Money Expert: Why Renting Makes You Richer Than Buying

Renting versus owning a home, the Renting versus owning a home, the biggest financial decision most people biggest financial decision most people biggest financial decision most people make in their life. So, we're going to make in their life. So, we're going to make in their life. So, we're going to talk about all of the unrecoverable talk about all of the unrecoverable talk about all of the unrecoverable costs [music] of owning a home, costs [music] of owning a home, costs [music] of owning a home, including property taxes, maintenance including property taxes, maintenance including property taxes, maintenance costs, which is the one that I think costs, which is the one that I think costs, which is the one that I think people underestimate the most. And then people underestimate the most. And then people underestimate the most. And then there's also emergency costs. I've got a there's also emergency costs. I've got a there's also emergency costs. I've got a whole stack of them, as well as a 5% whole stack of them, as well as a 5% whole stack of them, as well as a 5% rule to figure out if renting is a rule to figure out if renting is a rule to figure out if renting is a better financial decision. We'll go better financial decision. We'll go better financial decision. We'll go through that. What else have we got? through that. What else have we got? through that. What else have we got? >> So, this is something that people just >> So, this is something that people just >> So, this is something that people just don't think enough about, which is the don't think enough about, which is the don't think enough about, which is the top 10 financial mistakes that I think top 10 financial mistakes that I think top 10 financial mistakes that I think people make. For example, tax planning people make. For example, tax planning people make. For example, tax planning opportunities. Like, there are simple opportunities. Like, there are simple opportunities. Like, there are simple things that people can do [music] to things that people can do [music] to things that people can do [music] to minimize the amount of tax they're minimize the amount of tax they're minimize the amount of tax they're paying, and we'll go through those. Ben paying, and we'll go through those. Ben paying, and we'll go through those. Ben Felix's firm manages the money of more Felix's firm manages the money of more Felix's firm manages the money of more than 3,000 than 3,000 than 3,000 people, ranging from people with huge people, ranging from people with huge people, ranging from people with huge amounts of money and not so much money. amounts of money and not so much money. amounts of money and not so much money. His whole thesis is giving people money His whole thesis is giving people money His whole thesis is giving people money advice that is based on academic advice that is based on academic advice that is based on academic research. Our brains, our psychology, research. Our brains, our psychology, research. Our brains, our psychology, absolutely gets in the way of making absolutely gets in the way of making absolutely gets in the way of making good long-term financial decisions. And good long-term financial decisions. And good long-term financial decisions. And today, we're going to answer the big today, we're going to answer the big today, we're going to answer the big money questions, like what should I money questions, like what should I money questions, like what should I invest in? A lot of people believe they invest in? A lot of people believe they invest in? A lot of people believe they need to have a lot of background need to have a lot of background need to have a lot of background information before they can start information before they can start information before they can start investing, but I would argue that people investing, but I would argue that people investing, but I would argue that people who know just a little bit, they will be who know just a little bit, they will be who know just a little bit, they will be better long-term investors. There's a better long-term investors. There's a better long-term investors. There's a ton of evidence supporting that this ton of evidence supporting that this ton of evidence supporting that this will outperform most other investment will outperform most other investment will outperform most other investment strategies. strategies. strategies. >> And also, what is the mentality, the >> And also, what is the mentality, the >> And also, what is the mentality, the mindset of people that end up making mindset of people that end up making mindset of people that end up making money over the long term? money over the long term? money over the long term? >> Psychology is important for determining >> Psychology is important for determining >> Psychology is important for determining what your financial goals are. So, this what your financial goals are. So, this what your financial goals are. So, this is a framework that we developed to is a framework that we developed to is a framework that we developed to elicit higher quality goals. What would elicit higher quality goals. What would elicit higher quality goals. What would you say to young people that are you say to young people that are you say to young people that are thinking about their financial strategy? thinking about their financial strategy? thinking about their financial strategy? >> A lot of young people feel a lot of >> A lot of young people feel a lot of >> A lot of young people feel a lot of pressure to save, but there is research pressure to save, but there is research pressure to save, but there is research suggesting [music] that it's probably suggesting [music] that it's probably suggesting [music] that it's probably suboptimal for young people to save, suboptimal for young people to save, suboptimal for young people to save, which we'll talk more about later. And which we'll talk more about later. And which we'll talk more about later. And then, in a world of AI where everything then, in a world of AI where everything then, in a world of AI where everything is changing so quickly, what should I be is changing so quickly, what should I be is changing so quickly, what should I be doing with my money right now? Ben Felix doing with my money right now? Ben Felix doing with my money right now? Ben Felix has the answer. has the answer. has the answer. This is super interesting to me. My team This is super interesting to me. My team This is super interesting to me. 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[clears throat] So, if there was simple free thing that you could do to simple free thing that you could do to simple free thing that you could do to help us, my team, everyone here, to keep help us, my team, everyone here, to keep help us, my team, everyone here, to keep this show free, to keep it improving this show free, to keep it improving this show free, to keep it improving year over year and week over week, it is year over year and week over week, it is year over year and week over week, it is just to hit that subscribe button and to just to hit that subscribe button and to just to hit that subscribe button and to double check if you've hit it. Only double check if you've hit it. Only double check if you've hit it. Only thing I'll ever ask of you. thing I'll ever ask of you. thing I'll ever ask of you. Do we have a deal? Do we have a deal? Do we have a deal? If you do it, I'll tell you what I'll If you do it, I'll tell you what I'll If you do it, I'll tell you what I'll do. 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Let's get on with the show. with the show. with the show. >> [music] [music] [music] >> Ben, >> Ben, >> Ben, there are lots of people out in the there are lots of people out in the there are lots of people out in the world talking about personal finance and world talking about personal finance and world talking about personal finance and investing and all these adjacent investing and all these adjacent investing and all these adjacent subjects. subjects. subjects. What is the approach you take that you What is the approach you take that you What is the approach you take that you think is different to lots of the other think is different to lots of the other think is different to lots of the other sort of finance experts that are on sort of finance experts that are on sort of finance experts that are on YouTube that are giving people advice? YouTube that are giving people advice? YouTube that are giving people advice? What I think, and the approach that I've What I think, and the approach that I've What I think, and the approach that I've always tried to take, is what can we always tried to take, is what can we always tried to take, is what can we take from academic literature, very take from academic literature, very take from academic literature, very smart people who spent a lot of time smart people who spent a lot of time smart people who spent a lot of time thinking about these things, thinking about these things, thinking about these things, what can we take from them and apply to what can we take from them and apply to what can we take from them and apply to making good financial decisions for a making good financial decisions for a making good financial decisions for a typical person? And what are the key typical person? And what are the key typical person? And what are the key questions that you've sought to answer questions that you've sought to answer questions that you've sought to answer for the audiences that you have? Is for the audiences that you have? Is for the audiences that you have? Is renting versus owning a home. So, that's renting versus owning a home. So, that's renting versus owning a home. So, that's always been big. Asset allocation is always been big. Asset allocation is always been big. Asset allocation is another big one. How much should you another big one. How much should you another big one. How much should you invest of your of your long-term money invest of your of your long-term money invest of your of your long-term money that you can afford to take some risk that you can afford to take some risk that you can afford to take some risk with. with. with. Another important question people wonder Another important question people wonder Another important question people wonder about is, about is, about is, why should I not do this other why should I not do this other why should I not do this other investment strategy that seems very investment strategy that seems very investment strategy that seems very attractive? attractive? attractive? And who who are we appealing to with And who who are we appealing to with And who who are we appealing to with this conversation? Is it just people this conversation? Is it just people this conversation? Is it just people that have lots of money, or is it No, I that have lots of money, or is it No, I that have lots of money, or is it No, I think these questions need to be think these questions need to be think these questions need to be answered. I mean, the the renting versus answered. I mean, the the renting versus answered. I mean, the the renting versus owning a home one is applicable to owning a home one is applicable to owning a home one is applicable to pretty much everyone, because that is pretty much everyone, because that is pretty much everyone, because that is the biggest financial decision most the biggest financial decision most the biggest financial decision most households will make in their lives, households will make in their lives, households will make in their lives, regardless of what their net worth is. regardless of what their net worth is. regardless of what their net worth is. But investing, or what should you do But investing, or what should you do But investing, or what should you do with your long-term investments, that's with your long-term investments, that's with your long-term investments, that's applicable to anybody. applicable to anybody. applicable to anybody. Anybody that's going to be saving for Anybody that's going to be saving for Anybody that's going to be saving for their future, whether they have $10,000 their future, whether they have $10,000 their future, whether they have $10,000 or $10 million, the same principles or $10 million, the same principles or $10 million, the same principles apply. apply. apply. And how much of this And how much of this And how much of this game of investing, making money, is game of investing, making money, is game of investing, making money, is comes back to psychology? comes back to psychology? comes back to psychology? So, I like to say investing's been So, I like to say investing's been So, I like to say investing's been solved. We're going to use index funds. solved. We're going to use index funds. solved. We're going to use index funds. That's it. The hard part is actually That's it. The hard part is actually That's it. The hard part is actually doing that. doing that. doing that. Because our brains, our psychology, Because our brains, our psychology, Because our brains, our psychology, absolutely gets in the way of making absolutely gets in the way of making absolutely gets in the way of making good long-term financial decisions. good long-term financial decisions. good long-term financial decisions. Our brains are designed for survival. Our brains are designed for survival. Our brains are designed for survival. They're not designed to thinking about They're not designed to thinking about They're not designed to thinking about long-term abstract concepts like taking long-term abstract concepts like taking long-term abstract concepts like taking your money today, investing in the stock your money today, investing in the stock your money today, investing in the stock market, ignoring all the stuff that market, ignoring all the stuff that market, ignoring all the stuff that happens in between, and then having happens in between, and then having happens in between, and then having money left over later money left over later money left over later to to fund your retirement. That's so to to fund your retirement. That's so to to fund your retirement. That's so interesting, cuz a lot of the time interesting, cuz a lot of the time interesting, cuz a lot of the time people talk about tactics and people talk about tactics and people talk about tactics and strategies, but I guess underpinning strategies, but I guess underpinning strategies, but I guess underpinning your ability to execute on any of those your ability to execute on any of those your ability to execute on any of those tactics or strategies are one's own tactics or strategies are one's own tactics or strategies are one's own psychology. And is there academic psychology. And is there academic psychology. And is there academic research about the best sort of mental research about the best sort of mental research about the best sort of mental approach to take towards money and approach to take towards money and approach to take towards money and finance and investing? So, one of the finance and investing? So, one of the finance and investing? So, one of the best approaches, and it's a little bit best approaches, and it's a little bit best approaches, and it's a little bit counterintuitive, is to not look at your counterintuitive, is to not look at your counterintuitive, is to not look at your investments. There is a an academic investments. There is a an academic investments. There is a an academic paper showing that the more people look paper showing that the more people look paper showing that the more people look at their investments, the less risk they at their investments, the less risk they at their investments, the less risk they take, and the lower returns they earn. take, and the lower returns they earn. take, and the lower returns they earn. Because when you look at your Because when you look at your Because when you look at your investments every day, the stock market investments every day, the stock market investments every day, the stock market goes up and down. We know that. If goes up and down. We know that. If goes up and down. We know that. If you're looking every day at your you're looking every day at your you're looking every day at your portfolio and it's down 5%, up 6%, and portfolio and it's down 5%, up 6%, and portfolio and it's down 5%, up 6%, and going up and down all the time, that can going up and down all the time, that can going up and down all the time, that can be very stressful, and it makes it seem be very stressful, and it makes it seem be very stressful, and it makes it seem like the stock market is very risky. like the stock market is very risky. like the stock market is very risky. And so, people will invest less in the And so, people will invest less in the And so, people will invest less in the stock market. In reality, for for stock market. In reality, for for stock market. In reality, for for long-term investors who can invest in long-term investors who can invest in long-term investors who can invest in stocks, buy and hold for a very long stocks, buy and hold for a very long stocks, buy and hold for a very long period of time, that they're a lot safer period of time, that they're a lot safer period of time, that they're a lot safer than people think. Mhm. So, than people think. Mhm. So, than people think. Mhm. So, [clears throat] we've got some props [clears throat] we've got some props [clears throat] we've got some props here for some demonstrations we're going here for some demonstrations we're going here for some demonstrations we're going to do. Could you just give explain to me to do. Could you just give explain to me to do. Could you just give explain to me the high-level of what these things are the high-level of what these things are the high-level of what these things are on the table and the different on the table and the different on the table and the different frameworks we're going to go through? frameworks we're going to go through? frameworks we're going to go through? Sure. So, we have a bunch of things Sure. So, we have a bunch of things Sure. So, we have a bunch of things here. here. here. Uh this is one of my favorites that I Uh this is one of my favorites that I Uh this is one of my favorites that I bring up bring up bring up in a lot of my videos. So, this is the in a lot of my videos. So, this is the in a lot of my videos. So, this is the the PERMA model, which comes from the PERMA model, which comes from the PERMA model, which comes from positive psychology. Psychology is positive psychology. Psychology is positive psychology. Psychology is important for investing well, but it's important for investing well, but it's important for investing well, but it's also important for figuring out what also important for figuring out what also important for figuring out what your long-term investing strategy should your long-term investing strategy should your long-term investing strategy should be. We'll go through that. What else be. We'll go through that. What else be. We'll go through that. What else have we got here? have we got here? have we got here? This is the top 10 financial mistakes This is the top 10 financial mistakes This is the top 10 financial mistakes that I think people make. Uh this is the that I think people make. Uh this is the that I think people make. Uh this is the the three steps for investing your first the three steps for investing your first the three steps for investing your first $10,000. Okay. And we've got $10,000 $10,000. Okay. And we've got $10,000 $10,000. Okay. And we've got $10,000 there, so you're going to talk me there, so you're going to talk me there, so you're going to talk me through how we do that as well. through how we do that as well. through how we do that as well. >> all of the We're going to talk about all >> all of the We're going to talk about all >> all of the We're going to talk about all of the unrecoverable costs. of the unrecoverable costs. of the unrecoverable costs. Got a whole stack of them Got a whole stack of them Got a whole stack of them that you incur when you own a home. that you incur when you own a home. that you incur when you own a home. Okay. And I I I guess this begs the Okay. And I I I guess this begs the Okay. And I I I guess this begs the question, question, question, who is Ben Felix? What is your who is Ben Felix? What is your who is Ben Felix? What is your background, and what is the education, background, and what is the education, background, and what is the education, the reference points, the experiences the reference points, the experiences the reference points, the experiences that you're drawing upon to give us this that you're drawing upon to give us this that you're drawing upon to give us this information today? Probably where it information today? Probably where it information today? Probably where it starts starts starts for for being relevant is I I did a for for being relevant is I I did a for for being relevant is I I did a degree in mechanical engineering at degree in mechanical engineering at degree in mechanical engineering at Northeastern University. Northeastern University. Northeastern University. And I say that's relevant because when I And I say that's relevant because when I And I say that's relevant because when I came into finance, I wanted to approach came into finance, I wanted to approach came into finance, I wanted to approach it like an engineer, and a lot of it like an engineer, and a lot of it like an engineer, and a lot of finance, a lot of financial services of finance, a lot of financial services of finance, a lot of financial services of of investing and wealth management is of investing and wealth management is of investing and wealth management is not approached like an engineer. It's not approached like an engineer. It's not approached like an engineer. It's approached like a I feel almost bad approached like a I feel almost bad approached like a I feel almost bad saying this, but it's approached like a saying this, but it's approached like a saying this, but it's approached like a like a car dealership, like selling like a car dealership, like selling like a car dealership, like selling selling product. So, I was disappointed selling product. So, I was disappointed selling product. So, I was disappointed in that and and had to find my find my in that and and had to find my find my in that and and had to find my find my own way. So, they haven't got my best own way. So, they haven't got my best own way. So, they haven't got my best interests at heart. In in a lot of interests at heart. In in a lot of interests at heart. In in a lot of cases, I don't think so. cases, I don't think so. cases, I don't think so. And I started spending a lot of time And I started spending a lot of time And I started spending a lot of time reading through academic literature so reading through academic literature so reading through academic literature so that I could be very confident and that I could be very confident and that I could be very confident and comfortable that the advice that I was comfortable that the advice that I was comfortable that the advice that I was giving to people was good, high-quality giving to people was good, high-quality giving to people was good, high-quality advice. And where is the best place to advice. And where is the best place to advice. And where is the best place to start? start? start? Is it in the psychology? Is it one of Is it in the psychology? Is it one of Is it in the psychology? Is it one of the one of these frameworks? Is it the one of these frameworks? Is it the one of these frameworks? Is it somewhere else? Is there a background somewhere else? Is there a background somewhere else? Is there a background understanding of the economy one needs understanding of the economy one needs understanding of the economy one needs to to to to get going? That is a great question. to get going? That is a great question. to get going? That is a great question. I don't think so, and I think that's I don't think so, and I think that's I don't think so, and I think that's where a lot of people get stuck, where where a lot of people get stuck, where where a lot of people get stuck, where they believe they need to have a lot of they believe they need to have a lot of they believe they need to have a lot of background information before they can background information before they can background information before they can start investing. start investing. start investing. Uh they may do research on specific Uh they may do research on specific Uh they may do research on specific industries, they may look at like the industries, they may look at like the industries, they may look at like the energy sector so they can build out an energy sector so they can build out an energy sector so they can build out an energy portfolio as one example. But energy portfolio as one example. But energy portfolio as one example. But investing the way that I would say is investing the way that I would say is investing the way that I would say is sensible for most people, which is just sensible for most people, which is just sensible for most people, which is just using low-cost index funds, capturing using low-cost index funds, capturing using low-cost index funds, capturing market returns, the the market returns market returns, the the market returns market returns, the the market returns have been there, and they're going to have been there, and they're going to have been there, and they're going to continue to be there. They should continue to be there. They should continue to be there. They should continue to be there in the long run. continue to be there in the long run. continue to be there in the long run. Uh doing that doesn't require a lot of Uh doing that doesn't require a lot of Uh doing that doesn't require a lot of background knowledge. background knowledge. background knowledge. I would argue that people who know just I would argue that people who know just I would argue that people who know just a little bit, just enough, that just a little bit, just enough, that just a little bit, just enough, that just know that index funds are sensible, and know that index funds are sensible, and know that index funds are sensible, and they have enough conviction they can they have enough conviction they can they have enough conviction they can stick with that, they will be better stick with that, they will be better stick with that, they will be better long-term investors long-term investors long-term investors than someone who knows enough to hurt than someone who knows enough to hurt than someone who knows enough to hurt themselves. themselves. themselves. What would you say to young people that What would you say to young people that What would you say to young people that are thinking about are thinking about are thinking about their financial strategy? Would you say their financial strategy? Would you say their financial strategy? Would you say that someone in their that someone in their that someone in their early 20s, 21 years old, should adopt a early 20s, 21 years old, should adopt a early 20s, 21 years old, should adopt a completely different approach to money completely different approach to money completely different approach to money based on what you've just shown me, based on what you've just shown me, based on what you've just shown me, versus someone that's 51 years old? versus someone that's 51 years old? versus someone that's 51 years old? It's going to be different, for sure. I It's going to be different, for sure. I It's going to be different, for sure. I I think, and this is a it's a tricky I think, and this is a it's a tricky I think, and this is a it's a tricky subject, but a lot of young people feel subject, but a lot of young people feel subject, but a lot of young people feel a lot of pressure to save. a lot of pressure to save. a lot of pressure to save. And that might be saving for their And that might be saving for their And that might be saving for their retirement, it might be saving to buy a retirement, it might be saving to buy a retirement, it might be saving to buy a home, but they feel a lot of pressure home, but they feel a lot of pressure home, but they feel a lot of pressure from their parents and just from society from their parents and just from society from their parents and just from society in general that they need to be saving in general that they need to be saving in general that they need to be saving money, and that if they're not saving money, and that if they're not saving money, and that if they're not saving money, they're being irresponsible. But money, they're being irresponsible. But money, they're being irresponsible. But again, if we come back to academic again, if we come back to academic again, if we come back to academic research, there is research suggesting research, there is research suggesting research, there is research suggesting that it it's probably suboptimal for that it it's probably suboptimal for that it it's probably suboptimal for young people to save. General point young people to save. General point young people to save. General point is that you should save more when you is that you should save more when you is that you should save more when you have a higher income, and save less when have a higher income, and save less when have a higher income, and save less when you have a lower income. you have a lower income. you have a lower income. And what that ends up meaning is that And what that ends up meaning is that And what that ends up meaning is that young people young people young people may not need to save, or may not need to may not need to save, or may not need to may not need to save, or may not need to save as much as they feel pressured to save as much as they feel pressured to save as much as they feel pressured to save. save. save. The reason this topic is tricky is that, The reason this topic is tricky is that, The reason this topic is tricky is that, well what I just said is true, well what I just said is true, well what I just said is true, it can cause bad habits. it can cause bad habits. it can cause bad habits. Whereas people spend all of their Whereas people spend all of their Whereas people spend all of their income, and then don't have that shift income, and then don't have that shift income, and then don't have that shift towards saving at some point, then towards saving at some point, then towards saving at some point, then they'll they'll end up in a difficult they'll they'll end up in a difficult they'll they'll end up in a difficult position later on in life. position later on in life. position later on in life. Someone who's 50, Someone who's 50, Someone who's 50, it's going to depend on their situation. it's going to depend on their situation. it's going to depend on their situation. If they're the person who I just If they're the person who I just If they're the person who I just mentioned who never saved, mentioned who never saved, mentioned who never saved, they're in a tough position, and then they're in a tough position, and then they're in a tough position, and then they are going to need to save a lot in they are going to need to save a lot in they are going to need to save a lot in order to have some wealth later on in order to have some wealth later on in order to have some wealth later on in life. life. life. But if they've already saved, and they But if they've already saved, and they But if they've already saved, and they have wealth, then they can focus more on have wealth, then they can focus more on have wealth, then they can focus more on some of these topics. some of these topics. some of these topics. And you've got the the 10 money mistakes And you've got the the 10 money mistakes And you've got the the 10 money mistakes people make here. people make here. people make here. Can you run me through those ones, and Can you run me through those ones, and Can you run me through those ones, and just let me know if any of them is just let me know if any of them is just let me know if any of them is particularly pertinent or interesting particularly pertinent or interesting particularly pertinent or interesting that we should dive deeper into? So, that we should dive deeper into? So, that we should dive deeper into? So, this this one's controversial. this this one's controversial. this this one's controversial. It's not earning enough money. It's not earning enough money. It's not earning enough money. A A of people feel like they A A of people feel like they A A of people feel like they don't have an option. That they're not don't have an option. That they're not don't have an option. That they're not earning enough money because that's just earning enough money because that's just earning enough money because that's just the way things are and there's nothing the way things are and there's nothing the way things are and there's nothing that they can do about it. that they can do about it. that they can do about it. I don't think that's necessarily true. I don't think that's necessarily true. I don't think that's necessarily true. Investing in your human capital, and Investing in your human capital, and Investing in your human capital, and that can be formal education, it can be that can be formal education, it can be that can be formal education, it can be getting skills, it can be becoming an getting skills, it can be becoming an getting skills, it can be becoming an entrepreneur. Those are all ways to make entrepreneur. Those are all ways to make entrepreneur. Those are all ways to make your your own self your your own self your your own self a more valuable asset, to increase the a more valuable asset, to increase the a more valuable asset, to increase the value of your human capital, and allow value of your human capital, and allow value of your human capital, and allow you to earn more money. So, that's you to earn more money. So, that's you to earn more money. So, that's that's a big one. I think people who get that's a big one. I think people who get that's a big one. I think people who get stuck in the stuck in the stuck in the in the feeling or the thought that they in the feeling or the thought that they in the feeling or the thought that they do not have the ability to increase do not have the ability to increase do not have the ability to increase their income, and that this is just the their income, and that this is just the their income, and that this is just the way things are, I think that could be way things are, I think that could be way things are, I think that could be very problematic. I've always thought of very problematic. I've always thought of very problematic. I've always thought of it across these sort of five buckets. it across these sort of five buckets. it across these sort of five buckets. The first two buckets that we attempt to The first two buckets that we attempt to The first two buckets that we attempt to fill when we're starting our careers are fill when we're starting our careers are fill when we're starting our careers are our knowledge and then our skills. And our knowledge and then our skills. And our knowledge and then our skills. And kind of like when knowledge is applied, kind of like when knowledge is applied, kind of like when knowledge is applied, it becomes a skill. And these two first it becomes a skill. And these two first it becomes a skill. And these two first buckets are so imperative because buckets are so imperative because buckets are so imperative because they can almost never be unfilled. they can almost never be unfilled. they can almost never be unfilled. Whereas the other three buckets, which Whereas the other three buckets, which Whereas the other three buckets, which is your resources, your network, and is your resources, your network, and is your resources, your network, and your reputation, you can have career your reputation, you can have career your reputation, you can have career fluctuations and earthquakes that cause fluctuations and earthquakes that cause fluctuations and earthquakes that cause those buckets to unfill. So, as like you those buckets to unfill. So, as like you those buckets to unfill. So, as like you were saying earlier on about young were saying earlier on about young were saying earlier on about young people, one of the things I've always people, one of the things I've always people, one of the things I've always thought is like when you're young, just thought is like when you're young, just thought is like when you're young, just like optimize for filling your knowledge like optimize for filling your knowledge like optimize for filling your knowledge and skills as much as you possibly can. and skills as much as you possibly can. and skills as much as you possibly can. And actually, I guess that the level of And actually, I guess that the level of And actually, I guess that the level of nuance there is acquiring a rare but nuance there is acquiring a rare but nuance there is acquiring a rare but complementary stack of knowledge and complementary stack of knowledge and complementary stack of knowledge and skills that the market values. And I skills that the market values. And I skills that the market values. And I think over the long term, you know, this think over the long term, you know, this think over the long term, you know, this doesn't apply to everybody cuz things doesn't apply to everybody cuz things doesn't apply to everybody cuz things happen in life and bad things can happen in life and bad things can happen in life and bad things can happen, but over the long term, I think happen, but over the long term, I think happen, but over the long term, I think life tends to land you pretty much in life tends to land you pretty much in life tends to land you pretty much in and around the value of and the rarity and around the value of and the rarity and around the value of and the rarity and the complement complementarity of and the complement complementarity of and the complement complementarity of those knowledge and skills as it relates those knowledge and skills as it relates those knowledge and skills as it relates to the market's demands. That's to the market's demands. That's to the market's demands. That's absolutely true. There's data on this, absolutely true. There's data on this, absolutely true. There's data on this, too, where we know that there is a too, where we know that there is a too, where we know that there is a mechanical relationship, at least mechanical relationship, at least mechanical relationship, at least historically. We can talk about the historically. We can talk about the historically. We can talk about the future, but historically, there has been future, but historically, there has been future, but historically, there has been a mechanical relationship between formal a mechanical relationship between formal a mechanical relationship between formal education or trade education and education or trade education and education or trade education and lifetime earnings. lifetime earnings. lifetime earnings. And we also know that certain degree And we also know that certain degree And we also know that certain degree types, like engineering, finance, types, like engineering, finance, types, like engineering, finance, business, some other sciences have business, some other sciences have business, some other sciences have higher lifetime earnings than other higher lifetime earnings than other higher lifetime earnings than other degrees. degrees. degrees. So, it's you're I think you're So, it's you're I think you're So, it's you're I think you're absolutely right. There are and the hard absolutely right. There are and the hard absolutely right. There are and the hard part is we don't know what exactly those part is we don't know what exactly those part is we don't know what exactly those degrees and skills that are going to be degrees and skills that are going to be degrees and skills that are going to be the highest paying in the future are the highest paying in the future are the highest paying in the future are going to be. 10 years ago, we might have going to be. 10 years ago, we might have going to be. 10 years ago, we might have said software developers. Today, we said software developers. Today, we said software developers. Today, we might not. But even you as an example, might not. But even you as an example, might not. But even you as an example, so you did engineering and then you did so you did engineering and then you did so you did engineering and then you did finance. And now you've added this other finance. And now you've added this other finance. And now you've added this other string to your bow, which is you know string to your bow, which is you know string to your bow, which is you know how to make content on YouTube. And that how to make content on YouTube. And that how to make content on YouTube. And that makes you as a finance expert and makes you as a finance expert and makes you as a finance expert and professional and CIO so extremely rare. professional and CIO so extremely rare. professional and CIO so extremely rare. It almost makes you like one of It almost makes you like one of It almost makes you like one of 100 on planet Earth, maybe. 100 on planet Earth, maybe. 100 on planet Earth, maybe. And this is what I mean by rare and And this is what I mean by rare and And this is what I mean by rare and complementary skills. You could have complementary skills. You could have complementary skills. You could have just learned more finance. And I don't just learned more finance. And I don't just learned more finance. And I don't think that would have moved you up this think that would have moved you up this think that would have moved you up this sort of earning ladder. But because you sort of earning ladder. But because you sort of earning ladder. But because you added this really rare skill of being added this really rare skill of being added this really rare skill of being able to make content to your other skill able to make content to your other skill able to make content to your other skill stack, I'm guessing it made you money. stack, I'm guessing it made you money. stack, I'm guessing it made you money. It did. It has and I I continue to be It did. It has and I I continue to be It did. It has and I I continue to be paid well and, you know, it was paid well and, you know, it was paid well and, you know, it was Please don't, but if you were to go back Please don't, but if you were to go back Please don't, but if you were to go back and watch my old videos, which are still and watch my old videos, which are still and watch my old videos, which are still up, I'm so rigid and nervous and I when up, I'm so rigid and nervous and I when up, I'm so rigid and nervous and I when I was. And it took probably years of I was. And it took probably years of I was. And it took probably years of recording and we do a podcast, too, so recording and we do a podcast, too, so recording and we do a podcast, too, so just being in front of the camera for me just being in front of the camera for me just being in front of the camera for me to feel pretty good. I mean, I it to feel pretty good. I mean, I it to feel pretty good. I mean, I it probably took me 3 years to smile on probably took me 3 years to smile on probably took me 3 years to smile on camera. Really? camera. Really? camera. Really? >> [laughter] >> [laughter] >> [laughter] >> So, yes, that was a skill that I >> So, yes, that was a skill that I >> So, yes, that was a skill that I acquired through just practice, I guess. acquired through just practice, I guess. acquired through just practice, I guess. So, I say this because I really want So, I say this because I really want So, I say this because I really want people to think about how rare their people to think about how rare their people to think about how rare their skill stack is. It's not something we're skill stack is. It's not something we're skill stack is. It's not something we're taught. And then also, one of the things taught. And then also, one of the things taught. And then also, one of the things I noticed, I used to work in a a biotech I noticed, I used to work in a a biotech I noticed, I used to work in a a biotech company for a little while while I was company for a little while while I was company for a little while while I was in between things. And we were looking in between things. And we were looking in between things. And we were looking for a writer, a biotech writer. for a writer, a biotech writer. for a writer, a biotech writer. Now, the other writers that we'd hired Now, the other writers that we'd hired Now, the other writers that we'd hired at our other companies might have been at our other companies might have been at our other companies might have been paid, I don't know, $50,000, whatever it paid, I don't know, $50,000, whatever it paid, I don't know, $50,000, whatever it is. For a biotech writer, we would pay is. For a biotech writer, we would pay is. For a biotech writer, we would pay them a quarter of a million. And all the them a quarter of a million. And all the them a quarter of a million. And all the only difference is the biotech writer only difference is the biotech writer only difference is the biotech writer had like some base They didn't have to had like some base They didn't have to had like some base They didn't have to go to medical school. They just needed go to medical school. They just needed go to medical school. They just needed experience in writing about biotech. experience in writing about biotech. experience in writing about biotech. Yeah. And it 5x their earnings. So, this Yeah. And it 5x their earnings. So, this Yeah. And it 5x their earnings. So, this other point is, you might have a skill other point is, you might have a skill other point is, you might have a skill stack, but are you selling them on the stack, but are you selling them on the stack, but are you selling them on the right market? And even me, first part of right market? And even me, first part of right market? And even me, first part of my career was marketing. I was helping my career was marketing. I was helping my career was marketing. I was helping Uber and fizzy drinks company and dress Uber and fizzy drinks company and dress Uber and fizzy drinks company and dress seller company sell their dresses. seller company sell their dresses. seller company sell their dresses. As I just said, the second little stop I As I just said, the second little stop I As I just said, the second little stop I took in my career was helping biotech took in my career was helping biotech took in my career was helping biotech companies with marketing that are about companies with marketing that are about companies with marketing that are about to IPO. to IPO. to IPO. >> [laughter] >> [laughter] >> [laughter] >> My first contract with one of those >> My first contract with one of those >> My first contract with one of those companies was worth 8 million, 6 months' companies was worth 8 million, 6 months' companies was worth 8 million, 6 months' work. work. work. And I it made it was a real pivotal And I it made it was a real pivotal And I it made it was a real pivotal moment in my career where I go, it's not moment in my career where I go, it's not moment in my career where I go, it's not just the skills you have, it's like just the skills you have, it's like just the skills you have, it's like where you the market and industry where where you the market and industry where where you the market and industry where you sell those skills can wildly change you sell those skills can wildly change you sell those skills can wildly change your your, as you say on that card, your your your, as you say on that card, your your your, as you say on that card, your earning potential. Yeah. And as you say, earning potential. Yeah. And as you say, earning potential. Yeah. And as you say, that this is something that you don't that this is something that you don't that this is something that you don't have full control over because you could have full control over because you could have full control over because you could do all those things and not find work as do all those things and not find work as do all those things and not find work as a biotech writer, but putting yourself a biotech writer, but putting yourself a biotech writer, but putting yourself in that position, I think, does increase in that position, I think, does increase in that position, I think, does increase the odds. What's the second one you've the odds. What's the second one you've the odds. What's the second one you've got there? got there? got there? Second one is not saving enough. Touched on this a little bit. Young Touched on this a little bit. Young people maybe don't need to save, but at people maybe don't need to save, but at people maybe don't need to save, but at some point, you do have to start saving. some point, you do have to start saving. some point, you do have to start saving. And the tricky thing about saving is And the tricky thing about saving is And the tricky thing about saving is that wealth compounds over time. that wealth compounds over time. that wealth compounds over time. And if you're not saving enough, you're And if you're not saving enough, you're And if you're not saving enough, you're missing out on compounding and it gets a missing out on compounding and it gets a missing out on compounding and it gets a lot harder to catch up with the amount lot harder to catch up with the amount lot harder to catch up with the amount of savings you would have otherwise had of savings you would have otherwise had of savings you would have otherwise had if you'd started earlier. if you'd started earlier. if you'd started earlier. So, that's a big one. And some people So, that's a big one. And some people So, that's a big one. And some people will wake up when they're 50, 55, maybe will wake up when they're 50, 55, maybe will wake up when they're 50, 55, maybe even 60 and realize they haven't saved even 60 and realize they haven't saved even 60 and realize they haven't saved enough. But by that time, enough. But by that time, enough. But by that time, there's nothing that you can do about it there's nothing that you can do about it there's nothing that you can do about it or very little that you can do about it. or very little that you can do about it. or very little that you can do about it. There's a lot of parallels with health There's a lot of parallels with health There's a lot of parallels with health here where if you eat poorly and don't exercise, if you eat poorly and don't exercise, you can you can you can >> that >> that >> that positive emotion positive emotion positive emotion is one big piece of it. What does that is one big piece of it. What does that is one big piece of it. What does that mean? It's literally enjoying what mean? It's literally enjoying what mean? It's literally enjoying what you're doing and feeling good throughout you're doing and feeling good throughout you're doing and feeling good throughout the day. Engagement, the day. Engagement, the day. Engagement, you could probably argue that we're you could probably argue that we're you could probably argue that we're getting some of that right now where getting some of that right now where getting some of that right now where you're doing something that you enjoy you're doing something that you enjoy you're doing something that you enjoy doing that's maybe a little bit doing that's maybe a little bit doing that's maybe a little bit challenging, but it's your skill level. challenging, but it's your skill level. challenging, but it's your skill level. It's the idea of getting into flow. It's the idea of getting into flow. It's the idea of getting into flow. I I know I get that when I do podcast I I know I get that when I do podcast I I know I get that when I do podcast interviews, when I do research, when I'm interviews, when I do research, when I'm interviews, when I do research, when I'm sitting down and and writing a video sitting down and and writing a video sitting down and and writing a video script. Mhm. Relationships script. Mhm. Relationships script. Mhm. Relationships [clears throat] is is having good, [clears throat] is is having good, [clears throat] is is having good, strong relationships with with people strong relationships with with people strong relationships with with people who are close to you in your life and who are close to you in your life and who are close to you in your life and that can be friends, it can be family that can be friends, it can be family that can be friends, it can be family members, it can be colleagues. members, it can be colleagues. members, it can be colleagues. Meaning is being part of something that Meaning is being part of something that Meaning is being part of something that is bigger than yourself. is bigger than yourself. is bigger than yourself. That can be a lot of different things. That can be a lot of different things. That can be a lot of different things. For some people, it's religion. For some For some people, it's religion. For some For some people, it's religion. For some people, it's community. For some people, people, it's community. For some people, people, it's community. For some people, it's their own business. Mhm. it's their own business. Mhm. it's their own business. Mhm. And accomplishment is achieving hard And accomplishment is achieving hard And accomplishment is achieving hard things. Setting goals and achieving things. Setting goals and achieving things. Setting goals and achieving them. them. them. You're going to look at the items of the You're going to look at the items of the You're going to look at the items of the PERMA model. You're going to look at PERMA model. You're going to look at PERMA model. You're going to look at those as categories and think about what those as categories and think about what those as categories and think about what other goals you may have that fit into other goals you may have that fit into other goals you may have that fit into those categories. those categories. those categories. That's called a categorical prompt. And That's called a categorical prompt. And That's called a categorical prompt. And again, there's evidence behind that again, there's evidence behind that again, there's evidence behind that helping people elicit more meaningful helping people elicit more meaningful helping people elicit more meaningful goals. goals. goals. So, one of the things I said is buy a So, one of the things I said is buy a So, one of the things I said is buy a Ferrari. Again, these aren't my goals, I Ferrari. Again, these aren't my goals, I Ferrari. Again, these aren't my goals, I don't care about Ferraris, but in case don't care about Ferraris, but in case don't care about Ferraris, but in case they want to sponsor the podcast, then I they want to sponsor the podcast, then I they want to sponsor the podcast, then I care about Ferraris. care about Ferraris. care about Ferraris. But say the Ferrari thing, But say the Ferrari thing, But say the Ferrari thing, do do I have to find where it sits with do do I have to find where it sits with do do I have to find where it sits with in terms of positive emotion, in terms of positive emotion, in terms of positive emotion, engagement, relationships, meaning, engagement, relationships, meaning, engagement, relationships, meaning, accomplishment? It would be wise to and accomplishment? It would be wise to and accomplishment? It would be wise to and this is why I think this framework is so this is why I think this framework is so this is why I think this framework is so important because you might realize that important because you might realize that important because you might realize that a Ferrari does not contribute to any of a Ferrari does not contribute to any of a Ferrari does not contribute to any of these things. It might, though. these things. It might, though. these things. It might, though. Like maybe you take it to the track and Like maybe you take it to the track and Like maybe you take it to the track and you spend hours racing it. And that you spend hours racing it. And that you spend hours racing it. And that would be engagement. would be engagement. would be engagement. >> engagement. >> engagement. >> engagement. Maybe you have a bunch of buddies who Maybe you have a bunch of buddies who Maybe you have a bunch of buddies who have Ferraris and you want to be part of have Ferraris and you want to be part of have Ferraris and you want to be part of that friend group. that friend group. that friend group. So, that's relationships. Yeah. Okay. I So, that's relationships. Yeah. Okay. I So, that's relationships. Yeah. Okay. I mean, positive emotions, but that might mean, positive emotions, but that might mean, positive emotions, but that might only last a couple of days. Yeah, what's only last a couple of days. Yeah, what's only last a couple of days. Yeah, what's the hedonic treadmill idea? That's the hedonic treadmill idea? That's the hedonic treadmill idea? That's exactly it. Yeah. exactly it. Yeah. exactly it. Yeah. And then accomplishment, I mean, it's And then accomplishment, I mean, it's And then accomplishment, I mean, it's not really an acco- If it was a goal not really an acco- If it was a goal not really an acco- If it was a goal that you've had since you were 5 years that you've had since you were 5 years that you've had since you were 5 years old, maybe that you could call that old, maybe that you could call that old, maybe that you could call that accomplishment, maybe. Okay, so I fit my accomplishment, maybe. Okay, so I fit my accomplishment, maybe. Okay, so I fit my my financial goals, my life goals into my financial goals, my life goals into my financial goals, my life goals into the PERMA model as a way to understand the PERMA model as a way to understand the PERMA model as a way to understand what my financial goals should be. Yeah. what my financial goals should be. Yeah. what my financial goals should be. Yeah. Okay. How many people in the general Okay. How many people in the general Okay. How many people in the general public do you think have actually public do you think have actually public do you think have actually thought about what a good life for them thought about what a good life for them thought about what a good life for them looks like? Not enough. Not many. I looks like? Not enough. Not many. I looks like? Not enough. Not many. I think everyone's people are so busy with think everyone's people are so busy with think everyone's people are so busy with their day-to-day lives. I know this is their day-to-day lives. I know this is their day-to-day lives. I know this is true for me and my family, too. It's true for me and my family, too. It's true for me and my family, too. It's really, really hard to step back and really, really hard to step back and really, really hard to step back and have this kind of thoughtful discussion have this kind of thoughtful discussion have this kind of thoughtful discussion about what you actually want your life about what you actually want your life about what you actually want your life to look like. to look like. to look like. Cuz I was just thinking about that. I Cuz I was just thinking about that. I Cuz I was just thinking about that. I was thinking I don't even know if I've was thinking I don't even know if I've was thinking I don't even know if I've got um really clearly defined life goals got um really clearly defined life goals got um really clearly defined life goals for myself. Like I think most of us just for myself. Like I think most of us just for myself. Like I think most of us just kind of act on how we feel. Yeah. kind of act on how we feel. Yeah. kind of act on how we feel. Yeah. And that can somewhat drift us towards And that can somewhat drift us towards And that can somewhat drift us towards the short-term. Like if I just the short-term. Like if I just the short-term. Like if I just Yeah, what what's going to make me feel Yeah, what what's going to make me feel Yeah, what what's going to make me feel good today? good today? good today? And do that every day. I don't know. And do that every day. I don't know. And do that every day. I don't know. Some might argue that you have to be a Some might argue that you have to be a Some might argue that you have to be a bit more long-term thinking. bit more long-term thinking. bit more long-term thinking. It can help. It can help, right? Cuz it It can help. It can help, right? Cuz it It can help. It can help, right? Cuz it it it can help you from making decisions it it can help you from making decisions it it can help you from making decisions that you might regret in the future. that you might regret in the future. that you might regret in the future. Mhm. Yeah, cuz when I look at this PERMA Mhm. Yeah, cuz when I look at this PERMA Mhm. Yeah, cuz when I look at this PERMA model, there's some things on here that model, there's some things on here that model, there's some things on here that I've optimized for, which have I've optimized for, which have I've optimized for, which have sacrificed the other things that I care sacrificed the other things that I care sacrificed the other things that I care >> That's it. That's it. Yeah. Like you >> That's it. That's it. Yeah. Like you >> That's it. That's it. Yeah. Like you might have I might have over-indexed on might have I might have over-indexed on might have I might have over-indexed on this, like this, like this, like achieving things, but might have cost me achieving things, but might have cost me achieving things, but might have cost me some relationships. some relationships. some relationships. So what's the fourth mistake people So what's the fourth mistake people So what's the fourth mistake people make? Yeah, so this is related to what make? Yeah, so this is related to what make? Yeah, so this is related to what we were just talking about, but it's we were just talking about, but it's we were just talking about, but it's it's overspending on the wrong things. it's overspending on the wrong things. it's overspending on the wrong things. Okay. Okay. Okay. When you think about what is a good life When you think about what is a good life When you think about what is a good life for you, and you realize if you realize for you, and you realize if you realize for you, and you realize if you realize that you're spending on things that are that you're spending on things that are that you're spending on things that are not contributing to that, which is not contributing to that, which is not contributing to that, which is resulting in you not being able to save resulting in you not being able to save resulting in you not being able to save toward things that would contribute to toward things that would contribute to toward things that would contribute to what you want your life to look like, what you want your life to look like, what you want your life to look like, that's probably not a great position to that's probably not a great position to that's probably not a great position to find yourself in. find yourself in. find yourself in. So that could be spending $12 on a an So that could be spending $12 on a an So that could be spending $12 on a an iced coffee every morning and not iced coffee every morning and not iced coffee every morning and not enjoying it, cuz you could get positive enjoying it, cuz you could get positive enjoying it, cuz you could get positive emotion out of that. But you're like emotion out of that. But you're like emotion out of that. But you're like rushing to work, chugging down the $12 rushing to work, chugging down the $12 rushing to work, chugging down the $12 coffee every day. coffee every day. coffee every day. That's probably not contributing to a That's probably not contributing to a That's probably not contributing to a good life. good life. good life. Number five might be Number five might be Number five might be one of the bigger ones, one of the bigger ones, one of the bigger ones, which is not taking investment risks. which is not taking investment risks. which is not taking investment risks. And that's really the stock market has And that's really the stock market has And that's really the stock market has delivered these incredible long-term delivered these incredible long-term delivered these incredible long-term returns, and on expectation, it should returns, and on expectation, it should returns, and on expectation, it should continue delivering strong returns for continue delivering strong returns for continue delivering strong returns for investors. Not participating that in investors. Not participating that in investors. Not participating that in that is a huge mistake, and it's a that is a huge mistake, and it's a that is a huge mistake, and it's a mistake that many, many people make. A mistake that many, many people make. A mistake that many, many people make. A lot of people don't invest in stocks at lot of people don't invest in stocks at lot of people don't invest in stocks at all, all, all, and a lot of people who do invest in the and a lot of people who do invest in the and a lot of people who do invest in the stock market don't invest enough in stock market don't invest enough in stock market don't invest enough in stocks. They have very conservative stocks. They have very conservative stocks. They have very conservative portfolios. And that has a very large portfolios. And that has a very large portfolios. And that has a very large implicit cost. By not participating in implicit cost. By not participating in implicit cost. By not participating in the stock market when you could be, the stock market when you could be, the stock market when you could be, you're giving up a huge amount of of you're giving up a huge amount of of you're giving up a huge amount of of economic gain. economic gain. economic gain. How do you quantify that for the average How do you quantify that for the average How do you quantify that for the average person in terms of what kind of gain person in terms of what kind of gain person in terms of what kind of gain they're giving up, or the size of the they're giving up, or the size of the they're giving up, or the size of the gain they're giving up? Well, you can gain they're giving up? Well, you can gain they're giving up? Well, you can look at the historical returns on look at the historical returns on look at the historical returns on stocks, stocks, stocks, uh and you can also look at the expected uh and you can also look at the expected uh and you can also look at the expected returns returns returns on stocks. So let's say it's uh let's on stocks. So let's say it's uh let's on stocks. So let's say it's uh let's say it's 7% say it's 7% say it's 7% that we expect stocks to turn in the that we expect stocks to turn in the that we expect stocks to turn in the long run. long run. long run. And if you could get 2% by sitting in And if you could get 2% by sitting in And if you could get 2% by sitting in cash, that 5% difference is your cash, that 5% difference is your cash, that 5% difference is your opportunity cost of not investing in the opportunity cost of not investing in the opportunity cost of not investing in the stock market when you otherwise could stock market when you otherwise could stock market when you otherwise could be. be. be. And 5% compounded over the long term is And 5% compounded over the long term is And 5% compounded over the long term is enormous. enormous. enormous. So say I have $10,000 So say I have $10,000 So say I have $10,000 uh and I invest it uh and I invest it uh and I invest it in in in the stock market, and I'm getting what the stock market, and I'm getting what the stock market, and I'm getting what did you say, 8%? 7 Say 7%. did you say, 8%? 7 Say 7%. did you say, 8%? 7 Say 7%. How much money is that? How much money is that? How much money is that? Let's have a look. Let's have a look. Let's have a look. So I've done $10,000, which is what we So I've done $10,000, which is what we So I've done $10,000, which is what we have here. Mhm. Invested in the stock have here. Mhm. Invested in the stock have here. Mhm. Invested in the stock market at 7% return over 40 years, market at 7% return over 40 years, market at 7% return over 40 years, that would be $150,000. Do you know what's um Do you know what's Do you know what's um Do you know what's quite scary when I think about that? Is quite scary when I think about that? Is quite scary when I think about that? Is does that kind of means that today if I does that kind of means that today if I does that kind of means that today if I spend $10,000, I'm actually spending spend $10,000, I'm actually spending spend $10,000, I'm actually spending $150,000. $150,000. $150,000. Yes. Yes. Yes. Which makes me not want to spend any Which makes me not want to spend any Which makes me not want to spend any money on anything. Yeah. money on anything. Yeah. money on anything. Yeah. Cuz if you buy I don't know what cost 10 Cuz if you buy I don't know what cost 10 Cuz if you buy I don't know what cost 10 What does What cost $10,000? Like a a What does What cost $10,000? Like a a What does What cost $10,000? Like a a car, small car? Yeah, maybe. Yeah. car, small car? Yeah, maybe. Yeah. car, small car? Yeah, maybe. Yeah. You're actually spending $150,000 You're actually spending $150,000 You're actually spending $150,000 when you factor in the fact that if you when you factor in the fact that if you when you factor in the fact that if you put that $10,000 into the stock market, put that $10,000 into the stock market, put that $10,000 into the stock market, you could have made 7% a year, and it you could have made 7% a year, and it you could have made 7% a year, and it would have turned into $150,000. Yeah, would have turned into $150,000. Yeah, would have turned into $150,000. Yeah, that's that's one side of the coin. that's that's one side of the coin. that's that's one side of the coin. Yeah, I think you also have to think Yeah, I think you also have to think Yeah, I think you also have to think about any enjoyment or utility that you about any enjoyment or utility that you about any enjoyment or utility that you get out of that car. If that car lets get out of that car. If that car lets get out of that car. If that car lets you drive to a job you couldn't have you drive to a job you couldn't have you drive to a job you couldn't have otherwise done, otherwise done, otherwise done, it may have a significant economic value it may have a significant economic value it may have a significant economic value to you in the long run. to you in the long run. to you in the long run. As one example. You know, I've got a As one example. You know, I've got a As one example. You know, I've got a coffee here. Some people spend coffee here. Some people spend coffee here. Some people spend $10 on a cup of coffee with frappachappa $10 on a cup of coffee with frappachappa $10 on a cup of coffee with frappachappa toppings and all that stuff. toppings and all that stuff. toppings and all that stuff. Looking at that over the long term, Looking at that over the long term, Looking at that over the long term, in 40 years, if you'd not bought that in 40 years, if you'd not bought that in 40 years, if you'd not bought that coffee and put it into the stock market coffee and put it into the stock market coffee and put it into the stock market and got just 7% return, and got just 7% return, and got just 7% return, you would have had $150. you would have had $150. you would have had $150. So when you buy that $10 coffee, you're So when you buy that $10 coffee, you're So when you buy that $10 coffee, you're actually theoretically actually theoretically actually theoretically spending $150 in 40 years' time. spending $150 in 40 years' time. spending $150 in 40 years' time. So you better really enjoy the coffee. So you better really enjoy the coffee. So you better really enjoy the coffee. Is there a bit of a fear that it makes Is there a bit of a fear that it makes Is there a bit of a fear that it makes us not want to spend money on us not want to spend money on us not want to spend money on anything, and therefore we end up having anything, and therefore we end up having anything, and therefore we end up having a shitty life in the near term? No, I I a shitty life in the near term? No, I I a shitty life in the near term? No, I I think that's why this this framework think that's why this this framework think that's why this this framework That's why the the PERMA framework for That's why the the PERMA framework for That's why the the PERMA framework for thinking about these decisions is so thinking about these decisions is so thinking about these decisions is so important, because you do want to have important, because you do want to have important, because you do want to have positive emotion and engagement, positive emotion and engagement, positive emotion and engagement, relationships, meaning, and relationships, meaning, and relationships, meaning, and accomplishment. Those are all really, accomplishment. Those are all really, accomplishment. Those are all really, really important. And yes, that money really important. And yes, that money really important. And yes, that money could be worth more in the future, but could be worth more in the future, but could be worth more in the future, but it can also be a worth a lot today if it can also be a worth a lot today if it can also be a worth a lot today if you're optimizing on the right things. you're optimizing on the right things. you're optimizing on the right things. What else? Number six. What else? Number six. What else? Number six. It's another big one. So not taking It's another big one. So not taking It's another big one. So not taking enough risk is is important. Taking the enough risk is is important. Taking the enough risk is is important. Taking the wrong risks with your investments. wrong risks with your investments. wrong risks with your investments. So I we we just ran some numbers about a So I we we just ran some numbers about a So I we we just ran some numbers about a 7% stock market return. You can 7% stock market return. You can 7% stock market return. You can basically get that using an index fund. basically get that using an index fund. basically get that using an index fund. The problem is a lot of people don't The problem is a lot of people don't The problem is a lot of people don't invest in index funds. invest in index funds. invest in index funds. They pick individual stocks hoping to They pick individual stocks hoping to They pick individual stocks hoping to earn really high returns. They trade earn really high returns. They trade earn really high returns. They trade individual stock options. Uh they trade individual stock options. Uh they trade individual stock options. Uh they trade crypto tokens and all that kind of crypto tokens and all that kind of crypto tokens and all that kind of stuff. And a lot of those types of risks stuff. And a lot of those types of risks stuff. And a lot of those types of risks have negative expected returns, or they have negative expected returns, or they have negative expected returns, or they have high costs if you're doing a lot of have high costs if you're doing a lot of have high costs if you're doing a lot of trading. trading. trading. And that can really erode long-term And that can really erode long-term And that can really erode long-term investment growth. What about buying a house? What about buying a house? Is that a good investment? Is that a good investment? Is that a good investment? I wouldn't consider buying a house to I wouldn't consider buying a house to I wouldn't consider buying a house to live in an investment. It's sort It's live in an investment. It's sort It's live in an investment. It's sort It's sort of is. You get an asset, sort of is. You get an asset, sort of is. You get an asset, but you're really you're buying an asset but you're really you're buying an asset but you're really you're buying an asset that funds your housing consumption. It that funds your housing consumption. It that funds your housing consumption. It kind of pays you a dividend that's sort kind of pays you a dividend that's sort kind of pays you a dividend that's sort of like getting rent of like getting rent of like getting rent from the house that you own. from the house that you own. from the house that you own. When you do the side-by-side comparison, When you do the side-by-side comparison, When you do the side-by-side comparison, which I think is the only way to think which I think is the only way to think which I think is the only way to think about this, about this, about this, if you compare buying a house, so that if you compare buying a house, so that if you compare buying a house, so that means in Canada, you'd usually save up means in Canada, you'd usually save up means in Canada, you'd usually save up for a 20% down payment. So you put 20% for a 20% down payment. So you put 20% for a 20% down payment. So you put 20% down on your house. down on your house. down on your house. Uh you take out a mortgage to finance Uh you take out a mortgage to finance Uh you take out a mortgage to finance the rest. the rest. the rest. You know, living in the house, you're You know, living in the house, you're You know, living in the house, you're paying your mortgage payment, you're paying your mortgage payment, you're paying your mortgage payment, you're paying for some maintenance costs, paying for some maintenance costs, paying for some maintenance costs, you're paying for property taxes. you're paying for property taxes. you're paying for property taxes. Alternatively, you could have rented the Alternatively, you could have rented the Alternatively, you could have rented the house. That 20% that went into buying a house. That 20% that went into buying a house. That 20% that went into buying a home could have been invested in the home could have been invested in the home could have been invested in the stock market. So again, we're back to stock market. So again, we're back to stock market. So again, we're back to the idea of opportunity costs. the idea of opportunity costs. the idea of opportunity costs. And the other important thing here is And the other important thing here is And the other important thing here is that renting typically has lower cash that renting typically has lower cash that renting typically has lower cash flow costs than owning. So these are the flow costs than owning. So these are the flow costs than owning. So these are the unrecoverable costs unrecoverable costs unrecoverable costs of owning a home. of owning a home. of owning a home. Mortgage interest. Mortgage interest. Mortgage interest. So that's when you buy a house and you So that's when you buy a house and you So that's when you buy a house and you borrow to to fund the purchase, you're borrow to to fund the purchase, you're borrow to to fund the purchase, you're paying interest to the bank. That's a I paying interest to the bank. That's a I paying interest to the bank. That's a I I call these unrecoverable costs. That's I call these unrecoverable costs. That's I call these unrecoverable costs. That's money that you're paying money that you're paying money that you're paying for the use of money in this case, and for the use of money in this case, and for the use of money in this case, and you're not going to get those dollars you're not going to get those dollars you're not going to get those dollars back. It's gone. Opportunity costs. So that's what I just Opportunity costs. So that's what I just mentioned. Whatever equity you have in a mentioned. Whatever equity you have in a mentioned. Whatever equity you have in a home home home is equity that you could have otherwise is equity that you could have otherwise is equity that you could have otherwise invested in the stock market. The invested in the stock market. The invested in the stock market. The capital portion, the principal, the the capital portion, the principal, the the capital portion, the principal, the the price of homes has increased around price of homes has increased around price of homes has increased around inflation at the rate of inflation, inflation at the rate of inflation, inflation at the rate of inflation, maybe a little bit higher historically. maybe a little bit higher historically. maybe a little bit higher historically. Stocks have far outpaced Stocks have far outpaced Stocks have far outpaced inflation. So by having money sitting in inflation. So by having money sitting in inflation. So by having money sitting in a house as opposed to invested in the a house as opposed to invested in the a house as opposed to invested in the stock market, you have what is called an stock market, you have what is called an stock market, you have what is called an opportunity cost. opportunity cost. opportunity cost. You're not earning returns you could You're not earning returns you could You're not earning returns you could have otherwise been earning. have otherwise been earning. have otherwise been earning. So that opportunity cost is one of the So that opportunity cost is one of the So that opportunity cost is one of the largest costs of owning a home. largest costs of owning a home. largest costs of owning a home. So I mean, the mortgage interest, So I mean, the mortgage interest, So I mean, the mortgage interest, the opportunity cost of equity, the opportunity cost of equity, the opportunity cost of equity, property taxes are another big property taxes are another big property taxes are another big unrecoverable cost. Property taxes vary unrecoverable cost. Property taxes vary unrecoverable cost. Property taxes vary depending on where you are, but it's say depending on where you are, but it's say depending on where you are, but it's say between 0.5% and 1%. Maybe some between 0.5% and 1%. Maybe some between 0.5% and 1%. Maybe some sometimes a little bit higher. You get sometimes a little bit higher. You get sometimes a little bit higher. You get utilities and some services in exchange utilities and some services in exchange utilities and some services in exchange for it, but it's again, it's an for it, but it's again, it's an for it, but it's again, it's an unrecoverable cost. You pay that, you've unrecoverable cost. You pay that, you've unrecoverable cost. You pay that, you've got nothing left afterwards. got nothing left afterwards. got nothing left afterwards. And then you've got maintenance costs. And then you've got maintenance costs. And then you've got maintenance costs. Oh, this is the annoying one. This is Oh, this is the annoying one. This is Oh, this is the annoying one. This is the It's It's the annoying one, and it's the It's It's the annoying one, and it's the It's It's the annoying one, and it's the one that I think people the one that I think people the one that I think people underestimate the most. underestimate the most. underestimate the most. >> Mhm. >> Mhm. >> Mhm. I started making content about renting I started making content about renting I started making content about renting versus owning a home years ago. versus owning a home years ago. versus owning a home years ago. I used to say 1% was a reasonable I used to say 1% was a reasonable I used to say 1% was a reasonable estimate of maintenance costs, and estimate of maintenance costs, and estimate of maintenance costs, and people would push back and say that's people would push back and say that's people would push back and say that's way too high. There's a bunch of way too high. There's a bunch of way too high. There's a bunch of academic literature on this, too, that's academic literature on this, too, that's academic literature on this, too, that's says it could well be over 2%. I think says it could well be over 2%. I think says it could well be over 2%. I think that's probably a more reasonable that's probably a more reasonable that's probably a more reasonable estimate. estimate. estimate. Having been a homeowner now for 6 years Having been a homeowner now for 6 years Having been a homeowner now for 6 years after renting prior to that, after renting prior to that, after renting prior to that, I'm fairly confident, at least in my I'm fairly confident, at least in my I'm fairly confident, at least in my case, that maintenance costs are far case, that maintenance costs are far case, that maintenance costs are far higher than 1 or 2% of the property higher than 1 or 2% of the property higher than 1 or 2% of the property value per year. Yeah, I mean, I I bought value per year. Yeah, I mean, I I bought value per year. Yeah, I mean, I I bought my first home a a while ago, and uh my first home a a while ago, and uh my first home a a while ago, and uh hell, I I didn't think about the hell, I I didn't think about the hell, I I didn't think about the gardening, and the pool pump gets gardening, and the pool pump gets gardening, and the pool pump gets broken, and then broken, and then broken, and then there's a crack in the the patio there's a crack in the the patio there's a crack in the the patio outside, and then the heating system outside, and then the heating system outside, and then the heating system breaks, and then breaks, and then breaks, and then everything just seems to break. everything just seems to break. everything just seems to break. >> And it's always breaking. It's always >> And it's always breaking. It's always >> And it's always breaking. It's always breaking. Every time I go back there, breaking. Every time I go back there, breaking. Every time I go back there, which is it's in a different country, which is it's in a different country, which is it's in a different country, I'm the first week I'm just spent I'm the first week I'm just spent I'm the first week I'm just spent looking at the things that have broken looking at the things that have broken looking at the things that have broken since I was last year. Like making a since I was last year. Like making a since I was last year. Like making a list of the new expenses, and it's never list of the new expenses, and it's never list of the new expenses, and it's never cheap. No. And if I was renting, that cheap. No. And if I was renting, that cheap. No. And if I was renting, that wouldn't be my problem. No. There's also wouldn't be my problem. No. There's also wouldn't be my problem. No. There's also like another cost here which we don't like another cost here which we don't like another cost here which we don't talk about, which is like the time you talk about, which is like the time you talk about, which is like the time you waste waste waste on the maintenance. Like when we think on the maintenance. Like when we think on the maintenance. Like when we think of maintenance cost, I imagine people of maintenance cost, I imagine people of maintenance cost, I imagine people are thinking about the fees to fix are thinking about the fees to fix are thinking about the fees to fix things, but actually the time I spend things, but actually the time I spend things, but actually the time I spend having phone calls and speaking to having phone calls and speaking to having phone calls and speaking to people, for me is is worth a lot more people, for me is is worth a lot more people, for me is is worth a lot more than just the costs. than just the costs. than just the costs. But anyway, yeah, maintenance cost. But anyway, yeah, maintenance cost. But anyway, yeah, maintenance cost. Yeah, the coordination is huge, and you Yeah, the coordination is huge, and you Yeah, the coordination is huge, and you could outsource that, but that would be could outsource that, but that would be could outsource that, but that would be expensive, and expensive, and expensive, and depending on how valuable your time is, depending on how valuable your time is, depending on how valuable your time is, it could make sense to outsource it. But it could make sense to outsource it. But it could make sense to outsource it. But I I agree with you. I do the same thing. I I agree with you. I do the same thing. I I agree with you. I do the same thing. I spend time on the phone finding which I spend time on the phone finding which I spend time on the phone finding which contractor is going to come in and fix contractor is going to come in and fix contractor is going to come in and fix this thing. this thing. this thing. And then you have to wait for them, and And then you have to wait for them, and And then you have to wait for them, and then maybe they're late. then maybe they're late. then maybe they're late. Yeah. Yeah. Yeah. So, that's maintenance costs. So, that's maintenance costs. So, that's maintenance costs. We have emergency cost here, which is We have emergency cost here, which is We have emergency cost here, which is really uh a subset of maintenance costs. really uh a subset of maintenance costs. really uh a subset of maintenance costs. So, you can have big things, like the So, you can have big things, like the So, you can have big things, like the roof needs to be redone, or the roof needs to be redone, or the roof needs to be redone, or the foundation cracks, whatever. Those can foundation cracks, whatever. Those can foundation cracks, whatever. Those can be very significant. And one of the be very significant. And one of the be very significant. And one of the challenges with those types of big costs challenges with those types of big costs challenges with those types of big costs is that you kind of have to have is that you kind of have to have is that you kind of have to have liquidity available to fund them. liquidity available to fund them. liquidity available to fund them. And that means that you have to have And that means that you have to have And that means that you have to have cash sitting somewhere, or at least some cash sitting somewhere, or at least some cash sitting somewhere, or at least some liquid assets sitting somewhere. So, liquid assets sitting somewhere. So, liquid assets sitting somewhere. So, probably not invested in the stock probably not invested in the stock probably not invested in the stock market, which also has an implied cost market, which also has an implied cost market, which also has an implied cost to it. to it. to it. Which is more opportunity cost, right? Which is more opportunity cost, right? Which is more opportunity cost, right? >> More more opportunity cost, exactly. And >> More more opportunity cost, exactly. And >> More more opportunity cost, exactly. And then this one's this one's interesting. then this one's this one's interesting. then this one's this one's interesting. And And this is one that I don't think I And And this is one that I don't think I And And this is one that I don't think I appreciated until I owned my own home, appreciated until I owned my own home, appreciated until I owned my own home, which is renovation spending. which is renovation spending. which is renovation spending. We talked on maintenance. When you fix We talked on maintenance. When you fix We talked on maintenance. When you fix something in your house, something in your house, something in your house, you don't just fix it to get it back to you don't just fix it to get it back to you don't just fix it to get it back to the baseline level that it was at the baseline level that it was at the baseline level that it was at before. Yeah. before. Yeah. before. Yeah. >> You make it a little bit nicer. You're >> You make it a little bit nicer. You're >> You make it a little bit nicer. You're right. I never did that when I was right. I never did that when I was right. I never did that when I was renting. So, the side-by-side. So, you renting. So, the side-by-side. So, you renting. So, the side-by-side. So, you run the side-by-side comparison. run the side-by-side comparison. run the side-by-side comparison. You account for all of those You account for all of those You account for all of those unrecoverable costs that the owner has. unrecoverable costs that the owner has. unrecoverable costs that the owner has. You account for the renter investing in You account for the renter investing in You account for the renter investing in the stock market and investing the cost the stock market and investing the cost the stock market and investing the cost difference, the cash flow cost difference, the cash flow cost difference, the cash flow cost difference between renting and owning difference between renting and owning difference between renting and owning each month or or whatever frequency. each month or or whatever frequency. each month or or whatever frequency. And what you'll find, and I've done this And what you'll find, and I've done this And what you'll find, and I've done this with projections, so looking at expected with projections, so looking at expected with projections, so looking at expected stock returns and expected real estate stock returns and expected real estate stock returns and expected real estate appreciation, you can very easily show appreciation, you can very easily show appreciation, you can very easily show that there is an equivalence. that there is an equivalence. that there is an equivalence. There is a level of rent There is a level of rent There is a level of rent where you are indifferent between where you are indifferent between where you are indifferent between renting and owning. I did a video years renting and owning. I did a video years renting and owning. I did a video years ago that has millions of views now, ago that has millions of views now, ago that has millions of views now, where I I came up with this idea called where I I came up with this idea called where I I came up with this idea called the 5% rule. the 5% rule. the 5% rule. So, I took some of those costs. I took So, I took some of those costs. I took So, I took some of those costs. I took property taxes, maintenance costs, and property taxes, maintenance costs, and property taxes, maintenance costs, and the cost of capital, which is the the the cost of capital, which is the the the cost of capital, which is the the opportunity cost and the cost of of opportunity cost and the cost of of opportunity cost and the cost of of borrowing. borrowing. borrowing. I wrapped all that up and said, "We've I wrapped all that up and said, "We've I wrapped all that up and said, "We've got roughly 1% for property taxes, got roughly 1% for property taxes, got roughly 1% for property taxes, roughly 1% for maintenance costs, which roughly 1% for maintenance costs, which roughly 1% for maintenance costs, which is probably way too low as we just is probably way too low as we just is probably way too low as we just talked about." And I said 3% for talked about." And I said 3% for talked about." And I said 3% for opportunity cost, which I think is also opportunity cost, which I think is also opportunity cost, which I think is also on the on the low end. on the on the low end. on the on the low end. And you put all that together and you And you put all that together and you And you put all that together and you get 5%. So, I said, "Okay, if you divide get 5%. So, I said, "Okay, if you divide get 5%. So, I said, "Okay, if you divide the price of a home by 5% and then the price of a home by 5% and then the price of a home by 5% and then divide that number by by 12, you will divide that number by by 12, you will divide that number by by 12, you will get the monthly rent that has equivalent get the monthly rent that has equivalent get the monthly rent that has equivalent that is equivalent to the unrecoverable that is equivalent to the unrecoverable that is equivalent to the unrecoverable cost of owning that home." cost of owning that home." cost of owning that home." Okay, so let's do that. Okay, so let's do that. Okay, so let's do that. So, I'm thinking of buying a $300,000 So, I'm thinking of buying a $300,000 So, I'm thinking of buying a $300,000 house. house. house. What what's the math that I need to do What what's the math that I need to do What what's the math that I need to do to fit figure out if it's better to to fit figure out if it's better to to fit figure out if it's better to rent? Multiply by 5%. And then divide by rent? Multiply by 5%. And then divide by rent? Multiply by 5%. And then divide by by by divide that by 12. by by divide that by 12. by by divide that by 12. Divide it by 12. Okay. You're brave. I Divide it by 12. Okay. You're brave. I Divide it by 12. Okay. You're brave. I usually have a rule to never do math usually have a rule to never do math usually have a rule to never do math live on a podcast. live on a podcast. live on a podcast. >> edit, so just >> edit, so just >> edit, so just >> [laughter] >> [laughter] >> [laughter] >> Okay, the result is 1,250. >> Okay, the result is 1,250. >> Okay, the result is 1,250. There you go. 1,250 is the equivalent There you go. 1,250 is the equivalent There you go. 1,250 is the equivalent rent where you're roughly break even rent where you're roughly break even rent where you're roughly break even between renting and owning. So, if I between renting and owning. So, if I between renting and owning. So, if I could rent for 1,250 instead, could rent for 1,250 instead, could rent for 1,250 instead, >> or less, or less, I should rent. >> or less, or less, I should rent. >> or less, or less, I should rent. Renting is a better financial decision. Renting is a better financial decision. Renting is a better financial decision. So, this is an important part of this So, this is an important part of this So, this is an important part of this topic. We can show financial topic. We can show financial topic. We can show financial equivalence. And then just that is equivalence. And then just that is equivalence. And then just that is important. Like, we can show that there important. Like, we can show that there important. Like, we can show that there is financial equivalence between renting is financial equivalence between renting is financial equivalence between renting and owning. I've done more and owning. I've done more and owning. I've done more uh robust versions of of this analysis uh robust versions of of this analysis uh robust versions of of this analysis since then. We have PWL has a calculator since then. We have PWL has a calculator since then. We have PWL has a calculator on our website where you can see the the on our website where you can see the the on our website where you can see the the break even by putting specific numbers break even by putting specific numbers break even by putting specific numbers in instead of just doing the rough rule in instead of just doing the rough rule in instead of just doing the rough rule of thumb, of thumb, of thumb, cuz things will change it. For example, cuz things will change it. For example, cuz things will change it. For example, if your asset allocation is more if your asset allocation is more if your asset allocation is more conservative or more aggressive, that conservative or more aggressive, that conservative or more aggressive, that opportunity cost number can be opportunity cost number can be opportunity cost number can be different. different. different. If you're a taxable investor, meaning If you're a taxable investor, meaning If you're a taxable investor, meaning that you're taxed on your investment that you're taxed on your investment that you're taxed on your investment gains by investing in the stock market gains by investing in the stock market gains by investing in the stock market or the bond market, your opportunity or the bond market, your opportunity or the bond market, your opportunity cost decreases because the after-tax cost decreases because the after-tax cost decreases because the after-tax expected return on stocks and bonds expected return on stocks and bonds expected return on stocks and bonds decreases relative to uh homeownership. decreases relative to uh homeownership. decreases relative to uh homeownership. 5% is a very rough rule of 5% is a very rough rule of 5% is a very rough rule of rule of thumb. Do you think for the rule of thumb. Do you think for the rule of thumb. Do you think for the average young person, let's say average young person, let's say average young person, let's say someone's under 25 years old, they someone's under 25 years old, they someone's under 25 years old, they should, and they're thinking about should, and they're thinking about should, and they're thinking about building their wealth over the long building their wealth over the long building their wealth over the long term, do you think they should buy be term, do you think they should buy be term, do you think they should buy be buying a house buying a house buying a house as an investment, or should they be as an investment, or should they be as an investment, or should they be doing something else? I think for young doing something else? I think for young doing something else? I think for young people it's really tough, and it's tough people it's really tough, and it's tough people it's really tough, and it's tough for a couple reasons. One is because for a couple reasons. One is because for a couple reasons. One is because home prices are high. You have to save home prices are high. You have to save home prices are high. You have to save up a lot of money to buy a house. up a lot of money to buy a house. up a lot of money to buy a house. Another one is that it can limit your Another one is that it can limit your Another one is that it can limit your mobility. We've seen in in Toronto, in mobility. We've seen in in Toronto, in mobility. We've seen in in Toronto, in Canada, where I'm from, Canada, where I'm from, Canada, where I'm from, uh prices, condo prices in particular, uh prices, condo prices in particular, uh prices, condo prices in particular, have plummeted. They've fallen off of a have plummeted. They've fallen off of a have plummeted. They've fallen off of a cliff. If you bought a condo in Toronto cliff. If you bought a condo in Toronto cliff. If you bought a condo in Toronto and you get a job offer somewhere and you get a job offer somewhere and you get a job offer somewhere outside of Canada, outside of Canada, outside of Canada, what are you going to do with that condo what are you going to do with that condo what are you going to do with that condo that's that's at a big loss? Mhm. that's that's at a big loss? Mhm. that's that's at a big loss? Mhm. >> You're kind of stuck. Yeah. Or you're >> You're kind of stuck. Yeah. Or you're >> You're kind of stuck. Yeah. Or you're have to try to rent it out, and now have to try to rent it out, and now have to try to rent it out, and now you've got this this just difficult you've got this this just difficult you've got this this just difficult situation to deal with. And plus there situation to deal with. And plus there situation to deal with. And plus there are big transaction costs if you're if are big transaction costs if you're if are big transaction costs if you're if you're selling a place. So, for young you're selling a place. So, for young you're selling a place. So, for young people, I do think that homeownership people, I do think that homeownership people, I do think that homeownership can be tricky because it can limit your can be tricky because it can limit your can be tricky because it can limit your mobility, mobility, mobility, your your ability to go and find maybe your your ability to go and find maybe your your ability to go and find maybe higher-paying work. It introduces a risk higher-paying work. It introduces a risk higher-paying work. It introduces a risk that you probably don't need in your that you probably don't need in your that you probably don't need in your life because you may end up moving life because you may end up moving life because you may end up moving somewhere else. somewhere else. somewhere else. And then people often move up where they And then people often move up where they And then people often move up where they want a condo today, but they're going to want a condo today, but they're going to want a condo today, but they're going to want a house later. For my family, I I want a house later. For my family, I I want a house later. For my family, I I met my wife, I was renting a place. The met my wife, I was renting a place. The met my wife, I was renting a place. The first place we met in, the second place, first place we met in, the second place, first place we met in, the second place, the third place, and a fourth place. the third place, and a fourth place. the third place, and a fourth place. We're at the four different places as we We're at the four different places as we We're at the four different places as we were having our family. We have four were having our family. We have four were having our family. We have four kids. And so, our needs were changing kids. And so, our needs were changing kids. And so, our needs were changing over time. We needed a bigger a bigger over time. We needed a bigger a bigger over time. We needed a bigger a bigger condo, and then we had a townhouse, then condo, and then we had a townhouse, then condo, and then we had a townhouse, then we had a house. Uh but we just we had a house. Uh but we just we had a house. Uh but we just the lease ended and we gave notice and the lease ended and we gave notice and the lease ended and we gave notice and we left. We found a better rental that we left. We found a better rental that we left. We found a better rental that was more suitable for our needs. If we was more suitable for our needs. If we was more suitable for our needs. If we had been homeowners, the amount we would had been homeowners, the amount we would had been homeowners, the amount we would have paid in transaction costs to do have paid in transaction costs to do have paid in transaction costs to do that would have been insane. Or we would that would have been insane. Or we would that would have been insane. Or we would have had to buy the house that we were have had to buy the house that we were have had to buy the house that we were going to have forever much earlier, going to have forever much earlier, going to have forever much earlier, which would have introduced significant which would have introduced significant which would have introduced significant opportunity costs. That's one of those opportunity costs. That's one of those opportunity costs. That's one of those things that's just impossible to measure things that's just impossible to measure things that's just impossible to measure in because it's so intangible, but like in because it's so intangible, but like in because it's so intangible, but like the psychology of feeling like you can't the psychology of feeling like you can't the psychology of feeling like you can't easily move. easily move. easily move. And I see this a lot actually with And I see this a lot actually with And I see this a lot actually with people that apply for jobs in our people that apply for jobs in our people that apply for jobs in our company is company is company is in the interview process they'll say, in the interview process they'll say, in the interview process they'll say, "Well, I've just bought a house in "Well, I've just bought a house in "Well, I've just bought a house in insert city." insert city." insert city." And you can see this that sort of And you can see this that sort of And you can see this that sort of psychology is is um holding them back psychology is is um holding them back psychology is is um holding them back from taking an opportunity because from taking an opportunity because from taking an opportunity because they've made a an investment in a they've made a an investment in a they've made a an investment in a particular city. particular city. particular city. And so, they might lose, as you say, And so, they might lose, as you say, And so, they might lose, as you say, like an opportunity in New York or LA or like an opportunity in New York or LA or like an opportunity in New York or LA or London because London because London because mentally they feel committed to a place. mentally they feel committed to a place. mentally they feel committed to a place. Yeah. Now, the flip side of that is that Yeah. Now, the flip side of that is that Yeah. Now, the flip side of that is that if you're really sure that you wanted to if you're really sure that you wanted to if you're really sure that you wanted to stay in one place, stay in one place, stay in one place, one of the best ways to accomplish that one of the best ways to accomplish that one of the best ways to accomplish that is by Who can be sure? is by Who can be sure? is by Who can be sure? >> Yeah, you can't. But if if someone was >> Yeah, you can't. But if if someone was >> Yeah, you can't. But if if someone was really sure, maybe someone has maybe really sure, maybe someone has maybe really sure, maybe someone has maybe like me. I have four kids, they're all like me. I have four kids, they're all like me. I have four kids, they're all in the same school. It's very unlikely in the same school. It's very unlikely in the same school. It's very unlikely that we would move. The other big that we would move. The other big that we would move. The other big mistake I think I made is I bought a mistake I think I made is I bought a mistake I think I made is I bought a holiday home. holiday home. holiday home. That was a terrible Well, That was a terrible Well, That was a terrible Well, I shouldn't say terrible idea, but kind I shouldn't say terrible idea, but kind I shouldn't say terrible idea, but kind of a terrible idea. In part because of of a terrible idea. In part because of of a terrible idea. In part because of the same reason, in part because it the same reason, in part because it the same reason, in part because it means you only go you only go on holiday means you only go you only go on holiday means you only go you only go on holiday to one place. to one place. to one place. >> [laughter] >> [laughter] >> [laughter] >> Which is like defeats the point of a >> Which is like defeats the point of a >> Which is like defeats the point of a holiday. Yeah. And it's I have not done holiday. Yeah. And it's I have not done holiday. Yeah. And it's I have not done that, and the main reason is the mental that, and the main reason is the mental that, and the main reason is the mental overhead. I don't like overhead. I don't like overhead. I don't like having to think about one having to think about one having to think about one property. Mhm. property. Mhm. property. Mhm. >> [clears throat] >> [clears throat] >> [clears throat] >> I can't imagine having to think about a >> I can't imagine having to think about a >> I can't imagine having to think about a second one second one second one that I'm not at. that I'm not at. that I'm not at. >> That's a dumb idea. I don't know why I >> That's a dumb idea. I don't know why I >> That's a dumb idea. I don't know why I did that. did that. did that. I don't know why I did it, especially I don't know why I did it, especially I don't know why I did it, especially when you're like young. It's like when you're like young. It's like when you're like young. It's like the whole point is you can still walk up the whole point is you can still walk up the whole point is you can still walk up mountains and do things. You don't want mountains and do things. You don't want mountains and do things. You don't want to be sitting in a in the same house at to be sitting in a in the same house at to be sitting in a in the same house at >> Yeah. >> Yeah. >> Yeah. Are homeowners happier than renters? Are homeowners happier than renters? Are homeowners happier than renters? Mhm. Mhm. Mhm. Depends how you slice the data. Depends how you slice the data. Depends how you slice the data. If you control for property types and If you control for property types and If you control for property types and neighborhoods and all that kind of neighborhoods and all that kind of neighborhoods and all that kind of stuff, no, stuff, no, stuff, no, they're not. If you don't control for they're not. If you don't control for they're not. If you don't control for those things, I think owned homes do those things, I think owned homes do those things, I think owned homes do tend to be a little bit nicer and and tend to be a little bit nicer and and tend to be a little bit nicer and and better maintained. They do tend to be in better maintained. They do tend to be in better maintained. They do tend to be in better neighborhoods. So, uncontrolled, better neighborhoods. So, uncontrolled, better neighborhoods. So, uncontrolled, renters are a little bit less happy. renters are a little bit less happy. renters are a little bit less happy. There's a There's multiple studies on There's a There's multiple studies on There's a There's multiple studies on this. Statistics Canada has a really this. Statistics Canada has a really this. Statistics Canada has a really good one that does exactly that. They good one that does exactly that. They good one that does exactly that. They have controlled and uncontrolled life have controlled and uncontrolled life have controlled and uncontrolled life satisfaction differences for renters and satisfaction differences for renters and satisfaction differences for renters and owners. If you're a professional who is owners. If you're a professional who is owners. If you're a professional who is thinking about buying a house in a nice thinking about buying a house in a nice thinking about buying a house in a nice neighborhood or renting a nice house in neighborhood or renting a nice house in neighborhood or renting a nice house in a nice neighborhood, a nice neighborhood, a nice neighborhood, it's unlikely that you'll be happier in it's unlikely that you'll be happier in it's unlikely that you'll be happier in either case. either case. either case. If you are forced to be a renter in a If you are forced to be a renter in a If you are forced to be a renter in a not very nice neighborhood because all not very nice neighborhood because all not very nice neighborhood because all you can afford, you may be less happy, you can afford, you may be less happy, you can afford, you may be less happy, but it's not necessarily the renting but it's not necessarily the renting but it's not necessarily the renting that's making you less happy. Is there that's making you less happy. Is there that's making you less happy. Is there any particular group of people that you any particular group of people that you any particular group of people that you think should be buying a house? Yeah, so think should be buying a house? Yeah, so think should be buying a house? Yeah, so people who are very risk-averse, people people who are very risk-averse, people people who are very risk-averse, people who want to stay in one place for a very who want to stay in one place for a very who want to stay in one place for a very long time, because they have a family or long time, because they have a family or long time, because they have a family or something. something. something. >> Yep. Yeah. And you don't want to be >> Yep. Yeah. And you don't want to be >> Yep. Yeah. And you don't want to be priced out of of of the market that you priced out of of of the market that you priced out of of of the market that you live in. This did happen in in some live in. This did happen in in some live in. This did happen in in some cities in Canada in recent history. It's cities in Canada in recent history. It's cities in Canada in recent history. It's now reversed, now reversed, now reversed, but there were people who were getting but there were people who were getting but there were people who were getting priced out of their market. They've been priced out of their market. They've been priced out of their market. They've been renters for a long time, and rents went renters for a long time, and rents went renters for a long time, and rents went up so quickly that they they just up so quickly that they they just up so quickly that they they just couldn't keep pace. And it depends on couldn't keep pace. And it depends on couldn't keep pace. And it depends on your rental market. Some rental markets your rental market. Some rental markets your rental market. Some rental markets are controlled where that's less of an are controlled where that's less of an are controlled where that's less of an issue. So, you do have to think about issue. So, you do have to think about issue. So, you do have to think about things like that. But yeah, if you want things like that. But yeah, if you want things like that. But yeah, if you want to stay in one place, owning your home to stay in one place, owning your home to stay in one place, owning your home is is the way to do that. But it's a is is the way to do that. But it's a is is the way to do that. But it's a double-edged sword because if you double-edged sword because if you double-edged sword because if you realize you want to leave, realize you want to leave, realize you want to leave, you might be you might be you might be you might be stuck. Uh and then the you might be stuck. Uh and then the you might be stuck. Uh and then the other big one for who should own a home other big one for who should own a home other big one for who should own a home is it a taxable investors with with high is it a taxable investors with with high is it a taxable investors with with high tax rates. And again, that comes back to tax rates. And again, that comes back to tax rates. And again, that comes back to the opportunity cost, where if you're the opportunity cost, where if you're the opportunity cost, where if you're paying a lot of tax on your investments, paying a lot of tax on your investments, paying a lot of tax on your investments, whereas real estate tends to be tax whereas real estate tends to be tax whereas real estate tends to be tax preferred. In Canada, gains on your preferred. In Canada, gains on your preferred. In Canada, gains on your primary residence are tax free. primary residence are tax free. primary residence are tax free. US has a I believe an amount. And so, US has a I believe an amount. And so, US has a I believe an amount. And so, that's that's another thing to think that's that's another thing to think that's that's another thing to think about, where the opportunity cost about, where the opportunity cost about, where the opportunity cost changes depending on your specific tax changes depending on your specific tax changes depending on your specific tax situation. When we have these situation. When we have these situation. When we have these conversations about buying a house or conversations about buying a house or conversations about buying a house or not buying a house, one of the things I not buying a house, one of the things I not buying a house, one of the things I see a lot in the comment section is see a lot in the comment section is see a lot in the comment section is people um sharing their case studies of people um sharing their case studies of people um sharing their case studies of them buying a house 30 years ago, and them buying a house 30 years ago, and them buying a house 30 years ago, and now it went from now it went from now it went from being worth $100,000 to $600,000. being worth $100,000 to $600,000. being worth $100,000 to $600,000. And they're they're asserting that And they're they're asserting that And they're they're asserting that that's evidence that it's a good idea. that's evidence that it's a good idea. that's evidence that it's a good idea. You probably see this a lot. You probably see this a lot. You probably see this a lot. >> is this is the thing. This is the >> is this is the thing. This is the >> is this is the thing. This is the example. Uh and then everyone has the example. Uh and then everyone has the example. Uh and then everyone has the family member that bought a house for family member that bought a house for family member that bought a house for $70,000 and sold it for a million. I'm $70,000 and sold it for a million. I'm $70,000 and sold it for a million. I'm just going to read you the top four just going to read you the top four just going to read you the top four comments, and I'd like to get your comments, and I'd like to get your comments, and I'd like to get your response on them. Now, the first one is, response on them. Now, the first one is, response on them. Now, the first one is, "The not buying a house does not work in "The not buying a house does not work in "The not buying a house does not work in the UK as 90% of rents are higher than a the UK as 90% of rents are higher than a the UK as 90% of rents are higher than a mortgage cost. Also, if you want to mortgage cost. Also, if you want to mortgage cost. Also, if you want to start a family, you need a stable place start a family, you need a stable place start a family, you need a stable place to raise your children. to raise your children. to raise your children. And with renting, you can be kicked out And with renting, you can be kicked out And with renting, you can be kicked out within a few months' notice, and your within a few months' notice, and your within a few months' notice, and your whole life could be turned upside down." whole life could be turned upside down." whole life could be turned upside down." I personally think there are ways around I personally think there are ways around I personally think there are ways around that, and I as I mentioned earlier, I that, and I as I mentioned earlier, I that, and I as I mentioned earlier, I did rent for 6 years of my life with a did rent for 6 years of my life with a did rent for 6 years of my life with a wife and an increasing number of kids. wife and an increasing number of kids. wife and an increasing number of kids. The two things that I always made sure The two things that I always made sure The two things that I always made sure to do were to rent from professional to do were to rent from professional to do were to rent from professional landlords. landlords. landlords. We did have one experience renting from We did have one experience renting from We did have one experience renting from a a sort of mom-and-pop person who had a a sort of mom-and-pop person who had a a sort of mom-and-pop person who had bought a condo and rented it out. bought a condo and rented it out. bought a condo and rented it out. And that that wasn't great. But after And that that wasn't great. But after And that that wasn't great. But after that we we were very careful about that we we were very careful about that we we were very careful about vetting our landlords and only renting vetting our landlords and only renting vetting our landlords and only renting from professionals. And then the other from professionals. And then the other from professionals. And then the other thing that we did, which addresses at thing that we did, which addresses at thing that we did, which addresses at least in Canada, addresses one of the least in Canada, addresses one of the least in Canada, addresses one of the other points there, is we would sign other points there, is we would sign other points there, is we would sign long leases. long leases. long leases. If we want to stay in a house for a few If we want to stay in a house for a few If we want to stay in a house for a few years, we would sign a multi-year lease. years, we would sign a multi-year lease. years, we would sign a multi-year lease. And landlords do tend to to like that. And landlords do tend to to like that. And landlords do tend to to like that. The other point that was was in there The other point that was was in there The other point that was was in there that I think is really important is that that I think is really important is that that I think is really important is that rents are higher than mortgage payments. rents are higher than mortgage payments. rents are higher than mortgage payments. I think this is one of the biggest I think this is one of the biggest I think this is one of the biggest mistakes that people make when they're mistakes that people make when they're mistakes that people make when they're making the rent versus own comparison is making the rent versus own comparison is making the rent versus own comparison is they'll say, this is my mortgage they'll say, this is my mortgage they'll say, this is my mortgage payment, this is my rent. If the payment, this is my rent. If the payment, this is my rent. If the mortgage payment is lower, mortgage payment is lower, mortgage payment is lower, owning must be better. owning must be better. owning must be better. But that's not the case. As we talked But that's not the case. As we talked But that's not the case. As we talked about a minute ago, you have property about a minute ago, you have property about a minute ago, you have property taxes, maintenance costs, potential taxes, maintenance costs, potential taxes, maintenance costs, potential renovation spending that you wouldn't do renovation spending that you wouldn't do renovation spending that you wouldn't do otherwise, and the opportunity cost of otherwise, and the opportunity cost of otherwise, and the opportunity cost of of capital. When you add all that up, of capital. When you add all that up, of capital. When you add all that up, the cost of owning a home is far more the cost of owning a home is far more the cost of owning a home is far more than the mortgage payment. than the mortgage payment. than the mortgage payment. This guy here said, I bought a house, This guy here said, I bought a house, This guy here said, I bought a house, it's the best thing I ever did. It's it's the best thing I ever did. It's it's the best thing I ever did. It's launched my mindset in new directions. launched my mindset in new directions. launched my mindset in new directions. Remember that having your own space has Remember that having your own space has Remember that having your own space has profound psychological impact and can be profound psychological impact and can be profound psychological impact and can be life-changing for some of us life-changing for some of us life-changing for some of us that want to live in a healthy that want to live in a healthy that want to live in a healthy environment. environment. environment. What do you make of that point? If it What do you make of that point? If it What do you make of that point? If it have profound psychological impact. have profound psychological impact. have profound psychological impact. >> If someone believes that it does, and >> If someone believes that it does, and >> If someone believes that it does, and they've really taken the time to reflect they've really taken the time to reflect they've really taken the time to reflect on their life and has decided that yes, on their life and has decided that yes, on their life and has decided that yes, it it is in fact true that it has a had it it is in fact true that it has a had it it is in fact true that it has a had a profound psychological impact, of a profound psychological impact, of a profound psychological impact, of course that person should own a home. course that person should own a home. course that person should own a home. Of course they should. Is it Of course they should. Is it Of course they should. Is it Is it true for everybody? Is it true for everybody? Is it true for everybody? I don't think so. Don said, my I don't think so. Don said, my I don't think so. Don said, my experience, I purchased a house in 2013 experience, I purchased a house in 2013 experience, I purchased a house in 2013 with 20% down payment deposit. My total with 20% down payment deposit. My total with 20% down payment deposit. My total payment including taxes, insurance, HOA payment including taxes, insurance, HOA payment including taxes, insurance, HOA home owners insurance? home owners insurance? home owners insurance? >> Yeah, yeah. insurance. Um is $1,800 >> Yeah, yeah. insurance. Um is $1,800 >> Yeah, yeah. insurance. Um is $1,800 a month. As of today, the exact same a month. As of today, the exact same a month. As of today, the exact same house is renting for $4,000. The house is renting for $4,000. The house is renting for $4,000. The property value has also gone up 3x. I'm property value has also gone up 3x. I'm property value has also gone up 3x. I'm glad I bought my house. glad I bought my house. glad I bought my house. Yes. So there are cases where Yes. So there are cases where Yes. So there are cases where it a real estate allows you to use it a real estate allows you to use it a real estate allows you to use leverage very easily as as Don leverage very easily as as Don leverage very easily as as Don mentioned. mentioned. mentioned. And if you end up buying in a market And if you end up buying in a market And if you end up buying in a market that goes up a lot in a short period of that goes up a lot in a short period of that goes up a lot in a short period of time, it can be really really good. time, it can be really really good. time, it can be really really good. However, and this is what we've seen in However, and this is what we've seen in However, and this is what we've seen in Canada more recently, it hasn't touched Canada more recently, it hasn't touched Canada more recently, it hasn't touched other markets yet, although of course other markets yet, although of course other markets yet, although of course the US has had their own declines and so the US has had their own declines and so the US has had their own declines and so have other countries, but Canada is have other countries, but Canada is have other countries, but Canada is right now in one of the biggest real right now in one of the biggest real right now in one of the biggest real estate price drawdowns, when you adjust estate price drawdowns, when you adjust estate price drawdowns, when you adjust for inflation, going back to 1975. for inflation, going back to 1975. for inflation, going back to 1975. And so if you had bought, yes, 7 years And so if you had bought, yes, 7 years And so if you had bought, yes, 7 years ago, ago, ago, and then, well, and then looked at the and then, well, and then looked at the and then, well, and then looked at the price in 2022, you'd think, wow, I'm a price in 2022, you'd think, wow, I'm a price in 2022, you'd think, wow, I'm a genius. Of course everybody should buy. genius. Of course everybody should buy. genius. Of course everybody should buy. But if you had bought in, I think it's But if you had bought in, I think it's But if you had bought in, I think it's 2021 was the was the kind of peak, and 2021 was the was the kind of peak, and 2021 was the was the kind of peak, and you look at it today, you're thinking you look at it today, you're thinking you look at it today, you're thinking like, wow, I've ruined my life. like, wow, I've ruined my life. like, wow, I've ruined my life. >> [laughter] >> [laughter] >> [laughter] >> So yes, there are examples like that, >> So yes, there are examples like that, >> So yes, there are examples like that, for sure. But that that is not what for sure. But that that is not what for sure. But that that is not what people should expect every time that people should expect every time that people should expect every time that they purchase a home. they purchase a home. they purchase a home. So are you saying that the future is not So are you saying that the future is not So are you saying that the future is not going to be as going to be as going to be as like as the past? Uh for this I know the like as the past? Uh for this I know the like as the past? Uh for this I know the Canadian market best, but I think these Canadian market best, but I think these Canadian market best, but I think these it generalizes outside of Canada. Where it generalizes outside of Canada. Where it generalizes outside of Canada. Where we've seen record decreasing interest we've seen record decreasing interest we've seen record decreasing interest rates. So that's that's changed a little rates. So that's that's changed a little rates. So that's that's changed a little bit now, but for a period of time we had bit now, but for a period of time we had bit now, but for a period of time we had interest rates going down down down. In interest rates going down down down. In interest rates going down down down. In Canada we had a ton of immigration. I Canada we had a ton of immigration. I Canada we had a ton of immigration. I have no problem with have no problem with have no problem with immigrants, uh but we had levels of immigrants, uh but we had levels of immigrants, uh but we had levels of immigration that were just not immigration that were just not immigration that were just not compatible with the amount of housing compatible with the amount of housing compatible with the amount of housing that we had in in Canada, which was that we had in in Canada, which was that we had in in Canada, which was contributing to prices going contributing to prices going contributing to prices going up. We we have have housing supply just up. We we have have housing supply just up. We we have have housing supply just not growing uh quickly enough, which are not growing uh quickly enough, which are not growing uh quickly enough, which are all things that Canada is addressing all things that Canada is addressing all things that Canada is addressing now, but all that causes price cause now, but all that causes price cause now, but all that causes price cause prices to go crazy, which is I think why prices to go crazy, which is I think why prices to go crazy, which is I think why they've come down in such an extreme they've come down in such an extreme they've come down in such an extreme way. So I'm not I'm not saying way. So I'm not I'm not saying way. So I'm not I'm not saying necessarily that we're never going to necessarily that we're never going to necessarily that we're never going to see high house prices again or house see high house prices again or house see high house prices again or house prices going up at an extreme rate prices going up at an extreme rate prices going up at an extreme rate again, but in Canada at least, that has again, but in Canada at least, that has again, but in Canada at least, that has now normalized or at least started to now normalized or at least started to now normalized or at least started to normalize. I don't think it's reasonable normalize. I don't think it's reasonable normalize. I don't think it's reasonable to expect stock-like returns from real to expect stock-like returns from real to expect stock-like returns from real estate forever, even though we did see estate forever, even though we did see estate forever, even though we did see that for for some years. that for for some years. that for for some years. So for most people then you think, if So for most people then you think, if So for most people then you think, if their goal is to make money and they their goal is to make money and they their goal is to make money and they care about mobility, being able to get care about mobility, being able to get care about mobility, being able to get up and go if opportunity arises, up and go if opportunity arises, up and go if opportunity arises, a better investment decision would a better investment decision would a better investment decision would probably be just investing in an index probably be just investing in an index probably be just investing in an index fund fund fund which gives you exposure to the stock which gives you exposure to the stock which gives you exposure to the stock market. Yeah, though I think the market. Yeah, though I think the market. Yeah, though I think the mobility piece is key there, because mobility piece is key there, because mobility piece is key there, because remember, just from a wealth remember, just from a wealth remember, just from a wealth perspective, we can show that hey, these perspective, we can show that hey, these perspective, we can show that hey, these are pretty close to equivalent. Mhm. are pretty close to equivalent. Mhm. are pretty close to equivalent. Mhm. >> [clears throat] >> [clears throat] >> [clears throat] >> But if mobility matters to you, yeah, I >> But if mobility matters to you, yeah, I >> But if mobility matters to you, yeah, I think that that matters a lot. If you think that that matters a lot. If you think that that matters a lot. If you have unique investment opportunities, have unique investment opportunities, have unique investment opportunities, that that can be another reason where that that can be another reason where that that can be another reason where your opportunity cost is really high. your opportunity cost is really high. your opportunity cost is really high. Like I had an opportunity to buy equity Like I had an opportunity to buy equity Like I had an opportunity to buy equity in my company years ago, in my company years ago, in my company years ago, and and and if I had been a homeowner at the I think if I had been a homeowner at the I think if I had been a homeowner at the I think I actually had just bought a house, and I actually had just bought a house, and I actually had just bought a house, and I think I even had to reduce the amount I think I even had to reduce the amount I think I even had to reduce the amount of equity I bought because our I think of equity I bought because our I think of equity I bought because our I think our well pump broke like around the same our well pump broke like around the same our well pump broke like around the same anyway, it was a whole thing. anyway, it was a whole thing. anyway, it was a whole thing. >> isn't it? >> isn't it? >> isn't it? >> But that's like there's opportunity cost >> But that's like there's opportunity cost >> But that's like there's opportunity cost in the stock market, which is, you know, in the stock market, which is, you know, in the stock market, which is, you know, call it 7% or whatever, but there's call it 7% or whatever, but there's call it 7% or whatever, but there's other opportunity costs that can be a other opportunity costs that can be a other opportunity costs that can be a lot higher like in that specific lot higher like in that specific lot higher like in that specific situation. situation. situation. And the next one there is number seven. And the next one there is number seven. And the next one there is number seven. Yeah. Yeah. Yeah. Missing tax planning opportunities. Missing tax planning opportunities. Missing tax planning opportunities. This is something I think I think people This is something I think I think people This is something I think I think people just don't think enough about, just don't think enough about, just don't think enough about, but it's not terribly complex, but there but it's not terribly complex, but there but it's not terribly complex, but there are some simple things that people can are some simple things that people can are some simple things that people can do to minimize the amount of tax they're do to minimize the amount of tax they're do to minimize the amount of tax they're playing paying. For most people, it's playing paying. For most people, it's playing paying. For most people, it's just optimally using things like in just optimally using things like in just optimally using things like in Canada we have the RRSP and the TFSA, in Canada we have the RRSP and the TFSA, in Canada we have the RRSP and the TFSA, in the US it's the the Roth and traditional the US it's the the Roth and traditional the US it's the the Roth and traditional IRA and and 401Ks. Uh using those things IRA and and 401Ks. Uh using those things IRA and and 401Ks. Uh using those things optimally make a lot of sense. So then optimally make a lot of sense. So then optimally make a lot of sense. So then the rest other types of tax planning the rest other types of tax planning the rest other types of tax planning tend to get more country-specific. There tend to get more country-specific. There tend to get more country-specific. There tend to be lots of things for tend to be lots of things for tend to be lots of things for particularly for higher income people particularly for higher income people particularly for higher income people that you can do to pay a little bit less that you can do to pay a little bit less that you can do to pay a little bit less tax. And I think What about for lower tax. And I think What about for lower tax. And I think What about for lower income people? income people? income people? For lower income people, the government For lower income people, the government For lower income people, the government accounts that are provided uh are accounts that are provided uh are accounts that are provided uh are >> ISA in the UK? >> ISA in the UK? >> ISA in the UK? >> Yeah, exactly. Those are probably the >> Yeah, exactly. Those are probably the >> Yeah, exactly. Those are probably the best thing for people to be focusing on. best thing for people to be focusing on. best thing for people to be focusing on. But even then, I don't like people are But even then, I don't like people are But even then, I don't like people are often not using them optimally. One of often not using them optimally. One of often not using them optimally. One of the things people don't talk about the things people don't talk about the things people don't talk about enough is all the ways that rich people enough is all the ways that rich people enough is all the ways that rich people do things to avoid paying tax. do things to avoid paying tax. do things to avoid paying tax. They have like they hire people so that They have like they hire people so that They have like they hire people so that they don't have to pay tax. I hear about they don't have to pay tax. I hear about they don't have to pay tax. I hear about all these crazy stories of like I've all these crazy stories of like I've all these crazy stories of like I've started this business on the side here started this business on the side here started this business on the side here so I can get real estate license. And if so I can get real estate license. And if so I can get real estate license. And if I get a real estate license, I don't I get a real estate license, I don't I get a real estate license, I don't have to pay the same tax on this thing have to pay the same tax on this thing have to pay the same tax on this thing here. And I move the money around here here. And I move the money around here here. And I move the money around here and I flip it around there and then I and I flip it around there and then I and I flip it around there and then I don't have to pay any tax. Most people don't have to pay any tax. Most people don't have to pay any tax. Most people like the average people don't have any like the average people don't have any like the average people don't have any loopholes that they can they jump loopholes that they can they jump loopholes that they can they jump through. Yeah, it's true. through. Yeah, it's true. through. Yeah, it's true. And even one of the crazy ones I learned And even one of the crazy ones I learned And even one of the crazy ones I learned about when I got some money was that you about when I got some money was that you about when I got some money was that you can take a loan against your stocks can take a loan against your stocks can take a loan against your stocks and there's no tax on the loan. and there's no tax on the loan. and there's no tax on the loan. So if I have a million dollars of So if I have a million dollars of So if I have a million dollars of Facebook stock, I can go to a bank and Facebook stock, I can go to a bank and Facebook stock, I can go to a bank and get 500k in cash get 500k in cash get 500k in cash loaned against that stock without having loaned against that stock without having loaned against that stock without having to sell it. And then on that 500k, I to sell it. And then on that 500k, I to sell it. And then on that 500k, I have no tax to pay. have no tax to pay. have no tax to pay. And I can just hold that Facebook stock. And I can just hold that Facebook stock. And I can just hold that Facebook stock. When it goes up to 2 million, I can go When it goes up to 2 million, I can go When it goes up to 2 million, I can go back to the bank and say, give me back to the bank and say, give me back to the bank and say, give me another 500k. You could. But if it goes another 500k. You could. But if it goes another 500k. You could. But if it goes down, you get margin called and you have down, you get margin called and you have down, you get margin called and you have to come up with the cash to to come up with the cash to to come up with the cash to Don't they just sell? Don't they just Don't they just sell? Don't they just Don't they just sell? Don't they just sell the stock? They might, but then sell the stock? They might, but then sell the stock? They might, but then you're selling after it's you're selling after it's you're selling after it's come down. So it's not risk-free. But come down. So it's not risk-free. But come down. So it's not risk-free. But yeah, that is a thing that people do. yeah, that is a thing that people do. yeah, that is a thing that people do. I guess everybody could do that, right? I guess everybody could do that, right? I guess everybody could do that, right? I mean most people could, if they I mean most people could, if they I mean most people could, if they invested in the the S&P 500, they could invested in the the S&P 500, they could invested in the the S&P 500, they could go and get a loan against that go and get a loan against that go and get a loan against that investment. And that loan would be investment. And that loan would be investment. And that loan would be tax-free. Yep, same same rules for tax-free. Yep, same same rules for tax-free. Yep, same same rules for everybody. But I would still say that everybody. But I would still say that everybody. But I would still say that you're you're taking a lot of risk by you're you're taking a lot of risk by you're you're taking a lot of risk by borrowing money against risky assets borrowing money against risky assets borrowing money against risky assets like that. Mhm. like that. Mhm. like that. Mhm. Okay, so tax planning, there's nothing Okay, so tax planning, there's nothing Okay, so tax planning, there's nothing else to cover there in terms of the else to cover there in terms of the else to cover there in terms of the average person. Yeah, I don't think so. average person. Yeah, I don't think so. average person. Yeah, I don't think so. But it is an important thing for people But it is an important thing for people But it is an important thing for people to think about if thinking about what to think about if thinking about what to think about if thinking about what mistakes might I be making in my mistakes might I be making in my mistakes might I be making in my financial plan, financial plan, financial plan, they should definitely be thinking about they should definitely be thinking about they should definitely be thinking about are there tax planning opportunities are there tax planning opportunities are there tax planning opportunities that that I'm I'm missing. How would that that I'm I'm missing. How would that that I'm I'm missing. How would they find out? they find out? they find out? It's a tough one. A a good CPA. What's a It's a tough one. A a good CPA. What's a It's a tough one. A a good CPA. What's a CPA? Uh CPA? Uh CPA? Uh uh an accountant. A good tax uh an accountant. A good tax uh an accountant. A good tax professional should be able to identify professional should be able to identify professional should be able to identify tax plan planning opportunities for you. tax plan planning opportunities for you. tax plan planning opportunities for you. Good financial planners similarly should Good financial planners similarly should Good financial planners similarly should be able to identify good tax planning be able to identify good tax planning be able to identify good tax planning opportunities for your situation. But as opportunities for your situation. But as opportunities for your situation. But as you said earlier, the reality is there you said earlier, the reality is there you said earlier, the reality is there aren't that many things that people can aren't that many things that people can aren't that many things that people can be doing. And it's really things that be doing. And it's really things that be doing. And it's really things that you can figure out how to optimize once, you can figure out how to optimize once, you can figure out how to optimize once, and then you're kind of set. and then you're kind of set. and then you're kind of set. Much of the reason most people haven't Much of the reason most people haven't Much of the reason most people haven't posted content or built a personal brand posted content or built a personal brand posted content or built a personal brand is because it's hard and it's is because it's hard and it's is because it's hard and it's time-consuming. And we're all very very time-consuming. And we're all very very time-consuming. And we're all very very busy. And if you've never posted busy. And if you've never posted busy. And if you've never posted something before, something before, something before, there's so many factors in your there's so many factors in your there's so many factors in your psychology that stop you wanting to psychology that stop you wanting to psychology that stop you wanting to post. What people will think of you. Am post. What people will think of you. Am post. What people will think of you. Am I doing this right? Is the thing I'm I doing this right? Is the thing I'm I doing this right? Is the thing I'm saying absolutely stupid? All of these saying absolutely stupid? All of these saying absolutely stupid? All of these result in paralysis, which means you result in paralysis, which means you result in paralysis, which means you don't post and your feed goes bad. don't post and your feed goes bad. don't post and your feed goes bad. I'm an investor in a company called Stan I'm an investor in a company called Stan I'm an investor in a company called Stan Store, which you've probably heard me Store, which you've probably heard me Store, which you've probably heard me talk about. And what they've been talk about. And what they've been talk about. And what they've been building is this new tool called Stanley building is this new tool called Stanley building is this new tool called Stanley that uses AI, looks at your feed, looks that uses AI, looks at your feed, looks that uses AI, looks at your feed, looks at your tone of voice, looks at your at your tone of voice, looks at your at your tone of voice, looks at your history, looks at your best performing history, looks at your best performing history, looks at your best performing posts and tells you what you should posts and tells you what you should posts and tells you what you should post, makes those posts for you. You can post, makes those posts for you. You can post, makes those posts for you. You can also you just use it for inspiration. also you just use it for inspiration. also you just use it for inspiration. And sometimes what we need when we're And sometimes what we need when we're And sometimes what we need when we're thinking about doing a post for our thinking about doing a post for our thinking about doing a post for our social media channels is inspiration. social media channels is inspiration. social media channels is inspiration. Building an audience has fundamentally Building an audience has fundamentally Building an audience has fundamentally changed my life. And I think it could changed my life. And I think it could changed my life. And I think it could change yours, too. So, I'm inviting you change yours, too. So, I'm inviting you change yours, too. So, I'm inviting you to give this new tool a shot and let me to give this new tool a shot and let me to give this new tool a shot and let me know what you think. All you have to do know what you think. All you have to do know what you think. All you have to do is search coach.stan.store is search coach.stan.store is search coach.stan.store now to get started. I run multiple now to get started. I run multiple now to get started. I run multiple companies that have multiple sales companies that have multiple sales companies that have multiple sales teams. And one of the things as a teams. And one of the things as a teams. And one of the things as a founder of a company that's often founder of a company that's often founder of a company that's often confusing is you find it hard to figure confusing is you find it hard to figure confusing is you find it hard to figure out where sales are. So about 10 years out where sales are. So about 10 years out where sales are. So about 10 years ago, I started using Pipedrive in my ago, I started using Pipedrive in my ago, I started using Pipedrive in my former company. And it's also the reason former company. And it's also the reason former company. And it's also the reason why I switched over all of my commercial why I switched over all of my commercial why I switched over all of my commercial teams in my current media company called teams in my current media company called teams in my current media company called steven.com to use Pipedrive as well. Not steven.com to use Pipedrive as well. Not steven.com to use Pipedrive as well. Not only do they sponsor this show, but only do they sponsor this show, but only do they sponsor this show, but they've been an incredibly effective way they've been an incredibly effective way they've been an incredibly effective way of scaling our sales engine over the of scaling our sales engine over the of scaling our sales engine over the years. Pipedrive is an easy-to-use years. Pipedrive is an easy-to-use years. Pipedrive is an easy-to-use intelligent CRM. And at its very core, intelligent CRM. And at its very core, intelligent CRM. And at its very core, it makes your sales process visible it makes your sales process visible it makes your sales process visible through one dashboard, a visual pipeline through one dashboard, a visual pipeline through one dashboard, a visual pipeline showing every deal, what stage it's in, showing every deal, what stage it's in, showing every deal, what stage it's in, what needs to happen next, and it's all what needs to happen next, and it's all what needs to happen next, and it's all in real time with no delay. It doesn't in real time with no delay. It doesn't in real time with no delay. It doesn't magically close the deal for you, of magically close the deal for you, of magically close the deal for you, of course, but it does replace complexity course, but it does replace complexity course, but it does replace complexity with clarity. If you want to join over with clarity. If you want to join over with clarity. If you want to join over 100,000 companies already using 100,000 companies already using 100,000 companies already using Pipedrive, you can use my link for a Pipedrive, you can use my link for a Pipedrive, you can use my link for a 30-day free trial with no credit card 30-day free trial with no credit card 30-day free trial with no credit card payment needed. Head to payment needed. Head to payment needed. Head to pipedrive.com/ceo pipedrive.com/ceo pipedrive.com/ceo to get started. That's to get started. That's to get started. That's pipedrive.com/ceo. I'll see you over there. I'll see you over there. Who does need a financial advisor? Who does need a financial advisor? Who does need a financial advisor? Probably a lot of people. But the Probably a lot of people. But the Probably a lot of people. But the financial advice profession has a lot of financial advice profession has a lot of financial advice profession has a lot of challenges. challenges. challenges. We're chatting about the the sales We're chatting about the the sales We're chatting about the the sales nature of the financial services nature of the financial services nature of the financial services industry. industry. industry. And I do think that's a big problem. And I do think that's a big problem. And I do think that's a big problem. Because if someone's has Here's Ben say, Because if someone's has Here's Ben say, Because if someone's has Here's Ben say, "Okay." "Okay." "Okay." Ben said I should have a financial Ben said I should have a financial Ben said I should have a financial advisor. advisor. advisor. And they go to a bank or they go even to And they go to a bank or they go even to And they go to a bank or they go even to some random firm, some random firm, some random firm, there's a good chance that they're going there's a good chance that they're going there's a good chance that they're going to be sold products they don't need. to be sold products they don't need. to be sold products they don't need. And I don't have a solution for that. And I don't have a solution for that. And I don't have a solution for that. Like that's a It's It's a difficult Like that's a It's It's a difficult Like that's a It's It's a difficult situation when that is the state of the situation when that is the state of the situation when that is the state of the financial advice industry. I guess to financial advice industry. I guess to financial advice industry. I guess to get around that one might ask their get around that one might ask their get around that one might ask their friends and family who does their friends and family who does their friends and family who does their financial planning and then go with a financial planning and then go with a financial planning and then go with a trusted referral. trusted referral. trusted referral. Yeah. But people often trust people that Yeah. But people often trust people that Yeah. But people often trust people that aren't giving them great advice. Like aren't giving them great advice. Like aren't giving them great advice. Like it's just really It's really it's just really It's really it's just really It's really problematic. problematic. problematic. I I think a lot of people can benefit I I think a lot of people can benefit I I think a lot of people can benefit from financial advice. It's just finding from financial advice. It's just finding from financial advice. It's just finding the right person. And a lot of people the right person. And a lot of people the right person. And a lot of people don't need financial advice because you don't need financial advice because you don't need financial advice because you do pay fees for it. What's the next one? do pay fees for it. What's the next one? do pay fees for it. What's the next one? Number eight. Yeah. Eight is It's Number eight. Yeah. Eight is It's Number eight. Yeah. Eight is It's kind of a similar discussion to what we kind of a similar discussion to what we kind of a similar discussion to what we just talked about, but it's it's missing just talked about, but it's it's missing just talked about, but it's it's missing out on estate planning. What does that out on estate planning. What does that out on estate planning. What does that mean? mean? mean? Figuring out how your assets are going Figuring out how your assets are going Figuring out how your assets are going to be distributed to the people that you to be distributed to the people that you to be distributed to the people that you want them to or the entities that you want them to or the entities that you want them to or the entities that you want them to want them to want them to when you die. when you die. when you die. This is an interesting one cuz nobody's This is an interesting one cuz nobody's This is an interesting one cuz nobody's Well, most people aren't expecting to Well, most people aren't expecting to Well, most people aren't expecting to die die die anytime soon. Yeah. So, they haven't anytime soon. Yeah. So, they haven't anytime soon. Yeah. So, they haven't really thought much about this. really thought much about this. really thought much about this. Yeah. And you know, some might also say, Yeah. And you know, some might also say, Yeah. And you know, some might also say, "Listen, I'm I'm not going to be here, "Listen, I'm I'm not going to be here, "Listen, I'm I'm not going to be here, so so so why should I care?" why should I care?" why should I care?" Especially people that I guess That's Especially people that I guess That's Especially people that I guess That's the my mindset of someone that doesn't the my mindset of someone that doesn't the my mindset of someone that doesn't have kids, but Yeah. It can cause a lot have kids, but Yeah. It can cause a lot have kids, but Yeah. It can cause a lot of problems. If you don't think through of problems. If you don't think through of problems. If you don't think through and plan for the way you want your and plan for the way you want your and plan for the way you want your estate to be distributed, you can pay a estate to be distributed, you can pay a estate to be distributed, you can pay a lot more tax than you otherwise would lot more tax than you otherwise would lot more tax than you otherwise would have. And your estate can go to people have. And your estate can go to people have. And your estate can go to people that you may not have wanted it to go that you may not have wanted it to go that you may not have wanted it to go to. You can pay more tax. to. You can pay more tax. to. You can pay more tax. If you don't have things set up If you don't have things set up If you don't have things set up properly. And again, this is going to be properly. And again, this is going to be properly. And again, this is going to be country specific. But yeah, there country specific. But yeah, there country specific. But yeah, there there's cases where you would pay more there's cases where you would pay more there's cases where you would pay more tax if things were not set up properly tax if things were not set up properly tax if things were not set up properly than if they were. Do you think than if they were. Do you think than if they were. Do you think everybody should write a will? everybody should write a will? everybody should write a will? Everybody that has any dependents should Everybody that has any dependents should Everybody that has any dependents should write a will. I've heard a an estate write a will. I've heard a an estate write a will. I've heard a an estate planning lawyer joke that everybody has planning lawyer joke that everybody has planning lawyer joke that everybody has a will. a will. a will. But it's the government's default will, But it's the government's default will, But it's the government's default will, which you may not actually agree with. which you may not actually agree with. which you may not actually agree with. It's like prenups. Yeah, kind of like It's like prenups. Yeah, kind of like It's like prenups. Yeah, kind of like that. Yeah. It's exactly like that. You that. Yeah. It's exactly like that. You that. Yeah. It's exactly like that. You could say everybody should have a will could say everybody should have a will could say everybody should have a will because it can help from having a big because it can help from having a big because it can help from having a big mess for other people to clean up. But mess for other people to clean up. But mess for other people to clean up. But for sure, if you have kids, if you have for sure, if you have kids, if you have for sure, if you have kids, if you have dependents, I think having a will is dependents, I think having a will is dependents, I think having a will is really important. And on that point of really important. And on that point of really important. And on that point of prenups, number nine is about who you prenups, number nine is about who you prenups, number nine is about who you marry. marry. marry. Yeah, this is this is a tough one. Yeah, this is this is a tough one. Yeah, this is this is a tough one. It's a tough one because It's a tough one because It's a tough one because I mean, this is front of mind for me I mean, this is front of mind for me I mean, this is front of mind for me because as you can see from these because as you can see from these because as you can see from these photos, I just I just uh proposed to my photos, I just I just uh proposed to my photos, I just I just uh proposed to my fiance. fiance. fiance. >> Yeah. And um I mean, this is not the >> Yeah. And um I mean, this is not the >> Yeah. And um I mean, this is not the ring, but cuz this is a bit extra. But ring, but cuz this is a bit extra. But ring, but cuz this is a bit extra. But um That's awesome. Oh my god, they put um That's awesome. Oh my god, they put um That's awesome. Oh my god, they put my face in the They didn't put my face my face in the They didn't put my face my face in the They didn't put my face in the box. That's creepy. But yeah, so in the box. That's creepy. But yeah, so in the box. That's creepy. But yeah, so why is this so important who you decide why is this so important who you decide why is this so important who you decide to marry as it relates to how rich to marry as it relates to how rich to marry as it relates to how rich you'll be or or won't be? Well, it's not you'll be or or won't be? Well, it's not you'll be or or won't be? Well, it's not just how rich you'll be, it's how just how rich you'll be, it's how just how rich you'll be, it's how satisfied you'll be satisfied you'll be satisfied you'll be with your life and with your marriage. with your life and with your marriage. with your life and with your marriage. Academic research has identified two Academic research has identified two Academic research has identified two spending profiles that you can spending profiles that you can spending profiles that you can categorize people into. One is categorize people into. One is categorize people into. One is tightwads. tightwads. tightwads. That's people who don't like to spend That's people who don't like to spend That's people who don't like to spend money. money. money. And one is spendthrifts. That's people And one is spendthrifts. That's people And one is spendthrifts. That's people who do like to spend money. The names who do like to spend money. The names who do like to spend money. The names are kind of funny, but that's just are kind of funny, but that's just are kind of funny, but that's just That's what the research calls them. That's what the research calls them. That's what the research calls them. And the crazy thing about this is that And the crazy thing about this is that And the crazy thing about this is that tightwads and spendthrifts are more tightwads and spendthrifts are more tightwads and spendthrifts are more likely to end up marrying each other likely to end up marrying each other likely to end up marrying each other than to marrying someone who has the than to marrying someone who has the than to marrying someone who has the same profile as them. same profile as them. same profile as them. So, two A tightwad and a spendthrift are So, two A tightwad and a spendthrift are So, two A tightwad and a spendthrift are more likely to get married than a more likely to get married than a more likely to get married than a tightwad and a tightwad or a spendthrift tightwad and a tightwad or a spendthrift tightwad and a tightwad or a spendthrift and a spendthrift. Why do you think that and a spendthrift. Why do you think that and a spendthrift. Why do you think that is? The the research on this talks just is? The the research on this talks just is? The the research on this talks just about kind of opposites attracting and about kind of opposites attracting and about kind of opposites attracting and there may be some sort of thrill to the there may be some sort of thrill to the there may be some sort of thrill to the to the differences to the differences to the differences um initially. um initially. um initially. But But But tightwads and spendthrifts as they go tightwads and spendthrifts as they go tightwads and spendthrifts as they go through their marriages do tend to be through their marriages do tend to be through their marriages do tend to be less satisfied less satisfied less satisfied in their marriages and have more marital in their marriages and have more marital in their marriages and have more marital conflict around money. conflict around money. conflict around money. And again, that's based on an academic And again, that's based on an academic And again, that's based on an academic paper. Now, that's the reasons why the paper. Now, that's the reasons why the paper. Now, that's the reasons why the marriage might not last, but in terms of marriage might not last, but in terms of marriage might not last, but in terms of how it might impact your financial how it might impact your financial how it might impact your financial success success success If you really want to save, if you have If you really want to save, if you have If you really want to save, if you have If you go through your goal-setting If you go through your goal-setting If you go through your goal-setting exercise and your PERMA model exercise and your PERMA model exercise and your PERMA model and you have have a vision for the life and you have have a vision for the life and you have have a vision for the life that you want to live that requires that you want to live that requires that you want to live that requires saving, and you have a spouse that wants saving, and you have a spouse that wants saving, and you have a spouse that wants to spend a lot of money today to spend a lot of money today to spend a lot of money today that can be very, very difficult. It can that can be very, very difficult. It can that can be very, very difficult. It can make it a lot harder for you to achieve make it a lot harder for you to achieve make it a lot harder for you to achieve your goals. your goals. your goals. I don't think it's insurmountable. I I don't think it's insurmountable. I I don't think it's insurmountable. I think a tightwad and a spendthrift can think a tightwad and a spendthrift can think a tightwad and a spendthrift can work. I mean, it's not like all of them work. I mean, it's not like all of them work. I mean, it's not like all of them end up getting divorced. But it does end up getting divorced. But it does end up getting divorced. But it does require a different level of require a different level of require a different level of coordination and communication and being coordination and communication and being coordination and communication and being on the same page. Do you have to speak on the same page. Do you have to speak on the same page. Do you have to speak to clients about this often? to clients about this often? to clients about this often? I It It comes up a lot. We have lots of I It It comes up a lot. We have lots of I It It comes up a lot. We have lots of clients who were single and end up clients who were single and end up clients who were single and end up getting in relationships and then getting in relationships and then getting in relationships and then getting married. And we have to all have getting married. And we have to all have getting married. And we have to all have all kinds of conversations about all kinds of conversations about all kinds of conversations about marriage contracts or prenups, um estate marriage contracts or prenups, um estate marriage contracts or prenups, um estate planning. Do you think everybody should planning. Do you think everybody should planning. Do you think everybody should get a prenup? Going back to what you get a prenup? Going back to what you get a prenup? Going back to what you said earlier, where you said you you If said earlier, where you said you you If said earlier, where you said you you If you don't write your own, the government you don't write your own, the government you don't write your own, the government will give you theirs. Yeah. Which just will give you theirs. Yeah. Which just will give you theirs. Yeah. Which just to simplify that to simplify that to simplify that if you don't write your own prenup if you don't write your own prenup if you don't write your own prenup then you are the default position is the then you are the default position is the then you are the default position is the government will decide through the law government will decide through the law government will decide through the law how your assets are divided at a time how your assets are divided at a time how your assets are divided at a time when you get when you break up. Problem when you get when you break up. Problem when you get when you break up. Problem is, people find prenups to be really is, people find prenups to be really is, people find prenups to be really unromantic. That's right. And they also unromantic. That's right. And they also unromantic. That's right. And they also think there's an implication that think there's an implication that think there's an implication that we're assuming we're going to break up, we're assuming we're going to break up, we're assuming we're going to break up, which is also not so sexy. Right. Do you which is also not so sexy. Right. Do you which is also not so sexy. Right. Do you think people should get them? think people should get them? think people should get them? If both partners are on the same page If both partners are on the same page If both partners are on the same page and comfortable with it, it's not going and comfortable with it, it's not going and comfortable with it, it's not going to cause a major rift. And if it does, to cause a major rift. And if it does, to cause a major rift. And if it does, maybe that's a red flag. Do you know maybe that's a red flag. Do you know maybe that's a red flag. Do you know what I mean? I wouldn't want to cause a what I mean? I wouldn't want to cause a what I mean? I wouldn't want to cause a rift. Do you know what I mean? And it's rift. Do you know what I mean? And it's rift. Do you know what I mean? And it's not to say that I'm just keeping all my not to say that I'm just keeping all my not to say that I'm just keeping all my stuff and you're keeping yours. It's stuff and you're keeping yours. It's stuff and you're keeping yours. It's just to say, "Let's agree now what would just to say, "Let's agree now what would just to say, "Let's agree now what would happen in the like 50% probability that happen in the like 50% probability that happen in the like 50% probability that this doesn't work out." this doesn't work out." this doesn't work out." >> Yeah. We've seen both. We've seen >> Yeah. We've seen both. We've seen >> Yeah. We've seen both. We've seen clients come up with very creative and clients come up with very creative and clients come up with very creative and interesting interesting interesting marriage contracts that have, you know, marriage contracts that have, you know, marriage contracts that have, you know, specific formulas for how things are specific formulas for how things are specific formulas for how things are going to work. And depending on how many going to work. And depending on how many going to work. And depending on how many kids they have, it's you know, it's kind kids they have, it's you know, it's kind kids they have, it's you know, it's kind of an interesting exercise. And in that of an interesting exercise. And in that of an interesting exercise. And in that case, it was kind of fun. And they they case, it was kind of fun. And they they case, it was kind of fun. And they they they were engaged in the process. they were engaged in the process. they were engaged in the process. And it didn't cause an issue. And it didn't cause an issue. And it didn't cause an issue. And we've also seen people who did not And we've also seen people who did not And we've also seen people who did not have anything in place and have had have anything in place and have had have anything in place and have had very bad divorce outcomes from a very bad divorce outcomes from a very bad divorce outcomes from a financial perspective. Oh, I had a financial perspective. Oh, I had a financial perspective. Oh, I had a friend go through a divorce recently. friend go through a divorce recently. friend go through a divorce recently. And he's a very successful person. His And he's a very successful person. His And he's a very successful person. His wife was there from the beginning. She wife was there from the beginning. She wife was there from the beginning. She took looked after the family while he took looked after the family while he took looked after the family while he was off gallivanting around the world was off gallivanting around the world was off gallivanting around the world building his his businesses all over the building his his businesses all over the building his his businesses all over the place. So, obviously she you know, they place. So, obviously she you know, they place. So, obviously she you know, they She's contributed hugely to his success. She's contributed hugely to his success. She's contributed hugely to his success. What I noticed though is What I noticed though is What I noticed though is it's destroyed what could have otherwise it's destroyed what could have otherwise it's destroyed what could have otherwise been a good relationship as they been a good relationship as they been a good relationship as they separated. They now really, really hate separated. They now really, really hate separated. They now really, really hate each other because lawyers have stood in each other because lawyers have stood in each other because lawyers have stood in between both sides. Yeah. And basically between both sides. Yeah. And basically between both sides. Yeah. And basically caused tension because that's their job. caused tension because that's their job. caused tension because that's their job. They're going to get paid more. And her They're going to get paid more. And her They're going to get paid more. And her lawyers are incentivized to squeeze lawyers are incentivized to squeeze lawyers are incentivized to squeeze every single penny they can out of this every single penny they can out of this every single penny they can out of this a separation. And so, I think he said a separation. And so, I think he said a separation. And so, I think he said it'd been like six or seven years since it'd been like six or seven years since it'd been like six or seven years since they decided to divorce. And he's still they decided to divorce. And he's still they decided to divorce. And he's still in court arguing with lawyers in court arguing with lawyers in court arguing with lawyers about how they separate. And it's just about how they separate. And it's just about how they separate. And it's just ruined their relationship. They've got ruined their relationship. They've got ruined their relationship. They've got two kids. two kids. two kids. You just think, "Gosh, like if you had a You just think, "Gosh, like if you had a You just think, "Gosh, like if you had a prenup, this would have been prenup, this would have been prenup, this would have been quick and it could have saved the quick and it could have saved the quick and it could have saved the relationship." Okay. relationship." Okay. relationship." Okay. Anything else to say on this this point Anything else to say on this this point Anything else to say on this this point of marriage incompatibility? The of marriage incompatibility? The of marriage incompatibility? The academic research on this does have a a academic research on this does have a a academic research on this does have a a short quiz. I don't know if we have it short quiz. I don't know if we have it short quiz. I don't know if we have it kicking around anywhere here. I think kicking around anywhere here. I think kicking around anywhere here. I think this is a It's called the tightwad and this is a It's called the tightwad and this is a It's called the tightwad and spendthrift quiz developed by spendthrift quiz developed by spendthrift quiz developed by researchers at Carnegie Mellon and the researchers at Carnegie Mellon and the researchers at Carnegie Mellon and the University of Michigan. Yeah. This scale University of Michigan. Yeah. This scale University of Michigan. Yeah. This scale measures the pain of paying, the measures the pain of paying, the measures the pain of paying, the emotional distress some people feel when emotional distress some people feel when emotional distress some people feel when spending money. spending money. spending money. Uh and here's a quick DIY version of Uh and here's a quick DIY version of Uh and here's a quick DIY version of that quiz. Question number one is you that quiz. Question number one is you that quiz. Question number one is you see a high-quality coat on sale for see a high-quality coat on sale for see a high-quality coat on sale for $100, which is usually $300. You need a $100, which is usually $300. You need a $100, which is usually $300. You need a coat and you have the money. Do you buy coat and you have the money. Do you buy coat and you have the money. Do you buy it? Answer A, no. $100 is still a lot of it? Answer A, no. $100 is still a lot of it? Answer A, no. $100 is still a lot of money. I'll wait for a better deal. B, money. I'll wait for a better deal. B, money. I'll wait for a better deal. B, yes, it's a great value. I need yes, it's a great value. I need yes, it's a great value. I need something. C, yes, and I might buy a something. C, yes, and I might buy a something. C, yes, and I might buy a scarf to match since I saved so much. scarf to match since I saved so much. scarf to match since I saved so much. Which one are you? I mean, if I need the Which one are you? I mean, if I need the Which one are you? I mean, if I need the coat, I'm B. coat, I'm B. coat, I'm B. I think I'm C. I think I'm C. I think I'm C. >> [laughter] >> But actually, to be fair, I just don't >> But actually, to be fair, I just don't buy stuff, so I don't even know if I'd buy stuff, so I don't even know if I'd buy stuff, so I don't even know if I'd buy it anyway. Question two. buy it anyway. Question two. buy it anyway. Question two. You are at a restaurant with friends. You are at a restaurant with friends. You are at a restaurant with friends. The bill is being split evenly, but you The bill is being split evenly, but you The bill is being split evenly, but you ordered the cheapest item. How do you ordered the cheapest item. How do you ordered the cheapest item. How do you feel? feel? feel? A, physically pained. I'll likely A, physically pained. I'll likely A, physically pained. I'll likely mention that I should pay less. B, a bit mention that I should pay less. B, a bit mention that I should pay less. B, a bit annoyed, but I'll pay it to keep the annoyed, but I'll pay it to keep the annoyed, but I'll pay it to keep the peace. Or C, fine. It all will even out peace. Or C, fine. It all will even out peace. Or C, fine. It all will even out in the end. in the end. in the end. I'm between B and C. Really? I I might I I'm between B and C. Really? I I might I I'm between B and C. Really? I I might I might feel a little bit annoyed. Really? might feel a little bit annoyed. Really? might feel a little bit annoyed. Really? But I wouldn't I wouldn't cause a fuss But I wouldn't I wouldn't cause a fuss But I wouldn't I wouldn't cause a fuss about it. I'm C again. Fine, it'll even about it. I'm C again. Fine, it'll even about it. I'm C again. Fine, it'll even out in the end. out in the end. out in the end. Number three. Which statement describes Number three. Which statement describes Number three. Which statement describes you best? A, I have trouble spending you best? A, I have trouble spending you best? A, I have trouble spending money even on things I actually need. B, money even on things I actually need. B, money even on things I actually need. B, I balance my spending and saving pretty I balance my spending and saving pretty I balance my spending and saving pretty well. Or C, I often spend more than I well. Or C, I often spend more than I well. Or C, I often spend more than I intended and regret it later. intended and regret it later. intended and regret it later. I can be. I can be. I can be. You said B, which is I balance my You said B, which is I balance my You said B, which is I balance my spending and saving pretty well. spending and saving pretty well. spending and saving pretty well. Um Um Um I would say I'm C again. I would say I'm C again. I would say I'm C again. But again, the caveat here is I actually But again, the caveat here is I actually But again, the caveat here is I actually don't Hmm. I don't spend money on stuff don't Hmm. I don't spend money on stuff don't Hmm. I don't spend money on stuff anymore. I don't buy stuff anymore. anymore. I don't buy stuff anymore. anymore. I don't buy stuff anymore. >> [snorts] >> [snorts] >> [snorts] >> But I can spend it on like ex- >> But I can spend it on like ex- >> But I can spend it on like ex- travel and experiences and stuff. Yeah. travel and experiences and stuff. Yeah. travel and experiences and stuff. Yeah. Last question. When you buy something Last question. When you buy something Last question. When you buy something expensive, your primary emotion is A, expensive, your primary emotion is A, expensive, your primary emotion is A, anxiety or regret. B, satisfaction in anxiety or regret. B, satisfaction in anxiety or regret. B, satisfaction in the utility of the item. Or C, the utility of the item. Or C, the utility of the item. Or C, excitement and a rush. excitement and a rush. excitement and a rush. I think I'm B again. I think I'm B again. I think I'm B again. I I reckon I'm B as well there. I I reckon I'm B as well there. I I reckon I'm B as well there. So, scoring your results. So, scoring your results. So, scoring your results. If you're mostly A's then you're a If you're mostly A's then you're a If you're mostly A's then you're a tightwad. If you're mostly B's, you are tightwad. If you're mostly B's, you are tightwad. If you're mostly B's, you are the unconflicted. And if you're mostly the unconflicted. And if you're mostly the unconflicted. And if you're mostly C's, you are the spendthrift. So, I C's, you are the spendthrift. So, I C's, you are the spendthrift. So, I guess with that, you you are a guess with that, you you are a guess with that, you you are a unconflicted. You're in the middle. You unconflicted. You're in the middle. You unconflicted. You're in the middle. You have a healthy relationship with money have a healthy relationship with money have a healthy relationship with money where you can save when necessary, but where you can save when necessary, but where you can save when necessary, but enjoy the fruits of your labor without enjoy the fruits of your labor without enjoy the fruits of your labor without guilt. And I am a C, which is you feel guilt. And I am a C, which is you feel guilt. And I am a C, which is you feel very little pain when spending. You very little pain when spending. You very little pain when spending. You enjoy the moment, but you might struggle enjoy the moment, but you might struggle enjoy the moment, but you might struggle with long-term saving goals or buyer's with long-term saving goals or buyer's with long-term saving goals or buyer's remorse. remorse. remorse. That's so true. That's so true. That's so true. >> [laughter] >> [laughter] >> [laughter] >> Everyone should do that at home. Okay, >> Everyone should do that at home. Okay, >> Everyone should do that at home. Okay, that makes sense. that makes sense. that makes sense. >> So, we we know that that tightwads and >> So, we we know that that tightwads and >> So, we we know that that tightwads and spendthrifts are incompatible. I I do spendthrifts are incompatible. I I do spendthrifts are incompatible. I I do think it's an interesting concept, like think it's an interesting concept, like think it's an interesting concept, like how do you have that discussion with a how do you have that discussion with a how do you have that discussion with a potential partner? potential partner? potential partner? Or do you just observe it and kind of Or do you just observe it and kind of Or do you just observe it and kind of infer? On on a date, you can say say to infer? On on a date, you can say say to infer? On on a date, you can say say to your partner say, "Oh, there's this your partner say, "Oh, there's this your partner say, "Oh, there's this great podcast on YouTube called The great podcast on YouTube called The great podcast on YouTube called The Diary of a CEO. We should listen to it." Diary of a CEO. We should listen to it." Diary of a CEO. We should listen to it." Then listen to this episode. They're Then listen to this episode. They're Then listen to this episode. They're listening with you know right now if listening with you know right now if listening with you know right now if this you've done this. And then just this you've done this. And then just this you've done this. And then just play along. Play along with your play along. Play along with your play along. Play along with your partner. Are you looking for your partner. Are you looking for your partner. Are you looking for your partner to be the opposite then because partner to be the opposite then because partner to be the opposite then because you said opposites attract? No. They you said opposites attract? No. They you said opposites attract? No. They don't do well all the time. don't do well all the time. don't do well all the time. Opposites end up together, but then have Opposites end up together, but then have Opposites end up together, but then have conflict because of that. Oh, okay. conflict because of that. Oh, okay. conflict because of that. Oh, okay. Yeah. Mm, interesting. [clears throat] Yeah. Mm, interesting. [clears throat] Yeah. Mm, interesting. [clears throat] Yeah. I think if you're if you're a Yeah. I think if you're if you're a Yeah. I think if you're if you're a tightwad, tightwad, tightwad, being with the same is probably good. If being with the same is probably good. If being with the same is probably good. If you're a spendthrift and you end up with you're a spendthrift and you end up with you're a spendthrift and you end up with another spendthrift, another spendthrift, another spendthrift, you'd be really careful about your like you'd be really careful about your like you'd be really careful about your like finances. Yeah. finances. Yeah. finances. Yeah. I don't think my partner's a I don't think my partner's a I don't think my partner's a spendthrift. I think she's in the middle spendthrift. I think she's in the middle spendthrift. I think she's in the middle with like you. with like you. with like you. >> Yeah. Doesn't really care. Yeah. Which >> Yeah. Doesn't really care. Yeah. Which >> Yeah. Doesn't really care. Yeah. Which is useful. is useful. is useful. We we do have one more Okay. card in the We we do have one more Okay. card in the We we do have one more Okay. card in the mistakes, which is under insuring mistakes, which is under insuring mistakes, which is under insuring catastrophic risks. catastrophic risks. catastrophic risks. And I think that's one, particularly for And I think that's one, particularly for And I think that's one, particularly for people who are not currently financially people who are not currently financially people who are not currently financially independent, that's really really independent, that's really really independent, that's really really important. If if your household income important. If if your household income important. If if your household income relies on your income relies on your income relies on your income to maintain the lifestyle of the to maintain the lifestyle of the to maintain the lifestyle of the household, it's really important to have household, it's really important to have household, it's really important to have sufficient life insurance sufficient life insurance sufficient life insurance where if you die, your human capital, where if you die, your human capital, where if you die, your human capital, your ability to earn income in the your ability to earn income in the your ability to earn income in the future is replaced by the insurance. future is replaced by the insurance. future is replaced by the insurance. And also disability insurance, where if And also disability insurance, where if And also disability insurance, where if you lose your ability to work, you have you lose your ability to work, you have you lose your ability to work, you have insurance to replace that income. Do insurance to replace that income. Do insurance to replace that income. Do many people think about this? many people think about this? many people think about this? Probably not enough. Probably not enough. Probably not enough. And it's cheap. Well, disability And it's cheap. Well, disability And it's cheap. Well, disability insurance is not always cheap. Life insurance is not always cheap. Life insurance is not always cheap. Life insurance is generally pretty cheap if insurance is generally pretty cheap if insurance is generally pretty cheap if you're buying you're buying you're buying low-cost term life insurance, which is low-cost term life insurance, which is low-cost term life insurance, which is what most people need. what most people need. what most people need. You made a video called the most You made a video called the most You made a video called the most controversial paper in finance. Yeah. controversial paper in finance. Yeah. controversial paper in finance. Yeah. What paper was that? That was a paper we What paper was that? That was a paper we What paper was that? That was a paper we we didn't have it here, but that was a we didn't have it here, but that was a we didn't have it here, but that was a paper on life cycle asset allocation. paper on life cycle asset allocation. paper on life cycle asset allocation. What does that mean? So, it's answering What does that mean? So, it's answering What does that mean? So, it's answering the question of the question of the question of how should your mix of stocks and bonds how should your mix of stocks and bonds how should your mix of stocks and bonds change throughout your lifestyle? change throughout your lifestyle? change throughout your lifestyle? Conventional wisdom says that you should Conventional wisdom says that you should Conventional wisdom says that you should start out riskier in stocks and then start out riskier in stocks and then start out riskier in stocks and then move towards safer bonds as you get move towards safer bonds as you get move towards safer bonds as you get older. older. older. This paper took a huge amount of data. This paper took a huge amount of data. This paper took a huge amount of data. They had data from 39 countries going They had data from 39 countries going They had data from 39 countries going back as far as 1890, I believe. They back as far as 1890, I believe. They back as far as 1890, I believe. They sampled from that large set of data to sampled from that large set of data to sampled from that large set of data to simulate a million potential sort of simulate a million potential sort of simulate a million potential sort of hypothetical lifetimes that you could hypothetical lifetimes that you could hypothetical lifetimes that you could live through. live through. live through. And then they asked the question of in And then they asked the question of in And then they asked the question of in this simulated data, this simulated data, this simulated data, which asset allocation gives the best which asset allocation gives the best which asset allocation gives the best outcomes? outcomes? outcomes? And they tested target date funds, which And they tested target date funds, which And they tested target date funds, which increase the weight in bonds over time, increase the weight in bonds over time, increase the weight in bonds over time, and those are a lot of people have those and those are a lot of people have those and those are a lot of people have those through their retirement accounts. through their retirement accounts. through their retirement accounts. So, it's just one fund and it starts out So, it's just one fund and it starts out So, it's just one fund and it starts out when you're younger with more equities when you're younger with more equities when you're younger with more equities and then transitions to bonds over time. and then transitions to bonds over time. and then transitions to bonds over time. That's a target date fund. That's a target date fund. That's a target date fund. They tested, I believe, a 60/40, 60% They tested, I believe, a 60/40, 60% They tested, I believe, a 60/40, 60% stock, 40% bond asset allocation. stock, 40% bond asset allocation. stock, 40% bond asset allocation. They might have been some other stuff in They might have been some other stuff in They might have been some other stuff in there, too. They might have tested only there, too. They might have tested only there, too. They might have tested only domestic stocks. domestic stocks. domestic stocks. And what they find in this paper is that And what they find in this paper is that And what they find in this paper is that the optimal portfolio from the the optimal portfolio from the the optimal portfolio from the perspective of retirement consumption perspective of retirement consumption perspective of retirement consumption utility and and and bequest utility, utility and and and bequest utility, utility and and and bequest utility, What does that mean? It's like the What does that mean? It's like the What does that mean? It's like the satisfaction you get from retirement satisfaction you get from retirement satisfaction you get from retirement spending. Okay. Measured in a with a spending. Okay. Measured in a with a spending. Okay. Measured in a with a formula so that it can be studied. formula so that it can be studied. formula so that it can be studied. And then likewise for the amount of And then likewise for the amount of And then likewise for the amount of money that you have left over at at money that you have left over at at money that you have left over at at death. death. death. They they measure the probability of They they measure the probability of They they measure the probability of running out of money as well as a whole running out of money as well as a whole running out of money as well as a whole bunch of different metrics they look at. bunch of different metrics they look at. bunch of different metrics they look at. And they find that a 100% equity And they find that a 100% equity And they find that a 100% equity portfolio portfolio portfolio with with with a big chunk in international stocks a big chunk in international stocks a big chunk in international stocks is optimal. is optimal. is optimal. It is a a 1/3 domestic, 2/3 It is a a 1/3 domestic, 2/3 It is a a 1/3 domestic, 2/3 international stocks. When you say international stocks. When you say international stocks. When you say domestic, what does that mean? That's a domestic, what does that mean? That's a domestic, what does that mean? That's a great question. So, the way they set up great question. So, the way they set up great question. So, the way they set up domestic in the paper is that it it can domestic in the paper is that it it can domestic in the paper is that it it can be any country. So, the way they do the be any country. So, the way they do the be any country. So, the way they do the simulations is that for each draw, so simulations is that for each draw, so simulations is that for each draw, so they're drawing it's on average 10 years they're drawing it's on average 10 years they're drawing it's on average 10 years of returns. We're saying we're in the of returns. We're saying we're in the of returns. We're saying we're in the US. US. US. They'll draw the US returns measured in They'll draw the US returns measured in They'll draw the US returns measured in US dollars for a 10-year block. That's US dollars for a 10-year block. That's US dollars for a 10-year block. That's the domestic return. the domestic return. the domestic return. And then the international block is And then the international block is And then the international block is going to be 10 years on average of all going to be 10 years on average of all going to be 10 years on average of all the other countries samples returns the other countries samples returns the other countries samples returns measured in US dollar. So, I've got the measured in US dollar. So, I've got the measured in US dollar. So, I've got the domestic return, the international domestic return, the international domestic return, the international return. The next block might be 10 years return. The next block might be 10 years return. The next block might be 10 years from Italy from Italy from Italy measured in measured in measured in whatever the Italian currency was at the whatever the Italian currency was at the whatever the Italian currency was at the time. And then the international portion time. And then the international portion time. And then the international portion is going to be all the other countries is going to be all the other countries is going to be all the other countries excluding Italy measured in Italian excluding Italy measured in Italian excluding Italy measured in Italian currency. currency. currency. And so, they're weaving together all And so, they're weaving together all And so, they're weaving together all these blocks. That's called bootstrap these blocks. That's called bootstrap these blocks. That's called bootstrap simulation. So, domestic, to answer your simulation. So, domestic, to answer your simulation. So, domestic, to answer your question, is whatever country you live question, is whatever country you live question, is whatever country you live in. So, the outcome or the conclusion in. So, the outcome or the conclusion in. So, the outcome or the conclusion from this should be that you should from this should be that you should from this should be that you should invest invest invest I mean, if we're following this and if I mean, if we're following this and if I mean, if we're following this and if it was 100% accurate, well, 60% in it was 100% accurate, well, 60% in it was 100% accurate, well, 60% in whatever country you live in, in the whatever country you live in, in the whatever country you live in, in the stocks of whatever country you live in. stocks of whatever country you live in. stocks of whatever country you live in. 30%. 30%. 30%. >> 30%. >> 30%. >> 30%. >> Domestic. So, yeah, 1/3 domestic, 2/3 >> Domestic. So, yeah, 1/3 domestic, 2/3 >> Domestic. So, yeah, 1/3 domestic, 2/3 international. Okay, so if I'm in the international. Okay, so if I'm in the international. Okay, so if I'm in the United States, one So, I get 30% of my United States, one So, I get 30% of my United States, one So, I get 30% of my capital and invest it in the capital and invest it in the capital and invest it in the American companies. Yeah. And then 60% American companies. Yeah. And then 60% American companies. Yeah. And then 60% in international stocks. Yeah. Well, in international stocks. Yeah. Well, in international stocks. Yeah. Well, 67%, yeah. Yeah. So, that 67%, yeah. Yeah. So, that 67%, yeah. Yeah. So, that one important finding in the paper one important finding in the paper one important finding in the paper talked about in the video is that the talked about in the video is that the talked about in the video is that the the curve for how optimal the domestic the curve for how optimal the domestic the curve for how optimal the domestic amount is is pretty flat, if I remember amount is is pretty flat, if I remember amount is is pretty flat, if I remember correctly, between sort of 10% and 50%. correctly, between sort of 10% and 50%. correctly, between sort of 10% and 50%. So, they do say in the paper that for a So, they do say in the paper that for a So, they do say in the paper that for a US investor, you don't necessarily have US investor, you don't necessarily have US investor, you don't necessarily have to be a third domestic. Even if you're to be a third domestic. Even if you're to be a third domestic. Even if you're 50 or even if you're just market cap 50 or even if you're just market cap 50 or even if you're just market cap weighted, which is currently around 60 weighted, which is currently around 60 weighted, which is currently around 60 or 65%, that's probably fine. But for a or 65%, that's probably fine. But for a or 65%, that's probably fine. But for a Canadian investor Canadian investor Canadian investor or someone who's in a country other than or someone who's in a country other than or someone who's in a country other than the US, 1/3 in your domestic country the US, 1/3 in your domestic country the US, 1/3 in your domestic country ends up being a pretty big home country ends up being a pretty big home country ends up being a pretty big home country bias. bias. bias. In these simulations, are they saying In these simulations, are they saying In these simulations, are they saying that you need to invest in international that you need to invest in international that you need to invest in international stocks because sometimes in the stocks because sometimes in the stocks because sometimes in the simulations, your domestic country, your simulations, your domestic country, your simulations, your domestic country, your home country, has problems? home country, has problems? home country, has problems? Yeah. High inflation tends to be bad for Yeah. High inflation tends to be bad for Yeah. High inflation tends to be bad for retirement consumption where you're retirement consumption where you're retirement consumption where you're spending a lot more and for domestic spending a lot more and for domestic spending a lot more and for domestic stock returns. And international stocks stock returns. And international stocks stock returns. And international stocks protect against that. protect against that. protect against that. So, it diversifies you a little bit. So, it diversifies you a little bit. So, it diversifies you a little bit. Yeah, well, that's exactly what it is. Yeah, well, that's exactly what it is. Yeah, well, that's exactly what it is. It's a diversification. And that paper It's a diversification. And that paper It's a diversification. And that paper was it was controversial. I mean, we had was it was controversial. I mean, we had was it was controversial. I mean, we had the co-author the co-author the co-author on our podcast twice to talk about it, on our podcast twice to talk about it, on our podcast twice to talk about it, but it it was met with a lot of but it it was met with a lot of but it it was met with a lot of controversy from controversy from controversy from everybody, from a lot of professionals, everybody, from a lot of professionals, everybody, from a lot of professionals, from other academics. Why? from other academics. Why? from other academics. Why? It's an extreme finding. It's an extreme finding. It's an extreme finding. The conventional wisdom that you should The conventional wisdom that you should The conventional wisdom that you should be allocating more toward bonds be allocating more toward bonds be allocating more toward bonds throughout the life cycle is so throughout the life cycle is so throughout the life cycle is so ingrained in everyone's thinking that a ingrained in everyone's thinking that a ingrained in everyone's thinking that a finding like this that shows that that's finding like this that shows that that's finding like this that shows that that's basically wrong, of course it's going to basically wrong, of course it's going to basically wrong, of course it's going to be met with be met with be met with controversy. But at the very least, I controversy. But at the very least, I controversy. But at the very least, I think it's an interesting paper. It's think it's an interesting paper. It's think it's an interesting paper. It's telling us that stocks are a little bit telling us that stocks are a little bit telling us that stocks are a little bit safer safer safer for long-term investors than we probably for long-term investors than we probably for long-term investors than we probably thought. thought. thought. And bonds, which are typically And bonds, which are typically And bonds, which are typically considered safe, are actually a little considered safe, are actually a little considered safe, are actually a little bit riskier than we may have thought for bit riskier than we may have thought for bit riskier than we may have thought for long-term investors. The reason being long-term investors. The reason being long-term investors. The reason being that during periods of high inflation, that during periods of high inflation, that during periods of high inflation, bonds get absolutely decimated. What's a bonds get absolutely decimated. What's a bonds get absolutely decimated. What's a bond? bond? bond? A bond is a debt instrument. So, you're A bond is a debt instrument. So, you're A bond is a debt instrument. So, you're effectively lending money to a effectively lending money to a effectively lending money to a government, and you're receiving government, and you're receiving government, and you're receiving interest payments over time, and then interest payments over time, and then interest payments over time, and then your principal back at the end. What is your principal back at the end. What is your principal back at the end. What is the the most important thing we haven't the the most important thing we haven't the the most important thing we haven't talked about that your audience come to talked about that your audience come to talked about that your audience come to you to understand? Oh. Well, you to understand? Oh. Well, you to understand? Oh. Well, a lot of a lot of the things I talk a lot of a lot of the things I talk a lot of a lot of the things I talk about are financial products that you about are financial products that you about are financial products that you should not invest in. Okay, tell me some should not invest in. Okay, tell me some should not invest in. Okay, tell me some of those. Which I always think is fun. A of those. Which I always think is fun. A of those. Which I always think is fun. A big one that I spent quite a bit of time big one that I spent quite a bit of time big one that I spent quite a bit of time on last year, I did three videos on it, on last year, I did three videos on it, on last year, I did three videos on it, was on on covered calls. What's that? was on on covered calls. What's that? was on on covered calls. What's that? So, that's where you you own a stock and So, that's where you you own a stock and So, that's where you you own a stock and then you sell a call option, which is then you sell a call option, which is then you sell a call option, which is the option to buy the stock. You're the option to buy the stock. You're the option to buy the stock. You're selling that option to somebody else, selling that option to somebody else, selling that option to somebody else, which gives you a which gives you a which gives you a an option premium, and so you get some an option premium, and so you get some an option premium, and so you get some income from having sold the call option. income from having sold the call option. income from having sold the call option. But it also means that if the stock that But it also means that if the stock that But it also means that if the stock that you own appreciates sufficiently, you you own appreciates sufficiently, you you own appreciates sufficiently, you are required to sell it to the person are required to sell it to the person are required to sell it to the person who bought the call option from you who bought the call option from you who bought the call option from you at a at a preset price. at a at a preset price. at a at a preset price. So, the stock is whatever, $40, and you So, the stock is whatever, $40, and you So, the stock is whatever, $40, and you sold a call at $50. The stock goes to sold a call at $50. The stock goes to sold a call at $50. The stock goes to $60, you have to sell it at 50. Mhm. So, $60, you have to sell it at 50. Mhm. So, $60, you have to sell it at 50. Mhm. So, you're giving up a big chunk of your you're giving up a big chunk of your you're giving up a big chunk of your upside. upside. upside. And this plays on one of the big biases And this plays on one of the big biases And this plays on one of the big biases that investors have, which is a that investors have, which is a that investors have, which is a preference for income. It's the mental preference for income. It's the mental preference for income. It's the mental accounting bias where investors separate accounting bias where investors separate accounting bias where investors separate capital and income. capital and income. capital and income. And so, there's a And so, there's a And so, there's a huge proliferation now of covered call huge proliferation now of covered call huge proliferation now of covered call products where they do that that products where they do that that products where they do that that strategy that I that I just described strategy that I that I just described strategy that I that I just described inside of an ETF. inside of an ETF. inside of an ETF. They charge usually a They charge usually a They charge usually a higher fee. higher fee. higher fee. And these are being marketed really And these are being marketed really And these are being marketed really heavily to investors on the premise that heavily to investors on the premise that heavily to investors on the premise that you're going to get appreciation, you're going to get appreciation, you're going to get appreciation, capital appreciation, and you're also capital appreciation, and you're also capital appreciation, and you're also going to get income. going to get income. going to get income. But I think my my view on this and what But I think my my view on this and what But I think my my view on this and what I tried to explain in those videos is I tried to explain in those videos is I tried to explain in those videos is that you're giving up that you're giving up that you're giving up so much upside that I don't think most so much upside that I don't think most so much upside that I don't think most investors realize that they're giving investors realize that they're giving investors realize that they're giving up, that the implied cost of these up, that the implied cost of these up, that the implied cost of these products is enormous. On that point of products is enormous. On that point of products is enormous. On that point of fees, I've got this graph here, which I fees, I've got this graph here, which I fees, I've got this graph here, which I think is pretty pertinent to what you're think is pretty pertinent to what you're think is pretty pertinent to what you're saying. saying. saying. Because when we start investing in ETFs Because when we start investing in ETFs Because when we start investing in ETFs and various index funds, we often don't and various index funds, we often don't and various index funds, we often don't think about fees. think about fees. think about fees. You'll say, "Oh, 0.5%." You think, You'll say, "Oh, 0.5%." You think, You'll say, "Oh, 0.5%." You think, "Okay, whatever. 0.5% is fine. 1% fine." "Okay, whatever. 0.5% is fine. 1% fine." "Okay, whatever. 0.5% is fine. 1% fine." Small numbers. Small numbers. Small numbers. But when you look at that graph, you see But when you look at that graph, you see But when you look at that graph, you see how that can impact your outcome over how that can impact your outcome over how that can impact your outcome over time. time. time. Yeah. Yeah. Yeah. Fees compound. Any rate of return that Fees compound. Any rate of return that Fees compound. Any rate of return that compounds over long periods of time can compounds over long periods of time can compounds over long periods of time can be very impactful in dollar terms. be very impactful in dollar terms. be very impactful in dollar terms. Yeah. And and some people choose to keep Yeah. And and some people choose to keep Yeah. And and some people choose to keep their money in cash. their money in cash. their money in cash. Um because most of us are never educated Um because most of us are never educated Um because most of us are never educated on the subject of inflation and what on the subject of inflation and what on the subject of inflation and what inflation means. So, some of us, you inflation means. So, some of us, you inflation means. So, some of us, you know, we might keep $10,000 under the know, we might keep $10,000 under the know, we might keep $10,000 under the bed. bed. bed. What do you say to those people? What do you say to those people? What do you say to those people? Yeah, so inflation is it's everywhere. Yeah, so inflation is it's everywhere. Yeah, so inflation is it's everywhere. It's it's been around for for It's it's been around for for It's it's been around for for throughout history, and it's probably throughout history, and it's probably throughout history, and it's probably not going to go away. We have central not going to go away. We have central not going to go away. We have central bank policies in most developed bank policies in most developed bank policies in most developed countries that actually target a low but countries that actually target a low but countries that actually target a low but stable rate of inflation. stable rate of inflation. stable rate of inflation. And there's there are reasons for that, And there's there are reasons for that, And there's there are reasons for that, but what it means is that if you have but what it means is that if you have but what it means is that if you have money sitting under your mattress, its money sitting under your mattress, its money sitting under your mattress, its purchasing power will decrease over purchasing power will decrease over purchasing power will decrease over time. And that can be very damaging to time. And that can be very damaging to time. And that can be very damaging to your wealth. your wealth. your wealth. You can maybe keep pace with inflation You can maybe keep pace with inflation You can maybe keep pace with inflation using short-term government debt using short-term government debt using short-term government debt instruments, which are going to pay you instruments, which are going to pay you instruments, which are going to pay you a little bit of an interest rate. a little bit of an interest rate. a little bit of an interest rate. But again, periods of high inflation can But again, periods of high inflation can But again, periods of high inflation can cause even that to to decline in real cause even that to to decline in real cause even that to to decline in real value. So, one of the best ways to fight value. So, one of the best ways to fight value. So, one of the best ways to fight it fight inflation for a long-term it fight inflation for a long-term it fight inflation for a long-term investors, something we've been talking investors, something we've been talking investors, something we've been talking about, is just investing in low-cost about, is just investing in low-cost about, is just investing in low-cost index funds to avoid the fee issue. index funds to avoid the fee issue. index funds to avoid the fee issue. All right, and participate in the stock All right, and participate in the stock All right, and participate in the stock market, which throughout history has far market, which throughout history has far market, which throughout history has far outpaced inflation. outpaced inflation. outpaced inflation. One of the smartest things a business One of the smartest things a business One of the smartest things a business can do is build like a bigger company can do is build like a bigger company can do is build like a bigger company without actually hiring like one. But, without actually hiring like one. But, without actually hiring like one. But, the problem we all face is that most the problem we all face is that most the problem we all face is that most companies don't have every skill in companies don't have every skill in companies don't have every skill in house. So, when I look at the businesses house. So, when I look at the businesses house. So, when I look at the businesses seeing real success today, the seeing real success today, the seeing real success today, the consistent pattern with all of them is consistent pattern with all of them is consistent pattern with all of them is how quickly they move. They bring in how quickly they move. They bring in how quickly they move. They bring in specialists with skills in emerging specialists with skills in emerging specialists with skills in emerging areas to keep themselves ahead. Even in areas to keep themselves ahead. Even in areas to keep themselves ahead. Even in our company, we spent the last year our company, we spent the last year our company, we spent the last year pulling in talent across areas like AI pulling in talent across areas like AI pulling in talent across areas like AI native strategy, no-code builds, and native strategy, no-code builds, and native strategy, no-code builds, and product workflows. And we find this product workflows. And we find this product workflows. And we find this talent through our long-term partner talent through our long-term partner talent through our long-term partner Fiverr Pro. Their premium service only Fiverr Pro. Their premium service only Fiverr Pro. Their premium service only shows you vetted talent, so you've shows you vetted talent, so you've shows you vetted talent, so you've always got the safeguard that anyone you always got the safeguard that anyone you always got the safeguard that anyone you pull in to help you with a complex pull in to help you with a complex pull in to help you with a complex project has the skills that you're after project has the skills that you're after project has the skills that you're after and will deliver to the same high and will deliver to the same high and will deliver to the same high standards as your internal team. And standards as your internal team. And standards as your internal team. And most importantly, they'll keep up with most importantly, they'll keep up with most importantly, they'll keep up with the pace. It's a simple strategy, but it the pace. It's a simple strategy, but it the pace. It's a simple strategy, but it lets us stay agile without compromising lets us stay agile without compromising lets us stay agile without compromising on quality. So, if you need these kind on quality. So, if you need these kind on quality. So, if you need these kind of skills in your business, head to of skills in your business, head to of skills in your business, head to pro.fiverr.com to find pioneering talent pro.fiverr.com to find pioneering talent pro.fiverr.com to find pioneering talent to fill your business's gaps. That's to fill your business's gaps. That's to fill your business's gaps. That's pro.fiverr.com. pro.fiverr.com. pro.fiverr.com. This is something that I've made for This is something that I've made for This is something that I've made for you. I realized that the Diary of a CEO you. I realized that the Diary of a CEO you. I realized that the Diary of a CEO audience are strivers, whether it's in audience are strivers, whether it's in audience are strivers, whether it's in business or health, we all have big business or health, we all have big business or health, we all have big goals that we want to accomplish. And goals that we want to accomplish. And goals that we want to accomplish. And one of the things I've learned is that one of the things I've learned is that one of the things I've learned is that when you aim at the big big big goal, it when you aim at the big big big goal, it when you aim at the big big big goal, it can feel incredibly can feel incredibly can feel incredibly psychologically uncomfortable because psychologically uncomfortable because psychologically uncomfortable because it's kind of like being stood at the it's kind of like being stood at the it's kind of like being stood at the foot of Mount Everest and looking foot of Mount Everest and looking foot of Mount Everest and looking upwards. The way to accomplish your upwards. The way to accomplish your upwards. The way to accomplish your goals is by breaking them down into tiny goals is by breaking them down into tiny goals is by breaking them down into tiny small steps, and we call this in our small steps, and we call this in our small steps, and we call this in our team the 1%. And actually, this team the 1%. And actually, this team the 1%. And actually, this philosophy is highly responsible for philosophy is highly responsible for philosophy is highly responsible for much of our success here. So, what we've much of our success here. So, what we've much of our success here. So, what we've done is that you at home can accomplish done is that you at home can accomplish done is that you at home can accomplish any big goal that you have is we've made any big goal that you have is we've made any big goal that you have is we've made these 1% diaries, and we released these these 1% diaries, and we released these these 1% diaries, and we released these last year, and they all sold out. So, I last year, and they all sold out. So, I last year, and they all sold out. So, I asked my team over and over again to asked my team over and over again to asked my team over and over again to bring the diaries back, but also to bring the diaries back, but also to bring the diaries back, but also to introduce some new colors and to make introduce some new colors and to make introduce some new colors and to make some minor tweaks to the diary. So, now some minor tweaks to the diary. So, now some minor tweaks to the diary. So, now we have a better range for you. So, if we have a better range for you. So, if we have a better range for you. So, if you have a big goal in mind and you need you have a big goal in mind and you need you have a big goal in mind and you need a framework and a process and some a framework and a process and some a framework and a process and some motivation, then I highly recommend you motivation, then I highly recommend you motivation, then I highly recommend you get one of these diaries before they all get one of these diaries before they all get one of these diaries before they all sell out once again. And you can get sell out once again. And you can get sell out once again. And you can get yours at the diary.com. yours at the diary.com. yours at the diary.com. And if you want the link, the link is in And if you want the link, the link is in And if you want the link, the link is in the description below. the description below. the description below. Is this broadly accurate? This graph Is this broadly accurate? This graph Is this broadly accurate? This graph here shows the impact of inflation on here shows the impact of inflation on here shows the impact of inflation on cash kept under the mattress over 30 cash kept under the mattress over 30 cash kept under the mattress over 30 over 20 years, and you start with over 20 years, and you start with over 20 years, and you start with $10,000 $10,000 $10,000 in terms of purchasing power, and 20 in terms of purchasing power, and 20 in terms of purchasing power, and 20 years later, if that cash is under the years later, if that cash is under the years later, if that cash is under the mattress, you have $5,336. mattress, you have $5,336. mattress, you have $5,336. It doesn't show me the inflation rate. It doesn't show me the inflation rate. It doesn't show me the inflation rate. Oh, and that's at 3% inflation. Oh, and that's at 3% inflation. Oh, and that's at 3% inflation. You're losing half of your money You're losing half of your money You're losing half of your money effectively. effectively. effectively. And the source here is St. James's And the source here is St. James's And the source here is St. James's Place. Place. Place. So, a lot of people who are just holding So, a lot of people who are just holding So, a lot of people who are just holding on to cash don't really realize that on to cash don't really realize that on to cash don't really realize that over a 20-year period, assuming a 3% over a 20-year period, assuming a 3% over a 20-year period, assuming a 3% inflation rate, they're halving their inflation rate, they're halving their inflation rate, they're halving their money. Uh it ties back to I don't money. Uh it ties back to I don't money. Uh it ties back to I don't remember which number it was, but it remember which number it was, but it remember which number it was, but it ties back to one of those biggest ties back to one of those biggest ties back to one of those biggest mistakes in in personal finance we mistakes in in personal finance we mistakes in in personal finance we talked about, which is talked about, which is talked about, which is uh yeah, not not investing, not taking uh yeah, not not investing, not taking uh yeah, not not investing, not taking the right kinds of risk with your the right kinds of risk with your the right kinds of risk with your investments. investments. investments. And just holding cash. Holding cash is And just holding cash. Holding cash is And just holding cash. Holding cash is is it's in its own way taking a type of is it's in its own way taking a type of is it's in its own way taking a type of risk. risk. risk. You you you don't have an expected You you you don't have an expected You you you don't have an expected return when you hold cash. You you in return when you hold cash. You you in return when you hold cash. You you in real terms have a negative expected real terms have a negative expected real terms have a negative expected return. return. return. Do you think we should all be thinking Do you think we should all be thinking Do you think we should all be thinking about retirement planning? about retirement planning? about retirement planning? I think it ties into the PERMA thinking I think it ties into the PERMA thinking I think it ties into the PERMA thinking and designing the life that you want to and designing the life that you want to and designing the life that you want to live, but at some point it it I mean, at live, but at some point it it I mean, at live, but at some point it it I mean, at some point we can't work anymore. It's some point we can't work anymore. It's some point we can't work anymore. It's rare for somebody to be able to work rare for somebody to be able to work rare for somebody to be able to work into their, you know, I don't know, 80s. into their, you know, I don't know, 80s. into their, you know, I don't know, 80s. I think that it's it's sensible to plan I think that it's it's sensible to plan I think that it's it's sensible to plan for for that. But, beyond that, a lot of for for that. But, beyond that, a lot of for for that. But, beyond that, a lot of people don't want to have to work people don't want to have to work people don't want to have to work forever. People might choose to work forever. People might choose to work forever. People might choose to work forever, but they might choose to do forever, but they might choose to do forever, but they might choose to do lower-paying work. lower-paying work. lower-paying work. Uh but the idea that you will be forced Uh but the idea that you will be forced Uh but the idea that you will be forced to work forever, I don't think is very to work forever, I don't think is very to work forever, I don't think is very attractive to anyone. So, from that attractive to anyone. So, from that attractive to anyone. So, from that perspective, building financial perspective, building financial perspective, building financial independence by saving and planning for independence by saving and planning for independence by saving and planning for retirement, yeah, I think it's important retirement, yeah, I think it's important retirement, yeah, I think it's important for everyone everyone to think about. Is for everyone everyone to think about. Is for everyone everyone to think about. Is there is the sort of social contract of there is the sort of social contract of there is the sort of social contract of retirement changing based on how the retirement changing based on how the retirement changing based on how the economy is changing? Cuz I hear a lot of economy is changing? Cuz I hear a lot of economy is changing? Cuz I hear a lot of people saying you're not going to be people saying you're not going to be people saying you're not going to be able to retire and get a pension because able to retire and get a pension because able to retire and get a pension because there's not enough money or you're going there's not enough money or you're going there's not enough money or you're going to have to work later than ever before. to have to work later than ever before. to have to work later than ever before. I think the onus has been put back on I think the onus has been put back on I think the onus has been put back on individuals. individuals. individuals. The pensions used to be much more common The pensions used to be much more common The pensions used to be much more common uh from companies and and governments. uh from companies and and governments. uh from companies and and governments. So, So, So, retirement's changed from that retirement's changed from that retirement's changed from that perspective, for sure. But, I I I don't perspective, for sure. But, I I I don't perspective, for sure. But, I I I don't know if we can say we're in a crisis. I know if we can say we're in a crisis. I know if we can say we're in a crisis. I think people have more personal think people have more personal think people have more personal responsibility now than they've had in responsibility now than they've had in responsibility now than they've had in the past, but they also have better the past, but they also have better the past, but they also have better tools than have historically been tools than have historically been tools than have historically been available. 30 years ago, we we were just available. 30 years ago, we we were just available. 30 years ago, we we were just starting to get low-cost index funds starting to get low-cost index funds starting to get low-cost index funds proliferating and being readily proliferating and being readily proliferating and being readily available to everybody. Prior to that, available to everybody. Prior to that, available to everybody. Prior to that, you were paying 2% or more to invest in you were paying 2% or more to invest in you were paying 2% or more to invest in a mutual fund. Mhm. So, the tools people a mutual fund. Mhm. So, the tools people a mutual fund. Mhm. So, the tools people have available to them are are better have available to them are are better have available to them are are better today than than they've been in the today than than they've been in the today than than they've been in the past, past, past, but it's also there's also a lot more but it's also there's also a lot more but it's also there's also a lot more responsibility people have to take for responsibility people have to take for responsibility people have to take for their own personal finances. You would their own personal finances. You would their own personal finances. You would you're naming the things that people you're naming the things that people you're naming the things that people shouldn't invest in. shouldn't invest in. shouldn't invest in. The first is that cool The first is that cool The first is that cool thing. Yeah, covered calls. Covered thing. Yeah, covered calls. Covered thing. Yeah, covered calls. Covered calls. What else? Another one that I calls. What else? Another one that I calls. What else? Another one that I think is really problematic is thematic think is really problematic is thematic think is really problematic is thematic ETFs. ETFs. ETFs. And so, that's like an AI ETF or I don't And so, that's like an AI ETF or I don't And so, that's like an AI ETF or I don't know, a space or energy, like any any know, a space or energy, like any any know, a space or energy, like any any specific specific specific uh ETF that's targeting a specific uh ETF that's targeting a specific uh ETF that's targeting a specific theme. Why? theme. Why? theme. Why? What tends to happen with thematic ETFs What tends to happen with thematic ETFs What tends to happen with thematic ETFs is that something becomes really hot. is that something becomes really hot. is that something becomes really hot. So, maybe it's AI, maybe it's cannabis, So, maybe it's AI, maybe it's cannabis, So, maybe it's AI, maybe it's cannabis, uh electric vehicles was another one. uh electric vehicles was another one. uh electric vehicles was another one. Sustainable energy. Yeah, asset prices Sustainable energy. Yeah, asset prices Sustainable energy. Yeah, asset prices in that theme go up because there's a in that theme go up because there's a in that theme go up because there's a lot of interest in it. Everybody wants lot of interest in it. Everybody wants lot of interest in it. Everybody wants to invest in that space. Asset prices go up, an index provider Asset prices go up, an index provider creates an index for that hot thing. creates an index for that hot thing. creates an index for that hot thing. And then an ETF gets launched, but it And then an ETF gets launched, but it And then an ETF gets launched, but it gets launched when the asset prices are gets launched when the asset prices are gets launched when the asset prices are up here. Mhm. And what tends to happen up here. Mhm. And what tends to happen up here. Mhm. And what tends to happen is the asset prices come down, is the asset prices come down, is the asset prices come down, then the returns on thematic funds tend then the returns on thematic funds tend then the returns on thematic funds tend to be very poor. Ah, okay. to be very poor. Ah, okay. to be very poor. Ah, okay. Yeah, I think I was guilty of that in my Yeah, I think I was guilty of that in my Yeah, I think I was guilty of that in my early career. It was like, "Oh my god, early career. It was like, "Oh my god, early career. It was like, "Oh my god, sustainable energy ETF. I believe in sustainable energy ETF. I believe in sustainable energy ETF. I believe in sustainable energy. I should invest in sustainable energy. I should invest in sustainable energy. I should invest in that." that." that." >> Yeah. But, you're right. They created >> Yeah. But, you're right. They created >> Yeah. But, you're right. They created that when it was hot. So, you should that when it was hot. So, you should that when it was hot. So, you should have invested, I guess you're saying, have invested, I guess you're saying, have invested, I guess you're saying, just invest in the FTSE 100, the S&P 500 just invest in the FTSE 100, the S&P 500 just invest in the FTSE 100, the S&P 500 instead. Or technology, which is a instead. Or technology, which is a instead. Or technology, which is a broader basket. broader basket. broader basket. Technology's tough. Technology has Technology's tough. Technology has Technology's tough. Technology has performed so incredibly well, performed so incredibly well, performed so incredibly well, but it is still one sector. Okay. I have but it is still one sector. Okay. I have but it is still one sector. Okay. I have trouble saying you should invest in trouble saying you should invest in trouble saying you should invest in tech. If you had invested in tech for tech. If you had invested in tech for tech. If you had invested in tech for the last 20 years, the last 20 years, the last 20 years, well done. well done. well done. Should you choose to invest only in tech Should you choose to invest only in tech Should you choose to invest only in tech or have a big concentration in tech or have a big concentration in tech or have a big concentration in tech today? I think that's a lot less today? I think that's a lot less today? I think that's a lot less obvious. obvious. obvious. One would say, "Well, look at all this One would say, "Well, look at all this One would say, "Well, look at all this AI stuff. There's How do I invest in all AI stuff. There's How do I invest in all AI stuff. There's How do I invest in all the AI stuff?" the AI stuff?" the AI stuff?" A lot of it's private right now, A lot of it's private right now, A lot of it's private right now, although a lot of the public companies although a lot of the public companies although a lot of the public companies do own chunks of of some of these do own chunks of of some of these do own chunks of of some of these private companies. private companies. private companies. Uh we'll see how that plays out. Uh we'll see how that plays out. Uh we'll see how that plays out. But, that's another one that's been But, that's another one that's been But, that's another one that's been tough recently where a lot of investors tough recently where a lot of investors tough recently where a lot of investors are interested in investing in in in in are interested in investing in in in in are interested in investing in in in in investing in some of these private investing in some of these private investing in some of these private companies. Uh a lot of them AI-related, companies. Uh a lot of them AI-related, companies. Uh a lot of them AI-related, but SpaceX is another one. but SpaceX is another one. but SpaceX is another one. It's really hard for retail investors to It's really hard for retail investors to It's really hard for retail investors to get access to those types of things. get access to those types of things. get access to those types of things. But, there are companies who are But, there are companies who are But, there are companies who are creating products that say that they can creating products that say that they can creating products that say that they can give you access to these to these give you access to these to these give you access to these to these things. They're charging high fees. Uh things. They're charging high fees. Uh things. They're charging high fees. Uh it's not obvious that they've been able it's not obvious that they've been able it's not obvious that they've been able to buy the underlying securities that to buy the underlying securities that to buy the underlying securities that they're saying they have access to at they're saying they have access to at they're saying they have access to at good prices. good prices. good prices. But, it's just another example of But, it's just another example of But, it's just another example of financial companies financial companies financial companies preying on the the desires and biases of preying on the the desires and biases of preying on the the desires and biases of investors. investors. investors. Financial firms are very good at seeing Financial firms are very good at seeing Financial firms are very good at seeing what investors want, even if that thing what investors want, even if that thing what investors want, even if that thing is not good for them, and then creating is not good for them, and then creating is not good for them, and then creating a product to fulfill that desire. a product to fulfill that desire. a product to fulfill that desire. So, if if someone listening now is So, if if someone listening now is So, if if someone listening now is let's say they're 50 years old and let's say they're 50 years old and let's say they're 50 years old and they've got they've got they've got $20,000 $20,000 $20,000 in savings in cash, in savings in cash, in savings in cash, and you had to be decisive. You don't and you had to be decisive. You don't and you had to be decisive. You don't know the nuance and the the detail of know the nuance and the the detail of know the nuance and the the detail of their life. You don't know their PERMA their life. You don't know their PERMA their life. You don't know their PERMA framework necessarily. framework necessarily. framework necessarily. But, your job was just to make the money But, your job was just to make the money But, your job was just to make the money in the next 10 years. in the next 10 years. in the next 10 years. What How do you think you'd allocate What How do you think you'd allocate What How do you think you'd allocate that? Let's say $10,000, it's easier. that? Let's say $10,000, it's easier. that? Let's say $10,000, it's easier. $10,000 in cash. How would you allocate $10,000 in cash. How would you allocate $10,000 in cash. How would you allocate it? That's a it? That's a it? That's a That's a tough question. I don't know if That's a tough question. I don't know if That's a tough question. I don't know if it's answerable. Uh especially over 10 it's answerable. Uh especially over 10 it's answerable. Uh especially over 10 years, it's tough. years, it's tough. years, it's tough. What about 20 years? What about 20 years? What about 20 years? >> [laughter] >> [laughter] >> [laughter] >> If they have a long time horizon, so I I >> If they have a long time horizon, so I I >> If they have a long time horizon, so I I can tell you personally, can tell you personally, can tell you personally, I I like to invest in stocks. I I like to invest in stocks. I I like to invest in stocks. I I have a a globally diversified stock I I have a a globally diversified stock I I have a a globally diversified stock portfolio with a Canadian home country portfolio with a Canadian home country portfolio with a Canadian home country bias, kind of like what that that paper bias, kind of like what that that paper bias, kind of like what that that paper the controversial paper found. the controversial paper found. the controversial paper found. Uh we were doing that prior to that Uh we were doing that prior to that Uh we were doing that prior to that paper coming out. paper coming out. paper coming out. Uh but, I think that general concept of Uh but, I think that general concept of Uh but, I think that general concept of a globally diversified portfolio, maybe a globally diversified portfolio, maybe a globally diversified portfolio, maybe with some home country bias, with some home country bias, with some home country bias, makes a lot of sense for most people, makes a lot of sense for most people, makes a lot of sense for most people, including for retirees. But, there are including for retirees. But, there are including for retirees. But, there are so many like, what's what's his risk so many like, what's what's his risk so many like, what's what's his risk tolerance? If he's going to panic when tolerance? If he's going to panic when tolerance? If he's going to panic when the market goes down and sell the market goes down and sell the market goes down and sell everything, then it wasn't a very good everything, then it wasn't a very good everything, then it wasn't a very good idea, and he's not going to get the idea, and he's not going to get the idea, and he's not going to get the outcome but the good long-term outcome outcome but the good long-term outcome outcome but the good long-term outcome they may have otherwise gotten. And they may have otherwise gotten. And they may have otherwise gotten. And would you go all in on stocks? All at would you go all in on stocks? All at would you go all in on stocks? All at once? once? once? Yeah. Like dollar-cost averaging versus Yeah. Like dollar-cost averaging versus Yeah. Like dollar-cost averaging versus lump sum? Yeah, like how would you lump sum? Yeah, like how would you lump sum? Yeah, like how would you invest would you go 100% in stocks or invest would you go 100% in stocks or invest would you go 100% in stocks or would you even diversify that? Yeah, would you even diversify that? Yeah, would you even diversify that? Yeah, that's what I'm saying. I I think 100% that's what I'm saying. I I think 100% that's what I'm saying. I I think 100% stocks is personally stocks is personally stocks is personally a portfolio that I'm very comfortable a portfolio that I'm very comfortable a portfolio that I'm very comfortable with. And I with. And I with. And I I'm not I'm not old enough to be I'm not I'm not old enough to be I'm not I'm not old enough to be thinking about retirement, but it's a thinking about retirement, but it's a thinking about retirement, but it's a portfolio that I don't expect to change portfolio that I don't expect to change portfolio that I don't expect to change throughout my personal life cycle. Is throughout my personal life cycle. Is throughout my personal life cycle. Is that how you allocate your personal that how you allocate your personal that how you allocate your personal finances now? You I know you have a finances now? You I know you have a finances now? You I know you have a home, but otherwise, the money you do home, but otherwise, the money you do home, but otherwise, the money you do invest is in the stock market. Yeah, so invest is in the stock market. Yeah, so invest is in the stock market. Yeah, so I've got my home, I have my stock market I've got my home, I have my stock market I've got my home, I have my stock market investments, and I do have a pretty investments, and I do have a pretty investments, and I do have a pretty significant chunk of equity in the significant chunk of equity in the significant chunk of equity in the company that I work for. company that I work for. company that I work for. Yeah. No crypto. No crypto. Any crypto? I No crypto. No crypto. Any crypto? I never touched it. Never touched it. never touched it. Never touched it. never touched it. Never touched it. >> That's not true. I I when I was >> That's not true. I I when I was >> That's not true. I I when I was researching uh Ethereum and Bitcoin, researching uh Ethereum and Bitcoin, researching uh Ethereum and Bitcoin, I remember when that was, it was a few I remember when that was, it was a few I remember when that was, it was a few years ago, I bought $1,000 of each just years ago, I bought $1,000 of each just years ago, I bought $1,000 of each just so I could feel like I was so I could feel like I was so I could feel like I was participating [clears throat] while I participating [clears throat] while I participating [clears throat] while I was learning about it. was learning about it. was learning about it. What do you think of Bitcoin and What do you think of Bitcoin and What do you think of Bitcoin and Ethereum and other cryptocurrencies? Ethereum and other cryptocurrencies? Ethereum and other cryptocurrencies? Uh I I think that they they solved a Uh I I think that they they solved a Uh I I think that they they solved a really interesting problem. really interesting problem. really interesting problem. The that premise of digital cash is The that premise of digital cash is The that premise of digital cash is something that the Cypherpunk community, something that the Cypherpunk community, something that the Cypherpunk community, the kind of libertarian community of of the kind of libertarian community of of the kind of libertarian community of of uh uh uh privacy-focused computer nerds, where privacy-focused computer nerds, where privacy-focused computer nerds, where they were trying to solve this problem they were trying to solve this problem they were trying to solve this problem for for many many years of digital cash. for for many many years of digital cash. for for many many years of digital cash. How do you create digital cash that How do you create digital cash that How do you create digital cash that doesn't require a trusted third party doesn't require a trusted third party doesn't require a trusted third party to mediate transactions? And they they to mediate transactions? And they they to mediate transactions? And they they solved that. Satoshi Nakamoto solved solved that. Satoshi Nakamoto solved solved that. Satoshi Nakamoto solved that in uh that in uh that in uh And that that was cool. And that that was cool. And that that was cool. And he used a bunch of different pieces, And he used a bunch of different pieces, And he used a bunch of different pieces, like you can kind of see in the paper like you can kind of see in the paper like you can kind of see in the paper how he used Adam Back's Adam Back's how he used Adam Back's Adam Back's how he used Adam Back's Adam Back's ideas that he had created to stop email ideas that he had created to stop email ideas that he had created to stop email spam. And it's just how it all came spam. And it's just how it all came spam. And it's just how it all came together. It's unbelievable, fascinating together. It's unbelievable, fascinating together. It's unbelievable, fascinating story. The technology was really story. The technology was really story. The technology was really interesting. interesting. interesting. I think it has become uh an ideological I think it has become uh an ideological I think it has become uh an ideological vehicle, where people who believe that vehicle, where people who believe that vehicle, where people who believe that the world should be a certain way the world should be a certain way the world should be a certain way or believe that government's role in or believe that government's role in or believe that government's role in money should be a certain way, money should be a certain way, money should be a certain way, they can invest in Bitcoin and feel they can invest in Bitcoin and feel they can invest in Bitcoin and feel really good about it. really good about it. really good about it. I think it's it's got that component to I think it's it's got that component to I think it's it's got that component to it. And then the other component that it it. And then the other component that it it. And then the other component that it has to it has to it has to it is that it's a speculative asset. is that it's a speculative asset. is that it's a speculative asset. People will buy Bitcoin because they People will buy Bitcoin because they People will buy Bitcoin because they think it's going to go up. So, it's not a good investment. Is that So, it's not a good investment. Is that what you're saying? I I I personally what you're saying? I I I personally what you're saying? I I I personally wouldn't. wouldn't. wouldn't. We don't allocate to it for our clients We don't allocate to it for our clients We don't allocate to it for our clients at PWL. at PWL. at PWL. We manage We manage We manage quite a bit of money for quite a lot of quite a bit of money for quite a lot of quite a bit of money for quite a lot of people, and we've decided not to touch people, and we've decided not to touch people, and we've decided not to touch it. And I personally don't touch it, so. it. And I personally don't touch it, so. it. And I personally don't touch it, so. I had a phone call actually from a I had a phone call actually from a I had a phone call actually from a friend of mine. She she's very well friend of mine. She she's very well friend of mine. She she's very well known in the UK. known in the UK. known in the UK. And she was um cuz there's lots of wars And she was um cuz there's lots of wars And she was um cuz there's lots of wars going on everywhere, and there's the going on everywhere, and there's the going on everywhere, and there's the Strait of Hormuz is closed, and there's Strait of Hormuz is closed, and there's Strait of Hormuz is closed, and there's Russia-Ukraine, and there's all of this Russia-Ukraine, and there's all of this Russia-Ukraine, and there's all of this stuff going on. She was she was asking stuff going on. She was she was asking stuff going on. She was she was asking me for financial advice on what she me for financial advice on what she me for financial advice on what she should do in such a moment. I don't know should do in such a moment. I don't know should do in such a moment. I don't know why she's calling me. why she's calling me. why she's calling me. I just thought I'll ask you when you I just thought I'll ask you when you I just thought I'll ask you when you come here. But it But it's interesting come here. But it But it's interesting come here. But it But it's interesting cuz my my team found this article from cuz my my team found this article from cuz my my team found this article from 1847, 1847, 1847, which was in a magazine, which was in a magazine, which was in a magazine, and it almost sounds like today. and it almost sounds like today. and it almost sounds like today. The article says this, The article says this, The article says this, "Things are bad all over. It is a gloomy "Things are bad all over. It is a gloomy "Things are bad all over. It is a gloomy moment in history. Not in the lifetime moment in history. Not in the lifetime moment in history. Not in the lifetime of any man who reads this paper has of any man who reads this paper has of any man who reads this paper has there ever been so much grave and deep there ever been so much grave and deep there ever been so much grave and deep apprehension. Never has the future apprehension. Never has the future apprehension. Never has the future seemed so dark and incalculable. seemed so dark and incalculable. seemed so dark and incalculable. In France, the political cauldron In France, the political cauldron In France, the political cauldron seethes and bubbles with uncertainty. seethes and bubbles with uncertainty. seethes and bubbles with uncertainty. England and the English Empire is being England and the English Empire is being England and the English Empire is being sorely tried and exhausted in a social sorely tried and exhausted in a social sorely tried and exhausted in a social and economic struggle. The United States and economic struggle. The United States and economic struggle. The United States is behest with racial, industrial, and is behest with racial, industrial, and is behest with racial, industrial, and commercial chaos drifting, we know not commercial chaos drifting, we know not commercial chaos drifting, we know not where. Russia hangs like a storm cloud where. Russia hangs like a storm cloud where. Russia hangs like a storm cloud on the horizon of Europe, dark and on the horizon of Europe, dark and on the horizon of Europe, dark and silent. It is a solemn moment, and no silent. It is a solemn moment, and no silent. It is a solemn moment, and no man can feel indifference. man can feel indifference. man can feel indifference. Of our own troubles, no man can see the Of our own troubles, no man can see the Of our own troubles, no man can see the end." An apt description of things, very end." An apt description of things, very end." An apt description of things, very apt. And that was on October the 10th, apt. And that was on October the 10th, apt. And that was on October the 10th, 1847. 1847. 1847. A magazine. Now, that very much sounds A magazine. Now, that very much sounds A magazine. Now, that very much sounds like today. It could be today, yeah. like today. It could be today, yeah. like today. It could be today, yeah. So, as we zoom out on the cycles, the So, as we zoom out on the cycles, the So, as we zoom out on the cycles, the big sort of economic cycles, the big sort of economic cycles, the big sort of economic cycles, the geopolitical cycles, geopolitical cycles, geopolitical cycles, my friend that called me and said, my friend that called me and said, my friend that called me and said, "Listen, there's lots of stuff going on "Listen, there's lots of stuff going on "Listen, there's lots of stuff going on in the world. Should I be thinking about in the world. Should I be thinking about in the world. Should I be thinking about my money differently, my investing my money differently, my investing my money differently, my investing strategy? What the hell's going on?" strategy? What the hell's going on?" strategy? What the hell's going on?" What would you say to those people? What would you say to those people? What would you say to those people? Yeah. Well, I I Yeah. Well, I I Yeah. Well, I I as the clip that you read suggests or or as the clip that you read suggests or or as the clip that you read suggests or or tells us, the world has been through a tells us, the world has been through a tells us, the world has been through a lot of crazy stuff, a lot of crazy lot of crazy stuff, a lot of crazy lot of crazy stuff, a lot of crazy times, a lot of wars, a lot of turmoil, times, a lot of wars, a lot of turmoil, times, a lot of wars, a lot of turmoil, a lot of polit- political upheavals. a lot of polit- political upheavals. a lot of polit- political upheavals. And we've come out okay, in general. And we've come out okay, in general. And we've come out okay, in general. It's there there's been pain and It's there there's been pain and It's there there's been pain and suffering, and and not everybody's had suffering, and and not everybody's had suffering, and and not everybody's had good outcomes, but generally speaking, good outcomes, but generally speaking, good outcomes, but generally speaking, here we are. here we are. here we are. And if we think about that that from the And if we think about that that from the And if we think about that that from the perspective of financial markets, perspective of financial markets, perspective of financial markets, stock returns have been positive despite stock returns have been positive despite stock returns have been positive despite all the craziness going on in the world. all the craziness going on in the world. all the craziness going on in the world. There's There's lots of interesting There's There's lots of interesting There's There's lots of interesting charts that overlay charts that overlay charts that overlay news headlines about all the madness news headlines about all the madness news headlines about all the madness going on in the world on top of the going on in the world on top of the going on in the world on top of the stock chart that's just going up. stock chart that's just going up. stock chart that's just going up. Doesn't mean the stocks are always going Doesn't mean the stocks are always going Doesn't mean the stocks are always going to be up. They will go down when when to be up. They will go down when when to be up. They will go down when when things get crazy, like when when this things get crazy, like when when this things get crazy, like when when this war started, stock returns did get a war started, stock returns did get a war started, stock returns did get a little bit negative for a while. They've little bit negative for a while. They've little bit negative for a while. They've since come back, but there will be since come back, but there will be since come back, but there will be volatility in financial markets, volatility in financial markets, volatility in financial markets, volatility up and down day to day. But volatility up and down day to day. But volatility up and down day to day. But in the long run, stock returns in the long run, stock returns in the long run, stock returns they they should continue to be expected they they should continue to be expected they they should continue to be expected to be to be to be positive. So, for your friend, I positive. So, for your friend, I positive. So, for your friend, I I don't know how the assets are set up, I don't know how the assets are set up, I don't know how the assets are set up, um but someone who's globally um but someone who's globally um but someone who's globally diversified, exposed to the stock diversified, exposed to the stock diversified, exposed to the stock market, market, market, they don't have to make changes to their they don't have to make changes to their they don't have to make changes to their portfolios when the world's getting portfolios when the world's getting portfolios when the world's getting crazy. I remember what she said to me. crazy. I remember what she said to me. crazy. I remember what she said to me. She said that she was going to She said that she was going to She said that she was going to remortgage her house remortgage her house remortgage her house because I think she'd paid it down, and because I think she'd paid it down, and because I think she'd paid it down, and she was wondering what to do with that she was wondering what to do with that she was wondering what to do with that money. money. money. She was saying, "Do I just go buy She was saying, "Do I just go buy She was saying, "Do I just go buy another house, or do I invest it in the another house, or do I invest it in the another house, or do I invest it in the stock market?" stock market?" stock market?" Now, my my bias is the stock market, but Now, my my bias is the stock market, but Now, my my bias is the stock market, but I don't know what you What would you say I don't know what you What would you say I don't know what you What would you say to someone I'd want to know why she's to someone I'd want to know why she's to someone I'd want to know why she's mortgaging her house, but mortgaging her house, but mortgaging her house, but given there's a good reason for that, I given there's a good reason for that, I given there's a good reason for that, I would I would probably go in the stock would I would probably go in the stock would I would probably go in the stock market, not into real estate. Do you market, not into real estate. Do you market, not into real estate. Do you think people shouldn't remortgage their think people shouldn't remortgage their think people shouldn't remortgage their houses? houses? houses? It's a tough question. Leverage, kind of It's a tough question. Leverage, kind of It's a tough question. Leverage, kind of like how exposure to the stock market is like how exposure to the stock market is like how exposure to the stock market is good, borrowing money to invest in good, borrowing money to invest in good, borrowing money to invest in positive expected return assets like positive expected return assets like positive expected return assets like like the stock market, like the stock market, like the stock market, is actually kind of a good thing on is actually kind of a good thing on is actually kind of a good thing on paper. paper. paper. Borrowing money generally improves Borrowing money generally improves Borrowing money generally improves long-term expected outcomes. long-term expected outcomes. long-term expected outcomes. But it's stressful. You can You can have But it's stressful. You can You can have But it's stressful. You can You can have bad outcomes where you lose all of your bad outcomes where you lose all of your bad outcomes where you lose all of your money. So, money. So, money. So, should people borrow money to invest? should people borrow money to invest? should people borrow money to invest? Should people mortgage their house to Should people mortgage their house to Should people mortgage their house to invest? That's That's a very personal invest? That's That's a very personal invest? That's That's a very personal question. It's kind of like the question. It's kind of like the question. It's kind of like the stock-bond question. Should you invest stock-bond question. Should you invest stock-bond question. Should you invest in stocks or bonds? Should you invest in in stocks or bonds? Should you invest in in stocks or bonds? Should you invest in stocks with leverage stocks with leverage stocks with leverage or not? It really depends on your goals or not? It really depends on your goals or not? It really depends on your goals and your situation. and your situation. and your situation. Uh but generally speaking, if we just Uh but generally speaking, if we just Uh but generally speaking, if we just look at what what what do the data say look at what what what do the data say look at what what what do the data say about borrowing money to invest? about borrowing money to invest? about borrowing money to invest? It's not It's not a terrible idea. It's not It's not a terrible idea. It's not It's not a terrible idea. One of the things we haven't talked One of the things we haven't talked One of the things we haven't talked about is AI. about is AI. about is AI. And does AI change any of this equation? And does AI change any of this equation? And does AI change any of this equation? A lot of people are worried at the A lot of people are worried at the A lot of people are worried at the moment about losing their jobs. moment about losing their jobs. moment about losing their jobs. Anthropic released a report, who are one Anthropic released a report, who are one Anthropic released a report, who are one of the big AI companies, saying that of the big AI companies, saying that of the big AI companies, saying that entry-level people in particular are entry-level people in particular are entry-level people in particular are going to have a hard time. And I think going to have a hard time. And I think going to have a hard time. And I think they said they're already seeing 13% of they said they're already seeing 13% of they said they're already seeing 13% of entry-level jobs being disrupted because entry-level jobs being disrupted because entry-level jobs being disrupted because of these new AI and AI agents. of these new AI and AI agents. of these new AI and AI agents. I'm to be clear, not a labor economist. I'm to be clear, not a labor economist. I'm to be clear, not a labor economist. Um it's not my area of expertise. Um it's not my area of expertise. Um it's not my area of expertise. I do think though that we look back I do think though that we look back I do think though that we look back through history. I like looking at the through history. I like looking at the through history. I like looking at the history. There have been lots of history. There have been lots of history. There have been lots of technological revolutions that have been technological revolutions that have been technological revolutions that have been major major upheavals to the major major upheavals to the major major upheavals to the entire economy. entire economy. entire economy. Yes. So, ATMs. The ATMs are one of those Yes. So, ATMs. The ATMs are one of those Yes. So, ATMs. The ATMs are one of those fascinating examples. fascinating examples. fascinating examples. People thought that ATMs were going to People thought that ATMs were going to People thought that ATMs were going to wipe out bank tellers wipe out bank tellers wipe out bank tellers because ATMs could do everything the because ATMs could do everything the because ATMs could do everything the bank tellers do, but it was automated, bank tellers do, but it was automated, bank tellers do, but it was automated, and you didn't have to pay a person to and you didn't have to pay a person to and you didn't have to pay a person to do it. So, there was a lot of concern. do it. So, there was a lot of concern. do it. So, there was a lot of concern. And what what ended up happening was And what what ended up happening was And what what ended up happening was very counterintuitive. very counterintuitive. very counterintuitive. It's that the cost of operating a bank It's that the cost of operating a bank It's that the cost of operating a bank branch branch branch decreased because you needed fewer decreased because you needed fewer decreased because you needed fewer people to do all the bank teller stuff people to do all the bank teller stuff people to do all the bank teller stuff cuz you had the ATMs. cuz you had the ATMs. cuz you had the ATMs. And banks opened more branches And banks opened more branches And banks opened more branches because it cost less, and their because it cost less, and their because it cost less, and their customers liked that. And the end result customers liked that. And the end result customers liked that. And the end result was that there were actually more was that there were actually more was that there were actually more bank teller jobs bank teller jobs bank teller jobs at the end of the day. at the end of the day. at the end of the day. The cost of providing the service The cost of providing the service The cost of providing the service decreased, which caused it to decreased, which caused it to decreased, which caused it to proliferate more, provide that service proliferate more, provide that service proliferate more, provide that service to more to more to more people, and it expanded the market people, and it expanded the market people, and it expanded the market instead of instead of instead of shrinking it. shrinking it. shrinking it. Similar story with the Jevons paradox Similar story with the Jevons paradox Similar story with the Jevons paradox and um It's the same concept. and um It's the same concept. and um It's the same concept. What's that story? Where coal became What's that story? Where coal became What's that story? Where coal became cheaper at a time when they used coal to cheaper at a time when they used coal to cheaper at a time when they used coal to ship freight on trains, and the coal ship freight on trains, and the coal ship freight on trains, and the coal engine got more efficient with coal, engine got more efficient with coal, engine got more efficient with coal, coal industry panics, coal industry panics, coal industry panics, "We're screwed." But then what it meant "We're screwed." But then what it meant "We're screwed." But then what it meant is people used trains not just for is people used trains not just for is people used trains not just for shipping freight, but also for other shipping freight, but also for other shipping freight, but also for other things like travel. And people started things like travel. And people started things like travel. And people started traveling on trains because it got traveling on trains because it got traveling on trains because it got cheaper. So, the coal industry actually cheaper. So, the coal industry actually cheaper. So, the coal industry actually boomed in the end. That's it. I have boomed in the end. That's it. I have boomed in the end. That's it. I have thought a lot about this Jevons paradox thought a lot about this Jevons paradox thought a lot about this Jevons paradox idea. And I think it's I think it's idea. And I think it's I think it's idea. And I think it's I think it's going to be true for artificial going to be true for artificial going to be true for artificial intelligence, for sure. I there will be intelligence, for sure. I there will be intelligence, for sure. I there will be lots of other jobs created. And actually lots of other jobs created. And actually lots of other jobs created. And actually companies like mine, if we save money, companies like mine, if we save money, companies like mine, if we save money, we invest it in something else, we invest it in something else, we invest it in something else, which then would would probably create which then would would probably create which then would would probably create jobs, whatever that is. The part that I jobs, whatever that is. The part that I jobs, whatever that is. The part that I sometimes struggle with is the speed sometimes struggle with is the speed sometimes struggle with is the speed of adoption in AI. And then also, when of adoption in AI. And then also, when of adoption in AI. And then also, when you factor in robotics, you factor in robotics, you factor in robotics, like my car in in LA drives itself. And like my car in in LA drives itself. And like my car in in LA drives itself. And I think one of the biggest employers on I think one of the biggest employers on I think one of the biggest employers on Earth is driving in all its forms. But Earth is driving in all its forms. But Earth is driving in all its forms. But then if you look at where housing and then if you look at where housing and then if you look at where housing and supply chains, a lot of those are run by supply chains, a lot of those are run by supply chains, a lot of those are run by people all over the world. And there was people all over the world. And there was people all over the world. And there was a video that I played the other day. We a video that I played the other day. We a video that I played the other day. We can throw it up on the screen, which can throw it up on the screen, which can throw it up on the screen, which shows that in factories in certain parts shows that in factories in certain parts shows that in factories in certain parts of the world now, they're having their of the world now, they're having their of the world now, they're having their labor force wear cameras on their head labor force wear cameras on their head labor force wear cameras on their head showing what they're doing with their showing what they're doing with their showing what they're doing with their hands because they're robots are hands because they're robots are hands because they're robots are ultimately going to replace that labor ultimately going to replace that labor ultimately going to replace that labor force. And I just I I haven't I guess force. And I just I I haven't I guess force. And I just I I haven't I guess this is maybe something that happens in this is maybe something that happens in this is maybe something that happens in history. I haven't been able to think history. I haven't been able to think history. I haven't been able to think about where those people go, and what about where those people go, and what about where those people go, and what they then can go on to do, they then can go on to do, they then can go on to do, especially if it happens in short order. especially if it happens in short order. especially if it happens in short order. Yeah, so I I've heard you I've heard you Yeah, so I I've heard you I've heard you Yeah, so I I've heard you I've heard you ponder this in your other episodes, and ponder this in your other episodes, and ponder this in your other episodes, and I I I agree that the speed of this is I I I agree that the speed of this is I I I agree that the speed of this is likely to be different. As you've said, likely to be different. As you've said, likely to be different. As you've said, it's we're we're talking about the it's we're we're talking about the it's we're we're talking about the internet, so you can deploy these things internet, so you can deploy these things internet, so you can deploy these things at the snap of a finger. And that is at the snap of a finger. And that is at the snap of a finger. And that is different. But where do those people go? different. But where do those people go? different. But where do those people go? This is one of the interesting things. I This is one of the interesting things. I This is one of the interesting things. I don't know. We We don't know. don't know. We We don't know. don't know. We We don't know. And through history, we didn't know. And through history, we didn't know. And through history, we didn't know. Exactly. Through history, it's been the Exactly. Through history, it's been the Exactly. Through history, it's been the same sentiment, where people worry same sentiment, where people worry same sentiment, where people worry about, "Where are these people going to about, "Where are these people going to about, "Where are these people going to go?" And they might be unemployed for a go?" And they might be unemployed for a go?" And they might be unemployed for a while, and there might be hard times, while, and there might be hard times, while, and there might be hard times, but things have worked out. but things have worked out. but things have worked out. And so, two ways to think about it. One And so, two ways to think about it. One And so, two ways to think about it. One way is as a as an individual, what way is as a as an individual, what way is as a as an individual, what should you be doing? We talked about it should you be doing? We talked about it should you be doing? We talked about it earlier, earlier, earlier, uh having complementary skills that make uh having complementary skills that make uh having complementary skills that make you very unique, I think is important. you very unique, I think is important. you very unique, I think is important. Personally, content, as you mentioned, Personally, content, as you mentioned, Personally, content, as you mentioned, has been a big part of that for for me. has been a big part of that for for me. has been a big part of that for for me. Not everybody can necessarily do that, Not everybody can necessarily do that, Not everybody can necessarily do that, but finding those things that you can do but finding those things that you can do but finding those things that you can do when combined better than anybody else when combined better than anybody else when combined better than anybody else in the world, I think is very valuable. in the world, I think is very valuable. in the world, I think is very valuable. And then the other perspective is as an And then the other perspective is as an And then the other perspective is as an investor, how should we think about investor, how should we think about investor, how should we think about this? And there I would come back to this? And there I would come back to this? And there I would come back to again, we have seen many technological again, we have seen many technological again, we have seen many technological revolutions that have changed the world. revolutions that have changed the world. revolutions that have changed the world. They've changed financial markets, They've changed financial markets, They've changed financial markets, they've changed our culture, they've they've changed our culture, they've they've changed our culture, they've changed the way we interact with each changed the way we interact with each changed the way we interact with each other. The world has changed so many other. The world has changed so many other. The world has changed so many times due to technology, times due to technology, times due to technology, and the same cycle has repeated itself. and the same cycle has repeated itself. and the same cycle has repeated itself. Uh there there has been unemployment, Uh there there has been unemployment, Uh there there has been unemployment, there has been social unrest, there has there has been social unrest, there has there has been social unrest, there has been wealth inequality, but this happens been wealth inequality, but this happens been wealth inequality, but this happens every time. Are you expecting the stock every time. Are you expecting the stock every time. Are you expecting the stock market to collapse because there's been market to collapse because there's been market to collapse because there's been a huge overinvestment in artificial a huge overinvestment in artificial a huge overinvestment in artificial intelligence, and at some point the intelligence, and at some point the intelligence, and at some point the investors that put their money into investors that put their money into investors that put their money into these these these sort of speculative sort of speculative sort of speculative AI startups that raised tremendous AI startups that raised tremendous AI startups that raised tremendous amounts of capital at crazy valuations. amounts of capital at crazy valuations. amounts of capital at crazy valuations. At some point through history, doesn't At some point through history, doesn't At some point through history, doesn't the market always contract at some the market always contract at some the market always contract at some point? There's a great book by an point? There's a great book by an point? There's a great book by an economist named Carlota Perez. The book economist named Carlota Perez. The book economist named Carlota Perez. The book is Technological Revolutions and is Technological Revolutions and is Technological Revolutions and Financial Capital. Financial Capital. Financial Capital. And she documents this exact cycle And she documents this exact cycle And she documents this exact cycle throughout history and yes, that's part throughout history and yes, that's part throughout history and yes, that's part of it. Part of it is asset prices of it. Part of it is asset prices of it. Part of it is asset prices getting really high getting really high getting really high and then coming back down. Now, am I and then coming back down. Now, am I and then coming back down. Now, am I worried about a catastrophic market worried about a catastrophic market worried about a catastrophic market collapse? collapse? collapse? I think that's always a concern. I think I think that's always a concern. I think I think that's always a concern. I think that's part of the risk of investing in that's part of the risk of investing in that's part of the risk of investing in stocks. We never know when it's going to stocks. We never know when it's going to stocks. We never know when it's going to happen or what the trigger is going to happen or what the trigger is going to happen or what the trigger is going to be. So, it's not something that you can be. So, it's not something that you can be. So, it's not something that you can do anything about. You need to have an do anything about. You need to have an do anything about. You need to have an asset allocation that you can stick with asset allocation that you can stick with asset allocation that you can stick with even if that outcome is going to even if that outcome is going to even if that outcome is going to materialize. materialize. materialize. And in that book is And in that book is And in that book is does it suggest that the writing is on does it suggest that the writing is on does it suggest that the writing is on the wall for the current economy and the the wall for the current economy and the the wall for the current economy and the way that we're heavily investing in AI way that we're heavily investing in AI way that we're heavily investing in AI and data centers and you know, a couple and data centers and you know, a couple and data centers and you know, a couple of years ago everyone was investing in of years ago everyone was investing in of years ago everyone was investing in crypto crypto crypto and web 3 and web 3 and web 3 and NFTs and all this stuff and all of and NFTs and all this stuff and all of and NFTs and all this stuff and all of the money seems to have been sucked out the money seems to have been sucked out the money seems to have been sucked out of that industry. Really honestly, of that industry. Really honestly, of that industry. Really honestly, sucked out of almost every industry and sucked out of almost every industry and sucked out of almost every industry and into AI. into AI. into AI. Um and you know Um and you know Um and you know >> I remember when DeFi was going to kill >> I remember when DeFi was going to kill >> I remember when DeFi was going to kill banking and finance. banking and finance. banking and finance. >> [laughter] >> [laughter] >> [laughter] >> And that was only a couple of years ago. >> And that was only a couple of years ago. >> And that was only a couple of years ago. In fact, a lot of the developers have In fact, a lot of the developers have In fact, a lot of the developers have moved from that industry into the AI moved from that industry into the AI moved from that industry into the AI industry. But I But I think I do think industry. But I But I think I do think industry. But I But I think I do think about this a lot and I've got a few about this a lot and I've got a few about this a lot and I've got a few startup friends who are getting a little startup friends who are getting a little startup friends who are getting a little bit nervous and are raising a lot of bit nervous and are raising a lot of bit nervous and are raising a lot of money now because they think that in the money now because they think that in the money now because they think that in the next couple of years, maybe in the next next couple of years, maybe in the next next couple of years, maybe in the next 24 months, there's going to be a big 24 months, there's going to be a big 24 months, there's going to be a big market contraction when investors who market contraction when investors who market contraction when investors who invested in invested in invested in some startup idea that had a $100 some startup idea that had a $100 some startup idea that had a $100 million valuation realize that they're million valuation realize that they're million valuation realize that they're losing their money and some domino losing their money and some domino losing their money and some domino usually falls in the market. Some usually falls in the market. Some usually falls in the market. Some catalyst moment means that there's a catalyst moment means that there's a catalyst moment means that there's a contraction. Stock markets go down. It contraction. Stock markets go down. It contraction. Stock markets go down. It gets really hard to raise money. Clients gets really hard to raise money. Clients gets really hard to raise money. Clients who you might be relying on now to pay who you might be relying on now to pay who you might be relying on now to pay your advertising budget start to lower your advertising budget start to lower your advertising budget start to lower their budgets. their budgets. their budgets. And in such a scenario, you're going to And in such a scenario, you're going to And in such a scenario, you're going to want to wish you'd prepared a little want to wish you'd prepared a little want to wish you'd prepared a little bit. Some people are. This is part of bit. Some people are. This is part of bit. Some people are. This is part of the cycle. The cost of capital for the cycle. The cost of capital for the cycle. The cost of capital for bubble companies, we'll call them. I bubble companies, we'll call them. I bubble companies, we'll call them. I don't love the term bubble, but for don't love the term bubble, but for don't love the term bubble, but for companies who are in the industry that companies who are in the industry that companies who are in the industry that becomes the focus of a technological becomes the focus of a technological becomes the focus of a technological revolutions and now we're talking about revolutions and now we're talking about revolutions and now we're talking about AI. The cost of capital gets really low, AI. The cost of capital gets really low, AI. The cost of capital gets really low, which means asset prices get really high which means asset prices get really high which means asset prices get really high and a lot of people want to invest in and a lot of people want to invest in and a lot of people want to invest in that space. But those asset prices are that space. But those asset prices are that space. But those asset prices are not typically sustainable not typically sustainable not typically sustainable and they do tend to come down. and they do tend to come down. and they do tend to come down. Does that mean a total market collapse Does that mean a total market collapse Does that mean a total market collapse or catastrophe or or panic for or catastrophe or or panic for or catastrophe or or panic for diversified investors? No. Oh, is the diversified investors? No. Oh, is the diversified investors? No. Oh, is the writing on the wall? writing on the wall? writing on the wall? I don't think we can say that. If the I don't think we can say that. If the I don't think we can say that. If the writing were on the wall, the way that I writing were on the wall, the way that I writing were on the wall, the way that I view financial markets is that if the view financial markets is that if the view financial markets is that if the writing were on the wall prices would writing were on the wall prices would writing were on the wall prices would reflect that today. Okay. If we thought reflect that today. Okay. If we thought reflect that today. Okay. If we thought market prices were going to drop in the market prices were going to drop in the market prices were going to drop in the future, they would drop today. So, future, they would drop today. So, future, they would drop today. So, so it happens at a time when no one is so it happens at a time when no one is so it happens at a time when no one is expecting it. expecting it. expecting it. >> That's exactly right. >> That's exactly right. >> That's exactly right. So, the writing is never on the wall. So, the writing is never on the wall. So, the writing is never on the wall. That's right. Some some new piece of That's right. Some some new piece of That's right. Some some new piece of information, something changes information, something changes information, something changes and that's what causes prices to come and that's what causes prices to come and that's what causes prices to come down. My brother said something to me. down. My brother said something to me. down. My brother said something to me. He's a very smart person. He's worked in He's a very smart person. He's worked in He's a very smart person. He's worked in sort of investing for the last 15 years. sort of investing for the last 15 years. sort of investing for the last 15 years. He said something to me early in my He said something to me early in my He said something to me early in my career. He said, "Stephen, when you go career. He said, "Stephen, when you go career. He said, "Stephen, when you go to invest in something, assume that the to invest in something, assume that the to invest in something, assume that the price you're paying for that investment, price you're paying for that investment, price you're paying for that investment, so say I'm investing in Facebook stock so say I'm investing in Facebook stock so say I'm investing in Facebook stock at $10 at $10 at $10 is the total accumulation of everything is the total accumulation of everything is the total accumulation of everything everybody on the planet knows about that everybody on the planet knows about that everybody on the planet knows about that company and they've priced in everything company and they've priced in everything company and they've priced in everything the world knows about that company the world knows about that company the world knows about that company today." And he was like, "So, even if today." And he was like, "So, even if today." And he was like, "So, even if you think it's going to go up, that's you think it's going to go up, that's you think it's going to go up, that's also by the way priced into today's also by the way priced into today's also by the way priced into today's price. So, you better price. So, you better price. So, you better know something that no one else knows know something that no one else knows know something that no one else knows when you're thinking about buying an when you're thinking about buying an when you're thinking about buying an investment. I've totally butchered what investment. I've totally butchered what investment. I've totally butchered what he said. No, you You didn't You didn't. he said. No, you You didn't You didn't. he said. No, you You didn't You didn't. He is describing the concept of an He is describing the concept of an He is describing the concept of an efficient market. efficient market. efficient market. An efficient market is a market where An efficient market is a market where An efficient market is a market where prices always and this is a sort of a prices always and this is a sort of a prices always and this is a sort of a theoretical concept. It's not actually theoretical concept. It's not actually theoretical concept. It's not actually true. But in theory, an efficient true. But in theory, an efficient true. But in theory, an efficient market, a perfectly efficient market is market, a perfectly efficient market is market, a perfectly efficient market is a market where prices always fully a market where prices always fully a market where prices always fully reflect all available information reflect all available information reflect all available information including your thoughts about what the including your thoughts about what the including your thoughts about what the price Yeah. might do. Really, if you price Yeah. might do. Really, if you price Yeah. might do. Really, if you trade on those thoughts. So, what are trade on those thoughts. So, what are trade on those thoughts. So, what are you investing in then if it's if you investing in then if it's if you investing in then if it's if the future's already priced in and all the future's already priced in and all the future's already priced in and all the information about the company's the information about the company's the information about the company's already priced in, what are you already priced in, what are you already priced in, what are you investing in? You're investing in investing in? You're investing in investing in? You're investing in discounted future cash flows. discounted future cash flows. discounted future cash flows. Companies produce cash flows. Mhm. They Companies produce cash flows. Mhm. They Companies produce cash flows. Mhm. They earn They earn profits. When you invest earn They earn profits. When you invest earn They earn profits. When you invest in a company, you're buying those in a company, you're buying those in a company, you're buying those expected future profits at a discount. expected future profits at a discount. expected future profits at a discount. That That's called the discount rate. That That's called the discount rate. That That's called the discount rate. This is getting pretty nerdy again, but This is getting pretty nerdy again, but This is getting pretty nerdy again, but that's that's how it works in finance. that's that's how it works in finance. that's that's how it works in finance. What is the What is the value of a What is the What is the value of a What is the What is the value of a stock? It's its discounted future cash stock? It's its discounted future cash stock? It's its discounted future cash flows. Riskier stocks will tend to have flows. Riskier stocks will tend to have flows. Riskier stocks will tend to have higher discount rates. So, you buy this higher discount rates. So, you buy this higher discount rates. So, you buy this asset and now you've got this discounted asset and now you've got this discounted asset and now you've got this discounted bundle of cash flows, which you then bundle of cash flows, which you then bundle of cash flows, which you then hold and you receive the discount rate hold and you receive the discount rate hold and you receive the discount rate as a rate of return as you continue to as a rate of return as you continue to as a rate of return as you continue to hold hold hold the asset. So, a lot of people will the asset. So, a lot of people will the asset. So, a lot of people will invest in Tesla. They'll go, "Listen, I invest in Tesla. They'll go, "Listen, I invest in Tesla. They'll go, "Listen, I I've got a Tesla. It's amazing. I'm I've got a Tesla. It's amazing. I'm I've got a Tesla. It's amazing. I'm going to buy some stock." going to buy some stock." going to buy some stock." What is the fault in my thinking there? What is the fault in my thinking there? What is the fault in my thinking there? In buying Tesla stock? Because I I've In buying Tesla stock? Because I I've In buying Tesla stock? Because I I've got a Tesla. I think it's a great car got a Tesla. I think it's a great car got a Tesla. I think it's a great car and I think they'll do well in the and I think they'll do well in the and I think they'll do well in the future. So, I buy the stock. But they future. So, I buy the stock. But they future. So, I buy the stock. But they It's what we just talked about. That It's what we just talked about. That It's what we just talked about. That information is already included in the information is already included in the information is already included in the price. Every Everybody knows that it's a price. Every Everybody knows that it's a price. Every Everybody knows that it's a pretty good company making pretty good pretty good company making pretty good pretty good company making pretty good cars that are selling really well. And cars that are selling really well. And cars that are selling really well. And that's why it costs $10 today. Right. that's why it costs $10 today. Right. that's why it costs $10 today. Right. Whatever it costs today. Whatever it costs today. Whatever it costs today. >> Whatever the price is, yeah. If you look >> Whatever the price is, yeah. If you look >> Whatever the price is, yeah. If you look at at at the data on professional money managers the data on professional money managers the data on professional money managers who are trying to beat the market who are trying to beat the market who are trying to beat the market most of them don't. most of them don't. most of them don't. And the ones that do, this is a crazy And the ones that do, this is a crazy And the ones that do, this is a crazy part, the managers who do beat the part, the managers who do beat the part, the managers who do beat the market over a period of time market over a period of time market over a period of time don't tend to go on to beat the market don't tend to go on to beat the market don't tend to go on to beat the market in the future. in the future. in the future. And these are professional investors who And these are professional investors who And these are professional investors who are, you know, and then you can look at are, you know, and then you can look at are, you know, and then you can look at these before or after fees. The data are these before or after fees. The data are these before or after fees. The data are actually pretty similar. It's worse actually pretty similar. It's worse actually pretty similar. It's worse after fees, but the distribution is is after fees, but the distribution is is after fees, but the distribution is is pretty similar. So, what's the point in pretty similar. So, what's the point in pretty similar. So, what's the point in a money manager? Well, ones that are a money manager? Well, ones that are a money manager? Well, ones that are trying to beat the market by picking trying to beat the market by picking trying to beat the market by picking stocks and timing the market, I don't stocks and timing the market, I don't stocks and timing the market, I don't think that there is one. That's why I talk about just just buy That's why I talk about just just buy index funds. Buy buy the market. Let index funds. Buy buy the market. Let index funds. Buy buy the market. Let Give Take the market's return. Accept Give Take the market's return. Accept Give Take the market's return. Accept the market's return, which has been very the market's return, which has been very the market's return, which has been very good. And then don't do anything. Don't good. And then don't do anything. Don't good. And then don't do anything. Don't check the thing. Don't check it. check the thing. Don't check it. check the thing. Don't check it. Don't Don't open the app. Lose the Don't Don't open the app. Lose the Don't Don't open the app. Lose the password. I said this about my my password. I said this about my my password. I said this about my my fiance. I said she's really good at fiance. I said she's really good at fiance. I said she's really good at investing because she always forgets the investing because she always forgets the investing because she always forgets the password. And then we 4 years later password. And then we 4 years later password. And then we 4 years later we'll be like, "What, babe, you should we'll be like, "What, babe, you should we'll be like, "What, babe, you should check your investment." And she goes, "I check your investment." And she goes, "I check your investment." And she goes, "I don't know the password." I go, don't know the password." I go, don't know the password." I go, "Fucking." And then we have to do the "Fucking." And then we have to do the "Fucking." And then we have to do the whole password reset thing every whole password reset thing every whole password reset thing every >> [laughter] >> [laughter] >> [laughter] >> And then we open it we go, "Oh, okay, >> And then we open it we go, "Oh, okay, >> And then we open it we go, "Oh, okay, babe, you're rich." babe, you're rich." babe, you're rich." It's probably good. It's probably good. It's probably good. >> And she goes, "Oh, amazing." And then >> And she goes, "Oh, amazing." And then >> And she goes, "Oh, amazing." And then she forgets the password again. And then she forgets the password again. And then she forgets the password again. And then 4 years later we take a look at again at 4 years later we take a look at again at 4 years later we take a look at again at her investments. I like to say you you her investments. I like to say you you her investments. I like to say you you want to focus on the things that you can want to focus on the things that you can want to focus on the things that you can control. control. control. Mhm. You can't control markets. You Mhm. You can't control markets. You Mhm. You can't control markets. You can't control your performance relative can't control your performance relative can't control your performance relative to the market. And tr- trying to to the market. And tr- trying to to the market. And tr- trying to outperform tends to make you worse off outperform tends to make you worse off outperform tends to make you worse off rather than better. But the things that rather than better. But the things that rather than better. But the things that you can control you can control you can control are a lot of the things we talked about. are a lot of the things we talked about. are a lot of the things we talked about. Having having an an appropriate Having having an an appropriate Having having an an appropriate financial plan, having having the right financial plan, having having the right financial plan, having having the right goals set, having an asset allocation goals set, having an asset allocation goals set, having an asset allocation that makes sense for you even if markets that makes sense for you even if markets that makes sense for you even if markets do decline. do decline. do decline. Having emergency savings, tax planning. Having emergency savings, tax planning. Having emergency savings, tax planning. Those are things that you can control. Those are things that you can control. Those are things that you can control. That's what people should focus on. Do That's what people should focus on. Do That's what people should focus on. Do you think women are better investors you think women are better investors you think women are better investors than men? than men? than men? I'm not super good on these data, but I I'm not super good on these data, but I I'm not super good on these data, but I believe what the data say are that women believe what the data say are that women believe what the data say are that women tend to be a little bit more tend to be a little bit more tend to be a little bit more risk-averse. risk-averse. risk-averse. Uh but they tend to be a little bit less Uh but they tend to be a little bit less Uh but they tend to be a little bit less overconfident. overconfident. overconfident. Which I assume gets better results, no? Which I assume gets better results, no? Which I assume gets better results, no? Yeah. I I think women are probably Yeah. I I think women are probably Yeah. I I think women are probably better investors. I'm just going to give better investors. I'm just going to give better investors. I'm just going to give I'm going to give the simple answer I'm going to give the simple answer I'm going to give the simple answer right there. right there. right there. I've just got some numbers here. I've just got some numbers here. I've just got some numbers here. Fidelity said that across 5.2 million Fidelity said that across 5.2 million Fidelity said that across 5.2 million accounts, women beat men with their accounts, women beat men with their accounts, women beat men with their investments. Warwick Business School, investments. Warwick Business School, investments. Warwick Business School, women outperformed men by 1.8% women outperformed men by 1.8% women outperformed men by 1.8% percent per year over a 3-year period. percent per year over a 3-year period. percent per year over a 3-year period. UC Berkeley, men traded 45% more often UC Berkeley, men traded 45% more often UC Berkeley, men traded 45% more often than women leading to annual returns than women leading to annual returns than women leading to annual returns that were 1.4% lower than women's. And that were 1.4% lower than women's. And that were 1.4% lower than women's. And Revolut, which is a big bank founded out Revolut, which is a big bank founded out Revolut, which is a big bank founded out in the UK in the UK in the UK is says that women's investments in the is says that women's investments in the is says that women's investments in the UK outperformed men's by 4% UK outperformed men's by 4% UK outperformed men's by 4% over men. over men. over men. I believe it. Give your money to your I believe it. Give your money to your I believe it. Give your money to your wife. wife. wife. One of those data points specified, but One of those data points specified, but One of those data points specified, but I would assume that a lot of that is I would assume that a lot of that is I would assume that a lot of that is related to overtrading. Yeah. Men tend related to overtrading. Yeah. Men tend related to overtrading. Yeah. Men tend to be overconfident. They tend to trade to be overconfident. They tend to trade to be overconfident. They tend to trade more. They try to pick stocks. They more. They try to pick stocks. They more. They try to pick stocks. They think Tesla stock's going to go up think Tesla stock's going to go up think Tesla stock's going to go up because they like the car. because they like the car. because they like the car. And we're told that the biggest gambling And we're told that the biggest gambling And we're told that the biggest gambling addicts in the world are men as well. addicts in the world are men as well. addicts in the world are men as well. So, it's kind of correlates. For sure it So, it's kind of correlates. For sure it So, it's kind of correlates. For sure it is, yeah. is, yeah. is, yeah. Ben, we have a closing tradition on this Ben, we have a closing tradition on this Ben, we have a closing tradition on this podcast where the last guest leaves a podcast where the last guest leaves a podcast where the last guest leaves a question for the next not knowing who question for the next not knowing who question for the next not knowing who they're leaving it for. they're leaving it for. they're leaving it for. In the diary of the CEO. And the In the diary of the CEO. And the In the diary of the CEO. And the question question question that has been left for you that has been left for you that has been left for you is is is what experiment can you propose what experiment can you propose what experiment can you propose whose outcome could completely whose outcome could completely whose outcome could completely contradict your current beliefs? contradict your current beliefs? contradict your current beliefs? Oh, man. Oh, man. Oh, man. >> [sighs] >> [sighs] >> [sighs] >> Uh an experiment that I could run. an experiment that I could run. If I take my current beliefs as one of If I take my current beliefs as one of If I take my current beliefs as one of the big things that we talked about is the big things that we talked about is the big things that we talked about is markets being efficient and it being markets being efficient and it being markets being efficient and it being quite hard to outperform quite hard to outperform quite hard to outperform the market. the market. the market. Uh I mean, the best the best experiment Uh I mean, the best the best experiment Uh I mean, the best the best experiment that we can run is is trying to beat it. that we can run is is trying to beat it. that we can run is is trying to beat it. People have done that. But it's being People have done that. But it's being People have done that. But it's being run all the time. Isn't there a story in run all the time. Isn't there a story in run all the time. Isn't there a story in the Psychology of Money by Morgan Housel the Psychology of Money by Morgan Housel the Psychology of Money by Morgan Housel where like was it Warren Buffett bet where like was it Warren Buffett bet where like was it Warren Buffett bet someone? Yeah, Warren Buffett bet Ted someone? Yeah, Warren Buffett bet Ted someone? Yeah, Warren Buffett bet Ted Ted Seides, who we've actually had on Ted Seides, who we've actually had on Ted Seides, who we've actually had on our podcast. our podcast. our podcast. He bet him that He bet him that He bet him that his his his index fund portfolio, which I believe index fund portfolio, which I believe index fund portfolio, which I believe was just the S&P 500, could outperform was just the S&P 500, could outperform was just the S&P 500, could outperform any hedge fund portfolio that Ted any hedge fund portfolio that Ted any hedge fund portfolio that Ted picked. picked. picked. And they had a specific timeline. It was And they had a specific timeline. It was And they had a specific timeline. It was 10 years, wasn't it? Something. Yeah. 10 years, wasn't it? Something. Yeah. 10 years, wasn't it? Something. Yeah. And then they were going to donate the And then they were going to donate the And then they were going to donate the an amount of money at the end of the an amount of money at the end of the an amount of money at the end of the period. period. period. And Ted lost the bet. And Ted lost the bet. And Ted lost the bet. Warren Warren won. But that that was one Warren Warren won. But that that was one Warren Warren won. But that that was one of those instances where the world kind of those instances where the world kind of those instances where the world kind of got to see, hey, this this index fund of got to see, hey, this this index fund of got to see, hey, this this index fund thing Buffett has been a big advocate thing Buffett has been a big advocate thing Buffett has been a big advocate for index funds. for index funds. for index funds. But that was a big example where But that was a big example where But that was a big example where I think a lot of people were exposed to I think a lot of people were exposed to I think a lot of people were exposed to that idea. that idea. that idea. Where do people find you? You know, I've Where do people find you? You know, I've Where do people find you? You know, I've got your YouTube channel here, Ben got your YouTube channel here, Ben got your YouTube channel here, Ben Felix, which I'll I'll link below for Felix, which I'll I'll link below for Felix, which I'll I'll link below for anyone that wants to continue to follow anyone that wants to continue to follow anyone that wants to continue to follow you on YouTube. Is there anywhere any you on YouTube. Is there anywhere any you on YouTube. Is there anywhere any any other resources that we should any other resources that we should any other resources that we should direct people to? Yeah, another place direct people to? Yeah, another place direct people to? Yeah, another place where I post actually a little bit more where I post actually a little bit more where I post actually a little bit more frequently with longer form stuff is the frequently with longer form stuff is the frequently with longer form stuff is the Rational Reminder podcast. Rational Reminder podcast. Rational Reminder podcast. People can check me out there. And then People can check me out there. And then People can check me out there. And then I do have some interesting tools for the I do have some interesting tools for the I do have some interesting tools for the rent versus buy calculation. We have a rent versus buy calculation. We have a rent versus buy calculation. We have a goal-setting app. I don't think it's up goal-setting app. I don't think it's up goal-setting app. I don't think it's up yet, though. And we've got some other yet, though. And we've got some other yet, though. And we've got some other really interesting tools on really interesting tools on really interesting tools on the PWL Capital website. PWLcapital.com. the PWL Capital website. PWLcapital.com. the PWL Capital website. PWLcapital.com. I'll link all of that below for anyone I'll link all of that below for anyone I'll link all of that below for anyone that's interested. that's interested. that's interested. And the Rational Reminder Podcast, And the Rational Reminder Podcast, And the Rational Reminder Podcast, rationalreminder.ca/podcast. And your YouTube channel will be linked And your YouTube channel will be linked below, as well. below, as well. below, as well. Awesome. Thank you so much, Ben. Thank Awesome. Thank you so much, Ben. Thank Awesome. Thank you so much, Ben. Thank you for doing what you do, because um you for doing what you do, because um you for doing what you do, because um finance is such an important part of our finance is such an important part of our finance is such an important part of our life, and I think a huge percentage of life, and I think a huge percentage of life, and I think a huge percentage of the population, for whatever reason, the population, for whatever reason, the population, for whatever reason, choose to avoid the subject altogether, choose to avoid the subject altogether, choose to avoid the subject altogether, cuz it causes a little bit of anxiety. cuz it causes a little bit of anxiety. cuz it causes a little bit of anxiety. But also, we just don't get taught about But also, we just don't get taught about But also, we just don't get taught about finance in school, which I think is a finance in school, which I think is a finance in school, which I think is a great shame. And in in my case, you great shame. And in in my case, you great shame. And in in my case, you know, it wasn't until I destroyed my know, it wasn't until I destroyed my know, it wasn't until I destroyed my credit rating, my credit score, um that credit rating, my credit score, um that credit rating, my credit score, um that I started to figure out what finance I started to figure out what finance I started to figure out what finance was. And by then, was. And by then, was. And by then, kind of like brushing your teeth, I'd kind of like brushing your teeth, I'd kind of like brushing your teeth, I'd done a lot of damage. And so, since done a lot of damage. And so, since done a lot of damage. And so, since then, from doing this podcast, and being then, from doing this podcast, and being then, from doing this podcast, and being the smart people like you that are good the smart people like you that are good the smart people like you that are good at demystifying complex things, and but at demystifying complex things, and but at demystifying complex things, and but also, in your case, that use academic also, in your case, that use academic also, in your case, that use academic research as the basis for the claims research as the basis for the claims research as the basis for the claims they're making, it has helped to turn they're making, it has helped to turn they're making, it has helped to turn the lights on for me. the lights on for me. the lights on for me. And in this domain, I think control, or And in this domain, I think control, or And in this domain, I think control, or like understanding and information is like understanding and information is like understanding and information is power. Really, like knowledge is power. power. Really, like knowledge is power. power. Really, like knowledge is power. And a lot of people are disempowered, And a lot of people are disempowered, And a lot of people are disempowered, because they don't have the knowledge, because they don't have the knowledge, because they don't have the knowledge, and they kind of they're on that sort of and they kind of they're on that sort of and they kind of they're on that sort of roller coaster of their life roller coaster of their life roller coaster of their life circumstance, and they don't feel like circumstance, and they don't feel like circumstance, and they don't feel like they have control, especially they have control, especially they have control, especially considering that the world feels so considering that the world feels so considering that the world feels so uncertain right now. So, thank you for uncertain right now. So, thank you for uncertain right now. So, thank you for doing what you do, Ben. Really, really doing what you do, Ben. Really, really doing what you do, Ben. Really, really appreciate it, and I hope to speak to appreciate it, and I hope to speak to appreciate it, and I hope to speak to you again sometime soon. Thanks so much. you again sometime soon. Thanks so much. you again sometime soon. Thanks so much. YouTube have this new crazy algorithm, YouTube have this new crazy algorithm, YouTube have this new crazy algorithm, where they know exactly what video you where they know exactly what video you where they know exactly what video you would like to watch next, based on AI would like to watch next, based on AI would like to watch next, based on AI and all of your viewing behavior. And and all of your viewing behavior. And and all of your viewing behavior. And the algorithm says that this video is the algorithm says that this video is the algorithm says that this video is the perfect video for you. It's the perfect video for you. It's the perfect video for you. 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