Dear Reader,

The housing market is broken.

It’s not crashing. Not yet. It’s worse.

It’s frozen. Locked solid. 

A giant block of ice in the middle of the economy.

Millions of people are sitting in their houses, looking at their Zillow estimates, and thinking they are rich. They are not. They are prisoners.

Prisoners in a gilded cage that the government built.

And millions of young people are on the outside, looking in. The American Dream of owning a home? For them, it’s dead.

And the government is the one who killed it.

My poor dad believed in the American Dream. He believed that owning a home was the cornerstone of a good life. 

He worked hard, saved his money, and bought a house. He thought it was his biggest asset. He never understood that his house was a liability. 

A money pit that ate his cash flow and tied him to a job he hated.

My rich dad owned hundreds of houses. But he didn’t live in them. He rented them out. 

They were assets. They were businesses. 

They put money in his pocket every single month. 

He understood the difference between a liability and an asset. And that’s why he was rich.

So how did we get here? How did the housing market become a prison?

It was simple. The government got involved.

During the pandemic, the government went insane. They printed trillions of dollars. They sent out stimulus checks. 

And the Federal Reserve dropped interest rates to near zero. It was a fire hose of fake money. 

And a lot of it went into the housing market.

People with 3% mortgages thought they had won the lottery. And in a way, they did. 

They locked in a negative real interest rate. The bank was paying them to borrow money.

But now, the party is over. The fake money created real inflation. And to fight that inflation, the Fed has jacked up interest rates. 

That 3% mortgage is now 7%. And that has frozen the market solid.

If you are one of those people with a 3% mortgage, you are trapped. You can’t sell. Because if you sell, you have to buy something else.

And your new mortgage will be more than double your old one. You would be a fool to move. So you stay put. 

You are a prisoner of your own good deal. You are wearing golden handcuffs.

And what about the people who want to buy? The young people? The first-time buyers?

They are locked out. They can’t afford a 7% mortgage. They can’t afford the down payment. 

The median age of a first-time homebuyer is now over 40. It used to be 25. The dream is dead.

So you have a market with no sellers and no buyers. It’s a ghost town. 

The prices you see on Zillow? They are an illusion. A fantasy. A price is only real if someone is willing to pay it. And right now, no one is paying.

This is the illusion of wealth. People think they are rich because a computer screen tells them their house is worth a lot of money. 

But that wealth is not real. It’s paper wealth. And it can disappear in a heartbeat.

So what is the way out of this mess? 

The government has no idea. They created the problem, and they have no clue how to fix it. 

They talk about subsidies and tax credits. More stupid ideas that will only make things worse.

There is no government solution. There is only a personal solution.

You have to change the way you think about money. You have to change the way you think about housing. You have to stop playing their game.

My rich dad taught me that your house is not an asset. 

An asset is something that puts money in your pocket. A liability is something that takes money out of your pocket. It’s that simple.

Is your house putting money in your pocket every month? 

Or is it taking money out in the form of a mortgage, property taxes, insurance, and maintenance?

If you want to be rich, you need to acquire assets. Real assets. 

Assets that produce cash flow.

Apartment Buildings: This is the best asset in the world. You get cash flow from the rent. 

You get depreciation, which is a massive tax break. And you get appreciation as the value of the property goes up

Gold and Silver: Real money. It has been for thousands of years. It’s a hedge against the government’s fake money.

Bitcoin: The new gold. A digital asset that is outside the control of the banks and the government.

The housing market is a trap. The American Dream has become a nightmare. Don’t be a victim. 

Be an investor. Be a producer. Be free.

Robert Kiyosaki

Editor, Money Power and Profit

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