Podcast Episode 53: Special Guest Hugh MacPhie | The Magnetor

Not a Superhero. Special guest, Hugh MacPhie, on this philosophy: “So the genesis of magnetism thinking, which is basically the core of everything we do within our firms, we try to link all of our work back to, what does magnetism, and being more magnetic imply, with respect to either strategy work, or branding work, or creating an engaging and high performing culture? And the core question that I found super interesting was, what do people cheer for and why?”

Episode Transcript

BARENAKED MONEY PODCAST: EPISODE 53

Special Guest Hugh MacPhie | Magnetor

Announcer:
You’re about to get lucky with The Barenaked Money Podcast. The show that gives you the naked truth about personal finance. With your hosts, Josh Sheluk and Colin White, portfolio managers with WLWP wealth planners, iA Private Wealth.

Josh Sheluk:
Hello, everyone, Colin and Josh here as usual for your Barenaked Money Podcast. And we’re really excited today because we have special guest Hugh MacPhie with us.

Josh Sheluk:
Hugh comes to us as an advisor to some of Canada’s most successful leaders. He’s also the founder and partner of MacPhie. MacPhie is a firm that is helping Canadian organizations thrive on the world stage, providing guidance on team, culture, development, branding strategy, leadership, a whole host of different things. And also the author of, Don’t Forget Your Cape, what preschoolers teach us about leadership and life. So Hugh, quite the interesting title to your book there. Welcome to the podcast.

Hugh MacPhie:
Josh, thanks so much. It’s a pleasure to be here and I’m honored to be able to join you and your listeners on our conversation today.

Josh Sheluk:
Yeah. Great. So we have a lot to cover today, Hugh. I think we were talking before the podcast here that we could probably talk for hours, but we’ll try to condense some of the most relevant teachings that you can touch on for our listeners here. And one of the first things that I’ve found very interesting that you have written about, and provided some thought leadership on, is your idea of magnetism. So why don’t you explain to us, and our listeners here, what is magnetism the way that you define it? What is this philosophy? How did you come up with this?

Hugh MacPhie:
Yeah, Josh, it’s a great question. And I’ll describe how the concept originally manifested itself. And I think how it’s relevant to certainly the work we do. And I think it’ll be interesting to a lot of your clients and listeners. So the genesis of magnetism thinking, which is basically the core of everything we do within our firms, we try to link all of our work back to, what does magnetism, and being more magnetic imply, with respect to either strategy work, or branding work, or creating an engaging and high performing culture? And the core question that I found super interesting was, what do people cheer for and why? What do people cheer for and why? And I give a keynote on this, and I’ll just quickly describe some of the first slides I present.

Hugh MacPhie:
And easy way of thinking about it is when you watch Jeopardy. If you ever turn on jeopardy, weirdly, we all wind up cheering for someone within a couple seconds. Why is that? What is going on in our brains? And it’s not even in the frontal lobe, it’s in the recesses of our brains. And I thought, huh, could you imagine, how do you harness cheering? How do you deconstruct why people cheer for, or against, not just contestants on Jeopardy, but a spaghetti sauce in the grocery aisle? Or a stock you might like, or not like? Or a hockey team or a soccer team, or a professional sports team? So what’s going on there? What is actually happening in people’s brains that lead them to cheer for, or against things?

Hugh MacPhie:
And so when I thought a little bit more about that, we came up with magnetism thinking. And there’s really seven key questions that we go through in order to help organizations to become more magnetic. Which speaks to really understanding a target audience, really understanding how you then position your organization to help articulate to that target audience is how you’re making the world a better place. And then in viewing that through your storytelling, your culture, your systems and the processes, and the key things that you measure. So it’s a topic, to your point from before Josh, that I could talk about for hours. But the bottom line is all things are either positively or negatively magnetic. Be that a brand, a person or an organization.

Colin White:
Well, Hugh, it’s kind of interesting, that I think the most interesting thing to our listeners is the fact that you’ve defined this as something that’s subconscious. You just wake up one day. And I do this all the time. I have to pick a favorite, I have to order things. And that’s partially my disorder, or my disease. But what I’ve learned to do with myself is to question, how did I get there? And I think that’s the most valuable part, being self-aware.

Colin White:
Now you can’t possibly question every inclination you have, but to understand if you’re being attracted to something subconsciously. And you just wake up one day, it’s like, well, wait a second, why do I like this so much? Ask that question? Because I think from an individual’s perspective, that equips you better in the world to be maybe less swayed in unintended ways, and potentially stay more on course with where you’re trying to get. So it’s an interesting way to, magnetism again, is an involuntary attraction to something, is how I envision it. So asking questions along the way, I think, would be very, a helpful skill for people to remember.

Hugh MacPhie:
Yeah, no, it’s a great point, Colin. You speak to the magnetor and the magnetee. And if you’re the magnetee and there’s tons and tons of statistics and researcher on this, but we’re all exposed to literally thousands of impressions every day. Be it from the aforementioned spaghetti sauce you see in the grocery aisle, to what’s happening in the markets today, to the exposure to any stimulus that we encounter, our brains can’t handle it. And that’s to your point. Because there are some things that our brains just need to process involuntarily otherwise, we couldn’t make it through the day. But there are some things we would just say, okay, hold on. Maybe I’ll go pick the spaghetti sauce and choose the Ragu over the Primo. But if I’m making an investment decision just because everyone else is hopping into something and I’m fearing of missing out in the FOMO world, that’s where I think it’s important to be cognizant. And to acknowledge without apology that there’s folks like me helping organizations to manufacture consent without apology, without apology.

Josh Sheluk:
Yep.

Hugh MacPhie:
And so then therefore, having that honest over second thought I think is super important for everyone who is in your world. And that’s why organizations like yours are so important today. Especially right now, when it’s not just fear of missing out, it’s fear of getting killed. And here we are, we’re talking in late June, 2022. For those who are listen later on, it’s been a horrible, horrible few months in the market after a glorious couple years. And so the swinging of the pendulum is highly relevant to your point, Colin.

Josh Sheluk:
That’s funny you talk magnetism, Hugh, and the influences that are out there. And one that is somewhat related to our world, somewhat not, I just think of Elon Musk. And how he’s so polarized, no pun intended, polarizing. And also magnetic for people on both sides, either drawing you in or repulsing you at the same time.

Hugh MacPhie:
Yeah. We could spend several days talking about that. I’ll speak to one aspect of Elon Musk that came up with a very important conversation that’s relevant to this. I had some friends of mine over the weekend related to, I don’t know if it’s pronounced Dogecoin, or whoever. Help me if I’m getting this wrong.

Josh Sheluk:
Doge. Doge. Dogecoin.

Hugh MacPhie:
And people were awaiting on Saturday night, was he going to shout it out? And the price of this ethereal idea would go up and down based on whether or not he pronounced on it. I think it’s a really interesting point. And I’ll welcome your further build on this, but it really speaks to what is ethereal and what’s material, and what’s real? And fundamentally the core laws of economics, the core laws of what’s valuable, haven’t really changed much in a few hundred years. They really haven’t. Now the challenge of that is a lot of people are getting super rich out of ideas and speculation recently. And again, I’ll let you speak to this. But a lot of that in retrospect was driven by low interest rates. And, or the cult of personality.

Hugh MacPhie:
And so going back to Elon. Elon is a fascinating guy. And if he blesses something then that something will do well. In the same way that when Kim Kardashian blesses something, that something will do well. Is it inherently better than it was four minutes ago before said aforementioned people blessed them? Well not really. And therein lies, I think, a deeper conversation about the complexity of messaging today. And what happens when there are those who are deemed opinion leaders and thoughtful, bless something. Is that a good thing or is it a bad thing? And can you ride that in the short term, maybe? Is it a good idea in the long term, if the fundamentals are there? Probably not.

Colin White:
Well, no, it’s not an investible idea if it’s based on a whim. But the problem is that the market for get rich quick schemes, or shortcuts, is inexhaustible. The demand is immeasurable. So therefore when you have a demand supply imbalance, because again, there are no true quick ways to do things, there’s going to be, somebody’s going to jump into the market and provide it.

Colin White:
And to somebody like an Elon Musk who gathers a following, and look people are following everything I say, and hey listen, some of this he’s actually capable of profiting off of. The Kardashians have turned basically a whole career out of turning a profit off of having a big microphone, and having people listen to them. Because it’s how the market’s supposed to work, I guess. The challenge is that what people want really doesn’t exist. The shortcut, or they get rich quick, or what have you. But that’s not going to stop people from trying to position themselves to provide it. Or give the hope that it’s there. It’s almost like buying a lottery ticket in some respects. Or you’re buying the dream, or you’re listening to the dream.

Hugh MacPhie:
Colin, I’ll build on that. And we have the privilege in our firm to work with a lot of really cool organizations. Be they small not for profits too up, including TMX 100 companies. And the ones who I most admire, the leaders who I most admire, it’s not that they don’t care about the next three months, they do. But they’re really interested on in having a strategy, sticking with a strategy, and providing long term value. To their team, to their shareholders, and to the broader market.

Hugh MacPhie:
And there’s one leader in particular who I love dearly who has said, “Look, leadership team, if we’re behind this, then we agree with this. I’ll go to our board, we’ll go to our board, and we’ll back up the strategy. And we’ll say without apology, this is what we’re going to do.” Now, are they going to be good months and bad months? Of course there are. Of course there are. But their focus is medium to long term. And quite frankly, I would encourage more companies in this country to follow that. Quite honestly, and welcome your thoughts on this, and other jurisdictions like in Asia, they scratch their heads at the three months. Target, reality. They think in generations and quite frankly, we’d better start thinking that way here in this country as well for us to be successful.

Colin White:
Well, it’s funny because Israel is the home of some very famous economists. It’s actually, they have regulations and laws against reporting any rate of return less than one year.

Hugh MacPhie:
I think that’s enlightened thinking. It’s enlightened thinking.

Colin White:
It really is. So that the time, it is an important thing. I’ve got a really unpopular life hack that I offer to people and I say, “Make every decision based on the outcome five years from now.” What’s the right thing to do now that’s going to put you in a better spot five years from now? That’s really unpopular, because again, it flies in the face of, get rich quick and all these turnaround stuff. But if you can have a longer time horizon expectation than those around you, it could lead you to a different path. And perhaps a more sustainable path.

Colin White:
But we in the investment game are terrible. My phone can give me updates one 10th of a second on things that I probably should only look at once a year. And there’s all this technology out there to give us all this information. And there’s not enough time being spent on saying, is it helpful? Should you have that information, or is it just going to make for worse decisions? And the investment industry’s done quite a bit of work on, yeah, more information does not necessarily lead to better decisions. And I believe that there’s other jurisdictions, or other schools of thought on the same thing. More information does not always lead to better decision making. In fact, at a certain point it begins to lead to worse decision making.

Hugh MacPhie:
Right. Which brings us back to planning. And which brings us back to having a plan. And which brings us back to being courageous enough to more or less stick with that plan. And that’s the advice that we give to those with whom the privilege to work with. And once the plan is established, then we encourage them to avoid shiny new balls. Now the challenge of that is we live in a VUCA world, and I suspect most of your listeners know what that means. It’s a volatile, uncertain, very hard to predict environment. And it’s funny, I was speaking to a client just this morning, and again, it’s late June 2022. A year ago we had 0.5% interest rates, no war in Europe, inflation was nonexistent. We were sort of in the middle of a pandemic still, but people were looking forward to that being over and getting, quote unquote, back to normal.

Hugh MacPhie:
Today, it’s one year later and we live in an entirely different world. Many of the realities we now face would’ve been nearly impossible to predict. Super smart people with computers smarter than mine might have been able to do it, but not really. So therefore what? Have your plan, but be flexible. And I think that’s where organizations like yours are super helpful today. Because when is it appropriate to say, “We had a plan and we decided this is where we’re going to go. But there has been a forced measure that leads us to believe that we need to make some tweaks to this.” And to do so in a sober, thoughtful and intelligent way, rather than a panicky reaction related emotional way.

Josh Sheluk:
Yeah. Well, you talk about the difficulty in predicting and forecasting the future. And this is sort of circling back to one of the other principles that I’ve heard you and your organization talk about, Hugh, and that’s the idea of scenario planning.

Josh Sheluk:
And how that can be effective in helping you plan a way forward. So give us some more guidance on what you suggest in that role.

Hugh MacPhie:
Yeah. Happy to do so. And scenario planning is a subset of having a vision, and having destinations, and having key goals. So it really starts with, what is the vision of a person’s financial aspirations, or an organization’s vision for how they’re going to make the world a better place? Within that context however, prudent and thoughtful organizations will take the time, and make the time, to think about, well what could happen? And what are some scenarios we need to be thinking about actively, and plan for those and do some role playing and, or some war gaming, frankly, around what that might be? And much as this is an individual whom I no longer frankly have much respect for, but there was a time that Rudy Giuliani was a leadership guru based on his time as Mayor of New York, and his management of the horrific events of September 11th.

Hugh MacPhie:
And I saw him speak once. This was years ago before he kind of went sideways. But he had a really interesting point. And the point that he made was the City of New York didn’t have a game plan for what to do if two airplanes crashed into the World Trade Center Towers. They did not have a plan related to that specifically. However, what they did have was a binder ready to go if there was a terrorist attack in lower Manhattan. So guess what they brought off the shelf that morning? Let’s take off the, again, a physical binder in those days. What do we do if there’s a terrorist attack in lower Manhattan? And I’m paraphrasing that, that probably got them about 66.67% of the way to what they needed to do on that horrific morning.

Hugh MacPhie:
Not perfect. They still needed to improvise. They still needed to reduce the level of panic. But as leaders, when things go horrifically wrong and there’s a crisis, it’s not bad when our brains shrink in those moments. Because our brains do shrink in those moments to have something that was developed in moments of clarity prior to when that happens. And I think that’s a really important thing to keep in mind in the investing world. Because look again, we’re speaking today, the markets are not doing so hot. Will they get better? I think they will. When? How? We’re not sure. But let’s have a plan.

Colin White:
Well, I mean that the parallels are actually very, very strong from an individual and making decisions. And I’ll go on record of saying you can’t predict the future with sufficient enough success to make it worthwhile. So anybody who relies on that as a method of finding your way through the world, even if you get it right 19 times out of 20. You get it wrong once and all your advantage is going to go away. So any thought or strategy on knowing what’s going to happen next with any kind of detail, I think is going to fail at some point. But the act of going through the planning process, and again, no plans arise first contact with the enemy, to quote General Tommy Franks in Iraq. Because as soon as you have a plan, it becomes stale. But what a plan does is allow you to organize your thoughts. That allows you to organize all of your assets to understand, okay, I understand where everything is on the playing field right now.

Colin White:
And if something changes, I’m now starting from a point of being organized. And if I put some thought into the scenario planning, as you discussed, and that’s fantastic, I may have an inkling of where to get started. And you’re right, because in the moment of stress, everybody’s brain shrinks. Correlations go to one. A lot of things change in a hurry. And if you’re trying to digest it all in real time, and make a decision, you’ve got high expectations of yourself, for sure.

Colin White:
But the key is to understand when the environment changes, does the questions we’re dealing with now is like, should I change my plan based on this event? And that can be a subjective thing. At what point do you consider changing a plan, or coming up with a fresh plan in a moment in time? Because again, it’s the human brain’s ability to project forward in a straight line is, if America goes down two months in a row, that means obviously it’s going to zero. Because my last two data points were in this direction, therefore that’s where it’s going to crash. I understand how you got there, but no, that’s not how it works.

Hugh MacPhie:
Yeah. Colin, I love where you’re going with this. I’d encourage us all to think about being very rigid on core purpose, core values and core fundamental objectives. And very fluid on how we get there. And this is advice we give our clients all the time. In fact, I was asked this just recently. An organization’s purpose statement or mission and vision should be etched in expensive granite, expensive granite. And put on the wall for a generation.

Hugh MacPhie:
Then going further and further into a strategic plan you get to objectives and priorities, and objectives and key results. Those things should be highly fluid. And if they’re not changing on a somewhat regular basis, then they’re missing the point. So the further up you get, the more rigid one’s thinking should be. And the more one should be very judicious about changing one’s fundamentals. But for goodness sakes, within the context of that plan, and within the context of a strong values and principles set, being flexible is the way of today. Just because the world was changing so fast. But Colin, I loved your point.

Colin White:
Yeah. I think that the key to success, to circle back to one of your earlier points, the way I frame it is people have X number of decisions they can make in the run of a day. Whether that’s 150 decisions, there’s a finite amount. Because I know myself. If I get to the end of a long day, deciding what to have for suppers is just beyond me. Whatever’s in front of me.

Hugh MacPhie:
No, true. No and the science bears that out. That is actually empirically proven.

Colin White:
Yeah. And so my wife’s going like, “What do you mean you don’t know?” I seriously don’t know. If you ask me to make one more decision, I may slip into a coma. So with treating decision making as a finite resource, where do you spend your time? To me, that’s the art form and that’s where the true success is for an individual. Should I be spending my energy on digesting this particular piece of information, or this variable that has changed? And your level of success is going to be, are you focusing on the salient points? Are you focusing on the stuff that you can actually make a decision on and change an outcome?

Colin White:
Because trying to figure out why the market went down today, Josh, you’re going to have some fun with that. I know you will at the end of the day. But that’s recreational for you. But for people to try to, in real time, discern these things. At the end of the day, what are you going to do with that information? Is that going to change what you’re going to do tomorrow? I’m not so sure it will, because tomorrow’s a new day. Then that information, digesting that information may not put you further ahead.

Josh Sheluk:
Well, I think what you’re talking about as well Colin is the whole idea of a lot of the decisions we make are involuntary. And Hugh, you’ve written about this as well, is the idea of using intuition to help you make decisions. And I suppose that sometimes what you’re having for dinner, whatever comes to mind first is perfectly fine. But a lot of other times, like what stock to buy, or where do you invest your money for the next five years, using intuition may not be the most successful course of action.

Hugh MacPhie:
There was some research out of the Netherlands about a decade ago that spoke to sleeping on things. And how sleeping on things is a thing, and it actually does, in some context, help people make better decisions. However, and this is the big asterisk and caveat. So making a gut decision only works when you informed your gut. And so the gut needs to be full of data. The data points and ideas. And then, this is where the analogy falls. Then the recess of your brain does all this crazy math and it figures out, maybe we should go this way versus that way. For some decision.

Hugh MacPhie:
It’s informed by immense in a data plus experience, plus synapsis firing in certain ways. But to your point, I’ll take this on a bit of the engine, which is I think relevant to the markets and what you’re listeners are interested in. A mentor of mine once gave me a really neat analogy, which speaks to why FOMO, and following the herd in investments, is probably not such a hot idea. And his point is, investing is more like going to the grocery store rather than going to the jewelry store. And you need to buy some boring stuff. Yeah, maybe get a bag of chips and something cool, but you need some fruits and some vegetables and solid fundamentals. And then maybe a couple of sexy things. But it’s not like going and just buying bling and what’s hot now.

Hugh MacPhie:
And I think that’s a really interesting analogy that you need a balanced diet. And a portfolio that’s by definition, intelligent, based on whatever plan one has. The reason I use that as an analogy is we see a lot of FOMO. And people don’t like it when they see someone else on social media saying, “Hey, are you into crypto too?” Or, hey, are you into this too? And it’s fascinating how all those bragging very quickly ceases to comment when things go in the other direction, and you can graph their activity based on how well it’s going. Anyway. It reinforces your point, Josh. Like let’s be thoughtfulness, fed intuition, and working with others and not, just talking to one or two other human beings also is not a bad idea. As opposed just keeping all things in one’s own brain.

Colin White:
Well, and to a certain extent, and again, you work in the world of informing companies on strategies, such as this. But being a kid of the eighties, when Air Jordans showed up and shoes became a popular thing, it was all about who can I get to wear my shoes? And they would be running around with cart fulls of shoes trying to get the right people in the right place to be seen. They’re wearing shoes. This is something that is pervasive. So the crypto guys are out there and they’re trying to be seen, and they’re trying to be seen in a certain way. And I guess for people who go, oh, this is just randomly happening. Look, this person’s telling me smart things. No, no, no, no, this isn’t random. This is highly orchestrated, and may be more highly orchestrated and more fine tuned with technology than it’s ever been.

Colin White:
So don’t just assume that you’re bumping into a story. No, no, no. This story was aimed at you. And it was crafted to make you feel a certain way. And back to my earlier comment about, have a little voice in your head that goes, why am I cheering for this? And have that little critical thought in your head, is maybe more essential than it’s ever been. A good friend of mine was very fortunate to have received the highest compliment I’ve ever heard of a human being ever receiving. He was called pathologically contrarian. To me, that is a huge, huge compliment. Because in a day and age where it’s all about those messages, and trying to position them in such a way that you’re going to consume them. Think a little bit contrarian actually can go a long way to where it’s protecting yourself. Right?

Hugh MacPhie:
Yeah. Yeah. And I’m reminded of a great question, Colin, which builds on your point from a business standpoint. I think it applies equally well to investing into life in general, which is, why are we doing this? And if a group is heading in a certain direction, I completely agree, Colin. It’s very difficult sometimes to be that devil’s advocate in any strategy, and or life conversation. And I think this is a broader issue with respect to where we are as a country today, quite frankly. We need those voices to say, excuse me, is this actually a good idea? Is this good public policy? Is this good thinking? And to dare, and have the courage to stick one’s hand up and say, actually, and I’m not sure if this is going to deliver on the intended goal of the intended aims.

Hugh MacPhie:
Now I’ve had the chance to work within government and within public policy. And it’s what I call the whack a mole theory. Because too often governments will try and solve one problem, and another one pops up. Because the law of unintended consequences is alive and well as it’s ever been. And the same is true in other contexts. But thinking through to, we do this, what’s the initial implication, the secondary implication, the tertiary implication, is something I’d like to see more organizations think about quite frankly.

Colin White:
Well Hugh, one of the points that we discussed, and you’ve alluded to previous to this is, the cannabis place on the world stage. And I was wondering if we could get some comments from you on that topic. And I have a hidden agenda because again, our clients suffer from availability bias. And they’re heavily influenced by what’s available to them. And sometimes it’s difficult for them to comprehend that Canada’s only part of the world. So Canada’s place on the world stage will perhaps disproportionately affect how we see the world from this particular seat. But in a world where the globe is very effective on certainly any investing that you’re doing, a larger perspective would do you better. So I’d love to hear your comments on Canada’s place in the world. And maybe if you could connect that to the perceptions of a Canadian, that maybe you’re not serving them well and understanding the place in the world.

Hugh MacPhie:
Yeah. Happy to talk about that, Colin. And I do have a strong perspective on this, and I have a worldview, which is that we do live, and we’ll continue to live, in a globally competitive economy. And much as there’s a globalist perspective that is very popular these days, my own view is that the job of governments is to defend the national interest. Or to defend the provincial interest, period. That’s what you get up in the morning to do. Because guess what? Leaders in other countries are getting up and they are defending their national interest. Or they’re defending their provincial interest, or their local interest. So they must scratch their heads when they see policies that they look at on the surface and say, this is actually harming your economy. This is actually bad for you as a country that has certain natural strengths.

Hugh MacPhie:
Why would you do that? I pictured the secret meaning of the French cabinet and I used to live in France. I love France. They are unapologetic. They defend Le France. Le France first. And it’s in their blood. And I picture them scratching their heads and thinking about public policy. And kind of like, if do we do this? Was it the Russians that are doing this? Was the Israelis? Who’s setting public? We’ve done a great job of messing up public policy in Canada.

Hugh MacPhie:
There was a study that came out in not long, I think was from the OHCD that predicts to be 40th out of 40. 40th out of 40. So we got to get our act together when it comes to competitive productivity, and doing those things that over time are proven to be good for one’s economy. Which in my mind include defending the national interest, making sure that regulations are there and in place, but not overly burdensome. Keeping taxes low to attract investment. And ensuring that innovators can innovate.

Hugh MacPhie:
And that governments out of the way and supporting that. And not doing stuff. I think governments have a tendency to want to do stuff too much, rather than just say, we’re going to do less stuff. And then therefore let innovation flourish. So maybe that’s our next podcast friends, but I’m very concerned that the debate in the conversation has gone too far away. And the pendulum has swung away from the very sexy topic of competitive and productivity. Which we need to be on top of less. We fall further behind. In particular leisure jurisdictions that are very keen on ensuring that they’re competitive, competitive and productive, and in driving their own GDP.

Josh Sheluk:
So Hugh, I’ll ask a couple questions related to that. One is you mentioned tax policy. And corporately, in Canada, our corporate tax rate is probably below average relative to the rest of the world. So that’s one comment I’d just like to hear thoughts on. The other one is when you talk about protecting national interests, that can very quickly to me lead to, well, I should impose tariffs, and import quotas, and things like that. Which I guess from an economic theory perspective would be counterproductive. So there must be some balance there that ensures open borders, and a globally competitive environment, but without being overly protective.

Hugh MacPhie:
Yeah, no. And Josh, we’re a hundred percent aligned. In my world view, protecting the national interest means more free trade. It means more open borders. It means certainly domestically that we reduce tariffs and barriers between our own provinces.

Josh Sheluk:
And that’s crazy. I think most people would not understand that we have tariffs between provinces. And that just blows me away. Every time I hear about that, I am reminded like, this makes no sense. What are we doing?

Hugh MacPhie:
Yeah. I think beyond the taxation side, I just think that there is a culture domestically that we need to really think hard about. And I’ll share the story of a dear friend and client of mine. She’s one of my favorite people in the world. She runs a big business. It’s about a $5 million per year business. And she fully says like, she considered herself, the entrepreneurial poor. Her margins are such that it’s tough some months, literally tough some months, to stock away a couple hundred bucks to share with WLWP and invest for the next month. They’re not starving, but they’re not far off. And yet others say, well, you’ve got a small business and you must be super rich. Well, actually quite the contrary, thank you very much.

Hugh MacPhie:
And there are those who, if they get sufficient reasons to drop out of the entrepreneurial economy, they will. And then guess what? Then we can’t have the wherewithal to afford things in this country that we like. And who like a great healthcare system. They like a great education system, et cetera. Those things aren’t free. They’re not free. And people need to really come to terms with that because they don’t think a lot of the, frankly, and Josh are probably 26 or something like that. You look very young. But a lot of-

Josh Sheluk:
Paula would say 16.

Hugh MacPhie:
They are clueless, but we got to pay for this stuff. We got to pay. Every time you say government should do more, you got to pay for that. Someone is going to have to work more hours, or do something that will pay for that. And especially now that interest rates are higher, because that the days of free stuff is over.

Colin White:
Well, that’s the limitation of having a democracy. We ask everybody’s opinion. But one of my favorite examples was Iceland them back in 2008 when they were voting on whether or not they were going to pay back the money that they had received, and to bail them out. It’s like, do you want the money? Yes. You’re going to pay it back? No. If you’re going to vote, ask people to vote, they’re going to vote in their own self-interest and it’s not going to make any sense.

Colin White:
But again, it’s agreeing on the overarching figure that’s going to find a way forward. But I think the neat thing that you’re shining a light on, which is, again, fascinating for me. And I think is very, very important for our listeners to understand is because again, being self-employed, and having been self-employed, and worked with a lot of self-employed people, yeah, if you own a bar, you’re the coolest guy in the street. And you always have money in your pocket, you must be rich. And you know what? Having a lot of self-employed people’s clients, you’re right.

Colin White:
You can have a big business, but at the end of the day, not a lot is out there. But the perception is because of where you sit and where you are in the world, you’ve made assumptions about that. The same as sitting here as a Canadian, you make assumptions about how the world works. And being humble enough to say, you know what? Maybe my global view is not comprehensive enough. And I need to be open to a broader way of thinking, is very, very important, but also very difficult to get to because it’s just not natural.

Hugh MacPhie:
Which brings us back to short term versus long term thinking. And it’s easy to say, what’s good for me today, but what’s good for one’s own best interest in the broader, best interest in the medium term? It’s interesting. And I’m coming from Ontario today. And in one of the parties in the recent election had a policy of a buck a ride for transit. Which I have a kid who’s in the university and he said, some of his buddies say, yeah, it’s awesome. But then they thought themselves, they’re smart. It’s like, no, it’s not. Because that’s going to mean I’m going to have to pay for all this stuff in 15 or 20 years when I want to be rich.

Hugh MacPhie:
And so in order for me to be rich, then I don’t have more taxes then, because this is obviously the worst kind of public policy thinking. Which is, we just simply to try and buy and create favor. But people are that naive, I think. And I think in the scheme of politics, people are sometimes underestimated with respect to their sophistication. And I would encourage us all to be thinking that way.

Hugh MacPhie:
And again, back to your point from before Josh, what is in the national interest? So the national interest does mean following the science of what drives GDP, period. And there are better ways and worse ways to do that. And we can learn it evolves. But it doesn’t mean we don’t need government, we do. Government’s important. And it does a lot of important things. But when it gets too much and too big, and encroaches into areas it should not, and then crowds out investment and productivity, then bad things happen.

Colin White:
Yeah, that’s exactly it follows. People feel bad, eventually they find a reason to feel bad and they feel worse. It becomes a self-fulfilling prophecy, for sure. Confidence is a fleeting thing. Being a former basketball coach, when you head momentum, the hoop looked the size of a bathtub. That’s not a problem. If you didn’t have momentum, you were just running around trying to figure out which direction you’re supposed to run in. And it really is the world of difference. And that transitions for me into everybody’s life, to everybody’s professional and personal life. And you’re right. If we get in the wrong direction, it can take a lot to turn things back.

Hugh MacPhie:
Yeah. And I love that analogy, Colin. And I’m a late in life basketball fan, but yeah, it’s long wave theory. Because you start to get some momentum, it can last minutes, quarters or games. And if you get in the other direction, it can also last minutes quarters and games. But again, there is ways of engineering success into those long waves. But encourage everyone who’s listening to this, to think about, what do we need to do at a macro level, from a public policy perspective, to ensure that we’re kicking ass on the world stage, and driving our GDP so that we can do nice things. If you don’t have the wherewithal to do nice things, you can’t do nice things.

Colin White:
Yeah. Well, you can put me in the camp of people that’s firmly and fair in favor of doing the stuff that’s required to pay for nice things. But I can tell you, having raised kids and been a financial advisor for a lot of years, is sometimes difficult to get a whole lot of people on the bus, when the next bus over is promising something quicker, easier, faster, and nicer. And it’s got a Kardashian attached to it.

Hugh MacPhie:
Yes, indeed, indeed. Which brings us back to short term what’s popular, versus long term what’s best?

Colin White:
Hugh, is there anything that we missed that you wanted to get into?

Hugh MacPhie:
It’s been a great conversation. Really important, I think, for people that you’re serving and that you’re working with to really think about again, on that macro basis, what can we do as a country to really kick us on the world stage? And that’s what gets me up in the morning. That’s what my own firm’s purpose is. Help Canadian organizations be that hospital, or a publicly traded company, or a startup to punch above its weight. And I just encourage all of us to think that way. And to know that if we don’t, there are other countries who are thinking along those lines. So let’s just be prepared to be as awesome as we are. And to celebrate the greatest. This is Canada.

Colin White:
Well, Hugh on behalf of the great family that is Barenaked Money, and all the people that are behind the scenes on putting this together, I want to sincerely thank you for coming on. It’s been a fun conversation. And it’s always an interesting challenge to talk to people a little bit outside of what’s exactly our wheelhouse. Because that’s where you can actually change and grow your thinking. So thank you for engaging with us and having this conversation. It’s been very, very informative, and I appreciate your time.

Hugh MacPhie:
It’s been a pleasure.

Josh Sheluk:
Thanks you.

Announcer:
This information has been prepared by White LeBlanc Wealth Planners, who is a portfolio manager for iA Private Wealth. Opinions expressed in this podcast are those of the portfolio manager only, and do not necessarily reflect those of iA Private Wealth, Inc. iA Private Wealth Inc, is a member of the Canadian Investor Protection Fund, and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth, Inc operates.

Colin White:
We’ve noticed something. It seems there are a lot of people who would rather try to figure out their lives with an online calculator that air your finances to a human. Stop doing that. You need to talk to someone who can help direct you, tell you where to start with what you’ve got, to make the biggest impact on your future. You can’t figure that out at doihaveenoughcash.com, but you can figure it out by chatting with us. Call us. It’ll be okay. You’ll see.

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