Breaking News: Bank of Canada cut rates. Actually, we're certain that's old news by the time you read this.
More on that in a second...
We are finalizing our summer plans and it's hitting us that way too many people are waiting to live life on their own terms.
That picture is from the local beach bar at one of our favourite beaches by our condo on the Adriatic Sea in Croatia.
Can't wait to get back to that exact spot.
That was last summer...and it marked the 14th summer we've enjoyed some European fun since 2009.
The purchase of that condo cost us at least four Hamilton single family home rentals.
But neither of us regret it for a second.
We bought it when I was 36 years old, had two young kids, a mortgage on our Oakville home...it took all the liquid cash both Nick and myself had at the time to buy that condo.
It felt risky, but turns out it was one of the best moves we've ever made.
Looking back on the last 20 years, it's become obvious that everything that we thought was risky was actually the right thing to do.
Buying our first rental properties in our 20s...risky.
Focusing almost exclusively on student rentals early on...risky.
Flipping properties in our 20s...risky.
Quitting my job as a programmer at RBC to go into a lowly "tech support" role at Oracle...risky.
Jumping into straight commission sales and taking a lower base salary to do it...risky.
Testing out rent-to-own as an investing strategy when almost everyone told us "no one did that"...risky.
Venturing into Hamilton for properties when Mississauga and Burlington got "too expensive"...risky.
Quitting my corporate job with a spouse at home, a mortgage and two young kids...risky.
Using ugly direct response marketing instead of traditional corporate, "professional brand building"...risky.
Starting our own brokerage...risky.
Sticking with single family homes as our primary focus and not jumping into the hot condo market with other investors...risky.
Calling the brokerage "Rock Star Real Estate", LOL...risky.
Buying Bitcoin...risky.
The list goes on and on and on.
Here's the thing...
All the best things we've managed to do have been things people have told us are "risky".
But reflecting back on each of these things, they now seem like they weren't risky.
That's the wrong framing entirely.
They were just moments where we decided to learn new things.
Expose ourselves to new environments and new ideas.
If fact, it would have been much more risky to have stood still and NOT made each of those moves.
We're not saying we're some magical superheroes sprinkling good fortune everywhere we go.
But we are saying that each of those uncomfortable moments helped us create a life full of freedom and purpose.
And that without those decisions we would have been left wondering what could have been.
If you're going to live life on your terms...you're going to have to make some decisions that scare you. Decisions that others deem risky. Decisions that may not seem logical to those around you.
Heck, our own father thought I was absolutely nuts to quit a high paying corporate job in software to go into "real estate".
He had almost lost everything with real estate in the 1990s after all.
I think he almost passed out when Nick bought his first house to "flip" in his early 20s and now here I was quitting a perfectly great job.
Listen, we're not saying you should run out and burn the bridges behind you.
But push yourself to explore things that you feel are calling you. Take the time to journal and think and meditate on what you want your life to look like.
Do some deep, deep research on what comes out of that.
Surround yourself with the people doing what you want to do.
Life is freaking short...heck, my little brother is 46 years old, I'm 51!
Take daily action towards your ideal life. Even if that means doing 20 minutes of simple research on your subject matter each day.
Don't doom scroll social media for the rest of your life.
You can live life on your own terms. Many are doing it. You can absolutely do it too.
OK, back to the Bank of Canada for a second...
To all the "real estate bears" out there: of course they were going to cut rates eventually. This has nothing to do with real estate and everything to do with "real rates". A debt-based system collapses with positive real rates and debt-to-gdp over 100%. Do a bit of research.
To all the "real estate bulls" out there: leverage with rental property is one way to outpace monetary debasement but it has risk...as everyone knows by now. Don't get carried away with leverage. Yes, your hard assets are likely going up in dollar terms. But get too cocky and you can get wiped out. A lot of people forgot about the importance of positive cash flow. Don't forget. Don't overextend.
And remember...
You don't make money "timing" the market...you make money with time "in" the market.
What will the Bank of Canada do next?
Likely cut more, we assume, unless inflation gets really, really hot.
You just cannot hold rates this high with CPI inflation lower than the current rates.
The math on that just doesn't work.
In that environment, the debt is growing faster than the GDP and the system is then suffocating itself.
There's simply not enough dollars in that environment floating around to make interest payments. It leads to a systemic fault.
If you're looking for a good book on how the banking system works check out one of Layered Money, by Nik Bhatia, or Broken Money, by Lyn Alden.
And remember...
When we bought that condo on the Adriatic I had just quit my job, the Great Financial Crisis was in full swing, and the doom and gloom in the media was loud.
We blocked it out.
Today, it's easy to get caught up in the doom and gloom...especially with social media.
But there are opportunities everywhere.
Decide how you want to live, make a plan, and start working towards it.
Make it so. You can do it, we know you can.
In fact, we need you to. We're all better off if you're living your best life.
Until next time...
Tom & Nick
p.s. Almost forgot...next Wednesday, June 12 we are hosting a 30-min class on one of the best strategies we've used in our real estate investing. We'll be diving into what it is, how it works, why it works, what properties it's best used for, and how to implement it. Check it out here.