Mike Swenson - From Tesla to Target: Real Estate vs. Stocks When Executives Cause Chaos
In this episode, From Tesla to Target: Real Estate vs. Stocks When Executives Cause Chaos, we dive into how high-profile scandals and polarizing decisions from executives at companies like Tesla, Target, Bud Light, and Cracker Barrel have shaken investor confidence and sent stock prices tumbling. While Wall Street investors are left riding out the volatility, real estate investors enjoy more control over their financial future through steady cash flow, appreciation, tax benefits, and equity growth. Tune in to discover why real estate investing provides stability, predictability, and long-term wealth-building opportunities that the stock market simply can’t match.
In this episode, you will be able to:
- Discover how investing in real estate can build long-term wealth and provide stability different from what other assets offer.
- Compare real estate and stock investments to understand which options give you control and growth potential.
- Unlock the secrets to taking charge of your real estate investments for better portfolio management and tangible asset growth.
- Learn how executive decisions impact stock and why this matters when you may want more control over your investments.
The key moments in this episode are:
00:00:00 - Understanding Control in Real Estate vs. Stock Investing
00:02:40 - The Tangibility and Management Benefits of Real Estate Investing
00:05:45 - Risk and Lack of Control in Stock Market Investments
00:08:45 - High-Profile Stock Controversies and Their Impact on Investment
00:13:18 - Control and Cash Flow Benefits in Real Estate Investing
00:16:38 - Tax Advantages and Equity Buildup Through Real Estate Ownership
00:18:26 - Portfolio Diversification and Passive Syndication Benefits
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Full Transcript Here:
00:00:00
I don't have a direct say in who those people are that are hired as executives, what they do, what the company's actions are. And ultimately, if they made a decision like that and I all sudden disagree with it, stock drops, then I want to sell my shares. Right now. It's a moral decision mixed with a money decision. And I've got to decide, am I going to sell when it's low and lock in those losses, or am I going to wait it out and see what happens?
00:00:22
I don't know. Welcome to the Real Freedom show, where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson. Let's get some real freedom together.
00:00:43
Hello, everybody. Welcome to Real Freedom. I am your host, Mike Swenson. If you want to get started on your real estate investing journey, check out our website, Freedom Through Real Estate Dot com. That's Freedom Through Real Estate Dot com.
00:00:57
We've got lots of great information out there for articles, past episodes, blogs, you name it. To help you find a path of somebody that's maybe been on our show before and might resonate with you, find a topic, a certain area of real estate that you want to pursue that resonates with you. And so that's why we exist here, to be able to highlight awesome people doing great things in real estate and to inspire you to take action. And so today's episode is a little bit different. I try to do some episodes where I get a chance to share some information myself, not have a guest on and just kind of get a chance to talk about things.
00:01:28
And so one of the things that I wanted to talk about today is, you know, we address what are some reasons why people choose to invest in real estate versus investing in other things. And so today, the main focus of our topic, at least at the beginning of the episode, is we're going to cover why people who invest in real estate like the fact that they're in more control of their asset. There's a tangibility to it that you see versus investing in stocks or mutual funds or other things like that that aren't physical, tangible things. And so I'm not saying everybody's not comfortable with it. You know, I should start with a disclaimer.
00:02:05
This is not real estate investing advice. This is not investing advice in general. I'm just sharing some examples of some things that people who have invested in real estate seem to resonate with. And so just something for you to think about. If you haven't invested in real estate, if maybe you've invested in stocks before.
00:02:21
Just some things that I've heard from feedback from people about why they really enjoy investing in real estate. That being said, I'll also add a second disclaimer. Right. Make sure you diversify because stuff happens. And so if you want to primarily be in real estate, great.
00:02:35
If you want to diversify into other areas, great. I will also say inside of real estate, there's lots of opportunities to diversify as well. So that being said, I want to talk a little bit about just that tangibility. And so today's episode, we're actually classifying as from Tesla to Target real estate versus stocks when executives cause chaos. And so the longer that I've been investing in real estate, the more that I do appreciate that control aspect where I know what my money's invested in.
00:03:04
Some of our properties are, you know, an hour away, two hours away, some are maybe five or six hours away. That being said, I can go touch that property, right? It's a physical thing. Not only is the, the property itself valuable, the land that it's built on is valuable. There may be times down the road where, where we decide, hey, you know what, maybe we, we knock this property down.
00:03:25
If it's getting up there enough in years, maybe the zoning has changed, maybe some new opportunities have changed, maybe we acquire a nearby lot and it provides an opportunity to build something. So while the property itself has value, the land that it's built on also has value. And so there's lots of different ways that we can add value to what we own. And so I like that piece. I like the fact that we have a say over who we hire.
00:03:49
Right, to manage that property. So as of right now, this record, we've chosen to work with property managers versus self managing. You know, I think for me, I just at this point I really don't have a desire to self manage. And we have some great relationships that we're trying to leverage more and more of, of people who do a great job and enjoy managing the properties for us. And so we work hand in hand with them.
00:04:11
I like the fact that the person that's responsible for finding tenants and placing tenants has a criteria in place. I can see what that criteria is as it comes to credit, background check income, that sort of stuff. You know, we have le that, that we have control over what's on that lease, what we're asking the tenants to do, what happens if they don't do that? Obviously some of this stuff is, is out of our hands, right? Regulations from the city, the county, the state, how they decide to handle tenants is a little bit of outer control.
00:04:40
But we can also then choose to go invest in a state where it does meet our needs. And so just kind of that control piece is, is really what we're kind of focusing on here. That being said, contrast that with stocks. You know, I don't know what strategy you guys have used in the past for picking stocks or picking mutual funds or you know, when you invest in an ira, you might just pick, you know, here's a, here's an IRA based on my retirement year and then they automatically allocate things. And so I know for me and for my wife, when we chose those, I didn't really know what stocks we were investing in.
00:05:11
I didn't know where our money was going. Some of it was here locally, some of it was international stocks, bonds, mutual funds, that kind of stuff. And so I didn't really know where my money was. I was just going picking a stock based on past performance or projected performance or risk tolerance. So I didn't really have a handle on that.
00:05:28
And the other thing that's really been a little bit more of an eye opener for me, the more that I invest in real estate, is how we don't have control. What happens with these companies that we may invest in, right? We might pick good people and yet things change, right? Like in Apple, when Steve Jobs stepped down, their stock went down. And now I will say the examples that I'm giving here, once stocks go down, people see, hey, maybe it's on discount, we pick some of those stocks back up.
00:05:54
The bigger point here is as we have much less control over what happens with some of these companies. And so as of right now, the hot topic as of when I'm recording this is Cracker Barrel, right? So I've got a couple of blurbs here that I, that I'm just going to read from each of these companies that I'm giving examples. So cracker barrel, right? August 2025, they launched a $700 million rebranding effort under their CEO, replacing their old logo with a minimalist kind of text only design with an attempt to modernize the brand, right?
00:06:24
And in the interviews we them say, you know, we polled our stores, they really like this modern brand, they really like what we're doing. We've heard great feedback. This goes public and all heck breaks loose, right? So within days, Cracker barrel stock plunged 7% on the announcement and ultimately dropped 12% within that day, erasing nearly $100 million in market value. And all this criticism came down and what ended up happening, they said, hey, thank you so much for giving us our feedback.
00:06:54
We are in line with our. Our customers and their wants, and they get to express their opinion. So, you know what? Actually, we're going back, right? So $700 million spent on rebranding.
00:07:05
That was just an oops. And, you know, for me, those are the stories that resonate with me of, like, I'm not confident in that if I'm choosing something that I have more control over versus something like that. Don't get me wrong, I love eating at Cracker Barrel. Our family just went there a couple months ago, really enjoyed it. Awesome restaurant.
00:07:22
If I decided to put my money there and something like that happened, and now I'm in my low 40s, right? Anything that happens, there's some time to make it up. What if I didn't have time to make that up right in my investments? And so that's the thing that as I get older and older, I like that idea of being more and more control, right? So that's.
00:07:39
That's Cracker Barrel. Another example, Bud light. Bud Light 2023 partnered with a transgender influencer in a promotional campaign tied to March Madness. The move got immediate backlash, leading to widespread boycotts of Bud Light and other beverages that they also owned. And so you had high.
00:07:57
Prof. Creators, celebrities, that sort of thing that were expressing their concern and the financial fallout. So this happened in April. Mid April, Bud Lights weekly sales had plunged 21%. Off premise sales were down 26% by early May.
00:08:12
Revenue fell 10% over the second quarter, and operating profit dropped by nearly 30%. The company potentially lost up to $1.4 billion due to the boycott. Now, whether you enjoy Bud Light, don't enjoy Bud Light. Obviously who they hired didn't seem to match well with their brand. So this isn't about who it is.
00:08:31
It could be anybody that they chose that the, you know, the company didn't like. So whether it was a transgender person, whether it was somebody else, the example that I'm giving here, just to be clear, is not about who it was. It's that executives made a decision on the company. I have my money invested in Bud Light. All sudden, executives make a decision that tanks the stock price, right?
00:08:54
So depending on who it was, right. It could have been Taylor Swift. And, you know, for some reason, people didn't like Taylor Swift being associated with Bud Light, right? So it's not about who it was. It's about the decision that's outside of our control.
00:09:04
So that's what I want the focus to be on here is a decision that's outside of our control. Dropped $1.4 billion in sales potentially due to that decision. Another example, example number three here we've got Tesla. So Tesla's had a couple here in the last few years. So we've got September 2018, Elon Musk appeared on the Joe Rogan Experience and took a puff from what was described as a marijuana and tobacco joint.
00:09:28
Immediate backlash the following day. Tesla Stock dropped roughly 6% by close and had fallen as much as 9% throughout the day, making it one of the sharpest single day declines in months. Right. So CEO goes on a podcast, commits some sort of action, right? Agree or disagree, doesn't matter.
00:09:46
And all of a sudden, boom. Potential 9% of your, you know, let's say you put a hundred thousand dollars into Tesla, now you're at $90,000, right? And so over time, right, I'm not, I'm, I'm kind of leaning at more of the short term decision here. Over time that changes. June 2025, we all know about Elon Musk's relationship with President Trump.
00:10:05
You know, Trump announced the big beautiful bill and Elon came back and said it was a disgusting abomination that slashed crucial electric vehicle tax credits and threatened government contracts. And so that clash, Tesla Stock tumbled approximately 14% in a single day, marking the largest one day drop in years and wiping estimated 150 to $152 billion in market value. Right? Political disagreement, $152 billion in value of this company. Now what changed in that company?
00:10:36
And in some of these cases, right, the value of the company, it's still the same company, but it's the public perception, it's the media backlash and all that kind of stuff, it's that sends these stocks all over the place that causes concern. And then the last example that I wanted to give here is Target. So January 2025, Target announced it would phase out several long standing DEI initiatives as part of its new branding strategy. Sharp backlash, civil rights leaders, socially conscious consumers protested a 40 day consumer boycott. Target stock fell roughly $27 per share, collectively erasing $12.4 billion in market value.
00:11:16
And in February, the state of Florida filed a lawsuit in accusing Target of misleading shareholders about risks tied to its DEI changes. And so additional follow up from that. So the reason I give a few of those examples is think about what you're investing in. I want to be clear, I'm not endorsing or not endorsing any one of these companies, any one of these people that were mentioned. It's more about I don't have a say in that decision and what happens.
00:11:42
I don't have a direct say in who those people are that are hired as executives, what they do, what the company's actions are. And ultimately if they made a decision like that and and I all sudden disagree with it, stock drops, then I want to sell my shares right now. It's a moral decision mixed with a money decision. And I've got to decide am I going to sell when it's low and lock in those losses or am I going to wait it out and see what happens? I don't know.
00:12:05
And so that's what I want to talk with you about. If you've considered investing in real estate and you feel like real estate is risky, go back to these right? There's a lot of risk in investing in the stock market. Are you looking to get started or scale in real estate investing but don't know your next step? Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence and managing properties on top of it?
00:12:27
Go ahead and push the easy button and invest with us. Real estate investing is what we do full time. We've done dozens of deals with hundreds of doors. We have the knowledge and experience to hand pick the best deals that most investors can't find. We've got large off market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own.
00:12:47
The best thing is it's 100% passive to you for less capital than you put down trying to acquire a property on your own. Don't let this year go by where you don't make the leap, add to your portfolio or you just sit in analysis by paralysis. To find out more, visit freedomthroughrealestate.com and click on Invest. You can book a call and learn more there. So get to scaling your portfolio now with us by your side.
00:13:11
And so what I do want to close with the episode with is just share a few of the things of how you can feel in control of your investment. Right? So I've covered this before. It doesn't change, right? The cool reasons to invest in real estate don't necessarily change over time.
00:13:26
It's kind of the tried and true cash flow from rental income, residential, commercial properties. Right? Generate income, you control rent pricing. So if I want to try to squeeze out a little bit more of rent, I can do that. If we're making the mortgage payments.
00:13:40
We're. We're hitting what we want to hit. And we don't have to increase rents. I don't have to increase rents, right. I can work with my property manager and I can set that strategy.
00:13:48
Tenant selection, right? I get to control how strict or lenient I am on tenant selection. Who are the people that I'm allowing. Now, that being said, we can't discriminate, right? So we have a universal boundary of here's who we're selecting or here's who we're, you know, here's kind of the criteria of who we're selecting.
00:14:05
And as long as those people fall within that, right, you're either accepted or you're not accepted. And so you have the power to be able to do that. You also have the power of expenses, right? Trash company bills get a little high. I can go call out to other trash companies and find out if I can save some money if I want to, you know, implement something else.
00:14:22
Something like solar panels, right? I get a decision, do I want to put solar panels on the top of my building that might save me money down the road, what types of light bulbs I use, how I want to control utility costs, Whether I pay it, the tenant pays it, right? I am in control of that decision now. There's some costs associated with it, but I get to be the one that makes those decisions about how my asset is performing. Appreciation and value, right?
00:14:45
Number two here. Real estate typically appreciates over time, right? Short term, sometimes there's blips, right? Stocks, there's blips. Real estate, there's blips.
00:14:52
But over time, we tend to see that those values appreciate. A stock may not necessarily appreciate if it's a stock that's going down like a Blockbuster Video or something like that. When it's starting to go down, you don't have a say over how it goes back up, right? And so in real estate, sometimes those values go down over time, though, they tend to bounce back. And so if I pick a bad stock, I can't get that chance to get my money back, necessarily.
00:15:19
In real estate, if I can choose to wait longer, those values tend to recover. I am a shining example of that. Our very first rental property that we had, or our first property we had, we turned into a rental property because the value got cut in half, right? I didn't have control over that. I decided to hold for the next 10 years, and values came back, and we ended up turning that bad story into a great success because we made Money at the end of the day because we held onto it.
00:15:44
So that's the appreciation in commercial property. So kind of reason number three here why I like investing in real estate. We forced appreciation in commercial real estate. It's really income goes up, expenses go down, and the value of the property goes up. So if I want the property to be worth more, how do I find ways to increase income?
00:16:02
How do I find ways to decrease expenses? And for those that maybe haven't, haven't known or looked into commercial real estate, right. There's a cap rate. And that cap rate helps to dictate kind of the price of the property. And so I can have control over that cap rate by how I manage the property, the expenses that I choose.
00:16:19
I can also choose if I want to get more rents, maybe I sink some money into it. I put in some new floors, put in some new kitchens, dishwashers, improve the landscaping, help the curb appeal, make more tenants want to come in there, maybe be willing to pay a little bit higher price. I have control over that through the decisions I make working with our property manager. Tax benefits and deductions, right? There's a lot of great depreciation.
00:16:42
I'd love to talk more about the tax benefits. It's a little bit more tricky because everybody has different situations. For us personally, the more property that we own, the better our taxes have turned out. Right. We have more depreciation.
00:16:54
We do cost segregation studies, which accelerates that depreciation during the hold period and so puts a little bit more cash into our pockets. And so there's some great benefits there. You get to deduct the interest. 1031 Exchange. Right.
00:17:07
If there's a taxable event, we can defer that by choosing to do a 1031 exchange. So there's a lot of great tax benefits and deductions out there that we can take advantage of. Equity buildup, right. This is kind of a sneaky little one, which I love. With every mortgage payment, you increase your ownership stake.
00:17:24
So for me, going back to my initial townhouse example, because we were kind of stuck, right? And we had to hold onto the property. The rent was basically covering the expenses every month. So we were kind of cash flow neutral. But every month, when I would go look at that mortgage statement, I'd see it would go down by 200 bucks, 300 bucks.
00:17:42
Then it was like 350 bucks. Then it was 400 bucks. When we sell that property, you see those benefits, right? You may not see it month to month, but it's a Lot harder to set aside $400 a month to save than to have somebody paying off your mortgage. And that $400 is going back into the bank over time.
00:18:01
Right now, on some of our larger apartment buildings, I'm seeing 1,000, 2,000, $3,000 a month. Now we're sharing that with other owners, but that's the amount of principal that's being knocked off those mortgage payments every single month. And so it's that slow stuff, right? Real estate get rich a little bit more slowly. But all these little buckets, all these little cool things that are happening compound over time, hedging against inflation.
00:18:26
So this is number six on my list here. As inflation goes up, we have a little bit more control over that because the cost of living might go up, so we might be able to increase rent. So it's just a little bit of a hedge against inflation there by owning rental property. Portfolio diversification, right? So I can diversify the types of properties I invest in, the areas I invest in, the asset class that I invest in.
00:18:49
I could invest in a single family home in Washington, I could invest in a multifamily property in Florida, I could invest in a mobile home park in Maine, and I can invest in a hotel in California. Didn't even mean to have the Hotel California reference. I just came up with that one on the fly. Right. You can choose all those different asset classes and you could diversify yourself.
00:19:11
So lots of different things that you can do within housing to be able to diversify yourself. And then syndications, right? So syndications is an opportunity to be more passive. Now, that being said, anybody who's invested in our syndications has my phone number, my email address, and probably can find my mailing address and show up at my door and say, what's going on with the property? And me hopefully being a good syndicator, will answer them.
00:19:38
Right. Do you have the CEO of Target cell phone number, email address and address where you could go talk to them if you're like, hey, stock's down a little bit. What are you planning on doing here? Right. And so while in a syndication, there's more of a passive feel to it.
00:19:52
You maybe don't have direct control over each and every decision. You're getting updates and you can call, and if you're pissed at me, you can call me and tell me you're pissed at me, and I'll listen to your feedback. And then my job is to, to be able to be a representative of you and to honor the strategy that we've put in place for how we are going to manage that asset and then upon sale, you know, return that capital back to you and decide what you want to do with it afterwards. And so there's, there's an ability over time for that to grow more and more passive, to have more and more income coming in consistently. So those are the, some of the reasons why I feel like for people that maybe haven't invested in real estate or haven't done much of it, you actually do have a lot more control over what happens than you think you do.
00:20:35
And so just contrasting that to stocks, like I mentioned, the examples that I gave are more public examples. Yes, I totally understand. Stocks go down, sometimes they go back up. It's just that feeling of I don't have control or I have much less control over what happens in a real estate that I wanted to highlight here for you. And so if you're considering investing in real estate, if you're kind of toying around with what do I do, what asset classes, I'm always here to help.
00:21:01
If you go to freedom through real estate.com we have all this information. There's ways where you can reach out to me, connect with me, happy to guide you through, happy to answer questions that you have. And so that wraps it up for today. From Tesla to target real estate versus stocks when executives cause chaos. Hope you guys enjoyed that.
00:21:19
It's once again, like I said, the information as far as why invest in real estate, that doesn't really change and it's not planning on changing. But it's also good to be reminded why I do what I do, why I continue to invest in real estate and why I'm sold on the benefits of this versus other asset classes. And I know, like I said, we're going to diversify, we're going to do different things, but for me, that's the reasons why I love real estate. If you've got any questions, feel free to reach out. Like I said, go to our website, let us know if you have any questions and hope you guys have an amazing day.
00:21:48
Sam.
