Episode 281: Lifecycle Asset Allocation, and Retiring Successfully with Justin King

25:23Everyone is different. Every decline is different because the story is always different. And you've got to be able to live with that. Keep in mind, the data set we're looking at is massive, both in its time series, but also in the countries and events. Think of the world events that have occurred in the data series that Scott's using to do this modeling. You can't even imagine. We always hear the word unprecedented get thrown around, but you look at what's happened throughout history. There's a lot of wild stuff been happening. 2 ,500 years, you said, of country month return data. That's a huge assembly of returns from a whole bunch of different countries and lots of major events and obscure events that would have affected people's psyches have occurred in that time period.

26:03But in any case, people have to be able to stick with their portfolios. But if that performance gap is 4%, I'd be curious to ask Scott if they can model what is the break even on the behavior gap in stocks that would make adding bonds to the portfolio attractive? If investors expect to lose 2 % to the behavior gap in stocks, how much would that earn bonds and allocation in the portfolio? Assuming that's assuming, of course, the bonds don't have a behavior gap, which isn't true. So you have to model a relative behavior gap. It's something to think about. Now, financial advisors do seem to increase participation in the stock market and to boost the share of stocks and investors portfolios.

26:44That's worth considering. We just talked to Ioanni Lanema about his research on this. Trust in a financial advisor may also reduce the perceived riskiness of risky investments like stocks and allow risk averse investors to earn higher expected returns with an advisor than they would have on their own. And then again, Ioanni also talked to us about how longer duration client relationships with a financial advisor, which they use as a kind of proxy for trust in the relationship, increases client's willingness and ability to take risk with their investments and not bail out. And they use the great financial crisis crash as an event study there.

27:23So it's common to hear people say like, oh, you don't need financial advice because everyone should just buy index funds, which is kind of true, but a lot of people don't do that. but it is worth saying that like financial advisors are not always a solution it's important to watch out for high fees conflicts of interest which can easily offset any of those benefits so i mentioned the limitation on the fixed income series that they were using also equity factors like this is just using cap weighted equity funds but what would adding you know a value portfolio into the simulation look like my guess is value stocks would look pretty good but I don't know.

28:02Also, inflation-protected bonds could improve the outlook for adding bonds to a portfolio. But in Canada, those are being phased out right now. So I don't know how interesting that actually is as a point of discussion. And they've got tax inefficiency quirks too. But anyway, worth mentioning. That's mostly it. So contrary to traditional portfolio diversification and lifecycle investing advice, empirical evidence drawing on data from a huge survivorship bias-free sample of stock and bond returns suggests that a portfolio consisting of domestic and international stocks with a home country bias for non-US investors dominates balanced portfolios, age-based strategies, and target date funds on accumulation, consumption, and bequest objectives.

28:43Now, this research has definitely made me think a lot about asset allocation over the life cycle. It does have some limitations that I just mentioned. It's looking at government bonds and cap-weighted stock indexes. And it's also ignoring the fact that human investors still need to deal with the constraint of our own behavior in the face of market volatility and drawdowns. But overall, I think some pretty interesting stuff to think about. On behalf of the listeners, Ben, that was awesome. I'm glad to do that. So I know people are going to love that segment. People, it's worthwhile going back and listening to the past episode with Scott Cederberg, because that does dovetail into this beautifully.

29:21And you set up our upcoming conversation with him perfectly. This is a great and fascinating topic. It really is. Like the title of the paper says, it's challenging the status quo. It's really asking that question of, is it sensible for people to reduce their allocation of stocks over the life cycle? It may not be. Love it. Okay. Shall we go on to this week's Mark DeMarcus segment? Let's do it.

29:48Mark, what are you bringing for us today? Today, we're going to talk about insurance. We're going to talk about different types of insurance and we're going to talk about whether you should own them personally or inside your corporation if you're a small business owner or a incorporated professional. Love it. Great question. I didn't get the memo about the Mauve hoodies this morning so I wore my blue one. I'm upset. I do have a Mauve one I can wear next time if you give me a heads up. That's okay. You look good. Oh thank you. We'll do a better job of coordinating our wardrobes. There you go. Good.

30:18So let's get into it. So life insurance, disability insurance, and critical illness insurance are the three primary types of insurance outside of like property and casualty and liability insurance and that type of thing. And when you have a corporation, there are certain situations where you might want to hold these types of insurance in your corporation and other situations where you might want to hold them personally. So I just want to explain a little bit about the differences in the types of policies and why you might want to hold them in your corporation or personally. So before we get into the actual individual types of insurance, the reason you might ever want to do this hold it inside a corporation is because you can take advantage of paying the premiums using pre-tax dollars, or at least dollars that have only been taxed by the corporation, usually at a small rate.

31:02So if we think about somebody who's in the top personal tax bracket, has a corporation, and let's say their life insurance premium is say$100 a month, if they're in the top tax bracket, for them to earn$100 after tax personally, depending on the province, they're going to have to pay themselves, let's call it$200 personally, pay 50 % tax on that ballpark, and then they're going to have$100 left over to pay the insurance premium. But if your corporation owns it, your corporation generally is going to have to earn a lot less. If you're getting small business income that's taxed at the small business rate, your corporation might only need to earn, say,$110 or$115, pay the tax, and then still have that same$100 after tax to pay the insurance premium.

31:42So you're taking advantage of pre-tax or cheaper dollars to pay these premiums. Now with life insurance, that's usually a good thing. Your corporation would usually own the life insurance policy. Your corporation becomes the beneficiary of that life insurance policy on your life as well. And when you pass away, if that insurance payout takes place, it'll go to your corporation. But there's a mechanism there called the capital dividend account. And this is not like an account you open at a bank. It's a notional account, meaning really it's just on paper. And the life insurance payout, most of it or all of it, depending on the type of policy and a couple of other things, can come out of the corporation to your survivor tax-free.

32:19So even though you've used these cheaper corporate dollars to pay for those premiums, the end result is still, for the most part, a tax-free death benefit out to your beneficiaries. So in most cases, you would want your corporation to own your life insurance policies. The only downside there is it can take a little bit longer for your survivors to get the actual payout. Like if you own it personally and you pass away, the survivors can access that death benefit really, really quickly. But if it's owned by your corporation and your corporation has to go through the probate process and change directors and everything, that can take some time.

32:48So in cases where there's other assets that can be accessed by a spouse, like if you have maybe a TFSA that you're leaving to them or some non-registered investments or cash, and they're going to be okay waiting for that death benefit, then life insurance can be owned by your corporation and that's usually a good thing. So the second one is disability insurance. And disability insurance is a little bit different. So with disability insurance, if you become disabled, your disability policy is going to pay you an income. So it's not usually a lump sum. It's a monthly income. And if you own it personally and you pay the premiums personally, if you make a disability claim, the income that you receive is tax-free.

33:23And that's one of the major benefits. If you have, say,$7 ,000 a month in disability income and you've been paying those premiums tax out of your own pocket, not the corporation's, then that$7 ,000 a month is tax-free. That's ideal. But if your corporation owns that policy, or if your corporation pays the premiums for that policy, then it's usually a taxable benefit. And so that's often suboptimal. I mean, if you've got, let's say,$7 ,000 a month, same thing. You've used those cheaper corporate dollars to pay for those premiums. But when the money lands, when you make that claim, it's fully taxable.

33:58Now that might be okay. I mean, the thing is, it's a bit of a balance. It's a bit of a trade-off. Like you're using these cheaper corporate dollars. You're hoping you don't actually get disabled. You're hoping your best case scenario is you never have to make a disability claim and then you were able to pay for it with cheaper dollars. But at the end of the day, it's there to protect you from something and you probably don't want that income to be taxable to you. So generally speaking, you don't usually want your corporation paying for the disability policy. Make sense so far? Pretty straightforward.

34:22Gotcha. Interesting to think about it. I'm just thinking with a disability when you're paying personal tax on income from the corporation so that you don't have to pay tax on a possible disability claim. But it's kind of asymmetric. If you had to make a disability claim, the amount of tax you would pay, if you had it in your corporation as opposed to personally, would be much larger than the tax you'd expect to pay by paying the premiums personally. Well, not only that, but you can only insure yourself for disability up to certain percentages. And it depends. Just to give you an anecdote, I have a client.

34:51He makes about$350 ,000 a year. he's a salaried physician, the most we could get him approved for was$14 ,000 a month. And that's about, call it half of what his actual income is, but that's tax free. And so that actually gets him relatively close on an after tax basis to that$350 ,000. But if his disability policy of$14 ,000 a month, if that was taxable, then the gap between his current after tax income and the after tax disability income, if you were to make a claim, is actually pretty significant. So especially for higher income earners, having that disability benefit be taxable is going to leave a much larger income gap after tax.

35:27And then the last one is critical illness. The answer here is maybe. Do you want your corporation to own the critical illness policy? The answer is maybe. So life insurance, probably yes. Disability insurance, probably no. Critical illness, maybe. And I say maybe because often it depends on the type of business and the reason that you bought the critical illness policy. Again, I work with a lot of physicians, and most of the time, they're just a single shareholder of their own medical corporation, depending on the specialty. They don't often have a ton of overhead. Like if something happens to them, and they get a critical illness and need to make a claim, it's usually them personally that needs that money.

35:59It's not their business that needs the money. It's them personally that's going to need access to those funds. And that's a tax-free payout as well. In that case, if you own that critical illness policy personally, you pay the premiums personally, and you get paid out, it's after tax. So it's tax-free. But there are some types of businesses where what you're insuring against is the concern that a key person or a key shareholder or a key employee, if they get a critical illness, it's actually the business that might need an injection of capital. Maybe the business then needs to go out and hire headhunters to replace them or something like that.

36:27And so in those cases, it might make sense for the business to actually own the critical illness policy. And where there can be a disconnect is that if you actually need that money personally, not the business, but the business owns that policy and gets the payout, the money goes tax free to the corporation. But then for you to access it, you have to pay a dividend to get that money out and that becomes taxable. So you want to think about the ultimate destination for where that critical illness payout needs to go before structuring the policy either personally or corporately. So that's about it.

36:54It can get a lot more complex. There's a lot of other riders and features that you can add to many of these policies that might change some of the math or change some of the strategies on them. But I think at a high level, if you're thinking about insurance and you have a corporation, life, probably yes. Disability, probably no. Critical illness, it depends. And in all cases, you have to think about what your objectives are. Because even in the life case, if you need immediate liquidity at death for whatever reason, you could even have a small policy for that reason personally and then the rest in a corporation or something like that.

37:21I have a client who's done exactly that. the majority of the larger life insurance policy is held by the corporation and they've got a small one personally for the reasons you just described. That's a good point. Interesting. You got to have like a framework to think through it. What are you trying to accomplish? What are the tax implications? And then you can come to a decision from that. That's exactly it. So it's always in financial planning. Most of the time it depends. I think that's a reasonable framework for at least a starting point on thinking how to structure things, but it's going to come down to your personal circumstances.

37:48Cool. Good segment. Good stuff. Love it. Great. Thanks, Mark. Thanks, guys.

37:57All right, Mark, as always, it was awesome. Great to have him on. Let's go to our quick look back at a past episode in 60 seconds or less. So Dr. Anna Lemke was our guest, Ben, back on episode 177 back in November of 2021. She's a professor of psychiatry at Stanford and author of the excellent book, Dopamine Nation, Finding Balance in the Age of Indulgence. So dopamine is a term that we've all heard of, but what is it? How does it affect us? How does our body regulate it? This is exactly why we invited Dr. Lemke to join us and she clearly explained how our bodies regulate pleasure and pain and the role that dopamine plays in that balancing act.

38:36We also discussed what causes gambling to be addictive, how addictive is social media, whether working can be an addiction, and are there any positive attributes to addiction? And then she shared with us some strategies on how to protect yourself from the effects of this drive for dopamine, including how to stop addictive behaviors. At the end of the conversation, we actually talked about the impact that a dopamine-rich world has when we're making long-term financial decisions. And she suggested investing in the stock market is more like gambling than ever before. So this podcast is about decision-making for the long term and understanding the role of dopamine in that process is so important.

39:14And that was Dr. Anna Lemke back on episode 177. Oh, she was fantastic and the book is fantastic. So speaking of books, let's pivot to this week's book review. It's on the Retirement Cafe Handbook, Nine Accelerators for a Successful Retirement by Justin King. It's a bit of a backstory. As listeners know, I was in the UK a year ago, so the fall of 2022. And I had a chance to meet Justin, who is an advisor over there. and he told me about his podcast and invited me on actually. So I was on his podcast, The Retirement Cafe podcast, episode 169 in February of this year. And he decided to write a book, his second book that takes some of the lessons from that podcast.

40:02And he turned it into this workbook, which is really well done. And the book just came out in the fall of this year. So Justin's based in Christchurch, England, and is a chartered financial planner, registered life planner and created the firm MFP Wealth Management where he works with clients who are approaching or in the retirement stage of their lives. He's insanely curious about helping others achieve fulfillment in life and you'll hear that in this conversation with him. Justin's a pretty fired up kind of guy and really makes considering and planning for retirement really exciting. He's also the co-author of the book Ready, Steady, Retire, Plan Your Way to Success in a Redefined Retirement, and also has a YouTube channel, Justin underscore King.

40:47So he believes the retirement landscape is changing. We're living longer than ever, which should be great news. But instead of grasping all the opportunities a longer retirement has to offer, many people are just drifting into that stage of life ill-prepared for the amount of time that they hopefully have ahead of them in retirement. And the truth is a successful retirement won't happen by accident, which is why he wrote this book. So here we go. Let's go to our conversation with Justin King.

41:18Justin, welcome to the Rational Reminder podcast. Thank you very much for having me. Great to see you again and congratulations on your book. Thank you. I think the book is actually an incredible resource for anyone thinking about their retirement. Off the top, why did you write the book? I've had a podcast going out for the last four and a half, five years called the Retirement Cafe Podcast. And I realized that the more and more people I talked to, the more and more information that was out there. And then I suddenly realized that, you know, if you were coming to this fresh and you were suddenly like, oh, I'm thinking about retiring, I think I'll hook into this podcast.

41:51That sounds useful. Oh my gosh, four and a half years of episodes, how the flipping heck do you get through all that and then distill down to the bits that you want to know about. So wouldn't it be useful to have, in essence, a handbook that corrals all that information and that you could pick and choose the elements that you thought were useful? And then maybe from that, dive back into the podcast and listen to those experts that were giving you value. That is a very smart idea. Thank you. We also have five years of podcast episodes that I'm sure are very overwhelming for people to dive into.

42:24But we have not written a book. Well done on that. Can you describe the pyramid of the four levels of retirement preparation? I think you're referring to the overwhelmed and the drifting, participating and thriving in retirement, which is, of course, I think what we really want to be. We all want to be thriving and thriving in any part of our lives, I suppose. But I'm especially addressing this period of retirement to thriving. I think the overwhelmed thing that we all can identify with maybe at some point of our lives of just kind of going, you know, retirement, what on earth is that? Maybe in our 20s, we were also thinking of like, it's so far away.

42:58I don't even want to talk about it. Sadly, that feeling does carry on for a lot of people because, you know, it's complicated. I've got all these different types of retirement plans, pension schemes. What's the government going to give me? I don't really understand how that works. They seem to keep changing the rules. Life busy enough for me to have to try and deal with something that is hopefully 30 years away or 20 years away and then suddenly 10 years away. And then, oh, my God, I'm there. So I think people do get overwhelmed and then just kind of go, oh, it's a bit too complicated. and then we want them to move into that.

43:31Well, some people kind of drift along. I'm in my scheme, a workplace scheme. I'm in something. So I drift along with the river and as I move company and I get into a new scheme and I'm sure that's enough and I don't really pay much attention to it. I know I'm in that default investment fund that someone's kindly chosen for me on my behalf and we drift along. We meand along with the river. I want to go, you know, hold on. Let's take a bit of control. let's move above this line and really take some action. And then we get into participating, we kind of take some thought process about it. We kind of start to understand what our number is, what do we need to identify, and maybe when are we going to choose to retire?

44:10But I want to get people over that, this is the good enough line. I talk about Apple, if Apple had said the iPod was good enough, someone else would have invented the iPhone. We want to get right, what would be an amazing retirement? I've got all the bits in place, I've got all the things I should consider to make sure that I really thrive in that part of my life. I talk about this, of course. This could be a significant part of your life, maybe even a third of your life. I've met people now who've retired for longer than they were working. You mentioned thriving. I thought you had a very good description of the key items that matter in a successful retirement.

44:46You boil it down to vitality, choice, and joy. Can you talk about that? I think it was listening to all of these wonderful experts who, I was trying to go, okay, so how do I actually separate them out? Because everyone has got a different angle, I suppose, on what an amazing thriving retirement would look like. And of course, for some, it's all about health, the vitality aspect to make sure that we are healthy for as long as possible. What's the science around that? What are the key considerations? For some, it's just the main focus is all about the money. Have I got enough money to live on through that period of time?

45:20Or do I continue working? Or do I take up something else and be entrepreneurial in that point? The vitality aspect is hugely about the importance of making sure that that period of our life is great. The choices of the ability to do things. And of course, joy, let's make sure this is a wonderful, wonderful time. And then obviously we've got these different levers as well to help kind of support the vitality choice and joy. Love it. So your book focuses on the nine accelerators, as you call them. So before we get into them, and I want to go through them quickly, where did the idea of non-accelerators come from?

45:54All these different people were saying different stuff to me. There's not just one thing, is there, that is going to help kind of accelerate us up to make sure that we get to this fulfilling retirement, which is one of my end purposes. How do we get people to that point? And then look at what are the things that we can do, we can actually take action on, which is what I've called the accelerators. How do we make sure that what are the key components? If we were given the jigsaw puzzle to get to that fulfilling retirement, what are the key accelerators that would get us there quicker? All right, so let's go through them.

46:27I want to go through them one by one because they're all very important. Number one, talk about redefining retirement. It's not what our parents thought retirement was and our grandparents. This is a significant shift, isn't it, of getting your pension and maybe not being here five years later. As I mentioned before, you know, it could be possibly 30 years. So really just start to understand what would you like your retirement to look like? Forget what the magazines and the advertisers, the couple walking down the beach, what the advertisers, you know, holding hands, et cetera, say that it's all going to be about.

47:02You know, what is it? Redefine what your retirement is going to be like. How do you find out what's really, truly going to nourish you? Okay, the next accelerator. Can you talk about having a purpose? Often people can think of, I'm retiring from something. Okay, I want you to retire to something. Actually try and identify what is really going to be a wonderful thing. I talk about in the book, just imagine you are 90 years old and you're sitting in your rocking chair and you're maybe on your veranda and the sun's coming down and you're supping your favorite cocktail. And you're just thinking, you know what?

47:36Wow, what a period of life this was. How fantastic would that be? You know, if you were going to bed tonight and you turn out the light and you just went, yeah, I really, really did had a purposeful retirement. You know, I really nourished myself. I really attained the things that I wanted to do. Number three, it's never too late. So many people have inspired me. I always think about the people who start businesses in their 50s and 60s and 70s. They become entrepreneurial. They take up new skills. There was one lady we got in the UK called Iron Gran, Edwina Brocklesby. In her 50s anyway, she said to her husband, that she was going to run a 5k.

48:16And he was like, you can't even run for the bus. And then before you know it, throughout her retirement, she's doing Ironman competitions. Amazing. As I say, never too late to take up something brand new. You know, if you've thought of learning a language or thought of learning a new skill, taking up the piano, doing art, whatever it is. I worked with somebody who did some really good conversation about what is it that you haven't yet got to do. And she told me that she always kind of thought she'd like to be a nurse. And she's telling me this in her 60s. She wanted to do that in her 20s, but she had a family quite early on, large family, four or five children, and that had taken up her life.

48:56And we worked into her life, into her retirement, how she would now start caring for others. All right, can you talk about the science of living better for longer? Well, the science is really, really helpful now. There's so many people who are real experts, and it's available to us all over the internet now with YouTube and podcasts, et cetera, and of course books, about how we need to stay stronger, we need to nourish ourselves, we need to, what a healthy diet is. All the information is there. The living longer, what I also wanted about the living longer, this comes back to the vitality and the self-care, is if we can really establish and understand what will give us that vitality for longer, There's no point living another 30 years if it's really painful.

49:43Now, I appreciate there's an awful lot of people who are going to suffer stuff and there's little that can be done. But if there is things that you can do to make sure that you're living longer with health, then get the knowledge and start to implement on those things. The classic thing that I'm a great fan of is we know the significant muscle wastage as we get beyond 50. I am beyond 50. So I spend an awful long time every day trying to go lifting weights because we know that people have falls and they have injuries and then they get laid up in hospital for three or four weeks and then they really never recover from that.

50:21We cover, we had lots of experts talk about that in the book, in the podcast, and I've redefined it in the book to make sure that we understand this and then hopefully take action. And the next one's kind of related, taking control of your health and well-being. So it is that kind of flips over, doesn't it? So first of all, you've got to understand it. And second of all, you've got to implement it. And this is the classic thing of 20 cookbooks in the kitchen and you've never cooked a meal. Okay, we've got all the knowledge. That's all out there for us in the science. Now, what do we need to do about it?

50:50How do we absolutely take action and do something? And it is more than just a brisk walk. A brisk walk is brilliant, but it is more to it than that. Because there's all types of aspects to your health, of course, which is the social aspects of loneliness, being part of community, being part of something else. This comes back into the purpose aspect. Let's make sure that we're nourishing the whole of your life, not just the physical aspects of it. What is the big D? Dementia. The one we don't want to talk about, really. And we all probably know someone who's been affected by it, and we are kind of all terrified of it, aren't we?

51:28And there's been great steps, huge steps made into dementia research about what can be done to try and stave off the big D if it's coming to you. I've spoken to lots of researchers and people can live with dementia for a long period of time and relatively well. It's not a death knell immediately of lifestyle, etc. But it is something that we can all worry about. There are things that we can try and do to stave it off. And also if it does appear for your loved ones to understand it and for you to understand it. So again, knowledge here is power. Number seven, planning for a 30-year retirement. Now, I always joke, the easiest thing as a financial planner would be, of course, if we all had a date stamp, we knew our sell-by date.

52:15Because that 30 years, well, first of all, have we got 30 years? So that's the big question. We may only have three, but we've got to somehow plan for longevity. We've got a plan for this scenario where it could be possibly 30 years, it could be more, as I say, people who've retired for longer than they've worked. But that is the real tough puzzle of how do we counter inflation? How do we make sure our savings and investment lasts for those 30-year period? Which is a perfect transition into the next point, the role of investing. You guys cover this huge amount and are real experts at it. again, I'm trying to get to the point of understanding where the biggest danger I feel facing any retiree for a 30-year period is our capacity to make incorrect decisions is huge.

53:05And once you stop working, your ability to recover from a mistake gets less and less. Therefore, you owe it to yourself and your family to start to develop some understanding with advice or without advice of what would make a successful investment experience. Because you make a mistake at this period of your life, it could be absolutely devastating. You're trying to counteract possibly the biggest fear, the biggest unknown, which of course is inflation, prices moving. You're no longer possibly getting an increasing earnings that you've had throughout your career. You're trying to make sure that money lasts for as long as possible and possibly for your partner as well.

53:50Well put. And the last one, care and the end of life. It's probably not the top topic that everyone's really kind of looking forward to in their retirement, but it's a big thing. There's two aspects of it. Lots of people say, oh gosh, I forgot to put me in a care home. Then we have a line of one-way flights to Geneva here where you, you know, with hand luggage only where you can finish off your days. But it's a big conversation for families. Where would you like to have care if you need it? Is it something most people would love it to still be at home? What's the cost of that? How would you like it to be happening?

54:25And we get down to the actual practicalities of if it happened tomorrow, would you know who to call? Who are the suppliers? Who are the providers? Who are the people around you that your family could know, right? Okay, this is what mum would want. This is what dad would want. These are the people we could call. This is how we would implement a care package, a care system, and also the knowledge that you can hopefully pay for. Can you talk about how people can, as you put it in the book, become the hero of their retirement story? I do believe that this wonderful period of your lives, if you've got to that period where you've got some financial resources behind you, it could be the greatest opportunity that you've ever had.

55:07Maybe your children now have left home. Maybe you've now paid off the mortgage. And you go, oh my gosh, the freedom that I've created for myself to now live into whatever dream that I've got, to be purposeful, to be useful, to be a contributor, to take on all those new skills, those new ambitions, those new projects that you never possibly had time to do before. If you were writing yourself into that wonderful movie of amazing retirement, What would that hero do? The way you describe that, Justin, is exactly why I like the book so much. The book is just so full of hope and optimism and excitement about this period of one's life.

55:45So congratulations to you. You called it a handbook. What's the best way for a reader to get the most out of this book, in your opinion? I mean, obviously, just flick through it and go, OK, so where am I? Am I overwhelmed? Am I drifting along? Am I participating? What would a thriving retirement look like? And then maybe answer some of the questions, kind of the life planning questions. of, we'd mentioned before, you know, if I was sitting in that rocking chair and just then work backwards. I always think about, it's a mental model of backcasting. You know, if you were at the top of the mountain and looking back down it, seeing how you got there, that's kind of easier than looking up the mountain, trying to work out how to get to the top.

56:21So imagine yourself in that rocking chair, just going, you know, what are all the elements that we want to make a fantastic retirement? And then dip into the book for the bits that you're thinking, this is the bit that I actually need to consider more. Maybe I've worked a lot at the money aspect, but I haven't really thought deeply about what a truly purposeful retirement would look like or the health thing. I can see that's really important. Maybe I should invest as much time and effort as I've done with the financial planning into my health to make sure that when I get there or throughout that period, I'm as well as can be.

56:53Love it. The podcast is called The Retirement Cafe and the book is The Retirement Cafe Handbook, Nine Accelerators for a Successful retirement. Justin, awesome to have you on. Thanks for joining us. Thanks for having me. Thanks, Justin.

57:11All right. That was fun. That was a good conversation with Justin. Yeah, it was good. It's kind of fun having the authors come on like that. For sure. Get a chance for them to have their books get greater exposure too. Is there anything up lately in your world? I've been riding my bike a lot, which is not something that I expected to be doing at this time of year, but it's been clear. It hasn't been snowy here. We had a bit of snow, but it all melted. The ground's actually nice and firm. It might sound ridiculous, but I get nervous about the bears. I saw two bears this summer riding my bike. They're not scary.

57:44They're not intimidating. They don't do anything, but it still makes me nervous. I'm kidding. They could. That's the thing. Anyway, I was always super nervous about seeing a bear. Both times I saw them, they were cubs. And so I was like looking around, freaking out. I turned around and went back home because I was scared the mom was going to be hiding around the rock when I turned a corner or something. So anyway, this time of year, no bears, some really nice bike riding around the trails where I live. So that's been good. And your basketball injury is healed, it looks like. Oh, in my eye? Yeah.

58:15Mostly healed. A little rough last week. Yeah, I was looking a little rough. It happens. I've been playing basketball three nights a week. Really? Three days a week, two nights. And then on Sundays, I have a league on Sundays and I play in just pickup runs on Tuesdays and Thursdays. I never would have guessed, I don't know, three years ago that I would even be playing basketball because I'd hurt my back before the pandemic and my hips were super sore. And I was just like, I'm done playing basketball. And then I slowly got back into it a couple of years ago. And now I'm feeling great. Bodies are funny.

58:46And what percentage would you say you're back to compared to when you're playing in the States? It's a tough question. I'm not training nearly like I was then. Two weeks ago, I had a pretty good dunk in a game. That's something I never would have guessed would happen. I didn't do that very often in college, but I'm also at a different level of basketball. I don't know. It's hard to answer the question. I'm much smaller than I was. I was like 40 pounds of lean muscle heavier when I was playing. My former self could probably beat my current self up. I'd like to think I've gotten better at basketball as I've continued to play over time.

59:21But it's still pretty competitive. The league I play in is super competitive and the runs that I go to are also quite competitive. Awesome. Do you want to take a crack at this first review we got? We got Fred Raynaud from Canada and they said, best evidence-based finance podcast. Great range and depth about all things finance. The hosts are based in Canada, but most of the content should be relevant to an international audience. I'm a long-time listener, and I've learned so much from the Rational Reminder. Over the years, you're doing the public a great service by providing digestible information anchored in an evidence-based approach.

59:53Thank you. Very nice. We also got a couple of emails to our inbox. Hi, Ben and Cameron. First, thanks so much for the podcast. So much popular media and personal finances marred by excessive self-promotion gimmicks or simply bad information. RR is refreshing in its rigor and depth, but the show is still accessible and never boring. You've spoken repeatedly about landing many of your renowned guests simply because you're willing to ask them, and I wouldn't normally reach out like this, but with those comments in mind, why not? I'm trying to make a career change. I've been taking care of relatives the past few years, and I want to get involved in financial services, but the past and the industry seem less clear for people who don't have a more traditional route, such as a finance degree or an MBA.

1:00:35I'm trying to make a career change. Do you guys have any insights on this or experiences with handling, guiding career changers at PWL? I don't see many resources out there on this topic. I'm not sure where to look for this info and what's working or not for people in this kind of position. I'm not sure if the answer is just to bite the bullet and take what I can get with one of the industry giants, or if it's realistic to look for a more fitting role in a smaller local firm. I believe you both had fairly traditional career paths yourselves, so no worries if you're not familiar with this aspect of the industry.

1:01:07This might be a better question for the community forum, but I figured it wouldn't hurt to ask you two thanks and best wishes. and they asked me to withhold their name. So I've reached out and going to be talking to them shortly to see what insights it might be able to give. I think there may actually be a topic in the Rashmutter community about something similar. Maybe they can look for that. I laughed while you were reading that, and I want to say why, because out of context, it seems like I was, I don't know, it was an out of context laugh, but in the writing, you skip this part. It says, but the show is still accessible, never boring.

1:01:37And then bracket, not to personal finance investing nerds, at least. I laughed at that, but you didn't read it. So yeah, I did shorten the letter a little bit. We got another email, which again, I edited. It's still pretty long, but I wanted to drop you a quick message to say thanks for everything seven months ago. I knew strictly nothing about investing. It was completely financially illiterate. It was by chance I stumbled on a video. Then I was introduced to Paul Merriman from who I learned about small cap value. And thanks to Paul who discovered your show, CSI. I enjoyed it so much that after that, I started binge watching your entire channel.

1:02:10I learned so much from you from the small invalid premiums to the significance of adding emerging markets, the irrelevance of dividends, glamour stocks, and much more. I just finished watching your video on ESG investing. Videos that particularly stood out for me were investing for beginners, how to evaluate your investment decisions, investing in happiness, including the RR podcast, investing in your financial literacy, and renting versus buying a home. I've never been so happy to rent after watching that. it's always difficult to build trust about someone on the internet, especially regarding finance and investing channels, considering there are so many scams and lies out there.

1:02:47Nonetheless, the fact that you systematically backed up your information with peer-reviewed academic papers made it immediately compelling. Really appreciate all the work and efforts you put in CSI and the RR podcast. I discovered Larry Sweater, who has also taught me so much. talk with him on episode 30, as well as the community webinar. Have been great to listen to. Regarding me personally, I've just recently started investing the right way in a low-cost and globally diversified portfolio of index funds. I couldn't be more thankful for your sharing of investment knowledge. As you mentioned, financial literacy appears to be a distinct form of education that contributes to financial outcomes beyond academic education.

1:03:27I look forward to seeing what you're up to next. I've become a regular viewer of the show, tuning in whenever I can and following every new release. Lastly, below is a link of all the notes I have been taking over the past seven months since I started educating myself about investing. It contains pretty much everything I know to date. Most of it comes from you, Paul, Rob, Larry, and others. Just be warned, it's 45 pages long. It's a result of several months of hard work and in a way a tribute to your teaching. Please share with anyone who you believe could also benefit from the information all the best.

1:04:02I don't know if we're up to sharing that or not, Ben, but it was quite a document that they shared. For sure we should share it. We have it as a PDF, right? I have it as a PDF. We can probably get a link at the PWL domain to host that PDF. We can probably combine that. There's two, right? Yeah, there's two PDFs. Yeah, we can probably combine them into, oh, whatever, either way. We can create links and post them in the show notes. That's super cool. A lot of work. It was well done too. Next week, Dr. James Grubman is here. Fantastic episode. Three weeks, Scott Sederberg, which we talked about, is back.

1:04:34And then in four weeks, it's our year-end episode. Anything else on your mind? Good stuff coming up. James Grubman's a good episode. Oh, those books, Strangers in Paradise and Well 3.0, fantastic books. I knew that was going to be a good episode because I was familiar with his work. I remember both of us were kind of blown away at how good that conversation was. It's a pretty good end to the year with Shane last week and all this coming up. It's pretty cool. Not bad. That's it? That's it for me. All right. As always, thanks everybody for listening.