Episode 297 - Do Stocks Return 10-12% On Average? & Zero to Millionaire with Nicolas Bérubé

25:40I think assuming that the best historical period for the best performing stock market, assuming that's going to persist in the future and basing your financial planning on that, especially when valuations in the US market are suggesting a 3 % real return expectation, I think that's crazy. I think it's ridiculous. I think the people who are repeatedly spouting this information and who don't back down when you present information like this, I think they need to learn a little bit more about market history and valuation theory. The way we do this, because we have to do this at PWL, we give people financial planning advice.

26:15We need to have expected return assumptions. we take the global historical return from 1900 to 2023. We net out the return over that period from valuation changes. Then we account for current valuations using the earnings yield for the different markets that we're looking at, which is US, Canada, and international and emerging markets. Then we combine all that together and that gives us a real expected return for a globally diversified portfolio with a Canadian overweight of 4.62%. real. Or if we apply our 2.5 % inflation expectation, that's a 7.24 % nominal expected return, which is a lot different from 10%, but I think it's a much more reasonable estimate.

27:01The other thing I think investors fail to remember or understand is that it's actually really difficult to just capture the market return as an investor. We're talking about index level performance over certain periods. And yeah, fees are maybe near zero now for do-it-yourself investors using broad market ETFs. But humans are still humans and they're subject to all sorts of biases and behavioral errors. So as an individual, unless you're incredibly stoic and have gone through multiple bear markets and know exactly how you're going to react to adversity in the market, to assume that you're going to capture the return of that market, even if it is 10%, I think a discount needs to be applied there or at least some buffer to the assumptions because investors notoriously and advisors are subject to biases too, but people have difficulty capturing returns.

27:47It's very easy to observe these returns in hindsight and just plot it on a graph. It's much more difficult to capture those returns live in your portfolio. It's interesting you mentioned being a stoic. That's a big message in Scott Galloway's book. We had Scott coming up in a few weeks on the pod, but that is a huge part of his book is to really be a stoic about investing. Yeah, absolutely. It's an important point that you've got fees, taxes, and there's a behavior gap of like, if you look at the data, it's 1 % or higher. One other thing I want to mention, because I see this come up a lot when I have discussions about this online, people say like, well, why are you looking at data for 124 year period?

28:22I'm not going to be investing for 124 years. That's not the point. You don't have to live for 124 years for the return over that period to be relevant to you. The idea is that a large sample of data gives us a more unbiased estimate of the expected return. And to illustrate that, I mean, I think well, one of the data points we mentioned does this explicitly, but if we took the data that I've mentioned for that 1900 to 2023 period, if we split that up into 30 or 50 year chunks and just looked at rolling 30 year or rolling 50 year periods, and then took the average of the returns over all those periods, it would be pretty similar to the full period return.

28:59I've played with that. It's usually pretty similar. But then even more explicitly, the Scott Cederberg research is explicitly looking at 30 year bootstrap samples. and we're looking at the median 30-year compound return. It's a funny thing where people want to discount the historical data because their time horizon doesn't match the horizon of the historical data. But I think that that completely misses the point of why we care about long-term data. The idea is that it gives us a more unbiased estimate of what expected returns are over any period. The other thing I hear a lot of is that the data pre, I don't know what date you want to pick, but like pre 1930 isn't good.

29:40Like there just wasn't a lot of data. And especially prior to the 1900s, right? Like I know you guys have gone back with the one single French company to like the late 1600s and it's one sample. Sure. But one of the arguments there is, well, the data pre this period and pick a starting date to cherry pick from, there's not enough data. It's not good. We can't trust it. So the 1950 period onwards is much more reliable because we had better data. It's more accurate and there's more of it. I don't know if you have opinions on that. I don't know enough about it, but it's a common complaint to hear.

30:08Yeah. We asked Scott Cederberg about that when he was on, and his answer was basically that if you look at the characteristics of the return experiences over the historical periods, because you can split it up by pre or post whatever time period, what their observation was, was that the things like drawdowns and recoveries and volatility and average returns, all that kind of stuff are relatively stable over time. Stuff changes, the world changes, technology changes, and all that kind of stuff. But it's like what you said earlier, Mark, the people are ultimately what are driving asset prices. And that behavior, the asset pricing, seem to be pretty consistent over time because the characteristics of returns are pretty similar.

30:49So we could say that the quality of the data in the earlier period is bad, but it looked a heck of a lot like the data in the later periods. So other than the fact that US valuations have increased, driven their stock returns up. But if you look at other characteristics of the returns, they've been pretty consistent over time. So the idea that the quality was poor back then doesn't seem to hold a whole lot of water. I think if we saw drastically different volatilities or drawdowns or some other characteristic, then we would have to seriously consider whether those data are useful. But the consistency over time, I think should give us some level of confidence that the historical data are pretty, at least good representations of how assets are priced over time.

31:35That's interesting. There's something you said earlier, and I just want to make sure I understood it correctly. Even after adjusting for the unexpected returns in the US, the adjusted returns of the US were still marginally higher on a real basis than the returns of global stocks in those 38 developed countries. Is that right? Yeah. So we took the return from 1920 through 2020, which gave us 5.28%. We netted out the 2 % return. So it's a bit of a different time period though, because then we have 1900 through 2023, the global ex-US return was 4.35%. Okay. Does the unlucky events from certain countries drag that down, right?

32:15Like you're comparing a very lucky situation with the US and basically them avoiding certain catastrophes that other countries did face, but you had catastrophes in Germany and Japan with their markets in China. And that must, I'm assuming, bring down that historical average, right? And so comparing a very single, very lucky market to 38 developed nations in aggregate, where some of those who had high weights in the global markets experienced really, really bad outcomes, drags that average down as well. Because I can just see listeners going, well, even then the US marginally outperformed. But a lot of that I think is because the US got lucky and other countries didn't.

32:51For sure. And Japan, I don't know if it's the best counterexample, but Japan is always the counterexample to the US's success. Because there was a time when Japan made up a huge portion of global capital market as the US does now. And it didn't work out so great. After the sort of 1990, Japan was massive and economically powerful. And then it since then has struggled. Its capital market has struggled for sure. Yeah. So it's not a guarantee that the US will continue to have the good fortune that it's had historically. But yeah, I think that's a great point mark. In that sample of non-US countries that have a lower realized return, there's a lot of stuff that just didn't work out so great.

33:32Great conversation. You guys good to move on? Sure. Ben and I had a chance to chat with Nicolas Berubey about his recently released book, From Zero to Millionaire, a simple and stress-free way to invest in the stock market. Nicolas is an award-winning financial writer and reporter with La Presse, which is one of the largest news organizations in Canada. He joined us from Montreal. Here's our conversation with Nicolas.

34:03Nicolas Berubey, it's great to welcome you to the Rational Reminder podcast. Thank you for having me. Great to see you and congratulations on your book. Thank you. So let's dive right in. What did you learn from your failed options trade before you started studying markets? Well, I learned that losing a good chunk of your money very quickly is not fun at all. So when I started investing in 2010, my big genius idea was that the S &P was going up, up, up, up way, way, way too quickly. and I was living in LA at the time. So the fact that around me, a lot of people were losing their jobs, a lot of people were losing their house.

34:40So it made no sense to me that the market was so quote unquote healthy. And I went online and what do you know, I found a lot of people who thought the exact same thing. So I had confirmation bias really, really quickly in my investing journey. And so, as I say in the book, I lost about$10 ,000 in a matter of months because I bought put options on the S &P. And so what did I learn? I learned that my gut feeling was absolutely not to be followed at all in investing. So really that kind of drove the point to me that the market doesn't really care how you feel. It doesn't care about your macro views.

35:21It doesn't care about what you think the price of oil is going to be a year from now. So the human brain really is not well equipped to be an investor. So you can read about it, but once you experience it, you really tend to not forget it. You also tell the story in the book of a conversation with a friend of yours in a cafe, I think, and he was going through similar thoughts about the market crashing and all this kind of stuff. What do you think people like that and like your previous self can do to become optimists, which I think you've accomplished through your research on this? Yeah, it's really hard.

35:57First of all, being slapped sober by the market kind of helps because there's no way you can hide, right? The numbers don't lie. So that was helpful. Myself, I was never quite an ideologue. I was never like against the Fed or really I had kind of a strong opinion held loosely approach. So the fact that I lost money was kind of a wake up call, but it pushed me to get more and better data. So one of the first book I read after that was A Random Walk Down Wall Street that Burton Melchial that you guys invited on your show. And that book really made an impression on me, the systematic approach to investing, the way forecasting is kind of pointless and you don't even need to know what the forecast is for the next year or two or anything really.

36:45So that really was helpful. There's another book. I don't think it gets mentioned that often. It's a book called Everyone Believes It, Most Will Be Wrong by Morgan Hazel, who was on your show not too long ago. And that book is a collection of his essays for The Motley Fool. It was published, I think, in 2011. And you can download it on Amazon. It's an ebook. It's a dollar on Amazon. So probably the best dollar you'll ever spend. And really what comes across in these essays is an optimist and is a way of looking at the world through a long-term view. So across many data points for human success or for health, for education, for wealth, throughout history, we're on a good trend.

37:32And it's kind of hard to notice that on our day-to-day lives. So Morgan has a way to explain that. I think it's very, very compelling. And the last thing I would say is that you need role models. I mean, I don't think we mentioned it a lot. Imagine if Warren Buffett and Charlie Munger and Jack Bogle, imagine if these people were pessimists. Imagine if every time they opened their mouth, it was like, oh, everything is so terrible. Inflation is going to eat you alive. I mean, how would we go about investing our paycheck every week? I mean, it's hard to quantify, but there's something. So be careful.

38:09The role models you choose, you attempt to keep them for a long time. So be very, very careful. So that was helpful for me. So you had the chance to meet Monish Pabrai. Perhaps tell us who that is and what did you learn from that meeting about investing? Yeah, Monish Pabrai is Indo-American investor. He manages hundreds of millions of dollars. He's been very, very successful in the market. And so in, I think it was 2013 when I was still in LA, I contacted him and I had the opportunity to meet him at his office with a bunch of UCLA students. And he was super kind. He talked to us about his way of investing.

38:49And one of the big takeaways for me was his calm. And I don't know if many people know that story, but in 2008, the fund that Monish Pebri manages lost 67 % of its value in the 2008 crash. And a few years after that, his wife was looking at this old annual report, and she saw that figure 67%. And she went, wow, I had no idea. And she said, I had no idea because you didn't change in 2008. Like you were not angry, you were not stressed, you were not different from the year before that and the year after. And that made a big impression on me. I mean, wow, we like to talk about volatility. And I think sometimes these words are a bit too polite, because when you're down 67%, I mean, it's quote unquote volatility.

39:43Yes, of course, but it can be more than just a little word like that. So it made a big impression on me. And another thing Moinesh Prabhai talked to us about is about stacking the odds in your favor. So the way he meant it was he's buying a few bets. And even if some of those bets don't work, it's not matter because he's not betting the company on every bet. And as index investors, we don't really make bets like that. But if you're going to buy the whole market and even internationally, you'll have part of your investments that will do well and parts that won't do well. So in a way, this is what we do.

40:23We stack the odds in our favor and just accept that at some point in time, some investments will work better than others. So that's just part of the cycle. It's nothing to worry about. And last thing, Monish Pebrai, he showed us in his office. he has a little room where there's a bed, so he can take a nap every afternoon. And I remember being very jealous of that because I'm not a napper. So I thought it was kind of cool that he's like, yeah, yeah, I take a nap every afternoon. I think way more clearly after a good nap. So that was cool. That is cool. Can you talk about how you would describe investing in the stock market being different from playing in the stock market?

41:05Yeah. As I say in the book, I kind of hate the word like playing in the market. And I know sometimes people mean well when they say that it's just a natural way to approach the market. And it comes from this kind of casino mentality, right? That most people who have not spent a lot of time thinking about the market have. It's kind of the default mode where if you want to do well, you have to find the next Nvidia or the next Apple or the next Google. That's what I think is probably the default mode about how people think about the market. But the main difference I would say is the time horizon.

41:39If you want to stack the odds in your favor, you have to have a long time horizon. And that's mean thinking in decades instead of years. So to me, that's the big difference. And I would say the other difference would be a lot of people want to see a quick gain in the market. Even some people who should know better. Like I get email from readers all the time, like, oh, I did 30 % since Christmas or these kind of things. and people get excited. And I never really know what to answer because you don't want to rain on their parade or anything, right? They're not lying to you. But at the same time, when you understand that the real growth in the market doesn't come from one month or one year or even five or 10 years, it comes from a lifetime of investing.

42:26And that's hard for people to understand. It's not a game of who's ahead after the mile four of the marathon, right? If you crash in the middle of the marathon, it won't matter if you were in front for the first few miles. So understanding compounding and understanding that your gains will come from compounding. And compounding doesn't care whether you do 60 % or 30 % this year or 10 % this year. It doesn't matter. It's just staying the course for a very long time stacks the odds in your favor. So that's what I would say. Yeah. And in your book, you link that to what you called infinite vision, the tribute to Simon Sinek, of course.

43:05So perhaps you talk about why it's important to have that infinite vision when investing. Yeah, exactly. For sure. Because sometimes readers write me, oh, I'm 50 years old. I'm going to retire at 65. So I have 15 years and what should I pick and how should I invest? I always tell people, wow, you're 50 years old. You don't have 15 years left. You have 45 years left. Like you're an investor for all your life. So people sometimes don't see it that way. So, and yeah, so seeing the infinite game is basically the only game in my mind in investing. And that's why sometimes it's a misnomer when people use the word average, because if you're going to buy an index, you're going to get the average return.

43:49And average is not super exciting. Who wants to be average. Nobody wants to be an average golfer or average student. But what people miss sometimes is average over 5, 10, 20, 25 years, you're not average anymore. You're in the top 10 or 5 % of investors just because of compounding. And that's hard for people to understand. They want to see progress quickly. When we get a good year in the market, readers, they say, I followed your advice. I indexed my investment and I had a good year. And I tell them, well, you're excited about your investments are costlier to buy now. It's not in your favor. It's like showing up at the supermarket and everything is expensive.

44:34People are not happy about that, but in investing for some reason, they're super happy. And so the notion of average is, I think it's interesting and it's fascinating how it really works. If a reader comes to you and they maybe don't know about index funds yet, how do you explain the benefits of index investing to them? Well, the first factor to me is simplicity. And there's no guesswork involved. You don't have to look around corners or anything like that. You just buy the thing and forget about it. I tell people I spent less than an hour a year managing my investments. And that's including the time to brew a good pot of coffee.

45:10So it's not a really a full hour. So yeah, the simplicity is very hard to beat. Also, one of the big data points, and I know you guys talk about this a lot, it's that if you look at the stock market, the growth of the stock market comes from the studies I've seen from 1 % to 4 % of publicly traded companies. And in the day I understood that, it's hard to forget it, right? 1 % to 4 % and the cherry on the cake is that it's never the same one to 4 % every decade. So the chances that you'll get those companies, it's not great. So if you buy the whole haystack, it removes a lot of the guesswork and it removes a lot of mental energy.

45:55And you'll have the Googles and the NVIDIA of the world, they'll drift to your portfolio, whether you pay attention to it or not. Exactly. How big of an obstacle do you think behavior is to investment outcomes? To me, behavior is the number one obstacle. I mean, if you don't have behavior, you don't have anything. Really, it's as simple as that. Jack Bogle used to talk about the enemy in the mirror. And I use that analogy a lot, because people think that their enemy is the next crash or the next recession is their enemy. They don't realize that their own worst enemy in investing. And it's hard.

46:33I mean, not many people are willing to admit that. I have a friend who a few years ago was telling me about his performance in the market. And he was choosing his companies very, very carefully, reading annual reports on the weekend. And I tell him, well, go online, go on Portfolio Visualizer and look if you beat in the market. And he did that and he hadn't. So he changed all his portfolio for an index portfolio. And very few people can do that. A lot of people get passionate about their dividend or their choice or their view of the world. But if you're dispassionate, then you can do that. It's super rewarding.

47:17And also, I think doing nothing is hard. I mean, a portfolio manager told me recently about a client of his who has a sailboat. And the client was like, look, if I'm on my sailboat and there's a storm coming, I'm not just sitting there doing nothing. I'm going to actively try to protect myself. I'm going to find a harbor. I'm going to do something. In investing, it's so intuitive to try to do that. And it's so rewarding. It's like we're programmed as humans to do that. But to tell someone, no, there's a storm coming, you don't know whether it's a big or a small storm or even if there's a storm at all.

47:57And if there's a storm, you don't know when it's going to end, right? So yeah, it's fascinating to see that it never changes. And if you're able to master that and master your behavior, you're more than halfway there. I've definitely had that benchmarking conversation where someone says like, yeah, I've beaten the market. And it's like, okay, well, let's benchmark your returns. And then they go and actually look compared to an index. and most of the time they've underperformed, but people don't do that. They don't benchmark the returns. So they just assume if it went up that they've done well.

48:25On the topic of investor behavior, what effect do you think the financial media has on investors? Yeah, as a journalist, I can tell it's not great. I mean, the media is always after the shiny new thing, whether the market is up or down. I mean, when the market is down, it's all about five ideas to protect your money or three stocks that did well last year. And the rearview mirror effect is always there. And I always tell people, if following the news made you rich, I mean, journalists would be multimillionaires. And I'm here to tell you that they're not. So on aggregate, their returns are not super exciting.

49:05It's anecdotal. So I think we need to have a healthy, skeptical look about what we read in the daily paper. It's the nature of the media to go after what's shocking and surprising. I mean, and also negative. I mean, we all know that if there's a 8 % drop in the market, I mean, it's going to be front page news the next day. But sometimes when the market goes up by 8 % the next week, it's kind of barely noticed. So I think people get the idea. If you're a follower of the news, you don't really pay attention. you get the idea that the stock market, it's this big, big, big risky endeavor that's really, very few people understand.

49:47And you should really, really don't do anything with it, let alone put your money into it. So yeah, so I think it's not super, super great. Obviously, there are exceptions, but I think it's John Galton, the researcher who said that if newspaper came out every 50 years instead of every day, all the news would be super positive. because the long-term trends are about people getting wealthier, healthier, living longer lives. So the nature of the news cycle is not super helpful for investors, unfortunately. As a journalist, do you get any editorial pressure to write about more short-term stuff? Not really.

50:28Well, my beat is a bit different. I have a weekly column on Sundays called Money and Happiness in French. And I really have no editorial pressure at all. I think it's just the nature. Some people get excited about what the market does this week and today and who bought what and who's selling what and ideas are market. There's people interested in that and that's okay. And also it's interesting to see the GDP. But as soon as we step into projections or predictions, I'm completely out. I'm just not interested. And just for fun, at the end of the year, I do a little review of the predictions. And oh, my God, it's almost to the point that, I mean, they bottom tick every trend.

51:14It's almost scary. I mean, at the beginning of 2023, people wouldn't touch tech stocks with a 10-foot ball. And what do you know, in 2023, it did incredibly well. And so same thing with gold. And some people are interested and there's a market for that. but I just tend to drift towards things that are more long-term and doesn't really change from day to day. Earlier, you mentioned that you manage your portfolio and make a pot of coffee in about an hour a year. Do you have any thoughts about how investors should decide between do-it-yourself like you, robo-advisors, or delegating to a professional?

51:53Yeah, I think it boils down again to behavior. I mean, if you behave well around investments, a DIY route is probably good for you. If you have an interest in that, you can tell with a five minute conversation, usually if someone is interested and if someone has the right behavior, but maybe no interest at all. I sometimes tell them just to go with a robo advisor and set up automatic transfer and forget about it. And so if you want someone to manage your investments, it's not super easy in Canada because of course the big banks are usually they will build you a portfolio of actively managed mutual funds till in 2024.

52:34And if you don't have the minimum amount to invest, usually it's$500 ,000. Many good firms won't take you on as a client. So I tell people they should maybe go the robo-advisor route and see if it works for them and eventually find a financial advisor who will manage their money for them. And that's usually how it works for me. I used to be more pro do it yourself. It's so simple. But I changed my tune a little bit on that. It's easy when you do it yourself and you've found joy in that or if you find it interesting to follow that. But it's hard for me to tell a 57 year old, manage your own money, you'll save 1 % a year or anything like that.

53:19I mean, it's a big leap of faith. I mean, people have so many questions. I think you had Rob Carrick of the Globe and Mail on your podcast, and he mentioned something along those lines. Like, I get so many questions, and it's the same thing for me. I could do that all day long, answer email readers about what should I do, and what does this mean, and what would you do if you were in my shoes? And so it's just a never-ending streams of questions. So that gives me pause. Not many people are comfortable, Even if it's simple, as you know, it's simple doesn't mean easy. Yeah, it's super interesting perspective.

53:56That's not the first time that I've heard that from somebody who found DIY investing themselves and figured it out and thought it was easy and loved doing it and built their portfolio and then started writing about it and interacting with other people and telling them how easy it is. But then once they see all the questions start coming in from people and the things that people get stuck on and where they struggle, you kind of come to the realization that, like you said, even though it's simple, that does not make it easy. And people get hung up on stuff that you just can't even imagine would be a hangup if you figured it out yourself, but actually figuring it out, it's not so easy.

54:30Yeah. And if the person is young, is like an 18 year old, you say, yeah, sure. Just open a robo advisor and get familiar with the market, the up and down. I opened an account for my son. He's 11 years old. It's in my name, but he's getting familiar with the ups and downs of the market. So he won't be freaked out in the future about that. But a person who starts later in life and has a bit of money accumulated, wow, I wouldn't recommend them to just go about investing in themselves, even if it's simple. I mean, they will maybe freak out in a market storm. And so there's so many things that could go wrong.

55:07Yeah, it's totally true. I agree. RoboAdvisor is a great solution for a lot of people, but I see posts on Reddit all the time about Wealthsimple users who are saying like, my Wealthsimple portfolio is down 2%, like, should I sell it? Yeah, it's a never ending stream of questions. And that's why, I mean, resources like you guys, like Andrew Hallam, who was on your show not too long ago, I mean, all these analysis and it's super helpful because you just need an index card basically with what you need to do to invest well. But if it were that easy, I mean, it would be known by now, but it's super not easy at all.

55:42all the fear and the uncertainty is just too much for the human brain. Someone's made this comment before it. I didn't come up with this, but I have a book behind me somewhere called The One Page Financial Plan, and it's a 300-page book.

56:00Yeah, that sounds about right. That is funny. Okay. On the topic of delegating to a professional, if someone decides that they do want to do that, you mentioned that in Canada, a lot of the time they're going to put you into actively managed funds, what do you think people should be looking for or avoiding if they do seek out professional advice? I think you need to go with low fee index funds. I know historically they were hard to find in that space, but since I think 2022, there are some index mutual funds that are available in Series F in Canada. And I think they have something like 20 basis points or around that.

56:32So people can go ask their financial advisors about that. And they can ask about the fees they're paying. I think if they're paying 2%, it's way too much. To me, that's a red flag. You shouldn't be paying 2 % on your investments because think about it. If you're paying 2 % and inflation is 2 % or 3%, you're already at 5%. Okay, so if you make 5 % in a year, you're basically sitting still, not increasing your wealth. That's hard for people to understand. There's a big, big opportunity cost there. If you're young and you have many, many decades ahead of you, it can mean having half of the money that you would normally have if the fees were low.

57:13So that will be the main thing I would tell them. Yes. Fees are hard. Right now, firms are required to disclose fees paid for advice to the firm, but not the mutual fund MERs. In statements, we're required to disclose that. Full cost disclosure is coming, but it's not here yet. I had an interaction on Twitter recently where somebody knew the fee that they were paying to the firm, to a fee-based firm for advice, but they had no idea what they were paying on the funds that they own. It ended up being a little bit less than 1 % that they're paying for advice and they thought that was their fee, but they were paying an additional, I don't know what it was, 1.5 % or 1.2 % or something for the fund that they own.

57:52It ends up being way more expensive. People have to understand there are two layers at least of fees for even a fee-based firm. You've got to ask, what am I paying to you for advice and what are the fees and the funds that you're using in my portfolio? Exactly. Yeah. Nikolai, you interact, as you said, with a lot of your readers. What do you think investors struggle with the most? I would say a lot of it is recency bias. So if an area of the market has been on a tear and it's super well performed over the last year, people are excited about that. And if something hasn't well performed there, they think there's something wrong with it.

58:29I keep getting asked about the S &P 500 all the time. But what I keep telling people is like 10 or 15 years ago, you wouldn't have asked me about the S &P 500 because it was super unpopular. After the first decade of this century, the S &P, basically, you couldn't give it away because people were tired of crashes after crashes. And the US was this country that was on the verge of a massive depression and people were not interested. And so, yeah, recency bias is super strong. And also, what I realized is that people want to see progress. Okay, so if there's a year without progress, it's like the markets are broken or the way to invest is broken.

59:15It's almost like a car that only goes backwards. They're like, there's something wrong with that car, like fix it. And I'm like, no, it's normal. You don't need to fix it. It's just this is what markets do. Usually they go up, but sometimes they go down. So this year or this number of years, they've been going down. and that's hard for people to understand. They want to open the hood and do something and it's super hard to understand and viscerally to just do nothing. It's not satisfying, but that's what I try to tell people. Awesome. The book is From Zero to Millionaire. Great book. Nikola, great to have you join us.

59:52Thank you. It's been a pleasure.

59:58So Mark, pretty good episode, I'd say. Did you have fun? That was great. It's so cool. I still can't believe I'm on this podcast. I was explaining this to my wife yesterday. I was like, this is wild. I've been listening to this podcast since the very first episode went live. It's been, what, six years now? Five and a half years since you guys have started this podcast? Six in August. Yeah. And I was working somewhere else and just learning more about how I was going to use or deliver financial advice. And obviously, I've talked about this before, but you guys were a huge influence on me. And fast forward to now, and I'm basically sitting around with you guys on the podcast.

1:00:31I still can't believe it's happened. That's super cool. Yeah, I think this evolution going to three of us is a cool evolution. And I like this conversation. It was good today. We enjoyed feedback from listeners, of course. Today's topic was good. I enjoyed it because I only get to see this after the fact, right? I don't know how much of it's edited and how you guys do it live in these conversations. Because when we do the mark to market segment, I just kind of pop in, do my thing, pop out, right? So it's cool to get a bit of an inside baseball on the live recording. Can you guys talk about how you see the planning topics coming into the pod?

1:01:04Yeah. So I think we want to include more financial planning topics specifically for Canadian audience. You guys have global listeners. I don't know how many, probably thousands, if not tens of thousands. And that's awesome. What we do in our day-to-day life for our clients and the people that we interact with generally is focused on Canadians. and so that's kind of what the idea behind the mark to market segment was right is let's bring it back home a little bit while still having relevant topics throughout the rest of the podcast for the global audience and so i think what we've talked about is kind of expanding the scope of that segment of the podcast so we're going to talk a little bit more about canadian planning stuff less of it just me riffing on a topic for 10 or 15 minutes and more of a dialogue because you guys obviously have been around the industry for a long time the stuff that I'm talking about to the audience, you guys know well enough as well.

1:01:56So I think there's an opportunity to have more in-depth three-way conversations about those topics. So I think we'll keep that cadence of one week guest, one week guest, and the us episodes will flip between a deep dive with Ben and financial planning topics, but nothing's really set in stone as people know. Ben, what do you think? Some people might hear that we're going to talk more about Canadian planning topics and get nervous that it's not going to be interesting or relevant, but something that I've learned doing rational minor, but also doing money scope is that there are generally analogies to other countries.

1:02:28If we talk about something that we think is super niche in Canadian, someone in Australia or in the United States will say, oh, that's this thing in the US. All of the general concepts we talk about, a good example is when Scott Sederberg came on and talked about his paper on optimal funding of pre and post-tax retirement savings accounts. They looked at it from a US perspective, but it is completely relevant to anybody anywhere in a country that has pre and post tax retirement savings accounts. So I think that while we will definitely talk more about Canadian planning topics, because that's something we've gotten away from.

1:03:03We used to try and do, Cameron, for a while, we were trying to do an investment topic and a planning topic in every episode, which was kind of intense. So that's probably why we stopped doing it. But yeah, I think we can do planning topics, even though it may be Canadian, they'll still be relevant to listeners wherever they are. But I think it's a great idea. And I'm a big fan of the evolution of having Mark on. I think that the conversation that we just did earlier before Nicola, I thought it was great. I loved having you guys chiming in and making contributions. So hopefully we can do more like that.

1:03:33You guys have any content recommendations, anything you listen to on a podcast or a streaming show or something lately? I don't have time for that. I don't either, man. Cameron, I don't know where you got some kind of time violation. I don't have young kids like you guys. That's why. Well, that's just it. Right? I haven't watched a movie with my wife in like probably two years just because life gets so crazy, right? We just binged the new season of Somebody Feed Phil. You know, Phil Rosenthal from one of the creators of Everybody Loves Raymond. It was such a good show. If you want to check out something, it's got food and travel and he's hilarious.

1:04:04Where is it? Netflix? Netflix. Yeah, it's on Netflix. Speaking of food, Lisa and I just went, had a weekend in New York City. It was one of my dreams to go to. I'm a huge fan of Danny Meyer. as listeners know in the book Setting the Tables. I had a chance to go to one of his flagship restaurants, Gramercy Tavern, which was just exactly what you'd expect. Sensational service, food, everything was fantastic. So highly, highly recommend it. And also had a chance to check out Shake Shack, which is also part of his creation, which was pretty cool. Great trip. Shake Shack is more fast food, is it not?

1:04:35I don't want to say fast food, but it's like kind of a quicker In-N-Out experience. It's not like a sit down restaurant, right? Correct. Do we have that in Canada? I think we do now. It's just one in Toronto, but people can correct us. I had it in Chicago 10, no, maybe eight years ago. And it was when it was like a brand new thing. And I just wasn't impressed. And all my friends were big foodies. They just like, for anybody who knows me online, I'm notorious for terrible food takes. I don't think I have terrible food takes. I think my food takes are pristine. Thank you very much. But every time I say like, ah, Shake Shack wasn't that great.

1:05:08They're like, what are you talking about? It's amazing. And I just don't get it. but I haven't had it since. So maybe I need to go back and try it again. Pretty good. I had it once in Chicago too, but I don't remember how it was. So it wasn't memorable. Right. We have no recent reviews to read this week. That hasn't happened in a while. That has not happened. I've heard from no one except people selling me stuff on LinkedIn. So annoying. So annoying. LinkedIn ads and people trying to pitch us on products to sell and finding us guests and all kinds of stuff. 24 and 24 continues. Of course, we have 110 active readers.

1:05:40Get this, over 7 ,700 books have been read since the challenge started just over two years ago. Wow. Is that individual, like different books, or is that the total number of books read by? Total number of books consumed, yeah. So far this year, it's just under 500 books so far this year. So that's continuing. Very cool. Also kicking around the idea of having another round of meetups, Ottawa, Montreal, ZZ, possibly Toronto, possibly Vancouver, Mark. I was going to say, where's the West Coast representation? No, we can have the representation. I can host it. If there's demand, I'll come out. Then we'll see, but I'm willing to come out.

1:06:16I might be going to BC in June anyway. Oh, there you go. Good to see you. What's the occasion? Just checking out the old stomping grounds? The high school that I went to has been doing an alumni basketball game. I went and played in that last year, and they're probably going to do it again this year. and it's also the 100th year anniversary for the high school that I went to, which maybe wouldn't seem like a big deal, but my dad also went there and then he spent most of his career teaching there. So we have a lot of family connection to the school. So they would do the alumni basketball game around that same weekend where they're having that celebration.

1:06:55So there's a good chance it'll go for that. Do you just dominate or what? Was there anybody that had your basketball skills in high school? Do they get upset when you show up for these alumni games? You're like, oh, Ben's here again. We're going to get smoked. So what happened is that I played high school basketball there and then I went and got a scholarship to play NCAA basketball and all that stuff. And the coach that had coached me there after I'd left was able to build a very, very good basketball program. And so I was the first person, as far as I know, to go from that school to go and play high-level university basketball.

1:07:33But since then, there's a ton of kids that have gone from Brentwood to go on to play high-level university basketball. It's actually a really, really competitive basketball. Speaking of high-level basketball, you're not going to brag about the recent victory that your team had? so i played in a men's league basketball league it's over now but we finished eighth out of 16 teams in the regular season and so the league gave us the option of playing in the playoffs for the top division or the second division and so i wanted to play in the top division but everybody else on my team wanted to play in the second division so we were basically the top seed team in the second division for this league and we just cleaned up in playoffs so we won we won the second division championship for my men's league basketball nice no medal but we got to take a picture with the trophy and we got a free meal ticket for the cafe at algonquin college right on not bad that's all right not bad yeah that's good good for you congrats yeah thanks So we started the discussion a couple of weeks ago about possibly getting vests.

1:08:46We're still working on suppliers for that. It's a lot harder than we thought. I mean, we're big fans of Patagonia, but - They're not fans of us. They're not fans of us, but I'm repping today, but they don't want us to rep them. You better take that off. You're going to get in trouble. So yeah. So if anyone has suggestions for other brands - I feel like I may have just made us look bad. Patagonia is - They should explain that. They don't dislike PWL specifically, but they're very particular about group orders. So if you want to order as a company to get like swag, corporate swag through Patagonia, you have to go through a pretty substantial application process.

1:09:21And they want to see things like your dedication to sustainability, which we're not actively unsustainable, but as a financial company, other than being able to use ESG investment products, which we do for some clients, we don't have a whole lot of stuff on our website about our approach to minimizing our ecological footprint. We're working from home. I think if we went through some kind of evaluation process, we'd probably look pretty good on sustainability metrics, but we haven't done anything formal. And Patagonia wants to see that. So they shut us down. We're not overtly sustainable enough to rep Patagonia formally.

1:09:57Yeah. Hardly anybody comes to the office. We don't do a lot of corporate travel. So I think we're pretty good. We photocopy virtually nothing anymore. Yeah, that's true. So we're looking for ideas. What else are you guys thinking about? Anything? Did you guys see that LinkedIn video of the AI robot? I don't know what the detail is. It's called Figure One, I think. It's a collaboration with OpenAI. And I don't know who the robotics company is, but I believe the robot itself is named Figure One. Ben's seen it. Cameron, if you haven't seen it, I'll send it to you. But the ability for it to interact and take instructions and have a conversation and the dexterity that it has and the problem solving that it has, it completely blew my mind.

1:10:34I just watched it yesterday. And I watched it five or six times. I was like, I can't believe that I'm living through this era of human technology. And Ben, you've got young kids, I've got young kids. And my first thought was like, I have to explain to my son that I didn't even grow up with the internet, like until I was like 14. And he's just not going to get this. And he's growing up in the age of AI and robotics. And it's just wild to think about, right? But I'll send you the video, Cameron. It completely blew my mind. Yeah, it is wild. Totally wild. We were at the 9-11 memorial on the weekend and they were telling that texting wasn't really a thing except if you pressed the number.

1:11:07Remember when back in the day you had to press like, because each number was three letters. You had to press it down. Oh, yeah, like the old Nokia phones. Yeah, that's exactly what the Nokia phones was it. So it just shows you the progress. And that was pretty cool back then. That was like. That was a big deal. It was advanced. Yeah. So next week we have Randall Stutman here and then we're all back together again in two weeks time. Okay. guys good to roll good to roll good all right thanks everybody for listening