← Real Estate Without Borders
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- [00:01]
A
Welcome back to Real Estate Without Borders. We're gonna get right into it. Cause I had to interrupt Dave complaining about a deal that he's working on in order to do this introduction. So just, just pick up where you left off. What's going on in your life right now that you're. Just lay it on me, man.
- [00:14]
B
I got you. Thanks for this is welcome to Dave's therapeutic podcast.
- [00:19]
A
That's the joke, right? It's like dudes will literally start a podcast before going to therapy.
- [00:24]
B
What's the one that you sent me? They need to start charging more for podcasts.
- [00:27]
A
Start charging more money for podcast equipment.
- [00:30]
B
I saw that and cried, laughing. That's what me and Dan do. Like, honestly, that's. Not to sound cheesy, but like the. It's so. It's so powerful having a friendship like that. Me and Dan have that. That we can, you know, go through these hilarious life work events together. And we're building something right now. So the building phase is always fun. But having like a really close friend like Dan and to like, you know, have these conversations with and laugh about them because I understand. I'm assuming most people listening to this are realtors, so you'll. The people listening watch will get it or consumers. But Realtors, it's really hard to complain, you know, because like we do get paid a good amount of money for what we do. If you're good at what you do. And I'm completely aware that most people don't like us, so I understand. But it's nice having that. That relationship. But anyways, dealing with my first ever in 10 years of selling real estate. Power of sale deal in Ontario, Toronto, Canada.
- [01:21]
A
So for context, because a lot of people listening to the show might be us or outside of the Ontario market, that's basically our equivalent of foreclosure. Like in. There's two different ways that a lender can dispose. Well, a couple different ways, but there's. There's two distinct ways that a lender can get rid of a property. Like try and take it off their books if the person's not paying their mortgage. Number one is they have the power, the power of sale to force a sale of the property. So that would be a for sale, number one. Number two would be a foreclosure. So they can take possession of the property and then they sell it themselves. Now that is a little bit more of a headache. Takes a bit longer. But it's more common in the US they put it on their books and then usually the price can fall A lot more in that regard because they already have the asset and they're trying to, you know, just take it off their books as quickly as possible. And so they're less loss sensitive. Power of sale is a little bit different because they're exercising their right to force the seller to sell the property or they basically just, they list the property under power of sale. I think an important nuance is in either case. And this is going to be, I mean we can chat through this quite a bit. I've done a lot of power of sale deals as a, as a listing agent. I work with a lot of private lenders in Canada. I've done a lot of foreclosure deals in the US as part of the acquisitions that I've done as a co GP or an lp. A lot of people see foreclosure or power of sale and they get excited and they think they're going to get a sick deal.
- [02:43]
C
Right.
- [02:44]
A
And it's very rarely the case, to be honest.
- [02:48]
B
Well that you know who.
- [02:49]
A
Let's talk about why. Yeah.
- [02:50]
B
Sorry to cut you off like that. It was actually. So I think you and I use a similar lawyer. Not always, but we both use Mark Morris quite a bit. Me and I've used Mark Morris since almost day one of my career. I've been to dinner with him in Mexico. Like he, he's just an incredible guy, an incredible lawyer. And one of the things that he mentioned to my client on a call was that, you know, the, there are more risks in a power of sale but the reward is that you get a little bit of a better deal. And in this particular situation I just didn't see the pros outweighing the cons. There was too much risk and not enough reward for the specific deal. Yeah. And Dan, one thing I'm not maybe you did mention it, but I was. But I, I believe the lender, you would know this from being on the listing side more. I believe the lender has to legally show. Legally. I don't know how this legally words tossed around but legally show that they tried to get fair market value for the property. It's not like they can just fire sale it. Right.
- [03:48]
A
Correct. Well, yeah, because they like later in. This is kind of the difference between power of sale and foreclosure. In a power of sale you have. You realize the loss is once you've sold the property but you never took possession of it. Whereas in a foreclosure you realize the losses as soon as you take possession of the property.
- [04:04]
B
What about.
- [04:05]
A
So your Damages are fixed at the point of transfer. Yeah, go ahead, just keep going.
- [04:09]
B
But I want to ask about commission. Don't let me forget.
- [04:11]
A
Yeah, so the, so the, the, the lender will later have to sue the, the borrower of the property for the damages that were incurred during the sale of the property. So any losses, if they're not like the, the borrower might have a decent defense against those damages or try and knock them down if it doesn't show that the lender made a really honest effort to protect the value of the property. Like if they just sold it for way less than it was worth and the borrower basically could say, oh, you just sold it to your friend or something like that. Like, you know, or, or you just sold, you just took the first offer, you didn't even sign it back. So they do, they do tend to negotiate them a little bit harder because they don't want to end up with headaches afterwards in court.
- [04:50]
B
Yeah. So this particular one, okay, first, before I would get into that commissions, I'm. What happens and I'm, I genuinely don't know the answer to this. Let's just say that this guy bought this condo for K. Our offer was 600k. Do they have enough, enough funds? Like who's paying me commission if there's already debts outstanding?
- [05:10]
A
They get added to the damages. So the lender would pay them and then they get added to the damages.
- [05:16]
C
Yeah.
- [05:16]
B
Okay. Okay, that's good to know. So the, the two particular things that, that were a little tricky in the, in a power of sale for my first time homebuyers in this particular situation, which we talk about at our office meetings all of the time because we do have a great lead magnet with power of sale leads at our office. There are two things that stuck out to my first time homebuyers specifically. One is the original owner could, I'm using the wrong words here, correct me, Dan, but like rectify their wrongdoings and repay the debts and take repossession of the property up to two days before closing.
- [05:49]
A
Yeah.
- [05:49]
B
So this is well into the deal. So the issue, did I say that right?
- [05:53]
C
Yeah.
- [05:54]
B
Okay. So the issue that lies with the first time home buyer is that they're giving notice to their landlord, which means they'd be homeless, they'd have a truck full of furniture ready to move in and two days before closing they could lose the whole deal. So that's a bit of an issue obviously. And, and I think in Toronto, I don't think prices are going to change anytime soon. I still think we're in an issue, a weird market but like summer market's really slow so I think right now they're taking advantage of this like really good summer pricing. Unit's been on the market for a long time. If this were to go through and be a 60 to 75 day close in that timeframe, could the market change? Maybe and then it could be a.
- [06:27]
A
Loss for them or the, or the, the borrower just realizes that they're going to incur such a big loss and it makes sense for them to just buy the thing back. Right. Like I have had, I have had a power of sale where I was representing the purchaser where it got, we lost it two days prior to closing. So really it was, it was not two days but it was like five day, five or six days. But yeah, the guy basically bought it out.
- [06:46]
B
He was, what a nightmare.
- [06:49]
A
He, he paid like you know, whatever, I don't know, a million for it and he saw that it was going to sell for 8 and he was like I don't want to incur 200k loss so I'm just gonna, I have to square up on the debt. So it's like the lesson to 200k. Right.
- [07:00]
B
So I was already looking at Rolexes when the lead came in, let alone.
- [07:03]
A
Now such a realtor right now.
- [07:05]
B
Yeah, when the lead comes in I got the fur coat, the, the Rolex lined up but now it's like I can't even be happy after it's firm. I got to worry about all this but really stressed out my client was that the, the lender was not willing to leave HST included in the purchase price as it's a resale property. What Mark Morris, our, our lawyer mentioned in a, in a group call was that even though it's extremely low risk because it was a, it was a condo, in a condo building that's a pretty new condo building in downtown Toronto. There was still somewhat of a risk and the lender crossed out included in and put in addition to the purchase price hst. Our lawyer said that it's a very low risk but there's a chance that if this person was using it for business purposes or income producing purposes that, that the CRA could find and come after the new buyer for hst. And it was something that they would, there's nothing we can do on our end to like pre find this out. It would just be something that would end up getting slapped on them down the road, which is a big number. And again the risk was like next to zero, but it's still higher than normal. Those were the two issues. And honestly, it's funny, I had to talk to the lawyer for those that aren't lawyers or aren't realtors listening to this. And if you're a lawyer listening to this, this lawyer talked to me like I was like a three year old kid with my first day on the job, you know, like I, I know that lawyers don't like realtors and for probably good reason, you know, but in the power of sale we're trying to.
- [08:28]
A
We'Re battling it out for who gets to be the most hated profession of the year.
- [08:32]
B
Honestly, honest. So like this I, in this specific power of sale deal, it was me negotiating with the lawyer, not the realtor. The realtor was basically like, hey man, I'm just here to like move the paper document over here. And I was talking to the lawyer and when the lawyer called me he had like crossed out like all the words on the pre, like we send over an offer, we can, we edit the spaces that we're able to edit as a real estate professional. But there's pre populated wording all over the agreement and this lawyer had like crossed out the pre populated wording and.
- [09:00]
A
That'S not uncommon though, to be fair. Like I, I've seen a lot of that stuff.
- [09:04]
B
Yeah, me too. But to a first time home buyer you're like, yeah, whoa, whoa, whoa. And then I was asking questions and he was just like, every time he'd say something, he'd say, do you understand? And I was like, yeah man, like stop him and say I'm not a, I do deals.
- [09:18]
A
I think the important thing to note here with both foreclosures and power of sale is that the lender really can't make any representations about the property.
- [09:25]
C
Right?
- [09:25]
A
Like they don't, they didn't own it, they know nothing about it. Right. All they did was lend money against it. And they can't, they quite literally just cannot do like any representations or warranties. And they don't really, they aren't familiar with the property. And this is both for foreclosure and power of sale listings. So usually you'll see those listings in as is where is condition and, and they will not budge from that. So that's a really important thing for people to know who are trying to buy foreclosures or power of sales.
- [09:49]
B
Yeah, that was, and, and that was the third issue is that the last thing a first time home buyer wants to do. Like a first time home buyer, you know, this is this is very likely their largest purchase to date. Their largest investment or whatever you want to call it. Purchase, let's say to date and it' big deal. And the last thing that they want to do is go and put all this hard earned money down and then walk into a new property and have to get a new stove, a new fridge and. Because again, it was a lower risk because it's in a condo. But it, and you know what, it started off, I don't know why they put an offer on, to be honest. It was actually kind of intimidating. We walked in and on the door was like all the sheriff's entry notices and stuff. Very intimidating. For a first time home buyer to be like what you know it was. And like the houses, the condo was in kind of like disarray a little bit. Looked like they dragged them out in handcuffs or something. But, but it was empty, which is weird. So does that mean. Actually it's a question for you. Does that mean that the. So the, the bank has now full control of this property?
- [10:48]
A
Yeah, yeah, they basically, they have, they get something called a writ of possession. So in a foreclosure they actually buy like take possession of the property. So it gets foreclosed upon and they, they become the owner of it. But in a power of sale, they functionally own the property. Like they have all the same rights of the owner. They, they have changed the locks, they have a writ of possession. So they have possession of the unit. They just don't, they're not legally like on title as the owner of the property.
- [11:12]
B
Interesting. Okay, that's good to know. I didn't know that. Yeah, it was interesting situation and it just, the, the risks didn't outweigh the reward or. Sorry, the risks did. The reward didn't outweigh the risks. You get what I'm trying to say? Yeah, and that's. That, that's, it's the first time. I mean obviously we're seeing more power of sales in, in the Toronto real estate market, maybe globally. But that's, that's, that was my experience and it wasn't a great one. The deal didn't go through. We ended up backing out. We're gonna go for a different one, thankfully. But hey, it is what it is.
- [11:45]
A
You know, can't do much about it.
- [11:46]
C
Right.
- [11:47]
B
Can't do much about it. But you want to jump into.
- [11:51]
A
Yeah, sorry, go ahead, let's get into it. No, yeah, I was gonna say let's get into this episode. What are we gonna be talking about? I mean we, I Feel like now this episode's half about foreclos. Do we'll talk about the millionaires.
- [12:00]
B
Yeah, let's talk about millionaires and foreclosures. I think billionaires.
- [12:04]
A
Every country's richest billionaire. Quick list. And then we're going to move on to.
- [12:10]
B
We'll save the most money.
- [12:11]
A
Yeah. Which is really interesting. Actually surprised me the most because a lot of them also appear on the list of places with the highest debt. Does it really count?
- [12:22]
C
Right.
- [12:22]
B
Interesting. I'm kind of curious to see if the list. So we're going to compare two lists. We're going to compare where do people save the most money? And then second to that and in. In. In contrast, every country's richest billionaire. So it's just like who's saving the most money in the. In these. Which country saving the most money? And every country's richest billionaire in 2025. Which I think is like two cool, contrasting charts.
- [12:47]
A
Okay, so let's start in North America here. We've got. We already discussed this fellow on the show last week. So We've got the U.S. yeah, we got the U.S. mexico and Canada. Who's the richest person in each country?
- [13:00]
B
Interesting. In Mexico, I gotta find out what they do. Can you hear me?
- [13:06]
A
Yeah, I can hear you.
- [13:07]
C
There we go.
- [13:08]
A
We got Carlos Slim in Mexico. He's a telecom guy, I think. I think he does telecom.
- [13:14]
B
That's a really cool Instagram handle. C. Slim. Carlos Slim.
- [13:19]
A
It's a good one.
- [13:19]
B
Sorry, I had to. And then Canada.
- [13:21]
A
In Canada, it's. Well, this is just the richest person in each. Each country. Changpeng Zhao. Never heard of him, to be honest with you.
- [13:29]
B
We gotta look this up. I'm get on that.
- [13:31]
A
Binance. That's who it is. CEO of Binance. I should have heard of Binance. Yeah, you know Binance, right? It's like a crypto exchange.
- [13:37]
C
Yeah, yeah, yeah.
- [13:38]
B
He's. He's Canadian.
- [13:40]
A
Sounds like it.
- [13:41]
C
Wow.
- [13:41]
A
Changpeng Zhao, who goes by CZ, also a sick handle. Founder and former CEO of Binance.
- [13:47]
C
Wow. Yeah.
- [13:48]
B
So us Elon Musk. What's he worth?
- [13:52]
A
342 billion, which is crazy.
- [13:55]
B
Mexico, Carlos Slim is 82.5 billion and Changpeng Zhao 62.9 billion.
- [14:06]
A
Crazy, crazy, crazy. South and Central America, eduardo Saborin, Brazil, 34 billion in Chile, Chris Font Bona and family. Columbia, Jamie Galinsky, Bacal and David Velez and family. I feel like in a lot of these countries there's probably also people who are richer that just don't show up in yeah, of course, the data. There's a cool one on this list, though. Belize, Kenneth Dart, 9 billion. Justin's son, Saint Kitts and Nevis, 8.5 billion. Marcos Galperin. Argentina, 8 billion. Juan Carlos Eschat. Venezuela. 7.4 billion. Peru, Hoschild. It's like the Rothschilds, I guess.
- [14:48]
C
Yeah.
- [14:49]
A
Barbados, Rihanna, 1.4 billion.
- [14:53]
B
One point. How is Rihanna at 1.4 billion?
- [14:55]
A
She had like that Fenty clothing line, a bunch of stuff. Like a lot of that. Like, you know, a lot of those. She's rich, man. She's done a lot of music and she's done well for herself. Done a lot of good spin off business.
- [15:04]
B
Good for her. I'm going to. I'm asking Chad to see her win, man. I love seeing people win. Rihanna just went from a singer to just. What's. Is it Fendi or Fenty?
- [15:13]
A
Fenty, yeah. Like F, E, N, T Y. I.
- [15:16]
B
Don'T think I've ever heard of that. I'm gonna check that out right now. Okay.
- [15:19]
A
Yeah, she came out with it before Fentanyl came out.
- [15:22]
B
So here's a. Here's a quick. A quick one, two. On. On. On Rihanna. Why she's so rich. Music career, 250 million records sold. Touring, yada yada yada. Music is a small slice of her fortune. And she's got Fenty Beauty, launched in 2017. By 2018, made 550 million in the first year.
- [15:42]
C
Wow.
- [15:42]
B
Putting her mosey to shame. She's got Savage X Plus Fenty, which is a lingerie brand. It's valued at 1 billion. At its peak, Rihanna owns 30%. She's got the Fenty fashion too.
- [15:55]
A
What the.
- [15:56]
B
She owns multiple mansions in la, Barbados and beyond.
- [16:01]
A
Real estate with a Borders gal that.
- [16:03]
B
We got to get. Who knows Rihanna and who's going to get her on the show?
- [16:06]
A
Just talk about her holdings.
- [16:08]
B
Does she.
- [16:09]
A
Her favorite thing to talk about is her real estate. I would love that to be fair. Like, Nick and I interviewed billionaire founder of Lululemon, Chip Wilson. And crazy. He's a huge real estate guy. He owns like 3 billion of real estate. So anyway, super cool, sick guy.
- [16:25]
B
Lululemon stuff doesn't really fit me. So I don't really like, like. I'm sure he's cool, but I don't love his stuff.
- [16:30]
A
Just Jack dude problems. Yeah.
- [16:31]
B
I'm too jacked and I'm too. I'm too jacked and I'm too tall.
- [16:34]
A
You know, it doesn't fit for.
- [16:36]
C
Yeah.
- [16:37]
A
Yeah. Such a first world. Most first World. Problem in the world.
- [16:40]
B
No, it's tough. It's too short.
- [16:42]
A
Is it really? Yeah, yeah. I don't know. I'm short, so I don't have that problem.
- [16:45]
B
You're not that short. But for me, it's like. The problem is I have to get the extra large, but then it's like wide and then it's not a box. Not good.
- [16:52]
C
Right.
- [16:53]
B
Sorry, Chip.
- [16:54]
C
That's all right.
- [16:55]
A
I don't think he really cares. He's not involved in the company anymore.
- [16:58]
B
Oh, he's good for him.
- [16:59]
C
Yeah.
- [16:59]
A
Just his big shareholder. Asia and Oceania. India, 92 billion. Mukesh Ambani. China. Zangy Ming, 65.5 billion. Pan Tadashi and family, 45.1 billion. A lot of rich people here. UAE. Pavel Durov. That's not who I expected to be there. I feel like there's a lot of the families there that, like the. In the kingdom that probably just don't. These numbers.
- [17:29]
B
Yeah. Like, where's all the.
- [17:31]
A
Like, the. Saudi Arabia. They have it. Prince Alawid Bin Talal Al Sod.
- [17:38]
C
Yeah.
- [17:40]
A
Interesting, though.
- [17:40]
C
A lot of.
- [17:41]
A
A lot of rich folks around the world, man.
- [17:43]
B
It's like, if you go down to Europe, there's like France, the. It's all families, eh? The Bernard.
- [17:49]
A
Well, like they just say and family because they're part of the wealth, right?
- [17:53]
C
That.
- [17:54]
B
France, 178 billion. Crazy.
- [17:58]
A
You know who that is, right? That's the LVMH guy.
- [18:00]
B
Who is it?
- [18:02]
A
Lvmh. Louis Vuitton, Moet and Hennessy.
- [18:06]
B
That's Bernard Arnault.
- [18:08]
C
Yeah.
- [18:09]
B
I didn't know that.
- [18:10]
A
CEO and owner of lvmh.
- [18:12]
C
Wow.
- [18:13]
A
Rich dude.
- [18:15]
C
Wow.
- [18:16]
B
What about. Do you know. Do you know anyone else on this list? Like the who. Like, who's the Italian? Giovanni Ferrero. Is that Ferrero or Shea?
- [18:23]
C
Yeah, it is.
- [18:24]
A
No, I think so.
- [18:25]
C
Yeah.
- [18:26]
B
Ronnie, hold on. How do you spell the last name? Sorry, I'm looking.
- [18:29]
A
F E R R E R O.
- [18:31]
B
Who is he? What an episode. This is. Just. If you want to find other richest people in the world, have a listen and see what they own.
- [18:37]
C
Yeah.
- [18:38]
A
The other one is Armancio Ortega.
- [18:40]
C
Who?
- [18:40]
A
You would know. He owns Zara.
- [18:41]
B
I didn't know that.
- [18:42]
A
Dude from Spain.
- [18:43]
B
Yeah, he does own Ferrero. You know what else he owns? Guess.
- [18:50]
A
Nutella.
- [18:51]
B
Dude, how'd you know that?
- [18:52]
A
Yeah, because Nutella is in the middle of Ferrero Rochers. You didn't know that? That's why they're so good.
- [18:56]
B
I didn't know that either. This Is a big episode for me. If no one listens to this episode, I'm having a great time. Okay, well, this is actually two more things that he owns that are also, like on my top. It's my top favorite chocolate.
- [19:08]
A
I don't know if it's not Ferrero Roche. I don't.
- [19:10]
B
Give me one guess, man.
- [19:11]
C
I don't know.
- [19:14]
A
Kinder. Surprise. Dude, Did I get it?
- [19:16]
B
Yeah, I swear to God.
- [19:18]
A
Kinder Sick.
- [19:19]
B
Kinder. And then he also owns Tic Tac, which is wild.
- [19:22]
A
Also sick.
- [19:23]
B
Also really great.
- [19:24]
A
This guy gets it. He knows. He gets like. He just knows all the good stuff.
- [19:29]
B
Wow. Italians get it, man. What's his name again? Giovanni Ferrero.
- [19:34]
A
Sick name, too.
- [19:35]
B
What a handle, dude. These guys got sick handles. Anyways, that's. He's born in 1964 and I can't even say it. We've got to look to see if we can purchase there. Get Temur back on here.
- [19:47]
A
I've been trying to get Temur and Alessandro back on the show.
- [19:50]
B
Will they do it? Do they do a joint episode or what?
- [19:52]
A
We should do one. Yeah. Let's just tee it up. Tee it up. We also met a guy, like an agent came into our office who just bought a bunch of precons in Portugal and has been basically marketing pre cons to North American real estate professionals in Portugal.
- [20:08]
B
Yeah, he's a super nice guy. We should have him on here too.
- [20:10]
A
Yeah, for sure.
- [20:11]
C
For sure.
- [20:11]
B
You want to get into the savings?
- [20:13]
A
Yeah, let's talk about savings. So I just got to pull it up here.
- [20:15]
C
But.
- [20:17]
A
Where do people save the most money on earth? What countries have the highest savings rates? So the household savings rates of different OECD countries in 20. 22% of household disposable income. Switzerland, 19.3%.
- [20:33]
B
Give me a. Give me a breakdown of how this. Where they're getting 19.3.
- [20:38]
A
They basically just.
- [20:39]
C
What.
- [20:39]
A
How much do people end up saving?
- [20:41]
B
Percentage.
- [20:42]
A
Yeah. Of their household income.
- [20:43]
B
Yeah, so they're saving 19% of their household income. Interesting.
- [20:48]
A
Now the interesting part about that is like, I don't know if it necessarily counts because later on that list, you see Canada. You also see the Netherlands. Okay. And so the Netherlands is number one, number three. So I'll just go through the rest of the list. So.
- [21:03]
B
Yeah.
- [21:03]
A
Switzerland, Sweden.
- [21:05]
B
Sorry, sorry, sorry. Why is Switzerland Ch.
- [21:08]
A
Confederation Helvetica.
- [21:10]
C
That's what it's. That's obviously.
- [21:12]
B
Obviously that's what it would be for.
- [21:13]
A
Switzerland, Sweden, Netherlands, France, Germany. Germany's de. Well, you know this one because you lived in Germany, so Korea, Canada.
- [21:22]
C
Okay.
- [21:23]
A
And then, and the reason I wanted to make sure we included Switzerland, Netherlands and Canada is because if you look at death debt to household income.
- [21:33]
C
In.
- [21:33]
A
Canada, Canada, the Netherlands. Yeah, well Canada, the Netherlands and Switzerland are typically in the top three when Denmark is in there as well.
- [21:43]
B
Can you explain that just a little bit like in crayon?
- [21:46]
A
Yeah. So this is how much debt each country has relative to their household income. Well here actually I'm going to look at, I'm going to pull up this chart. So this is from Deutsche Bank. This is, this goes to 2022. So similar, similar time frame, top ones. Norway, Australia, Sweden, Canada, UK Eurozone, us Switzerland should be on here. But it usually is. There's some other ones.
- [22:08]
B
Debt to income ratio is how much.
- [22:11]
A
How much debt you have outstanding relative to how much money you make in the year. So.
- [22:15]
B
Okay.
- [22:16]
C
Yeah.
- [22:16]
B
So, so Obviously anything above 100% they have more debt than they have income coming in.
- [22:21]
A
Yeah. So it would take them more than a year if they took every dollar that they, that they made that year.
- [22:28]
B
Understood. Here's another. Okay, so interesting. Canada. Sweden. Was Australia on that? I'm going to pull it up. Was Australia on that first list? I don't believe so.
- [22:40]
A
It should be up here somewhere. No, it's not.
- [22:42]
B
No, no. Norway. No, no.
- [22:46]
A
But like Switzerland. Sweden, Netherlands.
- [22:49]
C
Right.
- [22:50]
A
Canada.
- [22:50]
B
So what, these guys are just saving their money and not doing nothing with not paying back their debts?
- [22:54]
A
I guess. Yeah, I mean, I guess it's like literally just, it's, it's like they, they're saving money but they also have a lot of debt. So they're just choosing not to pay their debt down.
- [23:05]
C
Right.
- [23:06]
B
I wonder if they just have really good interest rates.
- [23:08]
A
Well, that, that might be the thing. Right. Is like, is debt cheap in those countries?
- [23:12]
C
Right.
- [23:14]
A
So if you look at like debt to gdp, Canada leads, then Japan and households have. Canada has the highest debt to GDP for households. Right. So the purple line is really all you want to pay attention to here.
- [23:24]
C
Right.
- [23:24]
A
The rest is just the government and we know the governments like to spend.
- [23:27]
C
A lot of money.
- [23:27]
B
Interesting.
- [23:29]
A
Yeah. So I mean my thought is here, like you would think a good household savings rate means like people are financially responsible and it can progress the country but it could also just mean that they're not paying debt down and.
- [23:40]
B
Right.
- [23:40]
A
You know, and they, and a lot of these countries are debt fueled economies and I think debt is a bit of a, like it's this whole thought experiment could go either way where you've got countries that are financially responsible or maybe we're interpreting them as financially responsible or you've got countries who are just actually financially irresponsible. It appears like they're financially responsible because they're saving a lot. But if you look at a different metric like debt, debt to household income, they're actually not and that's a bigger risk factor. Like I would say any country that has a household debt to income over a hundred percent would, would say that that country, if they ever want to grow in a debt fueled economy that that level needs to get below a hundred because otherwise you can't take on more debt in a higher rate environment. And so they need to deleverage.
- [24:28]
B
Understood.
- [24:28]
A
And so I'd be looking for countries like Canada, the U.S. sorry, Canada, Switzerland, you know, the Netherlands to, to be deleveraging over the next little bit as we are settled into this higher rate environment which could change the rate environment could change. Right. Like that's probably the one thing that is most capable of changing for the next little bit. But yeah, it's my two cents I.
- [24:52]
B
Have here and I don't. I. We would need to fact check this for sure. It's just according to chat gbt but it's like why Sweden has cheap debt. So for much of the which I don't know if that's like relevant or maybe they're carrying over debt from a long time ago. Sweden's central bank, Rick's Rickus Rickus bank kept rates very close to zero percent. So borrowing was basically free. So households and businesses loaded up on mortgages and loans. There's also like a really high trust in the system. It says Swedish banks are considered safe and stable. So debt feels manageable. So maybe that's carrying over from, from years ago people having these big loan amounts with maybe like grandfathered in interest rates and, and that's why they're just not paying it back because why would they, you know, their buffer mentality. It's like culturally Swedish people like to have a financial cushion. I mean who doesn't with economic uncertainty, inflation, global slowdown. People prefer saving for security. Jesus, that was tough. Sorry about that. People prefer saving for security rather than rushing to pay down mortgages. I mean, you know, you're welcome. We got to go to Sweden and get some cheap loans, bring it over here to Canada. That sounds amazing.
- [25:58]
A
Yes sir. Well that's like, and that's called the carry trade. I don't know if you've heard of that but like that's like have you heard of the Japan carry trademark.
- [26:04]
C
No.
- [26:05]
A
So, yeah. So basically like people have been borrowing money from the Japanese economy, like in the end, because you can, like Japan's rates have been low for such a long time that they've been borrowing in that and then investing it in the U.S. economy. And so it, you know that that was called like a carry trade. Right. You borrow money in one country and you invest in another country and you make this the spread because like you, the cheaper you can borrow, the more it amplifies your return.
- [26:28]
C
Right.
- [26:29]
A
So a lot of the, A lot of the economies around the world actually depend a lot on the Japanese bond yield.
- [26:35]
B
I did not know that. Yeah, this is a big episode for me.
- [26:38]
A
I mean, it's all that matters, man. Just, just helping you learn here personally.
- [26:43]
B
This is a great way to get Dan's brain for free for up to an hour per week. No, that's awesome. I, I honestly, it's cool. I like learning about this stuff because again, I always say this, but I feel like I don't say it enough and I got to stick to my boy Alex Ramosi's saying where maybe you got to repeat yourself a bunch of times. But I think the reason we made this podcast to help people understand not just global economics, but like global trends, real estate around the world, because it does all sort of tie back together. And if we can make the listeners of this podcast more educated when it comes to investing if you're a consumer and also more educated if you're helping people invest as a real estate professional, that's the ultimate goal. And I think every week we just really have such a diverse topic and like it all ties back in. It's super cool because you see the same trends kind of globally and by learning different things, you can maybe see investing in a bigger, from a higher up lens, you know, and really help analyze any sort of decision you do going forward, which is such a good time. And honestly, the funnest part about this podcast to me is that we're, we're not overly scripted. I love learning, like on the fly. I like learning and talking about this stuff. It's so much more for me enjoyable and just like a good time. I hope the listeners feel the same way, to be honest.
- [28:04]
A
Yeah, same. On that note, if you enjoyed this episode, please leave us a five star review. We have a lot of five star reviews on Spotify, so thank you. We do not have a lot of five star reviews on Apple, so please just get that together. But.
- [28:19]
B
Apple users, what are we doing wrong? What are we doing?
- [28:21]
A
We still got a couple legacy, like bad reviews on Apple from, you know, when we we used to talk over one another because Dave didn't have Internet connection and max in 2G or whatever. Carlos Slim, man. Carlos Slim's got to get together out there, brother.
- [28:37]
B
Let me give you a call here, Carlos.
- [28:39]
A
So, yeah, beyond that, I would say if you can share this episode, give. And we we also, like, really appreciate suggestions from the audience of things that we want to talk about. So we see all your comments, like when you comment on Spotify or leave us a review, we'll read them and we'll try and accommodate your needs. So do that, too. Otherwise, I think that's it.
- [28:55]
C
Thanks a lot.
- [28:56]
A
And we'll see you next week.