0:00:00 - 0:00:28 I wanted to make a video about a concept that for now I'm calling offset consequences. When a system gets more and more complex, one of the properties that becomes more apparent is this idea of offset consequences? So, what's an offset consequence? Well, that's when something changes in terms of the 0:00:28 - 0:01:00 relationships of cause and effect, but the effects aren't obvious for some time. So what, why is this a, a property of complexity? Well, uh a simple system is an obvious system and complexity and obviousness or predictability. They, um antonyms, they're opposites. And so uh our system, our modern world 0:00:59 - 0:01:22 , it's very complex and um there are reasons for that, but we'll, we'll try to stay on point here. So, uh I wanted to go through a list of these that you may or may not have noticed. So we'll play this game and see how many of these things you've noticed. And we'll also ask the question, how extreme 0:01:21 - 0:01:52 do you think these changes are? And uh just to reveal my answer upfront, I believe all of these things are, are extreme. And so one of one of the, um, one of the qualities of um these sorts of situations is that when you react to them properly, you will seem like an extremist. So you will seem like you're 0:01:52 - 0:02:11 overreacting to these things. But in reality, I'm trying to choose my rock here that I'm going to sit on. This one looks good. Very interesting looking rock. In reality, you're not overreacting. You're actually the one who's being appropriate in how you're reacting because you see the consequences that 0:02:11 - 0:02:40 other people don't or more accurately than other people do. So here are some examples of these things. So one how much has your home's insurance premium gone up this year? Um A lot of people are seeing enormous increases, 50% 100%. And that's because the cost to rebuild has gone up by a lot. But that's 0:02:40 - 0:03:02 not at all. And see this is another property of complexity. It's that the cause and effect. It's not 1 to 1. It's this network of situations with uh different weights of effect. So with the uh mortgage costs, you have to unders I'm sorry, insurance costs, you have to understand or no, I guess that insurance 0:03:01 - 0:03:21 companies a lot of the money they make is not on the premiums. It's the fact that they don't need the premiums until there are payouts and in the meantime, they can invest that money and that's called a float. So insurance companies, most of them make most of their money on float. So what happens when 0:03:21 - 0:03:42 the stock market gets highly volatile or when for other reasons, it becomes very difficult to get a stable return of investment. Um Anyone who has any experience with investing knows that um it's important to make a gain, but it's really important to not experience a loss because if you, if you experience 0:03:42 - 0:04:07 50% loss, you're in big trouble, right, more than that obviously, but, but it wipes out many years of good gains because a good gain is like 7% in a year. So anyway, um so, um insurance companies aren't making money uh uh compared to historic levels. And so they have to increase their premiums and that's 0:04:07 - 0:04:26 cost to rebuild. That's all of these costs uh are connected to labor costs and all of them are connected to inflation as well. That's the pattern you're gonna see through these things. So most people don't see this because most people are renters, they're not homeowners, they're renters, ok? And then 0:04:26 - 0:04:44 , so they just see it as an increase in their rent, but rent can be limited by law in dumb places that you shouldn't live and also just by market forces. Um So there's a certain amount of rent that people just can't afford to pay and they'll actually collapse their households and have multifamily households 0:04:43 - 0:05:03 rather than pay the rent. So, um and then the homeowners themselves, well, you have to actually pay attention to your escrow and I'm not sure how many people do. Right. So another theme of this in complexity, you have to have way more things in your mind. You have to upload tons more data and be looking 0:05:03 - 0:05:19 at a much bigger picture. So if you're the kind of person that can't process that or like most people, you just kind of run away from information because you're already feeling overwhelmed. You're not gonna notice these things until you have to, until you get the notice that your, your monthly mortgage 0:05:19 - 0:05:36 payment just went up by $500 and you don't have the money and you say, well, I didn't see it coming. It happened all of a sudden. No, it didn't, it didn't. That's another thing I wanted to talk about in this video. So it turns out now I'm gonna have to try to remember the numbers here. These are all 0:05:36 - 0:05:59 recollections of things that I've been writing about uh, of late. Just a tiny smidgen of a ton of stuff. Um, so if you've heard this example before, um, if you're in a stadium and you're in the nosebleeds and, uh, it, it some, some conniving wizard came and dropped a droplet of water in the middle of 0:05:59 - 0:06:21 the, the, whatever it is, if it's a football field, soccer stadium, whatever, put it on the field and, um, pronounced a spell where that droplet is going to double once per minute. The question is, how many minutes do you have until the stadium is full? Now, obviously, uh, it depends on the height of 0:06:21 - 0:06:40 the stadium but just dealing in generalities here, you've probably got about 49 minutes. So this, this is, uh, if you're sitting there, it'd be an amazing thing to see because unless someone told you, you wouldn't even notice that there was water in the stadium for a long time. I'm trying to remember 0:06:40 - 0:07:06 how many minutes it takes for the water to get to the first level of seats. And I think it's something like 42. Um But whatever the case, it's most of the time. OK. Then after that, the, the number of doublings before it's at your level, it's about three more ish. OK. So plus or minus, it gives you an 0:07:06 - 0:07:25 idea of what you're dealing with. And this is the thing about geometric growth. So you've probably heard the phrase exponential growth and that's one of these abuses in terms because exponential is a specific function. Um geometric functions. It's a family that includes exponential. So anyway, the more 0:07:25 - 0:07:44 correct term usually is geometric because um unless it's exactly exponential but whatever. So geometric growth is something humans are really, really terrible at wrapping their heads around. OK. And the reason is there's this inverse relationship between how easy it is to perceive versus the cons the 0:07:44 - 0:08:07 , the magnitude of the consequences, they're inversely proportional, which means that when it's really hard to detect early on it's imperceptible unless you're a super weirdo, that's when it's gonna make the biggest difference to notice the further along you get, it gets way easier to notice, but also 0:08:06 - 0:08:29 the consequences of noticing the benefit of noticing it, it just doesn't matter as much. So it drops off very quickly. So they're inversely proportional, the graphs are flipped. Um So, so why does this matter? Well, if you don't notice things until late in the game, all of a sudden, it seems like all 0:08:28 - 0:08:49 of a sudden this thing came out of nowhere and ate your lunch turns out it's been going for a very long time. It's just been going in a way that was imperceptible except to the wisest people. And that is a phrase that is gonna rub a lot of people the wrong way. But, oh, well, that is, that is the definition 0:08:49 - 0:09:12 of wisdom really, to be wise is to see things that are correct and to value them accurately when no one else does. Right? So that's, that's what that means. Ok, so, so going back here to, uh, car insurance and, well, I didn't mention that one. That's where we're going. Homeowners insurance. What about 0:09:12 - 0:09:31 your mortgage rate? Well, that's gone up too. I don't mean just your payment because if you're in a normal situation, you're, you're, uh, you, you have a mortgage and it's wrapped into your mortgage payment. Um, but, but this is a good place to talk about. Maybe, um, another property of all this, this 0:09:31 - 0:09:50 situation is that. Well, there, there are a couple of properties here. Uh, one is that these are snares, they're traps. So the way a snare works, you've probably heard this phrase before if you've read the Scriptures. But, um, if you're hunting the way a snare works, it's like a band. It's, it's, it's 0:09:49 - 0:10:10 usually a metal band so you don't want it to break, but it's a band and you design a situation where you funnel the animal into this band and then once they get hooked it en en encircled by this thing, they'll struggle and the more they struggle, the tighter it gets. So a snare is a situation where the 0:10:10 - 0:10:30 more you push into it, the more terrible it is and the harder it is to get out. In other words, it's geometric. Do you understand? It gets, it gets worse as you go faster than you'd expect. So, um, for example, doing drugs is a snare because the first time you do it, maybe you'll think like, oh, well 0:10:30 - 0:10:44 , this is nice, but I don't have to keep doing this, but I'll just do it because I feel like it, whatever you do it two times, you do it every time you do it, you get more hooked. It's harder to get out of whatever. Right. So there's tons of snares though. Uh, a bad girlfriend or boyfriend is a snare 0:10:44 - 0:11:01 because the longer you're in that relationship, the harder it's gonna be to get out of it. Um, even though it was real obvious at the beginning you didn't seem trapped. So you said, well, whatever, I'll just, I'll just go with this because it's convenient or whatever. So, um, how is it, how is a house 0:11:00 - 0:11:17 payment? A snare nowadays? Well, I just, we started talking about your homeowners insurance. No one's, no one thinks about increasing homeowners insurance when they ask whether they can afford to buy a house. So here's the thing, if you have a mortgage, you don't have the option, you have to have homeowners 0:11:16 - 0:11:38 insurance. So, um, remember I said in complex systems, these, these effects can come from a, a multitude of causes. Well, one of them can be that your homeowners in, uh, company suddenly decides to stop covering people in your area. This just happened in California allegedly because of the fires. But 0:11:38 - 0:11:53 , um, the cost of insuring these houses is too hard to be profitable for these companies. So several of them just closed and they said, well, we're just, we're dropping you and we're not doing this anymore. So if you're in that situation, guess what? You have to get homeowners insurance from another 0:11:53 - 0:12:11 company, even if their rates are ridiculous compared to what you're used to paying. And if you don't, the mortgage company will repo your house. So that's kind of crazy. Right. All right. What are some other snares with homeowners insurance? What about property tax? I mentioned this on another video 0:12:10 - 0:12:35 . So property taxes, again, multitude of causes, one is inflation. Um uh uh the other is build cost, which I think we'll talk about in a second here. Um If I don't forget, um another is that the actual percent that they're charging keeps going up. So as an example, so there isn't a state in the United 0:12:35 - 0:12:54 States that doesn't have property tax, which I think is one of the strongest arguments that we are not a free country. But, um, so you can't actually own the place you live in. And so if that's, if that's free, I'm not sure what free is. But anyway, Alabama has the lowest property tax as a percentage 0:12:53 - 0:13:18 . However, that percentage went up, I wanna say by 35% or something. Um, in, in relative terms, uh, in the last year or something. So, so it's the lowest compared to all other states, but it's going up super fast. So, um, there's really nothing you can do about that, right? You're just subject to whatever 0:13:18 - 0:00:00 Yahoos are in office and they tend to be yahoos because good people don't really run for office. I know some exceptions, but they don't get elected, that's for sure. Ok. So, um, that's a shout out to Paul. How's it going if you see this? Um, so, um, property tax is another snare, right? Um And then, 0:00:00 - 0:14:06 uh, so, so how has that changed? Let's, let's back up to these, um, offset, that's what I was calling them offset effects. Well, um, let's say you, you, you are looking for a house now. Tough luck. Right. It's probably too expensive. If you don't already own a home, it's gonna be really hard to get into 0:14:06 - 0:14:28 one. A lot harder than it was three years ago, that's for sure. And, uh, historically, when there are periods of high property value, we should say inflated property value and just call it for what it is there, that would be followed by bust cycles where the prices drop precipitously. So why is that 0:14:28 - 0:14:50 less likely to happen? Now, I'm not saying it's not going to happen, but why is it less likely that there will be a nationwide decrease in property values? Well, again, a multitude of hidden effects or causes, I guess causes. So did you know that there was a, a change to the law not too long ago that 0:14:49 - 0:15:15 made it easier for huge companies to buy up real estate? Did you know that there have also been changes that made it a lot easier for, um uh for tax breaks to happen with, with that? Sorry, it flies, eating me with. So companies, um, entities, I should say that own uh property, they can translate that 0:15:14 - 0:15:36 to other property without paying capital gains tax on it. That's that one's been around for a long time. Um There have also been changes where uh banks traditionally, they were required to do something called Mark to market, which means that if they had a house in foreclosure, they'd have to sell it 0:15:36 - 0:15:58 um and take the loss. But banks can hold that without, without, um I'm not explaining this. Well, uh banks make their money by lending money and, and making investments, but mostly by lending money because they're allowed to lend out more money than they have. And that's how they make money in the briefest 0:15:58 - 0:16:22 terms. So, um there were rules before until recently where uh if a bank knew that the market value of something was a lot less than what they paid for it, they would have to take the loss on their books and therefore lend out less money. That rule was modified. And so now if a bank owns a house and the 0:16:22 - 0:16:41 person in it isn't making payments, they have every reason in the world not to go into foreclosure and sell the house at a, at a vastly reduced rate because let's say that it's a $500,000 house, they get $500,000 in credit that they can lend against. And it's a multi, it's a multiplier on that. I think 0:16:41 - 0:17:02 it's 9 to 1, which is insane. But, um, don't quote me on that. But with these, with, uh, if the house was in foreclosure and they had to sell it for 200,000, they'd have to take $300,000 loss. Now they just hold it and they say it's worth 500,000. It could be gutted, it could be a meth house. It could 0:17:02 - 0:17:20 be, uh, burned to the ground. Who knows? And they can still say it's worth $500,000. There's a, uh, an example of this, I know about local to me and, uh, the bank will not sell the house because it's worth a heck of a lot less than, than is owed on it. And they don't want to take the loss. And so it's 0:17:20 - 0:17:40 literally just sitting there. And so you mix that in with all these problems with squatters and you really have a powder keg. But um the point is that there are all these forces that are making it way less likely that the prices come down anytime soon or if they do that, it will be anything general to 0:17:39 - 0:18:04 , to large regions. Um We could talk about public schools. I saw a report the other day that, that said something like 38% of kids in public schools. Um I'm just gonna say identify as abnormal. I think that's the nicest way I can say it. I refuse to use the buzzwords that people push to try to co opt 0:18:04 - 0:18:26 language. I will not consent with definitions of words that are ridiculous. Um I encourage you to do the same anyway, 38%. Now, why aren't parents pulling out their kids pulling out their kids from public schools in, in record numbers? Uh Actually they are. Houston just had to fire, who knows how many 0:18:25 - 0:18:48 uh public school employees because their enrollment dropped by something like 25%. Meanwhile, Houston is growing at many, many times the normal rate right now because people are flooding into there from other states. Um But anyway, so, um for the most part though, parents are, they have their heads in 0:18:48 - 0:19:09 the sand and they're not noticing. So, what's the offset effect here? Well, you have residual confidence that having your kids go through the same experience as you did is gonna produce the same results, but times have changed, it's not gonna happen. Being normal is not good enough anymore. And so normal 0:19:09 - 0:19:26 kids are gonna end up really messed up and you don't have to look far to see this. But normal parents spend so little time with their kids anyway that they probably need a total stranger to tell them that their kids all jacked up right already. But they're probably not gonna notice until their kids become 0:19:26 - 0:19:50 adults and absolutely fail at life. So the writings on the wall, but they'll be oblivious and, or, um willfully so and so they're not gonna notice for a while, right? But then by then it's too late. It's offset. You see, and, and it's a cal influence of factors, right? Uh You could, you could tear apart 0:19:49 - 0:20:12 public schools with this analysis. Um But I think you get the point. What about car insurance? Same story. Did you know that when a Tesla gets into an accident, odds are it will be totaled no matter how minor the accident is, why electric cars in general, they have this enormous array of batteries and 0:20:12 - 0:20:29 it's one of the most expensive parts on the car and you pretty much have to take the whole car apart to get to it. So, uh, that's a problem. The other problem is that, uh Teslas in particular, one of the ways that they're able to crank those things out so fast is this genius idea. And I'm not being sarcastic 0:20:29 - 0:20:50 . I think it's an amazing marvel of technology, but they have this Giga Press where they can um press out the body of the car basically as one piece um in way less time and work than it takes to make the components separately, machine them to the precision they need to be and have some human slash combination 0:20:50 - 0:21:11 of robots put it together. The problem with that is if you hit the thing and it busts, you have to replace the whole car. So it's total. Well, uh guess who's paying for the insurance on electric cars? Everybody, because the companies that insure these vehicles, their premiums, their profits, they come 0:21:10 - 0:21:30 , it's, it's an aggregate and one thing, insurance companies are really terrible at, they used to be better. A lot of laws were passed to make this harder to do, but they used to subs uh subsegment their clients into risk categories and you still do that. So males pay more for car insurance than females 0:21:29 - 0:21:50 . Females tend to get in more accidents, but male accidents tend to be more lethal. Um, and then, uh, and then there are, of course the age bands that they do. But if you live in an area where you have a certain demographic that drinks way more than the general population and that demographic happens 0:21:49 - 0:22:14 to be classified by something like race. You can't charge those people more. Everyone has to pay more, you get it. So anyways, car insurance is going up by a lot and it's not just because of inflation, there are all these different factors going on there. Um There's more that could be said about that 0:22:14 - 0:22:37 . But anyway, um, let me, let me pivot now to one of the uh qualities of this property. And that is uh the answer to the question. When do people notice this? Well, um the problem is it's staggered, it's, it's uneven. I mentioned if you want to buy a house today, you're really aware of the fact that 0:22:37 - 0:22:57 houses cost a fortune, right? But what if you're already in a house? Well, if you're already in a house, odds are your interest rate is around something like 3%. So you probably only notice these, some of these things if you decide you want to move and you quickly realize that you can't remember snare 0:22:56 - 0:23:18 you're trapped because if you move, you'll lose that sweet 3% mortgage and you'll have to pick up a 7% mortgage and um blurring the details of the math. Your your monthly payments can about double for the same house, same value house, I should say same price house. And who wants to do that? Pay the same 0:23:18 - 0:23:36 ? I'm sorry, pay double the amount for for the same quality of house. No one wants to do that. So then what happens when something happens and you have to move like you lose your job for example and, and your unemployment runs out or whatever. I don't know. Somebody dies, something happens in your life 0:23:36 - 0:23:54 and now you have to move or you change jobs, people can't change jobs right now. Um Not, not moving across the country. Uh Regional is a different story because they can't afford to buy a house in the new place. So that's an issue that's gonna have a significant effect. But you're only gonna notice if 0:23:54 - 0:24:15 you start looking for a job or if you mouth off to your boss and get fired, right? Or if you get fired for nefarious reasons, which happens. Trust me. So um so that's when people notice, but it's not the general population noticing all at once. It's like uh you know, when you get these notices in the 0:24:15 - 0:24:32 mail that, that they're going to raise property tax or they ask for a vote and all these idiots say yes because they look at the paper and they say, well, this isn't gonna affect me or the benefits better than the cost to me. And uh they don't look long term, they don't look at second order, third order 0:24:32 - 0:24:57 consequences and the more complex the system, the less, the less optimized a normal person will be in it. So, um all right. So what's the point of all of this? Just more doom and gloom? No, there's a phrase in the scriptures where the Lord says, seek me early. What does early mean? Well, this is what 0:24:56 - 0:25:19 I would call faith. Uh This is what I wrote abo about in my book through faith. Um Their faith in a nutshell. One way of defining it is being willing to take sufficient actions, justified actions when you have sufficient reason. It's not, it's not like most people think faith is doing more than you have 0:25:19 - 0:25:40 a good reason to do because of belief in God or whatever. No, it's exactly what you have good reason to do, which almost everyone does far less than that and far different than that. So, um that if you had to characterize the difference between a faithful person and a not faithful person, it's on a scale 0:25:39 - 0:26:04 of how physical their reasons have to be before they make the decision. What do I mean by that? Well, if it's a mental, I don't mean emotional, but if it's a thought based decision, if it's a rational decision. That's faith because you, here's another scriptural phrase. You see afar off, you're looking 0:26:03 - 0:26:22 down the chain of consequences using the brain that God gave you and uh the spice of his inspiration in quickening that brain. And you're thinking, OK, I know how this looks right now. How's it gonna look in a year? How's it gonna look in 10 years? How's it gonna look in 20 years? How's it gonna look 0:26:22 - 0:26:41 in three generations? Right? And then you decide to plant some nut trees because that's something that, that only crazy people or faithful people do because most people aren't going to wait for seven years to test whether an idea was good or not, right? So what happens is as you start to figure out that 0:26:41 - 0:27:07 so much in our modern world and this is getting worse, is complex. You're going to start making decisions, looking for and acting on these long term consequences and you're gonna, you're gonna vote no, when they ask whether they can increase your property tax by a dollar for some, you know, for the kids 0:27:07 - 0:27:23 or for some old lady or for some one legged amputee or something, some sob story, you're gonna say no, absolutely not because I know you're telling me it's only gonna cost me a dollar, but it's not gonna only cost me a dollar. This is gonna make a tremendous difference and everybody's paying it and it's 0:27:23 - 0:27:47 not worth it. Um, what else? Well, uh uh, let's just leave it to general things because we could go at this all day. But it, the point is it's gonna re, it's gonna shuffle your valuation of things and people, and you're going to all of a sudden be looking for the consequences that normal people don't 0:27:47 - 0:28:10 think about. Or see, and you're going to make decisions that, that bring those things into account. So, um, more than anything you'll be willing to do a lot more to get the same sorts of things you're used to. This is a really, really, really, really important point. A lot of people think that the march 0:28:09 - 0:28:32 to whatever comes after the modern world is just a monotonically increasing thing. It's just gonna get better. Tomorrow is just like today. Only better. What they don't realize is however true that might be eventually guaranteed before that happens, it's gonna be a trudge through hell through hell. Everything 0:28:31 - 0:28:54 will get worse. Everything will cost more. And I'm not just talking about money wise, but it's absolutely true in that sense, look around and it will get a lot worse. So if whatever you think is good, that's a separate discussion, right? Whatever you think is good family, maybe you like your job, maybe 0:28:53 - 0:29:14 you like the idea of having kids and grandkids or whatever, it's going to cost you way more than it does. And possibly more importantly, it's going to cost your kids and grandkids way more than it did. You. And so we have to get attuned to this and start getting ready to pay weight, got bit by a horse 0:29:14 - 0:29:38 fly. Pay way more than we're paying right now to get the same good things we're used to because remember the drops in the stadium, the people who see the drop in the beginning are the ones who are way better off than everyone else. And it's not about being better off than everyone else. It's about uh 0:29:38 - 0:29:59 helping everyone else, which you can only do if you're way better off than everyone else. So, uh of course, you wanna help your loved ones. Uh I, I don't think I need to make an argument for that anyway. You need to start thinking about those things pronto because the clock's ticking and these things 0:29:58 - 0:30:22 , it's like a stone rolling down a mountain and nothing we do is gonna stop it. The question is just how are you going to respond to the facts and change your life accordingly or not? So, that's the choice. Um At least a few times in the scriptures, you have a situation where someone like Moses stands 0:30:22 - 0:30:41 up and says, I've told you the way things are, I've put a curse and a blessing before you. Now the fork in the road is before you and you get to choose those sorts of things. Um Those sorts of things are, are going to happen more frequently. Um That's kind of a weird thing. To say because I, I'm not 0:30:41 - 0:30:59 sure anyone yet feels like that sort of thing has happened in their lives and they read about it, read about it in the scriptures and they think, oh, that's just the thing from the past. It's one of those weird old Testament things. Nope, it's a function of the gospel and anytime you have any person 0:30:58 - 0:31:22 who has any clue of what they're actually talking about, you're gonna have stuff like that. So, the absence of that and many other things, uh, that fork in the road situation, the absence of that and things like it, it's not a sign that God has changed. It's just a function of the fact that, uh, people 0:31:22 - 0:31:45 who claim to be his people are so lame in their, uh, their choices of following him. So as soon as people come along who actually do what they say, they believe those things come back too anyway, I've said my piece, um, this will be written about hopefully a lot clearer. Um, but that's gonna take some 0:00:00 - 0:00:28 I wanted to make a video about a concept that for now I'm calling offset consequences. When a system gets more and more complex, one of the properties that becomes more apparent is this idea of offset consequences? So, what's an offset consequence? Well, that's when something changes in terms of the 0:00:28 - 0:01:00 relationships of cause and effect, but the effects aren't obvious for some time. So what, why is this a, a property of complexity? Well, uh a simple system is an obvious system and complexity and obviousness or predictability. They, um antonyms, they're opposites. And so uh our system, our modern world 0:00:59 - 0:01:22 , it's very complex and um there are reasons for that, but we'll, we'll try to stay on point here. So, uh I wanted to go through a list of these that you may or may not have noticed. So we'll play this game and see how many of these things you've noticed. And we'll also ask the question, how extreme 0:01:21 - 0:01:52 do you think these changes are? And uh just to reveal my answer upfront, I believe all of these things are, are extreme. And so one of one of the, um, one of the qualities of um these sorts of situations is that when you react to them properly, you will seem like an extremist. So you will seem like you're 0:01:52 - 0:02:11 overreacting to these things. But in reality, I'm trying to choose my rock here that I'm going to sit on. This one looks good. Very interesting looking rock. In reality, you're not overreacting. You're actually the one who's being appropriate in how you're reacting because you see the consequences that 0:02:11 - 0:02:40 other people don't or more accurately than other people do. So here are some examples of these things. So one how much has your home's insurance premium gone up this year? Um A lot of people are seeing enormous increases, 50% 100%. And that's because the cost to rebuild has gone up by a lot. But that's 0:02:40 - 0:03:02 not at all. And see this is another property of complexity. It's that the cause and effect. It's not 1 to 1. It's this network of situations with uh different weights of effect. So with the uh mortgage costs, you have to unders I'm sorry, insurance costs, you have to understand or no, I guess that insurance 0:03:01 - 0:03:21 companies a lot of the money they make is not on the premiums. It's the fact that they don't need the premiums until there are payouts and in the meantime, they can invest that money and that's called a float. So insurance companies, most of them make most of their money on float. So what happens when 0:03:21 - 0:03:42 the stock market gets highly volatile or when for other reasons, it becomes very difficult to get a stable return of investment. Um Anyone who has any experience with investing knows that um it's important to make a gain, but it's really important to not experience a loss because if you, if you experience 0:03:42 - 0:04:07 50% loss, you're in big trouble, right, more than that obviously, but, but it wipes out many years of good gains because a good gain is like 7% in a year. So anyway, um so, um insurance companies aren't making money uh uh compared to historic levels. And so they have to increase their premiums and that's 0:04:07 - 0:04:26 cost to rebuild. That's all of these costs uh are connected to labor costs and all of them are connected to inflation as well. That's the pattern you're gonna see through these things. So most people don't see this because most people are renters, they're not homeowners, they're renters, ok? And then 0:04:26 - 0:04:44 , so they just see it as an increase in their rent, but rent can be limited by law in dumb places that you shouldn't live and also just by market forces. Um So there's a certain amount of rent that people just can't afford to pay and they'll actually collapse their households and have multifamily households 0:04:43 - 0:05:03 rather than pay the rent. So, um and then the homeowners themselves, well, you have to actually pay attention to your escrow and I'm not sure how many people do. Right. So another theme of this in complexity, you have to have way more things in your mind. You have to upload tons more data and be looking 0:05:03 - 0:05:19 at a much bigger picture. So if you're the kind of person that can't process that or like most people, you just kind of run away from information because you're already feeling overwhelmed. You're not gonna notice these things until you have to, until you get the notice that your, your monthly mortgage 0:05:19 - 0:05:36 payment just went up by $500 and you don't have the money and you say, well, I didn't see it coming. It happened all of a sudden. No, it didn't, it didn't. That's another thing I wanted to talk about in this video. So it turns out now I'm gonna have to try to remember the numbers here. These are all 0:05:36 - 0:05:59 recollections of things that I've been writing about uh, of late. Just a tiny smidgen of a ton of stuff. Um, so if you've heard this example before, um, if you're in a stadium and you're in the nosebleeds and, uh, it, it some, some conniving wizard came and dropped a droplet of water in the middle of 0:05:59 - 0:06:21 the, the, whatever it is, if it's a football field, soccer stadium, whatever, put it on the field and, um, pronounced a spell where that droplet is going to double once per minute. The question is, how many minutes do you have until the stadium is full? Now, obviously, uh, it depends on the height of 0:06:21 - 0:06:40 the stadium but just dealing in generalities here, you've probably got about 49 minutes. So this, this is, uh, if you're sitting there, it'd be an amazing thing to see because unless someone told you, you wouldn't even notice that there was water in the stadium for a long time. I'm trying to remember 0:06:40 - 0:07:06 how many minutes it takes for the water to get to the first level of seats. And I think it's something like 42. Um But whatever the case, it's most of the time. OK. Then after that, the, the number of doublings before it's at your level, it's about three more ish. OK. So plus or minus, it gives you an 0:07:06 - 0:07:25 idea of what you're dealing with. And this is the thing about geometric growth. So you've probably heard the phrase exponential growth and that's one of these abuses in terms because exponential is a specific function. Um geometric functions. It's a family that includes exponential. So anyway, the more 0:07:25 - 0:07:44 correct term usually is geometric because um unless it's exactly exponential but whatever. So geometric growth is something humans are really, really terrible at wrapping their heads around. OK. And the reason is there's this inverse relationship between how easy it is to perceive versus the cons the 0:07:44 - 0:08:07 , the magnitude of the consequences, they're inversely proportional, which means that when it's really hard to detect early on it's imperceptible unless you're a super weirdo, that's when it's gonna make the biggest difference to notice the further along you get, it gets way easier to notice, but also 0:08:06 - 0:08:29 the consequences of noticing the benefit of noticing it, it just doesn't matter as much. So it drops off very quickly. So they're inversely proportional, the graphs are flipped. Um So, so why does this matter? Well, if you don't notice things until late in the game, all of a sudden, it seems like all 0:08:28 - 0:08:49 of a sudden this thing came out of nowhere and ate your lunch turns out it's been going for a very long time. It's just been going in a way that was imperceptible except to the wisest people. And that is a phrase that is gonna rub a lot of people the wrong way. But, oh, well, that is, that is the definition 0:08:49 - 0:09:12 of wisdom really, to be wise is to see things that are correct and to value them accurately when no one else does. Right? So that's, that's what that means. Ok, so, so going back here to, uh, car insurance and, well, I didn't mention that one. That's where we're going. Homeowners insurance. What about 0:09:12 - 0:09:31 your mortgage rate? Well, that's gone up too. I don't mean just your payment because if you're in a normal situation, you're, you're, uh, you, you have a mortgage and it's wrapped into your mortgage payment. Um, but, but this is a good place to talk about. Maybe, um, another property of all this, this 0:09:31 - 0:09:50 situation is that. Well, there, there are a couple of properties here. Uh, one is that these are snares, they're traps. So the way a snare works, you've probably heard this phrase before if you've read the Scriptures. But, um, if you're hunting the way a snare works, it's like a band. It's, it's, it's 0:09:49 - 0:10:10 usually a metal band so you don't want it to break, but it's a band and you design a situation where you funnel the animal into this band and then once they get hooked it en en encircled by this thing, they'll struggle and the more they struggle, the tighter it gets. So a snare is a situation where the 0:10:10 - 0:10:30 more you push into it, the more terrible it is and the harder it is to get out. In other words, it's geometric. Do you understand? It gets, it gets worse as you go faster than you'd expect. So, um, for example, doing drugs is a snare because the first time you do it, maybe you'll think like, oh, well 0:10:30 - 0:10:44 , this is nice, but I don't have to keep doing this, but I'll just do it because I feel like it, whatever you do it two times, you do it every time you do it, you get more hooked. It's harder to get out of whatever. Right. So there's tons of snares though. Uh, a bad girlfriend or boyfriend is a snare 0:10:44 - 0:11:01 because the longer you're in that relationship, the harder it's gonna be to get out of it. Um, even though it was real obvious at the beginning you didn't seem trapped. So you said, well, whatever, I'll just, I'll just go with this because it's convenient or whatever. So, um, how is it, how is a house 0:11:00 - 0:11:17 payment? A snare nowadays? Well, I just, we started talking about your homeowners insurance. No one's, no one thinks about increasing homeowners insurance when they ask whether they can afford to buy a house. So here's the thing, if you have a mortgage, you don't have the option, you have to have homeowners 0:11:16 - 0:11:38 insurance. So, um, remember I said in complex systems, these, these effects can come from a, a multitude of causes. Well, one of them can be that your homeowners in, uh, company suddenly decides to stop covering people in your area. This just happened in California allegedly because of the fires. But 0:11:38 - 0:11:53 , um, the cost of insuring these houses is too hard to be profitable for these companies. So several of them just closed and they said, well, we're just, we're dropping you and we're not doing this anymore. So if you're in that situation, guess what? You have to get homeowners insurance from another 0:11:53 - 0:12:11 company, even if their rates are ridiculous compared to what you're used to paying. And if you don't, the mortgage company will repo your house. So that's kind of crazy. Right. All right. What are some other snares with homeowners insurance? What about property tax? I mentioned this on another video 0:12:10 - 0:12:35 . So property taxes, again, multitude of causes, one is inflation. Um uh uh the other is build cost, which I think we'll talk about in a second here. Um If I don't forget, um another is that the actual percent that they're charging keeps going up. So as an example, so there isn't a state in the United 0:12:35 - 0:12:54 States that doesn't have property tax, which I think is one of the strongest arguments that we are not a free country. But, um, so you can't actually own the place you live in. And so if that's, if that's free, I'm not sure what free is. But anyway, Alabama has the lowest property tax as a percentage 0:12:53 - 0:13:18 . However, that percentage went up, I wanna say by 35% or something. Um, in, in relative terms, uh, in the last year or something. So, so it's the lowest compared to all other states, but it's going up super fast. So, um, there's really nothing you can do about that, right? You're just subject to whatever 0:13:18 - 0:00:00 Yahoos are in office and they tend to be yahoos because good people don't really run for office. I know some exceptions, but they don't get elected, that's for sure. Ok. So, um, that's a shout out to Paul. How's it going if you see this? Um, so, um, property tax is another snare, right? Um And then, 0:00:00 - 0:14:06 uh, so, so how has that changed? Let's, let's back up to these, um, offset, that's what I was calling them offset effects. Well, um, let's say you, you, you are looking for a house now. Tough luck. Right. It's probably too expensive. If you don't already own a home, it's gonna be really hard to get into 0:14:06 - 0:14:28 one. A lot harder than it was three years ago, that's for sure. And, uh, historically, when there are periods of high property value, we should say inflated property value and just call it for what it is there, that would be followed by bust cycles where the prices drop precipitously. So why is that 0:14:28 - 0:14:50 less likely to happen? Now, I'm not saying it's not going to happen, but why is it less likely that there will be a nationwide decrease in property values? Well, again, a multitude of hidden effects or causes, I guess causes. So did you know that there was a, a change to the law not too long ago that 0:14:49 - 0:15:15 made it easier for huge companies to buy up real estate? Did you know that there have also been changes that made it a lot easier for, um uh for tax breaks to happen with, with that? Sorry, it flies, eating me with. So companies, um, entities, I should say that own uh property, they can translate that 0:15:14 - 0:15:36 to other property without paying capital gains tax on it. That's that one's been around for a long time. Um There have also been changes where uh banks traditionally, they were required to do something called Mark to market, which means that if they had a house in foreclosure, they'd have to sell it 0:15:36 - 0:15:58 um and take the loss. But banks can hold that without, without, um I'm not explaining this. Well, uh banks make their money by lending money and, and making investments, but mostly by lending money because they're allowed to lend out more money than they have. And that's how they make money in the briefest 0:15:58 - 0:16:22 terms. So, um there were rules before until recently where uh if a bank knew that the market value of something was a lot less than what they paid for it, they would have to take the loss on their books and therefore lend out less money. That rule was modified. And so now if a bank owns a house and the 0:16:22 - 0:16:41 person in it isn't making payments, they have every reason in the world not to go into foreclosure and sell the house at a, at a vastly reduced rate because let's say that it's a $500,000 house, they get $500,000 in credit that they can lend against. And it's a multi, it's a multiplier on that. I think 0:16:41 - 0:17:02 it's 9 to 1, which is insane. But, um, don't quote me on that. But with these, with, uh, if the house was in foreclosure and they had to sell it for 200,000, they'd have to take $300,000 loss. Now they just hold it and they say it's worth 500,000. It could be gutted, it could be a meth house. It could 0:17:02 - 0:17:20 be, uh, burned to the ground. Who knows? And they can still say it's worth $500,000. There's a, uh, an example of this, I know about local to me and, uh, the bank will not sell the house because it's worth a heck of a lot less than, than is owed on it. And they don't want to take the loss. And so it's 0:17:20 - 0:17:40 literally just sitting there. And so you mix that in with all these problems with squatters and you really have a powder keg. But um the point is that there are all these forces that are making it way less likely that the prices come down anytime soon or if they do that, it will be anything general to 0:17:39 - 0:18:04 , to large regions. Um We could talk about public schools. I saw a report the other day that, that said something like 38% of kids in public schools. Um I'm just gonna say identify as abnormal. I think that's the nicest way I can say it. I refuse to use the buzzwords that people push to try to co opt 0:18:04 - 0:18:26 language. I will not consent with definitions of words that are ridiculous. Um I encourage you to do the same anyway, 38%. Now, why aren't parents pulling out their kids pulling out their kids from public schools in, in record numbers? Uh Actually they are. Houston just had to fire, who knows how many 0:18:25 - 0:18:48 uh public school employees because their enrollment dropped by something like 25%. Meanwhile, Houston is growing at many, many times the normal rate right now because people are flooding into there from other states. Um But anyway, so, um for the most part though, parents are, they have their heads in 0:18:48 - 0:19:09 the sand and they're not noticing. So, what's the offset effect here? Well, you have residual confidence that having your kids go through the same experience as you did is gonna produce the same results, but times have changed, it's not gonna happen. Being normal is not good enough anymore. And so normal 0:19:09 - 0:19:26 kids are gonna end up really messed up and you don't have to look far to see this. But normal parents spend so little time with their kids anyway that they probably need a total stranger to tell them that their kids all jacked up right already. But they're probably not gonna notice until their kids become 0:19:26 - 0:19:50 adults and absolutely fail at life. So the writings on the wall, but they'll be oblivious and, or, um willfully so and so they're not gonna notice for a while, right? But then by then it's too late. It's offset. You see, and, and it's a cal influence of factors, right? Uh You could, you could tear apart 0:19:49 - 0:20:12 public schools with this analysis. Um But I think you get the point. What about car insurance? Same story. Did you know that when a Tesla gets into an accident, odds are it will be totaled no matter how minor the accident is, why electric cars in general, they have this enormous array of batteries and 0:20:12 - 0:20:29 it's one of the most expensive parts on the car and you pretty much have to take the whole car apart to get to it. So, uh, that's a problem. The other problem is that, uh Teslas in particular, one of the ways that they're able to crank those things out so fast is this genius idea. And I'm not being sarcastic 0:20:29 - 0:20:50 . I think it's an amazing marvel of technology, but they have this Giga Press where they can um press out the body of the car basically as one piece um in way less time and work than it takes to make the components separately, machine them to the precision they need to be and have some human slash combination 0:20:50 - 0:21:11 of robots put it together. The problem with that is if you hit the thing and it busts, you have to replace the whole car. So it's total. Well, uh guess who's paying for the insurance on electric cars? Everybody, because the companies that insure these vehicles, their premiums, their profits, they come 0:21:10 - 0:21:30 , it's, it's an aggregate and one thing, insurance companies are really terrible at, they used to be better. A lot of laws were passed to make this harder to do, but they used to subs uh subsegment their clients into risk categories and you still do that. So males pay more for car insurance than females 0:21:29 - 0:21:50 . Females tend to get in more accidents, but male accidents tend to be more lethal. Um, and then, uh, and then there are, of course the age bands that they do. But if you live in an area where you have a certain demographic that drinks way more than the general population and that demographic happens 0:21:49 - 0:22:14 to be classified by something like race. You can't charge those people more. Everyone has to pay more, you get it. So anyways, car insurance is going up by a lot and it's not just because of inflation, there are all these different factors going on there. Um There's more that could be said about that 0:22:14 - 0:22:37 . But anyway, um, let me, let me pivot now to one of the uh qualities of this property. And that is uh the answer to the question. When do people notice this? Well, um the problem is it's staggered, it's, it's uneven. I mentioned if you want to buy a house today, you're really aware of the fact that 0:22:37 - 0:22:57 houses cost a fortune, right? But what if you're already in a house? Well, if you're already in a house, odds are your interest rate is around something like 3%. So you probably only notice these, some of these things if you decide you want to move and you quickly realize that you can't remember snare 0:22:56 - 0:23:18 you're trapped because if you move, you'll lose that sweet 3% mortgage and you'll have to pick up a 7% mortgage and um blurring the details of the math. Your your monthly payments can about double for the same house, same value house, I should say same price house. And who wants to do that? Pay the same 0:23:18 - 0:23:36 ? I'm sorry, pay double the amount for for the same quality of house. No one wants to do that. So then what happens when something happens and you have to move like you lose your job for example and, and your unemployment runs out or whatever. I don't know. Somebody dies, something happens in your life 0:23:36 - 0:23:54 and now you have to move or you change jobs, people can't change jobs right now. Um Not, not moving across the country. Uh Regional is a different story because they can't afford to buy a house in the new place. So that's an issue that's gonna have a significant effect. But you're only gonna notice if 0:23:54 - 0:24:15 you start looking for a job or if you mouth off to your boss and get fired, right? Or if you get fired for nefarious reasons, which happens. Trust me. So um so that's when people notice, but it's not the general population noticing all at once. It's like uh you know, when you get these notices in the 0:24:15 - 0:24:32 mail that, that they're going to raise property tax or they ask for a vote and all these idiots say yes because they look at the paper and they say, well, this isn't gonna affect me or the benefits better than the cost to me. And uh they don't look long term, they don't look at second order, third order 0:24:32 - 0:24:57 consequences and the more complex the system, the less, the less optimized a normal person will be in it. So, um all right. So what's the point of all of this? Just more doom and gloom? No, there's a phrase in the scriptures where the Lord says, seek me early. What does early mean? Well, this is what 0:24:56 - 0:25:19 I would call faith. Uh This is what I wrote abo about in my book through faith. Um Their faith in a nutshell. One way of defining it is being willing to take sufficient actions, justified actions when you have sufficient reason. It's not, it's not like most people think faith is doing more than you have 0:25:19 - 0:25:40 a good reason to do because of belief in God or whatever. No, it's exactly what you have good reason to do, which almost everyone does far less than that and far different than that. So, um that if you had to characterize the difference between a faithful person and a not faithful person, it's on a scale 0:25:39 - 0:26:04 of how physical their reasons have to be before they make the decision. What do I mean by that? Well, if it's a mental, I don't mean emotional, but if it's a thought based decision, if it's a rational decision. That's faith because you, here's another scriptural phrase. You see afar off, you're looking 0:26:03 - 0:26:22 down the chain of consequences using the brain that God gave you and uh the spice of his inspiration in quickening that brain. And you're thinking, OK, I know how this looks right now. How's it gonna look in a year? How's it gonna look in 10 years? How's it gonna look in 20 years? How's it gonna look 0:26:22 - 0:26:41 in three generations? Right? And then you decide to plant some nut trees because that's something that, that only crazy people or faithful people do because most people aren't going to wait for seven years to test whether an idea was good or not, right? So what happens is as you start to figure out that 0:26:41 - 0:27:07 so much in our modern world and this is getting worse, is complex. You're going to start making decisions, looking for and acting on these long term consequences and you're gonna, you're gonna vote no, when they ask whether they can increase your property tax by a dollar for some, you know, for the kids 0:27:07 - 0:27:23 or for some old lady or for some one legged amputee or something, some sob story, you're gonna say no, absolutely not because I know you're telling me it's only gonna cost me a dollar, but it's not gonna only cost me a dollar. This is gonna make a tremendous difference and everybody's paying it and it's 0:27:23 - 0:27:47 not worth it. Um, what else? Well, uh uh, let's just leave it to general things because we could go at this all day. But it, the point is it's gonna re, it's gonna shuffle your valuation of things and people, and you're going to all of a sudden be looking for the consequences that normal people don't 0:27:47 - 0:28:10 think about. Or see, and you're going to make decisions that, that bring those things into account. So, um, more than anything you'll be willing to do a lot more to get the same sorts of things you're used to. This is a really, really, really, really important point. A lot of people think that the march 0:28:09 - 0:28:32 to whatever comes after the modern world is just a monotonically increasing thing. It's just gonna get better. Tomorrow is just like today. Only better. What they don't realize is however true that might be eventually guaranteed before that happens, it's gonna be a trudge through hell through hell. Everything 0:28:31 - 0:28:54 will get worse. Everything will cost more. And I'm not just talking about money wise, but it's absolutely true in that sense, look around and it will get a lot worse. So if whatever you think is good, that's a separate discussion, right? Whatever you think is good family, maybe you like your job, maybe 0:28:53 - 0:29:14 you like the idea of having kids and grandkids or whatever, it's going to cost you way more than it does. And possibly more importantly, it's going to cost your kids and grandkids way more than it did. You. And so we have to get attuned to this and start getting ready to pay weight, got bit by a horse 0:29:14 - 0:29:38 fly. Pay way more than we're paying right now to get the same good things we're used to because remember the drops in the stadium, the people who see the drop in the beginning are the ones who are way better off than everyone else. And it's not about being better off than everyone else. It's about uh 0:29:38 - 0:29:59 helping everyone else, which you can only do if you're way better off than everyone else. So, uh of course, you wanna help your loved ones. Uh I, I don't think I need to make an argument for that anyway. You need to start thinking about those things pronto because the clock's ticking and these things 0:29:58 - 0:30:22 , it's like a stone rolling down a mountain and nothing we do is gonna stop it. The question is just how are you going to respond to the facts and change your life accordingly or not? So, that's the choice. Um At least a few times in the scriptures, you have a situation where someone like Moses stands 0:30:22 - 0:30:41 up and says, I've told you the way things are, I've put a curse and a blessing before you. Now the fork in the road is before you and you get to choose those sorts of things. Um Those sorts of things are, are going to happen more frequently. Um That's kind of a weird thing. To say because I, I'm not 0:30:41 - 0:30:59 sure anyone yet feels like that sort of thing has happened in their lives and they read about it, read about it in the scriptures and they think, oh, that's just the thing from the past. It's one of those weird old Testament things. Nope, it's a function of the gospel and anytime you have any person 0:30:58 - 0:31:22 who has any clue of what they're actually talking about, you're gonna have stuff like that. So, the absence of that and many other things, uh, that fork in the road situation, the absence of that and things like it, it's not a sign that God has changed. It's just a function of the fact that, uh, people 0:31:22 - 0:31:45 who claim to be his people are so lame in their, uh, their choices of following him. So as soon as people come along who actually do what they say, they believe those things come back too anyway, I've said my piece, um, this will be written about hopefully a lot clearer. Um, but that's gonna take some 0:31:45 - 0:31:50 time. So hopefully you seek him early and do something about it.