Bill Fairman

00:00:02

Hello, everyone. Welcome to the show. Our whole theme. This month has been about financial freedom and we are going to discuss this, to discuss what financial freedom is for each of us, Jonathan, Wendy, and myself, right after this greetings everyone. Bill Wendy, Jonathan. We are Carolina capital management. And thank you so much for joining us on the real estate investor show hard moneyed, real estate investors. What

Wendy Sweet

00:00:48

We've been running up the steps. You can't get your breath.

Bill Fairman

00:00:51

We have been running around a lot. We're getting

Wendy Sweet

00:00:52

Ready to leave

Bill Fairman

00:00:54

For the quest expo. So we're trying to put all our stuff together. So where was I? Who

Wendy Sweet

00:01:00

Are we and where, what we do?

Bill Fairman

00:01:01

We are here, Carolina, capital management. We are lenders in the Southeast for real estate professionals. So if you have a project that you would like us to take a look at, go to Carolina, hardman.com and click on the apply. Now tab, if you are a passive investor, looking for passive returns, click on the accredited investor tab and get all the information you want there. We would also like for you to like share subscribe,

Wendy Sweet

00:01:27

Tell all your friends, hit the bell, the bell liking the bell.

Bill Fairman

00:01:31

Anything else?

Wendy Sweet

00:01:31

That's it Wednesdays with Wendy? Yeah. Yeah.

Bill Fairman

00:01:33

Nope. Nope. Not yet. We have a question and answer thingy on the side or underneath. Oh yeah. If you'd like to talk to us during the show and after the show and leave wonderful comments.

Wendy Sweet

00:01:46

Cause we do monitor it bad ones and we answer questions. So it's yes we do. Yeah.

Bill Fairman

00:01:52

Oh, excuse me. Don't forget about when.

Wendy Sweet

00:01:56

Yeah. Now he says, now you're good. That was

Bill Fairman

00:02:09

Cool. We won't go there. But that was a neat little graphic. Wasn't it? Yeah, it was, it was, as I was saying earlier, we're on our way to

Wendy Sweet

00:02:19

Questex quest

Bill Fairman

00:02:20

Quest expo.

Wendy Sweet

00:02:22

Yeah. Which is in Houston, right?

Bill Fairman

00:02:25

Yes. I was waiting for the final quest expo graphics.

Wendy Sweet

00:02:31

So ETT Smith will be there. I'm excited about that. I really like him. He's he's pretty awesome.

Bill Fairman

00:02:36

Yeah. I got to meet him about five years ago at another conference. He's been, I'm not about that. He a real estate investor for many, many years. So he's not just there because he is a pretty

Wendy Sweet

00:02:44

Face. He's not just a pretty face. He's a smart guy too. That's

Bill Fairman

00:02:47

Awesome. By the way, the Wednesdays with Wendy, you can get on her calendar because she's usually booked up a couple of months in advance and it's gonna be over there in the comment section. So just click it on and get on our calendar there. Yeah. Yeah. So if you haven't got your tickets yet for quest expo, I'm sure you can get 'em at it. It's

Wendy Sweet

00:03:08

Not too

Bill Fairman

00:03:08

Late at, at a discount with using our code. Yeah. But your airplane, ticket's probably gonna be pretty expensive.

Wendy Sweet

00:03:15

Yeah. Unless you're already in Houston because for

Bill Fairman

00:03:17

Close by. Yeah. Or you could drive there. Yeah. All right. So let's get the breaking news.

Wendy Sweet

00:03:44

The, the sky is falling.

Bill Fairman

00:03:45

How many of you have surround sound on your device that you're listening to us? Rob?

Jonathan Davis

00:03:50

I was gonna say, you know,

Wendy Sweet

00:03:51

The sky is falling. Stocks are falling.

Jonathan Davis

00:03:53

The, the fed raises are up the fed raised at 75 bases points. Volker is proud. Vulgar is gives the chairman from the early eighties.

Wendy Sweet

00:04:08

Voker yeah.

Bill Fairman

00:04:09

Yeah.

Wendy Sweet

00:04:09

It's

Bill Fairman

00:04:10

Been a while. So here's to sum up our breaking news rates are high stock market low

Jonathan Davis

00:04:16

To, to, to sum rates are normal. Yeah. Yeah. For answer normal. They're not high higher. They higher than, than the historic low of 1.9. 5%. Yes.

Wendy Sweet

00:04:28

Yes. But, but, and people need to remember that when the fed raises the rates, mortgage rates usually drop a little bit. So,

Jonathan Davis

00:04:37

Well the average just crossed the 6% to 6.02. Oh, I know. Well, I mean, it's up from 1.95. So you're, you're sitting at like, yeah, right at six and you

Bill Fairman

00:04:50

Know, so the fed chairman and this comments and press conference afterwards basically said, we're gonna have another 75 basis points to raise in January. They'll at that point, they're gonna let the data, see where it goes. But frankly,

Wendy Sweet

00:05:11

Prices come down on everything. Yes.

Bill Fairman

00:05:13

But they're looking at 2025 before they think, right. We will be out of a recession, so to speak. They, they keep saying, they don't know whether it's gonna be a recession or not, but it's gonna take until 2 25 to work this through the system. They want to have a higher unemployment rate and they want,

Jonathan Davis

00:05:36

We're not sure if it's a recession, but if it is, that's what we want. It'll be 20, 25 before it's over. Yeah. But we're not saying it's,

Bill Fairman

00:05:43

It's, it's gonna take a while to move all this thing through the system. Yeah. That said they

Wendy Sweet

00:05:47

Want prices to come down. That's bottom

Bill Fairman

00:05:49

Line. I'm pretty old. And I have lived through many, a downturn. I remember before I even got my driver's license sitting in the gas lines, I bought my first house when Jimmy Carter was president.

Jonathan Davis

00:06:02

Oh, I thought they were on steam at that point.

Bill Fairman

00:06:05

But my pretty much my, my whole point to this is it's not the end of the world. You just have to manage your expectations. Gotta

Wendy Sweet

00:06:13

Roll with the changes should

Bill Fairman

00:06:15

Be something. And there, there have been real estate investors when rates are high, the real estate investors, when rates are low, when prices are high and when prices are low, that's the thing about being a real estate investor is that you're a problem solver. That's right. And there's always gonna be problems.

Wendy Sweet

00:06:32

That's right.

Jonathan Davis

00:06:33

Right. I don't know. Sometimes I feel like I'm a problem survivor.

Wendy Sweet

00:06:37

It does feel that way. Sometimes

Bill Fairman

00:06:39

You're a problem creator.

Jonathan Davis

00:06:42

Well,

Bill Fairman

00:06:43

But if you know how to create him, you know how to fix him. Right.

Wendy Sweet

00:06:46

He's just, practicing's putting on practice for himself. That's

Bill Fairman

00:06:48

Right. So our theme this month has been, you know, financial freedom, how to get there. Your

Jonathan Davis

00:06:55

And members go ahead. Before, before we get there, just, just to give a little more backstory or not backstory, a little more data. Like for the inflation numbers we are using inflation is, is measured year over year. So it's, you know, August of this year to August of last year. Well, we didn't cease inflation above 3% until October of 2021. Right? So this October, when we can compare those first inflationary numbers to the year over year, that's gonna give us a better idea. That's gonna give the fed a better idea of what's going on. Right. Is it, is it, is it staying around seven to 8%? Is it nine? Or is it, is it two? You know, and if, if those numbers come out and they're a lot lower, then that that rate probably won't happen. That rate rise won't happen in January, but with what three and a half percent unemployment, 11 million jobs still unfulfilled, you know, everyone's fighting for talent and over, I'll use the word overpay

Wendy Sweet

00:08:03

That is everybody doing for work? I don't understand. Yeah. Where did all the employees go?

Jonathan Davis

00:08:10

Well, and so everyone's fighting for new employees or the, the higher and they're overpaying and now will, and it is

Wendy Sweet

00:08:16

Overpaying. Oh yeah, no doubt.

Jonathan Davis

00:08:17

And that is one of the key ingredients to inflation. Yeah. And that's one of the key ingredients to the inflationary numbers and why they're so high is the, the income, or I guess the, you know, the average salary or monthly, you know, wage has increased dramatically in a short period of time,

Wendy Sweet

00:08:35

$15 to flipping a hamburger. That's pretty strong.

Bill Fairman

00:08:39

Well, to me, it's the energy that's what's causing inflation. Energy is a part of every single piece of our economy. Well,

Jonathan Davis

00:08:50

Gas is going down bill

Wendy Sweet

00:08:52

Way down. That's,

Jonathan Davis

00:08:53

It's not $5 anymore.

Wendy Sweet

00:08:55

I just paid for 4 29 a gallon this morning.

Bill Fairman

00:08:59

But if we continue to try and listen, I'm, I'm in awe of the above, but you can't just cut one off and start another. Right. Because right now the other is not very reliable and it's not inexpensive to operate. Yeah.

Jonathan Davis

00:09:15

Yeah. And the question, I think Scott said, well, wages drop. Yeah. The question is when, cause

Wendy Sweet

00:09:22

You know, as soon as we have an Bundance of employees, well,

Jonathan Davis

00:09:24

It's, it's that, but you know the cause what, what is that doing with those higher wages it's causing the cost of goods to, to go up,

Wendy Sweet

00:09:32

Continue and shipping costs too. I mean, that adds a whole lot to it. That's gonna be hard to reverse that. I

Jonathan Davis

00:09:38

Think, yeah.

Bill Fairman

00:09:39

I disagree with you. Okay. I think love it. I think, I think wage point counterpoint wages, wages are sticky. You can't even say, and you can't once you've you can't put the toothpaste back into two.

Wendy Sweet

00:09:50

Yeah. That's true. However,

Bill Fairman

00:09:51

They can find other ways to be more productive so they don't have to pay as many people. Does that make sense? Like more,

Jonathan Davis

01:10:00

I would agree with you if we, if we passed a law federally that the new minimum wage is $15 an hour, if that had happened, I would agree with you. However, that has not happened. And wages are dependent on where you are. Yeah, no agree. And the federal mandate is seven and a quarter still or the seven and a half. Right. There are at seven. So is it sticky because it's double what the minimum wage requirement is. I'm not sure I'd use the word sticky

Bill Fairman

01:10:33

Again. That's good. It's a lot like real estate it's location.

Wendy Sweet

01:10:38

Yeah. It is location driven.

Bill Fairman

01:10:39

And when, when you, when we end up and what the fed is hoping for is that we have a higher unemployment rate. Sure.

Jonathan Davis

01:10:46

Yeah.

Bill Fairman

01:10:46

Because you're, they're trying to take demand and get rid of it or at least lower it. And that's how they cure their, the inflation. Yeah. That's a sticky

Jonathan Davis

01:10:58

Question. Thank you.

Bill Fairman

01:11:00

But they're trying to do demand destruction right now and that's gonna cause unemployment rates to go up, which means fewer people will have jobs, which means there won't be as high a demand on increasing wages. Yeah.

Jonathan Davis

01:11:16

At

Bill Fairman

01:11:16

That point.

Jonathan Davis

01:11:17

And to clarify, no one, no employer is going to say, oh, now instead of paying you $15 an hour, we're gonna lower you down to 12. Right. Right.

Wendy Sweet

01:11:25

That're just gonna,

Jonathan Davis

01:11:26

That doesn't happen either. You have you a turnover and that person leaves or you help them leave. Right. Yeah. And then you hire in, at a lower

Wendy Sweet

01:11:35

Wage, right?

Jonathan Davis

01:11:36

Yeah. Or the other side of it is the wage appreciation just becomes stagnant. And that way it allows, you know, the cost of goods to catch to lower, which

Wendy Sweet

01:11:48

May be the 20, 25 number might

Jonathan Davis

01:11:50

Be, you know,

Bill Fairman

01:11:51

You get back to contract employees. That's where, where a contract employee started anyway, as wages were going up. And I, I don't wanna single at any particular company, but go ahead. Bank of America used to do that all the time. Yeah. They would eliminate certain departments or eliminate people in departments. They would lower 'em but then they would end up no same people would get jobs with contractors that were doing the same jobs they were doing before. But now they're working with another company who was under contract with bank of America, making less money. Yeah.

Jonathan Davis

01:12:22

Yeah.

Bill Fairman

01:12:23

And they didn't have to pay 'em benefits. And that kind of,

Jonathan Davis

01:12:25

I feel like you just proved my point. Well,

Bill Fairman

01:12:27

He I'm saying wages are sticky, but there's other ways to make 'em less expensive for the

Jonathan Davis

01:12:33

Less, less sticking.

Bill Fairman

01:12:35

Yeah. Less.

Wendy Sweet

01:12:36

I wonder too, what, how higher education is gonna come out on this? You know, because you know, to go to college, now you have to take out a loan. It's pretty sad. But, but it's, it's almost imperative that, that you borrow money to go into college unless your parents have been able to save money for you or you've worked to make that happen

Jonathan Davis

01:12:58

Or you don't

Wendy Sweet

01:12:59

Go that's right. And, and you know, I hate that they're considering this $10,000 or they might have already proved it. Reduction on what's owed on, on college education. I hate that they're doing that. We're teaching people not to be responsible, but I, I, you know, the college college tuition should come down. I don't know that it will, but I do believe there are a lot of people that will be coming out of high school learning trades rather than paying those high college prices.

Bill Fairman

01:13:34

There's a Senator. I hope that it is introducing a bill that wants the colleges to pay half that bill and also be more open about the income that their students, after they graduate are earning and that type of thing. And one of his comments was that he's tired of the universities charging extortion amount for tuition while teaching stupid stuff that has never happen. Like men getting pregnant.

Wendy Sweet

01:14:06

Yeah. That's a good one. Now. I don't

Bill Fairman

01:14:09

Know. I don't know how, how far that will go through, but at at least they're bringing it to the attention. All right. So we we're,

Wendy Sweet

01:14:18

I know we're close. We gotta keep moving.

Bill Fairman

01:14:19

We've been, we've been rattling on about the breaking news now. Yeah. For almost the entire session. Yeah.

Wendy Sweet

01:14:24

We're gonna solve the

Bill Fairman

01:14:25

World's problems. What's financial freedom to you, Jonathan.

Jonathan Davis

01:14:28

What is financial freedom to me, man? That I can, yeah, just up in it is appreciation depreciation and cash flow. Like that is what financial freedom is to me. What do I mean by that? It means I was, I was having a conversation with friend today and you have friends.

Wendy Sweet

01:14:52

I do have friends one at least one.

Jonathan Davis

01:14:54

Yeah. They'll never admit to it. But we were talking about how the credit unions are being saturated with more and more money because now the savings accounts are paying over a percent.

Wendy Sweet

01:15:08

Woo.

Jonathan Davis

01:15:08

What they're paying over percent. Wow.

Wendy Sweet

01:15:10

And

Jonathan Davis

01:15:11

You know, that's one of the things, you know, I think I use the word stupid money, but yeah, no, I, I still I'll keep with it. The stupid money.

Wendy Sweet

01:15:19

Yeah.

Jonathan Davis

01:15:19

Puts all their money there. Cuz I can make 1%. It's been paying 0.2, five before, but now can make

Wendy Sweet

01:15:25

1%. That's right. That's right.

Jonathan Davis

01:15:26

And inflation is how much, like you are losing at an eight, a negative eight one rate ratio. Right. So how about don't do that because you're giving them free money to lend out which well, you know, on the, on the lending side, people love it because that's what we were talking about. Like friend, he, you know, he would use their money to buy multifamily, but I guess I'm getting a long way. Like don't put your money there, put it in an asset that appreciates over time allows you to depreciate on your taxes for capital expenditures and then also gives you cash

Wendy Sweet

01:16:04

Flow. That's right. Like

Jonathan Davis

01:16:05

If you can, if you can cover all of those things, you will outpace inflation. You will outpace the stock market and you will be financially free. Now it's not an easy road. I was having dinner with a, with a guy the other day and we were talking about how expensive it can be, especially right now to own real estate and stay in it and not just sell or, or become a whole seller or

Wendy Sweet

01:16:31

What have you. Yeah. Taxes are up.

Jonathan Davis

01:16:32

Taxes are up all, you know, they've reassessed all the values when you know, they won't be reassess. Well they have to do it every five years. Yeah. It'll be a while. They won't be doing it at any time soon. Yeah. Right. So us taxes are gonna stay high. Yeah. So it is expensive and it is, it is difficult and it's not the easy path, but it is the one that leads to financial freedom.

Wendy Sweet

01:16:52

I agree. I agree. So for me, financial freedom is one sentence. My money working for me instead of me working for money. Yep. That's that's the bottom line and which is really what you're talking about. Yeah. I, I, you know, I will never retire and I let me knock on wood. When I say that I have no intention to ever retire and walk away from working. I enjoy it. You know, I I've got like a serious, you like having you around, well, I, you must want something. So I love real estate. I have a serious passion for real estate. All that entails real estate notes, you know, rentals, self storage, apartments, whatever it is. I love everything about real estate. It's just a passion for me. I don't ever wanna stop learning more and being involved in the art of the deal, which is my favorite part of real estate. I don't ever wanna stop that. But what I do want is the opportunity to say, I don't have to do this if I don't want to. Right. You know, I want my money to work for me. I wanna be able to go to sleep at night and know that I've got money. That's being deposited into my account. You

Jonathan Davis

01:18:09

Know? And, and you mentioned the art of the deal. I mean, that's one of the pieces of financial freedom is that when, when you do have that knowledge base and that drive and that, that determination to do deals and that desire, like you need the space to be able to do so. So part of that freedom is having the space to analyze deals, to look at them, cuz you can't analyze and look at deals and close 'em. If you're out there scrubbing toilets or cleaning up your

Wendy Sweet

01:18:36

Rentals. That's exactly right. So that's exactly right. And you know, a lot of people will say that part of their financial freedom is being able to lead their children a legacy, but they

Jonathan Davis

01:18:46

Can build their own legacy.

Wendy Sweet

01:18:47

I that, and you know what, I think I must be a terrible parent cuz I don't feel that way at all. I mean, sure. I would never want my kids to suffer, but my legacy to them is teaching them what I know, teaching them, what I do and their relationship with Jesus Christ is, you know, the number one legacy I'd love to, to leave with them so that they're always seeking him in what they do. But you know, I don't wanna leave a bucket full of money for them.

Jonathan Davis

01:19:13

We, I go back to, you know, Scott Patton who's, you know, running the show for us. One of the things that he said was, it's a saying, I think in Canada, short sleeve, long sleeve, short sleeve, and you know, the short sleeve is the guys out there working in the fields or, or what have you do a manual labor. And then they're, they, they build a legacy and then their sons become long sleeve. They, you know, work in an office, they get, you know, soft whatev what have you. And then the next generation of short sleeve again, because they had a soft generation prior. Yeah. So yeah. Good point. You want to instill more than more than you wanna hand out dollars to your kids or assets. You want to hand out,

Wendy Sweet

01:19:52

Give more fish and pole,

Jonathan Davis

01:19:53

Give em work ethic and the ability to, to do

Wendy Sweet

01:19:57

Things. That's right.

Bill Fairman

01:19:57

All right. So for me,

Wendy Sweet

02:20:00

We're out of time too

Bill Fairman

02:20:01

Close. Well

Wendy Sweet

02:20:05

That's airport

Bill Fairman

02:20:06

Financial freedom for me is doing what you want with whom you want when you want and not have to worry about where you're doing it. You know what I mean? At the

Wendy Sweet

02:20:18

Bar, you

Bill Fairman

02:20:19

Can go anywhere. You want to go and not have to worry that you're not being able to maintain that same lifestyle. Right. And with real estate, well here right

Jonathan Davis

02:20:29

Now, here's, I've heard transient people say they do that.

Bill Fairman

02:20:33

The, the stock market game right now, if you're a stock market person here's on now that the market is dropping here is the defensive play I'm gonna get into treasuries because the person that loses the least is the winner.

Wendy Sweet

02:20:50

Yeah. Now

Bill Fairman

02:20:51

How is that? How is that investing that is just grasping on to not losing when you're in real estate, you have an asset that continues to go up in value and it's paying you an income. And your whole goal there is to have essentially a balance that increases in value that you can live off of at the same time and keep that same lifestyle. Right. Right. And you wanna do it as passively as possible. So you can do what you want with whom you want when you want and where you want,

Jonathan Davis

02:21:22

You know, just finished up a, a book called mandals. And it's about, was

Bill Fairman

02:21:27

It a look about Dennis?

Jonathan Davis

02:21:28

It was not, you know, it was their actually their last name, not their, not their job, but

Wendy Sweet

02:21:35

What was it called

Jonathan Davis

02:21:36

Again? The mandals. So

Wendy Sweet

02:21:37

The mandals. Yeah, the mandals. Yeah, the

Jonathan Davis

02:21:40

Mandels okay. And it's, it's a dystopian book, very well written around economics. It's a lot of, you know, you get on professors, our characters in the, in the book, but basically it takes you, it's taking you through kind of what we're going through now. And then, you know, extrapolating that to like the worst case scenario. Yeah. Like the, the fall of, you know, our economy. Wow. Which in the book is, you know, because of some external forces as well as internal forces. But the thing that struck me in the book was with 30 and 40% inflation rates that they're, you know, talking about in the book on groceries and what have you, the only winners, or I don't even say you can say winner. The only people who survive at a semi comfortable rate are those who own real estate and those who own energy and those who control the produce. Interesting. Those are the only people who are doing okay. And just, okay. But again,

Wendy Sweet

02:22:45

So I got the chickens and the, the real estate covered. Yeah.

Jonathan Davis

02:22:50

Well, cause you

Bill Fairman

02:22:51

Just need to get the energy part that's right. Figure it out

Wendy Sweet

02:22:54

Really well.

Jonathan Davis

02:22:55

It's, it's a really good book. I've been listening to it on audible. I was actually, I listened to it, a good portion of it driving six hours. And I remember like, it sucks you in so well, it makes you feel how poor and awful things can be. I remember stopping at a gas station after listening to it. And I saw that the gas was like three 90 something, a gallon. I was like, I can't afford this. How am I gonna do this? And they're like, wait, wait, no, I'm, I'm not there. I'm here.

Bill Fairman

02:23:24

I'm not the book. All right. Folks. We were hitting out to. All right. Yeah. We gotta ask the question. Yeah. Our question for this week is would you like

Jonathan Davis

02:23:40

To take yeah. Yeah, sure. So with the stock market in, let's say turmoil cause it's right there. Yeah. Turmoil, tumultuous, tumultuous time is your money management in alignment with your goals? We we'd love to know that. I know a lot of people who have talked we've bill, Wendy, and I we've all talked to people who are moving money out of the stock market, which, you know, I understand, you know, six months ago would've been better, but you know, they feel that way too. Yeah. You know, what, what are, what are your goals? And you know, are you moving money outta stock market? Are you keeping it in? Are you moving into other assets? Which we'd love to know. Yeah.

Bill Fairman

02:24:24

You can't, you can't win when you're trying to time the market. Not too many people do. Right. Same thing with real estate. You don't time real estate. You get in it and you get in it at a price that makes sense for the numbers. Yeah. Same thing with the stock market. It's you get in with the numbers. Make sense. Yeah. But you certainly are gonna have less fluctuations and you're gonna have an asset that continues to grow in value in, in real estate. So folks, I'm gonna switch you over here to nothing about everything about me. Anyway. It was great. Having you on the show. We are Carolina capital management. This was the real estate investors show hard money for real estate investors. Like I said, we're Carolina capital management and we are private lenders in the Southeast for real estate investors. If you have a project you'd like to take us, you'd like for us to look at, go to Carolina, hard money.com and click on the apply. Now tab, if you're a passive investor and you wanna

Jonathan Davis

02:25:25

Get outta the stock

Bill Fairman

02:25:26

Market, looking for passive returns, go to the accredited investor tab. Don't forget to like share, subscribe, hit the bell. Hopefully we'll see you guys in Houston for quest expo this weekend. Don't forget about Wednesdays with Wendy. See you next week.

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