Jason Hartman - December 2019

Jason Hartman's Financial Freedom Report

Quality Over Quantity The Argument Against ‘Fast-Fashion’ Investing

If you’re anything like me, you can probably see all kinds of metaphors for the state of our economy, markets, and political system reflected in the swarms of people clamoring for the latest iPhone or Urban Outfitters sweater this season. What really gets me is most of those shoppers emerge from the fray with cheap sale items that immediately lose their value, fall apart, and leave them down $20 and worse off than before. This year, mulling over that mindless consumerism reminded me of my fifth commandment of real estate investing: Do not gamble. To distill a complex topic, the opposite of a prudent investor is a gambler — someone who chases after get-rich- quick schemes, fleeting market trends, or other risky forms of speculation. A gambler buys an asset (usually a property) in hopes it will appreciate despite the fact that appreciation is unreliable. They think they can predict market cycles so complex that they elude even Federal Reserve Chair Jerome Powell. Then they’re outraged when, instead of mounting, their wealth starts going down the drain. An investor, by contrast, will only put money into properties that make good financial sense from day one. Where gamblers buy with the expectation of appreciation, investors buy with the expectation of income. Income is reliable — appreciation isn’t. Odds are if you invest in a $100,000 property that

Jason's High Five

This Month Last Month

Mortgage Payment

$1,250

$1,256

Probability of a recession

34.8%

35%

S&P 500

rents for $1,000, you’ll continue to get that same rent month after month. In my experience, in order to be a successful investor and generate wealth, you need to buy up properties slowly, steadily, and after careful consideration. So, what does all this have to do with Black Friday? Well, the eager teenagers stocking up on fast-fashion brands like H&M and Forever 21 are gamblers, betting on what’s trendy (like flipping houses) without considering the long-term consequences. Just like those cheap clothes will fall apart at the seams, trendy impulse investments will depreciate over time and almost always fail to produce steady returns. Here’s the bottom line: You can’t build your wealth by filling your portfolio like an eager teen at a Black Friday bonanza. Instead of heading for the Gap discount bin, you should do what Audrey Hepburn — a true investor — does in “Breakfast at Tiffany’s”: buy a little black dress and a string of pearls that will look classic for a lifetime. When it comes to investing, quality beats quantity.

3,037

3,148

Job growth

219,000

166,000

Wages (year-over-year)

3.5%

3.5%

“HERE’S THE BOTTOM LINE: YOU CAN’T BUILD YOUR WEALTH BY FILLING YOUR PORTFOLIO LIKE AN EAGER TEEN AT A BLACK FRIDAY BONANZA.”

CONTINUED ON PG. 3 ...

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Get More Bank for Your Buck

How to Take Full Advantage of Your Financial Institution

Whether you’re banking with a credit union or a national giant, your financial institution likely offers more resources, account options, and saving plans than you’re using — or even aware of. As one NerdWallet article puts it, “Banks and credit unions continue to find new ways to both delight and confound customers.” If you focus on the delights, you can get more bang for your buck out of the financial institution you’re already using. Plus, there’s a good chance you’ll pick up new ways to stretch your retirement fund, grow your investments, and pass nest eggs to your grandkids along the way. Take these two easy steps to get started.

overwhelm customers, causing them to limit their interactions to plugging in a username and password to check their balance. Don’t fall into that trap! If you want to get a complete picture of what your bank has to offer, its website is the place to start. Next time you log in, set aside an hour or two to explore the site tab by tab. Take note of products and services you might not be using, like mobile banking apps, 24-hour hotlines, continuing education, and additional account options and their interest rates. Schwab, for example, offers a free online learning center complete with seminars, one-on-one financial advice, and more than 300 informative articles and videos.

updates from the reading materials on offer, make an appointment with a financial analyst, or speak with a bank teller. It’s in your bank’s interest to see your accounts grow, so representatives are happy to help. If you’ve already explored your bank’s website, this is the time to ask follow-up questions on what you found or make a financial move in a new direction. Whether you’ve decided on a 529 plan or a high-interest checking account, your banking representative can make it happen.

1. Get Clicking

2. Schedule a Sit-Down

Even for someone with plenty of internet savvy, bank websites can be intimidating. Most are filled with tabs and portals that

If your bank has a brick-and-mortar location near you, make a point to visit it. While there, take the time to learn about the latest

Step Inside the Mind of Developer Chris Porter Are Modular Homes the Investment of the Future?

Not long ago, JH founder Jason Hartman sat down with Chris Porter, the senior vice president and chief demographer at John Burns Real Estate Consulting, to talk about the latest trends in real estate development. During the conversation, a topic came up that both men agreed may soon be pivotal: modular homes. According to NPR, modular construction is still a small segment of total construction, but it’s gaining ground in the single-family home, apartment, and hotel sectors. John Erb, the director of construction at Champion Commercial Structures, told the radio station that modular

construction can save builders both time and money, chopping construction timelines down by 25–45% and reducing the need for union labor. Jason disputes the common assertion that modular homes are a cheap investment right now (his own digging revealed “affordable” modular homes sold on Amazon came out to $200 per square foot when all was said and done, not counting land and utility costs), but he and Chris aren’t dismissing them as the real estate of the future. “I think we are going to get to the point where, especially as we’re dealing with a labor shortage right now in the construction industry, this is a great time for tech to step in and help us rethink the way we’ll build homes in the future,” Chris says. Because they’re built mechanically in factories, modular homes create less waste during construction than traditional ones,

and technological advances are continually streamlining the process.

“And there’s the fact that you aren’t necessarily limited by daytime hours, for example, or by weather. So, if you can build the pieces in a factory and assemble them on site, I think there are some real efficiencies that can be gained there,” Chris says. In the future, the pair predicts modular home designs optimized for function, like boats and trailers, could — and should — sweep into the market. “This could lead to some relief in the cost of housing, and it can only be good. We’ve just got to move past this idea of sticks and bricks for houses. It’s just old-fashioned,” Jason says. To learn more about cutting-edge, non-traditional investment opportunities like this, reach out to our team at JasonHartman.com/Contact.

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The Truth About Negative Interest Rates

What Are They, and Why Do They Exist?

With the economy beginning to slow and the threat of a correction on the horizon, the term “negative interest rates” is being floated more and more frequently in the U.S. media. In September of 2019, President Donald Trump called on the Federal Reserve to push interest rates so far down that they’d become negative. For the average consumer, such a move would effectively incentivize spending and penalize savings because instead of paying out interest to their customers, banks would begin charging people for the service of safeguarding their money and potentially even pay them for taking out loans. In effect, the nation’s savings accounts would begin to operate like safe deposit boxes — a change of method that would encourage unwise borrowing and spending habits. Typically, central banks try to raise interest rates before a recession hits so they can ease the burden on customers during economic low points. Personally, I take that a step further by ignoring most of the newsmaking trends entirely. Financial media is junk food for your brain. It fills up space that could be used for better things and makes you sluggish when it matters. What’s worth paying attention to isn’t what’s happening today; it’s what will happen over the course of your lifetime. If you want to succeed as an investor, it’s time to commit to looking at the big picture. When you’re ready to do that, my team and I can help you build a portfolio of properties that will earn steady income for decades. Schedule an appointment today by calling 1-800-HARTMAN or visiting JasonHartman.com/ contact. ... CONTINUED FROM COVER

In this case, rates haven’t risen fast enough, and that has moved the U.S. to the edge of uncharted territory.

Negative interest rates have already taken off in countries like Japan, Sweden, Denmark, and Switzerland, where central banks are electing to use them to stimulate the economy, push up inflation, and ward off a potential recession rather than create a backup plan for one. However, in the U.S. the concept is facing pushback, in part because it’s seen as a last-ditch effort to avoid an economic downturn.

"For mortgage rates in the U.S. to go negative, something will have to go terribly wrong with the economy," Moody’s Analytics economist Ryan Sweet told NBC.

Still, for the same article, Bank of America told NBC that negative interest rates are “a possibility,” which means savvy investors should be on guard. When interest rates go negative, investors need to save more in order to earn the same income in retirement, making the concept of wealth-creation practically moot. To learn more about negative interest rates and strategies to avoid their impact, call 1-800-HARTMAN today. We’ll be happy to match you with an expert investment counselor who can help you build and retain your wealth. Are you ready to build your fortune? It’s time you invested in real estate. Visit JasonHartman.com or call 1-800-HARTMAN today to schedule a free consultation, shop properties, sign up for events, explore thousands of investor-specific resources, and learn from Platinum Properties Investor Network Founder Jason Hartman himself about how to accumulate wealth through real estate, the world’s most stable multidimensional asset class.

–Jason Hartman

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INSIDE THIS ISSUE

The Argument Against ‘Fast-Fashion’ Investing

How to Get More From Your Bank

Are Modular Homes the Investment of the Future?

The Truth About Negative Interest Rates

Who Did Jason Meet This Time?

December 2019

Spotted with Hartman Who Did Jason Meet This Time?

On a good day, the real estate investment business can be as fun as it is lucrative. Over my years of investing, I’ve been lucky enough to travel the world extensively and meet people from all walks of life — some more well-known than others! In this section of my newsletter, you’ll find snapshots from some of my travels. How many of my new friends do you recognize? –Jason Hartman

Jason Hartman with Steve Forbes

Jason Hartman with Alicia Silverstone

Jason Hartman with CeeLo Green

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