The Rational Reminder Podcast Benjamin Felix & Cameron Passmore

The Canadian government has recently proposed significant changes to how capital gains are taxed, but how will this impact Canadians? In this episode, we delve into the proposed capital gains tax changes and their impact on financial planning. We unpack the definition of capital gains tax and the complexity of the proposed changes. Explore the historical trends of capital gains tax rates in Canada, how capital gains tax works, and who will be impacted by the proposed changes. We discuss the intricacies of the alternative minimum tax (AMT), its relevance to capital gains tax, and whether the old or new AMT rules apply to the upcoming changes. Gain insights into tax considerations for long-term investment strategies, the importance of tax diversification in mitigating risk, lifetime capital gains exemption, tax planning ramifications, and more! Although this episode is Canadian-focused, it offers many useful takeaways for non-Candaians as well. To gain a comprehensive understanding of the complexities surrounding capital gains tax and strategies to navigate the proposed changes effectively, tune in now!


Key Points From This Episode:
 
(0:00:00) Introduction and outline of today’s topic: proposed capital gains tax changes.
(0:03:07) Overview of the topic, what capital gains tax is, and the proposed changes.
(0:08:10) Historical trends in capital gains tax rates in Canada.
(0:10:59) Find out who will be impacted by the proposed changes. 
(0:14:45) Advice on how to plan for the proposed changes with an example.
(0:17:13) Model results and we unpack the nuance of AMT (alternative minimum tax).
(0:25:35) How the changes to AMT impact the proposed capital gains tax changes.
(0:32:05) Whether the new or old AMT rules apply to the proposed capital gains changes.
(0:34:27) Important tax considerations for long-term investment strategies.
(0:36:30) Insights into why tax diversification is essential to reduce the tax rate risk.
(0:39:25) Interesting budget proposals and their tax planning implications.
(0:41:17) Our perspectives on the media response to the proposed tax changes.
(0:45:40) After-show: listeners’ reviews, upcoming guests, an update on Mark’s book, and more.
 
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/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/
Mark McGrath on X — https://twitter.com/MarkMcGrathCFP
Capital Gains Calculator — https://research-tools.pwlcapital.com/research/realize-gain
Episode 224 — https://rationalreminder.ca/podcast/224
Episode 284 — https://rationalreminder.ca/podcast/284
Episode 299 — https://rationalreminder.ca/podcast/299
Episode 302 — https://rationalreminder.ca/podcast/302
Canadian Medical Association — https://www.cma.ca/
The Money Scope Podcast  — https://moneyscope.ca/
The Most Important Lessons in Investing — https://www.youtube.com/watch?v=MOjS2zuQMdo
Dan Solin — https://danielsolin.com/
Compensation Strategies for Canadian Business Owners — https://www.pwlcapital.com/compensation-strategies-for-canadian-business-owners2/
 
Books From Today’s Episode:
 
The Wealthy Barber — h

What is the role of luck in financial success? And how can we make decisions that will put us in the best possible position to experience long-term prosperity? Joining us today to unpack these questions is Scott Galloway, a talented public speaker, author, entrepreneur, and professor of marketing at NYU Stern School of Business. His latest book, The Algebra of Wealth: A Simple Formula for Financial Security, explores key lessons to help you optimize your life for wealth and success. He is the host of a thrice-weekly podcast, The Prof G Pod, and co-hosts a podcast called Pivot with esteemed tech journalist, Kara Swisher. Scott also has a very popular blog called No Mercy / No Malice, where he shares his thoughts on wealth, business, psychology, and more. In today’s conversation with Scott, we delve into the lessons he’s learned about economic success and the contents of his new book, The Algebra of Wealth. Tuning in you’ll learn how the economic stress he experienced as a child shaped his life, the important role that luck plays in financial success, and why he believes people should follow their talents rather than their passions. Scott goes on to expand on why diversification is essential for financial success before sharing key lessons from the various businesses he has started, built, and sold. We also discuss how he manages his financial worries, his hopes for his children, and how he defines success. Tune in to hear all of Scott’s valuable insights as we take a deep dive into the forces that shape our economic outcomes, and the algebra of wealth!
 
Key Points From This Episode:
 
(0:00:18) Introducing today’s guest, Professor Scott Galloway.
(0:05:43) Unpacking the title of his book The Algebra of Wealth, and what it refers to.
(0:10:39) The pursuit of wealth as a whole-person project and why balance is rarely possible.
(0:13:38) How stoicism can help you spend wisely and resist temptations.
(0:19:23) The difference between working hard and having character when it comes to wealth.
(0:22:20) Why it’s so important to acknowledge the role of luck in economic success; how Scott’s awareness of luck impacted his financial decisions and made him diversify.
(0:30:41) The concept of having enough, why people always want more, the benefits of giving back, and the role that luck has played in Scott’s wealth.
(0:35:31) Why Scott believes people should follow their talents, rather than their passion.
(0:39:31) Scott’s thoughts on the work-from-home trend and why he is a big proponent of an office environment and in-person work for young people.
(0:41:23) The key ways that physical exercise contributes to financial success.
(0:44:37) Scott’s thoughts on financial planners, how to take advantage of technology and low-cost EFTs to diversify on your own, and qualities you should look out for in a financial planner.
(0:50:08) Scott’s approach to investing in private businesses, his history of starting and selling companies, and why diversification is key.
(0:52:26) What the average person should do when there is excitement about a particular stock.
(0:56:06) Scott’s insights on the most beneficial way to trade money for time, how he manages his financial worries, and his biggest financial concerns when it comes to his children.
(01:03:32) How Scott defines success in his life, and what he has learned so far from starting ketamine therapy.
 
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/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on

With a wealth of experience as a market theoretician and a prolific contributor to financial discourse, today’s guest is uniquely positioned to guide us through the complexities of index fund dynamics. Joining us to discuss the problems that passive investing may be causing in financial markets (and what people should do about it) is Michael Green, Chief Strategist and Portfolio Manager for Simplify Asset Management. Tuning in, you’ll learn about the ramifications of the surging popularity of indexing and the sobering reality of mounting market inelasticity, backed by compelling evidence that underscores the challenges facing today's financial landscape. The insights in this episode extend beyond mere observation, with Mike offering policy recommendations and strategies to address the structural issues affecting our markets. While this conversation is certainly challenging, philosophical, and even alarming, it isn't purely theoretical. It’s a call to action to safeguard the integrity of our financial systems. So, be sure to join us as we navigate the nuances of indexing and passive investing at large, guided by the expertise and foresight of one of finance's most respected voices!
 
Key Points From This Episode:
 
(0:05:48) The negative effect that the growth of indexing is having on financial markets.
(0:07:37) Insight into the XIV trade that strengthened Mike’s belief in this view.
(0:13:49) Defining the problem that indexing is causing (which might seem like a good thing).
(0:15:57) How market cap-weighted index funds differ from closet index funds.
(0:16:57) Indications that markets are becoming increasingly inelastic over time.
(0:19:21) Why flows into cap-weighted index funds differ from the overall aggregate of active.
(0:24:21) Active versus passive investing in public versus non-public markets.
(0:25:57) The catastrophic event that could be caused by index funds (and how to avoid it).
(0:30:51) Why we need to rethink the definition of passive investing and the value of diversity.
(0:36:10) Market inelasticity versus inefficiency and the impact of active manager performance.
(0:41:38) How investors should shift their strategy to respond to the current market structure.
(0:53:01) Regulatory recommendations: who actually needs to step up and do something.
(0:54:30) Mike’s outlook on US expected returns, market volatility, and 401(k)s.
(1:01:50) Why Bitcoin isn’t the solution to all of our monetary and fiscal policy problems.
(1:05:22) The definition of success in Mike’s life (and why it’s completely non-financial).



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/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
‘Yes, I give a fig… Thoughts on markets from Michael Green’ — https://www.yesigiveafig.com/
Michael Green on Substack — https://substack.com/@michaelwgreen
Michael Green on LinkedIn — https://www.linkedin.com/in/michael-green-9a15142/
Michael Green on X — https://twitter.com/profplum99
Nassim Nicholas Taleb — https://www.fooledbyrandomness.com/
Valentin Haddad — https://sites.google.com/site/valentinhaddadresearch/
Jean-Philippe Bouchaud — https://bouchaud.substack.com/
Marco Sam

Today, we welcome back Prof. Meir Statman to talk about the role of finances in well-being. We investigate the role of finances in well-being with Prof. Meir Statman through the lens of his new book, A Wealth of Well-Being. Discover why wealth advisors must evolve into well-being advisors and uncover the impact of finances on various life domains. From dating to education, we discuss the profound financial correlations shaping happiness and well-being. Tune in now!


Key Points From This Episode:



(0:00:15) Introduction to returning guest, Prof. Meir Statman.
(0:02:15) How well-being fits into the study of behavioural finance.
(0:06:52) Discover the role of finances in different domains of life well-being.
(0:10:42) Hear why wealth advisors need to change to being well-being advisors.
(0:14:59) Explore the relationship between finances, social status, and overall well-being.
(0:19:46) Whether too much self-control in spending can be a problem.
(0:22:46) The effect of finances on dating and marriage and how work plays into well-being.
(0:26:42) Find out how education fits into well-being and why it is a major regret for people.
(0:32:36) Gain insights into how religion and faith can enhance well-being.
 
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/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/
Mark McGrath on X — https://twitter.com/MarkMcGrathCFP
Prof. Meir Statman — https://www.scu.edu/business/finance/faculty/statman/
Prof. Meir Statman on X — https://twitter.com/meirstatman 
Episode 258: Prof. Meir Statman — https://rationalreminder.ca/podcast/258
 
Meir's Book: A Wealth of Well-Being — https://www.amazon.com/Wealth-Well-Being-Holistic-Approach-Behavioral/dp/1394249675

In this episode, we delve into the best time to claim your Canada Pension Plan (CPP) benefits. Although the focus of this episode is on Canada, there will be many relevant and valuable insights for our non-Canadian listeners. In our conversation, we discuss the importance of understanding the intricacies of CPP benefits, the fundamentals, and how individuals can optimize their retirement income by making informed decisions. Explore the importance of understanding when to claim CPP benefits, how much future financial security a CPP offers, and why the CPP is one of the most valuable retirement assets for most Canadians. Gain insights into how wage growth ties into CPP benefits, the exceptions to deferring a CPP claim, and what made 2022 different regarding CPP claims. Join us as we uncover the nuances of CPP benefits!
 
Key Points From This Episode:


(0:03:25) Unpack the fundamentals of the Canada Pension Plan (CPP) benefits.
(0:10:04) How the timing of making a CPP claim is linked to the benefits.
(0:14:15) Ben explains the financial implications of deferring a CPP claim.
(0:21:34) Uncover common approaches to identify the best time to claim a CPP.
(0:26:06) Learn about the situations when it is best not to defer a CPP claim.
(0:31:12) Why the CPP is one of the most valuable retirement assets for most Canadians.
(0:39:11) The after-show: ideas for the podcast, feedback, segregated funds, and more!



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/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/
Mark McGrath on X — https://twitter.com/MarkMcGrathCFP
Prof. Meir Statman — https://www.scu.edu/business/finance/faculty/statman/
Prof. Meir Statman on Twitter — https://twitter.com/meirstatman 
Episode 258: Prof. Meir Statman — https://rationalreminder.ca/podcast/258
The Canadian Institute of Actuaries (CIA) — https://www.cia-ica.ca/
Society of Actuaries (SOA) — https://www.soa.org/
FP Canada — https://www.fpcanada.ca/
When Should You Start CPP? — https://www.youtube.com/watch?v=r9vYji99fhk
CE Drive with Jason Watt — https://cedrive.podbean.com/
Episode 137: David Blanchett: Researching Retirement — https://rationalreminder.ca/podcast/137
Episode 254: David Blanchett: Regret Optimized Portfolios and Optimal Retirement Income — https://rationalreminder.ca/podcast/254
Episode 289 - Retiring Retirement Income Myths with the Retirement Income Dream Team — https://rationalreminder.ca/podcast/289
Jason Yi on LinkedIn — https://www.linkedin.com/in/jason-yi-cpa-ca-56544446/
Episode 225: The Index Fund "Tipping Point” — https://rationalreminder.ca/podcast/225
 
Books From Today’s Episode:
 
Wealthier — https://wealthierbook.com/
The Algebra of Wealth — https://www.amazon.com/Algebra-Wealth-Formula-Financial-Security/dp/0593714024
Sleep Well, Take Risks, Squish the Peas — https://www.amazon.com/Sleep-Well-Take-Risks-Squish/dp/0757324711/
 
Papers From Today’s Episode: 
 
‘The CPP Take-Up Decision: Risks and Opportunities’ — https://www.soa.org/4a223f/globalassets/assets/files/resources/research-report/2020/2020-cp

In this episode, we are joined by renowned expert Abby Sussman to unpack how individuals form judgments and make decisions about their finances. Abby is a distinguished professor of marketing at the University of Chicago Booth School of Business whose expertise lies at the intersection of psychology, economics, and finance. In our conversation, we discuss the nuances of financial decision-making and how personal beliefs influence our financial choices. Discover the source of reference points for financial well-being and how expense prediction biases play a role in making poor financial decisions. We explore the effectiveness of budgeting, the nuances of product sensitivity, and the drivers of excessive consumer consumption. Gain insights into navigating the complexities of financial decision-making, the psychology behind it, how AI can help you make better financial decisions, and much more. Tune in to gain a deeper understanding of the psychology behind financial decisions and uncover strategies to optimize your financial future with Abby Sussman!
 
Key Points From This Episode:
 
(0:04:45) Explore the difference in how we perceive others' wealth versus our own.
(0:08:25) Drivers of the differences in perception and their impact on financial decision-making.
(0:11:43) Steps to reduce excessive consumption and how personal future wealth perceptions influence financial decision-making.
(0:16:58) Discover the source of the reference point people use when considering their wealth.
(0:18:53) How to make better financial decisions and the role of peoples’ expectations.
(0:20:20) Unpack expense prediction bias and the problems it creates.
(0:22:55) Methods used to predict expenses and what people typically budget for.
(0:29:00) Pragmatic advice for reducing the influence of expense prediction bias.
(0:31:53) Whether prediction bias manifests in long-term planning, such as retirement.
(0:33:14) Find out if setting a budget is common practice and how it impacts financial health.
(0:37:36) Trends in actual spending in relation to expenses budgeted for.
(0:39:31) She explains how people categorize expenses and react to insufficient funds.
(0:42:40) Product sensitivity and how attitudes toward investment products vary.
(0:48:21) Interventions to help people choose better financial products.
(0:49:40) Areas of research she is most interested in and her opinion on the role of AI.
(0:55:54) Abby shares her definition of success.
 
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/ 
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Abby Sussman on LinkedIn — https://www.linkedin.com/in/abigail-sussman-ab4427/
Abby Sussman on X — https://twitter.com/abbysussman
The University of Chicago Booth School of Business — https://www.chicagobooth.edu/
Society for Judgment and Decision Making — https://sjdm.org/
Episode 153: Prof. Johanna Peetz — https://rationalreminder.ca/podcast/153
Epidose 296: Adam Alter — https://rationalreminder.ca/podcast/296
Panel Study of Income Dynamics — https://psidonline.isr.umich.edu/
Consumer Financial Protection Bureau — https://www.consumerfinance.gov/
 
Papers From Today’s Episode: 
 
‘Understandi