Episode 159 – How to Invest in Real Estate in 2024 – Tom Wheelwright & Keith Weinhold

Speaker 1: 

This is The WealthAbility Show with Tom Wheelwright. Way more money, way less taxes. 

Tom Wheelwright: 

The real estate market's been a bit of a turmoil in 2023. What is going to happen in 2024? Today, we're going to discover what to look for in 2024 and what to do about it right now and into the future. And we have with us one of our real estate gurus, Keith Weinhold, who's been with us before. I've been on his show. We've been friends for a very long time. Keith, it's great to have you on The WealthAbility Show. 

Keith Weinhold: 

Oh, Tom, it's a real honor. It's been a couple of years. Thanks for having me back. 

Tom Wheelwright: 

Absolutely. So let's start with, if you would, a little bit of your background and how you got into real estate in the first place. 

Keith Weinhold: 

Yeah, sure. I was raised in Appalachian, Pennsylvania in a lower-middle class home. And when I graduated from college just with a humble geography degree, I fell in with a group of friends, Tom, that I would call aspirational. And I think we all might've heard the famous quote from the late business philosopher Jim Rohn, “You are the average of the five people that you spend the most time with.” Take your five closest friends, average their educational attainment level, average what they're doing on a Saturday night, average the way they dress. That's probably about who you are. And two of my five closest friends bought a fourplex building as their first ever home. They lived in one unit, rented out the other three as their first home ever. 

That sounded scary to most people, but to me it took on this context of normalcy because two of my five friends were doing it. And I learned that with just a 3.5% down payment, I could buy a fourplex building, live in one unit, rent out the other three with just a 3.5% down payment as long as I lived there for 12 months. You only need a minimum credit score of 580. This is something very actionable for your audience or for beginners or especially for a younger person. 

And what that really showed me, Tom, is that I don't want to focus on getting my money to work for me. That's a middle-class mindset. Getting your money to work for you, that's kind of a 401(k), middle-class mindset. I'm going to work in a soulless job until I retire. What I learned from that first property, Tom, and I since went on to extract equity from that fourplex to buy more properties, is I don't only want to get other people's money working for me, I can get other people's money working for me three ways at the same time like I did when I bought that fourplex building with a small down payment. 

I got the bank's money to work for me with leveraging the loan. I got the tenants' money to work for me by paying the mortgage and the expenses. And thirdly, I got the government's money working for me at scale with a fourplex building. You know you don't want to focus on only getting your money to work for you with buying an income property with a small down payment. You get other people's money to work for you three ways at the same time. So that's how I began and how I got into real estate and how it really transformed me and changed my life. 

Tom Wheelwright: 

So you did that very early. Sounds like it was right out of college. 

Keith Weinhold: 

It was. 

Tom Wheelwright: 

Good for you. Good for you. All right, so fast-forward, this is what you do full time. 

Keith Weinhold: 

Yeah. 

Tom Wheelwright: 

And it sounds like you dumped your geography degree, or was it geography or geology? 

Keith Weinhold: 

It was geography. You're right, it doesn't have much… 

Tom Wheelwright: 

Anything. 

Keith Weinhold: 

… to do with real estate. I guess they're both location, location, location, but they're fairly unrelated, yes. 

Tom Wheelwright: 

There you go. So that college degree, great. It's good you've got it, but now you're making money and you're doing it in real estate. 

So we've seen a big upheaval in the real estate marketplace, and I know you do a lot of work in single-family homes and the smaller rental units. Right? So first of all, what have you seen in 2023? We've had guests on here talking about multifamily and commercial. We haven't had anybody until now to talk about what's going on in the single-family rental market and the plex, what we'd call the plex rental market. So what have you seen has happened in 2023? 

Keith Weinhold: 

Yes, you're right, I deal largely in the one-to-four unit space. Really, Tom, what I saw happen in the year 2023 is we saw mortgage interest rates probably hit their peak for this cycle at just over 8% in October of 2023. And really I think what we saw is a lot of people learned something I've been talking about for a few years, and really Tom, I think the most important lesson for 2023 and going into 2024 is the understanding that the housing crash, there is an absolute 100% certainty of a housing crash. No one has clairvoyance. How could someone be 100% certain of anything? That is because the housing crash already occurred. It took place in spring of 2020. It was a housing supply crash. That's what's helped hedge us against a price crash despite the highest mortgage rates that we've seen in about 40 years. You've seen one-to-four unit prices stay resilient because we still have demand and we have this dearth of supply and it's a pretty inelastic condition. We just cannot pull ourselves out of it. 

Tom Wheelwright: 

Why is that? So we've seen, so over the last… Let's explore this for a second. Over the last several years, so we had a huge need for supply in the multifamily, and then we saw bonus depreciation come in 2017. And we just saw, I mean, everywhere I look in Phoenix, Arizona, there's a multifamily apartment housing project going up. I mean, literally like every other corner, that's what's going up. And so a lot of that's been built. And so I know they're still building, there's still demand. What's happened in the small unit where the supply has an increased like it has in the large multiunit? 

Keith Weinhold: 

That's continued to drive demand. And yet Tom, I was recently in the… 

Tom Wheelwright: 

I'm sorry, I want to bring you back to this. Why? So in the multifamily units, we've seen the supply come up. So we're close to having enough supply. You're saying we haven't seen that in the single family and the plex market. Why haven't we seen more construction in the single-family and plex market? Is it because all the money's been going into the multifamily? Is that what's going on? Or what caused that? 

Keith Weinhold: 

You've had an increase of institutional money in the single-family home space, but not as much as you have in the multifamily space. 

Tom Wheelwright: 

Got it. 

Keith Weinhold: 

Brought in new investors with those economies of scale that multifamily projects demand. I saw cranes in the air, a lot of them in Denver, Chicago, and a few in Boston recently. Most of those building multifamily projects. There just aren't enough single-family projects. And the demand…. So we're talking about the supply. The demand has stayed high for a few reasons. The population growth in the United States is only about one-half of 1%. It's really down, but the family size is smaller. It's about the way that people choose to live. And the other thing that's really driving demand for single-family homes, and they have a difficult time creating enough supply, is Millennials are the largest cohort in American history. More than 80 million, bigger than the baby boomers. They're ages 27 to 43. These are prime household formation years. When people form a household, they want to form a single-family household more so than an apartment place. So they're coming of age, their prime home buying age, and there are more of those people than ever outpacing the supply. 

Tom Wheelwright: 

And I would presume that the high interest rates has actually helped the investors market because it's put the buying of a home out of reach so that more people are renting. Is that fair? 

Keith Weinhold: 

Gosh, that is such a great point. There is such an affordability constraint with higher mortgage rates and higher home prices. Yes, it's been most difficult on that first-time home buyer that really wants to buy. The 200 to 250k starter home has pretty much disappeared. So that poor affordability, what does that do? That drives more people into the renter pool. So you're so correct, Tom, driving demand for rents. 

Tom Wheelwright: 

Now, the biggest issue of course is, but what about buying rental properties in the first place? Because now you have… For those who are now getting into the investor, for our new investors, people who want to start investing, which is really your sweet spot, now they've got these high interest rates and high home prices. So what are people doing about that or what did you see? Are the rents enough to overcome those high interest rates? 

Keith Weinhold: 

No, rents have moved up, but really most of the national rent appreciation was a few years ago in 2021 and 2022. Since then, price growth has outpaced rent growth. So that is a problem for new investors. So I think you're asking where do you get in? Where's the opportunity today, 2023, moving into 2024? Where's the opportunity for an investor? 

Previously, oftentimes it was existing single-family rental homes. That's tilted, that's changed. Really the opportunity is with brand new construction, one-to-four unit property, because what a lot of these home builders are doing is they're offering these really generous incentives to investors and what's known as the BTR or B2R space, the build-to-rent space. 

A common scenario Tom, starting about a year ago, is that a builder of new construction build-to-rent homes will offer the investor a 2% rate buy down. They'll buy down your mortgage rate by 2%, or some of them even more, and offer one year of free property management. So these builders, they need to keep turning over the inventory. They need to stay in business. So that's what they're offering to investors. So my point is, if you can do it, because typically you have to pay more, I would go for a build to rent, a new construction investment property more so than an existing property. 

Tom Wheelwright: 

Let me ask you a question. So it's probably been a year or two ago where there was these articles about Elon Musk living in a $50,000 tilt-up basically home, right? The small little home. And are you seeing construction costs because that was… When you're looking at things like 3D printing of a home and other things, are you seeing construction costs coming down for smaller single-family homes or plexes? 

Keith Weinhold: 

No, we're really not. And I'm so glad that you brought this up, Tom. Some people think Boxabl. There's a company where you can buy a very inexpensive home, or sometimes you see headlines that, “Hey, at Home Depot, you can now buy a kit for a $40,000 home.” But what a lot of people aren't considering or don't realize, and some of this is true with 3D-printed homes as well, is you still have the cost of the land. You still have some labor costs to go ahead and build these properties. And then oftentimes these properties don't come with their penetrations and they're not plumbed and so on. And by the time you add all that up, you're really not saving much of any money. 

3D-printed homes still have the difficult… It's still very difficult to print a second story of a 3D- printed home. Something that might change in the future, but we're not on the precipice of that changing. So you still have a lot of these ongoing fixed costs, especially with land and labor and utilities, that a lot of people just don't think about when they see the headline of the $40,000 home kit that you could buy from Home Depot. 

Tom Wheelwright: 

That's interesting. So of course one of the most important things to be thinking about is the cap rate. So when people buy a home for themselves, they're not thinking about cap rate, they're just thinking about what's my payment? That's pretty much what they're thinking about. But when you think about as an investor, you always have to look at cap rate, which for those who are listening who don't know is simply your net operating income. So your income before your mortgage and divided by the price, right? That's your cap rate. And one of the challenges in 2023 in real estate has been where cap rates are actually lower than interest rates. Is that still the case? And do you see that changing in 2024? 

Keith Weinhold: 

It's going to be hard to change that quickly in 2024 because the value of five-plus unit apartment buildings is predicated on their profitability and their cap rate. That's why we've seen a 25% decrease in the value of multifamily properties. So cap rates are going to stay about where they are in 2024 because we don't see much chance for substantial rent appreciation due to inflation. A lot of tenants are tapped out. However, though in that difference, that spread between the cap rate and the interest rate, most everyone expects that interest rates are going to go lower in 2024. I think interest rates are notoriously difficult to predict. So I'm not about to make a prediction. 

Tom Wheelwright: 

Hey, I'm still going to ask. I'm still going to ask. All right, so get out your crystal ball right now. People are listening. This is being recorded. Everybody's going to hear this forever and ever. This is your shot, Keith. Predict interest rates this time next year, December of 2024. What do you think interest rates will be? So they're currently right around, what? What are you seeing mortgage rates at right now? 

Keith Weinhold: 

7. 7. They're almost exactly 7 right now. And this is a 30-year fixed owner-occupied rate.

Tom Wheelwright: 

Okay, 7% owner occupied. What are they for a rental unit property? 

Keith Weinhold: 

Three-quarters of a percent to 1% higher. 

Tom Wheelwright: 

Okay. So let's say they're 8%, all right? So I can do this math. So we're at 8% today. End of 2024, what do you expect the interest rates to be? 

Keith Weinhold: 

I think they're only going to be about 1% lower than they are today. So that's about 6% for the owner-occupied rate. I don't have great confidence in that. I can predict prices better than I can interest rates. Interest rates have to do with the bond market and a whole bunch of different factors in the world. But that's what I can tell you. But here's one thing that I can help you the investor think about, and that is the fact that if you think that we're headed for a recession, an economic recession, that has a strong correlation with a lowering of interest rates of all types. It's especially in the mid and late stages of a recession that you see a lowering of all kinds of rates including mortgage rates. And why is that? Well, that's because the powers that be, the Fed, they recognize the economy needs help, so we're going to ease rates. So if you think we're headed for a recession, lower rates come. 

Tom Wheelwright: 

And a recession basically is deflation, right? So it's the opposite of inflation, it's deflation. That's where a recession comes in. So here's a question for you, Keith. All right, so are you predicting recession? 

Keith Weinhold: 

I don't know. That's really difficult to say because people have been talking about this recession that's forever, just around the corner for more than a year and a half. Tom, you already got me going out there further than I wanted to go with predicting mortgage rates. 

Tom Wheelwright: 

Be bold. Come on, be bold, Keith. 

Keith Weinhold: 

Well, Tom… 

Tom Wheelwright: 

What do you think? 

Keith Weinhold: 

Here's what I say. When I want to predict the future, what's going to happen, I often look at history over hunches. So we have the history of the inverted yield curve and the higher mortgage rates. So I will say it is more likely than not that in the next 12 months we'll have an economic recession based on history over hunches. So there you go. 

Tom Wheelwright: 

I love it. You know what? That's great, Keith. Thanks for being bold out there. So you heard it here, Keith Weinhold is predicting a rescission or at least a downturn, right? We won't use technical term rescission, but downturn in 2024. And what you're talking about here, the inverted yield curve to make sure everybody understands it, normally a long-term rate's going to be higher than a short-term rate because you're taking more risk in a long-term rate when you're talking about investing in a bond. But inverted yield curve, long-term rates are shorter, are lower than the short-term rate. So the short-term rate is higher. So what happens is is that that means that people think that it's going to come down the road, and so they actually think so the short-term rate ends up being higher. Did I get that right? 

Keith Weinhold: 

Yes, you did. So that condition's been inverted. It has not been normal. And oftentimes that's the precursor to a recession, which still hasn't come. 

Tom Wheelwright: 

Exactly. So historically what happens is when that curve changes, and if you want to go on, there's plenty of websites you can go to to see and just type in, just Google inverted yield curve. And what you'll see is is that historically, way more often than not, I would say 80 to 90% of the time, after the yield curve goes back to normal, that's when we start seeing the recession because that's an indication that guess what? Things are coming down again. 

Keith Weinhold: 

And the American economy has been really resilient. It has surprised so many people. In fact, Bloomberg predicted a 100% chance of recession in 2023. 100%. A lot of people have been fooled. 

Tom Wheelwright: 

And yet no recession in 2023. 

Keith Weinhold: 

Not technically. Yep. 

Tom Wheelwright: 

So given that that's so difficult to predict, what are you telling your investors as far as how to deal with this? Because home prices have kind of leveled off, but have they come down a lot, home prices and fourplex prices? 

Keith Weinhold: 

No, they really haven't. Over the past year, we've had 2 to 3% appreciation. Pretty modest, lagging behind historic appreciation rates by a little while. Most expect inflation to stay somewhat elevated into 2024. And real estate is more than just a hedge against inflation. Income property with a loan, that's actually a vehicle where you can profit from inflation. 

So we talk about history over hunches. The history is long-run inflation. And it's funny, Tom, sometimes don't you wish the powers that be told you where the target was or what they're trying to do? People are always trying to figure out the YouTube algorithm or the Facebook algorithm or something. Well, the Fed tells us that they're targeting 2% inflation. When you look at how the CPI is calculated, you can easily make the argument that it's higher than 2%. They're telling us where it's going so we know what's coming. 

And real estate investors actually benefit from inflation three ways at the same time because you're hedging yourself with the price of the asset on its own and then you benefit from the debt debasement secondly when you take out a loan. When you take out a loan, the bank doesn't ask to be repaid in inflation-adjusted dollars and the tenant's paying that interest for you. The bank only has to be repaid in nominal dollars. Nominal meaning in name only. 

Tom Wheelwright: 

So one of the things you're saying is, well, from a cash flow standpoint, let's ignore price for right now. But from a cash flow standpoint, because price is a little different in a fourplex than it is in a single-family home because a single-family home, you have home owners, people who are going to live in that home that are buying those, it's not just a rental property, you're not just looking at it from an investment standpoint. So if you do that and you're looking at cash flow, are you seeing rents going up in the rental market? 

Keith Weinhold: 

Rents have really flattened out. They were up as much as 15% year-over-year back in 2021 and 2022, but they've really flattened out. And for a real estate investor, I don't think it's smart to buy a property at negative cash flow hoping it's going to cash flow tomorrow because hope's not a strategy. That's something we want to back off from. 

Tom Wheelwright: 

Great. Okay, so let me ask you the question. So I've got to ask you the question, Keith. Okay, so if I've got my interest rate around 8%, cap rates haven't come down appreciably. So cap rates right now, presumably they are less than 8%. Is that fair? 

Keith Weinhold: 

Yes. 

Tom Wheelwright: 

Okay. So that means that we're upside down. So we talk about inversions. We're actually in an inverted cap rate situation where our cap rate is lower than our interest rate. So actually borrowing money to buy the property actually costs us more than we'll get. So it's a pretty rough strategy. Like you say, you don't want to bet that that's going to go up so that then your cap rate basically takes care of itself. So what are you telling people right now for the next 12 months? What are you telling your investors if you've got an 8% interest rate that maybe could come down as low as 7% and cap rates are staying low, how do people find an investment that's worth investing in? 

Keith Weinhold: 

Well, again, it's don't pay that rate. Get the builder to buy it down for you. 

Tom Wheelwright: 

There you go. 

Keith Weinhold: 

[inaudible 00:22:19] construction home builders, they're buying it down. But Tom, since you brought up rent, and I'm talking about inflation, one way that real estate investors profit from inflation that a lot of people don't understand is that say we just have 10% inflation over time, that might even take a couple years, and say then that you're able to bump up your rent 10%, just commensurate with inflation over time. That's all you're doing. If you bring up your rent 10%, your cash flow, as long as you're leveraged with a loan, could very well increase 25%. This is huge. This is the money you feel in your pocket every month. 

And why would that happen? Why if inflation and rent are both 10%, why could your cash flow increase something like 20 or 25%? That's because your principal and interest payments stay fixed over time. That's something that inflation cannot touch. Now, inflation are pushing up your other operating expenses. They're also pushing up that total rent amount. So that's a cash flow enhancement benefit from inflation on your rents that real estate investors benefit from over time. 

Tom Wheelwright: 

And that is actually assuming though that your rents are going up. 

Keith Weinhold: 

Yes, your rents must increase, which they just tend to do only at about the rate of inflation. But that's really where you feel the arbitrage since your principal and interest payment stays fixed. So I still recommend getting a loan. 

Tom Wheelwright: 

So this is a really good point is that if you can get a loan at least equal to your cap rate… I'm still challenged with loans that are… If you're paying more than your cap rate, that's like you're talking about hope as a strategy. But let's say that you can at least get it the same so that you can leverage that and you're getting the benefit of inflation, basically inflation devalues the debt, right? So you are getting that. So that's absolutely a benefit there because any principal that your tenants are paying, basically they're paying it at the original rate, not the inflated rate. Okay. So you see rents continuing to follow inflation, is that what you're saying? 

Keith Weinhold: 

Over the long term, I expect them to continue to follow inflation. And Tom, we've kind of poked around it now. Let me explain, if I could, something here at Get Rich Education that we call how real estate investors win the inflation triple crown. Real estate investors benefit from inflation. They don't just hedge, they actually profit from inflation because they have three different sources for this. The first one is cash flow enhancement. We already discussed that and how your cash flow outpaces inflation. The second one is just with that simple asset price appreciation. If you buy a million dollar fourplex, we've got 10% inflation, your fourplex goes to 1.1 million. You're kind of like, “Well wait, how am I any better off? I've got 10% more dollars, but each one's worth 10% less. Aren't I right back where I started?” Not if you have a loan because if you put a 200k down payment on that fourplex, that goes to 300k in equity with 10% inflation. So that's an asset price appreciation benefit that you get. 

The second leg of the inflation triple crown, and you touched on it Tom, it's called debt debasement. If you've got an 800k loan on this property with 10% inflation, you really only owe back 720k to the bank after 10% inflation because the bank doesn't… 

Tom Wheelwright: 

$12. 

Keith Weinhold: 

… ask to be repaid for inflation-adjusted dollars. Wages are higher, salaries are higher, and what else is probably higher? Rents. And that third one then is that cash flow enhancement benefit. That's the inflation triple crown. Three ways at the same time, it's how you benefit as a real estate investor when you get a loan on an income property. That's how to move actionably. 

Tom Wheelwright: 

And of course, I have to add one more, which is the tax benefit because if you look at it, first of all, that increase in value is not taxable unless you sell the property. So if you do a refinance, let's say your interest rate goes down, your value goes up, you refinance, that refinance is not subject to tax. Second of all, you're still getting huge bonus depreciation. And there's even some talk in Congress that bonus depreciation will go back up to 100%. There's a bill that they are working on in Congress for everyone. I didn't know if you knew this Keith, but I'm going to… 

Keith Weinhold: 

I did not. 

Tom Wheelwright: 

… [inaudible 00:26:46] the whole world here. There is a bill in Congress right now that they're looking at to go along with the research and development deduction because that's been a big bugaboo frankly for the US technology space and the offset for the Democrats, because that's a Republican initiative, the Democrat initiative is the Child Tax Credit. And there is something going on in there. So they're talking about this, and if that's the case, we might even get bonus depreciation going to 100% retroactive to 2023. 

Well, if you think about that, let's say on that million dollar fourplex, let's say you get a $200,000 deduction because of bonus depreciation, and if you're in a 40% tax rate, that's $80,000. Well, again, if you use leverage, now you can buy another $400,000 home with that $80,000 because you can put another 20% down. Now you're not buying a million dollars of home, but now you're buying 1,000,004 of property and that 1,000,0004 is going up with inflation. 

So that's where I see taxes in your market being so important because if I got price inflation, which we've seen huge price inflation in the single-family home market in particular over the last few years, if we continue to see that price inflation, then we get all of the inflation, the bank doesn't get it and the government doesn't get it. And so if you look at that, now you've got 1,000,004 and of that 1,000,004, if that's going up 10%, that 1,000,004 goes up $140,000, not $100,000 and you get the extra 40 as well as the 100. So just I want to add the fourth leg here, Keith, because I couldn't resist. 

Keith Weinhold: 

A reset to bonus depreciation. That would be some icing on the cake, 

Tom Wheelwright: 

Wouldn't it? And even without it, it's still at 60% bonus depreciation next year. So we still have huge bonus depreciation, 80% still this year. For those of you who are looking at closing on a property with cash before the end of the year, you can then refinance it in January or whenever you can, close on the property with cash, refinance it. The refinance is not subject to tax, and you get the bonus depreciation this year as long as it is held out for rent by December 31st. So huge tax benefits as you know that go along with the other three inflation hedges that you're talking about. So I see tax as a fourth inflation hedge. 

Keith Weinhold: 

Sure. I mean, we've got the depreciation benefit, but a 1031 tax-deferred exchange, over time that's probably the more powerful lever because a lot, like you touched on there, Tom, you can just continue to re-lever those dollars. And if you do it right, you should never be paying capital gains tax on your real estate your entire career. Now, you do kind of get your money trapped in this real estate game in a sense… 

Tom Wheelwright: 

You do. 

Keith Weinhold: 

… but once you know how to invest… 

Tom Wheelwright: 

You have to keep investing. 

Keith Weinhold: 

… you got to ask yourself, where would I rather have it? 

Tom Wheelwright: 

And that's a really good point. I'm really glad to hear that you're right, that builders have an incentive to keep building, right? If they don't keep building, they are struggling. And of course, we ran into that. We saw this in 2009, '10 and '11, where a lot of home builders stopped building and they pretty much cut their staff down to just a skeleton crew because they weren't buying properties, they weren't building properties because nobody was able to finance those properties. And to see that builders are actually paying attention this time and instead of doing that, they're actually instead taking a haircut on the interest rates. I think that's terrific. 

Keith Weinhold: 

Good point. Because after 2008, one consequence of the big slowdown, the mortgage meltdown, the great recession, you touched on it, Tom, is people stopped building. So people that were laborers and carpenters, they just totally left the industry. And we now have difficulty finding enough people to train to build more supply. To my point earlier about the housing crashes, the housing supply crash, this is one reason why supply in the one-to-four unit space hasn't become buoyant again. We just can't train that labor pool. They're not there. 

Tom Wheelwright: 

That's interesting. Okay, so before we get to final words, where can we find out more about you and Get Rich Education? 

Keith Weinhold: 

Oh, well, thanks. You can listen to me every Monday on the Get Rich Education podcast. People's money either starts out in real estate or ends up in real estate. We tell you why and how. And if I can Tom, real estate pays five ways at the same time, just regular buy-and- hold property. I made a course, a free course at getricheducation.com/course. Five videos where I describe each of the five ways and we add up your total rate of return from all five ways. I really recommend watching that. Now you know what to optimize. Now you know what to avoid. It's not the kind of course where I'm trying to upsell you to some paid course. You can get that Real Estate Pays Five Ways at getricheducation.com/course. 

Tom Wheelwright: 

That's awesome. Thank you for making that offer. I think that's terrific. We do need to learn what are the ins and outs of real estate. Keith, it's been great having you on the show. Any final thoughts or predictions for 2024? 

Keith Weinhold: 

Inflation is just going to continue to be an economic malady for those people that don't own assets. You do want to own real assets that don't just hedge you against the inflation, but you actually profit from it three ways at the same time like I described. That is almost completely predictable. So align your interests with what's predictable. 

Tom Wheelwright: 

Awesome. Thank you very much. Just remember when we do recognize that we can take advantage of inflation. Most of the time all we're hearing is the doom and gloom about inflation. But what about the positive aspects of inflation? When we're investors, the inflation helps us. Not only do we make way more money, but we pay way less tax. Thanks, everyone. We'll see you next time. 

Speaker 1: 

You've been listening to The WealthAbility Show with Tom Wheelwright. Way more money, way less taxes. To learn more, go to wealthability.com.