Being an awesome human all starts here.

A lot of people call me selfish.

If you ran the analytics on the comments I get on social media, I reckon this would be hater comment #1.

And that’s ok. I get it. There are worse things people could accuse me of. (#2 is “babyeater”).

But what I think is going on here is there’s a bit of partial evidence mixed in with confirmation bias (see my rant last week on what confirmation bias is ).

You see, most people want to believe that wealthy people are selfish.

If they can convince themselves of that, then they can extend the logic so that if you’re not wealthy it must mean you’re not selfish. Once you’re there, you can then feel better about not being wealthy because it obviously means that you’re not selfish.

(Logic level: impeccable)

But the idea that all rich people are selfish is as ridiculous as the idea that all poor people are selfless.

Anyway, with confirmation bias in full effect, people are going to see the selfish Jon Giaan they expect to see.

And when I start talking about radical responsibility – when I say that you need to work on yourself first, that you need to treat everything as a personal challenge, that the world is a theatre for you to discover and express your own unique talents – I know that to some ears I’m going to sound like a complete narcissist.

(Anyone else noticed that term coming up a lot lately? Must be going around. I hope I don’t catch it.)

But I don’t see it this way.

Just because the trunk of a tree supports the branches and the leaves, you wouldn’t call the tree ‘trunk-ish’.

I actually think that the best expressions of humanity – our generosity, our care, our compassion – these things are just unsustainable unless we are solid in ourselves first.

The road to all these things is one of expansion, in my opinion.

You start out with narrow self-interest. That’s the basic human condition we’re born into. It’s square one.

But as you grow in your power, you circle of care expands. You identify with your family. You care about their needs as much as your own. From there you care about your community, then your city and state (and footy team), then your nation, then the whole human species and the entire planet.

This is the ‘expansion of consciousness’. This is the ‘spiritual path’ that so many new-agey flakes mistake for a fairy-land hallucination about escaping their own challenging realities.

It’s an expansion and it goes inside out. You need to start on the inside.

If you want to offer the world the beautiful leaves of your generosity and care, then you need start by working on your self.

Of course you don’t want to get stuck there. You don’t want to start in and stay in. If you did that, then, yes, you would be a selfish prick.

But don’t think that just because I’m a champion of self-responsibility that I’m peddling a doctrine of selfishness.

That aint me, bro.

JG

Humans are strange, but also predictable. Here’s proof from the property market.

The market just went “opportunity grade”.

Let me show you what I mean. At this stage in the cycle, you can say that the recovery is established.

That is, prices have given us a very clear direction. The market is posting consistent gains, and no one doubts that the cycle has bottomed.

You can see it in the monthly price data.

You can see that the monthly price data tends to move in long cycles – it doesn’t jump around month to month. And so with three solid monthly gains behind it, the market is gearing up for another bull run.

And based on recent form, the bull run will probably run to 2023, maybe even 2026.

Okay, so that’s happening. This isn’t one of my obscure theories about life. This is what’s in the data and what pretty much all the experts are saying.

And yet!

And yet, housing finance remains weak.

Take a look at the quarterly credit data – growth continues to slow:

This is growth in the stock of mortgages, and the stock level is affected by people paying back their mortgages.

Still, when you just look at new housing finance, that has yet to turn around, with new housing finance growing less and less quickly each month.

So, how long do you reckon that situation lasts – where prices are picking up and housing finance isn’t growing strongly?

Not long, ay?

And this is what I mean when I say the market is “opportunity grade” right now.

This is always the way it goes. It’s human nature. We’re over-enthusiastic at the top, and spend more than we should.

But then at the bottom, we’re overly pessimistic, and buy less than we should.

We’re at the bottom right now.

So what are you going to do? Wait to get at the top, when the market has given you an even clearer signal?

Don’t be that guy.

The buyers are not back in force just yet, but they’re on their way.

If it’s one thing I know about economics is that opportunities don’t stay opportunities for long.

The window on an opportunity grade market is short.

Time to get ready. Time to get active. Start building that capital base. Get up on the board and ride it all the way to 2023, maybe even all the way to 2026.

And if you miss it, don’t say you weren’t warned.

JG

If you don’t understand this, you’ll never understand the world

I’ve got the key to understanding the world.

It’s called “confirmation bias”.

If you want to understand the world and understand people, then you need to understand confirmation bias.

Confirmation bias is the way our minds actively screen information for evidence that supports our existing world views.

So if I believe that the Beatles were talentless hacks, when I listen to their music I’m going to here awkward harmonies and lyrics that are drug-induced rambles at best. My subconscious mind is screening the information my conscious mind receives.

But on the other hand, if I already thought the Beatles were divinely inspired rock gods, then I will hear complex harmonic layering and mind-expanding commentry on the human condition.

And so you can have the effect that two people can listen to the exact same album, consider the exact same piece of evidence, and draw radically different conclusions. Depending on their pre-existing beliefs, they can have completely different experiences.

This is a humanity in a nut shell.

We are in constant conflict, and to make matters worse, we just can’t understand why our enemies think the way they do. They’ve seen the evidence. Why don’t they draw the same conclusions?

They heard the Beatle’s White album. What’s wrong with them?

Confirmation bias is the reason why people draw different conclusions. And it’s also the reason why you also appear bat-shit crazy to your enemies.

It’s why some people look at Donald Trump and see a ego-driven orang’utan, and some people see a freedom loving rebel.

And it’s why some people can look at Greta Thunberg and see Joan of Arc reincarnated, and some people see a girl being manipulated by the media.

Confirmation bias acts as a filter on reality, and we all have different filters.

And sure, at this point you’re probably saying, “Yes, but my enemies filters are wrong, and they distort their reality more than mine do.”

Possibly. We all think that. Even if we acknowledge our own biases (and most people can’t), we still think we are less deluded than others.

We all think that we can perceive truth through the forest of random facts, through the mist of thought-bubble media machines, and through the veils of our own cognitive biases.

But, statistically speaking, you’re probably kidding yourself.

Now I’m not saying you have no hope of perceiving the truth and thinking clearly. I definitely do think you can do that. But it’s more work than you think it is.

It’s a truck load of work.

You need to sit down and bring all of your deductive faculties to the table. You need to be disciplined with logic, rigorous with reason.

Not only that, you need to have a good hard look at yourself so you know where your biases are and where you leap from reason to faith.

You need to know that you do have times when you leap from reason to faith (we all do, get over it). You need to learn when you’re biases are more liable to hold sway, and you need to watch for when those contexts occur.

Yep. As I said. Lots of work.

My great wish for humanity is that we can all recognise just how much sway confirmation bias has over our faculties.

I genuinely think it would just help us get along a lot better.

But if this blog does nothing more than stop you from yelling at strangers on the internet, then I’ll have done my job.

(He says, confirming his pre-existing belief that he is a man with a lot to offer the world.)

JG

Back in Australia, I’m going deep again…

There are two ways to experience life: broad and deep.

What camp are you in?

I’ve just got back from my travels. I’ve done my annual pilgrimage to Greece, my annual jaunt around the islands, my annual bare-foot stumble around the beach-side bars.

Man. It’s awesome. You’ve got to do Greece at least once, if not half a dozen times.

I genuinely look forward to a time where you look at a trip to Greece the way you look at a trip to the Gold Coast. Not to rag on the Gold Coast or anything, but it’s no Greek Island.

One day soon you’re going to be that wealthy and have that much control over your time.

That’s the whole reason why you’re reading this blog, right? So you can learn tricks and hacks to take you to that place even quicker. And I say “quicker” because you’re on your way there already. If you’re reading these blogs then you are already taking your growth and development seriously, and everyone who does gets the results they’re looking for, sooner or later.

So think of me and these blogs as an accelerant.

Anyway, travel reminds me that there are two ways to live: broad and deep.

Travel is a broad experience. You are expanding your horizons. You are eating foods you’ve never eaten before. You’re meeting people you’ve never met before. You’re learning how to sail a luxury yacht that you’ve never sailed before.

So when you’re travelling, you’re drinking broadly of life.

Coming home again, I’m grateful for the deep experiences of life.

There’s a richness that comes with having a deep and enduring connection with things. You’re walking the streets you’ve been walking for twenty years. You are drinking at your favourite café again, where they always remember your name. You’re spending time with people who know you well, and have been through thick and thin with you.

You are drinking deeply of life, and it’s a beautiful thing.

And I think a balanced life drinks broadly and deeply of life in equal measure.

Some people get hooked on the broad. It’s exciting to try new things, go to new places, meet new people. I’ve met people travelling who have been to every country on earth, but don’t feel like they belong anywhere.

Or it’s the serial monogamist, moving from one girlfriend to the next, always hooked on that honey-moon experience, but never forming really deep connections with his lovers.

They’re hooked on the broad.

At the same time, if there’s too much deep and not enough broad, we start to grow small. We’re not pushing ourselves into new experiences and new challenges. We burrow into ruts – always eating at the same café, talking to the same people, going to the same places for our holidays.

Ideally, we want to live both broad and deep. We want to grow and expand and taste everything life has to offer, but we also want to go deep – to put down roots and know the strength that comes with having community, old friends, and a life-long partner.

This is one of the keys to a balanced and happy life, I reckon.

Go broad, go deep.

It’s good to be back.

JG

My margarita-induced take on Greek house prices

A Greek island. A beach bar. Just a man and a margarita…

Yeah, nah, I can’t do it. Sometimes I feel a bit film noir detective when I write these blogs – like I’m hunched over my typewriter, smoke lifting from the ashtray, spilling my troubled mind onto the page.

But not here. Not in Greece. Not looking back across the water to the boat, the sun setting off colour bombs in every direction.

Here, I feel like I should be writing cruise holiday reviews, or at least a lifestyle blog.

“15 Fun things to do with Quinoa, but Jon Giaan.”

It’s hard to not smile. It’s hard to not laugh at your own life actually – to marvel at the journey from high-school drop out to beach bar drop in.

What a trip it’s been. 

But here I am.

I’m loving these little getaways. They’ve become an annual pilgrimage. And how lucky am I that I can hole up in a little fishing village, drink ouzo and watch the sunset, all the while telling myself that’s it’s not just a luxury getaway, but also an opportunity to connect with my roots and get to know myself a little better.

R’n’R and a little bit of soul-growth.

How good is that?

It’s been interesting getting to watch the Greek economy recover too. These black swan events do happen. Crises happen. And in every crisis there is opportunity.

Opportunities have been emerging here in Greece, but a little bit slower than I was expecting.

Last week I shared this chart about housing finance in Australia. It’s showing a

strong pick up in mortgage credit, which is opening the way for a strong pick up in prices.

The pick up in housing credit is part of a broader expansion in the finance market, which is a positive sign for the economy too:

Someone asked that if this was happening in Greece too. And if credit would be the bellwether of house price growth in Greece too.

“Is it time to start buying up Greek real estate?” I found myself asking my margarita.

Look, the answer to that is probably, not yet, but maybe soon.

(Though to be honest, I’ve been saying ‘soon’ for a little while now.)

The truth of it is that the Greek economy continues to recover. All the metrics that matter are getting better. Debt is down, growth is up.

Problem is, Greece has a pretty flipping massive hole to climb out of. Like huge. From go to woe, the Greek economy fell 25% during the crisis.

That’s like a decade’s worth of growth gone up in smoke, followed by a decade of going nowhere.

In Greece, it’s still 1999.

What’s worse, Greece is trying to grow its way out of a hole at the same time as the whole world seems to have gone ex-growth.

The latest figures show the Greek economy growing about 2.5%. That’s pretty good. (It’s flipping great given recent form!)

It’s about what Australia is doing right now.

The trouble is, it takes a long time to get out of a whole when you’re growing at just 2.5% a year. You’re going to struggle to get ahead of your creditors at that pace.

But in the modern world, it’s about as much as you can hope for.

So Greece still has it’s work cut out for it.

And when you look at the credit numbers, they’re improving. Growth has been improving over the past year.

But only improving in the sense that growth has stopped being negative. Credit has stabilised. It hasn’t starting picking up yet.

And without a pick up in credit, until we get above that zero line, I don’t see house prices picking up either.

We’re on the way.

Soon.

But not yet.

JG

This is a ‘Disney Song and Dance’ time to be alive. So true. Thing are actually awesome.

It’s a horror show out there.

The female wasp plants her eggs in a caterpillar. In time, the eggs hatch, and her young eat the caterpillar from the inside out.

It’s full on…. For the caterpillar.

Or what about that parasitic worm that preys on insects? It grows to huge proportions in the abdomens of a praying mantis, until finally, as the mantis is driven to water in extreme thirst, the worm bursts from the mantis’s abdomen, back into the water to complete the next stage of it’s life-cycle…

… Leaving the mangled corpse of the mantis rotting at the water’s edge.

When I was growing up, I believed in the Disney version of nature – that everything just existed in a peaceful and overly-musical harmony – that everything just coexisted and got along.

But it’s just not true. They never showed you the footage where the fairy wrens were gobbling up the lady-bugs like popcorn.

Tennyson said that “nature is red in tooth and claw” and this is the truth of it.

So when we look at humanity, it shouldn’t be surprising that cruel and selfish violence can sometimes be part of the human experience. What should be surprising is that somehow it is not the dominant human experience.

We have created a world with huge pockets of peace, all over the globe. In Australia we have created a society where most people can expect to live their entire lives without suffering any direct violence – where violence is a strange exception to the wide-spread peace that we take for granted.

When we look at the gore-fest that is nature, isn’t this something of a miracle?

Isn’t this something worth celebrating? Something worth banging a drum about?

This is the truth of it. This is a wonderful, miraculous, Disney-song-and-dance time to be alive.

It’s time we started acting like it.  

JG

The GDP print last week wasn’t amazing… but was actually pretty good according to these guys.

There was nothing in last week’s GDP numbers that made me think that property’s run wouldn’t continue.

I mean, the numbers weren’t stellar, but they weren’t bad either.

They painted a picture of an economy that’s still growing at a reasonable pace, albeit more slowly than my generation might be used to.

But in the broader scheme of things, with economies all over the world struggling to find second gear, our two most important trading partners locked in a trade war, and now 28-years without recession, you’d have to say it’s actually a pretty good result.

And to be honest, given where I thought we might be about 12-months ago, I’d say we’ve come through things pretty well.

What’s more, there’s still plenty of scope for the economy to receive policy support if it needs it, while the more ominous storm clouds seem to have passed without incident.

The way I see it, there are seven factors that are going to support economic growth going forward. I see them like seven little dwarves, dancing around the economy’s pretty blue skirt.

Let’s do a roll call. The Seven Dwarves are:

1. Cutty: The RBA has cut twice in recent months and it looks like another one is probably on the way – possibly as early as next month. At the same time, the Coalition is pushing on with their agenda to cut taxes. Both of these will support growth in the short term.

2. Escapey – Over the past 12-months people have been worried that the cyclical pause in the property market might gather momentum into a serious correction. This hasn’t happened, and given momentum in the market right now, doesn’t look like a near-term possibility. When prices hold up, that supports people’s wealth and spending, which is also a positive for the economy.

3. Spendy: Infrastructure spending is currently booming, and thanks to strong trade data, and the budget is on path towards surplus. That gives the government lots of spending firepower if it needs it. That’s a good thing.

4. Dollars: With the US so far have the run of things in the trade war with China, the US dollar is appreciating, which means the Australian dollar looks to be going lower. That’s actually good news for us, particularly our exporters.

5. Investy: The business investment outlook is slowly improving. Ok, “very slowly” if we’re honest, but businesses have the cash on hand, and lending rates are low, so there’s nothing holding business investment back.

6: Exporty: Australia has a current account surplus, thanks to a mini-commodities boom. That puts us in an strong external position – there’s not going to be a run on the currency, and investor confidence in Australia is going to remain high. You couldn’t ask for more on this front really.

7. Poppy: Population growth remains strong, which supports consumer demand in particular (as well as housing demand).

They’re my seven dwarves. On their own, they might not be all that much to look at. But put them together and you have the makings of a serious tail wind.

The economy still has challenges. It always does. And growth could always be stronger.

But this is a pretty good result. Don’t let anyone tell you any different.

JG

The RBA is worried about the coming boom getting out of hand

The RBA is playing a dangerous game. So is the government. Won’t somebody think of the children?

Now, you’d have to think that today’s RBA board meeting is live. There’s every chance we could see another rate cut. Nothing has changed the view of most people in the market that rate cuts are heading lower.

We’re already at record lows. Soon, we’ll be at recorder lows. People think we’ll soon get to from where we are now – 1.25%, to 0.5% – a rate most people think is the floor.

(Our economy is too small to go to zero, apparently).

That’s the scenario that is currently priced into the markets:

But the RBA’s not happy about this. It doesn’t want to run out of ammo. And it feels like it’s being backed into a corner

… by Josh Frydenberg.

That’s because Treasurer Frydenberg says he’s committed to delivering a budget surplus.

That’s what good economic management looks like right? You make lots of money, and spend less than you earn.

Well, maybe if you were a little old lady living in a shoe, sure. Good work, Granny.

But it’s a different story if you’re the government. You’ve got keep your eye on the bigger picture.

If the economy’s tanking, being blindly committed to a surplus actually makes things worse.

In a recession, when the private sector is shrinking, you kind of want the public sector to be take up some of that slack – not cutting spending into the down turn.

In recession, there’s a good argument for the government to expand spending.

But we’re not in recession, yet.

But why is the RBA cutting? Why do people think that official rates are going to 0.5% – the recordest levels possible?

Because we’re tipping towards recession.

And even though the RBA is being backed into a dangerous corner – where they’ve got no ammo to deal with a crisis – Frydenberg wants his surplus.

Which to my perspective looks like scuttling the heaviest cruiser in your armada just for a short term bump in your popularity ratings.

(Which is as much as I expect of politicians, really.)

The RBA is growing increasingly frustrated with the situation. And you’re starting to see that frustration bubbling to surface.

Last week, Governor Phil Lowe was trying to scare the government into action.

Last week, he said, “We can be confident that lower interest rates will push up asset prices, and I think that later on we will have problems because of that.”

You need to see through the boring world of bank-speak to see how strong a statement this is.

“If we keep cutting rates, asset prices and house prices are going to boom. Are you sure you want that?”

And is he right? Will house prices boom on the back of rate cuts?

Duh. Of course they will.

Look at auction clearance rates.

They’re well and truly back to boom time levels.

So yes, rate cuts will see house prices boom.

The RBA is trying to scare the government. The government is determined to have its surplus.

It’s a game of chicken. Who’s going to blink first?

I reckon we’ll know the answer on the first Tuesday of October – the next time the RBA meets.

JG

The road to wealth, in just four words…

Ok, now if you want to build real wealth, you need to tap the power of the universe.

You must harness the great celestial dragon stalking its way through the fabric of the universe.

I’m talking about compound interest.

No, seriously. I’m not mucking around.  Albert Einstein called it the 8^th wonder of the world, and he knew a thing or two about the fabric of the universe.

And I want to get all space and time and 60s psychedelica on you here because you need to understand that this points to one of the fundamental building blocks of the reality we live in.

Compound interest is really just the financial application of one of the most fundamental rules written into the DNA of the universe:

The More is More Law.

It’s science, bitches

If I had to hang my hat on one thing I knew to be true, it’d be that more creates more. Time moves in one direction (as far as we can perceive) and everything builds on what came before it.

More creates even more. Even more creates even more and more. On it goes.

Compound interest describes this dynamic when it comes to money. You have some money, and the interest you receive creates more money. The next time round, the interest you receive isn’t’ just paid on the amount you started with – it’s paid on that amount plus the interest you received last year.

It accumulates. More creates more.

Growth becomes what’s called ‘exponential.’ The mores and the even mores become bigger and bigger and bigger each year.

It’s wild. It’s a trip. But if you want to build real wealth, you need learn how to harness this dragon. 

And the key to that is simply starting early. I’m sure you’ve all seen that table about someone who invests for a few years when they’re young, versus someone who starts late, but invests consistently after that.

Thanks to the power of compounding, the early bird always wins.

But this plays out in all sorts of important ways.

The More is More Law is Everywhere

As I said, compound interest is just the financial application of this fundamental law.

But wait, there’s more:

The More is More of Education

I’m a colossal fan of self-directed self-education. That’s not just because I had such a crappy time with system-directed mass-education, but because we live in an age now where everything is available to us.

Whatever you want to do in life, the information you need to do it is out there somewhere, right now. It’s probably just a few short clicks away.

We can educate ourselves and take ourselves wherever we want to go.

But knowledge compounds as well. The more you know, the more you are capable of knowing.

And these days, if I pick up a book on property investing, or stock investing, I can get my head around it very quickly. Even though it might be an incredibly complex book if it was the first investing book you’d ever read, I simply have so much experience in that field now that I can pull out the key and novel messages very quickly.

That’s compound education. It’s exponential.

So my recommendation to everyone is educate your self and start early. You’ve signed up to this blog and that’s a great start, but keep going. Keep building. Keep stacking and compounding and building great towers of knowledge.

The view from the top is to die for.

The More is More of Action

The same way that education compounds wisdom, action compounds experience, and both are invaluable.

Realistically, your first property investment, your first business or your first foray into the stock market isn’t going to be the move that makes your fortune.

Unless you’re very lucky, your first move will be just that – a start.

But you will learn something. You will gain experience, and that will inform your next move. And then lessons from that experience will inform the move after that.

And so on.

Experience grows exponentially as well.

And they say that the first million is the most difficult million you’ll ever make. The first business will be the most challenging. The first property investment will be the trickiest.

But each time you act you gain wisdom, and that wisdom informs everything you do from that point on.

And so if we want to mature and grow as investors, again, we should be looking to start as early as possible.

Take action now. Get started. Even if you’re not 100% sure what you’re doing, work with that uncertainty, find a bite size deal to get your teeth stuck into, and take action.

Get Educated, Get Started

So my advice is this: If you want to harness the power of this great celestial dragon – the irreducible power of the More is More Law, then get educated and get started.

Do it today.

The More is More Law shows us that the earlier we start, the further we can go.

So do it. Get started.

Become the master of the universe you were meant to be.

JG