Inflation Is Coming, Do This Now! / Garrett Gunderson

we continue to confuse the money game money is a representation of value once again and if we start to add it without people creating value it devalues the existing dollars and unfortunately within three to five years it all ends up in the same hands anyway so what happens is the middle class gets poorer and the poor get poorer and the rich get extraordinarily rich because they're using and playing a different game money can be complicated let a nerd help you we're here to demystify the complex nature of money by getting you answers from financial nerds and whiz kids welcome to ask the money nerds a weekly segment of the wealththoughts podcast where we answer your most pressing money questions are you worried about inflation with the massive amount of money that's been added to the economy in 2020 hey notice i said added not even printed anymore right should you pay off loans or consider investing is what's the right thing to do there or is now a good time for crypto or gold lord knows you're gonna hear millions of people just go oh you gotta do it it's where it's at i'd be a little bit careful before you dive all in and if you're wondering what the best methods determine what to do with your cash well you're in the right place pay attention stova what's up hey you said are you worried about inflation i have some concerns about inflation you should oh thank you for comforting me sleep better at night i you know i came across this um screenshot that i took and i'm gonna we're gonna since we're gonna talk a little bit about inflation i'm going to share this with everybody so this is during the super bowl okay okay so this is a 50-year difference so average ticket price on the 50th year anniversary so 2020 2 500 what do you think it was 50 years ago 50 years probably 17.90 15. you were so close 15 okay so now the cost of a 30 second commercial today in today's age 5.6 million dollars that's asinine that's crazy but 20 years ago what do you think it was 30 second commercial or 50 years ago sorry 50 years ago like 10 000 bucks 78 000. i mean i i just let it be so many fewer people watching but now as i think about it there's so fewer channels back then so yeah so it's a little low on that that's the jump within 50 years is gigantic and that's inflation right that's a big part of it definitely i mean they've added a lot more entertainment and you know made the super bowl a bigger thing with its brand but at the same time the cost has gone up so insurmountably because we keep adding money to the economy that we don't even print it there's only like a trillion some dollars of bills but there's you know tens of trillions when it comes down to it with the money um and what it's doing is it's confiscating people's wealth it's adding to some people's wealth that are playing by leverage and derivatives and you know invested uh in owning you know the stock market where they're a hedge fund or something like that but for the person just working and trading their time for money and they're just trying to you know get by save that money it's just lowering that money's value because dollars represent value and if we add more dollars without value then it devalues the existing dollars yeah that's a big part of it there's also other complicating things like fractionalized banking yes which is so disturbing i i mean i don't want to explain it but you can yeah just we're lending out money more than once yeah so it just keeps getting lent out these are a lot of the factors that create inflation yeah you know one of the things that i was thinking about when it comes to inflation that i want people to understand is when we had all of this money come out early part of 2020 for the stimulus package it's not like the government had that money in savings it wasn't a reserve that our government or the fed had right because there's a difference between yeah the fed the federal reserve is not federal nor is it a reserve yeah it's a central bank and it's owned by private individuals so yeah and i think that's a great it's a it's a pretty you don't want to go down that rabble hole right no no you won't feel warm and fuzzy yes so like i just keep thinking you know i want people to be helped but at the same time we don't have reserves so when we add and pump money into the government or into the economy without it being from like reserves or saving that creates massive amounts of value is the representation of the previous dollars let me let me say it this way imagine you got a mortgage yes right you decided that you wouldn't pay that mortgage off you're just going to make the payments and you had a 15-year loan and you're chugging along you're 10 years in you only got five years left and you go out to your mailbox you get a million dollar check like oh awesome it's got a million dollar check you feel so good about it but then you find out that your neighbor got a million dollar check and then your other neighbor got a million dollar check and you call your family and they got million dollar checks everybody got issued million dollar checks now if i did everything i could not to pay off my mortgage i've only been paying my interest i haven't paid anything down on it i'm so happy about that check a lot happier than you are because you took hard-earned money for 10 years that was worth so much more we just valued everybody's cash and i just got that cash and i paid off my mortgage without doing anything and what we do is we create this cash because we think that we're going to help people but in reality we them because we think that we we continue to confuse the money game money is a representation of value once again and if we start to add it without people creating value it devalues the existing dollars and unfortunately within three to five years it all ends up in the same hands anyway so what happens is the middle class gets poorer and the poor get poorer and the rich get extraordinarily rich because they're using and playing a different game so it's it's frustrating this is disturbing everybody today so let's let's bring some inspiration it's truth but it's it's unsettling to know that and so we have to be strong enough to hear the truth yes absolutely this whole notion that we're protecting people by not telling them what's going on is crippling it's silly and what it does is allows politicians to continue to abuse the system and abuse their power yeah at the cost of people that are doing the work right and it just annoys me when these politicians say they're going to give people raises that's not a politician's job let the market determine and if you don't like what you get paid it's time to choose a different career it's time to get a different education i get it there are absolutely situations where people are in environments that it's extraordinary and exceedingly difficult that there's everything from prejudice and racism and all sorts of things that are harming people sexism you can name it that are actually destroying people's ability to create value and we got to get past that that annoys the hell out of me absolutely but a politician isn't going to solve it we're going to vote with our dollars yeah like everyone's oh we got a vote it empowers the people no we got to vote with our dollars we got to vote with our actions we've got to do something that says we're going to take personal responsibility for our own situation and the impact that we can have on those that we reach and it isn't about trading time for money anymore it isn't about just taking care of ourselves and no one else those are the old times that have got us to where we are today and it's been good in some ways but horrific in most and it's time to actually give it about humanity for once yes and it's time to realize we're capable of so much more and that we don't need a government or another entity to save us or take care of us that weakens us so just a little notion amen to that personal responsibility owning your power do not forget that you are a powerful inner individual with autonomy with abilities and things that you can share never forget that it's no one or anything outside of yourself right and let's let human beings be human beings like one of the most important things that happened in my life was when i was 18 yeah i went taught english in south korea now i grew up in a small coal mining town which is kind of like a america kind of town right like like we're the only free country and somehow we're the favored people and all that kind of crap that i really kind of believed ignorantly and all of a sudden i go to korea i'm like these are amazing people there's a lot more peace here than what i'm dealing with you know in the states there's they're they're just you know they're actual human beings there isn't like better than and all that kind of stuff and it was it was game changing and so when we can start to exchange with one another when we serve other people when we solve problems with each other when we work together rather than separately i think that there could be so much more wealth and we have the resources required to solve the major problems that we face if we can overcome scarcity if we could become the value creators we were born to be and not be protected or taken care of or handled or blinded or what coddled like the system sucks my vote is we we're done with this crappy system right my vote is let's just treat people really well yeah and let's learn lessons like we're going to learn from every person we encounter either a way that we would like to be or a way that we wouldn't like to be and we can still love people from a distance that's the thing not everyone's going to be nice and warm and friendly there's a lot of people that are hurt and hurt people end up hurting other people so as much as this is an ask the money nerds episode i think we have to identify that this began with inflation but we have this kind of underlying problem that people believe in a zero-sum game it's a take what you can it's not personal it's business and it kind of devalues individuals right and if we can just get back to valuing ourselves and valuing other people there would be a lot more prosperity in the world and no one's swooping in to save you unfortunately so it's good to see people standing up for themselves it's good to see people actually reaching out and helping others thinking more than just about their own survival because that's what's going to get us through not a government governments are not capable nor are they that interested when it comes down to it is my feeling i'm with you this is a little financial sermon let's let's do let's get to a question okay i could keep talking about this but let's get to the point here kathy's question this is what she says our house is worth four hundred and sixty thousand dollars right now and we owe one hundred and seventy five thousand dollars at four percent our father owns a home worth a hundred and fifty thousand dollars he is now living with us and planning to sell his home with inflation coming should we put the proceeds of his sale toward the 175 000 mortgage or invest it in crypto or gold to buy land thanks for sharing your knowledge you know people are also asking about silver right so there's there's lots of concern around inflation what do i do when the dollar's not worth a thing well the dollar may not be worth what we want it to be but neither is gold and silver how so gold and silver is worth what we agree that it's worth the reason why people feel more comfortable with gold and silver is because it feels more finite we don't know how many more dollars they're going to add to the economy today or to the computer screens or the banking system and we feel like we have very little control over that so gold and silver being a little bit more finite could they mine more of it sure but what people don't recognize is because of derivatives there's a lot more paper that lays claim to silver and gold then there's actually silver and gold so it's a certificate that is taking a receipt of it right so you're like oh i have this certificate where i could do this maybe you own it through stocks just as an example got it well if everybody cashed that in there isn't the backing for it so it has some of its own problems what's a derivative so i mean a derivative is basically it's like this there's no real simple way to describe it unfortunately but when we think of like margin or when you think about options trading um it's it's like having this underlying asset that's represented some other way so when you're selling short you're saying i expect this to go down so i'm buying insurance i know if that goes down i'm the one that gets the money the person who bought hoping that goes up is the one that lost so it's kind of like this win-lose platform and derivatives can allow us to exaggerate that experience by buying on margin by borrowing by having leverage by using underlying other underlying securities and so i'd like to hear someone explain it very simply and what it is all i know is that it's allowing people to play by a game that they can earn massive amounts of the money at the expense of other people that are just plugging along handing their money over hoping that it's going to work out and so i understand the appeal of gold and silver but look there was an appeal during 2000 when the market was going you know down for three years there's an appeal in 2008 when we were worried about hey what's going to happen with all the banks going under in this recession hitting and so during those times people tend to turn towards gold and silver because it's a type of commodity that's fueled by fear when people are afraid they move towards it it's volatile though especially silver one major player could sell it and it can have a huge dip and a lot of the people that i know that have massive amounts of gold are in a conspiracy and they're completely under the notion that we need to buy bunkers and that it's about land it's about guns and the thing is if they're right i don't want to live anyway so who gives i mean take me now in case right i think toilet paper is probably going to be more valuable as we saw during the covet area era versus maybe gold and silver infectant wipes my issue is gold and silver is not creating cash flow and people go there because they lose confidence in something else not because they have more confidence in that and then there's this hype machine like i remember in from 2008 to like 2011 so many commercials cash for gold cash for gold like because you know there's there's like so many people going we're gonna buy it we can run it up and then they eventually sell it and then it drops out and what happens is this kind of greed gland kicks in for people that with the fear and the greed coming in they're like fear of okay my dollar is gonna be worth anything and greed i've got to have more wealth so they speculate in this not knowing enough about what's going on now i'm not upset with this question no because she's asking from a good place my my question is what do you know about gold and silver what do you know about crypto how do you protect the downside how do you cash flow that how do you create economic independence what are your levels of certainty is it a investment or is it pure speculation and for most it's speculation yeah and so this is my concern now at the same time speculation driven by fear right i'm very concerned about people just taking their their lump sum of 175 grand and just paying that down on an amortized loan because it doesn't lower your payment it but it does lower your balance it does shorten the term of how long you'll have to pay on it for but you still have a higher payment and now that money's locked up in equity jail it's stuck inside of the home so if you have an interest-only loan paying that down no problem because it's going to lower your payment if you have an amortized loan it's going to shorten the term it's going to lower the balance but it isn't going to lower the payment and you still have a cash flow issue there so and because of inflation we go back to the very first example of this million dollar check that we magically get that means that everybody with student loans was happy they kept them because inflation helps you with your loans i'm not an advocate of everybody going and leveraging and borrowing money to try to get ahead too many people take risk and they lose everything doing that but if you have a mortgage over 30 years your payment 15 years from the first payment is a lot easier than your first payment because inflation's actually helped you it's made it where oh i should be making more money having more money because my money won't buy quite as much but my payment didn't go up got it so that's why i'm comfortable carrying a mortgage and i'm also looking at something called cost of money so cost of money is we always pay interest whether you pay cash or you finance what happens when you pay cash you forfeit your right you forfeit the right to earn interest it's a little bit more sly it's a little bit more subtle it's more understanding economics but you forfeit the right to earn interest on that money and instead if we borrow we know very clearly that we pay interest but either way there's an interest cost so look if you knew you could earn five percent guaranteed i'm not saying people can but if you knew you could earn five percent guaranteed here's one way that we could look at that okay a lot of people are shortening their mortgages right now because interest rates are really low like hey i barely got my payment i barely have my payment but i so look it's it's it's good it's progress i'm happy but what if at the same time they had a 15 interest rate credit card we had other money nerds questions at 22 29 27 something like that so if you shorten your mortgage every dollar that it now costs you more than if you would have kept your mortgage at 30 years or longer it's costing you not just that dollar it's a dollar plus 27 percent yeah because you'd have been better off using that money to pay off your highest interest rate whoo listen to that again that's cost of money still yes that's understanding what your highest cost of your dollar or the best use of your dollar and what's that sustainable rate for some people they don't know much about investing they don't take time to learn to be an investor so it's whatever the banks are giving them which is next to nothing they're probably very best just paying these things off as quickly as possible but there's a way to do that intelligently we have other videos on that yeah but if you could do something even basic like what i do at cashflow banking i can earn a little bit more it's not a huge amount more than what i'm being charged on my mortgage which means i'm doing to the bank what the bank been trying to do to me forever so so my my thing is i would be really careful with gold silver and crypto crypto crypto crypto bismal no crypto crypto is highly speculative it's very early on you have entire nations that might have their own digital currency essentially you you know you don't have uh certain institutions backing it yet we're seeing like there's just a lot of news coming out so that could be a hedge it could be part of the strategy it shouldn't be where you put all your chips unless that is your complete expertise and what you're dedicating your life to otherwise it's complete gamble so we've covered cost of money we've covered some of the reasons why inflation exists um for me it would be could they become cash flow investors is there something you put the money in that can create cash flow for them if so great and if you're willing to sit on the sidelines for a while and be patient which is kind of what it takes to find really good cash flow investments well then that might be okay to sit on the sidelines temporarily yeah um you know but if they do invest it's all about managing risk how do you protect the downside really wealthy people are extraordinary at managing and mitigating risk but the world thinks they're good at taking risks yeah but we got to learn to be better at managing risk right and so if you can find a way to make money on the buy the right deal the right investment the right business i mean with that amount of money you could actually buy a business if you're willing to do the work of owning that business right as an example but i would really look for recurring revenue and look i would go to budgetingsucks.com because that book i mean that book is so so much more than how to overcome budgeting mindset that's like a tenth of the book the book really shows you how to become a better investor with investor dna that book really outlines ways to create cash flow with your money and how to plug leaks so you keep more of what you make and how to mitigate and manage risk and i think i do it in a fairly entertaining way so budgetingsucks.com now i've talked a lot on this one video anything else we uh are left to talk about here no i think i think we've covered it i just feel compelled to remind people that like you're a sovereign human being with freedom own your power don't forget it if this time just feels so stressful there's so much anxiety so much uncertainty but don't forget you're in the driver's seat of your life and that's my reminder that i want to leave people with well still will set us off on the right way to end this all right now you know how to turn your thoughts into profits and build the life you love go out there be productive create value serve others and let's come together as humanity here [Music] you

Channel: Garrett Gunderson

Views: 62,627

Keywords: Garrett Gunderson, Wealth Factory, Wealth Building Strategies for Entrepreneurs, Financial Freedom, Financial Independence, Getting to economic Independence, what would the Rockefellers do, business, success, entrepreneurship, Robert Kiyosaki, Matt Clark, Ryan Daniel Moran, Tim Ferriss, Grant Cardone

Id: uGR2eBlmurk

Length: 19min 47sec (1187 seconds)

Published: Mon Aug 31 2020