More Money Podcast - 192 Planning for a Successful Retirement - Larry Swedroe, Author & Director of Research for Buckingham Strategic Wealth

Episode Date: April 10, 2019

I don’t know why exactly, but lately I’ve been hearing from my millennial clients their big concern about not being able to afford retirement. I’m talking 20 and 30 years olds freaking out because they have no idea how they’ll ever be able to save up $1 million (or most likely more) for retirement, plus pay of their student loans, buy a home, start a family, and just simply live! So, I thought I would bring on a retirement expert who can shed some light on the most important things we all need to know about retirement. My guest for this episode is Larry Swedroe, the author of Your Complete Guide to a Successful and Secure Retirement, as well as the director of research for Buckingham Strategic Wealth and the BAM Alliance. Here are a few things we discussed in this episode. What People Forgot to Plan – What to Do in Retirement Most people focus on the money part. How much do I need? How should I invest to reach that number? Will it be enough? But really, you should start by outlining what you want to do when you’re actually retired. How do you want to fill your days? What’s your exit strategy from the workforce? Are you going to do a full-stop retirement or ease into retirement by going part-time or consult? Before testing out any retirement calculator, define what your retirement will look like first. Planning to Live Longer Than 20 Years in Retirement Another concern I often hear is that we’re all living longer. Many of us will live until 100! So if we retire at 65 and live until 100, that’s 35 years of retirement we need to prepare to have income for. That might make your palms sweaty, but it’s actually fairly simple math to figure out how to afford a long retirement. Larry suggests taking the number of years you plan on being retired for and multiplying it by the gross annual income you’ll need to live off of in retirement. Then, figure out how inflation will come into play, and that’s your number! How to Be a Savvy Investor Larry shared some amazing pieces of wisdom when I asked him about how we all can be savvy investors. Here are his top tips: Make sure you’re only spending money on things that are important to you. Save as early and as often as possible. Make your savings automatic through auto-debits and auto-withdrawals to your savings and investment accounts. Read the book Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler & Cass R. Sunstein to learn how to nudge yourself into doing the right things Invest in low cost Index funds or index ETFs Avoid investment products sold by insurance companies and Wall Street investment brokers as they’ll be more expensive and most likely won’t outperform index funds. Don’t work with any financial profession who earns a commission when working with you. Diversify your portfolio to include more foreign equities and fixed income. Don’t focus solely on domestic stocks and bonds (just Google what happened in Japan). Don’t mistake the home you live in for a real estate investment. If you live in it, it’s not an investment. Once you sell it, it is. Be careful with real estate investing (just look at what happened and is happening in the U.S.) For full episod show notes, visit https://jessicamoorhouse.com/192 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to episode 192 of the Mo Money Podcast. I'm your host, Jessica Morehouse, and welcome back to the show for a fresh new episode. This episode is going to do a deep dive into something that I've been, a topic of personal finance that I've been getting really into lately, probably because I'm getting older, and I'm talking about retirement planning. Yay, I know. It sounds like such a not super exciting topic for us kind of young, you know, millennials. Super important, though, because guess what? We all at some point in our lives have to stop. You know, we have to retire, maybe not stop working exactly. I don't necessarily believe you have to do that. But at a certain point, we kind of need to leave the traditional

workforce and kind of do something else. And we need to have retirement savings to be able to afford that next phase in our lives. And that is why I've brought the expert to talk to me about retirement on the show. I have Larry Suidro. He's the author of Your Complete Guide to a Successful and Secure Retirement. And he's also the director of research for Buckingham Strategic Wealth and the BAM Alliance. And he also holds an MBA in finance and investment from New York University. He is a very knowledgeable guy when it comes to investing, which is why I wanted him on the show. He just kind of gives it to you straight. And yeah, we're going to have a really good time in this episode. You're going to love it.

But before I get to that interview with Larry, here's just a few words about this episode's sponsor. This episode of the Mominy Podcast is sponsored by the Scotia Momentum Visa Infinite Card. What kind of cash back are you getting with your credit cards? Not sure? Let's review and see if you could be earning more. The Scotia Momentum Visa Infinite card is offering new cardholders 10% cash back on everyday purchases for the first three months, up to $2,000 in total purchases,

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Thanks, Larry, for joining me on the Momente podcast. It's my pleasure, Jessica. Yeah. So you recently came out with a book with your co-author Kevin Grogan called Your Complete Guide to a Successful and Secure Retirement. Let me know why you both wanted to come out with this book, why you thought it was really important for right now to come out with this kind of information for readers. Well, I'd actually always planned to get around to writing this book. I'd written several other only guides. My first book was an only guide to winning investment strategy, focusing on just the pure investment side of it and in an accumulation phase type of thinking. Then I wrote the only guide you'll ever need to winning bond strategy.

The first book had focused on equities. And the third book was the only guide you'll Ever Need to Alternative Investments. So things other than stocks or bonds generally. And then I wrote The Only Guide You'll Ever Need for the Right Financial Plan, which was important to address a book that dealt with the withdrawal phase on the investment side. But also in my 25 years of experience working with people, a lot of high net worth people, I found that they didn't plan for a meaningful life in retirement. So I thought that was an important issue. And there are lots of issues beyond investing, like when do you take Social Security? How do you deal with Medicare? There are special issues women face, making it more challenging on average for them. And now as we're living a lot longer,

we need to deal with this, a good risk of longevity risk and all of the issues related to that, which includes the risk of cognitive decline and need for long-term care. So there was no really good book that looked at all of these things or no even book that looked at them. There are books that look at estate planning or when to take social security or those types of things, but

none that was a comprehensive look at all these issues. No, and I think you're right because actually recently I was looking for a book to kind of learn more about retirement planning. Although in my personal life, obviously it's decades away, but it's something that I, you know, my parents are, you know, on the horizon of retirement. And so I want to, you know, learn more about that to help them kind of, I don't know, answer some questions or navigate that. Like they obviously, and I think this is kind of what you're getting at. A lot of people just focus on saving up enough for retirement, but most people don't actually think about what's that life like in retirement. They may think a little bit like, A lot of people just focus on saving up enough for retirement, but most people don't actually think about what's that life like in retirement.

They may think a little bit like, I want to travel more, or I'm going to finally focus on writing my memoirs or making my art, whatever it is. But those are, as I know, just with life, you need to have a very kind of structured plan when basically have all the, when basically the opportunities are limitless. Otherwise you, it just doesn't work. I kind of just compare it to when I decided to quit my corporate job to work for myself. It's like, I had a fairly structured plan, probably not as structured as it should have been. But basically, I was quitting my job to get free time to do whatever I wanted. Obviously, I had to earn an income.

But I think a lot of people that perceive retirement or even early retirement is really just about, I want to leave that job and not work. They don't really think about, but what are you going to do now? Well, there's a, an old saying, uh, that those who plan to fail, fail to plan. Uh, and, uh, I, what's interesting is that while nobody, uh, as you demonstrated would start a business without thinking about writing a plan, thinking about all the issues, uh, so many. So many people don't plan for a meaningful life in retirement. And there's a lot of research and good books on this issue. I had help writing this chapter by an author, Alan Spector, who wrote a wonderful book, Your Retirement Quest. And what we talk about in the chapter is that most people, or at least many, get a large

percentage of their fulfillment in life from their work. They get it from a sense of accomplishment. They get their social connections from being at work and their intellectual challenges as well. When that ends, if you don't have other ways to get social connections and intellectual stimulation to give your life meaning, your life can fail. And what, you know, we see that in the data in two ways. One, the highest suicide rate in the United States, I would have guessed were teenage girls. And it turns out it's actually dramatically higher for retired men. And that's certainly my generation. Anyway, the next generation where women are much more in the workforce, it might be both sexes. And the second thing we're finding is that the fastest cohort of divorces is this silver divorce rate because the men often don't have a plan for their life.

And now their wife has found this husband around her all 24 hours a day when she said, I married you for better or worse, but not for lunch. And you have to plan both parties for this meaningful life, what you're actually going to do, or you're likely to fail. So here's a good question. And this is something that me and my husband talk about. We're about the same age. He's a year older. And we've kind of always assumed that we'll probably retire at the same age or maybe me at 64, him at 65. But I mean, do most couples retire at the same time or is it usually one after the other? And what are the kind of, I guess, effects or consequences of that? Kind of like you mentioned, if someone retires before their spouse, it may kind of complicate their relationship. It's a whole new relationship. Yeah, that's why you have to have a plan and you should even practice it. That's what Alan's

back there talks about. You should think about what your ideal day looks like. And it even gives you a worksheet by the hour. Okay, from eight to nine, I'm going to go take a yoga class. And then I'm going to, you know, work for three hours at the hospital as a candy striper. And then I'm going to go and play bridge in the afternoon or whatever your day looks like. We find that there's, at least my own experience, is there is no one pattern about when people retire. But I can say this, I'm seeing more and more people deciding not to retire from their work. They may cut back their hours a great deal over time. We actually just had a partner retire finally at age 80, and he's still doing some consulting work for us. But over time, he cut his hours from five days a week to four to three

and then 20 hours a month wanting to keep those social connections and the intellectual stimulation. And then he was doing some charitable work on the other time wanting to give back. So everyone's an individual situation, but I think you're going to see more and more of this slow departure from the workforce and continuing to work longer, partly because we're living a lot longer. When I was growing up,

I hardly knew anyone who was over 75. And today a 65 year old couple has a second to die life expectancy of 24 years. So you have to plan a long life in retirement. And we talk about that book, which means you need to have a larger pool of money because you're living longer. And by the way, when you live longer, you increase the risk of needing long-term care. Yeah. And I feel like when people hear that, because I've been doing a lot of research and that's definitely what I've been finding too, people are staying in the workforce longer, which is, I totally understand that. And I feel like

that's probably what I'll continue to do. If I continue to be self-employed, I can't see myself really, maybe I'll just cut back. But I think the idea of just like, all right, I'm retired. I'm no longer working at all. I think that is kind of shifting, especially with millennials, because we're used to our side hustles and just, you know, working. And, you know, like you mentioned, work is a big part of our lives. It's our identity. It's our kind of social group.

It gives us, you know, things to do and feel, you know, fulfilled. It's also difficult for millennials seeing all these baby boomers though, not leave the workforce. Cause I think that's the big shift too, is because that's different than past generations, we're finding it difficult to, well, it's just like the workforce is very different for us before the idea was like, once they retire, then, you know, everyone, the Gen Xers kind of take those spots. And then we take the Gen Xer spots, not so much anymore. That's a whole other conversation. But I feel like people are very, getting very, I think, kind of afraid or just concerned of this idea that we're living longer, which is great. However, it's like, how on earth am I going to find more money? More, you know, most people are concerned just to figure out how can I have a

big pool of money to survive from 65 to 85, but now people are living to 95 or 100. How do I have enough money to fund another 15 or 10 years in retirement? What are some of the things that people are doing to make sure that they can afford that extra decade in retirement, if not more? Well, you had a lot of questions. Yeah, I know. Let's focus on the last one. Yeah, well, I'm 67 myself, and I haven't needed to work for now 25 years having helped build the company and sell it. But what my view has always been is the day I feel I'm going to work will be the day I retire from it. I get great fulfillment intellectually from the challenge of reading the academic research on investing and then educating investors on the latest knowledge

we gain and helping people in their lives. I get emails from people all over the world who read my blogs and books thanking me for helping them. That provides great satisfaction. So that's number one. So I have told my company I plan on working full time, if you will, till age 72. And then I can envision cutting back my hours. Although I'm lucky I get to work out of home most of the time and go into the office. So I'm very flexible there. So that's one. The fact that you're living longer does mean that you do need a significantly larger pool of money. And while there are some more sophisticated planning tools, a good rule of thumb, I would tell you for somebody at any age, you need to be safe. And this is a conservative

number. It doesn't mean a different number won't end up working. But to me, you want 90, 95% odds of success because the cost of being alive and not having any assets is unthinkable. So a good rule of thumb today is you need, say, 30 times the amount of cash flow you need to maintain your spending at a reasonable, acceptable lifestyle. So let's say you decided you could get by on $60,000 a year and you were going to get 30 from Social Security. You need 30 more. So you need 30 times that or roughly a million or $900,000. That's the number you need to shoot for. And if you have that today, well, then you could retire and likely be OK as long as you kept a reasonable equity allocation in the kind of 40 to 50 percent kind of range. So that's kind of a ballpark way to think about it.

Just a good starting point. So in that equation, does that also take into consideration inflation, things getting more expensive? Well, that's why I said today, you need it in today's dollars, right? One other thing that we caution in our book, we talk about in the introduction, this idea of a four horsemen of the retirement apocalypse, your cohort is facing a much more difficult task than mine. And that's because we had some big tailwinds in our favor. If you go back 90 plus years where we have data, the traditional 60% stocks, 40% bond portfolio has earned about 8.5%. Over the last 36 years, however, that's what I would call this golden era, it's earned more like 10.5%. That's because stock valuations went way up and bond yields went way down. So both had a tailwind. Those can't be repeated.

Today, most we think and most financial economists think a typical 60-40 portfolio is only going to generate more in the neighborhood of 5% or so. So that means you need a bigger pool of money. You're living longer. That means you need a bigger pool of money. Your risk of long term care is going up. And lastly, what we on that are close to zero. In just 14 more years, Social Security will no longer be able to meet its full obligations. It doesn't mean it will be bankrupt, but they'll only be able to pay out 75%. And so that means you shouldn't be counting on beyond that more than 75 percent so that's another issue uh facing uh people who are going to be retiring yeah yeah and for anyone listening to you it's like obviously you're from the u.s so you're talking about american social security if i'm canadian so we've got the canada pension plan which is a bit different and uh it's supposed

to be around for the next 80 years. So if you're panicking, you're Canadian. It's a bit of a different situation. But that's very important for my American listeners to take note of and to maybe take a look at. And I feel like in general, too, when you are retirement planning, when you are considering any kind of like Social Security or in Canada, we have the Canada Pension Plan and Old Age Security. Those should be looked at as bonuses or ways to kind of supplement your retirement. They should never be something that is in your mind kind of guaranteed. It's like at the end of the day, you need to take care of yourself with your retirement savings.

Yeah, I think you don't want to overdo it. Well, people are panicking in the U.S. I'm not going to get any Social Security. I think that's kind of being too conservative and would force you to cut your spending and your lifestyle down because you can't spend as much because you need to save more. By the way, Jessica, I have some friends at a firm in Canada, PWL Capital. Oh, yeah. They took a book that I wrote called Think, Act, and Invest Like Warren Buffett and created a Canadian version of it. Oh, awesome.

And they have just agreed to spend the next year turning my new book and creating a Canadian version to address all of the issues that are different for Canadians. So hopefully in a year or so, that book will be out there for your Canadians. Awesome. Yeah. I feel like it's one of the things that us Canadians have to deal with is we get a lot of American content, which is great. I think it's important to know because you are neighbors. And so it's important to know what's going on over there. But sometimes there's so much financial information from the US. A lot of us get confused as to like, wait, do we have a 401k or is that not what we have? It's like, that's not what we have. That's what we have in the US. So I'm glad your book is coming out soon in Canada for us Canadians to kind of talk about

the differences. That's awesome. So I want to talk a little bit about, because we've obviously talked about like, we need more money, especially as younger people, we need more money for retirement. We're living longer. And, you know, we're not, things are expensive, depending on where you live. I live in Toronto, it's very expensive. What can people do, I guess, in terms of like actually investing or diversifying their portfolio so they can make sure that they can afford, you know, a 30 plus year retirement? Is it about, I mean, for me, I'm personally, I'm a big fan of, you know, the indexing strategy that makes sense to me, but should people be looking at other things like, oh, well, make sure you, you know, real estate invest or what are kind of some of your suggestions for someone, a younger person coming to you being like, what should I do so I can afford this retirement? I'm kind of freaking out. found to help people. Number one is you really need to focus on what's the difference between needing and wanting spending. So, you know, the good things in life, once you have enough money,

for example, are either free or cheap. And by that enough, I mean, you have enough money to put food on the table, have shelter, you know, eat out once in a while, whatever it might be, pay for your health care, those things. Once you have that, whether you play golf at Pebble Beach Golf Course and let's say, of course, you're a thousand bucks for a round versus 20 bucks at your local municipal golf course, you still get the same exercise. You're walking under the same beautiful sun. You have the same social conversations. I get no greater joy in life than reading a book to my grandkids or taking a walk with my wife around our local park, which has a beautiful lake and walks through the woods. those things don't cost anything. So the problem is if you convert things that are desires nice to have, like if you're, you have $10 million, you want to go play golf at Pebble Beach, great, you can afford to do it.

But if you don't, do you really need to fly to Las Vegas or buy tickets to the Super Bowl or, you know, when you can watch the game on TV? So whether it's buying a new car every three years or every 10 years, that's the kind of discipline people really need to think through. Too many people focus on spending on things that aren't important in life, it's experiences. We know that matter far more than things. So that's the first thing we really teach people to think about is not to convert desires into needs, that the more you do that, the bigger pile of money you need and the bigger the risk you have to take because you just have to own more equities. And that also means you've got to cut your spending back more today. And spending today is more valuable than spending the 20 years. So number one, make sure you're only spending things

on things that are really important to enhance the quality of life. Now, that's different for every person, but that's number one. Number two, you want to save as early and as often as possible. People don't do that. You want to stay out of debt, rip up those credit cards, never buy something unless it's an absolute emergency on a credit card unless you can pay for it. Those kinds of things. And when you get a raise in pay, go with an automatic pay yourself. So commit to, for example, you're going to save 50% or 80% or whatever it is of that raise. There's a wonderful book called Nudge by behavioral economist, Nobel Prize winner, Richard Thaler, how we can nudge ourselves into doing the right things.

I like that. So that's a recommendation. A third thing, Wall Street, and using that U.S. term, loves to rip people off with high expense products that don't add value. So focus on lower cost investing, which generally means passive strategies like index funds, index ETFs and others, and avoid the products sold by Wall Street and insurance companies and anyone else who's getting a commission. There's no reason to ever work with an advisor who gets paid on a commission because you know they don't have your interests at heart.

So that would be a third. Another thing is to diversify globally. It's really important to do that. We don't know how our country will fare. So the typical problem around the world is we have a home country bias. So U.S. investors typically have 90% of their money in the U.S. That's turned out to be pretty good for the last 90 years, but it may not be going forward. Japanese investors do the same thing. French investors, German, UK, Canadians probably. And so we want to make sure we diversify because the next

30 years in whatever country we're in could look like the last 30 for Japan, which was at the top of the world in 1990, dominating Japanese equities had, I think, had greater value than U.S. equities at that point, despite the much smaller economy. And Japanese Nikkei Index was at roughly 40,000 in 1990. It's a little over 20,000 today. That's almost 30 years later with negative returns. So that's why we want to diversify globally. And the last thing I'll touch on you asked about is real estate, real estate, unless you're in the business of real estate. To me, you a home should only be thought of as a utility, not an investment. At least I can speak in the U.S. on average, the return to real estate has not been good, basically about zero real rate of return.

But of course, there are pockets. If you lived in California, certain places on the coast, New York City, it's done better, but we don't know the future. I think people should not buy more home than they need and then invest the rest. Yes. So many great nuggets that you just spit fired out of there. I love that. Those are great. And I completely agree with all of them. Those are great pieces of advice. You touched on earlier that women specifically have kind of different struggles or issues than men when it comes to retirement planning. What do you mean by that? What are some things that we face that men don't face that we need to prepare for or

put some plans in place so we you know, we can ease it up a bit. Yeah. Well, there's a, we identify 12 issues. Yeah. One is because they tend to take breaks from the workforce to have children. And also now even in my cohort, they're having to take, because they usually bear the burden, not always, but the burden of taking care of elderly parents. So those breaks from the workforce mean they tend to earn less. Second, women live an average about two plus years longer than men. So that means you need a larger pool of money. They not only earn less because of taking breaks in the workforce, but that means you're earning fewer years of earned income. They tend to start investing later for whatever reason we don't know,

but that's true. They are also at least, it may be a good thing, but they tend to be less confident about their personal investing and finance skills. Men are overconfident and that leads them to taking too much risk. Women actually make better investors because they're not overconfident. So they tend to trade less, be a little more conservative. They actually outperform men. So that gives them a little advantage. It's not that they're better stock pickers or better fund pickers. They pick the same lousy stocks men pick, but that they just trade less and therefore keep more of their money and the brokers get less. Another key point is, unfortunately, when women get divorced,

they tend to remarry less often for whatever reason. One might be there's a smaller pool of men eligible, especially as we age. And that means because it's more expensive to live as one than two, that becomes a problem. And women are targeted more by crux and are therefore more subject to elder abuse. They're viewed as maybe less sophisticated, knowledgeable, and that targeting is there. So you need to make sure you have the proper financial documents in place to protect you. Yeah. So it sounds like, and you touched on a couple of things, like for instance, the financial confidence issue is a real issue I found with a lot of women, even myself.

And I can't really pinpoint where it comes from because when I do talk to men, they are overly confident, even though most of the time they don't know what they're talking about or their facts aren't right. And all of us completely agree with that statement. Yeah, yeah, exactly. And so – and women on the other side, they're very, they are very cautious. They don't want to make a mistake. They want to do the right thing. They want, you know, a lot of us are very, you know, perfectionists. And so I think because of that, we start investing later because we want to make sure that maybe

we've focused on paying off debt or we just have enough cash in the bank for emergency funds. And then investing is kind of that last, like, oh, we'll get to that. But we're kind of terrified of losing all of our money. Who knows? I think there's a lot of different explanations for that. But I think that's really important to bring up. And something that hopefully we can... This is why I have the podcast is to educate everyone, but also women so they can feel more confident and make these decisions to start investing young. Because as you mentioned earlier, everyone will tell you that who knows

anything about investing. It's like one of the key things to reach your financial goals quicker is to invest as soon as possible. And had I known what I know now, man, I would have started investing at 18 or 16 when I started earning money. But you mentioned, yeah, a lot of really interesting things. I thought the elder abuse was actually very interesting because it's something that I've never really thought about. You hear about it in the news and you're like, oh, that would never be me or I don't know anyone in my personal life that has experienced that. But I actually went to a conference back in the fall and they talked about that specific thing, just how people can get defrauded with their credit cards and all the different stuff. And it's a real issue. And you kind of mentioned that the one thing to fight against is having your kind

of ducks in a row, so to speak. What specifically do you mean by that? Yeah, well, first thing, you know, just anyone who uses the internet today and gets emails, they're subject to all kinds of scams, these calls, you know, about your in the US, we get the IRS is coming after you, you know, you haven't paid your taxes, all kinds of scams that happen. And the elderly tend to get scared. And instead of calling the police and asking about it, they give in. And there's all kinds of abuses. We see it all the time. So number one is it's important to have what are called in the U.S. anyway, durable powers of attorney for financial and health matters. And so that when, if anything happens to you, you have some trusted family member or a professional investment advisor, somebody who you can trust, who can take over your skills. It might be an accident you're in or your health deteriorates.

You also need to have somebody who's prepared to challenge you because when we experience cognitive decline, Alzheimer's, dementia, we tend to resist losing control. Obviously, most people don't want to give up control of their lives. So you need to have, for example, in my case, I have written in my documents that my spouse or any one of my children has the right to demand that I go to a doctor and get tested. And if the doctor says I can't pass that test, they take over complete control of the banks, brokerage statements, everything. That's the kind of documents you need in place. You need to make sure that your parents, in your case, can't be abused by people as well. So you want to make sure they've got good financial advice either from you or from a professional who can protect them. Those are some of the things.

But I want to touch on one other issue. At least in the U.S., and I'd be willing to bet it's likely true in Canada, we are poor investors. And it's not because we're stupid. It's because the education system has totally failed the American public. Unless you get an MBA in finance today, it's highly unlikely you've ever even taken a single course in capital markets theory. So how can you be expected to understand the world of investing and whether somebody, they're recommending a stock or a bond or investment strategy, even knows what the hell they're talking about. That's a real problem. I

think I'm fairly intelligent. I graduated number one from one of the top MBA programs in the country, but I'm totally ignorant about nuclear physics. My wife and three daughters tell me women's another subject I'm ignorant about. But it doesn't make me stupid. And the problem is most Americans would rather watch some reality TV show than spend time educating themselves, reading books like mine or those of John Bogle, who unfortunately just passed away, which educate them about investing. And I've written 16 books now to help people get educated so they can protect themselves from Wall Street and corrupts who are looking to basically transfer money from your pockets to theirs. No, absolutely. And yeah, that is the same problem we have in Canada. Financial literacy is fairly low. And it's not that, yeah, we're not dumb. It's just that we

don't have the information. It's not taught in schools. And it should be, in my opinion, it should be taught as, you know, when you're a kid, elementary school, middle school, because that's when you actually start getting an allowance and start spending money. You need to understand how to, you know, and it shouldn't just be left up to, you know, you have to go to university and take a course. It should, you know, financial literacy should be for everybody. Because, you know, as I say, it's like, well, we all earn money and we all spend money. So it doesn't make sense. There's only a very small percentage of people that know how to manage it properly or can give that advice. I think that's ridiculous. So, you know,

obviously, this is an issue. In your opinion, like, what can we do about this? Like, how could we make it more mainstream? Or how can we compete with all those trashy reality shows? Yeah, really, I wish I had a great answer. The simple answer is that the education system should be required. And they should be required to teach what the academic literature says is the right way to invest. Sadly, when their local high schools here have some investment classes taught by some stockbroker who wants you to believe all the wrong things because that's how they make money. You know, there's an old joke, a stockbroker is someone whose job it is to transfer money from your wallet to his. And that, you know, and so that's a real problem here. So what I think people have to do is recognize that they have to take responsibility for educate themselves, take the time to read good books on investing that talk about the academic research.

Again, I can recommend a few authors in addition to my 16 books. I would recommend John Bogle. William Bernstein is another author who has written wonderful books as well. For U.S., Jane Bryan Quinn does a great job of talking at higher levels about all of financial planning. These are all books written by people who solely have the reader's interest in mind. Yeah, no, I completely agree. I think it needs to be in schools, but we also need to recognize, and I think that's why people are listening to my show. And the number, you know, more listeners are gradually, you know, listening since I started this almost four years ago is because we're realizing that no one, I mean, the old saying is, you know, no one cares more about your money than you do. And a lot of the people still giving financial advice have some sort of other ulterior motive, probably to sell

you something. Yeah. So let me, while we're on that, in my book, we have an appendix on how to choose a good advisor. So I think maybe this is a really an important point to make sure people learn about. So number one is make sure they're in the US, what is called a fiduciary, which requires them to give advice that's solely in your interest. That means they cannot be paid by anyone but you, no commissions or other benefits there. The second thing is, to me, that's not sufficient. You want them to be able to show you proof, showing you their financial statements, their brokerage accounts, and say, I'm investing in exactly the same vehicles that I'm recommending to you. So one, demand in writing

that they are a fiduciary, not what in the U.S. what's called a suitability standard, which is a much lower test. I can't imagine why anyone would ever work with someone who isn't required under the law to give advice that's in your best interest, or why you would ever invest with anyone who isn't willing to show you that they put their money where their mouth is, investing in the same vehicles. The third thing is their advice should not be based on their opinions. It should be based on peer-reviewed academic evidence. So if they ask you, if they tell you to buy a certain type of investment, then they should be able to show you the academic research, why that's true. In my books, I often cite over 100 academic papers to back up each of the claims I'm making. And lastly,

it's really key, I tell people this may sound a bit strange, but you should never work with an investment advisor, because you can have, if there is such a thing, a perfect investment plan, but it could fail for reasons that have nothing to do with investing. You don't have enough life insurance, disability insurance. Your estate documents are not there properly. It's because of elder abuse, all these kinds of things that can happen. You want to work with somebody who is a true wealth advisor who integrates investing, estate, tax planning, and insurance of all kinds into a well thought out integrated overall plan that will allow you to achieve both your financial and life goals. Absolutely. Great, great advice. And I'm sure you have a ton more in your new book. Where can people find more information about you and your latest book or collection of books, your whole

library of books? Well, you can just go to amazon.com and you'll find all of the books that I've written. I work for a firm called Buckingham Strategic Wealth. So if you just Google that, that'll come up. Or BuckinghamAdvisor.com is our website. And I'm always happy to answer questions from readers of my books. I get them almost every day from people all over the world. That's one of the benefits of reading my books. You get free advice and I'm always happy to help.

Great. Thank you so much for taking the time to chat with me, Larry. My pleasure. And I'd be happy to come back anytime. Awesome. Well, your next book. And that was episode 192 of the Mo Money Podcast with my guest, Larry Suidro. Make sure to grab a copy of his book, Your Complete Guide to a Successful and Secure

Retirement. You can grab that anywhere, Amazon, all the places where you'd find a book. You can also learn more about him and the firm that he works for at buckinghamadvisor.com. And also make sure to check out the show notes at jessicamorehouse.com slash 192 to learn more about what this episode was about and just some important things you need to know. And also, I've got some exciting things to share with you in just a hot sec. But before I do, just a few words about this episode's wonderful sponsor. This episode of the Mo Money Podcast is sponsored by the Scotia Momentum Visa Infinite card. Looking for your award-winning cashback card? The Scotia Momentum Visa Infinite

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your life easier by taking care of almost any request, like dining reservations or building vacation itineraries. To learn more about the Scotia Momentum Visa Infinite card and see if it's right for you, visit jessicamorehouse.com slash Scotia or visit the show notes for this episode. Once again, that's jessicamorehouse.com slash scotia or check out the show notes for this episode all right first and foremost just want to remind you of something if you are uh you know this episode really kind of spoke to you you're like wow really need to start saving for retirement like time's a ticking need to do something about it but you don't want to just like you know hire

someone and hand it off to them and hope for the best that they manage your money the right way, I highly suggest you check out my Investing Foundations for Canadians online course. It is basically a crash course of all the important things you need to know in order to be a good investor. I'm not talking about crazy complicated stuff. I'm not going to show you how to trade derivatives or whatever. We're talking about real, you know, investing for real people like us who just want to be able to retire or reach some of our, you know, investment goals, which could be, you know, it could be retirement, could be saving up to, you know, travel the world. It could be whatever you want.

But there's a ton of students that have already taken it. A lot of people have loved it. And it's great for anyone who just doesn't know where to start and feels really just anxious about this whole situation. So you can find more information about that in the show notes, but also you can go to jessicamorehouse.com slash investing foundation to learn more about what is in the course. Speaking of investing, I've still got some tickets for my event that I announced last week in last week's episode, level up your money with myself and the wonderful Erin Lowry. So she is the author of Broke Millennial. I've had her on the show before.

I'm going to have her on the show again. She just came out with her second book called Broke Millennial Takes on Investing. And we are teaming up to do a one of a kind, probably never do it again event all about investing on May 7th in Toronto. More info in the show notes. But also if you just go to jessicamorehouse.com slash level up, it'll take you to the Eventbrite page and you can buy your tickets. We sold out of early bird tickets and that's like we had 40 tickets to sell in three days. So now as of this moment, I believe there's 47 tickets left for the entire event. And then that's it. That's all we can do. So grab your tickets while you can.

There's a couple weeks left, but highly recommend you grab your tickets if you can. It's going to be amazing. I'm going to be there. Erin's going to be there. We're going to have a panel discussion with two other guests, a Barry Choi and an expert who works at TD Direct Investing, our wonderful sponsor for the event. You're going to get a copy of her new book, Food, Drinks. There's going to be an amazing photo booth. We're going to have so much freaking fun. I cannot wait. So I hope to see you there. Before I let you

go, I just want to share this really nice podcast review that I got last week. Thank you so much to Jill from Canada. And she says, I started listening to Jessica's podcast right after graduating university in May 2018. I felt lost in my finances, a mountain of student debt, starting out working as an independent contractor. I felt uneducated in this world and very intimidated. Let me just say, after only just a few of Jessica's podcasts, I felt empowered and in control of what I was doing. Also was very pleasantly surprised she's Canadian. An amazing resource that is relevant for us Canadians, but also includes very universal concepts for everyone to learn from. Thanks a million, Jessica. Don't know where I really, really appreciate that review. And thank you so much. And I'm so glad I was able to help you on your journey because what I feel like I'm meant to do on this earth is to help people with their money, as nerdy as that sounds. If you want to get a shout out on a future episode, all you have to do is sign into iTunes and just take two seconds and

leave me a review. It's literally that easy. And then you'll hear me read out your review and say thank you because I really do, really, really do appreciate you listening and taking the time out of your day to do that. And also, you know, props to you for taking the initiative and learning something that most people probably think is super boring, which is finance. You're going to be in such a better place by empowering yourself and educating yourself about personal finance. All right, I'll be back here next Wednesday with a fresh new episode. I will see you then. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.