More Money Podcast - 353 Exposing the Canadian Financial Industry - Jason Pereira, CFA, CFP and Partner at Woodgate Financial Inc.

Episode Date: February 8, 2023

The Canadian financial industry can be overwhelming, there are so many different designations, plus what's the difference between a financial advisor and a financial adviser? To help answer some of these questions about the industry and more, I have a long-time financial planner and industry advocate Jason Pereira on the show today.  Jason Pereira is a CFA, CFP (in Canada and U.S.), RFP, TEP, FCSI, CIWM, PFP, and FMA, plus holds two degrees including his MBA. He's the founding President of the Financial Planning Association of Canada, a director of the Institute of Advanced Financial Planners, and a director of the Individual Finance and Insurance Decision Centre. He currently serves as a columnist and advisory board member of the Globe and Mail's Globe Advisor. In this episode, Jason answers so many questions pertaining to the industry, including the difference between fee-only and no-fee advisors, how financial designations work in Canada, and what terrible advice to avoid at all costs. Jason also explains common misconceptions about investing that could help you come tax season and when planning for retirement. For full episode show notes visit: https://jessicamoorhouse.com/353 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome back to the More Money Podcast. This is episode 353, and I'm your host, Jessica Morehouse. Welcome back to the show. I hope you enjoyed last week where we kicked off season 16 of the show, and I had not one but two episodes to share with you, and I hope you liked it because I had a lot of fun. It's always exciting to start a new year with a new podcast season and introducing new exciting guests. And that's what I've got for you today. As well, I've got Jason Pereira on the show, who I have been a big fan of for a long time. And he really has as many designations as I think one person can possibly do. I don't know how he has all these. So he is an MBA, a CFA, a CFP in both Canada and the US, an RFP, a TEP, an FCSI, a CIWM, a PFP, an FMA. I don't think there's any more designations he can possibly get in the financial industry, but

if there are, I'm sure he's working on them. So Jason is a well-known and accomplished financial planner and industry advocate. And he holds two degrees in nine industry designations and has either been a finalist or a winner of over 40 industry awards, including being the first and only three-time winner of the Global Financial Planning Award. His commentary and writing have appeared in every major media outlet in Canada, and he currently serves as a columnist and advisory board member of the Globe and Mail's Globe Advisor. And he's also the founding president of the Financial Planning Association of Canada, a director of the Institute of Advanced Financial Planners, and is a director of the Individual

Finance and Insurance Decision Center. In addition, he has held various volunteer positions with IROC, FB Canada, the FPSB, and the CFA Institute, among many others. Now, Jason has also worked to educate the public and his peers on financial planning and practice management-related topics, which is why I'm a big fan of him. And he's worked at the Schulich School of Business, recorded over 300 podcasts on financial planning and fintech, several regulatory commentaries, published dozens of articles, and is a frequent contributor in the media advocating on behalf of financial planners and consumers. So yeah, he's been around for a while. He knows his stuff, which is why I want him on the show to have a real chat about being on

both sides of the kind of financial industry, being a consumer, a customer, a client, and then being within the industry. Because why I'm a big fan of Jason is he really tells it like it is. He does not hold back. He calls people out in the industry when it's necessary. Because as you know, and I talk to people all the time about this, there is a lot of bad apples in the industry. There's a lot of people that aren't necessarily putting their clients first as they should, and maybe are giving bad advice or focused on sales first and helping their clients second. And I think as Canadians, we really do need to understand what are the inner workings of the industry? What are some things that we should be aware of?

What are some red flags that we should really pay attention to? And how can we advocate for ourselves better? Because ultimately, I'm a fan of the financial industry, because there are some really great people, including Jason and a bunch of other people I know that are doing really good work. But we as consumers, clients, we need to be able to identify those people and also identify the people that are not going to be in our corner. So we need to be advocates of ourselves so we can get the help that we need when we do need a second pair of eyes on our stuff, when we do need an expert's perspective on our financial plan so we can reach our goals. So very excited about this episode with Jason. I know you're going to love it. But before I get to that interview, here's just a few words I want to share

about this podcast episode's sponsor. This episode of the More Money Podcast is supported by The Globe and Mail. Although there's a lot of uncertainty surrounding the economy, interest rates, housing prices, and inflation right now, one thing you can be certain about is there's never been a better time to invest in your own financial knowledge. Surrounding yourself with quality information and diverse opinions from The Globe and Mail, Canada's leading source of business and investing news, will better equip you to navigate this year and help you make confident decisions. Globeandmail.com offers an expansive array of personal finance content, newsletters, and tools like the RRSP Tax Savings Calculator that go well beyond just business news and commentary. And for a limited time,

the Globe is offering unrestricted access to Globeandmail.com for just $75 a year plus tax for your first year. For full details, visit globeandmail.com slash podcast. Once again, visit globeandmail.com slash podcast to start investing in yourself today. Welcome, Jason, to the More Money Podcast. I'm so excited to have you on the show. Thanks, Jessica. Pleasure. Yeah. So I don't know if I've met anyone who has many designations or degrees as you, quite honestly. I don't know if there's any more for you to get. There's always more to the question. But gosh, you're making me feel like I have a lot to do to catch up. I don't think I'll ever

catch up. So I'm not even going to try. I would not necessarily recommend you try either. It's a certain, you got to level the pain to a certain degree, quite honestly. Yeah, it does sound kind of masochistic a little bit. Like every time I do a course or try to, you know, do it, it's always just like, gosh, why did I put myself through that? Like, it's just a lot of ache. You know, you put a lot of pressure on yourself. But just so people know, you have an MBA, a CFA, a cfp both in canada and the us rfp tep what the hell is that i don't think i even know that one trust and estate practitioner okay well there you go um f c s i c i w m p f p and f m a you missed my

commerce and my fellowship of the of epi canada so yes oh my lord do you just like studying is it just like you're so passionate about financial planning you want to see what is going on with that designation let's give it a go well it's just one of these things where um i'm like i'm just a curious person by nature and i've always been like pride myself on being a lifelong learner so i'm just anytime i don't understand something or feel there's a gap in my knowledge I want to do something about it and you know the one thing about the senior students good is that there's definitive paths for how you can basically cover that gap while simultaneously maybe working towards designation if you want to and the you know so that's largely where it came from and it

was also an early commitment to say to myself look I'm going to take a minimum of one course per year, right? There's so much to know out there. I can't possibly just take the basic qualification courses and be, you know, the top level proficiency. So that was it. It was basically this just never ending journey of self-improvement. And, you know, you look back after a couple of decades and it is a lot that gets done. Yeah. Well, it kind of also leads me to believe if you have so many designations that there's never a point where you're like, I know it all. I feel good. It's like, no, there's always something. And that's something that actually early on as I started my kind of journey and I'm like, oh, you know what? I'm just going to, because I had no plans of becoming like a financial planner or anything like that. I just like learning. I'm like,

I'll just learn this stuff myself. How hard could it be? And I'm sure you heard this all the time. Like, I can learn all this stuff for free. And you never feel like you quite like get it. And so like, okay, fine, I'll do a designation. So I did my financial counselor trading and that was good, but there were still some gaps. I'm like, cool. So now I'm, you know, continue to train. And yeah, I feel like I'm so glad that I'm taking more courses and working eventually to become a CFP. But it does also make me think that I'll never get to that point that I feel like I want to be at some point where you're like, I know it all.

No, it never does. Because there's that old meme of the gap of like, I know nothing. I know nothing. And in the middle, while you're like, you know, you have the beginner and the expert and the other people in the middle where I know everything. And the reality is, is the more you learn, the more you learn that you don I know nothing. And in the middle, while you're like, you know, you have the beginner and the expert. And then you have the people in the middle where I know everything. And the reality is, is the more you learn, the more you learn that you don't know everything. And in addition to that,

like the reality is, is that, yes, you can ask me a question about something and I will, you know, wax philosophically at the top of my head about what I know about the thing. But then I'll also say, but we need to go verify these pieces. And this is my best recollection.

And, you know, to anyone, you know, on the, I never want to be in the top quadrant of confidence and accuracy. Like, confidently accurate is a rare thing to be. You know, more often I'd rather be unconfident and accurate and basically just always verify. Because especially when I'm, it's one thing if I'm talking to someone, it's something else if it's actually being actioned or being used to in their financial lives, right? There's a duty of care there to just double check,

right? Like doing, I'm doing that all the time. And that's, that's why you're one of the rarities. Cause I know, you know, one topic I want to discuss in this show is just the financial industry as a

whole. And advisors, like the reason I wanted to talk about this is one of the cool things being, you know, me as like a financial educator content creator is i get to talk to regular people and find out what they really think and what their personal experiences have been with the traditional financial industry advisors professionals and things like that and often what i hear is they're talking to people who are mega confident giving terrible advice

um i'm curious you, it seems like, especially with all your designations, but all the other kind of things that you do, especially as the president of Financial Planning Association of Canada, you are very passionate about making sure that there's more accountability, I guess guess and that the consumer is getting proper advice um i'm curious though as you you know were yourself trying to become a financial planner you know what kind of drew you to this industry what what made you want to continue to pursue it and and continue to pursue it all these decades yeah i have a bit of a meandering path, right? And I actually, the funny story, the origin story goes back to being in high school, not

wanting to go to university, not knowing what I wanted to do and blowing money on the wrong degree, right? I just didn't want to misfire like that. So I had the opportunity to do, I had a couple of terms where I could have done a co-op term. So I said, okay, I'll do the first one. And they asked me things that interested me. And you know, when you're a teenage male, uh, money and, uh, stocks seem interesting to you, right? So especially cause we were, uh, you know, those, well, anyway, early stages of.com. So now I'm aging myself.

So, you know, they play, they managed to place me with one of the top, one of the biggest teams at Scotia McLeod in Toronto. And that went from a co-op position to a come back for the summer position to a, can you do work when you're not here and like, just take it home with you and come back on vacation to a job after I was done undergrad. So that was a wonderful experience because it got me doing a lot of things like everything from research to start off with filing and worked its way to marketing, to research, to financial planning. And what I found when we were doing the financial planning was that, okay, hold on a second. I was clearly under-trained at that point, right? That was just the case. But it was like, wait a minute, I make this small modification to this one decision and I have this massive disproportionate outcome on the client's life, this is powerful.

Meanwhile, the reality is, and I will say this much, while it was a great learning experience, I also learned I didn't want to work in one of those institutions because all the metrics for success were about hitting sales quotas and basically the advisors or the brokers going on various committees or trips or all this other stuff. And it was just, there was literally that monthly pressure to hit targets. And it was one of these things where it's just like, where's the metric for client success? Right? Like I wasn't seeing that.

Right? Yeah. So when I left that environment, I was kind of disenfranchised with the environment, almost left the entire industry. The market, it was post.com bubble. The job market at the time was terrible. So I ended up teaming up with an advisor who was leaving the independent, was becoming, it was leaving an insurance company and becoming, and basically starting to form his own company. So I came in with the investment experience and

realized I didn't know how to run a firm. So I took in all the best practices I could, everywhere I could find them and slowly kind of developed a model for what I thought should be happening. And that, you know, that relationship lasted about five years before we parted company. And that was the genesis of what Woodgate became and what my practice became. And a lot of the early, a lot of that learning period in the wilderness is, is basically the foundation of where, where, what we do today comes from. So it's, it's been this, uh, so the, you know, and along that journey was just constantly like looking around at what else was the problem with the problem is in this industry

a lot of people just they look at their peers within their company and assume everything's the same they don't look at the outside knowledge that exists outside of what the company's feeding you right and there's so many wonderful resources now especially with the internet because back then it was in its infancy where you know there are especially out of the u.s by a long shot like incredible things around the concepts of financial therapy. You know, the, the, you can go down the rabbit hole of the geekiest questions on, on decumulation with like, whether it be academia or with the likes of Michael Kitsis, like publishing a ton of work. So there's, there's just so much to learn out there.

And I always say this thing, like there is a science to everything, right? You may think that this is, you know, baking a cake is simple. Yeah. You know what? You're right. On the surface, if you follow the same rules as simple, what you're not, what you're missing is there's a science to chemistry that's happening there. And yeah, you can, you can bake the cake and it could turn out right. But there's, if you understand

the chemistry aspect, that's what separates a top level chef from, from a home cook. Absolutely. No, I completely agree. And like we kind of touched on earlier, the more I learned, the more I realized how little I knew and how much I still have to learn. And that's why for me, even though I love what I do, trying to promote financial literacy, educating people, when I do get those questions about like, hey, what do you think about this? Where it's like, they're really just trying to find some advice for me. I'm the first one to say, that sounds like a question you need to ask a tax planner or a financial planner or a professional in the field. Because what I think a lot of people don't really know is sometimes they feel like they can just like

punch in their search terms into Google and get an answer. But really what they're getting is just like a general potential answer that may or may not be a good fit for them. And what I've learned over the years is everyone's situation is so different. And when you do work with a professional, and especially one like I do always kind of push people that are fee only, advice only, they're not going to sell you those high fee mutual funds, all that kind of stuff, is they need to look at the entire financial picture. And most people that have never worked as a financial professional, they have no idea what that actually means or looks like because they don't know. They've never worked with someone. Yeah.

And as a non-fee only professional who basically does not sell expensive mutual funds, there's a middle ground there. Yes, there is. I would say the other thing is that human nature, people want simplified answers. They want things that they can wrap their hands around easily. And the reality is, is that, you know, even the simplest of answers that is applicable to your situation is based on, it's tip of an iceberg. There's an incredible amount of stuff that comes in beneath it. And the number of prospects I meet where they're just like, look, I got a simple situation. I don't need

your services. And, you know, I'm like, okay, let's just have a conversation. And you find out, oh, okay, let me get this straight. You have a simple situation, but your spouse is disabled. You're both American citizens living in Canada. You want to, you're basically, you have to make a pension decision in the next six months. And your son is still dependent at 25. This is not a simple situation. Yeah, that sounds simple to me. Everybody thinks that their situation is simple, right? Like everybody thinks, because they understand it.

There's a familiarity bias with the complexity of it. But it doesn't mean, you know, I think the danger with simplicity is the oversimplification to create comfort that results in massively suboptimal outcomes. Like I had one prospect who would basically earn top level income for his entire life, never once contribute to an RSP because his opinion was it was just better to have it after tax. And I basically said, okay, but you're like seven years away from retirement. We fund this thing to this tune. You have no other retirement income.

Look at the tax savings between the two. He's like, oh, and no one's ever explained that to me before. It's like, but he had simplified his life down to a level where he felt comfortable. And then, you know what, in the end he opted not to do it because he just didn't want the complexity of another account. So it's just, you know, to each their own, but it's, it's, there's a difference between willful blindness and, and basically an ignorance. And you know what, okay, if you want to be willfully ignoring it, that's fine. That's your business, but at least it's an informed decision. That's the other thing that

I've lately been studying a lot more and reading a lot more books about psychology and behavioral economics. And the hardest thing is for people to change their mind. Once they've figured something out that they think this is a fact or this is how it is if you tell them something opposite even if you have so much research and data to back it up it is so difficult for them to actually turn that corner and be like huh maybe you have it's like no they'll probably dig their heels into like no no i read this on reddit and i'm pretty sure i'm right i think you should check out my twitter feed this morning with the argument the dividend investors oh i i love, that's part of the reason I got you on the show. I'm like, I love your Twitter.

It's the only reason I'm on there is to see what you're tweeting about. It's so much fun. Twitter's a mess, but I do go on there just to see what you're tweeting about. You can find your tribe on it if you're careful. You know, yeah. And honestly, I was telling my husband the other day, I'm like, the only real people I follow on Twitter, because I'm not there on, I'm not that active on it as I used to be, is mainly just following some financial planners and seeing what they're talking about. Like yourself.

But one thing actually, just because you touched on that. Now, I am like always telling people fee only, fee only. But you, there's a lot of different ways you can work with a financial professional. And it doesn't have to be someone at the bank or whatever. You kind of mentioned your middle ground. Do you want to kind of share what your kind of fee structure is like? Look, I will say that at the end of the day, I think what gets lost in the fee conversation altogether is that people look at, say, a bank mutual fund at 2.25%, and they look at an ETF at 15 basis points, right? And yes, that's a big margin, right? Now, two things. A, the advisor at the bank, if they're licensed properly, I mean,

of course, they're going to be started on the bank branch level and all the incentives and whatever. But at the brokerage level, at the top level, okay? They can offer the same solutions. Now, of course, they're going to charge a fee over top of that. Now, what does that fee cover? There's a couple of things you got to remember. Let's not forget, there's always a cost to investing here, right? There's registration fees on your RSPs. There's trading costs, which even if, you know, even Wealthsimple Trade, which offers it for free, you know, they're making money off currency conversions.

So there's costs associated with this. We just all have to accept the fact that they exist. And if you're not paying directly, you're paying somewhere else, okay? Yeah, you're paying indirectly in some way. Exactly. Right. So like fees like mine, which are tiered schedule, right? The more you have, the less you pay as a percentage. Um, we bake that in to the actual fee. I don't want people feeling dinged for transactions and all this other stuff. Right. So we baked that. So I cover a bunch of that. So a portion of my fee actually goes to just the cost you would be paying directly yourself. Then you have my fee.

And the question becomes really, what is it you're getting for that, right? And this is where, again, when you're comparing a advised, now, if you're getting no advice whatsoever for the two-something percent or whatever it is, even a 1.5%, then you're just, you're not, you're better off at a discount. Like I will, I will absolutely say that if you're getting advice and you're getting good, proper advice, then that difference can be made up, right? Because the reality is, is that the entire financial planning world or what the entire circle involves, it's not just about implementation of investments. That is a small fraction of what it is we do. The comprehensive financial planning that sets you on a path and basically is constantly iterated to make sure you're going to hit your dreams, goals, and help you live the

fullest version of your life. Like that is the most valuable piece of it. Because what the heck is money good for if you can't live the life you want, right? So that's it. As we're trying to help people manifest the best version of it, right? The investments, the insurance, the tax plan, the estate planning, those are all just means, well, especially the first two, investment insurance. There's means of protecting and making sure that can happen.

The tax planning is just a way of trying to really stretch that out and make it happen more effectively. And the estate planning is just making sure that when you're gone, your final wishes are basically, your legacies is preserved, right? So you don't get that from a discount broker. You can, like absolutely, you can get, I have many friends in the fee-only and advice-only space. I refer to them.

I think that space is valuable. But I do believe in different models for different people. There are some people, or whether it be a lack of investments to access the kind of stuff that I do, fine. Like, that is a solution. There's also those who are DIYers who actually do the right job, which, again, there's a segment that do the wrong. There's wrong and right everywhere that do the right thing. Then, great. You know what?

If that's what you want to go to, that's a segment that do the wrong. There's a bit wrong and right everywhere that do the right thing. Then great. You know what? If that's what you want to go to, that's fine. But I do want to detract people from making it solely a cost decision because the problem is when you frame it as a cost decision, you place no value on the planning really. And I think that's where a lot of people end up with suboptimal solutions from fee-only planners. It's like, okay, I'm now treating planning, which is a verb, like a product, right? I have this plan. I'm probably never going to follow it, but now I feel better because I have this plan, right? When frankly, implementation of the plan is the only thing that matters. And like I keep saying, planning is a verb, not a noun.

Do not treat it as a one-off. Yes, maybe you do have a simpler situation where the planner will say to you, you know what? Based on the fact you're living off DB pensions and all this other stuff, you really don't need to update this every year. Fine. But just don't assume that that is a situation you're in. So that's it. I mean, again, you have to ask yourself, what am I getting from when I'm paying the advisor? Does that actually fit what it is I'm looking for, what I need, the complexities of my life? And the more complex your life, yes, the greater the need. The simpler your life, the less the need. But the question is, is that your subjective opinion of your simplicity is probably skewed.

You probably need to double check that. I think that's one of the issues that I see a lot is when we're talking about financial planning and the different fee structures, everyone across the board is just talking about the investment side of things. No one's actually talking about all the other really important elements of financial planning. I mean, you know, I talk to people and most of the people I talk to are regular folks like myself who are not in a super high, you know, tax bracket where we, you know, can afford maybe someone like you with all your designations. But, you know, usually, like most of the people I talk to, you know, they afford maybe someone like you with all your designations. But, you know, usually, like most of the people I talk to, you know, they go to the bank, they're like, they're going to talk to one of those, you know, base advisors kind of thing. And that's kind of where the trouble

starts. And that's my job is to be like, okay, just let's talk about what they're telling you and seeing what's going on. And often, and I have personal experience with this too, they actually don't give you anything for that fee. They just talk about investments. And so that's what the consumer thinks. Oh, well, I am basing that fee off of what they could potentially earn me and totally ignoring it. It's like, well, shouldn't they also be offering XYZ like you just mentioned that are equally as important to your overall financial well-being? Let's also just establish the fact that academia has basically disproven anyone's ability to outperform the markets.

So the reality is, is that those promises are unwarranted. And then, yeah, are they going to provide anything? Look, the reality is, is that, again, we have to get back to the fact that service costs money. Everything costs money, right? This belief, you know, Canadians polled will still believe, like more than 50% of them still believe investments at the bank are free, right? Like I had a client's son basically say, well, you know, all this stuff you're doing is fantastic, but you know, the bank basically does this for free. And I sit back and I'm like, come on,

you're a university educated guy. You run a business. Do you really believe that last statement? Why would the bank give you anything for free? Anything for free. I find the words of bank and benevolence just don't go together ever. And the reality is, and you got to keep in mind, what's their business model, especially at the branch? It is lowest possible cost at highest possible margin because they're dealing off volume. They're dealing off on, that's just economics. So to expect the person who is in that position to be able to give you fully qualified advice, that is that they're educated, understand like fully, like when they're, when, when this cost model, when the fact that you're sitting down and you're investing a thousand dollars, okay, you're investing a thousand dollars as a round number, right?

Which really works out to, if you went to, you know, if you went to probably, okay. So a thousand bucks, you're looking at, what is that? That's a $25 in fees for the year. Okay. Of which, you know, their bonus, something on that, but let's say that's less than $10 and you're going to sit down with them for half an hour to 45 minutes. What do you think the economic trade-offs going to look like? Do you think it's going to be a valuable economic trade-off that's actually accurate? Now, you might win on this one, but realistically, there is a legitimate, like, I hate using the term you get what you pay for in finance because there is a truth to that when it comes to advisor service, if you demand that, if you get to find the right advisor, because there's plenty of advisors where you don't get what you pay for. And when it comes

to investing, like the pure investing side, you literally do not, you get what you don't pay for, right? By not by avoiding a lot of the expensive active management fees that are out there. So, so yeah, so it's, it's a tough one. But yeah, I think people just have to be more realistic of what the expectation is to, to expect the person who's sitting behind a counter at a bank earning, you know, entry-level salary with two certificates, because if they get too educated, they get paid too much and they can't be at that branch level seat. Like there's only so, I mean, don't get me wrong. There's, there are CFPs at the branch level, but those are, there's few, there there's

few compared to the number of people on the front lines. It is, it is, it is a volume model. You do not go to McDonald's and expect to get a Michelin star meal. Full stop. Um, I want to talk a little bit about the term advisor because i feel like there was a thing in the news i'm not sure if it's gone now but it's like advisor versus advisor or whatever like there's the e the o i can't remember which one's the good one quite honestly but that's why i just don't in general like the term advisor because it has like to me

a negative connotation i like planners because planner typically um and now isn't it true and i i don't know if i'm late to this party uh but you can only call yourself a financial planner in canada finally now if you have the designation but before you couldn't but still anyone can call themselves an advisor do you want to kind of speak to what's going on so there's a bunch to unpack there so first off, the advisor spelling debate is nonsense. I've read this by lawyers. They're just like hard eye roll. This is, you know, this is something that basically people who,

people making hay over law, this would never hold up, right? So it's not true. So that's the first thing. The second piece, let's talk about the difference. Financial planner, financial planning as a whole, has an international standards code for what is financial planning. It has an international standards body that basically issues the ability for a regional body to issue a CFP credential,

which is the Globally Recognized Credential Financial Planning, and audits them to do so. So we have the ISO code, we have an international standards body, we have regional standards councils who then issue a credential. It is a well-defined body of knowledge in terms of what goes into it. Financial advisor is two words to put together. It lacks any of those other things. It's a very general catch-all term for the advice you can get in any number of financial spheres. Now, does that mean that people who are financial advisors are worse educated or worse off than the financial planners?

No. It is a difference between having domain specificity that is recognized and has a body of knowledge and all that versus, I mean, like, hey, you could be a portfolio manager with a CFP, right? So you've got the CFA, you've got, you've got a lot of depth of knowledge, right? I'm not taking that away. You can be an insurance specialist with a CLU. I'm not taking that away, right? Like it's just call a spade a spade.

Now, um, title protection in Canada. Oh boy. A deep breath. My blood pressure is going to go. So Quebec nailed,bec nailed this years ago okay quebec quebec is when it was on the first probably not the first jurisdiction as that i know of in the world to protect the title financial planner they have their own separate designation called the plan plan fin i'm not going to pronounce it in french because i'm going to

brutalize it okay my french canadian wife is going to kill me if i keep doing that um so so basically um they they protected it. Only people with that designation can call themselves financial planners. And that body of knowledge and the exams are on par with the CFP. It is done. Like, boom. I wish we could have copied that. Ontario instead put together a framework. I'm not going to get into the politics of the matter, but they went to protect the titles financial advisor and financial planner. When the dust finally settled, the reality is that there's multiple designations that qualify for financial planner, many of which do not meet the international

standards criteria, which is problematic at the least. And then the financial advisor title is a bag of snakes, quite honestly. It was trying do you, it was like trying to glue, like it was trying to nail gel to a wall. There's no, if you have no internationally standard standards for defining it, how do you define it? And what ended up happening was,

yes, there was a couple of low bar designations that got approved for it. There was a brand new one that was developed just for it. But then the entire industry got rubber stamped because the CSI came out with a new designation that the criteria for which just happened to match the licensing standard for selling mutual funds and securities.

So pay a couple hundred bucks and you get the stamp of that name, rubber stamp across the board. Saskatchewan is currently looking at this. So we're going to see what happens there. New Brunswick is looking at this, but they haven't published a framework yet. I was just told that Manitoba doesn't like being sandwiched between Ontario and Saskatchewan without a plan. So they may be looking at it.

But as far as I know, most other provinces have said, this is a mess. We're staying away from this. So the hope is, unfortunately, I will say that I feel like we're worse off for it because it lent validity to a number of designations that did not, in my mind and many others' minds, did not basically do it. And it really didn't change anything other than raise costs. Now, that said, is this something we can work with to better? Yes.

And that's the fight now. The battle now is how do we fix this and make it better going forward? And I think for me, when I talk to people, that's the number one thing that is so confusing. I mean, there's a lot of things that are confusing about the financial industry in Canada, but most people have no idea who, you know, what the background experience credentials of anyone that they're talking to is. And they're like, I don't know, they're a financial planner, but I'm like, what, what, how do you know? Like, what are they, you know, what's their background? And even to like the, the other thing I see a lot, and I don't know if this will ever be a change,

but anyone can call themselves a money coach. And you're like, what the hell is that? That's not like that's yeah. This is the thing is I, you know, I said you're like a couple of years back, look, um, the reason my teleprotection is needed because the number one area of innovation has been in titles for the last 20 years. You know, literally I remember an article. So we're a compliance officer got, was saying that they got a blowback from someone who wanted to use the title super trader. And they were just like, no, you're not doing that. But technically they could have. That's it. And I will say that, unfortunately, I think typically people find people by either a cursory online look or more usually referred by someone else. Just because your friend or family member is happy or satisfied

with the service they're getting doesn't mean that they know enough to know that they're not getting good service. That's the issue, right? So basically don't take that for granted because I have literally seen, I mean, I'm not going to name names on this one, but literally I've seen planners out there with regulatory histories that if the client went and read that, there's no way they would hire them, right? and that doesn't take much Googling, right? Like just look for the person and, and like start digging a little bit to look at their background. Right. And, you know, it's not to say that people can't make mistakes and redeem themselves. They can, but the reality is, is that, you know, there's some, there's a lot out there. Like it just, it just goes to show

you that like, if, if, if someone's getting, if someone's kind of me saying, what do you think of this person? And you've never even seen this. And I looked it up in three seconds. Do your homework. Do your homework. And I would also say, here's the other piece. A lot of people don't even know where to do their homework, though. They don't know that you can look this stuff up.

I think that's also another problem. Google's a wonderful tool. But I'll also say this much. Here's what I'll always tell you to do. Ask to see samples of work, right? What am I getting for this, right? Like the reality is, is that most more, the number of times I'm in competition for prospects

where, you know, the prospect, we sit down and we show them a presentation of everything we're going to do. And we say like, you know, they're like, well, how you get investment money responses? I just met you, I don't know. We need to have in-depth conversations, do the financial plan,

do a risk profiling questionnaire on you. And then we'll present, but here's like the different models we use. And the response is, oh, that's different than what other people told me. I'm like, well, what are the other people telling me? Well, they sat down with me and then listened to me talk for five minutes and then reached into their briefcase and pulled out something and said, this is what I would put you in. But if you don't like it, don't worry, we can make changes. It's like, so they walked in with the solution before they knew who you were. Yeah. Interesting. right? Sounds like a sales pitch to me. Well, it's, yeah.

Are you there to be serviced or are you there to simply, like, is there some people literally or their opinion or their belief is like, I'm here for clients to basically just give me their money and let me do my damn job, right? And, you know, there's an element

of you need to delegate, but the reality is, no, you're there. What is it you're there for? And I think it's a very important question to ask people, right? You ask an advisor, what is it you're here for? I'm here to get you the best return. Run the opposite direction, okay? The true answer, the best, the ultimate manifestation of financial planning as a whole is to basically help people manifest the best version of their lives. What is it you want out of life? How do I help you live that? And when you take, when as a planner, you take that mindset, you're the scope

of what you consider inbounds versus out of bounds to help someone just expands, right? It's not, oh, I'm only here to sell them the investments and insurance. They can worry about everything else. I'm only here to put the plan. No, it's like, if I don't see the plan getting implemented, I get annoyed. Like, I will tell you, one of the things that I've discovered about myself over the years is that I thrive off client success. I, you know, I want to see them achieve everything. I want to celebrate that with them. And when repeatedly, you know, if they just come to me to feel good about me, tell them

what to do, and then just never execute it. Like, there's times where we've had conversations with people and said, listen, is this really working for you? Because I don't think it's working for me. Because, you know, we've been having this conversation over and over again. Either you let me help you, I think, go transfer your account to a DIY brokerage, honestly, because I don't think this is worth it, right? I don't want to be paid, you know, what I'm paid just to make you feel good about the fact that you have a, what's a better term I'm looking for? A coach, um sorry a personal trainer that you're not that

you're then not listening to and going to eat donuts while you're staying around the gym yeah yeah 100 now i want to kind of talk about some of the terrible advice that is out there and that's that's the scary thing and as we've kind of touched on there's a lot of people giving advice that either aren't qualified to do so or they're just totally misinformed and i think we sort of touched on this that it's because um everyone has kind of a different level of education like you said like i actually don't really know what the that particular um path where the the csi you know now you can sell mutual funds and also call yourself a financial planner is but yeah i think some people can take one or two courses and then bam, be like,

hey, I'm an advisor now. And you're like, but I like that's the wild thing to me because I don't even feel like I'm, you know, I'm still learning and I have way more certificates than most people at the bank. And I'm like, I don't feel like I'm ready. You know what I mean? I had a family member who worked at the bank once and thought like, he came to talk to me about his career. And he basically, I said like, well, okay, so what education training have you done? And he said, I got everything. I'm like, what do you have? And he listed off three courses I had never heard of. I was like, I have no idea what you're talking about. He's like, what do you, what do you mean? He's like, I was told I got everything I need to do. I'm like, except for the one that gave you the mutual

funds license. I have no idea what that other stuff is. And I He's like, I was told I got everything I need to do. I'm like, except for the one that gave you the mutual funds license, I have no idea what that other stuff is. And I said, like, the problem is, is that, like, is that frankly, it's this, it's blinders, right? They are told that this is what they need to do for their career. They're, you know, people follow the path of least resistance. They don't necessarily get informed that, like, a lot of very valuable, high level, like, credentials exist that will round them out. And I think it's to their benefit in a lot of ways valuable, high-level credentials exist that will round them out.

And I think it's to their benefit in a lot of ways of these institutions, not necessarily to let the people at the ground floor know that, because they become more expensive with training. And fortunately, they're only concerned about distribution. I think this is evidenced by the fact that several banks abandoned the Canadian securities course, which, by the way, is not a super high bar, okay?. Abandon it in favor of the mutual funds course because the failure rate was too high. Right. Like, so instead of, instead of improving or training or providing support to your, to your employees to help them get over that hump, you lowered the bar, right? Like why?

Because at the end of the day, it just matters that they get people selling. That's really the goal. Yeah. Wow. Lord. Yeah. Anyways, but yeah, back to the fact that a lot of people are giving a lot of bad advice. That's actually the number one thing that I have conversations with people about is who told you what? It's just wild. I'm curious. You've probably heard a lot from incoming clients that are unhappy with their person that come to you. What are some of these things that you hear that just makes your blood boil? Oh, all the time. Actually, I had one last week. But before we go there, I want to say that, like two things. A, I think you have to look at who you go to for advice, first and foremost, okay? So yes, there are people, there's, are people, a lot of the industry will treat financial planning

as a checkbox to shut the client up so they can go back to invest in the portfolio. If you have someone who's not taking a planning-centric approach to your planning, you're already offside because that person's already telling you what matters to them. It's not this, it's tinkering with your portfolio.

So that's the first thing. The second thing you have to remember is too, is that I don't think, and there was a study called The Misguided Beliefs of Financial Advisors that I don't think, and there was a study that called the misguided beliefs of financial advisors that came out years ago. And this was not saying that, oh man, you guys are all dumb. It was saying that what it looked at was, are they giving, you know, what advice are they giving and what are they doing for themselves?

And what it found was, is that these people were doing for themselves what they did for clients. Now that may have meant trade. That was also trading too much and chasing performance and all this other stuff. So they were doing, it's not that they're doing this out of malevolence. Like they're doing this because they think it's the right thing. They're just incorrect. Right. So I don't ever want to put the connotation on these people that they're necessarily being like, they're trying to hurt people. They're just, yeah, I don't think so. I think they believe what they're selling and what they're saying. They're just wrong.

100%. So, I mean, I'll give you the example I had last week. So I have a friend who is a dental technician. And she, of course, at least in Ontario, is allowed to incorporate, for example. Right? So she basically, we were meeting over something else. And she said, you know, I've, so, oh, just so you know, turns out my, I was meeting with a person at the bank. And I was like, oh, oh, just so you know, it turns out my, I was meeting with the person at the bank and I was like, oh boy, here we go. And they're like, it turns out my accountant has been doing the wrong job for me for years.

I'm like, what are you talking about? Well, they told me I could save a lot of money in taxes if I incorporated. I said, hold on a sec. Okay. Like based on our previous conversations, you are basically using everything you make to live off of and make some RSPs and some contributions for your kid's account and for your account, right? Are you telling me that there's suddenly, you know, is there any substantial money left over with that? And she's like, no, I need it all to live off of. My response was, okay, so where do you think, where does this

person think the tax savings is coming from? And I had to explain to her that the only way there's tax savings is through a deferral if she were to basically leave money within the corporation to invest, right? So, you know, the small business tax rate in Ontario is 12.2%. You know, top marginal rate on Ontario is 53. There's a big gap there. You are going to pay the rest of that tax and you take it as a dividend. So basically I had to explain that all to her. I said, the only thing, you know, and then there's the other misnomer. And I said, I didn't know for sure, quite honestly, whether or not that this person, like what they were getting at, was it the deferral benefit, which it wasn't. But what it probably was, was this misguided belief that you pay less taxes with dividends.

You don't, right? People don't understand this very simple principle that everything's based on in Canada when it comes to corporations, which is integration. So remember I said 12.2% is what you pay corporately? Well, when you add what you pay corporately to what you pay personally, once you take it out, it equals roughly 53%. Now, the only thing that other people refer to as savings is that dividends do not attract cpp premiums but this is someone who definitely needed cpp so you know unfortunately by the time i caught this she already paid the lawyer for the incorporation account for the corporation two thousand dollars blown for nothing oh yeah right two thousand blown for nothing i was i was i was beside myself living

right like because especially given that you you know, I said to her, she's like, well, maybe I try it for you. I said, you don't understand. That doesn't make sense. It doesn't make sense because there's no net benefit here. All you've done is besides that cost, that account is probably going to charge you now

anywhere around three grand to file your taxes every year. You just complicated your life and added costs for no reason. So she was pretty annoyed when this was done. I hear that all the time. I actually just had a conversation with another content creator who has a day job, but then

does YouTube and makes money through that. And she was asking me, hey, I've heard a lot about incorporating. Do you think it can save you money? I'm like, it only makes sense if like what tax bracket you're in and if you're keeping any money in that corporation. And no one knows about like no one thinks about that. They just hear from somebody that corporation incorporating your business is a tax saving strategy. I'm like, yeah, but only if this, this and this happen.

Yeah. Well, I mean, I'll tell you the, I see this all the time. I came up with another, with another content provider who said that this could basically save you money if you put your real estate in there. And my response is, hold on a second. No, like it does. That doesn't work. Now we're talking passive investments, which is actually like, like the reality is you're actually going to pay that in this case, depending on if you're, if your tax bracket is less

than 50%, you're actually to pay more tax initially in the corporation. I don't have to pay it out to get the money, to get the money back and get down to your normal tax rate. So the reality is, is I find that there's, especially in this country, I mean, maybe in the U S too, there is a, there's a big level of misunderstanding and misnomers around corporations and trusts. People don't understand them. They don't understand how the tax code works. But they assume that anyone who has one is doing something to basically screw the CRA over. And that's not how it works. When I tell people that intervibos trusts, trusts that are, well, basically all trusts with the exception of GREs

and a couple I'm not gonna get into, pay tax at the top marginal tax rate. They're like, everybody's like, what do you mean? Like, this doesn't make any sense. I've literally had people come to me and say, well, why don't I just move this into a trust and I'll pay less tax? I'm like, your marginal tax rate's 40 something.

You're gonna end up paying 53. There's zero reason. I'm not sure why you think a trust is a solution. But people hear this stuff on the street. And there's a concept called Brandolini's Law. And it basically says that the amount of effort to create BS, to debunk BS, is the order of magnitude above the amount of effort to create it. And that's like my life, right? You heard something from a cousin

or on a newspaper or whatever it is. And, oh, I read this. It's like, okay, but that's not true. Well, why is it not true? And I've got to spend 10X the amount of time proving I was right versus that one statement that required just a little, like the equivalent of a rumor

or just a drop sentence to make people believe it. So it so uh you know if anything i wish people were more skeptical about things when they heard them the first time as opposed to when people told them that they're not correct the second time i know that's part of the reason honestly that i hate going on reddit because there's just like a lot of bad information but people are so passionate about it i'm like there's no point in me even trying to debunk whatever they're talking about. They're going to believe what they want to believe. You mentioned earlier that you tweeted something about dividend investing that I feel like has been growing in popularity over the past few years. I'm curious, what are your thoughts? Because there are some people, like I'm in a Facebook group that's just for dividend investors

just to see what they're talking about. It is so interesting for me. My biggest issue is like, so everyone who's just like a Canadian dividend investor is just invested in big banks and utility companies. There's no diversification whatsoever. Look, the without getting too much in the weeds,

like academia has basically said, look, dividends are not something that is worth contemplating as a means of largely basically being the primary investment. There's some debate on that. But I can turn around and grab a book here that's probably still on my shelf here about factor investing. But basically, when you're doing that, you're narrowing your universe to a very small number of companies that are making decisions based off, like you're making a decision based off of their capital allocation policy, right? Now, basically, when you actually look at, now, when you look at the academic literature around factors, what they say is that, no, like dividends are like the tip of the iceberg. What's really happening underneath is what's known as the value factor and the

profitability factor, and in some stretch the the investment factor these are all three different things we can measure you know stocks are cheap stocks are profitable and stocks do not have to reinvest a high proportion of their earnings in order to maintain their growth rate right you put those three together and yes some stuff trickles out as dividends because they don't need it but there's plenty of companies out there who do not who fit that criteria but don't pay a dividend maybe they enter into stock buybacks? Which is another actually more tax efficient way of returning capital to investors. And the reality is, is that when you look at all this, it's just like, well, I've decided to look at the tip of the iceberg versus the entirety of the iceberg,

right? And the reality is, is that it just doesn't, like, why would you do that? Why would you do that? Why would you eliminate the, the, the, the fundamentals are identical. The fundamentals are absolutely identical, but one pays a dividend and one doesn't. Why is that one worth more? But this is what they believe, right? It's the story that I think that's being told is like, wouldn't you like to have a portfolio where you never have to touch it? You just live off those dividends.

Who? Yeah, that sounds like a nice story. Sure. Yeah. But now you're basically beholden to corporations, dividend policy as to how much you're going to actually consume secondly they're not free they come out of like what do you think happens what like what do people think happens to money to okay dividends come out of their after-tax profit so what do people think happens that after-tax profit if it's not paid out as dividends do you think it just disappears

no it gets reinvested in the corporation to grow it or it gets used for buybacks is that like i said so the reality is is that like it's not this magic hocus pocus and you know today someone posted like oh here's my portfolio over the last 10 years and i've outperformed you know this dividend index by a grand total of um no by this this total return the total not dividend next total return index by a total of like, it was like 19% over 10 years, right? Like, so no grand total, not grand total. So it was a 0.32% on average per year that he did it. And my response was like, this is one portfolio statistics. Like, do you not understand statistics?

This is not a sample size and this is not a significant, this is not a statistically significant deviation, right? Like the reality is is is that when you actually look at this in aggregate it's not the case but everyone it's always about you know you look at that it's like well this works for me right okay fine this you know oh these people were successful what about the graveyard of people who weren't successful you're not counting they're not talking you're not talking oh you know someone someone threw steven jaroslawski's name out there saying oh yeah he was just lucky no like the reality is is that you know i throw out the

warren buffett coin toss example, right? You have a million people in a contest throwing coins. You know, you're going to get down to 50,000 at some point who are like the best coin tossers in the world. Meanwhile, the entire thing was random, right? And there's plenty, I will give a shout out to my friend, Ben Felix, who has a podcast, yeah, fantastic YouTube channel called Common Sense Investing, where he goes through all of this, right? And the reality is, is that, you know, everything that's ever used to fight it is like, here's this one example, or here's this, like, it's, it's like, let's, let's make simple, let's be clear. There is no one ring, okay? There is no one strategy to rule them all. It doesn't

exist, okay? If anything, all you're doing is you're limiting the scope of attack on the market versus basically taking the entire thing. Historically, the average outperforms any individual player over a long duration. But it's very tempting for humans to say, I can improve. I can do better. I can be exceptional. I can do this. But to think that all it comes down to is, I'm just going to look for companies that

have a dividend yield. Like, if it's really, if you think it's, here's the thing, if it's really that easy, if it was really that easy and that was true, there's only so much volume that can be, so much money that can be thrown out of trade before the alpha disappears, right? If it was really that easy, that trade would have been crowded out eons ago. There's a reason why it eons ago there's a reason why it hasn't there's a reason why that's not the case it's because you know what there is not an alpha producer anyway um yeah no i agree which is why i'm not a divinited master but you know what

i find it fascinating it's like a religion to these people to some degree honestly it's a religion and they feel validated yeah they found the found the secret, the golden chalice or whatever. It's like, okay, if you did, we'd all be, just kind of like when people are like, I've got this secret to make you a millionaire. I'm like, if it was such a secret, like it's, that's, I mean, number one, that's not true. We would all be millionaires.

If it was that easy, we'd all be millionaires. But if it was there, you'd have to understand that it's a limited opportunity. Why would you share it? You would just keep it to yourself, right? 100%. I'll give you an example of the typical conversation I have around this, right? So I had a prospect come in and said, I'm not giving you, I just want you to do my

plan. I'm not giving you the money. I basically, I'm outperforming the TSX by this amount. I'm like, how? Like, I'm a dividend growth investor. I'm like, okay. So first off, are you buying just Canadian stocks? No, I'm Canadian American. I'm like, so you're using the wrong benchmarks. And they're like, what do you

mean? It's like, well, I'm like, he's like, what do you mean? I basically had my discount broker benchmark me versus the TSX and I outperformed based on that. My response was, well, if you have your portfolios in the States, strike one, you're comparing apples to oranges. And secondly, you should be comparing to a dividend index. So maybe they should run that against a combination of US and Canadian dividend aristocrats portfolio. So he's like, I'm going to do that. And he goes and, you know, we follow up a week later and he's like, he's like, yeah, yeah, I'm going to get that back and get it. You know, no problem.

I'm going to show you. And then a week later, we're having a conversation. I'm like, okay. So what happened with that? Changes the subject. Never goes back to it. Of course. Yeah.

Yeah. I think, yeah, that's also part of the problem is a lot of people tout their returns, but they don't actually know how to properly compare them to a proper benchmark. They're just like, oh, you know, here's my portfolio compared to like the S&P. And you're like, well, what's, is it, is that

even a good comparison? Is it, is it, are you even measuring apples to oranges? And they're not. And you know, this guy, perfect example, outperformance over 10 years by 0.32%, okay? Which again, flipping, like random probability, that could have gone the other way.

It's like, he's not outperformed by such a measure that we're like, whoa, something's weird here, okay? So think about the amount of effort over a decade that went into this to basically end up almost in the identical position as the as the broad market index i know i'll just think of all the time and effort that like was wasted hence why i'm like a boring index investor i'm like i don't have time i have a business to run i've got other things to do i don't want to waste my time trying to get 0.3 percent well that's another another economic, that's another economic, like weird, weird observation that

that's very common in economics. We basically say the amount of people work people are willing to do for free is really strange and attribute nothing to it. So you take all those hours that he worked and imagine he even worked at Starbucks in comparison and what he have ended up with more after tax income. It's very possible, right? You know, it's like the same thing about people who talk about real estate investing and they basically, and they talk about how much money they made, but like, wait a sec, you basically,

you were the guy who had all the maintenance. Like you had to wake up at 3 a.m. when the pipe ruptured. You had to do all of this work that you have not accounted for. Yeah, exactly. And you're saying that it wasn't there. It's like, I can't- That sounds like passive income to me, doesn't it? Doesn't sound like passive income to me, right?

Like just because you're, you know, six out of seven days, you're sitting on your butt, not doing anything for it, but the seventh day you're working on, like, you know, actually figure, you know, I've even challenged this. If you actually took what your equivalent

of an hourly salary was at work and then applied it to that amount and then added that to the actual cost of operating, how attractive would that return look anymore? And the reality, but, and the thing that drives me nuts with this stuff is that you ask people, you know, would you stay late? Would you work extra at work in order to try to get ahead? Well, nah, I kind of fed up with my job, whatever, but no, you're volunteering, but you'll take on another part-time job. Like, there is no free lunch anywhere. No, nothing is free um well i feel like we're getting

kind of to the end and i'm sure i could bug you about all the other bad advice that you've uh ever heard but i'm sure it's i mean we'd actually you know what let's close on one let me give you the most functional one let me give you the most functional one it is pre versus post-tax thinking okay the number this is where i get a lot of traction here. So I will have people who come to me with a sum of money that they want to invest, right? And let's say their TFSA is already taken care of, their RSP is already taken care of. Or the RSP, let's also be clear about this. The RSP is a tax play, right? This is not for everyone. I will see this every RSP season where someone on the news says, well, of course, you could get a refund if you

put money in. It's like, well, no, if you're lower income, you could actually make your situation a little worse in retirement, right? So let's not go there. Its goal is if you're making high income, make the contribution later on, take it out. Otherwise use a TFSA. So let's imagine someone comes into a sum of money and there's like a wind, especially if it's a windfall, like if it's an inheritance and they'll be, they'll say something like, you know, they'll see it as a windfall and they don't want to use it to pay down their mortgage. Right. Now let's, let's ask her.

And I say to them, okay. And this happened with my aunt and my aunt and uncle. They're like, well, we've come into the money. We want to do this. I'm like, okay, so let's, let's talk about this. What's your mortgage at? And let's just say right now, the rate, I mean, rates are changing all the time now, but let's just pick a number of like 4%, okay?

4%, okay? So they are paying 4% and they say to themselves, well, I hear I can make like 7, 8% in the market. Okay, well, that is true over a long timeline. That's true. But that's a nominal one, nominal number. Whereas you're paying your mortgage with after-tax dollars, right? Someone who's top marginal, for example, let's call it 50%, you'd have to make 8% guaranteed per year in order to equal the

after-tax for you have to pay that you're saving. So the savings that you're getting from paying down your mortgage is savings, right? You're no longer paying that. It's going to grow your net worth. So you're not saving. The pre-tax equivalent is eight points. Paying down a 4% mortgage when you're at a 50% marginal tax rate is the same thing as making 8% of the market. But the difference is, find me an 8% guaranteed. Exactly. So that's the one piece I wanted to close on just because people don't think that way. But when you start thinking in pre and post-tax numbers, make sure you put things on the same footing. It informs your decisions and you you make better simple financial decisions. Yeah, absolutely. But I feel like, yeah,

the other kind of story that I see a lot or the opinions that I see is people are really, they hate the idea or they think it's bad to pay down debt when you or like something like a mortgage when you could be earning more because I think also people think that they're above average and they can earn, they can be that anomaly and earn like 10% in the market. So why wouldn't I take that chance? It's like, or there's a guarantee with the mortgage though, but paying off your mortgage is boring. The other one, and I'm going to preface this, that you need advice when doing this.

The other thing to look at is that if you're going to insist on this, okay, you're going to insist on this, and I'm not saying you should, then this is not the way to do it. The way you do it is you pay it on the mortgage, and then you take out the line of credit for the same amount. And what's happened now is because there's a direct line between the loan and the investment, the interest is deductible. But this is more valuable the higher your tax bracket and less valuable the lower your tax bracket. If you're a low-income earner, this probably makes no sense. Because why I say it's more valuable is the higher deduction you get, the lower the hurdle rate to beat, right?

But again, this is a leveraged investment. You need, I cannot say beyond a shadow of a doubt, you need advice on this. This is not these opinions expressed or just the money, not anyone I represent, but you need advice on this. Be very careful. Yeah, no, I actually just talked to someone

the other day about, yeah, bad advice that they got and they had a planner but i think it was more like an advisor through a bank and they encouraged them to uh invest into an account i don't think it was a registered account because that would be really bad but uh to take out yeah line of credit and invest it and they lost money obviously as you can in the stock market but that the problem was the advisor did not explain the risk that they were taking and i think that's the other component is not only is there bad advice but i think it's not like that the pros are always really like promoted the cons the risks are always really like promoted. The cons, the risks are not really focused on. And these things can happen.

We always don't want them to happen. But guess what? These things can happen. Two very important points to close on. Because I did mention, I can't, when I tell you people to borrow to invest, I cannot emphasize enough that this is a high risk strategy. Okay. A high risk strategy that has to be well informed and well advised.

And I will say, as two points, A, there's an inherent conflict of interest anytime an advisor tells you to borrow to invest, because they're going to make money off that versus not, right? Me telling you to pay down your mortgage is actually counter to my financial welfare, believe it or not. But this is, again, I care about making the client reach their full potential, right? Now, the second piece of this is that, and this is a very good reason, the number, pretty much number one or number two reason for complaints issued to a regulator for as far back as anyone can remember is improper use of leverage, which is in borrowing to invest, okay? Tread incredibly carefully, get the right kind of advice. I will tell you right now, from my personal experience, I've never, in my segment of the universe, not everybody, okay?

I have never had a client who was able to get across the finish line because they borrowed to invest versus not. It hasn't been the case, right? It is not necessarily going to fix it. Don't get me wrong. The math can work, but it's not going to, it's not a panacea to fix people's problems. Yeah, I know. Yeah. Um, I know I could probably have you on here for several more hours, but I won't do that to you. I'll just continue looking at your tweets and just loving it. Where can people find more information about you, Jason? Online. My financial advisory for a planning firm is woodgate.com. We are, and again, it comes to the investment side. Our dealer is Investment Planning Council, IPC Securities Corp.

So anything having to do with them, again, none of this was their investment advice and constitutes advice. Get proper advice. But yeah, so I'm, and really, yeah, social media is where I do most of my damage, Twitter being my condo of choice. It's great.

It's wonderful. Well, thank you so much for taking the time to be on my show. It was such a pleasure having you. I'm so glad I was able to get you. Excellent. Thanks. And that was episode 353 of the More Money Podcast with my guest, Jason Pereira. Make sure to check him out.

You can check his website, woodgate.com. Also, make sure to follow him on Twitter and Instagram. He is at Jason Pereira on Twitter. And the last name is P-E-R-E-I-R-A. But you can probably easily find this on the title of this episode. And for his Instagram, he's Jason M. Pereira. And of course, you can find him on LinkedIn under his name as well. But make sure to check out the show notes for all of those links, all the info about this episode on my website, jessicamorehouse.com

slash 353. And if you want to find any episode in the past, and there are over 353 episodes, make sure to go to jessicamorehouse.com slash podcast, you can find them all there. I've got some things to share with you. So do not go away. Here's just a few words I want to share about this podcast episode's sponsor. This episode of the More Money Podcast is supported by The Globe and Mail. Want to better understand economic trends and policy decisions and how they impact everything from housing markets to employment? Or maybe you want to take control of your finances by learning strategies for reducing debt, managing expenses, saving for a home, and identifying investment opportunities in this unpredictable marketplace. From explainers covering basics like how to invest with limited

cash or how to pick a robo-advisor, to newsletters, tools like Watchlist, and more, the Globe has everything you need to invest in yourself and your financial future. And for a limited time, The Globe is offering unrestricted access to globeandmail.com for just $75 a year plus tax for your first year. For full details, visit globeandmail.com slash podcast. Once again, visit globeandmail.com slash podcast to start investing in yourself today. Okay, first and foremost, just to remind you because this is a very recent thing that I finally did. All of my budget spreadsheets are now available on my website to download. No matter what your situation is, I probably have a budget

spreadsheet to fit that bill. And honestly, if you have a more complex situation than any of the number of budget spreadsheets I have, I mean, I don't know. I can't make any more. I'm done. There's too many. I spend way too much time on all these budget spreadsheets. So if you're single and you're an employee, got a budget spreadsheet for you. If you're in a couple and one of you has a side hustle and one of you is an employee, I've got a budget spreadsheet for you too. I've got budget spreadsheets for anything, anybody, any situation. So you can check them out at jessicamorehouse.com slash shop. Also, if you want to know what you're getting into, well, the good thing is, you can check out

all of the tutorials that accompany my budget spreadsheets on my YouTube channel, or on the shop page where you can look at every individual budget spreadsheet, and it has the embedded video on it. So you can watch the whole walkthrough to see does this look like something I would use? Does this make sense to my brain? Is this something I will use before purchasing it? So make sure to check that out. And speaking of, I do have a YouTube channel in case you don't know. And I've actually been putting out quite a few videos lately. It's a great channel if you want to learn more about specific topics or me answering specific questions that maybe we don't dive into specifically on this podcast. So lots of things about budgeting or investing,

or I love to talk about small business and taxes and things like that. So make sure to check it out. You can find me at jessicamorehouse.com slash YouTube, or I think it's youtube.com slash at Jessica Morehouse. I think that's the handle they've given me now, but I'm slowly approaching 20k subscribers very slowly, but we're getting there. We're very close to that mark. So I'm very excited. So make sure to check that out. Now as a little teaser for next week, it's funny, I actually didn't really think about this when I was creating this schedule. But I usually create my podcast schedule based off themes and topics, not guests. But I've got another Jason on the show. He's actually a repeat guest. He was on the show in 2016. If you remember my episode with Jason VTUG, and

he has a new book coming out. I'm such a fan of him, a big fan of his new book. It's all about happiness and money. I think things that we don't often talk about in association with money, it's very much in line with I think lots of conversations we've been having lately about mental health and self care, and then also financial stress and financial trauma. So I'm so excited to have him on the show next week. You're going to love it. Honestly, I love when I interview a guest and I feel like I just had like a nice therapy session with someone or I just like it just I feel good after. So you're going to love next week's episode. But at the minute, that's really all I've got to share for you. And I'm sure I'll have more exciting things to share in the coming weeks and months. But until then, thank you so much for listening and supporting the podcast. A big shout out to my podcast editor, Matt Rideout. And I'll see you back here next Wednesday with Jason VTUG talking about happiness and money. But until then, take care of yourself. Know that you just listening to this podcast is a step in the right direction. Instead of you listening to, and no

judgment because I listen to a lot of crap, like all those murder podcasts or crap about the housewives. You're taking some time to learn something you didn't know about money. And I think that's really brave. And it's not easy because money makes us feel uncomfortable. So good for you. You're doing awesome. And you're going to keep on doing awesome because I believe in you. So I will see you back here next Wednesday. Have a good rest of your week and weekend. See you soon. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.