IN THIS EPISODE, YOU’LL LEARN:

• Why David has been a saver ever since he blew his entire net worth on a Hot Wheels racetrack at age eight
• Why money decisions that look odd are often rational given someone’s lived experiences
• Why financial independence is not luck but small habits that compound
• What Total Wealth Performance is, and why the return on your broker statement is not your real return
• The ABCs of front-end performance: availability, behavior, and configuration
• Why idle cash is one of the most expensive decisions an investor can make
• How Stig thinks about financial independence
• Why net worth beats portfolio returns as a scorecard during the accumulation phase
• How and why tax is a real expense 
• And much, much more!

Disclosure: This episode and the resources on this page are for informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. For full disclosures, see link.

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:02] Stig Brodersen: In today’s episode, I’m joined by my close friend and business partner, David Fagan. David is a chartered professional accountant in Nova Scotia, Canada, and for more than two decades, he has helped business owners and families build wealth. We start with a question David has been asking himself.

[00:00:19] Stig Brodersen: Why can someone with average returns still build a meaningful net worth? His answer, what he calls total wealth performance. And you can think about it like this. When someone asks how your flight was, you don’t just describe the plane. You also want to make sure that you make it to the airport on time and that your luggage arrived and many other things, of course.

[00:00:40] Stig Brodersen: And investing works the same way. Total wealth performance is whether the money got invested on time and how much of the return actually made it home after taxes, fees, and friction. It’s the money you ultimately have at your disposal that matters.

[00:00:59] Intro: Since 2014, with more than 200 million downloads, we have interviewed the world’s best investors, studied deeply the principles of value investing, and uncovered many compelling investment opportunities. We focus on understanding businesses and intrinsic value, investing accordingly, and sharing everything we learn with you. This show is not investment advice. It’s intended for informational and entertainment purposes only. All opinions expressed by hosts and guests are solely their own, and they may have investments in the securities discussed. Now for your host, Stig Brodersen.

[00:01:43] Stig Brodersen: Welcome to The Investor’s Podcast. I’m your host, Stig Brodersen, and I’m co-hosting this episode with my friend David Fagan. David, this is your sixth episode with us, but it feels like we’re just getting started. So what is on your mind today?

[00:01:58] David Fagan: Thank you for the invite, Stig. We’ve had some beautiful weather here in the Annapolis Valley of Nova Scotia. And when the weather’s super nice, I sit out in my backyard and enjoy the beauty, and I’ve been in a very reflective mood these days, and I’ve been asking myself a lot of questions.

[00:02:16] David Fagan: Questions like, why can someone with average returns still compound and create meaningful net worth? And is net worth even a good barometer for assessing someone’s financial performance? And then, here’s a big one, why do some people save and others don’t? Been thinking about all this stuff this summer, and I’ve spent over two decades as a chartered professional accountant helping business owners and professionals and families build stronger financial futures.

[00:02:46] David Fagan: And the longer I do this work, the more I come back to simple things on how people can grow their net worth. And get this, it’s saving, behavior, time, taxes, and structure. Is their money compounding in a way that supports the life they’re trying to build? And maybe that’s where I want to start today, Stig.

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BOOKS AND RESOURCES

• Join the exclusive ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Intrinsic Value Mastermind Community⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.
• Check out Stig and David’s free educational resource, Compounding Simplicity.
• Watch David Fagan’s free educational videos. 
• Read Charles Schwab’s study, Does Market Timing Work?
• Listen to our interview with David Fagan about Why Simplicity Beats Complexity.
• Listen to our interview with David Fagan about Simple Investing.
• Listen to our interview with David Fagan about investing like a business owner.
• Listen to our interview with David Fagan about Buffett’s favorite business book.
• Connect with David on LinkedIn or through mbf Chartered Professional Accountants.
• Stig’s blog post on his portfolio and track record since 2014.
• Related ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠books⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ mentioned in the podcast.
• Ad-free episodes on our ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Premium Feed⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

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