The Rational Reminder Podcast

What if the hardest part of investing isn’t building a portfolio—but sticking to it? In this AMA edition of the Rational Reminder podcast, Ben Felix and Dan Bortolotti tackle listener questions ranging from sustainable retirement withdrawals to the dangers of structured products, with plenty of philosophical insights on risk, behavior, and financial planning. The episode opens with a deep dive into the 4% rule, exploring how time horizon, asset allocation, and global data can shift the definition of “safe.” They also explore the behavioral challenges of the “boring middle” of investing and why consistency may be the greatest alpha. Other standout segments include a sharp critique of bank-sold structured notes, an evidence-based takedown of trend following, and a fascinating discussion on the long-term impact of demographic shifts and index investing. Throughout, Ben and Dan blend technical insight with practical wisdom and academic research, delivering a thoughtful and entertaining conversation for both DIY investors and those working with advisors.   Key Points From This Episode: (0:01:07) What the latest data says about safe withdrawal rates, especially for early retirees with 100% equity exposure. (0:08:45) How variable vs. fixed withdrawals affect outcomes—and the trade-offs retirees must consider. (0:17:01) The behavioral risks of the “boring middle” and how automation or advice helps investors stay disciplined. (0:26:13) Reflections on market crashes—why hindsight downplays the emotional reality of volatility. (0:33:27) Commission conflicts: Why bank advisors push structured notes and the incentives behind them. (0:44:22) Education vs. malice: Are bad financial advisors untrained, conflicted, or both? (0:49:08) Are structured notes ever justified? (Spoiler: very rarely.) (0:56:44) Trend following: Legitimate strategy or fancy market timing? Examining the live track records. (1:02:52) Diversifying your life like a portfolio: Applying the PERMA model to personal growth. (1:10:18) The one use of leverage that actually makes sense—and why most others don’t. (1:14:20) Will aging demographics crash ETF markets? What the data and theory suggest. (1:19:02) Why even complex macro trends don’t justify deviating from a simple, low-cost investment plan.   Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p [https://www.google.com/url?q=https://calendly.com/d/3vm-t2j-h3p&sa=D&source=editors&ust=1750280039915554&usg=AOvVaw1eue_Qfqr7clg1r3KlpZJC] Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582 [https://www.google.com/url?q=https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt%3D2&sa=D&source=editors&ust=1750280039916044&usg=AOvVaw0JSnW68N5oCvuCb71R9KUk]. Rational Reminder Website — https://rationalreminder.ca/ [https://www.google.com/url?q=https://rationalreminder.ca/&sa=D&source=editors&ust=1750280039916324&usg=AOvVaw16JS71zcXs-1EtNvZeJpk4]  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ [https://www.google.com/url?q=https://www.instagram.com/rationalreminder/&sa=D&source=editors&ust=1750280039916658&usg=AOvVaw1LgOeYihi2HX64Y2M9QntM] Rational Reminder on X — https://x.com/RationalRemind [https://www.google.com/url?q=https://x.com/RationalRemind&sa=D&source=editors&ust=1750280039916892&usg=AOvVaw1yD2T57laYEdlMZ0RTvWn_] Rational Reminder on TikTok — www.tiktok.com/@rationalreminder [https://www.google.com/url?q=https://www.tiktok.com/@rationalreminder?_t%3D8oTz7ldhMc1%26_r%3D1%26fbclid%3DIwZXh0bgNhZW0CMTAAAR1Z4A-2rKqQTivvuyU1-PssL9xfJn5myyaps6kQypAwHm7aL66qSajEhI0_aem_puLPWAK_S3Gk2bEmdXjohg&sa=D&source=editors&ust=1750280039917260&usg=AOvVaw0eyMPmyZ5RxFmjbEk_FL16] Rational Reminder on YouTube — https://www.youtube.com/channel/ [https://www.google.com/url?q=https://www.youtube.com/channel/UCOErWFfNOQzXsgE7f5S_ULw&sa=D&source=editors&ust=1750280039917616&usg=AOvVaw21Ewr9iChJgdcd-6npdOCC] Rational Reminder Email — info@rationalreminder.ca [info@rationalreminder.ca] Benjamin Felix — https://pwlcapital.com/our-team/ [https://www.google.com/url?q=https://pwlcapital.com/our-team/&sa=D&source=editors&ust=1750280039918056&usg=AOvVaw1MRykEbBZmZM4bR_-JAJYb] Benjamin on X — https://x.com/benjaminwfelix [https://www.google.com/url?q=https://x.com/benjaminwfelix&sa=D&source=editors&ust=1750280039918284&usg=AOvVaw0lR2-390aI3pX-gEenArXK] Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ [https://www.google.com/url?q=https://www.linkedin.com/in/benjaminwfelix/&sa=D&source=editors&ust=1750280039918556&usg=AOvVaw08bBEPbnt4pZp4Et-1QBxV] Dan Bortolotti — https://pwlcapital.com/our-team/ [https://www.google.com/url?q=https://pwlcapital.com/our-team/&sa=D&source=editors&ust=1750280039918850&usg=AOvVaw0U1CKrjXQCdJ265DYrQtZh] Dan Bortolotti on LinkedIn — https://ca.linkedin.com/in/dan-bortolotti-8a482310 [https://www.google.com/url?q=https://ca.linkedin.com/in/dan-bortolotti-8a482310&sa=D&source=editors&ust=1750280039919250&usg=AOvVaw0tuRpPt0xEYfpOMI5YTQUB] Episode 261: Felix Fattinger - https://rationalreminder.ca/podcast/261 Episode 314: Valentin Haddad - https://rationalreminder.ca/podcast/314 [https://www.google.com/url?q=https://rationalreminder.ca/podcast/314&sa=D&source=editors&ust=1750280039919889&usg=AOvVaw2BSqi4t_g7QeLrNme1TYXb] Episode 302: Michael Green - https://rationalreminder.ca/podcast/302 Episode 222: Cassie Holmes - https://rationalreminder.ca/podcast/222 [https://www.google.com/url?q=https://rationalreminder.ca/podcast/222&sa=D&source=editors&ust=1750280039920382&usg=AOvVaw2Em7ETPWQPjmr2SamrBARI] Episode 278: Juhani Linnainmaa - https://rationalreminder.ca/podcast/278 [https://www.google.com/url?q=https://rationalreminder.ca/podcast/278&sa=D&source=editors&ust=1750280039920742&usg=AOvVaw2DuRwmeXJ4ORUUum5MTfGT] Episode 212: Ralph S.J. Koijen - https://rationalreminder.ca/podcast/212 [https://www.google.com/url?q=https://rationalreminder.ca/podcast/212&sa=D&source=editors&ust=1750280039921021&usg=AOvVaw2sA-vU6NpdLEykTzGZZrhC] Episode 322: Marco Sammon — https://rationalreminder.ca/podcast/322Marco Sammon [https://www.google.com/url?q=https://rationalreminder.ca/podcast/322Marco&sa=D&source=editors&ust=1750280039921337&usg=AOvVaw25aCjy7nJGz5YYywLWoCFy]

Today, Ben plays lone host for the first time as we welcome Alex Edmans to the show. Alex is a Professor of Finance at London Business School as well as an accomplished speaker, author, investment banker, and financial advisor. To start, Alex describes his involvement in the formation of a new law in the UK before defining ‘misinformation’ and where confirmation bias fits in. Then, we assess the impact severity of confirmation bias, biased search versus biased interpretation, the role of generative AI in confirmation bias, and the levels of susceptibility within confirmation bias. We also explore the role of black-and-white thinking in concealing the truth, Alex’s Ladder of Misinference as seen in May Contain Lies, the 10,000-hour rule and other famous statements of misinformation, and how the idea of a narrative may influence how people interpret and misinterpret facts. We end with how to guard against the plague of data mining in research, data as evidence and what this implies for evidence in financial economics, and Alex shares helpful advice for determining truth in any circumstance.   Key Points From This Episode:   (0:03:27) Alex Edmans walks us through the erroneous evidence that influenced a new UK law. (0:07:13) Misinformation; living in a post-truth world; and where confirmation bias fits in. (0:12:06) The severity of confirmation bias, and biased search versus biased interpretation. (0:18:19) Unpacking generative AI and the susceptibility thresholds of confirmation bias.   (0:21:25) How black-and-white thinking makes the truth more elusive. (0:25:40) Understanding Alex’s Ladder of Misinference as seen in May Contain Lies. (0:28:17) Debunking the 10,000-hour rule and other enduring statements of misinformation. (0:38:10) The second step on the Ladder of Misinference: Why facts are not data. (0:42:42) How the idea of a narrative influences how people interpret or misinterpret facts. (0:44:25) Why data is not evidence, and examining the plague of data mining in research. (0:48:36) Guarding against data mining and the consequences of investing with misinformation.   (0:53:01) When data is evidence, and what this says about evidence in financial economics. (0:55:49) Why evidence may not be proof. (0:59:14) Practical advice for seeking the truth for important decisions and in everyday life.   Links From Today’s Episode: Meet with PWL Capital — https://calendly.com/d/3vm-t2j-h3p [https://www.google.com/url?q=https://calendly.com/d/3vm-t2j-h3p&sa=D&source=editors&ust=1749678240208235&usg=AOvVaw16gEVTdidkmMnTvAlfhMIV] Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582 [https://www.google.com/url?q=https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt%3D2&sa=D&source=editors&ust=1749678240208468&usg=AOvVaw0d-PTd_HILmkA4CXrC2Euk]. Rational Reminder Website — https://rationalreminder.ca/ [https://www.google.com/url?q=https://rationalreminder.ca/&sa=D&source=editors&ust=1749678240208593&usg=AOvVaw1YNyWVxsroeIs--PsPTl8D]  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ [https://www.google.com/url?q=https://www.instagram.com/rationalreminder/&sa=D&source=editors&ust=1749678240208750&usg=AOvVaw0A9VYx2VuBN2aaDnt2Oyqk] Rational Reminder on X — https://x.com/RationalRemind [https://www.google.com/url?q=https://x.com/RationalRemind&sa=D&source=editors&ust=1749678240208866&usg=AOvVaw0T2PZt4270DYlXhulxEXCJ] Rational Reminder on TikTok — www.tiktok.com/@rationalreminder [https://www.google.com/url?q=https://www.tiktok.com/@rationalreminder?_t%3D8oTz7ldhMc1%26_r%3D1%26fbclid%3DIwZXh0bgNhZW0CMTAAAR1Z4A-2rKqQTivvuyU1-PssL9xfJn5myyaps6kQypAwHm7aL66qSajEhI0_aem_puLPWAK_S3Gk2bEmdXjohg&sa=D&source=editors&ust=1749678240209021&usg=AOvVaw0n3IJmbWHDpes7iXH9ZlL0] Rational Reminder on YouTube — https://www.youtube.com/channel/ [https://www.google.com/url?q=https://www.youtube.com/channel/UCOErWFfNOQzXsgE7f5S_ULw&sa=D&source=editors&ust=1749678240209172&usg=AOvVaw3ev1ZFkwKuWwsoeB1Kfjsq] Rational Reminder Email — info@rationalreminder.ca [info@rationalreminder.ca] Benjamin Felix — https://pwlcapital.com/our-team/ [https://www.google.com/url?q=https://pwlcapital.com/our-team/&sa=D&source=editors&ust=1749678240209438&usg=AOvVaw32gfnuyDJ_zhfg7THDTI9S] Benjamin on X — https://x.com/benjaminwfelix [https://www.google.com/url?q=https://x.com/benjaminwfelix&sa=D&source=editors&ust=1749678240209545&usg=AOvVaw2E7ZZ7WiRcqwiccfjtPmPR] Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ [https://www.google.com/url?q=https://www.linkedin.com/in/benjaminwfelix/&sa=D&source=editors&ust=1749678240209680&usg=AOvVaw0N3yOKyCaEjCPfISdrGTtI] Alex Edmans — https://alexedmans.com/ [https://www.google.com/url?q=https://alexedmans.com/&sa=D&source=editors&ust=1749678240209779&usg=AOvVaw1VMdOO4w-F_ZVl9ujuosOX]  Alex Edmans on LinkedIn — https://www.linkedin.com/in/aedmans [https://www.google.com/url?q=https://www.linkedin.com/in/aedmans&sa=D&source=editors&ust=1749678240209903&usg=AOvVaw3YjGhAbODuR7ptevZP5R2C]  Alex Edmans on X — https://x.com/aedmans [https://www.google.com/url?q=https://x.com/aedmans&sa=D&source=editors&ust=1749678240210001&usg=AOvVaw0gFCJRJ47udKMQOqA5NiQ0]  London Business School — https://www.london.edu/ [https://www.google.com/url?q=https://www.london.edu/&sa=D&source=editors&ust=1749678240210107&usg=AOvVaw2fuKR1UOkYw-KuIG4_XkUh]  Fulbright Fellows | MIT — https://ir.mit.edu/projects/fulbright-fellows/ [https://www.google.com/url?q=https://ir.mit.edu/projects/fulbright-fellows/&sa=D&source=editors&ust=1749678240210279&usg=AOvVaw0A6MmCsp_3N6hyASyH_vRp]  Atkins — https://www.atkins.com/ [https://www.google.com/url?q=https://www.atkins.com/&sa=D&source=editors&ust=1749678240210378&usg=AOvVaw37j4Fr1bV-jKZuHJWO8pyD]  ‘Matthew Walker's “Why We Sleep” Is Riddled with Scientific and Factual Errors’ — https://guzey.com/books/why-we-sleep/ [https://www.google.com/url?q=https://guzey.com/books/why-we-sleep/&sa=D&source=editors&ust=1749678240210551&usg=AOvVaw1P5OtnkldYy7o9LfxfenmO]  ‘Grit: The Power of Passion and Perseverance | Angela Lee Duckworth | TED’ — https://www.youtube.com/watch?v=H14bBuluwB8 [https://www.google.com/url?q=https://www.youtube.com/watch?v%3DH14bBuluwB8&sa=D&source=editors&ust=1749678240210732&usg=AOvVaw0Bz15RE1v1Z8jf57EoaQYJ]    Books From Today’s Episode:   May Contain Lies — https://maycontainlies.com/ [https://www.google.com/url?q=https://maycontainlies.com/&sa=D&source=editors&ust=1749678240210925&usg=AOvVaw3LbDqwtBGQMRrGmMrM2L7h]  Grow the Pie — https://mybook.to/Grow-the-Pie [https://www.google.com/url?q=https://mybook.to/Grow-the-Pie&sa=D&source=editors&ust=1749678240211032&usg=AOvVaw2-q9qcbRL0YmIjYoihSidj] Outliers — https://www.amazon.com/Outliers-Story-Success-Malcolm-Gladwell/dp/0316017930 [https://www.google.com/url?q=https://www.amazon.com/Outliers-Story-Success-Malcolm-Gladwell/dp/0316017930&sa=D&source=editors&ust=1749678240211197&usg=AOvVaw09531RYDMYOmcy_nQ5QHgE]  Why We Sleep — https://www.goodreads.com/book/show/34466963-why-we-sleep [https://www.google.com/url?q=https://www.goodreads.com/book/show/34466963-why-we-sleep&sa=D&source=editors&ust=1749678240211340&usg=AOvVaw3D-ZW7kerBxHDkyCckU7hY]  Start with Why — https://www.amazon.com/Start-Why-Leaders-Inspire-Everyone/dp/1591846447 [https://www.google.com/url?q=https://www.amazon.com/Start-Why-Leaders-Inspire-Everyone/dp/1591846447&sa=D&source=editors&ust=1749678240211503&usg=AOvVaw1LPNODH1O0ef4wSkDy-qcZ]  Grit — https://www.amazon.com/Grit-Passion-Perseverance-Angela-Duckworth/dp/1501111108 [https://www.google.com/url?q=https://www.amazon.com/Grit-Passion-Perseverance-Angela-Duckworth/dp/1501111108&sa=D&source=editors&ust=1749678240211687&usg=AOvVaw0RZQ6FthSiVUpJdV21S-Ig]    Papers From Today’s Episode:   ‘CEO-Employees Pay Ratio, Employees’ Productivity and Firm Performance: Evidence from UK’ — https://www.researchgate.net/publication/391787593_CEO-Employees_pay_ratio_employees'_productivity_and_firm_performance_evidence_from_UK [https://www.google.com/url?q=https://www.researchgate.net/publication/391787593_CEO-Employees_pay_ratio_employees%27_productivity_and_firm_performance_evidence_from_UK&sa=D&source=editors&ust=1749678240212091&usg=AOvVaw2-qLIUEnSwtYkDs5RbKTPL]  ‘A Theory of Fair CEO Pay’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4294589 [https://www.google.com/url?q=https://papers.ssrn.com/sol3/papers.cfm?abstract_id%3D4294589&sa=D&source=editors&ust=1749678240212251&usg=AOvVaw0QNaNonov3392rXu5X263F]

What if “just buying the market” isn’t the end of the story? In this episode, we are joined by Gerard O’Reilly, Co-CEO and Co-CIO of Dimensional Fund Advisors, for a deep dive into what really drives net investment returns. Gerard returns to the Rational Reminder podcast to explain the key principles that differentiate Dimensional’s approach from traditional indexing—and why implementation, flexibility, and detail matter so much more than investors might think. We explore the concept of hidden costs in index investing, how index reconstitution and trading frictions erode returns, and the nuanced decisions that shape a market portfolio: defining the market, excluding low-returning stocks, optimizing tax efficiency, and more. Gerard breaks down how Dimensional’s rules-based, evidence-backed process improves outcomes through smart exclusions (like IPOs and high asset-growth firms), precise trading, securities lending, and better handling of corporate actions. From the dangers of chasing low fees to the surprising benefits of thoughtful execution, this conversation is a masterclass in next-level investing.   Key Points From This Episode:   (0:01:07) Why Gerard was invited back: Dimensional’s approach to hidden costs and net returns. (0:02:38) Looking beyond “index good, fees bad”—why investors should dig deeper. (0:04:21) Gerard’s background: From Caltech rocket scientist to Dimensional co-CEO. (0:06:22) How Dimensional differs from market-cap weighted index funds. (0:08:42) Four components of net returns: Two increase returns, two decrease them. (0:12:45) Defining the market: Free float, liquidity thresholds, and dynamic inclusion. (0:17:52) How small-cap index definitions can create return differentials as high as 10%. (0:22:03) What securities Dimensional excludes—and why: low-profitability growth, high asset growth, IPOs, and REITs. (0:29:26) Why IPOs are excluded for 6–12 months and the mechanics behind inclusion. (0:33:16) Why Dimensional’s exclusions aren’t like traditional active management. (0:35:09) The “Great British Bake-Off” analogy: baking better portfolios with the same ingredients. (0:38:13) How securities lending boosts returns—and how Dimensional does it better. (0:42:09) Managing corporate actions (like M&A) to reduce cash drag. (0:45:18) How Dimensional deals with buybacks and new share issuance.  (0:47:29) Momentum, short-term reversals, and securities lending fees as trading signals. (0:50:36) Why Dimensional may lend out stocks that have negative momentum. (0:52:42) How trading costs affect net returns and Dimensional’s execution edge. (0:56:06) Hidden costs of indexing: Index fund rebalancing and price impact. (1:03:19) Why focusing solely on fees is misleading—and what “value for service” really means. (1:06:18) DFUS: A case study of Dimensional’s market series outperforming index funds. (1:08:44) How Dimensional builds portfolios with intentional tilts toward higher expected returns. (1:12:35) What excites Gerard: Expanding access, ETF innovations, and global growth.   Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p [https://calendly.com/d/3vm-t2j-h3p] Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582 [https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582]. Rational Reminder Website — https://rationalreminder.ca/ [https://rationalreminder.ca/]  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ [https://www.instagram.com/rationalreminder/] Rational Reminder on X — https://x.com/RationalRemind [https://x.com/RationalRemind]Rational Reminder on TikTok — www.tiktok.com/@rationalreminder [https://www.tiktok.com/@rationalreminder?_t=8oTz7ldhMc1&_r=1&fbclid=IwZXh0bgNhZW0CMTAAAR1Z4A-2rKqQTivvuyU1-PssL9xfJn5myyaps6kQypAwHm7aL66qSajEhI0_aem_puLPWAK_S3Gk2bEmdXjohg] Rational Reminder on YouTube — https://www.youtube.com/channel/ [https://www.youtube.com/channel/UCOErWFfNOQzXsgE7f5S_ULw] Rational Reminder Email — info@rationalreminder.ca [info@rationalreminder.ca]Benjamin Felix — https://pwlcapital.com/our-team/ [https://pwlcapital.com/our-team/] Benjamin on X — https://x.com/benjaminwfelix [https://x.com/benjaminwfelix] Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ [https://www.linkedin.com/in/benjaminwfelix/] Cameron Passmore — https://pwlcapital.com/our-team/ [https://pwlcapital.com/our-team/] Cameron on X — https://x.com/CameronPassmore [https://x.com/CameronPassmore] Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ [https://www.linkedin.com/in/cameronpassmore/] Gerard O’Reilly — https://www.dimensional.com/us-en/bios/gerard-k-oreilly [https://www.dimensional.com/us-en/bios/gerard-k-oreilly] Dimensional Fund Advisors: https://www.dimensional.com/ [https://www.dimensional.com/] Episode 322: Marco Sammon — https://rationalreminder.ca/podcast/322Marco Sammon  [https://rationalreminder.ca/podcast/322Marco] Episode 198: Gerard O’Reilly — https://rationalreminder.ca/podcast/198 [https://rationalreminder.ca/podcast/198]

For the first time as a host combination, Ben, Dan, and Cameron sit down to discuss the most controversial topics in personal finance. We begin with identity and how it informs decision-making. Then, we revisit the renting versus buying debate, why this remains a highly controversial topic, the ins and outs of income investing, and understating the fervor of dividend investing. We also unpack FIRE as a branch of self-help; how it informs happiness; and how personality influences one’s approach to the FIRE principle. To end, we closely examine Bill Bengen’s 4% rule, and the Aftershow encourages us to maintain high podcasting standards while revealing what you can look forward to in our latest Rational Reminder t-shirt release.    Key Points From This Episode:   (0:01:25) Cameron’s positive LinkedIn experience regarding insurance.  (0:08:10) How identity informs decision-making.  (0:15:24) Why renting versus buying a home remains a controversial topic.  (0:27:50) Income investing, covered calls, and the fervor of dividend investing. (0:46:34) FIRE: Financial independence, retire early. (0:54:36) Unpacking FIRE as a branch of self-help, and the role of FIRE in happiness.  (1:07:07) How personality and identity inform one’s approach to FIRE. (1:10:34) Addressing the 4% rule.  (1:14:16) The Aftershow: Setting and keeping high standards, and Rational Reminder t-shirts.    Links From Today’s Episode: Meet with PWL Capital — https://calendly.com/d/3vm-t2j-h3p [https://calendly.com/d/3vm-t2j-h3p] Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582 [https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2]. Rational Reminder Website — https://rationalreminder.ca/ [https://rationalreminder.ca/]  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ [https://www.instagram.com/rationalreminder/] Rational Reminder on X — https://x.com/RationalRemind [https://x.com/RationalRemind]Rational Reminder on TikTok — https://www.tiktok.com/@rationalreminder [https://www.tiktok.com/@rationalreminder?_t=8oTz7ldhMc1&_r=1&fbclid=IwZXh0bgNhZW0CMTAAAR1Z4A-2rKqQTivvuyU1-PssL9xfJn5myyaps6kQypAwHm7aL66qSajEhI0_aem_puLPWAK_S3Gk2bEmdXjohg] Rational Reminder on YouTube — https://www.youtube.com/channel/ [https://www.youtube.com/channel/UCOErWFfNOQzXsgE7f5S_ULw] Rational Reminder Email — info@rationalreminder.ca [info@rationalreminder.ca]  Rational Reminder Merchandise — https://shop.rationalreminder.ca/ [https://shop.rationalreminder.ca/] Benjamin Felix — https://pwlcapital.com/our-team/ [https://pwlcapital.com/our-team/] Benjamin on X — https://x.com/benjaminwfelix [https://x.com/benjaminwfelix] Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ [https://www.linkedin.com/in/benjaminwfelix/] Cameron Passmore — https://pwlcapital.com/our-team/ [https://pwlcapital.com/our-team/] Cameron on X — https://x.com/CameronPassmore [https://x.com/CameronPassmore] Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ [https://www.linkedin.com/in/cameronpassmore/]  Dan Bortolotti on LinkedIn — https://www.linkedin.com/in/dan-bortolotti-8a482310/ [https://www.linkedin.com/in/dan-bortolotti-8a482310/]  Episode 358: Eli Beracha: An Academic Perspective on Renting vs. Owning a Home — https://rationalreminder.ca/podcast/358 [https://rationalreminder.ca/podcast/358]  Episode 214: Jay Van Bavel: Shared Identities and Decision Making — https://rationalreminder.ca/podcast/214 [https://rationalreminder.ca/podcast/214]   Episode 260: Prof. James Choi: Practical Finance — https://rationalreminder.ca/podcast/260 [https://rationalreminder.ca/podcast/260]  Episode 273: Professor Samuel Hartzmark: Asset Pricing, Behavioural Finance, and Sustainability Rankings — https://rationalreminder.ca/podcast/273 [https://rationalreminder.ca/podcast/273]   Episode 95: Scott Rieckens (Playing with FIRE): Finding Financial Education, Perspective, and Freedom — https://rationalreminder.ca/podcast/95 [https://rationalreminder.ca/podcast/95]  Episode 258: Prof. Meir Statman: Financial Decisions for Normal People — https://rationalreminder.ca/podcast/258 [https://rationalreminder.ca/podcast/258]   Bonus Episode - Prof. Meir Statman: A Wealth of Well-Being — https://rationalreminder.ca/podcast/2024/4/18/bonus-episode-prof-meir-statman-a-wealth-of-well-being [https://rationalreminder.ca/podcast/2024/4/18/bonus-episode-prof-meir-statman-a-wealth-of-well-being]   Episode 230: Prof. Robert Frank: Success, Luck, and Luxury — https://rationalreminder.ca/podcast/230 [https://rationalreminder.ca/podcast/230]   Episode 135: William Bengen: The 5% Rule for Retirement Spending — https://rationalreminder.ca/podcast/135 [https://rationalreminder.ca/podcast/135]  Episode 164: Comprehensive Overview: The 4% Rule — https://rationalreminder.ca/podcast/164 [https://rationalreminder.ca/podcast/164]   Episode 357: AMA #6 — https://rationalreminder.ca/podcast/357 [https://rationalreminder.ca/podcast/357]  Morgan Housel — https://www.morganhousel.com/ [https://www.morganhousel.com/]   ‘Renting vs. Buying a Home: What People Get Wrong’ — https://www.youtube.com/watch?v=j4H9LL7A-nQ [https://www.youtube.com/watch?v=j4H9LL7A-nQ]   MobLand — https://www.imdb.com/title/tt31510819/ [https://www.imdb.com/title/tt31510819/]  Ray Donovan — https://www.imdb.com/title/tt2249007/ [https://www.imdb.com/title/tt2249007/]  Animal Kingdom — https://www.imdb.com/title/tt5574490/ [https://www.imdb.com/title/tt5574490/]    Books From Today’s Episode:    Rich Dad Poor Dad — https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680194 [https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680194]    Self Help, Inc.: Makeover Culture in American Life — https://www.amazon.com/Self-Help-Inc-Makeover-American/dp/0195337263 [https://www.amazon.com/Self-Help-Inc-Makeover-American/dp/0195337263]    Papers From Today’s Episode:    'Motivated Numeracy and Enlightened Self-Government' - https://www.cambridge.org/core/journals/behavioural-public-policy/article/abs/motivated-numeracy-and-enlightened-selfgovernment/EC9F2410D5562EF10B7A5E2539063806 [https://www.cambridge.org/core/journals/behavioural-public-policy/article/abs/motivated-numeracy-and-enlightened-selfgovernment/EC9F2410D5562EF10B7A5E2539063806]    ‘Nevertheless, They Persist: Cross-country differences in homeownership behavior’ — https://www.sciencedirect.com/science/article/abs/pii/S1051137721000590 [https://www.sciencedirect.com/science/article/abs/pii/S1051137721000590]    ‘Rent or Buy? Inflation Experiences and Homeownership within and across Countries’ — https://www.researchgate.net/publication/379974645_Rent_or_Buy_Inflation_Experiences_and_Homeownership_within_and_across_Countries [https://www.researchgate.net/publication/379974645_Rent_or_Buy_Inflation_Experiences_and_Homeownership_within_and_across_Countries]     ‘Dividend Policy, Growth, and the Valuation of Shares’ — https://www.researchgate.net/publication/24102112_Dividend_Policy_Growth_and_the_Valuation_Of_Shares [https://www.researchgate.net/publication/24102112_Dividend_Policy_Growth_and_the_Valuation_Of_Shares]    ‘Chapter 3 - Behavioral Household Finance*’ — https://www.sciencedirect.com/science/article/abs/pii/S2352239918300046 [https://www.sciencedirect.com/science/article/abs/pii/S2352239918300046]    ‘Common Risk Factors in the Returns on Stocks and Bonds’ — https://www.sciencedirect.com/science/article/abs/pii/0304405X93900235 [https://www.sciencedirect.com/science/article/abs/pii/0304405X93900235]     ‘The Dividend Disconnect’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2876373 [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2876373]    ‘A Devil's Bargain: When Generating Income Undermines Investment Returns’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4580048 [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4580048]    ‘The Financialization of Anti-Capitalism? The Case of the “Financial Independence Retire Early” Community’ — https://www.tandfonline.com/doi/full/10.1080/17530350.2021.1891951 [https://www.tandfonline.com/doi/full/10.1080/17530350.2021.1891951]    ‘High Income Improves Evaluation of Life But Not Emotional Well-Being’ — https://www.pnas.org/doi/10.1073/pnas.1011492107 [https://www.pnas.org/doi/10.1073/pnas.1011492107]     ‘Income And Emotional Well-Being: A Conflict Resolved’ — https://www.pnas.org/doi/10.1073/pnas.2208661120 [https://www.pnas.org/doi/10.1073/pnas.2208661120]

Dr. Eli Beracha has recently been recognized by The Journal of Real Estate Literature as the world’s third best in research productivity, and today, we are honoured to be joined by this top industry expert to bring more clarity to the renting versus buying debate. We use Dr. Beracha’s ‘Lessons from Over 30 Years of Buy Versus Rent Decisions: Is the American Dream Always Wise?’ and ‘Housing Ownership Decision-Making in the Framework of Household Portfolio Choice’ papers as the basis for most of today’s conversation, beginning with why owning a home is deeply rooted in the perception of the American dream. Then, we discover how to measure the true price of home ownership, how the American dream and other psychological factors influence one’s decision-making, how hard assets perform compared to stocks and bonds, and why renting comes out ahead of buying nine times out of ten. We also learn why owning is for the inherently wealthy, the ins and outs of Dr. Beracha’s rent versus buy index, the rate of property appreciation versus stock appreciation, and how renting influences saving habits compared to owning a home. To end, we dive deeper into the risk-adjusted wealth accumulation of home ownership versus renting, and Dr. Beracha compares the efficiency of the real estate market to the stock market while detailing everything to take into account to be fully-equipped to make your decision to rent or buy.   Key Points From This Episode:   (0:00:00) Why Dr. Eli Beracha is one of the world’s best to discuss renting vs buying a home.  (0:05:32) Understanding why owning a home is deeply entrenched in the American dream. (0:06:10) The various aspects to consider when measuring the price of home ownership.  (0:07:57) Weather Dr. Beracha agrees with the adage “renting is throwing money away.” (0:09:36) What the price of a home should represent, and how psychology influences decisions.  (0:16:48) Unpacking Dr. Beracha’s 2012 paper subtitled, ‘Is the American Dream Always Wise?’  (0:19:51) Hard assets versus stocks and bonds, and why renting pips buying most of the time.  (0:26:00) Why many still choose to own a home despite long-term financial discrepancies.   (0:30:53) The ins and outs of Dr. Beracha’s rent versus buy index.  (0:39:46) Why homeowners are usually wealthier than renters even though renting is “cheaper.” (0:42:03) Property appreciation, stock appreciation, and the renter’s savings rate. (0:47:41) How home ownership influences saving habits compared to renting.  (0:49:46) The risk-adjusted wealth accumulation of home ownership versus renting. (0:58:40) Dr. Beracha compares the efficiency of the real estate market to the stock market.  (1:03:22) Everything you need to take into account to make your decision to rent or buy.   Links From Today’s Episode: Meet with PWL Capital — https://calendly.com/d/3vm-t2j-h3p [https://calendly.com/d/3vm-t2j-h3p] Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582 [https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2]. Rational Reminder Website — https://rationalreminder.ca/ [https://rationalreminder.ca/]  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ [https://www.instagram.com/rationalreminder/] Rational Reminder on X — https://x.com/RationalRemind [https://x.com/RationalRemind]Rational Reminder on TikTok — www.tiktok.com/@rationalreminder [https://www.tiktok.com/@rationalreminder?_t=8oTz7ldhMc1&_r=1&fbclid=IwZXh0bgNhZW0CMTAAAR1Z4A-2rKqQTivvuyU1-PssL9xfJn5myyaps6kQypAwHm7aL66qSajEhI0_aem_puLPWAK_S3Gk2bEmdXjohg] Rational Reminder on YouTube — https://www.youtube.com/channel/ [https://www.youtube.com/channel/UCOErWFfNOQzXsgE7f5S_ULw] Rational Reminder Email — info@rationalreminder.ca [info@rationalreminder.ca]Benjamin Felix — https://pwlcapital.com/our-team/ [https://pwlcapital.com/our-team/] Benjamin on X — https://x.com/benjaminwfelix [https://x.com/benjaminwfelix] Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ [https://www.linkedin.com/in/benjaminwfelix/] Dan Bortolotti on LinkedIn — https://www.linkedin.com/in/dan-bortolotti-8a482310/ [https://www.linkedin.com/in/dan-bortolotti-8a482310/]  Episode 325: Addressing 200+ Comments on Renting vs. Owning a Home — https://rationalreminder.ca/podcast/325 [https://rationalreminder.ca/podcast/325]   Episode 196: Sebastien Betermier: Hedging, Sentiment, and the Cross-Section of Equity Premia — https://rationalreminder.ca/podcast/196 [https://rationalreminder.ca/podcast/196]  Dr. Eli Beracha — https://www.theberachateam.com/ [https://www.theberachateam.com/]  Dr. Eli Beracha on LinkedIn — https://www.linkedin.com/in/eli-beracha-b8082250/ [https://www.linkedin.com/in/eli-beracha-b8082250/]  Dr. Eli Beracha on Instagram — https://www.instagram.com/dreliberacha/ [https://www.instagram.com/dreliberacha/]  Tibor and Sheila Hollo School of Real Estate | FIU — https://business.fiu.edu/academics/departments/real-estate/ [https://business.fiu.edu/academics/departments/real-estate/]   KBIS Capital — https://kbiscapital.com/ [https://kbiscapital.com/]  Journal of Real Estate Literature — https://www.tandfonline.com/journals/rjel20 [https://www.tandfonline.com/journals/rjel20]    Papers From Today’s Episode:    ‘Lessons from Over 30 Years of Buy Versus Rent Decisions: Is the American Dream Always Wise?’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1814227 [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1814227]    ‘Housing Ownership Decision-Making in the Framework of Household Portfolio Choice’ — https://www.tandfonline.com/doi/abs/10.1080/10835547.2017.12091472 [https://www.tandfonline.com/doi/abs/10.1080/10835547.2017.12091472]  ‘Findings from a Cross-Sectional Housing Risk-Factor Model’ — https://www.researchgate.net/publication/236023682_Findings_from_a_Cross-Sectional_Housing_Risk-Factor_Model [https://www.researchgate.net/publication/236023682_Findings_from_a_Cross-Sectional_Housing_Risk-Factor_Model]