PERSONAL EFFECTIVENESS [PART 7]

Some serious property news on the wires at the moment!

Wasn’t the news of the rate reduction good news? On the one hand, as is the case in America, a reduction in rate can mean the economy is not firing well but, as so in our case, we had good news on the Inflation front which convinced enough members of the SARB MFC to reduce the rate. Inflation has been just over 5% in the last two rounds and that is within the target band of 3-6% as well as indicating some stability in the Rand. Point is that the situation allowed the SARB to signal a downward trend and, goodness knows, we need it. Whilst we remain in recession and, I think, will be there for another quarter at least, we’ll take what we can get.

On the political front, things seem to be moving in the right direction. It seems some brave ANC MP’s have found their voice so let’s see. The solution for SAA by selling Government’s [read PIC] stake in Telkom is a shocker of immense proportions. PIC is the government pension fund and it has a good stake in Telkom on behalf of millions of pensioners, current or future. To sell that to bailout SAA is madness, throwing good money after bad and keeping a dying dog alive. Already our new Finance Minister has had to tuck into the Emergency Fund for R2.3bn to pay out Standard Chartered who refused to roll their bond and continue funding SAA – a good credit call for a bankrupt company if not financially, then managerially. In doing so, with hours to make up his mind, he had to do what he did. BUT, the solution for SAA is to not renew the contract of its CEO in a few weeks’ time, fire the rest of board, reinstitute good governance and then sell the company to private investors [Ethiopian Airlines comes to mind, believe it or not] and recoup all or most of the capital and sureties that government has issued to borrowers. Why is this part of a property blog? Because, if this kind of miracle cure was realised, it would mean sanity is prevailing in the State-owned enterprises and a huge economic turnaround is beginning.

As a final thought, imagine a government of President Cyril, Justice Minister Thuli and Finance Minister Pravin et al. We would be a great nation again. To full circle, the other good thing about declining inflation rate is that it gives us a snowball’s hope in a fridge, of getting some real house price growth in 2017.

On the property side:

1. Knight Frank and Wealth-X conducts research that concentrates on high net worth individuals and is about to release its report about the world’s wealthiest people and luxury items.. Cal led the Knight Frank’s Global Wealth Report, the 2017 report will be released in South Africa in August. Last year’s report placed Cape Town as third globally in terms of the annual price of property growth. However, in 2017 it seems Cape Town may have dropped from third to the fourteenth spot globally. In 2016, the City of Cape Town was ranked third in the world for the highest housing prices, falling behind only Shanghai and Vancouver. According to FNB’s latest survey: “In the 2nd quarter of 2017, the City of Cape Town’s estimated average house price growth rate remained in a double-digit territory to the tune of 13.8% year-on-year. However, while still very strong, this year-on-year price growth rate represents the 5th consecutive quarter of slowing from a 10-year high of 15.7% revised rate recorded in the 1st quarter of 2016.” Sorry for the home owners but the news is good in my opinion – being such an outlier in the context of South Africa could simply be a bubble waiting to burst.
2. The latest FNB house price indices have indicated that house price growth is declining at increasingly similar rates. The outliers were the High and Affordable markets. No surprise there as the one has money and the other needs housing. In fact, what I hear is that the developers have a backlog of construction for already sold houses in the latter market. I don’t think that would continue but it’s good while it lasts.
3. What will 25bps do for interest? Very little seeing it’s only a 3.6% reduction in interest costs. But we live in a country that needs good news and this reduction is good news. Will confidence flow? No, it will take more than a rate reduction to instil game-changing confidence and for that our “good” politicians are responsible.

With a few property points behind me, a further Personal Effectiveness insight. It’s brief this time but hopefully hard-hitting. Not as direct and clear as the previous versions but written from my heart. Remember, if you are striving for the pinnacle of success in your personal effectiveness, then learning from the lowly examples is good “medicine”. So read on and between the lines to be challenged once more. The Japanese used the word keizan to mean “continual improvement”. A facetious part of me wants to say, which part of continual…improvement don’t you understand? Relentless, persevering, ongoing improvement and all held to a higher-and-higher standard of performance. If you’ve just watched Froome win his 3rd consecutive and fourth out of five Tours de France, and Spieth bail himself out of a down-and-out mess in The Open, [and the Lions beat the Sharks in the dying moments of the game…. had to throw that one in!!] then you know what I’m talking about.

CHOICE OR CHANCE?

Here’s the story. One week ago I stood in for my wife at our church’s soup kitchen. It was cold and, far more than normal, 40 people arrived for an orange, 2 slices of bread and the customary cup of soup. About 10 women and 30 men, some neatly dressed carrying themselves with dignity and others dishevelled and obviously hungover or even, recently drunk. All well behaved, for in this environment to misbehave is to miss out on the precious, hot cuppa soup. Perhaps though, being in a church ground also called a higher standard from each present; perhaps a sign that we are all human and in another Presence, we cloth ourselves with a higher attitude than normal. Some were old and others younger. Living testament that age and social standing don’t really bear any correlation – you can be poor young and poor old, it really doesn’t matter. Some were neatly shaven and/or their hair washed. I thought to myself, where in heaven’s name do you find the water and soap to look good when the difference between a meal or not was this soup-line? What dignity drives such cleanliness or was it just luck that found an ice-cold tap that day? And there they stood, each with a story no doubt and few with anyone to listen or even care enough to pass the greeting of the day. And once they had their first helping, they immediately joined the queue for another cup of the hot brew. Eventually, even the 4th large pot ran out and people slowly went and sat on the steps to eat their bread and orange. After one hour, everyone departed; back onto the streets to whatever they called “home”.

Fascinating and sobering that one soup kitchen in our town. What made it so was not the people in the line but the fact that I was there. Being present, I wondered if choices had anything to do with their plight or if chance had just played its hand differently for them and me.

I looked at these folk and wondered where our lives were different. If our lives are the sum total of our choices to any point in time then any chance, which in and of itself, is also a choice – to do nothing, to go with the flow, to follow wherever – got added in, how did we end up where we are? Was it good parentage, the silver spoon, discipline and education, a sense of higher purpose, the decision of a Higher Being, addiction to substances, debilitating poverty? What made the difference other than choice itself? How do two people live in the same township and one becomes a successful electrician and the other finds themself in a soup line? Surely, it is not a function of race or intellect or drive or luck. Surely the primary life skill was simply to be able to identify the forks in the road and take the majority of right directions? If you think about it, how do you travel from Joburg to Durban other than by not going the wrong way and choosing the right way? Simple, you say, just choose right and wrong never enters the equation; after 40 years the proof of the pudding is in the eating.

True, but here are some closing thoughts for your consideration:

– You may have made the right decisions nine times out of ten, but be grateful that you did. There are many times if we’re honest with ourselves, that the possibility for incorrectness was just as real as the right choice. Be humble and spare a thought for those who made a mistake.

– Mistakes are only failure if you allow them to be. Mistakes are learning and knowing what not to do is often as rich as having known what to do. Life is often complex and not binary – If, Maybe, Perhaps etc are also part of decisioning. The margin for error in some decisions are so small that a slightly different direction could cause a huge mess of the end goal.

– The two bedfellows of wrong choices are guilt and regret. We all have some and we all need to deal it. Sweeping the feelings under the carpet may feel safe but sooner or later, we need to face the issue. Our weakness, our self-limiting beliefs, our arrogance or our subservience may all be reasons for failures and mistakes but learning from them is powerful.

– In the circumstances, I describe above I am always struck by the fact that one is not better than the other. As humans we spend a huge amount of time comparing – I mean let’s face it, in the morning you look in the mirror, compare yourself to the image you have of yourself and bang! it hits you :-). Perhaps, the issue is not “better” but simply, “different”. You see, if you boil it down, that man in the queue standing for his daily bread is only 24 hours removed from where I am. In a day, if I don’t lose all my money in a bad business deal or sign a surety that sours, I could develop an attitude of supremacy and privilege because I am above him. And as I do so, I become impoverished of spirit and soul, haughty and disdainful, bereft of any humanity and emotions. Sick and tired of being sick and tired.

So, the challenge goes out without further philosophical intent. Are you making choices that are enriching and true, full of integrity and a love for others? Are you getting rich in character and not just money? Is your effort worth the reward and has the reward enough depth to weather a life storm? Are you building emotional reserves in your relationships from which you can draw when you screw up and hurt another? Are you a tree providing shade and sustenance or the root that sucks everything from the ground around you?

Pretty serious stuff but worth a thought. Choice or chance – which is you and is there any need for change?

We have come through trying times of late as we have evidence of our beautiful country having been raped by greed. HLJ continues to thrive and, I would hesitate to say, because of people who demonstrate the power of good choice without the arrogance of knowing it. For the issue of continual performance in the face of economic adversity, they have a plan and a desire to be better and, if not, only to fail trying and never by giving up.

Yours in Property

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Jack Trevena

With over 30 years of experience in the banking and home loan industry, my hope it is share what I have learnt over the years with my blogging community, inspire conversation around the subject and in the process discover unique insights into this ever changing environment.

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