The Rational Reminder Podcast Benjamin Felix & Cameron Passmore

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 —

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 Secr

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 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

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'

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