This is Del’s response to a comment left on his show titled:
It’s Miserable out there in Corporate America.
Read the comment by clicking here.
So folks, what do I see in this that is so interesting to me?
One, that the corporate abuse is rampant, it’s everywhere.
Two, here’s a person that enjoys his job, worked hard, took pride in his job, but when it came down to making the cuts in corporate America, many, many times it comes down to the sycophant society.
He who is willing to suck up to the boss the hardest is going to be the person that’s going to fit in and stay. But whatever the reason is—good or bad or ugly—the fact is there’s no job security in corporate America.
Passive Income = Security
There’s more job security in owning passive streams of income that you control. When the firing stars, you are not going to be the person to get fired.
Then the other thing that strikes me is how quickly this gentleman is going to change his life. He’s already mapped out a plan. You can see he sat down with his mentors. He’s mapped out a plan to buy 10 houses they’re going to produce $2,000 a month and that covers his bills.
One of the things that people just don’t understand is that all you need to do to retire is to cover your bills whatever they are. And to do that you just keep building passive streams of income till you get there.
I don’t Need a Corporate Identity
The next point and I think it was the last point in this that really struck me was the part about I don’t need a corporate identity. I was talking with Steve the other day about this. This is one of Steve’s pet peeves. He’s gone off on this forever ‘cause he’s all against people making decisions based on ego and emotion. And he always talks about the guy who says, well, look I am vice president of something, you know.
Who cares what your title is. What does that mean? I run into people all the time and you will too—but I run into it more often because I see it where I’m standing around with a group of people—this happened last night even—and I’m asking people, you know, the guy’s going I know you’re getting rich, and I see that you are building multi-mega-million-dollar deals and I am just a lonely mortgage guy.
We’re Not Suit-And-Tie Guys
Now, how did we get to this conversation? I guess I should go back. We are sitting there laughing saying why don’t you—why have we never done business with your firm? They asked us and I asked them, well, why don’t you think? And then we started laughing saying ‘cause you guys all wear suits and ties and we don’t wear suits and ties.
And the guy goes, well, we’re only suit and tie guys ‘cause we’re servers, we’re like servants to you guys. We are trying to serve you guys. We are not rich like you. And I said, well, let me ask you a question. If you know we’re rich ‘cause you’re servicing us, and you see we’re making all the money, then why aren’t you doing what we’re doing? And the guy looked at me and he goes I don’t know. I really don’t.
If you don’t know why you’re doing what you’re doing, let’s ask those questions. Let’s call up. Let’s get involved. Let’s be like this show gentleman here who has a plan to buy his life back from corporate America. That’s what we all should want. It’s not the money, it’s the life. We just want it back. Just give it back, Mr. Corporate America.
The Coming Inflation
DEL: Holding now through the break is David from Houston. David, how can we help you today?
DAVID: Yeah, I’d just like to know a little bit more of your reasoning for why you expect the inflation that’s coming down the pike over the next 3 to 5 years to necessarily effect real estate prices because I remember we had massive commodity-based inflation in ‘06 and ‘07 while at the same time real estate worldwide was plunging. So why do you think that this inflation we are getting basically from a weak dollar is going to lift home prices in the United States?
DEL: Well, I don’t know necessarily that it’s going to raise home prices. It might. The odds are probably just as good that it will that it won’t, but I don’t really have — my business model is not banked on that. I am not counting on that in any way, shape, or form—
DAVID: I thought I heard you say a couple weeks ago you expected inflationary expectations in real estate because of a weak dollar.
DEL: Yeah, most people do because how much money Obama’s putting into the economy they are expecting inflation. My only point was that doesn’t hurt us.
DAVID: Yeah.
DEL: We make our money on the front end of the deal not on the back end. But if it does go crazy and inflation goes up a lot, it won’t bother me. It doesn’t hurt me that my properties went up in value. My rents are already going up in value. My occupancy is going up because people stopped buying homes. So really I am not counting on that, to answer your question, but I wouldn’t be afraid of it. DAVID: Yeah. So you think we are going to have inflation similar to what the 1970s brought? DEL: You know, I am not enough of an economist to know—to have that kind of a look-back feel, to be honest with you.
DAVID: All right.
DEL: I am not an economist at all, to be honest with you, but I don’t really know. And the other thing I think right now, David, is that I think the economy’s not the same. You know, I think there’s general cycles and things, but I also believe that the economy changes all the time. We’re more of a world economy now than we were, you know, 10, 20 years ago, so it could be completely different. The one thing I heard the other day that I thought was very smart and that was a guy was talking about interest rates and really the interest rates and volume of money controlling the inflation out there. And he was saying you know people don’t get it. Interest rate’s at 4 percent, 5 percent, bonds at zero and 1 percent is ridiculous. If you look back over the last hundred years and you look to what interest rates were, there is an average of between interest rates and most markets are between 6 to 8 percent and that’s pretty much where they’re normally at. He said but we have had 11, 12, 13 percent interest rates back in I guess it was the ‘80s.
DAVID: Yeah, people were just chasing them at that time being 12 and 13 percent—
DEL: Yeah.
DAVID: — for inflated property and then of course the bust hit then also.
DEL: Right. So what this guy was saying what you need to think about is right now what’s going on is he called it a reduction to the mean. We are moving back towards the mean. We are way outside of the mean at 4 percent interest rates—prices for homes. And interest rates shouldn’t be 4 percent, is what he’s saying, they should be 6 to 8 percent. And at 6 to 8 percent the house that costs a hundred thousand dollars is now going to have payments equal to 200,000 compared to a 4 percent interest rate.
DAVID: Yeah.
DEL: And so the houses are being sold way too high. It’s already inflated single family home value in our economy. The way he was looking at it, and I agree. I think that Greenspan said it best couple years ago when he said irrational exuberance. We have been riding a high balloon for a long time in this economy, and I think finally some of the hot air is coming back out of it. So I am not really all that worried about it.
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I couldn’t agree more. One of my pet peeves is people who are too attached to their titles.