast.

Starting point is 01:35:52 Yeah. Yeah. You guys, yeah. I would have, I mean, I don't know what you were doing, but, You guys have your, that was my answer for real estate, is if it's going to take mind share away from this. You guys are the first inning of a 10- inning game. Yeah.

Starting point is 01:36:05 Go nuts. I guess sometimes my only, my only thought is that I wish we would go heavier on the podcast. Like, I'm always like, what do you mean? What is the word heavier? Like, drop everything. Like, the podcast is always like the number one. And for Jack, I don't think he's happy with that being like the number, like above all else. I think he wants.

Starting point is 01:36:24 How many do you do a week? We do five a month. Five a month. So this counts as one? Yeah. You do five months. Okay. Yeah.

Starting point is 01:36:31 Okay. But I would like to see, let's keep growing, expanding. Let's travel anywhere at the drop of a hat if we need to. I think Jack is a little more balanced. Now, maybe that's a healthier perth. I actually don't disagree with everything that he's saying. Like, I would say that my actions actually do go in accordance with drop everything in order to travel somewhere. We've had one experience over the past.

Starting point is 01:36:54 However, and I was just really sick. which is the reason. I was like, okay, well, like, podcasting is like, yes, it's a means to an end, but it's also an enjoyable journey, and I want to make sure I'm enjoying the journey. Where is this thing in a year? You guys have any idea? Where do you want it to be? My gosh, I would really like, I was a little worried about the five episodes a month and keeping the cadence on that without sacrificing quality. So far, we've done a good job at that. I love to continue that. But I think there's so much more, like, in terms of iced coffee hour membership content, I really feel like that's a huge. expansion. Do you have that today? Sorry. We do. So we set up a membership where they get early access to every episode, but a week early. It's the full uncut, because sometimes for the main episodes, we'll rearrange segments or we'll cut out something that we feel like is hurting retention.

Starting point is 01:37:41 And how many folks are a part of that now? We have 1,400 people. Nice. Okay. But I think that we could expand that. I want to do. Do you have tiers? Yeah. So we have two tiers, but I want to be able to also like we could do maybe a Q&A with you. Yeah. Or a dedicated members episode separate from this of just like a QA or like a Jack and I episode a week. Like I feel like there's so much more that we would expand. I would definitely suggest, I mean, maybe you do it your highest tier, whatever.

Starting point is 01:38:09 But yeah, like doing one of these and then doing a Q&A. Yeah. If you want to try that with me, I'm game. Post this. What I would really like to do is a live Q&A. Yeah, of course. So like let's just say this episode posts on a Sunday. Sure.

Starting point is 01:38:22 And we could say, hey, guys, Wednesday for channel members, we're going live. Yep. You watch this episode, any questions you have. This is it. If you want to test it, I'm in. Yeah. Just give me a week. Deal.

Starting point is 01:38:34 The problem is, like, those ideas hinge upon other infrastructure. A ton of other things. I didn't know that. That, like, that would complicate things, whereas I would rather focus on just, like, overall exposure and growth. So, like, what that would look like is, like, better distribution of the podcast. Clips. More clips.

Starting point is 01:38:51 More, yeah, it's just stuff like that. How many posts are you guys doing a day? So many. It's, I don't even know. Dozens? Dozens? Yeah. I mean, Twitter alone could be a dozen.

Starting point is 01:39:00 Okay. Yeah. It's a lot. So stuff like this. And then it's a conversation of, you know, what ends up happening is that we end up focusing really just in the core product, which is the podcast. But then I look back six months ago, I'm like, oh, if we had started this thing six months ago, we would have done this and this and this.

Starting point is 01:39:16 So it's something that I think over the next two months, we're going to start. to see you as soon as we could get ahead. As soon as we have three episodes already done, edited, uploaded with intro, like everything, then I think we have the breathing room to start saying, okay, here's how we could grow. So that's our

Starting point is 01:39:35 next goal. I like the fact that both of you are, from where I'm sitting, have different ideas, but you guys are still moving forward together. That's cool. That's fun for me to watch. Yeah, fortunately it's been one of, I mean, what's the only partnership I've ever had? And it's the easiest partnership I've ever had. Who knows? Maybe I'll get another one. It would be the most difficult one I've ever had.

Starting point is 01:39:50 I thought it'll be worse. We've been really lucky because I think at the end of the day, what makes it easy is that both Graham and I, surprisingly, are pretty easy individuals. It's kind of weird. At this point, we've known each other for so long. Yesterday was a six-year anniversary of the iced coffee hour, and we had been working together for quite some time before that as well. So obviously, we're very familiar with each.

Starting point is 01:40:11 I've lived with the guy, unfortunately. I've had that. He would flush the toilet. Displeasure. Yeah, I would flush after I peed, and he would get upset and ask me if I could pay for each flush. and that is not a joke. I kid you not. He will say it's a joke.

Starting point is 01:40:24 He'll say it's a joke. He's not joking. He looked up the cost per flush in Santa Monica when you're living there. I left a hundred bucks on the table and say, go for it. It's insane. But fortunately, above all else, it's become more of like a sibling-like relationship, which I think is what's displayed on camera. People say, oh, Jack and Grand, they're just constantly bickering and bantering.

Starting point is 01:40:45 Yeah, and we do it off camera, maybe even worse. But we also travel. together and we hang out and we do all of these things like brothers would. I don't think anybody thinks you guys. Oh, yeah, yeah, yeah. Yeah. Also, we started this new business idea. So it's in the works right now.

Starting point is 01:41:01 It's called extra dollar.com. Okay. And it's to optimize credit card rewards to give you reminders of things that expire. For instance, the MX Platinum Dell credit, Uber credits, DoorDash credits, travel credits, like all these things that people forget about. It's going to be a good way to send out reminders. And then as a premium version, you're able to link your cards and track different awards. So that's the goal.

Starting point is 01:41:31 We're working on it. And it's open right now for people that want to sign up and just will keep you posted when it launches. And then those people that sign up will be the first ones to be able to try it out. Sure. Make sure it's working properly. And then we'll roll it out over a bigger audience. That's fun. So because we realize, I think, you know, we want to do something outside of the ice coffee hour.

Starting point is 01:41:52 Because it's so difficult with this business is that if we travel for three weeks, everything's basically grinds to a standstill. Yeah. And so it's either we have to like run to get ahead and then we could just like coast. And then you have to run to catch up. Yeah. Like with Chris Camillo, we have to film with him and then post within a few days. Otherwise, like what he says might be outdated. Yeah.

Starting point is 01:42:13 And so it's, it worries me even then. It's like filming three weeks in advance. It's like so much could change in three weeks that even what we said today might be like, oh, maybe that's not as up to date. So we got to do something outside of the podcast for longevity. Well, I have no doubt that you two guys will figure something out. You've proven time and time again to continually think, iterate. And you're not afraid to flush bad ideas about you give a shot, some are bad. You're afraid to flush a little bit.

Starting point is 01:42:45 Yeah, apparently a penny. I'll give you 20 bucks on the way out, so it's got them covered. But yeah, it's, no, I think you guys are on to something. Keep, keep innovating, keep getting creative, keep just, you know, getting around the right people. Part of it, part of getting in life is being in proximity. You guys have the ability to be around some amazing people. So hopefully that rubs off and, you know, gives you even bigger, bigger possibilities. Yeah.

Starting point is 01:43:09 Michael, thank you so much for coming on the podcast. Guys, thank you so much for watching. If you want any more information, you want to like that. learn more about real estate. I highly recommend you tune into the lives. All of that information will be linked down below in the description where you can also find extra dollar, where you can also find the index grams group, where you can also find probably other things as well. Everything is down below in the description. Yeah. Subscribe like. Thank you so much for watching. Thank you. Thank you for coming on the podcast. Until next time. See you.

Starting point is 01:43:36 Hey y'all. It's Kelly Clarkson with Wayfair. Ever order furniture online and wonder what if? Like, what if it doesn't hold up? That sofa was four days old. You should have ordered from Wayfair. With Wayfair, there's no what-if. Just style you love and quality you can trust. Visit Wayfair.ca.ca. Wayfair, every style, every home.

The Iced Coffee Hour - This ALWAYS Happens Before A Housing Market Crash… | Michael Zuber

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