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

23:24They therefore have shared interests, and that becomes a pretty interesting pool of people for us to communicate with. Well, this is something Patrick O'Shaughnessy, I'm sure people know him from Invest Like the Best. There's something about the auditory experience. Like you either like our voices or you don't, but if you do and you kind of like the characters, it does really become this tight community. and like I heard from we talked about this on the podcast a couple weeks ago introduces to a friend of mine he had no idea we were doing this he's absolutely blown away and he's a firefighter sharing the content with his or my brother another story is a firefighter in the eastern townships of Quebec and so one of his colleagues a francophone was an active listener my brother didn't even know I was doing the podcast so he finds out from this other guy just did a name connection.

24:10So you just never know who's actively listening and engaged. Speaking of Patrick O'Shaughnessy, when he's kind of been asked the best episode of his podcast or the one he enjoys the most, he described it as what are the episodes that people are going to be going back to 10 years from now and revisiting or discovering for the first time. I know you mentioned John Cochran, Chris Hadfield. Are there any others that stand out that you think have that kind of staying power. Gerard O 'Reilly, co-CIO of Dimensional. I've listened to that one many times. Eugene Fama, Ken French, Charlie Ellis. Mayor Stadman we just had on was fantastic.

24:50David Booth, who founded Dimensional from a business standpoint, that was excellent too. I do go back to John Carkin episodes a lot, but Cameron also mentioned earlier, we had this whole vein of guests or a whole cohort of guests on happiness and wellbeing. and I think it relates to Barbara's talk this morning, the research that we spoke about with those guests became a really important part of our wealth management business and the way that we deal with clients. So I definitely refer back to those episodes or the research of the guests that we had in those episodes. That was really, I think, transformational to the way that we set up our client relationships and communicate with clients.

25:25And when you're getting in front of these people or asking people to come on the podcast, Obviously, it gets easier with the growth of the podcast, but how have you gotten some of these big, bold print names in academic finance to just come on for an hour? We just ask. It does get easier, though, when we have a big list of past guests who are pretty big names. Early on, I guess we just got a little bit lucky. I guess we had some podcast episodes out, and I know we had one of our first somewhat big-name guests. He said that, you know what? I went and listened to some of your episodes, and they're really good.

25:56I'm happy to come on. So that helped. but it builds, it snowballs. Now when we ask a guest to come on, we send them an email that lists some of the past guests and it's like, it's everybody. So everybody says yes. But you start asking friends, like we're friends with Larry Suedro and Rick Ferry and Dan Solon and people like that. And then you asked them for introductions. So like Larry gave us an introduction to Cliff Asness at AQR, which was great. So every little bit, you just kind of scratch and get that breakthrough. And then we reached out to Ted Sides of Capital Allocators and we share production team in the background.

26:31So that was kind of the intro. And he said, I got asked all the time, but maybe that's who you were referring to. So yeah, listen to your stuff. You guys are okay. So he's become a friend of ours since then. And then a friend of ours in New York City knows Jill Schlesinger, who's the personal finance person for CBS Morning News. So we got to meet Jill and she was just on with her new book a couple months ago. And we're living this, right? Like you have to be keen to be aware of what books are coming out. And it also becomes a bit of a race, right? Because a lot of our guests will go on like masters in business with Barry.

27:01So we're trying to get in the queue, kind of competitive to try to beat them. We also did a trip to New York City where we interviewed Barry, Dr. David Blitzer from S &P, which is another fantastic interview in the history of indexing. But again, it's who knows who and just ask. And Barry being Barry Redholtz of Redholtz Wealth, who I think is probably an American similar style to what you guys are trying to do on the podcast front. Like I know they have a series of podcasts you mentioned. I don't know if I'm supposed to share this, but they're thinking about rolling out some more podcasts in the next couple of months.

27:31So it is a bit of a different strategy that not a lot of, whether it's RIAs in the US or independent wealth managers in Canada are pursuing what you guys are doing. It's hard though. It's a lot of work. It's a major time commitment, not just preparing, but finding the people, booking the people. We do it all ourselves. We don't have booking agents. We don't deal with even inbound requests coming from agents. All but one we've turned down and that one we, in hindsight, might have passed on. No names. You don't want to just be on the circuit, right? Just welcoming authors. And then so many guests show up and they're like, you actually read the book.

28:09Well, of course you read the book, but it's so used to just being a name to plug a podcast. To clarify, I also read Waleed's book. That wasn't just interviewing him. In terms of dream guests that maybe you haven't been able to book yet, is there anyone that stands out? Let's see. I mean, Danny Kahneman would be cool to have. Myron Scholes, Bill Sharp, Dick Thaler would be pretty cool. We think we have a line to Dick Thaler because he's co-authored with Cass Sunstein, who was just on. Another phenomenal guest, really nice guy too. Anyone comes to mind for you? The one that we regret is Markowitz.

28:48He was kind of right in there with the type of people that we've had on the podcast, but he's obviously passed away. So that was a shame. And similar to what Barbara said earlier, are there ever interviews that just don't go the way that you think they're going to go and you just decide it's not worth releasing this because this is not what we thought we were going to get out of this person? We've never not released an episode, but once we had to heavily edit in post-production. No names on that one too? Yeah, no names. No names. Usually that doesn't happen. And one episode had a lot of backlash, which really shocked us.

29:20So people accused us of having political motivations. And I have no idea Ben's political. We've never spoken politics ever. Do you want to start today? No, I'm good. But we had a lot of backlash on this episode about diversity and equity. We were shocked by it because I thought it was a really nice episode. My fiance loved it. And we're not trying to annoy anyone. We're trying to learn. We generally just want to learn. I think it's worth bringing that kind of incident up because you're a pretty mild-mannered guy, and that's probably as heated as I've ever heard you on the podcast. So do you want to just give a bit of background about what the topic was and what the backlash was?

29:57The guest was a feminist talking about the state of the world for women and money and then how those things relate to each other. And like Cameron said, we thought it was fine. It was interesting. And we did hear from a lot of women afterwards that it was a great episode, but there were a group of very vocal, very angry men. We're going to get backlash again for this episode. Thanks. Thanks, Scott. Glad that I could join the team. Yeah, that was ugly. I mean, that's about as ugly as we've seen our podcast need to get ever. But if you don't like it, why did you listen? I don't understand. I don't know.

30:32We got to stop talking about it. Yeah. The backlash is only good. Which is sad. That's the result of the feedback that we got on that episode. But yeah. And in kind of a similar vein, are you guys ever like one of our most famous Canadian exports, Drake, has a line where he says, 7 a.m. in Germany, can't believe that they've heard of me. Are you guys getting recognized in public airports, different places? And is that exciting, surreal, weird? Yes, it happens. And yes, it is exciting, surreal, and also weird. But it's kind of fun to get feedback. Like I was at Costco a few months ago and someone recognized me and you get a chance to ask, what do you like about it?

31:14And so you get some feedback from people. So yeah, it's nice to see it has an impact, which was the ultimate goal, right? Still on the fun side of fame. It hasn't hit that. Well, it's not that. Like I'm talking one episode, right? This is hardly a regular. Pretty niche topic, I guess. You're not quite putting up Justin Bieber YouTube numbers, even with 4 million. We do have a couple of questions from the audience. I'm going to go to one now. Our firm just launched a podcast. What advice can you offer for us to succeed? One of the reasons that we've had a little bit of success with our podcast is that we've been consistent.

31:48We committed to doing this from day one when we started. We've done an episode every week since. Never missed one. And they come out at the same time every week. And I think that's huge. I think it'd be very difficult to build an audience without that consistency. So that's probably the number one piece of advice that I would have for anybody starting a podcast. The vast majority don't last more than a month, I think. People start and quit pretty quickly, but you have to love doing it. Otherwise, you're not going to do it. And I think the other thing that's worth talking about is just the work, is the amount of time that you guys are both putting in to each episode.

32:20And maybe just talking to that, you obviously have other facets of your jobs. What percent of your day, your week, your year is on the podcast versus the rest of your roles at PWL. Well, it's interesting because we're doing a lot of this work already, like searching out people and reading books. So it's part of a way of living, but directly for the podcast, it's at least 10 to 20 hours a week, minimum. It's tough to separate it out though. My job title at PWL is head of research. And so I'm doing the research anyway. What's the extra time specific to the podcast? I think that's a lot harder to articulate.

32:57But for a John Cochran type episode. Yeah. But like you said, I wanted to read his research anyway. He's reading that on the weekends. It's fine. It's true. I mean, it's true, right? I know you're not supposed to work after hours, but we will often chat many times through a weekend. Because it's the stuff you would be doing regardless of the podcast. Right. I do have some good news for you from one of the audience questions. I was not expecting this, but hopefully this helps justify the trip to Toronto. I'm not going to say the person's email address, but it says, I can put you in touch with Bill Sharp.

33:28So there you go. Hopefully that leads to a future appearance on Rational Reminder. I don't want to get clickbaity. And I know we've talked about the title here, but if you could distill the last five years into a couple of soundbites, like your biggest takeaways, your biggest lessons, what would they be? And maybe I'll start with you, Ben. One of the big ones is that there is no optimal investment strategy. We think about that a lot professionally, but we've talked to so many experts with expertise in different areas of finance and financial economics and implementation of financial products, and nobody agrees on the optimal portfolio.

34:07So I think trying to pursue that is probably not going to be fruitful. One common thread though, among all of the many academics we've had on our podcast is that I don't think any of them have disagreed with this. As a starting point for portfolios, low cost index funds are pretty great. at least as a starting point. And that's something that I find interesting because we've talked to all of these academics and they generally agree on that. In the world of practice, I don't think you find quite as much agreement. So that's one big thing. The other thing is about happiness and wellbeing and how that intersects with financial advice.

34:40We listened to Barbara this morning and I thought that was great. There's a model that we've learned about through doing the podcast called the PERMA model, positive emotion, engagement, relationships, meaning, and accomplishment. And I think having a model like that as an aspect of the advice that we're giving to people when they're making financial decisions is really important. So that's when I talked earlier about things that have changed our business, that's a big one where we're not just trying to find the maximum sharp ratio for clients. We're trying to help them make good decisions that improve their more holistic well-being.

35:11So that's something that we've learned a ton about from doing the podcast. The other thing too is a testament to the intro that you wrote five and a half years ago, sensible investing and financial decision-making. This is all about decision-making. And if you think about it, going back to Waleed this morning, life is about making decisions. So that's what we do every week is try to find information to help people make better decisions. And there's an appetite for that. And a lot of people do like long-form content. I believe a lot of people, a lot more people should want long-form content. You heard us talk last week about you did a deep dive two weeks ago that referred 23 different studies, which who knows how much time you put into it.

35:51But in 30 minutes, you can hear Ben's take from 23 different academic studies. I would argue that's a worthwhile investment of time to help you make better decisions. And probably more than 30 minutes went into that, I'm guessing. Oh, yeah. A little bit more. I think another big one is there's stuff that we've learned. There's stuff on portfolio theory and on well-being that we've learned that helps us in our practice. I think about podcasting, we've also learned a lot of stuff. People want to talk about their research. People who have done a lot of work on a subject. I mean, this event today is a testament to that as well.

36:21People want to talk about the work that they've done. People who have done work in academia typically want to help people with their work. And so they're excited to talk to practitioners. So that's been an interesting thing to learn. And even though we've talked about some of the big names we might've interviewed, some of the greatest guests are people you've never heard of that are just so happy to be asked and were unbelievable. We had exact Ben David a couple of weeks ago. I think this was his first podcast. I don't know who it was. He was fantastic interview. Scott Sederberg changed how we think about Marcus with his long-term capital markets research.

36:57He's not a household name. Those finds that Ben digs up are unreal. Do you want to talk about your personal reading habits? We talked about the reading challenge, but maybe that's contributed to it. But how do you find time? There's a lot of business professionals in the room listening. What do you do to find time to read? I'm making an atomic habit. So five or so years ago, I had lunch with a client and I was blown away that he had read. I forget the number, but like 20 or so books, I was blown away because I might've read two or three books and just decided 45 minutes every morning. And I swear it's not much more than that.

37:30And I just finished book 48 of the year. So that's not to brag. It's just if you do 45 minutes, you're going to do a book a week. That's just most books are like 260 pages and four or five hours, they just happen. And I do it in my Kindles. I take notes, feed it through a Readwise, back to every note. I mean, everyone's got their own habit for capturing notes, but that's a big deal too, is to capture what you retain and have a mechanism to review it is really important. I don't really have any habits or hacks like that, but I will say that having something like our podcast, like I mentioned that I'm doing research anyway for my job, which is true.

38:04But having a podcast forces us, as long as we want to keep the podcast up, it forces a cadence of research. So we know that every week we have to either have read a bunch of research from a guest we're going to interview, or we have to have prepared our own research. We alternate between guests and presenting our own stuff. So that forces me to do a lot of reading. I don't have a hack though. There is that constant pressure to make sure you keep up. And if you're going to take a couple of weeks off, you have to make sure you got some work in the bank. And if you had to recommend, I guess you've read hundreds of books over the course of doing the podcast over the last five years, one, two, three books that would be relevant, not just to this room, but to anyone, what would they be and why?

38:43That's a very hard question. Depends on what you're interested in, but big impact to the question we had here about distraction. I love the book Deep Work by Cal Newport for two reasons. One is it's super important to get into flow in the work that you have so to block time to do that deep work. But also, most people are distracted. So if you become the deep worker in your environment, that gives you a serious edge up on other people. And the other book that I would recommend, we just interviewed Matthew Dix, who wrote Storytelling. And Storytelling is a great gift that you have to make compelling arguments in your environment, especially in the busy environment that we're all in and a larger remote type environment.

39:20So those are two great books I would highly recommend. that. CFA Research Institute has a book. I think it's just called Financial Market History. I don't know if people have read it. Incredible, incredible book. I think everybody should read that. We get a lot of interesting perspectives from podcast guests, but I find the deep historical perspectives on just on data and what has happened in the past in financial markets, I find that to be really interesting. But that's a book that captures a lot of that in terms of asset class returns and market structure and things like that. And then the other one is also historical.

39:48It's The Great Depression, A Diary by Benjamin Roth. It's a firsthand account from a lawyer who lived through the Great Depression, but he's journaling about what's happening in his life and what he's thinking about and how he's processing the information. And it's just an absolutely incredible perspective to think about today, which is why it's an interesting book. How are the two of you different other than your interests and other than maybe height? I'm 6 '3", and I'm tiny, right? In this group. I'll say when we took the picture, I was like, okay, I'll at least be his height. And I was like, no, I'm not his height either.

40:19But we talked about complementary skill sets a little bit last night. And I think we've gotten into that. But how do you complement each other? And is there anything that you don't complement each other that gets on your nerves about the other person when you're in a room interviewing people for five years? Go ahead. These are the hard-hitting questions. I don't think we get on each other's nerves very often. I'm probably more analytical than Cameron. Probably. that's probably the biggest difference though i mean we share a lot of the same interests and even if i'm more likely to dig through academic papers cameron's just as interested to hear the conclusions as i am yeah so i get what comes out of his research i just don't have the drive and the intellect to dive into the papers like you do i think you you can live easier in a world of chaos i think a bit more than i can i mean that's a good way right like it's part of the it may come off like it's polished there's a whole lot of duct tape in behind the scenes right to pull this off every week.

41:15But the commonality is the drive, right? We're just curious. We're not nine to fivers. We're bouncing ideas off. I've chilled a lot. We let a lot of stuff go. Like some things I may have disagreed on, like the length early on, stuff like that. Because no one knows the truth, right? So we're happy to experiment. He didn't know if the book review was going to be of interest. I didn't know either. Who knew it was going to be goofy next to his deep dive? Does it work? Well, we'll let the listeners be the judge, but it's kind of what we like doing, right? Yeah. Five years in, hundreds of episodes. Do you have an idea of when this would stop?

41:49Or do you envision doing this five years, 10 years, 15 years from now? We don't quit very well. I think that's a trait of ours. As long as there's good research and interesting authors and stuff to think about, I don't see why it would end. We're enjoying it. And that's one of the things in thinking about pursuing a podcast for somebody else. You've got to enjoy the work and the whole process. If it got to a point where we weren't having fun or weren't enjoying it, we probably would stop, but we're not there. So I don't know when we would stop, but eventually, but I don't know what the driver behind that would be.

42:24Okay. You talked briefly about regrets and not having video on the first hundred episodes. Anything else that you know now that you wish you knew five years ago, three years ago? No, it's super fun to play around with ideas and try stuff and see if it works and see if you enjoy doing it. Like so much of it's an accident, right? Like even deciding, do we have a guest? Do we have a guest every other week? Like how did that cadence happen? Early on, we tried to do Ben's deep dives together. It quickly became evident that doesn't work. So let Ben do his deep dive. He's great at it. And then we change the order of the show.

42:57So it's a fun recipe to mix with. It's super creative to actually put something as a finished product out and see what our marketing team does with it afterwards. Because once we're done recording, they own it, right? So they get creative on the graphics on the video and the engineering behind the scenes. Okay. You guys know how you end each interview with a guest, but some of the people in the room will not. Each time they have a guest on, they conclude the interview with asking that person, how do you define success in your own life? So I hope you're prepared for this question. after 270 something episodes.

43:32I'm not, but it's easy for me to be around people that you're crazy about and love going to work. Like every morning, like Lisa will say to me, she said, I can't believe you're so happy to go to work every day. Like we jump out of bed like at whatever, four or three in the morning. I can't wait to get to work. I'm not prepared for this either. And I thought about it because - This was not on the list of prepared questions, to be fair. We always put that on the list for the guests so we can think about it. I should have added that. I apologize. You know, we've heard however many 100 plus people, very accomplished people answer that question.

44:01And there's so many different ways to answer that I think are pretty great. I don't know if I have one that's unique or particularly good. I think you got to enjoy what you're doing minute to minute, but you've also got to be able to reflect longer term on what you have done and be happy with that. So I guess something like that, enjoying what you're doing moment to moment, but also being able to look back on the bigger picture and be happy with where you're at. It's pretty good. I'd say. for not prepared. That's pretty good answer. Yeah. Any closing thoughts for this room of people? Obviously, there's some people thinking about starting a podcast.

44:32There's a lot of independence. There's people that work at banks here. Any advice based on what you've learned, based on your careers at PWL? Keep on learning every day. That's what Chris Hatfield told us, right? It's not about being an astronaut. It's about becoming an astronaut. It's every single day. So in this business, right? Just keep learning and helping and get better every day? Content has been, I mean, we talked about the growth of the podcast. The growth of our business has kind of mirrored that. And the content has been an important part of that. So if you can do it, if you can pull it off and be successful creating content, I think it can be really valuable.

45:08I mean, it's not other than our time, I guess, which is maybe expensive, but it's not particularly expensive. Like we're not buying Google ads or paying for advertising otherwise, but we're getting massive reach with our content. it's pretty incredible for a lot of different reasons. But if you can pull that off, if you can be consistent with doing something like that and build a community around your content, I think it's extremely valuable in our business. Great. I want to thank both of you. Again, I'm the first person to ever host Irrational Reminder other than the two of you over the last five years.

45:38So that is an honor as a longtime fan of the show and just really appreciate you guys being here today. It was great to have you on. Thanks a lot, Scott. All right. So I hope people enjoyed that. And now we're going to move on to our Mark to Market segment with Mark McGrath. Mark, welcome back to the podcast. Thanks. Always good to be here. Feels like it's been a while. Yeah, it's been a while since we've recorded because we had a bunch of camera traveling and so we had a bunch of pre-recorded episodes and it's been a different experience than usual. So what do we got this week for Mark to Market?

46:08What do we got? So I'm going to talk through some of the concerns that I think a lot of people don't know about when it comes to a certain type of account called an in-trust for account or an ITF account. Sometimes these are called informal trusts. So these are accounts that were traditionally, they were opened at a bank branch. And it's a way to convey money to a minor child or grandchild, right? So take a scenario where, let's say you're a parent, you're funding the RESPs, the education plans for your kids, that's all going well, you've got additional money that you want to put into your kids' hands.

46:41But maybe it's not such a significant amount of funds that you're going to go to a lawyer and draft up a formal family trust, right? Maybe it's 10 or 20 or 30 or$50 ,000 or something like that, where the lawyer fees to draft a formal trust, maybe don't make sense in the context of the amount that you're going to contribute for your kids. And so there's this type of account called an ITF account or an interest for account or an informal trust account. And it is an option. And the way these work is you open it at a bank, or you can open it with an advisor or brokerage. And you contribute money, the child is the beneficiary.

47:12So they're the only one that can benefit from the funds, you contribute the money, and then you manage it on their behalf. And the reason you might want to do this or the benefit that at least is sort of marketed and sold is that if you invest that money inside an ITF account and you generate capital gains, so you invest in something that goes up in value, those capital gains can be taxed in the child's hands, not in your own, right? So the alternative usually is you have the money in your own non-registered account where any capital gains you're going to pay tax on, presumably at a higher bracket than your three-year-old child who hopefully does not have a job and is not earning an income.

47:46Now that's great. Any other types of income, like interest or dividends or foreign dividends, those do get attributed back to you, the contributor to the account. So this is really sold as a way to invest the money for your kids, target capital gains, trigger capital gains over time in their hands. They're likely not going to pay any tax on it. And when they reach the age of majority, the funds are legally theirs. So you get to hand it off to them and now it's their money. So on the surface, that all sounds great. There's a number of things that can go wrong. These are often not set up correctly when you look at how trusts are supposed to work.

48:18So first of all, CRA does not distinguish between like a formal trust and one of these accounts. So in the eyes of the CRA, a trust either exists or it does not full stop, right? Now for a trust to exist, it has to meet certain tests and definitions. And usually if you go to a lawyer, you would have a formal trust deed prepared. And it would be very clear that these definitions and terms are being met. And there's no issue with that. But the problem with these ITF accounts is often that certainty is not clear from the paperwork that you're using to open up the accounts. Because when you go in and you open one of these, it's just like a new account application form similar to opening, say, a TFSA for yourself.

48:53And so you can run into these issues. And one of the big ones is something called the reversionary trust rules. And that's a fancy term that basically says if you're the trustee of the account and the contributor or the settler of the account, you can run into an issue where a CRA says, no, no, no, you didn't actually give this money away. It looks like you did, but you're still in control of it because you've contributed the money, but you're still in control of it as the trustee. And so we're going to revert all of the income, including the capital gains back to you. And the issue is this might not happen until many, many years down the road where you've already triggered capital gains in the hands of the child.

49:25And Sierra goes, no, we're going to look at this as if this trust never existed. And so now you've got all these back taxes to pay because you were putting those capital gains in your kids' hands, but actually they're yours. And not only that, but because some of these tax bills are retroactively due 10 years ago, So now there's a bunch of penalties on top. So it completely undoes the trust relationship and can be a pretty nasty surprise. Now, I've never seen this happen like in practice, but in theory, this is a possibility. And so one of the ways around that is to ensure if you're going to open one of these accounts, the settler or the contributor and the trustee are two different parties altogether, right?

49:59So you might have, let's say, a father be the contributor or the trustee and the mother or the other spouse, the partner being the other party, right? So there's a separation between who's contributing the money and who's controlling it. So that's one way around it. Now, that's only one of the issues. Some of the other issues arise if one of the parties passes away. And this is something that I've never seen discussed or considered when these accounts are recommended. So if you think about it, let's say there's three parties. There's the contributor, the trustee, and now there's the beneficiary.

50:28What happens if one of these parties passes away? So if the contributor passes away, from a tax perspective, that's actually the best case scenario, because from that point forward, there's nobody to attribute the income back to because they're gone. And so the only party that is now responsible for any tax is going to be the beneficiary. So if the contributor passes away, even the interest and the dividends, which normally would be attributed back to the contributor, are taxable to the beneficiary's hands. So obviously, it's a terrible scenario. But at the same time, from a tax perspective, not a bad thing.

50:59Where it starts to get messy is if the trustee or the beneficiary passes away. So if the trustee passes away, the trustee's will will determine what happens next. If they have named a new trustee for it, like a subscriber trustee, then it will pass to this new trustee and they'll continue to manage it. I have never seen a will where this was done. I'm not saying it doesn't exist and maybe there's some great planning going on and people are doing this, but I've never seen a situation where somebody had one of these ITF accounts and their will named a subscriber trustee. So if they don't, it goes to the estate of the trustee.

51:36So back up a bit because it's starting to get messy. The trustee passes away. Now the estate of the trustee is effectively managing the trust account for the beneficiary. But guess what? The executor of the trustee might be somebody totally unrelated or somebody that the contributor wouldn't want to elect to actually manage these trust assets, right? Like maybe you named a friend, and the contributor is a grandparent or something who doesn't know this friend, but now the executor has to manage the money. And it may be completely different than the wishes of the original contributor, right? So you get into these kind of strange offshoot relationships.

52:12So that's potentially one problem. The other issue is if the beneficiary passes away, then it also gets pretty messy. Obviously, they're a minor in this case, it's not likely, but it does happen, unfortunately. Because minors cannot execute a will, If a minor passes away and they're the beneficiary of a trust, there's no will. And so it follows the laws of intestacy, which is just a fancy term, meaning this is what happens if you die without a will, right? And in that case, the parents would typically get the first share of the assets in equal shares. So now imagine a situation where a grandparent opens one of these trust accounts for their grandchild.

52:49If the grandchild were to pass away, the money would revert to the parents. So the grandparents have now completely lost control of this thing. They now have been given to their parents. And maybe that's not the end of the world. But at the same time, that's probably not what the original intent was for opening these types of accounts. So those are the major issues, I would say. The other ones are, once you gift to one of these trust accounts, it's irrevocable. You cannot take it back out. And if you do, you end up with problem number one, which is that reversionary trust concern. You can't even take it out to contribute to an RESP for the child.

53:21Because technically, an RESP is owned by the subscriber, not the beneficiary. If you go to a trust and realize you should have gone to an RESP, sorry, you're now reverting the trust, which can get pretty nasty. And probably one of the bigger problems is that when they turn 18 or 19, the money is legally theirs. I don't know what you guys were like at that age. I know what I was like at that age. I can tell you right now it would have been a good scene if I knew there was a bunch of money. Suboptimal is a polite way to put it, Cameron, for sure. That money would be long gone. I'm not sure I'd be here talking to you guys right now.

53:52And some people, I've got clients who have kids who are financially mature enough to handle that type of windfall. But the decision is now out of your hands, right? If they find out about it, it's legally theirs. And if you don't give it to them, they can actually sue you as the, say, the parent or the grandparent to get the money. So it can get kind of nasty. So that's how they work. That's the downsides of them. What can you do instead? I'd say the easiest thing is just consider the RESPs first, education funds for your kids. If you've maxed those out, you can look at other things like just paying their expenses directly during their lifetime.

54:21Let's say it's a grandparent opening it for a grandchild. Rather than put money in trust, just pay for their activities, their private school, their sports, their arts and activities and that type of thing. And when they get older, you can help them fund a tax-free savings account. That's really simple. You just give them money in as long as they're 18 or 19, depending on the province. They can fund a TFSA. Another option is life insurance. For some people, that might be reasonable or something to consider. And so I do want to point out that these things can work. They can be great tools for people.

54:47I'm not totally against them by any means. I just think people need to consider some of these risks and downsides before they just sign an account opening document for them. Well put. I think that's it. Yep. Interesting topic. All right. Thanks for the mark to market. Thanks guys. See you in a couple of weeks. Cheers. All right. Always great to have Mark join us. Great information there. So let's jump to the book review section. So once again, I discovered a great book. I enjoyed it immensely. It's called Creating Superfans, How to Turn Your Customers into Lifelong Advocates by Brittany Hodak.

55:20So I reached out to Brittany to see if she would join us and she agreed to come on. And much like the last marketing book we talked about, which was Nancy Harhut's Using Behavioral Science in Marketing, well, it's really applicable. And I know there's a lot of business people listening to us who I think will appreciate this book. Brittany is an award-winning entrepreneur, author, and customer experience speaker. She's delivered many keynotes around the world to companies such as American Express and organizations like the United Nations. She's also worked with some pretty cool brands and entertainers like Walmart and Disney, Katy Perry, Dolly Parton.

55:59And I really liked her book. So I reached out, invited her on. So she came to join us. I thought our conversation was terrific. So this is our conversation with Brittany Hodak about her book, Creating Superfans.

56:15Brittany Hodak, welcome to the Rational Miner podcast. Thank you so much for having me. Congratulations on your new book, Creating Superfans, How to Turn Your Customers into Lifelong Advocates. I got to tell you, our head of marketing and our listeners know Angelica. She saw you speak at the Jolt Conference earlier this year. And as you were speaking, she downloaded your book, texted me that I've got to get this book. So I downloaded the book right away. I think as you were speaking, and then I reached out to you immediately after diving into the book to have you come on. So it's great to have you join us.

56:46Oh, that's amazing. Thank you so much for sharing that. And I'm thrilled to be here. So right off the top, what is a super fan? A super fan is a customer who's so delighted by their experience with you that they come back and they tell their friends. They become what I call an enthusiastic advocate. What is a brand? So a brand can be a person. It can be a thing. We are living in a world where all of us are essentially brands. And one thing that I want people to really know and understand, especially when you have employees, is that your brand is your team. Oftentimes, we think our brand is our logo, our website, the ads that we place.

57:27But in reality, our brand is the people in our team and the interactions that those people are having with our customers. Because a brand is really just what someone thinks about when they think of you. And more often than not, unless your brand is like Disney or Amazon or Nike, people aren't thinking about your logo. They aren't thinking about your campaigns. They're thinking about the interactions that they have with your teammates and the products that you sell. A couple of weeks ago, we had Matthew Dix join us who wrote the book Storyworthy. And he talked about the power of storytelling. That was an incredible conversation we had.

58:03Now, you wrote in your book that superfans are created at the intersection of your story and every customer's story. So how do superfans relate to the company's story? So it's important to know that it's not just the company's story. It's also the stories of everyone who works at the company. because much like the Chicago Bulls and Michael Jordan, they are intertwined because as I said before, your brand is everyone that's working on your team. So in the book, I talk about using the power of storytelling to set yourself apart from your competitors. I think the biggest threat that every business faces, whether you're a brand new business or one that's been around for centuries is apathy.

58:44Customers who just don't care enough about you to have a strong opinion one way or the other. They see you as a commodity provider. So maybe they'll give you their money or maybe they'll go to a competitor. They're probably going to be making a decision based on a commodity factor. What's the closest? What's the fastest? What's the least expensive? And by using storytelling, by cementing yourself as a category of one, you begin to chip away at some of those commodity things. You begin to make things like price and speed a little less relevant because people say, but I want to work with them because they're the best.

59:19And the quickest and the most effective way to do that is through storytelling, because stories are much more impactful and much more memorable than the things that we sort of like to think rational people are using to make decisions. Things like facts and statistics and all of those scientific, logical, quantifiable details. But every single research study that has ever looked at this has shown that storytelling is much more powerful, much more effective, much more memorable than all of those things. Do you have any sense of what causes apathy in a business? Is it that lack of stories that individuals carry?

59:55Part of it is that, and I think it's really lack of differentiation. So for a very long time, we were living in an economy where it was service-based or product-based and you could do okay competing on commodity things because people weren't able to get everything they wanted at the click of a button on Amazon. So if you were the closest to a bunch of people. If you had convenient hours, you would do okay. But the world has changed. And now everything is available in the click of a button. You don't have to click a button. You can search with a voice to get what you want. It's never been easier for upstarts to use technology to level the playing field in many ways with much more established competitors who have been around a much longer time.

1:00:41And because of all of those things, it has become increasingly important to set yourself apart with things that are not based in commodity, because it is easier for a customer today to have apathy than it ever has been before. Like back in the day, you maybe had to put effort into remembering like, what was the name of that handyman? What was the name of the person who came and did something for you? You'd put their card on the refrigerator. So you had it. Now, if you forget that, you can just do a search and find a ton of people who are nearby and come help you solve that problem. So it has become easier for customers to have apathy because the access to information to find other people who do something very similar or perhaps exactly the same as what you do has never been easier.

1:01:27So in order to set yourself apart, in order to turn those customers into super fans, you've got to overpower that apathy. You've got to make them want to say, I don't want to work with someone else who does what you do. I want to work with you because you're the best. That's really interesting. You were speaking to this, but I want to ask about it explicitly. Why are superfans so important to building a successful business? So superfans are important for a few reasons. Number one, they help bring you more qualified customers. So they are out there advocating on your behalf when given the opportunity to do so.

1:02:01That could be in person at a baseball game or a supermarket. It could be online. It could be writing reviews, talking about you in a post that they're putting on a social network or a blog or an email blast. So they're bringing you more highly qualified prospects. And there's a trust factor of those prospects who come in. The other reason that they're important is because they are going to have a much higher lifetime value and they are going to come back much more regularly than other customers because they've solved this problem. They're no longer looking for like, oh, I need somebody else to clean my carpet.

1:02:38I need somebody else to fix my car. They're like, Like, oh, I found someone. This is great. I don't have to solve this problem again. I don't have to do another search six months from now when I need something else. I have found a really great solution. In addition to characteristics about the business, are there characteristics about the person that cause them to be active in advocating for a business? I've wondered this for a long time because we often have clients that will be very active referrers to our practice. Is there something about that personality? Yeah. Yeah. So typically a super fan is somebody who likes to be helpful.

1:03:14They're very social. They want to help other people. They oftentimes are either extroverted or very connected in their communities. So these are the same people who are helping with suggestions and recommendations for things that aren't business related, right? Like saying, let me tell you about this class your kid needs to take, or let me help make dinner for you because you're overwhelmed, or let me help drive your kids to practice, which the really great thing is we all have these people in our lives. We all know the people that we can go to for a recommendation that seem to be over-connected, that seem to over-index and their ability to help us or like whip their phone out and say, oh, I know exactly who you should call or who you should talk to.

1:03:56And in the world that we're living in, increasingly, everyone is an influencer. Everybody has the ability to post things online, to share opinions that will change the way somebody thinks about because we trust their recommendation. We trust their input. We trust that action. So yes, these are typically customers who have strong social bonds in their community, are trusted within their peer group or their friend group, and like to make helpful recommendations. They like that sort of social capital they get when they say to somebody, oh, try this new restaurant or go here, do this, and somebody has a positive experience based on that recommendation.

1:04:36I never thought about that before. That's interesting. So it's much easier to be an advocate now than it was, say, when I started in this career 25 plus years ago. Oh, absolutely. Because we are all carrying around computers in our pocket where we can share our opinion. And the really interesting thing about the connectivity that we all have with social networks now is if you think about the posts that go viral on a regular basis, a very, very small portion of them are from professional creators. Those people who are spending all of their time trying to create viral content, trying to do something that's going to catch on.

1:05:11That is a very small fraction of what actually goes viral. More often than not, it's an average person who shared an opinion that resonated, that overpowered that apathy that we all have that made people say, oh, I want to share this. I want to tell somebody about this. I want to, you know, I want to have this reach other people so that they have the same reaction to it that I did, whether that's a positive or a negative emotional reaction. And so that's when I, you know, when I talk about this idea that everyone is an influencer, every single person has the ability to have your opinion heard by every other person on the planet.

1:05:48It's a really wild sort of social experiment that we're all living through together right now. How can a super fan be created? So super fans are created, as I mentioned before, at the intersection of your story and every customer's story. And I have spent my career obsessed with trying to figure out how people can create some science around the art. What can we do? How can we make someone go from, in my book, I talk about this idea of the ladder to super fandom and all of the different steps along the way, from getting somebody to be aware of your product, to trying it, to actively adopting it, to showing some sort of affinity for it, all the way up to the final rung of the ladder, which is advocacy.

1:06:31And in the book, I talk about each of those rungs on that ladder and sort of what it looks like and how you move people up. But ultimately, the process that I recommend, the system that I write about in this book is a five-step formula that anybody can look through this lens to think about how they turn more of their customers into superfans. and I call it the supermodel. So if one of our team members meets a new prospective client, how does that person determine what their customer story is? So the supermodel is S stands for start with your story. And really, that's all about getting clear on your own uniqueness.

1:07:10What is it that you do that makes you deserving of superfans, both from a company level, and also as the individual who's working there. So getting real clarity on what sets you apart. Why are you not a commodity provider? Why should someone choose you at the exclusion of everyone else? And then the second part of that, you understand your customer story. That's where the question that you just asked comes into play. What can you do? So in the book, I offer sort of a secondary framework for really, truly understanding your customer story. Teddy Roosevelt said, people don't care how much you know until they know how much you care.

1:07:48And I think that is so fitting here, really asking the types of questions to uncover what transformation your customer is looking for. What is it that they need both on the surface and below the surface that you may be the perfect fit to help them with? What are they struggling with that you're able to come alongside them and say, hey, I'm the right person to help you solve this problem because I have helped other people who are where you're at buy. What are those stories that you're telling? And then the questions that you're asking are really to help uncover what reservations do they have? What is it that they're looking to come out the other side of the tunnel with?

1:08:28What are those things? So asking those questions, leading with empathy so that they feel that they are not just another prospect, not just another sale. They feel that real human a human connection, that they matter to you as much as you and what you do matters to them. What does it mean to say that we're living in an experience economy? So living in an experience economy means that we're no longer in a market where things are driven solely by the product or the service. Those two things have long since blurred. According to a PricewaterhouseCoopers study, 86 % of people are willing to pay more for the exact same product or service if they know they're going to have a great experience.

1:09:13Experience is everything. It's the number one differentiator between your brand and every other. It's the number one thing that allows you to build loyal customers, to increase your profit margins. That experience is so critical. But in an experience economy, the inverse of that is true as well. Experience is everything, but everything is experience. Every touchpoint, every interaction, every single time a customer is in front of your brand, whether in person or online or on their mobile device, that is part of the experience. So in an experience economy, you've got to look for all of those moments where you can win, where you can elevate something from ordinary to extraordinary, where you can take it from a neutral experience to a positive one that they're likely to remember and maybe even tell their friends about.

1:10:04And think about the flip side of that, how is this affecting customer expectations? Oh, customer expectations are constantly getting higher. And part of it is because everybody else is raising their game. And part of it is because of technological advances. People don't just compare you to the best experience they've had with your direct competitors anymore. They're comparing you to the best experiences they've had anywhere. And as we see innovation, as silly as it sounds to say, the Domino's pizza tracker, right? Things like that, that have become so ingrained in the like pop culture zeitgeist make us think we should be able to have the same access to that information and those experiences, regardless of what we're doing.

1:10:50So when a small business says, oh, you know, I don't know where this is at, or I'm not sure how long it's going to take. Oftentimes the response is not, oh, that's fine because this is a new company or a small business. It's if Domino's can tell me who's putting mushrooms on my pizza right now. And Lyft can tell me exactly how many wrong turns my driver has to take before they get to me. Why can't you tell me where this thing is? The technology exists. So in a customer-driven experience economy, expectations are constantly rising. And this is important for business owners to know because you should always be innovating before you have to.

1:11:28You should always be making things easier and more frictionless for your customers before your competitors do, because what was good enough three years ago is not going to cut it today. And even if you're like on the cutting edge today, in a few years, the things that you're doing now that might seem really innovative are going to be table stakes because technology has made it so easy and fast for people to catch up to the category leaders. how important is a team versus an individual in winning new business it's incredibly important because everyone is in the experience department every single person regardless of your role you're shaping the perception that prospect has of the company so it's critically important for everyone on the team to understand not just their piece of the puzzle not just their role but really how it fits into the bigger picture.

1:12:24And again, why someone should care. What is the thing that every one of you is doing collectively, but also individually to earn that new business, to be the right partner for that prospect? In your book, you wrote that the best marketing doesn't cost anything. Can you talk about how businesses should think about their investment in marketing? Yeah. So what I mean by saying the best marketing doesn't cost anything is when you have word of mouth, that's free. When you have people out there advocating on your behalf, that's free. And oftentimes, when we think about marketing, we think about the paid things that we're doing, either the campaigns that we're running, the creative that we're making, redesigning things.

1:13:06And in reality, if you can spend a little bit of money to do things that make your customers happy, that make them more likely to tell their friends, that make them more likely to come back, you're going to see much higher ROI on that. And some of the things that matter the most to customers, things like kind words and handwritten notes and being able to take the time to talk to them to understand what it is that they're going through to help them out, those don't cost anything at all. And so making sure that you're giving everyone on your team permission to do those things, to look for those opportunities, to connect on a human level, to do those sort of high touch things that can't yet be automated to help increase the affinity that someone feels for your brand and generate some of that reciprocity with those prospects and customers.

1:13:59Love it. The book is Creating Superfans, How to Turn Your Customers into Lifelong Advocates. Brittany, it was awesome to have you join us. Thank you so much for having me. It was great talking to you both. Thanks, Brittany. All right. I thought that was great. Brittany is great. She has a podcast as well. that's really entertaining that I listen to periodically. Welcome to the after show, Ben. I think it's safe to say you enjoy traveling quite a bit now and meeting lots of other people. Wow. Let's slow down here. I enjoyed meeting lots of people. Do I enjoy traveling? Not that part. Hotels, no good.

1:14:34Airplanes, no thank you. Getting back home and sleeping in my bed and actually having a good night's sleep for the first time in however many days was great, but all worth it to spend time with lots of like-minded people at all of the different things that we've been at recently. Okay. So let me amend what I said. So the travel, maybe not so much, but you enjoyed the people and the destinations. I mean, our trip down to Southern California was pretty, it was incredible where we were. The weather was fantastic. And we had a chance to actually had a meetup for some really interesting people, interesting collection of people, people that were at the conference that listen, like our good friends in the industry that listen each week, but we also had some other guests just come and join us.

1:15:12A new friend of ours flew down from Seattle to meet with us, which is pretty cool. We also ran into Mayor Stadman before their breakfast, which is pretty fun to run into Mayor. Yeah, that whole event was very cool. I met everybody. Everybody that I know from our podcast and from the internet and from Twitter, everybody was there at that conference. I met a lot of people in real life that I have known on the internet for a while. That was a really cool experience. And then when we were in Toronto, that was also incredible. The CFA thing that everybody just listened to earlier in the episode, but then we also had the Rash Reminder meetup in Toronto, which was also incredible.

1:15:52We'd have room packed with podcast listeners and hearing from everybody the impact that the podcast has had on their thinking and their life and their decisions. It's kind of surreal to hear that kind of stuff. Yeah. And like I told many people, the consistency of the audience, because we've had five of these now and just the interest level, the kindness, the love of learning, the love of sharing, just the love of coming in and sharing this common bond with people. It was a pretty incredible event. We must have had at least 30 people in Toronto. Yeah. At least if you count people coming and going, it was probably more.

1:16:29Probably more. Maybe 30 at a time for a couple of hours. Yeah. Super fun. All right. Do you want to dive into these reviews that we got on Apple? Sure. Yeah. Jay Snedeker from the United States says that the podcast is fascinating and insightful. I discovered Ben through his YouTube channel and quickly rushed to listen once I heard there was a podcast. I have not been disappointed. I work in wealth management in NYC where many professionals are unfortunately solely focused on investment returns and miss out on other valuable components of advice that Ben and Cameron address almost every episode.

1:17:01I just finished episode 267 on the expected cost of pessimism and the value of storytelling, I will be sharing with all of my colleagues. This podcast is true financial education. Thank you. Very nice. Thank you. Cool. Keep going. I'll do the LinkedIn ones later. Okay. Bockcast from the United States says, excellent information and discussions. Great resource for a wide variety of topics and from financial planning to living a happy life to nerdy discussions on investments. I really appreciate Ben and Cameron's scientific and humble approach to new information and subjects, their curiosity and willingness to suspend And preconceived notions instead of just lecturing the audience is a breath of fresh air in the podcast space.

1:17:40PNWMatt, also from the United States, says, Fantastic podcast. The hosts deliver a wide range of practical, high-quality interviews and summaries. I'm consistently amazed by the caliber of their guests. I listen to a lot of podcasts a couple of hours a day. And this is the only one where I immediately move every single episode to the top of my playlist. I can't recommend this podcast enough. Very nice. Very nice. Words people write about us are just, like I said earlier, It's like surreal. It's crazy. But I will agree with that last comment, the caliber of guests. It's been great. On LinkedIn, I heard from some pretty interesting people.

1:18:11Shilash from Toronto reached out saying, great podcast. I've been a longtime follower. Helped me transition from being anxious and unsure about financial planning to being relatively competent and confident. As Chris Hadfield stated, I've not only learned about financial management, but life lessons and how to plan for a good life. Thanks to your podcast covering a range of topics. Guests have been awesome top of the advice which we give. I've been meaning to share this with you for some time, but thanks to your nudge and recent podcast, I now send a long overdue thanks and appreciation. Keep up the great work.

1:18:44Brian from Windsor reached out, said that he was at the CFA event and enjoyed it. Alex from Montreal reached out, saying he's a huge fan and I have great admiration for the work that we and the team do. Side note to that, Alex asked to connect to talk about the industry, which is always an open offer out there. So we're going to be talking soon. Fatir from Mississauga. Thanks for connecting. Love the podcast. Sanjam from San Francisco. Thanks to the amazing podcast. Big fan. Watching religiously over the last three years. Farouk from Edmonton. New listener. Founded via your conversation with Plain Bagel.

1:19:19I was captivated by the recent episodes. So I decided to rewind the tape back to episode one. They're on episode 20 now. Nathan from London, who was also at the meetup that we mentioned, been a dedicated listener the past three years. And I've heard you mentioned several times you enjoy connecting. So we did connect and it was great to meet Nathan. Why don't you mention this email we got, Ben? Yeah, I just wanted to real quick before the email, you reminded me of in the Rational Minder community, there's a section where people can introduce themselves. And somebody did that recently. And I just wanted to read out the last part of what they said.

1:19:57So why they join the community and what they want to learn, all that kind of stuff. But what is their favorite Rational Mindor episode? I just thought this was interesting and very cool. Their favorite podcast episode is episode one, the first one. We always talk about this, how it's always crazy to think about how people go back and listen to the first episode. Their favorite episode is episode one, because it was cool to listen back to the origins of the podcast and to see how it has grown so much into the community that it is today. That was cool. Then special mention to the episode with Cliff Asness, episode 99, which yeah, that was a great one.

1:20:31And then they also wrote a thank you. I'm so appreciative of RR, the podcast, this forum, and the community. It truly feels like a mecca of investing with so much knowledge, quality discussion, and filled with so much warmth and respect among members to boot. I've already tremendously benefited from this community and have spent hours and hours reading through many rich discussions. I haven't stumbled upon a place quite like this before, but I'm really glad I did. Thank you. It's nice, right? Mm-hmm. It's true. You see that when you meet these people, like from London to Ottawa to Toronto to California to Montreal, it's such a persistent trait that you see.

1:21:09Yeah, it's impressive. Okay. The email, hi Ben Cameron. I've been a listener for a few years now and have been meaning to write for a while. I want to say thank you all so much for what you do every week. I believe that what you provide listeners is a real service to living a better financial life and a better life in general, the material and guests you have had on the podcast about happiness and money have made me realize that actually spending more money now is something I should do. Having always been a super saver, you'll have helped give me the confidence to relax my savings rate and spend more money in the present while also feeling safe and confident about my financial future.

1:21:42If I lived in Canada, I would love to work with you guys at PWL. Thanks again and take care. Very cool. Coming up next week is the episode that we recorded in California with Hal Hershfield. Al killed it. It was so much fun being there with Al. Yeah, it was great. And then in the coming weeks, we have Professor James Grubman coming up. And also Shane Parrish will be joining us for a full episode talking about his new book, Clear Thinking, which was just released. I also want to mention again, we don't mention it very much lately, but the 23 and 23 reading challenge is still going on. Of course, super easy to join.

1:22:17You can visit rationalreminder.ca and click on the tab if you want to join. The books are just, I don't know the current totals, but the people are just crushing, crushing books in there, which is so good to see. I had a number of people actually at the event in Toronto mentioned that they do appreciate the book challenge and the book reviews that we do. And people were really writing down actively the book recommendations that we did give. So there is interest in that. It kind of puts pressure on to make sure we choose good books. But I've heard that a number of times over the past two, three weeks as we've been meeting lots of listeners.

1:22:50But it's been super weird few weeks, right? With the travel and like, we're kind of out of sync on us episodes and guest episodes. And so forgive us, we'll be a little bit messy for another month or so, I think, before we kind of get back into our regular routine. But it is weird for us with the travel in and out of the office and both of us have had other travels too. So it's been a pretty incredible five-week run here. Anything else, Ben, on your mind? No, I think we're all good. All right. Thanks everybody for listening.