Half a % Slash: Ready-Set-Go

1983 was my first exposure to something akin to a ‘Dad joke’ – ‘We’re off, like a turd of hurdles!’

A herd of turtles was mind blowing enough, but he must have been thinking this every time we jumped in the car –  ‘we’re making progress, but it’s still pretty crap’.

A turd of hurdles feels like New Zealand right now. It’s a worse recession than anyone will admit, but the source of the pain is easing up. We’re pointing in the right direction, but there’s a wee way to go yet.

The ‘Official Cash Rate’, or OCR, is a ‘special’ interest rate that influences the cost of owning a home. Here’s the pattern: OCR goes up, business fail and people lose jobs. When it goes down, property prices increase. For a while now, it’s a somewhat predictable pattern.

A more complicated version of this truth leads to a question of why we even allow central bankers so much power. Regardless of why, the result is an infinite cycle between periods of rising inequality and inflation (aka cost of living ‘crisis’). The money’s broken, and those who know it, exploit it. Borrowing something that’s falling in value relative to what you bought with it, is a sure fire way to win. That’s how property wealth is built, but it comes with an occasional sting, flushing out ‘weak hands’ through each cycle.

Sometimes we’re in the turd, and other times we’re in the hurdles.

It happens in the ‘macro’ sphere, and the ‘micro’ alike.

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I prefer the herd of turtles analogy better, because it shows the value of consistent action, despite the speed-handicap.

The tortoise and the hare could be a story about how boring progress can be, and rewarding well-earned success can be.

We’d rather be the hare, but we’re forgetting who wins the race.

A tortoise wealth-mindset is the best.  Jonathan, a Seychelles giant tortoise, is still alive at 190 years old. Relevance? The longer you can take on your wealth-journey, the more fun you can have along the way.

A tortoise maintains good balance between their lifestyle desires, and their financial needs, because they’re confident in their planning. They’ve had a long time to think.

Here’s another one thing: A tortoise can’t crawl out of its shell, because it’s all part of the same animal. Being a wealth accumulator, you might not have enough to quit work yet, right?

Whatever money you do have, in a sense you have to give it away (put it at risk). Within your property, your managed funds, or whatever you’re building with, is a risk of loss. Firstly, you may decide to make a bad call around when to buy and when to sell. Secondly, we have the risk our money could lose value.

We have to gather up, and we have to protect, at the same time.

You can’t grow anything until you let go of it. Letting go works in gardening, life and death, and in your net worth.

‘I’m okay, and I’m on my way’ said the tortoise, as the hare flew by.

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One last one: It can take up to an hour for tortoises to move more than 200 metres.

As a tortoise, my ‘moments of brilliance’ are spaced far apart. I’m quick to see things, but I have a speed problem when it comes to action. Understanding what something is, isn’t the objective – I want to know what it means. So as a tortoise I’m too slow to be in front, but because long-term wealth is my destination, I have time to see the future.

I’m slow, deliberate, methodical, but pointing the right way, I’ll reach my destination. A tortoise is a soldier walking a steady pace, always on guard against inaction.  The tortoise knew what happened to the sitting duck.

The tortoise makes many mistakes before figuring it out.

For us, we should have bought a bigger ‘first home’ when we had the chance – we settled for a ‘safer’ entry into property. I understood early on the potential of Tesla, but instead of investing in it, bought one that required endless repairs. I understood the NFT’s fad cycle but I never partook, and right now I’m watching MicroStrategy with similar vibes (not advice).

At the same time, I understood how the money worked, and I took action using leveraged property strategies, then bought precious metals, shares and Bitcoin.

A bit of study, a big desire, and a lot of curiosity later….Success is a strange brew of taking ground, losing it, and then waiting for it to come back as you just. Keep. Going.

Study this image, then read on…

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Money might be your biggest blind spot with risk. On the other hand, for the slow learner, the late arrival, or deep-diver, could this be a chance to catch up? Personally, I believe there’s a massive reward for those who learn about the money, and understand what it means.

Those stuck in the game miss it, like the child throwing a tantrum when Dad removes the Monopoly board. What’s the point investing if you’re still ignorant about ‘what’ money is, how it’s changing, and what comes next?

The reason why interest rates fall over time, is the same reason why it needs to change – so is this ‘good’, ‘bad’, or ‘something else’.

Regardless, central banks from around the world realise that to keep the whole thing going, they need a digital transformation of their money.

Welcome to the trilogy of conversations I’m having this October, regarding changing money.

Last week it was fellow financial adviser Mikey Smith.  We discussed a how banking really works, where inflation starts, and how to use ‘the system’ to get ahead. This week I’m speaking to sociologist Jodie Bruning, who’s done amazing work studying the potential harm of CBDC’s (central bank digital currencies). Make sure you subscribe on YouTube to be notified of the next episode.