In Pursuit of Happiness – A Popular Folk Tale

 An endless circle of 99

Have you heard of the story of the endless circle of 99? It is a Catch 99 situation indeed – pun intended!

Once there lived a king who despite all his riches and glory, was unhappy and discontented with life. One day he met with a common farmer, who was singing while working on his small patch of land. The king was intrigued and wondered how a relatively poor common man could be so happy.

He asked for the farmer to appear in his court. The king came straight to the point and asked him, “How come you are so happy?”

The farmer smilingly replied, “I may not be very rich, but me and my family have food to eat, clothes to wear and a roof over our heads. We don’t need more and are happy with our lives.”

The king did not believe the farmer and questioned his ministers. One of them said that perhaps the farmer has not gone around in the circles of 99 as yet. The king was curious and wanted to know what that meant.

The minister said that in order to understand it they would need to leave a bag with 99 gold coins at the farmer’s doorstep. The king granted permission for this.

The next day as the farmer returned home from the fields, he spotted this bag of coins. He was overjoyed to see gold coins in it and started to count them. He counted and he recounted, but found that there were only 99 coins in the bags. He was puzzled and very upset, and wanted to find out what happened to the 100th gold coin, because why would anyone leave 99 coins in a bag and not a whole 100? He looked everywhere, but could not find it.

Sure enough, his life changed from that very day. He got very stressed about it and decided that he will work harder to be able to earn that 100th gold coin. He turned grumpy with his family, was constantly tired, overworked, developed ill health and lost all happiness.

When the king saw him working in the farm looking all stressed and unhappy, he asked the minister what had happened.

The minister replied, “This farmer is now trapped in the endless circles of 99, and he will never be happy. Even though he had everything to be happy earlier and got 99 gold coins which is way more than what he could have ever imagined, he is now in the pursuit of the 100th coin. That is what the circle of 99 does to a person.”

Even though people have enough to be happy, they are not content, because they are always striving for that one extra thing that they believe will make them happy.

Isn’t this something we all need to be cognizant of in terms of what we already have and what we desire?

Relevance of the above story to the Real Estate Market

So what is the real message and how does it relate to real estate? Why should you care?

Wealth building is important not just for personal enjoyment but also to leave a legacy behind.

Scotiabank has a slogan – “You are richer than you think.” In literal sense, this is true for many Canadians in today’s environment. Our real estate market has grown almost four times over the past two decades. People have accumulated a lot of real estate wealth and many can see themselves retiring rich.

Types of Real Estate Consumers

There are many types of real estate consumers that we meet everyday.

The first category of consumers comprises individuals who find contentment in their current circumstances. They possess a sense of satisfaction in their existing situation as a homeowner or renter and maintain their residence there until their retirement. Frequently, many of these individuals start their journey with a starter home, perhaps a condo apartment, when they are young and raising a family. As time passes, they transition to more spacious homes such as a townhouse, semi-detached, or fully detached home. This becomes their residence either throughout their retirement or until they decide to sell during their later years. The profits generated from these sales may be utilized to move into smaller properties or rental apartments, thus contributing to their retirement needs.

It’s worth noting that a subset of these content real estate consumers might also fall into the renters category. In many instances, these renters consciously choose not to purchase property due to various reasons, and they opt to continue renting for the long term.

The next category of real estate consumers encompasses those who may fall within the aforementioned group, but they also venture into owning a second or even a third property. These additional properties appreciate in value over time. Individuals in this group either retain ownership of their investment properties for an extended period or opt to sell them after a few years to capitalize on profits. This could result in purchasing similar properties or other real estate holdings throughout their lifespan.

During their retirement phase, these individuals often choose to divest from these investment properties and redirect their funds into alternative financial assets, such as secure dividend-paying stocks, bonds, mutual funds, and the like. As they enter their elderly years, they seek to avoid active management of real estate assets and instead gravitate towards a passive investment approach. This approach can be easily executed with a simple click of a mouse, aligning with their preference for simplicity and ease of transaction.

However, it’s important to note that many investors within the above group retain a profound affinity for real estate. Their expertise in real estate investment becomes so good that they persistently acquire multiple properties, occasionally even diversifying into ventures such as land development and home construction.

In both scenarios mentioned above, individuals frequently extend support to their children by either leveraging the equity from their properties to provide funds for their children’s initial home purchases, or occasionally by directly gifting a property. These particular categories of real estate consumers serve as compelling examples of how real estate can be harnessed to amass wealth and achieve a prosperous retirement.

The third category of real estate consumers encompasses individuals who view life with a pessimistic perspective, often seeing the glass as half empty. This group can be further categorized into two subtypes: those who possess the necessary qualifications but choose not to purchase property, and those who are perpetually dissatisfied with their life circumstances, seemingly caught in an unending cycle of dissatisfaction, the “endless circles of 99.”

Some individuals, despite having the financial means and meeting all the necessary qualifications for a mortgage, opt to remain as renters due to their belief that the housing market will inevitably crash, constantly awaiting a downturn. Unfortunately, this strategy often backfires as they eventually find themselves priced out of the real estate market, leading to a lifelong renting situation.

At the utmost extreme of this spectrum, exist real estate consumers who find themselves in a perpetual state of dissatisfaction. They consistently amass properties, driven by an unceasing desire for that one extra acquisition. Occasionally, this pursuit leads them to stretch their finances beyond prudent limits, seeking a larger house or a greater number of properties than their social circle or peers possess.

Such people need financial wisdom. They need to sit with their qualified financial advisor, who can explain to them the numbers, show them how to use money judiciously.

My two cents

As a human, we need to understand our role and goals in life as they relate to our personal growth in all aspects: health, well-being, spirituality, financial security and last but not the least, philanthropy.

We all get caught up in the material world and start chasing our various desires. Goals are very important and achieving them makes all the sense as long as expectations and goals are realistic. One should be content with what we have and what we can leave for our next generation or give to a cause for the welfare of the society.

Truly speaking, in my opinion, it might not make a lot of sense to leave a lot of wealth for one’s next generation, reason being; if your kids are smart, they won’t need your money.

Most second-generation kids in North America are doing better than their parents and are well settled. They need maximum help in their early years with their university education fees or buying their first property. And it does make sense to help kickstart their life, if the parents are in a position to do that. Now if one’s kids turn out to be irresponsible, then how much ever wealth you leave behind will vanish because these children will blow up the money which their parents leave behind. But again, this is just my opinion, and parents must do what they deem good for their children, according to their means.

Leaving a legacy in this life and after you are gone

Wealth ends up in three ways: Personal Enjoyment, Charity and Waste. It should be our goal to earn a good amount of money honestly and to sensibly enjoy our wealth. Billions of dollars are sitting unclaimed in countries worldwide from people that have not understood how to use money, they are not financially literate and do not enjoy the money while they are alive. This situation is not limited to a few, there are so many billionaires in this world who also lack financial wisdom. If they really want to use their wealth judiciously, then they can also use their wealth to make this world a better place to live.

In the end, I would like to say that at some point we all need to take pause from our busy lives and re-evaluate where we are and where we need to be. Do we have enough, do we need more? Are we enjoying our wealth and life or are we just rushing all the time? We need to find a balance. And we need to make smart decisions around wealth building through real estate or other investments.

And if we are at a stage where we can, we must also contribute to a better future by helping our mother earth, adapting to climate friendly lifestyles, cleaning our rivers, helping out with food shortages, eradicating poverty, promoting education, healthcare and so on.

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