Tom’s off to the Dominican with Nick and the families, which means….
Time for another weekly email hijack!
Have you watched the movie The Big Short?
It’s from 2015 and it talks about the 2008 housing crash in the States.
Specifically about how one investor, Michael Bury, was the first to notice the US housing market was propped up by bad loans (aka subprime mortgages).
Once he realized the market will come crashing down when these borrowers eventually defaulted, he decided to do something no one had ever done before: bet against the housing market (or, ‘short’ it.)
The big banks he went to were more than happy to take his bet because they believed the housing market was only going to go up.
Of course, we all know how that turned out.
But anyway, it reminded of the general sentiment of the housing market here in Canada. Some people think prices will come down further, others disagree.
In between them though, young people are looking around and saying “you know what? I can’t wait for the housing market to be affordable. I’m leaving.”
And many are.
In the last two years, Ontario saw more mid-20-year-olds leaving the province than any other age group.
Mainly because many of them realized they could get bigger homes for a lot cheaper elsewhere.
But just like in the movie, there are those who spot a trend and decide to leverage it to their advantage.
Michael Bury wasn’t the only one to short the housing market back in 2008. A few other investors caught on and decided to make their own bets (two of them were in their 30s at the time).
In a similar way, not all young people in Ontario are leaving the province because of high home prices. Some are in fact staying here and BUYING as many homes as they could.
One of them is Victoria Suen, who bought her first property at 19. We’ve had her on the podcast before and she’s an absolute inspiration, both as a young person and a woman.
Another is Connor Eagleson. And Anthony Molinaro who works as part of the team here at Rock Star.
And there’s me. Last year, I bought an investment property with my sister, shortly before home prices started to dive downwards (I know, great timing, right? Lol).
While I don’t think home prices only go up, I do think over the long-term, real estate outpaces both inflation and wages.
Which is crazy…but that’s the way it is.
Yes, there are other things to invest in. But to me, real estate will always have a place in the future.
As AI and automation improve over the next few years, many jobs will be at risk. But people will always need a place to live.
From that perspective, owning real estate makes me feel like I have control over my future.
So, if you’re a 20 or 30-something reading this and thinking you’ll never be able to buy a home here, don’t give up!
Check out what young people like Victoria, Connor, and Anthony are doing to buy real estate. If they can do it, you can too!
And if you’re a parent to a kid or Gen Z, there are things you can do to help.
One way is to learn everything you can about money, the economy, and the global markets.
Yes, I know a phone call with your in-laws sounds more exciting than this, but trust me…as a Millennial myself, this is something I wish my parents told me about sooner.
You’ll be giving your kids a massive advantage in life by learning these things and passing the knowledge onto them. Getting them involved & aware of what’s going on will give them a sense of control in the unknown future waiting for them.
You can help in other ways too if you can, but knowledge is the most valuable thing you can give to empower someone to make their own choices.
Anyway…that’s just my two cents.
Highly recommend you check out the Big Short if you haven’t.
And if you have, feel free to hit reply and share what you thought of it!
Tom will be back for next week’s email (likely with updates on what's happening with the banks and the Fed in the U.S.), so stay tuned.
Until then…have a great weekend!
Rock Star Team