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Mindset & Money | The Rules Have Changed

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Hosted by
Mike Ayala

On this episode of Investing For Freedom, Mike talks about how the rules have changed in all walks of life. Mike discusses how we live in a world of control, how much is changing, and what that means for the future of real estate and life.

“We need to look forward 12 months, 24 months, 5 years, 10 years, what does the world look like? We don’t need to get over into fear, we don’t need to put our head in the sand, we need to start visioning and thinking.”

HIGHLIGHTS:

0:00 – Intro and Mike asks you to review the podcast on Apple podcasts and let Mike know what he’s taught you!
2:41 – Mike explains how the rules have changed
4:50 – If Mike told you 2 years ago that you would need masks to travel and that there would be stickers to tell you where to stand, you wouldn’t believe him
6:20 – The WHO have created a pact with 70 countries to standardize COVID measures
7:05 – Mike is mentally prepared for what’s coming and he’s not scared
8:19 – Inflation has been coming for a long time
8:55 – There was always a fight about raising the debt ceiling in 08, but now the Federal Reserve is no longer reporting on the M1 money supply
10:11 – Mike still thinks that long term, real estate is a good investment
11:32 – The government is willing to step in, even on private loans, so debt is an asset at this point in time
14:04 – If the price of real estate continues to climb, the price of rent will go up
14:52 – There is so much access to money right now
17:03 – Mike is preparing for an all-out attack on freedom
19:09 – Mike is still investing, and if you want to get involved you can text BUSINESS to 480-531-7519

FULL TRANSCRIPTION:

Thank you for joining me on the Investing for Freedom podcast. Today, I’m going to discuss something with you. But first I have an ask. If you’ve been following me or listening to the podcast for any period of time and you’re enjoying it, which I know many of you are because you reach out to me on Instagram at the Mike Ayala, which if you haven’t go ahead and DM me, let me know what you’re learning. Let me know how it’s helped you grow in your life. But anyway, here’s my real ask. If you’re enjoying the podcast, if you would please just take a minute and go leave me a review on iTunes preferably a five-star review, and maybe just tell me there and tell the audience there, how my podcast has helped you or how me showing up for you every week has helped you. I would greatly appreciate that, and you know, I’m not an ego-driven guy in the sense that I need a whole bunch more reviews, but I really want to get the message out there, you know, around mindset and financial freedom. And I’ve had so many people in my life that have helped me so much, and a lot of them, you know, come on the podcast, and in order to continue that and to get more amazing guests on the show, it’s just easier to do that when we have more reviews and people can see really the impact that the show is making on them.

So, you know, whether it’s helping me find more listeners in order to expand their mindset if I’ve helped you do that you know, we owe it to continue giving that back. So you know, like I said, I don’t ask for a whole lot, but I was really just feeling led this morning to you know, just ask for that because a lot of us are super busy. You know, it’s really hard to take time out of our schedules to you know, just take five minutes, and go leave somebody a review like that, but I would just greatly appreciate it if you did it. It would help me just like I said, reach more people and you know, if I’ve given something in your life, that’s one way that you can pay it back to other people who need to hear this message.

So anyway, onto today’s podcast. So here’s the thing I’ve been thinking about, and I don’t have a direct answer for you today. I’m just going to challenge your thinking a little bit, and this is what I’m thinking through currently. So again, I don’t have an outcome today other than to prod thinking in your mind. So here’s the thing that I want to say to you. The rules have changed, and I think you guys probably know that I think you’re probably aware of it, but let’s really take a quick little deep dive on this. And let’s talk about a few things that I think we just need to make sure that we anchor and solidify in our lives. The rules have changed, and it’s super important that we understand that. And there’s this concept that Keith Cunningham talked about in his book, The Road Less Stupid, great book if you haven’t read it, pick that book up. He’s a billionaire, lots of sage wisdom. And what I love about this guy is it’s just super practical. It’s stuff that you can apply in your life. And it’s just, you know, it’s the things that he did in order to get to where he is. And it’s, you know, not a lot of fluff. But one of the things that he about in there a lot is thinking time and every single morning, he spends 45 minutes in thinking time. Now you don’t have to do that. If you spent five minutes in thinking time, if you spent 10 minutes, whatever you can allocate I would just encourage you to start spending some time thinking because we don’t spend enough downtime, really thinking through challenges, problems, and also you know, there’s a lot of conversation around vision boards and thinking about the future and all of that, but we also need to think about risk and we need to think about how the rules have changed.

And so I would encourage you, even if you just do this for the next seven days and see how you feel about it, spend 5 minutes, 10 minutes every morning, get a pen, get a piece of paper, and write down a question for yourself. How have the rules changed in real estate investing? How have the rules changed in business? How have the rules changed around government and freedom etc. So I’m telling you right now, the rules have changed. And again, you’re probably aware of that, but we’re in an interesting time because even as I think through, and I look at, you know, our real estate portfolio and the manufactured housing space, the rules have changed. When I think about, you know, the businesses that we run and operate, the rules have changed, as I said. You know, the way that we go to dinner has changed.

And so if I told you a year and a half, two years ago, that, you know, there was going to be lockdowns all over the world and that we were not going to be able to travel, we weren’t going to be able to get on an airplane without masks in the US, I remember literally traveling to Asia and you know, I mean, even as of two years ago, I was in Japan. I remember traveling and just looking around and a lot of the Asians, you know, were wearing masks and stuff. And I just always thought it was a little bit odd. But if I told you that you were going to get on an airplane, if you even could get on an airplane and you were going to have to wear a mask, and the entire plane was going to be full of people with masks and everywhere you looked, and it was going to be stickers on the ground that said, stand on this sticker, like we’re being programmed and I’m not here to get political, but we’re literally being programmed to like stand in lines. And there’s stickers on the floor everywhere telling us where to stand. If I had told you two years ago that literally just like six months later, the entire world was going to be locked down and there was going to be no food. And there was going to be no toilet paper. You’d call me a nutcase. And so the rules have changed around everything.

I heard a, it’s not even a statistic. I heard yesterday that the World Health Organization and I’ve yet to confirm this, but it’s from a credible source. The world health organization has a pact that they created, and 70 countries have signed this pact on standardizing the health requirements around COVID regarding travel, regarding masks, regarding you know, airplane travel, regarding everything just, and you know, we wonder like why these countries are still shutting down and doing all this stuff simultaneously. And it’s because the rules have changed. Like the world health organization has literally created a pact that 70 countries have signed that are standardizing the way that they control us guys. And so the rules have changed. And how does this affect us right now? Like, I’m not saying this, you know, I’ve had, literally, sometimes I put on my tinfoil hat and you know, I’ve had some, I don’t have conversations like this with everybody because I don’t want to scare the crap out of people. But at the same time, we’ve got to wake up. You know, we got to look at what’s really going on around us. And I’ve had some conversations with some friends at dinner and stuff, etc. And, you know, some people have told me, yeah, but we can’t get over into fear. I’m not scared. I’m not scared at all. There’s nothing in me that is scared. I’m mentally preparing for what I know is coming and the rules have changed.

And we’ve been saying this for years. And people, you know, Robert Kiyosaki said this. A lot of people have been sounding the alarm for years around this stuff. The thing is it takes time for change to happen. And it happens slowly over time. And then all of a sudden, boom, it happens quickly and that’s what’s happened recently. A lot of stuff that’s been, you know, I don’t want to get over into the dark side, but whether it’s intentional, non-intentional whatever, you know, if COVID came out of nowhere and it’s just truly, you know, just a virus and the government and people that are in power see opportunity to control and grab, and whether it is fear-based or whatever. And whether they actually genuinely believe it, I’m not here to answer any of that. I’m telling you though that the rules have changed.

And so again, how does this apply to us? I mean, we need to think about a lot of things. There’s a lot of conversations around Bitcoin and decentralization and you know, one of the greatest books that I’ve ever read. And one of the greatest men that I’ve ever met is Ed Griffin, the creature from Jekyll island, he’s been saying this stuff for a long time, since the federal reserve was created in the early 1900s, the value of the dollar has dropped 97%. And when we look around today, you know, there’s all this talk about how inflation’s coming. Well, this has been being said for a long time, like when you print the amount of money that the United States has printed over the last, I mean, every, since we came off the gold standard really, when you look at that, it happens slowly over time. But every single stage of the government printing money, people were saying, you know, inflation is going to be coming. You can’t have a Fiat currency, you can’t be creating this level of money. And then all of a sudden you hit 2008 and we’ve got this skyrocket of printing.

And I remember a time just again, talking about the rules being changed. I remember one of the big conversations after 2008 was, there was always a fight around raising the debt ceiling. We’re going to raise the debt ceiling a little bit more. We got to raise the debt ceiling a little bit more because we got to print more money. And that was always a fight. It was always an argument. We’re not even talking about that anymore. There’s not even a debt ceiling anymore. The federal reserve look this up. This isn’t me being crazy. The federal reserve literally recently has stopped reporting on the M1 money supply. They’re not even telling us anymore what amount of money they’re putting into the market because they’re printing so quickly. And so people keep saying that, you know, inflation is coming, inflation’s coming, inflation’s coming, we’ll look around. And this is the, this is the simple part of it, like our asset prices are, our assets going up in value, like, you know, housing and Bitcoin and all this stuff, or is the value of the dollar finally plummeting. And I would argue that the value of the dollar is finally plummeting, and that has nothing to do necessarily with the rules changing. But here’s the thing, that’s allowing them to change the rules extremely quick.

So I’m not saying any of this is going to happen. I want you to go think about all this stuff, but when it comes to real estate investing, you know, interest rates are at an all-time low. I’m going to be doing some more deep dives on this specifically about what I’m thinking through, but here’s the thing that I know for sure. I’m a pretty, I have a pretty high tolerance for risk, and I’m starting to analyze everything that’s going on through the lens of risks, because I have no control over how fast and quickly the government and the governments of the world across the board are manipulating everything, the entire systems. And so we have not a lot of control over that. So what we really need to think about is what can we control in life and how can we hedge against that. And so when it comes to real estate, I’m still a fan of real estate. I think long-term real estate is going to be great. We’re actually in the process right now of selling off a third of our portfolio, just because not because we’re scared, not because you know things have gone bad. Actually, through COVID our tenants have actually performed very well. You know, we’ve always had the thesis that affordable housing is the place to be, which is, you know, where we’re at. We have 35 mobile home park communities. Have we had challenges? Absolutely. We’ve had some challenges along the way. You know, construction stopped. We had to close down our construction company for a little bit through COVID. It’s really hard to get new homes. It’s hard to get materials. We had to downsize our employees and our team just like everybody else had to do.

So yeah, we’ve had challenges, but I’m still optimistic and I’m still bullish on affordable housing long-term. But when we look at, you know, interest rates, and again, I don’t have an answer for you guys today. I’m just going to point out what you may think is obvious. But the rules have changed. And so interest rates are at an all-time low. There’s literally a bill right now. I’m sitting at, I think it’s April 20th or something 2021. So there’s literally a bill right now that Congress is debating. It’s another part of the stimulus package that’s just going to keep on coming. What they’re talking about is if COVID has affected you in any way, you can basically just take a mortgage and you know, a lot of this has been you know, with government-backed loans recently, but what they’re talking about now is even private loans you know, non-FHA and Fannie and all that, even those private loans the government’s willing to step in and allow you to basically redo your loan on 40 years, which means that people’s principal payments are going to drop a ton. It means that their monthly payments are going to drop a ton.

So you know, a long time we’ve talked about your house being in, not being an asset, which I agree with generally, I’ve always owned a house because you have to live somewhere, and I want the security and I don’t ever want a landlord to tell me what to do. And I want to be able to fix my home how I want. And so is your home an asset? I don’t think it’s necessarily been an asset, but I don’t look at it that way. For me, it’s like a way of life. It’s a home for my family. It’s security for me. But when you think about the rules changing, debt is the new asset. That’s a new rule that exists in the system, debt was never an asset. I mean, that could be argued, but debt is definitely an asset at this point in time, because it is debt is at a point today that is lower than, the interest rate that’s being charged is definitely lower than inflation is going to hit. And I don’t really care what the Fed’s targets are. Because I think it’s all been bull crap over the years anyway, but when the fed actually comes out and says, Hey, we’re raising the inflation target rate. Now debt is an asset because you can actually borrow money cheaper than what inflation is going to go on. So when you lock into 2.75% or a 3% interest rate over 40 years. So you can literally borrow money at 2.75% or 3% interest, and it’s going to be less than inflation over the next 40 years. There’s no way over 40 years that inflation doesn’t outpace 2.75% or 3%. So literally debt is the new asset. That’s one of the ways that the rules have changed.

And so when we look at, you know, your house and a personal residence, and being able to lock that in for 40 years again, the rules have changed and if you’re a tenant and you can get financing, which I saw a thing yesterday that they’re opening up a $25,000 down payment from the government for like underprivileged, certain markets, this kind of, that’s a new rule that exists. And so all these people are able to get access to financing. And so if you can get access to financing, you know, I’m not telling you what to do, but maybe you want to think about, well, and again, I’m not going to tell you what to do, but this is how a rule has changed. If the price of real estate continues to climb and people buy investment properties at a higher price, then that means that the cost of the monthly rent has to go up eventually. And so, you know, everything’s upended, and you’ve got to think through that stuff. And you know, I don’t know how many of my listeners are actually tenants, you know, renting apartments or whatever. I have no idea, but the reality is whether you’re on the landlord side, whether you’re on the investing side, whether you’re on the tenant side, you got to think about all this stuff. And so you know, can landlords get their interest rate locked in at 2.75%, 3%? It’s a lot harder when you got you know, multiple investment properties to get the type of financing that you can on your, you know, your home that you live in. And so that’s the kind of stuff that we got to think about.

Business, you know, the business environment that we’re in, it’s completely changed too, the rules have changed. There’s so much access to money right now. I literally got another email the other day that said, Hey, you can have more EIDL. And there’s all these payroll tax credits and everything. And by the way, I’m not saying that I agree or disagree with any of this. I’m just stating, I’m just stating what’s happening. And I want you to think about it around the rules changing, you know, COVID really showed us what’s critical. What types of businesses are, you know, fundamental, the government basically told us who could stay open and who could be closed. So we have to think through that stuff, you know, we’re always as business owners and entrepreneurs thinking like, you know, what problem do I need to solve? Where are the most clients, you know, how do I open something that everybody’s going to need? But the reality is COVID showed us immediately, like what is going to thrive long-term and there’s always going to be opportunity. So, again, the rules have changed, and I just want you thinking through all that.

You know, when the government can come in and basically tell what businesses stay open and what don’t, that’s pretty interesting. And then when we start seeing, you know, tax changes and again, I’m not here to report whether this is good or bad, but the new incentive around you know, meals for business, being able to write off a 100% of that, I think that’s a smart move, but, you know, the government basically said you can go out and any money that you spend as a business owner, that’s a business meeting you can write off a 100% of that. Well, what’s the point of that? It’s to get the restaurants coming back.

So anyway, we really need to be thinking about how the rules have changed. The rules have changed around health. The rules are going to continue to change. You know, they’re potentially going to tell us, you know, in certain places that you know, we have to have this COVID vaccine and we’ve got to have a card that we carry around in order to get on an airplane, in order to go to a store. It’s going to be on our phones, you know, the way that the phones are all interconnected and they know everything about us, it’s just super interesting. And so we have to just be thinking about all of this, and again, you might be saying, Mike, you’ve got a tinfoil hat on. You know, you’re fear-mongering whatever, I’m not scared guys. I’m not scared because I’ve been thinking through this stuff for a long time. And I’m preparing for an all-out assault on our freedom and you know, where that ends, I don’t have the answer to that, but the rules have changed. And a lot of us have just sat back and you know, we’ve just allowed it to happen.

So we really need to think about all this, where’s this going? How does it affect me? How does it affect me long-term? You know, basically, we’ve over, like overnight went to a universal basic income. Everybody’s getting cheques. We’re just kind of buying into it. We’re wearing masks wherever we want or wherever they want. It’s not, I guess it’s not wherever we want. No, some of us wear wherever we want. You know, I was at dinner with a guy the other night that has never put a mask on. Him and his wife, their fundamental core value is freedom. And this podcast is called investing for freedom. And, you know, freedom is one of my core values. And when I was really listening to this guy, he’s never put a mask on. They intentionally, you know, they said our lives are going to be affected by this, but they haven’t been on an airplane. They haven’t been in an airport. They haven’t been in a government building. They haven’t you know, they haven’t gone to grocery stores that require masks. They haven’t shopped where they used to shop. Yeah, so I know it’s extreme, but at the same time, you know, it just got me thinking about how much the rules have changed and how much we’ve just, you know, softened up to it. And we’re doing whatever we’re told.

So anyway I’m going to leave it at that. I want you to really just spend some time thinking about, you know, the rules around business and real estate and personal freedom in our life. And, you know, just look around if we had said two years ago, if you would have painted a picture of what our life was going to look like today, you would have called me crazy. Well, I think we just need to look forward 12 months, 24 months, you know, 5 years, 10 years, what does the world look like? And again, we don’t need to get over into fear. We don’t need to put our head in the sand, but what we need to start doing is visioning and just thinking in our mind, knowing what we know today, what do we think the world’s going to look like. And we need to start compensating and adjusting for that and just be prepared. And at the end of the day, like I said, I’ve got a high level of risk tolerance, but the reality is, my risk is calculated risk usually. It’s things that I can control. And there’s a lot of things that are out of my control right now.

So am I saying I’m not investing? No, but I’m still investing, you know, we’re out buying businesses. We’re raising capital still for the mobile home park space, which by the way, as a side note, if you’re interested in getting into the service business, we’re launching a fund here in about two weeks, text the word business, Text the word business to (480) 531-7159. And we’ll just get you on the list. And if you’re interested, then…
We’re going to have an edit there. I’m going to go back and just confirm this number. I tend to always mess it up.

And by the way, we’re launching a fund here in the next couple of weeks around in service businesses. So if you’re interested in getting in on that or getting information around it you know, this falls into that category of businesses that we think are going to remain functioning and profitable and needed everywhere. So text the word business to (480) 531-7519, and we’ll get you on the list for that. But anyway, we need to be thinking through all that stuff, you know, what’s going to happen with real estate. Is the government going to protect landlords, or are they going to protect tenants? What markets are going to be more landlord-friendly than others? We’ve been talking about this for years, but, you know, even some markets that were pretty landlord-friendly before, some states that were pretty landlord-friendly before are, you know, really changing their tune. And then the ones that were pretty tenant-friendly, they’re going all-in on that. So just need to be thinking about all of that and how the rules have changed. So again, not trying to scare you, but you should think about all that. As I said in the beginning of the show, if you’ve enjoyed listening to the investing for freedom podcast, please just go leave me a five-star review and tell me how it’s helped you.

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