More Money Podcast - 223 What the Banks Don't Want You to Know About Investing - Larry Bates, Author of Beat the Bank

Episode Date: January 22, 2020

Having spent 35 years in the investment business in both Toronto and London, Larry Bates knows a thing or two about how the banks operate and how to be a savvy investor. Which is what inspired him to write his book Beat the Bank, which is all about how to beat the bank at their own game…namely getting rich off you, not helping you get rich! In his book, Larry provides insight into how the investment industry in Canada works, and how best to achieve higher returns through the use of better investment products. In other words, it’s time to stop investing in high-fee actively-managed mutual funds from the bank in favour of index funds or index-ETFs using a robo-advisor or self-directed investing using a discount brokerage. Seeing as this podcast is in its 10th season, I’ve interviewed hundreds of authors and money experts on this show, but I’ve gotta say, if you’re Canadian and you’re looking for a good intro to investing book, this is it! This is my new go-to recommendation (in addition to my other favourites like Millionaire Teacher by Andrew Hallam, Wealthing Like Rabbits by Robert Brown, and The Value of Simple by John Robertson). If you want to start your investing journey and want a non-dry book on investing in Canada, you need to grab this book. You will not be disappointed! Also, don’t forget, I’m giving away a copy of his book! To enter to win you just have to visit jessicamoorhouse.com/contests. For full episode show notes, visit https://jessicamoorhouse.com/223 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to episode 223 of the Mo Money Podcast. This is Jess Morehouse, your host, and I am so excited to see you back here for another episode. This one's great because I am interviewing Larry Bates. He is the author of the book Beat the Bank. And honestly, I think it is going to be my new go-to recommendation for if you want to start investing or learn about investing and are not looking for a dry book because there's a lot of great books out there that I've read that are so dry, but I'm a weird nerd that actually likes them. This is not that. This is a really great introduction to investing specifically for Canadians. I'm sorry, my American friends,

but there's a lot of Canadians that listen to the show and there's not a lot of books that are specific to Canadian investing or Canadian banking. And that's what this book is all about because Larry, well, he worked in investment business and investment banking for 35 years in both Toronto and London. He's also a member of the board of FAIR Canada, a national investor advocacy group. This guy knows what he's talking about. Okay. And his book just, it was such an easy read. It was just so enjoyable. And I mean, I was just shaking my head. Yes. The whole time. Like, yes, yes, yes. It's one of those books where I'm like, I wish this book existed when I was in my 20s

and had no idea what it was doing and making so many mistakes. So we're going to talk a lot about what's in his book and some of the key nuggets. Of course, I'm going to give away a copy of his book. So listen right to the end to find out how you can enter to win a copy. Before I interview Larry, I just have a few words I want to share about this episode's sponsor. This episode of the Momany podcast is supported by ShopTaker. You know what I've been dreaming of having ever since I moved into my townhouse over three years ago? A new fridge. The old one I've got is ancient and

hideous, but I'm one of those people who cannot in good conscience buy a new appliance until the old one stops working. That is, unless I find a crazy deal. But who has time to regularly check retailer websites to see if there's suddenly a sale or a price drop? Thanks to ShopTaker, no one needs to anymore. ShopTaker is a free must-have app for your computer and phone that enables you to save items from over 4,000 online stores like Amazon, Costco, Sephora, and Zara to one place and get notified the moment they go on sale. It also scans the web for coupon codes at checkout and automatically applies them to your purchase. In short, if you shop online and like a deal as much as I do, you should try

out ShopTaker by visiting jessicamorehouse.com slash ShopTaker. And that's spelled S-H-O-P-T-A-G-R. So go on, join the over 1.5 million members and sign up to ShopTaker today. Just visit jessicamorehouse.com slash ShopTaker or find the link in the show notes for this episode. Welcome, Larry, to the Momentary Podcast. I'm so excited to have you on the show. It's great to be here. Thank you. I know. I loved your book, Beat the Bank, The Canadian Guide to Simply Successful Investing. I feel like even though it's, I mean, it's, you know, recently came out, it is something I wish existed when I did finish university and was trying to find, you know, my way.

They're back. I mean, that's when I kind of learned about personal finance because I'm like, I don't want to always be broke anymore. There really weren't that many great books out there. I feel like, yeah, there's The Wealthy Barber. Sure. But nothing as you just answered so many questions I had throughout my 20s. And it's annoying that I'm only, you know, now that I already know the answers,

now your book exists. Well, thank you for your kind comments. It's actually the most common comment I receive is, I wish I'd read this 20 years ago because, you know, most people, and the book is focused on, very focused on investing. I mean, there are lots of other books on budgeting and so forth and The Wealthy Barber is a good one on that, but this book is very focused on investing. I mean, there are lots of other books on budgeting and so forth, and The Wealthy Barber is a good one on that. But this book is about investing. And really the main message of the book is if you take a little bit of time to learn investment basics, over a lifetime of investing just a bit smarter,

it can make an enormous difference. And so Warren Buffett said, the best investment you can make is in yourself. In other words, take a bit of time to learn and you'll be so richly rewarded over time from taking that effort today. And that's like a lesson I now know, but I feel like when, especially if you are just starting to learn about money management and personal finance, you are pretty, there's just so much content about, like you said, like budgeting and kind of the basics. It's not that, at the end of the day, it's not that hard. But when it comes to investing, it is actually very difficult to find. I find content that's digestible, understandable, that's not talking either down to you or just way above you and you don't understand. And quite honestly, there's so many great investing blogs out there.

But as someone who's like a young woman, man, they were hard to freaking read. They were just older retirees just talking about stuff that I just don't care about or cannot relate to. But I found your book, your tone, just your approach very easy to grasp and answer. Honestly, I talked to so many young people and they have all the questions that you basically answered in this book. So I'm very excited to be able to finally tell people like, there's a book that has all of those answers now. Yeah. Well, it's, it's, um, you know, I spent 30 plus years in the investment banking business and, um, I, uh, I, I, I had worked with and advised some of the most sophisticated institutional investors in the world. And this was my effort to try to

take that knowledge and distill it down to, uh to help average investors who don't know much about investing. But again, the industry portrays investing as super complicated. It's like, hey, Jessica, don't even bother trying to figure this out. Just trust me. And blind trust is not good. You know, there's that phrase, trust but verify. But in order to do that, you've got to learn a little bit. And, you know, and that's really what the book is for,

to give people some basic knowledge to enable them to make smarter decisions over a long period of time. And I think it's helping lots of people. Yeah. And I think that's one of the biggest hurdles too is we all kind of know, I think deep down, we know we need to budget and manage our money and be smart with credit cards and debt and all that kind of stuff. When it comes to investing, for some reason, we all kind of think we could just, and it could be just the narrative that the banks have been pushing, you need to hire somebody, you need to outsource it. You're too stupid to understand this. So just let someone else deal with it. Oh, poor you. It's too complicated for you. And that was like something that I definitely dealt with in my 20s. I definitely,

you know, worked with a couple banks with some advisors, and they literally would treat me like I was an idiot, even though I'm like, you don't know that I have a personal finance blog, and I know what you're talking about, but okay, you're just kind of assuming some things. And so I think the really important message that I'm talking about, that you talk about, so many other people are now talking about, which is great, is if you do want to actually build wealth and retire comfortably or just at all and have enough, you actually do need to take responsibility for that, which means you do have to learn this stuff. You cannot just pass it off. You can't do that anymore. And I think maybe part of it is because we don't have the luxury of pensions like previous generations did. Yeah. I mean, past generations had the benefit of guaranteed pensions.

And from outside the government sector, that's virtually non-existent. So employers have downloaded responsibility for investing to their employees, but nobody's downloaded the basic knowledge. So there's that gap there. And people tend to just go to the bank or their insurance agent or their advisor, whatever, and just say, tell me what to do. And most advisors are good people, but unfortunately, most of them sell really, really lousy products. And what makes these products lousy, by far the biggest problem is the cost. Canadians pay the highest investment fees in the world.

And most people have no sense of what they're paying. They either think they're paying nothing or they're not aware of the full cost. And even the way the cost is expressed is sort of misleading. Well, this mutual fund is great. It's only charging 2% a year. But if you're starting when you're 30 and let's say that your lifespan is going to be to 90, well, think about investing for 60 years and paying 2% of your total invested amount every year for 60 years. Start thinking about those numbers.

It's madness. But the good news is unlike 10 or 15 years ago, there are fantastic, super low-cost alternatives available that charge a tiny fraction of what the industry wants to sell you. And they're often sold by, they're often sponsored by the same institutions that want to sell you the super expensive stuff. So, you know, just learn the difference between those two and take advantage of the low cost funds. And you can double your returns, literally.

And that's the math. And, you know, you want to check the math out if you're inclined that way. Just go to my website, larrybates.ca, and you can see this little calculator, which shocks a lot of people, but it demonstrates the impact of costs and cost savings over time. Yeah. I feel like the one argument that I hear over and over again, and again, when I did deal with financial advisors at the bank, when I would bring up the fees because I was starting to learn about how important fees were and you want to keep those down because they're eating into your own returns and your overall wealth and future, they would always bring up the thing about value. But I'm providing so much more value, value, value, value, value. And now that I've been an investor on my own doing DIY and using robo-advisors for years and have done so much

better than I ever did when working with the bank, I'm still wondering what that value is. Can you explain this to me? Having worked in the banking industry, what is this value they talk about? Well, it is. I mean, I don't mean to be pejorative. I mean, I had a little bit of fun with the book title, right? Beat the Bank. But their sales pitch is kind of built on a bit of a lie because how can there be value when the ultimate expression of that advice is to buy a super high-cost fund. It would be like going to buy a car, and there's a Toyota there for $30,000, and there's a Honda there for $300,000. And the advisor says, oh, you should buy this $300,000 Honda. It's a great car because that's what they're paid to sell.

And yet there's this car that performs the same at a tenth of the cost that they keep out back. They don't really want you to get involved. But so I really have a problem with this argument that, oh, well, you're paying for all the value we're providing. They're actually, they're destroying value, right? Most Canadians, they're taking 100% of the market risk, but they're only getting to keep about 50% of the market returns because the rest is lost in fees. Does that make any sense? That's crazy. That is crazy. It is crazy. And I still get

irritated when I think back to the years I wasted working with that bank and not really understanding. And that's the other thing too. It's like, well, part of that value I assumed was they're going to educate me on what they're doing with my portfolio or tell me now they, it was just sales pitch after sales pitch. Or if they thought I was unhappy with my portfolio, they would offer a different portfolio. They would just sell me something else. It would drive me absolutely crazy. And yeah, like you said, some of them are nice people. We had one really nice guy.

And then he was replaced by this other guy who was just a, honestly, snake oil salesman. If I saw him on the street, I would give him a piece of my mind for basically wasting years and taking so much of our money. But that's kind of – No, that's the way the system works. It's not a healthy system. I mean the Canadian banks and our financial institutions generally, they deserve a lot of credit. They've been stable through the ups and downs.

They didn't get hit by the crisis 10 years ago. There are a lot of good reasons to feel good about the banks and trust them. This is not one of them. They sort of take advantage of this trust people have to sell them really crappy products. But at the same time, if you go through a different door, they've got products available at a tiny fraction of the cost. And you can take advantage of that if you learn some of the cost. And, you know, and you can take advantage of that if you, if you learn some of the basics. And that's, that's really what my, my book is about. And, and, you know, from the

feedback I'm getting, you know, people are, are taking advantage of that knowledge in the book and taking action and switching to lower cost alternatives. And it may not be for you, but hey, take the time to learn a bit and you can't go wrong. And it may not be for you, but hey, take the time to learn a bit and you can't go wrong. And it's not that hard. When it comes to investing, the simpler, the better, despite the fact the industry, for them, they want to make it as complex as possible because that makes people really more and more reliant on them. And that's not healthy.

Absolutely. No, and I definitely ascribe to the idea that investing actually at the end of the day should be simple. So many people on the show have come on to express the exact same thing. So it really shouldn't be. One thing that when I was doing some research on you, I saw that you did a Reddit AMA, which is so interesting. So many interesting questions that were there. One of them that kind of came up in

your book as well is the idea of kind of the risk that we take. And I also kind of feel like typically this was my experience, and I've heard this from a lot of people that have worked with someone at the bank. They're not taking on enough risk in their portfolios or actually being too conservative because I feel like maybe it's the terminology that we use. It's like, well, do you want something balanced or do you want something aggressive? Obviously, aggressive sounds bad when you put it like that. It sounds like you're going to lose all your money. Balance sounds, you know, that sounds responsible and like a good idea. But you gave an example in the book that, you know, there's two couples basically investing the same amount of money, same time horizon. One chooses, you know,

a balanced fund and one something more aggressive. And obviously the people with the balanced fund ended up with way less money. What do you think is going on here? Well, I think the banks want to, you know, keep down the middle of the fairway and sell people balanced funds so that they don't experience the drops in the market, which can occur when you do have more of your money in stocks versus more stable bonds. But over time, stocks have always produced positive results. But it's like a roller coaster ride. You have to be prepared for the dips which will occur. And whatever amount that you have invested in the stock market, you've got to be willing to live with the dips. And the worst thing you can do is, you know, is have a dip of 10 or 20%, which can happen anytime, and say, oh, my gosh, you know, I can't stand that.

I've got to get out. But if you're, for instance, if you are 30 years old or 35 or 40 and you're saving for, you know, for a post-career or, you know, a lengthy retirement day, you know, from age 60 to 90 or whatever it might be, well, you've got a hell of a long runway. And for some of those folks, you say, well, I don't really care about the ups and downs in the market in the intermediate term. I want to gain the most in the long term.

Well, for those investors, a more aggressive approach might make total sense. And owning bonds is not going to make anybody rich these days. The yields are so low, but they are great for wealth protection. You can be comfortable that you're not going to get hammered owning bonds. But some of this, there's a lot of fear about investing. A lot of people think investing is like gambling. And you can play it that way. And you hear horror stories of people losing tons of money in the stock market, in cannabis stocks or crypto or I don't know, whatever it is. Those people are essentially gambling. I look at the stock market as a tool to become a long-term business owner. So if I own one share or a hundred shares or whatever it is, RBC or Apple or Bell or whatever it is, hey, I own that business and I want to own it for the

long-term. And as a business owner, I don't care what happens to the market day to day. I just want to own that business for the long run. And that's how wealth is created, long-term business ownership. So that's the way I look at the market. Don't pay attention to what's happening in the market day to day. It's all noise. It's meaningless. Invest. And this is the one expression I love is don't be a day trader.

Be a decade trader. And if you look at investing that way, the ups and downs of the market become noise over time. They become meaningless. One quick example. year, in December of 2018, on Christmas Eve, it was the worst Christmas Eve of all time in the stock market. Never been worse. The market was down 3.5% or something. On Boxing Day, the U.S. markets opened on Boxing Day, the Dow Jones had its single largest one-day point gain in history.

It was up over 1,000 points. So, Jessica, tell me, what was the difference between Christmas Eve and Boxing Day? Nothing was the difference. It's just all that ups and downs and intermediate noise in the market becomes meaningless if you're a long-term investor. Absolutely. And I remember that time because I remember looking at some news reports and also looking at my portfolios and then reminding myself, okay, we haven't dealt with one of these for a little while. Let's just not do anything. Don't panic. And we're going to be just fine. That's what we know. That is the truth. And so, yeah,

then I wrote it out and then it was fine. Later on, I talked to some other people I know who, you know, they're like, oh, I matched my own portfolio and stuff like that. And you know what they did? They knew better and yet they panicked and they sold. And I'm like, but you knew better. What are you doing? So like you said, a lot of it is fear-based and very emotional. It's emotional, yeah.

And it's hard. I mean, I remember in the financial crisis 10 years ago, there were some days where you wonder whether the sky was going to fall. It was ugly. But, you know, and a lot of people, obviously a lot of people sold, they panicked and sold and have been left sort of on the sidelines as the market's gone up 250% or whatever since then. But that's why it's important to give some thought as to what the right balance is as you invest between more risky, higher long-term return stocks and more conservative bonds. That's probably the most important question that investors need to address. And I talk about that a fair bit in the book.

But beyond that, it should be very simple. The hardest thing is not doing anything. And it's funny, recently I was looking at a couple, sometimes, maybe just me, I will look at some stocks and look at their historical returns over time. Like, oh, if I had just been smart enough to buy that stock at that time. And then I was talking to my husband. He's like, but you know what? Most people don't buy that stock when it IPO'd or right at the beginning and keep it for 10, 20. Most people get emotional and they will sell at certain points. So there's probably very few people that kept that Apple stock or whatever.

That's right. And still have that same stock right now. Most people will trade. And that's why I say wealth creation, most wealth creation is from owning businesses for the long term. It's not from trading. I'll just give you a quick example. I use it in the book. If your rich uncle had left you $10,000 40 years ago and invested it in TD Bank stock and directed that the dividends be reinvested in more TD Bank stock, so 40 years ago, what would that $10,000 invested then be worth today? The answer is it's $3.5 million or something like that.

It's just outrageous. Okay. And that comes from, that's a great, look, I'm picking a company that did very well. It's easy to pick one, you know, from the past. But it demonstrates the power of compounding over a long period of time and, you know, what long-term business ownership can, you know, can do. But in the meantime, that TD stock was up and down like crazy in different periods like the crash of 87 or the dot-com crash or the global financial. But all those market ups and downs became meaningless over time. It was just a great company that did well over time. And so that's, you know, that's an example of the success of long-term investing. And you definitely kind of talk a little bit more in depth about these, like there's

wealth builders and wealth killers. I think that's a great way to kind of break those out. So we can just remember on a daily basis, like, what am I doing? Well, the wealth builders, as you outline, is the amount of money that you're contributing, the time horizon you have, and then the interest rate or the rate of return that you'll gain. And the wealth killers, like we kind of mentioned, is fees, so important, tax, and inflation. Like, very simple. And that is, yeah, like, it's very simple. Those six factors will determine the success or failure of every investment you make. And, you know, fees is where most Canadians really fail badly,

don't see the fees and don't sort of figure that even if they do see them, what the impact is over time. Taxes, also nasty fee or wealth killers. But you can, you know, there are some things you can do, TFSAs, RSPs, et cetera, to either eliminate or defer taxes. And inflation, the last wealth killer, nothing you can do about it. You just have to beat it. Yeah, it's interesting.

I recently also read this book called Invest Dead that's more based on value investing. But she talked a lot about inflation. And again, I think it's something that we as investors or just people forget about. It's real. We forget about it. And it was just actually like a reminder. Like typically I do do this, but every year I will look at how much am I personally contributing to my investments. I usually do, usually my income increases, so I will increase my contributions. But I think it's just like a quick thing that people can remember is even if your income doesn't increase, make sure to increase your contributions because inflation is – it is increased by a year. So you need to increase it so you're not contributing the exact same dollar amount because of inflation. It will actually make that amount less, if that makes sense. If you can do that along with making those contributions on a regular basis, again, the compounding effect of that can be enormous.

And the earlier the better, obviously, all those standard things. So yeah, you got to keep an inflation in mind. You got to minimize taxes and really minimize fees as well, which you can do if you have a decent handle on the basics. Exactly. And for taxes, and this is a question that pops up, I'm sure you get this a lot, the question about TFSA versus RSP. Back when I, Before the TFSA existed in 2009, RSP was your best bet. TFSAs, even though they've been around for a while, a lot of people still don't quite understand how they work. And it seems like the more people get to know them and really understand the impact of how great they are. I personally prefer a TFSA over an RSP. They're both great. But when you kind of think about, you mean you could put money in there, it grows tax-free.

And when you want to withdraw in retirement, you don't pay income tax on that money. How amazing would that be? They're beautifully simple. I mean, unlike almost everything else in the world of tax, which is numbingly complex and awful. TFSAs are elegantly simple. And so, yeah, I'm a big fan of TFSAs. But, you know, RSPs are great too. The main thing is, you know, if you've got money to invest, take advantage of one or the other, at least. Don't be frozen and do nothing because you can't figure out which one is the best. There's not necessarily a right answer there. I do talk about that in the book, but both are excellent ways to reduce the impact of tax. Absolutely.

And you do mention in the book too, because I think some people are like, but which one should I start with? It is kind of the typical rule of thumb. If you're kind of lower income, and I believe the number you gave was like, if you're making like 40,000 or less, as an example, TFSA is probably your best bet. And then when you're earning more and you want that kind of way to reduce your overall income taxes and RRSP is a good bet. But also, like you said, there's no wrong way as long as you just start investing. Because I have met people that are so petrified of making a mistake, they delay

months or years. Yeah, which is, that's the real error, okay? It's not choosing, it's not making the wrong choice, it's not making a choice. That's the big error. You know, and you're right about the income levels, although, you know, a TFSA can be absolutely the right choice for higher income earners too. Hopefully, higher income earners can, you know, maybe if they're really fortunate, they can fill up both pots. And then I think things get a little bit more complex with the taxable or unregistered accounts. They do, but you know, it's, it's not that, yeah, it's not that complicated. And, and, uh, you know, and, and you don't need,

yeah, I mean, you can make it, you're probably right. You need to understand the basics. You don't need to necessarily understand the tax treatment of foreign dividends. It might be this and that. I mean, that's – if you learn the basics, you can be fine. And the minutia is endless minutia, but you don't need to know it. And I think you do have some really good charts actually in this book that go into if you were to put different types of investment products into a taxable account, what would that actually mean in terms of how much tax you pay? So I think you do outline it pretty well in here, which was actually very helpful to see in a nice chart. Yeah, good. No, it's the, you know, the subtitle of the book talks about simply successful investing.

So that was really a big aim of the book is investor and be calmer and more confident about your future. If you learn the basics, even if you decide to stick with an advisor, make sure you know what you're paying, which isn't easy to find out necessarily. But if you, you know, if you're comfortable with what you're paying and you feel you're getting value for that cost, well, that's great. But, you know, getting that basic knowledge will enable you to make that informed decision. And that's what I urge people to do. Whereas, you know, a vast majority of Canadians are making those decisions uninformed and just sort of blindly relying on advisors whose job it is to sell you the most expensive possible product. And that's not healthy. No, I think, yeah, like you said, and you go into in the book, it's heartbreaking when

you see all these people doing some of the right things, like contributing to their investment accounts regularly, and they're saving so much money, but they're not getting that much back because they missed a couple steps, like really understanding what are you investing in? What is your risk profile? What's your portfolio? Why is it balanced in your 25? That doesn't quite make sense. And what kind of fees are you paying? It's like, those are actually almost more important than your personal contributions. I mean, that's really what drove me to write the book. I just thought, wow, this is just, you know, people work hard. It's really hard to save money. We all know that.

They trust their advisors. They're the ones that are taking the risk, 100% of the risk in the market. And yet, you know, their advisor, their bank or whatever strips away half of their returns in fees and don't make that clear. It's just not right. And it doesn't have to be that way.

And, you know, really our retirement system in Canada, you know, it depends on the success of individual investors and the industry needs to do a better job at providing lower cost, more efficient products to investors. Right now, those products are out there and if you know what to do, you can get them. But, know they're the industry is doing everything possible to hang on to this uh these these old uh super expensive products and get you to buy them now that that will disappear over time but um you know but in the meantime you know millions of canadians are you know are stuck with these uh these crappy products yeah with that said what what are your thoughts on because because you do talk about the different kind of ways to invest. You can work with an advisor, you can use a robo-advisor,

you could be a DIY investor. A lot of these big banks now are coming out with their own robo-advisors, probably because if one does it, they all kind of have to do it. What are your kind of thoughts on robo-advisors and these big banks jumping on the bandwagon? Is it a good thing? Absolutely, it's a good thing. I think I'm a fan of robo-advisors and these big banks jumping on the bandwagon. Is it a good thing? Absolutely, it's a good thing. I think I'm a fan of robo-advisors, which are basically online portfolio advisors, which go online, answer 20 questions about your income, what your goals are, what you're saving for, how comfortable you are with stock market risk, et cetera,

and they'll recommend a portfolio for you, and you just sign up and contribute on a regular basis, and it's taken care of. So it's wonderfully convenient. They charge fees of something like, on average, probably half a percent a year, plus the costs of the underlying funds, which might add another tenth of a percent or maybe a quarter of a percent.

So their total fees might range from six-tenths of a percent to maybe three-quarters of a percent, which that's a fair bit, but it's a fraction of what they'll charge to sell you their old crappy mutual funds. So robo-advisors can be a great alternative for many investors out there. And that business model was started by independents, sort of disruptors. But the banks are now creating their own. RBC started in RBC Investees. BMO Smartfolio, the other banks will be doing the same thing.

Questrade's out there. Well Simple is one that's advertised a lot. They're well known. So there are good alternatives out there. And if you're looking at one of them, I'd recommend, you know recommend go online and do a search for comparisons between them. There are probably 10 of them out there or something. And some of them are better for first-time investors. Others are better for seasoned investors with larger portfolios.

They're a great alternative for many and not just for younger folks, for retired folks too. They can be a great alternative for many, and not just for younger folks, for retired folks too. They can be a great alternative. So yeah, the banks, the thing is with the banks and the big institutions, they will want to sell you the most expensive thing possible. But if you figure out there are better ways, they'll provide those alternatives too. So you don't necessarily have to leave the bank to beat the bank. You just have to know which door to go through. Yeah, you need to know how to talk the talk. You need to know what they're talking about.

And also, it's fair to say that depending on who you're dealing with, and I've heard stories like this a lot, your advisor may not be that knowledgeable about investing, depending on who you have. They may be well-versed in mutual funds, but if you want to talk to them about, I want to build a couch potato portfolio of ETFs, they may not know what to tell you. Well, they're trained to sell. And again, they're good people, but they're stuck selling products that really serve the banks better than they serve their clients.

And it really is shameful that the industry keeps selling this stuff. And the regulators haven't done enough to stop it, in my view. So you need to have a little bit of a buyer beware attitude. In order to be effective at that, you need to learn a few of the basics. So you got to somewhat fend for yourself, not to become an expert, but to learn some basic knowledge. And like it or not, that's the reality. And I feel like once you do kind of accept that, that you do have to learn the basics, and then you learn it, you'll realize, A, it's not as hard as you thought. It's not that complex. And then if you want to build onto that to become a more advanced investor, if that's whatever you want, it won't seem so complicated because you have this knowledge now. But it is hard at the beginning.

Believe me, I remember those growing pains. I'm like, what? It's a whole new language. Yeah. And frankly, for most folks, I don't think you need to get into options and derivatives and all that stuff. I mean, that's mostly for professionals or very experienced people. For average investors, RoboAdvisor is a great alternative. There are also, as you know, Jessica, there are all-in-one ETFs that provide perfectly balanced portfolios in just one single fund, super low cost and wonderfully simple.

So yeah, there are great ways to do it. And one little note, the impact is going to, most people I think are pretty surprised with this. After purchase of a home, the largest expense for millions of Canadians over their lifetime is investment fees. And people have no idea. And a couple of reasons. They're not charged directly. The bank or their advisor or whatever, your firm doesn't come and say, okay, you need to pay X hundred or X

thousands of dollars a year for this. Those fees are just deducted from your accounts and people don't notice. And the industry never presents a bill. They never say, hey, look, this is what we're charging and this is the impact over time. So again, costs can have such a devastating impact, and yet it can be so easy to largely eliminate them. So going back to fees, if you need a starting point for figuring out what you're doing on your website, it will kind of, I think, make things start to click and give you that motivation to maybe do something about it. Yeah, no, exactly. And again, it can be fun too. And I'm sure, you know, once you get over the fear aspect of it, it can be, you know, it can be fun and not necessarily every day or when the market craps out or whatever, that's not fun, but you know,

that you can gain some satisfaction over time by, by being out in control of the market, but, but having a bit of knowledge and and having some control over what you're doing will, I think, give people more comfort, more calm over time and allow them to get on with their lives rather than worry about what's happening in the market day to day. Absolutely. Well, thank you so much for joining me on the show. Where can people find more information about you and grab a copy of your book, Beat the Bank? Well, the book is in stores across Canada. And it's also available on Amazon and

indigo.ca and other online sources. And it's available in hard copy and also available in ebook format. And people can also go to my website, LarryBates.ca. Lots of information there. And that calculator, which is a shock to many people, but very instructive, is there as well if you're interested. So, yeah, there's lots of info there, and I think it has a potential to make a difference for people over time. So thanks very much for having me.

It's been lots of fun, and I think your podcast is wonderful, helping people understand their finances. And I'm glad to have the chance to contribute a little bit to that. Thank you. No, it was a pleasure. And yeah, I highly recommend this book. I've read a lot of books, Larry, and this was a nice, easy intro to investing. So anyone can read this.

So thanks so much for writing it. My pleasure. Thanks for having me, Jessica. Wonderful. Thank you. And that was episode 223 of the Mo Money Podcast. Make sure to check out the show notes for more information about this episode at jessicamorehouse.com slash 223. And that is the rule for any episode you listen to and you're like, oh, I wonder what that, they mentioned a link or they mentioned a resource. I wonder where I can find more information about that. Just check out the show notes on my website. You can either check every single episode ever at jessicamorehouse.com slash podcast or just go jessicamorehouse.com slash the number of that episode. It'll take

you right there. Of course, if you want to learn more about Larry and his book, go to larrybates.ca. You can also follow him on Twitter at Larry Bates BTB. And of course, if you want to enter to win a free copy of Larry Bates' book, Beat the Bank, go to jessicamoranhouse.com slash contest or visit the show notes for this episode. There will be a link in there that will also take you to the contest page. I have some important things to share as always. So please do not go away. I just have a few words I want to share about this episode's sponsor. This episode of the Momenty Podcast is supported by ShopTaker. Did you know that 67% of millennials prefer to

shop online? Well, I guess that makes me one of them. And a big reason is because you can save so much time and money by doing so, especially when you use ShopTaker. You see, ShopTaker is a free app for your computer and phone that helps you do your online shopping and get the best price. All you have to do is make an account. Then when you're doing your online shopping and see something you like, take it with ShopTaker. After you take it, you'll be notified whenever there is a price drop or sale on that item.

Not only that, once you're ready to buy, ShopTaker will scan the web for coupon codes at checkout and apply them to your purchase. ShopTaker has already helped members save over $92 million. Don't you want to save some money too? To learn more and to try it out for yourself, visit jessicamorehouse.com slash ShopTaker. And that's spelled S-H-O-P-T-A-G-R. Once again, that's jessicamorehouse.com slash shoptaker. And that's spelled S-H-O-P-T-A-G-R. Once again, that's jessicamorehouse.com slash shoptaker or find the link in the show notes for this episode. First, this is kind of a, I think a natural kind of fit. If you do want to get started with investing or you want to see if you're doing investing, right? Because honestly, that is a pretty common

question I get is like, I'm investing. I just don't know what I'm actually doing or if I'm doing it right. Well, lucky for you, I have an investing course that is, in my opinion, the best one out there. It is called Investing Foundations for Canadians. It goes into pretty much everything you need to know about investing in traditional investment stocks and bonds, GICs, RRSPs, TFSAs, RESPs, all the jargon you've ever heard of and didn't really know much about, I go into in this course. There's a lot of great testimonials and reviews. You can learn more about it at jessicamorales.com slash investing

foundation. So go check it out and take it because the best time to start investing is now. But before you start investing, you need to know what you're doing. So you are doing it right. And you have the you'll make the biggest impact for the long term. Also, if you want to learn more about like what other great personal finance books are around, what are some of my top It will make the biggest impact for the long term. Also, if you want to learn more about what other great personal finance books are around, what are some of my top recommendations? Well, lucky for you, I also have a webpage on my website called jessicamorellis.com slash recommendations.

Not that hard to find. You can just go to my website and you'll find it pretty easily. I have a whole huge list of books that I have read that I love. A lot of them have been featured on this podcast. And honestly, I feel like a lot of people have been saying this or other podcasts have been saying it.

I don't know. It's just been front of mind a lot about the importance and just the power of reading. Spend one hour per day reading. And it could be anything. It could be fiction. It could be nonfiction. Or it could be a business book or a personal finance book, whatever. It's really so helpful. I find for me, I'm in a better mood and I feel less stressed out or anxious about things. I feel more confident about things. I feel more knowledgeable. I don't know. I'm always doing better in my life when I'm consistently reading a book. And so for me, my little ritual is before bed, how I kind of get myself ready to go to sleep is I read before bed,

usually about an hour. And I do that every single day. And then once I finish a book, I immediately start another book. So once you have that gap, I find it's always hard to start reading. So I try to just like never have a gap, just always start another book. So once you have that gap, I find it's always hard to start reading. So I try to just never have a gap. Just always be reading. So there's a whole list on my website of books that you should definitely check out. But this one is definitely one of them. Before I let you go, I haven't done this in a while. I want to give some shout outs to some amazing people that have given me some iTunes reviews, but also some really amazing DMs and comments because I know not everyone listens on iTunes or Apple Podcasts or some people have even told me like I tried giving you a review and then it just didn't work,

didn't save or whatever. So I just wanted to give some shout outs to some amazing people that have given me some messages. All right. This first one is from triple C, triple N, triple B21. I'm sure that's not your real name. Um, and they say awesome Canadian finance podcast. Jessica is full of energy and brings on really great guests. Since I discovered the podcast a month ago, I've been binge listening. Thanks so much. Well, thanks so much for listening. I really appreciate it. Uh, the next one is from Sonia Catherine. Um, more of a question actually about me in the future doing a podcast episode dedicated to talking about government workers and their defined benefit pensions. Thank you, Sonia. I've read your review and your question about if I can do a podcast on that. Note it. So look out for that. I will try my best to do an episode in the future about that topic. This next one is from an American lister, S Doyle 1771, uh, intersectional money advice. I've been listening to Jessica's podcast for a while, but her latest episode on money and mental

health is one of the best podcasts I've heard in the personal finance space. It's so, so important to talk about, and I'm grateful for the conversation. Thanks so much. I also really enjoyed doing the episode. I definitely want to have more episodes talking not just about how to do this, because even though that's very important, but also just the emotional side of things, the mental health side of things. It needs to be talked about more and I'm going to do my best to do more episodes on that. So thanks so much for your review. And last thing, I have a DM from Instagram that I want to share. So FYI, you can DM me and I will answer back and let me know what you think about anything. Or if you have a question, please follow me on Instagram at Jessica I Morehouse is where you can find me. All right. So this one is from Jill. She says she did attempt to go on iTunes to do a review,

but it didn't work. So that's why she sent me a DM, which I totally appreciate. She says, I've been following you and your podcast since shortly after I graduated in June 2018. And you've given me confidence in my finances and my financial future that I can't put a value on. I've been able to save an emergency fund of $10,000 and I'm working on paying off my student loan. When I start to get overwhelmed, I listen to you and I feel more at ease. I also happen to be working as an independent contractor and learning about tax responsibilities and duties. Being in this role has been greatly due to your expertise. I honestly can't thank you enough and can't wait for all of your amazing content in 2020. You're amazing, Jessica. You're amazing, Jill. $10,000 in your emergency fund and you're paying off your student loans and you're just

killing it. You're killing it. Thanks so much for the DM. I really appreciate it. If you want to get a shout out on this podcast, all you have to do is either send me a DM on Instagram. You're killing it. Thanks so much for the DM. I really appreciate it. If you want to get a shout out on this podcast, all you have to do is either send me a DM on Instagram. You can send me a nice email as well. Jessica at JessicaMorehouse.com or you can go on Apple podcasts or iTunes and leave me a review there. But yeah, so that is it for me. Of course, I will be back here Friday with another money minute episode. Hope you enjoyed the first one. They're a lot of fun. Also, this brings up a really good opportunity. If you have a specific question that you want me to address in a Money Minute episode, you let me know. You find me on like Twitter or Instagram or email, you let me know and I will do an episode on whatever you want. Yeah, that's it. Okay, cool.

Thanks so much for listening. I will see you back here Friday. Have a good rest of your day. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.