The Rational Reminder Podcast

Goal-setting is essential for personal and professional growth, helping individuals clarify their priorities, stay focused, and achieve success. We are pleased to welcome guests Samantha Lamas and Danielle Labotka to help us unpack the topic of goal-setting and how it relates to finance. Samantha Lamas is a Senior Behavioural Researcher at Morningstar and a recipient of the Montgomery-Warschauer Award for her research in financial planning. Her work centres on investor engagement and the factors that influence an individual's decisions when it comes to investing and managing their finances. As a Behavioral Scientist at Morningstar, Danielle Labotka examines the impact of various cognitive and linguistic factors on investors’ financial decisions. Her research involves studying investors' behaviours, preferences, and attitudes in both everyday and financial planning situations. In our conversation with Samantha and Danielle, we gain insights into financial behaviour and decision-making, the biggest barriers to goal-setting, what deeper goals are, and how to focus on them. Then, we speak to Mark McGrath, who is licensed in insurance, holds several professional designations, including a Chartered Investment Manager and a Certified Financial Planner (CFP), and has more than a decade of experience in the industry. Mark tells us the emotional story about his dad, what motivated him to share his experience, and why you need to start thinking about retirement now. Finally, we review a past episode with Dennis Moseley Williams, a book from Will Storr, and go through feedback from the Rational Reminder community. Tune in now! Content Warning: Some of the discussion in this episode is about suicide. If you or someone you know is struggling with thoughts about self-harm, help is available. In Canada: 1.833.456.4566 or at https://suicideprevention.ca/resources/   Key Points From This Episode:   •    How we became acquainted with the Morningstar team and background about our guests. (0:02:29) •    An outline of the common obstacles faced in identifying the correct goals, and how it impacts financial advisors. (0:06:08) •    Danielle explains the approach used to analyze qualitative data and how the results compared to the Rational Reminder findings. (0:09:07) •    How the goals identified changed as respondents progressed through the survey, and insights gained from the process. (0:11:23) •    The main takeaway from the analysis of how people should approach goal-setting and how financial advisors can leverage the research findings. (0:17:53) •    Outline of current gaps and what is the next step for behavioural research. (0:20:59) •    Find out what compelled Mark to share the tweet about his dad and he takes us through the story. (0:23:00) •    How the experience regarding his dad has influenced his work as a financial advisor. (0:40:50) •    Mark shares how the experience has impacted his approach to life. (0:42:25) •    A final takeaway message that Mark has for listeners. (0:44:23) •    Highlights and key takeaways from a past episode with Dennis Moseley Williams. (0:45:52) •    This week's book review of The Status Game, and why it is a must-read. (0:48:44) •    Research findings concerning macro socio-economic status and work ethic. (0:54:03) •    We discuss interesting news and events, riskless assets, the advantages of Twitter, and the latest reviews for the show. (0:57:05)     Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-245-deeper-goals-and-retiring-with-purpose-discussion-thread/22660 Book From Today’s Episode: The Status Game: On Human Life and How to Play It — https://amzn.to/40vVLix Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.  Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Samantha Lamas on Twitter — https://twitter.com/SamanthaLamas4 Mark McGrath on Twitter — https://twitter.com/MarkMcGrathCFP Samantha Lamas on LinkedIn — https://www.linkedin.com/in/slamas/ Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ 'Mining for Goals' — http://static.fmgsuite.com/media/documents/8b5abbe8-0bf5-4321-9a4a-e04a82a11597.pdf

When it comes to the world of investing, there are many options available to consumers. The range of financial products available can be overwhelming and confusing. Additionally, investing is not only about the rate of return but also about what you are investing for and why. To help us unpack this complicated subject is Charles Ellis, a highly respected investment consultant and founder of Greenwich Associates, a strategy firm focused on financial institutions. He is also a famous author and has written several books on the topic of finance and investment, such as Winning the Loser's Game which provides readers with insights into making the best financial decisions in an increasingly unpredictable market. In our conversation, we discuss why indexing is the better investment option, how the investment space has changed over time, tailoring your investment decisions to suit your needs and desires, and why looking at the bigger financial picture is essential. We also delve into why investors can be their own worst enemies, what advisors and investors should avoid, the theme of his book Inside Vanguard, various investment strategies, and much more. Tune in and hear insights on indexing, wise investing, and how to win the ultimate game from industry legend Charles Ellis!   Key Points From This Episode:   •    Charles explains what he means by ‘a loser's game’ and provides examples. (0:03:51) •    How the perception of active management has changed since publishing Winning the Loser's Game. (0:08:00) •    He unpacks how the market and market competition has changed since 1975. (0:10:33) •    Whether the sentiment towards active management has become too negative. (0:17:24) •    Discover why Charles thinks indexing is the best and preferred investment option. (0:19:22) •    His opinion on low-cost systematic strategies that seek higher expected returns in the market by owning riskier stocks. (0:24:55) •    Why investors and advisors should avoid trying to time or beat the market. (0:27:19) •    The value and importance of a well-defined investment policy statement. (0:33:34) •    Find out how investors can protect themselves from themselves. (0:34:58) •    An underappreciated approach that investors can take to be more successful. (0:36:26) •    Hear whether fee differentials between index and active strategies are understood well. (0:37:17) •    Charles shares how his mindset has changed over the course of his career. (0:41:47) •    Find out if institutions and endowments respect low-cost index investing. (0:42:42) •    What he thinks about bringing exotic asset classes to retail investors. (0:44:45) •    Reasons why investment management should be considered a full-time profession. (0:46:50) •    The biggest opportunities he sees in future for investment management. (0:49:20) •    Hear about the difference between price discovery and value discovery. (0:50:09) •    Discover why Vanguard has been so successful as a company. (0:53:27) •    The theme of his book, Inside Vanguard, and if it relates to other businesses. (0:58:17) •    Lessons he has learned regarding personal motivation and productivity. (1:00:28) •    Charles tells us his definition of success. (1:03:35) •    An outtake from the episode: the role of luck. (1:05:21)     Participate in our 23 in 23 Reading Challenge: 23 in 23 Reading Challenge — https://rationalreminder.ca/23in23 23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-244-the-losers-game-episode-discussion/22558   Books From Today’s Episode: Winning the Loser's Game: Timeless Strategies for Successful Investing — https://amzn.to/3FrNKmt Inside Vanguard — https://amzn.to/3TlwrcG What It Takes: Seven Secrets of Success from the World's Greatest Professional Firms — https://amzn.to/3Thgm7z Capital: The Story of Long-Term Investment Excellence — https://amzn.to/3FpiHb5 Figuring It Out: Sixty Years of Answering Investors' Most Important Questions — https://amzn.to/3LknZZ8   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.  Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore

Debt can play an essential role in financial planning in several ways, such as financing large purchases, building credit, managing cash flow, and leveraging investments. However, it's important to remember that taking on too much debt can also have negative consequences that could impact your financial future. Therefore, it's vital to carefully consider your options and ensure that any debt you take on is manageable and aligns with your overall financial goals. In this episode, we talk about the essential aspects of debt and the role of debt in financial planning, and we unpack the two major forms of debt. Learn about debt in financial planning, consumption smoothing, the mindset and psychology behind debt, the risk that comes with debt, how credit cards impact how people interact with their money, integrated financial planning, and important aspects of mortgages. We also review a past episode with guest Dan Solin and the book, The Five Most Important Questions, which provides readers with a tool for self-assessment and transformation concerning productivity in the workplace.   Key Points From This Episode:   •   The role of debt in financial planning and the distinction between good and bad debt. (0:08:16) •   A brief overview of mortgages, credit cards, and their associated risks. (0:11:31) •   Consequences of borrowing money at a high-interest rate, and how financial literacy impacts effective debt management. (0:13:20) •   The psychological aspects related to debt and consumer spending. (0:16:10) •   Outlining the psychological interactions of established debt on mental well-being. (0:18:15) •   Credit cards, what they offer, and their psychological effect on paying. (0:22:10) •   Costs associated with not using a credit card. (0:28:45) •   Why mortgage debt is considered good debt for the borrower and the different facets of mortgages to consider. (0:32:48) •   The difference between fixed and adjustable mortgage rates and which is better. (0:37:25) •   Highlights and key takeaways from a past episode with Dan Solin. (0:46:06) •   A review of the book, The Five Most Important Questions and why we recommend it. (0:47:47) •   How the questions from the book relate to household decision-making. (0:51:18) •   A testament to Dan Wheeler and his contribution to the field of finance. (0:52:55) •   Recent interviews with Ben, upcoming guests, other interesting financial content, and our book recommendations. (0:56:33) •   A 23 in 23 book challenge update, feedback on the show, and upcoming meetups. (01:01:35)       Participate in our 23 in 23 Reading Challenge: 23 in 23 Reading Challenge — https://rationalreminder.ca/23in23 23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-243-the-role-of-debt-in-financial-planning-discussion-thread/22433   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore   Extra References: The role of debt 'Life Cycle, Individual Thrift, and the Wealth of Nations' — https://www.jstor.org/stable/1813352 'Diversification Across Time' — https://jpm.pm-research.com/content/39/2/73 'Debt literacy, financial experiences, and over indebtedness' — https://www.researchgate.net/publication/282436829_Debt_Literacy_Financial_Experiences_and_Over_Indebtedness 'Restoring Rational Choice: The Challenge of Consumer Financial Regulation' — https://scholar.harvard.edu/files/campbell/files/elylecturejan182016.pdf 'Attitudes towards Debt and Debt Behavior' — https://onlinelibrary.wiley.com/doi/abs/10.1111/sjoe.12419 'Expenditure Cascades' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1690612 'Consumer debt and satisfaction in life' — https://www.researchgate.net/publication/341564180_Consumer_debt_and_satisfaction_in_life 'Good credit, bad credit: The differential role of the sources of debt in life satisfaction' — https://onlinelibrary.wiley.com/doi/full/10.1111/joca.12388 'Debt and Overindebtedness: Psychological Evidence and its Policy Implications' — https://spssi.onlinelibrary.wiley.com/doi/full/10.1111/sipr.12074 'Winning the Battle but Losing the War: The Psychology of Debt Management' — https://www.researchgate.net/publication/249644425_Winning_the_Battle_But_Losing_the_War_The_Psychology_of_Debt_Management 'Reducing debt improves psychological functioning and changes decision-making in the poor' —https://www.researchgate.net/publication/332472709_Reducing_debt_improves_psychological_functioning_and_changes_decision-making_in_the_poor   Credit cards 'The Effect of Payment Transparency on Consumption: Quasi-Experiments from the Field' — https://www.jstor.org/stable/40216497 'Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay' — https://www.researchgate.net/publication/233496571_Always_Leave_Home_Without_It_A_Further_Investigation_of_the_Credit-Card_Effect_on_Willingness_to_Pay 'Present-Biased Preferences and Credit Card Borrowing' — https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/3531/AEJ_Meier_Sprenger.pdf 'How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices' — https://www.jstor.org/stable/10.1086/657331 'Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in the United States and Canada' — https://www.bankofcanada.ca/2021/02/staff-working-paper-2021-8/ 'Popular Personal Financial Advice versus the Professors' — https://www.nber.org/papers/w30395 'Buy Now, Pay Later Credit: User Characteristics and Effects on Spending Patterns' — https://www.nber.org/papers/w30508   Mortgages 'Report of the Household Finance Committee' — https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/HFCRA28D0415E2144A009112DD314ECF5C07.PDF 'Household Risk Management and Optimal Mortgage Choice' —https://www.jstor.org/stable/25053944 'Failure to refinance' — https://www.nber.org/papers/w20401 'A Model of Mortgage Default' — https://scholar.harvard.edu/files/campbell/files/mortdefault13022014.pdf  

The intersection between economics and psychology makes the subject of personal finance complex. To help us elucidate this topic is personal finance reporter at the Globe and Mail and the author of the bestselling book "Money Like You Mean It, Personal Finance Tactics for the Real World.", Erica Alini. Her journey into finance journalism began when she started working for the Wall Street Journal immediately after the financial crisis of 2007/08. Since then, Erica has become an accomplished writer and journalist, having worked for many respected organizations. She is also the author of a best-selling book, Money Like You Mean It, which provides readers with a nuanced understanding of the economic forces that shape financial struggles and how to overcome them. In this conversation, we talk to Erica about the importance of knowing yourself and your debt, the money bucket system, and the definition of financial abuse. We also discuss the various types of debt traps people should avoid, the dangers of micropayments, and what to be aware of when looking for a mortgage, as well as advice for finding a reliable mortgage broker, the avalanche versus the snowball model, and much more. Tune in to discover how to take back control of your finances and avoid the burden of debt with personal finance expert, Erica Alini.   Key Points From This Episode:   •    Why Erica thinks Canadians have so much household debt. (0:02:24) •    Strategies that people can implement to avoid the debt trap. (0:04:58) •    Erica’s opinion on budgeting as a tool to manage spending. (0:08:34) •    How the ‘bucketing model’ changes for a couple as opposed to an individual. (0:12:10) •    How couples with different incomes should share expenses. (0:14:17) •    Signs of an unhealthy financial relationship between partners. (0:17:06) •    The amount of money an emergency fund should have. (0:21:17) •    What consumers should know about the different debt products available. (0:24:08) •    Discover the downside of taking a mortgage with the lowest interest rate. (0:33:55) •    Whether or not an independent mortgage broker is better than a bank. (0:38:05) •    Important insights about credit scores. (0:39:51) •    Whether people should rent or buy property. (0:45:13) •    How the traditional sense of a good job with sufficient income has changed. (0:50:34) •    Erica’s approach to explaining the risk of investing in stocks. (0:56:46) •    Insights about the math of a financial decision versus the psychology. (0:58:25) •    How Erica defines success in her life. (1:00:29)     Extra: Questions to ask a mortgage broker: 1.     What kind of penalty will you have to pay for breaking your contract? 2.     Is the cap on your lump-sum payments 10 percent or 20 percent of your mortgage balance? 3.     Will you be able to make lump-sum payments any time or just once a year? 4.     Can you double your payments? Participate in our 23 in 23 Reading Challenge: 23 in 23 Reading Challenge — https://rationalreminder.ca/23in23 23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/ Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-242-erica-alini-personal-finance-tactics-for-the-real-world-discussion-thread/22326 Book From Today’s Episode: Money Like You Mean It — https://www.dundurn.com/books_/t22117/a9781459748675-money-like-you-mean-it Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Erica Alini on Twitter — https://twitter.com/ealini

Today we are spending most of the episode going further into the basic concepts that ground good financial practices and the personal finance topics that are often taken for granted. The three main areas we unpack in this episode are the cost of living, savings capacity, and emergency funds, and though these can be viewed as basic ideas, there are always areas of the simplest variety that deserve more attention. Listeners can also expect to hear a little more about what our role as financial advisors constitutes on a daily basis, as we respond to an audience member's question about how to conceptualize the profession. We welcome Dr. Wendall Mascarenhas back to the show for a brief cameo in which he shares his reading habits and approach with us, which contrasts with some of the opinions often expressed by other guests, so make sure to stay tuned in for that. We also find time for a quick recap of an old episode we had with Rick Ferri and a book review of Rethink Lead Generation by Tom Shapiro.   Key Points From This Episode:   •    Discussing the cost of living and why an accurate picture of your expenses is so important. (0:04:08) •    Working out your saving capacity and when and how to save. (0:21:32) •    General advice for emergency funds and further considerations for households. (0:32:51) •    Recapping our episode with Rick Ferri on his index investing philosophy and the lasting impact of John Bogle. (0:40:21) •    This week's book review of Rethink Lead Generation by Tom Shapiro. (0:42:26) •    Dr. Wendall Mascarenhas talks about his reading habits and his prioritization of reading for pleasure. (0:49:23) •    A few favourite book recommendations from Dr. Wendall Mascarenhas. (0:58:12) •    Current debates around ChatGPT and the sources of its information. (1:06:18) •    Information about upcoming meetups for the Rational Reminder community. (1:09:38) •    Further explorations on our recent goals survey and the input we received from Morningstar. (1:11:00)     Participate in our 23 in 23 Reading Challenge: 23 in 23 Reading Challenge — https://rationalreminder.ca/23in23 23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Dr. Wendall Mascarenhas — https://www.fcos.ca/meet-dr-mascarenhas/ Teeth & Titanium Podcast — https://podcasts.apple.com/us/podcast/teeth-titanium/id1514989809 Extra References:   Savings capacity 'Popular Personal Financial Advice versus the Professors' — https://www.nber.org/papers/w30395 'The Life-Cycle Model Implies That Most Young People Should Not Save for Retirement' — https://www.aei.org/research-products/journal-publication/the-life-cycle-model-implies-that-most-young-people-should-not-save-for-retirement/ 'Exponential-Growth Bias and Lifecycle Consumption' — https://www.jstor.org/stable/43965317 'Save More Tomorrow™: Using Behavioral Economics to Increase Employee Saving' — https://www.jstor.org/stable/10.1086/380085 Emergency fund 'What Matters to Individual Investors? Evidence from the Horse's Mouth' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12895 'Millionaires Speak: What Drives Their Personal Investment Decisions?' — https://www.nber.org/papers/w27969 'Emergency savings for low-income consumers' — https://www.irp.wisc.edu/publications/focus/pdfs/foc301c.pdf 'Emergency Saving and Household Hardship' — https://www.researchgate.net/publication/269468202_Emergency_Saving_and_Household_Hardship 'Savings Policy and Decisionmaking in Low-Income Households' — https://www.researchgate.net/publication/289069441_Savings_Policy_and_Decisionmaking_in_Low-Income_Households 'Insufficient Funds: Savings, Assets, Credit, and Banking Among Low-Income Households' — https://www.jstor.org/stable/10.7758/9781610445887 'Financially Fragile Households: Evidence and Implications' — https://www.nber.org/papers/w17072 'One in four Canadians are unable to cover an unexpected expense of $500' —https://www150.statcan.gc.ca/n1/daily-quotidien/230213/dq230213b-eng.htm 'Who Should Buy Long-Term Bonds?' — https://www.jstor.org/stable/2677900 ‘Mental accounting matters' — https://people.bath.ac.uk/mnsrf/Teaching%202011/Thaler-99.pdf 'The Bucket Approach for Retirement: A Suboptimal Behavioral Trick?' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3274499 'Should Households Establish Emergency Funds' —https://www.proquest.com/openview/042e8ea8f8e3986ec6c93e5cfca265c0/1?pq-origsite=gscholar&cbl=38873 'Is an All Cash Emergency Fund Strategy Appropriate for All Investors?' — https://www.financialplanningassociation.org/article/all-cash-emergency-fund-strategy-appropriate-all-investors 'Building emergency savings through employer-sponsored rainy-day savings accounts' — https://www.journals.uchicago.edu/doi/full/10.1086/708170 'Double Mental Discounting: When a Single Price Promotion Feels Twice as Nice' — https://journals.sagepub.com/doi/10.1509/jmr.15.0559 'The Role of Mental Accounting in Household Spending and Investing Decisions'  — https://onlinelibrary.wiley.com/doi/10.1002/9781119440895.ch6 'Emergency Savings and Financial Security: Insights from the Making Ends Meet Survey and Consumer Credit Panel' — https://www.consumerfinance.gov/data-research/research-reports/emergency-savings-financial-security-insights-from-making-ends-meet-survey-and-consumer-credit-panel/  

The decisions we make may be further out of our control than we’d like to imagine. Today we are joined by Professor Eric J. Johnson to discuss choice architecture and its role in financial decision-making. Eric is a decision science expert and the author of the book, The Elements of Choice: Why the Way We Decide Matters. In this episode, we learn about the various factors that impact not only decision-making but the effort required to make a decision. Eric shares his philosophy on free will and shares advice for making important decisions and guiding clients to find the right choice as a financial advisor. Tune in to discover how to minimize the influence of the choice architect and take charge of your decisions!   Key Points From This Episode:   •    Introducing Professor Eric J. Johnson and this week’s topic: financial decision-making. (0:00:26) •    The hidden partner that accompanies us when we make decisions. (0:03:42) •    How design choices impact our decisions. (0:04:54) •    The plausible path: what it is and how we choose it. (0:06:00) •    Advice for making important decisions. (0:08:21) •    The impact of recent events on decision-making. (0:10:33) •    How to be your own choice architect. (0:12:15) •    Factors impacting the effort required to make a decision. (0:13:22) •    The impact of default choices and what influences them. (0:16:09) •    How choice architecture can help people find the right choice. (0:20:17) •    The influence of sorting on what people choose. (0:25:18) •    How the order of options being presented and the way they’re described impact decisions. (0:26:54) •    How exponential growth bias influences long-term decisions and how financial advisors can help clients understand the impact. (0:31:45) •    The effectiveness of Netflix as a choice engine, the role choice engines play in educating users, and the value of just-in-time education. (0:35:04) •    The impact of social media on people’s attention and intentions. (0:40:08) •    Eric shares his philosophy on free will and the factors impacting our choices. (0:42:55) •    How to minimize the influence of the choice architect. (0:44:16) •     What financial advisors can do to be most useful to their clients. (0:46:00) •    How Eric defines success in his life. (0:50:12)     Participate in our 23 in 23 Reading Challenge: 23 in 23 Reading Challenge — https://rationalreminder.ca/23in23 23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-240-prof-eric-j-johnson-choice-architecture-and-financial-decisions-discussion-thread/22037   Book From Today’s Episode: The Elements of Choice — https://theelementsofchoice.com/   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Prof. Eric J. Johnson on Twitter — https://twitter.com/profericjohnson  

The concept of financial math is another foundational element of investing and good economic decision-making, and today we are carrying on the recent string of shows dealing with these kinds of fundamental aspects. First, we have a look at the central idea of the time value of money, and how this plays into many areas of our finances, such as retirement planning, spending, investing, and so on. From there, the conversation goes on to cover exponential functions, the tradeoffs between saving and spending, and regrets. Today's 60-second episode recap is of the great conversation we had with David Blitzer back on Episode 54, and we also do a quick book review of the potentially life-changing How to Live on 24 Hours a Day. We finish off this punchy episode with some news from the community and some thoughts on the ways in which competition and repetition can improve a skill.   Key Points From This Episode:   •    Introducing the time value of money, as well as the concepts of compounding and discounting. (0:03:07) •    Applying financial math in different ways to varied questions. (0:11:34) •    Lessons from Cameron's first business selling worms. (0:18:15) •    The challenges and biases associated with exponential functions. (0:20:27) •    Spending and saving; illuminating the reality of the tradeoffs. (0:27:26) •    The biggest problems of foundational regrets. (0:35:40) •    Looking back on the episode with David Blitzer on indexing. (0:42:33) •    Reviewing the 1908 book, How to Live on 24 Hours a Day. (0:44:25) •    TV shows, podcast reviews, updates from the community and more. (0:49:05) •    Incentives and leaderboards; unpacking the impacts of practice and competition. (0:56:43)       Participate in our 23 in 23 Reading Challenge: 23 in 23 Reading Challenge — https://rationalreminder.ca/23in23 23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-239-the-math-of-financial-planning-discussion-thread/21899   Book From Today’s Episode: How to Live on Twenty-Four Hours a Day — https://amzn.to/3JLyDaz   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore  

A large portion of what we talk about on this show boils down to decision-making, and today we have our focus squarely on the fundamentals of this process. Professor Ralph Keeney joins us to discuss some of the simplest and most profound elements of decisions, and why we so often miss these aspects. Ralph is a true expert on decision analysis, and his systematic process for decision-making, as laid out in his new book, Give Yourself a Nudge, has truly life-altering potential for anyone looking to improve their future. The book and this conversation are jam-packed with insightful and understandable ideas and examples, including clarifying objectives, the vital role of our values, generating alternatives, and a comparison between decision problems and decision opportunities. Ralph lays out a great way to get started on the path to better decisions, so make sure to join us to hear it all.     Key Points From This Episode:   The focus of Ralph's research and how he articulates the importance of our conscious decisions. (0:03:48) The shortcomings of the trial and error approach that many of us naturally employ. (0:10:46) First steps towards being a better decision-maker; using personal decisions for practice. (0:13:08) Ralph explains his conception and use of the idea of 'nudges'. (0:14:30) A better awareness of the often-neglected front end of decision-making. (0:17:38) An explanation of Ralph's value-focused decision-making process. (0:22:25) Mistakes made around retirement decisions. (0:30:30) Why clarifying your personal decision values can be so difficult. (0:32:15) The process of translating values into objectives. (0:36:11) Ralph's important question around the different possible situations in the future. (0:41:49) Simple processes and common pitfalls for generating alternatives. (0:43:19) Exploring decisions that require third-party permission or commitment. (0:47:59) Differentiating between decision problems and decision opportunities. (0:52:27) The most important concepts for embodying value-focussed decision-making. (0:57:44) The role of financial advisors in aiding their clients to make good decisions. (1:03:28) Application of these ideas toward living a good life. (1:07:46) Ralph's simple definition of success in his own life. (1:10:53)     Participate in our 23 in 23 Reading Challenge: 23 in 23 Reading Challenge — https://rationalreminder.ca/23in23 23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-238-prof-ralph-keeney-decision-analysis-and-value-focused-thinking-discussion-thread/21795   Books From Today’s Episode: Give Yourself a Nudge — https://amzn.to/3WKMwZx Smart Choices — https://amzn.to/3Ho0vP6 Value-Focused Thinking — https://amzn.to/3HgC7yH Decisions with Multiple Objectives — https://amzn.to/3DywYRH   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Prof. Ralph Keeney — https://ralphkeeney.com/  

Identifying your personal values is the foundation for making future decisions. In this episode, we discuss the profound ways in which personal values impact financial decision-making and share concrete steps to identify both your strategic and means objectives. Ben candidly shares his own objectives and expands on the other considerations involved in making major decisions. We then jump to the less abstract topic of 2022 returns, providing a thorough overview of the tilts and their consequences, followed by a brief summary of an early episode with Shane Parrish. In the latter half of this episode, we are joined by Zoobean co-founder and CEO Felix Lloyd to talk about Beanstack, the tech platform for reading, and Readwise co-founder Daniel Doyon. We also tackle the slightly left-field topic of marketing from a behavioural science standpoint through the lens of Nancy Harhut’s tellingly-titled book, Using Behavioral Science in Marketing. Tune in for upcoming developments in the Rational Reminder community, and to discover how to make financial decisions that align with who you are and who you want to become!   Key Points From This Episode:   How personal values impact financial decision-making. (0:00:25) How to identify your life’s values and objectives. (0:07:21) The significance of means objectives and strategic objectives, and how to identify them. (0:16:25) Ben’s strategic life objectives and means objectives. (0:18:27) Other considerations when making major decisions. (0:19:14) An overview of 2022 returns. (0:22:43) A summary of episode 19 with Shane Parrish. (0:28:59) A brief interview with Zoobean co-founder and CEO Felix Lloyd to talk about Beanstack, the tech platform for reading. (0:31:15) Cameron’s review of Using Behavioral Science in Marketing by Nancy Harhut. (0:43:09) What sells (from a behavioural science standpoint). (0:47:15) A brief interview with Readwise co-founder Daniel Doyon. (0:52:52) Summaries of recent Freakonomics, 10% Happier, and Capital Allocators (1:04:05) Developments in the Rational Reminder community. (1:05:30) Upcoming podcast guests and recent podcast reviews. (1:10:25)      Participate in our 23 in 23 Reading Challenge: 23 in 23 Reading Challenge — https://rationalreminder.ca/23in23 23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-237-who-are-you-and-who-do-you-want-to-be-discussion-thread/21665   Book From Today’s Episode: Using Behavioral Science in Marketing — https://amzn.to/3wuDnJO   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Daniel Doyon on Twitter — https://twitter.com/deadly_onion Felix Lloyd on Twitter — https://twitter.com/fblloyd Felix Lloyd on LinkedIn —  https://www.linkedin.com/in/fblloyd/ Beanstack — https://www.beanstack.com/ Zoobean on Instagram — https://www.instagram.com/zoobean Readwise — https://readwise.io/      

Our guest today, Harold Gellar, is a lawyer who helps clients dealing with fraud and negligence perpetrated by financial advisors, and is a passionate advocate for investors and their rights. Tuning in you’ll hear details of some of the most common issues Harold has come across in his work, along with his practical advice for financial advisors and investors. We discuss the importance of clear communication between advisors and their clients, the concept of KYC (Know Your Client), and simple steps investors can take to ensure that their advice is properly understood by their clients. Harold goes on to provide an outline of factors that could make individuals vulnerable to negligent financial advice (such as marital problems or a sudden health crisis) and how to gain perspective in extreme situations. We also discuss the key differences between salespeople and financial advisors, the type of credentials investors should be looking for, and how regulation needs to be modernized in Canada for investors to be properly protected. Harold has been in this industry for a long time and is immensely knowledgeable on the subject of fraud and negligent investment advice.   Key Points From This Episode:   An overview of Harold’s practice and how he helps clients get their money back. (0:03:22) The difference between salespeople and financial advisors and the vulnerability of investors. (0:05:40) Practical advice for investors to ensure their financial advisor is doing due diligence and the concept of KYP (Know Your Product). (0:10:46) The concept of KYC (Know Your Client) and how to be sure your financial advisor understands you as a client. (0:15:32) The type of individuals who are particularly vulnerable to negligent financial advice, and why we can all be vulnerable in certain situations. (0:18:33) The role of the trusted contact person in Canada specifically, and how to know when to take the advice of your financial advisor. (0:25:13) Harold’s thoughts on what is causing Canada’s slow adoption of low-cost index funds. (0:32:27) How financial advisors earn money and why we need an updated regulatory system. (0:34:21) Harold’s approach to crypto and why he classifies it as a speculative asset. (0:41:50) Examples of negligence when the investment made was too conservative and why clear communication between client and advisor is crucial. (0:44:20) The worst insurance products that Harold has come across. (0:46:10) What financial advisors should be doing to make sure that their advice is properly understood by their clients. (0:49:23) What investors can do to make sure that they understand what the advisor is saying to them. (0:51:16) Ontario’s recent implementation of title regulation for financial planners and advisors and some of its key flaws. (0:52:16) The credentials that investors should expect from their financial advisors. (0:55:34) The value of good advice when it comes to financial planning and investment, and what motivates Harold to be such a strong investor advocate. (0:56:56)     Participate in our 23 in 23 Reading Challenge: 23 in 23 Reading Challenge — https://rationalreminder.ca/23in23 23 in 23 Reading Challenge on Beanstalk — https://pwlcapital.beanstack.org/   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-236-harold-geller-i-sue-financial-advisors-discussion-thread/21500   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Harold on Linkedin — https://www.linkedin.com/in/harold-geller-25094033/ Geller Law — http://gellerlaw.ca 'The Misguided Beliefs of Financial Advisors' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12995 'Retail Financial Advice: Does One Size Fit All?' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12514