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Real Estate, the Economy, and What the Headlines Aren’t Telling You · The Academy Presents podcast

• 0:01
  Did you know that 90 % of the world's millionaires
• 0:05
  invest in real estate? Well, I'm Angel with the
• 0:09
  Academy Presents Real Estate Investing Rocks,
• 0:11
  and I'm here to help you if you want to go for
• 0:15
  your piece of that pie. Are you new? Are you
• 0:19
  new to this and you just don't know where to
• 0:20
  start? It's okay. Are you someone that has invested,
• 0:25
  but you feel stuck, you feel like you've lost
• 0:27
  momentum, you don't know where to really head
• 0:30
  from here? Are you a seasoned real estate investor
• 0:33
  who is doing great but maybe you just want to
• 0:35
  hone a few skills here and there? This is the
• 0:38
  place for you. The Academy Presents Real Estate
• 0:41
  Investing Rocks podcast will connect you with
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  industry experts so that you can save time, avoid
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  costly mistakes, and begin living the life you've
• 0:52
  dreamed of all through real estate investing.
• 0:56
  You're already taking the first step. just by
• 1:00
  joining us here today. Well you know it's it's
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  almost as if the Fed is playing political games
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  here and you would think that they're just basically
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  another wing of their government which in a way
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  they are because you have the head politically
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  appointed but that's what people have come to
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  expect. We've had this perfect Goldilocks economy
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  for some time, maybe not perfect, but again,
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  we haven't had inflation for the longest time
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  and we've had a long economic expansion. Don't
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  get me started about how anemic the expansion
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  has been. It's been pretty weak, but people really
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  haven't felt pain for a long time and they're
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  not used to it. So, Angel, you may be aware that
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  most of the... central banks around the world,
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  they have a single mandate. We have a dual mandate,
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  makes our central bank a little bit different
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  in that they're supposed to not only fight inflation,
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  but also keep people employed. And you'd argue
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  back and forth whether that's a good thing or
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  a bad thing, but certainly we're going to have
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  more inflation given that our central bank is
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  trying to basically balance these two contradictory
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  goals. Well, and part of that historically is
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  that there is there's a there's a negative relationship
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  between unemployment and inflation. Usually they
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  work in opposite directions. Phillips curve tells
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  us that right. That has not really been the case
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  here, even though I feel like. The numbers. make
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  it look like that's what's happening. But I can't
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  help but think, how are these numbers accurate
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  if every place I go in town, there's still help
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  wanted signs? I'm just, I'm having such a hard
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  time with that. And maybe that's only true in
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  my area. I don't know. But there's a lot of jobs
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  out there. Well, it's not just true in your area,
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  Angel, I promise. We have a major labor force
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  participation rate. problem. And I know, I know
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  you realize that if you want, I can go and I
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  can show you some stats on that. But basically,
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  the issue here, oh, yeah, that's what's going
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  to happen is it doesn't like me to go into slide
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  sorter with two, two screens, but that's okay.
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  You know, we every time we have a recession,
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  you see that we do not recover to the same level
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  of labor force participation that we had in the
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  last. And that's sad, because COVID really did
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  number on us people got a lot of free money and
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  maybe decided that they don't really feel like
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  working and since we really haven't had the economic
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  turmoil that everybody's predicting and I'm sure
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  it is probably just right around the corner sad
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  to say that it's going to probably take something
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  like that to snap people out of this complacency
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  where you know I don't really have to work or
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  I work when I want to and you can say well you
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  know what's the big deal that the bar is closed
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  on Monday but wait we have issues throughout
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  our entire supply chain shipping lumber it's
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  always something and then just a few weeks ago
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  it was eggs probably by the time this airs we're
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  going to have another supply chain issue because
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  it's always something, somebody is not working
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  or we can't get it shipped where we need it to
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  be. This is a major issue. And I think that when
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  the sugar buzz of all that printed money wears
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  off, maybe people realize that no, wanting people
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  to work during the pandemic. was not just all
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  about money. I mean, this is people's lives.
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  I mean, people who may not be able to afford
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  a home. Maybe they find it very difficult to
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  get married because they can't form a new household.
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  People who are having a difficulty. going to
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  college. So this is going to impact real people.
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  But again, I think we're still living in Oz,
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  and it's going to take something to shake us
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  out of it before we realize that, you know, yes,
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  we have done something wrong here. And no, we
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  can't live in a world where there are just no
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  consequences. Well, and I think another thing
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  that's happened here over the past few years
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  is people really began to just value their leisure
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  time. So we already had some gig economy going.
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  We already had people that were working job to
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  job here and there. They didn't have full -time
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  jobs, but they were working for cash. And I think
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  that that economy is still strong in and of itself.
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  But the other thing you've got is you've got
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  people who really just got comfortable in that
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  lifestyle and they're not going to go back to
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  full -time jobs. They've figured out ways to
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  make it on less. They figured out ways to survive
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  without that full -time income. And I don't think
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  they're going back. And that's that's going to
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  be tough to recover from too. It's just. It's
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  just different, and so that's where I really
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  fuss about and has such a hard time with all
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  the stats that are coming out, because. You know,
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  if you're if you're looking at employment on
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  a smaller base. The fraction is not going to
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  look as bad as it is. And that's why we're talking
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  labor force participation rate, because like
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  you're only unemployed as long as you're looking
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  for work. Once you're no longer looking for work,
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  you're no longer unemployed, you're disgruntled,
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  and you're no longer counted. Now, why is it
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  that people like you don't write the headlines?
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  Because people don't want to read that. They
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  don't want to read that. They want to read other
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  bad stuff. I guess so. And you're 100 % right.
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  I mean, you understand the statistics. And unfortunately,
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  even those in the financial press who do understand
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  economics, they've got to write some scare headlines.
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  They've got to go sell copy every day. And the
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  facts may not be what sells copy, unfortunately.
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  Well, now it's like with the whole, we're not
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  in a recession. Oh, we're going to change the
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  definition because the jobs report doesn't look
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  that bad. right nobody ever said but wait a second
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  where where have all the unemployed gone they
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  didn't just disappear they're just no longer
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  counted oh yeah hundred percent so but anyway
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  yeah we could go on and on about this and just
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  be it's really frustrating yeah it's really frustrating
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  and it's i don't know i don't know how to how
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  to talk about it in a way that would convince
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  people. And once people's minds are made up,
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  they're not going to. It's the reason why there's
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  no use to arguing on Facebook or anything else,
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  because you're not going to persuade anybody.
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  Yeah, well, 100 percent. And I can show you some
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  calculations over here. If you actually take
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  a look at the labor force participation, you
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  can see just how much of it is due to the increase
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  in the aging population. You know, here we go.
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  I think I have to. Oh, what happened again? Oh,
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  my goodness. I am just. Yeah, it's I'm no good
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  with two screens, but you can see that most of
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  it was due to the fact that we have an aging
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  population, but a lot of it isn't. And shame
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  on us. Shame on us for the fact that that we're
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  not fixing fixing our labor force participation
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  problem. But anyway, yeah, there we go. I knew
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  it was here someplace. Yeah, see, that's insane.
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  But nobody's going to talk about that. Nobody's
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  going to look at that. I mean, look at the drop.
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  It's insane. So of course, the fraction isn't
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  going to look or the percentage, a percentage
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  is a fraction. OK, but it's not going to look
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  as bad as it is because you just keep making
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  the number on the bottom smaller. So it's not
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  as big of an issue. Right, right. And so people
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  who are above 65 are 50 % absolute terms less
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  likely to be working than someone who is under
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  65. So then when you factor in that we have,
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  say, another 4 .4 percent, well we should see
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  a 2 .2 percent decline, but yeah we've actually
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  seen a four percent decline in labor force participation.
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  So when you see the headlines that say most of
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  this is due to the aging population, well yes
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  it is, but depending on how you calculate it,
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  oh it's a sizable minority that's due to, gosh
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  can we just say it, it seems like people have
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  just gotten kind of lazy. Or we've got an underground
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  economy that we're not even aware of. that is
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  bridging that gap and they're not having to have
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  a documented employment to make ends meet, which
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  is scary in its own right as well. Right. Well,
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  there you go. And I'm not saying bad things.
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  I'm just saying that, I mean. No, 100%. I mean,
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  there are a lot of people coming to the country
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  and they're undocumented and we don't know the
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  extent of that. But again, we have seen a large
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  influx. Well, and I'm even thinking about like,
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  if you think about like jobs, like people that
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  clean houses or people that do events. maybe
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  some of those bouncers, maybe they're at a club
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  one night and a friend says, hey, I'm having
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  a house party in a couple of weeks. Can I pay
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  you a hundred bucks for you to come bounce at
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  my door? Like be the guy at the door that's checking
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  IDs, checking IDs for the party, you know? But
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  those are events that they make thousands of
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  dollars, totally undocumented. None of that is
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  documented in the economy. And those kinds of
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  events take place. I mean, whether it's a rave
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  or just a party or the college kids are like,
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  hey, I want to make money. I'm going to have
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  a house party this weekend. I already get stuff
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  in Hollywood or in California where they're having
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  these big elaborate stars having parties and
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  stuff. Some of those have fees associated with
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  them to get to one part or another. I mean, there's
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  all of these things that there's just a lot of
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  cash that's being exchanged, and so even though
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  a lot of people also talk about us becoming an
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  electronic currency or digital currency society,
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  there is a lot of cash out there because not
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  only is there cash in those kinds of things,
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  but people in poverty deal in cash. 100%. Anybody
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  who's got a Class D or even maybe a Class C minus
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  property, it's hard even in 2023 to collect that
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  rent. electronically and it would be easy for
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  us you maybe think it's easy for them but it
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  isn't right people just they're not in the banking
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  system and other ways around it you can go to
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  7 -eleven etc but i mean whoa you you really
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  just yeah there's a lot and they're afraid they're
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  afraid of having their money in the bank they're
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  afraid of not being able to access their money
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  because it's just and i got this from working
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  in high poverty schools is they don't want to
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  lose access to their cash because it's harder
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  to come by than it is for some of the other people
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  that maybe we know and we're surrounded by. And
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  so they have a huge distrust of putting it somewhere
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  and not being able to see it, not being able
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  to touch it, not being able to keep it on their
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  body and keep it safe. And so there's a lot of
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  cash transactions that take place. It takes place
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  all over. A lot of us don't recognize it because
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  we put our money in banks. We have debit cards.
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  We're used to doing things digitally. We buy
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  stuff online. We don't we don't see dollars the
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  same way we did when we were younger. I think
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  about it when I was like in high school and I
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  would count every dollar. I would literally like
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  iron my dollars. You can do that because there's
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  a lot of cotton in them and I would straighten
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  them all out and I would have them all safe.
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  They would all face the same direction. I would
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  have them in orders of denominations and I had
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  them in this little green can. and I would put
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  all my dollars in there and I popped the top
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  on and nobody ever messed with it. I got pretty
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  lucky because nobody in my house is going to
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  take it. But that was what I did and I could
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  see my money. There was a summer. I was the breadwinner.
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  Jason was still in grad school and we paid off
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  a ten thousand dollar credit card and I was getting
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  my teacher pay in the summer and then I was working
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  for a hockey team selling hockey tickets and
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  sponsorship packages. But when I would cash my
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  check, I would get it in cash. and I would put
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  it in our safe because I needed to be able to
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  see it, touch it. I needed to know it was there.
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  And that was how we saved the money that summer
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  to pay off that $10 ,000 credit card was because
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  every time I got a paycheck, I was putting cash
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  back in there so I could see it, I could touch
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  it, I could look at it. And there's a lot of
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  significance to that. So, you know, as we get
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  further along and we no longer see the dollar,
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  no longer touch the dollars and we move more
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  electronically, we forget what it was like. to
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  be in those situations where we needed the dollars.
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  We needed to be able to see them, touch them,
• 13:54
  feel them, smell them. We needed that, but that's
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  my own experience with it was when I was in high
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  school, junior high. And then the way that Jason
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  and I saved when I was making like 30 ,000 a
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  year and I was the breadwinner and that's crazy.
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  And I just think about that's my own experience
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  with not having the same security that we have
• 14:15
  now with the dollars that we make. So just kind
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  of think about those things too. And I just be,
• 14:23
  be conscientious that there could be some serious,
• 14:26
  um, highlight reels going on with the various
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  statistics that are being pushed out to us. Um,
• 14:33
  just be, be conscious of that. And I'm not saying
• 14:35
  put on a 10, like a temple hat, don't get all
• 14:37
  conspiracy. Um, that's not what I'm saying at
• 14:39
  all. I'm just saying be conscious of what could
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  be occurring and just question it. Just question
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  it. Don't. I'm not saying yes or no. Yes, it's
• 14:49
  amazing. No, it's crap. I'm just saying think
• 14:51
  about it. Give us some actual thought and then
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  draw your own conclusions. Well, it would be
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  just dandy if everybody understood macroeconomics
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  and made good decisions and. I know it's it's
• 15:04
  frustrating, but you know, George, I just want
• 15:06
  to thank you for being here and you have you've
• 15:09
  been such a great friend and you always bring
• 15:12
  amazing information to the table. I love your
• 15:14
  charts. It's a lot and I'm okay with charge but
• 15:20
  I know that there's some people out there that
• 15:21
  are not and that is why friends you want to get
• 15:24
  the VIP subscription because what you just saw
• 15:27
  presented to you probably needs to be watched.
• 15:29
  I probably need to look at at least four or five
• 15:31
  more times because I'm sure I missed some parts
• 15:34
  in there because while he was presenting I was
• 15:35
  thinking about what happened in the 90s in Texas
• 15:39
  when some of the homestead laws went away. and
• 15:43
  allowed for people to be able to take out those
• 15:45
  loans against their homes so that they could
• 15:48
  refinance credit cards or pay whatever. And I
• 15:50
  was looking on the charts. I was trying to find
• 15:51
  that information. So I'm absolutely going to
• 15:53
  go back because I want to see those because I
• 15:56
  remember it happening and I want to see what
• 15:58
  kind of an effect it had nationally because I
• 16:00
  don't think Texas was the only state that did
• 16:01
  that. I think there were some other states that
• 16:03
  also had some of those homestead exemptions where
• 16:05
  basically you couldn't lose your home. because
• 16:08
  it was your homestead. And so when that was taken
• 16:09
  away, people could get those equity lines, the
• 16:12
  credit or home equity loans, whatever they were
• 16:14
  doing. And they could use that money to pay off
• 16:17
  bills or do whatever they needed to do. And that
• 16:19
  would have been, oh gosh, maybe the mid nineties,
• 16:23
  late nineties. And so I need to go back and look
• 16:26
  at those. So, and I'm not trying to say that
• 16:28
  like, if I have to do it, wow. But I'm just saying
• 16:30
  there's a lot of information there. And having
• 16:33
  that subscription allows you to get into those
• 16:35
  recordings and really dissect them. because it's
• 16:39
  just awesome to have that information and have
• 16:40
  it right at your fingertips. All right. Well,
• 16:43
  you're a great friend, Angel, as well. And I
• 16:45
  just want to say thank you so much for the opportunity.
• 16:47
  I love this audience. I have met so many amazing
• 16:49
  people. Yeah, no, it is a lot of fun. And guys,
• 16:54
  thank you for being here. These are my six most
• 16:56
  fabulous days of the year. We do this twice a
• 16:58
  year, three days each time. And until next time,
• 17:02
  and hopefully we see you on the live side.