More Money Podcast - 310 Balancing Wealth, Health & Happiness - Andrew Hallam, Author of Millionaire Teacher

Episode Date: December 22, 2021

It's the season finale for Season 13 of the More Money Podcast, can you believe it? Soon, we’ll all be ringing in the new year and hopefully see 2022 be the fresh start we all need. Joining me again on the podcast for this very special episode is the international best-selling author behind one of my all-time favourite personal finance books Millionaire Teacher, Andrew Hallam. Andrew is on the podcast today to talk about his new book Balance, which explores how to spend and invest in happiness and why our definition of success needs to be redefined.  Andrew is a speaker, author, and personal finance writer. He’s given personal finance talks in more than 32 countries but still finds time to travel the world, explore jungles and climb volcanoes with his wife. His new book, Balance, is a combination of personal anecdotes and behavioural scientific studies that aim to share how we can get happier and wealthier. Balance is available for pre-order now but will be available on January 18th, 2022.  I loved having Andrew back on the podcast and being able to chat about investing and why we are striving for things that we don’t actually want. Our chat was the perfect way to end this year and look toward the future. I hope that you have a wonderful holiday and a happy new year and I’ll be back in mid-January 2022! For full episode show notes visit: https://jessicamoorhouse.com/310 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome back to the More Money Podcast. This is episode 310. I'm your host, Jessica Morehouse, and this is the season finale of season 13 of the show. And what a season finale. I'm so excited to share this episode with you because it is with one of my favorite personal finance authors, one of my favorite podcast guests. I'm talking about Andrew Helm. He is best known for his bestselling book, Millionaire Teacher, which I have talked about at length and over and over throughout the six years of this show, because it is one of my favorite books when it comes to investing for me. And I've probably showed this before. So maybe you've heard this before. But it is just the book

for me. And I've read a lot of books that clicked when it came to so many things. It just, it just got me. It just, yeah. And he's just like the nicest person. He has a brand new book out, which I am also a big fan of now. It doesn't come out until January, but you can pre-order it. It is called Balance. Read it. Absolutely loved it. So I know you're going to love it too. I am going to give away a copy as part of my big book giveaway. So make sure to go. Well, just listen to the end of this episode to find out how to win a copy or to pre order his book. But we are going to dive in so many good things. But just in case you don't know who Andrew is, because you know, not everyone is as familiar with him as I am a little info about Andrew. So if he isn't fighting off mosquitoes in tropical jungles or riding his bike up a volcano with his wife in a downpour or trying to drive from Canada to Argentina in his camper van. I know. Isn't that the life? He is found speaking and writing about personal finance all over the world. And no kidding, because he has actually given personal finance talks in more than 32 different countries. He's also the first Canadian to hit number one on Amazon's personal finance category

in Canada, the US, and the United Arab Emirates. And like I've mentioned, he's the bestselling author of Millionaire Teacher, Millionaire Expat, and his latest book coming out soon in January is called Balance, which you can pre-order now. So before I get to that interview with Andrew, just a few words I want to share about today's podcast episode sponsor. This episode of the More Money Podcast is supported by Motley Fool Canada. You know that I'm a die hard index investor, but what you may not know is I've got a little satellite portfolio on the side

for some individual stock investing. Don't get me wrong, I'm still a passive investor practicing a long-term buy and hold strategy with these stocks, but this has been something I've been doing for a few years now. And one of the resources I use to help with research and stock recommendations is Motley Fool's Stock Advisor Canada membership. Now, what drew me to Motley Fool Canada was that they share my same investment philosophy. They aren't about day trading or getting rich quick. They encourage buy and hold stock investing, making sure members are diversified, understand risk tolerance, and they even recommend investing in index funds. And most importantly, they want to educate Canadians about building wealth just like I do. So if you're interested in learning more about stock investing specifically, consider joining over 70,000

of your fellow Canadian investors today by signing up to Stock Advisor Canada. And if you visit fool.ca slash Jessica, you can save 66% off your membership. Once again, to sign up and get 66% off, visit fool.ca slash Jessica. Welcome back to the show, Andrew. I think this is your third time maybe on the show. I don't know. But I'm so excited to have you back. And I'm glad because I feel like I've always asked you, I'm like, Oh, are you gonna write another book, another book, and you have a new book out, and I'm thrilled about it and loved it. So so excited to have you back on the show to talk about it. Yeah, thanks so much for the opportunity. I'd love to talk about it. Yeah. So with, I guess, you know, you have some very successful books already. What inspired you to write this new book called Balance? It represents, for me,

it was a personal thing, Jessica, because it represents me far more so than the money thing. So I'll give you an example. Obviously, in this book, I talk about investing and I show people in balance. I show people how to best invest for simplicity and to give the person the highest statistical odds of success, not only on an academic asset allocation level, but on a behavioral level as well. But people over the years who don't know me have often said to me, because I do a lot of talks, so travel the world doing a lot of financial talks. And those who don't know me often say, well, you really like personal finance and you really like money. And I say to them, no, I think you might be missing the point.

I really love life. Like, it's life that I love. Money in itself is just a tool. And I realized, wow, if other people are getting that perception of me who don't know me very well, then I think society in general has that perception of the pursuit of money or at least a desire for the pursuit of it without necessarily asking themselves the question of, well, why? What's the point? And can money enhance your actual level of success or your level of life satisfaction? satisfaction. So this is something that, you know, when we left Singapore in 2014, I was teaching high school personal finance and high school English. And we were, we decided we'd take one year off. And then one year led to two, which led to seven. And we just continually,

we're globally nomadic and we've been loving it. And the experiences that it has given us have been incredible in that often I get flown off to some place, some swanky place where I'll speak to a group of people at a business. And they're all conventionally successful. And the CEO might take us out for dinner afterwards to a five-star resort and then we'll spend some time hanging out with these people and they're fun and they're cool and we enjoy it but then we'll fly back to say where our camper van is in Guatemala and we'll hang out with these Argentinians who are raising

their kids in an RV as they try and drive from Argentina to Alaska. So Peli and I spent 17 months living in a camper van in a quest to drive from Canada down to the tip of Argentina. And the contrast was awesome, Jessica, because we would be on this journey. And my wife would organize all of the requests for financial talks. And so she would corral them into specific chunks of time based on certain geographics. So for example, requests for Asia, she'd say, okay, we'll be available for Asia from this point to this point. So we might spend like a month in Asia and I'll be talking at insurance companies and banks and international schools. And then at the end of that month, we fly back to this life, hanging out with completely different sorts of people.

And for me, I recognize that if I were to actually define success, in most cases, I would be defining the people who we would be hanging out with around a campfire on a mountain in Mexico as more successful, raising their children in this RV as they played music along the way, than the CEOs of so many of these companies that I spoke at or spoke for. And that might sound really weird, but when it comes down to identifying why we do anything, like why do we want to do anything? Why do we want an education? Why do we want to enhance our career? Why do we want more money? Ultimately, when you continue to ask anyone those questions, why

do you want anything? Why do you want a new car? Why do you want to go run around the block? Eventually, if you keep asking why, it always comes down to life satisfaction. So people will say, well, it'll make me happy or it'll make me fulfilled or make me feel more secure. Ultimately, that's life satisfaction. So this is our goal. As I see it, our end goal is to try to enhance the lives that we have. And the lives that we have can be short. We don't know how long those lives will ever be. So the idea is not to squirrel away a ton of money at some point in the future where you think eventually you're going to be happy. It's to have an eye on today and an eye on tomorrow. So I wanted to identify success and put an actual definition to it to say

the conventional definition of success is super screwed up. It's super screwed up that success truly is far more holistic because you can have all the money in the world, you can end up owning your own law firm and drive a Ferrari, but if your relationships aren't solid, you're not a success based on my definition because all of the research suggests that life satisfaction hinges on relationships far more so than it does on money. So yeah, a really long explanation as to why I wanted to write this book, Balance,

is essentially that. Yeah. No, I think that's so important because, yeah, like you said, there's, you know, and, you know, me having a podcast where I'm talking to so many different people on the topic of money. I think, you know, sometimes we forget the purpose of money, which is like you said, and is simply a tool to achieve whatever you want with it. But ultimately, if you keep on asking yourself why, you know, it should be for my, you know, own life satisfaction or, you know, very well, if you keep on asking yourself why you can maybe identify that, you're like, oh, actually, maybe the reason I want that is actually not a very good reason. And I think that's probably when I see people getting caught up in social media or all of these things going on right now where it feels like, oh, I need to buy

this type of investment so I can get money really quickly. And then you're like, well, why do you want to get rich quickly or and stuff like that? Usually it's like, okay, I it's usually not life satisfaction. It's just so you can feel like you're keeping up with your peers or you're not falling behind. And usually it has something to do with, you know, just comparing yourself to others and stuff like that. And I think that's such a important and sometimes missing element when people are getting into personal finances, really identifying, but why do you want money? And also, why do you want that much? You know, when you're creating your own goals or benchmarks for certain dollar amounts, why do you need that much? You know, lots of people I know are like, I want to get a million

dollars by the time I'm 30. It's like, why? And why do you need a million dollars? Like, what are you going to do with that money? Is that actually going to make you feel any different? So I actually really loved the sections at the beginning part of the book that really focused more on, you know, happiness and really defining what that is. Because I think for so many of us that just get caught up in this kind of consumerism world, especially I think over the course of the past couple of years with the pandemic, we've all been at home looking at ads more, feeling like we need to buy stuff for our houses and we're buying houses and stuff like that.

We've kind of lost the plot a little bit and forget like, wait, why are we doing this in the first place? What do I actually want in my life? Yeah, it's like what we think will make us happy and what actually makes us happy don't tend to be the same things. Daniel Kahneman, the behavioral economist who won a Nobel Prize, he says people really don't know what gives them experiential happiness. They chase things they think will make them happy, but they don't really know what those things are. So he had identified

happiness as falling under one of two categories. One was reflective happiness. So reflective happiness is when I ask someone who owns a brand new BMW, are you happier driving that than you were driving or you would be driving a 10-year-old Honda? Reflectively, they'll say yes. So that's reflective happiness. Almost like it's a rationalization to an extent. But if you were to actually hook that person up, you take all the people that drive the high-end vehicles, and you're literally able to hook them up to medical devices that actually were able to measure levels of satisfaction while driving,

thrills while driving, enjoyment while driving. And you were able to do the same thing with people that had lower end vehicles the research suggests that based on hedonic adaptability which is basically you get used to whatever whatever it is that you own based on that there's no difference between how people feel driving a high-end vehicle versus a low-end vehicle because we just get used to what we're driving so there was a fascinating study done at Michigan State University, and this was essentially what they did. They wanted to isolate these variables whereby looking at, well, what was it that people were driving and were they more satisfied on a day-to-day basis with their driving experience

because they had certain types of vehicles? And it suggested that no. I mean, if you, so Jessica, if I, you know, you and I went down to a car lot and I said, okay, here's a top end Audi and I want you to drive it and then tell me from one to 10 how much fun that was. And then here's a low end 15 year old Toyota Tercel. Once you drive that around the block and come back and you report the same thing, you're actually going to report that the Audi was a lot more fun. Right. So because it, because it is right. I mean, it's faster, it's tighter. It handles really well. It looks beautiful. same thing, you're actually going to report that the Audi was a lot more fun. Because it is, it's faster, it's tighter, it handles really well, it looks beautiful.

But what ends up happening is after we buy it, we get used to it. It just becomes this thing that we get used to. Whether it's a new purse, a new watch, a new anything is exactly the same. And we're no longer focused on it anymore. Like when you go around the block on that first test drive, all you are focusing on, Jessica, is that car and how it feels. But when you're driving to work, it doesn't matter whether you're driving a BMW or you're driving a top-end Tesla or whether you're driving a junk or Honda, as long as it doesn't break down, your experience is going to be virtually the same because you're going to be thinking of other things. You're not thinking about how your car is handling.

You're thinking about, oh, I'm really glad I made that amber light, or look at that jogger running down the street, or am I going to be late for work or picking up my child after soccer practice? Life is going to bring these thoughts in. So the idea that we would stretch ourselves financially for virtually any material acquisition ends up being quite foolish in most cases. Because often then we end up going into debt to purchase these things that don't enhance our life experience.

Whereas if we take that money, do one of two things with it. One, we could take that money and spend it on an experience, or we could take that money and invest it for our future to give us more choices. And those choices, if we're able to use time effectively to augment experiences, especially with people we love, this is what enhances life satisfaction. So I like to think about like the, you know, in the book I talk about the campfire story. And so Jessica, you and a group of friends are hanging around a campfire 15 years from now. And you're just talking. You know, you're sharing memories.

You're not going to talk about the car you bought back in 2023. You're not going to talk about the iPhone, the brand new iPhone 22 that you bought in in 2023. You're not going to talk about the brand new iPhone 22 that you bought in 2026. None of that stuff is going to enter into the equation. You're going to talk about the things you did with your friends, the fun things you remember, the stories that you remember, because they become part of your identity. So when we use money, we have to try to use money to enhance our experiences, especially with time, time, you know, spending time with people we love and respect versus stuff, because stuff does not enhance our experience. Yeah. And one thing I've also, you know, recognized because it's I've always been pretty mindful, I think, with, you know, material things

and spending and, and all that kinds of stuff, but recently had to move. And so you're literally putting everything that you own in boxes. So you have a really good view of what you own and what's crazy. So basically, when we had to sell our place, we had to pack pretty much everything into boxes, put it into storage, and then the stagers came in to make our place look nicer than it really was. And then we got back into her place and we're like well you know we'll just keep everything in boxes because we're going to move out so it'll be you know silly to unpack and pack and we lived like that for like a month and i'm like so if we were living our lives without most of the stuff that we own because it's just in boxes we clearly don't actually need that much

to enjoy you know do our day-to-day. And it's just interesting just to kind of think like that. You're like, we don't I didn't even think we had that much stuff. But clearly, we had boxes and boxes of stuff. And like, oh, that's interesting. So yeah, it's something that I am, you know, especially as at the forefront, like, you're looking online and you know, on social media, especially and it just seems like everyone is always just getting new stuff and buying stuff.'m constantly reminding myself of you know you know that if you buy that thing it will give you some excitement and some joy for a very small amount of time and then like you said it'll just become regular and but also I really appreciated that the you know section you had on cars I remember you talked about that in millionaire teacher as well because people really do I mean

cars are expensive a new car is very expensive. And my husband, he's owned his, you know, it's a crummy little Hyundai hatchback. He's had it for a good like 11 years or so. And, you know, it's gotten some damage over those years. And he's like, oh, maybe it's time to get a new one. It's fully paid off and there's literally no problems with it. And I'm like, well, why? And part of it is just other people, you know, he works at this one studio and people have nicer cars than him. And so it's really'm like, well, why? And part of it is just other people, you know, he works at this one studio and people have nicer cars than him. And so it's really just like, oh, it's because you just want to kind of keep up with the Joneses. Like that is actually what it is,

but there's nothing wrong with your car. He's like, yeah, you're right. And I'm like, wouldn't you rather put, you know, that extra money, not into just a new car that again, is just going to be a place to get you to A to B. It's not like we're doing joy rides or whatever that, you know, into some other situation like, yeah, travel or, you know, experience. So, so we're going to keep the car for a while. That's funny. You know, sometimes, you know, when it comes down to a material acquisition, if it can bring you an experience that you ordinarily couldn't have, you wouldn't have, then it's definitely worth the purchase. So in my book, I wrote an example of a friend of mine who I met, I guess I was probably 19 when we met.

He was, I don't know, 10 or 15 years older than me. And we met, we were into bike racing. And he's had some health problems lately. And so he's put on weight. He has some issues with ligaments and such, knee pain, that kind of thing. And so he won't, or he wouldn't ride with me anymore or ride with his other friends. Often didn't ride at all with anyone. And so he just ended up getting heavier. And then he ended up buying an e-bike total game changer so now as a result of

that purchase he can do something that he couldn't have done before and that's spending time with his friends out riding and he can dust us if he wants to so i mean this kind of thing is where if the material acquisition will actually allow you to do something, especially when that thing involves other people. And it's something that you would do frequently and do regularly, then it's definitely worth buying. If it's something that you only do once in a while, like my friend rides that bike all the time, like six days a week. If it's something that you would only do a few times a year, then rent it. And that's's with boats like honestly boats in most cases i mean you go into if you live in by the ocean you just watch as you go by the harbor you watch how many boats

don't move and realizing that holy smokes you know a boat i mean the saying is that a boat is just like a hole in the water that you pour money into because you've got to maintain it and the mortgage fee is that sort of thing most people don't use them. Those that do, awesome. Using a boat is great. Brings together your family, brings together your friends, brings together great activities. But if you're just going to use it for a couple of weeks a year, total waste of money. Yeah. Well, that's kind of what I think every summer when everyone's going to a cottage. I'm like, oh, I wish we owned a cottage. I'm like, but we would only visit it a certain amount of times per year. And also, I don't want to, you know, have to just go to the cottage when I want to go on like a vacation or something like that. So like, why do we need to buy this big thing? That'll, I mean, be very

expensive. Why not instead rent it once in a blue moon when we, you know, want to kind of have that experience. So I think, yeah, I agree. Sometimes it's about really figuring out, you know, where do we want to put our money, but also do we need to buy the thing or can we just, you know, pay a fee to have it temporarily? Like, why do we have to own everything? Right, exactly. I mean, because you maintain, you own something, you have to maintain it, you have to pay taxes on it, the cost of ownership far exceed what the sticker price of that entity is. Yeah. I also really appreciate there's an interesting part that got me thinking about part of our happiness also has to do with who we actually hang out with. And I've always,

you know, thought that like for me, I've always, you know, pretty much had kind of like similar friend groups for the most part over the years. And we've always kind of had like the same kind of income levels. And for me, that's I never really thought about it. But I never felt like hanging out with them made me feel lesser than like, oh, gosh, they they earn so much more. And I feel terrible about myself or something like that. Or the people that I do know, who do earn a lot more, there, lots of them are in the personal finance community. And so they're just as frugal as me. So you wouldn't even know that they make a lot of money because they don't have flashy things and stuff like that. But it got me thinking, yeah, depending on what neighborhood you're in or who you hang out with,

it may have a big impact on how you feel about yourself and your own financial situation. And for me, it's like, yeah, having someone people on the same kind of wavelength, or even just mindset when it comes to spending, you know, I don't know anyone my age, I'm in my mid 30s. Now that you know, goes to really fancy restaurants. So I never feel like, oh, gosh, we have to go to fancy restaurants. Like, no, we just go to like the same, you know, kind of places that are like kind of middle, you know, a cheaper sushi place or something like that. And for me, that's actually been really helpful in just like maintaining my own happiness being around people that are kind of on the same page you want to kind of speak to that and kind of how that can have a big impact uh how on how

you feel about yourself and your money yeah that's that's huge because the it affects you on a cellular level as well so research suggesting that how much money the people around us have and what they obviously, a reflection of that becomes what they acquire, affects not only our happiness, but it actually affects our levels of wealth and our levels of stress. So the idea that somebody would overextend themselves

to live in a swanky neighborhood where people earn a lot more money than they do is bad both for their happiness levels and for their health levels. So yeah, that UK-based study, which I referenced in the book Balance, to me was fascinating because it really looked at relativity. Somebody could earn $200,000 a year or $300,000 a year. But if you're living amongst people who earn $600,000 a year, odds are high that on aggregate,

you're going to be miserable. There's another thing that I thought was really interesting was that the U-shaped component of happiness, where David Blanchflower, who is an economics professor, studied happiness in 132 different countries. And he looked at happiness relative to age. And the age is when we're affected by peer pressure and a lot of this is really that peer pressure that we're talking about isn't it Jessica it's like who's around us who's affecting us who's feeling like maybe in

our own subconscious way or conscious way we're not feeling as worthy and the research suggests that happiness is tends to be U-shaped. So we tend to be happiest in our early 20s when we figure that we can conquer the world. And then as we get a little bit older, that happiness level or that life satisfaction level starts to decline. And obviously we take on responsibilities. At that point, there are children. We're faced with those student loans. We're actually starting to pay them off.

There are career issues as we start to want to aspire to things that we don't have. And sometimes we bump up against difficulties or failures along the way. But one of the biggest reasons for this dip in life satisfaction, which, by the way, ends up actually coming up by about the time people reach the age of 50. So it's weird to think that on aggregate, 50-year-olds are happier than 35-year-olds. But on aggregate, it's true. It's good to know that I'm not at that peak. It gets better. It gets better. But I don't think that we have to be a statistic either. So one of the things that happens when people hit age 50-ish is they say, well, to hell with that. I want to be who I am.

I'm not going to feel pressured by the people around me. Screw that. I'm going to be true to myself. I don't have to try and impress other people anymore. So that realization, though, as I talk about in the book Balance, is wasted if it takes so long to come to that. So my whole premise here is that try to think about that when you're in your 20s and 30s and early 40s, where you recognize and truly recognize that it's so important to be you. Be true to who you are now. You don't need to be in your 50s or 60s to get to that point. You might not even get to that point because life is like a dark hourglass. Like I said in the book, it's like everybody has this dark hourglass at birth and you can't see how much sand you have in it. It gets tipped at birth and at some point the sand

runs out. And so you really want to try and live the best life that you can for today and for tomorrow. No, absolutely. I think that's, that's the biggest thing. And I definitely think a lot more about that as I see, you know, my parents approaching retirement and just, you know, you, now, and same with my husband too, his parents are are retired it just makes us really think it's like we've got set you know hopefully you know decades in front of us but we don't want to just push everything like oh we'll have a good time retirement I used to think that oh no I'll relax I'll have a good time and enjoy life in retirement I think that used to be kind of the the way of thinking because you're just like grind it out and you're working years and then retire and then

people die 10 years later I'm like I never want to do that. So it's always so important to like be living for today, but like planning for tomorrow. That's like the key thing. Absolutely. And, but also like, I think what's difficult, like that's easier said than done because the difficult part is that most people don't think like that. Most people are, you know, just struggling through it, just, you know, grinding it out and to have a kind of a different mindset. And, you know, and maybe, you know, being a bit frugal, or just being more specific on what things you'll spend money on what you won't and not really keeping up with everybody. Sometimes there's some conflict there, because it's hard to not kind of go with the society and what everyone's doing, you're kind of an outlier a little bit. And that's,

I think, the hard part for people to actually put into practice is like, I'm just, or you're used to what you're used to. It's hard to change those habits. Yeah, you know, when you look back, or you're focusing on this life satisfaction component, and let's talk about retirement for a second. It's this goal for so many people, early retirement. And yet the research on this is so compelling that early retirees die younger. And so many people don't recognize that what they're missing is a sense of purpose. So once you retire, the idea is that, I mean, I'm going to play golf all the time and do whatever I want to do. You don't have a reason necessarily to get up in the morning.

You're not challenged by anything either. So you're not typically mixing with different generational groups. You're not mixing with people in their 20s, 30s, and 40s, as you would be if you were working at some kind of job at some capacity. There's that social interaction and that mental engagement that keeps us physically stronger, mentally stronger. So people that retire earlier end up with earlier onset of dementia and things like Alzheimer's. And of course, anyone who's listening to me here, I'm not going to say every single person who retires early is going to get dementia or Alzheimer's. That's not what I'm saying.

But on aggregate, when we talk about averages, that is the case. And so the idea here is that sort of to follow, I like to think about what the Japanese refer to as ikigai. And I mentioned this in the last chapter of the book Balance, is to rethink retirement. So by that that I mean you could have a job full-time, you're a full-time lawyer or a full-time doctor whatever you're doing, full-time teacher, and that when you stop doing that if you choose to take something up part-time. And the Japanese are really good at this. They have these silver haired centers in Japan. They have 1,600 of them. They're

basically for people of retirement age. Yeah 1,600 of these things. And so a retiree goes in, somebody in their 60s or 70s, and they're like, hey, give me some kind of part-time job. So the cool thing about Japan is that woman who's raking the leaves in the local park could be a multi, multi-millionaire retired lawyer. And you wouldn't really know it because they don't aspire to retirement to the same degree that we do. And that is one of the reasons, too, Jessica, that the Japanese, one of the reasons it suggested that they live quite a bit longer than people in Canada, for example. There's definitely a few books that I've read over the years that are trying to get people to think differently about retirement, which I think is so important because

most of, especially young people, all we know of retirement is maybe a glimpse of what we've seen maybe with our grandparents, but also what's marketed to us, which is, you know, you're silver haired on a sailboat, just living your best life, but you're like, how often can you do that? Like that, I don't want to do that every day, then it's less special. And so I think, yeah, what you say is so important. Having that sense of purpose is, is the key. So not just having like, oh, great. Now I can be on vacation for decades and decades and retirements. Like, believe me, it's going to get old really quick. And that's gonna be very boring. And that's part of the reason for me personally, when people ask me, cause I've had so many people on the show who, you know, part of the fire

community retire early on that stuff. And people are like, Oh, is that one of your goals? I'm like, absolutely not. Honestly, I'm cool if I work full time till 65. But for me, the important part is like, I've always wanted to make sure that I like what I do. And so, you know, I don't need to retire early because I finally found out what I love to do. And I don't mind working hard to do it because it gives it gets me excited to wake up in the morning to actually do this work. And I don't mind working hard to do it because it gives it gets me excited to wake up in the morning to actually do this work. And so for me, that's what my sense of purpose is. So I have no dreams of early retirement, maybe just a shift in like how much I work and stuff like that. But having that reason, that purpose is the most important thing,

I think. And I think that's so yeah, so key and so, so important. Now, just, you know, because we just, I don't want to keep you here too long, but I love, we go really in, you go really into some of this deep psychological and emotional stuff in the book. But then, of course, you've got the good stuff, like the practical stuff, which I think is so helpful. You go really specific into it. Like the, you know, and people are like, okay, great. I want to, I want to grow my wealth. I want to be happier. What should I actually do with my money? And it's been a while since Millionaire Teacher came out. And so many things have changed, I'm sure, since then. So when you're doing your research, it was really

cool to see all the things that you put into the book, but also appreciated that a lot of the advice is similar to your old book. You're like, oh, good. He's very consistent. I like that. Because I am also like, you know, big fan of index funds. But also you talk a lot about, you know, charitable giving, which I think is really great. A lot of people, I think, forget about the power of charitable giving, not just how you can improve the world, but also how it actually impacts your own happiness, which I completely agree. And also, you know, socially responsible investing, which has become kind of more, I think, mainstream compared to like, even five years ago, do you want to kind of speak to why you want to put some of those sections in the book, because I feel like a lot,

you know, when I've read so many investment books, a lot of them don't really talk about those things. You know, the thing that I was really excited about, and it's funny because years ago, I was talking to a guy who was head of the Singapore Stock Exchange. And he asked me, what products do you think would be great products for investors? And I said at the time, an all-in-one portfolio of ETFs. And they didn't exist at the time. There was no such thing. So this would have been, I don't know, maybe 2010. And later, I remember actually being a little bit embarrassed that I brought that up because nobody was creating one.

And I remember just thinking, I guess, it could have been a lot of other things that he'd created instead of one of those, or that they tried to launch on the Singapore Stock Exchange. But now when I look back at the look at research on, of course, now we have all-in-one ETFs. And I look at the research on them and I think how incredibly compelling they are as performance enhancers for, they would be for just about everybody for so many different reasons. And we have socially responsible ones as well. So it's just this notion that when you're investing in an all-in-one ETF, you're not having to make a decision as to which ETF you're going to buy

in which given month. And when you are having to sell some of it, likewise, you just sell a portion of that ETF. You don't have to worry about which one you're going to sell. And research suggests that people that own these all-in-one products, as simple as they are, end up outperforming people that end up buying individual ETFs. And people that buy individual ETFs, many of them will say, well, this is cheaper. They'll say it's a little bit cheaper. Not so much cheaper, but a little bit cheaper. But the behavioral component of it is so much more important. Just that set it and forget it component of adding that money every single month to that all-in-one ETF. And the research that Morningstar has done has suggested that the people that buy

these all-in-one ETFs do not underperform the very funds that they own. Yet people that buy individual ETFs typically underperform the funds they own because they get into an essence of market timing, at least with some of the individual ETFs. Which ones am I going to buy right now? So it's one of those things that I so, so highly recommend that and say working with a robo-advisor because it's much the same thing where that money just goes in, set it and forget it. You're not going to tinker with it. I say investment portfolios are like bars of soap in the shower. The more you mess with them, the smaller that they get. The idea of the socially responsible funds is a really interesting one too because iShares has come out with all-in-one portfolio

of ETFs that hit the ESG standards. And these things, they're not going to save more trees and help the environment necessarily as dramatically as perhaps a marketing material might suggest. But it allows us to feel better knowing that we're not profiting necessarily from, say, big oil companies. So at least we're not profiting from things that don't align with our value systems. Everybody's value systems are going to be different. So even if you look at the holdings of your all-in-one socially responsible fund, you'll see stuff in there that you don't like.

You might see Coca-Cola and you might be saying, well, look at the obesity that Coca-Cola has contributed to. So there's never that perfect fund that's going to suit with your values. But I do think that it's a step in the right direction and it makes people feel better. Back to the environmental part of things. When you're conscious of, say, your investment product in this vein, in this capacity, odds are you're going to start to be conscious of the environment in other areas. You're going to turn out the lights and you're going to think about where does electricity actually come from? And you're going to think about perhaps driving less and buying less crab.

I mean, these are the really, these are all the things that I think tie together so well because the less stuff we buy, the better we are for the environment because all that stuff involves, obviously, we pollute the environment massively when we produce it. Like, take your iPhone, you know, that in itself, just the iPhone. I mean, the production and the toxins that go into the atmosphere is when you're creating plastics, for example, not to mention the shipping of that product and then the disposing of that product. So when we come back to the whole life satisfaction concept too, when we are trying to help other people, and this is what's super cool,

and this is that part of that generosity, we're trying to help other people or doing what we can for our environment. It actually helps us all on a life satisfaction level. On a cellular level as well, it actually makes us happier and it actually makes us healthier. So it's just when I look at this, I think, well, it's awesome. Why would we not be generous with our time? Why would we not be environmentally responsible? And if an SRI fund actually helps contribute to that, helps you sleep better at night, knowing that you're part of a bigger movement, then I think that's awesome. Yeah. And you've also kind of mentioned some

of the things in your book. I think a lot of people are scared to maybe invest in something like that because, oh, what if they have lower returns and you know typically they do have higher fees but like you mentioned in the book and i've read lots of studies about this as well you know typically they honestly perform similarly if not a little bit better than typical index funds so that's you know if you're but i also appreciate that does remind me actually because i always like this in the millionaire teacher you do touch on this in your book too working with advisor and i get questions all the time like how do I choose the right you know financial planner or advisor and honestly you have no idea I talk to people every single day and get their personal

experience of working with an advisor like a bank or a wealth management firm and it just always makes me think of you and just like how to really kind of talk to them and understand where they're coming from, which is, you know, a place of selling and trying to scare you into never investing in an index fund because of all the reasons, like, honestly, all the things that you mentioned in your book, I'm like, oh, my gosh, I've talked to advisors and they have said those exact things like, well, if there's a market crash, your portfolio is going to go, you know, you know, it's going to be tied to the market. So it's going to go way lower than some of our actually managed mutual funds and all this kinds of stuff.

I'm like, oh, gosh. So I highly recommend everyone to read that section. It's like a refresher. But also, you have some great information about if you don't want to use one of those advisors, how do you still work with a professional but also invest in index-based products, which is what I'm always kind of promoting people to do. So appreciate that section. Yeah, I'm glad. You know, it's funny, Jessica, because I used to think that the financial advisors that promoted actively managed funds were just really selfish people. And they did it

to help their financial bottom line, because they and in turn their bank or their service company reaps rewards from that through either commissions or through the trailer fees associated with the expense ratios on the funds themselves. And so it's the investor who ultimately pays this price. But then I started learning a lot more about the certified financial planners process, the education, and it is substantial. I mean, I'm not going to say it's not an impressive credential, but it's not the same as a nursing degree or a teaching degree or any degree, because you can complete the actual training as intense as it is. You can

complete it in six months. I don't know about that. As somebody who's training to become a CFP, I'll tell you, well, maybe it's because I'm also working full time. Well, come on, you're working full time. Yeah, maybe that's why, but it is intense, but I agree. There's, there's, and you mentioned this in your book. It's, it's, well, number one in Canadaada at least they only started just in the past year or two implementing that you can only um uh train to become a cfp if you have a bachelor's degree whereas before you didn't even need a degree to do it um but also what i found and this is true is in the studies they do not talk about yeah the benefits of index investing versus active they

they do try to i guess stay neutral which i. They don't want to give you a buy. But there were so many things in the textbooks I've been reading for this training. And I'm honestly just training to become a CFP just for my own personal knowledge and information. I never want to be an advisor. But it's fascinating how many times in the textbooks they talk about it's important to not push your client towards one product or another. It's important to not just focus on the fees that you'll like. They're in the textbooks telling you not like try to not be biased or try to not just sell advice first. I'm like the fact that this is over and over again in the textbooks is alarming, but it makes a lot of sense because every single advisor I've ever come and contacted who does sell some sort of product, not a fee-only inaccurate. And it is largely due to, I think, the training materials.

And also, I guess, the institution that they're working for. Because I know even if they're like, oh, no, I just work on salary. I don't get a commission, all this stuff. There's bonuses and quotas. So they have to sell. So you're kind of in a situation where it's like you're going to come in contact with these practices. In the book Balance, I referenced a study that was done. Actually, it was a Canadian study done and published in the Journal of Finance.

And it looked at what products financial advisors typically sold their clients. And they were, by and large, almost entirely actively managed funds. And then it tracked the performances of those clients to see how they performed. And over a 15-year period, they underperformed on an equal risk-adjusted basis. They underperformed their equivalent portfolios of index funds by about 3% per year. Now, 3% per year is massive when that's compounded over your working lifetime. That literally is the difference between you having $450,000 and you having a million. Like it's that big a deal over a working lifetime. But the part that I found most compelling in that study was that the advisors,

and they assessed 4,500 of them in Canada, that the advisors ended up purchasing the same products that they assigned to their clients. This is when I realized, wow, okay, they're really not bad people. They just truly believe that this is what they should be buying. And so they, in turn, they did a couple of things. You might be wondering, like, how did they underperform? Because they, in turn, also underperformed

equal risk-adjusted portfolios of indexes for their own personal money by 3.5% per year. And you're wondering, wait a second here. If the average expense ratio on a Canadian mutual fund is 2% or 2.3% per year, how on earth are these advisors underperforming by more than three for themselves and for their clients and and what's in what's happening what they tend to do is and again this

isn't part of the cfp training but it should be is that they performance chase so by that i mean they look at funds that have had a good five-year record and they buy those they say to their clients hey look you're into index funds and Forget that, look at these funds. They've beaten the index over the last five years or ten years. We're only going to get you into index beating funds. And they believe that because they buy the same ones for their portfolios. And then something called a reversion to the mean takes place whereby the funds that outperform during one time period typically then go on to underperform. And so what these same advisors do with their own money and with their clients' money is

they end up selling those funds and then purchasing the funds that they see now have the best five-year track record. And then the process repeats itself. So the fact that these people would be underperforming by three, three and a half percent per year is a result of one, fees, and then two, just silly human behavior. And that, this stuff is not part of the CFP training. So they're not bad people. They're not bad people, but they have to learn this stuff on their own if they're going to learn it. And they have to work for a firm that encourages them to learn it. Yeah, which there aren't that many out there. I mean, you know, the only kind of wealth management firm that I'm a big fan of because I love their content

as well as, you know, PWL Capital. And I've had Ben Felix, who I know you mentioned in the book on this show. And, but they're one of the few firms that are pro-passive investing. So, you know, there's not a ton out there. But yeah, no, I totally agree. Like a big reason I wanted to pursue this designation

is like, I wanted to know how these professionals in the industry that have, you know, all of this kind of power information, what do they learn? What do they know? Because I want to know their background. And yet it was kind of shocking. I felt like I came into it with a very different perspective, because I've done so much other, you know, external self-education. And yeah, it was shocking. Like the amount of time dedicated to talking about mutual funds compared to like ETFs, you're like, okay, why are we still talking about mutual funds? You know, so yeah, it's fascinating. It's fascinating. But anyways, I could talk to you forever, but I will not do that. I would just encourage everyone to grab a copy of your book. It's now one of my new go tos. I mean, I've been you know, this I've been recommending millionaire teacher for years. It's now I feel like this is a such a great addition to anyone's library because you know, you talk about like the really important deep stuff, the wise, which I think we don't pay enough attention to, but then also the practical stuff. And I think sometimes even people like me need, I just like that confirmation of like what I know and stuff and what I, you know, it's always nice to kind of read that important stuff. So

before I let you go, I guess, you know, where can people find more information about the book or grab a copy by the time? So when this episode airs, it will be the end of December. So I know maybe it won't be available quite yet, but people can pre-order this, right? Yeah. So you can pre-order it on Amazon or any online, or any online bookstore. So the book will actually be released January 18th. So the goal is that if someone actually does pre-order the book, they'll actually get it on January 18th. Like it'll actually arrive. So the books are ready to go. They're in a warehouse. They're ready to be shipped. So, um, if you go to andreahallam.com as well, I have several retail links on there. So right there on the homepage at andreahallam.com, you can see links to actually purchase balance and you could sign up for, I have a, a pre-order bonus package there as well

for anyone who wants to sign up for that early. Amazing. And I know you always have been, you know, write articles and stuff like, you know, you always have such great articles. I follow you on, you know, Facebook and stuff. And, you know, if people want to kind of see what else you're writing, where, you know, what are some other places they may find you? Well, I typically put, I put it all there at andreahallam.com is where I'll put all my stories. I write for Asset Builder, which is a financial services company based in Texas. But I'll usually just put the link to that story first on my website and send people off to the Asset Builder because those are the guys that pay me. So I do the same thing with the Global Mail.

So I write regularly for the Global Mail. I can't cut and paste that straight into my website, obviously. But I'll say, hey, wrote this for the Golden Mail, and I'll send the link. So I think adriahallam.com is probably a good place to start. I write for a Swiss-based brokerage as well, and so I'll link in stuff there to my website as well. Perfect, perfect. Well, thanks again for coming back on the show and, you know, sharing your new book with all of us. I'm so excited for other people to crack it open and read it in the new year. Thanks so much, Jessica, for allowing me to speak about balance. I'm so excited about

that book. Thank you. And that was episode 310 with Andrew Hallam. You can find out more information about him, his books and his latest book at andrewhallam.com. I will, of course, include more information and some links so you can easily find more information about everything that we talked about in this episode in the podcast episode show notes, just go to Jessica Morehouse.com slash 310. If you want to find out any episode I've ever done the show notes for them, you know, for example, if you want to look up a specific guest that I've had, just go to Jessica Morehouse.com slash podcast or Jessica Morehouse.com slash the number of that particular episode. So got lots of things to share with you,

obviously, because it's the last episode of the season. So stick around just have a few words I want to share about today's podcast episode sponsor. This episode of the More Money Podcast is supported by Motley Fool Canada. Interested in leveling up your stock market knowledge and skills? Want to dip your toes into investing in individual stocks by taking a methodical get rich slowly approach? Then consider signing up to Stock Advisor Canada. I've personally been a member for two years now, and I'll tell you why as a loud and proud index investor I signed up. Because they are all about playing the long game. You won't see them promoting hot stocks you can flip for a supposed quick profit. They are focused on educating Canadians about long-term

stock investing and even recommend holding stocks for at least five years because, as we all know, patience is an investor's greatest asset. Not only does membership include buy and sell recommendations, weekly updates, special reports, and member forums, it also has their premium hub with members-only live streams, exclusive videos, and more. So no matter if you want to start investing in stocks or just improve your overall investing knowledge, consider joining over 70,000 of your fellow Canadian investors today by signing up to Stock Advisor Canada. And if you visit fool.ca slash Jessica, you can save 66% off your membership. Once again, to sign up and get 66% off, visit fool.ca slash Jessica. Okay, so first and foremost, this is kind of your last chance to enter to win any of the books that I'm giving away. If you go to either the show notes, JessicaMoorhouse.com slash 310 or JessicaMoorhouse.com slash contest. That's where you'll

find all the books that I'm giving away. I'm going to be drawing winners in the next week or so. So make sure to enter to win JessicaMoorhouse.com slash contest books, free books, guys, who doesn't like free stuff. And then I will reset and then as season 14 starts up in mid January, I will let you know well, I usually just drop the episode, it'll be mid January, most likely, actually, do I have it written down in my little spreadsheet? Oh, I do. So currently, and don't quote me on this, but it's most likely going to kick back off January 19. I think that was a date that seemed reasonable, because I will be just moving into my house. I will not really have a studio set up, but we'll figure it out. But I've

already got some guests recorded in the can for next season. So I'm super excited to share those episodes already. So and I'm going to be giving away more books. There's more authors next year. So anyways, enter to win these books, and then, you know, come back next season in January, and I'll have more books to give away as always. So like I mentioned, this is the final episode for season 13. And funny thing, actually, I feel, I feel like this. So in my family, the Morehouse family, we have this thing that we say lucky 13. We don't know, I don't know where it started. But apparently, that is our family's lucky number. And it just always pops up in so

many weird times. For example, 2013, that was the year I got married. So we always thought that was a good, you know, good sign for the marriage. And this is the 13th season. And personally, I feel like it was one of the best ones I've done, or at least for me, it was the one that I felt the most connected to, had the most fun with, had so many amazing guests, so I do, if any of the guests are listening, a huge shout out to all of you for joining me. It was a pleasure to have each and every one of you on such a great kind of variety of topics that we got to kind of dive into, which was really exciting. But, you know, it's been an interesting year. I guess, yeah, I can kind of talk about this as the

end of the year. I am going to be doing a full like solo episode, sharing like a life update and stuff like that in January. I'm not going to do one this season just because, I mean, I'm not going to do it like the day before Christmas Eve and no one cares, you know know what I mean? So and also, I feel like I'm going to have so much more to share with you once I actually do move into my new house and, you know, enjoy, take some R&R, you know, for the Christmas holidays and stuff like that. So anyways, that's coming. But I just kind of want to share just a few little thoughts. Number one, you know, it was kind of cool. I got so many milestones this year, right? I hit over 300 episodes. That was kind of crazy. That's a lot of episodes. Also, I've surpassed six years

of the podcast. Now we're at six and a half years, which means we're going to get to seven years. And man, I can see me getting to 10 years. That's actually really cool. Considering to you know, I know, I bring this up if you're atime lister. I started this podcast when I was still working my, you know, full-time corporate job in marketing over five years ago. And I started it, did it for a full year. I put out an episode every single week for a full year while working full-time. And looking back, I don't know why I did that. That's too many episodes. That was a lot of work. And it was, you know, led me to where I am now, you know, cut to five years later, I'm running my own company, which I incorporated this year, which is really cool. So I am technically a CEO and doing what I love, which is being able to provide, you know, information

and education, financial literacy to Canadians and Americans and all of you amazing people who are listening in Europe and South America and Asia and Africa and Australia and all I mean, all over the world. It's kind of crazy. I wouldn't be where I am not to get sappy, but I wouldn't be where I am today without you, the wonderful listeners and supporters of this podcast. So a really big thank you to you for listening in, sending me, you know, wonderful listeners and supporters of this podcast um so a really big thank you to you for for listening in sending me you know dms and emails and uh nice you know pieces of feedback

um i really really appreciate it really does um help a lot few things um just to to keep in touch over the holidays because i'm not going to be like going really anywhere i'm just gonna be on my couch or my parents couch stuff in my face taking naps um so if you did want to you know uh connect you know i am on twitter not as active as i used to be because i just don't feel like sometimes i'm that clever you know what i mean like some people are really good at twitter not that person um but so you can find me on twitter at jessica uh no wait what is it at j-e-s-s-i underscore morehouse and i know i really sold it yeah please follow me on twitter why would you um but i am having a lot more fun with Instagram. So make sure to follow me on Instagram at just guy more house,

hoping that by the time this airs, I'll have reached 10,000 subscribers that are followers rather. That's the goal of the year. So we'll see what happens. Is there anything else to share contests? Thank yous. I think that's kind of it. So yeah, I'm just gonna leave it there. I wish you a very happy holiday, whatever holidays you celebrate during this time, or if not, I hope you're gonna take some time to relax and enjoy the end of the year and make some plans for a really positive and exciting and uplifting new year in 2022. I personally can't wait. I love this time of the year personally. But yeah, thank you so much. Really appreciate it. And again, a big shout out and thank you to my wonderful podcast editor,

Matt Rideout, who's made this year of the podcast so much easier because I don't know why I was trying to do everything myself. So this has been a huge weight off my shoulders. Really appreciate all the work that you've been doing for me this year, Matt. So yeah, that's it for me. I will see you in the new year. Have a great holidays and see you in 2022. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.