Comfort and conformity are the drivers here in the States.
The top of the pyramid seems to be running a huge Asch Conformity experiment, with the absurdity-o-meter continuously rising. Everyone knows cow farts / Greta / electric planes / Global Boiling are unfettered nonsense. Because it’s safer to conform and not catch flak on social media - The Vast Herd repeats the clown narrative until it becomes “legitimate”.
It’s simplistic I know, but we have 2 swaths of people: those who just want to be left alone without the clown world rhetoric / rules, and those who simply CANNOT leave you alone and demand you grovel, bow and scrape before The Narrative.
I think we see this in even more stark terms in recent months with current events.
I love finance articles, BUT I really love when you mix finance with life! That’s why I follow you and Ferg. Nice in this volatile time to get investment and life advice! Keep doing it! You convinced to go remote next summer when my rental contract is up, wife is now on board.
Oct 29, 2023·edited Oct 29, 2023Liked by Jordan 🇦🇺
👏 Bravo Hermano - Anyone who enjoyed what Jordo wrote here, I would highly recommend searching for 'The Great Australian Scream' on Youtube, speech by Matt Barrie.. 40-minute speech - but it is bloody scary and enlightening as to what is happening to our country 😥🦘
As an immigrant Down Under, I viewed things from a different perspective. I was a bit shocked. A relative was desperately trying to buy an investment property in a major centre ... while in high school. Within a couple years of graduating uni, their personal debt was into the 7 figures. A precious time of youth and freedom crushed, willingly.
You see, negative gearing RE is free money. Everybody knows that.
The thing is, the politicians are loaded with RE debt. They will take the country down trying to protect their investments.
On being the black sheep ... speaking from experience, it can be a lonely journey. Good on ya though.
I love that at 32 you have the answers. You may or may not want to marry and/or have kids. But people do. So what choice do they have? They can't raise a kid by sitting in a bar in Argentina smoking cigars. They can't even find a place to rent for now while they raise their kids and save to buy. Not anymore. So you will also need to eventually make a choice. Spend your life doing what you do or "settle down" and have kids. At some point you will be sitting there surrounded by 20 and 30 somethings and you won't have anything in common. Nah that won't be you. You'll still relate to the youngsters. Of course you will. You will still be young at heart. But its not your mindset that matters. Because they won't want to hang out with you. The clock ticks for all of us my friend.
Only just catching up with emails but had saved this one so I could eventually send a comment! I couldn’t agree more with you Jordan and I’ve just had a major backflip on buying an apartment.
I had originally bought the small 1-br apartment “off-the-plan” in Aug 2020 at a reasonable price (given it’s waterfront location on the Gold Coast), but with all the supply and credit crunches over the next few years the project faced major construction delays and the contracted builder eventually ended up going bankrupt. The developers managed to secure a new builder a few months ago but I got an email with 2 options: terminate the contract and get a full refund of my 10% deposit, plus interest accrued, plus $1500 to cover conveyancing costs OR continue with the sale but pay an extra 10.5%. This was an extra $45,000 they wanted plus the delays most likely meant I wouldn’t get the $25k new build grant that the govt gave out during covid...so effectively I’d be up for an extra $70,000 above what I had originally expected to pay.
With the rising interest rates, and my unpredictable job as a contract geologist, and the big factor in the eyes of financial lenders - I’m in my mid-60’s, I was already wishing I could pull out of the deal...but wasn’t able to under the original contract conditions. So you can imagine my relief when I not only had a way presented to me where I could terminate the contract, but also get all of my refund plus accrued interest back, but also funds to cover the solicitors fee!! Talk about win-win!!
It’s like a huge weight has been lifted off my shoulders. I’ve been renting in a high rise apartment block on the Broadwater and love the apartment and location, and the managers have only put my rent up minimally, despite huge rental increases overall on the Gold Coast in the past 2 years.
I’ve now seen the light on how much owning a property can tie you down financially and honestly thinking now I am happier renting and investing the money. Renting is by far a cheaper option right now, given the increases in property taxes and also the body corporate fees I would have been up for.
I travel a lot and and don’t want that travel to feel like a guilty pleasure if I had a mortgage and property expenses hanging over my head. It’s a great feeling having zero debts.
I’m hoping to use your conversations to educate myself on how to get an income generation through options and start making the most of my money already invested in the stock market.
I also love hearing your take on the travel lifestyle you lead. I can’t ever see myself not having the Gold Coast as my home base because I friggin’ love this place, but I do love to travel and run marathons all around the world and not being tied down financially has enabled me to do that...oh, that and also being single and free to do what the hell I like when I like!!! Haha! My 3 kids are all in their 30’s, have lovely partners (none are gay, have mental health issues or are WOKE!), paying off their own lovely homes, are good savers and savvy investors in the stock market...they are now officially off my hands and it’s a huge source of comfort knowing they are doing well and setting their own successful paths in the world. Soooo...there’s nothing holding me back from doing what the f*#k I want and setting a new path in my 60’s that I know all my friends envy but would never think they could also do.
You are not alone in your way of thinking...it’s just taken me more than one of your lifetimes to finally get to the same way of thinking.
Brutal with the buying of plan deal. I thought that kind of stuff only existed in this part of the world as I have heard this from many people buying of plan here in Buenos Aires.
Sounds like it's working out well by renting for the time being, and high rise on the Gold Coast sounds great.
In Queensland (and maybe all of Oz) the buyer is protected and the 10% deposit has to be held in a trust account that earns interest and the developer can’t touch it. They also can’t ask for anything more than a 10% deposit until the building has been finished and settlement takes place. I know this isn’t the case in most other countries where not only is the deposit not secured, but they have to pay progress payments, which they can also lose if the building never gets completed...that would be brutal!
When I first paid the deposit in 2020 the market was reasonable and it was a fair price for the apartment but with the additional payments they asked for, it now puts it at market value at the height of a real estate bubble...pulling out was a no-brainer.
Interesting perspective mate, I really appreciate someone with the ability to think critically. It seems that not much thought goes into anything these days; people in Australia either do what the TV tells them to do, or mindlessly ape others (don’t get me started on covid!).
With that said, in the Australian property debate I have found myself in the pro-property camp due to:
- Increasing demand (population growing at 600k/year, or about 2.3% of the total – the fastest growth in the developed world)
- Generational wealth has already been created through property; it has increased by about 7% per year since 1995 - admittedly household debt to disposable income has increased from 50% to 180% in this time. The Baby Boomers have created enormous wealth through property in this time that they will either bequeath to their kids or give them the money to get on the property ladder.
- At the median level, each Australian household has more than half their wealth in Australian property. The average punter is likely to fight tooth and nail to keep their house in the event of a big economic downturn.
- Vacancy rates are currently at crisis levels - 1.1% nationwide (a market in balance would be 2.5%)…people need somewhere to live.
- It is a very concentrated country population-wise – despite its’ size, the vast majority of Australians live in Sydney, Melbourne, or Brisbane. That’s where the high paying jobs are and is likely to continue. This also feeds into the supply issue, people still want to live as close to the city as possible on a good block of land – by definition this supply cannot increase.
- The Government, RBA and other major institutions are very motivated to keep property prices high. 2/3rds of the voting public are property owners and economic stability hinges on a stable housing market.
- Despite the Government’s best efforts, Australia is still in pretty good nick financially. We are blessed with resources we can dig up and send to China; Debt to GDP is only at 40%.
I agree it is basically a Ponzi, but in this area I find it difficult to see compelling reasons to fight the crowd.
Will there be a precipitous price drop? Quite possibly, but I don’t think this is limited to this asset class. There is a sovereign debt bubble brewing (emanating from the US where Debt/GDP is over 120%).
This could quite conceivably cause price drops across all assets, but where is there to hide? You need to put your money somewhere to keep up with the money printing, staying in cash is just about the worst financial decision you can make.
Personally I have some money in real estate, gold and bitcoin and as little money in fiat as possible.
I applaud your ability to swim against the tide and think critically, but I prefer to do that in my personal life and go with the numbers in investing.
Respect for living the life you are though, I would do this myself if it wasn’t for personal relationships here – but something I am definitely open to doing in the future.
Great article. I personally like owning real estate but I agree with you it's NOT always a good idea. Especially at these prices. Prices are insane in places like USA, Canada, Australia. I bought at the bottom in the USA in 2011 and it has gone up 3X. I dumped it all except my primary home in the USA and putting all of that cash in Buenos Aires real estate.
I totally agree about surrounding yourself with like minded people. Life is too short to fake it with people you don't respect.
As an Aussie I tried to put off buying a home for so long and instead was more keen on investing in stocks as it contributes more to society. That's my biggest issue with property investment it doesn't do anything for anyone in the country it just takes away capital where it could be used to help new businesses and make you money at the same time.
The whole rental market at the moment has forced my hand though, it's just a nightmare out there when people can up your rent by $100 a month on a whim.
I'm lucky enough that my partner and myself can both work from regularly (I'm a software engineer) so we were able to buy a place 80km outside of Melbourne, well within our means. With our means being interest < rent, not taking out more than 500k from the bank.
I definitely understand the frustration with the Australian housing bubble but I think there is still a way to just own a nice home for the purpose of living in and not treating it as some wealth bank. Houses should be for living!
Comfort and conformity are the drivers here in the States.
The top of the pyramid seems to be running a huge Asch Conformity experiment, with the absurdity-o-meter continuously rising. Everyone knows cow farts / Greta / electric planes / Global Boiling are unfettered nonsense. Because it’s safer to conform and not catch flak on social media - The Vast Herd repeats the clown narrative until it becomes “legitimate”.
It’s simplistic I know, but we have 2 swaths of people: those who just want to be left alone without the clown world rhetoric / rules, and those who simply CANNOT leave you alone and demand you grovel, bow and scrape before The Narrative.
I think we see this in even more stark terms in recent months with current events.
Very well said Douglas.
Couldn't agree more.
Well said.
I love finance articles, BUT I really love when you mix finance with life! That’s why I follow you and Ferg. Nice in this volatile time to get investment and life advice! Keep doing it! You convinced to go remote next summer when my rental contract is up, wife is now on board.
Thanks mate. Good luck with it all. 🤝
👏 Bravo Hermano - Anyone who enjoyed what Jordo wrote here, I would highly recommend searching for 'The Great Australian Scream' on Youtube, speech by Matt Barrie.. 40-minute speech - but it is bloody scary and enlightening as to what is happening to our country 😥🦘
Yep, great speech. A lot of my thoughts come from Matt Barrie’s work.
100% Jordan. Still living vicariously here.
Thanks PD 🤝
As an immigrant Down Under, I viewed things from a different perspective. I was a bit shocked. A relative was desperately trying to buy an investment property in a major centre ... while in high school. Within a couple years of graduating uni, their personal debt was into the 7 figures. A precious time of youth and freedom crushed, willingly.
You see, negative gearing RE is free money. Everybody knows that.
The thing is, the politicians are loaded with RE debt. They will take the country down trying to protect their investments.
On being the black sheep ... speaking from experience, it can be a lonely journey. Good on ya though.
im surprised 20 years ago people didnt click, its just they are too far down the debt hole to dig themselves out now,,,bummer!
Fire.
🤝
I love that at 32 you have the answers. You may or may not want to marry and/or have kids. But people do. So what choice do they have? They can't raise a kid by sitting in a bar in Argentina smoking cigars. They can't even find a place to rent for now while they raise their kids and save to buy. Not anymore. So you will also need to eventually make a choice. Spend your life doing what you do or "settle down" and have kids. At some point you will be sitting there surrounded by 20 and 30 somethings and you won't have anything in common. Nah that won't be you. You'll still relate to the youngsters. Of course you will. You will still be young at heart. But its not your mindset that matters. Because they won't want to hang out with you. The clock ticks for all of us my friend.
What a way to completely miss the point of this article.
Well done Pablo.
Only just catching up with emails but had saved this one so I could eventually send a comment! I couldn’t agree more with you Jordan and I’ve just had a major backflip on buying an apartment.
I had originally bought the small 1-br apartment “off-the-plan” in Aug 2020 at a reasonable price (given it’s waterfront location on the Gold Coast), but with all the supply and credit crunches over the next few years the project faced major construction delays and the contracted builder eventually ended up going bankrupt. The developers managed to secure a new builder a few months ago but I got an email with 2 options: terminate the contract and get a full refund of my 10% deposit, plus interest accrued, plus $1500 to cover conveyancing costs OR continue with the sale but pay an extra 10.5%. This was an extra $45,000 they wanted plus the delays most likely meant I wouldn’t get the $25k new build grant that the govt gave out during covid...so effectively I’d be up for an extra $70,000 above what I had originally expected to pay.
With the rising interest rates, and my unpredictable job as a contract geologist, and the big factor in the eyes of financial lenders - I’m in my mid-60’s, I was already wishing I could pull out of the deal...but wasn’t able to under the original contract conditions. So you can imagine my relief when I not only had a way presented to me where I could terminate the contract, but also get all of my refund plus accrued interest back, but also funds to cover the solicitors fee!! Talk about win-win!!
It’s like a huge weight has been lifted off my shoulders. I’ve been renting in a high rise apartment block on the Broadwater and love the apartment and location, and the managers have only put my rent up minimally, despite huge rental increases overall on the Gold Coast in the past 2 years.
I’ve now seen the light on how much owning a property can tie you down financially and honestly thinking now I am happier renting and investing the money. Renting is by far a cheaper option right now, given the increases in property taxes and also the body corporate fees I would have been up for.
I travel a lot and and don’t want that travel to feel like a guilty pleasure if I had a mortgage and property expenses hanging over my head. It’s a great feeling having zero debts.
I’m hoping to use your conversations to educate myself on how to get an income generation through options and start making the most of my money already invested in the stock market.
I also love hearing your take on the travel lifestyle you lead. I can’t ever see myself not having the Gold Coast as my home base because I friggin’ love this place, but I do love to travel and run marathons all around the world and not being tied down financially has enabled me to do that...oh, that and also being single and free to do what the hell I like when I like!!! Haha! My 3 kids are all in their 30’s, have lovely partners (none are gay, have mental health issues or are WOKE!), paying off their own lovely homes, are good savers and savvy investors in the stock market...they are now officially off my hands and it’s a huge source of comfort knowing they are doing well and setting their own successful paths in the world. Soooo...there’s nothing holding me back from doing what the f*#k I want and setting a new path in my 60’s that I know all my friends envy but would never think they could also do.
You are not alone in your way of thinking...it’s just taken me more than one of your lifetimes to finally get to the same way of thinking.
That's very interesting to hear Amanda!
Brutal with the buying of plan deal. I thought that kind of stuff only existed in this part of the world as I have heard this from many people buying of plan here in Buenos Aires.
Sounds like it's working out well by renting for the time being, and high rise on the Gold Coast sounds great.
In Queensland (and maybe all of Oz) the buyer is protected and the 10% deposit has to be held in a trust account that earns interest and the developer can’t touch it. They also can’t ask for anything more than a 10% deposit until the building has been finished and settlement takes place. I know this isn’t the case in most other countries where not only is the deposit not secured, but they have to pay progress payments, which they can also lose if the building never gets completed...that would be brutal!
When I first paid the deposit in 2020 the market was reasonable and it was a fair price for the apartment but with the additional payments they asked for, it now puts it at market value at the height of a real estate bubble...pulling out was a no-brainer.
I'm convinced our cult mentality towards housing cripples innovation.
Interesting perspective mate, I really appreciate someone with the ability to think critically. It seems that not much thought goes into anything these days; people in Australia either do what the TV tells them to do, or mindlessly ape others (don’t get me started on covid!).
With that said, in the Australian property debate I have found myself in the pro-property camp due to:
- Increasing demand (population growing at 600k/year, or about 2.3% of the total – the fastest growth in the developed world)
- Generational wealth has already been created through property; it has increased by about 7% per year since 1995 - admittedly household debt to disposable income has increased from 50% to 180% in this time. The Baby Boomers have created enormous wealth through property in this time that they will either bequeath to their kids or give them the money to get on the property ladder.
- At the median level, each Australian household has more than half their wealth in Australian property. The average punter is likely to fight tooth and nail to keep their house in the event of a big economic downturn.
- Vacancy rates are currently at crisis levels - 1.1% nationwide (a market in balance would be 2.5%)…people need somewhere to live.
- It is a very concentrated country population-wise – despite its’ size, the vast majority of Australians live in Sydney, Melbourne, or Brisbane. That’s where the high paying jobs are and is likely to continue. This also feeds into the supply issue, people still want to live as close to the city as possible on a good block of land – by definition this supply cannot increase.
- The Government, RBA and other major institutions are very motivated to keep property prices high. 2/3rds of the voting public are property owners and economic stability hinges on a stable housing market.
- Despite the Government’s best efforts, Australia is still in pretty good nick financially. We are blessed with resources we can dig up and send to China; Debt to GDP is only at 40%.
I agree it is basically a Ponzi, but in this area I find it difficult to see compelling reasons to fight the crowd.
Will there be a precipitous price drop? Quite possibly, but I don’t think this is limited to this asset class. There is a sovereign debt bubble brewing (emanating from the US where Debt/GDP is over 120%).
This could quite conceivably cause price drops across all assets, but where is there to hide? You need to put your money somewhere to keep up with the money printing, staying in cash is just about the worst financial decision you can make.
Personally I have some money in real estate, gold and bitcoin and as little money in fiat as possible.
I applaud your ability to swim against the tide and think critically, but I prefer to do that in my personal life and go with the numbers in investing.
Respect for living the life you are though, I would do this myself if it wasn’t for personal relationships here – but something I am definitely open to doing in the future.
Cheers for the content!
Thanks for that David.
Incredibly insightful comment, from someone who understands the setup very well.
I agree with everything you said.
Great article. I personally like owning real estate but I agree with you it's NOT always a good idea. Especially at these prices. Prices are insane in places like USA, Canada, Australia. I bought at the bottom in the USA in 2011 and it has gone up 3X. I dumped it all except my primary home in the USA and putting all of that cash in Buenos Aires real estate.
I totally agree about surrounding yourself with like minded people. Life is too short to fake it with people you don't respect.
As an Aussie I tried to put off buying a home for so long and instead was more keen on investing in stocks as it contributes more to society. That's my biggest issue with property investment it doesn't do anything for anyone in the country it just takes away capital where it could be used to help new businesses and make you money at the same time.
The whole rental market at the moment has forced my hand though, it's just a nightmare out there when people can up your rent by $100 a month on a whim.
I'm lucky enough that my partner and myself can both work from regularly (I'm a software engineer) so we were able to buy a place 80km outside of Melbourne, well within our means. With our means being interest < rent, not taking out more than 500k from the bank.
I definitely understand the frustration with the Australian housing bubble but I think there is still a way to just own a nice home for the purpose of living in and not treating it as some wealth bank. Houses should be for living!