IMMIGRATION-GDP-TAX REVENUE
     Joseph C. Sternber writes, "The problem with old people is that they eventually stop working," and "No workers equals no tax revenue."
     The Department of Homeland Security reports that more than 530,000 people were apprehended at the U.S. southern border in just the first half of 2019.
     The Census Bureau data from 2011-15 shows that immigrants are about 20% more likely than native-born Americans to found new companies.
     In order for the country's economic growth and further expansion to continue, we must finally implement the sensible, merit-based, America First Immigration Plan.  The numbers don't lie, and even though the previous Administrations used demographics and worker participation rates as cover for their excuses and socialism, eventually the current economic expansion will run into unnecessary ceilings if we don't fix the immigration piece of the economy.
     Japan has spent decades in recession and economic purgatory because of an aging population problem, a problem they could have fixed with a better cultural acceptance of immigration.  Germany the same, except for now Chancellor Merkel opened the flood gates not for positive, self-enhancing immigration, but for self-destructive immigration.
    The economic immigration which must happen immediately in the U.S. is the selfish, narcissistic, America First immigration which will provide signification boost to GDP growth.  All CEOs know that revenue cures all ills.  Now, to finally implement the correct plan, the current Administration will have to give CNN more fodder than ever to roll out every politically-incorrect attack.  But, as group psychology studies support, we must implement the hardest parts of what truly needs to be done during periods when the attacks couldn't be any worse.
     The economic environment has never been stronger.  The Wall Street Journal reports that unemployment is at a 50-year low, and there are roughly 1.2 million more job openings now than there are people to fill them.  The black unemployment rate hasn't been this low in generations, and the jobless rate for black women is the lowest on record.  Wages for low-wage workers are rising faster than higher-wage earners, and both at the fastest clips in a decade.  The Hispanic poverty rate in 2017 was the lowest ever recorded.  Now is the time!
     We will soon be Japan unless we can implement a selfish, merit-based system. (You are not allowed to scream for more "asylum seeking refugee" immigration unless you have taken in one of these families to live in your home.  And, if you have, the rest of us are thankful for your incredible generosity.  Please send us stories).
     At the higher end of our economic spectrum, only about 1 in 5 who apply for green cards in any year are awarded resident status.  We must open the gates here.  An immigrant college graduate is 38% likelier to found a business than an immigrant high school graduate.  An immigrant who arrives before turning 20 is 34% likelier to start a company than one who arrives after 35.
     Edward P. Lazear's research shows that immigrants from Israel, Iran, Syria, Lebanon and Greece are 300% more likely to found an incorporated business than native-born Americans.  Economic literature suggests entrepreneurial parents create entrepreneurial children, with the next generation also driving new business.  Entrepreneurial immigrant adults start businesses, and often their kids do also.  Let in the young and educated.  Brain drain the entire globe!
     At the lower end of our economic spectrum, we open the gates for merit-based, most-qualified, most-potential workers coming for opportunities to add value to our country, and themselves. (You are not allowed to scream that this is unfair or discriminatory unless your company first hires 10 new refugee workers and pays them equal wages regardless of their skills or qualifications.  And, if you do, the rest of us are thankful for your generosity.  Please send us stories).
     This enables more legal immigration, which allows these honorable economic migrants to not pretend they are  something else, or to increase the 12 million illegal immigrants.  The demographics of the U.S. demand that we allow these amazing people into our Monopoly game.  They don't want free money, just to be allowed to play in our game.  Because of our fantastic success, we now need them as much as they need us.  What a great problem to have!
     The only other answer is, of course, to radically cut entitlement spending, because the workforce forward is just not there to pay for the Social Security checks, much less Medicare.  But, this will never happen until the big crash, default, disaster occurs.  So, a proactive answer is to view the country with abundance, not scarcity.  View the country as a CEO, and build our workforce intelligently.
     This is easy math.  Remember that math always, eventually, wins.  We can create false narratives, fake news, and whatever silly ideology we wish to waste our time with, but the numbers don't lie.  Now is the time to do it right.  Carpe Diem!  Have a great week!

"So often people are working hard at the wrong thing.  Working on the right thing is probably more important than working hard."  -  Caterina Fake

** Thank you to the WSJ and Forbes for the above statistics and quotations.

RESPONSIBLE COOL CAR INVESTING
Just as some people think the simple real estate strategies we discussed last week are out of their price range or beyond their investment knowledge, buying a cool car is also much simpler and less expensive than we, and our neighbors, think.  And speaking of neighbors, when you bring home your Porsche 911 Turbo, know that they will say you are not being responsible and are likely having a mid-life crisis.  Instead of telling them to worry about their own, boring life, just smile in the knowledge that you are spending way less than they are with their "regular" leases.
     Just as in stock investing and home buying, with cars most of us make a long list of mistakes.  Buying the exotic car is another area where a little education can put us far ahead of the crowd.  The problem is that for most of us, no one has ever explained it to us, so here's how I learned about it many years ago.
     My second year in the investment business, the Wheat First Securities Training Department asked me to travel to Richmond, Virginia, to speak to the new rookie class of financial advisors.  As I crossed the busy street to the Riverfront Plaza high-rise offices, I almost stepped in front of a cool Ferrari being driven by none other than our CEO, Marshall Wishnack.  At the close of my presentation, I enthusiastically said to the new class, "And, to prove the great potential for you in this business, I just saw our CEO zip into the parking garage in a gorgeous, new Ferrari!  This is the greatest business in America!"
     The next day back in the office bullpen I received a phone call from Mr. Wishnack.  I thought for sure I must be getting fired!  Instead he said, "Listen, Martinovich, if you're going to tell the story, make sure you get it right.  It's a Lamborghini!"  He then proceeded to explain the simple economics of responsible cool car investing.  Below is my attempt to pass on his wisdom.
     First, here are some recent results on buying or leasing a new BMW, Mercedes and Audi, all which the neighbors feel are reasonable choices:

1.  The BMW 5-Series selling for $30,846 after 3-years depreciation of 52.6%.
2.  The Mercedes E-Class selling for $34,010 after 3-years depreciation of 49.9%.
3.  The Audi A3 selling for $21,120 after 3-years depreciation of 47.9%.

     Above, we have spent roughly $30,000 plus maintenance and repairs, depending on our arrangements.  Most cars have a continual declining value curve, but higher-end cars may follow a "j-curve" value path.  If we wait three or four, or even a few years more, to purchase these automobiles, many times the bulk of the depreciation has already occurred, and the price will stabilize forward.  We may realize very little decrease in value while we own and enjoy these vehicles, and in special situations we may even experience appreciation in value.
     So, these purchases may, economically, be little different than holding that same capital in the bank at 1/2% interest, and can be brilliant investments when compared to the above "more sensible" purchases.
     For example, a Ferrari 360 Modena purchased in 2004 for $160,000 could be picked up today for $70,000 with very low mileage, and will likely hover around this same price for the next year or two.  Older 308 and 328 Ferrari models which could have been purchased for around $40,000 a few years ago, are now hard to find under $60,000 (the curve turned back up).
     A 2008 Porsche 911 Turbo with 520 horsepower and low mileage can also be picked up for $70,000 with little to zero decrease in value the next few years.  A 2002 Aston Martin Vanquish V-12 (Bond, James Bond) with 460 horsepower can be acquired under $70,000 and enjoyed for very little in depreciation.  We can be patriotic and purchase an awesome American-made 400-horsepower V-10 Dodge Viper for $40,000, and every Saturday ask our spouse, "Are you sure you don't have more errands I can run for you?!"
     Car expert, Doug DeMuro, a few years ago bought a Ferrari 360 Modena to test all of the true expenses.  He paid $86,500 and sold it a year later for $78,000 after driving it for 5,022 fun miles.  He spent $4,629 on repairs and maintenance because he decided to replace the tires and front brakes, along with two oil changes, expenses in the same ball park as the BMW.  He claimed his depreciation would have been less than $5,000 if he took his time on the purchase and sale.
     Neighbors spend $300,000 on a boat, which is an economic hole in the water, while trying to make you feel guilty about spending $10,000 on a Porsche or Aston Martin.  Don't fall for their jealous, misguided opinions.  They know not what they do.
     You work crazy hard, you are a good person, and you deserve to treat yourself to things while not worrying about what the rest of the neighborhood might say.  Now you know how to do it cheaply, responsibly, and less than your neighbors are spending, themselves.  Now someone has told you, and you know, too.  No excuse!
     My son, Cole, and I would start many sunny Saturdays by driving the 7-year old Ferrari 355 Spider to Subway's for an early lunch and then off to do the errands list.  We made it last much longer than necessary. I always thought, "Mr. Wishnack would be proud."
     Have a great week, and send us a great story of your next purchase!

"Yesterday is not ours to recover, but today is ours to win or lose."  -  Michael Rowan

RENTAL PROPERTY MADE SIMPLE
     We all know the Johnsons on Oak Street.  They retired early and seem to take two or three amazing trips a year.  The rumor is "they own property."  We naturally are jealous of their relaxed lifestyle, as we have the mortgage, BMW lease, and credit cards providing our daily panic attacks.  We rationalize that they must have received inheritance from her family, but the truth is that many years ago they bought one rental property, then a few more.  They forewent the spending beyond their means on consumables (Amazon) and depreciating assets (new BMWs), and put this amount into appreciating investments (such as simple real estate).  Now, they have a positive net worth (Assets minus Liabilities) and are not living paycheck to paycheck, which is better than most of the rest of us Americans.
     Keeping it simple today, which it truly is, you can start by purchasing a 3-bedroom, 2-bath renter-friendly home for little down, and at low current fixed mortgage rates.  You can then receive maybe $100-$200 positive net cash flow a month, and thanks to the large interest and depreciation tax write-offs, you will also get a nice check back at tax time (or increase your W-9 allowances at work to get more in your paycheck every two weeks).
     Then, after you feel comfortable with your new knowledge, you can go get a few more.  In the mean time, your monthly mortgage is slowly building equity in the property, and the property value is also growing at a historical-average +4% per year.  Make sense?
     Don't be intimidated by investments, or say you were never good at math.  This truly is easy stuff which only takes a commitment to "Just Do It!"  You will be able to overcome your excuses of bad credit, down payment cash, or "Jersey Shore" is on MtV tonight!
     Once you get started, you will be surprised at all of the expenses you may deduct.  Always remember that the Government designs the tax code to motivate you to do what they want you to do.  The Government wants you to provide affordable, quality rental housing to American citizens, so it makes the tax code beneficial for those who provide this service.
     You may deduct (write-off) expenses in Advertising, Auto and Travel, Cleaning and Maintenance, Commissions, Depreciation, Insurance, Legal and Tax Prep Fees, Management Fees, Mortgage Interest, Points, Repairs, Taxes, and Utilities.  Order online the free IRS Publication 527 and in 3-4 days you will have this well-written, simple description to explain each category.  Remember the JAM VIEWS mantra to do your own taxes and then take them to a professional to review.  At a minimum, you will then understand how it works, and you can maximize the investment even more next year.  Simple stuff.
     Normally this net loss is what they term "passive," so it can only be used to offset other passive income (real estate or from a company in which you own a small part), but the tax laws now, if you handle the property yourself, let you even write this loss off against regular "active income" (your salary).  If your income (MAGI) is under $100k, you can deduct this rental loss up to $25k against regular income, and this deal phases out gradually over $100k.  This makes the reward "doubly-easy."  The IRS gives you an example.  "The rental loss was from the rental of a house Mike owned.  Mike had advertised and rented the house to the current tenant himself.  He also collected the rents, which usually came by mail.  All repairs were either made or contracted out by Mike.  Although the rental loss is from a passive activity, because Mike actively participated in the rental property management he can use the entire $4,000 loss to offset his other income."  What's our excuse now?
     My father, Don, self-taught himself to buy small rental properties by reading the books and attending a few seminars.  I was cheap labor for moving lawns and painting houses in return for Domino's Pizza and, of course, the best motivation, "This is how we pay for our summer Florida vacation!"  When he wouldn't let us go out to dinner, Mom and I would harass him with "Oh, but we have real estate!"  But, he was right.  He and Mom lived a much better life than his civil service income alone would have ever provided.
     I tried to follow his example by never selling our homes when we moved, but by continuing to to own and rent these properties - an easy way to collect a small portfolio of properties.  Beyond nice travel in retirement, the equity in your properties will pay for college educations (refinance and pull the equity out tax free), the ability of one spouse not to work 9-5, and much more freedom and flexibility.
     Teach your teenager to purchase a small house and learn about capitalism.  Instead of going back to work once the kids enter school, build a small portfolio of real estate.
     Don't forget the vacation home which you can rent and still enjoy yourself while building more equity.  Basically, you can personally enjoy the home for 2 weeks a year while allowing other renters to make your mortgage payment throughout the year (see Pub. 527 for these rules also).  We enjoyed a magnificent beach house in the Outer Banks, North Carolina, for many years with a mortgage I would never have been able to cover without allowing others to also enjoy this magical property.
     Stop living paycheck to paycheck.  Stop having a panic attack in the middle of the night over your debt.  Build equity.  Be an owner.

"Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires."  - John Steinbeck

** The above is not legal, tax, or investment advice and you should consult your own professional advisors.

** For more information on Jeff's Books, Blog, and Legal Challenge, please visit www.jeffmartinovich.com.

** To access JAM Views directly please visit jeffreyamartinovich.blogspot.com 

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THREE AMAZING WOMEN
     This week JAM VIEWS honors three amazing women who, unfortunately for us, have left this year to move onto their next big adventure.  We have learned that the fastest way to expand our minds, understand what is possible, and to be inspired for greatness is to study the lives of people who constantly said, "Yes!," and here are three Yes Women.
     As an aside, if you have a break in your schedule this week, please watch the movie, "Darkest Hour."  In the incredible performance as Winston Churchill, Gary Oldman shows us how the most important decisions in the world come down to just ordinary, failed human beings having the courage to do the best they can.  Saving the free world truly came down to one person going against everything that was "realistic" and everyone who was operating from a position of fear.  On a much smaller scale, of course, this dynamic plays out in all of our lives daily.  Can we summon the courage to do the right thing?
     These three women did, and their stories are emblematic of continuing JAM VIEWS themes: perseverance, standing up for what is true, and at all time proclaiming "Why not me?"
     Kathleen Eisbrenner was the very rare female entrepreneur in the energy industry.  She joined El Paso Energy Corp. and worked to solve the problems with efficiently and less-expensively transporting liquefied natural gas (LNG) in order to deliver more energy to our country and to the developing world. The problem was that LNG must be cooled to minus 260 degrees to be transported on ships, and then "re-gasified" at massive onshore terminals that take years to build, face regulatory hurdles, and are cost prohibitive in areas of the developing world.
     So, Ms. Eisbrenner and her team developed technology which allowed the LNG to be re-gasified aboard the ships and then easily piped to shore.  Building on this success, she later became CEO of Exelerate Energy and spread this technology worldwide.  She was also an executive vice president at Royal Dutch Shell and founded NextDecade Corp. which worked to more-efficiently export gas produced in the U.S.
     Tragically, Ms. Eisbrenner, 58, recently died of head injuries from a fall.  I believe many times the universe calls the overachievers early because they are urgently needed for the next challenge.  Yet, we are all thankful for, and much better off because of, her technology and capitalistic drive.
    Unita Blackwell grew up in Mayersville, Mississippi, and after leaving school at 14 she picked cotton and cleaned houses.  Then in 1964, when she was 31, Unita listened to civil rights activists speak at her Baptist church.  When they asked for volunteers to help them fight for voting rights, she stood up [Life "Just Say Yes!" Moment].
     This moment transformed her life and many others as she became a leader in voter-registration drives, even being jailed frequently.  She was elected Mayor of Mayersville, likely the first black woman mayor in Mississippi, ever.  She met President Lyndon Johnson at the White House where he gave her a bottle of whiskey as a souvenir, and she became friends with Shirley MacLaine who took her on a tour of China in 1973.  In 1992, The MacArthur Foundation awarded her a $350,000 Genius grant.
     Wow!  Ms. Blackwell recently passed at age 86, but not before teaching us all to take a stand, to stand up for what we believe is right.  We are all better off for her leadership.
     Rosemary Mariner was an aeronautics student at Purdue University when a visiting airline executive told her that women would never be accepted as airline pilots.  She then knew exactly what she must do.  She did him one better and became the first woman to fly a Navy jet [see "Why Not Me?"].
     Rosemary told the Los Angeles Times, "When I hit a wall, I am going to get under it, over it or around it."  In 1972, Admiral Elmo Zumwalt Jr. (what a great name!) initiated a new program for women to fly Navy aircraft, and Ms. Mariner was one of the first eight women.  She flew 15 different planes, and even landed on aircraft carriers. [Remember those scenes in Top Gun as they attempted to land on carriers?!  Or, have you ever heard President George H.W. Bush tell the story of his night lost at sea when the luminous trail of the algae stirred up by the carrier led him back to the ship?].
     Ms. Mariner (also a providential name) rose to the rank of captain and became the first woman to command a military aviation squadron.  She recently passed from cancer at the young age of 65, but at her funeral, pause for effect, four Navy F/A-18F Super Hornet jets - all piloted by women - flew over to honor her.
    Three amazing women, and three inspirational stories to get us moving this week.  "Time waits for no man," and certainly these overachieving women understood this truism.  Let us all summon our own courage this week to just say "Yes!," stand up for what's right, and constantly ask, "Why not me?"  Have a great week!

"Duty, honor, country:  Those three hallowed words reverently dictate what you ought to be, what you can be, what you will be.  They are your rallying point to build courage when courage seems to fail, to regain faith when there seems to be little cause for faith, to create hope when hope becomes forlorn."  - General Douglas MacArthur, USA

** Many thanks to the WSJ and their wonderful obituaries which allow us all to honor, and learn from, these great people.

** For more information on Jeff's Books, Blog, and Legal Challenge, please visit www.jeffmartinovich.com.

** To access JAM Views directly please visit jeffreyamartinovich.blogspot.com 

* SUBSCRIBE TO JAM VIEWS

* PLEASE USE THE BELOW SHARE BUTTONS TO SPREAD THE WORD!