Prioritizing our needs and wants can lead to achieving a feeling of fulfillment. On today’s show, listen in as Melanie Parish interviews Andrew Hallam about achieving gratification by doing precisely this. Andrew is a financial wellness speaker who has delivered more than 150 talks on investing, happiness, and money. He discusses the concept of maximum happiness and introduces his book called Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School, which talks about the details of the financial services industry. Learn more as Andrew talks about prioritization, money, and gratification in today’s episode.

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Achieving Maximum Happiness With Andrew Hallam

I’ll be interviewing Andrew Hallam. He’s delivered more than 150 talks on investing, happiness, money and he has spoken in 27 different countries. They included talks at international schools and businesses all over the world. He wrote an international bestselling personal finance book called Millionaire Teacher. The Millionaire Teacher was the number one hit for Amazon’s investment book category in both the United States and Canada. It’s the first Canadian or British authored book to do that. It was translated into many languages and he’s working on the books’ third edition. He’s a regular contributor for The Globe and Mail, and he writes a weekly column for AssetBuilder, a US-based investment company. He also publishes stories for internets, a Luxembourg-based brokerage. We’ll be talking about money, leadership and what people should be thinking of about money and happiness.

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Andrew, I am so excited to have you on the show.

I’m excited to be here, Melanie. Thank you for the warm welcome.

I am excited to talk to you about money. I love talking about money. I’m a weird coach that way but I love thinking and talking about it so I can’t wait to learn more about you and about what you have to say. First, tell us what are you up to in your work life and home life? What’s going on in your world?

With the whole COVID thing, things have changed. I can give a little bit of background about me and my wife. We were international school teachers and I taught high school English and personal finance. I started out teaching in a public school in British Columbia and then I ended up taking a year off a deferred salary leave and traveled the world for a year. That was amazing because I could be in Morocco, go to an ATM and see that I got paid because for a three-year period, I was giving about 33% of my salary to the Comox Valley, British Columbia school district. They would be giving me that money back plus interest in the fourth year, which I took off to travel the world, but I never went back to that job.

When the year was up, I got a job at Singapore American School, which is the largest international school in the world with 4,000 kids, K-12. That’s where I met my wife. It’s on a 38-acre campus. It’s an incredible place. I met my wife there and I stayed there for twelve years. In 2014, we decided we would take a year off, “Let’s take a break.” One year led to two, which led to six. Fast forward to January 2020, we were cycling in Costa Rica with our tandem. We have a tandem bicycle that comes apart. It fits into a couple of hard cases. We flew to Costa Rica. We did a five-week circumnavigation. We ended up seeing as much of Costa Rica as we could in five weeks, cycling about 2,500 kilometers and then flew back to Victoria. I was scheduled to do some talks in Europe in mid-March 2020. With the whole COVID thing, everything shut down. My wife and I are in Victoria, British Columbia. We’re enjoying the weather and trying to enjoy the things that life has that we still can enjoy like each other, the outdoors and that kind of thing.

You have had an interesting life.

We all have to do our best in that. I refer life as one of those hourglasses and it gets tipped up at birth, but the hourglass of life is black so you can’t see the sand in it and you never know how much or how little you have. I’ve always felt that. Even when I was young and I was in my twenties, I always knew that at some point, the whole party could end. I tried to make sure that I lived for now but I also had an eye on tomorrow. I tried to keep that balance but I’m always aware of doing the very best I could on each day. You’ll never know, it could be your last day, your last week or whatever. I’ve done my best with it.

You got grounded in BC. What are you experimenting with now while you’re in one place?

It was hard at first to be in one place. One of the things I have been able to do is do things like do podcasts and webinars, which has been cool. I don’t host them. I get to be the guests, which is cool because as we were talking about earlier, how you enjoy meeting these people, connecting with, then interviewing on a podcast, and I’ve been doing much the same. Even though we’re in this social distancing element, I’ve been in one spot with a solid internet connection, I’ve been able to talk to loads of different people from around the world during webinars and podcasts. The other part is playing around with YouTube which is interesting. I thought, “I should try that.” I’ll try a couple of YouTube videos and I’m a technological Luddite but my wife and I got this little recording device and we experimented with the sounds and lights. I started playing with a few educational videos on basic personal finance. I’ve only created five of them so far, but it’s a steep learning curve when you’re starting from ground zero but it’s fun.

It sounds like you’re trying lots of new things. I also love that you’re using this opportunity to make some real human connections that might not be available to you when you’re traveling. It’s so interesting because most people would think about leaving, going on these trips, and trying to work remotely as something they would experiment with but that’s your status quo.

It’s our life. We’ll usually be in 12 or 13 different countries a year. That’s been about our average for years.

I’d love to chat with you about some of the topics that you write about. One of the things you said is spending money to maximize happiness. Tell me more about that.

It’s my favorite topic. Thanks for asking about that. The concept of there’s this illusion or there’s this myth to build wealth, we have to defer gratification. Part of this is entirely true but part of it is a myth. To defer gratification is an interesting concept because you’re looking at, “If I’m going to spend money on something that I’m going to be gratified by, what does science suggest will give me the best bang for the buck?” The number one thing is experiences. Having experiences and time with people you love. When you look at happiness studies, they all suggest that maximizing time with people you love and having new experiences will trump the acquisition of material things like the new car and the latest iPhone. A lot of the writing that I do, it’s personal finance writing, but more and more, I’ve been leaning towards trying to write about prioritizing needs and wants by trying to maximize happiness.

You could take an example of somebody who decides that they’re not going to continue to buy the next phone. They’ve got a phone, it works. It’s like a hedonic techno alert where you’re excited about getting the latest phone perhaps or getting a brand-new car but then when you get it, it becomes another car or phone, so you get used to it. If you can hold off on these purchases that don’t augment your level of happiness or contentment, and you’re able to put money aside and invest it for the future, such that you can buy time. If you can buy time, time away from the rat race and work, that may not necessarily mean retirement. It might mean a year where you don’t work or many retirements along the way. In that, you can end up spending time building experiences and spending time connecting with people in ways that you might not have thought of before. That’s one of the things I like to talk to people about when we’re looking holistically at personal finance equation.

It’s so interesting that you talk about computers and phones and all of that. I have twins and I had one who wanted to text his girlfriend so he wanted a phone. I said, “I’ll get you a phone.” I got him an iPhone 7 because it did everything he needed it to do. My other son who is also a twin five months later said, “I think I need a phone.” I said, “Why do you need a phone?” He said, “I’m doing all those computer classes that you paid for. I need a phone to test the apps I’m building.” I said, “What phone do you need?” He sent me an iPhone 10 with all the specs on what he needed. I bought him an iPhone X. My first son was horrified because I had not gotten them exactly the same phone, but they both got the phone they needed. It’s interesting. The twin factor unfulfillment is a wild card but I love the thinking.

Your decision makes some sense but you can see where one of your sons will feel a little bit shortchanged at the same time.

I bought him a phone and he’s miserable. The worst equation is that I’ve spent all that money and he’s still miserable.

Maximum Happiness: Happiness studies suggest that maximizing time with people you love and having new experiences will trump the acquisition of material things.

The one with the iPhone X?

No. The iPhone 7 is miserable, which is still nicer than my phone.

It’s funny because it’s so relative to expectations. All of a sudden, his expectation was shifted when he sees his brother having an iPhone X. It’s interesting when we look at, we can say, “That’s just kids.” That’s not kids. That’s adults too. There are interesting studies on happiness suggesting that if you want to be happy, there is a connection between money and happiness. There’s a certain level of income. Studies have shown that. It’s about 50% above a country’s median income level where maximum happiness does top out. For example, this is super easy, I’m going to throw out the number of $100,000 because it’s easier math for me to talk about that. Let’s say the median income in the country was $100,000 a year.

Maximum happiness would top out at about $150,000. Beyond that, not at all. It’s relative though to where you choose to live because the science behind it is when you have about 50% more than the people around you, you could be entirely miserable with $1 million a year if you live within a community where the average person is making $1.5 million, it’s so weird. Behaviorally and psychologically, how we adjust our levels of contentment based on expectations and based on what’s around us. One of the very best things that you can do, according to behavioral science, is to live in a community, move to a community where you might earn a little bit more than the average. You end up feeling happier as a result of that which is strange. I’m thinking maybe your son with the iPhone 7, this isn’t realistic because most people don’t have iPhone 4, but the idea that he could hang out with people who have iPhone 4 would make him feel good.

I have an iPhone 6 but I’m doing a lot of online recording and now I need an iPhone X. I need the features because they’ll help me with my work.

If you need it, it’s a tool that you need.

I’ve heard these statistics about income, Andrew. What does it do when you’re partnered or how do those shift if you’re partnered with somebody else or have a family?

When I threw out the $100,000, that’s way above what the median is. When they look at median household incomes, what they’re doing is some households have two incomes and some households only have one income. That median is the flat smack dab in the middle.

That median is a household income. That’s so interesting.

It would be interesting to see what’s the median for households with single earners and what’s the median for households with two earners in it. It very much will be different. When people reference a median household income for a given country or given city, they haven’t differentiated between that. How many people within the household were earning? One or two?

How should I be thinking about spending money right now?

Right now or always?

I’m curious about always too because that sounds interesting, but right now. While things are constricted, I’m mostly home and I don’t wear shoes most days. How should I be spending my money or what should I be doing with my money right now?

Most people should have some kind of safety net, first of all. The idea that they have several months’ worth of living expenses set aside in cash that’s available in case something happens like if somebody’s job ends up somehow drying up and we’re seeing that now. We’re seeing where those monies are coming to practical use. That’s a good standard rule of thumb is to try to make sure that we have at least a few months’ worth of living expenses set aside. Very few people do that. My hope is that after this whole COVID thing blows over, people are going to perhaps re-examine that and look at the basic rules of thumb and see that anything is possible.

It’s a good idea to have that set aside. Once you have that set aside, investing for money for the future is also a good idea because back to that original premise, it can allow us to buy time. Time away from work, time to enjoy new and alternatives experiences with people we love and respect. The idea that you can invest that with a longer-term horizon is beneficial. It’s a good time too if people aren’t especially busy and they’re spending more time perhaps on Netflix. One of the better things to do might be to spend some time figuring out their finances, overall financial goals and learning a few basic concepts about investment products. The weird thing about the investment world, Melanie, is that it’s created with a rife a conflict of interest.

I always joke when you have people that are into education or people that go into the medical profession, they’re nurses or social workers. There’s a part of their DNA is such that they’re wired to try to help other people and people that end up with jobs on Wall Street, their prime directive is not to help other people. That’s not the prime directive. There could be some very nice people that go to work for Wall Street or go to work in financial services but mostly, they go into those occupations with those professions for the money. A bank’s prime directive is to make money for the bank first and for you, the client second.

A mutual fund company, their prime directive is to make money for the fund company but you, as the investor, is a distant second, especially in Canada. This is so true in Canada because we pay the highest investment fees in the world in terms of our financial products. If you walk into TD bank, CIPC, RBC or Investors Group, and you said, “Can you invest my RRSP money for me?” They’ll put you into high-cost products and on a comparative global scale, the amount of money that Canadians pay in mutual fund fees is absolutely atrocious. I would learn a little bit. I would spend some time right now investing a little bit of education to understand this concept.

Should I be investing in the US as opposed to Canada?

Maximum Happiness: A good standard rule of thumb is to try to make sure that you have at least a few months’ worth of living expenses set aside.

No, because you can’t. You can, however, buy some low-cost products. We have everything available here that we need, but unfortunately, if you go into the bank and you ask them to invest your RRSP, they will put you into high-cost products that benefit the banks. I’ve sent people into the banks and I’ve written about this in The Global Mail where I’ll know what the low-cost products are and what the high-cost products are. I’ve sent people into the banks with the recording devices to say, “I would like this product please.” I’m going into ask them to get the bank to agree to put them into products that would be far more beneficial for them, not so beneficial for the bank but better for the investor. In every single case, the people in the bank try to talk them into the high-cost products. It was one of the most popular pieces that I wrote in The Global Mail. It’s a fascinating concept. I’ll give you an idea of the average Canadian. If they walk into the bank or they’re dealing with a mutual fund company, the average Canadian will pay about 2.5% per year in hidden fees on their total account’s value.

That doesn’t sound much but let me put that in perspective. If the market makes a 5% return, and if you’re paying a 2.5% fee on your product, you’re giving up about 50% of the pre-fee profits to the financial service industry. You’re giving up half. When that’s compounded, it’s unbelievable. If you have an investment product that charges you 2.5% and your neighbor has virtually the identical product but it charges 0.1%, this could be the difference. Over your lifetime, the two of you could invest the same amount of money. You’re basically in the same product, but one is much more expensive, you can invest the same amount of money over your lifetime and it could be the difference between the lower cost product being worth $500,000 upon retirement versus as little as $200,000 or $250,000. It’s an astronomical difference. It’s even broader if somebody starts investing early. You could end up with only about a third of what you deserve. That’s something that people especially in Canada need to be aware of because we do get royally taken advantage of by our financial services companies here.

I want to go back to where I should be spending my money in general.

You spend it on the things that will give you fulfillment. If at all possible, things that will enhance an experience for you. A lot depends on what it is that you want. What do you like being outdoors? If you don’t have a bike and you would love being outdoors, a bicycle is a decent purchase for you. It’s one of those things that if you don’t have it spending money on that is going to give you that outdoors, get you breathing, give you a rush of endorphins, but so much depends on what your interests are. Spending money that will give you experiences. This is I think where it’s going to be so much better than ordering a bunch of crap on Amazon because all the studies in the world suggest that material things don’t augment our levels of happiness.

When we get into that retail therapy, if you want to call it that, often we end up getting into debts as a result of that as well. There are all kinds of studies suggesting that is linked to misery and depression. Try to stay out of debt and not be purchasing a lot of these things especially during the whole COVID-19 thing is to try to curb our spending a little bit more knowing that so many people who are reading this, you don’t know whether a second wave is going to be coming and you might not be one of those people that has three months’ worth of living expenses set aside. If you’re able to work right now, the best thing for you to do is not necessarily to be spending money but it’s to be making sure that you have at least three months’ worth of living expenses set aside.

I’m curious about what your advice would be as the stock market drops. Now it’s back up. What should I think about during this time? I can’t believe where the stock market is sitting right now. Should I be getting out? Should I be investing more? How do I think about that?

The best investors now are those who don’t even know what’s happening with the stock market. The other people have lost the passwords to their accounts. They don’t follow the economy and market. That’s the most fascinating thing of all. People are trying to think or trying to figure out what’s happening with the economy and how it will or will not relate to the stock market. Short-term stock market is a popularity contest. It’s completely a result of human emotions. When people buy, there are higher demands so stocks rise. When people sell, there’s lower demand, so stocks drop. Short-term movements in the market are entirely based on how people are feeling behaviorally.

The best thing to do is to invest your money in a globally diversified investment portfolio that gives you exposure to the Canadian Stock Market, the US Stock Market, the International Stock Market, and a bond market for stability at the lowest possible cost and add money every single month, put the blinders on, completely ignore the economy, and completely ignore where the stock market is at. When we look at peer-reviewed academic data research on who earns the best returns? They’re the people that trade the least. They are people that literally don’t do a thing. They have their money on autopilot, going into a diversified investment portfolio, and not sweating about where the markets are going day-to-day. Long-term, those are the people could end up making the most money.

I spend ten minutes a year thinking about my investment portfolio and I don’t have a pension. I’ve been overseas for so long, I’ll hardly get anything in terms of old age security. I won’t get a defined benefit pension. My investments are my livelihood. That’s how I’m going to be living. I’ll spend no more than ten minutes a year thinking about it or managing my investments. Any more than that is completely counterproductive.

From a financial standpoint, you’ve talked a lot about fulfillment and money. For people who think about bonusing their employees or sharing profit in some way in the organization, what should they be thinking about?

Right now?

Anytime.

That’s a good question. I don’t know if I have an answer to that. That’s a first. Usually, I make something up. People who give bonuses to employees, what should they be thinking about right now? I’m thinking of common sense. I’m thinking of making sure that their business is like their lifeboat. They’re going to have to make sure that they don’t have holes in the lifeboat. They can’t be inviting new passengers on if they do have a hole. The idea of giving a bonus, if the business is struggling, isn’t going to be good for the business or for the people they are giving the bonuses to. Eventually, they could reach a position where they have to lay those people off.

I was thinking about if a business is doing well. Let’s say Zoom or Teams or one of those organizations that are big but say somebody is still doing quite well in this market and they’re a smaller business. What should they think about in terms of employees, bonuses, and money?

That would be so welcomed especially right now if they were able to gives some bonus. I remember I worked for a supermarket at one point. What they did was they started giving bonuses into RRSPs, which I thought was cool. It was a forced savings because to pull it out, the investor would have to pay a withholding tax penalty. In a way, it was a forced savings plan for them which I thought was good. The employees thought it was great. It was better than giving cash because cash can then be spent on often silly things. It was a cool notion but I don’t know how practical that is for small businesses to do, but it’s a neat idea.

I’m glad I asked the question. How do you take care of yourself? You’re a busy leader, you write books and you speak a lot. What do you do to take care of yourself?

I’m lazy that’s why I became financially literate. I don’t work as hard as a lot of other people do. For me, the most valuable asset is time. I work hard to make sure that I get eight hours of sleep at night. I document the sleep that I get to make sure that I’m accountable. Sometimes, if I spend a few late nights from watching television and I’m noticing that my sleep level is dropping to six hours a night or seven hours a night. By writing it down, I become accountable for it. I always try to ensure that I have that average goal of eight. In the morning, what I’ll often do is I’ll write down what I’m going to do physically that day. I’ll write down the actual exercise that I’m going to do in a book. It’s an old school but then I will take it off and put checks as I accomplish that.

It makes me feel like I’ve accomplished something, plus it’s important to be able to get outside and have physical exercise. That’s what I do. In terms of the financial aspect, we track every penny that we spend with an app on our phone which is helpful. We enjoy spending time with each other. I’m not one of these people that’s killing himself to work his way into the next tax bracket. I recognize that the happiness is relative but perception is everything. I feel like I have enough. What I have isn’t going to be enough for a lot of people but I already feel that I’m satisfied with this. Knowing full well that everyone in the world has a terminal illness, and you’ll never know when our end is going to be. I’m not one of these people that’s struggled with even at the border of ever being a workaholic, even close to that.

Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School

Where can people find you, Andrew?

I publish the writings that I do at AndrewHallam.com and there are links to my book there. Millionaire Teacher is the book that’s most relevant to Canadians that I wrote two additions of that one in 2011 and the second edition in 2017, which gets into the financial services industry and that massive conflict of interest that we have here in Canada and how to sidestep that. How to ensure that you can use that to your benefit.

Thank you so much for coming on and sharing your thoughts and wisdom. It’s such a privilege to get to spend some time with you and to get to ask you whatever I want. Thank you for being on the show.

It’s my pleasure. Thank you, Melanie.

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I loved talking with Andrew Hallam about new kinds of lifestyles. What can you experiment with? It’s interesting that he is grounded in Victoria, BC but his usual life is traveling all over the world as a speaker. It’s interesting that he can now connect in new ways and he’s engaging with people over electronic and digital platforms whereas he doesn’t have a steady enough internet connection. I love that people should experiment with money and experiences as opposed to buying things as a way to enhance their own happiness. It’s been a pleasure to speak with Andrew Hallam. Go experiment.

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