| can't do a video.
I haven't shaved
in like three days.
Oh, hey.
Hey everyone.
Clayton here.
I hope to heck that you're
staying safe and trying
to avoid all the conspiracy
theories out there.
I know the world has gone crazy
in the middle of this crisis.
Italians are singing from their
balconies while on a lock down.
[SINGING]
A hamster is on TikTok
giving out health advice,
and a woman is shopping at
Costco wearing a snorkel
and face mask.
My god this woman is
walking around Costco
in her snorkeling mask.
People have lost their minds.
The Dow dropped another
3,000 points last night.
Second worst day
ever with the Dow
plunging nearly 3,000 points.
The stock market saw one of
its worst days in years Monday.
Worries about inflation
and interest rates
sent investors
running for the doors.
What I really want
to emphasize is,
this has been a bad two days,
8 and 1/2 percent in two days
is a real day.
There are many industries that
are truly on the ropes here.
And I expect them to remain
on the ropes for a long time
unless they fall
flat on the canvas.
We've all lost our
collective minds.
[MUSIC PLAYING]
But when it comes
to our investments,
we can't lose our heads.
And my portfolio right
now is doing just fine
and it will continue to do so.
So I want to help you build
a nearly recession proof
investing strategy, especially
if you're just starting out.
Because if you lay
this groundwork now,
you won't have to worry
about the stock market
plummeting 3,000 points.
Or a woman in a snorkel
buying toilet paper at Costco.
First, I want to get
this out of the way,
because whenever
I post about how
I'm doing just fine
with real estate,
I got a lot of
people saying, yeah,
but when stocks go down
that'll affect real estate.
Don't you remember 2008?
But these people
don't own real estate,
and they don't know what
they're talking about.
So bottom line, it's
totally incorrect.
And by the way the data shows
that drops in the stock market
have almost no effect
on home prices.
In fact home prices right
now during this crisis
are right where they were
before this woman started
wearing a snorkel at Costco.
People have lost their minds.
What's important to
remember about real estate
is there is no such thing
as one real estate market.
Remember that what happens in
crazy California, the least
landlord friendly state
in the country, a place
I'd never invest--
[INTERPOSING VOICES]
I'm only saying that
because please stop!
It hurts!
Has no relationship to Texas or
Tennessee, places I do invest.
Don't mess with Texas.
When people want to wax poetic
about what happened in 2008,
people say, remember the
housing collapse and the bubble?
As if there was one
giant bubble that burst.
It didn't.
In fact, people who invested
in places that I teach
them to invest did just fine.
And they saw virtually no dip
in their value or their rent
from their tenants.
People that had overpriced high
rise condos in Miami got hurt,
but those aren't
the places I invest.
So what I'm saying is that
real estate will always
be driven by location,
location, location.
And I know it's a
cliche at this point.
But guess what?
Cliches are always
rooted in truth,
because housing prices
and vacancy rates
are driven by employment, supply
and demand, crime rates, et
cetera.
Side note, also what these fans
of reminding us about the 2008
collapse forget is that I don't
care about real estate values.
I care about cash flow.
So if the value of
my rental property
goes down a little
bit, I don't care.
Because the tenant is
still paying me rent.
I get the tax benefits
of the property.
I'm holding this property
for the rest of my life.
So if I bought the
duplex for $300,000
and it drops to
$290,000 in value
for a short period of time?
Doesn't do anything
to me at all.
Why?
Because the two tenants in
either side of this duplex
are still paying me $3,000
a month in cash flow.
And in two years when
that duplex is now
valued at $320,000, I
also don't care too much.
Also, another point about
2008 that anybody with a pulse
could get a mortgage
on an overpriced house.
Many people didn't
even have jobs
and could get these mortgages.
Those were called ninja loans.
Ninja loans were
no income, no job.
Now I don't know if you're
following the data here,
but today it's very
hard to get a mortgage,
and the foreclosure
rate has plummeted.
That means 2008
is not like 2020.
All right, side note over.
All right, let's take
an espresso break.
All that karate
really tired me out.
And go ahead and
hit that like button
while you're taking a break.
We've got a lot
more to get to here.
Oh, that's intense.
OK, break over.
All right, back to real estate
before we get to stocks.
The next thing I want to
mention about real estate,
and this is for all
of my realtor friends
right now that are watching.
Real estate values are insanely
influenced by mortgage rates.
And I don't know if you
saw the news lately,
but the Federal Reserve cut
rates twice in the last week.
Now rates are at 0.
0.
When rates go this
low people buy houses.
And that's exactly what's
happening right now.
I mean, we have a woman
wearing a snorkel,
and still people
are buying homes.
People have lost their minds.
It's basically like getting free
money from a bank to invest in.
It's amazing.
Why wouldn't you take a
bank up on this leverage?
Now let's talk about stocks.
I have almost nothing
in the stock market.
I don't invest in paper
assets, and here's why.
If you invest in
S&P 500 index fund
you have to own the bad, the
very bad, the disastrous.
This [INAUDIBLE] be easy
to identify winners,
why own all the losers?
The stock market is built for
Wall Street and day traders.
Not for the average investor.
In the past week entire 401k
plans have been cut in half.
I've gotten emails
from people who told me
they lost 75% of
their portfolio,
and they want to start
investing in real estate.
I hear you my friend.
I did the same thing
a number of years ago.
The stocks that
I do buy, though,
are companies that we
can't live without.
It's just like my
real estate strategy.
People will always
need a place to live.
So I invest in real estate.
With stocks I
invest in companies
that supply us with
goods and services
that we can't live without.
Also, invest in
companies that can
weather the coronavirus storm
without any government help.
The first thing
I'd be checking is
to look for companies that
have a lot of cash that
are going to be needed after
the illness is conquered.
The second thing
that I would look for
is to say, all right, which
companies have good dividends?
And they have decent
cash flows that I
think can weather this
storm and get through it?
Side note, now I'm not telling
you which stocks to buy.
But I am using Apple
as an example here.
The government is not
going to bail them out,
and they don't need to
be bailed out by anybody.
They have over $400
billion in the bank saved.
They're the most profitable
company in the world.
I think they're going to be OK.
And guess what?
I'm pretty sure I'm going to
be buying a new iPad Pro when
it comes out.
There was some leaked code
just today about that,
and I know that the new
iPad Pro is coming soon.
So I'm going to get that and
probably a new Apple Watch.
All right, side note over.
So where do stocks go from here?
I don't know, and no one does.
Yesterday, though, one
of those circuit breakers
tripped again on Wall Street.
It halted trading because
the Dow dropped like a rock.
And frankly I think
it's pretty darn fishy.
Don't you?
It seems pretty rigged
for Wall Street.
One day it dropped 1,700
points the next day
it's up 1,800 points.
Then it goes down 3,000
points, then it's back up.
Something is fishy
as hell to me.
Give me back that
fillet or fish.
Give me that fish.
That's why I like investing
in tangible assets.
So what I plan to do
in 2020 and beyond
is continue doing what works.
I'm going to continue
buying real estate.
Yesterday, on the same day that
the Dow dropped 3,000 points,
I got a new tenant in one
of my rental properties.
That's the tale of two
different asset classes.
The property manager
e-mailed us a new lease,
the tenant is a nurse
at the local hospital.
Those are the types of tenants
that live in my properties.
They work stable jobs
that are in high demand.
Rents on my properties
are very stable,
and many of the
properties that I
have tenants in who
have been there,
they've been there
over five years.
And they're not going anywhere.
And I'll also buy a
little bit of stocks
and gold and precious metals.
That's what I'll do.
But this makes up a very
small portion of my portfolio.
Also I keep cash so that
I can pounce on big deals
when I see them.
And also to have a little
bit of a safety fund
to protect myself if I need it.
I keep that in a high
interest savings account,
and I have a link below
to the account that I
use with high interest savings.
So it.
That's my recession proof plan.
It's been tried and true
for me, and I have no plans
to do something drastic.
I'm also not buying anything
crazy like cryptocurrencies
or speculative stocks.
That's a bad one.
That's like 2007.
I know.
I wish it weren't so.
We saw how that
disaster went last week.
I'd love to hear what your
recession strategy is.
Drop me a comment,
and subscribe.
Also if you do want to get
one free stock valued up
to $1,400 totally
free, you can sign up
for [? Weevil ?] which will
give you that free stock.
It's like getting free money.
Even if you do nothing else
with that account, and that link
is below to grab your
free stock right below.
We'll see you next
time, everyone.
[INAUDIBLE]
Oh, that's intense.
I can't do a video I haven't
shaved in like three days.
Oh, hey.
I can't do a video, I haven't
shaved in like three days.
Oh, hey.
Oh my god.
This woman is walking around
Costco in her snorkeling mask.
People have lost their minds.
