The Rational Reminder Podcast

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

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/ 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

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 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-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 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-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

Today we are spending most of the episode going further into the basic concepts that ground good financial practices and the personal finance topics that are often taken for granted. The three main areas we unpack in this episode are the cost of living, savings capacity, and emergency funds, and though these can be viewed as basic ideas, there are always areas of the simplest variety that deserve more attention. Listeners can also expect to hear a little more about what our role as financial advisors constitutes on a daily basis, as we respond to an audience member's question about how to conceptualize the profession. We welcome Dr. Wendall Mascarenhas back to the show for a brief cameo in which he shares his reading habits and approach with us, which contrasts with some of the opinions often expressed by other guests, so make sure to stay tuned in for that. We also find time for a quick recap of an old episode we had with Rick Ferri and a book review of Rethink Lead Generation by Tom Shapiro.   Key Points From This Episode:   •    Discussing the cost of living and why an accurate picture of your expenses is so important. (0:04:08) •    Working out your saving capacity and when and how to save. (0:21:32) •    General advice for emergency funds and further considerations for households. (0:32:51) •    Recapping our episode with Rick Ferri on his index investing philosophy and the lasting impact of John Bogle. (0:40:21) •    This week's book review of Rethink Lead Generation by Tom Shapiro. (0:42:26) •    Dr. Wendall Mascarenhas talks about his reading habits and his prioritization of reading for pleasure. (0:49:23) •    A few favourite book recommendations from Dr. Wendall Mascarenhas. (0:58:12) •    Current debates around ChatGPT and the sources of its information. (1:06:18) •    Information about upcoming meetups for the Rational Reminder community. (1:09:38) •    Further explorations on our recent goals survey and the input we received from Morningstar. (1:11:00)     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/   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 Dr. Wendall Mascarenhas — https://www.fcos.ca/meet-dr-mascarenhas/ Teeth & Titanium Podcast — https://podcasts.apple.com/us/podcast/teeth-titanium/id1514989809 Extra References:   Savings capacity 'Popular Personal Financial Advice versus the Professors' — https://www.nber.org/papers/w30395 'The Life-Cycle Model Implies That Most Young People Should Not Save for Retirement' — https://www.aei.org/research-products/journal-publication/the-life-cycle-model-implies-that-most-young-people-should-not-save-for-retirement/ 'Exponential-Growth Bias and Lifecycle Consumption' — https://www.jstor.org/stable/43965317 'Save More Tomorrow™: Using Behavioral Economics to Increase Employee Saving' — https://www.jstor.org/stable/10.1086/380085 Emergency fund 'What Matters to Individual Investors? Evidence from the Horse's Mouth' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12895 'Millionaires Speak: What Drives Their Personal Investment Decisions?' — https://www.nber.org/papers/w27969 'Emergency savings for low-income consumers' — https://www.irp.wisc.edu/publications/focus/pdfs/foc301c.pdf 'Emergency Saving and Household Hardship' — https://www.researchgate.net/publication/269468202_Emergency_Saving_and_Household_Hardship 'Savings Policy and Decisionmaking in Low-Income Households' — https://www.researchgate.net/publication/289069441_Savings_Policy_and_Decisionmaking_in_Low-Income_Households 'Insufficient Funds: Savings, Assets, Credit, and Banking Among Low-Income Households' — https://www.jstor.org/stable/10.7758/9781610445887 'Financially Fragile Households: Evidence and Implications' — https://www.nber.org/papers/w17072 'One in four Canadians are unable to cover an unexpected expense of $500' —https://www150.statcan.gc.ca/n1/daily-quotidien/230213/dq230213b-eng.htm 'Who Should Buy Long-Term Bonds?' — https://www.jstor.org/stable/2677900 ‘Mental accounting matters' — https://people.bath.ac.uk/mnsrf/Teaching%202011/Thaler-99.pdf 'The Bucket Approach for Retirement: A Suboptimal Behavioral Trick?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3274499 'Should Households Establish Emergency Funds' —https://www.proquest.com/openview/042e8ea8f8e3986ec6c93e5cfca265c0/1?pq-origsite=gscholar&cbl=38873 'Is an All Cash Emergency Fund Strategy Appropriate for All Investors?' — https://www.financialplanningassociation.org/article/all-cash-emergency-fund-strategy-appropriate-all-investors 'Building emergency savings through employer-sponsored rainy-day savings accounts' — https://www.journals.uchicago.edu/doi/full/10.1086/708170 'Double Mental Discounting: When a Single Price Promotion Feels Twice as Nice' — https://journals.sagepub.com/doi/10.1509/jmr.15.0559 'The Role of Mental Accounting in Household Spending and Investing Decisions'  — https://onlinelibrary.wiley.com/doi/10.1002/9781119440895.ch6 'Emergency Savings and Financial Security: Insights from the Making Ends Meet Survey and Consumer Credit Panel' — https://www.consumerfinance.gov/data-research/research-reports/emergency-savings-financial-security-insights-from-making-ends-meet-survey-and-consumer-credit-panel/

The decisions we make may be further out of our control than we’d like to imagine. Today we are joined by Professor Eric J. Johnson to discuss choice architecture and its role in financial decision-making. Eric is a decision science expert and the author of the book, The Elements of Choice: Why the Way We Decide Matters. In this episode, we learn about the various factors that impact not only decision-making but the effort required to make a decision. Eric shares his philosophy on free will and shares advice for making important decisions and guiding clients to find the right choice as a financial advisor. Tune in to discover how to minimize the influence of the choice architect and take charge of your decisions!   Key Points From This Episode:   •    Introducing Professor Eric J. Johnson and this week’s topic: financial decision-making. (0:00:26) •    The hidden partner that accompanies us when we make decisions. (0:03:42) •    How design choices impact our decisions. (0:04:54) •    The plausible path: what it is and how we choose it. (0:06:00) •    Advice for making important decisions. (0:08:21) •    The impact of recent events on decision-making. (0:10:33) •    How to be your own choice architect. (0:12:15) •    Factors impacting the effort required to make a decision. (0:13:22) •    The impact of default choices and what influences them. (0:16:09) •    How choice architecture can help people find the right choice. (0:20:17) •    The influence of sorting on what people choose. (0:25:18) •    How the order of options being presented and the way they’re described impact decisions. (0:26:54) •    How exponential growth bias influences long-term decisions and how financial advisors can help clients understand the impact. (0:31:45) •    The effectiveness of Netflix as a choice engine, the role choice engines play in educating users, and the value of just-in-time education. (0:35:04) •    The impact of social media on people’s attention and intentions. (0:40:08) •    Eric shares his philosophy on free will and the factors impacting our choices. (0:42:55) •    How to minimize the influence of the choice architect. (0:44:16) •     What financial advisors can do to be most useful to their clients. (0:46:00) •    How Eric defines success in his life. (0:50:12)     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-240-prof-eric-j-johnson-choice-architecture-and-financial-decisions-discussion-thread/22037   Book From Today’s Episode: The Elements of Choice — https://theelementsofchoice.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 Prof. Eric J. Johnson on Twitter — https://twitter.com/profericjohnson

The concept of financial math is another foundational element of investing and good economic decision-making, and today we are carrying on the recent string of shows dealing with these kinds of fundamental aspects. First, we have a look at the central idea of the time value of money, and how this plays into many areas of our finances, such as retirement planning, spending, investing, and so on. From there, the conversation goes on to cover exponential functions, the tradeoffs between saving and spending, and regrets. Today's 60-second episode recap is of the great conversation we had with David Blitzer back on Episode 54, and we also do a quick book review of the potentially life-changing How to Live on 24 Hours a Day. We finish off this punchy episode with some news from the community and some thoughts on the ways in which competition and repetition can improve a skill.   Key Points From This Episode:   •    Introducing the time value of money, as well as the concepts of compounding and discounting. (0:03:07) •    Applying financial math in different ways to varied questions. (0:11:34) •    Lessons from Cameron's first business selling worms. (0:18:15) •    The challenges and biases associated with exponential functions. (0:20:27) •    Spending and saving; illuminating the reality of the tradeoffs. (0:27:26) •    The biggest problems of foundational regrets. (0:35:40) •    Looking back on the episode with David Blitzer on indexing. (0:42:33) •    Reviewing the 1908 book, How to Live on 24 Hours a Day. (0:44:25) •    TV shows, podcast reviews, updates from the community and more. (0:49:05) •    Incentives and leaderboards; unpacking the impacts of practice and competition. (0:56:43)       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-239-the-math-of-financial-planning-discussion-thread/21899   Book From Today’s Episode: How to Live on Twenty-Four Hours a Day — https://amzn.to/3JLyDaz   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

A large portion of what we talk about on this show boils down to decision-making, and today we have our focus squarely on the fundamentals of this process. Professor Ralph Keeney joins us to discuss some of the simplest and most profound elements of decisions, and why we so often miss these aspects. Ralph is a true expert on decision analysis, and his systematic process for decision-making, as laid out in his new book, Give Yourself a Nudge, has truly life-altering potential for anyone looking to improve their future. The book and this conversation are jam-packed with insightful and understandable ideas and examples, including clarifying objectives, the vital role of our values, generating alternatives, and a comparison between decision problems and decision opportunities. Ralph lays out a great way to get started on the path to better decisions, so make sure to join us to hear it all.     Key Points From This Episode:   The focus of Ralph's research and how he articulates the importance of our conscious decisions. (0:03:48)The shortcomings of the trial and error approach that many of us naturally employ. (0:10:46)First steps towards being a better decision-maker; using personal decisions for practice. (0:13:08)Ralph explains his conception and use of the idea of 'nudges'. (0:14:30)A better awareness of the often-neglected front end of decision-making. (0:17:38)An explanation of Ralph's value-focused decision-making process. (0:22:25)Mistakes made around retirement decisions. (0:30:30)Why clarifying your personal decision values can be so difficult. (0:32:15)The process of translating values into objectives. (0:36:11)Ralph's important question around the different possible situations in the future. (0:41:49)Simple processes and common pitfalls for generating alternatives. (0:43:19)Exploring decisions that require third-party permission or commitment. (0:47:59)Differentiating between decision problems and decision opportunities. (0:52:27)The most important concepts for embodying value-focussed decision-making. (0:57:44)The role of financial advisors in aiding their clients to make good decisions. (1:03:28)Application of these ideas toward living a good life. (1:07:46)Ralph's simple definition of success in his own life. (1:10:53)     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-238-prof-ralph-keeney-decision-analysis-and-value-focused-thinking-discussion-thread/21795   Books From Today’s Episode: Give Yourself a Nudge — https://amzn.to/3WKMwZx Smart Choices — https://amzn.to/3Ho0vP6 Value-Focused Thinking — https://amzn.to/3HgC7yH Decisions with Multiple Objectives — https://amzn.to/3DywYRH   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. Ralph Keeney — https://ralphkeeney.com/

Identifying your personal values is the foundation for making future decisions. In this episode, we discuss the profound ways in which personal values impact financial decision-making and share concrete steps to identify both your strategic and means objectives. Ben candidly shares his own objectives and expands on the other considerations involved in making major decisions. We then jump to the less abstract topic of 2022 returns, providing a thorough overview of the tilts and their consequences, followed by a brief summary of an early episode with Shane Parrish. In the latter half of this episode, we are joined by Zoobean co-founder and CEO Felix Lloyd to talk about Beanstack, the tech platform for reading, and Readwise co-founder Daniel Doyon. We also tackle the slightly left-field topic of marketing from a behavioural science standpoint through the lens of Nancy Harhut’s tellingly-titled book, Using Behavioral Science in Marketing. Tune in for upcoming developments in the Rational Reminder community, and to discover how to make financial decisions that align with who you are and who you want to become!   Key Points From This Episode:   How personal values impact financial decision-making. (0:00:25)How to identify your life’s values and objectives. (0:07:21)The significance of means objectives and strategic objectives, and how to identify them. (0:16:25)Ben’s strategic life objectives and means objectives. (0:18:27)Other considerations when making major decisions. (0:19:14)An overview of 2022 returns. (0:22:43)A summary of episode 19 with Shane Parrish. (0:28:59)A brief interview with Zoobean co-founder and CEO Felix Lloyd to talk about Beanstack, the tech platform for reading. (0:31:15)Cameron’s review of Using Behavioral Science in Marketing by Nancy Harhut. (0:43:09)What sells (from a behavioural science standpoint). (0:47:15)A brief interview with Readwise co-founder Daniel Doyon. (0:52:52)Summaries of recent Freakonomics, 10% Happier, and Capital Allocators (1:04:05)Developments in the Rational Reminder community. (1:05:30)Upcoming podcast guests and recent podcast reviews. (1:10:25)      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-237-who-are-you-and-who-do-you-want-to-be-discussion-thread/21665   Book From Today’s Episode: Using Behavioral Science in Marketing — https://amzn.to/3wuDnJO   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 Doyon on Twitter — https://twitter.com/deadly_onion Felix Lloyd on Twitter — https://twitter.com/fblloyd Felix Lloyd on LinkedIn —  https://www.linkedin.com/in/fblloyd/ Beanstack — https://www.beanstack.com/ Zoobean on Instagram — https://www.instagram.com/zoobean Readwise — https://readwise.io/

Our guest today, Harold Gellar, is a lawyer who helps clients dealing with fraud and negligence perpetrated by financial advisors, and is a passionate advocate for investors and their rights. Tuning in you’ll hear details of some of the most common issues Harold has come across in his work, along with his practical advice for financial advisors and investors. We discuss the importance of clear communication between advisors and their clients, the concept of KYC (Know Your Client), and simple steps investors can take to ensure that their advice is properly understood by their clients. Harold goes on to provide an outline of factors that could make individuals vulnerable to negligent financial advice (such as marital problems or a sudden health crisis) and how to gain perspective in extreme situations. We also discuss the key differences between salespeople and financial advisors, the type of credentials investors should be looking for, and how regulation needs to be modernized in Canada for investors to be properly protected. Harold has been in this industry for a long time and is immensely knowledgeable on the subject of fraud and negligent investment advice.   Key Points From This Episode:   An overview of Harold’s practice and how he helps clients get their money back. (0:03:22)The difference between salespeople and financial advisors and the vulnerability of investors. (0:05:40)Practical advice for investors to ensure their financial advisor is doing due diligence and the concept of KYP (Know Your Product). (0:10:46)The concept of KYC (Know Your Client) and how to be sure your financial advisor understands you as a client. (0:15:32)The type of individuals who are particularly vulnerable to negligent financial advice, and why we can all be vulnerable in certain situations. (0:18:33)The role of the trusted contact person in Canada specifically, and how to know when to take the advice of your financial advisor. (0:25:13)Harold’s thoughts on what is causing Canada’s slow adoption of low-cost index funds. (0:32:27)How financial advisors earn money and why we need an updated regulatory system. (0:34:21)Harold’s approach to crypto and why he classifies it as a speculative asset. (0:41:50)Examples of negligence when the investment made was too conservative and why clear communication between client and advisor is crucial. (0:44:20)The worst insurance products that Harold has come across. (0:46:10)What financial advisors should be doing to make sure that their advice is properly understood by their clients. (0:49:23)What investors can do to make sure that they understand what the advisor is saying to them. (0:51:16)Ontario’s recent implementation of title regulation for financial planners and advisors and some of its key flaws. (0:52:16)The credentials that investors should expect from their financial advisors. (0:55:34)The value of good advice when it comes to financial planning and investment, and what motivates Harold to be such a strong investor advocate. (0:56:56)     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-236-harold-geller-i-sue-financial-advisors-discussion-thread/21500   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 Harold on Linkedin — https://www.linkedin.com/in/harold-geller-25094033/ Geller Law — http://gellerlaw.ca '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

As we kick off the new year, we wanted to look back at our biggest areas of learning from last year. So this episode serves as a great companion piece to our year-end recap from a couple of weeks ago, but the focus here is on the personal impact that specific guests, ideas, and topics had on each of our lives. We cover ICAPM thinking, the nature of money, financial literacy, setting financial goals, the history of index funds, and more. For the second half of the show, we are joined by the amazing Shaun Tomson, former world surfing champion, author, and renowned speaker. Shaun is here to talk a bit about his latest book, co-authored with Noah benShea, entitled The Surfer and the Sage. We get to hear about Shaun's belief in the power of words, the specific conditions that can enforce this power, the lessons he has taken from a life in the ocean, and how the tragedy of losing his son influenced his life's trajectory. Join us to catch it all.   Key Points From This Episode:   Differentiating between the CAPM and ICAPM theories. (0:08:02)Long-run risks in stocks and bonds; demystifying safety claims.  (0:14:46)Further illumination on the concept of money and how to think about it. (0:24:27)Learnings around the empirical side of financial literacy. (0:31:00)Improved setting of financial goals and common mistakes that many of us make. (0:32:24)Filling in the gaps in an understanding of the history of index funds. (0:35:57)A one-minute recap of our episode with Allison Schrager from last year. (0:37:47)A quick review of Shaun Tomson's book, The Surfer and the Sage. (0:39:38)Shaun explains the significance of the wave as a metaphor. (0:43:28)The tragic passing of Shaun's son in 2006 and how this redirected his life's purpose. (0:45:10)Shaun explains his CODE method for transformation. (0:49:35)The significance of the structure of the book and the motivation behind it. (0:56:38)Unpacking the importance of purpose when making financial decisions. (0:59:40)Shaun's tactical recommendations; resilience, hope, optimism, and discipline. (1:05:44)Upcoming book recommendations for our 23 in 23 Reading Challenge. (1:19:22)   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-235-top-learnings-from-2022-plus-23-in-23-special-guest-shaun-tomson-discussion-thread/21332    Books From Today’s Episode: The Surfer and the Sage: A Guide to Survive and Ride Life's Waves — https://amzn.to/3GytVJV The Code: The of Power of "I Will" — https://amzn.to/3ZEMUvg Surfer's Code: 12 Simple Lessons for Riding Through Life — https://amzn.to/3VZIcFb   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 Shaun Tomson on Twitter — https://twitter.com/shauntomson Shaun Tomson on Instagram — https://www.instagram.com/shauntomson/ Shaun Tomson on Linkedin — https://www.linkedin.com/in/shaun-tomson-42a57213/ Shaun Tomson — https://shauntomson.com/ Shaun Tomson's I Will Form — https://buzzy.buzz/kiosk/3676e3c13ae389a80dd5774d 'The Code Method for Families' — https://shauntomson.com/wp-content/uploads/2020/04/CODE-METHOD-FOR-FAMILIES.pdf ‘The Surfer and the Sage: Trailer' — https://www.dropbox.com/s/wn0q3r0gf006tl6/TrailerUSETHISONE.mp4?dl=0 'Generating Objectives: Can Decision Makers Articulate What They Want?' — https://pubsonline.informs.org/doi/abs/10.1287/mnsc.1070.0754?journalCode=mnsc 'Eyes on the Prize: The Preference to Invest Resources in Goals Over Means' — https://www.anderson.ucla.edu/documents/areas/fac/marketing/Shaddy/investing_goals.pdf 'Counteracting obstacles with optimistic predictions' — https://pubmed.ncbi.nlm.nih.gov/20121310/ 'Immediate Rewards Predict Adherence to Long-Term Goals' — https://journals.sagepub.com/doi/full/10.1177/0146167216676480 'Stocks for the Long Run? Sometimes Yes. Sometimes No.' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3805927

Few people have impacted the way the world works, and today, we have the privilege of speaking to one of them. Professor Robert C. Merton is the Distinguished Professor of Finance at The Massachusetts Institute of Technology (MIT) Sloan School of Management and Professor Emeritus at Harvard University. He has a Ph.D. in Economics from MIT and is currently the Resident Scientist at Dimensional Fund Advisors. Professor Merton was awarded the Alfred Nobel Memorial Prize in Economic Sciences in 1997 for his work establishing a new method to determine the value of derivatives. He also created the Intertemporal Capital Asset Pricing Model (ICAPM), a popular tool to help advisors make informed financial decisions and understand market trends. In our incredible conversation, we cover portfolio theory, moving from Capital Asset Pricing Model (CAPM) to the Intertemporal Capital Asset Pricing Model (ICAPM), and how financial models work. We also discuss the difference between the value of your capital and the value of the cash flow that can come from that capital, why size can't be a factor, what aspects to consider when calculating the worth of an account, and the definition of market efficiency. We also delve into retirement, how to safely invest for it, what pitfalls to avoid, and how retirement funds may change over time. He also shares his opinion about some popular financial advise and what the roles of financial advisors should be. For all this and more, tune in to hear from the man behind the model and Nobel laureate, Professor Robert C. Merton!   Key Points From This Episode:   We start with Professor Merton describing the concept of market efficiency. (0:04:28)He explains the basics of his ICAPM asset pricing model. (0:09:10)How portfolio theory changes when moving from single-period to multi-period. (0:10:46)Hear a practical example of expected returns changing over time. (0:14:15)Why ICAPM is dependent on the sensitivities to risk of an individual investor. (0:22:52)Find out how to determine if the correct proxy has been identified for a risk. (0:25:34)Learn how home country bias fits into portfolio choice from an ICAPM hedging perspective. (0:31:54)The definition of a risk-free asset and how it changes with time. (0:33:24)What influence the time horizon should have on the mix between stocks and bonds in an investor’s portfolio. (0:35:33)His opinion about young investors using leverage to make investments. (0:41:50)What people should be doing to get more accessibility to leverage. (0:47:39)Professor Merton tells us who should focus on value stocks and growth stocks. (0:51:34)Discover what makes retirement income a difficult problem to solve and tips to ensure your retirement. (0:56:47)We discuss using Monte Carlo simulations to estimate how much people can spend in retirement. (1:09:04)He provides insight into how to get more from your retirement investment. (1:13:04)Whether nominal annuities are considered low-risk assets for retirees. (1:16:48)An overview of the impact mathematical models have had on the finance sector. (1:20:12)Areas of finance practice that are lagging behind the financial models. (1:27:35)Hear what popular financial advice Professor Merton thinks is misguided. (1:33:22)Ways his work on option pricing has impacted society. (1:41:26)The role he sees for financial advisors. (1:45:42)Why he decided to join Dimensional Fund Advisors. (1:48:54)Professor Merton unpacks the definition of product design. (1:52:14)Stay listening for the extended discussion. (1:57:24)   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-234-prof-robert-c-merton-icapm-retirement-and-models-in-finance-discussion-thread/20748     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. Robert C. Merton — https://robertcmerton.com/

It has been an amazing year for the podcast. We have had some incredible guests during 2022 who have provided us and listeners with insights and thought-provoking ideas about the world of finance. We covered a lot of ground and to wrap up the year we decided to recap some of our favourite moments for listeners. In this episode, we highlight the many themes covered during this year, such as the basics of investing, stocks and bonds, how to make wise investment decisions, gender inequality, asset management, index funds, market trends, and portfolio management. We also highlight some of the indirectly topics indirectly related to finance such as the value of happiness, enjoying the pursuit of happiness, the importance of goal setting, and much more. Join us as we reflect on some of our best moments from the year and provide an overview of the many vital lessons we have learned in this final episode of the year for the Rational Reminder podcast.   Key Points From This Episode:   Mac McQuown explains how the data revolution changed the game of investing. (0:09:05)Robin Wigglesworth and tracking the performance of portfolios in the 60s. (0:12:56)Professor Fama shares what it is like to see the impact of his academic work on the practice of asset management. (0:16:02)Gus Sauter tells us about the role the University of Chicago played in the index fund revolution. (0:18:41)Professor Fama unpacks what it means for a market to be efficient. (0:20:52)Gerard O’Reilly and the differences in the types of market strategies available. (0:24:27)Professor Betermier shares his research from multiple papers concerning tendencies towards growth and value stocks. (0:28:50)Eduardo Repetto tells us whether having a portfolio consisting of 100% small-cap value stocks makes sense. (0:36:06)Professor Koijen explains whether index funds distort market prices and make markets less efficient. (0:40:30)Professors Berk and van Binsbergen discuss if it is possible to find skilled fund managers before they are absorbed by their fund. (0:43:44)Professor Cederburg explains how data sets can be upwardly biased and why you need to be aware of it when looking at data. (0:48:15)Bill Janeway describes the three-player game regarding investments. (0:50:51)Professor Phalippou compares the performance of private equity relative to public equities. (0:53:42)Antti Ilmanen tells us how investors can stick with an investment strategy during times of low performance. (0:59:10)Professor List tells us how often people should check their investment portfolios. (1:01:56)Leonard Mlodinow explains how the rational mind and the emotional mind are intertwined. (1:04:56)Professor Edmans’s Grow the Pie and making the world a better place. (1:07:27)Rebecca Walker outlines the effect learning about money has on people. (1:11:15)Colleen Ammerman describes the current state of women in the workplace. (1:13:21)Find out why the pursuit of a goal should be enjoyable with Professor Fishbach. (1:15:40)Andrew Hallam talks about life satisfaction after middle age and how to get there sooner. (1:20:28)Jay van Bavel details the effect of group identity on goal setting. (1:23:08)Professor Frank unpacks the relationship between the consumption of luxury goods and happiness. (1:26:55)Professor Bohns provides insight into why people are under-confident in their social lives. (1:31:01)Professor Fama reveals how many hours a day the brain can handle deep work. (1:34:24)Cassie Holmes and why happiness is a good thing from a scientific perspective. (1:35:30)Colonel Chris Hadfield shares the lesson he learned as an astronaut that he applies to his everyday life. (1:38:52)   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-233-a-year-in-review-discussion-thread/20856   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 Episode 182: John 'Mac' McQuown — https://rationalreminder.ca/podcast/182 Episode 184: Robin Wigglesworth — https://rationalreminder.ca/podcast/184 Episode 186: Andrew Hallam — https://rationalreminder.ca/podcast/186 Episode 188: Professor Fishbach — https://rationalreminder.ca/podcast/188 Episode 192: Professor Edmans — https://rationalreminder.ca/podcast/192 Episode 194: Bill Janeway — https://rationalreminder.ca/podcast/194 Episode 196: Professor Betermier — https://rationalreminder.ca/podcast/196 Episode 198: Gerard O’Reilly — https://rationalreminder.ca/podcast/198 Episode 200: Professor Eugene Fama — https://rationalreminder.ca/podcast/200 Episode 202: Antti Ilmanen — https://rationalreminder.ca/podcast/202 Episode 204: Professor List — https://rationalreminder.ca/podcast/204 Episode 206: Professor Bohns — https://rationalreminder.ca/podcast/206 Episode 208: Rebecca Walker — https://rationalreminder.ca/podcast/208 Episode 210: Professor Phalippou — https://rationalreminder.ca/podcast/210 Episode 212: Professor Koijen — https://rationalreminder.ca/podcast/212 Episode 214: Jay Van Bavel — https://rationalreminder.ca/podcast/214 Episode 216: Gus Sauter — https://rationalreminder.ca/podcast/216 Episode 218: Colleen Ammerman — https://rationalreminder.ca/podcast/218 Episode 220: Professors Berk and van Binsbergen — https://rationalreminder.ca/podcast/220 Episode 222: Cassie Holmes — https://rationalreminder.ca/podcast/222 Episode 224: Professor Cederburg — https://rationalreminder.ca/podcast/224 Episode 226: Colonel Chris Hadfield — https://rationalreminder.ca/podcast/226 Episode 228: Eduardo Repetto — https://rationalreminder.ca/podcast/228 Episode 230: Professor Frank — https://rationalreminder.ca/podcast/230

Gaining financial literacy is critical if you want to thrive in today’s society. And yet, only about a third of the global population can be described as being financially literate. Joining us today to unpack the concept of financial literacy and its impact is Dr. Annamaria Lusardi, Professor of Economics and Accountancy at George Washington University. Dr. Lusardi has taught Economics for over 20 years, and her passion for financial literacy is reflected in everything she does. Her career has been instrumental in furthering the cause of increased global financial literacy, from being the Founder and Academic Director of the Global Financial Literacy Excellence Center, to serving as the co-chair of the G53 Financial Literacy and Personal Finance Research Network. In our conversation, Dr. Lusardi breaks down the definition of financial literacy, how it’s measured by leading experts across the world, along with some of the key differences we see between people in richer and poorer countries. She explains why financial advice isn’t a replacement for financial literacy and provides guidance on what we should be doing to educate various population groups. We also discuss how global trends have created an increased need for financial literacy as an essential skill, especially for young people, and why greater global financial literacy is beneficial to everyone, including governments and wealthier individuals. Tune in as we delve into the many facets of financial literacy and the important role it plays in our collective health, happiness, and success!   Key Points From This Episode:   Lusardi defines the concept of financial literacy and the importance of being able to apply it as a skill. (0:04:30)How experts measure financial literacy and some of the key challenges involved. (0:07:55)The global survey that was conducted on financial literacy in 2014 and its dismal findings. (0:11:44)The areas of financial literacy that people struggle with most and why the need for financial literacy has increased over time. (0:15:26)The costs and benefits of gaining financial literacy and the concept of optimal financial knowledge. (0:22:42)An overview of the type of person who should be investing in financial literacy and why. (0:27:46)How the strength of your government’s social safety net affects financial literacy rates. (0:30:15)The extent to which financial literacy affects stock market participation and wealth accumulation. (0:31:18)Some of the common mistakes that those with low levels of financial literacy tend to make. (0:35:10)Why financial literacy’s end goal should be geared towards happiness and living a good life. (0:39:24)The impact that financial advice and financial advisors have on economic outcomes. (0:43:18)How financial literacy varies across demographic groups and some of the factors that account for disparities in financial literacy. (0:45:42)How financial education programs can yield positive results and where this education should take place for it to be optimal. (0:52:13)What listeners can do to increase financial literacy for those around them and why there is no alternative to good financial knowledge. (0:58:55)     Participate in our Community Discussion about this Episode:   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 Dr. Annamaria Lusardi — https://www.annamarialusardi.com/ 'Financial literacy and financial resilience: Evidence from around the world' — https://onlinelibrary.wiley.com/doi/abs/10.1111/fima.12283 'The Economic Importance of Financial Literacy: Theory and Evidence' — https://gflec.org/wp-content/uploads/2014/12/economic-importance-financial-literacy-theory-evidence.pdf 'Optimal Financial Knowledge and Wealth Inequality' — https://www.journals.uchicago.edu/doi/10.1086/690950 'Financial literacy and stock market participation' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X11000717 'Employee Financial Literacy and Retirement Plan Behavior: A Case Study' — https://onlinelibrary.wiley.com/doi/abs/10.1111/ecin.12389 'Skating on thin ice: New evidence on financial fragility' — https://www.dnb.nl/media/uxldldkl/working-paper-no-670_tcm47.pdf 'Stereotypes in financial literacy: Evidence from PISA' — https://www.sciencedirect.com/science/article/abs/pii/S0929119920302753?via%3Dihub 'Fearless Woman: Financial Literacy and Stock Market Participation' — https://gflec.org/wp-content/uploads/2021/03/Fearless-Woman-Research-Final.pdf?x53868 'How Financially Literate Are Women? An Overview and New Insights' — https://onlinelibrary.wiley.com/doi/abs/10.1111/joca.12121 'Factors Contributing to Financial Well-Being among Black and Hispanic Women' — https://jor.pm-research.com/content/9/1/71 'Financial Education Affects Financial Knowledge and Downstream Behaviors' — https://gflec.org/wp-content/uploads/2020/04/Working-Paper-Financial-education-affects-financial-knowledge-and-downstream-behaviors-April_2020.pdf

Today is our final episode featuring just the two of us before our annual wrap-up show, and we thought we would use this opportunity to cover some important foundational aspects of rational investing. Ben goes over some of the most fundamental concepts about market prices, risk, and actual returns before answering five common questions that relate to this level of information. From investing in an employer's stock to predicting the future and real estate comparisons, these five touch-points are always worth returning to, and should even interest the more experienced of our listeners. For the second half of the show, we offer a quick book review of The Culture Playbook by Daniel Coyle, and have a brief and illuminating conversation with Professor Amer Kaissi about his book, Humbitious, and some of his thoughts on the part that reading plays in rich and progressive life. Press play to catch all this and more on the Rational Reminder Podcast.   Key Points From This Episode:   Picking up a thread from our discussion on the 2% Rule. (0:06:05)Getting to grips with investing basics. (0:10:45)How market prices work in response to traders' actions and risk. (0:17:59)The main determinants of actual returns and starting points for your portfolio. (0:23:15)Unknowable futures and the eternal doom and gloom predictions. (0:35:43)Assessing the value of owning an employer's stock. (0:38:21)Holding stock picks in Tax-Free Savings Accounts. (0:42:07)How to prepare a portfolio when a recession is predicted. (0:43:49)Comparing investments in real estate with the stock market. (0:45:14)Weighing the value of building and emergency fund. (0:47:11)A thirty-second recap of our episode with Cliff Asness. (0:50:06)Today's book review focussing on the lesson from The Culture Playbook by Daniel Coyle. (0:51:48)Professor Kaissi shares a quick summary of his book, Humbitious. (0:58:40)The potential to develop characteristics and the role that reading plays. (0:59:38)Professor Kaissi talks about his reading habits. (1:02:12)Application of ideas from books and how Professor Kaissi captures and organizes information in his own reading. (1:05:15)A few of Professor Kaissi's favourite book recommendations and how to increase your reading habit. (1:08:52)     Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-231-investing-basics-and-common-questions-plus-reading-habits-w-amer-kaissi-discussion-thread/20716 Books From Today’s Episode: Humbitious: The Power of Low-Ego, High-Drive Leadership — https://amzn.to/3WjHjry Mindset — https://amzn.to/3Wzl7Kr Quiet — https://amzn.to/3htlN4X The Five Dysfunctions of a Team — https://amzn.to/3YmKqRv The SPEED of Trust — https://amzn.to/3UWCljq Top Five Regrets of the Dying — https://amzn.to/3uQcUWf The Assertiveness Workbook — https://amzn.to/3VVDVUf How to Raise Your Self Esteem — https://amzn.to/3BDM33p Ego Is the Enemy — https://amzn.to/3BAyCkZ 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 Amer Kaissi on Twitter — https://twitter.com/amerkaissi10 Amer Kaissi on LinkedIn — https://www.linkedin.com/in/amer-kaissi-ph-d-38258919/ Amer Kaissi — http://www.amerkaissi.com 'The Value of Goals-Based Financial Planning' — https://www.financialplanningassociation.org/article/journal/JUN15-value-goals-based-financial-planning 'Excessive Extrapolation and the Allocation of 401(k) Accounts to Company Stock' — http://independent401kadvisors.com/library_articles/ExcessiveExtrapolation.pdf 'The Agony of Ecstasy: The risks and rewards of a concentrated stock position' — https://assets.jpmprivatebank.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/agony-ecstasy-2021.pdf 'The financial resilience and financial well-being of Canadians during the COVID-19 pandemic' — https://www150.statcan.gc.ca/n1/pub/75f0002m/75f0002m2021008-eng.htm

The world is a highly competitive place, and becoming successful requires hard work, dedication, and luck. This is the view of today’s guest, Professor Robert Frank, who helps us unravel the nuance of conspicuous consumption trends and the role of luck in gaining financial success. Professor Frank is the emeritus Henrietta Johnson Louis Professor of Management at Cornell University and holds an MA in statistics and a Ph.D. in Economics from UC Berkeley. He is also a prolific author, having written 12 books, financial textbooks, and many peer-reviewed articles in journals such as the American Economic Review, Econometrica, and Journal of Political Economy. He is passionate about how policy can help drive positive consumer behaviour, reduce inequality, and increase individual happiness. His work has also focused on the role of luck in achieving financial success which he covers in his book Success and Luck. In this episode, we unpack how individuals can improve societal collective action, the role of policy in driving those changes, and how luck interplays with success. We discuss economic and financial relativism, the dangers of conspicuous consumption, how expenditure cascades occur, and what influences consumption trends in society. We also dive into the topic of luck, whether wealthy people are happier, what behavioural changes are needed to create a better society, and more.   Key Points From This Episode:   Professor Frank describes the difference between departures from rational choice with regret and without regret. (0:04:34)Whether he classifies his work as behavioural economics. (0:07:38)An explanation of economic and financial relativism. (0:10:50)The role of economic and financial relativism in consumption trends. (0:12:44)Find out what constitutes a positional good. (0:16:56)How the consumption of positional goods affects psychological well-being. (0:19:32)Why people choose to engage in consumption arms races. (0:21:52)The relationship between the consumption of luxury goods and happiness. (0:24:45)What people can do to recognize and avoid negative consumption behaviours. (0:26:31)How the spending of the super-rich impacts the spending habits of the typical consumer. (0:27:38)Ways in which social media influencers have affected consumption. (0:30:32)We learn about the link between consumption and inequality. (0:32:40)How well differences in human capital explain differences in income. (0:35:04)Professor Frank explains how likely it is that the most skilled person gets the best outcome in a competitive market. (0:38:13)Professor Frank shares how they measure luck. (0:41:20)The influence luck has on achieving a successful outcome. (0:42:09)Find out if luck influences consumption trends and inequality. (0:44:03)A thought experiment concerning the wealthy and higher taxes. (0:46:56)We discuss whether winner-take-all markets are a good thing for society. (0:50:22)How people should behave differently to help drive positive change. (0:53:06)Advice for people to stay motivated and work hard. (0:57:19)What Professor Frank thinks about working a job you hate for more money. (0:58:59)He provides insight for people who work jobs they hate. (0:59:59)His approach on the subject of luck and meritocracy with young kids. (1:00:47)We discuss the idolization of financially successful people. (1:03:36)How successful individuals should behave differently in an economy where luck plays such an important role. (1:05:38)The response of successful people to Success and Luck. (1:08:15)Steps people can take to positively affect those around them. (1:09:29)Discover what Professor Frank’s position is on policy. (1:14:20)We hear how Professor Frank defines success in his life. (1:18:33)     Links From Today’s Episode:   Professsor Robert Frank on Twitter — https://twitter.com/econnaturalist Cornell University — https://www.cornell.edu/ Success and Luck — https://www.amazon.com/Success-Luck-Good-Fortune/ Luxury Fever — https://www.amazon.com/Luxury-Fever/ Principles of Economics — https://www.amazon.com/Principles-Economics/ The Winner-Take-All Society — https://www.amazon.com/Winner-Take-All-Society/ American Economic Review — https://www.aeaweb.org/journals/aer Econometrica — https://onlinelibrary.wiley.com/journal/14680262 Journal of Political Economy — https://www.jstor.org/journal/jpoliecon Project Sunroof — https://sunroof.withgoogle.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/?hl=en Rational Reminder on YouTube — https://www.youtube.com/channel/ 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/

Traditionally, people saving for retirement and financial advisors relied on the 4% rule when calculating how much to save for retirement and the associated income those savings would provide after retirement. What if you found out it does not work? Is there another option? Today, we offer you an alternative approach, which is the 2% rule for retirement spending. Before we delve into today’s main topic, we update listeners on the recent London meet-up, what to expect on upcoming shows, and who our special guest is to kick off the first episode of 2023. Then, we discuss today’s main topic and learn what the 2% rule is, how it compares to the 4% rule, and whether the safe percentage for retirement is actually higher. We unpack retirement spending through the lens of several empirical papers, historical data, and market comparisons. We also find out why the US market has always been able to bounce back from uncertainty and whether there is empirical data to support the 4% rule. We also talk about the many financial challenges and opportunities that young people face, the biggest mistake people make regarding retirement, the value of financial literacy, book reviews, and more!   Key Points From This Episode:   An update on the 22 in 22 Reading Challenge. (0:05:21)Outline of today’s content and the main topic: the 2% rule for retirement spending. (0:06:27)An overview of the “2% rule”, the motivation behind it, and how it was formulated. (0:08:17)We discuss if the safe withdrawal rate for retirement savings is higher than 4%. (0:13:31)The inspiration for the higher average realized rate of return on investment theory. (0:19:59)Whether the past returns on US stocks will repeat in the future. (0:21:54)Why the US stock market has been historically exceptional and resilient, and how other markets compare. (0:23:44)The biggest limitation of the seminal work which helped established the 4% rule. (0:28:38)How data gaps were dealt with in the paper by Scott Rieckens and results are discussed. (0:33:16)Other aspects to consider regarding the research on retirement funds. (0:38:35)The challenges and opportunities that young people face today. (0:42:24)How financial literacy impacts investment opportunities, returns, and overall happiness. (0:46:59)What are the potential solutions and reasons to be optimistic regarding the current financial market. (0:47:48)Our usual episode review under a minute: episode 30 with Larry Swedroe. (0:52:31)This week’s book review and choice architecture. (0:54:35)We discuss the reviews and feedback received on a previous episode. (1:02:32)Hear an update about our idea regarding CE credits and reviews about the show. (1:06:01)     Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-229-the-2-rule-for-retirement-spending-discussion-thread/20473   Book From Today’s Episode: The Elements of Choice: Why the Way We Decide Matters — https://amzn.to/3VvxZR8   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 'Determining Withdrawal Rates Using Historical Data' — https://retailinvestor.org/pdf/Bengen1.pdf 'Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable' — https://www.researchgate.net/profile/Carl-Hubbard/publication/265279441/ 'Global stock markets in the twentieth century' — https://onlinelibrary.wiley.com/doi/abs/10.1111/ 'Is The United States A Lucky Survivor: A Hierarchical Bayesian Approach' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3689958 'The Safe Withdrawal Rate' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4227132 'The equity premium: A puzzle' — https://www.sciencedirect.com/science/article/abs/pii/0304393285900613 'Long-Horizon Losses in Stocks, Bonds, and Bills' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3964908 'Financial System Review 2022' — https://www.bankofcanada.ca/2022/06/financial-system-review-2022/#:~:text=The%20tightening%20of%20monetary%20policy,remain%20two%20key%20interconnected%20vulnerabilities. 'The financial resilience and financial well-being of Canadians during the COVID-19 pandemic' — https://www150.statcan.gc.ca/n1/pub/75f0002m/75f0002m2021008-eng.htm 'Hopefulness is declining across Canada' — https://www150.statcan.gc.ca/n1/daily-quotidien/220517/dq220517d-eng.htm 'Global Investor Experience Study: Fees and Expenses' — https://assets.contentstack.io/v3/assets/blt4eb669caa7dc65b2/blt60e320775385837a/62431900eed9f60f2de8ad55/GIE_2022.pdf 'Financial Literacy Around the World' — https://gflec.org/wp-content/uploads/2015/11/3313-Finlit_Report_FINAL-5.11.16.pdf 'Ontario Securities Commission Investor Knowledge Study' — https://www.osc.ca/sites/default/files/2022-09/inv_research_20220907_investor-knowledge-study_EN.pdf 'Measuring the Financial Sophistication of Household' — https://www.nber.org/system/files/working_papers/w14699/w14699.pdf 'Investment Literacy, Overconfidence and Cryptocurrency Investment' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3953242 'Financial Literacy and Attitudes to Cryptocurrencies' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3482083 'Bitcoin Awareness, Ownership and Use: 2016–20'— https://www.bankofcanada.ca/wp-content/uploads/2022/04/sdp2022-10.pdf 'Optimal Financial Knowledge and Wealth Inequality' — https://repository.upenn.edu/cgi/viewcontent.cgi?article=1093&context=bepp_papers 'Financial Literacy and Retirement Planning in the United States' — https://www.nber.org/system/files/working_papers/w17108/w17108.pdf 'Financial Well-Being of the Millennial Generation' — https://gflec.org/wp-content/uploads/2019/12/Financial-Well-Being-of-the-Millennial-Generation-Paper-20191122.pdf

In this episode, we are joined by the CIO of Avantis Investors, Eduardo Repetto, to have an in-depth conversation about his philosophy and approach to many of the central concepts that are important to our listeners. Eduardo weighs in on asset pricing factor investing, premiums, and also shares some of his perspectives on what makes Avantis different from its competitors. Eduardo's wealth of experience and technical know-how make this very practical exploration, complete with some inventive and demonstrative analogies. Despite the high-level concepts discussed, our guest's ability to communicate these in an accessible manner also helped maintain a level of approachability throughout. Toward the end of the episode, we get to hear a little about Eduardo's Ph.D. in aeronautics and some of the surprising overlaps he sees between his two fields of interest.   Key Points From This Episode: Eduardo's approach to communicating what Avantis can offer their clients. (0:02:57)Advantages of the ETF structure for managing portfolios. (0:05:07)Advice for investors for quantitatively assessing the expected return advantage of a factor-tilted portfolio. (0:10:26)Practical approaches for individual investors when assessing a factor tilt in portfolios. (0:13:54)Eduardo unpacks the idea of trust in relation to the premium. (0:20:45)When does a completely small-cap value portfolio make sense? (0:27:23)Avantis' method for targeting value and profitability. (0:31:03)The weighting of different metrics that Avantis uses when building portfolios. (0:34:43)Eduardo unpacks cash profitability versus operating profitability. (0:36:53)The approach at Avantis to sector weights. (0:39:56)Understanding adjusted book value when pricing a company. (0:43:53)Eduardo describes the premium for the Goodwill adjustment. (0:50:02)How Avantis views pursuing credit premium in fixed income investments. (0:51:32)Determining the size of factors tilts on particular products. (0:57:05)Reasons that there are no emerging market small cap value strategies. (0:59:48)Comparing the research behind inflation-focused equity strategy to a more general value profitability premium. (1:06:03)Avantis' strategy for staying on the cutting edge of the latest research. (1:10:34)Conversations between Avantis and American Century Investments about different investment philosophies. (1:18:22)Eduardo shares his opinion about Avantis' competitive advantage. (1:19:56)Where Avantis and Eduardo are aiming their energy in the near future, and the succession plan for the company. (1:23:11)Some surprising similarities between aeronautics and asset management. (1:27:21)Eduardo talks about his personal definition of success. (1:31:31)   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/ Eduardo Repetto — https://www.avantisinvestors.com/content/avantis/en/about-us/our-team/eduardo-repetto.html Avantis Investors — https://www.avantisinvestors.com/ Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/?hl=en Rational Reminder on YouTube — https://www.youtube.com/channel/ 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/

In today’s episode, we pull relevant quotes from past guests (namely John Cochrane, Gene Fama, and Jonathan Berk) to extricate who should own market cap funds. We look at the variable risks of value stocks and factor investing and hear counter-views on owning the market. We also delve into the hot topic of tax loss selling, with an overview of a recent Financial Analyst Journal paper on loss harvesting outcomes, sorted by investor profiles. This episode will get you up to date on the biggest finance news of the week, from crypto collapses to Amazon’s catapulting gains and losses. Tune in to hear all of this and more, including a recap of our conversation with Dave Goetsch and our Financial Literacy Month book reviews.    Key Points From This Episode:   A neat way to keep track of the value of your purchases over time. (0:00:33)The results of the Rational Reminder financial literacy survey. (0:02:44)An overview of this episode’s topics. (0:05:45)Who should invest in market cap-weighted index funds. (0:07:28)How to determine whether you’re different from the average investor. (0:16:13)Gene Fama’s take on the possibility of identifying state factors. (0:22:13)The variable risks of value stocks. (0:23:25)What drives people to increase their value tilts over time. (0:25:11)The risks of factor investing, and trading in general. (0:28:26)Jonathan Berk’s take on owning the market. (0:31:53)A summary of who should invest in total market index funds. (0:33:20)The big crypto news of the week! (0:38:21)Other significant market news. (0:42:17)An overview of a recent Financial Analyst Journal paper on loss harvesting outcomes, sorted by investor profiles. (0:44:59)Our book reviews for Financial Literacy Month. (0:55:15)A recap of our conversation with Dave Goetsch. (1:01:47)A few of our listeners’ reviews. (1:02:50)   Participate in our RR CE Credits Survey: https://forms.office.com/Pages/ResponsePage.aspx?id=xVA-B3TS3UeuUte5Yx-hRi0Vpj3fzvhNpOTm6eRMYJ5UN0tOM1A5MFdPQzJFT1hZOTJLN1pHRVFYSS4u Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-227-who-should-invest-in-cap-weighted-index-funds-discussion-thread/20230 Books From Today’s Episode: The Geometry of Wealth: How to shape a life of money and meaning — https://amzn.to/3Od9J3N Retirement Income for Life: Getting More without Saving More — https://amzn.to/3GpkHRN We're Talking Millions!: 12 Simple Ways to Supercharge Your Retirement — https://amzn.to/3UI3uaE Common Sense on Mutual Funds — https://amzn.to/3AjUsIM The Investment Answer: Learn to Manage Your Money and Protect Your Financial Future — https://amzn.to/3UWeSPM Money Like You Mean It: Personal Finance Tactics for the Real World — https://amzn.to/3g9bT7Q 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 'An Intertemporal Capital Asset Pricing Model' — https://www.jstor.org/stable/1913811 'Risk and Return of Value Stocks' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=112553 'The Value Premium' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=351060 'A Consumption-Based Explanation of Expected Stock Returns' — https://repository.upenn.edu/cgi/viewcontent.cgi?article=1146&context=fnce_papers 'Who Are the Value and Growth Investors?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2426823 'Is There a Replication Crisis in Finance?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3774514 'Amazon Becomes World’s First Public Company to Lose $1 Trillion in Market Value' — https://www.bloomberg.com/news/articles/2022-11-09/amazon-hits-unwelcome-milestone-with-1-trillion-in-value-lost?leadSource=uverify%20wall

In this episode, we speak to renowned Canadian figure Colonel Chris Hadfield. For those who don't know, Chris is a heavily decorated astronaut, engineer, and pilot, and has received many awards, such as the Order of Canada, the Meritorious Service Cross and the NASA Exceptional Service Medal. Colonel Hadfield became a worldwide sensation with his video of David Bowie's "Space Oddity" which was viewed by over 75 million people. He aims to make space more accessible and continues to share the wonders of outer space and science with as many people as possible. Besides his phenomenal professional background, he is also known for his music which he writes and plays on earth and in space! He is also the author of several books, namely An Astronaut's Guide to Life on Earth, You Are Here, and a children's book, The Darkest Dark. Although Colonel Hadfield has a very different background from previous guests, his 35-year career has afforded him many lessons that apply to life, which he shares in our conversation with him. We learn the importance of goals and why reaching your goals should not define your happiness. Hear ways to overcome fear when facing uncertainty, the value of competence, and why enjoying the road to success is more important than success itself. Find out why sweating the small is essential to success, whether Colonel Hadfield suffers from imposter syndrome, and where true happiness comes from. Tune in and discover the secret to success and happiness in this one-of-a-kind conversation with special guest, Colonel Chris Hadfield!   Key Points From This Episode:   What motivated Commander Hadfield to take pictures onboard the International Space Station. (0:04:10)He briefly explains the amount of effort that went into taking pictures for his book You Are Here. (0:05:14)What lessons Commander Hadfield learned as an astronaut that he applies to life. (0:06:34)How to keep motivated to achieve your goals with the knowledge that you probably won’t achieve them. (0:08:41)Why his goal was becoming an astronaut and not to be an astronaut. (0:11:05)Whether there is a time to reconsider or quit a goal that you have set for yourself. (0:12:46)The best way to prepare for situations with uncertain outcomes. (0:14:51)How to prepare for situations that you cannot prepare or practice for. (0:18:18)Ways to mitigate fear when dealing with risk and uncertainty. (0:20:55)Learn if building competence is different for different people. (0:23:48)Hear the benefits of negative thinking and sweating the small stuff. (0:25:33)Commander Hadfield explains how to prepare for novel situations. (0:29:07)He shares where he thinks life satisfaction comes from. (0:31:49)Find out if Commander Hadfield ever suffers from imposter syndrome. (0:34:14)What life lessons he hopes to impart to his grandchildren. (0:36:09)How Commander Hadfield defines success in his life. (0:38:04)We highlight the main takeaways from our conversation with Commander Hadfield. (0:41:14)     Links From Today’s Episode:   Commander Chris Hadfield — https://chrishadfield.ca/ Commander Chris Hadfield on Twitter — https://twitter.com/Cmdr_Hadfield/ Commander Chris Hadfield on Instagram — https://www.instagram.com/colchrishadfield/ Commander Chris Hadfield on Facebook — https://www.facebook.com/AstronautChrisHadfield Commander Chris Hadfield on LinkedIn — https://www.linkedin.com/in/chris-hadfield/ Commander Chris Hadfield on YouTube — https://www.youtube.com/c/ChrisHadfieldAstronaut/featured   A Space Oddity — https://www.youtube.com/watch?v=KaOC9danxNo You Are Here — https://www.amazon.com/You-Are-Here-Photographs-International/dp/0316379646 An Astronaut's Guide to Life on Earth — https://www.amazon.com/Astronauts-Guide-Life-Earth-Determination/ The Darkest Dark — https://www.amazon.com/The-Darkest-Dark/