If You’re Worried About Money, Hear This w/How to Money

Dave:Financial stress doesn’t just feel bad. Studies actually show that constantly worrying about money actually impairs your cognitive functions, making you worse at your job, worse at managing your money, and worse at building the future you want. It can be a vicious cycle. Today’s guest, Joel Larsgard, the co-host of the How to Money podcast, has made it his mission to help people break out of that cycle. He grew up watching his parents struggle with money and turn that experience into a career teaching financial literacy to millions of Americans. Real estate investing has been key for Joel’s own financial journey and in the advice he preaches to others. He’s built a manageable but very effective portfolio in Atlanta by house hacking, renting out properties when he moved in, and letting his equity compound over time. In this episode, Joel and I get into the financial foundations that every real estate investor needs, like budgeting and emergency funds.We also dig into the big questions I keep getting asked right now like, “Is it still worth buying in this market?” Joel has a strong take, and I think you’ll find it convincing whether you’re on your first deal or you’re 50.What’s up everyone? I’mDave Meyer, Chief Investment Officer at BiggerPockets. Today’s guest on the show is Joel Larsgard, real estate investor and co-host of the How To Money podcast. Let’s bring on Joel. Joel, welcome to the BiggerPockets Podcast. Thanks for being here.

Joel:Thanks for having me, Dave.

Dave:Yeah, I’m excited to talk to you about this. You have such a wealth of experience and knowledge, not just in real estate, but across the financial and investing spectrum. So I’m excited to dig into this with you. Let’s start at the beginning though. How did you get into this world? Why personal finance? Why have you really dedicated your career to this?

Joel:Man, it’s complex. It’s like personal and professional, right? It’s this crossover of both for me. And just going back into my story, my parents weren’t great with money. They were told some of the wrong things to do. I remember my dad told me he got advice to buy a house that was just a little bit more than they could afford because you’re going to get promotions and stuff, man. And then at some point that payment will become really manageable. Or his dad telling him like, “Buy a nice car, you deserve it. ” And this led to when the promotion didn’t come, and actually when my dad got laid off, it led to meaningful financial issues. And I just remember that being a cloud that hung over our home when I was a kid. And there were a lot of fights about how we handled money in our home.And I just remember going to sleep sometimes and thinking to myself, “Gosh, I don’t want to argue about money with my spouse someday.” And so part of it was this kind of innate desire to learn the ropes of money, not to become ridiculously wealthy, but just to say, “How can I handle this stuff so that it’s not an ongoing issue for me in my adult life like it was for my parents for so many years?” And so part of it was that. And then ultimately when I worked in talk radio, I ended up working for this syndicated consumer advice guy named Clark Howard, and he’s just a brilliant mind, incredibly wise. And working and producing his radio show for 14 years was this intersection of a personal pain point. And then it became this thing I became incredibly passionate about. It was a solution for me, but then I realized this is a problem that not just I’m facing, but that tens of millions of Americans have an issue with, is handling money in a way that’s effective, that’s helping them build wealth for their future and avoiding some of the pain that not handling money well creates.

Dave:Well, first of all, sorry to hear that created issues in your family. And when you were talking about that, it just honestly reminds me a lot of my own childhood. My parents, I think you would describe as house poor is what people call, like stretched on their budget of where to live and it just sort of impacted the family a lot. My parents ultimately got divorced, a lot of fighting about money. And that just resonated with me, what you said, because it sort of created, I think on the positive side, a drive to do better at budgeting and thinking ahead a little bit, but also sort of created this lifelong financial anxiety that I felt like I needed to address. I just was always worried about money as a kid. Before, you should be worried about money because my parents were constantly talking about it and trying to find a positive way to channel that anxiety was a big mission and ultimately wound up in real estate for me.I felt like that was the right way to try and secure a good financial future for myself. But for you, after that experience growing up and working in radio with personal finance experts, what part of personal finance resonated with you and where did you find yourself gravitating?

Joel:There’s certainly a lot of people in this country who for a lack of income, a lack of options, lack of education, have a real hard time making ends meet. But then there are a lot of people who have those solid incomes, like I said, that’s a growing number of Americans in middle and upper middle class. And yet still, a lot of those people living paycheck to paycheck who have the ability to figure this out. I talk about it sometimes. It’s like learning a different language. Learning personal finance can be like that. Same with learning real estate, right? That’s why it typically takes 150, 200 hours of research and digging into your neighborhood before you start making offers, before you can make a smart offer and know what you’re doing. The same can be true of personal finance, although I think the basics require a little bit less time than that.But ultimately, there’s just such a need no matter the income level for people to learn these basics. Because I do think we can blame it on the system or we can say that the macroeconomic wins are not in our favor right now, but I think there’s just a lot of personal agency in that space of personal finance where people can take control of a lot of aspects. They can make changes that are going to improve their lives moving forward, that are going to reduce stress. Like you talked about divorce, right? I mean, that divorce, stress, there’s a lot of studies about how being stressed out about money reduces your IQ level. It makes you worse at your job. Yeah. So if you’re stressed about money constantly, you’re like walking through life with like 14 points locked off your IQ. You’re going to make worse decisions.And employers have found this as they’ve started offering more like emergency fund help. They realize that their employees who are living financially strapped and on the margin, if they offer them a little bit of a lifeline, maybe they’re a little bit less stressed at work, maybe they’re a little bit more productive. And so the reality is that if you have your personal finances buttoned up, you’re paying off some of the most nefarious kinds of debt and you’re able to save up a little bit of emergency fund and you’re able to start investing for your future, that frees up a lot of brain space so that you can enjoy your life more, but it’s also just helping secure your financial future as well.

Dave:So Joel, you’re saying that you think financial literacy can really help people regardless of what’s going on in that macroeconomic climate or the quote unquote system. And I’m curious if you could say more about that because that is a debate, right? You hear that all the time, that things are harder now for people than they were a couple years ago or a couple of decades ago. And I’m curious where you fall on that spectrum or how you would weigh in on that debate.

Joel:I think it’s a little bit of both, right? And I think in some ways it’s harder. I think about buying a house in 2010 versus 2026. It’s a different endeavor and rates are higher, prices are higher. When you talk about like the average income needed to buy the median house in the United States, it doesn’t match up to where it was even five years ago. And so that’s a problem. There are other ways though that it’s become easier. I think there’s more information about that, about personal finance. It’s easier to learn than ever before. There are also, for instance, like requirements now for companies to auto-enroll you into your 401k. So maybe before, 10 years ago, you’re like, it wouldn’t have been on your radar, you wouldn’t even thought about it. Now people are saving and investing for their future without realizing they’re doing it.And in some ways, I think that’s a wonderful thing. And so yeah, I think it’s a mixed bag. When you look at the stats about Gen Z, they’re more prone to invest, more keen on investing than any other generation in history. And you can say some of that’s negative with speculation and the prediction markets

Dave:And- Hope not.

Joel:Yeah, I know. Some of it is. There’s some

Dave:Of that

Joel:Taking place, but then I think a lot of that is also positive and there’s just a reality that they’re living in. Hey, questioning whether social security is going to be there for them, realizing that the onus is on them and they’re not just passively hoping that they’re going to be okay. They’re actively investing for their future because they know they have to play a bigger role.

Dave:That’s where I come out on this. I wouldn’t argue. If someone was to say it is harder to be in the middle class today than it was 10, 20, 30 years ago, I think there’s a lot of evidence to support that, but there are things that you can do to improve your financial future. And why I personally believe as times get hard, personal finance becomes even more important. It’s arguably less important when things are going well, right?

Joel:Yeah. When we go through a recession or the great recession back in 2008, what you find is that the savings rate goes up. When you look at what happened during COVID, the height of COVID in 2020, the savings rate skyrocketed. Part of that was like, we’re staying at home, right? And so we’re spending less. But that’s just a consistent reality of how people respond to unexpected negative events is they start saving more. And you would think like, man, if you make hay while the sun shines and you’re saving ahead for those realities, then you don’t have to curve back instantaneously in the moment and pair back in a way that harms your lifestyle because you’ve prepared for that eventuality. But what you find is that most people don’t. And so what they end up doing, they find and they trim the fat, but only when it’s actually necessary.And to your point too, on whether or not it’s easier or harder, I think one of the things that makes it harder as a middle class American now is just the abundance of stuff and the expectations that we have. So yes, some things are legitimately more difficult like buying a house right now, but then there are some things where we just have to change our expectations as individuals and having lower expectations sounds like, “All right dude, come on, you’re telling me I should want less.” And in some ways, yes, like we should.

Dave:Yes, 100%.

Joel:If we are okay wanting less or realizing that actually this 15 year old car is going to get me where I want to go just as well as the brand new car or you know what? The 1200 square foot house is going to be just as fine for me to build the life I want as the 3000 square foot house. It’s just going to cost me a heck of a lot less than … And I think this is not to just dunk on people’s choices, but I was talking to a friend recently and he took out a loan from his 401k to put in a pool and then somebody came in and they were like, “Hey man, you need new windows.” And he took out an 18 month, 0% interest loan hoping he can pay it off in time to put the new windows in.These are the kind of decisions, Dave, that people are making to try and keep up with the Jones. He’s got two new Teslas in the driveway, right? I mean, there are all these choices that we make, and I’m not saying that there are no headwinds, but like a lot of this we’re also doing to ourselves.

Dave:It’s so important to just, not that you have to be cheap or frugal in every part of your life, but focusing on the things that actually matter to you instead of just buying things because other people are buying those things, because otherwise, even if you get rich, you’re still going to want more. That’s, I think, the trap that you fall into is that you can earn more and more and more, but you’ll never be happy until you can sort of control what you actually want and what you spend your time and effort on, you’re going to be in the hamster wheel. So I love what you’re saying there, Joel.

Joel:Well, on our show, we talk about the craft beer equivalent because I love craft beer and I’ll spend a ridiculous amount. I just went to a brewery a couple days ago and bought a couple four packs and it’s not cheap.

Dave:How

Joel:Much?They’re like $21 for a four pack, four pack of 12 ounce cans. You’re like, “That’s five bucks a can. That’s crazy.” But it’s, man, delicious stuff. And so I’m more than willing to buy that stuff. But if you can carve out, I think it’s one of those things where you have to frame it in a positive way for people because oftentimes in personal finance, it’s sort of this deprivation mentality. Well, how can you hate your life and spend as little as possible so that someday when you reach age 65, you’re living high in your golden years.That’s lame advice anyway, right? It is. It’s a terrible idea to live for three decades from now. Yeah. But if you can find, well, how can I positively save for my future self providing optionality for myself now while still spending on the couple of things, two, three things I’ve identified as highly important in the here and now.For me, craft beer is still up there, although less so now, but concerts, that’s really high on my list right now. And so I’ll spend big money to go to concerts, but then there’s other things like my 20 year old 4Runner is, I’m just going to hold onto that for the next eight or 10

Dave:Years.

Joel:Are

Dave:We the same person? You have a 20-year-old 4Runner? Yeah. I drive a 2004 blue Toyota 4Runner.

Joel:No way.

Dave:I got no

Joel:Six, so I’m a little fancier than you.

Dave:Okay, you’re fancier than me. I love that car. I told my wife I’m going to get buried in it. I love it. See, cars don’t matter to me, but man, put me in a fancy hotel. I’m a sucker for that. I absolutely love it. I like splurging on a vacation. For me, that’s worth it, but car, I’ll drive an old one. It’s totally fine. So Joel, I want to hear about your involvement in real estate and how it has played a role in your own personal financial journey, but we do have to take one quick break. We’ll be right back. Welcome back to the BiggerPockets Podcast. I’m here with Joel Larsgard talking about personal finance. And Joel, I want to turn our conversation to what role real estate has played in your personal finance journey. So when did you first get into the real estate game?

Joel:So bought my first property back in September 2009. It was a good time to buy, let’s be honest. Prices were low. It was also a tough time to buy because the economy was still in turmoil. We’re talking about there were short sales happening everywhere, foreclosure sales happening everywhere. And so yeah, it meant prices were cheap, but people were also worried about further price declines. And there were just a lot of things up in the air at that moment in time.

Dave:Totally. People overlooked that. They’re like, “Oh, it’s so easy.” It was like, “Well, the bottom was kind of falling out and no one knew when we were going to find it.

Joel:” Exactly. But when I was doing the math, I was just thinking, think about what rent’s going to cost me if I rented this apartment over here and what if I buy this single family home right around the corner in this potentially up and coming neighborhood, let’s hope. And man, I can live in there alone, buy myself and pay just as much as I would in rent every single month, but actually it’s got another room and I could rent that room out too andLower my costs substantially. Gosh, it’s starting to feel like a no-brainer. Why would I not buy a property? It was not on my radar until I was looking at prices, sub 100K prices, which now people are like, “Don’t rub it in, man. Don’t say that out loud.” True. I’m sorry I mentioned that. But when you start to see that, you’re like, this feels like a once in a lifetime opportunity that I have to take advantage of. And even if the home pricing turnaround doesn’t happen instantaneously, if I’m in it for the long term locking in just ridiculously low housing prices, that’s a win in and of itself. So that was when I bought my first property.

Dave:Where was that? Where in the country? So

Joel:This is in Atlanta, in two miles east of downtown Atlanta.

Dave:Wow. Sub hundred grand in Atlanta is looking pretty good right now at that.

Joel:Yes, for real. And so then I realized a couple years later as real estate prices are going back up, but I’m like, there’s still a lot of deals it seems like to be had,But I can’t get rid of this house and upgrade.That’s ridiculous. So what if I hold onto this house and I move just right around the corner into something just ever so slightly larger? And then I manage this one. And so just from a number standpoint, it started to make a whole lot of sense to save up that next down payment, to buy a house around the corner. And this was kind of my methodology for the first seven or eight years was like, “Hey, every two years, can I buy a place and rent out the place that I bought previously because, hey, if it’s low price, I got incredible financing and I want to hold onto it for the long term, this seems like a no-brainer to help propel me on my path to, not fortune, but towards at least building wealth for myself.”

Dave:Did you consider yourself a real estate investor or were you this a side hustle for you?

Joel:I think it takes a while to consider yourself a real estate investor. At first you’re like, “I’m doing this on a lark.I know this area, there’s a lot of good things happening here. I saw a lot of potential in terms of pricing in terms of the neighborhood.” And then the further along you get into it, you do it once and you’re like, “Okay, all right. Now I’ve learned a lot about finding a great tenant. I’ve learned a lot about planning for vacancy.” You just learn about every little thing along the way. So I didn’t feel like when I took the leap, I couldn’t mess it up. I knew there were a lot of ways I couldn’t mess it up. There were a lot of ways I didn’t even think in my mind like, “Well, that’s something I don’t know. ” And you just kind of learned them through a series of hard knocks at times.

Dave:I mean, that’s the beauty of it, right? It’s not easy, but it’s simple. Yes. It’s something that people can just understand. The inputs, even underwriting a deal, you need to get good at understanding what numbers to put in each slot in the calculator, but there aren’t even that many slots in the calculator. You need to figure out your revenue, your debt service, couple expenses, but most people can wrap their head around those things. It’s so tangible and easy to get a grasp on. And it is a more forgiving business than I think people give it credit for. If you buy well, you get a lot of leeway in getting your hands dirty and figuring it out on your own and learning by doing, at least in my experience.

Joel:I think that buy well is such a key point. And I think especially right now, it’s not that you can’t, it’s just harder. It’s harder to buy well. And if you’re trying to rush it or you’re just like, “Man, real estate is the path to riches, that’s the path I want to take.” I think that’s a reasonable choice for a lot of people who say, “That’s where I want to focus my efforts. And that’s where I think I have outsized abilities.” If I can know my market incredibly well and buy intelligently, then I can perform better over time than I would investing passively in the stock market. More power to you. But I think there’s also a lot of people who might knee-jerk say, “I think real estate is the best path. And so I’m just going to start making offers and get in there and not maybe having run the numbers as thoroughly as they need to or thought through the trade-offs before they go hog wild or all in on the real estate path and find that they weren’t really fully prepared and the risk is higher now than it was, I think, when we were starting off.”

Dave:So Joel, at this time, you’re buying a couple properties in Atlanta. Were you still working in radio or what were you doing?

Joel:Still working in radio, contributing to my 401k, my Roth IRA still too. I like the kind of both edges of the sword. I wanted to partake in both. And my thought process was like, I didn’t care about maxing out my 401k, but if I can’t get the match and max out my Roth IRA, then I’m not ready to buy another property. To me, that was table stakes. I don’t think that has to be the case for everyone, but that was the table stakes for me. If I can do both those things, whatever I can save on top, that’s going towards my real estate investments. And so like I said, I bought those first two houses. And then the third house I bought was a duplex and it’s still right in that same neighborhood. So I’m self-managing, I’m doing a lot of the repairs on my own.And I think that’s a really … It’s not for everyone, but especially when you’re running the numbers in those early years, make sure those properties are profitable. The more you can do, one, it helps you learn the lingo. It helps you understand your properties better. If you start hire out for a property manager immediately, you’re going to miss out on profitability and you’re going to miss out on the learning process that’s really necessary. I learned a lot about screening tenants, like how important that is and how thorough you need to do that. That’s like potentially the number one most important thing you have to learn how to do effectively after finding a good deal. And so yeah, that duplex was great. Then I’ve got two single family homes and a duplex. I’m living in one part, renting out the other part. And then I bought another duplex slightly further out part of town, about 15 minutes away.And then I bought it, we were going to renovate the home that we were living in. And I was like, well, instead of renting a place for like five months while we’re out of the house, what if I buy a place and we live in that place and then we turn that into a rental property. And I think you have to be willing to be uncomfortable sometimes to do well in real estate. My newborn son was sleeping in a pack and play in the bathroom, in that super tiny house. And some people might be like, “That’s parental abuse.” And maybe it was, and maybe he’ll be on a therapist’s couch about that someday. But it was one of those things where we were like, “Yes, this is a great rental property. If we were to buy something nicer and fancier and more expensive, it might not be a great rental for the future.” So we moved into there for five months while we were doing some work to the other house, moved back in.We still have that. That was a great buy. So being willing to be a little uncomfortable, whether that’s buying a duplex, whether that’s just living in tight quarters, that sometimes, as you know, Dave, a lot of those smaller homes often make the best rentals.

Dave:Wow. Joel, you just said so many things that are really important that I want to dig into a little bit. First and foremost, just knowing your own risk tolerance is just so important. There are like a million things online. You can go take a risk assessment. But I used to think that I was a really high risk person because I like doing outdoor sports and like stuff that’s a little bit riskier. But when it comes to investing, I’ve come to learn that I am not a super high risk person. I like boring rental properties. I like doing stuff that’s slow and steady. And to your point, I never want to lose my shirt. There are some investors, people who make more money than me, James Daynard on the show a lot, flips houses. He makes huge checks all the time. He also loses money sometimes.And that to me, I just can’t do that. And I think as an investor for real estate, you just need to understand who you are a little bit and what you’re trying to accomplish. It sounds like Joel, you and I have sort of a similar philosophy about wanting a comfortable life. I want a good life. I want to have wealth, but I’m not trying to become a billionaire. I don’t care about any of that. I’m trying to just live a comfortable life with my family. And I don’t see the need to take risk because real estate can get you there with low risk investments. And so if you don’t have the need to, I don’t see why. But to each their own, really recommend people go out and check that out.

Joel:Anytime you’re trying to truncate that timeline, by the way, that is when you know you’re in all likelihood taking on more risk because

Dave:If you’re like- Exactly.

Joel:“I need to get rich in the next two years. I need to get rich in the next two months,” you’re going to take shortcuts that could completely push you in the opposite direction and they could derail your plans.

Dave:That’s so true. When people say, “I want to retire in five years, I have $20,000.” I’m like, “You’re going to have to get pretty risky. You got to put it all on black, essentially.” It really is that kind of mentality where you’re going to have to take massive swings. Sometimes it will work. For some people, the loud people on the internet, maybe it did work, maybe they’re lying, but maybe it did work. But I think one of the other things you said is, in hindsight, I would’ve bought this, I would’ve bought that. And this is something I’ve just been thinking a lot about recently. I don’t know if you’ve ever read this book called Thinking in Bets by Annie Duke as a former poker player. I love this book. It talks a lot about separating decisions from outcomes. And I really just believe in that philosophy very strongly because I have similar regrets.I’m like, should have bought that duplex, should have scaled. But at the time, if I go back knowing what I knew at the time, I made the right decision. Now, what the outcome was out of my control, right? All you can control is the decision that you made at the time. And I think that is really a hard lesson for investors to learn because I wish I bought Bitcoin at 10 bucks too, but at that time, I didn’t understand it. I did not think it would do what it did. I’m not going to beat myself up for not doing that because knowing what I knew, I made the right decision. And I think that’s such a powerful investor lesson that is really difficult to wrap your mind around. I’m not sure if you’ve done that deliberately, Joel, but I think it’s just a really good piece of advice for our audience.

Joel:I think it’s harder than ever now to kind of stay with a slow-ish, like a boring approach based on fundamentals because there’s so much noise and it’s so easy. There’s so many influencers out there who are saying, “Hey, look at what happened with gold over the past year.” The fact that you’re not all in on gold, what’s wrong with you? There’s a million ways that you could go and a million people giving advice. And at the end of the day, yes, you have to take the approach that you’re comfortable with and an approach that makes sense to you. And you have to, I think, discern that deeper why. If your goal is increased optionality over time, you don’t have to go all in immediately. You can make a plan to build wealth over the next eight, 10, 12, 14 years. Some people think of financial independence as a all or nothing sort of deal, but it’s not.

Dave:No.

Joel:It’s a slow pushup, a spectrum, and you gain more optionality with every move that you make, every intelligent move, right? I love

Dave:This, yes.

Joel:Having two profitable rental properties is great.That’s going to help push you over further up that spectrum. And then every eight years later, if you’ve got five income producing rental properties, you’re further up that spectrum. The more you pay down the debt on those rental properties, the more rents go up on those rent. You’re just pushing yourself further up that spectrum. But I think some people, it’s become like, “Well, what’s your fine number and how quickly are you going to hit it? ” And so some people are willing to bite off more than they should, risking more than they need to with less thought for what their goal should be or just how they can get there incrementally over a longer period of time.

Dave:I love what you’re saying, that financial independence is not a destination. It is a journey. And I think by putting it out as something in the future, not only are you setting yourself up for disappointment and a long slog, you miss the wins that you should be celebrating. Every deal you do is a win. I meet people almost every day at meetups or wherever I am and they’re like, “Oh, I only have eight units. I only have three properties.” I’m like, “That’s fucking awesome. You should be so proud of yourself for doing that. ” For real. Do you know how much work and guts it takes to do that? Has that deal moved you closer to your financial future? If the answer is yes, great. If you are moving towards your financial goals at a steady clip, you should be extremely proud of yourself because that is more than most people do.That takes guts and work and effort. And I just think if you’re a quarter of the way there, good for you. That’s better than you were last year. If you’re halfway there, good for you. Every step is something worth celebrating. I’m not saying stop, but I think embracing it as a journey and realizing that it’s a lifestyle. It’s not a race. It’s just a way of thinking and operating that isn’t going to change. I’ve been fortunate in my career and made money, but I still think the same way I do that I did 10 years ago of just trying to make good decisions and building slow and steady. And that mindset more than any particular deal, I think is what’s helped me get to where I am.

Joel:Yeah. I mean, it makes me think of a running analogy because I’m a runner, but getting into that going from literally couch to the first 5K I ran and then the 10K and then a half marathon, it’s like, I think a lot of people assume that, “Well, if I didn’t hit the time I wanted, then it was a failure.” And the truth is, most people don’t ever run a half marathon or a marathon. And the fact that you did it is incredible.That should be celebrated. And I think the same is true. I think most people don’t have three units or five units or eight units, and you’re comparing yourself again Just some of these personalities that you see on the internet, and guess what? Some of those people might be overleveraged. They might have a hard time sleeping at night. They might be disappointing investors who participated in their deal, harming relationships.100%. There are all these things you don’t know. It’s similar to just the old school millionaire next door thing. The fancy car in the driveway of the really nice house, those are the people we assume are doing incredibly well. But guess what? I live in a place and I can tell you for a fact that many of the people living in the nicest houses with the nicest cars are not doing so well financially, are being sued by people they’ve done business with. They’re in a really tough spot relationally with their spouse because of all the shenanigans going on in their lives. And I would rather live that kind of quieter stealth wealth lifestyle. That’s ultimately, for the most part, what wealthy people look like, it’s really hard to discern that they’re wealthy because they’re not showing it off right and left. And the same is true.I think in real estate and in personal finance, it’s just if you can be comfortable taking that stealth wealth approach, that’s ultimately what’s going to make you wealthy. And then later on down the road, buy those fancy handbags are a nice car, but don’t do it before you can … It’s essentially a meaningless part of your net worth.

Dave:Joel, I want to talk to you a little bit about what you’re seeing in the market today and where you see opportunities, whether in real estate, the market or elsewhere. We got to take one more quick break though. We’ll be right back. Welcome back to the BiggerPockets Podcast here with Joel Larsgard talking a lot of philosophy about real estate today. I love this, just talking what mindset to have as a real estate investor. But Joel, we’re in a weird spot 2026. It’s confusing. So what’s your take on being an investor right now? Do you see opportunity? Do you see risk? What advice would you give our audience?

Joel:Yeah. So we’re in a really interesting spot of real estate where what happens next is hard to predict. And it’s going to be market to market in so many ways as well. Some markets have seen significant drops in prices and significant drops in asking rents. And other markets are doing quite well. And so where you live, well, that really matters right now. There is no United States market. And so you have to kind of drill in to where you are. And even as always, neighborhood to neighborhood, street to street, you have to know that stuff as well. And I think you have to do your due diligence more now than ever. And you have to build in. I remember, Dave, when I was first starting, I was like, man, all these real estate guys, they talk about vacancy. I need to be planning for 10% vacancy or something like that.What are they talking about? Every time I list my property for rent, I’ve got like 20 people lining up to live in this thing.

Dave:This is Atlanta in the 2010s, man. Yes. No such thing as vacancy.

Joel:I got six applications and they’re all incredibly solid applicants. And now, only in the past couple years have I experienced my first vacancy ever. A month here or a month there. And I was like, okay, good. I get nowWhy they were talking about that. This is probably a little bit more normal than what I had been experiencing. And so as a real estate investor, I think you have to plan for those contingencies more, which means being probably a little more conservative in your projections and having cash reserves built up. Even when you’re talking about maintenance costs, I mean, that’s one of those things we’ve seen skyrocket in recent years. And so something as simple as a roof replacement, not simple, that’s a very complex thing, right? But like something like that. Think about what that used to cost. And if you’re still thinking in terms of 2017 prices … I was just at my primary residence thinking about putting on a screen porch and got a quote back and I was like, I did not know that. Okay, 2026 prices really caught up to me there.Guess I’m going to punt on this for a little while. So you have to really, I think, know what, hey, what’s going on with this property? What’s going to need to be repaired? Am I in the financial position to be able to fund those repairs and still make this into a good deal? I think those questions are more pertinent now than ever.

Dave:I’ve been talking to the audience just generally about how investors are either quote unquote risk on, risk off. There’s time to take a swing, there’s time to not take a big swing. And I personally base that a lot around the level of certainty I have around macroeconomic conditions. And to me, it’s a risk off time. Yeah. It’s just a time to be very conservative right now. And I admitted early, I’m a sort of conservative investor, but I think even in the … I have a certain amount of capital in my portfolio that I allocate to riskier stuff because I want to get those big returns too. But even in that, I’m lowering my threshold for risk right now just because I don’t know. And that doesn’t mean it’s necessarily going to work out badly. I just don’t know. And I don’t like taking swings when I don’t have a high degree of confidence.So I completely agree with what you’re saying.

Joel:I think on timeline too, it’s even more important to have a longer term time horizon when you’re unsure about what happens in the next two, three, four years. Because if we do see a plateau, let’s say the home that you bought for 400 grand and the numbers make sense, but like, man, you’re a little nervous as your first deal, just make sure this is something that you can buy and hold for a minimum of seven years. I think at least 10. I think time heals a lot of wounds. And especially with the transaction costs of real estate, the ownership timeline matters more than ever before. If you’re looking for a quicker exit, it just has to be even more of a slam dunk.

Dave:Last question here, Joel, before we get out of here, but how do you assess other asset classes right now? I assume you’re still in the stock market. Anything else that you’re investing in? And how do you see those in comparison to real estate?

Joel:Man, I think being an optimist often makes you sound like an idiot, right? And the pessimists get all the headlines because there are a lot of worries out there. There are legitimate fears on the sociopolitical front. There’s always potential fear in every aspect, I think, of the economy, whether we’re talking about the housing market, whether we’re talking about small businesses, whether we’re talking about investing in the stock market. I could give you a hundred reasons to be pessimistic,But I think the reason I can point to for optimism, again, over a longer time horizon, is just we live in a country that’s incredibly dynamic from an economic perspective. And I don’t see that changing anytime soon. Even just look at how other countries have done post COVID versus the United States. The United States has fared incredibly well. And over the last eight or nine years, I’ve heard so many people talk about, well, man, investing in the market right now, we’re at all time highs. Are you nuts? Think about the correction that’s coming soon. And even now, I’m seeing more predictions of a recession coming up and I’m not saying that it can’t happen.Corrections happen regularly. Recessions happen fairly regularly. Like this is not something that should surprise us and we should, like we talked about earlier, save a pessimist and have that cash on hand for those occurrences. But we should also just be investing like optimists and realizing that, hey, if we have decades for this money to run whether we’re investing in real estate, whether we’re investing in stocks, whether we’re investing in ourselves or in a small business that we’re creating, I think optimism is in order for all of us. And I think we still live in a country that’s incredibly dynamic. This is again to where diversification in stock market investing matters. What’s going to happen with one or two particular companies? I don’t know. Will Apple be or Nvidia be the big companies on the block 20 years from now? All historical signs would point to no.There’s such a cleansing effect and that those companies-

Dave:Yeah, like a GE.

Joel:Yeah. And that’s why I think from a stock market perspective, you need to invest in a low cost diversified index funds is the way to go.

Dave:So you’re not going to give us a magical stock pick that’s going to make us all rich? Gosh,

Joel:I wish I could. I wish I had that in my back pocket, right? Yeah. But I do think there’s case for overall optimism as long as you know you have a long time. Would I invest knowing that I needed the money in 18 months to two years? No, that money would go into high yield savings accounts because those short-term realities are incredibly unknown. But overall, I still have a lot of faith in the United States economy in particular and owning more of the world economy is probably wise as well in the coming years. But yeah, I guess again, I don’t know that it’s a big seller or it probably doesn’t make for a sexy headline, but I think optimism, there’s still a really good case for being optimistic about the future.

Dave:I love it. Well, well said, Joel. Thank you so much for being here. This was a lot of fun. We appreciate you coming on.

Joel:Dude, thanks for having me, Dave. Pleasure.

Dave:Where should people find you?

Joel:The How to Money podcast comes out three times a week. People can listen to that wherever they’re listening to this podcast.

Dave:Awesome. Well, thanks again, man. And thank you all so much for watching this episode of the BiggerPockets Podcast. We’ll see you all next time.