Henry Svec 0:00

COVID was a convenient excuse for everything. So I would be told certain materials weren't available in the province and I would call, we would call Home Depot or Costco so well maybe you need to right around the corner because Costco has got a bunch Your Home Depot has a bunch.

Ethan Waldman 0:14

Welcome to the Tiny House Lifestyle Podcast, the show where you learn how to plan, build and live the tiny lifestyle. I'm your host, Ethan Waldman, and this is episode 256 with Henry, or Hank, Svec. Hank and Mary spec are in the process of converting their 50 acre farm back to nature as a honeybee sanctuary and honey bees are Hank's lens for looking at the world of both investing and the world of housing. Hank is actually in the process of converting a 52 acre Oceanside property into one and a half acre lots for tiny homes. This is a broad ranging conversation where Hank will introduce us to the concept of value investing, talk about his business model for the tiny home development and talk about what honey bees can teach us about getting rich slowly about value investing. I think it's a really worthwhile conversation and I hope you'll stick around.

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Right, I am here with Hank Svec. In 2017. Hank and Mary Svec started converting their 50 acre farm back to nature as a honeybee sanctuary. Henry received his PhD from Michigan State University in 1988. For 30 years, he worked as a clinical psychologist in Ontario, Canada and for 40 years as a value investor in real estate bonds, stocks and early stage startups. And he does a podcast called Invest Like a Honeybee, which can be found on most podcast platforms. Two years ago, as part of their value investing, Henry and Mary purchased a 52 acre oceanside property that they are dividing into one and a half acre lots for tiny homes. Currently, they have two tiny homes on the development that will be up and running this spring. Hank, welcome to the show.

Henry Svec 3:53

Thanks for having me. It's great to be here.

Ethan Waldman 3:55

Yeah, likewise. So first, let's start out what is value investing? I feel like people might not have heard that that term.

Henry Svec 4:04

Well, it's kind of it's kind of basic, I'll keep things simple. So if something is being sold for $100, whether it's a pair of shoes or whatever, you have to have the ability to put a value what you think it's worth and as long as it's worth significantly below.

Ethan Waldman 4:21

Yeah.

Henry Svec 4:22

You know, what you think you pay what you think it's worth, not what the price is. So whether it's stocks, bonds, real estate, I'll give you an example. The land you're referring to is 52 acres, oceanfront, wasn't for sale. We were able to purchase it for $300,000 which I thought was incredible value as in my son, Joshua, who now owns that company, and we were able to divide it up into lots and each lot is worth $199,000.

Ethan Waldman 4:47

Wow.

Henry Svec 4:49

I mean, that would be a great value. That's an example of a great value investment.

Ethan Waldman 4:53

Okay, so you pay well, you hopefully are paying less than what it's what it's actually worth, or what the market would say it's worth it.

Henry Svec 5:00

Well, everyone has a different thing of value, right? So the person selling it has a number in their mind.

Ethan Waldman 5:06

Yeah.

Henry Svec 5:06

And then you as a buyer, and there's many ways to assess value. Like in the book, we talked about how do you know what a pair of boots are worth? Yeah, what's the true value of a pair of boots, and you go through some very basic exercises, and it's about being smart with your money and being able to relax. And I think that's a lot you know, about this tiny home sort of movement. And I see it, I see tiny homes actually as a value, way to live and legitimate assets. So that, you know, when I was your age, I'm 67. So when I was younger, you know, you'd start I talked about buying a duplex live in half rent, the other half. I think, one starter place for people who can't afford homes, because they're too expensive is a tiny home. And I think we're proud to be able to provide that option.

Ethan Waldman 5:51

Yeah, yeah. And it is, it is truly a great option and helps to build, you know, build wealth, have something that somebody can own rather than rent, and kind of start start off on the homeownership journey, for sure.

Henry Svec 6:05

And they're actually, you know, I have stayed in some, before we got into project, Mary, and I stayed in some Airbnbs, that were tiny homes. And, you know, we're kind of like, well, I feel guilty saying this, we live in kind of a big house, we had three boys. And so we live on a farm. So we have a typical, rather large farmhouse, yep. When you go live in a tiny home, even for four or five days, you realize very quickly, you don't need most of this stuff, right? You have in your house, especially like we have a rooftop balcony on these tiny homes. So you can go up, you know, you're looking out at the ocean. You know, it's kind of nice. So I think it's reconceptualizing. What all of us think is, is good housing, or adequate housing or housing, depending on where we are in life. And maybe it's a stage thing, or maybe it's a forever thing, it depends on the person, I think.

Ethan Waldman 6:51

Yeah, that's an interesting point, I think that it's always, it's a lot easier to go and stay in a tiny home, like on a trip or as like a destination, because you don't have all your stuff with you. And you and as you're right, you quickly realize, I don't know, I don't need much more space than this. It's really when it comes to all your stuff. It's like your big house is just a place for your stuff.

Henry Svec 7:13

What and you know, I got a little I had some interesting discussion, because in the book I talk about when you're in a expensive community, move. So people in Toronto in Canada complained that a house an average detached house now is I think, a million or $800,000.

Ethan Waldman 7:30

Yeah.

Henry Svec 7:30

And there are people who have houses valued at one and a half million they paid $100,000 for and they asked me well, what would you do? I said, Well, I would sell it. And I'd move to a different place where I could live for a lot less and live below my means. And which is how, you know, I think the tiny home without really saying it, I think the tiny home movement is about doing what we did when I was young, which was a simple term live beneath your, you know, when you have $100 coming in, don't spend $150.

Ethan Waldman 7:59

Right.

Henry Svec 8:00

Spend $75. And I think the tiny home movement is a huge part of that whole value, you mentioned idea of and the thing about money is when you don't stress about it when you don't have to think about it.

Ethan Waldman 8:11

Yeah.

Henry Svec 8:12

And I think the tiny home movement helps you do that by by living economically and all the advantages of being in that space, too.

Ethan Waldman 8:20

Yeah, hopefully, hopefully it does.

Henry Svec 8:24

There's an interesting movement in my age range, where people are now looking at tiny homes with the accessibility Yep. So that a person could actually in their 70s have a tiny home and say, a place like we have a Western Head, which is to two hours from International Airport. And you could live in a tiny home six months out of the year, and then live somewhere else.

Ethan Waldman 8:44

Yep.

Henry Svec 8:44

But it's now being seen more as a lifestyle option, which is kind of exciting. I'm pretty excited about it.

Ethan Waldman 8:49

Yeah, definitely. And that's, you know, that has surprised me, you know, I'm, I'm, I'll be 38 in a couple of weeks. But, you know, I built my tiny house 11 - 12 years ago in my 20s. And I expected that that would be the majority of other people building tiny houses would be younger people like me. And what I'm seeing now, since I've kind of had my hand in this in this world for a while now is that it's actually more people who are retiring into tiny homes, and those are the people that are staying in the homes, like people like me, you know, it's a starter home, maybe just for you or for you and one other person. And then as as a family grows, as you have more needs more space, you know, us young folks aren't staying in tiny homes forever. Whereas as people who are retiring tend to say, you know, this is the home that I'm gonna stay in until I you know, can't live on my own anymore.

Henry Svec 9:44

Yeah, and I think that's a great point. And the economics of it. I mean, we, we were selling ours for $129,000 for the home, and it's $500 a month or the, you know, the lat rental, which includes water and all that other stuff. And so we were developing these and what even offered financing. So we'll even let people like we have one sold and one's probably going to be so we'll actually help people buy them as a starter kind of thing. And I think I think we want to build a community. So the first thing you realize when you do the project like we did, we divided the lots into one and a half plus acre lot so that when you put a tiny home as we have on them, we have four tiny homes, on them. Two on ours and two on the Josh runs and Airbnb out of the because the surfing down there is amazing, believe it or not we surfing Canada, primarily really cold. So he runs his out when there's a surf swell Combi, it gives all the surfers in November, December going around in the water. But the point of all that is, you know, we, with COVID I thought the theme was space, you know you can have space. So on our one and a half acre lots, if you want to put in a garden, if you want to have chickens, if you want to do some solar, you do whatever you want, let us know ahead of time, but it's kind of like where you have that. And then when you're ready to move, you simply can move your house. So you buy another piece of property somewhere else, you can simply move your tiny home that you own somewhere else. But we think with the ocean, and you know ocean access, where you can just walk down and jump in the ocean to surf or whatever your thing may be. It's a kind of cool lifestyle. And if you take the money you would be spending on that Toronto house. Oh, by the way, we also have high speed internet there, which was one of the cool things we wanted to make sure even though we're in, you know, five or six minutes away from a town, which also has a hospital, which is exciting. Health Care's there, you can actually have high speed internet. So if you work from home, it's a great spot to do that.

Ethan Waldman 11:36

Nice. And so yeah, that's an interesting model. So you're you're selling the homes, but you're leasing the parking spot. And so somebody could buy the home, stay there for a year or two, and then you know, decide to relocate and bring them home with them.

Henry Svec 11:53

Right, we're very flexible. So we're starting to hear people say, Look, I have my own tiny house, or I want to build one can and we're starting to entertain that because as long as my biggest fear was, it wouldn't be aesthetically pleasing. Someone told us that were zoned for a trailer park, we could put it no disrespect, that's another option of housing, where you put them very close together. But that's not our concept. Our concept is different, you know, a community someday, and we're fine doing a couple lights like we have to develop the lots we put in incredible we have incredible water there. So every lot has their own deep well. Deep sewage system hooked up to power and internet. We haven't entertained the off the grid yet. But certainly with all our land, we could have off the grid properties too. But right now we're talking about properties that have the all the amenities that people can look into.

Ethan Waldman 12:43

Now when you when you looked at this property, did you look at it with an eye towards doing a tiny house development? Or did you kind of buy the property and then kind of come to tiny houses Oh, this would be a great spot to do tiny houses I

Henry Svec 12:58

had no idea. So will be quite up honest with you. We bought these properties. Because when Biden got elected, and our guy was talking about carbon offsets, I said to our team, and then Now Joshua owns that company. So let's go out and get as much land as we can. Close to ocean or on ocean, high speed internet paved roads that we can just land bank. Let's just keep it for the next year. Who cares? It'll be trees. It'll be it's good, good feeling. So Joshua son was a surfer went and looked at Western Head where we accumulated 150 some acres and said, Dad, this is a great place we should do X, Y and Z so I said let's do it. So we started with the tiny home and we're continually evolving he's at he's on Airbnb so people want to check it out. You can go to Ocean top tiny home surf Western head and check it out on on Airbnb but we married I have a piece of property that we're doing the the project but the project is flexible based on what people need as long as it's a legit tiny home you can build one you can bring one in will prepare the lot for you. We were only going to do a couple lots here. We're very slow. We want to see how it goes. Yeah, but it's a it's a very quiet cool place to be because you got the ocean, but 180 degree view the ocean and behind you have trees everywhere. So you're somewhat isolated, but it's seven or eight minutes from town so you have all the other amenities that you need. Yeah,

Ethan Waldman 14:21

it's the photos that you sent. You know, it looks like a beautiful setting and we'll post those up on the show notes page for for this episode. I'm curious to learn more about the the tiny houses that you're building. Are they are they all like a fixed design? Or are you kind of doing you know, each one at a time unique? How was that working?

Henry Svec 14:41

We did four of the same because we started with the builder who was building them and I wanted high ceilings. Yep, we have 11 foot ceilings and also wanted a first floor bedroom. Yep. And I had to have a bathroom. That was a real bathroom.

Ethan Waldman 14:56

Okay.

Henry Svec 14:57

I didn't want to have a shower where you're showering with the toilet, which I think is the concept, depending on the site, so we actually have a separate shower with a shower door, and a separate place and all of that kind of stuff. And so we want I wanted, those are my only two. So we put that into the design and the rooftop balcony because of the views and also a woodstove. So that we can have a tiny wood stove in there, because we have wood everywhere as a backup. We were entertaining solar, we have solar on many of our properties. But we didn't do solar on these yet, we're still sort of fooling around with that idea for battery backup, or actual off grid living. So you know, it just sort of working with the building. Now the trouble, as you may know, is that I've learned and this is I don't know very much about it, obviously. But there's a group like yourself who build who are very handy, I have no skills, I can't build anything. And then there's a group of contractors who really are aren't in the business. So there's a group that are really building incredibly high end tiny homes.

Ethan Waldman 15:55

Yep.

Henry Svec 15:56

But there isn't a group that are building nice, affordable, you know, solid homes, our guy did, but he's now in the other building, because the construction industry went so crazy. He went into other bigger projects. So currently, we don't have a tiny home builder. We're looking at different options. And we're also hearing from people who have interest in our land, they'd like to bring their own home or build your own. So I think that's where we'll probably end up we're not going to be building them anymore. We're going to be providing the great space. Yep. And the infrastructure. You know, I have a man who does the road in case it snows. Yep. And make sure you know, folks enjoy where they're at.

Ethan Waldman 16:35

Yeah, well, that's, that's really exciting. And what are the laws like, there? You know, Are they friendly to tiny homes?

Henry Svec 16:41

Well see? That's a great question, because most municipalities in in Canada and Nova Scotia have passed laws saying you can have a home with your existing house because of the housing, great housing crisis. Many of them, however, still have not built up the infrastructure and the bylaws to allow tiny homes, but they allow them.

Ethan Waldman 17:01

Okay.

Henry Svec 17:02

So before we could do our tiny home project, we had to put in a development plan, which we did, and it was approved. And it clearly indicated they were tiny homes, but then the provincial bylaws are somewhat in conflict to the local. So we've had no issues and they recently hit us with some taxes so they're happy with it.

Ethan Waldman 17:23

There you go.

Henry Svec 17:24

But we're going to have to see what ends up happening. I think there's a strong movement to make sure these homes are allowed, because they're incredible, like we have, we have central air, I guess you can call it central air conditioning, but they're air conditioned or heated. They have all the amenities. They're safe. So yeah, I think I think they're they're here. I mean, I think of people living in mobile homes, who drive around the country. And that's the other concept. We're not sure if the populations are compatible, but we could easily have these one and a half acre lots for mobile home folks to the park during trial for a while, while they enjoy surfing or whatever they're doing. So we're still sort of taught, we don't want to disrupt it for the other people, but we're trying to try to find the right mix.

Ethan Waldman 18:09

Yeah, you could always have a balance a blend, you know, maybe a couple of spots that are available for, you know, people who are traveling, not just mobile homes, you know, there's like a whole van life skoolies, you know, converted vehicles that people live in and travel in cities.

Henry Svec 18:25

And what's the off the grid group like? Is there a lot of people who want off the grid living? Or do people want all the amenities as we're thinking of providing?

Ethan Waldman 18:34

I think that it's a little bit of everything. I think that a lot of tiny home owners end up being off the grid more because they have to just because of where they're parking, might not have a power hookup. So and then the there are some people who go into it specifically because they want to be off the grid, but I would say the majority want to be connected and want, they want it to be convenient and stable and reliable. versus you know, waking up and you know, not having enough battery power to to make your toast.

Henry Svec 19:10

Yeah, I understand that. I feel good. Well, I mean, we're gonna continue with the development that way.

Ethan Waldman 19:15

Yeah.

Henry Svec 19:16

You know, bringing in the power was a challenge. I mean, I didn't know I mean, just bringing in the hydro from the road took us probably four months of talking to groups and yeah, the power company and all kinds of things so so getting the infrastructure you know, sometimes it sounds simple, we'll just buy a piece of land and you know, do this and that are the septics, you know, making sure the wells are properly tested and you have all the filters in place and you know, it is but you know, on the other side, it's wonderful to see that we might be when we finish the project, we'll have about 25 lots on the one property. Okay, it'd be kind of cool to have 25 You know, tiny home owners there and then we might actually put we were talking about putting a little office up somewhere so people could use like Yeah, you know, just to get into an office share situation to get out of the house route for a bit Central or central space or building.

Ethan Waldman 20:06

Yeah, right. That's the dream for many people, I think being able to live in community and have, you know, a shared space that that can serve, serve needs that the little house, you know, can't quite do like for bigger gatherings or office space, that kind of stuff.

Henry Svec 20:21

Well, we have good news too, is we have the ocean so you can in five minute walk, you can get down to the ocean. And so you can sit just by the ocean and enjoy everything it has to offer. So so that's pretty exciting.

Ethan Waldman 20:34

Yeah, well, I mean, it sounds like you're doing it right. It sounds expensive. Do you mind if I ask what your cost per lot to develop is?

Henry Svec 20:43

Well, that's a great question, I can tell you that the septics and the water are in that $30 to $40,000 range. By the time you get all your approvals and everything done, then you have the infrastructure of the road building, so you have to build a solid road and make it with gravel and so on. On top of that you have engineering and surveying costs.

Ethan Waldman 20:43

Yeah.

Henry Svec 20:44

So, you know, in the province, it's quite good. Everything is approved by standards of health. So yeah, we had to dig for the soil content to put in the septics properly. And because we're such a spread out community, we're not doing high intense stuff we're doing pretty much you know, one and a half acres is quite a large property. So I would say probably to develop without the cost of the land, just simply developing, we're probably looking at that $40 to $50,000. A lot range.

Ethan Waldman 21:35

Okay.

Henry Svec 21:36

To develop. Alright, not terrible. No, and we're lucky because we have a great road, Phillip, our road guy down there is really reasonable. He has his own gravel pit, nice rock crushing operation. So we've developed the relationship and he's worked with us we've over the last two and a half years, we've been working on the project. So yeah, local, try to hire local whenever we can. We have a great electrician who's local. Of course, he helps with the power negotiation stuff. So yeah, it's it's just it's a lot of fun. You know, it's, it's become a challenge. But it's it's a great learning opportunity. And I think it's to help people who are at the starter side, or the other side, and they haven't had a lot of real estate experience, because negotiations, everything, as you probably know, and trying to get the right. situation and value is important for people.

Ethan Waldman 22:25

What what has been, you know, what's been the biggest challenge or what have been some of the biggest challenges so far?

Henry Svec 22:32

I think getting you know, we've built during COVID, other properties, standard properties, rentals, student properties at University towns, this, the building was the most challenging because some of the, I've dealt with contractor for 40 years, and it's a tough industry, some say the worst industry on the planet. And so COVID was a convenient excuse for everything.

Ethan Waldman 22:57

Okay.

Henry Svec 22:58

And so, you know, we would hear, and we've never had delayed in my 40 years of doing things. This is the first time and we were building houses during COVID that were on time and on budget, by the way.

Ethan Waldman 23:09

Yeah. Okay.

Henry Svec 23:10

So I would be told certain materials weren't available in the province. And I would call we would call Home Depot or Costco and say, "Well, maybe you need to ride around the corner, because Costco has got a bunch or Home Depot has a bunch." And so I think it came down to the contracting the building part. The the land part was just amazing going down there and talking to the, because he loved his work. And he was upfront, transparent, honest. And you just really appreciate that. And when you're working with anybody in the building trades, yeah. But I have a statement. You know, I think that the problem is that with what happened with building and no disrespect to builders, but many builders felt like they were neuroscientists. And they could charge you whatever they wanted. And they would, they would try to, like we only do fixed price quotes.

Ethan Waldman 24:00

Okay.

Henry Svec 24:01

So if we're gonna build something for $100, and it's $100,000, that's it, there's no upselling there's no, I'm not gonna make any changes to the design. That's what the price is.

Ethan Waldman 24:11

Right.

Henry Svec 24:11

And so despite those contracts, people continually would try to change things. And we said, That's not happening. Right. You know, and so when you have to get to the point of getting lawyers involved to get a project completed, without actually having to do the very painful litigation piece.

Ethan Waldman 24:29

Yeah.

Henry Svec 24:30

But you have to be prepared to stand by what you both, to me a handshakes, everything when you shake someone's hand and they agree, and then later, they tell you well, you know, I have a problem with that. So I think Finding a reputable builder in the future is going to be a problem, which is, which is perhaps why in your case, building it yourself is great, because you you control all those things. Right? You probably know right now, lumbers dropped What 70% of where it was a year and a half ago.

Ethan Waldman 24:56

Yeah, it's wild.

Henry Svec 24:57

Yeah. And I was told that the time or lumbers never go drop you, you know, or someone that we were going to build, I'll tell you this, when we very quickly, we were going to build a small 600 or 800 square foot, two bedroom on the oceanfront. And the cost for just the cement, which normally would be $3,000 - $5,000 to get it poured and done as a slab was $18,000. Oh, my gosh, I said, That's not happened and what planet? Or were you talking about value? So you have to know, I think the value of things. And to me, that was probably the most painful and it was it was disrespectful. Because now the same people would be happy to have the work at a reasonable price, but they're not going to get it because you never forget those things, the gouging that went on during and I'm sure it's still going on today, for some excuse, but the COVID excuse and supply chain problems was people memorize that, even though it wasn't true.

Ethan Waldman 25:54

So how do you know? How do you know what the value of something as I mean, I'll give an example of you know, somebody listening who really wants to live in a tiny house, you know, can't build it themselves or don't want to build it themselves for some reason. And, you know, they're getting quotes from builders that that seem really high, like how, how do you figure out what the value of something is?

Henry Svec 26:17

Well, I'm fortunate in that in 40 years, I have a few people that I can trust to give me the real answer. So because I don't know a lot about building although I do know, numbers and costs, I'll call one contractor I know. And he would say to me, because I said to him, let's start a tiny home building company. It's so bad. What What should we be able to build him for? He said, well, well, you could build them for a reasonable profit for about $35 to $40,000. I said really?

Ethan Waldman 26:45

That seems low to me. Yeah. How

Henry Svec 26:46

come? How come? The people are quoting $150? Yeah. And then. So there's that then there's, as I talked about in the book, how do you tell the value of a pair of boots? You have to drill? You don't have to know a lot about building but you have to drill down? What are they going to charge me for the lumber per square foot? What are they charging me for the trailer? If it's going to be on wheel? How does it relate? Like, what's the cost per square foot, if it's a 200, square foot home, and you want $100,000? That's $500 a square foot. That's extremely expensive. Right? $500. So you start to develop part of it's my experience, part of it is ask a lot of questions. And part of it is a sense of the person I'm dealing with. And I have another colleague, I work with 30 years. And this is what happens over time, you quickly weed out those contractors who aren't straight up, there might be a one off with you. But when you when you find a group that you can work with, in our case, we always provide work for them, they're the first call up, it doesn't matter. And we we do a fair, fair price, even though maybe we could get it for a bit less, we pay a bit more because we want to keep them in business. And we have a great relationship and they're honest. And they're all fixed prices. There was no X

Ethan Waldman 27:59

Yeah, yeah. So they come up with a bid based on what they think it's going to cost. And then that's, that's the price you agree on?

Henry Svec 28:06

Well, we negotiate. So okay, with the contractors we work with, it's not unusual for us to say, well, that's not gonna work. And if it if it can't work, we won't do the project. So we're never married to a project. It's like the worst thing you can do in investing is being so emotionally connected to it, that you want it so bad that you'll pay whatever. And they can sense that and it's very much what we've learned from the honeybees. The honeybees do everything based on rule.

Ethan Waldman 28:31

Okay.

Henry Svec 28:32

There's no emotion. So you as a buyer of a tiny home needs to know what what you should pay in your community based on the quality of what you want to have built.

Ethan Waldman 28:41

Yep.

Henry Svec 28:42

And if no one will do it for that don't build it.

Ethan Waldman 28:45

Yeah, yeah.

Henry Svec 28:47

I, we walked away from three construction projects a year ago. Because the the prices quoted were absolutely insane. And they all said, Oh, you'll be paying more. Like I said, Well, maybe I just will never build this.

Ethan Waldman 28:59

Yeah.

Henry Svec 29:00

And sure enough, now prices have dropped incredibly. And now people are calling us for work. A year ago, I'd be calling around contracts. I have no time to quote I'm so busy. I have no time. Now they're calling us up or they're saying when you call up to get some construction work done. They'll say I can pencil you in in three days. How does that look? Yeah, and a year ago, it was a year right? Oh, six months all were so backed up and you go Okay, interesting. And that's the point I think I want to make to some of your listeners. Don't be in a hurry. Go ahead and wait. And bring someone around who understands pricing with you have it reviewed, get three quotes.

Ethan Waldman 29:37

Yep.

Henry Svec 29:37

And always say I always ask people how did you come up with that number? Yeah. I'll give an example. We bought a incredible Ocean House my wife and I, that was empty for seven years. Other than other than rodents. No one lived in this house. Right? Yep. So we were getting quotes for things. So the the quotes to paint the outside of this beautiful home on the Motion ranged from 12 to 28,000. The same paint the same square footage, right? So I'd say these people, how did you get 28? Well, it's it's what it is. I see. Well, what can you bring? Yeah, no, that's what I said, Well, that's not what it is because I'm not paying you that. So you want to make sure you get a number of different quotes. And you know, and treat people with respect. I respect contractors, because I can't do anything they do. I respect every I mean, an incredible skill, incredible abilities. Yeah. But that doesn't mean we're not going to come up with a fair sort of exchange of services for money.

Ethan Waldman 30:37

Definitely. So let's talk honey bees. I I will admit that that my wife and I are, I guess I'm gonna say we were amateur beekeepers, we wonderful bees for for a few years at at our tiny house when it was in a different location. We don't currently have bees. But what what can honeybees teach us about about value investing and about tiny homes?

Henry Svec 30:58

Well, again, it was very randomly discovered, and I've been working in investing for 40 years, and we converting our farm back to nature. So we're around bees and around nature and what how you take a 50 acre, you know, really incredible cash crop, land and turn it into back to nature.

Ethan Waldman 31:14

Okay.

Henry Svec 31:15

And so we watched our bees, and at the same time, I was reading Benjamin Graham, Warren Buffett, all that kind of stuff. And he started looking at it, you go, the bees have really good rules about investing. I'll give you a couple quick examples. The honeybees can tell you, they tell each other every 15 minutes the status of the Queen, as you may know. So there's 40,000 bees in a hive every 15 minutes. They all know how they're doing.

Ethan Waldman 31:41

Okay.

Henry Svec 31:42

Okay, now let's think about our own financial world. Do we know we get every 15 minutes? Do we know every week how we're doing financially? Our credit card, or bank? Yeah, what we're spending what we're earning. So getting a real good assessment of right now is incredibly important.

Ethan Waldman 31:59

Yep.

Henry Svec 32:00

Another one is probability. Bees have a probability in mind when it comes to deciding on where to live. So when they swarm, they go out send scouts come back, they have to hit around 75% to go ahead and move into that house, they have to agree 75% of the scouts have to say yeah, that's the place I want to live. And then the hive says, Okay, let's go. So there's a probability of success. But even with that, only about 30% of the hives make it till the next spring. So when you invest, and you're a value investor, you have to realize there's a probability to failure all the time. So with the honeybees, it's survival. So we as humans, need to look at how we can survive. So in that tiny home property purchase example, I said to myself, what's the probability, I'm not going to get that money back someday, the $300,000 that we spent for the 52, oceanfront acres? I think the chances are pretty good, we'll at least break even.

Ethan Waldman 32:56

Yeah.

Henry Svec 32:56

Forget how much you make just just breakeven with inflation. And I think sometimes we we don't think about that, when we're investing. And the big one too, honeybees are value investors. So they'll go out to a, a clover flower, head of another flower, because the sugar value of the clover in the nectar is much higher.

Ethan Waldman 33:15

Yep.

Henry Svec 33:16

And their value, so they get more for their effort or more for their money. Yeah, take it back to the hive. And it's easier to make honey out of that type of nectar. And so their value investor, just like you may look for a value property, or I may, something that you can take and use and get more out of it than another product, which is another definition of value. So there's 10 lessons in that book, I wrote it for our grandchildren, we have three wonderful grandchildren. And you know, when he's when you know, stuff, your kids don't listen, and your grandchildren don't listen. So this way, the honeybees are kind of telling everybody, this is how to become a value investor and be smart with your money, because then you don't have to think about it. You can pursue things based on other reasons other than money. And that's pretty exciting. That is very exciting.

Ethan Waldman 34:02

Yeah, I was always amazed to learn that how far the bees would travel from the hive, you know, to get specific nutrients or to go to specific flowers at different times of year.

Henry Svec 34:15

And they always calculated they always know that the amount of energy I expend isn't equal or greater than what I'm going to get, right? Because that's where they cut it off, which is genius, right? We often don't think that way. Right? So if we we thought the same way, then we would get more value for what we're doing based on that. And so, in our 50 acres, we've created like a honeybee heaven, right, so we've got ponds for water. We have Clover to fill up their gas tanks. We have wildflowers. We have trees everywhere. So they get the early maples and willows. And now we're integrated with tall grass prairie we planted that was original to this land hundreds of years ago. And I have to tell you, it's pretty exciting. We're walking out just yesterday, and we brought in different genetics that we brought Aren't bees from Saskatchewan, where it's like minus 40. In the winter, they were all flying yesterday it was five degrees Celsius. I'm cold. What are the bees doing? So we're trying to realize the microclimate that we're creating remember all around us as some of the incredible agricultural land in the country. So they're using roundup and all this crazy spray stuff that we used to use?

Ethan Waldman 35:21

Yeah.

Henry Svec 35:22

And the question is, can you create an oasis in the middle of all this advanced farming? And I think you can. Yeah, one quick one. I'll tell you if you got a second. Yeah, we discovered that infrared light attracts bees at night. So we have a 24/7 webcam. At wildflowerbeefarm.com You can watch the bees, it's all free. And we noticed that sometimes at night, there'd be a big ball of bees out outside of the of the hive. And it's not because it's too warm. They weren't it was just right in front of the camera. So did some research. And I found out that years ago, they took bees that were dipped in neonicotinoid poison and treated them with infrared light. And they not only recovered, but they thrived. So I talked to my electrician, I say anybody what's in that camera because well that's infrared. So this year, on some of our border colonies, we're going to install infrared solar powered lights at the entrance so that we're going to try to figure out can we counteract any possible spray effects on bees? Yeah, with this infrared inexpensive solution where you have a solar panel powering a light at night and if they start coming out like they were doing here the bees get it right. And I have to tell you the hive that is on the light here where you can watch on the farm is one of the healthiest hives I've ever seen.

Ethan Waldman 36:46

Wow.

Henry Svec 36:47

And it might just be random it's only one but the science in the laboratory would tell us that we can counteract the agricultural movement with all these new nicotinoid and creatures braising by by just helping them a little bit and that's what servant beekeeping I'm not sure what type you practice but servant really means you do the least amount possible but you still try to help them.

Ethan Waldman 37:09

Yeah, I think you know we were so new to it that we were just trying to figure it out but we we didn't do any like heavy chemical treatments or anything like that we were trying to do you know the now I integrated pest management is that's the thing. Yeah, I'm, I'm searching back in my memory now.

Henry Svec 37:29

What did you use for mites? Can I ask? You start them all or Formic Pro or

Ethan Waldman 37:36

Formic formic acid some some product that had formic acid in it? Yeah.

Henry Svec 37:40

So what we've done is we have a few of those because we're we're testing them out doesn't seem to be any difference whether we treat or not. Okay, and our bees are starting and many of these bees saskatoons particularly, will carry out sick babies and will will chew the legs off mites.

Ethan Waldman 37:57

Yep.

Henry Svec 37:57

So if you let honey if you can, if you can feel the pain of losing hives as we have had to do, eventually the bees do adapt if we leave them alone. The problem is, it's so hard to leave them alone, right? I mean, you want to help them, you want to give them I was out I lifted a hive the other day the bees are flying. This is a light hive, I should add some honey and then I said no. It's not my job. Okay, stay out of the way. let nature take its course. So servant beekeeping is very much watching and listening. And not like I'll give me example, when I trained to be a beekeeper some years ago, you open the hive every two weeks to see how they're doing. Yeah, well, every time you open a hive, you break the seal the proposal, it'd be like someone taking a roof off your house when you make chocolate chip cookies and then putting the roof back on and the smells are different. The energy to seal it is stressful. So we're trying to only enter them once maybe a year or twice if you're going to split them because we still split to try to find the right genetics, but I think there's a good balance you can do without having to you know, bomb your bees with spray or pesticides every two weeks. Yeah, definitely.

Ethan Waldman 39:04

And we were we were always like to I think we had three hives at one point. And so it was like we knew here in Vermont, you know, it's a it's a very long winter, the spring tends to be really hard for them because they're running out of food. And there's not much happening outside in terms of flowers and nectar. But you know, we know that if you have more hives, you know, you're going to lose some but you're also going to, some are gonna make it and then you kind of can build from there. One of

Henry Svec 39:34

the challenges, as you say is habitat right? When you when you look at what where are they going to go like around here. If it wasn't for our 50 acres, all of the land is farmed. There aren't even there used to be headlines right where you'd have like 20 feet wide and the length of the farm would be grass and trees. That's all taken out now for efficiency. And many of these farms are 1000s of acres so there is no I took a drive from our place to Niagara Falls which is about a three hour drive. I could not find any natural habitat along the highway. Nothing. It's kind for sprayed. There's not there's no place for those bees. There's the odd forest you'll find. So I think habitats 95% of our problem. I really do. Yeah, our goal our dream is for every 100 acres of one acre of oasis for bees and wildlife. I mean, we have we have I don't know how many the first year we stopped farming this property before we planted the wildflowers. We have 95 Different wildflowers on the farm. So for 100 acres, it was sprayed to death. We stopped for one year, and all of a sudden there's 95 and that's reassuring to me that was really exciting. I know where you can take a pic Yeah, unbelievable. Yeah. And now we're getting this is really crazy. I don't understand that. Now we're getting things that happen that bees like balsa Balsam trees. What we we have planned we don't have any balsa trees around here. And of course bees use that for proportions right. Different types of trees. Why would a tree that bees use for pollen and stuff suddenly start popping up on our farm? Bees don't carry seeds. How did that happen? Like what?

Ethan Waldman 41:20

I don't have any. Do you have an answer?

Henry Svec 41:22

No idea. I don't know anything. I mean, I the more you study nature and bees, we know maybe 5% I mean, we don't know anything about bees. You know? I mean, we think we do. But we don't

Ethan Waldman 41:32

Right. You, when you when you're keeping bees and you think that you know what they're supposed to be doing? It turns out that the bees didn't read the same book that you did.

Henry Svec 41:41

Well, the takeover you know, the takeover kills me, you know, the takeover usurpation or whatever they call every Yep, a hive can go into another hive in 10 minutes. Take it over. Yep. Yeah, so a beekeeper what they call a master beekeeper, a genius beekeeper could go to the bathroom, come back, look at his hive and say, Boy, this hives healthy. But it's a whole different hive than when he went to the bathroom. But they don't know. We don't know. Right? We have no idea.

Ethan Waldman 42:07

So you have a podcast called Invest Like a Honeybee. Tell tell us about the show. And what kind of stuff do you talk about?

Henry Svec 42:14

Sure. It used to be called shrink money advice when I was a psychologist, okay. Any advice is a dumb, it's a dumb title. But it's really about I interview guests who are into it. But I also talk about Smart Money, being smart with your money. And it's kind of common sense. But the push and I'm not sure we haven't talked finance the push is really to get people to react based on information, not emotion. Because when you watch the shows every morning on business, they try to get you hyped up by this sell that Google Amazon, you know, none of that met No, base it on value and have a plan like the BS. And then none of this matters. Interest rates don't matter. Inflation doesn't. You think about right now back to that lesson. What's happening right now most people can't tell you. And as far as predicting the future, no idea. And people who tell you they can think of the BS again. 75% think they're picking a great house and 30% of the time are they right out of that? We have no idea. It can take one event and all of a sudden so we you know when we land banked the idea of land for me where the tiny homes are, was to have a place where you feel you can sleep at night because you'll always have the land the trees, you know, you're close to the water. You can fish if you had to eat protein, I suppose you can hunt some rabbits or something. But you have this place where you feel secure. So I think as as people, we need to find out what makes us secure. Because once you're secure, you can take on all those other things that you care about.

Ethan Waldman 43:53

Nice. Well, it's it's, I'm looking forward to checking it out. It sounds I mean, both titles actually sound interesting. I would I would listen to shrinking money too. But I'm gonna listen to investigate anyway.

Henry Svec 44:04

Well, I wrote Shrink Money Advice for my children because as you know, as I said, You can't give a relative or a friend advice. So I thought if I write this book I had I think one of my sons edited it, and I made the other son edit it. And then I didn't care if I sold it because there now this book we wrote for and by the way my I also listened to my advice and shrink money advice. It's it's a parody of a couple who aren't happy with their life and how they ended up and anybody who followed that information. multimillionaire now just shrink. The What Grandpa Learned from his Honeybees, we wrote for our grandchildren for the same reason so that when they're 910, or an adult reads it who's not feeling good about their money, they can actually learn some basic lessons to get them to that next step. And in the appendix of that book, I actually actually put in two stocks that I only own three or four stocks now I think it is how do I find value in those stocks? And if so, you can take it From the very basic honeybee story, and if you want to get a calculator out, you can actually push it all the way to analyzing stocks. But we built we wrote it actually for young children and young people who haven't had a lot of financial experience.

Ethan Waldman 45:12

Awesome. Well, the books both sound great. So where can people get the books?

Henry Svec 45:16

So you can get, you can get What Grandpa Learned from his Honeybees just came out a couple of weeks ago on Amazon, I think Audible is going to be this week. I think the hard covers today. So if you want to get a Kindle, or the softcover, you can get it now. But Audible is probably within a week.

Ethan Waldman 45:30

Okay.

Henry Svec 45:32

Yeah. And I encourage grandparents to read it to children, maybe you do one bee story a day, the worst case scenarios, you'll learn 10 things about bees, 10 different bee stories, yeah, yeah, then we apply those to being smart with your money, which, you know what, if you're smart with your money, it's a lot easier to not have to just zone out of all that money, stuff, you don't you don't think about get a system in place, they have confidence in that you trust. And then you don't have to worry. And when you get enough money, then you can look at investing in a certain way. And just sort of make yourself feel comfortable. Because in the end, you know, you want to be able to practice or do whatever you do to take care of the planet in a better way. And one way as you need some resources, and this will help you with that, like the honeybees do.

Ethan Waldman 46:17

Great. It's crazy. Awesome. And so they're both on Amazon, then yeah, you

Henry Svec 46:22

can get them on Amazon Shrink Money Advice I wrote a while ago and did an update edition. And that and that, that actually, most of that I even have a list of strategies. If I was starting out today, what would I do? How would I take on high house prices? Well, how would I invest and so there's, but it's very simple. And it's based on my 40 years. And this stuff kind of works. I'm not a financial planner. So I tell people make sure you check out with your financial people before you start making all these changes. But like I have no vested interest in this, you're not buying stocks that I care about, or whatever. It's more about giving you sort of some ideas. And then in what grandpa learn from the honeybees, I have 13 books in the appendix that I think you should read. So if you want to go beyond the basic, and really dive in, I read tons of books on finance, those are my 13 favorite that I think really have changed my life when it comes to investing.

Ethan Waldman 47:15

Fantastic. And actually, that's, that's a great segue because I always like to ask guests, what are two or three favorite books or resources that have helped them out? So maybe could you give us a preview of of one or two of those books?

Henry Svec 47:27

You know, the more I just read this when I was finishing the book, and again, you know, you know how you get that sort of spiny tingly up your spine I was reading harbor his book on Dhando investing Dhando it, it's in the it's in there. And it's about an Indian family, they come from India, with basically no money. And they end up owning 50% of the motels in America.

Ethan Waldman 47:50

Wow.

Henry Svec 47:51

So how does it How does a family with barely any money. And when I was reading this, I'm going okay, that's be less than 10. That's be less than six. I couldn't believe this book, how it just intersected with what we were in at the time we were editing the book What Grandpa Learned from his Honeybees. And this book was so powerful, the family how they ended up owning and to this day 50% Of all the motels in America.

Ethan Waldman 48:16

Wow.

Henry Svec 48:17

And they started with one little one in a lousy little community that nobody wanted. And so there's lessons in the book about risk. And the risk is a really important one hard work work ethic. Because that's that's one of the other things we talk about. How do you work on the right things when you have to, but really work? Like when you're when you're looking at a project or an investment. I'm sure when you're building your tiny home, you are probably a bit obsessed about that home, I would imagine. Yeah, absolutely. Maybe your partners weren't too happy around you. But that becomes really what you do. And that's outstanding. And it's that obsession that you have to have when you're doing investing rather things that will take you to that level. And the other thing I should I should say the good thing about pabrai his book on Dhando, I think it's johndrow or danger or investing you'll get it in the appendix is that you take responsibility I don't like to see people taken advantage of and so when you're asking for financial advice, most people check out a mechanic more than they'll check out the person they're going to give all their money to to invest and I really want people to be responsible say wait a minute, it's like that contractor who says it's gonna cost you 20 grand to paint the outside of a house instead of the 12 You got it done for ya. You know what questions are you going to ask are the crypto thing you know this recent fraud issue? When you look at that from the outset, you say to yourself, what was this what do you what are you doing and you think of many people have read about made off and sophisticated people that went down with made off and now with this other investor that not investor this young guy in the Bahamas? Yeah, the crypto guy they didn't do their due diligence. They had no rules. They piled in because it felt good or it looked good or it was they got in the emotional thing. Oh, that you know, crypto is gonna be worth a million dollars. Bitcoin because there's only so many. What does that really? Really I? What How sure are you to get your money back if you do this deal. And so if we had some of those be lessons, most people would not have thrown away their their life earnings on made off or crypto. I mean, there's something too about having rules that you feel comfortable with when it comes to your money. And I think it's our responsibility. We teach children to wash their hands directly now with Norwalk virus and all that we wash your hands after you go to the Yep, we don't teach them financial rules. I don't know why, you know, spend less than you make. Credit card debt is a bad thing. Yeah, I mean, there's you don't need a PhD to figure out this stuff. But for some reason emotion takes over right, Ethan and then we forget about all that common sense is out the window. Right? I heard Kevin O'Leary the other day. He's he's Canadian. We'd like to permanently have him go to America now, though, because he said he would still invest in the crypto guy even when they were holding them off to jail.

Ethan Waldman 51:15

Yeah, like what is that?

Henry Svec 51:18

How can you ever trust anything? He says again? Right, right, it

Ethan Waldman 51:23

I try. I don't wait too far into that stuff on this podcast. But I'm on the same page as you in regard to all that, you know, the crypto stuff

Henry Svec 51:33

you know, and I someone said to me the other day, what actually I remember when I was a lot younger than you a man sat me down said how much money would you like to have some days? It's 30,000. year would be about right? I can live on $30,000 a year. He's just no you can't that's stupid. And no, I was living on 30,000 with three kids. And right now you know what even I live, I can live on $30,000 a year.

Ethan Waldman 51:54

Wow.

Henry Svec 51:54

I could I do stuff. We have a I buy cars that are used. I don't you know, like my Volkswagens cost 18 grand, I buy him two years off the lot. And they last 10 or 15 years? I don't. So I'm a simple guy. Look, I don't even have a clothing allowance that I care about. So the point of all that is it's it's it's taking control and it doesn't mean you have to do that. Right. But it or other people it just means Do what makes you feel comfortable. So you live within your means, which is what the BS teaches. Nice.

Ethan Waldman 52:27

Well, Hank Svec thank you so much for being a guest on the show. This is a really fun conversation. And I think I think there's something in it for many listeners.

Henry Svec 52:35

It was a blast. Thanks for having me, Ethan. Take care.

Ethan Waldman 52:38

Thank you so much to Hank Svec for being a guest on the show today. You can find the show notes including a complete transcript and links to Hank's podcast at thetinyhouse.net/256. Again, that's thetinyhouse.net/256. Thank you so much to PODX Go for sponsoring the show today. You can find out more about the Grande S1 tiny house over at podxgo.com. Again, that's podxgo.com. Well, that's all for this week. I'm your host Ethan Waldman, and I'll be back next week with another episode of the Tiny House Lifestyle Podcast.

Transcribed by https://otter.ai