89. Gold vs. Bitcoin – Which Safe Haven Asset Wins? - Drunk Real Estate

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
So Jay, This
is the way a good host works.
They write an intro for things
and then they
actually practice it.
What they're going to say
and go through it a few times.
So if someone goes in and deletes
full segments
of what they were practicing,
it's going to make it worse
because they're going to
remember what they practiced.
And then I'm going to be like,
I had something written here

(00:20):
and someone just deleted it.
I'm trying to avoid what you did
last week
where basically
you just did
my entire segment for me
before I could say anything.
Wait,
so you're saying in 20 seconds,
I'm able to do what
you take 12 minutes to do?
Maybe you should take
some cues from me then.
And cut
what you say down
a little bit and be a little bit
more succinct.

(00:46):
Welcome to Drunk Real Estate.
Grab a drink.
I enjoy the show.
Hey there.
Welcome to episode
89 of Drunk Real Estate.
I am Kyle Wilson,
Ashley Wilson's husband.
And tonight
we have a very special show
with a very special guest.
AJ is off wheeling and dealing.
I forget what he was doing,
but we
we were able to get a guest host
for this episode

(01:07):
that I am particularly
very excited about.
Fun little fact
about 16 or 17 years ago,
I was playing pro hockey
and I decided that
I want to take my money,
invest it in real estate.
And back then, podcasts weren't
nearly as exciting
or popular as they are now.
Now,
I know this might be unbelievable
to some of our younger listeners,
but actually, radio

(01:29):
was more popular than podcasts at
one point.
So I stumbled
across this show
called The Real Estate Guys.
And I loved it.
Listen to it every week.
And I think interesting topics
that weren't just like,
you know, your cookie
cutter topics
with typical interviews.
They had this monthly segment
Ask the Guys.
It was always the best.
It was awesome.
And, since then,

(01:50):
real estate guys,
they're more than a radio show.
They're kind of this whole
full blown education company
helping investors in all aspects.
And we're so lucky
to have one of the guys with us.
Robert Helms, how's it going?
Robert?
Hey, great to have you,
be on the show
and have a chance
to talk to you guys.
I love what you do,
and I'm thrilled to be invited.
I love the radio voice, too.

(02:11):
Like we're
just shooting this shit
before this.
And you, just a little monotone,
you get.
You get in your element
and you're like,
yeah, that's it as well.
And it's,
well, it's awesome to have you.
I'm sure you heard
it was called Drunk Real Estate.
Did you bring a drink to drink?
Drink with us?
I would be remiss
if I had not brought an IPA.
I'm a beer guy.
This is a hard one to find.
It's called Head
Full of Dynamite from Fremont

(02:32):
Brewing in Seattle, Washington.
And my good buddy Randy Hobbs
just brought it to me.
As we were getting ready
to see the Eagles
play the other night.
So I'm going to enjoy a hazy IPA.
And it's a big one
because I hear this
is a long show.
I've heard Robert's one of
the the cheapest guys
to get, information out of,
because you just got to find him
at a bar and buy him a beer and

(02:53):
and that's all it really takes.
Pretty much.
So, so welcome all.
Do the same with you, Kyle.
We just don't get good
information. That's that's true.
You need to buy me 2 or 3,
because in that.
Otherwise, I'm a little grumpy.
Mauricio. What's up buddy?
Dude, I'm excited. I'm.
I'm pumped to have,
You know,
Robert is one of my early,
early mentors.
I've known Robert
for 20 years now.

(03:13):
And, you know,
when when you hear my story
of leaving the firm
and going to work in house,
Robert was the first guy
to give me a job out of,
out of the law firm.
So, a lot of great memories
with Robert.
Maybe.
Most importantly,
Robert is responsible
for making introductions
that led me to meeting
my wife, Heidi.
Oh, I think it has really changed

(03:34):
the trajectory of my life
and the very few people of
that directory.
So, Robert, super pumped
that you're here.
Looking forward to it. I,
I'm switching it up a little
bit because as you guys know,
we're in a little bit
of a fitness challenge.
And so I've kind of
stepped away from wine,
especially Costco wine.
And I'm splurging a little
with the McCallum's today.
I'm doing a little McCallum's,

(03:54):
you know,
let's just see how high
the number goes over
the next few months.
It will probably start at 12,
go to 18,
and then maybe
when I win the bet,
I'll we'll bust out some McCallum
25 or something.
In Vegas.
I mean, I say
I'll have that drink with you.
Awesome. How's it going, Jack?
I'm doing well.
I'm really excited
about this show, so

(04:15):
I didn't know Robert.
I knew of Robert forever,
but I didn't
get to meet him until.
I think it was about a year
and a half ago, and I took his.
He has a sales training class.
The real estate
guys have a sales training
class, and I took it.
And if they can help
me become a better sales guy,
you know, it's a good class.
So, I have to thank you.
I don't think I thanked you
after that class, Robert,
but thank you for that.

(04:36):
And then we got to hang
out last year at, at,
limitless.
Thank you.
That's where we covered.
We went to the same college.
Yeah. That's great.
That's right.
So we always went to college.
I went.
I.
Went.
I sure hope you did.

(04:57):
Oh, you guys visited a college
back in the day?
I got.
Well, it was a pub
near a college.
Exactly, exactly.
We went to college between.
Between the bars.
What do you drink? And Jack?
I'm double fisting tonight,
so because of the weight
loss challenge, I'm
trying to get in
at least 3 or 4 cups of of green
tea a day.
Good for the,

(05:18):
the calorie burning.
Keep them tabagisme up.
And then, of course,
go kind of go
with a little bit of wine.
So I picked, a French,
la petite lait Papeete by H.J.
Fabbri, a malbec. Sure.
I've no idea what it is.
It was in my wine fridge,
so I figured,
let's go French tonight.
You got that?
Well, you
you got that from Costco,

(05:38):
I assume I did not,
or you got it from somebody
that you have no idea
who gave it to you or or not or.
And you better
you better stock up on those,
because the price of wine
is going to like,
double or triple or quadruple
over the next year.
I was literally about to say
I picked the French one
because I know,
we're threatening them
with tariffs.
These could go up in price
pretty soon.
So, yeah,

(05:59):
California wine
should be fine, right?
Yeah, yeah, yeah.
So I'm
going to enjoy the French wine
while I can. Actually. Fun fact,
a guy I think,
I don't know
if you know Marie from Josh.
He, he owns a winery
and a vineyard in new Jersey,
and they actually have
a license to, to do champagne.

(06:21):
That's Josh Allen from Renault.
Josh Macallan? Yep.
Right.
He's the only one in the U.S
who can who can do champagne.
So if all of a sudden
they're putting 200% tariffs on,
French champagne,
Josh is just going to be
laughing all the way to the bank.
That's going to be check.
Out check out
Renault Rhino Winery,
just outside of Atlantic City,
new Jersey.
The last place
you would expect them

(06:42):
to be making champagne
just outside of Atlantic City.
And why is Josh
not sponsoring the show?
I'm not quite.
We'll get. Him.
We'll get him on this.
But actually,
because they'll be good
timing to get him
on this podcast, say, like,
how much are you going to make
in the champagne deal?
I, I should have invested
more in his.
Yeah.
Do you need any investors,
any more investors?
All right.
Cool.
We're ready to get into this.

(07:02):
Gentlemen, what are you drinking?
Oh, that's I forgot. Yeah.
Thanks, Jay.
You always remember.
You're not drinking,
that you're not drinking
that tasteless, colorless.
Oh, I knew
you were going
to give me shit on that. So.
And I thought it was
a special episode,
so I bought out
a decent bottle of.
I'm going with the Angel's Envy.
Oh, nice.
The bourbon.
It's a special one, too.

(07:22):
It's it's I got it.
I got as a gift.
It's all engraved and everything.
Barrel select one.
So it's a special one.
So there we go.
We're all.
We're all doing our duty tonight.
Ashley.
Ashley,
actually let you splurge
on that one? Well.
She's actually nice.
That was a gift.
That's,
You know, I'm still holding out.
I'm trying to get the Blanton's,

(07:43):
but I can't find it
for for cheap here.
And I refuse to spend $150
on a bottle of Blanton's. So,
one of these days,
I'm going to come
and I'm going to be all excited.
I got
got my Blanton's
for under 100 bucks.
Anyway,
let's get into this.
It's that time of month again.
So you guessed it.
We're due
for another economic update.
Stock market's in freefall.

(08:04):
You'd think with that,
all the data would be calling
for a recession.
But February
actually saw a bit of a
bounce back
from the scary numbers
in January.
Remember our last episode
in January
talking about recession calls?
We had all these doom and gloom.
With that being said,
consumer sentiment
is hitting new lows
and job numbers are concerning.
So, Jay,
are we still on track
for this April recession

(08:25):
that you've
basically locked in for us,
or can we kick
that can down the road
a little bit?
Well, let's be clear.
I called an April recession
two days
before the stock
market started to drop.
So I'm not going to. Get a J.
This is the third episode
that you've said that.
Hey, you brought it up.
I'm just reminding.
You are you backtracking
from this prediction that,

(08:46):
the Friday, the last Friday, it.
Was right.
April 4th.
Oh. Right before.
That's right.
Yeah.
Is that
are you backtracking
from that or now? Nope.
I think that'll be
a pretty bad day in the market.
And I think April could be
a pretty bad month.
But let's talk about it.
And, Kyle,
I was hoping to bury the lead
a little bit, but you,
you kind of.
You kind of cut it off.
So let me start

(09:07):
with the day before.
Before you start, though.
I mean, Kyle,
do you have a timer?
Because, you know, I'm
a little concerned
on this episode.
We do have a lot to cover here.
I'm not I'm. Not.
A. Ted talk commentator.
So let me start with the fact
that I don't want
to conflate the stock market
with the economy.
I know a lot of people think
the stock market's
dropping, therefore
we must be heading
into a recession or vice versa.
The two are I'm

(09:28):
not going to say
they're unrelated.
But just because
we have a couple of weeks
of a market correction
doesn't necessarily
mean we're in a recession
or even we're heading
towards a recession.
You can have a couple of
bad weeks in the stock market
without it, meaning
that there are major issues
in the economy.
That said,
I think we may be
heading into a recession,
but for reasons
completely separate
from the fact

(09:49):
that the stock market happens
to be dropping right now.
And so we have
it's March,
we got a bunch of the February
market data,
economic data that came in.
Inflation was down
after a spike in January.
So that was good.
Jobs numbers are about the same.
A lot of people
are concerned that
with all the layoffs
in the federal government,
that we're going to see
a spike
in jobless claims
and a spike in unemployment.

(10:10):
Haven't seen it yet,
not say it's not going to happen.
It probably will,
but we haven't seen it yet.
We gotta
we got to wait a couple months
for the job revisions.
Then we'll freak out.
Yeah, and we'll see them,
retail sales numbers.
They rallied back.
We had a really bad January
where we dropped
almost a percentage
point in January on retail sales.
So we were up a little bit
on retail sales in February,

(10:31):
so that was good.
So a lot of mixed data,
not great data,
but not horrible data.
So there's a lot of reason
to believe
that that things
are actually not so bad.
But there are some reasons
to think that the March numbers
and which come out in April
and then the following months
may not be as rosy
as we saw in February,
which again, February
is pretty average.

(10:52):
So there are a couple of reasons.
Number one,
let's start
with with consumer
and business
and investor sentiment.
There are a lot of organizations
out there
that measure confidence.
They measure the confidence
of you and me.
They measure confidence
of small business
owners, of investors,
big business
owners, analysts, all of all
sentiment and confidence
across the board.

(11:14):
And what we've seen
is that these confidence numbers
seem to be heading
down the toilet.
And so why does this matter?
Well, we've
talked about this before.
Confidence and sentiment
is a leading indicator.
So when business owners
or investors
or regular people start to lose
faith in the economy,
they start to spend differently.
They start to invest differently.
And those spending

(11:34):
and investing changes
actually lead
to the economy changing.
And so we get the snowball effect
of we act differently,
so the economy acts differently,
which causes us to act
differently even more,
which causes the economy
to act differently even more.
So here's
a little bit
of the sentiment data
that we're seeing out there.
Consumer sentiment.
So regular people, you and me,
how are we feeling about
the economy?
University of Michigan does

(11:55):
a monthly consumer
sentiment survey
down 11% in February,
down 22% since December.
This isn't isolated.
It's not just Democrats
who are mad
that Trump was elected.
It's not just
poor people or rich people.
It's actually across
all age groups,
all political affiliations,
all wealth spectrum,

(12:16):
education, geographic location.
Yeah.
So here's
the here's
the consumer
sentiment numbers for March.
So so pretty bad.
J j do
they isolate
the specific reason
is there like the top
three reasons.
Why is it is it the economy?
Is it the terrorists.
Is it the Trump's in office.
Like is there a reason for this?
There is.
And for this for this

(12:37):
if I recall, it's inflation.
And in fact that's
going to be a common theme
throughout a lot
of these sentiment
and confidence numbers.
And I'm
getting ready
to throw out a lot of concern
about inflation.
Concern
about inflation
is being generated 1st
January numbers were pretty high.
December numbers
were a little bit high.
So we saw this kind of this
this ramp
that people were concerned about.

(12:58):
Now keep in mind
February numbers
were pretty good.
But a lot of the survey data
was collected before
February numbers came out.
So hopefully,
some of this will be
mitigated in March
when when people see
the February numbers weren't
so bad with inflation,
maybe people will be
a little bit less concerned.
But that was
that was the big thing for
for the consumer
sentiment number,
from University of Michigan.
On the business side of things,

(13:19):
we have population.
And as the eggs as the eggs
discussion need to be included
here, the price of eggs going up.
So price of eggs are dropping,
the price of eggs are dropping.
Yeah.
Down about everyone's
everyone's putting chicken
coops in their backyard.
So we're all set now.
So the funny thing is price
of eggs are dropping.
A lot of it is on
the demand side.
So people are eating a lot
fewer eggs.
But there's also, supply, supply

(13:42):
is starting
to open up a little bit.
So hey Jay,
those things are not dis related.
When you say that
when egg prices are up, people's
behavior is the environment
to buy less eggs.
It's the same thing
as sentiment, right?
The opposite of
the wealth effect.
When we're feeding wealthy,
well, we're acting wealthy.
When we're feeling nervous,
we're acting nervous.
Exactly, exactly.
And that's why sentiment is,

(14:02):
is generally a leading indicator
and is
often a good indication
of where the economy's heading.
Let's talk about business owners.
Let me, let me just
like let's not move
on on that yet. Yeah.
Because I, I'm the consumer.
We're just talking about consumer
sentiment. Right.
We're not talking about
like expert sentiment.
Sentiment or like

(14:23):
I guess
I don't know
if you guys
watch the news at all.
I try and watch
less and less now,
but right now
the news is like
the most negative it's ever been,
like, it's
all all they're saying on
the news
is basically talking about
tariffs are having this effect.
And inflation's
doing this effect.
And it basically
all news is negative.
So is

(14:44):
when you say consumer
like you know tail
wagging the dog kind of thing.
Like could
this just be one of those things
where
since so much has happened
in such a little amount of time,
is this just people
just being so uncertain
that they're like,
oh, like, I'm a little nervous.
I don't know
what's going to happen.
And therefore, like,
the sentiment drops.
Yeah, 100%.
And in fact,

(15:04):
we do measure uncertainty
in several of these,
in several of these surveys.
And uncertainty
is one of those things
that we've seen through the roof.
And I'll talk about that.
And one of the surveys coming up,
specifically, I just looked
while Kyle was talking.
I just looked at the,
consumer sentiment
like what was driving it?
Inflation is driving it.
The year ahead.
Inflation expectations

(15:26):
for consumers
from the University of Michigan,
survey was went from 4.3%
last month.
So meaning people thought
the inflation rate over
the next year is going to be
about 4.3% last month
to 4.9% this month,
which is a significant increase.
Nowhere near that
9% that we saw
a couple years ago.
But anytime you're in the fours

(15:47):
near 5% to or not there,
but concerns about us
being in the fours near 5%,
that's a pretty big inflation
rate in the consumers
really think
we're near 5% on inflation
and we're heading
in that direction.
It's going to change the way
they spend money.
And it's already
we've been talking
about this for a while.
But it's just it's just tough on
especially on the middle class

(16:07):
right where they're already
having a hard time keeping up.
And, you know,
any little price change,
I mean,
even I'm
glad the edge is going down,
but anything in the supermarket
goes up 10% or 5%
that makes a huge difference
on the margins for most,
for most Americans.
And I think it's just
I think it's
almost like a cumulative effect
where it's
been going on for so long.
It's like at some point,
you know,
they're just getting more
and more concerned,

(16:27):
or maybe they're dipping
into their savings,
maybe their savings
are evaporating,
or they're just seeing
the writing on the wall.
But this is a concern
that I've been talking about for
for almost years now,
because there just isn't
there isn't that third spouse.
You know,
we talked about it before.
Where in
you know, back in the 50s and 60s
when inflation happened,
the second spouse
had to jump into the workforce
to to make ends meet.
There isn't a third

(16:48):
spouse around.
So now if two spouses are working
and can't cover
the daily expenses,
where is the money
going to come from?
Maybe those lazy millennials
who are living
in the basement of these,
baby boomers.
Maybe they'll start pitching
in a little bit.
So we're talking about
people's concerns
about inflation,
but we actually have
some other data
that indicates
inflation is a real thing.

(17:08):
It's happening.
And there's reason
to be concerned.
So we have this thing
called the NFIB Small
Business Optimism Index where
this organization NFIB does
surveys of small business owners
and basically ask them
what's your sentiment
like these days.
And the common answer
is uncertainty. Literally.
That is one of the selections.

(17:29):
And people
a lot of these small business
owners are feeling uncertainty.
But one of the things
the survey questions
is, are you raising your prices
or have you raised your prices?
In the last month,
32% of respondents to the survey,
and again,
these are small business
owners said they
raised their prices
in the last month.
That's the highest percentage
percentage
we've seen since April of 2021.

(17:51):
So, at least in
the small business
side of things,
a lot of owners are
raising prices.
Is it tariff related?
It very well
may be,
even if you don't see
tariffs in place,
if you have an
expectation of tariffs,
if you're buying inventory
or you're buying inventory,
you're placing orders
for for inventory two months,

(18:11):
six months down the road,
like a lot of business owners do.
Imagine you're a lumber company.
And you have to place orders
two, four,
six months down the road.
Well,
the threat of tariffs
is going to impact
lumber futures,
and you're going to end up
paying more today for lumber,
even if tariffs
haven't been implemented.
And so a lot of small business
owners are in the same boat.

(18:31):
Even before tariffs
were implemented
a couple weeks ago.
They may have been raising prices
in anticipation.
And actually in that same survey,
I noticed to the
the they ask,
what's the expectations
for the economy to improve.
And that dropped.
And it's down to like
37% of respondents
are thinking that the economy.
Is actually folks.

(18:52):
I mean, if anybody's
paying attention,
I mean,
we talked about it,
I think last week, the,
the Atlanta Fed,
you know,
who are notorious
for being overly confident
on the front end.
But I just pulled up the graph
before we came on.
And, you know,
they started at about
a 4% GDP growth for the quarter.
And then it plummeted
all the way down to just below
2% or two point something.
And it has bounced back

(19:13):
a little bit.
So it's I think now at 1.9%.
But the Atlanta Fed has.
A negative one point. Eight.
Yeah.
Now because it went from negative
two and a half or whatever 2.9.
Now it's only 1.9.
But still
the Atlanta, the fed
and the Atlanta Fed
themselves are expecting
a contraction in the economy,
which is, you know,
half of a recession.
And keep in mind,
this isn't what the Atlanta Fed

(19:34):
is expecting.
The way the GDP now meter works
is they actually take data
as it's released
and they plug it into the model.
So every time there's new
data released.
So today,
or yesterday
we got some import
and export
pricing from last month,
that indicated that import
and export prices went up.
There were some inflation
and import and export prices.

(19:55):
That's actually on the
on the export side.
That's good for GDP.
On the import side,
it's bad for GDP.
But the exports
outweighed the imports.
So that's good for GDP.
You plug that into their model
and you see that
the GDP expectation
for Q1 actually goes up.
And so you can watch that model
not on a daily basis.
But but they

(20:15):
they list
the days that they update it.
But it's a couple times
a week that they take data.
That's being released.
And this is all public data
that you and I can see as well.
They stick it into their model
and you can see in real time
as that GDP meter
goes up and down
and so will it end the quarter
over zero.
Yeah.
That's what I was going to say.
You could
you can watch it go up and down.

(20:36):
And it's always up and down.
So much like a. Yeah.
But it's an exercise usually.
Down a trend of
that thing is always
in the wrong direction.
You never see
the line of fed start
at some number
and then end up double
by the end of the quarter.
It's always
for some reason,
I don't know why,
but always seems to overstate
the the actual final numbers.
So well.
Keep in mind again, it's
using real public data

(20:57):
that gets released.
The quarter ended March 30th.
The last piece of data
that we get for
March comes on April 30th.
So on April
30th, we'll have the last piece
of data for March,
which will be
the last piece of data
for the quarter
that'll get stuck it,
but plugged into the model.
And the model will say,
this is what GDP is.
And every day
between January

(21:18):
1st and April
30th,
they're getting more
and more data
and they're building up
that model.
So in theory,
whether the model is going up
or down, it's more accurate
the further you get
into the quarter
and up to a month
after the quarter end,
because that's
when the last piece of data
comes in.
So the fact that we are
now six weeks from the last piece
of data coming in,

(21:38):
and we're two and a half months
into the quarter,
that means the model's
probably a little bit
more accurate
than it would have been
a month ago, or two months ago.
So I'm not saying
we're going to end up in
a contraction this quarter,
but I'd say
there's a very real chance
based on what
we're seeing right now.
Yeah, I think if I
was a betting man and I'm not
maybe in Vegas and
we're there in a few months,
but I would say that you're going

(21:59):
to see a contraction
in this in this quarter.
Actually.
You can well,
I guess we can as Americans.
But if,
I don't know
if how much time
you guys spend on Poly Market.
But one of the Polly market
things you could bet on
is the likelihood of a recession
in 2025.
And, it's fun to actually know
that we went from a month ago,
it was about 20%,

(22:20):
and now it's about 40.
So it's doubled
just in the last month,
starting actually
February 20th,
February 28th, it was 22%.
And currently in March 17th it's.
But can I
can I bet on
whether Q1 will be negative
on a GDP.
And that's what I want to bet on.
Oh, you might actually I.
You're not going to
get good odds.

(22:41):
So so here's I
want to bring up a chart.
So this one's interesting Kyle,
you mentioned earlier like,
experts weighing
in on on sentiment.
Bank of America
does this, fund manager survey,
every few weeks,
which is basically they
they talk to analysts,
fund managers,
investors
like institutional investors,

(23:01):
the smart people, and ask them
what's going on,
not just ask them
what's going on,
but seeing what they're doing.
And this was actually
pretty crazy.
I saw this
this was just released today.
But apparently over
the last couple weeks,
what we've seen is that,
fund managers in
the US have pulled out 40% of,

(23:25):
their positions on long equities
in the US market.
Basically, they
they've taken out
about 40% of, of the money
they have in the stock market
betting on companies going up.
We've never seen a number
anywhere near that
in a month in this country.
So basically half the money
that fund managers
have in the market right now

(23:46):
have come out
over the last couple of weeks.
Just an absolutely
astounding number.
So so
go back
to the first thing you said
and then then explain to people.
And when I say people, me
explain to me
why you're disconnecting
the stock market,
going down
with all this other stuff
that you've
just been talking about,
because to me, it sounds like
if somebody is concerned,
if somebody is fearful
and somebody wants to put

(24:06):
money away,
put somewhere else, wouldn't
you just buy?
You would just think
they'd be pulling money
from the stock market,
putting it into something safer,
putting it into gold
or foreign equities or non-U.S.
dollar denominated assets?
I'm just being careful
not to say that
just because there's
a correlation,
that there's causation.
Just because the market's
going down doesn't
mean that's going down
because a recession is coming.

(24:27):
We've seen market drop.
But which one leads the other.
Right.
Because it's happened both ways.
They kind of generally
go the same way.
But you don't know
which one's going to be the the
the one that goes first. Yeah.
And the point that the economy
is different from the stock
market, it's a really good point.
And too many people
just lump it all in together.
Even when it comes to sentiment.
What's the sentiment about.

(24:48):
Well in general
how the market's doing.
Well what's the market.
Is that the stock market
or is that the public markets?
Is there more to it?
And certainly
sentiment has to do
with how people feel
in their lives
and not just in investing.
You know, the
the fact
that you'd never have
to invest in the stock market.
It is completely optional.

(25:09):
No one ever
has to buy a share of stock
or a barrel of oil
or an ounce of gold,
but you can't sit out
the real estate
market financially.
You don't have to own property,
but you're going to have
to interact financially.
So it separates real estate,
which I hope we get to
at some point.
But, this is great stuff.
I think
it's a really excellent point.
You cannot say
that the stock market
is the economy,

(25:29):
although there is certainly
in step, it's not correlated.
Or and if it is correlated,
it's it's not necessarily
in real time.
1st May lead or lag the other.
And so
and I don't know
if you're going to go there, but,
you know, pulling it
sort of to that real estate
angle is like
one of the biggest KPIs

(25:49):
on or metrics for real estate
is, is the mortgage rate
interest rates.
How is this all affecting
that number?
Like, you know,
if you're a real estate investor,
mortgage rates are critical.
Does this affect
that number at all?
I mean, that ten year
Treasury has been stubborn.
Like we we
we obviously want to see that
come down
because that's the number one.
It's coming down.

(26:10):
And it has been you're right.
It has been coming down.
But then like you're
you're getting excited
that it's
going to keep coming down.
And then you know
one day the stock market's down.
You go to look at the ten year.
And it's back up
and you're like
oh what's going on.
That's
that's the good example like I do
I do think that
a lot of the stuff is related.
I mean though
I would argue
that the reason
that I mean, for a fact,
the reason the interest rate's

(26:31):
going down
is because there's more demand
for those treasuries,
which generally means
people are fearful,
people are leaving the stock
market, they're
leaving other assets
and going into safety,
which for them is treasuries,
which is driving up
the price of treasuries,
which is
which is reducing
the interest rate.
So, you know that the more fear
there is
and the more that goes on,
the ten year is going to drop.
And that's pretty
tightly correlated

(26:51):
with the mortgage rate. Right.
But daily we're not seeing
I guess that's
that's
the thing is
like I get disappointed
because I watch it every day
and I watch the stock
market and I see the stock market
do one thing and I go to
I rush over to the ten,
ten year and be like, oh, is it?
And then it didn't.
So it's, it's been a.
Strange, though.
I mean, I mean, you're ten years
gone from from 4.8,

(27:12):
you know,
in the middle of January to 4.2.
That's like a huge move.
Oh for sure.
But you know,
we want to see some.
We talked about it before.
I think even the,
the the fed it like
if when they're coming to
when they have to refinance
all of this debt,
they would like to see
a little bit,
a little bit smaller,
smaller yield on that as well.

(27:33):
So I mean, a sub four,
I feel like that for like it's
such a mental game. Right.
And I feel like a sub
for ten year
would just be everybody
that would be like,
you know, green light. Let's go.
And the faucets turn on,
and it just, it always seems like
we're heading back
down towards that.
And then something happens
and we head back to four
and a quarter and and I.
And I feel like there's this like

(27:53):
which is true.
Like our good buddy,
you know, George Gavin
always talks about there's like,
you know, there's no one.
Everybody looks at as like
as I buy a
bipolar or two thing,
but there's like
a thousand things
going one direction,
a thousand things going
the other direction.
And this is one of them.
It's like on
the one hand
we're talking about fear
and potential recession,
which you would think,
you know, everybody's
going to be, you know,
crashing towards,

(28:14):
you know, safe assets, gold,
which you're going to talk about
in a second.
Yeah.
You know, the Treasury,
which is going to
drive down the rates.
But on the other hand, you have,
you know, inflationary concerns.
So right.
So when you have inflation
people are like, well,
why should I be in treasuries
when I if,
if I believe
inflation is coming down,
I should be in more
aggressive assets.
And so there seems to be
this like pull and tug on.
Are we expecting the, you know,

(28:35):
the interest rates go up or down.
Well it depends on
you know on the one hand
you know, if inflation is coming
then you would expect,
you know, the people
that the interest rate to go up.
And if you're
expecting a recession
you would expect it to go down.
So it's like it's it's
a really interesting,
you know, pull and tug
that's going on right now.
Yeah.
The other thing
to keep in mind is,
I mean,
if you look at stocks
and bonds in a vacuum, yeah,

(28:56):
there's there's definitely
some correlations.
People move money
out of equities.
They moved into bonds
where they moved out of bonds
into equities.
And that creates some some pretty
consistent
and predictable price movements.
On one side or the other.
When you see one side
or the other start to move.
So if stocks start to go down,
you can expect that
people are moving into bonds,
which is going to push bond

(29:16):
yields down.
The problem
is that those two things
don't live in a vacuum.
And we have some things
going on in the world right now
that are impacting
both equities
and bonds
in ways that are breaking this.
This simple model.
We have currency issues.
We have the US dollar
we talked about this last week.
But but dollar
strength is dropping.

(29:37):
And we're seeing a lot of,
currency pairs
that are out of whack.
So we see certain currencies
that are strengthening
against the dollar
more than we should expect.
We have a lot of
geopolitical issues.
We have things with oil.
I mean, oil isn't
flowing nicely around the world.
And when oil doesn't flow,
easily around the world, we
don't see dollars
in the petrodollar.
We don't see dollars

(29:58):
flow easily around the world.
And so there are other things
that are impacting
the bond market.
So you can no longer just say
people are moving money
out of stocks into bonds
or vice versa.
It's a lot more complicated
of a model.
And it feels like
the two
are fairly decoupled these days.
Well, one thing
people seem to be moving into

(30:19):
is gold,
which just hit an all time
high over 3000, and it's kind of
touched that a few times,
but then it's
now it just blew past it.
Now it's holding above 3000.
And so for all those people
who said that crypto
would take this,
this place of gold
as the economic and currency
hedge, and,
you know,
gold is no longer
the gold standard

(30:39):
that it used to be.
It sure seems like
gold is reasserting itself
as a major player
in portfolio woes right now.
Well, I'm
glad you brought
that up this week
because the 3000 numbers
are really critical number.
And it is an all time high,
at least in U.S. dollars.
And so the thing to think about
when it comes to gold
and silver is twofold.
One is
what does it predict or show us.

(31:01):
Often gold and silver
are that predictive mechanism
because of the flee to safety
and has been for a long,
long time.
But I think it's really
interesting point
that there were a lot of folks
who thought, well,
you know, gold is unnecessary
now that we have cryptocurrency
and, you know, I'm a fan of both,
that's for sure.
But they kind of play
different roles.
Look at how volatile
Bitcoin has been

(31:22):
in the last six weeks. Right.
The swing's been more
than $25,000.
Gold has steadily gone up.
Having said that,
that's not necessarily
a good thing
because gold actually
never changes its value.
It only changes its price.
An ounce of gold
is worth an ounce of gold,
but it's worth $3,000
because the dollar is worth

(31:42):
less than it was.
And that's
part of the
the other side of the equation,
which is
what do we do as investors?
Because personally,
I don't think gold
and silver are investments.
I'm a big lover
of the precious metals,
but not because their investments
were completely
different purpose.
But they've been a
pretty good investment.
Okay.

(32:02):
Like,
as much as I've
always said the same thing
and honestly,
the reason
I have a bunch of gold right now
was back in 2020.
And whenever the
the Russia-Ukraine
thing was happening,
a I believe the price
of gold was right around 2000.
And if that was expensive,
kind of because it does run up.
And at the same time,

(32:23):
you know, I'm not going to say
like I'm a prepper or anything,
but I thought it would be nice
to have some physical gold
and silver
when there was a,
you know, the risk of World
War Three happening
had, you know,
gone up five by five x.
And so I had a bunch
and I never, I never sold it.
I never, you know,
I guess the wars never ended.
But since then that was 2000.

(32:44):
Now it's now it's 3000.
So in the last four years
or so, it's gone up by 50%.
And you could say the,
you know,
the value doesn't go up.
And I heard an
interesting person,
they comment by a person
about last year
about how the stock market
went up 27%.
But then the counterpoint
to that was,
well, gold went up 24.

(33:05):
So did the stock
market actually go up,
or is this just,
you know, fueled by all this debt
and really the stock market
kind of just stayed the
same in relation to gold. So,
as much as.
We were saying.
It's
it was not a good investment, it,
it has been, you know.
That's
such a great point, though,
because the example
that I love the
that I think

(33:25):
I think
our buddy George
always talks about it too.
But you know, like,
do you know, like
if I don't know
what it's been lately,
but at some point
in the last couple of years,
like the best
performing stock market,
like in
the entire world
was the Venezuelan stock market,
because inflation in Venezuela
was like 1,000% a day.
It was off the charts.
So yeah,
relative to the Venezuelan,

(33:45):
I think it's the peso.
Yes.
The stock market in nominal terms
is going through the roof.
But in real terms, nobody,
you know,
nobody thought that stock market
was going up.
And in fact,
if you price
the stock market in dollars
or if you talked,
if you did it in gold
or in bushels of wheat
or whatever,
the stock market wasn't going on.
So that's a great point.
You got to be super careful
when you see something going up
to Robert's
point is the actual asset

(34:06):
going up
or the commodity going up,
or the dollar thing or going up?
Or is the
is it the dollar
or the other side of the equation
going down?
Because again,
it's always two
sides, the equation.
We always think
the dollar equals something.
And and so
if something's going up
that means the thing's going up.
But it also can mean
that the dollar
itself is going down.
I think that's exactly
what's going on.
And there's like gold and silver

(34:27):
do go up and down.
But the long term trend
is that as we see
the dollar lose
purchasing price value,
then the metals go up
and gold and silver
are very different metals.
Right.
Silver is a lot more industrial.
Gold is more money.
But they both have
places in a portfolio.
And I think
that's a practical point,
even though I don't
consider them an investment
because they don't pay

(34:48):
any kind of dividends.
There's no tax deduction
really for the metals, right?
Those kinds of traditional things
that we think of
as an investment,
they do maintain value.
And that's the critical part.
So this is a 2021 peace dollar.
So the peace
dollar was very popular
in the 20s and 30s.
And they did this with that
dove on the back.

(35:08):
In 2021.
At the time I bought this, it was
I think silver
might have been 20 ish, maybe 18.
So here's the premise.
When I bought this,
I turned those dollars,
I froze those dollars.
And they those dollars
kept their value.
The paper dollars in my wallet
continued to erode in value

(35:28):
because now eggs and Starbucks
and gasoline cost more.
But today,
this is the same value.
I preserved
that $16 back
then, or $18 back then.
It's $34 today.
So the metal hasn't changed,
but the dollar value has.
And that's the way
I think about gold.
Gold is a gift
I give myself
in ten years from now.

(35:49):
If I buy it now
and I have reasons to buy it,
the biggest reason is
it is non correlated,
but also it doesn't have any
counterparty risk.
Counterparty risk
is in everything.
It's in real estate.
It's in mortgages.
It's in the stock market
big time.
It's in the bond market.
But an ounce of gold in your hand

(36:10):
or silver in your hand
has no counterparty risk.
It doesn't mean
it doesn't have risk.
You could lose it.
You could steal it from me,
as Marissa has tried
to a few times,
but it doesn't really have
another counterparty.
And so
there's a place to put it in your
in your portfolio.
And I think prudent investors
who have done that are
pretty happy to have.
I guess the only risk
would be though to me

(36:32):
is that there's no usable
value in it.
I guess the thing I
the reason
I have some silver too,
along with the gold, is silver.
Like it's still like
it's used in a lot of,
in a lot of industries still.
And it's, it's actually
getting more usable
and a lot of these
newer industries.
And, but gold has never had that.
And I,
I've just,
I've been a little concerned

(36:52):
over the last few years
that there was the traditional
thinking with gold
about kind of the,
as I said, like the hedge
against all these other things
going on in the world.
But then it started,
I don't know
if it was with Bitcoin
and like with, people
who traditionally
would put their money in gold
when all of a sudden
was now putting in Bitcoin
because they thought
that was a good enough

(37:12):
hedge against,
you know, fiat currency.
But then,
then gold seemed to
kind of become a bit of a vanity
play to
where it was like
when when people had a lot of
like when you saw that those,
those those levels in the bank
accounts rising and people
having excess cash,
they were just
buying gold,
which wasn't, I didn't think

(37:33):
was like a traditional
use of gold,
but people were now using it
as a vanity play.
So, like, I'm just like,
I'm, I'm really
I'm really happy to see,
I guess,
this happening right now
because it feels like it's
reverting to its
traditional value.
I find funny.
I find it funny
that that was ever
not the case because, I mean, I'm
a big believer

(37:53):
that history
is the best predictor
of the future,
and we've had thousands
upon thousands of years
of of evidence
that gold retains value.
And to think that suddenly, like
something magical
is going to happen in, in 2015
when Bitcoin comes around
and it's going to change
thousands of years of history,

(38:14):
I'm not going to say
that's impossible.
But if I'm a betting man
and I am, I'm
going to bet
that thousands
of years of history
are going to continue.
More likely
than then
it's going to be replaced or or.
Yeah, the more central banks
own gold,
or do more
central banks own cryptocurrency?
And which would they rather own?
Well,
and I'm glad you put that up too,

(38:36):
because actually
we talked about previous episode
about how these, these banks
where we're loading up
planes full of, gold
and shipping them over from,
Europe into, into the US.
And so I looked into it a
little bit more,
and I also found out
so that banks obviously
need to keep reserves. Right.
And basically,
banks can only keep reserves
three ways.

(38:57):
They can obviously keep cash.
But then they could
keep treasuries
and they could keep gold.
Those are,
those are like
the only things
that are considered
liquid assets as far as reserves
and that kind of
that made me feel better
for gold as well too,
because if you're basically,
you know,
you're not going to keep cash,
your bank,
you're just going to watch it
erode away.

(39:18):
And then treasuries, like
with everything
going on with treasuries
right now, like gold's
looking pretty good for these.
But that's that's.
One of the major reasons
why gold is doing
what it's doing.
I was going to share a graph.
If I can probably float up here,
if you guys can see this,
this is the central bank
graph of what
the central banks are doing,
and they've been a net
buyer of gold

(39:38):
for actually a while now.
I think it was 2010.
But as you can see,
you know, back in 2020,
that's really when,
you know,
gold was kind of going down
in terms
of how much they were buying.
But in 2020
they just started to pick up
the, the,
the, the,
the pace of buying, gold.
And it really has taken off
over the last 2 or 3 years now.
It has come down a little bit.
That doesn't mean

(39:58):
that they're selling.
It just means
the rate of increase of how much
they're buying is going down.
But the central banks
is one of the main reasons
why gold has this
sort of tailwind behind it.
It's got like a
foundational thing built in.
I mean, over the last four years,
you know,
central banks
have been buying an average
of over 1000 tons.
I actually thought
that was the site I saw.
I was looking at that graph.
It almost looked like

(40:19):
it was like thousand
tons a quarter.
But the fact that
the central bankers
believe that it does
it is still relevant.
And to Robert's point,
they're buying gold.
They're not buying diamonds,
they're not buying crypto,
they're not buying ether like
they're not buying anything else.
They're buying gold,
which has traditionally
been the store of value

(40:39):
over the last,
you know, five, 6000 years.
So I think that over the last
ten years,
somehow that's going to wipe out
6000 years,
a, you know,
really free markets determining.
And that's really what
what is valuable.
So that's one of
the major reasons
why, gold
really has had that thing.
And then obviously
we've talked a lot about
the weakening dollar.
We did a whole Robert,

(41:00):
we did last week
a whole thing on the dollar
milkshake theory,
actually, a second time
we've done a diagnostic theory.
But,
if you've looked at the dollar,
we talked
J you talked about it
briefly earlier on,
but the dollar is really
taking a hit over
the last month or two.
You know,
and that really correlates
with the increase in gold as well
because usually the dollar
and gold are inversely related.
And that's a

(41:20):
there's a reason
for that is just because
as the dollar goes
down, the cost
or the price of gold
or the availability
for gold for foreigners
just makes it cheaper to buy
because their dollar
is going down.
So usually you see
an inverse relationship
between the U.S.
dollar and gold,
and you've seen
obviously the dollar
just taking a whack
over the last,
you know, a couple of weeks,
if not months.
And I think it's

(41:40):
at a five month low
at this point.
And and that's why
I was kind
of coming back with you
a little bit,
maybe pushing back on
maybe the stock market
and the economy.
But one of the reasons
the dollar's going down
is because people are kind of,
well, they're selling dollars.
That's the reason why
the dollar is going
they're selling dollars
and they're going to
buy other stuff,
whether it's gold,
whether it's foreign assets.
And so that's another reason

(42:01):
why you continue to see gold,
gold doing well.
And as the dollar continues
to decrease in value,
if it does in the short term,
the remember the dollar
military theory predicts
the dollar
eventually will continue
to go higher in the longer term.
But in the short term
the dollar's taking a hit.
And obviously
that's helping gold.
And then we've got tariffs
and inflation.
And we
talked about the inflation

(42:21):
expectations.
I don't think
Brant Johnson predicted
the geopolitical environment
that we're in today.
That's kind of pushing
the dollar down
perhaps temporarily.
But yeah.
You would argue for sure
that it's temporary, right.
Like the he's
looking at the long term trend.
Like if you look at where he,
if you asked him,
what do you think
in the next three years
the dollar is going to be higher

(42:41):
or lower.
He's going to be like, I'm
all in on the dollar
is going to be higher
a long term.
But but in.
Comparison to gold, they weren't
we were just talking about
the fear as a recession.
If we hit a recession, what's
what are what's going to happen.
Like what what
what is our government
going to do.
They've already
shown the playbook.
And basically
recessions are like,
now this evil thing

(43:01):
that we have to avoid
at all costs instead of
just a normal market cycle.
So they're
they're going
to turn on the presses
and they're going to start,
start putting money
back in the economy.
And when they do that,
more dollars
with, you know, the same amount
of gold, theoretically,
that should just push
gold even higher.
So, I mean,
I guess, like
I want to say like this is
this has been a historic run up

(43:22):
and we should probably be wary,
but I
don't really see any reason to
to say like, be, let's be scared.
Brant is bullish on the dollar,
but he's bullish on gold as well
for the reasons that
we talked about.
I think there's
another nuance here.
Had there
not been cryptocurrency invented,
gold would be much higher
right now than it is.
There's a lot of dollars
that went into

(43:42):
the cryptocurrencies
that their choice was gold or,
cryptocurrency.
And they decided to go that way.
And even with gold at its high
and we're all saying,
hey, I'm glad we bought it
five years ago or ten years ago.
Yeah, I'm glad I bought bitcoin
a while back too. Right.
So it's not
that one
is better than the other.
I think you can get

(44:02):
a lot of clues
from market behavior,
and that's really seems to be the
theme of this.
That's why
sentiment is so important.
You know, if you look at the
The Fear and Greed Index,
like we're way into extreme
fear right now,
and that is about the stock
market. People are scared.
And part of it
is because it plays on itself.
Like you,
you guys have been talking about
not just this week
but in the past.
And that's why

(44:23):
you got to pay attention
to this stuff.
I do want to hit on one thing,
and let me start with,
anybody that's been following
me knows I'm,
I'm, I'm a fan of of crypto.
I'm very much
a fan of the blockchain
as, as a, as a technology.
I've been buying
bitcoin since 2014.
So don't don't
kill the messenger here.
But the reality is for many years

(44:44):
we thought of bitcoin and crypto
as the hedge that we know
gold already is.
And so there was a lot of reason
to believe, or a lot of people
who did believe that,
that if we see a market crash,
if we see an economic downturn,
that crypto
is going to be a good hedge.
The reality is that

(45:05):
we haven't seen that.
The reality
is that the biggest buyer
and seller of crypto
these days
is institutional institutions.
And so I have a chart here
for those who are listening
and can't see this,
but it's basically
a graph of the S&P
500 versus
the bitcoin versus bitcoin price.
And what we see is,
not a
direct exact correlation,

(45:27):
but a very close correlation,
especially over
the last few years
where when S&P goes
up, Bitcoin goes up.
When the S&P goes
down, Bitcoin goes down.
And the reason for that is again
people aren't holding as a hedge.
There are a lot of institutions
that are holding
crypto and Bitcoin.
And they're trading
crypto and bitcoin
the same way they trade
U.S equities.

(45:47):
And so they think it's
just another stock.
A lot of the speculators
are treating it that way.
And that's. Not happening.
We have ETFs with
with with Bitcoin now.
So I mean when you
when you traded
like a stock it's going to it's
going to correlate
to to the equities market. 100%.
Now there is the whole discussion
of the mining equities
which is maybe too
much to cover today.
But another way

(46:08):
to get exposure into the metals
is to go earlier in the process
and early in the chain
and find exploratory companies,
mining companies, junior miners
to seniors,
producers, royalty companies.
So there's a lot there
if you want to stick your nose.
Into it
was that's a
that's a good question
for I'm I'm a very amateur
metals investor.
As you said, I didn't buy
it as an investment.
I bought it

(46:28):
kind of as an insurance policy,
like, that's,
you know,
and I place in my portfolio,
and now, because it's
run up enough
than, you know, real estate.
Yeah,
I had a lot of, I, a lot of money
in commercial real estate.
And my,
my balance has gone
out of whack a little bit.
And it's, I have a little bit
more gold and silver,

(46:49):
exposure than I did
previously when
I first bought it.
And so now I'm at this point,
geez, run up to 3000 gold.
Should I be taking
a few chips off the table?
But then it's like the whole fear
and like I bought it
as an insurance policy.
You're not never supposed to.
You won't cut your insurance
policy down. And so.
So where do you.
I'll start with Mauricio.
Like where
do you think we should go

(47:09):
with this?
With the
with the gold is
this is something we just
they keep holding on
or if you add to our
our holdings or.
What do you think?
I mean, I'm
a big fan of the dollar cost.
I mean, I just
I just keep accumulating.
So if the price goes up great,
you keep buying.
If the price goes down
great, you get to buy more.
I mean, I'm
a more of a long term.
And so there's an argument
to be made by the way.
And again,
if you
I'm not a short term trader,

(47:30):
but there is an argument
to be made
that once
it passes at 3000
psychological level,
there isn't much of a ceiling
like all the sellers are gone.
It's like, well, who's
who's going to say who's where?
If they haven't sold the 3000,
where are they going to sell?
And so that happened at 2000.
That was a big
I mean, think about it
like all the years
it took for it to get to 2000.
And, you know,
I've been buying gold
for a long time
and it took

(47:51):
forever to get to 2000,
but it literally took
I don't know, Robert,
how long has it taken
since it got to to like it's
a little less than maybe a year.
I don't know, it's
it's been very many years
and I don't know, a very
short period of time
to go from 2 to 3.
You know,
we, you know,
we hang out with a lot smarter
people than we are
in terms of the gold market.
And it's like there
just once you once
you blow past that, that level,

(48:12):
there isn't much.
Just like when something drops
and breaks through a level,
there's no buyers.
And then the stock or the asset
just continues to fall like,
you know, don't
catch the falling knife
when something breaks out.
There's just aren't any,
you know,
there aren't
any sellers out there.
So.
So the price could clearly
I mean, it's already approaching
well, let's say 3100.
I mean, it's
the futures

(48:32):
are getting close to 33,050.
So it's well above the 3000.
So the next
it's just looking at 4000.
At this point.
I want to put a little bit
of a finer point
before we end this discussion
on something Robert said earlier.
Gold is as a store of value.
I saw this meme today
and I'm sure
I haven't verified
the accuracy of it, but, but,

(48:54):
I wouldn't be surprised
if it's true.
And for those again,
who are listening
and not watching,
it's a picture of two sides,
split screen, a guy holding,
gold bar on the left
side, a guy
holding the exact
same gold bar on the right side,
on the left side says
ten of these would
would buy you
an average home in 1920.
And then on the right
side, ten of these will buy you
an average home in 2023.

(49:16):
The point being
that gold
has kept up with inflation.
Again, anybody that's
that's followed us on
this show knows that home prices
basically go up with inflation
over the last 120 years.
There's a very direct
correlation.
Gold has gone up with inflation.
The value of gold has held it.
Gold has held its value

(49:36):
probably better
than any asset on the planet.
And so not necessarily
an investment,
but we always talk about the fact
that real estate is a great
hedge against inflation.
Real estate has other benefits.
It has tax benefits.
It has cash flow.
It has potentially.
Lever you can leverage it
forced depreciation
through renovations,

(49:57):
things like that.
But if you don't want
to do all that work,
but you still want to hedge
against inflation,
gold is just as good
as real estate
as a hedge against inflation.
And that example you gave
all is very similar
to the example
I always give,
which is the price of gas.
Like right now
people complain

(50:17):
about how high gas prices are.
They're actually lower
than they were
back in the 60s
if you price it in in silver.
So back in 1963,
which is the last year
you could get a quarter
that actually had silver in it,
the basically silver quarter,
you could buy a gallon of gas
for a
I think the price of gas

(50:38):
was like $0.25 or $0.28,
depending on when you are
right.
Now, that
same quarter that that from 1963,
which is,
which is silver is about $6,
which means to me
the price of that,
that the price of gallon back
in, you know, back in the 1963
is about 6 or $7 a gallon.
So today it's a well,
I mean, California is at 5

(50:59):
or 450 or whatever.
So actually
gas prices are down
if you're using the same currency
or the same money,
which was that quarter
that it was back in 1963.
Same thing for minimum wage.
If you look at minimum wage,
I think minimum wage
is like $1.25 back in the 60s.
Well,
if you give somebody
$1.20 5 in 1963, silver quarters,

(51:19):
that's like 25 bucks an hour.
So it's just
things to think about.
Yeah, exactly.
Exactly right.
That's, that
that's the way to think about it.
A 1965 call
today will not even buy you,
a 10th of a gallon of gas
and a 1960
three quarter will buy you
more than a gallon of gas.
That's a great illustration, Jay.

(51:39):
I'm going to definitely
borrow that. That is awesome.
I've heard a few of them.
The custom suit.
Lonnie used to be won gold.
Coin was a custom suit.
Now, that's just
about the same price. But.
Except for Jay's suits,
which are like Costco. Costco?
Yeah.
I was
I was literally about to say
it brings here people to it.
All right.
What ounces of silver suits.

(52:00):
Hey, let's talk
about some syndications guys.
Because we all
love talking syndications.
We talked about them
a lot on this podcast,
obviously,
because we're all big fans of it.
It's how JJ and I do
most of our deals
through syndication.
It's also the focus of Mauricio,
his legal expertise
over the last few years.
Back before he was an
asset protection guy,

(52:21):
and wrote books and
did all this stuff.
And who knows what
he's going to do in the future?
Sky's the limit for Mauricio now.
But most recently,
three episodes ago,
we discussed the difference
between 506 B
and 5 or 6 C Syndications.
We sleep.
Yeah, we.
Yeah, we might have
got a little ahead
of ourself though,
because we kind of skipped
over the whole,

(52:42):
discussing syndicating
deals versus
not syndicating deals.
We kind of just were like,
oh yeah, you
we assume you're syndicating,
it's,
the 5 or 6 B versus
5 or 6 C mirror.
Which one should we do?
Well, luckily we have the OG of,
syndication here.
He even runs an event,
titled Secrets
of Successful Syndication.
So, Robert,

(53:03):
why don't you back us up
a little bit?
Let's backtrack a little bit
so we can help us explain
why, syndication, as the kids
say these days is bussin.
It is.
And I think it's not that far off
from our conversation,
because what syndication
allows you to do
is divide
the risk as well as divide
the reward.

(53:23):
So the basic
premise of syndication is
we can come together
and some people bring the deal,
some people bring the expertise
of the bring the money,
some people bring that
or whatever it might be.
Everyone comes together
and then we have a way to divide
the return.
But we're also dividing the risk.
And just like the idea
of investing in real estate
versus investing in the metals,

(53:44):
metals, simple
or syndication can be simple.
From the passive side,
I got a bet on,
I used the analogy of the horse,
the jockey, and the track
and the syndication.
The horse is the deal.
The thing you're investing in
the track
is the market that it sits in.
And the jockey
that's the most important
part is the person

(54:04):
or the people that run the deal.
So if I'm a passive investor
in a syndication,
all that means is
I could put 100 grand to work
in a bigger deal
that I could
probably get access to myself.
And we do this, do
team work
on the other side
or the folks that won,
you know, Maurice's clients
and all of you guys
actively use syndication

(54:24):
as a tool to go
bigger, faster, do
bigger deals,
be able to move
with more capital?
So what I love about it
is it's a complete win win.
Not that it can't go wrong.
Any deal can go wrong,
but it does allow you to divide
the risk and the reward.
But the fundamental question
that's great
that you brought that
up, Kyle, is

(54:44):
does a deal
need to be syndicated?
Because if you could do the deal
with, say,
a loan and your own downpayment,
then why syndicate?
And and that's not
just a philosophical question.
That's a math question.
So the premise
there is,
I could do so much
with my own ability
to qualify

(55:05):
and my own ability
to put a down payment.
And then at some point,
I'm going to run out
of my own money
and my ability to qualify.
So either I quit doing deals
or I start to syndicate.
So there are some deals
that shouldn't
even be 5 or 6 B or 5 or 6 C
or 5 or 6 anything,
because they're actually suited
just to be real

(55:26):
estate investments.
Now of ratio,
if you've heard this
show for a while,
you know he will teach you that
you can't,
no matter what
you call it, the law,
the securities laws the same.
So you have to be super careful
with this stuff.
You and your buddy go out
and buy a fishing cabin
that you're going to
keep in the woods.
The minute you got a
friend bringing in money,
there's just a
lot more to talk about.
But I think syndication

(55:46):
is an excellent tool
for both the active person
doing the syndication
as well as the passive
people investing.
There's ways to get tax
benefit, cash flow appreciation,
all the things we like
real estate for.
I can get them
with a little bow, right.
If I'm willing to maybe
give up a little return on
and a little of the
control of the deal,
I can get exposure to real estate

(56:09):
in a really low hassle way.
And plus, I think also.
From a from an LP
perspective to you,
you get that benefit
of economies of scale.
First of all, right.
Because you're
getting a bigger building you
so that
that has it
just economies
scale to go in there.
But also I think sometimes
you've got like less competition,

(56:29):
like it's
much harder to go buy
a $5 million building
or a $10
million building or,
well, these guys with J and Kyle,
you know,
20, $30 million building
than it is to go buy
a $500,000 house.
And and AJ,
how many of us are going to buy
a big giant soul storage unit?
Not too many.
But if you come together
and you like that asset class
and there's
lots of reasons to love it,

(56:49):
well, that's
that's the way you play
in those bigger deals.
Yeah. You guys did you did.
When did you guys make the jump?
I mean
when did you guys figure out that
hey doing it
one of these and Tuesdays.
And that was
that was going to get you so far.
But you know
scaling to syndication
was really the path
for you guys
for I presume
it's a it's a wealth building
vehicle for you guys.
Yeah.
I guess Jay's being silent,

(57:11):
so I'll step in.
I was,
I was wondering
if you were going to jump in.
Yeah.
Well,
because because I think I got
into it one year before Jay.
And it's one of those things
to your point,
you realize my favorite thing
about syndication
is before syndication,
you have to be
you kind of
have to wear every hat. Right.
And you're not at not

(57:33):
every hat is going to fit.
And the problem is you kind of
just have to make them all fit.
And not everyone is good
at every aspect
of doing real estate.
You might be excellent
at running the numbers,
or you might be excellent
at managing tenants and
and running a business plan.
Or you might be excellent
at finding deals.
But I've yet to find someone

(57:53):
who's excellent
at every single one of those.
And, and so the
but the problem is,
is that
when you're buying your own,
you kind of
just have to like you.
There's not enough money
there for you
to be able to hire out
experts
at every single one of them.
So you kind of just have to learn
how you do it yourself.
One of my favorite things
about syndication
is because of the size

(58:14):
of the deal on the scale,
you are forced to hire
great people.
Think about, you know,
an apartment complex.
You can't self-manage 300 units.
The lender won't allow it, right?
You need
strong third party
viable management.
Well,
if you're going to buy a
rental home,
you might decide, well, I'll go
collect the rent myself.

(58:34):
That's one way to go, right?
Save the money
of the property manager.
But long term,
if you build up
any kind of portfolio,
there comes a point
where you can't do it all,
even if you were predisposed
to doing it. All right.
And and so Ashley Knight,
so we've talked about before,
I'm business partners
with Ashley and Jay.
And before Jay came along,

(58:56):
Ashley and I, and.
Screwed everything up
for a while.
I feel like I was there.
I feel like I was their child
before Jay came along
and we had all this freedom.
No, but before Jay came,
we were trying to wear
a couple too many hats.
And I'm I, I will I will admit,
Ashley is much better than I am
at, at juggling hats.

(59:18):
I kind of have one
hat that fits pretty well,
and I like it.
And,
I don't want to put on any other
hats.
So, like,
I'm, I'm very good at the,
the behind the scenes,
behind the,
the the the spreadsheets
and doing that kind of stuff.
But, if you want me to go
and shoot the shit
with brokers and,
and make those connections
and get deals done, it's

(59:39):
not really me.
If you want me to go
and raise money from somebody
that's totally not
me, I'm like, I,
I have never been comfortable
asking somebody for money.
I get the concept.
I can take all the trainings.
I know
what you're supposed to do.
I still walk into that situation
and get a cold shiver.
And so

(59:59):
Ashley was never
really good at that either.
At her, her problem is more
so she's a very,
open and honest person,
and she just will tell you
absolutely everything
and absolutely, like,
just over and inundate
you with information about deals.
And that's kind of
not the way to, to,
to bring in investors.
You kind of they,

(01:00:19):
they care about certain things
and they care about
and they want it succinctly
and they want it in a hurry.
And we we just never
really had a good knack for that.
And so the best
thing about syndication
is, is that
the deal is big enough
that we're not good at that.
So you just partner with somebody
because that pie is big enough.

(01:00:40):
You could just slice off
a piece of that pie
for somebody else
who's actually good at that. So,
that that's how we got into it.
In the beginning,
we tried to wear a couple
too many hats
at their first crack
at syndication.
We realized we needed help.
And then Jay stepped in,
and now we kind of have
a, you know, a
and then we have one more partner
who we're not allowed to

(01:01:01):
to mention in these things
because he's super shy.
And,
then we kind of
rounded out our team
and we found a good lawyer.
He, he actually just
quit, though, so we're,
we don't know what
we're going to do.
But I'm going to.
Finish this sentence for
for everyone then. So.
So you said
Ashley is open and honest
and Jay is.

(01:01:23):
Jay is much better at,
telling the story
the way the investors
want to hear,
I guess, is the thing you like.
Investors are fickle
and they are busy.
A lot of times
they're super busy people.
They don't have time to,
you know,
they don't want to go through
every like
we spend hundreds of hours
analyzing these deals.
They don't want to go through
that hundreds of hours.

(01:01:43):
There's a reason they came to us
is because they
they know, like
and trust us
to put that time in and do that.
And so they have certain things
that they care about.
People know like and trust Jay
Jay is smart enough
to get all of that other stuff
and understand it.
And I'm.
Waiting for them,
but not smart enough to.

(01:02:04):
Well know
because I guess
I was trying
to go to the other side of it,
is that there's a lot of people
who who's pitching
or pitching deals these days
who are not intimately involved
and don't necessarily
understand it
to the, to that level.
So I was
I was trying to give you
a compliment,
Jay, that is somebody
who's actually,
who talking to investors
and dealing with investors
actually understands
is intimately

(01:02:25):
involved in the deal.
And that's just something
that every, every,
every team needs.
And by syndicating, you can have
each people
do what they're good at and
and not have to do anything else.
And if there's a, there's enough
to go around to,
to have that involvement.
Yeah.
And Kyle

(01:02:45):
you brought up a great point.
And Robert,
I want your take on this too,
because, you know,
you talked about
like you hate raising money
and that's not your skill set.
But but syndication
is more than just raising
money, right.
It's raising money
but also finding deals.
And Robert at your event, I
you know, I've been to it
so many times
you talk about the,
the cereal and the milk analogy,
which I always think it's great.
Like you're always as a syndicate
or you're, you're,

(01:03:05):
you're, you're
looking for the milk,
you're doing the sales
that like part of it is raising
the money.
You're always looking for money,
but you're also also
looking for deal
underwriting deals
and having that skill set.
So maybe maybe talk a little bit
about that, that,
that analogy that you guys,
you use quite a bit.
What's the balance. Right.
If you talk to anyone
who syndicates either
they're deal rich.
Hey I got 3 or 4 deals,
but I don't really have the list

(01:03:27):
to be able to fund that much
or it's the other way.
Hey, I've got investors
and they've asked
to put more money
in, and
I don't want to
lower my standards
and take a deal with this. Hensel
and so I use the milk
and cereal theory,
which is, you know,
you start out
with some cereal in a bowl
and you pour in some milk
and you get near the bottom
and there's way
too much milk left.
So you pour some more cereal in
and then you don't have enough

(01:03:48):
milks.
You pour more milk in before,
you know,
if you eat the
whole box of cereal
and the whole carton milk.
But it's the premise
that it's never imbalance
and it's not going to be.
So as a syndicator,
you need to learn
that there will be
periods of time
where you'll be
scrambling for dollars,
and there'll be periods of time
where you gotta close
on deals, right?

(01:04:08):
And there'll be times
where your, your,
your awesome clients
bring you referrals.
They bring their own capital
and you don't have
any place for it,
which is why we love to affiliate
with lots of people
in the business.
If I don't have an active deal,
but I have a client
that's got a place
$250,000, I would much rather
introduce them

(01:04:29):
to one of you guys
who has a deal and say, hey,
these are some solid guys.
I can't guarantee results,
but do your homework,
check it out.
They've got great track records.
That doesn't take away from me.
In fact, that gives me credit
when I will point
to somebody else
that, you know,
a lesser minded
person would say,
that's my competitor.
Not at all.
Together, everyone achieves more.

(01:04:50):
This time.
They want to be in your deal.
Next time,
they'll want to be in my deal.
And it does give exposure
to different asset classes.
Like I love to invest
passively in stuff
that I have no business
being active in.
It kind of Kyle's point
you can't be good at everything.
You can only be good
at a handful of things.
And the essence of syndication
is that you put together
people on a team
where you have the bases covered

(01:05:11):
and together you
it's you've got a much better
fighting chance
of making the deal happen.
But there's always going to be
that imbalance.
And it's it's like that
in real estate.
We just don't think about it.
I want to buy
another rental house.
Well, I
you know,
I can't find the right deal.
I can't make a pencil.
But I got a busy life.
It's not the end of the world.
When your business
is syndication,
then deal flow
is incredibly important.

(01:05:34):
But so is having
the right number of investors
and the skill set to be able
to talk to those investors.
As Kyle says, Jay has.
That's critical.
That's critical for both sides
because the investor
needs to be able to understand
they're busy people.
That's why
they're passively investing
and not doing the
deal themselves.
They want enough information
to take action,
but then

(01:05:54):
they need
to have confidence in the team.
And once they do, you know,
we see a passive
investor isn't really passive.
You do the work up front.
You've got the market,
the deal, the all the operators.
Once you're feeling good
about that
now, there's not much to do.
Once I write the check,
there's not much to do,
but I need to do the work upfront
to make sure I'm
betting on the right horse.
Actually,

(01:06:15):
can you talk a little bit
about the fear factor?
You know,
when people say,
hey, I'm just I don't
I don't want that
awesome responsibility
of taking on investor money.
Like, how do you address
somebody who's
thinking about syndicate
and thinking about
taking the leap?
But, they're a little bit
fearful of,
like,
I don't want to be responsible
for taking these people's
hard earned money.
What do you say to those folks?

(01:06:35):
I would say that
if you are concerned
about losing people's money
and you're worried about that,
you're an excellent candidate
for syndication.
If, on the other hand,
you're like,
I don't care about that,
then probably a fast food career
would be better for you.
It's the quandary.
It's how Kenny McElroy,
he also
often speaks at our events.
We came together on this very,

(01:06:55):
very point
that the wrong people often
make themselves,
you know, in this business
and happy
to be surrounded
by a lot of the right people
that are doing it
for the right reasons.
But you do have to,
you know, trust,
you know the person a lot.
So you have to understand
their motives, their agenda,
how they get paid.
Marissa, you teach us,
everything is disclosed.
If I'm making any kind of fee

(01:07:16):
or whether it's a reversion
fee or a brokerage fee,
or I'm getting anything at all,
I have to disclose that
because you want to be
100% transparent.
Now, I will tell you
a lot of the passive investors,
they don't have a lot of time
like you
send them a report
once a month or once a quarter.
And, you know, a lot of us
use the the electronic systems
where we get the feedback
of whether or not you open it

(01:07:37):
and how long you read it
and all that stuff.
So many investors
don't to read this stuff,
but you have to communicate
and communication is huge,
so there's just so many
angles of it.
If you have trepidation
or fear, that's good.
That means you have a pulse
and perhaps you're
the right kind of person
to consider it.
Yeah, I
so so Robert was talking
earlier about
we shouldn't
treat our competitors

(01:07:59):
like competitors.
We should treat them
as potential partners.
I'm going to
I'm going to go from
the other side of that coin
and make another point
that I think
is really interesting.
That's worked so
well in our business.
Treating your partners
somewhat like competitors.
And I
that sounds weird,
but let me let me dig
in a little bit.
So what we found in
our business is Ashley,
who is his
as our business partner.

(01:08:19):
Kyle, my business partner.
She focuses on deal
finding, asset management.
She's the best at that.
I focus on capital raising.
Kyle focuses on raising the kids.
Or, I don't know, watching.
Oh, no, I'm sure,
I'm sure he does something.
I.
If you would step up
and do
the underwriting for me, Jay,
then I could focus on raising

(01:08:40):
my kids
like is my lifelong dream.
So if you.
I did promise you
I would do that. Like.
Take some more videos,
go to maybe
a few more of Robert's,
educational things.
I'm sure he's got something on
on underwriting.
You can take.
That better
that he's not buying as many Girl
Scout cookies anymore
because of the challenge.
There you. Go. That's true.
Yeah.
You just to

(01:09:00):
some to your house now.
Just so you lose.
So, so Ashley runs the let's it's
not just this,
but she
basically finds the deals
for our group.
I raise the money for our group.
And what we found
that works really
well for us
is we basically treat
these two parts of the businesses
essentially as two businesses,

(01:09:21):
almost competing businesses.
It's her job
to find as many great deals
as possible,
regardless of
how much money I can raise.
And it's my job to raise
as much money
as possible,
regardless of how many deals
she can find.
In a perfect world,
she finds tons of deals.
I raise tons of money,
we bring them together

(01:09:41):
and everybody's happy.
In the real world,
she's finding more deals
than I am,
or I'm raising more money
than she is,
and we're forcing
the other person
to be accountable.
If I have too much money,
she needs to find deals.
If she has too many great
deals, I need to find money.
And if we can't do that,
well, we're going to go out
to other people.
If she finds great deals
and I can't raise the money,

(01:10:01):
she's going to bring
in other partners who can.
If I have tons of money
and she can't find great deals,
I'm going to go find other places
to put that capital.
You got a caveat there.
I just saw Marissa use it, which.
She doesn't
bring in capital raise
or she brings in partners.
She brings in partners
who can help
with all parts of the deals,
but they have their investors

(01:10:23):
that they bring with them.
It's a. Great mindset.
This is Malkin cereal,
but you're using it in the way
that it's friendly competition.
You know,
kind of like the body fat thing.
But everyone benefits from it.
And I think that's a
that's a great mental
attitude to have.
I've had a very
similar experience
in our construction company.
You know, it's it's how how many,

(01:10:43):
how many houses can we sell?
How many houses can you build?
And that's it's
it's almost the same thing.
So I love the
mentality behind that. Jack.
Yeah.
I do want to talk about
one thing because earlier
I think Mauricio asked
how did how did you guys get
started in this business?
Kyle gave his story.
I want to give my story
because I think it might,
encourage people.

(01:11:04):
I don't want to inspire. I'm not.
I'm not an inspiring guy,
but maybe
to encourage some people.
So I grew up in.
I lived in apartments
my whole life as a kid.
In fact,
I lived in very large
apartment complexes.
There's a guy named Alex Brown
who's a well known,
apartment builder,
and I
lived in one of his 600
unit complexes
when I was growing up.
I went to college, and like,

(01:11:25):
my junior year in college,
I moved to,
an apartment complex
outside of the University
of Maryland
called Spring Hill Lake,
which is the,
I think, the largest,
single apartment complex,
1300 or 1400
units on the East Coast.
And so I had always
lived in these huge
apartment complexes. And to me,
owning real estate

(01:11:46):
was achievable.
I could buy single family houses,
I could buy duplexes,
I could be a landlord.
But the idea of owning
an apartment complex was
absolutely outside
of my realm of possibilities.
And this is somebody
I worked in Silicon Valley.
I did mergers and acquisitions
on billion, literally
billion dollar deals.

(01:12:07):
But I couldn't get my head around
how somebody like me that grew up
living in apartment complexes,
not having a lot of money,
could ever be
somebody that could own
apartment complexes.
And it wasn't until I
started partnering
with Ashley and Kyle
that I realized that
this isn't just something that
kids of billionaires do,

(01:12:29):
it's something that it was that.
Or Blackrock. Or Blackrock.
This is something
that any of us can do
if we know how to do it,
if we find the right partners,
if we build the team,
we can do this
and it's not going to be like,
you go out tomorrow
and you're leading a deal
that buys 500 units,
but you can go out tomorrow
and be a minority partner

(01:12:51):
on a deal that buys
500 units and contribute
whatever skill you have.
Maybe you're a great underwriter
or you can learn
how to underwrite
you contribute
that skill to a deal,
and you get a couple percentage
pieces of equity.
Maybe you're really good at due
diligence in forensic accounting,
and you can look at leases
and and earn
earn a few percent there.
Maybe you can find a deal
and earn a few percent there.

(01:13:12):
Maybe you know
how to manage contractors.
You can be a construction manager
and learn a few percent
there and tie yourself in.
Insert yourself
into somebody else's group
working on one of their deals,
and you learn the business.
And that's what I did with Ashley
and Kyle.
I came in and I said, okay,
I am pretty good at underwriting.
I'm pretty good at due diligence.
I'm pretty good at this and that.

(01:13:32):
I can sign on a loan.
And I inserted myself
into the first deal we did.
I got a couple percent, not much.
But that deal
I learned the business,
and within a couple deals
after that,
I could be somebody
that could lead
a deal doing 50 or $100 million
apartment complex.
And so it's just

(01:13:53):
I want people to realize
that it's real easy
to get yourself in this mindset,
that this is what
other people do.
You can't do it
because you don't have the money
or you don't have
the background, or
you don't have the pedigree.
You don't have the experience.
I was that guy
that didn't have the money
or the background or the pedigree
or the experience,
but I found other people

(01:14:13):
that I could work with.
I found people
that could teach me
and I could work my way up,
and here I am.
I can do it now.
And so that mindset shift,
unfortunately, I was 48 years old
before I figured it out.
I wish I would have figured out
20 years sooner.
So anybody out there
that's in their 20s
realized you can do it?
It's not something that

(01:14:34):
other people do.
Anybody can do it.
If you're willing to work hard,
surround yourself
with the right people
and work from the ground up
better. Clip that Jay.
That was like,
inspirational, like Tony Robbins
right there.
You gotta, you gotta.
I don't think I want to be
better than that one.
That was pretty.
That was pretty good.
Another great example
is that it's so hilarious
because I'm, you know, I'm here
in San Clemente, California,

(01:14:55):
and I'm literally in my office,
and I look at right
beyond my computer screen
and I look outside, there's
this there's a hotel,
there's a boutique hotel
that literally sits
across the street from my office.
And my buddy Rich summers
bought this property, literally.
I think it closed last week.
Like, literally, he's
the guy who bought it
and it's a boutique hotel.
16 I think it's a 16

(01:15:16):
bed, 16 room hotel.
And, it wasn't that.
I'm a little surprised.
I mean,
I think it
negotiated some
pretty good terms,
but I think he bought it
for like 5 or $6 million. Right.
So, hey, I don't have $6 million.
Probably you guys aren't
liquid enough to just go
plunk down 6 million, but,
you know, you get a bank loan
and you probably need
a couple
million dollars to go
put the down payment
and whatever renovations.

(01:15:37):
We don't have $2 million.
He went out and just raised
probably at $100,000
a pop, got ten,
20, 30 investors to,
you know, aggregate those money.
And
and now he's
the proud owner of a 16
unit or a 16 hotel room.
A boutique hotel.
That's the power of syndication.
You couldn't do that on your own.
But if you are, you develop

(01:15:58):
that skill and skill.
You can,
you can,
you can actually buy stuff
that you ordinarily
wouldn't even think of.
And as you're
driving around town,
most of those buildings are.
You look around.
A lot of those are
are bought by syndicators.
And another thing to keep in
mind is we're talking real estate
here, syndicating real estate.
You can syndicate anything.
So Kyle and I

(01:16:18):
are angel investors.
We invest in other people's
businesses together.
And what they're doing
is they're syndicating.
They're starting a business.
They need a few million dollars
to start this business.
So they essentially do
syndication.
They bring in passive investors.
I went to Kyle
a couple of years ago and said,
I want to buy a sports team.
I want to buy a hockey team.
And we actually sat down
and we started talking to brokers
that that broker,

(01:16:39):
like the sale of sports teams.
And how do we do that?
How do you
buy a 20 million
or 30 or $50 million sports team?
You syndicate it 21.
In 20
2021, 2022
was it was a very frothy time.
Yeah.
We decided not to do it.
But the reality is
you can use the syndication.
It's a way of structuring deals

(01:17:01):
and you can use syndication
to buy expensive artwork.
You can use my real estate,
you can use it to my business,
and you can use it to buy
sports teams.
You can use it to buy
anything that you bought.
You buy a horse,
you have horse racing.
You have you have horses.
I own race horses
and we
we have syndicated
horses in the past.
It's a pain in the butt.
But yeah, we
you can syndicate racehorses.

(01:17:23):
We can sell.
Three major
motion picture is syndicated.
There you go. Yep.
I and I have,
I have I've invested in that too.
I've never made a penny
investing in in films.
I do have my executive producer
credit on a couple of,
like, small indie films,
but never made a penny.
My favorite syndication
stuff is the stuff
you guys do at the event.

(01:17:44):
You guys syndicate lunch.
Tell me how you think your lunch.
Yeah.
And, we charge $85 for a lunch.
You get to sit
with a faculty member,
you get a
special guest speaker, and,
of course, at a hotel,
lunch doesn't cost $85.
It only cost $65.
And, we take that extra $20.
And that's
how we let the faculty eat.
So we joke that,

(01:18:05):
hey, we syndicated lunch,
and it was really easy
and really fast, and everyone
who came benefited from it.
So it is a great example.
It's more of a mindset
than anything else.
But to get to the bigger
deals, you're right.
So you drive around town,
almost all the big buildings
and the complex
and all the bowling alleys
and everything right there.
All those centers are

(01:18:25):
people sharing the risk
and sharing the reward to.
To cap this off,
I do always feel like
I have to be
the other side of this
because
what I've found is
we always tend to hang out
with people who always want to
maximize and be the best
they can be.
And like, my wife's the
the ultimate like she
I always feel like she's

(01:18:46):
got something to prove
and wants to hit her
maximum potential and,
you know,
squeeze every single drop
out of every thing.
Not everyone's like that.
There are people.
If it wasn't for her,
I probably wouldn't
be like that at all.
I would probably be that person
who has the
the 20 residential loans
between me
and my spouse on on

(01:19:06):
just 20 houses
paying down the mortgage.
And that would be
my retirement plan
while I work my W-2.
It that's not a bad plan at the
if you if that's what you want.
If you are happy
being a W-2 employee
and you're happy,
you know, having a little bit
more stability in your life
and just having real estate

(01:19:26):
as a supplemental thing,
I would argue
you could also,
just as we
said, invest your money
passively in these things.
But if that's not
you, then
there's nothing
wrong with that as well.
So like there's
the the other side of it
is you're dealing
with big dollars.
You're
dealing with very capable
people who are taking,
you know,
very large

(01:19:46):
portions of their lives
to working really hard.
If that's not what
you want to do,
you don't have to do that.
I mean,
either you could just kind of do
your single green house
instead of
jumping up to the red hotels
and still be just fine.
You're not going to get rich
like Mauricio, but.
Most investors
will never need
Mauricio services,
and that's fine.

(01:20:06):
It's just if you get Fannie
and Freddie out,
if you run of,
you're out of your own capital,
but you still have deal flow.
It is something to consider
for a passive investor.
It's just a way to get exposure
to something
other than little green houses.
I and I would argue
the best reason to get into
it is you're
just really good at some.
If you're really good
at finding deals
or if you're really good at,
you know, some aspect of that.

(01:20:28):
I think that your maximizing
your potential
by finding somebody else
who needs that skill
and, and just adding a few zeros
because you're doing
the same stuff, right.
You're doing
the exact same stuff.
You're just doing it
in a bigger fish
or bigger fishbowl or whatever.
They're saying, man.
And like, I want to
I don't want to get my soapbox
because I know we
we need to wrap it up.
You're moving on.
But that is one of my big

(01:20:50):
soapboxes.
It's like, hey,
if you're really
good at something,
if you're good at underwriting,
you're good at buying properties,
you're good at the business
of real estate
and syndication is great
because you get more capital.
You get to bring more people
along with you.
These days,
a lot of people
just raise the money
because they oh, it's
kind of cool.
I'm just going to go
raise money,
and I don't really know why
I'm raising money
or what it's for.
I think a good syndicator
already does something great.

(01:21:11):
Whatever it is
that your superpower is,
and you just want to scale that
and bring in more capital to it.
That's where I think
syndication just makes a
a huge difference.
But if you're just like there,
oh, I'm just going to go
raise a bunch of money
and I don't give it to Kyle.
I don't know
what the hell's going on with
I don't know what Kyle's doing,
but that's
where I think the issues are.
But if you've got a talent,
dude, just just scale that,
lean on that,

(01:21:32):
blow it up and go
raise money and go make your ten
or whatever you're doing already.
Just make sure
one of those people
is an operator,
someone who notes that
I actually run a deal
after you buy it.
Let's,
seem to be missing a few times
with some of these indicators.
All right.
Robert, before.
Before Kyle goes on,
I got to apologize in advance.
Kyle does this thing
called, like, a top ten list.

(01:21:53):
It's really lame.
It's really.
I don't know, I'm.
Going to pander a little bit.
Welcome to the pander
verse here, I heard you. Yeah.
So I'm going to do so.
As I said, I used to listen to,
Robert and, actually back, back
even when Bob was on the,
on the your podcast with you too.

(01:22:14):
And you guys had
some great guests.
I always loved it
because you'd have these, like,
big name guys.
And I would be excited
to listen to this.
And it wasn't, it was.
It was like a little insight
into, like, wow.
He seemed like real people
who are doing real estate.
And so I'm going to do
the top five real estate guys.
Guest
from, from back
when your episodes.

(01:22:35):
And this is a
it's a little bit
skewed and Mauricio,
I don't think you should be
should be number one.
Marissa. Number two. Marissa.
You should be a little bit
nice to me.
I'm going to I'm going to
modify this list.
So number five,
I'm based on number five,
Peter Schiff.
So I went to your YouTube,
Peter Schiff's
his episode back in 2020,

(01:22:56):
I think it was,
875,000 views,
which I think is pretty good.
And he's also
I thought it was timely, too,
because we did a whole segment
in gold.
That's kind of his thing
these days.
And he's got his own podcast.
It's even
his might even
be longer than ours.
And he talks a lot.
But, so
but he's a great guest
to have on. And, you.

(01:23:16):
Know, Peter.
Has predicted
19 of the last two recessions.
Yeah. Exactly.
But he is
I do like listening to him.
Guys like him.
Guys like George.
Because though
they're not always right,
they do think of things
a little bit like that
we wouldn't necessarily think of.
And it adds to your pool of ideas

(01:23:37):
that, you could
potentially pull from
and create your own ideas.
Next, Kenny
McElroy, he's
obviously a staple of our
real estate people.
I know you guys are good
buys with,
He he felt like
he deserved to be on the list.
He was also,
he might have been number two,
I think, on your most viewed,
and then obviously
Robert Kiyosaki,
you guys always have Robert

(01:23:57):
Kiyosaki on,
he's always been a great pull.
He's wrote one of the,
if not the best real estate
book of all time.
Number two,
before 2016,
it wasn't too much of a,
a controversial, guest,
but you guys used
to have Donald Trump
on your on your, radio show.

(01:24:19):
He would come out and talk
real estate.
He wouldn't talk politics.
He wouldn't talk,
any of these other,
you know, tariffs
or anything like that.
He would just talk
real estate and,
I, I actually
when we prepping for this,
I went back
and just listened
to a little bit of one of your
old episodes back when,
before he was, Donald
and he was just,
you know,
the real estate investor
and the number one
is obviously Mauricio. Raoul.

(01:24:40):
This was the best episode
you've ever had.
I went back and listened to that.
Just.
He he's such a he's
such an amazing guest.
He's so succinct
when he talks about.
And I just think he was.
He's awesome.
Which one?
Which one of the 17 episodes that
I've been on
did you like the most?
I know
you've been on a few times,
actually.
Well, I'll tell you.
When I can't think
of a good guest to invite.
Now, Marissa has been so long

(01:25:02):
and we talk.
Keeps us up to speed, you guys.
And he's always available.
He's always available.
Mean Christina's podcast.
That's like.
How Kyle.
Thank you for that.
So that's good. And, Yeah.
And so that's,
you also now
have all these events
and because of, I assume
because of your radio show,
you had so many good guests.
Now you have great speakers
come to these events

(01:25:23):
and I haven't my my wife is
gets seasick,
but I've always wanted to
come to your, your.
Cruise.
I wanted to see. Yeah.
Yeah. That's it.
Oh. Speaking at the summit.
At sea, if you want to.
So you mentioned Peter Schiff,
Ken McElroy, Robert.
They're all going to be
on the summit
at sea this year, right? Robert?
Not Donald Trump,

(01:25:43):
but the others that you mentioned
will all be on the,
investor summit
and see our 23rd year.
Plus we've got,
you know, George Gammon
and we've got,
Mike Maloney, bestselling
author on gold
and silver,
and Brian London
and Dana Samuelson,
a couple more really awesome
gold guys.
So the gold panel will be
wonderful this year.
And we'll go to the Bahamas

(01:26:03):
and Saint Thomas and Saint Martin
on a beautiful cruise ship.
So, yeah, the seasick thing.
I get that in all the years
we've been doing this,
we've only had 2
or 3 people
that it
was such an issue
that they just couldn't
even participate.
But I have a heart for it
because it's no fun,
to to be with all these amazing
fun, those.
Cruises they have,
they have pretty good built

(01:26:24):
in childcare too, right?
They always have the, Do
the kids camp is awesome.
From ages 2 to 17.
Your kids will have a better time
than you will, that's for sure.
All little group of kids,
we call them the Pepper pals,
and they hang out together.
And it's all my boys
who are about three years
younger than Kenny's boys.
You know,
they always looked up
to Kyle and Cade
because they were older

(01:26:45):
and they had done businesses
and all of that.
So it's fun now to see them
hanging out as young adults.
Do you say Cade.
Cade, Kyle and Cade McElroy?
I didn't know I have.
I have a Cade also, and I didn't
I don't hear that name too often.
Yeah. So there you go. Okay.
This is Kenny's younger son.
So.
So, Jim,
I'm coming up on your segment

(01:27:05):
here, and I'm scrolling down.
I've got record.
For the record.
For the record,
I do enjoy Jay's segment
more than I do yours.
Okay, so so here you go.
Hypothetical situation.
I've got it in my head.
I didn't write it down
$50 million, but now you.
Have to go.
You don't have.
To go any farther. I'll take it.
You have to become

(01:27:26):
the staunchest supporter
of the political party
that you hate the most right now.
Done.
I mean, I could do it.
I do it all the time
on this podcast.
I always have to
take the other guys.
So you have to be.
You have to be the one.
Time commitment.
For the rest of your life.
You've got to support that party
that.
Go to advance and rallies

(01:27:47):
and absolutely okay.
Where are the shirt?
Yep. You got to wear the shirt.
You got to go on
Facebook and argue
and do all the stupid stuff.
Again.
I always look pro tip
always convert
lumps of money into cash flow.
So $50 million lump sum is about
depending on your return
might be 5 million a year,

(01:28:08):
maybe $3.5
million a year
for $5 million a year.
I will go to rallies.
I will do whatever
it is that you tell me to do.
I the hard part about
these hypothetical situations is
I have to do my best in my head
to calibrate for you guys
what that number is.
I could have said 10 million.
I could have said 100.
I think 50 was a bit

(01:28:29):
too high on this one.
I probably should have gone
25 or 10. It would be tough.
I don't think I would do it
for ten.
I'm going to work for this.
I'm sitting here thinking
which side would be worse?
Like if you told me
like I had to be, that
you might have to.
You might have to flip
at some point in the future.
You might have to flip.
Yeah, you might have to flip
at some point in the future.
That's what I mean.
Like, I don't

(01:28:49):
I don't know
which side would be worse,
which I would be have more fear
of being a diehard supporter
of the Democrats
or diehard
supporter of the Republicans.
I don't
I don't know
what's going to be worse.
So they both so
here's here's
another hypothetical
that I just thought of
because it was an interesting one
since Robert's on the show
and he's a huge beer
drinker and I'm not
I mean, I like beer,
but I'm not a huge be.
I'm a wine drinker, as is J.

(01:29:11):
So J,
how much would you have
to get paid
to never be able to drink
a glass of wine again,
and always have to drink beer
whenever you have a drink?
And then Robert, same for you.
Like instead of
if you can never have beer again,
but every time
you want to have a drink,
you would have to have
a glass of wine.
Could it?
Could I do
like liquor
liquors off the table here?
Could I do clear rum?

(01:29:31):
I there's this thing here.
No. No wine or beer.
No sugar, no carbs.
It's really good. Wine or beer.
Don't promote your frickin
thing to wine or beer.
Wow.
How much? Give me a number.
What's the number?
What's the check?
I gotta write for you to do that.
It's probably.
It's probably
less than you expect.

(01:29:51):
Yeah, mine is two. I think. Yeah.
Like a. Million bucks.
If I wrote you $1
million check, you would be. No.
No, no,
it's a lot more than a million.
So.
Okay, so so 10 million.
Maybe 20.
Oh, wow.
So I do it for less than.
Just for alcohol, man.
You are. Yeah, I do like.
You do it for, for a silver
dollar, right? Yeah.

(01:30:12):
Maybe a monster box.
I don't know, box of gold.
Yeah, yeah.
It's true.
Yeah, it wouldn't,
you know, it wouldn't
be that cheap,
but it would be like
I've shifted.
I feel like I've shifted
so many times in my life,
where, like,
obviously when you're in college,
you're beer drinker,
and then coming out of college,
you just kind of start drinking

(01:30:33):
better beer.
And then,
then I feel like
I went on to liquor,
and then I just drank wine
because we started going to
nice steakhouses
and, like, I feel like I could
I could make that shift again.
So, like,
I feel like I do it for five,
honestly.
So 5 million you would drink?
For you what? It would.
I don't know what it would be
for you, though.
You're you're a
you're a bourbon drinker,

(01:30:53):
so I don't know what that means.
Yeah.
So I would say
you would have to be wine.
I don't drink a lot
of wine anymore.
So for you,
it would be
here's the thing for you would be
how much for
you never to be able
to drink a glass of bourbon
or whiskey or scotch
or something like that.
You always had a drink,
a peace Cola.
Oh, peace Cola.
That's that's higher.
I don't like that's like you're
if you're drinking, peace cola.

(01:31:14):
I feel like you're
just drinking with a purpose.
You're not drinking
for enjoyment.
And so it kind of
takes the enjoyment I feel.
I feel like if I became.
I don't
drink much wine at all anymore.
But I feel like if I got into it,
I could find the enjoyment in it,
and I could take it seriously.
I could do that with liquor.
And I could do
that with beer as well.
But, you know,
piss and cola, I can't,

(01:31:35):
I don't think I yeah.
When I,
when, when I, when the,
the fitness challenge,
one of the things
I'm going to request
is for
Jay to get me a, a first growth,
bottle of,
I don't know, maybe
a Margaux or something.
A couple,
a couple thousand dollar
bottle of wine and.
Well, we'll enjoy that for
with everyone.
That's what I'm thinking.
Well,
that last question, I'm
going to give everybody
10s $250,000 a year.

(01:31:57):
I'm out.
Nope. That's all you.
You have to.
You have to pick a job.
You're going to get paid
$250,000 a year,
and you have to pick a real job
to do.
What are you going to pick?
I'm going to be a
co-host of the Drunk Real Estate.
I haven't had a real job
in years.
Yep, that's not a real job ever,
I know.
Wow, that was like the what.
Is that, Robert?

(01:32:17):
The worst two weeks of your life.
By the week of the weeks,
I had an actual job.
Worst two weeks of my life,
I think.
I know what though.
I'd be a morning radio DJ there.
That's that is a good job.
I couldn't get up early
that morning.
No, that's what I mean.
Like, don't
you have to get up at like 3
or 4 in the morning?
Oh, Robert.
Hold on wait wait wait wait.
Robert,
you don't get up
till the crack at noon.

(01:32:37):
How does that work? Well, I.
Like to wake up
when I'm finished sleeping,
but if I had a high paying job
like that,
I might be willing to give up,
but I have.
I had to do something.
That's what I want to do.
I would be a profession or
a YouTube reviewer.
Well, my answer.
I. See why you got to qualify.
What's a job like?
A job
like you're you're
talking 40 hours

(01:32:58):
working for someone else, right?
Is that what you're talking?
Yep. Okay.
I'll work.
I'll work
as general counsel
for the real estate guys
again.
Again?
I know, I feel like I like
I feel like you're
thinking about this
the opposite way.
I feel like you pick something
that's a super low paid job
because it's easy.

(01:33:18):
And.
But you, since you're getting
paid 250,000.
A lot of minimum wage,
there are a lot of minimum
wage jobs I wouldn't do for 250.
I know.
So but that's what I'm picking.
Like some more middle
like I'm thinking like,
you know,
like low end security guard
or like lifeguard
or like something like that
where, like, I could go
and I could,
you know, basically,
you risk your.
Life for 250 grand a year.

(01:33:40):
Well, I'm. Okay. I'm not.
I'm not taking the security guard
job at the Federal Reserve.
I was thinking more along the
lines of, you know, at the,
chick fil A, when Jay
does one of his freak outs
and says he needs a sauce packet.
I'm looking at the pool
over here thinking
that lifeguard is not a bad one.
Yeah, exactly

(01:34:00):
250 grand to sit in a pool.
Yeah,
but then you got a shark attack,
and you got to go save the kid
who's in the middle of
a shark attack.
Like, I mean, come on.
And then you're.
Famous.
It's perfect.
Okay.
All right, let's wrap this up.
We'll end with, Robert here
because he's,
we got to give him some time
to think about this.
I feel like you got so much
you want to plug?
Probably here, right?
You you got to take

(01:34:21):
take your time.
So, Jay, what do you got?
What do you got the plug for us?
I'm going to plug
anything Robert's doing.
Like I said, I took,
the real estate guys
sales training course.
Actually, I can still
remember the name of it
because it was catching.
It was based off of that
book, right?
It was how to win
funds and Influence people.
Right?
Instead of friends,
you change it to funds.
I saw what you did there. Yep.

(01:34:42):
And it it was so good.
And, And I'm not a sales guy,
and I didn't want to go.
I mean, I wanted to go,
but it was it was,
it was tough for me.
And it was so, so good.
So. Yeah.
And anything
Robert's about to mention, that's
what I'm pitching.
All right, Mauricio,
I feel a trend coming on here.
Yeah. For sure.
I mean, I will,

(01:35:03):
I'll let Robert,
himself pitch the, the secret
to success with the
the case
which I
hope he's going to go pitch
because I'm going to be there.
So hopefully
he's going to be there.
It's more for me than him,
but I'm going to pitch.
I'm just sharing on
the screen here.
The the the the
the summit at sea.
What is this year, 20
or 30 or 40?
But but I mean, look at the
look at the stack.

(01:35:23):
Look, look at this.
Peter Chef, Ken
McElroy, Robert
Kiyosaki, George
Gammon, Brad
Shamrock, Brian London,
Dana, who are like
two of the top
gold and silver
and precious metals
guys in the world.
And yeah,
just an amazing faculty.
So how far
do we have to go to get to you?
Yeah. Well, yeah.
Robert, what is that?
What is that?
And there's a little

(01:35:43):
bit of a time commitment.
You got to go like
it's like a week
or ten days, right?
Well, one of those days.
Nine days.
It's two days
in the hotel in Miami.
And then we get on a cruise ship
for seven days.
It's June 20th,
the 29th,
and you can go to an investor
summit@c.com
and learn about where we're going
and who we're going with
and what cabins are like
and all that stuff.
So investor summit@c.com,

(01:36:04):
and no matter how great
we tell you it is,
it is way better than that.
Every night at dinner,
you're hanging out
with different faculty
members and folks
from all over the world, right.
Real estate
investors, the fact
that it's a barrier
to entry, it's expensive,
means that you're hanging around
all the right people.
And then the syndication events
coming up
right around the corner.
You got to move quick.
We do it twice a year.
So if you miss this one

(01:36:25):
you can come do another one.
But you will join us,
the 28th and 29th of March
this month,
right around the corner
in Dallas, Texas.
If you go to real estate
Guys Radio.com,
you'll see the events tab,
and there's all our
upcoming events.
That's the secrets
of successful syndication.
And it's great
if you're thinking about,
hey, I'm
pretty good at real estate,

(01:36:46):
and I could maybe
become a fund manager
and raise capital
and put together
an awesome team
like Ashley and Kyle and Jay.
Or if you're just
a passive person
that wants to learn
how to vet one of these deals,
Marissa
is going to take you through
exactly what's involved.
And we have a 12
faculty members for this.
But I think Mauricio
is the only one
that gets two sessions, so,

(01:37:06):
if that I don't want that
to dissuade you from coming.
Check it out.
But, I mean, I will.
It's always good to catch up.
Tom Wheelwright is always
there, too,
so I think
he's going to be there.
And probably Will Wright's
going to,
tell you why taxes are awesome.
Yeah, it's a great,
it's a great crew
and you'll learn a ton.
And we have people
that come back again
and again and again,
which is awesome.

(01:37:27):
So you find all the details
at Real Estate Guys Radio.com.
And if you
if you take that training
and you're super
good at underwriting,
apparently Jay's
trying to replace me, so
and just, just give you a call.
There might be a spot
opening up on Jay's team.
Nice.
Because apparently I'm.
I'm just expendable.
So, go take that training and

(01:37:48):
then, then then look us up.
All right,
guys, hey, that was a
it was a great episode.
And and just just
just to be fair,
Kyle has got an employee
of the month
in our company for the last 47
straight months. Nice.
Kyle, what bonus do you get?
You get like, a Starbucks
certificate or something.
Well, so I like to say
like I outperform my salary by,

(01:38:11):
an infinite amount.
You do.
You guys. Thanks for having me.
This has been awesome.
Thank you for being here
this week, for being.
Here, Robert.
Enjoy the rest of Vegas
by yourself.
Yeah. And, I had a lot of fun.
It seems like everyone else did.
My drink is gone.
I gotta go eat the head.
Thanks again to Robert
for the rest of you guys.
I will see you next Thursday.

All Episodes

89. Gold vs. Bitcoin – Which Safe Haven Asset Wins?

Episode Transcript

Popular Podcasts

On Purpose with Jay Shetty

Dateline NBC

24/7 News: The Latest

.css-15opob5{left:0;position:absolute;top:0.8rem;} All Episodes

.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}89. Gold vs. Bitcoin – Which Safe Haven Asset Wins?