Bank Failures, One Million Population Growth - What is Going On?

Message from Tom & Nick

What is going on?

How did Ruben Furtado and I find ourselves standing next to a Yeti in the Dominican Republic last week?

So a bunch of us took a March break trip together.

My family, Nick’s family, Mike Desormeaux’s family, and Ruben and his wife, Lore.

Well it turns out that right next to our resort they were doing a test open of the Dominican’s first World Class level theme park.

So after dinner we found ourselves walking over and checking it out.

And to our surprise we were the only ones in the place and it was fully staffed!!

They had rides, amazing mini putt, tree-top trekking, obstacle courses, 3D adventures, and it was all empty except for us! LOL!

It’s called Katmandu Park in Punta Cana, and that Yeti was right at the front entrance so we naturally stopped and took a picture.

The families had a blast. We went back four or five times throughout the week.

And while we were there I kept asking myself…

What is going on with the banks in North America?

And what is going on with Canada’s population growth?

If you haven't already heard by now, a few banks down in the U.S. closed down unexpectedly over the couple of weeks.

You see, our entire banking and financial system is a game of confidence.

There’s not enough actual dollars in existence to pay everyone out on the balances of their deposits and investments.

So if everyone runs to the bank and asks for their money all at the same time…there’s a problem.

Could this happen here in Canada?

Well, of course, it could. Is it likely? Probably not, no.

But you should be aware that it’s a possibility, of course.

As our friend Greg Foss would say, risk happens fast.

If you wait to have some of your net worth out of the system until there’s a problem it’s likely too late.

In this week’s Rock Star Minutes episode, we chat about what happened with the U.S. banks and how it happened.

You can watch it right here:

Check out this chart from yesterday:

Canada’s population grew by 1,050,110 people in 2022.

Our total population is now 39.5 million.

We are growing incredibly fast.

Our hospital beds, our highways and transit systems, and our housing supply cannot keep up.

And this is why when people ask us about housing prices in this area we’re very bullish.

We’re big believers in riding trends when it comes to business and investing.

We now have two very strong trends happening right here.

1. First, our family formations in this country are outpacing supply. This means both rentals and housing prices will likely continue to trend upwards in our opinion.

Short-term, anything can happen of course. But longer term this is bullish.

We need 1.5 million homes to be built in Ontario over the next ten years to meet demand and we’re nowhere close.

In fact we rarely, if ever, build over 800,000 in any ten year period.

Check out this tweet from Mike Moffat:

2. Second, your Canadian dollar will continue to be devalued.

Debts are high, rates are relatively high, there’s no way the country can operate without printing more dollars.

This means hard assets, like real estate, gold and Bitcoin, will likely go up in dollar terms over the next ten years.

It’s as simple as that (again, in our humble opinion).

Unless the government magically cuts spending, or magically grows the economy by some huge amount, they’re going to create larger and larger deficits to survive.

The value of the dollars in your bank account, your income, your dollar denominated financial instruments…will all lose value in the coming years.

It’s sad, but it’s just math, and we don’t see another way out.

Inflation, financial and bank crises, and more inflation will be the theme of the next ten years.

This will bring price volatility in dollar terms like we are not used to in Canada.

Buckle up, wild times ahead.

But not all is lost.

We believe if you have some of your net worth…1%, 3%, 5%, 10%…whatever makes sense for you, out of the system you’ll be just fine.

That means hard assets that are in your name (like residential rental property).

Businesses that you own and control (not stocks).

Gold coins or bullion in your direct possession.

And of course, Bitcoin…you’ll not only survive, you’ll likely thrive over the next few years.

This is the time to keep educating yourself on what’s going on.

And if you’re ready to dive into real estate investing you can come out (via Zoom) to our next Introductory Real Estate Investing Training Class by saving yourself a spot here.

We’ll share how we’re working with investors right here in Ontario to find good properties in good areas.

We’ll chat about student rental trends (wait until you hear the latest rents!), rent-to-own strategies, legal duplexes, BRRRRs and more.

The next class is on Tuesday March 28, 2023.

We’ll stick around and answer all questions you have too!!

Remember, there’s a lot of weird stuff happening but you can live life on your terms if you stay ahead of the trends.

Education, curiosity and knowledge are your keys to personal success.

Keep going…and if you find yourself at Katmandu in Punta Cana make sure you look for the Yeti!! He’s amazing, LOL!

Tom & Nick

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