The Canadian Investor - Do Canadians Really Need $1.7 Million to Retire? + The Gamification of Investing

Episode Date: April 20, 2026

In this episode of The Canadian Investor Podcast, we break down the latest data on Canadian household wealth and what it reveals about the growing divide between those benefiting from rising asset prices and those falling behind. We discuss household debt levels, savings rates, real estate stagnation, and why many Canadians may be feeling more financial pressure than headline numbers suggest. We also dive into BMO’s annual retirement survey, where Canadians now believe they need $1.7 million to retire. We unpack why these figures can be misleading, how retirement needs vary dramatically across provinces, and the key factors that actually determine how much you’ll need to stop working. Finally, we discuss Wealthsimple’s new partnership with X (formerly Twitter), allowing users to trade stocks directly through the platform. We explore what this means for retail investors, the gamification of investing, and whether making stock trading easier is ultimately helping—or hurting—long-term investors. Tickers of stocks discussed: RY, NA, TSLA Subscribe to our Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense. See omnystudio.com/listener for privacy information.

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there's going to be some great opportunities for investors this has to be one of the biggest quarters i've seen from this company in quite some time Welcome back to the Canadian Investor Podcast. I'm back with Dan Kett. We are back for our regular Monday episode. We have some fun topics here on the slate today. We're going to be talking about Canadian households and how they're faring on in terms of balance sheet. The type of assets that Canadians, you and I on average have, whether it's financial assets or even real estate. And then we'll go over the BMO yearly retirement survey amongst other thing. You may have seen this. headline where they'll ask a group to know how much you think you'll need to retire. And it always makes headlines. So that came out a few months ago, but it'll be interesting just to break that down. Also bring some nuances because the headlines sometimes make things look like they're worse than they actually are.

And then you'll go over Weld Simple and the X partnership that will essentially allow well simple brokerage users to click on the symbol on X and go directly into their brokerage and buy a stock. I don't even think you need to leave the platform from what I've read. Okay. So that'll be interesting. Yeah. It's kind of like that segment will be kind of a, the partnership and then just some overall trends in regards to brokerages. Okay. No, I think it'll be a fun episode, just a little bit different than what we, do, but I think a fun one, obviously, the X and Well, Simple Partnership, something we could have talked on the news and earnings, but we had quite a bit on the slate, so we decided to bring that back to Monday. So let's start here with Canadian household balance sheet. So every quarter, Sat's Canada, releases information about how Canadian households are doing in terms of wealth. The survey I'm going to be referencing is the latest one for Q3 of 2025. I'm assuming Q4, 2025. will probably come out soon, but it still gives us, I think, some good indication on how Canadians are doing.

So the total household net worth for Canadians, so the first net worth increased by 2.6% for Canadian households as a whole to 18.4 trillion. I hadn't looked at this in a while. I was like, oh, wow, it's higher than I thought it was. I mean, it's still, I guess you could say it's still a net decline on a real basis, I guess? guess. Because what is inflation 3% around right now? High 2s. So yeah. Yeah, exactly. No, I think, no, that's a fair point here. And something that was interesting and something we've been talking about quite a bit on the podcast is the wealth is not evenly distributed. So it is something that we reference. I even talked about the K-shaped economy where the top of the K is doing very well and the bottom of decay, which tends to be much larger than the top of the K.

is actually not doing all that well. And this report really confirms it. So they actually state in the report that the top 20% of household holds 70% of all financial assets. So if we flip this around, it means the bottom 80% own only 30% of those financial assets. So even though we've seen markets and assets rise quite a bit over the last five years, you can definitely just look at this and say, okay, there's only a small point. portion of Canadians that have only really, that have really benefited from that.

Yeah. I mean, that's, I think that's kind of the case everywhere, though, isn't it? Like the top end earners usually own all of the financial assets, which is kind of why, I mean, we've discussed this before. Why, like, if you're, you know, you have enough money to invest and save and all that type of stuff, you might not think the situation is as bad as it really is. but when you look at like the kind of lower income earners, stuff like that, how tough it is to, I guess to survive, let alone invest in financial assets.

Like you kind of get a continuing wealth gap, I guess, that's accelerating, I think, even faster now. Yeah, I think it's just, yeah, I think it's a great point. I know you posted a video that had, I think, the thumbnail that Canada is broken and you had some negative feedback around it. I think it was just to highlight how different. difficult situation, the situation is for a lot of Canadian. And there are some companies that are benefiting from that. If I remember correctly, it's Loblaws and Dollarama, right? Yeah, it was kind of a

video like highlighting kind of the trade down for consumers. And I mean, I made the title a bit aggressive, but yeah, I don't know if I've ever gotten that much negative backlash out of a video before the, yeah. I mean, that's an entire. No, but it's just to make the point, right? If you're in that top 20%, it's easy to forget or just to see things from your own perspective. right? If you're in the top 20, top 10, top 5%, I mean, it's easy to just say, oh, I'm doing pretty well. Look, my stock, whatever I own, my financial assets are doing well. My home may be kind of stagnating a little bit, but that's okay. I've got that. And it's just, I just want to mention that and just kind of show I have your bag, is that you have to make sure you also take a moment and just look at what other Canadians may be feeling. Sure, you may be in a great situation, but it doesn't mean that 100% of Canadians are in that situation. There's a reason why subprime lenders, there's a lot of demand for their loans, for example, because a lot of people just can't qualify for loans with the big financial institutions. So that bottom 80%, I think a big chunk of it

probably can't qualify for loans because they're living paycheck to paycheck and so on. So I just wanted to mention that here that it's really important to just understand, take a step back, and just take a moment and think, okay, like, is actually, can I think about things in the lens of someone that's not in as good a situation as I am. So to get back to the survey here, the increase in financial assets was offset partially by debt, which increased at a rate of 1.3% during the quarter. Financial assets held by Canadians rose 4.8% during the quarter, but non-financial assets like real estate saw a 0.3% decline.

And that's a bit alarming because a lot of Canadians have most of their wealth in to their real estate, and a lot of Canadians just don't have a whole lot of financial asset, just like that survey said. And the saving rates, this is a bit more positive, although it's still relatively low. The savings rate increased to 4.7% during the quarter, and for the 12 months prior to the survey, Canadian household borrowed 15% more than they had in the previous 12-month period. So this is not great. As a result, the debt to household income increase for the fourth consecutive quarter.

Some good news here is that household debt service ratio dropped a little bit during the quarter due to lower interest rates, specifically on mortgages. So I just wanted, like I said, I think it's a good overview of just how Canadians are feeling. Of course, this was a Q3, so it might be a little bit different when the more recent data will be coming out. And I think it may be a little more pessimistic just because of all the developments we've seen recently. but overall I think it's just a reminder if you can save and invest in financial assets at least to diversify if you do have some real estate. I think it's really important because as we can see, financial assets can be doing well while real estate has been really stagnant or declining now for a couple of years already. Yeah, we had that big, like I wonder if you looked at this during COVID, that real estate asset probably would have been increasing quite a bit, but not really. I'm not surprised to see a decline just because there's such a correction in a ton of the major markets in Canada.

But yeah, I mean, I think we have the highest debt to household income out of any of the G7 nations. Canadians are highly leveraged, like tons of debt. Yeah, I think it's between us and Australia, battling it out, if I remember correctly. I haven't seen the numbers compared to other countries recently. I know we're much higher than the U.S., but I think Australia is relatively high too. Yeah, that's all I got for this. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations.

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and blah blah, blah, an increase from the previous year. So something I wanted to look at here. It's a fun little survey. I mean, fun or grim, however you want to see it, but I think it's a really, I think it's a fun survey because you have to put things in perspective here. It was released a few months ago, and there were some really interesting findings. So first of all, Canadians now believe they need, or those surveys, need 1.7 million to retire,

which is up from 1.54 million last year. But if you look at the last since 2019, just to give a bit more context here, so you have 2019, it was 1.35 million, 2020, 1.4 million, 2021, 1.64 million. 2022, 1.7,4 million. So, 2022 is actually the highest number here. It's even higher than 2025. And then 2023 was going down to 1.67, 2027. 2024, 1.54, 1.5, 4, and then the most recent one, 1.71, just if we round things up. So it's the highest number. It's been since 2022, but not the highest number I would assume historically, because I can't really see beyond 2018. If they even did that survey or if they did, I would just assume that the number was lower. But just goes to show that this will vary quite a bit from year to years. So just to take a grain of saw that kind of headline figure that may show 1.7 million, for example, this year.

Yeah, I mean, in 2022, it would have been pretty easy to have that mentality because that was when we had, what, 9% inflation. Exactly, yeah. And then obviously it calms down, so people probably don't think they need as much. But yeah, these, there's always a lot of publications on this type of stuff or they'll have like, publication will release an article on somebody who has $10 million in net worth and they'll ask if they have enough to retire. But they get a lot of clicks. Exactly. It gets a lot of clicks. And then it even is, it varies quite a bit depending where you're located in Canada. So you have Atlantic provinces that people or those surveys said they need 9,000, and then Quebec 1.2, Saskatchewan, Manitoba, close to 1.3, Alberta.

Florida, 1.66, Ontario close to 2 million, and BC 2.2 million. So you see that big variation between provinces. And I think that's important to put into context because the cost of living, first of all, is probably what's impacting a lot of those responses. Like you mentioned, inflation was really much higher in 2022. 2021 was starting to pick up. So it was probably having an impact. People were starting to get used to have to pay more for first. goods that were really in demand. We saw food inflation go up during that period of time. But the other thing to keep in mind is, where are people getting these figures? So these are not, like, I would venture to say that most people surveyed haven't done all that much like financial planning and

thought process about how much they would need or crunch the numbers on how much they would need for retirement. So you have to be careful. I suspect this has a lot to do with, Those surveys talking to people, they know. And then, oh, yeah, Joe, my friend told me, like, you'll need about $1.6 million. So I'm getting this survey. It's probably $1.6 because I know he does the work. Or some may be working with some financial planners. You don't know.

Or it might just be, oh, I remember reading last year's headline and it was this number. So I guess this year I'll just put it a slightly higher. So this is very subjective. It may not be founded in this. really a whole lot of reality might just be like just the vibes that people are feeling for the lack of better word. Yeah. Yeah. I mean one point set like say if you retire at 65, 1.7 million to me seems like a lot of money. But I don't know. Yeah, but you factor in, okay, how much CPP do you think you'll be getting? How much old age security? Will you be

eligible for old age security? Will you get a clawback from this? Do you fully own your house? or have you been renting or do you have a super low rent? What's your cost of living? What are your expenses? These are all things that will come and will have a major impact on how much money you'll need. So you can probably figure out by just asking people this question in a survey. Most of them are not answering like half of the questions that I just mentioned here. Yeah.

Like it, I don't know. You would imagine if you're retired, you don't have a mortgage. Maybe you would, I guess. but mortgage free and $1.7 million for the next, let's say, 30 years of your life seems like, seems like quite a bit of money, but I don't know. I'm pretty cheap, though. Yeah. Yeah. I mean, it's just goes to show, right? Some people might have some rental income, but it's, that's why I always take these with a grain of salt, and I know they're very sensational and it goes like, it's a great headline to say Canadians thing, they need $1.7 million to retire,

which may be the title of this podcast. Maybe that would be a good title. as more of a click big headline. But I think it's just important to put some context around it. In terms of the monthly savings rate, that I found interesting, 28% save less than 5% of their income, 38% 5% to 10%, and 21% save more than 10%. Obviously, depending on how high your income is, it may be more difficult to have a whole lot of disposable income,

so you have to factor in. If you're younger, you'll have more time to make that money compound. 5% when you're younger will go way further than 5% when you're older, even if you're making more money, just because you have that time to actually compound the money. So the earlier you can start the better. I would say like, you know, trying to target at least 10%, especially if you don't have work savings plan or a pension, is definitely something you'll want to look at and work towards too. I know it's not always easy, but trying to slowly get to that point, I think it's really important.

And, you know, as you get promotions, as you progress through life, as you make more money, I think it's a good approach to have is when you have a salary increase is you put a portion of that increase towards savings, especially if you don't really need to live, then you can put most of it towards savings. And that can play a big role down the line. So these are just a few things that you can do. The more time you have, of course, the more you have for compounding. And I guess the last thing here I wanted to mention is they also as during this survey is that a lot of people say that they may not be able to stop working.

So 14% of the Canadians or those surveys said they do not plan to stop working. And in other words, not fully retire at the vigour lease. And it was 20% for Gen X, which is really interesting because they're the ones that are not quite at retirement, but pretty close. So they have the most visibility on probably what their retirement will look like and the shortfalls that they may have. So it's interesting that it is 28%, 18% for millennials and 15% for Gen Z. So I guess the younger you are, the more it kind of scales down here. And just based on experience, my previous job, I would meet with people and go over a pension with them before their retirement.

And it was always interesting because I'd have some really interesting conversation. And oftentimes I would, you know, talk to them before retirement. And then six to 12 months later, I'd talk to them again for whatever reason. And one of the things I became to notice and I started just giving as advice to people because one of the common things I saw for people that were going to retire is they were a little bit nervous whether they would get bored or not what they would do at retirement. So I would usually tell them, give yourself like six months, especially in Canada, even like six to nine months because you may be retiring more in the winter.

Maybe you want to play golf. It's kind of hard to play golf in the winter. So give yourself six to nine months just to see if you have enough stuff to do while you retire, assuming that you have enough money, you're not, you know, you're not in a financial crunch or anything like that. And I said then you reevaluate and you can look at potentially doing consulting work, getting a part-time gig, whether it's a passion project, whatever it is. So I just wanted to mention that because those numbers that don't think they can fully retire,

I think it's important to put in the context is they do not plan to stop working. So they may do, they may keep working for financials or non-financial reasons. So just to keep that in mind that it may, it's not necessarily a reflection of people saying they have to work because they can't afford to retire. Yeah, that's kind of what I was going to ask is, does the survey say why? like do they not want to retire because they probably don't think they'll have anything to do or do they not want to retire because they don't think they have enough money i can't ever i think it's a it's a combination yeah i think some the reality is they they can't retire because they just wouldn't have enough money and i think there there are others where they it's a reason to

get up every morning right to to go to work or have a part-time project like i know some people may be like listening i can't wait to retire and i'll play golf or i'll go do this all day and And yeah, for some people that works, but for other people, they may see less people socially because they're not working and they want to have that interaction. So for them, it gives them a purpose in life and it's not about the money. It's about the social experience. So they did mention a little bit in that survey. So something I wanted to mention because it is something I experienced firsthand. Like I saw meeting with people.

A lot of people that were retiring were nervous about that, what they would do. And that was always my tip is just give yourself. six to nine months just to re-evaluate and then you can decide whether you want to come back to work or just get a part-time game consulting work, whatever it is. Yeah, that's a good overview. I don't have anything else to add on that. Do you want to get into that? Okay, let's go for Dan Unchained. Let's do it. No, this one's not. Well, this one. No, okay, okay. You primed me up, so I didn't know. My prediction, like, if you listened to, what would that been last week or two weeks ago, I did the prediction markets for Well Simple.

I was not a fan of that. This one, like obviously this one, I think it's, I don't think it's a huge deal, but I do think it kind of brings on a lot of, I guess, bad habits for retail investors, but I'll get into that over the course of the segment. But Well Simple and X have launched a or signed a partnership that will allow, Canadian users to click a ticker symbol. It shows real time pricing data, etc. And a trade button.

So effectively what I took from it is you can just buy stocks without ever leaving the X platform. Now, I'm fairly certain, like, I don't think when you click that trade button, it's going to route you to your wealth simple brokerage. I think you can actually buy the stock on X. That's kind of the gist I took from it. And I think overall, this is kind of a good. of a deal for Well Simple that's no doubt bullish for Well Simple, but not so bullish for retail

investors. And I'll kind of explain that throughout this. But X does have a ton of users and a massive finance community. There's no doubt that it makes Well Simples reach wider. I'm kind of curious to see if this would work for non-Well Simple clients or if you have to have an account. So if it still appears for non-Well Simple clients, like let's just say me, with Questrade. If I click that button, do I get something that says, you know, buy this instantly if you're with Well Simple or something? Like, that's a massive advantage for Well Simple if that's the case. But it's impulse trading, I guess, would be the first thing that comes to mind for this. There used to be a bit of friction between, you know, hearing about a hot stock and actually

making a purchase. And I know the friction is still very small, but the friction still exists. Now, I mean, the friction, at least for well, simple clients using X, will be effectively zero. Like, the one thing, sorry, I just got a cough here. I'm currently dealing with a cold. But the one thing is I can't see any regular investor using this whatsoever. Like, I can't see a situation where I would be on X and be like, oh, I need to buy more royal stock, royal bank stock today. I'll just click the ticker and do it. Like, I just don't really see.

an edge for that, but, you know, if I'm looking to speculate, gamble a bit, maybe I look to some, you know, stock on the, on the venture or, you know, CSE that an influencer with, you know, a large following is promoting and say, hey, maybe this will work out. It's a one button click now to get exposure to that. So I think that's kind of an added element there. Are you saying it's making pump and dumps even easier? Yes. That is like, and I don't think anybody could deny that it will do that and I do I'm going to go over that in a bit but there has been a lot of chatter on influencer regulations on social media we've seen that report at the start of the year where I don't want to say they redid regulations but they kind of like came out with them and said like

this is what you need to follow if you are a financial influencer like YouTube yeah I think it was like guidance yeah something like so disclaimers all that type of stuff like this would occur for YouTube X, Facebook, whatever it may be. And I'm kind of curious as to how regulators will look at this one. Like obviously they have a lot of stuff to do with, a lot of stuff to deal with. But I mean, now,

and maybe I'm being like over the top or paranoid about this, but I really don't think I am. I mean, if you look at large following accounts, they've pretty much now separated the barrier to front running stocks to pretty much zero. Like if you, like obviously, somebody posting about Royal Bank, you're never going to move it. But I mean, there's plenty of, you know, low-volume venture stocks or something that somebody could easily buy. They have,

let's say, 100,000 followers on Twitter. They make a post on it and it's a one-click option to buy that stock. I mean, it does add an element in that regard. And I mean, sure, again, some people could have just, you know, they see the tweet, they grab their phone, open up the app and buy it anyway, but you're talking 35 to 40 seconds there it takes to do it. So it does create some sort of friction. Here you're, you know, you'd be shocked that the actions people take on something that takes two seconds to do versus 45. Like there is a big difference. They've done studies here that kind of prove there is a big difference. So the other interesting element here for Well Simple is just kind of the continued advantages versus the big banks. So I don't know how this will, you know,

gain them clients on a meaningful scale. Again, if you're pitching to non-clients when they, when they click this button, I don't really see that as a tipping point for somebody like going to Well Simple versus say, let's say choosing a quest rate. But I mean, from a brand element, like it does get you many more eyes on the brokerage. I mean, if you don't have an account and you click that button, you're going to see the brand, you're going to see the name.

Eventually down the line, if you're thinking about moving brokerages, you know, if you've had that ingrained in your mind for a long time, you might, you know, you might think of, of Well Simple. And I don't really know what the- Yeah, apparently if you click on, yeah, if you click on the ticker and you're not, well, it's simple, it'll bring you to a sign-up page. Yeah. So, I mean, yeah.

This is kind of where I don't know what the structure of the deal is. Like, I don't know if Well-Simple has to pay X to do this or if this is something that X is just providing them because it obviously adds an element to the platform. for them, but I mean, that pretty much, that would like exponentially lower Well Simples client acquisition costs. Like X has a lot of users. So it's kind of an interesting, interesting concept. Great move for Well Simple, in my opinion. I think not necessarily bad for investors who are truly long-term investors, you know, doing all that type of stuff for people who maybe have a little bit of an impulse or, you know, like to trade hot stocks, maybe, probably a bit of an

issue. But I'm kind of curious as to who their U.S. partner will be. I don't think they have a U.S. partner yet. I would imagine it would be Robin Hood. That seems like kind of a no-brainer in that regard. But right now, as far as I'm, as far as I know, unless something has came out recently, it is only Canadian stocks and it's well simple. I don't know if you have any thoughts on that before I get into kind of the core, the underlying aspects of stuff like this. Yeah, I mean, I think it's probably like, um, not Trump, but, uh, Elon Musk has always said he wants X to be the everything app, right? So it could be, it could be there, they're foray into that to making even like, you know, trading available on X with some third party application

or third party partner like a weld symbol. So I could see that happening. As, you were talking, I was just kind of researching. There seems to be mixed reaction on like Reddit. Some people say it's going to be a good thing. Some people expressing concerns about privacy or even the fact that it's with Elon Musk. So, and, you know, Elon Musk, a very divisive figure. And I saw a couple posts who was like one guy said he was going to transfer his money out of Welton because he didn't want to have anything to do with them after they partnered up with X because of Elon

So it is a risk, but at the same time, I think probably the benefits from it and getting more signups definitely outweigh the risk of getting some people pissed off and closing their accounts. Oh, it's, yeah, it's a huge positive for Well, Simple. I can't imagine how this doesn't help them over the long run. X, obviously, yeah, I mean, I would, I've been on X for probably 10 years at least. Like the quality of the platform has definitely declined at a. substantial pace. It's not as good as it once was. I don't know. I would never move accounts just because of a partnership with it, but I mean, I guess that's other people's choices. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too, until we switched to the new EQ Bank business account. Now, every dollar earns high

interests with no monthly fees and no minimum balance. You also get free everyday transactions like EFTs, bill payments, mobile check deposits, and 50 outgoing and 100 incoming free interackey transfers. And to sign up, quick and fully online, no branch visits because, let's be honest, no business owner has time for that. We use it for our own business and it's the first account that actually helps our money work harder while keeping operations simple. Check it out today at EQBank.ca slash business. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market. I've been a

quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing. With no commissions on stock and ETF trades, you don't have to wait until you have thousands of dollars saved up to make a move. You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon, you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Questrade makes the whole process seamless, allow you to focus on what really matters your investment strategy, not trying to avoid fees. Ready to invest, head over to questray.com, open and fund your account

with code TCI and receive $50. Conditions apply. Starting something new is uncomfortable. I remember launching the podcast and thinking, what if no one listens? What if it just doesn't work? That doubt is part of it, and honestly, starting a business isn't easy. You're figuring out things on the fly, wearing a bunch of hats, and hoping it all comes together. If you're in that phase right now, trying to build something and actually sell products, having the right tools makes a huge difference. That's where Shopify comes in. Shopify gives you everything you need in one place. You can build a clean online store with ready-to-use templates, manage inventory, payments with shoppay, and even use built-in AI tools to create product descriptions and improve your listings.

It's built to help you go from idea to first sale. It's time to turn those what-ifs into chaching. Sign up for your $1 per month trial today at Shopify.ca. Go to shopify.ca. That's shopify.ca. Cheching. Kind of leads me into the main topic, I guess, for the segment. will kind of be the gamification of investing, I guess, like overall and how, I guess, unhealthy

it is for, for retail investors in general. I mean, for those who don't know what gamification is, it's effectively, it's game like elements integrated into brokerage platforms, not necessarily just brokerage platforms, but like everything. And I mean, a lot of, a lot of the psychology of it comes from things like casinos and social media. I mean, they're designed. to keep you on the platform or in the case of a casino, spending more money. So I mean, I'm pretty sure this is Robin Hood that does this, but whenever you buy a stock, it like blows confetti off on the screen. Yeah, that ticket. Yeah. So you buy the stock, it, you know, confetti kind of explodes just like, you know, when you hit something on a slot machine,

it kind of blows up and says you have, you know, it's that, it's a dopamine hit for sure. And they also have, I mean, scratch off tickets. I mean, digital scratch off tickets where you kind of open them up and you scratch it and it could be nothing. It could be a free stock. I mean, you're looking at points, badges, login streaks. There was one study that actually found that even a point system on a platform like this with absolutely no economic value, like the points you gathered did nothing for you, encouraged more trading. So top stock leaderboards, stuff like that, trading competition. So this aspect isn't necessarily gamification, but it is. to a certain extent. I mean, I'd call this like social embedding, I guess, you know, a lot of people

are on social networks these days. And I mean, the landscape has evolved substantially over the five or six years. I mean, Robin Hood was at the forefront of this even before then, like even probably five years before then. But I mean, the initial aspect of these brokerages was to make investing more accessible to those who didn't have a lot of money. Obviously, wealth simple, like I had mentioned on the last episode, like their motto used to be get rich slowly. And I mean, at the start it, it certainly worked. I mean, you have commission free brokerages. They removed a ton of barrier to entry. I mean, I remember when I first started, that would have been 2009 with RBC direct investing. Like, I didn't have a lot of money back then. I was making probably 18 bucks an hour,

I want to say. So, you know, the 10% commission really deterred me from buying because obviously, you know, I didn't have a ton of money. And if I wanted to buy a share of Royal Bank, you know, I don't even know what it traded at back then, but the commission costs would aid into a ton of it. You know, that's eventually I moved from there to Questrade because the commissions were cheaper and now obviously they're free. But yeah, now we had commission free trades. Then we had fractional shares. Now we have, you know, all these type of, you know, activities, the leaderboards, the confetti, all that type of stuff. We have prediction markets. Now you have the ability to bet on company deliverables. You have trading leaderboards, rewards programs, brokerage, social networks. I think

Robin Hood's getting into this. And I mean, the marketing around a lot of these functionalities and added features are to make investors lives easier. And for some of them, I do agree like commission free trading, no brainer. Fractional shares, no brainer. Like, if I could have bought, you know, fractional shares back in the day, it would have, it would have been, you know, a big difference with a smaller amount of money. But I do think the other aspects that are kind of being brought to the market, including like the prediction markets. I'm not a fan of those on a brokerage platform. Like I have no issue with them whatsoever outside of a brokerage platform. But the, they're poor for retail investors. I mean, these, you know, I'm not,

this comes from a lot of studies. So the Ontario Securities Commission did a study. They did one in 2022 and then they touch base on it in 2024. And they said that systems like this increase, increased trading frequency by upwards of 40%. So I think what they ended up doing was they created a simulated environment. They split two groups of investors apart and they put some users on apps with heavy gamification and others just on normal platforms. And the ones who were on the gamification apps traded 40% more than the ones who just had, you know, that bare bones brokerage.

So a regulatory body in Europe did a study on the gamification brokerages as well. And they found that engagement on the platforms absolutely launched, but returns were significantly worse for the investors on these apps than they were for investors who were just on normal brokerages. So good for the brokerage, bad for the investor, I guess you could say. And I mean, some researchers have kind of mentioned that these apps are kind of now being designed to just create consistent like dopamine hits. Because obviously, I mean, you know, sensation seeking, risk taking, impulse buys, all that type of stuff. And another element, I think, is FOMO, like fear of missing out. And obviously, you know, fear of loss, you know, it's, we feel that much worse than gains. So from a broker.

I would add into like instant gratification, I think we're a society that's like that. And I know sometimes all, and we were talking about poker and some parallels and I can take pretty much anyone. give them some basics and then give them a really basic strategy that will win the money. But the problem is people are not patient enough to follow that strategy. And a lot of people would understand the value of it, would understand how to do it. But then they'd get into real time and they're like two hours at the table and they haven't seen it. And then they get bored and then they just deviate from the strategy. And it could just be, I think investing is very similar to that, right?

someone will buy a stock and they're like, okay, I'm owning this long term, but then the stock's not doing anything for a few weeks and then they just give up on it and then move on. And whether it's the right move or not, who knows, but just the fact that they want their thesis to play out in a week or two when it might be the right thesis, but it'll actually take two to three years to play out. And it's just not a sexy thing for, unfortunately, they, the generation we're in and the younger generation is just about, you know, getting things quickly. Yeah. I mean, that's that element of of dopamine. I mean, if you buy a stock and it goes up in two weeks and a lot of it has to do with, I mean, I guess you could look to those, the leaderboards, for example, like the top bought stocks, sold stocks, how much they've done. You know, it kind of makes, it makes like boring investing, the type of investing that has worked for pretty much the entirety of its.

existence kind of, you know, boring, obviously. And we're kind of always chasing that, that hit, I guess you could say. And I mean, on the, on the FOMO side of things, like, how do you take advantage of investors fearing like they're missing out from a broker's perspective in regards to making them trade more? I mean, you pretty much reduce the friction it needs to take action. So they positively enforce these actions, like let's say confetti bursting when you buy the stock. They have the top stock leaderboards, which kind of. eliminate uncertainty to agree. Like, you know, if everybody's buying it, it must be good, stuff like that. And I mean, I've really went down the rabbit hole, I guess you could say, of of digging into

the research, like revolving around all this type of stuff. And I mean, there's no doubt these systems are being designed on decades of research about human psychology. I mean, they will be, they'll be marketed to retail investors as convenience. And I've seen this a lot. If you look to the reactions of this whole system like the X partnership, and there's a lot of people who are torn either way, but it seems to be like the case of people who don't mind it is the fact that they think it's going to be easier to buy stocks.

And they're being told that it removes a step and that's a convenience element. But I mean, it's not the fact of removing a step. They're being put in place to encourage more trading activity, which has historically led to to lower returns. And I mean, like, ultimately, like you are responsible for making your own decisions. And this is obviously like I had mentioned before, like this is not down the same avenue as prediction markets for me. I have no problem with Well, Simple doing this. But the interesting part about this is a lot of the. psychological elements that are being installed in these brokerages are like they're at a subconscious

level. Like people don't even realize they're doing them, which kind of makes it a bit more dangerous. But yeah, that's all I had on that. It's an interesting, it's not going to stop. Like I would say the next path is 24-7 markets. Like I think that's inevitable that they have 24-7. Yeah, 24-7 trading. Yeah, I think within five years, we'll see probably 24-7, just be mostly because you already see it with Bitcoin. And I think more and more there's going to be like a push to also have that in the markets. So that way everything trades 24-7, where regardless of what asset it is around the world, probably around like on the blockchain, to be honest. I think that a lot of it will happen there. But I my base case is, yeah, probably in the next five years, most assets will be traded.

getting 24-7. Yeah. I think it's, yeah, it's kind of the slam dunk their next move, I guess you could say, but yeah,

I don't know. It's as a long-term investor, like I don't ever see me using that type of system, I guess. No, I think it's, it removes a barrier to entry.

And at the end of the day, a lot of people will be probably more apt to buy stocks that they really just don't know. They saw a tweet from a financial influencer. and that's their stock premise.

That's their stock. That's as much conviction as they have. And that's the problem, right? Like if you don't have much conviction, then whether it's a good company to own or not, and maybe it's a really good buy, if whoever you're following sell the stock, or maybe he, she doesn't,

but let's say there is a piece of bad news and you have, you don't, you borrow the conviction. I mean, you'll probably sell off pretty quickly. And then who knows what kind of, of returns you'll have and at the end of the day people just yeah people it's interesting like brayden and i have talked about that like years ago but people will research like hours and hours for like a new tv or whatever it is like whatever item you pig that's like a few hundred dollars

or maybe a grand in total yet they'll do maybe 30 minutes if that of research 30 minutes is probably a lot to buy, you know, five, 10 grand worth of stock in a company and they'll do less richard. And they did to buy that TV. So it's just, it's funny how a lot of investors are actually wired where I don't know what it is, but they just want, yeah, it has to be instant gratification and discipline at the end of the day. Probably like the prospect of gain, I guess would be the main shift there. I mean, when you buy a TV, you end up with the TV, whereas if you buy $10,000 of the stock, you could end up with $50,000. The interesting thing here is just like I had mentioned from, because like X, obviously all

these social media platforms, they're algorithm based. So I mean, if you see and engage with a tweet about a particular stock, it's going to feed you more information about that particular stock. So it kind of heads you down. Like, this has been an issue for a very, very long time. I mean, these algorithms have been known to be fairly toxic. I mean, if you focus too much in on one thing, that's all it's going to serve you. And in this situation, I mean, the X algorithm, like, if you're, if you're watching this particular stock and, you know, it starts feeding you more information on that particular stock.

And it's one click away. Like, how much worse does that get? But, yeah, I mean, on a, on a influencer level, like, obviously, you would. need a fairly large audience to to move stuff like this, but to me it just seems, and again, this is probably being extremely paranoid or over the top, but like what's stopping somebody, again, with 100,000 followers on that platform kind of front running a stock, knowing that, you know, people don't even need to log in anymore. They can just click the button and buy it. And, you know, you bought it a week ago or, you know, something like that. It's, yeah, I don't know.

I think it's only going to get worse because obviously, you know, a lot of, of these integrations they they make the brokerages more money there's no doubt like you can't blame them for doing it but it ultimately like there's a lot of data that proves the more you the more you trade the less you make yeah i think it comes down a whole lot like you said they know what works in terms of human psychology i think instant gratification i think i've said this in the past as well too is you just get people who are feeling behind i mean we talked earlier in the episode on like the financial situation of Canadian household, that bottom 80% or bottom 75% feeling like they'll never be able to retire, never be able to buy a home.

Well, things like this make it easier for them to try and hit that home run, right? That $1,500 or $2,000 that they put in this one penny stock and with or crypto or whatever it is, right? And hopefully it'll 100x for them. Yeah. And then they achieve what they want to. achieve, but the probability of that happening is quite low, but it doesn't matter for, I think, especially younger generations, for a lot of them, that's the only way they feel like they can

ever get ahead in life. And then you have some tools that come up like that that make it even easier. So it's just a perfect, perfect recipe for, yeah, like you said, trying to gamble a bit more. I mean, yeah, at the end of the day, I think it's just being able to take a moment, take a step back. if you want to buy something, maybe you put in a rule in place that if you see anything, you have to give yourself like a 24 hour cool down period where you're not allowed to buy a stock until 24 hours after you've seen that company for the first time. That way, maybe the emotions kind of level off a little bit. But I know it's hard.

I mean, like I said, instant gratification is part of society and it's just how a lot of people are wired. I mean, there's a reason that GLP1 drugs are working well. People want quick results. And a lot of people just don't want to do the work. I mean, I know there are some exceptions to the rule, but for the most part, if you want to lose weight, it's not rocket science. The problem is it takes time, consistency, and hard work to achieve that if you want to do it without these GLP1 drugs. but then when you offer them GLP1 drugs, it's like, okay. I mean, I don't have to all do that hard work.

I'll just do it. You know, I'll just take that. And it's that instant gratification type of deal. So I'm not, I'm not surprised I think it's just how, unfortunately, a lot of people are wired. Yeah. Yeah. And I think it is they, in these studies, they kind of notice that it's the younger generation that that is higher probably because, yeah, again, feel behind financially. so, you know, the slow, boring aspect of long-term investing doesn't really appeal to them.

Well, I guess I don't want to say doesn't really appeal, but they feel the need to earn more. So obviously they trade more, whereas, you know, probably low, like older people, kind of better financial footing seems like things like that might not be as exposed to stuff like this. But yeah, I don't see any of this type of stuff stopping anytime soon. like I said, like I'm pretty sure Robin Hood is the company with that social network they're building out in regards to, you know, kind of an investing social network. We got the prediction markets. What's coming next is a question because, yeah, I don't think it's stopping. Who knows? We'll have to see. I'm sure there's something that will come up next. But I think this is the world we live in and having discipline. Yes. is definitely a strong trade to have. And I think it's essential if you're investing as a longer term investor. But even for me, right? I've said it before.

I think I used to see things more at the 5, 10 year time frame. I still look at long term, but just given, I think, the changing world order and how things are changing in terms of being so different than they had been in the last 20, 30 years, I'm definitely more nimble than I used to. And I do adjust my portfolio, especially on the head. edges a little more than I used to, but again, I'm not. I think you've seen my moves and join TCI subscribers. Well, no, it's not like I trade a whole lot. It's more things that I'll kind of tweak on the edges, but I can't understand where a lot of people are coming from. So

I think it's a good point to wrap it up. Let us know what you think, but if not, I hope you enjoyed this episode a little bit different, but I think it was some fun topics to talk about, and we will be back with another episode of news and earnings this upcoming Thursday. The Canadian investor podcast should not be construed as investment or financial advice. The host and guest featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.