August 2019 Insider’s Report: Inflate Or Die

Inflate or die.

This is something that we talked about last month - negative interest rate policies and zero interest rate policies. The Insider's Report this month is a little bit more about negative interest rates and what it means to you, what it could mean for all of us and some things that they're testing out in other places in the world. This is why we've talked about for so long why savers are losers, why the stock market, stocks bonds, mutual funds just aren't an awesome investment because you're at the whim of the market. You're at the whim of a million uncertainties that you have no control over at all. However, when you are investing in real estate, and I'm not talking about buying your own property, your private residence or your personal residence, I'm talking about buying a rental real estate. I'm talking about buying apartment complexes, I'm talking about buying self-storage, etc. This gives you the four things you look for in any investment.

What to look for when investing

One, it gives you control because you control, you become an insider. You are controlling the asset, you're controlling the investment. But also it gives you four other things. It gives you an amortization. It gives you, depreciation, taxes, and it gives you cash flow, which is really the most important. Then it gives you the bonus, which everyone gets. It's the last, but everyone puts it first, which is appreciation. That's the bonus. And that's what happens when you buy correctly. When you buy correctly, you can get appreciation, which is amazing. And then you can take out money, refinance, take it out tax-free and go buy more property. Most people make the mistake of selling their property and then getting hit with tax capital gains and then going to try to buy something else. Then you're getting hit with after-tax revenue, after-tax income. So why don't you just take it out tax-free and use that to go roll to the next thing?

Negative interest in other countries

What I want to talk about really quickly today is negative interest rates. I believe it's in Denmark, they're trying negative interest rates, which means you pay to put your money in the bank. That means when you go to save money - and that's again something that none of us are taught in school - when you have money in the bank, that's not your money anymore. Legally, we have a fractional reserve system. The bank can go then gamble that money in the stock market. It can go lend that out. Every dollar or 90 cents can be lent out to the next person. Every bank is different. Every place is different. Say it's a 90% fractional reserve system. In general, the bank can go do the velocity of money it's called, right? So they can go take your money and go do what they wish with it.

You paying the bank, does it make sense?

There are many stories about this and across the world, as I said. There are your stories from people in different countries where there are zero interest rates or negative interest rates. But again, think if you're a person that you have $10,000 in your bank account and you have that sit in your bank account. At the end of the year, you have a hundred, $500 come out of your bank account without you doing a thing just vanishes. Just gone from your bank account. That's the negative interest rate. You are paying. Germany just issued the first 30-year negative interest rate bond. Again, same thing. You are paying the government to buy a bond. What in the world is the purpose of that? Can anyone explain the purpose of that? It doesn't make any sense, right? The government's telling you what they want you to do and in places like I said, I believe Denmark, they are doing the negative or they're paying owners of rental properties and the property. They're paying instead of you getting hit with an interest, you are getting paid the interest.

It's already here

That is something that may eventually come here. We have obviously a ton of uncertainty in the markets. The zero interest rate policy, the negative interest rate policies - people are talking about it and it's being bantered about everywhere all over. If you look at any financial site, whatever, they're talking about that already there. They've already tested that in many other countries.

What does it mean for you? It means that you eventually are most likely going to be paying to save money. That's why Robert Kiyosaki always talks about sellers or savers being losers because it used to be fine. You could go put your money in the bank. If you had to say $1 million, you worked 40 years and you had $1 million in their bank account, you can live off that interest. You have paid a 15% interest. That's $150,000 a year that you are now taking an interest. Well, when you're making 0.01% interest, you can't live off $1,000 a year.

Hedge yourself

So what are you going to do to change that? Well, it could be rental properties. It could be real estate. It could be self-storage facilities. It could be in other areas. But it takes education. That's the problem with all this. Those aren't easy investments. The easiest investments are the most sanitized. There are the 401k, there are mutual funds. Mutual funds are one of the only investments where you can lose money and still get taxed. And again, they're the most sanitized investments. That's where the average investor lies. That's where 90% of America lies.

Find the way to get educated. That way most of us, hopefully, aren't those across the world that are getting zero interest rates or negative interest rates. Even as simple as a hedge - gold and silver, or something to that effect. I mean, again, there are so many stories that people coming from those countries and saying, "Oh my goodness, like I cannot believe. The money, the currency that was there and what they were doing to our currency."

As I said, I wanted to just put this out there because again, you're not gonna see this anywhere on the financial CNBC or Fox News or CNN. They're busy talking about Trump and how he's the worst guy in the world and who knows whatever. The most important thing - this is really impactful, I was listening to someone the other day and they said, "Is there a session coming?" Who knows? No one really knows there's a recession coming. But you can have a recession coming or you don't have to have a recession coming. It's up to you.

 

Just like one of my mentors, James Rickards, same thing. "You can be on a gold standard. It doesn't mean the government's on the gold standard, but you could be on the gold standard. You could be on a silver standard. You can hedge yourself against coming chaos."

I've talked to so many people over the years and it's funny because most of us, we know something's happening as human beings. We can sense danger, we can sense trouble and most people know things are coming, know things are happening. Yet, a vast number of people don't take any action because it's a lot of times easier not to. It's scary to take action, whatever it may be. Please don't be that person. As I said, I love talking about this stuff. I love trying to position myself and my family in the best way possible. I feel I have a duty and an honor obviously to do that for my family, but also for our businesses and our clients. I know we give incredible service and I know we give an incredible experience to our clients. I know that it's a disservice. It is a disservice for us not to be in business. So I want to be able to go and walk through that chaos, walk through that coming storm wherever, whenever it may be that way we are there on the backside and we can clean up the mess. We can prosper on the backside of that.

How do you do that?

As I said, hedges, being versed in real estate and being able to invest properly in the different asset classes. That way we can get through that storm and that's coming. It's coming sooner or later. I don't know if it's coming in the next year or if it's going to be right after that or it can be five years from now. I thought I was going to be five years ago, as did a lot of the people I follow. Well, we're in the inflate or dye world now. We are.

A lot of the negative interest rates, zero interest rates aren't in textbooks. They're not in your college professors textbooks. Let's just say that. Right? So they're not in there. You didn't learn about that because that wasn't a thing. That just got invented in the last 10 years. So, what we're doing is unprecedented. The money we printed the currency I should say is unprecedented and most of us never thought that was a possibility. That's why we thought, many of us thought it was going to crash five years ago because it should have crashed again five years ago. And it didn't because we're just inflating. We are pumping our economy full of currency and we are lowering the interest rates. Easy money's everywhere. And that's why asset prices everywhere, whether it's real estate or the stock market, whatever. That money, our parents told us that money doesn't grow on trees. Well, it grows in the fractional reserve system and it grows in the treasury and the Fed. It grows there. Actually, money does grow, It doesn't grow there. It grows in a printing press and money is everywhere. It's trying to find a home. That's why asset prices are going up in many different places.

Assets need a home

Crypto, gold and silver, real estate, businesses, whatever it may be, it's going up because there's so much currency. It's trying to find a home. That's why you see these weird undulations in these, in these increases in many different markets. So again, be educated and know the difference. I think one of the biggest problems is just a lack of education in all of these. Whether people do anything about it or not, great. But at least if you're educated in it and you know what's going on, you can at least give yourself a chance. You can understand what's going on and you can say, "You know what? I get it. I get what's going on." You don't feel slighted, at least the very least. You're not asking the government for handouts. You're not asking the government to do things for you. Because at least if you know what's going on, you then have some type of control.

We will talk more about this next month. I appreciate you guys and listening, Your time, your attention, your energy, it's the most important thing we have because it truly is something that again, I've been talking about this for five years. We've been doing videos I should say probably about 10 years, but we've been doing videos on this for almost five years now or four years. It's just one of those things that are coming. It's inevitable. It's the cycles of life and it's happened over and over and over again.

So just being prepared as a key.

If you have any questions or comments or concerns or anything, shoot them in the comment section here. Let me know. I would love to talk about more with you. You want to talk about it privately, that's fine. It's something that we've been preparing for years now and we're in a very interesting time. I appreciate you guys more than anything. If you are on the podcast listening, go to the Facebook channel (@legacygroupMI) or the YouTube Channel (@legacygroupMI) and go comment there. I would love to have a conversation with you. Send us a direct message @legacygroupMI, on Instagram or Facebook. Like I said, anywhere. Send us a direct message. You want to talk privately about it. I know we get a lot of comments and questions about stuff off the public channel and off the comment sections. I know it's not always something people want to talk about in the open.