Episode 304 - Budget 2024: The Capital Gains Inclusion Rate

22:06There's some changes that I'll talk about in a second. And then a big one is that the AMT rate has increased from 15 % to 20.5%. So again, if you have a lower amount of adjusted income, if that exemption goes up, great. But if you exceed it and have to pay AMT, the rate has gone up. So it's more penalizing, but there's also a higher threshold to actually hit AMT. In terms of capital gains, the reason that this is all relevant is that one of the proposals to adjust the taxable income is that capital gains would be included at 100%. Remember, for regular tax, it's currently 50%, proposed to go to 67%.

22:41But for the AMT calculation, you include 100 % of your capital gain income. That's a big one. Other stuff like deductions are reduced. Common deductions like employment expenses, childcare expenses, carrying charges, which is like interest and investment fees, those are all included at 50%. So in your regular income, you can deduct those. On the AMT calculation, you can only deduct 50%. The donation tax credit is proposed to be included at 80%. So again, you lose some of that deduction. There's lots of funky stuff in there. You can find some pretty interesting scenarios where AMT would be relevant, but we'll just focus on capital gains because that's what we're talking about.

23:16So if you have no other income, and remember earlier, we used an example where somebody had some other source of a high amount of income. In this case, we're assuming no other income source. And they realized a$2 million capital gain personally before June 25th, regular taxes would be about$304 ,000, federal taxes. And we'll talk about the provincial side in a second. So$304 ,000 of regular tax, the federal AMT would be about$374 ,000. So the difference is what you'd pay as the AMT tax. You've got$304 ,000 of regular tax, and you've got to add on$70 ,000 of AMT because the AMT calculation says the minimum tax is$374 ,000.

23:55That's that. And then there's also provincial AMT. And the way that's calculated is generally just a set percentage of federal AMT. So for BC, for example, AMT is 33.7 % of the federal AMT. So of the$70 ,000 in that previous example, Ontario drives me nuts with the surtax. Ontario's tax calculation is - Let it out, Ben, let it out. It's honestly, modeling it is just not fun. But instead of just doing a fixed percentage, there's a percentage, like it's 33.67 % for Ontario, but then they also charge surtax on the EMT. And it just makes the whole calculation for Ontario tax super confusing. And then Quebec has a separate EMT calculation altogether.

24:37Didn't you open this by saying calculating EMT is relatively simple? Generally. For provinces? Not simple to me. I wrote an article on EMT last year or whatever. And when I was researching it, I was like, this is quite... And a lot of the difficulty comes from the things you've mentioned, which is one, the provincial taxes are all different. In most provinces, it's actually not that difficult because it's just a percentage of the federal EMT. But more so, the deductions and how they're excluded or included in the AMT calculation. So to actually calculate it for yourself, you'd have to see all the deductions that you've taken on your tax return and then apply different percentages to many of these deductions to calculate the AMT.

25:11So as a concept, I think it's relatively simple, but to actually calculate your own AMT is not necessarily that easy. Is the AMT stealing the capital gain thunder here this episode? It's super important. Yeah, absolutely. But you'll hear why in a second, why it's important specifically to capital gains. We're not just going off on an AMT tangent here. This comes back to capital gains. That's my point. It's very rare that you dig into details on AMT like this. Yeah. I didn't put this in my Twitter thread, but I almost did. And I ended up taking it out because I didn't like it. But I wrote that AMT is having a moment.

25:41In this specific case right now, AMT is super relevant. Usually it's whatever, somewhat obscure. But because of there's this incentive to realize capital gains before June 25th, and because of the proposed changes to AMT for the next couple of months, whatever it is, not even, is going to be super important for people to understand. You're seeing that Twitter post was too clickbaity. I don't know. I just didn't love it. I loved it. When you sent me the thread before you posted it, that was my favorite part of the thread. I'm upset you took it out, but whatever. I shouldn't have taken it out. I reread that thread so many times.

26:11It's one of those ones where I spent more time on it than I got engagement. Sometimes you write like a useless tweet and it gets so much engagement, then you spend hours researching something and nobody cares. That's how it goes. Okay, Okay. For provincial AMT, in our example with the$2 million, we've got$70 ,000 of federal AMT. The provincial amount is going to correspond to that somewhat, just a couple of examples. In Alberta, that would end up being 24 ,500 roughly on 70 ,000. 70 ,000 of federal AMT equals 24 ,500 of Alberta AMT. BC would be 23 ,500 roughly. Newfoundland, 40 ,500. And Ontario, 37 ,000, including the regular AMT plus the surtax on AMT.

26:53It really starts to add up. That's a huge difference though. Between the provincial AMTs. Newfoundland compared to BC is almost double in this example. Yeah. So Newfoundland is one of the highest ones. That's why I put it in there as I think it is the highest. That's why I have it in my examples. BC might be the lowest. I can't remember. I have them all written down. But anyway, so those differences matter a ton and I'll come back to that in a second. But in any case, we're at like$100 ,000, maybe a little below or a bit above$100 ,000 of AMT. That's additional minimum tax that you're paying on your tax bill.

27:23On that $2 million capital gain, regular federal and provincial taxes would be about$493 ,000. That's in Ontario, sorry. Then if we take AMT in Ontario, that's another$107 ,000. Someone planning to realize a capital gain,$2 million capital gain, and assuming a$493 ,000 tax bill, that would be a big whoops to realize, oh, there's another$107 ,000 of taxes owing. It would be quite a nasty surprise. One important detail about AMT is that it can be recovered. So you can carry forward AMT for up to seven years, and you can use it to offset regular income that exceeds the regular taxes that exceed AMT.

28:06So if you have AMT in future years, you can't carry forward your AMT. It just keeps building up. But if you have regular taxes above AMT in future years, you can soak up your AMT carry forward using those taxes. So if you have a regular tax bill in a future year, you can carry forward some of that AMT to reduce the taxes that you have owing. You can go back and mop up. It's effectively a prepayment of taxes in that case, where you're actually able to go up and recover it. But there are a bunch of cases where it's not recoverable, in which case it's not a prepayment of tax. It's just a straight up extra tax.

28:36So those cases where it's not recoverable become super important, again, in this specific time period where AMT is going to be very relevant to capital gains. So one case is if there are no future years with high income within seven years. So if you have a$2 million capital gain now and no expectation of higher income years in the future, because remember in our$2 million capital gain example, there's no other income sources in that year, there's a good chance you won't recover all of your AMT. If you're invested in a portfolio of stocks and bonds that's earning some income, you're at least based on my modeling, you'll recover some of your AMT, but probably not all of it unless you have other sources of income.

29:10That's one. And if it's a cottage, like if it's not an income producing asset that you're selling, then that wouldn't generate income like a portfolio would. So that would be even worse in that case. That's a loss of AMT. Another one is provinces. Mark, you mentioned earlier, there's a big difference between some of the provinces. Provincial AMT is recovered again as a proportion of federal AMT, but based on your current province of residence. If you have AMT in a high rate province and then move to a low rate province, when you recover it, you lose that difference between the two provincial AMTs.

29:42Now, the same is true. You could do some fun planning with this too. It's true in the other direction as well. If you have AMT in a low rate province and then go recover it in a high rate province, there's a positive delta there. You got to move from BC to Newfoundland, get your taxes back and then move back if you so choose. If the AMT numbers are big enough, if it's a huge gain, maybe somebody would do it. I don't know. people leave the country over taxes. Switching provinces isn't a big deal in the grand scheme of things, right? Yes. That's actually another point on AMT is if you have AMT and then leave Canada, that's it because you're not going to have any future regular taxes in Canada to mop up the AMT.

30:15Another one is Quebec. If you have AMT outside of Quebec and then move into Quebec, because they have a completely separate provincial AMT calculation, you lose your provincial carry forward in that case. These are all just points where I think it highlights why it's going to be important for people to understand AMT if they're going to be thinking about realizing large capital gains this year, because it ties into all your other plans. Where do you live now? Where do you expect to be living in the future? I talked to somebody recently who has a large capital gain in Canada, and they wanted to know about this, should I realize the capital gain?

30:43But they're planning on moving to a different country permanently in 2025. In that case, they have a low income this year, so they would pay the AMT, but then they'd be gone. That's it. So they're effectively just paying capital gains tax at a much higher rate if they do that. So that'd be true on what we call exit tax as well. if you when you become a non-resident of Canada for tax purposes you are deemed to have disposed of your assets for tax purposes if you have a large capital gain and you are becoming a non-resident it's the act of leaving can trigger the capital gain but now you have no way of recovering it so exit tax in theory be a lot higher because you can't recover the AMT if you're leaving that's a really interesting point I think that I don't know why it would be different on exit tax but assuming that is correct that is a very good point for anyone saying I'm out of here Canada's increasing the gains that I'm leaving.

31:28So we talked about the break-even numbers earlier. It's whatever, seven or eight years that we found in that example as a break-even. The AMT, I won't throw a number out there because it varies a ton based on the assumptions, but AMT really changes this math, especially if it's someone who has low other sources of income. Like in the example we've been talking about with the$2 million gain and no other sources of income, because they won't mop up that AMT, it really messes up the break-even calculation to the point where it's like, it's pretty unlikely that you'd actually want to sell the asset.

31:54And sorry to be clear, but in all of this math that you've just walked us through is before any of the budget changes. So it's using the 50 % inclusion rate on capital gains, as well as the current AMT rules. Yeah. So once the gains inclusion rate, or if the gains inclusion rate increases to two thirds, as is proposed, the AMT on capital gains specifically, you could still make AMT appear, but like in this example, for a$2 million example, AMT is lower than regular taxes at a two-thirds inclusion rate. That's why, again, AMT is having a moment. It's this specific set of circumstances right now that make AMT particularly important.

32:29The lower your income, the less concerned you are with, in general, with the proposed tax changes. Yeah. In general, that's true, especially if you're not going to realize capital gains. No, if you're realizing a big capital gain because of the AMT calculation. If your income is lower, you'll still pay less tax overall if you have a lower income, but that's when AMT will be triggered. If you have low other sources of income and a large capital gain, that's when your AMT tax is going to exceed your regular tax. If you have a higher income, your regular tax is going to be higher overall. So AMT is not going to be an issue.

33:03Let's say this gets implemented, the budget, and you do sell all these assets today. The AMT calculation that you would actually use for the 2024 tax year, do you know if it would be the new AMT rules or the old ones? Because you're triggering the gain prior to the AMT taking effect, but the AMT calculation would be done when you go to do your taxes the following year. I don't know if you know the answer. It just occurred to me that I don't know if they're going to use the new AMT calculation for gains that are triggered before June 25th. That I do not know the answer to. I mean, there's a lot of this stuff where I'm unsure if that's something that I don't know, or if it's something that nobody knows yet.

33:37I don't know. I'm just wondering if the higher exemption under the new AMT there, so you're getting capital gains under the old inclusion rate, but potentially AMT calculations on the new AMT rate with the higher exemption. My examples were based on the proposed AMT rules with 173.205 exemption and the higher rate on the net AMT income. Just so I'm crystal clear, you're using the 50 % inclusion rate today on this capital gain example, but you're using the new proposed AMT rules. Is that right? Yeah, correct. If the budget proposes this new capital gains rate, but after June 25th, and then it proposes the new AMT for the tax year 2024, I think looking at it this way does make sense.

34:17Happy to be corrected on that if someone with more tax expertise thinks otherwise. Keeping in mind how useful deferral can be, even given these rate increases, I think it's important to remember that for long-term investors, realizing large capital gains is not something that you're doing every year. If you're not going to realize a gain within whatever, seven years, then you probably don't want to realize it now. Most long-term investors shouldn't be realizing gains, all their gains in such a short period of time. Even someone who's retired living off of their portfolio. Maybe they could realize enough gains for the next three years of income or something or five years of income, but not the whole portfolio.

34:52Because even retirees are not triggering all of their taxable gains in a single year to fund their retirement consumption. They're triggering bits and pieces or none if they're living off of just the distributions from the portfolio. That's a really interesting point though, Ben. Sorry to interrupt you because I had this conversation with a client the other day and they do have a large capital gain inside their corporation and they are basically essentially retired. So to your point, it might not make sense to rip the bandaid off the entire capital gain, but because they are generating some capital gains every year inside their corporation to fund their retirement lifestyle, do they then take some numbers, say three to five years worth of capital gains within your seven year break-even threshold, just for the example, trigger them all at once?

35:30It's a bit of a hedge, I guess. Corporations are different. And we didn't go into that because we'll cover that on a special money scope episode that Mark Soth and I will do. But corporations are different. When you realize a gain in a corporation, it creates something called capital dividend account, which can be paid out to a shareholder tax-free. If someone's living off of their corporation, it means that they're taking taxable dividends out. There's an interesting planning opportunity with corporations where you may want to realize all of your gains to create CDA. It depends on what the numbers look like, but that lets you stop taking taxable dividends out of the corporation for some number of years and live off of tax-free capital dividends.

36:05The breakeven math on a corporation for someone who is spending dividends out of their corporation is quite a bit different because you give up on tax deferral on the capital gain, but you can get a lot of that back by gaining tax deferral on not having to take taxable dividends out personally, because it's quite a bit different. But again, that's a money scope topic. It'd be a popular one. Within the group of 400 people that are interested in this stuff. I know, but if you're interested, that's the place to go. Mark mentioned tax rate risk earlier. I think there's really highlights that's a real thing.

36:34We've talked about that on past episodes. Hey, tax rates can change. A change to the Capital gains inclusion rate is a big shock to that. Tax, it's just a big one-time jump to taxes on assets. We try to do stuff to mitigate this. We had Scott Sederberg on a while ago talking about how you can optimize RRSP and TFSA, although he was talking about the American equivalents, contributions based on hedging future tax rate uncertainty. We don't tend to do that because our clients tend to be in a position to max everything out. But we do do other stuff like If someone has a low income year, realizing some capital gains to mop up their low income brackets and increase their adjusted cost base.

37:10And that does two things. It reduces tax rate risk, which is what we're potentially seeing now. It also helps to lower the terminal tax bill. So there's a little bit of lifetime tax smoothing by doing stuff like that. And also for people with corporations, again, we'll typically recommend taking some money out of the corporation, at least to fund RRSPs, TFSAs, and RESPs. Again, those are just registered savings accounts with tax preferred treatment in Canada. I think that idea of tax diversification, I know you're big on this too, Mark, just having money in different buckets with different types of tax treatment really does protect you against stuff like what we're seeing right now.

37:45You end up with a concentration risk. In reality, many people were organizing their affairs this way for decades, right? Where they were using their corporation as a retirement account. And there's nothing wrong with that as part of the rules. And maybe they were funding some RSPs and TFSAs, but maybe not. And I know clients who had done this, where they had used their corporation as their primary retirement savings vehicle. They paid themselves only dividends so that they wouldn't have to pay into the Canadian pension plan. And the corporation has now a massive amount of concentration risk from a tax perspective, right?

38:12And to your point, tax diversification by using tax-free savings accounts, paying salary to get Canadian pension plan and RSP room, filling up those RSPs, it insulates you from some of these adverse tax changes like the one we're seeing right now. And I have to say, I had an accountant that I work with who I talked with like maybe last year about this. And I was telling him how I'm big on tax diversification. and he was like, no, no, stuff everything in the holding company. And then the day after the budget, he emailed me. He's like, you were right. I can't believe it, but you were right. And this isn't to say I was right, but this is the exact type of risk we're trying to defend against by using up all these other registered accounts.

38:43And so there are people, unfortunately, that are going to be disproportionately affected because they didn't take advantage of that in the past. Yep, exactly. And you can't do it all in one year because to take money out of the corporation, typically you've got to pay personal tax, which means if you bled money out of the corporation over time at lower tax rates, great. Now you don't have that concentration risk. But if you decide in this year, I've got$500 ,000 I want to take out of my corporation, you're going to pay half or more of it in tax. And that's another thing on the corporate planning stuff.

39:10There are even potentially cases where we would recommend taking money out personally, even if there is not registered account room available to invest in a personal taxable account. That doesn't always make sense, but it can make sense in some cases. And again, it gives you that tax diversification. There's two other, I think, interesting proposals in the budget that are just worth maybe touching on at a high level. So one is the lifetime capital gains exemption. So for business owners selling a business, it has to qualify. There's a number of different restrictions to access the lifetime capital gains exemption.

39:39But for those that qualify, the first$1.25 million of gross capital gains would in theory be exempt if you sell the shares of the business and you qualify for that exemption. The previous limit was, I think, just over a million dollars. It was indexed to inflation, and I believe it just crossed a million dollars this year. So the new proposal bumps it up to$1 ,250 ,000. It will not be indexed in 2025. And then indexing will resume in 2026. So there are cases when those selling a business decide, depending on the size of the business, may benefit from that extra rate. And then the last one was the Entrepreneur's Incentive, which is interesting.

40:11This is a brand new proposal. It's not a modification of anything else. And what that does is up and above that lifetime capital gains exemption of$1.25 million. dollars over the next 10 years. They're proposing to phase this in at$200 ,000 per year until after 10 years, there's a new$2 million exemption limit above the lifetime capital gains exemption. And within that$2 million band, if you sell a business, the capital gains inclusion rate, instead of being two thirds, will be one third. So if you sold your business for$3.25 million 10 years from now, and it qualified, the first$1.25 million would be tax exempt.

40:46The next$2 million dollars would be subject to a one-third inclusion rate instead of two-thirds. So there is some benefit in those cases, but they excluded a ton of sectors from those that are eligible for that benefit. So financial companies, insurance companies, real estate companies, food and accommodation, many service businesses, any professional corporation, none of those benefit. If you eliminate all that, I think what you're looking at is a lot of technology companies or small startups and that type of thing that could benefit from it. It's an interesting proposed change, though, that has some tax planning implications as well.

41:16So as we pivot to the after show, I have to ask you guys, when the budget came out a couple of weeks ago, there's so much activity in various parts of the media. Newspapers reached out to you and other outlets reached out. You went to Twitter right away with lots of threads, created the tool. Just tell me where your head was at once it came out and what's your default go-to activity? I wrote the thread that evening. So the budget proposal came out at, I want to say, 4 p.m. on the Tuesday, I think it was. And as we were chatting about it, Ben and I and some other advisor and planner friends that we have outside of PWL, and we were all trying to wrap our head around these changes.

41:53And for me, again, my bias being having worked with many physicians, the corporate capital gains issue, for me, was the biggest issue that I could see from my own experience. And you saw that right away. It didn't take a while to disseminate through Twitterverse. I saw it right away just because of the language they used. It was very clear that they said capital gains above$250 ,000 for individuals and all capital gains in a corporation or a trust. And I like reread that line 10, 15 times to make sure that I wasn't missing some language there. After realizing this is going to impact a lot of people that I don't think realize they are going to be impacted, I decided to write a thread and just walk through the math of it.

42:25So here's the old rules. Here's the new rules. Make some assumptions around a capital gain inside your corporation and you're paying this out to yourself. What is the change in taxes that you're going to pay? and in the example you're basically paying a third more in taxes at the end of it for somebody who's taking capital gains in a corporation and then paying themselves out the gains as dividends so i wrote the thread and i scheduled it for the next morning i think around nine o 'clock my time in dc and it got a lot of attention and it got a lot of attention from physicians i know the previous head of the canadian medical association he retweeted that obviously some journalists picked it up so it was like just a frenzy and what i realized is a lot of people a don't know how capital gains work in the first place.

43:01So there's a lot of confusion about that. Really? Yeah, I was having conversations with people that didn't understand how capital gains worked in the first place. Many thought that business owners could just choose to pay themselves in capital gains instead of salary and dividends. And so they were happy with this tax change because they felt that it made business owners incomes closer to a regular salaried person's income because they thought that people who had a business could just choose to pay themselves in capital gains instead. There were ways to potentially do this in some cases, but that wasn't the point.

43:29My point here is that the spectrum of understanding of taxes is very wide in the first place. And then when you get into these tax changes, and then when you get into the changes specifically for how it's going to affect incorporated business owners who have an unrealized capital gain, it gets into some really niche stuff. It became clear to me that some people just didn't want to understand that. And they just wanted to say good tax the rich kind of thing. And so there came a point for me where I had to just start ignoring comments on Twitter. I got direct messages with some really nasty comments and insults and I'd never experienced that type of vitriol on the internet before so I had to take a break.

44:00Yeah it got pretty intense. It was intense. Wow and Ben with the tool you and Brayden met up and started brainstorming this? My reaction was to start modeling it first thing I did and then and then Brayden uh Brayden messaged me that he wanted to build an app and I was like great I've already started modeling it so I shared what I'd done and then he turned it into a web app which was pretty cool. He was off this past week, which was somewhat unfortunate because I wanted him to keep modeling with me, but we are able to get this app up before he left, which was awesome. And then he's back next week or this week when this episode comes out and we will have done a few modifications to the first iteration of the model and we'll likely release one for corporations as well.

44:43It's a very slick tool and people seem to appreciate it. Obviously, as you said earlier, brought up in the money scope with our good friend, the Looney Doc. Yeah. Mark Soth's reaction was similar to mine. He has been also feverishly modeling stuff. I think both of us have slogged many hours in Excel over the last couple of weeks. We'll do a special money scope episode once we both have our heads straight in terms of what people should do. That'll be coming at some point. If anyone is even remotely interested in this topic, the money scope, I know I say this every other week when we're on here, is fantastic.

45:15Deep dive, quality conversation and you give it the oxygen and time these topics deserve. And it's so well done. And Dr. Mark is so great with you, of course. They seem to be appreciating the money scope, which is good. It was quite a venture when Mark and I started it because we were like putting tons of time into it and hadn't released an episode yet. And we kept saying to each other, man, I hope people like this. But they seem to like it so far. So that's good. You want to jump into the reviews? Yeah, this one's from Guplets50 or Gooplets50 in Australia. Addictive and informative. Terribly addictive podcast.

45:49The fantastic mix of topics, guests, and breadth of discussion. Not only very useful for beginners, but even for people who have an above average background in finance and personal finance. Canadian investing topics are great because it allows me to immediately compare and contrast with my Australian situation. I have used your work to set our goals, find a financial advisor, and to invest in DFA dimensional funds. If you were in Australia, I would be a client. Keep up the good work. Should we move to Australia. Should we open an Australian branch? That's not a bad idea. That review makes me feel better about our pretty hardcore Canadian episode today.

46:20I've heard from a bunch of people on LinkedIn from Christian, who is a fellow Canadian advisor. Hi, Cameron, your post popped up in my feed that linked to a very useful capital gains calculator your firm created. Just a quick note to thank you and the team for putting together so promptly. Nice to have a tool that advisors and clients can engage with, especially when you're helping them to make seemingly complex decisions. Really enjoy your podcast as well. Cheers. Thanks for that, Kristen. Also from Lino, hope you, Ben and the PWL team, and of course you, Mark. The podcast continued to be absolutely amazing.

46:49I genuinely can't describe the impact they have had on my financial journey. Relatory conversations above, since we last spoke, I moved from a boutique firm to a wealth management advising role at a bank in Australia. We're popular down under. Then I just got one today from Nader in Toronto. He wanted to let us know that he is a huge longtime fan of the podcast and also thanks us for educating Canadians. Ben, you want to do your best at this email? Maybe you can, I'll try to shorten it a bit. Yeah, it's a lot of text. Following the 300 episode milestone, I would like to share with you some thoughts as a long-time listener.

47:24I started listening to your podcast sometime in 2019 before four was replaced with from two. Remember that? We used to say four Canadians and then we had too many international listeners and they were like, can you change the introduction because it's going to scare off other international listeners. So then we changed it to from two Canadians. And now it's from three Canadians. And well before the dedicated theme music, oh yeah, the new music. Oh man, the history of the podcast. Taking you back, eh? Boy, have you come a long way. Is that a compliment or an insult? A little bit of both? I'm just joking.

47:53Your podcast has helped me a great deal in shaping my own personal investment philosophy. The weekly reminders continue to provide useful, sometimes necessary oversight to stay the course in the face of challenges. To me, the podcast is a treasure of invaluable investing knowledge and a bastion of critical financial thinking. In a world where reason and common sense rarely prevail, your podcast shines a reassuring light through the noise and helps bring focus to long-term goals. Although I'm lucky enough to consider myself mathematically and financially savvy, I can say that sensible investing requires some degree of mindful steadfastness.

48:22There is no shortage of temptations or biases and staying true to one's investment plan can at times be hard work, even for the pros. It is no surprise, therefore, that there are swaths of like-minded people who find the podcast as valuable as I do. I would like to express my heartfelt gratitude for the work you're doing and for providing the service free of charge, making it accessible to anyone with a smartphone. Having followed your journey for half a decade, crazy. I am thrilled to see you go from strength to strength and grateful for everything I have learned. Keep up the good work. Very nice.

48:51We're coming up in six years this summer. Crazy. That's wild, eh? Mark, you want to quickly go through this next one, which has been shortened. Hi Ben, Mark and Cameron. Thanks for your excellent work on bringing so many interesting personal finance topics on your podcast and YouTube for the benefits of everyone. You are doing really good service. I am an Italian working in Singapore and listen to your podcast every weekend. In your latest episode 299, you bring such a good summary of years of experience and study on investing. I like the multidisciplinary approach you follow when discussing investing topics and improve your understanding of investing, personal finance, behavioral finance, decision-making, psychology, and even philosophy.

49:29That is evident from the hosts. I think they meant guests. That's evident from the hosts you bring to the podcast. In this sense, you really nailed it. And I like when you summarize on the most sensible, broad-based advice that can help us investors in navigating personal finance. That's from Marco in Singapore. Cool. Now, the Mike Green episode, wild engagement on that. Listen, Mike is controversial because he has a theory and he's very assertive about promoting his theory. I thought it was interesting to learn about. I saw some people say that they wish that we'd pushed back on Mike more, but I've said this before.

50:03People say that when they personally disagree with Mike and they want us to express their opinions to Mike. I don't know if I have enough information to agree or disagree with Mike either way. I don't think that what Mike is saying is factually true. It's a theory and I definitely want to do more investigating, but we are having, I've talked to Ralph Coyne about this and I'll hopefully talk to him again. We've got Valentin Haddad, who Mike references coming up on the podcast. We'll be able to ask him about his research and how he thinks about Mike's ideas. We've also got Antoinette Shore, who's written co-author of another paper that Mike often references on this stuff.

50:37She's coming up later this year as well. So super interesting, but my mind's not made up and there's more thinking and investigating to do on this topic. But yeah, very lively discussion. If people want to see a lively discussion about very geeky topics, there's one happening ongoing in the Roush Reminder community on this. I went into watching that episode with a pretty heavy bias because Mike blocked me on Twitter a long time ago. And I've never interacted with him, never. And I just went to somebody like quote tweeted one of his tweets to me. And I was like, I can't see this. Who is this guy?

51:07And I looked and I was blocked. I of course knew who he was, but I was like, I've never engaged with him. Why did he block me? I think it's just because I talk about index funds so much. He's just like this clown and just blocked me like without even interacting with me. So I went into that episode going, okay, this guy who doesn't like me, I'm going to go watch this episode. And I have to admit, it was a really fascinating episode. He's clearly brilliant. I had to slow it down and go back and watch a couple of segments a couple of times because his level of knowledge just far exceeds my own. But it was a really good episode.

51:32Very eye-opening. It's not a perspective that I had considered before. So very good. I didn't get it before. I had made two videos because people would send me Mike Greenstall. What do you think about index funds breaking the market or whatever? So I made two videos about market efficiency and whether index funds are breaking market efficiency. and Mike saw one of those videos and that's what led to him coming on for an episode. He got super upset about my video, wrote a whole post about it on his sub stack, which was unnecessarily mean. But anyway, I read that post and sent a message like, listen, Mike, if you have such a strong opinion, why don't you come tell us about it?

52:06And then in preparing for it, I actually went and read his stuff and understood that he was not in fact talking about market efficiency at all, which then helped me understand why he was so upset because I think everyone dismisses him for the same reason. And it's not even what he's talking about anyway. End to end, interesting experience. I think I enjoyed it. Cool thing just happened while we were talking here, while we've been recording. The wealthy barber, David Chilton, who in Canada is a very well-known figure in personal finance. He wrote a popular book, like the book. Way beyond Canada.

52:32He's huge in the US too. I didn't actually even realize that. I knew he was very famous in Canada. I think he was back in the day, one of the leading fundraisers for PBS, if I'm not mistaken. He was very popular in the US. Yeah. Okay. I didn't know that. David Chilton, the wealthy barber, that sounds like more people than I expected will know who he is. I got notification on my phone as we were sitting here on my YouTube channel on the most important lessons in investing video that listeners may have seen, or they at least heard us talk about that topic on Rational Reminder. He commented, Hey Ben, it's Dave Chilton, the wealthy barber.

53:02Yes, Dave, I know who you are. I enjoy your videos and podcasts, especially this one. You're well-informed and very genuine. It's clear you really want to help people. Well done. Hi, Perez. I saw some tweets today that he has a new service coming out to help people. I just saw the headline. I didn't see what the service is all about. I just saw the headline as well and looked into it. It just came through. We invited him on and he was unable to join us. I'm going to reply to his YouTube comment and tell him to DM me on Twitter and we'll see where that goes. Nice. I had a few people ask about meetups.

53:32So hopefully this fall we can get you to town, Mark, because I think there's a good chance that our very good friend and soon to be your co-author, I guess Dan Solon be in town. Why would Mark come here? Why don't we go to BC? That's actually not a bad idea, but Dan may be coming to Ottawa, that's all. That's a chance, so it'd be cool to do it. But no reason why we can't go to BC anyways. We've never had a BC meetup. That's actually a very good idea. Why wouldn't Dan want to go to BC also? That's also a very good question. We could pose that to him. Anyways, in the fall, somewhere in Canada, we're hoping to have a meetup with us.

54:03Dan. Somewhere in Canada. We'll pin that down. One end or the other, one side or the other, somewhere in the country, we'll be there. Today we're recording this May 1st. How's the book coming? Yeah, good. I'm about, I'd say a quarter of the way through. So the book itself, and I'm just measuring that by chapter count. So the book itself has about ballpark 40 chapters and I finished off chapter 10 yesterday. It's really interesting because as you guys know, Dan is a huge proponent of an evidence-based approach to everything. And so his book has, I don't know how many hundreds of references to surveys and studies and everything else.

54:38And he basically never makes a point unless he can back it up with some kind of reference and study, which is awesome. The problem I'm finding is that there aren't necessarily analogs to a lot of these studies in Canada. The US just has such incredible data. Things like just yesterday, I was writing a chapter on debt and spending specifically for millennials. And the points he's making, in some cases having difficulty finding a correlation in Canada that I can back it up. A lot of the time being spent on the book is really just looking to see if I can actually find analogous data for what he's saying in the US to see if it exists in Canada.

55:09It's great. I'm enjoying the process. Dan's a great writer. I think the book's going to be quite popular and I'm really hoping to get it written at least the first draft of him by the end of this month. It's now May 1st. Love it. Speaking of evidence-based, we have an upcoming webinar on May 22nd at noon Eastern time. Compensation strategies for Canadian business owners. We've done a bunch of webinars in the past. This one will be co-hosted by our colleague, Brady Plunkett, who's a portfolio manager here at PWL and also Spencer Brooks, who's a partner at Henry Warren, which is an Ottawa-based tax and accounting firm for presentation on an evidence-based approach to business owner compensation techniques.

55:50We'll have the link in the show notes to register for that. That's May 22nd at noon. Those guys are phenomenal, all three of them. Brady's great. Spencer and Jacob at Henry Warren, they helped us on one of the Money Scope episodes on this same topic on corporate compensation strategies because Mark Soth and I, we were looking at each other. We know enough about this stuff to say what we're saying, but we should probably have someone check it because this is really, really complicated. And so Spencer and Jacob, they both contributed to reviewing that episode and their input was just incredible.

56:23The little stuff they pick up, This is technically correct, but it would be more technically correct to say this. Mark and I were just like, man, this is crazy. But those guys are super knowledgeable on tax. Insanely good firm. As always, connect with us all over the place. Twitter, LinkedIn, easy to reach, easy to connect with. Please leave a review. Any final thoughts? No, I'd love to see some more reviews. Total number of views is getting pretty high. I like watching that number go up. Closing in on 1 ,200, I believe. Yeah. So if you're enjoying the show, leave us a review. Or if you're not, we've had some, have we ever had bad reviews?

56:55Maybe a couple. A couple in there. It'll take anything we can get. As always, thanks for listening. See you next time. See ya.