The Canadian Investor - Balancing Life and Financial goals with Andrew Hallam

Episode Date: January 17, 2022

Simon and Braden start the episode by discussing some data showing that Canadians are moving to different provinces. Then Braden interviews Andrew Hallam to talk about how to balance your life to achieve happiness and financial wellness. https://thecanadianinvestorpodcast.com/ Canadian Investor Podcast Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Link to Andrew Hallam’s new book: https://andrewhallam.com/balance/  Stratosphere 🚀 https://www.stratosphereinvesting.com/See omnystudio.com/listener for privacy information.

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Today's a fun episode because we have myself, Brayden Dennis, and I am interviewing Andrew Hallam, who is author of several books, and we're going to get to the full show. So before that happens, Simone and I are just here to bounce on and just go over some really quick Canadian-focused macro news. Before we get into the awesome interview that I did with Andrew, I know for a fact you guys are going to like it. It's a really balanced approach to money, spending, personal finance, investing, vacation, travel, health. It's all everything in one and that's why his book is called Balance. Simon, how are we doing? We get to talk a little bit of Canadian.

Yeah. And I'm excited to listen to the interview with Andrew because it was just you and him. I haven't had the chance to listen to it. And the audio is going to be better than the first interview we did where I had some technical issues on my end where the wrong mic was plugged in and the audio was terrible. So it feels like it'll be a treat this time. Well, now we like force our guests to record on local software which i think is wise and then yeah last time your mic just wasn't plugged in or something yeah you know these are things you'd think we would know as as people who run a podcast like how to plug in a microphone it was plugged in it was the computer was using a different mic with the one from my camera that's embedded so it really

created like a feeling like I was about 20 feet away trying to scream in the microphone. You're like a few feet underwater. Let's get it right into it, which is some housing stats, some Canadian migration stats. According to a poll from Royal Bank, they released recently that 36% of non-homeowners under the age of 40 have just straight up given up on buying a home. What do you think about that? Yeah, I mean, on the one hand, it is sad because it does show that homeownership is becoming more and more out of reach exactly for ordinary people, for a lot of people in Canada. And that's a sad thing to see because a lot of people

would like to be homeowners and be able to do whatever they want to their home, which you don't obviously have the flexibility when you're renting. And it also shows that salaries are just not keeping up with the value of homes. I think that's probably the most alarming thing about this stat is people just don't have the money to be able to purchase a home because the price of homes are just going up too quickly. Royal LePage expects home prices across Canada to increase by 10.5% in 2022. In 2021, Toronto home prices rose 18% and in Vancouver, 17% respectively. Now, that doesn't shock me at all. I've seen some other things that are in the 20% plus. I think that seems on the conservative side. But yet again, on the back of a record-breaking year, we do it again with higher and higher home prices, especially in these city centers. So I can understand why people are feeling that way,

centers so I can understand why people are feeling that way, especially when the price of everything else is increasing so much that it's actually saving for that down payment is getting more and more difficult. And that's why I think it's slipping away from some people. It's not only it's like, well, I used to be on a decent track to saving, but things are just not adding up these days. Yeah. And I think it's pushing people out on the risk spectrum as well, right? To be able to get that down payment. And I was listening to an interview on another podcast where this young guy put all his life

savings with leverage into Dogecoin. And I think you listened to it as well. And actually, what the numbers are telling me just kind of reminds me of that because the main reason he did it was a way for him to be able to afford a home. And that is worrying for me because if people are going on the risk spectrum like that, really far, far out and taking these huge bets with basically being all in with their savings on these super risky assets, yeah, they might get lucky. And the right word here is lucky. And they may achieve their dream, but they could also lose everything. And

probabilities are probably not in their favor as well. That's right. I mean, it's like if it's slipping away the possibility of getting one and you're like, okay, well, I may as well just bet the house, no pun intended, on something super far out the risk spectrum like Dogecoin, then maybe I'll have a chance. If it goes on a huge run, then this amount of money I have will all of a sudden become a down payment. Now, that's obviously extremely risky thinking and something we would never advise anyone to do. Not that any of this is advice to begin with, but you know what I mean? It's just like, it's kind of sad is what it is. That's what I think. Annual breakdown shows that Ontario

had a large number of migrants into other provinces. 85,000 residents heading to other provinces. 21,000 moved to BC, 17,000 moved to Quebec, 16,000 moved to Alberta, 18,000 moved to the Maritimes, including Nova Scotia, New Brunswick, and PEI. That's a lot for the Maritimes. I was surprised by that number. This is Stats Canada figures that are posted every single year. It's actually pretty impressive. Sometimes I'm like, government websites are always so bad. Sometimes they have good data, but the website just sucks. This is a good example where they have good data, but the website sucks. What do you think of this? I'm not surprised at all especially the you know the feeling around here these days especially yeah i'm not surprised so two main thoughts here the first one is you're seeing more and more employers allowing employees to work remotely and not being traveling distance for whatever office they were assigned to before the pandemic so i think on the one hand you're probably seeing that there that's probably explaining why we're seeing just a large movement to the Maritimes. The other thing is, obviously,

it's probably people are probably moving because I'm sure for a variety of reasons, but I think a lot of people are probably moving because of affordability as well. And living in the Ottawa Gatineau area and Gatineau, for those who are not familiar with Ottawa, is just on the Quebec side. Ottawa and Gatineau, in my mind, has always been one city divided by just a river. But the reality is, having a house is way cheaper on the Quebec side than it is on the Ottawa side. You can see a discrepancy of, I don't have the exact data, but I know enough about it to know that, you know, you can see a difference in like probably about 30, 35% for similar neighborhoods from Ottawa to Gatineau.

And I know a lot of people who have done the move, they've moved to the Quebec side because they could afford a home there. The downside with that is you do pay more taxes on the Quebec side. So that is the bigger downside of going there. But we see it a lot. We're probably one of the most affected regions right there because of that, because it's so easy to move. You can still, you know, keep your same friends. You're still close to your family. If they all live in the area, you just have to switch the province, cross over the river. So, it's not something I'm very shocked of seeing and living in the region I am, it's something we're used to seeing here. Yeah, right. Like you can be a few clicks away from where you were before and be in a completely different province.

From my house, I can literally bike about 10-15 minutes and I'm on the Quebec side. Yeah. Yeah. Okay. So just like a good, a good seven iron if you're really strong. Now this is interesting stuff, right? Because the remote work thing is, is obvious that as a huge driver for this, I mean, there's all this like macro plays here that could be obviously at play as well. But the remote work thing is real. And if people are like, screw it, I'm going to go live in the mountains. I'm going to beautiful

British Columbia. I'm going to go live in Victoria on the island. I'm going to go live in the interior of British Columbia. I'm going to go live in the mountains in alberta i'm gonna go live on the beautiful atlantic ocean out east like this makes a lot of sense from my perspective i do think that the muskokas in ontario are really fun and beautiful but other than that i mean i i i see it man you're you're see mom just put up uh, rubbing his fingers together, implying that it's very expensive up there. And I tend to agree with that sentiment. Yeah, exactly. And I mean, Ottawa is getting more expensive. So you're talking about these increases in prices.

We've seen similar increases here. But again, I've mentioned before, I am looking not super actively, but potential vacation rental. And we're pretty much exclusively looking on the Quebec side because there is better opportunities there. But yeah, it makes a whole lot of sense for people to be moving. I think it's going to be just our I think it's going to be the new reality is remote work. You know, hopefully the pandemic goes away sometime soon, or I guess we'll just learn to live with it. But I think remote work is just the way of the future, to be honest, or at least a hybrid.

Yeah, that's right. Well, this is a perfect segment because we actually just touched on some interesting topics that Andrew Hallam and I discuss about in this interview with him coming up here, which is, you know, personal finance can be vastly different if you decide to go live somewhere else. And I think that that's a perfect tie-in with the interview. I think you guys are going to absolutely enjoy this. I know when you listen, you're going to absolutely enjoy this.

So without further delay, here is my chat with Andrew Hallam, the author of multiple books. You'll understand why I respect him so much very shortly. Take care. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. and with them, you can buy all North American ETFs, not just a few select ones, all commission-free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real people that are ready to help if you have questions

along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. That is questtrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get

started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at at airbnb.ca forward slash host. That is airbnb.ca forward slash host. Listeners of the Canadian Investor Podcast, we have a special little segment here with Andrew Hallam. Andrew, I'm really pumped to do this. Now, this is actually a third time doing this. I don't know if you remember way, way back, I had read your book. I was a big fan. And I invited you to come on my little podcast that I think only my mother listened to at that point. And you were nice enough to come and talk to me. So I really

appreciate that. Thanks for coming on the show today, man. It's the third time, is it? I didn't know that. It's the third time. Wow. I thought it was the second time, but third time. All right. Yeah. Because you've been on this show now twice, way, way back, like one of the first episodes of this show, and then now the third. And then I want to say, oh man, maybe even 2016, 2017, I had a small show. I was an absolute nobody. I loved your book. And I was like, I'm going to make a podcast and see if I can talk to some of these authors. And you are one of the people that I really want to talk to. Anyways, I think that that's kind of funny how much has changed. And I really appreciate you joining. Okay, so let's get right into it.

Let's start first with who you are, your first book, The Millionaire Teacher, what you've been up to now. I think your whole story is quite fascinating. I guess I was one of these people from a really early age who was inspired to become financial independent early. So I started investing when I was 19 and I was a high school English teacher. And I was also, after a while, started writing for personal finance magazines as well. And for me, lifestyle has always been first and foremost,

like, and it really is with anyone, if you start asking them like why they want to do something. And so for me, the idea was that, you know, I don't know if I'm going to live to see retirement, And it really is with anyone if you start asking them like why they want to do something. And so for me, the idea was that, you know, I don't know if I'm going to live to see retirement like no one does, or at least retirement age. Nobody really knows how long they're going to live. So my whole premise was to live the best life that I could at the present and then think about the future, but live the best life I could at the present. So one of those things for me was travel. about the future, but live the best life I could at the present. So one of those things for me was travel. So I was teaching high school English on Vancouver Island, and I took a deferred salary

leave, which gave me a year off, essentially with full pay. So the school district takes a percentage of my income for a three-year period, and then in the year off, pays it back to me on a monthly basis. So I took a year to travel as much as I could. And then I ended up at Singapore American School. Ironically, instead of going back to Canada, I took a job at an international school in Singapore. And meanwhile, I taught high school English and personal finance. And I met my wife, Pelle, there. And I was there for 12 years. And then, you know, meantime, I'm, you know, I wrote Million for 12 years. And then, in the meantime, I wrote Millionaire Teacher. I wrote a book for expats. I wrote a column for Canadian Business Magazine. I was

writing for the Globe and Mail. And we figured that in 2014, we would take like a year off, one year, which led to two, which has led to like seven going on eight. and we're loving it. So during that year, obviously meeting all kinds of really fascinating people and the speaking requests really picked up. So I guess I've spoken about personal finance and investing and general lifestyle and happiness at more than 30 different countries. And it's been hundreds of talks. It's been exciting and really exciting. Okay. Well, that's some good context. So this is the Canadian Investor Podcast. You are Canadian. I actually don't know where you're from in Canada. My family's in Victoria, British Columbia. Oh, nice. And so you grew up there. Yeah. And I worked, actually, I grew up in Kamloops

and then I went to university in Victoria. My family moved down there around that same time. And then I taught in Courtney, British Columbia. Okay. So about three hours drive north of Victoria. Right. And you would, you would bike all the way to school. I did do that. That was my second teaching year. And my second teaching year, I would ride my bike 55 kilometers each way. So I was actually living in Campbell River because the rent was lower there. And I was riding my bike back and forth along the highway. So I was doing like 110 kilometers a day. And it was saving me money so I could pay off my student loans faster and so I could invest more money and gain financial independence was the idea. And as crazy as it sounds, I grew up as a bike racer, so it's not quite as nutty as it might appear. I would be doing quite a few miles anyway just for kicks.

So I just worked that into the commute. 100 clicks a day. I mean, a good way to save some money, but also you must've just been in ridiculous shape. And I know you still do keep yourself in really good shape. All right. So your books have a specific flow to them, which is get your personal finances in order, one. And correct me, this is how I'm interpreting the book. We can chat about it after, but get your personal finances in order, number one. Number two, stop buying crap that doesn't make you happy, number two. And number three, now that we've sorted that out, let's talk about investing the rest.

sorted that out. Let's talk about investing the rest. And so let's do that with the flow of this show as well. A major theme of the book is buying things, air quotes, things just won't really make you happy. And there's scientific backing that you provide in the book about that. Do you want to just speak to that phenomenon and why people are so wrapped up in this kind of never-ending rat race with things? Yeah. What it is, is if you were to ask Daniel Kahneman, he's the Nobel Prize winning behavioral economist. He says that we actually don't know what will make us happy in the future. We think we do, but we really don't know. And so when it comes to buying things, you know, like upgrading your car or buying the latest phone, we think that it's going to improve our life satisfaction, but based on hedonic adaptability, it doesn't. Now we get,

simply get used to the stuff that we own. So that new car just becomes, for example, another car, something that gets you from A to B. It's like a sugar fix. So Norbert Schwartz of the Michigan State University did a really interesting study. He and his team looked at how much satisfaction people derive from driving their vehicles. And the researchers or the people that were in the study, like with any good study, had no idea what was really being assessed. So they're asked on a daily basis, all kinds of different questions. But one of the questions was, how did you feel during your drive this morning? And what they found is that there was no difference in terms

of how people felt about their drive, whether they had a high-end Mercedes-Benz or whether they had a 10-year-old Honda, basically because we get used to what we own. So reflectively, though, if you ask somebody with a top-of-the-line BMW, like, hey, do you prefer that to maybe the 10-year-old Honda you used to own? They would say yes, but that's what Daniel Kahneman would call reflective happiness. It's almost a rationalization.

Well, of course, I have to be, right? I mean, I truly have to be. So it's almost a protection thing. But true happiness is measured by what Kahneman calls experiential happiness. And a couple of professors, Lee Van Boven and Thomas Gilvich, published an interesting paper

in the Journal of Personality and Social Psychology that was called To Do or To Have. And what they found through their research is we actually gain more satisfaction out of spending money on experiences than we do spending money on stuff because the experiences become part of your identity. And so, especially when you're sharing those experiences with people you love and respect, like 10 years from now, grading you and a bunch of friends are hanging around a campfire, sharing stories. You're not going to talk about the car you bought 10 years ago,

or the phone you upgraded to in the year 2025. You're not going to talk about that stuff because that stuff doesn't have a lasting impression. But money that you spent with your friends, let's say you and a bunch of buddies decided that you were going to go off on this trip to Hawaii together, and you got into all kinds of fun and mischief, that's the kind of thing that gets retold, gets revisited mentally, and especially when it's money spent with people that you respect and care for. There's this added benefit to that. It's an interesting thing because people don't generally recognize that material acquisitions don't enhance their life satisfaction. that material acquisitions don't enhance their life satisfaction. And so the irony is they'll buy stuff, often stuff they can't afford, thinking it will make them happy or thinking it'll make

them at least as happy as Mr. and Mrs. Jones who live next door, who have that same kind of vehicle. But in doing so, that's money that they can't put towards debt reduction. They can't put that money towards investing. They can't put that money towards spending on an experience. So I get a kick out of, I think, Braden, when people talk about deferred gratification, like, oh man, you've got to suck it up. If you want to grow wealthy, you actually have to suffer. You actually have to put yourself through some kind of voluntary misery for some point in the future when you're going to-

This toxic fire movement, the financial independence, retire early, while there's some merit to it. I mean, I'm not trying to live like a peasant during my prime years of my life. like a peasant during my prime years of my life. It's so true. At that same time, if it's tempered and it's balanced and you're just not spending money on stuff, but you're spending money on experiences. Now you've got to balance and see this is the sweet spot because when you're not spending money on stuff, you're not really denying yourself. According to the research, you're not denying yourself your life satisfaction. And then when you're using, you know, some of that money to spend any money on anything at all, thing and or experience. To me, that's a shame because it's so short-sighted. That person's living their prime years of life in some kind of, I don't know, forced destitute.

of, I don't know, forced destitute. And knowing too, the big shame is that, as I talk about in the book Balance, life is like this dark hourglass. And when you're born, that dark hourglass gets tipped and no one knows how much sand they have left. And so like you or me, we could be gone next week, like any of the listeners, I mean, it's just a reality. I mean, it's kind of like- It's the only sure thing, right? Dude sounds kind of negative, but you're right, right? There's no sure thing. Like there's no guarantee that we're going to see our 80th birthday. So it's something where I think it's important to live for today and have an eye on tomorrow. Yeah, that's really well put. And I couldn't agree

more. So I've always been very frugal. My friends often make fun of me that when they call me cheap, I get so much satisfaction out of it because I love that. And I'm the same guy who was so frugal during my university years, and then spent $22,000 on a backpacking trip when I finished school. And the only reason I was able to do that is because I was really disciplined with my money. And if I look back on all the stupid crap I could have bought, I could have bought a brand new shiny car. I could have financed a BMW M4 with all that. I could have done all kinds of stuff. And if I look back, none of those things would ever have made me as happy or satisfied that I went the experiential route. And so I couldn't agree more. Let's talk about the desert island test. I emailed you earlier when I just had, you sent me the book, by the way, the book is called

balance. What is the it's balance? Semicolon fill in the blank for me. Yeah. It's balance how to invest and spend for happiness, health, and wealth. And that deserted island litmus test or that desert island litmus test is one of my favorite parts in that book, Braden. It is. It is. Because I emailed you, I was like, I love this desert island test. And it's so true. So let's use the car example, because we've been talking about cars a little bit. So if I'm going to buy a car, use the desert island test to ask myself, what car would I get if no one was to ever see it? If I was only going to be on a desert island to get me from point A to point B, I think this is a really good way to think about one,

no one really cares what car you drive. Like no one really cares. Like, do you, do you know anyone that you think is cooler because they drive a really nice car? Sometimes it's the opposite. You know, look, I mentioned a guy who we've got an apartment, we've got a condo in Victoria and there's a guy and I, I haven't met him to be really fair. I haven met him he's got a really nice brand new top line corvette and it's a really hot looking car and it's by far the best car on the block and he has a license plate that reads you are second you are two and d come on and so what's happened here is, you know, he's flipped two middle fingers at his neighbors without really realizing it. And so instead of people thinking that the benefit of they love, let's say, the German engineering of a top quality Mercedes or a top quality Porsche.

And for them, they have pure gratitude with respect to it as well. So they'll drive it and really appreciate it. Take a moment to really think about how the car handles, how it feels, to really appreciate it, to wash it, take great care of it. Take a moment to really think about how the car handles, how it feels, to really appreciate it, to wash it, take great care of it, and not have hedonic adaptability play its role to the same extent. I believe there have to be a few people like that. But if, and I think this is the hard question, that litmus test. If that car were invisible, you don't even have to be on a deserted island. If that car were invisible, you could enjoy it, but no one ever saw you drive it. Would you still own it?

And we have to ask that really hard question. It's like, who are you doing it for? Right. Exactly. Exactly. In most cases, when people are really honest with themselves, Braden, they would at least in part own that car to be seen. So like, you know, when I was researching for the book balance, I was mountain biking with a woman in Cumberland. And I was telling her about the deserted island litmus test. And she said, you know, that's interesting you say that because I bought a top of the line, husband and I bought a top of the line Tesla just the previous month. And if I'm really honest with myself, I still would have bought an electric car, but I would not, if no

one could see me drive it, I wouldn't have bought that car. And she said, I feel kind of icky when I see the clarity of this for what it is. Yeah. I think it's an important test and we're just using the car example here because it's an easy one and it's a big purchase for everyone. But I do like that you brought that up. For instance, my dad, he's a Porsche fanatic. If no one ever saw his garage, Porsche fanatic. If no one ever saw his garage, he would still have his classic Porsche. He cleans it with a toothbrush. He brings it to different meetups. He's developed friends because of the community. And he loves Porsches. He absolutely loves Porsches. And I know for a fact that if no one ever saw it, he would still own one and still enjoy it. So it's not a knock on the specific purchase, but more around when it comes to

financial decisions, who are you doing it for? And I think that that's what your book really drives home that point really well. So, okay, that's good. I'm glad we talked about the desert island litmus test. All right. So you always do provide in your books, both in this one and the millionaire teacher, really awesome data on eternal optimism in the broader stock market, and especially around these broad market indices. Why should investors continue to be permanent optimists? Not only does the data provide it, but looking forward, what is your elevator pitch for why investors should continue to be permanently optimistic? Well, on aggregate, corporations earn more money on aggregate. And so if you were to look at all of the companies in Canada, so take the TSX S&P and you look at what their revenue, what their

net income was, let's say 10 years ago, and they compare that to seven years ago and compare that to three years ago, compare that to today, compare that to three years from now. The net revenue rises over time. Now, the share prices, the stock market, long term, tracks overall revenue growth plus dividends, a net income growth plus dividends. So ultimately, it tracks it long term. Sometimes it gets ahead of itself where prices of the stock market rise faster than corporate earnings. And when that happens, usually eventually there's some kind of pullback and you get the inverse where you'll end up sometimes with obviously the opposite occurring, where the stock market then has to catch up. It's not rising as fast as corporate earnings. So you're seeing that this actually right now in Europe, you're seeing

corporate earnings rising faster than European shares prices over the last, let's say, seven or eight years. If you look at the worst time to invest your money, like if I ask somebody, what's the worst time for you to slam a bunch of money in the market and just leave it for 30 years? Most people would say if they have any sense of history, they'll say 1929. Yeah, 1929 was the worst. I mean, the market ended up dropping 85%. It ended up going through the Great Depression. It took quite a long time before the markets actually ended up recovering. But 30-year durations are durations that we need to think about, even if we're 50 years old, because your investment duration is actually your lifetime.

It's not like one year from now. It's not five years from now. So what I think helps to really steady people's nerves is to understand that long-term, like over a 30-year plus period, market returns are remarkably resilient and consistent. And so while you're working, you're adding money to the markets. And when you're retired, you're withdrawing money from the markets, but you're keeping money in the markets literally until the day you die. So you don't want to run out of money. So you'll be doing whatever, withdrawing your inflation adjusted 4% withdrawal rate. But if somebody back to that 1929 scenario, they invested a lump sum in 1929 and they left it for a full 30 years.

That money would have grown by a compound annual return of a little bit more than 8% per year on average. Even with the worst market timing ever. Yep. With the worst market timing ever, which is phenomenal. I mean, that $10,000 would have grown to something like, off the top of my head, within a margin of error here, $120,000-ish. So yeah, I should actually look that up in the book. But that in itself is so compelling in terms of the importance of somebody maintaining an optimistic outlook on how markets perform long-term and the importance of having that optimism and just continuing to add money

in the markets when they're down. Just keep adding money into the markets whenever you have it. Yeah, that's that consistent dollar cost averaging that we talk about on this podcast absolutely relentlessly because timing the market, trying to time the market, person who put money in the market in 29 or right before the GFC in 2008 or right before the COVID crash in February of 2020, no one knew what they were in for. Yet, if you look back, it was still a good decision. Even in the short term, when it feels like you lost your everything, as long as you are going to continue to dollar cost average and think about the long term, investing in the market was still a good idea. As do-it-yourself investors, we want

to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit Questrade.com for details. That is Questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a

combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. When it comes to fees and investing, you have been quite vocal about the importance of understanding the fees and how they affect your investment returns. Do you want to just speak to that and how important really is it by the numbers to give people some scale and some context

of how much it can really affect their financial future? And over a lifetime, if you're investing with a typical Canadian actively managed mutual fund and you're paying 2% a year in investment fees, over your lifetime, easily make a difference between you having, let's say 500 grand or a million dollars at the end. So it's just like, it's massive. And so many people think, well, it's just 2%. Like he's just talking about 2%. No, it compounds dramatically over time. Yeah. I saw that one of the robo advisors, they had a blog post and a study to try to pitch why you should do ETFs versus actively managed mutual funds, which obviously you and I both agree with that. And they said that the average Canadian between an average mutual fund price in this country,

as measured by S&P, and what the market has done minus a few basis points for paying the management expense ratios on ETFs makes up an average of $324,000 per person. $324,000 is a gigantic amount of money for most of the population. That's amazing because that's going to be the average, but if you're a big saver, it's going to be potentially well over a million dollars in lost opportunity cost, which is unbelievable. Right. Yeah. And so I'd have to look at all the variables that come into that. But when you hear that number, neither of us are thinking that's hard to believe. That sounds kind of right on. Based on your example, that sounds right on to what you said too. There can be the difference of several

hundred thousand dollars. Okay. So a couple last thoughts here on putting it all together here, which is spending for happiness, trying to avoid things that realistically, scientifically don't actually make us happier with spending our money and investing our money in for the future. How much is enough? That's going to be a different number for everybody. But I think we don't need as much as we think we do. And there's no set number. I hate looking at, when I see a magazine

cover or online story suggesting that you need X amount of money to retire. I mean, it's totally wrongheaded because it's so dependent on where are you choosing to live and what's your lifestyle going to be? What country are you choosing to live in? Like one of the things that I really recommend is it has two benefits to it. If you're spending five months a year in Thailand and we'll call those winter months or in Mexico or in Costa Rica or in Panama where the sun shines and it's really comfortable in the winter, you don't need as much money as someone who decides they're going to stay in Toronto all year long. I mean, you could leave your home in Toronto and you could rent it out for five months. And you could literally live on the rental proceeds in some of these low-cost countries. And so that's why I think it shows a real lack of imagination when you're seeing what people are suggesting and a lack of a sense of what personal finance is all about when people, not just who were traveling, but I started to meet people on Vancouver Island and in British Columbia who were living on far less than I could really imagine them doing. And at first I would see these travelers and they would have

maybe like a part-time gig and they might have an investment portfolio of a hundred grand. So they're living in Bali for full-time kind of in and out of a place like Bali and Thailand and Malaysia. And they might be withdrawing like 4% of their $100,000 portfolio. So they're withdrawing $4,000 a year. And they might be earning just in these little side gigs, you know, 15 grand, just doing a little bit of this and a little bit of that and living well. Like I'd meet them at a, like getting a foot massage and like, so tell me, or I'd meet them going out for dinner. Like you're eating this dinner. This is a nice dinner. Like how long you been here? Like, what are you doing? What's your

story? And these people are all different ages. You know, some of them were in their 50s, 60s, and 70s. Some of them were in their late 20s, 30s, and 40s. Some of them had kids with them. They were either homeschooling their kids or their kids were going to one of the international schools. In that case, sometimes when your child's going to an international school, it ends up costing quite a bit more money. But it really opened my eyes, Braden, to just how various that answer can be in terms of how much people really need. Right. And you touched on an important point there, which is it kind of changes what personal finance is all about because the name is personal finance. As the name implies it it really does matter and i know what you mean man i have when i was in vietnam i swear we were living like kings for just like a few bucks like

like literally just a few dollars it's it's uh it is incredible so i i like that you bring that up. And it brings up an interesting point, which is if you haven't gone out and seen that stuff and you haven't gone out and seen a lot of the world, I just recommend you do that. I mean, I know you can attest to that. When did you leave? I remember one of the first times I talked to you in person like this, you were about to get in the Sprinter van or the Winnebago and head to Argentina. And I don't know if you guys ever made it there. It's just been this never

ending trip now. But had you traveled much before that or did you know what you wanted to do like that? My parents never had a lot of money and there were just four of us, but one thing, or there were four kids, sorry. So six, six of us in total. But one thing that they really emphasized was exposing all of us to different things, whatever our passions would be. And they'd ask us, like, they asked me a question when I was in grade seven, Hey, do you want to go on this educational tour through, through the Mediterranean, just you and a bunch of grade seven kids, and you'd have to save a bunch of money for it. And we'll help with that with that cost. And I had a newspaper route. But I think that changed my life. It was, you know, we went through Greece, Egypt, Israel and Turkey. And I came back with a broader sense of the world. And it wasn't just me. And it wasn't just, you know,

the way we live in our culture. And I came back with a burning curiosity. So after I graduated from high school, I took off for a year and I traveled and I'm sort of doing, you know, Tim Ferriss sort of talks about taking these mini vacations, mini retirements, mini retirements. And I'm all for that for me personally, for me, you know, that for me is awesome. Just the idea that I can have these different experiences along the way. And I think too, for your listeners, one of the things that I wanted to bring up, you know, that I mentioned in the book balance

is that as attractive as retiring might sound, and this brings us right back to what Daniel Kahneman says with respect to us, not knowing what will make us happy in the future. With respect to that, what actually makes us happiest in the future with respect to work and allows us to live as long as possible, it's to continue working part-time. It's something you're passionate about. So if you've got a full-time job and you attain financial independence or you get close to attaining financial independence, you know, somewhat close, maybe you're three quarters of the way there, and you're fairly young. If you're not enjoying your job, then you're literally selling pieces of your life

to your employer, you're prostituting your life. And so my recommendation is dial back, find something part time that you thrive on, and try to do something part-time for the rest of your life instead of fully retiring. And that doesn't mean that you can't take like six months where you do nothing but explore, but to work part-time keeps your brain active, keeps you social, keeps you learning words off things like dementia and Alzheimer's. And this isn't just me saying this in the book Balance, I put in all kinds of evidence and research that back this, which I think, too, Braden, really alleviates a lot of stress associated with people having or feeling like they have to reach a certain financial number at a certain age. Yeah, that's really well put. And I know that people who are

in retirement or about to enter retirement face that same question. Like one, how am I going to do nothing? And two, what can I do that's part-time? And so I guess like what you're saying is explore your passions first. Am I summarizing that correctly? I think, yeah. All the way along too, I don't think this is something you need to do when you get older. I'm going to start exploring my passions. And I'm pretty sure that's not what you meant, but try and do different little things that you might get a kick out of doing for later in life. Like give yourself exposure to different, different ideas. And my dad did that with sports, for example, I've like, he introduced us to every single sport imaginable and some crazy stuff too. And it was just like,

eventually my brother and I caught onto the things that we like to do. And I think people should do that too. Like for you, you haven't played guitar, pick up the guitar and learn the guitar. And maybe, you know, you might end up joining a band, might make a little bit of money doing that. I mean, just this fun stuff that whatever it is that you're passionate about, but test the passions. And then there's nothing wrong either with working with different passions. So I'm going to be a yoga instructor for a while, or I'm going to be a personal trainer for a while, or whatever it happens to be.

It brings in a bit of money. And for you, it does not feel like work. Right. So it can kind of be both. It can be exploring your passions or potentially finding out what they are, but also, you know, at least giving yourself a paycheck, not a paycheck, but maybe a paycheck. Yeah. Yeah. Okay. So one last question, how do you, I'm just looking at you on this call. How do you keep yourself in such good shape? Like I know you used to bike a hundred kilometers a

day to work. I mean, kind of building that into your schedule. Not everyone can do that. What do you do? Because you are obviously still very active and in very good shape. Like, what do I actually do physically on a typical day? Yeah. Well, this morning I'll just, I'll run through today. So I got up. I went for a 50-kilometer bike ride. Today? Wow. Okay. So you're still doing the 50 clicks, okay? I'll do different things. Sometimes it's a run in the mountains. Sometimes it's a bike ride. During the course of the day, I'll do about 100 pull-ups today and I'll do about 300 push-ups.

300 push-ups? today and I'll do about 300 pushups. 300 pushups? Yeah. One of the things I do like to do is I like to run and drop to the ground and do 50 or 60 pushups at a time and then get back up and continue running. Keep going. You can bang out just 60 pushups just on the spot right now. That's crazy. Yeah. Yeah. Yeah. So what I'll do on a typical run is I'll do like five sets of 60 pushups. So I'll be running at some point, I'll drop, I'll do 60. And then it's so hard to run after that, because all the blood's in the upper body. So you're trying to run and your breathing is really labored. And so you know, run, literally, here's the funny thing, I'll run until I catch my breath again. That's the irony, right? Because I'm running, but at least my breath gets to a manageable level. And then I'll get down and I'll do another 60 pushups. So I'll do, you know, in an eight kilometer run, you know, I'll do 300 pushups in an eight kilometer run. And one of the things that helps me, it helps me with every aspect of life is just goal

setting. So I tend to be quite goal oriented, but I'm also lazy. Like it doesn't sound like I'm lazy. But if I don't write down what I'm going to do during the day at designated times, like actually make a fairly strict schedule. And that schedule, like after I chat with you, my schedule actually calls for a nap, like I'm literally I'm gonna lay down in the bed, and I'm gonna have like a 30 minute nap. So I'll schedule in like pool time, I'll schedule a nap time, I'll schedule and work time. And I'll schedule and work out sort of interspersed throughout the day, including like stretching routines, that kind of thing. And if I if I don't do that, I mean, like life gets in the

way sometimes where you can't stick to that actual schedule where it says here at 12 o'clock, I've got to go to the gym. Sometimes something will just come up and I can't. But that actual schedule where it says here at 12 o'clock, I've got to go to the gym. Sometimes something will just come up and I can't. But even when I don't end up fulfilling everything on the schedule that I have, by the time I get to the end of the day and I look back at what I did achieve, it's always far better than it would have been had I not have written it down and just kind of mentally said, okay, I'm going to do this and this and this and this. Cause then I'm going to be lucky if I do half of it. Right. Oh man. That's I, I feel like reassured. Like I'm not crazy by writing down like what I'm going to do, like step-by-step everyone's like everyone these days, like take back control of your calendar. Like don't book yourself in. I'm like, I'm like, one, I'll get nothing done. And two, I'll actually feel

less accomplished and less, uh, satisfied slash happy at the end of the day. So I'm glad I'm not the only one doing, uh, doing that as well. I get more leisure time out of that too, because I book, I book in the leisure time. Okay. You book in the leisure time. Maybe I should do that too. Oh, you got to do that. Got to do that. You got to book in the leisure time too, because you become so conscious of time and then you don't, like I always talk about time as this non, it's the only non-renewable resource that you have. Like if you lose 10 bucks out of your pocket or a hundred bucks or whatever, you can always earn that back.

But if you lose a day to messing around on the internet and going down, you know, rabbit holes on stuff, which we all do, you know, like it's incredible how much time we can waste. And so when I'm writing this stuff down, I'm so conscious of just not wasting time reading articles or watching YouTube videos and such online. So I don't typically get dragged down into that. Now I don't do this all the time, Braden, like I'll probably write out schedules like this for five days a week. And then the rest of the time I've kind of lazy, but on those lazy days, I have less leisure. I have less physical activity and I get less done. Yeah. And so you got, you know, by not doing that, you ended up getting less leisure time.

And that's, it sounds so counterintuitive, but I know exactly what you're talking about. And I think everyone listening, especially lately with, you know, just this like never ending time warp of COVID. I think, I think people know exactly what you're talking about. Andrew, this has been so awesome. I know that the listeners are going to like this because like your book suggests, this is a balanced conversation. We talk like 99% of the time about strictly investing. And we miss some of that personal finance touch as well, because you and I both know you can be the best. You can be Warren Buffett, but not save a nickel. And it wouldn't matter in terms of how good of an investor you actually are, because you have to actually have some

savings to fuel the fire. If you compound a dollar, a nice amount every year, it's not going to matter. You're going to need some more capital. Thanks so much. Do you have a just quick handoff of where we can find more about you online? And has the book been released? I know we were scheduling this for right about around the release time. January 18th is the release date. So if you're listening to this on January 18th, it's available. Otherwise, it's available for pre-order. And January 18th, it'll be in most of Canada's bookstores as well. This is going to work out perfectly then the timing wise. Okay, great. So go ahead and check

out that. We'll have a link in the description for Andrew's new book and his both your books. I know you have a third one I haven't read, but I've read both The Millionaire Teacher and Balance and they're both incredible. I couldn't speak highly enough about them. Andrew, thanks so much for coming on the show. Appreciate it. It was my pleasure, Braden. Thanks again, and enjoy the rest of your day. The Canadian Investor Podcast should not be taken as investment or financial advice. Braden and Simone may own securities or assets mentioned on this podcast. Always make sure to do your own research and due diligence before making investment or financial decisions.