Show notes
At age 20, you're actually happy to trade your time for money.
At 30, many have realized that they don't want to work at their job for the rest of their lives.
At 40, if you have collected things that pay you to own them, you're financially-free.
Instead, by age 50, corporate ladder-climbers often realize that their ladder was leaning up against the wrong building.
Most people play the wrong financial game all their life. You want to get financially-free first. You can get debt-free later.
"The Debt Decamillionaire" concept is revisited.
Learn how to get 4.75% mortgage rates for Florida income property with what is known as a "builder-forward commitment". Start here.
What about hotly spiking Florida property insurance? We discuss how premiums have been kept in-check with post-2004 built property and more.
Expect $3,200 rents on a new-build $474K duplex with 4.75% mortgage rates in Southwest Florida.
SFRs are available too. Start here.
There's free PM for the first year too.
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Monologue transcript:
Welcome to GRE! I'm your host, Keith Weinhold. Financially, you need to play a game worth winning. It's not about being debt-free. Instead, I discuss how at each age-when you're 20, 30, 40, 50 and beyond, it's about being financially-free.
Then, in an era where mortgage rates are 7 to 8%, we go straight to the source, in Florida, on how to get 4¾% mortgage rates on new-build property. Today, on Get Rich Education.
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Welcome to GRE! From Framingham, MA to Dillingham, AK and across 188 nations worldwide, yeah, you & I are back together here on Episode 471 of Get Rich Education. I'm your host, Keith Weinhold.
You've got to play a game worth winning - with your personal finances. Most play the wrong game.
Now, you're already initiated on this. Debt-free just means that you don't owe anyone anything. FF means that you've got enough passive income that you can do what you want to do, when you want to do it. FF is the flex.
Now, when you're around age 20 - you might be new to full-time employment.
And you know what, it actually can feel kinda good when you're in your early twenties are you're being paid what feels like a respectable income for the first time in your life.
Now, ten years go by, and by the time that you're 30, you know, I think that a lot of work-a-day job types - you might tell yourself, ya know, making money is alright at this point. But I really don't want to do this for the rest of life.
Maybe around age 30, you pursue alternative avenues of more RESIDUAL income.
But some people just keep plowing ahead hating big chunks of their life and devoting energy at a full-time job, because somehow, you feel like you HAVE to.
Others, though it's a minority, it's you. Because, instead, maybe around age 30, you tell yourself that you'd rather start building things that pay you to own them.
The mindset supersedes the grindset.
And by age 40, you're out. You're out of that soul-sucking job and you're living that life that you've always dreamed of living already. It sure could happen earlier.
And by age 50, you're so glad that you chose the financially free financial track in life - rather than the debt-free track.
Back on the slow, scarce debt-free track - the people that mistakenly think that debt-free is the game worth winning - they're still losing their zero-sum, non-replenishable resource of time in their 30s and 40s and 50s and 60s and maybe 70s.
Perhaps somewhere around 30, abundantly-minded, aware people like you developed your divergent, not-running-with-the-herd FF path instead.
You believe that money is an abundant resource - because you start having it all around you.
You built a financial windfall for yourself with simultaneous RE cash flow, leverage, and arbitrage while you're young enough to enjoy it.
Instead, the "work at a soulless job" type tries to get debt-free, climb the corporate ladder, and believes that money is a scarce resource (which is why they think they need to be debt-free). They defer their life and get eaten up by inflation and zero passive cash flow.
THAT person, by age 50, is asking themselves where all the time went. It went to a job that you're not passionate about - and you can't change history. All those time chapters of your life… are… gone.
And you begin to realize that the corporate ladder that you climbed… was leaning up against the wronggggg building for decades.
Those are two paths of those in their productive working years - the "there's never enough" debt-free world vs. the "money is abundant" FF world.
If you retire debt, like paying off a mortgage early, all those dollars are gone, when they could have been leveraging, say, 5 properties at once.
Now, if you're late to realize this, like you didn't have the FF epiphany by 30 or whatever. It's not too late.
You'll remember that in recent months here, we had two GRE listeners come on the show for two different episodes - Scott Saunders and then Shawn Finnegan.
Shawn - you might remember that was the inventor of a home gym system - he didn't hear this show & start until he was 52 and he's gotten to his first $2,000 of passive cash flow fairly quickly.
FF beats DF. And FF is the game worth winning.
Retiring debt early means your dollars can't be employed in true wealth-building activities.
Now, look. You might call me old-fashioned on this. But I like the integrity of doing what I say that I'm going to do, following through, and following up.
We check back at the end of the year to see how GRE's housing price appreciation forecast from the previous year actually went.
Back in January, we had the return of an agricultural RE principal where the cash flows DIDN'T hit what were targeteded, so we followed through and discussed why THAT happened.
And now…
You might remember that a few years ago, here on the show, I introduced you to the novel concept of being the Debt Decamillionaire.
That means that you've achieved $10M in debt - which doesn't sound like an achievement to most people. That's the Debt Decamillionaire. I recommended this as a desirable path for you - though many could deem it iconoclastic or even heretical.
If the only thing that I knew about you is that, say, you had $10M in real estate debt, I'd know that the chances are good that you're a financial WINNER.
Yep, it's actually unlikely that $10M in debt would make you a loser.
Not only would you have to be creditworthy to even get $10M of debt… just think about if you would have tied up that much debt, say, five years ago.
Well, how has it actually gone for the person with $10M in income property debt over the past 5 years?
We've had perhaps… 25% cumulative inflation since then - with higher wages, prices, salaries, and rents.
So then, your $10M debt is whittled down to just $7½M of inflation-adjusted debt.
So inflation passively beat down your debt for you, plus your tenants would have paid it down to somewhere below $7M.
So now, you'd be $3M wealthier, just off the debt debasement alone.
Meanwhile, over on the asset side, your property value that you borrowed against might have gone from something like $12M up to $18M… and all
While it created ALL that leverage plus some cash flow and tax benefit for you at the same time.
If you only managed to tie up $1M in investment property debt, then just take 10% of all those numbers.
And pat yourself on the back for being a debt MILLIONAIRE. Ha! Not Debt Decamillionaire.
Instead, high inflation made the debt-free approach hurt - really sting over the last five years. The opportunity lost!
DF is playing small ball, saying money is a scarce resource, and it even correlates more with people being addicted to a paycheck.
There's a benefit to a paycheck. But is the trade-off worse? Paycheck dependence is like you being addicted to a TIME thief.
That is, unless you get an unusually extraordinary amount of meaning from your work. In that case, great.
Now, a high interest rate environment could narrow the gap between how much better FF is than DF. But we're not in one of those. We're in a historically average interest rate environment.
But in just a few minutes here, we'll bring in a prominent American homebuilder of BTR homes that'll tell you how to still get mortgage rates as low as 4¾%.
In fact, the time in the market cycle is really right for talking about this. You'll remember that last month, Housing Intelligence Analyst Rick Sharga & I discussed why today's market is a good opportunity for residential REIs.
It's a bad market for primary residence HBs
It's a bad market for flippers
It's a bad market for real estate agents - with lower sales volume.
And it's a… decent market for many homebuilders.
I am in Chicago today.
Next week, I'll be in - my home state - the Keystone State of PA. I'll Sit down with Richard Vague, the Secretary of Banking and Securities for the great Commonwealth of PA from 2020 to 2023, there in the state capital, Harrisburg.
It is a cabinet-level agency.
He was appointed to that position by PA's Governor.
He also sits on the Ivy League University of Pennsylvania Board of Trustees.
I'll be sure he understands some core GRE principles here and get HIS opinion on those. That should be a really interesting episode next week. I don't know what kind of turn that's going to take.
To review what you're learned so far, I think you already know that FF beats DF.
Rushing to be debt-free exacts an opportunity cost on you. It postpones what you really want - Financial Freedom… and once you get FF, if you do desire to be debt-free then, hey, great!
Let's discuss how to get lower Florida insurance premiums, 4¾% mortgage rates and a free year of property management.
A lot of our listeners have acted on this. And I don't want you to miss out because I don't know how long it can last.
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Usually, you see fewer investors that want to exchange their properties in a higher interest rate environment, because you're trading in a lower rate property for a higher rate property.
But here, 1031s look more attractive because we've bent that back with rates down to 4.75% + lower insurance premiums on post-2004-built Florida property plus 1 year of free PM.
So many of you have been acting here on this - either by yourself at GRE Marketplace, or working through one of our free Investment Coaches. So, if it can help you, don't miss out. This won't last forever.
You can get started at: GREmarketplace.com/Southeast
Until next week, I'm your host, Keith Weinhold. DQYD!
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