The Rational Reminder Podcast

Latest Episodes:

Episode 276: Darin Soat: The Problem with Finfluencers, and Why it Won't Get Better Anytime Soon Oct 26, 2023

Show notes

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

Key Points From This Episode:

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

Links From Today's Episode:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Episode 275: Live from Future Proof 2023: Decoding Financial Decision-Making with Hal Hershfield Oct 19, 2023

Show notes

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

Key Points From This Episode:

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

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

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

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

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

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

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

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

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

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

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

Links From Today's Episode:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Episode 274: A Live 5-Year Rational Reminder Retrospective (and Creating Superfans with Brittany Hodak) Oct 12, 2023

Show notes

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

Key Points From This Episode:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Books From Today's Episode:

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

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

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

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

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

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

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

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

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

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

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

Links From Today's Episode:

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

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

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

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

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

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

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

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

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

Brittany Hodak — https://brittanyhodak.com/

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Episode 273: Professor Samuel Hartzmark: Asset Pricing, Behavioural Finance, and Sustainability Rankings Oct 04, 2023

Show notes

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

Key Points From This Episode:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Participate in our Community Discussion about this Episode:

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

Links From Today's Episode:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Boston College — https://www.bc.edu/

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

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

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

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

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

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

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

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

Episode 272: Rob Carrick: Canadian Personal Finance in 2023 Sep 28, 2023

Show notes

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

Key Points From This Episode:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Links From Today's Episode:

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

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

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

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

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

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

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

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

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

Rob Carrick — http://robcarrick.ca/

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

Rob Carrick Email — carrick@globeandmail.com

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

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

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

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

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

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

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

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

Episode 271: Expected Returns of the AI Revolution (plus People are Lying to you About Money w/ Anthony Walsh) Sep 21, 2023

Show notes

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

Key Points From This Episode:

(0:04:07) The cycles of AI development, excitement, and disappointment in technological history.
(0:15:01) How technology bubbles impact investors and why investing in revolutionary technology is a questionable strategy.
(0:18:50) The paradox of skill and how it applies to investment strategy.
(0:23:40) Mark to Market Segment with Mark McGrath on real estate and rentals.
(0:34:50) Looking back on Episode 155 with Don Ezra on planning for life after work.
(0:37:03) Introducing today's guest: Anthony Walsh, who wrote People Are Lying To You About Money.
(0:40:17) Four types of lies people tell about money and why most people are financially illiterate.
(0:48:46) How Anthony navigates financial planning as a risk-averse person.
(0:53:25) What motivated his move from Lean FI to Coast FI and the relative value of money.
(0:55:10) The importance of planning according to financial wellness and health.
(0:57:19) The after-show; shows and series your hosts have been watching and a book recommendation.

Books From Today's Episode:

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

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

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

Links From Today's Episode:

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

Episode 270: Victor Haghani and James White: The Missing Billionaires Sep 14, 2023

Show notes

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

Key Points From This Episode:

(0:05:19) The puzzle of the missing billionaires (and why it matters to Victor and James).
(0:09:45) Some common but critical financial decision-making problems most people face.
(0:12:39) Unpacking the coin-flipping experiment in their 'What's Past is Not Prologue' paper.
(0:19:57) What investors should aim to maximize when sizing positions in risky assets.
(0:24:22) An example that illustrates how the Merton model relates to bullish bets.
(0:29:04) What the Merton share tells us about dynamic asset allocation if it is or isn't possible to estimate expected equity returns.
(0:35:29) How real expected returns affect optimal risky shares for long-term investors.
(0:37:29) Different ways to forecast volatility to determine the optimal risky share.
(0:42:00) Easy-to-understand definitions of the utility curve and expected utility theory.
(0:50:20) Using the certainty equivalent return and Sharpe ratio to evaluate investments.
(0:57:56) Whether or not options belong in the portfolios of typical retail investors.
(0:59:01) If expected utility is a good model for normative personal finance recommendations.
(1:05:16) How Victor's experience with LTCM affected him, both professionally and personally.
(1:09:08) What optimal solutions for lifetime investing and spending look like.
(1:22:22) Questions to ask yourself to work out your own utility function and risk aversion.
(1:28:19) Victor and James' parting financial advice and respective definitions of success.

Participate in our Community Discussion about this Episode:

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

Books From Today's Episode:

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

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

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

Links From Today's Episode:

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

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

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

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

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

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

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

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

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

Elm Wealth — https://elmwealth.com/

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

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

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

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

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

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

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

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

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

Episode 269: Preet Banerjee: A multi-dimensional analysis of the value of financial advice Sep 07, 2023

Show notes

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

Key Points From This Episode:

(0:03:34) Background on today's guest, Preet Banerjee, and the focus of his research: the value of financial advice to households and whether it's worth getting it.
(0:06:29) Key problems with past research attempting to demonstrate the value of financial advice (including the portfolio-centric advice model).
(0:10:47) A review of the existing literature on the value of financial advice; the gap in the literature that his research is addressing.
(0:16:27) How Preet measured holistic wealth scores and comprehensive financial confidence in his research and the dataset he based his research on.
(0:21:26) What Preet took into account to determine who were DIY investors within his sample and which advice channels they use.
(0:28:27) The study of financial planning, shortcomings within the field, and some of the positive developments in recent years.
(0:30:00) Informative takeaways regarding advice channels, investable assets, and having a financial plan.
(0:36:30) How Preet approached his data, the progressive regression model he developed, and what it demonstrates about key topics in his research.
(0:47:36) How wealth allows you to access better financial advice versus the options available to you if you're in the mass market.
(0:49:48) Learn about the policy and regulatory recommendations that emerge from Preet's research.
(0:56:04) Preet's advice to listeners and DIY investors and what's next for his research.
(01:05:17) Our Mark to Market segment with Mark McGrath and his insights of everything you need to know about retirement savings plans (RSPs).
(01:18:02) A recap and review of Episode 266 where we talk with Colonel Chris Hadfield and why it's worth the listen.
(01:20:39) Hear our review of the book, Excellent Advice for Living: Wisdom I Wish I'd Known Earlier by Kevin Kelly.
(01:25:34) Our after-show section; Find out what we have coming up and how to attend our upcoming meet and greet.

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

Links From Today's Episode:

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

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

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

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

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

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

Rational Reminder Continuing Education — learn.rationalreminder.ca

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

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

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

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

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

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

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

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

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

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

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

Episode 268: Itzhak Ben-David: ETFs, Investor Behavior, and Hedge Fund Fees Aug 31, 2023

Show notes

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

Key Points From This Episode:

(0:03:27) Professor Ben-David's take on the current state of the ETF market.
(0:07:37) Ways that investors are affected by a broader variety of ETF options.
(0:16:46) Advice for investors who have been lured in by a sector or thematic ETF.
(0:17:53) Mutual or hedge funds versus ETFs and their impact on underlying securities.
(0:26:38) Reflections on the behaviour of mutual fund investors (learning versus luck).
(0:33:01) How we can learn what investors care about from mutual fund flows.
(0:37:15) Why investors typically put their money where the Morningstar ratings are.
(0:38:46) Morningstar's rewiring of the "star" system in 2002 and its repercussions.
(0:48:54) The effect of Morningstar ratings on mutual fund flow and momentum.
(0:52:40) Hedge fund investor behaviour versus mutual fund and ETF investors.
(0:54:46) The "two-and-20" hedge fund fee that sets it apart from mutual funds.
(1:00:53) What happens after investors pull their money from a hedge fund after a loss.
(1:02:19) How hedge fund incentive fees correlate with hedge fund performance.
(1:04:09) Key lessons for investors who might be considering allocating to hedge funds.
(1:07:15) How people treat tax refunds differently from other income and expenses
(1:13:20) Defining miscalibration and the behavioural bias that overconfidence presents.
(1:19:26) How CFO miscalibration responds to rising market uncertainty (and how to avoid it).
(1:22:58) Professor Ben-David's definition of success in relation to failure.

Links From Today's Episode:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Episode 267: The (Expected) Cost of Pessimism (Plus Matthew Dicks on the Value of Storytelling) Aug 24, 2023

Show notes

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

Key Points From This Episode:

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

Participate in our Community Discussion about this Episode:

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

Join Our Live Event:

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

Links From Today's Episode:

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

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

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

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

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

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

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