That's Nick Karadza and Mike Desormeaux playing in a men's softball league.
I happened to come by with our little dog to watch these gentlemen in action and can I tell you...I was impressed.
Mike is there throwing underhand strikeouts, which I thought was impossible to do, and Nick is running around like he's 30 years younger than he is.
They both made solid contact too...Mike's second at bat hit the fence, with a little more pop that thing would have been out of the ballpark.
We're finally, FINALLY, getting some spring weather here in Ontario.
Last week, I was down in Las Vegas at the Bitcoin conference enjoying some 37 degree sunshine so I can't complain too much.
That conference really made it obvious that digital hard money, Bitcoin, has now captured the attention of both Main Street and Wall Street.
And I know some of you may be asking...
Why do we even need "hard assets" or "hard money"?
And the reason we do is because the money you earn from your job is fiat money.
It's government-issued money (technically, it's currency but we'll park that discussion for another day).
And because the government issues it they can simply create more of it any time they deem necessary.
When they do, the fiat dollars you control in TD, RBC, BMO or wherever lose value because more dollars just got added into the economy out of thin air.
More dollars printed means the value of the existing ones lose value.
The Bank of Canada even calls this out on their website with an "inflation calculator"...
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Something that cost $10 back in 1970 costs $80 today.
Nothing changed about the $10 item by the way...it's just that the more dollars were created and the money supply "inflated".
And look at the last line of the image above.
They're using an inflation rate of 3.86% annually.
But we can go to Statistics Canada ourselves and see that the circulating money supply, M2 Money, has actually inflated at just over 10% per year since 1970.
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This is why Canadians who own hard assets tend to get ahead over longer periods of time.
You can't just print a new rental property.
You can't just print an ounce of gold.
You can't just print an ounce of silver.
And you definitely can't just print a Bitcoin.
Each of these things have hard, physical constraints to them.
Government fiat money has no physical constraints at all.
And this brings us to the point we wanted to discuss today...
What happens when you mix traditional "hard assets" with digital "hard assets"?
Well right now in Ontario we can find student rental properties that will cash flow between $800 and $1,000 per month.
These properties range from $650K to $1.1M.
We know many investors that have owned these, like we have, for a long time.
We've owned student rentals for 25 years or so in fact.
Now, if you're fortunate enough to have owned such a property for some time and have some equity in it you may be in a position to mix in a digital hard asset like Bitcoin into it.
Let's say you have a $750K student rental property that is generating $1,000 a month in free and clear cash flow.
And you've decided you're holding this property for the foreseeable future.
If your bank will allow you to tap some of the equity in that property, let's say $100,000, for 5.5% interest then your monthly carrying costs for that HELOC will be $458.33.
You can cover it out of the monthly cash flow (yes, I know not everyone has such a property but we can dream...and we know many that actually do).
And use the $100K to acquire some Bitcoin.
Now let's use the historic data from 1969 to present day that tells us real estate appreciates, on average, 7% a year or so.
After 20 years the rental property is worth: $2,712,397
After 20 years the $100,000 of Bitcoin is worth: $12,624,243
(you can change the appreciation rate for Bitcoin, we used a lower than average historical rate of 29%).
After 20 years the combined hybrid asset is worth: $15,336,440
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If you had NOT done this hybrid approach you would have had more monthly cash flow but your asset value would have been $13M less in value after 20 years.
Something to consider now?
We call this the BREAS Strategy (pronounced "breeze"): The Bitcoin Real Estate Asset Strategy.
Makes you think what's possible with a little bit of creativity.
Your Bitcoin downside is limited to the $100K.
So you need to stomach possibly losing that (but hopefully your property appreciation covers that over time).
Remember, nothing is guaranteed in investing of course.
And perhaps real estate doesn't appreciate at its 55 year average rate going forward.
There are definitely things to consider here.
But if there really is a new hard digital asset emerging and being accepted by Wall Street then perhaps this is something worth at least considering.
You can play with the calculator we setup for this right here:
RockStarInnerCircle.com/Breas
Scroll down and you'll find it.
We set it up so you don't have to make a lump sum addition, you can enter a monthly contribution instead.
And next week we're going to do an Introduction to Real Estate Investing 2025 Class where we'll go through some of the strategies we're using today with investors, including student rentals.
We'll discuss the best areas, how they work, the pros and the cons etc.
You can sign up for that class on Tuesday, June 10 by clicking right here.
We'll stick around for any questions you have and answer them all live.
In today's world you can't just be exposing yourself to government fiat money...it's not possible to outpace their money printing debasement of the M2 Money Supply.
The world is changing fast.
The fiat money is getting created out of thin air at a rapid pace.
And with this great change comes great opportunity if you're willing to look for it.
Until next time!!
Your Life! Your Terms!
Tom & Nick
