Episode 25: Why Inflation Is a Real Estate Investor’s Best Friend

Listen Now!

Join us in this eye-opening episode as we explore the untapped potential of inflation in building wealth and combating debt. Uncover the hidden benefits of inflation and how it can magically shrink your debt burden over time. We’ll delve into the concept of “good debt” tied to assets like real estate and reveal real-life examples of how inflation can boost your earning power. However, we’ll also shed light on the risks and caveats to consider when dealing with inflation. Tune in to master the inflation game and learn how to use it wisely to your advantage while keeping a watchful eye on your financial battlefield.

What you’ll learn:

  • The hidden benefits of inflation: Discover how inflation can work in your favour by reducing the real value of debt and easing the burden of repayment over time.
  • Differentiating between “bad debt” and “good debt”: Understand how inflation can accelerate wealth growth when tied to assets, such as real estate, and learn how to leverage this concept effectively.
  • Real-life examples of inflation’s impact: Explore specific scenarios, like a rental property mortgage, to see how inflation gradually deflates debt and increases earning potential through rental income.
  • Navigating the risks and caveats: Learn about potential pitfalls, such as variable interest rates or high inflation rates, and gain insights on managing debt and protecting your net worth.
  • Mastering the inflation game: Acquire practical strategies to make inflation work for you, while also maintaining a cautious approach to avoid the detrimental effects of hyperinflation. Gain a deeper understanding of the financial battlefield and how to use inflation to your advantage.

Resources:

 

Interested in Partnership Opportunities?

For those interested in potential Joint Venture (JV) Partnerships, reach out to us here.

Watch Now!

00;00;00;17 - 00;00;21;03

Kyle Pearce

Typically your income doesn't rise at the same rate of inflation. It takes time for that to catch up. So you feel like you're falling further and further behind. Now, on the other hand, if you have an asset, an asset like real estate, it doesn't have to only be real estate, but an asset like real estate that actually is a hedge against inflation.

00;00;21;03 - 00;01;06;13

Kyle Pearce

Because keep in mind, when the price of goods and services go up, typically the price of things like real estate also go up. So right away you're kind of hedging that against there. So your house, if you have a primary residence even, you'll probably notice that you bought your house. If it was within the last 18 months. Maybe not so much yet, but let's say it was in the last three, four, five plus years, you probably could sell your home for a lot more today than you could, or then you bought it for it.

00;01;07;08 - 00;01;11;24

Jon Orr

Welcome to the Investing Teacher podcast with Kyle Pierce, Matt, Biggley and me.

00;01;12;00 - 00;01;23;10

Kyle Pearce

John or get ready to be taught as we share our successes and our failures encountered during our real life lessons. Learning how to build generational wealth from the ground up.

00;01;23;13 - 00;01;27;27

Matt Biggley

Welcome investment students to another episode, The Investing Teacher Podcast.

00;01;29;05 - 00;01;55;01

Kyle Pearce

Well, my friends, we are going to be digging in here and this is a topic that we couldn't resist talking about because it seems like nonstop people are talking about this thing called inflation right now. Right? We are dealing with really high inflation rates. Things were and we're scared. Yes. The Fed for a number of years during COVID was calling it transitory, was the word transitory.

00;01;55;01 - 00;02;25;29

Kyle Pearce

Inflation. It was just here during COVID, it would just go away. And then as we were coming out of that pandemic, Mr. Jerome Powell, the chairman of the Fed, had said it's actually a little stickier. I love the word say it's sticky inflation. It is sticking around. Now, here's something really interesting, too, before we dig in. First of all, I just want to be clear that this idea of inflation, a lot of people think of inflation as being directly the same as high prices.

00;02;25;29 - 00;02;50;10

Kyle Pearce

But the crazy part is it's actually a rate of change. It's saying that percentage, it actually is compounding, meaning it's going up by that amount every single month or year or whatever the timeline is that they're looking at this. So inflation is really scary because when it gets really high, obviously the cost of goods gets higher and the crazy part is even if inflation drops to zero, the prices are still up here, right?

00;02;50;10 - 00;03;09;23

Kyle Pearce

So it's not going to reverse the prices unless inflation actually be negative. Inflation deflationary, Right. A deflationary environment is when that happens. Not good things go on. When that happens in the economy. We just want to have what they call a healthy inflation rate. So I don't know about you guys. I'm excited. Can you hear it in my voice?

00;03;09;23 - 00;03;10;25

Kyle Pearce

I don't know about you guys.

00;03;10;25 - 00;03;29;06

Jon Orr

So you get excited about these types of things. And I think we're excited as well. And I think the other part why someone might have clicked to listen to this episode is that we get scared of inflation, right? People are like, Oh my gosh, prices are rising to combat inflation, interest rates are rising. And that has caused us taking a back seat or kind of reserved.

00;03;29;06 - 00;03;53;14

Jon Orr

People start to kind of get a little bit nervous around this type of environment because, you know, past history, we're like, is inflation going to go higher? Are we going to repeat the seventies in the eighties, our interest rates going to get that high again? We get a little bit nervous. And I think guys in this episode, we want to kind of shed a different view on how inflation can actually help your mindset in a way.

00;03;53;14 - 00;04;10;07

Jon Orr

And I think that can be helpful in this situation. So we're going to share some ideas about why it might benefit you or how you could benefit from the inflation or think about it or helped it to kind of design your moves forward. So we're going to kind of dive in there and maybe shed some light on some ideas around inflation.

00;04;10;10 - 00;04;30;00

Matt Biggley

Let's take on this topic because it's so contrarian. We've all got sort of anecdotal and it dominates whether you're at the barber shop or in the grocery store headlines. Everyone has got anecdotes about inflation. Listen, I was at the grocery store last night and literally thought, Oh my God, I can't believe how much exercise that spinach cost or whatever it was I was buying.

00;04;30;00 - 00;04;47;11

Matt Biggley

And it's like, God, this really speaks to inflation. It is real estate investors. And as a realtor, of course, watching inflation incredibly closely because it's so tied to interest rates and inflation kind of feels I mean, it's such a blunt instrument when we look at interest rates and what the government does with that in terms of trying to tame this inflation.

00;04;47;11 - 00;05;07;12

Matt Biggley

And when we look back to why real estate went crazy during the pandemic, it was really the government driving that with those rock bottom low interest rates. And here we see them now trying to find a balance, but reversing that. So we had those eight interest rate hikes last year, which really, really impact consumer confidence, led to a lot of fear in the markets.

00;05;07;19 - 00;05;24;04

Matt Biggley

And, of course, you know, I was reading in the news this morning, they were talking about discretionary spending. And when we look at the retail numbers, that's going down, down, down. So I love that you've kind of flipped this topic on its head of inflation and found a sort of a silver lining as far as real estate investors go.

00;05;24;04 - 00;05;29;10

Matt Biggley

And so I'm excited to dive into that and just give people a new perspective on inflation as it relates to investing.

00;05;29;16 - 00;05;49;08

Kyle Pearce

Yeah, And for me, the one thing is, of course, it definitely is scary. I think you hit on that emotional side. It for sure is scary. And one of I think the parts that is scariest about it and why so many out there are scared of it and should be scared of it is because some people actually would say that inflation actually is stealing from the poor.

00;05;49;11 - 00;06;19;28

Kyle Pearce

If you have no assets that are actually a hedge against inflation, you are just say, earning an income and that money is just going out the door. Well, guess what? Typically your income doesn't rise at the same rate of inflation. It takes time for that to catch up. So you feel like you're falling further and further behind. Now, on the other hand, if you have an asset, an asset like real estate, it doesn't have to only be real estate, but an asset like real estate that actually is a hedge against inflation.

00;06;19;28 - 00;06;51;17

Kyle Pearce

Because keep in mind, when the price of goods and services go up, typically the price of things like real estate also go up. So right away you're kind of hedging that against there. So your house, if you have a primary residence even, you'll probably notice that you bought your house if it was within the last 18 months, maybe not so much yet, but let's say it was in the last three, four, five plus years, you probably could sell your home for a lot more today than you could or than you bought it for now.

00;06;51;17 - 00;07;14;08

Kyle Pearce

The crazy part is a lot of people look at that and they say, well, that my house rose in value. And yes, on paper that's true. But a lot of what has to do with that is supply and demand. Of course, but also inflation. Right. As those costs of goods and services and assets go up in price, the value goes up in price.

00;07;14;08 - 00;07;32;07

Kyle Pearce

So that is one piece where today we're going to talk about maybe some of the hidden silver linings, but just having assets like real estate is putting you in a much better position to be able to survive through any sort of inflationary sort of environment like we're dealing with here.

00;07;32;14 - 00;07;54;06

Jon Orr

Yeah. So think about like I'm imagining sitting at the dinner table or around in the backyard. Why is it close to summer and you're with your family and you're talking about real estate investing and sometimes folks will bring it up with you of like why you might want to do this, or maybe you just want to help a family member kind of get involved and they bring up some negative aspects of it.

00;07;54;06 - 00;08;13;26

Jon Orr

But also what you get to say as a positive aspect of this is just think about where are you putting your money? Are you putting it in our savings account? Because if you're putting it in your savings account, then this is this eroding between the middle class and the low class and people who own assets? What Kyle, you're just saying is it's sitting in the savings account and we are in a high inflation environment.

00;08;14;06 - 00;08;26;04

Jon Orr

That savings account money, it doesn't change in value. It's stuck there, right? It's sitting there going, Hey, I've got this. But this time let's say I have $5,000 in my savings account. A year from now, it's still $5,000.

00;08;26;10 - 00;08;29;25

Kyle Pearce

Or $5,005. Yeah. You got a little bit of the to get.

00;08;29;25 - 00;09;01;26

Jon Orr

That having an account. Right. So it's gone up in value or all the prices have gone up in value, but this thing didn't rise as quickly. And so it's this dynamic that you're right, Kyle, that it separates the folks who are not investing in assets versus the folks who are investing in assets and bringing up the whole idea of if you are wanting to build your wealth, what asset classes are you choosing to be invested in so that you can be in that part of that top part where you're building your wealth regardless whether inflation is causing the eroding of our savings.

00;09;01;26 - 00;09;02;16

Jon Orr

For some folks.

00;09;03;00 - 00;09;33;19

Matt Biggley

I think that obviously it's concerning if we're seeing inflation act as a amplifier for divisions between wealth distribution, that's obviously a challenge. I was looking at something today that a fellow realtor posted about rents doubling over the last seven years. Those things are certainly concerning and we continue to have a massive supply shortage, affordable or not, of housing in general, while we're welcoming evermore immigrants into the country and putting even more pressure on that supply chain, all the more reason, I suppose, to own real estate.

00;09;33;19 - 00;09;53;06

Matt Biggley

So I get that that's a concern for sure. But I think as an investor, what I think is so fascinating is that this really changes your mindset. I love as real estate investors, you can never stay stuck for long. So here we can start a conversation about complaining about inflation and maybe some of the negative impacts on our discretionary spending or some of those things.

00;09;53;06 - 00;10;11;10

Matt Biggley

But by seeing it in a different way, it's really about action. So you can't ever get stuck. So I really appreciate that how approaching it from that mindset means that you're looking for the creative ways to use inflation as an investor and as a way to actually enhance what you have rather than just being stuck complaining about how things are.

00;10;11;10 - 00;10;25;18

Matt Biggley

So I really appreciate the mindset aspect of this and how you guys are helping to unpack some of the technicals around inflation. I want to point out just how cool that is that you can't get stuck as a real estate investor. You've always got to be moving forward and finding ways to do that.

00;10;26;00 - 00;10;55;10

Kyle Pearce

Absolutely. And I want to dig more into that. I want to roll all the way back to what John had mentioned about the savings account idea. When we think about it, we talked about you said something specific that popped into my mind here, John, as you sat and had a mini epiphany, you were like, What separates the difference between, say, people in lower income or lower class or essentially folks who we would call more in that lower middle income class to people who are considered to be in the higher income earners or more wealthy.

00;10;55;16 - 00;11;17;07

Kyle Pearce

Is this idea of investing in the crazy part is, is that everyone's investing in something. They have some value. So when you work and you earn money, if you leave it as cash, that is what you're investing in. You're saying, I believe this paper is going to be worth more down the road than anything else on this planet.

00;11;17;08 - 00;11;38;11

Kyle Pearce

That's what you're saying by inaction. Right. And I know a lot of it is ignorance. And we've been trained that cash is the method of being able to buy and sell and so forth. Of course, it's the most liquid approach to go right. So some people don't have the ability to go, you know what? I don't have enough income or enough cash sitting there for me to invest in something.

00;11;38;18 - 00;12;04;22

Kyle Pearce

So that's of course a problem. But ultimately, when I put any sum of money in, say, a savings account for longer than months or years, what I'm saying is that I believe that this thing is going to either hold its value or increase in value more than maybe something else. And the crazy reality of it is that actually cash is not an asset because it is by nature inflationary.

00;12;05;05 - 00;12;27;09

Kyle Pearce

And what I mean by that is that every single year a dollar in your currency, whether it's U.S. currency or Canadian currency or many of the other currencies, fiat currencies in the world are actually designed to have inflation built in here. The U.S. Fed wants a 2% interest rate rate or inflation rate. Now it's much higher than that every single year.

00;12;27;09 - 00;12;47;21

Kyle Pearce

That value of that dollar is actually eroding. So the longer we have it sit in that account, not only are you not earning money on it, but now it can buy less. And that is a huge challenge. Now I want to talk about the silver lining for our real estate investors in particular. The same is true for other investments that you might make on leverage.

00;12;48;01 - 00;13;11;05

Kyle Pearce

However, be cautious there. Most would say that a typical strategy is to leverage real estate, whereas leveraging, say, a stock portfolio is typically not something you hear people doing. You can do it, but it's much more risky. It's much more scary. With real estate, this is common practice. So imagine this not only are you buying that asset, right?

00;13;11;05 - 00;13;38;20

Kyle Pearce

So I'm going to use an example of a $500,000 home. And let's say we buy that $500,000 home and we put 20% down. That's 100,000. That means I have a $400,000 mortgage. And over time, inflation takes over. Supply and demand also factors in right. Matt was just articulating we have a housing shortage here in Canada. We also have it in the U.S. and in many other parts of the world.

00;13;39;01 - 00;14;08;26

Kyle Pearce

We are looking at that value. The cost to buy that same property is over time, historically going to go up because of those two factors, supply and demand, but also inflation. So while the price point on that home is going up, your debt is either staying the same if you have an interest only mortgage. Most people, though, have an amortized mortgage where over time you're paying that mortgage down or the renter is paying that mortgage down.

00;14;09;13 - 00;14;33;25

Kyle Pearce

You picture this, that value, that home asset, although most people are going, well, of course I bought real estate because I want it to go up in value. But think about the fact that everything else is going up in value, too. Milk's going up in value, right? So is dance lessons, right? So is everything around us is going up in value, Meaning it costs me more of those dollars that we tucked into that savings account in order to buy all those things.

00;14;34;09 - 00;14;57;18

Kyle Pearce

And it also costs me more to maybe buy that same property five years, ten years from now. But what's happening to the debt? And that's the beauty, is that in ten years from now, the debt on that same property is going to be much higher if you were to have a 20% down payment, but yet you are sitting there with a much smaller debt on that property.

00;14;57;18 - 00;15;17;18

Kyle Pearce

And over time, if inflation's working the way it typically does, eventually your salary, your income will over time go up as well. I'm going to guess that a teacher today is making a whole lot more than a teacher 20 years ago. Why is that? It's not because they're working harder. It's because of the cost of living or inflation.

00;15;17;26 - 00;15;33;27

Kyle Pearce

So as we look at this, it's like, wait a second, not only are we benefiting on the asset price going up, but also that debt becomes less scary over time. Not in a year. You're not going to a year later go like that's not scary anymore. But ten years from now, when you.

00;15;33;27 - 00;15;35;03

Jon Orr

Look at that debt, you're like, That's.

00;15;35;03 - 00;15;36;14

Kyle Pearce

Nothing. I can handle.

00;15;36;14 - 00;15;58;16

Jon Orr

That. Exactly. Think of a thought experiment. Imagine you did have your interest only loan where you paid the interest every year and you did not pay down the principal on that mortgage. And the thought experiment that popped into my head is when you talk to your parents when they were young kids, you would say like, I remember always for some reason being fixated on the price of going to the movies.

00;15;58;23 - 00;16;00;09

Jon Orr

My dad would always bring it up.

00;16;00;09 - 00;16;01;21

Kyle Pearce

Mine was a can of Coca Cola.

00;16;01;25 - 00;16;22;22

Jon Orr

I would take $0.25 or $0.50 and we'd be able to buy popcorn, drink, and I'd get to stay at the movies all afternoon or something like that. And when you think about that, compared to even when we were spending on movies, when we were kids, to now think about that 50 year or 40 year gap of that difference in price, imagine that you bought your house if you're in it for the long haul, which is what we are doing with our investments.

00;16;22;22 - 00;16;44;22

Jon Orr

We're not planning on to sell any of these right? We're trying to go long term, 30 years down the road. Imagine you just paid interest. Only that $400,000 mortgage is going to seem signify vacantly less cumbersome than it is the day you bought it, just because of the cost of living going up over the course of those 30 years.

00;16;44;22 - 00;17;03;03

Jon Orr

It's a very interesting thing that I think Kyle I never thought about. I never thought I was like, Oh, here's my debt. I got to pay that off over time, which we are going to be doing, and especially in a real estate investing environment, you're getting that paid down by the renter. It's another silver bullet to our existing three silver bullets for real estate investing.

00;17;03;03 - 00;17;20;09

Jon Orr

It's like, Hey, this debt is going to seem significantly less 30 years from now and it's not even going to be a big deal. Obviously, we'll probably have it paid off in 30 years because we're doing a principal amortized mortgage. But it's just an interesting thought experiment that if you didn't, it's not even going to feel the same as it does now.

00;17;20;15 - 00;17;45;16

Matt Biggley

That's a great illustration, John. And I think we've all had those conversations with our parents or grandparents, and I have the same conversations with clients all the time when we're looking at selling a home that they may have owned for decades. That's literally infinite appreciation almost for them. And then they have to go buy something. They really like it on that side when we get to sell their home, they've known for decades, but when we go to buy something, they go, Oh my God, that house costs that much money.

00;17;45;27 - 00;18;04;22

Matt Biggley

And we have to talk about the trade in lifestyle. But the meaning of money has changed so much, even in May, say, let's see, we bought our first house 12, 13 years ago. It was $170,000. And we laugh now. We say, God, we should have kept that house. But at the time our mortgage felt like a lot of money.

00;18;04;22 - 00;18;22;23

Matt Biggley

We were paying it down aggressively. And now in today's dollars, you might be looking at a house, $4 million or $1.2 million, and suddenly that doesn't sell. I mean, it's a lot of money, arguably, but it doesn't sound like a lot of money for people who've been trading in the real estate market over the past decade or so.

00;18;22;23 - 00;18;43;25

Matt Biggley

So I love your illustration of that, really. I think that really, really brings it home. And I think, you know, I made the point earlier that I saw a chart shared by an agent on social media talking about how rents have doubled over the seven years. And we have seen again anecdotally when our experience of owning these rentals we've been investing, it'll be I think Kyle and I bought our first property eight years ago this July and our rents have definitely doubled in those units.

00;18;43;25 - 00;19;01;27

Matt Biggley

Of course we've made improvements to them as well. But I see this two real estate investors I work with, if we buy a tended property, if those tenants have been in place for any longer than 12 months, they are paying less than market rents. And so we look for projected rents and we have to revisit that cash flow analysis.

00;19;01;27 - 00;19;23;05

Matt Biggley

Kyle And I went through a duplex recently where it was a very inexpensive sticker price, but the tenants repaying so little in rent, even at that inexpensive sticker price, it wasn't cash flowing. So then we had to reexamine this and say, can we afford can our buyer afford our investor afford to have negative cash flow until we get those rents up to market rent?

00;19;23;16 - 00;19;53;00

Kyle Pearce

Mm hmm. I love that. And John, you use the example of 30 years, Matt, you were talking about your first home, which is a much shorter timeline, but still dramatic. And when you have an experience like we have this high inflationary period over the past, since 2020, right, almost three years now, if you go back to 2019 to now, even then, those mortgages that we have on those properties we purchased in 18 and 19, we look at those and go, Oh man, you just wishing you had bought more.

00;19;53;00 - 00;20;15;05

Kyle Pearce

Now the one thing these are maybe some caveats and maybe some cautionary pieces everyone to think about and Matt, you just highlighted is a great segway is this idea that right now we're in an interesting time. We are in high interest rates. We don't know what's going to happen next. I have a feeling that rates are going to start pausing, at least for the next little while.

00;20;15;05 - 00;20;35;27

Kyle Pearce

You might even see some rates starting to come down over the next couple of years. Right, Because typically everything is very, very trailing data right now. Not only is the inflation numbers, those are trailing data, but then also the impacts on the economy as trailing as well. Right. So we haven't seen sort of the impact on the economy as a whole.

00;20;35;27 - 00;20;56;17

Kyle Pearce

Now, as a real estate investor, the reality is that once again, people still need a place to live. Might put you in a short term, maybe a little bit of limbo here, but that's where as long as you're going into a deal and you're not going, wow, I want to be lucky, like John and Kyle or Matt and Kyle on their deals when they pick them up three years ago and the rents are going to double in all of these things.

00;20;56;17 - 00;21;19;13

Kyle Pearce

You don't want to speculate like that. That is the gravy, right? That's the sprinkles on top of the cupcake. And we want to just make sure that in our minds we're going can we sustain this investment knowing that over the longer term that ten years that Matt just said or the 30 years even that John just said, that things are going to work out the way they have historically for real estate?

00;21;19;13 - 00;21;51;25

Kyle Pearce

And could I get there based on what's going on now? And also, could I handle if things don't maybe stay the same and they maybe get a little bit worse? In the example I'm going to use is that if you walk into an investment today, it's harder to cash flow on that property. We've talked to some potential investors who have sort of been going in saying, Well, I've been putting this amount of money into a random mutual fund, so I'm happy to put that towards, say, the principal paydown of a property.

00;21;52;08 - 00;22;16;07

Kyle Pearce

And they're going I want to make sure that I get into the market not to sell next year, not to sell in three years, but for the long term. And in those cases, we're saying then you know what, it might make sense given the market conditions, right? Interest rates are high maybe at this point. Again, just in case, make sure that you have a little bit of a buffer in case rates do go up a little bit more.

00;22;16;07 - 00;22;34;10

Kyle Pearce

But maybe a variable mortgage makes sense. And then as rates do start coming down, you can look to lock into something that is fixed. But can you get through it if things were to go the other way? So once again, we don't know what the future will hold, but what we want to do is we want to look at things.

00;22;34;10 - 00;22;59;25

Kyle Pearce

We want to look at both sides again 30 years from now, not concern. But what I am concerned about is if next year something were to happen and you couldn't get over that second year hurdle or that third year hurdle rate, sometimes there's some rough 18 to 36 month patches and sometimes investors actually get in over their head and then they have to start fires sailing, which means they're losing capital.

00;22;59;25 - 00;23;18;02

Kyle Pearce

And now they're kind of starting worse off than they were when they got in. So as long as you're doing that due diligence and you're ensuring that the decisions you're making will also work when things get harder. If they got harder, then you're doing something really well for that long term portfolio.

00;23;18;07 - 00;23;41;02

Jon Orr

Yeah, and I'm glad you brought that up. And to think about some of the things we need to think about, we want to be wise, we want to be wise against the different market conditions. We want to be wise against different factors that are playing into our decisions to get into any sort of investment. These are the things that you should consistently think about, and I'm glad you brought that up because these are the conversations that we have with our potential investors.

00;23;41;14 - 00;24;14;00

Jon Orr

These are the things that we talk about on a regular basis of when we're going to go in here, when we're going to buy this property, how we're going to generate cash flow in this property, what's our timeline here? We have these discussions every day with the folks that we partner with. And I believe because I remember partnering with you two way back in, I remember thinking that that was so important, so valuable to partner with folks who have had these thoughts and are consistently bringing them into the discussions and into the decision making factors when you get into the markets.

00;24;14;00 - 00;24;40;06

Jon Orr

And I think that is so important to have a partner to do that with. And it folks, hey, if you are looking to build your wealth, you might want to and you are looking to partner with someone who does think this way. That's why we have that branch where we partner with joint ventures and kind of bring people on and have those discussions so that we can build wealth together and we can be those was critical friends that bring up the right ideas at the right time.

00;24;40;10 - 00;24;57;21

Jon Orr

And when we go into these decision making ventures together. So if that is interesting to you, if you are thinking, Hey, I would love to have a partner head on over to our joint venture page, fill out our quick form to see if it's right for you. We would have a quick chat, see if that partnership could kind of go down to the next level.

00;24;57;22 - 00;25;07;13

Jon Orr

Go to Canadian Wealth Secrets AECOM forge such JB Invest in teacher dotcom boards. That's JB and we could chat about all of the your kind of wealth building options.

00;25;07;21 - 00;25;29;22

Matt Biggley

It's been such a thought provoking conversation today, guys, that I think my own takeaway here is to think about inflate in from a consumer versus an investor standpoint. I really love the way you framed how to think about inflation as a tool. I wouldn't say a friend, but a tool when we talk about investing in real estate and just this mindset that we can't get stuck, I think we are responsible investors.

00;25;29;22 - 00;25;57;29

Matt Biggley

We think, as John said, with a long term horizon, we are not day traders in real estate, we are not speculators. We're not out to get rich quick. And I think there's a lot of those people out there who are promoting themselves heavily. And our advice would be to beware of those people. You know, you want to look for partners and for people to learn from who's got a track record, who are responsible, who are not cowboys in this investing game, because the flip side of this can get pretty ugly.

00;25;57;29 - 00;26;15;09

Matt Biggley

And I think we're going to continue to see that more of that as people have to close on pre-construction and speculative buys that they made or refinanced properties that they were sitting in an interest rate at two or two and a half and suddenly having to deal with current interest rates. So I think we're going to see the fallout from that in the real estate market.

00;26;15;10 - 00;26;18;13

Matt Biggley

So thanks for the conversation today. Definitely appreciate this.

00;26;18;21 - 00;26;36;27

Kyle Pearce

I love it. I love it. I think you nailed it there, Matt. It isn't necessarily our friend, but it can be a tool, or at least it can help us when we understand inflation better, how we can play the game better. And it reminded me of a tweet. I had to go look it up. It was just in Welsh came across and I'll put his Twitter link in our show notes today.

00;26;37;08 - 00;27;03;14

Kyle Pearce

This tweet said, Every unsuccessful person I know believes the game is rigged. He says Every successful person knows the game is rigged and they learn how to play. And I feel like that message right there, it's cliche as hell, but your mindset is everything. And he goes on and does a little bit of a thread there, but that came across my Twitter feed and I thought to myself like, that is so bang on.

00;27;03;23 - 00;27;24;25

Kyle Pearce

And it's not because it's the cool. Kids get to play the game and know the game and are favored in the game. No, no. They figure out the game and they use it to their advantage. So I would argue that applies here with this idea of inflation. We can sit there and we can just panic and we can, you know, sort of go in analysis paralysis or we could go, how does inflation impact the economy?

00;27;24;25 - 00;27;45;27

Kyle Pearce

How does it impact me and my life and how does it impact our future? And what do I do now to try to move those pieces in such a way that I'm strategically protecting, but also potentially putting myself in a position to win a little bit later down the road. So this has been a pleasure, fellas, as is every episode that we record here.

00;27;45;27 - 00;28;09;16

Kyle Pearce

Friends, if you find some value in this work that we've been doing, this is a passion project for the three of us. Go ahead and leave us a five star rating of review on Apple Podcasts or wherever you're listening or watching this. We would so appreciate it. Think back to where you found this podcast and think of sharing it in the same way so someone like you can benefit from this experience.

00;28;09;16 - 00;28;12;06

Kyle Pearce

You don't know how much we appreciate it.

00;28;12;20 - 00;28;40;06

Jon Orr

All Exxon resources and transcripts from this episode folks can be found over at our show Notes page. Invest in Teacher Dot forward slash Episode 25 again that is Canadian Wealth Secrets dot com forward slash episode 25 And also folks, we wrote a blog post on this topic just recently and we want to share that with you. You can go over there, read a little bit more about how inflation affects your decision making around real estate investing.

00;28;40;16 - 00;28;48;19

Jon Orr

So head on over to invest in teacher dotcom forward slash inflation investing teacher, dot.com forward slash inflation.

00;28;49;06 - 00;29;18;12

Kyle Pearce

I love it, my friends. Hey, listen, my friends, we appreciate you and we hope you gain something here to at least think on maybe share or have a conversation with friends and family. And that means it's time for class. Dismissed.

00;29;18;12 - 00;29;31;11

Jon Orr

The content you heard here today is for informational purposes only, you should not construe any such information or other material as legal tax, investment, financial or other advice.

We believe that anyone can build generational wealth with the proper understanding, tools and support.

Grow Your Wealth Building Skills

Many believe that you are either a money person or you are not.

This fixed minset approach to managing money is limiting your ability to accumulate wealth and restricting your financial freedom. Break free from this deficit thinking habit and begin your journey to grow your wealth with us.

REAL ESTATE INVESTING

Learn why investing in real estate is where we began our wealth building journey and why we believe it is the best place to start.

infinite banking

Learn about us and why we began a journey to better manage our money, how to invest and begin to build wealth for our families.

STOCK MARKET INVESTING

Overcome your fear of the stock market by learning about the  markets, implementing proven strategies, and minimizing risk.

CHANGE YOUR FINANCIAL FUTURE

Canadian Wealth Secrets - Real Estate - Why Real Estate