Latest / The Missing Middle Podcast / Dragon’s Den Legend Reacts To Today’s Squeezed Economy: Interview with David Chilton

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Dragon’s Den Legend Reacts To Today’s Squeezed Economy: Interview with David Chilton · The Missing Middle Podcast

0:00
SPEAKER_01: A lot of the younger generation is accused of overspending on traveling.
0:03
SPEAKER_01: But boy, it's better to spend on experiences than on stuff.
0:07
SPEAKER_01: We've got to make some changes to help the younger generations.
0:10
SPEAKER_01: And listen, if I had known that you were a Jay's fan and not a Stagers fan, I would not have done this interview.
0:15
SPEAKER_02: Hi everyone.
0:15
SPEAKER_02: Today we've got a special guest.
0:17
SPEAKER_02: We're happy to welcome financial advice guru David Chilton, author of The Canadian Classic, The Wealthy Barber, and former co-host of Dragon's Den.
0:26
SPEAKER_00: Classonomics, hosted by Sabrina Mado and Mike Moffat.
0:32
SPEAKER_02: Now, I remember reading The Wealthy Barber back in the 1990s when I was in my 20s and picking up some great advice.
0:38
SPEAKER_02: Now, David has an updated edition that came out last year, so we thought it'd be great to have him on and chat about how his advice for young people has changed over the past 40 years, particularly when it comes to younger people.
0:50
SPEAKER_02: So welcome.
0:51
SPEAKER_01: Thanks for uh being here today.
0:53
SPEAKER_01: It's great to be here, Mike.
0:54
SPEAKER_01: I'm a fan.
0:55
SPEAKER_01: I've followed you for quite some time.
0:57
SPEAKER_01: You are the best looking economist in Canada, and I'm drawn to you because of your outstanding hair.
1:04
SPEAKER_01: Well, well, well, thank you.
1:05
SPEAKER_01: Thank you.
1:08
SPEAKER_02: I appreciate that.
1:09
SPEAKER_02: My my goal in life is to either be better looking than any economist and uh a better economist than any good looking person.
1:17
SPEAKER_02: So that's uh the Derek Zoolander of economics.
1:23
SPEAKER_02: That's the that's the sweet stuff.
1:25
SPEAKER_02: We're gonna do kind of something fun.
1:26
SPEAKER_02: We're going to play back your your own words uh to you.
1:30
SPEAKER_02: Uh specifically, we're going to start by playing a clip of uh you talking to a friend of ours, a friend of the podcast, Steve Sareski, who you had on your podcast uh not too long ago.
1:40
SPEAKER_01: I I really wish that this hadn't happened on the affordability front, even rewriting The Wealthy Barber, you'd be amazed at how much harder it is to write that book now that such a percentage, high percentage of people's income is swallowed by their housing prices.
1:53
SPEAKER_02: When I first read The Wealthy Barber back in the mid-1990s, the one piece of advice that really stuck to me was the idea that you should save 10% of your income and invest it in long-term growth.
2:05
SPEAKER_02: And I still do that to this day.
2:07
SPEAKER_02: So, what about that piece of advice made writing the newest version harder this time?
2:12
SPEAKER_02: Well, it's getting the 10%.
2:13
SPEAKER_01: You know, the cost of learning, as you know, is so high.
2:17
SPEAKER_01: And the other thing is the ubiquitous availability of credit has made something very challenging.
2:22
SPEAKER_01: I can have people pay themselves first, the most important commandment and the wealthy barber, but still neutralize those savings by building up debt on the other side of the balance sheet, accessing lines of credit, overusing credit cards, et cetera.
2:36
SPEAKER_01: Remember when I wrote the original book back in 87, 88, it came out in 89, people carried one credit card, and often it had a max of$1,000.
2:44
SPEAKER_01: Lines of credit were not available to the vast majority of people.
2:48
SPEAKER_01: So people had mortgage debt only for the most part.
2:51
SPEAKER_01: Some people ran a credit card debt, but not as many as today.
2:54
SPEAKER_01: And so if you saved the 10%, if you paid yourself first, it came right off the top of the paycheck, you were in good shape.
3:00
SPEAKER_01: Again, very different circumstance now.
3:02
SPEAKER_01: Housing costs, a few have chronicled very, very well, have run way ahead of incomes.
3:07
SPEAKER_01: And I would argue other costs have too.
3:09
SPEAKER_01: I think the CPI doesn't fully capture at all what the costs have done to the average Canadian family.
3:15
SPEAKER_01: Younger families are up against it for the most part.
3:18
SPEAKER_02: Yeah, it's kind of an exercise I play with my dad uh sometimes of you know how his inflation rate is different than mine and you know would be different than my kids.
3:27
SPEAKER_02: My parents have a uh fully paid-off uh mortgage.
3:30
SPEAKER_02: So they don't have to not only worry about home prices, but they don't really have to worry about interest rates, or at least not in the same way I do.
3:37
SPEAKER_02: I've still got a mortgage, so you know, I don't worry about home prices, but I'm affected by uh interest rates, and then you know, somebody new on the market, you get hit both ways.
3:46
SPEAKER_02: So when you look at CPI, it is that kind of average of uh, you know, all of our expenditures, but you know, different points in your life cycle, you're gonna be hit differently by it.
3:58
SPEAKER_01: Well, I mean, look at the last year we had all these mortgage renewals, and a lot of people have seen their mortgage costs go up 25-30 percent.
4:05
SPEAKER_01: And again, if you don't have a mortgage, that hasn't come into your life at all.
4:08
SPEAKER_01: So those people's costs have gone flying.
4:10
SPEAKER_01: It's interesting, everything house related has gone up at a greater than CPI pace.
4:15
SPEAKER_01: So property taxes in most areas, insurance, obviously the cost of the home.
4:21
SPEAKER_01: But if you look at the general upkeep, if you look at major renovations, they've all gone up, especially since 2020, at faster than CPI rate as well.
4:30
SPEAKER_01: It is expensive to own a home.
4:32
SPEAKER_01: There's no question from every angle, it's very, very difficult.
4:35
SPEAKER_01: And the ripple effect of that, of course, is huge on society.
4:38
SPEAKER_01: You have lower savings rates, you have less money available to invest.
4:42
SPEAKER_01: And then, of course, we're seeing it affect how many kids people have.
4:46
SPEAKER_01: Constantly now, young couples are saying to me, we thought about three, we're now going two because of cost.
4:51
SPEAKER_01: We thought about two, we're now going one.
4:53
SPEAKER_01: Well, we were already up against it on the replacement numbers.
4:57
SPEAKER_01: And so the fact that this has compounded that challenge is not ideal, obviously.
5:02
SPEAKER_02: Back in the late 80s, early 90s, uh, when the first edition came out, uh, there was this term brain drain that was really in vogue.
5:09
SPEAKER_02: And it was mostly Canadians looking for economic opportunities and higher wages in in the US.
5:16
SPEAKER_02: But now we're starting to see, particularly after the pandemic, this brain drain pickup again of younger folks, but it seems to be more driven by affordability uh concerns and particularly house price concerns.
5:30
SPEAKER_02: So you talk so much about making the financially responsible choice.
5:33
SPEAKER_02: Is there a point where we get to this country, or or maybe if we even just look at the GTA where we say, you know what, the financially responsible choice is just not to be here anymore and to go somewhere more affordable?
5:45
SPEAKER_01: Yeah, I mean, you you've nailed it.
5:46
SPEAKER_01: Now, the good news is home prices in the GTA and parts of Ontario and parts of the country have come off as much as 25 and 30 percent in some instances.
5:54
SPEAKER_01: Rents, as you know, have been heading down over the last a little bit.
5:57
SPEAKER_01: We've had so many purpose-built rental units come on board, and that's helped on the supply front, but the general problem still exists.
6:04
SPEAKER_01: I mean, since I wrote the book, you've got home prices have risen three times faster than incomes.
6:10
SPEAKER_01: And so obviously that's put people up against it.
6:12
SPEAKER_01: Today's interest rates, four-ish percent, four point one percent on a five-year mortgage, are lower than they've been on average during that 35-year term, and that negates some of the pain, but not all of it.
6:22
SPEAKER_01: And of course, building the down payment is incredibly tough.
6:26
SPEAKER_01: And so I think what you're leading there to is we're seeing a bit of a brain drain from some of these centers where a lot of the better opportunities are, people are going elsewhere because that's what they can afford.
6:36
SPEAKER_01: And I mean, I'm seeing with some of the young people I know directly who are looking not to go to Toronto now.
6:40
SPEAKER_01: They love the lifestyle, they grew up there, they have a lot of friends there, but it's just so expensive they can't afford to live there.
6:46
SPEAKER_01: Or if they can, they can't live in the kind of house that they want to.
6:50
SPEAKER_01: They're gonna have to go in a high-rise condo for a family, which isn't ideal, instead of being in a detached home, which is what their dream was.
6:58
SPEAKER_01: And I think the reality is a lot of people are gonna have to start living with that kind of trade-off going forward.
7:04
SPEAKER_02: Yeah, no, I absolutely.
7:05
SPEAKER_02: Uh, but you know, even where we're from, southwestern Ontario.
7:08
SPEAKER_02: It's tough.
7:09
SPEAKER_02: You know, if you want a single detached home, you're you're you're looking at five, six hundred or seven hundred thousand.
7:14
SPEAKER_02: I I was always taught that you know, never buy a home that's three times uh greater than than your income now.
7:20
SPEAKER_02: Well, you've got to be making quite a bit, even even in kind of some of these secondary markets to you know hit that 3x threshold.
7:27
SPEAKER_01: No, you're exactly right.
7:28
SPEAKER_01: And the numbers you're using, the six, seven hundred thousand, you know, you can go into some of the centers like Byron and get a relatively small house right now for$600 and$650,000.
7:37
SPEAKER_01: But if you're using the three times multiple, you're still looking at a family income need of over$200,000.
7:42
SPEAKER_01: That means two teachers don't quite get there in many instances.
7:46
SPEAKER_01: And this is not something we've seen before.
7:48
SPEAKER_01: I mean, it is very, very challenging.
7:50
SPEAKER_01: And remember, all the other costs I mentioned with home ownership have risen at a greater than CPI pace, and so have many other costs in life.
7:57
SPEAKER_01: You know, it's it's funny.
7:58
SPEAKER_01: You understand this intuitively, you're an economist for heaven's sakes, and you're a PhD.
8:03
SPEAKER_01: But it's amazing to me how many people struggle with the fact that when inflation comes back under control, so let's say we got it down to 1.5%.
8:11
SPEAKER_01: We haven't, but just let's say we did.
8:13
SPEAKER_01: That doesn't solve the problem of high prices.
8:17
SPEAKER_01: The prices have risen dramatically over the last five years.
8:20
SPEAKER_01: They're not going down, they're just going up at a much slower pace.
8:22
SPEAKER_01: And again, for people like you and me, we understand that intuitively, but a lot of people don't seem to grasp that.
8:28
SPEAKER_01: They'll say, Oh, inflation's under control.
8:30
SPEAKER_01: But high prices are still there.
8:32
SPEAKER_01: Incomes for the most part haven't kept up.
8:35
SPEAKER_01: Now we're running into some economic challenges with the tariffs and everything else.
8:39
SPEAKER_01: It's very, very tough.
8:40
SPEAKER_01: And a lot of families are we now, a lot of families are doing well.
8:43
SPEAKER_01: In fact, it's interesting as I put the book together and did all the pre-writing research, I was amazed how tough it was to kind of put people in buckets and speak to them.
8:53
SPEAKER_01: Everybody's situation seems so different.
8:55
SPEAKER_01: Some people have parents helping out, grandparents helping out, some people don't live in the big centers, some people have one good income to you.
9:03
SPEAKER_01: It's really tough.
9:04
SPEAKER_01: One of the things the wealthy barber really helped me with, I had multiple characters in the barbershop.
9:09
SPEAKER_01: And that let me cover off a number of different scenarios because we're all so so different.
9:13
SPEAKER_01: Now I'm jumping all over the place, but I I want to talk about a point per second that you brought up.
9:18
SPEAKER_01: It did an excellent job on your podcast when you tried to address why aren't the builders building smaller homes?
9:26
SPEAKER_01: So if there's a marketplace for that, why aren't we servicing it?
9:30
SPEAKER_01: That's normally what you see in capitalism, and you nailed it, the math doesn't work.
9:34
SPEAKER_01: And it's because of the stubborn land costs, especially, but there are other factors too, the construction costs, like everything, but the stubborn land costs have been a big part of it.
9:44
SPEAKER_01: You have to amortize the cost of land over X amount of square foot and a high enough price to get back the investment you put in.
9:52
SPEAKER_01: And so we're really in a bit of a tough spot here.
9:54
SPEAKER_01: And the good news is again, it's a less tough spot than it was a year or two and three ago because prices have come down a bit.
10:01
SPEAKER_02: Yeah, we we have seen those land costs uh come down and we're seeing you know governments try and get some of those taxes like development charges down.
10:08
SPEAKER_02: Yes.
10:09
SPEAKER_02: You know, I remember talking to some policymakers uh a few years ago, and uh, you know, they're saying, well, you know, what if we uh you know got a little bit more innovation, got more productive on home building?
10:19
SPEAKER_02: I said, I'm all for that.
10:21
SPEAKER_02: But you know, if we look at large parts of southwestern Ontario or eastern Ontario for that matter, you you could have a genie that you know, you rub a lamp, have a genie.
10:33
SPEAKER_02: It could construct the home for free.
10:35
SPEAKER_02: A lot of people still couldn't afford it because they couldn't afford the land costs and the development charges, right?
10:39
SPEAKER_02: So I think it's understanding all of those cost components I think is important.
10:44
SPEAKER_01: And I think over the next little while, we'll look at ways to mix modular home building with conventional home building, anatomy homes, and others are looking into all of those things.
10:53
SPEAKER_01: But to your point, that's only one component of the total cost.
10:56
SPEAKER_01: The development charges, the land, all of these things come into play.
11:01
SPEAKER_01: Fortunately, rates are still relatively low, but it's really difficult out there again for younger people.
11:06
SPEAKER_01: And imagine if you're single right now, so you've decided not to take on a romantic partner and you really want to own your own home, you're happy to own something relatively small.
11:15
SPEAKER_01: Well, good luck putting together the down payment.
11:17
SPEAKER_01: I mean, that is very difficult.
11:19
SPEAKER_01: Can you imagine on a single income you're trying to save 20% of that$600,000 we mentioned?
11:24
SPEAKER_01: So you're trying to save$120,000 after tax off a single income in a high cost environment that we're facing now.
11:32
SPEAKER_01: Very challenging indeed.
11:33
SPEAKER_01: You can see why I said in the redo of The Wealthy Barber, the most important personal finance advice now is choose your parents wisely.
11:40
SPEAKER_01: Okay, that has become way too, and we don't want a country where that is the most important.
11:45
SPEAKER_01: So I say it somewhat jokingly, but sadly there's an element of truth to it.
11:49
SPEAKER_02: Yeah, no, it really is.
11:50
SPEAKER_02: And it does feel like we we're moving to kind of a almost a dynastic uh society that that way, where you know, your ability to own property is a a function of who your parents uh are.
12:02
SPEAKER_02: And we we look at those, you know, the those costs, and you know, I'm really appreciative that you brought up the kind of winners and and losers.
12:09
SPEAKER_02: I'm one of the big winners in this, at least directly.
12:12
SPEAKER_02: Uh, you know, I worry a lot what this means for my two kids.
12:15
SPEAKER_02: But I've uh had uh years where my home has made more than I have.
12:21
SPEAKER_02: And when it comes to home, like it's it's housing, but it's also this kind of strange, you know, forced savings vehicle.
12:29
SPEAKER_02: And it's one of the reasons why my parents would often tell me, you know, buy a home because uh you can live it and save at the same time.
12:36
SPEAKER_02: Does that advise still hold today?
12:39
SPEAKER_01: Sure, there's lots of truth to that.
12:40
SPEAKER_01: I mean, it is great for savings, there's no doubt about it.
12:43
SPEAKER_01: I mean, you have to make the mortgage payment or the bank gets very annoyed.
12:46
SPEAKER_01: And so people say I'll rent and I'll invest the difference, but we don't always invest the difference.
12:50
SPEAKER_01: It's tempting to go on the trip and do other things, especially again in a high cost environment.
12:55
SPEAKER_01: And of course, we have the tax-free capital gains on sale later in life.
12:59
SPEAKER_01: If the house has gone up dramatically and you choose to move down or you choose to rent or you choose to use a reverse mortgage, there's all kinds of equity there that can do wonderful things, and again, untaxed if you sell.
13:09
SPEAKER_01: So there's lots of merit to owning a home.
13:11
SPEAKER_01: And I think for a lot of people, psychologically, it's very important.
13:14
SPEAKER_01: Research says more so for women.
13:16
SPEAKER_01: I don't know if that's always the case, but certainly on average it seems to be.
13:20
SPEAKER_01: But I think for a lot of us it is.
13:21
SPEAKER_01: We want our kids to have a yard.
13:23
SPEAKER_01: I have a dog, and so owning your own home gives the dog more access to a yard, et cetera, et cetera.
13:28
SPEAKER_01: So I think for most people it's still important.
13:30
SPEAKER_01: In fact, interestingly, we think times have changed so much.
13:33
SPEAKER_01: But when I did all the pre-research for the redo of The Wealthy Barber, I had almost the exact same percentage of people want to own a home than did back in the 80s, and 80 to 90 percent of them wanted to own a detached home.
13:47
SPEAKER_01: So nothing had changed on the desire front from when I wrote the book almost 40 years ago.
13:53
SPEAKER_01: The reality is though, it's more challenging now.
13:55
SPEAKER_01: It really is.
13:56
SPEAKER_01: I'm very sympathetic, as you know, if you've read the new book or seen me on podcast to the challenges that young people are dealing with.
14:03
SPEAKER_01: But there is one oddity I see where I just shake my head.
14:07
SPEAKER_01: That same group, people talk about them spending too much on travel, et cetera.
14:10
SPEAKER_01: Some do, some don't, like we did.
14:12
SPEAKER_01: I mean, everybody makes mistakes with their spending.
14:15
SPEAKER_01: But boy, a high percentage of them, not over half, but too high a percentage, spend too much on cars by any common sense measure.
14:24
SPEAKER_01: So even though they've got a great case to be made for the fact that homeownership is unfairly expensive now, man, oh man, you don't have to spend as much on cars as so many younger people do, often two good cars in one family, et cetera.
14:36
SPEAKER_01: Now, I recognize that cars in general are expensive now.
14:39
SPEAKER_01: All cars have risen a lot in price, especially since 2020.
14:43
SPEAKER_01: But that's one area where people have to do a better job of staying on top of their money.
14:48
SPEAKER_01: You know, as you know, I'm a huge fan of spending summers, where people chronicle every dime that leaves their life over a three-month period.
14:57
SPEAKER_01: What a great learning experience.
14:58
SPEAKER_01: Nothing can shine a light on more where the leaks are, but also where are you getting proper joy back for the money you're spending.
15:05
SPEAKER_01: So for all younger people, I advocate doing that.
15:08
SPEAKER_01: But again, it doesn't solve the problem that things are very expensive up there.
15:12
SPEAKER_02: Yeah, it really doesn't.
15:13
SPEAKER_02: At least nowadays, you know, there are apps uh to help you uh with it with that.
15:18
SPEAKER_02: So, you know, not not not all progress is uh leading us to necessarily borrow and and and spend more money.
15:25
SPEAKER_02: There, you know, there has been at least some progress.
15:27
SPEAKER_02: So I'm gonna ask a question about uh I'll give you kind of a case uh study here.
15:32
SPEAKER_02: So let's say you've got uh a young uh renter who's decided, you know what, home ownership is isn't for me.
15:39
SPEAKER_02: I don't like the kind of roller coaster up and down, I don't think I'm gonna be able to uh afford a down payment.
15:45
SPEAKER_02: What should they be doing on the spending side or not doing?
15:48
SPEAKER_02: Where do you see them making mistakes?
15:50
SPEAKER_02: And two, how can they build up the kind of financial security with not having the forced uh savings of homeownership?
15:58
SPEAKER_02: You know, how can they build decent financial security?
16:02
SPEAKER_01: You know, it interestingly, it's very possible.
16:04
SPEAKER_01: In fact, you can make a fairly compelling argument right now in certain parts of Canada, you're better mathematically to rent, but you have to have the discipline to take the difference between the overall cost of homeownership, not just the mortgage, but the property taxes, everything else that you have to add in and the rent, and you have to set it aside and invest it for long-term growth.
16:25
SPEAKER_01: And you have to more or less match expected market returns.
16:29
SPEAKER_01: So if you think that the broad market averages are going to average seven to eight percent, you have to capture that, meaning you can't have a lot of high-cost products in your portfolio.
16:38
SPEAKER_01: If you can do that, Ben Felix and other very sharp people, in fact, a couple of good researchers in the States have said you may well end up ahead of the game.
16:47
SPEAKER_01: And I am seeing more people think that way.
16:49
SPEAKER_01: If they want zero or one child, they're thinking, do I want the hassles of home ownership?
16:55
SPEAKER_01: I may be willing to rent instead.
16:57
SPEAKER_01: Maybe I'll rent a small home, maybe I'll rent a larger size condominium.
17:01
SPEAKER_01: I like the flexibility it gives me.
17:03
SPEAKER_01: I don't have to take care of things.
17:04
SPEAKER_01: I don't have to remove the snow and do the lawn work.
17:07
SPEAKER_01: I can take off and do a little travel that may match up to their job.
17:11
SPEAKER_01: But it's important to remember that as positive as that sounds, almost the same number of people want to own a home now they did 40 years ago, as I mentioned earlier.
17:20
SPEAKER_01: So that group is maybe getting a little bigger, but not dramatically bigger.
17:24
SPEAKER_01: Most younger people still want to own a home.
17:27
SPEAKER_01: And if they're going to have a traditional relationship, marriage, et cetera, or common law and they want to have kids, they really do want a detached home in most cases.
17:35
SPEAKER_01: You ask what else am I seeing some careless spending on?
17:38
SPEAKER_01: I would say two things interestingly.
17:40
SPEAKER_01: A lot of the younger generation is accused of overspending on traveling.
17:44
SPEAKER_01: But boy, it's better to spend on experiences than on stuff.
17:47
SPEAKER_01: And they benefit dramatically from that.
17:49
SPEAKER_01: And I'll tell you, are they ever good at traveling cost effectively?
17:53
SPEAKER_01: It's part of the younger people's culture.
17:56
SPEAKER_01: I'm amazed when they show me their spending summaries and some of the trips they've taken relatively cheaply.
18:01
SPEAKER_01: And again, they get a lot of knowledge from those trips, a wonderful experience, bonding with whomever they're traveling with, they're doing it in their early 20s.
18:09
SPEAKER_01: I get it.
18:10
SPEAKER_01: So I'm I'm actually quite supportive of that one for the most part.
18:13
SPEAKER_01: They are doing a good job and watching their spending on meals out.
18:17
SPEAKER_01: Obviously, younger males are gambling too much.
18:19
SPEAKER_01: In fact, the data is starting to get borderline scary on how much males under 35 are spending on gambling right now, and it really is wreaking havoc on their finances.
18:31
SPEAKER_01: So females tend not to fall into that trap nearly as much.
18:35
SPEAKER_01: I mean, way lower.
18:36
SPEAKER_01: I'd say 5% versus 95%.
18:38
SPEAKER_01: But a lot of the people I run into, interestingly, are doing a pretty darn good job with their finances.
18:43
SPEAKER_01: You know, you mentioned the apps.
18:44
SPEAKER_01: Again, the problem isn't lack of discipline, it's income relative to expenses.
18:49
SPEAKER_01: And they don't have full control over that.
18:51
SPEAKER_01: And obviously expense costs just keep running hot.
18:54
SPEAKER_01: So I think there are ways if you rent to do very well, but it does require the discipline.
18:58
SPEAKER_02: Yeah, it really uh really does.
19:00
SPEAKER_02: And yeah, I've I've you know I often feel that that young people uh you know are unfairly uh maligned uh by their by their spending habits.
19:09
SPEAKER_02: You know, there's more temptations than than there used to be.
19:12
SPEAKER_02: And I just you know, I remember all the stupid stuff I uh bought in in my 20s.
19:16
SPEAKER_02: Now part of that was a lack of of options.
19:19
SPEAKER_02: You know, I I used to spend 100 to 200 bucks a month on on CDs.
19:22
SPEAKER_02: I didn't know.
19:23
SPEAKER_01: Well, just think about how much money you have spent on hair care products, Mike.
19:26
SPEAKER_02: I mean, there you go.
19:28
SPEAKER_01: We're talking tens of thousands of dollars here.
19:30
SPEAKER_02: So I mean, but but you've got your money's worth.
19:33
SPEAKER_02: I figured a capital uh investment.
19:35
SPEAKER_02: And once I figure out how to write it off of my taxes, I'll be happy.
19:39
SPEAKER_02: That's it.
19:39
SPEAKER_02: Unfortunately, Canada's put countervailing tariffs on hair care products.
19:44
SPEAKER_02: So my my personal CPI might be going up uh a little bit uh this this month.
19:50
SPEAKER_01: You mentioned something there that we should explore a little bit, and that is that there's so much more temptation out there because of the online world, but also there's so much less friction.
19:59
SPEAKER_01: You can just tap when you're anywhere, you can just one click online.
20:04
SPEAKER_01: Friction was our friend, not our enemy.
20:08
SPEAKER_01: The tech industry brags about taking it out of our life, but it was better when it was in it.
20:12
SPEAKER_01: It slowed us down.
20:14
SPEAKER_01: And one of the things I preach now is to inject that 24 hours before making any kind of significant expenditure.
20:20
SPEAKER_01: When you do, in most cases, you forget about it.
20:23
SPEAKER_01: You don't just decide against it, you forget about it.
20:25
SPEAKER_01: It's interesting with the redone book, chapter nine, which is on saving savvy, all kinds of tips that I've learned over the years from watching adept people, what they do to save more efficiently, that's been the most well-received chapter in the book.
20:39
SPEAKER_01: So I thought for sure it would be pay yourself first, compounding, how to get out your TFSA versus RSP.
20:45
SPEAKER_01: Chapter nine has been the number one chapter for feedback because again, it's such a struggle to save now.
20:51
SPEAKER_01: And so if you can pick up some tips on how to avoid giving into that temptation, it's absolutely crucial.
20:57
SPEAKER_01: I preach this, nobody listens to me, but using cash is still a wonderful way to go.
21:02
SPEAKER_01: You know, if instead of using credit cards, you force yourself to see the money leaving, you feel the pain, you realize it's finite, it slows you down, all those things are positive, but I've learned not many people are going to go that route.
21:15
SPEAKER_02: Well, I'm someone who does that as kind of a uh believer in behavioral economics.
21:20
SPEAKER_02: And I will tell you that the the cost to that isn't so much uh you know uh getting that money or whatever.
21:26
SPEAKER_02: You you do get some some eye rolls, uh particularly from younger generations.
21:30
SPEAKER_02: No question.
21:31
SPEAKER_02: You know, speaking of the kind of habits of Gen X and boomers, I find one of the challenges uh I have uh with with dealing with the housing crisis is that older generations, you know, understandably see some of these issues as zero sum of well, if younger people want cheaper homes, that's going to mean my home value goes down.
21:53
SPEAKER_02: So, like, how do we navigate that?
21:55
SPEAKER_02: And particularly how can we convince boomers and and even gen.
22:00
SPEAKER_02: Actors like me that that's a necessary thing to do, and you know, not just telling millennials and Gen Z, you know, knock it off with the avocado toast, and that will solve everything.
22:09
SPEAKER_01: Yeah, you know, that part of the wealthy barber really went over well.
22:12
SPEAKER_01: One of the characters says, What about this housing crisis?
22:15
SPEAKER_01: And Roy says, What housing crisis?
22:17
SPEAKER_01: My house has gone dramatically up in value.
22:19
SPEAKER_01: That's not a crisis, that's a windfall.
22:21
SPEAKER_01: And so once a person crisis is another person's windfall.
22:24
SPEAKER_01: And I mean, Roy literally goes through and talks to the various characters in the barber shop who already own a home, and they're saying, Yeah, we'd love to have a cheaper home for kids as long as it's not our house.
22:33
SPEAKER_01: So to your point, there's a trade-off here.
22:36
SPEAKER_01: We, if we have lower priced housing for the younger generation, that means that those of us who are a little bit older have to accept less back in return for our home when we go to sell it.
22:45
SPEAKER_01: Interestingly, I don't find that the media has this right.
22:49
SPEAKER_01: I find most boomers are okay with that.
22:51
SPEAKER_01: I really do.
22:52
SPEAKER_01: When I've had one-on-one discussions with people, they're sympathetic.
22:55
SPEAKER_01: They have kids, they have grandkids.
22:58
SPEAKER_01: They want those people to be able to get into the housing market at an affordable level of their income.
23:02
SPEAKER_01: And so if they have to take a little less for their house, they will.
23:06
SPEAKER_01: It'll be interesting as Steve Soretsky and others have pointed out.
23:09
SPEAKER_01: Folk, what's going to happen 10, 15 years down the road is all the baby boomers go to sell their homes.
23:14
SPEAKER_01: If they try to maintain these types of price levels, or for whatever reason they are maintained, let's say interest rates are lower, foreign buyers, whatever, how are people going to be able to afford to buy them in the numbers that they're going to come to the market?
23:26
SPEAKER_01: So all of that's going to be fascinating to watch.
23:28
SPEAKER_01: But in general, when the media says that boomers don't want the price of their homes to fall at all, well, of course, nobody really does.
23:35
SPEAKER_01: But when they think through the fact that it's better for the younger generations, I've actually found them pretty cooperative on that part, on that front, and fairly open-minded.
23:42
SPEAKER_02: Yeah, I have too, and I think politicians might overestimate uh that.
23:48
SPEAKER_02: And, you know, I know uh an anecdote isn't uh, you know, quite the same as uh, you know, a scientific uh poll.
23:55
SPEAKER_02: But I remember uh back in the 2021 election, uh a friend of mine, uh, a member of parliament, uh, was running for re-election.
24:02
SPEAKER_02: He said, Mike, it was the most remarkable thing that you know, I've been knocking on doors, my volunteers have been knocking on doors and you know, asking people what the what their issues are, what they're interested in.
24:13
SPEAKER_02: This was 2021.
24:14
SPEAKER_02: So this is when you know home prices were particularly spiking up.
24:17
SPEAKER_02: He said, you know, I'm getting an earful at the door about housing prices.
24:21
SPEAKER_02: I said, Oh, well, that's not surprising.
24:22
SPEAKER_02: He goes, Yeah, but here's the surprising thing.
24:24
SPEAKER_02: The people I talk to who are angriest about it are not people in their 20s, that they actually seem kind of resigned to their their fate almost.
24:32
SPEAKER_02: Like they're they're they're they're disappointed, they're upset, but they're not necessarily angry for the most part.
24:38
SPEAKER_02: He says, the the group I find angriest are moms in their 50s, uh, usually who have a 20-something living in their basements that they would like to sort of uh you know see fly away, you know.
24:52
SPEAKER_02: And many of them would say, like, well, at first, you know, I just thought my my son or daughter was was lazy, not trying hard enough.
24:58
SPEAKER_02: And then I started to do the math with them.
25:00
SPEAKER_02: I sat down with them and realized, no, this truly is broken.
25:04
SPEAKER_02: So I do think there is, I I do think uh yeah, I can't speak for the boomers, but I will say I do think Gen X is sometimes unfairly uh maligned.
25:13
SPEAKER_02: Uh, and I think many of us do understand that home prices need to go down.
25:17
SPEAKER_01: No, that that is a great anecdote and very much matches up to my experience with both Gen X but also the boomers, that when they think it through and you have a good conversation, they're very, very aware that this isn't particularly fair to younger people and some sacrifices have to be made.
25:32
SPEAKER_01: So if policies come in that knock the value of their home down, I think they'll accept that better than you think, especially if it's well positioned and well explained by politicians.
25:41
SPEAKER_01: Now, on the other hand, if you go to boomers and try to take any of their OAS away beyond the current clawback rules, that is not well received.
25:50
SPEAKER_01: Okay, that one is not well received at all.
25:53
SPEAKER_01: And so again, you have to pick your poison here when you're politicians on where do we want to try to even up things and help the younger generations because a lot of this, and I mean, this is the theme you've been hitting over and over again, is we've got to make some changes to help the younger generations.
26:08
SPEAKER_01: And for the most part, it's not a sum zero game, but that could involve some sacrifices from older people.
26:15
SPEAKER_01: And how do we share those sacrifices to make sure that the people who are older but in trouble aren't hit at all?
26:22
SPEAKER_01: And instead it's others, and then people start talking about redistribution and you're taxing the rich too much, et cetera, et cetera.
26:28
SPEAKER_01: All of this is very tricky stuff.
26:30
SPEAKER_01: I wouldn't want to be a politician in today's times, by the way.
26:33
SPEAKER_01: Oh my gosh.
26:34
SPEAKER_02: Yeah, I totally agree.
26:36
SPEAKER_02: I would not want to be a a politician uh right now, agree with that, and I also agree about the kind of third rail nature of of OAS, because we we hear it uh here.
26:46
SPEAKER_02: When you wrote the first edition in 1989, you know, there was kind of a throughout the book indications of like, hey, if you do the right thing, if you save and invest early, uh, you know, here are the types of things that you can reasonably expect in your life.
27:01
SPEAKER_02: You could get like an annual vacation, a nice car, a comfortable home, early retirement, you know, the ability to give kids what they need and want, and baseball seasons tickets.
27:12
SPEAKER_02: And I'm a huge baseball guy, so that's near and dear to my heart.
27:16
SPEAKER_02: Does that list still apply today, or would we have to amend that?
27:20
SPEAKER_01: Well, I mean, first off, I don't think even I, the author of the first book, thought it would work out that well.
27:25
SPEAKER_01: I mean, obviously the markets were so strong, both the real estate markets and the stock markets, with exceptions, with pullback, but for the most part, so magnificent in terms of returns that anybody who read The Wealthy Barber in the 80s and 90s and followed to Vice did very, very well.
27:39
SPEAKER_01: Not because the wealthy barber's so smart, just because the markets were so supportive.
27:44
SPEAKER_01: I think if you do those same things now, you can't count on the same market returns.
27:49
SPEAKER_01: Real estate had an unbelievable run because interest rates, as you know, fell you know significantly over 35-year period.
27:55
SPEAKER_01: And of course, the stock market returns have been robust.
27:59
SPEAKER_01: And precisely because they've been so strong, valuations are now stretched and future performance may not be as good.
28:05
SPEAKER_01: So I think that the techniques will still work.
28:08
SPEAKER_01: Will they work as well going forward?
28:11
SPEAKER_01: I would say the odds don't favor it, but that makes it even more important that you save the appropriate amount, the 10 to 15 percent, because you may not have as strong a returns backing you up.
28:21
SPEAKER_01: And again, how do you save the 10 to 15 percent of your income when you have so much going to housing costs, school costs?
28:28
SPEAKER_01: You know, something nobody ever talks about, which I find very interesting, is we have a lot of wealthy people now.
28:33
SPEAKER_01: And a lot of the wealthy people, especially stateside, but Canada too, are really wealthy.
28:38
SPEAKER_01: And people are also willing to spend a crazy amount on the things they're passionate about.
28:43
SPEAKER_01: So what you've seen with inflation in concert tickets, live sporting events, et cetera, is crazy.
28:49
SPEAKER_01: And what's happened is the middle income person has almost been priced out of those, or if she or he wants to go to them, it is a major expense now.
28:59
SPEAKER_01: I mean, it's one that actually impacts their financial planning.
29:02
SPEAKER_01: So all of this is tricky too.
29:04
SPEAKER_01: That wealth divide, again, is having spin-off effects that are quite dramatic in terms of costs of certain areas, spending.
29:12
SPEAKER_01: I see it right now when I'm traveling.
29:14
SPEAKER_01: A lot of the high-end restaurants are doing exceptionally well.
29:18
SPEAKER_01: But a lot of the middle and lower end restaurants aren't doing as well.
29:22
SPEAKER_01: It all ties into what income levels you're servicing.
29:25
SPEAKER_01: So it's a fascinating time in history right now, and of course, we'll get more so with AI coming on and about to impact society on many, many levels.
29:33
SPEAKER_02: Yeah, you know, it really does seem that way that uh, you know, rich people are able to, you know, buy more of uh, you know, baseball tickets and things like that.
29:42
SPEAKER_02: The Rogers Center has significantly fewer seats than it used to have, you know, more boxes and things like that.
29:48
SPEAKER_01: Uh, from London, are you a Jays fan or a Tigers fan?
29:53
SPEAKER_02: So I'm a Jays fan now.
29:55
SPEAKER_02: I actually grew up uh a Montreal Expos fan uh because I got I got into baseball uh just young enough before the Jays were good.
30:05
SPEAKER_02: So, you know, I'm from that uh Dawson Reigns uh card at the time.
30:09
SPEAKER_02: But yeah, uh but huge uh baseball fan.
30:12
SPEAKER_02: I mean, how could you not be growing up in southwestern Ontario?
30:16
SPEAKER_02: You know, you had uh Tom and Jerry with the Jays, you had Ernie Harwell with the Tigers.
30:23
SPEAKER_02: There was always so much uh to listen to.
30:25
SPEAKER_02: So I gotta ask, you're from Sarnia, uh Jays or uh Tigers?
30:29
SPEAKER_01: Listen, if I had known that you were a Jays fan and not a Tigers fan, I would not have done this interview.
30:34
unknown: Okay.
30:34
SPEAKER_02: My brother-in-law from Bright's Grove is a Tigers fan.
30:38
SPEAKER_01: I have to deal with this almost every day.
30:41
SPEAKER_01: One of my hometowns.
30:42
SPEAKER_01: And I'm a Detroit Lions fanatic.
30:44
SPEAKER_01: Like I hate to say this, but I care more about the Lions than I do about my family.
30:48
SPEAKER_01: But here's the good news my family cares more about the Lions than they do about me.
30:52
SPEAKER_01: So we're all working on an even playing field here.
30:54
SPEAKER_01: No, we're big Detroit sports fans to the nth degree, actually.
30:58
SPEAKER_01: And uh obviously they've collapsed in baseball recently, but the Jays have come on and have a very good chance to make the playoffs again.
31:04
SPEAKER_02: Well, and uh, as a Lions fan, I think you then understand the suffering that young people are going through.
31:09
SPEAKER_01: Uh exactly.
31:12
SPEAKER_01: I said to my father, I said to my dad, he's he's 93.
31:16
SPEAKER_01: And I said, Dad, if you could go back and you know, you tell your 20-year-old self something, what would you tell them knowing what you do now?
31:22
SPEAKER_01: And his answer was classic Bob Chilton.
31:25
SPEAKER_01: He said, Don't be a Lions fan and eat more eat more shepherd's pie.
31:30
SPEAKER_01: Those were his two pieces of advice.
31:31
SPEAKER_01: Don't be a lions fan and eat more shepherd's pie.
31:34
SPEAKER_01: So everybody out there listening to this, write those two down.
31:37
SPEAKER_02: Yeah, you got you got good advice from your dad.
31:40
SPEAKER_02: Um, I want to go back to something uh you said before we started uh talking about baseball.
31:44
SPEAKER_02: You mentioned how difficult uh the environment is uh to invest in these days.
31:50
SPEAKER_02: You know, stock market looks overvalued.
31:53
SPEAKER_02: Uh, you know, we had this massive run on real estate that's probably not there.
31:57
SPEAKER_02: How should you invest these days?
31:58
SPEAKER_02: And in a particular, you know, one of the pieces uh of advice uh you've you've given in the book is you know to uh work with a financial planner, but you've got a lot of people doing the opposite, going, well, well, look, that's gonna eat into some of my profits.
32:13
SPEAKER_02: And nowadays we have low uh uh margin uh expense ratio ETFs.
32:20
SPEAKER_02: Does that advise still hold today or you know, uh about using a financial planner, or would younger people just be better off parking their money in in a handful of ETFs?
32:30
SPEAKER_01: You know, I think younger people, for the most part, are better just to use the low-cost DN ETFs, the all-in-one asset allocation funds.
32:37
SPEAKER_01: I mean, you can get them for 25 basis points or fewer basis points per year.
32:41
SPEAKER_01: That's tremendous.
32:42
SPEAKER_01: You get the built-in diversification.
32:44
SPEAKER_01: And again, how would you invest?
32:45
SPEAKER_01: I'd invest in the same way I taught 34 years ago.
32:48
SPEAKER_01: You're dollar cost averaging into equities, you're gonna have some tough times, you're gonna have some prolonged downturns, but that's fine.
32:54
SPEAKER_01: You're still in there buying on an ongoing basis on a monthly basis.
32:57
SPEAKER_01: You're worried about long returns, 10, 20, and 30 years down the road.
33:01
SPEAKER_01: So even though the markets are a little rich now on the valuation front, I wouldn't pay much attention to that.
33:06
SPEAKER_01: In fact, in general, one of the things I preached aggressively is don't pay attention, period.
33:10
SPEAKER_01: Just make the bet on human creativity and ingenuity, and then over the long term, capitalism is going to win out, and many companies will proster, many will not.
33:19
SPEAKER_01: But overall, the returns will be quite satisfactory, and you just focus very long term.
33:24
SPEAKER_01: People like my father have been very good at that, he pays no attention and has done very, very well.
33:29
SPEAKER_01: So I do think these low-cost products, the ETFs, are worth a look see.
33:33
SPEAKER_01: Now, later in life, as people are 50, 55, they're looking at retirement planning, decumulation, estate planning, I think financial expertise is needed.
33:42
SPEAKER_01: And at that point, you often need to sit down with a financial planner.
33:45
SPEAKER_01: It can be an advice-only planner, it can be somebody who's very competent and has the CFP and does AUM.
33:51
SPEAKER_01: So at that point, the advice is a little bit different.
33:53
SPEAKER_01: But I think for younger people, keep it simple, keep your costs low, dollar cost averaging, and automate everything.
34:01
SPEAKER_01: That's the key is to get it off the top of the paycheck or directly out of the bank account before you have an opportunity to blow it.
34:09
SPEAKER_01: And I think, you know, if I look at my career, I'd say the big impact has been the pay yourself first.
34:15
SPEAKER_01: It's getting people convinced that if they take it off the top of the paycheck or directly out of the bank account, they won't miss it that much.
34:22
SPEAKER_01: They won't scrub because it's automated.
34:24
SPEAKER_01: That still to this day is the biggest message I push.
34:28
SPEAKER_02: I I think that's fantastic.
34:30
SPEAKER_02: Uh and you know, are there any other pieces of advice from 1989 that you go, you know what, this still holds up today.
34:37
SPEAKER_01: Yeah, I think a lot of the advice in there and the way to think through your spending, I've still incorporated this book with a lot more beyond that.
34:43
SPEAKER_01: But I think a lot of the common sense advice, like buying a smaller home than you can afford or that you can qualify for, is still very good advice.
34:52
SPEAKER_01: Now, some people are watching and saying, Dave, had you bought the biggest home possible, it's gone up even more on an absolute basis.
34:58
SPEAKER_01: And of course, you've got tax-free capital gains, true.
35:01
SPEAKER_01: But it's also had a lot of side costs that have hit into your cash flow.
35:05
SPEAKER_01: It's had higher property taxes, higher insurance, higher hassle factor, and everything else.
35:09
SPEAKER_01: It's interesting.
35:09
SPEAKER_01: You go way back to The Millionaire Next Door, that famous book that has stood the test of time to the nth degree.
35:15
SPEAKER_01: That's one of the fundamental principles.
35:17
SPEAKER_01: Buy a relatively small house compared to your income.
35:20
SPEAKER_01: Keep it simple, keep your costs low.
35:23
SPEAKER_01: That tends to lead to more happiness, not just better financial results, but more happiness.
35:28
SPEAKER_01: You know, I think that the biggest thing I've learned doing this for 40 years is that people who are on top of their finances are happier.
35:35
SPEAKER_01: They're less stressed.
35:36
SPEAKER_01: There's a feeling that if you actually save money and make sacrifices, you'll be less happy, you'll be doing less, you'll be less fun with your buddies, et cetera, et cetera.
35:44
SPEAKER_01: It's not the case.
35:45
SPEAKER_01: When people get on top of their finances, they pay off non-deductible debt, they're building towards their future, they're less stressed, they're happier, they're just feeling better about things.
35:55
SPEAKER_01: Well, we still don't do a good job of teaching it in the education system.
35:58
SPEAKER_01: That's why books like The Wealthy Barber are important.
36:00
SPEAKER_01: It's why what you're doing, getting a lot of messages out there about housing, et cetera, all of this is important.
36:06
SPEAKER_01: I think the information out there is very good now.
36:09
SPEAKER_02: Yeah, I do as well.
36:10
SPEAKER_02: I do as well.
36:11
SPEAKER_02: So I think there's there's three groups here I'd like uh to get you to provide some advice uh to.
36:19
SPEAKER_02: First group is we have a lot of politicians and policymakers who listen to this podcast.
36:24
SPEAKER_02: So what do you want to see from them?
36:26
SPEAKER_02: What would you say, you know, this would help uh the financial security of younger Canadians, whether it's an attitudinal change or an actual policy change.
36:36
SPEAKER_01: Well, it's interesting.
36:37
SPEAKER_01: I wouldn't do something specific to financial planning.
36:39
SPEAKER_01: I wouldn't necessarily introduce more instruments or expand TFSAs.
36:43
SPEAKER_01: You can look at all of that.
36:44
SPEAKER_01: I think what really helps younger groups prosper and have hope and have a good feeling for the future is strong economic growth.
36:51
SPEAKER_01: And we've got to get back into higher productivity means.
36:54
SPEAKER_01: What does that look like?
36:55
SPEAKER_01: We need to attract more capital, and therefore we need to be attractive to capital.
37:00
SPEAKER_01: How do you do that?
37:01
SPEAKER_01: Well, I think we've got to watch our tax levels, we've got to watch our regulation, no doubt about it.
37:06
SPEAKER_01: We can overwhelm the marketplace.
37:07
SPEAKER_01: I think one of the things that hurts Canada is the concentration of power we have at the top of so many industries.
37:13
SPEAKER_01: If you look at everything from banking to telecommunications to grocery, we have three, four, five at the most dominant players.
37:20
SPEAKER_01: Therefore, there's less innovation, less risk taking.
37:23
SPEAKER_01: It's more about market share and almost cooperating with each other than it is about innovating and taking chances and doing new and exciting things.
37:30
SPEAKER_01: So I think any policy changes that help on the productivity front, that lead to future growth, that keep capital here, that keep younger people who have potential here and excited, we're losing some of our best and youngest and brightest right now, unfortunately, to the states.
37:45
SPEAKER_01: And so I think I'm more concerned with those kinds of big picture policy issues than I am with little things to do with RSP tinkering and TFSA tinkering.
37:54
SPEAKER_01: Now, if I can just expand on that, you mentioned earlier about the brain train, and you talked about how real estate is pushing some people away.
38:01
SPEAKER_01: I really saw that a couple times in Waterloo over the last few years where founders have said to me, we're probably going to start the company stateside.
38:09
SPEAKER_01: And people say, Oh, they're turning their back on Canada.
38:11
SPEAKER_01: These people loved Canada and it had nothing to do with the taxes, and it had nothing to do with regulation.
38:16
SPEAKER_01: The two things you see cited a lot.
38:18
SPEAKER_01: It's because they couldn't attract the talent in Canada they could in the States because of real estate prices.
38:25
SPEAKER_01: That people were looking at saying, if I locate in Texas, the real estate's so much less expensive than it is in Canada, then that is something that really comes into play.
38:34
SPEAKER_01: You'll laugh at the other thing they bring up, weather.
38:37
SPEAKER_01: They'll say attracting talent, a lot of the Canadian talent says these winters are killing me.
38:41
SPEAKER_01: You know what last winter was like.
38:43
SPEAKER_01: Well, we can't do much about that one.
38:44
SPEAKER_01: But you can see again the spillover effect of extremely expensive real estate.
38:49
SPEAKER_01: It impacts a lot of different things in our lives.
38:52
SPEAKER_01: So again, the big picture answer to that question is we need more growth, we need more productivity gains, we've been lagging there.
39:00
SPEAKER_01: What can we do to help on that front?
39:03
SPEAKER_02: Well, there we go.
39:04
SPEAKER_02: And now we we have an answer if politicians say that that's too tough.
39:07
SPEAKER_02: You can say, well, the alternative is changing the weather.
39:09
SPEAKER_02: So really, guys, you know, pick uh pick your battle here, which uh what do you think we can do better?
39:16
SPEAKER_02: Exactly.
39:16
SPEAKER_02: Next group, I'd like uh some advice for is younger people.
39:19
SPEAKER_02: Uh because you're you know retiring, you've you've now kind of done the uh the life cycle of uh you know of your employment, but I'd like the advice to be non-financial in nature.
39:31
SPEAKER_02: So if you have, let's say uh give it an example, you know, a 22-year-old who's graduating uh from Western, what advice would you give them?
39:39
SPEAKER_01: Well, first off, be optimistic and be hopeful.
39:42
SPEAKER_01: There are a lot of wonderful things happening in the world.
39:45
SPEAKER_01: It is so easy to get caught up in the negativity now.
39:48
SPEAKER_01: You watch the news and the trade battles, you see what's happening in the Middle East, but it it clouds the fact that all of us are living better lives now than people did 15, 100 years ago by a dramatic margin.
40:01
SPEAKER_01: That the trends in most areas are up and to the right, not down and to the right at all.
40:07
SPEAKER_01: I think we're gonna have major breakthroughs and things like healthcare over the next X number of years because of AI and because of all the smart people out there.
40:15
SPEAKER_01: It's a world full of opportunity.
40:17
SPEAKER_01: So do not buy into the negativity.
40:19
SPEAKER_01: Look at the possibilities and side gigs now with old-fashioned businesses, with AI, with Facebook marketplace.
40:25
SPEAKER_01: I meet so many younger people in their 20s and 30s who are making X thousand a month doing things on the side.
40:31
SPEAKER_01: There's a lot of opportunity out there.
40:34
SPEAKER_01: So my biggest message to young groups is do not buy into this all-negative narrative that you're hearing.
40:40
SPEAKER_01: There are challenges.
40:41
SPEAKER_01: We've discussed a lot of them.
40:42
SPEAKER_01: The real estate price is being one, but there's lots of opportunity, lots of good things happening.
40:47
SPEAKER_01: And I'll tell you something else I learned from 35 years on the road.
40:51
SPEAKER_01: 98% of people out there are wonderful.
40:54
SPEAKER_01: They're kind, they're nice, they're polite, they're cheering for you, they're onside, they just want to add value, raise good kids, etc.
41:03
SPEAKER_01: Again, when you get all your news from the news, you get a distorted perspective that there are a lot of not-so-good people out there.
41:10
SPEAKER_01: But when you're out there every day meeting all new people in all new environments, I'm telling you, most people are very good, kind, caring people.
41:18
SPEAKER_02: Yeah, that's uh too true as somebody who's traveled from coast to coast to coast, that we are really a country of great people.
41:26
SPEAKER_02: Uh and now, third group, third group, group of one.
41:31
SPEAKER_02: It's me.
41:32
SPEAKER_02: So, what advice would you give a minor celebrity podcaster who's about to turn 50?
41:37
SPEAKER_02: And this can be either financial or non-financial.
41:40
SPEAKER_01: Well, on the financial front, I would go to see a very competent financial advisor, maybe an advice-only planner, not necessarily, but maybe relatively soon.
41:50
SPEAKER_01: You want to do some of your pre-retirement planning in your early 50s.
41:54
SPEAKER_01: Some people are waiting to go in for those meetings until they're 60, and certain opportunities could be lost or can't be set up for perfectly.
42:01
SPEAKER_01: So that's the one thing I would do.
42:03
SPEAKER_01: And then the other thing you have to think through when you're 50 that I didn't do a wonderful job of when do you think you'll want to retire and what does that look like?
42:10
SPEAKER_01: And you start making those thoughts.
42:12
SPEAKER_01: But you know, in general, I don't think you need much advice.
42:14
SPEAKER_01: You know, you seem like a very happy, content person.
42:17
SPEAKER_01: I think as I've gotten older, you learn certain lessons, you do get wise on front some fronts.
42:22
SPEAKER_01: For one of the things that jumps to me in the last few years, especially is friends are family.
42:27
SPEAKER_01: And so spending as much time as you can with your friends, with your loved ones, enjoying it.
42:33
SPEAKER_01: Obviously, as you get to be 55, 60, 65, health issues start cropping in among some people in your friend group, and boy, it can really jewel you back.
42:42
SPEAKER_01: Take advantage of the time while you can.
42:44
SPEAKER_01: Don't get too caught up in all this money stuff.
42:46
SPEAKER_01: I mean, you know, it's funny.
42:47
SPEAKER_01: I'm one of the least money-oriented people you'll ever meet.
42:50
SPEAKER_01: You know, I really don't spend a lot of money.
42:52
SPEAKER_01: I have low-cost hobbies.
42:53
SPEAKER_01: I like hanging around my buddies.
42:55
SPEAKER_01: I care more about my hockey pool and my fantasy football than I do about my investments most of the time.
43:00
SPEAKER_01: I spend more time on them.
43:01
SPEAKER_01: So enjoy life, but again, the overriding message I'll give you is the same one I just gave you to the younger people.
43:07
SPEAKER_01: We are lucky.
43:08
SPEAKER_01: If you are healthy and you live in Canada, problems aside, we are very fortunate people.
43:14
SPEAKER_01: Instead of complaining, let's get out there and make a difference.
43:17
SPEAKER_01: Start something, grow something, get involved in your community, be a wonderful parent.
43:20
SPEAKER_01: There are so many ways to add value in life.
43:23
SPEAKER_01: And I find that too many people are too negative now.
43:25
SPEAKER_01: There's too much complaining.
43:27
SPEAKER_02: Yeah, I uh that's good advice.
43:30
SPEAKER_02: Uh, and I I have someone who knows I complain too much.
43:33
SPEAKER_02: So it's uh it's nice to be uh reminded of that.
43:36
SPEAKER_02: And you know, I'm gonna need a reminder because I'm gonna need to bring you back on because I'm gonna need help with my fantasy hockey pool.
43:44
SPEAKER_02: Uh, I I haven't won in decades.
43:46
SPEAKER_02: I seem to be better at it when I was younger, so might have to have you on again uh for that.
43:51
SPEAKER_02: But but Dave, thank you so much uh for coming on.
43:54
SPEAKER_02: Again, uh as I said before we started recording, you know, you've always been a bit of a hero of mine.
43:59
SPEAKER_02: You know, I first read your book uh in my late teens.
44:03
SPEAKER_02: So you've always been someone like way up here to me.
44:06
SPEAKER_02: So, you know, to be able to have this conversation is a special treat.
44:10
SPEAKER_01: Well, I enjoyed it immensely.
44:11
SPEAKER_01: I have a lot of respect for you.
44:12
SPEAKER_01: You're a very sharp guy.
44:13
SPEAKER_01: The podcast is excellent.
44:15
SPEAKER_01: I enjoy your Twitter account too.
44:17
SPEAKER_01: You have a lot of good thoughts on things, and you're very good at explaining concepts.
44:21
SPEAKER_01: I mentioned to you earlier when you talked about why the builders are building less expensive homes when there's clearly demand for it.
44:28
SPEAKER_01: That was a very helpful piece.
44:30
SPEAKER_01: It's important for people to understand that type of thing.
44:32
SPEAKER_01: Oh, yeah, I get that.
44:34
SPEAKER_01: And again, even a lot of policymakers don't necessarily know all of this.
44:37
SPEAKER_01: So it's good you're drawing attention to it.
44:39
SPEAKER_01: It was an honor to be on the program.
44:41
SPEAKER_01: Thank you so much for having me.
44:43
SPEAKER_02: Well, well, well, thanks for being on.
44:45
SPEAKER_02: And I really appreciate it.
44:46
SPEAKER_02: And, you know, one of the life lessons uh that I've got that I try and teach younger people is don't be afraid to ask what seems like silly questions.
44:55
SPEAKER_02: You know, all of those things I found out about the cost of building a home.
44:58
SPEAKER_02: I basically went up to builders and developers and acted like a five-year-old and just kept going, why, why, why, why?
45:04
SPEAKER_02: You learn things that you otherwise wouldn't know.
45:06
SPEAKER_01: So well, I'll tell you a cute story to end when I was about 10 one day, and my father said to me, You can ask people, there's no such thing as a stupid question.
45:14
SPEAKER_01: The very first question I asked, he went, That is actually stupid.
45:17
SPEAKER_01: You proved me wrong.
45:18
SPEAKER_01: So there we go.
45:20
SPEAKER_01: Apparently, I can come up with a stupid question.
45:22
SPEAKER_01: Anyway, I enjoyed it immensely, and I'm sure we'll do it again at some point.
45:26
SPEAKER_02: Oh, we'd love that.
45:27
SPEAKER_02: So thanks again.
45:28
SPEAKER_02: And uh thank you to our audience for watching and listening.
45:31
SPEAKER_02: Our producer is Meredith Martin and our editor is Sean Foreman.
45:34
SPEAKER_02: And if you have any thoughts or questions around the economics of southwestern Ontario, please send us an email to missing middle podcast at gmail.com.