The Rational Reminder Podcast

In this special year-end AMA, the full PWL crew — Ben Felix, Cameron Passmore, Ben Wilson, and Dan Bortolotti — sit down together for the first time on the podcast to reflect on the roller-coaster that was 2025 and to tackle a wide range of thoughtful listener questions. The episode begins with reflections on a year that included wild market swings, an extraordinary rally few predicted, major changes within PWL, and personal milestones. From there, the team dives deep into the psychology of staying invested, the real risks of inexperienced investors going 100% equities, the complexity of asset location and pre-tax vs. after-tax allocation, and how to talk to family members who are paying too much in investment fees.   Key Points From This Episode: (0:04) Introduction — first-ever full-team recording and setup for the year-end AMA. (1:12) Why not all AMA questions could be answered — over 400 submissions and many not suited to the format. (1:48) 2024 market recap — from early-year panic to strong double-digit global equity returns. (3:59) The speed of recoveries — why missing a quick rebound can permanently derail returns. (5:34) Cameron's lessons from 2024 — unpredictability, growing adoption of evidence-based investing, joining a bigger organization, and driverless-car optimism. (7:41) Ben Wilson becomes a co-host — an unplanned evolution shaped by listener feedback. (9:51) Dan on humility in forecasting and reconnecting with theoretical research. (11:18) Ben's personal year — firm acquisition, equity value jump, and navigating his cancer diagnosis. (12:32) Talking to parents about high fees — emotional dynamics, non-confrontational questions, and the danger of implied judgment. (23:01) Should beginners hold 100% equities? Behavioral risk, volatility blindness, and why it shouldn't be the default allocation. (30:35) Pre-tax vs. after-tax asset allocation — why RRSP dollars aren't equal to TFSA dollars and how that changes true risk exposure. (36:09) Why PWL rarely optimizes asset location — complexity, low payoff, and behavioral clarity. (44:42) What PWL does (and doesn't) offer — discretionary management, integrated planning, outside specialists, and tax deductibility rules. (49:04) "I know I need index funds — but how do I actually buy them?" Robo-advisors vs. one-ticket ETFs and why placing a trade is the real barrier. (57:47) Ben's lessons as a new homeowner — maintenance costs far above expectations and the hidden burden of being your own contractor. (1:01:54) The strangest portfolios — single-stock windfalls, leverage without client awareness, bullion-only strategies, and the infamous "meatloaf portfolio." Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://pwlcapital.com/our-team/ Cameron on X — https://x.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Ben Wilson on LinkedIn — https://www.linkedin.com/in/ben-wilson/   Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, the team digs into the newly updated 2025 edition of The Wealthy Barber — Dave Chilton's iconic Canadian personal finance book that helped shape millions of financial journeys. Ben, Dan, and Ben walk through the biggest lessons Dave has reworked for a world of high housing costs, social-media-fueled spending pressure, new tax-sheltered accounts, and the ever-present noise of investing advice. This discussion explores why the book remains so effective: it blends timeless principles with approachable storytelling, humor, and deeply practical guidance. The conversation also highlights Dave's real-world insights from reviewing thousands of personal financial situations across Canada. You'll hear how the book explains foundational habits like paying yourself first, why simple investing beats stock picking, how renters can build wealth, and why understanding your own spending is the key to unlocking both financial progress and happiness. Whether you're brand new to money or a seasoned investor, the updated lessons hit harder in 2025 than ever before.   Key Points From This Episode: (0:04) Introduction — recording early and setting up a deep dive into the updated Wealthy Barber. (0:53) Why the new 2025 edition lands so well: humor, modern references, and timeless lessons. (1:30) Dave Chilton's real-world insight from reviewing thousands of Canadians' financial situations. (2:23) Why the storytelling works — characters, humor, and accessible teaching. (3:45) Inside the narrative: Roy the barber, Matt, Maddie, Jess, Kyle, and the barbershop regulars. (7:53) Lesson 1: "You can do this" — personal finance isn't about math, it's about simple principles. (12:08) Lesson 2: Save 10% and pay yourself first — habit beats theory, compounding does the rest. (14:29) Why saving is hard today: algorithms, FOMO, lifestyle creep, and rising costs. (16:57) The behavioral case for saving early, even if economists say otherwise. (18:52) Lesson 3: Be an owner, not a loaner — stocks vs. bonds and the engine of human ingenuity. (22:49) The investor's paradox — the less you think you know, the better you invest. (24:05) Why indexing wins: skewed stock returns and the impossibility of picking winners. (27:49) How investing has changed since 1989 — indexing is now widely accessible. (28:18) "The world feels scary today…" — the 1847 quote showing it always feels that way. (34:03) RRSP vs. TFSA — identical outcomes at equal tax rates, and why RRSPs shine when taxed lower later. (39:12) Debunking the RRSP "tax bomb" — why high earners still benefit most. (42:06) Lesson 4: Housing — the four levers to buy today (cheaper homes, (46:34) Why today's young buyers need new strategies, not 1980s nostalgia. (48:02) Longer amortizations: counterintuitive but often financially sound. (49:05) Leverage vs. psychology — why borrowing to invest feels scary even when the math matches. (52:36) Renting isn't throwing money away — disciplined renters can match homeowner wealth. (53:51) The hidden costs of owning — repairs, trees, chimneys, and constant surprises. (55:44) The Canadian stigma around renting — and why it's undeserved. (56:42) Lesson 5: Spending — "faulty brain wiring," social pressure, and unconscious habits. (1:00:46) The multi-month spending summary — tedious but life-changing for both finances and happiness. (1:02:43) Joy units per dollar — reallocating spending to maximize happiness. (1:03:47) Practical rules: delay big purchases, beware car costs, indulge selectively, and remember "$1 saved = $2 earned."   Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://pwlcapital.com/our-team/ Cameron on X — https://x.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Ben Wilson on LinkedIn — https://www.linkedin.com/in/ben-wilson/ Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

What happens when alternative investments shift from niche products to the industry's go-to value proposition? In this episode, we're joined by financial planner and self-described "pathological nerd" Aravind Sithamparapillai for a rigorous exploration of private markets, product due diligence, advisor incentives, and the narratives driving the surging popularity of alts. Aravind has become known in advisor circles for asking the uncomfortable questions at conferences—the ones that expose gaps in explanations, shaky assumptions, and in some cases, outright contradictions. In this conversation, he shares the stories and analytical frameworks behind his deep dives into mortgage funds, private credit, private real estate, IRR-based marketing, vintage stacking, stale pricing, operational risk, and why even large professional allocators get burned. We explore how advisors are selling alts, how funds are pitching them, what due diligence actually requires, how expected returns can be decomposed, and why illiquidity and "low correlation" benefits rarely play out in practice. Aravind also explains how some funds maintain stable NAVs through "extend and pretend," how gating works, why audited financials aren't a safety blanket, and why even top-tier firms miss red flags. Key Points From This Episode: (0:00:38) Aravind's introduction and reputation for deep, "pathological" research (0:02:23) Why alts have become embedded in Toronto's planning culture (0:03:38) Client pressure, advisor FOMO, and the belief that 60/40 is "broken" (0:05:31) Aravind's personal path into indexing, factors, and Dimensional (0:10:46) Why he started digging into alts: curiosity, client conversations, and advisor narratives (0:13:47) The "conference meme": why he asks questions others avoid (16:58) The role of intellectual honesty vs. industry narratives (20:19) The pivotal 2023 mortgage fund story: duration, turnover, and a major contradiction (22:51) "Extend and pretend": how stable NAVs can be manufactured (28:59) What "gating" actually means and why it matters (31:48) Marketing tactics: cherry-picked start dates and chart crimes (32:47) IRR manipulation, vintage stacking, and anchoring bias (36:35) Why comparing gross private credit returns to net equity returns is misleading (39:18) The problem with "low correlation" as a selling point (41:00) Why rebalancing with illiquid assets often fails in practice (44:58) How Aravind builds expected return estimates for alts (47:07) Private real estate: why expected returns often land near public market levels (48:48) A case study: apparent outperformance disappears once you match the right benchmark (51:43) The idiosyncratic risk of overweighting single-sector, single-region REITs (55:12) Why most advisors don't truly understand the all-in fees (58:00) What real due diligence should include (and why it's so hard) (1:00:35) Should advisors trust third-party due diligence providers? (1:02:58) How much comfort should investors take from audited financials? (1:05:02) Why valuation levels (1–3) matter and why most private funds use Level 3 inputs (1:06:00) The overall conclusion: markets work, but alts require extraordinary scrutiny Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://pwlcapital.com/our-team/ Cameron on X — https://x.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Ben Wilson on LinkedIn — https://www.linkedin.com/in/ben-wilson/ Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we feature two conversations that highlight PWL's culture, values, and intentional approach to advice. We first sit down with Trevor Daigle and Brett Watt, founders of EB Wealth in Halifax, to talk about why they chose to merge their thriving independent practice with PWL — PWL's first acquisition in Atlantic Canada. Trevor and Brett open up about what they saw in PWL's infrastructure, culture, and client-first philosophy, the internal hurdles they had to clear (including their own egos), and the moment they realized they "couldn't unsee" what PWL had built. Then, in the second half of the episode, PWL Portfolio Manager and Financial Planner Phil Briggs walks us through a remarkable real-world case. A podcast listener's father decided to take the commuted value of his defined benefit pension… and the family approached PWL to invest it. Rather than simply execute the plan, Phil stepped back to rigorously analyze whether that decision made sense at all. The result is one of the most compelling demonstrations of evidence-based financial planning we've featured on the show — covering risk pooling, tax implications, Monte Carlo results, survivor benefits, and the emotional side of decision-making. Key Points From This Episode: (0:00:51) Welcoming Trevor and Brett — and why their practice, EB Wealth, aligned so closely with PWL's holistic philosophy. (0:02:30) How long-term cultural fit, infrastructure, and research depth drove their decision to join PWL. (0:04:57) "We can't unsee that": The moment a visit to Ottawa convinced them PWL's values were real at every level. (0:07:45) Their biggest concern: giving up control after years of running an independent practice — and how that shifted. (0:09:43) Setting aside ego: How thinking long-term and client-first changed their perspective on joining PWL. (0:11:35) What excites them most about the future: growth, learning, and being surrounded by experts who prioritize client outcomes. (0:13:17) Seeing PWL's collaborative culture in action — and why industry-typical "sales meetings" were nowhere to be found. (0:14:43) Transitioning clients and feeling the immediate impact on conversations and relationships. (15:05) The setup: A podcast listener reaches out after his father already decided to take the commuted value of a DB pension. (17:25) Why Phil was surprised — and the questions he wanted answered before talking about investing. (17:25–18:49) The benefits of staying in a DB pension: risk transfer, inflation protection, and mortality pooling. (19:07) The risks: employer insolvency, underfunding, and historical examples like Sears Canada and Nortel. (20:10–22:04) Evaluating pension solvency: sponsors, surplus status, funding ratios, diversification, and regulatory filings. (23:49) Reasons someone might take the commuted value: investment preferences, life expectancy concerns, and survivor benefits — the central issue in this case. (25:15–30:52) The tax trap: how the "excess amount" of a commuted value can trigger immediate taxation — in this case at the 53.53% marginal rate — and how RRSP room and PARs interact. (31:26–33:53) Modeling the decision: building retirement scenarios in financial planning software, including spending, inflation, CPP/OAS, rental income, and Monte Carlo analysis. (34:00–37:54) Results: 60/40 investment after commuting: overfunded plan but with significant volatility. 100% equity: higher legacy, similar failure rate. Leaving the pension with the employer: similar retirement score but dramatically higher Monte Carlo success (96%) due to guaranteed income, inflation hedging, and tax smoothing. (38:32–40:55) Why the pension's stable income floor and deferred taxation made such a big difference — even in a shortened-life-expectancy scenario. (41:05–41:37) Other firms simply accepted the commuted-value plan; PWL was the only firm to fully analyze the decision. (43:50–44:53) How personal values, risks, and emotional comfort interact with data in real financial planning decisions. (45:00–47:28) The next decision: choosing between a higher pension with a 2/3 survivor benefit or a lower pension with a 100% survivor benefit — and how break-even analysis (age 81) informed the client's choice. (47:44–48:31) Why planning software provides clarity people can't get through gut feel alone. (48:31–49:59) Trust and incentives: why turning down a large investable sum was the right decision — and why PWL celebrates that. (50:08–51:01) Culture + incentives: how PWL's structure allows advisors to prioritize clients without sales pressure. Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://pwlcapital.com/our-team/ Cameron on X — https://x.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Ben Wilson on LinkedIn — https://www.linkedin.com/in/ben-wilson/ Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we're joined by Mamdouh Medhat, VP and Senior Researcher at Dimensional Fund Advisors, for an exceptionally deep, exceptionally nerdy exploration of factor investing—focusing on profitability, value, defensive equity, and the persistent misunderstandings that surround them. Mamdouh walks us through his retrospective paper (co-authored with Robert Novy-Marx) on the profitability premium, why profitability subsumes a wide range of quality metrics, and why it dramatically clarifies how we should think about defensive/low-volatility strategies. He also explains the role of profitability in value's US underperformance since 2007, why price-to-book remains a remarkably effective valuation metric, and how Dimensional incorporates these insights into portfolio construction. In the second half of the conversation, we shift to private markets. Mamdouh unpacks Dimensional's research on buyouts, venture capital, private credit, and private real estate—revealing what percentage of the global investable universe these funds actually represent, how to benchmark them properly, how much dispersion exists across managers, how fair-value accounting changed the game post-2007, and why many perceived diversification benefits are actually just return smoothing. Key Points From This Episode: (0:04) Intro to Mamdouh Medhat and why his research fits the Rational Reminder "nerdy happy place." (1:32) The story behind Mamdouh's retrospective paper with Robert Novy-Marx and the impact of the original profitability research on academia and practice. (5:36) Three things the paper examines: quality investing, defensive/low-risk strategies, and value—unified through profitability. (6:55) Why none of the 15 major academic and practitioner quality metrics add explanatory power beyond profitability. (8:18) How spanning tests show profitability explains quality, but quality does not explain profitability. (12:24) Quality measures largely load on profitability—they're noisier versions of the same thing. (13:14) The link between quality metrics and fundamental momentum, especially for QMJ and quarterly ROE. (15:18) Practical implications: profitability is a parsimonious, more efficient way to capture the "quality" dimension. (16:30) Defensive equity through the profitability lens—why high profitability predicts low volatility. (18:58) Why long-only low-volatility strategies produce zero five-factor alpha—and why a simple high-profitability/low-investment portfolio plus T-bills beats them. (22:14) Alternative value metrics (EBITDA/EV, intangible-adjusted book-to-market, etc.) don't outperform price-to-book when profitability is accounted for. (24:57) Many "improved" value metrics simply rotate in profitability exposure, not better value information. (26:17) Roughly half of US value's post-2007 underperformance is explained by its negative correlation with profitability. (28:42) Industry tilts (e.g., energy/financials vs. tech/healthcare) drive much of value's volatility—not its long-term return. (30:33) The theoretical case for combining clean valuation (price-to-book) with clean expected cash flow (profitability). (33:36) Academic implications: models must jointly explain value and profitability—and their negative correlation. (35:09) Practitioner implications: parsimony—use clear valuation and cash-flow measures, limit excessive complexity. (36:53) How Dimensional measures profitability: operating profitability (revenue – COGS – SG&A – interest) scaled by book equity. (41:09) Why tilting toward or away from countries based on aggregate characteristics rarely adds value—premiums come from stocks, not countries. (42:57) Industry-level tilts show similar patterns—industry momentum exists but is impractical due to massive turnover. (46:15) How Dimensional handles country and industry weights: sort within countries, then apply sector caps. (48:27) Private markets: private funds make up roughly 10% of the global investable universe—not 25–100% as sometimes claimed. (50:53) Benchmark choice for private funds is crucial—S&P 500 is not appropriate for buyouts or VCs. (52:00) Using KSPME (public-market equivalent), buyouts and VCs match small-cap value/growth benchmarks; private credit matches high yield; private real estate underperforms listed real estate. (55:50) Factor exposures post-2007 explain 70–80% of private-fund return variation due to fair-value accounting. (1:00:48) Wide dispersion in private-fund performance—top 5% double or triple capital; bottom 5% lose half. (1:03:49) Little evidence of manager persistence—manager selection must rely on due diligence, not past vintages. (1:08:24) No strong time trend in private-fund outperformance, but correlations with public markets have increased. (1:09:13) Many diversification benefits historically attributed to private assets were actually illiquidity-driven smoothing. (1:12:25) Rising demand and democratization likely reduce expected returns in private markets—exclusivity is fading.   Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://pwlcapital.com/our-team/ Cameron on X — https://x.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)