The Wealthy Barber Podcast - Richard Coffin (The Plain Bagel): "Finfluencers" and Behavioural Finance | TWB Podcast #7

Episode Date: January 14, 2025

Our guest this episode is Richard Coffin—better known to many as "The Plain Bagel." Richard is a CFA and CFP professional working as a Portfolio Manager in Ottawa. He has nearly 1 million subscribers on his YouTube channel where he creates entertaining and educational videos on finance, investing and economics. In this episode, Dave and Richard discuss the rise of "Finfluencers" in today’s social-media-driven world and explore the fascinating landscape of behavioural finance. They cover everything from the origins of “The Plain Bagel,” to the pros and cons of getting financial advice online, to the biases that affect us all and much, much more.  Enjoy this fantastic episode featuring two of Canada’s top financial educators.

Hey, it's Dave Chilton, the wealthy barber and former dragon on Dragon's Den. Welcome to the Wealthy Barber Podcast, where we'll be hosting some of the top minds in the world of personal finance. Yes, that's going to balance me out. The podcast is about making the subject not just easy to understand, but dare I say, even fun, honest. Whether you're trying to fund your retirement, figure out how to build a down payment,

save for your kid's education, manage debts, whatever, we'll be here to help you do it. Before we jump in, a quick but important note, nothing we discuss here should be taken as investment advice. We don't know you and your personal financial situation, so we're not here to tell you, we're specifically to put your investment dollars

we're here to educate get you thinking and we hope entertain but please do your own research and or consult with your financial advisor before taking any action. Hi everybody it's Dave Chilton the Wealthy Barber we're here with episode seven of the Wealthy Barber podcast picking up a lot of momentum thrilled with the number of listeners. We're having approaches after with questions and comments. The interactions are great. I think the the podcasts are really helping people. Sounds corny but that's what it's all about. And today's we'll do that in spades. I've got one of our best guests on Richard Coffin. A great backstory. Richard is a lot of you know operates on YouTube under the plain bagel. We'll learn more about that name in a few moments. He's a financial

educator extraordinaire. Why did we get him on the show? Interesting story. I didn't know Richard. A year, year and a half ago I hadn't followed the YouTube situation very much and Aidan came to me and said you've got to listen to this guy. He's a great communicator, great educator and to be honest I was a bit skeptical. I listened to a lot of these types of things, influencers, that type of thing. And I'm always, whatever, what's his axe to grind? Is he really a good communicator? Wow. I was blown away. Every video we watched was captivating. Really captivating. He can take economic issues,

financial issues, investment issues, make them understandable, make them entertaining, has logical flow, and comes across as a wonderful guy to boot. Maybe it's not true, maybe he's a horrible person, we'll learn more in the next hour about that. But no, he just does a great job and you know this sounds corny but he's helped a lot of people. Listen to this, he has a million subscribers on YouTube. That's not just one of the biggest numbers in Canada for people doing financial education, that's one of the biggest numbers anywhere. And if you read the comment sections under his videos, people are so

appreciative of what he's doing. They have gained knowledge, they have made changes in their lives. This guy should be very proud of himself. I mean, again, it sounds corny, but he should be. He's working out of an Ottawa office, doing all of this and making a very positive difference in people's lives. So let's get to know him a little better. Richard, welcome to the show. Wow. Thank you for having me. And what a very flattering introduction. Thank you, Dave. You've got a lot to live up to now. Now, Jake, when you were a little boy, you're in school and your last name is Coffin. You had to take a lot of razzing. You know what? Not... I think I was very fortunate where a lot

of people thought it was very metal at the time more than... So I actually benefited from it, I would say. It was... and it didn't come up that much, you know. I think some people got called by their last name quite often. It was... it was always kind of a background fact for me. Well, you know that I'll weave it in today many times. Sure. There's no doubt about it. No problem. Now, the plain bagel, where did the name come from?

Yeah, so when I was in university, I went to university for finance for my bachelor's. And there was this one professor who was a pretty quirky personality. And he used to do this thing where he would make up idioms on the spot. And there would be like 30 of these every lecture where he'd make a saying that wasn't really something other people would say but it somewhat made sense and a friend of mine actually tracked what he would write, what he would say over time to write them down

but one of the things he said at one point was if you can't afford the cream cheese, get the plain bagel. And at the time, it didn't mean anything to me. It was just one of the other hundreds of other things he had said. But when I was working my first job in finance and I was thinking about putting this channel together to cover the basics, for some reason, it kind of stood out to me as an idea for a name.

I didn't want to do anything too literal, like finance guy or whatever it is. Part of it was, I've heard before that if you do something well, the name will come to accommodate what you're doing. You don't have to match your name to the subject that you're covering because people will come to recognize they'll be affiliated. For some reason, there's something about it, the plain bagel, it felt very true to the subject that you're covering because people will come to recognize they'll be affiliated. And for some reason, there's something about it, the plain bagel, it felt very true to the approach I was hoping to take, which is very simple, very basic covering of financial education and information.

Well, you know, you looked at people are drawn research shows to that combination of article adjective noun. It's something they find easy to remember and they're pulled in by the wealthy barber. You know, we very much use that research in coming up with our name. So, you know, that's worked to your advantage as well. But, you know, big question is, why did this take off?

Like from what I've heard, you didn't do any marketing. You just put the content out there and kind of let it go. And I mean, a million subscribers is crazy in this end of the industry. What do you attribute all that success to? You know, as much as I would love to say it was just I did stuff the best or whatever, I do think I was very lucky on a few fronts, which is one is the timing was remarkable. I would have joined around 2017. And I think at the end of one or year one or year two

I had around 2,000 subscribers, which I still thought was was crazy Yeah, but it was the years after that were really started to take off and I passed the points where it became you know a very established channel and Part of that was just the timing of it You know 2018 Bitcoin was coming kind of emerging as one of the big topics of the time. And then around 2021, we had GameStop and we had the surge of that stock and people wondering what the hell is going on with this. And so it was a combination of those events and, you know, the meme stocks and NFTs and all this kind of a lot of the fluff that kind of arose from that.

NFTs and all this kind of a lot of the fluff that kind of arose from that. I think part of it was someone coming out and covering these topics from the angle which which I had just did very well on the platform and I think if I were to do the same thing ten years earlier I don't think I would have had the same success. Now part of it you know as well is I work in the industry and I think that helps in the sense of helping to establish a channel as a resource. And it's quite rare to be able to work and to have a social media presence if you work in the finance industry.

A lot of companies are very strict with what they let you post online. So oftentimes if you work for a mutual fund company or a bank, it's just they just veto any sort of attempt to have a social media presence. So I was very fortunate where I worked for a small company. And they've been very supportive of the whole process. Now it's an eight-person company, so they're more willing to have that conversation

and take that flexible approach. But when you get into a larger institution, it's just unlikely you're going to have, say, a Goldman Sachs analyst, for example, posting content online. So I view it as kind of a combination of those two things. It's just unlikely you're going to have, say, a Goldman Sachs analyst, for example, posting content online. So it's kind of, I view it as kind of a combination of those two things. I think you're being humble.

I mean, I think those definitely play a role, but you're really good. Thank you. I mean, as a professional communicator, I take all this very seriously and you are very good. You've got a unique combination. You have a tremendous amount of knowledge. You have the right educational background. You're in the industry of knowledge, you have the right educational background, you're in the industry, therefore you have the credibility. But you come across as the everyman, a very humble, nice guy looking

to help and that mix is unusual. And you're an outstanding communicator, use just enough humor. Again, I've mentioned to you before, you're very good at putting in graphics that don't overwhelm and annoy people, but they add instead to the flow. Again, I think you're being quite humble, and maybe you did get a little lucky, but there's a lot of skill involved in this. You're quite adept at all of this. Whom do you work for? Tell us a little bit about that.

Yeah, so I currently work for a company. It's called WDS, or Watson to Premier Steel Investment Management. It's a very long name, which is why I like to call it WDS. But it's a small Ottawa boutique investment firm. So it's a money manager where they take on high net worth clients and invest their money for them and give financial advice. So it's that mix of portfolio management and financial planner

type of position. And I've been there for, I think it's been eight years now. So I registered portfolio manager. Did you play the portfolio manager role? Not eight years in a portfolio management role. So I would have started as an investment analyst. And then it would have been two or three years ago that I would have been registered as a portfolio manager

with the Ontario Securities Commission. Good for you. So what educational background did you have to get involved in this? What have you added since? So the Bachelor's of Finance was kind of the, not the main one, but one of the first ones. And then the CFA was one,

so Chartered Financial Analyst Designation. That's kind of what many who work as analysts view as a gold standard for getting these types of jobs. It's also a path for registration. So to become registered as a portfolio manager for getting these types of jobs. It's also a path for registration so to become registered as a portfolio manager that's one of the options. And on top of that I also have the certified financial planner destination in Canada. So from... I laugh because I speak for the CFA societies a lot all over North America. I've given a lot of speeches and I always start my speech by saying does it not frustrate you people

that you had to spend three years very hard work taking this course to learn that you can't beat an index fund? And now I know you don't necessarily agree with that, so we'll talk more about that later. So I would think your firm, by the way, would be very supportive of this because self-actually it's a tremendous exposure vehicle for them, a tremendous marketing vehicle. You're drawing a lot of attention to their brand name. You know, I think so to an extent. But to their credit, they have been very respectful of, and I've been very adamant of keeping the two separate.

And I think a big part of that is, and I'm sure we'll get into it, but with finance content, trust is such an important asset where the moment you start, when you introduce these other ulterior motives and the like, the audience isn't dumb. Yeah. People pick up on that, and they pick up on the influences it

has. And so my objective with making the channel was really to keep them as separate as possible. And I agree. I think there is a benefit on their end, and I'm sure they recognize that. But quite frankly, it's something I've never really actively promoted,

and it's something that hasn't led to as much business as people would probably expect because I keep that degree of separation. And it's something that I sort of intend to keep because I built this platform almost exclusively on trust that I have from the audience. So that's something I keep in mind whenever I'm posting content.

And it's funny because it also helps guide my videos to an extent where when I post a video, I have to keep in mind that there are clients who will see that video. And I think that's benefited me in keeping me kind of tame, I guess, with the type of content I post. It's quite often you'll come across flaming thumbnails and the economy's about to crash.

Well, if I post that video and then turn around and have to explain to Steve, my client, why. Why you just put him in equities. That's right, why I just put them in equities. It's gonna be a tough conversation. So I like the balance of the two and I'm sure they recognize that there's some benefit there but it's something that I've been very active

in trying to maintain that independence as best as possible. Well, I'm going to give you another compliment before I start being very hard on you. You've done it wonderfully well. Thank you. I had no idea that you were even tied into an investment firm after watching many of your videos. You're unbiased. You're a strong educator.

I can tell people who are going to watch your videos, they're not going to be negatively impacted at all by the fact you've got ties to the industry. You really rise above that. And I think you do what at work, too, what you consistently preach online. Like, you're very good that way. Now, you're a fin influencer. And you and I are going to talk a lot about fin influencers

now. I'm a fin influencer. In fact, I've been a fin influencer since 1989. That's right. One of the OG ones. Exactly. When the wealthy barber came out. I don't know about the OG, but thank you, since the wealthy

barber came out. So don't go blasting for influencers, but obviously this whole field has taken off in the digital era, especially with social media becoming such a big part of our lives. TikTok, you can't go on without having somebody in their 20s and 30s screaming at you, as you say, with cars on fire and all this type of thing telling you what to do with your money. Let's talk through the upsides and downsides of that and the kind of impact it's having on young investors in particular.

But frankly, I even know a lot of people in their 50s and 60s now watching a lot of these types of things and letting some of their decisions being guided by what they're learning. Yeah, it's something where, to your point about being harsh on influencers, I have, at know, it's something where, to your point about being harsh on FinFluencers, I'm actually, I have at times focused a lot on this topic and I've been harsh in the past on certain activities

but overall, I think the area of FinFluencers, not only is it somewhat inevitable, I think there is a benefit there in the sense of sharing information, right? When you look at what you did with your book and what a lot of these people do with posting content online, there is a lot of good information out there. And there was a CFA report, which I'm probably

going to cite a lot in our conversation, but I think it's called the Finfluencer Appeal, where they went through, I think it was 120 different videos across social media platforms and kind of gathered some stats on them. And I believe a third of Gen Z investors attribute them starting investing to social media or influencers. I remember that stat.

So there's a benefit there, right? The fact that young people are getting engaged with investing at the perfect time, right, as early as possible where they can allow compounding to really carry the weight of most of their performance. I think that's exceptional. And that's a benefit we've seen from But I'm gonna cut you off for one second, because I'm a

little worried about that figure. And then I think a good percentage of that third, maybe as high as a half, meaning a sixth of the overall people in terms of how they started their investing, are getting pulled in by some of these dramatic influencers, particularly in the crypto world. And some of the speculative investments aren't necessarily therefore taking advantage of compounding, they've often gone backward.

Now I know the crypto people are gonna reach out and say, Dave, look how strong it's been lately and Bitcoin's flying and fair point. But in general, people haven't done well horribly with NFTs, horribly with option trading and a lot of the things that were preached by some of the influencers as the CFA looked at that breakdown as to who's preaching conventional wisdom, things

that make sense over the long term, and who's really hawking highly speculative investments, often for selfish reasons. You know, it's tough to say. I don't know if they had a stat on how much was risky financial advice. Like, I don't think they took the step of saying what was bad and what was good.

But to your point, that's kind of the issue we face, right? Is on the one hand, it's great that we have all the shared information. On the other hand, there's very few sort of gates in the way that's preventing people who might be more malicious with the information they share or have ulterior motives. And I think in the CFA report, they

had five sort of risks they highlighted. One of them was misrepresentative marketing, so the fact that they have hidden marketing with what they present, whether it be a course that they're trying to push onto you, or they talk about a product or investment that they have an interest in. There's others like misinformation and a lack of quality with the information they share.

And what the report really highlighted as probably that the lowest hanging fruit for improving a lot of the information quality is just disclosure, is just transparency with the individuals posting this content. The problem is you have a lot of people who talk about a stock or share a pick, whether it be crypto or whatever, and they don't discuss what makes them a qualified individual to discuss that topic.

And I think it would be unreasonable to expect someone to post their resume every time they post a video. But I think that's what's sort of needed is more transparency around who is sharing the information. And maybe that falls on the audience in terms of being more skeptical with who you consume the information from. So that's definitely the balancing act we have to find. And people have taken different approaches. The US and Canada, it's been very lax with how they regulate the area. Whereas in Australia, I know, for example,

they recently cracked down on the space and now they actually require anyone posting any sort of finance content that could fall into advice to have a different sort of registration. So now you actually have influencers in Australia registered to give that sort of social media advice. And I'm not sure if that's the right approach, but it's a different approach that I think regulators do need to look at and consider. How is the best way to keep that freedom of information and sharing, which is very valuable, while effectively keeping people responsible for what they say online.

Yeah, I think you said that well, but it's going to be tough to do. And again, the viewer has to become a little bit more demanding, a little bit more discerning, a little bit more skeptical, etc. Because I'm not sure how we get around this and frankly some of the people giving the advice who don't have the right background, they aren't necessarily doing it for the wrong reasons. They're still trying to help but they're not that well-informed and they believe what they're saying to be true and also they believe their advice to be applicable to everybody watching. As you know it's very difficult that you've got to handle the subtle nuances and you've got to talk

about the differences between the different kind of people listening. It's challenging. It's tough to be a good educator and strike all those balances. And frankly, a lot of people, I don't think, even try. And again, with ADD running amok among society, we have to keep these videos relatively short. And therefore, you can't cover off all the subtle nuances

in every case. I find that challenging, producing our shorts for social media. It's tricky, tricky stuff. The Australian efforts are interesting to me because, unfortunately, by doing that, they're going to block some people who weren't selling product, who were just kind of knowledgeable people trying

to put out videos to help others. They may not be able to do it under some of the regulations Australia brought in. Well, that's exactly it. And so you kind of have these two opposite approaches and you know in the US it's sort of on the one end of the spectrum of you know freedom of expression and freedom of speech and that's very much ingrained in their laws and you know something I found very interesting when I sort of started posting online was I was always very much scared, you know, actively, you know, made fearful of providing advice online.

You know, when you study the CFA and you work in the industry, there's, you know, there's, don't give advice online. You're going to get into a heck of a lot of trouble. And so I was always very shocked when I started posting videos and I saw what other people were providing because I thought, wait a minute, like, I was told that's not what you're supposed to do. That's illegal. And it turns out that at least in the US, Canada's laws are a lot less explicit. And a lot of laws are not very explicit in addressing

influencers, because they're a recent phenomenon, at least on the social media side. But in the US, there's a exemption for things like newsletters and that are more broad base in terms of the advice provided. And that has legally been applied to finfluencers to say, well, if we aren't giving unique advice to one individual or tailored advice, then it's OK. It doesn't constitute registered financial advice.

So that's the one end of the spectrum, is the US. And then on the other hand, you have Australia, which I think would, to your point, is a little too restrictive. Now someone can't go and talk about ETFs or even what really stock investing is unless they follow this registration, which is a barrier. There's one individual I was talking to,

I think he mentioned it was a couple of thousands of dollars to get this registration. So that's not feasible for someone who wants to just share even just their financial journey or their experience with investing. So it's definitely a balance between the two. And to your point about the consumer or the viewer taking some onus for going through and filtering this content,

again, that CFA report, they did a good job of summarizing sort of three criteria they highlight for evaluating this content. Again that CFA report, they did a good job of summarizing sort of three criteria they highlight for evaluating the content. One was motivation, so asking yourself what's the motivation of this person for sharing this content? Are they ultimately selling something? Are they trying to get you to invest in something? The second is qualifications.

What's the experience or education that gives this person the qualification to talk about what they discuss? And I think it's not to say that someone would this person the qualification to talk about what they discuss? And I think it's not to say that someone would know that you have to go to university to talk about finance. But if you're going to talk about stock analysis, you have to have something to back up that support. And then third is consistency.

Does the information match what you can find through other sources? So effectively background checking the information you come across. And I think that's a good summary of how viewers can try and on their end, again, filter out some of the more bad stuff you can come across. You know, I agree. I thought that was the best part of the report, but realistically,

people aren't going to do that. They're not going to look at all of those things. And so we're right back to the same problem. And the problem is compounded by a very strange thing that a lot of people won't be aware of. Research is now showing that for some odd reason we tend to trust online advice even more than we trust in-person advice. It's very strange. We grant a subconscious kind of effort to give expertise to these people when we're seeing them online. It makes no sense whatsoever, but that's what the research is showing.

Have you seen that research at all? What are your thoughts on it? Yeah, so, you know, to that point, I think part of it is somewhat of this anti-Wall Street movement to an extent. And one thing I've highlighted when talking about if influencers mean critical of that space, is to highlight

that it doesn't exonerate the shortcomings of the professional side of investing in finance. Great point. All of this really does stem. Really, you think of the FinFluencer movement as a whole. A lot of it does stem from 2008, where you had the financial crisis, which really did come from the risky bet taking

of all these large institutions. And so you had this movement online that suddenly came to distrust the professional. And we still see that in Canada not too long ago. CBC has done a number of investigations into even bank branch advisors and the advice provided there and how it can be bad sometimes how people are given inappropriate financial advice, so the rise of influencers has in part come from the shortcomings of

The very total of finance and so I think when you talk about trust that's one of the things you have to consider Now there are other reasons which is there's accessibility The fact that you can pick up your phone and get financial advice really quickly versus setting up an appointment. It's a lot more enjoyable. I don't know how many, if you've ever had a, if you, if the wealthy barber would ever need a bank advisor, but if you've ever sat down with an advisor, you know, it's probably not the most entertaining. That's right.

I agree. This is more engaging. That's right. It's more engaging. It's, it's more enjoyable and you get to learn something in the process and two, to their credit, you know, a lot of them make that an important part of the content they provide is, well, how do I make this engaging? And on top of that, there's the cost barrier as well. Finfluencer content is mostly free. So all those things really go to the benefit of Finfluencers. The distrust of professionals plus all these benefits gives

them a big step up. And even if you trust the professionals, a lot of them aren't very good communicators. I mean they may have financial knowledge but they don't have your skills and being able to bring it across in an understandable fashion and again to make it engaging, none of it. I think we missed maybe the most important part, the FinFluencer gives out the information in short doses and going back to my ADD point, people like these quick hits. Give it to me two and three minutes at a time, make it sound simple. You go back to the industry, mystery is margin. To some extent, they want

all this to seem confusing and complex because it heightens their desire to work with or the people's desire to work with them. And so yeah, it's all very complicated how this plays off each other Yeah, and you know, I think any sort of and again It's to say that when you criticize the area of influencers You have to keep in mind the criticisms of the professional world and and you have to any solution for Influencers has to likewise consider How is that going to leave individuals when facing professional advice? And I think there's room for reforms over there as well You know, I think when you look at the, again,

I'm going to highlight the great CBC investigation of the explicitly bad advice that ultimately stems from similar conflicts of interest that influencers face, right? There are bank branch advisors who have sales targets they have to reach. Quotas, yeah. Well, who wants an advisor that has

a quota for a certain type of product to give them advice, right? Crazy. So it's those conflicts of interest that you face on both sides, unfortunately. And I think that any sort of improvement we're going to see with influencers has to consider how we address those as well. No, that's very well said and very fair.

You know, I want to talk about a specific type of influencer that I actually get drawn into a lot. And that's the one where they're not saying I'm an expert. They're not saying I have all the answers. They're saying, I'm young, I'm just starting out. Come on a learning journey with me. And they're showing you how did I set up my account on one of the platforms?

And why did I choose these index funds? And where did I find the ticker symbol? A lot of those are quite good and have been quite helpful and they're not you know stepping over any boundaries they're saying I didn't know what I was talking about and I read this book and then I talked to this person and I listened to this podcast and I love the plain bagel and you should be listening to him he's really good those types of fin flirts is a lot of ways have had a good impact and many of them interestingly aren't selling anything they truly are just posting to try to help friends

and colleagues along, and plus they like the attention maybe. But what do you think about that group, and what's the downside of that group? Well, to your point, I think that's great that we have the ability for those people to share content. Because the way I view it is social media regulation shouldn't step so far as to restrict the type of conversations you might have

with friends and family. So if your friend comes to you and has that similar sort of conversation, I think there's value in being able to share ideas between people who might not be experts in the subject. And I always like to draw the parallel with health-related content, because I think the finance world faces the same challenges as the health industry.

I think it's great that people can share recipes, that people can share their life balances, workout routines, things like that. I think where you get into the problem is like you highlight, when people start highlighting something as truth or they highlight their expertise or the Matter-of-factness of whatever they're sharing and don't recognize the misinformation that they might be sharing where people say, you know, here's my home remedy for curing a disease or Here's you know, I've been putting this chemical in my food to help, you know, my gut health with very little backing so it's kind of of finding that same balance

where I think people being able to share their experiences, I actually think that's great content. I think if you highlight, look, I'm not an expert, I'm posting content, my finance journey I can highlight. I think there's a lot of content out there like that. I think that's great because that helps the viewer who might not have that experience in their personal life get familiarized with finance and investing and seeing it practically, even if they don't

follow the advice of this person and replicate exactly what they do, it's going to show them that it's perhaps not as big of a hill that they expected, that it's a lot easier to get started. I think there's a tremendous benefit to that. It's finding that balance of how do you keep that without sort of allowing this flood of misinformation and people almost abusing that relationship with what they share. And it's a tricky balance that I bring up all the examples. And I don't know if I have the solution, though.

I don't know if I have the right answer. But I find it fascinating because I do really have this unique position of being in both worlds. And I I'd like to keep kind of a thumb on the I like to keep a pulse on everything to To see how it develops You know, I'd be hypocritical of me to criticize those types of influencers too much because I had a barber Teaching people try to do it and they were going along a journey together So I basically use that exact approach through the book. But my background, of course, was finance.

But in general, that's how I taught. It was conversational and look how I've done it and look what I've learned over the years and therefore join in, et cetera, et cetera. So I get it. Now let's go to the bad end of the spectrum. Sure, there's no doubt. There's a lot of influencers out there

who have their own selfish, vested interests and are pushing people into places they shouldn't go. It could be pump and dump. It could be any number of things. Talk a little bit about that. What are some of the examples that you've seen and what to watch out for if you're a consumer? You know, specifically, and a lot of my experience

comes from the world of TikTok and YouTube because I post on YouTube and I find TikTok fascinating. So those are the platforms I'm most familiar with. I know Instagram is actually, I've actually, the few people I've met in person, Instagram has surprisingly been a really popular platform that I'm just not familiar with, that there's a lot of influencer content.

But speaking kind of exclusively to those two platforms, there's different types of dangers you come across. One of the most common is the other products or sponsorships that someone is pushing. And it's, you know, I think in some ways people have kind of mixed feelings about that sort of approach. On the one hand, you want independent creators

to be able to support their lifestyle, to earn the money so they can continue sharing information. But one of the biggest ones, for example, is selling courses. I think courses are, by far from what I've experienced, the most lucrative business for a FinFluencer. Is that the greatest business model ever? You create the course once. That's right.

No marginal cost of goods sold after. And then you get out and do marketing on free channels. And some of these people are very good. To give them credit, there's a few people selling millions of dollars of courses who are truly good marketers and good educators to boot. They're rock solid. There's others who are a bit scammy, obviously.

But yes, the business model and the potential revenue is crazy. Of course, the revenue flows 100% to the bottom line. They're working out of their house. They're using free platforms. And again, the marginal cost of reproduction is zero. I love the model. Yeah, no, it's probably, if I could invest in it, I would. FinFluencer, course selling business or whatever.

And the issue with it, on the one hand, is a lot of FinFluencers, they overcharge for what they sell. That's kind of one issue. That's the issue with it, on the one hand, is a lot of Finfluencers, they overcharge for what they sell. That's kind of one issue. That's the issue. So if you look at some of the ones on building your initial portfolio, OK, and there's a lot of those out there, especially stateside. And there's some of the people who have produced them that the rumors are they do 10 to 15

million to 20 million, in one case, in revenue in years selling these courses for $1,000 to $2,000. Now, you could say, I think the courses are quite good and I think people have actually got value back, maybe. But the point I argue is the exact same material is available through three books that would cost you less than $100 to buy or online for free in many areas. People say, yeah, but I don't wanna search for it online.

Well, fine, but you can still buy the books. That's not a lot of hassle. And read through the three of them. You've spent $80 instead of 2,000. Now, here's the counter argument. People say, yes, but when I spend that kind of money, I feel pressured to actually follow through, take the course, implement the advice.

Plus, it comes with a community. There's other people taking the course. We're in chat rooms, we're pushing each other, we're sharing ideas, we're with a community. There's other people taking the course. We're in chat rooms. We're pushing each other. We're sharing ideas. We're getting questions answered. And as much as it seems crazy to spend that amount of money, I think the value add is there.

Is there any merit to that counterargument? I haven't heard that one. I think that somewhat makes sense. But I would argue what I would counter to a lot of that is, at the very least, I think counter to a lot of that is at the very least I think someone should be trying the cheaper alternatives first because if nothing else you might be adding $100 of extra cost to go through those routes before you try the more expensive courses.

And you know, to the point, it's not to say that everyone who sells a course is necessarily selling a bad product. I think you just need to do the cost benefit analysis. And I think there are people who might find a course, say it's $300, and they might find that they get enough benefit out of that to justify it. And I think there's room to allow for that argument. If, for example, you like the creator, you like their communication style,

it really speaks to you and it helps you learn the topic. Because ultimately that's what you need, right? You can say, you can either buy this course for $300 and enjoy the process or you can have this cheaper approach with books and the like and you don't enjoy the process and it takes you longer and you don't actually finish because you're not committed. I think there is a valid argument there. Yeah, I do too.

But now when it gets up to 2000 and 3000. Well, that's it. Which is where some of the courses are now sitting. And part of it too is you have to evaluate what is where some of the courses are now sitting. And part of it, too, is you have to evaluate what is the quality of the information you're learning. Because if it's, again, one of these more grifter types that are online, where it's, well, I'm a millionaire, therefore you should listen to me,

you might not be learning that great of information. And I think one of the common criticisms of these courses is either it's misinformed information, so it's people, say say sharing trading strategies that aren't really based on anything outside of a few nitpicked or cherry picked situations. Or it's just very basic information that doesn't actually take you to a point.

So it's very basic information that's widely available that you could have just found on Investopedia. So maybe they just made their course by copying pages from Wikipedia or Investopedia or whatever it is And it doesn't actually take you to that step of being able to invest it It's still very base level so you pay $300 and end up more or less in the same spot that you were before and I think kind of the last point there kind of my biggest criticism is How the courses are marketed I think if someone were to be honest with the marketing of the course,

I'd have no issue with it. If someone were to say, I have a thousand dollar course, it's me sharing my experiences and what I've gone through, whatever, like genuinely, I think if someone sees that, they can make that evaluation at that point, whether it's worth it or not. The issue is that most of these courses are marketed in terms of highlighting achieving financial freedom,

learning to invest like I do, getting the same financial results that I got. Most of these courses are marketed in terms of highlighting achieving financial freedom, learning to invest like I do, getting the same financial results that I got. It's how it's marketed that I think really turns it from being maybe a lower quality product to being more scammy or that kind of concerning practice we see. I think it's a combination of those things. You have to be able to evaluate the course you buy. If you think it's worth it, great, but how these things are marketed, it's a combination of those things. You have to be able to evaluate the course you buy. And if you think it's worth it, great. But how these things are marketed,

it's very difficult for people to do that evaluation because you don't really know what the end result of taking the course will be until you've gone through the process. So it's very difficult to do that cost-benefit analysis. No, you know, that's all very well said. Interestingly, a couple of the people who have done very well, females, in this space have done a good job of being honest. I've watched some of

the marketing and they said, look, you probably could go out and get this information less expensively than the thousand or two thousand I'm charging. And no, this is not a get rich quick scheme. This is going to be a slow type process, but you won't go out and get it on your own. You don't have the community. You don't have us here answering any questions you have, pushing you, cajoling you to move forward and we think we're going to make a positive enough difference. If you don't believe it, go on and look at our social proof, go on to our community sections and ask people how they're doing. They've been quite good at that.

So as I mentioned earlier, there are some good people in this space, even with the high price courses, but I tend to agree with almost everything you're saying, that there's less expensive ways to get at this, more efficient ways, why not start there? And then of course, some of the courses are horrible. And to your point, you've already paid for it, and you can't get the money back in most instances, and they're over promising.

I can give blunt advice to our audience right now. If the course is on trading, trading your way to success, option trading trading your way to success, any of those things, don't buy it. Just send me the money instead. At least it's going to a nice person who will do something productive with it. Don't just give it away to someone else. If somebody truly knew how to trade their way to riches through options, they're not telling you. It's gonna to get arbitraged away by too many people doing it. Plus, they wouldn't need to tell you.

That's all silliness. But yet, that's where a lot of the courses have done well. There's that desire we all have to make money from our home an hour a day, not have to put any work into it, but sit back and think about it. Obviously, that can't happen. It's absurd. Yeah, I think trading courses and even ones

that jump right into investing strategies or analysis, I think maybe it's a crude comparison. But it's almost like taking a course to do brain surgery. You're missing so much fundamental information to just try and get to the, OK, what's step A, B, C, D to do this brain surgery, right? And I think that's kind of a good way to view the trading courses is,

you're really jumping to the conclusion, let alone the fact that trading is kind of the area that often focuses on get rich quick, and those kind of more scammy approaches of, well, if you just do this one pattern or the like, you'll make a bunch of money. And the issue with trading, and it's well known in the industry, is there's

no single approach, pattern, or even algorithm, or quantitative approach that is going to consistently perform. Because the moment you introduce that to the market, it gets arbitraged out, essentially. So I think with courses to what we've talked about, I think if you do the cost benefit analysis, if you want to take the course, I think great. I think if you know what you're getting into, awesome.

I do think however, that if you're trying to get the best bang for your buck, there are better approaches out there and they're worth looking into before you do this. There are creators like Aswath Damodaran, who is a NYU Stern University professor, who posts university lectures on corporate finance and such topics on YouTube for free.

So there are plenty of free resources out there that are university-grade courses. I think the issue is a lot of people don't wanna learn the fundamentals. They wanna hop right to the brain surgery with these. And that's what these courses promise. You know the funny thing is, if you're not a dreamer, and you're not thinking get rich quick,

you really want to learn, I would argue, watch all the wealthy barber videos, watch the plain bagel on YouTube, but watch Ben Felix and listen to The Rational Reminder, and you're pretty much covered. Between all of those things, and they're all providing good entertainment, credible sources, they're kind of fun to listen to.

You can do it in your car. It's all free. And it's for people who are trusted in the industry and have the right educational backgrounds. It's there for you right now between those three sources. Now there's lots of other good ones. I didn't mean to pick those three and selfishly mention my own name, but there's other good ones too.

But the point is there are very credible people out there for free with good communication skills that can help you along the right path. Yeah, yeah, no, I agree. And I think it's just a matter of doing that evaluation with good communication skills that can help you along the right path. Yeah, yeah. No, I agree. And I think it's just a matter of doing that evaluation of again, motivations, qualifications and consistency to see, you know, is this something that I can actually learn what I need to to get started with finances?

Or is there an ulterior motive I need to be aware of when I'm buying this course or watching this content? You know, when I look at you and I listen to you, you have the look and sound of someone who could never, ever tell a lie. You should be a con man. You would be incredibly successful as a con man because everything you say, I go, yeah, that guy's telling me the truth.

I believe in that guy, for sure. I appreciate that. You know, it's actually one of my first jobs was in a grocery store. I did bounty towel demonstrations, funny enough. And I got fired after the first summer because I wasn't doing a very good job. But I actually, I thought it was great. I had the bounty towel, and I had the competitor,

and the bounty towel was great. But I just don't care enough to be sales focused. I don't have that drive. I know some people do. It's really not to discredit people who take a sales role. And some of those people do bring value. But it's not something I really enjoy doing. I've always really enjoyed trying to find out.

Well, what I enjoy really and why I keep a full-time job is I genuinely enjoy, I find it very gratifying To take someone's situation and find ways to improve it and it's the same thing with the channel I find that very gratifying to be able to post information online and make it widely accessible And you know, I could say it's out of the goodness of my heart, but I just I enjoy it I find it gratifying. I I like digging into these topics. I'm a big finance nerd. I like learning about you are a nerd stuff. No, you are. I watched your videos and you are you and Ben Felix, maybe two of the biggest nerds Canada's ever seen. By the way, yeah, Ben Felix is a walking database. I don't think

I can get him. But but yeah, no, we definitely aligned on that front. No, and you know what? You have helped a lot of people. And again, I'm going to pay another compliment. You didn't start out looking to monetize this. This was something you were doing from the goodness of your heart. No, obviously you didn't anticipate it taking off to this level. And I'm sure there's some revenue coming through from the YouTubes of the world when you have a million subscribers for heaven's sakes. But that wasn't the original intention. You were out there trying to help people and good for you. You should be very proud of that. Well, thank you. You know, it's again, it's to highlight my own motivations too. I just, I enjoyed the process. Videos, video editing, funny enough, was something I did as a hobby

in high school. And when I was in university, I had a job through the university providing workshops on at first accounting and then it was economics. So I had a teaching role where actually I had, well, maybe that helped with the channel where I was taught, you know, how to teach and how to present and these communication things. And so when I entered the field and I had this idea, it was kind of a combination of what I enjoy doing, which is I enjoy teaching. I enjoy running the workshops. I still do. I still volunteer at the university and provide workshops from time to time,

because I enjoy presenting. I really do. I'm sure similar to you, where I don't think you have to work a day in your life, but you're probably still doing these speaking engagements, because I assume you're like-minded, where you enjoy the activity. And I enjoy video editing and I enjoy finance.

I found a real passion for it. So it was really something I started as a hobby because it was a combination of three things I enjoy doing. And I thought there was some demand for it when I had graduated university. A lot of my other friends had likewise graduated and were finally getting a career salary and wondering about investing. So I used to meet up with them as, as kind of the finance friend in the group.

I, we used to go grab a beer somewhere at a pub. Uh, we'd sit for two hours and I'd go over, I do this, this elevator pitch on investing, basically, um, covering all the basics, uh, from compounding to what a stock was, what a mutual fund was, what an ETF was. Without kind of providing any advice, I was still very much afraid of overstepping that line at that point. So it was all just provide as best I could objective information. And really, I just saw the channel as being taking that what I saw was demand for this

approach and bringing it online and again, combining those interests. And it's worked very well it's definitely become lucrative these days without having to be I'm the luckiest person in the world because I have been able to make money from something I haven't actively tried to make that much money from. Well the great news now is it gets easier because you do have such a powerful brand then you get invited on other people's podcasts etc where you can help listeners but also it spreads the word and they come and watch your videos.

But I listened to you talk about being a video editor in high school and then selling bounty towels. Did you have trouble getting dates? I would think that you didn't have women swarming you at this point in your life. I'm married to my high school sweetheart. Oh nice, that's very nice. Yeah, just got it before all the nerdy stuff.

But you're so nice and so earnest and everything. I think someday we're going to discover that you have a second family in Tulsa, Oklahoma. I think you're going to do that guy. How many kids do you have? Two kids, two young boys. Yeah, I have a two-year-old and a four-year-old. Now that's exciting, so busy, busy times.

OK, we're going to leave the influencers, but I want to talk about one more thing. Let's talk about the extreme end, which in the States in particular is very big, and it's the one selling the flash. They've got the fancy cars. They make you almost feel like if you're not a winner too, you're a bit of a loser. You can join in with me. A lot of them tie into crypto, not all of them out of fairness, but a lot of them tie

into crypto. Give me some comments on that area of the FinFluencers space. You know, I think one thing I always highlight when you come across these videos of people, we call it flexing their wealth on the internet, is again, going back to that, what's the motivation of them doing that? I think if you were to read any book about wealth or the like, you do come across this concept which is that people who do have a lot of money aren't typically the ones doing that activity. You don't see the local millionaire going around and revving their engine at the stoplight or whatever it be.

And I think you do have to recognize that that approach, while it might make you feel a certain way or give you that sort of desire or fear of missing out that they're trying to get out of you. A lot of it is just a marketing tactic, right? And I really do think it's trying to substitute qualifications with this flashy, what they view as being a qualification, right? Because on the internet- A shortcut. It's a shortcut. And on the internet, there's no real way to vet the people you come across unless you dig deep into them.

So for someone who's trying to get, say, people to sign up for their course or people to join their Discord group or whatever it is, they view it as I can either share my background, which might not be all that impressive, or I can flex my wealth and highlight this fast car and things. And that's probably going to communicate what they're trying to get a lot quicker than this other stuff that's maybe not as attractive. And the other consideration there

is it's very easy to fake that kind of wealth. And in fact, there was a video I did on this exact topic of influencers. I loved it. You rented the car. I rented the McLaren for $250 for the hour. Just to show that it's very simple to fake that level of wealth, and you see it all the time.

You have people renting out Airbnbs and pretending it's their mansion. You have people writing off all these expenses for these marketing videos, and then turning around and online, presenting it as though it's their own wealth that they accumulated from this activity, right? Which is the other side of it.

You might even have people who have that level of wealth, but did they get it from the activity that they're selling you, or did they get it from an inheritance, or was a family member wealthy and they just, you know, lucked out? So it's all those things you have to question. And really, anytime you see someone who uses their wealth

to try and get you to do something, it should be a red flag because anyone who has the qualification doesn't need to lean on that kind of very low hanging fruit. You know what's crazy though is the number of people you see and again I'm not trying to pick on crypto but in the crypto area where they're not even trying to sell you anything, they're still doing that type of thing but they're perhaps potentially trying to get you involved in crypto. It's a subtle version in that space of pump and dump although I don't think they're potentially trying to get you involved in crypto. It's a subtle version in that space of pump and dump,

although I don't think they're thinking of dumping by the way. They're just trying to get people in. Some of it by the way is because in their heart, they really and truly believe everybody should be a major player in the crypto space. Others I think have, you know, less good intentions. Do you see some of that? And with small micro cap stocks, for example,

we're seeing some of the influencers now being bribed, in essence, to come and push the stock. And that's got to be cracked down on. That's the one area that has got to be looked at by regulators. Yeah, well, to that point, that was kind of a deep dive I did recently. And I spent way too much time on this one video. But there was one idea I had.

It actually came from around two years ago when this first came up. But I went through and I found there are publicly traded stocks, as you mentioned, are paying YouTubers to promote their stock in their videos. And that's all interestingly legal. It is allowed for you to take a sponsorship and promote a publicly traded stock.

Well, newsletters have done it forever. Well, that's exactly it. It's just taking the traditional form of marketing and bringing it into the finfluencer world. But that brings us to issues. The one is, finfluencies are different from traditional media outlets, in my opinion, because of exactly that they have influence. I think when people see a newspaper ad, they recognize it as such, and they're able to better evaluate it.

But when the person that you trust online and give you information suddenly says, hey, I found this awesome stock. And when you watch these sponsorships, it is a paid advertisement, but they really do lean into the trust aspect of what they're sharing. Oh, I wouldn't promote this if I didn't believe in it myself. I put my own money in it.

They really do utilize or take advantage of the trust they have with their audience. So it is a different form of marketing than we've seen traditionally. The other issue is that a lot of these companies, and I won't call it a pump and dump because I think that gets into legal territory, but they then go around and they'll issue shares based on the price bump that these sponsorships have contributed to. So what you see is- Think about that. That's crazy. Well, that's it. You see an actual price movement from some of these sponsorships, especially the larger channels. And that's what this video is all focused on, was looking into

for all these videos, what were the stocks? Did they move? And what did the company do once the price moved? And we don't have the information to know if there was any trading off of the stock, but what we do see publicly is that some of these companies within a week of the stock price jumping would issue shares, new shares at this new price to therefore raise capital and basically survive longer because many of them have terrible financial balance sheets and the like.

So it's something that you have to keep in mind when you see again, the paid sponsorships and the like. So it's something they have to keep in mind when you see again the paid sponsorships and the like, you have to really be critical of those ulterior motivations. No, that's very well said. You know, going back to the point about pump and dump, and again you do have to be careful with that terminology, but here's two things I've seen later that really concern me. First off, if you're a viewer right now of any of these, and you say, well the person at least put their own money in, they do, but they often put as little as a few hundred dollars in and they're compensating thousands and thousands of dollars. And the only reason they're putting money is because they want to be able to say they did to gain credibility. But the second thing we're seeing

now is that sometimes their compensation is based on how much the stock goes up. And so if they get on there and are really good communicators and can really get their viewers jazzed about this, they get more money back or more shares back, often shares. Now again, newsletters have done this particularly in the mining area and in the low cap area for years and years, but still it's making its way to these new mediums. And I would argue a newsletter reader, a little bit more sophisticated, knew that there may be some biases and things happening like that. Whereas a lot of the viewers of the videos online have no clue that these types of things

are happening behind the scenes. And part of the reason why this video was so fun to do is because regulation in Canada and the United States actually requires creators who are paid to promote a stock to disclose how much they were paid for that promotion, which is different from other promotions. So if you were to promote HelloFresh or any sort of typical product, you don't usually have to disclose, well, they paid me X amount. With stocks, however, that is required explicitly in Canada in British Columbia, which is, I believe they actually have laws on this matter.

Is this the first time British Columbia has ever been ahead of the curve on anything on the stock promotion regulation front? Well, when it comes to financial stuff, you'd be surprised with the Vancouver Stock Exchange, which has now shut down. But the history there is they've been a leader in, we'll say finances for a while, certain types of finance. So with these promotions, what's interesting is you can go and see the disclosures that highlight on this date,

this creator was paid this amount, or this company was paid this many shares. So all that information is available. The problem is the media literacy of viewers isn't at a point where you could expect viewers to go click the description, expand the link, go click the file and then read a Three-page document with this disclaimer right when you consume social media, you know, how often are you really going through the description of a video?

So again, these creators are checking all the boxes at least some of them there. I did come across some videos that Weren't explicit with their disclosures and I think that does border the line of it's certainly in a gray area if nothing else But for the ones who do check the boxes, they really are just checking the boxes. It's not making it in some cases very clear, you know, no one says in their video how much they were paid, even though that's a legal requirement,

it's just hidden in the fine text, you know, similar to a contract. And I think that's kind of the issue, right, is if that was more upfront, and to your point about them putting in a few hundred dollars, these are probably also the best sponsorship rates have ever come across on YouTube in terms of how much you get paid for a video with X many views.

There were some creators I came across who would have thousands, hundreds of views, say 500 views, it would be paid $10,000 to promote this stock on their channel. Shocking. And it's that level of, you know, so you understand why creators are taking these deals, because they cannot get a Hello Fresh deal with that level

of payoff, right? It's ridiculous. So them putting $200 into a stock is a drop in the bucket compared to what they're being compensated for doing this arrangement And you know, I think the issue is some people might then say well You know, it's just an ad I I'm not endorsing like, you know I didn't know any better that this was a shady company, but then they're kind of having their cake and eating it too, right?

That's right. They're claiming ignorance when it's When it's beneficial, but then also trying to utilize the trust of their audience and eating it too, right? They're claiming ignorance when it's beneficial, but then also trying to utilize the trust of their audience and saying, hey, I'm a good resource that you should otherwise listen to, except for when I'm paid to talk about something. Makes sense. There makes no sense to try to have it both ways. I want to assure people before we move off this topic that I'm not paying you anything today. That's right. No, I'm honored to be here. No, you might get a thank you text if I remember.

That's as far as this goes, okay? No, I was going to say, I meant to say this earlier, but The Wealthy Barber Returns was the first finance book I ever read. And my father's probably pretty jealous of this interview because I believe he followed you certainly on Dragon's Den, which you being on the show would have been a bit before when I was actually watching it. But so I think, so yeah, I wanted to thank you for that book because it was one of the first things that got me into finance.

So no, I'm honored to be here. It's great to have the chat. That was a nice compliment, but all it really said to me was, Dave, you're old. Like, I was so young, I didn't even watch Dragon's Den. Yeah, when you're old. That's all I heard there was, Dave, you are old. You have an incredible legacy is what I'm trying to communicate.

OK, we've kept you a long time on this. I do want to cover one more subject. And we're going to get back on a second time, if you're OK with it, to talk about the world of economics and investing. We'll do that relatively soon. But I want to look at one more area, and that's behavioral finance.

Now, I want to start by saying I am nutty in this area. I read every book that came out on it and I'm gonna surprise you with what I'm about to say. I think the area drew too much attention that the Pulitzer Prizes and the Nobel all of it was kind of crazy because to me it was all common sense. Like in all those books that became famous I knew all that stuff when I was 19, 20, 23 helping people because you could see those biases You could see that it just made perfect sense I got my father to read thinking fast thinking slow, which is a book that draws incredible reviews

He loves that type of stuff. He read the whole thing. He goes it was great And I loved how they tested to prove the different things very creative. He goes, but there's nothing in there I didn't know that's common sense and a basic understanding of human nature. Is that criticism wrong or would you fall into that camp? No, I think that's accurate. And I might be messing up the exact wording, but people often say that marketers figured out

what behavioral economists figured out like decades ago. Like all of this was common knowledge or the playbook of the marketing industry well before we called it behavioral finance. So subscription models and how marketing is used, all really covers the same ground as behavioral economics is just from the other end of it, is how do we use these shortcomings

that we have with framing and things like herding and all these different biases. I think why it took off and why people liked it so much is just it was applying it to a different area. And Daniel Kahneman, who wrote Thinking Fast and Slow. Yeah, brilliant man. Brilliant mind. And he brought on Richard Thaler, I think his last name is.

And they're the ones who kind of introduced the field of behavioral economics. I think why people found it fascinating is it was just applying those same lessons to a different area. And to your point, the book, what it does great is it takes these things that we all probably have some concept of, like you mentioned, but it provides concrete examples.

One of my favorite that they highlight is around loss aversion, the idea that we, as humans, treat losses more severely or feel more affected by losses than gains. So if we lose $20, it hurts a lot more than finding $20 on the street feels. And I believe in the book with sort of this exercise, they found that that equates to roughly a two times factor

where you feel twice as bad about losing money as you do gaining it. And the way they tested that was they gave people an option to do a bet of either gaining $100 or losing $100 with the 50-50 probability. From a mathematical standpoint that's the same as not taking money your expected return is $0 so you should be indifferent between taking it or leaving it. Then they increase the amount and they say, okay, what about if you have $101 of upside and $100 of downside?

And they found that even though that statistically is a good bet that you should take, because now you face a higher upside than downside, most people wouldn't take that bet until the upside increased to roughly twice the size of the downside, which is how they came to that two times factor. So most people would only take the bet, the size of the downside, which is how they came to that two times factor. So most people would only take the bet, the 50-50 bet,

if it was $200 on the line with $100 loss downside to that bet. So that's why I think the book, it just took what people had this vague understanding of and really codified it and made it more explicit. And I think those books, to your point, you also have a background as a businessman. And I think that that set of skills isn't something that everyone will have.

So while this feels like common sense to you or I, it's also something that the benefit of having this written in a book is that people who might've studied engineering or a different field or worked in a different field, they now have access to that those same learnings. I think that's the benefit of learning about behavioral economics and finance is regardless of your background, we all have to deal with money. It's something that you can't avoid. So there's a benefit to learning about these topics and some people might come naturally and have that common sense.

But for those who don't I think the field's really interesting to dig into. You know what's scary though is the people who had a good feel for it and are likely to understand it even maybe instinctively are the ones who read the book and the people who don't have a good understanding for it and don't think that way are much less likely to pick up the book and go through it. Although again, I thought the big merits of that book and a few others was the examples they used or some of the tests they devised to prove their different theories. They were very creative. I mean these are sharp sharp people in the field. Let's go back to your loss aversion example because I have an argument with that with some people in the field. The expected value could be

very positive and the bet sometimes is still imprudent. And maybe you should have a loss aversion because the loss would change your life, whereas the gain wouldn't. So you've got three million and you can put it all in a stock that has a 60% chance of going up to be 16 million and a 40% chance of going to zero. Well, an economist would say, or a mathematician would say, you've got to take that bet.

But some others would say, wait a second here, because if you lose, you're done. And you've got to start over, and you don't have enough time. So there's a lot of variables that come into play here. Yeah, and that is a consideration that's brought up as well. And I do think they have a term for what that threshold is,

where even if it's an attractive bet, the downside might still be too painful. And the caveat that's thrown into that specific example is you should always take that bet if you have the ability to repeat the bet. So essentially what that means is if you're able to repeat the bet over and over again, then of course you should take it because by the law

of big numbers, or I'm maybe butchering that, but the idea that over time as you repeat this bet, you're going to likely see the outcome match the probability of a single bet. So that is the one caveat and it's why, even to your point, why it doesn't necessarily justify, say, putting all your money into one stock because yes, it might have tremendous upside,

you still could lose 100% of what you put in. So there is that risk aspect you have to consider. And then, you know, we talked earlier about the appropriateness of financial advice. That's kind of the one thing you have to consider with advice online, even with the very basic advice of, well, put your money into an index fund and the like, you still have to tailor financial advice

to someone's situation. And even that might not be appropriate for some people. There might be people who are living off of their savings who need the money for say a down payment or a rainy day fund where putting it in the stock market is not appropriate. So it's all stuff that you need to you always need to consider risk when you when you really have any conversation around money or investment. Even if they have the long-term time frame it may not be appropriate because they're so risk averse that until you can educate them

that they need to be less risk averse, they're likely to panic during a down and turn and so on and so forth. So you're right, blanket advice. I struggle with that as I create our videos, is how do I in two minutes, four minutes, six minutes, put in the exceptions, put in the caveats without bogging down the video so much, nobody will watch it.

It's very difficult on stage where I can go 20 and 30 minutes in an area and cover off some of those and make them interesting and wrap them in humor. It's much easier in a short video, not so much. All right, back to behavioral finance. The one that makes me most shocked as I get older and older and older of all the biases is still confirmation bias because even those of us who understand it completely can't stop doing it. I'm as bad in the confirmation bias front as all the people around me who don't even understand the concept.

It's so strong. How do you think it impacts people's finances? Where should they be watching out for it? Well, you know, I think it kind of ties into our discussion around influencers too is one challenge we face especially today is that social media is actually geared to reinforce confirmation bias. Exactly. It actually puts you in an echo chamber, right?

If you say, let's just take you like a given stock, then the content you see on YouTube is more likely to be a positive thesis on that company, because you're more likely to watch that and enjoy it, whereas a negative video you might just subconsciously click away or not just decide to look, because you don't want to have a bad day. So on the one hand, you face that challenge there. But yeah, to your point, even knowing about biases

doesn't inherently make you immune to them. And I think that's a tricky thing with these biases. And I think what it does is it requires you to find external ways to mitigate, or you have to explore ways to mitigate your biases. So with confirmation bias, it can be discussing it with others. And that's something that part of the reason

I enjoy working for a company is that there are people who are way more Experienced in myself way more educated and quite frankly should be the ones hosting my youtube channel because they they've been in the industry for decades I'm just the one who knows how to do video stuff. So I'm here I guess but Being able to be around individuals who I look who I respect and who have more experience and education that are willing to share it individuals who I look who I respect and who have more experience in education that are willing to share it. That's been a tremendous benefit to myself. And I think trying to echo that with areas that you're worried about confirmation bias

I think helps when you find alternative views, when you have resources you can reach out to. But then there are other things explicit with investing, there's diversifying and trying to offload as much as you can. If you are someone who struggles with money management or investment research or confirmation bias Maybe it's it's finding a way to again It's leaning on what you can to take as much out of your hand as you can

Recognizing that you might not process things as effectively as you should And that's kind of the tricky thing with these biases is, I think recognizing is great. It's kind of the first step to recovery, I guess. But it's not always enough to just know that that thing exists. Honestly, that was a great answer. Considering that we don't give you the questions ahead of time,

that was really a good answer. Because you hit on a lot of key themes there. It's one of the big advantages of diversification that's not discussed enough is it forces you to not let your confirmation bias take you too far. We can all fall in love with an opportunity and convince ourselves this is one we should be betting much more on than we normally would. And it's funny with confirmation bias, I think I've helped a ton of friends deal with theirs by playing the devil's advocate, I tend to think about what can go wrong effectively

because I've been an entrepreneur all my life. And when you're an entrepreneur, or you learn that what can go wrong often does. But with my own confirmation bias, when it comes to investing, I'm not as good. And so your advice to seek counsel, make sure you talk it through. Frankly, even if they're not giving you great advice,

just talking it makes you think differently about it. Voicing all of those types of things, that's great, the diversification. Honestly, that was a great response. That will be one of the video clips. I can assure you. I'm honored, well thank you. That will be one of the video clips.

And also, you're again being too humble, because you're right, you're probably surrounded by more experienced people, older people who are very, very knowledgeable and intelligent, but that doesn't mean they have the great communication skills to bring it across the way you do. That's your skill is you make it understandable and you draw people in. And someone like me with great experience can watch your videos and go, wow, I learned

a lot there. That was well done. But someone like my daughter who doesn't know as much can watch and go, that was really good. I followed that through. I loved your explainer videos that you put out, for example, about the 2007, eight, nine crisis. You did a wonderful job kind of walking people through

on that and you kept it to just the right length. You went long enough that you could get into depth and fully explain some of the concepts, but not so far that there's no way the average person is gonna stick with you. You have good instincts on that. The other thing you and I talked about once offline on the phone, when you're creating these videos and you're trying to help people

educate, a word that never gets any attention but is key is tempo. You have to understand tempo and how to move from one topic to another, when to inject some humor, when to change pitch, all of that. And you seem to have that kind of instinct. So again, I'm really building you up here. All right. I'll tell you one thing, your next video better be good. As people are gonna listen to this and they're gonna come and they go, that guy sucked.

What was Dave talking about? He bore the hell out of me. But no, I think you are. You're much better at this than I think you're willing to say and I like that. I like your humbleness. Thank you. I appreciate that.

You know, part of too, is my generation is one who's consumed a lot of media online. And I think that plays a role as well, is you do pick up a lot from the content you consume yourself. So I think because YouTube was something I used to watch for fun and to enjoy in my spare time, it's something that as I went to make videos myself, you pick up that stuff subconsciously

and maybe that's a generational difference, right, between people who might have grown up on cable or something like that, very different in terms of the editing styles and the like. But no, it's been a lot of fun and I've enjoyed the process. It's, like I said, it's been a perfect trifecta of my interests. No, that's good. Okay, let's go to a couple more biases and then we'll let you go. Recency bias

is the one that I bump into all the time with friends and colleagues around the markets. If the markets are roaring and doing really well, they are buoyed by confidence and think that the markets are going to go straight up forever. They're more likely to borrow to invest, they're more likely to take margin on. And of course, we see it if the market crashes, fear sets in. They extrapolate the short-term trend. If their emotions are engaged even more so, then they really extrapolate the short-term trend and often make poor short-term decisions.

To fight recency bias, people like my father have done an effective job by being oblivious. They pay no attention to the stock market. They pay no attention to their accounts. He doesn't even look at his monthly, not even every three or four. He has no idea when the market's crashing or soaring or anything else.

That's kept him detached. He hasn't been able to get emotionally involved and therefore he's done very well. He stayed the course over the long term. What other techniques can people employ to avoid recent bias? Cause it is powerful? It is, yeah.

And it's the idea that whatever comes to mind or is most prevalent, I guess, in the market is going to impact you the most. And I think part of that is, and something that at least professionally I employ, and this is with analyzing stocks, but it's something you could apply to other areas as well, is making notes about why you take a certain course of action when you take it.

And having that sort of reference point in the future, with stocks it would be writing the arguments of why you want to invest your money in it, or it could even be applied to index funds, why you're arguing to invest in index funds. And putting that down as a placeholder that you can reference during those times of whether it be exuberance or on the other side because it goes both ways when times are Difficult and markets are very pessimistic that can likewise convince people to sell when times are tough. I Think that's one aspect. I think considering or knowing the habits of investors has tended to work against them There are multiple studies that show that investors do tend to buy high and sell low

based on what the market's performing. So the setting and forgetting is usually a really good approach for a lot of people who struggle with that, where if you get anxious about the markets, whether on the upside or the downside, if you take us, and I always give the caveat that it has to be a good approach, you know, if you put your money on three, you know what I'm that's right. You don't have said forget a bad approach. That's right So you have to start from a good footing But if you take an approach that that considers risk and considers all the things that it should And you invest it and you said and forget it, you know, you take that long-term approach. That's gonna help tremendously

If you have that reference point as well And something that I've actually done from time to time and I'd like to do more consistently, if I ever write a book, it might even be on this topic, is having a diary of sorts where you reflect on the sort of sentiment, whether be yourself or in the market, on a recurring basis. You can really see how drastically the mood shifts from week week to week, it is phenomenal how quickly things can go from it's only up from here to the end of times is upon us. So you have to recognize the shortcomings and I think like to highlight the point of keeping things external, the more you can limit the opportunity to think too much about that stuff, I think the better.

No, you said all that well. It's interesting, I mentioned to Ben that I have a colleague and he does a very good job. When he has an extreme, extreme urge to buy into the market, he sells. And it's an extreme desire to sell, almost a panic. for example March 2009 she buys right and he's learned that your instincts if they're strong are almost always not just wrong but a hundred percent wrong and they're the ultimate signal to go against your gut feeling and to go the other way now again I've chosen examples where it worked out for him I'm not sure it does every time sure but in general he's probably got a better approach than most people because you're right we've

mastered the art of buying high and selling low. I think people are improving on that front. When you look at the younger generations, a lot of the people I'm dealing with and I'm helping a lot of them right now are quite good at the set it and forget it. They are putting a good portfolio together, a broad based index funds with low fees. They're not paying a lot of attention. They're going to leave it alone for 25, 30 years. They get the fact that when the market's struggling,

they're still in their buying with their dollar cost averaging, in fact if it struggles early in their period, they're probably benefiting from that. And so I think we're improving on that front, but it's tough and again, even I fall victim to all of this with all of my experience and knowledge, once your emotions are engaged, it's difficult, you have to somehow get detached.

I don't mean to be funny, go for a walk. Like if you're suddenly thinking of making a major move, go for a walk. Cool down, think it through. I love the diary idea and I think a geeky guy like you might do it, but I think the vast majority of people aren't going to do it. So we're just going to have to read yours. We'll read yours and maybe that'll help guide our moves. Okay, we're going to wrap up in the next few minutes, but is there any one bias that you also want to bring to the forefront? Kind of on the topic of influencers and the like, to tie it all together, one I really enjoy is framing bias.

Because I just think that when you get an idea of how framing bias is used, and again, it's something that the marketing industry has known for a long time. For sure. When you get an idea of how information being framed can alter how you interpret that information, I think that's very powerful to be aware of that.

And similar, it's either in that book or one of the other books. I can't remember. It might be Nudge even. It was in Thaler's first book too. That's right. You talked about it way back when. That's right. But in one of those two books, they

discussed the idea of presenting stats, whether it be on, say, a risky disease, where if you present something and say 1% of people, or you say 1 in every 100 people, those two stats elicit different responses from consumers. So someone who hears a percentage might not register how severe something is. So you'll often hear or it might be say one in 10 versus 10 percent. But when you highlight one in 10 people, it feels a lot more tangible. And you kind of register that to think, wow, one person

out of 10 people. Well, I know 10 people and imagine one of those people having this disease. So that's kind of on a public health standpoint. And that can be toward, and the whole point of the book Nudge is using behavioral shortcomings to benefit people with different policies and the like. So with health messages, using the right framing to better communicate the information, but that can be used against you. And I think when it comes to finfluencers, when it comes to marketing, being aware of how things are framed and kind of flipping that on its head and taking the other framing approach.

One, for example, that I highlight is how returns are presented. You'll often see traders say, if you earn just 1% a day using my trading program, or we can help you earn just 1% a day, it feels like a very tangible thing. Yeah. And doable. It sounds doable on the surface, doesn't it?

It sounds very doable. But when you calculate it, over time, if you took $10,000 and you earn 10% a day, I think you'd be joining the billionaire club in like five years, I think. No less. Just instinctively, I can tell you'd be less time than that. Three, yeah, two or three years. Yeah, you're right.

So it's that kind of idea of framing that really matters. 1% a day sounds reasonable 10,000 to a billion dollars doesn't sound reasonable, but they're the same stat So understanding that and how it's used against you and how When you recognize it, I think that's really powerful and it can help you sift through a lot of the quite frankly garbage You can come across My father's funny. He has a good understanding of a lot of this stuff and I was reading to me he said he's a sugar addict.

He's 92 and he's trying to get diabetes for 60 years and he can't get it. And he's just nuts. All he does is take in sugar and I said, Dad, I read a stat the other day that it's even worse for older people. It increases your risk of dying of a heart attack by 30% and his next question was, well, Google, what's my risk of dying by a heart attack at my age? So I did right away, and I said, it's at 5%. And he goes, oh, well, it's only 6.5% then.

Because that's not much. That's 1 in 16. Passed my donut. And that's framing, exactly. Yeah, it is. It's all about framing. Peter Jensen, the Canadian sports psychologist, talked about framing many years ago about how we all

have to learn to do it to stay more positive and optimistic. That there's ways to frame things in our own life in different contexts. And he's very good at that too. I love this one. You picked one that I've always been very drawn to and your examples are outstanding.

But I love the example of the 1% a day because you and I know it's silly, but the average person's gonna hear that and think, that 1% a day, that's not much much when you're trading I can do that and again That's if you did that for 30 years by the way, you'd own the world. Yeah Yeah, you'd be you'd be being Elon Musk for the title of richest person in the world and well, that's it when it comes to fin influencers and How you talked about that most people now understand the set and forget it approach again

I think that's a benefit that we've seen from influencers is that information has become a lot more readily available. And more people are up to speed on those kind of base level details because it's more widely available. And that's why I always try to give the caveat that it's not to say we shouldn't ban being able to talk about finance on social media. I think that would be detrimental because we've seen these benefits.

It's finding that balance there. And I think when you recognize framing buys, you recognize these things. I think it does help quite a bit. But it's an area that even for me, someone who just works in the industry, I just, same as you, I find it fascinating kind of learning about these shortcomings

and how they're used and how to utilize them even at times to your benefit. Yeah, and it's funny. I think it's another reason why keeping your financial approach relatively simple seems to work. The more complex it becomes, the more space there is for a lot of these biases to get involved and influence your decision making.

And I look at all these people who've handled their money well, it's remarkable how simple their financial plans are. I think Mark McGrath the other day put a tweet out saying, my wife and I have a joint checking account, one joint credit card, and it's automatic pay. And that's kind of how we do it. And I've always told people, just keep it simple. Do that kind of thing.

Don't have 12 credit cards and don't have all these accounts. You don't need to go down that path. And again, biases will leak in. OK, well, as we wrap up, it's a perfect time for you and I to announce our joint $3,000 course that's right to trade pork futures and make 2% a day the plain bagel the wealthy barber offering this is spectacular everybody in the world should be joining in and taking this anyone can you like yeah you were you were great I mean you were everything I

thank you to be I do want to get you back on to talk more broadly about, again, economics and finance and investing and all those types of things. We can bounce back and forth and that. So we'll reach out to you again. But thank you so much for finding the time to do this. You've been a real pleasure. Of course. Thank you for having me, David.

It was a true honor on my end. And thank you for reaching out. And yeah, it's been great. Very interesting conversation. Very happy to do it again sometime. OK. Thanks so much. Bye bye.