Ep. 18 | Why RRSPs Are Overrated (Unless You Know What You’re Doing)

Most Canadians treat RRSPs like a retirement silver bullet, and most are using them wrong.

In this episode, Tré explains why Registered Retirement Savings Plans (RRSPs) are powerful tools only when used strategically. He breaks down what RRSPs actually are, how they affect your taxes, and why the way most people use them could hurt their retirement.

This episode is essential if you’ve ever contributed just to get a tax refund — or if no one’s explained what happens when you take the money out.

You’ll learn:

• What RRSPs really are (and why “investing in an RRSP” is a myth)
• How RRSPs reduce your taxable income — and why that’s not always a good thing
• Why RRSPs work better for high earners and strong savers
• The common mistake that leaves retirees with less money than they expect
• How to align your RRSP strategy with your long-term goals

If you’re not good with money, RRSPs could make things worse. This episode explains why.

 Follow, rate, and review to get smarter with every episode.

Transcript

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Hello and welcome to the Plain English Finance Podcast, the podcast dedicated to helping you make smart financial decisions. I'm your host, Trey byo, certified financial planner and chartered investment manager. I'm a financial planner with TC Wealth Management and a Visa, Mel Visa, Mel Visa Wealth, uh, for more information, uh. Check out the show notes at my website and if you wanna learn more about me, check out episodes one and two. Okay. Shake it off. Yeah, I, it'd be great. So this episode is on RR sps and this is actually be a really good one. I we're gonna very briefly at the beginning just go through the main points and then I am going to talk, talk to you about how to use them properly. And yeah, this, this might actually be funny. This what I'm gonna say might be not what people expect. Oh, a financial. Person to say,'cause it's not what they've heard their whole lives. Mm-hmm. Um, but we, I'll explain why. I wanna, I wanna say I think I know, but now you're making me think. I might not know. Well, we'll see what we, yeah. Okay. So, uh, first things about RSVs, what they are. So they're called RSPs for a reason. Uh, it stands for Registered Retirement Savings Plan. It's one of a few registered accounts. So most ways that you invest, you can invest in all different types of accounts, and typically we refer to them as registered accounts on non-registered account. Okay. Registered just means there's fancy treatment from the government regarding these funds, the use of them, how they work, different limits, et cetera. Mm-hmm. Um, non-registered just means. None of that applies. Hmm. And there's no real limits. It's just your taxed as you're taxed as you go. But in this account, uh, RSPs, there are certain things about them. So the first thing is that the way that you get. There is an annual limit of what you can put in, and that is either 18% of your previous year's income or it's up to a dollar figure max. So right now, what was it? It's like$32,000 and change mm-hmm. Um, of RSB that you can put in. So any room that you don't use carries forwards. Uh, you can put money into RSPs for the previous tax year, up to 60 days into that year. In the first 60 days of 2 20 25, I can put RSB contributions in for 2024. Okay. But if you miss those 60 days, you can't. No.'cause yeah, that's the, that's the deadline for it. Okay. Uh, basically the way it works is it reduces your taxable income by whatever your contributing. So in effect, if you earn a a hundred thousand dollars and you put in$5,000 of RP Con RSPs, you'll be taxes if you earned$95,000, right? Yeah. Okay. And people think, oh, what? I get a refund. I challenge you to forget about whether you are getting a refund or having to pay tax, come tax time. Oh, okay. But it's not the reason you do these things. That's not how it works. You don't do RSPs and get a refund. You do RSPs. It reduces your income and that may or may not, depending on your financial situation, lead to a refund. Mm-hmm. Or it might mean you owe a little bit less tax. Mm-hmm. However, it is, it, it doesn't matter that. Putting money into RSPs does not give you a tax refund. Right. It reduces your income. Yeah. Okay. Yeah. Your taxable income. Okay. What should I say? Okay. Well, and I, and I, for a lot of people that means they get refund, but I challenge you to not think like that. Yeah. Um, okay. So there's a few really useful things like the way that you would use these things. Actually, do you have a charger? I need to plug this in'cause this is just. Just gave me a warning. Okay, perfect. Uh, it, so there's a few ways that you would, you would typically use them that you need to understand. So the first one is, it's typically for retirement. Mm-hmm. Again, don't think like that. Yep. It's moving income from one year into another to. These are things. That's why I'm like, okay, I've heard you talk about RRS PS before, so I was thinking I would know your thoughts on how to use them. Yeah, but'cause that's exactly what I would, was thinking that it just defers tax. Like the tax you pay. So if you're moving one income, sorry, if you're moving your income from one year to another year, you want to use your RSP. Room and like utilize that when your taxes are so that you can plan for your taxes to be lower basically. Yeah, yeah. Yeah. It's pretty much so if you think your income is going to be lower in the future, it's a good idea to use your RSB room. When your income is going to be higher. Yeah. So if anybody hasn't or can't visualize, uh, tax, tax brackets, so like everyone, I'll put a link in the description. Um, but basically that a brief tax lesson is we, we live in a gradual tax rate, so you have brackets, so income that is earned within certain brackets. Will be taxed at a certain rate. Mm-hmm. Some people believe that if you earn more money, you will. Sometimes you'll have less hit your account, if that makes sense. Yeah. They think, oh, I don't wanna pay rise because then I'm gonna be in the next tax bracket thinking that it means that their entire income is gonna be taxed at a higher rate. That's not how it works. If you have a raise, it will always lead to. Like at a basic level, it'll always lead to more you having, having more money. Okay. So don't turn down a raise for that reason. Um, but for example, the highest tax bracket is income earned over$253,000, and it's taxed at 47.5% in Canada and Saskatchewan. But that's income over that number. Yes. Income over that number. Okay. Okay. So let's say you earn$260,000. At the very least, I would be expecting to do a$6,000 RSP contribution to bring you, to get rid of the income that is you're paying 47.5% on. Mm-hmm. And hopefully in retirement, you know, we've got planning and tax planning, you'll be taking it out at a significantly lower tax rate. So let's say the first$53,000 of income, you only pay 25% of your. Of that in taxes. So if we can put money in when it's 47.5%, take it out when it's 25%. That is a, a net gain, right? Yeah. Pay less tax. Yeah. That is in essence what you're trying to do with RSPs. Yep. Okay, makes sense. Um, there are a few different plans that you have when it comes to RSPs that people typically take advantage of. First home. Uh, first time home buyers plan is where you can borrow, uh, money and then you can repay it over 15 years. A lifelong learning plan is where you can borrow money for education and then repay over over 10 years. There are planning opportunities around that, but that's not really gonna be the focus today, but. Um, there are things that you can do to, to plan around that. Mm-hmm. Investments that you can put into RSPs, pretty much everything, like there's, there's eligibility guidelines for different types of investments, but. The vast, vast majority of what you'd be putting in there, you would, you'll be able to hold inside of an RSP. So think of vast majority of mutual funds, ETFs, stocks, GS bonds, all of that you can put into, into RSPs. And as I always preach, invest to the right timeframe. So part of that means if this money is for retirement, it should be invested appropriately for when. This money is going to be spent in retirement, not necessarily when you start retirement. Retirement. Okay. It's an important concept to understand. Yeah. Uh, retirement doesn't start and stop at 60 years old or 55 years old, or 65 years old. You got, yeah. You don't just have all that money come into cash into your checking account. Yeah. You're gonna be investing for a lot longer than that, so make sure you. Align it to the right timeframe, but I just wanna say something quickly because this podcast is for everybody. Even though a lot of our listeners will probably know this, I, I hear a lot of people say, I'm invested in an RRSP, or I have an RSP or A-T-F-S-A, whatever, and they don't understand that. Having the registered account doesn't mean you are invested. That's my next point. Oh, sorry. Sorry. No, no, you're good. You're good. So our next point is that, uh, you cannot invest in an RSB. Yeah.'cause I hear people say that all the time. Yeah. And I'm like, no, you're, you have investments within your RRSP. Yeah. And you can invest in. The s and p 500, you can invest in a globally diversified index fund. You can invest in lots of things. One of them is not an R rs B, you can't invest in RSPs. Uh, that's not a, there's not a thing you can do. You can put your investments, you can invest in something else within an RSB. So think of the way I describe registered accounts and all types of accounts is a shopping trolley analogy. Yeah. Uh, what do you call'em here? Is it shopping cart? Shopping cart, okay. Yeah. Yeah. Canadians. Okay. Uh, shopping cart analogy where, think of the accounts as the shopping cart and as you're going down the aisle, think of the investments as the bread and the milk and the eggs. Mm-hmm. You can put that into any shopping cart, but it's, you are picking something that goes inside of the cart, not. The cart itself as an investment. Yeah, you, so if you are taking money and you're putting it into the cart and you leave it in cash, that's. A decision. Bad one probably, but that is a decision. Um, but that is, it's just now sitting in cash within your shopping cart, right? Think of cash as tomatoes. Yeah. It's like you have tomatoes inside of your shopping cart. Doesn't help you if you need steak, so you need to then make the decision to go put steak inside of your shopping cart. Just because you put tomatoes in there doesn't mean that steak automatically appears. So make sure when you're picking investments. You actually go the next step. Don't just put money in there. Don't open an RSP at your local bank and then just put money in there that is not good enough. You need to then decide what to do with the money once it's inside of your, yeah, I'm think, okay. I gotta like go off this analogy still'cause I'm, you know, I always gotta make it a little more complex. I was thinking while you were talking that you'd wanna make a meal, so if you just put cash. In your RSP, you, you can't survive off of tomatoes alone for your retirement, right? Mm-hmm. So to maximize your meal, you're gonna wanna have a lot of different ingredients. You're gonna want to plan for this meal that you wanna have. So, I don't know, maybe that's not, maybe that doesn't add anything on. Maybe it does. I don't know. No, I always gotta go like one step deeper. Yeah. I dunno that. Yeah. So that, that's, that's an important point. So I'm glad you brought up. And then the other thing would be what happens at the end? Um, it gets turned into something called a Arif, uh, a retirement income fund. People think this is way bigger than it is, or like some big milestone or some like the amount of conversations I've had where people are nervous about. Well, I need to do this at this age or that like 71 year.'cause it's 71. You have to uh, but it's as if it's some big event like looming over Yeah. In their life. It's a form like, who cares? Don't worry about it. There's so many. So if that's where, if you, if that's where your mental power is going, when thinking about finance is worrying about the transition from an RSB to a rif. You are definitely focused on the wrong thing. Yeah, guaranteed. It's not that big of a deal. I mean, even if you miss it and you don't do it. The company that owns the RSB will do it automatically for you. Like it's, it's not something that you can really screw up. It, it can't be screwed up. It just happens. Even if you didn't come sign anything or do anything, it just, they'll do it. They'll just change it once it has to be done, it's, and so when you originally opened every RSP in Canada, it's just written into the contract that they're not gonna let you do anything. Illegal with it, so it just happens. So stop worrying about it. It's, it's irrelevant. Um, but yeah, that, that's the, that's the basics of RSPs and the typical advice that is given is, uh, basically people think that it's like the holy grail of retirement. Like you just put money into RSPs and you'll be fine. Mm-hmm. Um, I would say. This is where I think it might get a little bit spicy, uh, ooh. Just between other, other, other advisors, I guess. So there's something about me that I, I look at scenarios a little bit differently where I understand what the numbers say, but I also look at it from a human, uh, point of. A human like action point of view. Like what habits, what do humans actually do, right? Right. We're not robots and computers to have perfect math work. Yeah. And there is a huge gap with how RSPs are used between different segments of the population. So people that are financially, um, financially literate and people that really aren't, let's say. So, um, and this is honestly, it comes back to cashflow management and what, why I say it's so important. But I'm gonna kind of walk you through the process of an RSP contribution and you'll kind of understand why I would say, and my statement is this, is that. If you struggle with managing money, you should not be using an RSB to save for retirement. And I know people are gonna say, that's crazy. What do you mean? Et cetera, et cetera. I, I'll kind of explain why. So let's say I have, uh, I earn a thousand dollars. Mm-hmm. And I'm taxed at 40%. Okay? So that means you go to work, you get a paycheck, and we're gonna kind of simplify it a little bit to keep it simple. Mm-hmm. But you get tax, you earn a thousand dollars. The, your company sends$400 of that to the CRA? Yeah. How much are you left with? 600.$600. So$600 hits your account and your studio, you've been putting money aside. So then you take this$600 and you put that into an RSB. Okay, so. You put that$600 into an RSP and remember what an RSP does is whatever you contribute, it reduces your taxable income. Income. Yeah. Okay. So it's as if you earned how much less, sorry, how much did we put in the RSP$600? So it's as if you've earned 600 less. Yes. Okay. Yeah, which means at a 40% tax rate, you get back$240 from the CRA. Okay. So when you file your taxes, you, if you've, if you're working for a company, you would likely get a refund of$240 for that$600 RSP. Okay. And this is where people make the mistake, is that, so they've, um. So they end up, sorry, let me go back. So the end result is that$160 is left at the CRA. So they earn a thousand$160 with the CRA$60 is RSPs and$240 is cash in their pocket.$6,600 is in the RSPs. Okay. And$240 is left as a, as a refund. And then people go and spend that$240. Okay? And they. Realize that they think to themselves, Hey, I've done something good here. I have saved$600 for my retirement and for simplicity, I'm gonna ignore growth. How much money do you think that person actually has got to spend in outta that$600 in retirement? So we're, are we talking about inflation or is it just that what? Just tax. The tax because it's deferred tax because now they still have to pay tax on that$600 when they pull it out. And how does it, so let's assume a 40%, right? Let's assume the same, just to keep it simple, it means that that person then has to pay the$240 back. Yeah. Right? Because it's deferred. So they have actually to spend in retirement, they have$360. Right? So they made a$600 RSB contribution. They have$360 that they can now spend in retirement. This is what the majority of people do because they don't understand that the value, they do RSP contributions to get this$240 back. Mm-hmm. Not to save for retirement. Right. Okay. They, they're like, oh, I want free money. Quote. Yeah. I want my, and they, and they think to themselves, I'm doing a good thing by doing this RSP contribution, it's what I should do. And they don't realize that they've actually saved in this r in this scenario,$360 is what they've actually saved for retirement. They put aside$600 and they're like, okay. And they're gonna think to themselves, I've put aside$600, not realizing that they haven't. Okay. They've put aside$360 because of the tax slide. When you compare that to, and we'll do TFSAs later, but I, it's a good comparison. If we compare that to A-T-F-S-A, you have a thousand dollars that you earn. Government takes$400 of it. You take$600 of it, you put that$600 into A-T-F-P-C. Mm-hmm. In retirement, how much do you have? It's tax free. It's tax free.$600. Yeah. Okay. And the key thing here is that on paper, A-T-F-S-A and an RSB are equal, but only if you are good with money. Mm-hmm. If you are not, uh, and I say good with money, if you, you have to invest this$240 basically. And in fact, when you do an RSP contribution, you should be making the contribution. Based on your gross income, not your net income. Oh man. Yeah, and And so you see how complicated it gets, right? It does. Does, yeah. So if I have put aside, if I'm saying to myself, okay, I'm gonna save, you know, I have$2,000 hit my account every paycheck, and I'm gonna say I'm gonna save$500 of that, that sounds great. But if I take that$500 of that and put it into A-T-F-S-A, that is very different. Than me putting that into an RSB? Yeah, because let's say let's use this 40% tax rate again, if I am putting, lemme just make it easier a thousand dollars into A-T-F-S-A in order to compare that same thousand dollars into an RSB, I need to gross up my income. Hmm. So I need now need to add back that 40% that the government's taking on taxes, because I'm gonna get it back. Come tax time. Yeah. So I need to put every thousand dollars in that case, I'm just doing the math real quick. Um, I need to put in$1,660. Hmm. Basically.'cause you need to, for it to be the same for me, for that, to have the same value come come tax time and people do not do that. Yeah, well for sure. Right? In order for, I don't wanna say people, in order for people to do that, they need to be, they need to have their cashflow management nailed down. It sounds bad. They need to be like me, like somebody like, or they need to like have a plan. Like you need, you need to understand what you're doing and be very intentional about it. So I say. The worse you are with money, the more you actually kind of want to avoid RSPs if you're looking to, because you kind of need to protect yourself from yourself at the same time. And I know the, I know people get on me that, I know that our other planners, I know the math shows that it is equal and it in effect, there are some ways that you could even argue that RSPs are superior. The Nat FA, the Nat Fs a there, there I could, I can, I can get behind the argument to a degree. The fact is, as soon as you, as soon as you factor in what humans actually do, what the majority of the population actually does, it's not even close. Yeah. It's not even close. And sometimes you need to, especially people that can't do it and struggle to save, sometimes you need saving from yourself and mm-hmm. You know, and that, and it's very different than, uh, it's very different to like a pension, right? Like if you are, if there's a pension and it's coming off your paycheck before taxes are even touched. Again, that's very different because the company is not sending any tax. You have, you don't get a refund from them doing a pension contribution. Yeah, that's, that's one to one. If you take a thousand dollars and it's, it's your gross number and that's what you put in, then you're, you, everything's good. But people don't do that. People don't do that when it comes to RSPs, so therefore. Yeah, you have your hand off for some reason. Yeah. I have a question, but I, I keep cutting you off. Um, oh, what was I gonna say now? Um, okay, so when, like, I guess when people hear RRSP registered retirement savings plan. They're thinking, okay, I'm gonna put this money in and then when I retire, I have this money in my retirement savings plan. Mm-hmm. But really, it's, it's more so like, I guess I wanted to confirm, is it just like a tax benefit essentially? Like what are the other, I guess maybe that's too much to go through, but like, no, ask him like, what are the other benefits of the account other than you're deferring your tax into a, into another year. Like if people understood that point. Well, there's, there are some, right? So for example, there is, uh, you don't pay tax as you go. So growth, the account will grow faster on paper. And again, this is another thing that is a big difference between reality and on paper. So on paper, uh, the account will grow faster, it'll grow faster because there is no tax to be. To be paid. Oh, I see. So you're, it's in the RSP, you're invested. Yeah. Right. So you have your, let's go back to the trolley. You have your eggs, milk, blah, blah, blah. The well diversified portfolio. Yeah. Yeah. And that's all building and growing and growing and compounding and whatever, without having to pay tax as you go. Correct. As you Gotcha. Yeah. Okay. Yeah, so, so it sounds great. Yeah. Right. Yeah. But what actually happens if you compare that to a non-registered account. When we do math, when like planners sit down and they figure out like, okay, this on paper is the best route we, we make some, in my opinion, stupid assumptions. So for instance, if we're comparing a non-registered account to an RSB, we will do it based on, okay, what gives the client the most amount of money to spend throughout their lifetime? And that is by far definitely the RSB because this, even this$240 that you're getting back, uh, that's more money than you would've otherwise had to spend. But when you're working with somebody that will spend anything they and everything they have, it changes things'cause then you're now need to protect them from themselves. So if you compare an RSB and some A client's experience with an RSB compared to a non-registered account. The experience will, will, might look very similar for somebody that has lower financial literacy. Mm. So the difference is in an RSB, while it's growing, you're not paying any tax on it. But in a non-registered account, while it is growing, you are paying tax on it. And in my world, when we look at that, we say, okay, well then the decision is between them. Adding money to their adding more, like investing more or paying the tax. Right? We, that's a binary decision. That's what we think ourselves. So the RSP is going to have technically more money in it because you're not paying the tax as you go. So we're assuming that the tax is coming from what they're putting inside of the RSB, right? Or what they're putting inside of the non-registered account. That's not what people do in real life. People just pay the taxes. Out of their paycheck or like they pay it from somewhere else and actually it's money that just isn't being spent. So when, if, if people don't, don't have a zero sum budget, then like where they, they similar to what I try to get people to do where they like allocate every dollar Yeah, they, yeah, allocate vast majority of dollars. And, and it would be a case of, okay, if they're not paying tax now it is getting invested. That's a completely different scenario, but with most people, that's not the case. It's a case of, okay, well they'll paid more tax now, but the other option is that money is sitting in cash, not doing anything on the good side of things. On the bad side of things, the money is wasted and the client didn't even have any good experience from from it, and it's just wasted. Yeah, so it's, I, I do understand why people push RSPs, like. Crazy. I, I get it because on paper it is the right thing to do. In reality though, especially not so much now in my career, but early, earlier when I was working with a, um, slightly different demographic. Mm-hmm. Uh, what would happen is people would get to retirement, they would have no other access to money apart from what was in the RSPs. And they come and they're like, Hey, I have.$300,000 in RSPs, let's say. And you're like, you're like, Nope. Unfortunately that doesn't mean you can spend$300,000. Yeah. That means that now you have to pay tax on that. And at the lowest rate, let's say we do get it down to 25%, right? It's like, okay, well now you don't have$300,000. You have this, you have this much less, or you want a car, or you don't have any other cash to get the car and we're now gonna have to like, it is, it's just, it gets very, it's not. The best outcome for the client if the client say this very specifically, if the client is struggles to save. Yeah. So if I'm working with somebody that struggles to save, I will try to push them towards TFSAs way more. Mm-hmm. I mean, and even for us personally, because, and it comes to the tax planning side of things. Yep. Is I, it's only been three or four years that I've actually been doing RSPs for myself. Yep. I remember you saying that. Yeah. Yeah. Because again, when you look at the tax brackets, I, um, projected out what I thought my income would be over my career, and I would rather save 20% on my taxes than nothing, than like, it's, it's a guaranteed that I can almost as guaranteed as I can get, that I can, I can save money on taxes by putting it in, in a much higher tax bracket when you're much further along in your career Yeah. Than doing it. Than doing it prior to that and, and doing it then. So yeah, just something to think about that It isn't, it shouldn't be. I'm not saying they're not good. They're very good. There's a reason I like. I will, I will max out the amount of RSPs that, that I, I can, I can put, I can put away, um, especially because I can put them into like a spousal plan and things like that, which means that you can take them out in your name, under your income tax. Right there, there's, there are strong, strong benefits and they should be a, a part of everybody's retirement to a degree, depending on the person. But yeah, I would say they are, they are overused and, and they don't. When they're not used properly, it's not benefiting you. It's, it's, it's not benefit. No, it's not beneficial. And there would be, if advisors all got together and just decided that we were gonna do it differently, it would lead to better outcomes. Like better outcomes for clients retirement versus. On paper. Mm-hmm. It's a good thing to do. It's just, it kind of kicks the can down the road and it makes people feel good. Um, and it's like kind of what you're taught to do, just put as much money into RSPs as possible. But the fact is there are lots of ways to save for, um, to save for retirement. Yeah. If you are entering retirement and all you have is RSPs. Taxes are gonna hurt. Yeah. Like that's what something that when people come to me, a few, you know, five years before our, before retirement and they're packing away into RSPs and stuff, it's oftentimes I'll, I'll try to maximize the tax benefits, but apart from that, I try to put as little into them as possible and start. Building up some other piles of money so that they can go on vacation if they want to, that they can, without screwing up their tax planning. They can go buy a vehicle, they could go spend$50,000 and give it to their kids for a down payment. And like all these other goals that people often want to do during retirement, that having all your, everything sitting in RSPs doesn't allow you to do. Mm-hmm. So. Just like you wanna be diversified with your portfolio, the way you save for retirement should also be diversified. So use them. They're great instruments, great tools when used properly. If you're using them as a, as a tax crutch, uh, because you don't put enough aside and you can't save enough during the year and you just need to reduce your income tax a little bit, very likely you're screwing yourself up for later your future. Yeah. It's, yeah. Um, yeah, it's, it's funny, it's just because people assume, like when we look at the numbers, we assume that it's, that that's what's happening. It's one of those two options. They're either saving it or it's going to taxes, and it's like, realistically, they're just, it's going. It's going. They don't even know what it's going to, like. Most people don't, even if you haven't fixed your cash flow management the way you do it, so you know what it's going to, for most people, they don't know. It's just. It's just going, and then they go spend their tax refund and they think of their tax refund as like a bonus, a windfall. And it's like, I, yeah, no, that's not, unfortunately it's not. It's just your money back and your spending tomorrow's money and you still have to pay the tax on it. So it is kind of crazy that like, as you're talking, I'm thinking about how much like. You and other planners, like think about when they are planning, like I know people, I think we talked about this in an early, early podcast about how like, people think financial planners like pick investments. It's like, oh, let me just pick this stock or whatever. Like, and when you actually think about it, it maybe, it just doesn't sound as flashy to be like, oh, I, I plan like mm-hmm. I, I actually, I went to pick up something for a friend, uh, and she, it was, she was retiring from the university and we got taught, I was in my, like I had my TC wealth, she and everything, and we started talking and she asked me, oh, what do you do? And she was like, oh, so you pick mutual funds? And I was like, no. Like, uh, but she was coming up to retirement. So we started talking and I started explaining it. But yeah, you're right. There's, I think people. Oftentimes, and it suits me well, sometimes you have to be the bad guy in order to have good outcomes for your clients. Yeah, and this is why I, I do get very frustrated with people in our industry that are too relationship focused. And I get it, that you, you want your clients to like you, but I, I do think it's more important that you do the right thing for your clients than they like you. Mm-hmm. Unfortunately, like financial literacy for a lot of people, they don't even want to know. Yeah. Um, they're like, oh, please stop talking. Yeah. So it's up to you as the advisor to steer them towards what's gonna be best for them. Yeah. And sometimes that means that it's not the best thing for them. It's not gonna put the most money in their pocket today. Sometimes it means that their client wants something and you are strongly advising them not to do it. Sometimes, which this isn't an uncommon thing, is when somebody is like, uh, somebody has assets. It happens a lot with farm families where that they've been. Low cash, cash poor their whole lives, their parents will sell the farm and then everybody knows they have money. Mm-hmm. And sometimes your job is very simply to be the person that they come and say, Hey, can we do this? And you say no. And they go back to their their family and say, my guy said no. Right. Like so that they don't have to feel like they don't have to feel like the bad person. Yeah, because it happens more often than you would like to think. Where I. As soon as people have in that type of, especially in that type of environment, everybody thinks they're entitled and it's like the person feels bad saying, no, they don't. They know they should, and they don't know that it's not, it doesn't align with their values. We've had this conversation before and they just want somebody to validate the way that they're thinking and give them an excuse. Right? Yeah. So the, the, your role as a financial planner, it can look very different in. That's why I like it. But yeah, that's, it's, it is obviously perfectly suited for you after everything you've just said, because I know you, and I'm like, all of those things are very, very, you, you get to be the bad guy while being the good guy. Yeah. Like that trait is like, what do they call it, the vigilante, it's like he's happy to have like the, the bad role if it means overall good for. Everyone. Absolutely. Absolutely. I'll be the, I'll play the bad guy. I don't, I don't mind. I like it. Especially if it, if it will help. Like if it, I'm the person that will, that will tell you that you have stuff on your face before you walk out there. Mm-hmm. I will never be the person that says, I didn't want to hurt your feelings, so I didn't tell you that you had toilet roll stuck in your skirt. I am, I will. I promise you. I'll never be that person. I will always tell you, and if you yell at me. Yell at me. Uh, it's, I told you that you, I told you you had toilet. I was sticking out your pants. I told you I did. I did what I view as the loving thing to do for you, as somebody that I care for. Yeah. I, wait, are you talking about me?'cause that. That has never, I don't think you've ever done that. No, I'm just saying in general, I ca I care a lot about clients. Right? Like you build a, you build a, a relationship with them. You and I, you or you know, me, I've, I've had sleep plenty of sleepless nights worrying about Oh yeah. Which is why I, I'm very picky about some of the clients I take on now is because there, there have been people that I am more. About their situation. And they are. Yes. And it's like this is a very unhealthy dynamic that it's, it just too much for me. I, I care too much to, to, to, to do that. I am here like sleepless nights, waking up and, and they're just like, just can't think about it. And they're living in. Bless. I'm like, Nope, nope, nope, nope. I was gonna say really quick though, that like the whole behavioral side of finance, I mean obviously I think that's super interesting, but the fact that you like, yeah, there's so much to think about with all the tax rules and like what is. Optimal for people. And then you, you also add in, okay, what do I actually know of these people? Like what are their habits? What are their patterns? What is the chance of them actually changing their behavior with their money? That's going to impact my recommendation. Like that's kind of crazy, like when you actually think about that, I don't know, maybe people are like, oh, it's not that big of a deal. That feels like a lot of work to me. But it's like you consider, I dunno, you gotta just do it. Yeah. You consider so much for like Yeah, that's, well, it's'cause I really want the best outcome for them. Yeah. Honestly, and, and I, I have seen so many times where other advisors haven't done. What I would consider the best outcome. Mm-hmm. And, and a big one is taxes. Mm-hmm. Like I was working with somebody not too long ago, and again, new client, and they had been put into something that was very expensive and their advisor basically prioritized the relationship with the client. Like the client was happy being in these items. Mm-hmm. And basically the way that the client told me was that the reason they hadn't. Done certain things. She knew that it was like this was suboptimal, but she didn't want to pay the taxes. Mm-hmm. And while I sympathize, I pushed her on it. Right. Like it wasn't a case of, okay, well because you feel that way, I will drop it. It's like, no, you feel that way because you don't understand the long-term consequences. Because if you did. You would change your mind if you had the, if you had the financial literacy that I have, you would change your mind, which is why it is on me to keep pushing it. Right? Yeah. And, and this does happen where, uh, I make a recommendation or I ask a client for information or need this or need that, and it's like other advisors would've dropped it. Mm-hmm. Because the client clearly doesn't want to talk about it or doesn't want to do it. The way I see it is if. You can't work with me then because I'm gonna keep pushing if I think it's the right, like either I'm missing something and it's not the right thing, or you are missing something. And I haven't done a good enough job of telling you and instilling you why this is important. So if I haven't done a good enough job, I have to do a better job, but I'm gonna keep pushing until I successfully believe that you understand the gravity of this issue, and then you've made your decision. Seeing as I'm a very rational thinker. Most of the time I'm either missing something or the client doesn't understand it yet. Yeah. So I'm gonna keep pushing and keep pushing and, yep. Maybe that, maybe that doesn't sit well with some people, but I just. Hey, there are laws. I'm looking for a good, I'm looking for a good outcome. I just want a good outcome. Yeah. It's nothing personal. No. And I want naturally, and I wanna be able to sleep at night myself. Yeah. Knowing that at least I tried, you know? At least I, I did everything that I possibly could. Yeah. And when said things happens or. I, I tried. I tried and mm-hmm. Did what I can do. Anyway, we are so far off topic. I know. I'm sorry. I started this. Okay. RSPs, uh, I think that was pretty much everything I wanted to say. Basically use them appropriately. They're great products to, to use. Make sure you invest it appropriately to the timeframe. Uh, your job does not stop after you just put money into an RSB. You have to then decide what to do with that. Remember it's long term. If I see another 25-year-old, uh. Saving money for retirement in GICs. Um, and if they've heard this and they still choose to do that, it seems that you have somebody specific in mind. There's there's a few. There's a few. And I get it. It's the easy thing to do and unfortunately. The guess where the banks would love you to put all of your money in GS so that they can go leverage it. Love to do more out, earn more on it. Um, GS are by far the most profitable thing for you to do with your money inside of a bank. So yeah. They want you No, I say for them it's profitable for, for the bank. Absolutely. So of course that's the advice. That is pushed. You know, you're 18 years old. Put, put money into GA to put money into tfs. Uh, put money into RSPs at 0.01% for the next 50 years. Um, but yeah, invest it properly. Invest it for the right timeframe. Don't make any rash crazy decisions. And make sure when you are saving for retirement, if your retirement plan is put money into RSPs and pray. Um. Talk to somebody, you're very likely doing something wrong, and if you've spoken to somebody and their recommendation is, put money into RSPs and pray. Talk to somebody else, come speak and trade their name and he'll go start. No, gimme the advisor's name. Whoever's. That's what I'm saying. Gimme that name. Tell me the advisor's name. Yes, that's where I wanna, okay. Anyway, I just hear Oriah waking up. So let's, let's, uh, we'll wrap this up. Let's wrap this up. So next time is on estate planning and tax and estate planning. What we do, so we'll talk about wills, how we structured ours, trusts, and things like that. Okay, perfect. We'll see you in the next one. Bye bye.