Guest User

March 23, 2023

Episode 245: Deeper Goals, and Retiring with Purpose

Guest User

March 23, 2023

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)

Read the Transcript:

Ben Felix: This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We're hosted by me, Benjamin Felix, and Cameron Passmore. Portfolio Managers at PWL Capital.

Cameron Passmore: Welcome to episode 245. And, Ben, this week, we have a pretty interesting lineup. I know this is typically what we call an “us” episode where it's you and I. But we actually have three special guests this week.

And it's interesting how these episodes come together during the weeks leading up to recording. And this week, things really fit together nicely. And I think you'll see at the end of this podcast how that all happened.

Off the top, we are joined by our new friends from Morningstar in Chicago, Samantha Lamas and Danielle Labotka. An interesting follow-up to your great work on goals and goal setting.

And then we're also going to be joined by another Canadian financial advisor, Mark McGrath, who put out a tweet this week that was simply unreal for a bunch of different reasons. We invited Mark to join us.

I'm also going to do a quick review of the book, The Status Game, which was wonderful. I'm also going to do a quick 60-second review of our conversation in episode 85 with Dennis Moseley Williams. Which, Ben, can you believe it? We recorded it almost three years ago to the day.

Ben Felix: It's crazy. We were talking to a past guest not long ago. And they mentioned, "Oh, yeah. When I was on the podcast two years ago." Was that two years ago? I went and checked. It was two years ago. Crazy.

Cameron Passmore: And then, of course, we have our after show, which is kind of a mishmash of all kinds of different things.

Ben Felix: I think it's going to be a great episode. If you're in Canada and want to learn more about PWL Capital, you can book a no commitment intro call with one of our advisors through our website, pwlcapital.com. We would love to hear from. You can also email info@rationalreminder.ca if you want to chat to us about the podcast.

Cameron Passmore: Exactly. All right. Good roll?

Ben Felix: Let's go to the episode. It's a good one.

***

Ben Felix: Welcome to episode 245 of the Rational Reminder Podcast.

Cameron Passmore: All right. Let's dive into our conversation about the great goals work. I am such a fan of that paper, as you know. And describe to the audience the process of how we ended up speaking to our friends at Morningstar.

Ben Felix: Morningstar did a paper co-authored by Samantha, one of the guests that we have, coming up in a second here, as a 2019 paper called ‘Mining for Goals’. And they basically went through the idea that we've talked about now many times in the podcast, including discussing that paper numerous times. The general idea that people are not good at identifying what their goals are.

We took that and we found that valuable as an insight and interesting as a concept. As listeners know, because many of them participated, we ended up doing this goals survey last year where we asked people three questions. And the questions were drawn from other research about how to overcome these issues with not being able to identify all of your goals.

The process was you answer the question. What are your financial goals? And then you have to try and double the list. And then we gave what are categorical prompts. We basically just gave people categories using the PERMA model is what we had for categories. And said, “Financial goals might fall into one of these categories. Does that elicit any more goals?”

310 people went through that process of the three questions. And we collected this huge bank of written response goals. There's a tremendous amount of data. And we were very conscious. I was very conscious of the fact, when we did that research, that we didn't have expertise in conducting surveys or in analyzing qualitative data. But we knew that we had a pretty cool data set. Because you read through the responses and it's like, wow, there's a lot of thought that went into this from a lot of different people.

You could tell that a lot of time was spent creating the data set. But we were nervous about missing insights because we have never looked at this type of data before. We sent it around to a few people that do have the expertise to analyze that type of data. And one of the play places we sent it to was Morningstar's behavioural insights team. And they were kind enough to answer my email. I wasn't sure if they would answer. And they did. And they were more than happy to look at the data, which they did. They've actually got some incredible work and insights at a level that we just weren't able to tease out from the data.

Cameron Passmore: Exactly. Joining us is Samantha Lamas, who is a Senior Behavioural researcher at Morningstar. And as a recipient of the Montgomery-Warschauer Award for her research and financial planning. Her research focuses on investor engagement and the factors that drive people's decision-making about investing and money. Perfect.

Her work delves into how people think about their financial goals. What they look for when seeking financial advice, and what kinds of mental shortcuts people use when making decisions about their personal finances.

Ben Felix: And then we're also joined by Danielle Labotka, who's a Behavioral Scientist at Morningstar. Her research looks at how investors' financial decisions are influenced by numerous cognitive and linguistic factors by investigating investors' behaviours, preferences and attitudes both in everyday and financial planning scenarios. And Danielle got her Ph.D. in Psychology from the University of Michigan. And her work's been published in top psychology journals.

Cameron Passmore: They've been great. I mean, we've had a few phone calls with them. They're a great team. Really nice people to work with on this.

Ben Felix: I mean, listen. Like I said, I sent this email not knowing if – because Morningstar is a big company. I didn’t know if they would answer. And not only did they answer, but they were willing to take our data and do some pretty serious analysis on it. Very grateful for the whole process. And I agree completely that they've been a pleasure to work with on this project.

All right. Let's go to our conversation with Samantha Lamas and Danielle Labotka.

***

Ben Felix: Samantha and Danielle, welcome to the Rational Reminder Podcast.

Samantha Lamas: Hello. Thanks for having us.

Danielle Labotka: Thank you for having us.

Ben Felix: Can you guys tell us what are some of the obstacles in identifying the right goals?

Samantha Lamas: There are many. And that's really because the question itself is very complex. If you ask someone, "What are your overarching 30-year financial goals?" So much goes into that question. There's math and numbers. Things that people aren't comfortable with. There are emotions because it deals with all the money that people have saved up over years and worked for. And then it kind of forces us to forecast, which human beings aren't really good at doing.

What happens is that when people are asked this question, all of these issues combine and encourage us to go to our cognitive biases. Things like hyperbolic discounting. Where our minds aren't wired to think about incentives in 30 years. We're thinking about the here and the now.

At the same time, who knows who will be in 30 years? In some ways, that person's a complete stranger. How are we supposed to know what they're going to want? Or for example, availability bias. Our tendency to go with the information that comes most quickly to mind.

If we went to a great housewarming party and maybe when we're asked this question, buying a house pops into our head even though we've never really thought about it seriously.

What ends up happening is people go with these top-of-mind goals and they sort of blurt them out. And they sound good. But they may have forgotten goals that are important to them. Or they may have not even thought about goals that are important to them. But they're sticking with these surface-level goals and not really digging deeper for these deeper goals.

What we like to boil this down to is three key overarching barriers that people face when goal setting. And those are that people struggle to identify our goals right now. We also struggle to get into this think abstractly mode. We're so present-minded that we're stuck in the concrete. We're thinking about buying a house, or buying a car, or paying for your child's education in three years and not these bigger overarching goals. And then at the same time, we struggle to know what we're going to want in 30 years. But those are the key ones.

Cameron Passmore: So interesting. Let's dig into that a bit. What challenges does this pose for people like Ben and I as financial advisors or for financial decision-makers more generally?

Samantha Lamas: I think this puts us in a pretty tough position. Because essentially what you have to do is you have to help clients get to an endpoint that they can't even imagine yet. It's sort of taking them through a self-discovery process of understanding their own goals.

And for the individual, it's about forcing yourself to think deeper to go past these high-level, top of mind, surface-level goals, which can be an uncomfortable process because you kind of have to acknowledge that maybe you don't know. You have to think more about it.

Ben Felix: We did this big project, as of course you know, where we collected survey data from a bunch of our podcast listeners and some of our clients whose words, it was a bunch of text, which is data that we had never really played with before. Which is one of the reasons that we sent it to you. Can you talk about what methods you use to analyze all of that textual data?

Danielle Labotka: Working with text data really is just a tall order to do. There's a lot of it. And it can be interpreted in a lot of different ways. We chose to analyze your survey data using natural language processing techniques. And basically, natural language processing is a form of artificial intelligence in which we have computers parsed through large amounts of human language. Like, all of the responses from the survey to extract different features from the text.

One natural language processing technique we used is called topic modelling. And topic modelling is where we get the computer to go through all the different responses that we have and start extracting common topics people mention by pulling out words that tend to occur together.

And now they're actually multiple techniques for topic modelling. And since computers can't actually understand human language like we do, we used two different methods and compared their results. From there, we use the topics that we saw in both methods to create a new master list goals based on what people mentioned when they answered the survey.

Ben Felix: As kind of like a gut check, we manually coded all that data, which was probably way less efficient than what you did. How did the analysis that you did match up with our manual coding?

Danielle Labotka: We actually do a fair amount of our own manual coding as well. We give you props for putting in the time and effort because it is very intensive. And happily, our results match very well with your manual coding.

Some of our topics directly mapped onto the coding categories you had, like being able to pay for your children's education and being able to comfortably afford luxuries. However, our method actually yielded fewer items on the ending master list. Because some of the topics that we got from the natural language processing technique combined a few of the goals that you had in your manual coding.

For example, in your coding, you had two different goals for financially supporting my community or causes that are important to me. And giving time to community and causes that are important to me. Whereas our results combined the two of those for one goal that we called donating time and money to charity.

Cameron Passmore: How did the goals identified change as the respondents progress through the questions?

Samantha Lamas: This was a fun discovery. So, as Danielle mentioned, we split up the goals into different topics. And then one of the things we did is we split up the results by each question that you guys presented and then compare them.

Really, in step one, we got a lot of the typical financial goals that you would typically hear in a financial advisor's office. Things like retirement, owning a home. Obviously, very important goals. But they don't really give an advisor a sense of deeper insight into what motivates a person.

And step two, we got topics that were largely the same as step one. Nothing too exciting there. But step three, we started to see a huge difference. We started to see these deeper goals come into play. And it was obviously an influence of the PERMA + V manipulation.

We got goals that – I have the slide open on my screen related to living a healthy lifestyle, donating more, spending more time with loved ones, having time for hobbies, et cetera, and relationships. These goals I give you may be a better understand the thinking of what a person's true life values are. The things that are at the core of their well-being and what really makes them happy. And maybe even gives advisors some insight into what financial goals they could be aiming for.

Ben Felix: What was the main insight that you drew from the way that the goal identification changed as the survey progressed?

Samantha Lamas: We think the big takeaway in terms of that is that not all prompts are created equal in terms of how they elicit goals from people. As Sam mentioned, in that first prompt where we're asking what are your goals, in some ways, that's like an icebreaker to ask clients. Because it's good for eliciting those surface goals from clients. They're really common ones that they're probably and they're coming to talk to you for the first place. Talking about retirement. Buying a home. Things like that. It's really good to kind of get people warmed up in some ways for what is perhaps to come a more deeper conversation.

But when we looked at the asking people to just tell you more and say more, we didn't find that that actually yielded more useful responses. In fact, when we looked at that and when we looked at the responses, they were less positive following this prompt compared to the other two. And we think that that is potentially counterproductive to a fledgling advisor-client relationship while might be asking these questions in the first place.

And so, finally we see that providing that structure and reminding people of what their values are with something like the PERMA + V framework can maybe give clients boost they need to start digging in for those deeper goals that previously remained hidden.

While it's good and maybe even necessary to prompt clients to dig into their deeper goals, we want you to make sure you're doing so in a way that encourages clients to think along these lines and not go backwards and talk about more artificial things again.

Ben Felix: Yeah, that's super interesting. Doubling the list. The prompt to double the list was less helpful than the categories. And of course, the untested prompt that we didn't test in our survey was to present them with this master list that we've now created and see what that elicits.

Cameron Passmore: How does identifying deeper goals help with the long horizons decision-making?

Samantha Lamas: There's a few things we can point to here based on our thinking on it. One, these deeper goals can maybe promote more flexibility or wiggle room in a person's financial plan.

For example, let's say there's a client that comes into your office and they want a beach house in Key West when they retire. But after some digging, maybe using some of these exercises, either the master list or the PERMA + V, et cetera, you uncover that what the person really cares about is spending quality time with their family.

And the reason why they wanted the beach house in Key West was because they had a lot of great family vacations there and that's what they're keeping in their head. But the truth is that the likelihood of that specific goal of a beach house in Key West changing is probably pretty high. Because life happens. Things get complicated. The kids move far away. The budget doesn't play out as nicely. There's grandchildren to consider now. No one can get time off, et cetera, or whatever.

But that deeper goal of spending quality time with your family, that one's probably not going to change. If the plan is focused on that deeper goal, well, maybe instead of a beach house in Key West, that can turn into a house in the suburbs close to the grandchildren.

Another sort of idea that we were ruminating on was this idea that having a clear why or a goal focused on the why can be a great motivator. We know from existing research that having the right goals can motivate people to stick to their financial plan.

But when it comes to putting in terms of these deeper goals, you can see how that can be even more motivating. For example, telling a client, "Hey, if you stick to your savings and spending plan, you'll put a few more thousand dollars into your bank account to buy that beach house." Versus telling them that, "If you put more effort into your savings spending plan now, you'll have a few more years to spend on those vacations with your kids before they go off to college." That connection to their deeper why can be more motivating than just saving more money.

And the last idea that we kind of had, even something in the teaches a lot, which is that people not only struggle to identify their long-term goals. But they also struggle to understand what's possible with their assets. Once an advisor knows a person's deeper goals, they can start to help open the client's mind to other possibilities.

Going back to the beach house example, let's say the beach house doesn't work out, or you discover that the person's true deeper goal is to spend quality time with their family. Maybe they need a place close to the family. They still want a place by a body of water. Maybe that turns into a lake house by a smaller body of water and a small condo in the suburbs. I'm sure the client never thought of that opportunity or that possibility because they were so focused on the surface goal of a beach house in Key West.

Ben Felix: Yeah, that's super interesting. You get more abstract and then there are more options to achieve the abstract goal as opposed to a singular concrete goal.

Cameron Passmore: Exactly.

Samantha Lamas: Exactly.

Ben Felix: What would you say is the main takeaway from your analysis of our data on how people should go about identifying their goals?

Danielle Labotka: What we get here is that it's important for people to slow down and take the time to identify their goals using different approaches. And we think that there are kind of two benefits to doing this. The first benefit is something that Sam's talked about very nicely, which is that it gives people the opportunity to start unpacking their deeper goals, which can really give them and their advisor insight into why their surface goals matter. Really being able to understand what the driving force there is in terms of wanting that beach house.

The other benefit is that taking that time to write and revise a list of goals gives people the opportunity to see that these goals don't have to be static. They can be flexible. And in the long run, this is going to help them be open to achieve things they hadn't imagined before.

Sometimes we can, as humans, just get very fixed in our ways of thinking when we feel that we've committed to something. And so, getting that practice early on of learning my financial goals are really not a one-and-done situation. I'm allowed to revise them. I'm allowed to see them in new light is good practice for them when there might be more difficult decisions down the road where that flexibility can be important.

We think it's really important to see this as not a one-off question-and-answer type of situation. You want it to be seen as something that's more progressive and an ongoing conversation that you're having with yourself or with your financial advisor.

Cameron Passmore: How can financial advisors use this information to improve their financial advice?

Danielle Labotka: We think that something that might be interesting for financial advisors to do based on this research is to incorporate multiple goal-setting exercises into their meetings with clients. Something like starting out clients with that master list exercise can help them start to articulate not only what is top of mind. But it can also get them exposed to the wide range of possibilities available to them that maybe they haven't even thought of. And then it also does that nice little piece of teaching them that it's okay to revise their goals.

We think that starting out with a master list approach can really be a good way to introduce goals and financial goals, and revising those goals to clients. And a good follow-up might be to do one of those values-based goal-setting exercises. Like prompting your clients with the PERMA + V framework. That way, clients and advisors can start to identify what the values-based motivators for clients are.

We think that identifying these deeper goals can be helpful and getting clients to stay committed to their financial plan. But also to be open to those different opportunities that may fulfill their deeper goals but look very different than the way they originally imagined.

Ben Felix: That's so interesting to think about from a process perspective. Your team kicked off this – or at least inspired us with the research that you did on this I think in 2019. We've maybe pushed forward a little bit. What do you think is the next step with this line of research?

Samantha Lamas: Like any good research study, I think doing this one and then working with your data just brings up more questions. There's plenty of more work to do to figure out the mechanisms involved.

For example, is there something special about the PERMVA + V framework? Probably not. Is there something special about the specific master list we originally used? Or this new master list? Probably not.

Right now, our thinking is maybe it's more about the process itself. Just using a master list or using a checklist. Something to help nudge people to think more carefully about their goals that maybe that might be causing this impact of getting people to think more deeply, et cetera.

That being said, what this means for us is it's time to start talking about this research more with financial advisors, especially people who are on the ground talking to individuals maybe hopefully using some of these exercises. Getting their thoughts on it. And then hopefully supplement those insights with more original research.

What we try to do is make it an iterative process. Try out something. Create a practical exercise. Bring it to advisors. Get their thoughts about it and then start again and always be improving in some ways.

Ben Felix: Awesome. We look forward to seeing whatever comes next. Samantha and Danielle, we really appreciate you coming on the podcast. And for the original research that, like I mentioned before, kind of inspired us to look more into this, all of it's just great. And I think it is helping clients make better decisions.

Samantha Lamas: Thanks for sharing your data with us. There's a lot of words, as you mentioned. But a lot of fun to work with too.

Danielle Labotka: Thank you for having us.

Cameron Passmore: Great insights. Thanks so much for joining us.

This past week, our professional colleague, Mark McGrath, posted a thread on Twitter that went viral. And when it had a warning in the opening and saying that it was not a positive message, I and many others were compelled to read it all. And it was an incredible story.

***

With that, Mark, welcome to the Rational Reminder podcast.

Mark McGrath: Thanks, Cameron. Thanks, Ben. It's nice to be here.

Cameron Passmore: Yeah. It was an incredible tweet. Thanks so much for coming on. What made you want to share this story about your dad?

Mark McGrath: I think I've wanted to share it for a while. It's been 10 years this October that this happened. And I don't know that I've had a good place to put it out in the past. I didn't have besides my close friends and close family who were there with me through that event and new friends that I've made that inevitably come up in conversation from time to time. But I didn't really have an outlet to kind of sit down and think my way through the story and the way that I wanted to tell it.

Twitter's been this incredible outlet for me. As you guys know, I do a lot of writing on Twitter. And I think I was sitting down the other night. I do a lot of writing in the evening. After my son goes to bed and I was sitting there thinking, "What am I going to write about this week?" And it's just been on my list of ideas to write about for so long.

And I think I just finally got to the point where I was comfortable enough with my own writing to be able to tell the story. But I also had I think enough of an audience in terms of the number of followers, the number of people I was interacting with on a regular basis on Twitter. Friends that I've made on Twitter that I thought would appreciate the story. And some of these friends on Twitter that I don't know very well and I just know them from Twitter. Like a lot of the finance community. It just kind of all came together and I thought I'm going to sit down and write it.

I edited it a number of times because I scheduled it out a few days in advance. And I kept going back to it and realizing there was more that I wanted to say. But at the end of the day, it's Twitter. It's a short-form platform. And you don't want to write a 5,000-word blog post. It took me some time to get to the point where I was like I think I've said enough and enough of the things I want to say.

I just kind of hit schedule and then I had a busy day yesterday with work. And when I had time to finally look back at the response to it and the reactions to it, I was just floored. Just blown away.

Ben Felix: Mark, if you're comfortable doing so, can you take us through the story?

Mark McGrath: I'd be happy to. The story is about my dad. My dad grew up in a very small town in Quebec called Chandler, which is in the Gaspé Region. And obviously, he has an anglophone last name. McGrath it's an Irish last name. He grew up in a predominantly francophone community, in a small community, with his three older siblings. His two older brothers and his older sister. And my grandparents who ran a hotel called the Shamrock Hotel. It's a very traditional Irish drinking hole and hotel.

And the way my dad described it to me was that he got picked on so relentlessly for being anglophone just by name. I mean, they grew up French-speaking and everything else and fit in by all other accounts. But he just got picked on relentlessly. He was bullied. And so, he ended up taking up martial arts and karate.

But I think as a family, they decided to get out of that town. And so, they all sort of moved out west to Vancouver. Not simultaneously. But my dad came. My grandparents came with him. I grew up living with my grandparents. And then his siblings moved out west as well.

And from the early days, he worked in my uncle's tile store. So, his older brother. My Uncle Morgan, who actually passed away last year in his 80s. He started a tile store called Tile Town. And my dad being the younger brother, he was working for his big brother just sweeping floors and that kind of stuff. And decided he wanted to do something for himself. And the only thing he knew about was tile because he'd worked for his brother.

He opened a competing store called Richmond Tile Center. And he did that at a relatively young age. And it went pretty well. He changed locations once or twice. But that was his store. That's what he did.

He was very money-conscious. He used to tell me a story but when he and my mom got married, my dad bought their first car. It was a Mini Cooper. And it cost four thousand dollars. And when he bought it, my mom was shocked. She was like, "Where did you get this money? I didn't even know you had the money to buy this car." And it was all the money he had. And he told her, "I didn't want you to marry me for my money."

And so, you can get the idea of how important money was to him from the sense that four thousand dollars to him was the world. It was a lot of money. And he's very private about it. And he remained very private about his finances throughout his life. But he ran the store.

His store for him was a means to an end. I don't think he was passionate about tile by any means. He could have grown it into a multi-location franchise or some sort of enterprise. And it just kept it as his store because it allowed him the freedom and flexibility to do the things he liked to do. But also to earn enough of an income and save enough money to meet his end goal, which was retirement. It was very clear to my brother, and I and my mom, that really what he was doing with this business was using it as a way to support his future retirement. And that's it.

He was incredibly active. Even into his 50s, he had a six-pack, which I respect now. I don't think I respected it back then. But being 39 and seeing how difficult that is to achieve I think is very impressive. He used to swim at the pool. He would do 80 laps per session. He'd do that three times a week, which was incredible. He is very, very disciplined. And a lot of that he attributed to his days in karate. He eventually got a black belt. He was very disciplined. Very shrewd with his money. And he was just pretty relentless as an entrepreneur.

He lost friendships over his business because a friend of his was a contractor, for example, and the contractor chose another tile provider for the building he was doing. And my dad just cut him off. That's it. He was just disciplined like I've never seen.

But he was great. We had a great upbringing. Great childhood. We had money. We weren't rich by most definitions. But we had everything we needed. We played sports. We had vacations. Parents never missed a game. It was, by all accounts, a good upbringing.

Fast forward, he was 58 at the time and we all went out for dinner one night. And just like some dive pub kind of place for ordering wings. He's like, "I got some news. I sold the business. I'm retiring." And we're like, "Wow. This is what you always worked for. This is it. You did it. Congratulations." And we were just over the moon for him.

He was happy. We didn't talk about the structure of the deal or like how much he sold it for or anything like that. That didn't matter. He had made the decision that, financially, he could do this. We didn't question that at all. And he booked a ticket to Asia. Spent a lot of time traveling.

Loved Japan. Loved Southeast Asia. He kind of booked a one-way ticket and said, "I'm probably going to go for a couple of months and just enjoy my time. I don't need a return ticket because I don't have the store to come back to."

He did that. And he was gone for about two and a half months before he came back. And within a couple of weeks of him coming back, he went back to work for the guys that he sold the company to. And it was a small shop. Four employees. These employees were his friends. His best friend in the whole world was the first guy that he hired at the store when this guy was 17. His name was Terry. Great guy. They were still best friends.

I think he just missed it. He just missed this thing that he built, the atmosphere, the camaraderie, the friendship. Just something to wake up and go do. He was kind of working for lunch money for a bit there.

But very quickly we noticed this – I don't want to say it was a cognitive decline in terms of his mental function and capacity. He was brilliant. He was very smart. He was still very sharp. But you could just see him change. And he used to joke a lot in the end. It just became more seldom that he would joke and that he would have fun and he would laugh.

And he's a big golfer. He was a scratch golfer. He went golfing every day for the first little bit. And I think he just kind of ran out of things to do. And I don't think he saw any of that coming. Because he had worked so hard for this moment, and he'd golfed so much, and he had travelled so much. And I think for retirement for him was just an opportunity to do more more of that. And he thought the freedom to do that. That's what retirement is supposed to be. That's what it's all about.

Very quickly we noticed sort of a depression creeping into him. And at one point he checked himself into the UBC psychiatric ward, a university hospital out here in Vancouver. And I remember him calling me from the UBC psych ward saying, "I was having some dark thoughts and I decided to check myself in."

And to me, I was happy that he had done this because it showed me that he had the wherewithal, the understanding, and the self-awareness to realize that something was going on. And I think that's impressive. Because I don't think a lot of people would have sought help that quickly. And this is before we had really noticed anything too serious going on with him.

I went to visit him there one day. He's buddies now with half the people on the ward. And I was kind of like, "What are you doing here?" And he's like, "I don't know. I shouldn't have done this. I don't belong here. So, I'm going to get myself out."

And so, he did. They prescribed him some medications and that type of thing. And he got out and we thought, "Okay, things can't be that bad." He went to the psych ward and they were kind of like, "We don't know that you need to be here."

He checked out. And then very soon after that, there's one night where my brother, my mom and I, and my dad were supposed to meet at my mom's house for dinner. My parents were living apart at this time. Completely a separate story. Totally unrelated to my dad's retirement. They'd been living apart for a long time. Still had a great relationship. They were friends. They lived down the street from each other. And my dad just didn't show up for dinner, which was very unlike him. He's very punctual. We can always call him. We could always text him. There was never a reason for him not to pick up his phone. And we just couldn't get a hold of him.

And so, we kind of just sat around twiddling our thumbs for a bit. And I distinctly remember my mom at some point going from calm and reserved to a full-blown panic attack. She screamed and she said, "Something is wrong." I don't know what hit her. But something hit her that there was something terribly wrong. It was about half an hour after he was supposed to have shown up.

And so, yeah, we thought this was kind of strange. We called the police. And we didn't know if they would do anything. Because you see in the movies and stuff, they say, like, "Well, if they're not missing for 24 or 48 hours, then we're not going to do anything." And so, we thought that that might be what they said. We just didn't know what else to do. We called his friends, they didn't pick up the phone.

The police came over and they were talking to us in my mom's living room. And as we were chatting about why we made the call, my brother noticed the constable kind of did one of these with his earpiece. And my brother noticed. He said, "What's that? You just got a call in your earpiece. What was it?" And so, he came back and he said your dad's alive, but he's been in a car accident.

I'm appreciative of the way that he said, "First, your dad's alive." Because we were obviously thinking the worst. There had been some concerns about this. And he was in the hospital. He's been in a car accident. He's fine. He's alive. He didn't say he's fine. He's alive and he's in the hospital. We were relieved at first.

And then as we were driving to the hospital, it occurred to me that we have absolutely no idea what type of condition he's in. All we know is he's alive. He could be paralyzed. He could be unconscious. He could be in a coma. We just don't know.

When we got to the hospital, there wasn't a scratch on him. He was completely fine. He was emotionally broken. He was crying. And he was telling us about how important we were to him. And how my mom was his rock and his everything. And this was strange because they'd been living apart for so long that their romantic relationship was gone and had been gone for a long time. He was holding her hand.

I remember my mom telling me after, she's like, "He hasn't held my hand like that in years." There was something going on inside him. He walked away from it without a scratch. And they had to use the jaws of life to actually pry him from the wreckage of the car. The accident was so bad.

Ben Felix: Incredible.

Cameron Passmore: And it was really strange because he was such a good driver. I know a lot of guys think they're great drivers. Probably a lot of confirmation bias there. But he really was. He just had an exceptional driving record. And the intersection where this accident happened, it's a J-curve intersection.

If you go straight through that J-curve, it goes up a hill into a strip mall. And from what the police officers told us, from what the cameras caught at the intersection, is he went around 100 kilometres an hour through that intersection. The speed zone is 60. There's no reason for him to be driving 100 kilometres through this intersection. It's an intersection that he drives twice a day on his way to and from work. It wasn't a new intersection to him. He knew exactly where he was going.

But he was wearing a seat belt, which was really, really strange. Because now we're saying, "Did he do this intentionally? But if he did, why did he put his seatbelt on? What was the purpose of – how did this all happen?" And he wouldn't really explain himself.

I called his friend, Terry, his best friend, and said like, "What do you think's going on?" He's like, "I don't know. But your dad told me that he hid his wallet under a garbage can in a parkade on the other side of town before the accident happened and he told me not to tell you guys. And I'm telling you now because I think it's important and I don't know why he did this or didn't want you to know about it. But I think you should know."

And the only reason that I can think he would have done that is because he didn't want his identity to be revealed at the scene of the accident. I don't have an answer to why. And maybe there isn't an answer. Maybe it was just confusion or something. But that's what he did.

Things are getting stranger for us obviously. But he seemed to come out of it kind of okay. It seemed like there was some sort of revelation or epiphany after this accident. And he realized things were not that bad. And he was very caring and very emotional.

But very quickly, like within a very short period of time, he started to decline again. And he was terrified that the police were coming after him over the accident. He thought he was going to jail. And so, he was arranging his affairs in such a way that he was going to jail. And we just could not describe to him that this was silly. There was no crime. He hadn't hurt anybody, thankfully. He hadn't even hurt himself at the end of the day. He hadn't committed a crime. I mean, a speeding ticket is really all he is guilty of. But he could not get it out of his head that he was going to prison over this. And it consumed him.

From that point on, he physically changed. He lost weight. He stopped eating steak. And he used to make hamburgers with raw ground beef. And he would eat the raw ground beef while he was making hamburgers. That's how much he loved meat. Disgusting, I know. We used to laugh at him for doing it. But he just loved meat so much.

For him to just not eat steak all of a sudden was a really big red flag for us. And he stopped drinking beers. He loved his beers. Just Coronas, light beers. But he just stopped drink them all together. And it wasn't because he had a problem with alcohol. It was because he said he didn't like beer anymore. He was having this physical manifestation of these changes in him.

At the time, I was working at a bank. And I was on the Sky Train home from work one day. And he called me. He said, "What are you up to?" And I was like, "I'm just on my way home from work." "What are you up to, Dad?" He said, "Well, I got in a fight with your mom. I'm going to go grab a hotel." I was like, "Oh, okay. Just come to my place. Just come crash at my house. You don't need to go get a hotel. Don't be silly. I'll be home in 15 minutes. Just drive over. It's half an hour away." He's like, "No, no, no. I don't want to put you out. I don't want to bother you. It's fine. I'm going to go grab a hotel. Call me tomorrow."

That was the last time I talked to him. And it's strange for me to reflect on that moment because it was such a casual conversation. And at that time, there was nothing that jumped out about his demeanour or his language that indicated to me that anything was more or less wrong than it had been over the previous couple of months.

The rest of that evening for me was pretty normal. I went home. My wife and I had dinner. Went to bed. And at 11.00pm, 11.30pm, I was sleeping. My phone rang. It was a private number. As a rule, I don't answer private calls. I ignored it. Tried to go back to sleep. And within seconds, they called back. That's strange. I picked up the phone. And it was a police officer. And he says, "Is this Mark?" I said, "Yes." He's like, "Your mom is very upset, and you need to go to her house." And I'm kind of half asleep. I'm like, "What do you mean I need to drive to my mom's house? It's a 40, 45-minute drive. It's 40 kilometres away. It's 11.30pm for me. It's kind of the middle of the night. Why do I need to go there?" And he just kept reiterating, "She's very upset. She needs you. You need to go to her house."

And I told him, "Look, if I'm getting dressed and driving across town at 11.30pm at night on a Thursday, you better tell me why." And he just kind of took a breath and there was a pause, and he said, "Your father's dead." It hits you. It's physical. And you hear the words. But just the air comes out of you. I dropped the phone and I fell to my knees. And all I remember saying is I had so much that I wanted to tell him. It wasn't even about there's going to be things in my life that we haven't experienced yet. There's just things I wanted to chat about with him that I didn't get to. It was really difficult.

And I drove to my mom's. And they told us what happened. He drove into the middle of the Lionsgate Bridge in Vancouver, which is a huge iconic bridge. He had rented a car, which he had a nice car. He didn't need to rent a car. And he just pulled it up in the middle of the lane. He didn't pull over or anything. He just got out. Hit the hazard lights. Of course, because he's being considerate, I guess, of the other drivers. And he left the door open and he just went up. And it didn't take him a second, he jumped. And a cyclist saw what happened.

And I remember when they explained what happened, it occurred to me that people call that the coward's way out. And I remember distinctly thinking about how brave you have to be to stand at the precipice and look down into the fog. It was a foggy night. That drop is – I don't know how big it is. But, I mean, there's no coming back from it. I remember thinking it was a very brave act. And there was no cowardice in it. He did it. And we were kind of left to pick up the pieces.

But I think at the end of this story, the reason I'm telling it is because here's an example of somebody who had it all figured out. Who financially was fit. Who, going into this mentally, was fit. Physically was fit. Socially was fit. Had everything that you think somebody would need to go and enjoy a successful retirement. And he was completely undone by it in less than 18 months.

And I believe it's because his identity was so attached to his business. I don't think he realized that the business that he had created and the community that he had created through his business was so ingrained in him and so important to him that flicking the switch and selling it and being gone the next day, it just stripped him. It stripped them of everything that he was. And his identity was gone. And I think he was just probably just loneliness and emptiness if nothing else.

That's the story. I didn't mean to go on as long as I did. But I think it's helpful for me to even just say it out loud. So, thank you.

Cameron Passmore: Thank you for sharing it, Mark. It's an incredible story. How has this experience with your dad affected the way that you talk to your clients? You're an advisor in British Columbia. How does this affect your relationship? The way you talk to clients about retirement?

Mark McGrath: It's something I think I still need to get better at doing. I have experience in this firsthand because of this, what I've gone through. But I don't have training in this. I'm not a psychologist. Somebody else on Twitter mentioned to me, another advisor, the best thing he did for himself was he actually went and got palliative care and bereavement training. To be able to have these conversations with people.

And I thought, "Wow. That's just so outside the box." And it's something I would have never thought to do. And I think as advisors, we believe that our clients probably have some other network or some other outlet or somewhere to go, whether it's through like a program they have at work, or just people they know. Or they've prepared for this and we're just responsible for the financial silo of it. We spend so much time talking about money and preparing them for that that I believe it's difficult to also consider the mental and social issues of retirement.

It's something I'm trying to get better at and trying to implement in conversations with clients. I don't have a great framework. But in hearing the stories from people on Twitter that have reached out to me over the past 24 hours, I have hundreds of messages of people just writing to me and saying, "I went through the same thing. My parents went through it. My uncle went through it. I'm about to retire and I hadn't thought of this. And now I'm terrified.”

And that wasn't my intent. But I didn't realize how common it was until I started getting these responses and these messages. And so, now I do want to think about this more. And I do want to make this a more integral part of the conversations that I have. I've been kind of taking notes on some of these responses. And people sharing resources, and books, and YouTube videos about this exact topic. I've got some work to do to get better at it.

Ben Felix: Incredible. How did the whole experience you just talked about and that story that you told us, how has it affected the way that you approach your own life?

Mark McGrath: I don't think I really needed to think about it too much until quite recently. I joined a team with the firm I work for now. I joined a pre-existing team. But prior to that, I was with a bigger firm. And it was more nine-to-five. I had a lot of freedom and a lot of flexibility. And work was just work. I wasn't trying to build a business. I wasn't trying to build a reputation. I just showed up.

I had all the freedom in the world. I could kind of do whatever I wanted and nobody was going to breathe down my neck about it. My work certainly wasn't my identity at that point. Even though I loved the type of work that I do, the financial planning work we do and the relationships we have with people is important to me, my work wasn't everything.

But now I'm seeing in myself how easy it is to go down this path. Because now that I'm working for this team and I'm, in effect, more responsible for my own destiny in terms of how I create my business and how I do the work that I do, I'm starting just to acknowledge and to realize how easy it is to go down this path.

My son goes to bed at night and I go back to work. And I'm telling myself it's because there's work to be done. But I have to admit, I love it. And so, am I really just filling my free time with work because that's what I want to do?

And I'm out there on Twitter every day talking to people about financial planning and I'm giving non-advice, per se, about guidance. And my inbox is full of people who just maybe wouldn't be a good client for me. And I'm saying, "Let's just hop on a call and maybe I can help you with something."

My dad was the tile guy. And am I creating a life for myself? Or I'm the money guy? And I don't think I had to worry about it until the past 12 to 18 months. I think it's affecting me now. And I think it's something that I need to recognize in knowledge and do something about. And I'm 39 now. I've got time to do it. I know myself. I can just see myself pushing this off and saying this is something you will deal with later. And I don't want to do that.

Cameron Passmore: For those who are interested, they can follow you @MarkMcGrathCFP on Twitter. What message do you want to leave with our listeners and viewers?

Mark McGrath: I think you need to start thinking about this. And I don't think there's ever a time that's too early to think about it. I'm honestly only realizing this because of the number of people that I've talked to in the past 24 hours that have reached out with stories. Some of them are 25-years-old and they're building a business and they're saying, "Your message meant something to me because I'm just so ingrained in this business. And I recognize that if I can look at this now and think about this now, I just have a longer runway to prepare, and to find value, and fulfillment and meaning in some other area of my life that will definitely be there when retirement comes."

I'd say look at it now. And I don't know that I've got the answer on how to solve the problem. I do think that your relationships, with people, with your family, with people, with your community, being of service to people. Whether it's friends, or family, or volunteering, or something like that. Anything that I think that you find rewarding that you can sit back and be proud of and be happy that you contributed to can be perhaps an outlet for this. Because I don't think retirement is just about going golfing and travelling. I think you just get sick of that really quickly. If there's one message I think, it's look at this now regardless of where you are in your journey towards retirement. Or if you're in retirement, think about it now.

Cameron Passmore: It's a great message. Mark, thanks so much for sharing. It's been great to get to know you over the past few weeks, certainly on Twitter and a few conversations. I appreciate that. And we're lucky to have you in our Canadian advisory community. Thanks, Mark.

Mark McGrath: Thanks, guys. And you've done a tremendous credit to the industry, to the people of Canada, to advisors like myself. And I'm grateful. Thank you.

***

Cameron Passmore: All right. Let's jump into one episode in 60 seconds. And before I start, the notes for this, Ben, were prepared before Mark's tweet, sharing the story of his father. And it's interesting to think about it because that story, combined with Dennis' main message, really does make one pause and consider who we are and who we want to become. That was the main message from this conversation with Dennis.

With that, let's go to the episode review. Dennis Moseley Williams joined us in episode 85. Dennis is an advisor to advisors like us, coaching financial advisory firms on how to deliver a great client experience. What does that mean, great client experience? We are living in an experienced economy. And in financial services, that means people deserve more than simply the service of retirement planning and portfolio management. Those are services which can be delivered in a way to save time and money. However, consumers are looking for something more. They want to become something more. This is what people want and deserve. A shift from the products and services to what you're going to do with your money and who you want to become. And that is what Dennis is all about.

This requires an advisor interested in you that asks great questions that gets you in a space that you can think about all this. This is the kind of experience that people are looking for. And this means that you, as a consumer, need to, of course, do proper due diligence. And then you need to find an advisor and a firm where you feel at home, where you can check your fear and uncertainty and feel free to imagine the possible. To have a well-designed experienced, time well spent. Fantastic conversation. That was episode 85 with Dennis Moseley Williams.

It's also interesting, Ben to think about this to link back with a conversation with Sam and Danielle too, right? To have a space out of those goals conversations as well. It's interesting now, like I said off the top, how all these things come together in this one episode.

Ben Felix: As you're recapping the episode of Dennis, I was thinking the exact same thing. How well does that episode fit in with both of these other conversations that we have in this episode? It's incredible.

Cameron Passmore: And the other thing that I'd forgotten that we learned was that you were super cool. I mean, not that you're not super cool now. But you used to press your own skateboards.

Ben Felix: That is true.

Cameron Passmore: I've forgotten all about that.

Ben Felix: I used to take, I guess, it was eighth-inch plywood. And I had a skateboard press. It's like wood that's been cut out in whatever shape you want. You have a curve and then you have maybe a tail for the little kicktail or whatever. I used to press plywood into skateboards and ride them around. It's true.

Cameron Passmore: And now can you make that in your 3D printer?

Ben Felix: I could make the press shapes probably out of the 3D printer. But not the actual skateboard though. How did that come up in a conversation with Dennis?

Cameron Passmore: Dennis is so engaging and so – he's hilarious. And it was really fun to go back and listen to it. And it's timeless, which is a great conversation. He was also on with our friend, Jason Pereira, last week. Also a great conversation that they had.

All right. Let's go to the book review if that's good with you? This week is a book referred by a friend of ours, Ben in Montreal. Ben, thank you. You're a very thought full reader. As soon as you recommended it, I knew we had to read this book. And it is called The Status Game: Human Life and How to Play It by Will Storr.

Will Storr is a British author and has been a contributing editor to Esquire and GQ Australia. Author of six books including both fiction and non-fiction. Probably best known, as I've looked into him, for his science of storytelling workshops that he leads around the world, which is cool.

Anyways, the main point of the book is that our brains are continually, and as he says in countless ways, measuring where we sit versus other people. And you and I have talked about this a lot. You've talked about how we as humans compare ourselves to others and how we measure our life satisfaction often in relation to others.

The author proposes that life is a status game. And that we're all playing this game. But the rules are hidden. They're built into us. They silently direct us. How we think, what we believe, and how we act. He argues that the game is inside of us and we cannot help but play this status game, which is so interesting to think about.

Anyways, these processes that our brain goes through our subconscious are completely hidden. And basically, the brain feeds you this simplification of stories of your life so that you can create your own life story. And this story ties together all this chaos that we all live in every single day to make it tolerable for our brain to understand what we're living.

And so, the book is about this game. It's really well written. It really makes you stop and think. I've got a ton of notes. I could be here all day talking about it. Perhaps not that great. It's just such a deep-thinking book.

Anyways, the status is when people defer to us, offer respect, admiration or praise or allow us to influence them in some way. It is not about being liked or accepted. Those are separate needs. And those are associated connections. Status is about people deferring to us, offering us respect, admiration or praise.

And again, we've talked about this a lot with all kinds of different guests over the past almost five years now. There's a powerful link between status and well-being. And we work hard to accomplish status by seeking connection with others and to be accepted into a group.

And this is demonstrated by the group's approval or a claim. And workforce is such as a great example. Talked about that. We talked about how often there's big eagle leaders. And this goes back to Humbitous, right? Big eagle leaders does not necessarily mean they have status.

And the author here talks about how a relatively low-ranking team member can go into work meeting, contribute a great idea, receive attention, praise and influence, leave feeling great. They gain status in that environment.

Status symbols. Talked a lot about that in the book. We use status symbols to attempt to demonstrate that we are part of a group and to effectively make it easier for others to see what group we are in and also to seek admiration. And this goes on invisibly, which really makes you stop and think. Because there is no definitive scorecard in the status game, we can never see where players sit versus us in the rankings.

One way to see where you are is to look for symbols that we might attach particular value. In order to manage this process, the subconscious has a status detection system that includes mechanisms that read relevant cues in the environment to assess status. Owning stuff, he says, is all to do with status amongst competitors.

It makes me think of the example of Morgan Housel. He may have used this in our conversation. He was a valet driver. Parking cars in Southern California when he was young. And he used to admire the fancy cars when they would come in. But he says, "I never admired the driver." Whereas a driver may have bought that status car, unbeknownst that person that they were buying this thinking they would have status as a cue for status, which really is interesting.

Ben Felix: But it might make them feel like they have it though.

Cameron Passmore: Correct.

Ben Felix: You should have seen when I did a YouTube video on luxury vehicles. And I talked about the literature suggesting that they don't make you happier. They don't increase you well-being. All that kind of stuff. You should have seen the furious comments from luxury vehicle owners about how important it is to their life and to their identity. And I'm just like, "All right, man. If it's that important to you, cool."

Cameron Passmore: Well, I've thought about this. Because as you know, I drive a relatively nice German car. Am I just convincing myself that really like the feel, the tightness? I think I do. But I can't be oblivious to what argument the author is making, which is maybe deep down somewhere I'm putting this message out that a German car sending a signal.

Ben Felix: I don't know.

Cameron Passmore: I must say, I love every time I drive. But I have no regrets. I've had it now for four years. No regrets. I don't know.

Ben Felix: You have told me more than once that you don't regret having that car though.

Cameron Passmore: Never.

Ben Felix: But you've told me that more than once. Maybe you questioned it on some level.

Cameron Passmore: Maybe. But it is a level I'm not aware of. Summertime, man. Nice day to wash it. I love it. Maybe that's sending a signal too. Who knows? But what about even you and I? We don't wear suits anymore. We're in pretty casual clothes. Is that some sort of status symbol deep down that we're sending a signal that we don't need to have suits? I don't know.

Ben Felix: Interesting question.

Cameron Passmore: Anyways, researchers find that happiness isn't closely linked to our macro socio-economic status. It's actually our smaller games that matter. Studies show that respect and admiration within one's local group, but not socioeconomic status, predicts subjective well-being.

Anyways, talk a lot about successful groups are status-generating machines. They thrive when they make status both for their players and for the game itself. And they talk about how this happens in professions or trades. Take our industry, for example, credentials, levels of expertise, and master level. You could be a master chef, or a master blacksmith, or a certain level of lawyer, or a brewer for example. All of these are status levels that are recognized inside your group.

Ambitious young players apprenticed before moving to the next level and be very common I think in a lot of different trades. Then this was fascinating. They talk about how a work ethic came into being largely caused by these groups in which work itself became prestigious. This shifted to a more work-centred society through the Industrial Revolution.

Where we get status has shifted over the centuries. It used to come more from what we did for the clan. I'm quoting here. The community. And now it is more shifted to our individual competence and success and the signalling around that. We are turning into a new sort of human with a new style of game-playing brain. We are more independent, more self-focused, more outward looking and more interested in personal excellence. Less conformist. And less in awe of tradition. Kind of interesting.

Ben Felix: Very.

Cameron Passmore: Adam Smith didn't believe greed for wealth was the ultimate driver of economies. He thought something else was going on. Something deeper in the human psyche. "Humanity does not desire to be great, but to be beloved." That was written in 1759. “The rich man glories in his riches because he feels they naturally draw upon him the attention of the world. And he is fonder of his wealth on this account than for all the other advantages it procures him.”

“The need for attention and approval was, for Smith, a fundamental part of the human condition. We strive to better a lot because we seek to be observed, to be attended to and to be taken care of.” Kind of interesting stuff.

Cameron Passmore: It is.

Ben Felix: He posed these questions at the end. Is it possible to live without status? How important it is we have this invisible drive for status, for respect and admiration?

That's the Andrew Hallam question about luxury cars. This is the litmus test. Would you want your fancy German car if you lived on a desert island with paved roads that nobody else would ever see it?

Cameron Passmore: I remember when he asked that. It's a good question.

Ben Felix: There you go. No status on a desert island.

Cameron Passmore: And I think I'd say yes. And listeners probably think I'm nuts.

Ben Felix: I don't think that that's necessarily true.

Cameron Passmore: There you go. Really enjoyed the book. Very thoughtful book. And thanks to Ben for the recommendation, The Status Game.

Ben Felix: I think that book fits with the overall theme of this episode. It's almost as if we planned the episode out.

Cameron Passmore: The great illusion.

Ben Felix: We didn't.

Cameron Passmore: Okay. Let's go to the after-show. So much going on this past week. I know we're not a new show. But any observations on our thoughts after almost a week now since Silicon Valley Bank (SBV)?

Ben Felix: My observation is that I'm not going to volunteer my observation because everybody else did.

Cameron Passmore: Kind of like it's old and said. But I think a lot of people either learned or relearned a lot.

Ben Felix: I want to do a video, and maybe a Rational Reminder podcast topic on what is a risk-free asset. Or which asset is riskless? Because that was one of the big lessons from SBV. They owned the definitional riskless asset. But they had a duration mismatch, which caused some real problems.

Cameron Passmore: Yeah, and some wild moves in the fixed-income market too. Biggest moves in the past. I think some of them were almost 30 years. Two, three-year term moves.

A couple weeks ago we mentioned asking people if they could chime in with some ratings on Apple. We got 20 new ratings. We're almost at a thousand. Five more to a thousand.

Ben Felix: From our completely arbitrary goal of a thousand.

Cameron Passmore: I wanted to ask you too. Mark was on today. And it was great to have him. You've been much more active on Twitter and are more deliberate in putting out threads. And I'm becoming a little more deliberate also. Any thoughts around that?

Ben Felix: It's a place where a lot of people are. And as much as I haven't been active tweeting on Twitter for a while, it's one of the places that I go to scroll when I want to scroll stuff. Along with Reddit usually. But there are a lot of eyeballs on Twitter. There are a lot of people interacting socially on Twitter. And I thought it would be another place where we could share some of the work that we've done.

Cameron Passmore: This is the part that I think I did a better job of connecting the dots this past week as I told you and Angelica. There's a lot of people lurking there. And even though we might have a few thousand followers, it can get presented to many, many more people. And although I knew that, when you see some threads, like Mark's thread that we talked about seen by several million people. Once something gets picked up and goes viral can be very impactful.

Ben Felix: Even when it doesn't.

Cameron Passmore: For sure.

Ben Felix: Even when it doesn't go viral, I think a lot of people are saying the stuff on Twitter. It's a very interesting platform. Hopefully, it doesn't implode.

Cameron Passmore: My experience lately has been great. I find my feed is super clean. Not too many ads. Not too much junk.

Ben Felix: The following feed where you only see stuff from the people you're following is very clean.

Cameron Passmore: I even find the other one, the for you feed to be clean. I've cleaned out all the political stuff. Maybe that's why. I don't know.

Let's go through some reviews. Do you want to kick it off?

Ben Felix: Sure. From Saska in Canada. They say that every episode is five stars. “Worth it every time. The perfect finance podcast. That is very kind.”

Cameron Passmore: Ardram, again from the states, on the Apple podcast. “My favourite podcast. While I'm not a financial professional, I've learned to continue and continue to learn so much from this wonderful podcast. I've been inspired to learn additional content. We offer so much value of information and insight into financial topics and living a good life. And I've greatly enjoyed the academic integrity.”

“I can honestly say that I read many more books now. And I find myself habitually applying what I've learned. I feel like I'm a student in a graduate-level class each time I start a new episode, which is a delightful feeling!”

Ben Felix: Kind of a cool way to describe the podcast. That's very kind. Kobe Trey from the United States says that it's a fantastic podcast. “I cannot get enough of the thoughtful content in this podcast after being a bogle head-type investor for 20 years. They've broadened my horizons. I've listened to probably hundreds of hours of their podcast and find them to be wonderfully evidence-based.”

“As a physician, I find this very refreshing. I have shared their podcast with many of my friends and colleagues. Thank you, gentlemen, for all that you do.” We appreciate you sharing the podcast, Kobe Trey, and the kind words.

Cameron Passmore: Mike Flitt from the states, “Fantastic show that digs into details most podcasts or shows aren't willing to get into. It's relief for a financial show that doesn't gloss over jargon and bury the reader in confusion but I actually explain mechanics in a way that is understandable to most. The bar is set high by Ben and Cameron.” Thanks, Mike.

Ben Felix: That review makes me think that we maybe should have given a more detailed take on SBV. Maybe next week.

Cameron Passmore: Well, you did see it come in with a podcast or YouTube. Then we'll touch on it.

Ben Felix: That's true. And there was just so much information out there. It was like overload with predictions, and opinion and explanations from every possible angle from various levels of expertise. I just couldn't – felt wrong to contribute to that.

The Big B master from Canada says. “Great podcast. This podcast is a real gem. If you love learning, then you're going to love this podcast.”

Cameron Passmore: Duncan McN from Canada, “Great to hear a Canadian perspective. The podcast has a lot of complex information delivered clearly. Hearing interesting financial topics from north of the border is a big bonus.”

Had some amazing people reach out to us this past couple weeks. Justin in San Francisco says we are keeping him on plan and is asking about a meet-up in Los Angeles, which may happen in September. If you are interested in that and want to try to convince us, you can drop a note to info@rationalreminder.ca. That was on LinkedIn.

Ben Felix: We'll be there anyway. I don't know how much convincing we need, right?

Cameron Passmore: Oh, it takes some energy to organize it and whatnot. We'll see.

Ben Felix: Yeah, that's true.

Cameron Passmore: Got a really nice email from Kristen. And she said I could read this out. “Hi, there. I just wanted to send a note of thanks for your informative podcast. I was introduced through the Money Mechanic from the FI Garage podcast and Epic podcast. As he speaks highly of you both in the past couple of years, I've become much more interested in DIY investing and learning to take control of my finances and behaviours surrounding money.

Although I have established some good habits like paying myself first with low-cost diversified index ETFs, I had become interested in dividend strategies and started implementing a small percentage to my portfolio. Since listening to your podcast, I will now be ceasing that strategy and sticking with my original plan. Although I had to listen and re-listen to the various podcasts on the irrelevance of dividends.

I feel like it is now sinking in. I see how the math research stats just don't measure up to an indexing strategy. Ultimately, I would love someone to tell me that it will be all okay in my retirement and I know that there isn't a crystal ball. But I do appreciate the effort to put forward to back up your arguments with these important rational reminders. Anyhow, I want to share my gratitude and look forward to learning more.”

Kristen, thanks for the kind note.

Ben Felix: I don't want to complicate things for Kristen. But I think it's important to say this, that a dividend strategy has exposure to multiple risk factors. Dividend yield proxies for exposure to other risks, like value, and profitability, and investment.

To say that indexing is unconditionally superior to dividend investing, I don't know if that's necessarily true. I think indexing is more diversified. It's likely to be more tax efficient depending on your situation. But in a lot of cases, it will be. But a well-diversified dividend portfolio could well have higher expected returns than a market CAP-weighted index fund. To have that conversation properly, you have to control for exposure to other risks.

A factor tilt-matched portfolio that uses low-cost index funds and similar types of products, I think that is objectively superior to a dividend strategy. But to say that indexing is unconditionally better than a dividend portfolio, I mean, that gets – and I don't want to complicate things for Kristen, which I'm absolutely doing. But I had to say that.

Cameron Passmore: On Twitter, I got a really nice note from Dominic in Poland. He said, “I recently shared the RRP podcast on Twitter in a Polish thread regarding best financial content on the internet. I have to admit, I'm really pleased you were the one who liked my comment. I'm from Poland and I have been listening to your and Ben's podcast for over two years now. And I cannot emphasize enough how big an impact you guys have had on my approach to finance.

The quality of information you are sharing is incredible. And this is especially valuable for an Eastern European guy like me where access to such content is limited and where self-made investing gurus and fat greedy mutual funds make investing complicated and confusing. But there is light at the end of the tunnel.

Recent years have brought some change. And there was more and more information regarding sensible approaches to investing. And I think you guys had your part in it. Thanks so much for your work. Greetings from Poland.” That was Dominic. Thanks for reaching out.

Mirin says that he's very happy to see Ben actively tweeting. That was on Twitter. And I want to thank Evan in St. Catharine’s and Luke in Oklahoma who are two very active supporters of our messages on Twitter. Just a shout-out to Evan, Luke.

Anything cooking in the community lately, Ben?

Ben Felix: I think probably the most active discussion recently has been on the SVB situation. I mean, of course, I've been reading that discussion. As I've been reading all of the other stuff on the topic because it's a big thing that happened. That's been in there. And a lot of discussion on risk parity and momentum. It gets pretty intense in there. There's some deep, deep, deep rabbit holes that are just getting deeper and deeper by the minute in the Rational Reminder community.

Cameron Passmore: Last call for our meetup next week on the 28th, March 28th in Montreal. If you're interested in joining us, info@rationalreminder.ca. We've confirmed a date for our meetup in Toronto. That will be September 20th in the evening. Again, email. Let us know if you're interested.

Connect with us. We're both on Twitter. Ben's more active on Twitter, and people are liking it. Anything else, Ben?

Ben Felix: I think that's good.

Cameron Passmore: Always available on LinkedIn too. I'm hearing from a ton of people on LinkedIn. I'm hearing from a lot of advisors. If you want to reach out and chat, love talking with advisors wherever you are. As always, thanks, everybody, for listening.

Is there an error in the transcript? Let us know! Email us at info@rationalreminder.ca.

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