Episode 349 – AMA #4

24:00I think because investing has become easier and safer, and we talked about this in a previous AMA episode, it's possible that stock valuations are just higher. The normal, whatever that means, level of valuation is higher and expected returns are a bit lower than history. If that is the case, could be another argument against stocks research supporting 100 % stocks. They do look at this though in the new paper, they condition the optimal strategy on the domestic stock price to dividend ratio. And they find in that specification that in the bottom four quintiles of the price dividend ratio, their hypothetical couple does maintain an all equity strategy, but in the highest price quintile for domestic equities, their household does allocate to bonds with a 9 % weight.

24:43That optimal portfolio in that scenario does give a bit of a utility gain. The way that they do the analysis in the paper is their base case, the couple saves 10 % of their income and then they kind of modeled that through the life cycle. And then to compare alternative strategies, they ask how much equivalently would the couple have had to save with this alternative strategy to match the optimal strategy and conditioning on valuations, they would have had to save 9.7 % of their income instead of 10. So it's a little bit nice. But then I think the other big thing to keep in mind is that we had this long discussion in episode 343 on how to choose an asset allocation.

25:17Behavior matters a lot. Being like, yeah, the data says I should be 100 % in stock, so I'm going to go 100 % in stocks. That's probably not the right decision for most people. I think Scott's research is interesting because it shows things like, hey, international diversification is really important. Hey, bonds maybe are not super safe over very long horizons in real terms. Neither of those things do anything to mitigate the behavioral effects of volatility on investor behavior. So that's, I would probably argue, more important than what is statistically optimal. It's interesting how often we hear questions with that premise.

25:51What I mean by that is it seems that a fair number of people, I think, believe bonds are in a portfolio to somehow enhance returns. And it's just, that's not the case, never has been. You had said, Ben, for example, bonds don't reduce, whether it's over the long term, but bonds are not in there for the long term. Bonds are in there to control short-term behavior. My joke here was to say there's no reason to hold bonds except for behavioral concerns. It's like saying the only reason to add cold water to your bathtub is so you don't get scalded and jump out. Yes, that is correct. Let's not just wave our hands and say, oh, it's only behavioral concerns because behavioral concerns, it's the single biggest reason why people fail in investing is bad behavior.

26:39So if you can have an ingredient that improves your long-term behavior, then what's that worth? It's worth a lot. If you want to focus specifically on the short-term, we're talking about here, or at least I'm talking about people who are in the drawdown stage. And if you're taking money actively out of your portfolio, yeah, I really think you should keep a few years worth of cash flow in not necessarily short-term bonds. They have their own issue with volatility, but what cash GICs, and simply because, believe me, I've had these conversations with people many times when they're drawing down their portfolio as markets fall, it's extremely reassuring to be able to say to someone, you don't need to worry about equity volatility right now, because we've got two or three years or more of cash flow in safe investments that are not going to be affected by that volatility.

27:30And that is enormously comforting to people. It's not a research question. It's just a question that you get the answer to it after you work with enough people. I agree with that. I think managing behavior is so important to total outcomes. It's easy to look at what's the optimal portfolio, historically and mathematically and statistically, but actually tolerating that portfolio over a 60-year time horizon and not making mistakes with it is the tough part. So to the degree that bonds can help you prevent a mistake, you can end up with a better outcome by using them. I'm 100 % equity. I expect to always be 100 % equity because I'm a perfect investor.

28:08I'm robotic in my approach. My son is a different story, but I am absolutely infallible with my approach to my portfolio. But it's interesting because I know I absolutely respect that as I get older, I might completely change how I view that. So I expect to be 100 % equity myself, but absolutely leave room for, I just might not need the stress of it when I get older and have to make those drawdown decisions too. Or do you mind if I ask you like roughly what percentage of your clients are a hundred percent equities? I have a smaller number of clients than the typical PWL advisor because I wear a couple hats, but I don't push towards a hundred percent equity.

28:41Like we've talked about kind of our risk profiling process before, I think on the podcast where we use a combination of psychometric results from their own experiences and perception about risk and answer a questionnaire. And then we combine that with a more quantitative view of their capacity for risk. Very few people come out with an acceptable score that would allow us to put 100 % equity in their portfolio. 20 % maybe. We also have to remember my clients typically err on the younger side, I would say, in the 30 to 45 range. So there might be more capacity and tolerance for risk there. But I don't know that I've met a lot of people over my lifetime that can sit through the kind of volatility we've experienced even in the past 10 years with things like 2018 and COVID and not make a mistake.

29:27I'd agree with that. The number I have is extremely low. It doesn't surprise me. I'd have to look at our data, but it's material, the number of clients that have 100 % equity portfolio. And there's definitely advisor fixed effects there. There's a paper on this. Advisors have big influence on their clients' portfolios based on what that advisor's fixed effects are. What that advisor thinks basically has a big influence on what their client's portfolios look like. That one paper I'm thinking about, it shows that there's much less variation based on client circumstances, but a lot of variation based on advisor, fixed effects, advisor preferences, I guess, and perceptions.

30:05I mean, obviously all advisors have some biases, but it shouldn't be the biggest factor. It could be a factor, but client circumstances should obviously be the biggest effect there. Yeah. That's why that paper was kind of a bombshell paper. It's in the Journal of Finance. Pretty interesting. Ben, that's a separate paper than the one that shows that advisors invest in the same products that they use for clients, even if those products are not great. Is that right? It's a totally different paper? Same group of co-authors, but it is a different paper. But you can see the influence just from that paper alone on what ends up in client portfolios is largely based on a lot of that individual advisor bias.

30:42Yeah, definitely. I just wrote a video and recorded on sequence of returns risk based on the conversation we just had. You guys are going to rip me apart for it. But it doesn't exist? It talks about the Cedarburg paper, but there's also a couple of other papers that look at optimal retirement portfolios. And they all find that being equity heavy is generally quite favorable. There's one that looks specifically at the cash bucketing strategy. Author of the paper kind of acknowledges like, yeah, this probably feels good for people, but shows that it's suboptimal relative to having a static asset allocation and drawing it down, not addressing the behavioral components.

31:19In the most recent version of Scott Cederberg's paper, they do one optimization where instead of finding the optimal fixed lifetime asset allocation, they find in each year of the simulation, they find the optimal asset allocation. In that one, they end up with 100 % equity up until retirement. Then they shift into 27 % bills. I don't know, it's like for seven or eight years and that slowly draws down and they end up back at 100 % equity. That was interesting because they had this big allocation of bills at retirement. That was based on a 4 % withdrawal rate, 4 % spending rule. Then they switched the spending rule to a proportional 4%.

31:54You're spending 4 % each year, which means your spending is changing in dollar terms. Of the remaining balance? Of the remaining balance, yeah. So 4 % rule, like the Bill Bengen 4 % rule is you spend 4 % of the portfolio in the first year and then increase that by inflation each year thereafter. And the proportional 4 % is you spend 4 % of the remaining portfolio value every year. And so if your portfolio drops, your spending drops proportionally. When they switch to that proportional spending rule, the allocation to cash goes away completely. So my comment in the video is that sequence of returns risk is better described as sequence of withdrawals risk because you're not forced to take the same withdrawal every single year.

32:32There's a couple of things there. One, obviously, if you have a fixed percentage of a remaining balance, it can only ever approach zero and never run out theoretically. So it's not a surprise, but the variance in spending can be absolutely massive. Like your tolerance bands for going from spending 60 grand a year to 40 grand a year might be absolutely intolerable for you. So I think it's Kind of a combination. Sequence of returns risk absolutely exists and a variable withdrawal rule is a great solution to it or a great part of a solution kit to it. And you've talked about this and modeled this, Ben, like having floors and ceilings and guardrails and that type of thing.

33:08Like there's a lot of ways to kind of tackle that problem, but sequence of withdrawals risk, I think is a good way to frame it to the degree that you can actually tolerate massively changing withdrawals. I did model that actually using the Demson-March-Stonson data. I did a safe withdrawal rate using 100 % stocks. It was 3.2%, so$32 ,000 a year on a million. Then I did an amortization based withdrawal rate, which Ben Matthew talked about when he was on. It was able to sustain, I think it was a 3.65 % average withdrawal. The lowest year was$17 ,000 in spending. You're taking almost a 50 % haircut to your spending relative to the$32 ,000.

33:44It's one tool, like you said, Mark, and there are definitely guardrails. There's one that's actually called guardrails, but they did different systems that you can put in place so that your spending is not actually that volatile. But I do think it's interesting that there are two ways to solve the sequence of returns problem. One is by trying to do stuff in the portfolio. One is adjusting your spending. The optimal answer is probably somewhere in the middle for any individual. I did think that the fact that the Cedarburg paper with a fixed withdrawal found that optimal cash allocation was pretty interesting.

34:12And the other thing about that, it was optimal by 10 basis points of savings. Remember the base case saves 10 % of their income. In that optimal cash allocation case, the required savings drops to 9.9%. It doesn't make that big of a difference either way. I say in the video that if holding cash makes you feel better, it's probably not that big of a deal. I think in retirement too, this is another place I think where the theory and practice can differ a little bit in that in my experience working with clients who are retired and drawing down their portfolio according to the plan that we've come up with for them.

34:46They don't want to be in a position where they are checking their portfolio value relatively frequently and then adjusting their lifestyle based on market returns. And in fact, I have often as a planner tried to insulate them from that by saying things, again, going back to that cash wedge that you put in a portfolio to provide a few years worth of cash flow, because sometimes clients will bring it up. I think it's a natural tendency. They read the news. They know their portfolio is down. They say, maybe I shouldn't go on vacation this year. And I say, well, listen, remember, when we did that plan for you, we did not assume that returns were going to be the same every year.

35:23That's why we did the Monte Carlo. And so, no, you don't have to adjust your spending this year because the markets were down based on our average expectation. And I think that offers a lot of comfort to people in their retirement. and it improves their mental health and their lifestyle as well. So you still have to revisit it. You still have to go back and redo those Monte Carlos once a year and do little course corrections. But you want to keep those course corrections, I think, as infrequent as possible. Because if a client sort of think, well, market's up this year, I can spend a lot of money, market's down this year, I better stay home.

36:00That's not a recipe for happiness in retirement. It's really not. I think we have to be careful with that. I don't think a lot of people will find that palatable. Yeah, no, they don't. We've explained this to people too. There's not a lot of interest in big variable spending plans. Even if it's like, hey, you can spend more throughout your lifetime. It's not very palatable. This one's a quick one. Is there any factor ETF you recommend in Canada like AVUV or AVDV? Is there a reason you didn't include AVES in your factory tilted portfolio? Manulife does have some factory ETFs. I think BlackRock does too.

36:32The Manulife ones are sub-advised by Dimensional. I think actually Vanguard has some stuff too. I'm not recommending any of those. We don't use them at PWL. I've not done proper due diligence on any of them. I just know that they exist. There are products out there. On AVES, we decided at the time, I mean, that model portfolio is many years old now and we have not updated it. But at the time, emerging markets are a relatively small portion of the portfolio. And one of the objectives in building that thing was to keep it as simple as possible, as few holdings as possible, and as few US dollar funds as possible just to keep things simple for Canadians.

37:04And so we just decided it didn't make sense to include it. That's it. Not very exciting. Have you looked at FEQT in any great detail? Because I mean, they have some factor exposure and they tilt to things like low volatility and momentum and stuff, which I know is maybe more controversial and there's some Bitcoin in there and stuff as well. But I mean, as far as like a one fund solution that might give you some factor exposure, it's Canadian, it's low fee. You don't have to stitch together some US ETFs and some higher fee ETFs. I'm curious if you've taken a look at it. For me, the Bitcoin is a turnoff.

37:33I have looked at their factor products. They are much more concentrated than something like dimensional. They're also much higher turnover. They're much more active. They perform quite well and they are targeting real factors. It's not like traditional active management with a factor label. It's quite quantitative. I probably wouldn't use it personally, but I don't think it's terrible. because of the Bitcoin? The Bitcoin and the concentration and the high turnover, there's a lot of things I don't love about it. I think the fact that it's targeting factors that probably should exist is good and it seems to have been able to capture them so far.

38:06So that's all positive, but it's not an implementation that I would prefer to use. And then add the Bitcoin on top of that. And it's another reason for me to stay away. Have fun staying poor, Ben. You've mentioned before, Ben, that in Canada, it's tough to get exposure to factors, but a high yield dividend ETF might be a reasonable proxy for that, right? And I know you mentioned the manual life multi-factor ETFs, but this particular question they were asking about US listed ETFs that are generally world ETFs. And part of the problem there is if you do want to implement some home bias, those Avantis ETFs wouldn't have it if you're a Canadian investor.

38:41So I'm just curious if you have thoughts about taking something like AVGE, which I think is global equity markets from Avantis, and then adding some home bias via VDY or like a high yield dividend ETF in Canada? I guess. I don't know. You could. The trade-offs with dividends are just, you've got the tax inefficiency. If it's in a non-taxable account, I guess it's whatever, but then you've got the reduction in diversification for no reason other than companies are not paying dividends. Similar-ish concerns with the Fidelity stuff, like it's going to be a more concentrated implementation. When you've got low fees and you're using a fund that's not tracking super speculative stuff and you're going to stick with it and you're not going to sell out of it when it does poorly or if it does poorly, it's probably fine.

39:24Someone that does that, are they really going to stick with it and be disciplined and so on and so forth? I'd be a little bit skeptical. There are so many ways to invest successfully. Like yeah, index funds make sense and yeah, some factor tilts can make sense. If someone buys and holds a dividend fund for 40 years, they're probably going to be fine. It's not how I would do it. It's not how I would recommend doing it, but they're probably going to be fine if they stick with it. Good stuff. Next one. When planning for retirement, people often mention the 4 % rule. Ben and the RR crew have had multiple discussions laying out why the 4 % rule is flawed and have offered alternatives such as a variable withdrawal rate, which we kind of just talked about.

40:01How would someone who is early in their career plan for retirement with this in mind? Is it acceptable to use a 4 % withdrawal rate for long-term planning with the understanding that actual withdrawals will vary? I think why the 4 % rule became so popular, at least one of the reasons is it's easy to do the math in your head about how much you need to save for retirement. We had someone from the FIRE movement, his name is escaping me right now. They made a documentary. Oh, that's brutal. He was on the podcast and talked about FIRE. That was a big thrust of it was that, well, the 4 % rule just makes it so easy for us to think about our financial goals and that makes it really easy to save and that makes it really easy to invest and stay invested.

40:40That's all pretty compelling. I think 4 % is probably high, even if you're using variable withdrawals. But if you recognize that, it's probably not the end of the world. I looked at the DMS historical data for a 70-30 portfolio this time and global stocks and US bonds going back to 1900 and found a safe withdrawal rate of 3.5 % for 30 years. I was sitting down at a different time doing this analysis. That's why the numbers are different from the one that I mentioned earlier. The safe withdrawal rate drops to around 3.1 % if you're looking at a 40-year period. That's both with about a 4 % failure rate.

41:16If I switch to amortization-based withdrawals for spending, the failure rate mechanically goes to zero. You can run out of money doing amortization-based withdrawals. Do you want to just explain that quickly, Ben? Because I don't know that everyone knows what amortization-based withdrawals means, but I think we did talk about it with Ben Matthew, but I don't know that everyone listening to this will understand that. It's basically using the Excel payment function to calculate how much you can sustainably spend in each year of retirement based on the expected return, remaining periods of retirement, and the remaining portfolio value with an ending portfolio value objective of zero.

41:49And that will mechanically, it'll change it. The spending amount will change every year, which as we just talked about can be problematic. In practice, you will not run out of money in that case. More properly speaking, you will run out of money, but you will run out of money at the end of the period that you've chosen. That is exactly correct. Yeah. You will run out of money when you expect to. getting there, getting to that certainty about when you're going to run out of money or when the portfolio will be depleted, which itself is problematic by the way, because you don't know when you need to run out of money.

42:17You don't know when you're going to die. If we assume that's no one you can mechanically get there, but the trade-off is you can have more variability in your spending. In this case where we had 3.1 % for 40 years, 3.5 % for 30 years, if I ran amortization based spending. I think for 30 years, the worst case spending is 3.7 % of the starting portfolio on average, but there's a bunch of variability around that. The lowest spending year was 17 ,000. I guess similar to the previous example in real terms, and that's compared to$35 ,000 in the safe withdrawal rate case. But then there are also higher years of spending, which make up for it, but not because it's hard to change your lifestyle materially every year.

42:59But at least financially, that's how it works. Then the other thing is that you don't run out of money. The save withdrawal rate case has a 4 % failure rate. So in that worst case, you are actually running out of money because I allowed for an above zero failure rate. But in the amortization-based withdrawals case, the portfolio is depleted exactly when you expect it to be depleted, like we talked about earlier. All that to say, if you allow some form of variable spending, amortization-based withdrawals being one of them, you can have a higher average spending amount, but it's still below 4%. It's simple math.

43:32And I think if it helps people save and invest and stay invested, that's great. But I think you do have to be a little bit careful. The question was specifically for someone who's earlier in their career. So if you need some kind of real simple rule of thumb that you can keep in your back pocket as a target, I think it's fine. You're talking about withdrawal rates of 3.7%. You're within spitting distance of it. And yeah, it's materially different than 4%. 4 % rule doesn't tell you what your after-tax spending is because is it 4 % from an RSP or 4 % from a TFSA and you're going to have materially different outcomes in terms of your after-tax spending.

44:04But if I'm 30 and I've got 30, 35 years before retirement and I just need to throw a target out there, I think it's fine as a shortcut, as a heuristic. I would never base an actual retirement spending and withdrawal plan on the 4 % rule. But if I'm on the other side of retirement with a long time horizon until I get there and I just want something to aim for, I think it's as good a rule as we can make. I like it too. Like you said, you're not going to base a financial plan on it, but if you're just sort of looking ahead and how many people have you spoken to or younger people are fairly long way from retirement, they literally have absolutely no clue how much they will need to retire.

44:42And there've been surveys about this and people are wildly off the mark, both high and low. If you're just sort of saying, well, how much do you spend this year? Well, I spend$50 ,000 a year. Well, okay, if you had a million bucks at 5%, that's 50 ,000. Just a starting point for the discussion. It might be able to identify people who are saving not nearly enough. If you just kind of look at what you're spending or what you want to withdraw from your portfolio, it's 12 % of your portfolio. Then like, okay, you need to do some math now and figure it out. Not a financial plan, but it is not the worst rule of thumb I've ever heard.

45:17I will say that. I feel like it's a bit maligned unfairly. I don't think Bengen, when he invented it, expected it to be a law. It was just a guideline. When he never called it the 4 % rule either, that was kind of bastardized after the original paper came out. We did an episode with him, episode 135. I talked about that. How do you remember that? I was going to ask this. Sometimes when you guys talk about a previous episode and Cameron, you see this all the time. It's just like episode 241 at minute 17, for those who are listening. How did you know that so fast? I'm not that smart. It's because I just did that video on sequence of returns risk.

45:51In the video, I mentioned Bengen and the episode number, so I had it fresh in my head. Okay, good. Makes me feel better. Anything else on the 4 % rule? It did come up with the whole variable withdrawal idea. The variable withdrawal stuff is so interesting. Bengen, a financial planner, comes up with the 4 % rule. If you ask an economist, it's the worst rule ever. Robert Merton came up with amortization-based withdrawals in 1969, I think. Nobody uses amortization-based withdrawals, even though if you ask an economist, that's what they should be doing. In practice, nobody uses it. Correct. Ben Matthew, we'd had that great episode with him talking about amortization-based withdrawals and why it makes sense.

46:27But you tell it to a client, you tell it to most people, and you're like, yeah, I don't want to do that. There are probably ways to make it more palatable though. I don't know if we talked about this in the episode or if Ben and I talked about it offline. You can smooth it so you're not making big dramatic adjustments. You could probably adjust less frequently, but it could still be big adjustments. I agree with you, Dan. If you've done a really good retirement plan and the person's not wanting to optimize as much as possible, optimize their utility, because most people don't know what that means, then doing the normal way of financial planning with a Monte Carlo simulation, maybe making some adjustments along the way, but planning for more constant spending, it seems to be a lot more palatable to most people.

47:10Buy an annuity. Be done with it. Buy an annuity. Solved. In amortization-based withdrawals, in that life cycle approach to financial planning, the way that you would fix spending is by building a tips or a real return bond ladder. Okay, I don't want that much variable to my spending. Okay, the way you solve for that is by building a bond ladder that's going to pay you exactly what you want as a floor throughout your retirement. But that also can pretty materially reduce the amount that you can spend throughout retirement. I heard this nastiest problem in finance, I think Bill Sharpe said. That's right.

47:45He did say that. Something along those lines. Next one. Dan, you want to read it out? I feel like you haven't read any. This one says, assuming you were starting in 2025, what would your average CAGR compound annual growth rate expectation be for a millennial portfolio that is okay taking on slightly more risk for higher returns given a longer time horizon? average millennial portfolio return over the next five to 10 years, do you think a 10 % total return compounded is realistic? I think we should clarify, is the questioner here just saying he or she is a millennial? Because otherwise, what is a millennial portfolio?

48:25I would guess so, yeah. The return is going to be the same no matter whether you're a millennial or not. But I guess what the person is asking is if you were a millennial and you were investing in an aggressive portfolio, what would you expect? I mean, five to 10 years is not a long time horizon, so let's start from there, but then I'll let you take that one. For a later question, we actually have some data on the probability of stocks and bonds returning above zero over 10 years. I don't have those notes for this question. We do financial planning assumptions. We create expectations that our financial planners are supposed to use to build financial plans.

49:01Right now for a market cap weighted global equity portfolio, it's 6.86 % annualized. So that's notably a lot lower than 10%. We did do an episode, episode 297, which I looked up when I wrote these notes, Mark. I didn't pull that out of my head. We did episode 297 on that topic. And then I also have a YouTube video, why 10 % is not a realistic expected return for stocks, explaining why 10 % is not a realistic expected return for stocks. It is aptly titled. Yeah. Yeah. Yeah. That Credit Suisse data was always one of my favorite things where they compile returns over a century from every country for which they have data.

49:40It's pretty compelling that stock returns in the US have been the best and they have been in the ballpark of 10%. And so people were like, okay, I'm going to pick the single best country and assume that that's normal. How about if you look at the average and assume that that's normal and the number is a lot lower? I think that the rule of thumb that they give, and I actually don't think this is a terrible place to start, is 5 % above inflation. Right now, you get to not far off that 7 or so percent that we're using for our expected return. Again, if you just want a rule of thumb and you want to find out whether your expectations are ridiculous or realistic, that's a pretty good place to start.

50:26It's no mistake that that number is close to the Dimson-Marshton number from that yearbook because we use that number as the anchor of our expected returns for stocks. We give a 75 % weight to that, to the 120-whatever-it-is-something-year historical return for the global market. going back to 1900 through at this point, 2024, I guess, for this most recent update. And then a 25 % weight to the expected return implied by current market valuations. So we're a little bit lower than that historical number overall, because US valuations are so high, it's pushing down the expected return number for that portion of the portfolio, which is a pretty big part of the portfolio.

51:05I think we actually also adjust for the contribution from valuations to that historical number. So if the historical number is 5%, but 30 basis points came from rising valuations, we take that out as the starting point. Anyway, a big part of the number though is exactly that long-term historical average. Before we go on to the next question, Ben, can I see your shirt? Do you have like the Sharpe ratio or something on your shirt? Or is it like Cap Emerson? I just see like the MKT minus R or something. It's got the factor premiums. Oh, okay. There you go. You're so cool. I'm not wearing my market cap shirt, but I'll wear it to the next episode.

51:41Did you wear that for the debate with Dan? A show of dominance? This was the shirt that was sitting on the banister at the top of the stairs this morning. Not planned. Sure, man. He doesn't need a t-shirt to show dominance. There you go. Yeah. Nice. Sorry for the side chat there. It just caught my eye. The joke was that this was a premium t-shirt. I think this came from the Rash Reminder community. Someone's like, we should make premium t-shirts. And I thought it was such a good idea. Or small caps. There's like seven people in the planet that would understand that joke. So we never actually had them made.

52:11We thought about selling them through the Rational Reminder merch store. I don't even know if we still have merch in there. But anyway, we talked about it, but it never happened. So I just went and got one made because I thought it was such a good idea. Yeah, of course. That shirt doesn't exist anywhere else. You got it made. It comes in various sizes. One is small minus big. Oh, good dad joke. We need like a benoomtis. We need like one of those. We need a sound effect engineer here. All right. Question eight, will PWL ever open a branch in the US? What would be the main challenges or obstacles do you associate with any US-based advisors or plan to open branches in the US?

52:49I have a family member to whom I'd like to recommend your services. So with the OneDigital transaction, we are owned by a firm that has an RIA in the US. We have connected with people over there who are very similar to PWL in terms of their approach to planning and investment philosophy. We're happy to make introductions to those folks on the One Digital side. Reach out by email. How do people contact us? Contact form on the website, probably. That probably makes sense. Yeah, mostly. All right. Should I read the next one? Sure. What does the investing literature say about huge piles of cash being parked in T-bills from multi-billion dollar companies?

53:29How does the strategy compare to the time in the market? common wisdom? Is there a point where the risk reward is just too high due to the sheer amount of money generating millions a year in country-backed interest payments anyways? Kind of an interesting question. I think people worry about this. People see big companies holding large amounts of cash and think that maybe they should be holding large amounts of cash too. I think it's important to remember that companies are not like households. They don't typically invest in a diversified portfolio of stocks with their excess cash. So I don't think we can really call them out for market timing in the same way.

54:01They could be holding out for investment opportunities that haven't come around yet. That's what Warren Buffett talks about, for example. It could be precautionary savings. They're hedging against some kind of risk for the operations of the business. One of the other things that comes up in literature on this is agency conflicts where management doesn't want to distribute cash to shareholders. There's a 2012 paper in the Journal of Financial Economics that finds that riskier firms have higher savings, which does imply a positive relation between expected equity returns and cash holdings, which is interesting.

54:32The paper does find that to be true empirically, that higher cash holdings are associated with higher expected returns. Buffett, like I mentioned, does talk about Berkshire Hathaway's cash. He was asked about it at the 2019 shareholder meeting. He says that, yeah, investing in an S &P 500 index fund could be a reasonable strategy. He hasn't done it, but whoever takes Berkshire over after him, he's like, they may want to consider it. He does note that being in index funds in 2007 or 2008 might've changed the way they were able to respond to that situation because they did make some pretty opportunistic moves.

55:06Right now, Buffett looks quite smart because they've got a ton of cash and they sold out to Apple basically at the top. They've got a huge pile of cash right now when the market's crashing. We'll see what Buffett's next move is. I'm quite interested. After COVID, a lot of companies did start hoarding a lot more cash. There was a post from the Federal Reserve Bank of Kansas City that looked at this, why are companies holding cash? They found that investment opportunities, which they measured by the ratio of a firm's market value to its book value, explains the largest portion of the cash ratio, both before and after the pandemic.

55:39I suggest that investment opportunities are a big one. There are lots of interesting reasons why companies might hold a lot of cash. I don't think any of it matters to a retail investor making decisions for their household. I agree. They're really not parallel, are they? Their risks are very different, and I wouldn't read too much into it. I agree. Let me read the next one here. What is the probability that over a period of 10 plus years, an addition of bonds to a portfolio will enhance the returns? To rephrase the question, other than serving as a behavioral anchor, do bonds add any actual real value to a portfolio nowadays?

56:15If you choose to elaborate even more, Vigro, for example, also includes international bonds to the mix. Does that change your answer in any meaningful way? We obviously covered the big part of this already, but you've got some additional information here to add, Ben. You said it earlier, Dan, bonds are not really there to enhance returns. That's just not why you invest in bonds. Scott Cederberg does have another paper looking specifically at long horizon asset returns for stocks, bonds, and bills. And they have data in the paper for the 10-year horizon specifically. So I looked at that to answer this question.

56:48They find that 30 % of their simulated outcomes have negative real returns for bonds at a 10-year horizon. while it's only 18 % for international stocks and 22 % for domestic stocks. So they're all pretty risky at a 10-year horizon, but in real terms, as with their longer-term data, bonds are a little bit riskier. An interesting thing is that even in the tails, so if you look at the first percentile outcomes, the worst outcomes at the 10-year horizon, bonds again, look worse than stocks. Now it is possible that bonds zig will stock zag, which gives you a diversification benefit. But the interesting thing, and I think one of the big things they find in their research is that that largely goes away, or at least is diminished at longer horizons.

57:29At a monthly horizon, the correlation between stocks and bonds has a correlation coefficient of 0.18. But if you look at the 30-year horizon, that goes up to 0.46. That's that, I guess. I do think it's important that in nominal terms, so not accounting for inflation, bonds offer stability, which matters for behavior as we've been talking about. Longer maturity real return bonds can offer a perfect inflation hedge, but can also be very volatile in the short term. The other component being the question about international bonds is interesting. On the one hand, the fixed income component of your portfolio is intended to be there for safety of capital, right?

58:10It's there to reduce volatility. And if you have international bonds, you have either one of two things. You have an additional currency risk, usually, or you've hedged that risk, which then usually comes with an additional cost. And I expect, I don't know the answer to this, maybe you know, but the cost to hedge back to your home currency, that cost likely eats up a good chunk, if not all of the delta between interest rates in that foreign currency and interest rates at home. You probably end up somewhere in the same place. And I'm not sure that you would add any sort of meaningful source of diversification if you add international hedged bonds to a portfolio.

58:40I don't know if either of you have thought further about this, but I'd be curious to hear what we have to say. I agree with you that if you introduce currency risk, then you've kind of defeated the purpose. Because if the goal of bonds in your portfolio is to reduce volatility, once you increase or once you add currency exposure, you lose that. The portfolio is probably more volatile now. And then the second part is, like you said, well, you can hedge the currency. But if you hedge the currency, the additional diversification benefit is really minimal. The only thing I would say would be if you were investing in bonds that had any meaningful risk of default, then if I lived in a country where I was genuinely concerned that the federal bonds would default, then I would want some international fixed income with currency hedging.

59:29In a country like Canada or the US, where that's a remote possibility, I think you can just safely invest in domestic bonds only, and then you don't have to add the currency hedging. That's what we do. We don't use any kind of international bonds, except if you're holding a fund like VGRO or VBAL, it's built in. The iShares versions, interestingly, of those asset allocation ETFs include only US bonds and no international bonds. Personally, I don't think you need either one. Yeah. In the case of Vanguard, they actually have a bit of a form of holding tax cost on their international bonds as well, which makes it a little bit tougher even to justify.

1:00:09Dimensional does use international bonds, but it's for a different reason. They're doing a variable maturity and a variable credit strategy. And being global, it gives them more opportunities to look for places where those things may exist, where there's a wider credit spread or where there's a steeper yield curve, it's a little bit different. It expands the opportunity set, but they're not targeting any benefit from currency exposure and like that because it's all hedged back. This is a very different situation because it's more of an active strategy and expanding the opportunity set can improve the expected outcome.

1:00:39Last one. This is a question from a listener who there's a long preamble asking whether we pick stocks or use ETFs. I kind of cut that out while I just paraphrased it. So question, if you manage portfolios using ETFs, how would you justify that choice to other advisors in your group slash firm and to clients who are used to having individual stocks? The understanding that it is almost impossible to beat the market takes a lot of time to develop and it seems hard to do within a few client meetings. I'm getting a lot of mixed opinions with all the information I'm taking in from the financial services industry, my studies and the podcast.

1:01:13So your input would be very interesting to hear. PwL, there's no needing to justify things to each other. We talked about this beginning of the podcast. Everybody at our firm is either using market cap weighted ETFs or dimensional funds. That's the biggest difference between any two client portfolios is they might hold DFA or they might hold market cap weighted ETFs. Many client accounts hold a mix of the two. It's not something we spend a whole lot of time justifying to each other. We we agree on the basic premise of we can't beat the market. We should keep fees and costs low and focus on things that we can control.

1:01:49We're all on the same page on that. I think it would be hard to be an advisor that thinks like we do and be at a firm where the guy in the office next to you is making fun of you for not picking stocks. I've heard from people where that's the actual situation. You're the butt of the joke, being the guy using index funds while everyone else is trying to beat the market. I think that'd be tough. On the client aspect, Cameron and I learned pretty early on in my time at PWL that we were not going to change people's minds in a meeting. We used to do some traditional advertising. Cameron and I used to do a radio show in Ottawa a long time ago.

1:02:22We'd go on there on the weekend to do this talk show thing where we'd get asked questions about investing and people would call in and it was kind of fun. But we got people coming to talk to us through that and we would never talk too much about indexing and things like that. It was nothing like this podcast. And so people would come in for meetings and they would expect us to be picking stocks or picking actively managed funds or whatever. And those meetings never went well. We were just like, oh no, yeah, we don't do that. We use index funds. People would look at us like we were crazy. You mentioned this earlier, Dan.

1:02:49We started sharing information through content and people saw exactly what we do and heard us explain exactly why we do it and came to meet with us because of that. It just made everything so much easier. There was no justifying. There was no explaining. There was no selling. I know exactly what you do and that's what I want. That's why I'm here. So that was a big shift for us. But trying to change someone's mind, if someone comes to PWL, we talked about this earlier too with index funds and dimensional. If someone shows up expecting one thing and you're like, no, I actually do this, it's going to be really hard to change their mind, no matter how well you can justify it.

1:03:24I think that's exactly why we have never gone that sort of route of traditional advertising after those sort of initial experiments. We were chatting a bit about it earlier. I would say that the same is true for referrals. So very often, you know, I'll be working with a client for a number of years. They're very happy with the service. And so they'll recommend us to a friend or a family member. And then that person will call and just say, Hey, I work with my friend or my family members. So-and-so they're one of your clients. They're really happy. I'm interested in coming on board too. Well, the reason that they got referred isn't because they're particularly attracted to passive investing, whether it's factor market cap, they don't know what the difference is.

1:04:07They just heard that you provide good service. And so you start to have the meeting and then they'll say things or you're like, what stocks are you buying these days? And we're like, whoa, we have to take a huge step back here and make sure that you know what we do. And I will say I've had occasional success because some people just aren't really ideological, are willing to listen to you. And if they trust you, they will believe what you're saying. And And then maybe they'll even read up on it. But yeah, if you have to try to convert someone who feels strongly is just dead in the water. It's never going to happen.

1:04:38We'll just move on. Just sort of say, I don't think we're a good fit for you. I don't know I've ever come across anybody that's not an advisor that has that strongly held of an opinion. We must have individual stocks to try to beat the market. And here's why. Unless they're like a very highly educated person or an advisor, I can explain to people in 10 minutes why that doesn't make a lot of sense. So this person's comment that it takes a few client meetings. I think this individual, maybe they work for a firm and they're having conversations with fellow advisors and there's some cognitive dissonance there saying I was trained a certain way and it all made sense.

1:05:08And now I'm hearing you guys talk about this other thing. And I'm taking that information back to my colleagues or my boss and they're hand waving it away. So they might be caught in the middle. And I've been in that exact situation before. And I'm sure many advisors listening to this podcast have. And Ben, I think you have as well. Dan, I think you came about it another way because you were writing about index funds before you became an advisor. But it's a really difficult spot to be in. I'll give you my opinion. This entire industry was built on product sales. And so we come from an industry where traditionally it's based on commission, it's based on product sales, and there's fees baked into a lot of funds.

1:05:39And most of these funds were actively managed mutual funds. So if you've grown up in a shop that traditionally operated that way, and you trained that way, and you were there in the earlier years, and you're kind of older, and you're maybe got five or 10 years left of retirement, you're not going to upset the apple cart. You're also going going to have a very difficult time just personally admitting to yourself that what you've been doing for 20 or 25 years might have been, I don't want to say wrong, but there might have been a different way. And it's much easier to just hand wave that away. And the other thing is if that turns out to be true, and you've spent all of your time with clients, and they believe and you've convinced them that the value that you bring to those clients is simply picking stocks, it's going to be a really empty void to admit to yourself that that whole thing isn't true.

1:06:21But it's going to be just as hard to admit to clients that I don't bring you any actual value through my stock picking. And I haven't been doing things like retirement planning and tax planning and estate planning. And so I think there's a lot of advisors out there that keep themselves busy by talking about the portfolio all the time, doing things in the portfolio and tinkering under the guise of, look, I'm doing something for you that you can do on your own. And also would just really have a tough time admitting that if I'm not doing this, I really don't know what I'm charging my clients 1 % for.

1:06:49I don't mean to paint a bunch of people with a brush, but I've been in that exact situation where I said, I'm flipping to index funds. And I've had advisors at that firm I worked for go, there's no way you can show a client a statement with one thing on it. You just can't do that. They're going to fire you. And I said, no, I don't think they are. And they didn't. Bit of a rant, but that's my strongly held opinion on the topic. I have heard a little bit of it. I don't want to say from genuine prospective clients, but just in conversation, people would say things like, so if you don't pick stocks and you don't tell people when to get in and out of the market, what the hell are they paying you for?

1:07:21Because that's what they've grown up believing too. It's not just the advisor community, it's investors themselves who've worked with advisors who think, isn't that what your job is? And when you say to them, you know, no, we just try to capture market returns and we add value in other ways. They don't get that until they've seen it. We used to joke about this all the time is that people used to come to us for the investments, but they'd stay for the planning because they would come in thinking, what you're going to do is you're going to enhance my returns and you're going to build this amazing portfolio for me.

1:07:53And it's like, yeah, we are, I guess. But that is in the first six months, we basically set that up for you. Going forward, you're not going to stay with us just because we told you what ETFs to buy. We publish our model portfolios online, if that's all you want to know. It's not a secret. If they're going to stay, we're going to have to demonstrate values in other ways. But it's very easy to do that when you're working with a person. it's harder just in a casual conversation or when you're sitting across the table because people don't usually appreciate the value of planning until they've actually had it.

1:08:26This whole thing about you don't know what you don't know. I think it's only after people have had a very good plan done for the first time that they go, wow, that is not something I ever got from my previous advisor. So it takes a bit of time. But again, that also presumes that you're already working with the person that's the client. It doesn't work so well in talking to a prospective client. I did a video on that a few years ago because I got the same question. Episode 247.3. I don't know. I don't know. I don't even remember the title of this one. I didn't look it up beforehand. People say that to me sometimes in real life, I'll meet someone like, how do you remember all the stuff that you talk about in the podcast?

1:09:01I couldn't remember. I'm like, man, I wrote it down on a page and read it. I have notes. Yes. Awesome. All right. I think that's good. After show. After show indeed.

1:09:17so the speva year end 2024 for canada report came out today the us one always comes out before the canada one so the us one's been out for a while and the speva report is the s &p indexing versus active basically what they do is they track a number of funds in the universe against a benchmark there's a ton of data in the paper there's one chart i always like to look at because it summarizes it very, very well. And it just shows one, three, five, 10-year returns. And it shows the number of funds that failed to beat their benchmark in a particular category over those timeframes. And the results are never surprising.

1:09:53It's always the same thing every single year. There's some criticism, I think, that's maybe valid against the construction of the report in terms of how they include certain types of funds in that universe. But I also think it's very, very telling. So just quickly, I was looking at the year-end report. For the 10-year period, I think at the end of 2024, the Canadian equity category, which is benchmarked against the S &P TSX Composite Index, 95.5 % of funds in that category failed to beat the TSX over the 10-year timeframe. The vast, vast, vast majority. In the Canadian-focused equity, which I actually don't know the difference off the top of my head, but the Canadian-focused equity, I think, is kind of like a balanced fund that uses Canadian and US, like it's North American, but with a heavy tilt towards Canada, like half Canada, literally 100 % of the funds in that category failed to be their benchmark over 10 years.

1:10:43And the rest of the different categories of US equity, global equity, international equity, the numbers vary, but they're all very, very similar and paint a very similar story. So I always get excited when this report comes out and it just kind of further reinforces a lot of the stuff we talk about here on the podcast. So by the time this episode comes out, it's probably old news, but I just thought it was great that it came out today and I got a chance to go through it and paint the same story. Those 10-year time horizons are really telling. That number is always in at least the high 80s, if not higher.

1:11:11And once in a while, as you said, you see it 100 % or close to it. The obstacles are pretty tough to climb over, that's for sure. And I think this is what people don't get about managing a portfolio. You see these people on Twitter all the time, like, bro, I got 336 % last year. What are you talking about? Like, okay, Yeah, you've solved it, man. Good job. Your time horizon is 60 years. The longer your time horizon, the lower the probability that you're going to get market being returns over that total time horizon. And it's just borne out in these reports for the longer the time horizon. The US one's, I think, over 20 years, I want to say.

1:11:42So they've even longer data, but it shows the same thing. Like the longer the measuring period, the fewer funds outperform their benchmarks. And that's logical if you follow the podcast and how we think about markets. but it's just really interesting to just watch it happen every six months. The report comes out and you're like, exactly what I thought. It would be interesting to check something like the Vanguard 500, which is like the first index fund that was available from Vanguard, which dates back to like the mid seventies. First of all, how many funds that were around in the seventies are still around is probably a tiny number.

1:12:17And how many of those beat that benchmark? Now, granted its benchmark is large cap US stocks. a lot of funds would have other things in there. It's an almost insurmountable barrier over a 40, 50 year time rise. Totally. People don't get it. And we've talked about this, I think maybe in a recent episode where people don't want to settle for average returns. What are you talking about average? Like literally you are at the top of your game. If 100 % of publicly managed funds are unable to beat you, you're incredibly, incredibly talented. If you've managed to sit in an index fund and outperform all of these experts with their deep resources and everything else.

1:12:53Not average at all. I think the Canadian SPIVA does overstate it a little bit because they have a lot of A-class funds in there. So there's an additional 1 % fee that's coming out of the returns. I think Bessenbinder also talked to us about some of their methodology, in his opinion, could be changed a little bit. When he did it for US funds, I think he found that 70 % underperform over the long-term, 30 % outperform. And the SPIVA in the US... I was damning with faint praise. It's actually not that bad. It's only a 70 % failure rate. He's correct. I've heard people say to it, ETFs are almost always going to be in the category of ones that lag their benchmark because you charge five basis points, you're going to lag the benchmark usually by five basis points.

1:13:33It's a matter of degree, which is not captured in that research. Are you underperforming by five basis points or 200? But again, it's not meant to be the be all and end all of the argument, but it is a big data set with a pretty long history of tracking this and the news is not good. Yeah, no, it's not good. I don't know if it was Cliff Asinus and AQR or if it was Alpha Architects that did a paper that tried to measure the degree of underperformance. They came around 1%, which was not shocking. You make a great point. Index funds are guaranteed to underperform their benchmark by a really, really, really tiny amount.

1:14:10And that's acceptable. When you deviate from that, the degree to which you underperform can be devastating. Some of these funds probably just barely, barely underperformed, but some of them might've underperformed by 5 % annualized over the measurement period. In which case that's a big, big risk that you're taking to try to get performance that could also only be marginally better than the benchmark for the ones that actually beat it. And I just don't understand why people would take that trade off. They do have the degree in there. They have the 10-year performance for the fund and the index.

1:14:42In the speaker report? Yeah. Page 12. Nice. They have it by asset weighted and equal weighted. But if you look at, it's report four on page 12. S &P TSX composite 10-year return 8.65%. Canadian equity funds asset weighted 6.91%. The S &P 500 one's nuts. S &P 500, 10-year return, 15.58%. US equity asset weighted, 11.38%. Oh yeah, massive. Ouch. Net of fee, right? Yeah. And if you look at the US data, the gaps will be smaller because their fees are generally lower and I don't think they have as many commission-based funds in their sample. One of the arguments I always hear is, well, yeah, no, the US is super efficient.

1:15:23Nobody's in the US market, but other markets are where the opportunities are. So if you just look at the Canadian equity, what did we say? 95 % underperformed over 10 years. What was the gap here? So the 10 year S &P TSX composite over 10 years average performance was what? 8.65 versus 6.54 for the fund. So you're talking at 2.1 % annualized difference over 10 years. Massive. it's no joke a lot of that could be fees savage though because fees in canada are still pretty darn high speed was always fun to talk about another thing that i want to talk about is the tooth fairy and inflation so i want to ask you guys if you were mad i don't even know if you remember this but when you guys were kids and your baby teeth were falling out how much did the tooth fairy bring you per tooth 50 bucks yeah sure per tooth a nickel yeah i have no idea You don't remember?

1:16:20You probably still have your baby teeth then. That's why. What? What's the cost now, Mark? So this is what I was trying to figure out. So my son lost his first tooth last night. Seven. He lost a bit late. But I seem to remember it was like a dollar when I was a kid. This is 35 years ago. So I was asking around and it's 10 bucks now. It's 10 bucks a tooth. That's a respectable answer that I got from a couple of my friends. I was like, yeah, no, 10's about right. And I asked Kelly, a friend of mine who works at PWL, and she was saying a friend of hers gives 20 for the first tooth and then five for each additional tooth.

1:16:53I didn't actually work this out. I just thought about this right before we started recording, but I'm curious to see what the inflation rate on the tooth fairy is over the past 35 years starting a dollar up to 10 bucks. It's pretty meaningful. I think it outpaces inflation. CPI. Yeah. I think you're creating incentive for your kids to go to school and beat somebody up and knock out a few teeth and put it under their pillow. I actually have the tooth in my pocket still, I think, which is super weird, but I just remember that. It is pretty weird. I don't know what to do with it. You throw it in the garbage.

1:17:19Like do you keep it? It's a tooth. We have not given our kids money for any of their teeth falling out. Interesting. I just told them the tooth fairy is not real. Oh my God. Are you serious? Yeah. It's on brand. I'll give you that. Same as Santa Claus. Really? Guys, Santa Claus is not real. That's dumb. What age did you tell them that Santa's not real? As soon as they could understand what I was saying. Savage. Wow. They all love it. They love what? knowing that Santa Claus isn't real and how ridiculous it is. They actively love that Santa's not real. Do you know how many other kids they're going to tell that Santa's not real and that their dad, who's a famous podcaster, told them so?

1:17:57You've ruined the imaginations of thousands of children across the world, Ben. I told them not to tell other kids because they don't want to upset them. They get it. They respect the other kids' desire to want to believe Santa's real. All right. No judgment then. Makes sense. Okay. One last thing. I recorded the Wealthy Barber podcast with David Chilton, the OG. And I called him the OG on the podcast. He's like the old guy. And I was like, oh yeah, that's not what I meant. You're like the original gangster. So that was really, really cool. So he actually wrote us a short testimonial for Wealthier for the book that Dan Salomon and I just wrote, which was like an incredible experience.

1:18:28I'm chatting with Dave Chilton on the phone, walking through the grocery store in Squamish about my book, like what world do I live in? Now I'm talking on the rational reminder about it's nuts. But So he invited me to talk about TFSAs versus RSPs because we recorded an episode and he listened to the podcast and really liked it. So it was kind of a shorter episode. He's doing shorter, punchier episodes interspersed with the longer episodes, but that's going to air on March 25th. And I think this episode that we're recording today will be out before then. So if you're listening, then it'll be a short Wealthy Barber podcast with me talking about TFSAs and RSPs coming up.

1:19:01Yeah, March 20th. This one will be out. Nice. No new reviews for a while on Apple Podcasts, which is where we usually pull reviews from. And it's still where most of the downloads come from. So if you're listening on Apple Podcasts and have not left us a review, we would love to hear from you as always, and we'll read it out on a future show. However, someone sent us an email a while ago saying that Podcast Addict, which is another podcast platform, they also have a reviews engine. I didn't realize there may be other podcast platforms that have review engines that I haven't seen before, but I thought we'd read some of these out because they've never been read before.

1:19:34This is from December, 2024. Some of these are a bit of a time capsule because they go back years. This is from Taylor DND. If you asked me in 2019 how I felt about investing, I'd say overwhelmed and uninformed. I can't say that my turnaround has been entirely because of Rash Reminder, but their work along with Ben Felix's YouTube channel have played an outsized role. From August through December, 2024, I listened to all 358 episodes. That is wild. August to December, That's a lot of podcasts listening, including their unfinished miniseries on cryptocurrencies. Thank you for the reminder. That is, in fact, an unfinished project.

1:20:09We'll get to it one day. The PWL crew has a wealth of information on personal finance investing and the pursuit of the good life. Outstanding. I want to read this one from Canadian Cat. So it says, great podcast, two very insightful and grounded hosts. And I immediately thought it's got to be talking about me and Mark. But then I looked at the date and it's 2022. So it's two other guys. But anyway, who work hard to explain the more complicated areas of finance and technical analysis of financial models worth the listen. Indeed. And I'm sure they're not talking about technical analysis in the fundamental sense of reading charts and using oscillators and Ichimoku clouds and stuff.

1:20:49It's analysis that is technical. And the podcast used to be a lot different back then. Yeah, exactly. Okay. The next one's from Mariana Enrique. Your end of year episode was the perfect way to say goodbye to 2021. So this review is written in January of 2022. I have listened to it twice and liked how you captured key takeaways of multiple interviews in one show. Looking forward to more episodes like this in 2022. We kind of killed those year end episodes. If only we knew what the market was going to be like in 2022, we would have shared that at the time, but alas. That one makes me feel bad about killing the year end format of the clip episodes that we used to do.

1:21:25Last year was the first time you didn't do that, right? 2024? There's just a lot of work and Cameron did most of it and he's busier with other stuff. So I wasn't going to do it. Cameron would take like two days to collect all the clips and go through every episode. I was like, man, you're impressive for doing this. Yeah, no kidding. All right, last one from Goodyear. This is from June 2021. My absolute number one financial podcast. They cover specialized topics in a precise and educated manner while still spending time on how money and financial planning should serve a happy, meaningful life. Only a small percentage is Canada specific.

1:21:57As a USA resident, I find almost all of it applicable to me. Cool. That's a topic we haven't covered as much recently. The good life stuff. I do want to write an episode on investing in your health. Probably trying to do that sometime this year. It's a good one. All right. Anything else? Don't think so. Cool. Thanks everyone for listening and we'll see you next time.

1:22:22You