Outsmarting Inflation: Tips and Techniques for Surviving High Prices | Ep. 232

Intro/Outro: You know what it is? That's right. It's time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears. It's the Money Talk with Tiff podcast.

Tiffany Grant: Hey everyone, I'm super excited because I have Bronson Hill on the line. Now, Bronson's here to talk to us about inflation, which is a huge but. Buzzword nowadays. Um, and so I just wanted to dig into it and then just think about ways that we can use this to our advantage. So, hey Bronson, how are you?

Bronson Hill: Hey Tiffany.

Really excited to be here. Love talking about ways to, uh, you know, profit from, uh, challenges and opportunities. So I think there's a lot of people interested in talking about inflation and investing and, and how we can actually do well during this time.

Tiffany Grant: Yes, this is very timely. So let's just start. With first explaining what inflation is, just in case we have some audience members that aren't sure what that word even means.

Bronson Hill: Yeah, that's a good question. Yeah. So, um, inflation really just means we're seeing, I think everybody understands that, hey, I'm going to the supermarket and things are costing more, right? The stuff that I bought at Chipotle, That was, you know, $7 for a chicken burrito is now 10 50 or whatever. That's, it's, it's just inflation, just things are costing more.

Now inflation is generally caused by one of two things. It's either caused by, uh, printing more money or creating more currency. A lot, they don't even actually print money. They just add zeros and ones on a computer screen, the Federal Reserve, and it adds more currency or they send checks out, this type of stuff.

So when there's more. Currency available. There's the same number of goods that are out there, right? So if there's only so much, uh, services and goods that are available, the more currency you create, the more everything costs. Um, so that's one way to create inflation. The other way is to reduce the amount of goods and services that are out there, which we saw really during covid, right?

People stopped going to work. They stopped, you know, certain things. There's a lot of supply chain issues that have come up. So you basically, now you have a situation where, um, you have way more. Currency. Um, you know, there's actually a 40% increase in the amount of currency over a two year period, which is just kind of hard to believe, right?

That all this new currency was created between 2020 and 2022, and you have less goods and services because of covid. So it creates, that's just the recipe for just sustained perpetual inflation, and that's why we're seeing it.

Tiffany Grant: Yeah. So we just had the perfect storm going on.

Bronson Hill: Yeah, yeah. Really we did. And, uh, it's, it's, you know, and, and I'm sure any, and so I guess everybody hopefully can understand, uh, as prices are rising and we've seen it, you know, over the last, uh, over a hundred years, since 1913, uh, was the year the Federal Reserve is created.

We didn't actually have a, a central bank for, uh, for a long time in the us but they have, um, You know, the dollar has lost its purchasing power at 99%. So stuff that cost, uh, you know, a penny over a hundred years ago is now a dollar. And it's not just because things just have to go up. It's because of this continual creation of new currency.

Tiffany Grant: Very, very interesting. So hopefully that explains, um, inflation to our audience. But now that we know what inflation is and we know that we're currently living in high inflation times, what are some ways that we could take advantage of this, um, situation to where it's not just killing us, we can actually mix.

The money from it.

Bronson Hill: Yeah. So it's always interesting and anything we see that's a challenge in, uh, you know, our lives or something that we face, you know, obviously when we're filling up at the pump and it's costing, you know, a hundred dollars where it used to cost 40 bucks or whatever, we're seeing these type of things, um, you know, that's where we feel the pain of it.

But there are ways to actually get on the other side of the equation where you actually can, uh, use it to your, to your advantage. So how would you do that? Uh, well actually wrote an ebook about this on my website. I can kinda give you some details about it later. But basically it talks about, um, you know, when we can actually own assets that, uh, produce cash or they just have perpetual value no matter how much currency is created.

So, for example, you can invest in oil companies that actually go and get more oil outta the ground. And so instead of, you know, when gas prices go up, it's actually a positive for you rather than a negative, right? So then you're actually on the other side of that equation. Another way. Is through, uh, buying a business or buying real estate.

So if I own real estate, there's actually a couple advantages there. Um, by owning real estate, typically I have, uh, especially on single family houses, many people have a debt that's 3%, 4% or or less, and it's for 30 years now, inflation officially. At least at the time of recording this is, uh, six or 7%.

But, um, you know, it actually, in my opinion, I think it's actually closer to 12 to 15% or higher just because they don't really report things necessarily correctly. And if, and if people knew inflation was 10 or 15%, they would. Probably a little more freak out. And so they actually, that even just some of the integrity and the reporting isn't as good.

But one of the advantages is if you can borrow at a low rate, so again, I can buy a house at a lower rate for a long period of time. There's a few advantages there, right? Because if I buy a house, I only put 10 or 20% down. The house appreciates over time. Let's say it appreciates 10 or 20%. Well, I haven't had a 2010 or 20% increase in the value of how much I invested.

I've actually had a 100% increase, right? Because I used leverage. I used other people's money. I used a loan to be able to buy this, right? So when you're able to get debt at a lower long-term fixed rate and be able to buy an asset that you know will be worth more in the future, um, you actually get to benefit from the rise in prices exponentially.

Right. So that's a big advantage of real estate and things like that. And also when you're paying it off in future dollars, those dollars are actually worth less, right? Because of inflation. Cuz they keep creating more and more and more currency. So if you, hey, would you rather pay off this, whatever debt or bill now, or would you rather pay it off in 5, 10, 20 years?

I'd always take the longer, uh, you a longer way because, um, the dollars will actually be worth less at that point.

Tiffany Grant: Hmm. Yeah, that's a very interesting take. Um, and I completely agree. I mean, I bought my house in what, 2017 and then I just refinanced when, right before they started raising rates. Yeah. Um, and so, you know, my, my interest rate is like 3.75 or something right now, so it's.

Super low. Um, but now that they're starting to raise rates, you know, with the Federal Reserve raising rates and stuff, is it still beneficial to go ahead and lock that in?

Bronson Hill: Um, you know, right now, at least when, as we're recording this, rates are a bit higher. Um, but I still think there are opportunities out there.

It's just you have to find deals that make sense for you. Um, you know, one thing that we're seeing, you know, we have our businesses, we have, uh, multifamily apartments. We've got about 2000 units mostly in Florida and Georgia. And in my opinion on this, and we look not only at real estate or specific, you know, assets of what, what's happening in oil and gas or what's happening in real estate.

We're looking at what's happening in the overall economy and what's happening and where are things headed. So, uh, my opinion on this is that rates are, obviously, they, they've, they've increased very, very sharply. It's slowed down the real estate market. It's slowed on a lot of things and a lot of lenders that are lending money don't really wanna lend right now, because if I lend at.

6%, all of a sudden the rates rise and now the going rate is 7%. Was a lender, I, I've actually lost money, right? Cuz I, I could have lended it later at a, at a higher rate. So my thought is once rates start to stabilize, meaning they, they stop raising them and they maybe just even tick down just a little bit.

Maybe, uh, you know, uh, 0.25% or half a percent. As far as the interest rate, I think a lot of lenders will come back into real estate. I think a lot of, um, other. Um, investors will come back into real estate. And so, uh, I think it, you know, there, there are deals that make sense in every market. I've just seen a lot of, uh, investors kind of pause right now cause they're like, I don't really know what this looks like.

So I do still think owning assets. I mean, to me there are other assets that we do, such as ATM machines and car washes and oil and gas deals that, um, you know, you're owning real physical assets. So you're outside of Wall Street, which is great. You're able to cash flow with these investments. And there is a built-in inflation hedge.

And what that means is, um, it's not like a bush in the yard that, you know, grows over time. It's, it's basically like an inflation hedge is something that the, the rents will rise over time or the value of the oil or the value of, you know, how much the car wash is charging these things, they rise with inflation, right?

And so again, if you could just get into assets that pay you to hold them. And they have some element of being able to rise with inflation. Either the value of the asset itself or in the value of what the service they provide is able to raise rates over time, then you're gonna be more protected than sitting in cash.

Right? If you're sitting in cash, you're gonna get penalized. Um, if, if inflation really is actually 15%, that means if somebody has a hundred thousand dollars in their retirement or in their savings account, They could be losing $15,000 a year. Now, it doesn't mean they're losing it. It's like it goes down every year, but it means that what that is actually gonna allow you to buy is actually less and less and less.

Tiffany Grant: Well, let's get into that. You kind of segue right into where I want it to go, which is if it's outside of real estate. So you mentioned like ATM machines, car washes. How would we get invested into things like that if, you know, if me or a listener or someone was like, Hey, you know, I really don't wanna buy real estate right now, but what are these other options that you're referring to?

Bronson Hill: Um, yeah, so I think the other options when it comes to, you know, investing and just, you know, that's, that's a question too of, you know, I keep coming back to is, well, what is the opportunity and how can I get involved in this? You know, the first thing that I think, um, a lot of people think is just, well, I don't know how to do that.

I don't know how to invest in ATMs or car washes or to buy, we even do physical precious metals, like, why do you do these certain things? And so, The first, uh, thing that, you know, the first investment we can make really is in our own education. So that's what people are doing. Mm-hmm. When they're listening to your show, right?

They're really getting educated and learning how do I grow my wealth over time? And so one of the best ways to do that is most, you know, mid-size or large cities in the US there are investing meetups or real estate meetups you can go to and you'll learn. And a lot of times, um, I've heard there's actually a great book out there.

Um, that I've read a couple times. It's called Rich Dad, poor Dad. I dunno if you've read this book, Tiffany, but it's, it's one of the best selling personal finance books of all time, and I recommend it to everybody. But basically he talks, uh, the author, uh, talks about, you know, the difference between people that are poor and the people that are wealthy.

A lot of times it's just simply in their vocabulary. It's simply in the words that they're able to use. So if I understand what an asset is, I understand what cash on cash return, cash flow, uh, internal rate of return. I understand. You know, how, you know, my tax, uh, how to reduce taxes and these type of things that really grows my ability to, uh, to, to earn more or to pay less in taxes or to grow wealth.

And so by going to meetups, by going to conferences, by go getting into books, uh, I do audiobooks, shows like yours, podcasts, um, these are all ways that we can really learn to grow our wealth and, um, You know, I, I really think there's a huge correlation between, you know, investing in yourself, um, and then really growing in how you're gonna be able to do it.

Because everything sounds foreign, everything sounds weird until you actually learn about it. And maybe you meet somebody also that has done it, and then you're like, oh, wow, I actually learned from this person. This is how I could do this. And so then everything that was impossible or sounded weird and crazy, it's like, oh, this actually is possible.

And

Tiffany Grant: you know, I did not pay Bronson to say that, but that's exactly what this podcast is all about. It's just to spread ideas because you don't know what you don't know, right? And so somebody's listening to this and they're like, oh, I know what inflation is. Now they can step into those rooms and be like, yeah, and inflation was da da da da da.

You know, and they can start speaking the language and it does matter. Um, you know, when. You step into rooms, or even if, cuz I had a situation where I was selling my car and I, of course knew what I was talking about. I did all my research and everything, and the guy was like, you know, we usually take advantage of people.

And I'm like, I didn't believe that he like actually said that to me. But he did. He was, he was a salesperson. He was like, when people come in here not knowing what they're talking about, not doing their research. We usually can take advantage and we do. And I was just like, wow. So like Bronson just said, make sure you get educated.

And that's what we are here to do. So if there is someone, um, a k a myself, that's like, okay, you know, I, I have all the basics down, you know, financial education, financial literacy, and I'm interested in maybe let's say ATMs or no, let's say a car wash, right? How would we evaluate, um, you know, situations like that?

Because I've even heard people say, you know, laundromats are good. Um, uh, you know, for me I'm kind of on the fence with those cause I'm like, it seems like it's a lot of liability, but Right. Um, you know, laundromats, car washes, ATMs, how would we even start with the research, um, to start one of those, um,

Bronson Hill: endeavors?

Yeah, so I've actually had a book coming out soon. Uh, it's called, uh, fire Yourself and just basically how to develop streams of passive income. And, um, you know, they really, when it comes down to analyzing deals, I feel like real estate deals are usually the easiest to understand initially. And, uh, when it comes to passive investing, uh, a lot of people think, oh, I should be doing real estate, so that means I need to buy a rental house, or I need to buy a vacation rental because, Most people have lived in houses or we're familiar with it, right?

So, oh yeah, I could, I own this one. I could own another one. Right? And in a way, um, you know, it, it, it, I think it's kind of a trap because a lot of times you don't really end up with much cash flow, or if you do, you're putting in a lot of work into it. And, um, even then we undervalue our time. So I meet a, I used to work with a lot of physicians in a previous role where I would do consulting in the medical field and all these people that would buy 1, 2, 3 houses or they'd buy a duplex and they'd be out managing themselves.

And I'd be thinking, man, your time is so much more valuable than you. You know, I mean, if they're making hundreds of dollars an hour at work, they probably shouldn't be the ones that are actually. Managing, you know, this property, right? And so even if somebody's not making, you know, a lot of money, I think, uh, you know, being able to learn how to evaluate deals that, um, You know, really can grow your wealth without taking up more of your time, then it becomes scalable.

Right? And we know people, uh, you know, maybe someone listening is somebody who's ma does really well in their job or in their business, but they're looking to scale their wealth. Well, one of the biggest ways I kind of have these three things that I go over. The first one, it's like a funnel, and it's the largest one is the market, right?

What is the market that this deal is in? And it could be, you know, we buy a lot of multifamily apartments in Jacksonville, Florida, right? So that market has. You know, a growing population, it's got, you know, job growth, income growth, it's landlord and business friendly. There's 1500 new people moving there every month.

There's a lot of things to love about it. Right. So there's a growing market with a lot of things. Well, how does that look in the, at TM space? Are people using, A lot of people don't realize that as digitals were becoming, uh, the number of transactions in the at m space has actually doubled in the last 20 years.

Right, so people don't realize we're becoming more digital. We're also using way more cash. And so, um, you know, what is, so that's the market. Then you look at the second one, it's kind as you come down the funnel is, uh, who's the operator, who's the person that's doing this, who's the team that's doing this?

Is there somebody on the team that's been doing this for five, 10 years or more? And you know, when you talk to them, do they admit, Hey, this is the challenges we've had, or is it, oh, this has always been perfect, or is it their first one they've ever done? So again, those are much more risky if it's the first one they've ever done.

But is it kind of a rinse of repeat and repeat? Like, Hey, we've done this in this market in this way. Here's the challenges we have, here's what we've learned, here's our track record, whatever. That's awesome. Right? And then you get down to the actual deal of, you know, what are the terms like, well, when do I get my money back?

How much is the return? Is there any tax benefits? Things like that. Mm-hmm. So every time, you know, you look at one deal, it kind of can feel a little overwhelming, but once you start looking at a lot of deals, you start to kind of speak the language of, and you realize like, oh, okay. Like I understand like most deals have some risk.

Usually there's one or two primary risks. You say, okay, well if this didn't work out, what's the one or two ways that this, this wouldn't work out? Right? And it's usually comes down to the team not being able to operate it or some risk in the market or something like that. So you have to kind of figure out and say, okay, well based on what I know, does this make sense?

And then again, I'm not gonna stay if I only have. A hundred thousand dollars to invest. I'm not maybe gonna put it all in one deal, right? Maybe I'll spread it out in different deals, or I'll use some diversity just in case. Maybe the at a s goes great, but this real estate doesn't go as well. Or just there's some diversity.

Um, but I think, you know, I really learn, you know, by, by, by reading and by talking to people. But I also learn by doing. And so, um, when you actually start taking action, and it really works best if people have a fair amount to invest and then they can put a little bit into a deal and just get some experience.

Cuz that's when I start paying attention, right? If I actually am invested in something, I'll pay attention to actually what it is.

Tiffany Grant: I love that. I love that. Learn by doing. Yeah. Yeah, definitely. Definitely. So, um, Bronson did not pay me to keep, to tee him up with the book, and I didn't even know that that was a thing.

So when he said that, I don't know if you all heard it in my voice, I was like, oh, like there's a book for this. Um, so tell us more, Bronson, about where we could find this book if we're interested in these passive income ideas and how to get started.

Bronson Hill: Yeah, so we have the, uh, I have the ebook for free at my website@bronsonequity.com.

It's called How to Use Inflation To Your Advantage. I do have a full length book coming out in the next few months, uh, but it'll probably be on Amazon and, you know, elsewhere. But if you do go download my ebook, you'll hear about the book coming up. But yeah, I love connecting with individuals. Uh, we do work with, uh, some investors, uh, to do these type of deals.

So if anybody's interested in joining our investment group, we have. Um, opportunities that come up here and there. And then we also just try to provide just like yourself, a lot of education in the space so people can understand like, how do I analyze a deal or how do I, uh, have financial goals that make sense and how do I really, uh, move forward?

And a lot of it is mindset, right? I know you've done a lot of great things in your life because of having the right mindset. Stan, this is what I'm gonna do and this is how I'm gonna get there. But I've realized that's a big part of it as well.

Tiffany Grant: Awesome. Awesome. And a quick question, in order to join your investment group, do you have to be an accredited investor?

Bronson Hill: Uh, we have some deals for both accredited and non-accredited investors. Excuse me. Um, so we have, um, a variety of deals. Some of them are alternative stuff like ATMs and car washes and stuff like that. It is more accredited only, but we do have some that are for non-accredited as well. So, Uh, that just means, you know, for those aren't familiar, if it depends on your net worth or income.

If somebody's higher net worth or higher income, they're considered accredited. Uh, but, uh, we do have deals for, for both.

Tiffany Grant: Awesome. Awesome. Well, thank you so much, Bronson, for dropping all these gems on the podcast today. Now, if people were interested in finding out more about you or maybe following you on social, how would they find you?

Bronson Hill: Yeah, you can just find me@bronsonequity.com. I'm also on LinkedIn and Facebook and all the socials and, uh, yeah, I, I love connecting with individuals. If anybody has any questions or wants us to talk investing, you can reach out to us on our team. We'd love to be able to connect with you and provide any resources or opportunities we can.

Tiffany Grant: All right, perfect. Well, I will have all of those links in the show notes, so if you're doing something else and multitasking while you're listening, don't worry. Just check the show notes and everything that Bronson said will be there. I'm about to go on his website and download this ebook cuz I'm curious, I don't know about you, but I appreciate you coming on the show today and dropping these gems for the audience and I hope you have a wonderful rest of your day.

Bronson Hill: Thanks so much. I appreciate you having me, Tiffany. All right,

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