We live in an age where everyone sucks at ‘letting go’. But I mean something pretty specific when I say that.

You need to let it go.

But I get why you can’t.

“Letting it go” is perhaps the most important of our ‘forgotten skills’.

No one teaches you how to let stuff go.  It’s not even properly written into your biology.

Well, that’s not exactly right. I expect the software coding that was written into your biology was perfect for a time, but then the times changed, and now it’s not quite so perfect.

It’s one of those things.

Okay. Let’s slow down a bit. “Letting it go” is a loaded term these days. It’s something you hear a lot, but it also seems like everyone’s got a slightly different idea about what it means… if they have any idea at all and are not just parroting some fluffy crap they read on a motivational poster.

“Hey Jon. You sound a little angry. Let it go bro.”

Yep. Ok.

So I want to start with thinking about the breath. The breath is easy because there’s a very clear distinction between the different stages: taking the breath in, holding it, and then letting it go.

Okay, so we can see here that “letting it go” has a very clear function – it plays an integral part of an in/out cycle.

And that’s where we need to place “letting it go”. It’s not something you do every now and again. It’s not like you can go about life, drawing in whatever energy and emotions come your way, and then just every now and again, let them go.

It’s not like a toilet that you can just keep filling up, and then emptying every now and again when things get overwhelming.

The letting go is necessary for the drawing in. One enables the other.

Want another example? Imagine the food system. Imagine if there was the taking-in without the getting rid of.

There’s a lot of people who struggle with that, and it’s a pretty miserable fate. I’ve had moments like that myself. Not fun.

Or think about the beating of the heart. The heart clenches and blood is pushed out along the veins. The heart ‘lets it go’ and new blood rushes in.

A heart without a “letting it go” function is the heart of a dead person.

So this is what ‘letting go’ is all about. It is a necessary and integral part of the dynamic – the dynamic that all of our miraculous systems are built on.

But we’re not good at letting go.

We tend to clutch onto things. We tend to hoard. We tend to be stingy with what we let go off.

We hoard stuff we don’t need because maybe that stuff won’t come around again.

We harbour emotions we don’t need because maybe there’s still wisdom to be learnt from them.

We clench and strain our strength, because we worry that we’ll never find that strength again.

But in doing so, we restrict the entire dynamic. Our system grinds down into a restricted, constipated, lifeless spluttering.

If we cannot let go, we cannot fully live.

And so for some reason (I could throw some ideas around, but let’s not), we live in an age where our instincts jam us up, and we can not let go of what we need to.

So ask yourself, what do I need to let go off? But more importantly, what dynamics exist within me, where the ‘letting it go’ muscle has become weak?

And then just focus on that function, and give it the permission it needs, to release – to shed, or expel, or relax.

Apply your consciousness to the task. Give that part of yourself that permission.

And let your life return to balance.

JG

Another day, another story of the property market surprising everyone

About 18-months ago, there were a number of dark clouds looming on the horizon. As it turns out, the property market has fairly ably just batted each one away.

(You’d have to think the property market is due for a promotion up the batting order pretty soon.)

One of those dark clouds was what came to be known as the “Interest Only Reset”.

The idea was that a large number of property owners on Interest Only mortgages were unprepared for their mortgages to ‘reset’ – to roll over to Principal and Interest.

The fear was that the reset would lead to a substantial jump in repayments. If households couldn’t afford those extra repayments, they might decided to sell.

If they all decided to sell at once, that could flood the market and prices could fall.

That was how the dark-cloud story went. Some of the doom-sayers were pushing it hard.

Turns out though, the interest only reset isn’t looking like it’s going to be all that much of a deal, and most economists are pretty relaxed about it actually.

From the ABC:

During the most recent property boom, mortgages on interest-only terms became extraordinarily popular in Australia, at their peak accounting for nearly 40 per cent of the market.

The financial regulators realised there was a risk some borrowers signing up to interest-only periods might struggle when they had to start paying back the principal.

According to the Reserve Bank of Australia, the move from an interest-only period to principal and interest repayments costs borrowers, on average, an extra 30 to 40 per cent.

If people are unable to afford the jump, they could be forced into default or into selling a property.

A lot of people doing that at the same time could lead to large falls in the property market.

So, the regulators forced the banks to massively curb how many interest-only terms they were offering.

But the RBA also warned last year that, given the huge number of interest-only loans already agreed to, there were nearly half a trillion dollars of loans resetting over four years and with the new tighter rules on interest-only terms, a lot of those borrowers would not be able to extend the interest-only period.

… So far, the concerns about the glut of interest-only terms ending at the same time have not caused a surge of loan defaults or investors fire-selling their properties, according to economist Saul Eslake.

Interest rate cuts appear to have helped turn around the market and banks are once again loosening their lending standards with the threat of the royal commission now behind them.

But Mr Eslake warns that people should not ignore the risks.

“It could be that the people for whom the transition is going to be most difficult is the cohort that is yet to make the transition, whereas those who could do it comfortably did it sooner rather than later,” he told 7.30.

“Indeed, some of the Reserve Bank work suggests that a number of people have transitioned ahead of the legal requirement to do so.

“So we’ll have to wait and see how difficult it is for the remainder.”

My guess is that with the recent round of rate cuts, most people will be ok.

If you look at the data too, it’s clear that the reset impulse has worked its way through the system.

Interest Only loans are down to 20% of the market, which is where the regulators said they wanted them to be.

So that means the chances of extending your interest only mortgage, if you can’t manage the reset, have improved substantially. Banks are much more relaxed.

So in short, it looks like we’ll be right.

Good to know.

JG

Round and round it goes. Where the money hose stops, nobody knows. Oh. Correction. It stops here:

If there’s one thing you can always ride all the way to the bank, it’s the government.

Government spending blows bubbles. Wherever the Feds or States point their money hoses, there the money tree growses.

And with borrowing costs effectively going to zero around the world, government spending is about to be let off the leash.

This is going to show up in all sorts of places, and create all sorts of opportunities, but here’s one that might surprise you: the tiny home bubble.

Tiny Homes (effectively something that has the technical dimensions of a a caravan and can therefore be treated that way by that regulation) are here to stay. They’re part of the future mix of housing.

And recently, the government gave tiny homes their tick of approval.

The Morrison government wants to make tiny homes a bigger deal.

Industry Minister Karen Andrews, a self-described fan of tiny homes, says she wants to see the prefabricated building sector grow by $30 billion over the next five years. The sector currently makes up about three to five per cent of Australia’s $150 billion construction industry, but Ms Andrews says it could grow to 15 per cent by 2025.

The Industry, Science and Technology Minister will announce a study on Sunday which will look at ways to dGovt points money hose at this surprise sector evelop the prefabricated building industry.

The study will examine safety issues, regulations around prefab buildings and export opportunities, particularly in the Asia-Pacific. Prefabricated construction involves any part of a building (such as the floor) or a whole building that is made off-site. This includes modular constructions for homes and offices and tiny homes.

The government has set aside $2 million for the initial study and then plans to set up an innovation lab to help manufacturers design prefabricated buildings.

Ms Andrews said there was a “massive opportunity” to boost the building and construction industry and potentially create an estimated 20,000 new jobs.

Yup. There’s a massive opportunity to boost the industry. There’s a massive opportunity to line your pockets. Same same.

But Australia is no pioneer here. Many countries like the UK, the US and Canada (all places with their own housing affordability challenges), are hoping that tiny homes are going to help.

The Vancouver Sun says that in Canada, it’s become a ‘craze’.

There is nothing small about the tiny-home craze… From flat pack, self-assembly cabins, to repurposed shipping containers, to small homes on wheels, there is now something out there to suit every site and budget…

Delta’s Mint Tiny Homes make homes that range in length from 22 to 44 feet, all on wheels, for easy transportation and are RV certified. They range in price from around $75,000 to $100,000…

Their most popular tiny home over the past few months is their Canada Goose model, says McBride, which is their largest offering, ranging in length from 38 to 44 feet. “These are popular with families, those who want that extra space, and extra storage. Also with those who want the standup bedroom”…

Because Mint Tiny Homes are on wheels, they don’t require foundations or any hookups, says McBride. They can be used the moment they’re driven onto a property…

The demand for tiny homes, he says, is growing… “If you look at the U.S., and California, there’s a new city every month opening up its bylaws for tiny homes. Even Oregon and Texas. More and more cities are becoming tiny-home friendly,” he says.

Tiny Homes are coming. The government needs them. Without them there’s very little the government can say it’s doing to support affordability.

And so the government has to support them, and has to support the industry with regulation, and has to support the industry with cash.

So the money hose is ready?

Are you?

JG

This market is getting so hot, people are turning to crime

I thought this story was funny. Basically a man stole a tiny house and drove it from Canberra to Queensland:

A 24-year-old man has been charged over the alleged theft of a tiny house taken from Canberra on Sunday and sighted in Queensland about 24 hours later.

Queensland police seized the prototype display model in Hervey Bay – 1,416 kilometres north of the capital.

The man, believed to be from Canberra, was charged with bringing stolen goods into the state.

It’s a cute story. Basically the owner posted the theft on social media, and then people on Facebook tracked the tiny-homes movement from Canberra to Hervey Bay.

What an age!

But to me it also says a lot about where the tiny home market is at.

Not that long ago literally no one had heard of tiny homes. They just weren’t a thing.

Sure we had caravans, but tiny homes are a lot more than caravans. They really are proper homes, only smaller.

But in a few short years, not only does everyone kind of know what we’re talking about when we’re talking about tiny homes, people now recognise their value.

They recognise their value and are willing to steal one if the opportunity presents itself.

So are tiny home the next hot property?

(‘Hot’ as in ‘booming’. Not ‘hot as in ‘stolen’.)

I actually do think we are on the cusp of a tiny house boom.

And look, a lot of people are going to tell you that people are choosing tiny homes because they like the zen, clutter-free living. Or because of their high-sustainability values. Or the site-flexibility they offer.

And look, all those reasons are valid. But I’m a show-me-the-money type guy.

And the biggest driver of the tiny-home segment is economic.

Housing affordability is a wicked problem. There’s no easy or even obvious solution. People are desperate for solutions – for an affordable way to put a secure roof over their heads.

This is the challenge and tiny homes answer the call.

It’s in the data too. A recent survey of tiny-home owners found that the economics was still the primary driver.

The most-common reasons for tiny-home living were: “Property is too expensive in preferred areas” followed by “I want to reduce debt”, then “I don’t want a mortgage”, then “I need to downsize”, and then “housing is too expensive in general”.

That is, economic reasons all the way down.

So when people tell you this is a cultural phenomenon, don’t believe the hype. Millennials aren’t suddenly embracing Zen en masse. It’s an economic thing.

But that doesn’t mean that it’s any less valid. That’s as good a reason as any to live in a tiny home.

And it doesn’t mean that the tiny-home segment doesn’t rest on solid foundations.

As long as housing affordability remains a wicked problem, there will be strong and growing demand for tiny homes.

That creates all sorts of opportunities.

Speaking of which, I’m currently looking to provide venture capital for a tiny-home security business. Hit me up. 😉

JG

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