Month: June 2022

June 27, 2022

Is the Crash Over? Tesla-Apple-Facebook Destroyed.

Is the market crashing? Or a better question? Is it finished crashing? Because we know it’s already sold off a lot. We’ll be talking about that question. I’m going to try to walk you through what’s going on with the major indexes and some stocks, that all seem to be crashing. Now, you probably know that when a crash starts to happen, it happens everywhere, right? It’s not just one stock getting sold off. It’s a series of stocks, it’s a series of other assets. It’s all the assets, people are raising money, because they just don’t want to lose money. And additionally, there’s a systemic issue, when there’s a little selling that the market can handle it. When there’s a big issue, a systemic issue steps in and takes place. For example, if you’re on margin if your leverage, and that’s where all these problems always start is if your leverage, you start to get margin calls from your broker, your broker says, “Hey, you borrowed too much money, the assets not worth it enough, you either need to bring us more money, or we’re going to sell the asset.” So that starts to sell it. If it started happening at the big money level. In the hedge funds and the pension module, which was where I suspect it’s been happening for the last six months, pensions are in trouble. They’re underfunded, we’re going to have to bail out the pensions, and the hedge funds. Some of them are just closing their doors now. And some of them are down 75% such as Kathy Woods, Ark Invest, unfortunately, it’s down 70% or more.  

So, everybody’s getting hammered. And when they get hammered, people start to freak out and they fear and they start to grab their money. That’s okay. But it exacerbates the selling and accelerates it. And then those people are now scared. They’re on the sidelines, like, “Oh, are we done selling.” And those are the exact opportunities where the big money swoops in and starts to buy. And by the time those other people that are scared on the sidelines realize that they’ve missed a 30 point; 30%-40% run up or more in the market, and then they jump back in. But they’re usually missing the big part of the beginning.  

So, let’s kind of go over some of the indexes that are out there that are of note. Let’s start with the NASDAQ. Now the NASDAQ and all this stuff started to happen around Thanksgiving last year. That’s around when Jay Powell said, “Yeah, we’re not going to be too afraid of raising rates. We were wrong on our call, that inflation was transitory.” First of all, I don’t know why we’d ever believe him about anything. Because he was right, the guy is running the world’s money and he says I was wrong about transitory inflation when several months before he goes, “inflation is transitory. It’s only going to be here for a little while it’s coming and going.” It’s not. And then basically, he admitted that he was wrong. I think he lied. I think he knew, like if I knew, how come this guy didn’t know. If you knew what you were paying at the grocery store. How come this guy didn’t know? How come this guy thought oh is transitory? When you and I both knew that. We heard that there were supply chain issues. At the same time. We knew that we were printing all this money, and oh, it’s just transitory. Then they tried to blame it on Vladimir Putin, you know, like nothing ever happened inflationary before Vladimir Putin invaded Ukraine. It’s like we’re being fooled everybody.  

Let’s pay attention. November 26, is the peak of what it started to happen. And if you look at the NASDAQ, it went from 16,000 to 12,000 at the peak, right around that end of November period. And it started a steady decline. It had a small decline that a bounce and another bigger decline. And then a bounce, and then a third drive down and then a bounce. And a lot of people think the third drive down is the last one. But when there’s a big sell-off, it bounced up to its 200-day moving average. And then it just went crazy down, like went straight down ever since. And now are we getting to a bottom? I don’t know, there’s going to be a bottom at some point. But the NASDAQ is down 31% from its high,31%. Now, a lot of people were running around thinking that they were great investors over the last several years because the Fed was pumping money into the markets. And then in the last year, they find out that they’re not that great of an investor, and they’re getting hammered for 31%. Well, that’s fine when they made 29% last year, so maybe 31%, not so bad. But 31% is a bigger number now. They’re now underwater.  

The Dow Jones is not too different. It looks the same. It hit a high of 30 setback, right about 37, let’s call it and it’s now down below or right around 31,000. So, from 37,000 to 31,000. That’s lost more than 20%. And that’s strong because it’s got the big industrial companies there. It’s the Dow Jones Industrial Average, it’s only 30 stocks, but it’s got the big ones in there that reflect all the defense spending and maybe even some of the oil spending. Are those big ones that are propped up by the Russian-Ukraine problem. The S&P 500 index is a bit more broad. The NASDAQ is technology. The Industrial is what I just said. And now we have the S&P 500, which is just kind of a smattering of 500 stocks through all kinds of things from 4818, all the way down to 3800. I mean, that’s about a 25% decrease, right? It’s 25 to 30, no matter how you slice it on all of these things, but no asset class is immune. If you look at Gold, gold on November 26, was 174, it ran all the way up to 193, which is about 10%. And then from 193, it spiked up had a gap up a gap down, spike down came down, and now it’s right around 170. So, it hasn’t done anything. But at least it hasn’t really lost a lot of money. It’s kind of held on to value while everything really lost money, because everybody went to that safe haven of gold. Now, when things start to improve, they’re going to use that safe haven of gold as a cash asset. And they’re going to put it back into stocks.  

Because I can tell you, I believe that the Fed is going to start putting money back into the economy. Look, they’ve never stopped. Let’s be honest, they’ve never really stopped, “hey, let’s send 40 billion if you do your grade, let’s do $2 billion for Bill, trillion dollars rebuild that better,” like they’re printing money, like it’s going out of style, but they’re just not telling you. 

And then let’s take a look at the Treasury bond. Now, this is this is a travesty. Because I’ve been telling people for a while that we are in a 40-year bull market in treasuries, which basically means that as they lower rates, money, floods into treasuries that go up, but when rates go up, treasuries start coming down. And so, since November, which is when they spiked right around December 1, somewhere around there, 155, 12 on the Treasury index, that we’re looking at the TLT. And now it’s below 120. So, bonds, which are supposed to be that safe money, I don’t know why people think it’s safe anymore, because the Fed manipulates it. But you know, they start at 155. And then they start saying where they’re going to increase rates well, so that everybody starts to sell bonds. Now, here’s the issue with bonds. When you raise rates, people will rather put money in new money that has higher rates, and they start to sell off the older money with lower rates. And so, the treasury bonds are starting to become a source of cash. Well, they’ve gone down 30%, just about 30%. And that was because they’ve been in a 40-year bull market, I think that bull market is over, I think we’re in a major bearish market. For the Treasury, I think it’s not safe money anymore, we’re losing our credit as the reserve, world’s reserve currency status. Lots of systemic problems are happening in the treasury market. And that’s going to hurt the pension funds, because the pension funds put a lot of their money in the market. And everybody if you’re investing in treasuries, I’m sorry, because you got sold a bill of goods by hearing that it was safe money, and that you get your 3% or 2.5% percent, whatever your treasurer is paying you, but don’t worry, you get your money back at the end. But if you put your money in at 155, let’s call it on the index. And now you’re only getting back 120, who cares that you made 3%? You’re down 30. 

So don’t listen when people tell you that it’s a safe haven. When somebody says “Haven”, you need to start doing your due diligence, you know what I always say, “Never give up your power and your health, your wealth, or your time.” And if you just listen to some salesperson that tells you that Treasuries are safe, you have yourself to blame, I’m sorry, but the truth hurts sometimes. You shouldn’t just listen to me, you need to take control of your finances, guys, this is your money. They’re going to be long gone on driving their BMW and you know, living on a yacht, on the on the money that they charge all their clients every year, but you’re going to be the one that’s taking all the risk. That’s the problem with this whole model. 

Even Bitcoin, by the way, I’m a big Bitcoin fan, long term, short term, it’s a source of cash, because it’s speculative. It’s a technology. So, people were using that. And since November, it also topped and it’s gone down about 60% Or maybe 50%. So, it’s getting hammered.  

Let’s talk about some individual stocks. I’m going to start with Tesla. Tesla is one of those stocks that everybody loves until they don’t. And Tesla is an amazing stock they get they’re growing like crazy, got a huge backlog of orders. Like they’re not doing anything wrong. The stock hit 1243 right around the beginning-middle of November 1243. It’s now trading in the six hundreds, it’s about 600. And I don’t know 660, something like that. So, it’s lost about 40-45% as well. Tesla, it’s been on a really choppy path, but it’s lost some money.  

And the next one we’ll talk about is Apple. All right, Apple hit a high of 182 right around January. It was Ready to in December also, but it really didn’t lose much value, it held up really well, until just the last couple of weeks. And Apple has gone from 182 down to 139-137 actually. So, it’s lost roughly 35-40 points something like that. So, it’s in some serious trouble. And I don’t like to chart on Apple right now anyway, but it is a source of cash, and it’s been holding up better. I suspect that if the market keeps selling off, now they’re going to go to their Apple and say, “well, Apple is worse now. And I’ve already gotten all my money out of my other stocks. So, I guess I have to sell off some of my Apple.” 

Netflix is just a devastation, it went from 700 in November of last year, to now,it’s right around, what is it 186? From 700 to 186, it’s down about 75%. There’s a lot of stocks! By the way they are down 70-80-95- 90%, something like that. There’s a stock called upstart that went to 400, it’s now at 40. It’s down 90%. From the high. You know, there’s lots of stories that you don’t hear about, you just look at the indexes. And they’re horrible as well.  

And the last one I’ll talk about is Facebook. And Facebook, which was doing great. Zuckerberg was buying Instagram and doing all these things. Since then, they’ve done nothing but get hammered. Apple has introduced the privacy thing on their phone. So, Facebook can’t really monetize the data, your data that they’re selling to other companies as easily on Apple. And Apple has about 35% of the market. So that really hurt Facebook, plus they’re making some major errors in their tactics. And it’s starting to show up in their stock. So that stock has gone from 384 all the way down. It is now trading at 193. So, it lost 200 points from 384. That’s down huge. So, my point here guys is; are we in a crash? Is the crash over? My suspicion is we’re really close to the bottom. Well, I could tell you this, I don’t try to predict markets. I never could and never can. Nobody can. But I could tell you that when stocks and bonds and everything is selling off and it’s down 30% At some point, the bargain hunters come in and the big money bargain hunters come I. The big huge money, hedge funds and the big brokerage firms, the JP Morgan’s, and they start to buy. And they know that Jay Powell is probably going to end this charade of acting like he’s going to raise interest rates, when he gets a couple of reports in a row that inflation is abating or, the job market is not improving. They know it early, and they’re going to get in early and you’ve got to watch when they get in. So, I suspect we’re closer to the bottom, then closer to continuing the sell off. We have been through a crash. It’s a 30% to a 50-60% crash, depending on what you’re in. Is it over? I don’t know, I think so. I think it’s close to being over. And I will tell you that you should start getting your watch list ready because the Fed is going to start printing money again at some point. And it’s going to sweep that market back up. Otherwise, we go way down the other side. And I don’t think anybody’s ready for that. Or, I think I don’t think anybody really believes that that’s going to happen. It could. But I wanted to bring you up to date because there’s a lot more happening behind the scenes than they give us credit for. They tell us we have to do our own homework. And if you start to understand why the markets are down, you start to understand that people are running for the exits. Everybody’s selling margin calls, big money selling hedge funds are selling hedge funds, pension funds are probably going to be the next big balloon to burst. And once all that stuff starts to happen. You got to get out of the way and I suspect this was the beginning of that. I think we get swept back up. But I think we’re in a very long-term bear market now. I don’t think we’re going to get those all-time highs that we’ve gotten for a while, we’ve got to get rid of all the selling pressure that’s going to be clogging up the market over the next few months and maybe even years. So, hope that has helped you. That is my take on the market. Crash that’s happening here in this first and second quarter of 2022.  

June 20, 2022

The Netflix Debacle (and lessons)

Today we’re talking Netflix, Netflix just had this horrendous, horrendous week last week. And they basically warned, they’re losing all kinds of subscribers, because you know, everybody’s going back to work, right? And so, if everybody is going back to work, they’re going to make fewer numbers. Then Netflix came out with this brilliant idea where they said, “You know what? We’re going to crack down on Password sharing.” If you’re a family, and you got five people and you’re all over the country, maybe your kids are at university or whatever, and you’re sharing passwords, well, they’re going to put a stop to that. So, they’re going to start to crack down on that probably using IP addresses or something like that, to figure out a way to make sure that you’re not sharing the same password and only having to pay $12 a month or whatever Netflix charges these days.  

So, you have got to watch out for that, because that’s what’s coming up. But you know, what’s going to happen? There’s so much competition, this is why I always tell people that a stock really has its heyday for about 18 to 24 months, and then competition comes out. So now there’s Disney+, which has problems of its own these days. And then you’ve got all these other streaming services; you’ve got Hulu and Roku, and all these streaming services are competing with Netflix now. So, Netflix has to continue to innovate, continue to produce content, continue to produce information that people want. And everybody else is doing the same thing, right?  

Can you imagine nobody watching Disney anymore? So, people are going to stream Disney plus, it’s going to be a major competitor to Netflix, you’ve got all kinds of competitors to Netflix. In fact, in my situation, I just got rid of all of my cable, I got rid of the Dish Network. And I got rid of, you know, any cable that I had, because now I can just stream it.  

All right, and I have Netflix, and I can get rid of it. And I could use Amazon Prime, which comes with my Amazon Prime. And the videos are included in that. So, there’s lots of different choices out there.  

Now, let’s just talk about the stock for a second, the stock just got hammered this week went down like 150 points. So, it went down to like 25-30, I think maybe even 35%?! Actually, now this is a stock that was $700, just a few months ago and now the stock is hovering around $225. So, you know, people think well, “you know, I’ll just buy and hold the stock.” Well, it’s called buying and hoping right? If you buy and you hope, and you wait for that stock to recover. Sometimes the stock never recovers, or it’s dead money for 10 years while you wait.  

And so, in Netflix’s case, if you got out smart. If you got out last quarter when they gave a warning about this quarter, smart.  If you stayed in, tough to make a decision, right? So, what’s going to happen at this point, I don’t know? I can just tell you that there’s this guy, Bill Ackman. And Bill Ackman is supposedly one of the most successful hedge fund guys out there. He’s a billionaire, good looking guy with gray hair. And all he does is make really bad decisions. And people just keep throwing money at him. So, I remember a few years ago, I followed him into this one trade. And it was a pharmaceutical company that he was involved with. And this was a pharmaceutical company that was buying Bausch and Lomb and a few other things. And this thing just tanked. And it kept continuing to Tank and Tank and Tank and Tank. And finally, he just threw his hands up and he sold at the bottom. And this guy has continually made bad decisions. But for some reason, I don’t know what it is, people keep throwing more money at him. So, he lost $430 million on this trade in Netflix. And then he finally said, “You know what? It’s time to admit I was wrong”. He was only in the trade for three months. And he just got hammered for $430 million dollars.  

So, there’s a couple of lessons; number one, stocks don’t go up forever. Number two, get out of a stock, kill the monster when it’s small. Don’t wait until it becomes this huge loss. Keep your losses small. It’s a big lesson. Third, right now, as we make this recording, we’re in a bear market, which means stocks are selling off. So anytime there was a winner in the past, especially in the technology sector, they’re using those sectors to raise cash, right? So now people are selling those off. And they’re putting money into other things that are a little bit more hot. Things like defense, things like banking, because interest rates are going up. Other things like those things that have supply chain issues, that once the supply chain issue chain issues are resolved, those will go back up. So, there’s a lot of different opportunities. But if you just are tunnel vision, you stay with one thing because that’s the one thing they told you, well just buy it and hold. You don’t want to be out of a market when the markets are going the wrong way, then you’re going to be making a big mistake. So, you have to be nimble. There are periods of time where buying hold works, there’s no question about it. And you know, if you’ve got a 20-year horizon, it’s probably going to work for you, why? Because we are in an inflationary environment where we keep debasing the dollar and therefore anything that’s valued in dollars, right? The dollars that denominator and a dominator is reducing its value, and even its value in those it’s going up seemingly. So, during periods of time long periods of time that continues to happen. But what if you don’t have 20 years? What if you have to live on your retirement for the next 10 years and you have to start pulling money out, you can’t wait for some of these things to recover. So, you got to keep your losses small, let your winners run, but you also have to weed the garden, right? So sometimes there’s weeds in the garden, you can’t just look and say; there’s no weeds. We were a buy and hold investor, we’ll just wait. Why not take that money out, put it in something that’s going up. And easier said than done, right? But at least something that has the probabilities on your side of what’s going up. And then you know, try to continue to make money even during that period of time where you would have had dead money sitting in other stocks, like Netflix. So that’s the warning. That’s the lesson from Netflix from this week. Hope it helps you. 

June 17, 2022

Live the Life of your Dreams

We all dream….well at least I think we do….I know I do…I dreams about how I can make things better in my life.  And then I take action in that direction.  I recently had the pleasure of interviewing a really great friend, Jim Hughes.  He totally lives by the motto of “Living the Life of Your Dreams”.

We can all take steps towards improvement everyday, and Jim has a road map that you will want to hear all about!  For five years, Jim’s provided transformative experiences to high performers and entrepreneurs and around the world through his unique brand of coaching. He does speaking, he does events. And he’s helped a ton of people such as eight figure business entrepreneurs, world record holders, senior military leaders, top performing professionals. This guy’s a rock star! He leverages his extensive life experience. And we’re going to hear all about that today. He encompasses everything from running a multi-multi-million dollar engineering business in the past to canoeing the Yukon River, skiing the world’s longest giant slalom race, wearing only a G string, which is always interesting 🙂 And then, he approaches his work and and his life in a really fun and encouraging and courageous way.   You need to hear this interview!

June 17, 2022

Teach Your Kids About Money

When is a good time to teach them?!
In school, we teach our kids the A,B,C’s, math skills, Shakespeare, and all sorts of things that are somewhat important, and then again, most are not. When do we teach our children, grandchildren, nieces, nephews, etc…about money? Well, they certainly do not learn that in school….so how do they learn? Do they adopt your habits, or the habits you learned from your parents….or do they just figure it out as they go…? What is your approach? I personally think we need to teach kids about money and start that early on. I interviewed someone who believes passionately about teaching our kids about money. You need to see this!

June 8, 2022

How to Make Multiple Streams

Today I have a very special guest. At age 40 he retired as a corporate vice president in mergers and acquisitions in international banking. He completed of over 100 transactions consistently every year in real estate without a sales team or an assistant. This guy’s all about maximizing profit. He traded over 5000 investment properties in less than five years, developed five real estate holding companies owning more than 250 rental units, he’s a self made multimillionaire by holding and building real estate enterprises, including brokerage firms, rental management investment services. He’s the author of seven real estate investment books. This guy’s a superstar, you won’t want to miss out!

Gary’s Episode link: GlobalInvestorAgent.com

Cash Flow Machine Details: CashFlowMachine.io

June 1, 2022

How To Make People Love You – Dale Carnegie’s HU Principles

So often what I do is talk strictly about money. And today, I’m going to stray a little bit from that because I promised that I would be talking about success secrets. And I always want to start with the basics. So, for me, when I was a little kid, my dad was into personal growth. I guess that’s why I’m still a personal growth junkie right now. And he was always into personal development, and getting better and improving. He had all the greats on his shelf, he had Dale Carnegie, Earl Nightingale, Napoleon Hill and Norman Vincent Peale. And all these great writers that wrote back in the 20th century, about how to become a better human being. And you know, when I was a kid, in second or third grade, I guess I was a smart aleck. And I guess I kept getting bullied but I guess I brought it on myself. I didn’t like that, I wanted to be liked by more people, just like every kid does. And I got bullied a bit. Finally I decided I wasn’t going to take it anymore and I had a conversation with my dad. I don’t really remember the conversation. I just know, I had one with him. And he gave me this book. Now, I didn’t know that this book was going to change my entire life for the next 50 to 100 years or whatever. But he gave me this book. And it was a tattered yellow copy of How to Win Friends and Influence People by Dale Carnegie. And I thought what a crazy long title, I didn’t really resonate with that as a, 12–13-year-old kid, whatever I was, but I wasn’t even that old. Actually, I was a little bit younger. But I remember I had a typewriter. And I remember as I got that book, I would type the little sections at the end of each chapter called in a nutshell, and I typed all of those things out. What I didn’t realize was that I was actually typing the real human relations principles. The principles of Dale Carnegie that he built his entire organization on. And I will tell you that to this day, I teach for Dale Carnegie.. So that’s how much of an impact this man had on my life. But it wasn’t just him because I had never met him. But it was his ideas and his ideas are timeless, and they live on forever. You would do yourself a huge favor, and learn Dale Carnegie’s 30 Human Relations principles, we’re not going to spend time and do 30. Today, I’m going to just do nine, because the nine core principles that he started out with are really what everything else is built on.  

 

So, I want to start out with those principles. And I want to just kind of go through them. And if you could take one of them each week and start to implement it in your life and make it a habit, your life will become markedly better. I can tell you that because this first one that I’m going to tell you is the one that we all have a problem with so often, this is what our issues are? We are focused, f you have your hand in front of you, it’s really hard to focus on anything behind your hand, isn’t it? So, you’ve got to get your hand out of the way. But so often, the thing that’s in front of you, the hand, is most interesting. Why? Because it’s right there in front of you, you can’t get rid of it. And so, we are bombarded with tons of information from the news, negative information from the press politicians on and on the environment, etc. So, Dale Carnegie’s first human relation principle, and it’s the only negative one, it’s the only one that has the word don’t in it. And I think that there’s a reason and it is because it’s a negative human relation principle that we violate. 

 

And so, he says, “Don’t criticize, condemn or complain”. Now, think about it. If your life was void of criticizing, condemning, or complaining, how cool would that be? Now a lot of people make fun of me, they say “Oh, you’re really positive, but it’s a facade or, you know, nobody could be that positive.” Somebody told me years ago, but at the end of the day, I’m a happier person because I make a choice. We all have the choice. You could choose to be negative. You could choose to criticize, condemn or complain, and I’m not immune from it. I’m not perfect. And the brain wants to do that because the brain likes excitement and variety. But if you can stay away from criticizing, condemning and complaining your life, I guarantee it will become markedly better. And I highly recommend that you follow that key principle because that one to me is so critically important. 

 

Now, we start to focus away from ourselves and focus on other people. Principle number two is: “give honest, sincere appreciation.” And so, you know, you want to come from the heart, you don’t want to just say, “Hey, you’re great”, like that comedian that comes out and goes, “Hey, you guys are a great audience.” Well, that’s not very sincere, right? And it’s not very, maybe it’s honest. But it’s not that sincere, we want to feel that there’s real meat behind it. Especially if you can give some evidence, what’s the appreciation that you’re actually showing, tell them something about what you did that you do appreciate it, and it’s going to land so much better. So, give honest and sincere appreciation.  

The next one is: To arouse in others an eager want”. You know, let them figure out a way to want to be around you, let them figure out a way to want something, to want to talk, arouse them that eager want, don’t force things on people. But arouse that, bring it out, use your skills, to bring that arousal out of them and arousing in other people, that eager want. And by doing that, you’re going to see that they start to come alive.  

 

Number four: “Become genuinely interested in other people” which means that you have to go into their world, you have to enter their world and figure out what makes them tick, that is what it is all about. So, I know that in western society, we are so fluffy, right? When we meet somebody, it’s about the weather, or what do they do? We don’t really go deep with people, right? You have to be genuinely interested in other people. How do you do that? You do it with questions, right? If you really want to know what they’re about. It’s the who, what, where, why, and how questions that you get into that you start to figure out what makes people tick. If you can get to why people do things, if you can get to emotions, right? Rather than just the fluffy stuff, you’re really going to create a connection. You know, a lot of times I’ll go to a party, or I know people that will go to a party. I’ve heard this many times. And they’ll say, “well, that person is such a great conversationalist.” And I realized why they are a great conversationalist is because they asked lots of questions about that person. They didn’t just talk about themselves. So, when we talk about ourselves, a lot of times people are thinking about other things, you’re looking over your shoulder, what’s going on behind you. But when you let them talk about themselves, they feel heard in our society, we don’t really feel heard as much as we probably should. So, become genuinely interested in other people.  

 

And so that brings us to number five, number five is an easy one. And it’s just simple with the word “smile.”  And it basically means if you smile, you know that song, the whole world smiles with you, it’s a lot easier to look at somebody to hang out with them, to want to be with them when they’re smiling. So, allow that smile to come out. And, and you’ll see that it’ll create an environment and an attraction around you.  

 

Now, this one I always found was really interesting, because this one, I learned that there’s some negative connotations to it, but it’s called,” remember that a person’s name is to that person, the sweetest and most important sound in any language.” Why is that? Well, we’ve heard our names zillions of times, right? Now, a lot of times, it’s like Geoffrey get over here, Johnny don’t do that. And it’s got a negative connotation for some people. But really, at the end of the day, when people remember our names, how good do you feel? How important do you feel when somebody can remember your name? It’s really critical to remember somebody’s name. Now, a lot of people say, “Well, I’m terrible with names.” And if you say you’re terrible with names, you’re probably terrible names. Because your brain is listening in on what it’s saying and what it’s hearing. So, if it hears while we’re terrible with names, well, bald guy says we’re terrible with names, so we don’t have to worry about remembering. But if you say I’m awesome with names, and you start to make a science and again and have some fun with remembering somebody’s name, you know, repeating it a few times. People love that, right? You don’t want to be embarrassed in the beginning, that you just met somebody and then two seconds later, go, “Well, I’m sorry, what was your name again?” Instead, turn it around, make it a game. Say Hi, John. Nice to meet you, John. It’s John. Right? I got did I get it? Right? It’s a…..John. John, that is so cool. John has your dad’s name John. Great. Like, he’s going to be like, what’s wrong with this guy, but at the same time, he’s going to be like, he really cares about remembering my name. Now, if you can associate something around the name, John, and I’m going to let you use your imagination on that and associate it with something on his face. The next time you see John, maybe it’s 10 years later, your brain will remember that you met John, right? So really make a focus on it. Be because that that person’s name is to that person, the single most important sweet sound in any language. All right, cool.  

 

Number seven is cool. I love number seven; “be a good listener”. You know, God gave you two ears and one mouth, and you should use them in that proportion. Remember how I said before, people love to talk about themselves, allow people that opportunity to talk about themselves. I know, people that talk about themselves without even having an opportunity. And that’s always an interesting challenge. But be a good listener and encourage other people to talk about themselves. You know, we’re all interesting in our own way. I believe everybody’s a genius at something, maybe make it a game to go find that genius in somebody. Make it a game to find out something really cool. Some story that changed their life when they were younger, something they want, something they lost. Somebody they lost, somebody that said yes, somebody that said no, right, when they had a baby, there’s always something really cool. So, encourage those people to talk about themselves. And it will reflect really, really well on you.  

 

Now, “talk in terms of the other person’s interest is such a good one for me.”  

Number eight is: “talk in terms of the other person’s interest”. Listen, if all I talk about is the stock market, and that’s what I talk about a lot, or Bitcoin and I talk about Bitcoin a lot. I’m not a very interesting person. But if I find out what the other person, going back to that last one, going and find out what that other person is genuinely interested in, maybe they’re interested in baseball, there’s probably something that I can find common ground and talk about, at least if not, that person can teach me some things about baseball, because they’re really interested. Remember, we want to get them talking. Right? These are human relations principles. This is how we relate to each other. And you’re not going to learn anything if you’re just constantly talking. But you might learn a really cool thing if you just shut up and you listen about that other person’s interest.  

 

Number nine; “make the other person feel important and do it sincerely.” Okay. How do you make that other person feel important? Well, everything else to this point is led up to that principle. And how do you do it sincerely? You do it with evidence you do it with? “Wow, I really do care about you, I’m really, how did that happen to you? That’s interesting. Did was that a pivotal moment in your life? How did that make you feel? If you ever listen to a really good interview? Not some of these people that are sideline reporters on ESPN? Like, how did you feel when the guy fumbled the ball? Like that’s not what I’m talking about? I’m talking about like, how did you really feel like, oh, that must have hurt when that happened. Or you must have been elated when that happened, right? Make the other first person feel important and do it sincerely.  

 

So those are the nine principles that came from one of the most classic books of all time, written by Dale Carnegie. It’s called How to Win Friends and Influence People. It’s one of my three reads every year. And I’ll tell you what my three reads are every year. It’s number one, Think and Grow Rich by Napoleon Hill. That book will change your life if you’ve never read it. And if you have read it, you should read it and read it and read it because it was an amalgamation of all of the successful people that Andrew Carnegie, who was one of the wealthiest people and now the biggest benefactors in history. He wanted to find out what the science of success was. And he hired this journalist named Napoleon Hill. And he commissioned him for 25 years to go and interview all of his buddies, Henry Ford, Harvey Firestone, and all the people that were successful back at the turn of the century, in the 20th century. And he came up with these principles, these 17 principles. And I highly recommend reading: Think Grow Rich by Napoleon Hill. I read How to Win friends and influence people every year. It’s been updated for the digital age, there is a great version for that. He also wrote another book called: How to stop worrying and start living. And a lot of people live their lives and stress and worry and there’s no reason to do that. He’s got some great things in that book as well. And then I love Rich Dad, Poor Dad from Robert Kiyosaki. I think that is such a great way to look at money and finances and things like that. I have hundreds of books that I can recommend. But those are the three that I really try to read every year, because there are things that go into my makeup, that I believe if you want to keep learning something, if you read a book once you’re gonna learn a few things, but if you read it over and over again, at different times in your life, you’re gonna have a different spin on it. So, listen, there’s another 19 principles that came out from Dale Carnegie and through this podcast, and later on, I’m going to be talking about them. But those first nine if you can go back and listen to this podcast again. You could pull it up, you could pull up the Golden Book. Online, you can get an app called the Golden Book from Dale Carnegie.  It’s out there, read the book they are right in the book as well. But start to practice one a day, one a week, and really focus on becoming good. And I’ll tell you, start with that don’t criticize, condemn and complain. And you might start catching yourself going, “wow, I really do a lot of that” and your life will get better if you do it.  

June 1, 2022

Turn your Business into a Pot of Gold

Today I have a very special guest, he’s America’s Business Alchemist™ kinda like I’m a Wealth Architect. And he helps business owners and entrepreneurs break free of inertia and accelerate into the future that they dream of. He created Scaleology® and the Business Mastery System™ as the core foundational principles of dynamic and continuous business growth. Tune-in and find out how your can Turn your business into a Pot of Gold!

Episode Links: GetBillsGift.com and scaleology.guru

Learn More about Mark’s Cash Flow Machine: https://cashflowmachine.io/

 

June 1, 2022

Your House Is Not An Asset

Okay, so is your house an asset? I mean, this is a question that I get all the time. And you know, most people have been brainwashed to think that their house is an asset, right? But is it really an asset? So let me just go with the basic definition of what an asset is. And we’ll talk about what an asset is, from a cash flow perspective. An asset is something that is something you own; it’s got some equity in it. And then generally against an asset, there’s something called a liability. Liabilities, usually debts, are something that you do not own. 

 

But when it comes to the cash flow definition of what an asset is, I believe that an asset is supposed to bring you in cash flow. And so, owning a piece of land, while the definition of a piece of land is an asset, it doesn’t bring you in any cash flow, unless maybe you rent it out. For example, football games or something like that for parking. But it generally just sits there until it appreciates, because it has capital appreciation, then you sell it and make some money on it.  

 

Okay, so it is an asset, because you can do that. And houses are the same thing. But most people are brainwashed to believe that their house is an asset. What if you bought a house in 2006 and you paid $500,000 for the home and in 2009, you wanted to sell that house. You probably may or may not be able to get 250,000 for the home, about half. So, was it an asset? I mean, it’s a depreciating asset in that case. But what if you owed 80% of that? What if you spent 500,000 on it, but you owed 400,000. And now it’s worth 250,000. Now, it’s a liability, right? Now you have to pay back that $400,000 loan, plus, you’re going to lose money in the whole deal. So, it’s not always an asset, right?  

 

And I know that we think it is because we know so many stories, but stories are not statistics. We know so many stories of either our own or people that we know, they bought that house for $200,000 and turned around a couple years later and sold it for $500,000. Or watch all these flipping shows, right? And then we see these “Tarek and his ex-wife, they go out to LA and they buy all these houses, they flip them and they make $50- $100,000 on a house. And that’s fine. But there were a lot of flippers in 2007-2008 that got hammered. They lost everything because they were leveraged, they had all this, what they call the assets, and then the assets got taken away from them because they couldn’t sell them for what they owed on them and what they had in them.  

 

So, I want you to think about your house. It’s not an asset, right? Certainly, if you were to look at the real definition. Let’s say you go out and buy a half million-dollar house, and then you have $400,000 as a loan at 80% loan to value. You’re paying your mortgage, your taxes, your insurance, your maintenance, you’re doing all that stuff, being a good little homeowner. So, you got $100,000 in equity in your house, right? You got 20% equity, and that could certainly go up for sure. But it also could go down. And houses are not liquid. All of a sudden, the market rates go up. And they’re talking about raising rates right now. It’s certainly curtailing the amount of money supply that they’re adding, I don’t think they’ll ever stop, but they’re talking about it. It’s just that talk has spooked some of the mortgage markets. So, people are refinancing less, and they’re not putting their houses on the market. So, the value of houses may be coming down a bit. You got to watch that your house also doesn’t bring in cash flow.  

 

From a cash flow definition, your house is certainly not an asset. By the way, your house is held as an asset on your bank’s balance sheet. If you look at the bank balance sheet, they say $400,000 your house, you look at your balance sheet, it says minus $400,000. It’s a liability, it’s on the liability side of the equation.  

 

So, it’s not really an asset. I mean, just by definition, it’s the bank’s asset. But the weird thing is that when you need a new roof, you have to pay for the bank’s asset. You have to put the roof on, or when you need a new air conditioner, new heater, you have to pay for it, the bank doesn’t come in and say, “hey, I’m going to do this”. But really, the bank effectively owns it until you pay off that loan. 

 

And so, if you don’t have a perfectly good real estate market at the time you want to sell, you might lose money on the house. Certainly, you have to figure in deferred maintenance on that house. So, there’s assets, there’s liabilities, and then there’s a place to live. That being said, you have to look at a house as a place to live.  

 

Look, maybe my mortgage is $3,000 a month. And that includes all the payments; taxes, your insurance, and then your mortgage interest and your principal, but it doesn’t include your maintenance. So, you’ve got to figure your maintenance at maybe 10% a month. That over time, you’re going to need to accrue so you know you might have 10 years left on your roof, or you might not, but in 10 years, you’re going to have to spend $30,000 on a roof. You better save that money to do that. And that’s a liability. That’s an amount of money that’s deferred that you don’t think about. “you’re like, I spent $3,000 a month”, but you’re forgetting that you probably should be accruing another $300 a month for liabilities. Now, that’s just a guideline. But maybe you need new windows on your house, maybe you need a new roof, a new kitchen remodel. And every time you do some of those things, in theory, you add value. But how much value are you adding compared to what you were spending? You have to decide that things go out of style, and you’re basically fixing up the bank’s assets. At the same time, you’re having inflation eroding away at your purchasing power. So, while you think your asset is going up, it’s actually basically just keeping up with inflation.  

 

At some places in the country, obviously, it’s more, or it’s less, but it’s keeping up with inflation. If you just think that you’re living in this house, and then you’re building an asset, you’re not, you are spending money for a place to live.  

 

So now you have a number that you can take and say, well, I can either own my asset for $3,000 a month plus maintenance, so let’s call it $3300. Or you can say, if I go rent a place, all of that is included, all the taxes, all the maintenance, all the insurance, that’s all paid by the landowner, and you are the renter. So now you have a budget of $3,300. And that other money that you have can be used. That $100,000 that you have as equity can be used for something else. Maybe you put that in the stock market and you really make some cash flow. Or maybe you put it in a in a real piece of real estate that actually pays you rent. So, I want you to just take your brain and say, look, your house isn’t an asset, agree with me on that. And just try and come from that perspective. If it isn’t an asset, what is it? Well, I believe it’s a place to live. And no matter how you look at it, we all need a place to live. And that’s going to cost something. If you think it’s an asset, you’re going to make all this money back and you’ll be able to do a reverse mortgage when you’re 65.  

 

You might not plan on that because things change. To those people in 2007 and 2008, maybe you were one of them, saw things change. And today things are changing at a rapid rate. We’re pumping money into the economy. We’re inflating things. Of course, there’s some appreciation in parts of the country. But there’s also some depreciation. Deflation in other parts of the country, prices of houses are going down in certain parts of the country where people are leaving because of draconian lockdowns or because of high taxes, and they’re going to other places that don’t have those. So, the prices of those places are going up. And the places from where they’re leaving, are going down.  

 

So, I want you to just have an open mind when it comes to assets and liabilities. I like things that are cash flowing to be my assets.  So, I’m getting out. And I’ve gotten out of things that are not cash flowing, because that’s just money sitting there. That’s working against me, because every year your dollar buys about 20% less than it did last year. Inflation is going along, not at 6.8% like the government tells you, I don’t know what metric they’re using. But you know, when my eggs have gone up by 30%, and my meat has gone up by 40% and my gas has gone up by 50%. That’s nowhere near 7%. I go out to a restaurant, I used to pay $8 for a drink. Now the drink is $20 bucks. So that’s a huge amount of inflation in a lot of things that I spend money on and everybody’s got their own inflation rate. The government uses their own rate, but even at 7%, which is what the government says, and interest rates at 1% or 2%. That’s still a negative real interest rate. Real estate can keep up with inflation in a lot of respects, but sometimes it doesn’t. So don’t always think your house is an asset. Look at it as a place to live. And maybe that’ll help you reframe your brain when it comes to knowing what assets liabilities and cash flow are.  

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