In this episode of Rational Reminder, Ben Felix, Cameron Passmore, and Ben Wilson return with a classic AMA format—answering listener questions that dig deep into the behavioral and evidence-based foundations of sensible investing. From lump-sum investing to the psychology of advice, the trio blend data, humor, and clear thinking to demystify complex financial ideas. They discuss the behavioral logic behind dollar-cost averaging, why mutual funds might actually be more tax-efficient than ETFs in Canada, and whether technology could ever truly replace human financial advisors. Plus, they share their biggest investing mistakes (yes, Bitcoin makes an appearance), dissect the rise of "buffered" ETFs, and explain why chasing complexity usually costs investors more than it helps.

Key Points From This Episode:

(0:00:05) Introduction – The first episode featuring all three hosts together: Ben Felix, Cameron Passmore, and Ben Wilson.
(0:44) OneDigital update: expanding evidence-based advice across Canada with new PWL partners in Halifax.
(2:36) The mission in motion – bringing the "markets work and planning matters" philosophy to more Canadians.
(5:29) "Finding and funding a good life" – how PWL integrates wellness and happiness into financial planning.
(6:16) AMA Question 1: Lump-sum vs. dollar-cost averaging — why lump-sum wins 65% of the time.
(10:05) Base rates, behavioral regret, and the real role of an advisor.
(12:22) The 2020 PWL paper results and how behavioral hedging fits in.
(16:10) If dollar-cost averaging feels safer, maybe your portfolio is too aggressive.
(18:08) AMA Question 2: Advice for smaller portfolios — how technology, AI, and fee-only planners can fill the gap.
(21:01) Can AI really replace advisors? Cameron's Waymo analogy sparks debate.
(23:33) AMA Question 3: Mutual funds vs. ETFs — why in Canada, mutual funds may actually be more tax-efficient.
(30:00) The Capital Gains Refund Mechanism (CGRM) explained — and why it matters.
(34:31) Dimensional's Canadian funds vs. Vanguard ETFs — tax distribution data that surprises most investors.
(37:40) AMA Question 4: Are discount bonds priced for tax efficiency? The evidence says no—discount bonds still win.
(42:23) AMA Question 5: Biggest investment mistakes — from Bitcoin regrets to house-buying reflections.
(48:15) AMA Question 6: Buffered ETFs — comfort, complexity, and why simple portfolios outperform.
(53:45) Simplicity as a superpower — why "markets work" is still the most radical idea in finance.
(55:27) AMA Question 7: Updating the RR model portfolio — why there's no "optimal" portfolio and simplicity wins again.
(58:31) After show: Reviews, humor, and a reminder about "No Net Worth November."
(1:04:15) Life offline — Cameron's reflections on quitting social media and finding clarity.

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind
Rational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://pwlcapital.com/our-team/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, Ben, Cameron, and Dan are joined by Ted Cadsby, former executive at CIBC, author of The Power of Index Funds, Closing the Mind Gap, and Hard to Be Human. Ted brings a rare combination of experience in both finance and cognitive psychology, having helped introduce index investing to Canada before turning his attention to how human thinking itself often misleads us. Ted shares inside stories from his time at CIBC—how he tried to make the bank an indexing leader in the late 1990s, the pushback he faced, and why he still believes so deeply in indexing today. Then, the conversation turns to human cognition: why our brains evolved for simplicity, certainty, and emotion, and how those traits can sabotage both our portfolios and our peace of mind. From "greedy reductionism" and "certainty addiction" to emotional overreaction and competing selves, Ted unpacks the five cognitive design flaws that make it hard to be human—and how metacognition and mindfulness can help us overcome them.

Key Points From This Episode:

 

(0:04) Introduction to the Rational Reminder Podcast and hosts.

(0:18) Cameron's story about rediscovering The Power of Index Funds and reconnecting with Ted Cadsby.

(2:21) How Ted brought index investing to CIBC and tried to make the bank a leader in indexing.

(5:58) Why assessing active managers taught Ted about randomness, noise, and the illusion of skill.

(8:42) The moment Ted "saw the light" on indexing—and why randomness, not market efficiency, is the real obstacle for active managers.

(12:54) How Ted tried to implement index investing at CIBC and the cultural resistance he faced.

(15:05) The goals of The Power of Index Funds (1999) and how he tied indexing to human behavior.

(18:49) How his indexing push created internal conflict at CIBC and ultimately led to his departure.

(23:23) The influence of John Bogle and Vanguard on Ted's mission to bring indexing to Canada.

(26:59) Why he's still passionate about indexing, and what worries him about private equity.

(31:44) How human cognition and philosophy led him from finance to exploring how we think.

(34:46) The "Big Five" cognitive design flaws that shape human decision-making:

 1. Greedy reductionism – our urge to oversimplify complex systems.

 2. Certainty addiction – craving the feeling of knowing, even when we're wrong.

 3. Emotional hostage-taking – overreacting and ruminating.

 4. Competing selves – inner conflicts between present and future selves.

 5. Misguided search for meaning – overextending our need for purpose.

(44:11) Why modern life amplifies these flaws and how System 1 (automatic) and System 2 (deliberate) thinking play into it.

(48:00) The human superpower: metacognition—our ability to think about thinking.

(49:57) How mindfulness and a "meditative stance" help us use metacognition daily.

(53:57) Why knowing your biases isn't enough—emotional regulation is the real challenge.

(56:27) How to recognize triggers for deeper reflection and System 2 thinking.

(1:00:34) How systems thinking and better questions can combat our reductionist tendencies.

(1:05:57) Why our addiction to certainty fuels overconfidence and poor decisions.

(1:08:43) How humility, probabilistic thinking, and skepticism can make us wiser investors and humans.

(1:11:39) When to listen to emotions—and when to treat them as cognitive red flags.

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind
Rational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Dan Bortolotti — https://pwlcapital.com/our-team/

Dan Bortolotti on LinkedIn — https://ca.linkedin.com/in/dan-bortolotti-8a482310

Cameron Passmore — https://pwlcapital.com/our-team/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

 

What if choosing your asset allocation was as personal as your life story—and as consequential as your retirement? In this episode, we are joined by PWL Capital's Louai Bibi and Ben Wilson for a deep dive into how advisors guide clients through the most important portfolio decision they'll ever make. Louai walks us through the research, psychology, and planning frameworks behind determining the right stock/bond mix, while Ben shares real-world insights from client cases where risk tolerance, pensions, and life events shifted the balance. We explore how Monte Carlo simulations stress-test financial plans, why spouses often disagree on risk, and how pensions act as "bond-like assets" in the bigger picture. Ben Wilson also takes us behind the scenes of PWL's post-OneDigital acquisition journey, revealing why advisors are drawn to join the firm, how succession planning shapes their choices, and why a unified evidence-based philosophy matters in Canada's wealth management landscape. The episode wraps with a fascinating look at surprising stock return outliers—like Build-A-Bear outperforming Nvidia—and what that teaches us about the futility of stock-picking versus the power of diversification.

Key Points From This Episode:

 

(0:01:00) Introducing PWL's Louai Bibi and Ben Wilson—today's topics: asset allocation, advisor succession, and surprising stock return data.

(0:03:35) Louai explains the asset allocation decision: balancing stocks vs. bonds and why it's the biggest choice investors make.

(0:05:12) Why asset allocation matters: inflation erodes purchasing power, and stocks/bonds help investors keep up or outpace it.

(0:06:50) Historical lessons: $1 invested since 1970—outcomes for bonds, balanced portfolios, and 100% equities.

(0:08:35) The risks of downturns: 2008 as a case study in how stocks vs. bonds shape losses and recovery times.

(0:11:39) Risk tolerance questionnaires: how PWL uses surveys to gauge willingness vs. capacity to take risk.

(0:13:45) When spouses disagree on risk tolerance—balancing perspectives and sometimes splitting portfolios.

(0:16:42) Risk capacity: pensions, insurance, income stability, and emergency funds all shape asset allocation.

(0:20:08) Real client cases: retirees discovering they don't need as much stock exposure, or elderly clients increasing equity later in life.

(0:22:47) How often do clients change asset allocations? Rarely—except for life events like retirement.

(0:27:10) Why Monte Carlo simulations are essential for stress-testing financial plans beyond straight-line projections.

(0:30:20) PWL's "asset allocation email": summarizing risks, pensions, debt, emergency funds, and personalized tradeoffs.

(0:34:02) Pensions as "bond-like assets"—how they increase ability but decrease need to take risk.

(0:37:11) Closing thoughts from Louai: think in dollar terms, investing is a marathon, and build confidence gradually.

(0:39:32) Education shifts clients' choices: some reduce risk after learning the realities of volatility, others increase equity exposure with context.

(0:43:10) Advisor "fixed effects": research shows the advisor's own perspective strongly shapes client allocations.

(0:45:39) Transition to Ben Wilson: what motivates advisors to join PWL post-OneDigital acquisition.

(0:47:52) Reputation and content: how Rational Reminder, YouTube, blogs, and Canadian Couch Potato attract advisors.

(0:50:34) PWL's unified philosophy: evidence-based, passive investing with a planning-first approach.

(0:56:30) Key motivators for advisors: reducing admin burdens, escaping "aggregator" models, and building integrated team structures.

(1:00:15) Succession planning: why advisors seek peace of mind for their clients and teams by partnering with PWL.

(1:03:04) Ben Felix on why these conversations are exciting and why advisors should reach out early.

(1:04:54) After show: Nvidia's insane 70% annualized 5-year return—and why lesser-known names like Build-A-Bear, Celestica, and Dillard's did even better.

(1:06:33) Celestica's role in DFA funds and how it helped them keep pace with Shopify-driven indexes.

(1:09:25) Why broad diversification captures unexpected winners (Build-A-Bear included) without speculation.

(1:10:45) Active advisors pitch "winner-picking"—but history shows how impossible that really is.

(1:12:16) Reviews and wrap-up.

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind
Rational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Dan Bortolotti — https://pwlcapital.com/our-team/

Dan Bortolotti on LinkedIn — https://ca.linkedin.com/in/dan-bortolotti-8a482310

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

 

In this episode, we welcome back the esteemed Professor Scott Cederburg, Associate Professor of Finance at the University of Arizona. In this highly anticipated episode, Professor Cederburg revisits the show to delve into his groundbreaking paper on life cycle asset allocation. Professor Cederburg's latest research presents findings that disrupt traditional thinking in the field, prompting a deep dive into the implications of these new insights. In our conversation, we unpack the findings from the paper and how they challenge established norms in retirement planning and asset allocation. We discuss what the new paper adds to the discourse, his approach and methodology, the different assessment criteria used, and the main findings from the paper. We also delve into the different asset allocation strategies assessed, which strategy performed best, aspects that would influence the various strategies, and how to invest for the long term safely. We explore the nuances of stock versus bond returns and the hidden benefits of international diversification. Gain profound insights into the significance of social security, inflation-protected bonds, target date funds, and the repercussions of an all-equity strategy. Comparing his latest paper with prior research on withdrawal rates, Professor Cederburg highlights surprising aspects of the results and provides invaluable takeaways for financial advisors from these cutting-edge findings. Discover how this pioneering work challenges conventional wisdom, reshaping the landscape of retirement planning and investment strategies in this illuminating conversation with Professor Scott Cederburg.

 

Key Points From This Episode:

 

• Background about Professor Cederburg and episode overview. (0:00:00)

• How his new paper challenges the central tenets in life cycle investing. (0:03:38)

• What sets his method apart regarding its ability to challenge the status quo. (0:06:56)

• How he characterizes the life cycle of the household modelled in his study. (0:09:40)

• The data set used and his approach for sampling and analyzing the data. (0:12:09)

• Retirement outcomes used to evaluate life cycle asset allocation strategies. (0:13:56)

• Asset allocation strategies investigated in the paper and which one performs best. (0:15:49)

• Left tail outcomes of all-stocks strategy, stock returns vs bond returns, and the benefits of international diversification. (0:22:52)

• Learn about the importance of social security in the model and the nuances of inflation-protected bonds. (0:28:29)

• Investing in target date funds and the downsides of an all-equity strategy. (0:32:05)

• Hear about the impact of large intermediate losses on retirement savings. (0:35:33)

• Unpacking the lag time on returns between stocks and bonds. (0:40:01)

• Exploring investing behaviour and reasons for underperformance. (0:42:15)

• The importance of return dependencies and what happens to the results if monthly returns are used. (0:45:03)

• Navigating and modelling flaws and common aspects overlooked in financial analyses. (0:49:29)

• Dissecting retiree adherence to traditional approaches to long-term investing. (0:50:36)

• Home country bias and its influence on portfolio allocation. (0:52:12)

• Currency effect and domestic stock hedging as a strategy. (0:55:32)

• Comparing the findings from his latest paper with those from his paper on withdrawal rates. (1:00:24)

• Aspects of the results that surprised him and takeaways for financial advisors from the latest research findings. (1:02:07)

 

Links From Today's Episode:

 

Professor Scott Cederburg — https://eller.arizona.edu/people/scott-cederburg

Professor Scott Cederburg on LinkedIn — https://www.linkedin.com/in/scott-cederburg/

Professor Scott Cederburg on Google Scholar — https://scholar.google.com/citations/

Eller College of Management — https://eller.arizona.edu/

Episode 224 — https://rationalreminder.ca/podcast/224

Episode 250 — https://rationalreminder.ca/podcast/250

'Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice' — https://dx.doi.org/10.2139/ssrn.4590406

'The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets' — https://dx.doi.org/10.2139/ssrn.4227132

International Diversification Works (Eventually) — https://doi.org/10.2469/faj.v67.n3.1

'Stocks for the long run? Evidence from a broad sample of developed markets' — https://www.sciencedirect.com/science/article/

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

 

Today's episode features a series of in-depth segments, and includes a visit from our two favourite Marks; Mark Soth (aka The Loonie Doctor) and Mark McGrath! To kick things off we break down volatility and investor behaviour by looking back at our conversation with Scott Cederburg and what his research demonstrates about the topic. We then hear from Mark Soth about the project that he and Ben have been working on; the soon-to-be-released Money Scope podcast. Find out what you can expect from their financial curriculum, like the topics they'll be covering and how the structure of their episodes is specifically designed to educate. Next up we have our Mark to Market Segment, with Mark McGrath providing a detailed overview of everything you need to know about physicians incorporating. We then cover a recap of our conversation with Gerard O'Reilly, before sharing our thoughts on why this episode is worth multiple listens. Following that you'll hear Cameron share his review of Brave New Work: Are You Ready to Reinvent Your Organization? by Aaron Dignan, along with his key takeaways from the book. Finally, in our after-show section, we discuss some of the fantastic guests we have coming up, our recommended reading to prepare for those episodes, community updates, plus a few other goodies!

Key Points From This Episode:

 

• The biggest takeaways on volatility and investor behaviour from Scott Cederburg's research; unpacking performance chasing, return gaps, fund expense ratios, and more. (0:02:06)

• An overview of the project that Mark Soth and Ben have been working on, the Money Scope podcast; why they started it, what it covers, and who it's for. (0:14:13)

• Details on Money Scope's format and the supplementary case study episodes. (0:19:12)

• Our Mark to Market segment on physicians incorporating; a rundown of the complexities, common misconceptions, and benefits to be aware of. (0:26:32)

• How much you should be retaining in a corporation to make it worthwhile. (0:33:30)

• A look back at our conversation with Gerard O'Reilly and why this episode is a must-listen. (0:37:58)

• Cameron's review of Brave New Work: Are You Ready to Reinvent Your Organization? by Aaron Dignan, along with his top takeaways. (0:40:10)

• Our after-show section; guests to look forward to, recommended reading, community highlights, and more. (0:46:23)

 

 

Links From Today's Episode:

Episode 198: Gerard O'Reilly — https://rationalreminder.ca/podcast/198

Episode 224: Scott Cederburg — https://rationalreminder.ca/podcast/224

Episode 268: Itzhak Ben-David — https://rationalreminder.ca/podcast/268

'The Folly of Hiring Winners and Firing Losers' — https://www.cannonfinancial.com/uploads/main/The_Folly_of_Hiring_Winners_and_Firing_Losers1725.pdf

The Money Scope Podcast — https://moneyscope.ca/

The Money Scope Podcast on YouTube — https://www.youtube.com/@moneyscopepod

Brave New Work: Are You Ready to Reinvent Your Organization? — https://www.amazon.com/Brave-New-Work-Reinvent-Organization/dp/0525536205

Aaron Dignan — http://www.aarondignan.com/

The Ready — https://www.theready.com/

The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend — https://www.amazon.com/Fund-Bridgewater-Associates-Unraveling-Street/dp/1250276934

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/

Mark McGrath on X — https://twitter.com/MarkMcGrathCFP

 

In this episode, we delve deep into the world of wealth management and family advisory services and explore the evolving landscape of financial wealth planning. Dr. James Grubman, a renowned expert in family wealth psychology and author of Strangers in Paradise and Wealth 3.0, shares his profound insights and expertise on this critical subject. Dr. Grubman is a distinguished figure in family wealth and well-being and has made a mark with his profound understanding and enduring contributions to the field. In our conversation, we unpack the wealth management landscape through a psychological lens. We discuss the definition of wealth, the complex family dynamics and hurdles faced when adapting to elevated levels of wealth, and the essential role parents play in imparting financial responsibility to their children. We also explore the fundamentals when embracing the cultural norms associated with affluence, the psychological and practical ramifications of avoiding or overcompensating for wealth, the changing landscape of family wealth management, and much more. Listeners will also gain a comprehensive understanding of the evolution of wealth management, from traditional approaches to the transformative Wealth 3.0, along with insights on nurturing strong family relationships in the context of affluence. Dr. Grubman's wealth of knowledge and engaging storytelling make this episode a must-listen for those interested in the future of wealth management. Tune in now!

 

Key Points From This Episode:

 

• Dr. Grubman's definition of wealth and why wealth is relative. (0:04:06)
• How common is becoming wealthy compared to being born wealthy. (0:07:12)
• Family dynamics and challenges when adapting to higher levels of wealth. (0:11:01)
• Why modelling healthy personal financial management is vital for children. (0:16:00)
• Discover how the origins of wealth influence the ability to psychologically adapt. (0:20:34)
• Essential considerations when adopting the culture of wealth. (0:23:00)
• Possible reasons why someone may avoid adopting the culture of Wealth 3.0. (0:27:48)
• The implications of avoiding and overcompensating for the culture of wealth. (0:30:03)
• Explore what contributes to the successful integration into the culture of wealth. (0:35:23)
• Common barriers that prevent learning and adapting to higher levels of wealth. (0:37:10)
• Aspects parents should consider when preparing their children for wealth. (0:40:30)
• His perspective on professional advisors in managing family wealth. (0:46:36)
• Unpacking the evolution of the wealth management landscape. (0:48:37)
• He explains why the negative psychological implications of wealth have persisted. (0:53:48)
• Insights into the definition and concept of Wealth 3.0. (0:55:47)
• New skills advisors need to develop to be successful in the Wealth 3.0 generation. (1:00:20)
• Advice for finding financial advisors that are Wealth 3.0 savvy. (1:02:22)
• What Dr. Grubman is excited about in the emerging Wealth 3.0 era. (1:09:16)
• Dr Grubman shares his definition of success. (1:12:10)

 

Links From Today's Episode:

Dr. James Grubman — https://jamesgrubman.com/

Strangers in Paradise — https://www.amazon.com/Strangers-Paradise-Families-Wealth-Generations/dp/0615894356

Wealth 3.0 — https://www.amazon.com/Wealth-3-0-Future-Family-Advising/dp/B0C9SHFSGM/

Cross Cultures — https://www.amazon.com/Cross-Cultures-Families-Negotiate-Generations/dp/1517626609/

Family Firm Institute (FFI) — https://www.ffi.org/

Purposeful Planning Institute — https://purposefulplanninginstitute.com/

STEP — https://www.step.org/

Ultra-High Net Worth Institute (UHNW) — https://www.uhnwinstitute.org/

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Today, we take a closer look at asset allocation through an empirical lens, by drawing on the work and data of Scott Cederburg and his new article 'Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice'. We unpack what the research tells us about how to establish the optimal mix of assets in a portfolio, the challenges of making the right decisions when you have volatile assets, and why it's critical that you understand your level of risk tolerance. Next, in our Mark to Market segment, we unpack different types of insurance — like life, disability, and critical illness — and when you should own them personally versus making them the property of your corporation. We then review Justin King's new book The Retirement Café Handbook: Nine Accelerators for a Successful Retirement before sitting down with the author himself to discuss the content of his latest work and his long-held interest in helping others optimize for retirement. Tuning in you'll hear Justin share his thoughts on the role of choice, vitality, and joy when it comes to having a successful retirement, the nine accelerators he lays out in his book, and how to become the hero of your retirement story. In our final section, we wrap things up with some wonderful reviews from listeners and our book recommendations. To hear all of the captivating takeaways from today's episode, be sure to tune in!

Key Points From This Episode:

 

• Breaking down asset allocation through an empirical lens; finding the right mix of assets in a portfolio, common challenges, and measuring risk. (0:02:12)
• The role of government pensions when considering asset allocation over one's life. (0:09:10)
• Investigating whether volatility is risk; modeling the lifecycle of an investor and determining if (and when) it makes sense to shift into bonds over time. (0:11:27)
• Analyzing the data, modelling, and findings from the paper, 'Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice'. (0:14:02)
• The challenges of behaving well with volatile assets; advice on how to assess your risk tolerance, your ability to endure short-term declines, and more. (0:23:10)
• Our Mark to Market segment: unpacking different types of insurance and when you should own them personally or inside your corporation. (0:29:50)
• A quick look back at our conversation with Dr. Anna Lembke on the subject of dopamine. (0:37:58)
• This week's book review: Justin King's The Retirement Café Handbook: Nine Accelerators for a Successful Retirement. (0:39:33)
• Our conversation with Justin King on how to retire successfully. (0:41:19)
• Unpacking the nine accelerators in Justin's book and where they come from. (0:45:44)
• How to get the most out of The Retirement Café Handbook. (0:55:47)
• Sharing some of the wonderful reviews we've gotten recently, plus our book recommendations. (0:59:28)

Links From Today's Episode:

'Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4590406

Episode 224: Prof. Scott Cederburg — https://rationalreminder.ca/podcast/224
Episode 169: Prof. John Cochrane — https://rationalreminder.ca/podcast/169
Episode 250: Prof. John Y. Campbell — https://rationalreminder.ca/podcast/250
Episode 278: Juhani Linnainmaa: Financial Advisors, and the Cross Section of Returns —  https://rationalreminder.ca/podcast/278

Episode 177: Dr. Anna Lembke — https://rationalreminder.ca/podcast/177

Anna Lembke — https://www.annalembke.com/
Dopamine Nation: Finding Balance in the Age of Indulgence — https://www.annalembke.com/dopamine-nation
Justin King on LinkedIn — https://www.linkedin.com/in/justinking-retirement-planner-ifa/

Justin King on X — https://twitter.com/JustinKingCFP
The Retirement Café — https://www.theretirementcafe.co.uk/

The Retirement Café Podcast — https://www.theretirementcafe.co.uk/podcast

The Retirement Café Handbook: Nine Accelerators for a Successful Retirement — https://www.amazon.co.uk/Retirement-Cafe-Handbook-Accelerators-Successful/dp/1739410300

Notes from Listener PDF —

Episode 30: Larry Swedroe — https://rationalreminder.ca/podcast/tag/Larry+Swedroe

Strangers in Paradise: How Families Adapt to Wealth Across Generations — https://www.amazon.com/Strangers-Paradise-Families-Wealth-Generations/dp/0615894356

Wealth 3.0: The Future of Family Wealth Advising — https://www.amazon.com/Wealth-3-0-Future-Family-Advising/dp/B0C9SHFSGM

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

In this episode, we delve into the complexity of navigating life's challenges, taking risks, fostering self-confidence, and honing problem-solving skills. Joining us is Shane Parrish, a best-selling author, to help us unpack this nuanced topic through the lens of his new book, Clear Thinking. His latest publication is a roadmap for recognizing pivotal moments for clear thought and exposing how our defaults often drive us. He aims to empower readers to intervene, harness reasoning, and apply cognitive tools for better decision-making. Shane is also the founder of the website blog Farnam Street and the venture capitalist firm Syrus Partners. In our conversation, we explore the steps to becoming a clear thinker and how the mantra can be applied to our daily lives. We discuss how ordinary moments influence our decisions, the definition of true goals, and how to build self-confidence. We also unpack the barriers that hinder clear thinking, the difference between playing on hard and playing on easy, the value of continual growth, and much more. Tune in and discover how to master risk, confidence, and problem-solving with Shane Parrish!

 

Key Points From This Episode:

 

• Background about Shane Parrish and his new best-selling book, Clear Thinking. (0:00:19)
• The significance of ordinary moments and the benefits of becoming a clear thinker. (0:03:19)
• Examples of how ordinary moments can multiply bigger decisions to zero. (0:06:32)
• Defining true goals, and why regularly reassessing them ensures personal growth. (0:08:20)
• Clear thinking's role in reaching goals and how it helps evaluate your objectives. (0:11:07)
• Discover the defaults that hinder clear thinking and strategies to overcome them. (0:12:19)
• Best practices as a decision-making tool and the value of unconventional paths. (0:25:22)
• Explore the role of self-confidence in clear thinking and taking the first step. (0:26:51)
• Learn about the importance of good habits in developing clear thinking. (0:33:03)
• Making your own rules, sticking to them, and how they can help in social situations. (0:36:23)
• Characterizing the problem before starting the problem-solving process. (0:44:17)
• Shane shares why he values time over money. (0:48:52)
• Steps for curating your mental environment and Shane's definition of success. (0:53:24)

Links From Today's Episode:

 

Farnam Street — https://fs.blog/

Shane Parrish on LinkedIn — https://www.linkedin.com/in/shane-parrish-050a2183/

Shane Parrish on X — https://twitter.com/ShaneAParrish

Syrus Partners — https://www.syruspartners.com/

Clear Thinking — https://www.amazon.com/Clear-Thinking-Turning-Ordinary-Extraordinary/dp/0593086112

The Knowledge Project Podcast — https://fs.blog/knowledge-project-podcast/

Episode 19: Shane Parrish — https://rationalreminder.ca/podcast/19

Episode 143: Ashley Whillans — https://rationalreminder.ca/podcast/143

The Great Mental Models — https://www.amazon.com/dp/B086DQQ278

30 Lessons for Living — https://www.amazon.com/30-Lessons-Living-Advice-Americans/dp/0452298482

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

In this episode, we start by learning about the complex relationship between recessions and stock returns before welcoming Huston Loke and Jordan Solway from the Financial Services Regulatory Authority (FSRA) to discuss protecting consumers in the financial investment space. Huston is the Executive Vice President of Market Conduct, and Jordan is the Executive Vice President of Legal and Enforcement at FSRA. The FSRA supervises insurance companies, mortgage brokers, credit unions, pensions and other non-securities areas of the financial services sector. We discuss the objectives of the FSRA, their approach to protecting consumers, enforcement strategies, upcoming regulations, and more. Then, we welcome back Mark McGrath to learn about the Passive Investment Grind (PIG) concept for this week's Mark to Market segment, and we take a look back at a previous episode with Ted Seides of Capital Allocators. Finally, we are joined by author Tim Hale to discuss the new edition of his book Smarter Investing before closing off with our usual after-show roundup. Tune in now!

 

Key Points From This Episode:

 

(0:03:22) The relationship between recessions and stock returns, the definition of a technical recession, and the role of media in shaping perceptions.

(0:09:33) Why bad economic conditions don't necessarily warrant changes to investment strategies and why attempts to time the market based on recession news should be avoided. 

(0:13:42) Introducing Huston Loke and Jordan Solway and background about the Financial Services Regulatory Authority of Ontario (FSRA). 

(0:15:34) Objectives of the FSRA and the principle of putting the client's interest first. 

(0:18:55) What aspects of financial advisory services FSRA regard as the most important. 

(0:20:30) Unpacking the "Take-All-Comers" rule in Ontario and how it protects consumers. 

(0:25:32) How successful the title protection rule has been in Ontario and how it differentiates between the title of financial advisor and financial planner. 

(0:29:21) Concerns about the rollout of the title protection rule and the disparity across various designations. 

(0:33:26) Advice for identifying a suitable financial advisor or planner and how the FSRA is helping cross-check credentials. 

(0:37:19) FSRA's findings in a review of tiered recruitment model life insurance MGAs and the enforcement action taken. 

 (0:44:47) Insights into commission-based compensation structures for financial products and upcoming commission disclosure rules.

(0:49:09) Additional steps consumers can take to avoid bad financial advice and services. 

(0:50:49) Recommendations for budding financial planners or advisors to ensure they get the correct training. 

(0:53:23) Discover the infinite banking concept and what future initiatives Huston and Jordan are most excited about. 

(0:59:35) Mark explains the passive investment grind concept in our Mark to Market segment. 

(1:09:21) Recapping essential takeaways from a previous episode with Ted Seides.

(1:12:02) Tim Hale discusses his book Smarter Investing, his motivation for writing it, his intended audience, and its main takeaways. 

(1:20:09) How the financial landscape has changed since the first edition of his book and his shift toward systematic investing. 

(1:25:25) Tim shares what he thinks are the biggest mistakes investors make and behavioural biases that influence investors' decisions. 

(1:27:58) Final words of wisdom Tim has for listeners and how his approach applies to markets outside of the UK. 

(1:29:45) Aftershow roundup, listener reviews, book recommendations, and more! 

 

Join Our Live Events:

Paying it Forward to Yourself: Compensation strategies for Canadian Business Owners - https://us06web.zoom.us/webinar/register/1517000820593/WN_35_OSP3XT9Gabu6KjIT4Tg

 Investing 101: Financial Literacy Month Webinar - https://us06web.zoom.us/webinar/register/2417000820935/WN_snfu-ZhzQKeB6CZSw1yHuA

 

Links From Today's Episode:

 Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Paying It Forward to Yourself (Webinar) — https://us06web.zoom.us/webinar/register/4416996396442/WN_35_OSP3XT9Gabu6KjIT4Tg

Investing 101 (Webinar) — https://us06web.zoom.us/webinar/register/2317000628845/WN_snfu-ZhzQKeB6CZSw1yHuA#/registration

'Should my investment strategy change during a recession?' — https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-investing-strategy-during-a-recession/

C.D. Howe Institute Business Cycle Council — https://www.cdhowe.org/council/business-cycle-council

Episode 171: Prof. Campbell R. Harvey — https://rationalreminder.ca/podcast/171

'Conditional Skewness in Asset Pricing Tests' — https://www.jstor.org/stable/222452

'… and the Cross-Section of Expected Returns' — https://faculty.fuqua.duke.edu/~charvey/Research/Published_Papers/P118_and_the_cross.PDF 

Huston Loke — https://www.fsrao.ca/about-fsra/leadership/huston-loke

Huston Loke on LinkedIn — https://www.linkedin.com/in/hloke/

Jordan Solway — https://www.fsrao.ca/about-fsra/leadership/jordan-solway

Jordan Solway on LinkedIn — https://www.linkedin.com/in/jordan-solway-4a261314/

Financial Services Regulatory Authority of Ontario (FSRA) — https://www.fsrao.ca/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/

Mark McGrath on X — https://twitter.com/MarkMcGrathCFP   Mark McGrath on Calendly — https://calendly.com/mark_mcgrath/

Episode 61: Ted Seides — https://rationalreminder.ca/podcast/61

Ted Seides on LinkedIn — https://www.linkedin.com/in/tedseides

Ted Seides on Twitter — https://twitter.com/tseides

Capital Allocators — https://www.capitalallocators.com/

Tim Hale on LinkedIn — https://www.linkedin.com/in/tim-hale-4b67ba24/

Life on Our Planet — https://www.imdb.com/title/tt23181388/

The Behavioral Divide Podcast — https://podcasts.apple.com/us/podcast/the-behavioral-divide-with-hal-hershfield/id1713168854

Episode 278: Juhani Linnainmaa — https://rationalreminder.ca/podcast/278

 

Books From Today's Episode:

 Smarter Investing — https://www.amazon.com/Smarter-Investing-Simpler-Decisions-Results/dp/0273722077

Albion Strategic Consulting — https://albionstrategic.com/

Winning the Loser's Game – https://www.amazon.com/Winning-Losers-Game-Seventh-Strategies/dp/1259838048

Tightwads and Spendthrifts — https://www.amazon.com/Tightwads-Spendthrifts-Navigating-Minefield-Relationships/dp/1250280079

Clear Thinking — https://www.amazon.com/Clear-Thinking-Turning-Ordinary-Extraordinary/dp/0593086112

Strangers in Paradise — https://www.amazon.com/Strangers-Paradise-Families-Wealth-Generations/dp/0615894356/

Wealth 3.0 — https://www.amazon.com/Wealth-3-0-Future-Family-Advising/dp/B0C9SHFSGM
Same as Ever — https://www.amazon.com/Same-Ever-Guide-Never-Changes/dp/0593332709/

 

If you dive deep into financial advisor fixed effects, you'll begin to understand that an advisor's own portfolio has a bigger impact on the portfolios of their clients than the characteristics of the clients themselves. To help us make sense of this and to further explain financial values and the cross-section of returns, we are joined by the influential and notorious Professor of Finance, Juhani Linnainmaa. Our conversation begins with a comprehensive analysis of financial values, including a comparison between the trading patterns of advisors and those of their clients, a disquisition of misguided beliefs, an examination of client characteristics, and the ins and outs of portfolio variation and customizations. Canada recently adopted regulations from the Mutual Fund Dealers Association (MFDA), and we discuss how this has affected the use of financial advice in the country before comparing the benefit of increased equity share to the cost of advice, what hiring a new advisor before a financial crisis may mean for clients, and the role of regulation in the industry. We end with the cross-section of returns by examining accounting-based anomalies pre-1963, how profitability and investment relate to data mining, why a financial firm would switch between growth and value, and finally, Professor Juhani Linnainmaa's definition of success.  

 

Key Points From This Episode:

(0:00:42) A very warm welcome to the influential Professor of Finance, Juhani Linnainmaa. 

(0:03:52) Comparing the trading patterns of advisors to those of their clients. 

(0:08:45) How regulators can go about addressing misguided beliefs. 

(0:11:08) Client characteristics that advisors base portfolio customizations on. 

(0:13:22) Whether the variation in a client's portfolio can be explained by their characteristics. 

(0:14:49) Explaining the remaining variation in portfolios. 

(0:19:38) Other reasons for the high cost of advising, aside from portfolio customization. 

(0:22:03) How the adoption of the MFDA affected the use of financial advice in Canada.

(0:26:03)  Comparing the benefit of increased equity share to the cost of advice.

(0:31:45) How getting a new advisor before the financial crisis affects ongoing investments.

(0:35:46) The role of regulation.

(0:37:47) Getting into the cross-section of returns with accounting-based anomalies pre-'63.

(0:40:51) Weather profitability and investment are data-mined factors.

(0:44:05) The optimal X-anti mix of factors in a portfolio.

(0:46:56) The mechanisms that cause firms to move between growth and value.

(0:56:31) Professor Juhani's definition of success.

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. 

Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Juhani Linnainmaa — http://jlinnainmaa.com/ 

Juhani Linnainmaa on LinkedIn — https://www.linkedin.com/in/juhani-linnainmaa-832134194/ 

Juhani Linnainmaa on Facebook — https://www.facebook.com/juhani.linnainmaa/ 

Tuck School of Business — https://www.tuck.dartmouth.edu/  

Kepos Capital — https://www.keposcapital.com/ 

Chicago Booth School of Business — https://www.chicagobooth.edu/ 

National Bureau of Economic Research — https://www.nber.org/ 

UCLA Anderson School of Management — https://www.anderson.ucla.edu/ 

Aalto University — https://www.aalto.fi/en  

Mutual Fund Dealers Association — https://mfda.ca/  

Michael Roberts on LinkedIn — https://www.linkedin.com/in/prof-michael-r-roberts/ 

During this episode, Financial Advisor and Associate Portfolio Manager Phil Briggs joins us to discuss the 'cash wedge' financial strategy. He also shares his motivation for joining PWL Capital after kicking off his career in the banking industry. Next, Mark McGrath unpacks the four D's of tax planning and how to implement them in your future planning. We review a much-loved past episode featuring Dr. William Bernstein and unpack the principles taught in Seth Godin's latest book, The Song of Significance. During the aftershow, you'll hear about our recent explorations in the world of infinite banking, Admired Leadership, and more. In closing, we share some of our favourite reviews from guests all over the world and offer a glimpse of what's to come in upcoming conversations. Thanks for listening! 

 

Key Points From This Episode:

 

(0:02:19) Phil's introduction to financial services and his decision to join PWL.

(0:07:06)The role of the podcast in helping Philip to take the plunge and leave his role at the bank. 

(0:09:35) What the 'cash wedge' strategy is and how it supports financial planning for retirement. 

(0:22:41) Stress-testing financial plans using the Monte Carlo simulation. 

(0:25:10) Mark McGrath joins the show for this episode's Mark-to-Market segment.

(0:29:54) Assessing which category RSPs fit into.

(0:32:02) Past episode review: episode 108 with Dr. William Bernstein. 

(0:34:22) Reviewing Seth Godin's book, The Song of Significance. 

(0:29:11) Seth's principles on the road to significance.

(0:39:53) The aftershow: infinite banking, Admired Leadership, and more.

(0:42:43) Reviews from Canada, Australia, San Francisco, and beyond.

(0:47:44) A teaser for two upcoming episodes.

 

Books From Today's Episode:

The Song of Significance — https://www.amazon.com/Song-Significance-New-Manifesto-Teams/dp/0593715543

The Four Pillars of Investing — https://www.amazon.com/Four-Pillars-Investing-Second-Portfolio/dp/1264715919/

The Wealthy Barber — https://www.amazon.com/Wealthy-Barber-Updated-3rd-Commonsense/dp/0761513116

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Philip Briggs on LinkedIn — https://www.linkedin.com/in/phillip-briggs-cfp%C2%AE-cim%C2%AE-362436125/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/

'Sustainable Withdrawal Rates from Retirement Portfolios' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1969021

Megan McCoy on LinkedIn — https://www.linkedin.com/in/megan-mccoy-phd/

Episode 108 — https://rationalreminder.ca/podcast/108

Episode 226 — https://rationalreminder.ca/podcast/226

Episode 217 — https://rationalreminder.ca/podcast/217

If you're in the world of finance, you'd know today's guest from YouTube — but you've probably never heard his real name. However, today and for the first time, he chooses to associate his actual identity with his YouTube channel! It's an honour to introduce to you, Mr. How Money Works himself, Darin Soat. On his YouTube channel, Darin combines captivating storytelling with high-quality, sensible information that helps you to make better financial decisions.  Today, he joins us to explain How Money Works, why he chose to create his channel anonymously, and how he feels after his grand reveal. He describes how his channel informed his career as an investment banker, and gives us his insider breakdown of how influencer businesses work. Then, we dive deep into YouTube as we explore the problems with today's financial influencers (finfluencers), how these problems are carried through to the crypto market, why it's rare to find high-quality financial information on YouTube, and everything you need to know about the gamification of investing, creating passive income, and the ins and outs of investing from the perspective of one of YouTube's top finfluencers, Darin Soat! 

 

Key Points From This Episode:

• We're thrilled to reveal the real identity behind How Money Works – Darin Soat! (0:00:42)
• Darin's professional background. (0:01:41)
• A thorough description of How Money Works, straight from the source. (0:04:33)
• Exploring Darin's background in investment banking. (0:07:08)
• How he chooses content for his YouTube channel. (0:11:05)
• Why he created his channel anonymously, and how he feels after his reveal. (0:12:54)
• How his channel impacted his work while he was still in investment banking. (0:14:54)
• Darin's summation of how influencer businesses work. (0:17:00)
• The problems with today's financial influencers on YouTube. (0:21:17)
• How the aforementioned problems relate to the crypto market. (0:27:11)
• His criteria for selecting sponsors for How Money Works. (0:32:03)
• Why high-quality personal financial information is rarely seen on YouTube. (0:33:45)
• Darin's advice on side hustles and creating passive income. (0:36:25)
• How financial influencers and the gamification of investing affect real-world investors. (0:40:11)
• What everyone needs to know about investing, according to Darin. (0:50:38)

 

Links From Today's Episode:

Darin Soat on X — https://twitter.com/DarinSoat 

How Money Works — https://www.youtube.com/@HowMoneyWorks   

How Money Works on X — https://twitter.com/howmoneyworksyt 

Compounded Daily — https://www.compoundeddaily.com/  

How History Works — https://www.youtube.com/channel/UCb9mpGh9PQjFXOG_irzrFoA  

Google AdSense — https://adsense.google.com/start/ 

The Index Card — https://www.amazon.com/Index-Card-Personal-Finance-Complicated/dp/1591847680  

Dumb Money — https://www.imdb.com/title/tt13957560/ 

MrBeast on YouTube — https://www.youtube.com/@MrBeast  

Patrick Boyle on YouTube — https://www.youtube.com/@PBoyle 

'Reasons to Avoid Index Funds' — https://www.youtube.com/watch?v=fvGLnthJDsg 

Robinhood Crypto — https://robinhood.com/us/en/about/crypto/ 

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

In this episode, we welcome back Hal Hershfield, Associate Professor of Marketing and Behavioral Decision Making at UCLA Anderson School of Management. Hal is renowned for his pioneering work in understanding how individuals make financial decisions, and he shares invaluable insights that can help us navigate the complexities of financial planning. In our conversation, live from Future Proof, we explore the intersection of behavioural economics, financial decision-making, and the potential for AI to enhance financial advisory services through the lens of Hal's latest research findings. We explore framing insurance decisions, the impact of generative AI on financial choices, and the often-overlooked realm of end-of-life decisions. Discover why the key to success lies in understanding different consumer segments, how advisors can optimize the frequency of client meetings, and how clients and advisors should be working together. We also unpack the importance of personalized decisions, the value of a decision-making journal, the framework for making the right financial choice, and much more. Tune in to gain valuable insights into behavioural economics, consumer preferences, and the evolving financial planning landscape with Hal Hershfield!

 

Key Points From This Episode:

 

(0:02:41) Hal shares his motivation for writing the paper and why the topic of financial decision-making is so vital to understand. 

(0:04:28) An overview of our current understanding of financial decision-making and interesting findings from the latest work on the subject. 

(0:09:00) How to leverage the current knowledge of financial decision-making to your benefit. 

(0:10:27) Opportunities for the industry to improve, both in academia and industry. 

(0:15:09) Characterizing the framework for conceptualizing financial decisions, from decision-making to the consequences. 

(0:18:13) The biggest gaps and opportunities for future research and the value of writing and maintaining a decision journal. 

(0:22:33) The potential of AI to influence financial decision-making, and an example of an exciting use-case. 

(0:26:31) Exploring the role of human financial advisors in an AI-dominated world. 

(0:29:56) Insights into the steps for a client and advisory firm to work together effectively. 

(0:34:07) What area of research in behavioural finance excites Hal the most. 

(0:36:23) Bridging the gap between industry and academia. 

 

 

Links From Today's Episode:

 

Future Proof Festival 2023 — https://futureproof.advisorcircle.com/

Advisor Circle — https://www.advisorcircle.com/

Hal Hershfield — https://www.halhershfield.com/

Hal Hershfield on X — https://twitter.com/HalHershfield

Hal Hershfield on LinkedIn — https://www.linkedin.com/in/hal-hershfield-a2b91510/

Episode 141: Hal Hershfield — https://rationalreminder.ca/podcast/141

Episode 256: Hal Hershfield — https://rationalreminder.ca/podcast/256

Your Future Self — https://www.amazon.com/Your-Future-Self-Tomorrow-Better-ebook/dp/B0BH4LL53X

'Consumer Financial Decision Making: Where We've Been and Where We're Going' — https://www.journals.uchicago.edu/doi/full/10.1086/727194

Poruz Khambatta on LinkedIn — https://www.linkedin.com/in/poruz/

Writing for Busy Readers — https://www.amazon.com/Writing-Busy-Readers-Communicate-Effectively/dp/0593187482

'Behavioural science is unlikely to change the world without a heterogeneity revolution' — https://www.nature.com/articles/s41562-021-01143-3

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

 

In this episode, we are joined by Elie Hassenfeld, Co-Founder and CEO of GiveWell to discuss how data, transparency, and moral trade-offs can guide charitable giving with maximum impact. Elie brings his background in finance and philosophy to the world of global philanthropy—explaining how GiveWell rigorously evaluates programs to determine which ones save or improve lives most effectively. We explore how GiveWell assesses cost-effectiveness, why transparency is a core organizational value, and how moral weights shape grantmaking priorities. Elie also opens up about the challenges of running a high-stakes nonprofit that directs nearly $400 million annually, why global health interventions are often overlooked by traditional donors, and how they navigate philosophical dilemmas like saving a life versus doubling someone's income. This conversation blends finance, ethics, and effective altruism into a compelling framework for anyone who wants to do the most good with their giving.

 

Key Points From This Episode:

 

(0:01:00) Why charitable giving is a financial decision—and why it deserves evidence-based thinking.

(0:02:20) GiveWell's mission: Using rigorous research to direct donor funds where they'll do the most good.

(0:03:44) How Elie's frustration with vague charity claims led him to co-found GiveWell in 2007.

(0:08:35) The scope of impact: GiveWell's 80-person team now directs ~$395M annually.

(0:10:43) The weight of responsibility: Why directing hundreds of millions of dollars is both gratifying and stressful.

(0:12:22) Radical transparency: Publishing internal debates and mistakes as a matter of principle.

(0:13:06) GiveWell's core values: Maximize impact, transparency, truth-seeking, and deep consideration.

(0:16:25) How GiveWell differs from traditional charity evaluators (like those focused on overhead ratios).

(0:18:15) The business model: GiveWell is a nonprofit funded by donors—no cut taken from giving funds.

(0:21:20) Who gives: A mix of finance and tech professionals across the U.S., Canada, and the UK.

(0:22:16) EA and SBF: How distancing from the effective altruism label insulated GiveWell from the fallout.

(0:24:04) GiveWell's four criteria for evaluating programs: Evidence, cost-effectiveness, room for more funding, and transparency.

(0:29:45) How GiveWell identifies top charities—through academic research, NGO outreach, and sector immersion.

(0:31:07) Current top charities: Against Malaria Foundation, Malaria Consortium, Helen Keller Intl, and New Incentives.

(0:34:31) Why GiveWell shifted to global poverty after early comparisons showed massive cost-effectiveness differences.

(0:39:24) Why the cost to save a life is higher than people think—nets don't reach everyone, and malaria risk is probabilistic.

(0:43:27) How GiveWell measures "good": lives saved, health improved, income increased—standardized into one metric.

(0:46:47) Moral weights matter: Why GiveWell equates saving a life with doubling 100 families' income.

(0:50:37) Where moral weights come from: surveys, literature, and direct community input from Kenya and Ghana.

(0:53:44) Letting donors tweak the model: Tools exist to adjust for your personal moral priorities.

(0:54:57) Do top charities cannibalize each other's impact? (Spoiler: Not really.)

(0:56:20) Capacity assessment: How GiveWell determines how much money an organization can productively absorb.

(1:00:15) Why even on-the-ground observations (like chlorine testing methods) shape their assessments.

(1:01:27) Why evidence matters—especially when trying to help people you'll never meet.

(1:03:55) Elie's personal definition of success: Deep relationships, personal growth, and demonstrable impact.

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind

Rational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca

Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://pwlcapital.com/our-team/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

 

In this episode, we are trying something different. Recorded live at the CFA Society's Toronto Annual Wealth Conference, we take an exclusive look at the origins and evolution of the Rational Reminder Podcast through an interview with Ben and Cameron. From motivations for starting the podcast to favourite episodes and guests, we delve into the behind-the-scenes of the show. Discover how the podcast has grown, the impact it's had on listeners, and the exciting global reach it's achieved. Get an exclusive look at the challenges, regrets, and valuable lessons learned along the way. Then, we are joined by Mark McGrath to explore common pitfalls of ITF accounts, providing listeners with valuable information to help them make the right decisions for their investments. Finally, we welcome special guest Brittany Hodak, author of Creating Superfans, which unpacks the concept of turning customers into passionate fans of your brand. Brittany shares her insights on the power of storytelling in business and how to create Superfans who will champion your brand. We explore the concept of the experience economy, the right approach to investing in marketing for your business, and much more! Join us for this extraordinary episode that blends wealth management insights, podcasting wisdom, and the secrets to cultivating Superfans. Whether you're a long-time Rational Reminder listener or a business owner seeking to supercharge customer loyalty, this episode has something for everyone. Tune in now!

 

Key Points From This Episode:

 

(0:04:32) Introduction to Ben and Cameron's interview at the 2023 Annual Wealth Conference. 

(0:07:15) Learn about the average listener base for the show, the active Rational Reminder community, and how the podcast has grown over time. 

(0:10:08) The global reach of the podcast, how it has benefitted business, and a look back at the first episode of Rational Reminder. 

(0:13:19) What Ben and Cameron originally envisioned, how they met, and what motivated them to start a podcast. 

(0:15:17) Insights into the cost of the show, the shift from audio only, and the appetite for long-form content. 

(0:18:18) Their favourite episodes and guests, keeping content balanced, and how the reading challenge was started. 

(0:25:25) Attracting big industry names to the podcast, their dream guests, and the episodes that did not go to plan. 

(0:31:28) Advice for aspiring podcasters, the amount of work the show takes, and their biggest lessons so far. 

(0:37:02) Ben and Cameron share their reading habits and the books they think everyone should read and why. 

(0:40:14) Why they work so well together, plans for the future, and what they wish they knew before starting the podcast. 

(0:43:14) Ben and Cameron each share their definition of success, and final words of advice for listeners. 

(0:45:46) Mark to Market: exploring the ins and outs of ITF accounts to avoid common mistakes.

(0:55:04) Introducing today's guest, Brittany Hodak, and her fascinating book, Superfans. 

(0:56:51) Brittany explains some basic definitions and the power of storytelling for your business. 

(0:59:50) Why storytelling has become a potent marketing technique, and why Superfans are important to building a successful business. 

(1:02:53) Unpacking the Superfan personality, how they can be created, and identifying your customer's story. 

(1:08:47) Defining the experience economy and its impact on customer expectations. 

(1:12:38) Recommendations for how businesses should approach investing in marketing. 

(1:14:11) The after-show: trip highlights, listener reviews, and more! 

 

Books From Today's Episode:

The Fiscal Theory of the Price Level — https://www.amazon.com/Fiscal-Theory-Price-Level/dp/0691242240

How to Change — https://www.amazon.com/How-Change-Science-Getting-Where/dp/059308375X

Get It Done — https://www.amazon.com/Get-Done-Surprising-Lessons-Motivation/dp/0316538361/

Your Future Self — https://www.amazon.com/Your-Future-Self-Tomorrow-Better/dp/B0BJ554T6M/

Like the Best Podcast — https://open.spotify.com/show/22fi0RqfoBACCuQDv97wFO

Deep Work — https://www.amazon.com/Deep-Work-Focused-Success-Distracted/dp/1455586692

Storyworthy — https://www.amazon.com/Storyworthy-Engage-Persuade-through-Storytelling/dp/1608685489

Financial Market History — https://www.amazon.com/Financial-Market-History-Reflections-Investors-ebook/dp/B06WVBHK72/

The Great Depression: A Diary — https://www.amazon.com/The-Great-Depression-audiobook/dp/B0030HF9F6/

Using Behavioral Science in Marketing — https://www.amazon.com/Using-Behavioral-Science-Marketing-Instinctive/dp/1398606685/

Clear Thinking — https://www.amazon.com/Clear-Thinking/dp/0593716213

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on X — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on X — https://twitter.com/benjaminwfelix

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on X - https://twitter.com/MarkMcGrathCFP

Mark McGrath on LinkedIn - https://www.linkedin.com/in/markmcgrathcfp/

Brittany Hodak — https://brittanyhodak.com/

Brittany Hodak on X — https://twitter.com/BrittanyHodak

Brittany Hodak on Instagram — https://www.instagram.com/brittanyhodak/

Brittany Hodak on Facebook — https://www.facebook.com/BrittanyHodak

Brittany Hodak on LinkedIn — https://www.linkedin.com/in/brittanyhodak/

Creating Superfans — https://www.amazon.com/Creating-Superfans-Five-Step-Multiplying-Reputation/dp/1774580780

Annual Wealth Conference 2023 — https://web.cvent.com/event/874a7379-a0cb-4b91-ad18-c46daf17b685/summary

Rational Reminder Episode 1: The Cheapest Advice Probably isn't the Best — https://rationalreminder.ca/podcast/1

Rational Reminder Episode 100: Prof. Kenneth French — https://rationalreminder.ca/podcast/100

Rational Reminder Episode 169: Prof. John Cochrane — https://rationalreminder.ca/podcast/169

Rational Reminder Episode 171: Prof. Campbell R. Harvey — https://rationalreminder.ca/podcast/171

Rational Reminder Episode 200: Prof. Eugene Fama — https://rationalreminder.ca/podcast/200

Rational Reminder Episode 224: Prof. Scott Cederburg — https://rationalreminder.ca/podcast/224

Rational Reminder Episode 226: Colonel Chris Hadfield — https://rationalreminder.ca/podcast/226

Rational Reminder Episode 268: Itzhak Ben-David — https://rationalreminder.ca/podcast/268

Rational Reminder Episode 271: Expected Returns of the AI Revolution (plus People are Lying to You About Money w/ Anthony Walsh) — https://rationalreminder.ca/podcast/271

Today's episode is an exhilarating journey into the captivating realms of finance and human behaviour with Professor Samuel Hartzmark, who takes centre stage to explore the complex intersection of asset pricing and behavioural finance. Professor Hartzmark's career and academic journey are nothing short of inspiring. With a double major in mathematics and economics, a prestigious MBA from the University of Chicago Booth School of Business, and a Ph.D. from the University of Southern California's Marshall School of Business, he has paved a remarkable path through the world of academia. Our conversation takes a deep dive into his groundbreaking research, where he dissects complex financial topics with astonishing clarity. We delve into some of his most-cited papers, including those on dividends and sustainable investing, which consistently reveal counterintuitive conclusions that challenge conventional wisdom. We unpack price-only index returns, dividend juicing, price-only data, the value of sustainability rankings, and the power of capital to make the world a better place. And don't miss our exploration of multi-factor asset pricing, where Samuel's unique perspective sheds new light on these models in the context of human behaviour. This episode promises an enlightening and engaging conversation that investors and finance enthusiasts alike won't want to miss!

 

Key Points From This Episode:

 

(0:03:48) Morningstar's sustainability rating system and its impact on the flow of mutual funds. 

(0:07:35) Choosing sustainability ratings over other metrics and how they motivate investors. 

(0:16:24) What drives the behaviour of mutual fund investors toward green firms. 

(0:18:17) Unpacking the concept of sustainable investing and how impact elasticity is relevant. 

(0:23:15) Insights into the impact elasticity differences between brown and green firms. 

(0:26:40) The divestment of brown firms and ESG integration. 

(0:28:58) Unlocking the power of investor capital to shift toward a green economy. 

(0:32:57) Price returns versus dividend returns from a behavioural finance perspective.

(0:39:05) Whether dividends are a safe hedge in a volatile market. 

(0:44:26) Reasons behind the demand  for dividends and how it impacts expected returns. 

(0:47:55) Ways mutual funds exploit the preferences of dividend investors. 

(0:50:52) Dividend juicing and the overall cost to investors. 

(0:53:21) Advice and recommendations for dividend-loving investors. 

(0:54:53) Diving into data preferences: unveiling the prevalence of price-only index usage. 

(0:58:09) How price-only data reliance affects media coverage of the market and fund flows. 

(1:02:17) Investor expectations regarding price-only index funds and how to avoid the pitfalls. 

(1:05:23) Varied asset returns and understanding people's asset allocation motivations. 

(1:10:54) What survey results tell us about asset pricing. 

(1:13:12) Examining implications of portfolio tilting towards priced risk. 

(1:18:56) Professor Hartzmark's version of success and happiness. 

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-273-professor-samuel-hartzmark-asset-pricing-behavioural-finance-and-sustainability-rankings-discussion-thread/25457

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on X — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on X — https://twitter.com/benjaminwfelix

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on X - https://twitter.com/MarkMcGrathCFP

Mark McGrath on LinkedIn - https://www.linkedin.com/in/markmcgrathcfp/

Professor Samuel Hartzmark — https://www.samhartzmark.com/

Professor Samuel Hartzmark Email — samuel.hartzmark@bc.edu

Professor Samuel Hartzmark on X — https://twitter.com/SamHartzmark

Professor Samuel Hartzmark on LinkedIn — https://www.linkedin.com/in/sam-hartzmark-b21bb127/

Professor Samuel Hartzmark on Google Scholar — https://scholar.google.com/citations

Boston College — https://www.bc.edu/

Morningstar — https://www.morningstar.com/

Sustainalytics — https://www.sustainalytics.com/

Episode 192: Professor Alex Edmans — https://rationalreminder.ca/podcast/192

'Counterproductive Sustainable Investing: The Impact Elasticity of Brown and Green Firms' — https://dx.doi.org/10.2139/ssrn.4359282

'Do Investors Value Sustainability? A Natural Experiment Examining Ranking and Fund Flows' — https://dx.doi.org/10.2139/ssrn.3016092

Travelers Insurance — https://www.travelers.com/

'Reconsidering Returns' — https://dx.doi.org/10.2139/ssrn.3039507

'A New Test Of Risk Factor Relevance' — https://dx.doi.org/10.2139/ssrn.3487624

 

In this episode, we welcome back one of Canada's most trusted and widely read financial experts to discuss the state of Canadian personal finance. Rob Carrick is a columnist for The Globe and Mail, where he has brought his boots-on-the-ground perspective to readers for more than 20 years. He also co-hosts the Stress Test Podcast, where regular Canadians offer real-life perspectives on the biggest stress tests that their personal finances face in the wake of COVID-19. Tuning in, you'll find out which issues are at the forefront of Rob's readers' lives. Next, he shares his perspective on GICs and ETFs and draws a comparison between affordable housing today and the mutual fund market of 20 to 30 years ago. We talk about the lack of comprehensive advice that Canadians are receiving from their planners, the state of affordable housing in the country, and why so many Canadians say they are giving up on home ownership altogether. We also compare housing returns to the stock market and discuss successfully using a reverse mortgage, the non-financial challenges faced by retirees, and more. For a comprehensive overview of the state of personal finance in Canada (and some practical advice for protecting yourself and prospering in a challenging economy), don't miss today's episode!

 

Key Points From This Episode:

 

(0:00:19) Introducing today's returning guest, Rob Carrick. 

(0:02:38) Issues at the forefront of Rob's readers' lives today. 

(0:04:02) His perspective on GICs, ETFs, and simplification. 

(0:09:33) Comparing today's EFT Market with the mutual fund market of 20 to 30 years ago. 

(0:15:24) The lack of comprehensive advice Canadians are receiving from their planners.

(0:20:03) Rob's perspective on affordable housing, as outlined in his Globe and Mail article. 

(0:24:52) Why a growing number of adults continue to live with their parents into adulthood. 

(0:28:48) Reasons that many Canadians say they are "giving up on home ownership." 

(0:31:44) Housing returns in comparison to the stock market. 

(0:35:13) Successfully using a reverse mortgage. 

(0:37:28) Some of the non-financial challenges faced by retirees. 

(0:41:06) The number of parents supporting their adult children today. 

(0:45:03) How adult children are pitching in to support their parents.

 0:49:06) Rob's advice for educating the next generation on financial planning.

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on X — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on X — https://twitter.com/benjaminwfelix

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on X - https://twitter.com/MarkMcGrathCFP

Mark McGrath on LinkedIn - https://www.linkedin.com/in/markmcgrathcfp/

Rob Carrick — http://robcarrick.ca/

Rob Carrick on X — https://twitter.com/rcarrick 

Rob Carrick Email — carrick@globeandmail.com

Stress Test Podcast — https://www.theglobeandmail.com/stress-test/

Carrick on Money — https://www.theglobeandmail.com/carrick-on-money/

The Globe and Mail — https://www.theglobeandmail.com/

'Young adults are giving up on home ownership, and a lot of them are furious about it' — https://www.theglobeandmail.com/investing/personal-finance/article-young-adults-are-giving-up-on-home-ownership-and-a-lot-of-them-are/

How Not to Move Back in With Your Parents – https://www.amazon.com/How-Move-Back-Your-Parents/dp/038567192X

Wealthsimple — https://www.wealthsimple.com/

Episode 39 — https://rationalreminder.ca/podcast/39

Episode 172 — https://rationalreminder.ca/podcast/172

 

AI is not new and financial mis-education is rife. These are two ideas that form the foundation of this episode, which features insights from Ben Felix, Mark McGrath, and guest speaker Anthony Walsh. To start our conversation, we explore the history of artificial intelligence and what it might mean for the future and beyond. During this Mark to Market segment, Mark McGrath shares his experience of owning property and becoming a landlord before we look back on Episode 155 with Don Ezra, where he revealed his thoughts on planning for life after work. Anthony Walsh, author of People Are Lying To You About Money joins us to discuss his efforts to remedy the lack of financial literacy among everyday people, how he approaches financial planning as a risk-averse person, and his move from lean FI to Coast Fi. He also shares his thoughts on the relative value of money, the importance of planning according to financial wellness and health, and more. Join us today to hear all this and so much more! 

 

Key Points From This Episode:

 

• (0:04:07) The cycles of AI development, excitement, and disappointment in technological history.

• (0:15:01) How technology bubbles impact investors and why investing in revolutionary technology is a questionable strategy. 

• (0:18:50) The paradox of skill and how it applies to investment strategy. 

• (0:23:40) Mark to Market Segment with Mark McGrath on real estate and rentals. 

• (0:34:50) Looking back on Episode 155 with Don Ezra on planning for life after work. 

• (0:37:03) Introducing today's guest: Anthony Walsh, who wrote People Are Lying To You About Money. 

• (0:40:17) Four types of lies people tell about money and why most people are financially illiterate. 

• (0:48:46) How Anthony navigates financial planning as a risk-averse person. 

• (0:53:25) What motivated his move from Lean FI to Coast FI and the relative value of money. 

• (0:55:10) The importance of planning according to financial wellness and health. 

• (0:57:19) The after-show; shows and series your hosts have been watching and a book recommendation. 

 

Books From Today's Episode:

Irrational Exuberance — https://www.amazon.com/Irrational-Exuberance-3rd-Robert-Shiller-dp-0691166269/dp/0691166269/

People Are Lying To You About Money — https://www.amazon.com/People-Are-Lying-About-Money-ebook/dp/B0BC9M5QQT

Bubbles and Crashes — https://www.amazon.com/Bubbles-Crashes-Boom-Technological-Innovation/dp/0804793832

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/
Shop Merch — https://shop.rationalreminder.ca/
Join the Community — https://community.rationalreminder.ca/
Follow us on X — https://twitter.com/RationalRemind
Follow us on Instagram — @rationalreminder
Benjamin on X — https://twitter.com/benjaminwfelix
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Mark McGrath on X - https://twitter.com/MarkMcGrathCFP
Mark McGrath on LinkedIn - https://www.linkedin.com/in/markmcgrathcfp/
Anthony Walsh on LinkedIn — https://www.linkedin.com/in/asw383/
Episode 155 — https://rationalreminder.ca/podcast/155
Episode 268 — https://rationalreminder.ca/podcast/268
Episode 244 — https://rationalreminder.ca/podcast/244
Reasons to Avoid Index Funds — https://www.youtube.com/watch?v=fvGLnthJDsg

If the wealthiest families of the past century spent a reasonable amount of their wealth, invested in the stock market, and paid taxes, there would be thousands of billionaires today. But there aren't. So, what happened? To answer this question, we are joined by authors and finance professionals, Victor Haghani and James White. Their recently released book, The Missing Billionaires: A Guide to Better Financial Decisions, uses the missing billionaires puzzle to explore how and why most investors fail to capture the returns offered by the market. Victor was a founding partner of Long-Term Capital Management (LTCM), the multi-billion-dollar hedge fund that famously collapsed in 1998 and nearly took the global financial markets down with it. His participation in the downfall of LTCM led him to reassess much of the way he thought about investing, and in this episode, he shares some simple but powerful frameworks and personal finance recommendations. We also receive accessible explanations of the Merton model and expected utility theory from James, take a deep dive into dynamic asset allocation, discuss optimal solutions for lifetime spending, and learn more about the certainty equivalent return and Sharpe ratios, plus so much more. Whether you're an entrepreneur invested in your own business or simply focused on building long-term wealth, Victor and James' book (and this conversation about it) will be a valuable resource for better financial decision-making, so be sure to tune in today!

 

Key Points From This Episode:

 

• (0:05:19) The puzzle of the missing billionaires (and why it matters to Victor and James). 

• (0:09:45) Some common but critical financial decision-making problems most people face. 

• (0:12:39) Unpacking the coin-flipping experiment in their 'What's Past is Not Prologue' paper. 

• (0:19:57) What investors should aim to maximize when sizing positions in risky assets. 

• (0:24:22) An example that illustrates how the Merton model relates to bullish bets. 

• (0:29:04) What the Merton share tells us about dynamic asset allocation if it is or isn't possible to estimate expected equity returns. 

• (0:35:29) How real expected returns affect optimal risky shares for long-term investors. 

• (0:37:29) Different ways to forecast volatility to determine the optimal risky share. 

• (0:42:00) Easy-to-understand definitions of the utility curve and expected utility theory. 

• (0:50:20) Using the certainty equivalent return and Sharpe ratio to evaluate investments. 

• (0:57:56) Whether or not options belong in the portfolios of typical retail investors. 

•  (0:59:01) If expected utility is a good model for normative personal finance recommendations.

• (1:05:16) How Victor's experience with LTCM affected him, both professionally and personally. 

• (1:09:08) What optimal solutions for lifetime investing and spending look like. 

•  (1:22:22) Questions to ask yourself to work out your own utility function and risk aversion.

• (1:28:19) Victor and James' parting financial advice and respective definitions of success. 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-270-what-happened-to-all-the-billionaires-with-victor-haghani-and-james-white/25122

Books From Today's Episode:

The Missing Billionaires – https://www.amazon.com/Missing-Billionaires/dp/1119747910

Stumbling on Happiness — https://www.amazon.com/Stumbling-Happiness-Daniel-Gilbert/dp/1400077427

The Man Who Solved the Market – https://www.amazon.com/Man-Who-Solved-Market-Revolution/dp/B07P1NNTSD

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on X — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on X — https://twitter.com/benjaminwfelix

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Victor Haghani on LinkedIn — https://www.linkedin.com/in/victorhaghani/

James White on LinkedIn — https://www.linkedin.com/in/james-white-b4310a47/

Elm Wealth — https://elmwealth.com/

When Genius Failed — https://www.amazon.com/When-Genius-Failed/dp/0375758259/

Where are all the Billionaires?: Victor Haghani at TEDxSPS – https://youtu.be/1yJWABvUXiU

'What's Past is Not Prologue' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3034686

'Lifetime Portfolio Selection under Uncertainty: The Continuous-Time Case' – https://www.jstor.org/stable/1926560

'Stock Prices, Earnings, and Expected Dividends' – https://www.jstor.org/stable/2328190

'No Place to Hide: Investing in a World With No Risk-Free Asset' – https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3903372

'Sharpening Sharpe Ratios' – https://papers.ssrn.com/sol3/papers.cfm?abstract_id=325942

'A Sharper Lens for Sizing Up Nickels and Steamrollers' – https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2874602

'Do Options Belong in the Portfolios of Individual Investors?' – https://elmwealth.com/do-options-belong-in-portfolios/

 

This week we welcome back return guest Preet Banerjee, a renowned speaker, personal finance expert, consultant, and author of Stop Overthinking Your Money. Listeners may remember Preet from his previous appearance on the show back in 2019 when he was first embarking on his doctoral journey. Several years and one pandemic later, Preet has finally made it through the monumental task of completing his dissertation! We spend today's conversation with Preet getting into the fascinating details of his research which interrogates the value of financial advice within households and explores the pressing question of whether it's worth getting it. Preet provides a comprehensive overview of the current state of financial planning and shares his most intriguing findings before unpacking the policy and regulatory recommendations that emerge from his research. The latter part of the show includes our Mark to Market segment with Mark McGrath, where this week, he delivers key insights on retirement savings plans (RSPs) and why he believes RSPs are actually tax-free. You'll also hear our reflection on our past conversation with Colonel Chris Hadfield, paired with a book review of Kevin Kelly's Excellent Advice for Living: Wisdom I Wish I'd Known Earlier. Join us for an expansive episode on the value of financial advice along with timely insights on what truly matters in life!

Key Points From This Episode:

 

• (0:03:34) Background on today's guest, Preet Banerjee, and the focus of his research: the value of financial advice to households and whether it's worth getting it. 

• (0:06:29) Key problems with past research attempting to demonstrate the value of financial advice (including the portfolio-centric advice model). 

• (0:10:47) A review of the existing literature on the value of financial advice; the gap in the literature that his research is addressing. 

•  (0:16:27) How Preet measured holistic wealth scores and comprehensive financial confidence in his research and the dataset he based his research on.

• (0:21:26) What Preet took into account to determine who were DIY investors within his sample and which advice channels they use. 

• (0:28:27) The study of financial planning, shortcomings within the field, and some of the positive developments in recent years. 

• (0:30:00) Informative takeaways regarding advice channels, investable assets, and having a financial plan. 

• (0:36:30) How Preet approached his data, the progressive regression model he developed, and what it demonstrates about key topics in his research. 

• (0:47:36) How wealth allows you to access better financial advice versus the options available to you if you're in the mass market. 

• (0:49:48) Learn about the policy and regulatory recommendations that emerge from Preet's research. 

• (0:56:04) Preet's advice to listeners and DIY investors and what's next for his research. 

• (01:05:17) Our Mark to Market segment with Mark McGrath and his insights of everything you need to know about retirement savings plans (RSPs).

• (01:18:02) A recap and review of Episode 266 where we talk with Colonel Chris Hadfield and why it's worth the listen. 

• (01:20:39) Hear our review of the book, Excellent Advice for Living: Wisdom I Wish I'd Known Earlier by Kevin Kelly. 

• (01:25:34) Our after-show section; Find out what we have coming up and how to attend our upcoming meet and greet. 

 

Join our live event "Finding and Funding a Good Life": https://us06web.zoom.us/webinar/register/8516942588679/WN_gv6EVyCCRpaXCrnWAZUrLA

 

Links From Today's Episode:

Preet Banerjee — https://www.preetbanerjee.com/

Preet Banerjee on LinkedIn — https://www.linkedin.com/in/preetbanerjee/

Preet Banerjee on X — https://twitter.com/preetbanerjee

Preet Banerjee on YouTube — https://www.youtube.com/c/preetbanerjee

Preet Banerjee at The Globe and Mail — https://www.theglobeandmail.com/authors/preet-banerjee/
Episode 53: Preet Banerjee — https://rationalreminder.ca/podcast/53

Episode 226: Colonel Chris Hadfield — https://rationalreminder.ca/podcast/226
Excellent Advice for Living: Wisdom I Wish I'd Known Earlier — https://www.amazon.com/Excellent-Advice-Living-Wisdom-Earlier/dp/0593654528
Episode 232: Dr. Annamaria Lusardi — https://rationalreminder.ca/podcast/232
Episode 188: Prof. Ayelet Fishbach — https://rationalreminder.ca/podcast/188
Episode 224: Prof. Scott Cederburg — https://rationalreminder.ca/podcast/224

Rational Reminder Continuing Education — learn.rationalreminder.ca

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Spotify — https://open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO

Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

 

For nearly 25 years, Exchange Traded Funds (ETFs) have been a popular passive investment vehicle for both household and professional investors due to their low transaction costs and high liquidity. But what are the pros and cons? How can you diversify your portfolio to avoid volatility? Today, we are joined by Professor Itzhak Ben-David, one of the world's foremost academic experts on ETFs, the Neil Klatskin Chair in Finance and Real Estate at The Ohio State University (OSU) Fisher College of Business, and the Academic Director of the OSU Center for Real Estate. In this episode, we look at the current ETF market and the impact that ETFs have on underlying securities and investor outcomes. We discuss Morningstar ratings, the change that happened in 2002, and some mind-blowing data regarding hedge fund fees. We also dive into the correlation between miscalibrated CFOs and overconfidence; the unnecessary mental accounting people do when it comes to tax refunds, and so much more. This conversation makes for an incredibly diversified overview of a variety of topics that are relevant to financial decision-making at the household level. Finance experts will certainly find value here, too! Regardless of your level of experience, tune in today to learn more.

 

Key Points From This Episode:

 

• (0:03:27) Professor Ben-David's take on the current state of the ETF market. 

• (0:07:37) Ways that investors are affected by a broader variety of ETF options. 

• (0:16:46) Advice for investors who have been lured in by a sector or thematic ETF. 

• (0:17:53) Mutual or hedge funds versus ETFs and their impact on underlying securities. 

• (0:26:38) Reflections on the behaviour of mutual fund investors (learning versus luck). 

• (0:33:01) How we can learn what investors care about from mutual fund flows. 

• (0:37:15) Why investors typically put their money where the Morningstar ratings are. 

• (0:38:46) Morningstar's rewiring of the "star" system in 2002 and its repercussions. 

• (0:48:54) The effect of Morningstar ratings on mutual fund flow and momentum. 

• (0:52:40) Hedge fund investor behaviour versus mutual fund and ETF investors. 

• (0:54:46) The "two-and-20" hedge fund fee that sets it apart from mutual funds. 

• (1:00:53) What happens after investors pull their money from a hedge fund after a loss. 

•  (1:02:19) How hedge fund incentive fees correlate with hedge fund performance.

• (1:04:09) Key lessons for investors who might be considering allocating to hedge funds. 

• (1:07:15) How people treat tax refunds differently from other income and expenses 

• (1:13:20) Defining miscalibration and the behavioural bias that overconfidence presents. 

• (1:19:26) How CFO miscalibration responds to rising market uncertainty (and how to avoid it). 

• (1:22:58) Professor Ben-David's definition of success in relation to failure. 

 

Links From Today's Episode:

 

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on X — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on X — https://twitter.com/benjaminwfelix

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Itzhak Ben-David — https://u.osu.edu/ben-david.1/

Itzhak Ben-David on LinkedIn — https://www.linkedin.com/in/ibendavi/ 

Financial Markets and Human Behavior - https://bpb-us-w2.wpmucdn.com/u.osu.edu/dist/d/7877/files/2023/08/202308_Rational_Reminder_podcast.pdf

'Do ETFs Increase Volatility?' – http://ssrn.com/abstract=1967599

'Mutual Fund Flows and Performance in Rational Markets' – https://ssrn.com/abstract=383061

'The Performance of Hedge Fund Performance Fees' – https://ssrn.com/abstract=3630723

'Paper on how people treat their tax refunds' — https://doi.org/10.1111/j.1540-6261.2007.01232.x

'Managerial Miscalibration' — http://ssrn.com/abstract=1640552

'The Persistence of Miscalibration' — https://ssrn.com/abstract=3462107

 

Today's show is centred on the expected cost of pessimism and how investor expectations of loss negatively affect financial decisions. After concisely exploring the data and literature on the subject, we get into a few solutions to this dynamic and talk about how to find a way around natural human tendencies and myopic loss aversion. We then get into our first Mark's Minutes segment, with our colleague Mark McGrath briefly explaining some interesting ideas about risk and tax-free savings accounts. For today's episode retrospective, we go over Episode 45 and the conversation we had with Moira Somers about effective communication and advice methods. Matthew Dicks, the author of Storyworthy then joins us to offer some insight into the utility of stories in the different areas of life, including financial advice, and more relaxed social settings. Matthew does a great job of describing and demonstrating how stories connect people, and allow ideas to flow in a natural and impactful way, so make sure to tune in.

 

Key Points From This Episode:

 

• Introducing the inverse relationship between subjective return expectations and expected returns. (0:02:55).  
• Potential solutions to this issue; checking investments less frequently, ignoring financial media, healthy advisor relationships, and more.  (0:15:39)
• Mark's Minutes: Mark McGrath shares some background on the TFSA and its positive and negative sides. (0:22:59)
• A quick recap of our episode with Moira Somers and its lessons on effective financial advice. (0:30:36)
• An introduction to Matthew Dicks and some thoughts on storytelling. (0:32:05)
• Matthew talks about the power of storytelling to shape the world. (0:36:35)
• Strategies for finding, crafting, and telling great stories. (0:41:45)
• Matthew weighs in using storytelling in the world of investing and financial advice. (0:48:23)
• Finding the value in your own personal data and experience. (0:52:04)
• Today's after-show: upcoming events and news from home. (0:54:40)

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-237-the-expected-cost-of-pessimism-plus-matthew-dicks-on-the-value-of-storytelling-discussion-thread/24887

Join Our Live Event:

What Are my Options with my Options? - https://us06web.zoom.us/webinar/register/3916910040743/WN_PsbTZ8CqR_SvFNdpy5oIKA

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Matthew Dicks — https://matthewdicks.com/

Storyworthy — https://matthewdicks.com/storyworthy/

Storyworthy: Engage, Teach, Persuade, and Change Your Life Through the Power of Storytelling — https://www.amazon.com/Storyworthy-Engage-Persuade-through-Storytelling/dp/1608685489

Homework for Life TED — https://matthewdicks.com/homework-for-life/ 

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp?originalSubdomain=ca

We make countless decisions throughout our lives that range from the mundane to the monumental. But how do you decide how you decide? That is the fundamental question in our esteemed guest, Cass R. Sunstein's new book Decisions about Decisions: Practical Reason in Ordinary Life. Cass currently serves as the Robert Walmsley University Professor at Harvard University and is the founder and director of the Program on Behavioral Economics and Public Policy at Harvard Law School. He is also a prolific author, with one of his most notable works being the hugely popular and impactful book, Nudge: Improving Decisions about Health, Wealth, and Happiness, which he co-wrote with Richard Thaler in 2008. In today's conversation, we sit down with Cass to discuss the difficulties inherent to understanding why people make the decisions they make and what the latest research teaches us about how we should approach decision-making to maximize our well-being. Cass provides insight into second-order thinking strategies, the difference between picking and choosing, and why delegating a particular decision is sometimes the right call. We also unpack what to consider when making major life choices, the strengths and weaknesses of algorithms when it comes to decision-making, and much more. To hear Cass's many insights on the topic of behaviour, knowledge, and decision-making, be sure to tune in!

Key Points From This Episode:

 

• The challenges of understanding why people make the decisions that they make. (0:03:38)
• Second-order decisions and why they are sometimes preferable to on-the-spot decisions. (0:04:50)
• An overview of various second-order decision strategies.  (0:06:45)
• Guidelines to help you choose which decisions to delegate and how to determine whether you have a trustworthy delegate. (0:11:28)
• What to consider when making a transformative and irrevocable life decision. (0:16:07)
• Why people avoid seeking out information that might make them feel bad, even if it could help them make better decisions. (0:21:29)
• How people decide what information to believe and when to update their beliefs. (0:28:01)
• Asymmetries in how we update our beliefs and factors that can deter people from updating their beliefs when faced with new evidence. (0:32:28)
• How joint evaluation and separate evaluation influences your decision making and which one you should use depending on the context. (0:43:12)
• Insights on well-being and what to value when you're making everyday decisions. (0:48:14)
• The strengths and weaknesses of algorithms when it comes to making decisions and what we gain when we make decisions ourselves. (0:52:38)
• Examples of when using algorithms can be harmful or dangerous. (0:59:25)
• How our decisions can be manipulated and the importance of doing due diligence. (01:01:30)
• Cass's well-known work on nudges and how nudges differ from manipulation. (01:02:59)
• Happiness, meaning, variety, and how Cass defines success in life. (1:05:50)

 

Links From Today's Episode:

 

Cass R. Sunstein — https://hls.harvard.edu/faculty/cass-r-sunstein/

Cass R. Sunstein on LinkedIn — https://www.linkedin.com/in/csunstein/

Cass R. Sunstein on on X — https://twitter.com/CassSunstein/

The Behavioural Insights Team — https://www.bi.team/

Decisions About Decisions: Practical Reason in Ordinary Life — https://www.amazon.com/Decisions-about-Practical-Reason-Ordinary/dp/1009400460

Nudge: Improving Decisions about Health, Wealth, and Happiness — https://www.amazon.com/Nudge-Improving-Decisions-Health-Happiness/dp/014311526X

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

In this episode, we tackle the timely topic of higher interest rates and their potential impact on investors' decisions. With rates soaring to unprecedented levels, many are tempted to veer off their investment paths in pursuit of short-term gains. But is this a rational choice? We break it down and offer invaluable insights into why staying the course might be the wiser option. We also welcome new PWL team member Mark McGrath. Mark possesses an innate talent for crafting concise, valuable, and captivating financial planning nuggets on social media. His content has struck a chord with the audience, evident from his rapidly expanding following. Next, we take a nostalgic trip back to one of our favourite past episodes, featuring a remarkable guest, David Booth, co-founder of Dimensional Fund Advisors. With a quick review of the episode, listeners get a refresher on Booth's sage advice and investment philosophies, reminding us all why this episode remains a standout. For the book segment, Michael Tremblay, a passionate listener, and stoicism expert, reached out to suggest an exploration of The Handbook of Epictetus. We welcome Michael to the show for an enlightening discussion on the principles of stoicism and how they can be applied to investing and everyday life.

 

Key Points From This Episode:

 

• Introducing new PWL team member, Mark McGrath. (0:02:22)

• Background about Mark and his journey to PWL Capital. (0:03:35)

• What Mark appreciates most about working at PWL: its core values. (0:08:45)

• Why cash is an extremely risky long-term investment option. (0:11:47)

• We explore 'buying the dip' and expected returns versus return expectations. (0:24:31)

• Highlights and key takeaways from our conversation with David Booth. (0:29:07)

• The Handbook of Epictetus and devoted listener Michael Tremblay's background. (0:31:22)

• Stoicism basics, who Epictetus was, and the key idea behind the philosophy. (0:33:30)

• How stoicism can benefit everyday investors. (0:36:09)

• A breakdown of the various 'tools'  and practices The Stoics developed. (0:39:26)

• Similarities Stoicism has with the rational reminder approach to investing. (0:43:07)

• Making the distinction between what is in your control and what is not. (0:46:16)

• The role of emotions and death in investing from a Stoicism perspective. (0:47:41)

• Michael shares his definition of success. (0:53:45)

• The after-show featuring updates, book recommendations, upcoming guests, and more. (0:55:11)

 

Quotes:

 

"PWL as a firm and the podcast specifically have been absolutely formative in how I deliver financial planning and portfolio management advice." — Mark McGrath (0:06:58)

 

"Now risky assets, like stocks and bonds, sound risky. We call them risky assets for a reason. But the thing is, in investing, risk is not always a bad thing." — Benjamin Felix (0:15:09)

 

"Expected returns matter a lot for long-term investors because they're relying on their assets to generate returns far into the future." — Benjamin Felix (0:19:39)

 

"There's this emotional aspect of stoicism, this kind of cool-headedness. And that cool-headedness comes from adopting this growth mindset and adopting this focus on what's in your control." — Michael Tremblay (0:36:38)

 

"The right approach to investing is one that is borne out by the facts. It's not driven by a bone to pick." — Michael Tremblay (0:43:54)

 

"For Stoicism, what is up to us is exclusively our minds. Exclusively, the choices and decisions that we make." — Michael Tremblay (0:46:18)

Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-265-5-hisa-for-the-long-run-plus-stoicism-with-michael-tremblay-discussion-thread/24716

 

Book From Today's Episode:

The Handbook of Epictetus — https://amzn.to/3s2k7V4

  Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on X — https://twitter.com/benjaminwfelix

Cameron on X — https://twitter.com/CameronPassmore

Michael Tremblay on X — https://twitter.com/_MikeTremblay

Mark McGrath on X — https://twitter.com/MarkMcGrathCFP

Michael Tremblay — https://www.tremblaymichael.com/

Stoa Meditation Website — https://stoameditation.com

Stoa Letter — https://www.stoaletter.com

'Reaching for yield: Evidence from households' — https://doi.org/10.2139/ssrn.4283008

'Crash beliefs from investor surveys' — https://doi.org/10.3386/w22143

'Who should buy long-term bonds?' — https://doi.org/10.1257/aer.91.1.99

'Portfolios for long-term investors' — https://doi.org/10.1093/rof/rfab038

'Presidential address: Discount rates' — https://doi.org/10.1111/j.1540-6261.2011.01671.x

'Long-horizon losses in stocks, bonds, and bills: Evidence from a broad sample of developed markets' — https://doi.org/10.2139/ssrn.3964908

 

In this episode, Ben Felix and Cameron Passmore take a critical look at the Canadian banking system's mutual fund advice model. A newly released study by the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO) confirms what many already suspected: Canadian bank branches aren't in the business of giving impartial advice—they're selling financial products. Ben breaks down the implications of this study, which surveyed nearly 3,000 bank-affiliated mutual fund representatives, uncovering troubling statistics about sales pressure, lack of credentials, misaligned incentives, and poor client outcomes. From limited product shelves and high-fee mutual funds to representatives with minimal financial education, the findings expose systemic flaws in the bank advice model. The second half of the episode is a conversation with Connor and Taylor Hewson, who recently joined PWL Capital after operating their own multigenerational advisory firm. They reflect on the decision-making process, their practice's evolution, and how joining PWL aligned with their mission to deliver better, evidence-based advice to clients. Their story illustrates the professionalization of financial advice in Canada and what's possible when advisors choose client outcomes over product sales.

 

Key Points From This Episode:

 

(0:02:33) Introducing Connor and Taylor Hewson and their firm's integration with PWL Capital.

(0:03:55) Why Canadians' loyalty to banks puts them at risk of poor financial advice.

(0:06:22) Bank branch "advisors" often lack credentials and act as commissioned salespeople.

(0:08:08) Overview of CBC's 2024 investigation into bank sales practices.

(0:10:11) The OSC and CIRO's comprehensive 2024 survey of bank mutual fund reps.

(0:11:47) One-third of bank reps agree their pay structure prioritizes sales over advice.

(0:13:17) 35% of reps experience sales pressure "often" or "always."

(0:16:32) Almost half of bank reps believe clients would benefit from non-bank products.

(0:18:52) A shocking 23% of reps couldn't define "MER"—a key mutual fund concept.

(0:21:03) Advisors often make the same poor investing choices as their clients.

(0:23:55) Why credentials like CFP and CFA—and firms that support them—matter.

(0:26:18) How PWL Capital's structure addresses the problems with bank advice.

(0:27:43) Taylor and Connor's journey from family firm to joining PWL.

(0:31:18) Why they shifted from resistance to excitement about the acquisition.

(0:35:46) Letting go of the need to "do everything" and focusing on client relationships.

(0:40:06) How clients reacted to the transition—and the surprising questions they asked.

(0:42:40) What they'd tell other advisors considering a move to PWL.

(0:44:41) Building the future of advice by creating a true apprenticeship model.

(0:52:12) Why advice—not just products—should be the center of financial services.

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind

Rational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca

Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://pwlcapital.com/our-team/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

Pim van Vliet is on a mission to put the low volatility factor on the map. In his role as Head of Conservative Equities and Chief Quantitative Strategist at Robeco, he focuses on leveraging the effect of low-risk investing. Pim has also published a book, High Returns From Low Risk: A Remarkable Stock Market Paradox, where he unpacks some of the key aspects that guide his work and underpin his success. During this conversation, Pim shares his insights on volatility, the changing market, and combining low-risk with other traditional factors. He equips listeners with key considerations for evaluating strategies or products when allocating low-risk and offers his perspective on out-of-sample-testing, distinguishing between global-factor and cross-sectional premiums, and more. Listeners will get Pim's perspective on the pros and cons of the Sharpe ratio, and we examine risk-adjusted returns on long and short legs before hearing his Fama-French Five Factor Model analysis. We touch on inflation and gold, and finally, Pim shares his inspiring perspective on success in his financial and personal life. Tune in today to hear more! 

 

Key Points From This Episode:

 

• Introducing Pim Van Vliet and his mission to put low volatility on the map as a factor. (0:00:41)
• Defining the low-risk effect with reference to volatility and its impact on other asset classes. (0:04:47)
• Low-risk portfolio performance in relation to the changing market. (0:12:02)
• Combining low-risk with other traditional factors. (0:21:43)
• Considerations for evaluating strategies or products when allocating low-risk. (0:24:35)
• Out-of-sample testing. (0:31:28)
• Distinguishing between global factor premiums and cross-sectional premiums. (0:35:18)
• Weighing the pros and cons of the Sharpe ratio as an evaluation tool. (0:40:19)
• Examining the risk-adjusted returns of long and short legs. (0:41:20)
• Issues with the Fama-French Five Factor Model. (0:44:37)
• Why factor premiums vary through inflation regimes. (0:50:41)
• How an allocation to gold holds up as a downside hedge. (0:52:53)
• Pim's definition of success in his life. (0:56:31)

 

Links: 

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-264-pim-van-vliet-the-volatility-effect-revisited-discussion-thread/24622

Book From Today's Episode:

High Returns From Low Risk: A Remarkable Stock Market Paradox — https://amzn.to/3rMkJxQ

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Pim van Vliet on Twitter — https://twitter.com/paradoxinvestor

Pim van Vliet — http://www.paradoxinvesting.com

'The Volatility Effect' — https://www.robeco.com/files/docm/docu-the-volatility-effect-2007.pdf

'The Volatility Effect Revisited' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3442749

'Ten Things You Should Know About Low-Volatility Investing' — https://www.robeco.com/en-int/insights/2017/07/ten-things-you-should-know-about-minimum-volatility-investing

'The Conservative Formula: Quantitative Investing Made Easy' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3145152

'Media attention and the volatility effect' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3403466

'When Equity Factors Drop Their Shorts' — https://www.robeco.com/en-int/insights/2021/02/when-equity-factors-drop-their-shorts

'The Cross-Section of Stock Returns before CRSP' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3969743

'Global factor premiums' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3325720

'Investing in Deflation, Inflation, and Stagflation Regimes' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4153468

'Five Concerns with the Five-Factor Model' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2862317

'The golden rule of investing' — https://www.robeco.com/en-int/insights/2023/04/the-golden-rule-of-investing

With the recent passing of Harry Markowitz, we wanted to take this opportunity to spend some time honoring this giant of financial economics. Joining us on today's episode is our friend Alex Potts, who shares some of his touching memories of Harry, and talks about the unmistakable impact he had on the field. Harry is commonly viewed as the father of modern portfolio theory but also might be considered the grandfather of behavioural finance and a huge proponent of intelligent diversification. Alex graciously shares the nine lessons he learned from Harry, a few 'Harryisms' and some fond and surprising anecdotes from the time he spent with the man. Following this, we welcome Edward Goodfellow to the show to explore his new book, 7 Steps to A Better Portfolio. Edward is a fellow Canadian financial advisor, and we get to hear from him about the motivations for his book, its intended audience, and his insight into a host of central and familiar themes that we deal with on the show, so join us to hear it all. 

 

Key Points From This Episode:

• Looking back on the irreplaceable contributions of Harry Markowitz. (0:05:24)
• Alex talks about reaching out and meeting Harry in 2010. (0:10:00)
• Harry's amazing work ethic, unusual approach to problem-solving, and the nine lessons that Alex learned from him. (0:14:23)
• Edward shares his motivations for writing 7 Steps to A Better Portfolio, the questions that gave it structure, and its intended audience. (0:25:53)
• Understanding math and emotion, the four questions to ask before investing, and dangerous investment personalities and influencers. (0:29:39)
• Categorizing the different types of risk we encounter as investors, and the role of predictions and expectations. (0:35:41)
• Charting the evolution of a strategy over time, how to reassess and determine risk tolerance, and evaluating performance. (0:38:06)
• Edward describes different types of active and passive investing and the seven steps from his book. (0:40:26)
• Comparing financial science and active management research, and how to manage strategy risk. (0:49:42)
• How Edward looks at the value of financial advice and his biggest takeaway from writing the book. (0:52:58)
• The best way to approach figuring out the contradictions in the world of finance. (0:54:24)
• Today's after-show featuring listener reviews, community updates, and future episode guests. (0:56:20)

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-263-a-tribute-to-harry-markowitz-with-alex-potts-7-steps-to-a-better-portfolio-with-edward-goodfellow-discussion-thread/24528

Book From Today's Episode:

7 Steps to A Better Portfolio — http://www.7stepstoabetterportfolio.com/

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Alex Potts — https://buckinghamstrategicwealth.com/people/alex-potts

Edward Goodfellow — https://www.pifinancialcorp.com/advisor/edward-goodfellow

Household finance has grown considerably as a field of study in recent years. And with the decrease in defined benefits pension plans, households are increasingly needing to take more responsibility for their own financial fates (much more so than they needed to in the past). Joining us today to discuss household finance and the growing importance of households in the economy, is Professor Francisco Gomes. Francisco is a Professor of Finance at London Business School and earned his PhD in economics at Harvard with his main areas of expertise being household finance, capital markets, asset allocation, and macroeconomics. In our expansive conversation with Francisco, we discuss the increasingly important role of households in the economy, how this has contributed to household finance becoming a more prominent field of study, and what can be done to make sure that academic findings reach, and positively impact, households. Francisco shares a detailed outline of what he's learned from his research, covering topics like level of education, automation at work, peer effects, and culture, with explanations of how these elements can impact household financial decisions. We also learn about his passion for financial literacy, why he is such a big proponent of ensuring that everyone has access to a quality personal finance education, and the personal finance course he currently teaches at London Business School. To learn more from Francisco about the study of household finance and how to improve outcomes for households, be sure to tune in today!

 

Key Points From This Episode:

 

• What it means to maximize your wealth over your lifetime and the crucial ratio determining optimal asset allocation. (0:02:53)
• How optimal asset allocation changes over your life cycle and how our human capital diminishes with age. (0:08:08)
• Building a buffer stock of wealth and the evidence that people become more comfortable with risk as they get richer. (0:10:03)
• The importance of simplifying life cycle asset allocation models to help households make decisions and have a tangible impact on people's lives. (0:16:28)
• The biggest gap between theory and what households do; not investing in stocks. (0:20:32)
• An overview of the biggest mistakes people make when they invest in stocks and why it ties back to financial literacy. (0:23:49)
• How the process of optimizing asset allocation changes at retirement, the importance of hedging longevity risk, and why annuities are so useful. (0:25:40)
• A rundown of some of the reasons behind why annuity uptake is so low and why it is often referred to as the annuity puzzle. (0:29:20)
• The impact of automation in the workplace on household wealth accumulation and how exposure to automation is measured. (0:35:02)
• How one's level of education affects the interaction between automation and wealth and how households should respond to automation at work. (0:38:12)
• Lessons from Francisco's research for households thinking about the future after a change in their financial situation. (0:45:18)
• Why household finance has become more prominent as a field of study in recent history and what economists need to do to ensure their findings positively impact households. (0:47:30)
• How culture can influence household financial behaviour and the evidence that people learn from their peers. (0:50:47)
• Insights into the potential for financial advice to improve the finance of households and why Francisco is such a big proponent of personal finance education and financial literacy. (0:52:35)
• Learn about Francisco's personal finance course at London Business School and what he's most excited about in his upcoming research. (0:54:01)

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-262-francisco-gomes-consumption-and-portfolio-choice-over-the-life-cycle-discussion-thread/24433

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Prof. Francisco Gomes on Twitter — https://twitter.com/Franc_J_Gomes

Prof. Francisco Gomes — https://sites.google.com/view/francisco-gomes/home

'Optimal Life-Cycle Investing with Flexible Labor Supply: A Welfare Analysis of Life-Cycle Funds' — https://www.jstor.org/stable/29730037

'Consumption and Portfolio Choice over the Life Cycle' — https://academic.oup.com/rfs/article-abstract/18/2/491/1599892?redirectedFrom=fulltext

' Portfolio Choice Over the Life Cycle: A Survey' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3744669

'Longevity risk, retirement savings, and financial innovation' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X11002339

'Stock Market Participation and Portfolio Shares Over the Life Cycle' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3808350

'Optimal Life-Cycle Asset Allocation: Understanding the Empirical Evidence' — https://www.jstor.org/stable/3694770

'Do Robots Increase Wealth Dispersion?' — https://academic.oup.com/rfs/advance-article-abstract/doi/10.1093/rfs/hhad050/7192998?redirectedFrom=PDF

'Evidence on Expectations of Household Finances' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3229980

'Household Finance' — https://www.aeaweb.org/articles?id=10.1257/jel.20201461

Our focus for today's episode is the topic of structured products and we welcome two expert guests to weigh in with their research and insight on the subject. Felix Fattinger is an Assistant Professor of Finance at the Vienna Graduate School of Finance whose research focuses on complexity from a number of perspectives. Petra Vokata is an Assistant Professor of Finance at Ohio State University, currently working in areas of household finance, financial innovation, and consumer financial protection. Both Felix and Petra offer some amazing takeaways for retail investors, deftly balancing the data with their ability to read it and implement the lessons we should learn about structured products. We then welcome Jill Schlesinger back to the show to talk about her new book, The Great Money Reset. We hear from her about the process of writing the book, her aims for its publications, and the main questions it can help individuals answer. 

Felix Fattinger thanks his co-authors Marc Chesney, Jonathan Krakow (both University of Zurich) and Simon Straumann (WHU – Otto Beisheim School of Management).

 

Key Points From This Episode:

 

• Felix talks about his interest in complexity and how to understand the three different types of structured products. (0:07:23)
• The definition of headline rates and their relationship to expected returns. (0:18:23)
• Laying out the biggest lessons from Felix's research; price competition regulation, expected returns, and simulating portfolios. (0:32:21)
• Petra shares her reasons for researching structured products and what she focuses on. (0:40:36)
• The doubts Petra has about YEPs, the evolution of their fee structure, and estimating their expected returns. (0:49:02)
• The YEP index and how it can help investors mitigate certain issues. (1:02:42)
• Actions by banks that increase headline rates of return and how this relates to expected returns. (1:06:56)
• Unpacking the biggest lesson from Petra's research about understanding fees and payoff. (1:10:12)
• A 60-second recap of Jill Schlesinger's previous episode with us. (1:14:53)
• Explaining the idea of the 'great money reset' and why Jill's latest book was so much easier to write than her first one. (1:17:22)
• Jill shares the five steps to go through before a reset and expands on the important considerations. (1:21:33)
• Tips for negotiating with your boss and final thoughts on approaching a financial reset. (1:32:04)
• Today's after-show; recent time off, listener reviews, community and event updates, and a song from RootHub. (1:41:22)

 

Links From Today's Episode:

 

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Felix Fattinger — https://www.wu.ac.at/en/finance/people/faculty/felix-fattinger-1/

Petra Vokata — https://petravokata.com/

Petra Vokata on Twitter — https://twitter.com/vokataa

Jill Schlesinger — https://www.jillonmoney.com/

Jill Schlesinger on Twitter — https://twitter.com/jillonmoney

The Great Money Reset — https://www.amazon.com/Great-Money-Reset-Change-Wealth-ebook/dp/B09Y44ZJXT

Episode 67 with Jill Schlesinger — https://rationalreminder.ca/podcast/67

Jill on Money Podcast — https://www.jillonmoney.com/podcasts

The Dumb Things Smart People Do with Their Money — https://www.amazon.com/Things-Smart-People-Their-Money/dp/0525622179

Neil Pearson — https://giesbusiness.illinois.edu/profile/neil-pearson

Episode 236 with Harold Geller — https://rationalreminder.ca/podcast/236

Episode 102 with Brian Portnoy — https://rationalreminder.ca/podcast/102

Future Proof — https://futureproof.advisorcircle.com/

The Most Hated F-Word Podcast — https://themosthatedfword.com/

RootHub — https://www.roothub.com/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on Twitter — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on Twitter — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Today we welcome James Choi, Professor of Finance at the Yale School of Management, to the show to share some of his insight into what he has dubbed practical finance. James has focused his research on behavioural finance, behavioural economics, household finance, capital markets, health economics, and sociology, and is turning this expertise into pragmatic knowledge marketed towards ordinary people. This reframing and reconfiguration of the theory for all people and the decisions they make, could not be more in line with what we are trying to do here at Rational Reminder, and this conversation with James was packed with so many surprising and informative responses to relatable questions. We ask James about index funds, the benefits of advisors, optimal equity, diversification, and much more. We also spend a little bit of time exploring the individual reasons that people have for their decisions, with James expanding on the disconnect between people's philosophy and their actions. Further topics include the role and impact of education, renting versus buying, and the formulation of his concept of practical finance, so make sure to join us and catch it all.

 

Key Points From This Episode:

 

• The failure of economic theory to explain everyday financial decisions. (0:03:03)
• A little about James' course on personal finance at Yale. (0:06:29)
• Economic theory and popular personal finance advice on optimal savings and consumption. (0:12:06)
• Looking at economic theory and popular personal finance's suggestions about optimal equity allocations for households. (0:19:33)
• The kinds of personal aversions people have towards their finances. (0:27:07)
• The impact that James' survey research has had on his perspectives on equity. (0:29:42)
• Practical application of economic theory to household decisions. (0:32:29)
• Increased awareness of the benefits of index funds. (0:42:59)
• James shares a few famous economists' investment strategies. (0:44:11)
• Some thoughts on approaches to and avoidance of diversification. (0:45:48)
• Differentiating between mistakes and unique behaviours we cannot justify. (0:52:26)
• The efficacy of education, financial advice, and personal experience in improving investment decisions. (0:55:44)
• Liquid and illiquid assets and renting versus buying property. (1:02:26)
• James talks about his excitement around his current work in practical finance. (1:07:50)
• How James defines success at this point in his life. (1:09:52)

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-260-prof-james-choi-practical-finance-discussion-thread/24227

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

James Choi — https://faculty.som.yale.edu/jameschoi/

'Behavioral Household Finance' — https://www.hbs.edu/ris/Publication%20Files/behavioral_household_finance_a3b33098-e0c7-40e0-bf2f-fa4ceb6e6d06.pdf

'Finance for the Rest of Us' — https://www.linkedin.com/posts/james-j-choi-finance_finance-for-the-rest-of-us-activity-6997910789097414656-5epq/?originalSubdomain=ba

'Popular Personal Financial Advice versus the Professors' — https://www.aeaweb.org/articles?id=10.1257/jep.36.4.167

'Millionaires Speak: What Drives Their Personal Investment Decisions?' — https://www.nber.org/papers/w27969

'What Matters to Individual Investors? Evidence from the Horse's Mouth' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12895

'Are Empowerment and Education Enough? Underdiversification in 401(k) Plans' — https://www.jstor.org/stable/3805120

'Why Does the Law of One Price Fail? An Experiment on Index Mutual Funds' — https://www.nber.org/papers/w12261

'$100 Bills on the Sidewalk: Suboptimal Investment in 401(k) Plans' — https://www.nber.org/papers/w11554

Join us as we present a compilation of segments on expected returns and the dynamics that shape investment outcomes. We deep dive into the world of financial predictions and gain a comprehensive understanding of how expected returns influence your financial decision-making. We also go back to the episode with Dr. Brian Portnoy where we delved into his book, The Geometry of Wealth. Lastly, joining our conversation is our colleague Matt Gour who discusses The Power of Moments by Chip and Dan Heath. We discuss how extraordinary moments have the power to shape our lives and the pivotal importance of crafting unforgettable experiences. Tune in now!

 

Key Points From This Episode:

 

• What Pressor Fama had to say about expected returns. (0:03:35)
• Looking at returns through a historical lens with Professor Goetzmann. (0:08:23)
• Professor Cederburg explains the usefulness of historical data. (0:11:38)
• Hear Professor Cochrane's perspective on expected returns. (0:15:19)
• Professor Cornell shares his contrasting view on historical returns. (0:23:41)
• We recap our discussion with Professor French about uncertainty. (0:34:23)
• Breaking down the conventional viewpoint of uncertainty with Professor Pastor. (0:38:34)
• A brief overview of our approach to estimating expected returns. (0:44:03)
• Highlights from our conversation with Dr. Brian Portnoy about his book. (0:47:56)
• Matt Gour joins us for our weekly book review of The Power of Moments. (0:51:15)
• He shares an impactful moment from his childhood. (0:54:04)
• We unpack a main takeaway from the book: the peak-end rule. (0:56:23)
• The four elements needed to create a defining moment. (0:57:51)
• Learn about the different types of defining moments. (1:01:02)
• How to be deliberate about creating powerful moments. (1:01:02)
• Main takeaways from the book. (1:04:55)
• The aftershow, planned meetups, upcoming projects, and more. (1:07:15)

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-259-comprehensive-overview-estimating-expected-returns-discussion-thread/24077

Book From Today's Episode:

The Geometry of Wealth: How to shape a life of money and meaning — https://amzn.to/46qpjl5

The Power of Moments: Why Certain Experiences Have Extraordinary Impact — https://amzn.to/3pmYJJb

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Nick Maggiulli on Instagram — https://instagram.com/nickmaggiulli

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

'Financial Planning Assumptions for Market-Cap Weighted and Factor Tilted Portfolios – Methodology Guide' — https://www.pwlcapital.com/resources/financial-planning-assumptions-for-market-cap-weighted-and-factor-tilted-portfolios-methodology-guide/ 

Episode 38: Feelings in the Decision Making Process — https://rationalreminder.ca/podcast/38

Episode 92: Dr. Moira Somers and Dave Goetsch — https://rationalreminder.ca/podcast/92

Episode 100: Professor Kenneth French — https://rationalreminder.ca/podcast/100

Episode 102: Dr. Brian Portnoy — https://rationalreminder.ca/podcast/102

Episode 124: Professor Lubos Pastor — https://rationalreminder.ca/podcast/124

Episode 151: Professor Brad Cornell — https://rationalreminder.ca/podcast/151

Episode 169: Professor John Cochrane — https://rationalreminder.ca/podcast/169

Episode 189: Regret (and How to Read More w/ Neil Pasricha) — https://rationalreminder.ca/podcast/189

Episode 200: Professor Eugene Fama — https://rationalreminder.ca/podcast/200

Episode 224: Professor Scott Cederburg — https://rationalreminder.ca/podcast/224

Episode 248: Professor William Goetzmann — https://rationalreminder.ca/podcast/248

Behavioural finance provides a realistic and comprehensive framework for understanding financial markets and decision-making. Incorporating insights from psychology, it enhances our understanding of investor behaviour, market dynamics, and risk management, leading to more effective investment strategies and improved financial outcomes. In this episode, Professor Meir Statman, a renowned expert in finance and behavioural finance, takes us on a captivating journey through the intriguing world of maximizing well-being through finance. Professor Statman is a distinguished financial expert and a leading authority in the field of behavioural finance. His groundbreaking research has shaped the understanding of investor behaviour and its impact on financial decision-making. Through his academic contributions and practical insights, Professor Statman has become a trusted guide in navigating the complex intersection of finance and human behaviour. In our conversation, he unravels the secrets of maximizing well-being through finance and the intricacies of the field. We explore the captivating world of behavioural finance and its connection to efficient markets, the distinction between normal and rational investors, the allure of lottery-like assets, and the downsides of consuming dividends. We unpack the aversion to realizing losses and the debate between dollar-cost averaging and lump-sum investing. We delve into the rising popularity of alternative investment strategies, the influence of status on rational investor behaviour, the role of financial advisors, and much more. Tune in for this enlightening conversation that will not only reshape your understanding of finance but human behaviour too.

 

Key Points From This Episode:

 

• Defining what behavioural finance is and how it relates to efficient markets. (0:04:37)
• How traditional financial economists responded to Professor Statman's early behavioural work and the current state of behavioural finance research. (0:06:12)
• The various generations of behavioural finance and how they differ. (0:08:51)
• Differences between a normal investor and a rational one. (0:13:10)
• What investors really want and why normal investors like lottery-like assets. (0:15:48)
• Reasons normal investors have a preference for cash dividends. (0:20:17)
• Downsides of consuming dividends and not capital. (0:22:09)
• Unpacking why normal investors are averse to realizing losses. (0:25:40)
• Dollar-cost averaging versus lump sum investing. (0:27:57)
• The popularity of alternative investment strategies to normal investors. (0:31:13)
• Insights about the difference between an error and what a person wants. (0:34:49)
• The influence of status on rational investor behaviour and whether financial advisors should cater for elevating status. (0:36:37)
• Currency hedging, regret, the value of financial literacy, and the distinction between behavioural portfolio theory and traditional mean-variance portfolio theory. (0:40:50)
• Applying the market's portfolio theory to behavioural portfolio theory. (0:49:36)
• Exploring theories through a CAPM lens and behavioural theory's interpretation of return premiums from factors like size and value. (0:50:51)
• The role of financial advisors in correcting behavioural errors of clients. (1:00:16)
• Professor Statman's definition of success. (1:09:25)

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-258-prof-meir-statman-financial-decisions-for-normal-people-discussion-thread/23934

 

Book From Today's Episode:

Behavioral Finance: The Second Generation — https://amzn.to/3qR7AmM

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Prof. Meir Statman on Twitter — https://twitter.com/meirstatman

Prof. Meir Statman — https://www.scu.edu/business/finance/faculty/statman/

'Behavioral Efficient Markets' — http://doi.org/10.3905/jpm.2018.44.3.076

'What Is Behavioral Finance?' — https://www.cfainstitute.org/-/media/documents/book/rf-publication/2019/behavioral-finance-the-second-generation.pdf

'Behavioral Finance: The Second Generation' — https://www.cfainstitute.org/-/media/documents/book/rf-publication/2019/behavioral-finance-the-second-generation.pdf

What Investors Really Want — http://doi.org/10.2469/faj.v66.n2.5

Explaining investor preference for cash dividends — http://doi.org/10.1016/0304-405x(84)90025-4

The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence — https://doi.org/10.1111/j.1540-6261.1985.tb05002.x

A Behavioral Framework for Dollar-Cost Averaging — http://doi.org/10.3905/jpm.1995.409537

Behavioral Aspects of the Design and Marketing of Financial Products — http://doi.org/10.2307/3665864

Options and structured products in behavioral portfolios — http://doi.org/10.1016/j.jedc.2012.07.004

Lottery Players/Stock Traders — http://doi.org/10.2469/faj.v58.n1.2506

Hedging Currencies with Hindsight and Regret — http://doi.org/10.3905/joi.2005.517170

Behavioral Portfolio Theory — http://doi.org/10.2307/2676187

Portfolio Optimization with Mental Accounts — https://www.cambridge.org/core/services/aop-cambridge-core/content/view/4B23CFB326982C52014A1BA447FA9244/S0022109010000141a.pdf/portfolio-optimization-with-mental-accounts.pdf

Making Sense of Beta, Size, and Book-to-Market — http://doi.org/10.3905/jpm.1995.409506

Affect in a Behavioral Asset-Pricing Model — http://doi.org/10.2469/faj.v64.n2.8

From Financial Advisers to Well-Being Advisers; Well-Being Advisers — http://doi.org/10.3905/jwm.2023.1.202

What are your guiding philosophies on work and life? And how do they influence your daily decisions and the trajectory of your career? If these questions feel somewhat daunting, and you aren't sure how to answer them, then this episode is a great place to start! Joining us today is Giorgio Ugazio, a self-described content creator, startup founder, and father. Giorgio is a software engineer by training, with a Master's degree in Artificial Intelligence and robotics, and spent over seven years working at Google. He is the founder of Retire In Progress, a blog where he shares his thoughts on life, work, achieving financial independence, and retiring early. The platform has amassed a dedicated following thanks to Giorgio's many unique insights on life, design, and living intentionally. In today's conversation, we talk with Giorgio about the underpinnings of his philosophies, the excellent book Designing Your Life: How to Build a Well-Lived, Joyful Life, and how his interpretation of it clarified his perspectives on life and work. We discuss the key tenets in Designing Your Life along with how you can use its many tools and exercises to determine your current position, assess your value, and define your compass. Giorgio goes on to share the thinking behind his foundational beliefs, like why you shouldn't play the status game, before reflecting on who he believes would benefit most from reading Designing Your Life. To hear all of Giorgio's fascinating insights and how to incrementally build your model of life, be sure to tune in today!

 

Key Points From This Episode:

 

• A quick recap and review of episode 100 with Professor Ken French. (0:02:57)
• Introducing Giorgio Ugazio, aka Mr. RIP,  his website, Retire Your Life, and how you can access his extensive notes on the book Designing Your Life online. (0:05:16)
• An overview of Designing Your Life, guidance on how to classify problems, and a breakdown of what it means to prototype solutions. (0:08:49)
• Insight into the tools, exercises, and processes that the book offers: how it helps you determine where you are, assess your value, and define your compass. (0:13:05)
• How to do the Odyssey Planning exercises. (0:16:22)
• The four key areas covered in the book, why Giorgio added the categories learning, money, and creativity, and how he incorporates lessons from the book into his life. (0:18:18)
• Determining your views on life and work, and how the two interact. (0:21:54)
• The Pomodoro technique: what it is, and how to use it. (0:23:12)
• Giorgio's perspective on work: why we do it, the purpose it serves, and the criteria he uses to assess his position. (0:25:11)
• What you learn when you take money out of the equation, why you should ignore the status game, and the importance of finding ways to enjoy your life. (0:29:46)
• Giorgio's view on life, the philosophers that inspire him, and his guidelines for what he thinks a good life should be. (0:36:41)
• Some of the misalignments between Giorgio's ideal life and his actual life. (0:42:29)
• How life and work both drive and complement one another. (0:44:16)
• Giorgio's advice on applying lessons from Designing Life and who he thinks will benefit most from reading it. (0:48:51)
• Our thoughts on the movie Air, some of the wonderful reviews we've been getting from listeners, and news about upcoming meetups. (0:51:26)

 

Book From Today's Episode:

Designing Your Life: How to Build a Well-Lived, Joyful Life — https://amzn.to/3N5Xp57

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Giorgio Ugazio on Twiter — https://twitter.com/retireinprogres

Giorgio Ugazio — http://retireinprogress.com

Giorgio's Notes on Designing Your Life — mr.rip/dyl

Episode 100: Prof. Kenneth French: Expect the Unexpected — https://rationalreminder.ca/podcast/100

How does the connection we have with our future self impact the decisions we make today? And what active steps can we take to improve our connection with our future selves? Today on the show we welcome back Hal Hershfield, whose new book Your Future Self: How to Make Tomorrow Better Today delves into the science of our relationship with our future selves and what we can do to change it for the better. In our conversation with Hal, we discuss the concept of the self, how we change over time, and why so many of us feel disconnected from our future selves. He describes the research surrounding these subjects and their findings, including how the brain scans they performed demonstrate that we mostly see our future selves as strangers, and why this is caused, at least in part, by the fact that our future selves don't technically exist yet. We also discuss the interventions that have been shown to improve our relationship with our future selves, like viewing age-progressed images or exchanging letters with our future selves, and why everyone responds to these interventions differently. Having a strong connection with your future self has many benefits. It means you're more likely to make decisions that will serve you later in life, like saving for retirement, eating healthily, and exercising regularly. But Hal also warns that we risk losing sight of the present and what truly matters when we focus solely on the future. To hear all of Hal's knowledgeable insights on this topic and what he wants to explore next, be sure to tune in today!

Key Points From This Episode:

• Defining the self and how our identity shifts depending on age, context, and the people we surround ourselves with. (0:04:08)

• An overview of Hal's research and what it reveals about how most people connect (or don't connect) to their future selves. (0:08:29)

• How empathy can influence our connection to our future selves. (0:11:36)

• Insights into why we tend to think of our future self the same way we think about strangers or

  acquaintances. (0:14:19)

• Our level of connection to our future self and how it affects wealth accumulation and financial

  well-being. (0:17:53)

• The definition of 'present bias' and 'hyperbolic discounting' and the role they play in decisions

  about the future. (0:19:28)

• The end-of-history illusion and the impact it has on our decisions. (0:23:02)

• How viewing age-progressed images of yourself can help you build a connection with your

  future self. (0:26:35)

• The research Hal is conducting with MIT Media Lab using an AI chatbot called Future You.

  (0:29:35)

© 2023 Rational Reminder Podcast 1

RRP 256 Show Notes

• Dan Pink's work on the power of regret and how it overlaps with Hal's research and findings. (0:31:59)

• The findings on being presented with age-progressed images of ourselves and how they impact our decision-making and relationship with our future selves. (0:35:20)

• How writing to your future self can improve your decisions. (0:40:16)

• The problems that arise when we become too focused on improving life for our future self and

  how to find harmony between the present and future. (0:44:03)

• The COVID-19 pandemic and its impact on our collective relationship with the future.

  (0:48:10)

• Learn about the live episode we'll be recording at the upcoming Future Proof conference with Hal as our guest. (0:51:24)

 

Links From Today's Episode:

Hal Hershfield — https://www.halhershfield.com/
Hal Hershfield on Twitter — https://twitter.com/HalHershfield
Hal Hershfield on LinkedIn — https://www.linkedin.com/in/hal-hershfield-a2b91510/
Your Future Self: How to Make Tomorrow Better Today — https://www.halhershfield.com/ yourfutureself
Episode 141: Hal Hershfield: The Psychology of Long-term Decision Making — https:// rationalreminder.ca/podcast/141
The Power of Regret: How Looking Backward Moves Us Forward — https://www.amazon.com/ Power-Regret-Looking-Backward-Forward/
Episode 246: Daniel H. Pink: How to Use Regret — https://rationalreminder.ca/podcast/246 Future Proof Festival — https://futureproof.advisorcircle.com/
Brian Knutson — https://profiles.stanford.edu/brian-knutson
Dan Martell — https://www.danmartell.com/
Derek Parfit — https://www.britannica.com/biography/Derek-Parfit
Daniel Gilbert — http://www.danielgilbert.com/
ING — https://www.ing.com/Home.htm
Merrill Lynch — https://www.ml.com/
Shlomo Benartzi — http://www.shlomobenartzi.com/
Stephen Shu — https://steveshuconsulting.com/
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder- podcast/id1426530582. 

Rational Reminder Website — https://rationalreminder.ca/
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/
Benjamin on Twitter — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on Twitter — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Structured products can offer unique investment opportunities and customization but also come with risks and complexities. It is vital to thoroughly understand the product's structure, risks, and potential returns before investing. In this episode, we delve into the value of structured products and recap a past episode about the philosophy of money before continuing our focus on reading and finance by diving into the book, Just Keep Buying by Nick Maggiulli. Nick is a highly regarded author known for his insightful and engaging works on finance and investing. With a passion for demystifying complex financial concepts, Nick has earned a reputation for his ability to present information in a clear and accessible manner. His ability to blend storytelling with data-driven insights made his articles immensely popular among readers of all backgrounds. We discuss the pros and cons of financial products, why investors prefer them, the dark side of structured products, and what investors need to avoid. We recap a past episode with Barry Ritholtz about the philosophy of money and the main takeaways from our conversation with him. Then, we delve into Just Keep Buying and the invaluable lessons and uncover hidden gems it offers readers before speaking to Nick about savings and investing. We discuss the best strategies for investing, how to spend your money comfortably, why you should never wait for the markets to dip, and much more. To learn everything about structured products and valuable insights about saving and investing, tune in now. 

 

Key Points From This Episode:

 

•    Learn about structured products and what they offer investors. (0:03:12)

•    Why structured products can be a problem for investors. (0:07:00)

•    We discuss whether the pricing of structured financial products is fair. (0:12:05)

•    How financial institutions use complexity to exploit uninformed investors. (0:14:51)

•    Outline of key findings from research conducted on structured financial products. (0:17:47)

•    The behavioural aspect of structured products and why investors prefer them. (0:22:20)

•    A recap of the main takeaways from our interview with Barry Ritholtz. (0:26:10)

•    This week's book review of Just Keep Buying. (0:28:54)

•    Nick explains the difference between saving and investing. (0:32:54)

•    A comparison of just keep buying and dollar cost averaging strategies. (0:35:21)

•    Whether people should wait for a dip in the market before investing. (0:37:23)

•    Why you do not need as much savings as you think you need. (0:39:04)

•    What the biggest lie is regarding personal finance. (0:42:29)

•    Find out how to spend your money guilt-free. (0:44:13)

•    He unpacks what comes after the just keep buying strategy, and how to be comfortable spending more in retirement. (0:46:48)

•    Financial advice that Nick has for listeners. (0:51:03)

•    The aftershow: upcoming guests, feedback about the show, and more. (0:53:59) 

 

Links From Today's Episode:

Nick Maggiulli — https://ofdollarsanddata.com/
Nick Maggiulli on LinkedIn — https://www.linkedin.com/in/nicholasmaggiulli/
Nick Maggiulli on Twitter — https://twitter.com/dollarsanddata
Just Keep Buying — https://www.amazon.com/Just-Keep-Buying-Proven-wealth/
Episode 57: Barry Ritholtz — https://rationalreminder.ca/podcast/57
Episode 248: Professor William Goetzmann — https://rationalreminder.ca/podcast/248 Episode 253: Professor Paul Calluzzo — https://rationalreminder.ca/podcast/253
Episode 126: Dr. Brian Portnoy and Josh Brown — https://rationalreminder.ca/podcast/126 'The dark side of financial innovation' — https://www.sciencedirect.com/science/article/abs/pii/ 'Catering to Investors Through Security Design' — https://academic.oup.com/qje/article- abstract/132/3/1469/3057435
'Engineering lemons' — https://www.sciencedirect.com/science/article/abs/pii/ S0304405X21001653
'Ex-post Structured Product Returns' — https://www.pm-research.com/content/iijinvest/24/2/45 Ritholtz Wealth Management — https://ritholtzwealth.com/

Animal Spirits Podcast — https://animalspiritspod.libsyn.com/
Masters in Business Podcast — https://www.bloomberg.com/podcasts/series/master-in- business
Die With Zero — https://www.amazon.com/Die-Zero-Getting-Your-Money/dp/0358099765 Superfans — https://www.amazon.com/Superfans-Stand-Tribe-Successful-Business/dp/ 1949709469
Storyworthy — https://www.amazon.com/Storyworthy-Engage-Persuade-through-Storytelling/ dp/1608685489
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder- podcast/id1426530582. 

Rational Reminder Website — https://rationalreminder.ca/
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/
Benjamin on Twitter — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on Twitter — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

What if the most impactful financial advice isn't about picking the right investment—but about understanding human behaviour, simplifying your life, and laughing along the way? In this episode of the Rational Reminder podcast, we're joined by none other than David Chilton, author of the legendary personal finance book The Wealthy Barber. David shares insights from decades of experience helping Canadians improve their financial well-being through simplicity, frugality, and clarity. We dig into the enduring lessons of his 1989 classic, why the new edition took even longer to write, and what's changed (and what hasn't) in the personal finance landscape. From his views on insurance and home ownership to the psychology of spending, his entertaining yet practical approach makes complex ideas feel surprisingly accessible. We also explore the challenges of dollar-cost averaging, the role of financial advisors, and what it really costs to own a home. And yes, you'll also hear how his mom helped launch Canada's most successful cookbook series.

 

Key Points From This Episode:

 

(0:20) Introducing David Chilton and his impact on the PWL team

(3:22) Why Dave believes the original Wealthy Barber still holds up

(6:44) His enduring belief in term life insurance and investing the difference

(8:08) What he got wrong: mutual funds, high fees, and underestimating behavioural traps

(11:16) How the book's success changed his life—and what stayed the same

(13:32) The unexpected tipping point that drove its breakout popularity

(15:13) Why he wrote The Wealthy Barber Returns after a long break

(16:41) What excites him most about the new revision and who it's for

(18:29) His kids, Rob Carrick, and the housing crisis: why now was the time

(20:13) Transitioning to videos and podcasts to reach modern audiences

(22:41) The best part of being "The Wealthy Barber"—and what he's learned from readers

(25:34) The surprising volume of portfolios people send him—and why he still reviews them

(27:12) What decades of portfolio analysis taught him about investor underperformance

(32:50) On lump sum vs. dollar-cost averaging—and the role of psychology

(37:52) Should you pay down debt or invest? Dave's practical framework

(39:49) What a good financial advisor should (and shouldn't) do

(43:08) The hidden costs of homeownership—and why people underestimate them

(48:29) Misleading conclusions about wealth, university, and home ownership

(50:40) The biggest home ownership mistakes people make

(52:24) Writing the new Wealthy Barber at the same card table

(53:25) Should you pay back the Home Buyer's Plan early? Dave says no—and here's why

(55:52) Why small optimizations—like minimizing RRSP fees—can really add up

(56:55) Spending rises with home size—and the real trap of lifestyle creep

(57:05) The most important financial variable of all: saving (and not borrowing too much)

 

 

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind

Rational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Dan Bortolotti — https://pwlcapital.com/our-team/

Dan Bortolotti on LinkedIn — https://ca.linkedin.com/in/dan-bortolotti-8a482310

Cameron Passmore — https://pwlcapital.com/our-team/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

There are many different objective functions you can use when building optimal portfolios. The majority of these approaches define risk from the perspective of variability or bad outcomes, but positive returns could be viewed as "risky" for those that don't experience them, which is another way of saying that people experience regret (or FOMO, for our trendier listeners). Today, we are joined by David Blanchett, a return guest and the Managing Director and Head of Retirement Research for PGIM DC Solutions, the global investment management arm of Prudential Financial. He is also an Adjunct Professor of Wealth Management at The American College of Financial Services and a Research Fellow for the Alliance for Lifetime Income. David returns to the podcast for an articulate discussion about regret in portfolio construction, what drives it, and how financial advisors can cater to it. We then delve into how David is redefining optimal retirement income strategies, looking at retirement tools, retirement planning, compensation models in the industry, risk exposures, and portfolios. We also get a high-level overview of some of the fascinating work that David has done on home-country bias, plus so much more. For highly technical content presented in an accessible and practical way by one of the brightest minds in retirement planning, be sure to tune in today!

Key Points From This Episode:

• Differences between risk aversion and regret aversion. (0:03:57)
• The distinctly human element that drives "investment FOMO." (0:06:34)
• Insight into how David models regret in his research. (0:09:06)
• The asset pricing implications of approaching portfolio optimization this way. (0:12:11)
• Tips for deciding on what the regret benchmark should be. (0:13:19)
• How a portfolio optimization routine based on regret affects asset allocation. (0:14:08)
• Ways that the effect of optimizing over regret changes depending on risk aversion. (0:16:55) • Other asset characteristics that might drive optimal allocation to regret assets. (0:18:04)
• Why moving away from self-direction is the best thing to happen to 401(k) plans. (0:20:53)
• How financial advisors should cater to investors interested in speculative assets. (0:24:00)
• Unpacking some of the social and story-driven sources of regret. (0:29:03)
• Downsides to modelling retirement liability as a static inflation-adjusted amount. (0:32:00)
• Why it's important to understand the composition of retiree spending and saving. (0:33:57)
• David's research into dynamic spending rules for retirement planning. (0:42:06)
• Some of the key pitfalls of existing financial planning tools and solutions. (0:44:38)
• Ways that safe withdrawal rates change when you incorporate dynamic spending. (0:51:10) • How advisor channel affects passive fund choice and how clients should respond. (0:57:56) • Insight into David's research on foreign revenue and home-country bias. (1:02:27)

 

 

Links From Today's Episode:

David Blanchett — https://www.davidmblanchett.com/
David Blanchett on Twitter — https://twitter.com/davidmblanchett
David Blanchett on LinkedIn — https://www.linkedin.com/in/david-blanchett-b0b0aa2/

© 2023 Rational Reminder Podcast 2

RRP 254 Show Notes

PGIM — https://www.pgim.com/
E137: David Blanchett: Researching Retirement — https://rationalreminder.ca/podcast/137 'Regret and Optimal Portfolio Allocations' — https://www.pm-research.com/content/iijpormgmt/ early/2023/02/01/jpm20231464
'Keep Keeping Your Distance: An Updated Look at 401(k) Participant Behaviors During the COVID-19 Crisis' — https://www.morningstar.com/articles/1032011/keep-keeping-your- distance-an-updated-look-at-401k-participant-behaviors-during-the-covid-19-crisis
'Save more with less: The impact of employer defaults and match rates on retirement saving' — https://onlinelibrary.wiley.com/doi/abs/10.1002/cfp2.1152
'Redefining the Optimal Retirement Income Strategy' — https://www.tandfonline.com/doi/full/ 10.1080/0015198X.2022.2129947
'Focusing on Both Sides of the Balance Sheet: The Benefit of Liability Optimization' — https:// web.p.ebscohost.com/abstract
'The Problems with Monte Carlo are in Your Mind' — https://www.advisorperspectives.com/ articles/2023/04/24/the-problems-with-monte-carlo-are-in-your-mind
'Does Advisor Channel Influence Passive Fund Choice?' — https:// www.financialplanningassociation.org/learning/publications/journal/APR22-does-advisor- channel-influence-passive-fund-choice-OPEN
'Foreign Revenue: A New World of Risk Exposures' — https://www.pm-research.com/content/ iijpormgmt/47/6/175
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder- podcast/id1426530582. 

Rational Reminder Website — https://rationalreminder.ca/
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/
Benjamin on Twitter — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on Twitter — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

We have two guests joining us for this episode of the Rational Reminder podcast. First up, we have Paul Calluzzo, who is the Assistant Professor of Finance and Toller Family Fellow of Finance in the Smith School of Business at Queen's University in Kingston. Paul joins us today to discuss the findings in his paper, 'Complex Instruments Have Increased Risk and Reduced Performance at Mutual Funds'. He explains the motivation for the paper, the research it expands upon, and the types of complex instrument allowances it investigates. We discuss reverse causality and find out how complex instrument allowance is related to fund performance and risk, respectively, before hearing Paul's investment advice. For the second half of the show, we are joined by the author of Losing the Signal: The Spectacular Rise and Fall of BlackBerry, Sean Silcoff to discuss the BlackBerry revolution and its subsequent decline, and the film adaptation of the book. Tune in for our guests' insights into best practices for investors and business leaders alike.

 

Key Points From This Episode:

 

•    Housekeeping: check out our CE courses and reach out for financial advice. (0:02:25)

•    An introduction to Paul Calluzzo and our conversation with him about the impact of complex financial instruments on mutual funds. (0:05:20)

•    The motivation for the paper, 'Complex Instruments Have Increased Risk and Reduced Performance at Mutual Funds', the research it expands upon, and the types of complex instrument allowances it investigates. (0:07:50)

•    Reverse causality relating to complex instruments and mutual funds, and the mechanisms that could potentially harm investors in funds using complex instruments. (0:12:37)

•    How the performance of funds was evaluated in the paper and how the usage of complex instruments evolved throughout the sample. (0:18:12)

•    How complex instrument allowance is related to fund performance and risk. (0:23:06)

•    The asymmetry of return patterns in up and down markets. (0:26:11)

•    Paul's investment advice, in the context of the paper's findings. (0:33:05)

•    Why complex products are growing despite their poor performance and how research can reach the market. (0:37:05)

•    A quick recap of episode 39 with Rob Carrick. (0:40:48)

•    Our brief review of Losing the Signal: The Spectacular Rise and Fall of BlackBerry by Sean Silcoff and Jacquie McNish. (0:41:49)

•    Sean Silcoff breaks down the BlackBerry revolution and its subsequent demise. (0:44:53)

•    Insight into the film adaptation of the book and what makes it such a compelling story. (1:04:51)

•    What business leaders and investors can take away from the BlackBerry story. (1:08:09)

•    Our after-show roundup! (1:15:12)

 

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-253-complex-financial-instruments-with-prof-paul-calluzzo-plus-sean-silcoff-on-losing-the-signal-discussion-thread/23482

 

Book From Today's Episode:

Losing The Signal: The Spectacular Rise and Fall of BlackBerry Kindle Edition — https://amzn.to/3OaA5Wa

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Paul Calluzzo — https://smith.queensu.ca/faculty_and_research/faculty_list/calluzzo-paul.php

Sean Silcoff on LinkedIn — https://www.linkedin.com/in/sean-silcoff-777b0912

Sean Silcoff on Twitter — https://twitter.com/SeanSilcoff

'Complex Instruments Have Increased Risk and Reduced Performance at Mutual Funds' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2938146

 

 

 

Understanding market efficiency is an important part of investment decision-making. It can help investors to identify the most appropriate investment strategies and develop realistic expectations for their returns. In this episode of the Rational Reminder Podcast, we sit down with Professor Burton Malkiel, the renowned economist, and author of the classic investing book A Random Walk Down Wall Street. Professor Malkiel is a distinguished figure in the world of economics and academia. He holds the prestigious title of Chemical Bank Chairman's Professor of Economics Emeritus and Senior Economist at Princeton, where he has made significant contributions to the field over the years. In our conversation, we discuss Professor Malkiel's views on the stock market, the efficient market hypothesis, how behavioural finance relates to investing, and why index funds should be at the core of every portfolio. Throughout the episode, Professor Malkiel shares his insights on a wide range of topics related to personal finance and investing, including the benefits of index funds, the dangers of active stock picking, the impact of fees and taxes on investment returns, factor investing, and expensive asset classes. He also discusses research on socially responsible investing and how investors can incorporate ethical considerations into their portfolios without sacrificing performance. In this episode, listeners will gain a better understanding of the vital principles of investing and how to apply them to achieve their financial goals. Whether you're a novice investor or an experienced pro, this episode offers valuable insights and advice from one of the most respected economists in the field, Professor Malkiel.

Key Points From This Episode:

• Professor Malkiel explains the efficient market hypothesis and what the term "efficient market" means. (0:03:42)

• What the media tends to get wrong about the concept of market efficiency and the mathematical theory behind a random walk market. (0:07:04)

• We discuss investing in index funds rather than actively managed strategies. (0:09:44)

• How his book, Random Walk, was received by professionals and academics in the industry

  (0:13:08)

• Hear about the inspiration behind the concept covered in his book, and how his investment advice has changed over the last 50 years. (0:19:18)

• Why index funds have become widely accepted, and the difference between investing and speculating. (0:23:38)

• He unpacks why past market bubbles are vital for managers to understand and shares some wise words for those who want to participate in market speculation investing. (0:28:21)

• How the existence and persistence of bubbles throughout history relate to markets being efficient. (0:32:10)

   

• Find out how the multiple, non-diversifiable risks in today's financial markets impact the advice in his book, and learn about factor investing. (0:35:42)

• He shares advice and insights for people looking to invest in cheaper funds and his perspective on trending investment strategies. (0:37:55)

• Learn how the general findings from behavioural finance influence his advice on investing in index funds. (0:41:33)

• We explore the value of risk parity strategies and the problem with backtests, and he shares his view on expensive asset classes. (0:44:09)

• What impact super-low bond yields had on the return of bonds, and whether you should focus on the value or yield. (0:54:16)

• The importance of saving as opposed to an optimal investment strategy to investor outcomes.

  (0:57:56)

• Insights into investing according to your desired outcomes and whether Professor Malkiel thinks it is better to rent or own a home. (1:03:55)

• We discuss inflation and possible future trends and the role of financial planners and investment advisors. (1:10:29)

• Hear his concerns regarding the growth of index fund assets. (1:14:52)

• Details about his book writing journey and his definition of success. (1:18:46)

 

Links From Today's Episode:

Burt Malkiel — https://jrc.princeton.edu/people/burton-g-malkiel Wealthfront — https://www.wealthfront.com/
Theravance Biopharma — https://www.theravance.com/ Genmab A/S — https://www.genmab.com/

Rebalance IRA — https://www.rebalance360.com/

A Random Walk Down Wall Street: The Best Investment Guide That Money Can Buy — https://amzn.to/3BgepQz

Princeton University — https://www.princeton.edu/
The Yale School of Management — https://som.yale.edu/
Vanguard — https://investor.vanguard.com/corporate-portal/
Trillions — https://www.amazon.com/Trillions-Renegades-Invented-Changed-Finance/dp/ 0593087682
S&P Dow Jones Indices — https://www.spglobal.com/spdji/en/
S&P Dow Jones Indices SPIVA — https://www.spglobal.com/spdji/en/research-insights/spiva/ Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder- podcast/id1426530582. 

Rational Reminder Website — https://rationalreminder.ca/
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/
Benjamin on Twitter — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on Twitter — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

We all have different levels of risk tolerance. But how is that risk measured for complex investment strategies like covered calls? And how can you be sure it's an accurate reflection of reality? For the first portion of today's episode, we provide a detailed breakdown of everything you need to know about covered calls and why there is no perfect model for assessing risk-adjusted returns. We examine how incorrect measures of risk can make covered calls seem more attractive, what investors need to know about covered calls, and the fees, costs, and taxes you should be considering with these types of strategies. Next, we are joined by lifelong friends and colleagues Jonathan Hollow and Robin Powell to discuss their new book How to Fund the Life You Want: What everyone needs to know about savings, pensions and investments. They describe how their shared passion for financial education motivated them to write their book, before explaining how readers can best use the accompanying workbook to identify and reach their financial goals. Robin and Jonathan then go on to share their advice on day-to-day money management, finding a trustworthy advisor, and why it's never too early to teach your child about money. Tune in for a detailed breakdown of covered calls and how to make informed decisions about your investments and finances!

 

Key Points From This Episode:

• An introduction to the concept of covered calls. (0:02:41)
• The definition of covered calls, how risk can be measured incorrectly to make covered call strategies look more attractive, and why risk can never be destroyed. (0:04:22)
• A breakdown of the assets involved in covered calls and why their yields can be misleading. (0:07:00)
• Why there is no perfect model for assessing risk-adjusted returns and what can be learned from looking at investors through a behavioural lens. (0:16:19)
• An overview of why fees, costs, and taxes are major considerations for these types of strategies. (0:20:15)
• Introducing Robin Powell, Jonathan Hollow and their new book How to Fund the Life You Want. (0:25:08)
• Jonathan and Robin's long friendship, their shared interest in financial education, why they saw a need for their book, and how readers can get the most out of their workbook. (0:30:45)
• Insight into the six rules that Robin and Jonathan outline in their book and the eight keywords that they set up for managing money day to day. (0:35:07)
• Advice on how to keep up with finance news, including what you should pay attention to and what you can ignore. (0:40:37) 
• The importance of a day-to-day savings habit and suggestions on what kids should be taught about money. (0:43:20)
• Advice on how to find a first-rate advisor based on your needs and what questions you need to be asking of them. (0:49:54)
• How your financial advisor should act as your financial bodyguard and complement your weaknesses. (0:56:02)
• Ben and Cameron share news about their next podcast appearances, Rational Reminder education courses for financial advisors, and upcoming meetups. (0:57:43)
• Learn about the webinars that Ben and Cameron have been hosting and how you can sign up. (01:03:00)

 

 

Links From Today's Episode:

 

Robin Powell on LinkedIn — https://www.linkedin.com/in/robinpowell/

Jonathan Hollow on LinkedIn — https://www.linkedin.com/in/jonathanhollow/

How to Fund the Life You Want: What everyone needs to know about savings, pensions and investments — https://www.amazon.co.uk/dp/1399404601/

Covered Calls — https://www.investopedia.com/terms/c/coveredcall.asp

Episode 27: Robin Powell: Evidence Based Investing: Changing the Minds of Advisors and Investors — https://rationalreminder.ca/podcast/27

Patrick Boyle on YouTube — https://www.youtube.com/c/PatrickBoyleOnFinance

Sharpe Ratio — https://www.investopedia.com/terms/s/sharperatio.asp

Sortino Ratio — https://www.investopedia.com/terms/s/sortinoratio.asp

S&P 500 — https://www.spglobal.com/spdji/en/indices/equity/sp-500/#overview

Episode 167: Prof. Hersh Shefrin: Fear, Hope, and the Psychology of Investing — https://rationalreminder.ca/podcast/167

'Behavioral Aspects of the Design and Marketing of Financial Products' — https://www.jstor.org/stable/3665864

Episode 171: Prof. Campbell R. Harvey: The Past and Future of Finance — https://rationalreminder.ca/podcast/171

'Portfolio Performance Manipulation and Manipulation-Proof Performance Measures' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=302815

Adviser 2.0 — https://www.advicereinvented.com/

Sensible Investing — https://sensibleinvesting.tv/

Financial Times — https://www.ft.com/

Rob Carrick — https://www.theglobeandmail.com/authors/rob-carrick/
The Globe and Mail — https://www.theglobeandmail.com/

The Money and Meaning Show — https://podcasts.apple.com/us/podcast/the-money-and-meaning-show/id1449894787

The Most Hated F Word — https://themosthatedfword.com/

New Self-Regulatory Organization of Canada — https://www.newselfregulatoryorganizationofcanada.ca/

FP Canada — https://www.fpcanada.ca/

Rational Reminder Continuing Education — learn.rationalreminder.ca

PWL Capital — https://www.pwlcapital.com/

PWL Capital on YouTube — https://www.youtube.com/c/Pwlcapital-Montreal/videos

IAFP Symposium — https://iafpsymposium.ca

Burt Malkiel — https://jrc.princeton.edu/people/burton-g-malkiel

David Blanchett — https://www.davidmblanchett.com/

Meir Statman — https://www.scu.edu/business/finance/faculty/statman/

Nick Maggiulli — https://www.linkedin.com/in/nicholasmaggiulli/

Jill Schlesinger — https://www.jillonmoney.com/

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on Twitter — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Navigating the world of finance and investing is undeniably complicated, sometimes unnecessarily so. And all too often the people who end up making the most costly financial mistakes are those who can least afford to do so. But what exactly needs to change in order for more people to make wise and well-informed financial decisions? And how do we go about implementing those changes? Joining us today to help us unpack this topic and the many decisions involved in the world of investing is John Y. Campbell, a British-American economist, professor of economics at Harvard, and founding partner at Arrowstreet Capital, a systematic asset management firm based in Boston. John has published over a hundred of articles on a range of topics including fixed income, equality valuation, portfolio choices, and household finance, all of which we explore in today's expansive conversation. We kick things off by discussing utility theory, why it's so important to the study of finance, and what it can teach us about risk aversion, before delving into portfolio structure, asset allocation, and hedging. John also expands on the study of household finance, the mistakes that households typically make, why household behaviour tends to differ from theoretical predictions, and how to bring theory and behaviour into alignment. We wrap things up by discussing how financial literacy, education, and regulation can improve outcomes for households before hearing John's advice on selecting an optimal mortgage contract along with an overview of the type of risk that mortgage contracts expose you to. Today's episode is jam-packed with information and insights from a profoundly knowledgeable figure in academia.

 

Key Points From This Episode:

 

•    An overview of asset pricing theory; unpacking the utility function in finance, what it teaches us about being risk averse, and how it is used to determine the value we place on any amount of money. (0:04:01)

•    The implications of using the Capital Asset Pricing Model (CAPM) for portfolio choice. (0:13:58)

•    The difference between arbitrage pricing theory and the Intertemporal Capital Asset Pricing Model (ICAPM). (0:18:15)

•    How predictability in stock returns affects portfolio advice for long-term investors and why John prefers the cyclically adjusted price-to-earnings (CAPE) ratio. (0:23:40)

•    Why a long-term inflation index bond is the ideal risk-free asset for a long-term investor, and how portfolio advice, concerning bonds, changes when inflation index bonds are not available. (0:28:32)

•    The impact that labour income should have on optimal portfolio choice and the relationship between human capital and financial assets as you age. (0:35:31)

•    Learn about John's 2004 paper entitled 'Bad Beta, Good Beta' and how intertemporal asset pricing explains differences in returns between value and growth stocks. (0:38:33)

•    The benefits and drawbacks of value investing: why historically they do well on average, but extremely poorly over certain periods. (0:41:12)

•    A breakdown of stochastic volatility and how it affects portfolio choice for long-term investors. (0:47:16)

•    How long-term equity investors should approach foreign currency hedging in their portfolios, and how fixed-income investors should deal with foreign currency exposure. (0:50:07)

•    The study of household finance, what it aims to answer, and the major challenges in this area of study. (0:53:54)

•    An overview of the mistakes that households typically make, how costly they can be, and why household behaviour tends to differ from theoretical predictions. (0:59:57)

•    Suggestions on how household behaviour and theoretical predictions can be brought into alignment and the methods that have the most potential to improve outcomes for households. (01:04:47)

•    What households should take into account when selecting an optimal mortgage contract and the different types of risk that mortgage contracts expose people to.[01:10:18]

•    How John's definition of success has shifted over the years, the joy of academia, and why he is especially grateful for the opportunity to connect with students on their educational journey. (01:16:04)

 

 

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-250-prof-john-y-campbell-financial-decisions-for-long-term-investors-discussion-thread/23202

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

John Y. Campbell — https://scholar.harvard.edu/campbell/home

'Who Should Buy Long-Term Bonds' — https://www.nber.org/system/files/working_papers/w6801/w6801.pdf

'Inflation Bets or Deflation Hedges? The Changing Risks of Nominal Bonds' — https://scholar.harvard.edu/files/campbell/files/campbellsunderamviceira_20160523.pdf

'Growth or Glamour? Fundamentals and Systematic Risk in Stock Returns' — https://scholar.harvard.edu/sites/scholar.harvard.edu/files/campbell/files/gorg20090319_copyedited.pdf

'Bad Beta, Good Beta' — https://scholar.harvard.edu/sites/scholar.harvard.edu/files/campbell/files/bbgb_2004_nberw9509.pdf

'An Intertemporal CAPM with Stochastic Volatility' — https://scholar.harvard.edu/sites/scholar.harvard.edu/files/campbell/files/cgpt_volatilityrisk20170123final.pdf

'Global Currency Hedging' — https://scholar.harvard.edu/sites/scholar.harvard.edu/files/campbell/files/globalcurrencyhedging_20090128_manuscript.pdf

'Biases in long-horizon predictive regressions' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X21004013

'What Drives Booms and Busts in Value?' — https://scholar.harvard.edu/sites/scholar.harvard.edu/files/campbell/files/cgp_valueboomsbusts_20230311.pdf

'Household Finance' — https://scholar.harvard.edu/sites/scholar.harvard.edu/files/campbell/files/householdfinance_jof_2006.pdf

'The Cross-Section of Household Preferences' — https://scholar.harvard.edu/sites/scholar.harvard.edu/files/campbell/files/calvetcampbellgomessodini_20221027.pdf

'Restoring Rational Choice: The Challenge of Consumer Financial Regulation' — https://scholar.harvard.edu/sites/scholar.harvard.edu/files/campbell/files/elylecture_march2016.pdf

'Down or Out: Assessing the Welfare Costs of Household Investment Mistakes' — https://www.journals.uchicago.edu/doi/abs/10.1086/524204

'A Model of Mortgage Default' — https://scholar.harvard.edu/sites/scholar.harvard.edu/files/campbell/files/mortdefault13022014.pdf

'Household Risk Management and Optimal Mortgage Choice' — https://scholar.harvard.edu/campbell/publications/household-risk-management-and-optimal-mortgage-choice

'Predicting the Equity Premium Out of Sample: Can Anything Beat the Historical Average?' — https://www.nber.org/papers/w11468

'An Asset Allocation Puzzle' — https://www.nber.org/papers/w4857

 

 

Our focus for this episode is the real utility of financial advisors, and Ben shares a host of research and findings about the supposed and actual value that advisors can offer investors. This segment continues our exploration of investment basics, a fundamental theme for this show and our work at PWL Capital. One of the biggest and clearest lessons that becomes apparent through this discussion is the need for financial literacy independent of advice and so-called expertise from the outside. With that said, we do find time to share some of the positives investors can accrue from dealing with a trustworthy advisor and the conditions necessary for this. Later in the episode, our colleague Lukas Fleck joins us to share his review of The Obstacle Is the Way by Ryan Holiday and some of his own reading habits and tips. We finish the episode with lighter content about hot sauces, TV shows, and Ben's latest home improvement.

 

Key Points From This Episode:

 

•    Introducing today's question about the usefulness of financial advisors. (0:03:35)

•    Common financial mistakes made by households. (0:11:13)

•    Some of the research and findings grounding today's discussion. (0:18:13)

•    Investing and self-control; what we can learn from data about smokers. (0:22:49)

•    Looking at some of the potential benefits of hiring an advisor for investors. (0:28:40)

•    A quick review of Episode 43 with Dave Butler from 2019. (0:34:07)

•    Today's book review of The Obstacle Is the Way, with Lukas Fleck, and some of the biggest takeaways. (0:36:43)

•    A look at Lukas' reading habits, favourite recent books, and his increased focus on getting through books. (0:44:59)

•    Advice for starting a book club and Lukas' reading hacks. (0:50:49)

•    The after-show; Ben tells us about his basketball hoop, last week's episode of Succession, and the hot sauce debate. (0:54:44)

•    Upcoming events, audience reviews, and future guests on the podcast. (0:58:31)

 

 

Ad mentioned by Ben:

Video: https://www.reddit.com/user/AMF_Quebec/comments/11rzoc9/les_risques_de_fraude_avec_les_cryptos_sont_bien/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&utm_content=1&utm_term=15

Text: https://lautorite.qc.ca/en/general-public/investments/crypto?utm_campaign=crypto-phase2-1017340&utm_content=image-amf_crypto2023_1x1_6sec_02_fr-fr&utm_medium=social&utm_source=reddit

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-249-what-are-financial-advisors-measurably-useful-for-discussion-thread/23120

 

Books From Today's Episode:

The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph — https://amzn.to/3MXh1dl

The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money — https://amzn.to/3UM8KLb

Deep Work: Rules for Focused Success in a Distracted World — https://amzn.to/3AuSXqZ

Making Numbers Count: The Art and Science of Communicating Numbers — https://amzn.to/41HXnWK

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Lukas Fleck — https://www.pwlcapital.com/profile/lukas-fleck/

'Restoring Rational Choice: The Challenge of Consumer Financial Regulation' — https://www.aeaweb.org/articles?id=10.1257/aer.p20161127

'Financial literacy and financial resilience: Evidence from around the world' — https://onlinelibrary.wiley.com/doi/abs/10.1111/fima.12283

'Strategic price complexity in retail financial markets' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X08002092

'Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets' — https://academic.oup.com/qje/article-abstract/121/2/505/1884013?redirectedFrom=fulltext

'The Role of Time Preferences and Exponential-Growth Bias in Retirement Savings' — https://www.nber.org/papers/w21482

'Contract Design and Self-Control: Theory and Evidence' — https://www.jstor.org/stable/25098689

'Restoring Rational Choice: The Challenge of Consumer Financial Regulation' — https://www.aeaweb.org/articles?id=10.1257/aer.p20161127

'Why Does the Law of One Price Fail? An Experiment on Index Mutual Funds' — https://dash.harvard.edu/bitstream/handle/1/4686775/Laibson_OnePriceFail.pdf

'Failure to refinance' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X16301507

'Down or Out: Assessing the Welfare Costs of Household Investment Mistakes' — https://www.jstor.org/stable/10.1086/524204

'Financial literacy and stock market participation' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X11000717

'Attention Induced Trading and Returns: Evidence from Robinhood Users' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3715077

'Excessive Extrapolation and the Allocation of 401(k) Accounts to Company Stock' — https://www.jstor.org/stable/2697737

'$100 Bills on the Sidewalk: Suboptimal Investment in 401(k) Plans' — https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3158583/

'Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving' — https://www.journals.uchicago.edu/doi/10.1086/380085

'Annuitization Puzzles' — https://www.aeaweb.org/articles?id=10.1257/jep.25.4.143

'The Market for Financial Advice: An Audit Study' — https://www.nber.org/papers/w17929

'Understanding the Advice of Commissions-Motivated Agents: Evidence from the Indian Life Insurance Market' — https://www.hbs.edu/ris/Publication%20Files/12-055_13c23c02-e57f-4aea-9630-316aa4b772ce.pdf

'Fiduciary Duty and the Market for Financial Advice' — https://www.nber.org/papers/w25861

'Conflicting Interests and the Effect of Fiduciary Duty: Evidence from Variable Annuities' — https://academic.oup.com/rfs/article-abstract/35/12/5334/6674521

'How (not) to pay for advice: A framework for consumer financial protection' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X12000074

'Financial Advice and Bank Profits' — https://academic.oup.com/rfs/article-abstract/31/11/4447/4985213?redirectedFrom=fulltext

'The Misguided Beliefs of Financial Advisors' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12995

'Retail Financial Advice: Does One Size Fit All?' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12514

'The Ulysses option: Smoking and delegation in individual investor decisions' — https://www.sciencedirect.com/science/article/abs/pii/S1544612321003962

'Smoking hot portfolios? Trading behavior, investment biases, and self-control failure' — https://www.sciencedirect.com/science/article/abs/pii/S0927539821000463

'Exponential Growth Bias and Household Finance' — https://www.jstor.org/stable/27735191

'Money Doctors' — https://scholar.harvard.edu/files/shleifer/files/moneydoctors_journaloffinance.pdf

'The Costs and Benefits of Financial Advice' — https://www.hbs.edu/faculty/Shared%20Documents/conferences/2013-household-behavior-risky-asset-mkts/Costs-and-Benefits-of-Financial-Advice_Foerster-Linnainmaa-Melzer-Previtero.pdf

'Time is money: Rational life cycle inertia and the delegation of investment management' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X16300472

'Passing the buck: Delegating choices to others to avoid responsibility and blame' — https://www.sciencedirect.com/science/article/abs/pii/S0749597815300108#:~:text=One%20simple%20way%20to%20avoid,outcome%20on%20the%20other%20person.

'Expert financial advice neurobiologically "Offloads" financial decision-making under risk' — https://pubmed.ncbi.nlm.nih.gov/19308261/

'Impact of inflated perceptions of financial literacy on financial decision making' — https://www.sciencedirect.com/science/article/abs/pii/S0167487020300672

'Precautionary savings, retirement planning and misperceptions of financial literacy' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X17301551

'Behavioral and wealth considerations for seeking professional financial planning help' — https://fpcanadaresearchfoundation.ca/media/khyfoso3/financial-services-reveiw-publication.pdf

'Financial literacy and the demand for financial advice' — https://www.sciencedirect.com/science/article/abs/pii/S037842661400096X

'Does financial literacy affect the value of financial advice? A contingent valuation approach' — https://www.researchgate.net/publication/338669648_Does_financial_literacy_affect_the_value_of_financial_advice_A_contingent_valuation_approach

'How financial literacy shapes the demand for financial advice at older ages' — https://www.sciencedirect.com/science/article/pii/S2212828X21000220

'Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?' — https://academic.oup.com/qje/article-abstract/126/1/373/1901343?redirectedFrom=fulltext

'(Over)insuring Modest Risks' — https://www.jstor.org/stable/25760237

'The Mismatch Between Life Insurance Holdings and Financial Vulnerabilities: Evidence from the Health and Retirement Study' — https://www.aeaweb.org/articles?id=10.1257/000282803321455340

'Saving and Life Insurance Holdings at Boston University - A Unique Case Study' — https://www.jstor.org/stable/23877728

'Who is internationally diversified? Evidence from the 401(k) plans of 296 firms' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X16302483?via%3Dihub

'Is conflicted investment advice better than no advice?' —  https://www.sciencedirect.com/science/article/abs/pii/S0304405X20301537

'How Does Household Portfolio Diversification Vary with Financial Literacy and Financial Advice?' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12231

'Financial Advice and Individual Investor Portfolio Performance' — https://www.jstor.org/stable/41493871

'Financial advisors: A case of babysitters?' — https://www.sciencedirect.com/science/article/abs/pii/S0378426611002548

'Professional financial advice, self-control and saving behavior' — https://onlinelibrary.wiley.com/doi/10.1111/ijcs.12480

'Do contracts influence comprehensive financial advice?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1429807

'The Value of Financial Advice' — https://www.forbes.com/sites/wadepfau/2015/07/21/the-value-of-financial-advice/?sh=6b13feda1333

How the financial system works and how we interact with it has grown in complex ways and is a fascinating but nuanced topic. To guide us through the history of the economy is Professor William Goetzmann, who is an expert in finance, economics and art history, and whose research has been featured in top publications. As a highly respected scholar, he's authored numerous books on topics such as real estate and behavioural finance. It is fair to say Professor Goetzmann's work has left a significant impact on both academia and the world. In our conversation, we dive into financial market history and explore more than just broad market returns. We unpack the fascinating phenomenon of economic bubbles and booms, and how they have evolved and shaped the financial system. He also shares crucial insights from the past and advice for investors looking to leverage the market. And to wrap things up, Professor Goetzmann shares his views on money after digging deep into its historical roots. Tune in to unlock the secrets of the past and gain valuable insights for the future as we journey through the fascinating world of economic history. Tune in now!

 

Key Points From This Episode:

 

•    Why is it important to collect and examine long-term historical returns data, and how useful the findings can be for today's market. (0:03:21)

•    The furthest back in time that Professor William Goetzmann has looked at equity returns and how much of an issue survivorship bias is in long-term historical data. (0:05:44)

•    Reasons for the United States market trends concerning equity risk premiums and his approach to forecasting long-term returns of both stocks and bonds. (0:11:02)

•    Whether current discount rates are better for estimating future returns than long-term historical returns. (0:17:08)

•    How the markets of today compare to the markets of the 1900s, and whether investor behaviour has changed. (0:18:42)

•    Learn how global finance changed after the First World War and how likely a global financial meltdown is. (0:23:35)

•    What to consider when investing internationally and whether Canadian investors should be biased towards their home country. (0:28:23)

•    Hear Professor Goetzmann's definition of an asset price bubble and his approach to studying economic bubbles and booms. (0:32:44)

•    Overview of the economic bubble and boom trends and crucial advice he has for investors regarding a market run-up. (0:36:18)

•    An explanation for negative bubble behaviour and how well market crashes align with investor expectations. (0:41:46)

•    The role of media in influencing investor behaviour, and whether long-term investors should ignore news from the financial media. (0:47:35)

•    What Professor Goetzmann has learned from studying bubble dynamics, and his advice for investing in transformative technologies. (0:52:50)

•    Professor Goetzmann's book Money Changes Everything, his definition of money, and if money pre-dates trusted authorities. (0:57:47)

•    The role of money in finance and a brief outline of how finance played a role in the development of modern civilization. (1:02:13)

•    Professor Goetzmann's definition of success. (1:06:08)

 

 

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-248-prof-william-goetzmann-learning-from-financial-market-history-discussion-thread/23010

Book From Today's Episode:

Money Changes Everything: How Finance Made Civilization Possible — https://amzn.to/3KqOYzX

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Prof. William Goetzmann on Twitter — https://twitter.com/wgoetzmann

Prof. William Goetzmann — https://som.yale.edu/faculty-research/faculty-directory/william-n-goetzmann

'History and the Equity Risk Premium' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=702341

'The present value relation over six centuries: The case of the Bazacle company' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X18302836?via%3Dihub

'A Century of Global Stock Markets' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=225683

'Will History Rhyme?' — https://jpm.pm-research.com/content/30/5/34

'New evidence on the first financial bubble' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X12002541

'Bubble Investing: Learning from History' — https://www.nber.org/papers/w21693#:~:text=History%20is%20important%20to%20the,sample%20size%20for%20inference%20small.

'Negative bubbles: What happens after a crash' — https://onlinelibrary.wiley.com/doi/abs/10.1111/eufm.12164

'Crash Beliefs From Investor Surveys — https://www.nber.org/papers/w22143

'Crash Narratives' — https://www.nber.org/papers/w30195

 

 

There's been a lot of interest in the topic of bank runs lately, and in today's episode, we take a look at the most relevant research to help us better understand why they happen and how they can be avoided. Our conversation unpacks the 2022 Nobel prize-winning work of Douglas Diamond and Philip Dybvig and examines the three primary risks that banks need to navigate to avoid a bank run related crisis. We discuss the immense value that banks provide and how they keep the economy moving, before reflecting on how their most valuable services are inexorably tied to the risk of bank runs. You'll also learn about the role of the media in triggering a bank run, and how the problems that arise with bank runs can be addressed through a combination of deposit insurance, bank regulation, and a diverse customer base — all of which are designed to keep depositors from panicking simultaneously. We also revisit a past conversation with Jonathan Clements, before catching up with him in real time to discuss his new book My Money Journey: How 30 People Found Financial Freedom - and You Can Too. Tune in for an in-depth look at bank runs, the value of writing your money story, and a timely reminder that when you're making a deposit, you're actually lending money to the bank.

 

Key Points From This Episode:

 

•    An introduction to the topic of bank runs including an overview of the Nobel prize-winning work done on the subject in 2022. (0:02:12)

•    The three primary risks you need to manage as a bank in order to be a successful business. (0:07:28)

•    Why liquidity, illiquidity, and duration risk can pose a problem, even for healthy banks. (0:12:47)

•    How news stories can create unwarranted panic and cause a bank run, even if a bank isn't experiencing problems. (0:16:02)

•    The multiple equilibria of banks as outlined in the Diamond and Dybvig paper. (0:16:31)

•    How deposit insurance can function as a solution, at least in part, to bank runs. (0:19:34)

•    What the Diamond and Dybvig paper teaches us about the Silicon Valley Bank (SVB) bank run. (0:21:35)

•    The difference between households and banks, and the lessons households can learn from the narrative around bank runs. (0:22:59)

•    A quick recap of our conversation with Jonathan Clements and a review of his new book My Money Journey: How 30 People Found Financial Freedom - and You Can Too. (0:27:16)

•    We welcome Jonathan Clements back onto the show to discuss his new book and why he wrote it. (0:32:00)

•    What readers can expect to learn from Jonathan's book, like the impact parents have on your financial beliefs, and what inspires people to reassess their finances. (0:34:31)

•    The impact of early habits on our finances. (0:38:36)

•    Jonathan's insights into the financial service industry, its complexity, and how our risk tolerance can shift over time. (0:40:19)

•    Why regret in financial decision-making is virtually unavoidable and the value of writing your money story. (0:44:22)

•    Past and upcoming meetups, feedback from our listeners, and a reminder of our 23 in 23 Reading Challenge. (0:47:42)

 

 

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-247-bank-runs-plus-jonathan-clements-on-my-money-journey-episode-discussion/22878

 

Book From Today's Episode:

My Money Journey: How 30 people found financial freedom - and you can too — https://amzn.to/439D5Hw

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Jonathan Clements on Twitter — https://twitter.com/clementsmoney

Jonathan Clements on LinkedIn —https://www.linkedin.com/in/jonathanclements

Jonathan Clements on Facebook — https://www.facebook.com/ClementsMoney

Jonathan Clements — http://HumbleDollar.com

Episode 55: Jonathan Clements — https://rationalreminder.ca/podcast/55

'Bank Runs, Deposit Insurance, and Liquidity' — https://www.journals.uchicago.edu/doi/10.1086/261155

'Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking' — https://www.jstor.org/stable/10.1086/319552

'Why didn't Canada have a banking crisis in 2008 (or in 1930, or 1907, or . . .)' — https://www.jstor.org/stable/43910017

'Long-Horizon Losses in Stocks, Bonds, and Bills: Evidence from a Broad Sample of Developed Markets' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3964908

 

Human beings are undeniably complex, and what motivates us can often be a mystery, even to ourselves. So, how do we go about gathering and analyzing the data that will help us answer the most fundamental questions about our lives and our purpose? The answers may lie in an unexpectedly rich source of knowledge, our regrets. While regret is likely to have a decidedly negative connotation for most of us, it is also extremely powerful and can teach us a great deal about ourselves and what we value. It is an emotion that is present in all of us, and social scientists (like anthropologists and sociologists) have been fascinated by the subject for decades. Today on the show, we are joined by one such expert, Daniel Pink, author of the book The Power of Regret: How Looking Backward Moves Us Forward. In our conversation, Daniel shares details about the research he conducted for his book, how he determined the four main categories of regret, and what we can learn from our regrets by confronting them head-on. We also discuss Daniel's 2011 New York Times Bestselling title, Drive: The Surprising Truth About What Motivates Us, and what he thinks about working from home in light of the COVID-19 pandemic. Daniel is an exceptional storyteller and is highly knowledgeable on the subjects of regret, motivation, and the important role they play in our lives. To learn more about the many facets of regret and how it can help you thrive, be sure to tune in today!

 

Key Points From This Episode:

 

●      Understanding regret as an emotion, why it differs from disappointment, and how regret can help us make better decisions. (0:03:00)

●      The four main types of regret (foundation, boldness, moral, and connections) and the methodology Daniel used to determine them. (0:07:30)

●      The role that outcomes play when it comes to boldness regrets. (0:13:09)

●      Why Daniel believes connection regret is so common, and what regret reveals about our values. (0:14:13)

●      The World Regret Survey that Daniel conducted as a systematic survey of regret, and his findings that regrets of inaction tend to stay with us much longer. (0:17:14)

●      What people can learn from past financial decisions that they regret and the challenge of addressing foundation regrets. (0:20:42)

●      The surprising benefits of regrets and how to learn from them. (0:21:31)

●      How regret anticipation can be used to help people save for retirement. (0:22:46)

●      Daniel's system for addressing feelings of regret, why it's important to confront them rather than wallow in them, and the importance of being kind to yourself. (0:24:01)

●      The overwhelming amount of decisions we make in our lives, when to choose the best versus something that is good enough, and how to optimize future regret. (0:27:56)

●      An overview of the many complex factors that motivate people, intrinsic and external motivators, and how Daniel's research on regret affected his perspective on motivation. (0:31:16)

●      Daniel's thoughts on working from home when considering autonomy, mastery, purpose, and motivation. (0:37:17)

●      The motivational model that Daniel sets out in his book Drive and some of the common misconceptions he has observed in reporting on his book. (0:39:33)

●      Why people are purpose maximizers, not profit maximizers, and how this should impact the leadership of a company. (0:41:26)

●      Daniel's response to the question "How do you define success in your life?" and why he doesn't think about the word 'success' very much. (0:47:08)

 

 

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-246-daniel-h-pink-how-to-use-regret-episode-discussion/22775

 

Books From Today's Episode:

The Power of Regret — https://amzn.to/42HArID

Drive: The Surprising Truth About What Motivates Us — https://amzn.to/40jDpl7

To Sell Is Human — https://amzn.to/3K9M2ci

Free Agent Nation — https://amzn.to/40knovb

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Daniel H. Pink on Twitter — https://twitter.com/danielpink

Daniel H. Pink — https://www.danpink.com/

Goal-setting is essential for personal and professional growth, helping individuals clarify their priorities, stay focused, and achieve success. We are pleased to welcome guests Samantha Lamas and Danielle Labotka to help us unpack the topic of goal-setting and how it relates to finance. Samantha Lamas is a Senior Behavioural Researcher at Morningstar and a recipient of the Montgomery-Warschauer Award for her research in financial planning. Her work centres on investor engagement and the factors that influence an individual's decisions when it comes to investing and managing their finances. As a Behavioral Scientist at Morningstar, Danielle Labotka examines the impact of various cognitive and linguistic factors on investors' financial decisions. Her research involves studying investors' behaviours, preferences, and attitudes in both everyday and financial planning situations. In our conversation with Samantha and Danielle, we gain insights into financial behaviour and decision-making, the biggest barriers to goal-setting, what deeper goals are, and how to focus on them. Then, we speak to Mark McGrath, who is licensed in insurance, holds several professional designations, including a Chartered Investment Manager and a Certified Financial Planner (CFP), and has more than a decade of experience in the industry. Mark tells us the emotional story about his dad, what motivated him to share his experience, and why you need to start thinking about retirement now. Finally, we review a past episode with Dennis Moseley Williams, a book from Will Storr, and go through feedback from the Rational Reminder community. Tune in now!

Content Warning: Some of the discussion in this episode is about suicide. If you or someone you know is struggling with thoughts about self-harm, help is available. In Canada: 1.833.456.4566 or at https://suicideprevention.ca/resources/

 

Key Points From This Episode:

 

•    How we became acquainted with the Morningstar team and background about our guests. (0:02:29)

•    An outline of the common obstacles faced in identifying the correct goals, and how it impacts financial advisors. (0:06:08)

•    Danielle explains the approach used to analyze qualitative data and how the results compared to the Rational Reminder findings. (0:09:07)

•    How the goals identified changed as respondents progressed through the survey, and insights gained from the process. (0:11:23)

•    The main takeaway from the analysis of how people should approach goal-setting and how financial advisors can leverage the research findings. (0:17:53)

•    Outline of current gaps and what is the next step for behavioural research. (0:20:59)

•    Find out what compelled Mark to share the tweet about his dad and he takes us through the story. (0:23:00)

•    How the experience regarding his dad has influenced his work as a financial advisor. (0:40:50)

•    Mark shares how the experience has impacted his approach to life. (0:42:25)

•    A final takeaway message that Mark has for listeners. (0:44:23)

•    Highlights and key takeaways from a past episode with Dennis Moseley Williams. (0:45:52)

•    This week's book review of The Status Game, and why it is a must-read. (0:48:44)

•    Research findings concerning macro socio-economic status and work ethic. (0:54:03)

•    We discuss interesting news and events, riskless assets, the advantages of Twitter, and the latest reviews for the show. (0:57:05)

 

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-245-deeper-goals-and-retiring-with-purpose-discussion-thread/22660

Book From Today's Episode:

The Status Game: On Human Life and How to Play It — https://amzn.to/40vVLix

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Samantha Lamas on Twitter — https://twitter.com/SamanthaLamas4

Mark McGrath on Twitter — https://twitter.com/MarkMcGrathCFP

Samantha Lamas on LinkedIn — https://www.linkedin.com/in/slamas/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/

'Mining for Goals' — http://static.fmgsuite.com/media/documents/8b5abbe8-0bf5-4321-9a4a-e04a82a11597.pdf

In this episode of the Rational Reminder Podcast, Ben Felix and Dan Bortolotti celebrate the show's 7th anniversary with a conversation centered around timeless investing wisdom. Drawing from a vibrant thread in the Rational Reminder community, they unpack dozens of quotes that distill decades of financial insight into actionable mantras. What begins as a curated list of one-liners quickly evolves into a masterclass on the behavioral and practical realities of long-term investing. From "pay yourself first" to "diversification is the only free lunch," Ben and Dan explore how psychological resilience, humility, and clear planning matter more than predictive genius. The quotes spark deep discussions on topics ranging from portfolio construction and risk perception to fees, fear, and investor behavior—each one contextualized with real-world examples.

 

Key Points From This Episode:

(0:04) Celebrating 7 years of the podcast and its growing impact across video and audio platforms.

(1:33) Reflecting on PWL's evolution and the value-aligned advisors looking to join.

(8:00) Introducing the main topic: timeless investing quotes from the Rational Reminder community.

(10:24) "Pay yourself first": Why savings matter more than returns early on.

(14:06) The flaws in one-size-fits-all savings rules like "save 10% of your income."

(15:07) "The investor's worst enemy is himself": Behavioral finance and investor psychology.

(17:17) "This time is different": Templeton's warning against market narratives and FOMO.

(20:31) "Have a philosophy you can stick with": Why strategy persistence matters more than perfection.

(23:59) ARK as a case study: Conviction versus performance-chasing.

(26:38) Buffett on risk: Be ready for 50% drawdowns—even in diversified portfolios.

(28:58) The global market portfolio: Sharpe and Fama's starting point for asset allocation.

(31:50) "Far more money is lost preparing for corrections": Lynch on market timing mistakes.

(35:18) Volatility is emotional, not just mathematical—especially in crises like COVID or 2008.

(40:29) Charles Ellis: "Risk is not having the money when you need it."

(42:08) "Volatility is the price of admission": Embracing risk to pursue long-term returns.

(44:30) Ken Fisher: "Normal returns are extreme." Why market behavior is rarely average.

(47:16) "Risk is what's left when you think you've thought of everything." Planning for the unknown.

(49:07) Life has a fat tail: LTCM and the perils of underestimating extreme events.

(50:25) "Make sure you're at the table, not on the menu": Cochrane on avoiding bad financial products.

(52:31) Bogle: "We get precisely what we don't pay for." Why low-cost beats high-fee.

(55:13) Trading and over-monitoring: Why "doing less" often means better returns.

(57:02) "It ain't what you don't know…": Humility in the face of market uncertainty.

(59:26) "Diversification is the only free lunch": Reducing risk without reducing expected return.

(1:00:35) Bogle: "Don't look for the needle. Just buy the haystack."

(1:02:38) Focus on what you can control: Savings, costs, asset allocation—not market returns.

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind
Rational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Dan Bortolotti — https://pwlcapital.com/our-team/

Dan Bortolotti on LinkedIn — https://ca.linkedin.com/in/dan-bortolotti-8a482310

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

When it comes to the world of investing, there are many options available to consumers. The range of financial products available can be overwhelming and confusing. Additionally, investing is not only about the rate of return but also about what you are investing for and why. To help us unpack this complicated subject is Charles Ellis, a highly respected investment consultant and founder of Greenwich Associates, a strategy firm focused on financial institutions. He is also a famous author and has written several books on the topic of finance and investment, such as Winning the Loser's Game which provides readers with insights into making the best financial decisions in an increasingly unpredictable market. In our conversation, we discuss why indexing is the better investment option, how the investment space has changed over time, tailoring your investment decisions to suit your needs and desires, and why looking at the bigger financial picture is essential. We also delve into why investors can be their own worst enemies, what advisors and investors should avoid, the theme of his book Inside Vanguard, various investment strategies, and much more. Tune in and hear insights on indexing, wise investing, and how to win the ultimate game from industry legend Charles Ellis!

 

Key Points From This Episode:

 

•    Charles explains what he means by 'a loser's game' and provides examples. (0:03:51)

•    How the perception of active management has changed since publishing Winning the Loser's Game. (0:08:00)

•    He unpacks how the market and market competition has changed since 1975. (0:10:33)

•    Whether the sentiment towards active management has become too negative. (0:17:24)

•    Discover why Charles thinks indexing is the best and preferred investment option. (0:19:22)

•    His opinion on low-cost systematic strategies that seek higher expected returns in the market by owning riskier stocks. (0:24:55)

•    Why investors and advisors should avoid trying to time or beat the market. (0:27:19)

•    The value and importance of a well-defined investment policy statement. (0:33:34)

•    Find out how investors can protect themselves from themselves. (0:34:58)

•    An underappreciated approach that investors can take to be more successful. (0:36:26)

•    Hear whether fee differentials between index and active strategies are understood well. (0:37:17)

•    Charles shares how his mindset has changed over the course of his career. (0:41:47)

•    Find out if institutions and endowments respect low-cost index investing. (0:42:42)

•    What he thinks about bringing exotic asset classes to retail investors. (0:44:45)

•    Reasons why investment management should be considered a full-time profession. (0:46:50)

•    The biggest opportunities he sees in future for investment management. (0:49:20)

•    Hear about the difference between price discovery and value discovery. (0:50:09)

•    Discover why Vanguard has been so successful as a company. (0:53:27)

•    The theme of his book, Inside Vanguard, and if it relates to other businesses. (0:58:17)

•    Lessons he has learned regarding personal motivation and productivity. (1:00:28)

•    Charles tells us his definition of success. (1:03:35)

•    An outtake from the episode: the role of luck. (1:05:21)

 

 

Participate in our 23 in 23 Reading Challenge:

23 in 23 Reading Challenge — https://rationalreminder.ca/23in23

23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/

 

Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-244-the-losers-game-episode-discussion/22558

 

Books From Today's Episode:

Winning the Loser's Game: Timeless Strategies for Successful Investing — https://amzn.to/3FrNKmt

Inside Vanguard — https://amzn.to/3TlwrcG

What It Takes: Seven Secrets of Success from the World's Greatest Professional Firms — https://amzn.to/3Thgm7z

Capital: The Story of Long-Term Investment Excellence — https://amzn.to/3FpiHb5

Figuring It Out: Sixty Years of Answering Investors' Most Important Questions — https://amzn.to/3LknZZ8

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
 Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

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Follow us on Twitter — https://twitter.com/RationalRemind

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Cameron on Twitter — https://twitter.com/CameronPassmore

Debt can play an essential role in financial planning in several ways, such as financing large purchases, building credit, managing cash flow, and leveraging investments. However, it's important to remember that taking on too much debt can also have negative consequences that could impact your financial future. Therefore, it's vital to carefully consider your options and ensure that any debt you take on is manageable and aligns with your overall financial goals. In this episode, we talk about the essential aspects of debt and the role of debt in financial planning, and we unpack the two major forms of debt. Learn about debt in financial planning, consumption smoothing, the mindset and psychology behind debt, the risk that comes with debt, how credit cards impact how people interact with their money, integrated financial planning, and important aspects of mortgages. We also review a past episode with guest Dan Solin and the book, The Five Most Important Questions, which provides readers with a tool for self-assessment and transformation concerning productivity in the workplace.

 

Key Points From This Episode:

 

•   The role of debt in financial planning and the distinction between good and bad debt. (0:08:16)

•   A brief overview of mortgages, credit cards, and their associated risks. (0:11:31)

•   Consequences of borrowing money at a high-interest rate, and how financial literacy impacts effective debt management. (0:13:20)

•   The psychological aspects related to debt and consumer spending. (0:16:10)

•   Outlining the psychological interactions of established debt on mental well-being. (0:18:15)

•   Credit cards, what they offer, and their psychological effect on paying. (0:22:10)

•   Costs associated with not using a credit card. (0:28:45)

•   Why mortgage debt is considered good debt for the borrower and the different facets of mortgages to consider. (0:32:48)

•   The difference between fixed and adjustable mortgage rates and which is better. (0:37:25)

•   Highlights and key takeaways from a past episode with Dan Solin. (0:46:06)

•   A review of the book, The Five Most Important Questions and why we recommend it. (0:47:47)

•   How the questions from the book relate to household decision-making. (0:51:18)

•   A testament to Dan Wheeler and his contribution to the field of finance. (0:52:55)

•   Recent interviews with Ben, upcoming guests, other interesting financial content, and our book recommendations. (0:56:33)

•   A 23 in 23 book challenge update, feedback on the show, and upcoming meetups. (01:01:35)

 

 

 

Participate in our 23 in 23 Reading Challenge:

23 in 23 Reading Challenge — https://rationalreminder.ca/23in23

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Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-243-the-role-of-debt-in-financial-planning-discussion-thread/22433

 

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

 

Extra References:

The role of debt

'Life Cycle, Individual Thrift, and the Wealth of Nations' — https://www.jstor.org/stable/1813352

'Diversification Across Time' — https://jpm.pm-research.com/content/39/2/73

'Debt literacy, financial experiences, and over indebtedness' — https://www.researchgate.net/publication/282436829_Debt_Literacy_Financial_Experiences_and_Over_Indebtedness

'Restoring Rational Choice: The Challenge of Consumer Financial Regulation' — https://scholar.harvard.edu/files/campbell/files/elylecturejan182016.pdf

'Attitudes towards Debt and Debt Behavior' — https://onlinelibrary.wiley.com/doi/abs/10.1111/sjoe.12419

'Expenditure Cascades' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1690612

'Consumer debt and satisfaction in life' — https://www.researchgate.net/publication/341564180_Consumer_debt_and_satisfaction_in_life

'Good credit, bad credit: The differential role of the sources of debt in life satisfaction' — https://onlinelibrary.wiley.com/doi/full/10.1111/joca.12388

'Debt and Overindebtedness: Psychological Evidence and its Policy Implications' — https://spssi.onlinelibrary.wiley.com/doi/full/10.1111/sipr.12074

'Winning the Battle but Losing the War: The Psychology of Debt Management' — https://www.researchgate.net/publication/249644425_Winning_the_Battle_But_Losing_the_War_The_Psychology_of_Debt_Management

'Reducing debt improves psychological functioning and changes decision-making in the poor' —https://www.researchgate.net/publication/332472709_Reducing_debt_improves_psychological_functioning_and_changes_decision-making_in_the_poor

 

Credit cards

'The Effect of Payment Transparency on Consumption: Quasi-Experiments from the Field' — https://www.jstor.org/stable/40216497

'Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay' — https://www.researchgate.net/publication/233496571_Always_Leave_Home_Without_It_A_Further_Investigation_of_the_Credit-Card_Effect_on_Willingness_to_Pay

'Present-Biased Preferences and Credit Card Borrowing' — https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/3531/AEJ_Meier_Sprenger.pdf

'How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices' — https://www.jstor.org/stable/10.1086/657331

'Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in the United States and Canada' — https://www.bankofcanada.ca/2021/02/staff-working-paper-2021-8/

'Popular Personal Financial Advice versus the Professors' — https://www.nber.org/papers/w30395

'Buy Now, Pay Later Credit: User Characteristics and Effects on Spending Patterns' — https://www.nber.org/papers/w30508

 

Mortgages

'Report of the Household Finance Committee' — https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/HFCRA28D0415E2144A009112DD314ECF5C07.PDF

'Household Risk Management and Optimal Mortgage Choice' —https://www.jstor.org/stable/25053944

'Failure to refinance' — https://www.nber.org/papers/w20401

'A Model of Mortgage Default' — https://scholar.harvard.edu/files/campbell/files/mortdefault13022014.pdf

 

The intersection between economics and psychology makes the subject of personal finance complex. To help us elucidate this topic is personal finance reporter at the Globe and Mail and the author of the bestselling book "Money Like You Mean It, Personal Finance Tactics for the Real World.", Erica Alini. Her journey into finance journalism began when she started working for the Wall Street Journal immediately after the financial crisis of 2007/08. Since then, Erica has become an accomplished writer and journalist, having worked for many respected organizations. She is also the author of a best-selling book, Money Like You Mean It, which provides readers with a nuanced understanding of the economic forces that shape financial struggles and how to overcome them. In this conversation, we talk to Erica about the importance of knowing yourself and your debt, the money bucket system, and the definition of financial abuse. We also discuss the various types of debt traps people should avoid, the dangers of micropayments, and what to be aware of when looking for a mortgage, as well as advice for finding a reliable mortgage broker, the avalanche versus the snowball model, and much more. Tune in to discover how to take back control of your finances and avoid the burden of debt with personal finance expert, Erica Alini.

 

Key Points From This Episode:

 

•    Why Erica thinks Canadians have so much household debt. (0:02:24)

•    Strategies that people can implement to avoid the debt trap. (0:04:58)

•    Erica's opinion on budgeting as a tool to manage spending. (0:08:34)

•    How the 'bucketing model' changes for a couple as opposed to an individual. (0:12:10)

•    How couples with different incomes should share expenses. (0:14:17)

•    Signs of an unhealthy financial relationship between partners. (0:17:06)

•    The amount of money an emergency fund should have. (0:21:17)

•    What consumers should know about the different debt products available. (0:24:08)

•    Discover the downside of taking a mortgage with the lowest interest rate. (0:33:55)

•    Whether or not an independent mortgage broker is better than a bank. (0:38:05)

•    Important insights about credit scores. (0:39:51)

•    Whether people should rent or buy property. (0:45:13)

•    How the traditional sense of a good job with sufficient income has changed. (0:50:34)

•    Erica's approach to explaining the risk of investing in stocks. (0:56:46)

•    Insights about the math of a financial decision versus the psychology. (0:58:25)

•    How Erica defines success in her life. (1:00:29)

 

 

Extra: Questions to ask a mortgage broker:

1.     What kind of penalty will you have to pay for breaking your contract?

2.     Is the cap on your lump-sum payments 10 percent or 20 percent of your mortgage balance?

3.     Will you be able to make lump-sum payments any time or just once a year?

4.     Can you double your payments?

Participate in our 23 in 23 Reading Challenge:

23 in 23 Reading Challenge — https://rationalreminder.ca/23in23

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Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-242-erica-alini-personal-finance-tactics-for-the-real-world-discussion-thread/22326

Book From Today's Episode:

Money Like You Mean It — https://www.dundurn.com/books_/t22117/a9781459748675-money-like-you-mean-it

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Erica Alini on Twitter — https://twitter.com/ealini