Episode 29: Is Your Big Bank Investment Strategy Paying Off?

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As we cross the 6 month mark of the Canadian Wealth Secrets Podcast, we are starting to recognize that we have many Invested Students who are eager to diversify their investment nestegg across different asset classes like real estate, stock investing, options trading and safer insurance products, but they haven’t taken care of their current investments with their “Big Bank”. 

In today’s episode, Jon Orr and Kyle Pearce dig into what millions of investors have the majority of their investment funds tied up in: big bank mutual fund products. Before you dig into analyzing that next real estate deal or doing a margin of safety analysis on that tech stock that is sure to skyrocket, let’s ensure we understand what your big bank financial advisor is pushing on you and what you’re giving up when you blindly follow their advice.

Resources:

• Pervasive sales culture at Canadian banks designed to push customers into high-fee products – The Globe and Mail
• The Canadian Wealth Secrets Wealth Building Booklist
• Canadian Wealth Secrets Mortgages
• The Infinite Banking Concept page on the Canadian Wealth Secrets website
• Download our Wealth Building Blueprint

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00:00:00:15 – 00:00:20:21
Kyle Pearce
The reality, though, is I think being open and honest with people about that is really important. It shouldn’t be all about. So on the buyer’s side or on the person who’s going to receive the funding from this mortgage, it shouldn’t be about them making sure that you’re getting the lowest commission. And it shouldn’t necessarily be about them getting the lowest rate.

00:00:20:21 – 00:00:43:18
Kyle Pearce
It should be about all of the other factors. Right? There’s prepayment penalties, there’s flexibility, There’s length of term. There’s so many other things to consider. And I think when you’re open and honest about how that’s happening, I think there’s something really important to be said about that. There are going to be times where you’re going to be compensated more because you use this product.

00:00:44:01 – 00:01:10:16
Kyle Pearce
But the goal is the moral compass side of things is because that’s the right product for that particular individual. And whereas at the bank, it’s almost like a lot of this is hidden, it’s swept under the rug.

00:01:10:23 – 00:01:15:19
Jon Orr
Welcome to the Investor Teacher podcast with Kyle Pierce, Matt Bigley and John or.

00:01:16:07 – 00:01:27:02
Kyle Pearce
Get ready to be taught as we share our successes and most importantly, our failures encountered during our real life lessons Learning how to build generational wealth from the ground.

00:01:27:11 – 00:02:08:10
Jon Orr
Up. Welcome, Welcome Investor students to another episode of the Investor Teacher podcast, where we help you build your wealth. And hey, we’re here to talk all things about your finance is and where you’re putting your money and how you’re choosing to invest in certain products. And who represents you, I guess, is one of the big themes we’re going to talk about today and thinking about, I guess a story about myself is that when I got my first job and got all your paychecks coming in and corner titling, well, now I worked at Home Depot and I pushed carts for a long time, but I guess I’m talking about my first career, which is when I

00:02:08:10 – 00:02:38:08
Jon Orr
became a teacher and I moved back to the country. I taught overseas in the Caribbean for my first couple of years. But when I came back with my wife, we moved to the area where she’s from because we don’t live in the area where I’m from, which is Kingston, Ontario. We live close to Windsor, and my wife’s parents, heavily owned farms, had a lot of investments and we’ve talked about my history in the past with my parents, and my experience with finances was very little, mostly because I think my parents relied heavily on their pensions.

00:02:38:16 – 00:03:00:17
Jon Orr
Not a lot of discussion about investing or planning for wealth building. So when I moved to this area with my in-laws being 24 years old, 25 years old, my in-laws were like, We got to get you set up with your financial advisor. And so we drove to their bank, we drove to RBC, we drove to that bank that says, like this is your personal financial advisor.

00:03:01:04 – 00:03:23:18
Jon Orr
And so I was like, That’s amazing. I have a financial advisor. And so I trusted this financial advisor in everything I did. And then later on. Fast forward 15 years, ten years, I’m talking about my net financing with you, Kyle, and come to realize, I think my financial advisor was doing the best job they could as long as I chose products from that bank.

00:03:24:00 – 00:03:44:14
Kyle Pearce
Mm hmm. So true. So true. And actually, this came up in a recent call with invested student where they were seeking some different ways to get into real estate. And they were interested in infinite banking, which, you know, when everyone listening knows I’m a massive fan, probably obsessed. I get obsessed with things when I’m really, really interested and intrigued by them.

00:03:44:14 – 00:04:20:19
Kyle Pearce
So we got in a great discussion and then it’s sort of landed back where you’re describing your experience, John, where this person actually has, I’m going to say, a fairly significant amount of capital with their quote unquote investment advisor and that investment advisors at one of these big banks. And here in Canada, we have the big banks and oftentimes a large percentage of the population has checking accounts and so on, savings accounts, maybe even mortgages through these big banks, and then they offer financial services.

00:04:20:19 – 00:04:52:05
Kyle Pearce
But the part that people often miss is that when they sit down with these advisor and like you said, John, I think you nailed it. They’re doing the best they can given what they know, what they understand, and also what they’re able to do. And that is sort of the big piece that we wanted to share today with the audience is that when you’re working with a big bank, you are essentially being helped within a bubble and there are options in that bubble.

00:04:52:05 – 00:05:26:13
Kyle Pearce
So don’t get me wrong that there aren’t options for you and that there’s probably this product over here is a lot better for you than maybe this product over here based on the needs analysis they might do with you. But ultimately, at the end of the day, you are limited to their own little bubble. And you’ll notice that never once have you had a discussion, or at least at depth as to how maybe real estate might impact your portfolio unless it was a right which is offered in their little bubble?

00:05:26:13 – 00:05:44:11
Kyle Pearce
Right? I’m not going to pick I’m going to call ABC Bank because I don’t want us to get in any trouble here. Let’s pretend ABC Bank there’s actually a bank that does have three letters in its name, but they’re different letters, so we’re not going to say it. You sit down at ABC Bank and that investment advisor I remember having this discussion.

00:05:44:14 – 00:06:06:19
Kyle Pearce
My sister actually asked me to come in because she had this investment meeting. They had this regular meeting. They’re trying to get you to come in so they can continue the relationship. So no, like can trust and all of the things that are important with any sort of relationship, but especially in business and investing. And she’s like, I really don’t know if this is the best fit for me.

00:06:07:00 – 00:06:22:02
Kyle Pearce
And she was talking about real estate at the time. She was interested in real estate. So when I came into the meeting, I asked a bunch of questions. I tried to be very coach like, so I was just asking questions. I wasn’t stating anything. I didn’t come in and try to puff my chest and say, I do this or I do that.

00:06:22:10 – 00:06:44:00
Kyle Pearce
I really just wanted to come in and sort of get a sense as to what was being offered. And my sister had said, I’m interested in purchasing a investment property. And this particular person actually sort of went down the script of the risk, almost like, let’s not go here in what would be a lot safer, which actually they’re not lying.

00:06:44:00 – 00:07:10:08
Kyle Pearce
What would be safer is maybe a reat REIT, which is like a fund of real estate investments, but obviously the returns are lower, the fees are higher and it’s actually a re from that particular bank. So that bank has kind of put together that fund which they’ve selected. And so on and so forth, which also makes them a lot of money on the other end.

00:07:10:08 – 00:07:40:16
Kyle Pearce
So ultimately at the end of the day is it better than say, blindly investing your money? Absolutely. But I would argue, and I think the purpose of this episode here today is that if you are listening to this episode, you’re someone who could probably be better served by opening and expanding outside of that bubble. People who are stuck in that bubble and are happy and well served in that bubble are actually probably not listening to this episode, and therefore that might be their best option, right?

00:07:40:16 – 00:08:07:02
Kyle Pearce
Like because it would be easy for me to go in and say, Hey, talk to this person over here and say, you know what, You shouldn’t be investing with the big bank because their fees are high and you can do better over here and here and here. But ultimately, at the end of the day, if they don’t know what it is that they’re doing and they really don’t want to have anything to do with the decision making process, then maybe the fees and the lower returns is worth their time and effort.

00:08:07:02 – 00:08:46:16
Kyle Pearce
However, you’re listening to a podcast where we talk about investment, real estate. Interesting creative strategies. So that would suggest to me that anyone listening to this podcast, if you have funds with a big bank, that’s probably your first step before you go try to find an investment property or before you try the infinite banking process or you try the Smith maneuver, any of these other things we’re talking about, it’s like, Hey, let’s take care of the easy thing, which is learning about what the bank is actually doing, why it might not be a good fit for you and what you might consider doing and said you notice the big might there, because if you’re willing

00:08:46:16 – 00:09:00:03
Kyle Pearce
to do the work, there’s definitely better options and higher returns and less on the expense side that are really, I would say, minutes away from you. So that’s what we’re going to dig into here today.

00:09:00:04 – 00:09:26:15
Jon Orr
Yeah, I find that interesting in this scenario about your sister with that particular salesman, I guess I’ll use that term when we think they’re financial advisors or financial planners. When she suggested real estate as an investment option, I’m really surprised that that person didn’t pivot immediately and think this is a great actually option because we can provide you a mortgage when the time is right and we have that product over here.

00:09:26:16 – 00:09:48:14
Jon Orr
Right. And so maybe there was some sort of incentive to stick with the investing side of options like the stock market or mutual funds. Maybe this particular person was had a vested interest. And that’s one of the big issues when you’re working with your bank. We just read an article from the Globe and Mail titled Persuasive Sales Culture at Canadian Banks, designed to push customers into high fee products.

00:09:48:14 – 00:10:12:11
Jon Orr
And the big banks have been basically systematizing. The process for the people that you think are your financial advisors. But they have been given huge incentives. Often their pay structure is built upon the commissions almost sometimes at 100% commission to get you to buy their product. And I think normally we would think that that’s okay or part of our world.

00:10:12:11 – 00:10:38:10
Jon Orr
But I think here in Canada we have been heavily in the past relying on our big banks to be our trustworthy advisors, and all of a sudden it kind of comes out that says for two decades now, the big banks have been kind of changing policies to incentivize the commission and to keep people buying their products. I know that even if you went into your online banking and if you had mutual funds set up in there, you can see your investments.

00:10:38:17 – 00:10:58:03
Jon Orr
You may find it tough to choose a product on the self-serve side of things. That is not one of your big bank products, and that’s because they’re pushing that commission structure. So I think you brought up one of the big takeaways for Sheryl Reddy is to think about, okay, I have a lot of my products and we are selling products.

00:10:58:03 – 00:11:24:24
Jon Orr
We have a lot of our investments at one of the big banks. Should I think about who is serving me? And the purpose of those choices that I’ve made is a mutual fund. The best thing for me? Do I want that managed fund or could I get a better return? Or maybe I have a better option by going to a direct investing account and I can choose maybe one of the index funds ETFs that kind of do the same thing for me.

00:11:25:05 – 00:11:49:12
Jon Orr
And I don’t have to pay those fees. Or am I happy with, like you said, maybe I’m just happy with having it all be managed under the same umbrella. We have to make those decisions right? We have to say what is the right thing for me, What is the right option for me? And I think the biggest takeaway I’ve learned in the last five, ten years is that there are other options than just sticking with your trusted your big bank that you’ve done banking with this whole time.

00:11:49:12 – 00:12:09:24
Kyle Pearce
Absolutely. And again, we’re speaking to an interesting audience here. This isn’t your everyday audience. What I would say, first and foremost is if you’re listening to this podcast and you haven’t been putting money into some sort of investment vehicle, then your first step probably is just go to your big bank and say, Listen, I’ve got to start this thing right.

00:12:09:24 – 00:12:29:05
Kyle Pearce
Just get it going. You can always move it later. But again, those who are listening, I’m going to guess that you have investments going on in some way, shape or form. It’s not the first time you’ve thought about investing. You’ve probably understood that, Hey, the rule of thumb is 10% of your income should be paying yourself. Paying into an investment.

00:12:29:05 – 00:12:47:15
Kyle Pearce
I would argue if you can stretch that even further, right, live under your means if possible, and put more money in there and just get that going if you haven’t yet. Because again, you’re big bank. It’s not like they’re going to steal from you. Some people I’ve seen articles where they say, like your investment adviser stealing from you.

00:12:47:17 – 00:13:07:24
Kyle Pearce
Okay, we’re going a little far there. They need to be paid for what they’re doing. The one thing, though, that I think is really important is that we need to understand what it is we’re doing and what we’re getting. So, for example, if I’m going in blind to the bank, I feel like if you go in blind and your bank is taking care of everything for you, they’re providing a service.

00:13:07:24 – 00:13:32:10
Kyle Pearce
The part I don’t like and you’ve already articulated from this particular article is that it feels like they’re intentionally hiding some of the story. Right. And I want to talk about you and mortgages, John, because you have your mortgage license and you do mortgages and you’re a math teacher. You love numbers. And for you, yeah, it’s like a little game for you that you get to play to try to help people find the best opportunities for them.

00:13:32:10 – 00:14:05:05
Kyle Pearce
And it’s not always great, but the thing is, you get paid based on the mortgage amount through a commission. And actually there are some lenders that pay a higher commission than others. And the reality, though, is I think being open and honest with people about that is really important. It shouldn’t be all about so on the buyer’s side or on the person who’s going to receive the funding from this mortgage, it shouldn’t be about them making sure that you’re getting the lowest commission and it shouldn’t necessarily be about them getting the lowest rate.

00:14:05:05 – 00:14:28:02
Kyle Pearce
It should be about all of the other factors, right? There’s prepayment penalties, there’s flexibility, there’s length of term. There’s so many other things to consider. And I think when you’re open and honest about how that’s happening, I think there’s something really important to be said about that. There are going to be times where you’re going to be compensated more because you use this product.

00:14:28:10 – 00:14:50:03
Kyle Pearce
But the goal is the moral compass side of things is because that’s the right product for that particular individual. And whereas at the bank, it’s almost like a lot of this is hidden, it’s swept under the rug. And I want to reference our book list for a second overCanadian Wealth Secrets dot com forward slash books in the stock investing section.

00:14:50:03 – 00:15:31:05
Kyle Pearce
You’re going to see two books there that for anyone who is, let’s say, dealing with maybe they have an RRSP, maybe they have a tax free savings account, maybe they have their own unregistered account at their bank. And this is true in the U.S. for one K IRA, whatever it is that you’re investing in, if you’re going through your financial advisor, through a product that’s offered through their company, which again, if you’re at A, B, C bank, you’re getting probably like you said, that ABC Mutual fund, the balanced ABC Mutual fund, the high growth, ABC, the Canadian, the U.S., whatever, all of those things, they have high fees.

00:15:31:05 – 00:15:59:16
Kyle Pearce
And in reality, oftentimes the fund itself under performs the actual market. Right? So this is something that’s really interesting. So not only are you losing on the fees side, but you’re actually losing on the performance side as well. So basically you’ve got stock pickers, right? So the ABC Corporation in downtown Toronto, or if it’s in the U.S., it’s in New York City on Wall Street, they’re sitting there trying to manage this fund.

00:15:59:18 – 00:16:27:18
Kyle Pearce
Right. So, again, they’re not ripping you off. They need to be paid to do this work. But the problem is, is that there’s other funds that do this same thing that can help you achieve the same goal with a much lower expense ratio. And it actually does what the market does because it is the market. So we’re going to talk a little bit about what we call index funds, which are available, and they’re open for anyone to purchase at any institution.

00:16:27:19 – 00:16:57:09
Kyle Pearce
So, okay, ABC Bank, if that person is listening right now, they’re like, Please don’t tell them this, but you have access to purchase these index funds, which again, the fees are fractions of the cost. So oftentimes it’s 2% or more for a mutual fund. If you think about that, 2% doesn’t seem like a lot. But if let’s say you had $100,000 portfolio and every year 2% of that portfolio, we’re going to assume the portfolio didn’t grow at all.

00:16:57:12 – 00:17:22:17
Kyle Pearce
The stock market went zero for the next ten years. That’s two grand this year, That’s two grand next year, that’s two grand the years after that. So when you do that over and over and over again, and imagine if your portfolio keeps growing, which you hope it does over time, that 2000 turns into 2500, it turns into 3000, it turns into larger numbers, whereas many of these index funds have a fee of less than 1%.

00:17:23:00 – 00:17:51:23
Kyle Pearce
Right. So you’re paying more than double the fees in most of these mutual funds when you could actually be better at meeting the market expectation in an index fund and pay less fees. And you’re essentially have the flexibility to just, again, almost do it blindly. But just knowing that simple fact can be a massive, massive advantage for you where your portfolio can gain a massive amount over time.

00:17:51:23 – 00:18:10:20
Kyle Pearce
So I didn’t say the two books on the book list. We have remit SETTEE, who also has a Netflix program right now which is worth checking out. His book is called I Will Teach You to Be Rich. He is super simple. Again, we love a lot of what he says. I think his audience is more for, let’s see the people we’re talking about here.

00:18:10:20 – 00:18:26:07
Kyle Pearce
You went to your bank and you just blindly followed. In his book, he talks about index funds and how you can still make it super hands off and do really well. And then the second book, John, you want to guess what the book is? I don’t know. I’m putting you on the spot, but I feel like you read this book.

00:18:26:08 – 00:18:27:08
Kyle Pearce
You know this book.

00:18:27:08 – 00:18:28:21
Jon Orr
Oh, Rule one investing.

00:18:29:04 – 00:18:51:21
Kyle Pearce
Oh, you would think so. I think that’s further down the line. So, yeah, one investing. I love that book, but that would be more involved. I’m going to say the millionaire teacher. And the reason why is because not only we’re the Canadian Wealth Secrets, but this particular teacher. Basically he is a teacher, which resonated with us, but then basically used index funds as his primary investment strategy.

00:18:52:00 – 00:19:12:16
Jon Orr
His investing strategy was obviously very intuitive when you think about it in hindsight by saying we’re going to buy low, sell high. But he was continually investing in depositing regular payments into these ETFs, and he did a combination averaging. Yes, and he was doing a combination of ETFs for equities.

00:19:12:17 – 00:19:14:05
Kyle Pearce
What’s an ETF agent?

00:19:14:05 – 00:19:35:00
Jon Orr
So an exchange traded fund. So this is our index fund. It’s not a managed fund. It’s not a fund that’s someone on the back end is trying to figure out which is the best put one to slot in here and which one is the slot in here. So, for example, one of the S&P 500 index funds is the top 500 companies automatically switches out based off some criteria.

00:19:35:00 – 00:20:00:02
Jon Orr
And he was continually, regularly putting money into that account. Those companies over time with a strategy that when the market was rising, he was actually putting less and less into that side of things like those companies that domain. And he was then switching his strategy to start purchasing bonds. And he was buying more bonds when markets were at the high points of the year.

00:20:00:09 – 00:20:20:22
Jon Orr
And then when the markets kind of tipped and went down, he starts to change that strategy. So he’s continually doing the dollar cost averaging, but buying when markets are going down and buying equities, when markets are going down, buying stocks, when the equities are going or buying bonds when the equity is going up. So that’s an interesting strategy that he took over a number of years that basically made him a millionaire.

00:20:21:01 – 00:20:39:13
Kyle Pearce
I love it. I love it. And actually it’s funny, I might need to go back to that. I feel like it’s probably been ten years since I’ve read that book. I might even argue a couple of years ago I might have thought like, I’m beyond that book. But the reality is oftentimes it’s the simplest strategies which will end up paying off in that consistency, just like you said.

00:20:39:13 – 00:21:10:12
Kyle Pearce
So even though we love looking into real estate deals, we’ve been using strategies through our whole life policies right through the infinite banking idea, I’m going to say idea because we use it very differently than, say, Nelson Nash would articulate. But it also makes me think when I go back to thinking about things like that, even if you didn’t go lesson to growth as the market’s increasing and start going into bonds, even if you just stayed consistent, just 100% consistent, you’re going to do so well in the long run.

00:21:10:12 – 00:21:34:11
Kyle Pearce
And basically the part that I think is really interesting when I’m chatting with different invested students about whole life policies, the interesting part that I think is helpful, not only is it a clear winner for anyone who wants to invest in real estate because you’re building up essentially a opportunity fund for you to be able to get a loan against when you need a down payment and then you take your cash flow and pay that back.

00:21:34:17 – 00:22:03:17
Kyle Pearce
But the same can be true for dollar cost averaging. So something that is really interesting to me is how many Canadians and U.S. investors are out there who are trying to maximize their tax advantaged accounts. Right. So again, IRA, for a1k tax free savings account, tax free savings account, maybe this particular strategy wouldn’t apply to you, but an RSP, for example, when you invest now I’ll use an RSP as an example in your retirement account.

00:22:03:24 – 00:22:25:14
Kyle Pearce
A lot of people will put money in there with this idea that they’re going to get a refund on their tax, their income tax back at the end of the year. And that’s fantastic. Imagine if before you do that, you were to open up a infinite banking policy and whole life policy as a properly structured, whole life policy.

00:22:25:14 – 00:22:57:21
Kyle Pearce
That’s a very big, important difference or nuance. You open that up and you start putting the money that you were going to put towards your RRSP. I would recommend doing a little bit more. And then you were to leverage the cash value of your insurance policy to put into your RRSP right near the deadline. And then when you get your tax refund, you take that refund and put it right back on to the quote unquote loan of your infinite bank policy.

00:22:57:21 – 00:23:16:23
Kyle Pearce
A lot of people do this with a line of credit right there. Banks might even suggest it, and they say, hey, listen, why don’t you just take out a loan? You’ll pay it back over X number of months. Well, imagine if at the end it wasn’t just a loan that got paid off and you move along, but you actually had this other asset growing while your dollar cost averaging over here.

00:23:17:13 – 00:23:42:15
Kyle Pearce
Oh, my gosh. I wish that someone would have helped shine the light on not only the whole life policy perspective, but also how we can leverage some of these tools in a safe way so that in the long run, right at the end of the day, you look at your bank account, it’s going to look pretty much the same, but your investments are going to grow in a much, much bigger, better, more robust way.

00:23:42:23 – 00:24:04:09
Jon Orr
Yeah, that is some great tips, especially if you feel like you are of the mindset that you think you can go this alone or you think you can be like, I can take a hold of my financial strategies, my financial future. Probably you’re listening to this podcast for that exact reason that you’re looking to do more of that and be more educated in that field.

00:24:04:09 – 00:24:25:09
Jon Orr
So that makes a lot of sense. Now, if you are also or you know, people who need a little bit of guidance along the way, then you’re probably at that person who’s looking for, wait a minute, should I go to the banks to kind of do these products? Remember, or the banks might not have my best interest at heart or have my best interests in mind when recommending me products?

00:24:25:09 – 00:24:50:02
Jon Orr
So where do I go now if I don’t want to or have the time or have the capability, or if maybe my in-laws don’t have that capability that they want to like, Well, wait, I’m convinced I shouldn’t go over there, but where do I go here? So now we’re in the land of where’s my substitute if I can’t be trusted or I don’t trust my self yet to go down that line, but I want to get out of this is there a middle ground now?

00:24:50:02 – 00:25:16:09
Jon Orr
Do I have trusted advisers? So this is where your personal financial advisors are coming into play, where they’re supposed to have your best interest at heart or in mind when recommending you products? They’re supposed to be your unbiased representative. When you’re getting your mortgage, your mortgage broker is your unbiased representative to look at different banks and different lenders to bring you the right product for the right move, your right situation.

00:25:16:09 – 00:25:33:24
Jon Orr
And I think when you’re looking at similar to a realtor, when you’re going to shop for homes like Matt, right now, he’s helping people understand their situation and finding them the right home for who they are so that they’re happy not just this year, not just next year, but for the rest of the time that they’re going to own a home.

00:25:34:06 – 00:26:02:07
Jon Orr
He’s an unbiased representative for that buyer and also for that seller finding the right combination here. And I think that’s what you want to look for when you need that guidance or that kind of trusted partner is you want someone who is going to not only just give you the best rate, give you the best product, tell you exactly like this is the best thing on the market right now and not consider for who you are as a person, who you are as a family member.

00:26:02:14 – 00:26:22:02
Jon Orr
Who you are is thinking about the future. Someone who is going to be with you for a long time. So you want to pick the right person. You want to think about a few things. Obviously, we’ve talked about fee structures and not just picking someone who’s going to charge you the lowest. It’s someone who is thinking long term and you can ask them, how do you get paid?

00:26:22:02 – 00:26:44:10
Jon Orr
Do you get paid by commission? Do you get paid from me? Do I pay you directly? Some financial advisors get paid by commission, but some financial advisors charge you a flat rate. And therefore it’s almost like, Hey, if I pay a flat rate, I know you’re not making money off that product or that product or that product, then I know that you’re, say, representing me in a more straightforward way.

00:26:44:22 – 00:27:02:14
Jon Orr
You want to talk about availability. This person is here when you need them. That’s a really important thing to too. These are the things you want to ask folks who are going to be your advisors or help you along this financial journey. And I guess the big thing there is you’re choosing someone that has your best interests at heart and not others.

00:27:02:22 – 00:27:25:12
Kyle Pearce
Yeah, I love that. And what it reminds me of, John, is there’s you and I both being math teachers for the vast majority of our adult lives and really being passionate about it. Right. One thing about you, me and Matt, is that we go all in when we do anything right. And one thing in the math classroom that you and I really did was we want our students.

00:27:25:12 – 00:27:48:22
Kyle Pearce
It wasn’t about them doing well on tomorrow’s test because you can get around that by cramming, right? You can memorize stuff and encourage them to just know the stuff for tomorrow and then they’ll forget about it a couple weeks later. And maybe some people are listening and remember math class being that way for them, right? That easy strategy to get over the immediate hurdle, but not necessarily solve the longer term problem.

00:27:48:22 – 00:28:11:04
Kyle Pearce
And you and I were all about how do we help the students understand the math so that they actually can use it to build on when they get to the next stage in the journey. And the same is true for investing, the same is true for your finances, the same is true for anything in life. It’s not about, Hey, someone gets on the phone with you, John, and says, Hey, I need a mortgage.

00:28:11:04 – 00:28:31:00
Kyle Pearce
And you go, Hey, I got the right one. Here’s the lowest rate and here’s blah, blah, blah. This is what you need. Let’s just get it done. That could work. But the reality is that person actually doesn’t understand why they got it, which means when it happens again or when they need something or when it doesn’t work out the way they thought it was going to work out.

00:28:31:10 – 00:28:54:07
Kyle Pearce
There’s a lot of problems that are ensued. So it’s all about the big thing, not just knowing, liking and trusting the person you’re working with, but also having someone who’s willing to spend the time with you to understand. Now there’s a two way street there. First off, is that that person’s going to listen to you and ask you question after question after question.

00:28:54:07 – 00:29:21:21
Kyle Pearce
So that they understand. And then from there you can engage in a meaningful conversation to discuss what might be a good fit as well as some of the things that might not be a good fit. When you explain what might not be a good fit, sometimes there’s more information that you hear about and they go, Oh, actually I forgot to mention this, this and this, which then might put that in the running as the thing you might consider doing.

00:29:21:21 – 00:29:46:07
Kyle Pearce
So all this to say is making sure that whoever you’re working with that you feel like when you’re coming in, that they’re asking enough about you to learn and get a true understanding of who you are and what your situation is. And then are they taking the time to actually articulate why they think what they think. So I’m going to go back to ABC Bank.

00:29:47:01 – 00:30:18:06
Kyle Pearce
Are they actually unpacking why the funds they’ve selected for you make sense and which funds have they talked about wouldn’t make sense. I’m going to guarantee that they didn’t grab an index fund or an ETF and saying, here’s why we wouldn’t suggest that you go into this index fund or this ETF with the lower fees and better returns on essentially the same asset class, because it’s actually not a poor choice for you.

00:30:18:06 – 00:30:38:23
Kyle Pearce
It’s actually a better choice. So the final thing that I want to mention here, and then I’m going to get off my soapbox, John, is this one. I think whoever you’re working with, be it real estate, be it mortgages, be it insurance, be it going to your bank and talking to an investment advisor is are they walking the walk?

00:30:38:23 – 00:30:59:01
Kyle Pearce
So what I mean by that is that if I went and I met Matt at a property, Matt’s had a showing right now, which is why he’s not with us today. He’s actually listing a property and that person has decided to list the property with Matt and Doris and Matt’s there. And if that property owner said, Matt, do you own a home?

00:30:59:16 – 00:31:24:00
Kyle Pearce
And if Matt said, Actually, no, I don’t, I feel like that person might not be as confident in going with Matt, thinking like, you don’t even own a home, let alone many homes. Right. What are you doing in this industry now? We could do the same thing in the mortgage world. Hey, John, you’re helping people get mortgages, and you’re telling me why this one might be a good fit and why this one might not?

00:31:24:09 – 00:31:49:08
Kyle Pearce
I’m wondering, John, have you ever had a mortgage? And of course, eventually you hope to not have a mortgage, so you might not have one now, but ultimately you’re like, actually, I have many mortgages and here’s why, because I want to I want to leverage my asset, my capital, and I want to continue investing and the crazy part is you could even show one of the mortgages, for example, on Main Street, one of our mortgages, the rates not optimal on that.

00:31:49:08 – 00:32:13:14
Kyle Pearce
And there’s a reason why. And you can explain why the rate actually wasn’t the key for that particular property. And we went for other purposes there. And then finally, I want to go all the way to the banker at ABC Bank. The one thing that I’m always encouraging people to think about and maybe talk to their advisor about is to ask them about their investment situation.

00:32:13:22 – 00:32:42:12
Kyle Pearce
And now in some cases they might say, actually, yeah, I have this same mutual fund. But ultimately my question for them might be how well are they along their own investment journey? Because oftentimes what you find is that there are people there that are helpful, that are nice people that might be just starting out too. So I’m not trying to pick on anybody, but you’re going to them to trust them to help you try to put yourself in a better financial situation.

00:32:42:18 – 00:33:05:03
Kyle Pearce
And oftentimes the person that you’re staring across the desk at is in a very similar spot to you and to me. I look at that and I just think to myself, I don’t know if I want to necessarily have the person who’s in the same spot as me trying to plan how I’m going to become in a better spot five, ten, 15, 30 years from now.

00:33:05:15 – 00:33:25:11
Kyle Pearce
So these are things that I would recommend you thinking about as you pick any of these industries. When you go in, you’re working with someone, You don’t have to be rude about it, but you should be asking questions and you should be trying to feel like, hey, this person truly is taking care of me and they have some experience in this area.

00:33:26:00 – 00:33:46:05
Kyle Pearce
So insurance policies, you want to do infinite banking and you’re talking to the insurance policy. I might ask them, can you show me your policy that works for infinite banking? And if that person’s like, actually, I don’t have one, then maybe that’s not the best person to be handling your infinite banking policy.

00:33:46:14 – 00:34:07:19
Jon Orr
For sure. You’re talking credibility, which is a huge factor in choosing the right person. You definitely want someone who is knowledgeable and trustworthy for sure, and I think you’ve brought us full circle back to thinking about that person who’s sitting across the table from me all those years ago when I started to get where my investments were going to go, what should I be doing with that money and what mortgage should I be getting?

00:34:07:19 – 00:34:25:17
Jon Orr
It’s almost like imagine you could jump in the DeLorean and go back in time and you could talk to that person and say, Look, these are the things you should think about. In this episode, we talked about a few things about kind of rethinking. Just think about where those investments lie and is it the right place for you at this time?

00:34:25:17 – 00:34:41:08
Jon Orr
Because it can change or it can change in a week. It could change in a month, it could change in ten years. Where your situation is different, you should continually rethink that. You could swing it all the way to the other side. We talked about managing all of this yourself. There are lots of opportunities, lots of learning to do along the way.

00:34:41:08 – 00:34:59:18
Jon Orr
That’s why probably some of you are here listening to this podcast is you’re trying to do this, this learning alongside us, and there’s some recommended reading over on the Canadian Wealth Secrets dot com forward slash books website. You can get the books there and do some digging in. But then we kind of brought it back to the middle and said like, what happens if I don’t want to go alone?

00:34:59:18 – 00:35:24:20
Jon Orr
And I needed an advisor. And we gave you some tips here today to think about what to ask, what to think about, who to consider when trusting these huge financial decisions with these people and what their incentives are. So, hey, we want to thank you for listening here with us on the Investing Teacher podcast to once again. And if this is the first time you’ve listened, then please hit the subscribe button so that you get next week’s episode right.

00:35:24:20 – 00:35:41:07
Jon Orr
We’re putting these out every single week. So that subscribe button, if you’ve listened to a few, you’ve listened to many, you’ve listened to all of them, then welcome back and consider leaving us a rating and review. Wherever you’re listening to this right now, folks, and we’ll see you next time.

00:35:41:18 – 00:36:12:12
Kyle Pearce
I love it. I love it. France Links Resources. Transcripts from this episode can be found over on the website Canadian Wealth Secrets dot com forward slash Episode 29. Hey, maybe it caught you here that John is doing mortgages and loving life doing it. Hey if you had over to invest the teacher dot com you’ll find out more information about that and my friends we are so excited to be learning alongside you every single week.

00:36:12:12 – 00:36:40:18
Kyle Pearce
So head over to the website. Give us a wonderful, wonderful rating, a review and we will see you in the next episode. Until next time Invested students. Class dismissed.

00:36:40:18 – 00:36:54:18
Jon Orr
Just as a reminder of the content you heard here today is for informational purposes only, you should not construe any such information or other material as legal tax, investment, financial or other advice.

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