Episode Notes

Dr. Wing Lim steps in to interview guest Michael Byrne about retirement “fibs and tips”. Michael Byrne is a business coach with decades of experience in the finance industry. Michael talks with Wing about common myths surrounding retirement and how best to start planning for retirement now.

Michael states the simple truth that a desired retirement is possible but that it requires us to be intentional. Some of the myths surrounding retirement that he has encountered include a belief that “some entity will take care of me”, “markets go up and down but really up over time”, “I’m too young to start planning” or the opposite “I’m too old to start planning”. Michael debunks some of the myths with facts from his years of experience. 

In this episode, Dr. Kevin Mailo and guest Michael Byrne address the potential that exists in preparing for retirement and liken the plan required to assembling an orchestra under a skilled conductor. Michael lays out all the various professionals and plans that can assist with retirement portfolios, what to look for, and what options exist for those starting late. He also roughly defines pension plans and explains what some rumored potential changes to pensions might mean. There is a lot of wisdom in this episode to whet an appetite to learn more and start planning a robust retirement portfolio.

About Michael Byrne:

Michael is a business coach with an extensive background in tax-planning and insurance solutions for high net worth clients. He strives to ensure clients are taking the long-view of the finances and are optimally tax efficient.

Resources Discussed in this Episode:

• Canada Pension Plan

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Physician Empowerment: website | facebook | linkedin

Michael Byrne: linkedin

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Transcript

Dr. Kevin Mailo: [00:00:01] Hi, I'm Dr. Kevin Mailo, one of the co-hosts of the Physician Empowerment podcast. At Physician Empowerment we're dedicated to improving the lives of Canadian physicians personally, professionally and financially. If you're loving what you're listening to, let us know. We always want to hear your feedback. Connect with us. If you want to go further, we've got outstanding programming both in-person and online so look us up, but regardless, we hope you really enjoy this episode.

Dr. Kevin Mailo: [00:00:36] Hi, everyone. I'm Dr. Kevin Mailo with Physician Empowerment, and I'm very pleased to introduce Dr. Wing Lim, my co-host of the podcast, along with Mr. Michael Byrne, who Wing is going to be interviewing. And, you know, Mike wears a lot of hats. And, you know, I'm just going to summarize in a very, you know, abbreviated fashion because there's so much there. There's such a depth of experience. But Michael is a friend, a mentor and a business coach with decades of experience in the finance industry. And today he's going to be talking to us about retirement planning, and Wing is going to be interviewing him. This is going to be a great, great episode and I'm really looking forward to it. So with that being said, Wing, why don't you go ahead and take it?

Dr. Wing Lim: [00:01:19] All right, Right on. So welcome to Physician Empowerment webinar slash podcast. And yeah, so I'm really excited to do this episode and interview, Michael. So the topic is going into retirement, fibs and tips, right? So we're going to split it into this fib side and a tip side. But let me formally introduce Michael. I've known Michael for over 20 years and he's worn very many hats, very diverse background from being a tradesman, insurance agent, serial entrepreneur and taking some companies public, founding an IPP company, philanthropist, business coach, leadership coach. And he just assisted a Mutual Fund Trust launch with $100 million dollars management. And he's currently working on a retirement and wellness center in Saskatchewan. And this is all at a tender age of 76. So, Michael, you got a lot of spunk. So then Michael kind of linked up with Physician Empowerment back in 2017 and you have become the head coach at the office and you've joined the faculty of the master class. So welcome to the show, Michael.

Michael Byrne: [00:02:35] Thank you, Wing.

Dr. Wing Lim: [00:02:36] So tell us, how do you manage to have so many hats and how does your journey change like that?

Michael Byrne: [00:02:42] It's called delegation.

Dr. Wing Lim: [00:02:44] Delegation. Tell us about that.

Michael Byrne: [00:02:46] It's called delegation and it's called building, putting a team together. And really what I do is I manage a team of leaders. And that's really how it works. I, I'm surrounded with a lot of people who are smarter than me. And I like to say sometimes that a lot of my best thinking is done by other people or by a collaboration of other people. Let's put it that way. And that's kind of how it works out.

Dr. Wing Lim: [00:03:17] Okay. Right. So you in your vast decades of experience, so you have come across lots of entrepreneurs, business owners, right? One of your hats is you coach and help business development from a $10 million company to $15 million company. I've met you at that phase of your life. And so you come across a lot of professionals, including doctors. And everybody dream about this golden retirement. Just go in a sunset with a stylish retirement. Right? And so, but then not everybody arrived when I arrived there. So what would be some of the fibs, some of the misbelief, fallacies, and lies that they found themselves? What's your experience?

Michael Byrne: [00:04:06] Well, your description of desired retirement is certainly possible. But to achieve it, you know, we really need to have to be intentional. And it doesn't just happen. You know, you asked about some myths or fibs. I guess that's false perceptions. Oh, you know, it's probably an endless list. But, you know, a few that come to my mind is when you retire, you'll spend less. Well, the reality is, if we look at our life today or pre-retirement, you know, we spend most of our money on Saturdays or on the weekends. Well, in retirement, our life is full of Saturdays and weekends, you know. So there's that one.

Dr. Wing Lim: [00:04:52] I was told that it's Saturday 1, Saturday 2, there are 6 Saturdays and a Sunday.

Michael Byrne: [00:04:56] Exactly. You know, another one is well, you know, I'm going to look at this simplistically. If I maximize my RSP, invest it in a mutual fund, it's going to work out okay. And maybe another one is, and I've heard these and seen these, and, you know, some entity will take care of me, you know. And, you know, you might think that that might only be a mentality in the employee environment, but I have seen it in the business and professional retirement as well.

Dr. Wing Lim: [00:05:28] So can we slow it down a little bit? So wait a minute. So this maximize RSP and put them in mutual funds, what's wrong with that? Most people do that, don't they? And what's wrong with that? Why is that a fib?

Michael Byrne: [00:05:45] Well, it's a component, but there's not an awful lot of predictability to it. And really what happens there, Wing, is that people maybe focus on rate of return and really, you know, the goals, the objectives, desires you know, really determines your rate of return. There's no point in getting a great rate of return if it's going to be eroded by taxation, for instance. You know, and if you retire in the wrong part of the market, you know, that could work against you as well. So, you know, you could have a whole discussion on that particular myth. Uh, another one, I suppose, it'll all work out. You know, it really only takes a few moments or a little bit of time to plan for retirement. And, you know, this is not a unique observation, but the reality is that many or maybe the majority of individuals spend more time planning their vacation or buying a car or improving their golf game than they do in their retirement plan. And what's interesting is in every one of those situations, they will go to, you know, some advisor or expert or a family member to get some advice on it. And if they want to improve their golf game, they're going to hire a golf pro, you know, at their club or some public club to help them improve their golf game. Another myth is that markets go up and down, but they really do go up over time. Well, yeah. Yes and no. But it's not something that, it's more complicated than that. Um, another one, I'm too young to start planning. And another one is, you know, I'm too old. You know, there isn't enough time left to, you know, to make it work. And the other one is planning for retirement really involves only investing. You know, or maybe insurance, but really, in some cases only a pension plan. But it's much more than that.

Dr. Wing Lim: [00:07:59] So can we go back to too young and too old? So let's go to too young then go to too old because we come across decisions, we're just starting, or physicians who should have retired a decade ago. So what do you say to people? Are they, should enjoy life to pay off their debts? Like, should they do that versus worrying about retirement four years later?

Michael Byrne: [00:08:23] Well, I don't believe it should be an either-or because, you know, the instruments that are available to save for retirement don't just magically appear like at a later age, like 30, 35, 25 or 40. You know the tax advantages, for instance, of RSPs or TFSAs, they work at a very young age. And so what happens is you maximize your opportunity to grow. So even if you're not maximizing, at least start something, you know. And what I have seen is in instances where, you know, they live, we live our life as in as soon as. As soon as I'm done this part, then I'll start saving. And as soon as, and all of a sudden, there's always another reason. And eventually it doesn't happen. And then you can't make up for lost time. You can't go back sometimes, you know, and recoup it. But more important, like I've seen individuals who are in their mid-30s, Wing, who are much further advanced than individuals that are in their 50s. And in many cases, those individuals, they don't have the same salary or income, but you know, they're on a great start. So.

Dr. Wing Lim: [00:09:53] So you're implying that if you start sooner, you might have less income potential to contribute, but you might be further ahead because of the time thing.

Michael Byrne: [00:10:01] That's right. Yeah,.

Dr. Wing Lim: [00:10:02] That's a good point. So what about the flip side? People like some of the comments says, early on there's a physician coming to us in the 60s and he said, my accountant told me I cannot afford to retire and was in tears. So what do you say to our colleagues like who felt like that, felt too old?

Michael Byrne: [00:10:19] Oh, well, you can't, you know what, we can't escape reality. But so you know, what can we do? There's no real solution. But basically what you do is you take stock of where you are. What are the opportunities? You know, once you identify, you know, where you are, where you want to be - and it may not be ideal - but, you know, you use every option available to you at that particular stage in time to do the best you can. Now, in the business world, I mean, yeah, some businesses just don't work out and sometimes they don't work out at the wrong time. You know, and wow, what do you do? But in the business world, and I suppose it could be the same in the medical world, you get at that age, you have a lot of knowledge. You have a lot of expertise. And perhaps there are ways where, uh, you know, there might be some, you create some auxiliary income and where you might do consulting or you put yourself in a position where other individuals are working and you get a benefit of what they do. Like sometimes you just basically have to depend on other individuals out there earning revenue, be it in a company or some sort of an organization, and you have a relationship where you can share some of the income. Those are examples. I'm working with one individual entity like that right now. So it certainly, I mean, the reality is, no, you don't have as many options.

Dr. Wing Lim: [00:12:14] But maybe what you're saying and what I heard you said in other settings, that people actually have options. They just do not know they had it. We don't know what we don't know.

Michael Byrne: [00:12:25] That's right. You don't know what you don't know. There are always options. But if you're living in a silo, you know, and you just don't know what options are. I'll tell you very quickly, a funny story. There's a farmer who has a chicken farm and his chicken farm is kind of in a wetland. You know, it's prone to flooding from time to time, and usually every spring. And typically, you know, more years than not, he finds out that he has to move his chickens to higher ground. And many times he's losing them, you know. And so this goes on over a period of time. And he's complaining to his wife and his wife, she finally says, look, I'm tired of hearing you complain, I don't want to hear about it anymore. And he says, well, great, maybe you've got some great ideas. Give me a good idea. And she says, Buy ducks. So there's always an option. But you have to, you know, you have to either, you know, not so much think out of the box. And sometimes we need help. We need to collaborate with other people, to connect with other individuals to help us find out what the options are.

Dr. Wing Lim: [00:13:33] Right. So you know what? That is a good segway to pivot over from the fibs, the many, many fibs, to maybe some practical tips. Right? Because each fib that we bought into, of course, we pay handsomely for, there's always a tip to counter that. Right? And so what would you say? And again, we're busy professionals, we have high potential, infinite potential. We usually go through a lot of debts and we also got taxed out of our eyeballs. So what would be some practical strategies that you see would be applicable to incorporated and unincorporated positions? Business professionals' positions?

Michael Byrne: [00:14:19] Well, I'll go back to what I said before that retirement planning, like business planning, it needs to be intentional. And the only way to really be intentional is to really identify clearly a destination. In retirement planning, it may sound strange, but really it starts with the will. Like, how do I really want this all to end out? And then you work backwards from there. It's like planning any kind of a project. You start at the end and work backwards. But, you know, so a big thing would be is to become aware of all the tools and the strategies that are available. So it's kind of like, you know, it's like an orchestra. There's a bunch of musicians out there, but you have to put them together, otherwise it's not going to work. And the way you do it is you have to have a conductor. You know, otherwise you got a bunch of people, a bunch of musicians, playing a different song. The thing is, it can be challenging, but you don't have to be alone. Like if you look at it this way is that in many times in retirement planning and in so many circumstances in life, we don't know what, we don't know that we don't know. You know, we're so busy in our career and our lifestyle and our family, whatever it is we're doing is that we just don't know that we don't know. It's a terrible place to be. And the next one is we don't know what we don't know. And once, if you can come to that realization, now you're set up for a breakthrough because the next step is we know that we don't know and we want to find out what we don't know. And then that's when we start looking out for help to help us identify, you know, it's like becoming educated, you know.

Dr. Wing Lim: [00:16:20] I like that analogy. I think it's a new one for most of us, orchestra. So in my experience, personal and otherwise, if you come across a lot of physicians, it's always one financial advisor or two. It doesn't sound like an orchestra to us. It sounds like a solo, right? And so maybe you say somebody would take care of us, maybe that that's, my financial planner would take care of me. So how do we become a, how do you have an orchestra playing for you for retirement versus soloists?

Michael Byrne: [00:16:58] Okay. Well, there's a lot of practical strategies. And really what it involves is the integration of financial instruments, strategies and professionals. Or advisors, if you would. And integration is a key word, because integration means more than simply cooperation. Integration you need to take, you know, we want to take it to the next level, which is really collaboration as opposed to cooperation. A good example of describing cooperation: cooperation is one plus one equals two. Collaboration is putting one and one side by side, and what do you have? 11. If you can visualize that, that is the kind of a way to illustrate what collaboration is. So when you look at I mentioned, you know, three categories like financial instruments, you know, you got RSPs, you have the individual pension plan, you've got retirement compensation arrangement, you've got the TFSA, there's the flow-through shares, there's mutual funds, there's segregated funds, there's corporate class mutual funds and other types of mutual funds. There's family trusts, there's inter vivos trusts, there's life insurance, there's disability insurance, there's general insurance. And that, and I could add to that list. So those are instruments. When you, what are the strategies? Well, some strategies would include the insured retirement plan, immediate financing arrangement, infinite banking, a pipeline or capital gains stripping, RSP and RIF meltdowns, for instance, lit dollar insurance, split dollar strategies. And maybe those are a few more, but those are many of the common ones, and various types of income splitting and really exploring what's available, you know, for us today.

Michael Byrne: [00:19:03] And then of course, in the professional world, the list is probably a little bit shorter. You know, you've got accountants, lawyers, but even in the law area, you've got tax lawyers, you've got estate will planning lawyers, corporate lawyers, securities lawyers. And each one of those is an area of expertise. And then, of course, you've got, you know, investment specialists, you have portfolio managers. In the private equity world, you know, you have private equity specialists, you have exempt market specialists, and so on. And the thing is, is that many financial plans is going to incorporate maybe not all of these, but certainly a significant number of them. And it's how to work them all together. So what ends up happening is, most of the time, is you have each of these typical professionals or these strategies are implemented in silos. You know, and yeah, you're making possibly a great return on your investment. However, you're exposed to taxation, you know, maybe you're saving a significant amount of money. You're saving a lot of money in your PC, for instance, not realizing that, wow, I'm getting a great rate of return, but I'm potentially exposing myself to a lot of taxation.

Dr. Wing Lim: [00:20:40] So let's slow down a little bit. Yeah, there's a lot of terms. So let me recap what I could understand. Right? So you talk about financial instruments. There are strategies and they're professionals.

Michael Byrne: [00:20:51] That's right.

Dr. Wing Lim: [00:20:52] Right. So there's a plethora of instruments. It's like back to your analogy of orchestra, right? There's like violin, there's woodwind, there's percussion, there's on and on. And the strategies, maybe some sort of a piece. And then professionals would be the musicians, right? And you tend to get them in silos and I can really echo that because as my financial knowledge, literacy increased over the last three decades, I started from here, and each time I go to a little seminar here and there and I met these professionals and I met a cellist, I met a specialist, insurance specialist. I meet this guy, that guy wanted to, they always want to sell me something, right? And as I did that, I learned a bit and kind of, wait a minute, years later, they really don't quite do this. All right. They achieved this, but not that. And then some of them are conflicting. Some would say T5, some would say T5. Well, how do you do either or you do both, right? So after a while you get very confused, right? And most of us don't even have a head space for that, let alone the intimidation. This is too much. We feel really, really intimidated and we shy away and we just throw it off. We, instead of delegating, abdicate. Right? Give all the money to advisors and they do it and so how do we break away from that to have a true symphonic experience.

Michael Byrne: [00:22:22] A symphonic, I like that. I like that. Uh, basically knowing, you know, what to use, when to use it, how to use it, and who's going to do it. And the financial planning industry, and when I talk referring to the professionals and advisors, it's not immune from biases. We all have biases. And I might be biased to this solution and I might be biased to that solution. I might be biased to that product and what the result, unfortunately, what happens is the client gets fit to the product or the solution as opposed to the product and the solution being tailored for the client, you know, and it's like a difference of me buying a suit off the rack as opposed to, well, the extreme would be to go to a tailor and have it just fit exclusively for me. And that's what should happen. But the amount of effort to do that is certainly greater. And in some cases the cost is going to be greater.

Dr. Wing Lim: [00:23:47] So where do we, so let's be pragmatic. So where do we, like we met these silo type professionals and a lot of them are actually charged by the hour versus commission based. So how do we evolve from that into having a conductor doing the whole thing? Like, what's your advice for us?

Michael Byrne: [00:24:12] The advice is to enter the world of where the bias would is collaboration or an integrated formula where the bias is bringing in a group of professionals and looking at financial instruments. Like that's the strategy. And that leads to a more comprehensive plan and a more comprehensive solution. You know, so a bias towards collaboration, Wing, you know, I think that that's the key to the beginning of the solution.

Dr. Wing Lim: [00:25:00] So each one have their biases. It's like each woodwind section, percussion, each have their thing. Right? But a conductor needs to put them together, right? You're saying that actually we need a coach slash conductor to collaborate everybody together, to integrate everybody together?

Michael Byrne: [00:25:17] That's right. Well, that's the job of the conductor to make sure that the violinist doesn't play too loud or the drummer, you know, the percussionist doesn't come in when they shouldn't. Do you know, maybe I'm stretching myself here to find the analogy, but it's basically a team effort. You know, you can compare it to any sports team. You know, you got a great group of athletes, but you really need a coach to bring it all together, right?

Dr. Wing Lim: [00:25:46] Like, I think we come into a very much a DIY world. You know, everything at the fingertip touch with a cell phone and computer. Everybody's kind of DIY. They come in, consume the media, consume a podcast, they want to learn everything themselves, right? So what you're saying is you can't just DIY it and do the sunset and the glorious sunset, right? You need somebody to put everything together, right, intentionally and to put everybody in place. Is that what you're saying?

Michael Byrne: [00:26:17] Well, that's right. You know, and the do-it-yourself world, if you look at it, maybe one component is looking just looking really great. And maybe everything that you're doing or the way that you're measuring yourself is doing just great. You know, you're hitting it out of the park with this investment or that strategy or whatever. But I'm going to go back to the beginning of our discussion, is that if you're living in a world of, like I said, you don't know what you don't know, you're missing out. You don't know what's sitting around the corner that is going to compromise your plan. And that's, and the most simple description I could make is that, you know, you're getting a great return. But what you don't realize that when you want to realize the fruits of that return, you're going to be exposed in a very, very high or unnecessary level of taxation.

Dr. Wing Lim: [00:27:20] Right. That, upon reflection, this is what we're trying to achieve, right? We're trying to help all of us. Like this is a peer-to-peer common platform. We try to educate people and ourselves on what we don't know, right? We're aware of what we don't know, and we kind of get to know what we really don't know. And then we can build a vocabulary and we empower everybody to ask smarter and better questions. Your advisors, right? To understand what their biases might be. And then in the journey to find that maestro to put everything together. Right? But each time that's why financial literacy and financial IQ, so to speak, increase my meeting with my accountant and my advisors. Every year is different, right? It's getting more and more complicated and more and more in control because I'm knowing where I want to go. But not just blindly, take me there, right?

Michael Byrne: [00:28:12] Yeah. A good indicator of what we're describing here is in the world of the very, very wealthy families, and I mean families offices, like the family offices or basically our office, our families that have, you know, $1 billion of assets or at the very least, you know, 300, 400 million, and what they do is they basically have the resources to hire a team of professionals to manage the whole, you know, their whole portfolio, all their wealth, let's put it that way. And they don't have just an insurance agent. They don't just have an investment advisor. They have a full team. And if you don't meet that category, then we have what we call multiple family offices. So you might have a group of where maybe the entry level is maybe $100 million. Okay. And so they kind of collaborate. You might get a half a dozen of those together and then you basically hold the same risk, have the same resources. And the next step, what has happened over the last ten years, you have seen certain accounting firms, it's, I don't know what's going on in the rest of the country, but I know here in Alberta, there are a number of accounting firms who basically have an integrated planning process and they have all the resources like within their firm. They'll have tax lawyers, they'll have insurance specialists, they'll have will and estate people. As a matter of fact, many of them, for their corporate clients, they'll have marketing resources. They'll have IT resources.

Dr. Wing Lim: [00:30:08] So they're trying to do everything for them. Now, so now I'm aware of time. So maybe we'll just spend a couple of minutes. There's rumbling, right? I mean, rumbling, we heard that there's some retirement fund or pension plans that would soon become available to us. Right? So what what's your view about pros and cons of these kind of pension plans?

Michael Byrne: [00:30:33] Okay. Uh, pension plans are very, very complex subject. You probably could spend an hour on it, but here, I'll give you the headline version.

Dr. Wing Lim: [00:30:40] We'll invite you back for that.

Michael Byrne: [00:30:43] Okay. There's two...

Dr. Wing Lim: [00:30:44] There's a broad brush.

Michael Byrne: [00:30:46] Okay. There are really two types of pension plans defined benefit pension plans, and there's defined contribution. And the defined benefit is built around the benefit, the end result. Okay? The defined contribution, as it implies, defines, is built around the contribution. Okay. So just to quickly, for defined contribution is basically what you put in plus rate of return is what you're going to get out. The benefit of it is if it's a pension plan, you have a number of individuals, employees if you would, contributing to it. And so you have the benefits of large assets under management, which of course should lead to greater investment opportunities. A key, so with a defined benefit plan, it's basically based on a formula. 40 years ago, defined benefit plans were pretty much all that there was around there. So if you worked for typically 35 years and there was a factor of 2%, some of them were one and a half, some were two, but the best pension plan in the land had used a factor of 2%. So you would take that percentage, multiply it by the years of service, which is 70. And 70%, so you would receive in retirement guaranteed for the rest of your life 70% of your pre-retirement income.

Dr. Wing Lim: [00:32:17] That sounds really good. What's the problem?

Michael Byrne: [00:32:20] There's no problem with that at all. And certainly they were indexed. And there was absolutely no problem at all with those if you have a big corporation with deep pockets to make sure that you can ensure those benefits, or if you're the government, you know, we hear about the government pensions, our government employees, our MPs and so on.

Dr. Wing Lim: [00:32:45] Our politicians, all that.

Michael Byrne: [00:32:47] Right. So what they have is a certainty of income based on that formula. But the thing is, is that with those pension plans there's an employer who is a separate entity, and the employee which is another entity. So you mentioned the rumblings, and I've kind of done some research and I've seen that some of the things, some that are coming out is where the employer and the employee are the same entity.

Dr. Wing Lim: [00:33:16] Meaning the doctor?

Michael Byrne: [00:33:17] Yeah. You got, you have a PC which is the contributor and you have the doctor which is really under T4 is the employee. So you're, basically you're guaranteeing your own future revenue or income in retirement, which is kind of an impossibility. Now the pros of that is that you have a group, and you have a number of, in this case, physicians that would be contributing. But however, the benefits depend on the health of the plan.

Dr. Wing Lim: [00:33:57] What do you mean by health of the plan?

Michael Byrne: [00:33:58] The health of the plan is the assets under management and the performance of the plan. And so if the health of the plan doesn't have the resources to pay the benefits, let's say that you signed up for or that you should have had because of your contributions and your years of service, the plan may not be able to meet those obligations. So consequently you would have to take less. And that's what's in the description. That's the only variable. The only variable is the income that the pensioners would receive. The contribution limits are fixed because they're based on a formula, and the formula that would determine the benefit is sound except that it's dependent upon the assets and the performance of the plan. So, for instance, the government pension plans, yes, there's a fund. But if at any point in time, like, for instance, we've seen these down markets and so on, we've had lower interest rates. Pensioners in from government, they're not concerned about any of that because if there's a shortfall, our tax dollars make up the shortfall. But with the plan that we're talking about right now, those types of plans, they're kind of like multiple employer pension plans. You don't have the benefit of a major employer or a government to guarantee the benefits. So it's kind of a false sense of security. And the other thing that happens there is you're giving up your flexibility. You see, you can't get out. You know, you're kind of stuck when you're in there.

Dr. Wing Lim: [00:35:58] So what you're saying is if we are sign up with these group basically, right, the employer. So we are the funding source of that plan. So if the plan, if the investment doesn't measure up, then you have to cough up your piece. You have to cough up more money, as the employer. Right? And then if you have an unhealthy year or a sucky year in your profession, then you're really stuck.

Michael Byrne: [00:36:23] I guess it would be safe enough to say that, you know, we'd have to look at all of the details of the plans that are being offered. But the fact that it's marketed as a defined benefit plan, in my mind, and I've talked to some other analysts, is that it's kind of misleading. You know, maybe that's a little bit strong, but it perhaps a false sense of security.

Dr. Wing Lim: [00:36:50] Right. So what about defined contribution plans? Like are they more flexible?

Michael Byrne: [00:36:55] Defined contribution plans are more flexible. You know, when when it comes to, well, again, let's put it this way. Defined contribution plans are basically, again, are dependent upon the health of of the fund. And usually they're based on market performance. Today the majority of defined contribution plans, the assets are in the public market.

Dr. Wing Lim: [00:37:23] Which hasn't been doing so hot lately.

Michael Byrne: [00:37:26] No, no. A big shift took place in the early 80s in the pension world. Prior to 1980, every pension plan in the land was invested in the public market only. And you started to see a shift in the 80s where pension plans started to diverse their portfolios to the point where they were maybe 50% public market, 50% private equity. One of the best-performing pension plans in the world right now is the Canada Pension Plan. And up until around 1997, thereabouts, the Canada Pension Plan was invested 100% stocks and bonds. And right around that time, they made the change. They established the Canadian Pension Plan Investment Board and they shifted to, you know, their target was 50/50, 50 public market, 50 private equity. And the performance has been stellar and the majority of large pension plans and even some smaller ones are the same. So when you look at the investment market today or the investment world today, the majority of defined contribution plans, and sadly to say, the majority investors like RSP plans, RIF plans, even individual pension plans, the IPP, are invested in, the majority is all in the public market. So in other words, they're investing the way pension plans used to invest 40 years ago.

Dr. Wing Lim: [00:39:08] Wow. So it's kind of past saving. Now we should wrap this up because, so I think there's a lot here. And so Michael if you, if you have a dream, you can imagine one, what would you like to see in our retirement? You're the Wizard of Oz.

Michael Byrne: [00:39:29] I've been working on this for five years. If I had a dream, my dream five years ago was I did a lot of work on the Individual Pension Plan, and my dream was to be able to have an asset manager that would be able to manage my Individual Pension Plan clients like a pension plan, like the CPP. That's my dream.

Dr. Wing Lim: [00:39:56] So? So like a CPP style, right? So it's not just the 80/20, 80% equity, 20% bonds, right? Like, it's like, like CPP, right? Like you run it with a thick private equity asset class right inside that and run by professionals.

Michael Byrne: [00:40:14] That's right. And you know what the reality is, there are many of us who do that on our own or try to do that on our own by investing in real estate. In other words, we find ways to invest outside of the public market. You know, I could give a whole session on the private equity market and how it's evolved about 13 years ago. And I was part of a team that was instrumental in moving private equity products into individual pension plans. But we want to take it to a step higher than that, where it's...

Dr. Wing Lim: [00:40:53] So what you're saying is for us, we don't have 30, 40 million. We might not even have 3, 4 million, like a lot of physicians. Right? But people who have far less in the RSP/IPP world, if there's a way to combine that and then they can gather as and now we get like take advantage of like these professionally run pension style portfolio, like a CPP. Right? That would be, what would be doing complete.

Michael Byrne: [00:41:23] I'm not going to, I don't know exactly what the magic number would be, but it would be somewhere in the neighborhood of about 25 to $50 million of assets under management to really take advantage of good opportunities and use diversification. But what you just described, it's not that far away, Wing. If you have 100 Individual Pension Plans with an average asset of, the average today is between 750 and $1 million in the existing IPPs, if you have 100, that's $100 million. You've got a pension plan.

Dr. Wing Lim: [00:41:55] Yeah. Now, so for those of us who still not quite know what IPP, we'll have a different session, so I'm going to wrap up the formal interview. So thank you, Michael. So at Physician Empowerment, again, we're here to empower people to learn more about these vocabularies and concepts, the instruments, the strategies and the professionals.

Dr. Kevin Mailo: [00:42:15] Thank you so much for listening to the Physician Empowerment podcast. If you're ready to take those next steps in transforming your practice, finances or personal well-being, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment dot ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five-star rating and review. If you've got feedback, questions or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.