27 Years of Financial Advice in 11 Minutes

- Hello and welcome to the TLDR podcast. A show about the culture, gossip and business of money. And this week, is this the last coffee generation? My name is Devin Friedman. I am here with my co-host, Matt Karris, is the director of product for WellSimple, our sponsor, and a man who's deeply disappointed that he does not get to talk about golden doodles today. - Yes, I would like a golden doodle 'cause they look sort of just like me. - Yeah, it's a good, you guys have similar hair. - Yeah. - You have boundless energy. - I know. - Very positive, maybe one of you is. - What are you talking about? I think that I'm just as positive as a golden doodle. You and Sarah always talk about how like tech is gonna kill everything. - No, we're negative. - Yeah, I was just saying I'm definitely the downer. - Sarah Rieger is the business and markets correspondent for the TLDR newsletter. And someone who is drinking coffee on our coffee episode is that what's happening? - No, there's a mysterious substance in this mud. - Will we find out what it is? - You don't have to wait, you'll see. (upbeat music) - Okay, we have a great show for you coming up. We're gonna talk about, yes, you guessed it, the price of coffee. We're gonna talk about possibly alarming, possibly just normal bad job market for college graduates. And we are going to be conducting the exit interview with a man who has been giving financial advice for 27 years, Rob Carrick. You may know him as the finance columnist for the Globe and Mail. He's retiring, but on his way out the door, he is stopping in at the TLDR podcast to tell us everything. But first, Matt Carrick, who has made here losing money? That's interesting to you right now. - So I've been seeing a lot of stories about how much recent college grads have been struggling. And it's starting to become a major worry for people in the news, it seems, even for parents of recent grads and recent grads themselves that I know. - You know, I think for generations, always like a worry about what's the economy gonna be like when I am ready to get a job that taps into our fear about the future for our kids, or if you're in college for yourself, right? - Yeah, that seems to be like the sentiment I'm hearing. You know, honestly, I'm not sure it's that bleak out there, but like, you know, it's definitely bleaker than it's been or tougher than it's been in recent history. And the numbers sort of show that pretty clearly. - What did the numbers actually say right now? - So it's actually a jobs day. We're recording on Friday, August 8th. And as of this morning, the Canadian jobs numbers came out and they showed this trend pretty clearly. Like nearly 15% of young Canadians aged 15 to 24 are unemployed, meaning they're trying to find work but can't. And that's the highest unemployment rate in 15 years since the depths of the financial crisis. The numbers for recent college grads are even worse. We only have data on recent college grads through the first quarter, but more recent college grads are unemployed than any time since the mid '90s outside of a brief blip during the pandemic. So it is pretty tough out there. - So yeah, let me ask you this. In general, the unemployment rate for recent college grads tends to be higher than for other folks. Is that right? - Yeah, so if you look back at the unemployment rate for recent college grads versus the total population in Canada over the last 35, 40 years, basically the entire time recent college grads have had a bit higher of an unemployment rate than everyone else. The main intuition there is the rest of the population includes people who are anywhere from their late '20s all the way through like their '50s. And on average, a lower percentage of them are gonna be like turning over. Like many of them have been in jobs forever. So it's just, it's this idea of like, when you leave college, you're done with college. Like everyone gets fired from college and needs to go into the workforce and they all need to get a job. Everyone else is like a default employed. - So you have like a big batch of people dumped out and like it takes a while for them to be absorbed into the workforce. - Yeah, and it's actually, I mean, it's pretty remarkable how efficiently the economy does integrate those people every year. Like the unemployment rate for recent college grads is only like between 10 and 15%. So that means like 85% of them that are looking for jobs or getting jobs, which is actually kind of remarkable. But that rate is like much higher than it was a couple of years ago. It's about double what it was in 2023. And the gap between it and where everyone else is, the unemployment rate for everyone else is the widest it's been in 30 years. - Do we know why it's harder to find a job if you're a recent college grad now than it has been? - Everyone has theories. You know, there are a lot of people pontificating about, oh, the weakness in the jobs market is driven by X or Y or like this is the smoking gun. None of them actually have any idea. The main thing everyone's blaming is AI. I mean, if you like listened to the people running the companies, like they're talking about how much AI is having a role, probably some of that is posturing because they want to like prove to their investors that they're using AI. But as of last June, only 12% of Canadian companies reports having adopted AI according to Statistics Canada. And that same survey actually suggests that about 10% of them are saying the AI is impacting their hiring, but you know, 40% of those companies are saying that they're increasing hiring. So it's like very unlikely that all of the weakness in the job market is AI or that we're like seeing the peak impact at all. There's probably a lot of other stuff going on. And the other couple of culprits that are pretty clear are the reversal in the tech boom, like over hiring in 2021 and people just cutting back there to like uncertainty from the trade war is probably having some impacts. And then three, like there was a huge amount of immigration into Canada and that increased the labor supply. Do we know anything about like, if you look deeper into those numbers, where is it worse and where is it better? So if you look at the change in job postings over the last five years in Canada by sector, software development is like the sector that's contracted the most. There are 30% fewer job postings for software development jobs now than there were five years ago. In contrast, the sectors that have been booming are ones in the medical space, ones in education, you know, medical technicians have seen job postings rise by about 50%. Physicians have seen their job postings rise by even more than that. You know, I remember like five or 10 years ago, it was like, it's hard to get a job out there. Just make sure your kids study computer science. You can always get a job as a software engineer. And now it's like, well, AI is writing a lot of software, especially like entry level software. I mean, I don't know. I guess like, my main takeaway is that like, you can never really know. And probably like the biggest thing you could just tell your kids to do is like, do whatever they want and just like, don't be super rigid about how they do it and try to be adaptable. Because like, I don't know, I had like a plumber at the house a couple of days ago. And like, I realized that the guy was looking stuff up on his phone. You know, he has to use technology like the same way that everyone else does. And there's a whole host actually of AI apps out there that are like made for technicians for them to take a picture of the part they're putting in and like get guidance on how to use it. And so like, even those hands-on jobs that all of the tech bros say will be the last to be automated require adaptability. So it is, I don't know. That's my maybe positive, maybe pessimistic take. It's just, you're gonna have to adapt. - So what you're saying is if I'm really good at looking stuff up for my phone, which I am, I could be a plumber. - Yeah, exactly. - Do you realize how broke I am? What do you want me to do, huh? I don't have a job. - Okay, Sarah Rieger, who is making her losing money? That's interesting to you right now. - So we've been talking a lot about people losing money on tariffs, but there's one tariff that I've been thinking about obsessively, depressively all the time. And that's the new US tariff of 50% on Brazil. And that's because Brazil is one of the world's biggest coffee exporters and I would personally describe myself as one of the biggest coffee importers. - How many cups of coffee do you actually drink a day? - Too much, I try to keep myself to two, but I'm lying if I say I stick to two. - Matt, do you just do your giant Dunkin' Ice coffee and that's it? - Yeah, if I go for more than it, my insides wanna kill me. - Okay, what's going on with coffee? - So it was already pretty expensive before this new tariff came in. Coffee prices hit an all-time high earlier this year. They nearly doubled over the winter. And the future of coffee itself, I'm sorry to say, is actually in question. - Well, coffee prices are getting way higher. Is that just because of inflation or is there something else going on? - So in the last year, according to Statistics Canada, roasted or ground coffee prices are up 31.4%. Just in the past year, compare that to food in general, which is up just 2.9%. So the cost of coffee is like skyrocketing way more than the other stuff we consume. - Yeah, that's legit. - So there's something else going on. There's this article on investment site, Deep Dive, that phrased it in a way that I'm going to steal, which is that coffee is a diva of a crop. It is very fussy. It needs very specific temperatures and elevations to grow well. And so coffee grows in this like really narrow band of places near the equator, where it is increasingly struggling to thrive due to the effects of climate change. And not to be an absolute downer here. I know we are all very hooked on coffee on this podcast, but it is going to get worse. So studies show that it's likely coffee bean shortages at major brands like Starbucks are going to be a regular thing by 2029. And that by 2050, thanks to climate change, the land that coffee can be grown on is going to be cut in half. - That is depressing. As far as this is like a business story, are there people like out there trying to solve the diva problem here with coffee? - Definitely. So there are three options. I think that companies are trying out here to try to fix this. The first one is that coffee could maybe just be grown elsewhere. You know, as places are getting warmer, it's trying to open up some new regions like Argentina or even the Gulf Coast in the US. But it's going to be a while before those other regions are potentially more suitable to coffee's diva energy. So it doesn't seem like that's going to be the major solution at least any time soon. And if you look at Canada right now, we have no commercial coffee growing operations here because coffee requires consistent temperatures. - Okay, so probably going to be hard unless things change in an unforeseen way in Canada for it to become a big coffee producing country. What's the next option? - Well, the second option is actually changing the coffee itself. So right now there's not any commercially available genetically modified coffee, but there are lots of different beans that are bred for different traits like taste. And there is research underway to develop beans that would be more climate resilient. Starbucks actually purchased two research farms last year in Costa Rica and Guatemala to invest in developing more of these climate resilient hybrids. And Nestle is using AI to genetically sequence plants to make them more resilient. - It sounds like they're working on this a little bit, but like, what if it doesn't work? What if there's no more coffee? What will we be drinking then? - Yeah, so that's what I really got interested in this week because I am desperate to make sure I have a backup in place. And coffee alternatives or imitators are really starting to pop up in coffee shops and grocery stores. A survey done the US last year showed that about one in five coffee drinkers are open to alternatives. And I'm sure that number might rise if coffee is less cheaply available. I should say too, some of these products aren't new. Like people in France and India have been cutting coffee with chicory root for like literally centuries, but the market is growing. It's worth about $15 billion right now compared to the entire coffee market's $270 billion US. And the growth of these substitutes is going up about 6% per year. - Now I don't wanna like replace my coffee with chicory, but there are a couple kinds of coffee I've had with chicory that are pretty good. - Well, you said that to me when we were talking about the idea for this episode. And honestly, I was so suspicious. So I actually went out and I bought a bunch of these fake coffees for myself to actually see like, are these decent substitutes? - Okay, taste tests, where do we net out here? - So I got a bunch of them and they are made of all sorts of different stuff. So there's the chicory root, some are chickpea, some are made of roast barley. I couldn't try those, but I made friends try them 'cause I'm allergic, mushrooms even. And they really range in price too. Like some are as cheap as like $5 to $10 for a bag of roast chicory root, but some of the like luxury like faux latte alternatives like Mudwater or Bloom are like 20 to 40 bucks. - Yeah, that doesn't solve the problem. - Agreed. But I have to say, Devin, you're completely right. I'm really into the chicory root. And I have to say the first thing I said when I tasted it was I thought it tasted like dirt. But the earthiness of it has grown on me. - That's a better way of saying it's earthy. You know what else is earthy? Dirt. - Yeah, that's the more like wine tasting notes word. - But do you have like, is it just chicory root or is it just like half and half? It's like hamburger helper for your coffee. - I tried it a bunch of ways. I tried just chicory root. I tried making a latte out of it. I tried blending it with coffee. And I think I am going to start cutting my coffee with it. - Matt, you opened to some mushroom coffee? - No, this is almost as bad as when they tried to get us to all eat the lab-grown meat as opposed to the regular kinds. I will be drinking coffee until the day that I die. - Fellas, don't drink that coffee. You'd never guess there was a fish in the percolator. - Okay, our guest is a legend of Canadian finance. I think it's safe to say that Rob Kerrick is a legend. An icon, as my daughter would call it. You had your jersey hung up and you are now the retired personal finance columnist for the Globe and Mail. - I am retired from full-time column writing, but I will be contributing steadily to the Globe from post-laborate period onwards. - Welcome, Rob Kerrick, a man who cannot stay away from the game. - Thank you. - Well, Rob, your work precedes you. Just let's just quantify it. How many columns have you written? - Well, let's say 27 years more or less times, at least two to four columns a week, plus blog posts, plus newsletters, plus podcasts, plus videos, plus responding to reader emails, plus social media posts. I mean, we're into the tens of thousands of interactions with readers, probably hundreds of thousands, really. - Let me start with this. Over the last 27 years, can you say like, what hasn't changed? What are people mostly worried about when it comes to money? - Not having enough. Not having enough to live the life they wanna lead, not having enough to realize their financial goals, and the two prominent goals are home ownership and retirement, and underneath that, I would put raising a family. - And how do those worries manifest for people? - It's interesting, right in the moment, the interesting manifestation to me is a variety of unhelpful responses from Jen said, there's like the capitulation theme. I'm never gonna afford to buy a house or to retire, so what do I need to save for? There's like the soft life theme where I'm just gonna treat myself along the way and spend big time because I don't need to save, I'm never gonna achieve my financial goals. And that's new. Millennials always thought they could get in the door and they were just upset that they couldn't. Jen Zed is wondering, will I ever get into the door? They're much more skeptical of that happening. I think they will, but for now it feels like they won't, and that is affecting their financial behavior and not in good ways. - Our former co-host, Kyla Scanlon called it financial nihilism. Is that a new phenomenon? - Yes. - Do you think that people feel more like, what's the point now than they used to? - People used to, through most of my career, people were clawing and scratching to get in the door. There were frustrations and frictions that prevented them, but they never lost sight of their goals. And now I find it's a little bit different, and I wish I could sit down with these people and sort of map out how their goals were achievable, maybe not as quick as you thought, and maybe not as quick as your parents, and maybe not as quick as your friends who work on Bay Street, but it will happen if you just show a little patience. - In my opinion, I think having some concrete things to do so that you're not at zero anymore can be helpful. What would you say are some tried and true, fundamental, concrete steps you can take to be on your way to, you know, not like a life of leisure, but like the life that you maybe wanna have? - You know, what I think you're saying is, how can I start building wealth as opposed to just living for the moment? - That's a lot simpler, yes. - And the way is to create automatic transfers of money from your paycheck to your savings and to your investments. You know what, you have to automate this sort of stuff. If you leave it up to discretion, you're always gonna have a reason why I can't this week, but if you take a little bit, and if it's $25 going into your savings every paycheck, sure, whatever, I mean, people say, "Oh, my emergency fund should be six months." No, it should be whatever you can put in there, ideally. That is how you get in, just start. If it's crumbs at first, great. Crumbs come together into something in a matter of time. - I recently helped a friend do this, who was feeling like super down about the future, but when I showed them how much just straight up, like 20 bucks a month even would turn into in 10 years, they were like, "Oh, that's better than nothing." Like, why not? - You know, there's this feeling that if I'm not killing it, there's no point in doing it. There's like, shame is just laced in it, out of personal finance and investing. And if you're a small player, you feel, "Why am I small?" I know people who are, you know, got big portfolios that bragging about their big gains and crypto and stocks and all that stuff, it doesn't matter. You know what, there's a lot of smoke being blown about investment results out there and your friends. And if you actually looked at their statements, it might tell a different story, but that's a separate issue. I think $20 a month, great. I mean, I think that's better than $0. - Have you noticed a difference in like, the kinds of questions you get asked in the last five years versus previous? - Totally. Guess how many questions I'm getting about mutual funds? In the past five years, zero. In the old days, tons of questions. I own this fund, I own that fund. You know, is it time to sell? Should I switch to this lower cost company? Dwindled down to nothing. And you know what, mutual funds are now migrating into a status as the investment for people who ask no questions. - This is sort of fascinating how like, mutual funds themselves were this great financial innovation and they've since fallen out of favor to a large extent, but there's still, Canadians still have a ton of money in mutual funds, don't they? - Tons. - I was just saying like, the biggest question I get from my friends is how do I convince my parents to get out of their bad mutual funds? - The problem with that conversation is a bit disturbing to find out people you've trusted and products you've used for decades have not been serving you well. It's like it shakes you. And the easiest thing to do is just to go, well, I like the person at the bank and I trust the bank and all that stuff. So what I would do is if I was trying to convince someone, I would say, what mutual funds do you own? And then I would try and show them what the Canadian and the US stock markets have done, what the bond markets done. And I would say, you don't have to make as much of those, but are you in the zone? And if you are, then you know what? It's all working out for you. But if there's a lot of daylight between where you are and where you could have been with some cheap ETFs, then that really needs to be discussed. - I'm curious. We were talking a bit about perspective before. And I'm curious about if there's anything happening right now in finance that you think people should maybe use some perspective on. - You know, one thing I think people want to keep perspective on is investing in, you know, summer 2025 is so good and it has been good for a while. I know 2022 was a kind of an off year, but we've had a long bull market trend for the most part for years. And I think people need to remember that they're going to get their clocks clean one of these days. And it's no markets not going to come back in a few months like it did in March and April when there was tariffs and everybody was afraid the economy was going to crumble. Then that didn't happen. And boom, stocks are right back up again. There's going to be a downturn. I don't know how big and it's going to last a while. And then then stocks will be on their way to making big gains again. And all the people who bought the dip will be very happy. But people have a sense now that everything is a game and investing. And if I just play the game and I take some risk, I'm going to win. I'm going for home runs. And you know what? I know a lot of people have done well with that, but that's going to come to an end. And if you don't pay some attention to locking in profits and understanding when you've taken on too much risk, you just expose yourself to a worse outcome than you need to. It's just a different mindset now, though, like I'm not someone in their 20s. But people in their 20s are so much more comfortable with doing things like trading on leverage, you know, having margin accounts, putting significant amounts of money in avowedly speculative investments. It's just like a different way of seeing things. And I have seen it and spectacularly badly, but I've also seen it work out really well. I can tell you that I have spoken to like fellow boomers who talk about their early investing careers. And there's a certain segment of the population who had their experience with penny mining stocks back in the day and blew their brains out. So people were always doing risky things with money. It was just not, it wasn't as widely available. And there was no phones back that you could trade on. But I think a lot of that embracing of risk is it's a reflection of the technology. It's a reflection of Gen Z's hunger for financial wins in a world where they feel they're not getting a lot of them. And it's also a reflection of the bull market. - My sense of you is that you are not someone who's like super into high risk investing. And also, you know, probably incumbent upon you as a columnist is a sense of responsibility to not let your readers get into a dangerous situation. But is it possible that you should have been riskier with the way that you invested or advised people to invest? - I tried to leave it open to the individual to figure out how aggressive they should be. And when I talk about aggressive, I don't mean like how much crypto you should have. I mean like what percent or stocks you should have in your portfolio. You have to invest to your comfort level. You know, like some guy can tell you, you should be at 100% stocks. But if that doesn't feel comfortable to you and you do it, if you have a bad outcome, it could just explode your whole financial track. And next thing you know, you're sitting in GICs for 10 years. So comfort's important. Comfort can keep you on the right track, not the perfect track, but the right track. - I'm sure you'll be giving advice to lots of people, but like we think of this as sort of an exit interview from your illustrious career as financial advice columnist. What advice would you like to leave us with in August 2025? - Two things come to my one, I'm really concerned about like the way our brains are being altered in terms of spending. I just think that social media and the internet have lowered our defenses against spending. And we now rationalize spending that just doesn't make sense financially. And I'm not really sure what to do about it because it's getting hardwired into our brains. And I encourage people to flex your no muscles once in a while. I want to leave people with the idea that strategically, every so often you've got to be able to say no to keep your finances on the straight now. Another thing is, I think a lot of people are getting hip to the idea of DIY investing at low cost. And that's great. I have fostered that from day one of my career, but I encourage them to consider getting financial planning advice too. I was flooded in my years with questions from readers. And a lot of times they were pure financial planner questions, questions that you could only answer by taking a holistic full body scan of a person's finances and then saying, "Here's what you're done, and here's where you're going, "and here's where you should be doing." Get that information. If you've got questions and you've got worries, there are people out there who are trained and accredited to answer your questions and helping you feel better by mapping out what you should do. - Can I sneak in one more question? I know you just talked about saying no to things, but what is something fun that you plan on spending money on in retirement? - Oh, I mean, I'll be just Joe retiree and say we're going to travel a lot, but my wife and I are going up to, we're going to a fly-in lodge north of Yellowknife in the fall to see the Northern Lights O'Natural. So there's a little splurge that we're doing. - Oh, that sounds wonderful. - Yeah, it's going to be fun. - I assume O'Natural does not mean naked, but that's up to you guys. - Well, the Northern Lights will be naked. There'll be no city, urban light pollution. - All the better. Rob, thank you so much for joining us. It's a pleasure to talk to you in person after being a fan of your work for so long. - Well, that was a great chat, guys. Thanks for inviting me. - Sarah Rieger, we're calling a quits on this episode. Tell the people what we learned. - We learned that in the future, climate apocalypse, we will at least have some coffee alternatives. We learned that if you thought writing papers was hard, just wait till you graduate. And we learned that if you read Rob's personal finance column, you too can hopefully enjoy a well-earned retirement. - That is it for this week. Thank you for listening. The show is sponsored by WellSimple. It was made by me, Devin Friedman, Matt Keras, Sarah Rieger, with Matils Urfilino, Lea Fetter, Jared Sullivan, and Brennan Doherty. Help from Juanita Leon. Theme music by Andy Huckveil, and engineering by Emma Munger. Special thanks this week to Rob Kerrick. - The TLDR podcast is offered by WellSimple Media Incorporated and is for informational purposes only. The content in the TLDR podcast is not investment advice, a recommendation to buy or sell assets or securities, and does not represent the views of WellSimple Financial Corporation, or any of its other subsidiaries or affiliates. WellSimple Media Incorporated does not endorse any third-party views referencing this content. More information at wellsimple.com/tldr.