If It Doesn’t Beat Inflation, It’s Not an Investment — It’s a Liability”

If It Doesn’t Beat Inflation, It’s Not an Investment — It’s a Liability”

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If It Doesn’t Beat Inflation, It’s Not an Investment — It’s a Liability”

By Jai Thompson

I had to slow this down and really look at what was written on that board, because it’s simple… but it’s everything.

The board breaks investing into four parts:

Capital Preservation
Cash Flow
Appreciation (Growth)
Tax Advantages (Pass On)

But the key point — the one that matters most — is this:

Appreciation must beat inflation and money printing.

What That Actually Means (Plain + Real)

Every year, the government prints money.
When more money exists, each dollar becomes weaker.

So even if your asset goes up in value…
that doesn’t automatically mean you made money.

Simple example (3rd-grade math):
You buy something for $100
It grows to $108 in one year → that’s 8% growth
But inflation is 10%

👉 Your money lost value, even though the number went up

Because:

What cost $100 now costs $110
Your $108 can’t keep up

You went backwards.

Why This Matters in Real Estate (My Game)

This is where I separate deals from distractions.

I don’t chase appreciation.

I control:

Entry price
Cash flow
Structure

Because appreciation is the bonus, not the plan.

How I Use This in My Deals
1. I Buy Below True Value (Built-In Protection)

If FMV is $1,000,000:

My offer = $850,000 (85%)
Recorded = $450,000
Lender = $240,000

👉 I already have margin

So even if inflation is crazy…
I’m not exposed like retail buyers.

2. I Focus on Cash Flow FIRST

Let’s say:

Property makes $100,000/year
Expenses = $40,000
NOI = $60,000

If my debt is low (because I structured it right):

Debt = $20,000/year

👉 Cash flow = $40,000/year

Now I don’t care what inflation does.

Because:

I’m getting paid TODAY
Not waiting for appreciation
3. Appreciation Becomes the Bonus Layer

Now let’s say the property grows:

From $1,000,000 → $1,200,000

That’s 20% growth

If inflation is 5–8%:

👉 I WIN

Because my asset grew faster than money lost value

The Real Rule I Follow

I don’t ask:

“Will this go up in value?”

I ask:

👉 “Will this outperform inflation AND pay me while I wait?”

If the answer is no…

It’s not a deal.

Where Most People Get It Wrong

Most people:

Buy retail (no margin)
Pray for appreciation
Ignore inflation
Ignore cash flow

That’s gambling.

My Standard Going Forward

For every deal I look at:

Cash flow must hit Day 1
DSCR must be strong (over 3 ideally)
Yield must be high
Appreciation must OUTPACE inflation

If it doesn’t check all four…

👉 I walk

How I Explain This to Agents, Sellers, and Lenders

Simple version:

“I’m not buying based on hope. I’m buying based on performance.
If the asset doesn’t outpace inflation and produce income now, it’s not a real investment — it’s just exposure.”

Final Thought

This is the shift:

Poor investors chase price
Smart investors chase cash flow
Elite investors control structure AND beat inflation

That’s how I move.

Structure over sacrifice.
Stewardship over struggle.
Every deal builds legacy.