How Will This Story End?

— In a couple of years, you might reflect and say:

• “I wasted a lot of time during this recession playing the victim.” Or you might say:
• “I took a leap of faith, changed my narrative, and seized a lifetime opportunity.”

Which will it be?

In the book Sapiens, author Juval Noah Harari explains how storytelling, ‘common myths’, and fictional creations of the human brain gave humans a unique evolutionary survival edge. It helped create a shared understanding among broad populations and fostered cooperation and societal progress. That’s how large scale projects like pyramids and cathedrals were built. That’s how we got astronauts to walk on the moon. That’s also how some driven individuals accomplish remarkable tasks.

Storytelling, or applying a ‘useful narrative’ is a key talent. A practical tool in overcoming adversity and helping us to thrive.

Humans also have the unique ability to experience time, which allows us to plan for a better future. And planning for the future allows us to deliberately shape our world. – That’s if we act on our useful narrative.

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Last December, I met a gentleman at an Open House who planned to buy his first home. He had been waiting and hoping for a buying opportunity. Disappointed that Honolulu real estate prices didn’t soften during 2019, he shared with me: “Now I will wait until after the election uncertainty.”  – No kidding.

Not sure if he sees today’s COVID-19 uncertainty and record-low interest rates as a buying opportunity, or if he still waits until the election results.

• Do you think he is telling himself a useful narrative that is consistent with his goals? Or, could ‘waiting for certain pre-conditions’ be an excuse not to act?

Ask why you want to buy your home. A clear and strong enough reason might help overcome excuses for not moving ahead.

See related article: The Psychology Of Buying And The Three “Ps” That Are Holding You Back

 “Change your story, change your life.” ~ Tony Robbins   

We are all the product of our past experiences. And we can shape the meaning of our experiences. The ‘Observer Effect’ is a concept from physics where the mere observation of a phenomenon changes that phenomenon. We can choose how we see the past: deliberating, ..or not.

How we look at our past will determine what decisive actions we take today. And the decisive actions we take today shape our future and identity.

Your ‘Story’ Is Your Current Belief Or Narrative

• Is your current narrative consistent with your goals? Or is your narrative holding you back?

When you buy your home or invest in real estate (or the stock market), you should be thinking about a 10 to 20-year time horizon. You are investing for the years 2030 and 2040+, and not for the year of a presidential election. Don’t hang yourself up on the daily news. Avoid pesky distractions. Short-term gyrations of value tend to morph into a mere blip on the long-term graph.

Centennial studies have shown that many mature adults wish they would have taken more chances in life. Experience often comes with the realization of having played it too safe. Choose to take more chances consistent with your values and goals. Make every moment and every decision count towards an improvement in your life. Refuse to let limiting beliefs hold you back.

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‘Commitment’ Instead Of ‘Decision Fatigue’

According to Harvard business professor Clayton Christensen: “It’s easier to hold to your principles 100 percent of the time than it is to hold to them 98 percent of the time.”

A 98 percent commitment means you haven’t decided yet. You are still wavering against your better judgment. You might eat just one little donut, have only one more drink, maybe skip your workout, delay retirement planning, and largely maintain the status quo.  

The marginal cost of slipping ‘just this once’ might be small, but the final cost could be enormous. Decision making takes brainpower. A 98 percent commitment can lead to decision fatigue and sets you up for failure. Inadvertently you will justify the slip which will turn into a slippery slope.

Become 100 percent committed to your goals. That’s how you succeed. That’s how people quit smoking, get healthy, save and invest enough for retirement, and.. that’s how people buy their home.

Deliberately take purposeful disciplined actions every day towards your goals.

Commitment and purposeful disciplined actions are tough. So are short-term sacrifices in place of long-term benefits. The human brain is wired to prefer an easy shortcut. A dopamine rush can short-circuit our grandiose plans. It’s more fun and instantly pleasurable to buy a shiny new phone, car, or another gadget, instead of funding your retirement half a century away.

If you think you can’t, then you must.

“You’re more likely to act yourself into feeling than feeling yourself into action.” ~ Jerome Bruner, Harvard psychologist

Make A Game With Yourself

Break your long-term goals into smaller manageable steps. Make the journey enjoyable. Reward yourself every time you reach a mini-milestone. When you commit to buying a home, determine your budget by getting pre-approved, and save a portion of every paycheck towards the downpayment.

Celebrating small wins will build your confidence and momentum in progressing towards your goals.

See related article: How To Buy Hawaii Real Estate When The Market Is So Expensive

Your commitment and best timing to buy a home should be largely determined by:

• When you need a home.
• When you are emotionally and financially ready to buy.
• When you found a good suitable home that you can afford.

Forget the chatter about timing the market and filter through the noise. Unless you have a crystal ball that predicts the future, the best time to buy is when it matches with your long-term goals.

Speaking about the future…

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Get Comfortable With Uncertainty – You Will Never Have All The Information

A 2013 Nature Review Neuroscience study reads:  “The ability to use past experiences and information to predict the future allows us to increase the odds of desired outcomes while avoiding or bracing ourselves for future adversity.”

Except, there is no past experience to accurately predict the extent or outcome of the current pandemic. There is also no past experience of an epic battle between the vast economic collapse and the most massive Fed/Treasury intervention to ensure an economic recovery.

Where will the pandemic, the economy, interest rates, and housing prices be in 6, 12, or 18 months? What about the unpredictability of human behavior and the role of randomness?

“If you’ve never experienced something like this before, you simply can’t say you know how it’ll turn out.” ~ Howard Marks

This type of uncertainty can contribute to anxiety and fear which could undermine your commitment to your goals. But consider this:

• When, if ever, has there been a lack of uncertainty? 

Have you ever noticed how Wallstreet analysts predict where financial markets might go as soon as a certain ‘uncertainty’ is removed? – No pun intended.

The human mind likes certainty. Cause & effect. Black & white. But life is messy. With incomplete information. You will never have all the information.  –  Therefore, we must become comfortable with uncertainty. Otherwise, how are we going to move forward and accomplish anything?

Jeff Besos wrote in his 2016 letter to shareholders:  “Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”  

“Your knowledge is about the past and all your decisions are about the future.” ~ Ian E. Wilson, former chairman of GE

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Predicting The Future

Experts appear to know squat about predicting the future. In his book Future Babble, author Dan Gardner illustrates how the average expert prediction is no more accurate than a flipped coin.

Two dominant predictions developed during the 2009 Great Recession:

1. This will be worse than the 1930s Depression.
2. The massive stimulus will cause Hyperinflation.

Neither story became a reality. Instead, the US economy managed a careful tightrope walk bypassing both scenarios and enjoying the longest uninterrupted economic expansion in history.

Two similar narratives are being circulated during the current crisis:

1. This will turn into an extended global depression. The coronavirus and the subsequent global wave of bankruptcies and foreclosures will do us in.
2. We might see a vaccine by November. The speedy economic recovery that started in May 2020 will continue with backing and filling in a fashion that will make us as a society more resilient against future health threats and economic shocks.

It’s all just guesswork. We shall see in the fullness of time. Reality might end up in-between. The path out of this recession will depend on containing the virus and our confidence to resume normal work and spending habits. We can achieve that with the right mindset and the appropriate individual and collective behavior.

See related article:  COVID -19 – Hawaii Real Estate

Call me a Pollyanna, but I’m convinced that the innate human drive will prevail. Humans always find creative ways to ‘resume normal work and spending habits.’ Otherwise, society wouldn’t have survived this long.

That’s my story. But don’t take my word for it. Who am I to say. I’m only right barely 50% of the time.

However, if I’m right, will you participate? What will be your story?

Instead of wait and see, I like to take action in anticipation of what story I think is more probable. I might be right or wrong. At least I take action consistent with my story. Better than inertia.

Choose your most plausible story and select the most practical course of action. Pick your ideal outcome and work on getting the results.

The Wrong Map – The Power Of Group-Think

During WW1, hundreds of German soldiers got lost in the Swiss Alps. They found an old hand-drawn map in an abandoned cottage in the mountains. But no one could understand the writing.

Based on the route indicated on the map, despite many dead ends, forks in the road, and loops, they persisted and eventually found their way out of the mountains. Later on, it was discovered that the map was entirely unrelated to the Swiss Alps.

It was the wrong map! But it helped the group smooth over their differences of opinion and reach a consensus. Combined with persistence and constant correction, they eventually succeeded.

Whether or not a forecast is correct, with dedication, courageous exploration, consistent action, and flexibility in the face of change we can often generate the desired positive results.

Consider that your story has the potential to become a self-fulfilling prophecy. – Choose wisely.

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The ‘Perceived’ Threat Is Worse Than Reality

Changing your narrative is an effective tool, an enabler of the desired end-result. Without hope and a future to believe in, the present could be dull and meaningless.

Whenever I experience the threat of an uncertain future event, the reality afterward never turns out as bad compared to how I perceived the initial threat. Without fail.

“The only thing we have to fear is fear itself.” ~Franklin D. Roosevelt

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Choose ‘Positive Prudence’ Instead Of Fear

Fear is when you lock yourself into a closet and you put your life on hold. When has fear and worrying done any good? For me, never. Why be frozen in the tracks? Choose positive prudence instead.

Positive Prudence is when you use logical thinking and strategic problem solving before you take action. You wear a face mask in public, a seatbelt when driving, and you avoid gambling away your life savings in Las Vegas. Use positive prudence and take deliberate purposeful actions towards your long-term goals.  

“Never waste a good crisis” ~ Winston Churchill

There is no better time than now to improve your narrative. Take advantage of the opportunity.

According to John Assaraf: “People who give themselves challenges and conquer their fears and insecurities are happier, healthier, more vibrant, and full of energy, and all-around……live more satisfying lives.”

Close the ‘gap’ between where you are now and where you want to be.

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Fighting Foo & Making Hay

Our grandparents endured WW1 from 1914 to 18, the Spanish Flu from 1918 to 20, the roaring 20s from 1920 to 29, and the great depression from 1929 to 33. After that, they endured WW2 from 1939 to 45. Within 30 years they have gone through plenty of hardship.

Do you think your life is tough? Do you feel entitled and life hasn’t been fair?

‘Foo’ is an intentionally meaningless placeholder word often used in computer programming. ~Tech & Science Dictionary.com. ‘The Foo Fighters’ are rock band from the nineties. And, ‘Making Hay’ means taking advantage of opportunities while they’re available, or to turn something to one’s advantage. ~ Gramarist.com.

Everyone has some challenging moments. Fighting Foo & Making Hay is the mantra that gets me through a tough day.

Essentially it means to me: Stop complaining! Take care of business and overcome my challenges. Always make the best with what I got.  – Works for me.

Commit to having a good time every day. Don’t wait for the virus to disappear, the election results, the economy to improve, or your freedom to increase. Let go of what is stressing you out. Life is too short to suffer. Choose the world you live in. Create a useful narrative that works for you to build your pyramids, cathedrals, complete your moonshots, and buy your home.  

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The Arc Of Hawaii’s Real Estate Story

Most popular story plots consist of 5 elements:  1) status quo, 2) trigger event, 3) consequence, 4) conclusion, and 5) a new status quo.

This general sequence is true for Harry Potter, Toy Story, Back To The Future, and thousands of other stories.

Applying the 5 typical plot elements, this is how I see COVID-19 and the Hawaii real estate story evolve:

1. Once upon a time…  Hawaii real estate was expensive and it seemed to be going up with no end.
2. Until one day…  COVID-19 hit. Tourism evaporated and unemployment numbers shot up to the moon.
3. Because of that…  everyone thought Hawaii real estate values would collapse, and the world as we knew it would come to an end.
4. Until finally… people started to diligently wear face masks and reduce high-risk exposures. Testing and tracking increased. Therapeutics got developed and treatments improved. The number of infections eventually diminished. Consumer behavior normalized and the massive stimulus helped revive the economy from the self-inflicted coma.
5. And ever since… we have become more grateful for having survived. We learned new skills to thrive. The bond and stock market showed the recovery first. And since I’m a bit slow, my new nickname has become the ‘comeback turtle.’

What story you believe in is entirely up to you. You control how you visualize and create the ending of your story. You choose what outcome you desire. Take the most practical, feasible, and necessary action towards making your desired outcome true.

“After tragedies, one has to invent a new world, knit it or embroider, make it up. It’s not gonna be given to you because you deserve it; it doesn’t work that way. You have to imagine something that doesn’t exist and dig a cave into the future and demand space. It’s a territorial hope affair. At the time, that digging is utopian, but in the future, it will become your reality.” ~ Björk

The End Of This Story

Since you read this far, here is the end of this story: The useful narrative I choose and the necessary commitment to reaching my goals.  

• I believe in the long-term benefits of homeownership and investing in income-producing properties. That’s regardless of the pandemic and other uncertainties, including election results.

– I’m committed to diligently improve my portfolio of cash-flowing rental properties for the rest of my life. I’m committed to buying one more investment property by February 2021. – I will report updates on this blog.

• With prudent actions, I can minimize the risk of spreading and contracting the virus.

 – I’m committed to maintaining a strong immune system with proper nutrition, regular 8-hours sleep, exercising, wearing a face mask, maintaining 6 feet distance around people, minimizing touchpoints, and proper handwashing.

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Now it’s your turn. – The choice between a ‘fight’ or ‘flight’ response is a survival tool genetically ingrained in all of us. Which will you choose? Will you blaze the trail, design your future, and ‘build’ your economic recovery?

What’s your story? How will you shape your destiny? Are you taking the necessary action that fits with how your story ends?

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We specialize in representing buyers and sellers of real estate in any market condition. Contact us when you are ready. We are here to help. ~ Mahalo & Aloha