In Pursuit of Happiness – A Popular Folk Tale
The Endless Circle of 99
Have you heard 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 dissatisfied with life. One day, he came across a farmer singing cheerfully while working on his small patch of land. The king was intrigued. How could a man with so little appear to be so happy?
He summoned the farmer to his court and asked him directly, “How are you so happy?”
The farmer smiled and replied, “I may not be wealthy, but my family and I have food to eat, clothes to wear and a roof over our heads. We do not need much more. We are content with our lives.”
The king was not convinced, so he asked his ministers to explain the farmer’s happiness. One minister replied that perhaps the farmer had not yet entered the circle of 99. Curious, the king asked what that meant.
The minister proposed leaving a bag containing 99 gold coins at the farmer’s doorstep. The king agreed.
The next day, when the farmer returned from the fields, he discovered the bag. Overjoyed, he began counting the gold coins. He counted them once, then again, but there were only 99. Puzzled and upset, he searched everywhere for the missing coin. Why, he wondered, would anyone leave 99 coins instead of an even 100?
From that day forward, his life changed. Determined to earn the 100th coin, he began working longer and harder. He became exhausted, irritable with his family and increasingly unhappy. In his pursuit of one more coin, he lost the contentment he had once enjoyed.
When the king later saw the farmer looking stressed and miserable, he asked his minister what had happened.
The minister replied, “The farmer is now trapped in the endless circle of 99. Although he once had everything he needed to be happy and then received 99 gold coins, far more than he could ever have imagined, he can think only of acquiring the 100th coin. That is what the circle of 99 does to a person.”
Even when people have enough, they may remain discontented because they are always pursuing the one additional thing they believe will finally make them happy.
Is this not something we should all consider when reflecting on what we already have and what we continue to desire?
What Does This Story Have to Do with Real Estate?
What is the message of this story, and how does it relate to real estate?
Building wealth is important. It can provide financial security, allow us to enjoy life, help our families and support causes that matter to us. However, the pursuit of wealth needs direction and balance.
Scotiabank has long used the slogan, “You’re richer than you think.” In a literal sense, this may be true for many Canadian homeowners. Over the past two decades, Canadian real estate values have risen considerably in many markets. As a result, numerous homeowners have accumulated substantial equity and may be in a stronger position for retirement than they realize.
Three Types of Real Estate Consumers
1. Homeowners and Renters Who Value Stability
The first category includes people who are content with their present circumstances. Some remain in the same home for many years, possibly until retirement or later in life.
Many begin with a starter home—perhaps a condo apartment—while they are young and raising a family. As their needs and finances change, they may move to a larger home, such as a townhouse, semi-detached home or fully detached home. That property may remain their home throughout retirement, or they may eventually sell it and use the equity to downsize, rent or help fund their retirement.
This category can also include long-term renters. Some people consciously choose to rent because it better suits their finances, lifestyle, mobility or personal priorities. Homeownership is not the only path to a secure and fulfilling life, provided that renting is supported by thoughtful saving and financial planning.
2. Homeowners Who Build Wealth Through Investment Properties
The second category includes homeowners who acquire a second or third property as an investment. Over time, these properties may appreciate and generate rental income. Some investors hold them for many years, while others sell and reinvest the proceeds in different properties or other assets.
As retirement approaches, many choose to sell some or all of their investment properties and move the proceeds into more passive investments, such as dividend-paying stocks, bonds, exchange-traded funds or mutual funds. They may no longer wish to manage tenants, maintenance and other responsibilities that come with owning rental property.
Others retain a strong interest in real estate and continue investing because they have developed considerable knowledge and experience. Some eventually diversify into land development, home construction or other real estate ventures.
In either case, property owners may use part of their accumulated equity to help their children purchase a first home. Some provide money for a down payment, while others may eventually gift a property. These examples demonstrate how real estate, when purchased prudently and managed responsibly, can contribute to long-term wealth and a more secure retirement.
3. Those Who Are Guided by Fear or Never-Ending Desire
The third category includes two very different groups: those who remain permanently fearful of entering the market and those who continually acquire more, never feeling that they have enough.
Some people have the financial means and mortgage qualifications to buy a home but continue renting because they believe the housing market is certain to crash. Waiting can sometimes be sensible, particularly when a person’s finances or circumstances are uncertain. However, endlessly trying to identify the perfect moment can carry its own risk. If prices or borrowing costs rise while they wait, some prospective buyers may find homeownership increasingly difficult to attain.
At the other end of the spectrum are people who remain dissatisfied regardless of how much real estate they own. They continually pursue one more property, a larger home or greater wealth, sometimes merely to keep pace with friends or peers. In doing so, they may overextend themselves financially and become trapped in their own endless circle of 99.
Real estate decisions should be guided by sound numbers, realistic goals and a clear understanding of risk, not by fear, comparison or an endless desire for more. A qualified financial advisor can help individuals assess their complete financial picture and use their money wisely.
My Two Cents
As human beings, we need to understand our roles and goals in life. Personal growth should not be measured by money alone. It also includes our health, well-being, relationships, spirituality, financial security and, importantly, our willingness to help others.
We can easily become caught up in the material world and begin chasing one desire after another. Goals are important, and working towards them is worthwhile when they are realistic and meaningful. At the same time, we should appreciate what we already have, consider what we truly need and think about what we may leave for the next generation or contribute to the welfare of society.
In my view, leaving an excessive amount of wealth to the next generation may not always be necessary. Children who are capable and responsible may build successful lives of their own. What often helps them most is support during their early years, perhaps with post-secondary education, the purchase of a first home or the establishment of a career or business.
On the other hand, leaving a large inheritance without preparation or financial understanding may not benefit children who are unready to manage it responsibly. Every family is different, of course, and parents must decide what is appropriate for their children and consistent with their own financial means and values.
Leaving a Legacy-During Your Life and Beyond
Wealth can generally serve three purposes: personal enjoyment, helping others and leaving a legacy. Our goal should be to earn honestly, spend thoughtfully, enjoy life responsibly and use our resources with purpose.
A considerable amount of money remains unclaimed in financial institutions and government programs around the world. This reminds us of the importance of financial literacy, proper estate planning and open communication with our families. Wealth has limited value if we neither enjoy it wisely during our lifetime nor direct it towards people and causes that matter to us.
This principle applies even to the extremely wealthy. Used thoughtfully, great wealth can support education, healthcare, environmental protection, poverty reduction and many other efforts that make the world a better place.
At some point, we all need to pause and re-evaluate where we are and where we wish to go. Do we have enough? Do we truly need more? Are we enjoying our lives and using our wealth meaningfully, or are we constantly rushing towards the next goal?
True wealth is not simply the number of properties we own or the balance in our investment accounts. It is the freedom, security and opportunity to live well, help those we love and contribute to something greater than ourselves.
Finding that balance requires thoughtful decisions about real estate, investments and retirement planning. It also means recognizing when we are in a position to help create a better future, by protecting our planet, adopting climate-friendly habits, caring for our rivers, addressing food insecurity, reducing poverty and supporting education and healthcare.
The pursuit of wealth can be worthwhile, but it should never become an endless circle of 99.
