396 | Generational Backlash Against Dave Ramsey, Fed Rates Update & NYAInsights

Dave Ramsey is a financial education legend who has built a media empire by helping thousands of people control their spending and get out of debt.

But people under 40 are lashing out against him en masse on social media saying his advice no longer works.

That's why we're taking a deeper look into where the disconnect is on the next edition of Not Your Average Insights!

This is our favorite content pillar where co-founder of JWB, Gregg Cohen, and show host, Pablo Gonzalez, dive into today's headlines to bring the perspective that can only come from 17 years of investing and 6,000 properties managed.

This week we'll cover:

- What the FED's decision to not raise interest rates will affect the real estate market
- Why Dave Ramsey's message seems to be creating more harm than good these days
- How investors can take advantage of the confusing market signals coming out
- and more!

Don't miss a chance to jump into the conversation and share your hot takes with us!

Join our real estate investor community LIVE: 
https://jwbrealestatecapital.com/nyai/

Schedule a Turnkey strategy call: 
https://jwbrealestatecapital.com/turnkey/ 

*Get social with us:*
Subscribe to our channel  @notyouraverageinvestor  
Subscribe to  @JWBRealEstateCompanies  
🌐 Facebook Group - https://www.facebook.com/groups/rentalpropertyinvesting
📸 Instagram - https://www.instagram.com/nyai_community
📸 Instagram - https://www.instagram.com/jwbrealestatecompanies

Transcript

Pablo Gonzalez: 0:00

Today we're talking about a couple, this is Not Your Average Insights. A couple things have happened. One is the Fed has held tight on dropping interest rates, even though they have been signaling that they want to be doing this for a long time. Number two is the youngins are out there in droves talking about something. They're not super pumped about our boy Dave Ramsey and the advice that he gives. There's been a generational backlash on social media. If you put in hashtag Dave Ramsey on Tik Tok, you're not going to find very good things. We're going to talk about why this is happening and why this is kind of a, even though we're not. Gen Z. Yeah. we're used to this conversation of like the backlash that's happening from this advice. So we're going to dive into that in today's edition of Not Your Average Insights. Welcome, everybody, to the Tuesday edition of the not, ah, to your weekly edition of the Not Your Average Investor Show. I'm your host, Pablo Gonzalez, and with me as always is the man that I affectionately like to call GC. Because of his Generational concepts. Alright,

Gregg Cohen: 2:21

we'll do that. Because he's

Pablo Gonzalez: 2:22

got genius concepts. Because he knows how to generate cash flow. Because he's a great co host. And because his name is Greg Cohen. Say hello, Greg.

Gregg Cohen: 2:27

Hello, everybody. Great to be with you.

Pablo Gonzalez: 2:29

And it is good to be here in studio. Do you see, you are back from you're back from a little trip that you took. I did.

Gregg Cohen: 2:35

I did just come back. It was one of those bucket list trips that really pisses off my boy here. Because it has to do with, you know, the thing that I love to do beyond family and beyond hanging out at the Not Your Average Investor show Then it's golf for me, baby. And I got to go to Scotland and play golf at some of the most prestigious courses in the country, excuse me, in the world, bucket list material. I got to play the old course at St. Andrews. I got to play two or three other courses that are like, I put together my, my top five and top 10 list of all the golf courses that I've played. Definitely three of them in the top five. So yeah, Did it for a week. When do you get to go, like, listen, I've got a beautiful wife and two kids at home, when do you get to go? a week and just go play golf with your buddies. so super appreciate my family. And it was, it was pretty awesome, man.

Pablo Gonzalez: 3:22

I just want to say it doesn't, it doesn't upset me at all that you go to Scotland to play golf and you can take our time away from us here at the non traveling investor together, but you can never take our freedom. I had to go Braveheart on that one. There we

Gregg Cohen: 3:35

go. It, it was ringing very loudly and clearly there for those seven days for me in Scotland.

Pablo Gonzalez: 3:39

I would assume that you guys were all like, Cold! Uh, anyways, so we can do Braveheart quotes. I did play,

Gregg Cohen: 3:45

play Robert DeBruce Course, by the way. Robert DeBruce. Yeah.

Pablo Gonzalez: 3:48

Robert DeBruce Course. that's fascinating. I'm pumped you got to have that, man. I do miss you when we're not doing this together. And the whole golf thing, you know, it's not about you. It's more just like, I'm mad at my dad that he stopped playing tennis when I, right. When I reached the moment that I might be able to give him a shot to play golf. And therefore I'll have forever villainized golf. And I really just, it's taken us

Gregg Cohen: 4:07

400 episodes to get this out here in the open here.

Pablo Gonzalez: 4:14

All right. Welcome everybody. We have a little tradition that we'd like to kick this show off with. Don't we GC? Yes. What's that

Gregg Cohen: 4:20

called? Alright,

Pablo Gonzalez: 4:22

we got the MVP kicking us off today. Everybody knows Lee Bishop. We got the Mulder Manor! We'll agree. He just has high MVP, Billy. What, what are we chop liver here? Big mistake. Not trying to, not trying to, just talking to the MVP. I get it, I get it, everybody wants to be friends with the MVP. we got the lead off hitter batting third today. John Henning. We got Christopher Lee from Fernandina Beach. Alright, Chris. We got Pamela Myers from Washington State.

Gregg Cohen: 4:44

Alright, Pamela. Checking

Pablo Gonzalez: 4:45

in, Pamela. We got our regulars. Gary and Rosalynn Reilly from Marietta, California. We regard you. Okay, so Billy Green has his good morning from the bullishly bearish mountains of Colorado. Thank you Billy, that's what I'm doing. We got the mystery man and mystery lady.

Gregg Cohen: 5:00

Denny Davies and his wonderful wife, Erica.

Pablo Gonzalez: 5:02

Good to have you in the house, Denny. We got the Shaw man.

Gregg Cohen: 5:05

Nadeem Shaw. With his

Pablo Gonzalez: 5:06

trademark good morning, good afternoon from the west coast. We got Pedro Nacianceno from Jersey. We got Charity Graham checking in with us. Charity, welcome back. Good to have you. We got Laura Colby from Washington State. All right, Laura. Excited for this topic. Tell me more, Laura. Now we're talking. Are you, are you a Ramsey lover or a Ramsey hater? Are you Gen Z or Gen me? I don't know how to make that run. We got Zenobia Lewis from Stone Mountain, Georgia. New name, new name. All right, welcome to the party. Good to have you. Heard, I've Heard beautiful things about Stone Mountain. Want to check that out. Who else we got in here? We got the mama bear in the house.

Gregg Cohen: 5:43

Cody Adams. We got

Pablo Gonzalez: 5:44

Big Papa in the house. We love it when he calls him Big Papa. All

Gregg Cohen: 5:46

right, my man. Pops, how are you, buddy?

Pablo Gonzalez: 5:48

The co founder of the co founder, Greg's dad, Jay Cohen. Good to have you in here. We got our amigo from Miami. Luis Olivares. Great to see you, Luis. He's been showing up each and every show, I feel like. Luis, it's great to have you. That's awesome.

Gregg Cohen: 6:02

Good to have him. We got Kevin O'Brien. Alright, Kevin. Good to see you, my friend. He

Pablo Gonzalez: 6:06

loves the Scotland Golf.

Gregg Cohen: 6:07

I knew Kevin would love Scotland

Pablo Gonzalez: 6:08

Golf. Kevin does. Even though I'm not sure that the Irish Are that big a friend fan of the of the scottish historically listen,

Gregg Cohen: 6:15

that's the beautiful thing about golf. We're all in one big happy family

Pablo Gonzalez: 6:19

Who else we got in here? We got mark norman checking in with hello mark mark. Good to have you here when are we having the jwb tournament is what luis is asking? The

Gregg Cohen: 6:27

jwb like golf tournament in scotland as he's talking about.

Pablo Gonzalez: 6:31

I think so Yeah, because we

Gregg Cohen: 6:32

do have the jwb charity golf tournament. We just had maybe we could take it, you know You We got the

Pablo Gonzalez: 6:38

five F's in the house. Our favorite fiduciary, fee based financial advisor, friend, Kelly

Gregg Cohen: 6:44

Barenbaum.

Pablo Gonzalez: 6:45

Kelly Barenbaum, haven't seen you in a minute, Kelly. Good to have you. We got the number nine most attended shows last year. She's working on that. She's working on it.

Gregg Cohen: 6:53

She's gonna be way up on the top 10 list this year. Misty and

Pablo Gonzalez: 6:56

Troy

Gregg Cohen: 6:56

Johnson. Misty Johnson. Good to

Pablo Gonzalez: 6:57

have you in here. Who else we got in here? We got Connie Stamos from Atzladena, California. Connie, love them. Altadena. Altadena. Get it right. I'm sorry. I was like Atlanta, Pasadena, Altadena, California. All right,

Gregg Cohen: 7:10

Connie. Welcome.

Pablo Gonzalez: 7:11

Is Connie a new name?

Gregg Cohen: 7:12

I don't think so. Because it sounds familiar. But we are just as excited. Because Connie doesn't always show up, so it's great to see you, Connie.

Pablo Gonzalez: 7:19

Good to have you. We got Juan Jose Lopez.

Gregg Cohen: 7:21

Alright, Juan. Very nice.

Pablo Gonzalez: 7:23

JJ from Ojai.

Gregg Cohen: 7:24

Alright. Love

Pablo Gonzalez: 7:25

JJ. JJ Ojai. Oh, hi. Oh, hi. Oh, hi, JJ. I know how to say Juan. I don't know how to say oh, hi. So, that's just my Oh, man. That's what I think. And of course, we got the first family. Ken, and Carolyn, Malene, Patrick, and Matriarch. We salute you! Diane Jaquez. First time from Concord, Massachusetts. Welcome to the show! Or Jax. I said Jaquez, because I'm already thinking of Ojai. Diane Jax.

Gregg Cohen: 7:52

Listen, your countryman Luis is probably just so embarrassed with you right now. Just your J's and your Hotas. Come on, get it right.

Pablo Gonzalez: 7:59

There you go. Ojai, Luna in Chumash language. Ojai language. Oh, it means it means moon. Oh, fantastic. Oh, hello. Enough about us enough about the roll call. Good to have the community in the house, as always checking in with us. You are what makes this show great. GC, let's talk I want to get into the generational backlash against Mr. Ramsey. But I think the first thing we want to talk about that just happened recently. The Fed just had their meeting. They, they've been signaling all year that they want to do what, three rate cuts throughout the year? We know that they want to do rate cuts and yet they got together and decided no rate cut this time around. What do you have to say about that? What's going on?

Gregg Cohen: 8:44

I think, it's funny because, The more that everybody is certain that something's going to happen when regards to the Fed or the economy, the less likely it is to happen. You've seen that, there was a lot of talk that, listen, it's an inverted yield curve, there's all these things that were showing us that it was definitely going to be a recession, and that recession hasn't happened, right? The economy largely has continued to go full steam. And then in the beginning of this year, like you mentioned, there was all of this talk. Well, don't

Pablo Gonzalez: 9:09

forget about other guesses. When interest rates would go up and they would stay up, real estate was going to crash. Oh yeah. How far back do we want to go? Everybody saw that coming. Yeah. How far back

Gregg Cohen: 9:20

do we want to go there? We could do a whole show on not your average takes compared to the rest of the talking heads out there and how That

Pablo Gonzalez: 9:27

would be an interesting show actually.

Gregg Cohen: 9:28

We should actually. We've actually talked about that a

Pablo Gonzalez: 9:30

lot. Alright. Well, let's do it. I feel like you have so many receipts now for the last, like, four years that it's enough. There are receipts. There are

Gregg Cohen: 9:37

receipts, right? The Not Your Average Investor Show receipts here. Let's collect. but you know, early this year, Jerome Powell the chairman said, listen, we're expecting rate cuts to, to be happening. We're gonna, we're expecting three this year. And when he says something like that, that starts a serious momentum. And so people were expecting that rate cuts would start to happen. Maybe not 7th, but sometime very soon. And that, of course, hasn't happened. Why hasn't that happened? It's all about inflation, this inflation metric, which is measured by the consumer price index. That's the index. How much are the cost of a certain basket of goods going up year over year? This measurement is driving everything in our economy. And for those of us who have been investing for You know, 20 years, consumer price index has always been important, but it hasn't gone to where it has been over the last year and a half, two years, where it, it raised up to 9%, 9. 1 percent was the highest CPI that we've had and the highest that we've had in 40 years. And ever since that started to happen and get close to that 9 percent figure, it's been That CPI metric has dominated the economic landscape. And we've been able as an economy to bring that number down. And the reason that it is important in to bring that number down is because the entire economy is based on, you know, what, what goods and service goods and services are costing. And those who have the least are the most affected by a high inflation rate. Along with everybody else in the economy. So it's a big deal for the Fed to get right and for our economy and our government to get right to make sure that we're taking care of our people. So that's on its way down, but it is, it might be somewhat easy to bring it not easy, but it's easier to bring it down from 9%, maybe to 7%, maybe to 5%. Now we're at about three and a half and what Jerome Powell and the Fed have said is that our mandate It's 2%. And that it is really hard for them to bring it down from 3. 5 percent to 2%. And the other thing is that we don't really have tools, the Fed doesn't really have tools to know what lever to pull or push to get it from 3. 5 percent to 2%. So what is the Fed trying to do? They are trying to thread a needle here. They're using very blunt tools to do it because it's the only tools that we have to be able to manage this thing. And until they start seeing a number of leading indicators starting to point in the direction that inflation is getting closer to 2%, they're just going to say, Hey, listen, not doing anything. Right? Inactivity is an okay thing in the mind of the Fed right now because There are some very big consequences. If they start to take action too soon, and lower the Fed funds rate, which lowers interest rates indirectly across the economy, that could send the economy back into more of an inflationary environment.

Pablo Gonzalez: 12:52

High gear spending mode.

Gregg Cohen: 12:53

Yeah, it really could. And so you could be right back up at 4 percent and 5 percent inflation, which is really, really big consequences for the economy. Yeah. But on the other side, if they don't take action quick enough, what could happen is they restrict the economy so much that it goes into recessionary time. And the Fed has a dual mandate. One mandate is to keep inflation at or near 2 percent CPI. The other mandate is to keep unemployment low. So when I say they're threading this needle, if they don't take action and lower the Fed funds rate early enough, Because we have these blunt tools, it could be too late and we could already be paving, paving the path to recession, which means high unemployment. And so while they would solve one of their mandates, they might make it a lot more difficult you know, to solve the other mandates. So we haven't seen these leading indicators start to line up and make sense for the Fed. And that's why they're on the sidelines. And that's why we did not see any. Activity as far as the Fed funds rate decreasing, even though many people thought that it would near this time.

Pablo Gonzalez: 14:04

Yeah, and just to recap, for folks that haven't been following as closely as GC or myself and the rest of the community here, I think it was, you know, we, we started having this like red hot job market. Unemployment was like at an all time low. Inflation started going up, right? So they started raising interest rates because they believe that in order, they raise interest rates, that cools off the spending. There was talk about going into like a, you know, really triggering a recession to try to do this. It kind of blipped. We had a little bit of what we call a white collar recession at some point about a year ago, right? Where there was a bunch of tech layoffs, a bunch of marketing people in tech layoffs, right? We're kind of, we're kind of the tip of the spear there. So if you listen to LinkedIn, there was a massive recession because that's where those people like to talk.

Gregg Cohen: 14:48

All

Pablo Gonzalez: 14:48

right. But what has happened has, has been The economy cooled a little bit by letting some folks go. Venture capital has slowed down, right? These like other ancillary parts companies went from having this like growth at all cost mentality to sustainable growth. And what has essentially happened is unemployment has stayed pretty low, right? It's still, 3. 9%. Yeah. 3. 9 percent historically low inflation rate. Velocity of homes being sold and bought has slowed down. Sure. Right? But prices for homes have stayed up, which everybody thought that the moment that you make the interest rates go up, prices would, would go down. Right? So like we've been at this, at this almost equilibrium point of view, a new kind of like level of equilibrium point, right? Where it's like. It hasn't, inflation hasn't ticked up. It hasn't ticked down. Employment hasn't ticked up. It hasn't ticked down for like a minute now. And while everyone wants to see interest rates drop, because there's a whole bunch of people on the sideline wanting to buy more real estate, wanting to buy more homes and do all these kinds of things. The Fed has, said that they want to do this because people are asking for it. Everybody's happier when money is cheap because things can happen for them easier. But they're seeing this thing they're holding on saying, we think that the moment that we drop interest rates, there's going to be all this demand on the sideline. That's going to jump into the pool and it's going to start driving transactions. It's going to drive prices up. And we're afraid that if we do this, Inflation is going to kick back up again. So we're not low enough again to do that. Is that, is that,

Gregg Cohen: 16:34

yeah, that's, that's really accurate. I mean, through all of, there have been certain things that have maybe slowed or quelled but overall the economy has continued to hum, which is mind boggling to everybody that interest rates and the fed funds rate. Could be so high for so long and your GDP numbers are still growing. That's gross domestic product That's everything that we produce as a country. That's how you measure, recessions or or growth and expansionary times This economy was so hot back in the day that the Fed raised their, their Fed funds rate the fastest that they could, the fastest in 40 years, and our economy is still growing. So that's what they're concerned about, is if they pull back, that it could grow. I mean, we talk about what happens in real estate when interest rates go down, which we are expecting them to go down at some point because that's what the Fed is saying. Right. What happens to mortgage applications when interest rates go down? Everybody starts to think about buying a house. And your interest rates don't have to go from 7 percent to 4%. You'll see mortgage rate applications start ticking up when it goes from 7 percent to 6. 5%, right? And when mortgage rate applica mortgage applications go up, there's more demand for housing. So given the same level of supply, if you have more demand, that means house prices go up. And we've shown this on the show over and over and over again, but the data is clear. Every home builder knows it. That when home, when interest rates go down, home prices go up. When interest rates go down, home prices go up. So, and that's, a microcosm of the entire economy as well, right? When interest rates go down, people have more money in their pockets. At the end of the day, after the end, at the end of the month they have more money, businesses have more money, and things can start to expand. So the Fed is very leery of that, and they're just seeing different measurements. Like, for example, Yesterday or a few days ago, the jobs report was released and the jobs number came in lower than expected. Well, it's just such a weird time for us because what we're all actually rooting for is lower job numbers. Like, when have we said that as an economy? Because what lower job numbers mean is that there's less wage increases for those job numbers. I know it's not popular to say that we don't want wages to increase. When you think about the effect of inflation and CPI, wages going up lead to inflationary times. And so, low job numbers not seeing huge wage increases is actually helping the inflation number come down. So it's just a topsy turvy world that we live in right now. Yeah. Right.

Pablo Gonzalez: 19:26

That's, that, that's what we're, that's definitely not what we want. That's

Gregg Cohen: 19:29

not what we want. We

Pablo Gonzalez: 19:30

want wages to

Gregg Cohen: 19:31

go back to the way things used to be.

Pablo Gonzalez: 19:33

Right. You know what I hear? Do you see, is I hear, like I think we've been saying this message for a while. We've been talking about how. Hey, prices are not going to drop on real estate, right? Because prices are going to continue to rise on real estate. And we know that when interest rates go down, prices are going to go up, right? Like that's been proven. And I think people are starting to understand that. And I think people are, are making a, I don't know if I want to call it a cardinal sin, but it feels like because people know that they're trying to time the market and get everything that they want. It feels like there's a whole bunch of latent demand on the sideline that's waiting, Hey, as soon as interest rates go down, I'm going to jump in so I can get these prices that haven't gone up as much as they used to, but I want to do it at this new rate. And what we continue to say is that once you're doing that, once you are doing, getting greedy when everybody else is greedy. It's going to be too late. Like if you are waiting to buy real estate right now, you're waiting for that interest rate to drop. You're doing what everybody else is doing. You're moving at the pace of the Fed.

Gregg Cohen: 20:44

Yeah. Right. Like,

Pablo Gonzalez: 20:46

like, I think everyone's waiting for the Fed to make this decision to tell them what to do, but I've just never seen a good example of waiting for the government to tell you at what speed you need to move for your business. Right. Like, and, and, and this whole demand that's on the sideline is is, is waiting for this to happen instead of thinking like a not your average investor, instead of thinking, you know what, this idea that the rate's going to go down, I can use this to my advantage. I can get in right now with this price, with this rate, and then wait for the rate to go down and refinance later, as opposed to getting in once the thing starts going crazy again, which is what the Fed is trying to prevent.

Gregg Cohen: 21:26

This is the talking point of this year. It is using this information to set yourself up for success in your real estate portfolio. And it's this knowledge that we're sharing that when interest rates go down, home prices go up, which has been documented, documented over decades. We've shared the data on this, on the show. So whereas it was a few years ago, we talked about the deal was the debt. And I was saying, guys, listen, interest rates were so low. Like you got to lock in right now. You got to buy because interest rates are so low. This is the message for today, which is lock in right now, not because interest rates are so low right now, but because of what happens to pricing. When interest rates come down, you are setting yourself up to buy and own real estate at a lower cost basis today. Because if you believe the data over decades that has shown that when interest rates go down, home prices go up, By locking in today at a higher interest rate, you're going to lock in for a lower price. And then, it's not going to cost you much at all just to refinance. So like, this isn't even an idea of like, being fearful or greedy, in my opinion. It's just a lack of understanding. It's a lack of knowledge. Because in other countries, you don't have loans in place that you can just refinance without penalty.

Pablo Gonzalez: 22:45

Yeah.

Gregg Cohen: 22:45

In other countries, it costs you, you can't refinance, you have prepayment penalties. So like you really do, I don't ever believe in timing the market in real estate, to be quite honest. And when it comes to single family buy and hold, but in other countries, you would have more of an incentive to do that just because the debt is so less favorable in other countries. Here in this country, you can buy it. The interest rate's higher today than you want, but all you do is you just refinance. In six months, a year, two years. But now you probably save 10 grand, 20 grand, 30 grand, 50 grand of equity of actual price, right? Of actual price. Yeah.

Pablo Gonzalez: 23:23

It makes me think two things, GC. It makes me think we're so conditioned in other asset classes to buy the dip.

Gregg Cohen: 23:29

Right.

Pablo Gonzalez: 23:29

And that. Like it perverses our mentality for real estate because there's no dip in real estate There's no like stable moments And then it goes up at faster rates and to me the equivalent of a dip in real estate is when interest rates are high And where prices are because the moment that interest rates go low, it's gonna rise, right? So like to me the equivalent of buying the dip in real estate is by right now when interest rates are high So that you can refinance the dip. Yeah, right of interest rates

Gregg Cohen: 23:56

I like that and the other

Pablo Gonzalez: 23:58

part that I think about is like Unlike other asset classes, real estate is uniquely positioned in the sense that if what you're worried about is inflation, you buy real estate. Yeah, exactly. Right? So like, why wouldn't you be, why wouldn't you be like making this move right now? Why, why are people not having the clarity of mind of understanding that, listen, If the Fed is worried about something, you probably want to be worried about it too. It's inflation, and therefore, you want to be investing in asset classes that have proven to mitigate your exposure to inflation, and also actually profit from it, which is what you do when you lock in debt at a certain at a certain dollar value that's gonna, that's gonna perform well over time for yourself. And then B, The dip for when you buy in real estate is when you buy at a certain price point with higher interest rates Because what's gonna dip is the interest rate and as the price continues to go up It's interesting you refinance there and you're locking that in gosh. I like that like

Gregg Cohen: 24:55

the You know the change in the perspective with what what is buying the dip mean in real estate, dude? I think you're on to something right? I like that

Pablo Gonzalez: 25:04

Anyways that being said we're gonna move on to the Dave Ramsey thing but The place that you go to buy the dip right now in real estate is chat with JWB. com folks here at JWB. We'll be able to talk you through what it looks like to get into a property right now at these interest rates and what it looks like as it ages over time and you get to refinance and you get to lock in this equity for right now as the prices go up. And then change your rate later. And I think there's a move that we're, effectively recommending to people. So you go to chat with JWB. com or like Cody put in the chat, you should an email to Cody at JWB companies. com. Love it. Well done, brother. Well done. I think we got some Q& A right here real quick. Let's do it. I think the first question was, did your hair get darker in Scotland?

Gregg Cohen: 25:50

Is that, is that really a question? I

Pablo Gonzalez: 25:52

mean, that was a question in the chat. That

Gregg Cohen: 25:54

was a question. I feel like it's just getting longer. My gray's still there. Don't worry. Still a gray. Still a gray. Don't worry. Don't worry. Hey, there's no justice in the world. for men going on here. I rock it loud and proud.

Pablo Gonzalez: 26:04

All right. Uh, Kathy said, saying, Hey guys, happy Tuesday. I have a question about tenants. I heard that there is chaos with tenants coming into rentals and not paying rent and not moving out. That's a question.

Gregg Cohen: 26:13

Okay. Well, Kathy, I love the question. Thank you for being here. I think I'll give kind of the big picture answer, which is this comes down to your choice for your team that's supporting your investments and specifically your property management team. So, that's why when we talk about how to make an investment decision, Most investors just make decisions on the property. What I recommend is starting with the team first and doing your due diligence on the team, that property management team specifically. Then when you find that team that you love, that is worthy of controlling and growing your funds for you. Then you go to the market and you find the market they're operating in. Make sure that market makes sense. And then thirdly, you go to, to the property. So if you are seeing that or hearing that in your circles or in your personal experience, I would first look and see, do you have the right team supporting you? I can tell you within our organization, we absolutely do not see chaos. With residents moving in, moving out or, or anything along those lines, we collect 98 percent of rents. We have, a lease renewal rate of over 80%, which I'm a little scared to share with you guys because I don't want you to hold us to that standard. That's the only time we've ever been at 80%. 80 percent and there's no other property management company that I know of anywhere near that.

Pablo Gonzalez: 27:28

to being at 70 percent plus.

Gregg Cohen: 27:29

Thank you. Yes. 70 percent is where we've been for the last, call it three, four, five years. So we sign longer term leases. We sign two and three year leases. And then when those leases come up for renewal, our residents are happy. And dare I say 80 percent of them this year have chosen to renew. And ultimately what that does is it leads to a resident stay of four and a half years on average at JWB. And the reason that impacts you is because you see lower maintenance and vacancy costs when your residents are happy and when they're in your home for four and a half years. So, Kathy, I would encourage you to reach out to my team. It sounds like you have some properties or you're considering it. Reach out to my team and start to do your due diligence on the team. And I think you'll be in a, in a good spot there.

Pablo Gonzalez: 28:54

Yeah, there you go, Kathy. I'm not sure if you're new to the show, Kathy, and if you are, we welcome you and we welcome questions like this. as we know, real estate, there is no national real estate market when it comes to renters and whatnot. What Greg is talking about is they operate 6, 000 homes here in Jacksonville and they report on those numbers and they know their metrics. What I've learned as the newer investor here at the table is that not all teams are built the same. There's a lot of property management companies that don't even know that number and most Importantly, most property companies, what I've learned is they make the most money when they place a tenant and therefore they are, whether, whether they do it outwardly or just like inwardly, when you make the most money, when you're replacing a tenant on tenant placement fees, which I believe you've said, When you're buying property management companies, that's like 50, 60% of the revenue, 25

Gregg Cohen: 29:44

to 50%

Pablo Gonzalez: 29:45

I'm not the numbers guy. There you go. I'm the concept Pablo Curve. Yeah. Yeah, the Pablo Curve. So 25 to 50% of their revenue comes from that. What that means is that they are incentivized to like move people along. Right. That's why they sign one year leases and stuff like that. What I've seen at JWB. in reporting from behind the scenes here for the last four years is that they really are trying to align with folks and understand those metrics that drive ROI for rental property investors. And this idea of like 80 percent renewals is not a coincidence because it's not just that they're giving them a great experience and signing two and three year leases, but I've seen the training and how they, how they, how they talk to their residents. In the sense that the people that drive renewals are tactically reaching out way ahead of time to have the residents informed on like what it's going to cost them to move out or stay and giving them those numbers. They're building their relationship throughout the year, and that's why people stay at JWB homes and continue to pay. So, oh, she's saying she's actively She's looking to start working with JWC. All right, Kathy. Wonderful.

Gregg Cohen: 30:49

Looking forward to serving you. So

Pablo Gonzalez: 30:50

you might be hearing that that's based on other teams performances in whatever market you're looking at, right? So I would just question, question the stats of where that's coming from and how they're driving those metrics.

Gregg Cohen: 30:59

Kathy, your name sounds really familiar. Let me know if, if we've met each other personally or in like a networking group. Your name sounds really familiar, so. And welcome to the show. It's really nice to have you.

Pablo Gonzalez: 31:08

Cool. Jim Kirko, Hall of Fame first baseman. says, Hello, gentlemen. It's your Hall of Fame first baseman here, with my son who just finished his junior year of college. We love the Kirko family. Uh, I want to say you just hit a home run with your buy the dip analysis. Yeah,

Gregg Cohen: 31:22

man.

Pablo Gonzalez: 31:22

Let's go. I love the baseball analysis, but in baseball, by the dip means grabbing your skull and placing a pinch in between your cheek and gums. Thanks for your guidance. Jim, for, for, uh, bringing the baseball analogies. Oh, that's good stuff. Pedro Nacien Pedro Nacienceno says, I'm wondering, how is it that seldom, how is it that seldom when, get a tenant? Sorry. How is it that I seldom get a tenant maintenance request from a JWB properties compared to my non JWB property, which seems to charge me once every couple of months. Not complaining, of course.

Gregg Cohen: 31:54

Well, you know, Pedro, that's how this is designed. We have taken a very strategic approach to how we have built our property management company so that we could create outcomes. That are different than other property management companies. And then we've matched that with just a commitment to wonderful people being on this team who care deeply, who treat our residents like gold. Right. And we understand that at the core of this investment model, we have to make sure we have great resident relationships. And so, it's not a unique thing that you are not getting nickel and dimed. It's not a unique thing that you don't have a lot of maintenance requests. It's not a unique thing that things are just working well for you on the property management front with JWB. That's. This is different. This is different than regular property management. And we started a long time ago and we just said, listen, if we can nail this experience for our owners, we can unlock this asset class for people like Pedro and for everybody here in the audience. And so Pedro, thank you for that question and giving me the opportunity to kind of talk a little bit about that. But you know, that's, this is what investing in rental properties can be. You don't have to be scared that you're going to get those late night phone calls or that you're going to get nickel and dimed, right? It can just work. It can just be easy. So thank you, buddy.

Pablo Gonzalez: 33:17

Thank you, Benham. Listen, we have an awesome community. We've got 84 people on right now. We know that you're essentially giving us like a backhanded testimonial there, man. So we appreciate that. That happens so much on this show. I definitely want to encourage it more cause it's great, but that's really awesome. Thank you. And Kathy says, yeah, you may not fortune. Fantastic. Remember, there you go. Okay. So I just shared the article in the chat. We're going to dive into the topic does your Greg. I love it. That's the topic of the day because you were wondering. And it's this, it's this idea that even the wall street journal is talking about it, right? There is this. generational backlash against Dave Ramsey and Dave Ramsey's advice. And we are not here to throw shade at Dave Ramsey in any way. We're just here to talk about what's going on because This kind of conversation is a conversation that is not foreign to us because there are, there are things that we want to detail out here of like why this is happening and why you don't throw away all the advice, but you also have to like, learn to think for yourself. Hence the name, not your average investor. So basically the article I shared in the chat, if anybody wants to check it out but they're talking about this idea that there is this generational pushback on Dave Ramsey, you go on Tik TOK, there is a ton of videos. Criticizing what Dave Ramsey says and the younger generations, you know, they have a bit of a point, right? Like they are talking about this idea that they've had unique economic challenges Unlike Dave Ramsey had growing up and that maybe he's a little bit out of touch They're talking about the fact that wages haven't really increased on par with pricing for our generation, like it did with Dave Ramsey, for example, I know that today I was talking to my niece. She's graduating college. She's really pumped about finding a job that pays 40 to 50 grand a year. That's what I was pumped to get when I was coming out of college, I had a job that was paying 48 grand a year. And I was really, really excited about it. And at the time I could buy a home with that kind of salary in Miami, which I didn't do. Right. But yeah. You know nowadays that's still a salary home prices have gotten completely different car prices are Completely different right you can buy a Civic for nine grand back then too.

Gregg Cohen: 35:24

We're

Pablo Gonzalez: 35:24

like now it's twenty twenty two thousand dollars, right? They're talking about these economic challenges and what's happening. They're talking about these like real life financial decisions Dave Ramsey seems to bring up a lot of this like you should just eat rice and beans and not buy nine dollar coffees and they're really illustrating this idea that hey man I get it I make my own coffee I'm doing these things it's still not gonna like defense my way all the way to like being able to build an empire like you did and buy a home and do these different types of things they also have complaints about like the cultural and social sensitivity we've learned a lot over the years as the internet has spread That not everybody is treated equal all the time, and that also tends to handicap some folks. And at the end of the day, the big thing, if y'all don't know Dave Ramsey or you don't know what he's about, but it's this idea that Dave Ramsey villainizes debt. He basically says you should not ever have, you shouldn't be in any kind of debt whatsoever and your job is to, before you do anything else, cut down on all of your expenses until you pay off any and all debt, including your student loans, including only buying, only getting maximum 15 year mortgages on a home. A piece of advice that I used to think that I needed to be doing, by the way. Right, like 15 year mortgages. not finance automobiles, not run credit card debt. Right? So these changing attitudes towards debt for the younger generation are one part necessity and one part offense, right? Like of what they need to do. So that's kind of what the article said. Greg. I know that you're not here to like crap on Dave Ramsey, but I do think that you have some, some places where you agree and some places where you agree with Dave Ramsey and his advice.

Gregg Cohen: 37:06

Yeah, yeah, and I was reading through this article and doing a little bit more research, I can really understand the, uh, plight of the younger generation today. I mean, how can you not, you know, and I also understand how important it is to be able to speak to people on their own terms. And when you listen to Dave, Dave's ways is the way, right. that's part of his appeal. He's, he's no nonsense. He tells you like it is. But you can certainly understand how folks don't feel like he's speaking to them and, or don't feel like he's speaking with them. Right. And, you know, I think that there's a lot of good in Dave's advice. I think our, our country overall struggles when it comes to money management and discipline and like, deferred gratification is a very big part of his message. And, and, you know, I think our country struggles with that overall. So I, I, I lean into that type of conversation, but then there's certain parts where I'm like, man, man. If I had listened to Dave Ramsey, I would not be here today. This company wouldn't be here today. Say

Pablo Gonzalez: 38:07

more about that. Just kind of like, say what you mean by that.

Gregg Cohen: 38:09

Yeah, you know, to be able to start JWB, I had to really understand debt. There was no beginning of starting a real estate investment company without using debt because I quickly realized the fundamentals of owning one property. And, you know, I worked really hard to be able to afford that down payment for that one property, but I realized that a business based on this, where I could do so much good in this world, would not be possible unless I could scale. And so debt became something of a tool for me that I knew I had to master And that I could master and that if I could master this, it's like any other tool in my entrepreneurial tool belt. And it was, it's not something to be villainized or demonized. It's not something to go. completely 100 percent into without knowledge because it absolutely can't hurt people. But I knew that I needed to lean in and understand it and surround myself with people who were masters of debt as well. And by doing that, we were able to build an organization now that, you know, has bought and sold 345, 000 homes now and builds 400 properties a year. Each of those costs, you know, a couple hundred thousand dollars to build. You know, the money to do that doesn't come from the bank of JWB it's debt, right? We have debt relationships with all of you as private lenders of JWB. And then of course we have institutional relationships as well. So when I think about myself, I think as a young person, understanding some of the fundamentals of what Dave is talking about is critical. Deferred gratification is one of the things my dad talked to me about so much growing up. And I hear a lot of that in what Dave's messages. And I love that. But where I, you know, I just can't relate to Dave when he talks about how dead is the villain and dead is bad. And that debt, should be avoided at all costs because I've lived a different reality and I've seen not just what I can do when I, when I take the time to master debt, but I see what, you know, 1800 clients are doing and how their lives have been changed. I mean, we've been able to create millionaires just by folks understanding using turnkey rental portfolios and the private lending. dollars that we've been able to return to folks and through those millionaires, they've been able to do wonderful things in their community. And JWB is, you know, we're on the verge of donating our sixth home to a member of this community. It's going to be a JWB resident. you know, so it's hard for me to just lean in and say that, you know, that, that, that is good advice when it comes to, to demonizing debt. It's not, it's not been my reality.

Pablo Gonzalez: 40:53

Yeah. And I think just like Just like you can't paint a generation with a broad brush and just say that these are 9 latte drinking entitled kids. You also can't paint Dave with a broad brush. Yeah. We're getting, we're getting a decent amount of feedback from our community, which is true. Dave is, Dave has basically lived his life and his learned experience has been he took out debt irresponsibly and he paid the price. Right and therefore he thinks that the thing that is most useful for folks is to go out there and villainize debt So that people don't get into that same problem for us. We take a slightly different approach We haven't built as giant a media empire as as Dave Ramsey has built But we villainize lack of education and we really promote nuance and really understanding What you're getting into and what you're getting out of, and what you can get out of it. And, and what are the hurdles, right? That is why we put together the Natural Average Investor's Guide to Passive Investing, where we talk about all the different things that could kill your cash flow and, and like hurt your appreciation and hurt your experience in a, in a. Passive rental property environment And I think that this is the opportunity to go in and just like Instead of like the Fed is doing using a blunt instrument to either bash Dave or not bash Dave Let's take a scalpel and just kind of like talk about what is what is true? And what is it? Mm hmm. I think the first thing that I would talk about is these like economic challenges that Younger generations are really facing this idea that they have faced in the past Stagnant wages for a very, very long time while costs have continued to rise. And whether or not debt is a good instrument or stay away from debt when it comes to that. What do you think about that?

Gregg Cohen: 42:40

Well, I think that's real. It is so much harder today to start your home ownership journey and your real estate portfolio journey today than it was when I started 18 years ago and definitely when Dave started back in the day. So that I totally understand. It's just, it's just real. How do you, how do you shake it any other way? Other than it's much harder today because wages have not risen at the pace of You know, home price and rent prices as far as they what they've risen to me, there's a fundamental miss here, though, and this is something that I would differ on with Dave. It's that, you know, what I quickly understood at age 23, and it was like this light bulb went off for me. It was like, you know, my job. if I am trying to set myself up. My future self, 5, 10, 20 years down the road, my job at that moment at 23 was not to make the most money today. My job was to build an army of income producing assets that got better with time. And that's why I fell in love with single family rental properties. Because there was, there was not many barriers to entry. You could use debt to acquire these assets and they paid for themselves. And I just realized, and we've done numerous shows on this, that when you can buy one property at any price, Whatever age the younger you are and just continue to add to that on a regular routine. Maybe that's one a year Maybe that's one every two years What you're what you're doing is you'll wake up in five years ten years twenty years and you'll look back and you'll see home price appreciation You'll see more cashflow, cash growth portfolio. We talk a lot about that. Your tax savings will get bigger and bigger and bigger every single year. Your principal pay down gets better and better, better every single year. It's like a fine wine. It gets better with time. And so your job, that works with one property, but if you can start as young as possible and fill that portfolio and then just let it do what it does, you're going to set yourself up. for a positional financial strength when you need it down the road. So debt is the only way to do that unless you have this rich family, right? But like most of us don't, right? So debt and mastering debt became one of the most important things for me personally, if I wanted to build this army of income producing assets. So knowing that wages have not kept up with home prices and that it's much harder today because of that, And the value of understanding and mastering smart debt is even more important to me today because that is how you can still get your real estate portfolio started even at a young age. So I think it's totally right. But you know, Dave and I wouldn't agree on this. He would say, stay away from that. I'm thinking mastering smart debt, putting the work into truly understand it is even more important today than when. Dave started many years ago.

Pablo Gonzalez: 45:40

Yeah. You know, just like, just like Dave draws on his own life experience of getting into a whole bunch of trouble with debt and therefore villainizing it. To me, this one hits me at, at my core because I think that I'd made the same mistake. And I thought to myself, you know what? I'm never going to buy another property unless I can get a 15, 15 year mortgage. And unless I can bring like 20 to 50 percent down to, to the table or whatnot. And what I've noticed is that I missed out on a, on a, on a whole lot of appreciation, a whole lot of options that I would have today if I hadn't been seated with that thought in my head of, I should wait to buy real estate instead of buy real estate and wait. And that's why to me, when somebody told me that axiom. Don't wait to buy real estate by real estate and wait that that has I've brought that up a lot Because I think what people miss is the idea that yeah, listen, it's great If you can buy real estate that cash flow is a certain amount today more power to you, right? but if you don't get confused with the fact that like cash flow today is not the same as cash flow tomorrow And as this asset matures over time, it gives you more and more options over time from a refinancing standpoint, from a 1031 standpoint, from all these different things that you can do by having like the amount of equity that this thing creates for you by allowing it to pay for itself over time. And then being able to leverage that equity in your own favor. To me, that's the thing that people are really missing. Especially now, especially in this like high price, high interest rate environment, they're thinking about, man, when can I get in when the condition is optimal for today? When the idea is like, how soon can you get in while the condition is doable for you? That doesn't put you in a precarious situation. So that this stuff can start to compound for you over time. So in that regard, I have a real issue with this idea of like, Hey, stop, wait till you have 200, 000 saved up instead of like the decision that I made, which was I had certain amounts saved up that if I were to buy a house, I wouldn't be buying the house that I really wanted to live in. I would, if I did want to buy the house I wanted to live in, I'd be really, really stretched or I could take that money and put it into a rental property that's immediately paying for itself. Four years ago and I sit here today, the beneficiary of having stacked those chips and I've been able to buy my own house now because I've been able to like do that stuff, right? So to me, this is one of the big, big misses, this idea that stagnant wages versus rising costs. and then telling, In the face of that advice, well, you're just going to have to cut down so much that you can save enough to get into the real estate asset that you want. That's Aaron. Like, I think like, you gotta, you gotta get into real estate as soon as possible. Cause it's the only thing that's going to protect you from staging state stagnant wages and rising costs. I'll give

Gregg Cohen: 48:42

some real numbers your real numbers, if it's okay with you. Right. I was looking at your client ROI report yesterday, and there's 90, 000 of gains that you've been able to make. Right. In your portfolio. And if you had listened to Dave's advice and only bought that property with cash or, that 15 year, you wouldn't have, you wouldn't have bought property number one. Right. And that 90, 000 is a lot more than what would have been accomplished if you were putting it into another asset class as well. So there's a real life example. It's understandable why you don't agree.

Pablo Gonzalez: 49:14

Yep, exactly. So let's go, let's go into the next one, right? So the next one is this idea that they're talking about, They have these real life financial decisions. They have practical needs versus Dave Ramsey's advice. Dave is saying, you know, eat rice and beans only, don't buy 9 coffees, take a bike for 50 miles instead of like having a car or whatnot. Do you think debt plays into into this decision?

Gregg Cohen: 49:39

I was thinking more of just like consumer spending. That's where my head was going into this. Do I think debt plays into this decision? Yeah, I think debt definitely plays into this decision overall. Dave's advice is just no debt, no debt, no debt because he wants max cashflow, right? he is looking for, a way to help our country become financially strong and, you know, the reality is most people in our country are not listening to the show. Most people in our country have a struggle to become, average when it comes to money management. And so I think, when Dave's talking about debt. And how he's villainizing debt. A lot of times he's talking about credit card debt and taking out debt for things that you can't afford that don't go up in value. You know, my definition of smart debt is taking debt on something that pays for itself every single month. That is not expensive. And guess what? 7%, 8 percent for debt is not expensive when you're making 10, 12, sometimes even more. 15, 20 percent as our clients have made over the years. so seven, 8 percent is not expensive debt, especially when it's fixed rate. And then number three, take out debt on an, on an asset that goes up in value over time. I think what Dave's talking about with that and what he's villainizing mainly, is the debt that you take out credit cards to go and buy a big screen TV or take out, that to go and go on vacation. so that being said, he still does not propose taking out debt on real estate and that's where we differ. So anyways, practical needs, like I really liked the message here of living within your means, right? Like that's a, that's a message that does not land well in our country overall, but I wish it would more. So I, really do lean into that. I don't think there's anything wrong with, just, I guess just deferred gratification. Like I, I know, there is, there's something to be said for if you can't afford it, right. living within your means, he talks about rice and beans all the time. I have no problem with eating rice, rice and beans. If I can't, if all I can do is afford to eat rice and beans without taking out debt on going and buying big screen TVs. I'm going to eat some rice and beans until I can afford, you know, something else. So I really do like that advice.

Pablo Gonzalez: 51:51

I do too. I definitely believe in living within your means. To me, when I think about this, it's like, hey, if I live in California, then I probably want to invest in real estate in Jacksonville. Like, like I, I faced that decision, right? Like I'm living in Miami and I'm thinking, how can I get to a point where I can afford a home and invest in real estate? I look to Jacksonville. I look to a lower price market where I can not have to sit down and play at the 500 Bellagio craps table. I can play at the 5 table, in a game that is actually not rigged against me. So, so I think of this idea of living within your means and practical needs as you can definitely look for places to reduce your cost of living. I, you know, leaving Miami to come to Jacksonville to me was crazy to people in my circle, but I knew that I was going to have a really, really hard time. a, you know, a solid financial base in Miami where everything costs twice as much as Jacksonville and I'm surrounded by people that all they ever do is glorify BMWs and Ferraris and Maseratis. So, like, while, like, I'm able to defend that myself, there's still enough that it's a drag on me, you know? So, like, to me, the idea of, like, looking, you know, where you can live within your means is if you're just getting started living in a super high price city where wages don't really keep up with it, you probably want to move to somewhere like a Jacksonville. If you are, if you are somebody that is making a good living in a place like Northern California, but you can't afford a home, investing in a property in Jacksonville, that makes a lot of sense living within your means. I very much believe in this idea of like, Don't be putting nine dollar coffees on your credit card that you can't pay down every single month make your own Folgers at home Or yeah, or however you want to do it But I think there is there is also the other side of the scalpel here where it's You can't play defense your whole life. At some point, you need to carve out a little space for offense. You need to live within your means as much as possible playing defense in a way that you can still have 1%, 2%, 3%, 5 percent of whatever you're doing, no matter how young you are, to be putting into the offense side of your portfolio, the offense side of your portfolio. Where you're, you know, like your future and stuff like that. Right. So like, I think you can only retreat so much. You can't, you can't cut cost yourself to a billion dollar company. It's just like you can't cut cost yourself to actually building an attractive portfolio for you that you're going to be able to retire on later.

Gregg Cohen: 54:26

I love it. It's a, it's a, it's a nuanced message for me, right? It starts out with live within your means. Cause I think that's the baseline. I think that would, that's, that's great advice for everybody. but expand your means, right? Expand your means through knowledge, education, relationships. Debt is a great way to expand your means when used appropriately. And that's kind of the place that Dave would probably not go to.

Pablo Gonzalez: 54:48

Yeah, there you go. All right. And then last but not least, it's, Dave's debt management philosophy where he promotes this like debt snowball method of paying off your lowest balance off first in whatever you have debt in. and then moving on instead of thinking about paying off your lowest interest rate or versus, you know, it's the idea of you're paying down balance versus interest rate and people, financial advisors have like, That's not a good idea. What do you say about that?

Gregg Cohen: 55:16

I love Dave's approach here. I mean, it sounds really similar to the C3X model, which we've showcased on the show multiple times. And if anybody would like to sit down with my team and talk about the C3X model, which is the compound cashflow calculator model, which basically takes your mortgages that you have on your rental properties and we're able to show you how you pay those things off strategically and pay them off faster. You know that we love this debt snowball method that Dave talks about. so I love it. What Dave is talking about is he uses this to eliminate debt. All debt. So he uses this to eliminate consumer debt, right? Credit card debt and things of that nature. So what he does is he says, okay, well these are all of your credit cards. This is all the debt that you have out there. Most people don't have real estate mortgage debt like we're talking about here. So he's talking about everything else. And he's like, his contrarian view is focus on the debt with the lowest payment. First, because it doesn't matter what the interest rate is. Focus on the debt with the lowest end payment first. And he wants you to attack that. And the reason is because when you attack that, it gets paid off quicker. And let's just say that that's 400 a month of that debt right there. Well, once you pay that off, that's another 400 that you now. snowball onto the next highest debt number. And so focusing on that lowest payment rather than lowest interest rate is the contrarian idea that Dave has. And I love it, especially in real estate. That's the same methodology we use to help our clients pay off their debt. Now what's interesting is that if I'm only thinking about my return on investment, the C3X model or the debt snowball method, or whatever you want to call it, When JWB is recommending to clients, to, do that, it's actually not the best return on their investment because if they have an interest rate on their mortgage, that's 5%. What they're doing is they're paying off, they're using their money and earning 5% on it, but they're'cause they're paying off a 5% debt. We know JWB has assets that we sell every day that, you know, earn 9%, 10%. So it's actually not the best return on investment. methodology, but I don't care. Like I'm looking holistically what's best for that client. And for many folks, it's not one size fits all, but for many folks eliminating that debt on their properties after they have their portfolio built, eliminating that debt on their properties sets them up to have the right amount of income that they need as they get towards retirement or whatever life Milestone they have. So yeah, so I'm totally on board with Dave here. I think this is great. And I wish more people would do it.

Pablo Gonzalez: 57:56

Are there moments where it makes more sense to pay down the low the high interest rate thing versus the versus the low balance thing?

Gregg Cohen: 58:03

You know financially from a return on investment perspective It would actually make more sense to do the high interest rate Because you're actually earning a higher return on your money when you're paying off a higher interest rate True. So if cash flow is not a concern for you and you're not trying to get out of debt, then paying the highest interest rate would actually make financial sense. Where Dave is coming from here is that most people are struggling to get out of debt. And so there's a component in the, even though it might not be the best return on investment in real life, it's better to pay off the lowest. For one, because you're paying those debts off. You're freeing up more cashflow, which is what they really need sooner. And then there's just a experience of it. Like a lot of this is like staying in the game and paying off that debt until you get to the finish line. And most people fail there. So like seeing those, when seeing that debt get paid off and it going from 400 a month. to paying that off to now 800 to the next debt. There's a, there's a psychological component, which he, which he likes on the rental property side, it's the same thing. If you really wanted the best return on investment, you, you would probably just do a different asset. You'd you'd invest in a different asset rather than paying the debt off at all. Middle ground would be, you would pay the highest interest rate debt off of, if you're truly going for a better return on your investment. But for most people, you get a portfolio of three, five, 10, 20 properties, You got that set with JWB and the next thing you're thinking of is five years, 10 years, 15 years down the road. What income am I going to have when these things are paid off? So again, you're, you're in income accumulation mode there. And that's why we would recommend the debt snowball as Dave would call it, or C3X as we call

Pablo Gonzalez: 59:46

it. Good stuff. So we're not, we're not that far off.

Gregg Cohen: 59:49

I don't know. I think it's great.

Pablo Gonzalez: 59:50

Like I think you know, we led this thing. It would have been really, really easy to just bash. Dave Ramsey for villainizing debt, because as we know, as real estate investors, we use smart debt to build wealth. But at the end of the day, I think the villain is not that the villain is lack of education. And that's why we wanted to take this nuanced approach, talk about it from what this backlash is, why people are backlashing. And at the end of the day, you know, what, what resonates the most to me is that this might be a generational backlash against Dave Ramsey, but I think that this is not very unsimilar. Like this advice that he's giving, I think it's just like something that is out there, right? And therefore, when I'm trying to tell my friends what I'm doing, investing in real estate and growing this portfolio, and this idea that, cool, yeah, you can be investing in the stock market at these like, six to 7 percent returns or, or, or whatever the returns are. You can continue doing whatever you're doing. I'm choosing this different approach because I don't want to be most vulnerable at my most vulnerable later in life. I want to create this army of income producing properties. Can you say that one more time?

Gregg Cohen: 1:01:00

Vulnerable thing.

Pablo Gonzalez: 1:01:01

Yeah. I, I, what I've seen is a big moment for me was a couple of years ago when I was trying to, Work with my dad in order to expand my real estate portfolio. My dad's in retirement. He's done very very well his whole life and as he as as we were going into I think it was like early 2021, maybe like mid 2022 when like Um, the stock market had taken this dip He told me hey, this isn't really the best time because my cash flow is compressed right now Because the stock market is doing xyz and that's when the thing that really really hit me was this idea that You This philosophy of that ING made so popular in their commercials of like, what's your number? This philosophy of getting to a certain number so that you can then put that number somewhere and siphon cash flow from that number is sets up a retirement that makes you then be beholden to whatever is happening in the market and being able to like live off the cash flow that this can produce In a volatile asset that goes up and down during recessionary times. And when I compare that to the idea of instead having 40, 50, 60 rental properties, right? Even 20 rental properties. And like one being not rented at a time, that percentage of cashflow that I don't have Coming in that I don't live by that I don't get to spend my money on, right? Like when I don't want to be making money at the time when I'm not in my active income creating time That feels Like a situation where not only is my cash flow more stable But also what we talked about this idea that I can refinance this idea that like Ken Moline I can take a reverse mortgage It gives me more options while that number that I had saved up for I'm now gonna get advice of saying you can't touch that Thing now, you can't be risky with that money. You can't continue to grow that so what I noticed was that if you are living your life by this idea of Saving up enough money to then live off of that is invested in assets that go up and down while you're in retirement. You are more vulnerable at the time in your life when you no longer want to be working on your active income, when you just want to be living your life in retirement, when you're at your most vulnerable. So I see, I don't know, I feel like I've https: otter. ai if you build a portfolio of rental income properties, then you stand a position of power at your most vulnerable. When you're older, when you don't have the energy to work, you don't want to be doing it. You don't want to be out there, taking on side jobs. Whereas If I'm just beholden to like having something in a, in a very liquid asset that goes up and down much more forcefully, I think I'm going to live longer. I don't think that I'm going to retire at 68 and like only live to 80. I think there's a really high chance that people of our age live to about a hundred and I don't want to be more vulnerable when I'm in my most vulnerable.

Gregg Cohen: 1:03:59

you've said a couple of things here on this show that are just like, I just immediately related to, they struck a chord for me and they're great, hot takes by the way, by the dip and you know, you know, uh, invest in real estate. So you're not vulnerable when you're most vulnerable. Yeah. You know,

Pablo Gonzalez: 1:04:16

I agree, Matt, by the way, Jim Kirko agrees. He says his takeaways from the show are by the dip, understanding that this is a different philosophy for real estate. And two, you cannot defense your way to financial freedom. Thanks guy. I love today's session.

Gregg Cohen: 1:04:27

We love you too, Jim and your son. It's awesome. You guys watch the show together, man.

Pablo Gonzalez: 1:04:30

All right. So I think that's it, right? That's a great time. If you don't want to be most vulnerable, you're most vulnerable. Start, start building that income producing portfolio of assets in real estate with JWB is a great option. Go to chat with JWB. com shoot Cody and email at Cody at JWB companies. com. She can help you through that. Start that conversation so that you're not just trying to catch up later on in life. Anything else, GC? What do we got coming up next week, man?

Gregg Cohen: 1:04:57

Uh, I didn't take a look, actually. You know what I do now. I just show up like five minutes before. You just show up.

Pablo Gonzalez: 1:05:03

Are we, are we unveiling a new, a new tool next week? Are we? Let's check

Gregg Cohen: 1:05:07

the dates. Let's see. Is that?

Pablo Gonzalez: 1:05:09

No, no. I think we're probably going to do some more of these Not Your Average Insights next week. Well,

Gregg Cohen: 1:05:13

I don't know. Well, you got to show up and find out. I'm not quite sure.

Pablo Gonzalez: 1:05:18

Had a great audience today. Had some great names that we don't see all the time. Kelly came back. Hadn't seen her in a while. By the way, Sergio Prento out there. Go Gators. Go Gators. So GC is now Gray Cohen. Looking good.

Gregg Cohen: 1:05:27

Great show, guys. That's apropos.

Pablo Gonzalez: 1:05:30

Yeah. We had Kelly come back. Good to see you, Kelly. We saw Jim on the show. We had some new friends today. That pitched in your friend from fortune builders was here. Oh, yeah. Cathy Cepeda. Yeah, Cathy Cepeda We really can't do this show without you the fact that you all show up here to take an hour of your day on Tuesdays To spend time with us add texture to the show Create better questions and context and give us this feedback of like what really really resonates to help us help more people Through education is what this thing is all about Hope to see you next Tuesday. Until then, do you see any little pieces of advice? Don't be average. See you next week. See ya.