That’s the evening view from our balcony in Croatia.
The small town on the coast and the Adriatic Sea provide a pretty powerful scene at night…every night.
Our 85 year old father just got back last night, so we’re now all back home, and I’m not gonna lie…I’m ready to go back, LOL!!
Summer living is pretty simple when we’re over there.
Beach. Salt water. Olive oil. Wine. Fresh seafood. Family time. Rinse. Repeat.
Most of life is pretty simple really.
We tend to over complicate things…especially in the modern world.
Even investing and “getting ahead financially” is pretty dang simple.
Check out this chart of GTA home prices from TRREB (Toronto Regional Real Estate Board)…
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From 1978 to 2023 real estate prices went up…6.5% compounded annually.
From 2001 (the great tech crash) to 2023 real estate prices went up…7.1% compounded annually.
From 2008 (the great financial crisis) to 2023 real estate prices went up…7.5% compounded annually.
So we have a pretty long timeframe to conclude that real estate prices go up annually in the 7% range.
Or said differently, our currency is getting debased at that rate.
So what happens if we extrapolate out the average GTA property price another 10 years?
If we take the 2023 average price of $1,126,254 and compound it at 7% per year for 10 years we get…$2,215,512.
Wild, eh?
Now the real estate bears reading this will scream, no way, impossible!!
But remember, this actually has very little to do with real estate itself.
Real estate is a huge piece of collateral for the global financial system.
Why would those powerful bankers let these trends change? It would threaten the very system that they profit from.
Keep printing new money, keep lending money, keep increasing debt (because they have to), keep the party going.
I mean, this could be a simple way to look at things but we’ve learned that the simple approaches are the best ones because they often cut to the heart of the matter.
And the heart of the matter to each of us is this…we must each beat 7% a year with our incomes and investments, at a minimum, to keep up.
If we want to get ahead we need 10%, 12%, 15% growth or even more.
And this is where things get a tad tricky.
We ran income growth in Canada and it’s growing at a measly 3% per year.
We broke it all down in this new video, Why Canadians Can't Afford a Home.
You’ll see in that video the spread between incomes in Canada and property prices are diverging at such a rate that it’s accelerating the wealth gap in this country.
There are simple ways to outpace this 7% number, in our humble opinion:
Simple is good.
There are risks to all of the above of course. But risk is required for reward. Welcome to capitalism. The great reward is your great opportunity.
Life is simple.
Math is simple.
Good food is simple.
Living life on your terms is simple.
Block the noise, focus on what’s important, and live life on your own terms.
You can do it, we need you to.
You living life on your terms makes the world a better place for all of us.
Enjoy the weekend, everyone!!
Tom & Nick
