Episode 149: Why More Learning Isn’t Growing Your Wealth (And What To Do Instead for Financial Freedom)

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Is your constant desire for continued learning actually holding you back from financial freedom?

It’s possible that your are stuck in a cycle of constant learning without real progress—and you jump from strategy to strategy without giving anything time to work—this episode is for you. Many wealth journey and F.I.R.E seekers fall into the trap of chasing new ideas but never letting compounding take its full effect. It’s time to flip that script and make your learning work for you.

In this episode, you’ll discover:

• The two biggest missteps wealth builders make when trying to gain momentum

• How to balance exploration and execution using a “20% rule” without sabotaging your core strategy

• A simple mindset shift to finally move from idea collection to meaningful action and real results

Hit play now to stop spinning your wheels and start building sustainable wealth with focused, intentional strategies.

Resources:

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• Discover which phase of wealth creation you are in. Take our quick assessment and you’ll receive a custom wealth-building pathway that matches your phase and learn our CRA compliant tax optimized strategies. Take that assessment here.
• Dig into our Ultimate Investment Book List
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Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

• …taking a salary with a goal of stuffing RRSPs;
• …investing inside your corporation without a passive income tax minimization strategy;
• …letting a large sum of liquid assets sit in low interest earning savings accounts;
• …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting cordporate passive income taxes at greater than 50%; or,
• …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

Achieving financial independence requires smart planning, especially when it comes to growing your net worth and generating passive income. We explore conservative leverage strategies such as the Smith Maneuver to convert non-tax deductible interest on your primary mortgage to tax deductible interest as well as conservative leveraged life insurance strategies including immediate financing arrangements (IFA). For business owners, navigating the complexities of corporate structures, tax implications, and investment strategies can feel overwhelming. From understanding capital gains rules to leveraging life insurance for wealth optimization, the right approach can transform your financial future. By aligning your strategy with tax-efficient tools, you can unlock the full potential of your business and investments, ensuring sustainable growth and long-term independence.

Transcript:

Jon Orr: Have you ever read a series of books or a number of books and then after reading them and then reflected back on, I put any of that to use? Or did I put any of that to action? A lot of times when we think about some of the learning that we continually are doing, we have to think about we want to be learning. And I think we all enjoy learning. You’re listening to a podcast right now.

learning and trying to learn, but when is the right time to put that into action? And when do we think about our starts? When do we think about our ends? And what’s going on in the middle? We want to think about that. And in this episode, we’re going to dig into what draws you into your latest idea and what is holding you back from actually applying what you’ve learned.

Kyle Pearce: Stick around and we’ll not only share the two common missteps that Canadian wealth builders make along their financial freedom journey and what you can do to ensure that you don’t get stuck spinning your wealth building wheels. Here we go.

Jon Orr: Okay, Cal, so let’s unpack what we were gonna say in the intro there because I know about you, but I think one of the things I did for a long time was I would boast that I read a book a month or I’m reading a book every couple weeks and these books are non-fiction books. They’re business books or they’re strategy books or they’re self-help books, right?

Kyle Pearce: self-help and all of that wonderful stuff.

Jon Orr: Like I, I, for a long time, I found them enjoyable and I found them like, you know, cause you would, you would think about different things and it stretches your mind a little bit. It makes you reflect. But I think that’s the part right there. It’s like, where, when do we apply that learning and what, when, you know, are we applying the learning we’re having or are we just like letting it go in our brains and, know, and out our brains? Cause I think for a long time I did, I would, I would read these things and then say, Hey, I read so many books this year. I’m like, but I didn’t put all the things in action.

And I think that brings up some interesting questions about when is the appropriate time to put learning into action? How much learning should we really be focused on? Because I think learning can be really exciting. New ideas are really exciting. And I think when we emphasize and highlight those new ideas, it makes us want to either try those new ideas

or think about those new ideas, but then sometimes I think about like, well, when do we stop trying new ideas? Like even if I am reading all those books and putting those things into action, am I hurting myself by switching focuses all the time or, you know, or I’m kind of, you know, moving this needle and moving that needle and moving this needle, but not really focusing on what really counts. And I think, you know, even though new beginnings and new strategies are exciting, usually the middle.

You know, like the work, once you put a new strategy in a place, it becomes monotonous or the work is there and that becomes boring. And I think that influences us to pick up the next book and find the next idea. So I’ve changed in a way lately and I want to unpack that with you here today is because I feel like I’m reading less books but trying to make those books more impactful for the work that we’re trying to do.

Kyle Pearce: I love it. And I think back to the book Power of Moments by the Heath brothers. And in that book, they highlight how moments that you remember are most often starts and ends. So you think about New Year’s. It’s the end of the year. It becomes a special moment or the end of a season or the beginning of a season. And when we talk about these things, whether it’s sports, whether it’s a

business, whether it’s something in your family, these are things that stick out because as you mentioned, they’re exciting, right? They give you that little boost of energy. They get you motivated. And you know, when we think about this from an investment side of things, and I always also think like those who are incorporated business owners, like your business is an investment also, right? So I’m kind of clumping these things together. We find that what ends up happening is, you know, you get business ideas and people want to start a business. You know, it’s funny because

out of all of the businesses out there, the vast majority of them actually don’t last longer than a year. Right. And I mean, that tells you something. It’s probably less about the person who’s running the business or it’s maybe even less about the business idea. It’s about sticking to it, right? It’s about, you know, that middle part that you’re referencing. It gets really excited. The first thing I hear people say when they want to start a new business ideas are like, what do I need to do to get incorporated?

What do I need to do to register the business name? What do I need to do to get a domain name for the business, you know, on my website? Like those are all the exciting things because you’re like, I, it’s all new, I have a business now. And the same is true. When we look at the wealth building game, right, we think about all of the different ways that we might be able to because again, building a business is a way to build income, build wealth, actually having investments, whether they’re passive or invest or active investments.

is exciting because it’s something new. And you’re like sort of thinking about like, wow, if I only applied this strategy, things would be great. But then that beginning phase sort of like fades a little bit, right? It becomes boring. And you know what, and it’s like the implementation, where, know, john, it’s funny, because you’re the implementer on our team, I’m the guy that gets excited, like I I’m the big thinker, I love doing the learning. But you know, without you,

Jon Orr: Yeah, it becomes boring, you know? You’re the big thinker. The dreamer.

Kyle Pearce: I would probably be flailing around and I still do. still find myself, you know, finding new ideas. I’m a fact finder. I love learning about all of these things. But the key is being aware that while learning is great and we’re not discouraging people from continuing to learn one of the biggest hiccups is getting and this is the misstep that we all have. It’s almost like, you know, when we hop from idea to idea, but we actually don’t

implement anything. And therefore, we’re kind of sitting still like we might have this wealth of knowledge, right? We have this idea of like passive investing or real estate investment, or private placements or options trading or, you know, starting a new business, whatever it is that we’re doing. The problem is, is that, you know, you all of a sudden get this new idea becomes exciting. And you think if I only did that, then things would be better.

But the problem is, is you continue to hop around going, well, if I only did this, if I only did that. And then at the end of it, you go, shoot, if I only did that and I’ve done nothing and therefore I’ve wasted a ton of time not allowing the most important piece to take place, which is compounding, right? And this is one of those pieces. So today we want to unpack a little bit about those missteps. So again, the starting is great.

The other one’s the ending. You know, when we talk about common missteps, it’s about the ending. Like when, when I get to X, Y, or Z, it’s going to be exciting because I’m going to sell Bitcoin for a million dollars or I’m going to sell my business for X number of million dollars. But once again, it’s like that middle part. If we don’t do all of that work, we don’t get to that end point. So that first misstep is going to be, you know, it’s almost like distraction overwhelm, maybe analysis paralysis.

But then the second misstep is sort of like not actually doing the work to get you to that eventual exciting point, which is I’m going to summarize it all in financial freedom, right?

Jon Orr: Right, yeah, yeah. And I think a key phrase for me for the last couple years has, and I’m not sure exactly where I heard it, because I didn’t state this, but it makes a lot of sense, which is patience is, like the definition of patience is figuring out what to do in the meantime. Like when you settle on this is a great strategy to try and it becomes exciting, what happens is, like you said, is it becomes a little bit monotonous or boring when the details are worked out.

And now it just means like us sticking to the plan. And let’s say it’s it’s a portfolio investment strategy where you do a lot of research and you’re like, I’m to take this ETF strategy. I’m going to be investing in these. then all of a sudden, now the learning is over. And, and usually you want to fill that time. And so you start learning new things, but then the learning is over and now the application has started. So now the, the, sticking to the plan is there where.

Maybe it’s you investing a blank amount of money every single month because you’re doing a dollar cost averaging, or maybe you’re trading on a regular basis and now it’s become monotonous because you’re looking at say, levels, heat levels, and you’re making moves on this day and that day, or maybe you stick to a plan where you’re only doing it every single week or every single month, or maybe it’s once a year you’re rebalancing. it becomes sometimes, especially if you’re in that mode of learning something new and then putting that new thing into action, what happens is because the,

the monotonous of the actual action isn’t exciting anymore. Your tendency is to switch. Your tendency is because you’re now filling your time with the next new thing or the next book or the next new idea or the next portfolio strategy is you aren’t giving that compounding effect, the compounding period enough time if like all of a sudden if it is a portfolio strategy, we’re like, I’m going to try this new idea because I’ve spent six months doing this and I’m like, I’m not sure if it’s like working, but the working is the length.

And the working is the time, you know, the working is like the waiting period of like letting it work. And you’re like, I’m missing out. I’m missing out on the on the boat here. If I don’t apply this new strategy, or I’ve learned about options, but I got to want I want to put those options strategies into play because I just learned about them. But then you switch focuses and the switching of the focuses interrupts your compounding period. So, you know, you want to make that learning happen. It’s exciting for you, but you have to realize and I think that’s the biggest

you know, one of the biggest recommendations that we’ve had and we want to pass on to you is just being aware that that learning cycle of learning, applying, and then learning something new and then switching focuses is there. And it’s a draw. by recognizing it, because this is a conversation you and I have regularly about should we switch focuses at this point or should we pivot at this point?

Or should we introduce systematically the changes we want to see in this new strategy? Compared to like doing what we said we would do, you know, like we, because we are big thinkers and because we also focus on getting, you know, worrying about what’s happening when we’re waiting for the next thing to happen, like patience, then we want to make sure like we’re balancing that well. But I think the first recommendation around kind of what you want to do is just be aware that it’s enticing.

to make the switch. what you want to do is just the awareness will help you go, no, I said I was going to stick to it. I said I was going to give it this length of time. And maybe, and this is maybe my recommendation, is maybe you have built into your plan, and this can be a consistent plan moving forward, is that let’s say, and I’m going to make up a number here because I just don’t want to give you any sort of numbers that you’re like, you’re going to be like,

John said I should be looking at this much of my portfolio, right? But the way I like it is create a chunk. If we are talking investment strategy, then, and this could be a business strategy too, right? It could be in business. It’s like, I’m gonna switch focuses from goals. I’m working on this goal in business, but then I’m gonna switch goals. It’s like the switching, again, causes the interruption of the compounding you were expecting to happen in your business. Could be in life, it doesn’t matter. But if you think about whatever,

Kyle Pearce: This is your fault, John. Yeah.

Jon Orr: domain you’re thinking about right now, then maybe there’s a small chunk of that time, of that focus, of that portfolio that is earmarked as experimental or kind of, in the education world we used to call it genius time. It was like this time where we’re like, is the time and the flexibility we give ourselves.

to learn new things and to try new things without switching the main focus we said was important. And then, like, let’s say it’s 5%, let’s say it’s 10%, let’s say it’s 2%. It doesn’t matter, you pick. But then maybe that plan is over time, you’re like, okay, I’m gonna develop a rule-based system that says I’m gonna implement if my genius time or my experimental component starts to prove successful.

and I have consistent results there, maybe I have a rule where I slowly increment and switch over those things into the main portfolio or the main work. In the business world, people do this by quarters, right? Like what’s the goal for the quarter? What’s the goal for the year? What’s our three-year goal? What’s our five-year goal? Like that gives you opportunity to switch focuses per quarter. In the investment world, you might wanna stretch that out or you might wanna shorten it. But depending is give yourself kind of those leeways to go,

I’m going to slowly switch some focuses based off new learning, but I’m not going to do an all shift one way or the other, right? But so, so the big recommendation here is understand that this is a reality and especially you listening to a podcast right now, you’re probably like us who learn a lot of things and want to apply those things, but then know what’s the system you’re building. We’ve talked about that in previous episodes. Like you don’t rise to your goals. You fall to your systems. Like what’s the system you’re building? to slowly work those into your main portfolio or just keep it as experimental, but have that system.

Kyle Pearce: Right. And you know, something he said there, which I think is really important is in order for you to do this 20 % time, 10 % time, whatever the number is that you’re recommending, there has to be something happening in the meantime. So what I think is really key here and you’ve you’re saying it, you know, you this, this is impossible to happen if you don’t do this, but I want to make it very explicit is that there has to be something already happening while you’re doing this learning.

So what I worry for many clients is that oftentimes it’s almost like they’re like, I’m just gonna like wait until I’m done the learning. And that is a really, really tough move because what you’re suggesting is it’s almost like you’re gonna sit with, I always call it the cash under the corporate mattress or the cash under your own mattress at home and wait until you know enough and you have the right strategy, the perfect strategy to get in.

So the real question is, like, what’s happening in the meantime? What is what I’ll call the most basic level of investing that you could be doing? And for everyone, that’s different. For me, it’s real estate. Like I do that and I feel confident in that. So I continue to invest in real estate in the meantime, while I’m doing some of this learning, some of this 10, 20 % time over here. And I don’t just, you know,

it completely eject on real estate because I want to add another strategy to my portfolio, right? For someone else that might be mutual funds at the big bank, right? You know, you’re like, I don’t want to do it. I know that people tell me that, you know, the fees are high or the this and that and all of these things. It’s like, guess what? You need to be doing something in the meantime, because that learning time you’re taking that is compounding time. That is time that your assets as of today could be doing something now.

I don’t want you to blindly take all of that cash that you’re sitting on and throw it into the stock market, but you should be analyzing and thinking like, what’s my lowest level of entry here that I can be in something that matches my risk tolerance and my risk capacity? You heard John Deguy when he was on the episode. I love the sort of framing of this idea is that not only do you have to sleep at night, right? Your risk tolerance.

You also have risk capacity. Like you can’t follow this advice I’m giving you right now. Remember, it’s not advice. You can’t follow this idea and just take all this money and throw it into something randomly because you might not have the risk capacity, meaning you might need that money soon. If you need that money soon, you can’t just take it and throw it into real estate. That’s a bad move or you can’t just throw it into equities. So you have to be calculated in doing this, but what do you know best now? Making sure that something is happening there.

And whether it’s 80 % of it or 70 % or whatever that number is, whatever that strategy is, you need to be doing that in the meantime. And you can always get better and better at it. And guess what? Unless you’re already say retired and living on passive income, you’re gonna make more money every month doing whatever it is you do in your business, your T4 job, whatever it is, and you can continue to contribute. And that might mean,

that these other ideas start to become bigger parts of your investment portfolio, right? It becomes a bigger part of your asset allocation. But what we don’t want to see happening is people sort of like staying and waiting for, you know, the answer to arrive because that is definitely a problem. And, you know, the piece that I think is really important for people to be thinking more about the reason you’re intrigued in investing and wealth building to do this learning is usually

You’re drawn to greater reward, right? You’re drawn to greater return. With that comes oftentimes more risk. We believe the more you understand, the less risky something becomes, but it doesn’t completely eliminate risk, right? Anything can happen. The problem is, is that a lot of people are so excited at that return, they’re excited at that reward and they want to earn.

X number of percent in return when in many cases that actually isn’t super realistic, whatever that number is. For example, we’ve used the S and P 500 and a lot of examples. Like if you did investments over a 20 plus year period, really the if we looked at all 20 year periods, you’re only looking at somewhere around 8 % a little higher than 8%. We look at the entire process or the entire time the S and P has been around.

been more like 10%. But guess what? Very few people have actually achieved that. Why? Because they’re not in for the whole time, right? And you know, sometimes they’re in and they’re out. Sometimes when markets dip really hard, they wait for the worst moment, then they pull it all out on the sideline, they wait for the you know, the rip to come back, and then they put the money in. So the vast like the reality is, is that a lot of the things that we’re expecting in terms of returns are actually holding us back from doing the thing that’s going to be most helpful to you, which is

getting it working, getting it compounding. So what is that foundational case for your money so that you can at least get yourself to a place where you are confident that if you stuck on this path, right? If I stick on this path and this path alone, that I will at least have a base case for my financial freedom numbers that I’m after. And then any additional investments that we’re making, anything above that base case that’s more conservative, less volatile,

whatever you choose for that asset, now you can start focusing on this 10 20 % time to start going, okay, where is a little bit of this risk on going to go, and I can slowly move the needle, I can slowly move the dial on it. But here’s the part that’s really sad is that for many people, it’s a hop from one to the next to the next. And none of that extra sort of risk on sort of investing takes place.

It’s not an either or, we can’t be high risk and no low risk. Like you gotta make sure that you take care of this foundational base and then you can start exploring some of these more risk on ideas and experiments and so forth. Keep yourself engaged and potentially give you some of that extra what we like to call as gravy on top of your plan.

Jon Orr: Love it. I think the secret sauce I want you to remember is that the learning you’re trying to do and the learning you like to do, it’s on a sliding scale. It’s on a continuum with the application, and which means also the waiting time, the actual work in the middle of what’s happening in the meantime. And the more learning you do, the more you want to apply. But the less learning you do,

usually the more the less time, the less new things you have to actually make applications on or put into action. So, but you want to have that sliding scale because we all want to learn things and we all want to make sure that we’re not missing, say a key strategy or making sure that we can get some gains. But that sliding scale is that part where we figure out what is the base case, what is our foundation versus our experimental or 10%, 20%, 2 % time.

Like that’s the big kind of secret sauce here is that you have a sliding scale between application and the waiting time and learning. And you just have to find the right mix for you and feel comfortable with it. But it’s definitely something we do have to think about. Otherwise, we are doing what Kyle just said. We’re hopping around and we’re not letting compound take its effect.

Kyle Pearce: So my friends, if you are looking for a little bit of extra guidance, perspective, some ideas based on your specific scenario, should reach out to us over at CanadianWealthSecrets.com forward slash discovery. And you can go through, figure out what phase in the journey you are in. You’ll get that immediately by running a quick little survey, but then you’ll also have an opportunity to book a call, a free discovery call.

We’ll work with you try to give you a next best step in your journey over at Canadian wealth secrets.com forward slash discovery. And of course, if you’re an incorporated business owner, and you’ve been earning that active income and you know, retained earnings are starting to pile up and you’re starting to wonder, you know, why did I incorporate for you know, in order to save taxes, it feels like I’m going to get punished here. Let us lead you down that path so you can understand how you can

make the most of those retained earnings. This would be some great 20 % time for our incorporated business owners by heading over to CanadianWealthSecrets.com forward slash masterclass and you can hop into our free self paced masterclass today. Again, CanadianWealthSecrets.com forward slash masterclass.

Jon Orr: All right, Canadian Wellseekers, we’ll see you next time.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

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