How To Protect Wealth During An Economic Crash | The Economic Ninja

Hey, everybody, economic ninja here. I want to answer a question that I have got a hundred times. No joke. My buddy Dylan has been helping me organize a newsletter, and there’s a link down below if you want to join. It’s free. And one of the things of the newsletter is we want to tailor it to everybody’s questions and thoughts to help people, as many people as possible. One of the questions that keep coming up over and over again, how do I protect my wealth during an economic crash? So we’re going to answer that today.

First, to answer that question, I have to tell you, we have to reshape the way you think about wealth and what’s coming in a crash, because most people ask that question out of fear. So we’ve got to annihilate fear. I’ve spoke about this recently, some of the things that I deal with, with fear, and we’ve got to knock it out of our life because we can’t move forward.

We cannot become better versions of ourselves with fear dragging us down. Okay, so one fear, and I see this all the time in real estate, people start to really figure out, oh, my gosh, there are real estate cycles. Real estate is going to crash, or it is already started. I got to get out right now. And they panic. And I ask them, why are you panicking there? Because I’m going to lose money.

And money is just a tool, right, to get you where you want to go and what most people do. And I’ll give you a story of a lady, I don’t know if I told this story the other day, I was speaking with a lady that as I was telling her about how economic cycles work and real estate cycles, her eyes get getting big. She’s starting to realize this is true.

And she goes, I’m not going to have time, enough time. And I’m like, what do you mean, enough time for what? She goes, sell my house. I said, I said, you just said that because a fear was triggered and you were afraid that you were not going to be able to get the maximum out of what your house is worth before it starts to go down. She goes, yeah, that’s exactly right.

I said, the reason for this is because most people’s wealth, the greatest portion of their wealth is held in their home. I said, but you have to realize this when your house goes down by half. And now imagine this, okay, let me explain this. So a lot of people don’t realize this about real estate. And I’m still on the wealth thing, okay? Because we’re going to cover a lot of different topics here.

When the news is quoting that real estate went up, they’re referring to the cheapest properties in the country. Right? Because there are more inexpensive properties around the country than there are expensive ones. Okay, imagine if you could see a heat map of the United States and there were all the homes under 500 grand. They’re all purple. And then you’ve got the ones from 500,000 to a million. Those are blue.

And then you’d see the million plus those are red. You’d look and there’d be more purple, a little bit less blue, and then very few reds around the country. Right? Okay. When they’re talking about prices of homes going up, they’re referring to the purples. Why? Because more people can afford purple colored homes than can afford the blues and the reds. Does that make sense? Even the people that could afford reds and blues actually end up buying purples also because they rent them.

So purple homes, the cheapest homes, are more in demand. Well, we’re at the top of a real estate bubble. It’s popped and it’s coming down. And what’s happening is there’s a handful of people, there’s very few buyers in the market today than there were a few years ago. Okay? That’s why homes are actually going up. I know it sounds crazy. It’s an inverse correlation. Does that make sense? And so what’s happening is those homes are being driven up just a couple of grand, and they’re quoting, they are spouting all of this hype.

Oh, my gosh. Real estate is going up still, in these cities, it’s a nothing burger. Okay, so I was going back to this woman’s conversation. So you’re afraid that you’re going to lose. Let’s say you’ve got a half a million dollars in equity in your home, and during a real estate crash, your home may fall by 50%. Mine fell by 46% from 2005 to 2010. And she goes, yes.

I said, this is what you’re missing. And this is why we need to annihilate the way you think. This is what I do with all my students. I change the way you think because most people do not think like this. 99% of the nation does not think about this. Especially those, when they start thinking, oh, my gosh, or they know the market’s going to crash when your home, your half a million dollar of equity drops to 250,000.

And let’s say you’ve always wanted that house on the hill. Let me ask you this, type one. If you have always felt like what your dream house was or your dream car was just out of grasp. Now I’m talking to people right now that are conscious about their finances. There are people that are just reckless, and they’re like, I don’t care if I pay 50% interest, I’m going to go get it.

And I’m not joking. There are people that have paid in the last 47% interest on an f 150 truck. I’m giving you an example. I’ve actually seen the loan documents. This ain’t a joke. There are people that are reckless. So type one, if you feel you’re pretty good with your money and you’re frugal, right? You’re not cheap, you’re frugal. You live within your means that the house on the hill, the house with the view, the house with the three car, five car, hopefully, in my case, twelve car garage is right out of reach.

It’s always a little too much. That’s not a smart purchase. All right, this is what I’m going to tell you, and this is going to get you guys pumped. Going back to that lady, she has half a million dollars in equity. She’s afraid that it could go down by half. Now she only has 250. I said, you know, what happened to that house on the hill? Those people, they’re extended.

I know it sounds crazy, but most people in our nation are actually extended. It’s shown with the credit card debt, looning. It shows with student loan debt. If you don’t got the money to go to school, just borrow it. And not only that, people are borrowing their living expenses because I got to focus while I go to school, right? And their car debt and all these things, people are extended.

And you’ll see when the water rushes out, everybody’s just sitting in there. Water is just here. Hey, everything’s nice. This is really warm. Water comes out. Oh, crap. I forgot to put my underwear on. And then you’re going to see you swimming naked, right? So you’re left with quarter of a million dollars. And I know this is not exactly what people want to think, and I’m going to talk about some other techniques on how to save your wealth.

But you got to realize, if you got a quarter of a million bucks and that’s yours, sell your house and go buy something bigger, because all the people swimming naked, they don’t got the money or the credit to go buy that expensive house. Now those are hitting the market. There are fewer buyers for the expensive things that goes for homes, for cars. And you all know my dream cars.

I’m getting my 40 gt 40. I’m not going to buy the real one. That’s just crazy. But I’m going to buy a beautifully built one by a company. I’m going to get my 69 Camaro. I’m going to get a Lamborghini hurricane. I know, it’s just so telling you. By the time I get on the freeway, it’ll be done in 1. 8 seconds. So here’s the thing. Just talking 60 miles an hour, 65.

Now let’s switch that. So having grabbing, holding on to everything you’ve got is actually going to cause confusion in your mind. You’ve got to realize, I’ve just got to hold on to more than everybody else because then it’s how you deploy your wealth. Now let’s talk about some common sense stuff. Separating your money and diversification is just being smart. None of this financial advice. I’m not a financial advisor.

Those guys that get paid to give you financial advice, they could have a credit score that’s total crap and not own one piece of equipment or cars or their home, but they can give you financial advice. That’s how the world works. Okay, so I’m not a financial advisor. I am a dude with Brohawk and a dream of absolutely crushing it during this next crash. So diversification is the number one key, right? I’ll give you an example.

You have been hearing me talk about the different investments I’m in. I am invested in gold. A lot of people thought I was nuts. I invest in bitcoin. A lot of more people thought I was really nuts. I have real estate, right? I’ve not that much right now because I’m super light on it because I’ve got a house. But big bragger, I’m super light on it because I’m getting ready for this crash, right? I’ve got cash and then I’ve got trying to think stock portfolio.

Okay, so anyway, let me stay on track. So all of those bags right now, ironically, all of them have risen in the last year and a half, two years because we are moving into a hyperinflation. And that’s what happens to all asset classes. I know it sucks, but it’s just true. But some have ballooned, right? I’ve always got silver, too. Now there are people, when I first started out, creating wealth and wealth is owning something that someone can’t take away.

You know what I mean? Or you own something, you’re liquid. So when I bought my first ounce of silver, I went and hid it under the tree kind of thing at my house. Now I live a lifestyle now that I can’t do that. So I’ve since transferred that into vaults around the country, and we’re about to open some in the world because I’m diversifying those holdings. Right. It’s not like I got a ton of money, but what I’m saying is I’m diversifying.

Okay? Geographically and all that kind of stuff. So when I started, I bought a silver coin. I said, I own this. This is mine, but I got to protect it. So I went and hit it. Okay. That’s one thing. Well, I got all these different piles of stuff, right? All right. So I saw one pile blow up bitcoin, and I saw another pile blow up gold. I’m now taking some of that, and I’m moving it to something else.

I had some cash. I put that into a money market account. I’m yielding a return on that, right? I’ve got all these different piles. And what I do is, as one blows up, because I’m like, bubbles pop, and they reset and they do this. I take profits and I put it into another pile. There is no certainty that, because I’ll give you an example. Lehman Brothers. When Lehman brothers crashed, they shut down the month of September and midway through October.

And even before that, the four or five months leading up to that, stocks were falling off a cliff. Gold and silver, paper prices were falling off a cliff. And let me explain how that worked. You go into any store and try and buy an ounce of silver when the prices are falling, literally. The pawn shop I used to go to had a blanket over there. Like, sorry, it’s not for sale.

Like, will you buy any? Oh, yeah, we’ll buy it. They’ll buy it at the current paper price. But I said, if I want to buy it for an ounce of silver, it was like $8 on paper. I said, hey, I’ll give you $20. Like, oh, yeah, no problem. They’ll sell it to you. But my point being is that it’s different when everything’s crashing. So the stock market was crashing.

Gold and silver was crashing. There wasn’t bitcoin at that point. But every time we’ve seen a big stock market correction, bitcoin and all the cryptocurrencies sell off, okay. And it’s going to get even worse in this next one. I want people to understand this, too, because people are like, you don’t know what you’re talking about. Bitcoin. Okay, copy. Look, if you don’t understand derivatives and how much leverage is in the market.

Especially now with this ETF, a billion dollars just flowed into that market. Just get ready and watch this. Hold my coffee and watch this, because it’s going to all come down. There are bonds, certain bonds with junk status. I’d be scared to death of those. I’m not going to be diving into bonds specific bonds, especially. I’m going to be diving into municipal bonds at the bottom of a crash when I know everything sort of filtered out and we’re at high rates and then we’re on the upswing.

My point being is this. There are so many people in constant fear, and I know what that fear is like. I lived through that in 2012, 2014, when I really started to learn about the monetary system. But over time, experience overtakes that fear, and you start to mellow out and go, you know what? I’ll give an example. A house I bought, when my wife and I bought a house in 2005, I said, this is going to drop by 50%.

I said, but here’s the thing. When it falls, we need to be ready to sell it at a loss, not give it back to the bank. I’m saying, like, if I still owned it, let’s say I put $100,000 on a half a million dollar house and it dropped to 420 grand. Theoretically, I could sell it and walk away with $20,000, right? I told my wife, I said, we have to be ready for that, mentally, to take the loss.

Oh, my gosh, we lost 80 grand. I don’t care, because the house I wanted, that was a million is now 650 grand. So I lost 80 grand over here. But I went and bought that house, and it had a pullback of over 300,000. I hope people are seeing what I’m talking about here. I’m just throwing out math in my head. And you know the ninja with math? It’s all perception, all value, all worth everything.

When it comes to money, wealth is all perception. Sure, that Mona Lisa is super expensive. You ever seen it? Super tiny. Tiny. And size does matter, not only in the art world. And my point being is that you sit there and go, cool. It’s worth a lot of money. I wouldn’t put in my house. Weird lady staring at me. I don’t know. Is she looking at me? Point being is that it’s still got value, right? It’s all perception.

And so there are a lot of people out there right now. They’re, well, who would have ever bought a Saturn? All of a sudden, I’m in a car lot in my mind, and I went to a Saturn dealership. You guys remember what a Saturn was? Holy cow. Point being is that you look at some of these cars, you’re like, I wouldn’t pay crap. Oh, g wagon. Who the heck would buy a lunchbox on wheels and pay like quarter of a million, 350,000.

Okay. To all the g wagon peoples. No, I’m not sorry. My point being is that it’s all perception. So when we’re talking about holding our wealth during a collapse, an economic crash, you’ve got to look at the perception. Here’s the other thing that I’ve been trying to get people ready for for now, almost four years. About to turn four years old. This YouTube channel, it’s all about your attitude, perception.

But know when everybody else is crying and screaming and angry and trying to occupy Wall street, we’re going to be in the background buying up houses, buying up cars, buying up art. You see, the channel will change for sure, and there will be opportunities around every single stinking corner. But if you are stuck in your mind and crying about all the money you lost, I’m talking about how save it through diversification.

But when you can’t stop focusing on. Yeah, but my stock portfolio was a million bucks. Now it’s half like, okay, copy. Maybe you should have taken some profits. Should always take profits. .

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