Meet Penny!
That’s my (Nick) daughter’s horse.
Actually, we lease the horse so we can give it back if it starts causing us too much trouble.
A horse is one asset, if you can call it that, that we’re not interested in owning.
I joke sometimes that it literally eats your money and leaves it scattered all over the barn floor to be scooped up…maybe that’s too much information.
But it definitely doesn’t produce any positive cash flow for us.
This past weekend my daughter had her final horse show of the season so I spent a lot of time with Penny over those four days.
She can be a bit grumpy but overall I like her.
We don’t have a dog or cat.
This is our family pet.
So when I hear Tom comment about how much he invests into his family dog, Millie, every month, I just laugh.
I still wonder why my daughter couldn’t take up soccer.
The cost of some nice cleats and shin pads seems a lot easier to swallow than the amount we spend on a stall, feed, a farrier, transportation, vet if needed, and other random bills that come our way every month.
And apparently it’s not enough because this weekend when I was trying to help clean her she tried to bite me multiple times.
I guess it’s time to revisit her diet!
Seriously though, I feel fortunate that we’re able to do this for my daughter because she absolutely loves it and lights up when she’s riding Penny.
And the gains from real estate over the years definitely plays a role in making it happen.
Speaking of real estate, the federal government just announced some big changes to mortgages this week.
What does this mean?
It will likely spur some demand, and if history is any guide, this isn’t going to do much to lower real estate prices.
Monthly payments for some people may be more manageable in the short term, but beyond that easier access to money almost always ends up putting upward pressure on prices.
Unless the supply side of the equation is fixed, this time won’t be different.
Tom and I have said on many podcasts that longer amortizations were coming.
It just felt like the natural thing for the government to do so they can position themselves as the ones helping everyone afford a home.
A number of countries have mortgages longer than 30 years.
Canada had 40 year mortgages not long ago, and we think they’ll get longer again over time.
Some people think the approaching election could have been one motivating factor for the change.
Others feel it was to help the construction industry who have seen new home sales plummet, especially in the condo market.
Potentially spurring some sales and get them building new supply.
Both reasons probably play into it a bit.
But what isn’t spoken about is how the banks factor in.
When we have a financial system with such high levels of debt, the value of the collateral used for those loans is important.
Think of all the mortgages on homes.
If the value of all those properties were to drop in any meaningful way, the banks are holding a lot of underwater loans.
Which puts them in a bad situation.
And leads to other problems in the financial system.
That could be playing a role as well.
Even if it isn’t, it’s an added benefit to them.
We always say, “the banks never lose”.
So when people wonder why the government seems like they try to protect asset values, like real estate, this gives you an idea.
In an economy built on debt, the value of the collateral, whether it’s real estate, stocks, bonds, or anything else, plays a vital role.
None of this is just about the price of those assets, it’s about protecting the debt-based system.
It can seem a bit strange.
But it’s why we’ve felt that asset owners come out ahead in this type of system.
And why we’ve been so focused on acquiring good assets for our families while helping others do the same.
Once you realize how this game is played, it’s a roadmap to winning.
The real estate and mortgage markets are always changing.
Not just from these formal announcements but from a lot of things different banks do regularly which never make the news.
If you want to get the absolute latest on everything else going on in the mortgage world for investors, we’re hosting a special free class today at 12 PM.
It will be with Tom and our absolute #1 mortgage broker since the first day we started investing decades ago, Dave Butler.
This guy has seen it all and has always given great insights into the trends he’s seeing and what we need to be aware of.
Here is the link to register.
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Speaking of Tom...
He just sent over this quick video from Dubai.
While there, he counted more than 250 construction projects as money floods into the area.
Even though it’s happening halfway around the world, that matters to Canada and to local investors since it impacts our currency and asset prices.
We’re in a world where so much is linked financially now that what happens on the other side of the globe makes a difference right here for all of us.
It’s a quick 2-minute video you can check out on Instagram here.
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And since it’s only two weeks away, I have to mention the Your Life. Your Terms. Event.
October 5 is when we bring all these types of things together under one roof.
It’s the place everyone benefits from seeing what others are doing.
We’ve hand-picked guests to join us that are taking all these different aspects of real estate, the economy, asset building and putting them together right now for big time results.
We move past the hype that many people focus on and get to real information from real people getting real results.
Ticket prices have already gone up, and they will again. So if you haven’t registered yet, here at the details:
Your Life. Your Terms. Event
Saturday, October 5
8:15AM - 2:00PM
LIVE & In-Person in Mississauga, ON
Full Details & Registration at
If you're an Inner Circle Member, you can register yourself and any guests for free on the Membersite, or by clicking here.
That’s it for today.
I’m off to my part time job as an Uber driver for my kids.
With one stop being the stables to say “hi” to Penny.
Until next time….
Your Life. Your Terms.
Nick
