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 episodes. (1:04:05)
Developments in the Rational Reminder community. (1:05:30)
Upcoming podcast guests and recent podcast reviews. (1:10:25)
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 237 of the Rational Reminder Podcast. All right, Ben. Dive away into the main topic.
Ben Felix: All right. Who do you want to be? Maybe a funny-sounding thing on a podcast about financial stuff, but yeah, maybe not.
Cameron Passmore: Maybe not.
Ben Felix: It'll be evident soon why it's not a weird thing, but it may strike people that this is a strange thing to be talking about.
Cameron Passmore: And it will not be a weird thing when you listen to the episodes coming up next week and in three weeks. It all ties together, beautifully, so I applaud you for diving into this topic this week.
Ben Felix: Upcoming episodes for sure. Next week, I'm going to refer to the research and writing of someone named Ralph Keeney who people may be familiar with. We've discussed his research in the past when we did the goal survey. He's coming up next week. I don't know how much overlap there's going to be between this discussion and the discussion with Ralph. There'll be some overlap. My hunch is that this is going to be distinct because it's focused on one specific topic that he touches on in his book. Then next week with Ralph, it's going to be much more broad, so I'm hoping that next week just enhances the discussion that we have this week, as opposed to duplicating it. Anyway, so he said that one of our objectives for this season or year, whatever you want to call it of the podcast, was to go back to basics. We did one episode at the end of last year, we talked about the basics of investing and that was very well received. So we said, "Okay. Let's go back to basics."
I've been thinking a lot about, what does that mean, if we go back to basics. Not just of investing, because that's one episode. We did that episode. Maybe it's a few episodes, but it's not a season. This podcast is about financial decision-making, sensible investing and financial decision-making. Financial decision-making is a lot more broad and far-reaching. I think that one of the foundations of that, of sensible investing and financial decision-making, is developing your personal values as a foundation for making decisions. I'm thinking a lot about what is financial planning, and where does financial planning start from and what is the definition of a good decision? So we step back and think about what is financial planning.
Personal financial planning is the process for thoughtfully making decisions about the way that money interacts with your life. I made that up.
Cameron Passmore: It's pretty good.
Ben Felix: I didn't make this next part up from a textbook. I made that last part up.
Cameron Passmore: You're a one-hit-wonder.
Ben Felix: Financial planning starts with an assessment of your current situation. It compares that to your desired future situation, and then it developed strategies to optimally allocate resources toward the desired future state. That's pretty textbook, right?
Cameron Passmore: I'm laughing because you and I had this discussion about regret, Daniel Pink's book as we're researching for that interview, so it ties into that as well. So it's all one big intertwined bundle, it's incredible.
Ben Felix: So regret's in here, it comes up in the process for figuring out what your values are later. And I thought that was very exciting when I read that in Ralph Keeney's book because I had a whole section on that in the paper that we did, Finding and Funding a Good Life. So it was good to see that I'm not alone in thinking about potential future regret has a place in determining what is important to you with that lens of financial planning. But it's developing strategies to optimally allocate resources toward a desired future state. Through that lens, money and finance are really profound technologies. They, as technologies allow us to move economic value through time by borrowing and investing. They allow us to reallocate risk using financial contracts like insurance is a common one to think about. They let us allocate capital in a way that matches our circumstances and objectives.
That's pretty profound, when you think about it, when you think about the history of humanity, leading up to the current complex society that we live in. The functions of money and finance are quite profound. I think, for personal financial decision-making, they create an environment where we have a lot of options to do a lot of cool stuff in terms of planning. But of course, you need to know what to do on the financial planning side, but you also have to start from what is important to you.
That statement that you want to optimally allocate resources toward a desired future state. That of course sounds perfectly logical. Engineers that are listening are probably drooling about it. But good financial decisions, and of course, people have heard us talk about this on the podcast before good financial decisions are highly subjective. An optimal decision for you, Cameron or for someone listening may be suboptimal for me, just because we have different values. So I think, financial planning requires a fundamental understanding of not only your financial situation, which of course is important but also of who you are and who you want to become. That's the premise of the topic. I guess that was a long introduction to what I want to say.
Of course, I don't have answers to those questions of who you are and who you want to become. Only you, the listener has the ability to do that, or knows the answers to those questions or can figure the answer to those questions out. But what I want to try and do in the point of this topic is to provide useful tools to think through that. This is a big thing. That's one thing I took away from reading Ralph Keeney's book. This isn't something that you will figure out as you read the book. It's like a multi-day, multi-week, potentially involving third parties, family members, and friends or whatever.
I spoke with Ralph today because we're recording with him next week. We needed to speak about some things. I randomly had a phone call with them earlier about next week's episode. We chatted about this briefly, but we talked about how it's a lot of work upfront. But once the work is done, you'll always have, because your value doesn't change much through time. So you always have this foundation to refer back to when you're making a decision, which results in more consistent, better decisions. But anyway, it's a big thing to do upfront. So I want to, I guess, emphasize that. You're not going to listen to this episode and come away with it, knowing what your values are. It's a large undertaking that will be difficult and require a lot of thought.
Cameron Passmore: Isn’t it Roy Disney that's attributed that quote, something like, "When your values are clear, your decisions are easy." I think that's who commonly gets attributed with that quote, happy to be corrected.
Ben Felix: It's a great quote. I'll give you another quote from Ralph Keeney that I think is pretty powerful. “Your decisions offer the only way to purposefully influence anything in your life.” That's a big statement, right? You hear that? It's like, "Wow, it's true.” It doesn't mean you control the outcome, but that's not what he's saying. It's the only way to purposefully influence anything in your life. Of course, people make decisions daily. The effect of those decisions compound over time. To make good decisions, including financial ones and to get things compounding in the right direction, you need to know what you value.
Now, to reiterate, creating your life's values or your life's objectives is a huge task. Again, you're not going to listen to the episode and come away with it, knowing the answer to those questions and that's not the point. The point is to provide the tools to do that. I'm going to draw on Ralph. He has a whole section in his book dedicated specifically to this. His book is about decision-making in general. But one of the last chapters is dedicated to creating objectives for your life. So you're ready to jump into the process?
Cameron Passmore: Fire away.
Ben Felix: Long preamble, I guess. Some of this is similar-ish to the stuff we've talked about on goals before. But there's also a lot of new stuff. So the first step, create a list of your life values. This involves taking the time to think about what is important to you personally. Sit down, make a list. Your life values incorporate your thoughts and feelings, and they also involve dreaming about how you want your life to be. Now, again, as people have heard us discuss before, based on Ralph Keeney's research and other research, empirically, it is highly likely that this initial list is not going to reflect all of your values. People typically identify fewer than half of their significant values on the first attempt and values that they do not initially identify are often just as important as those that they didn't include on their initial list.
To elicit more values, so you sit down and make this list of your values, and then I'll give some examples later so that people have something to latch onto to think about. So you make your initial list. To elicit more values, Keeney suggests, visualizing the life that you want or imagining the autobiography that you would hope to write about your future self. In this exercise, and this isn't in Ralph's book, but just drawing and other stuff that we've done on this in that visualization exercise, I think it's important to visualize the details and thinking about the future, we know people have a tendency to ignore the unrelated events, which will influence future thoughts and emotions, like imagining a dream job, and how great it will be, how happy you'll feel, but not considering the feeling of a longer commute, or the stress of tighter deadlines, or a bigger workload or whatever.
So really thinking about the details, so you don't end up imagining a future that's not realistic or doesn't reflect a future that you actually want. To add on to that, it’s important because experienced happiness is more in the day-to-day details of life than it is in stable circumstances. So if you end up putting yourself in a position where you don't like the day-to-day details of your life, that'd be bad news. That's another step I guess, is to do the visualization. Then Ralph, in his book has six more thought exercises to go through, so I'm going to talk through them as they're written in the book. Then, if you were sitting down to do these exercises, you would be adding to your list of values as they come up, as you do these thought experiments.
The first one is, to consider the activities that you spent a significant amount of time doing. Ask yourself what you like and enjoy about the activities. Also, ask if there are any unintended consequences you'd like to avoid and your answers to each of those suggest values that can be added to your list. Reflect on both very good and very bad decisions that you've made in the past. For good decisions, recognize what values were achieved that made the decision so good. For bad decisions, recognize what values were either not achieved or even not considered that should have been. The next one is, identify a very good and very bad outcome from some of your past decisions. For the good outcomes, identify values that were achieved. For the bad outcomes, identify which values were negatively impacted.
Cameron Passmore: It's really smart.
Ben Felix: It's interesting.
Cameron Passmore: And you can see why it takes time. I was going to say, each one of these, you could sit down for hours or a long time to think through to do it properly. Okay. So the fourth one, imagine yourself at different ages in the future. Select about four different ages when you believe that your main concerns may be somewhat different from your concerns today. For each age, think hard about life values. You may have them. To facilitate your thinking, you may identify friends, family or acquaintances of those ages that you respect and admire today, and consider the values they likely pursued to gain your respect and admiration. Another one that he gets think about for a long time. Two more.
Think hard about what you might regret in the future if you had not included it in your life, or had not enough time allocated to it. Review your life from today. Also, 20 years from now and identify any major aspects or experiences that are or likely will be missing. These thoughts should help you identify some important life values. The last one, inquire about the perspectives of your family and friends, what values might each of them suggests for you, think carefully about whether these suggested values are appropriate for you, and not just values that someone hoped that you would have. Include if you decide that they are your values. In his book that we're referring to? Ralph, does not suggest the master list step. But of course, he does talk about that in his papers. And of course, we do have a master list of – they're stated as financial goals, but I think it's a similar enough concept that our goals master list could be useful, at least as a reference.
The idea there is, once you've created your own list, you refer to a master list. That's an aggregation of all possible objectives that you could have for a decision and then add anything else that you feel is important. Again, I said this earlier, but your values over time, once you've settled on them, keeping in mind that this is a very effortful process, but your values should be relatively stable over time. So you've now got a list of values. Ralph then suggests scrutinizing them by drilling down with a series of asking why. That made me think of Cassie Holmes. Because you remember, Cassie has her five whys exercise. Ralph didn't specify a number of whys, but I figured we could lean on Cassie for that. But you take one of your values.
Say one of your values is being intellectually fulfilled. That's one of Ralph's values that he talks about in his book, and ask yourself why that's important to you. Then, following Cassie's five whys, repeat that five times if you can to better understand the value. Then going through the five whys for why that initially identified value is important, might help you identify more. Is it going to your list. So now, you got this big list of values. The next thing is to make sure that they're properly stated. This was also interesting. Ralph talks about this in his book, but Ayelet Fishbach also has it in her book, talking about how you state the goals and the way that they describe it. Ayelet and Ralph is very similar.
It's important that your values are stated as objectives. Ralph says that that clarifies their meaning and puts them into a consistent format. This is from Ayelet. To be effective, your values should be statements of a desirable state, not the means to get there and they should be abstract. Stated this way, empirically. They're powerful motivational tools that pull you in the direction that you want to go. Defining a goal or a value in terms of its desired state. Like, "I will have enriching experiences" instead of its means, like, "I will budget for a trip each year." Again, empirically has a powerful effect on motivation.
Abstract statements put the focus on the meaning of your actions, making the actions themselves seem less like a chore. Thinking about goals in the abstract, again, empirically makes people more likely to exercise self-control in their actions toward a goal. This is my input here, although it's not even really. It’s kind of Shaun Thompson's input. Shaun Thompson, our previous reading guest. He has his code where you're supposed to make 12 "I will" statements. But reading what Ralph and Ayelet wrote about how to state a goal, "I will" is a pretty good way to do it. That meets a lot of the criteria. I don't know, maybe it was just a bias they had from hearing Shawn talks about the idea of making up a code, but it's pretty compelling. To meet all of the things that Ralph and Ayelet are saying are a good way to state a goal or a value to put it in the format of "I will."
So then, finally, end up with a statement of "I wills." I'll talk about mine in a sec. So you end up with this list of "I wills" and then the last thing that Ralph suggests doing is reviewing this list carefully. Because there might be duplicates, there might be redundant objectives, or there might be things that on a second review, you just decide are not important. From experience in doing this type of exercise, Ralph suggests that you may well end up with 20 to 100 objectives at this point, which is too much to be useful or to be practical. The next step is to cluster them into groups with a similar focus. One example is that a cluster objective could be – I will minimize constraints on freedom of choice. Then, the underlying objectives would be related to health and financial well-being in time.
The next thing you want to do is identify means-ends relationships. So means objectives are important only for their implications for achieving strategic objectives. Only your strategic objectives should be used to evaluate alternatives in a decision to reduce complexity. So you end up with means objectives, which are important only for achieving your strategic objectives. Then you end up with strategic objectives, which guide your important life decisions. Landing on this set of strategic objectives, this is the exercise. That's the main objective. I don't want to exert influence on other people's strategic objectives. But it's hard not to see how something like the PERMA model is useful here, because the PERMA model is not perfect. By definition, it's a model, but it's a pretty good model. The point of the model is to explain differences in well-being. We know that the factors in the model, even though each person will have a different loading, plays different importance on the factors in the model. The five factors, they do a good job of explaining differences in well-being.
So ignoring that information, I don't think will be helpful. The PERMA model, I won't go into the details of it. But quickly, the PERMA model includes positive emotion, engagement, relationships, meaning and accomplishment. I guess the point is, it shouldn't be surprising if your strategic life objectives end up being similar to or related to the factors in that model. I did this exercise and thought about this before, maybe just not as well articulated. But I did write down what mine are. Ralph has his in his book, and reading that as an example made it a lot easier to think about, so I thought I would write what mine are. I feel kind of nervous.
Cameron Passmore: I was waiting for that. We're all waiting, all of us are waiting for this.
Ben Felix: So my strategic life objectives, I won't list all the sub-objectives, because I have the main objective and then there are subheadings. The first one is, I will enjoy my life. The second one is, I will pursue intellectual growth. The third one, I will maintain strong personal relationships. I will contribute to the lives of others and I will do hard things. Then I also have means objectives. So those are my strategic objectives, means objectives, like I need to do these things in order to be able to pursue the other ones. They aren't in and of themselves, things that I want. I will maintain my physical health, I will maintain a strong financial position and I will carefully allocate my time.
Cameron Passmore: Pretty solid.
Ben Felix: So now there's a filter. Anytime that I'm making an important decision. Again, I kind of already had this framework in my head. But now, I've got it written down. It's a pretty powerful first step in a financial planning process because there are so many big decisions that have to be made throughout the course of the financial planning process. But also, of course, of life itself and having something like this to refer back to makes any future decision easier. Well, it's exactly what the quote that you said earlier. Now, applying this and I'm not going to go through the application because that's what Ralph s going to talk about next week. But values are only one of the considerations in any major decision. The other ones are ensuring that you're considering all of the alternatives. Ralph says that this is a major deficiency that people have in decision-making. A big one is, they don't know what their values are.
We talked about life value just now, but you can have values for any smaller decision as well or any business decision. But for this, for the individual’s financial planning, decision-making, we care about those strategic life values. So issue one, people often don't know what their values are, which makes it hard to make good decisions and it makes it hard to make good decisions consistently. But then the other big ones are, people don't consider all of the alternatives. People don't generate decision opportunities. A lot of the time, people will make decisions reactively when a problem has arisen, or something has happened, and they're required to make a decision. But you can proactively make decisions as well to better your life, to better align your life with your strategic objectives.
Thinking about financial planning, there are many opportunities to do that, where you can make decisions without reacting to a problem in order to move your life toward the life that you want to have. Then, designing decision alternatives that satisfy other people that are party to the decision is another step. Ralph, we'll get into all of that in detail next week. But we've walked through a framework for thinking through what your values are. Using your values to make decisions is an involved process. Coming up with your values is a really involved process. But if you're deciding whether you should go home to have a snack or stop at McDonald's, you may not go through the full process of making an important decision, like what we just talked about.
But what you can do is have decision policies. So based on your values, you can have decision policies like, I don't eat out or I don't eat at McDonald's. That makes decisions like the one that I just made as an example, extremely easy. Or like I exercise every day, or I don't drink alcohol. I don't buy extended warranties. I don't get takeout coffee. Those are all simple decision rules, which again, the effect of those things can compound. That exercise of creating your values, it should be time-consuming and it should be difficult. That's the point. But the end result is you got a foundation for making future decisions. There's a huge portion of the work done for all future decisions. Because again, your value should be relatively stable over time. But you also end up with better quality decisions, and more consistently, better quality decisions. That's the foundation of basics for investing and financial decision-making.
Then, the intention throughout the rest of the year is to continue to build on that through all of the other aspects of personal financial planning. But now, we have this to come back to as a filter or framework when we're talking about those other future financial planning decisions.
Cameron Passmore: Love it. Great material. Shall we jump to the more concrete world of returns?
Ben Felix: Yeah, a bit of a shift.
Cameron Passmore: A bit of a shift.
Ben Felix: Yeah. I just wanted to quickly talk about 2022 returns. So we haven’t talked about that yet this year.
Cameron Passmore: No.
Ben Felix: I'll just rip through it.
Cameron Passmore: Rip away.
Ben Felix: But you're right. This is much less abstract than talking about forming strategic life objectives.
Cameron Passmore: Not more important. It's sobering to jump into this, but you're right.
Ben Felix: Kind of the opposite. So the MSCI USA IMI index, these are all in Canadian dollars, by the way. It was down 13.95% in Canadian dollars in 2022. USA IMI value was down 0.78% and USA small value was down 4.05%. Now, that doesn't mean all small value is down, I think that index in particular was. I'll talk about EVUV in a bit. The MSCI Canada IMI index was down 5.74%. But Canadian value is up 1.9% for the year, and Canadian small value was up 3.63%. Pretty meaningful.
Cameron Passmore: A lot of spreads going on here.
Ben Felix: Big premium there, and there's a lot, a lot of serious premiums. The EFI plus emerging markets was down 10.36%. EFI plus emerging markets value was down 2.39%.
Cameron Passmore: Big spread.
Ben Felix: It's another big one. I didn't have small value for EFI plus emerging markets and I didn't want to do the individual EFI. Anyway, big spread for value. Of course, the other big story. There are premiums like we're just talking about, but the other big story in 2022 was bonds as people likely know. Bonds were down a lot last year. Last year is a bad year for stocks, worse for bonds, which is not typical. FTSE Canada Universe Bond Index is down 11.69%. Bloomberg Global Aggregate Bond hedged to Canadian dollars was down 11.53%. There's worst ones though. You just wait. Those were indexes.
Now, I'm going to talk briefly about ETF mutual fund portfolios. So as a benchmark, just to prime people on how a market cap-weighted portfolio did. I'll use the Vanguard asset allocation ETFs as the benchmark. The Vanguard for 40/60 ETF asset allocation portfolio returned negative 11.79%, 60/40 was down 11.46%, 80/20 was down 11.2% and 100% equity was down 10.92%. Those are all the Vanguard asset allocation ETFs at the various asset allocations. The Vanguard Global Aggregate bond ETF was down 13.53%. That's the one I was telling you to wait for. Quite a bit worse than Canadian bonds. US bonds hedged to Canadian dollars were down 13.68%, and the Vanguard asset allocation ETFs, they hold Canadian Global and US bonds. That drags down those returns compared to the RR model portfolios, which are just Canadian bonds in their current iteration.
The RR model portfolios, which again are pretty similar to the Vanguard asset allocation ETFs, but they only have Canadian bonds, and they have tilts toward small-cap value. So they returned negative 10.56% at 40/60, negative 9.92% at 60/40, negative 9.34% at 80/20, and negative 8.8% at 100% equity. Quite a bit better than the Vanguard cap weights. Some of that was fixed income, but some of that was from the AVUV, having a positive 2%-ish return in Canadian dollars. That's US small-cap value from Avantis. AVDV, the international developed small-cap value was down 4.78% in Canadian dollars. But again, that's compared to much worse. I didn't have international developed on its own, but EFI plus EM was down 10.36% for the year. Then the DFA global portfolios, 40/60 was down 7.8%, 60/40 down 7.63%, 80/20 7.33% and 100% equity was down 6.69%. A big boost for the DFA portfolios over the RR model portfolios, came from the factor tilt in Canada. Remember, Canadian equities were down 5.74%. But value was up based on the MSCI Canadian value index 1.9% and Canadian small value was up 3.63%.
Because DFA tilts toward small-cap value and value in Canada, but the RR model portfolio is just cap-weighted because there are not multi-factor ETFs. For Canadian equities, that's a big driver of the performance difference. But then also, the DFA global fixed income portfolio, it was down 9.8%, which is better than Canadian Bond Index Fund. I put all of those numbers. Most of those numbers into a table, that when if you're watching on YouTube, the table will be populated with the values to make it easier to compare them. But the main story is that small-cap value and value did a lot better than the market last year, across all regions. The tilts were very helpful.
Cameron Passmore: That's why you have to stay in your seat. You just don't know when premiums will show up.
Ben Felix: I'm very curious to see. I mean, obviously, I'm always curious to see what happens in the future. I think everybody is. But we used to talk about the one instance. I don't remember the exact dates, but there's one month that you can move forward in time in the 2000 area where the value premium flipped over the course of – what was it? A year? Maybe not a month.
Cameron Passmore: Every time periods like 1, 3, 5 10, I think even 20. Everything flips.
Ben Felix: But does it flip over a year step or a month step. I can't remember.
Cameron Passmore: The step is short.
Ben Felix: So the short step where value – it's like 1, 3, 5, 10, 20-year periods, value premium flips from being negative to positive over this very short time step. So it's three years now, where value-tilted portfolios outperformed, but it'll be very interesting to see over the coming months how that evolves.
Cameron Passmore: Excellent. All right. Keep moving. Let's do one episode in 60 seconds. Start the clock. This one's about Episode 19. You remember it well, Ben. It was with Shane Parrish early on in the podcast. So yes, this is the Shane Parrish with a very popular podcast, the knowledge project. Ben, you flew solo on this one because we were so new. We don't even know what equipment to bring. Shane is all about, for those who know him, it's all about thinking in models and models are how we understand the world, make decisions that predict the future.
So Shane discussed biases that we hold, which are important for investors to be aware of, such as overconfidence bias and bias for action. Most investors want a better return, thus feel, I need to do something. And when they're actually doing trading, you are doing something and you're probably confident, but not necessarily right, so Shane suggests to be aware. He also talks about Charlie Munger, no surprise, and one of Charlie's mantras is to avoid being stupid. So Ben, you asked him also about crypto and cannabis, both of which were super hot back in 2018. The punchline is, Shane doesn't know much about them. I felt you should only invest in what you do know, his view on risk and uncertainty is that with risk, you know all the possible outcomes, much like a roulette wheel is the illustration to use. With uncertainty, you do not. So you'll hear his take on market efficiency, private equity, index funds and why it's okay to hold cash.
Ben Felix: I do remember that. I can't believe that was Episode 19.
Cameron Passmore: Episode 19.
Ben Felix: I can't believe that he agreed to come on our podcast on Episode 19.
Cameron Passmore: I remember being blown away, because I am and was a regular listener, and I didn't know he was from Ottawa. Who knew his office was like a kilometre away from our office? I had no idea.
Ben Felix: I've met him at a networking type thing.
Cameron Passmore: So you knew that.
Ben Felix: He was a super unassuming guy and I once chatted to him and I asked what he did and he said, "Oh, I've got a blog. I just thought, "Oh, that's neat." Then later found out who he was, what blog it was. It's like, "Okay. We've got a blog. All right." It wasn't that we were so new to doing podcasts that I did it, it was because Shane had said, "Don't worry about bringing equipment, we can use mine." But he didn't realize that there were two of us.
Cameron Passmore: The fact that we were new. Now, we know. You cover all the bases, you have double backups. Now, we go if we were to do it. When we went to New York, we had double recording machines. I think we had an extra mic just in case. That's what I meant by new.
Ben Felix: Yeah, that's true.
Cameron Passmore: So before we get to this week's book review, which I'm super excited about, we wanted to introduce everyone to the tech platform that we're actually using as part of the 23 in 23 Reading Challenge, same one as last year. So we wanted a mechanism to enable people to track their reading, track their books, and also share ideas with each other. Also, enable awards. It can be used on the merchandise store. With a lot of people last year as a climb to the ranks in the reading challenge redeemed for pretty significant discounts in the store. So after hunting around – this is a year ago. We came across this app called Beanstack from a company called Zoobean. So I thought, you know, this year, why don’t we reach out to Zoobean and talk to someone. So we actually had a chance to talk with Felix Lloyd, who is a co-founder of Zoobean. Let's go to that conversation.
***
Felix Lloyd, welcome to the Rational Reminder Podcast.
Thanks for having me.
It's so great to have you. Your platform, Beanstack has been the backbone of our challenge now, entering the second year and it's a great platform.
Thank you.
So to kick it off, what is Beanstack?
Beanstack is what I often will call it, a Fitbit for reading, though the hardware component doesn't necessarily fit. It's a tool that motivates people to read, to gamification and reading challenges, specifically. Think of us as an app in the business of motivating people to read.
What motivated you to create the company?
It's been a winding path, honestly. We were initially parents of a two-year-old with a newborn on the way. We're an interracial, interfaith family. We were scouring the world for Big Brother books. My son was two years old, my daughter was on her way. We got lucky eventually, and someone sent us a book that was not about being a big brother, but it had a big brother and little sister in it. The family in the book was interracial. The book had nothing to do with that. The family just was that. It wasn't commentary. Could have been any other race or ethnicity. It just happened to be.
But my son at that age, very young age pointed to the pictures in a book and said, "Mommy, daddy, me." So we were like, "Wow, this is amazing. We should create a company that lets people find books by different types of tags, and what you typically will find." So instead of a big brother book, you'd be able to say big brother featuring interracial family, if such a thing is out there. There are lots of beautiful books out there that cover many bases that are hard to find. That was the initial idea. That landed us on Shark Tank. We had success on that show, we got an investment from Mark Cuban, so we had success in that way.
But the other side of the story is that, when the episode actually aired, we didn't have great success getting subscriptions to what was in a consumer product, we were going to curate books for families. That led us down the path of what we have since become – we left the initial business model of serving consumers as a curator book service. We paid attention to where we were getting the most attention, which was public libraries. We went to the ALA, and American Library Association Conference, and got one customer out of that. Sacramento Public Library in California. What we told them is, "Look, instead of sending people books, a curator for them, you've got all the books in the library. Why don't we just tell them how to find the books in your library to help you get more people in the library." That was the next idea. That was working a bit.
Then, we saw that they got really busy during the summer by doing summer reading challenges. So you may have experienced something like this in the past, but kids come in, mostly kids and they mark off how many books they've read, what books they've read, what you're doing with Rational Reminder in the 23 in 23 challenge. We went further down that path and that has become increasingly what we do best. To motivate people to read through the use of the reading challenges, and gamification principles like badging, friends, streaks, the things that you're using our platform for, for which we're grateful. Thank you.
How do people typically interact with the actual app?
It’s in a variety of ways. That's the cool thing to see. The majority of our customers are public libraries, and school districts. They are typically creating different reading challenges very similar to you. So you think of it as two sides. We've got our primary customers buying from us. They're using it to spin up this content, these reading challenges, and to get better data on who's reading what, and what they're reading, what branch you read the most, what classroom, what grade level, what students. Then the end-user side of it, they're using it to stay motivated to read or to achieve some reading goal. What I'll often say is, especially at this time of year, the new year, if you look on any new year's resolution list, not any but most, somewhere in the top five, certainly the top 10 is to read more or to learn more. It's in many ways, like you kick off the challenge at the start of the year. That's what the end users fundamentally using our service for, is to achieve this goal of reading more or learning more, and the customers using it to motivate that and to get better data around it.
So I find lots of benefits from using it. I find it really fun to see reviews from my friends, like there's a friend option. Ben and I each have a couple hundred friends in there. So that's one of the benefits. It's also cool for users, we give out awards, which can often be a discount to us in our merchandise store. So that's all built into this app as well, the gamification of it. Are there other tools or benefits that you can see that we might be missing out on?
I think that thematically, competition and collaboration are things we're seeing that work in general. So when we group certain features around competition, collaboration, they're things like streaks, where there are someone competing against their better selves. Those are actually some of the most successful, just somebody trying to read as long as they possibly can. They don't want to miss a day, even though they could cheat it because they know within themselves that they want to keep the streak going. So you have that. I think we're probably doing a good job of that. But something that we know was in a school setting if you recognize the folks that have the most streaks, or a particularly long streak would challenge people to get to seven days. Which we see is a major point where if you're getting in seven days, you can probably get into 57 days. You can get them to that point.
I think, perhaps, should be focused in on that area. I don't know that you are or not. We also see collaborative goals that are very successful and at time bound, so community goals. So a school, library, trying to read X number of minutes, 15 million minutes, Atlanta public schools, by the end of the year. For example, that's a competition together. It's against time, and maybe it helps if it has a story behind it, like we're going to do it for a local non-profit or to beat a school district nearby. We have Read around Houston, where different school districts from Houston are competing against each other. It's a healthy competition, just collaborative. I think those type of features are probably not ones you turned on yet, at least in your focus. Could be useful as principles of competition, that drive healthy behaviour.
So what we have is the seven-day and 30-day count that you can see your friends. I'd love to see a year-to-date one. You get to know the names, are often at the top. So I'll often go and see what books they're reading, which is super fun and useful for me. And to see their feedback and their reviews. But to have it year-to-date would be really cool. If you're looking for some feature feedback, I'd love to see that one.
Noted. We do look forward and we appreciate it.
For what you've seen, what kind of impact does the platform have on its users?
The primary metric that we pay attention to. So we're fortunate because we've got two different user groups that are primary users that really hold us accountable. We've got public libraries and public schools, as the majority of our customers. Private schools, we have corporations and companies like yourselves, but the majority of the users are public libraries or public schools. They're two different metrics that they want us to move for us to add unique value. In the public school setting, the most important one is reading frequency. There are all types of data around. If you can get somebody to read 20 minutes per day, it moves the needle better than anything. If you want somebody to read better, get them to read more and get them to enjoy doing it. The metric that we're looking to move is reading frequency, how many minutes per day they read, how many days per week they read, how many days per year.
In the public library setting, it's actually a little different. Of course, they care about reading, but they care about people coming to the branch and coming in and using their services. In that setting, we're trying to drive circulation. Circulation could be physically coming into the building. It could be using a database from home. But we're fundamentally, whether we use a label or not, we’re a marketing tool for a public library. But in a school setting, we're academic outcomes too. Same function, reading gamification, slightly different in by which we're measured.
How important is that gamification, especially with kids, versus the impact of social media and other things after the retention?
I think it's the key. Our sweet spot is grades three, four and five. Our bell curve is going to be right around the grade four, five. That's we're going to see the most use and their parents. So 30-year-old mothers, fathers, but especially mothers, 30 to 40. That's the sweet spot. So when you keep that in mind, for the kids, social media is not yet a big variable, hopefully in their world. But they're familiar with some of the same principles of driving happiness. Gamification, we've come to appreciate that word and that principle is what we do that's different. There are a number of tools, especially in the space of education, that are in reading, a curriculum reading, assessment reading, but they are increasingly focused on quizzing and behaviours that are not necessarily fun. So they're not just for reading's sake, because the school doesn't necessarily play in that space as much as they might. So for us, gamification gives us the opportunity to speak to an audience that naturally is moved by that, especially post-pandemic. And to make a difference in a way that is clearly important. But somehow, a lot of folks aren't focused on just reading for the sake of reading. That's where we come in.
How important is reading to you and your family?
I got to tell you, I was not. Instead, I'm not as much of a reader as I would like to be. The reason I think that I was not a great reader is I'm a black man from Washington, DC. And now, there are these wonderful books that speak to kids of all ethnicities, backgrounds, ages, circumstances, but I don't recall there being as many in the 1980s and '90s when I was growing up. So I never quite found that book that I fell in love with. So I read only for school and I was a good student, but it was a means to an end and not something that I fell in love with. I saw the movie Dead Poets Society with my dad, and I fell in love with that movie. Even though it has nothing to my world, I fell in love with it and I wanted to be a filmmaker. That's what I studied in school.
I think because I have this origin reading has not been as central to my life as you might expect for someone who's starting a reading company, but I appreciate the need to be motivated. I am competitive and I do rely on friends that are like me to know what to read. That's where it fits in my life. As a dad, reading is everything. My kids, they read, read, read. How could they not, being in the company they're in? I think we embrace that, especially now, my son is 13 years old, and he's reaching that age where his phone, if we don't pay attention, is that where all the time. The more we can get a book in front of them, the better.
Great answer. Felix, great to meet you. Congratulations on your company. We're super happy to have you as part of our 23 in 23 challenge.
Thanks for having me. I'm happy to have you let us contribute to the work you do.
Thanks, Felix.
***
Cameron Passmore: Well, that was a pretty cool conversation, Ben. So great to have him on. Super nice guy. Let's turn to the book review. I'm actually pretty excited about this, and the more I thought about it, the more it actually fits into decision-making. The book is, Using Behavioral Science in Marketing: Drive Customer Action and Loyalty by Prompting Instinctive Responses. The book is written by Nancy Harhut. I came across it. Someone posted it on LinkedIn. I thought it was interesting, and I'm getting interested in marketing. I was looking for a book that covered up the science behind this. Marketing might seem out of place. However, we discussed things that are out of place in the past like working remote, deep work, so maybe it fits right in with these random themes that we dig into. I've not read a lot of detailed books in marketing before. I've read marketing books, but this one was probably the most detailed one I read. I decided to share it for a bunch of reasons.
Number one, we have a lot of listeners in business that might find it interesting. Then, as you mentioned in your part, the next few weeks, we have people coming on to talk about decision-making. You spoke about how important values are in making decisions. As the title of this book says, "Marketing is about driving customer action." Action is making a choice, making a decision. The reality is, marketing affects all of us whether we know it or not, so I learned a lot about marketing. I thought the perspectives that I wanted to take is both as a seller, so some in marketing. But also as buyers to be aware of these techniques and reasons why some marketing is done the way it is done.
How people make decisions, I find obviously totally fascinating. It's the whole point of this podcast. Take for example in our field of work, how do people decide if they work with an advisor? Then once they decide if they want to find an advisor, then which advisor do they choose? Do you ask friends? Do you visit websites? Different generations have different habits. How people now decide who to work with often involves coming to a website. I was looking into websites. I'm very curious about this now, but I wanted to find a science-based approach. I am not a marketing expert. I cannot say this is a great marketing book. I can say I thoroughly enjoyed it. I think I learned a ton. But I happily welcome any feedback from any marketing professionals that might be listening. I'm not promoting this as a great marketing book, it may be. I learned a lot. I did enjoy it. All right, so let's jump into it.
People do not make decisions so much as they default to them. Science has proven that humans have hardwired responses, automatic, instinctive, reflexive reactions to choices around them. And because of the way the human brain works, and markers message needs to be both rational and emotional. The quote they refer to very early in this book, which I thought was interesting is “The essential difference between emotion and reason, is that emotion leads to action, while reason seek conclusions." Therefore, when you're marketing, you need to remember that emotional responses drive the buying behaviours. So we need to focus on what the potential customer wants to hear, if you're the marketer. Not necessarily in what as a marketer you want to say. What sells? I remember to think of this as both a marketer, to a seller, as well as the buyer.
It's also interesting, just to add in. In preparing for a Daniel Pink interview, I'm reading his book To Sell Is Human, in which he argues quite well that the majority of us we're working today are actually in a selling/influencing type of job.
Ben Felix: I think that's absolutely true, in anything.
Cameron Passmore: I'm only about a third of the way through the book. The book says that one in nine people are formerly in sales positions. But up to eight out of nine are in a position where you're influencing. If you're influencing, you're selling.
Ben Felix: Hundred percent. I can't remember who's explicitly taught or not. But I remember when I was finishing my engineering undergraduate degree, there was a discussion about this, that there's still a component of selling even for engineers.
Cameron Passmore: So let's go through what sells from a behavioural science standpoint. Number one, benefits sell, features tell. Next one, loss aversion sells twice as much as the pleasure of a gain. So watch that in the marketing. Fear is a hardwired emotion. Even if you're aware of loss aversion, you will likely automatically respond to fear. People want what they cannot have, things that are scarce are perceived to be more valuable and desirable. Therefore, look for triggers in the marketing that do this. Cialdini, a king of the principles of persuasion. That's called Cialdini Principle 101. Humans are hardwired to return favours. Free offers create a feeling of reciprocity, free downloads, free sessions. Again, we're hardwired for this, so watch for these free things on your website, because that could cause people to reciprocate back to you. But it goes both ways, so be aware of it.
There are safety numbers. We feel safer in making a decision when others have made that decision. So when you see others or read that many others have made a decision that you're considering, you feel safer. This is why you see references in websites, referrals, references on websites, famous people that may have used that product. When people are not sure what to do, they'd rather feel confident than special. Social proof can create the feeling of confidence. Social proof helps reassure customers and making a good decision. Social proof also helps cue people about how they should behave. Social proof comes from seeing someone famous, an influencer that uses that product, rather feel confident and special. Okay. That's pretty interesting.
Behavioural scientists have shown that people better understand or remember information when it's delivered in a story. Stories help make sense of the world. This means that a properly constructed story can be an ideal vehicle for a marketer. Now, what's super cool to me about stories. Some neuroscientist, Uri Hasson who says, "A story is the only way to activate parts in the brain so that a listener turns this story into their own idea and experience. When it becomes their story, they feel more in control, which is the bias for autonomy." This one, you and I have talked about a lot lately. People have a single-choice aversion. Multiple offers can impact. Choosing this or that from a company versus whether to work with that company or not. This drives people to making a decision and people want feeling of taking action.
It's easier to decide or rather than if. Customization: when someone can build a product, their version of the product, you trigger what's called the endowment effect. They gain ownership and control, for example. When you go on the car website and have a build-your-car. Also, when you created your car, you create the endowment effect. Cialdini again, "People like commitment to decisions as it conserves mental energy." Once we have made up our minds about an issue, stubborn consistency allows us a very appealing luxury. We really don't have to think hard about the issues anymore. For example, if a customer commits to a small part of your offering, they will likely continue to climb the value ladder and not back out.
For example, once you build your car, you're likely to continue adding features. So just be aware of this. If there's a gap in people's information, they will take action to close it. People are motivated to satisfy their curiosity because it's rewarding. It goes back to one of your values, Ben. You want to learn. When people are about to discover something new, their brain releases dopamine, which produces a pleasant feeling. Humans are hardwired to seek information, help people learn and feel their curiosity. Behavioural scientists have proven that humans have a powerful need to respond with authority. How cool is that?
Ben Felix: A lot of the stuff that you're saying comes up in Eric Johnson's research and our conversation with him in a couple of weeks.
Cameron Passmore: Authority figures like awards, experts, media profile, endorsements. They say, even the attire of the person marketing. All of this contributes to the feeling of authority. Always remember that people prefer the status quo, to exerting the energy to act. Labelling a group can motivate behaviour as well. This goes back to Jay Van Bavel. Labels can change how people view themselves and how they subsequently behave. Next one, marketers are prompting people to take action. Why? Because behavioural science shows that when you give someone a reason to do something, they're more likely to do it. Calls to action. So when you see these calls to action on websites, that's why.
This one's cool. You and I talked about this last night. Rhyming phrases are more memorable and believable. Rhyming phrases are more cognitively fluent, which means they're easier for the brain to process. Things that are easier for the brain to process feel right. As a result, people assume they are. The human brain is also hardwired to predict what will happen next. So when your target doesn't see what they're expecting to, whether it's a word or an image, there'll be surprised. Surprised, focuses attention, intensifies emotion, both of which make that person likely to remember that event better. That was cool, which we talked about many times at many different guests. Our temporal landmarks, transition periods of someone's life. At these points, people feel like they've been granted a fresh start, for example, and they can leave behind all their shortcomings. When targets hit these temporal landmarks, they're often more open to new things. So again, beware of that.
Love the book, learned a lot and it does tie in with so many things we're talking about. This book is also the perfect example of a book with tons of takeaways, just the way it's structured. I gave this feedback to the author on LinkedIn. It's so well done. There are summaries at the end of each chapter. As people know, I read on Kindle, so I take notes just by dragging my finger over it. I've also talked about the Readwise app that I use, it pulls the notes from the Amazon platform and puts them over to my Evernote, which allows me to clean up the notes to use in this format on these podcasts.
So we invited Daniel Doyon, who was the co-founder of Readwise to join us, to tell us more about this tool. Really interesting guy, interesting product. So let's go to our conversation with Daniel.
***
Dan Doyle, welcome to the Rational Reminder Podcast.
Thanks for having me. Glad to be here.
Excellent. So I've been raving about your tool for some time, Readwise. It's so cool to welcome you to share the benefits of what you guys have created with our audience. So off the top, what is Readwise?
Believe it or not, I've been working on Readwise for five years, and that's still a hard question for me to answer. I've never gotten good at the elevator pitch. But what Readwise started out as a tool for elite nonfiction readers to get more out of what they read. The way we do that is by focusing on digital reading, namely Kindle or other eBook platforms like Google Play, or Apple Books, or Kobo. And also non-book reading platforms like Instapaper and Pocket. One of the cool things about reading digitally, is you can take highlights while you read them. Those annotations can be very, very valuable if you go back and look at them. Back in 2017, we realized that a lot of people were taking these highlights but then never doing anything with them.
So what Readwise did is it made it easy to go back and review those highlights. That's what we initially started out as. It's grown a lot since then. We make it easy now to get those highlights into various note-taking applications such as Evernote, or Notion or Obsidian. If you've ever heard of any of those. Now, we've just evolved into a full-fledged reading application, an all-in-one reading application that can get all your articles, your newsletters, your RSS feeds, your PDFs, your ePubs, even Twitter threads and YouTube videos into one place. Where you can highlight them, and read them on your computer, on your phone and then get all the benefits of Readwise. It's changed a lot over time.
Why did you guys started the company?
Actually, was one of these accidental stories. I worked for over 10 plus years in private equity on Wall Street finance, had an early midlife crisis, quit my job, sold all my things. My girlfriend at the time was at Goldman Sachs. She's now my wife, we didn't break up. She did the same thing. We travelled the world for a year. You can't really lug around a lot of books when you're backpacking, so that's when I became a big power user of Kindle. I was reading at a rapid clip, maybe two books a week, like hardcore style books, taking a lot of highlights. About halfway into that trip, I became frustrated that if you asked me the key takeaways of a book I'd read a month ago, I couldn't even tell you though. Sometimes I couldn't even remember the title of the book. Then I was like, "There has to be a better way."
That pain hit me at the very moment that I was learning this complex flashcard software called Anki. Maybe one time, your listeners may have heard of it. I had the idea of, what would happen if I took these Kindle highlights that I can go online and find, throw them into this flashcard app and then review them. I tried that on myself. There was no commercial interest here. It was just like a hobby. I found it to just have these amazing benefits. I can get into those if you're interested. But after that, I would then tell my friends about it and they’d be like, "Oh, I always forget what I read." I just spent 10 hours reading this book. I want that. Then, I met my co-founder, Tristan, he was also interested in the space of reading technology. That's what we call our space. We came together to turn it into a much more simpler productized version. It just has snowballed ever since and grown beyond the interest. And now, to a team of 14 people and lots of users.
So let's jump into those flashcard benefits because that is something that I discovered after I got the app. I was looking for a place to take my notes from my Kindle and make them usable, so it goes to my Evernote and I use those notes all the time, and clean it up and share it with team members and stuff. But the flashcard benefit is very cool. I use it regularly. Then, you guys also suggest other quotes from other books that somehow you think I might like. Can you talk about that whole benefit?
Even though I first started doing this in a flashcard application, I definitely want to disavow the notion that Readwise is flashcards. It was inspired by flashcards, but it's something that's qualitatively different. We call it the daily review. At it's simplest, it's an email that contains an assortment typically. Typically, three to 10 highlights from things that you previously read. It's more complex. There's a whole web app where you can go, and then you can add notes to your highlights, or add tags to them and interact with them a little bit more. The benefit is, you read the book. I'm sure you've heard these quotes about like, "Oh, that book could have been a blog post, or that blog post could have been a tweet." That's true, but that's missing the point of reading a book.
The point of reading a book is to like interact with these ideas over a long period of time. See it from different angles, connect it to your own life experience. When I'm talking about reading here, I'm talking about reading nonfiction, or what we call reading for betterment. Set aside the notion of reading for fiction or reading for entertainment. It's seeing these ideas repeatedly over time, and then eventually, a transformation happens in your mind where it starts to connect. So Readwise just takes that process of picking up a book every night for 20 days and just extends it indefinitely. It's not about memorization, but it gives you an opportunity to integrate those concepts. Or if you're reading something more practical to take action on that, like a lot of self-help. You read it, you're nodding your head like, "Oh, this is going to change my life." You put the book down and you forget to do anything. Well, this helps close that feedback loop because you took a highlight on something that resonated with you. You see it again, and now maybe, you're in position to do something about it.
I don't use Readwise. I may as well start, because I do highlight books and then forget about exactly the problem you described at the beginning. But I just want to say, before Cameron keeps peppering me with questions here, that that is exactly how I retain knowledge when I've historically studied for like the CFA exam, which you would obviously be familiar with from being on Wall Street. I studied, kind of like that, using practice quizzes, but randomly generated for sections that I would have read a couple of weeks prior. In terms of retention, totally agree. That's phenomenal. So now, I'm very interested in Readwise.
Exactly.
Do you have any suggestions, Dan? Because I have all these notes on the books that are in my Evernote. I've cleaned them all up, I've got them focused. While I use your daily reviewer tool, give recommendations on how to organize that stack of notes from different books.
One feature that's really nice if you have a lot of content is you can tune the algorithm that decides what gets surfaced to you because your interests change over time. What I was reading about 10 years ago, is very different than what I'm reading about now. So there is the ability to go in and influence the algorithm, you can bias it towards newer readings. That's what I do. But some people actually prefer to do the opposite and bias it towards older reading. So that's one thing you can do, and then you can also do it on the book level. Right now, I'm very focused on scaling Readwise as a company. I'm much more focused on leadership and product management. Whereas, five years ago, I was maybe more interested in the theory of reading, and the theory of learning and space repetition. That's one way to manage the overload. There's just too much stuff, so you might as well triage and focus on the things that are really salient to you right now, in terms of what to do in the note-taking apps like Evernote.
I find that the people who get the most value out of that workflow are people who are writing and converting it into some actual output. You can tag or you can basically start to group highlights that are in service of something you're trying to write, whether it's an internal memo, or an external newsletter, or something even grander than that, like a dissertation or a book.
Very cool. Do you have any recommendations for people who want to read more?
This seems like common sense to me now. But when I first realized that it wasn't. But you don't have to finish everything that you start reading. I'm sure you probably give that advice a lot. If it's just not holding your attention. Don't try and force your way through it. I think I started with that mentality is a byproduct of school, where you didn't have a choice. But when you're reading out of your own intrinsic motivation, just find things that resonate. That's the best way to read more, is to find the right book at the right time. I'm sure you've had the experience of picking up a book that you couldn't put down. The way you read more is by sequencing those experiences back, to back, to back.
I found myself. I become more motivated as I review those notes and connect more dots. It's almost like, once you start accumulating your own curation of ideas. I became more motivated to read more.
Yeah. Curiosity is anti-fragile. It grows and compounds.
Dan, great to have you. Thanks so much. Congratulations on your tool, Readwise.
Thank you. Yeah, I appreciate being here. Thanks for having me.
Thanks, Dan.
***
Cameron Passmore: One of the cool things about Daniel that we talked about after we stopped recording, whether there's technology coming up will allow you in real-time to highlight the transcripts of a podcast while you watch on YouTube.
Ben Felix: I thought he said it was there.
Cameron Passmore: Oh, is it there?
Ben Felix: He asked if this will be released on YouTube because that's where he likes to consume podcasts now because you can watch it through their Readwise app and it shows you the transcript as you're watching the video and you can highlight the transcript. Then you can have that highlighted resurfaced to you later just like with the rest of the Readwise stuff.
Cameron Passmore: That is so cool.
Ben Felix: It's pretty cool.
Cameron Passmore: What is coming to learn, it's really cool. Love the app. You might become a user now. So great to have him on.
Ben Felix: The only thing that I was thinking about is that, yes, I want to use it, but my phone is so old that I can't download most apps.
Cameron Passmore: I upgraded to the 14, because my battery was dying on my old X. Wow, these new phones, they were always unreal. This is just an unreal tool. Unreal.
Ben Felix: I'm on an iPhone 6 at the moment.
Cameron Passmore: So I get the big screen too, which I just love. The camera is crazy, how good the camera is. But it's so fast and the battery lasts. I love it. It's very cool. Thought it highlights content lately that it came across. We haven't done this in a while. Maid of on Netflix, you got to watch it. Have you seen it yet?
Ben Felix: I've watched a few episodes. My wife's not that interested in it at all. But sometimes she goes to bed earlier than I do. So I've watched maybe two episodes. It's definitely good, but I've listened a lot of podcasts that tell the main off story. So so far, none of it's been no, it is very good storytelling though.
Cameron Passmore: I also want to highlight a private equity episode on Freakonomics that came out on the 19th when we're recording this. So this morning I listened to it, which has really interesting insights into private equity. Especially, to talk about that services business worldwide and who owns a lot of private equity was really interesting. The family behind Mars and stuff. They didn't name them, but they referred to our past guest, Ludovic Phalippou. I dropped him a note on LinkedIn this morning, seeing if he's going to be on the next episode, and I presume not. But interesting episode.
I also want to highlight our friend, Morgan Housel was on 10% Happier last week with Dan Harris. Phenomenal interview. Morgan's greatest hits and Dan Harris is a really good interviewer, so I thought that was great. Another one which I thought was interesting for all kinds of different reasons. Our friend and past guest, Ted Seides interviewed Anthony Scaramucci on his podcast Capital Allocators last week. Pretty frank discussion about deal-making, humility. Scaramucci was in the White House for 11 days or something. Talked about crypto, SBF, FTX. He actually sold a big chunk of his company to FTX and Sam Bankman-Fried, and now he's buying it back out of bankruptcy. So it gets to the details there and the story behind why he chose to sell part of this company and what he saw in what Bankman-Fried was creating with a new modern trading platform. He was convinced that it had a chance of being profound. So it's an interesting conversation. In the community, Ben.
Ben Felix: It's good that we're talking about this now, because people are still listening must be very dedicated. We're looking for new moderators. In the community, we have a very solid moderation team now, but the community has continued to grow, the amount of content and activity is continuing to grow at a pretty rapid rate. So we're looking for probably one new moderator. Angelica did post about that in the community. So if you're in there, you would have already seen it. If you haven't logged in a while, there should be a banner. If not, look for the post, but it's a form to fill out to apply. You do have to disclose your actual identity to somebody from PWL, probably to Angelica. But you can remain anonymous in the community, just PWL has to know who you are if you're going to be a moderator.
The role consists of keeping discussions clean and organized, approving new accounts, because we make people apply to be new users. There's like a whole IP address checking process that one of the moderators has created to reduce, not bots, but malicious users. Occasionally, to moderate, to keep users in line. That's the thing that we're asking for. We're also going to be rolling out in the community, the ability to support the community financially, not because we need that, but people have expressed a desire to do it. So probably, by the time this episode comes out, if not soon after, there'll be a button in the navigation menu that says, "Support the community." There's going to be options for various levels of support, like you could do $3 a month or whatever if you wanted to.
The community is not becoming paywalled. There's going to be no access to special information if you're supporting. It's just, if people want to give back because people have expressed a desire to do so. Now, PWL as a business is okay with the fact that people want to support the community. Again, this is coming from users saying, "How do I give you money to support this ecosystem that I'm getting so much from?" But PWL as a business welcomes it, because honestly, the community turned into something more than we ever expected it to. Because of the amount of activity in there, we're hosted on Discourse, which is the platform that everybody interacts on in there. It's the form of software that we use, and run a hosted plan with discourse. The alternative is you can self-host. We don't have the IT infrastructure to do that. The hosted plan on discourse starts out pretty inexpensive, which was fine when we had a small community.
But we're currently at over 600,000 monthly page-views. The costs of hosting increase, I would say exponentially. Our current plan gives us up to a million monthly page-views. But again, we're already over 600,000. The next plan doesn't have a listed price. We'll see what happens there. But anyway, the fact that people have a desire to support is welcome, because this thing is not exactly free to keep running. Another thing that we're going to be rolling out in the community – well, not just in the community, but on the internet is a learning product that we've been working on developing that I'm personally pretty excited about. Kind of like the Readwise idea that we heard about earlier. We've developed quizzes for episodes. We've talked about this on the podcast before. Some people have tested out sample quizzes that we made.
When we built quizzes going back to Episode 216, so far. We may go back further, but we're also going forward as new episodes come out. The idea is, you can go and do the quiz after an episode to help reaffirm your knowledge. But then, you can also go back and redo a quiz from the past episode to try and remember some of the things that you may have learned. So we're going to roll that out not for free because there's a lot that goes into it. Frankly, we'll roll that out as a product in the next probably few weeks or maybe the next month. That will be a paid subscription to access. Then related to that, we're also working on again, this is something we've talked about in the past, but it's getting closer to actually happening is continuing education credits for people who are – currently, the ones we're looking at are iRock. If you're registered there, you know what it means. And FP Canada, when we did our survey about this a while ago, those were by far the most requested CE credits, continuing education credits. So that's happening.
We're starting to get quizzes that we've made accredited as continuing education activities. We'll probably wait until we have 10 or 15 of those done, and accredited, and on the software platform and then we'll roll that product out. But I think, continuing education credits is going to be great. I will use it personally because I also need continuing education credits. Then –
Cameron Passmore: We have to do our own exams to get our credits.
Ben Felix: Well, you do.
Cameron Passmore: I know.
Ben Felix: You do. It's crazy. I gave a talk that was approved for continuing education credits, but I don't get a credit for the talk, I had to do the quiz.
Cameron Passmore: And you may have put 10 hours into it.
Ben Felix: It's the same thing doing a podcast episode. I think those are both going to be really interesting products. I have no idea what the uptake is going to be like. We'll see once we launch them.
Cameron Passmore: Awesome. Upcoming guests next week as we mentioned, Ralph Keeney is up. After that, Professor Eric Johnson, author of the book, Elements of Choice. Eric Alini is joining us a couple of weeks after that, with The Globe and Mail, which would be great. I think we mentioned before, Charlie Ellis is coming up after that, which was a phenomenal conversation.
Recent reviews. Guy Giddy from the USA said, "Brilliant." How nice is that, Ben? "This is a great and thought-provoking podcasts and topic is critical to living a productive, stable and happy life." Phenomenal hosts who asked great questions. Ben, your intelligence is shocking.
Ben Felix: I don't know about that.
Cameron Passmore: "Explains topics in such a clear and concise way. That one wonders why he doesn't have a Ph.D. in economics and finance. He's a phenomenal professor, educator. Appreciate all the great guests. Most importantly, it's great that the guests that are invited to discuss your topics, and we as listeners can then decide whether or not we agree with said information. All in all, it's a great podcast. If there was a Nobel for podcasting, this would get it." Very kind. Cheers to us and to the whole team.
Ben Felix: It's funny people have such different preferences because we've had criticism in the past for the exact thing that this person is commending that we don't take a position on things that our guests say. So the listener is left to make up their own mind.
Cameron Passmore: That's right.
Ben Felix: Paul Robert 003 from the USA says that, "The podcast is excellent. You two and your team. Definitely big shout-out to the team. Produce such a thoughtful and interesting podcast, paces perfect guests and questions are perfect. Prof. Martin was incredible. Your insights are immensely valuable. Always worth sticking around for the ending bits. Thank you for all your work and diligence." That was actually an updated review from somebody who had previously written a review saying that they were new to the podcast and just getting to know it. They've now been listening for a while.
Cameron Passmore: CJMDM from Australia said, "It's well-researched. I love that they cite academic papers. Because when I hear something I find interesting, I have a source for additional reading." Also, there are some nice reach outs on LinkedIn from Andrew from Edmonton said, "Hey, Cameron, I want to give you both, Ben as well as all production team a huge shout out for the incredible work you're doing. I never invested at all before 2021. Since I thought investing was gambling. However, what I thought was investing was just speculation. Things that seem too good to be true are. Nothing can beat a good savings goal and staying inside your risk tolerance. I'm finally realizing that simply putting money into a savings account is not going to be enough to retire. Even at 20 years. You're giving people the tools needed to ensure they can have a good retirement. Keep up the incredible work."
I also heard from Jared from Washington and LinkedIn, loves the podcast and thanks us for keeping it up. In the store where you can leave a note with your order, Jeremy said that he loves a podcast and "You guys are the Canadian finance goat." So I love hearing from people on LinkedIn, so reach out anytime. RR is on Instagram. I'm on Instagram as well. Rarely post, but I'm there. Both of us are pretty active on Twitter. Do you like the new setup on Twitter, Ben, that curated for you or your followers? Have you noticed?
Ben Felix: I'm not active on Twitter.
Cameron Passmore: There's a new thing there.
Ben Felix: I go on Twitter, but I didn't know something had happened. What happened? What is it?
Cameron Passmore: There's two different feeds side by side, so you have for you, so they choose stuff for you, which includes your followers as I understand it. Then there's another feed, which is just your followers, which I like.
Ben Felix: Ah, I see it.
Cameron Passmore: Don't forget, we're on YouTube. Sandrine told me, yesterday, we just passed 20,000 subscribers, which is pretty cool. As always, lots of stuff available in the store. And if you're a teacher, we're offering a deck of the Talking Sense cards for free, if you want to use them in your class. Shout out to PWL.
Ben Felix: This podcast that you're listening to is a product of the work that we do for our clients at PWL Capital. We use the podcast as a platform to discuss, and refine, and expand and test with listeners the knowledge set that we apply to the advice that we ultimately give to our clients. We've talked about this before, the podcast is this very cool feedback loop where we get to say stuff to a whole bunch of people that are probably smarter than we are. We get a pretty tight feedback loop through comments and reach outs and all that kind of stuff. Particularly in the Rational Reminder community, there's often very good feedback, or criticism or new information that we get there. As we say, every week, at the beginning of the podcast, it's about sensible investing and financial decision-making.
That's exactly what PWL as a business helps clients with. So, we just wanted to finish the episode with, like you said, Cameron, a shout-out to PWL for people who are in Canada. We want to highlight that we are accepting new clients. We have, in my opinion, some of the sharpest, most dedicated financial planners and investment advisors in the country. And we've got people all over the country at this point because we're on a work-from-home model, which has been great for finding people. We're happy to speak to anyone who may be interested in seeing if there's a fit as a client with PWL.
Cameron Passmore: Yeah. I think people know that we're not here overtly selling our services. We've never done this before. Actually, had feedback last week from a very thoughtful client, saying, "I think you guys can move over just a notch and make sure that people know that you are open to helping people" and that is our objective here. If you think we can help you, you find us on the website, drop as a note at info@rationalreminder.ca, if you prefer. We're easy to find. That's all we're saying. Anything else, Ben?
Ben Felix: I don't think so.
Cameron Passmore: Cool. Ski season is here. Anxiously looking forward to skiing this weekend, which would be very nice. Snow is coming. Snow is here. So it's peak season, which will be great. Thanks, everybody for listening. Have a great week.
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