327 episodes

A weekly reality check on sensible investing and financial decision-making, from two Canadians. Hosted by Benjamin Felix and Cameron Passmore, Portfolio Managers at PWL Capital.

The Rational Reminder Podcast Benjamin Felix & Cameron Passmore

    • Business
    • 4.9 • 356 Ratings

A weekly reality check on sensible investing and financial decision-making, from two Canadians. Hosted by Benjamin Felix and Cameron Passmore, Portfolio Managers at PWL Capital.

    Is Private Credit Special?

    Is Private Credit Special?

    Private credit is one of the fastest-growing asset classes, and today we take a closer look at why that is, and if it’s really worth the hype. When you invest in private credit, you are essentially lending money to borrowers who might have difficulty accessing loans elsewhere. While these assets may be profitable, they can also incur a lot of risk and typically come with illiquidity. It is traditionally traded among institutional and accredited investors, rather than retail investors, namely, non-professional investors. Since private credit has gained so much popularity in recent years, we use today’s conversation to unpack how private credit works, the role of private credit funds, the associated performance fees and risks, and what retail investors should know about this asset class before deciding to invest. Our conversation investigates one of the top reasons for private credit’s rise in popularity, namely risk-adjusted returns, before evaluating whether this is a worthwhile reason to invest, depending on who you are. Stay tuned for our after-show section where we discuss the proposed changes to the capital gains tax, why the death of value could be exaggerated, and more!
     
    Key Points From This Episode:
     
    (0:00:18) Today’s main topic, private credit, and our upcoming webinar on May 22nd.
    (0:02:18) An introduction to private credit as an asset class.
    (0:05:33) Private credit funds: how they work, interest rates, performance fees, and valuations.
    (0:08:14) Who does valuations on private credit funds and related risks.
    (0:10:01) Unpacking the underlying risks of private credit and how investors are compensated.
    (0:11:02) Insights from the paper ‘Direct Lending Returns’ related to publicly listed business development companies (BDCs).
    (0:16:15) Takeaways from the paper ‘Risk Adjusting the Returns of Private Debt Funds’.
    (0:18:16) Private credit funds, equity exposure, how private credit gets misrepresented, and what investors need to know about high-fee investment products.
    (0:25:09) Illiquidity and what retail investors can expect from private credit.
    (0:30:15) Our aftershow segment, starting with the proposed changes to capital gains tax.
    (0:33:55) Ben’s conversation with David Chilton.
    (0:36:55) The value premium and why the death of value could be exaggerated.
    (0:40:45) Unpacking the heated response to our conversation with Scott Galloway.



    Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p
     
    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
    Webinar May 22nd: Optimal Compensation Strategies for Business Owners — https://us06web.zoom.us/webinar/register/3317145039436/WN_GYudVJCYSnyF8HfUx9UbJQ
    Money Scope Episode 12 — https://moneyscope.ca/2024/04/19/episode-12-paying-yourself-as-a-canadian-business-owner/
    Money Scope Episode 13 — https://moneyscope.ca/2024/04/26/episode-13-optimal-compensation-from-a-ccpc/
    Rational Reminder Episode 220: Jonathan Berk and Jules van Binsbergen — https://rationalreminder.ca/podcast/220
    R

    • 44 min
    Budget 2024: The Capital Gains Inclusion Rate

    Budget 2024: The Capital Gains Inclusion Rate

    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

    • 57 min
    Scott Galloway: The Algebra of Wealth

    Scott Galloway: The Algebra of Wealth

    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

    • 1 hr 6 min
    Michael Green: Market Efficiency Is Not The Question

    Michael Green: Market Efficiency Is Not The Question

    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

    • 1 hr 6 min
    Bonus Episode - Prof. Meir Statman: A Wealth of Well-Being

    Bonus Episode - Prof. Meir Statman: A Wealth of Well-Being

    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

    • 36 min
    Optimal Government Pension Claiming, and Life Well-Being w/ Prof. Meir Statman

    Optimal Government Pension Claiming, and Life Well-Being w/ Prof. Meir Statman

    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

    • 54 min

Customer Reviews

4.9 out of 5
356 Ratings

356 Ratings

randall-reviews ,

Exceptional Evidence Based Show

The rational reminder is an exception evidence based show in field filled with self interest and strong opinions that lack the necessary depth of understanding. I am American so not sure everything directly applies to my situation but the logic and reasoning behind the decision making is often useful regardless. For example tax diversification is a concept that absolutely applies with 401(k) and Social Security or TSFA and Canadian pension plans.

Guy giddy ,

Brilliant

This is a great and thought provoking podcast in topics critical to living a productive, stable and happy life. Ben and Cameron are phenomenal hosts who asking great questions. Ben’s intelligence is shocking. He explained topics in such a clear and concise way that one often wonders why he doesn’t have a phd in economics and finance? He’d be a phenomenal professor/educator. I appreciate all the varied guests. Most importantly it is great that guests are invited that discuss their topics and we as listeners can then decide whether or not we agree with said information. All in all this is a great podcast and if there was a Nobel for podcast this would get it. Cheers to all the great work that you guys and your support staff do!

One follow up: I’d recommend having karsten jeske from early retirement now blog to counter Scott cederburg.

JessDeland ,

January 25 3024

That was one of the most interesting guest lineups you’ve had. I watched it on YouTube, shared with a couple of friends. Did rewinds because some topics were so important. I’m a Florida listener.

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