Disturbing Facts About Your Bank, Many Millennials Will Rent Forever Get Rich Education

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Storing your money at a bank entails more risk than you think. Your deposit is a bank’s liability. Banks must take risks with your money because they don’t charge you fees.
Banks used to have a 10:1 reserve ratio. As of March 2020, all reserve requirements are now eliminated.
Rather than storing lots of money at the bank, borrow lots of money from the bank.
US households own $41T of owner-occupied property—$29T in equity, $12T in debt. The national LTV ratio is 30%, historically low. That’s 70% equity.
Of the five ways real estate pays: one profit source is the market, two are from the tenant’s job, and two come from the government.
Many Millennials plan to rent forever. 63% have nothing saved for a down payment.
The interest-rate lock in effect keeps constraining the available supply of homes.
This forces more homebuilders to build.
Last week, NBC Nightly News covered the rise of build-to-rent communities.
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Show Notes:
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Complete episode transcript:
 
Welcome to GRE! I’m your host, Keith Weinhold. Do you have any idea what banks do with your money? How home equity is like a bank, hot Millennial rental trends, and the proliferation of Build To Rent real estate, today on Get Rich Education!
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Welcome to GRE! From Glens Falls, NY to Klamath Falls, OR and across 188 nations worldwide, the voice of real estate investing since 2014. You’re listening to Get Rich Education. I’m your host, Keith Weinhold.
 
You did not wake up to be mediocre today. So we don’t focus on long-term budgeting here. 
 
Correlating financial betterment chiefly with reducing your expenses is just a race to the bottom. You and your peers would just be racing to the bottom.
 
We know that, instead, yes, arbitrage is created when you  borrow low and invest high. But the ultimate arbitrage - which is the gap or that spread, is when your quality of life vastly exceeds your cost of living. 
 
That’s that gap that you & I pry open ever wider together right here, every week. 
 
Savers lose wealth.
Stock investors maintain wealth.
REIs build wealth.
 
Savers lose wealth because inflation makes holding onto a dollar like a block of ice melting in your hand. 
 
Retail stock investors only MAINTAIN wealth because their 9 to 10% long-term return is worn down to less than nothing with inflation, emotion, taxes, fees, and volatility.
 
And real estate investors BUILD real, durable wealth.  
 
If you have a mentality of trading time for dollars, then you  have a certain way of looking at your life. 
 
If you realize that your investing mission in your life is to build things that pay you to own them, then you have a different way of looking at life. 
 
The resources that you need to build those things are what we cultivate here on this show. 
 
You know something though, by the time that I bought my first rental property, I didn’t have all of that figured out yet. 
 
It really wasn’t until I bought my second property. It was also a fourplex, just like the first one. This second one cost $530,000. And check out how I bought it. 
 
I bought it