529: How to Get Yield from Bitcoin Safely Oct 19, 2025

Bitcoin is definitely volatile. If you told me it was going to go down by 50 percent next year, I would hesitantly believe you.

However, there is no way you can convince me that Bitcoin will not hit $500,000 at some point within the next five years.

Think about what’s happening: ETFs are everywhere, treasury companies are holding Bitcoin, there are rumors of central banks buying it, and even an American Bitcoin reserve. It is an asset that will go up. But it may go down before that, and that is unnerving.

You should not put money into Bitcoin unless you commit to not touching it for 5–10 years.

But then you face another problem—Bitcoin is like gold. Unlike apartment buildings, there is no rent, no cashflow. Other coins like Ethereum and Solana have mechanisms called staking that allow for yield. Bitcoin does not. Its beauty is that there are not a lot of moving parts. It’s a vault of security, and that’s pretty much it. Again, just like gold.

There have been companies like BlockFi and Celsius—which are, indeed, traditional finance companies—that lost people’s Bitcoin when they went insolvent.

But now there may be a way to get yield from Bitcoin while keeping it in your custody.

That’s what we talk about on this week’s Wealth Formula Podcast, in addition to covering recent news and making predictions about Bitcoin’s price.

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

When you’re time locking your Bitcoin, it’s fully self custodial, so you’re never giving up those keys at any point, and that’s what’s so critical.

Welcome everybody. This is Buck Joffrey, the Wealth Formula podcast. Coming to you from Montecito, California today. Before we begin, I wanna remind you there is a website associated with this podcast. It is called wealth formula.com. Lots of resources there, including the opportunity to join our accredited investor club.

Uh, take the opportunity if you, um, are, you know, if you do make over $300,000 per year and, um. And, uh, have a net worth over a million dollars outside of your personal residence to join the club. It’s free to join and it basically just allows you to see deal flow. That’s pretty much it. That deal flow is not seen outside of, uh, the network because, uh, it’s private.

Private placements you’ve probably heard of. Right? So anyway, go to wealth formula.com, sign up for investor Club today we’re gonna talk. About Bitcoin. Again, I know a lot of you still probably are seeing on the sidelines with this lately. The, uh, the price of Bitcoin has been extremely volatile. Well, it’s not volatile compared to what it historically has been, but it’s been volatile.

But listen, I will say this, um, if you told me Bitcoin was going down by 50% next year. I would hesitantly believe you. Okay. But there is no way that you can convince me that Bitcoin will not at some point be worth $500,000 per Bitcoin at some point within the next five years. I mean, that could happen in two years, and then you could end up coming back.

To a hundred thousand dollars. But I, I’m, I’m convinced that it ends up there. I mean, think about what’s happening. ETFs everywhere, treasury companies holding Bitcoin, rumors of central banks buying it. An American Bitcoin reserve is on the table. It’s already exists. It’s just are they gonna actively buy it or they just going to confiscate it and hold it.

Um, now that being said, you know. The volatility is a real thing. And so what I, I think is really important is that you should not put money into Bitcoin unless you commit to it for five to 10 years. Just buy it and forget it. Don’t look at the price. Don’t look at the price. I mean, what I will say is, you know, say a couple years down the line, if all of a sudden you’re hearing people talking about how Bitcoin went crazy and it’s, you know, worth a million bucks or something like that, then yeah, it out sell it.

But. You know, volatility is a real thing here. It is not, uh, something you want for money that you need tomorrow. Okay? Now with that Bitcoin, you face one other problem. It’s kind of, see Bitcoin is kinda like gold, right? Unlike apartment buildings and stuff that we do in a credit investor club or investor club, there’s no cash flow, right?

Um, other coins like Ethereum of in Solana do have mechanisms. Are called staking that allow for yield, but Bitcoin does not because in fact, it’s, it’s beauty in, in many ways, in the way it’s designed is there’s not a lot of moving parts. It’s a vault of security and that’s pretty much it. Right. And that’s why it’s like gold.

I know some of you’re thinking, oh yeah. Well there are some ways, uh, the, you know, you can get yield. There are companies, and you’re right. Whereas companies like Block Fi and Celsius. Um, for traditional finance companies, I think BFI is out of business, I think Celsius as well, basically because when Bitcoin went, uh, way down, they basically, uh, you know, the, the companies folded and a lot of people lost Bitcoin in those situations.

In fact, with bfi, um. I, yeah, long story, but I lost, I lost a decent chunk there too when that happened. Now, in those cases with these, you know, centralized, uh, traditional finance companies offering yield on Bitcoin, the big thing here was that they actually had custody of your Bitcoin. If you have custody of your Bitcoin, you can’t lose your Bitcoin.

Right? That’s, uh, that’s a really important part of this whole Bitcoin ecosystem. And as it turns out, there may actually be a, a way to get yield from Bitcoin while keeping it in your own custody, keeping it in your own wallet or whatever, right. Um, that’s what we’re gonna talk about this week on Wealth Formula Podcast.

’cause we have a guy who’s, uh, creating that entire ecosystem. This is an, uh, og uh, rich Rines. He’s a OG Bitcoin guy. And, uh, a lot of interesting stuff we talk about. So we talk about, um, initially the yield thing, which I think is important. A really useful thing, but then we go on to talk a lot about, you know, the other issues around Bitcoin right now.

Again, if you are, uh, not involved with Bitcoin, I think it’s important, you know, whether or not you buy it to be in the know, learn about this stuff. Um, and, um, this is a good way to do that. So when we come back, rich Rines wealth Formula banking is an ingenious concept powered by whole life insurance, but instead of acting just as a safety net, the strategy supercharges your investments.

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Turbocharge your investments. Visit Wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Today my guest on Wealth Formula podcast is Rich RINs. He’s a Bitcoin OG from the class of 2013 and one of the key architects behind the core blockchain. Uh, rich previously led the Money Movement engineering team at Coinbase, uh, helping to FCI facilitate over 1 trillion.

Dollars in value transfers and now serves as founding contributor to Core Dow, uh, which is, uh, building a scalable self custodial yield layer for Bitcoin. He’s also the CEO of Element wallet. Which integrate stable coins, encrypted messaging into core ecosystems. Uh, rich brings deep experience in both traditional finance mechanisms, uh, and mechanics, and, uh, blockchain innovation as well, making him perfect person to talk to about how Bitcoin is evolving into a yield bearing asset class.

Uh, rich, thanks for joining the show. Thanks for having me. Really excited to chat here today. So let’s start, uh, with the big picture when we talk about, um. You know, staking in crypto. My, my audience, uh, I think, you know, some people, I would say probably half are pretty crypto savvy by now ’cause I’ve been talking about it since 2017 as well.

However, um, let’s talk about staking and, you know, what does that actually mean and, and why has it been easy for some coins like Ethereum, Solana, but not really. So for Bick Bitcoin. Happy to, happy to unpack there. There’s quite, quite a bit to unpack there. Um. So I think we take one step back and we kind of think about the origins of, of crypto, right?

You, you had Bitcoin, which first came under the scene in 2008, 2009, and it was based on proof of work, right? And proof of work is solving cryptographic puzzles. When you solve those puzzles, you help secure the network. And we’re all kind of familiar roughly with, with how Bitcoin works, energy, scarce, finite currency and, and you know, that was rhetoric genesis of this whole, of this whole movement.

Somewhere, let’s call it 2017, 2018 ish, you started to see a, a shift from people looking at proof of work and something. It’s scalability limitations primarily because you do get a security benefit of proof of work that you do not get the same way with proof of stake. You get a different mechanism, but which is still secure, but not as secure.

And there was this desire to move to a new, um, a new mechanism. And you saw Vitalik a lot of the folks in the Ethereum community really pushing this even earlier. We saw the first wave of, you know, proof of stake change really come to market in the 2017 cycle. And with that, um, and with that change, you now have a different mechanism for security.

And instead of solving cryptographic puzzles to go produce blocks and secure the network, you have weighted governance, ba or weighted voting based on the amount of tokens that you have. Sometimes that also faction and governance, sometimes it does not. That’s actually how you secure the network and you have a large amount of the underlying crypto.

And what was uh, solved during that time period was the classic nothing at stake problem you usually credited with J and team over at Cosmos, but there’s variety, different people that have their own, you know, kind of solution to that problem. But that was really the advent. So you have to kinda look at the history to then think about where, where things move throughout modern times.

Salon and some other chains. You have started through stake and you got other groups like Ethereum that started proof for work and then migrate proof sake at at some later point. But it’s a critical design as, as part of the consensus layer of these protocols. Neither is necessarily better or worse than the others.

There are just different trade-offs. One of the big advantages though, of proof of stake in this case is that you have. Mechanic in which by holding the token and staking it to help secure the network, you receive some economic benefit in the term of staking rewards, which makes these assets productive in a different way.

And if we think about, you know, Ethereum, defi, and its trajectory over the last, you know, five plus years. Dia proof of stake and, you know, yield bearing tokens, uh, et cetera, really is what brought, you know, the, the full blown defi summer wave. So I can go as in detail as you want to, or, or keep it high level.

Well, I, I wanna kind of, um. Drill down a little bit on, on the mechanics of, of staking, because to describe for people, I, you know, I, again, a number of the folks listening have done it, but probably more than half have not. So, and if you could explain sort of what you’re doing in theory there that actually creates yield and how that yield and where that yield is coming from.

Ew, it’s gonna vary based on system, right? But talking about like, just generic in terms of, of proof of stake. You are getting paid by the network to help secure the network. Because if we think about how these networks have their voting power in terms of the right to go create blocks, it is looked at it typically as the weighted average of the, you know, amount of validators in the ecosystem that are part of that, you know, block producing set.

There’s different, you know, um, different paths, whether it’s delegated group stake, approved stake. But in general, those that stake or delegate are helping to secure the network and they receive emissions from the network to go do so. Some blockchains are finite supply, some are infinites. Those, you know, emissions might tail off forever into the future, but you’re getting paid for work that you’re doing to help secure the network.

Where does the payment come from, ultimately? Meaning like are those tokens or coins, are those created by the network to pay or are they coming from some transaction fees? I’m asking in part because I’m wondering if there’s an inflationary element to this also depends on the On the system. Yeah. But if you think about Bitcoin, right?

Right. Bitcoin has block rewards and emissions and they also have transaction fees. Right? Both of which come back to the, the miners. In this case, in most proof of stake systems, you have emissions and transaction fees, both of which that come back to the stakers in this case. They may or may not be involved in block production ’cause those roles are typically separated in these systems versus them being combined in the uh, in the Bitcoin nomenclature.

Many of the proof of stake systems are inflationary, but it is not a system tenet that you must have. The theory there is very similar to Bitcoin in that. As time goes on, you need the transaction fees to overwhelm the emissions for these systems to, to be sustainable at, at, you know, over the long run. If you’ll, let’s, let’s talk a little bit about sort of the, I guess, the limitation with Bitcoin.

Um, if, if you would, again, just trying to maybe create a little bit of an example for people. Obviously we are not proof of stake, we’re proof of work. Maybe kind of just explain, um, you know, if you can sort of just give an analogy on exactly what that is and then the limitation there. What, why there’s a limitation of, of creating yield.

So I think Bitcoin’s simplicity is a feature, uh, not a bug. Um, to be very clear, um, what we’ve, what we’ve, you know, collectively built in, in Bitcoin over the last, you know, 15 years is. A institutional grade settlement layer for digital gold. And I think that in of itself is very different than what originally Satoshi wanted to create with its peer-to-peer money system.

But it actually stumbled upon a very large use case that actually meets a very critical need for this trustless settlement of, you know, quite large scale today. And I think the importance of Bitcoin will only continue to grow over the, the decades to come. And with that, uh, you know, becoming digital gold, there were a bunch of trade-offs that were made when Bitcoin was designed.

So it’s deliberately slow. It’s not programmable. It has very limited expressivity, but that’s one of the reasons Bitcoin has been able to remain so secure for so long, right? It has a very limited attack surface area. And all of those are very great reasons of why, you know, Bitcoin is this, you know, perfect digital gold on top of its finite scarcity, very easy under on it, easy to understand monetary policy, et cetera.

But it does limit the ways that you can go put your Bitcoin to work. And, you know, the, the phrase that I’ve used, you know, in many times is Bitcoin’s been kinda a pet rock for the last 15 years, but an amazing investment. And, you know, something that I’ve been very proud to, to be a part of for, for a very long time.

And the genesis of core was really around, okay, we have this, you know, perfect digital gold. If I want to go do something with my Bitcoin, how do I go do it in a trust minimized way. Allow this Bitcoin to go get used in this decentralized world of applications, whether they be simple yield or whether they be much more robust.

Uh, you know, Turing complete applications. That was really the, the idea of, okay, let’s go, you know, build this layer. And there were really kind of two components that that core created. One is its Bitcoin app Store, so it allows you to build decentralized applications on top of Bitcoin, full expressivity of what you could do and, and you know, any.

You know, full smart contract platform. And the other side, it’s a Bitcoin yield layer. So if you wanna passively earn on your Bitcoin, or you wanna build more complicated yield products on top of Bitcoin, you can now do that, uh, with the core ecosystem. And that was a massive unlock because for all of the, you know, rapid growth that we’ve seen in Ethereum ecosystem over the last five years in particular, we helped or, or we’re helping to actively usher in that wave.

On Bitcoin by making it this yield producing asset for the first time and then allowing for, you know, these different range of, of applications and use cases. It’s no longer in either or. It’s a both dex core. Describe what core is exactly. I know you, you just mentioned it with the, you know, this ability to build, uh, build apps.

But let, let’s, let’s back up sort of like, it’s a, is this sort of a second layer, like an L two layer on top of Bitcoin debt? I mean, where, where does the yield come from in this situation for people who are using it? Yeah. So let me unpack what what core is in more detail. Um, so, so Core is an L one. It’s more technically known as a Bitcoin side chain.

We would argue that there are, are no Bitcoin L twos today. I think maybe as time goes on, maybe we will get to more true trustless L twos, but as of now, nothing fits that definition. It’s the best that you can do is have an L one that’s secured by Bitcoin core has over 90% of the Bitcoin hash securing it.

So we’re easily kind of number one in, in terms of most of those metrics. And we do welcome new technological advancements that will allow, you know, potential lts or even to get to full, you know, Bitcoin security as, as time goes on. And the kind of two real kind of key components to the core ecosystem to go to that next level of detail.

One is, it’s a full L one blockchain that is EVM compatible, which means any application that you can build in Ethereum, you can build on top of core while being secured by Bitcoin, right? It gives you that. Additional layer that that is, you know, also important in this case. And the other kinda critical distinction there is our ecosystem is, is Bitcoin based, right?

So poor is the gas token, but the decentralized protocols borrow lending per trading, you name it. Those are all Bitcoin denominator, right? So the idea here is we to put their Bitcoin to work, not just being a substitute for Ethereum defi. And we do see some different easy behaviors in terms of Bitcoin holders versus Ethereum holders.

On the other side, it’s that Bitcoin yield layer. So as we talked a little bit about proof of work, improved stake. In proof of work only the miners are the ones that receive those transaction fees in the block rewards. So what Core does is it allows you not only to stake your core tokens, but you can also delegate hash, and that’s where that 90 plus percent of the Bitcoin hash comes in.

But you can also stake your Bitcoin so you can time lock your Bitcoin and earn yield and transaction fees from the core blockchain for doing. How those two kind of come into place is now as a Bitcoin holder, you can also earn by holding your Bitcoin, helping you secure the core chain versus just being a core holder who’s helping you secure the chain, right?

So you have these multiple ingredients in the soup of how core is secure, and we reward these different, our consensus participants for the divide. They bring in the network in order to participate. Is there, is this like a, uh, like a decentralized app, or is this a, you know, internet site? Like where, where do you access core from?

So core is the blockchain, right? So you communicate over classic RPCs, but all of that is, you know, connected on the, on the intranet fundamentally. But the way to think about accessing it is you can access it through your favorite hardware wallet. You can access it through browser wallets, through a variety of different applications.

And critically, you can also access it through Bitcoin wallets, right? So how our mechanism works is if you wanna just stay on the yield side and you just want to, you know, earn yield in your Bitcoin, you can time lock it. So the idea is that you probably encumber those funds for some period of time, and then in doing so, you’re helping to secure our blockchain and you receive the block awards for doing so.

And that’s one, uh, participant. We see a lot of institutions do that. High net worth individuals, general bitcoin holders, you name it. But the demand for Bitcoin yield is the most popular, you know, asked in, in all of crypto more than anything else. If you wanna take the next step and you want to, you know, bridge, swap, wrap, et cetera, and come over into our ecosystem, you can do that in your, your favorite EVM wallet, right?

So you have the ability to fully engage in cores, defi, ecosystem using, you know, kind the law of your choice. One that you’ve been, you know, probably familiar with for, for several years. We view these different participants on a continuum. So there’s some Bitcoiners that we can just offer education to today.

They’re not ready to do anything with their Bitcoin yet, and that’s totally fine. There’s a large group of folks that wants to go earn passive yield in their Bitcoin, and that’s where staking comes in. If they want to earn higher yields, but they’re not ready to fully wrap, swap over, et cetera, they can dual stake, so you can earn higher yields by staking both core and.

Then finally, if you wanna come over to the full Bitcoin defi ecosystem, you can do so. There’s 150 plus applications with which you can go participate. So it’s really about bringing people from one end of that spectrum over to the other end as time goes on. Got it. So, you know, again, have a num number of people who definitely own Bitcoin.

’cause we’ve been talking about it since 2017. In some cases, very large sums of, uh, Bitcoin and. So I know a lot of people keep this stuff in cold wallets. Maybe it’s a ledger wallet or something like that. Is there going to be something built into the ledger wallets that will let you sort of just link with core at that point?

So we have full ledger support for core staking, uh, a bulk Bitcoin and core, and it’s frequently done in clear signing as well. This was done with the partnership between the two groups. So Bitcoin is not, again, the mo not the most programmer friendly. So what this does, it demystifies it, it lets you know exactly the different parameters that you’re putting in there.

So with that ledger grade security and, you know, legibility that you would want from your har your hardware wallet of choice. That was a big announcement. I think we put that out there August of this year. So it’s fairly new, but it was a, a big one to, to get out there. Something like 20 to 30% of the world’s Bitcoin is all held on ledger wallets.

So now all of that is, you know, very easy, uh, easy and accessible for, you know, any Bitcoin holder out there to go keep their Bitcoin in cold storage and go or knee on it. And this is probably a good, you know, zoom in on the yield mechanism itself. So when you’re time locking your Bitcoin, you are, it’s fully self custodial, so you’re never giving up those keys at any point.

And that’s what’s so critical. If we think about how people have earned yield on Bitcoin, historically it’s come up through counterparty risk, right? Whether it’s block Fi, Genesis, Celsius, you name it. It would send your Bitcoin somewhere, wrap your Bitcoin somewhere, whatever. And then you may get your Bitcoin plus yield back in the future.

And historically that’s been a bad endeavor. Not always, but historically it has. So it’s critical years. You retain that, uh, that Bitcoin the entire time that UTXL lives in your wallet. So there’s no situation there unless you lose your private key, right? Which is something that no one can protect you from, where you then, you know, lose access to that Bitcoin.

So it’s the highest grade trust assumption that you can have, meaning that you have to trust actually no one, right? So there is no better trust assumption in doing so, and what that does is by maintaining that, again, you can see it in your wallet. All that is very clear and and easy to understand. The yield is coming from securing core’s ecosystem.

There’s no lending, borrowing or anything else going on under the hood because again, we don’t have access to the underlying Bitcoin to do something like that. Even if we wanted to, which we don’t. What kind of yields are, are you get people getting on, uh, on core? I am sure. It depends on whether your, you know, your level of participation, the amount of Bitcoin you have, whether you have core tokens, that kind of thing.

But give us an idea. So you can participate, um, to your point at any point along that, that spectrum. So if you just think, uh, if you just think Bitcoin, you earn a lower rate, it’s like 10 to 20 ish bips. And the idea there is it really pays for your assets under custody fees at, at a major custodian. And the idea behind that is like the minimum attractive yield, if you will.

But what we try to get people to do is to do what’s referred to as dual staking, which is staking both core and Bitcoin in increasing amounts. And the idea there is that we want you to participate in multiple facets of our ecosystem, right? We don’t want you to just participate on one side because critically what we’re trying to do is make core the second asset that Bitcoiners care about, right?

We want this to be the gas token. Of putting your Bitcoin to work. So we want you to participate on both of these sides. And now if we think about the roughly 650 million of Bitcoin that staked on core, more than 40, 50% of that now is actually people participating on both sides. So we still have a lot of work left to be done there, but it’s awesome to see this convergence and that’s a convergence that no other Bitcoin project has been able to find so far.

Where that ultimately is, is the name of the game, right? It’s so hard to convince Bitcoiners to go use a new product or service that’s not Bitcoin. So you have to crawl, walk, run. You have to have incentivization to go make that happen. And then finally the, the math and the underlying mechanism, you know, ultimately needs to make sense.

Can’t be points or yield farming or anything like that. It has to be something that’s sustainable and durable. If you do participate in some of those other things, what’s the potential, you know, oh, sorry. What is the potential yield? I, I’m asking mostly just ’cause I just know that there’s a lot of people in this audience sitting on Bitcoin and saying, well, maybe I can get some yield, but maybe not for 20 bits.

But yeah, no, sorry, I realized that totally for, uh, forgot the million dollar question. Yeah. Um, so if you stake the, uh, max amount of core and Bitcoin, you can earn about 5% in new Bitcoin. So it’s actually very hot. Um, and that’s, it’s on this gradual scale, right? So we want you to do is start with either, you know, small amount of core, no amount of core, work your way up into that top bucket.

And then as you get there, you’re delivering the max value in terms of security and benefit to the core ecosystem. And this system rewards you with a very attractive API, you know, how much is core right now and how much, uh, you know, and just in terms of somebody being able to get 5%, like how much core would they need to buy?

So I can’t really talk about price for, for a number of, oh, uh, a number of reasons. Okay. Yeah. I get, I get it. Sure, sure. Yeah. All, all the calculations are, are easily, um, easily available on, on our docs. But the way to think about it is we have these buckets, so there’s different amounts of core that is required for, for each Bitcoin.

And I think how, how I tend to think about these in a acceptable way to discuss on this podcast is really in terms of like LTVs, where. Lowest LTV is like roughly like 3% of the Bitcoin position. The highest LTV is roughly like 10% of the Bitcoin position. So they’re very attainable amounts of, of core in order to go, uh, acquire to go earn that, that yield.

Yeah. Got it. Got it. Um, you know, let, let’s kind of backtrack a little bit. Like in terms of, you know, there are lending, um, you’ve talked about some of the historical ways people have. Have gotten yield or, you know, abused lending, uh, for such a, an asset that is so secure. Um, maybe volatile, but certainly secure.

It, it seems like interest rates are often so high in terms of borrowing. Um, and then, you know, on the other end. Yield is generally so low. Why is that? Why is that? I mean, it is just, I’m just curious. I mean, in terms of being able to, usually when I’m thinking of the example of block fi, which unfortunately I used at some point years ago, fortunately.

And, um, yeah. And, um, and there, you know, you, the yield wasn’t great, but if you borrowed it was actually really high rate. And I’m thinking in the meantime, when things, when things went to hell, they just liquidated. Massively just liquidated people outta their positions very quickly. So the risk to them was pretty low.

So, so what is the, what is the idea behind that? You know, high interest rates, that kind of thing, just because they can, just because there’s not enough competition, is that basically it? So it’s a multifaceted market, and this is, you know, one, one of the things that we’re ultimately trying to solve here with core’s, um, staking rate.

Is you should have to go beat the staking rate on any lending and borrowing agreement. ’cause that should be your benchmark. And you should have to probably do some sort of a multiple on that because this is, you’re able to go do this with no counterparty risk, right? So if you’re actually taking on counterparty risk, okay, what is that worth?

Right? It’s probably not worth 5%, maybe it’s 10%, maybe it’s 15% right? But this should actually create a material benchmark that that people can use, and we think that’s a net good for the overall financialization of bitcoin. In terms of your question of like, how does this, you know, kind of market come into, come into place?

There’s all sorts of Bitcoin lending and you know, all or not created equal. Some have, you know, very credible counterparties and are fully collateralized. Others are totally uncollateralized and there’s a whole spectrum there. In general, people don’t like to lend out their Bitcoin and if they are lending out their Bitcoin, it needs to be at an attractive rate for them with which they can underwrite.

You know, potentially not having that Bitcoin come back and that, you know, back in 2021, et cetera. Before we had a lot of these blowouts. The market clearing rate for that was a lot different than it’s. I think that is really, you know, an important metric. The other thing that we see a lot of people do is lateralize their Bitcoin to go do stables or other sorts of like low grade farming, et cetera.

So you just have a lot of competitive pieces there that, that are hard to fully quantify, but you just have these market forces that are, you know, fairly inefficient and you know, very few real players in these markets. It says. Yeah. Yeah. Um, let’s talk about, um, you know, we, we’ve talked about core so far.

I mean, what are the real risks? Um, I’ve, I’ve had, I’ve had friends who were, you know, defi, I think maybe like wrapping Bitcoin. And I got no one, one guy lost like $4 million of Bitcoin. And uh, you know, obviously we don’t have those issues because you just mentioned there’s, uh, not an issue of.

Counterparty risk here. Can you talk about what the potential risks are? Is there a risk to the network risk? I mean, can you say that it’s pretty much zero risk, so I, I never say anything is zero risk because Right, right. You know that, that, that’s just not something I like to do. The risk in this case is that core explodes or something else, which extremely unlikely, and you just don’t receive your rewards.

Right. That’s the max loss that you could have in this case, is that. There was like essentially, uh, some core that you could have claimed and you didn’t claim. And then, you know, there was some, you know, categorical issue or catastrophic issue, but that’s a, the highest grade assumption that you can have, right?

You can’t, there’s no case in the system where you do not wind up with the full Bitcoin position, which is ultimately what everyone is trying to protect in this case. And that’s very different than wrapping, swapping, bridging, et cetera, where now you have counterparty risk. Counterparty risk you need to be compensated for, whether it’s smart, contract risk, bridge risk, you name it.

But those are material. And it’s not to say those are bad options, it’s just whatever you are doing, you need to be fairly compensated with which for doing so. And now that you have this way to go do this, um, safely with core. You just need to, you know, kind of price out those other risks appropriately.

And I think there are great markets out there, particularly in core’s ecosystem, where you can go wrap your Bitcoin and go deploy it, but you just have to kind of know what you’re getting into. And how we tend to kind of address all yield questions in general is like if you don’t understand the yield, you are yield.

You have to fully underwrite any protocol that you wanna get involved with, whether it’s core or otherwise. And only when you get comfortable with it should you deploy. But. The best starting area of all Bitcoin yield is deploying core or, uh, deploying your Bitcoin on a, you know, ledger wallet, uh, in core’s Bitcoin staking because you just can’t get anything more secure than that.

It’s a great kind of crawl, walk, run into more advanced tactics of strategies. I mean, I’m curious on like detraction you’ve gotten, um, again, there are companies out there, institutional institutions that are out there that have a bunch of Bitcoin earning no yield. Michael Sailor goes out there, all of a sudden gets 5% on his own Bitcoin, uh, through strategy, uh, that that could seriously change, uh, his own business model.

Uh, do you see those kinds of, are, are you seeing any traction with those big players for Core yet or too early? So, one, there was an education problem in this market generally, and we spent, you know, the last several years helping to educate folks. The new digital asset treasuries or DA meta has actually been very useful to us because what many people have solved in these debts so far is how do I go get assets into the vehicle?

Uh, how do I grow the assets? And not everyone is Michael Sailor and even Sailor has had issues with financial engineering recently. I think it’s very solvable, but in general, you can only financial engineer so far, and then you need to look at additional sources of yield and the benefits that that can bring you.

That’s what we’re seeing is a lot of experimentation, mostly privately, but seen publicly from some of these larger Bitcoin treasuries because everyone wants yield in their Bitcoin. So then it comes down to what’s the best source of yield that I can do and that winds up being core. And if you look at many of these vehicles, they’ve got just very specific covenants, um, that go into the assets that they have and what they can do with those assets.

Almost all are restricted from lending and doing that sort of stuff. So when you, you need yield, that is counterparty list. And that’s where, you know, we, we really shine. And I think that’ll be a very large narrative that you’ll hear way more about over the coming quarters, where that’s really the next competitive battleground for these large Bitcoin corporates.

Bitcoin treasuries, where now you need to go earn that passive yield on your Bitcoin. And I think net net is just the next wave of financialization, right? Like if, you know, as a, as a Bitcoin for a long time, I resisted this. I think we’re at the stage where Bitcoin is a nationally important asset and globally important asset, and now we need to go find ways to go earn more of it and to grow larger and larger Bitcoin balance sheets.

What’s your take on what’s going on in the markets right now? I’m just curious. Just wanna shift a little bit. Obviously you’ve been in this space for an awfully long time and I actually, I was kind of, I should have asked you a little bit about that. 2013, like, you know. How in the world, what, what were you looking at in 2013 that made you think about, you know, getting into Bitcoin, you know, but, um, well, let’s just start with that.

I mean, I should have asked you at the beginning, but I mean, you’ve been in it for a long time. What did you see in this and did it, did it, is this what you thought it would be? You know, so I originally heard about Bitcoin. I wanna say it’s 2010 or 2011. Um, we actually had a college professor that was teaching us all about computer security, introduced us to the Byzantine General’s problem.

I was like, wow, this is a fascinating problem. He is like, oh, this guy’s sakamoto, you know, or group people invented this solution and, you know, it powers this technological Bitcoin. And I didn’t understand at the time, wasn’t interested and like, didn’t, didn’t really fully understand it ’cause I didn’t take the time to really consider the economics behind it and the, the change that this could bring into the world.

By 2013, I reconnected with Bitcoin and that was when the moment clicked. Where I was like, oh, it’s not just the solution to a tech problem, it’s actually an alternatives traditional financial system. It’s a non sovereign store of value. And the implications of that became clear to me of, okay, if this thing succeeds, it will totally re you know, reimagine the, the world around us.

And hopefully we’ll be able to get to a spot where we can change the banking system and hopefully, you know, solve the fiat monetary crisis. Like there’s just so many of these. Globally important shifts and I was, you know, hooked like, and I also had studied in college, both economics and uh, databasing, which is essentially what Bitcoin is.

So it was like a perfect kind of match of a young and, and really interested person in the underlying product. And then kinda having the right, the right skills. By 2017 I was like, this is what I want to do for the rest of my career. And you know, kind of the rest is history. But yeah, it was kind of a perfect aligning of interests.

And you think about like 2013, and I actually, I was listening to an interview, somebody who was interviewing Dan Moorehead, uh, the Pantera Capital, and he was, you know, Bitcoin class of 2013 as well. And obviously, you know, he was, he was already, he already had a lot of money, but he, he was, uh, I guess he was convinced on, um, you know, he got really into Bitcoin and, and tried to try to try to buy $2 million of Bitcoin.

And the problem was he couldn’t figure out how, because there was nowhere to. Like everywhere he looked, it was like a $75 limit or a $300 limit. And that was like his biggest problem. Like you don’t have that issue anymore. And then there’s the issue of, you know, having all of the technical skills that you needed back in 2013.

You know, everything’s pretty easy right now, even for, you know, a guy like me, um, I mean, yeah, hardware, wallets and all that. They sound intimidating to people sometimes when they haven’t used them. These are just not very difficult things. Right. Um, I’m just curious in terms of like your vision, did you, did you kind of see this world?

I mean, I’m just sort of, I mean, I’m just, just curious in terms of what you thought was gonna happen versus what has happened so far. Definitely got it wrong, um, at the time, uh, yeah, back in, you know, the, the early days, um, we were all focused on Bitcoin’s money. And I, I, I think there was a lot of hope at that point, and I get a lot of very expensive coffees from that time period where we, we, we thought that it was gonna be used for day-to-day commerce and like that’s how we were all gonna pay each other and, and I think there was a lot of interest and excitement around that at that time.

And I think that was the original vision, just to be totally clear. And I think. We’ve mostly failed at that, but we again, have created this digital goal that has now come into reality as this perfect digital settlement layer and is only gonna grow in importance. And I think, yes, we never got fully the medium of exchange from store value, but that’s nothing to be shy about.

It’s worth, you know, two plus trillion today is easily gonna overtake the mark cap of gold in the next 10 years, and likely will be the most valuable asset in the world for, you know, probably forever at this point. And it was just a very different like view, you think There’s a lot of the companies that were spinning up around that time.

It was Bitcoin, remittances, Bitcoin, like there was a lot of technology that was based around that. And then in reality exchanges and uh, custodians kinda wound up being the, the two killer use cases in terms of the product companies and then you got wallets, et cetera. But, but that was really kind of the difference in what we thought was gonna happen versus what really happened.

Yeah. And, and you know, it’s, it’s funny ’cause um, there’s still some high profile. Bitcoin guys who still talk about, you know, Jack Dorsey for example, right? Jack Dorsey, founder of Twitter, which is now X, but he’s still in the camp, that if you’re not using Bitcoin as payments, then it’s a failure. And what’s your argument against that?

So, and I gave a, a, a longer, more in depth, um, discussion of, of my thoughts on like kind of the zealotry and the usefulness of that. Bitcoin’s early days versus where we are today on, on Breed Loves podcast about a month ago. Um, but good to tune in, kind of check out my, my longer thoughts on that. But in general, I, I just don’t believe in that.

I think this idea of Zealotry is now outlived a lot of its usefulness. I think it was very important in Bitcoin’s early days of you need to will something into existence for it to become true. And when it was just, you know. Few thousands of people, or tens of thousands of people around the globe that cared about Bitcoin versus now where it’s, you know, um, hundreds of billions of dollars in ETFs around the world and corporates and everything else.

It’s just totally different version of, you know, what each individual can do to, to shape Bitcoin, which is both pro and a con, if you will, for a variety of reasons. But I think the idea that it’s only useful as payments is just an outdated relic of a previous understanding. I think that’s what, if you think about who remains relevant in Bitcoin, as time goes on, it’s usually because they adapt their views over time.

They don’t get lost in, you know, something overly specific. And I think what we stumbled upon as an industry was stable coins. And that was really like 2014, 2015, remember correctly the first deployment on Omni. Um, but in general, like we realized that the killer use case for blockchains for payments is just a better dollar.

And yeah, it’s not what we want ’em as Bitcoiners, but. It actually achieves a lot of what we wanted. Right. It’s not totally centralized, not like, but okay, that’s fine. You don’t use gold for payments either. So the idea is you now have this ability to have these things work symbiotically with one another, and that value prop to, you know, billions people around the world to be able to have frictionless, fast, cheap payments that are hopefully uncensorable.

Not always, but there are other options for it to be uncensorable, if you will. Those are still huge wins that I think are very true to the ethos of what everyone was trying to deep back then. But I think it’s all about expanding your aperture and also kind of coming to terms with, with reality, if we were all stuck in our 2015 vision of the world, we would never have grown.

Right. As an industry. And it just really important to keep updating your priors. Yeah. Yeah. It’s interesting. I mean, it feels like now. Even, even Wall Street has accepted this as digital gold, right? And it, it is pretty remarkable. I, I, I’m, I’m, I would say I’m class of 2017 here. Even from then, it’s just what a difference, uh, when, when you look at it.

Um, one, a quick question about, um, your thoughts on these, uh, Bitcoin treasury companies. Um, specifically, you know, let’s look at, uh, MicroStrategy strategy, Michael Seller’s company. Um. You’re buying a lot of Bitcoin. Do you see fundamentally any, any problem or some concerns to the B Bitcoin ecosystem when you have one company potentially owning 5% of the Bitcoin supply at some point?

I don’t personally, there’s a, there’s a lot of conservation around this with the ETFs as well, and just like this, you know, corporatization of, of Bitcoin generally, or even just the centralization of bitcoin. And overall I think it’s good to have, you know, essentially price and sensitive buyers of these assets to help continue to bring Bitcoin forward.

And I think sailors proved time and time again, he is willing to continue to back up the truck and, you know, buy large and larger amounts of Bitcoin and I think is one of the major responsible parties alongside of these ETFs of a lot of the pricing that we’ve seen since early 2024. Bitcoin. And I think the positive pieces of that are, these are also one-way black holes of Bitcoin, right?

Like ETF’s a little different. You have the in out flow, but at least in terms of these corporates, these are a black hole, right? Like sailor’s not selling these Bitcoin anytime soon. And that’s a win, right? It’s a permanent capital vehicle for Bitcoin and these actually spurred this entire craze of all these other folks also going to leverage and acquire more Bitcoin, which I think is net net positive.

Some of these people will mess it up. I’m not really as worried about the debt spiral or the death spiral of a lot of these vehicles. I think if they wind up trading below nav for a large period of time, sale will just buy them. He’s essentially, you know, using dollars that are valued more than a dollar to go buy things valued less than a dollar.

That’s a great trade and I think you’ll see people do that. Um, at size. My only fear of this whole kind of corporatization of Bitcoin thing is related to the miners. I think the miners are very cost sensitive in terms of their means of production. I think over time there is a world which I hope we do not see, which is the only miners that can run their business profitably are governments.

These corporates who essentially do it at a loss or governments right, where you’re willing to do non-economic things to help subsidize the network. That kills a little bit of the centralization of of Bitcoin story, but I think it’s a solvable problem. Should we get there? That’s my, my only concern with it.

But I think on the net positive, you know, net, net trade off scale if you will, these are overwhelmingly positive for Bitcoin. What do you think of this idea of, you know, the, of the cycles and, you know, we had to having, we have, you know, had a little bit of a runup. If you look historically, you know, the high part of the cycle is, is coming now pretty much.

Right. Um. Are those types of cycles and 80% retreats a thing of the past. When you have that, that level of buying pressure from a guy like sailor, institutions, governments, what’s your, what’s your feeling on this? So I think the general shape of the cycles is very different than what it was previous. Like just your buyers and the structural demand is, is so different than what it was in say, 2013, 2017.

And my views on this have been, you know, pretty in influenced pretty heavily by Michael Turpen. And, um, he and I have spent a bunch of time together chat about these sorts of things. He’s also the author of the Bitcoin Supercycle book. So we’ve, we’ve gone into detail on this, you know, many a time. I think the idea of like 80% drawdowns in Bitcoin at this point are pretty much over.

Um, I think you’ll have severe drawdowns, but I think the idea of like 80% or something like that is, is very much in the past. And then you also have just these, not buyers, I mean buyers last resort to some degree in terms of these, these treasuries. But I also think you have essentially nation state puts on some of these treasuries, right?

So like there’s just so much demand for Bitcoin that I just can’t see that same massive drawdown happening. Do we hit the same peaks or is the volatility dampened? That’s a great question. I think in this cycle in particular, it’s probably a more elongated cycle. Like I, I don’t know that we’ll see, you know, the crazy, you know, blow off top in October that, you know, so many are expecting.

But I think we do have several macro pieces working in our favor here. Global liquidity’s increasing. You’ve got rate cuts, you’ve got. Just a bunch of structural shifts in, you know, kind of overall macro forces that I think will be very positive towards the end of Q4 and then through Q1 of next year. So I think we’ve, there’s some amount of cycl, uh, cyclic behavior that I think is unavoidable in any asset, but I think this one is, is probably right, shifted, if you will, there.

Um, Bitcoin obviously year over year is doing well. Um, but it’s, it has been remarkably stable. In the last, you know, few months here, it’s almost uncharacteristic like, you know, there’s such little volatility. It’s almost like it’s less volatile than the stock market. And, um, you know, some people, I, I’ve been in the Twitter or X space talk about this being the influence of quote unquote paper Bitcoin, right?

Sort of this trading of derivatives and that kind of thing. What do you think is going on there? I mean, listen, it is kind of silly to look at like the amount of how much bitcoin’s gone up in a year and say that it’s not doing anything right. But on the other hand, you just look at how much is being bought.

Just from players that we know versus how much is created in a week versus how, you know, and, and you just wonder why is this price not just continuously going up? Any thoughts on that? This paper, Bitcoin conspiracy, that kind of thing? So I’m firmly and like, and I’ve heard people talk like paper, Bitcoin, summer, and, you know, kind, kind of a few things along that.

Um, I don’t believe that, uh, at all, just to be clear, I think it’s. You’re now a multi-trillion dollar asset to go move this thing. You need serious capital flows, right? It’s, it’s not like Bitcoin’s 10 grand anymore. It’s very different. So like you, you need just a very different, you know, orders of magnitude different in terms of buying to go continue to move this.

I think there’s also like an, another piece that’s worthwhile, or worthwhile to dig into is. The way the buyers come on is very different than the way the sellers sell, at least as we’ve seen over the last few months. And you see your MicroStrategy, meta, planet, Nakamoto, you name it, they’re trying to buy Bitcoin without moving the price, right?

Because they are trying to minimize the slippage that they incur. Well, if you look at the hyper liquid whale or some of these other folks who are trying to. Sell their Bitcoin and as fast a poss a, a fast, you know, and evenly inefficient way as possible to go rotate into Ether, Solana or something else.

They are not doing that right. They’re doing the exact opposite behavior where they’re trying to cause price impact, whether it’s to buy it back lower or to do something else, may or may not be manipulation. You know, you, you know, your, your mileage may vary there, but I think that is a very stark contrast of trying to understand these flows.

Because if you’re trying to be very inefficient, you can move the price significantly more, even, uh, with as liquid as Bitcoin is, than if you are not trying to do so. And I think those market dynamics are, are important to understand. Another big kind of, you know, important thing to unpack here is you’ve got a lot of people that have made a tremendous amount of Bitcoin over the last, a tremendous amount of money in Bitcoin over the last 15 years.

You’re now seeing people that have hit some of their price targets that they never thought Bitcoin was going to get to that are now unloading huge amounts of supply, right? Like we saw Galaxy do a sale for like 8 billion over the summer. Like you’re seeing size move in and out, and that has to get absorbed because revenue buyers to sell, right?

Like that. That is how these markets were. And that also has to get absorbed into the system. So you’re seeing Bitcoin, you know, shift from more OG hands to maybe newer hands, newer institutions. And I think that’s healthy. And eventually you’ll get to some new libria and low volatility situations, breed high volatility situations.

Right? And I think where more or less gearing up for, for something like that. Tell us what you think’s next. And when you say that, when you say the low volatil vol, low volatility is growing a five volatility, so I, it’s probably an unfavorable take at, uh, at, at this point, but I’m still in the camp that I think we see close to, if not 200 K Bitcoin by the end of the year.

Um, I’ve been saying this all year, so again, you know, there, there, there’s only so much time left. I think there’s been a more than people would anticipate in terms of like OG selling and then also these, you know, kind of rotations in a deliberate fashion out of Bitcoin. And I think we’re gearing up based on, you know, that stopping to some degree as well of these, some of these more macro pieces starting to work in Bitcoin’s favor.

And I think we’ve already seen gold really break out and Bitcoin hasn’t, you know, caught up to it at least recently. And I think that’s a catch up trade when we made. Yeah. What’s your, uh, what do you, what do you think happens in the next three to five years? Three to five years is hard on a 10 year time horizon.

I’m very confident Bitcoin will be a million dollars or more. Three to five years is really hard because there’s just so much macro that goes into that. Like I feel very confident, you know, in the next two to three years that we easily hit like, you know, two 50. Beyond that, it’s, it’s really hard In between there, there’s so many political pieces that get involved in there.

It’s really hard. Yeah. But on the tenure, I’m, you know, very confident. Yeah. Yeah. It’s a tricky one because especially right now, we have the benefit of having a very pro bitcoin, uh, cryptocurrency presidency in IT, administration and all that, which is really helping. But gosh, I mean, who knows, two or three years from now, we could get somebody who trying to cut.

Cut the legs off. So it’s tricky. But, um, anyway, I, I do appreciate all your thoughts here today, rich. It’s been, uh, good having you again. Just, uh, for our people who are interested in Core, what’s the easiest way for them to learn more? Easiest way to learn more, check out Core down.org or x.com. Still weird to say.

X uh, x.com/cordal under org. Tons of amazing materials there, um, and tons of interesting, you know, a ma community spaces, webinars, you name it. Million different ways to learn about core and then also to get involved, whether it’s in Discord as an ambassador, community member, you name it. There’s millions of core to shoes, uh, around the world, and we’re always welcoming, you know, more folks that want to get involved.

Cool. Thanks so much for joining us. Awesome chat soon. Thanks. You make a lot of money, but are still worried about retirement. Maybe you didn’t start earning until your thirties and now you’re trying to catch up and meanwhile you’ve got a mortgage and private school to pay for and you feel like you’re getting farther and farther behind.

Good news. If you need to catch up on retirement, check out a program put out by some of the oldest and most prestigious life insurance companies in the world. It’s called Wealth Accelerator. Can help. You amplify your returns quickly, protect your money from creditors, and provide financial protection to your family if something happens to you.

The concepts here are used by some of the wealthiest families in the world, and there’s no reason why they can’t be used by you. Check it out for yourself by going to wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to your show everyone. Hope you enjoyed it and again.

That’s good news, right? We’re talking about potentially getting yield from Bitcoin in our own custody. May not be a lot of yield, but, um, but it’s, you know, better than, better than just kind of letting it sit and, uh, cold storage doing nothing for the next five to 10 years, um, which I think is probably the smartest thing to do in general.

Um, but if you’re, if you’re, you know, if you want yield and keep custody and you, you know, you’re willing to. Kind of check out what Rich is doing. It’s a, it’s an interesting opportunity anyway. Um, last thing I’ll just say, if you, you know, if you’ve not done so, make sure that you actively try to learn about Bitcoin, because again, if you are sitting on the sidelines, you’re hearing about this Bitcoin things, I don’t want to be a part of it.

Whatever. Do that at your own risk because, you know, um, I think if you look at the next five years, I, I can’t. Think of an asset that I’m more sure is going to be higher than it is today. That’s it for me. This week on Wealth Formula Podcast, this is Buck Joffrey signing out.

No-Brainer Strategy to Start TODAY: Why Wealth Formula Banking Makes All the Sense in the World Oct 14, 2025

It’s been a while since I’ve talked about Wealth Formula Banking in detail, and I know we have a lot of new listeners who may not have heard about it yet. So today, I want to share a webinar that explains why I think this strategy is such a no-brainer.

First off—what is Wealth Formula Banking? You may have heard of something called “infinite banking.” It’s a similar concept, but instead of focusing on paying your bills, Wealth Formula Banking is specifically designed to amplify your investments.

My introduction to this idea came the same way you’re hearing it now—through a podcast. I kept hearing the phrase “be your own bank.” Honestly, I didn’t know what that meant, and I tuned it out until a friend finally broke it down for me. That’s when I had my aha moment.

Here’s why. Normally, when you want to invest in a cash-flowing asset, you park money in a checking or savings account first. The problem? Those accounts pay you almost nothing—well under 1 percent. Meanwhile, inflation is running at 2–3 percent, so you’re guaranteed to lose money. That’s why my friend Robert Kiyosaki always says, “savers are losers.”

Wealth Formula Banking flips that script. You’re essentially creating a special kind of cash value life insurance policy, where the money you put in grows at a virtually bulletproof 5–6 percent compounding rate per year. Not that sexy on its own, BUT…here’s the kicker: you don’t have to pull that money out to invest in your deal. Instead, you borrow against it from the insurance company’s general ledger at a simple interest rate.

That means your original money keeps compounding inside the policy at 5–6 percent—even while you’ve borrowed against it to invest in cash-flowing assets like real estate. That’s the key. With a HELOC, when you borrow, your money stops working for you. With Wealth Formula Banking, your money never stops growing.

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It’s not magic—it’s math. And it’s the kind of smart arbitrage that can turn ordinary investments into extraordinary ones.

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528: Investing Is More Like Poker Than Chess Oct 12, 2025

Most people picture investing as a game of chess. Everything is visible on the board, the rules are clear, and if you’re sharp enough, you can see ten moves ahead. But markets don’t work like that. They shift in real time—rates change, policies flip, black swan events crash the party. That’s why I think investing looks a lot more like poker.

In poker, you never know all the cards. You play with incomplete information, and even the best players lose hands. What separates them isn’t luck—it’s process. Over time, making slightly better decisions than everyone else compounds into big wins. That’s the same discipline great investors use. They don’t wait for certainty—it never comes. They weigh probabilities, manage risk, and swing hard when the odds line up.

Risk isn’t the enemy. Fold every hand and you’ll bleed out. To win, you’ve got to put chips in the pot—wisely. Wealthy investors do the same. They protect the downside, but when they see an asymmetric bet—small risk, huge upside—they lean in. That’s what early Bitcoin adopters did. That’s what smart money did in real estate after 2008.

And just like poker, investing is about knowing when to quit. Ego and sunk costs can trap you in bad hands, but the pros know when to fold and move their chips to a better table.

In the end, both games reward patience, discipline, and emotional control. You don’t need to win every hand. You just need to stay in the game long enough for compounding to do its work. The amateurs play for excitement. The pros play for longevity.

That’s the mindset you need as an investor and the reason I interviewed a former professional poker player on this week’s Wealth Formula Podcast!

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

One of the things that we feel like when we decide to make a bet on a thesis and we’re thinking about, well, wait, what, what if it’s like this? Or what if it’s like this or whatever, is that we, we do have this sense that we get caught in those decisions, right? That we start something and that, uh, it’s very hard for us to get out of that position.

Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. Before we begin today, I wanna remind you that there is a website associated with this podcast called wealth formula.com. Lots of resources there, including the ability to sign up for our accredited investor club.

Now, of course, that is a, uh, also known as a investor club and, um, basically you sign up there. And, uh, you get onboarded and you get an opportunity to see private deal flow that you will not see anywhere else. So go check that out. Wealth formula.com. Topic of today’s show’s a little different. Um, it’s, uh, a little bit more, uh, about the cognitive side of.

Of, uh, investing. So, you know, most people picture investing as sort of a game of chess, right? Everything is visible on the board. The rules are clear, and if you’re sharp enough, you can see 10 moves ahead. But in reality, the markets don’t really work like that. They shift in real time. You know, you got rate changes, policy flips, black swan events, all these things can crash to party.

Uh, and that’s why I think investing actually looks a lot more like poker and poker. You know, you never know all the cards you play with incomplete information. And guess what? Even the best players lose hand, you do lose in investing. That’s something you have to understand. Now, over time, making slightly better decisions than everyone else compounds into big wins.

And that’s what makes a, you know, difference between like professional investors and people who lose money in the market. That’s the same discipline. Great investors use. They don’t wait for certainty because the reality is it never comes. They weigh probabilities, manage risk, and they swing hard when the odds line up, right?

So the thing to understand is that risk isn’t the enemy, right? In poker, if you fold every hand, you’re gonna, you’re gonna bleed out. You know, you’ve gotta have ships in the pot, you know, wisely. Of course. Wealthy investors do the same. They protect their downside, but when they see an asymmetric be a small risk, huge upside, they lean into it and you know.

That’s what, for example, we, we’ve talked about it before, but you know, people who, uh, you know, bought Bitcoin early and had conviction and stuff, like that’s what they did. And that’s what the smart money did in, in real estate after 2008. They knew that they had a reset point, and even though things looked dim and grim, but all of a sudden they saw rates coming down.

Um, they saw quantitative easing. They knew that a huge amount of liquidity was coming into. Space and they killed it for the next, you know, decade and a half. I mean, similarly, right now, like I think, um, I’ve been saying before, I, I think rates are coming down because of the Trump takeover of the Fed, because of, uh, job market that’s weakening because of ai, all these things.

But you know, just like poker investing is about knowing when to quit as well. Ego sunk cost and. Trap you in bad hands. But the pros know, uh, when to fold, move their chips onto a better table, right? Uh, in the end, chess, you know, or poker, they, they both are gonna do one thing. They’re gonna reward patient’s discipline and emotional control and understand you don’t need to win every hand.

And if you do, you don’t panic and stop playing. You just need to stay in the game long enough for compounding to do its work. Um, you know, the amateurs, they do it for excitement. The pros, they play for longevity and obviously investors were trying to make, uh, make some money. So that’s the mindset you need to have as an investor.

And the reason I interview a former professional poker player on this week’s. Wealth Formula Podcast. Hope you enjoy it. We’ll have that interview right after these messages. Wealth Formula banking is an ingenious concept powered by whole life insurance, but instead of acting just as a safety net, the strategy supercharges your investments.

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Turbocharge your investments. Visit Wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show we went today. My guest on Wealth Formula podcast is Annie Duke. She’s a world-class professional poker player, winning millions at the table by mastering strategy, risk and human behavior.

Since retiring from poker, she’s become one of the foremost experts on decision science. Uh, she’s the bestselling author of Thinking and Bets and Quit, as she now advises investors, founders, and executives on how to make smarter decisions when the stakes are high and the information is imperfect. Annie, welcome to the show.

Thank you for having me. So you, um, uh, obvious a very interesting, uh, background. You went from a professional, uh. Poker champion to a decision strategist, essentially. So tell us, I mean, yeah, what parallels do you see between high stakes poker and the decisions, say every day investors face in in today’s markets?

Yeah, so first of all, I actually went from cognitive science to poker, back to cognitive science. Oh, okay. Well, a loopy loop. Um, okay, got it. All good. So here’s actually the interesting thing. So, um. Particularly when you’re thinking about things like investing, there’s, part of economics is a field called game theory.

And game theory is the study of decision making under uncertainty. Um, and the uncertainty derives for over time is the other thing. So, uh, so we can think about it as making decisions to invest limited resources, right, in situations where, uh, luck can affect the outcome. Um, and where, uh, you don’t know all there is to be known and know, you know, very little in comparison to all there is to be known for most of the decisions that you’re making.

And then, and then the over time piece has to do with, um, for most types of decisions, and this is particularly true in, uh, investing. The decision we you make now could affect de de decisions to come. So you could think about like in negotiations, right? Like when I’m negotiating with someone, it’s really different.

If it’s a one-off, it’s the only time I’m ever gonna negotiate. Against them versus if it’s gonna be a repeated negotiation. Right. Okay. So a guy named John von Norman, along with Oscar Morgan Stern, wrote a book long time ago called The Theory of Games, which was really kind of defining this as a field, um, and something that we ought to be thinking about and studying.

He was actually the mentor of John Nash, very famous economist, schizophrenia, um, who was the subject of a beautiful mind. And John Nash’s, um, uh, Nobel Laureate Nobel Prize was actually in game theory. That’s what he was studying. Um, okay. So what does that all have to do with the question that you asked, which is what are the parallels with poker?

Jon Van Neuman was actually thinking about game theory and trying to figure out sort of like the mathematic, how you would mathematically model this problem. He actually used poker as. That he, for the model of the way that he thought about it. So, um, he was actually asked by Jacob Broski, who’s a colleague of his, um, you know, oh, you know, I read the theory of games and it’s really interesting what you’re talking about, but I don’t understand why you didn’t use chess as the model.

The sort of thinking like chess is the game. And Van Neuman, I’m paraphrasing here, basically said chess, chess isn’t a game. It’s a calculation. Poker is a game. And what he was pointing out is that in chess there’s. You know, a much more, you know, smaller influence of luck. And the other thing is you can see all the pieces on the board, right?

So that it doesn’t, it doesn’t have these same components, right? So that’s really where you can see this sort of model of poker, not just for investing. Really for any kind of decision you make, and it’s like you’re making decisions where luck has a very strong effect on the outcome. You have to invest limited resources in these choices with very little information.

I certainly can’t see my opponent’s cards. Um, and how a hand turns out is not necessarily going to be per. Is not perfectly correlated in the short run with what the quality is of the decision that I made. Like was I mathematically correct to be making that decision? Because you can get like a bad deal of the cards, for example, right?

So, uh, it’s very, very much like an investing in, in that way. So it creates a really good model for understanding all decision making, but it particularly maps really nicely onto finance. Yeah. And I guess thinking in, in bets, uh, you, I guess you argue that good decisions aren’t outcomes, but you know, they’re about the process, right?

It’s, it’s more about the process. So that’s kind of what you’re getting. How do you suggest investors then evaluate whether they’re making smart choices, um, when the short term results may look bad? So, okay, so first of all, let me just sort of be clear about what I mean by an outcome. So obviously, like in the long run.

The outcome is gonna be very good signal for what the quality of a decision is not on one investment. I mean, across like many, many, many different investments. It’s kind of like if I flip a coin once, it doesn’t tell me very much, but if I flip a coin 10,000 times, then obviously the outcome of those 10,000 flips is gonna tell me a lot.

Right? So I’m, I’m really talking about sort of what’s happening, uh, with a small sample size, like, you know, one stock that you might buy. Um, or like in the short run, right? So where, where you don’t have enough time to sort of realize, uh, the expected val value and overcome whatever the volatility is, right?

So, IJI just wanna be clear about that. So one of the really biggest mistakes that we make is decision makers, is that we connect the outcome, we get to the quality of the decision. In the short run, like the short term outcome. So you, you buy something and the next thing you know it’s down 10% and you think I made, I made a really bad decision.

That kind of thing. Or it’s up and you think, oh yeah, great decision. Yeah, yeah, yeah. Right, right, right. Um, and there’s some, there’s some differences, um, with that. So I’m gonna have a tendency to do that, which is called resulting, uh, much more when I’m thinking about. Other people’s investing. When I’m thinking about my own and things go poorly, um, I’m gonna tend to say, oh, I got unlucky.

Which is bad because maybe you made a bad decision. And when I win, I’m gonna have a tendency to attribute that to my own decision making. This is called self-serving bias, which is also bad because maybe you made a bad decision. People have won on many investments where their thesis was ridiculous, right?

So the question is like, how do you actually overcome that problem? And it’s hard, uh, but it’s worth the work. Um, and it’s a little bit of a long answer, so I’ll just start the conversation and then we can go from there. Yeah, I mean, I guess the question is, you know, what kind of tools for decision science can really help people in this, these kinds of scenarios.

So I would ca, I would put tools into two categories, right? So, so one thing is that you have to start really making explicit. What it is that for you, the, those qualitative judgements that are, that are driving the decision, right? Not just the data, but like how are you interpreting the data? What do you believe to be true of the future that’s causing you to, to make this decision?

So, um, that’s number one. And we, we actually leave quite a bit of that implicit, believe it or not. Um, number two is you have to start to think about what are the tools that are. Not only gonna help me to be better at making the decision at the time that I’m making it right, and there’s all sorts of things that you can do that can be helpful with that, but also are gonna help me then to be able to actually close the feedback loop in the way that I want to, right?

Which is to, to close the feedback loop back to decision quality and not just sort of rely on how it turned out, which is bad. Figure out what I’m good at and what I’m bad at so that I can start to improve. Then also, and this is really important to start to develop a tool set that allows you post-decision to be more rational in the way that you react to new information.

And it turns out that even people who are really good. That initiative to, uh, decision to start something like, to invest in something are very bad at the decisions that, that they make after they invest. In other words, what do you do as you learn new information? Are you actually being, uh, reactive to that in a, in a rational way?

Are you reacting to that sanely? Um, and it turns out the answer is mostly no. Uh, we’re pretty bad at those decisions, so you have to actually sort of develop a whole toolkit to help you with that piece as well. Yeah. So in, in, uh, quit, uh, you make the case that knowing when to walk away is as important as persistence.

So how should investors think about quitting, uh, an investment or business venture without feeling like they’ve failed? So, I would actually argue that knowing when to walk away is more important than persistence for the reason that, um, we tend to be persisters. So it’s just kind of what our default position is, is to stick with stuff.

Number one and number two, you’re gonna stick with a lot fewer things than you’re gonna walk away from. So if that’s the case, if the majority of your decisions are gonna be walk away decisions and we tend to be persisters, then figuring out how to good at that, get good at that walking away thing is gonna be really important.

So why is it that we tend to be persisters? Well, there’s like a whole bunch of cognitive biases that. Really influence big. It’s kind of like a big pile on that makes you wanna stick with stuff. And this is a particularly big problem, um, in anything, but you can really see it in investing. So what happens is that we start something and then as soon as we start it, we have a few things.

One is we start to accumulate what are called sump costs. This is time, effort, money, attention that you have put into something. So you can think about it. If I buy an equity at 50 and it’s trading at 40, I’m down 10. Right? So that’s, that’s money that’s now gone. Um, you could also think about it as like, uh, if I start a race from like running a marathon, I just started putting effort into it.

Like I’ve done training. Sunk cost. Uh, I, um, you know, so I’ve been training for months and then I start running and I’m like part of the way through the race and like that all becomes stuff, you know, sunk cost. And so we have this tendency, whether it’s like running a marathon or you hear this with people who are in jobs that they don’t like, why are you still in there?

’cause then I, I, I don’t wanna have wasted all the time and effort and training and all this stuff that I’ve put into it. So it’s thing time, effort, and money that you’ve invested in the past. It’s now affecting your decision whether to continue in a way that it shouldn’t. So in reality, yeah, okay, you bought the equity at 50, now it’s trading at 40.

Um, we have this tendency to say, well, if I sell it now, I’ll lose $40. But it’s like, okay, but you already lost that. Would you buy that today? And if the is no, you shouldn’t sell it. But what sunk cost is it causes us to keep at it. Even if we wouldn’t buy it today. And that’s where you’ll hear people say things like, well now it’s really cheap, or It’s too cheap to sell.

So some cost is a big one. Another big one is, um, called the endowment effect, which just means that once you own something, you value it more. And if you don’t own it, and obviously you own the things that you invest in, uh, which is bad. And then there’s all these identity things, which goes to what you’re saying about how do you not feel like a failure, right?

When we make a decision, um, that becomes woven into our identity, right? We’ve decided that this is a good thing to do, it’s a good thing to buy. Um, and if we then all of a sudden say, no, wait, right? I think I should stop. What is the like that, that’s an kind of an attack on our identity. We sort of don’t see ourselves as consistent.

We think we made a mistake. We view it as failure because we’re quitting the thing. Like not only do we feel like, well, maybe, you know, my thesis was wrong, but maybe you lost money. Right? And that doesn’t feel good. And all of those things feel like a failure. And that’s true. Like investing or like, uh, if I start, uh, developing a product, if I stop it, does that mean that I’m a failure?

If I, you know, uh, if I’m doing a project and I stop it, does it mean I’m a failure? If I start a job and I quit, does that mean I’m a failure does, right? That kind of all wraps into it. So the question is like, if all these things are working against us, how do we actually start to say, well now we have to get really good at this?

Because the fact is that when you’re making decisions. As I said before, it’s like you’re non omniscient. You, you know, very little in comparison to all there is to be known, which means that you’re gonna learn a whole lot of stuff after the fact. Some of that times that stuff is gonna be like, wow, this is turning out really well.

Sometimes that stuff is gonna be like, Ooh, I wish I had known then what I known now, and I know we’ve all had that feeling. And when we have that feeling. We should walk away, but all these things make it so that we don’t. So how do we help that? The, one of the main ways that you can help that is to develop a set of kill criteria.

What are kill criteria? They are, um, basically you can think about it as like benchmarks where if you hit that benchmark, you are saying that’s a signal that things aren’t going my way and I ought to walk away. I should go. So let’s think about like, what’s the simplest form of a kill criteria? The simplest form of a kill criteria is a stop-loss.

So if I, if I can say I’m gonna buy this stock at 50, if it’s trading at 40, I have to sell. That’s the simplest form. Now, you know, like for a retail investor, absolutely. Like have at it. I think stop-losses are great. Um, but they’re pretty brute force, right? Because we know that even if the stock is now trading at 40, that your thesis could still be correct.

Um, and so when you’re brute forcing it, it’s definitely helpful if you have a tendency to, not to quit, but we’d like to get beyond that. Now. That’s something that I used in poker a lot, right? Because in poker, uh. When you’re playing in a game, it’s not always obvious. The reason that you’re losing it could be that you’re losing ’cause you’ve gotten very unlucky.

But it could also be that you’re not playing well. And I know I’m gonna be biased to think it’s because I got unlucky. So then I just put in a stop loss because it makes me get up from the table in situations where I’m gonna be a bad judge of why I’m winning or losing. So I did actually use that quite a bit in poker, and I think it’s very good in particular for retail investors to have stop losses in place.

What is actually even better to do than that is to be very explicit, not just about what your thesis is, but to imagine, well, let’s imagine that it’s X time from now, and I look back and I realize that my thesis wasn’t right. In other words, to think really explicitly about, well, what exactly does your thesis imply about what you think is gonna unfold in the future?

Then use that to say, okay, what are these early signals that are gonna tell me that the future isn’t unfolding? As my thesis is saying, thesis are probabilistic. Right? You’re saying, uh, it’s got a high enough probability that this is gonna occur. That I think that the price of this whatever asset class it is, that you’re, um, involved in, that the market doesn’t quite have this.

Right. Because I, I think the probability is high enough. I ought to be buying this, but it’s probabilistic, so it might be wrong, right? And also things just might change in the future. So write down what those things are in a very explicit way, and then have attached to that a pre-commitment as to what action you would take if you saw that.

So let me give you an example. Um, for example, from, if you like, a different type of thesis or like what we might do with like a value investor or something like that. So let’s just start with a simple thesis. Let’s imagine that my investment depends on a prediction that interest rates are gonna rise in the next six months.

So let’s just imagine that’s the case, right? Um, what I can do there is say what could occur in the future that would tell me that the interest rate environment isn’t actually what I was hoping for, and I ought to exit the investment. So it could be. If I see interest rates go down more than 25 Bs as an example, right?

Then in that case, maybe I have to sell as an example. Um, it could be things that actually drive interest rates, right? So, um, it could be that if I see some early signals that I think the Fed is gonna lower interest rates that can get out of the investment, right? Which might have to do with like how inflationary is the environment, is there a softening job market?

For example like that. So I can, I can see, I can start to think about what are the things that I might see in the future that would tell me that this core piece of my thesis that has to do with what’s happening with interest rates is, you know, now the probability is too low. Or maybe I’m actually observing them going down.

So like that’s one thing that you can do. Another thing we do is like with value investors, where you have a long hold bias, um, you get a lot of like short term overreaction to earnings. Reports, right? So what we do is we say, let’s get a lower bound and an upper bound within which the earnings report we’re, we’re gonna be pretty tolerant of it ’cause we’re not gonna think it changes anything.

And we decide that in advance because when you’re actually reacting to it in the moment, you’re not gonna be, that’s when you’re gonna be the least rational about it. So in advance we say, okay, this is what they’re projecting. Here’s the, the variance around that that we’re gonna tolerate. Then we know if earnings are above that range, that we have an action plan for that, which is probably gonna be to buy more, right?

It’s gonna be like, yay, we’re really happy. Um, and if earnings are below that, then there’s a whole bunch of things that we have to do, one of which might be sell, but a lot of it is to just look at other things that might be driving that, what’s happening in the actual environment is the environment re, you know, recessionary or so on and so forth, right?

We, we’ve already planned out what we’re gonna do in those, in those cases. So this kind of mental time travel where at some time, way in earlier you’re saying, if I observe these things occurring in the future, then I’m going to do these things. Right. You’re, you’re committing to that. Those, if thens actually really increases the chance that you’re gonna behave rationally when you see those signals in a way that you don’t.

If you allow that to happen without the pre pre-planning, and I’m sure that you’ve felt this yourself, you know, it’s like you get thesis creep, you know, all of a sudden no, well that’s not why I bought it. Or now it’s really cheap. Or these kinds of things that get people stuck in investments where from the outside looking in, you can see it’s very clear that they ought to be selling, uh, but they don’t because it’s really hard to make those decisions on the fly.

Yeah. You know, when you were talking about interest rates and, and such. It was got me thinking sort of about sort of the macro environment we’re in right now. And, and it’s interesting when I think about my own belief based on sort of what kind of some of the things you referenced, the job market and, and, um, essential political forces and the Trump administration going to the Fed.

And my own personal thesis is that interest rates are going down. And that they’re gonna figure out how to, you know, make the bond markets come down as well, maybe through quantitative easing, et cetera. So that’s like my thesis. Right. It’s interesting. Um, the, on the other hand, there’s this force of what happened with the markets, like, you know, in 21, 22, 23, where we took a beating in real estate, right?

And so you have this. I, I guess what I’m trying to get at is it’s hard sometimes to erase memory and fear and look rationally at the moment ahead of us and say, okay, so if I’m a rational investor and if this is what I truly believe, then maybe I should be buying right now instead of being worried about what happened in 22 and 23.

’cause that’s the past. I mean, how do you approach that? Uh, you know. How do you suggest approaching that for people? Yeah, so that’s a hard one. Um, so first of all, the past is actually important to understand, right? Because looking back at the past as an example is gonna tell you that, well, corrections are pretty common, right?

They’re not that odd. You know, it’s kind of interesting ’cause when people talk about 2008. They’ll often say like, oh, it was a Black Swan event. And I’m like, yeah, okay. There’s been like three, 2000 eights in like the last 20 years. Like how Black Swan is this, right? Yeah. Yeah. So I’m not saying that you shouldn’t, you shouldn’t look at the past, right?

But what you wanna do when you’re, when you’re looking at the past, um, I say, well, first of all, generally things go back to equilibrium, right? So if things seem really out of whack, they probably are. That doesn’t mean that you can time it in any. Don’t, please, I’m not telling you that. I’m just saying that you should probably say like, okay, there’s gonna be some sort of correction.

I don’t exactly know when it’s gonna happen, but it’s probably gonna happen. Um, and you know, and we’ve seen that several times where we get a big correction, so that can just sort of help you to understand like, okay, it goes up and then it corrects and then it, you know, but then when it corrects also it’s not gonna stay there, it will go back up like the markets recover.

Um, so that kind of stuff is actually really important when you’re looking back at, say, what you’re talking about like 2022 in terms of. It’s really important to understand and try to get a good look at what were the causal drivers of what happened then, and do tho those causal drivers also apply today.

So one of the things that we wanna understand is that things that happen don’t just happen by magic. There’s a cause of those things happening. And we wanna understand what those causes are so that we can figure out should I use that as a model for what’s going on today or not? And sometimes the answer is partly but partly not.

And then you have to interpolate, like you have to figure out how to blend that information. Like this is the same, but this is different. How do I think about what the influence of those different pieces might be on what the pricing might be? And that’s just part of good forecasting, right? Is to understand what those causal drivers are.

So that’s just kind of like that. What are we doing in terms of how do we use the past, right? Because we definitely wanna use it. We just wanna make sure that we’re thinking broad strokes, just in terms of there are corrections and then rebounds, and then that kind of stuff. But also just. Understanding that you can’t just say, oh, I’m scared because 2022 happened.

You have to say, well, wait. What were the underlying causes of 2022? Do do those things exist today? Um, and that also can help you predict that something like 2022 might happen when other people don’t see it, if you’re really thinking that way. So that’s number one. Number two is, um, when you have these quitting plans in place, it makes it a lot easier to go ahead and do it even if you’re scared, because it makes it less scary.

One of the things that we feel like when we decide to make a bet on a thesis, um, and we’re thinking about, well, wait, what, what if it’s like this? Or what if it’s like this or whatever is that we, we do have this sense that we get caught in those decisions, right? That we start something and that, uh, it’s very hard for us to get out of that position.

Yeah. The spec espec, especially if you’re not just dealing with stocks in a liquid market, right. If you’re dealing with, you know. Anything outside of just something that you can just sell on Schwab in 30 seconds. It’s, it’s a completely different animal. Well, even if, that’s the interesting thing. Even if you can sell it on Schwab in 30 seconds, you won’t.

So we, we do kind of sense that. So when we have these quitting plans in place ahead of time, um, then. It makes it easier for us to not be afraid to start it because we actually have plans in place, uh, to know that we’re gonna stop it earlier than we otherwise would’ve because we’re gonna be paying more attention when we’re in an illiquid market.

It doesn’t mean that you can’t quit because you can hedge. So one of the things that you can do is say, I can get into this, and if things start to look kind of bad. What would I then do to, to hedge that position? And so you can already have that in place. Then we could actually take that concept to de-risk now and say, well, what I should really do is I’m thinking about the probability of those two different worlds that might occur.

Right? A 2022 world, and then the world that you’re thinking is gonna happen, right? And say, what do I think the probability of those two things is? Right? And if you understand the probability combined with the payouts. Then you could actually do both things at once. That’s a really nice thing about financial markets.

And you could, let’s imagine that you think it’s, you know, more probable with an appropriate payoff, uh, what your thesis is, right? You can invest in that, but also put the hedge on at before, right? And you can say, I’m gonna do that. I’m gonna do it probability weighted, um, and have the hedge on. And then you still have quitting plans, which is, you’re gonna start to understand, as I see the world unfold.

What are the signals that would tell me to start reducing the hedge? What are the signals that would tell me to start increasing the hedge? Right? And then that makes it all a lot less scary because you’re already planning for that divergence that might occur in the future away from your thesis, but you’re also planning for the world starting to conform to your thesis as you learn new information.

So, um, the, the interesting thing is that like the decisions in the other direction are pretty hard too when you start making money on something and trying to figure out when to get out. Um, so the, this is the wonderful thing about kill criteria is that works for both. Yeah. Right. So, um, one of the things that happens on the winning side, uh, is that we actually tend to sell things too early.

And, uh, so why is that happening? So, uh, so we got these sort of opposing actions, right? If I’m losing, I will sell too late, and if I’m winning, I’ll sell too early. So this is actually goes way back to 1979, a very seminal paper from Daniel Kahneman and Amos Dki. It became one of the really key parts of, uh, something called prospect theory, um, which is what Daniel Kahneman won a Nobel Prize for.

So this is sort of the central thing that they found in their studies. They gave people the chance to take a loss or gamble, in other words, to, to continue in it with something or take a win or gamble. Um, so. Uh, so let’s, let me put this into concrete terms. So let’s imagine that you’ve won. I tell you, I’ll either, you can either take a hundred dollars, I’ll give you a hundred dollars, or you can flip a coin double or nothing.

Now, the expected value of those two things is the same. If I give you a hundred dollars, your expected value is a hundred dollars. If you flip a coin double or nothing, you’re gonna win 200 or zero each of those. Half the time the expected value is a hundred dollars. So there, and from that sense, from an expected value sense, they’re exactly the same.

The only difference is that one carries volatility with it and the other one doesn’t. So one is aho gain and one has volatility. So when you present people with that choice, they’re all like, what are you nuts? Give me the a hundred dollars. Why would I flip for it? Just gimme the a hundred bucks. But when you say, okay, you have to give me a hundred dollars.

You can flip double or nothing. Again, in both cases, the expected value is negative a hundred. It’s just one has gamble and the other doesn’t. Right? So when you say that to people, they’re like, oh, let’s flip. Okay. So that’s interesting. So what they wanna do when they’re in the gains is bring the volatility to zero.

Just give me my money. They just wanna get it. And when they’re in the losses, they wanna take the gamble, they wanna keep going. Now what’s interesting about that is that they’ll do it even when the expected value isn’t the same. So if I say to you, okay, I’m gonna give you a hundred dollars, or we can flip a coin and you can win 180, sorry.

Or you can win 220 or zero, now you’re making $10, right? That’s 10% return, right? So I say take the hundred. Let’s flip two 20 or zero. People still say no, even though the second bet is now more valuable, I can get a hundred, you know, I’m making, I’m making $10 on that. Right? On the losing side, let’s say that I say to you, okay, you can give me a hundred dollars, or we’ll flip it negative two 20 or zero.

That costs you $10 more, and you’ll say, let’s flip. So people will pay, they’ll give me $10 to take the money off the table when they’re winning, and they’ll give me $10 to keep the money on the table when they’re losing, right? So what is going on here, right? So this goes to this problem of people wanting to take the money when you have a gain on paper.

People want to realize that being. So what that means is that even when the expected value says no, you should stay, you should keep your money in this thing. They don’t want to because as long as they have the bet on they, they could lose the gains that are unrealized gains, they could lose those back and they don’t wanna do it.

That feels really awful to them. So they wanna get that money off the table super fast, and that’s what causes people to take wins off the table faster than they ought to. And on the flip side, when you have losses on paper, you wanna keep them on paper because as long as they’re on paper, you have a chance to get back to even.

And you want, you wanna keep that chance going even when the expected value is against you. Okay? So the kill criteria are helping you with that second problem, right? Which is, if you have losses on paper, just take them off the table so that you can take that capital and put it to use. It’s something that you’re gonna actually win at.

And don’t worry about the fact that you’re realizing those losses, because you don’t wanna keep that gamble on because you’re losing to it, right? So the kill criteria helping you with that, but they’re also helping you with the other problem. So, remember I said. With, at the value investor that I work with, we have a band.

Here’s the lower bound and upper bound for say, earnings. Um, within which you’re, you don’t care, okay? So that tops stops you from taking the wins off the table. And then if it goes above that band, we already know what we’re gonna do, right? So in some cases, right, if it goes above that band, there might be rebalancing that happens.

That has to do with portfolio dynamics and not with taking wins off the table. That’s a different reason. But we know, and it’s often gonna mean putting on more risk, right? It’s gonna mean things are more favorable than you thought or whatever. And if it goes below, um, you know, depending on what else is happening, we’ll take the money off the table.

So the nice thing about kill criteria is that they work in both directions. So they’ll actually make you be more rational about those decisions. About when do you keep the gamble on versus when do you take the money off the table. Let’s do a little exercise, if you don’t mind. Okay. And, um, because the, um, it makes me think about, so I, um, you know, I started talking on this show about my conviction of, uh, on Bitcoin in 2017.

And some people were smarter than me and actually went and bought a whole bunch of Bitcoin when it was very, you know, very inexpensive. And I, I have some, but. I have some people who are sitting on a lot of gains, a lot of gains, and there’s this question that kind of comes up for them now as we’re sort of hitting in.

We’ve got a hundred thousand dollars Bitcoin people buying this stuff when it was maybe four or $5,000. Right. Uh, they’re sitting on millions of dollars of gains and we’ve seen volatility in Bitcoin in the past. There’s an big, you know, we’re also seeing like a lot of. Information in terms of the institutionalization of this stuff, the, um, the, um, you know, nation states starting to adopt it and that kind of thing.

Now, somebody was sitting with those kinds of gains. Give me sort of a, and I, I’m not saying, telling you, asking you when to sell, but rather how do, how should someone approach this situation if they’ve got, you know, enormous gains and, but they still think they’re bullish. How would you suggest somebody start looking at that as a framework?

Well, first of all, I would wanna understand, I would hope that they had been explicit in some way about what their thesis was for why they bought it. Because what can happen, and I’m not saying this is true of the people that you’re talking about, is that the reason that you bought it is different than the reason it’s winning, right?

So I would wanna know, look, when you bought it at four or 5,000. Like, what was the reason? Were you buying it because you thought it would be disco correlated with the market? ’cause it’s not right? Would you? Well, well, does that, well, does that matter if, if you Well, if it does, it does. In the sense of, in that particular case, if my thesis was wrong, what I wanna say is, okay, I got lucky.

So now, so now I, I need to actually not just hold it because I have it, because maybe I actually don’t understand this asset class. Okay. So I might have a tendency, for example, in that situation to sell it, which just cleans the cognitive slate and then reexamine it once I’ve sold it. See, the problem is like doing the analysis when you actually hold the asset is gonna be actually kind of hard.

So I would wanna understand, do I understand this asset class? That would be really important. Okay. So as an example, we know that one of the drivers of what’s happening in crypto right now has to do with the specific attitudes and actions of the current administration. I’m guessing if you bought it in 2000 at at 4,000 or whatever, that wasn’t on your Bingo card.

So let’s imagine this world, and I’m not saying this, I’m, I’m not trying to give anybody investing advice, but let’s imagine a world where you said, I’m gonna buy Bitcoin because I think it’s going to be, uh, a good hedge against general market chaos. Um, and it’s gonna be, uh, disco, un disco correlated with like, uh, uh, interest rate.

Fluctuations. So let’s just imagine that that was your thing. So you were basically saying, this is gonna be good because I’m gonna hold equities, I have treasuries, I have, you know, all these different asset classes, and this is a different asset class that’s gonna work in a way that it’s gonna be a good addition to the portfolio because it won’t be really super correlated with the rest of the portfolio.

So let’s just imagine that that was your thesis. Well, does, does that feel like that thesis is correct? I mean, you know, again, not a Bitcoin expert, but I don’t think so. I think it tends to, I think as the market goes, Bitcoin tends to go Yeah, a little bit. A little bit, right? So if that were the case, I might, the, I, I would’ve set some band around correlation, right?

And a lower bound and an upper bound for how correlated is it is with other things. Um, because if that’s my thesis, and then if I’m actually not living in that band and it turns out to be more highly correlated, then I would, I would have a tendency to wanna sell it. And if it were, uh, less correlated, I might actually want more of it, right?

So I would actually be thinking that way. So let me just start with that. If it turns out that your thesis is wrong and that it’s one for different reasons, it doesn’t mean that you can’t have the asset. It just means that you need to do fresh work. One of the best ways to do fresh work is to sell it, right?

And so in my opinion, and again, this is just my opinion, that fresh cognitive slate is generally worth what worth whatever the transaction fee is, right? Like you, you should, I, I would gen generally say I would be willing to pay that transaction fee in order to create a clean cognitive slate so that now I can approach this.

Fresh ’cause I would wanna approach it fresh. So now let’s imagine that you approach it fresh, um, and you can do this and still hold the asset. I think it’s harder to do, but you can is to say, to really try to understand why is it doing well now, and then you have to make a bunch of forecasts, right? And this might include some kill criteria, which is, well, if those are the causal drivers of why it’s doing now, what do I think the probability is that that’s gonna change in the future?

Maybe I wanna then hedge against that, right? I might wanna say like, I wanna set up a hedge in case those things are occurring. And I certainly would wanna say, I would wanna go through the exercise of say, let’s imagine that there’s a, a change in the administration. Um, you know, so it’s 2028 and things are different.

Um, and Bitcoin has cratered. Why do I think that is? Or even don’t say the administration, just say it’s. Five years from now and Bitcoin has cratered why? And actually really run through that exercise of imagining why it is that this asset has cratered, right? And in there might be, there’s an administration change that isn’t as friendly to crypto or whatever, right?

That might be in there. So now having done that, you can say, okay, in those different worlds, what would I do? For each of those different worlds, like the, the things that I’m imagining might be occurring that would cause, cause, um, Bitcoin to crater looking back, I realized there were early signals that the world was gonna head in that direction.

What are they? And for any of those signals say what you’re gonna do about it, then I’m much more comfortable. Right? Then I’m like, okay, you’ve thought through this. Now you can do the other thing, which is imagine it’s five years from now and Bitcoin has quadrupled. Right. Why do I think that is what’s occurred in the world that’s caused that to happen?

What would I do in those different worlds? Looking back, I realized there were early signals that Bitcoin was gonna quadruple. What were they, when I see those signals, how am I gonna react to those things? Right? So I would want you to do that as well. That’s a particularly powerful thing to do if you have more than one person do it independently of each other, right?

Right. So you have, it’s called a pre-mortem is imagine the bad world, uh, a. Uh, a backcast is imagining the good world. It’s also called a pre parade. Um, and if you can have more than one person do that independently and then sort of compare notes that gets you to the best place and that, that gives you an action plan.

Last thing though, is that, um, everybody needs to decide for themselves what the value of the present day cash is, right? Versus the, you know, whatever the expected value of the bed is. Um, given risk. And so what I don’t want people to do is say, well, I’m positive expectancy, so I’m gonna keep the ba the bet on if there, for whatever reason in your own life, uh, there is a certain amount of value to getting some of that money off the table.

And sometimes to be honest, it’s just the pain of the swings is too much. So. I think people sort of have to decide that for themselves. Like I, I’m not somebody who says like, if those swings are too painful for you, and that what that generally means is that you don’t have enough financial cushion in terms of what sort of liquid or available to you.

Um, that what’s happening on a day-to-day basis with Bitcoin matters too much for what your. Net p and l, you know what your p and l is? I, I, I’m, I don’t mind people taking money off the table in that situation to get themselves in a situation where those daily swings don’t matter as much to them, and they can actually be more rational about the asset that they own.

Yeah. Interesting. Yeah. Annie, uh, thanks so much for being on the show today. The, the books again are thinking in bats and quit. How can we learn more about what you do? Well, you can read those books, which would be great. Um, I’m on lots of podcasts like this. And then the other thing is I would love for people to check out maven.com.

Um, maven.com is an online platform. It’s creators direct to consumers where you can take classes. I happen to teach on there. I’m actually teaching a cohort at the minute, and I do about three cohorts a year. Um, it’s, uh, spans over three weeks. It’s two sessions a week plus one office hour. Uh, and I teach sort of soup to nuts effective decision making on that platform.

It’s cohort driven. There’s an alumni group that still meets, and I’ve had lots and lots and lots of investors. Um, in that class, um, investors, uh, I think are naturally sort of attracted to what I do. Um, and so lot the, it’s one of the main groups of people that ends up in that class, but it’s maven.com and, um, I have a cohort running right now, but, um, you know, as soon as I finish a cohort, I open a new one that would start, you know, in a few months from then.

And so if people wanna check that out, that would be great. Um, and then the last thing is, um, I actually have a nonprofit that I co-founded. Called the Alliance for Decision Education. And what we’re trying to do is take some of these lessons, the kinds of stuff that we’ve talked about, uh, that I teach to adults, you know, that cognitive scientists and decision scientists really think about in the adult world and say, really what’s more important to teach to kids than decision making?

Seems like it’s more important than trigonometry. Um, and what we’re trying to do is bring decision education into every K through 12 classroom as an educational movement. And so I would love for people to check out the alliance. Yeah. Fantastic. Thanks so much for being on the show. Thank you so much for having me.

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Check it out for yourself by going to wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Hope you enjoyed it again. Yeah, really fascinating thing I think to think about, um, investing, uh, in this sort of more framework sort of way, right? Like, I think the thing that I, I like about what she’s talking about specifically are stop losses.

Um, you know, in certain situations I’ve had even, you know, with my own. Situation with real estate and that kind of thing. I’ve, I’ve had some situations where I had to sell early, uh, and take losses and, um, just know that, you know, you’ve stopped a hemorrhage or whatever and you’ve moved on other things.

You know, I think a wise man once said, you know, bury your losses quickly. Right. Uh, that’s an important thing to think about, especially when we’re moving into a high liquidity market from where we are right now. And, uh, you know, I, I think look at all the data in front of you, figure out what you’re gonna do.

Come up with a framework and stick to it. Um, well stick to it as long as you don’t have better information coming in, uh, in the meantime. Anyway, that’s it for me this week on Wealth Formula Podcast. This is Buck Joffrey, signing off.

527: Is Franchising Right for You? Oct 05, 2025

If you look at the wealthiest people in the world, they almost always get there through business ownership or real estate. The only real exceptions are athletes and entertainers—and let’s be honest, that’s not a realistic path for most of us.

We talk about real estate a lot here and through deal flow in our investor club. But today I want to focus more on business ownership.

One way in is to start a business from scratch. I’ve done that a few times—sometimes it worked out really well, other times it was a total disaster. That’s the reality of startups. They require a certain wiring, an appetite for risk, and the ability to move forward without much of a safety net. It’s harder to do when you’re 52, have three kids heading to college and alimony to pay.

Another option is to buy an existing business. The advantage here is that you’re stepping into something that has already worked, which gives you confidence in the viability of the business. But it’s not without risks. Some businesses depend heavily on key people or relationships that don’t transfer, and the ones that truly run themselves tend to be very expensive and often out of reach.

The third option is franchising. It’s not risk-free either, but it does give you a roadmap. If you’re the type who can follow a proven system, your chances of success go way up. You’re not starting from scratch—you’re plugging into a model that’s already been tested and supported. For people who don’t necessarily have the renegade startup personality but want more than just a paycheck and index funds, franchising can be a great fit.

We’ve talked about franchises before, but this week’s episode brings a fresh perspective from someone focusing on non-food franchises. I think you’ll find it really interesting.

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

We’ve seen so many real estate investors saying, where’s another tax advantaged alternative investment that I could participate in? More and more of them are migrating over to franchising. So that’s been a huge trend I would say.

Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. And, uh, before I begin, I wanna remind you that there is something called wealth formula.com. It is the home base of the Wealth Formula Podcast. So if you want to, uh, go check that out, check out the resources.

One of the things you can do there is sign up for the, uh, credit investor club, AKA investor club. See, uh, opportunities gill flow that you might not otherwise see because they are private. As we get here later in the year, more and more opportunities particularly for, uh, potential tax mitigation, lots of real estate, uh, some other, uh, real asset funds that I think you may want to, you may wanna learn about.

So go to wealth formula.com, sign up and um, get onboarded. This is a little building a little bit on, uh, last week, uh, when we talked about, you know, how the wealthiest people in the world. Typically, unless you’re like an entertainer or a professional athlete or whatever, uh, you’re typically going to get there through business ownership or real estate.

Right? Of course, we talk about real estate here a lot and we have a lot of opportunities coming through on, um, on uh, investor club. But you know, today I wanna focus more on that whole business ownership concept because I think it’s something that probably more people could be involved with. Um, you know, but if you do wanna be in business, so there are a few different options, right?

So one is to start a business from scratch. I’ve done that a few times and I’ll tell you sometimes it’s worked out really, really well. And other times it was a total disaster. But that’s a reality of startups. Um, they require certain. Wiring too. I mean an appetite for risk and the ability to kind of move forward without much, much of a safety net.

By the way, speaking of safety net, it’s much harder to do when you’re 52 and I have three kids heading to college in alimony to pay, by the way, ask me how I know that. Anyway, another option if you’re interested in a world of business, is to buy an existing business. The advantage here is that you’re.

Stepping into something that already has worked, which gives you confidence in the viability of that business, right? I mean, it’s a little bit, uh, if something’s been around for a few years, for 10 years, well that’s a pretty good chance you could keep it going. But it’s not without risk because some businesses depend heavily and key people or relationships, uh, relationships that might not transfer.

And then there are, you know, businesses that can truly run themselves out there too. Those are great to buy. The only problem is they tend to be very, very expensive and out of the reach for people. So the third option, um, and I’m sure there are others too, but the third option I’m gonna talk about, again, we’ve talked about it before, it’s franchising, right?

It’s not risk free either, but it does give you a roadmap, you know, if you’re the type who can follow a proven system. Your chances of success go way up. Right. So, and this is actually an interesting thing ’cause I, I think about the types of people who listen to the show and a lot of, a lot of you are highly successful students.

So a franchise is kind of a interesting way to look at, you know, business because then you’re basically studying what other people have already done and you’re mastering it and you’re already really good at that. You’re not starting from scratch, you’re plugging into a model that’s already. Been tested and supported.

So, you know, for people who don’t necessarily have that, you know, have the renegade startup personality, but wanna. Want more than just a paycheck in index funds, franchising can potentially be a really great fit. And again, like we talked about before, if you get into this world, I mean, there’s people who own tons of franchises who end up becoming really rich.

Um, just because, you know, they can sell like a bunch of them and, uh, you know, and stack ’em up and, and get ’em going. Uh, but again, we’ve talked about franchises before. Uh, I just wanted to make sure this is sort of, again, on your radar as an option. Uh, so this week’s episode is kind of bringing a, a perspective from a, a guy who’s an expert in non-food franchises, and we’ll have that, uh, interview right after these messages.

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It’s a refined strategy used by some of the wealthiest families in history, and it uses century old rock solid insurance companies as its backbone. Turbocharge your investments. Visit Wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show, everyone. Today. My guest on Wealth Formula podcast is Jon Ostenson , uh, CEO of Fran Bridge Consulting, and one of the nation’s, uh, top experts in non-food franchising.

He’s a former franchise president of Fortune 500 Executive, and now a bestselling author and consultant who helps investors build semi passive income through scalable businesses. Welcome to the show, Jon. Hey, buck, excited to be here. Yeah. And uh, uh, apparently Jon is a listener of the show too, so that’s, uh, that’s helpful.

He kind of knows what we’re we’re about and what we talk about in the show, so that’s, that’s great. Um, Jon, uh, you’ve been a, I guess a Fortune 500 executive of franchise President, uh, and now you run your own consulting firm. Uh, how did that journey bring you to, uh, you know, focus specifically on non-food franchising?

You know, buck, I like so many others, you know, when they hear the F word franchise, you know, immediately thought fast food. And uh, and I spent many years in the corporate world, had a great run, but franchising was not on my radar ’cause I didn’t want anything to do with food. And uh, really it was when I had the opportunity about eight or nine years ago to step in as president of Shelf Genie franchise system that I realized, hey, there’s a whole world of franchising outside of fast food.

And um, you know, I really fell in love. With the franchise model through that experience and just saw how all these diverse backgrounds could come together under a shared system of support and become successful business owners. Long story short, ended up becoming a franchisee myself of a number of different brands, still am today.

And, um, started my consulting practice about six years ago to help others get plugged in. And, and I’ll start by saying, we’ve got nothing against the food guys. We, we need them. But, uh, in my humble belief, there’s simply easier ways to make money. And I’m happy to go into the reasons why. Yeah, why don’t, why don’t you kind of tell us a little bit about that?

I mean, I mean, just the differences and you talk specifically about sort of specializing this non, uh, food world. I mean, what. What’s the big difference there? Yeah. You know what? You can do really well with food if you’re in with one of the big brands. But, you know, oftentimes if you get in with a smaller one, it is just, there’s just a little more risk associated with it.

Um, you know, consumer whims oftentimes change, you know, I, I joke the frozen yogurt was big until it wasn’t. Right. And so that’s a piece of it, but you’re really making a big CapEx investment in most cases. You know, it’s, those are not cheap to get into. And then once you’re in it, you’ve got, you know, long operating hours.

A lot of hourly employees, uh, oftentimes the margins aren’t that good. So, uh, when you, you know, put that side by side with some of the opportunities that we go deep in things like home and property services, health and wellness businesses, uh, B2B services, you know, businesses that cater to kids or to pets or to seniors, you know.

I’d say the general theme out there is understandable, cash flowing businesses, that’s what people are gravitating towards. And you know, food just has a lot of moving parts and a lot more complexity. So most people that we work with say, Hey, we want nothing to do with food, but we wanna go deep on these other ones.

You know, I wanna start, I wanna ask you some very practical questions because I think, you know, we, as you know, we’ve discussed franchises on the show. Uh. Few times. Um, and I think people are still kind of, a lot of people are interested, but, you know, they kind of want to know a little bit of the nuts and bolts, you know.

Can you give us a little bit of a sense for, you know, when we talk about non-food f franchises, you mentioned they’re, they might be a little bit less expensive to get into, uh, than food franchises. You know, what, what kind of investments are we talking about? I mean, for someone who’s. Um, you know, high paid professional, obviously you’ve, you’ve got some capital, but you also don’t wanna spend all your, of your investible capital in one year on a franchise because inherently, I mean, it is a business.

Uh, it may have a higher likelihood of succeeding than a pure startup, but it’s still, there’s still possibilities of failure. So, so, you know, what are we talking about in terms of, uh, startup costs for. Your typical non-food franchise that people can expect. Yeah. You know, and some of these non-food categories aren’t cheap, right?

I mean, we just had clients that bought 10 trampoline parks at $3 million each year. You do have some large ones. I’d say probably 75 to 80% of those that we work with. When you look at the franchise fee and the startup cost and several months of working capital, all built in your investment range is oftentimes in the.

I’d say two or $300,000 ballpark in most cases. Um, you know, if it’s more of a larger customer facing retail play, then it might be a little bit larger, four or 500,000. But a lot of our clients are gravitating towards more service-based businesses. You know, where you can get in, maybe get multiple territories for that two or 300,000 mark.

Some people are using all cash to fund it. Most are using SBA loans where you put in 20%, you know, fund the other 80%. Banks obviously prefer lending to franchises. Um, some are using a retirement rollover. It’s what’s called the Robs program, ROBS, where you can roll over and you have to purchase the business as a C corp or set it up as a C corporation, purchase it with a retirement plan.

You can pay yourself a salary, somebody’s that in conjunction with sba. There are a lot of ways to make it happen, but no, you’re exactly right. I mean, business ownership. There’s a reason why you can make. Inherently larger returns, it’s because you’re also putting in a little more effort and there is risk associated with it.

Right? Um, franchising does de-risk it in a lot of ways. You look at the sheer numbers, but end of the day it does take effort and. I always tell people if it was easy, everyone would be doing it right. Um, but it’s obviously something the government incentivizes. They want you creating new companies, new jobs, and so there’s a big tax play with it as well.

Um, but yeah, no, it’s, it’s not easy. And, and when you talk about tax play, you’re just mostly talking about like bonus depreciation, that kind of thing, or? Yeah, if it’s heavy, heavy CapEx business, certainly section 1 79 and the whole bonus side, uh, with the new tax bill that gets extended. But, um, no, it’s, it’s things like, I mean, for me, I, I pay my kids in the business now.

They’re all elementary age, but I’ll put ’em in my ads, they’ll ship my books out, that sort of thing. I then take some of that, roll it into a Roth IRA for each of them. The other part I pay. Back for private school tuition and I’m paying stuff, you know, there are things you could do if I get a tax write off for the business.

Um, you know, certainly all the home office and travel expenses, you know, can be justified as write off. So there’s just a lot of things that as a high paid W2, you don’t have access to in the tax. Tax code. Yeah, yeah. Um, do you think. Uh, you know, obviously when you go, when you look, you know, I’ve, I’ve sort of looked through franchises in the past.

Um, not too seriously, but just to kind of get a sense. But is it your sense that the more safer, the more stable, the better likely to hit? Franchises generally tend to be more expensive. Not necessarily. No, I think it’s it. A lot of it comes down to the model. How much equipment is needed, whether you need a retail storefront, how many employees.

No, I’d say the franchise fee, what you’re actually paying the franchisor is pretty consistent across the board. Um, you know, franchising is like every other industry out there in that you’ve got good players and you’ve got ones that are not as strong, ones that don’t provide as good of support. And that’s where we come in to try to help identify the, the strong ones.

But, um, no, it really is similar. You know, franchising’s not right for everyone. You know, there are. People that we work with that I have to explain, you’re too entrepreneurial. You wanna put your thumbprints all over it, it’s not a good move for you. Um, but if you have some degree of humility and you recognize you’re not always the smartest guy in the room, um, you know, I think it, it truly is a better path than business ownership for most people.

So, um, but again, it’s not right for everyone. Not everyone’s cut out to be a business owner. Um, we see all types. You mentioned, uh, SBA financing, but these kinds of things too. There is. When we talk about cost, there’s sort of the upfront cost, but a lot of times it takes a year or two years to get something up and running.

Right. So how do you, how do people deal with that? ’cause they’ve got a lot of, you know, they’re carrying a lot of costs for a long time. Mm-hmm. I’ve had multiple conversations on that topic already this morning, and everyone’s situation is different. Um, but I, I, I always want people to go in eyes wide open.

You know, we have a whole discovery process where they can really ask questions, learn more, talk to existing franchisees in the system, hear about their ramp up, what that was like with their profitability. Looks like. Certainly the franchisor has their financial representation, but always tell our clients, let’s go conservative and assume it does take longer to.

To get to the break even point to that point of, you know, I call it the oxygen of profitability, where you have that monthly p and l that’s in the black. Um, so no, it it, a lot of models, you know, you may not hit that profitable month until month six or month ninth, uh, the ninth month or even a year into it, depending on the business.

Yeah. There are some that, and sometimes it’s, uh, and, and then sometimes it might just take a year to even set it up. Right. I mean that, that pretty. Typical to go from soup to nuts and starting in about a year, you know, from your first call with the franchisor. I’d say the process usually takes about two months, uh, to, you know, get to that point of signing the franchise agreement.

From there, if it’s a retail business, then it is going to take site selection and build out, which takes time. Typically it’s not a full year, but sometimes it can be. Um, oftentimes if it’s a service-based business, which at least half of those that we work with are getting into, and I’m happy to give examples.

If it’s a service-based business, you can be up and running oftentimes two or three months later. So it does condense the, the time period. Um, you know, so we’ve, we’re talking about this in the context of Yeah. Maybe diversification also, uh, you know, in the context of saying. There’s, you know, this is an earning opportunity.

I know we we’re calling it semi passive. Um, but in order to do that, you have to justify that with the type of returns you’re gonna get. And I know you can’t really give projections in general, but how should people think about this in terms of, you know, if they’re getting. 8% in real estate. And you know, right now the stock market people, I mean, are getting a lot more there.

Obviously that’s a volatile situation. It always is. How, how do you justify this to somebody who’s, that’s what they, they typically do. Yeah. You know, the juice has to be worth a squeeze, right? For the e effort that’s being put in. Absolutely. And, and I personally invest in real estate directly and through syndications and energy funds and private credit.

I’m an all of the above guy myself, and, and a lot of our clients are too. Uh, we like the role that business ownership does play in the portfolio. That being said, most franchises will market themselves as, you know, you can be an owner operator running the business day to day, or you could be semi-passive.

Some call it semi-absentee, some call it executive model. The idea there is that you put a manager in place, day one to run the business. Now, my preference is to call it semi involved because I think that’s a better term for it because you’re not gonna outsource the running of your business entirely.

Right? And if you don’t have the right person in that seat, you’re gonna find yourself leaning in until you do. So if. Countless case studies we have of clients who are running the business as executive model, but they usually weren’t on day one entirely. It takes a little while till they get to that point, they can really pull themselves back.

So I always wanna give that, uh, upfront disclosure, but no, from a return standpoint, I mean, some of these property services franchises as an example, you, you’re all an investment. Call it 200,000 in round numbers. A lot of these businesses can then return a hundred, I’m sorry, a million dollars in revenue, oftentimes at a 15 to 20% bottom line margin, sometimes even north of that.

So let’s just call it 20% for round numbers. That’s a $200,000. Payback. Maybe it’s year two. You know, it’s not necessarily year one, but I mean, you’d call that a hundred percent return on your invested capital. Now again, you’re putting in effort, that’s why you get, you know, an outsized return. But it’s interesting.

I mean, that would be a hundred percent. Um, and you’re building an asset that you’re gonna be able to sell one day as well. So when a lot of times people are looking to leave their W2 jobs to run a business and they say, well, I’m making. 400,000 in the corporate world. I can only make, you know, two 50 here as a business center.

But then when they start layering the tax benefits they get and the fact that they’re building an asset that they’re gonna be able to sell one day, it starts to justify it. Yeah, yeah. Um, let’s talk a little bit about, you know, what it looks like. I mean, we, again, just a review. What does it look like to be, uh, somebody who owns a franchise?

You know, you, so you go into one of these, you sign your franchisor agreement, you’re going to essentially, uh, you know, probably for, you know, at least six months, you’re gonna be like getting something up and running. Right? A lot of times people will be hiring managers and stuff like that at that point.

What is the, what’s the typical route? Like what, what do you see like people doing, you know, just put putting people into the shoes of somebody who’s going into this process? What does it look like? Yeah, so first off, at the very beginning, I encourage people to date around to have conversations with multiple brands.

I mean, we usually have our clients evaluate a dozen opportunities that are available in their area. That’s where the magic starts happening. You start to prioritize the characteristics you like in the business or don’t like, and compare and contrast. Um, they’ll usually pick three or four to talk with.

So again, once they through that process, they decide on one to move forward with, um, you know, they sign the paperwork. Alright, what happens next? Typically, the franchisor has almost like a checklist of things that they’re doing on your behalf and things that you need to do in the months leading up to that launch of the business.

Um, and again, it depends on the type of business, but part of that would be training. You’ll, you’ll probably do some online training. You’ll probably get with a franchisor and in person for a period of time at their home office. Maybe that’s a week. Uh, you know, you’re able to talk to other franchisees in their system.

It’s kind of this built in Mastermind where you’re exchanging best practices, learning from each other. Hey, where did you find your people? Hey, how are you compensating them and incentivizing them? And so. If you’re able to take the franchisor’s job profile and then kinda layer in some real world experience from other franchisees to go out and find that team, um, you know, and I’d say start doing some secret shopping too.

You know, get to know the competition. How are you gonna differentiate in the market, um, along with the franchisor’s training. So, you know. If it were getting really brass tacks here, let’s say it’s a service-based business, you would then run some sample appointments with friends and family, get your feet wet, uh, get used to it, and then, um, or have your team do that and then, you know, start launching to the market.

But the franchise order’s gonna be running a lot of that opening marketing that’s gonna make the phones ring, draw people in. Usually it’s kind of a. Franchisors handling a lot of the digital marketing and if there’s any print, that sort of thing. And then you’re handling a little bit more of the organic, you know, maybe that’s doing some networking, getting involved in the Chamber of Commerce, getting word out there locally on social media post.

Um, so it’s a combination of the two. Um, you know, but the franchisors there for support and I think the, oftentimes it does get overlooked that community of other franchisees. It’s cliche to say, but you’re in, in business for yourself, not by yourself. There’s a group of people that are living the same thing day in, day out, and so you really are learning from each other.

And the more you lean into that, I think it fast tracks your success. Can, is there ways to find out likes, I mean this is, uh, I, I’m assuming all under NDA, but data in terms of which franchises? Um, I think, I think the big thing that most. That anybody who’s gonna get into this is like, okay, I’m gonna put a bunch of money into this and then it’s gonna fail and I don’t want that to happen.

Of course, there’s no guarantees to that. However, is there data to show in any given franchisor if they, uh, you know, what their track record is in terms of, you know, they’ve started, uh, a hundred of these and 98 of them did well, or 75% did well, or something like that. Uh, is that data available? Every franchise system has what’s called an FDD Franchise Disclosure document.

It gets updated every year. Typically in the April, may time period, they’ll come out with a new one and release it. And you know, they have audited financials in there. You know, they’ve gotta cross their ts, dot their i’s, I mean, there’s a lot of legal liability if they don’t do it right. So, you know, it’s full disclosure.

They’re 23 sections within it. There’s what’s called the item seven, where, where it’s your all in investment range broken out. Your item 19 is where they break out the financials, historical financials of franchisees. Now, it would be great if everyone did it in the exact same format. They don’t. And so, um, you know, usually you, you get good information from the item 19.

It’s, it’s audited. Typically, you still have some questions after you review it. A franchise order typically does not have their p and l of all their franchisees locations. So they’ll show the corporate p and l to show how the model is set. But then they’ll show the revenue of all their franchisees. And so you kind of extract that proforma on your end as well as getting talk to other franchisees in the system.

But no, to your point, there’s a section in, uh, the FDD where they do talk about any openings they had, any closures that they had. They list the contact information for all the franchisees. And so again, you have historical information, but also resources that you can reach out to to learn more. How about.

You mentioned, obviously you have an asset that you can sell. What if you’re looking to buy an asset, like buy instead of a skip the startup process? I mean, how does that work? If somebody’s like, yeah, I like the idea of this, but I want to skip the, you know, startup thing, and maybe I’ll get a little bit less return.

But that, that, that creates a lot more potential stability. How does, how does somebody do that? So, within the franchising lane, we do handle resales, uh, franchises. It’s a small percentage of what we do, and here’s why. It’s not that there’s not demand out there for the resales, but there’s lack of supply.

So what happens is franchisee decides they wanna sell their business. The most likely buyer is another franchisee within that system. It’s what I call internal m and a. They’re going to get first rights, essentially. And, um, that’s a way for other franchisees to expand. So oftentimes those good deals, if it’s a good one, it never hits the open market.

The only ones that hit the open market are ones where maybe someone bought and never did much with the business, right? So there’s nothing to buy. And so as a result, we just don’t have a lot of supply, uh, for that. But, uh, internal and m and a is really common. But it’s interesting, there’s so many thought leaders out there today talking about buying existing businesses, you know, buy and build and um, you know, and that can be a great proposition.

However, here’s what I see from where I sit. I have people reaching out every day saying, Hey, we’ve been looking for existing businesses for four years, five years. We hired an analyst full-time to go find businesses for us. Due diligence didn’t shake out. Someone else outbid us. I continue to hear the same through lines over and over again.

All of that time they could have spent building a business. Right? And so it, it just takes a lot of time to find that right business. And even once you find it, there’s inherent risk to it. You’re assuming everything on paper is gonna continue as is. But whenever you inherit someone else’s team and culture.

You’re gonna lose some key employees or key customers, it’s almost inevitable. And here you paid a premium for that business. So it’s interesting. I had conversations with a couple of past clients this past this past week who bought franchises with us two years, three years ago, and are now returning for their next round, their next purchase, to build off of what they’ve already started.

So again, they didn’t spend all this time looking. Instead, they got in the game, started building knowing one, that’s not the only thing they’re ever gonna do, but let’s start it with a good foundation that we can always build off of. By acquiring other franchisees, by starting our own business, by buying another business, but they kind of buy some time while building.

Yeah. Um, what, you know, uh, the one thing I was gonna ask you is that, you know, uh, you’ve sort of got your finger on the pulse of, of what things seem to be working, whatnot. What, what, uh, sectors of non-food franchising are showing the most promise right now? Yeah. You know, I just finished speaking at a private equity conference the other day where the feedback was, you know, the private equity firms were saying it’s sexy to have a franchise in their portfolio.

Now. They, they love the model. Most of them are gravitating towards things like home and property services, sometimes non-sexy, non trendy businesses, things that AI is not gonna replace. Maybe ai, AI will enhance how you do something versus the low bar competition in, in a given niche. Um, there’s just so many niches in home and property services that people oftentimes overlook that they love.

And some of the businesses I’m invested in, I’ve got. I have an asphalt paving and line striping franchise. You know that parking lots. I’ve got another one that provides temporary walls around renovation projects and construction sites. Kinda like an equipment rental type business, you know, B2B. I’ve got another one that, um, you know, provides custom shelving, uh, you know, in your kitchens and pantries.

And then I have one in the health and wellness arena that provides custom orthotics. So 3D printed orthotics for people. So I would say property services has probably been the number one, um, out there in the market for diverse backgrounds. We have lawyers and doctors and corporate executives with no experience in the space, but saying, Hey, I see an opportunity.

I’m gonna follow the playbook that the franchise order provides and go down that path. Um, health and wellness is big. The theme is what are people gonna spend on regardless of the economy? And so it’s everything from kids, youth, soccer and tutoring to, uh, tech grooming to in-home senior care. There are a couple in the senior space that we really like outside of in-home care, where you don’t have to have a large team.

It’s more of. Consultative type positions. Like you’re the expert in your community on all the senior facilities. You’re a placement consultant or a senior fitness where they bring you in. Uh, you know, you have a team of trainers that goes around to different facilities and, and trains and, and, you know, helps with stretching and exercise programs.

So there’s just all these different niches that you wouldn’t think about it unless you saw him. Uh, yeah. Right in front of you. Uh, and you, you know what I like about what you just said too is I always tell people like it’s. I’m, I’m a former cosmetic surgeon. Right. And people get, I’ve had people go through franchising and stuff like that, and they start looking at, you know, these beauty businesses and stuff like that or whatever, because they sound a little bit more sexy.

And then my, my impulse is always to be like, boring. Please keep it boring. Because it’s like you don’t want something that is just people can cut outta their lives as second the economy. Um, goes south or, you know, that they just don’t need, and that there’s enormous competition in. Um, is that, I mean, it, those are the kinds of things that you’re looking at when you’re, you know, when you’re focusing on what to do.

Yeah. It, I joke that non-sexy is the new sexy when it comes to business ownership. It, it really is. And that’s what people are looking for. We work with a lot of doctors and physicians and dentists and, um, you know, they, they wanna do something that stretches them intellectually and they love that, you know, idea of, you know, being a business owner and franchising is just a perfect fit for a lot of them.

Um, but most of them are not, not looking to stay within health. They say, we’re passionate about this, but we wanna do something different. They’ll get into a restoration business or a gutter business or things that aren’t going outta style. So that is a very common. Thread exactly what you brought up, that we want a business that’s going to do well regardless of the economy.

Yeah, yeah. How, um, tell me a little bit about what, you know, today’s macro trends, how that’s affecting everything. We’ve got tariffs, we’ve got high interest rates that might start ticking down, but who knows? We’re looking at a labor market that. Looks kind of very suspicious for recession, uh, recessionary ai or at least, you know, a contraction in, in, in job, the job markets.

And then as you mentioned, ai. So what are the macro trends that you think about when it comes to this kind of thing? How do they affect, you know, some of the decision making? I’d say in the industries that we focus in, tariffs haven’t had as big of a play interest rates have, and where I’ve seen interest rates play out, we’ve seen clients do as many SBA loans as ever.

It hasn’t really affected that. And of course, that’s tax deductible interest. Where we’ve seen interest rates is real estate investing. Obviously, the real estate market has slowed down. There aren’t that many great deals to be had. We all know, uh, the, the macro story there. We’ve seen so many real estate investors.

Saying, where’s another tax advantaged alternative investment that I could participate in? More and more of them are migrating over to franchising, so that’s been a huge trend I would say. Another thing on the labor market. I mean, the Wall Street Journal has an article at least every two days, if not every day, on AI displacing jobs and how these big companies are, you know, broadcasting and proud of how much they’re, how they’re doing more with less headcount.

Right? And so where I sit, it’s on the ground in all these communities, all across America. I’m hearing the same thing. I have so many mid-level and upper level clients, they. You have a background in technology or they’ve been in consulting and so many of them are gravitating and saying, Hey, we know our days are numbered.

Or you know, all of a sudden we’re having to manage a team twice the size without any increase in pay. We’re having to do more with less. I had a client today that said, Hey, I’ve got a great technology background. I’ve been doing technology recruiting forever. I don’t wanna learn the whole AI space. AI space.

That’s a different ball game for a younger man. So. It is interesting. You see these through lines and a lot of them are saying, I don’t want to go work for another firm. I’m ready for a pivot. The P word pivot, and they’re coming our way. So I’d say that’s the other big trend that we’re seeing people looking to make that jump.

Yeah. I’m, I’m surprised the SBA loans are, are still, as you know, that they’re hot as they, I mean obviously they’re very favorable in terms of loan to value or I’m sorry, they’re, yeah, they’re loan to value, but. Interest rates, man, I was, I mean, I was looking at acquiring a business not too long ago and I was just like, the sb you know, interest is so high.

I mean, all in all, when I was looking at it, it was gonna be close to like 10%. And um, yeah, I’m surprised that doesn’t make people. You know, think twice. Yeah. I, I’d say first it probably did, but really I think we’ve become used to it. Yeah. And maybe we’ve become numb to it. So 10%, you’re exactly right.

That’s what we’re seeing out there as well. You know, again, that’s tax deductible. I keep going back to that, but that kind of nets you down to call it six or 7%. Right. In most cases you can pay that loan back early once you’re cash flowing. So it’s temporary in theory. Um, you know, but people like the idea of leveraging.

And, and again, a lot of those real estate investors are used to leveraging. Yeah, yeah, yeah. Of course. Great. What, uh, uh, what else have I not asked you that do you think would be useful for this audience? Yeah, you know, I think we hit on a, you know, the macro trends, a little bit about the financials. Um, you know, what I found is it just gets people excited when they start looking at real opportunities, you know?

Yeah. Like I said, most of our clients will look at a dozen or so businesses. We’ll share with them, uh, you know, the top ones in their market. Nine times outta 10, they end up purchasing something in an industry that was never on their radar. So I think, again, going back to, there’s so many niches out there, and the challenge is if you start Googling, you’re gonna see a top 50 list or a top 100 list of franchises.

Companies are paying to be on that list. And so it’s just so much noise out there. And so that’s where we come in and you know, I think, you know, our model bucket’s entirely free to work with us. We get a referral fee from the brands. That’s passed on to our clients. It’s very much like a real estate broker and, um, yeah, we love helping.

So no, I think you did a great job of kind of hitting on all the main topics that I would’ve mentioned. Yeah. How do we get in touch with you? Come out to our website, fran bridge consulting.com, FRAN bridge consulting.com. We’d also love to share a free copy of our book, Non-Food Franchising can be a great resource, uh, to read through.

So just share your email address out there and we’ll send you links to the book, uh, to download. And, uh, if you’d like to take a next step and book a call, we’d be happy to chat. Fantastic c Jon, thanks so much for being on Wealth Formula Podcast today. Enjoyed it. Thanks, bud. You make a lot of money, but are still worried about retirement.

Maybe you didn’t start earning until your thirties and now you’re trying to catch up and meanwhile you’ve got a mortgage and private school to pay for and you feel like you’re getting farther and farther behind. Good news. If you need to catch up on retirement, check out a program put out by some of the oldest and most prestigious life insurance companies in the world.

It’s called Wealth Accelerator can help you amplify your returns quickly, protect your money from creditors, and provide financial protection to your family if something happens to you. The concepts here are used by some of the wealthiest families in the world, and there’s no reason why they can’t be used by you.

Check it out for yourself by going to wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Hope you enjoyed it. And, uh, again, uh, you know, I think the moral of the story here in the last, you know, episode or two is that you know, if you want a different life, you have to do things differently.

If you want a different level of wealth, you can’t do what you’re doing now. Figure out you know, what it is that you want in your life, and then look at where you’re at now and see if you can draw a straight line. If you can’t draw a straight line, then you gotta figure out. Well, what do I gotta do so that at least I have a trajectory to even have a chance of getting to where I want?

That is the moral of the story. And that is it for me. This week on Wealth Formula Podcast. This is Buck Joffrey signing off.

526: The Wealth Ladder Sep 28, 2025

If there’s one thing that separates the truly wealthy from everyone else, it’s their relationship with risk.

Not blind risk. I’m talking about conviction — the ability to see an opportunity before everyone else does, to lean into it while others are frozen, and to hold through the storm until the payoff is undeniable.

The extreme example is Bitcoin. In 2012, when it was trading for less than the price of a cup of coffee, most people laughed it off as internet monopoly money. But a handful of people had conviction.

They understood the asymmetric nature of the bet — the downside was capped at the small amount they put in, while the upside was exponential. Those early adopters didn’t just make returns; many became billionaires.

Of course, most people hadn’t even heard of Bitcoin in 2012, so that might not have even been an option for you. So let’s take another example that you almost certainly did live through.

Real estate after the Great Recession in 2008 was radioactive. Nobody wanted to touch it. Yet those who bought when fear was at its peak ended up riding one of the longest real estate bull markets in U.S. history.

Data from the National Association of Realtors shows that home prices more than doubled from 2012 to 2022 in many markets. Imagine the rewards of being on the buy side in 2012.

I’ve said it before and I’ll say it again: I believe we are in a similar scenario with real estate right now as we head into a descending rate environment following a real estate bloodbath.

Properties are severely discounted, and values are almost certain to go up as rates fall. But you have to see the big picture and not be scared. That’s not easy to do when everyone else is.

Real estate moguls and business owners are the ones most likely to take their wealth to the next level. Real estate is accessible to you — and so is business ownership.

Look at the Forbes billionaire list and you’ll see a pattern: nearly 70% of the world’s wealthiest people are business founders or owners. They didn’t get rich clipping coupons from the S&P 500.

They got there by creating or buying businesses that became valuable, saleable assets. The risk was obvious: most startups fail. But the payoff for the ones that succeed dwarfs anything you’ll ever get in your brokerage account.

Now, the reality is that most high-paid professionals never play in this arena. They’re comfortable and don’t want to rock the boat. Some call it the “golden handcuffs” — you make enough money to feel comfortable, but that same comfort prevents you from ever taking risk. And you know what? That’s totally fine.

Just know that doing your 9-to-5 and investing into your 401(k) is not going to create life-changing money. If all you’re looking for is life-sustaining money, keep doing what you’re doing.

But ask yourself this question: What’s the life you dream about? If it’s the life you already have, then congratulations. If not, are you on a trajectory that even makes it possible to get there? If not, you’ve got to change course.

My guest this week on Wealth Formula Podcast has done a great deal of research on the wealthy and has written a book based on what he has learned.

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

An s and p 500 index fund would’ve outperformed like, you know, 75% of active managers. These are people who, it’s their job, they’re paid and compensated to try and beat the market, and they can’t.

Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast, coming to you from Montecito, California. And, uh, before we begin today, wanna remind you. There is a website associated with this podcast. It’s called wealth formula.com. Go check it out. There’s lots of resources there for you, uh, including, uh, a chance to join our credit investor group.

Our credit investor group is exactly what it sounds like. It’s a investor club and uh, it’s basically an opportunity to see deal flow where you might not otherwise see. I do think it’s, uh, you know, uh, following, uh, Richard Duncan’s, uh, podcast last week. I think it is something that you really ought to be thinking about.

We, I mean, even, even Richard, who generally is pretty negative about, uh, the economy and, and that kind of thing really sees a big boom, uh, and sort of a takeover of the Trump, uh. Take over the Fed by the Trump administration. Forcing rates to go down. Descending rate environment means increasing asset prices.

That’s just what it is. And if the Trump administration does what it wants, you’re gonna see rates going down, asset prices going up, liquidity going up, dollar going down. What that means is asset prices skyrocket. Dollar falls. I mean, listen, if you’re not buying real estate, fine. I don’t buy real estate here.

If you’re in our credit investor club, you know, we we’re continuously, uh, going after these distressed assets. Um, and, uh, but they may not be your cup of tea. Maybe go buy something yourself, you know, buy some stocks or buy some, uh, buy your own, uh, real estate, uh, whatever, whatever works. But I do think that.

Again, I’m not trying to give you financial advice. This is commentary. My commentary is this, is that I think the playbook that the Trump administration is trying to follow is pretty clear. Now it’s possible they, they’re unable to do it, but I doubt it. I mean, they’re gonna fire their way to controlling the Fed and if they can fire their way to controlling the Fed, they can control the Fed interest rates and they can control the bond market through quantitative easing.

So, anyway, just a reminder on that. I just feel like people need to wake up on this one. Okay. Let’s talk about today’s show. It’s, you know, it’s about, it’s a little different. It’s about wealth, right? So, um, I wanna talk about generally the idea of, you know, building substantial wealth and, and what does that even mean?

Right? Well, I would just say this, it’s the, it’s life changing, right? So that’s gonna be different for different people if you. Are going from, uh, you know, $50,000 a year job and all of a sudden you’ve got a million bucks. That’s life changing, right? So, uh, if you make a million dollars a year and you know, all of a sudden you’ve got, uh, eight figures of wealth, um, that it, that can be life changing, right?

Um, or going from, you know, eight to nine figures or whatever. These are life changing things. That’s what I’m talking about. You know, if there’s one thing. That separates those sort of truly wealthy from everyone else. It’s a relationship with risk that is different. Now, I’m not talking about blind risk, I’m talking about conviction.

The ability to see an opportunity before everyone else does, you know, to lean on it while others are frozen and to hold through the storm until the payoff is undeniable. Okay, so the extreme example. We’ve been talking a lot about Bitcoin lately, right? So in 2012, Bitcoin was, uh, trading for less than the price cup of coffee.

And I think it’s, uh, as of this, um, I’m recording this a little earlier than it’s being released, but it’s at about 117. I think Q4 is gonna be huge. So who knows? By the time, uh, by the time this comes out, it could be greater than 117,000. It could be a lot less, who knows? But anyway. Hell of a lot more than a cup of coffee.

Let’s just put it that way. Okay? But guess what? People laughed it off. They were laughing at this stuff. Even through 2017 when I first kind of got into this world myself in the bitcoin world, people were laughing. They thought it was a joke. They called it buffet, called it rat poison. Blah, rat, rat poison squared.

It wasn’t just even rat. But guess what? There was a bunch of people, not a bunch, but there were, there was handful of people who had crazy conviction, these Bitcoiners, right? And even, uh, you know, they started off, maybe they had a few hundred bucks or a few thousand bucks they put into it. The next thing you know, they saw that grow into like, you know, six figures.

And then they still didn’t sell. Then they saw it had their money go into the seven figures and they still didn’t sell, and some of these folks even became billionaires. It’s crazy. Crazy. What kind of conviction that takes. I mean, I don’t think, man, I don’t think I’d have that kind of conviction. If I saw, if I saw a hundred acts, I think I would kind of probably bail, to be honest.

So maybe I’m, you know, I’m not wired to become a billionaire, so who knows? Um. Got many zeroes to go before I could, uh, call myself that Anyway, so, uh, of course, you know, most people and, and myself, I think maybe I heard about 2000 Bitcoin in 2012, but. I think I was mostly hearing Peter Schiff bash it or something like that.

So then I completely went the other way. But you know, most people hadn’t heard of it then. So it probably really wasn’t realistic for that to, to use that as an example of conviction, because if you’d never even heard of something, then it’s hard to have conviction about it. So let’s take something that’s, well, I know, I know pretty much all of you have recollection of, and that is a great recession of 2008.

And guess what? Real estate was radioactive. In fact, I mean, kind of almost like now, right? Like where, you know, there was this bloodbath and all of a sudden nobody wanted to, you know, people were, people were all over it and then nobody wanted to touch it. Yet those, uh, who bought when the fear was at its peak.

Ended up rioting one of the longest real estate bull markets in US history, which really only ended like, you know, 20 22, 20 23. But it, there was a crash. There was a big crash. Now, data from the National Association of Realtors show that home prices, uh, more than double from 2012 to 2022 and many markets.

Now imagine the rewards of being on the buy side in 2012. If you had that kind of. Conviction. I’ve said it before and I’ll say it again. I actually think we’re in a very similar scenario with real estate right now as we head into this. You know what, you know what I keep calling this descending rate environment with this, uh, uh, Trump takeover of the Fed.

I mean, it’s the same kind of thing. Maybe it’s not quite as extreme as what you saw in 2008, 2009. That’s, that’s kind of crazy times, right? But, but you’re seeing a similar thing where you had this, you know, bloodbath and then now people are kind of. Skittish about getting back in. They don’t know if it’s a good time.

And at the same time, you know, assets are being sold at, uh, you know, 30, 40% discounts compared to just a couple of years ago. You know, the prices are reset. They’re making sense at the current interest rates. And then what happens? Interest rates go down. Cap rates compress, boom. We’re off to the races, right?

But you have to see the big picture and not be scared. And that’s not easy to do when everyone else is. I get it. But just remember, real estate moguls, business owners are the ones that really, I mean, look at the NFL owners, right? They’re either big real estate moguls or they’re business owners. That’s basically it.

Um, you know, real estate obviously is accessible too, but so is business ownership. And if you look at business ownership, the Forbes Billionaire List, you’ll see, you know, nearly 70% of the world’s wealthiest people are business founders or owners. So they didn’t get rich with the stocks, bonds, and mutual funds, and the s and p 500.

By the way, I’ve changed my tone on stocks. I am not a hater. Okay? I’m not a hater. I’m just saying, you know, if you want different results, you have to do things differently. These people became billionaires because they were creating or buying businesses, uh, that became valuable. Saleable assets. They, they did the work.

The risk was obvious, right? But the payoff for the ones that succeeded, um, you know, dwarfed anything that you could get just by investing in, like most people do. Now the reality is that most high paid professionals never play in this arena. And the reason for that is not because they’re not smart enough, it’s just that they’re comfortable and don’t wanna rock the boat.

Some call this the golden handcuffs, right? You make enough money to feel comfortable, but that comfort is a little bit, you know, too comfortable, and it prevents you from ever taking risks. And you know what? That’s totally fine. It’s totally fine if you just don’t really care. You know, just, you know, just know that doing your nine to five and investing in your 401k, it’s not gonna create life-changing money.

Nobody ever got rich from investing in a, you know, diversified portfolio of stock sponsor mutual funds. People don’t change their place in the economic hierarchy of this country by doing that. If all you’re looking for is life sustaining money, keep doing what you’re doing, and it’s probably easier if you are not that ambitious.

The only thing I’m asking you to do is to ask yourself the question, you know, what is it that you really want in your life? What is it that you dream about, right? As far as you know, you only got one of them, and if it’s the life you already have and you are totally fine with it, you don’t need. Um, dream any further than just keep doing what you’re doing and you can just listen to this podcast and think we’re a bunch of jokers.

Who are the dreamers out there? Um, but if not, you know, uh, the, the thing you gotta do is you have to look at your trajectory, right? Like, if you’re doing something right now, that, and, and there, there’s no motion or any sort of, uh, direction. If that could possibly get you where you wanna be, then you gotta change course.

Right. Anyway, that’s just a little pep talk for me. My, uh, my guest this week, um, on this week’s podcast, he’s done a lot of research on, on the Wealth. He’s written a book on what he’s learned, and I think it, uh, gives a little bit of backup to what I’m talking about, so we’ll have that right after these messages.

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It’s a refined strategy used by some of the wealthiest families in history, and it uses century old rock solid insurance companies as its backbone. Turbocharge your investments. Visit Wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to Show Everyone Today my guest is Nick Maggiulli.

Uh, he is a Chief Operating Officer at WR Hols Wealth Management. He’s also the author of Just Keep Buying and runs the blog of Dollars and Data where he breaks down personal finance and investing using real world evidence. His focus is on what the data actually shows about building and keeping wealth.

And that’s exactly what we’re gonna talk about today. Uh, welcome to show Nick how. Good. Thanks. Having me on. So let’s, uh, let’s start with this. You’ve dug, uh, I guess you’ve dug into, you know, decades of financial market data and from all that work, what are the biggest myths about building wealth that the data, uh, just doesn’t support.

So I think the, the one I’m gonna focus on the most is that cutting your spending is the way to get rich or build a lot of wealth. And for some people that’s definitely true, but it’s the, it’s a very, very small minority, a very small percentage of people where that actually tends to be the case. And if you look at the data, overwhelmingly high wealth is correlated with high income and vice versa.

So it’s very rare that someone has high income and low wealth. Or someone has, uh, low income and high wealth. Right? So those are incredibly rare, and I’ve talked about this a lot, um, in my work over the years. It’s in my new book, the Wealth Flatter, and the second chapter, I just dig deep on income and I can say I basically take wealth and I break it into these six levels.

And then across the levels, within each level, as you kind of move up, the wealth flatter, the amount of income, the median income in each one of those levels just increases, um, pretty significantly as you move up. Mm-hmm. Sure. I mean, certainly I, I mean I’m, you know, I mean, if we’re talking about Starbucks and those kinds of things, uh, for, for high income people, that’s not gonna make a difference.

But, you know, certainly, uh, I mean there, there is probably a little bit of that. Don’t you think? I mean, like, if you take the example of professional athletes and you hear these stories about people making a ton of money and then just blowing through it and all that kind of stuff. Yeah, no, those, those definitely are the exception.

And once again, professional athletes are. You know, like they’re like the exception of the exception of the exception in so many ways. They’re very visible to us, and so they, it feels like they’re very normal. Like these are very normal occurrences, but they’re, they’re definitely not. And that’s, that’s the thing to keep in mind, right?

And so once you actually look at the data, like I think it’s like 95% of people who are, 95% of households that have a income over $200,000 a year have a net worth over $200,000 a year. Now, once again, $200,000 is not a lot of money. Doesn’t mean you’re super wealthy or anything like that. But at the same time, like.

That shows that there’s very, very few people that have an income of that high or higher and are broke. It just, it’s rare. It’s very rare. And that if you know, you probably know someone like that. I know people like that, but they’re incredibly rare. Most people that have a good income aren’t going crazy, and even if they are spending a lot, they still have some access to save.

Yeah. Yeah. Fair enough. Okay, so if someone earns a high income. Is late to the game of investing. What does the evidence say about how much they can realistically catch up? It really depends. I mean, what is high income? How much time do you have? I mean, those are all, there’s all these levers you have, right?

You can really think about building your wealth. You have these different levers, right? You have time. So how much time can you go and, and, and save, right? You have your savings rate. How much can you save, right? And that’s influenced by obviously your spending, but also your income. So the higher your income all else equal, the more you’re gonna save, right?

Assuming you don’t, you know, once again, all else equal, you’re gonna just save more money, right? So you think about the time lever, you think about the savings lever, which is both income and spending, right? And involved. And then you think about your investment returns. So those are the three big kind of things you, you can mess with, right?

And so. And investment returns are probably the hardest one to mess with. It’s really hard to beat the market so. I’m really more of an indexer. Not everyone agrees with that, but that’s kind of my take on that. So that variable solved. And then the other two are like, okay, what can I do on the savings front that’s spending and income.

You have probably the biggest, the most amount of, um, leverage there on those two factors. And then the last one is your time, which obviously if you’ve already, if you spend a couple decades not doing the right things financially, that’s fine. You can’t. Do much about that now it’s already happened. So the one things you gotta focus on are your income and your spending, right?

That’s where, if you think about this in terms of a formula, like that’s where it comes back to it. Like that’s the biggest factor. And the one I try and have people focus on is income given the data. Yeah. Yeah. And how do you help people with income? You have to talk about, okay, what can you do to raise your long-term income?

And I always mean like, okay, what can I do tomorrow? Like there’s side hustles. Things are out there that are great and you can do some of those things. It’s a long journey. I’m talking three to five years, right? At least, right? At least three to five years of what can I start working on to move in that direction.

Does that mean a promotion in my current job? Does that mean starting a side hustle that becomes a business? Does that mean learning a new skill and kind of pivoting to a brand new industry? Right? And so. A lot and we can start getting into this. There’s a lot to discuss in this topic. Um, but it’s the thing I focus on the most because that’s what the data tends to show.

It’s like, Hey, you’re not gonna, you know, clip coupons and make your way to wealth. Like, you can make some wealth doing that, but it’s, it’s not gonna be a lot. The real lever is gonna be when you raise your income so much that you don’t even have to worry about saving money. ’cause there’s just so much coming in that it’s just, it’s easy to save.

That’s what we, that’s the goal I want for, for everyone ideally. Well, let’s, you know, let’s talk about what you, you know, what you like to talk about. So, you know, give us some ideas on, you know, what do you tell people about increasing income? How do you do that? I mean, you’re talking to a group of, you know, individuals here that typically al are already higher income.

Um, generally, you know, professionals generally going to be making over three, $400,000 a year. What, what kind of advice do you have for them? So for those people, I think the, the main thing, if I, if I say how do you increase your income from here? A lot of those people are probably gonna be just high paid professionals.

And there’s just like the limits of how much you can work and how much you can earn day to day. The long-term solution to that is how much can you get equity ownership in this business that’s gonna pay off a higher income, especially over time if the business grows. Right? And so obviously it’s gonna vary based on if you’re like a lawyer, you’re like, oh, I’m getting paid X.

Well, can you get partnership where one day if the firm grows, you have a bigger book of business, now you’re getting paid. Multiple of X, right? It, it’s, it has to come through some form of equity ownership. There are obviously exceptions to this. There are people who are entertainers or athletes or something where you can get these big salary type contracts.

But once again, those are incredibly rare for most white collar professionals. It comes through business ownership and having income, or at least having a business that you’re reinvesting in. And over time you eventually sell and you have a very massive income event. So there’s a lot of different ways of thinking about this problem.

You either. Siphon the income off to yourself every year, or you reinvest in the business so it’s gets bigger and bigger. Then you have an exit of some sort, which is a very large income event. And so if you look at the data, that’s generally what people in, let’s say 10 million plus in net worth. That’s how they get there, right?

Besides the entertainers, the athletes, et cetera. The vast majority of people in the 10 million plus range, and that’s where I call level five on my wealth flatter framework. Those people are entrepreneurs like through and through. And so if we’re talking about, okay, well what can I do to like raise my income?

There’s this framework from, uh, Naval Akan where it talks about leverage. I don’t mean like just borrowing money, like that type of leverage. I mean, there’s different types of leverage and so obviously hiring people in a business where you’re having someone. Do something that earns more value than what you’re paying them, right?

That’s the oldest form of leverage in history, right? It’s like hiring people, having them, that’s one type. Another type is using money, so that’s owning real estate, right? Going and you’re, you’re using someone else’s money, the banks, and you’re borrowing it X percent and hopefully that real estate is returning a higher return than X.

That’s how you, you’re just leveraging the difference in, in the return versus what you’re paying for your money, right? Which is, you know, the interest on the mortgage. So that’s another type of leverage. And then the two new ones basically in the internet economy are content and code. Content is like kind of what you’re doing right now, buck, you’re putting out, we don’t have to have this conversation with the thousands of listeners or tens of thousands of listeners, one by one where we go to their house and we sit down at a convenient time for all of us.

Like this one episode would take like all the rest of our lives just to do. Right. And every time we’d have to have the same conversation hopefully. And you know, so because we can have this once through the internet and distributed networks, right? We can send it out to lots of people at once. And that’s the same thing.

That could be true of writing a book, that could be putting out other types of content, right. There’s all sorts of ways you can do that. You’re selling a product on the internet, that’s another kind of scalable thing that you can do. And then lastly, it’s code, which is also kind of related to, it’s not content exactly, but you’re, you’re creating a software that’s like software as a service.

That’s why this is such a profitable business model, because the marginal cost of the next user’s basically zero. I mean, it’s not exactly zero, but it’s almost zero. Yet you’re giving them a very valuable thing that they’re paying, you know, let’s say thousands of dollars a month for whether you’re doing business to business or.

Even B2C, you can be, you know, getting someone on Netflix, you know, you’re paying 10, 15 bucks a month, but they are just pumping this stuff out and it’s, it’s a very low cost thing to do. The cost really is in the content. That’s a whole separate thing to discuss. But if you just think about this in terms of like code, and what code can do, like there’s, and now with ai, like so many people are like building apps and coming out with different things where like the code can be created for you.

Whether or not that code’s perfect and good, and whether you actually still need to hire developers is a separate conversation. But you can see the point, like, these are scalable, right? It’s like every, the whole idea of leverage is I put in one unit of time and I get out more than what I’m putting in, and now it doesn’t necessarily happen right away, but that’s, that’s the long-term goal, is you need to divorce.

Your time from your earnings. If you’re a lawyer doing billable hours, right? You are getting paid on those billable hours, which is great, but at some point you need to divorce. How much time you put in with the number of amount of revenue coming in, right? So that’s where you hire other people. That’s where you put out content and brings in more clients.

That’s where you, you know, come up with an app or something. I don’t think lawyers would really do something like that, but you can imagine like there’s a lot of different ways where you can use leverage. To divorce your time from how much you’re earning in a given amount of time. I think the moral of the story, and I, you know, you like a lot of different things that you talked about there, but one I think is really important is that as a high income earner, um, who’s not, you know, when we’re talking about, say somebody who’s making half million, 2 million bucks a year.

Um, you’re not gonna earn your way into, uh, being wealthy. That is a really tricky thing. I mean, of course, if you’re making, well, gosh, Kirk Cousins, uh, sitting on the sidelines for Atlanta Falcons yesterday making $50 million a year as a backup quarterback. Um, yeah, those kinds of things, you, of course most of us are not gonna have.

But by the time you’re done with taxes and all that. It’s extremely difficult, and I can’t tell you the number of people that I’ve talked to, just coming through our own investor group that are making a half million, million dollars a year, and they’re in their mid forties, and I ask ’em what their net worth is, and it might be 2 million bucks.

And you know, I mean, that’s a lot of money, but on the other hand, you would just think, well, gosh, how does that happen? Right? Well, think about expenses, think about taxes, et cetera. So for those of, so for, for, for that cohort. It is extraordinarily important to do a num other things in order to get, become wealthier, you know, and, and, and you bring up a lot of those points and, you know, arguably, um, you know, some of the investment decisions that we make, uh, are a big part of that.

Obviously, you’re, if you’re going to be the SMB 500, you’re gonna do fine, but you’re not gonna, you know, you’re not gonna get rich just by doing SMB 500 for the next, you know, 20 years. You’re gonna do fine. You’re not gonna, you’re not gonna get super wealthy, right? You’re not gonna get super wealthy. And so it really comes down to, you know, asymmetric bets and investing or, and or, uh, business creation side hustles.

Although, uh, I guess that’s kind of what you’re describing, but you’re not all that easy to do, you know, but it, but, but you know, that’s another issue entirely. You kind of have to figure out where you fall into that, you know, framework. Yeah, and I think there’s a bigger question here, and so when I talked about, when I wrote the Wealth Flatter, like there’s this idea of, okay, there’s these levels of wealth and what you’re talking about when you say super wealthy is what I call level five and level six.

Level five is 10 million to a hundred million. Level six is a hundred million plus. The, the level I talk about the most, I think, I mean I talk about all of them in the book, but the one I focus on the most is level four, which is one to 10 million. There’s a lot of very successful people in that level.

It’s about, you know, roughly 18% of the United States in terms of households. So there’s like, you know, millions and millions of people, like, you know, 20 million people, 20 million households in that level, if not more, right? So you think about that, there’s a lot of people in that level. They’re doing very well.

There’s also a lot of them. That’s why the Amex lounge is overrun. That’s why people go on vacations and they have to get up at 7:00 AM to go get a a, a pool chair. ’cause like there’s so many people that have making good money, you know, living a good life and everything is I what I call the upper middle class.

And they’re in this exact situation you talk about where someone’s making 500 KA year, that’s incredible money. You’re in the, you know, you’re in the, you know, 1% among households, right? Or actually at least among individuals, maybe not among households. You know, you’re making incredible money, but then after tax, okay, that’s not cut in half.

Exactly. But let’s say you make 300 k and then you have expenses and everything, you can see how, you know, maybe you’re only saving a hundred KA year, which is still great. That’s amazing. But saving a hundred KA year, you can see it’s not gonna move. It helps initially, but it’s not gonna move the needle.

It’s some point, getting past 10 million is very difficult with that. Right, right. What do you mean when you, when you talk about, uh, just keep buying, what, what is that concept? The concept there is the idea that I, I have a mantra for just keep buying, which is the continual purchase of a diverse set of income producing assets.

And so the idea is, if I only had three words to give you on how to build wealth generally, like I don’t, when I, I don’t mean extreme wealth, I don’t mean 10 million plus. So when I say just wealth, I mean get into level four, let’s say one to 10 million. I would tell people just keep buying, right? So if I only had three words I could give you, right?

Just keep purchasing assets over long haul income producing assets. And the specific mantra is the continual purchase of a diverse set of income producing assets. That idea. It disproves market timing. It disprove it shows that you can do this with diversification and you have to do it for a long time.

Right? And so that’s where I kind of, I, my first book was me kind of showing that in depth, right? It was like one specific strategy and I just kind of proved it by looking at every single data set I could find. Different asset classes, all sorts of things to show all this, um, that this is the right way to go.

Then with the wealth ladder, I zoomed out from just that one strategy and I said, Hey, let’s look at the overall framework of wealth and like, hey, that’s a great strategy by itself. But if you wanna get to Extreme Wealth as you say, or um, you know, you need to do something different and that you’re still owning them from producing assets, but you have to control those things.

That’s, that’s the difference between like owning the s and p 500 and owning your own business, right? Like you have a lot more control over your own business. So you can kind of chart your own destiny a bit more than just owning the s and p 500. Now of course, there’s more risk there, right? You could lose everything with your own business.

It’s very unlikely the s and p five hundred’s gonna go to zero, right? Yep. That’s just the way it is. No risk it, no biscuit is what they say. Uh uh. So based on your research, how should, and that should, we don’t need to be giving advice here, but talking about diversification, what does the data show on the optimal mix?

I mean, is it more. There’s a lot of discussion about this, and a lot of times you hear about avoiding concentration risk, but then you have guys like, you know, Warren Buffett and, and, and Charlie Meyer will tell you no, you don’t wanna be just purely, you know, diversified into a million different things.

You find the good things and you invest in those. So what does a data show? I mean, the, if you’re trying to compare like, buffet to the ta, like buffet’s, well, I’m not comparing Buffet, but I think, but I think from, uh, from the standpoint of. The standpoint of, of looking at, you know, I mean, what, what do we know about diversification?

What, what is the data on diversification? I mean, the idea that you should own a basket of diversified securities like that has generally outperformed, you know, trying to. You know, beat the mar. Like, if you look at like just the s and p 500, let’s just use that. You know, you look at, there’s something called the, the Spiva reports, S-P-I-V-A, and over five, 10 year periods like the market s and p 500.

So an s and p 500 index fund would’ve outperformed like, you know, 75% of active managers. These are people who, it’s their job, they are paid in, compensated to try and beat the market. They can’t, only 25% of them can do it over a long period of time. And then the further you go, the the smaller that group gets.

Right? And so 25% is like a three to five year period. You go longer and longer, and the underperformance just starts showing up because of fees, especially like, especially after fees, it gets very difficult. So my whole take with this thing is like. Someone’s like, well, yeah, I’m just gonna buy the good company.

He’s like, yeah, of course. If we could all just buy the stocks and only go up, this would be very easy. I think it’s, it’s easy to seduce yourself that that’s easier than it is. I don’t think it’s easy as people think it is, and we don’t have, we don’t have a good data set on it. ’cause all we have is the winners.

We can talk about the buffets and all the. Successful stock investors. Where’s all the people that said, I’m gonna follow a value approach and then underperformed? They’re not gonna make the news, they’re not gonna make, no one’s gonna write books about them, so you’re not gonna see it. So the truth is, we do not have a data set.

I have not seen a data set of, Hey, here’s 100 value investors. They’re all gonna follow this approach, and we’re putting the line in the sand now and this date, and then let’s just see what happens. Let’s see what happens to those 100 over the next 30 years. There was Warren Buffet and a few of his buddies, and they all did well.

That’s already a weird elite group in some sense. If you know Warren Buffet personally and you’re a value investor, you’re probably already in some sort of elite, you know, group that’s not really representative of like stock pickers as a whole. And so that’s the only, my only pushback. I’m not saying it can’t be done, I do definitely think it can be done, but I think it’s much more difficult than people think it would be.

Like we just got a bunch of kids that. At age seven and said, Hey, these are the best basketball players in the school right now. How many of those kids are gonna make it to the NBA? We don’t know. And maybe, you know, we would’ve had one LeBron James there, and he would’ve made it, but most of the kids wouldn’t have.

And I think that’s the kind of the difference, right? Just because someone shows skill at some point doesn’t mean that they’re gonna necessarily have skill for a very long time. Yeah, no, I, I think the point I’m trying to make is this, is that, you know, you’re, you’re talking about sort of elevating from the different levels on this ladder that you have, right?

And, and that, um, I don’t personally believe that only buying indexes is gonna ever get you there. I don’t think you’re, I don’t think you’re gonna get up that high. I, I think you have to take some level of risk. Now, your form of risk that you’re talking about is through equity and businesses and stuff like that.

Not everybody’s gonna be able to do that. I do think that there is probably a role for things that are a little bit. Uh, a little bit riskier, and that’s where like alternatives come in there. For example, people buying real estate, people, you know, investing in startups. I mean, in, in this kind of space where we have people who can put some amount of money at risk, gives them a real opportunity potentially to see outside gains.

What is your take on that? Um, it’s definitely true and if you look at, you know, as you move up the wealth ladder, you tend to see more ownership of individual stocks, not just like reti, not just stocks and retirement accounts, which is why I think we would think of as like the s and p 500 or an index fund, right?

Um, but overwhelmingly, and you see this even more so. People own businesses, right? And so that’s if I’m like trying to, if I look through each one of these levels, now, once again, this is a, this is a logarithmic scale, so everything’s moving by 10 x, right? Level four is one to 10 million, level five is 10 to a hundred.

Level six is a hundred plus. If you just break up wealth that way and you look like, what, what are the biggest changes from the, for example levels, you know, four to six, what are you seeing? It’s business ownership. Right. So I like Elon Musk probably has 95%. Yeah. But I’m saying like, okay, does that mean that no one’s owning stocks?

No, of course not. Does that mean no one’s owning real estate? Of course not. Right. So those are other, other changes that are happening. I just think of those three between like real estate, you know, buying individual stocks that go up a ton. And business ownership. Business ownership is the one that I think tends to dominate, at least in the data.

And I, no, and I have this in the, I agree with you. There’s no doubt in my mind that if you, if you want to. Sort of become, you know, you want to take it to the next level. You have to own it. You have to own it, own your business. You have to create an asset that you can at some point that you can sell, that can be valued at a certain amount on a multiple.

And people who are high income, W2 wage earners, which is a lot of people in this show, um, they’re just not gonna be able to do that. So that’s what I’m trying to, that’s what I’m trying to get. My head around is like, okay, so what, what practical advice can we have for these, these folks? Right? Yeah. Then the, the thing I would say for them, assuming they’re not gonna go all out on that type of thing, is, you know.

Own a diversified portfolio if you want, you can make these one-off bets in startups, alternative things like that. Of course, some of those are gonna go to zero, like expect that, like that is what happens. You’re gonna have, you know, in 10 investments, one of them may like, you know, three or five x, which is great.

You know, a couple of ’em will probably go to zero and then a couple would just return your money, right? So that’s kind of, at least that’s what the VC on average type stuff happens. It depends what you’re investing in and how much you know, if you have better expertise or things like that. Besides that, I mean, you can think about like, are there other things you can do in terms of income?

Whether that means maybe not, you don’t have to start a whole business, maybe you start a side hustle and you can do on the side, or it’s, there’s different ways of parsing out owning a business, right? Like I technically own a business. I have a full-time job. I’m a COO at a wealth management firm, right?

And so I’ve been there since before we had a billion dollars in assets. Now we’re almost at seven, right? So I’ve seen a lot of changes, you know, just structurally within the org. While I’m doing that, I’m also writing, doing content. It’s not my main thing. You know, it makes some decent money, which is nice, but it’s not like my main thing.

And so I think people can come up with something else that, you know, ends up being beer money or rent money or whatever it is, and that’s still something, you know, or your mortgage payment, whatever you wanna call it, right. So there’s different ways of attacking this problem. And I, I don’t think they all ne need to be home runs to still be helpful.

Like I’m, I would say I’ve hit like two doubles, like I’m hitting a double in in my career and I’m hitting a double in like my content life. And none of them are like home run hits. I’m not like this super, super successful person, but I have two things that are doing pretty good. And so it actually does add up to be quite nice.

So I think that’s another way of looking at it. And that’s kinda what, that’s how I approach it, just because it’s what’s worked for me. I’m not saying that’s gonna work for everyone though. Yeah, yeah. Yeah. Um, let’s talk about sort of the in general economies. Uh, you know, you’ve looked at historical data, I understand, uh, and recessions in recovery.

What lessons can we draw from, you know, some of that history for today’s environment? I think the biggest takeaway is that the market’s gonna price all the stuff in before the headlines do, and so. For example, COVID was getting worse in April, 2020, and the market was already on its way back out. Right?

It’s like the market’s like, oh, well that’s gonna happen, and that, and people just, all that information just hits the market immediately. So you’re gonna be in a, a case where, you know, the market’s already rising. It’s already moving past what the, the, the, the train wreck that’s currently happening, which is such a weird thing to say, but that’s exactly how it works.

Like real estate prices didn’t bond, I think until. 2012 in the United States after the, after the GFC, the market bottomed in in March oh nine, right? So it’s like the market was already on its way back up and re the real estate thing was still going through. So markets move a different. Different speeds.

I think real estate tends to move slower than the stock market, just in general ’cause of the liquidity issues, right? Like selling houses is not easy, you know, buying and selling an index fund or individual stocks is pretty straightforward. So I think the liquidity, and so you’re gonna see that in crypto.

You’re gonna see that in, in. Inequities, it’s gonna move a lot quicker, and that’s gonna tell you a lot more. So if you’re like, Hey, I’m just gonna see what happens and oh, if the, if things are looking worse, like that doesn’t mean that the market’s gonna get worse. The market could have already priced that in and could already be on its way back up.

And that happens so many times. So I would not say, oh, well the headlines are getting worse. If the market has to get worse, that doesn’t necessarily happen. So that’s the thing I keep in mind here. Yeah. So you’ve done a lot of research. Um, what’s the most surprising thing you’ve found, and I guess.

Something that would have changed personally, how you handle your own finances. Yeah, I think it’s this idea of once you get in, the things that get you into level four, which is one to 10 million, are very different than the things that get you out. And I can just, let’s just do a quick thought experiment.

So we’re gonna just use the, you know, you said someone’s earning 500 KA year. Let’s say they’re saving a hundred thousand after tax and, and expenses, whatever. So let’s say you just hit a million dollars in, in net worth. Let’s just assume it’s all in a portfolio just to make this thought experiment very easy, right?

You’re saving a hundred KA year. Let’s say it’s earning 5% a year after inflation. So I’d say it’s a relatively conservative, not, not too crazy of a return. Right. How long does it take you to get to 10 million, you know, with, you know, start a million, a hundred KA year? 5%. The answer’s 28 years. So that’s 28 years of you earning, let’s say $500,000 a year.

A very good income. Right. And you’re, you know, obviously you have to, you’re sacrificing ’cause you have to save a hundred KA year. So even though you’re, you might be spending a decent amount of money, you’re still saving a hundred k. It’s still, you have to do that for 30 years. That’s after you hit a million.

It could have taken you 10, 15, 20 years to get to a million as it is, right? So you can think, you start doing the math on this, you’re like, wow. Like, yeah, this, this W2 thing. It’s great and all, and you can high paid W twos great, but at some point. It stops moving the needle, right? Like when you have a, when you have a million bucks, a hundred KA year, that’s 10% changing your wealth, right?

A hundred thousand over a million, it’s 10%. By the time you have 5 million bucks, it’s 2%. Like you, you don’t move the needle anymore. And there’s nothing wrong with that. That should happen. But I think the main takeaway, the thing that that spoke to me about this when I’m writing about this, is. Do I keep my foot on the gas or do I kind of relax a little bit and enjoy all the other parts of life that aren’t money?

And I said like, maybe I don’t need to get to 10 million. This is an arbitrary figure anyways. Like I don’t need to be in the, you know, upper class. I can be fine to have an amazing life in the upper middle class. And I think what happens is a lot of people get caught in this level four, like, we’ll call it the no man’s land.

It’s not a bad place to be, but it’s just, you know, you’re making good money, but you’re really like, oh, I want to get to the next level. And like thinking through that. I think you have to realize that maybe that’s not the right decision and maybe the right decision, the rational decision is to say, you know what?

I can take a step back. I don’t need to accumulate another $5 million to live a good life. And I think that is the, that is the big unlock that needs to happen and that I think a lot of people, especially this audience. Probably are not thinking about, ’cause I wasn’t thinking about it. And so that’s what I would say to this audience.

Like, hey, a lot of you’re probably, if you’re in that range, you know, one to 10, especially if you’re like the upper, you know, over five, you probably don’t need to keep accumulating wealth. And I, and, and I think you would’ve to make a very hard sell to prove to me that you do, because I bet you don’t. And that, that just, I, trust me, I work with wealth management clients, like a lot of these people are like, oh, I’m spending.

200 KA year. It’s like you have, using that 3% rule, you’re making 500 K. Like it’s, it’s the math doesn’t math in any way where like you’re never gonna spend down your wealth. There’s just no way this could happen. And yet people keep wanting to accumulate more and I, I don’t know where that comes from.

Yeah. So is there, uh, any data on striking that balance between savings for tomorrow and living today? I don’t know if we have like, good studies on this type of stuff. Yeah, I think it’s just really a question of like. What do you really want and what are the things you’re gonna do to get there? And I think the framework, I really like Sahil Bloom in this book called The Five Types of Wealth, and he talks about all the other types of wealth besides financial I, I obviously focus on financial because I’ve been writing about it for so long.

But he is like, you’re probably chasing more financial wealth, which you’re already like at the 99th percentile on to go and give up health or to give up. Mental health or to give up, you know, relationships, social wealth like or time wealth. You’re maybe you don’t have any time ’cause everything’s being taken up by everything else.

And so what are the trade offs you’re making and are, do, do those make sense? I don’t, I don’t think there’s. Any point in getting to 99th percentile on one metric, and then you’re like in the bottom 25% on everything else, or even on a few metrics, right? I don’t think it’s, it’s worth it to have the, the bottom 25% in, in hell just to have the top 1% in wealth, in financial wealth.

I think it’s a crazy trade off, but I think people do make that trade off all the time and it’s something they’re probably overlooking. Good stuff, man. Uh, well, tell us a little bit about where we can, uh, learn more about your work. So my blogs of dollars in data.com. Um, you can find me on LinkedIn at Nick Maggiulli Instagram, Nick Maggiulli, and yeah, I have my books on Amazon Target anywhere you just search my name, you can find all my stuff.

And, but, and I also, I answer every dm so feel free to DM me on Instagram or LinkedIn and I’m happy to, um, to chat about that. Great. Thanks so much for being on the show. Appreciate you having me on Buck. You make a lot of money, but are still worried about retirement. Maybe you didn’t start earning until your thirties and now you’re trying to catch up and meanwhile you’ve got a mortgage and private school to pay for and you feel like you’re getting farther and farther behind.

Good news. If you need to catch up on retirement, check out a program put out by some of the oldest and most prestigious life insurance companies in the world. It’s called Wealth Accelerator can help you amplify your returns quickly, protect your money from creditors, and provide financial protection to your family if something happens to you.

The concepts here are used by some of the wealthiest families in the world, and there’s no reason why they can’t be used by you. Check it out for yourself by going to wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Hope you enjoyed it. Uh, again, I guess the moral of the story is no risk.

It no biscuit, uh, I can’t remember is the name. Uh, that was the, it was a old Atlanta Falcons head coach who said that. I can’t remember. He is like some guy from New Orleans, but very, very true. And, uh, but again, if, if you don’t, um, if you’re not interested in the. The biscuit, then don’t, don’t worry about the, the risk.

Um, but if you want to invest differently, start doing. So. Just a reminder, you can start investing differently by going to wealth formula.com and, and signing up for Investor Club. Uh, and, uh, we’ll see you next week. This is Buck Joffrey signing off.

525: Is Trump’s Takeover of the Fed a Good Thing? Sep 21, 2025

Something big is happening in Washington right now, and it has the potential to reshape everything you and I do as investors.

A few weeks ago, the Trump administration attempted to remove Fed Governor Lisa Cook, only to have an appeals court block the move on legal grounds.

At almost the same time, Stephen Miran—one of Trump’s economic advisers—was confirmed by the Senate to the Fed’s Board of Governors by a razor-thin margin.

On one side, an attempted subtraction. On the other, a confirmed addition. All of this is happening right before a major policy meeting, and it’s not hard to see the writing on the wall.

Trump’s takeover of the Fed is not a question of if—it’s a question of when. Whether it unfolds in a matter of weeks or drags out over the next few months, the direction is set and the outcome is inevitable.

The endgame is to bring interest rates down and, if necessary, use quantitative easing to drive bond yields even lower. That kind of policy would flood the system with liquidity, and the immediate effect would be a booming economy. Asset prices would rip higher—stocks, real estate, gold, Bitcoin—you name it. If you own assets, you’d feel wealthier almost overnight.

But of course, there’s another side to this coin. A dollar that weakens under the weight of easy money. A gap between the asset-rich and the asset-poor that grows even wider. Rising inequality, rising tensions, and perhaps a long-term cost to the credibility of the U.S. financial system.

So is this takeover of the Fed a good thing? That depends entirely on where you sit. If you’re a wage earner with no meaningful assets, it’s bad news. If you’re an investor, it’s a reminder that ignoring policy shifts like this is done at your own peril.

The time to prepare is now, not later. Don’t wait for rates to drop before acting. History shows that buying assets in a descending rate environment has been one of the most powerful wealth-creation maneuvers in the United States.

Think back to 2008. The Fed responded to the financial crisis with unprecedented rate cuts and waves of quantitative easing. What followed was more than a decade of explosive gains in stocks, real estate, and other assets.

Those who bought while rates were falling built extraordinary wealth. Those who stood on the sidelines missed out.

But don’t take my word. Listen to noted economist Richard Duncan explain the dynamics of this situation in this week’s episode of Wealth Forula Podcast.

Learn more about Richard Duncan:

richardduncaneconomics.com

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

By devaluing the dollar by 50% against the end of the mark by 1990, the trade deficit that had come back into balance.

Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. Uh, today before I begin, just a reminder. Go to wealth formula.com. If you haven’t done so and you are an accredited investor, join the Accredited Investor club. Lots of things coming in there in Q4.

Lots of tax mitigation, strategy related investments, that kind of thing take advantage a hundred percent. Bonus depreciation, take advantage of discounted assets and so on. So again, wealth formula.com. Now, uh, let’s talk about today’s show. Interesting one. Um, it’s with, uh, Richard Duncan again. Uh, and, uh, he’s an interesting guy, uh, and I wanted to talk to him because something big is happening in Washington right now, as you know, and it has the potential to reshape everything you and I do as investors.

As you may know, and as I am sure you probably know, a few, a few weeks ago, Trump administration attempted to remove, uh, fed Governor Lisa Cook, only to have appeals. Courts block, uh, and, uh, uh, move block the move on legal grounds. And at almost the same time, Stephen Moran, one of Trump’s economic advisors, was confirmed by the Senate to the Fed’s Board of Governors, uh, and uh, on one side and attempted a subtraction on the other, a confirmed edition.

All of this is happening right before a major policy meeting, which by the time you hear this is going to be. Uh, concluded, which is the, uh, announcement of either a 25 or 50, uh, basis. Point cut. Uh, you tell me because I’m doing this right before that meeting, uh, Trump’s takeover of Fed is, you know, really not a question of if it’s a question of when and how, and.

Whether it unfolds in a matter of weeks or drags out over the few months, uh, the direction is set and the outcome really, in my view, is inevitable. Right? The end game. What is the end game? The end game is to bring interest rates down and if necessary, use quantitative easing to drive bond yields down as well.

And that kind of policy. What would happen? It would basically flood the system with liquidity and immediate effect would be booming. To the economy, right? Asset prices would rip higher stocks, real estate, gold, Bitcoin, you name it. If you own assets, you will feel wealthier overnight. But of course, there’s another side of this coin.

Uh, you know, a dollar that weakens under the weight of easy money, a gap between the asset rich and the asset poor that grows even wider rising inequality, rising tensions, and perhaps the long-term cost of credibility of the US financial system. So the question is. You know what, this whole takeover thing, it sounds, you know, uh, it sounds sneaky, it sounds bad, and especially on the, if you listen to mainstream television, but is it such a bad thing, the takeover of, of the Fed?

That depends entirely where you sit. If you’re a wage earner with no meaningful assets, if you’re poor, it’s bad news. If you’re an investor, it’s a reminder that ignoring policy shifts like this is done at your own peril because the time to prepare is now. Don’t wait for rates to drop before acting.

History shows that buying assets in a descending rate environment has one of the most powerful wealth creation maneuvers in the history of the United States. All you have to do is look back in 2008, the Fed responded to the financial crisis with unprecedented rate, cuts and waves of quantitative easing.

And what followed was more than a decade of explosive gains in stocks, real estate, and other assets, which basically just ended. I mean, gosh, right? So those who bought while rates were falling, built extraordinary wealth, and those who stood on the sidelines missed out. And that is playing out in real time again, in my opinion.

But don’t take my words for it. Listen to Richard Duncan. Uh, he is clearly not a pro. If you’ve listened to him in the past, he calls balls and strikes, and if anything, he’s been sort of not on board with the Trump administration, the plan, but listen to what he has to say about this. We’ll have that interview right after these messages.

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Here’s the key. Even though you’ve borrowed money at a simple interest rate, your insurance company keeps paying. You compound interest on that money even though you’ve borrowed it. Net result, you make money in two places at the same time. That’s why your investments get supercharged. This isn’t a new technique.

It’s a refined strategy used by some of the wealthiest families in history, and it uses century old rock solid insurance companies as its backbone. Turbocharge your investments. Visit Wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Today. My guest on Wealth Formula podcast is Richard Duncan.

He’s been on the show, uh, several times before. He is an economist, an author known for his work on the global financial system and credit dynamics. He’s the creator of Macro Watch, which is an online video newsletter analyzing economic developments and the author of several influential books, including The Dollar Crisis, the Corruption of Capitalism, and The New Depression.

Uh, how you doing there? Uh, Richard. Great buck. Thanks for having me back on. Yeah. Nice to talk to you. You’re in, uh, Thailand, right? That’s right, that’s right. Well, good to, good to uh, uh, connect. It’s a sort of an unusual time. I think my time here is now 6:00 PM and, uh, it’s what, eight 8:00 AM your time. Uh, so it’s, it’s, it’s interesting how, uh, the business ever gets done between those two countries.

But, um, anyway, um. It’s hard during this podcast with the strange hours between gear and there. Yeah, yeah, yeah. Absolutely. Well, let’s talk about some of the things that you’ve been talking about. Uh, first topic, I think, um, that you’ve been sort of, uh, talking about is Will Trump and the Fed. And, um, so you have a video where you asked that question and you say that the, the Fed independence could become, uh, be coming to an end.

Tell us what that really means. Tell us what the background is here. Well, yes. Let me do again with the background. Yeah, because we really are living in extraordinary times as far as developments in the US and the global economy go. President Trump is very serious about remaking the American economy.

When he says, make America great again, he means it. And his plan to do that is to re industrialize the United States and to do that, he has a strategy. There’s a very clear plan. In fact, this plan is laid out very clearly in a paper published by Steven Moran, who is the chairman of the Council of Economic Advisors, and who has just become the next Fed governor.

He’s now a fed governor appointed by, uh, nominated by Trump and approved by the Senate. So in this paper by Stephen Moran, he lays out a, a three step strategy on what Trump. In tends to do what Trump should do, uh, regarding tariffs. And this paper was published in November last year. So the three step strategy is first put very high tariffs on all the United States trading partners.

Second, threaten all of those trading partners, if they retaliate, threaten them, that the United States will no longer defend them militarily. And then the third step is to then convene a meeting of these intimidated allies. And pressure them into devaluing the dollar. Something like we saw at the Plaza Accord.

This would be called the Mar-a-Lago Accord. So, so actually that’s what’s been happening. This has been a very clear blueprint as to what’s going on. We put on the very high tariff step one, we’ve threatened to remove our military protection. If anybody retaliates, that’s step two. Both those things are done, and so now they’re probably working on step three, which is devaluing the dollar.

Hey, hey, can I interrupt you, Richard? In order to devalue the dollar though, isn’t that, isn’t that as much just, um, I, I, I don’t know what, uh, the other nations would. They just relative to ours, they can just go in and step and devalue the dollar, or, I mean, are, don’t, the markets sort of dictate that the markets play a role and we’ll come to that in a moment, but yeah.

In the Plaza Accord. In 1985, the US got Japan and Germany to agree to devalue to allow their currencies to appreciate by about 50% against the dollar. The dollar was devalued by 50% against the yid and the mark in order to try to bring the trade deficit back in the balance. By 1985, the trade deficit was running out of control for the first time.

This worked when by devaluing the dollar by 50% against the end of the mark by 1990, the trade deficits that had come back into balance. And these were more or less brought about by government intervention rather than market forces. Yeah, it’s, um, yeah, I guess the, the mechanics maybe beyond the, the scope of what we’re talking about, but, um, I was just curious on, on how that works.

So, yeah, so what Trump wants to do is to, as I said, re industrialize the United States, but deal. As part of that, he wants to bring down the US trade deficit, bring the trade deficit back into balance, and here is where things become very dangerous. Trade between countries had to balance where the world was on a gold standard, or even the Brett Wood system because under a gold standard, if the country had a big trade deficit with another country, it’d had to pay for that deficit by shipping its gold to the other country.

And gold was money. So if we just stay in that country would run out of gold and stop. They would have to stop buying things from other countries and trade would come back into balance. So as long as the Britain Woods system was in place, the US didn’t have a trade deficit. But soon after Britain Woods broke down in 1971, by the early 1980s, the United States started running a very large trade deficit with other countries with the rest of the world.

And in fact, this trade deficit became so large last year, it was $1.2 trillion. This became the driver of global economic growth. It created a global economic revolution. It ushered in the age of globalization. It allowed the trade surplus countries like China to grow into a superpower. And altogether the, the cumulative US trade deficit since 1980 has been about $17 trillion.

So that’s found $17 trillion off into the global economy who created very rapid global economic growth. And it’s also supported US economic growth because. By buying things from other countries with very low wages like China and Vietnam and now and Bangladesh, that’s very disinflationary. So that drove down inflation rates from the double digits in the early 1980s to very low levels before COVID struck.

And that allowed us interest rates to follow the very low levels, very low interest rates, helped the US economy. In numerous ways, and it also pushed low interest rates, allow asset prices to rise, home prices and stock prices. So that helped the US economy. Low interest rates helped the US economy, and at the same time, the countries with the trade surpluses who were accumulating dollars had to invest those dollars back into the US dollar denominated assets because when they sell things in the US they’re paid in dollars.

They take the dollars back to China or wherever they came from. They’ve gotta do something with the dollars. And what they do with them is they buy treasury bonds or they invest them in the US stock market. And so this massive inflow of foreign capital was the direct result of the trade deficit and the capital inflow pushed up bond prices and that drove down interest rates.

It also pushed up the stock market and created more and more wealth. So now the problem is we have a. Big global economic bubble that has resulted from these trade deficits. You have a big credit bubble around the world. If you bring the US trade deficit back into balance, it’s going to cut off the fuel that has allowed that bubble to form the dollars going off into the world economy as a result of the US trade deficit are the bubble fuel.

If you head off the trade deficit. Dollars stopped going overseas and they also, the capital inflows stopped coming back into the us. So you get in a situation where without the capital inflows in the us, that would mean less foreign buying of US government bonds. So less upward pressure on US bond prices, and that would mean less downward pressure.

Government bond yields. Let me interrupt you again, uh, Richard. Just ’cause um, you know, I think some people, like, you know, we, we get in these conversations and sometimes there’s some basic questions people have and, and one of them, the way you describe the trade deficit when I’m listening to that, it’s like the, the thing that comes to my mind is why do we care if we had a trade deficit, if we were benefiting from it in the first place?

Well, that’s a question for you to pose to President Trump. Well, so the, the idea, his idea then, is it not that the, the issue with the trade, the trade deficit is it’s, it’s, it’s basically robbed us of manufacturing. That’s the main, is that the main driver from President Trump? Yes. And that is, and he is right to point that out.

That is the reason that US manufacturing has been hollowed out since the 1980s. This is left behind the American middle class whose relative wellbeing has stagnated since that time. And those are the people that for President Trump, many of the people who support Trump and President Trump has said he’s going to in this de-industrialization of the United States and re industrialize the United States by putting a place very high tariffs.

So what do you see happening here? Um. Moran gets in there. Okay. Obviously that’s not control of the Fed, but I think one of the, the, another video that you had talked about, the Fed’s final days. So talk a little bit about that, if you would, because, uh, the reason it’s so important for President Trump to take over control of the Fed, which he’s on the verge of doing, is because his policies are are very inflationary.

I putting up high tariffs on all of the goods being imported in the United States. This is going to cause the inflation rate to move higher. And by trying to re industrialize the United States, that will mean more factories will be built in the US or more Americans will be working in those factories.

And this is happening at a time when the administration is also deporting very large numbers of people. So the, we have a labor shortage to start with. In the US the unemployment rate is only 4.3%, which is very near historic loads. So if you do these things in combination, it’s very likely to, the tariff will create the first round effect higher goods prices, and then when you begin re industrializing the country.

So that will create a second round effect of higher wages and higher prices, and this is going to push up the inflation rate. And at the same time, if you’ve had less capital inflow coming in from abroad, that’s also going to put upward pressure on bond prices, making it more difficult to finance The government bonds, low interest rates because there’ll be less foreign capital coming in.

So it’s very important for him to take control over monetary policy. Because if the inflation rate starts to move higher, continues to move high, the low is 2.3%. In April, the fed’s target is 2%, and last month it moved up to 2.9%. So it’s moving higher now and it’s likely continuing moving considerably higher, in my opinion.

Normally, when the inflation rate is moving higher, fed with high, the federal funds rate and push interest rates, higher policy rates. President Trump doesn’t want the interest rates to go higher. In fact, he’s been very clear that he wants interest rates to go much lower. The federal funds rate is currently about 4.33%.

He said he’d like for the federal funds rate to be much closer to 1%. So if he takes control over Federal reserve policy, monetary policy, you can have the Ford FOMC. Vote for considerably lower interest rates on the federal funds rate. And he is very close now to taking over control of the Federal Reserve.

So far, Richard, and, and maybe this just is a function of time, um, inflation ticked up a little bit. It didn’t be seem to be that dramatic ’cause. It’s simply because in your view, tariffs have not been in place long enough. Yes, I think that’s right. The tariffs have not been in place long enough. The many companies stocked up on inventories when they knew that higher tariffs would soon be in place, and they’d been buying down those inventories, but now the inventories are running out and they’re going to either have to choose between taking a hit to their profits and presumably therefore also to their share prices or passing on the higher cost of the imports to.

Consumers and at higher prices and higher inflation, and similarly bond, the bond markets actually have, you know, uh, the bond, the, the tenure’s gone down. Um, talk about what’s going on right now with the bond markets compared to what you think’s going to happen. So this is interesting because last year, the federal funds rate three times in September, November, December.

But from the time the Fed started cutting, the 10 year bond yield has actually moved higher. It’s still higher now than it was in September last year. The 10 year bond yield has been moving lower over the last couple of weeks ago. I think in anticipation, one of the fact that the Fed is now expected to cut the federal funds rate at its FOMC meeting on September 17th, I had 25 basis points.

Also by the realization that once President Trump does have complete control over the fed over US monetary policy, if he’s going to cut, he’s going to instruct the Fed to cut interest rates radically. Right. But, but how does that affect, I mean, how does that affect the bond markets, which you know, are not really under the control of Fed?

Uh, because, I mean, you know what? I was talking, I was referring to something that, that happened recently. Obviously what you were talking about with the fed, uh, fed funds rate going down, the bond market’s going up and, you know, for, for, for regular everyday business people and stuff, a lot of, a lot of the, uh, interest rate that we, that we pay is mortgages, for example, are based on the bond market more than they’re the Fed rate.

So that, that’s a problem. But this time around with the anticipation of the Fed rate being cut. The bond markets actually went down too simultaneously. And maybe because of, maybe because of the fact, this fact, but there was a significant, uh, adjustment to the labor market, uh, to the jobs market news. I think they basically showed in the last few months there was almost, what, almost, almost a million jobs, less than they, they thought I, is that the reason, do you think that the bond market reacted the way it did?

Yes, I do think that is part of the reason why the bond yields are moving lower because of the downward revisions to the J numbers. But before I really answer your question fully, let me explain what is going on with, in terms of the President gaining control over the Federal Reserve. So the Federal Reserve is made up of a Board of Governors, seven governors based in Washington, DC.

And it’s also made up of 12 regional banks. Each regional bank has a president, so they’re 12 presidents of the Federal Reserve Regional Banks. Uh, eight times a year. The Federal Open Market Committee meets to vote on interest rates and also on the size of the Fed’s balance sheet. In other words, quantitative easing or quantitative tightening.

Now, here’s the thing. The seven governors always get to vote at every FOMC meeting, but only five of the regional presidents get to vote at this meeting. So there are 12 votes in total. Five presidents. Of the seven governors. The rules are if there are four Fed governors out of seven, a simple majority, four out of seven, and most Fed governors have the power to fire.

Any or all of their Federal Reserve bank presidents, and they also then have the right to approve the replacements of those then presidents. So what this means is if President Trump can appoint four of the seven Fed Governors, or if he has influence, if they are on his side and do what he wants them to do, then he can.

In theory, fire all the Fed Federal Reserve bank presidents and appoint new ones. And the new ones, they would have five votes on the FOMC at every meeting along with the four governors that support him. So that would give them a nine to three vote in every FOMC meeting. Does he have that kind of, uh, I, I guess I I, in terms of the governors that are on there right now, does he, do we know if they’re generally pro-Trump agenda right now?

I mean, ’cause obviously you’re gonna take, they, it would require them to, to make that maneuver against the presidents. Right? Right. And we do know precisely the most recent meeting, Christopher Waller dissented and also Michelle Bowman dissented. Both of those people are interested in replacing Chairman Howe as chairman of the Federal Reserve when his term expires in May, and they are, we can say on Team Trump, they, so they, the Fed voted to hold interest rates steady, that they dissent it.

They voted to cut the interest rates in Lyme of what President Trump wants to happen. Now more very recently, the President Trump just nominated and the Senate approved. Stephen Moran to be the third Fed governor. So that’s three votes for team Trump and President Trump. Last month fired Lisa Cook and claiming that he was firing her for cause because of fraudulent mortgage applications.

Therefore, if he succeeds in firing her, then he will replace her and with a fourth fed governor, and then he will have four out of seven. Fed governors on Team Trump, and they would then have the right to fire all the federal reserve night presidents or any dare to disagree with Trump’s policy. So once he has four governors on the board, which will happen as soon as he can get rid of Lisa Trump, and he will have complete control over monetary policy.

Now, the reason they said that, bringing this conversation now back to your question about the bond market and bond yields normally. If the Fed were to cut interest rates sharply as the president wants at a time when inflation is moving higher as it is now, and as expected to continue to do this, would cause investors in the bond market to come up very alarmed because they would expect that much lower interest rates, but overheat the US economy and lead to even higher rates of inflation very quickly so they wouldn’t be willing to buy.

US government bonds at current yields because they would expect higher rates of inflation. They would demand higher interest rates on government bonds, and just for example, no one would want to buy a 10 year government bond yielding 4% if the inflation rate is 5%, something more like 7% yield. So here’s why it’s so important for the President Trump to get control over the Fed and over monetary policy.

’cause if he’s first, he wants them to slash the short term interest rates to much lower levels. That would tend to be inflationary and that would tend to push up bond yields. But when the bond yields start to rise, if the president has control over monetary policy, then he can instruct the Fed to launch another round of quantitative easing.

Right. So basically buying up the bond market and driving those, uh, interest rate, ultimately the, the yields down. That’s right. There’s no limit as to how much money that Fed can create so that if instructed to do so by the president, the Fed could begin creating dollars and using those dollars to buy government bonds.

And they could do this until the bond prices rise and the bond yields fall to any level the President desires. And I think this is the scenario that will ultimately play out here. Once President Trump asked all over this, so going back to the, the paper that Moran wrote, okay, so that effectively, that’s kind of the plan, right?

So you bring down the fed rate, uh, by getting control, you do quantitative easing to bring down, uh, bond yields, and that creates a recipe for significant growth because of low interest rates. Business, real estate across the board. So then the theory I, I presume on the, on the Trump side is we do that, we grow at an enormous rate and to hell with inflation at that point.

’cause we’re gonna be growing so fast. Is that kind of the theory then that, that, that you think that they have, uh, on, on the Trump side? I think so, and yes, the inflationary could certainly move significantly higher, but it’s not certain that the government would actually report the actual true inflation numbers because after all, the president has recently fired the, the head of the Bureau of Labor Statistics because he was unhappy with the job numbers that she released a couple months ago.

And so. Government employees are gonna be very reluctant to report any job, any inflation numbers that the present president wouldn’t approve of. So it’s not sure that the government would be reporting the true inflation numbers, but this scenario that we just outlined would create, create an extraordinary economic boom in the us and the much lower interest rates in the quantitative easing would also drive up asset prices, create a stock market.

Boom, make home prices go much higher. All the asset classes gold. Cryptos, everything would move except, and, and, and the dollar would, the dollar would weaken significantly. The dollar would crash. That’s right. And that goes back to the part of the Moran paper you cited where he was talking about essentially, um, you know, even more devaluing it relative to various currencies.

That’s right. This Moran paper had two main parts. Chapter three was about tariffs and the tariff strategy. Chapter four was titled Currencies, and it discussed various strategies to devalue the dollar. One was part of the tariff strategy. We’ve already discussed forcing our partners into a Mar-a-Lago accord and agreeing to a lower dollar.

But he also discussed unilateral approaches to devaluing the dollar. For instance, he said that the Fed could create money and buy foreign currencies. Accumulate foreign currencies and push up the value of the foreign currencies and thereby drive down the value of the dollar. This is essentially what other countries have been doing to the United States for decades, buying up dollars and accumulating foreign exchange reserves and pushing up the value of the dollar.

So this would turn the tables on them. This one approach. He also suggested the United States could impose a, a tax or a user fee on the treasury holdings. Foreign central banks. So rather than pending foreign central banks’ interest on US government bonds, as is their right, he proposed withholding some of that interest was a tax in order to encourage them to sell their treasury bonds and to reduce their dollar holdings, which would drive down the value of the dollar.

So, and he discussed the importance of the correct sequence, tariffs first, and then the currency devaluation second. Because the tariffs give the United States leverage over its trading partners. So we’ve had the tariffs. Now it looks like the dollar devaluation is the next phase. So the net result of this, from what I can tell, would be ultimately, you know, significant, uh, a significant asset bubble, right?

Like significant growth in asset prices. So. Those benefiting would be people who already owned assets. Those, um, you know, you, you have an increase in disparity wealth. Tell, tell me, tell me the big problems that you see with this. Um, you know, with this happening with this, if they get what they want, obviously they think it’s the right thing for the United States.

They think it’s what’s gonna make. America great. Again, my sense is that you don’t believe that. So tell me why many things would happen. The wealthy would become wealthier, but I think the average Americans would also benefit from higher wages. As the reindustrialization of the country takes place, they would receive higher wages and the country would be significantly re industrialized, which would be a very good thing.

We can’t depend on other countries, especially potential. In the, in the next war for our steel and to build our ships and for pharmaceuticals and all the other things, we need much less computer chips. So I think the reindustrialization in the United States is a very good idea. I think it would benefit all Americans.

Of course, the rich always benefit most in in every environment, unless it involves much higher taxes on the rich, but that’s not on the cart. So I think the Reindustrialization would be a good thing. Now the problem is, is that this would probably create such a big economic boom that would last for several years, but ultimately this boom slash credit bubble slash asset price bubble, every boom ultimately pops.

And then few down years down the road, we would probably have a new systemic financial sector crisis. The leverage would become extremely high ultimately. The US private sector would run into difficulties as it did in 2008, and it was unable to repay its mortgage obligations, and then the banks would begin to fail and cascade into a new systemic financial sector crisis.

So that’s the threat that we get a big boom and then we get a big bust that there is hope that. There is a way to avoid that, and that’s one other element of this strategy that we haven’t really discussed or hit on yet. Now, once the President gains complete control over the Fed and complete control over monetary policy and begins using quantitative easing to push down bond yields, it won’t take him very long to realize that he can also use the fed and money creation to fund his US Sovereign Wealth Fund.

As you know, president Trump created a US Sovereign Wealth Fund in February, uh, through an executive order and having the Fed create money and use it. But money to invest in new industries and new technologies on a very aggressive scale should actually induce a technological revolution in the United States that would create a, a productivity miracle and turbocharge US economic growth.

Actually restructuring the economy. If he had his US Sovereign Wealth Fund financed by the Fed on say, a trillion dollar or multi-trillion dollar scale over the coming years, then the US Sovereign Wealth Fund could do things like invest in artificial intelligence, but not only that, in developing energy capacity so that the energy is available to, for the data centers that are necessary to run the ai.

He could invest in things like developing fusion, which could ultimately, in the not too distant future, lead to much lower energy cost and invest in things like quantitative robotics, vedic engineering, biotech nanotech. And by investing in these new industries on an aggressive enough scale, it could create a long lasting economic move fueled by a new technological revolution.

And that can actually see us far a decade or two into the future if cherry down on an aggressive enough scale. So we’re looking at an additional move into state directed capitalism, which we see Trump pursue already through a number of ways, creating the US Sovereign Wealth Fund, taking a 10% equity in Intel, getting other countries to.

Agreed to give the United States money for President Trump to invest in any way he see fit, taking a golden share in the US Steel. All of those areas are clear examples that the president is interested in state directed capitalism. And if done right, this could actually be a very good thing for the United States.

This is what China has been doing for a very long time, and China’s been so successful at it. They are now a very serious threat to US national security. China is a technological superpower, and China is investing through their government war in new industries and technologies in the United States is, and we’re now neck and neck in that race for AI dominance.

Whoever develops artificial general intelligence first or super intelligence is likely to end up ruling the world. And there’s a real chance that’s going to be China. Therefore, we need to take extraordinary measures to make sure that that doesn’t happen. And this is an opportunity for us to do that.

And I believe President Trump may very well take advantage of this opportunity. It seems, this seems to be the direction that we are going. I believe that would be a good thing. All of this sounds very positive to me. Uh, what’s a downside here? I mean, you mentioned, you know, an asset bubble. Ultimately that corrects, but I mean that happens in cycles where there’s booms and busts.

I mean, what should be we be concerned about in this scenario other than a significant loss of the val? Value of the dollar? Of course, there are always many things to worry about. One is increasing income inequality. It won’t be long now before the United States has trillionaires, and we’ve already seen the political power.

That people with hundred, 200, 300, $400 billion can bring to bear on elections if we have even at where we are now. It undermines democracy and creates an oligo, oligopoly, oligarchy, and that is not good for democracy. And this would lead to even greater income inequality for for London. Also, the unprecedented aggressiveness of President Trump’s.

Maneuvers are also consolidating power in the office of president in ways that we’d never seen before that could set precedents, that establish a trend that lead to even greater consolidation of power under the executive branch in years ahead, in ways that might turn out to be very undesirable historically.

Richard, are there examples? Where Central banks have lost their independence, and you know, what we’ve seen happen in those situations. The United States had a central bank before the Fed, and it was ended all together by Andrew Jackson, I believe, in the mid 1830s. In between the mid 1930s and 1913 when the Fed arenas was created, there was no central bank and at that time, the Treasury Department.

Carried out many of the functions that the Fed now carries out. For instance, during the Civil War, and again in the 19, in the 1890s, the Treasury Department created money on large scale and used it to fight the Civil War and for other purposes in the 1890s. So that’s one example of, you could say Auto Atlantic Central Bank, losing independence, but it was destroyed, all gathered and replaced by the Treasury Department.

So, um. From a practical standpoint, fed loses its independence and the net result of what you have kind of laid out for us, ultimately being sort of devaluing of the dollar. It seems to me that when investors, if they believe that to be true, the best way to protect themselves is to own assets. Is that fair?

But yes, that’s fair. That’s right. They can own assets or they can. Sell their dollars and buy yen or buy euros. That’s another way to protect themselves. That is the purest play. If you try to become very clever, then things become quite complicated. If you expect a short dollar devaluation against the yen and the Euro, the purest way of play that is to buy the yen and the Euro.

I don’t think I’ve seen you necessarily talk about this. Um. This other issue that’s been on my mind is that, you know, in terms of artificial intelligence, you’ve, you’ve talked about sort of the, you know, that this is fundamentally gonna change the world. Whoever controls AI, controls the world. One of the things about AI is that it is almost certainly a deflationary technology.

How much, uh, where does that play a role in, in the economy? How do you, how do you think that’s gonna. Come together the next five years. Well, we’re certainly right that it would be deflationary over the longer run, but it may be inflationary in the short run in terms of driving up energy choices. For instance, the big tech companies now are investing so much in data centers.

I believe I’ve read not long ago that four or five largest US tech companies are investing. Close to $400 billion next year in ai, according to their announcements. That’s more than the European Union spends on its military in total. That just puts this into perspective, and what they require is energy, new energy sources.

The United States doesn’t have enough energy capacity currently to allow these debit data centers to give all of the energy that they need, so we’re likely to see. Energy prices, electricity prices bit higher. We’re also likely to see a great deal of construction, of new types of energy production. Both those things, along with the investment into AI by these big companies, could all push high prices higher.

The near term, and China, for example, has been very clever since 2000. In 2000, the US had about three times as much electricity generating capacity as China does. China has expanded its electricity capacity by eight times since then, and it now has two and a half times as much electricity generating capacity as the United States does.

And according to all reports, they’re developing new nuclear facilities, nuclear power plants very aggressively, whereas the United States has not done that for decades. So we’re really behind the curve in terms of having the. Electricity generating capacity that we need to compete with China and that’s going to have to be ramped up or we’re going to lose this AI war.

And that’s going to put upward pressure on a lot of different choices. You know, you talk a lot about tracking credit. Uh, that’s a big part of the way you see the, uh, financial world. So what are some of the key signals you’re watching right now that could show us where this is headed? I always watch the total credit of the us.

You can say total credit is the flip side of total debt. One person’s credit is another person’s debt. So the easiest way to measure total credit is by measuring total debt. The data is more available, and this means the debt not only of the US government, but also the US households and corporations, Annie Mae and Freddie Mac, and the financial sector.

So the the total credit number. First went through $1 trillion in 1960, not 64, and now it’s something like $150 trillion approaching. I’m sorry, I haven’t looked at the number recently, but it’s just absolutely exploded. Well, sorry. It’s much closer to a hundred trillion dollars last year, so now it’s about $105 trillion moving toward 10 trillion.

So it’s been this critic growth that exploded once dollars ceased to be backed by gold that unleashed the amount of credit that could be created in the US and with the world. And this credit explosion has has fueled economic growth globally. I always say that capitalism, which was driven by saving and investment, has been replaced by what I call creditism.

Our current economic system is driven by credit creation. Consumption. So credit growth is absolutely essential Economic growth, and this explosion of credit is the reason that the world looks the way it does. Now, when I look out my window here in Bangkok, I can see hundreds of skyscrapers that were not there 20 years ago.

And these are the direct result of this new economic system that’s involved an explosion of credit globally, and that’s created an enormous wealth boom. Most recent data for wealth in the United States showed that the total wealth in the United States household wealth, so this is all of the assets of all of the Americans, minus all of their debts.

It increased by $9 trillion during the second quarter alone, and it’s currently, the total number now is $176 trillion of wealth in the United States, $60 trillion. In the last five and half years, it’s up 50% in the last five and a half years. Lemme repeat that. It’s up $59 trillion. Total US government debt is 35, let’s say 35, 30 $7 trillion depending on how you count it, but this is practically enough to pay off all the US government debt twice over.

This is the creation of wealth in just the last five and a half years. So there’s an explosion of wealth. The problem here is that if you compare the level of wealth to the level of income, that gives you a ratio, the wealth to income ratio. So this is household sector wealth, which is now $176 trillion.

If you could compare that to disposable personal income, this ratio is now something like seven 80%, which is much higher than it’s ever been before. The average going back to 1950 has been. Five 80%. Now it’s seven 80%. The only other times it’s become significant. The above its long-term average was during the.com bubble in 2000 and during the property bubble in 2008.

Then it got up to somewhere roughly around 650. So now this wealth to income ratio is way out of line already suggesting that. The problem with this is if income is not high enough. It’s very difficult to support the higher wealth levels ’cause people need to have income in order to be able to pay the interest on their mortgages.

For instance, if home prices are extremely high and income is in rising, but income is flat, it doesn’t take long before people no longer have enough income to be capable of tying the interest on their mortgage debt. And then attend policy correction. Is that, is that a marker of, of, uh, income disparity as well?

Because you’re, you’re measuring the full wealth of the United States versus the, I guess, the average income, right? Or not average, but the income. So, so, so a higher ratio would indicate a higher dis, uh, wealth dis or, um, income disparity. Is that That’s right. And that’s another, that’s another narrative about great income inequality because.

Wealth is more equally sprint and more people have moral income to be able to buy assets and buy them on an affordable and sustainable way. Anything else that you think we ought to know right now about what’s going on with this particular topic? No, I think that’s the big picture. This is truly revolutionary because what we’re talking about is changing the way that the global economy works.

The main driver of the global economy has been the US trade deficit. Now the objective of the tropical administration is to eliminate that trade deficit and to re industrialize the United States. This is a very big experiment and to make this work, the president is pulling out all the stops to take over control over the Fed and US monetary policy.

And if he does, then perhaps he can pull this off in terms of. Using the Fed to invest in the US Sovereign Wealth Fund and stimulating US economic growth, creating a technological revolution, a long lasting economic prosperity. But it’s a very big experiment. There’s real risk, but this global bubble that has developed under criticism could implode with the catastrophic conses.

Yeah. Richard, uh, it’s been a pleasure as always. The, the, um, newsletter, the video newsletter that you do is called Macro Watch. Can you tell us a little bit about that? Yes, thanks. I started Macro Watch 12 years ago. Every couple of weeks I upload a new video discussing something important happening in the global economy, such as we’ve been discussing today, and how less likely to impact asset prices.

These videos tend to be 20 or 30 minutes long and contain 30 to 15 charts that can be downloaded. So if, if your listeners are interested. They can find Macro Watch on my website, which is Richard Duncan economics.com. That’s Richard Duncan economics.com and I’d like to offer them a discount code that will give them a 50% discount.

If they would like to subscribe to Macro Watch, it’s a go to the website and hit the subscribe button. They’ll be prompted to put in a discount coupon code if they’ll use the code formula, they can subscribe at a 50% discount. So I hope they will check that out and at the very least while they’re there, they can sign up for my freed lock.

Fantastic. Richard, it’s always a pleasure. Thank you so much for your time and um, this conversation. Thank you, BAK. I look forward to the next time you make a lot of money, but are still worried about retirement. Maybe you didn’t start earning until you’re thirties and now you’re trying to catch up and meanwhile you’ve got a mortgage and private school to pay for and you feel like you’re getting farther and farther behind.

Good news. If you need to catch up on retirement, check out a program put out by some of the oldest and most prestigious life insurance companies in the world. It’s called Wealth Accelerator can help you amplify your returns quickly, protect your money from creditors, and provide financial protection to your family if something happens to you.

The concepts here are used by some of the wealthiest families in the world, and there’s no reason why they can’t be used by you. Check it out for yourself by going to wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Hope you enjoyed it and the moral of the story.

Buy, buy, buy, buy assets, and don’t sit around in cash because as Robert Kiosaki says, savers are losers money. Uh. Dollars are going to, uh, not be worth nearly as much as they are right now in just a matter of few years. So, uh, get off the sidelines. You have a descending rate environment. Do something if you want to join our Credit Investor club, uh, get exposure to some deals there at wealthformula.com.

That’s it for me this week on Wealth Formula Podcast. This is Buck Joffrey signing off.

524: Buying Art and Nice Stuff as an Investment Sep 14, 2025

When we think about investing, our minds usually go straight to stocks, bonds, and real estate. But some of the best opportunities come when you stop thinking of investing as something separate from your everyday life.

What do I mean by this? A lot of the things we buy are treated as expenses when they could be investments. You might wear a watch or jewelry simply because you like them, but you avoid spending too much because it feels frivolous.

Yet what’s better—paying $250 for a decent watch that will be worthless in 10 years, or $5,000 for a Rolex that could be worth twice as much over the same period?

The same idea applies to cars and even furniture. I have a good friend who lives by this philosophy. For decades, he’s chosen to invest in the finer things rather than the ordinary, and it has become a cornerstone of his personal investment strategy.

It’s about thinking differently—turning what most people see as expenses into assets.

Art falls into that same category. I’m not a huge art guy myself. Sometimes I’ll buy a piece off the street because I’ve never thought of art as an investment. Yet for centuries, people have purchased art for its beauty, cultural value, and emotional impact—and often made a financial killing in the process.

Today, art is recognized as a legitimate asset class—something that not only enriches your life on the wall but also diversifies and strengthens your portfolio.

This week on Wealth Formula Podcast, we’re going to explore how fine art has evolved into an investment category in its own right, and how you might think about incorporating it into your wealth strategy.

Learn more about Philip Hoffman and The Fine Art Group:

www.fineartgroup.com

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

If you donate a hundred million dollars of art, you can probably get a tax rebate for the full amount of the donation.

Welcome, everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. Uh, today before we begin, I wanna remind you again, there’s, um, a website called wealth formula.com that you should check out. Um, one of the things on there is, uh, the ability to sign up for our accredited investor club now really do, um, suggest you check it out if you are an accredit investor and potentially get onboarded, uh, with our team.

Uh, because as we enter into this fourth quarter here, we have a number of, uh, potentially interesting opportunities, um, that involve significant tax, uh, tax mitigating type investments. Usually using depreciation, whether that’s, uh, related to, you know, apartment buildings, sometimes in commercial aircraft, things like that.

But if you are an accredit investor, I think you should at least get onboarded so that you can check out the opportunities that are out there that are coming your way. This is, of course, a private group, so that. Um, you will not get access to these, uh, opportunities unless you are part of investor clubs.

So go to wealth formula.com and sign up for our credit investor club if you, uh, if you are one. Uh, let’s talk today a little bit about a shift, uh, in thinking. Uh, you know, we, when we think about investing, you know, of course we’re usually going straight to. Whatever it is that we’re typically thinking about, whether that’s real estate, stocks, bonds, whatever.

But some of the best opportunities come when you stop thinking about investing as something separate from your everyday life and you start thinking about the things that are in your everyday life. So what do I mean by all of this? Well, a lot of things, uh, we buy, um, are treated as expenses. When if you kind of shift your mindset a little bit, they could be thought of as investments rather than expenses.

So here’s an example that’s kind of obvious, right? Many of you wear watches, many of you wear jewelry because you liked them, but you might also say to yourself, well, I like them, but I’m not gonna spend that much on it. Otherwise, it’d be frivolous. So. You, maybe you buy a, a nice watch for 250 bucks. Um, but here’s the thing, what happens, uh, with a watch that’s probably 250 bucks that you bought in the mall.

It’s probably gonna be worthless in about 10 years. Now, what if you actually paid like five grand for, you know, a Rolex? I might pay a little bit more than that, but let’s say you paid $5,000 for a Rolex or some other brand that has notoriously increased in value, that’s really hard to get your hands on.

Um, well, in 10 years, that $5,000 Rolex or that $10,000 Rolex or whatever, it, it’s probably gonna be worth more than when you bought it. At some point it will, if you look at the historical numbers on watches, for example, and various types of jewelry. That’s just what happens when you buy the really nice stuff.

The same idea applies to cars. Of course, you know, those of you who are car buffs, you know, that, um, you know, uh, you may, you may not, uh, you may not be looking for the most, uh, reliable whatever car you may be looking for something that you really want to drive that’s, uh, kind of a classic car that you know is gonna go up in value.

But you can even get that in things like furniture. I have a, I have a friend who lives by this philosophy and he’s. You know, for decades, he’s chosen to invest in the finer things, uh, rather than the ordinary, and has become, um, really a cornerstone of his personal investment strategy in some, you know, so it’s really about thinking differently, turning what most people see as expenses into assets.

So, you know, this particular interview we’re gonna do today is about art. Art falls into that same category, you know, especially for those of you who love art. I’m not a huge art guy myself. Okay. Sometimes I’ll buy a piece off the street because I’ve never, um, because I like it, you know? But I’ve never really thought of as an investment, and maybe this is not an area that I love enough to make part of my investments, right?

But some of, some of you will. Um, you know, I mean, for centuries people have purchased art for beauty, cultural value and emotional impact, and then. As a side effect of that, they’ve often made, uh, they’ve made financial killings in the process. So, you know, today, um, art is recognized as a legitimate asset class, something that.

Not only can enrich your life on the wall, but also diversifies and strengthens your portfolio. So that’s what we’re gonna talk about on this week’s, uh, wealth Formula podcast. We’re gonna explore how fine art has evolved into an investment category in its own right and how you might, uh, think about incorporating it into your personal wealth strategy.

We’ll have that interview right after these messages. Wealth Formula banking is an ingenious concept powered by whole life insurance, but instead of acting just as a safety net, the strategy supercharges your investments. First, you create a personal financial reservoir that grows at a compounding interest rate.

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Visit Wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Today my guest on Well, formula Podcast is Philip Hoffman. He’s the founder and chairman of the Fine Art Group, a global leader in art investment advisory and finance. Philip spent years as an executive at Christie’s before pioneering the first art investment fund, effectively creating a new asset class for investors.

And today the fine art group oversees more than 20 billion in, um, advised assets across 28 countries. Philip, welcome to program. Lovely to be here. Welcome from Sunny Lee, the Alps. Very nice. It’s, uh, very appropriate, I guess, for the art world to be coming from some nice places like that. Um, well, let’s, let’s get right into it.

Uh, you know, you, you started, uh, uh, at Christie’s, uh, and, uh. Then ended up, um, getting this situation in place where high income professionals can start thinking about, uh, art as an investment. What, tell us the story. What, how, how did that happen? So, I got into the art world completely by accident. I trained at KPM.

And as a CPA and then by accident, got asked to be CFO of Christie’s when I was 27. I was the youngest board director by about 20 years. Uh, I had no interest in joining Christie’s ’cause I thought he was a antiquated company selling, uh, with, with old fashioned people selling Rembrandts a little did I know that there was one and a half thousand staff involved that, um, they were trying to sell Basquiat and.

Picassos and Renoirs and, and, and everything from colored Damons to vintage motorcars. So it was a fascinating business to join when you are 27. And, uh, but I didn’t wanna be CFO, I wanted to actually get my hands dirty and find out what the business is all about. And that was my first exploit, was to meet a client who had bought two pictures, one a can leto for about 50,000 pounds and a.

Monet for around the same amount in 1976, and we went to the warehouse to look at it with my experts, and we recognized both were genuine and both, uh uh, what is it, 30 years later were worth. Between one and a half and 3 million each. So I suddenly tried to work out the maths and worked out, Hey, is this a good investment?

And, uh, it looked like a staggering investment and better than real estate. And then I asked a few more questions of that particular client and he said, oh, I bought a prince by a very famous artist called Domie for about, um, 10 cents a print. And I said, what are they now worth? And this was, uh. 30 years later, 35 years later, worth a thousand dollars a print.

So that’s a good multiple. And I suddenly had the idea that art was more than just fun, that it was investible. Um, the challenge is understanding what is good art, what is bad art, what is risky art? Outed by the art, uh, and I’ll give you some insights as we go. Yeah. Um, I mean, and in those, those, uh, those anecdotes are, are obviously very encouraging for people who are, uh, interested in, in, in investing in stocks.

But when you look at the big picture of art, and I don’t know exactly how you, you come up with these indices per se, but how has art performed historically compared to stocks or real estate? So I would say that art has probably underperformed in general against the s and p 500. So in broad outline, uh, you would be better off buying the s and p 500 as a, as an investment than buying art.

But art has the added plus. That there are in the US significant tax advantages over stocks. So if you look at most of the major families, they have donated their art collections to major museums. And of course there’s a huge tax benefit when you, if you donate a hundred million dollars of art. You can probably get a tax rebate for the full amount of the donation.

Uh, so suddenly not only do you get the return on the art, but you get the tax, uh, refund effectively on your other income as an offset. There are not many countries that offer that attractive term other than the us They’re probably half a dozen countries like that. But, but so in, in the US it’s particularly attractive.

And then if you are clever and you have the right advisors, yes. There are times when you can double your money. You can make, you know, my, my view is you can make 10% per year return if you are clever and well-advised. If you are badly advised or dunno what you’re doing, you could probably lose 10% per year on your investment.

So that’s why, uh. I, I think that art is a particularly niche investment and it’s gotta be well understood and well advised. And the fine group who’ve been in this space for nearly uh, 30 years, and I’ve been in the business 35 years, have advised probably for 50 of the Forbes 500 and, uh, work with some of the top investment banks in the us and that’s because we’ve.

Seen how to do it, and we’ve seen how not to do it. I’ll give you an example. So one of my friends, he rang me up. I was doing a presentation with one of the biggest family offices in America. They said, look, let’s get you on a, on a video with our top family friends. And one of the friends was watching my podcast and I went through the 20 do’s and don’ts of buying art, and he was listening to it and he rang me a couple of weeks later and he said, Philip, your talk resonated with me.

And I said, why is that? He said. I bought a painting by an artist called PORs and I bought it in Los Angeles, um, over in California from a great dealer. And I got it shipped to my house in Georgia, uh, and it had a cost of $250,000. And he said when UPS delivered it, uh, it arrived on my front lawn. I was away for a week’s holiday, so it was left on the front lawn, it rained the rain d um, completely destroyed the crate and destroyed the artwork inside it.

When I rang the gallery and said, Hey, um, once the insurance on this and am I gonna get my money back? They said. You didn’t insure with us, you insured through UPS rang UPS, and they said you only insured the crate and the packaging, so we can reverse you $250, not $250,000. So that client said, Philip, next time round, I need the fine art group to help me get it right.

And. And I, I give you one other story of how to mess it up. Uh, one of my, one of my friends had a a a $1,000,005 Damien Hurst Meds sink Cabinets. It’s a sort of meter and a half long meds sink cabinet with lots of bottles in it, all displayed in random rows. And Damien Hurst that auction for about 1.5 million, about 10 years ago.

And he hung it. He hung it behind his desk in his office and uh, he moved offices and he said to a shipping company, can you get it moved for me? Uh, and they said, yeah, that’ll be $4,000 to move it. And he said, I’m not paying $4,000 to move this 200 yards from my old office to my new office. He said, I’m gonna get Burt, my driver to do it for me.

Of course Bert said, look, I’ll get it done now. And he said, no, no, no. It’s a valuable item. Do it carefully, do it slowly. And, and, and, you know, take your time. He came back from lunch and Bert was standing at the front entrance of the new offices in the Gerkin in London, and he said, uh, governor, the uh. The Damien Hurst medicine cabinet looks better than ever.

And he said, well, it looked pretty amazing in my office before. What do you mean it looked better? He said, come and have a look. And he went up and bur the driver, not only, uh, reorganized every single bottle into sending order, but got rid of the empties, threw them away. So this was not. Damien Hurst medicine cabinet, but bur the driver’s medicine cabinet went from worth one and a half million dollars to about $5.

Uh, luckily they had a photo and they kept it. So the do’s and don’ts of buying and investing are, are, are hundreds of stories of what not to do, and probably 10 lessons of what to do. So, uh, we’ve been talking about some, you know, very expensive art and for, you know. High net worth individuals we’re not necessarily ultra high net worth individuals.

They may be thinking, well, gosh, I’m not gonna, I’m not gonna put a million dollars, um, in one piece of art. And what kind of, you know, that kind of risk. So what are some of the ways that, you know, if you’ve got money, but you don’t have millions to spend on art, what are, what are some of the main ways to invest, uh, uh, without buying, uh, you know, a Picasso outright?

So you can, there are, there are options to buy, uh, but like a horse, you buy a syndicate in pictures and there are one or two vehicles that offer that in the United States. And I warned clients, um, on that front to look at the, uh, the, the critical factor, which is fees, fees and fees. Um, and when you’re buying a stock and you spend, you buy a million dollars of stock or a hundred thousand dollars of stock, the fees are maybe a hundred dollars, $200, $500 when you’re buying art.

Some of these products charge somewhere between, uh. For every a hundred thousand, they’re charging somewhere between 20 and $40,000 in fees over a 10 year period. So stay clear of those, those funds and products that charge huge fees. ’cause you’ll never recover that 20 to 40% cost uplift. Um, now. My recommendation is there are certain artists I think, that are super interesting to buy in the secondary market.

So what I mean by that is buying at auction bought or buying privately artists that are well known that have perhaps come down in price quite considerably. And I could name you 10 or 20 artists. Super interesting right now that were maybe a hundred thousand dollars, $200,000 now down to $60,000 and. I would say those are gonna, we’re gonna see those coming back with a vengeance over the next three to five years.

But there are other artists, so going into a gallery and just sort of picking an artist you like and somebody saying, look, I’ll get you a 20% discount. That’s a meaningless, meaningless thing. I mean, uh, so the key is. Is there art to buy at $10,000 that you can make a big profit on? Probably not. Is there art to buy at a hundred thousand dollars to $200,000?

Definitely, yes. So my, my entry point would be somewhere in the 60 to a hundred thousand dollars level, maybe a bit lower, but not at the $10,000 level, and I would put. If you’ve got good advisors, like the Fine Art Group, they’re probably, they’re probably 10 in 10 or 15 in the world. Remember, there are about 4,000 people who call themselves ARS Advisors.

And, and probably most of those have done about a year, about as much education as you have done. Um, but they just put the label on the back of their envelope saying Art Advisor, because they walked into Sotheby’s and spent a, did a three month course there, or Christie’s or something. But you know what?

What, what somebody like the fine art group brings is a hundred people with average of 20 to 30 years of expertise each. And that type of information is critical in understanding before you buy. So critical in buying art is understanding the fees, understanding the margins. Um, buying an auction is not always the best thing to do because the cost of buying an auction is typically 20 to 30%.

And unless you are buying something that’s deeply discounted where there’s a real opportunity and we think the artist is gonna get much stronger over the next five years, you’re better to buy privately where no one knows what you paid for it. Because everything that’s sold at auction is then publicly available knowledge.

And if I wanna buy, if you buy a. Um, a Picasso work on paper for $50,000 and I see it. You bought it at Christie’s. Uh, everybody will know that you bought it at Christie’s. Everybody know you bought it for $50,000. So anyone who’s buying it off, you would say, Hey, you bought that for $50,000. Why should I pay you $250,000 for it?

You’re joking, I’ll pay you 55,000. Whereas if they dunno what you pay for it privately, uh, they dunno where to stock. Yeah. Um. You know, you mentioned how there’s some art right now that is, um, at a discount. I’m cur, I’m curious how art moves. Does it, does it typically. So moving independently based on what’s in vogue or you know, how do you, how do you determine that something is undervalued and that it will have greater value later?

So there are certain artists that will. Stick around for the next, uh, 150, 200 years. There are certain artists who will stick around for the next 30 years. There are certain artists who will stick around for the next three years, and there are a lot of artists who will stick around for the next three months.

So it’s differentiating. There are probably a million artists that will stick around for three months and there are probably. 2000 artists that will stick around for the next, uh, a hundred years. And then of those 200, of those thousand or 2000 artists, um, there are some on the periphery, but you’ve really gotta focus in and avoid.

Uh, avoid an awful lot of the art world. And then if you look at the long term trend, you’re not gonna make money in general in one year. You, this art is not the market where you buy something for $50,000 and sell it a month later for $65,000. It’s typically you buy it for 50,000, you hold onto it for three, four years, and if you know what you’re doing and you’ve got the right team, you might be selling it for 75 and maybe even a hundred thousand dollars.

You’re never gonna get is really, really rare. It is one in one in 10,000 times you’re gonna get five times your money or 10 times your money. So this sort of theory that you bought something for $10,000, you’re gonna sell it for $150,000. It is extremely rare and very few professionals even then get it right.

So, um, many families have put a sort of 5% of their wealth into art. A, because they enjoy it. B, because they’re well advised, and trust me, lots of people say, well, I bought this, I bought that. There’s always a very smart advisor behind all these big families who said. Who do all the homework and give you the risks, the rewards, the upside, the downside, I, when we do a due Dili for every work of art that we buy for our clients, we do like a 20 page due diligence document.

A bit like analyzing a company. So when you go and buy. If you go and buy a stock, if you put $500,000 into a stock, you’ve done all your homework, you’ve looked at the analyst reports, you’ve looked at the cash flows, you looked at the, uh, what the market reading is and, and, and, and what you think the balance sheet’s like, and you get advice as to help go through it.

When people buy art. 90% of the world who buy art do it in about 25 minutes, right? They go in, they spend a hundred thousand, 200,000, 25 minutes. They like the look of the picture. The dealer tells them it’s 25% discount, that it’s a great deal. Best opportunity for lifetime. The. Boom, the deal’s done. Instead of a hundred thousand, they buy for 75,000.

And then they get annoyed when we come in from the fine art group and say, oh, you could have bought that for $25,000 somewhere else. Um, so we try and do that homework for our clients, give them all the information and give them the. Terrain. So for instance, if the artist is coming up for big shows in museums, that’s a plus.

That’s gonna help the artist succeed if the artist has been bought by major collectors. The right sort of collectors, like. I don’t know. The biggest collector in, in California, the main collector in Paris, the main, the main museums in London or New York, that’s gonna massively help. So if a young artist gets picked up by the Tate in London, or by the Whitney or by the Guggenheim, that’s gonna have a big impact.

And if there’s gonna be a big show of an artist, so let’s say you own an Ed Roche, you bought Ned Rousche from Gian or one of the galleries, uh. A, a, a few years ago, and if you hear that there’s gonna be a big show at, um, the Guggenheim or in, in Abu Dhabi or wherever, that’ll have a big knock on impact on the pricing of that art upwards.

So, so, and sometimes the death of an artist has an impact. So there are about 10 or 20 things that matter. One of the most important is, is it Right? There are a lot of fakes out there. So I see, I see one fake every day. And that’s just distilled down from what my company sees. So we probably look at a few billion dollars of fakes out there.

So there are certain artists that easily faked, certain artists are not. So that’s number one. Number two, buy your art from a reputable place, just because it’s too good to be true. It probably is too good. Too good to be true. Again, it costs you nothing to get, it costs you very little or nick to nothing to get some advice.

Um, but without advice, you’re spreading dangerously. So is it genuine? Is it in original condition? So a lot of pictures have been robbed or been damaged or being in the, in the light and therefore the paint drops off or being. Or had water damage or fire damage, and suddenly the value of that impact can knock a picture from a hundred thousand dollars down to $20,000.

I mean, I saw a picture by a major major artist called Can Leto from the 1740s. It looked fantastic. When you looked at it, it should have been worth 3 million uh dollars. But when you look close up and put an ultraviolet light over it, you realize that most of it had been touched up in the last 20 years, and it was probably worth.

250,000. So 10% of what it, what, what it would be worth if it was in perfect condition. So there are, there’s a checklist of items that you’ve gotta go through. Then you, then, my recommendation is you buy for a reputable gallery or, or get a reputable advisor to help you. Don’t buy at these sort of remote auctions where they tell you this, Andy Warhol will give you a certificate with this, and it’s going at at 20% of what it would make at the big auctions in New York because one of my clients spent a million dollars on 10 works that should have been.

Worth $10 million and they’re all fake. So he bought a million dollars of fakes. So rather than getting a discount of 90%, he lost a hundred percent of his million. Um, so then he brought in the professionals to help advise it. Um, when you think about art in general and, and prices going up and prices going down, do the markets in art as, as a general rule, track other economic cycles, other markets, or do they tend to be, uh, uncorrelated?

So art. Art in general has shown a steady upward trajectory. If you bought the index of the top thousand artists, you’d probably find probably a, a circa 8% compound return. Pretty, pretty reasonable. Um, but that’s over a, you know, you’ve got hold over a 10, 20 year period and that assumes very little transaction costs.

Um, but, uh. Interest rates have a big impact on art. So high right now. Interest rates are, yeah, we’re looking at sort of, uh, the, the, the, the, the bank, the rates are 5% to 10% to borrow money, and that’s probably too high to give a boom to art. So when interest rates were close to zero and people were borrow at two.

That really kicked art off big time. And we think the, when interest rates start coming down, now, maybe that’s not gonna happen in 2025, who knows? Um, but if they start coming down from the four to 5% level down to the two, three, I think we’ll see a. 10 to 20% uplift in the price of art. But so long as interest rates stay heavy, uh, I think art will have a tough time over the next few years.

So you mentioned, um, I guess for somebody who’s already diversified, um, the slice of portfolio that makes sense for art. Can you talk a little bit more about that? Yeah. I would say that if you’ve got, again, good advice. And you’ve got a big enough portfolio. So I would say, you know, really. You need a portfolio of about $5 million, and I would put probably 250 to $500,000 of that into art.

So I’d put five to 10% of your portfolio. Now, if you are richer, let’s say you’ve got a hundred million dollars, I would say you could take 10 to 15% of your portfolio and put into art because there are two. There were two or three aspects. One is. In America, you’ve got a huge tax advantage if you gift it to a museum.

Um, secondly, you’ve got a, um, huge enjoyment factor. You can hang the pictures on your wall, but beware there are, uh, state taxes. If you buy a picture, uh, ad auction, let’s say in. Uh, tax free in Switzerland or in in UK and ship it out to the us. Uh, you’re gonna have to pay, uh, sales tax when you bring it into your state, which could be, you know, six, between zero and 10% so that that has a knock on effect.

And in Europe there are taxes that can go anywhere between five and 20% when you hang it on your wall. So quite a lot of investors put. A high value art into warehouses and they don’t actually hang it on the wall, and sometimes they put a copy on their wall so that they can enjoy it and know that they own it.

Um, the, the negative side of art is that you can’t really split it up. I, if you’ve got three kids and one work of art, it’s rather unfair to say, well, that, that one work of art goes to my eldest son, or my youngest son, and the others get nothing. So quite often what happens is clients with big collections.

Maybe they have 20 pictures worth a hundred thousand dollars each, and then they have one picture worth 2 million because they bought a basia. You know, I had a client who bought a Basia. Uh, 25 years ago for 250,000 today, that’s probably worth 20 million. Um, and that’s disproportionate value to his, to his, um, rest of his art collection.

So what he wants to do is he’s gonna get us to sell that work, um, realize the 25 million, redeploy some of it into, uh, other artworks and give some of that to his kids. So, um. Uh, but my view is that I would allocate at the bottom end 5% at the top end 15%. And if you’re very wealthy, plants in the billions of dollars sometimes put 30% of their wealth into our, because their, their disposable assets are so enormous that are starts taking a major feature.

Um, but I would say don’t buy art below $50,000. And, um, don’t buy art if you are very, very rich, um, you know, stick in the, don’t go much above 10 million or if you are super rich, then there’s the, what I would call the mega game, which is the sort of 80 million, a hundred million dollars plus. So there’s a, there was a big, um.

Middle Eastern country that invested circa uh, $30 billion in art over the last 10 years. And that collection is probably worth 300 million, 300 billion now it’s probably gone up 10 times. ’cause they bought discreetly at the very, very top end of the market. The rarest that the rep. But it’s, uh, it’s not an easy, you know, it’s, it’s, it’s a complicated thing and.

You know, it’s not always about art. You could buy vintage motor colors. You could buy wine, you can buy, um, jewelry. You know, some of our clients collect Cartier jewelry. Again, if you’re gonna buy jewelry. Be careful. A, is it genuine? So you’ve really gotta have the right experts on your side. And B, if you’re gonna buy jewelry, buy signed pieces, buy the big names, car Shave Van Cleef, perhaps graph, um, and, and just avoid the unbranded jewelry.

That looks great because that’s done really badly. And the Cartier pieces from the 1920s and the 1930s and later. Have done incredibly well. So you might have bought a Cartier piece for a hundred thousand 20 years ago. It might be worth. 1 million now. Um, so there are other avenues of buying. Right now.

Wines come down by 20 to 40%. Vintage cars come down by 20 to 40%. Uh, some of them, although some of the Ferrari’s have held their value. Uh, and, um, you know, some of the, some of. Uh, Picassos or Ed Roches, Bridget Riley’s, these big name artists, they’re probably off by 20, 25%. Uh, and that’s why I think now is the best time I’ve seen in the last 25 years to buy art.

If you’ve got, if you are cash and you’ve got the right advisors. So I told. My richest clients, my less rich clients, that now is the time to research, get comfortable, allocate a portfolio, and look at buying art. Because some, even there, there’ve been some artists that were 40,000, they went up to 200,000, real speculative, sort of like penny stocks and they come back down to 40,000.

Uh, so there’s a rollercoaster in the young contemporary, uh, some interesting, some stay away. How liquid are these markets? Obviously, if you are putting in, you know, 10% of your, uh, portfolio, um, the event that you need to get out quickly, I mean, how, how liquid are the markets? You cannot get out quickly.

Okay. So stocks, you can do a sell and get out in 20 minutes. Um, art, my guess is the fastest you could get out is probably a. A month, 30 days, and the slowest is three years. So 30 days to three years. Uh, on average. My instinct is if you buy now, um, you’ve gotta hold for three years, three to four years, and you could probably get out.

There’s a chance right now that you could double your money in a three to five year period because there’s so many great artists that have come off in price and there is an opportunity. Um, but if you have to, if you bought today and you suddenly said, no, I need the cash. I need to get out, you can. You can, there’s gonna be a, a, a discount for, for, for getting, getting out of it.

So anybody who needs that liquidity, don’t put it into art. You’ve gotta put this money aside for three to 10 years and, and, and as look at it like that and don’t look at it as a one year investment. It’s very, very rare that you turn the money around in a year, if ever. So, uh, tell us a little bit more about how your company works and you know, how people could potentially.

Reach out to you and, um, you know, so our company’s called the Fine Art Group, www.fineartgroup.com. I run it for, uh, 26 years. I’ve been in the art market 35 years. Uh, there’s close to a hundred people involved in our business worldwide. So we’ve got offices all over the US and, uh, headquartered in the Rockefeller Center in New York.

Uh, our clients do, our, our clients do five things with us. So some clients inherit collections of art and we help them. We do an audit. So it’s a bit like, uh, you know, your, your, your grandfather dies and they leave you the whole contents of the house, and some of it’s fantastic and some of it’s not very good.

We will come in and do a valuation and then we will tell you. Those 10 pictures are fantastic and the rest is not worth having. We recommend selling that and keeping those 10 and in five years time, those 10 could be worth five times it. So we give you an in insight into what we would do with a collection number one.

That’s a very, very useful service for people who inherit sort of next generation or families that have bought art over the years and, and then suddenly get thinking, what the hell do I do? I’ve gotta downsize my house, or I want to hand over the next generation. What do I do? And we help them gift it, do charity donations, philanthropy.

We do all that. Number two. We lend money against art. So you said is art liquid? Well, we make it liquid because we take, let’s say you’ve put $2 million into art, we’ll lend $1 million against that. And you can borrow that in like, uh, within like. 20 days. So you can say, Philip, I’ve got $2 million of art.

Would you lend me a million dollars in in in three weeks? And I’ll say, yes, we can. And we will. And we could, you could borrow that money for 1, 2, 3 years and that helps pay. Estate taxes, it helps take tax bills, it helps. Let’s say you wanna give some money to the kids or whatever it is. So there’s another avenue.

So our financing is a very, very interesting business, and we have investors who like to invest in that, and that gets a yield for our investors around. 10% net. So it’s a very interesting product for clients who are looking to get a sort of bond yield with a fantastic product where we’ve had no capital losses and uh, a quarterly dividend.

So clients get a two point half percent dividend every quarter and a 10% yield. So that’s quite an interesting money. So that’s something that, uh, that accredited investors can participate in as well. Indeed, indeed. And, and I would say that’s almost sexier right now than, uh, you know, if you, if you’ve got a lower risk appetite, it’s, I would say that’s a very low risk product with a very nice, steady yield.

And we’ve run a business like that for 10 years. What kind of, um, minimum investments are, are those? It, it’s, uh, unfortunately it’s a bit higher, so it’s sort of 500,000 per million dollars. Um, but it’s locked up for three years. So you, you have a three year commitment and you get out, so it’s, it’s, and it’s di you know, so million dollars is yielding about a hundred thousand dollars a year, so it’s very.

Interesting return in this current economic climate and, and we had no credit losses and no, uh, no capital losses. So I like that. Number three is we help clients who’ve got a little bit more money to set up private funds, so the. Let’s say they’re a bit wealthier and they’ve got three to $5 million to invest, we will run a private fund for them.

So we will help them buy, hold, and sell. And that’s, I, I think, very neat. And they can have the art on their wall, they can have it in a warehouse. We can run it tax efficiently. We can run it in the us, we can run it out of warehouses. Uh, in, in, in. Tax free jurisdictions like Delaware, um, and you know, you can borrow the art and hang it on your wall for a time.

You could buy and sell and you can have the top advisors doing that. So that’s an option. Then we help clients, um, buy art as pure advisory. So some clients say, look, I’ve sold my company for $10 million and I bought a house for 2 million, and I wanna put $500,000 of art on the wall. We help clients do that, and that’s a really nice product where clients get advice, they know what they’re doing.

They send us a WhatsApp saying, I’ve just been into this gallery, or this auction, or I’ve been to Sotheby’s or Christie’s. I like something there. What do you think? And within. Anywhere between an hour and 24 hours, we come back to you and say, here’s all our comparables. This is why we’d buy it. This is why we wouldn’t buy it, and we give you advice.

But at the end of the day, you might say, you know what? For $50,000, I love it and I don’t really care what your advice is. I wanna buy it because I love it and it’s not about a financial investment. So that’s the next product. So, so I’ll invest and then we will. We plan to come out with investment funds where people can go.

We used to run Delaware Limited partnerships where people could invest 250,000, $500,000 into a limited partnership with a typical fee of like one and a half and 20 over six, which is like a private equity product, standard product. But most of these, um, types. They’ve, that’s a low end type of game for, from, from what there is in the retail market.

So I just emphasize to clients, there are products out there with fee loads of 20 to 40%. Don’t touch them and do your due diligence. And quite often these documents have 130 pages to read and clients can’t be bothered to read them. And in on page 90 and 120 is where they set out where their 20%, 40% fees are.

So just avoid them like the plague. They’ll come back to haunt you. Um, but so the five products we have in our business are art investing, art financing, either to borrow money or to invest in the borrowing fund. Um. Art, valuation, art, audit, and philanthropy. So helping clients review their collections, sell them so we can sell, save clients a fortune on when they sell on the fees they they pay.

So if you didn’t have our help, you might pay 30 to 40% in fees when you sell. So you might sell a picture, you might sell a collection that you inherited for a million, and you might only get 600,000 after. After transaction fees? Well, with the help of the fine art group that may be down to, uh, instead of 400,000 transaction fees, we might be able to get that down to less than half that, or even less than that.

Um, you know, it can get as low as 5% as opposed to 40%. So that’s a big help and we can help give people an idea of. The current state of the market. You know, is it good time to sell blue dins? Is it a good time to buy white dins? You know, one of the challenges in the jewelry world is these synthetic manufactured dins, and that’s had a big impact on the white dins.

And then, you know. Um, quite often you go to, you travel abroad, have a lovely holiday and you know, like I do, I say to my wife, I’d love to buy you a nice sapphire ring or something. And I, I made that mistake 25 years ago. I was in India. I saw something that looked like it should be worth three to $5,000.

They said, look for you, sir. It’s only a thousand dollars. Well, I found it was a colored stone. So even experts like me. You know, I didn’t take advice at, at that level. I knew I should have, but I took a view of it. It, it gave my wife enormous joy and I’ve never really told her that I messed, messed up. So even the professionals mess up, but it was a thousand dollars, not a million dollars.

Well, very interesting stuff. Uh, Philip, I, uh, appreciate all of your insight into this space and, uh, obviously if, uh, people are interested. They can, uh, check out the website and it sounds like there’s all sorts of different ways to participate. So, uh, thank you. Thank you again for joining us. Thank you for inviting me.

I’d loved it. You make a lot of money, but are still worried about retirement. Maybe you didn’t start earning until your thirties and now you’re trying to catch up and meanwhile you’ve got a mortgage and private school to pay for, and you feel like you’re getting farther and farther behind. Good news. If you need to catch up on retirement, check out a program put out by some of the oldest and most prestigious life insurance companies in the world.

It’s called Wealth Accelerator. It can help you amplify your returns quickly, protect your money from creditors, and provide financial protection to your family if something happens to you. The concepts here are used by some of the wealthiest families in the world, and there’s no reason why they can’t be used by you.

Check it out for yourself by going to wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Hope you enjoyed it. Uh, you know, uh, what I try to do on the show ultimately is just try to make, make you think differently. And, um, you know, I mean, again, if we’re talking about art, like, you know, we just did, uh, in this interview, that’s one thing.

Maybe art’s not your thing, maybe, but you, maybe you like watches, maybe you like really nice furniture. I mean, all of this stuff has a niche where you start going out of the. The world of, of, uh, expense into the world of investment. And if you love stuff like that, I mean, hey, why not? Uh, think about, think about buying stuff that goes up in value and enjoying it while it does.

Uh, that’s it for me this week on Wealth Formula Podcast. Uh, this is Buck Joffrey signing off.

523: The Real Driver of Prosperity: Population Growth Sep 07, 2025

We all know technology and geopolitics shape the world, but there’s a quieter, less obvious force that dictates the flow of wealth and opportunity: demographics.

Where people live, where they move, and how populations grow or shrink — these are the currents that ultimately drive economic gravity. That’s why all of the multifamily investments you see through Investor Club focus on areas where there is job creation. Where there is job creation, there is population growth, and people have to live somewhere.

Scale that concept up to a global level, and you start to see why migration, climate, and demographics are the real megatrends of the century.

Take China — decades of the one-child policy have created a demographic cliff. Contrast that with parts of Africa and South Asia, where populations are booming. Add to this the wildcard of AI, which could either amplify the advantages of youthful nations or offset aging ones.

For investors, entrepreneurs, and anyone thinking long term, the key isn’t where the puck is today — it’s where the puck is going. That’s the topic of this week’s Wealth Formula Podcast.

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

If a place is attracting young people, it must be doing something right.

Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. Before we begin, I wanna remind you that there is a website associated with this podcast is called wealth formula.com. Go there and uh, check out some of the resources we have, including the opportunity.

To join our accredited investor club. Uh, this is a. A group, uh, for a credit investors to see a potential deal flow that you wouldn’t see otherwise, uh, because they are private, uh, private nature. So the process is easy. If you are an accredit investor, go ahead and sign up and get onboarded. Then basically wait to see what kind of deals are out there and see if you’re interested.

Check it out. Wealth formula.com. Okay, so let’s start. Uh, let’s talk a little bit today about something that’s really important, maybe not appreciated as much. You know, we know that technology and geopolitics shape the world, but there’s a quieter, sort of less obvious force that dictates the flow of wealth and opportunities.

And that is demographics, um, where people live, where they move, and how populations grow or shrink. These are the currents that ultimately drive economic gravity. And that’s why all of the multifamily investment you see through say investor club, uh, focus on areas where there’s job creation. Why? Because where there is job creation, there is population growth.

And guess what? People have to live somewhere, right? So that’s something that you might be familiar with already, but scale that concept up to a global level and you start to see why migration. Climate demographics, they’re really the sort of mega trends of the century. All you have to do is take a look at China, right?

Decades of one child policy have created essentially a demographic cliff for them. And you contrast that with parts of Africa and South Asia where populations are booming. And then you add to this, the wild card of ai, which could either amplify the advantages of youthful nations or, or potentially offset.

Aging ones like China, as we mentioned. So for investors, entrepreneurs, and anyone really thinking long, uh, term, the key isn’t necessarily where the Pak is today, as the Great Gretzky once said. It’s where the puck is going, and that is the topic of this Week’s Wealth Formula podcast, and we will have that for you right after these messages.

Wealth Formula banking is an ingenious concept powered by whole life insurance, but instead of acting just as a safety net, the strategy supercharges your investment. First, you create a personal financial reservoir that grows at a compounding interest rate much higher than any bank savings account. As your money accumulates, you borrow from your own bank to invest in other cash flowing investments.

Here’s the key, even though you’ve borrowed money at a simple interest rate. Your insurance company keeps paying you compound interest on that money even though you’ve borrowed it. Net result, you make money in two places at the same time. That’s why your investments get supercharged. This isn’t a new technique.

It’s a refined strategy used by some of the wealthiest families in history, and it uses century old rock solid insurance companies as its backbone. Turbocharge your investments visit. Wealth Formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show, everyone. Today I’m joined by Parag, Dr.

Parag Khanna, a globally recognized strategist, bestselling author, and founder of Alpha Geo. His work focuses on some of the most important forces shaping the future of wealth, opportunity, uh, wealth, opportunity, migration, demographics, climate and technology. He’s advised governments, global institutions, and even military leaders on how to navigate a rapidly changing world, and his books, including Move the Future is Asian, have become.

Essential guides for understanding where people capital and power are headed. Uh, welcome to show up Pak, how are you? Thank you. Great. Great to be with you. And, uh, thanks again for coming all the way across, uh, the world from Singapore. Uh, I just got you off your, uh, ice bath and, and tea, so we should be ready to go right now.

Ready to rock? For sure. That is the best way to start the day. So I wanna talk to you about things that, you know, you’re, you’re an expert on. Um, one of the things that you talk about is, uh, migration as an investment signal. So you’ve written that migration is, is a driver of growth, which makes intuitive sense.

So what migration trends should investors be watching closely as signals, uh, for where capital will flow next? Sure. I mean, there’s many reasons to talk about migration and you know, just backing up for a moment, it really is the original globalization. So when we think of globalization as a force for good, a force for prosperity, a force for comparative advantage among nations and so forth, well migration, it all began with a single step.

Now, the reason this is so important today is because not only do we have the mass migrations of today, which can be both. Enriching and also destabilizing. Right? It’s not merely an unadulterated good look at the politics of the United States right now, for example. Yeah, in Europe. Yeah. Migration, turning migration off or on literally has a significant measurable economic impact.

Right now, for example, already economists are debating how. The extent to which cutting off inflows of migrants is going negatively impact GDP as we head into a recession, right? Among other things, right? So will it be wages or is it simply going to choke the innovative capacity? In the productive capacity and just the output of key industries.

Uh, so that’s something to, to dig into in a, uh, for a bit. But the real, one of the big reasons why I wrote the book is because. Unlike the last a hundred plus years where the world population was going like this, right? Quadrupling over the past century. Now we’re reaching a plateau, as you know, and this is why Elon Musk and everyone talks about, yeah, you know, peak humanity and civilizational decline and low fertility rates.

I mean, he’s, he’s late to the game, quite frankly. You know, those of us who work on these issues have been talking about this for a very long time. We’ve also noticed that it’s too late. A lot of people on social media are still kind of saying, let’s get, let’s have more babies, or These rich people have babies, right?

I just need to remind everyone so we’re on the same page. It’s not enough. It’s not nearly enough. There are not enough children. There will never be enough children. You need humanoids in robots or whatever the case may be, to take care of the elderly and the young. At this point, there’s so few young people.

So migration matters because where young people go in particular, take millennials, gen Z, gen Alpha, take everyone between the ages of five and 40. 35 years, or they’re up to 45. So a 40 year block spanning a couple of generations. Everyone today, who’s young, where they go, they vote with their feet, whether they’re moving from California to Texas, right?

You know, LA’s loss is Austin’s gain, or San Francisco Boulder, Colorado’s gain, or you know, Boise Idaho’s gain, right? It’s zero sum when you don’t have population growth, right? My people, I lose. You gain people, you win. So the zero sum nature of demographics and migration is what’s new because up until the present, every place was just having more and more children.

So it’s like, oh, well a million Indians left India, like no big deal. Right? Um, but once, once you stop having population growth, it’s, it’s zero sum. So in other words, why does it matter for investors? It’s three words. Follow the people. If a country, so you know, you and I can sit here and pontificate and we can say, oh, Europe is finished.

Europe is dead. Well, I mean, look, go to Lisbon, go to Berlin. Go to Athens. Yeah. Those places feel dead. No, they’re attracting young people. So it’s not necessarily at a country level. Right. But city by city, place by place. It’s, you can boil down all the complexity of the world. Geographically into this one thing.

If a place is attracting young people there, mu it must be doing something right. So, so in that regard, pro, so who, who are some of the winners and who are some of the losers when it comes to, at the city level? So here’s a place that everyone’s heard of Dubai, right? The United Arab Emirates, right as a country and Dubai as a city.

But there’s multiple Emirates. All of them are doing great, uh, to greater illustrious the UAE as a country. Fun fact, I, I grew up there as a child until the early eighties and um, it had 200,000 people. So it has more than 12 million today. So it’s the, by as a percentage of its own population, it’s grown, uh, by a factor of 60.

So, you know, it’s the fastest growing population in the history of the world. By, by far. Right. So, and it continues to grow and grow and grow. It’s the number one destination for new millionaires. So it’s also relevant in that sense. Ultra high net worth individuals are choosing to ditch Country X and move to the UAE, right?

So it’s, you know, Singapore, where I live right now, uh, it’s another winner, right? It’s very, very selective. It’s not about the total number of population increase, but rather the value add in terms of wealth. Invested in the economy, in real estate, in consumption, in financial services, and so on. So Singapore is also a clear winner since COVID.

You can tell that places like Lisbon, like Berlin, like Bali, right in Indonesia, you know, they call it silicon Bali. Now, it’s not really a hotbed of innovation. It’s just a place for digital nomads to go. But wherever you’re seeing young digital nomads show up and plant roots to the extent that young people plant roots at all.

You know, you’ve got a winning place, and that is a place where you might look to increase your exposure in some way, shape or form. So who, who are the losers that maybe there’s some, uh, I mean probably like Los Angeles or something like that, right? I mean, what. No, you know, I mean, I, I come to LA all the time and I, I get some of the macro dec declines data that people point to, you know, like net population outflow from California and LA is a source of that.

But they may not be fully considering new inflow, you know, new arrivals. They’re not seeing economic diversification, you know, and, and these kinds of things. So I, I’m still okay with, with la, um, as a whole being America’s second biggest city, you know, an enormous GDP. The California turnaround in general, that is kind of, you know, being, um, enacted, uh, right now that that’s underway.

Um, so let’s think more at, if you wanna look at the US for different reasons. Florida is not. Kind of, I don’t wanna say peak, you know, I don’t wanna call the peak, but you’ve seen a significant outflow now, or at least homes being sold because of the climate crisis and other kinds of issues, cost of living issues and so on.

So I think, you know. Florida is gonna be balanced out by other places. Um, so I, I mentioned climate, you know, the Gulf Coast of the US obviously, but let’s look globally, you know, places like Italy, places like Korea, places like Russia that are in just terminal population decline. These are the places where they’re selling.

They used to just sell a single home or a villa for one euro as a gimmick. Now you can buy an entire town, you know, for like a hundred thousand bucks. So there, you know, these places that are in structural population decline are gonna remain in structural population decline. Their entire geographies are gonna be backfilled and sold off to private investors to turn into resorts.

That kind of thing that that’s what’s happening. Almost a remapping of the world in light of these dire demographic changes. So I, I guess the obvious one that comes to mind for me when I think about big players, uh, in the global economy is China and you know, obviously with their. One child, um, laws that they had enacted for, you know, decades.

And then on top of that, there’s, there’s not really any immigration. I mean, what, what’s going on in China? Right, so China actually ha doesn’t technically need immigrants in the sense that you would say, how can the second largest population in the world behind India need immigrants? But it’s not about the number.

In the end, as I mentioned, it’s about the functions in the economy. So when you have what’s known as the 1, 2, 4 population pyramid where a young, young person has to provide for their two parents and their four grandparents, that’s just a big burden on the young, you know, breadwinner, right? Or earner.

Especially at a time of, you know, financial stress because of the cost of living in major Chinese cities. So what they do need though, is more El is more caregivers for the elderly, right? So China is importing people, but specifically, you know, uh, Filipino nurses or Burmese nurses and just young women even, even brides.

Of course they have their gender imbalance because not only the one trial policy, but the male preference, uh, led to an imbalanced gender divide, just like India has as well. So you wind up in a situation where you do need to import certain types of people, like elderly care workers, nurses, and uh, and and so on.

But they, but China is more rapidly automating through robotics. Some of these functions even faster than Japan. So in Japan, you don’t have enough of an acceptance. You have a cultural acceptance of technology, but you don’t have a mass deployment of technology to take care of the elderly at a communal level.

You don’t have telemedicine, right? And these kinds of things as rapidly deployed in Japan as you do in China. So China has a technological sophistication that’s allowing it to kind of, you know, circumvent some of the pain of this demographic adjustment. Interesting. And, and then the other thing that I think you’ve alluded to a couple times, um, I, I really think about quite a bit is the role of robotics and, and artificial intelligence.

Um, which is likely to be probably more rapid and a bigger impact than we. Can imagine right now. How, how do you think of that as I guess somebody who looks at, uh, through your lens? Well, there’s no question that it already has, having that impact and people are debating so much what the magnitude of that impact is.

Um, and that’s because they are looking at one particular industry, one particular country. If we’re gonna talk about this globally, what you really want to create is something of like a matrix where you say, okay. What is the specific technology? What are the sectors that you’re applying it to? In which countries is it deploying at what pace?

And then measure what impact it’s gonna have because that’s how things go in the. Un full, uh, unfold In the real world, there’s a lot of fiction in reality, right? So you can say, oh wow, we’ve got, you know, uh, full, you know, full self-drive vehicles. But okay. In some countries, the regulations, the roads, the uh, and so forth are amenable.

In other places they’re not. Right. In some countries you can afford those cars. In some countries you can’t. So think about the friction in it. So people have said it for a long time. Well, truck drivers, that’s gone, right? But guess what? Humans are still driving trucks so. Maybe instead of teams of two, you have, you have one, you know, or you have different kinds of shifts and so forth.

And these things still play. They play, maybe it’s gonna be, um, you know, long haul rather than short haul or media hall. Right. So, you know, look, you have to really, really splice and dice every sector to see the impact. So lawyers, right. Well, people thought it would hurt, affect blue collar people more than white collar people.

Turns out it’s the lawyer that’s redundant. Right. Or the paralegal that’s redundant. Whereas the plumber. We’re gonna need plumbers for a long time. Right. So I wanna see a robot contort himself to get underneath your bathroom sink and fix the plumbing. Right? Well, ain’t gonna happen. Right? So, so that’s the, the, in terms of robotics.

It’s gonna play out in that very, very jagged, um, non-linear, bumpy way. And of course, those among other things are powered by ai. So you’ve even got software engineers now who are needed, look at the jobs crisis for some of the most highest, best educated young computer scientists, right? So yeah. Never had such a high rate of unemployment.

Among us computer science grads at the same time that America’s finally Amer, you know, we’ve been saying stem, stem, stem, right? And lo and behold, Americans are finally churning away from humanities towards stem. Yeah, they learned the code for no reason at all. And now you can’t get a job in stem. So this is the level, uh, pace and intensity of disruption that, um, that, that we’re facing.

So AI is a key upstream driver of these downstream impacts on fields like robotics, which then impact the labor market. Um, but again, there’s lots of new jobs to be created in. Building more electric vehicles and more, you know, the, the, the key components, you know, you know, the cameras and, and sensors and so forth that those vehicles need.

So the question is, where are those gonna be built and what skills need to build those? And, and, uh, and are we gonna have tariffs on those sectors to encourage those components to be built in the us? So again, the knock on effects ripple through supply chains, um, from every new technology, every new, you know, innovation.

Yeah, the, you call this sort of Asia’s, you know, is Asia’s century. Um, you, you argue that Asia will ultimately sort of dominate the global economy. What sectors or regions in Asia in particular and, and, and, and why? Well, so Asia is obviously a huge, uh, uh, mega region, right? And then that’s sort of, you know, actually the map behind me is, is one of my maps of Asia.

So a lot of people when, when. You say Asia, they think only of East Asia, the Pacific ri, and Greater China and Japan. In reality, there is not a debate among geographers what Asia is. Asia literally reaches the Mediterranean Sea and the Red Sea. Right? So Saudi Arabia, which we think of as the Middle East, is actually west.

Right. So that’s how far West Asia goes into the east. It’s Japan to the south, it’s Indonesia and even Australia. You might say though, Australia, you could say it’s Oceania, but economically it’s very tethered to Asia and to the north it’s Russia. Right. So that’s Asia, right. This sort of, you know, diamond shape, set up powers and everything in between them, such as India, of course.

And Southeast Asia. So Asia has many drivers. Japan is the original Asian economic miracle. Then you have the tiger economies, as they were called in the, in the sixties and seventies, South Korea, Taiwan, Singapore, Hong Kong. Then China itself has become the largest economy in Asia and and the world. And now you have a new wave of Asian growth from another sub region.

Which is, uh, India and Southeast Asia, right? The Ian countries like Indonesia, Thailand, Vietnam, Malaysia, uh, and so on. So you, Asia is vast. Asia’s five and a half billion people. Most human beings on Earth live on this map behind me, quite literally, and that will always be true for the rest of our lives, our children’s lives, our grandchildren’s lives, our great grandchildren’s lives.

Most of the human species, like a substantial majority of the human beings on Earth, live inside this rectangle. They do not live outside of Syria. You in LA are in a great big city, but you are in a small minority of the human species. Yeah. Just so that we understand geographically what we’re talking about.

Yeah. So Asia’s got a long way to grow because it also says most of the world’s young people. Let’s tie it back to our very first topic, right? Most of the world’s young people are also on this map, and if you don’t have young people, you don’t have workers, you don’t have taxpayers, you don’t have innovation, you don’t have growth.

So I’m bullish on Asia, despite all the geopolitical tensions and so forth, because of some of these fundamental demographic facts, economic facts, infrastructure, investment, middle class growth, wealth creation, technology, capital industry. It’s all here. Yeah, I mean, you’ve mentioned a couple areas. I mean, certainly when you, you’re talking about, uh, you know, growth cities, um, you’re talking about Dubai, even Singapore, but there’s also, you know.

A variety of, of other issues that come with a number of these countries, like laws and immigration restrictions and all that. How is that all gonna play out? Do you, do you, do you anticipate some, some changes, uh, to various immigration patterns based on the needs of nation? For sure. You know, when I wrote the book Move I, I.

Almost realized they should have titled it moving because it’s not really a one way ticket. And we’re seeing this in the US obviously right now. Look at all the people that came to the US and have been deported, right? Or, you know, have, uh, their visas canceled even if they were legally in the country. So on over the cancellation of H one B, uh, you know, uh, policy as the Trump is threatening and, and the way Indians, you know, and Indian Americans are being treated right now.

So that’s just one example, but it’s really a, a pinball game. Migration has literally become a pinball game of billions of people, billions of lives. And that was the essence of what I was arguing, is that, you know, you can only. Politics in certain countries, whether it’s Britain or America, or Canada or Germany, uh, or Japan, you know, are gonna have an impact on the directionality, the vectors of migration.

But just remember you squeeze a balloon in one place, it expands somewhere else. So literally, you know, right. Right now we’re having Indians and Chinese think about leaving the United States because they’re not feeling welcome. But right now, the um. Uh, the German foreign minister, the Indian Foreign Minister, I believe is in Germany or, or vice versa, signing a bilateral agreement to expand immigration.

Right? And so one of the things I wrote about in the book was that, um, you’re, you have, you have a, such a fast, the fastest growing student population and professional population in Germany is Indian. You never would’ve imagined this. I, I actually went to high school in Germany. I lived near Hamburg, and I was the only Indian guy, an Indian American, but ethnically Indian guy for like, you know, hundreds of kilometers.

And now I hear Germany all the time, and it’s like Indians everywhere, right? So in, in the, in the blink of an eye, you have new migration vectors forming as people relocate to geographies where they’re welcome geographies of opportunity and so on. So. One of the things as a general statement, we just never had this volume of migration between regions of the world as we have today.

You just get on a plane, you don’t have to take a ship, uh, like the, the Puritans in a land on Ellis Island, like, you know, early 20th century migrants. Um, you literally just get on a plane. Just think about the volumes of people moving. Every single day, but the directions in which they’re moving. So you’ve never had so many Asians in Europe, rather than they’re having America as their default preference.

You’ve never had as many Asians in Central Asia or in East Asia as you do today, as many Africans in Europe, as many Latin Americans in North America, but now some moving back. So again, think of it as a giant pinball game of very thick vectors of migration that are, that are changing direction all the time.

I dunno if you have any views on this, but it, it’s interesting to me that within all of the positive things that come from the immigration in various countries, there’s just like escalating tensions across the world, a lot in Europe, obviously in the us uh, as a reaction to globalization. Well, how, uh, what’s your take on that?

So a couple of things. You know, blaming globalization or scapegoating globalization for domestic policy failures is a worn out or not so worn out, apparently political game, right? Yeah, you can still hear JD Vance and Elon Musk and whoever blame the globalists, right? The globalists get blamed for everything from liberal agendas like high tax and mass migration to being warmongers and wanting to perpetuate the Ukraine war, and so on and so on, right?

So every, everything that’s global and globalists is a convenient bogeyman. To deflect from the fact that the US has not had sufficient trade adjustment assistance, not retrained workers, um, you know, not, not, um, redistributed income. All of these not built enough housing, right? You know, you can blame globalization for everything because globalization doesn’t have a constituency, a voice to defend itself, right?

Um. So, so I want to be clear that just because you hear people talking about the anti-globalization backlash, it doesn’t mean that A, you know, globalization is B, that globalization is actually to blame, or that C bashing globalization will actually make it better, because in reality, globalization always wins.

Globalization, whoever, whoever it is, is sitting there laughing because in the end we always turn back to globalization. Otherwise we wouldn’t be in this world that we’re in of hyperconnectivity, of transportation, of communications, of capital flows, of all of these things. Right? In the end, we always, you know, you and I are old enough to remember the nine 11 terrorist attacks 25 years ago.

Then you had the global financial crisis, then you had Trump. In 2016 and Brexit, then you had COVID, um, and, uh, and so, you know, five or six episodes in just 20, 25 years, and every single one of those episodes, what did the headlines say? It’s the end of globalization, right? Every time. Every time. And it’s always been wrong.

So we need to, if you want to have a serious conversation about this, and now I’m speaking obviously about our politicians and, uh, whether it’s business leaders or or political leaders, they need to get serious about the fact that the world has been remains and will be globalized in many ways. That it is their duty, their responsibility to harness those forces for public domestic benefit, for their constituents, for their citizens.

If they don’t have the capacity to do that, they should be the ones to step aside, not the globalists, quote unquote. Yeah. Interesting. Um, what, you know, obviously a majority, probably 90, certainly 95% of my audience is in the United States. What do you, when you look at the world through your lens again, where do you see the US headed and, you know, what are, what are some possible, uh, impacts of that?

Right. So, you know, uh, it may sound like I’m some kind of, uh, dec declines, but I’m actually very bullish on North America as a continental mega region, and America within that. If you rank the regions or continents of the world by their degree of self-sufficiency, like having enough land, labor, capital, industry, talent, technology, you know.

We natural resources, right? North America ranks number one by far, peace and stability right? As well, which is not to be discounted. So there are not just small but massive structural reasons to be very pro North America and to be continental list. And, and I am, that’s the kind of geopolitical tradition that I have trained in and written about in, in my books and so on.

And Ida potential is very much still there. That by the way, includes, I might add, you know, Greenland as a future member of a North American Union or part, part of the United States. No, no, no. Just part of the North American Union. Right. A or, or. Let’s create a milder term for it. A Federation of North American states, right?

And the United States is a sovereign state. Mexico’s a sovereign state. Canada’s a sovereign state. Greenland’s a sovereign state, uh, but for members of this federation, right? And, and I think that’s effectively what is happening in what will happen. We’re already in that in many ways, right? If you look at the functional reality, again, the trade flows, the supply chains, the capital flows.

Again, fun fact for your listeners. What are the two most busily, trafficked borders of Le legally not, not even illegally, legally traversed borders on the planet Earth? I, I mean, I’m kind of giving it away, right? Right. I think everyone should know. Right. And we need to appreciate the US Canada relationship.

The US Mexico relationship are fundamentally stable, right? These are the two busiest borders on earth by this much, right? And there’s not a third place that is even remotely meaning. And so we need to really, um, you know, kind of, you know, be, be grateful for it. Harness it. So I’m very bullish again on, um, on, on North America and, um, and I think the US is actually gonna sort itself out.

I’m also long on this reindustrialization, you know, industrial renaissance kind of paradigm too. It can be done. There’s no, you know, rule that is so steadfast that can’t be modified. No technology so arcane that we didn’t already invent that we can’t re domesticate. Nothing that we can’t produce cost effectively through technology on shore that we have to get from offshore.

It can all be done. It’s happened with oil and gas and shale energy. It’s happened, it can happen with semiconductors. Um, and, and on and on it goes. Yeah. Um, any particular areas in the US that, I mean, if you narrow in on, uh, geographically, you know, I know you mentioned sort of the sort of peaking of, of Florida, but.

Is there is particular areas within the US that might surprise us in terms of, of, of growth possibilities. Um, it kind of just, yes. I mean, the short answer, yes, it’s the Great Lakes, right? And so this is how I began the, the, the opening chapter of the MO book because when I was writing that book, it was the kind of post-industrial, post global financial crisis tail end of the already.

De industrializing wave that had hit the region and it was on its last legs. And you know, Detroit was bankrupt and so on. Yeah, yeah, yeah. But if you look today, there’s already green shoots of an industrial revival. You know, people are moving in, home, prices have come down, and then you have the climate resilience, right?

So the combination of hitting rock bottom. Attracting, you know, re and revitalizing industries, um, and attracting young people are all, and climate resilience, all of those things favor Michigan, right In the Great Lakes region. Wow. Okay. So, you know, I first wrote this right after the financial crisis. So in 2010, um, I wrote an article titled, where Will You Live in 2050?

So when that came, when that was, um, published, it was like, what Michigan? Are you joking? And I gave all the reasons why. And so then the book move came out a decade later and I used those passages as the opening chapter of the book because it, it really already started to come true. And now in the post COVID.

Landscape as we look at, again, the industrial renaissance in the US and some of these patterns and of course accelerating climate volatility affecting places like Arizona to Florida and so on, you that amplifies and accelerates the Great Lakes, uh, stories. So I’m more bullish than ever on that region.

And, and as Alpha Geo is a software company that does geospatial analysis on these geographies, um. We brought that to life with our data where we kind of correlate every new factory that’s being built, where tax receipts are increasing as people move in. The inflows of people housing, market stabilization, climate resilience, and models, new infrastructure spending.

We put all of that literally physically as pin drops on maps and uh, and again, Michigan is looking good, so, so what kind of growth are they seeing? Um, in Michigan? I, it’s like a shell big surprise to me actually. So, well, it’s not so much the growth rate because that’s gonna be, you know, sort of that’s gonna.

Very significantly potentially year on year. But again, it’s, it’s the reversal of negative trends and it’s the, it’s definitely a marked year on year increase in population, right? And, uh, and, and therefore again, tax receipts, people buying homes, uh, and and so forth. So, um, I guess one more question and, you know, sort of a world shaped reshaped, I guess, by climate migration, demographics.

Do you have a sense of what asset classes you think might win because of some of these, you know, major shifts? Yeah, for sure. I mean, you know, we could, we could run through the whole gamut, but right now we’re in the middle of a major global CapEx boom, right? The investments in, in mobility, transportation, the investments in, um, energy, obviously everything from, from still LNG to, to nuclear and wind and solar and, um, and, and, and hydrogen infusion, right?

And of course, uh, digital. Right. So everything from internet cables to data centers, to AI training models. So you know, the, the, I call it the connectivity asset class that encompasses transport energy communications, right? The overall infra asset classes are all doing well. You have to. Manage your exposure, whether these are privately driven or public, private driven, you know, or backstop kinds of ventures because of the long and CapEx cycle.

But I’m obviously law on infrastructure and that’s been a big theme, you know, in, in, in my work, uh, certain commodities, obviously because climate volatility is accelerating. Geographies of food production are gonna shift. Um, then I’m big on anything that is urbanization when it comes to the top 30, 40 cities in the world that are gonna be the magnets for talent, right?

So that’s gonna be everything like around, um, real estate, but from like a rental, from an asset standpoint, right? So multifamily mixed use. Kinds of developments that are, you know, last mile, very convenient. Have retail medical education, um, you know, multi-generational housing, walkable. Um, all of those kinds of, ask all of those types of functionalities that you would ideally see if you were to start from scratch and design livable communities.

Well guess how many of those exist in the whole world today? Like zero, right? Zero. Yeah. Yeah. Here we are. You know, and this is a great way to wrap it all up. Here we are, 8 billion people, soon to be 9 billion people, but probably peaking around there ish that are moving and relocating ourselves to concentrate in anywhere from 50 to a hundred or more.

I mean, there’s a long tail of smaller cities, right? But the places that people wanna be, where you’re gonna have economic growth and dynamism and resilience and innovation. 50 really important cities. Not forget 200 countries, right? 50 important cities. Where those who can afford to, who are allowed to relocate and move, are gonna migrate to those places, and those cities are gonna thrive economically.

And so you want to be investing in the infrastructure, in the talent, in the skills, in the fixed assets and in the, in the businesses of those people in those places. So yes, you can understand it from the standpoint of asset classes, like I could say, sure, I’m super long on Asian emerging market equities, right?

Um, or, you know, super long on, on digital connectivity, but I’m also long on certain geographies and you just wanna have exposure to those. Yeah, yeah, yeah. Fascinating stuff. Well, uh, tell us a little bit about, uh, alpha Geo. So we’re a geospatial software company, AI powered from top to bottom using AI to downscale very large data sets like climate models and other kinds of market data and put it all together into one map based plane and run scenarios and simulations on how economies are gonna perform so that you can, we can guide investors, especially real estate infrastructure, data centers and so on.

So real estate is a huge area for us. So, as I mentioned before, whether you’re the outliers like Michigan, or whether it’s what neighborhood of Manhattan, uh, or la our models help, uh, you know, corporate investors and real estate investors kind of pinpoint where they wanna locate their assets. So, you know.

Specific Palisades fire tragic, uh, event from last year. Um, where do you wanna avoid fire risk in the future? Where can you buy a home where the insurance premium is not likely to go up as much because of the fire defense measures or the resilience of the location? Proximity to water supply, avoiding drought.

So we calculate all of that and we tried it. Our clients, everyone from high net worth individuals, like n of one or two, you know, I have one property, I have wanna buy two or three, four more properties or the world’s largest sovereigns and pensions are also customers of ours, and they also use the data in the same way.

Fascinating stuff. And again, the, the, the, uh, latest book is It’s Move, right? That’s the name of the book. Yeah. Move in a and that can be, uh, found pretty much everywhere, I assume. Uh, Parag, thanks so much for being on the show today. It’s been a, uh, very interesting conversation. Lovely. Really a pleasure.

Thank you so much. You make a lot of money, but are still worried about retirement. Maybe you didn’t start earning until your thirties and now you’re trying to catch up and meanwhile you’ve got a mortgage and private school to pay for and you feel like you’re getting farther and farther behind. Good news.

If you need to catch up on retirement, check out a program put out by some of the oldest and most prestigious life insurance companies in the world. It’s called Wealth Accelerator can help you amplify your returns quickly, protect your money from creditors, and provide financial protection to your family if something happens to you.

The concepts here are used by some of the wealthiest families in the world, and there’s no reason why they can’t be used by you. Check it out for yourself by going to wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show, everyone. Hope you enjoyed it. Uh, interesting stuff.

I think, uh, you know, we’ve talked about population demographics, uh, on the show before. Uh, it is, and it, it continues to be a very, very important, uh, variable when it comes to, uh, wealth. And so I think it’s something to pay attention to. As I emphasized before you see this, when we have. Opportunities coming through our investor club, for example.

We often see, uh, you know, we often have deals, for example, in Dallas-Fort Worth, massive growth in Dallas-Fort Worth. And that’s why you have, you know, companies coming in. Uh, you have, uh, you know, lots of new jobs, people moving there because tax, same thing goes for Charlotte or Phoenix or any of these places.

But that’s one of the things you really gotta look at. When you make your investment. So anyway, that’s all I have this week, uh, on Well, formula Podcast. This is Buck Joffrey Signing off.

522: What is a Dynasty Trust? Aug 31, 2025

One of the realities of building wealth is that the more you have, the more you have to lose. Asset protection and estate planning aren’t just legal technicalities—they’re essential parts of safeguarding everything you’ve worked for.

The worst time to plan is when you actually need it. If you wait until you’re facing a lawsuit, a creditor, or a sudden death in the family, it’s already too late.

Think of asset protection like insurance. Most of us wouldn’t drive without auto insurance or own a home without homeowners’ insurance. Yet many wealthy people operate businesses, hold investments, and build family wealth without putting legal structures in place to shield those assets. One lawsuit or one major life event can undo decades of hard work.

On the estate side, not having a proper plan doesn’t just cost money—it creates stress and hardship for your loved ones. Without a solid estate plan, your family could end up tied up in probate courts, fighting over assets, and losing valuable time and resources.

We’ve talked on this show before about basic steps everyone should take—like forming entities to protect your business or making sure you have not only a will, but also a living trust. Those are the starting points.

But as your wealth continues to grow, your planning needs to grow with it. High-net-worth families have to think about more robust strategies—things like dynasty trusts, asset protection trusts, and the best jurisdictions to set them up.

These aren’t just technical details. They’re the difference between wealth that gets preserved and multiplies across generations and wealth that gets chipped away by taxes, lawsuits, and poor planning.

To help us understand these tools at the highest level, I’ve invited perhaps the most respected attorney in this space—someone who is seen by other attorneys as the thought leader in asset protection and estate planning—Steve Oshins. Steve has pioneered strategies that are now industry standards, and his work has shaped how families across the country protect and grow their wealth. You’re going to want to pay attention this conversation closely.

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

If your trust is drafted really well at the inception or via the first decanting, you probably will never have to decant the trust again simply because you’ve already built the flexibilities into the trust.

Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast coming to you from Montecito, California. Before we begin, reminder. There is a website associated with this podcast called wealth formula.com. Go check it out for the latest resources there. And also, uh, remember that if you are an accredited investor and you would like to potentially see deal flow, uh, go to wealth formula.com and sign up for the investor club.

You’ll get onboarded. At that point, potentially, uh, see opportunities that you wouldn’t otherwise see that are limited for accredit investors. Again, that’s wealth formula.com. Sign up for investor club. Now let’s, uh, let’s talk a little bit about issues, uh, related to, uh, building of wealth. One of the realities of building wealth is that the more you have, the more you have to lose asset protection and estate planning Art.

Just legal technicalities. They’re really an essential part of safeguarding everything you’ve worked for. You know, the worst time to plan this stuff is when you actually need it. So if you wait until you’re facing a lawsuit, a creditor or a sudden death in the family, it’s already too late. Right? Think of asset protection like insurance.

That’s basically what it is. Most of us would drive without auto insurance or own a home without homeowner’s insurance yet. Many wealthy people operate businesses, hold investments, build family wealth without putting legal structures in place to shield those assets. And all it takes is one lawsuit, one major life event that can undo decades of work on the estate side.

Not having a proper plan doesn’t just cost money. It actually creates an enormous amount of stress and hardship for your loved ones. Without a solid estate plan, your family could end up tied up in probate courts fighting over assets, losing valuable time and resources. Now, we’ve talked on this show a lot about the basics.

Everyone should take forming entities on the asset protection side, of course. And when it comes to the estate planning, you gotta have both a will and a living trust. Okay? You’ve got to do that. If you don’t, uh, if you don’t look it up right now and, and you’ll understand why it has to do with probate, but.

We’re going beyond that today, but your, as your wealth continues to grow, your planning needs to grow with it. High net worth families have to think about more robust strategies. Things like dynasty trust, asset protection trust, and the best jurisdictions to set them up. So these aren’t just technical details, they’re really the difference between wealth that gets preserved, uh, and.

Debt that does not. So to help understand the nuances of this stuff, particularly this concept of the dynasty trust, I’ve invited, um, one of the most respected attorneys in this space. Someone who’s really seen by other attorneys as a thought leader who essentially kind of follow his lead. Uh, Steve Oshins.

He’s pioneered strategies that are now industry standards and his work has shaped really how. Families, uh, across the country, high net worth families really protect and grow their wealth. You’re going to wanna listen to this ’cause even if you are not wealthy today, probably are on your way. And, uh, this, this could very much be about your.

Your future self, and we will have that interview with Steve Oshins right after these messages. Wealth Formula banking is an ingenious concept powered by whole life insurance, but instead of acting just as a safety net, the strategy supercharges your investments. First, you create a personal financial reservoir that grows at a compounding interest rate.

Much higher than any bank savings account. As your money accumulates, you borrow from your own bank to invest in other cash flowing investments. Here’s the key. Even though you’ve borrowed money at a simple interest rate, your insurance company keeps paying you compound interest on that money even though you’ve borrowed it.

Net result, you make money in two places at the same time. That’s why your investments get supercharged. This isn’t a new technique. It’s a refined strategy used by some of the wealthiest families in history, and it uses century old rock solid insurance companies as its backbone. Turbocharge your investments.

Visit Wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Today my guest on Wealth Formula podcast is Steve Oshins. He’s one of the nation’s leading experts on estate planning and asset protection. He’s based in Nevada and is really best known for pioneering strategies like the Nevada Dynasty Trust Hybrid Asset Protection Trust.

Uh, he also publishes the annual state rankings for Dynasty and Asset Protection Trust tools that attorneys across the country really rely on. He is really a thought leader in this field, and I really want to emphasize that. Um, a lot of people kind of listen to what he does and kind of pivot their own law practice based on what Steve is, is coming up with.

Uh, so really excited to have him. Steve, uh, welcome to the show. Thank you, buck. It’s great to be here. So Steve, let’s, let’s start out with this. Um, people in this, um, you know, in this audience, they hear about all sorts of different kind of trusts. What exactly is a Nevada dynasty trust and why is, uh, Nevada often considered one of the best jurisdictions for these types of things?

Well, let’s start with what a dynasty trust is. A dynasty trust is an irrevocable trust that continues for as long as applicable state law allows. Um, in many states that will be roughly 120 years, and in other states like Nevada, it can be 365 years, and there are other states where it can be perpetual.

So why would we wanna set that up? Because for as long as the trust is in existence, those assets are protected from estate taxes. Creditors and divorce and spouses are the beneficiaries. So all in all, we want to maximize the duration of the trust so we can protect the assets from estate, taxes, creditors, and divorce for the children, the grandchildren, the great-grandchildren, and so on and so forth.

So why is Nevada one of the leaders? Well, Nevada and South Dakota are the leaders and no state is even close. There’s a. Big drop off before you get to the next batch of states. Nevada and South Dakota are basically neck and neck. The, the dis, the difference is that South Dakota allows a perpetual trust, whereas Nevada allows a 365 year trust.

In my opinion, the world might not even be here in year 360 6, so that’s not a big deal. Uh, basically you go somewhere where you have a relationship with a well reasonably priced trust company. Uh, that that bills on a flat fee basis and it’s a low number that it’s not gonna scare anyone away. And then you, whether it’s South Dakota or Nevada, wherever your relationship is, and my best relationships are obviously in Nevada, that’s where you go.

These, you can’t go wrong with either of these two states. Got it. So with, uh, for someone with significant wealth, what are the real benefits of setting up a dynasty trust? Um, obviously, you know. You can talk about them, but asset protection, estate planning, something else. Sure. There are three different things that I’m looking for.

I’m looking for asset protection. I’m looking for state tax avoidance, and I’m looking for income tax savings opportunities. Um, not every client’s gonna fit into all three of those. Probably every one of them fits into the asset protection. Depending upon the net worth of the client, we may or may not care that much about the estate tax.

Um, right now. We’re looking at roughly a $28 million state tax exemption. And January 1st, 2026, it’s gonna go up to 15 million per spouse. So there’s $30 million per married couple. So if you’re under that number, especially substantially under that number, we’re not really focusing in on estate tax savings at this moment.

We can always make up for that in the future. Uh, for those people. We’re gonna be more in the asset protection world, and we’re also gonna look for. Income tax opportunities. If they are approaching the, the 28 or $30 million number, assuming they’re married, then we start thinking deeply about the estate tax avoidance, um, strategies.

And if we wait a little bit longer than we should have, which is fine, we can always make up for what we didn’t do years ago. So. Nobody should ever feel rushed. But if you’re, if you’re a married couple and you’re worth over $50 million, clearly you need to make, to set the dynasty trust up and make a big gift and, and maximize the use of your exemption.

Now, for those people that are under 30 million, we just take it on a case by case basis. Yeah. And, and that brings up a good question ’cause we we’re sort of talking offline about this, but, you know, at, at what point do you, because you brought up the idea that this is not just about estate planning, it’s also about asset protection.

So. What is, what is the right time? I mean, I guess you said it case by case, but give, give us an example of, you know, a situation where you might wanna start thinking about doing this. Uh, there’s obviously other ways that people are setting up asset protection, they’re doing offshore trusts and all that kind of thing.

What, what’s the right time, the right person for this at the lower level, the right time? Well, I, I should actually answer that by telling you the wrong time. Long time would be after a person has um, already had a problem and they’re in the middle of a problem. It’s not necessarily when they were served with a lawsuit, it’s when the problem started.

So the right time is going to always be while the coast is clear. It’s kind of like buying insurance. You can’t buy homeowners insurance while your house isn’t on fire. You can’t buy life insurance while you’re in hospice. You can’t buy health insurance while you’re getting chemotherapy. You know you have to buy it well in advance while the coast is queer.

There’s a chicken and egg column here. Uh, most people don’t want to pay to get something done unless they feel like there’s something they’re doing it for. That’s the wrong way to look at it. We have to look at it like, um, I’m a wealthy person, and we never know if today’s gonna be the day that something happens.

So let’s set it up. Just like you buy your, your insurance, your homeowner’s insurance, or your life insurance, your health insurance, or you buy your umbrella insurance, you buy it well in advance to the problem, and if a problem does occur. Thank God you, you set it up. Um, interestingly, you asked me about the types of trusts.

I know we’re gonna get into that. Yeah. Foreign Asset Protection Trust. I’ve never done one, but um, I just posted on LinkedIn this morning, 29 Foreign Asset Protection Trust cases that have gone south. So the case law is really bad there. That’s why we go to the Hybrid Domestic Protection Trust. And I know you’re gonna be getting there at some point.

Yeah. Yeah, absolutely. And, and I think that was one of the reasons I wanted to bring up this thing, because pe there’s people who are in this, you know, uh, situation, uh, where, you know, they’re high earners and, and say they have, uh, maybe they’re not ultra high net worth per se yet, but they’re, you know, they’re making over a million dollars a year.

They, they’re 40 years old and already have a net worth of 10 million. Should they be looking at this yet or not? I mean, if, if they’re looking at some sort of asset protection strategy anyway. Uh, a lot of people are looking offshore and so should they, even though their net worth is not 30 million, 40 million, something like that, should they be looking at this kind of option?

I don’t think the anybody should be looking offshore. Um, you know, with the 29 cases that I posted on LinkedIn this morning, uh, I, the problem is I don’t see any case where, where the person actually won. They either lost in some way or they had to sit in jail to protect their assets. And, uh, my, uh, my opinion of sitting in jail to protect your assets is, I wouldn’t do it.

No, I get that. But What, but what about, what about those people who are not at 30, 40 million? I mean, is this an option for them? Because they want asset protection. Sure. I get a lot of those two to $10 million doctor types, for example. Tons of those. Um, the, you know, the people worth even 1 million. If they know that they’re probably in a, in a type of industry where they’re gonna be sued, we can at least get it started.

There’s a point when it’s too small and it’s just not worth it. But I generally look for a $2 million net minimum net worth. That’s right. I mean, and I think the, uh, that’s helpful because I’d say probably the average net worth of the listener here is about 5 million, and they’re probably, uh, you know, high net worth people just in terms of, uh, you know, high earning doctors.

This is, this is the show for high earning doctors. So, but that’s good to know. So, um, okay, let’s go back to. Uh, you know, some of the mechanics here, so, a dynasty trust is designed essentially to last for centuries. So how does it, how, what, what is it that allows families to pass, uh, wealth across multiple generations without it being eroded by estate and gift taxes?

It’s, it’s actually very simple. You make a gift into a dynasty trust and then you file a gift tax return and you allocate generation skipping transfer tax exemption to the trust. Once you’ve allocated the generation skipping transfer tax exemption to the trust, no matter how large that trust grows, those assets are not subject to estate taxes for as long as applicable state law allows, which as we discussed earlier in Nevada, would be 365 years.

Right. And so here’s the, here’s the other question that a lot of people ask me about. Um, just in general when I mention that, like, I, I think these are good ideas for people. If they say, well, if I put money into a dynasty trust, do I completely lose control? Because of course. You have a trust, um, and that is no longer you, it’s out of your estate.

How do you structure these trusts so that families still have flexibility and influence without sacrificing protection? Uh, good question. It depends which attorney you go to. If you go to an attorney that, uh, didn’t take, uh, state tax co, um, code in, in law school, then you end up with a form agreement and the attorney’s petrified to, uh, make any adjustments to the document.

But any attorney that understands the estate tax code knows how to draft, where the grantor or settler of the trust who puts the assets in, can be the investment trustee of the trust. So generally we’ll have the seller who sets up the trustee, the investment trustee, or we’ll use the settler’s, spouse, or child or best friend or brother or sister as the investment trustee.

And then we’ll use a close friend as the distribution trustee, or we’ll use the Nevada based trust company as the distribution trustee. If we use a close friend is the distribution trustee, then we use the. Trust company in Nevada as a jurisdictional trustee. Um, some of, of what I just said won’t apply depending upon what we’re trying to accomplish.

For example, if we’re trying to avoid state income taxes, then we’re not going to use the grantor or grant or spouse as a trustee or anyone else who lives in their state or in certain other states that would cause a tax. And then regardless of who we pick, we can always have give the grantor. Who sets up the trust, the power to fire and hire trustees.

So even if the grantor’s not a controlling trustee, the grantor is the one pulling the strings in the background who always has a friendly trustee serving who will, uh, presumably do whatever the client wants. You can also, can you not Steve, have basically the idea that the trust can, you can, you can have a situation where a trust like this owns an LLC.

That LLC, uh, has a manager, right? So say for example, your assets are owned by this LLC, you don’t necessarily have the trustee to have to go do everything every time You wanna invest, every time you want to, you know, make a distribution or whatever you’re doing. You can have an LLC that is owned by a trust.

Choose a manager for that LLC and that could be you, correct? Sure, yeah. Yeah, sure. It depends how the trust is drafted. Sometimes you don’t need to do that. Um, you know, we can save you from an LLC fee, um, because you didn’t need it. But if there was a trust where you didn’t want whoever the trustees are to handle the direct manage management of the assets, yes, the assets can be transferred into an LLC owned by the trust.

Then whoever you want can be the manager of that LLC. Now we have to be careful if we’re trying to save state income taxes and we’re trying to avoid, uh, any contacts to the, the grantor’s home state. But generally, yes, you can have assets in an LLLC owned by the trust. Right. And I, I guess it’s kind of like in that regard, having your cake and eating it too.

In a lot of what we do, that’s the case. Yes. Right. Okay. Um, let’s, let’s talk a little bit about taxes. You mentioned this before, but beyond estate taxes, which, you know, it’s gonna be an issue for some, not for others. Um, you’ve, you’ve written that state income taxes obviously matter a lot. How can using a, a trust in Nevada help a California or New York family, for example, legally avoid state income taxes on investments inside the trust?

First of all, we have to make sure the trust is its own separate tax paying entity. So we have to set up what’s known as a non-grant for trust and, uh, we’re all gonna have to get a whole lot more familiar with those now that we have our new tax act. Because income tax declining is the new estate tax declining, uh, for a lot of these clients who have net worths below the the new permanent numbers.

For the exemption. So we have a non-grant or trust, meaning the trust pays its own income taxes except to the extent it makes distributions to the beneficiaries. And, uh, for New York and CA and California, we have to avoid any resident trustee. California has a, a, a very unique statute in that it prorates the tax on undistributed taxable income.

Based on the, partially based on the number of California resident trustees versus non California resident trustees. So we’re gonna avoid California resident trustees. New York’s, uh, statute, uh, causes a full New York State income tax if there is one or more New York resident trustee or $1 or more of New York sports income.

So you even have to move that little $50,000 in New York rental property out of the trust so you don’t screw up the taxation of that trust. Uh, so by setting up a non grantor trust in Nevada with no resident trustees from the client’s home state, we can avoid the New York or new or California state income tax on any taxable income that’s not sourced to California or, or New York sourced to means, uh, for example, a business operating in California or, or New York.

Or real estate operating or, or that is situated in California or New York. So this will work on selling a business, even if the business was located in that state. You can sell the business. That’s the, that’s the big opportunity here. Or investment portfolio or outstate real estate, for example. So it works for a lot of assets.

You just mentioned something I think is kind of important in that, um, so your trust could, um, you know, these kind of trusts can own. Active businesses, right? They can correct. Own active, and, and that, bring that up because you think of, uh, people often think of trust, primarily owning, you know, just stocks and, you know, passive assets.

But you can have, you can have, uh, a, an active business and this is a really, really important point potentially for business owners. Uh, thinking about exits. Is that fair? Yeah, we, our greatest opportunity is the non grantor trust where you’re gonna exit your business and sell it just because the business was operated in New York, where California as our examples doesn’t mean you can’t sell it, which is selling an intangible asset in out of that trust and avoid the state income tax in the sale.

How much control at that when you have, when you have a non-grant or trust, Steve, is that a lot less flexible for somebody in terms of control, um, or what they can do, uh, with that trust compared to a grantor trust? It’s, it’s definitely, I don’t know if I wanna say a lot, but it’s definitely less flexible than a grantor trust, uh, because you can, you can really mess it up easily if you give the grantor too much control.

We don’t want to use any local resident trustees or have administration in our, our. Grantor’s home state. Um, so you are giving up the direct control that you could have had with a grantor trust, but at the same time, for example, in California, we’re saving 13.3% on the sale of the business. So, um, it’s a question for every individual client, are you willing to give up the direct control in exchange for saving X percent on the, the sale of the business?

And almost always the answer is yes. So then the other question people have is once that money goes into the trust side of things, okay, whether it’s an LLC, whatever the case may be, what is okay to use, uh, that money for and what is, it’ll not okay to use it for, well, it’s okay to use it for anything that’s legal.

That would be the answer for any trust. Now if, if there are state income tax, if there’s state income tax planning going on, then we have to be very careful. Um, if the, if the grantor was a resident of either New York or New Jersey, which has a similar statute as New York’s, you can’t even have $1 of local, um, source income or you screw up the entire trust.

So you have to make sure you distribute any source income out of the trust and cleanse the trust. Uh, for other states, it’s just gonna. It’s not gonna, uh, destroy the tax savings in the trust. It’s just going to not get the tax savings for that particular income. So the New York and New Jersey residents especially have a, have more to worry about there, but basically ask, well, I guess the question is like, you can’t just give, make yourself distributions from that trust, uh, for personal expenses.

Can you? It depends what we’re trying to accomplish with the trust. Yeah. Um, well, the way we always draft our trust, we use in. An independent distribution trustee, as you know, to make the distribution decisions. Uh, now, the, now when you say you can’t just get it, um, I, you’re referring to a version of the trust where the settler or a grantor is a discretionary beneficiary, which would mean it’s a completed gift.

Domestic asset protection trust. One where, uh, let’s say buck sets the trust up for the benefit of buck, buck, spouse, and buck’s, descendants. In that case, if it’s a grantor trust, you just have the distribution trustee make the distribution decision to buck. If it’s a non-grant tour trust, then we need the distribution trustee plus any one adverse party, meaning, for example, one of your children whose interests are adverse to yours has to sign off on the distribution to you or to your spouse.

So with the non-grant tour trust, as you can see, um, it’s a, it’s a little. Tighter that we have to draft it and we have to be a little more careful not to mess up what we need to do in order to avoid the taxation going back to your return. Got it, got it. Okay. Well, you, um, you also created something called the hybrid Nevada Asset Protection Trust.

So what, what makes that different from the traditional one and, and why might people prefer it? For asset protection purposes, um, your, your basic options are either a foreign asset protection trust. I already, and I already told you, I’ve identified at least 29 cases that have gone south, so that seems to be a bad move at this point.

That was the way people were. Planning back in the eighties and nineties, but nowadays, I don’t think it’s smart or a regular domestic asset protection trust, which is one where you set it up in a state like Nevada or South Dakota for the benefit of yourself and your family. Um, those have been working well.

Uh, we don’t see a lot of case law. There’s only one bad case on that that I’ve ever seen. Uh, in fact, there was a local, uh, a recent good case, although it’s still an ongoing case, um, on those. And otherwise, so the issue is, can a person who lives in the state that doesn’t have a statute like this, set one of these up and have the law where the trust is, is set up, apply for creditor protection purposes?

And we’re still not a hundred percent sure on that. There’s almost no case law, which means it seems to be working. But if we wanna work around that and get to the point where we are as close to a hundred percent success as possible. We don’t make the settler a beneficiary of the trust. For example, uh, buck, you set the trust up for the benefit of your spouse and your descendants, assuming it’s coming from your separate property, not your community property with your spouse.

So you’re not a beneficiary. You set it up for spouse descendants. That because you’re not a beneficiary. We know that works in all 50 states, but we still set it up under Nevada and we build in this hybrid provision, which is the power of a trust protector, like your best friend. To be able to add and remove beneficiaries, including the power to add you.

So in the extremely unlikely situation where you need something outta that trust, which basically means your spouse predeceased you, and you run out, ran outta money, we have a backdoor ability to give you something outta that trust that’s better than any other asset protection option out there because it doesn’t have the potential taint that you’re a beneficiary of your own trust, which is what potentially can get you in trouble.

Got it. Um, let’s talk a little bit about decanting. Um, it’s basically the ability to pour an old trust into a new one, right? So how does that keep the flexibility over decades? Centuries? Okay, so it’s an interesting question because if, if your trust is drafted really well at the inception or via the first canting.

You probably will never have to decant the trust again simply because you’ve already built the flexibilities into the trust. Where we see the decanting would be where you have an inferior trust agreement. Uh, you know, a lot of the estate planning attorneys weren’t trained well and they just grab a form and you know they’re doing something that.

That meets the minimum, minimal state, uh, standards of what one would expect from an attorney, but they don’t do anything super. What if we want to fix and enhance that trust once we enhance it into a really, really nice trust? You probably don’t need to decant it after that unless there was something that, some flexibility that you somehow didn’t think about.

Spill it into the trust in the first place. Uh, the top attorneys forms have already built in these flexibilities in most cases, but, uh, we’re, none of us are perfect. You know, we don’t have superpowers. There’s no way that I can anticipate anything, every, anything and everything that could happen. I think that my documents, uh, get at least 99% of what anyone would wanna change.

But if there is something that I’m not thinking about, we can always decant the trust, which is where we have the distribution trustee distribute the assets into a new, a brand new trust. For the benefit of one or more of the same beneficiaries of the old trust in order to fix something over years. And that all being said, um, one other comment is sometimes we do set up a perfect trust, but then strategically we wanna divide the trust into more trusts for certain purposes, such as, uh, qualified small business stock and the $10 million QSBS exemption per trust.

So sometimes we have a perfect trust. Then there’s an opportunity to sell a business that’s gonna qualify for the $10 million per, per non grantor trust, um, um, exemption from federal income taxes. We have five kids, so we do decant that trust into five separate trusts because there’s a tax reason to do so because of a change in circumstances.

Steve, I have, um, a few clients I know of who are, uh, sitting on, uh, you know, eight figures of of Bitcoin. Uh, something like that, and they’re looking to potentially just sell and get out. Would this be a good option, a, a non-grant or trust if somebody lives in California or New York to move that over, then sell, uh, after it’s in a non-grant or trust?

Yeah, that’s a, that’s a, that’s a good opportunity there because, uh, you can save the state income taxes on the capital gains of the sale. Now, California, New York, funny that you mentioned, those two states and Washington, the state of Washington, are the three states where you can’t set up an incomplete gift non-grant or trust or so-called Ning or Ding Trust, as they call it, in Nevada or Delaware.

So for California. Residents, New York residents and Washington residents, we always have to set up a completed gift, not a grantor trust, which means we are limited to the client’s remaining gift tax exemption in how much we can transfer to the trust. So if the client is married, we’re looking at $27.98 million of gift tax exemption.

Um, whereas. If the, if the client lived in a different state where we set these up from, such as, uh, we do a lot in Oregon, Hawaii, Massachusetts, and some of these other high tax states, they can throw, uh, um, billions of dollars of, of Bitcoin or other assets into an incomplete gift trust and avoid the state income tax.

So for the California and New York. Residents, it makes sense to do it as soon as possible. I guess we, we just had a little bit of a dip in Bitcoin over the last, you know, week or two. You know, maybe, maybe today’s the day to make the gift, you know, at least, you know, high, a little short time ago. Uh, because the sooner you gift it, the, and get the appreciation moving out of your estate, the more you can avoid in state income taxes because of that limitation, because it can’t be the incomplete gift version.

If that makes sense. Yeah, yeah. Got it. Um, what, uh, what role does, um, do these trusts play in in situations of divorce? Uh, it depends who set the trust up. Uh, if it was a community property joint trust, it doesn’t play any role other than to increase legal fees and, and complexity. So they should have stayed married.

Um, if someone set up an asset protection trust that works such as a hybrid domestic asset protection trust, well before the, the marital issues. So not a week before filing for divorce, you know, not right before, um, you know, they, they were throwing things at each other in the living room. You set it up years ago, you’ve moved those assets, uh, away from your marital estate and then they’re not subject to division and a divorce.

So people, people who are in a bad marriage who have wealth should think about setting this up, but not those who are in such a bad marriage that they’re gonna be divorced over the next couple years, for example. It’s probably too late to set something up at that point. Um, so you wanna set it up now? So if you have, if you think in 10 years maybe there’s a 50% chance that we’re gonna be divorced, you might as well set it up right now.

If you think there’s a 50% chance you’re gonna be divorced in two months, uh, there’s a really good chance it’s too late because things have already gone too far. I mean, I guess the other way to think about it is, is this, um, a, a way to protect your own assets If you’re not married yet and you do get married and you already have one of these in place.

Uh, absolutely. Um, you wanna move, you want your prenuptial agreement to show the lowest number possible. This is not where we wanna brag. It’s kind of like when you die, you want the lowest number. When you’re bragging, you want the highest number, uh, or when you’re going trying to get a loan from the bank, you want the highest number Here, we want the lowest number on our, on our, um, exhibit A in our prenuptial agreement.

So if our client’s worth $10 million, why not throw, let’s say, $5 million into an asset protection trust, A hybrid version where the client’s not a beneficiary, so that when you’re putting the divorce. The prenuptial agreement together, it shows that you have a net worth of $5 million. Although it’s a good idea, in my opinion, although I’m not a family law attorney, to at least disclose the existence of the trust and note that the client is not a beneficiary of the trust.

I I, I like as much disclosure as possible. So you take away the argument that you were hiding something. Yeah. So tell us a little bit about like, the changes, um, you know, the changes of. Um, that, that we can potentially see with tax law IRS scrutiny in the future. How, how do you, how do you navigate those?

I mean, it just seems like, you know, a lot of this changing all the time and if sometimes I think there was some threats to the way grantor trusts were treated before during the Biden administration that seemed to pass. But can you, can you talk a little bit about how do you navigate some of those issues?

I mean, part of it might be trying to get into a trust when laws are favorable, right? Is is that kind of one of the strategies you talk about? Sure, yeah. When laws are favorable, such as where we have a high state and gift tax exemption, the ultra wealthy people now have a lifeline to be able to take their time a little bit here to make their gifts.

Although a gift today is better than a gift tomorrow because of appreciation, but we don’t have that pressure to get it done by the end of the year. For a client who is having trouble making some decisions, we can take a little bit more time. So, yeah, as long, anytime we have a good opportunity, we, we want to jump on it in case the law goes the other way the next time Congress meets.

Um, now it’s hard to navigate our job as. Estate planners is to try to help our clients understand when to jump and when not to jump. Um, a lot of what I’ve learned from doing this for now 31 years is, uh, there’s a lot of potential law changes such as the grantor trust law that you mentioned, and our job is to tell our clients to let us know those things just relax.

It’s extremely unlikely that anything like that could possibly pass. It’s just, you know, sometimes the Democrats wanna show, show their voters. Something in their potential act. The Republicans wanna show the voters something. These are just ideas that someone wants to get passed. It doesn’t mean that it’s going to get passed.

So our job is to calm our clients down and make sure they don’t make gifts with that they’re, they’re gonna regret. We don’t want donors remorse. So a lot of what I’ve had to do over the last few times that the estate tax exemption was gonna drop down, such as in 2012, there was a big concern in 2020, you know, with with Biden in 2021, with there being a potential democratic tax act.

And then this year a little bit of. A concern for a while because the exemption was gonna drop in half. My job was to calm the clients that shouldn’t be making the gifts, and then the ones like the 50 millionaires who should be making the gifts regardless of where the law goes. My job is to push them harder.

So I, I feel like I did a, a, mostly a good job. I, there were a lot of clients I couldn’t, they were begging me to take their money to set up their dynasty trusts. And I was, I was saying no to a lot of them. I was trying to say yes to the ones who do it, but there were a lot of them that just begged me and I said, you’re gonna regret it, but I will certainly take the retainer and I will set it up for you, but you’re gonna regret it.

And, and I was right. So our job is to try to, um, advise our clients not to do something they’re gonna regret. Yeah. Um, tell us a little bit about the process, Steve, of, um, you know, working with you, shedding, you know, discussing this possibility of doing something like this. How, uh, tell us, tell us how you work.

Okay. Sure. The best way to reach me is to send me an email. Um, uh, I’m at S-O-S-H-I-N-S at os HIN s.com. Send me an email and just say, here’s basically what I’m looking for, or, I don’t know what I’m looking for, but I’m wealthy and I’d like to set up a video meeting with you. And then we set up a meeting and then, um, if we know a direction, then it.

I usually set it for 45 minutes. If I’m, if it’s just a ultra high net worth person, I’ll set it for 60 and then we will explore a little bit. And where I’m gonna try to get the person is to is with either asset protection planning, the state tax avoidance planning, or state income tax avoidance planning usually.

And sometimes there’s some federal income tax avoidance planning as well. And usually if I’m. Uh, if I’m in a meeting with someone who has wealth, there’s something I can help ’em with. It’s, it’s very rare that there’s nothing. Sometimes we go into the meeting having absolutely no idea where the meeting’s gonna go, and I just take them to where I can help them.

If there’s, if I don’t think I should help them, I tell them very clearly, I don’t want to take your money because you’re better off just getting something basic done local, and there’s no reason to have me help you. Here’s a referral. Um, and then the process is assuming they like me and they want to go forward, either they think about it or they tell me on the spot, and then I get them the engagement agreement, take a re roughly a 50% retainer, and then intake questionnaires, and then we just draft and then do the follow-up meeting to go through the documents, get ’em executed if we’re okay, and then get them.

I would just, uh, say that, uh, I’ve worked with Steve, myself. Uh, definitely. Uh, Steve is one of the best attorneys out there. He’s a terrible salesman though, I’ll tell you not to get things. So, so he’s the perfect, it’s reverse psychology bucket. It’s worked on you so far. That’s right. That’s right. It’s worked on me for sure.

Uh, anyway. Uh. If, if, if people want to also, if it’s just easier, certainly, you know, send me an email, let me know if you’re interested in talking to Steve, and I’ll be happy to forward the email to him. Um, I’m, I’m a big fan. Hopefully some of you who, uh, you know, are doing risky stuff as physicians are starting to build wealth, maybe really something to think about.

So Steve, I wanna thank you so much for being on the show and, um, you know, I’d love to have you on again sometime. Alright. I, I don’t know if we, uh, ran out of material though. We’ll have to find a new, a new material. Got it. Next time. Thank you. It’s been a pleasure and I, I always enjoy talking to you.

Thanks. You make a lot of money, but are still worried about retirement. Maybe you didn’t start earning until you’re thirties and now you’re trying to catch up and meanwhile you’ve got a mortgage and private school to pay for and you feel like you’re getting farther and farther behind. Good news. If you need to catch up on retirement, check out a program put out by some of the oldest and most prestigious life insurance companies in the world.

It’s called Wealth Accelerator can help you amplify your returns quickly, protect your money from creditors, and provide financial protection to your family if something happens to you. The concepts here are used by some of the wealthiest families in the world, and there’s no reason why they can’t be used by you.

Check it out for yourself by going to wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to Show Everyone. Hope you enjoyed it once again. Uh, can’t say enough about Steve Oshin a very smart guy. Sometimes he’s too smart, so you have to like ask him questions a few times over.

But, uh, he is a guy who, you know, some of the. These families in, in, in this country actually, um, uh, really rely on and, uh, he’s actually more affordable than a lot of the others out there who are, um, much more sales oriented. Uh, so if you are thinking about doing something like this, I highly, highly recommend, uh, Steve Oshins.

Anyway, that is it for me. This week on Wealth Formula Podcast. This is Buck Joffrey signing off.

521: How to Buy Stock in Companies Before They Go Public Aug 24, 2025

I’m not a big stock guy. However, there are some companies out there that you know are just going to change the world, and it would be nice to be able to own part of them—especially before they go public.

That’s why this week on Wealth Formula Podcast we’re diving into a topic that’s been on my mind for quite some time: the world of pre-IPO investing.

If you’ve ever felt like by the time a company finally hits the public market it’s already ballooned in value and you’re basically buying in at a premium, you’re not alone.

I personally had my eye on a company called Circle, which deals in stablecoins. As I’ve talked about on the show before, I think it’s going to be huge globally.

But as soon as Circle went public, the valuation shot up to a point where I felt like it was way too expensive to jump in. If I had access to those shares before the IPO, I would have definitely taken the plunge.

Now, this isn’t just about one company. We’ve seen this story play out with others, and right now there are some major game-changers like SpaceX on the horizon.

SpaceX, one of Elon Musk’s ventures, is one of those companies you just know is going to have a massive impact.

But how do you get access to those deals?

If you’re an accredited investor, I have good news. Getting a piece of the action before these companies go public isn’t just for the ultra-wealthy insiders anymore.

It’s becoming more accessible to accredited investors who want to get in earlier and potentially see greater upside.

That’s the topic of this week’s Wealth Formula Podcast.

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

If you are purely investing in the public markets, in many cases, you’ve missed the majority of a company’s growth cycle.

Welcome everybody. This is Buck Joffrey Wealth Formula Podcast, coming to you from Montecito, California today. Before we begin, as I always do, I will suggest you visit walt formula.com, which is the, um. Primary Home of Wealth Formula podcast, and it’s also where you can get some resources outside of the podcast, including access to our accredited investor club, otherwise known as investor Club.

Uh, that is where you can get, if, if you aren’t an accredited investor, you can get access to opportunities that you would not otherwise see because they are not available to the general public. Um, speaking of. That kind of investment that’s not typically, uh, available to the general public. Uh, that takes us sort of to the topic of today’s show.

That is, um, well, you see, I’m not a big stock guy, as you probably know, if you’ve listened to this show before, I’m not, you know, listen, I’m not anti stock. It’s just not, you know. Generally what I’ve invested in my life. However, there are some companies out there that you just know are going to change the world, and because of that, it’d be nice to potentially be able to own part of them, you know, especially if they, if before they go public.

That’s why this week on Wealth Formula Podcast, we’re gonna dive into a topic that’s sort of been on my mind for some time. The world of what’s called pre IPO investing. Basically investing before a stock goes public. Now, if you’ve ever felt like by the time a company finally hits the public market, it’s already ballooned in value and you’re basically buying at a premium, you’re not alone.

Again, this is not something I do often, but I had, um, as you know from my previous shows, I believe heavily that this whole world of stable coins is going to be enormous. And I had my eye on a company called Circle and then trades with CR Cl, uh, which deals in stable coins, uh, which is a, a really big player in stable coins.

I think this is gonna be huge. Uh, but as soon as Circle went public, the valuation shot up, like just took off where it was kind of ridiculous and. At that point, basically it was just too expensive to jump in. It just didn’t make any sense. Now, if I’d had access to those shares before the IPO, and if it, you know, started where it actually started, I definitely would’ve taken the plunge and I actually would’ve made a lot of money.

But that didn’t happen. Now, this isn’t just about one company. We’ve, you know, seen this happen several times, uh, before people know there’s this big private company that, you know, all the. Insiders are gonna make a bunch of money on IPO comes bang, they all cash in, right? But there are some out there that are in that pre IPO phase right now, such as SpaceX, um, you know, Elon’s, uh, one of Elon Musk’s companies.

Um, you know, they are out there traveling space. They also own starlink, uh, all that kind of stuff. So, you know, that company’s gonna have a huge impact, at least. I mean, you know, I guess you don’t know for sure, but. Shown us one thing before he, he can, uh, he can build extraordinary companies. So that’s something I would be interested in.

But how do you get access to those deals, right? If you’re an accredited investor, as it turns out, I have good news on this show. Getting a piece of the action before these companies go public isn’t actually just for the ultra wealthy Silicon Valley insiders anymore. It’s actually becoming more accessible to accredited investors who want to get in early.

Potentially see greater upside. So that is a topic of this week’s show, and we will have, uh, that conversation right after these messages. Wealth formula banking is an ingenious concept powered by whole life insurance, but instead of acting just as a safety net, the strategy supercharges your investment.

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Turbocharge your investments visit. Wealth Formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show, everyone. Today my guest, uh, on Wealth Formula podcast. Christine Healey, she’s founder of Healy Pre IPO. Which is a, uh, boutique brokerage firm that gives high net worth investors access to some of the world’s most exclusive pre IPO opportunities.

Companies like SpaceX, open AI and Stripe long before they hit the public markets. Uh, she’s closed over 600 million in private market deals. Previously held leadership roles at firms like Destiny Tech 100 and Forge Global. She’s built a white glove concierge level service for investors who want insider access to vetted late stage private companies without the corporate red tape.

Welcome to the program, Christine. Thank you, buck. Great to be here. Well, um, let’s, let’s kind of start with, so we have a lot of, you know, retail investors, accredited investors. This may not be something, uh, that, that they know much about. So for investors who only know about public markets, uh, those types of stocks, what exactly is the pre IPO market?

How does it work? So I see a lot of high net worth investors that may hold, um, very skilled professional jobs. They might be doctors or lawyers or small business owners, and they see companies like SpaceX constantly in the news with these amazing milestones. Or they might use open AI’s product chat GBT every day in some cases.

But they’re seeing these amazing technological innovations as a bystander. A lot of them are saying, um, I’ve worked hard to build an amass some wealth. I’ve got a high income. I wish there was a way to actually financially participate in these stocks. Sure. So investing pre IPO is essentially a way to invest in these companies while they’re still private companies in a bespoke privately.

Brokered transaction where you might be matched with a private seller, like an early employee, or you might be matched with an early VC that’s looking for liquidity and you can actually get in before the IPO. So we’ve seen a lot of IPOs recently be very choppy, very volatile. Mm-hmm. In many cases, um, a lot of value in a technology company’s lifecycle is accruing purely on the private markets.

Since these tech companies are waiting longer and longer to IPO in a lot of cases. So if you are purely investing in the public markets, in many cases, you’ve missed the majority of a company’s growth cycle. So what I do is help investors, um, that are accredited to get into some of their favorite companies that, that they love, that they believe in.

Mm-hmm. That they’re inspired by. And to navigate the private market, which is very tricky, in some cases, messy and requires a lot of bespoke, um, process. Yeah. And, and I think, um, one of the things that I have noticed sort of, kind of sniffing around this pre IPO space, there’s obviously a few companies who, who do this and um, you know, one of the questions I always have when I’m looking at it as a retail investor is like.

Yeah, this is an interesting company. I hear about, you know, ripple or I hear about like Circle before it happened. Um, and the issue there becomes like, how in the world do you know if it’s a good price? Because, you know, the valuations, um, that these things are being offered at often look significant, right?

They’ll say the, there’s like a, uh, the last valuation was, you know, uh, literally, you know, half or. 25% of what, what the valuation based on the stock price that they’re trying to sell. How do you possibly navigate through that? I personally believe it’s one of those things where you get what you pay for, and if you actually go the extra mile to hire a pre IPO broker that specializes in this space, one of their core jobs is to help you contextualize pricing.

So I. Um, if you’re getting an offer at a certain price, they’ll help you understand how does this relate to the latest, uh, primary round of the company. But not just that, how does this relate to the market right now in that company to recent deals, to recent bids and offers by other buyers and sellers in this space?

So that’s. That’s really like going in with, uh, you know, an army of information and power and, and support by your side versus going in alone as a retail investor. So I believe that makes a lot of difference. Um, in my personal information, there’s more access to pre IPO than there has ever been, but it’s actually a lot of mediocre access, a lot of, um, unreliable parties, a lot of people that are really new to the market and lack the kind of nuance and experience in reps to.

Perform really well for their clients. And so it, it’s kind of foggy out there and a lot of people that are used to purely public investing, um, will have a really negative experience at first because they don’t even know which brokers they can trust or which platforms, or they try and do a deal, it falls through and they’re so discouraged.

Or like you’re saying, they have no way of contextualizing the pricing they’re seeing. Retail investors are really the most vulnerable to price exploitation or fee exploitation when it comes to these very actively traded names. Um, and so I think that’s what separates really a, a good or a great broker from these run of the mill platforms or crowdfunding, uh, you know, websites.

They’re gonna help you go into a negotiation with a seller, armed with information so you know what you’re getting and you can decide yes or no. I think one of the companies you mentioned was, uh, SpaceX. And it makes me think, uh, it’s obviously one of Elon Musk companies, um, believe it or not, despite, uh, how much we hear about Elon, Tesla is really the only public company and everything else is private.

How do we know Elon’s even gonna go private or go public with his stuff? Uh, you know, I think he, he seems to not necessarily think of it as advantageous. Is that one of the inherent risks in investing, you know, in, in a company, uh, like this, that, you know, listen, you may just not wanna go public? It’s a great question and really yes and no.

So yes, there’s an inherent risk in investing in private stocks that they are less liquid. There’s no shying away from that. But the interesting thing is that. Um, I personally don’t think for the average SpaceX investor, it may matter that much, whether SpaceX does exit in five years or in 10 years. Um, Elon is really the poster child of a, a founder, which historically hasn’t seemed to want to go public.

He’s not a huge fan of operating and, and, and reaching moonshot goals in the public eye. Um, but why I say it may not necessarily matter. Is that as the secondary markets grow and as liquidity grows, um, someone investing in SpaceX today could potentially be able to resell on the private market in, in several years to another private buyer.

Now, of course there’s no guarantee that assumes that there’ll be a replacement buyer in the market when you’re looking to sell. Regulations also require you to buy to be a long-term holder. So typically you wanna be holding for at least six months, but ideally longer to kind of have that, that provable intent to have housed long-term.

But in general, there is the possibility of reselling. Even if the IPO is is still further down the road. So I think that’s when it becomes really, really interesting because you can still invest in SpaceX if you believe in its growth, even if you believe that the IPO might be a decade away, let’s say, or, or even more.

Give us an example of how this has worked out positively for a client. Um, you know, from soup to nuts. Like what process? Somebody came in, they were interested in this, they bought that, and. They went to I PPO companies that went to IPO. I mean, there’s, there’s a number, there’s rubric, there’s Unity, there’s Pinterest, um, there’s, um.

There’s a number. Um, there’s also, ’cause I’ve been in this industry for so long, since 2018, you also see some of the companies that are still private and how much their valuations have grown on the private markets during that time. So there was a lot of investor activity around, um, 20 19, 20 20 in SpaceX, for example, where valuations were below.

Below 50 billion, give or take. Um, and now SpaceX just came out with their new tender, uh, priced at roughly a 400 billion valuation. So there you’re seeing, you know, astronomical growth for companies that are still private and still potentially have growth left in them as well. What have you seen on the other side of this?

’cause obviously there’s risk. You know, these aren’t startups we’re talking about SpaceX and, you know, Stripe or whatever. Uh, but. Compare the risk profile of something like, you know, investing in these pre IPOs versus public stock. Yeah, I mean there, there’s certainly risk. You see cases like 23 and Me, which was actively traded when I first started, um, for MA many years really.

Um, 23 and Me is now going through bankruptcy or liquidation and it’s kind of a mess. Um, you also see companies like FDX, which we’re approaching, I believe $40 billion, and of course completely imploded. So there’s also no shying away from the risk in this asset class. It’s not for everybody. How I see investors dealing with the inherent, um.

Risk around liquidity risks around these businesses, even, even existing, um, in the future is, um, either diversification, which is a natural way to, to manage risk or what’s really common in this asset class is, um, a flight to quality type effect or, or hyper concentration where investors are cutting down their lists of names to ones where they have the highest conviction.

So an investor that’s looking for, um, more of a track record of growth and price marks on a regular basis, that investor might be attracted to SpaceX because they’ve had these tenders that, um, have marked up the stock at, you know, incrementally higher valuations roughly every six months, which is really unique for, um, for a private company.

Or you could have, um, you know, a number of other reasons to look to different companies based on your particular thesis and your profile and what you’re looking to see. Mm-hmm. So would you say that this from a portfolio standpoint for, um, you know, somebody who’s, uh, an accredited investor probably should be in their, I don’t know, maybe an asymmetric risk category?

Yes, I would say so. Yeah. What, um, uh, you know, when you, what’s the process of, actually, I know you said this is from like, people who are trying to get, um, liquidity and stuff. Um, what’s the process of actually finding that from your side, like as a broker? Like how do you find these people? So first I figure out what’s the best fit for the investor.

So one of the main things is size, whether you’re investing at a hundred k, whether you’re investing at a couple million, um, whether you’re, you know, accredited or whether you’re a qualified purchaser, which is a higher level or a qualified investor or, or anything in between. So we’ll look at your particular timeline needs.

Profile, et cetera. Um, and then figure out who to match you to. So typically if you are a more retail investor, maybe you’re trying to invest a hundred k. You’ll end up investing in a, in a fund vehicle where you’re pooled together with other investors to together take down a block that could be a million or 5 million or 10 million.

So that’s what you should really expect when you are, um, coming in at say, a hundred k. You’ll go into some sort of. Fund, you know, for the most part. So I have a network of a ton of different counterparties, and if we’re looking for a fund, that’s where I look at, um, maybe family offices, VCs, specialty secondaries funds that already hold stock from previous rounds or from, maybe they’re getting an allocation in an upcoming primary from the company.

Sources like that. Um, and I, I talk to those parties in the network to see if there’s a relevant opportunity for my buyers. Yeah, so talk us a little bit about your due diligence process. Yeah, it’s important that as a broker, I’m not a fiduciary. I don’t hold that type of role. Um, where I come in is really to help source the deals for people, help them understand the structures, contextualize pricing, um, understand the, you know, the terms and the conditions of the vehicles they’re getting into.

Help them negotiate to see if we can cut fees to see if we can optimize, um, the economics, and then to help streamline closing. So, I. I am actually prohibited from giving too strong a view as to you should buy this or you should not buy this. Mm-hmm. But I can help arm my clients with, um, secondary market information and make sure they are really informed about what they want, about, um, how the pricing compares to other opportunities, and then they can make the decision.

So it’s really important regulatory wise that I’m not too pushy or opinionated, um, but I help my clients in a number of other ways to optimize what they’re already seeking. So you’ve, uh, you’ve closed, I guess 600 million, uh, in private deals. So, you know, what patterns have you seen in the most successful pre IPO investments?

I mean, you know, I know you’re not in a role to be advising per se, but just, you know, as, as an individual who’s, uh, observing this happening real time, what lessons, um, could, would you take away as, as somebody who’s investing in this space? Yeah, that’s a great question. I think in recent years we’ve seen hyper concentration.

So there’s been a very small number of companies like SpaceX, OpenAI, Stripe, Andel, which have accounted for the vast majority of activity. So that can make it tricky if you’re trying to sell an asset that’s outside of this, you know, top 10 or top 20. Um, on the other side, it can also be advantageous if you’re a buyer in a company that is less active, you have a bit more leverage with the sellers.

So it does depend on personal preference. You know, if you’re looking for a less active company and you wanna get a great discount, that’s a great, um, en environment and a backdrop to be in. Um, if you’re looking for. A bit more confidence in terms of future saleability. You might look for a more liquid opportunity, um, in a company that’s historically had a, a very active market like SpaceX.

So personal preference always, but I think one thing that’s important to keep in mind is, is that possibility of selling down the road. So if you are going into a deal today, it’s worth, um, speaking to the broker, speaking to the, the selling investment manager whose fund you’re going into. Do you allow resales?

How would that actually work? Will you charge me a fee if I want to resell in future? Or some of those things, um, or even the terms of what you’re buying. How would that play out in a future, uh, resale transaction? So, for example, um, investments that do not have carried interest or management fees on it, which we call zero zero, are much easier to resell in future.

So as with most things, it’s just kind of thinking through all the details, how they will play out and how. How much, um, autonomy you’d have in future if you, if you wanted to, to do something with that asset. So that can, that can really make the difference really, um, in terms of liquidity down the road, even on the private market still, Phil, you know, I know, again, just going back to the fact that you can’t necessarily give advice, like how do people get, I mean, how do people educate themselves then, like at any given particular investment?

Because again, you know, my limited experience on this is just seeing things on platforms. Getting valuations and such. And again, if you’re not really allowed to say, this is a good deal, this is not a good deal, who do we get that information from? Yeah, I mean, I can’t say this is a great deal, you should do it, but I can flag, um, you know, this is a discount to where recent deals are getting done or, um.

If this is roughly in line with the pricing of recent secondaries or some of that data, so you can kind of put two and two together and, and figure out if that qualifies as a good deal in your opinion. Um, and that’s really it. But one of the main challenges for this type of investing is relatively limited information.

Compared to what public market investors are used to getting. So there’s some amazing companies like Klarna, which just put a lot of information out there publicly for anyone to see in terms of their financials and stuff like that. Yeah. But that’s quite uncommon for these pre IPO companies. You have very kind of private companies like, um, SpaceX, like Open ai, like Impossible Foods, which are very protective about their information and almost never release.

Um. Tangible data points around the financials publicly. So, um, I think that’s why a lot of investors, especially institutions, have held off for quite a number of years on going all in, in this asset class, because you don’t have the same underwriting ability, you don’t have the same analysis, um, due to the, the limited information.

But on the other side, you see. Some really interesting success stories, um, in terms of gains and, and the wins. And now a lot of institutions and investors are saying, well, this might be a different process than I’m used to for public investing, but I’m gonna have to figure out a process around these, these private companies because I don’t wanna miss out.

So you can look to, like I mentioned, secondary market data. You can look at what the caliber of, um, institutions that have got involved. You know, do they have, um, tier one VC backers, um, all that kind of stuff. How has their momentum been in terms of funding rounds, in terms of tenders, et cetera, on a number of other data points, which helped.

Create a picture where otherwise we don’t have as much of a a data picture as you’d see with a publicly reporting company. What are some of the most interesting companies out there right now, in your opinion, that are in the space? You mentioned SpaceX. I’m relatively specialized in the sense that, you know, if the market itself is specialized in 10, 15, 20 names, that’s where I’m gonna focus my time as a broker.

So I spend a lot of time in names like Andal, Neuralink, SpaceX, OpenAI, Stripe, anthropic, um, and several others just based on where the demand is coming from my clients or where the sell interest is coming from. My seller clients too. So those are the companies I see as being very interesting. Um, very active right now.

And that’s really where I spend a lot of my time. Whereas some of the, the crowdfunding and the other platforms they talk about, we cover 300 companies or we’ve traded in 400 companies, and I’m saying, well. That means you’re not necessarily an expert in the ones that really matter to. A lot of investors right now are those platforms that we see on the, uh, internet.

Are they trying to do the role that you’re doing, but doing it sort of on mass, because you always see a broker fee on there. So essentially, take the platform away, put the human in. That’s you. Is that. Is that how it works? Yeah, pretty much. I see. You know, this has been such a lucrative industry for a number of years now that you’re seeing.

More new entrants, more new platforms, more new funds. Everyone trying to get a piece of the pie. And for the majority, they’re trying to take over the market. They have grand visions of centralizing everything. Everything’s gonna run through them. They’re gonna be a $10 billion company. And when all these companies are going left, I’m going right.

I’m saying I’m not trying to be a $10 billion company with hundreds of employees. I am trying to stay a small business to spend the majority of my time with my clients and on on the best deal flow possible for them, and really stay disciplined in that. So I’m not optimizing for scale, I’m optimizing for quality and performance.

Um, and I think that’s a differentiator when all these companies are trying to go huge and, you know, hiring like crazy. And some of their agents have only been in the market a year, been in the market two years, and I’m on, you know, seven years or so and counting. Um, and so yeah, you alluded it to as well in terms of scale, but that’s, that’s a huge differentiator and we all intuitively understand the difference between a, a large business and their approach.

Versus the small business approach. Um, I know many of your, your listeners are small business owners as well, so what you’re getting with me is a small business approach backed by years of expertise in this market. Right. Right. Hey, before I forget, and one I was curious about was, um, you know, there was a stock I always following, which was circle Internet.

I mentioned it before, because, because of the, uh, us, uh, US dollar coin, this stable coin. Um, my personal belief that this is, you know, just to, I mean, this is gonna revolutionize everything with the stablecoin world. And I’m curious, so now I’m looking at Circle Internet right now, and it’s priced at, well, it’s actually come way down.

It’s like at $162 right now. It had gone well into the two hundreds, 215 year, 250. Um, do you recall like what that was trading at in the pre IAPO space? Just, just to get some sense of like, you know. The differences, uh, that sometimes these things make in public market? Yeah, I, I don’t recall if there’s been any kind of split or reverse split, um, since they went public.

Maybe you, oh, the IPO was only like, gosh, just a few, like, um, two months ago. So yeah, I’m not a, I’m not aware of any kind of split or anything like that, so hopefully I’m speaking on an apples to apples basis. The market for circle leading up to their IPO was, I would say around $30 per share, give or take.

Yeah. Yeah. So maybe there’s been some split action and we can verify after that. But in the absence of any kind of split, that’s obviously a huge, huge, huge, um, jump from where trades could have gotten done on the private market, even in the months leading up to it. Wow. Yeah. Fascinating. Well, uh, Christine, how do people get ahold of you and your company if they’re, uh, interested?

I’m very active with educational information on LinkedIn under Christine Healey, H-E-A-L-E-Y. You can also find me on my website, healeypreipo.com. And I have a mailing list there too, where I send market insights, occasionally live deals, depending on suitability. Um, and I’m happy to speak to anyone and, and help them learn more.

Great. Thanks so much for being on the program. Thanks so much. We’ll be right back. You make a lot of money but are still worried about retirement. Maybe you didn’t start earning until your thirties and now you’re trying to catch up, and meanwhile you’ve got a mortgage and private school to pay for and you feel like you’re getting farther and farther behind.

Good news. If you need to catch up on retirement, check out a program put out by some of the oldest and most prestigious life insurance companies in the world. It’s called Wealth Accelerator. Can help. You amplify your returns quickly, protect your money from creditors, and provide financial protection to your family if something happens to you.

The concepts here are used by some of the wealthiest families in the world, and there’s no reason why they can’t be used by you. Check it out for yourself by going to wealth formula banking.com. Again, that’s wealth formula banking.com. Welcome back to the show everyone. Hope you enjoyed it. And, uh, again, I mean, listen, this is, uh, uh, again, the same kind of concept as we have in our credit investor club.

Investor club is basically giving you access to stuff that generally you don’t see in public. This is the same thing, except this isn’t like tech companies or other kind of, you know, companies that have. Tremendous value and have not gone public. You can essentially potentially buy stuff as a private investor, get unfair advantage because you’re a credit investor and ride these things up.

So it’s a really interesting concept. I mean, are they all gonna work? I don’t know. I, I’m not in this world right now, but it sure sounds like something to look into if it is of interest to you. And that’s all I have this week on Wealth Formula Podcast. This is Buck Joffrey signing off.

520: Twin Brothers Gary and Grant Cardone are ALL IN on Bitcoin Aug 17, 2025

Bitcoin may be breaking records again, but this time it’s not because of retail frenzy. Search trends, social media chatter, and small-investor activity are all far quieter than they were in 2017 or 2021. The people driving this move aren’t hobby traders—they’re the biggest institutions and the wealthiest investors on the planet.

Look at BlackRock. Larry Fink once dismissed Bitcoin as an “index of money laundering.” Now he’s calling it “digital gold,” and his firm’s iShares Bitcoin Trust (IBIT) has become the fastest-growing ETF in history.

It’s pulled in nearly $90 billion, representing more than 3% of all the Bitcoin that will ever exist. Those billions aren’t coming from TikTok influencers—they’re coming from pensions, hedge funds, and the kind of family offices that have multi-generational plans for capital preservation and growth.

Even Harvard University has made the leap. Back in 2018, its star economist Kenneth Rogoff said Bitcoin was more likely to hit $100 than $100,000. Today, Harvard’s endowment owns more of BlackRock’s IBIT than it does Apple stock in its U.S. equity portfolio. That’s not just a change of heart—it’s a complete reversal in worldview.

And of course, there’s Michael Saylor, whose MicroStrategy now holds close to 3% of the total future Bitcoin supply, turning a business software company into a corporate Bitcoin vault.

This is institutional FOMO. The biggest asset manager on Earth is selling it, elite universities are holding it, corporate treasuries are betting their future on it, and family offices are adding it to the same portfolios that hold their blue-chip stocks and trophy real estate.

But institutions aren’t the only ones making this move. There’s another wave—quieter but just as significant—coming from the ultra-high-net-worth crowd. The centimillionaires.

The people who can wire $10 million into a position without blinking. I’ve always said: never take financial advice from someone with less money than you. Well, Gary Cardone has a lot more than me—and he’s all in on Bitcoin.

Gary is part of what they call “smart money.” He’s in the same camp as the other ultra-wealthy who aren’t just dabbling in crypto—they’re making conviction bets.

And when you see people with that kind of capital and that kind of access all moving in the same direction, it’s worth listening to why. That’s exactly why I sat down with him—to hear, straight from someone in that rarefied circle, why Bitcoin has gone from a curiosity to a core holding.

519: Why the Wealthy Never Stop Buying Real Estate Aug 10, 2025

Hey everyone,

If you’ve been following me for any length of time, you already know that I believe real estate is the single greatest wealth-building tool available to everyday investors like you and me. (Although, I’ll admit, Bitcoin is making a strong case to be in that conversation.)

But every once in a while, it’s worth stepping back and asking: Why has real estate created more millionaires than any other asset class—and why do the ultra-wealthy keep buying it, decade after decade?

It comes down to a unique stack of advantages that you simply can’t replicate anywhere else:

Leverage: Real estate is one of the few investments where banks are eager to give you money to buy an appreciating asset. You put down a fraction of the purchase price and control 100% of the property—and 100% of the upside. Leverage can be a double-edged sword in down markets, but it remains the most powerful tool in the arsenal of the rich.
Other People’s Money: Every month, your tenants pay rent that covers your mortgage and builds your equity. Essentially, they’re buying the property for you.
Appreciation (Natural and Forced): Over time, rents and property values generally trend upward. But here’s the thing—you can force appreciation by raising rents, cutting costs, and improving operations. On properties over four units, these improvements increase net operating income (NOI), which directly determines the property’s market value. That’s how sophisticated investors manufacture wealth on demand.
Tax Advantages (The Secret Weapon): The IRS lets you deduct a portion of your property’s value each year—depreciation—even while the property itself often climbs in value.

Now, here’s where things get truly magical: cost segregation combined with 100% bonus depreciation. These strategies let you front-load those tax deductions, often allowing you to write off a massive portion of your investment in the first year.

For example, let’s say you buy a property for $1 million and put down $300K. With a proper cost segregation study and bonus depreciation, you might receive a K-1 showing a $300K loss that same year. That’s a paper loss offsetting your taxable income—meaning money that would’ve gone to the IRS is now working to build your wealth instead.

And with Congress reinstating 100% bonus depreciation, this playbook for savvy investors is back at full strength. If you think about it, upfront tax savings alone can turbocharge your returns before you’ve even collected your first rent check.

This week on Wealth Formula Podcast, I sit down with Gian Pazzia, chairman and chief strategy officer at KBKG, to pull back the curtain on cost segregation and bonus depreciation. We’ll dig into:

How cost segregation really works—and when to use it.
How passive investors and short-term rental owners can take advantage of it.
What to know about recapture taxes, 1031 exchanges, and long-term planning.

If you’ve ever wondered how sophisticated investors legally shelter huge amounts of income while building massive wealth, this episode gives you the inside track.

P.S. If you want access to the “Do it Yourself” Cost Segregation tool mentioned in this podcast, you can access it HERE. Use the code FORMULAPROMO to get 10% off.

518: Side Gigs and Digital Real Estate – Is the Website Rental Model Still Viable? Aug 03, 2025

Last week, we talked about side gigs—smart ways to earn extra income outside your day job. One of the options we touched on was affiliate marketing, a tried-and-true method still relevant today.

But here’s another strategy I’ve personally dabbled in: building websites designed to generate leads. These sites are created with specific search terms in mind—mine were focused on cosmetic surgery—but the model can be applied to nearly any industry.

Once your site is ranking on Google and generating traffic, you rent out that digital space to businesses who want the leads. I had a friend who made millions using this model with smartlipo.com back in the day. It was like owning valuable digital real estate.

But that was then. The landscape has shifted. With the rise of tools like ChatGPT and Perplexity, fewer people are relying on traditional search engines. So the question is:

Is this still a viable side hustle in 2025?

And if it is, how does it work now—and how can you get started?

That’s exactly what we’re diving into on this week’s Wealth Formula Podcast.

517: Do You Need a Side Hustle? Jul 27, 2025

My financial journey started after I accidentally picked up one of Robert Kiyosaki’s books. It was the end of my honeymoon in Puerto Vallarta, and my wife (at the time) and I were waiting for our plane back home.

I decided to grab a book from one of the little airport shops, but there weren’t many choices. In fact, I believe there were four, and three of them were romance novels with pictures of muscular men with long blonde hair on them.

The only other option was Robert Kiyosaki’s Cashflow Quadrant. I had no idea who Robert Kiyosaki was, nor did I really care that much about investing and personal finance. But it sounded like a better read than the others, so I bought it.

At the time, I had just finished residency training and was focused on my career ahead. I never really thought much about money beyond the fact that I was finally going to make some after years of indentured servitude as a surgical resident.

But on the flight back from Mexico, everything changed. Reading that book felt like a bolt of lightning, and it changed my mindset forever. This experience, I later found out, has happened to countless people I’ve met since then.

I call it taking the pill (the book is purple).

A world of possibilities suddenly opened up to me. I know it may sound strange, but the idea that I could ever not have a job and, instead, become an entrepreneur had never before occurred to me.

In hindsight, I understand why. I was a very good student. “A students” get addicted to the educational system. When you get As, you are rewarded. You get accolades. Your teachers love you. What’s not to love?

That makes you try even harder. That feeling of success is addictive, and you want more of it. So you aspire to do the things that the smart kids are supposed to do, like going to a fancy college and becoming a lawyer or doctor.

If you succeed in a system, you don’t doubt the system. You don’t look for alternatives. The system I bought into was an educational system created by industrialists a century ago. They didn’t want to train entrepreneurs; they wanted to train a workforce. And I was winning in that system.

C students, on the other hand, have nothing to lose. They search for success in other ways and often end up more successful than those who did better in school. That’s why A students rarely become entrepreneurs. They never have a reason to look outside the system.

The purple book I read on that plane helped me break away from that world. I saw life differently after reading it. Even though I was already a surgeon who had completed residency, I never wanted to work for anyone ever again.

I started my own cosmetic surgery practice, then another medical business, and had a lot of success. I also tried my hand at other businesses that were less successful. I made lots of money and lost lots of money. Living the life of an entrepreneur is not for the faint of heart.

I also believe, to a certain extent, that you are either born an entrepreneur or you are not. I was born an entrepreneur, despite the fact that it took me over 30 years to discover it.

Because of that, I never push anyone to quit their job and go out on their own. That kind of risk is not for everyone. That said, there are certainly ways to dabble in entrepreneurship without risking everything.

People call them side hustles. Side hustles are ways to make a little extra money that you can use to make an extra investment or simply go on a nicer vacation.

One of those side hustles I have engaged in is affiliate marketing. Ten or fifteen years ago, I had websites designed to sell products to people by providing links to things they might be interested in—even Amazon links. If someone decided to buy something after clicking my link, I would get a small commission from the seller. It was not a huge money maker for me, so eventually I decided to focus on other things.

However, opportunities like this still exist. And these days, it doesn’t really take any technical savvy to participate. On this week’s episode of Wealth Formula Podcast, we learn about one option that may be of interest to you.

This one may or may not be a good fit for you, but it will get you thinking. There are a million ways to make money out there. All you have to do is look for them. You can start by listening to this week’s episode of Wealth Formula Podcast.

P.S. I have not used the platform we talked about on the show, nor do I stand to benefit from it financially. It’s purely educational.

516: Why the Rich Don’t Hoard Cash Jul 20, 2025

There’s no shortage of doom-and-gloom in the podcast world—especially in the gold and silver crowd. You know the type. The ones who spend half their airtime warning you that the dollar is about to collapse, the grid will go down, and that only silver coins will save you.

I used to buy into that narrative too. I was a card-carrying member of the Zombie Apocalypse school of personal finance. I even listened to Peter Schiff religiously.

But as time passed and I realized that zombies would not rule the world, I gradually became an optimist. I believe in the resilience of the U.S. economy. I don’t think society is going to crumble, and I’m not prepping for Armageddon.

That said, there is one warning from the doom crowd that’s absolutely true—and it’s not a matter of opinion. It’s a fact.

The U.S. dollar is losing value. Fast.

That might not feel dramatic. But it should. Because it means that if you’re sitting on cash—thinking you’re being conservative—you’re actually guaranteeing yourself a loss.

Robert Kiyosaki said it best: “Savers are losers.”
It’s a clever phrase, but it’s not a joke. It’s reality.

Inflation isn’t a glitch in the system—it is the system. In a country running record-breaking deficits and drowning in debt, the only viable solution is to devalue the currency. In other words, print more money.

And whether that inflation comes in at a “modest” 2% like the Fed wants, or 7–9% like we saw in recent years, the outcome is the same: your money loses purchasing power.

A dollar in 1970 had the buying power of nearly $8 today. So if your dad tucked away $10,000 in a shoebox thinking he was doing you a favor, that money is now worth a little over $1,200. Even the money you saved in the year 2000 has lost nearly half its value.

Inflation is the background noise of our economy. It’s always there, always working, always eroding. Slowly when things are “normal.” Fast when they’re not.

So what do you do?

Well, if you’re keeping large chunks of money in a savings account paying less than 1% interest while inflation clips along at 3–6%, you are, without exaggeration, bleeding wealth every single day.

It feels safe. It looks safe. But it’s not.
It’s a bucket with a hole in the bottom. And you don’t even notice until it’s almost empty.

That’s why the wealthy don’t hoard cash. They own assets that inflate with inflation.

They buy things that grow in value as the dollar shrinks—because they understand the system. They don’t fight it. They ride it.

Real estate is one of the best tools in the game. Home prices tend to rise over time. Rents go up. But if you lock in a 30-year fixed mortgage, your payment never changes. So while the cost of everything else is climbing, your loan stays frozen. Meanwhile, inflation is silently reducing the real value of the debt you owe. You’re paying it back in cheaper dollars every single year.

Then you’ve got ownership in productive businesses. Sure, stock prices can swing in the short term. But long-term? Equities in companies with pricing power—companies that can raise prices when costs go up—often outpace inflation. And as an owner, you benefit directly.

And finally, there are the scarce assets. Bitcoin. Gold. Precious metals. In a world where central banks can conjure trillions out of nowhere, things that can’t be printed tend to hold real value—or even multiply it.

This is how the wealthy play the game.
While most people are watching their savings accounts decay quietly, the wealthy are stacking assets that appreciate. They are playing offense in a very predictable system.

So those are the basics. But let me give you one more ninja tip from the wealthiest real estate investors in the world: You can print your own money by using debt.

Think about it. Let’s say you buy a $250,000 property this year using a 30-year fixed mortgage. You put 20% down, so you’re financing $200,000.

Now fast forward three decades.

Even if you paid zero principal and still owed $200,000 in nominal terms, you eroded the value of that debt. With just 3% annual inflation, the real value of that debt has been cut in half. You’re effectively repaying $100,000 in today’s dollars. That’s how you print your own dollars.

That’s not just hedging inflation. That’s weaponizing it.

Now if you take nothing else from this rant, remember that currency debasement is not theoretical. It’s happening in real time.

This week’s episode of Wealth Formula Podcast dives deep on this topic and what you can do to prepare yourself for the ever-shrinking buying power of the U.S. dollar.

515: Accelerate Your Wealth AND Protect Your Family Jul 13, 2025

I want to share a story you may have heard before—but it’s worth telling again.

When I finished surgical training and joined a practice in 2008, we were in the middle of the Great Recession.

But for me, the recession didn’t mean anything. My net worth was below zero. I’d made less than $50K a year for seven years. I wasn’t worried about losing money—I didn’t have any.

What I did have was a new six-figure salary and a baby on the way. Suddenly, I had to start thinking like a grown-up. I needed to protect my family. I needed life insurance. But I had no idea what that really meant.

I started asking around. One of the younger surgeons told me to “buy term and invest the difference.” That’s what Dave Ramsey and Suze Orman were preaching on TV too.

But an older surgeon—close to retirement—told me something very different. He’d been financially wrecked by the market crash and said permanent life insurance was one of the only things keeping him afloat.

Here’s the thing: they were both kind of right.

The young guy was right that most permanent life insurance is designed in such a way that it is a terrible investment. But the older guy had discovered something the hard way—permanent life insurance can offer unmatched financial stability when everything else is falling apart.

Still, neither of them understood what I would come to learn just a few years later from some of my wealthiest friends.

You see, permanent life insurance isn’t one thing. It’s a flexible tool. In the right hands, it can be optimized for estate planning, tax-free growth, or even used as a powerful retirement income strategy—especially for those of us who started making money later in life.

That’s when I took a deep dive, even getting a life insurance license so I could fully understand the mechanics myself. What I found became the foundation for Wealth Formula Banking, Wealth Accelerator, and now, Wealth Accelerator Plus.

In fact, some of these strategies are so effective that they’ve already helped people like me “catch up” on retirement income planning—even if we didn’t start earning real money until our 30s.

On this week’s show, I talk with one of my new partners at Wealth Formula Banking, Brandon Preece. We unpack common misconceptions about life insurance, discuss mainstream strategies, and then go further—exploring new protocols that could be game-changers for your financial future.

If you haven’t learned about this stuff yet, it’s time. And if you have, it’s time to revisit all of these strategies. These strategies have played a major role in my financial life—and in the lives of many in our Wealth Formula community.

And I can honestly say that I don’t know of a single person who ever regretted setting up a plan!

514: Currency Wars, Capital Flows, and Bitcoin Jul 06, 2025

I know some of you are tired of hearing about Bitcoin and digital currencies. That’s not what this week’s show is about. This week’s podcast conversation is broader—it touches the entire global economy.

But…you just can’t talk about macroeconomic trends anymore without talking about digital dollars and Bitcoin. Leaving them out today would be like ignoring gold when discussing commodities.

There’s a section this week in my interview with Ian Reynolds that dives deep into the bond market and the growing influence of stablecoins. And I realized—it might be helpful to give you a bit of context up front. If you’re already familiar, consider this a refresher. If not, this will make the second half of our conversation a lot more useful.

Let’s start with the 10-year U.S. Treasury—arguably the most important interest rate in the world. This one number influences everything from mortgage rates to stock valuations to how much it costs the government to borrow money. Historically, when inflation drops, yields on the 10-year tend to fall as well. That’s the standard relationship: lower inflation usually leads to lower yields.

But that’s not what’s happening right now.

Despite a year of cooling inflation, the 10-year Treasury yield has stayed surprisingly high. Why? The answer boils down to supply and demand.

On the supply side, the U.S. government is flooding the market with Treasuries—over a trillion dollars’ worth every quarter—to finance its growing deficits. That’s a lot of new bonds entering the market.

At the same time, demand isn’t keeping up. Foreign central banks like China and Japan, which used to be some of the biggest buyers of our debt, are pulling back. Some are dealing with their own domestic issues. Others are deliberately reducing their exposure to the dollar as a reaction to U.S. foreign policy over the past year.

So: more supply, less demand—what happens? Bond prices go down, resulting in higher yields for bond investors. That, in turn, means higher borrowing costs for everyone—including the U.S. government, businesses, and consumers. That’s why, even with inflation falling, the 10-year hasn’t followed the script.

But here’s where things get interesting. A new kind of buyer has started stepping in: stablecoin issuers.

Stablecoins—like USDC and Tether—are digital tokens pegged to the U.S. dollar. They’ve become essential plumbing for the crypto economy, but their growth is increasingly relevant to the broader financial system. Why? Because in order to maintain their dollar peg, these companies need to back their coins with something stable—and that “something” is often short-term U.S. Treasuries.

It turns out, that’s a great business to be in. These stablecoin issuers collect real dollars, turn around, and invest them in T-bills yielding 5% or more. That spread—between what they earn and what they pay out—is pure profit. It’s essentially a 21st-century version of a money market fund, just running on blockchain.

And it’s growing fast.

Tether now holds more Treasuries than countries like Australia or Mexico. BlackRock has launched a tokenized Treasury fund that already has nearly $3 billion under management. And just this week, Mastercard announced that it’s integrating USDC and other stablecoins for cross-border settlement.

In other words, this isn’t fringe anymore. It’s moved into the mainstream, and it’s growing quickly.

Even lawmakers are catching up. Just this month, the U.S. Senate passed the GENIUS Act, a bipartisan bill that sets clear regulatory guidelines for stablecoins. It requires full backing by liquid assets—like Treasuries—and regular public disclosures. It’s now headed to the House, and while not law yet, the momentum is clearly there. The takeaway? Regulatory clarity is coming, and that opens the door for large institutions, payment processors, and even governments to scale up stablecoin usage with confidence.

So why does this matter for bond yields?

Because if this growth continues—and all signs suggest it will—stablecoin issuers could become a major new class of permanent Treasury buyers. That consistent demand could help reduce or at least stabilize borrowing costs for the U.S. government over time, especially at the short end of the yield curve.

It’s not a magic fix, but it’s one of the few credible tailwinds for demand in an otherwise stretched bond market. And it’s coming from a place most economists didn’t expect: crypto.

So with that context, let’s jump into the conversation with Ian Reynolds. On this week’s episode of Wealth Formula Podcast, we talk about macro trends, currencies, Bitcoin, and yes—the bond market. But now you’ll see how it all fits together.

513: How to Sell Your Business Without Selling Out – The ESOP Strategy Jun 29, 2025

My mission at Wealth Formula Podcast is to provide you with real financial education.

You may have heard of something called the Dunning-Kruger curve. In short, when you start learning something new, you know that you don’t know anything. That’s the safe zone.

The dangerous part is what I call the red zone—when you’ve learned just enough to think you know a lot, but really… you don’t. Then, eventually, if you keep learning, you get to the point where you finally realize how little you actually know—and how much more there is to understand.

That’s kind of where I am now.

And so, the only thing I can do—and the only thing I encourage you to do—is to keep learning more than we knew yesterday.

Take this week’s episode.

We’re talking about Employee Stock Ownership Plans, or ESOPs.

Until recently, I didn’t fully understand how they worked. And I’d bet most business owners don’t either.

Which is exactly why this episode matters.

Even if you don’t currently own a business or a practice, I still think it’s important to learn about strategies like this—because someday you might. And in the meantime, you’re expanding your financial vocabulary, which is always a good investment.

So, what is an ESOP?

At its core, an ESOP is a legal structure that allows you to sell your business to a trust set up for your employees—usually over time. It’s a way to cash out, preserve your legacy, stay involved if you want to, and unlock some massive tax advantages in the process.

But before we talk about all the bells and whistles, let’s address the number one question that confuses almost everyone—including me:

Where does the money come from?

If you’re selling your company to a trust, and your employees aren’t writing you a check… how the hell are you getting paid?

Here’s the answer:

You’re selling your business to an ESOP trust, which is a qualified retirement trust for the benefit of your employees. That trust becomes the buyer. But like any buyer, it needs money.

So how does it pay you?

There are two main sources:

Bank financing – Sometimes, the ESOP trust can borrow part of the purchase price from a lender.

Seller financing – And this is the big one. You finance your own sale by carrying a note.

That means you get paid over time, through scheduled payments—funded by the company’s future profits. The company continues to generate cash flow, and instead of paying it out to you as the owner, it pays off the loan owed to you as the seller.

So yes—it’s a structured, tax-advantaged way to convert your equity into liquidity using your company’s own future earnings. You’re not walking away with a check on Day 1—but you are pulling money out of the business steadily and predictably, often with interest that beats what a bank would offer.

And here’s the kicker:

If your company is an S-corp and becomes 100% ESOP-owned, it likely pays no federal income tax, and often no state income tax either. That means a lot more money stays in the business—available to fund your buyout faster.

If you’re a C-corp, you might even qualify for a 1042 exchange, which can defer or eliminate capital gains taxes entirely if you reinvest the proceeds in U.S. securities.

And here’s something the experts probably won’t say out loud—but I will:

This isn’t always about selling your business.

Sometimes, it’s just a very clever way to get money out of your business and pay less tax.

You’ll hear ESOP consultants talk about legacy and succession planning—and that’s all true and valuable. But in reality, some owners use ESOPs as a pure tax play.

They stay in control, they keep running the business, and they simply create a legal structure that lets them pull money out tax-efficiently while rewarding employees along the way.

Think of it less like a sale and more like a smart internal liquidity strategy.

You still own the culture. You still drive the direction.

But you’re also getting paid—often better than private equity would pay you—and doing it on your terms, with serious tax savings.

Now, what if you actually do want to exit and walk away?

That works too.

If you’ve built a solid leadership team, you can sell the company to the ESOP, step back, and let them run it. Or the ESOP trust can sell the company later to a third party.

In fact, ESOP-owned companies often become more attractive to buyers because they tend to be profitable and well-run.

So ESOPs don’t limit your exit—they give you more ways to exit. On your terms.

Today on the show, I speak with Matt Middendorp, Director of ESOP Consulting at Vision Point Capital.

He works with business owners across the country to help them figure out whether an ESOP is the right move—and walks us through how the whole thing actually works.

This is complex stuff. That’s why it’s so important to hear it from someone who does this every day.

512: Investing in the Final Frontier – Space Jun 22, 2025

Not long ago, I made the case that it’s not too late to buy Bitcoin—even after it crossed the $100,000 mark. Why? Because the nature of the opportunity has changed. When governments and institutions start stockpiling a finite asset, you’re no longer just betting on price—you’re watching a new system take shape.

And interestingly, a very similar story is unfolding not in financial markets, but in orbit.

For most of the last century, space was strictly the domain of governments. NASA, the Department of Defense, the Russian and Chinese space agencies—these were the only real players. Private capital didn’t have much of a role. That changed with SpaceX.

SpaceX didn’t just innovate—it obliterated the cost structure. In 2010, it cost about $50,000 to launch a kilogram into orbit. Today, thanks to the reusable Falcon 9, that cost has fallen to under $2,000—and Starship could bring it below $500. These aren’t marginal gains. These are cost reductions that unlock entirely new industries.

We’re now seeing an explosion of opportunity: satellite internet that connects the most remote parts of the globe, smartphones that communicate directly with orbiting satellites, and AI-enhanced imaging tools that monitor everything from crop health to military activity in real time.

Last year alone, space startups raised nearly $13 billion in private investment, even in a tighter funding environment. And Morgan Stanley projects the space economy could surpass $1 trillion by 2040—double its current size. Perhaps most surprising of all: over three-quarters of global space revenue today comes from commercial activity, not government programs.

This isn’t science fiction. It’s infrastructure. It’s logistics. It’s telecom. And yes—it’s investable. And that’s why we are talking about it on this week’s episode of Wealth Formula Podcast.

511: Should You Invest in Bitcoin Treasury Companies? Jun 15, 2025

Bitcoin just crossed $100,000, and you’re probably thinking: “I missed it.” And you wouldn’t be alone. That’s how most people feel. They heard about it at $1,000… were told it was a scam at $10,000… waited for a pullback at $30,000… and now that it’s over six figures, they’ve mentally closed the door on the opportunity.

It’s human nature to assume that if you’re not early, you’re too late. But that’s not how this works—not with Bitcoin. In fact, this might actually be the best risk-adjusted time in Bitcoin’s history to buy. I know that sounds counterintuitive, but it’s true—and the data backs it up.

Let’s talk supply and demand.

Since the halving in April, Bitcoin’s issuance has dropped to just 3.125 BTC every 10 minutes. That’s about 450 new coins per day, or just over 3,100 per week. Meanwhile, U.S. spot Bitcoin ETFs alone are buying more than 30,000 BTC a week—ten times what’s being mined. And that’s just the activity we know about from public filings.

It doesn’t include over-the-counter purchases from sovereign wealth funds, corporate treasuries, family offices, or high-net-worth individuals quietly accumulating behind the scenes.

So where’s the extra Bitcoin coming from? It’s coming from long-time holders—early adopters who’ve sat on their coins for a decade or more and are only willing to part with them at much higher prices. This isn’t hype-driven retail mania like in the past. It’s a slow, deliberate transfer of supply from the original believers to large institutions. And here’s the key: those institutions don’t trade. They hold. Often for years—if not indefinitely—as part of their long-term strategic allocation.

You are witnessing Bitcoin being monetized in real time.
It’s not speculation anymore. BlackRock’s IBIT already has over $20 billion under management. Fidelity’s FBTC is acquiring thousands of coins per week. El Salvador and Bhutan are actively accumulating.

Even the U.S. government holds over 210,000 BTC from seizures—and here’s what no one’s talking about: they’re not auctioning it off like foreclosed houses or impounded cars. They’re holding it. The price isn’t rising because of FOMO. It’s rising because it now takes higher and higher prices to pry loose coins from the hands of holders who have no urgency to sell.

Those coins are disappearing into cold storage, long-term trusts, and sovereign wallets—and they aren’t coming back. This is what a supply shock looks like when the buyers have deep pockets and decade-long time horizons.

And yet, the most dramatic shift in Bitcoin isn’t even the price—it’s the risk profile. Five years ago, Bitcoin was still speculative. Custody was clunky. Regulation was unclear. Access was limited. Today, institutions can buy it through BlackRock. Fidelity and Coinbase Prime offer secure custody. Legal frameworks and compliance protocols are firmly in place.

Sure, volatility still exists—but existential risk? That’s largely off the table. Bitcoin is no longer a “maybe.” It’s a “when.” And that’s why the opportunity still exists.
Not because people are afraid to lose money, but because they still don’t quite believe they’re allowed to be this early to something this massive. The truth is, you didn’t miss the train. You missed the garage-band phase.

But now? You’re standing right as Bitcoin steps onto the global stage—surrounded by the biggest asset managers in the world, all scrambling to buy up what little supply is left. The demand is relentless. The supply is fixed. The equilibrium price is rising. I truly believe we’ll see a 10X in Bitcoin over the next five years.

And if you still feel like you’re playing catch-up, you’re not out of options. There are ways to amplify your exposure—like Bitcoin treasury companies.

MicroStrategy now holds over 214,000 BTC and has effectively become a leveraged Bitcoin vehicle traded on the stock market. In past cycles, it’s outperformed Bitcoin itself. Metaplanet in Japan is following the same blueprint, but with a much smaller market cap.

These companies are built to move fast and far when Bitcoin runs. And they offer an intriguing way to make up for lost time—if you feel late to the game.

Now, none of this is investment advice. But you do need to understand what’s happening here. You’re not too late. You’re standing at the threshold of the next chapter in Bitcoin’s evolution—the chapter where it moves from being a niche alternative asset to a permanent fixture in the global financial system.

While the world keeps debating the price, the smart money is quietly accumulating. No, you didn’t buy at $1,000. But that doesn’t mean it’s over. It might just mean you’re finally seeing things clearly—right before the rest of the world wakes up. Or at least before the pensions start piling in.

Back in 2017, I first started talking about Bitcoin—and many of you who took the orange pill profited in the millions. My hope today is simply to sound the alarm again, so that you at least consider giving yourself a shot at participating in what may be the largest wealth transfer in the history of modern finance.

That starts by understanding what this technology is, how it works, and what’s really happening beneath the surface.
To that end, this week on Wealth Formula Podcast, I talk to a guy on the frontlines of Bitcoin and the rise of treasury companies. This is essential knowledge—whether or not you end up investing. Because like it or not, it’s here to stay.

510: Anthony Pompliano on Trump, Tariffs, Bitcoin, and AI Jun 08, 2025

We’re living through truly extraordinary times—not simply because things are changing, but because of how breathtakingly fast those changes are happening. Take artificial intelligence: it’s no longer some futuristic buzzword from a sci-fi movie; it’s already reshaping our lives, economies, and even how we relate to each other.

But here’s what’s really mind-blowing: artificial general intelligence is just around the corner. This isn’t the kind of gradual innovation we’re used to—it’s a complete overhaul. AGI promises to rewrite the rules of entire industries practically overnight, delivering changes more profound and rapid than anything humanity has ever experienced.

Forget the Renaissance, the Industrial Revolution, or even the dawn of the internet—this transformation could eclipse them all, and do it faster than any of us can imagine.

Parallel to the AI revolution, Bitcoin has had its own remarkable story. Just a little over a decade ago, it was an obscure digital experiment—dismissed by mainstream finance as a tech nerd’s hobby, virtual Monopoly money with no real-world impact.

Fast-forward to today, and Bitcoin has completely transformed. Countries like El Salvador now officially recognize Bitcoin as legal tender. Sovereign wealth funds—from Singapore to the Middle East—are quietly stacking it into their national reserves.

Big corporations like MicroStrategy have turned conventional treasury management upside down, boldly choosing Bitcoin as their primary reserve asset. Bitcoin’s journey from fringe curiosity to essential financial infrastructure underscores a major shift in how we store, exchange, and even define value worldwide.

And it’s not just technology and finance that are seeing these seismic shifts; geopolitics and economic strategies are also entering uncharted waters. With the Trump administration back in power, we’re witnessing a total rewrite of the traditional economic playbook.

Tariffs, once cautiously applied economic tools, are now wielded boldly, reshaping global alliances and challenging decades-old partnerships. Long-standing allies like Canada and Europe now find themselves in more transactional relationships, while surprising new economic partnerships emerge based purely on pragmatism. This rapidly evolving landscape is generating unprecedented uncertainty—but also enormous opportunity.

So how do you make sure you end up on the winning side of this historic transformation? By actively educating yourself, staying ahead of the curve, and positioning yourself to prosper.

I’ve always made it my mission to anticipate where things are headed—and more importantly, to share that vision with you. Back in 2017, I first introduced Bitcoin to you when it traded below $5K. Today, with Bitcoin over $100K, I’m more convinced than ever that we’ll see it hit $1 million within the next five years. The conversations I’m having make it seem inevitable.

It’s those conversations you need to be a part of—either having them yourself or listening to them through podcasts like mine.

A good place to start is this week’s Wealth Formula Podcast, where I talk with Anthony Pompliano, better known as Pomp.

509: What’s in the One Big Beautiful (Tax) Bill? Jun 01, 2025

When I was a young surgeon just coming out of residency and finally started making some money, I had to do something I’d never done before: find someone to do my taxes.

Naturally, I asked around. I went to the older, more experienced surgeons in my group and said, “Who do you guys use?” A few names came up, but one firm kept coming up over and over. So, I figured it was probably a good idea to go with them.

One of the main things people said about this firm was that they were “conservative.” At the time, that sounded like a good thing. In hindsight, it absolutely wasn’t.

You see, the problem with how high-paid professionals—especially physicians—choose tax professionals is that we confuse what “conservative” means in different contexts.

As a surgeon, being conservative is a virtue. You don’t operate unless you absolutely need to. You’re cautious. That kind of conservatism saves lives.

But taxes? That’s a whole different game.

The vast majority of the tax code isn’t about when you have to pay taxes. It’s about when you don’t have to. It’s about the legal strategies and frameworks that allow you to keep more of what you earn. It’s not black and white—it’s grey. And to navigate the grey, you need someone who understands how to interpret the code, not just read it like a rulebook.

A “conservative” CPA, in that world, is someone who avoids the grey entirely. They stick to the simplest interpretations, ignore all the nuance, and frankly, don’t work that hard to save you money.

And that’s not what you want in a CPA.

I learned that the hard way. The first couple of years, I basically paid more than I should have because I didn’t know any better. Eventually, I figured it out.

Now, to be clear—there are CPAs out there who work hard, understand the tax code deeply, and can make a huge difference in your tax liability. But chances are, you don’t know them. Because you’re asking your colleagues. Or you’re using the same firm your parents used.

If that sounds like you, I’d encourage you to reconsider before you waste another year failing to optimize your taxes.

One of the guys I think does get it—who really understands how to interpret tax law and save people money—is Casey Meyeres. And he’ll be my guest on this week’s Wealth Formula Podcast and we will discuss the latest tax bill put out by congressional republicans.

508: The Road to 2030 – Are We Headed for Another Great Depression? May 25, 2025

ITR Economics has been predicting a “Great Depression” beginning around 2030. Over the past seven years, I’ve had multiple representatives from their firm on the show, and they’ve never wavered from that forecast.

That might not sound so alarming—until you realize that their long-term predictive track record is 94% accurate over the last 70 years.

To understand why their conviction is so strong, tune into this week’s episode of Wealth Formula Podcast. Once you hear the reasoning, it’ll all make sense.

The major drivers of this projected economic downturn are debt and demographics. We’re spending unsustainably on entitlement programs like Medicare and Medicaid—programs that virtually no politician has the appetite to reform.

At the same time, the Baby Boomers—who make up a huge chunk of the U.S. population—are moving out of the workforce and into retirement, where they’ll become a significant economic burden.

It seems inevitable. But as you listen, I want to introduce one wild card that could change everything: artificial intelligence.

I truly believe we’re on the cusp of a technological transformation that could rival the Industrial Revolution. Think back to when Thomas Malthus predicted global famine due to population growth. What he didn’t account for was the invention of the tractor, which revolutionized food production.

In the same way, we may be underestimating the impact of the robotic age driven by artificial intelligence.

Right now, economic growth is tied closely to the size of a country’s working population. But what if AI allows us to dramatically increase productivity with the same—or even a smaller—workforce? What if robotics drives a low-cost manufacturing renaissance in the U.S., making us competitive again without relying on cheap labor from overseas?

In my view, these are the most important questions in American economics over the next decade. And to understand just how critical it is that we get this right, this week’s episode lays it out clearly: the alternative may look a lot like the 1930s.

Learn more about ITR and their resources:

https://hubs.la/Q03kw-Fs0

507: How to Sell Your Business or Practice May 18, 2025

The Wealth Formula Community is filled with high-paid professionals and small business owners—I’m one of them.

Most of us are so focused on making a living that we rarely think about the day we might want to sell our “jobs.” Over the years, I’ve encountered many physicians and dentists who never even considered an exit strategy until private equity firms approached them.

Some of these lucky professionals have become quite wealthy from these transactions. But here’s the thing—they could have done even better if they’d planned their exit earlier.

Even if your practice or business isn’t huge, it’s still an asset you can sell. In fact, if your business is on the smaller side, it’s even more crucial to optimize it for a sale.

So, how do you do that? It’s actually pretty straightforward once you understand what buyers are looking for. Preparing your business for sale several years in advance can significantly increase the price you’ll get when you sell.

This week’s episode of Wealth Formula Podcast dives into these topics. If you have a business or practice you plan to sell someday, you definitely want to tune in. And even if you don’t, understanding business valuation and the key terms related to business acquisitions is valuable knowledge for any investor.

506: Mortgages and Reverse Mortgages with Wade Pfau May 11, 2025

Wealth Formula Network, our online mastermind group, is where we dive into the financial questions that keep us up at night, and one debate that keeps coming up is whether to pay off your mortgage. It’s a complex question, but let’s unpack the math and the emotion so you can decide for yourself.

First, think of your mortgage as a lever: with just 20% down, you control 100% of your home’s value. On a $500,000 property, that means your $100,000 down payment magnifies the impact of appreciation. If home values rise 4% in a year, your equity grows by $20,000—an effective 20% return on your original $100K. Had you paid the full $500,000 up front, you’d still make the same $20,000—but that’s only a 4% return on investment.

Next, consider opportunity cost. Every extra dollar you funnel into your mortgage is a dollar you can’t deploy elsewhere—whether it’s a diversified stock portfolio, a private deal, or even another rental property. Historically, a balanced investment mix has returned 10% annually, comfortably outpacing most mortgage rates and turning “trapped” home equity into “working” capital.

Here’s something else you might not have considered: your mortgage can actually serve as asset protection. Creditors (or an overzealous bank) are far less likely to tap a property that still carries a lien. By keeping a mortgage in place, you make your home less attractive as collateral and shield your equity in other holdings.

So, when you run the numbers, the case for holding onto lower cost debt and investing the difference is compelling. But, math isn’t everything.

There’s intangible value in the day you write “0.00” next to your mortgage balance: no monthly housing payment, no looming due dates, and a deep sense of security—especially as you head toward retirement.

Bottom line—there is no single correct answer. Know the pros and cons, weigh your financial goals against your emotional needs, and choose the path that aligns with both your head and your heart. Make that decision thoughtfully, and you’ll sleep better either way.

Speaking of mortgages, have you ever wondered what reverse mortgages are all about? Those late-night commercials often make them seem like a ways to rip-off seniors. Is there something really useful there?

Well, I invited an expert onto the show to teach us all about them and was pleasantly surprised. Reverse mortgages can be a smart tool for homeowners nearing retirement and something you might consider for yourself someday even if you’ve got other money.

Curious to learn more? Tune in to this week’s episode of Wealth Formula and get the full story.

505: Andy Tanner on Cash Flowing Stocks for Double Digit Returns May 04, 2025

I used to scoff at Wall Street, believing the stock market was the last place to build real, life-changing wealth. I leaned exclusively on real estate, private businesses—even Bitcoin—to grow my net worth.

But times change. I’ve softened my stance on equities and now see a place for stocks in my portfolio—just not the way most people do. I think of them as cash-flowing assets, much like real estate, following the approach of Andy Tanner, Robert Kiyosaki’s “Rich Dad” stock advisor.

Over the past two weeks, I decided to put Andy’s strategy to the test by selling covered puts on companies I wouldn’t mind owning. In that short span, I’ve already pocketed a 4% return. Sure, it could be beginner’s luck—or it might be the rich option premiums on names like Tesla and MicroStrategy—but I’m off to a promising start.

Can I realistically expect 80–100% annualized returns? Probably not, especially once I’m assigned and actually own some of these shares. But those who follow Andy’s more conservative, textbook version of the strategy often cite annualized returns of 25%—and that’s what I’m aiming to learn.

So I’m enrolling in his next Cash Flow Academy course to master the details. The takeaway? Even an old dog like me can learn new tricks, so long as he keeps an open mind.

Don’t worry—I’m still a real estate guy at heart. But I appreciate having some liquid, income-producing positions, and this feels like a smart way to do it. If you’ve got a retirement account that could use a boost, you might find this approach especially appealing.

To hear why I’ve done a complete 180 on stocks, tune into this week’s episode of the Wealth Formula Podcast, where I sit down with the cash-flowing-stocks guru himself, Andy Tanner.

P.S. Don’t miss Andy’s free upcoming event—details here: https://yv932.isrefer.com/go/siwmo/ccc/

504: Maximizing Profits by Paying Less Tax: Deferred Sales Trusts Apr 27, 2025

The last couple of weeks, we’ve been deep in the world of buying businesses. But what happens when it’s time to cash out? Maybe you’re ready to sell your business, that investment property you’ve managed for years, or another major asset you’ve poured your energy into.

If you’re like most people, the thrill of a big sale is quickly followed by a less-exciting thought: “Wait, how much am I going to owe in taxes?” It’s the classic one-two punch—first the celebration, then the sinking feeling as you picture Uncle Sam’s hand reaching for a chunk of your hard-earned gains.

But here’s the good news: you actually have options. Real, legal, IRS-approved options. And the right strategy can mean the difference between watching your profits shrink and putting your money to work for you—sometimes for years to come. Of course, things get a little trickier if you have a mortgage or other debt on the property, but don’t worry—we’ll break that down too.

Let’s start with one of the oldest tricks in the book: the 1031 Exchange. If you own investment real estate, you’ve probably heard about this one. The idea is simple: sell your property, buy another “like-kind” property, and—if you follow the rules—kick that tax bill down the road.

But here’s the twist: if you’ve got a mortgage, you’ll need to replace that debt with equal or greater debt on your next property, or pony up the difference in cash. Otherwise, the IRS will want a piece of the action right away. So yes, leverage matters!

Now, maybe you’re tired of being a landlord but still want those tax perks. Enter the Delaware Statutory Trust, or DST. This is essentially 1031 exchanging into a syndication that is designed for this type of thing. You sell your property and, instead of buying another one yourself, you buy a slice of a big, professionally managed property—like an apartment complex or shopping center. DSTs often come with their own loans, so you can match your old mortgage and keep the tax deferral going. The upside? No more midnight calls about leaky faucets. The downside? You’re trusting someone else to run the show and they need to be good at it (just like any syndication operator). And, there are some rules and restrictions that can affect your returns negatively.

But what if you’re selling a business? That’s where Employee Stock Ownership Plans, or ESOPs, come in. Imagine selling your company to the people who helped you build it—your employees—and deferring a big chunk of your capital gains tax in the process. It’s a win-win, but if your business has debt, things can get complicated fast. This is definitely a strategy where you’ll want a seasoned advisor in your corner.

Now, let’s talk about installment sales and structured sales. In this scenario, instead of getting paid all at once for your asset, you spread out the payments—and the taxes—over several years. Structured sales even bring in a third party to guarantee those payments, adding an extra layer of security. But—and this is a big but—if you have a mortgage, the IRS treats the amount the buyer pays off as if you got that money in cash on day one. So, you’ll pay taxes on that portion right away. For example, if you sell for $1 million but owe $600,000, you can only defer taxes on the $400,000 you actually receive over time. The more debt you have, the less you can defer.

And finally, we have the Deferred Sales Trust—the topic of this week’s Wealth Formula Episode. Think of this as the “supercharged” version of a structured sale. Instead of waiting on the buyer for payments, you transfer your asset to a trust, which sells it and invests the proceeds. You get to choose how and when you receive your money, and the trust can invest in all kinds of assets while your taxes stay deferred. It’s flexible, it’s powerful, and it gives you the chance to grow your money while you wait.

Which of these strategies is right for your situation depends on your goals, your assets, and whether you have debt on the property. The key is knowing your options and working with someone who can guide you through the maze.

That said, for assets that have no debt, I really do think the deferred sales trust is something that everyone should know about, and that’s what my guest on this week’s episode of Wealth Formula Podcast is an expert on.

503: How to Fund Your Commercial Real Estate or Business Acquisition Apr 20, 2025

Last week on Wealth Formula Podcast, we dove deep with an expert who specializes in due diligence for small business acquisitions.

To reiterate, what makes small business acquisitions especially enticing are the incredible financing opportunities available through the SBA.

Imagine this: you only put down 10 percent on a $5 million business, and suddenly, you’re in control of a business that throws off a million dollars per year in cash flow after paying monthly loan charges. That’s what these numbers look like.

Now obviously, it’s a business, and it’s not going to be quite that easy. That’s why you have the higher cap rate. But the value proposition makes it worth consideration nonetheless.

It’s complicated stuff, and whether it’s buying commercial real estate, funding a promising startup, or acquiring a multimillion-dollar established business, the right guidance can mean the difference between stress and success.

So, this week on Wealth Formula Podcast, we’re taking the next logical step and talking to an expert on funding these deals. After all, there is no sense in doing all that due diligence if you can’t actually pull the financial trigger.

502: Should You Buy a Business? Apr 13, 2025

Lately, I’ve been thinking about starting a new business. I know the market seems like it’s crashing around us, and we’re probably headed into a recession. But hey—I started my first business back in 2009, and it doesn’t get much worse than that, right?

Well, maybe it can. And that’s exactly why I’ve been considering buying a business instead of starting one from scratch, particularly because of the SBA loan options available right now.

Here’s how an SBA 7(a) loan breaks down for a $1,000,000 business purchase:

Total Loan Amount: $1,000,000

Typical Down Payment (10%): $100,000

Amount Financed: $900,000

Loan Term: 25 years

Estimated Monthly Payment (at 10.25% annually): $8,200

Now, that monthly payment isn’t exactly cheap. But consider this: a business selling for $1 million typically goes for about three times its annual earnings. For those of you from the real estate world, that translates to what we’d call a cap rate of about 33.33%. And remember—anytime your cap rate exceeds your interest rate, leverage works in your favor.

Let’s break down the numbers clearly. With annual earnings of $333,333 ($1,000,000 divided by 3), and an annual debt service of about $98,400 ($8,200 x 12 months), your annual cash flow comes out to around $234,933. Since you only invested $100,000 to get this cash flow, you’re looking at a cash-on-cash return of about 235%.

Pretty impressive, right?

Of course, the devil is always in the details. One reason I’ve never pulled the trigger on buying a small business like this is because, as someone who’s started businesses myself, I know firsthand just how volatile small businesses can be.

Often, their success hinges on key factors that don’t necessarily transfer smoothly to a new owner.

Think about it—if small businesses were all this easy, why would anyone ever bother buying anything else?

That said, my guest on this week’s Wealth Formula Podcast strongly advocates for buying existing small businesses and believes most people are overlooking a fantastic opportunity. He makes a compelling case—one that might just have you checking out business listings yourself.

Curious? Make sure you tune into this week’s Wealth Formula Podcast and see if buying a business might be the right move for you!

Time to Invest! Apr 08, 2025

Now’s the time to move.

Markets are down, fear is high—and that’s exactly when the smart money starts to deploy. If you’ve been sitting on the fence about the Wealth Accelerator, this might be your moment.

Learn how you can leverage market downturns with guardrails in place and amplify your upside while protecting the downside.

Connect with Rod at https://wealthformulabanking.com

501: Real Estate Postmortem – Lessons from the Crash and the Opportunity Ahead Apr 06, 2025

Charlie Munger, the late sage of value investing and Warren Buffett’s right-hand man, once said there are only three ways a smart man can go broke: “liquor, ladies, and leverage.”

Now, of the three, leverage is the sneakiest. It shows up dressed like opportunity, whispers promises of scale and speed, and before you know it—you’re in a capital call or margin call.

But let’s be clear: leverage isn’t the enemy. In fact, if your goal is to become truly wealthy—if you want to build lasting, generational wealth—you’re going to need it. Unless you’re one of the lucky few who can throw a football 70 yards or sell out Madison Square Garden, leverage is your ticket to the big leagues.

At its core, leverage is simply using other people’s money—or time—to amplify your results. It’s a mortgage on a cash-flowing property, a business line of credit, or a carefully constructed insurance strategy. When used properly, it’s the financial version of driving a car instead of walking. It gets you there faster.

Leverage magnifies everything—the gains, yes, but also the losses. It’s the volume knob on your financial life. And in the last few years, when interest rates skyrocketed at the fastest pace in modern history, that volume went from background music to full-blown chaos.

And here’s the thing: it wasn’t just the rookies who got caught. This cycle humbled everyone—developers with decades of experience, funds with billions under management, and institutional players with Ivy League MBAs. When the tide went out, even the smart money found itself swimming without trunks.

Some were caught overleveraged. Others had short-term debt in long-term projects. And a whole lot of people made the fatal assumption that the low-rate environment would last forever.

It didn’t.

But…just like the last financial crisis, this kind of wreckage creates extraordinary opportunity—if you know how to navigate it.

Because as painful as the last couple years have been for real estate investors, they’ve also opened the door to a once-in-a-decade setup. Distressed assets. Motivated sellers. And amidst all the carnage, leverage—used carefully, conservatively, and respectfully—can once again become the powerful tool it was meant to be.

This is not a time for fear. It’s a time for strategy. For discipline. For underwriting with humility and deploying capital.

This week’s episode of Wealth Formula Podcast is a postmortem on what went wrong in real estate over the past few years as interest rates surged and markets shifted. We break down the hard lessons learned—even by seasoned pros—and explore why today’s environment is starting to resemble the rare window of opportunity we saw in 2010–2011, in the wake of the mortgage meltdown.

500: What Is the Big Deal about Private Equity? Mar 30, 2025

When it comes to building wealth, the allure of exotic investment products can be hard to resist.

From cryptocurrencies to rare collectibles, these options promise excitement, exclusivity, and the potential for big returns.

But are they truly superior to buying the market or some rental real estate? Let’s take a look at a few popular exotic investments.

1. Cryptocurrency: High Risk, High Reward?

The upside is real—early adopters have seen life-changing gains, and blockchain technology offers genuine innovation. However, the volatility is intense; prices can crash as fast as they soar, and risks like hacks or regulatory shifts loom large.

Compared to the stock market’s historical 7-10% average annual return (adjusted for inflation), crypto offers a wild ride that can pay off—but only if you time it right. In my opinion, if you want to jump on the ride, there is no better time than now.

2. Rare Collectibles: Passion Meets Profit

Investing in art, fine wine, or vintage cars blends enjoyment with potential gains. A well-chosen piece can appreciate significantly.

For enthusiasts, the emotional reward is a big draw. On the flip side, these markets are illiquid (selling takes time and effort), and costs like storage, insurance, and commissions add up.

Unlike real estate, which generates rental income, or stocks with dividends, collectibles don’t pay you while you hold them.

3. Private Notes: High Yields with a Catch

Private notes involve lending money directly to individuals or businesses—often real estate developers or small companies—in exchange for interest payments, typically offering yields above traditional bonds or savings accounts.

It’s a chance to earn solid returns, sometimes 8-12%, while supporting specific projects or borrowers. The appeal lies in the potential for steady income and the ability to negotiate terms.

However, defaults can spike during economic downturns, and your money is often locked in until the note matures.

Compared to real estate, which offers rental income and appreciation, or stocks with liquidity and diversification, private notes are a niche play that requires careful vetting of borrowers to make sense.

4. Private Equity: The Elite Investment That’s Not Always Golden

Speaking of niche plays, private equity (PE) often comes up as the ultimate exotic investment, especially for the wealthy.

It’s frequently billed as a special opportunity reserved for the elite, where funds pool big money to buy, revamp, and sell companies for hefty profits. The perception is that PE is a gold mine, delivering returns that leave the stock market in the dust.

But is it really the wealth-building powerhouse people think it is? This week’s guest on the Wealth Formula Podcast argues that private equity might not be the golden ticket it’s cracked up to be.

499: Scott Bessent’s 3-Part Playbook for America Mar 23, 2025

As I reflect on the difference between Trump’s first administration and his current one, I notice a marked shift. When Trump first took office, his message and objectives weren’t clear to me. Beyond the promise of building a wall, I struggled to understand his vision.

This time around, it’s vastly different. His message is laser-focused, and I’ve been particularly intrigued by the administration’s economic approach. Many of his advisors and cabinet members come from the private sector, bringing a deep understanding of markets and business that’s unprecedented in American government.

One of the most notable figures often in the news is Elon Musk. There are mixed feelings about him now, with some people even vandalizing Teslas—a stark contrast to how he was viewed just a few years ago as an icon among liberals. Personally, I admire Elon for his vision and commitment to changing the world through Tesla and SpaceX. He doesn’t need to be involved in these endeavors, but his passion for making a difference is evident. I believe his efforts to impact America’s economy align with his broader mission. What better way to change the world than by strengthening the economy of the greatest nation on earth?

However, Elon isn’t the only notable figure Trump has brought on board. There’s an impressive roster of individuals, including Treasury Secretary Scott Bessent, who might be the mastermind behind Trump’s overarching financial plan for America. I’ve been following Bessent closely, reading his statements and listening to his insights. When I tune in to what he has to say, the confusing aspects of the current economy become much clearer.

On this week’s episode of the Wealth Formula Podcast, I’ll share what I’ve discovered and what I think it means.

498: What Renewable Energy Looks Like without the Politics Mar 16, 2025

Renewable energy is often discussed in political terms, but here’s a straightforward look at the financial side.

In the last decade, solar energy costs have fallen dramatically—by nearly 90% since 2010.

In top markets, solar panel costs dropped from about 29 cents per kilowatt-hour to under 3 cents. By contrast, new coal and gas plants still cost between 5 and 17 cents per kilowatt-hour, and these figures don’t include the unpredictable nature of fuel prices.

According to firms like Lazard, solar and wind power now average around 2 cents per kilowatt-hour, while operating existing coal plants typically costs 4 to 8 cents. This clear cost advantage is encouraging a shift away from fossil fuels.

Globally, the change is evident. Countries like China, Europe, the United States, and India are ramping up their renewable investments, with almost every new power plant built today relying on solar or wind.

Nuclear power is also seeing increased investment as a reliable, low-carbon option. As we have discussed on previous shows, that is my primary reason for being so bullish on uranium stocks.

The bottom line is that even if you’re not interested in the conservationists’ approach to energy, renewables are replacing fossil fuels rapidly.

This week’s guest on Wealth Formula Podcast will help you capitalize on that.

497: Starting from Scratch as a New High Paid Professional Mar 09, 2025

It’s been some time since we did an Ask Buck show, and I realized last week that I have some unanswered questions in the inbox.

The first question I read ended up being kind of a broad one, but it made me really think about how it all started for me.

I started this podcast over a decade ago after realizing that there were not a lot of good resources for high-paid professionals to learn about personal finance.

Of course, there were the Suze Ormans of the world, but what I wanted to do was to share what I had learned in my attempts to mimic the wealthy when I first came out of surgical residency training.

There were many painful lessons along the way on my own journey. But I did manage to put it all together better than most.

With that, I feel comfortable providing perspective on how I would do it if I were starting over again today. That’s exactly the question I got from one of our listeners and the one question I will address on this week’s Wealth Formula Podcast.

496: The Gold Bug Who Got Infected by Bitcoin Mar 02, 2025

I really hope you listened to last week’s episode of Wealth Formula Podcast. If you did, it may have convinced you to get some exposure to bitcoin in your portfolio.

And if you did that last week, all I have to say is…WELCOME TO CRYPTO!

As of this writing, bitcoin is trading at approximately $84,000, a decline of over 20% from its recent high of nearly $107,000.

If you’re not used to this kind of volatility, get used to it. And, I might also make the suggestion that you embrace it! Why?

Well, lets take a brief look at some bitcoin history:

2013 Cycle: This is ancient history of course. But Bitcoin reached around $260 in early 2013 before falling to nearly $70 by mid-year—a decline of about 73%. Over the next seven months, the price recovered to approximately $1,200 by November 2013.
2017 Record-Breaking Year: I had the pleasure of being part of this one having entered the bitcoin world in 2016 myself. Bitcoin started 2017 at roughly $1,000. Early in the year, it experienced a correction, falling approximately 34% to around $660. However, by December 2017, Bitcoin had risen to nearly $20,000—an increase of nearly 20 times within one year.
2020 Cycle with Institutional Interest: Prior to the May 2020 halving, Bitcoin traded at about $10,000 before a 20% retracement brought it to around $8,000. The recovery following this dip was notable to say the least, with the price reaching roughly $64,000 by April 2021.

The point I am making, of course, is that bitcoin has historically experienced significant corrections which have often led to rapid recoveries within defined periods.

It is not insignificant that there are some big buyers out there in 2025. The current dip coincides with increased interest from institutional investors:

Financial Institutions: Banks and financial services firms are increasingly offering Bitcoin-related products.
Corporate Adoption: More companies are adding Bitcoin to their treasuries as a hedge against inflation.
Spot Bitcoin ETFs: The approval and launch of spot Bitcoin ETFs in the U.S. have attracted additional institutional capital.

This increased involvement has shifted the perception of Bitcoin from a speculative asset to one that is integrated into diversified portfolios. Even in 2017, a lot of smart people truly thought that bitcoin would crumble to nothing.

But now we even have government entities exploring bitcoin’s role as a reserve asset. Countries such as El Salvador have adopted Bitcoin as legal tender, and others such as the United States are evaluating its potential as a reserve asset.

Some U.S. states are considering legislation to allocate up to 10% of public funds to digital assets.

The point I’m making here is that bitcoin is not going to zero. In fact, the finite amount of bitcoin along with all the new buyers can mean only one thing over the next few years: bitcoin is going up in value.

What I am trying to say here is that you may seriously want to consider buying the dip. This is, of course, not financial advice. You can speak with your wealth advisor who knows nothing about bitcoin to do that lol!

Oh, and by the way, Solana got slaughtered too. And so you might look into that one as well since its better then ethereum in virtually every way but has a fraction of the current market capitalization.

If you are getting sick of all this crypto talk, I apologize. In fact, this week’s episode of Wealth Formula Podcast was supposed to be about gold and silver. But it turned out even the gold bug I interviewed had gotten infected by bitcoin and the conversation moved in that direction pretty quickly!

495: What You MUST Know about Bitcoin in the Era of Wall Street and Government Adoption! Feb 23, 2025

To my credit, I was relatively early in my recognition that Bitcoin was for real and that it wasn’t going to zero. It was 2016, and, up to this point, I had the misfortune of hearing only one narrative about Bitcoin—that of Peter Schiff.

Peter is a very smart guy and quite convincing if you listen to his podcast. At the time, I was an avid listener and my opinion on bitcoin was shaped only by his view.

It wasn’t until I went to an entrepreneurs’ meeting in the Fall of 2016 that I heard the real narrative behind Bitcoin for the first time. Now’s not the time for me to explain it, but for those of you who are interested, I would suggest reading The Bitcoin Standard by Saifedean Ammous.

Inspired by this new perspective, I went home from that meeting and bought Bitcoin for the first time—at about $5K. In fact, with bitcoin fluctuating up and down I managed to acquire a decent “bag” of bitcoin by the time “crypto winter” arrived in 2017.

Fast forward to today, and that bitcoin would be worth eight figures had I held it. But I did not. You see, in 2019, I had some bills to pay, and the Bitcoin price hadn’t moved in a couple of years.

Selling my Bitcoin seemed like the easy solution. After all, I reasoned, I could always buy it back. Well, I never did buy it all back. My family acquired some through kids’ trust over the years, but nowhere near the amount that I initially had.

This decision ended up being one of the most painful financial lessons I’ve learned over the years (and there has been plenty of pain!).

And the lesson is not just about Bitcoin. The lesson is about following your convictions. If you go back to my podcasts on Bitcoin over the past 7-8 years, you can hear it in my voice.

Throughout that time, I made predictions over and over—many of which have come to fruition already and others that we seem to be on the verge of.

So why, given my convictions, don’t I own much Bitcoin? Because I didn’t follow through on those convictions. I thought I could get in right before things started taking off. Rather than accumulating bitcoin along the way, I waited for just the right price—which never seemed to be low enough.

In hindsight, what difference would it have made if I bought at 3K, 5K, or even $20K at this point? If I believed, as I have predicted that bitcoin would hit $250K within the next 3 years, why would that matter?

There’s another reason I didn’t buy Bitcoin: it provided no tax benefit. I put almost everything into real estate and other tax-efficient investments. That’s not a bad strategy in general, but not carving out an allocation for something I believed in so much was just stupid.

The key lesson here is about being rational and following your convictions. Don’t get greedy and don’t always let the tax wag the dog.

Now, you might be wondering what I think about Bitcoin today at nearly $100K. Well, my stance hasn’t changed. I still believe Bitcoin is going to hit at least $250K within the next 3 years. So, in that regard, it’s still something I would buy if I had the liquidity (as real estate investors often do not).

The story for Bitcoin is getting better and better every day. And I think it’s very important for you to take it seriously if you are not. After all, Wall Street and Governments across the world have adopted it as a truly legitimate asset, and it may very well end up an asset stockpiled by the US treasury in short order.

You may or may not decide to invest in it, but not knowing about it as an investor in this day and age, is ill-advised. To understand why, listen to this week’s episode of Wealth Formula Podcast.

And, I am serious when I say, miss this episode at your own financial peril.

494: Wealth Formula Community Members Share Their Stories Feb 16, 2025

Hey everyone,

On this week’s Wealth Formula Podcast, I’m talking with members of our very own community who are using Wealth Accelerator and Wealth Formula Banking as part of their personal financial plans.

They’re going to share their individual journeys – why they chose Wealth Accelerator/WFB, what challenges they faced along the way, and, most importantly, what kind of results they’re seeing.

These are real stories from your peers that you should find helpful. If you’ve been looking for strategies that are both safe and profitable in times of financial volatility, this is an episode you won’t want to miss.

Join me as we explore real-world examples of how sophisticated strategies, grounded in solid mathematics and reliable insurance products, can help you engineer a more secure financial future.

Buck

493: Tax Strategies for High Paid Professionals Feb 09, 2025

People have a misconception of what the tax code is. While there are a few pages devoted to telling you when you must pay taxes, the majority of it is about the situations in which you can avoid them.

That’s why it’s important to find a competent tax professional. And that’s not as easy as you might expect. You see, most high-paid professionals get their tax professionals from referrals from other professionals.

And, most high-paid professionals like doctors are very risk-averse when it comes to anything financial. So they tend to go to the “conservative” CPA—the one who never gets audited.

Well, that CPA has the easiest job in the world. He’s got all sorts of high-paid clients who want him not to do his job, which, in my opinion, involves trying to find you deductions.

Now, let me be clear. I’m not suggesting that you try to find someone who is going to break the law for you. You just need someone who is willing to look at the tax code and find out where there are opportunities to save you on taxes.

When you go down that rabbit hole, though, you also need to have your guard up. Some of the strategies used by CPAs can get a little too risky. The last thing you want is to end up paying penalties and end up paying more money than you would have in the first place.

In addition, even if the tax code is used appropriately, it may be the case that the end operator is not going to make the theoretical benefit actually happen.

Let’s take oil and gas for example. The advantages of investing in drilling programs are very clear in the tax code. The problem is finding an opportunity that might actually pay you a return. Of the multiple investments I’ve made in oil and gas, I’ve NEVER made money. In fact, I’ve never even gotten my principal back.

My conclusion over the years has been that the best way to save on taxes is actually good planning. As Tom Wheelwright, author of Tax-Free Wealth, says, if you want to change your tax, you have to change your facts.

Bottom line: there are plenty of ways to save on taxes if you think bigger and plan smarter. You don’t have to do anything crazy or controversial. Just be strategic, understand the rules, and always, always know your risks.

Remember, in the world of taxes, pigs get fat, and hogs get slaughtered. So be aggressive, but be smart about it. Your future wealthy self will thank you.

This week’s podcast is going to give you some good ideas and, in my opinion, some very bad ones!

492: What you Need to Know Today about DeepSeek, Quantum Computers, and Blockchain Feb 02, 2025

When I started this podcast a decade ago, I was completely focused on real estate. I had some pretty dogmatic views back then and didn’t really consider other investment options.

That mindset worked for me. I’ve been a real estate investor since 2010, and while the market’s in a tough spot right now, we did enjoy over a decade of a bull market. That’s just how investing goes—ups and downs, and you hope the good times outpace the bad.

Regarding real estate, I believe we’re essentially back in 2010. The markets have taken a beating, and if you can stomach it, this is a prime time to buy. History shows that people who act when things look grim often reap big rewards down the line.

That said, I’m more open to other types of investments these days. As this cycle eventually recovers, I want to share more than just real estate opportunities with you. There’s a whole world of potential out there, and it’s important for both of us to stay informed.

Lately, I’ve been especially interested in tech. I did my surgical residency in San Francisco and knew plenty of Silicon Valley folks about 15 years ago, but I regret not digging deeper into that scene. Back then, I didn’t have the money to invest, so I never thought to learn more.

Better late than never, right? Now I’m in a position where I can invite really smart people onto this podcast to chat about fascinating topics. Over the next few years, that’s what I plan to do. I want to make an effort to learn about new things with you that might also help us financially.

This week’s podcast is a great example. It was a blast because I learned so much in such a short period of time, and it really sparked my curiosity about opportunities in tech—maybe through angel investing or venture capital.

To do anything like that, you need to get educated. And talking to my guest this week was a right step in that direction.

In less than one hour, I learned why tech investors panicked last week when China’s AI platform, DeapSeek, revealed its superiority and cost-effectiveness compared to leading American AI platforms. I finally understood what the big deal about quantum computing is. And I became further convinced that Ethereum will eventually get wrecked by Solana.

That is a HUGE ROI on time spent!

So, expect more episodes like this. I hope you’re up for it. For now, check out my conversation with Arun Krishnakumar—it’s the most interesting conversation I’ve had in a while!

491: Tom Wheelwright – Tax Changes Coming for 2025! Jan 26, 2025

For most people, taxes are nothing more than a necessary evil—a burden to be minimized and avoided at all costs. But that mindset might not be the most productive one to take.

Consider that the tax code might not just be a drain on your resources but a roadmap to creating wealth. The truth is that the tax code is nothing more than a series of incentives. It’s filled with opportunities for those who understand how to use it.

As painful as it may be, think of the government as a business partner offering rewards for certain behaviors. Invest in housing, create jobs, or produce energy, and you’re rewarded. These aren’t loopholes or tricks but deliberate strategies to stimulate economic growth.

But most people miss the opportunity. Why? Because they treat taxes as a once-a-year obligation rather than a year-round strategy. They react instead of plan. And in doing so, they leave money on the table—money that could be used to fuel their financial future.

Every financial decision has tax implications. Whether it’s how you structure your business, where you invest, or how you time your expenses, the choices you make today ripple through your financial future. When you approach taxes strategically, they become more than just a line item on a balance sheet—they become a tool for helping you achieve financial freedom.

That’s what separates those who feel trapped by taxes from those who use them as a springboard for wealth. It’s not about avoiding responsibility; it’s about understanding the rules of the game and playing it well.

In this week’s episode of Wealth Formula Podcast, I explore the latest incentives with someone who knows the game as well as anyone: Tom Wheelwright. He’s a tax and wealth strategist who has helped countless entrepreneurs and investors transform their approach to taxes, unlocking incredible opportunities in the process.

If you’re ready to stop dreading tax season and start leveraging it to your advantage, this is an episode you can’t afford to miss.

490: Investing Tips with David McKnight Jan 19, 2025

Let’s talk about a fundamental difference in the way traditional investors think versus those of us who invest in alternative assets.

The traditional investor sees the stock market, bonds, and mutual funds as the safe and stable way to grow wealth over time. And look, stability is not a bad thing. But here’s the problem: how many people do you know who have become truly wealthy by just sticking with traditional investments?

Sure, you can retire comfortably if you’re disciplined, but are you really changing your socioeconomic place in life with a 6% or 7% annual return? Probably not.

Now, alternative asset investors? We play a different game altogether. We know that the big wins in traditional markets are rare.

In alternative investments, we aren’t just chasing stability — we’re chasing some level of asymmetry. Yes, we still face risks and sometimes we find ourselves in cycles like the last couple of years where we may lose, but the potential upside of alternative investing can be disproportionate to what you put in. These are the kinds of opportunities that can accelerate wealth creation far beyond what traditional investments can offer.

Think about it this way: the traditional investor spends their entire career trying to fill up a big cup of water — a portfolio large enough to sip from in retirement. Their hope is that they won’t run out of water before they die. That’s the game plan. Save enough, live conservatively, and pray the cup doesn’t run dry.

But for us as alternative investors — especially cash flow investors — the goal is fundamentally different. We’re not looking to hoard a finite supply of water. We’re building streams. Streams of cash flow that keep running no matter what.

Streams that don’t dry up. Streams that allow us to live our lives without constantly worrying about running out. It’s a completely different mindset. It’s not about rationing — it’s about abundance.

The differences in this type of thinking become pretty clear in this week’s episode of Wealth Formula Podcast. Do me a favor, listen to this show until the very end. I was so baffled by this interview that I asked our own Rod Zabreiwski of Wealth Formula Banking fame to help me understand my confusion!

489: The Humble Investor Jan 12, 2025

As intelligent people, we often overcomplicate things? Whether it’s in business, health, or relationships, we’re constantly seeking advice, following trends, and trying to use complex strategies to optimize our results.

As you may know, I am deeply entrenched in the longevity space. As a physician and science person, I am fascinated by this stuff.

And while there are all sorts of drugs, supplements and tactics that could incrementally add to our lifespans, right now it is pretty clear that the most impactful principals to live a long healthy life are still pretty boring: Follow a good diet, get lots of exercise and make sure you do what you can to get a good night’s sleep.

Of course I have plenty to say when we drill down on each one of those issues but the point is that, right now, focusing on eating, exercising and sleeping are far more impactful than any pill you could take or tactic you could could employ.

As is the case for most things in life, the fundamentals are often what really matter and they are not often hard to see.

In personal finance, the principals are also pretty basic. For most of your investments, stay disciplined, rely on data, and avoid the allure of the “next big thing.”

This week, I talk to someone practices the art of sticking to fundamentals while challenging the status quo in investing.

Dan Rasmussen, the founder of Verdad, is a quantitative investor with a knack for cutting through the hype and finding real value.

Drawing on his experience at firms like Bridgewater Associates and his own billion-dollar fund, Dan’s approach is all about stripping away emotion, following the data, and learning from history.

While his expertise may focus on public markets, the lessons he shares apply to any investor—whether you’re buying rental properties or managing a stock portfolio. So, let’s dive into the conversation and see what we can all learn about investing with humility and discipline.

488: On to 2025 Jan 05, 2025

Wealth Formula Nation,

First and foremost, let me start by wishing you a Happy New Year! It’s 2025, and as we shake off the confetti and champagne from the celebrations, we step into a year full of possibilities—and, let’s be honest, plenty of question marks.

Every new year brings its own share of challenges and opportunities, but this one feels particularly charged. We’re looking at a world where the economic landscape is being rewritten in real time.

There’s a new administration in Washington, which always stirs up the pot, but this time, it’s not just a change in leadership—it’s a potential sea change in policy.

So, what’s ahead? Will we see sweeping tax cuts as promised? And if so, how will those affect deficits, inflation, and interest rates? Can the economy sustain the heat, or are we looking at overheating and runaway inflation?

Then there’s the topic of spending cuts—are they realistic, or will they end up being all talk and no action? And tariffs—will they be wielded as an economic weapon, and if so, how much will they impact everyday consumers?

These aren’t just academic questions—they have real-world implications for your investments, your business, and your financial future.

For example, real estate investors are watching interest rates like hawks. The Fed said they were going to lower them throughout 2025 but then backed off on those statements in the last meeting, taking more of a wait-and-see position.

Meanwhile, deregulation could create new opportunities for businesses, but will it go far enough to make a real difference? It’s a lot to unpack, and that’s what this week’s guest on Wealth Formula Podcast will help us do.

Joining me is Howard Yaruss, an economist, professor, and author of Understandable Economics, a book that breaks down economic concepts in a way that’s accessible to all of us.

Howard has the ability to take complex ideas and make them relatable, and he’s here to share his insights on what we might expect in 2025.

487: Robert Kiyosaki on the State of the Economy Dec 29, 2024

Like everyone else, as the new year approaches, I become a bit reflective. I’m not really the kind of guy to have heroes nor do I fawn over celebrities.

In fact, there is only one person in the world who I credit with fundamentally changing the course of my adult life: Robert Kiyosaki.

I’ve had the privilege of meeting Robert multiple times over the years and have been fortunate enough to have some meaningful private conversations with him.

But the real impact he made on me was through his book called “Cashflow Quadrant.” Had I not read that book, I doubt I would have ever started this podcast. Honestly, I’d probably be an academic surgeon somewhere with little interest in the economy or investing.

What’s truly remarkable is the incredible impact his books have had on so many people. Kiyosaki’s teachings, especially “Rich Dad Poor Dad,” have been a game-changer for countless individuals worldwide, sparking a revolution in financial thinking.

His emphasis on building businesses and creating assets has been a wake-up call for many. I’ve heard numerous stories of people leaving traditional careers to venture into entrepreneurship, building successful real estate portfolios, and overcoming long-held limiting beliefs about money and success. It’s astounding how his teachings have ignited a wave of financial literacy and entrepreneurial spirit.

Now, as a middle-aged guy, I find something else about Kiyosaki perhaps equally inspirational: The fact that he published “Rich Dad Poor Dad” at age 50. It’s a powerful reminder that it’s never too late to learn, grow, and achieve financial success. Remember this the next time you think you might have missed your chance.

If you haven’t already, I urge you to pick up a copy of “Cashflow Quadrant” and experience it for yourself. It might just change your life as it did mine. In the meantime, this week’s Wealth Formula Podcast features my latest conversation with Robert Kiyosaki.

486: Why Energy Might Be the Smartest Way to Invest in AI Dec 22, 2024

Artificial intelligence isn’t just a passing trend—it’s a revolutionary force reshaping industries, driving innovation, and changing the way we live.

But as investors, we face a critical challenge: how do we capitalize on this seismic shift without falling into the trap of picking winners and losers in an unpredictable landscape?

History has shown us how tough it is to get it right with emerging technologies. The dot-com era gave us Amazon and Google—grandslam investments that transformed early believers into billionaires. But for every Amazon, there was a Pets.com, a tale of overhyped potential that never materialized.

With AI, the stakes are even higher. We know the technology is real, and we know it will grow exponentially. But betting on individual AI companies can be like playing the lottery.

What we do know with certainty, however, is that AI is an energy beast. The computing power required to train and run large AI models is staggering—and it’s only going to increase.

That’s why I believe one of the smartest ways to invest in AI might not be through AI stocks at all. Instead, it could be by focusing on the foundation AI cannot exist without: low-cost energy.

While solar, wind, and traditional energy sources will play a role, one energy source stands out as particularly intriguing: uranium.

Nuclear energy powered by uranium is not only incredibly efficient but also one of the most consistent and scalable sources of clean energy. As demand for reliable energy surges to support the AI revolution, uranium could become an unsung hero in this story.

To explore this idea in more depth, I recently sat down with a uranium expert. We discussed the global energy landscape, why nuclear power is gaining traction as the world looks for low-carbon solutions, and how uranium might play a critical role in fueling the next wave of technological innovation.

[00:00] Introduction.
[01:19] The challenges of investing in AI’s growth.
[02:06] Energy’s critical role in AI development.
[04:04] Uranium as a scalable and clean energy source.
[05:12] Guest introduction: Ben Feingold from Ocean Wall.
[06:46] Uranium market trends and driving factors.
[11:05] Public safety concerns and nuclear advancements.
[13:06] Overview of small modular nuclear reactors.
[16:14] Kazakhstan’s dominance in uranium production.
[20:48] Kazakhstan’s underutilized uranium resources.
[21:47] Projections for uranium market growth.
[24:10] Policy perspectives on nuclear energy.
[26:09] Investment considerations for uranium.
[27:50] About Ocean Wall’s investment services.
[30:02] Closing thoughts on uranium’s potential and energy needs.

485: Bitcoin’s Journey is Not Over Dec 15, 2024

Bitcoin has been making headlines again as it surged past the $100,000 mark. If you’ve been following this podcast, you’ll know I’ve been talking about Bitcoin since late 2016. Back then, its price hovered around $3,000 to $4,000, and that’s when I truly started to believe in its potential.

But what is Bitcoin, anyway? At its core, it’s a type of digital money that doesn’t rely on banks or governments. Instead, it’s powered by blockchain technology—a public ledger that securely and transparently records every Bitcoin transaction. This technology makes Bitcoin decentralized, meaning no single person or entity has control over it.

One of Bitcoin’s standout features is its fixed supply. Unlike traditional currencies, which governments can print more of at will, Bitcoin is capped at 21 million coins—ever. This built-in scarcity makes Bitcoin similar to gold, but even more predictable because we know exactly how much exists now and how much will exist in the future.

Right now, the total value of all Bitcoin—its market cap—is about $2 trillion. That might seem like a huge number, but it’s small compared to other assets. For example, gold’s total market value exceeds $12 trillion, and the U.S. stock market is worth around $50 trillion. Despite its rapid growth over the last decade, Bitcoin is still relatively small in the financial world.

Why does this matter? Bitcoin is still in the early stages of adoption. Large investors, corporations, and even governments are only beginning to see its value. As more people and institutions buy into Bitcoin, its price is likely to rise, thanks to its fixed supply and growing demand.

It’s not unrealistic to imagine Bitcoin’s market cap growing tenfold to $20 trillion over the next 5 to 7 years. While this might sound ambitious, consider that Wall Street has only started engaging with Bitcoin in the past year. Institutional exposure is almost certain to expand in the years ahead.

But it’s not just institutions. Surveys show that younger investors are more comfortable putting money into Bitcoin than in traditional markets. Think about the long-term implications of younger generations investing Bitcoin into their retirement accounts.

So why am I sharing this with you? Back in 2016, I encouraged listeners to take Bitcoin seriously. A handful of you did, buying and holding onto Bitcoin—and you’ve seen $50,000 grow into more than $1 million.

Do I think those kinds of returns are still possible? Not really. But I do see the potential for 10x growth in the not-too-distant future. If you’re thinking about long-term investments, it might be worth grabbing some Bitcoin and simply holding onto it for the next five years. It’s unlikely to make you as wealthy as early adopters, but it could be a strong way to grow wealth for a portion of your portfolio.

If Bitcoin is new to you, I encourage you to spend time learning about it. This week’s Wealth Formula Podcast is a great place to start.

[00:00] Introduction to Bitcoin and Joe Kelly’s Journey
[18:32] Bitcoin as Digital Gold: Current Perspectives
[24:31] Unchained: Securing Bitcoin Holdings
[30:45] The Cost of Security: Is It Worth It?
[36:26] The Future of Bitcoin Loans and Collateralization

484: Why More Americans Are Choosing to Move Abroad Dec 08, 2024

The idea of packing up and moving to another country might sound radical at first. But for many Americans, it’s becoming a logical next step. Whether it’s to stretch the power of the strong U.S. dollar, embrace a different lifestyle, or take advantage of financial perks like tax savings, the appeal of living abroad is growing.

Let’s start with the financial benefits. In countries like Mexico, Costa Rica, or Thailand, your money simply goes further. Retirees are finding they can afford things like beachfront living, high-quality healthcare, and even household help—all on a modest budget.

And with the U.S. dollar holding its strength, this isn’t just about living cheaply; it’s about living well. Panama, for example, doesn’t tax foreign income and offers retirees major discounts on everything from medical care to transportation. Portugal sweetens the deal with its Non-Habitual Residency program, which reduces or eliminates taxes on certain income for up to a decade.

But it’s not just about saving money—it’s also about living differently. Many Americans moving abroad talk about how the experience has opened their eyes to new cultures, new rhythms of life, and, most importantly, new possibilities. In Portugal, life feels slower and more intentional, with days that revolve around community, great food, and the natural beauty of the coastline. Thailand offers a mix of vibrant city life and serene island escapes, all at an affordable price.

Financial freedom and a cultural reset are big draws, but there’s more to the story. Some countries actively court expatriates with residency programs, tax incentives, and healthcare systems that are as good as, if not better than, what many Americans are used to. Add in the benefits of the Foreign Earned Income Exclusion, which allows Americans working abroad to exclude up to $120,000 in income from U.S. taxes, and the move becomes even more compelling.

If you’re looking for something even more unique, New Zealand might be a place to consider as well. Known for its stunning landscapes, safety, and high quality of life, it offers an appealing combination of natural beauty and modern convenience.

New Zealand consistently ranks as one of the happiest and safest countries in the world, with a healthcare system that rivals the best globally. Whether you’re considering retirement or just a major lifestyle shift, New Zealand is a place where you can truly start fresh.

This week on The Wealth Formula Podcast, we’re exploring New Zealand as a destination for Americans looking to make the leap abroad. I’ll be talking to an expert on what it takes to move there—from navigating visas to understanding the financial and cultural transition.

If you’ve ever thought about trading the familiar for the extraordinary, this conversation might just convince you to take the next step.

00:00 Introduction
09:19 Reasons for Migration to New Zealand
10:26 Living Conditions and Lifestyle in New Zealand
13:42 Real Estate and Cost of Living
14:28 Cultural Diversity in New Zealand
16:38 Healthcare and Professional Opportunities
18:10 Taxation System in New Zealand
19:42 Business Ownership and Taxation
21:42 Investment Opportunities and Capital Gains
24:14 Comparative Analysis with Other Countries
28:55 Cultural Comparison: New Zealand vs Australia
25:56 Property Ownership Regulations for Foreigners
26:48 Visa Options and Immigration Pathways
30:28 Conclusion and Contact Information

483: Finance and Market News 12/04/24 Dec 04, 2024

Buck and Zulfe discuss the unpredictable behavior of gold and Bitcoin, the importance of asset allocation, the psychological factors influencing investor behavior, the current market trends, and the Federal Reserve’s expectations regarding interest rates. They also explore various investment options, including high-yield bonds and municipal bonds, while addressing the implications of inflation and economic policies.

Giveaway: $2500 Full-Body MRI Dec 02, 2024

Hey Wealth Formula Nation,

I’ve got something really exciting for you today—a chance to win a full-body MRI worth $2,500!

This giveaway comes from my new podcast, Longevity Junky (that’s junky with a Y). It’s a fun, insightful show I co-host with actress Nikki Leigh, where we dive into cutting-edge advancements in health and longevity.

This week’s episode is all about full-body MRIs from Prenuvo, a groundbreaking technology that can identify over 500 conditions—including deadly cancers and brain aneurysms—before they pose a serious threat to your health.

Here’s how you can enter to win this $2,500 Prenuvo MRI scan for free:

Go to Apple Podcasts and find the Longevity Junky podcast (that’s “Junky” with a Y).
Leave a five-star review for the podcast.
Subscribe to the podcast.
Take a screenshot of your review.
Visit LongevityJunky.com (again, “Junky” with a Y).
Send the screenshot of your review along with a brief explanation of why you’d like a full-body MRI.

Winners will be announced in 2 weeks—stay tuned and good luck to everyone!

482: Tax Changes in the Trump Administration! Dec 01, 2024

I hope you had a great Thanksgiving! I am thankful for you and your support. I’ve been doing this podcast for over a decade, and I can’t tell you how much it means to me that you’ve supported my efforts through both good times and bad. That’s the nature of a show that has been around this long. In the world of investing, we have cycles. If you stick around long enough, you’ll see it all—and by now, we most certainly have.

When I started this podcast, it was just a few years after the mortgage meltdown of 2008. No one was excited about investing in real estate, but those of us who did really killed it. We had several years of a real estate bull market that ultimately culminated in the frothy COVID-era markets.

Then, as interest rates skyrocketed, we saw the bottom fall out. And now, it’s like 2012 again—the market is bottomed out. The smart money recognizes it and is moving in, but retail investors are scared and probably won’t join the party for a couple more years, when the market is already hot.

History doesn’t repeat itself, but it certainly rhymes. That’s why it’s important to take notes and try not to make the same mistakes again. In the spirit of that idea, I thought I’d make a short list of the lessons I’ve learned over the years. Hopefully, they will be useful. After all, the best way to learn is through mistakes—but they don’t have to be your mistakes.

1. Quit While You’re Ahead

No bull run lasts forever. If it looks like everyone is making money and it seems too easy, you might be in a market that’s at its peak—and it’s time to sell.

Back in 2008, there were stories of strippers buying multiple mansions and flipping them. Strippers are not typically known for having good credit. The subprime market was in full gear, and the market came crashing down soon after. In 2021–2022, everyone became a real estate syndicator, buying up hundreds of millions of dollars in real estate. Tertiary markets like Oklahoma City were hot. That only happens in frothy markets. If you see that happening again, stop buying and become a net seller.

2. Be Greedy When Others Are Fearful (Warren Buffett)

A good friend of mine was a celebrity home builder in LA before the 2008 financial crisis, making millions of dollars before the age of 40. He lost everything in 2008 but realized it was also a great buying opportunity. He saw hotels being sold at massive discounts.

He tried to raise money, but no one wanted to invest. Ultimately, he was able to scrape together enough money to start buying. That culminated in a $100 million sale for him last year. None of it would have happened if he hadn’t taken action when others wouldn’t.

3. There’s Always Something on Sale

Our built-in psychology makes it hard to be good investors. I’ll be the first to admit I’ve been a victim of my own instincts.

Since 2017, I’ve believed that Bitcoin will eventually become a sort of digital gold. I knew we’d see $100K Bitcoin when it was priced around $3K, and I truly believe we’ll see $500K Bitcoin by the end of this decade.

You’d think I would have accumulated Bitcoin every time it got slaughtered, right? Well, I did—but the “crypto winter” got me to capitulate. Rather than holding on to what I had while markets remained sluggish for a few years, I sold and invested in other things.

Now, I did make money on those other things, but not nearly as much as I would have by simply holding on to Bitcoin. Luckily, I bought my dad’s Bitcoin when he decided to make the same mistake. Sorry, Dad!

Right now, real estate is on sale. I don’t want to make the mistake of not buying.

4. Don’t Sell Bitcoin

As a corollary to the last rule, I will do everything I can to hold onto my Bitcoin, regardless of what happens to the market, until its market capitalization is on par with gold—that would be at a price of approximately $900K. At that point, I believe it will stabilize and behave like gold, which means I’ll sell.

5. There’s More to Life Than Real Estate and Cryptocurrency

I’ve made money in other ways when I’ve followed the aforementioned rules.

For example, a couple of years ago, the uranium market was beat up. I bought it because it was on sale. Right now, uranium is in the early stages of a bull market. The stock I owned went up 10x, so I sold.

Keep your eyes open for anything on sale, and when you buy, be patient. Eventually, markets turn, and selling into a frothy market feels great.

6. Don’t Let the Tax Wag the Dog

This is a nuanced rule I continue to struggle with. As a real estate professional, I find it very difficult to invest in things outside of real estate because of the massive tax benefits I receive.

But sometimes markets get frothy. Sometimes the price of Bitcoin or uranium—or any other asset on sale—is hard to beat.

While taxes are an important consideration, don’t let them be the only factor in your decision-making process. I have to constantly remind myself of this.

So there you have it—six very important lessons I’ve learned, and hopefully, they’ll benefit you too.

Now, speaking of not letting the tax wag the dog, this week’s episode of Wealth Formula Podcast is all about taxes—specifically, the likely changes under the Trump administration.

While we don’t want to let taxes always wag the dog, we also don’t want to be foolish. Knowing what’s likely in store on the tax front is critical to financial planning.

So make sure you listen in. There are some very critical issues addressed that you need to know about!

Buck

🎁 The Gift of Longevity – Black Friday & Cyber Monday Special! Nov 30, 2024

This Black Friday and Cyber Monday, I want to share something truly meaningful—the opportunity to invest in your health or the health of someone you love.

The Longevity Roadmap Course has already transformed lives, uncovering critical health issues and empowering participants to reverse conditions like borderline diabetes and optimize their health. It’s no exaggeration to say this course has already saved years of good-quality life.

This year, why not give the ultimate gift—the gift of health and time? Imagine helping a loved one discover a brighter, healthier future with a life-changing resource tailored to empower them for decades to come.

Black Friday & Cyber Monday Special: For a limited time, I’m offering 20% off the Longevity Roadmap Course, which includes three months of biweekly one-on-one coaching with me. This offer is good through Cyber Monday, so don’t wait—act now!

The tools, science, and coaching included in this course can:

Help prevent or reverse common conditions like heart disease and diabetes.
Unlock strategies to add years of vibrant, good-quality life.
Give peace of mind knowing you or your loved one is on the best path forward.

This isn’t just an investment in health—it’s an investment in time with the people who matter most.

Make this holiday season truly unforgettable by giving a gift that will last a lifetime—or longer.

Sign Up Now and Use the Coupon Code Blackfriday2024 at Checkout to Get 20% Off – Offer Ends Cyber Monday!

Here’s to a longer, healthier, and happier future—for you and your loved ones.

– Buck

P.S. Want to learn more? Book a call with me on longevityroadmap.com and let’s talk!

481: Finance and Market News 11/27/24 Nov 27, 2024

Buck Joffrey and Zulfi Ali tackle critical issues shaping the U.S. economic landscape, from the mounting government debt and entitlement challenges to the looming risks of a debt crisis. They examine the current state of U.S. debt, its global context, and the future of treasury auctions, emphasizing the unsustainable debt-to-GDP trajectory and the political hurdles in reforming entitlements.

The conversation also delves into the economic ripple effects of the Trump administration’s policies on inflation, growth, and the stock market, alongside the shifting dynamics of treasury yields. Buck and Zulfi explore the evolving cryptocurrency market, focusing on Solana and Bitcoin, and analyze the real estate market’s resilience in the face of fluctuating interest rates. Wrapping up, they discuss long-term investment strategies for navigating an inflationary environment, offering a comprehensive view of the challenges and opportunities ahead.

00:00 Introduction and Personal Updates

05:58 The Challenge of Entitlements

12:04 US Debt Position Compared to Other Countries

18:04 Potential Economic Implications of Debt

25:04 Market Reactions to Trump’s Administration

31:03 Cryptocurrency Insights and Market Psychology

36:38 Real Estate Market Outlook

480: Trump, DOGE, and the Economy Nov 24, 2024

I have to admit, I can’t wait to see what Elon Musk and Vivek Ramaswamy do with their proposed Department of Government Efficiency (DOGE).

Beyond potentially creating a big pump for Elon’s beloved crypto favorite, Doge Coin, the idea has generated significant discussion about its potential impact on the federal government.

As co-leaders of this initiative under President-elect Trump’s administration, Musk and Ramaswamy have outlined ambitious goals for reducing government spending and streamlining operations.

The DOGE aims to cut $500 billion in annual federal expenditures, targeting what they claim are unauthorized or inefficient programs. This represents a significant portion of discretionary spending and could have far-reaching implications for various agencies and programs.

One of the most controversial aspects of their plan is the proposed reduction of the federal workforce. DOGE intends to implement “mass head-count reductions across the federal bureaucracy”. Their strategies include:

Offering early retirement incentives and voluntary severance packages
Requiring federal employees to work in-office five days a week, potentially leading to voluntary resignations
Identifying the minimum number of employees required for agencies to perform essential functions

Musk and Ramaswamy also plan to focus on regulatory reform, aiming to eliminate what they consider unnecessary or overreaching regulations. They’ve suggested consolidating federal agencies and implementing advanced technologies to automate routine tasks.

However, the initiative faces significant challenge. Many proposed changes would require congressional approval. And while Republicans will control both chambers of congress, federal employee unions and lawmakers may oppose drastic cuts to government programs and workforce.

And while Musk has been perhaps one of the most efficient entrepreneurs in the history of mankind, the size and complexity of the federal government will make rapid, large-scale changes difficult to implement.

Either way, I’m excited to see whether Musk and Ramaswamy can translate their private sector experience into meaningful government reform.

My guest on Wealth Formula Podcast is an economist and Washington insider who has worked for multiple well known politicians. He has a unique take on Musk’s vision as well as the rest of the agenda of the incoming Trump administration.

This is a fascinating conversation which you will not want to miss!

479: Wake Up Real Estate Investors! And…a Few Hacks for Credit Card Miles Nov 17, 2024

It’s easy to see when a market is frothy—when prices seem unstoppable and everyone is piling in. But recognizing the bottom of a market? That’s harder. But it’s important to recognize because it’s at the bottom, not the top, where the greatest opportunities for profit lie.

Right now, we’re at one of those moments, and the need to act is critical if you want to successfully invest in real estate over the next few years.

As we enter 2025, the real estate market is at the cusp of a major shift. Other asset classes like stocks and bitcoin are already at all-time highs, but real estate remains attractively priced with enormous upside. This is the rare point in the cycle where investors who act decisively position themselves for exceptional returns.

The biggest players are already taking notice. BlackRock, the world’s largest asset manager, has declared that apartment buildings have reached the bottom of the cycle—an ideal entry point for savvy investors.

What contributes to this ideal entry point?

Valuations have bottomed out, creating opportunities for outsized returns.
Strong demographic trends are bolstering long-term demand.
Limited housing options add scarcity value to multifamily properties.
Economic fundamentals remain resilient.

But what amplifies this moment the most is declining interest rates. The Federal Reserve has already signaled cuts through 2025, and this creates a powerful tailwind for real estate investors.

Historically, investing in real estate during a descending rate environment has proven to be exceptionally lucrative. As rates decline cap rates contract.

This environment typically leads to increased demand for properties, driving up values and creating substantial wealth for early investors. Past cycles have shown that those who enter the market as rates begin to fall often experience the greatest appreciation in their investments over time.

The election of a pro-real estate president will also provide a significant boost to the real estate market. Policies favorable to real estate investment and development will lead to tax incentives, streamlined regulations, and increased government support for housing initiatives. Such policies will drive up property values and create new investment opportunities across various real estate sectors.

This is the start of a cycle that only comes around once every decade. Timing is everything, and the window to act is narrow. Those who move now stand to benefit from what could be one of the most lucrative real estate cycles in recent memory. Those who hesitate risk being left behind as the broader market catches up and prices rise.

Recognize where we are. This is the moment to take action and position yourself for what’s ahead.

Now that I got that off my chest, listen to this week’s Wealth Formula Podcast for a lighter theme—how to optimize your credit card miles and travel for free on business class.

Extreme Tax Saving Strategy for Business Owners! Nov 15, 2024

Imagine you own a thriving business or a successful practice, and every year, you’re writing large checks to insurance companies. You’re likely insuring against risks specific to your business—legal claims, property damage, cyber threats—but you’re paying premiums, crossing your fingers, and seeing little return.

What if there was a way to keep those insurance dollars within your control, save on taxes, and build real wealth over time?

Enter captive insurance.

With captive insurance, you create a company that insures the unique risks of your own business. It’s a strategy the big corporations and high-net-worth families have used for years, but it’s equally accessible to successful small business owners and physicians.

Here’s the secret sauce: instead of paying premiums to an external insurance provider, you pay them to your own captive insurance company. And those premiums are tax-deductible for your business!

Here’s where the magic happens: when claims are lower than the premiums collected (and that’s often the case with well-managed risks), your captive insurance company retains the profits. So rather than those premiums disappearing, they’re building up as assets in your own company.

Over time, these funds accumulate, potentially into the millions, creating a robust financial asset you control.

Now, there are compliance steps and guidelines, but with proper management, this setup can allow you to legally minimize taxes while effectively setting aside funds for your business’s future needs.

And as business owners, we know those future needs are constant—whether it’s reinvesting in the practice, planning for retirement, or covering unexpected costs.

If you want to learn more about this strategy, make sure to listen to today’s Wealth Formula Podcast episode.

478: Finance News of the Week 11/13/24 Nov 13, 2024

Buck and Zulfi dive into the implications of the recent election results, with a focus on the Trump presidency’s potential impact on financial markets, regulatory shifts, and economic policies. They analyze the ‘Trump trade,’ anticipated changes in regulations and tax policies, and the ripple effects on real estate, tariffs, and the broader economic landscape. Key topics include the roles of tariffs, immigration, and the Federal Reserve in inflation management, as well as insights on market trends in cryptocurrency and real estate—offering a roadmap for strategic investment in a changing economic climate.

477: What Pollsters Got Wrong, AI, and the Economy with Jim Rickards Nov 10, 2024

Kamala Harris’s big loss on Tuesday night caught almost everyone off guard. Despite widespread expectations that she’d be at least slightly ahead going into the election, the reality turned out starkly different: she got crushed.

In those critical battleground states—Pennsylvania, Wisconsin, Michigan, Arizona, Nevada—where many assumed she had an edge, Trump surged past expectations.

Just days before the election, the Des Moines Register poll, one of the most respected in political circles, had Harris leading by 3 points in Iowa. The New York Times and Siena College polling also showed her ahead in several battlegrounds, with Trump solidly up only in Georgia and Arizona. But these numbers were way off on election day.

Even in typically blue strongholds, the polling was off. In Maryland, where Democrats usually don’t even blink at the polls, Harris underperformed her polling average by over a percentage point, while her Republican opponent exceeded expectations by 4 points.

Even in New Jersey, another traditionally blue state, polls were wildly off the mark. Rutgers ran a poll in mid-October that missed Trump’s numbers by double digits, and even the most accurate polling underestimated the gap between the two candidates by six points.

But this isn’t the first time polls have missed the mark by such a wide margin. It happened in 2016, too, when pollsters underestimated the support for Trump because their traditional methods didn’t reach the “silent” Trump supporters—those less likely to take a survey call or respond to pollsters. The same trend seems to have repeated itself in 2024, raising the question: are polling methods outdated?

It’s clear that something needs to change and perhaps artificial intelligence may be the answer. Traditional polls rely on people actually picking up the phone and answering questions, but AI could do so much more.

By analyzing enormous amounts of data in real time—everything from shifts in demographics to social media sentiment—AI has the potential to capture a far more nuanced picture of voter sentiment.

This shift could mean fewer reliance on who answers a call and more focus on where people’s attitudes and thoughts are actually trending.

One guy who didn’t get it wrong in 2016 or in 2024 is my guest on Wealth Formula Podcast this week: Jim Richards. Jim has a unique perspective on why polls keep getting things wrong, even as voter behavior changes and political dynamics shift. On this week’s show, we discuss that as well as his new book on how artificial intelligence will affect the economy and national security.

It’s Not What You Say, But How You Say It Nov 08, 2024

Communication coach Donald Weber dives into the power of effective communication in leadership and personal interactions. He highlights the impact of nonverbal cues, voice dynamics, and gestures on delivering messages with clarity and influence. The conversation explores practical techniques for sharpening communication skills, engaging audiences, and overcoming common public speaking challenges.

476: Finance News of the Week 11/06/24 Nov 06, 2024

Buck and Zulfi discuss the current political climate on election day, the implications for the economy, and investment strategies. They explore the performance of gold and real estate as investment options, the impact of AI on market trends, and the significance of economic indicators such as inflation and unemployment rates. The discussion also touches on the potential for investment opportunities in a bull market, particularly in real estate and uranium stocks.

475: Gold – Physical vs ETFs and Related Issues Nov 03, 2024

When it comes to building wealth, I’m all about putting money into assets that work for you.

Gold has been performing great this year and it has got a certain allure – it’s stable, it’s shiny, and it’s stood the test of time as a “safe haven.”

But, to me, gold’s appeal has some limitations. It doesn’t generate income or adapt to a growing economy. It’s a static asset – just sitting there, relying on scarcity and market sentiment for value.

Compare that to cash-flowing real estate, which earns rental income, appreciates with time, and reinvests in itself. With real estate, your money is working as hard as you are, creating compounding value. Gold, by contrast, just… exists.

Gold shines during uncertainty, which is why people flock to it during market turmoil. But cash-flowing assets, like real estate, can also perform steadily if they’re managed properly. The issues that real estate runs into in rough times relate to the leverage, not to the real estate itself. So, perhaps part of your real estate portfolio should be unleveraged?

Physical gold is tangible and can feel reassuring – like you’re holding real wealth. But it requires secure storage and insurance, which are ongoing costs. Gold ETFs offer easier access and are cost-effective, but in a true crisis, a piece of paper representing gold isn’t as solid as the real thing. Both have their pros and cons, but neither produces income.

Investing in real estate doesn’t just store wealth; it creates it. You’re part of the economy by providing essential spaces and earning rental income, all while the property value grows.

Real estate adapts, reinvests, and compounds – which gold doesn’t. In short, real estate has the flexibility to evolve with the market, while gold’s value remains static.

Gold isn’t free to own either. Physical gold comes with storage fees, insurance, and sometimes appraisal costs. Real estate has maintenance costs too, but those are more than offset by rental income. With gold, you’re continuously paying without any return – it’s a net cost, not an asset that actively pays you back.

But… I will concede one thing… gold has been around a long time and will continue to be in the future. As a hedge against inflation it has withstood the test of time.

An ounce of gold once bought a Roman man a nice toga and pair of sandals and today it will buy you a very nice suit and pair of shoes.

And for that reason, you may still consider owning some gold. This week’s episode of Wealth Formula Podcast will give you some guidance on how to do that.

06:02 The Current State of Gold Prices

08:21 Physical Gold vs. ETFs: A Comparative Analysis

11:01 Understanding Counterparty Risk in Gold Investments

14:19 Tax Implications of Gold Investments

16:53 Best Practices for Storing Precious Metals

474: News of the Week 10/30/24 Oct 30, 2024

Buck and Zulfe discuss the implications of gold-backed bonds, the current economic outlook, the impact of the upcoming election on fiscal policies, and the trends in Bitcoin and the tech industry. They explore how these factors intertwine and influence market dynamics and the future of investments and economic strategies.

473: A Sound Money Bond? Oct 27, 2024

Gold bugs love to float the idea of bringing back the gold standard, tying the value of the U.S. dollar to a fixed amount of gold. On the surface, it might sound like a great way to return to “sound money.” But if you dig a little deeper, it’s full of problems that would likely take us backward rather than forward.

First, let’s talk about deflation, one of the scariest economic forces out there. Economist Richard Duncan and others warn that a gold standard would likely send us straight into a deflationary spiral.

Think of it this way: when prices drop, businesses make less money, wages fall, and people stop spending. It’s a vicious cycle that can turn a recession into a full-blown depression.

This is exactly what happened during the Great Depression, and a gold standard would lock us into this kind of problem again by tying the economy’s hands behind its back.

Then there’s the issue of economic growth. The modern economy moves fast—faster than gold supplies can keep up. By tying our money to gold, we’d basically put a chokehold on progress.

Businesses wouldn’t be able to invest or hire as easily because the money supply would be so tightly constrained. In short, we’d be stifling innovation and economic expansion just because there isn’t enough gold to go around.

The reality is that today’s economy is far more complex than it was back when the gold standard was in place. We’ve faced massive shocks like the 2008 financial crisis and the COVID-19 pandemic, and the government’s ability to respond quickly was critical.

The Federal Reserve was able to pump money into the economy when it was needed most. Under a gold standard, that would be impossible. We’d be stuck, watching recessions deepen with no way to cushion the blow.

And finally, the logistics of actually going back to a gold standard? Nearly impossible. The government would have to buy massive amounts of gold to back the current money supply, which would be chaotic and insanely expensive. It would be a transition full of confusion, and it could tank the economy in the process.

My guest on Wealth Formula Podcast this week advocates for a slightly different approach then a gold standard—a gold-collateralized bond. Her idea is to use the Federal Reserve’s gold reserves as collateral to allow the U.S. Treasury to borrow more cheaply.

She envisions it as a product for investors, similar to TIPS bonds (which protect against inflation). Even if you’re not a gold bug, this concept actually makes a lot of sense. It would give the Treasury access to low-cost borrowing while providing investors with a stable, gold-backed product—offering some of the benefits of gold without the downsides of a full gold standard. She’s written a book on the idea and shares it with us on this week’s show.

05:43 Introduction to Judy Shelton and Monetary Policy

11:43 The Concept of a Gold Standard

14:32 Proposing Gold-Backed Bonds

17:55 Investor and Government Benefits

20:44 The Role of Gold in Inflation Protection

23:40 International Monetary Reform and Trade

26:45 Criticism and Support

Your Health: The Missing Piece in Your Wealth Strategy Oct 25, 2024

Buck discusses the intersection of financial success and health, emphasizing the importance of longevity medicine. He introduces the concept of a proactive approach to health, advocating for education and empowerment in disease prevention. Buck also unveils his Longevity Roadmap course, designed to help individuals understand their health and prevent diseases, ultimately aiming to enhance their quality of life alongside their financial well-being.

472: News of the Week 10/23/24 Oct 23, 2024

Buck and Zulfe discuss the current state of the real estate market, economic indicators, and the Federal Reserve’s policies. They explore the implications of institutional investments in real estate, the potential for a soft landing in the economy, and the impact of global factors on commodities like gold and silver. The conversation also touches on the speculative nature of Bitcoin in the context of political developments.

00:07 Introduction and Current Events

03:37 Real Estate Market Insights

11:01 Economic Overview and Federal Reserve Policies

18:10 Market Reactions and Predictions

25:01 Global Economic Factors and Commodities

471: Catching Up on Real Estate Oct 20, 2024

We’re now in the 4th quarter, and our investor club will have one last chance to leverage a 60% bonus depreciation on multifamily properties this year. If you haven’t signed up for the investor club yet, be sure to do so, as I will be sending out information on this opportunity in the next few days.

While tax benefits are a major reason to invest in real estate, there are many other reasons to enter the market soon. After a period of uncertainty, I believe we’ve entered a growth phase in the real estate cycle, even if it isn’t obvious to everyone. The market is showing clear signs of recovery, making apartment building investments more attractive than they’ve been in over a decade.

Despite recent economic turbulence, the U.S. economy has held up better than expected. Inflation is cooling, growth is stabilizing, and real estate is benefiting. Big money is returning, lenders are easing back in, and the gears of the market are finally turning again. For those who’ve been on the sidelines, I truly believe now is the time to jump back in.

As always, the key to real estate is making smart buys in the right locations. While some areas are oversaturated, others are thriving with job growth and migration. Cities like Austin, Charlotte, and Phoenix, where tech and business sectors are booming, are absorbing new housing supply with ease. Demand for rentals in these high-growth cities remains incredibly strong, so vacancy isn’t a concern in the markets that matter.

Furthermore, multifamily properties have never been more attractive to institutional investors. People will always need housing, and with homeownership still expensive, rental demand continues to rise. Even with new units hitting the market, the long-term outlook is solid, driven by a nationwide housing shortage. As interest rates stabilize, transaction volumes are expected to increase, unlocking liquidity and driving prices up.

But remember, the best deals happen when you buy at the right time. You have to beat the froth. Prices are favorable now, but they won’t stay that way for long. We’re seeing a slowdown in new construction, with starts down 45% from pre-pandemic levels.

By 2026, fewer new properties will come to market, tightening supply and driving stronger rent growth and higher occupancy rates. Getting in now positions you perfectly for when the market heats up.

Look at cities like Phoenix, Dallas, and Tampa—economic vitality and population growth are fueling demand and supporting rent growth. Even major cities like New York and Los Angeles, which struggled during the pandemic, are bouncing back as people return to urban areas.

The opportunity is clear: markets with strong job growth and migration are primed for outperformance. If you identify these high-growth areas early, you could see significant returns as the market recovery gains momentum.

This is no longer just about surviving a tough period—it’s about thriving. By focusing on regions with booming economies, rising populations, and a persistent housing shortage, you’re setting yourself up to capitalize on the next wave of growth. The market is moving, and multifamily investments are where the smart money is. Those who act now will be the ones to come out on top.

That’s it for my take. This week’s guest on the Wealth Formula Podcast will share his thoughts on the topic as well. He’s a real estate economist and consultant who writes for U.S. News & World Report, so tune in to hear his expert perspective!

07:33 Introduction to Real Estate Trends

14:43 Current State of Single Family Homes

18:01 Multifamily Market Dynamics

21:09 Impact of Climate Change on Housing

24:09 Demographic Shifts and Migration Patterns

26:03 Election Policies and Real Estate

28:04 Technology’s Role in Real Estate

30:58 Changes in Real Estate Commissions

The Best ROI You Will Ever Get Oct 18, 2024

Buck reflects on the importance of memories over material possessions. He emphasizes that true wealth lies in the experiences we share with loved ones, which create lasting happiness and bonds. Through personal anecdotes, he illustrates how investing in memorable experiences, such as attending events with family, yields a tremendous return on investment in terms of emotional fulfillment and relationship building.

470: New of the Week 10/16/24 Oct 16, 2024

Buck and Zulfe explore different investment strategies, emphasizing the unique challenges high-income earners encounter in building wealth. They examine key economic indicators, focusing on inflation and jobless claims, while analyzing how markets are reacting to recent data. The conversation also covers the political landscape, considering its potential impact on the economy and the uncertainty surrounding upcoming elections and their effects on fiscal policies.

469: How the Wealthy Engineer Wealth Oct 13, 2024

This week’s podcast will feature a highly requested replay of the webinar hosted by Rod Zabrieski on a concept we call the Wealth Accelerator.

Now, you’ve probably heard Investment Advisors say there’s no value in permanent life insurance, often suggesting: “buy term and invest the difference.” But why do they say that? Is it really in your best interest?

Well, not necessarily. The money used for these types of policies typically comes out of investment portfolios—portfolios that pay advisors based on assets under management. So, there’s a built-in conflict of interest. It’s the same reason they often steer you away from alternative investments.

But here’s the truth: Permanent life insurance designed as Life Insurance Retirement Plans (LIRPs) can provide tax-free retirement income and estate planning strategies. These are tools the wealthy have used for years to engineer and grow their wealth.

Rod breaks down exactly how this works, and I think you’ll find it both insightful and empowering. If you’d rather watch the webinar or access the slides, head over to WealthFormulaBanking.com.

Now, one group that I believe can particularly benefit from the Wealth Accelerator is doctors—people who, during residency, watched their peers jump into the workforce while they were stuck, earning little or nothing.

I talk to these folks every day. They’re earning well now, but many feel like they’re behind because of those lost years. The Wealth Accelerator could be exactly what they need to level the playing field and regain a sense of financial security. Of course, this applies to anyone who got a later start financially.

You Are Never Too Old To Set Another Goal or To Dream a New Dream Oct 11, 2024

Drawing on personal experiences and psychological concepts, Buck encourages listeners to adopt a growth mindset and overcome mental and financial obstacles to achieve their aspirations. He emphasizes that age should not be a barrier to personal growth and transformation.

468: New of the Week 10/09/24 Oct 09, 2024

Buck and Zulfe discuss the ongoing challenges in the housing market, the implications of recent labor market data, and the current state of financial markets. They explore the historical context of housing shortages, the impact of regulatory hurdles, and the surprising strength of the labor market despite concerns about inflation. They also touch on investment strategies, including exposure to Bitcoin through ETFs, and the overall optimistic outlook for the stock market.

467: Dealing with the Housing Challenges Ahead Oct 06, 2024

You can disagree without being disagreeable—yeah right. Not these days!

We’re stuck in this tribal mentality, where it’s less about what you believe and more about toeing the line of your “team.” It’s as if we’ve traded rational, independent thought for this knee-jerk reaction of following whatever beliefs our group holds.

But here’s the thing: If we want to get back to having real, meaningful conversations, we’ve got to break out of this mindset.

Let me take you back to an example of what real debate used to look like: Gore Vidal and William F. Buckley Jr. These two guys were as far apart politically as you can get. Vidal was the quintessential liberal intellectual, and Buckley, the conservative firebrand.

Their debates in the late ‘60s were intense, and yeah, they got personal—at one point, Buckley called Vidal a “queer” on live television, and Vidal shot back with “crypto-Nazi.” Not exactly what we’d call polite conversation. But underneath all that heat, there was substance. They were engaging with real ideas. They weren’t just parroting talking points from their respective teams; they were thinking, challenging, and sharpening their viewpoints in the process.

Now, look at the political landscape today. It’s less about the exchange of ideas and more about shutting down the opposition. We’ve all seen it—whether it’s on Twitter, cable news, or even around the dinner table. People shout over each other, throw labels, and end up more entrenched in their beliefs than before. America is divided in a more violent way that it has been since the 1960s.

But it doesn’t have to be this way. Take a cue from Ronald Reagan and Tip O’Neill. These two were on opposite sides of just about everything. Reagan was the conservative icon, and O’Neill, the liberal Speaker of the House. They fought tooth and nail during the day over policy, but when the work was done, they’d grab a drink together.

They didn’t see each other as enemies. They saw each other as people who cared about the same things—just from different perspectives. Imagine that today! Even when they fiercely disagreed, they kept it about the issues, not about taking personal jabs or making it a win-lose situation.

The big takeaway from relationships like Reagan and O’Neill or Vidal and Buckley is this: They didn’t let their differences destroy their conversations—or their respect for one another. Somewhere along the way, we forgot how to do that. Today, it feels like the second someone hears an opinion that challenges their beliefs, they immediately go into attack mode. Why? Because we’re not listening to understand; we’re listening to respond.

When you actually listen to someone you disagree with, you’re not just doing them a favor—you’re doing yourself a favor. You’re growing. You’re sharpening your own beliefs. You’re gaining perspective. And believe me, this isn’t some fluffy feel-good idea—it’s a practical skill that will make you smarter, sharper, and more resilient in everything you do.

Look, I get it. It’s comfortable to stay in our echo chambers, where everyone agrees with us, and we don’t have to challenge our views. But that’s a fast track to intellectual stagnation. When you never engage with opposing viewpoints, you stop thinking for yourself. You end up just repeating what your group believes, instead of critically evaluating the ideas you hold.

So, how do we start having these real conversations again? It starts with a mindset shift. First, we need to drop the notion that every conversation is a battle to be won. It’s not. In fact, the minute you go into a discussion with the mindset of “winning,” you’ve already lost the opportunity to learn something.

Second, we need to be willing to ask ourselves hard questions. Am I holding this belief because I’ve thought it through? Or am I holding it because it’s what my tribe believes? There’s nothing wrong with questioning your own stance. In fact, it’s how you grow.

Let’s bring it back to basics: Independent thought. Listening to understand, not just respond. And most importantly, disagreeing without being disagreeable. If we can do this—if we can step away from the tribal mentality and start thinking for ourselves again—we’ll not only elevate the quality of our conversations, but we’ll also become better, more thoughtful people in the process.

Why do I bring this all up? Well, this week’s guest on Wealth Formula Podcast is a lot more liberal than me and, while I agreed with some of his ideas, others left me completely befuddled. But, rather then react violently, I did my best to try to learn his perspective as an expert on real estate policy and challenged him where I thought necessary.

09:50 What is the National Housing Conference?

12:21 Current Housing Market Challenges

15:49 The Impact of Rent Control and Price Fixing

22:01 First-Time Home Buyer Assistance Programs

28:24 Insurance Challenges in Real Estate

34:47 Strategies for Increasing Housing Supply

You Can Always Tell Someone to Go to Hell Tomorrow Oct 04, 2024

Buck discusses the importance of understanding our emotional responses, particularly the interplay between the amygdala and the prefrontal cortex in decision-making. Through various examples, including high-stakes situations and everyday interactions, Buck emphasizes the significance of self-regulation and the power of pausing before reacting. He offers practical advice on how to manage emotions effectively to foster better relationships and decision-making.

466: News of the Week 10/02/24 Oct 02, 2024

Buck and Zulfe discuss the critical importance of due diligence in investment, using the infamous Madoff scandal as a case study. They explore the challenges of detecting fraud, the role of auditors, and the relative safety of real estate investments. They also talk about current market trends, economic indicators, and the impact of geopolitical tensions on the financial landscape.

465: Due Diligence in Investing and Business Sep 29, 2024

Due diligence is certainly something you do when making a big investment or buying a business. But it’s actually something that should apply to all areas of life—whether you’re signing a contract at work, getting involved in a new relationship, or even deciding which dating app bio seems like it won’t end in a true-crime documentary.

In the business world, due diligence means doing your homework before diving into any deal. It’s checking the financials, understanding the risks, and making sure everything is legit before you sign on the dotted line. Just like you wouldn’t buy a car without checking under the hood (unless you enjoy random roadside adventures), you shouldn’t make decisions at work or in business without getting the full picture.

The same goes for your personal life. That new person you just met? It’s worth making sure their story adds up. And let’s be honest, these days, doing a bit of digital “due diligence” (a.k.a. light social media stalking) is part of dating etiquette.

That said, even the most thorough due diligence can sometimes fall short. Just look at Bernie Madoff. This guy had years of audited financials and still managed to scam investors out of billions. It wasn’t because people weren’t doing their due diligence, but because Madoff was a master manipulator who played the long con. He reminds us that no matter how careful you are, sometimes bad actors can slip through the cracks. All we can do is to know that we did our best.

In some cases, that might even involve hiring a third party to dive even deeper. In this week’s episode of Wealth Formula Podcast, we will talk to someone who does that for a living. She provides lots of pearls for you to apply in you everyday life.

05:00 Introduction to OSINT and Its Importance

08:05 Understanding Open Source Intelligence Gathering

11:09 The Role of OSINT in Business

13:54 Digital Vulnerability and Reputation Management

17:04 Red Flag Analysis for Investments

19:54 Cost-Effectiveness of Due Diligence

22:59 The Value of Background Investigations

26:01 Conclusion and Contact Information

Practical Tips for Maximizing Your Day Sep 27, 2024

Buck shares insights on how to focus on what truly matters, prioritize tasks, and implement strategies like time blocking and the two-minute rule to enhance productivity. Buck emphasizes the significance of a results-driven mindset and the need to eliminate distractions to achieve goals efficiently. He concludes with the idea that a proactive approach to time management can lead to greater success in both personal and professional endeavors.

464: News of the Week 09/25/24 Sep 25, 2024

Buck and Zulfe discuss the recent Federal Reserve rate cuts, their implications for the economy, and how markets are reacting. They explore the rationale behind the Fed’s decisions, the expected trajectory of interest rates, and the potential impact on various asset classes, including stocks, gold, and Bitcoin. The conversation also highlights investment opportunities arising from the current economic landscape, particularly for those looking to refinance or invest in distressed assets.

463: Everything You Need to Know about Asset Protection in 30 Minutes Sep 22, 2024

One of the rude awakenings I’ve had about the legal system in our country is that its not really about who is right or wrong. It’s about risk mitigation.

In my former life as a practicing surgeon, I saw this in the form of malpractice law suits. Experienced surgeons will tell you that if you have not had some complication during surgery in your career, you simply have not operated enough.

That’s why we have robust consent forms and processes making sure that patients are aware that complications are always possible and do occur.

I once had a complication in a procedure that was well known. In fact, the consent form specifically named this complication multiple times and even provided the incidence of this specific complication based on published studies.

Unfortunately, the patient decided to file a malpractice suit against me even though he recovered fine. Why not I guess? Lawyers will take up just about any case if there is a chance to make a buck.

I was appalled and thought for sure it would go away. But, as it turns out, my attorneys felt that it would be smart to have insurance settle the case rather than risk a bigger loss by going in front of a jury.

Since then, I have been in multiple business litigation matters. And again, its not about who’s right or wrong. It’s often about calculating how much it would cost to continue with lawyers rather then an evaluation of the merits of the case.

Bottom line is, its not about who’s right or wrong. It’s about who’s got the money and who’s willing to spend it.

That’s why the best defense against frivolous lawsuits is to turn yourself into a really ugly target. You want lawyers to look at you and realize that trying to get money from you is just not worth their time.

And that, my friends, is the basis of asset protection. Sounds cynical I know. But that is the truth. So how do you turn yourself into a skunk that no one wants to get near?

That’s what this week’s show is all about. Doug Lodmell, my friend and asset protection attorney will tell you everything you need to know about asset protection in 30 minutes.

06:25 Introduction to Asset Protection

08:32 Understanding the Basics of Asset Protection

12:18 The Importance of LLCs in Asset Protection

16:25 Creating a Holding Company for Investments

20:11 Advanced Asset Protection Strategies

24:34 The Role of Asset Protection Trusts

28:16 Navigating Legal Challenges and Criminal Considerations

32:28 The Bridge Trust: A Hybrid Solution

Get a free consultation with Doug Lodmell:

www.lodmell.com

Can we see mental illness on brain scans? Sep 20, 2024

In this episode of Longevity Junky, Buck and Nikki sit down with renowned psychiatrist and brain disorder specialist, Dr. Daniel Amen, founder of Amen Clinics, to discuss groundbreaking brain imaging techniques like SPECT scans. Dr. Amen shares insights on diagnosing mental health issues through brain mapping and the role of brain health in overall longevity.

Dr. Daniel Amen’s Free Brain Assessment:
https://brainhealthassessment.com/assessment

Full episode in video available on YouTube:
https://www.youtube.com/watch?v=jR0nhSfuZRQ

Questions? Send us a message at:
www.longevityjunky.com

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462: News of the Week 09/11/24 Sep 18, 2024

Buck and Zulfi discuss central bank digital currencies, the role of banks, Bitcoin’s volatility and market dynamics, and the economic conditions influenced by the Federal Reserve. They explore the implications of these factors on investment strategies and the importance of understanding economic cycles for making informed investment decisions.

461: Bitcoin and Central Bank Digital Currencies Sep 15, 2024

In 2014, like most people, I was skeptical and largely uninformed about Bitcoin. At the time, it seemed like a quirky internet fad, reminiscent of the infamous Dutch tulip mania from the 17th century—something bound to disappear as quickly as it had come.

Unfortunately, I was listening to the likes of Peter Schiff at the time who convinced me that bitcoin was just a speculative bubble, a digital Ponzi scheme waiting to implode. So, I didn’t question it. I dismissed Bitcoin, just like most people did.

By 2016, however, I decided to take a deeper dive. What I found captivated me. Bitcoin isn’t just a speculative investment; it is a revolutionary form of money, designed to withstand the economic pressures that have eroded every fiat currency in history.

In 2018 Saifedean Ammous published The Bitcoin Standard where he argued for the importance of sound money. History is littered with examples of societies that debased their currency and paid the price for it. From the fall of the Roman Empire to the collapse of the Weimar Republic, excessive money printing always leads to inflation, erosion of wealth, and ultimately, economic ruin.

Bitcoin solves this problem with a hard cap of 21 million coins. It’s decentralized and cannot be manipulated by governments or central banks. In a world where the Federal Reserve can print trillions of dollars overnight, Bitcoin’s scarcity and resistance to inflation are revolutionary.

Ammous makes it clear that Bitcoin, much like gold in centuries past, is a form of “hard money” that can store value over the long term, immune from the whims of political agendas.

Unlike gold, though, Bitcoin is more efficient. It’s easily divisible, transferable across borders, and secured by an immutable blockchain. No middlemen, no gatekeepers, just a decentralized network verifying and recording every transaction. This creates an incorruptible store of value, something that’s sorely needed in today’s financial system.

Back in 2017, Bitcoin exploded from under $1,000 to nearly $20,000 in just 12 months. Some called it a bubble, but I saw it differently. The institutional adoption was beginning. Fast forward to today, and Bitcoin isn’t just a fringe asset—it’s gaining legitimacy among the world’s biggest financial players.

Names like BlackRock, Fidelity, and Grayscale have built massive infrastructure around Bitcoin. BlackRock, with nearly $10 trillion under management, launched a Bitcoin ETF. And when Larry Fink, the CEO of BlackRock, begins referring to Bitcoin as “digital gold,” you know the asset has reached a new level of mainstream credibility. It’s a reflection of Bitcoin’s maturation as an asset class.

Even on the political front, Bitcoin is making waves. Figures like Donald Trump and Robert Kennedy Jr. have publicly stated their intent to hold Bitcoin as part of treasury reserves.

At the same time, demand for Bitcoin is rising. Millennials and Gen Z increasingly see Bitcoin as a more reliable store of value than traditional investments like stocks or bonds.

A recent survey found that nearly 50% of Millennials trust cryptocurrency more than they trust the stock market. As these generations accumulate more wealth, their preference for Bitcoin will only accelerate, driving demand higher.

And with Bitcoin’s supply fixed, the inevitable consequence is upward price pressure. When I first started seriously looking at Bitcoin in 2016, it was trading between $600 and $700. Today, Bitcoin hovers between $50,000 and $60,000. That’s an astonishing 80x return.

If someone had invested $100,000 in Bitcoin back then, they’d be sitting on $8 million today. These numbers aren’t just hypothetical—they’re a real testament to Bitcoin’s growth and future potential.

A common critique of Bitcoin is its volatility. There’s no denying that Bitcoin has seen wild price swings, such as the rapid ascent to $69,000 in 2021 followed by a steep correction. But here’s the crucial point: volatility is not necessarily a bad thing. In fact, in Bitcoin’s case, it’s an opportunity.

As Ammous explains in The Bitcoin Standard, volatility is an expected feature of any emerging asset class. Bitcoin is still in its price discovery phase. As adoption increases and market capitalization grows, the volatility will decrease, much like what we’ve seen with gold.

Right now, Bitcoin’s volatility provides an entry point for those looking to benefit from its long-term trajectory. In a few years, when Bitcoin reaches the market cap of gold—currently around $12 trillion—it will likely stabilize, and the wild price fluctuations we see today will diminish.

So, while volatility may scare off some investors, for those who believe in Bitcoin’s long-term potential, it’s a gift. It creates buying opportunities in a market that is steadily trending upward over time.

If I had to choose one asset to double in value over the next two to three years, it would undoubtedly be Bitcoin. It is arguably the hardest form of money humanity has ever seen, and as more people recognize this, demand will continue to rise. With a fixed supply, the laws of economics make it clear: Bitcoin’s price must go up.

So why am I talking about Bitcoin? Well, this week’s podcast is about central bank digital currencies (CBDC). Without Bitcoin, there would be no talk of CBDC. The topic itself, however, is quite different as it relates not to the freedom offered by the Bitcoin concept but rather the potential issues around your privacy and the role of the banks.

It’s a fascinating conversation and I highly encourage you to check out the show.

11:49 Introduction to David Skeie and CBDCs

12:52 The Concept of CBDCs and the Digital Pound

15:54 The Purpose of CBDCs and the Concerns

21:38 The Technology and Implementation of CBDCs

23:52 Privacy Concerns with CBDCs

28:14 The Relationship Between CBDCs and Cryptocurrencies

31:59 The Role of Technology in CBDCs

34:07 The Interplay Between CBDCs and Bitcoin

38:04 The Future of CBDCs and Digital Currencies

Has the first person to live to 500 already been born? Sep 13, 2024

Buck introduces his brand new health and longevity podcast, Longevity Junky.

Longevity Junky is a compelling and accessible new podcast that works for all longevity enthusiasts, whether you’re a hardened scholar who craves detailed science or a relative newcomer to this fascinating and quickly evolving world.

Dr. Buck Joffrey, MD, is a former neurosurgeon, successful entrepreneur, and self-described health-conscious hedonist.

Nikki Leigh is a jet-setting actress influencer with 6M followers and is the OG Longevity Junky.

They’re good friends and willing guinea pigs for all longevity-related experiments.

From hallucinogens to full body MRIs, micro-dosing Cialis to tech, exercise, and diet to mindfulness, they’re on a voyage of discovery, meeting the best experts in each space, learning and sharing their experiences, and giving listeners actionable tips on how to live a longer, happier life.

460: News of the Week 09/11/24 Sep 11, 2024

Buck and Zulfe discuss the concept of sovereign wealth funds and their purpose, particularly in countries heavily reliant on a single source of revenue, such as oil.

They also explore the idea of the United States establishing its own sovereign wealth fund and the potential challenges and drawbacks associated with it.

The conversation touches on inflation, globalization, the role of the private sector in investment, and the government’s use of tax incentives to drive investment.

Buck and Zulfe also talk about the recent decline in the stock market, the softening job market, the upcoming Federal Reserve meeting and the possibility of a rate cut.

They touch on the performance of gold and its role as an inflation hedge, as well as the volatility of Bitcoin and its potential as an investment.

459: Richard Duncan on What Austrian Economists are Afraid to Tell You Sep 08, 2024

Today, we’re diving into a topic that’s sure to ruffle some feathers, particularly if you’re a fan of Austrian economics.

Look, I get it. Austrian economists have an appealing story. It’s neat, it’s clean. You save money, you balance budgets, and the free market solves everything. It’s almost comforting, in a nostalgic way, like when your grandparents tell you how they walked uphill both ways to school.

But while simple and neat, it just doesn’t reflect the reality we live in today? It’s like using a paper map in the age of GPS—sure, it worked back then, but today, we’re navigating a completely different landscape.

In 2008, Lehman Brothers collapsed and the markets were in freefall. It felt like the entire financial system was about to implode. Now, according to Austrian economics, we should’ve let the whole thing crash and burn.

They argue that economic downturns are necessary to “cleanse” the system, allowing inefficient businesses to fail and making way for more robust ones.

They argue that the economy should function like a forest fire, clearing out the old and dead so new growth can emerge. But what if that fire had spread to every corner of the world economy and left nothing but ashes?

Here’s the thing: in 2008, the world didn’t allow the fire to spread. The central banks, particularly the Federal Reserve, stepped in with unprecedented measures—quantitative easing, zero interest rates, massive injections of liquidity.

Essentially, they flooded the economy with money to stop the bleeding. If you ask an Austrian economist, this is akin to sinning against the laws of nature. But here’s the kicker: it worked. The world didn’t plunge into a Great Depression, and we’re all still here today because of those “unnatural” interventions.

Fast forward to the COVID-19 pandemic. Governments around the world shut down economies, businesses shuttered, and millions of people were suddenly out of work. Once again, the central banks and governments unleashed trillions of dollars in stimulus to keep things afloat. According to Austrian economics, this was another sin—a violation of the sacred tenets of free markets. But what was the alternative? A global economic collapse?

Now, don’t get me wrong—printing money and keeping interest rates low indefinitely isn’t a free lunch. It comes with consequences, like inflation, which we have certainly felt over the past two years. But the point is, we live in a world where pure economic theories rarely align with reality.

The global economy is far too interconnected, too complex, and too fragile to leave it to the “invisible hand” without intervention. Sometimes, we need a heavy hand to guide the way, and Austrian economists often seem to be living in a world where that hand doesn’t exist.

Believe me, I do believe we need to a lot better when it comes to being fiscally responsible and not racking of huge amounts of debt. But the idea that Austrian economics can solve the issues of our day is just a fairytale.

And I know those of you who are followers of Peter Schiff are going to send me hate mail so I might as well turn over my rant to economist Richard Duncan, which we will do right after these messages.

Richard feels strongly about these topics so this is less of an interview than it is a lecture. Hope you enjoy it!

08:03 What is an Austrain Economist?

14:04 Back to the Gold Standard?

23:04 What’s Going On in the Economy Today?

30:35 U.S. Economy in the Next Few Years

Introduction to Stoicism Sep 06, 2024

Buck discusses the concept of stoicism and its application in modern life. Stoicism is a timeless philosophy that teaches us to master our emotions, focus on what matters, and thrive in the chaos of modern life. The key idea in stoicism is that we have power over our minds, not outside events. We can control our actions, thoughts, and responses, but we cannot control external circumstances. Stoicism teaches us to focus our energy on what we can control and let go of everything else. It also emphasizes the importance of perceiving events in a way that empowers us and leads to growth. The Stoics believed in living in accordance with virtue, which includes wisdom, courage, justice, and discipline. They also emphasized the concept of memento mori, reminding us of our mortality and the importance of living with purpose and urgency.

458: What You Need to Know about Artificial Intelligence Sep 01, 2024

In the fast-paced world of technology, missing out can be costly. History shows that those who fail to adapt often face devastating consequences, while those who stay ahead can seize game-changing opportunities. This is a lesson every investor should take to heart.

Take Kodak and Blockbuster, for example—both giants in their industries, but both brought down by their reluctance to embrace technological change. Kodak, despite pioneering digital camera technology in the 1970s, clung to its profitable film business. By the time the company acknowledged the digital shift, it was too late; Kodak declared bankruptcy in 2012. Blockbuster, meanwhile, dominated video rentals in the early 2000s but failed to foresee the rise of digital streaming. Netflix, then a fledgling company, offered to partner with Blockbuster, but the offer was declined. As streaming gained momentum, Blockbuster’s physical stores became irrelevant, leading to its bankruptcy in 2010.

These stories offer a clear lesson: technology waits for no one. Investors who cling to the past will be left behind.

Another missed opportunity came with the rise of decentralized technology, particularly Bitcoin. When Bitcoin emerged in 2009, many dismissed it as a fad or speculative bubble, failing to grasp its potential as a decentralized currency and store of value. Early investors in Bitcoin saw massive returns, while those who hesitated missed out on one of the most transformative financial opportunities of the decade.

Today, artificial intelligence (AI) stands as the next frontier of innovation. Like digital film, blockchain, and personal computing before it, AI is poised to reshape industries, create new markets, and redefine how we live and work. Companies like Nvidia, which has positioned itself as a leader in AI through its advancements in GPUs and AI-driven software, showcase the potential rewards of early investment in this space.

Nvidia’s success underscores the importance of recognizing and investing in emerging technologies before they go mainstream. Investors who saw the potential in Nvidia’s AI capabilities years ago have enjoyed extraordinary returns. But the AI space is still in its early stages, presenting opportunities for those who are forward-thinking.

The message is clear: staying informed and adapting to technological advancements is crucial for investors. In a world where innovation drives market growth, keeping up with technology isn’t just smart—it’s essential. Those who fail to recognize and act on new technologies risk being left behind, while those who embrace change will have the chance to shape the future.

As AI continues to evolve, it’s vital for investors to stay vigilant and ready to act. The next big opportunity could be just around the corner, and the key is to be prepared to seize it. This weeks episode of Wealth Formula podcast will help you understand the role of artificial intelligence in the coming years.

Gratitudes from a Retinal Tear Aug 30, 2024

Buck shares his experience with a retinal tear and detachment and how it reinforced the importance of gratitude and perspective. He discusses the psychological benefits of gratitude, including improved mental health, enhanced resilience, and stronger relationships. Buck suggests practices such as gratitude journaling, mindful appreciation, expressing thanks, and reframing challenges to cultivate gratitude. He emphasizes the power of gratitude in shaping our mental and emotional well-being and overall life satisfaction.

457: News of the Week 08/28/24 Aug 28, 2024

Buck and Zulfe Ali discuss various topics including the shift from a W-2 mindset to an entrepreneurial mindset, the current state of the economy, and the performance of different asset classes. They also touch on the upcoming Fed rate cuts, the revision of jobs data, and the rise of gold and Bitcoin.

456: The Illusion of Job Security and the Power of Financial Diversification Aug 25, 2024

Most people think that having a job is the safest way to secure their financial future. They wake up every day, punch the clock, and assume that as long as they keep doing their job, they’re safe. But let me tell you something to wake you up a bit: A job isn’t as safe as it seems. In fact, it can be one of the most dangerous financial positions you can be in.

When you work for someone else, you’re living in a bubble. You get your paycheck every two weeks, you have your benefits, and you think, “I’m set.” But what you don’t see is what’s happening behind the scenes—the financial health of the company, the decision-making process in the boardroom, the market pressures that might be squeezing your employer’s margins. You don’t see the icebergs until it’s too late.

Your employer’s financial struggles are hidden from you. The first time you might realize your company is in trouble is when you’re handed a pink slip. And then what? You’re left scrambling, wondering what went wrong, and suddenly that “safe” job doesn’t seem so safe anymore.

This isn’t about quitting your job tomorrow. This is about realizing that your job should be just one part of your financial portfolio. You see, the truly wealthy don’t rely on just one source of income. They understand the power of diversification. They understand that putting all your eggs in one basket is a recipe for disaster.

Think of it this way: If you lose your job, and it’s your only source of income, you’re in a vulnerable position. But if you have multiple streams of income—whether it’s from side gigs, investments in real estate, or even owning a small business—you have a safety net. You have options. And that’s what true financial security is all about—having options. Going outside of the comfort zone of your job is not risky. Not doing so is the bigger risk.

I want you to start thinking of yourself as the CEO of your own life. Just like a company needs to diversify its revenue streams, manage its risks, and always be aware of its financial health, so do you. You need to treat your finances like a business.

What does that mean? It means you need to mitigate your risks. Don’t rely on one source of income. Constantly be aware of the “icebergs” that could derail you. Are you too dependent on your job? Are you prepared for an economic downturn? Are you aware of the blind spots in your financial planning?

Blind spots. We all have them. But the key is to identify them before they become problems. In your financial life, a blind spot could be an over-reliance on a single income source. It could be a lack of emergency savings. It could be not investing in assets that grow over time.

The good news is, once you’re aware of your blind spots, you can do something about them. You can start diversifying your income, investing in cash-flowing assets and build a financial plan that’s robust and resilient.

Now, let’s talk about how to actually do this. How do you diversify your income streams? Here are a few strategies that can get you started.

First, side gigs. Start small. Maybe it’s freelancing, consulting, or even an online business. The key is to start generating income outside of your job. At one point in my life, Wealth Formula was a hobby. It is now my primary business.

Second, consider business acquisition or franchises. This can be a great way to create an additional income stream that’s independent of your job.

Finally, investing in cash-flowing assets. Real estate is one of my favorites. VRBO’s are a particularly good option for W2 wage earners because you can literally use depreciation to offset your W2 income if you follow the rules set forth by the IRS. But whatever you choose, the goal is to have multiple streams of income that aren’t tied to your day job.

Financial freedom isn’t about having a high-paying job. It’s about having control over your financial future. It’s about having options. It’s about not being at the mercy of your employer’s decisions.

Remember, your job is just one part of your financial portfolio. Don’t let it be the only part. Start thinking like a business owner, diversify your income, and protect yourself from the icebergs that you can’t see. That’s the real path to financial security and freedom.

My guest this week on Wealth Formula Podcast has a similar philosophy and serves as a good reminder of what’s at stake.

10:09 Warnings of the Current Geopolitical Climate

13:58 Lessons from the IRS

16:02 Combating the Golden Handcuffs

17:56 Side Hustles for Security

25:20 The Cashflow Quadrant

30:15 Tax Implications of the Election

The Science of Habit Formation Aug 23, 2024

Buck discusses the science of habit formation, specifically focusing on exercise. He explains the habit loop, which consists of a cue, routine, and payoff, and how habits are engineered through repetition and reward. Buck emphasizes the role of dopamine in motivating and craving habits and highlights the importance of consistency and creating a consistent environment. He provides practical tips for creating the habit of exercise, such as starting small, stacking habits, making it fun, leveraging social support, setting goals, tracking progress, and preparing for setbacks.

455: The Wealth Accelerator Aug 21, 2024

Rod Zabriskie joins the show to discuss the Wealth Accelerator program, which aims to help individuals amplify their returns and accelerate their wealth accumulation. The program involves leveraging life insurance policies to build cash value and generate tax-free income in retirement. The program has been stress-tested against different market conditions and has shown promising results.

454: Covid Supply Chain Issues Should Not Have Been a Surprise Aug 18, 2024

The COVID-19 pandemic did more than just highlight the vulnerabilities in the global supply chain—it exposed systemic issues that had been brewing for years.

As the world grappled with unprecedented shortages in everything from medical supplies to consum er goods, it became clear that these vulnerabilities were not merely accidental; they were the byproduct of a supply chain increasingly dominated by monopoly power and engineered for efficiency rather than resilience.

For decades, large corporations have concentrated power within the supply chain, pushing the limits of just-in-time manufacturing and lean inventories. These practices, while profitable in stable times, left the global economy teetering on the edge of collapse when the pandemic struck.

The overreliance on a few key players in critical sectors created a precarious situation where any disruption—whether due to natural disaster, geopolitical tensions, or a global health crisis—could send shockwaves through the entire system.

Small businesses, the backbone of local economies, were hit the hardest. Unlike big corporations with vast resources and the ability to weather the storm, these smaller enterprises faced insurmountable challenges. They struggled to compete for scarce supplies, and many were forced to close their doors permanently. The lack of competition in the supply chain only exacerbated these issues, driving up prices and limiting consumer choice.

Yet, while small businesses suffered, big corporations found ways to profit from the chaos. The shortages allowed them to increase prices and consolidate their market positions further. The very vulnerabilities that crippled smaller players became opportunities for the giants to tighten their grip on the market.

My guest on Wealth Formula Podcast this week describes this fascinating confluence of events leading to what we experienced during the pandememic and warns that big business greed has not allowed us to protect ourselves against these vulnerabilities in the future.

06:00 Was the Breaking of the Supply Chain During COVID Intentional?

08:42 Have Things Changed Since?

13:43 Small Companies Are Hurting

18:57 Who Can Change This?

24:08 Implications of the Presidential Election

Finding Joy in Adversity Aug 16, 2024

In this episode, Buck discusses the transient nature of problems and how to gain a fresh perspective on them. He emphasizes that problems are temporary and that understanding this can bring peace and empowerment. Buck suggests reframing problems as temporary challenges and focusing on solutions rather than dwelling on negative emotions. He also offers practical tips on letting go of emotional weight and immersing oneself in the present moment.

453: News of the Week 08/14/24 Aug 14, 2024

In this Episode, Buck and Zulfi discuss various topics related to the financial market and investment strategies. They touch on the yen carry trade, the impact of the unemployment report on the market, and the potential for a recession. They also discuss the Consumer Price Index (CPI) and its impact on inflation, as well as the SOM rule as an indicator of a potential recession. The conversation then shifts to a discussion on zero-cost premium financing as an estate planning strategy for high net worth individuals. Ryan Haley and Jonathan Wield join the conversation to provide more details on this strategy and its benefits.

452: Urgent Information for Real Estate Investors! Aug 12, 2024

Real estate investors need to be paying attention. Campbell Harvey, a previous guest on Wealth Formula Podcast (episode 423) and a leading economist who first described the predictive value of the “inverted yield curve” posted on LinkedIn:

“It has begun. Over the last year, I have made the strongest possible case for the Fed to be proactive. Rates should have been cut this week – indeed, the rates should have been cut in January.

We have seen this movie before. The Fed was very late to take inflation seriously in 2021. They brushed it off as “transitory”. However, it seemed obvious that inflation was surging. Real-time shelter inflation was increasing at a double-digit rate. Shelter has the largest weight in the CPI. Shelter operates with a lag. Hence, it was easy to forecast the surge. The Fed was forced to react after the damage was done.

The same mistake has been repeated – despite many warnings. The recent CPI print was 3% year-over-year (YOY). Nearly two-thirds of this print was driven by one component – shelter. Shelter inflation is reported at 5.2% YOY. This number is far from reality. For example, Apartmentlist.com rents are running -0.8% YOY – a full 6% below the official CPI number. Suppose we believe the real-time shelter inflation is 2%, not 5.2%. This means the real-time CPI would be 1.8%. If you believe shelter is 3%, then real-time CPI would be 2.2%. These numbers are well within the Fed’s target.

The Fed prides itself on making data-driven decisions. However, it is unwise to make decisions based on stale data. Shelter inflation happened in the past. Keeping rates high will not impact what happened last year.

It is always best to look at forward-looking indicators for policy decisions.

· My yield curve indicator has been inverted for 20 months. It is 8 of 8 with no false signals since the 1960s. The maximum historic lead time has been 23 months (before the great recession). Ignore it at your own risk.

· The Sahm Rule has been triggered. This indicator is not necessarily predictive because employment moves with the business cycle – but it is useful in telling us whether we are in a recession or not. We know that hiring has slowed and unemployment has risen – though the absolute rate is still relatively low.

· Retail sales are highly correlated with personal consumption expenditures. Retail Sales are flat. Many do not realize that Retail Sales are not inflation-adjusted. Taking inflation into account recent sales growth as well as YOY sales are negative.

· There is considerable evidence that COVID-era savings have been drawn down. A recent release from the Philadelphia Fed carried the headline: “Share of Delinquent Credit Card Balances Reaches Series High”. (The same report shows an alarming plunge in mortgage originations.) People are paying 20%+ interest on a card because their savings have run out. Indeed, if people are cutting back on fast-food expenditures, you know this is serious. Drawing down the savings has fueled consumption expenditures over the past two years. That source of growth has ended.

Now the Fed will have to play catch-up and cut by at least 50bp in September.

Any recession is a self-inflicted wound.”

For real estate investors, this scenario presents a compelling call to action.

The Secured Overnight Financing Rate (SOFR), a benchmark rate used in many adjustable-rate mortgages, is intrinsically linked to the federal funds rate. As Harvey predicts imminent rate cuts by the Fed, we’re likely to see a corresponding decrease in SOFR. This creates a unique window of opportunity in apartment buildings where debt is linked to SOFR.

Consider this: if a real estate investment makes financial sense in today’s high-interest environment, imagine its potential in a future with lower rates. As the Fed lowers rates, we can expect to see reduced borrowing costs for adjustable-rate mortgages tied to SOFR. Moreover, declining interest rates typically lead to increased asset values, including real estate.

This situation bears a striking resemblance to periods preceding previous rate-cutting cycles. Historically, those who moved early in such environments often reaped significant rewards. The current climate offers a similar opportunity for forward-thinking investors.

In essence, we’re looking at a scenario where those who act now, while rates are still high, stand to benefit twice over. First, from the immediate cash flow if the investment numbers work in the current environment. Second, from the potential future appreciation as rates decline and property values rise.

It’s worth emphasizing that this is a rare confluence of circumstances. The Fed rate is all but guaranteed to decrease in the coming months, and with it, SOFR will likely follow suit. This means that investors who enter the market now are positioning themselves at the starting line of what could be a significant upswing in real estate values.

Harvey’s insights suggest that as rates decrease, we might see a surge in housing inventory as the “prisoner’s dilemma” resolves. This could lead to a more balanced market, but also potentially higher competition for prime properties. By acting now, investors can get ahead of this curve.

Of course, as with any investment decision, thorough due diligence and careful consideration of individual financial circumstances are paramount. However, for those with the means and the foresight, the current real estate market presents an opportunity that doesn’t come along often.

In conclusion, while the high interest rates of today might give some pause, they also create a unique entry point for savvy investors. As we stand on the cusp of what appears to be an impending rate-cutting cycle, the potential for profit from real estate acquisitions made now is substantial. This truly is a very unique window in time – one that astute investors would be wise not to let slip by. The housing market’s current dynamics, as illuminated by Harvey’s analysis, only serve to underscore the potential of this moment.

So for those of you who have not yet joined our accredited investor club, you should consider doing so now. For those of you who are already members, make sure to take a look at the current offering which meets all the criteria above.

Speaking of inflation and interest rates, this week’s episode of Wealth Formula podcast features a guest who says that inflation actually shapes democracy.

09:50 Thoughts on Inflation

12:24 Shock Values: Prices and Inflation in American Democracy

16:01 Historical Control of Prices by the US Government

17:51 The Impact of Price Controls on the Economy

20:08 Rent Control and its Effects

23:12 How Independent is the Fed?

25:26 Inflation’s Effect on Government Debt

Harnessing the Pain-Pleasure Principle for Motivation Aug 09, 2024

Buck takes a detour from his usual topics to dive into self-help, focusing on the “pain-pleasure principle” as a key driver of human behavior. He explores how our actions are often motivated by the desire to avoid pain or seek pleasure and shares practical strategies for rewiring these associations to break bad habits and adopt positive ones.

451: New of the Week 08/07/24 Aug 07, 2024

Buck and Zulfe discuss various topics including the concept of hypernomics, the recent market volatility, the impact of Fed rate cuts on SOFR and the 10-year treasury, and the potential opportunities in real estate investing.

Takeaways

Despite market uncertainty, there are opportunities for investors, especially in real estate.
The correlation between Fed rate cuts, SOFR, and the 10-year treasury is important for understanding mortgage rates and real estate acquisitions.
Declining interest rates can lead to cap rate compression and increased asset values in real estate.
There is a potential for increased liquidity in the market as money is redeployed from bonds and money markets.

450: What is Hypernomics? Aug 04, 2024

Every time we underwrite a new asset, we build models. But modeling an apartment building isn’t like modeling a house. The price isn’t just what someone thinks it’s worth; it’s determined by net operating income and cap rates, which are heavily influenced by interest rates.

Modeling for apartment investing also includes measures of job and population growth in a given area and the impact of new construction. Suffice it to say, underwriting major real estate assets is pretty complicated.

The funny thing is that even the inputs we use in our models are based on other models. So, essentially, you have models based on models. For instance, central banks use models to manage inflation, predicting the effects of monetary policies. In the corporate world, businesses use models to forecast demand, optimize pricing strategies, and manage supply chains. These variables directly influence our underwriting models.

Herein lies the limitation of modeling: it depends on the accuracy of the input data. Models are only as good as the data fed into them; inaccurate or incomplete data can lead to misleading results. So, if the models generating the numbers for your models are off, then your model is off as well. So why do we do it anyway?

Well, it’s the best we can do, and most of the time, in my experience, the modeling points us in the right direction.

On this week’s episode of Wealth Formula Podcast, I interview Doug Howarth. He’s developed a unique approach to economic modeling called Hypernomics. He shares his insights on how Hypernomics can uncover hidden dimensions in markets and provide deeper understandings and strategic advantages.

04:40 What is Hypernomics?

11:21 Application Towards Real Estate Investing

True Wealth and Happiness Aug 02, 2024

Buck reflects on the concept of true wealth and the things that bring genuine happiness.

449: News of the Week 07/31/24 Jul 31, 2024

In today’s Wealth Formula podcast, Buck and Zulfe dive into franchise ownership as a business strategy, emphasizing its appeal for those who excel at execution. They highlight the visibility of capital requirements, expected revenues, and profitability that franchises offer, while also noting the significant time and resources required, making it less of a passive investment.

For this week’s economy and markets update, with the Federal Reserve’s FOMC meetings underway, they discuss the market’s anticipation of a potential rate cut by September and recent market movements, such as the S&P 500’s dip and the rotation out of big tech stocks. They also note stable bond yields, high gold prices, and Bitcoin’s resurgence. Lastly, Buck and Zulfe analyze asset class performance in a slowing economy, comparing real estate, infrastructure, private equity, and more against a backdrop of declining business activity and consumer confidence.

448: Income is Different from Wealth Jul 28, 2024

When I talk about the mathematical Wealth Formula, I describe it as Wealth = Leverage (Mass X Velocity). For you physics geeks out there, you can see that I’m ripping off Newton a little bit.

In this equation, velocity is your rate of return and leverage is debt such as a mortgage that amplifies positive returns. Mass is simply the amount of money you actually invest.

Mass is critically important. After all, if you don’t invest any of your money, it doesn’t matter how good the other variables are.

Now luckily most in the Wealth Formula community have plenty of mass. Our community is made up of a lot of high paid professionals. Income is not typically our main problem—it’s the other variables that help turn that income into wealth that provide us with our biggest challenges.

I tend to think of my businesses as the fuel that ignites my investments that then turn into wealth. The more fuel I’ve got, the more ability I have to grow my wealth. Imagine me shoveling cash from my businesses into a bunch of real estate to keep the wealth churning—that’s literally how I think about it.

Now you may be quite happy with the amount of money you are able to put into your investments, but if you’re not, one option is to consider is start or buy a business.

There’s no doubt that businesses require more work. Anyone who tells you otherwise is lying. However, that’s also the reason they tend to cash flow more. There are a lot more variables in businesses making them more risky then a piece of brick and mortar. And because there is more risk, there is more reward.

Nevertheless, it might be a risk worth taking. And if you are not a start-up type or need a little bit more structure, franchising might be worth looking into.

This week’s guest on Wealth Formula Podcast is an expert on franchises and gives us all the ins and outs you need to know to determine whether you should consider it for yourself.

08:10 Franchising in Uncertain Times

12:53 Return Profile on Franchises

16:59 Advantages of Franchising Compared to Buying a Business

20:42 Partnerships and Hiring in Franchising

24:33 Initial Capital Investment in Franchising

Taking Advantage of Uncertain Times Jul 26, 2024

Buck talks about the impact of uncertainty, particularly during presidential election cycles, on decision-making and offers advice on how to navigate through uncertain times.

447: News of the Week 07/24/24 Jul 24, 2024

This week, Buck and Zulfe discuss various topics related to wealth and finance. They start by talking about the mindset of the wealthy and the common denominators among successful people. They also discuss recent political events and their potential impact on the market. They then delve into the current state of interest rates and how it affects real estate investing. Finally, they introduce Ryan Haley and Jonathan Wield, partners at Velerity Wealth, and discuss the comprehensive financial advisory services offered by a family office.

446: The Wealth Thermostat Jul 21, 2024

The idea that individuals gravitate towards their perceived financial worth can be observed in various real-world scenarios. Consider the case of lottery winners. Research has shown that a significant percentage of lottery winners eventually revert to their pre-lottery financial status within a few years.

Despite the sudden influx of wealth, these individuals often lack the internal belief system necessary to sustain and grow their newfound riches. Their wealth thermostat, set at a lower level, pulls them back to where they began.

A study by the National Endowment for Financial Education found that approximately 70% of lottery winners end up broke within a few years, underscoring the powerful influence of their internal wealth thermostat.

On the flip side, stories of ultra-wealthy individuals who have faced financial ruin but managed to rebuild their fortunes provide compelling evidence of a high wealth thermostat.

Consider the case of Donald Trump. Despite facing bankruptcy multiple times, Trump managed to rebuild his empire each time, driven by an unshakable belief in his ability to generate wealth. His wealth thermostat is set high, and he naturally gravitates back to that level of financial success, demonstrating resilience and unwavering confidence.

Another example can be found in the world of professional athletes. Many professional athletes earn substantial incomes during their careers but often face financial difficulties after retirement. This phenomenon can be attributed to a wealth thermostat set at a lower level, where they lack the financial literacy and belief system necessary to sustain their wealth long-term. These athletes, much like lottery winners, revert to their previous financial state despite their temporary wealth.

Napoleon Hill, in his seminal work “Think and Grow Rich,” explores the principles behind the wealth thermostat. Hill emphasizes the power of thought and belief in shaping one’s financial destiny.

He asserts that success begins with a clear and unwavering belief in one’s ability to achieve wealth. Hill’s concept of the “Definite Major Purpose” underscores the importance of having a concrete and compelling vision of financial success. This vision, when internalized, becomes a self-fulfilling prophecy.

Hill also discusses the role of the subconscious mind in regulating our actions and outcomes. The subconscious mind, influenced by our beliefs and self-image, acts as a powerful force in determining our financial reality. To reset the wealth thermostat, Hill advocates for techniques such as positive affirmations, visualization, and surrounding oneself with influences that reinforce a wealth-oriented mindset.

Resetting the Wealth Thermostat

To reset the wealth thermostat and elevate one’s financial status, several strategies can be employed:

Belief System Overhaul: Begin by identifying and challenging limiting beliefs about money. Replace these with empowering beliefs that reflect a higher financial worth. Affirmations and positive self-talk can reinforce these new beliefs.
Visualization: Create a vivid mental image of the desired financial state. Visualization helps to program the subconscious mind to align actions and decisions with the goal of higher wealth.
Education and Mentorship: Invest in financial education and seek out mentors who exemplify the level of wealth you aspire to achieve. Learning from those who have successfully navigated the path to wealth can provide valuable insights and inspiration.
Environment and Associations: Surround yourself with individuals who have a positive relationship with money and who support your financial goals. The environment and social circles play a crucial role in shaping one’s mindset and behaviors.
Action and Persistence: Consistent and purposeful action towards financial goals is essential. Embrace setbacks as learning opportunities and maintain persistence in the pursuit of higher financial worth.

My guest on this week’s episode of Wealth Formula Podcast has taken a strong interest in the psychology of the rich and is writing a book from his observations of wealthy individuals.

08:06 What Makes Rich People Rich?

09:53 Feel Like You Are Worthy of Wealth

13:29 The Habit of Never-Ending Learning

15:35 The Value of “Networthing”

How I Met Robert Kiyosaki Jul 19, 2024

Buck recounts the time he met his hero through manifestation.

445: Using AI to Maximize Investment Gains? Jul 14, 2024

This week’s episode explores the world of artificial intelligence as it relates to stock trading. While I’m not a stock trader, I find the use of AI in various aspects of finance fascinating.

But before we do that, let’s take a step back for a moment and realize that sometimes you don’t need artificial intelligence to guide you. Sometimes you just need common sense and some guts. If you’ve got those qualities, you should be chomping at the bit right now.

As Warren Buffett famously said, “Be fearful when others are greedy, and greedy when others are fearful.” This contrarian approach has proven successful for many investors who have had the courage to act when others hesitate.

Historical examples demonstrate the potential rewards of this approach. Following the 2008 financial crisis, investors like John Paulson and Sam Zell capitalized on depressed real estate markets. Paulson’s hedge fund reportedly made billions by purchasing distressed properties and securities, while Zell’s Equity Residential acquired thousands of apartments at steep discounts.

The current multifamily real estate market provides another opportunity for people to make extraordinary profits. We are just at the beginning of a new cycle. Unprecedented interest rate increases have decimated property values, creating a unique opportunity for investors.

The key to success in these situations is to identify markets that are temporarily depressed due to external factors rather than fundamental flaws. In the case of multifamily real estate today, the current downturn is driven by interest rates, not a lack of housing demand or oversupply.

When investors purchase already discounted properties in high-interest rate environments, they position themselves for further potential windfall gains as rates normalize. As interest rates decline, property values typically increase.

The moral of the story is this, while fear may dominate current market sentiment, history shows that those who invest wisely during downturns often reap substantial rewards. As Buffett noted, “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.” The current multifamily real estate market may well be one such golden opportunity for investors with the vision and courage to act.

All you need is some common sense and some guts. But in this week’s Wealth Formula Podcast, we are going to talk about more nuanced things that might require something extra like artificial intelligence.

05:50 Using AI for Stock Trading

07:30 Do You Use AI for Daytrading or Long Term Trading

11:31 Is AI Closing the Gap Between Institutions and Everyday People?

19:16 How to Get Started with Using AI for Daytrading?

True Measures of Success Jul 12, 2024

How do you measure your professional success?

444: News of the Week 07/10/24 Jul 10, 2024

Buck and Zulfe discuss the importance of teaching personal finance to children and share their experiences with their own kids. They emphasize the need to go beyond basic financial literacy and teach kids about debt, investing, and building wealth. They also discuss the power of compounding and the different ways to compound wealth. The conversation then shifts to the market update, with Zulfe highlighting the record highs in the equity markets and the decreasing bond yields. They also discuss the possibility of the Fed cutting rates and the potential impact on the economy. The conversation discusses the potential fall in interest rates and its impact on various asset classes. It emphasizes the opportunity to buy assets at discounted prices before rates decrease. The discussion also touches on the performance of gold, Bitcoin, and other speculative assets. The potential benefits of lower rates on equity markets, bond markets, and real estate are explored.

443: Teaching Personal Finance to Your Kids Jul 07, 2024

My dad is a wise man. Like many teenagers, I didn’t always think he was. Growing up, he didn’t say much. He wasn’t the kind of dad who was keen to talk to me much about life. But when he did, I realized decades later, that he was usually right.

I remember my dad buying a lot of real estate when I was a kid. Most of the houses and small multifamily units he bought looked pretty ugly to me. So I asked him how he chose his buildings. “Cash flow”, he told me.

I didn’t know what he was talking about and didn’t really care but years later the words “cash flow” became serious buzzwords as Robert Kiyosaki released Rich Dad Poor Dad. And, as it turns out, cash flow is indeed the most important element when it comes to buying real estate.

Another time, I remember him asking me why I wanted to go to medical school. He said if I wanted to make money I should be doing real estate, not medicine. I was appalled that he would dissuade his own son from becoming a doctor. But in hindsight, I would also probably warn my kids against medical school as a path to financial prosperity in the future.

Finally, I remember during the late 90s, when I was in medical school in Chicago, Alan Greenspan raised interest rates rapidly. My dad had a lot of floating debt and ended up losing a lot of money. He told me to beware of floating debt. And of course, he couldn’t be more right about that one considering what has happened to the real estate markets throughout the country over the past two years.

Looking back, I wish he had taught me more. But those were different times and parental relationships in immigrant families were quite different than the kind of relationship I have with my children today.

However, I think that it is still the case that most parents undervalue teaching their children about personal finance. Perhaps it’s because they don’t know much about it themselves. Maybe it’s just not that much fun to talk about.

Nevertheless, it is something that I think all of us parents should take a step back and consider what kind of financial education our children are getting at home and what we can do to help them be better equipped for the future.

My guest today took that message seriously enough that he wrote a book on personal finance with his own daughters. Make sure to tune in to this week’s Wealth Formula Podcast as Alpesh Parmar takes us down his own journey of educating his own children on money matters.

Tax-Saving Strategies for High W-2 Earners Jul 05, 2024

The first step to stop trading time for money and start building wealth is to figure out how to pay less taxes. Here are two real estate strategies to save on taxes for W-2 employees.

442: Lane Kawaoka on Real Estate and Life Jun 30, 2024

What do you do when you’re not happy with the way things are? That’s a question I have been asking myself a lot lately.

In my case, I’m talking about life outside of business and real estate. You see, I’ve been divorced for a few years now and I have still not really rebuilt my life since then.

When I have my kids, it all makes sense. It’s about being with them. Last weekend we played four square, badminton and threw around a baseball. I’m pretty sure I had more fun than they did.

But when I’m not with them, I sometimes feel like I live in a 7500-square-foot luxury jail. You see, I work from home and really don’t have any reason to leave the house. Every morning I work out. Maybe I go on a hike or I lift weights secretly hoping that bigger muscles will solve my social problems.

Sure I have some friends but most of them are married and busy with their own families. The dating scene in Santa Barbara has been remarkably bad and so… I’m still single. The bottom line is that my social life needs a facelift.

I’ve been thinking about this a lot lately. I don’t know about you, but I spent so much of my life engineering a successful career and virtually no time working on my life outside of it. A lot of guys get away with that and let their wives handle the social stuff.

Well, I don’t have one of those so I have to fix the problem myself. Somehow. But how? It occurred to me the other day that I should start looking at my social life the same way I look at business. What did I do to become successful in my professional life?

Thinking back, I kept seeing a similar pattern. I would decide what I want to do and somehow make it happen by physical movement—even if it didn’t make sense. Somehow, that movement itself seemed to make it happen.

Let me tell you a story to illustrate. As you know, I was a neurosurgery resident for about a year and a half at the University of Michigan before I decided I was done with that kind of lifestyle and quit the program.

It was the dead of winter in Ann Arbor and I suddenly found myself without direction. I decided to do some rotations on some of the other surgical specialty teams at the hospital and ultimately decided to move from Neurosurgery to a specialty called Otolaryngology-Head and Neck surgery—basically head and neck surgery of everything except the brain and spinal cord.

To be clear, I wasn’t passionate about this new speciality. I decided to do it because the hours just seemed better and it seemed like most of the professors had pretty good lifestyles.

Now, I just had to figure out how I was going to get myself a residency position. This was a difficult task. I was looking for a second-year position in a program somewhere in the country where someone had, for whatever reason, left a vacancy for me. Most programs only had 2-3 residents per year to begin with. It’s a small specialty.

I didn’t have a clear place to start, so I decided just to put myself out there and see what would happen. I chose the top 10 programs in the country and wrote letters (not emails) to their chairmen. One of those programs was the University of California, San Francisco (UCSF).

In case you don’t know, UCSF is one of the top hospitals in the world. For me, getting a spot at UCSF would be like hitting the lottery. Beyond the reputation of the hospital, my sister lived in San Francisco and I really loved the idea of moving there. I had had enough of being in a small college town in the Midwest.

So I sent those letters out. A week later, I was sitting in the hospital library looking at programs on the internet when it occurred to me that I had no reason to be in Michigan anymore. I had an impulse to drop everything and fly to San Francisco.

So I turned my internet search over to orbitz.com and looked up the next flight to San Francisco. It was leaving in 3 hours from Columbus—just enough time for me to drive there. So I went home, grabbed my stuff and headed to the airport.

I landed in San Francisco just a few hours later. And, when the plane was taxiing, I turned on my phone and was shocked to see a text message from Dr.David Eisele, then Chairman of the Head and Neck Surgery Department at UCSF. In response to my letter, he was inviting me to interview for an unexpected vacancy in his program. I went to see him the next day and he offered me the job.

Now you can call that coincidence, but the chances of all this happening randomly seem ridiculously small to me. I felt like somehow, I had willed this to happen by putting those letters in the mail and by physically moving myself to San Francisco.

And if this story sounds crazy to you, I’ve got a lot more where that came from. Ask me about them next time you see me. I don’t know how to explain these stories, but I’ve got a lot of them.

So my challenge now is trying to use this same kind of energy to give myself a social life! It’s a lot harder than professional stuff but maybe it will work. I’ll let you know how it goes lol.

In the meantime, the reason I brought up this stuff is because the first time I met Lane Kawaoka was at a meeting that I went to that ultimately led me to podcast. That was almost a decade ago.

Since then, Lane launched his own successful podcast. I mentored him when he was younger and I’ve learned quite a bit from him as well.

On this week’s Wealth Formula Podcast, Lane and I reminisce on the old days and talk about the current state of the investment world. I hope you enjoy the discussion.

12:38 Lessons from the Years

23:15 Investing Outside of Multifamily

29:59 The Construction Space

35:31 The Wealth Elevator

Does Money Buy You Happiness? Jun 28, 2024

Does it really?

441: News of the Week 06/26/24 Jun 26, 2024

In this weekly update, Buck and Zulfe discuss liability insurance, the economy, and money market funds. They highlight the importance of reviewing and updating insurance policies, the impact of consumer confidence on the economy, and the rising prices in the residential home market. They also explain the difference between money market funds and money market accounts, and the potential risks and returns associated with each.

440: What You Need to Know About Liability Insurance Jun 23, 2024

Oh man…we are getting really sexy with topics on this show! On this week’s episode of Wealth Formula Podcast, we are going to talk about liability insurance: malpractice insurance, property insurance—all that kind of stuff.

I know this doesn’t sound exciting, but do you know the five different parts of an insurance policy and what part is generally the one that will screw you over? I didn’t think so.

Here’s my suggestion. Grab your property insurance policy and follow along with the show. I haven’t read mine and you probably haven’t read yours either. But this is stuff you need to know a little bit about because if you have to change something or get a new policy, now’s the time to do it.

Liability insurance is your first line of asset protection so make sure you have a grasp on it. This show will give you a nice place to start and it’s actually pretty interesting.

04:06 Insurance 101

05:22 The 5 Main Parts of Insurance

10:29 How to Look for the Right Insurance Policy

13:19 How to Deal with Claim Adjuster

17:35 What Should You Be Asking When Buying Insurance

20:27 Why Property Insurance is Skyrocketing

438: Mark Skousen on Freedom and the Economy Jun 16, 2024

This week’s guest on Wealth Formula Podcast is Mark Skousen. He is the producer of FreedomFest which has become an extremely popular annual gathering every year that deals with not only money but other lifestyle topics as well.

What is freedom anyway? To me, It’s the ability to choose what you want to do with your life. Indeed, freedom is the ultimate prize in life and can only be achieved through financial independence.

That is not to say that you can’t be happy without being rich. You absolutely can. Maybe you have a job that you love and a life that you don’t want to change. If that’s the case, congratulations. But happy does not mean free.

What if someday you start hating your job and want to make a big change in your life? Could you afford to follow a dream without being concerned about money? Most professionals can’t. That’s why high-paid W2 jobs are often called “golden handcuffs”.

How do you break free from the golden handcuffs? Well, one of the key variables of the mathematical Wealth Formula is that you deploy capital quickly so that you can start changing the balance of power between you and your money. Eventually, you want your money to work for you more than you work for it.

But achieving financial freedom isn’t easy. It involves not following the herd and not giving up. You see, no one has ever gotten rich from a simple portfolio of stocks, bonds and mutual funds.

Sure they may grow your money a bit and provide some security in the future. But you simply cannot change your socioeconomic status this way. Getting rich involves taking bigger risks.

I have made my money through business ownership and real estate. Have I lost money along the way? You bet I have. But have I made more money investing in real estate and business over the last 15 years than I would have following the herd? Yes…by a mile.

To be clear, I am not giving you financial advice. Personal finance is personal. I just want to open your eyes and see the trajectory you are on and recognize whether or not it will get you where you want to be.

In the immortal words of former NFL coach Bruce Aryans, “No risk it, no biscuit.

Now, make sure you tune into this week’s podcast with FreedomFest producer and “America’s economist”, Mark Skousen.

Show Notes:

08:07 Why are the Numbers not Matching Our Anxiety?

09:54 GDP vs Growth Output

14:32 10% Inflation?

18:00 Implications of the Presidential Election

26:12 The Indicators to Look Out For

30:55 FreedomFest

437: News of the Week 06/12/24 Jun 13, 2024

Thoughts on Sunday podcast on internet business investing:

Seems like a platform really suited for people with e-commerce expertise
I wouldn’t know how to evaluate or run an Internet business
Investing under a manager who knows what they’re doing might make sense, but we’d need to see the track record
I tend to think this is an area where you need to have operating expertise to be successful, even as a passive investor

Latest on the economy and markets:

When we spoke last week, we had just received the latest job openings report which showed some continued slowdown in the job market with decreasing (but still positive) job openings.
Since then, another labor market statistic, came in a bit hotter than expected in terms of payrolls added in the month of May
- So we’re seeing some mixed data on the labor front as well as mixed data on various inflation measures
- Generally speaking the economy, inflation and labor markets are cooling. But it’s not a necessarily smooth ride; there’s volatility as can be expected
Implications:
- Chairman Powell will do a press conference Wednesday
- The focus will all be on his messaging related to outlook as we head into the 2^nd half of 2024
- Most economists have been assuming 2 or 3 rate cuts in 2024; so there will be a focus on Powell’s messaging
- The FED is likely to keep steady on the Fed Funds Rate in the months ahead
- The FED is currently in its two-day FOMC meeting which is being held over Tues and Wed of this week
Overall, the trading markets have been stable over the past week:
- Equity markets are up 1%-2% since last week depending on which indices you look at, S&P, Nasdaq, Dow…
- The 10-year bond yield ticked up about 10 basis points in that time
- Gold and Bitcoin are down a bit off their highs
One thing to note about the performance of the stock market this year is that strong positive performance has been very narrow
- But if we look at which type of companies have fueled that gain, it’s all based on the very large cap stocks like Apple, Alphabet, Microsoft, Amazon, NVIDIA, META- the companies with market capitalization in excess of $1 Trillion
  - In fact, those companies have gained about 40% in price YTD, while all other companies together (that are below $1 trillion market cap) have pretty much traded flat on the year.
- The real end game with AI is unleashing productivity for companies and therefore driving profitability
- For example, the S&P 500 is up about 13% year to date in 2024
- On the one hand, this is not reassuring since it’s so concentrated and it seems most companies are not doing all that well
- On the other hand, it could be the case that the $1 Trillion companies are benefiting most right now from AI-driven earnings growth and that will spread across a much broader universe of companies in the coming months and years
What I continue to like in this investment environment is real estate
- Buyers are able to negotiate better purchase prices, especially in situations where the seller is distressed
- If inflation gets to a point where the Fed starts cutting rates, real estate prices will go up
- If inflation remains an issue, well you want to own hard assets with leverage
I am optimistic about the equity markets over the longer term, because I think the US economy will continue to grow and we have the potential for AI to drive profitability over the next several years
- In the short term, with rates uncertainty and elections upcoming, it will probably be somewhat volatile in the public markets

New product to discuss: Mutual Funds versus ETF (Exchange Traded Funds)

Both are investment fund structures available to investors
- Most EFTs are passive and pegged to the performance of a particular index
- Most Mutual Funds are actively managed by fund managers; can also be passive, indexed funds
- Passive versus active management is a strategic choice. If you’ve ever heard of the theory of a monkey throwing darts having a good chance of beating the stock picks of a professional stock fund manager, there is good evidence to support this…
- David Swenson, the guy who is responsible for the Yale Endowment’s consistent and stellar performance for multiple decades, is passionate about his view that investors avoid active management strategies for the public stock market. He has done tons of research showing how active management does not beat passive investing in any consisted manner.
Trading:
- ETFs trade like stocks in the secondary market. You can buy and sell them throughout the day and their price changes constantly reflecting the immediate market price.
- Mutual funds can only be bought and sold at the end of each trading day.
Fees:
- ETFs usually have materially lower fees to investors
- Mutual funds have larger fees and can include upfront fees when you buy, ongoing management fees when you own the mutual fund, and exit fees when you sell. Often these vary depending on what class of mutual fund shares you purchase and how big your investment amount is.
Minimum investments
- ETFs don’t have minimum investment amounts. Like stocks of companies
- Mutual funds typically require a minimum investment of $3k or more
Tax efficiency:
- ETFs are more tax efficient; they are managed to minimize capital gains events – they rarely pay out capital gains
- Mutual fund managers, on the other hand, sell securities to handle redemptions or asset reallocation and generate capital gains for shareholders – even those with unrealized losses
Overall, investors are better off with ETFs; especially when they are investing in passive strategies

436: Should You Buy an Online Business? Jun 09, 2024

After finishing residency and swallowing the purple pill (reading a Kiyosaki book), I found my entrepreneurial self for the first time. I was a like a kid in a candy store looking for any business opportunity I could think of.

My initial foray into the entrepreneurial world related to my background—as a surgeon. I started with medical businesses. I say businesses here to make the distinction that these were not run-like practices. They involved branding, heavy marketing budgets and cash pay.

Unlike many entrepreneurs, my first few businesses were successful for several years. However, at times, I also felt a tremendous amount of stress because of the overhead involved in such brick-and-mortar operations.

Anyone who runs a business knows that there are lots of bills to be paid regardless of whether or not your business makes money. You’ve got payroll, advertising, insurance costs, rent—it all adds up.

My fixed costs for my initial Chicago business were running about $200K per month and the costs would go up as income came in because commissions needed to be paid out. Unless we were pulling in north of $300K per month, there wasn’t much profit left for me. So, in certain months I felt rich and in other months I felt like a pauper.

Those initial brick-and-mortar businesses are gone now. They gave me my start and made me some money over the years. But, as often is the case with small startup businesses, they often don’t last forever.

So what did I learn from them? Well, as you can imagine, I learned a lot. I learned that I prefer boring businesses to flashy ones because they tend to have less competition. I learned that you must have competent and reliable management that is not too concentrated in the hands of one person. And, I learned to avoid businesses with significant fixed expenses.

Avoiding significant overhead is perhaps my biggest lesson. It’s really quite awful starting off every month so far in the hole. But how do you avoid that?

Well, one consideration is online business. They can be as boring as you want. They can be automated to a certain degree making management and employees less critical. And, in many cases, there are minimal fixed costs.

Therefore, I have always been curious about buying an online business. For that reason, I invited a representative from one of the largest online business brokers in the world to discuss this type of asset.

It’s an interview where you will learn a lot. I highly recommend tuning it. However, just to be clear, I have never done business with this company nor am I endorsing them. I have no financial relationship with them either so please do your own due diligence if the spirit moves you to contact them.

Show Notes:

05:00 What Does Buying An Online Business Entail?

07:10 How Is An Online Business Different From a Physical One?

08:25 Where Do I Start?

11:50 Where Are the Operators Coming From?

12:55 How Does the Operation Work?

17:11 The Risks

20:03 What Determines the Multiples of Sites?

23:15 The Due Diligence

24:34 The Success Rate

The #1 Trait Every Successful Entrepreneur Needs to Master Jun 08, 2024

How Most Entrepreneurs Get Rich Jun 07, 2024

Buck shares the similar path that almost every successful entrepreneur he knows took.

435: News of the Week 06/05/24 Jun 05, 2024

Market Updates:

Economic data since last week’s update:
- Core PCE Price Index rose 0.2% in April, in line with expectations
- Job openings decreased in April, indicating a cooling labor market
Equity markets have been a bit volatile recently, down a couple of percentage points
Ongoing volatility is expected as we move through the summer and elections
However, the economic and inflation backdrop should provide good support for public equity and bond markets
Potential for the Fed to start reducing rates in the second half of 2024, which could restart the real estate investment cycle
The recommendation is for investors to be deployed and looking for opportunities, rather than sitting on the sidelines

Investment Topic: Private Credit Funds

Also known as private debt or direct lending
Growth in non-bank lending due to regulatory changes making it harder for banks to expand their balance sheets
Private credit funds raise capital from investors and deploy it as loans and other debt instruments
Can target different types of credit and debt structures
Potential benefits include regular interest payments, 7-12% annualized cash returns, and portfolio diversification
Risks include being locked into a long-term investment and fund manager selection being key

434: Another Perspective on Asset Protection Jun 02, 2024

This week’s episode on Wealth Formula Podcast is a primer on asset protection.

One of the things that I learned a few years back is that asset protection and estate planning are not one and the same.

Asset protection is simply protection against creditors. An offshore trust in the Cook Islands, for example, is a rock solid way to protect your assets but it is not an estate planning vehicle.

Since this week’s podcast discusses asset protection, I want to just remind you of what you MUST know about estate planning.

As of today, if you are single you can leave up to $13.61 million to your heirs without being subject to estate taxes—double that if you are a married couple.

As long as you are below that, you need two things at a bare minimum to ensure that you don’t make your loved ones even more miserable than they already will be.

You need a will AND you need a trust.

The key difference between a will and a living trust lies in how they manage and distribute your assets during your lifetime and after death.

A will is a legal document that outlines how you want your assets distributed after you pass away. It only takes effect upon your death, at which point it goes through the probate process overseen by a court.

On the other hand, a living trust is a legal arrangement where you transfer ownership of your assets into a trust during your lifetime. The trust is managed by a trustee (which can be you initially) for the benefit of your beneficiaries. Upon your death, the assets in the trust are then distributed according to your instructions, bypassing the probate process.

You want to avoid probate at all costs if you want to make it easy on your loved ones. Probate is the legal process that takes place after someone dies to distribute their assets and property to the rightful heirs or beneficiaries. It involves going through the court system, which can be time-consuming, expensive, and open to the public.

It can drag on for months or even years, especially if the estate is complex or there are disputes among heirs. A living trust allows assets to be distributed relatively quickly after death without court involvement.

Furthermore, probate fees, court costs, attorney fees, executor fees, etc. can eat up a significant portion of the estate’s value. With a living trust, you avoid most of these costly probate expenses.

So if you have not done so, PLEASE make sure you get these documents done. It’s not expensive and your family will thank you for it.

Show Notes:

05:47 A Review on Estate Planning & Asset Protection

07:56 How to Determine What You Need

12:03 Protecting Your Real Estate

13:53 When Do You Need a Trust?

16:45 Asset Protection Strategies that Mitigates Tax

19:45 Upcoming Law Changes

23:50 Beneficial Owner Information Report

433: News of the Week 05/29/24 May 29, 2024

The upcoming wealth transfer from Baby Boomers to younger generations is a significant and unprecedented event in history, often referred to as the “Great Wealth Transfer.” Research indicates that about half of this $100 trillion transfer will go to Gen X, with the other half going to Millennials and Gen Z.

This generational shift is interesting, as Gen X has been described as less altruistic, preferring to retain wealth for themselves, compared to the younger generations’ greater focus on social equity and environmental sustainability. It will be intriguing to see how this “impact” orientation evolves as Millennials and Gen Z age.

For those listeners who will be on the receiving end of this wealth transfer over the next decade or two, it’s important to have the proper structures in place to ensure a smooth and tax-efficient transfer to your heirs. This is something that can and should be addressed now.

Considering this upcoming wealth transfer also leads to some additional implications from an investment perspective. Baby Boomers’ portfolios tended to be heavily weighted in stocks, bonds, and real estate. However, surveys show Millennials and Gen Z investors are much more open to alternative assets, such as real estate, private equity, venture capital, crypto, and other investments.

This shift aligns with the younger generations’ higher focus on sustainable investing, which accounted for 73% of their portfolios compared to only 26% for the general population. While there has been some recent backlash on sustainable investing, this trend could see a resurgence as the wealth transfer occurs.

Interestingly, real estate seems to be a consistent favorite across all generations.

Turning to the current market environment, equity markets remain near all-time highs, bond prices are generally steady, and safe-haven assets like gold and bitcoin are also elevated. The market expects the Federal Reserve’s preferred inflation metric, Core PCE, to show further cooling when the latest data is released this Thursday.

432: Wealth Transfer to Gen Z: A Generation that Thinks Differently May 26, 2024

The Baby Boomer generation (born 1946-1964) was historically the largest, peaking at around 78.8 million in 1999 when they were in their prime working years. However, the current Baby Boomer population in the U.S. as of 2019 is estimated to be 71.6 million, having declined due to mortality exceeding births as this generation ages.

The Millennial generation (born 1981-1996) has now surpassed the Baby Boomers to become the largest living adult generation in the U.S. As of 2019, there were 72.1 million Millennials. The Millennial population is projected to continue growing, partly due to immigration, and peak around 2033 at 74.9 million before declining as mortality rises].

Following the Millennials is Generation X (born 1965-1980), with 65.2 million members in the U.S. as of 2019. Gen X is expected to outnumber the declining Baby Boomer population by 2028.

The youngest major generation, Generation Z (born 1997-2012), is also a massive cohort. Gen Z makes up around 20% of the current U.S. population. The Gen Z population in the U.S. is expected to grow from immigration as well, similar to Millennials.

The sheer size of the Millennial and Gen Z generations presents both opportunities and challenges for the U.S. economy. A larger working-age population can drive economic growth through increased productivity, consumption, and tax contributions. However, it also puts pressure on job markets, housing, infrastructure, and social services.

A recognized major emerging problem is the challenge of supporting the aging Baby Boomer population as they continue retiring in large numbers. The burden of funding Social Security, Medicare, and other retirement programs will fall primarily on the Millennial and Gen Z generations. This will almost certainly strain public finances and some economists have even predicted a major national depression around 2030 because of this.

All of these problems have been previously covered to some extent on Wealth Formula Podcast episodes in the past. This week, however, we cover another less appreciated problem…the transfer of massive amounts of wealth to a generation with different political views and values.

My guest on this week’s Wealth Formula Podcast believes this is a major underappreciated issue that needs to be addressed as soon as possible. Find out why.

Show Notes:

00:00 Intro

05:54 The 100 Trillion Dollar Wealth Transfer

08:25 The Mindset Difference between Baby Boomers and Millennials

10:32 The Risk of the Wealth Transfer

14:59 Monetizing Influence

16:39 Where is Gen-X in All of This?

18:36 The Positive Outcomes

21:12 Where Does the Discourse Take Place?

23:10 The Worst Case Scenario

431: Wealth Formula Banking Webinar Replay May 24, 2024

Buck Joffrey is joined by Rod Zabriskie and colleagues of Wealth Formula Banking to discuss this powerful financial tool that leverages your savings to invest the same money at two places at the same time.

430: Velerity Wealth Update 05/22/24 May 22, 2024

Takeaways

Tax policies can have a significant impact on businesses and individuals, and it’s important to plan and adapt accordingly.
The depletion of social security funds is a concern, and solutions need to be implemented to address this issue.
The stock market has been performing well, with the Dow Jones hitting all-time highs and the S&P and NASDAQ showing significant gains.
Diversification is key in managing investments and mitigating risks.
Having a strong financial team, including tax specialists and estate planning experts, is crucial for navigating the complexities of the current market.

429: Taxocracy May 19, 2024

Tom Wheelwright, my friend and author of Tax-Free Wealth, describes the US tax code simply as a series of government-sponsored incentives. As someone who hates paying taxes, this fact has made me extraordinarily patriotic. The problem is, that sometimes incentives backfire.

Case in point—during the British Raj rule in India, there was a proliferation of venomous cobras in Delhi. To deal with this problem, the colonial government introduced a bounty/reward program where people would be paid a cash amount for every dead cobra they brought to the authorities.

Initially, this seemed to work as intended – the cobra population started declining as people hunted and killed the snakes to earn the reward money.

However, people soon realized they could exploit this system by breeding and farming cobras specifically to kill them and collect the reward. Driven by the monetary incentive, many started cobra breeding operations.

When the British officials discovered this unintended consequence of their bounty program – people were now breeding more cobras than they were killing – they scrapped the reward program altogether.

This led to another unintended effect – with no more reward money to be made, the cobra breeders simply released their now-worthless snakes into the wild, causing the cobra population to proliferate even more than before the bounty was introduced.

As an American of Indian descent, I would love to tell you that the Colonial British were just a bunch of idiots. But, the reality is that the cobra effect is alive and well in the US tax code.

To explain how, this week on Wealth Formula Podcast I interview one of America’s leading experts on tax policy.

Show Notes:

04:31 What is Taxocracy?

06:11 Tax Codes Are Just Incentives

07:15 Are the Tax Codes Making Americans Disapprove of the Economy?

08:30 The Global Wealth Tax

13:22 President Biden’s Proposal on Capital Gain

14:38 The Death Tax

18:17 In Comparison to President Trump’s Policy

20:39 The Mansion Tax

23:59 Other Tax Influences

25:46 The Tax Foundation

428: Velerity Wealth Update 5/15/24 May 15, 2024

My key takeaway from our guest (Ryan Bourne from the Cato Institute) on this week’s episode is that policy mistakes that adversely impact the free markets happen for a variety of reasons:
Misread of data
Poor use of policy tools
Political motivation
National Security interests

Whatever the reason, the consequences of policy mistakes are real for investors.

For example, the FED let inflation run too hot when it thought it was transitory, which probably then created a situation where they had to hike more aggressively than they would have if they caught inflation at the front end. Resulting in a detrimental hit to interest rate-sensitive investments such as real estate and debt securities.

Today, we can see examples of potential fiscal and monetary mistakes unfolding in front of us:

On the monetary policy front: the FED is waiting for data it needs to start cutting rates…but, it’s running into the presidential elections timeframe (RNC convention in July, DNC in August). So, it may decide to not touch the FED rate until end of year…Thus the FED may be forced to make a policy error due to political considerations.

On the fiscal policy front: we see large investments to support US manufacturing; large investments to onshore critical technologies such as semiconductors; trade protectionism including tariffs on imports (new tariffs announced today on Chinese EVs, storage batteries, steel and aluminium products); immigration policy is also at risk of politically motivated policy decisions.
As investors, what can we do?

It’s not possible to predict and factor in the impact of all of these policies.

What we can do is isolate key macro themes that are likely to drive secular trends over the coming decades.

For example:
The Aging population in the US and other developed countries. This will drive growth in health and wellness products and services.

Investment in upgrading the US grid to support huge demand of electricity (data centers, AI driving computing, EVs) and to accommodate new energy sources.

Deployment of AI in key industries such as biotech to accelerate drug discovery.

Historically high level of cash ($6 trillion) is sitting on the sidelines as investors decide to clip 5% interest in money market funds.

As soon as any signal comes from the FED that it is ready to cut rates, or even if it is going to significantly taper its Quantitative Tightening policy, there will be an enormous amount of capital rushing back into investments: equities, bonds, real estate etc.
Investors should already start deploying their capital into investments.

Do not sit on cash and/or money market funds. At 5% money markets may be tempting, but that rate will not last when the FED starts cutting and then you’ll be chasing assets that have already appreciated dramatically.

427: A Libertarian Perspective on the Market Economy May 12, 2024

I have frequently described myself as most aligned with libertarian thought when it comes to my own politics. In terms of the economy, libertarians believe in the concept of a free market.

Libertarians argue that a truly free market fosters prosperity, innovation, and individual liberty. But that doesn’t really describe the American economy, does it?

Over the years, the American economy has seen a proliferation of regulations at the federal, state, and local levels that have significantly constrained economic freedom.

In addition, governments constantly intervene in the economy through corporate subsidies, bailouts, and preferential treatment. You don’t need to look further than the recent regional bank bailouts to see that.

Libertarians would argue that such intervention distorts market incentives and motivations. For example, how are banking practices going to change for the better if the bankers know they are going to get bailed out if things go wrong?

Does a truly free market even exist? I don’t know of one. And perhaps the ruthless nature of the free market is one that we wouldn’t truly find appetizing anyway.

However, there is no doubt in my mind that a “freer” market would do the economy some good. My guest on this week’s Wealth Formula Podcast is from the libertarian think tank, Cato Institute, and explains how government market intervention has hurt us and how it will continue to do so if policies do not change.

Show Notes:

04:29 What is the Cato Institute?

05:32 The Market Prices Are Under Siege

08:00 How Do Market Prices Provide Value For the Economy?

11:45 Inflation VS Price Spikes

16:52 Is the Central Bank Policy Misguided?

19:11 Are We Hitting the Inflation Target Soon?

25:13 What Could We Be Missing That Would Keep Inflation Numbers High?

28:13 How Will the Election Affect Decision in Policy?

426: Velerity Wealth Update 5/8/24 May 08, 2024

Regarding the recent Podcast:

US debt fears overblown
US debt is high, but not unsustainably so (compared to global economies)

A more relevant concern may be focused on the appetite or ability of investors to buy the quantum of debt being issued by the US government.

Foreign investment in US debt has declined
China and other central banks have been buying gold
US treasury auctions are historically large ($125 billion on auction this week)

As investors how do we position our investment portfolios for risks related to spiraling and unsustainable debt levels by our government:

Resulting conditions will likely consist of high inflation, high interest rates, higher taxes, slower economic growth
Real assets tend to perform better. Gold, real estate, aviation assets.
- Better to have some leverage
- Tax efficient investments (such as real estate and aviation assets)

Current market trends

Latest FED outlook
Interest rate outlook

425: The US Government Ponzi scheme? May 05, 2024

Is it me or is no one talking about high U.S. debt levels anymore?

Conventional wisdom has always been that high debt levels lead to inflation and the destruction of currencies, and money printing conjured up images of wheelbarrows full of worthless bills and economies in freefall.

Then one day, the political party that used to care about fiscal responsibility stopped caring and now no one talks about it anymore. After all, doing so would involve cutting things like Medicare and Social Security—not popular political stances.

Instead, the concept of Modern Monetary Theory (MMT) has started to creep into popular parlance and, you could argue, is becoming the rule of the land.

According to MMT, as long as Uncle Sam holds the keys to the printing press, he can rack up debt without any ramifications. It’s a bold new take on economics that’s got the traditionalists scratching their heads and the contrarians doing a victory dance.

So should we care about debt or not? My guest today on Wealth Formula Podcast is definitely a traditionalist and he is not optimistic about how the story will end if we don’t do something about it.

Make sure to tune in as he explains why debt is still so important and what, if anything, we can do about it and protect ourselves.

Show Notes:

05:37 Why is the U.S. Government a Big Ponzi Scheme?

06:52 Is the U.S. Immune to Bankruptcy?

08:04 How Realistic Is It That the U.S. Economy Would Collapse?

12:01 Political Reform for the Fiscal Policy

19:20 How Can We Protect Ourselves From the Collapse?

424: Richard Duncan: U.S. Strong China in Trouble Apr 28, 2024

I have been asked by many to give my opinion on where the economy is headed and what to do.

I have been reluctant to do so because I am not an economist and I do not want to give investment advice.

However, I do think I owe it to you to let you know where my head is and what I am doing based on these thoughts.

Last week and this week’s podcast have convinced me that rates are going to fall significantly over the next 6 months. Why? Because I think that inflation, as measured by CPI is going to fall off of a cliff.

I don’t even consider this a prediction frankly. I think it’s already written in stone.

Why? Because 70 percent of CPI is based on rent increases and the variables used to calculate this number are 6 months behind.

The recent CPI of 3.1 per cent used 6 per cent rent increases to get to that number. Anyone in the multifamily space will tell you what’s wrong. The rents are flat. We see it every day and all of the data available to us real estate operators show flat rent growth.

Knowing this, all you need to do is ask yourself what this lagging indicator will show six months from now. Whatever happens between now and then doesn’t matter. That lagging indicator will reflect what is the reality today. And if the rents are where I believe they truly are, CPI will be below two.

A CPI below two along with a slowing economy will result in a swift response from the Federal Reserve to cut rates to avoid deflation..traditionally the Fed’s worst fear.

So, if I’m right, rates will come down and anyone making big decisions today based on the assumption that rates will remain stable or go higher is making a mistake. In other words, my opinion is to make sure you are not selling from a position of weakness. Hold on to what you own.

This week’s interview with Richard Duncan furthered my convictions of the inevitability of falling rates. It also painted a picture of China that looked a lot more like Japan in the 1990s.

The economy and the world are changing quickly. Make sure to listen to this week’s episode of the Wealth Formula Podcast to keep up!

Show Notes:

06:38 What’s Been Going On With Inflation and Rates Cut?

11:21 Indicators That the Fed Uses to Measure Inflation

15:27 Will the Fed Become Hawkish now?

21:33 Why the U.S. Economy Has Been So Strong

28:31 The Economic Crisis in China

42:41 What Can China Do to Stabilize Their Economy?

48:17 Implications for the Rest of the World

423: Campbell Harvey Says the Fed is WRONG on Inflation and Interest Rates Apr 21, 2024

Even really smart people are wrong on a regular basis. I see this all the time in health and longevity-related issues on my other podcast, Sapio with Buck Joffrey.

In case you are wondering…yes, I have become one of those middle-aged California guys trying to stay young at all costs. Not easy. But, I have to admit, the nerdy physician scientist type in me is having lots of fun with the science and enjoying the process of sharing it with my fellow Gen-Xers who are also fighting gravity with me.

But getting back to the point of smart people being wrong—we see this a lot in medicine. In the 1960s, a lot smart people created the food pyramid that said we should be eating a lot of carbohydrates and very little fat. That’s quite the opposite of what recent science suggests.

There was also a period in the 1990s when women were advised not to use hormone replacement because a study was thought to have suggested a link with breast cancer. A generation of doctors gave women bad advice based on what turned out to be a misinterpretation of data.

On the economic side, we don’t have to go far back to see the Federal Reserve calling inflation “transitory” just before it skyrocketed for real. How could so many smart people be so wrong?

And now, the Fed is likely delaying interest rate cuts because of higher-than-expected inflation numbers. Are they missing something here?

My guest on this week’s Wealth Formula Podcast thinks so and his reasons are compelling. I have to say, this was one of the most interesting conversations I’ve had in a long time on the Wealth Formula Podcast and I HIGHLY recommend you listen to it.

Show Notes:

07:28 How Does the Inverted Yield Curve Predict Recession?

18:53 Stirring the Economy by Misreading the Data

422: Avoiding Ponzi Schemes and Bad Actors Apr 14, 2024

The notion of moving wealth away from Wall Street into the hands of small private operators sounds great. However, it’s important to acknowledge some of the challenges of navigating these waters; challenges that many have witnessed first-hand in the podcast ecosystem over the past two years.

First and foremost, let’s talk about vetting. Investing is hard. With the ideal operator and business plan, you still have economic cycles, inflation and interest rates to worry about. And sometimes, projects just fail. These are investment realities that are always there even before you choose an operator.

Of course, not all operators are created equal and the vetting process becomes paramount. How do you ensure that these operators have the acumen, integrity, and diligence to manage your wealth responsibly?

You can do background checks, look at resumes and track records. You can ask all the right questions and even get all the right answers. All of this is certainly helpful, but limited to historical data. As the old saying goes, past performance does not indicate future results.

So far, all of this applies equally to Wall Street and Main Street. But I would argue that the one variable that is much harder to control on Main Street is the bad actor.

You would be correct in pointing out that the most famous of modern-day Ponzi schemes was perpetrated by Bernie Madoff, Wall Street’s Godfather. But that just doesn’t happen that often with the big boys. Too much red tape, regulation and heavy-hitting due diligence by sophisticated investors to make an outright fraudulent investment work.

And the bad actors know that too so they set their sites on easier targets like retail investors. They lurk at our events and make the podcast circuit. It is for these various reasons that I no longer will interview anyone from outside of my own circle actively raising capital. It’s also the reason that we now use an SEC-registered broker-dealer to conduct independent due diligence on most of our offerings in Investor Club.

How do you identify a bad actor anyway? Sometimes it’s quite easy. For example, one fund that was circulating in the podcast ecosystem had a founder and CEO who I couldn’t even locate on a Google search despite the fact that he was sold as a major player in the oil and gas industry doing business with some of the world’s top companies.

Sometimes it’s less obvious and you have to know how to look for clues. My guest this week on Wealth Formula Podcast is an expert in identifying fraud, in part, because he once ran a Ponzi scheme himself.

Show Notes:

08:45 From Fraudster to Fraud Prevention

17:10 Do Frauds Generally Start with Intention?

19:36 5 Major Red Flags of Fraud

37:40 James’ Business

421: Turn Your Empty Space into a Self-Storage Business Apr 07, 2024

As soon as I finished training, I opened up a cosmetic surgery business. When I say business, I mean a business not practice.

From day one, it was my intention to create a brand that I could hand off or sell someday rather than to create a job for myself. I was also focused on cosmetics. Unlike the traditional way of growing a cosmetic practice, I wasn’t going to see insurance-based patients for 10 years and slowly build a referral base. Nope. I hit the airwaves and pounded the internet any true entrepreneurial business would do to make itself known.

It worked and though I didn’t make much money that first few months, within a year I was pulling in six figures per month. It was my first entrepreneurial success.

And while I rode that wave I felt invincible. It lasted for two years— right before the 2012 presidential election. At that time, I had just decided to buy a building for my business. That was shortly after buying a $2 million house which was a big deal for me just a couple of years out of training.

In short, I was suddenly cash-poor. However, things had been going great so I wasn’t worried about the short-term cash crunch. I assumed I would make it back in short order.

But something happened the October before that election. People stopped buying cosmetic surgery. It was weird—one day they just stopped.

I learned later that this phenomenon often occurs in the luxury sector right before elections. People don’t like to make big decisions when they feel like there is uncertainty of any kind in the air.

Whatever it was, it was killing me. Suddenly I had all these bills and mortgages and for a moment there, I was scared that I was going to lose it all.

Luckily the election came and went and things normalized but I promised myself that I would never let that happen to me again. From that day forward, I would never rely on a single source of income.

And since that time… I have not. In fact, I don’t feel comfortable unless I have at least three solid sources of income. I think of my income sources like a three-legged stool. If there is a problem with one of them, I feel very unstable.

I may sound paranoid, But, the funny thing is that I don’t think most people realize how tenuous their financial circumstance is. If you have a job and you lose it, would you be ok? I don’t care if you are a doctor or a small business person. No one source of income is bulletproof. So you have to have a plan B.

If you listen to this podcast, you might already have this kind of mindset and you might already be looking for opportunities.

And I have to say that this week’s episode of Wealth Formula Podcast really got my wheels turning. If you have any extra space in your house or an empty lot somewhere, you could be sitting on a goldmine.

Find out how you might be able to turn some useless space into some serious cash by listening to my interview with the co-founder and CEO of neighbor.com

Show Notes:

11:18 How to Make Money with Your Empty Space

15:51 How They Mitigate the Risks and Liabilities

22.43 Limitations and Law Restrictions

26:01 How Far Has neighbor.com Gone?

27:54 Have Multifamily Investors Tap Into This Space?

420: Realtors Make Legal Settlement: Changes Made to What YOU Pay! Mar 31, 2024

The cost of real estate transactions affects everyone regardless of whether you invest in real estate or not. Why? Because the cost of the transaction will ultimately be included in the price of the real estate.

One of the biggest costs in a real estate transaction is the commission paid by the seller. In the last several years, the way that commissions have worked at the residential level is that the seller’s broker collects the commissions and shares them with the buyer’s broker.

However, that paradigm is about to change as part of a massive settlement between home sellers and the National Association of Realtors (NAR).

The issue at hand: sellers don’t think they should be paying for brokers who are not working for them. The courts have agreed and in order to avoid massive ongoing litigation the NAR has decided to change the way it does business.

These changes will affect real estate investors and homeowners alike. Tune in to this week’s Wealth Formula Podcast to get all of the juicy details on how!

Show Notes:

04:17 The Conspiracy

07:14 The Lawsuits

10:49 The Changes

19:31 The Implications on Real Estate Prices

23:35 The Result?

24:36 The Opportunities

29:16 Will there be less realtors?

418: Using Math to Your Advantage Mar 17, 2024

In the long run, math is pretty much always right. That’s why insurance companies are so profitable. They make predictions using the law of big numbers.

Math can predict pretty much anything. Even Sports! I just re-watched the movie Moneyball about how the Oakland A’s made an improbable run in major league baseball in 2002 by leaning less on star players and heavily on analytics generated by a nerdy Yale economics major.

The genius of applying mathematical principles isn’t confined to the boardroom or the baseball field; it seeps into our everyday lives in ways we might not initially recognize. Beyond the high-stakes world of sports and finance, mathematics offers tools that can help us navigate daily decisions and challenges, often without us even realizing we’re employing them.

Math doesn’t just predict outcomes; it helps us make more informed decisions, maximize our resources, and enhance our daily lives. Math isn’t just about numbers and equations; it’s a vital tool that, when applied, can solve practical problems and make everyday tasks easier and more efficient.

And of course, math can and should be used in your investment choices. This week’s guest on the Wealth Formula Podcast explains how to do this and more.

Show Notes:

06:04 Are people bad at predicting the future?
09:10 Can technology help us predict the future better?
11:46 Why is it so hard to predict the future?
14:16 How do Psychics know about your life?
16:42 Base rule
21:02 When should you avoid using math?
22:39 Math for medicine

417: Market Update from a Former Sovereign Wealth Fund Manager Mar 09, 2024

I feel like I am going through another major transition in my life. I turned 50 last September—a fact that I deliberately chose not to publicize.

I hate to admit it, but much of my behavior is stereotypical divorced midlife crisis stuff. I got a Ferrari, I’ve been working out incessantly and…I’ve been considering adding publicly traded equities to my portfolio.

The last one might be the biggest surprise to you and to me. For the last decade, Wealth Formula has consistently bashed the stock market. What changed?

Well…the last two years have not been particularly kind to me financially and it is because of my 80% real estate investment portfolio.

Rising interest rates disproportionately affect the real estate markets because they are so heavily dependent on debt. That’s why economists keep talking about how the economy continues to fare well while we real estate investors feel like it’s 2009.

Don’t get me wrong. I am not going full-on stocks, bonds, and mutual funds. I have made my money in real estate and that will continue to be my alpha. And despite a down market, I am WAY ahead of where I would be, had I been a traditional investor using a money manager. No doubt about it, real estate has made me wealthy over the last 15 years despite the recent hiccup.

I’m just thinking about taking lessons from institutional investors. Perhaps it’s middle age, but the idea of a more balanced, less volatile portfolio sounds appealing. Right now, I have nearly zero exposure to publicly traded stocks. Maybe that number should be closer to 25%? Maybe I should be in some kind of “all-weather portfolio?”

Remember, personal finance should be personal. You’ve got to think about your goals and where you are in life. You have to treat your investment portfolio like you are deploying money for your own family office.

Zulfe Ali knows a lot about risk and managing portfolios. He does that for family offices and high-net-worth individuals like you. He’s different from your usual financial advisor because he recognizes the importance of alternative assets in a portfolio—something he learned from running a multi-billion dollar sovereign wealth fund in the Middle East.

On this week’s episode of Wealth Formula Podcast, I speak to Zulfe not only about investment strategy but also get his take on the current economy. Having a guy with his credentials giving us a market update is extremely valuable so make sure to tune in!

Show Notes:

13:39 What’s been going on with the economy?

16:15 Why the interest rate increase did not result in a recession

19:02 Outlook for interest rate

26:35 The inverted curve

35:11 Wealth preservation

41:58 How does Zulfe approach high-level portfolios?

416: Artificial Intelligence: The Mother of All Technologies Mar 03, 2024

In the latest surge of technological evolution, one titan stands out, reshaping our landscape with the silent swiftness of a revolution: Artificial Intelligence, or AI. It’s a term that sparks a spectrum of emotions, from exhilaration at the dawn of a new era to trepidation about the unknowns it brings along.

As we stand on the precipice of this bold new world, it’s impossible not to marvel at how AI has already begun to weave its threads into the fabric of our daily lives. From the simplicity of asking Siri for the weather forecast to the complexity of algorithms that predict stock market trends, AI’s footprint is undeniable.

Yet, what truly fascinates me is the myriad of opportunities it unfurls for us as investors. It’s not just about the automation of tasks or the efficiency of operations; it’s about the doors it opens to new markets, the insights into consumer behaviour, and the predictive power that can guide our investment strategies with unprecedented precision.

Reflecting on this, I’m reminded of a story that perfectly encapsulates the transformative power of AI. Just a few years ago, a startup leveraged AI to analyze satellite images, predicting crop yields with such accuracy that it revolutionised the agricultural commodities market.

Investors who could once only rely on historical data and often inaccurate forecasts found themselves with a crystal ball, giving them insights that were previously unimaginable. This is the power of AI – turning the opaque into the transparent, the unpredictable into the foreseeable.

And yet, as we chart our courses through these uncharted waters, questions loom large. How do we navigate the ethical quandaries that AI presents? What does the future hold for jobs, and how do we ensure that this technological boon does not become a societal bane? How do we, as investors, harness AI’s potential responsibly and effectively?

To delve into these questions and more, I’m thrilled to welcome Professor Russell Neuman, a leading mind from NYU, specializing in media technology and its profound impacts on society. Russell’s deep understanding of the digital age and the evolutionary path of media, coupled with his insights into AI, makes him the ideal navigator as we explore the intersections of technology, media, and investment in the AI epoch.

So, join us as we embark on this journey, decoding the complexities of AI and uncovering the golden opportunities it presents to the astute investor. Welcome to a conversation that promises not just to enlighten but to illuminate pathways to prosperity in the age of Artificial Intelligence.

P.S. I asked ChatGPT to use my “voice” to write this email. Do you think it sounds like me? Curious what you think.

Show Notes:

03:40 How does AI work?
09:23 The dangers of AI
14:10 The benefits of AI
19:27 The future of AI
21:48 Singularity

415: Tax and Return: Judge Glock Feb 25, 2024

“I’m from the government and I’m here to help.” Ronald Reagan described those as the most dangerous words in the English language.

I generally agree with the Gipper who I have fond memories of extending back to the 1980 presidential election that I watched with interest as a kindergartener.

When the government gets too big, it gets dangerous and sloppy, and it costs too much. And like other monsters, it’s got to eat. It does this through taxation.

Now if that monster was lean, mean and efficient, it would be less scary. But this one is fat and keeps growing. Government begets more government which creates more cost and inefficiency.

What’s a better answer? Well, ideally, you would break the whole thing apart and put it back together in a way that makes sense.

Instead, a lot of the benefits that we get from those taxes are taxed themselves making you wonder what the point was in the first place.

When you take a step back and see what’s going on, it’s pure insanity. And to make you crazy, this week’s guest on the Wealth Formula Podcast exposes this problem with gory details.

Show Notes:

08:03 Robbing Peter to pay Peter

12:33 Where is the inefficiency coming from?

15:54 The origin of the tax and return scheme

17:51 How does this affect behavior?

19:48 How can we fix it?

21:45 The origin of the mortgage market

414: The Safest Double Digit Returning Investment in History? Feb 18, 2024

When I was fresh out of surgical residency and started to make some money, I started looking for advice on what to do with it.

One of the questions I had was about life insurance. I was a newlywed and had a baby on the way (now she’s in high school by the way). So, I started asking the guys I was working with if I should buy term or permanent life insurance.

One of the younger surgeons was a bit of a know-it-all. He had a lot of advice about everything and most of it was not good. His facelifts weren’t good either as I started revising them just a few months later.

Nevertheless, I listened to what he had to say and he told me quite confidently to “buy term and invest the difference”. In other words, don’t buy permanent life insurance. Stick to term life insurance and, with the money you don’t spend on permanent life insurance, throw it into the stock market.

The older guy had very different advice. It was 2009 and he was planning to retire until the financial meltdown kicked his butt. He told me he wished he had bought more permanent life insurance because that was pretty much all he had left.

And while his viewpoint was thought-provoking, I felt like I needed to do the opposite of whatever this guy suggested because I didn’t want to end up like him. So, I ended up buying term and didn’t think about it again until a couple of years later when I had started my own practice and was making a lot of money.

At that time, I was part of a mastermind with a bunch of high-net-worth business people. At some point, life insurance came up and several of them talked about premium-financed permanent life insurance policies.

It occurred to me that a lot of high-net-worth people actually were buying permanent life insurance despite what that know-it-all young surgeon told me.

So, I decided to look back into my options. What I discovered was that both of those doctors who were giving me advice viewed permanent life insurance as something that it did not need to be: a poor-yielding but stable investment.

The reason for that was that most professionals only get to see poorly designed policies that are primarily created to maximize commissions for those who sell insurance.

What they think of as permanent life insurance is not the permanent life insurance used by the rich. PERMANENT LIFE INSURANCE MEANS DIFFERENT THINGS FOR THE MIDDLE CLASS THAN IT DOES THE RICH.

The policies that the high net worth group had were designed very differently and optimized for investment purposes. In fact, in the high net worth world, these policies have a special name: LIRPs. That stands for life insurance retirement plan.

Permanent life insurance in this world plays a role in not only risk mitigation and estate planning but also retirement income and asset protection. The more I learned about these strategies, the more they became no-brainers for me.

The guys who taught me the most about this stuff are Rod Zabriskie and Christian Allen. They designed all my policies and now design policies for many of you as our Wealth Formula Banking partners.

I especially appreciate these guys because they approach these concepts with an open mind. Where some Life Insurance Producers push one product or another for various reasons, these guys have all sorts of options that fit different types of people with different goals and objectives.

Recently, they have seen a significant uptake in interest in life insurance products. Why? Well, the markets have been hurt by rapidly rising interest rates and people are looking for safe harbors. All you need to do is look at the Great Depression to see that permanent life insurance has been seen as a major safe harbor throughout history.

Given the uptick in interest in these products, I decided to have Rod on to remind people of what these products are and why various permutations of these strategies are right for different types of people.

As always, I found this to be a very interesting conversation and it left me wondering why I’m not doing more of this stuff right now.

Show Notes:

09:12 Wealth Formula Banking

19:03 The Wealth Accelerator

26:55 Battle of the Two Tribes

34:41 Rule of 72

42:20 Does life insurance get more expensive as you get older?

413: Social Security Scams and “Retirement” Planning Feb 11, 2024

Retirement means “ceasing to work”. In my case, retirement will describe me when I’ve died.

I understand retiring from a particular activity. Like how I retired from the practice of surgery about eight years ago. But global retirement sounds dire.

It is like admitting that you are of no real value to the world anymore. That your contributions are no longer of benefit to humanity.

I’ve always believed that the universe ultimately pays you what you deserve. If all you’re doing is playing golf, you aren’t worth a dime.

And imagine all of that knowledge, expertise and wisdom you accumulate over the years. You’re just going to waste that?

You’ve got to figure out a way to use it and keep going. At least that’s my philosophy.

As you may know, I have a podcast on health and longevity called Sapio with Buck Joffrey. I want us all to feel like 50 is just the beginning and I don’t mean the beginning of the end lol.

Get inspired. Dreams are not just for the young. As Bill Gates says, people grossly overestimate what they can accomplish in a year and grossly underestimate what they can accomplish in five.

Ok…that’s my rant for today. Let’s get back to reality. I know people need money when they get older and social security is one of the sources.

To be honest, I don’t know much about social security so I thought I would interview someone on the topic. My guest this week on Wealth Formula Podcast was on the “60 Minutes” show recently uncovering social security scams so I thought he might be a good person to listen to.

So… if you’re interested in the money the government owes you when you get older and may or may not get it, make sure to tune into the show.

Show Notes:

04:52 How exactly does social security work?

10:56 Social security: a scam?

20:02 Will social security disappear?

21:36 Clawbacks of social security

29:05 Money Magic

412: Dual Citizenship: Plan B? Feb 04, 2024

The two most powerful motivations for behavior are fear and greed. If you haven’t thought about that before paying attention to the kinds of messaging you hear especially in the alternative asset podcast ecosystem?

At the risk of offending gold bugs, how many times have you heard someone who sells precious metals on a podcast talking about the demise of the United States and the inevitability of the Zombie apocalypse? Think that’s just a coincidence?

A couple of weeks ago, I had on a gentleman who wrote a book on Ray Dalio, the legendary hedge fund manager whose fund has not beaten the S&P 500 in years.

Turns out that Mr. Dalio has been predicting the collapse of the American economy for three decades now. Maybe he believes it. I don’t know. But one thing’s for sure, it works very well for Ray Dalio’s company.

Ultra Wealthy families don’t care about big returns. They care about not losing money. Beating the market is just an added plus. If Ray is telling people that the world is going to hell and he manages money then maybe he knows how to best protect it? That’s the logical conclusion, right?

There are also people out there talking about the need for a second passport in case the US implodes. After all, we have a divisive political system and enormous amounts of debt.

Again, maybe I’m missing something, but the US is still the biggest economy in the world with by far the highest GDP. We have the best Universities in the world and the strongest military. And if we can get through 1968, we can get through 2024.

So, in my humble opinion, a plan B is not going to get you out of harm’s way. Because if the US goes down, there will be no place to hide.

But, there are certainly other reasons to get a second passport. Maybe you just want to make it easier to travel to certain countries. Maybe you want to benefit from the low cost of healthcare. Or, maybe you just want to diversify your wealth and mitigate currency risk. If you’re willing to move to Puerto Rico (which I am not), there is even a huge potential tax play.

My advice…whatever you do, just don’t get scared into it. It certainly sounds kind of fun to be a Jetsetter and maybe there is sound financial reason to do it as well. Consider it, but for rational reasons.

With all that being said, check out this week’s episode of Wealth Formula Podcast and learn the ins and outs of foreign citizenship. Let me know if you decide to do it!

Show Notes:

08:24 Why consider dual citizenship?

11:17 Benefits of an EU passport

12:48 A second passport for retirement and healthcare

13:54 Financial benefits of dual citizenship

17:10 The challenges

19:17 Dual citizenship by relationship

411: Heads I Win Tales You Lose: The U.S. Banking System Jan 28, 2024

The challenge with investing is that you can do everything right and still lose. Unfortunately its supposed to be that way otherwise everyone would take the biggest bets possible all the time and always win. That’s just not reality.

In good times, it is very hard to anticipate what could happen if the unexpected occurs. Over the last 24 months, we saw interest rates rise at a slope never before seen in the US economy. This was just a few months after the Federal Reserve called inflation “transient” signaling that it would not raise rates.

In hindsight, the subsequent rise in interest rates to curb inflation is all clear now but I don’t remember hearing anyone talking about the scenario before it happened.

As a result, many including me lost money and continue to hold our breath as rates start to level out. As much as we hate it, this is the way the system is supposed to work.

The thing is, all of what we are experiencing is going to happen again in one shape or another. Over the next few years, those with ice in their veins will buy when everyone else is scared. And hopefully, they will remember what this feeling we all feel now feels like and sell when things feel too good to be true.

As Sir John Templeton put it, the most dangerous words for an investor are “this time, it’s different”.

It would be easier to accept this fact of investor life if it applied to the big boys as well. But it doesn’t. 2008 was the extreme example. The big banks lost big bets. Had those bets come to fruition, they would have made lots of money. But they didn’t win those bets. And the taxpayer paid for their losses and all of the lawmakers said it would never happen again.

But it did. In 2023, the taxpayer stepped in to bail out multiple regional banks. This time, those banks weren’t even being irresponsible. They were investing in a way that would be deemed conservative. Yet, they too were the victim of unparalleled rate hikes by the Fed.

Lucky for them, they were banks and not individuals like us. What happened with those regional banks and is it likely to happen again? My guest on Wealth Formula Podcast this week is a brilliant Professor at Stanford who was brought in to investigate the regional bank failures in Silicon Valley.

When she talks, the government and people like Jamie Dimon listen. See what she has to say about the current state of the banking system and how it affects you.

Show Notes:

08:29 What is wrong with the banking system?

11:34 What went wrong in Silicon Valley?

13:58 How do FDIC rules work?

24:20 What should have been done in 2008 to prevent this from happening again?

28:28 Will what is happening to Silicon Valley happen to the rest of the country?

31:44 Is it still risky out there?

410: Is Ray Dalio Really Who He Says He Is? Jan 21, 2024

My social life sucks. I moved to Montecito in 2017 from Chicago a married man with 3 children. When we got here, I didn’t know anyone.

Luckily, I had my family and was plenty entertained by my three little girls. My now ex-wife also served as social coordinator to make sure we had things to do.

Then with beginning of Covid, my marriage came to an end. Since moving to Montecito, I had been working from home on businesses that had become very successful but I hadn’t worked on my social life at all because that had been outsourced.

So I entered Covid isolation with almost no community or life outside of business. Needless to say, it was lonely. The only good thing that came of it was a lot of success in those businesses that occupied my time.

I used Covid as an excuse while it lasted but the truth is that my social life still sucks. I have not been successful in that aspect of my life. So, I’m not a good person to tell you how to create a successful social life and will not be writing a book about it anytime soon.

So why am I telling you this? Is this some kind of suicide letter? No. I’m too busy with my longevity podcast for that. What I’m trying to do is to simply illustrate that you can be wildly successful in one aspect of your life and an abject failure in other parts.

The funny thing is that for anyone successful, it is very difficult to truly assess what they are good at and what they are not from the outside.

Take a look at Tony Robbins. Is he a success? He’s a great communicator. He’s helped a lot of people and made a lot of money. But he’s been married multiple times and who knows how his relationships are with his children.

But if Tony Robbins wrote a book on marital a bliss, it would be a New York Times bestseller. Why? Because he’s Tony Robbins and he is a successful guy that people want to listen to. But, like the rest of us, he’s far more successful in certain parts of his life than others.

Similarly, hedge legendary hedge fund manager Ray Dalio has written multiple books on “principles” for investing and for life. Dalio is certainly as qualified as anyone else to talk about money.

But why would we assume that his success translates over to anything else? In fact, there are plenty of people who have worked with and for him who consider his principals outside of investing to be a failure at best and downright fraudulent at worst.

So why would people buy books by Ray Dalio that don’t involve money? Because, again, he’s a hugely successful person and people want to learn how to be successful.

The challenge for everyone is to look at any of these god-like figures and to understand that they are human with all sorts of flaws. And while we may be able to learn some things from them in which they excel, we shouldn’t translate success in certain parts of their lives to suggest that they’ve got it all figured out.

My guest on Wealth Formula Podcast today wrote a book on Ray Dalio that tells the story of a man who may be quite different that the image he has created for himself. It certainly has pushed a button for Ray Dalio as he has threatened to sue the author and has thrown back fiery accusations about him.

It’s a fascinating story that you are not going to want to miss. Tune in to this week’s Wealth Formula Podcast as I interview Rob Copeland, the author who has thoroughly pissed off Ray Dalio!

Show Notes:

00:08:29:06 Who is Ray Dalio really?

00:13:15:03 What made Ray Dalio a successful hedge fund manager?

00:14:53:09 Alpha vs Beta returns

00:18:05:22 The Dark side of Ray Dalio

00:22:42:19 Can Ray Dalio really predict the zombie apocalypse?

00:27:12:16 Getting sued by Ray Dalio

409: You Will Own Nothing and You Will Like It: Carol Roth Jan 14, 2024

As you may know, I have three daughters aged 14,11 and 8. The oldest, Camilla, is now in high school.

For those of you who have been listening for me for a while, yes, that was the little girl who did an introduction for episode 100. We are all getting older by the minute.

Anyway, recalling that it was at around her age that I began to think about the world in a greater context than simply ice hockey and food, I have begun trying to have more meaningful conversations with her.

Recently, I decided to talk about the political science definitions of conservative and liberal to help her start understanding the basics of political theory.

I told her that conservative ideology values the individual and advocates for small government. I quoted Ronald Reagan who once said, “The nine most dangerous words in the English language are ‘I’m from the government and I’m here to help’.”

Liberal ideology, on the other hand, puts greater value on the collective whole of a people over the individual. In such a belief system, the emphasis on equality trumps individual achievement and focuses on the redistribution of wealth via government services to serve everyone.

While you know that I have a bent toward conservative ideology, I did not try to persuade her one way or another. I was just trying to teach her the difference.

My goal for her was to simply think about her own opinions and share them with me. But she wouldn’t. She got very uncomfortable. And, when I pushed her on why, she admitted that it had to do with the fact that her mother and I don’t agree on some of this stuff.

The funny thing is that while her mother and I certainly do disagree on some political issues, we never fought about it and it was never an emotional issue. But these days, it seems that political disagreement means that you can’t be friends or family anymore. Disagreement has been replaced by disagreeable.

That’s a shame because these discussions are incredibly valuable for people to discover their own true values rather than to simply cling to tribal political party instincts. Sure I’m a conservative, but I have plenty of disagreements with the current “conservative” Republican Party. For example, the party has shifted away from fiscal responsibility, free trade, and civil liberties—all of which are tenets of true conservative ideology.

Having more open discussions about politics without emotion would be good for everyone. It would also help people to understand what is happening on the global stage.

While America has been the Mecca for the individual since its inception, it is starting to move in the direction of a more liberal global arena that values personal achievement and success less than the whole. The growing popularity of political figures such as Bernie Sanders in the last election cycle supports that.

My guest on the Wealth Formula Podcast is a best-selling author who has been sounding the alarm on the coming of this new world order where you will have everything you need but nothing will be yours.

Is she being an alarmist or is this a real concern? Decide for yourself on this week’s episode of Wealth Formula Podcast.

Show Notes:

00:08:52:20 Movements that are trying to stop personal wealth creation

00:12:18:02 Players in the financial world war

00:14:56:08 Private ownership = wealth creation

00:17:16:01 How is Wall Street working against us?

00:24:13:18 Thoughts on the wealth tax

408: Boring is Good: The Case for Self Storage Jan 08, 2024

For those of you who have participated in our self-storage offerings in the past with Reliant Real Estate, you know that you can make a lot of money in this space. One of our deals, while not planned this way, nearly doubled investor equity in less than a year.

Those kinds of returns are sexy but self storage itself is NOT sexy at all. It’s just where people keep there stuff when there’s no room for it in the house. But in times like these, boring is good. In fact, when it comes to business, boring is a very good quality in all seasons of the business cycle.

Self-storage facilities have historically shown resilience during economic downturns. Unlike other real estate investments, they often experience steady demand even in challenging economic conditions, as people downsize, relocate, or seek temporary storage solutions.

Everyone needs storage space whether in urban areas where living spaces are smaller, or in suburban and rural areas for personal or business use.

And from the standpoint of the owner of these facilities, it takes advantage of one of the major characteristics of mankind—inertia.

Do you have stuff in storage? I do. How badly do I want to move that stuff to another storage facility in order to save $10 per month? Not nearly enough.

That’s why those rents creep up over time without losing much in the way of occupancy. It’s a great business model if executed well.

Reliant Real Estate has done it well for several years and, although I am not partnering with them on their current fund, I am investing in it and promoting it for them as I think it represents a really good opportunity with minimal risk.

This week on Wealth Formula Podcast I wanted to make sure I got Kris Benson, Reliant’s Chief Investment officer on the show because there are just a few weeks left before the fund closes and I wanted to remind you of that while reviewing some of the key elements of this unique real estate asset class.

Show Notes:

00:04:04:09 The story of self-storage

00:06:56:17 The inertia behind the self-storage business

00:13:51:17 How has the run-up of rates and inflation affected self-storage?

00:16:55:15 How does debt work in self-storage

00:19:51:02 Institutional vs. mom-and-pop

00:23:12:10 The current reliant fund opening: https://reliantfund4.com/

407: New Year, New Business? Dec 31, 2023

Wealth Formula Nation,

Happy New Year! I have a feeling that 2024 is going to be a good year for us.

I think we are going to pick up quality assets at a discount like it’s 2012 and liquidity will come back to the real estate markets.

I’m also eager to develop our own investor platform into a more diverse investment source. Real estate will always be our bread and butter but there will also be other opportunities in which to invest that will be vetted by our world-class due diligence team.

You’re going to new opportunities in sectors like commercial aviation and even business mergers and acquisitions led by Zulfe Ali who used to do that for a sovereign wealth fund.

With the New Year, you might also consider whether you might want to start a business of your own. As you know, I am a strong advocate for business ownership.

And while doing a creative start-up is not everyone’s cup of tea, there are an increasing number of ways to get involved with business utilizing the skills you do have.

One of those options is franchising. We’ve talked about franchising on this show before but I recently met a guy who wrote the most popular book on franchising ever published.

He didn’t try to sell me on franchising at all. Frankly, I left the conversation thinking he probably talked me out of it. But that’s also why the coaching clients he does have seem to do as well as they do.

Is franchising right for you? I think this episode of the Wealth Formula Podcast will really help you figure it out using some very good self-assessment questions. If it is, this could be one of the most exciting years of your life as you embark on a new business venture.

Show Notes:

00:05:50:22 What exactly is franchising?

00:10:36:15 Stats on franchising

00:14:48:02 The personality type that fits franchising

00:21:16:21 Does franchising have to be a full-time job?

00:26:47:09 The scalability of franchising

00:33:14:19 What are people franchising these days?

00:34:34:15 Green flags and red flags

406: Wealth Without Wall Street Dec 24, 2023

When I first started podcasting a decade ago, I was very anti-Wall Street. But what does that even mean? I guess I hadn’t really contemplated that.

My show started not long after the financial meltdown of 2008-2009. For many of us, the greed that was unveiled during that period was eye-opening as we saw major institutions fold losing ordinary people their life savings yet the architects of the disaster floated out of harm’s way with golden parachutes worth 100s of millions of dollars.

That, to me, was Wall Street and I wanted nothing to do with it. Actually, to be honest, I didn’t have anything to do with it anyway. I had just finished surgical training and didn’t have any money to lose.

But…It did emphasize a concept to me that I grew up with anyway. As the son of a scrappy immigrant slumlord, I knew that there was a different way of creating financial success than simply handing it over to wealth managers that were part of the traditional financial “Wall Street” paradigm.

These days I think I’m a lot more level-headed in my views. I don’t see traditional public equity markets as empirically evil. I am also acutely aware that investing outside of Wall Street has its pitfalls too. You can and will lose money investing outside of Wall Street as well. And while you may avoid the greedy CEOs responsible for the mortgage meltdown in 2008, you also have to avoid the charlatans that inhabit the wild west that is private investing.

What do I mean by that? Well, the economy did a number on a lot of us and we lost money fair and square so to speak. That’s going to happen. But there were also multiple Ponzi schemes and downright terrible business models that were poorly vetted by unsophisticated capital aggregators as well.

The point is that there are landmines everywhere. Pick your poison. The good news is that you just need to win most of the of time. That’s what I have been able to do over the past decade and as a result, by most measures, have become a financially wealthy individual.

That said, I’m always striving to become better as an investor and a lot of that revolves around understanding my own strengths and weaknesses and trying to especially compensate for weaknesses.

For example, I know that I want to diversify my holdings outside of real estate a bit more. I am about 80 percent real estate now. So I’ve gotten Zulfe Ali involved with our platform who is world-class at evaluating businesses as the former chief investment officer for a sovereign wealth fund. This will be good for me and it will be good for Investor Club in the coming years.

I also am thinking about potentially starting other businesses—possibly a franchise or some other low-time commitment endeavor. Why? Well, it’s fun for me and I know that I have a track record of success in business. And, again, I could use the diversity.

Remember, personal finance is personal. There’s not a single recipe for success. The principles of wealth building are pretty constant but the ways people generate the cash to build that wealth is limitless and I encourage you to consider taking a deep dive for yourself on this topic.

You may find that remaining purely passive as an investor is what suits you best and that simply diversifying your assets is all you need. On the other hand, you might discover an inner entrepreneur who wants to come out and shake things up a bit.

My guests on Wealth Formula Podcast today emphasize the differences between investor types which I think might be useful as a topic on which to drill down a bit. They call their show Wealth Without Wall Street and we discuss this and many other interesting concepts on this week’s episode of Wealth Formula Podcast.

Show Notes:

00:10:53:05 When did Wealth Without Wall Street begin?

00:12:21:13 What is the business behind the podcast?

00:14:18:12 Who is their avatar?

00:17:28:10 Owning a job is harder than working one

00:19:00:14 What is their primary content?

00:21:03:20 What have they learned along the way?

00:25:09:23 The analysis tool they use

00:34:25:05 Advice for people who don’t have money to invest

00:38:36:04 Frameworks for investing

405: Another Perspective with the Cash Flow Ninja Dec 18, 2023

During college, I spent a summer working in a laboratory at the University of Chicago where my biochemistry mentor did his PhD. The lab studied prostate cancer and was the legacy of Charlie Huggins, a surgeon who won the Nobel prize for discovering the testosterone dependence of most prostate cancers.

The guy who took over that lab was his protege Shutsung Liao who did some trailblazing work of his own. He was brilliant and for a young biochemistry geek like me was fascinating to be around. He thought differently than most. His thoughts were original.

And that’s what he demanded of people in his lab. In fact, one of the particularly unusual philosophies he had for his postdocs was “do not read too much”.

He felt that reading others work had a role in learning what was known but also could be detrimental in that it could unduly influence the direction of one’s own thoughts. In other words, he didn’t want his postdocs to simply follow and expand on the ideas that others were proposing. He wanted them to have their own ideas.

That idea has always stuck with me and I was reminded of it the other day when a fellow podcaster asked me which podcasts I listen to. He, of course, assumed that I listened to a bunch of other personal finance shows.

I listed my top shows for him which included Purple Daily (Minnesota Vikings Football) and The Drive with Peter Attia which is about health and longevity.

The truth is, I don’t listen to any other investing shows. I used to, but I realized it was a little bit of an echo chamber in the alternative investing podcast ecosystem. And just like Dr. Liao warned about in that cancer lab, I started just saying and believing what other podcasters were saying.

I’m fortunate enough to be interviewing economists and other smart people every week so I’d rather formulate my own ideas based on what I learn from them. One thing is clear, they don’t agree with each other!

For those of you who listen to me, I highly encourage you to listen to others—especially those who do not agree with me. It’s important to hear the ideas of multiple sources when it comes to something that you want to know about.

Economics is not a hard science. It is a social science based on theory. Similarly, personal finance is…personal. So it’s best to learn many different perspectives and philosophies out there and see what resonates with you.

And sometimes, it’s good to get together with others and compare notes. And that is exactly what I’m going to do on this week’s episode of Wealth Formula Podcast. I am going to sit down with another well-known financial podcaster and see what he’s been hearing on his end.

Exposure to different thoughts is critically important when you make important decisions in your life, like what to do with your money. So make sure to listen in to this week’s interview with MC Laubscher aka The Cashflow Ninja and see what he has to say.

Show Notes:

00:09:34:09 Where are we in the economy?

00:19:56:18 What to look for as indicators of how the economy is doing?

00:24:51:06 Permanent life insurance in volatile times

00:32:16:16 Don’t let losing make you too scared to invest

00:37:05:09 Changes in tax code

00:47:02:06 Diligence in the cashflow world

404: An Update From AHP Servicing With Jorge Newberry Dec 14, 2023

In this bonus episode of Wealth Formula Podcast, Jorge Newberry shares with us some background on what’s been happening with AHP as well as his perspective on real estate and the debt market.

403: The Tax Case in the Supreme Court That You Must Know About Dec 10, 2023

You know what drives me crazy? Politicians talking about how rich Americans need to start paying their “fair share”.

First of all, they aren’t really taking about the rich. They are talking about you—the high paid professional.

To be clear, if you are making $400K-$800K per year as a W2 wager earner, you’re doing well for sure. But you aren’t rich. Yet, you are the one that gets vilified and gets destroyed by the tax code the most.

And let me ask you a question. Do you think you are paying your fair share of taxes? In California, you’d be paying a tax rate of over 50 percent. I bet you don’t think that’s fair either. At least you can agree with those politicians on something!

Then there is the estate tax. For those of us who have done well in our lives and paid taxes along the way, there is an extra kick on our way out. Its punitive—again taxing over 50 percent on money that has already been taxed.

Do you think the government deserves that money or your family? I think I know the answer. And if you think that you aren’t rich enough for the estate tax think again. Those numbers are coming down next year and there are many who would like to see it start as low as $1 million estates. This will affect you if you don’t plan for it.

Luckily there are groups like the National Taxpayers Union (NTU) Foundation out there that are looking out for us.

In fact, there is a case about to go in front of the supreme court shortly that could have profound affects on your investments. The case is called Moore v U.S. and it is something you should absolutely know about.

To help you understand what the stakes are, I invited NTU member Joe Bishop-Henchman to explain it to us on this week’s episode of Wealth Formula Podcast.

Show Notes:

00:07:47:12 Moore VS U.S.

00:10:21:01 The main arguement

00:15:17:18 What happens when either side wins?

00:20:10:24 What is defined as realised gain?

00:24:37:07 Implications of the ninth circuit court case

00:29:48:10 When can we expect a decision?

402: Investing with Benefits: Real Stories from Wealth Formula Nation Dec 03, 2023

As the end of the year approaches, many of us are thinking about ways to mitigate our tax liability for 2023. Unfortunately, this year there is not a whole lot in terms of options.

The IRS has clamped down on syndicated conservation easements and anything resembling it. If you are being talked into something like that, I would suggest you be very careful. Anyone selling them at this point is not looking out for your welfare.

Similarly, although captive insurance is a legal right of every American, the IRS has made it its mission to audit them. It’s almost as if the IRS has become a branch of government that ignores the legislative process completely.

So what can we rely on? Oil and gas? No thank you. I’ve never made money in oil and gas and would have been better off just giving my money to charity. The space is also ripe for charlatans.

At this point, you are pretty much left with investments that will give you some depreciation and that only helps you if you have passive income to offset.

Real Estate opportunities have been far and few between. We have had one in 18 months and that is currently on waitlist. If you are an accredited investor feel free to check out that webinar at JoffreyCapital.com. You might get lucky and get in.

So, what’s left? Well, prepaying things for next year is not a bad idea. I used to prepay advertising for my now defunct cosmetic surgery office. If you are into deferred accounts that will give you some relief as well.

There is one more option and that is simply to invest your money without significant tax benefits. Sometimes, as much as it pains me to say this, paying the tax is the right thing to do.

After all, you can safely invest in a fair amount of stuff right now that is yielding pretty well. It’s just not tax efficient. For example, you can put your money in CD’s and get over 5 percent.

Or, like me, you focus on life insurance products like Wealth Formula Banking or the Wealth Accelerator (hyperlinks to WFB site).

There are many advantages to these kinds of policies that have been characterized as “investing with benefits”. The benefits are often significant and under-appreciated as I have tried to point out on numerous occasions.

But don’t take it from me, take it from others who are doing the same thing and see if there is a line of reasoning resonates with you.

These types of policies should probably be apart of every portfolio in my opinion. And in this week’s Wealth Formula Podcast you’ll hear why—not only from me but from other Wealth Formula community members.

Show Notes:

00:07:06:15 What is Wealth Formula Banking?

00:13:19:07 What are the reasons why investors have chosen Wealth Formula Banking?

00:21:57:20 How have investors been using Wealth Formula Banking?

00:30:30:19 Amplifying your retirement strategy

00:47:57:06 The Wealth Accelerator

00:57:10:22 Advices from fellow investors

401: Real Estate Market Trends Nov 26, 2023

A lot has happened over the past year in real estate. It goes to show how quickly things can change.

Unless you have been living in a cave, you know that interest rates went way up really quickly. When that happens, housing typically goes down in value significantly.

Oddly enough, in much of the country, that wasn’t quite the case. Why? Well, there wasn’t much inventory. Record LOW rates created both a frothy market and a huge amount of liquidity in the housing market.

People thinking of selling at that time sold. People thinking of buying were able to buy much more expensive homes than they normally could because of cheap money. And many of them locked those rates in.

When there was a huge increase in interest rates, liquidity in the markets went way down keeping prices still elevated because of a supply and demand imbalance.

A similar story was seen in investment real estate that is largely driven by cap rates. The difference being that much of investment real estate is purchased on floating rates. And, as many of us have seen, that has resulted in forced selling.

Anyone who does not have to sell right now is not selling. Those who are forced to sell are losing money. This period in time for real estate investors will be emblazoned in our memories the way the financial crisis of 2008-2009 is. Hopefully some of us will also take advantage of what is occurring like people did in 2010.

I anticipate 2024 will be a time with blood in the streets as many rate caps are expiring. This will be a great opportunity to pick up properties at significant discount. And those who do will very likely be rewarded for the ice in their veins.

Why? Because predictions of lower interest rates in 2025 are overwhelming. If those predictions come true, it will create a situation where the investment real estate market becomes frothy again. People unable to hold on to properties is 2024 will be the biggest losers because they didn’t do what they had to do to stay in the game.

I know that staying in the game is not easy. For many of you, this period in real estate time has been the first and only time we’ve ever experienced loss. We know rationally, that, investors are not supposed to win every single time but that’s what we witnessed for the past 14-15 years and we got used to it.

But real estate is like every other asset in that it has cycles. This cycle ended abruptly and violently but another one is about to start.

In this week’s episode of Wealth Formula Podcast, you’ll once again hear from an expert on the real estate market from the National Association of Realtors.

When you hear what he has to say, along with other economists, you will understand why the mantra in the real estate investor ecosystem continues to be, “stay alive until 25”.

400: Trying Not to Run Out of Gas in Your Tesla Nov 19, 2023

When I moved to Montecito a few years ago, I was amazed at how many people didn’t seem to work.

To be clear, we don’t have a homeless problem out here. We just have a lot of people who own businesses. And it’s not quite true that they don’t work. They just don’t have regular hours so there’s a disproportionate number of people hanging out during the day.

Of course, I myself am a business owner and my businesses have experienced their fair share of pain over the last several months. In fact, my cosmetic surgery business in Chicago finally went out of business after almost 15 years.

And I know it’s not just me. Everyone is slow and it seems like there are layoffs going on everywhere—lots of skilled people are losing their jobs.

So I have been racking my brain trying to figure out why the economy is supposedly doing so well. I have come to the conclusion that we are not looking at the right indicators for the time that we live in.

It’s like we bought an electric car but are still watching to make sure we have a full tank of gas when we should really be paying attention to the battery charge indicators.

We’ve always judged the economy in terms of two major indicators: jobs and GDP. And those numbers haven’t looked that bad even after a year of oppressive rate hikes.

But what does the jobs report really tell us? Is it telling us that many people left the workforce during COVID-19 and never came back? After all, you are only considered unemployed if you’re actively trying to work.

And when you see all those new jobs added to the jobs report every month, is that taking into consideration the additional part-time jobs people are taking just to make ends meet? The numbers we get make no distinction.

The bottom line is, I am convinced we are missing something that will become very clear within the next 12 months.

My guest on this week’s episode of Wealth Formula Podcast believes this too. Believe it or not, he’s an Austrian economist I discovered on TikTok. And, because of him, I now have a TikTok account and you probably will too!

Show Notes:

00:05:59:05 Who is Peter St Onge?

00:09:20:23 Is there such a thing as true conservative economics in the modern political system in the US?

00:13:44:01 Is the economy actually doing well?

00:16:38:18 Why is the job rate going up when people are getting laid off?

00:21:38:03 Why high GDP might not suggest a strong economy

00:25:57:21 Statistics on Bankruptcy

00:28:50:18 When is the next recession coming?

00:35:40:04 Why have we not seen more regional bank failures?

399: Tax Mitigation Strategies in Real Estate Nov 12, 2023

It’s NFL season and I’m still glued to the TV despite my team’s rough start and the fact that we lost our starting quarterback for the year.

In case you don’t know, my team is the Minnesota Vikings and our starting quarterback was Kirk Cousins who just went down with a brutal Achilles tendon tear.

Kirk makes a lot of money—$30 million in 2023. Of course, when we think of professional athletes, we generally think of them as crazy rich so you might not be surprised.

You might be surprised to know, however, that the actual median salary in the NFL in 2022 was only $860,000 per year. I know for a fact that a lot of you Wealth Formula listeners make more than that.

You know what I think of when I hear numbers like that? I think about how much they must be paying in taxes. Kirk Cousins is probably paying at least $12 million of his salary in taxes. And those guys at the median salary level are probably paying out almost $400K. They are, after all, W2 wage earners.

Again, no one is starving even after paying those taxes but it certainly puts things in perspective. After all, it’s not really about how much you make. It’s about how much you get to keep.

Every person’s finances are like a small business. You have income coming in and you have expenses going out. A small business is going to do whatever it can to decrease expenses so it can keep more profit.

So, if you are a business, what is your biggest expense? Probably taxes. And if that’s the case, what are you doing to try to reduce those expenses and bring more money to your own bottom line?

To be clear, we aren’t talking about anything illegal here. As it turns out, there are plenty of things the government wants you to do that will help you save on taxes. My friend, Tom Wheelwright, calls the tax code simply a series of incentives.

That’s the smart way to look at it. As it turns out, your best way of saving on taxes tends to be through the way you invest. And, there is simply no industry that has more tax benefits than real estate.

I truly believe this and want you to understand why. If you choose not to act on this information, that’s fine. But at least know what you are missing out on so you can only blame yourself. I am always amazed at how extremely financially sophisticated individuals have no idea what they are missing.

This week’s Wealth Formula Podcast reviews some of the major concepts in tax mitigation via real estate investing. There’s something here for everyone including those new to the game. So make sure to tune in.

Buck

Show Notes:

00:09:30:01 How are people overpaying taxes?

00:10:34:14 How to get around active income with passive investments

00:18:55:22 Real Estate Professional Destination

00:21:19:24 Audit protection

00:22:29:07 Getting the benefit of being a Real Estate Profession through your spouse

00:24:25:19 Getting the benefit of being a Real Estate Profession with short-term rentals

00:25:29:15 Should I put my real estate in an LLC?

00:26:48:22 The role of a C-Corp

00:28:51:10 How to audit-proof your returns

00:30:45:18 Are you more likely to be audited if you are a Real Estate Professional?

00:32:24:16 How to use your kids to reduce tax

00:34:06:15 What is the cost segregation analysis

00:38:43:18 Upcoming new tax laws

00:42:34:21 Learn more about Keystone CPA

398: There’s More to Alts than Real Estate Nov 05, 2023

The world of real estate is kind of a cult. Members of this cult tend to think that pretty much anything outside of real estate is just a waste of money.

I used to subscribe to this religion. And, for the most part, I still kind of do. My portfolio is largely real estate and I truly believe it is the most tax-efficient consistent way of building wealth out there.

But it’s not the only way. I’ve made plenty of money as an entrepreneur and I know that you can make a lot of money in other kinds of business as well.

The key to making money in any of these endeavors is to know what you are doing. I know how to start businesses and I know how to make those businesses profitable, but I don’t really know how to buy them or know which business to invest in.

It’s good to know your weaknesses because they are often not insurmountable. If you don’t have the expertise, you just need to find someone who has it that you can trust.

That is the primary reason that we have partnered with Zulfe Ali in Investor Club. These days Zulfe is a broker-dealer.

But prior to that, Zulfe spent decades in mergers and acquisitions at the largest banks in the world and was the chief investment officer of a sovereign wealth fund in the Middle East that acquired multibillion-dollar businesses on a regular basis.

My goal in bringing him on board is to develop a broader platform of investments in the Wealth Formula ecosystem and, frankly, in my own portfolio. I want to create a platform where all of our investments are of institutional grade whether that be in real estate or any other asset class.

A platform like this for individual retail investors like us does not currently exist. I know that there are plenty of offerings outside of real estate that you see on a regular basis through the podcast ecosystem but I must tell you that I am wary of most of them.

Too many people have been ripped off because the people raising money are either unwilling or unable to do the level of due diligence needed to make sure that an opportunity is real or economically viable.

Hopefully, we can change that with what we are rolling out with the help of Zulfe. He introduced me to today’s podcast guests so I feel comfortable exposing you to them. These guys, in particular, are in the commercial transportation industry and this week’s podcast will focus on an asset class that you are probably unfamiliar with but is dominated by institutional money: the commercial airline industry.

This is one of the areas in which we are currently doing due diligence and my guests today have been identified as a potential partner for our group.

Make sure to tune in. This industry is fascinating and I believe worth consideration as a future addition to your portfolio. Start learning about it now.

Buck

397: Prenups and Postnups: Marital Finance 101 Oct 29, 2023

No one getting married thinks that they will ever get divorced. I can tell you that from personal experience.

Yet over half of American marriages end up in divorce. I was lucky in that I had an amicable break-up. Most of the divorces I’ve seen in the past few years have been ugly.

I have two friends finally get through divorces in the last two years. In both situations, the men originally offered what they thought were fair settlements that their wives rejected.

In both cases, the divorces lasted for years costing hundreds of thousands of dollars. And, in both cases, the wives ended up with LESS than originally offered.

But it wasn’t just the ex-wives who lost out. No one wins in an ugly divorce. The kids suffer and there is a huge emotional and financial toll to pay for both sides. The only winner is the divorce attorney.

Knowing this should be enough to convince anyone to have a prenup in place before getting married or even get a postnup in place after the fact.
But it’s not that easy. How do you even bring up a prenuptial agreement when you are in love with someone and planning a life together?

My guest on Wealth Formula Podcast specializes in this area of the law and has experience at the highest level of prenuptial complexity with celebrities, athletes and ultra high net worth individuals.

The issues, whether they are emotional or financial, are often the same and he has great perspective on how to approach these sensitive issues.

So, whether you’re married, divorced or just curious, make sure to tune in and learn the basics on prenups and postnups. LISTEN HERE.

Buck

396: Preparing for 2010 Oct 22, 2023

The financial meltdown of 2008-2009 feels like ancient history. And like tragedies that happened long ago, it feel more historical and less emotional.

I remember going to Pompeii several years ago and seeing people turned to stone from Mount Vesuvius erupting. It must have been horrific. But time has made it more of a museum than the scene of an awful natural disaster.

That’s the way most people look at 2008 as well—as ancient history. But for many it was a very emotional time. But those who stuck to their guns and took advantage of blood in the street thrived for more then a decade afterwards.

A very good friend of mine is an incredibly successful entrepreneur in the real estate space. At the time, he was building multimillion dollar houses for celebrities.

He was a household name in Los Angeles. Every famous person wanted a house that he designed. But like many successful real estate people, he got hit hard during that time and lost a lot of money.

It was also around that time that his focus was turning towards hotels. By 2010 he was seeing incredible opportunities on hotels and was looking to raise capital to take advantage of the market. But no one wanted to invest. Even though things were at a steep discount, people were just too afraid.

Fast forward to today, my buddy stopped trying to raise capital and ended up doing everything on his own. And now, he’s in the middle of a $100 million 1031 exchange. And that’s just one of his hotels.

That time for buying is around the corner again. 2010 is coming. Investment real estate is being hit really hard and its important to keep calm and wait for the opportunities that come before you.

My guest today is a new partner that I am going to ride the wave with when there is blood in the street. He’s been here before and has had a stellar record even in these tumultuous times.

In this episode you’ll see how he has not only survived but thrived in this market and also how he intends to take advantage of the coming distress.

Listen NOW!

Buck

P.S. Please note, there is an opportunity referenced in this podcast that can be seen at JoffreyCapital.com. This opportunity may not be available by the time this show airs, but check out the webinar for educational purposes at the least.

395: Tax Free Wealth and the Zombie Apocalypse Oct 16, 2023

I’m not a doom and gloom podcaster as a general rule. There are plenty of those out there predicting the zombie apocalypse.

However, I have to say that I’m pretty sure I’ve been seeing some questionable zombiesque characters running around town lately.

It has occurred to me, however, that most people are not seeing what I am seeing. After all, the job markets are humming along just great and inflation, while still high, has decelerated.

If you are a high paid professional, you are cranking away at your day job and nothing really seems that much different because a little bump in the price of groceries isn’t a big deal to you.

In fact, you might be irritated that your investments haven’t been performing well and wonder why.

But from where I am seated, I have to tell you, it’s kind of scary out there. The investment real estate market is in turmoil and there is significant amount of distress because of the steepest increase in interest rates in American history over the last year.

Real estate syndicators like me are all chanting the same mantra across the board, “stay alive until 25”.

The office sector of real estate is already bathing in blood. The majority of that debt is held by small regional banks. It is hard for me to believe that we won’t have further bank failures.

And it looks like we are about to have another war in the Middle East. What do you think that’s going to do to energy prices?

Guys…it’s kind of scary out there. Pay attention. 2024 is likely to be a very tough year and there will be pain. And the global economy is not the fault of one person or a single company so stop pointing fingers.

Now there is a silver lining to this all. As much as these transitional periods cause pain, they are also opportunities. Everyone successful says the same thing. Those who can overcome their own fear and can act rationally during this time will be in for the best investing years of their life.

In the meantime, take the time to make sure you’ve taken care of housekeeping items. Make sure your asset protection is in place. Make sure your estate planning is done and that you have adequate life insurance coverage. Do the mundane things that have to be done for proper personal finance plans.

Tax planning is part of that. And, if you haven’t really sat down and thought about how to mitigate your own tax liability, you should do that now.

My guest on Wealth Formula Podcast this week, Tom Wheelwright, is the smartest tax professional I know. Make sure to tune in to our discussion about taxes and his 5 decades worth of perspective on today’s global economy.

Buck

394: Beyond Real Estate: How to Cash Flow with Stocks Oct 08, 2023

My portfolio is not what most would call diversified. I am about 70-80 percent real estate, 10-15 percent permanent life insurance and about 10-15 percent higher risk stuff. My only stock exposure is only high-risk stuff like mining companies on the Toronto Stock Exchange. To be clear, I am not advocating for this approach. That’s just what has worked for me up to this point in my life.

I should add that, unlike ten years ago, I am also far more open minded to expanding my investments into different areas. That’s why our investor club started working with a broker dealer/RIA better versed in private equity and paper assets.

Unlike 10 years ago, I am no longer dogmatic in my “alternative asset or bust” position. In fact, as a general rule, I have softened on many of my more emphatic beliefs. My gray hairs have now convinced me that it just makes sense to have an open mind.

I still believe that alternative assets are where the life-changing opportunities are but there are other considerations such as sector diversity, hedging and cash flow. Cash flow is not what you typically think of when you think of paper assets, but it is something that you certainly can create with stocks in very unique ways that don’t involve simple dividends.

Andy Tanner wrote a book about this kind of investing in Robert Kiyosaki’s Rich Dad series and there is really no one better at explaining it then him. So, if you want to continue to explore other ways of investing your money, make sure to tune in to my conversation with Andy on this week’s episode of Wealth Formula Podcast.

Buck

P.S. Here’s the link for the free course Andy mentions in the podcast https://cf.thecashflowacademy.com/tcfa-6sn-wf-reg

393:Economic Impact of Emerging Technologies Oct 02, 2023

392: Back to School: Tax Mitigation Sep 27, 2023

391: Hedera/HBAR: My Asymmetric Dream Sep 25, 2023

Last week I did a back-to-school episode for you on asymmetric risk.

I told you that my primary asymmetric risk related investments are in cryptocurrency.

As a reminder, asymmetric risk investing means you throw in some money that, if you lose it, isn’t going to kill you. But on the other hand, if things go well, could make you rich.

Cryptocurrency has done both for a lot of people. In fact, in many cases it has done both to the same people at different times (yours truly included).

Let’s take a step back and review this whole crypto thing a little bit for those who haven’t been involved in the rollercoaster ride for the past decade and a half.

It all started back in 2009 with a white paper circulating amongst computer scientists authored by someone calling themself Satoshi Nakamoto.

The idea was a digital currency with no central authority like the US government or some big company.

This currency would be tracked not by one ledger but thousands. In keeping a “distributed ledger”, there would be no need central authority.

This currency would also be immutable and something that no one could simply confiscate like a bank putting a lien on your cash.

This is a massive oversimplification of bitcoin and purists are sure to correct me, but that was the essence of the original bitcoin thesis. It was simply a way to exchange value without a middleman.

Bitcoin has interesting parallels to gold. It requires “mining” to make it. Mining in this case requires computational power to solve math problems.

Back in 2009 nerdy computer types were mining thousands of bitcoins on their desktop computers. Now it takes serious expensive hardware and warehouses to mine bitcoin.

Very few people thought it would be worth anything anyway. In fact, the first commercial bitcoin transaction was made on May 22^nd, 2010—almost as a joke.

10,000 bitcoin were accepted as payment for two supreme pizzas from Papa John’s. Last year, the cost of a single bitcoin had exceeded $70K. So, I hope that was a good pizza.

Anyway, over the next few years, bitcoin saw its ups and downs but the regression line was clearly positive and extremely steep.

Within the last 5 years or so, there have been bitcoin futures and publicly traded financial products as well.

It has clearly been adopted by the mainstream. And, in my humble opinion, the chances of it going to zero are about…zero.

Now despite its volatility, bitcoin has been recognized largely as a storage of value. This is another parallel with gold. And also like gold, it’s a little bit difficult to use in everyday transactions.

You see, the bitcoin network is extremely secure but very slow (in part because it is extremely secure). It would make your morning stop at Starbuck’s unbearable. Other technologies like the lightening network have offered potential solutions to the speed issue, but for now, bitcoin really is a gold-like commodity.

In the meantime, tech entrepreneurs have recognized that distributed ledger technology could be used for more than just money. Distributed ledgers are now being used to create a different kind of internet—the so called Web 3.0.

Web 3.0 is owned by the user. So think about internet businesses like google and Facebook now. You use them but they are being monetized by a single company that you don’t own.

Web 3.0, in theory, creates online businesses with similar functionality but now, instead of there being a separate owner, the platform is owned by anyone who owns a token to that business.

So…no more big brother like Facebook or Twitter telling you what you can or cannot post. And you aren’t making money for corporate America by using these platforms.

Anyway, so all these “crypto” projects outside of bitcoin really aren’t about exchanging value. They aren’t really meant to be money.

Instead, the tokens in these alt coins (anything but bitcoin) are more like owning stock in software companies.

Some software companies like Ethereum build infrastructure. Others are more specific and build functional businesses or games using the infrastructure software.

Anyway, hopefully you get the idea. Web 3.0 is coming for sure. It’s just a matter of time where it just infiltrates everything you do on the internet.

You may not even know you are using software built on one of these tech platforms. It will just be one more thing that makes our lives easier that we take for granted.

Anyway, a lot of these new programs and services require infrastructure that is not only on a distributed ledger and safe like bitcoin. But they also need to be fast.

Hedera (aka Hedera Hashgraph) was a project that I learned about and invested in about 6 years ago in a presale. It is arguably the fastest and most secure distributed ledger network in the world. It also currently has the most transactions.

In all transparency, I own a fair amount of its native token, HBAR. And, I have been praying for it to explode like many lesser cryptos have for the last 5-6 years.

At one point it had gone up about 5X from where I bought it but I never sold. Its technology is so good that I thought it had a lot more upside. And I still do despite it being half the price I bought it for a few years back.

Bottom line is that I have not lost faith. The project has met every goal on its timeline. It just hasn’t seen the kind of price action that you might expect from what it has accomplished.

To be clear, this podcast is not an endorsement to buy HBAR but it’s an example of one of my asymmetric bets that I thought I would share with you.

Cofounder Mance Harmon has been on the show before and was kind enough to join me again to tell you about the project and give us some insights into the crypto world today.

So if you’re curious what kinds of asymmetric bets I’m making, make sure to tune in!

Buck

P.S. If HBAR goes $30 I probably won’t be doing this show anymore LOL!

390: Back to School: Asymmetric Risk Investing Sep 20, 2023

Other Types of Asymmetric Investing
Example of Asymmetric Investing: Cryptocurrency
Considering Asymmetric Investing
Examples of Successful Asymmetric Investing
Personal Experiences with Asymmetric Investing

**389: Back to School: Maybe This is All You Need?** Sep 17, 2023
So far in our back-to-school series, we have covered asset protection, estate planning and my capital allocation strategy.

Wouldn’t it be great if you could hit all these important concepts with a single investment? Well, as it turns out, you sort of can.

Let me back up and tell you a story. When I was fresh out of surgical residency and started to make some money, I started looking for advice on what to do with it. One of the questions I had was about life insurance. I was a newlywed and had a baby on the way (she just started high school by the way). So, I started asking the guys I was working with if I should buy term or permanent life insurance.

One of the younger surgeons was a bit of a know-it-all. He had a lot of advice about everything and most of it was not good. His facelifts weren’t good either as I started revising them just a few months later.

Nevertheless, I listened to what he had to say and he told me quite confidently to “buy term and invest the difference”. In other words, don’t buy permanent life insurance. Stick to term life insurance and, with the money you don’t spend on permanent life insurance, throw it into the stock market.

The older guy had very different advice. It was 2009 and he was planning to retire until the financial meltdown kicked his butt. He told me he wished he had bought more permanent life insurance because that was pretty much all he had left.

And while his situation was illustrative, I felt like I needed to do the opposite of whatever this guy suggested because I didn’t want to end up like him. So, I ended up buying term and didn’t think about it again until a couple of years later when I had started my own practice and was making a lot of money.

At that time, I was part of a mastermind with a bunch of high net worth business people. At some point life insurance came up and several of them talked about premium financed permanent life insurance policies.

It occurred to me that a lot of high net worth people actually were buying permanent life insurance despite what that know-it-all young surgeon told me. Anyway, a few years later, I decided to look back into my options. What I discovered was that both of those doctors that were giving me advice viewed permanent life insurance as something that it did not need to be: a poor yielding but stable investment.

The reason for that was that most professionals only get to see poorly designed policies that are primarily created to maximize commissions for those who sell insurance. What they think of as permanent life insurance is not the permanent life insurance of the rich. PERMANENT LIFE INSURANCE MEANS DIFFERENT THINGS FOR THE MIDDLE CLASS THAN IT DOES THE RICH.

The policies that the high net worth group had were designed very differently and optimized for investment purposes. In fact, in the high net worth world, these policies have a special name: LIRPs. That stands for life insurance retirement plan.

Permanent life insurance in this world plays a role in not only risk mitigation and estate planning, but also retirement income and asset protection. The more I learned about these strategies, the more they became no-brainers for me.

The guys that taught me most about this stuff are Rod Zabriskie and Christian Allen. They designed all my policies and now design policies for many of you as our Wealth Formula Banking partners.

On this week’s Wealth Formula Podcast, a couple of guys from that team are going to take us through the basics. If you haven’t heard about this stuff before, chances are that you are going to be blown away and wonder why you don’t already own a policy.

So make sure to tune in. The decision is yours, but you should at least know about permanent life insurance structures utilized by the rich.

Listen NOW!

Rod Zabriskie has been in financial services since 2009. Prior to going into business for himself, he worked in marketing and finance with several small businesses. He had the opportunity to purchase an existing furniture business in 2007, just prior to the Great Recession. The experience of struggling to stay afloat amid difficult economic conditions inspires Rod every day in his efforts to educate and assist his clients in implementing sound financial strategies.

He strongly advocates for establishing a firm foundation, utilizing proven strategies and financial tools to create a strong base upon which we can each build our financial house. In addition to focusing on Wealth Formula Banking and Velocity Plus, he has expertise in retirement income planning. Rod has a bachelor’s degree in Marketing Communications, and an MBA with an emphasis in Entrepreneurship.

He and his wife Jodi are the proud parents of 7 wonderful children. As a family they thrive on spending time exploring nature, playing games and doing projects together. He enjoys sports, music and reading.

Brenyn McConnell started in the finance industry in 2019 after he graduated with a bachelor’s degree in Marketing with a minor in Management from Utah Valley University. While Brenyn was in school, he managed a sales team in New York and Connecticut for 3 years. He learned while training, mentoring, and leading more than 75 sales reps that most of his reps had very little financial education. This ignited Brenyn’s own financial education and is what ultimately guided him into the financial industry.

Brenyn started at a finance firm in Salt Lake City and quickly built his own practice with the same ideals and strategies that we believe in. Naturally, this led to a great fit between Brenyn and the Wealth Formula Banking team. He joined the team in 2020 and helps facilitate the education, implementation, and ongoing strategic review efforts of our clients. He is also our resident expert in disability income insurance.

Brenyn enjoys furthering his education in the alternative investment space through books, podcasts, and webinars. He has been married for 5 years to his wife Aubri, and they enjoy boating, camping, and traveling.

388: Back to School: Buck’s Investment Philosophy Sep 13, 2023

Asset Allocation
Diversification and Leverage
Permanent Life Insurance and the Wealth Accelerator
Multi-Family Real Estate
Asymmetric Investing: Taking a Risk
How to Avoid Single-Point of Failure?

**387: Lessons from a Sovereign Wealth Fund Manager** Sep 10, 2023
Zulfe Ali is a broker dealer and investment advisor—but not your run-of-the-mill type in this field.

He’s been in the middle of the action on Wall Street as a mergers and acquisitions guy for JP Morgan and Bank of America in the 90s and ran a multibillion-dollar sovereign wealth fund for over a decade.

I’ve seen photos of him with world leaders like former UK Prime Minister Tony Blair and others as part of his former position. To say the least, he’s not one of those 6 week course advisors out there.

While he has now opened his door to individual investors like us, he is using institutional principals to help clients grow their money.

As you can imagine, those principals are quite different from your typical advisor and I am happy to endorse him to anyone looking for a third-party financial advisor. Many people have asked me for a recommendation throughout the years and I have not been able to give one until now.

In this episode of Wealth Formula Podcast, I speak to Zulfe about his perspective on asset allocation and the current economy. Make sure to tune in to see what a guy at his level is thinking.

And later on this week, tune in for my “Back to School” episode where I give you insight into how I design my own investment portfolio.

Listen NOW!

Zulfe is focused on bringing his experience and skills to help individuals, family offices and businesses to invest wisely, implement sound financial strategies, and protect their assets.

Zulfe has always immersed himself into the global financial markets. He began his career in the early 1990s, just prior to the “dot-com” boom at a boutique investment bank in San Francisco called Montgomery Securities. That firm was eventually acquired by Bank of America where Zulfe continued to work with investors in growth equities. He then joined JPMorgan’s acquisition finance team working both in New York and London to support private equity and corporate clients. After that, he went on an adventure to the Middle East and worked at a sovereign wealth fund as Chief Investment Officer with a mandate to diversify the existing investment portfolio through a global asset allocation strategy. Following that role, Zulfe joined a London based venture capital firm and helped to expand its presence in the US and launched its first US based fund out of Washington, DC.

Zulfe has an BA in Mathematics from Carleton College and an MBA from Cornell University.

Shownotes:

Discussion on Retail vs Institutional Investing

Importance of Diligence in Investing

Examples of Investment Disasters

Role of a Broker Dealer

Introduction to Velerity Group Wealth

Applying Institutional Investing Experience to Retail Investing

Role of an Advisor

Portfolio Diversification

Current Economic Situation

Effect of Interest Rates

Investment Strategies

386: Back to School: Estate Planning Sep 06, 2023

Return to Personal Finance: Estate Planning
Do You Need a Will?
Is the Estate Tax Stupid?
Avoiding the Estate Tax

**385: Should you buy Silver?** Sep 03, 2023
Those of you who have been listening to me for a while know that I am not really a precious metals guy.

I know the arguments and I respect them. Gold has held its price over an unprecedented amount of time.

An ounce of gold got a guy a nice toga and sandals in Roman times and today it will get you a nice suit and a pair of shoes.

In that regard, gold has been the ultimate hedge if you are looking for wealth preservation over a thousand years.

And that’s what people selling you gold will tell you. They aren’t lying but there is often an element of fearmongering involved in that world that I find distasteful.

The thing that I don’t really like about gold is that it is an asset that doesn’t throw off any money. And if you are storing it somewhere it’s going to cost you money to do so—kind of like real estate that has negative cash flow.

With negative cash flow, leverage doesn’t make sense either—not like it’s available on gold anyway.

So I guess my perspective is if you want a real asset that is hedged against the dollar and keeps up with inflation, why not buy real estate?

In fact, if you don’t put any leverage on the real estate it’s pretty much behaving like gold but giving you an income as well.

I remember Dante Andrade and I looking for properties for Touro and seeing Chinese buying $30-40 million dollar assets for cash. They were essentially buying a storage of value outside of China. Kind of sounds like gold, right? Except the real estate cashflowed of course.

Anyway, today I’m not anti-gold by any means. I’m just not a gold bug.

As for other precious metals, they often have more utility than gold so that certainly is an appealing quality. Silver, for example, is used in several industrial applications.

In that sense, there may be some additional value there that could lead to price increases in the future.

I’m certainly not an expert in this area though. That being said, personal finance is personal and you should hear the argument for all types of assets and make your own decision.

My guest this week is an expert on silver and makes a pretty interesting case for why you might want to add some to your portfolio.

Make sure to tune in!

P.S. Later this week, look for another podcast as part of our “back to school series”!

Michael DiRienzo is the Executive Director at The Silver Institute.

**384: High Mortgage Rates Does Not Equal Housing Crash** Aug 30, 2023
I live in Montecito, CA. It’s a small beach town of about 5 thousand people at the southernmost part of Santa Barbara.

I moved here from Chicago in 2017 and started living here as a renter. One thing I learned over the years is that whenever I move to a new area, I always end up finding a part of town I like better so it’s best not to buy right away.

There was also quite a bit of sticker shock when I moved here. In the northern suburbs of Chicago where we moved from, I paid $2 million for a 7000 square foot home on 2.5 acres and an indoor pool.

$2 million didn’t get you much of anything in Montecito so I needed some time to digest this new reality for a bit as well.

In hindsight, that wasn’t such a good move. Since 2017, Montecito homes saw an average sale price increase of over 60 percent—the steepest rise in prices in California during this time. And to be frank, that number sounds a bit low to me.

Covid didn’t help. Rich people from LA, San Francisco and New York realized that if they had to work from Zoom anyway, they might as well do it from paradise where they could also hike the mountains and go to the beach on the same day.

You know what else didn’t help?… Low interest rates. However, I will say that the number of cash buyers of multimillion-dollar homes in my area is unreal.

As for the rest of the country, the suburbs pretty much everywhere took off. Near zero interest rates and nowhere to go made people buy homes so they had a nice place to be all day long while quarantined.

Now that quarantines are over and interest rates are high, you might think home prices would have fallen off the cliff. Nope.

Remember it’s all about supply and demand. Right now, supply is low. Why? Well, if you bought an expensive house at a fixed rate in the last few years would you be selling anytime soon?

Mortgage rates have more than doubled. In other words, many people today could not afford the house they bought a few years ago. That’s a problem across the country.

As a result, supply is so low that even minimal demand is keeping housing prices high. All I can say is thank God I ended up buying a house before it got too crazy.

The issues around real estate prices right now are complex but worth understanding. My guest on this week’s Wealth Formula Podcast is an economist who specializes in these specific issues.

Make sure to tune in and see what she has to say about this very unique time in real estate history.

Selma Hepp is the Chief Economist for CoreLogic, America’s largest provider of advanced property and ownership information, analytics and data-enabled services. Selma leads the economics team, which is responsible for analyzing, interpreting and forecasting housing and economic trends in real estate, mortgage and insurance.

Prior to joining CoreLogic in 2020, Selma was Chief Economist and Vice President of Business Intelligence for Pacific Union International, later acquired by Compass, where she oversaw the vital economic and technology intelligence to drive the expanding brokerage’s success. Selma also held the role of Chief Economist for Trulia; Senior Economist for the California Association of Realtors; and Economist and Manager for Public Policy and Homeownership research for the National Association of Realtors, as well as a special research assistant at the U.S. Department of Housing and Urban Development.

Selma frequently appears on local and national radio and television programs and has been widely quoted in The Wall Street Journal, The New York Times and many industry trade publications such as National Mortgage News and HousingWire. Selma received the HousingWire Women of Influence Award in 2022. She has served as president of the Los Angeles chapter of the National Association for Business Economics (NABE), NABE Real Estate Roundtable co-chair, Board member of the International Student Exchange Program, Advisory Board member of the REALTOR® University Research Center Editorial Review and a Member of the Housing Policy Debate Editorial Advisory Board. Selma held a Real Estate Associate professional license in Florida and Virginia.

Selma graduated from the State University of New York, Buffalo with an M.A. in Economics and holds a Ph.D. from the University of Maryland.

**383: Back To School: Asset Protection** Aug 27, 2023
I don’t know about you but my kids are about to head back to school. In this spirit of that, I thought it might be nice for us to get back to basics as well.

For the next few weeks, I will be releasing at least one podcast that involves the basics of personal finance in addition to whatever else may be on the docket.

This week’s back-to-school episode is about asset protection and my guest is Doug Lodmell.

Make sure to tune in and let me know if these shows are helpful!

Born in Geneva, Switzerland, attorney Douglass S. Lodmell has excellent knowledge and the highest level of experience in estate planning, taxation and strategic asset protection for domestic and international clients. In addition to a Juris Doctorate from Cardozo School of Law, Douglass has a Bachelor of Science degree in finance as well as an advance law degree (LL.M.) in taxation from NYU School of Law. He has authored numerous articles for professional journals as well as a popular book about the explosion of lawsuits in America called The Lawsuit Lottery: The Hijacking of Justice in America. Doug’s extensive experience in asset protection make him a frequent guest speaker at medical, and professional conferences and seminars throughout the country, as well as teaching concepts of asset protection to other attorneys at continuing legal education seminars throughout the country. For information on inviting Doug to speak at your group, meeting or convention contact Coletta Anderson at Coletta@www.lodmell.com.

**382: Should You Consider Buying a Franchise?** Aug 20, 2023
I have a medical degree and am a former board-certified surgeon. Yet that is not my identity.

My identity is that of an entrepreneur and investor. This is an identify for which I did not go to school. Without trying to sound dramatic, I was born this way. I think it’s a genetic thing.

You see my dad came to this country in the late 1960s and trained as an engineer. He eventually got caught doing real estate on the job and got fired shortly after I was born.

That’s sort of my story too—I was working at a cosmetic surgery company while planning to start my own company. When they found out, they perceived me as a competitor so they fired me.

The apple does not fall far from the tree I guess. He went on to a career as a real estate entrepreneur and continues in that endeavor even today into his 80s.

Despite my detour into the surgical world, I too have spent the majority of my life as an entrepreneur.

It wasn’t a choice. It was in my nature. I am unemployable. I hate having to answer to others and I despise hierarchy—unless I’m at the top.

That’s why I am a business owner and not an employee. Again, to be clear, I don’t think there is anything wrong with being an employee. I just am not built that way.

Now, in my case, I had the daredevil instinct to start businesses from scratch. Some of my business ideas failed and some were wins. The good news about being an entrepreneur is that you just need a few big wins.

Now if I did not have daredevil entrepreneurial instincts would I have been able to be a successful business person? Yes, but I don’t think I could have started businesses from scratch.

But that does not mean that you have to have to be born an entrepreneur like I was. It just means that you might want to find a more structured way to get into the arena.

Buying a business is certainly an option. I will say that when you start a small business you get suspicious of buyng other small businesses because you know that somewhere in your own business there is a closet full of skeletons. When you buy a business, you don’t know where that closet is.

That closet often has all kinds of secrets. For example, it may tell you who the key people are that make or break that business. What if those people leave when you buy the business?

The only way to avoid buying a business with such an Achilles heel is to buy one of sufficient size that can’t rest on just a few shoulders. But not all of us can afford a $50 million business with an executive team in place.

That’s where franchising might make sense. The value proposition of a franchise involves having the playbook on how to successfully run a business with the backing of a larger entity behind you.

In theory, this should provide you with play-by-play directions on how to start and run a successful business. In addition to guiding the less business inclined into ownership, franchises may also provide some level of risk mitigation to people looking for business opportunities but reluctant to deal with the unknown variables of business ownership.

That said, it is not without a price. Franchise fees are real and must be weighed into the entire equation.

My guest on this week’s Wealth Formula Podcast helps people navigate the world of franchise opportunities and is a great resource for those interested.

I should point out that I have no financial relationship with Kim nor have I found franchising suitable for myself at this time. But it might be for you and you should certainly know a little bit about this option. So tune in!

For the past 20 years Kim Daly has been helping entrepreneurs, investors, and stuck 9-5 professionals take control of their lives and step out of the corporate cycle by investing intelligently in the franchise businesses and become “franchisepreneurs.” She is an international best-selling co-author of Franchising Freedom and the founder and host of the Kim Daly TV YouTube channel.

Before becoming a franchise consultant Kim was an entrepreneur and highly sought after consultant in the health and fitness industry working with brands such as Denise Austin, Dr.Denis Waitley, Gold’s Gym and eDiets.com. She is the creator of “The Daly Plan” – a millionaire mindset coaching program that enabled her to build the largest franchise consulting business in the history of franchise consulting in 2012. She aspires to be the most influential and motivational voice in the franchise industry. Kim is a mom of two teenage boys. She is passionate about fitness and nutrition. She lives on the beach in Southern New Hampshire where she loves to ski in the winter and workout year-round.

**381: Clean Energy Solves Only Part of the Problem** Aug 13, 2023
It turns out that the conversation about getting out of fossil fuels and into green energy is a lot more complicated than just energy.

Of course “black gold” has literally fueled our society into its wealthiest state since the beginning of man. No one argues that. But there is a clear movement globally to try and move to clean energy for the sake of the environment.

Beyond energy, however, oil plays a pivotal role in the manufacture of several products that we rely on in our daily lives.

For example, the petrochemical industry heavily depends on oil as a raw material. Petrochemicals derived from oil and natural gas are the building blocks for a wide range of goods from plastics to resins, synthetic fibers to rubbers, detergents to adhesives, and even solvents.

Without these materials, you wouldn’t even have the materials to make the computer or smartphone you’re using to read this email.

Right now, we literally need oil to live. Many pharmaceuticals such as aspirin and the coatings on time-release pill are made from oil derivatives as are artificial heart valves, artificial limbs and even contact lenses.

I could give you a myriad of other products that rely on oil but suffice it to say that life without these products would not be the same.

Does that mean that we should give up on alternative energy? No. We should always be looking for cheaper and cleaner alternatives. The point is that to truly get off fossil fuels we also need to start thinking about alternatives for all of the products that rely on oil as well.

It’s an underappreciated problem that my guest on this week’s Wealth Formula Podcast addresses and it’s worth your time to understand the full scope of the issue. Listen Now!

Ronald (Ron) Stein (born April 29, 1941) is an author, columnist, Engineer and energy policy advisor for Heartland Institute. He is co-author of Energy Made Easy – Helping Citizens become Energy Literate (2019), Just GREEN Electricity – Helping Citizens Understand a World without Fossil Fuels (2020), and the 2021 Pulitzer Prize nominated book Clean Energy Exploitations – Helping citizens understand the environmental and humanity abuses that support “clean” energy.

Ronald advocates that energy literacy starts with conversations and the knowledge that renewable energy is only intermittent electricity generated from unreliable breezes and sunshine. Wind turbines and solar panels cannot manufacture anything for humanity, while fossil fuels manufacture everything for the 8 billion on this planet.[citation needed]

He is the founder of Principal Technical Services (PTS).

**380: Investing Through the Eyes of a Fighter Pilot** Aug 06, 2023
It has been a tough year for real investors. Inflation and interest rates have created distress and uncertainty.

But let me remind you of a few things. Investing isn’t for the faint-hearted. EVERYONE loses at some point. The idea that you can always win is a fallacy.

Of course everyone would agree with that statement rationally. However, our brains are not wired to think rationally in stressful times. It’s a tall order.

There is a concept in psychology called “loss aversion” that means **we are wired to fear loss more than we desire gain**. So if you have an investment go bad in a distressed market, you might let the fear of future losses prevent you from investing in an asset that might create significantly more gain down the road.

The Chinese word for crisis is the same word for opportunity. When there is blood in the streets, you want to activate your instincts as a predator more than that of the hunted. That’s something all the world’s greatest investors will tell you. And by the way, those investors have all lost money at some point in their life.

Go back to basics. Why do you invest your money rather than leave it in the bank? I invest my money because leaving it in the bank is a way to guarantee loss of purchasing power. Think about it. Last year, inflation soared over double digits. Did you get even 1 percent return on the money in the bank? Money in the bank guarantees a loss of real buying power—double digit losses over the last year.

Why do you invest in real estate or other alternative assets instead of only a portfolio of stocks, bonds and mutual funds? I invest in alternatives because they can result in extraordinary returns. I have experienced that over and over again and taking some losses now is not going to change my view of investing in the future.

I stand by the notion that no one ever gets rich with a portfolio of stocks, bonds and mutual funds. At best they are going to preserve your wealth with modest growth. I’m willing to take a little bit more risk for the larger reward. So far it has paid dividends.

The point of all of this is to say that decision making in personal finance is like anything else. The hardest part of it is to stay rational and not let fear or other emotions cloud your thoughts.

My guest on this week’s episode of Wealth Formula Podcast knows a lot about making decisions under duress. He’s a fighter pilot who has had to think clearly to avoid imminent death.

And well…it’s the same type of thinking you are going to need to do if you’re going to make money as an investor in this unpredictable world.

Listen to the interview NOW!

HASARD LEE is a U.S. Air Force fighter pilot who began his career flying the F-16, where he was selected as the ‘Top Instructor Pilot of the Year’ for the Air Force’s largest F-16 Combat Wing.

As a flight commander, he led his pilots into combat during one of the most intense periods during the War in Afghanistan. There he flew over eighty combat missions and became the only fighter pilot to ever fly two different types of jets into combat on the same day while supporting troops under fire.

Hasard was then hand-picked to fly the F-35―the most advanced and expensive weapons system in history―which was still in development at the time. During his last role on active duty, Hasard became the Chief of Training Systems for the largest training base in the world, leading the development of new technology and teaching methods to train future fighter pilots.

Hasard’s first book, “The Art of Clear Thinking,” was a #2 Wall Street Journal Bestseller. In the book, he distills what he’s learned during his career flying some of the Air Force’s most advanced aircraft. With gripping firsthand accounts from his time as a fighter pilot and fascinating turning points throughout history, Hasard reveals powerful decision-making principles that can be used in business and in life.

Hasard is also a content-creator with one of the most viewed military aviation channels on YouTube. Since the start of 2021 he has over 100 million views on YouTube and has reached over 290 million people across social media.

Hasard regularly speaks to organizations and businesses on how to improve their decision-making, how to increase innovation, and how to cultivate mental toughness.

**379: Do Human Cycles Drive Economic Cycles?** Jul 30, 2023
I was in high school when the Berlin Wall came down. The ensuing decade was really like no other I have experienced in my life.

It was the 1990s. There was no more cold war. Decades of fear of nuclear annihilation vanished into thin air. And 9/11 had not yet happened so we did not yet know the new world of terrorism.

It could be that I was young and stupid but life seemed good. The news of the day was about Monica Lewinsky’s stained dress and political conflict seemed ludicrous but benign.

Back then, I used to think that the world just got better with time. But in the last 20-30 years I have realized that it’s actually more of a pendulum.

There is no doubt that we now live in turbulent times. The country is horribly divided to the point where rational individuals have brought up the idea of a national divorce. Ronald Reagan is rolling in his grave.

Nevertheless, as crazy as these times may seem, we should keep in perspective that we have seen worse before. In 1861 we actually did have a civil war.

As for cultural wars. Well, all you have to do is go back to 1968 to see that what’s going on now is actually pretty tame.

Of course, I don’t need to tell you that the United States has had numerous economic booms and busts throughout our history.

Bottom line is that history does not repeat itself but it certainly does rhyme. My guest on today’s episode of Wealth Formula Podcast is an esteemed historian that has recognized specific historical patterns and suggests that they are highly predictable.

So what’s next for the United States and its economy? He thinks we are in the final stage of an 80-year cycle. Find out what that means for you on this week’s Wealth Formula Podcast.

Neil Howe is a historian, economist, and demographer who writes and speaks frequently on generational change in American history and on long-term fiscal policy. He is cofounder of LifeCourse Associates, a marketing, HR, and strategic planning consultancy serving corporate, government, and nonprofit clients. He has coauthored six books with William Strauss, including Generations (1991), 13th Gen (1993), The Fourth Turning (1997), and Millennials Rising (2000). His other coauthored books include On Borrowed Time (1988). And more recently Millennials Go to College (2007), and Millennials in the Workplace (2010). He is also a senior associate at the Center for Strategic and International Studies, where he helps lead the CSIS “Global Aging Initiative,” and a senior advisor to the Concord Coalition. He holds graduate degrees in history and economics from Yale University. He lives in Great Falls, Virginia.

Bonus Episode: Breakthrough in Early Cancer Detection? Jul 24, 2023

0:00:00 – Advancements in Cancer Detection Technology
0:00:35 – GRAIL Galleri test
0:02:11 – About Dr. Josh Ofman
0:05:14 – Cancer really is a disease of the genome
0:12:35 – Various guidelines for early detection of certain cancers
0:16:45 – Cancer Detection in Blood Biology
0:19:03 – Cell-Free DNA
0:23:38 – How many cancers is the GRAIL Galleri test able to detect?

**378: Forcing Schools to Teach Financial Literacy** Jul 23, 2023
Why is financial education not part of our school system?

To understand that, you have to understand where our school system came from. Our educational system started during the industrial revolution and was influenced heavily by the Prussian system.

What do you think of when you hear “industrial revolution?” I think of factories and conveyor belts. This was a time of massive production gains in the United States and a fundamental change in the way we live.

So not only did businesses need to produce more products with factories, but they also needed factories to create people to work in those factories.

Schools became factories for people. Students were treated like products on an assembly line, all learning the same thing at the same pace, much like widgets rolling off a conveyor belt.

The rich business owners were the beneficiaries of this system. They got a workforce ready to fit into their industries, and these workers were less likely to question or challenge the system because that’s not what they were trained to do.

Despite the fact that we have moved beyond the industrial revolution into the information age, the old education system remains. Lots of standardized tests, rote learning, and teachers seen more as authorities than guides.

Now, ask yourself why financial education isn’t part of our school system. It becomes pretty obvious doesn’t it? Why would a system designed to create a workforce teach them about money? After all, financial independence doesn’t exactly incentivize someone to continue working.

My guest on this week’s Wealth Formula is a young woman trying to change the system. It’s clearly an uphill battle but make sure to listen and hear how she’s planning to do it.

Yanely was born and raised in Brooklyn, New York and is one of the first in her family to graduate college. After two decades of school, she still can’t believe that she never had a class about making smart money decisions! Now, she’s on a mission to help young people learn about personal finance in a fun and engaging way!

After completing Teach For America, Yanely paired her love for teaching with her passion for financial literacy, creating a unique YouTube channel for people to engage with topics like budgeting, managing credit, saving and investing for retirement and more!

Yanely serves as the Director of Educational Outreach at Next Gen Personal Finance and is a member of CNBC’s Financial Wellness Advisory Council.

**377: Why is Oil Still Expensive Despite Clean Energy?** Jul 16, 2023
This week’s podcast is about energy. But before we do that I want to comment on a few things about our investing ecosystem.

A decade ago when I first started playing around with this podcast concept I was very excited about a whole new world of investing that I was learning about.

Why invest in the stock market if you could invest in real estate, oil and gas and other businesses that seemingly made a lot more money and had a lot less risk?

A decade later, I can see why it often makes sense for people to just buy ETFs and call it a day. Or, maybe a highly stable asset class such as permanent life insurance i.e. Wealth Formula Banking.

Private investing can be very lucrative, but it’s not regulated so it attracts all kinds of nefarious and/or incompetent characters to the space.

Retail (mom-and-pop) investors are particularly vulnerable to these people because they tend to have less financial sophistication. That’s not to say they aren’t intelligent. It’s just hard to be a full-time professional and a sophisticated investor at the same time.

That gets a little dangerous because personal finance podcasters like me are looking for content. We see ourselves as providing education and entertainment when in fact we often inadvertently endorse individuals to whom we should not give a platform.

I have to admit that I have been guilty of this myself. Especially early on, I would interview anyone with an interesting idea without considering that my listeners might take the interview as a stamp of approval from me.

For example, despite my own vehement and vocal dislike for investments in oil and gas drilling, I’ve given a platform to people on my podcast who were raising money for that. People in our community lost money because of that. For that, I apologize.

In recent months, retail investors in this space have been hit especially hard. The SEC has shut down funds in the carbon capture and cannabis spaces that appear to be based in some level of fraud and other funds have simply collapsed based on poor business plans that were never attenable in the first place.

Fortunately, our group was able to dodge these schemes. It’s hard enough to invest without swimming with sharks.

Case in point…my real estate portfolio and that of my investor group absolutely has some losers in it right now.

Much of that is due to an unprecedented slope of rate hikes and unexpected price escalations in such things as materials, property taxes, and insurance. But it’s not because of fraud. In investing, you can’t always win. You just need to win more than you lose.

At the end of the day, my own investments are still going to net out quite profitably. I’ve borrowed from traditional investing paradigms and “volume-averaged” into a lot of different assets.

I’ve stuck to a plan over several years that will, fortunately, overcome some setbacks and I will now position myself to be opportunistic and take advantage of oncoming distress. It will get ugly and most will be too scared to take action—especially if they have suffered losses. But that’s exactly when you want to be greedy, not afraid.

But going back to how we can move forward in the safest way possible, we do need to be proactive in risk mitigation—especially when it comes to avoiding scams. So what am I going to do?

1) I will not interview anyone actively raising capital unless I am personally involved in the operation in a position of transparency.

2) Our Investor Club will only present opportunities in which I am a managing partner and/or which has undergone due diligence by a third-party SEC registered broker-dealer.

In taking these steps, my podcast itself does become a little bit more challenging. As you may have already noticed, we have shifted to more macro issues than investment-related topics.

However, I also believe that the steps we are taking with the podcast and with the investor club will provide our group a “best in class” retail experience that involves institutional-level due diligence. It will be more complicated and challenging to execute but that’s what you deserve.

Now, getting back to this week’s episode of Wealth Formula podcast. We are going to talk about oil and alternative energy sources at the macro level. It’s information that you need to understand the larger global financial picture today so make sure to tune in!

Alex Stevens serves as the Manager of Policy and Communications for the American Energy Alliance. In his role, Alex writes on the relationship between business and government in the energy industry as well as the effects of regulation and subsidies on energy markets. Alex graduated with a B.S. in Political Science from Central Michigan University and a B.A. in Journalism from Oakland University.

Shownotes:

Why are we still on an oil based economy?

EPA story about combustion engine emissions

Are renewable energy and electric vehicles as green as they seem?

**376: What Big Data Has to Say about Home Prices** Jul 09, 2023
What a crazy ride it’s been. Despite Covid, plunging interest rates actually made home prices explode to new highs. In my own neighborhood, housing prices doubled.

Then it started to look like the housing bubble had started to burst. There were mortgage companies in distress and laid off thousands. Economists warned the next housing recession was upon us.

It all made sense. How could such a wild ride not end with a hangover? But then a funny thing happened. For the last few months, housing prices actually started creeping up again.

They aren’t going up by much. But the big thing is that they’re not going down. A lot of this is really due to reduced inventory. People who were going to sell their homes, most likely sold them as they saw their largest asset bubble into a pile of potential cash.

With less inventory bidding wars are helping to push prices up further. In fact, Zillow predicts home prices will keep rising in 2024. Obviously a lot of that will depend on what the Fed does in the next few months.

This is tricky stuff to predict. My guest on this week’s Wealth Formula podcast is using Big Data to make his own predictions. Listen now to hear what he has to say.

Mike Simonsen is the founder and president of real estate analytics firm Altos Research, which has provided national and local real estate data to financial institutions, real estate professionals, and investors across the country for more than 15 years. An expert trendspotter, Mike uses Altos data to identify market shifts months before they hit the headlines.

**375: Stalking Economists for Answers: Richard Duncan** Jul 02, 2023
Last week I called the economy schizophrenic. Actually, that’s an insult to schizophrenics.

This is simply a dysfunctional economy. It’s the product of a good idea called capitalism with excessive intervention—namely by the Federal Reserve Bank of the United States.

Today’s economy reminds me a little bit of the movie, Jurassic Park. Altering the natural order of things has unexpected consequences… like a T-Rex eating you alive.

Similarly, the Fed printed money for years and kept interest rates at artificially low levels—even when it probably didn’t need to. Sure, raising rates 10 years ago might have caused a little recession along the way, but that’s NORMAL.

Instead, they decided to take intervention to a new level. Rather than seeing the role of business cycles in a healthy economy, they became reactive to *equity markets*. To be clear, keeping equity markets in a bubble has never been a mandate of the Federal Reserve.

But there they were. They would threaten to raise rates, the markets would panic sell and then the Fed would quickly back off.

The Fed was playing a game of chicken with investors and the investors won over and over again—so much so that people began to believe that the Fed wouldn’t ever let the markets go into free fall.

Then Covid happened and, with it, something unprecedented. True helicopter money was released into the hands of ordinary Americans by the United States government. You see when the Fed prints money it lands in the arms of banks who would simply hoard it.

This time, things were different. People needed the money to eat so the government put it into their hands. And that, along with high demand for goods because of a crippled supply chain lit the fire of rapid inflation—the worst we have seen in 40 years.

Of course, somehow the Fed didn’t realize that it was real at first and didn’t act quickly. In hindsight, gradual increasing of rates would have made sense and probably prevented the need for extreme measures. Instead, it waited for things to get out of hand and then put its foot on the gas like never before.

Now we are sort of in no-man’s land. Inflation seems to be getting under control. There is some distress in the economy as seen by bank failures and corporate bankruptcies at 2010 levels. The commercial real estate markets are a mess.

But…we also added 339,000 jobs last month. Why? I don’t know other than to guess it has something to do with optimism that the Fed will change course and become Dovish with rates. In other words, businesses may not believe that the Fed will let things get that bad before they reverse course and start cutting rates.

It reminds me of a spoiled child who knows that if he whines long enough his parents will give in. It’s not the kid’s fault that he behaves that way. It’s the way the parents taught him to behave.

Similarly, businesses and investors don’t really believe the Fed when it says enough is enough about low rates and money printing. I’m not sure that I do either.

So, that’s this non-economist’s take on what’s going on with the economy. There’s a good chance that I have several flaws in my argument but, as I’ve said before, I’m trying really hard to make sense of it so I can move forward.

Richard Duncan is a real economist—one who recently spoke to Congress on what he believes needs to be done to move America ahead. He has some pretty good ideas about what’s going on with the economy now that I think will be useful to you. Listen to my interview with him on this week’s episode of Wealth Formula Podcast!

Richard Duncan is the author of four books analyzing the causes and the effects of the economic crises that have brought the global economy to the brink of collapse during recent decades.

The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005), predicted the global economic disaster that began in 2008 with extraordinary accuracy. It was an international bestseller. The Corruption of Capitalism: A strategy to re-balance the global economy and restore sustainable growth (CLSA Books, 2009) described the long series of US policy mistakes responsible for the Crisis of 2008. The New Depression: The Breakdown Of The Paper Money Economy (John Wiley & Sons, 2012) introduced an important new analytical framework, The Quantity Theory of Credit, that explained all aspects of the global economic crisis that began in 2008: its causes, the rationale for the government’s policy response to the crisis, and likely future developments.

His latest book is The Money Revolution: How to Finance the Next American Century (John Wiley & Sons, 2022). The first two parts of the book describe the evolution of Money and Credit over the last century. These include a detailed history of the Federal Reserve since its establishment in 1913 and a discussion of the transformation of our economic system from Capitalism to Creditism during the five decades since Dollars ceased to be backed by Gold. Parts One and Two show that a “Money Revolution” has occurred and fundamentally altered the way the global economy functions. Part Three demonstrates that this Money Revolution opens up unprecedented opportunities for the United States to radically accelerate economic growth, enhance human wellbeing and strengthen US national security by investing aggressively in the Industries and Technologies of the Future.

Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. He also worked as a consultant for the IMF in Thailand during the Asia Crisis. Richard currently publishes Macro Watch, the biweekly video newsletter he founded in 2013.

Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television, as well as on BBC World Service Radio. His books have been reviewed in the Financial Times and The Economist, and taught at Harvard and Columbia.

He is also a well-known speaker whose audiences have included The World Economic Forum’s East Asia Economic Summit in Singapore, The EuroFinance Conference in Copenhagen, The Chief Financial Officers’ Roundtable in Shanghai, The World Knowledge Forum in Seoul, and the CFA Society during a speaking tour around South America. In February 2023, Richard was the guest speaker at a House Ways and Means Committee policy dinner in Washington, D. C.

Richard studied literature and economics at Vanderbilt University (1983) and international finance at Babson College (1986); and, between the two, spent a year traveling around the world as a backpacker.

Shownotes:

The Confusing Economy

Will Credit Growth Push the US Into Recession?

Savings and Money Supply

Economy Impact of Student Loan Repayments

Rethinking the Fed’s policy

Wealth to Income Ratio

US Current Account Deficit

Macro Watch

**374: Trying to Understand a Schizophrenic Economy** Jun 25, 2023
I am annoyed with this economy. That doesn’t seem like a very professional thing to say but I don’t know how else to express my feelings any better.

You see, nothing really makes sense. Inflation has been as high as it has been since the 1980s. At first, the Fed didn’t think it was real and then reacted by increasing interest rates at the fastest rate in American history.

Businesses are feeling it. Corporate bankruptcies are at 2009 levels likely in response to illiquid lending markets. The commercial real estate market is paralyzed with blood starting to seep through the streets.

**But…last month’s jobs reports showed that we added 339,000 jobs significantly exceeding expectations.**

WTF?

It makes no sense at all. Why is the jobs report important for us? Well, because that’s one of the variables that the Fed is looking at as they decide what to do with rates going forward.

Inflation is down to 4 percent which is starting to feel comfortable, but a jobs report like that is going to give the Fed pause on being dovish going forward.

So, I have no idea what to expect next. And if I have no idea what to expect then other businesses and investors are likely equally confused.

And the problem with that is that *uncertainty* is what the markets hate the most. So…that’s where we are at and that’s why I am so annoyed.

This week on Wealth Formula Podcast I interview an economist who teaches entrepreneurs. He’s written a book on how we can start looking at the economy in a practical way.

His perspective is a little different than the academics who run the Fed and it will be worth your time to hear what he has to say.

Listen NOW

Per L. Bylund grew up in eastern Sweden’s beautiful archipelago, some 20 miles northeast of the capital **Stockholm**. He is currently enjoying his new professional career, as a professor of entrepreneurship, following previous experiences as systems developer and business consultant, elected politician, and entrepreneur.

Bylund earned a bachelor’s degree in business administration (civilekonom) in 1998, majoring in corporate finance and accounting, and a master’s degree in business informatics in 1999, both at the **Jönköping International Business School**. He then pursued a career in IT and business consulting in Stockholm and Malmö working primarily with web systems development and business process automation and as CIO for companies Datastrategi, Mogul.com, WOCHB, Guide Konsult, and Nordengren Ett. Bylund is certified as Microsoft Certified Professional (four expert areas).

In 1998, Bylund was elected for the municipal council in his native **Österåkers kommun**, where he also served as a member of two municipal boards. He held numerous positions with several political organizations for a full decade until he turned his back on party politics in 2000.

While pursuing his career in IT, Bylund studied political science at **Stockholm University**. He later moved to Lund and earned a master’s degree in political theory at **Lund University** in 2005.

Throughout 2004, Bylund lived in Taipei in the Republic of China (Taiwan) where he studied mandarin Chinese.

In 2007, he moved to the United States to pursue a doctorate in applied economics at the **University of Missouri**. Graduating in 2012, he spent the 2012-2013 year as an adjunct professor teaching entrepreneurship in the Management Department of Trulaske College of Business at “Mizzou.” He moved to Waco, TX for a research professorship in the Department of Management and Entrepreneurship in the Hankamer School of Business and the Baugh Center for Entrepreneurship and Free Enterprise at **Baylor University** in 2013.

He is currently associate professor of entrepreneurship and Johnny D. Pope Chair in the School of Entrepreneurship in the Spears School of Business at **Oklahoma State University**, where he has worked since 2015.

Bylund has experience founding several startups between 1993 and 2006, none of which became a successful business. Failure is a great teacher, however, and the real value of these experiences is realized in his research and teaching.

He currently lives in Tulsa, OK with his wife Susanne.

**373: The Investment that Keeps on Giving (Even When You Die)** Jun 18, 2023
There is a significant amount of distress in the investor world right now. With inflation and interest rates climbing quickly, it has left the equity and real estate markets in shambles.

We will get through this. And while I encourage you to fight against the fear of investing so that you can take advantage of oncoming blood in the streets, I understand if you are reluctant.

We’ve had tough times in American economic history. The Great Depression of the 1930s was a period of extreme economic hardship and uncertainty. It started with a stock market crash on Black Tuesday, October 29. The Dow Jones Industrial Average lost about 12% of its value that day. The crash continued into the following weeks.

By mid-November 1929, the market had lost over $30 billion in value (approximately $400 billion in today’s terms). This loss of wealth led to reduced consumer spending and investment, which in turn led to job losses and business closures.

Real estate prices also fell significantly during the Great Depression. Many people were unable to afford to keep their homes or buy new ones, leading to a surplus of available properties and a corresponding drop in prices.

However, life insurance companies displayed a surprising level of resilience during the Great Depression. While it was a challenging time for these companies, as it was for the entire economy, they weathered the storm better than many other types of businesses.

For this reason, an entire generation of individuals put a premium on permanent life insurance as an investment. It was all they had left once the dust of the Depression had settled.

Nevertheless, the next generation of Americans forgot about the depression and the value that permanent life insurance had played in their parents’ survival. Even with insurance strategies that significantly increased investor returns, financial advisors focussed on their personal AUM continued to treat it like a red-headed stepchild.

As you may know, I am an advocate of permanent life insurance, specifically overfunded type policies such as Wealth Formula Banking and Wealth Accelerator. They have been a source of profitability and stability for me. Even in times like now where my portfolio has taken such a beating, I can count on the insurance portion of my net worth.

As I thought about that last week, I decided to bring it back on your radar so I invited our insurance partners back to the show. If you haven’t yet secured permanent life insurance as part of your portfolio, you will want to make sure you listen to this week’s episode of Wealth Formula Podcast.

Rod has been in financial services since 2009. Prior to going into business for himself, he worked in marketing and finance with several small businesses. He had the opportunity to purchase an existing furniture business in 2007, just prior to the Great Recession. The experience of struggling to stay afloat amid difficult economic conditions inspires Rod every day in his efforts to educate and assist his clients in implementing sound financial strategies.

He strongly advocates for establishing a firm foundation, utilizing proven strategies and financial tools to create a strong base upon which we can each build our financial house. In addition to focusing on Wealth Formula Banking and Velocity Plus, he has expertise in retirement income planning. Rod has a bachelor’s degree in Marketing Communications, and an MBA with an emphasis in Entrepreneurship.

He and his wife Jodi are the proud parents of 7 wonderful children. As a family they thrive on spending time exploring nature, playing games and doing projects together. He enjoys sports, music and reading.

Brenyn started in the finance industry in 2019 after he graduated with a bachelor’s degree in Marketing with a minor in Management from Utah Valley University. While Brenyn was in school, he managed a sales team in New York and Connecticut for 3 years. He learned while training, mentoring, and leading more than 75 sales reps that most of his reps had very little financial education. This ignited Brenyn’s own financial education and is what ultimately guided him into the financial industry.

Brenyn started at a finance firm in Salt Lake City and quickly built his own practice with the same ideals and strategies that we believe in. Naturally, this led to a great fit between Brenyn and the Wealth Formula Banking team. He joined the team in 2020 and helps facilitate the education, implementation, and ongoing strategic review efforts of our clients. He is also our resident expert in disability income insurance.

Brenyn enjoys furthering his education in the alternative investment space through books, podcasts, and webinars. He has been married for 5 years to his wife Aubri, and they enjoy boating, camping, and traveling.

Shownotes:

How did the concept of permanent life insurance come into existence in the first place?

How did global events such as world wars, economic depressions and pandemics have impacted the insurance industry?

Indexed Universal Life vs. Variable Life Insurance

Wealth Accelerator

**372: What You Need to Know About AI** Jun 11, 2023
With rising interest rates, I keep getting questions about whether value-add real estate is dead.

The answer to that question is a firm no. Remember, people have made money and lost money in all kinds of interest rate and cap rate environments.

The interest rates we have right now aren’t even close to the highest they have been in the United States. So why is there so much distress in the real estate market and all other correlated markets then?

The biggest problem that the Fed has created for us is that they did not react to inflation fast enough and so it got out of hand. They ended up having to play catch up and raise rates at the highest slope in American history.

All markets hate instability and extremely rapid rising rates wreak havoc on all of those markets that we typically rely on for investments including real estate and equities. This is particularly problematic for floating rate scenarios and for businesses that need liquidity. Banks don’t like to lend when rates are moving up quickly.

The truth is that I don’t know anyone who hasn’t lost money during this period of time—whether that be in real estate or stocks. That doesn’t mean it feels good although misery does love company. The key, as I will continue to emphasize, is to be prepared to mentally cut against the grain of fear. Investing money while you are down is extremely counter-intuitive to the human psyche.

Fear is designed to protect us. If you were running from a lion, you wouldn’t be inclined at that moment to consider how you might avoid running into one in the future. You would be focused on the danger at hand.

That reaction of focusing only on the danger might be useful in the wild. But when it comes to investing, it could prevent you from keeping your eyes out for great opportunities. While they might not be here yet, be prepared mentally. These are the times when investors with ice in their blood make a lot of money.

Use this time to get the rest of your house in order. Get your asset protection and estate planning in place. Start learning about other sectors. The truth is that there is almost always something to invest in if you know how.

How about tech? How much do you know about artificial intelligence? Probably not much. I don’t either. But it’s clear that this is going to be life-changing technology for better or worse so maybe we can make money off of it.

Today, we are going to spend some time talking to an expert in artificial intelligence.

I urge you to listen to this episode. I learned a great deal and it opened my eyes to its potential. Listen HERE

After starting his business in possibly the worst year for financial markets i.e. 2008, Shashank Shekhar has led the company to be one of the fastest-growing mortgage companies in America by helping thousands of families secure better financing for their homes. In 2017 and 2021, InstaMortgage Inc. (formerly known as Arcus Lending Inc.) was named to the Inc. 500 list of the fastest-growing private companies in America (aka “Most Exclusive Club in Business”). The company was also named to the 2021 Deloitte Fast Tech 500, ranking higher than household names like Zoom, Pinterest, and Square.

This dramatic growth has been built on the pillars of legendary customer service and an unrelenting focus on education. Shashank lives and breathes the mantra “We are in the customer service and education business, we just happen to do mortgages.”

Amazon.com #1 best-selling author Shashank was named “2022 & 2023 Entrepreneur of the Year” by Stevie Awards. He was the expert guest of the TV and radio show – “Mortgage Matters” and the author of widely acclaimed books – “First Time Home Buying 101”, “Real Estate Unleashed” and the latest #1 best-seller “My First Home”.

Besides writing one of the top mortgage blogs in the country, Shashank also gets invited to blog on several of the top websites and gets frequently quoted in national and international media. He was interviewed by Emmy Award-winning director Nick Nanton on his TV show. He is the host of “Shashank Redemption” podcast where he talks about entrepreneurship, startups, and FinTech,

In September 2020, Shashank led his team to create, Rachel, the world’s first digital human in the mortgage industry.

Shashank is also a regular on the speaking circuit with frequent keynote talks at Mortgage, Real Estate, and Small Business events.

Shownotes:

What is Artificial intelligence?

ChatGPT’s accuracy

What is going on with AI and real estate?

InstaMortgage.com

371: Ask Buck June 2023 Jun 04, 2023

This week’s Wealth Formula Podcast features me trying to answer your questions. Make sure to tune in as I try to answer questions about interest rates, the state of value add real estate and Central Bank Distributed Coins! Listen HERE

**370: Psychological Components to Investing and Retirement When the Economy is Screwed** May 28, 2023
Joe Biden says the economy is “strong as hell” but he’s wrong. Interest rates increasing at the steepest slope in history over the last year have caused a serious problem for the economy and hell is about to break loose.

I’m not the zombie apocalypse type but I have seen some shady-looking dead people walking around with silver dollars in my yard and I am a little concerned.

Bankruptcies are up 216 percent on the year, higher than the 2008 crisis and double that during the Covid lockdowns. This is *before* a recession has even been declared.

Banks aren’t lending. Much like they did in 2008, they are sitting on bailout money. Not only does this cause bankruptcies but it also keeps healthy companies from thriving.

The Federal Reserve has really screwed us and it could take a while before we dig ourselves out of the impending mess. It doesn’t help that the current administration appears blind to the problems that we face.

We as real estate investors are not immune from the carnage. We rely heavily on debt and those rates have made the markets illiquid and have significantly affected property values.

So we need to come to grips that there is a good chance many of us are going to lose some money soon. I know I have already.

But it is important to put things in context. The ride up has been fun. Anything people bought and sold between 2009-2021 invariably was a win. But that’s not how markets work. Everybody loses sometimes.

The key is understanding that to get ahead you have to win more than you lose. That means learning lessons when you lose and also not giving up.

In other words, just because you lose some money in this market doesn’t mean you don’t prepare yourself to take advantage of the same set of facts on the buy side. That would be a mistake.

Nothing that happens in the next year is going to kill you. Don’t lose sleep over it. This too shall pass.

My guest on Wealth Formula Podcast this week has thought and written a great deal about the psychology of investing and retirement. Listen to this interview as it may help you to navigate the headwinds before us.

Emily Guy Birken is a finance writer who writes the “Live Like a Mensch” column for The Dollar Stretcher. She is also a contributor to Wise Bread, PT Money, Money Crashers, Yahoo! Finance, and Business Insider, and many other personal finance sites. She edits and writes for the FinCon blog, an annual conference for financial bloggers. She is the author of The 5 Years Before You Retire, Choose Your Retirement, Making Social Security Work for You, and End Financial Stress Now. You can visit her at SAHMnambulist.blogspot.com.

**369: Big Government Craziness in a Troubled Economy** May 21, 2023
I was a surgical resident for years. I started out as a neurosurgeon, moved over to Otolaryngology Head and Neck Surgery then ended up in cosmetics.

During my training, it didn’t matter how much I worked. I would always get the same paycheck. I wasn’t lazy but I certainly didn’t enjoy working for what amounted to minimum wage. And I was not about to volunteer for any more work than I was assigned.

Eventually I did finish training and I was hired by a facelift company. I know it sounds kind of weird but they would recruit patients with questionable marketing tactics and hired an army of young surgeons to do the work.

I got paid about 15 percent on revenue I generated for the company. They didn’t charge as much as your typical facelift surgeon, but because I was doing 3-4 facelifts a day, it turned out to be really good money. For reference, my most recent job was as a chief resident in San Francisco for which I was paid $50K per year (that’s poverty in SF).

The day I became a capitalist was the day I got my first *real* paycheck. In two weeks, I made more than I did in my entire surgical internship year. It blew my mind.

Suddenly I realized that the harder I worked the more money I could make. And that made me work really hard! Suddenly, I was more than happy to put in long hours. I enjoyed doing the procedures and I was good at it. But I also liked the idea that my work was getting proportionally rewarded with dollars.

There was a noticeable change in my spirit. Even though I didn’t own the place, I cared about the office and wanted to make sure we were doing a good job. I took ownership and that mattered. After all, in the history of the world, no one ever took a rental car to the car wash.

Of course, like all entrepreneurs, I eventually realized that there was an even better way to make money than getting paid for the amount of work I did for the business—own your own business.

I went on to start multiple businesses and the rest is history. But the moral of the story is that opportunity for those who have talent and work hard is endless in our country and getting paid for the first time gave me my first taste of that. Anything that threatens that reward system threatens the very core spirit of who we are.

Of course not everyone shares my views—especially these days. And it’s not always as simple as perhaps I make it sound. We still need to take care of people in need and we still need to provide opportunity for the underprivileged.

This became even more evident during Covid when people simply couldn’t work. But I fear some of the remedies of a difficult time have permanently altered our culture. After all, it is difficult to take things away from people after you give it to them.

My guest on Wealth Formula Podcast today was right in the middle of policy making during the Covid crisis and was making decisions like what to do about people who couldn’t pay their rent.

What makes his perspective interesting is that he is a libertarian who works for a libertarian think tank. Find out how a small government guy navigated the biggest government intervention in American history on today’s economy on this week’s Wealth Formula Podcast!

Mark A. Calabria is a senior advisor to the Cato Institute. He provides strategic input and direction on the federal economic policymaking process. He previously served as director of financial regulation at the Cato Institute, where he cofounded Cato’s Center for Monetary and Financial Alternatives.

Calabria is the former director of the Federal Housing Finance Agency, which regulates and supervises Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. During his service at the agency, Calabria led the response to COVID-19, as well as laid the groundwork for a removal of Fannie Mae and Freddie Mac from government conservatorship.

Prior to his heading of the Federal Housing Finance Agency, Calabria served as chief economist to Vice President Mike Pence. In that role, he led the vice president’s work on taxes, trade, labor, financial services, manufacturing, and general economic issues, including serving as a key member of the team that enacted the Tax Cuts and Jobs Act of 2017 and on the team that crafted the United States‐Mexico‐Canada trade agreement. Calabria served as the vice president’s primary representative for the U.S.-Japan Economic Dialogue.

Calabria served as a senior aide to the U.S. Senate Committee on Banking, Housing, and Urban Affairs under chairs Richard Shelby and Phil Gramm. During his Senate service, he acted as the primary drafter of the Housing and Economic Recovery Act of 2008, which established a stronger regulatory framework for the government‐sponsored housing enterprises. He also led the banking committee’s response to Hurricane Katrina, as well as its work on the Shelby‐Dodd Flood Insurance Reform and Modernization Act of 2008, which served as the basis for the Biggert‐Waters Flood Insurance Reform Act of 2012.

Prior to his Senate service, Calabria served as the deputy assistant secretary for regulatory affairs in the Office of Housing at the U.S. Department of Housing and Urban Development. Calabria has also held positions with Harvard University’s Joint Center for Housing Studies, the National Association of Realtors, and the National Association of Home Builders. He holds a doctorate in economics from George Mason University.

Shownotes:

Risk-Based Pricing in Financial Services

The Importance of Credit Scores

Limitations of Landlord-Eviction Pause

The Soundness of the Banking System

Market Caution and Investment Opportunities

Federal Reserve Actions and Inflation

**368: Your Bank Probably Owes You Money** May 14, 2023
When I was a kid, my dad deposited $1,000 for me and my two siblings at a local bank. I’m not exactly sure why he did that, but what I do recall is that my older siblings showed me that I could go into the bank every couple of months and ask for “interest.”

I remember being about 7-8 years old and riding my BMX bike to the local bank with my bank passbook in hand. For those of you who remember, the passbook was kind of like a passport with your bank information. Every time you made a deposit or withdrawal, they would put the record in there.

This was the early 1980s, and interest rates were exceeding 15 percent. Now I don’t know exactly what my rate was, but I do remember coming out of that bank with serious dough—like 20 bucks at a time. To celebrate, I’d cross the street and get myself a 99-cent McDonald’s cheeseburger.

Times have changed. No more passbooks, and I doubt the bank would let my 8-year-old daughter walk in and ask for the interest on her account. In fact, they would probably laugh at her and tell her that banks don’t pay interest anymore.

But wait…should they be? Back in those high-interest days, people were getting 10 percent interest on their money and living off of it. Of course, for the last several years, we have been accustomed to near-zero interest rates. It was great for taking out loans but not great for deposits.

The thing is that now interest rates have risen back to levels more consistent with historical levels, and banks really ought to be paying us more interest. They know that.

But as my buddy Peter Arts recently pointed out to me, they aren’t going to offer it to you unless you ask. Pete’s my old neighbor in Chicago and knows the banking system as much as anyone else.

He’s getting over 5 percent on his money sitting in the bank, and he says we should be too. Simple tweaks to make you thousands of dollars per year sounded like a great reason to interview him for this week’s Wealth Formula Podcast.

Not listening to this podcast could literally cost you tens of thousands of dollars, so make sure to tune in!

Peter Arts served as the Bank of Montreal’s Global Asset Management’s global head of liquidity for the last ten years. In addition, he was also the head of U.S. private debt, taxable fixed income, and Canadian fixed income. He oversaw $50 billion in assets across Toronto, Chicago, and London, managed by a global team of portfolio managers and credit analysts. He has also served on global committees for counterparty investment and risk.

Shownotes:

Insights on Banking and Interest Rates

What happened with SVB?

What is the difference between SVB and larger banks?

Banking for Profit and Economic Indicators

**367: Is Buying Gold a Good Idea or Not?** May 07, 2023
When new listeners of Wealth Formula Podcast tell me they started from the beginning to catch up, I cringe a little bit.

It’s not that the original material was bad. For me, it’s just like looking at pictures of guys in the 80s with feathered hair (Think Dukes of Hazard). Or guys with perms.

At the time it seemed like a good idea but it isn’t anymore. But then again, maybe it will be back in vogue again in the future. (P.S. PLEASE MOM JEANS BE A THING OF THE PAST!)

Like hairstyles through the decades, my views on personal finance have changed with time and some have gone full circle.

Was I wrong before and right now? Not really. My perspective is just different. And, I suspect 5 years from now I will, again, cringe at some of the things I am saying today.

Like many guys approaching 50, I am becoming a little bit less dogmatic about my opinions than before— a little more open-minded.

For example, I no longer look down on people who invest in stocks and bonds. In fact, it might not be a bad idea to grab a Vanguard index or two while the markets are in the toilet.

That said, I’m still deeply dedicated to the alternative asset space. At my core, I’m a real estate guy but I’ve even opened up to other alternative assets lately.

My opinions on gold as an alternative asset have been the most dynamic throughout the years. I started out telling people to buy gold and to load up on silver dollars.

I was telling people to buy monster boxes of American Eagles in preparation for the Zombie Apocalypse—because everyone knows Zombies only accept silver coins as tender.

Then one day I became violently against buying precious metals. I didn’t see the point. What do precious metals do that real estate does not? Both are physical inflation hedges but real estate cash flows and has tremendous tax advantages. The IRS code for gold profits is downright punitive. And where would I bury it?

Then some banks started failing and I started to see a glimpse of the doomsday perspective again and it started to make more sense to own some gold. To be clear, I still don’t own any gold now. I just have that monster box of silver coins sitting somewhere in a nuclear bunker.

So now, I’m back in the camp of “maybe I should buy some gold”.

But… I’m still not sure. I’m listening and reading to a lot of people on this topic. One of the more respected gold bugs out there is Brien Lundin. Brien is a very rational guy on the topic and has a great newsletter to boot.

This week on Wealth Formula Podcast, I pick Brien’s brain on the whole topic of gold again. It’s a conversation worth listening to.

Listen NOW!

With a career spanning four decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, Inc., a highly regarded producer of investment-oriented events and publisher of investment newsletters and special reports. Under the Jefferson Financial umbrella, Mr. Lundin serves as publisher and editor of Gold Newsletter, the publication that has been the cornerstone of precious metals advisories since 1971, and as the host of the annual New Orleans Investment Conference, the oldest and most respected investment event of its kind.

As editor of Gold Newsletter, Mr. Lundin covers not only resource stocks, but also the entire world of investing, from small-caps of every type to macroeconomics and geopolitical issues that ultimately affect every investor. As host of the New Orleans Investment Conference, Mr. Lundin has annually brought the giants of investing, economics and geopolitics together in intimate presentations with many of today’s most sophisticated private investors. In all of these endeavors, Mr. Lundin has striven to burnish the brilliant legacy of the late James U. Blanchard III, his great friend and the founder of both Gold Newsletter and the New Orleans Investment Conference.

Shownotes:

What gives gold its value?

Physical gold versus gold stocks

The New Orleans Investment Conference

Why should you consider owning more inflationary-hedged assets like gold and real estate?

**366: Book Club: Die with Zero** Apr 30, 2023
I used to be a guy who prided myself on being a minimalist. Despite doing pretty well for myself financially, I drove the same 2007 Prius I bought the day after residency until just a couple of years ago.

My clothes often didn’t fit and I never shaved. Oh yeah—I was about 25 pounds heavier because I didn’t really care how I looked. I also didn’t really spend much on vacations or special events— I used to just blame that one on parenthood.

It’s funny because I sort of took pride in my rejection of material possessions and my frumpy looks. I was sort of giving society the finger.

Then all hell broke loose: namely the beginning of Covid lockdown and the end of my marriage. They kind of happened at the same time so it was a little rough.

Confused and disoriented, I didn’t know what to do so I just began to hike the beautiful mountains in Montecito. It reminds me of the movie, *Forrest Gump*, where Forrest just decides to run one day and keeps going back and forth across the country until he seemed to figure something out.

I hiked so much during those days that I pretty quickly shed most of my extra weight. Meditating on my life through those gorgeous trails every day made me see myself for what I had become: kind of repulsive.

Ok, so maybe that sounds a little harsh but that’s the way I saw the old me. I needed to update my self-image for myself.

It started out with the material things. I bought that Italian sports car I always wanted. I bought clothes that actually fit me and that were younger than my children and I started to take my health seriously. Oh… and I started shaving every day.

They say the Chinese word for crisis is the same as the word for opportunity. Well, I took this crisis as an opportunity to overhaul my life and to start over.

In starting over, I became acutely aware of the time I had wasted not living the life I want: material or otherwise. I just didn’t want to spend the money. But why wasn’t I spending any of this money that I was working so hard to make?

After all, I can’t take the money with me after I’m gone. I’d already done a good job of setting my kids up with assets and insurance. Why not spend on me?

Well, that’s what I started doing! And I have to tell you it’s a lot more fun than the alternative. And maybe I’m spending too much now, but I also have a lot of time to make up for.

So now I’m buying the stuff I want and also living a life full of new experiences. The funny thing is that this was supposed to be about me, but I found that this change has also been great for my daughters as we now travel more and go to a lot of cool events.

So why do I bring this up? Well, a couple of months ago, a friend and WF listener texted me and suggested I read a book by Bill Perkins called *Die with Zero* and it seemed to encapsulate so much of my new ethos that I wanted to share my thoughts on it with you. So I grabbed a couple of familiar faces to do a little book club on this week’s Wealth Formula Podcast. Make sure to tune in!

Rod Zabriskie has been in financial services since 2009. Prior to going into business for himself, he worked in marketing and finance with several small businesses. He had the opportunity to purchase an existing furniture business in 2007, just prior to the Great Recession. The experience of struggling to stay afloat amid difficult economic conditions inspires Rod every day in his efforts to educate and assist his clients in implementing sound financial strategies. He strongly advocates for establishing a firm foundation, utilizing proven strategies and financial tools to create a strong base upon which we can each build our financial house. In addition to focusing on Wealth Formula Banking and Velocity Plus, he has expertise in retirement income planning. Rod has a bachelor’s degree in Marketing Communications, and an MBA with an emphasis in Entrepreneurship. He and his wife Jodi are the proud parents of 7 wonderful children. As a family they thrive on spending time exploring nature, playing games and doing projects together. He enjoys sports, music and reading.

Christian Allen joined the financial services industry in 2004. Over the course of his career to date, he has developed a broad-based knowledge and experience set. He began as a traditional advisor, working with local clients in his home state. In that context, he began a movement of successfully partnering with other professionals, including accountants and attorneys, to assist clients in implementing sound financial strategies. He spent more than five years in management with 2 regional planning firms, during which time he assisted new and seasoned professionals in creating efficient systems and methods to build meaningful practices. Over the last several years, he has expanded to working across the country, teaching financial principles, and working with clients across a broad spectrum, including wealth accumulation, retirement distribution planning, as well as innovative, advanced planning strategies for both high-income and high-net-worth individuals and businesses. He’s a member of AALU, and holds the designations of Accredited Asset Management SpecialistSM and Accredited Wealth Management AdvisorSM Christian is married and has two children, and is an avid sports fan.

Shownotes:

Die with Zero by Bill Perkins

Is there a benefit to getting convertible term insurance now?

How can you enjoy your life right now without worrying too much about retirement?

Rod and Christian’s event: https://mivirtualsummit.com/

**365: Crisis=Opportunity for Governments to Seize Control** Apr 23, 2023
Government is a funny thing. It is an organization that makes and enforces rules and regulations. The more rules and regulations it makes, the bigger it gets. It’s a monster.

Government is also a significant employer that doesn’t seem to care much about being lean and profitable. Instead, it thrives on making itself even bigger and creating more things to control.

But as the government starts to infringe on people’s perceived personal space, people start to push back and that is the only force that resists this monster’s thirst for power.

Make no mistake, during these times when governments are held in check by their people, the monster’s appetite for power and growth does not go away. It lurks in the background waiting for its opportunity to pounce.

That opportunity comes when people are at their most vulnerable—in times of crisis. When things go south, people are willing to give up more of their freedoms in exchange for stability. Governments are more than happy to oblige.

Just think about some of the crises in recent history and the government response to those events: The Terrorist attack of 9/11, the 2008 financial crisis, Covid, and the Silicon Valley Bank failure. In each situation, the government found an opportunity to change the rules and obtain more control.

This playbook isn’t just a conspiracy theory. It’s just how things work. Mainstream government figures will tell you the same as you’ll find out in this week’s episode of Wealth Formula Podcast.

Listen Now!

Alex J. Pollock is a Senior Fellow with the Mises Institute, providing thought and policy leadership on financial issues and the study of financial systems. His work includes cycles of booms and busts, financial crises with their political responses, housing finance, government-sponsored enterprises, risk and uncertainty, central banking, banking and financial regulation, corporate governance, retirement finance, student loans, and the politics of finance.

He previously served as the Principal Deputy Director of the Office of Financial Research in the U.S. Treasury Department 2019-2021. He was a Distinguished Senior Fellow with the R Street Institute 2015-2019 and 2021, and a resident fellow at the American Enterprise Institute, 2004-2015. Among the many aspects of his AEI work, he developed the One Page Mortgage Form to give borrowers in clear form the key information they need in order to know what they are committing themselves to. He was President and CEO of the Federal Home Loan Bank of Chicago from 1991 to 2004. There he invented the Mortgage Partnership Finance program, which successfully created front-end mortgage credit risk sharing beginning in 1997. His decades of banking experience include being a Visiting Scholar at the Federal Reserve Bank of St. Louis, 1991.

Pollock was a director of the CME Group 2004-2019 and of Ascendium Education Group 1989-2019. He is a director and past-chairman of the Great Books Foundation and a past president of the International Union for Housing Finance.

He is the author of Surprised Again! – The COVID Crisis and the New Market Bubble (2022), Finance and Philosophy—Why We’re Always Surprised (2018), and Boom and Bust: Financial Cycles and Human Prosperity (2011), as well as numerous articles and Congressional testimony.

Pollock is a graduate of Williams College, the University of Chicago, and Princeton University.

He and his wife, Anne, live in Lake Forest, Illinois; they have four grown children and ten grandchildren. His interests include political finance, policy, history, ideas, management, music, and the pursuit of clarity.

Howard B. Adler is an attorney and former government official. He served as Deputy Assistant Secretary of the Treasury for the Financial Stability Oversight Council, where his job was to monitor and remediate threats to the financial stability of the United States. The Secretary of the Treasury awarded him the Treasury Distinguished Service Award for his work. For over 30 years, he was a partner at the law firm of Gibson Dunn & Crutcher, LLP, where he was cohead of the firm’s corporate transactional practice. He received numerous professional accolades as a lawyer, including recognition by Chambers USA: America’s Leading Business Lawyers as a Senior Statesman and Tier 1 mergers and acquisitions and private equity lawyer in Washington, D.C.; Best Lawyers in America for securities law and mergers and acquisitions; and Super Lawyers for mergers and acquisitions and securities/ capital markets law. Prior to Gibson Dunn, he was Executive Vice President and General Counsel of The Riggs National Bank of Washington, D.C. Mr. Adler received his B.A. from The Johns Hopkins University and his J.D. from New York University School of Law, where he was Note and Comment Editor of the Law Review. Mr. Adler has served as a member of the Board of Governing Trustees of American Ballet Theatre, Treasurer of the Washington D.C. Bar and Secretary of the Johns Hopkins Alumni Council.

Shownotes:

Government agencies tend to use moments of shock in the boom and bust cycles to gain power

Is all finance political?

Surprised Again! – The COVID Crisis and the New Market Bubble

**364: Death Without Taxes** Apr 16, 2023
You know the old saying coined by Ben Franklin, “Nothing is certain except death and taxes”. Longevity science might eventually prove that death is not inevitable but for the time being it is.

As for taxes? Well, I’ve spent a lot of episodes talking about tax mitigation while you live and I know for a fact that a number of you are legally not paying income tax. (HINT: REP)

But there’s another kind of punitive tax called the estate tax (aka death tax) that kicks in when you die. The death tax is sometimes also referred to as the “stupid tax” because it has been creatively dealt with by savvy estate attorneys for years. They would tell you if you died with a ton of money without this kind of planning you might have been kind of stupid.

All of this stuff might seem a bit too sophisticated for your situation if you are not in the ultra high net worth crowd. After all, doesn’t that estate tax thing kick in at $25 million if you’re a married couple? Well…for now, yes. But various tax laws are changing and that amount gets cut in half in just a couple of years.

Do you think you are likely to have an estate of greater than $12.5 million ($6 million if single) by the time you die? If you listen to my podcast then there is a good chance the answer is yes.

In other words, don’t think that the world of irrevocable trusts and gifting does not apply to you because you aren’t worth that much today. It’s probably a pretty good idea for you to at least know your options.

Even if you believe you will never get that wealthy, there are some things that pretty much everyone should do when it comes to estate planning. These things are inexpensive and only have to be done once.

Whichever camp you fall in, this week’s episode of Wealth Formula Podcast will be of interest to you as I interview my own estate planning attorney, Joe Longo.

This topic might not sound sexy but I’m quite sure you will find this interview to be extremely useful and pragmatic. Make sure to tune in!

Joe began the LONGO LAW GROUP, LLP on the foundation of service of clients and results. He was influenced by his father, Dominic Longo, who founded Longo Toyota at a converted gas station with a 4 car inventory and eventually built it into a 22 acre facility housing the #1 selling car dealership in the world based on customer satisfaction. When most people are looking to hire a law firm its because they need something in the legal world accomplished. Its not to get overcharged and to have your attorney stop communicating with you. This firm’s philosophy is to provide the most vigorous representation, best service, ongoing communication, and at the most competitive rates. Joe has numerous Federal and State jury and bench trials under his belt, along with his sports practice that includes arbitrations, grievances, drug suspension hearings and appeals. Over the past two plus decades Joe’s practice has included Civil Litigation (business), Criminal (both State and Federal-Tax), Probate Litigation, Sports (MLB and NBA), Asset Protection, Trust and Estate planning. His clients have ranged from publicly traded, international, corporations, professional athletes, professional sports franchises, leagues, individuals, to volunteer pro bono work for indigent clients. Along the way he has taught law at Los Angeles City College, Mission College, and Pasadena City College, and is currently an Adjunct Professor at Loyola Law School. He has sat as a Judge Pro Temp in the Los Angeles Court System. He has been a Panelist on many law panels including “USC Gould School of Law— Institute on Entertainment Law and Business”, “Loyola Sports Law Institute on Collective Bargaining & Individual Contract Negotiation In Professional Sports”, and “Negotiation For Lawyers—Lessons from Baseball Salary Arbitration Cases” Joe is also the President of Paragon Sports International, LLC (www.ParagonSportsInternational.com).

Joe has attained an “AV” peer rating from Martindale Hubbell, the national directory of attorneys, indicating preeminent legal ability and the highest ethical standards. He is a member of the California Bar, the Beverly Hills Bar Association, the Los Angeles Bar Association, the Sports Lawyers Association, and The Wealth Counsel. He received his B.A. from Brown University in Rhode Island, where he was a starting Defensive Back on the Brown University Football Team in the mid 1980’s. He obtained his Law Degree from Loyola Law School in Los Angeles, CA. His charitable endeavors include sitting on the Board of Ability First.

**363: Know, Like and Trust is Not Enough** Apr 09, 2023
I have been at this alternate investment game since I finished surgical residency in 2009. Luckily, since then my wins have significantly outnumbered my losses and I have made a lot more money than I ever did as a physician.

But It hasn’t always been smooth sailing. The first apartment building I bought for myself in 2010 was a big flop. Why? Well, I knew how to do real estate from reading lots of books and crunching numbers, but I didn’t really know how to *not* get bamboozled. Let’s just say the seller in that first deal was *creative* with his financials and I didn’t anticipate blatant fraud while I was doing my due diligence.

I should have known better than to buy in a D-class South Side Chicago neighborhood anyways. I lost $300K when I sold that building but it was a tremendous relief to get it off my hands. Sound horrible, I know. But frankly, the amount I learned by experiencing my own personal real estate horror story was priceless. Since then, I’ve never lost money on any apartment building.

When I started investing in assets as a limited partner, the skill set for success was different. Early on, I was given some reasonable advice: Only invest with those who you *know, like and trust.* That’s not terrible advice but what I’ve realized over the years is that it is incomplete. There is a lot more to investing than to know, like and trust the operator.

For example, you may know, like and trust your brother-in-law who is starting out in real estate syndication. But that doesn’t mean he knows how to operate a multimillion-dollar asset. He may give it his best shot but that doesn’t make him competent and certainly does not put your investment in good hands.

Know, like and trust is only useful to the extent that it should give you some confidence that someone is not trying to rob you (on purpose). After that, you have to do your own research. Ronald Reagan used to say, “Trust…but verify”. You can trust the operator but you still need to verify their competence. Ask a lot of questions. Look at the qualifications of the team to carry out the business plan put forth and be cognizant of the operator’s track record.

If you do all of these things, you will *minimize* your risk of disappointment. I say minimize because there are no guarantees in the world of investing. In competent hands, real estate will provide a profitable outcome most of the time. But not always.

So what is an alternative investor to do? The task of vetting where you deploy your assets may seem both critically important and daunting. So, what are your options? Well, you could give up and invest in Vanguard ETFs. If you do that, you might be able to preserve your wealth but you aren’t going to get wealthy. Alternatives *create* wealth on a regular basis.

So what else can you do to maximize your chances of success? I have said this before but will say it again—there is great power in collective intelligence—especially if people bring different skill sets to the table. At the very least, creating such a tribe of like-minded individuals will help to pool the right questions to ask about any opportunity.

So how do you put together a tribe? After all, chances are that your friends and family are not into this stuff. If they are, you are all set. Otherwise, you may need to go to some in-person meetings like our Wealth Formula Events and network with others of like mind.

The concept of tribe is really important in alternative investing. My guest on this week’s Wealth Formula Podcast created a business to help various tribes to deploy capital in an efficient way. Make sure to listen in for some ideas on how you and your tribe could use these tools!

Tribevest CEO, Travis Smith, dreamed out loud about building generational wealth and forever altering our family’s financial trajectory. However, he’d never been introduced to ways of private investing, and wealth-building seemed out of reach. Travis and his brothers realized that they could overcome our lack of experience and know-how if we worked together.

But they had to confront the more obvious and immediate barrier — we lacked the capital required to break into wealth-building, freedom investments. By forming and funding an Investor Tribe, they unlocked a new future and the secrets of the wealthy.

Shownotes:

TribeVest.com/wf and use the code “**BUCK50”**

**362: Multifamily Real Estate is STILL the Place to Be** Apr 02, 2023
I am going to keep this brief because I have a cold and I don’t want to subject you to Sudafed altered commentary.

This week’s Wealth Formula Podcast features an interview with Jay Parsons who is Chief Economist at RealPage. He is an authority on topics affecting multifamily apartments which, of course, is of significant interest to us all.

The picture that he presents is one of transition. The short term is consistent with what we are already experiencing…pain.

But as I said last week, there seems to be an undercurrent of optimism for the near future given the significant interest from big money to invest in apartment buildings.

I was encouraged to hear what Jay had to say and I think you will be too.

Let me know what you think!

Jay Parsons serves as Senior Vice President, Chief Economist for RealPage, leading the Economist and Industry Principal teams to provide deep insights on market trends and consumer behaviors. He is a frequent author and speaker on topics affecting multifamily apartments and single-family rentals, including rental housing investment and asset management strategy, rental housing policy issues, risk mitigation and property management.

Jay has been cited in The Wall Street Journal, Bloomberg, The Financial Times, The Economist, and The New York Times, and he has appeared on CNBC and BloombergTV. His commentaries have been published by Barron’s, the Pension Real Estate Association, the Mortgage Bankers Association, the National Apartment Association, American Banker and GlobeSt.

**361: The Calm Before the Storm with Harry Dent** Mar 26, 2023
The Fed just raised rates another 25 basis points despite global banking instability and investor angst. This wasn’t a surprise. Curtailing inflation continues to be their primary motivation.

How long will the Fed continue to raise rates? Well, inflation has to be clearly under control and/or there must be something else that happens that threatens the global economy. Isolated bank failures remedied by corporate takeovers do not appear to be threatening enough.

So what is it going to take to get inflation really under control? I hate to say it but it’s hard to see inflation getting under control without increasing unemployment. You see, the economic pain is shaping up to be a top-down phenomenon.

Every day people have not felt the pain yet so they have not curtailed spending. When people either lose their jobs or start worrying about losing their jobs, inflation will finally be curtailed.

Until this happens, expect more of the same. The investor class is going to feel more pain. But as I’ve been emphasizing in recent podcasts, with pain comes opportunity and I continue to believe that is what we will see in the latter half of this year.

In this week and next week’s podcasts, you will hear a similar theme that should make you feel somewhat reassured if you invest in multifamily real estate. The common theme is that multifamily assets are favorable in down economies and that these assets have become a darling for large investors and institutions alike.

On this week’s Wealth Formula podcast, I interview Harry Dent. Harry is a really interesting guy. In recent years, he has been pretty pessimistic about the economy. And now, he’s raising even more red flags. But again, pay attention to what Harry thinks is going to happen with the economy as a whole and also his take on multifamily real estate.

Harry is also famous for his economic forecasts based on demographics which I find fascinating. It’s definitely worth a listen.

Tune in now!

Harry S. Dent, Jr. is a best-selling author and one of the most outspoken financial editors in America. Using proprietary research, Harry developed a unique method for studying economies around the world, and uses his analysis to provide insights on what to expect in the future.

Instead of focusing on endless graphs that assume people behave rationally, Harry instead looks at real people, making real economic decisions for themselves and their families. He combines demographics with actual spending to inform his research.

Harry received his MBA from Harvard Business School, where he was a Baker Scholar and was elected to the Century Club for leadership excellence. He then joined Bain & Company as a Fortune 100 business consultant and now heads the independent research firm HS Dent Publishing.

Since then, he’s spoken to executives, financial advisors and investors around the world about demographics and the power of identifying different trends. Harry has appeared on “Good Morning America,” PBS, CNBC and CNN, Fox News and is a regular guest on Fox Business. He has also been featured in Barron’s, Investor’s Business Daily, Fortune, U.S. News and World Report, Business Week, The Wall Street Journal, and many other publications.

Harry has written numerous bestselling books over the last few decades, from The Great Boom Ahead in 1992 to Zero Hour in 2017. In 2019, Harry published his latest book Spending Waves, where he shares decades of extensive research covering over 200 businesses across 14 different industries to give readers insight into business and investing trends for the years ahead.

Shownotes:

Why are economic recessions necessary?

Spending Wave Theory

Will there be another boom despite all the artificial debt leverage?

Where should people look to deploy capital over the next couple of years?

harrydent.com

**360: Real Estate Update with Jorge Newbery** Mar 19, 2023
Oh what a mess this economy is! Helicopter money during Covid and supply chain issues brought on inflation like we haven’t seen in decades.

To respond to this self-inflicted predicament, the Federal Reserve began raising interest rates at an alarming pace. Never have we seen interest rates rise at this steep of a slope—even in good old Paul Volker’s days.

Inflation has been going down for several months although the most recent CPI figure is still 6 percent. That is well above the 2 percent target the Fed has had for years.

That’s why Jerome Powell was so hawkish last week about continuing to raise interest rates aggressively. They could do that without worry if nothing bad happened.

But in the last week, something broke. Specifically, we saw bank failures of two regional banks. They weren’t doing anything nefarious. In fact, they seemed to be doing what they were supposed to do—investing in conservative bonds that became worthless as interest rates rose.

Things are moving quickly now. By the time I release this podcast a week from now, things could get a lot worse. So now, the Fed is in a pickle.

Usually, when something “breaks” like it did, that is a signal for the Fed to back off its hawkish stance. But with inflation still at 6 percent, that isn’t exactly an easy decision.

So what do I think is going to happen? Well, whether or not rates go up at the next meeting is irrelevant. Unless there are other signs of systemic weakness too hard to ignore, the Fed will continue to raise rates until inflation is tamed.

That is going to result in a lot more destruction to the economy than we see now. We are hearing all about banks right now but the real estate market is also about to see a reckoning.

I do believe within the next few months, there will be the proverbial blood in the streets. In that process, it is quite possible that you will lose some money. However, the most important thing is to keep a level head.

You see, it is in times like these that the most money is made. Those who are paralyzed with fear will lose out. Those who act rationally will win big. A buyer’s market in real estate will be here shortly.

This week on Wealth Formula Podcast, I speak with Jorge Newbery about the real estate and debt markets. Make sure to tune in!

Jorge P. Newbery is Founder and CEO of American Homeowner Preservation LLC, which crowdfunds the purchase of nonperforming mortgages from banks at big discounts, then shares the discounts with struggling homeowners. A 2004 natural disaster triggered the financial collapse of Newbery’s former business, leaving him with $26 million in debts he could not pay. Newbery rebuilt himself through AHP, sharing what he learned from his challenges to help families at risk of foreclosure stay in their homes.

**359: A Tax Update with Tom Wheelwright** Mar 12, 2023
If you want to build wealth quickly, you have to learn as much about tax mitigation as you can. Most of these mitigation opportunities are in the world of real estate and business.

However, there are creative (and legal) ways to mitigate taxes for W2 employees as well—just not that many. And sometimes it’s not obvious that, despite a very attractive tax benefit, you should probably stay away. I learned that the hard way by investing in oil and gas multiple times.

Oil and gas drilling comes up often for high-paid W2 employees because of the compelling ability to deduct most if not all of the investment in the first year. The problem is that oil and gas investing, by nature, is quite risky. After all, you’re essentially a speculator hoping your team hits a well. Oil and gas is also ripe with fraudsters and charlatans I have learned.

Unfortunately, after multiple investments in oil and gas almost a decade ago, I have yet to get even close to recovering my money on any of the investments. I stopped investing in oil and gas years ago and now have stopped even interviewing anyone in that space. You’re better off paying the tax in my opinion.

Fortunately, there are a hand full of other opportunities available that don’t rely on speculation or trusting PT Barnum types. For example, recently I interviewed a guy on short-term rentals. If I was a W2 guy, I’d be all over that.

Ultimately though, you’ve got to figure out a long-term plan that potentially can transform your W2 income into non-W2 income. We’ve talked about this on the show before. In order to accomplish a complex strategy like this you need a good CPA.

Tom Wheelwright, as you may know, is a great CPA. So, while you figure out who’s going to get your tax plan together, take time to listen to this week’s episode of Wealth Formula Podcast where Tom will update us on important new tax laws and give us some free tips on how to lower our tax bills. Listen now!

Tom Wheelwright is a CPA, CEO of WealthAbility (Tempe, Arizona) and Best-Selling Author of Tax-Free Wealth. Wheelwright is a leading wealth and tax expert, global speaker, and Entrepreneur Magazine Contributor. Tom is best known for making taxes fun, easy and understandable, and specializes in helping entrepreneurs and investors build wealth through practical and strategic ways that permanently reduce taxes.

As a Rich Dad Advisor to Robert Kiyosaki (Rich Dad Poor Dad), Tom frequently speaks at conferences worldwide to entrepreneurs on these topics. His work has been featured in The Wall Street Journal, Washington Post, Forbes, Accounting Today, Investor’s Business Daily, FOX & Friends, ABC News Radio, NPR, Marketplace and many more media.

Robert Kiyosaki, bestselling author of Rich Dad Poor Dad, calls Tom “a team player that anyone who wants to be rich needs to add to his team.” In Robert Kiyosaki’s book, The Real Book of Real Estate, Tom, himself, authored Chapters 1 and 21 of this book. Tom also contributed to Robert Kiyosaki’s Rich Dad Success Stories, Who Took My Money, Unfair Advantage, Why the Rich Are Getting Richer and More Important Than Money: an Entrepreneur’s Team.

Tom has written many articles for publication in major professional journals and online resources and has spoken to thousands throughout the U.S., Canada, Europe and Australia. Tom has also used his superior relationship and team building skills to advise the Canadian market in the art of investing in the U.S., by contributing to Philip McKernan’s South of 49 and Fire Sale.

For more than 30 years, Tom has devised innovative tax, business and wealth strategies for sophisticated investors and business owners in the manufacturing, real estate and high tech fields. His passion is teaching these innovative strategies to the thousands who come to hear him speak. He has participated as a key note speaker and panelist in multiple roundtables, and led ground-breaking tax discussions challenging the status quo in terms of tax strategies.

Tom has a wide variety of professional experience, ranging from Big 4 accounting, where he managed and led the professional training for thousands of CPAs at Ernst & Young’s National Tax Department in Washington, D.C., to in-house tax advisor for Pinnacle West Capital Corporation, at the time a Fortune 1000 company. Tom also served as an adjunct professor in the Masters of Tax program at Arizona State University for 14 years where he created the course for teaching multi-state tax planning techniques and personally taught hundreds of graduate students.

Tom has his Master’s of Professional Accounting degree from the University of Texas at Austin and his Bachelor of Arts degree from the University of Utah.

Shownotes:

What are some recent changes to tax laws?

Can you use short-term rentals as a tax-mitigation strategy?

WealthAbility

**358: The Personalization of Personal Finance** Mar 05, 2023
Why is decentralized finance advantageous? Let’s ask artificial intelligence. As you may recall from last week’s episode, ChatGPT is widely accessible to anyone right now.

Here’s the explanation on the value of decentralized finance from the ChatGPT software itself:

“Decentralized finance, or DeFi, is advantageous for several reasons:

Accessibility: DeFi allows anyone with an internet connection to access financial services without needing to go through traditional financial institutions or intermediaries. This opens up financial services to people who might not have had access before, particularly those in underbanked or unbanked regions.

Transparency: DeFi operates on a public blockchain, which means that transactions and financial data are visible to anyone. This transparency reduces the potential for fraud or corruption and allows for greater accountability.

Security: DeFi uses cryptography and smart contracts to secure transactions, making it difficult for bad actors to manipulate the system. Additionally, DeFi eliminates the risk of a single point of failure, which reduces the risk of a catastrophic failure of the financial system.

Interoperability: DeFi protocols are designed to be interoperable, meaning that they can work together seamlessly. This allows for greater flexibility and innovation in the development of financial products and services.

Efficiency: DeFi operates 24/7 and is not subject to the same regulatory constraints as traditional finance, which means that transactions can be processed quickly and at lower costs. Additionally, DeFi eliminates the need for intermediaries, which reduces fees and transaction costs.

Overall, these advantages make DeFi a compelling alternative to traditional finance, particularly for those who value accessibility, transparency, security, interoperability, and efficiency.”

Not bad for a robot, right?

Here’s the thing. Decentralized finance is going to become mainstream finance in our lifetime. Large institutions are going to have to adjust or they will be irrelevant as the phone booth 20 years from now.

So we need to understand what it’s all about and figure out how we can capitalize on it. My guest on this week’s Wealth Formula Podcast will give us a human expert’s opinion on why.

Listen NOW!

Emmanuel Daniel is a global thought leader in the future of finance. He is listed as a top 10 global influencer in the “Fintech Power50” list for 2021 and 2022. He is also an entrepreneur, writer and a model train enthusiast.

Much of Emmanuel’s writing is based on his experience in founding and running his TAB Global research and consulting house since 1996. Through platforms such as The Asian Banker and Wealth and Society, Emmanuel has had extensive contact with leaders in banking and finance around the world. He won the Citibank Excellence in Business Journalism for Asia in 1999 for his work on the internet in banking. “The Asian Banker Summit” won the best finance conference from the Asian Conference and Summit Awards in 2012.

In his first book, “The Great Transition – the personalization of finance is here” published in September 2022, Emmanuel outlines how the banking industry will evolve from being focused on platform technologies to a level of personalization never seen before. He describes the roles of cryptocurrencies, blockchain, gaming and other technologies in this transition.

The book features forewords written by former congressman Barney Frank, the co-author of the Dodd-Frank Act set of legislations that regulate the financial services industry in the US today and Richard Sandor, an innovator widely regarded as the “father of financial futures”.

His writing is also based on his extensive travel to more than 100 countries, and he is intent on visiting all. He posts regularly on his travels and is working towards his second book which is tentatively entitled “The Winning Civlisation” and due for publication in 2014.

As an entrepreneur, he was previously a member of the Entrepreneurs Organization (EO), a prestigious grouping of young business owners worldwide. He has served or is serving in advisory or consulting roles for various public and private sector institutions at any time, and is a well regarded confidante in leadership circles.

He is a well-regarded global speaker on a variety of topics. But he prefers working on strategic assignments with selected clients. He is sometimes interviewed on BBC, Bloomberg and CNBC.

Emmanuel was trained as a lawyer, has degrees from the National University of Singapore and the University of London, and attended a course on economics at Columbia University in New York. He travels widely and divides his time between Singapore, Beijing and New York.

Shownotes:

Is everything becoming “Financialized?”

What is the Personalization of Finance?

Central Bank Decentralized Currencies

The Winning Civilization

**357: Is Everything About to Change?** Feb 26, 2023
Ok, I know you keep hearing about how the world is going to look radically different soon. I have too.

But what is that radical change and when is it going to happen? I’m no expert in technology but it is clear that the radical changes we are expecting are coming from two emerging technologies: blockchain and artificial intelligence.

Blockchain really defines this thing that people call Web 3. We’ve talked about it before on the podcast but essentially Web 3 is the decentralization of various industries such as social media and finance (aka DeFi).

Artificial intelligence (AI) is the other technology that is supposedly part of this great disruption that is about to occur. We’ve seen it in action without necessarily thinking about it already. Look at the WAZE application for example where shortest driving routes are based on huge amounts of human generated data points.

In the last couple months, a new demonstration of the power of AI has come to surface and is widely available. It’s called ChatGPT.

Again, I haven’t used it yet but essentially instead of searching for something on google, ask ChatGPT anything and it will give you an answer. Ask it to generate a speech on interest rates and it will. Ask it to give you a summary of a book and it will. It’s really fascinating stuff that I wish I had during college to do all my homework but, as you can imagine, it also has the potential of being dangerous.

The problem is technology is growing at a faster pace than perhaps we are ready for. Just because these technologies are powerful doesn’t dissuade nefarious actors. It may be a bumpy road ahead.

This entire space is so complicated that I wanted to get a real expert to discuss it…especially this ChatGPT thing. That’s what this week’s Wealth Formula Podcast is about. This was a really fun interview to do and I encourage you to tune in NOW.

KARY OBERBRUNNER, is a Wall Street Journal and USA Today bestselling author of 11 books in multiple genres ranging from business to fiction to technology. He’s the founder and CEO of Igniting Souls and Blockchain Life. Together, these companies help authors, entrepreneurs, and influencers publish and protect their Intellectual Property and turn it into 18 streams of Income. In the past twenty years, he’s ignited over one million people with his content. He lives in Ohio with his wife, Kelly, and three children.

**356: Getting Your Assets in Gear with Garrett Sutton** Feb 19, 2023
The two most common mistakes I’ve seen people make in personal finance is to not think about asset protection and to not think about estate planning.

Not thinking about estate planning is sort of understandable. Death is a topic that many try to avoid. Some are even superstitious in that if they set up an estate plan, it could trigger their demise.

The topic this week is not estate planning but we’ve done that show in the past. Here’s a little hint: The bare minimum you need is a will and a living trust to keep your assets out of probate should you die.

OK, enough about estate planning. As I mentioned earlier, failure to implement a reasonable asset protection is the other most common mistake I see in new investors.

Now I get it. If you don’t have much then you have little to worry about. But once you start accumulating assets you’ve got to do something.

Let me explain why. If you are a real estate owner, you have got two enemies to defend against. The first is the tenant who slips and falls. The second is the guy with the broken bones your kid hit driving her new car. Either one would love to get at something valuable that you own in retribution (and probably a little greed).

That’s where asset protection comes in. And here’s the thing. If you set up good asset protection from the beginning you may not get sued at all. A lot of this legal stuff is optics.

If you put up a lot of walls and traps, you’re less likely to get sued in the first place because your estate will start looking a little bit like a turnip to any attorney working on contingency.

Asset protection can be fairly simple but needs to be done right. My guest on Wealth Formula Podcast this week explains how and why that is important. He also spends a little time talking about tax advantages of producing movies which I thought was interesting as well.

Listen NOW!

Garrett Sutton has been practicing corporate law more than 35 years, assisting entrepreneurs and real estate investors around the world in protecting their assets and maximizing financial goals through his companies Corporate Direct and Sutton Law Center.

Garrett, a highly sought after guest speaker, serves as a member of the elite group of “Rich Dad Advisors” for bestselling author Robert Kiyosaki. Garrett has authored several successful books for business owners, including “Start Your Own Corporation,” “Run Your Own Corporation,” “Writing Winning Business Plans” and “Loopholes of Real Estate.” These books are part of the bestselling Rich Dad, Poor Dad wealth-building book series.

Shownotes:

How does an asset protection plan aid an investor?

Asset protection requirements for real estate and other types of investments

Movie investments

Veil Not Fail: Protecting Your Personal Assets from Business Attacks (Rich Dad Advisor Series)

**355: Should You Buy Gold?** Feb 12, 2023
When you are in the alternate investment space like me, everyone assumes you are a gold guy. I used to be. The idea of gold holding its value over time is very real.

An ounce of gold in the times Christ would buy you a nice toga and sandals. Now, an ounce of gold will buy you a nice suit and shoes.

Admittedly, that is a pretty darn good track record. So does gold belong in your portfolio?

Well, for me, gold is not an investment. It’s money. So to the extent that you may want to have some of your “liquid assets” in gold, it may make some real sense. It’s just hard to carry in your wallet.

I am still trying to find someone to convince me otherwise, but to me, real estate has all the qualities of gold that I want while providing additional benefits.

First, gold does not cash flow. When you buy real estate it should. In fact, with real estate, you can leverage and buy more of it and pay off the debt with income from the property.

You really can’t reasonably leverage the purchase of gold and, if you did, you’d have no income to offset interest rate payments.

Both gold and quality real estate are hedges against inflation. Residential property is particularly advantageous when it comes to inflation because leases are typically year to year and can keep up with the rise in the price of other goods and services.

But to be clear, this is just my opinion. I don’t own physical gold but a lot of smart people do. I don’t claim to be right in that regard. Personal finance is…personal.

On this week’s episode of Wealth Formula Podcast, I have a guest who speaks eloquently for the case of gold. Whether you are a gold bug or not, it’s worth a listen to help you make your own decisions.

New York Times bestselling author and radio personality Charles Goyette, known for his outspoken libertarian views and his economic commentary, has been described as a fearless champion of liberty, peace, and prosperity.

Charles and former presidential candidate and Congressman Ron Paul join forces on the nationally syndicated radio commentary Ron Paul’s America, heard twice daily on 125 radio stations. Charles also hosts Ron Paul – The Weekly Podcast, a sponsored, long-form discussion podcast.

Charles is the author of New York Times bestseller THE DOLLAR MELTDOWN and RED AND BLUE AND BROKE ALL OVER. He is the co-author of THE LAST GOLD RUSH… EVER!

Goyette spent many years as an award-winning and popular Phoenix radio personality with America’s leading broadcast companies, including Pulitzer, Hearst Argyle, and Clear Channel. Charles was widely known as “America’s Most Independent Talk Show Host,” and was voted Best Phoenix Talk Show Host by listeners who couldn’t get enough of his “Fearless Talk Radio.”

Charles has also been a participant in the national political debate as a popular public speaker and is often called upon to share his views with national televisions audiences, including Fox News, CNN, MSNBC, PBS, CNBC and Fox Business Channel. He has appeared often on popular programs like Fox and Friends, the O’Reilly Factor with Bill O’Reilly Fox News; Stossel with John Stossel and FreedomWatch with Judge Napolitano on Fox Business; NOW with Bill Moyers on PBS; and on Lou Dobbs Tonight on CNN, and many others.

He has written for a number of magazines including The American Conservative and Gannett magazines, and for LewRockwell.com, CNBC.com, WorldNetDaily.com, and TheStreet.com.

Charles Goyette is a U.S. Army veteran and a recipient of the Army Commendation Medal for meritorious service. Goyette had long rejected the U.S. national security policy known as Mutual Assured Destruction or MAD, in which the civilian population of the U.S. was rendered defenseless as a matter of policy and held hostages in the nation’s nuclear strategy. Before the election of Ronald Reagan, Charles became a supporter of a new defense policy to end the cold war standoff. After Reagan’s election, at the invitation of Reagan advisor General Daniel O. Graham, former Director of the Defense Intelligence Agency and Deputy Director of the CIA and the originator of the Strategic Defense Initiative, Charles became a member of the national speakers’ bureau of High Frontier, the private organization founded by Graham to promote what became known as Reagan’s Star Wars defense policy.

Beginning in 2002 with the lead up to George W. Bush’s elective war in Iraq, Charles Goyette found himself in a whirlwind of controversy and national attention for his outspoken opposition to the war. Accounts of his experiences opposing the war while a talk show host for Clear Channel Communications, the nation’s largest owner of radio stations and a company that had close ties to Bush, are available online, including the transcript of a speech called Wartime Confessions of a Talk-Radio Heretic he made to an economics group the very night the war broke out in March, 2003, as well as an account he wrote for the American Conservative magazine called How to Lose Your Job in Talk Radio.

During the Iraq war, Goyette became a regular contributor of geopolitical radio shows, commentary, and interviews to AntiWar Radio, a service of the leading website AntiWar.com.

On a more personal note, Charles is a founding member of the Board of Directors and recent President of the Leonardo da Vinci Society for the Study of Thinking. The Society’s annual inductees include theoretical physicist Michio Kaku, creative thinking theorist Edward de Bono, physicist Fritjof Capra, inventor and futurist Ray Kurzweil, biologist Lynn Margulis, and lunar astronaut Edgar Mitchell.

Charles has completed a screenplay on the life of the famous American seer Edgar Cayce.

Charles enjoys skiing, hiking, good company and conversation. He and his wife, Ali, live in Scottsdale, Arizona.

Shownotes:

The performance of the US Dollar versus gold

Is gold a wealth preservation tool or a wealth building tool?

Owning gold versus owning real estate assets.

The Last Gold Rush… Ever!

**354: Short Term Rentals=Hidden Tax Gems** Feb 05, 2023
I’ve never spent much time on the concept of short-term rentals (Vacation Rentals) before because it didn’t sound particularly appealing to me. But after interviewing Tim Hubbard for this week’s podcast, I may have changed my mind.

Here’s the deal. Unless you are a limited partner in a syndication, there is no such thing as truly passive income in real estate. If you want your asset to succeed, you are going to have to do some work for it. And for me, making $300 per month for anything that takes more than 10 minutes per month is not really acceptable.

But short-term rentals provide a sexier take on active ownership of real estate for busy professionals. Make no mistake, there will be some work involved. But now you may be making 5X the monthly income that you would with a traditional long-term rental.

Maybe the rental income is still not that compelling. But what if you started buying properties in places you might actually like to visit yourself on occasion? At any point in the future, you could theoretically flip the switch and make it all your own.

In the meantime, short-term rentals have extremely advantageous tax benefits—and not just to the real estate professional status types like me. **If done properly, you could have a short-term rental, do a cost segregation analysis and apply that depreciation to other active income.**

Let me reiterate that I am not a tax professional but my understanding here is that through material participation in short-term rentals, depreciation losses can be ACTIVATED and used against your W2 income.

If you can pull this off, the tax savings alone would be worth doing it in my humble opinion. With conservation easements pretty much DOA (victims of the IRS) and with oil and gas being full of crooks and fraudsters, short-term rentals could possibly be the best thing out there if you are trying to mitigate taxes.

If this sounds intriguing, I highly encourage you to listen to this week’s episode of Wealth Formula Podcast. At the very least, it’s an option you ought to know about.

Tim is originally from Sacramento, CA and started his career in real estate as an investment broker selling multi-family and commercial properties in Northern California. He worked with a small team of five who completed cumulatively over $2 billion in transactions. He has been personally investing in real estate for the last 11 years and has since acquired a multi-million dollar portfolio comprised primarily of small multi-family properties in multiple markets.
He has traveled extensively throughout the world in over 70 countries and stayed in hundreds of different short-term rental accommodations. About 7 years ago he realized the high returns that could be made from converting properties in to furnished short-term rentals and renting them by the night. Through trial and error he has figured out how to set up operations so that the business could be passive and has since successfully accommodated over 15,000 guests with excellent reviews from all over the world.

He continues to expand with the help of his teams and manages everything remotely from his home in Medellin, Colombia. He also teaches others to do the same and shows them how they can successfully increase their income 3,4, or even 8x by implementing the right strategies to convert existing long term rentals in to nightly rentals.

He holds a degree in International business and an MBA from the University of California, Davis.

He’s a co-author in the Amazon best-selling book “Resilience” and the host of the popular “Short Term Rental Riches” podcast.

**353: Updates from the Wild West of Crypto** Jan 29, 2023
Digital currency is not dead. But it was wounded pretty badly over the past few months.

Paradoxically, the undoing of the decentralized world happened from centralized companies and individuals like Do Kwon of Terra Luna and Sam Bankman-Fried of FTX.

Ultimately, the greed of both these individuals and the flawed platforms that they ran resulted in billions of dollars being lost in the market. No one was immune. Companies like BlockFi ended up declaring bankruptcy and others, like the Grayscale Bitcoin Trust (GBTC) are on the brink of insolvency.

Digital currency has never been a favorite of the SEC. This is an institution with a deep distaste for the wild decentralized west as it represents a very difficult animal to tame.

The IRS also wants to dig its claws into digital currency realizing that they are likely missing out on hundreds of millions of dollars in revenue because of people not reporting. They are also left with a huge challenge on their hands—trying to figure out who is misreporting.

Bottom line is that the climate is right for some serious changes to the law involving digital currencies.

This week, I speak to one of the foremost experts in cryptocurrency tax law to discuss the recent crypto collapse along with all of its implications. Make sure to tune in. There is some free tax advice in there for you as well if you own cryptocurrency!

Andie Kramer is widely regarded as one of the foremost authorities on the regulatory, tax, commercial, and governance matters that arise for individuals and businesses in trading environments. Andie represents multinational corporations, financial service firms, exchanges and trading platforms, hedge funds, energy companies, insurance companies, family offices, and businesses in all stages of their life-cycle. These clients are typically dealing with securities, commodities, derivatives, digital assets, energy (production and distribution), renewables, ESG (environmental, social, and governance) matters, nontraditional assets, and emerging asset classes of all types.

Andie is widely respected for her multidisciplinary knowledge concerning the legal issues arising in market and all types of products that trade in them and the participants which use them. She is a trusted advisor and sought-after problem solver who provides the comprehensive advice that clients need to navigate the complexities that arise from the intersection of multiple asset classes, commercial realities, and ESG matters. Before founding ASKramer Law, Andie spent 30 years at McDermott Will & Emery, where she established and led the Financial Products, Trading, and Derivatives Group.

She is the coauthor of Financial Products: Taxation, Regulation, and Design, the two-volume authoritative treatise widely used by market participants, advisors, and regulators. She has been ranked since 2009 by Chambers and Legal 500, the leading independent legal ranking firms. Andie was also named by the National Law Journal as one of the “50 Most Influential Women Lawyers in America” for “demonstrated power to change the legal landscape, shape public affairs, launch industries, and do big things.” The National Law Review recognized Andie as a “Go-to Thought Leader” in virtual currencies and J.D. Supra readers voted her a “Top Author” in cryptocurrency taxation. Additionally, she is qualified by the Financial Industry Regulatory Authority (FINRA) as a tax expert witness. Andie was selected by the Chicago Daily Law Bulletin and the Chicago Lawyer as an “Inaugural Women in Law Honoree”; by Crain’s Custom Media for the “Chicago Notable Women Lawyers” list; named by Women in Law Business Guide as one of the leading tax practitioners; and honored as one of the “Most Influential Women Lawyers in Chicago” by Crain’s.

Andie is also known for her longstanding work addressing and dismantling workplace gender discrimination. She served as a member of the Diversity & Inclusion Advisory Board for the Illinois Supreme Court Commission on Professionalism and was coauthor of What You Need to Know about Negotiating Compensation, a 2013 guide published by the American Bar Association. With her husband, Al Harris, she has written two award-winning books, Breaking Through Bias: Communication Techniques for Women to Succeed at Work and It’s Not You, It’s the Workplace: Women’s Conflict at Work and the Bias That Built It. Their forthcoming book, Beyond Bias: The PATH to End Gender Inequality at Work, will be released this spring.

Andie is a Phi Beta Kappa, summa cum laude graduate of the University of Illinois, where she received the Bronze Tablet Award, and she is a cum laude graduate of Northwestern Pritzker School of Law where she served as an adjunct professor for more than 20 years. She is an editor of and contributor to Energy and Environmental Project Finance Law and Taxation (2010) and Energy and Environmental Trading (2008).

Generously philanthropic and civically engaged, Andie is the recipient of the “Unsung Heroine Award” from the Cook County Board of Commissioners and the “National Public Service Award” from the American Bar Association for her public service and pro bono activities. She founded and serves on the boards of a number of nonprofits and professional associations. She is a founding board member and chair of TWTC (formerly The Women’s Treatment Center) that provides housing and healthcare support and assistance to Chicago’s most vulnerable residents. Andie is a co-founder and the chair of WLMA (the Women’s Leadership and Mentoring Alliance), and she serves on the board of the Design Museum of Chicago.

Shownotes:

The recent crypto meltdown

How did the FTX collapse affect the crypto sphere?

What do people holding cryptocurrency need to know to report their taxes appropriately?

Are there any laws that are different for 2023 than they were for 2022 that we should be aware of?

**352: You Can Live A LOT Longer Than You Think** Jan 22, 2023
What is all this wealth stuff for anyway? I have spent the last 15 years trying to accumulate wealth. It wasn’t until about two years ago that I decided to start spending it.

Why? Well, there were some major changes in my life and it made me think about mortality. Don’t worry…my health is great. But everyone has to die someday right?

Before this realization, I was doing what pretty much all responsible professionals do. I was working hard and wouldn’t spend much money on myself. In hindsight, I’m not sure what I was waiting for. I probably should’ve tried to spend more on myself in my 20s and 30s and had some more fun.

Of course, I can’t change that now. But what I can do is to start enjoying life and trying to figure out how to stay feeling young as long as possible so I can make up for lost time.

The good news for all of us is that there is an abundance of science and technology growth in the field of longevity and it’s developing fast.

We know so much more than our parents did on what to eat, how often to eat, how to optimize exercise and…what supplements and prescription drugs appear to lengthen not only lifespan, but more importantly, healthspan.

There is so much information out there that it is also a time to be careful. Just think about all the money fraudsters can make off people by selling them the fountain of youth.

As a physician myself (not practicing), I have spent a lot of time trying to understand what’s real and what’s not. Some of my friends and investors in our own community have pivoted their careers to the practice of longevity medicine. They know more than me.

One of these guys is Dr. Rob Hamilton. Rob spoke at our last Wealth Formula event and seriously blew the audience away with his presentation. He is an encyclopedia of knowledge in the field of longevity and my guest on Wealth Formula Podcast this week.

If this stuff is new for you, I urge you to start looking into what’s out there. After all, what’s the point of accumulating wealth if you don’t have a long healthy life to enjoy it?

Whether you are already on that journey or are interested in learning more, you will want to listen to this podcast. I’m biased because of my interests, but I think you might find this to be one of the most useful podcasts you’ve ever listened to in your life.

Doctor Rob Hamilton attended the University of Colorado for both his undergraduate degree (in Electrical and Computer Engineering) and medical degree. He completed residency in Emergency Medicine at the University of California in San Diego.
He worked in a variety of settings including serving as part-time faculty at the Stanford University Emergency Department, but eventually moved to Redding, CA, where he has served the North State Region since 2002 as an Emergency Physician at Mercy Medical Center Redding and St. Elizabeth’s Community Hospital in Red Bluff, CA.

He has also held a variety of administrative roles, including Medical Director of the MMCR ED and ultimately Regional Director of the North State Region for his medical group. In his capacity as an Emergency Physician he held a faculty appointment through the University of California Davis School of Medicine.

After taking care of thousands of patients in the Emergency Department, Dr. Hamilton realized one of his goals was to help his patients avoid the ravages of aging and the disease that followed. He pursued advanced training in Age Management Medical Education and worked with Cenegenics San Francisco. Dr. Hamilton completed additional Fellowship Training in Anti-Aging and Regenerative Medicine as well as Stem Cell Therapy. He was awarded a Ph.D. honoris causa in Regenerative Medicine from the PanAmerican University of Natural Medicine. To this day he continues to attend conferences and seek additional advanced training to improve and hone his practice and skills.

He partnered with the innovative direct primary care practice, Prestige Urgent Care, in Redding California to start Prestige Regenerative Medicine in 2015 and provides affordable care for patients across Northern California seeking his expertise in improving their lives and prolonging their health span. Dr. Hamilton now oversees the course of care and treatment protocols administered by all Prestige Regenerative Medicine providers nationwide.

Shownotes:

The Five Pillars of Anti-aging Medicine.

What is Chronobiology?

How important are diet, nutrition, and supplements?

Are there potential “anti-aging” medical interventions available today?

**351: Seeking Discomfort in Life and Business** Jan 15, 2023
If you read business or entrepreneurial books you are probably sick of people telling you that you have to take risks and get uncomfortable. I get it.

But what are you doing to take risks and to get uncomfortable? After all, it’s really the only way to grow in your career or in your life.

These concepts apply to everything. Think about all the things you didn’t do in life but would like to. Maybe you should try to do some of those things? After all, what’s the purpose of wealth? It is to have the freedom to focus on self-actualization.

Need an example? Well, I never learned to swim as a kid. I remember my older brother and sister going to swim lessons. I would go with my mom to drop them off. But I was terrified of anything but the baby pool.

When it came my turn for swim lessons, I declined. And, unfortunately, my parents didn’t push back. So, I spent a good chunk of my adult life not being able to swim and it bothered me.

As an adult, I tried private lessons on numerous occasions. I wasn’t afraid of the water anymore. I just couldn’t figure out how to move in the water.

I had given up until 5-6 years ago when I heard Tim Ferris talking about having a similar experience as an adult who couldn’t get swimming down. He also had multiple trainers who failed to get him functional in the water. That is until he met Terry Laughlin, the creator of the Total Immersion (TI) Technique. Tim said that Terry got him swimming laps by the end of a week.

Well, I had to give this a try. So I reached out to Terry who lived in upstate New York. As it turned out, he had end-stage cancer and hadn’t been doing lessons for some time. However, he had just finished chemo and was feeling a bit better so he invited me out anyway.

So a few weeks later, I was at Terry’s house out east in his training pool. The way Terry taught me was very easy and methodical. And believe it or not, by the end of the day, I was swimming. I stuck around for another day but had to get back to work. I figured I’d come back in a few months to get down the only part that I still struggled with—breathing. I wish I had stayed. Terry passed away just a couple of months later.

So now I can swim, but not long enough to do laps for exercise. I still can’t breathe. I tried another TI instructor, but it wasn’t the same. Terry was a master.

The point of this story is to illustrate getting uncomfortable to get over a lifetime full of anxiety and self-consciousness about being unable to swim. All I had to do was find the right instructor and be uncomfortable for a day.

You could probably apply this to things in your life. What have you been avoiding for the last few decades? Is it time to confront these things and move on with your life? You’d probably feel better. And if it’s something you need to do physically, well, you aren’t getting any younger either.

My guest this week on Wealth Formula Podcast has a unique take on risk and discomfort. He suggests that we should constantly be seeking discomfort in our lives. Maybe he’s right. Listen in and see what you think!

Sterling Hawkins is out to break the status quo. He believes that we can all unlock incredible potential within ourselves, and he’s on a mission to support people, businesses and communities to realize that potential regardless of the circumstances.

From a multi-billion dollar startup to collapse and coming back to launch, invest in and grow over 50 companies, Sterling takes that experience to work with C-level teams from some of the largest organizations on the planet and speaks on stages around the world.

Today, Sterling serves as CEO and founder of the Sterling Hawkins Group, a research, training and development company focused on human and organizational growth. He has been seen in publications like Inc. Magazine, Fast Company, The New York Times and Forbes.

Based in Colorado, Sterling is a proud uncle of three and a passionate adventurer that can often be found skydiving, climbing mountains, shark diving or even trekking the Sahara. Maybe you’ll even join him for the next adventure – and discover the breakthrough results you’re looking for. He’ll have your back, #NoMatterWhat.

Shownotes:

How Sterling’s journey started

How does one determine what type of discomfort can help them move ahead?

Hunting Discomfort: How to Get Breakthrough Results in Life and Business No Matter What

https://www.sterlinghawkins.com/

**350: Reagan’s Budget Director Forecasts Rocky Roads Ahead** Jan 08, 2023
We are in a unique period of time with the economy. We know something is going to declare itself soon enough but have no idea when or what it will look like.

This time it’s not just the contrarians. *Everyone* is predicting some kind of trouble in the coming months ranging from a mild recession (Biden) to an all out zombie apocalypse.

Even the big brain contrarians differ on what lies ahead. Jim Rickards sees a rapidly coming deep recession followed by the Fed capitulating its hawkish stance.

Nomi Prins forecasts a deep recession as well but sees the markets as relatively shielded because of a great distortion between the real economy and the financial markets as the Fed caters to what the markets need to grow.

My guest this week on Wealth Formula Podcast, David Stockman, differs from both Rickards and Prins. He believes that the Fed will not reverse its course regardless of recession and he also believes that what Prins describes as a distortion between financial markets and the economy will not last and that, rather, a great *catchup* will see the equity and real estate markets correct in significant fashion to reflect the fledgling economy.

David Stockman was Ronald Reagan’s budget director and was in Washington through hyperinflation and the Paul Volker years. He has also spent a significant time on Wall Street in his career. He knows what he’s talking about.

But so do Nomi Prins and Jim Rickards. None of them are dummies but they can’t all be right. That’s just the nature of the period that we are in. The best any of us can do is to study what the economic gurus are saying and try to make decisions based on what we can conclude for ourselves.

Listen to my interview with David Stockman HERE. And, if you haven’t done so, go back and compare these opinions with those of Rickards (episode 348) and Dr. Nomi Prins (episode 339). They all make sense but they can’t all be right.

Let me know what you think!

David Alan Stockman (born November 10, 1946) is an American politician and former businessman who was a Republican U.S. Representative from the state of Michigan (1977–1981) and the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan.

Stockman was born in Fort Hood, Texas, the son of Allen Stockman, a fruit farmer, and Carol (née Bartz). He is of German descent, and his family’s surname was originally “Stockmann”. He was raised in a conservative family; his maternal grandfather, William Bartz, was a Republican county treasurer for 30 years. Stockman was educated at public schools in Stevensville, Michigan. He graduated from Lakeshore High School in 1964 and received a BA in History from Michigan State University in 1968. He was a graduate theology student at Harvard University from 1968 to 1970.

He served as special assistant to United States Representative and 1980 U.S. presidential candidate John Anderson of Illinois, 1970–1972, and was executive director, United States House of Representatives Republican Conference, 1972–1975.

**349: The Next BIG Technology** Jan 01, 2023
The new year makes me think about how things keep changing so rapidly (including my age). For those of us who went to high school in the era of pay phones, it is a truly remarkable trajectory and it makes me wonder what the next few decades will unfold.

There are so many technological advances in Science and Technology that have already laid the foundation for a completely different world. As a former practicing physician, I can’t help but be excited about things like longevity science and potentially eradicating killer diseases such as cancer and cardiovascular disease

If you think that sounds far-fetched for the next decade, I would disagree. All those billionaires who made their money in tech now realize that they are getting older and will die someday. They don’t like that idea and now a ton of their money is going into research to battle death.

But how quickly can we get there? The problem in making those kinds of estimations is that we don’t know what other tools will be available to accelerate the work that needs to be done.

One of those tools that will play a major role in revolutionizing healthcare and pretty much everything else in our lives will be artificial intelligence (AI). AI sounds scary but we are already using some of it today. Think of the app WAZE which calculates shortest drives based on traffic etc. Just like this application sneaked into our culture, I think you will see a ton of new technologies like this in several fields. One day you’ll see it all around you.

Anyway, Artificial Intelligence is an exciting science and to help us learn more about it, I have an expert in AI on this week’s Wealth Formula Podcast. This is fun stuff that you might consider investing in. Listen now!

Avi Goldfarb is the Rotman Chair in Artificial Intelligence and Healthcare and a professor of marketing at the Rotman School of Management, University of Toronto. Avi is also Chief Data Scientist at the Creative Destruction Lab and the CDL Rapid Screening Consortium, a faculty affiliate at the Vector Institute and the Schwartz-Reisman Institute for Technology and Society, and a Research Associate at the National Bureau of Economic Research. Avi’s research focuses on the opportunities and challenges of the digital economy.

Along with Ajay Agrawal and Joshua Gans, Avi is the author of the Globe & Mail bestselling book Prediction Machines: The Simple Economics of Artificial Intelligence.

He has published academic articles in marketing, statistics, law, management, medicine, political science, refugee studies, physics, computing, and economics. Avi is a former Senior Editor at Marketing Science. His work on online advertising won the INFORMS Society of Marketing Science Long Term Impact Award. He testified before the U.S. Senate Judiciary Committee on competition and privacy in digital advertising. His work has been referenced in White House reports, European Commission documents, the New York Times, the Economist, and elsewhere.

Shownotes:

What is Artificial Intelligence?

The disruptive economics of Artificial Intelligence

What are the big opportunities using AI that are out there right now?

Power and Prediction: The Disruptive Economics of Artificial Intelligence

**348: Jim Rickards: Inflation, Interest Rates and the Supply Chain** Dec 25, 2022
I hope you all had a wonderful Christmas! As we head into the last week of the year there is much to reflect upon.

The last few years have been absolutely bonkers. If someone had told me in mid-2019 that a global pandemic would happen, and the world would be practically paralyzed for the next two years I would never have believed it.

Oddly, during 2020-2021, the stock and real estate markets did great! Historically low interest rates made cheap money abundant for investors and, for that reason, the markets paradoxically rose as the real economy actually shrunk.

Nomi Prins talked about this phenomenon on one of our past shows—“The Great Distortion” refers to the decoupling of financial markets with reality.

While monetary policy made asset prices rise, fiscal policy contributed to inflation. Certainly, supply chains created problems of low supply. But helicopter money gave people extra money to spend and a huge injection of liquidity directly onto Main Street.

The fact that we have been dealing with high inflation, therefore, should not be a surprise. It’s simply policy chickens coming home to roost. And when there is high inflation, rates must go up and that’s exactly what happened.

What happens next is the big question. The Fed has never raised interest rates over 400 percent in 9 months. Usually, a small change in interest rates isn’t really accounted for in the economy for about six months.

The economy and inflation have clearly slowed down but what happens in the next few months will be very interesting. Will we indeed have a deep recession? And if we do, does the Fed reverse course on its hawkish stance?

Interest rates will probably not go back to zero anytime soon. But remember, investors have always made money regardless of absolute interest rate percentages. There were investors making a lot of money even when interest rates were double digits. We just need a stable interest rate environment to get back to business and I do believe that will happen in 2023.

That’s my take on where we are now and what may happen. That said, as Yogi Berra said, “It’s tough to make predictions, especially about the future”.

All we can do is to watch and wait and hopefully educate ourselves a bit. That’s what this podcast is about and that’s why this week I interviewed one of the smartest people you’ll ever meet on these topics: Jim Rickards.

You won’t want to miss this show. LISTEN NOW!

James Rickards is the Editor of Strategic Intelligence, a financial newsletter, and Director of The James Rickards Project, an inquiry into the complex dynamics of geopolitics + global capital. He is the author of The New Case for Gold (April 2016), and two New York Times best sellers, The Death of Money (2014), and Currency Wars (2011) from Penguin Random House. He is a portfolio manager, lawyer, and economist, and has held senior positions at Citibank, Long-Term Capital Management, and Caxton Associates. In 1998, he was the principal negotiator of the rescue of LTCM sponsored by the Federal Reserve. His clients include institutional investors and government directorates. He is an Op-Ed contributor to the Financial Times, Evening Standard, New York Times, and Washington Post, and has been interviewed on BBC, CNN, NPR, C- SPAN, CNBC, Bloomberg, Fox, and The Wall Street Journal. Mr. Rickards is a guest lecturer in globalization and finance at The Johns Hopkins University, The Kellogg School at Northwestern, and the School of Advanced International Studies. He has delivered papers on risk at Singularity University, the Applied Physics Laboratory, and the Los Alamos National Laboratory. He is an advisor on capital markets to the U.S. intelligence community, and the Office of the Secretary of Defense, and is on the Advisory Board of the Center on Sanctions & Illicit Finance in Washington DC. Mr. Rickards holds an LL.M. (Taxation) from the NYU School of Law; a J.D. from the University of Pennsylvania Law School; an M.A. in international economics from SAIS, and a B.A. (with honors) from Johns Hopkins. He lives in New Hampshire.

**347: China is Cashless…Are We Next?** Dec 18, 2022
As you know, we have an Automatic Teller Machine offering and you can take a look at it at WFVelocity.com

I’ve personally been invested for 6-7 years without issue. That’s not surprising as the use of cash continues to increase in the US.

The biggest risk to investing in this type of asset is obvious—the end of cash.

Is it possible? Yes of course it is. In fact, I would say that there is a high probability that we will be a cashless society. China is there already.

However, we are not China. There are many differences inherent in Chinese culture and government that made it easier for a cashless society to evolve quickly.

And what does a cashless society in the United States look like anyway? I keep hearing people talking about central bank distributed ledger tokens replacing cash. In my view, that doesn’t really make sense. The only thing I see here is the advantage of blockchain technology over the SWIFT system.

Most US dollars are already digital. Central bank digitized dollars, in my view, would really be there to upgrade current technologies.

Cash is important to our society because it allows some level of money transfer that is truly private. Imagine if every penny you spent was tracked by the government. I bet you wouldn’t like that.

Of course lawmakers know that as well. Therefore, despite all of the speculation about the role of decentralized digital dollars, there is no active legislation in congress that suggests that this is going to happen anytime soon.

We will probably eventually be without cash but it’s not going to happen overnight. The end of cash is, in my view, a generational change that will need to have the support of citizens. That day is not here.

But don’t take my word for it, listen in to this week’s Wealth Formula Podcast to hear my discussion on this topic and more with an expert on financial technology.

Martin Chorzempa, senior fellow since January 2021, joined the Peterson Institute for International Economics as a research fellow in 2017. He gained expertise in financial innovation while in Germany as a Fulbright Scholar and researcher at the Association of German Banks. He conducted research on financial liberalization in Beijing, first as a Luce Scholar at Peking University’s China Center for Economic Research and then at the China Finance 40 Forum, China’s leading independent think tank. In 2017, he graduated from the Harvard Kennedy School of Government with a masters in public administration in international development.

Chorzempa is author of The Cashless Revolution: China’s Reinvention of Money (PublicAffairs, October 2022). He has been quoted in the Wall Street Journal, New York Times, Washington Post, Financial Times, MIT Technology Review, and Foreign Affairs.

Shownotes:

How did China successfully switch to a cashless system in an extremely short period of time?

Government visibility on cashless transactions

The role of future potential “super apps” in the US

**346: What’s the Big Deal about DeFi?** Dec 11, 2022
The cryptocurrency markets have been crushed and don’t be surprised if they go even lower once the full extent of the FTX meltdown is realized.

However, it’s clear to me that this in no way is the end of cryptocurrency. Believe me, I’ve been around crypto long enough to have seen it declared dead several times over. It won’t happen.

The reason for this is that behind cryptocurrency is a technology. It’s not just tulips. Tulips didn’t do anything. Underlying crypto assets lies decentralized distributed ledger technology that will change our world.

Ok…so you’ve heard me and others make that statement before and it might be getting old. So, I think it’s important to go into more detail and highlight examples of what this technology can do.

Decentralized Finance (DeFi) is a major revolution that is happening now. It is still in its infancy but it is pretty clear that this technology represents the future of banking and really all market transactions.

But why is it advantageous? This is an important question. You can easily be fooled by people selling you “tokens” while they are raising money for real estate or other assets. Tokenization does not replace good operations. In reality, most of these offerings are just marketing gimmicks. Just because your shares are represented by a token doesn’t mean a lot.

There are clearly advantages to tokenizing assets in the sense that they can be traded and potentially provide more individuals access to things in which they might not otherwise be able to invest.

But there are a lot of kinks to be worked out. And while I believe in the technology, the current state of DeFi is still fraught with charlatans and Ponzi schemes. A major reason this is possible is that few DeFi projects are purely decentralized. When someone is in charge, that’s not decentralization.

It’s a complicated topic so I asked someone knee-deep in the DeFi world to help us understand it a bit better. You should know a thing or two on this topic as it will enter your world sooner or later. So make sure to listen to this week’s episode of Wealth Formula Podcast!

Alex Vergara is a Community Lead and Founding Member at EarthFund, the decentralized platform for a better tomorrow.

**345: Should You Consider Buying Franchises in this Economy?** Dec 04, 2022
It’s cold outside…even in Santa Barbara. The real estate markets are especially frozen now and will continue to be at least for the next couple of months into the new year.

Why is this happening? Real estate, more than any other investment, is highly dependent on interest rates. Right now, there is simply too much volatility for reasonable underwriting. To be clear, it’s not HIGH interest rates that are the problem. It’s moving goalposts. All markets hate uncertainty.

That said, we need to keep deploying money to keep up with inflation. I know a lot of people are sitting on cash which isn’t a terrible idea. But just know that in the process you are losing 7-8 percent buying power on an annual basis.

My own strategy has adjusted to this current reality. I’ve started looking at businesses as investments. In the right hands, businesses can provide streams of income that exceed cash on cash of real estate acquisitions.

Indeed, if you bought your own business chances are that your return on capital would project out to about three years. Larger businesses will have smaller multiples.

You see it’s all about risk and reward profile of any investment. The reason large apartment building tend to trade at cap rates slightly below the mortgage rate is because they are extremely stable assets with few moving parts. Businesses inherently have more moving parts and, therefore, you should be rewarded for taking a bit more risk.

I’m different from many of the podcasters in the personal finance podcast ecosystem because I started out as an entrepreneur. In fact, I started 3 multimillion-dollar businesses before I ever got into real estate syndication.

In other words, I know a thing about starting businesses. That said, evaluating and buying businesses is a different skill set altogether. Zulfe Ali who you may have met at one of our last couple of meetups used to run a sovereign wealth fund and spearheaded acquisitions of multiple billion-dollar companies. That’s a different level of expertise in business acquisition and that’s why I’m following his lead.

To be clear Not everyone should be an entrepreneur. My friend Jorge Newberry and I once talked about how you are most often born an entrepreneur and it’s often a curse for people around us.

So if you are not an entrepreneur but are interested in investing in businesses, what should you do? Well, you can look for private acquisitions to invest in passively. We have one of those coming up this week!

But if you want to get your hands dirty, you might consider looking into franchises. Franchises often provide the guardrails for people who are not natural entrepreneurs and/or want a greater level of support.

This week’s guest on Wealth Formula Podcast is an expert at matching people with franchise opportunities. Listen in. This could be something you might get interested in and end up finding your next calling!

One of America’s Top Franchise Consultants, Host of Kim Daly TV on YouTube, Author, Speaker, Thought Leader, and Franchising Expert
For the past 20 years Kim Daly has been helping entrepreneurs, investors, and stuck 9-5 professionals take control of their lives and step out of the corporate cycle by investing intelligently in the franchise businesses and become “franchisepreneurs.” She is an international best-selling co-author of Franchising Freedom and the founder and host of the Kim Daly TV YouTube channel.

Before becoming a franchise consultant Kim was an entrepreneur and highly sought after consultant in the health and fitness industry working with brands such as Denise Austin, Dr.Denis Waitley, Gold’s Gym and eDiets.com. She is the creator of “The Daly Plan” – a millionaire mindset coaching program that enabled her to build the largest franchise consulting business in the history of franchise consulting in 2012. She aspires to be the most influential and motivational voice in the franchise industry. Kim is a mom of two teenage boys. She is passionate about fitness and nutrition. She lives on the beach in Southern New Hampshire where she loves to ski in the winter and workout year round.

Shownotes:

How is the current economy affecting businesses?

Can you own a business and be completely passive?

How challenging is it to own and operate franchises?

What is the good thing about franchising?

344: Ask Buck: 11/27/22 Nov 27, 2022

Happy Holidays everyone. I’m very thankful for you Wealth Formula Nation! It is a great pleasure for me to serve you as clarifier-in-chief at Wealth Formula.

Listen in to this week’s edition of Ask Buck. We talk about real estate depreciation issues, asset protection and more!

Don’t miss it!

343: Ask Buck: November 2022 Nov 20, 2022

It’s been a while but this week’s episode of Wealth Formula Podcast is the latest “Ask Buck” episode.

As you know, most of the time I interview other people so I don’t get a chance to talk to you directly. These episodes are great for learning. In fact, go back and listen to the last 10 “Ask Buck” shows and you will know as much as I do about personal finance!

This week we have questions about multifamily investment opportunities, the Theory of Population Collapse, and bonus depreciation. Make sure to tune in!

**342: Blockchain is Not Dead** Nov 13, 2022
Warren Buffet talks about being greedy when others are fearful. I think it’s fair to say that there is a great deal of fear in the financial system right now with interest rates climbing as quickly as they are.

Eventually, this will lead to distress in all financial markets. The stock market is already down—especially tech stocks. The Real Estate market is frozen. There is very little trading. That’s why our investor group has not acquired anything since May.

The worst part about where we are now in this cycle is uncertainty. Rates going up to more historical levels is not, in and of itself, problematic. The problem relates to the unexpected speed of rate increases and the fact that we don’t really know when it will end.

Even with higher rates, we can go back to business as normal. Buyers and sellers just need to have some sort of interest rate benchmark with which to underwrite. But the Fed is moving the goalposts too quickly for anyone to use a specific interest rate to put into a spreadsheet.

One thing you might be wondering is why there is no significant distress in the market. The answer is largely that most buyers on floating rates purchased rate caps. But over time those will expire and if rents are not raised quickly enough, they could see negative cash flow pretty quickly. We could start seeing opportunities early next year. And when we do, I will be buying!

Over the last month, the cryptocurrency market also got hit hard. It went from beloved, even by teenagers, to red-headed stepchild status within days. In crypto, down markets mean DESTROYED. And… that’s where we are right now.

Could it go lower? Maybe? But I am a buyer of bitcoin at this price. Bitcoin isn’t going anywhere over the next several years and I believe will eventually be worth a lot more than it is today. It may be controversial to say, but investments in bitcoin or bitcoin mining today might be some of the more obvious plays to make for savvy investors.

But again, there is fear in the financial ecosystem. Investors, as much as they like the idea of buying low and selling high usually do the opposite in these situations. But remember, be greedy when others are fearful.

Cryptocurrency is down but not dead. People just stop talking about it when there is a bear market. But that’s exactly why we should talk about it on Wealth Formula Podcast.

My guest this week will tell us why blockchain and cryptocurrency are an inevitable part of the future…even for banks. And if that’s the case, should you be investing?

Make sure to tune in and find out.

Omid Malekan is the Explainer-in-Chief of blockchain technology. He’s the author of ReArchitecting Trust: The Curse of History and the Crypto Cure for Money, Markets, and Platforms as well as The Story of the Blockchain: A Beginner’s Guide to the Technology That Nobody Understands.

He is an adjunct professor at Columbia Business School where he lectures on blockchain and crypto.

An eight-year veteran of the crypto industry, his writing has appeared in the New York Times, Wall Street Journal, Financial Times, Spectator magazine, and his own blog on Medium.com. Malekan advises individuals and corporations on the intersection of the old and new.

Learn more at www.omidmalekan.com

Shownotes:

How Omid got started working with banks on cryptocurrency policies

What are the fundamental problems in the system that crypto potentially provides a solution for?

How can blockchain and cryptocurrency restore trust in the system?

Re-Architecting Trust: The Curse of History and the Crypto Cure for Money, Markets, and Platforms

**341: Why Now Is The Perfect Time For High Cash Value Life Insurance Strategies** Nov 06, 2022
**As we get closer to the end of the year, I know a number of you are trying to figure out how to deploy capital. We will have some opportunities that are not real estate oriented.**

I also believe that it is a surprisingly good time to consider various life insurance strategies that we have discussed before. I have included the email sent to me on this topic by Rod and Christian and they will be my guest on this week’s Wealth Formula Podcast. Make sure to listen in!

**——————————————————————————**

We frequently receive questions about how the recent increase in interest rates will impact the strategies we teach that utilize the combination of high cash-value life insurance and leverage.

**Interest rate reset**

First, it’s important to realize that rising interest rates are great for life insurance! Cash value life insurance is designed to outperform general interest rates. When interest rates go up, it allows life insurance companies to generate higher returns in their general account, that additional return then passes on to the policy holder. In fact, we’re already seeing cap rates on IUL’s begin to climb and adjust to the market. This increase in caps will result in a higher overall return inside the policy! In traditional whole life insurance, higher interest rates means higher dividends!

It’s also important to understand that life insurance companies primarily invest in bonds and notes, the types of investments that are sensitive to interest rates. However, there’s a significant difference between an individual investor and an institutional investor. Life insurance companies are able to make considerably larger investments and for considerably longer time frames. We’re talking about as long as 40 or 50 years. This advantage allows them to be more selective as to the types of investments they buy and for how long they will lock.

In the context of our strategies, the recent increase in interest rates is actually creating a much healthier and more profitable environment for life insurance companies, which of course also means that dividends and cap rates will rise.

Interestingly, the effect on loan rates is more short-lived. In many cases, when we run the Wealth Accelerator stress tests for the 1980’s, we actually end up with a higher long-term IRR than when we run our baseline projections using a very conservative 2% spread.

**The impact of higher rates on Wealth Formula Banking**

If you’re not yet familiar with Wealth Formula Banking, check out our webinar by going to www.wealthformulabanking.com. In a nutshell, we build up our investment opportunity fund inside of an overfunded whole life policy. We then loan against our cash value to invest in real estate, business, etc., our money stays and continues to grow inside of the account. By doing this, we’re able to double dip, and create value in two places at the same time.

This is the perfect time to get involved with WFB, especially if you’re one of the many people who have money sitting on the sideline waiting for the right deal. Why let it sit in a checking account or money market account earning nothing, when we can put it in a WFB policy and generate a long-term 5%+ tax-free return? By the way, that 5%+ return is going up with interest rates!

Here’s a question I’m often asked: If I’m using a loan, and interest rates are rising, what does that mean for the WFB strategy?

The good news is that for most of our clients there’s a direct relationship between the interest they’re paying on their loan and the interest that’s being credited to the portion of their cash value that is collateralizing the loan. So, if interest rates keep going higher, the interest rate we earn on the collateralized cash value will keep going higher as well.

**The Impact of higher rates on the Wealth Accelerator**

For anyone who isn’t familiar with the Wealth Accelerator, check out our webinar at www.wealthformulabanking.com. Briefly explained, we’re building an asset using leverage. The individual puts the initial funds into overfunded whole life and/or IUL policies, and then we finance all future contributions to the policy. We’re taking advantage of the spread that can be generated by creating higher growth in the policies than what we’re accumulating in interest on the loan. The goal is to generate double-digit tax-free returns, which then creates massive future tax-free income and/or income-tax-free funds for estate planning.

Many people assume that the rise in interest rates kills the opportunity to create a spread. This couldn’t be further from the truth. As we mentioned above, a rise in interest rates creates a huge opportunity!

The fact is, with interest rates going up, we’re already seeing caps rising within IUL policies. And, although there’s a slight lag time with dividends on whole-life policies, those will rise as well.

One aspect that I think can help alleviate concern as well is the fact that we carry a healthy cushion in the form of our “Net Equity” value. This represents the amount of extra cash value we have over and above the amount of our loan amount. As mentioned above, our design is built for times like this! In other words, we know there will be times when we will get less than a 2% spread, and even times when we’ll have a negative spread. This net equity serves as our buffer for times like that, so that we’re poised to take advantage of the times when the spread is a lot bigger than 2%. For example, in 2008, we would have cut into our buffer a bit because the market dropped and our IUL wouldn’t have produced a return in that year. However, the next 10 years would have averaged a lot higher than a 2% spread, with interest rates so low and the market growing so much.

As a side note, we’ve also had people express concern about getting into an IUL policy while the market is down. Before we answer that, let’s be clear that due to the long-term nature of the strategy we don’t try to time the market. However, if we can choose, getting started when the market is down makes a lot of sense! We get to start at that lower market value, and ride the wave of the recovery.

Christian Allen joined the financial services industry in 2004. Over the course of his career to date, he has developed a broad-based knowledge and experience set. He began as a traditional advisor, working with local clients in his home state. In that context, he began a movement of successfully partnering with other professionals, including accountants and attorneys, to assist clients in implementing sound financial strategies. He spent more than five years in management with 2 regional planning firms, during which time he assisted new and seasoned professionals in creating efficient systems and methods to build meaningful practices. Over the last several years, he has expanded to working across the country, teaching financial principles, and working with clients across a broad spectrum, including wealth accumulation, retirement distribution planning, as well as innovative, advanced planning strategies for both high-income and high-net-worth individuals and businesses. He’s a member of AALU, and holds the designations of Accredited Asset Management SpecialistSM and Accredited Wealth Management AdvisorSM Christian is married and has two children, and is an avid sports fan.

Rod Zabriskie has been in financial services since 2009. Prior to going into business for himself, he worked in marketing and finance with several small businesses. He had the opportunity to purchase an existing furniture business in 2007, just prior to the Great Recession. The experience of struggling to stay afloat amid difficult economic conditions inspires Rod every day in his efforts to educate and assist his clients in implementing sound financial strategies. He strongly advocates for establishing a firm foundation, utilizing proven strategies and financial tools to create a strong base upon which we can each build our financial house. In addition to focusing on Wealth Formula Banking and Velocity Plus, he has expertise in retirement income planning. Rod has a bachelor’s degree in Marketing Communications, and an MBA with an emphasis in Entrepreneurship. He and his wife Jodi are the proud parents of 7 wonderful children. As a family they thrive on spending time exploring nature, playing games and doing projects together. He enjoys sports, music and reading.

Shownotes:

What is going on with the Permanent Life Insurance Strategies space?

How does the Wealth Accelerator work?

What makes the Wealth Accelerator better than traditional premium financing?

**340: No Risk It, No Biscuit** Oct 30, 2022
What makes for a highly successful entrepreneur or investor? It is the appetite for calculated risk.

As Bruce Arians, coach of the Tampa Bay Buccaneers famously says, “No risk it, no biscuit”.

In entrepreneurship this might be more obvious. You probably know entrepreneurs who took risks by leaving their day job and pursuing a business that they KNEW was going to be successful.

I’m one of those guys. In my case I got fired from a job that helped accelerate the development of my first business. But the next one was even riskier.

Why was it riskier than the first? Well, when I started the first business, I had nothing. By the time I started the next business, I had a lot to lose.

But I remember playing out the business model in my head and feeling like, “This will work”. In my mind, there was no risk…only upside. I know that sounds reckless but that’s the way young entrepreneurs must think to create successful businesses. In my case I was right fortunately. That next business did extremely well and took me to another level.

Of course entrepreneurship is different from investing but there are some similarities. Again, it’s not hard to hit singles and doubles. But in order to hit home runs, you have to be willing to take some calculated risks.

Often there is asymmetric risk where the upside is huge but there is a possibility of losing it all as well. Some of you have already experienced that for better or worse in the world of cryptocurrency.

The bottom line is, “no risk it, no biscuit”. Ordinary investing will yield ordinary results. If you strive for more, you have to train yourself and your coronary arteries to be ok with risk.

No one knows that more than my guest on this week’s Wealth Formula Podcast. He has served as president and/or CEO of multiple major brands that you will recognize and is known for his unconventional approach for high performance through strategic thinking.

Listen here to learn how to jump first and think fast!

Frank O’Connell grew up as a farm boy in a small town of 2,000 in Ovid, New York, where he drove tractors, sold eggs, and won prizes at 4H Fairs. He learned the value of hard work from his mother, who told him that he could surpass everyone by outworking them. Because of the values instilled in him, Frank went on to live an outsized life as a corporate chieftain.

For more than fifty years, Frank has helmed such companies as Reebok, Fox Video Games, HBO Video, SkyBox, Gibson Greetings, and Indian Motorcycles. Frank has led major consumer product revolutions, including Innovative food products, video games, video tapes, the Reebok Pump, collectibles, toys, greeting cards, action figures, and the iconic Indian Motorcycle.

A student of hard work and business who learned his craft on the front lines of sales and marketing, Frank knew that the right thing to do was to Jump First and then Think Fast. In his book, he shares his personal stories, business strategies, and proven methods for management. Jump First, Think Fast details Frank’s many business successes – as well as some failures – in an honest and forthright way. Jump First, Think Fast is for those who want to think differently about business and learn how to find their place, trust their instincts, and enjoy the ride from a successful CEO’s stories, lessons, and life moments.

**339: The Great Distortion: Dr. Nomi Prins** Oct 23, 2022
The last 15 years have been a game of chicken between the Federal Reserve and the financial markets.

Think about the old movies where the kids would speed in their cars towards each other until someone decided to quickly turn out of the way and avoid collision and certain death.

Similarly, the financial markets and the Federal Reserve have been trying to figure out who would chicken out first for the past several years.

Let me give you an example. Despite COVID shutting down the entire country, the asset markets (after quickly blinking) went sky high.

Why? Because investors knew that the Fed would come to the rescue and they did. Rates dropped to zero, quantitative easing controlled the bond markets and all of that helped to embolden investors and reinforce the concept that the Fed will always come to the rescue.

If you were at a Casino, wouldn’t you keep playing if the house guaranteed you wouldn’t lose money at the end of the night? That’s the way investors came to see the Fed—as an insurance policy.

So then we got this inflation thing because of the massive amount of helicopter money injected into the system and supply chains creating huge demand.

Of course, the Fed started raising rates again. At first, the markets shrugged it off. Playing chicken again. Then the Fed showed some cajones and kept raising rates and now all of the sudden it’s not quite as clear if they will blink first.

The Fed has been clear about getting inflation under control. They know it has to be done. That’s finally getting through to some investors…or is it?

We also know that we can only raise rates so much because of sovereign debt issues. And what if we end up in a massive recession because of the rate increases? Many investors think that’s exactly what’s going to happen.

The moral of the story is that there is now a well-established disconnect between the economy and financial markets. The question is where does this all lead us? Dr. Nomi Prins is one of the smartest financial authors out there and she’s just released a new book on this very topic.

She’s going to tell about this great distortion and what it means for us in the long term. DO NOT MISS THIS SHOW!

As a Wall Street insider and outspoken advocate for economic reform, Dr. Nomi Prins is a leading authority on how the widespread impact of financial systems continues to effect our daily lives. She has spent decades analyzing and investigating economic and financial events at the ground level and meeting with those that shape the world’s geo-political-economic framework. She continues to break stories by conducting independent research, writing best-selling books, and traversing the globe to share her knowledge and demystify the world of money.

Before becoming a renowned journalist and public speaker, Nomi reached the upper echelons of the financial world where she worked as a managing director at Goldman Sachs, ran the international analytics group as a senior managing director at Bear Stearns in London, was a strategist at Lehman Brothers and an analyst at the Chase Manhattan Bank. During her time on Wall Street, she grew increasingly aware of and discouraged by the unethical practices that permeated the banking industry. Eventually, she decided enough was enough and became an investigative journalist to shed light on the ways that financial systems are manipulated to serve the interests of an elite few at the expense of everyone else.

Nomi’s forthcoming book: Permanent Distortion will be out October 2022. Leveraging her practical expertise and academic knowledge, she coined the concept Permanent Distortion as a way to educate readers on the gap between the financial markets and the real economy, and what it means for everyone’s future. Over the course of 2022 and beyond, she will be speaking at conferences around the world on this topic, as well as providing actionable ways to deal with it through media appearances, articles, and newsletters.

Nomi’s latest best-selling book, Collusion: How Central Bankers Rigged the World, explores the conditions that led to the rise of the new era of central banks’ power and the impact they have on markets and the global economy. Her last book, All the Presidents’ Bankers, is a groundbreaking narrative about the relationships of presidents to elite Wall Street bankers over the past century and how they shaped domestic and foreign policy. Nomi’s other books include Black Tuesday, a historical novel about the 1929 crash, and the hard-hitting exposé It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street. She is also the author of Other People’s Money: The Corporate Mugging of America, which accurately predicted the reasons and timing of the financial crisis of 2008, and was chosen as a Best Book of 2004 by The Economist, Barron’s and Library Journal.

Nomi makes regular television appearances on BBC, CNN, CNBC, MSNBC, CSPAN, Democracy Now, Fox and PBS. She has been a guest on hundreds of radio shows including for Marketplace, NPR, BBC, and Canadian Programming. She has also appeared in several award-winning documentaries alongside other prominent thought-leaders. Her writing has been featured in The New York Times, Forbes, Fortune, Newsday, The Guardian, The Nation, New York Daily News, La Vanguardia, and Salon.com, among other publications.

She established international distinction for her presentation at the annual gathering of senior level governors and officials hosted by the Federal Reserve, International Monetary Fund (IMF) and World Bank conference in Washington D.C. Represented by the American Program Bureau, Nomi has delivered keynote speeches at many prominent global venues including the London School of Economics, the UK Parliament, the Mexican Senate, the Tokyo Stock Exchange, Google, Columbia University and the National Consumer Law Center.

Prins’ insights and unparalleled observations have made her sought by politicians from all parties for advice and analysis of the financial system and the economy. She coined the term “permanent distortion” that describes how the Federal Reserve has created conditions where markets are feeding off its monetary policy decisions.

Nomi served as a member of Senator (and presidential contender) Bernie Sanders’ Federal Reserve Reform Advisory Council. She is listed as one of America’s TopWonks. She is also on the advisory board of the whistle-blowing group ExposeFacts, a board member of animal welfare and wildlife conservation group The Elephant Project, and a member of the global advisory board of Ethical Markets.

Nomi received her BS in Math from SUNY Purchase, and MS in Statistics from New York University. Nomi received her PhD in International Strategic Studies with a specialization in International Political Economy from The Federal University of Rio Grande do Sul. As a lifelong learner, she encourages others to do their own research, continue to ask big questions and think for themselves.

Shownotes:

At what point did we go from a short-term panacea to a permanent distortion?

How much can the Fed raise interest rates?

Is there any hope of getting inflation under control?

PERMANENT DISTORTION: How Financial Markets Abandoned the Real Economy Forever

**338: The Road Less Travelled with Dr. Irene Lambiris** Oct 16, 2022
If you made it out to our event last weekend I want to thank your for taking the time to prioritize our meetup. And if you were there, I’m guessing you were not disappointed.

We had a few familiar faces in the morning talking about taxes and asset protection and some great presentations around asset allocation, the economy and bitcoin mining.

But what I think really blew people’s minds were the talks on longevity by Dr. John Foley and Dr. Rob Hamilton. This is something we are going to do more often for sure given the response we have gotten thus far.

These meetings are also great in that I get to see what others are doing. I am in a bubble sometimes in Montecito behind my computer screen and there is nothing better than going out to meet people of like mind.

There are people in our community who are doing amazing things and it’s fun to hear their stories. It’s even more fun for me to hear that I’ve made a difference in someone’s life.

Dr. Irene Lambiris was supposed to come to the meeting but ended up having to put her doctor hat on and miss it. I was bummed because she has a great story.

And if you are up to hear about how a young female physician is kicking ass in the investor space, you are going to want to listen to this week’s episode of Wealth Formula Podcast!

Dr. Irene Lambiris. She is an internal medicine specialist in Henderson, Nevada. Although now she is only a part-time physician and is a full-time real estate investor.

**337: Computer Chips are Sexy and Profitable (Well Maybe not Sexy)** Oct 09, 2022
Boring is Good when it comes to investing. I’ve started hearing others echo that sentiment lately. I’m not sure if I had something to do with it but I’m glad that message is spreading in the podcast ecosystem.

A decade ago, I used to be perhaps the busiest cosmetic surgeon in Chicago. I worked hard and got great results. And you know what…when the economy was good, I was crushing it. It’s how I made my first million.

From the outside, the cosmetic surgery field is glamorous and sexy. So are medspas that do botox, fillers and laser procedures.

I can tell you from insider knowledge, however, that it’s hard to make money in these fields unless you have a competitive edge over others. Mine was marketing and a tendency to go overboard on ad spending that would clog the coronaries of most of my fellow surgeons.

That said, when the economy goes south, those beauty procedures become less important than food, shelter and the rest of the necessities of life.

That is when boring prevails. Boring businesses involve unsexy things like cleaning, or selling widgets or widgets that make widgets. People need this stuff no matter what the economy is doing.

Most of these kind of businesses exist in the background though—places where most people would not know to look. But if you can find these golden nuggets, you could make a fortune.

A good example of the boring widget concept is the computer chip. Computer chips are critical in society today and the companies that make them are massively profitable despite not having the appeal of a brand like Apple. Just think about all the computers, cell phones and numerous other forms of hardware that MUST have computer chips to help our modern day society function.

Computer chips have become commodities in world trade and are literally dictating global politics and even military strategies. This week’s guest on Wealth Formula Podcast is an expert in this area and is going to tell you all about this massively underrated commodity.

Chris Miller is an Assistant Professor of International History at the Fletcher School of Law and Diplomacy at Tufts University. He also serves as Jeane Kirkpatrick Visiting Fellow at the American Enterprise Institute, Eurasia Director at the Foreign Policy Research Institute, and as a Director at Greenmantle, a New York and London-based macroeconomic and geopolitical consultancy. He is the author of three previous books—Putinomics, The Struggle to Save the Soviet Economy, and We Shall Be Masters—and he frequently writes for The New York Times, The Wall Street Journal, Foreign Affairs, Foreign Policy, The American Interest, and other outlets. He received a PhD in history from Yale University and a BA in history from Harvard University. Currently, he resides in Belmont, Massachusetts. Visit his website at ChristopherMiller.net and follow him on Twitter @CRMiller1.

Shownotes:

What exactly does a computer chip do?

Could the US remain the number one economy in the world if it doesn’t domestically dominate the chip market?

Chip War: The Fight for the World’s Most Critical Technology

How do you invest in computer chips?

**336: We’ve Had High Inflation for YEARS and Didn’t Know it** Oct 02, 2022
I guess by now you’ve heard—we’ve got some inflation problems in the United States and globally and Central Banks are going to continue to ratchet up interest rates in attempts to reverse the tide.

But wait a second. Why inflation now? Didn’t we print billions of dollars over the last 15 years or so? Why didn’t we have inflation then?

Well, we kind of did actually. We’ve had historically low interest rates and quantitative easing since 2008. This kind of “money printing”, however, does not really benefit the common man.

Low interest rates don’t make bananas cost more. But they do make stocks, real estate, and other assets soar in price. Ahh…so that’s where all the money went.

Well, let’s not pretend we as investors did not benefit from this asset class inflation. We did. And of course, banks and institutional money benefitted even more.

But again…the common man did not benefit from the usual money printing methodology. Arguably they weren’t hurt too much either.

But they are getting hurt now because inflation has drifted from the markets to the price of food and energy. Certainly, there are a number of reasons for this.

But, there is one precipitating factor that I believe began the process of shifting inflation to the main street. Before the pandemic, NONE of the efforts by the Fed or fiscal policy put money DIRECTLY into the hands of people who spend it. Of course, that all changed when businesses shut down and the government sent everyone money via parachute.

Now don’t get me wrong. I know we needed to do that. People had to put food on the table. But I do believe that this is where the shift of inflation to the consumer began. Then you layer on screwed up supply chains and high demand for everyday stuff and of course you’re going to have high inflation.

And now the Fed is raising interest rates with a vengeance to try to snuff it out. Will it? A recession and high unemployment probably will. But we have high wages, very low unemployment and continued supply issues. Raising rates doesn’t seem like it would help with those problems.

Anyway, I’m no expert on interest rates and inflation but my guest on Wealth Formula Podcast this week is. He’s written a book on it. Make sure to listen to the show and try to figure out how you might potentially benefit from the economy today.

Edward Chancellor is a financial historian, journalist and investment strategist. Edward read history at Trinity College, Cambridge, where he graduated with first-class honours, and later gained an M.Phil. in Enlightenment history from Oxford University. In the early 1990s he worked for the London merchant bank, Lazard Brothers. He was later an editor at the financial commentary site, Breakingviews. From 2008 to 2014, Edward was a senior member of the asset allocation team at GMO, the Boston-based investment firm.

He is currently a columnist for Reuters Breakingviews and an occasional contributor to the Wall Street Journal, MoneyWeek, the New York Review of Books and Financial Times. In 2008, Edward received the George Polk Award for financial reporting for his article “Ponzi Nation” in Institutional Investor magazine.

Edward Chancellor is the author of Devil Take the Hindmost: A History of Financial Speculation (Farrar Straus/Macmillan, 1999), a New York Times Notable Book of the Year. Devil Take the Hindmost has been translated into more than half a dozen languages. In 2005, he published the report, Crunch-Time for Credit? (Harriman House), an analysis of the ongoing credit boom in the US and UK. Edward has also edited two well-received investment books, Capital Account (Thomson Texere, 2004) and Capital Returns (Palgrave Macmillan, 2015).

His latest book, The Price of Time, is published by Allen Lane in the United Kingdom and Atlantic Monthly Press in the United States. The Price of Time has been longlisted for the FT 2022 Business Book of the Year.

Shownotes:

What was the inflection point that turned an economy that was running on low interest rates and printing a lot of money to a significant inflationary problem?

The last decade was the greatest period of asset price inflation in history

Did “Helicopter Money” issued by the government during the pandemic contribute to the high inflation rates we are seeing now?

The Price of Time: The Real Story of Interest

**335: How to Buy Expensive Toys and Profit!** Sep 25, 2022
Have you heard of the Financial Independence, Retire Early (FIRE) movement?

The movement is defined by extreme frugality and extreme savings and investments in hopes of retiring early and living on small withdrawals of accumulated funds.

The general rule of thumb is to live on only 30 percent of your income and invest the rest. So, if you make $300K per year and are in a tax bracket of 40 percent you would be living on $54,000 (less than 5K per month) per year after taxes in hopes of retiring a few years earlier.

There is nothing special about the investing patterns for these individuals. They typically invest in a very traditional way through ETFs. The hope is that the market will keep going up and allow for 3-4 percent withdrawal for life at some point.

What’s particularly interesting to me in the physician community is that the FIRE people are rather militant. They mock other physicians with nice cars and homes. It’s so weird to me.

Should you consider this kind of lifestyle? Well, personally I would not. It doesn’t sound like a lot of fun! And frankly, the militant FIRE people don’t sound like much fun either!

To be clear, I probably do invest close to 70 percent of my income per year. But that’s because I make a lot more money than I need to have fun. In my opinion, that should be the goal—not to deprive yourself of Starbucks in hopes of living an austere retirement.

So what if you are in a position where you are not quite financially where you want to be? Can you still enjoy some of the finer things in life?

Buying a nice home in an area that will always appreciate is really an investment over the long term. What else? Well, one of my good friends only buys expensive vintage furniture for his home. Is that a waste?

Well, the furniture he bought 5 years ago has significantly appreciated in value. This is the same friend of mine who has made a killing on buying and selling vintage cars.

My friend helped me understand the concept of living and enjoying the fine things in life today and actually profiting from it. It’s really quite genius. Bottom line is that if you can enjoy something really nice and effectively not lose money over time, you are winning.

So can you do the same? Can you buy the cars and watches you want and potentially make money? My guest today on Wealth Formula Podcast has built an entire platform around this concept and it’s something you might seriously consider for yourself.

Trade in the FIRE movement for the BEAST movement: Buy, Enjoy, Appreciate, Sell/Trade. I think you’ll have more fun.

Pejman Ghadimi is a self-made entrepreneur, philosopher, author and the creator of the wealth transfer methodology.

Over the last 20 years, Pejman has built a multitude of businesses ranging from a one-of-a-kind investment firm that focuses on alternative asset management known as 1 OFF Investments to a series of online education businesses including Secret Entourage, Exotic Car Hacks and Watch Trading Academy. These platforms have forced people to rethink their understanding of business, luxury assets and money management. Since their birth, Pejman’s companies have grossed well over $420,000,000.00 in combined revenue.

A byproduct of his very own teachings, Pejman is the perfect example of how resourcefulness and self-education are the two most powerful keys to success. Today, Pejman is a mentor to over 76,000 students from across the globe and his teachings have created many 6, 7, and 8-figure Entrepreneurs, earning him the nickname “icreatemillionaires”

Fun Fact: Pejman was featured on Netflix’s Fastest Car Season 2.

334: Cognitive Bias in Life and Investing Sep 18, 2022

First of all, if you have not signed up for the next Wealth Formula Meetup, you should do so NOW. This is going to be a very cool event. We are going to do personal finance talks in the morning like we usually do with lessons on taxes, asset protection and real estate.

We are also going to get a big-picture macroeconomics talk from a guy who ran a sovereign wealth fund in the Middle East and an MIT-trained electrical engineer will give us a preview of a very exciting wind energy play as it relates to bitcoin mining!

The afternoon is totally new and should be super fun. We will be talking about longevity and lifespan. I believe the first person to live to 150 years old has already been born. And I also believe that most of us have a really good chance of living to 100 and feeling like 50.

Why? The science and technology behind longevity is moving at light speed. Some believe that “Longevity Escape Velocity” will be reached by 2030. In other words, the ability for people to essentially become immortal may be near.

One thing is for sure. The idea of chronological age dictating your health and wellness will be redefined in the coming years. In fact, it already has and you need to know this stuff so you can implement these things in your life TODAY! That’s exactly what we are going to talk about in the afternoon. Or…you can go on a bus tour like previous events. Your choice!

People have a really hard time with getting their heads around new ideas like this—an entirely different paradigm which I believe we are on the precipice of. We live in our own reality that influences our cognitive biases.

The reality we live in does not include people living to 150 and beyond. We think of ourselves as middle-aged in our 40s and 50s. But technology always sneaks up on us and provides us with a reset of our reality every few years.

You probably are old enough to remember the days before the internet and cell phones. Some of the things we see today would have been downright futuristic just a decade or two ago.

Furthermore, the concept of cognitive bias is bigger than technology. It affects everything in our life. We perceive the way we perceive because of our biases. What’s interesting to me is that with social media and different kinds of political channels, there is a divergence within our population of what that reality is. I’ve never seen that before in my lifetime.

That said, it is important to recognize your cognitive biases and try to add rationality—especially in the world of investing.

My guest on Wealth Formula Podcast this week is an expert on cognitive bias and has written a book on how to overcome them to make the right decisions in your own life. Make sure to listen now!

P.S. Sign up for our meetup HERE!

Dr. Gleb Tsipursky is a best-selling author, internationally-recognized thought leader and CEO of Disaster Avoidance Experts. He is a neuroscientist & behavioral economist who consults, coaches, and trains leaders on disaster avoidance, risk management, strategic planning, truth-seeking and decision-making. Gleb is co-author of Pro Truth: A Practical Plan for Putting Truth Back into Politics, published in 2020. He lives in Columbus, Ohio.

Shownotes:

What is Cognitive Bias?
Why would someone decide to buy high and sell low?
One huge cognitive bias mistake when it comes to Wealth Management
How do modern news and media affect our cognitive bias?

**333: Congressman James Bacchus on the state of Free Trade and the WTO** Sep 11, 2022
When I was growing up, the Republican Party stood for small government and free trade. Democrats were apparently on the other side of the table.

Maybe it is an incorrect generalization, but one thing is for sure…neither party supports real free trade anymore. Why? Well, I think it stems from an overriding trend towards nationalism.

The problem is that free trade is actually very beneficial for economies. Over the past several decades no other country has benefitted more from free trade than the United States.

There are many benefits to free trade. Obviously, you have a greater variety of goods to choose from. Free trade allows for the maximization of resources and makes them more efficient to allocate. It also promotes efficiency in production, improves employment (net effect), and finally, allows us to keep the cost of stuff we consume way lower than it would be if we didn’t have free trade. Just imagine what we would be paying for clothes without China!

The body that regulates global trade is the World Trade Organization. And, as you can imagine, nationalistic forces have rendered it less effective than it was. To discuss the benefits of free trade and the health of global trade today, I had the opportunity to speak with one of the founders of the World Trade Organization, Congressman James Bacchus.

Make sure to tune into this week’s Wealth Formula Podcast and learn about the world trade organization, the current trade environment, and some potential solutions to the trade problems of our time.

Listen HERE!

James Leonard Bacchus (born June 21, 1949) is an American lawyer, businessman, and politician who served as a member of the U.S. House of Representatives from Florida from 1991 to 1995. He was a founding member and twice chairman of the Appellate Body of the World Trade Organization in Geneva, Switzerland from 1995 to 2003. He later became a fellow of the European Institute for International Law and International Relations.

Shownotes:

China’s relationship with the World Trade Organization

Nationalism vs. Patriotism

What is the key to the success of the World Trade Organization?

Trade Links: New Rules for a New World

**332: How to Use Tax Law to Benefit from the Cryptocurrency Bear market** Sep 04, 2022
We haven’t talked about cryptocurrency much lately. Admittedly, I am like everyone else who gets excited when the markets are going sky-high but quickly loses interest when markets are struggling.

However, In times like these, regardless of asset class, it is critically important to stay rational. Let’s take bitcoin as an example. As I write this Bitcoin is sitting just under $20K. It could absolutely go lower.

But…for those of us who believe bitcoin is here to stay, does it matter? If you believe bitcoin is here to stay and that there is a finite amount of bitcoin that will ever be in existence, the price simply must go up over time as more people buy it and the market capitalization increases.

This is an extraordinarily volatile market. But if you look at bitcoin price history, the trend is clearly UP. If that’s the case, and you are a long-term holder/believer of bitcoin, you should be rejoicing about bitcoin prices today and strongly consider buying.

This is a very difficult thing to do because ultimately we are wired to run away from danger (falling prices) and to run to pleasure (euphoric markets). But you have to rise above those instinctual impulses and be rational. That’s how the best investors in the world, like Warren Buffet, differentiate themselves from the masses.

Ok…so enough pep talk. Let’s be practical. We are in a bear market. Many of us have lost significant value to our portfolios. The good news is that the tax rules for cryptocurrency are favorable—especially when it comes to locking in losses.

As we wait for the bear market to end, it is a good time to make sure that we are aware of accounting principles and tax law as it relates to cryptocurrency. This will make it much easier when your portfolio explodes again!

For that purpose, this week’s Wealth Formula Podcast Features a CPA who specializes in cryptocurrency. Listen NOW!

Micah Fraim is a CPA living in Roanoke, VA. His expertise has been featured by Forbes, TIME, MSN, Nasdaq, Fox Business, Yahoo! Finance, and other major publications. Micah is a business expert in addition to a tax guru. This allows him to bring a unique perspective to his clients – advising them on what is best for their business overall, not just from a tax perspective.

331: Ask Buck Summer 2022 Part 2 Aug 28, 2022

It’s time for another round of “Ask Buck”. This week’s episode includes questions on taxes, multifamily real estate investments and the Wealth Accelerator.

Listen HERE!

330: Ask Buck Summer 2022 Aug 21, 2022

It’s been a while but this week’s episode of Wealth Formula Podcast is the latest “Ask Buck” episode.

As you know, most of the time I interview other people so I don’t get a chance to talk to you directly. These episodes are great for learning. In fact, go back and listen to the last 10 “Ask Buck” shows and you will know as much as I do about personal finance!

This week we will be talking a lot about taxes and the real estate market. Make sure to tune in!

**329: The Untold Story of the World’s Biggest Con** Aug 14, 2022
Investing is hard enough without worrying about all the crooked stuff going on out there. When you add that to the picture, it’s a miracle that most of us have actually made money investing.

And if you think the nefarious activity is limited to the private space, you would be mistaken. Big money can manipulate public markets just as easily. Take Enron for example.

The global financial collapse of 2008 exposed a lot of white-collar criminals. When the lending markets dried up it was like the tide went out and exposed all that were swimming naked.

Of course, we had a front seat to the financial collapse in the United States beginning with the downfall of Lehman Brothers. But credit dried up globally and created chaos throughout the world.

One of the most interesting stories is that of Iceland. My guest on today’s Wealth Formula Podcast was one of the leading investigators into the Icelandic financial meltdown which was pound for pound the biggest financial meltdown in global history.

Jared Bibler wrote a book on the topic with critics describing it as “Insatiable greed, flamboyant crimes, scheming politicians, dish-pan clanging housewives!” What else could you ask for? Tune in for a very entertaining conversation with Jared Bibler.

Jared Bibler is a graduate of MIT, where he studied engineering. He is also a CFA charterholder with nearly 20 years of broad experience in the global financial markets. Jared started his career in Boston and New York, where he worked as a consultant to a Wall Street giant.

Following that, he moved to Iceland where he supported the Icelandic pension funds’ foreign investments. Unhappy with this environment, he resigned from his job at a leading Icelandic bank days before the 2008 Icelandic financial crisis. He was subsequently hired to head a special investigation team at the Icelandic markets regulator. Jared and his team referred more than 30 criminal cases to the Special Prosecutor of Iceland, including the largest stock market manipulation cases to be prosecuted globally.

Shownotes:

The financial meltdown in Iceland and the US

What happened during the biggest financial collapse in history?

What triggered the financial meltdown in Iceland?

Jared’s book Iceland’s Secret: The Untold Story of the World’s Biggest Con

**328: The Emotionally Intelligent Investor** Aug 07, 2022
This week’s episode of Wealth Formula Podcast is about emotional intelligence. Why would we talk about such things on a personal finance show?

Well, let’s define emotional intelligence for a moment. We all have emotions. If you want to see emotions in their rawest form, look at a toddler. One minute you might have an angel and the next you might have a complete meltdown and a demon from hell.

Adults are no different. Emotional intelligence is the ability to step away from those emotions and examine why you are having them. Toddlers don’t do that and only some adults really do.

Why is emotional intelligence useful to have? Well, emotions can get us into trouble unchecked. We’ve all sent the text or email that we wish we hadn’t in the moment. We all have those moments that we wish we had kept our mouths shut. As Warren Buffet says, “ You can always tell someone to go to hell tomorrow.”

Buffet also says, “Be fearful when others are greedy, and greedy when others are fearful.” Everyone knows that you should buy low and sell high, right? But when shit hits the fan, few are able to overcome emotions and do what they rationally know they should do.

This week on Wealth Formula Podcast I talk to an expert in emotional intelligence who says that emotional intelligence can not only be measured, but also developed to optimize multiple facets in our lives. Maybe it can make you a better investor?

Listen HERE

Carolyn Stern is the President and CEO of EI Experience — an executive leadership development and emotional intelligence training firm. She is a certified Emotional Intelligence and Leadership Development Expert, professional speaker, and university professor. Carolyn’s emotional intelligence courses and modules have been adopted by top universities in North America.

She has also provided comprehensive training programs to business leaders across the continent in highly regarded corporations encompassing industries such as technology, finance, manufacturing, advertising, education, healthcare, government, and foodservice. Her engaging, results-based approach has been synthesized here for the first time in a user-focused, self-coaching model that will motivate and inspire readers to apply the power of emotional intelligence to their own leadership and organizations. Carolyn lives and works in Vancouver, British Columbia.

Shownotes:

What is Emotional Intelligence?

Is there a way to measure emotional intelligence?

Building Emotional Intelligence?

Emotional Intelligence and Financial Success

Carolyn’s book The Emotionally Strong Leader

**327: Real Estate and Taxes: What You Need to Know!** Jul 31, 2022
You’ve probably noticed that my emails have been pretty short the last few weeks. I’ve been in Europe so I’m letting the podcast speak for themselves for the most part.

This week we go back to fundamentals. There’s a reason why real estate is the foundation of the Wealth Formula personal finance ethos. There is simply nothing comparable in terms of risk adjusted returns and tax benefits.

To reinforce these concepts, this week‘s podcast features a conversation with a CPA specializing in real estate. This is a must listen podcast. Enjoy!

Brandon was named 40 under 40 by CPA Practice Advisor in 2018. Brandon leverages his personal real estate investing and his Big 4 Accounting experience to offer unique insights to his clients. Brandon enjoys CrossFit and Kiteboarding when he’s not crunching numbers.

Shownotes:

What are the major primary tax benefits of investing in real estate?

What are the rules to qualify for Real Estate Professional status?

Tax Smart Real Estate Investors Podcast

**326: 200 Years of Financial Panics** Jul 24, 2022
When I think about all of what has happened to our economy over the past two decades, it’s quite astounding. National debt has gone up by about 5x. Interest rates hovered at nearly zero for multiple years and we went through multiple shocks to the system like the 2008 meltdown and Covid. Again—all in the last two decades!

This week’s guest on Wealth Formula Podcast has seen a lot more than I have as he served in the Reagan administration at a time when Paul Volker used significant interest rate increases to bring down hyperinflation and he was deeply involved in the response to the Savings and Loans Crisis of the 1980s as well.

Thomas Vartanian saw it all happen from the front row. His recent book, 200 Years of American Financial Panics: Crashes, Recessions, Depressions, and the Technology that Will Change it All captures the major themes of American Economic History.

Tune into this week’s show as we find out what he thinks about the economy today and what lessons from the past we can apply to try to get ourselves out of the mess!

Thomas P. Vartanian is a former regulator, legal adviser, academic and author who has worked in the financial services industry over six decades. He is currently the Executive Director of the Financial Technology & Cybersecurity Center.

He previously was the Executive Director of the Program on Financial Regulation & Technology at George Mason University’s Scalia Law School, and before that, he chaired the Financial Institution’s practices at two international law firms, Dechert LLP and Fried Frank LLP, through four financial crises. Both as a regulator and private practitioner, he has advised parties in 30 of the 50 largest financial institution failures in American history, developing a deep understanding of the causes of financial collapses. He has been described by clients in Chambers as “one of the best financial services lawyers in America.”

Mr. Vartanian served in the Reagan Administration as General Counsel of the Federal Home Loan Bank Board and the FSLIC, where he authorized the receivership, sale, or liquidation of hundreds of failed institutions in the S&L crisis, including the first national and cross-industry financial institution combinations in the country. Prior to that, he served in the Carter Administration in the Office of the Comptroller of the Currency as Special Assistant to the Chief Counsel.

Mr. Vartanian is a futurist and expert in financial technology. He was Chairman of the American Bar Association’s Cyberspace Law Committee between 1998 and 2002, where he chaired an international task force of lawyers from twenty countries which issued a seminal report on the novel issues created at that time by doing business over the Internet.

Since leaving government service in 1983, Mr. Vartanian has been approached by the Reagan, Bush, Obama, and Trump Administrations to head federal financial regulatory agencies, including being interviewed to become the first Vice Chair for Supervision of the Board of Governors of the Federal Reserve System. Rather than return to government service, since the 1980s, he has represented a variety of government entities, financial companies, and their investors, as well as informally advised several Presidential Administrations.

Mr. Vartanian has authored more than four hundred articles and eight books. He is a frequent lecturer and media commentator on the financial services industry, having appeared on Bloomberg TV, CNN, Fox News, PBS and a variety of radio shows. He has taught banking and electronic commerce law at Georgetown Law School, George Washington Law School, and Boston University School of Law, and has been a guest lecturer at Harvard Law School.

In 2008, Mr. Vartanian was named “Washingtonian of the Year” based on his use of music and sports to raise money for charities in the D.C. metropolitan area. As a musician, he appeared in the first production in the United States in 1970 of Joseph and the Amazing Technicolor Dreamcoat. His classic rock band, The Johnny Esquire Band, has helped raise approximately $5,000,000 for charities in the Washington D.C. area over the last twenty years. Mr. Vartanian founded and plays on the Washington All Stars, a senior baseball team that has raised $500,000 for Special Olympics since 1998.

Shownotes:

What kinds of similarities are there in our current economic environment that contribute to the higher inflation?

How has Covid changed the economic functioning of the United States?

Can we just print as much money as we want?

200 Years of American Financial Panics: Crashes, Recessions, Depressions, and the Technology that Will Change it All

**325: No Pain…Plenty of Gain** Jul 17, 2022
There is a fine line between being a “quitter“ and a pragmatic individual navigating life.

Quitting has a very negative connotation in our culture. It’s un-American and is associated with weakness and lack of grit.

In reality however, quitting is often the best thing you can do and the sooner that you do it the better off you are. I’m a good example of a guy who has quit quite a few times and is much better off for it.

For example, when I was in medical school, I was a hardcore student. They used to call people like me *gunners*. I was intense about my studies and got myself involved with lots of research projects and became the favorite student of the neurosurgery department.

You see, at some point along the line I decided that I wanted to be a brain surgeon. I thought that the brain and the central nervous system were fascinating. In hindsight, however, I must admit that there were stronger drivers involved.

I saw brain surgery as the top of the medical pecking order. Of course the idea of being a brain surgeon also appealed to me because of the social bragging rights that came along with it. After all, most people outside of medicine are pretty impressed when you tell them that you’re a brain surgeon.

So, I did what I had to do to get into a neurosurgical residency. I graduated with honors for medical school and scored very high on the required board exam used to evaluate residents. I also published multiple book chapters and peer reviewed articles in neurosurgery before I finished medical school.

Because of that drive, I got into one of the top neurosurgery programs in the country that produced some of the most famous people in the profession. My grand scheme was working out beautifully.

Then it happened. I started the program and, to my surprise, I wasn’t really enjoying myself. Sure, I liked walking around with a white coat that said neurosurgery on it and tried to use it to impress cute nurses. I did feel pretty macho I must say.

But it was not enough to get over the fact that I hated the hours. Very early mornings and very late nights were the norm on non-call days. When on call, any emergency meant I was up all night operating. Bleeding brains can’t wait until the next morning.

Then, I would have a full day of surgery the next day that I had to be alert and attentive for and try to learn something along the way. Boy…I really hated that.

Curiously, I noticed that most of my fellow residents seem to get *excited* when the pager went off in the middle of the night. They got excited and filled with adrenaline when called to action—like Batman. Not me. When the pager went off in the middle of the night I would feel nothing but dread.

It took me midway through my second year of neurosurgical residency to figure out that this was not going to work out. So I quit.

At that point, I felt like I was in free fall. For years I had created this identity that I was living. It took thousands of hours to get there with lots of blood and sweat. Was it just a waste of time?

Well, It probably was a waste of time but it could have been worse. I could have stuck it out for another five years and been miserable the rest of the way. My attending professors didn’t seem to have such a great life either so it wasn’t like there was light at the end of the tunnel.

I ended up switching specialties and ended up in cosmetics (brains vs butts…what’s the difference?) And of course after a few years of that, quit medicine altogether. I guess it just wasn’t for me. Think of that for a moment. Four years of college, four years of medical school and seven years of postgraduate surgical training. And I just quit because I didn’t want to do it anymore. Liberating.

The moral of the story is that when you figure out that something is not working for you, move on quickly. It seems simple enough right? But how many people do you know who complain about their jobs every single day and talk about doing different things but never do?

Relationships are no different. You usually know within the first few weeks if there is long-term potential. However, rather than break it off quickly, people often drag out relationships for months or years trying to make it work and sometimes even get married!

Well, as a divorced guy, I’m not much of an authority on relationships. However, The larger theme here is quit while you are behind. Don’t prolong the pain. There is plenty of gain to be had without enduring pain.

My guest on this week‘s Wealth Formula Podcast is Steve Magness. He’s written a book that tries to explain why being tough and resilient is not always the right thing to do for an individual.

So, If you feel like a lab rat on a treadmill you’ll definitely want to tune in to the show!

Steve Magness is a world-renowned expert on performance. He is the author of the new book Do Hard Things: Why We Get Resilience Wrong and The Surprising Science of Real Toughness. He is the coauthor of Peak Performance. The Passion Paradox, and the author of The Science of Running. Collectively his books have sold more than a quarter-million copies in print, ebook, and audio formats.

Magness has served as an executive coach to individuals in a variety of sectors. His work serves on applying the principles of which he writes. In addition he’s served as consultant on mental skills development for professional sports teams, including some of the top teams in the NBA.

His writing has appeared in Outside, Runner’s World, Forbes, Sports Illustrated, Men’s Health, and a variety of other outlets. In addition, Steve’s expertise on elite sport and performance has been featured in The New Yorker, Wall Street Journal, The New York Times, The Guardian, Business Insider, and ESPN The Magazine.

Steve received his undergraduate degree from the University of Houston and a graduate degree from George Mason University. He currently lives in Houston, Tx with his wife Hillary. Once upon a time, he ran a mile in 4:01 in high school, at the time the 6th fastest high school mile in US history.

Shownotes:

What is toughness?

Toughness vs. resilience

Steve’s book: Do Hard Things

Why would anyone want to do something that seems daunting and hard?

**324: Are We Running Out of Food?** Jul 10, 2022
One of the consequences of inflation is increasing wealth disparity.

Think about it for a moment. CPI indices only measure a basket of goods and services. But you and I know as investors that inflation helps us out with our investment portfolios as well. Asset inflation is a real thing.

If you don’t have the money to invest, you only get the downside of inflation. Prices for everyday stuff go up and it becomes harder and harder to get by.

How bad can it get? Well we already have food insecurity in our own country…the richest most powerful country in the world.

And there are pressures on food supplies globally now with draughts and the war in Ukraine, also known as the breadbasket of Europe.

So are we heading to a worldwide food shortage? And if we are, what are the consequences to those at the top of the food chain?

Maybe we don’t go hungry but hunger is a big driver of social unrest globally. The world is already a highly volatile place.

My guest on Wealth Formula Podcast this week studies the food supply and sheds light on the true extent of the problem. Make sure to tune in!

Marc Bellemare is a Distinguished McKnight University Professor, Distinguished University Teaching Professor, and Northrop Professor in the Department of Applied Economics at the University of Minnesota, where he also directs the Center for International Food and Agricultural Policy.

He currently serves as one of four co-editors of the American Journal of Agricultural Economics. Prior to that, he served as one of two co-editors of Food Policy from 2015 to 2019.

His research focuses on agricultural economics and applied econometrics. A few specific areas in which he has been conducting research include agricultural value chains, risk and uncertainty, and the consequences of high and volatile food prices.

For his research, he has won the Agricultural and Applied Economics Association’s (AAEA) Outstanding Doctoral Dissertation Award in 2007, the AAEA’s Outstanding American Journal of Agricultural Economics Article award in 2011, and the AAEA’s Quality of Research Discovery awards in 2014. That same year, he also won the European Association of Agricultural Economists‘ Quality of Research Discovery Award.

His work so far been featured in media outlets such as The Economist, the New York Times, National Public Radio, and the Wall Street Journal.

For his teaching, Marc won the College of Food, Agricultural and Natural Resource Sciences Distinguished Teaching Award for Graduate Faculty in 2018. In 2022, he won the University of Minnesota’s Award for Outstanding Contribution to Graduate and Professional Education, and was inducted in the University of Minnesota’s Academy of Distinguished Teachers.

From 2018 to 2021, Marc served on the Board of Directors of the AAEA.

Shownotes:

What drives a food crisis?

Is there a food crisis right now?

The Food Crisis and its effects on Americans from different socio-economic backgrounds

Potential social unrest as a result of the food crisis

**323: Bringing Back Wonder to Your Life** Jul 03, 2022
When was the happiest time of your life? I mean like inner-happy type happy?

For me, it was definitely as a kid. My childhood was by no means all roses, but the little things in life brought me a ton of joy.

I remember riding my bike to friends’ houses and knocking on their doors (that’s what we did in the 80s), getting together a group of friends for an impromptu baseball game or just riding around on our bikes and going places we shouldn’t have gone.

School was fun during elementary school. It felt like a camp. You got to go see your friends everyday, play at recess and learn some cool stuff. No pressure…just a pure routine.

I had my *intellectual* curiosities as well. When I wasn’t at school I would be closely studying the sports pages of the newspaper. I was a virtual encyclopedia on both the NHL and the NFL. It was pure joy for me to scour the library for books on famous athletes.

By the time high school rolled around, a lot of the joy of academics was gone for me. I was good at school but definitely preferred to party and to play sports. And of course I discovered girls which brought a new level of interest for me to be at school.

While I kept a steady state of party going in college, my academic work now became a job. When I decided to go to medical school, I realized I couldn’t afford to take art and acting classes for fear of them bringing my grade point average down. I had to stick to advanced biochemistry and molecular biology!

I wasn’t doing any sports anymore and I had no real intellectual pursuits outside of my job as a premed student (and organic chemistry tutor). Medical school was really interesting but the specialization left little time for anything else in my life.

As I track these different times in my life I can see the inner joy levels dropping precipitously at each step. Why? Well, my drops in inner happiness seem to be correlated to the times in my life when I transitioned from enjoying the present time as a kid to focussing primarily on the future as I progressed to college and medical school.

I spent so much of my life sacrificing the present for things in the future. I gave up most of my 20s to medical school and surgical residency. Then I set my mind to create successful businesses and investments so that I could make all the money that I wanted to make.

But now I’m kind of here. Sure I’m always happy to become richer but I have already surpassed anything I thought I would make. So now what?

Of course I continue doing what got me here but I recently realized that something was really missing in my life.

Thinking back to what made me happy as a kid, I decided to see if I could reverse engineer myself back into having a child’s mindset.

Here’s some major things that made me happy as a kid:

Playing sports. I was a good athlete. I even have one of those elite power athlete genes!

Being part of a community. I didn’t realize how hard it is to make close friends once you leave a school situation.

Learning new stuff. For me, this is critical. I need intellectual stimulation. If I am not learning I feel like I am dying.

Focusing on gratification today. Yes I mean gratification. We spend so much of our time planning for the future that we forget to have fun today. So yes…spend some of that money because you can’t take it with you.

So here’s my plan. I’m going to get active in local sports leagues. I’m going to start volunteering in the community. I am going to read a book about something random every week. And I’m going to buy some fancy shit and not feel guilty. I’m not kidding. I’ll tell you how it goes!

All of this stuff I’m talking about has been on my mind for a while. Then I heard about the work of Frank Keil, a researcher at Yale who has been studying the concept of *Wonder* in childhood and was intrigued by how these ideas could be applied to my own journey.

Dr. Keil’s research on children and wonder is fascinating and might provide you some ideas on how to bring some youthful vigor back into your own life. Listen HERE for this week’s episode of Wealth Formula Podcast.

Professor Frank C. Keil (Ph.D., University of Pennsylvania, 1977) is the director of the Cognition and Development lab.

At the most general level he is interested in how we come to make sense of the world around us. Much of this research involves asking how intuitive explanations and understandings emerge in development and how they are related to notions of cause, mechanism and agency. These relations are linked to broader questions of what concepts are, how they change with development and increasing expertise and how they are structured in adults.

One set of current studies is examining a level of explanatory insight that functions without knowledge of specific mechanisms and instead involves knowing what sorts of properties are causally potent in a domain and how they are likely to interact. These patterns vary considerably across large scale domains of phenomena such as living kinds vs. artifacts) and a partial understanding of these patterns emerges very early in development and guides learning of more detailed domain specific beliefs. Other studies are examining constraints on preferences for some explanations over others even when there is little or no specific knowledge of the phenomena under explanation.

He is also asking how emerging knowledge of concrete mechanisms can link up frequency based information with abstract explanatory principles as well as cause distortions in judgment. A key part of developing such understandings also involves learning how knowledge is clustered and distributed in the minds of others and how best to access that knowledge. He is exploring dramatic developmental and individual differences in how the social distribution of knowledge is understood. Finally, there is a longstanding interest in links between conceptual and semantic development and how the emergence of language interacts with conceptual structure.

**322: How Playing the Tax Game Can Be Profitable** Jun 26, 2022
There is a major distinction between economists and investors. While most economists classify themselves with schools of thought such as Keynesian or Austrian, successful investors cannot afford to do so.

I just spent a significant amount of time reviewing the work of Saifedean Ammous, the author of The Bitcoin Standard which has really become the bible for serious bitcoiners of the world.

Ammous is an academic, trained at Columbia. I highly recommend you read his work. He’s very smart and when you listen to him, he just makes sense.

The primary theme in his work is that Keynesian Economics is pretty much responsible for all evils of the world. I’m only slightly exaggerating. Ammous would say that pretty much every war since World War 1 could be blamed on Keynesian Economics.

Without getting into too much detail, Keynesian economics refers to the idea that demand drives supply and the key to a healthy economy is to spend or invest more than you save. Keynesian economics is the reason governments borrow money and spend it.

One of our biggest problems today is inflation which is, to some degree, required in the Keynesian system.

Ultimately what leads to Ammous to consider a bitcoin standard the best economic system is that bitcoin is deflationary allowing people to actually store value over time in a meaningful way and it is out of the control of a central authority—ie a government with a gun to your head.

Very interesting stuff. But how do we use this information practically? Hardcore bitcoiners will tell you to put all your money into bitcoin—get it out of fiat.

If things work out the way Ammous and the rest of the hardline bitcoiners believe, that would be a very good move. But how do we know it’s going to happen. Just because something makes sense doesn’t mean it will ever be reality.

The reality now is that governments rely on the Keynysian system. Therefore, it’s not going anywhere anytime soon. And while bitcoiners often prophesize of some macroeconomic apocalyptic event leading to the bitcoin standard, I personally, would not count on it.

Don’t get me wrong. I do see bitcoin as a major player in the world economy in the coming years. It will take some time but I do believe it will be digital gold. Even over the next five years, I believe bitcoin will be worth $250K and that will just be the beginning. So…yes. I am stacking bitcoin. But I’m still 85 percent real estate because that’s what I KNOW will be successful over time.

You and I are investors. We may have our own belief systems and wish things were a certain way. But the playing field and the rules are written by governments, not ideological economists. So we have to navigate the personal finance world on what is, not what should be.

What we do know right now is that inflation is real and we need to figure out how to make our investments exceed inflation. The money supply has grown an average of 14% every year for at least 60 years now. That’s why inflation is inevitable.

The best thing that investors can do is to invest in inflation-hedged assets like real estate. Although inflation does not directly include asset prices in its calculation, there is no doubt that owning assets is the way to keep up with it.

What else can you do? As real estate investors, we work with a lot of debt. Inflation erodes debt and punishes savers. As long as we are prudent with our debt, the math is clear. Debtors are rewarded in inflationary environments—keep your leverage intact and let that debt erode as the governments print money.

Finally, we need to figure out how to maximize our profits. If inflation is running at 7% per year you need to make more than that just to keep up. And remember, this is *after taxes.*

That brings me to tax mitigation. One of the most powerful tools to maximize your investment dollar is tax-efficient investing.

That’s why tax mitigation is such a major theme of Wealth Formula. To maximize your profits you either make more money or pay less of it in taxes. Legally paying less taxes is easier and much quicker than making more money in most cases.

From personal experience I can tell you that the investment of time and money into adequate tax planning is one of the most profitable decisions you can make. What I have learned and implemented from my guest on this week’s Wealth Formula Podcast, Tom Wheelwright, is pure gold.

Make sure to tune into this week’s show and catch up with Tom. I guarantee you will learn something and that the return on investment will be infinite!

Tom Wheelwright, CPA is the visionary and best selling author behind multiple companies that specialize in wealth and tax strategy. Tom is also a leading expert and published author on partnerships and corporation tax strategies, a well-known platform speaker and a wealth education innovator.

Tom is a regular commentator in the field of taxes and contributes regularly in major professional journals and online resources. Tom’s work has been featured in hundreds of media, including Forbes, The Huffington Post, Accounting Today, CFO Magazine, ABC News Radio and AZTV Morning News, along with writing columns for Entrepreneur Magazine and Inman News.

Snippets:

An update on what we need to know about the tax world right now.

How does the government play the tax game?

How can you buy a Ferrari with government money?

Tom’s new book The Win-Win Wealth Strategy

**321: Bitcoin Ecosystem and Infinite Fleet** Jun 19, 2022
Big changes in the world seem to sneak up on you. One day you reflect on the way things used to be and wonder how the heck we got here.

Anyone who has kids knows what I mean. My 13-year-old daughter is tall and beautiful and writes songs. I can remember the day she was born. How did that happen? I see her every day but I don’t see the changes happening in real-time.

Technology does this kind of thing to us as well. I remember a time when there were no cell phones. But in a blink of an eye, traditional landlines became extinct. Have you seen a phone booth lately?

Speaking of phones, I remember receiving my first text message during surgical residency and having no clue what was going on. Now I text more than I talk to people on the phone.

Ok…you get the idea. Now what if you actually noticed these happening under your own nose in real-time. On the tech side, that would probably make you a wealthy investor.

If you recognized the Amazon phenomenon 15 years ago while it was developing, you would have made a ton of money. If you missed it, welcome to the club. I, for one, wasn’t paying much attention. And to be perfectly honest, I didn’t have much money to invest back then anyway.

So what are the things that are going to become part of the fabric of our society in the next 15- 20 years? I can think of a few things but nothing so obvious and specific as the growth of bitcoin and its ecosystem.

Right now we are seeing countries adopt it as legal tender. How crazy is that? I suspect that’s just the tip of the iceberg.

Samson Mow is one of those guys who saw bitcoin for what it is years before most. He is a true visionary in the bitcoin arena and he’s also a visionary in the gaming industry.

In this episode of Wealth Formula Podcast, Samson and his COO at Pixelmatic, Chris Wood, discuss what’s going on with bitcoin today and the latest on their latest gaming venture—Infinite Fleet. You might even want to get involved yourself!

Make sure to tune in!

Samson Mow is currently the CEO of Pixelmatic, the development studio behind Infinite Fleet, as well as the CEO of JAN3, a new Bitcoin technology company with a mission to accelerate hyperbitcoinization. Samson is known for his work on El Salvador’s Bitcoin strategy, and nation-state Bitcoin adoption in general.

Samson was previously the CSO at Blockstream, a leading provider of Bitcoin infrastructure. Before joining Blockstream, Samson was the COO of BTCC, one of the largest bitcoin exchanges and mining pools in the world. At BTCC, Samson oversaw the day-to-day operations of the company and directly managed the exchange and mining pool business units.

Chris is originally from Blackpool, U.K. and has been living and working in Shanghai, and Jiangsu since 2011.

Chris is a passionate gamer, storyteller, and energetic operations professional with a decade of leadership and management experience in the video game and education industries. He joined Pixelmatic in 2016 as a project manager to lead the production of Infinite Fleet. Chris has worked in various roles, including sales, marketing, business administration, franchise management, project management, and more.

Shownotes:

Are the countries that are interested in Bitcoin right now primarily those that have some issues of instability with their own currency?

What is Infinite Fleet?

How do investors make money on Infinite Fleet?

The team behind Infinite Fleet.

**320: The Soul of a Value Investor** Jun 12, 2022
What makes a great investor? Genetics? Personality type? Luck?

Probably all of the above. But one thing I’ve noticed is that all the best investors in the world are very curious people and they tend to read a lot.

Apparently Warren Buffett was reading between 800 and 1000 pages per day in the early days of Berkshire Hathaway. He probably learned a thing or two along the way. Even now, approaching his ninth decade, 80% of his day is reportedly spent reading.

Bill Gates apparently clocks in at about a book per week as well. So maybe there is something to this reading thing?

Neither one of these guys focuses just on personal finance either. They are learning all sorts of things about the world and about ideas.

On a much smaller level, I believe that my broad background as a student of history, a medical doctor, and a macroeconomic theory enthusiast, have all played a role in my ability to think about things from a larger perspective than most.

Just take for example the current inflationary environment. Most of us are probably not old enough to necessarily have experienced what it was like in the early 1980s. But understanding the similarities and differences between what happened then and what is happening now certainly provides perspective in an otherwise unpredictable world.

History may not repeat itself, but it certainly rhymes. Furthermore, history is not the only thing that can teach you about the world. I take lessons from my days as a surgeon and understanding and processing the world on a day-to-day basis.

The more you learn about STUFF, the larger arsenal you will have to confront the problems and challenges of life both professionally and personally. I truly believe that.

My guest on this week’s Wealth Formula Podcast believes it too. Aside from being a recognized value investor, he is a true man of letters. Vitaliy Katsenelson is a great example of a great thinker and how a great thinker can often translate to a great investor. Make sure to tune into the show!

**Vitaliy Katsenelson** was born in Murmansk, Russia, and immigrated to the United States with his family in 1991. After joining Denver-based value investment firm IMA in 1997, Vitaliy became Chief Investment Officer in 2007, and CEO in 2012. Vitaliy has written two books on investing and is an award-winning writer. Known for his uncommon common sense, Forbes Magazine called him “The New Benjamin Graham.” He’s written for publications including Financial Times, Barron’s, Institutional Investor and Foreign Policy. Vitaliy lives in Denver with his wife and three kids, where he loves to read, listen to classical music, play chess, and write about life, investing, and music. Soul in the Game is his third book, and first non-investing book.

Shownotes:

What exactly is Stoicism?

Stoicism reduces the volatility of the negative emotions

The ongoing conflict between Russia and Ukraine.

Soul in the Game: The Art of a Meaningful Life Hardcover

https://contrarianedge.com/

https://soulinthegame.net/

https://investor.fm/

**319: Janet LePage on the State of the Real Estate Market** Jun 05, 2022
Should you be investing in real estate now? After all, we have double digit inflation and rising interest rates.

Well, let’s start with an even more basic question. Should you be investing in anything right now?

What is the alternative? The alternative is to sit on cash while inflation erodes the value of your money by double digits. **Would you invest in something today that would guarantee you a loss of 8-12 percent of your money year over year?**

I’m guessing the answer is no. But that is exactly what you are doing if you are sitting on cash. Inflation punishes people who do not invest their money.

So…I would argue that the answer to whether or not you should invest is YES.

But what about real estate? I keep hearing people concerned about rising interest rates. But here is where a little bit of macroeconomic perspective is useful.

Interest rates are going up in order to curtail inflation. Right now, inflation is far outpacing the rise of interest rates which are actually below 2018 levels. For real estate investors, that’s very good news.

Why? What is inflation? It’s rising prices right? Guess what? Rents are part of that equation. In other words, rates will go up only as long as rents continue to go up as well. That is why real estate is considered a hedge against inflation.

As you know, our investor club focuses on multifamily real estate. I would argue that in times of higher inflation, we are in exactly the right place to deploy capital.

First of all, we are in the right geographic places in terms of where we invest. We are in high population growth markets. People have to live somewhere and construction is lagging way behind for a variety of reasons including supply chain disruption.

We are also in the most desirable real estate class in terms of positioning for inflation. Our leases only last a year. Imagine owning commercial properties with 10 year leases escalating at 2-3 percent per year while inflation rages at 11 percent!

In our portfolio, we have routinely raised rents greater than 20-30 percent per year because of not only inflation but because of value add programs.

Right now, lending issues have slowed transactions of large multifamily assets, but the reality on the ground is that there is more demand than ever for housing and we are raising rents year over year way above inflation numbers.

And remember, we have debt on every one of these properties. What does that mean? Think about it. Inflation erodes debt as well.

There may not be as many opportunities to buy this year because sellers who don’t need to sell may not do so. However, The opportunities that will come up have the potential to be very opportunistic and profitable. Times like these are when people make the most money.

No one knows this market better than Western Wealth Capital CEO Janet LePage. Do yourself a favor. Avoid the swirl and start thinking about the fundamentals. In this week’s Wealth Formula Podcast, Janet will help you do exactly that.

Janet LePage is the Co-Founder & CEO of Western Wealth Capital. For the past decade, Janet has been focused on creating wealth through well-selected real estate. She has grown her precise business strategy from more than 50 residential transactions in Arizona to the purchase of 110+ multifamily buildings comprised of over 27,000 rental units. Under Janet’s leadership, Western Wealth Capital has grown to over 400 employees and successfully completed over $4.6 billion in real estate transactions.

In 2019, Janet was recognized in Canada’s Top 40 Under 40 for Business and 2019 RBC Canadian Female Entrepreneur of the Year. Janet was also a bronze winner of the International Stevie Awards for Women in Business and awarded the REIN’s Multifamily Investor of the Year.

In 2017, Janet was named Entrepreneur of the Year (Real Estate/Construction/Pacific region) by Ernst & Young. In 2016, Janet was named one of *Business in Vancouver*’s Forty Under 40 and was awarded the Veuve Clicquot Canadian New Generation Award which recognizes young female entrepreneurs.

Janet holds a Bachelor of Applied Science in Computer Science and Business Administration (Simon Fraser University) and a Project Management Professional designation. Janet is co-author of ‘Real Estate Action 2.0’, released in 2016 by Jurock Publishing Ltd.

Shownotes:

What’s different about Western Wealth Capital?

What’s going on with the markets right now and how does Western Wealth Capital plan to navigate it?

The real estate inventory shortage

What’s next for Western Wealth Capital?

**318: The Wealth Accelerator** May 29, 2022
Nothing saddens me more than to see my fellow physicians and other highly trained professionals who spend their youth studying hard for the promise of a fulfilling career that will take care of them financially only to realize that they have been sold a false bill of goods.

Physicians in particular have gotten really screwed. The golden age for physician reimbursement was in the 1980s and 1990s. These were the days where it might have been “worth it“ to sacrifice the best decades of your life to medical school and residency—particularly for surgeons.

Not anymore. Physician reimbursement on many major surgical procedures has decreased as much as 90 percent over the last two decades while liability and patient expectations are up.

Now, I do understand that many of my surgical friends love what they do and never get burnt out like I did. They continue to practice and some even manage to do better than average through ancillary income.

But the concept of the rich surgeon is now largely a myth. I have had innumerable conversations with physicians and surgeons alike that are worried about retirement.

How can a person making 300-500k per year worry about retirement? Well, remember that most surgeons do not finish residency training until their early 30s. Residency income is on par with minimum wage when hours are taken into account.

So, as a surgeon, you finish training often with hundreds of thousands of dollars of debt and with 20-25 years of career left in you. You have to make up for lost time.

I use the example of surgeons because I am one but the story I’m telling relates to anyone who has spent a significant portion of their life “getting there” and who realizes that the amount of time to reap rewards of those educational investments is limited.

I do think that it is possible to get on track and feel comfortable about retirement but it’s not through the traditional investing paradigm. It’s through the Wealth Formula.

As we have shown through investor club for years now, extraordinary returns in short periods utilizing rapid redeployment and leverage is possible. And I still deploy 85-90 percent of my own investable capital per year in real estate.

However, I recently discovered a newly designed insurance product that I am eager to share with you. As you know, despite misinformation from less sophisticated sources, the wealthiest people in the world continue to utilize life insurance retirement plans (LIRPs). I do as well.

We have previously shown the benefits of Wealth Formula Banking and Velocity Plus. On this week’s Wealth Formula Podcast we will discuss the most powerful LIRP I have ever seen.

If you’re 42 years old, an investment of $100k per year for the next 10 years could result in almost $44 million dollars of income until the age of 90 if you retire at 52 AND allow you to leave an additional $31 million in death benefit.

This is totally real and something you should know about. And to be honest, the example I gave here is the least exciting example for me personally. The ability to create tremendous amounts of income and/or legacy with relatively modest investments now is something I have never seen with something this “safe”

Please make sure to tune in to this week’s Wealth Formula Podcast. This might be something that you might want to consider.

Christian joined the financial services industry in 2004. Over the course of his career to date, he has developed a broad-based knowledge and experience set. He began as a traditional advisor, working with local clients in his home state. In that context, he began a movement of successfully partnering with other professionals, including accountants and attorneys, to assist clients in implementing sound financial strategies. He spent more than five years in management with 2 regional planning firms, during which time he assisted new and seasoned professionals in creating efficient systems and methods to build meaningful practices. Over the last several years, he has expanded to working across the country, teaching financial principles, and working with clients across a broad spectrum, including wealth accumulation, retirement distribution planning, as well as innovative, advanced planning strategies for both high-income and high-net-worth individuals and businesses. He’s a member of AALU, and holds the designations of Accredited Asset Management SpecialistSM and Accredited Wealth Management AdvisorSM Christian is married and has two children, and is an avid sports fan.

Rod has been in financial services since 2009. Prior to going into business for himself, he worked in marketing and finance with several small businesses. He had the opportunity to purchase an existing furniture business in 2007, just prior to the Great Recession. The experience of struggling to stay afloat amid difficult economic conditions inspires Rod every day in his efforts to educate and assist his clients in implementing sound financial strategies. He strongly advocates for establishing a firm foundation, utilizing proven strategies and financial tools to create a strong base upon which we can each build our financial house. In addition to focusing on Wealth Formula Banking and Velocity Plus, he has expertise in retirement income planning. Rod has a bachelor’s degree in Marketing Communications, and an MBA with an emphasis in Entrepreneurship. He and his wife Jodi are the proud parents of 7 wonderful children. As a family they thrive on spending time exploring nature, playing games and doing projects together. He enjoys sports, music and reading.

Snippets:

Key benefits of The Wealth Accelerator

Premium Finance

What is Arbitrage?

Why get The Wealth Accelerator?

**317: The Financial Cold War with China** May 22, 2022
No matter how open-minded you think you are, you are always going to approach things with a certain bias. And it only takes being completely wrong about something that you would have bet your life on to realize that.

My perspective on Covid-19 in the early days is a good example. Now I know there seem to be some who still don’t think it was a big deal. However, at least old guard Covid and Delta were pretty dangerous and a lot of people died.

Others, like me, got very sick and took a long time to fully recover. Early on, when reports started coming out of China, the data didn’t impress me. In hindsight, the data wasn’t accurate.

However, the more powerful force in my mind negating the seriousness of Covid was my bias that something like that could not happen in our country.

I certainly was aware of SARS and Ebola outbreaks overseas but my mind could not process a pandemic in the United States. I was wrong.

And when you are wrong on such a serious thing it makes you realize your own biases and perspective very well.

As an investor, this concept of trying to recognize your Blindspots is extraordinarily important. For example, remember that most digital assets i.e. cryptocurrency investments are still highly speculative and involve asymmetric risk.

Aside from perhaps bitcoin, the risk profile for cryptocurrency is extremely high even if you believe in the individual projects and the team involved. Sometimes, if people around you are echoing the same positive sentiments, it can sometimes artificially blind us to the actual risk involved.

A great example of that recently involves the cryptocurrency, Luna. It seemed like a great project with considerable upside but still had an asymmetric risk profile. And, as these kinds of investments can lead to tremendous upside, they can often go to zero which is exactly what happened to Luna.

Biases based on perspective are around us everywhere. The reason I mention them now is because of my conversation with this week’s guest on Wealth Formula Podcast, James Fok.

James is an expert on China and its relations with the United States and the financial markets. His view on China’s motives whether it comes to digital currency or the war in Ukraine are quite different from what I had expected.

Reflecting on this interview, I realized it was just another example of how perspective can really influence the way you view the world. James is an English intellectual who lives in Hong Kong. I am an American who sees China as an adversary akin to the former Soviet Union.

Tune in to this conversation. You’ll see what I mean.

James Fok is a veteran financial and strategic advisor to corporations and governments. He served as a senior executive at Hong Kong Exchanges and Clearing (HKEX) from 2012 until 2021, during a period of rapid internationalisation in China’s capital markets. While there, he played a major role in a number of landmark financial markets initiatives, including the launch of the Shanghai-Hong Kong Stock Connect programme (2014), Bond Connect (2017) and the Hong Kong market’s Listing Reforms (2018). Prior to HKEX, Fok worked as an investment banker in both Europe and Asia, specialising in the financial services sector.

Fok has written and spoken extensively about market structure issues and the intersection between geopolitics and international finance. He serves or has served on a number of financial industry bodies, including Ireland for Finance’s Industry Advisory Committee (2021-), the Executive Board of the International Securities Services Association (2018-21), and the Financial Services Advisory Committee of the Hong Kong Trade and Development Council (2014-21). He is also a member of the Advisory Board of Hex Trust (2021-).

Fok holds a BA (Hons) from the School of Oriental and African Studies of the University of London. He lives in Hong Kong with his wife and two sons.

Shownotes:

“Financial Cold War”

How is the dollar at the centerpiece of this financial cold war between China and the US?

How will technology influence the balance of power in the future?

China’s perspective on digital currencies

**316: The War Against the Wealthy** May 15, 2022
When times get tough, it is always easier to have a scapegoat. After all, it is easier to blame an enemy than an unfortunate circumstance. The enemy can be punished and held responsible. Circumstances cannot.

The most extreme example of this in modern history is the vilification of Jews during World War 2. Reparations for World War 1 left Germany in a world of economic hurt. Hitler demonized Jews as the root of the problem as many of them were successful professionals and business people.

As wealth disparities continue throughout developed nations, we are seeing a more subtle version of demagoguery playing out in real time in the form of nationalism. Again, it is easier to blame someone or a group of people for problems than it is to accept a circumstance that cannot be punished.

This blame game is human nature. It’s a common theme throughout history and in everyday life. It allows us to feel in control when we are often not. Is that what’s behind all of the socialist rhetoric out there these days?

As a child in the 1980s during the Reagan era it seemed like the wealthy were aspirational figures. Socialist voices blaming the rich for all that is wrong with the world were in the minority.

Now, you can’t turn on the television without hearing about how horrible and greedy the rich are and how they don’t pay their fair share of taxes.

Although few politicians and public figures would come to the rescue of millionaires and billionaires in a moral argument, the truth does matter.

My guest on Wealth Formula Podcast this week has done a deep dive on the subject of whether or not the rich are an asset or a liability to society. Tune in and find out what he discovered!

Derek Bullen is Founder and CEO of S.i. Systems, one of the largest professional services companies in Canada, with thousands of information technology consultants working on projects for blue-chip corporations and government agencies across Canada.

His new book is In Defence of Wealth: A Modest Rebuttal to the Charge the Rich Are Bad for Society (Barlow Books, 2022).

Shownotes:

Why is nobody interested in moderate TV?

Do wealthy people have a responsibility to address the wealth disparity?

People often say they want the rich to pay their fair share. But what is fair?

In Defence of Wealth: A Modest Rebuttal to the Charge the Rich Are Bad for Society

Bous Episode: How to Become an Accredited Investor without the Money May 12, 2022

**315: The Monkey Mind** May 08, 2022
I don’t know about you but sometimes I have so many different things cycling through my brain at the same time but it’s hard to keep track of any one of them.

I’m not talking about just work or personal finance related issues. I’m also talking about trying to keep my kids’ schedules straight. I’ve got three young daughters with a lot of friends who have birthdays seemingly every weekend.

Then there are school events and conferences, pick up and drop off and after school sports! Thank God only one of them is particularly athletic! Throw in a dental appointment and a haircut, and maybe a work event, and now you’ve got a real monkey mind on your hands.

I say this…but I also know that, compared to a lot of people, I’ve got it pretty darn good. I make plenty of money and can hire plenty of help and my kids are really well behaved.

The issues that I am talking about aren’t new to society. They are simply a product of being an adult and having responsibilities. That said, it’s not a bad idea once in a while to take a step back and focus on our own mental health.

So in this week’s Wealth Formula podcast, that’s exactly what we will do. We will talk about the monkey mind and what you might be able to do if you suffer from it.

Listen HERE!

Jean-Francois (J.F.) Benoist has been counseling people struggling with addiction, mental health, and relationship issues for over twenty years. He co-founded The Exclusive Addiction Treatment Center, a non-12-step residential addiction treatment center, with his wife, Joyce, in 2011.

He is the creator of the therapeutic methodology Experiential Engagement Therapy (EET), which focuses on addressing a person’s underlying core beliefs. He is well-known for his authentic, experiential techniques, which maximize long-term change.

Benoist is a Certified Substance Abuse Counselor (CSAC) and Certified Option Process Mentor/Counselor. He is an internationally certified leader in The Mankind Project, a nonprofit organization dedicated to promoting men’s personal growth. He began his studies in human development and empowerment with Robert Hargrove and Relationships Inc. in 1980 and has been deeply involved in facilitating change in others ever since.

Shownotes:

The fear of financial success

How does one overcome the fear of success?

How does one maintain a healthy mindset?

Addicted to the Monkey Mind: Change the Programming That Sabotages Your Life

**314: Is Economics Just Common Sense?** May 01, 2022
The hardest part about understanding economics is terminology. In reality, economics really just comes down to understanding human behavior based on incentives.

Let’s take for example the *Cobra Effect*. This is a term coined by economist Horst Siebert to describe a time in India under British rule when the local governor was trying to figure out how to deal with an apparent uptick of venomous snakes in Delhi.

The governor decided to implement a bounty system. People were paid handsomely for each and every cobra head that they could produce. The solution worked very well at the beginning and there was a significant drop in the number of snakes in the area.

However, over time the problem returned with a vengeance. Even though significant dead snakes were being produced and awarded with cash, the problem did not go away and even seemed worse.

What do you think happened? Well, what if you were a poor Indian person in Delhi who started making good money killing snakes and then realized that there were less and less of them around to cash in on? What would you do?

Well, you’d figure out a way to find more snakes. And, the easiest way to do that would be to simply to start a snake farm yourself. That’s what happened and that is what is referred to as the *Cobra Effect.*

This is a classic example of thinking through the incentives that drive people to come up with some possible outcomes resulting from various situations and policies. That is essentially what economics is.

However, like many fields, economics is hindered by a lot of technical Jargon. It’s what makes academics feel smart and what helps members of the Federal Reserve keep you out of the loop of what’s really going on in the world.

What do you think their incentive for confusing you might be? There is another economics question for you!

My guest on Wealth Formula Podcast this week is a journalist at a prestigious newspaper that believes that financial economics is just a matter of common sense. He didn’t always think this. A journalist by trade, he felt completely overwhelmed by financial discussions until the age of 30.

Then he took matters into his own hands and decided to take some time and learn the things that he thought were so confusing. To his surprise, they weren’t confusing at all. They were common sense concepts that could be learned by anyone.

In fact, he even wrote a book to help others understand the basics of macroeconomics from the perspective of a non-economist. His story is fascinating and inspiring. Make sure to listen in on our conversation on this week’s Wealth Formula podcast. You might even want to grab a copy of his book.

Matthew Hennessey is the Wall Street Journal’s deputy op-ed editor. He is the author of “Visible Hand” (2022) and “Zero Hour for Gen X” (2018). He lives in the New York City area.

Shownotes:

Why would it help Americans to embrace the economic reality that you can’t have everything you want?

Greed vs. ambition

Can we fix income inequality?

Visible Hand: A Wealth of Notions on the Miracle of the Market

**313: Is There Such Thing As Economic Truth Anymore?** Apr 24, 2022
As I write this email, I’m on my way to Phoenix for our biannual meetup. So…I’ll keep it short.

Coming up Covid and in the midst of a war in Europe we are experiencing unusual inflation forcing the Fed’s hand at raising interest rates.

Over the last several weeks, we have had several economists and authors on the show trying to predict the future. Unfortunately, that’s not an easy task.

We can look at the past and take some lessons from history. But nothing is exactly as it is today. Sure we had double-digit inflation in the late 70s and 80s but for very different reasons than rising inflation in 2022.

So, the question is whether or not there is a playbook to deal with economic uncertainty and change. Of course, the answer is yes. We have our typical monetary and fiscal options.

However, for a unique situation like we are in now, is there such thing as “economic truth“? My guest on this week’s episode of Wealth Formula podcast thinks there is and he explains what he thinks we need to do in these interesting times.

Listen Now!

David L. Bahnsen is the founder, Managing Partner, and Chief Investment Officer of The Bahnsen Group, a national private wealth management firm with offices in Newport Beach, New York City, Nashville, and Minneapolis, managing over $3.5 billion in client assets.

David is consistently named as one of the top financial advisors in America by Barron’s, Forbes, and the Financial Times. He is a frequent guest on Fox News, Fox Business, CNBC, and Bloomberg and is a regular contributor to National Review and World. He appears weekly on The World and Everything in It, discussing the week’s economic and market news.

David serves on the Board of Directors for the National Review Institute, King’s College in New York City, and is a founding Trustee for Pacifica Christian High School of Orange County. He is the Senior Fellow of Economics for the Center for Cultural Leadership and a long-time faculty member for both the Acton Institute and the Blackstone Fellowship of the Alliance Defending Freedom. David is passionate about the integration of faith and economics and has lectured and written for years about a theology of wealth and the marketplace. He responds to the term “Kuyperian,” is deeply appreciative of Tim Keller and Father Robert Sirico, and has read more systematic theology than any human should ever read. His late father, Dr. Greg Bahnsen, was a renowned Christian apologist and is David’s personal hero and mentor.

He is the author of the book, *Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It*, and his newest book, *There’s No Free Lunch: 250 Economic Truths*, released in November 2021.

His ultimate passions are his wife of 20+ years, Joleen, their children, sons Mitchell and Graham, and daughter Sadie, and the life they’ve created together on both coasts.

Shownotes:

definition of Economics

The difference between the current inflationary environment and inflation in the 1980s?

Can we look at old economic truths to try to address today’s new economic problems?

The forecast for inflation

**312: Should Real Estate Investors Be Worried About Inflation?** Apr 17, 2022
The most common question I get from investors these days is how increasing interest rates will affect the performance of our real estate holdings.

There is often concern, for good reason, that as rates go up our net operating income will go down. The good news is that things aren’t that simple. Rate increases don’t happen in a vacuum.

Remember that the reason the Fed is increasing interest rates in the first place is because of inflation. We are in 1980s territory with 8.5 year over year inflation. The Federal Reserve has to raise rates to keep it under control.

But drilling down on inflation reveals an important reality in multifamily real estate. In our high growth markets, we are increasing rents at a pace that often significantly out-paces inflation right now.

In other words, what we are finding is that we are driving net operating income up at our properties far in excess to what the inflation numbers show—as scary as they may sound.

This is why we always talk about real estate as a hedge to inflation. You are seeing this reality in real time. Not only are we hedging inflation. In reality, as the second largest landlord in Phoenix, our rent increases are probably making a significant impact on the inflationary data in that market.

The specific kind of real estate that we focus on is also helpful. Our leases are year-to-year so we can raise rents appropriately with the economic realities on the ground. Many commercial leases are multi-year fixed contracts that can not be altered to reflect inflation.

Finally, you should know that cap rates do not correlate with interest rates in a linear fashion. Cap rates rise slower than interest rates. We also mitigate that risk by buying rate caps on all of our properties.

Bottom line is that, in my opinion, high quality multifamily real estate in high growth markets is a great place to be in inflationary environments like we are now.

I understand the anxiety people have about deploying capital but remember, not investing when there is 8.5 percent inflation year over year essentially guarantees you lose money in form of buying power. So fear is not going to save you money.

But I know it’s a complicated topic and to drill down on it further I talk with serial real estate entrepreneur, Christopher Volk, on this week’s episode of Wealth Formula Podcast. Having taken multiple companies public including a REIT, he knows a thing or two about the real estate market!

A recognized business model expert, Christopher Volk has introduced and led three successful public companies, two of which he co-founded. Those companies provided more than $20 billion in growth capital to thousands of businesses, helping them succeed. Chris resides with his wife in Arizona and Alabama.

Shownotes:

How does inflation affect real estate as a whole?

Is it a good time right now to invest?

Christopher talks about his book The Value Equation

**311: Walmart’s Chief Economist on Inflation, War and What it Takes to Scale a Business** Apr 10, 2022
I have started a number of small businesses over the past decade. I know that a number of you run your own business or are thinking about some kind of new entrepreneurial endeavor.

So, let me tell you about some of the things that I have learned. First, fewer variables make businesses easier to run and, in most cases, more profitable. You can see examples of this with big business all the time. Ever seen the menu at In-N-Out Burger? Pretty simple!

While it may seem like a good idea to offer a lot of services to a lot of different kinds of people, most of the time businesses realize that this approach is not ideal.

Too many products and services create too many variables. The more moving parts you have in a business makes it harder to run efficiently.

Another lesson that I learned related to this concept of keeping complexity minimal is to stay away from businesses with too much overhead.

I have run medical businesses with marketing budgets of over $1 million per year. In good months, I felt like I was king of the world. On the bad ones, I worried about becoming homeless! It’s not a good way to live.

Finally, the most difficult part of owning and scaling a business, in my opinion, is the issue of people. I once built a very successful cosmetic surgery business in Chicago and then tried to do the same in four other cities at the same time.

My reasoning was that if I could do as well as I was in Chicago, why couldn’t I do it in smaller markets? Well, those businesses failed miserably. And, in hindsight, the biggest reason for failure was because I did not have the right people to execute the plan.

Of course, I’m just a bootstrap entrepreneur who’s had some success and failures. But my guest on Wealth Formula podcast this week has been the chief economist at some of the biggest companies in the world. In fact, he has just been named the chief economist of Walmart.

This week’s Wealth Formula Podcast features an interview that I did with him. What I found fascinating about this interview was that many of the problems that I saw at my level were the same for multibillion dollar corporations.

Of course, I couldn’t resist getting his take on the current economy as well so I asked him a little bit about that.

So whether you’re interested on his takes on what it takes to grow and scale a business or what he thinks of today’s unusual economic situation, be sure to tune in!

Professor John A. List is the Kenneth C. Griffin Distinguished Service Professor in Economics at the University of Chicago. His research focuses on combining field experiments with economic theory to deepen our understanding of the economic science. In the early 1990s, List pioneered field experiments as a methodology for testing behavioral theories and learning about behavioral principles that are shared across different domains. He co-authored the international best seller, The Why Axis, in 2013. List was elected a Member of the American Academy of Arts and Sciences in 2011, and a Fellow of the Econometric Society in 2015. List received the 2010 Kenneth Galbraith Award, the 2008 Arrow Prize for Senior Economists for his research in behavioral economics in the field, and was the 2012 Yrjo Jahnsson Lecture Prize recipient. He is a current Editor of the Journal of Political Economy.

Shownotes:

What is going on with the economy and where are we headed?

What is driving all of the inflation?

John as the new Chief Economist of Walmart

The Voltage Effect

Bonus Episode: Financial Education for Kids Apr 05, 2022

My kids are little. My oldest is 12 and her sisters are 9 and 6.

Admittedly, I’ve spent no significant amount of time trying to teach them about money as of yet. If anything, I have taught them a little bit about the burden of taxes by eating half of the cupcakes and ice cream and metaphorically blaming the IRS. That one seems to get the point across!

When they get older, you can be sure that I will spend a significant amount of time with them teaching them about money. After all, it is my intent to leave them plenty of it after I die!

For those of you who are further along in the process, I thought this week’s discussion about children and money with an actual high school teacher might be of value.

Disclaimer: I have not reviewed this guy’s course and I don’t know if it’s worth it at all. However, there is no harm in listening to this perspective on a bonus podcast.

Dan Sheeks is the owner and founder of SheeksFreaks LLC, an online community dedicated to helping young people live their best lives by making smart money decisions. He has been a high school business teacher in Denver, Colorado, for eighteen years, and he’s passionate about teaching teenagers personal finance, passive income, real estate investing, and early financial freedom strategies. Dan and his wife own fifteen units and have enjoyed success with multifamily, short-term rentals, and the BRRRR strategy. In his free time, Dan likes to run, bike, cross-country ski, and attend bluegrass music festivals.

Shownotes:

Purchase First to a Million: A Teenager’s Guide to Achieving Early Financial Independence: https://bit.ly/3Hp8R84
SheeksFreaks Community: https://bit.ly/sheeksfreaks131
SheeksFreaks Instagram: https://www.instagram.com/sheeksfreaks/
Dan’s Instagram: https://www.instagram.com/dsheeks/
Dan’s email: dan@sheeksfreaks.com

**310: What’s the Big Deal about Venture Capital?** Apr 03, 2022
You would think from the vilification of capitalists in recent years that we are nothing but a waste of space on earth.

“Pay your fair share capitalist pig!” That’s what you hear these days from popular politicians on the left. Of course, in reality, without us, the government would be broke.

What makes America great and what has made the world the place that it is in terms of technology and health care over the last century has entirely to do with the efforts of capitalists.

Just think about all of those people walking around with iPhones these days. Was Steve Jobs doing that for free? Now, more people in the world have cellular phones and are connected to one another than any time in history.

If you are the Unabomber and hate technology, you might have another view. However, technology has made our lives better and it is because of investments from capitalists like you and me.

Now I’m not in the world of Venture Capital myself. If I knew enough to be able to invest intelligently I probably would be. Beyond its potential for huge returns venture drives innovation in our world today.

And while most of us are far more interested in owning stable assets such as multi family real estate, it’s good to know the role venture capital in our world today. And who knows, you may be inspired to become a venture capitalist yourself.

Listen to this week’s Wealth Formula Podcast episode to learn why Venture Capital is a big deal.

Sebastian Mallaby is the Paul A. Volcker senior fellow for international economics at the Council on Foreign Relations and a contributing columnist for The Washington Post. An experienced journalist and public speaker, Mallaby contributes to a variety of other publications, including Foreign Affairs, the Atlantic and the Financial Times, where he spent two years as a contributing editor. He is the author of five books, most recently “The Power Law: Venture Capital and the Making of the New Future.” Mallaby’s interests cover a wide variety of domestic and international issues, including central banks, financial markets, the implications of the rise of newly emerging powers, and the intersection of economics and international relations. His book “The Man Who Knew: The Life & Times of Alan Greenspan” won the 2016 Financial Times/McKinsey Business Book of the Year Award and the 2017 George S. Eccles Prize in Economic Writing. His book “More Money Than God: Hedge Funds and the Making of a New Elite” was described by New York Times columnist David Brooks as “superb”; it was the recipient of the 2011 Loeb Prize and a New York Times bestseller. Mallaby’s earlier works are “The World’s Banker,” a portrait of the World Bank under James Wolfensohn that was named as an “Editor’s Choice” by the New York Times; and “After Apartheid,” which was named by the New York Times as a “Notable Book.” An essay in the Financial Times said of “The World’s Banker”: “Mallaby’s book may well be the most hilarious depiction of a big organization and its controversial boss since Michael Lewis’s Liar’s Poker.” Before joining the Council on Foreign Relations, Mallaby was a Washington Post columnist and editorial board member for eight years. Before that, he spent 13 years with The Economist, during which time he worked in London, where he wrote about foreign policy and international finance; in Africa, where he covered Nelson Mandela’s release and the collapse of apartheid; and in Japan, where he covered the breakdown of the country’s political and economic consensus. Between 1997 and 1999, Mallaby was The Economist’s Washington bureau chief and wrote the magazine’s weekly Lexington column on American politics and foreign policy. He is a two-time Pulitzer Prize finalist: once for editorials on Darfur and once for a series on economic inequality. In 2015, he helped to found a startup, InFacts.org, a web publication making the fact-based case for Britain to remain in the European Union. Mallaby was educated at Oxford, graduating in 1986 with a first-class degree in modern history. After 18 years in Washington, D.C., he moved to London in 2014, where he lives with his wife, Zanny Minton Beddoes, editor in chief of The Economist.

Shownotes:

What is Venture Capital?

Groupthink and its effects on Venture Capital investments

VCs and Capitalism?

Sebastian’s book: The Power Law

**309: A Money Revolution?** Mar 27, 2022
Money has taken on many forms throughout history. In the last couple of centuries gold has been the dominant form of money recognized globally. In 1912 J.P. Morgan himself said, “Money is gold, and nothing else”.

Yet the relevance of gold has really come into question since Nixon took the dollar off the gold standard in 1971. That move has been vilified by Austrian economists and others who treasure the concept of sound money.

The revolution that started in 1971 changed the global economy from one based on gold to one based on credit. That sounds like anathema doesn’t it?

Well…maybe a credit-based economy is not so bad. After all, it could be argued that the uncoupling of gold and the US dollar resulted in the most rapid growth in global wealth over the last 50 years than ever before in history.

It could be argued that “creditism” resulted in fewer people in poverty around the world and even the fall of the Soviet Union. If that’s the case, is credit and debt so bad?

Richard Duncan doesn’t think so. In fact, he’s written a new book that suggests that we should lean into our debt with investments that will bring us to the next level of a civilized society.

Curious? Make sure to tune into this week’s episode of Wealth Formula Podcast!

Richard Duncan is the author of four books analyzing the causes and the effects of the economic crises that have brought the global economy to the brink of collapse during recent decades.

The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005), predicted the global economic disaster that began in 2008 with extraordinary accuracy. It was an international bestseller. The Corruption of Capitalism: A strategy to re-balance the global economy and restore sustainable growth (CLSA Books, 2009) described the long series of US policy mistakes responsible for the Crisis of 2008. The New Depression: The Breakdown Of The Paper Money Economy (John Wiley & Sons, 2012) introduced an important new analytical framework, The Quantity Theory of Credit, that explained all aspects of the global economic crisis that began in 2008: its causes, the rationale for the government’s policy response to the crisis, and likely future developments.

His latest book is The Money Revolution: How to Finance the Next American Century (John Wiley & Sons, 2022). The first two parts of the book describe the evolution of Money and Credit over the last century. These include a detailed history of the Federal Reserve since its establishment in 1913 and a discussion of the transformation of our economic system from Capitalism to Creditism during the five decades since Dollars ceased to be backed by Gold. Parts One and Two show that a “Money Revolution” has occurred and fundamentally altered the way the global economy functions. Part Three demonstrates that this Money Revolution opens up unprecedented opportunities for the United States to radically accelerate economic growth, enhance human wellbeing and strengthen US national security by investing aggressively in the Industries and Technologies of the Future.

Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. He also worked as a consultant for the IMF in Thailand during the Asia Crisis. Richard currently publishes Macro Watch, the bi-monthly video newsletter he founded in 2013.

Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television, as well as on BBC World Service Radio. He has published articles in The Financial Times, The Far East Economic Review, FinanceAsia and CFO Asia. He is also a well-known speaker whose audiences have included The World Economic Forum’s East Asia Economic Summit in Singapore, The EuroFinance Conference in Copenhagen, The Chief Financial Officers’ Roundtable in Shanghai, and The World Knowledge Forum in Seoul.

Richard studied literature and economics at Vanderbilt University (1983) and international finance at Babson College (1986); and, between the two, spent a year traveling around the world as a backpacker.

Shownotes:

The shift to a Credit-based economy in the United States

How has the shift to “Creditism” affected the United States and the rest of the world?

Remedies for some of the issues that the US is facing right now

Macrowatch

The Money Revolution: How to Finance the Next American Century

**309: A Money Revolution?** Mar 27, 2022
Money has taken on many forms throughout history. In the last couple of centuries gold has been the dominant form of money recognized globally. In 1912 J.P. Morgan himself said, “Money is gold, and nothing else”.

Yet the relevance of gold has really come into question since Nixon took the dollar off the gold standard in 1971. That move has been vilified by Austrian economists and others who treasure the concept of sound money.

The revolution that started in 1971 changed the global economy from one based on gold to one based on credit. That sounds like anathema doesn’t it?

Well…maybe a credit-based economy is not so bad. After all, it could be argued that the uncoupling of gold and the US dollar resulted in the most rapid growth in global wealth over the last 50 years than ever before in history.

It could be argued that “creditism” resulted in fewer people in poverty around the world and even the fall of the Soviet Union. If that’s the case, is credit and debt so bad?

Richard Duncan doesn’t think so. In fact, he’s written a new book that suggests that we should lean into our debt with investments that will bring us to the next level of a civilized society.

Curious? Make sure to tune into this week’s episode of Wealth Formula Podcast!

Richard Duncan is the author of four books analyzing the causes and the effects of the economic crises that have brought the global economy to the brink of collapse during recent decades.

The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005), predicted the global economic disaster that began in 2008 with extraordinary accuracy. It was an international bestseller. The Corruption of Capitalism: A strategy to re-balance the global economy and restore sustainable growth (CLSA Books, 2009) described the long series of US policy mistakes responsible for the Crisis of 2008. The New Depression: The Breakdown Of The Paper Money Economy (John Wiley & Sons, 2012) introduced an important new analytical framework, The Quantity Theory of Credit, that explained all aspects of the global economic crisis that began in 2008: its causes, the rationale for the government’s policy response to the crisis, and likely future developments.

His latest book is The Money Revolution: How to Finance the Next American Century (John Wiley & Sons, 2022). The first two parts of the book describe the evolution of Money and Credit over the last century. These include a detailed history of the Federal Reserve since its establishment in 1913 and a discussion of the transformation of our economic system from Capitalism to Creditism during the five decades since Dollars ceased to be backed by Gold. Parts One and Two show that a “Money Revolution” has occurred and fundamentally altered the way the global economy functions. Part Three demonstrates that this Money Revolution opens up unprecedented opportunities for the United States to radically accelerate economic growth, enhance human wellbeing and strengthen US national security by investing aggressively in the Industries and Technologies of the Future.

Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. He also worked as a consultant for the IMF in Thailand during the Asia Crisis. Richard currently publishes Macro Watch, the bi-monthly video newsletter he founded in 2013.

Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television, as well as on BBC World Service Radio. He has published articles in The Financial Times, The Far East Economic Review, FinanceAsia and CFO Asia. He is also a well-known speaker whose audiences have included The World Economic Forum’s East Asia Economic Summit in Singapore, The EuroFinance Conference in Copenhagen, The Chief Financial Officers’ Roundtable in Shanghai, and The World Knowledge Forum in Seoul.

Richard studied literature and economics at Vanderbilt University (1983) and international finance at Babson College (1986); and, between the two, spent a year traveling around the world as a backpacker.

Shownotes:

The shift to a Credit-based economy in the United States

How has the shift to “Creditism” affected the United States and the rest of the world?

Remedies for some of the issues that the US is facing right now

Macrowatch

The Money Revolution: How to Finance the Next American Century

**308: Interest Rates, Inflation and Cryptocurrency!** Mar 20, 2022
I write this on the “Ides of March” one day before the Federal Reserve meets to discuss the economy and its plans for the near future.

The 900-pound gorilla in the room is inflation although the war in Ukraine may be a mitigating factor for the impending hawkish moves anticipated.

By the time this post is published and podcast recorded, you’ll already know what happened at that meeting. Let me guess…an increase in the discount rate by 25 basis points?

Well, that’s what has baked into the markets and what will dictate any further market movements is discussion of further rate hikes and disposition of the Fed’s bond portfolio.

Ok, so now what do you do? Should you panic and stop investing? Well, that’s the knee-jerk response right? But remember, why are rates going up in the first place? Yes…inflation.

And what happens to the money in your bank account during inflation? It loses value. So, keeping yourself in cash right now is pretty much a guaranteed way to lose money. In order for you to break even, you have to be keeping up with inflation at least!

What am I doing? I’m still investing my money in assets hedged for inflation. The good news is that I don’t have to change my investment strategy at all because multifamily real estate is a great hedge against inflation.

“But Buck”, you ask, “won’t cap rates go up with interest rates?” Typically that’s true although it’s not necessarily a linear relationship. Furthermore, ask yourself once again why mortgage rates would go up? Yes…inflation. And yes…inflation means increasing rents as well. In other words, increasing rates is hedged by increasing rents.

Now to be clear, I’m not saying we have nothing to worry about. There is a Chinese curse that says, “May you live in interesting times.” Like it or not, we live in interesting times with plenty of danger and uncertainty. All we can do is be rational and disciplined with how we allocate our money.

How we allocate money may not be the same for everyone in the world right now either. If I was in Russia I’d try to buy as much bitcoin as possible to get out of the Ruble in a hurry. But in the US, the more reliable hedge might still be good old-fashioned multifamily real estate.

It’s a complicated topic and worth discussing further with experts on investing trends and that is exactly what we will do on this week’s Wealth Formula Podcast with my guest David Sacco!

P.S. DO NOT miss our upcoming meetup in Phoenix. Mark April 22nd and 23rd on your calendar and CLICK HERE to register ASAP. Only a few spots remain!

David Sacco is a Practitioner in Residence in the Finance program and serves as a full-time instructor in the Finance, Economics, Management and Entrepreneurship programs. Mr. Sacco joined the Pompea College of Business faculty in 2018. He holds both a BS and an MBA, in finance, from New York University.

Mr. Sacco spent 25 years in the institutional fixed income business. He began his career at The Chase Manhattan Bank in interest rate swaps in 1985 and moved to UBS in 1986. Before leaving UBS in 2009, he traded a variety of fixed income products and derivatives and rose to the level of Managing Director and global head of Rates. He was also a member of the UBS Investment Bank Board.

In addition to teaching, Mr. Sacco is involved in several extracurricular organizations at the Pompea College of Business including the Investment Club and Liberty Initiative. Mr. Sacco also has an active consulting business for and invests in start-ups and small businesses.

Shownotes:

What are the Fed’s best options to combat inflation right now?

Is it possible to eliminate inflation without triggering a recession?

How can inflation affect the commercial real estate market

Dogecoin

**307: What does the War in Ukraine Mean for You?** Mar 13, 2022
Americans have always enjoyed the advantage of geographic isolation from much of the Western World. It has allowed us, in many ways, to look at many of the world’s conflicts from a relatively disinterested distance. Who knows if we would have gotten involved at all in World War 2 if not for the bombing of Pearl Harbor.

Nevertheless, the implications of major conflicts like the one currently happening in Ukraine eventually find their way to our shores. And more often than not they do so most noticeably at the level of our pocketbooks.

Make no mistake, the Russian invasion of Ukraine will affect you. Unless you drive a Tesla you’re seeing it at the gas station now. But there are more subtle and long-term implications of this war that will continue to shape the global economy.

To better understand how, this week’s Wealth Formula Podcast episode features a conversation with an economist who was named one of the 100 most important public intellectuals in the world by Foreign Policy Magazine.

Make sure to listen now and understand how Putin’s war may affect you.

Barry Julian Eichengreen (born 1952) is an American economist who holds the title of George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley, where he has taught since 1987. Eichengreen currently serves as a Research Associate at the National Bureau of Economic Research and as a Research Fellow at the Centre for Economic Policy Research.

Shownotes:

How does the war in Ukraine affect our local economy?

How will the conflict in Ukraine end?

In Defense of Public Debt

Modern monetary theory

https://eml.berkeley.edu/~eichengr/

**306: Robert Kiyosaki on Vietnam and the Politics of Money** Mar 06, 2022
In June of 2008, I graduated from my surgical residency program, got married and discovered Robert Kiyosaki.

14 years later, I’m no longer a practicing surgeon nor am I married anymore. However, the impact of Robert’s books defined the course of my life.

It’s really extraordinary when I think about how a single book that I stumbled upon in a dingy Mexican airport could have just profound implications for me.

On the other hand, most of us can define a moment in time that changed it all. That could be meeting a person, going somewhere or, in my case, reading a book.

These transitional experiences feel like being hit with lightning. I call my Kiyosaki transformation as *taking the purple pill*. Many of you have had similar experiences with his books.

In this episode of Wealth Formula Podcast, I ask Robert Kiyosaki to talk about the defining experiences of his life that shaped his worldview and the course of his life.

Listen HERE!

Best known as the author of Rich Dad Poor Dad—the #1 personal finance book of all time—Robert Kiyosaki has challenged and changed the way tens of millions of people around the world think about money. He is an entrepreneur, educator, and investor who believes the world needs more entrepreneurs who will create jobs.

With perspectives on money and investing that often contradict conventional wisdom, Robert has earned an international reputation for straight talk, irreverence, and courage and has become a passionate and outspoken advocate for financial education.

Robert has been heralded as a visionary who has a gift for simplifying complex concepts—ideas related to money, investing, finance, and economics—and has shared his personal journey to financial freedom in ways that resonate with audiences of all ages and backgrounds. His point of view is that the “old advice”—go to school, get a job, save money, get out of debt, invest for the long term, and diversify—has become obsolete advice in today’s fast-paced ever-changing world. His Rich Dad philosophies and messages challenge the status quo and his teachings encourage people to take initiative to become financially educated and financially free.

Robert grew up in the small town of Hilo, Hawaii. He went to college at Kings Point Merchant Marine Academy in New York state. Upon graduation, Robert turned down a well-paying job with Standard Oil and chose to enlist in the Marine Corps as a helicopter pilot at the time of the Vietnam War.

After his service in the military, Robert went to work for the Xerox Corporation. His Rich Dad told him that the key to any successful business is sales. Robert rose to the #1 salesperson at Xerox. From there his entrepreneurial spirit kicked in. He created the company Rippers, along with his brother. Rippers was the first company ever to bring to market the nylon and Velcro “surfer” wallet.

During this time Robert met and studied with R. Buckminster Fuller; a futurist, visionary, inventor, architect and humanitarian. Bucky, as he was called, had an immense impact on Robert and as a result Robert set out to make a positive difference as an educator of entrepreneurship and money.

In 1996 Robert and his wife, Kim, created and launched the CASHFLOW board game to teach people about money and investing in a fun and entertaining way. In 1997 Robert wrote Rich Dad Poor Dad, and they founded The Rich Dad Company. Today the book and the board game are more popular and relevant than ever before.

Robert is the author of 27 books, including two books with Donald Trump, prior to him becoming President of the United States. Robert has been a featured guest with media outlets in every corner of the world. He is the host of the Rich Dad Radio Show podcast, a world-renowned speaker, and life-long student.

Shownotes:

Russia and the invasion of Ukraine

How do we fight back if the majority of the country starts feeling like it’s owed something?

What’s the next step if communism is here?

Robert’s latest book: Capitalist Manifesto

**305: What is Decentralized Finance?** Feb 27, 2022
Distributed ledger technology is revolutionary and creates some problems for the old guard—specifically banks and the traditional financial markets.

The young guns creating all of this technology are really shaking things up. But you can bet that the traditional guys who have been making millions of dollars off the old system aren’t giving up easily.

The old guard also has something else on their side—the financial regulatory system. You see, decentralized finance (AKA DeFi) is very appealing but it’s not always terribly legal.

Case in point, frequently individuals who own cryptocurrency are making swaps for other tokens on these platforms and no one knows about it. In fact, it is virtually impossible for an agency like the IRS to track these trades. And, many people have millions of dollars stashed in this underbelly of the decentralized economy.

I wouldn’t recommend living like that myself. Why? Well, I would just say that it’s best not to bet against regulators and the US government in the long term. You risk going to jail.

Nevertheless, DeFi and related technologies do offer so many advantages to consumers in the way of efficient transactions that are quick and inexpensive. In fact, I would argue that when technology this powerful comes down the pipe, it eventually prevails one way or another.

But, practically speaking, how is that going to look? That’s a good question. We really are in the early days of DeFi and distributed ledger technology in general.

My guest on this week’s Wealth Formula Podcast, Brian Hartzer, comes very much from the traditional financial system holding positions as a top executive at some of the largest banks in the world. Yet, he sees the disruption coming and believes he knows where technology will meet traditional finance and regulators straight on.

It’s a fascinating area to watch evolve as it is happening very quickly. Make sure you tune in to the show!

Brian Hartzer is an experienced executive, leadership mentor and investor who served as CEO of the Westpac Banking Group from 2015 to 2019.

Prior to his time as Westpac’s CEO, Brian spent 15 years in senior executive roles at major banks in Australia and the UK. These roles included CEO at Westpac and divisional chief executive roles at the Royal Bank of Scotland Group and ANZ Banking Group.

He has also served as Chairman of the Australian Banking Association and of the Retail Banking Committee of the British Bankers Association.

Prior to joining ANZ, Brian spent ten years as a financial services strategy consultant at First Manhattan Consulting Group in New York, Melbourne and San Francisco.

Outside of banking, he is a senior advisor to Quantium, a Sydney-based Data Science company, and an investor and leadership mentor to a number of Sydney-based startups. He also serves as Chairman of the Australian Museum Foundation Trust as well as a Trustee of the Australian Museum.

He has previously served as Chairman of Save the Children Australia, Director of the Financial Markets Foundation for Children and Chair of the Business Advisory Committee of the Australian National University.

He graduated with a degree in European History from Princeton University and is a Chartered Financial Analyst.

Brian holds dual US and Australian citizenship and lives in Sydney, Australia.

Shownotes:

Decentralized Finance

What is Beforepay?

The Leadership Star

**304: Will Crypto Kill the New York Stock Exchange?** Feb 20, 2022
Disruptive technology always creates casualties. I still remember a few years ago walking in a city with my oldest daughter who was about five or six at the time. We passed an old phone booth and she asked, “Daddy what’s that?”.

Think of all the technological dinosaurs that have been forgotten in your lifetime. Records and compact discs? Typewriters? The Yellow Pages?

Technological innovation is so powerful that it frequently overwhelms even corporate interests. Kodak was not very successful in blocking the digital camera, was it? In fact, it paid the price for not innovating itself.

Could that happen to the New York Stock exchange and the mighty brokers and custodians that profit from it? Could distributed ledger technology disrupt the equity markets and turn our financial institutions into dinosaurs?

My guest on this week’s episode of Wealth Formula Podcast thinks that some form of re-organization in the way cryptocurrency and equities are held and traded is inevitable and his company is at the forefront of that evolution.

Listen HERE

Mr. Douglas Borthwick is our Chief Business Officer. Mr. Borthwick has over 25 years of experience in the finance industry, most recently founding and building the Chapdelaine FX electronic and voice trading business for inter-dealer broker TP-ICAP from 2012 to September 2018. Mr. Borthwick held various roles with Morgan Stanley from 1996 through 2005; managing foreign exchange derivatives trading groups in New York and London, with a strong focus on emerging markets. He then ran the strategic trading desk at Merrill Lynch from 2005 to 2006, and the Latin American FX trading business at Standard Chartered from 2006 to 2009. In 2010, Mr. Borthwick managed trading and research areas for startup foreign exchange agency, Faros Trading, a company that was later sold to FXCM in 2013. Mr. Borthwick holds a bachelors of science in Economics from Carnegie Mellon University and an MBA from Yale University’s School of Management.

Shownotes:

What is INX?

Will governments crack down on digital currency in the future?

The BNB Coin

Will all assets eventually migrate onto a digital platform?

**303: ALIEN Thinking for Profit** Feb 13, 2022
If you were an alien from another planet visiting who got stuck on earth and had to figure out how to get by you would quickly realize that you would need some money.

This would probably lead you to a job which would not be difficult given your extraordinary intelligence. In fact, it might land you a high-paying technical gig with Google or Facebook.

You might enjoy the work at first but the long hours and stale routine might start getting on your nerves. You might realize that the only eventual way out of the rat race would be to figure out how to put all that extra money from your paycheck to work for you by investing it.

Now here’s the question. If you were an alien from outer space, would your immediate thought be to hire an investment advisor to invest your cash in a balanced portfolio of stocks bonds and mutual funds? Probably not.

As a highly intelligent life form you would quickly realize that this would not be the most efficient way to grow your wealth. Unadulterated by conventional wisdom, your attention would likely target tax advantaged real estate and other sources of income.

The point I’m making here is that it might not be a bad idea to question conventional wisdom once in a while. Unfortunately, conventional wisdom is often tainted by special interests or, sometimes, just plain wrong (ie. The world is not flat).

Approaching personal finance, entrepreneurship and even the way you live your life with a fresh perspective every day without fear of violating societal norms is a very healthy and potentially lucrative way to live. Take it from a guy who left a high-paying surgical gig to become an entrepreneur.

In fact, my guest on Wealth Formula Podcast this week believes that a fresh look at your surroundings might even turn you into a flaming entrepreneur. Listen to what he has to say in this week’s Wealth Formula Podcast!

Michael Wade helps individuals and organizations respond to the opportunities and threats of digital disruption.
Michael Wade is a Professor of Innovation and Strategy at IMD and directs IMD’s Global Center for Digital Business Transformation. He has published works on topics such as digital business transformation, innovation, strategy, and digital leadership, including ten books and more than a hundred case studies and articles. Michael has been named one of the top ten digital thought leaders in Switzerland several times, most recently in 2020, and appears frequently in mainstream media.

He obtained Honours BA, MBA and PhD degrees from the Richard Ivey School of Business, University of Western Ontario, Canada. Previously, Michael was the Academic Director of the Kellogg-Schulich Executive MBA Program and has been nominated for teaching awards in MBA, International MBA, and Executive MBA programs.

At IMD, Michael directs a number of executive programs related to digital transformation, including Digital Execution, Digital Transformation for Boards, and Digital Disruption. He also founded and directs Europe’s first and largest program for executives on digital, Leading Digital Business Transformation. Michael also directs several custom programs related to strategy and digital business transformation for hundreds of organizations. He provides consulting services, executive education, and expert evaluations to several public and private sector organizations on strategy and digital transformation and sits on a number of corporate boards as an advisor on digitization and business model disruption.

Since early 2021, Michael has been working on his new podcast Management under the Microscope where he unpacks business myths through conversations with various experts and business professionals.

Shownotes:

Is entrepreneurship a learned behavior?

How does an entrepreneur recognize new opportunities?

Frear of Failure

ALIEN Thinking: The Unconventional Path to Breakthrough Ideas

**302: The Next Crypto Revolution?** Feb 06, 2022
I still remember listening to the Peter Schiff podcast seven years ago when I lived in Chicago. I was at the tail end of my *Austrian Economic phase* and so I believed in everything Peter had to say.

One day I was sitting there at my computer listening to him make fun of something called bitcoin which was making some waves at the time. The way he made it sound made bitcoin seem like a completely ridiculous concept. So, I didn’t take it seriously. Even when I heard others speak of it favorably, I just ignored them as financially unsophisticated. By 2017 I figure out that I was the one who didn’t have a clue.

Now don’t get me wrong, I think Peter Schiff is a very smart guy and I don’t blame him for sticking to his guns on something he truly believes. Peter still thinks bitcoin is going to zero! The mistake made was mine. There was a buzz about this bitcoin thing that was selling for about $300 (now $37,000). I just didn’t take the time to learn about it.

In fact, if I had been more open to it, I would have noticed that a lot of very smart people were making calculated bets in this area. But I wasn’t paying attention. That was a mistake.

Now, I’ve made mistakes as an investor before and I will again. But I won’t let a mistake go by without taking a lesson or two away from it. One of those lessons is simple: pay attention when people get excited about stuff and when there is a buzz about something new.

Right now, that buzz is about non-fungible tokens (NFTs). This is an area related to distributed ledgers and cryptocurrency. Many are calling the NFT and metaverse technology the next horizon in cryptocurrency and it really is in its infancy.

If you don’t get it. You aren’t alone. This is an unusual area that is somewhat difficult to understand for some of us. But that’s the reason you should be paying attention. After all, for those of you now sold on bitcoin, there was a time when you didn’t understand it either.

There is real potential here to make money. I’m certainly no expert in the field so I found one who could explain what this world is all about on this week’s episode of Wealth Formula Podcast. Listen HERE

As someone who has founded, built, managed and sold a successful internet company, Matt Fortnow has been in the tech startup trenches. In 1996, he co-founded Commissioner.com, the internet’s first fantasy sports service. In 1999, he and his partners sold the company to CBS SportsLine (currently CBS Sports), which still runs their products today. Previously, as an entertainment lawyer, Matt co-authored the 7th Edition of This Business of Music, the bible of the music industry. He’s represented a variety of musical artists, songwriters, producers and record labels, appeared as a regular featured copyright expert on TV and lectured internationally. Since the sale of Commissioner.com, Matt has been consulting entrepreneurs and been involved in various startups as an investor or advisor. Six years ago he dove into the world of blockchain and has become increasingly enamored by digital art and non-fungible tokens, creating the official NFTs for iconic brands such as The Three Stooges.

Shownotes:

What are NFTs?

What is Metaverse and how popular is it already?

The different protocols NFTs are built on

Does NFT trading have any negative impact on traditional collectible markets?

301: Ask Buck? 1/29/22 Jan 30, 2022

People listening to the show for the first time often feel a little overwhelmed by the basic terminology and concepts that we use as the basis of our conversations. We throw words like bonus depreciation and cost segregation analysis around like everyone knows what we are talking about.

The Ask Buck shows that we have a great place to build the framework for understanding the Wealth Formula alternative personal investing ethos. This week is no different as we continue to talk about depreciation, tax mitigation strategies, NFTs and more.

Do me a favor though. If you haven’t listened to last week’s podcast, start with that one. This week’s episode assumes some knowledge that we went into pretty deeply during last week’s episode #300.

Also, if you like these kinds of discussions, you might be interested in Wealth Formula Network—our private community. Go to WealthformulaRoadmap.com to sign up. In short, this page is where you go in order to sign up for our course. But the course just provides a foundation to maximize our discussions which happen over our Facebook page and over our biweekly live Zoom conference calls.

If you want to get deeper into this personal finance stuff and your spouse and friends have no interest in it, this is the perfect outlet for you!

In the meantime, listen to this week’s episode of Ask Buck HERE.

Episode 300! ASK BUCK! Jan 23, 2022

This week’s show marks the 300th episode of the Wealth Formula Podcast. That means about six years’ worth of shows. Wow! How did that happen?

What started out as a little time to speak to myself (I had no listeners) has become a show with well over a million downloads and an extraordinary community.

When I reflect over the last six years, I’m really encouraged. I see the incredible progress that I have made professionally within the financial space and I see how much smarter I have gotten.

I am even more impressed with how powerful this brand has become and the community that we have built together. It’s really amazing. I’m so excited about the years to come. Thank you for being a part of Wealth Formula Nation!

So, in honor of the 300th episode, I am doing a special ASK BUCK show this week. We’ll even ask my daughters some questions!

Make sure to listen HERE!

**299: The Lords of Easy Money** Jan 16, 2022
Why is it that the rich get richer? Well, for one thing, they have money to invest. Think of how many people out there live paycheck to paycheck. Meanwhile, people with money like you and me are able to invest our money and get it working for us.

Remember the mathematical Wealth Formula?

**Wealth=Leverage(MassXVelocity)**

Velocity is the rate that you get your invested capital back in your pocket to redeploy. Leverage is good debt. These variables are critical to the Wealth Formula but meaningless without Mass: the amount of money you actually invest.

If you are able to invest 90 percent of your income, you’re going to grow your money a lot faster than if you can invest only 10 percent of it. You get the idea.

These days, there are variables beyond the Wealth Formula that are helping the investor class to pull away from the pack. The Federal Reserve Bank is fueling the growth in value of those assets in which we invest whether it be equities or real estate. Easy money is rewarding those of us who invest our money by giving those assets a higher price.

And of course as real estate investors, we are not only benefiting from the growth in asset prices, but we are also benefitting from inflation that washes away the value of our mortgage debt. If you have a million dollar mortgage and inflation is 6 percent per year, the value of what you owe is decreasing by 6 percent per year as well. Not a bad deal for us, right?

But now the Fed is getting a little nervous because inflation is pretty darn high and they don’t want to let it get out of control. Hopefully the eventual improvement in the post covid supply chain will make the supply side more favorable and bring inflation down itself.

If not, the Fed will have to figure out how to get itself out of the mess. My guest on Wealth Formula Podcast this week explains how this mess was created in the first place by the Federal Reserve over the past decade or so and what it can potentially do to reverse it.

LISTEN HERE!

Christopher Leonard is a business reporter whose work has appeared in The Washington Post, The Wall Street Journal, Fortune, and Bloomberg Businessweek. He is the author of The Lords of Easy Money, The Meat Racket and Kochland, which won the J. Anthony Lukas Work-in-Progress Award.

Shownotes:

How does the Fed escape the money-printing quagmire that it is currently stuck in?

Is there a way to soften the economic impact as the Fed pivots away from money-printing?

The Lords of Easy Money

How does Fed policy result in income inequality?

**298: Is PRIVATE Debt the Real Danger?** Jan 09, 2022
Okay—let’s talk about debt. I bet at some point in your life, someone has told you that you need to pay it all off. On TV, you see the likes of Suze Orman and Dave Ramsey telling you that you have to get rid of it before anything else.

They aren’t entirely wrong. They are just talking to the masses. The masses aren’t a group of sophisticated real estate investors like you, who are distinguishing between different kinds of debt.

Robert Kiyosaki famously made this distinction between good debt and bad debt in his writings. He said that good debt is business debt that helps you grow an asset and puts money in your pocket. Bad debt takes money out of your wallet.

A mortgage on a cash flowing asset would therefore be considered good debt. Credit card debt to buy a television would be bad debt. Pretty simple right?

But what about a mortgage on a personal residence? That’s where it gets a little tricky. A mortgage on a personal residence isn’t putting any money in your pocket is it? On the other hand, paying off your mortgage and having all that money in your house makes it essentially dead money and a target of creditors. It’s not as cut and dry is it?

At any rate, what we do know is that personal debt is skyrocketing right now and it is something that tends to be over-shadowed by the behemoth national debt problem.

My guest on this week’s podcast, Richard Vague, believes that the real focus should be on personal debt that is now over 160 percent of GDP in the United States—a growing burden that threatens economic calamity if not mitigated in the coming years.

LISTEN HERE

As the author of A Brief History of Doom (2019) and The Next Economic Disaster (2014), Richard Vague established himself as a clear and independent voice in the ongoing conversation about the role of private sector debt in the global economy. His Illustrated Business History of the United States offers a more general audience a clear-eyed view of 250 years of wealth creation and the people and personalities who drove that growth — and hold it today. And now, Richard’s new book, The Case for a Debt Jubilee, offers a compelling case and policy recommendations for new forms of consumer debt relief. Following a career that has spanned fields as varied as banking and energy, credit, and the arts, Richard has served since 2020 as Secretary of Banking and Securities for the Commonwealth of Pennsylvania.

Richard also serves on the University of Pennsylvania Board of Trustees and the Penn Medicine Board of Trustees, and on a number of business boards. He is chair of FringeArts Philadelphia, chair of the University of Pennsylvania Press, and chair of the Innovation Advisory Board of the Abramson Cancer Center. He also serves on the Governing Board of the Institute for New Economic Thinking.

Vague is the founder of the economic data service Tychos (tychosgroup.org) and the email newsletter service Delanceyplace.com, which focuses on nonfiction literature.

Shownotes:

Have savings rates have actually gone up?

The breakdown of private debt

What kind of warnings are we looking at to say that we’ve got an economic calamity?

With the next level intervention from the fed and from the government, have the rules of the economic game have changed?

**297: Another Look at the Real Estate Market with Jorge Newbery** Jan 02, 2022
Happy New Year! I don’t know about you, but I am looking forward to another profitable year in the roaring 20s. If you have been investing in real estate for the last several years, you are obviously doing very well.

The big question on everyone’s mind seems to be whether or not the market is too hot to continue investing. There is no one right answer to this. In fact, when we talk about the “real estate market”, we aren’t even talking about one market.

Real Estate investing takes many forms. Investing in single-family homes in Oklahoma is quite different than investing in apartment buildings in Dallas. And neither of these is anything like investing in non-performing notes.

Each sub-sector of real estate is quite different. And, when market cycles change, they react differently. Some have more exposure to recessionary environments. For example, if you are investing in re-performing notes, that’s pretty risky for an economy that you think might go south. Most recessions are not catastrophic and do not necessarily hurt more stable assets nearly as much.

As I’ve said to you before, my real estate strategy is not changing in 2022. First of all, I do believe we have a few years of significant runway for profit in this decade. Next, we have significant inflation which makes the risk of *not* investing very high. And finally, the investments we are making in strong markets in apartment buildings have been traditionally more resilient than other real estate classes.

That being said, there are other opinions out there and you need to make your own decisions. Often those opinions are based on what the specifics of the individuals investing strategy are.

Jorge Newbery, for example, has made a career out of investing in pools of non-performing notes. The major strategy he has used over the years involves negotiating with people who have defaulted to create re-performing notes. These can also be sold off for a profit if successful.

But, as you can imagine, if someone has defaulted on a note once, then the risk of doing it again will probably be higher. Anyway, the point I’m trying to make is that the approach each investor makes should be based on the specifics of their business model.

As you will see in this week’s interview with Jorge Newbery, he’s doing what he can for risk mitigation in uncertain times.

Make sure to tune in to get Jorge’s perspective on what’s going on today with real estate. LISTEN HERE.

Jorge P. Newbery Is On A Mission To Help Americans Crushed By Unaffordable Debts.

He is the Founder and CEO of Debt Cleanse Group Legal Services, a nationwide legal plan to help consumers and small businesses get out of debt without filing bankruptcy. He is also Chairman of American Homeowner Preservation LLC and AHP Servicing LLC, which crowdfund the purchase of nonperforming mortgages from banks at big discounts, then share the discounts with struggling homeowners. He is also a non-attorney Partner in Activist Legal LLP, a law firm in Washington, D.C.

A 2004 natural disaster triggered the financial collapse of Newbery’s former business, leaving him with $26 million in debts he could not pay. Newbery rebuilt himself through AHP, sharing what he learned from his challenges to help families at risk of foreclosure stay in their homes. In 2018, he founded Debt Cleanse Group Legal Services to assist consumers and small business owners settle all types of debts at big discounts – and not pay some at all, He is also a Board Member of the Group Legal Services Association.

He authored Burn Zones: Playing Life’s Bad Hands; Debt Cleanse: How To Settle Your Unaffordable Debts For Pennies On The Dollar (And Not Pay Some At All); and Stories of the Indebted.

Shownotes:

The history of American Homeowner Preservation

How has the pandemic affected AHP and the housing market?

AHP Title and its strategy

ahptitle.com

**296: Investor Cybersecurity 101** Dec 26, 2021
Technology is great but the burdens of technology are significant. Think of all your accounts and all your passwords. You may have cryptocurrency and might be trading on cryptic DeFi platforms. What if something happened to you today? How much of your money would be a giant mess to the family you left behind? There’s a New Year’s resolution for you. Make sure your house is in order!

Meanwhile, while we want to make sure we don’t lock our loved ones out of the things we want them to have when we are gone, we need to be vigilant in keeping hackers from taking our money and data now!

Most people are way too *laissez-faire* about cybersecurity thinking that it will never happen to them. But this year alone, I know two people within our Wealth Formula Community that had major identity theft that left them in a world of hurt for some time.

The good news is that with a few basic steps, we can avoid the vast majority of cyberattacks on us as individuals. And, while I know it’s not the sexiest topic, this week’s podcast will give you the basics of what you need to know.

Now, it is the holidays and I want to make sure you get some additional entertainment, so I will also answer a few questions from you at the end of this week’s episode of Wealth Formula Podcast! Listen HERE!

Rob Embers is the Head of US Cyber Services at ITC Secure which is a cyber security company

Shownotes:

How do you protect yourself online?

What is Ransomware?

Rob talks about ITC Secure

Buck answers some of your questions

**295: The 900 Pound Gorilla in the US Economy** Dec 19, 2021
Inflation is running at about 6-7 percent right now. That is significant. In fact, we haven’t seen those numbers in about 4 decades.

On this week’s show, we will talk to an economist to explain what this means at the macro level and what may potentially be the long-term outcome.

I’m not an economist. I am a professional investor and the way I see things right now is at that level. Let me tell you that, if you are investing in real estate with leverage, inflation is not really a bad thing.

What is inflation in the first place? It means that the value of the dollar is going down. It has less buying power.

And for those of you who are afraid to invest in this kind of environment let me emphasize that, if inflation is running at 6-7 percent per year and you are in cash, you have essentially guaranteed losing 6-7 percent per year by sitting on the sidelines.

On the other hand, if you are investing in leveraged real estate, the debt on those assets is also losing value. In other words, inflation rewards debtors by making that debt worth less.

Think about that for a moment as it is critically important to understanding how leveraged real estate is such a tremendous hedge against inflation in the right hands. You’re raising rents to keep up with inflation and the money you owe is diminishing in value. What a great deal!

Obviously, there are other implications to inflation that may not be such a good thing. And if inflation gets too out of control, there are other ramifications as well. However, most experts don’t seem to think double digit inflation is likely. So, without sounding flippant, let me say to all of you real estate investors: enjoy the ride!

Now back to the macro level, this week’s podcast features an interview with a brilliant professor of economics, Dr. John Horn, to talk about inflation from a different, more global perspective.

Understanding this stuff is really important so I urge you to listen to this podcast and figure out what you are going to do with all of this inflation!

John was a Senior Expert in the Strategy Practice of McKinsey & Company, based out of the Washington, DC, office, before joining Olin. He spent most of his 9 years there working with clients on competitive strategy, war gaming workshops and corporate and business unit strategy across a variety of industries and geographies. John helped over 100 clients with war game workshops and developed a set of simulation exercises to help companies understand the challenges of reallocating resources. He was also an adjunct professor at the Robert H. Smith School of Business at the University of Maryland. Prior to joining McKinsey, John assisted major U.S. financial institutions with fair lending compliance as a consultant with Ernst & Young LLP. He also worked as an economic consultant with The Brattle Group, specializing in economic expert testimony in litigation support, including anti-trust and patent infringement cases.

Shownotes:

Wow will the pandemic affect our economy moving forward?

Is Inflation actually good for us?

Inflation as a self-fulfilling prophecy

How would Inflation affect you as an individual investor?

**294: Navigating the BOOM/BUST Cycle with Murray Sabrin** Dec 12, 2021
A number of people told me that they really enjoyed last week’s podcast interview with William Green, who spoke about what we can learn from the greatest investors of all time.

One line that still haunts me is Sir John Templeton saying that the four most dangerous words for an investor are “This time it’s different”. Why does it haunt me?

Listen, the economy is in a massive boom right now. There is no doubt about that. Should you invest in a booming economy?

What is the alternative? Right now inflation is running at about 6 percent. That means doing nothing guarantees that your money is losing 6 percent per year. As Robert Kiyosaki says, “Savers are losers.”

Nevertheless, it is important for you to think about what is happening and what you should do with your own money. To do that, you really need a framework.

Macroeconomics does provide us a type of framework that shows how business cycles work and how they affect the investor. However, we must also understand that historical macroeconomic data is not necessarily predictive in the new world order of easy money and pandemics.

I am not here to give you financial advice but I will urge you not to act out of fear. Just look around to see how many dooms layers have been sitting on the sidelines for 5-6 years now and how much money they have lost by doing nothing.

So what am I doing differently in this economy? Personally, I’m not doing much differently at all. I continue to invest in high quality real estate through our Investor Club that is already cash flowing, but has significant value-add elements to create equity.

My reasoning is that, in doing so, with the wind at my back I might average 35-40 percent annualized returns or better like I have been lately. But even if things tighten up, my assets are of high quality and are very likely to whether the storm better than most other investments.

But again, that’s my philosophy. To create your own, learn as much as you can and think for yourself. This week’s interview with retired Professor and former libertarian senate candidate, Murray Sabrin, would be a great start to educating yourself on the business cycle.

Listen HERE

Murray Sabrin arrived in America from West Germany with his parents and older brother on August 6, 1949. His parents were the only members of their respective families to survive the Holocaust.

In 1959 at age 12, Sabrin became a U.S. citizen and graduated from the Bronx High School of Science in 1964. He has a B.A. in history, geography and social studies education from Hunter College, an M.A. in social studies education from Lehman College and a Ph.D. in economic geography from Rutgers University.

Dr. Sabrin joined the faculty of Ramapo College of New Jersey in 1985 and retired on July 1, 2020, where he was Professor of Finance in the Anisfield School of Business. He taught Financial History of the US among other courses. In 2007 he and his wife, Florence, made a $250,000 gift to Ramapo College to establish the Sabrin Center for Free Enterprise in the Anisfield School of Business (www.ramapo.edu/sabrincenter). In January 2021, the Board of Trustees awarded Dr. Sabrin Emeritus status for his scholarly contributions during his 35-year career at Ramapo College.

Sabrin is the author of *Tax Free 2000: The Rebirth of American Liberty,* a blueprint on how to create a tax-free America in the 21^st century, and *Why the Federal Reserve Sucks: It Causes, Inflation, Recessions, Bubbles and Enriches the One Percent,* which is available on Amazon. His two latest books were published in 2021, *Universal Medical Care from Conception to End of Life: The Case for a Single-Payer System.* The single payer system, in Sabrin’s proposal, is the individual or family, not the government. Sabrin’s other book, *Navigating the Boom/Bust Cycle: An Entrepreneur’s Survival Guide*, was published last October.

In 1997 Sabrin was the New Jersey Libertarian Party’s nominee for governor and made political history, when he raised sufficient funds to participate in the state’s matching funds program, which required him to participate in three debates with the two major party candidates. He also has sought the Republican nomination for the U.S. Senate in the Garden State.

Shownotes:

What is the Yield Curve Inversion?

What kind of signals should we be looking for that might suggest a change in the business cycle?

How have some of the economic rules have changed recently

Dr. Sabrin’s book Navigating the Boom/Bust Cycle: An Entrepreneur’s Survival Guide

**293: Lessons Learned from the Greatest Investors in History with William Green!** Dec 05, 2021
Asset prices are booming. We have more than doubled price per door costs on acquisitions made in some markets just two years ago. That’s just what our investor club has seen in real estate.

To look at rising asset prices on steroids, just look to the crypto markets. A guy who works out at the place I work out bought $400K of gala token under 1 cent and is now sitting on a couple hundred million bucks.

When you see that kind of stuff, it’s hard not to get FOMO. To be clear, I still truly believe we have significant runway in real estate given the level of inflation we have seen and pure supply and demand issues in the markets we invest in.

However, as a general rule, it is wise to remember Sir John Templeton’s four most dangerous words in the investment world, “This time it’s different”.

On this point, I go back to cryptocurrency as it seems to teach lessons at a pace magnitudes faster than other markets. In the winter of 2017, it looked like anyone could get rich on crypto and you would be foolish not to buy. Later that year, we were deep in crypto winter. As we have seen, however, the reports of cryptocurrency’s death was, as at one time Mark Twain’s death was, greatly exaggerated.

When people should have been buying like crazy, they were scared away thinking this was the final knockout punch to bitcoin (which had been served several knockout punches already).

Now, at the top of the crypto market or possibly somewhere near, I hear myself once again telling myself that this time, it might be different. It may be a runaway train.

I’m not saying I have the answers to what happens next. However, I do think it is critically important to examine the thoughts you have on a daily basis with regard to investing. This is personal finance. You shouldn’t be listening to me or anyone else to tell you what you should do.

You should be listening to us to help you make sure that you are thinking. You want to have lots of opinions to consider. And, it is particularly helpful to hear the voices of those individuals that have extraordinary success in this arena.

William Green is a financial author that has spent most of his life talking to and writing about the greatest investors of our lifetimes and has written a book about what he’s learned from that process.

And this week, he was kind enough to join me for an interview on Wealth Formula Podcast to share some of that wisdom.

DO NOT MISS THIS EPISODE!!!

William Green is the author of Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life (Scribner/Simon & Schuster, April 2021).

Over the last quarter of a century, he has interviewed many of the world’s best investors, exploring in depth the question of what qualities and insights enable them to achieve enduring success. He’s written extensively about investing for many publications and has been interviewed about the greatest investors for magazines, newspapers, podcasts, radio, and television. He has also given many talks about the lessons we can learn from the most successful investors, not only about how to invest but about how to improve our thinking.

Green has written for many leading publications in the US and Europe, including The New Yorker, Time, Fortune, Forbes, Barron’s, Fast Company, Money, Worth, Bloomberg Markets, The Los Angeles Times, The Boston Globe Magazine, The New York Observer, The (London) Spectator, The (London) Independent Magazine, and The Economist. He has reported in places as diverse as China, India, Japan, the Philippines, Bangladesh, Saudi Arabia, South Africa, the US, Mexico, England, France, Monaco, Poland, Italy, and Russia. He has interviewed presidents and prime ministers, inventors, criminals, prize-winning authors, the CEOs of some of the world’s largest companies, and countless billionaires.

While living in London, Green edited the European, Middle Eastern, and African editions of Time. Before that, he lived in Hong Kong, where he edited the Asian edition of Time during a period in which it won many awards.

Green has collaborated on several books as a ghostwriter, co-author, or editor. One of them became a #1 New York Times and #1 Wall Street Journal bestseller in 2017. He also worked closely with a renowned hedge fund manager, Guy Spier, helping him to write his much-praised 2014 memoir, The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, and Enlightenment. Green also wrote and edited The Great Minds of Investing, which features short profiles of 33 renowned investors, along with stunning portraits created by Michael O’Brien, one of America’s preeminent photographers.

Born and raised in London, Green was educated at Eton College, studied English literature at Oxford University, and received a Master’s degree from Columbia University’s Graduate School of Journalism. He lives in New York with his wife, Lauren, and their children, Henry and Madeleine.

Shownotes:

Some examples of how successful people created their own success

Are there any parallels between successful investors and happiness?

Is it possible to clone the ways of successful people?

The investing principles of successful individuals

**292: Dave Liu on Using Psychology to Hack Life for Success and Wealth** Nov 28, 2021
When you are trying to figure out how to become more successful in life, don’t try to re-recreate the wheel. Success stories aren’t all the same, but they often rhyme.

My first two successful businesses were nothing other than me ripping off other successful business models and giving them a twist of my own. I knew the concepts already worked in other markets and there was, in my view, no reason why they wouldn’t work in mine. I was right.

I now live in a place surrounded by entrepreneurs like me. What I discovered was that I wasn’t the only one who took a former employment situation to learn a trade and turn it into a profitable business. MOST successful entrepreneurs that I know did exactly that.

And guess what? When a young person asks me how to become an entrepreneur, I tell them to take some jobs at businesses they think are interesting and learn everything they can. Never see a job as just a paycheck. It’s a chance to learn skill sets and perhaps even an entire business model that you can take for yourself and set up shop.

No one told me to do that. I just got lucky and discovered this path the way many others did: by accident. But if someone did give me this advice, I might have done things a little differently. Maybe I would have taken a job in private equity as a young man instead of practicing medicine. Who knows? But at least I would have approached life a little differently.

The larger point I’m trying to make here is that finding successful people, especially those that are willing to share their experience, is gold. Sometimes you hear them say things that are so simple but fundamentally change the trajectory of your life.

Books and podcasts make finding these people pretty easy these days. Sure you can’t ask them questions but there is plenty of life-changing content out there. I’ve talked many times about the paradigm shift I had after reading Robert Kiyosaki’s Cash Flow Quadrant—an experience I call “taking the purple pill”.

Dave Liu is one of those guys worth listening to. He is a highly successful guy who made it as both an employee on Wall Street and as an investor. This week’s episode of Wealth Formula Podcast is jam-packed with nuggets to help you succeed at your job, as an entrepreneur and as an investor.

Don’t miss it. LISTEN HERE!

Dave is a 30-Year Veteran of Wall Street and Silicon Valley. He’s an entrepreneur who has started multiple companies, advisor who has raised over $15 billion for hundreds of companies, and investor in multiple billion dollar exits. He is passionate about advancing new ideas in technology and entertainment, and supporting philanthropic causes for disadvantaged groups. He’s a creator who enjoys writing books and drawing cartoons. He invites you to reach out.

Shownotes:

How to determine what companies would do if approached with an opportunity

What are the opportunities to consider in the post-pandemic era?

How do you invest in everything and get exposure to everything?

The Way of the Wall Street Warrior

**291: A Shot to Save the World: The Story Behind the Covid Vaccine!** Nov 21, 2021
It’s been 2 years since Covid-19 first became the major global topic. I must admit, if you told me back then that we’d still be wearing masks and living our lives with Covid-19 precautions every day, I would have never believed you.

So much about this period in time is extraordinary. It’s hard to really appreciate that as we continue to live in the moment while this chapter in history continues to unfold.

We continue to see new variants pop up, we see ongoing restrictions to everyday life, and we are starting to see the economic impact of unprecedented monetary and fiscal stimulus including inflation rates not seen in over three decades.

Eventually the events during these years will take up a lot of chapters in a lot of history books. And through the lens of history we will decide what we did right and what we should have done differently. Certainly, there were many mistakes made along the way but we also had a lot of successes.

One of the most underappreciated accomplishments throughout this period was the extraordinarily fast development of an effective vaccine through the combined efforts of the public and private sectors.

New York Times bestselling author, Gregory Zuckerman, provides an inside story of this miraculous success in his new book *A Shot to Save the World*. I had a chance to interview him about the book for this week’s episode of Wealth Formula Podcast. Don’t miss it!

Gregory Zuckerman is a Special Writer at The Wall Street Journal. He is an investigative reporter who writes about various investing and business topics.

Greg is the author of A Shot to Save the World: A Shot to Save the World: The Inside Story of the Life-or-Death Race for a COVID-19 Vaccine, published by PenguinRandomHouse’s Portfolio division October 2021.

Greg is also the author of The Man Who Solved the Market: How Jim Simons Launched a Quant Revolution, a New York Times and Wall Street Journal bestseller. The book, which is being translated into 17 languages, was shortlisted by the Financial Times/McKinsey and the Society for Advancing Business Editing and Writing as one of the best business books of 2019.

Greg also is the author of The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters, a national bestseller published October 2014 that describes how several unlikely individuals created an American energy renaissance that has brought OPEC to its knees. The Frackers was named among 2014’s best books by The Financial Times and Forbes Magazine. Previously, Greg wrote The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History, a New York Times and Wall Street Journal best seller published December 2010.

Greg and his two sons wrote Rising Above: How 11 Athletes Overcame Challenges in their Youth to Become Stars and Rising Above-Inspiring Women in Sports, books that are aimed at inspiring young readers with stories of how stars in various sports overcame imposing setbacks in their youth. The books were chosen by Scholastic Teacher magazine as top picks in 2016 and 2017.

Greg is a three-time winner of the Gerald Loeb award, the highest honor in business journalism. He won the Loeb Award in 2015 for a series of stories revealing discord between Bill Gross, founder of bond powerhouse Pimco, and others at the firm, stories that led to his departure. In 2012, Greg broke news about huge, disastrous trades by the J.P. Morgan trader nicknamed the “London Whale,” trades that resulted in $6.2 billion losses for the bank.

Greg appears regularly on CNBC, Fox Business and other networks and he makes appearances on radio stations around the globe.

Greg joined the Journal in 1996 after writing about media companies for the New York Post. He graduated from Brandeis University in 1988. Greg lives with his wife and two sons in West Orange, N.J., where they enjoy the New York Yankees in the summer, root for the Giants in the fall, and reminisce about Linsanity in the winter.

Shownotes:

The incredible success story of Moderna

What is Operation Warp Speed?

Why use mRNA for vaccines?

The Moderna vaccine patent issue

What lessons can we learn from the way we dealt with the current Covid crisis?

**290: What are the 7 Deadly Economic Sins?** Nov 14, 2021
At the core of every individual’s subconscious there is a wealth thermostat. What sets the temperature is a combination of nature and nurture. Once it’s set, it’s difficult to change it. But if you know you have a thermostat, it’s a lot easier to change your mindset.

What do I mean by this? Well, think about yourself for a moment. Are you $200K/year type? $500K or a million/year type? Now, try to imagine yourself with either one more or one less zero behind your yearly income. Does that fit with your image of yourself? I’m sure it doesn’t.

If you are a $500K/year type, it’s good that you don’t see yourself as a $50K type because it’s what keeps you from becoming that person again (not that it’s a bad thing). But that limited image of yourself is also what will keep you from becoming a $5 million/year person.

I know this sounds like a lot of psychobabble but I truly believe it. The money thermostat exists. I have recognized it in myself and manipulated it several times in my life already.

Now the question is why we would limit ourselves to a certain amount of money. Certainly you can understand not wanting to be poor, but why would you create mental blocks from becoming a great deal wealthier than you are?

Well, maybe part of you doesn’t want to be rich. Maybe you grew up believing that rich people only got there because they took advantage of the poor. Maybe you believe that there is a finite amount of wealth out there and to take more than your share is greedy.

After all, we live in a Judeo-Christian society. The Bible says that money is the root of all evil. What was once considered “usury”, arguably is the basis of our economy now!

Our cultural baggage on money is deep and would require years of national therapy to unravel. But its effects are not hard to see in the modern, guilt-laden financial politics of progressive left today.

The truth is that money is a tool and a fool with a tool…is still a fool. But it can also do so much good. It can take away hunger and alleviate pain. It can and has raised the standard of living for the entire world.

Wealth is not bad. Wealth is a gift to us created by capitalism. All you need to corroborate that statement is to look at world history through the lens of economics.

Yet, politicians cannot escape what my guest on this week’s Wealth Formula Podcast, James Otteson, calls the 7 Deadly Economic Sins, that continue to mislead people and misdirect policy.

Make sure to tune in to this week’s show to make sure you don’t fall into these mental traps!

James R. Otteson is the John T. Ryan Jr. Professor of Business Ethics in the Mendoza College of Business at the University of Notre Dame. He received his BA from Notre Dame and a PhD from the University of Chicago, and has taught at Wake Forest University, Yeshiva University, NYU, Georgetown, and the University of Alabama. His published work focuses on Adam Smith, eighteenth-century moral and political thought, liberalism, political economy, and business ethics.

Shownotes:

Dr. Otteson’s book Seven Deadly Economic Sins: Obstacles to Prosperity and Happiness Every Citizen Should Know

Is capitalism is a zero-sum game?

Would society be better if we punish the rich?

The wave of cultural stigma against being rich

HNW Charitable Strategies that are PROFITABLE Nov 13, 2021

Last week I did an emergency podcast to make sure everyone is aware of an upcoming change related to the whole life policies we use inside of Wealth Formula Banking. It all revolves around recent changes made to IRC Section 7702, with is the IRS code that dictates how life insurance policies are taxed.

Since the 1980’s, the code mandated insurance companies who offer whole life to offer a 4% guaranteed interest rate on the cash value. Well, as you know, interest rates have come a long way since then. In essence, the change allows the insurance companies to choose the minimum rate they’ll offer on their products, putting it somewhere between 2.0–3.75%. The companies who have already released their new product have come in at a 3% guarantee.

To be clear, anyone who has one of these policies will continue to get your 4%. And, it isn’t as if the total return in these policies will all of a sudden drop dramatically. The change really only impacts things if the total return including the dividend, which is currently between 5–6%, drops to a level where we start bumping into the guaranteed rates.

With that being said, if you are someone who is planning on or even considering using Wealth Formula Banking to increase investment profits and would like to lock in the 4% guarantee, you’ll want to get the process started ASAP in order to make sure we hit the end-of-year deadline. The underwriting process typically takes 4–6 weeks to complete, and we expect to see a large surge of new business as we get closer to the deadline of January 1, so the sooner we act, the better chance we have of getting it done before the deadline!

If you’d like to review this option for yourself, send a message to rod@wealthformulabanking.com to discuss and decide the best course of action.

Now, in the spirit of Life Insurance Related Strategies, I am releasing a bonus podcast shortly about charitable strategies that involve life insurance. The interesting thing about these strategies, as you will see, is that they are win-win-win propositions. And for the high net worth individuals who can implement them can end up giving a ton of money but receiving even more.

It’s real and it’s perfectly legal. Listen to the podcast HERE.

**289: Is Bitcoin the Next Layer of Money?** Nov 07, 2021
I began talking about cryptocurrency on Wealth Formula Podcast in 2017. Many joined the crypto world after that and have made a significant amount of money. If you are one of those people…you’re welcome!

Those who stayed on the sidelines often felt, for good reason, that cryptocurrency was just a big digital fad and that it would probably die out like tulips of the past.

Well, there was a deep frost that did kill many projects between then and now, but one thing is now very clear. Cryptocurrency is here to stay.

Now learning about cryptocurrency is a little challenging because, in my humble opinion, it is actually more than one thing.

Let me summarize how I see the *cryptosphere* today. There is bitcoin which has established itself, even at the level of governments, as a digital asset with intrinsic value—a type of digital gold. Then, there are cryptocurrencies that are not bitcoin. These are known as alternative coins or *altcoins*.

To me, each of these altcoin projects are essentially a tech start-up. Bitcoin purists like calling altcoins “shit coins” and promise that they will all eventually fade away. I don’t personally believe that prophecy.

Let’s riff off of this idea that each altcoin is a tech start-up. Back in the dot com era there were companies like Amazon, Google and Apple that became legends in the tech sector. There were also companies like pets.com that went belly up in flames.

That’s what I think is going to happen with the alt space in cryptocurrency. Most of these tokens will be losers but there will be a handful of projects that will become household names or will simply become part of the fabric of daily life.

Today, you certainly see that some are less risky than others. Ethereum is a pretty safe bet to be in that future successful crew. It’s likely to be worth a lot more in 10 years than it is today. As far as crypto goes, this would be a blue-chip stock. Others will be more risky bets, but the gains could dwarf those that will be seen by Ethereum investors.

You could go down the line and make an argument about a number of decentralized protocols, a potential long-term success or failure. I look at them the same way I would look at startup companies and invest in them with my asymmetric portfolio accordingly.

But getting back to bitcoin—it’s totally different from the alts. Bitcoin is not a tech company. Bitcoin’s closest comparison in today’s financial world is gold. And as Wall Street and various governments start to adopt bitcoin, you can see it make its way into the future of money.

Nik Bhatia sees this economic history unfolding in real-time and will explain it to all of us in this week’s episode of Wealth Formula Podcast. Listen HERE.

Nik Bhatia is a financial researcher, CFA charterholder, and adjunct professor of finance and business economics at the University of Southern California Marshall School of Business where he teaches Applied Finance in Fixed Income Securities. Previously, Nik worked the US Treasuries trading desk for a large institutional asset manager and has extensive trading experience in money markets and interest rate futures. After starting his teaching career, Nik felt the urge to bring his research on both the international monetary system and Bitcoin together as one to write the book titled *Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies*. He has a BA in social sciences from University of Southern California and a Master in Finance from IE Business School in Madrid, Spain. Nik lives in Los Angeles, CA, with his wife and young daughter.

Shownotes:

Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies

How does Bitcoin fit into the natural progression of gold and Fiat currencies?

Does Nik see any influence from governments like the IRS that actually are going to change the trajectory of Bitcoin?

The Fed Coin

Urgent Wealth Formula Banking Announcement! Nov 02, 2021

This is a 5 minute update on Wealth Formula Banking changes that are occurring because of current tax legislation. PLEASE LISTEN NOW!

**288: Dennis Gartman: Inflation, the Fed and Trouble Ahead!** Oct 31, 2021
It’s not easy becoming a physician. You have to be at the top of your class in college to get into medical school. Then medical school itself is a pretty big commitment. Of course, I’m one of those crazies who added 7 years of residency training to my education.

But by the time you get done with all of that training, you really do get an opportunity to master a body of knowledge. And while medicine is always changing, what we know about human physiology doesn’t change much these days—at least the basics.

You know that the heart has to keep beating and your brain needs to keep functioning to live. You know that it’s better not to be obese and that cigarettes are bad for your health for a myriad of reasons.

There is some beauty in knowing the consistencies of the human body—that despite the fact that futuristic medicine is on the way and will change the way we live, the basic knowledge of form and function of the human body remains constant. That makes it easier as a practitioner.

Now if you are on the diagnostic side of the economy, it’s a little different. What financial diagnosticians, aka economists, use as the core principles to predict the health and well-being of the economy are in flux. The rules are changing rapidly. This has made it much easier to predict the rhythm of the heart than the future pulse of the economy.

It used to be that the United States Federal Reserve Bank had two mandates: to maximize employment and to stabilize prices. It typically did not respond to the whims of the financial markets. In other words, if the heart stopped on the New York Stock Exchange, stocks would get crushed and there would be no immediate resuscitative effort by the federal government or the Fed.

Now, the rules seem a little different. The Fed artificially suppresses interest rates and responds briskly to any potential downturn. The Fed responds to what’s going on in the stock market—emboldening people to continue investing even during the pandemic when it made no sense to have sky-high asset prices.

The net result, in my view, is that whatever rules we played by in the past don’t matter anymore. It’s a free for all. We are living in times characterized by an artificial economy without natural cycles or anything else that you could previously use to forecast its future.

And let me be clear, I’m not imposing my ideology here. I’m simply making an observation of the way I believe things actually are. On a recent episode of Wealth Formula, Marin Katusa made the point that as investors, our job is not to be stuck in dogmatic positions because of our beliefs. It is to respond to the reality on the ground.

So with this chaotic new economic paradigm, it is interesting to speak to someone from the economic old guard. Dennis Gartman is famous for his Gartman Letters that he consistently wrote since the early 1970s until just recently.

In this episode of Wealth Formula Podcast, I discuss what Dennis thinks is going on in the current economy and what his predictions are for the coming years—especially in light of what is an obvious new world economic order.

Listen HERE.

Mr. Gartman has been directly involved in the capital markets since August of 1974, after his graduate work at the North Carolina State University.

He was an economist for Cotton, Inc. in the early 1970′s, analyzing cotton supply/demand in the U.S. textile industry. From there he went to NCNB National Bank in Charlotte, North Carolina where he traded foreign exchange and money market instruments. In the late 70′s, Mr. Gartman became the Chief Financial Futures analyst for A.G. Becker & Company in Chicago, Illinois. Mr. Gartman was an independent member of the Chicago Board of Trade until 1984, trading in Treasury bond, Treasury note and GNMA futures contracts. In 1984, Mr. Gartman moved to Virginia to run the futures brokerage operation for the Sovran Bank, and in 1987 Mr. Gartman began producing The Gartman Letter on a full time basis. He continues to do so today.

Clients of The Gartman Letter, L.C. include many of the leading banks, broking firms, mutual funds, hedge funds, energy trading companies, and grain trading companies. Mr. Gartman has lectured on capital market creation to central banks and finance ministries around the world, and has taught classes for the Federal Reserve Bank’s School for Bank Examiners on derivatives. Mr. Gartman served a two-year term as an outside Director of the Kansas City Board of Trade from 2006-2008. He is the Chairman of the Akron University Investment Committee, serves on the Investment Committee at the North Carolina State University, and is a member of the Suffolk Industrial Development Authority. Mr. Gartman appears often in financial media discussing commodities and the capital markets, and speaks before various associations and trade groups around the world.

**287: Artificial Intelligence, the Robot Revolution and the New World Order!** Oct 24, 2021
I am a natural entrepreneur. It’s not something I tried to be. I’m just wired this way.

School does not teach you to be an entrepreneur. However, there is no doubt that certain subjects parallel my thinking as an entrepreneur.

It may surprise you to know that the classes I took that most resemble my way of entrepreneurial thinking, were in the area of organic chemistry.

Higher level organic chemistry relies on integrating the knowledge of how chemicals interact in order to create new relationships.

My organic chemistry exams typically consisted of just a couple of exercises. There would be an image of one complex molecular structure and then another more complex molecular structure.

The exercise would be to use all of the chemical reactions that I learned as tools to help me figure out the appropriate reactions in appropriate sequence to make one structure out of the other.

There were often multiple ways of doing it. You just had to prove that the way you got to your destination was supported by all of the chemical interactions that were possible.

It was challenging for sure. In fact, organic chemistry is considered the primary “weeder” class for pre-med students. Most people didn’t like it much.

I was one of those odd balls who really liked organic chemistry and excelled at it. In fact, my campus job for two years in college was to serve as an organic chemistry tutor.

I loved the idea of solving complex problems via logical progressive reactions. There was a certain creativity about it that I now find in my entrepreneurial life.

In organic chemistry, the primary limitations of the problems I could solve were chemical reactions, with which I was not familiar. If I had the knowledge of a reaction, it served as a tool for solving problems. If I wasn’t aware of the tools that I needed, then I couldn’t solve the problem.

There is an interesting parallel with that limitation in the entrepreneurial world. First, you have to recognize a problem. You have to at least be exposed to it. If you don’t have any exposure in a particular field, then you don’t know what the problems and inefficiencies are.

That is to say, if you are in the medical field, you know what the problems that need to be solved are because you are confronted with them every day. Where there is a problem, there is a business.

However, someone with an entrepreneurial mind can only solve that problem if he is familiar with that specific inefficiency in the medical field. He may be the guy to solve the problem, but he will never know it.

Therefore, I contend that the best thing for an entrepreneur to do is to learn about as much stuff as he can in hopes of finding problems. The benefit of broad education spanning multiple fields, is the ability to use tools acquired in one field to tackle problems in others. In organic chemistry parlance this would be akin to learning more chemical reactions to solve different kinds of organic chemistry problems.

These days, my entrepreneurial spirit is focused on investing. You know by now that most of the time, I like to keep it boring. Apartment buildings and self-storage are things that people need and will continue to need in the foreseeable future.

However, as an investor, it would be foolish for me to not pay attention to technology. Wouldn’t it have been great to get in early on the internet? What about blockchain? I started talking to you about bitcoin and blockchain in 2017 when I discovered it for myself.

Many of you benefitted from those podcasts significantly through the financial gains we have seen in that arena since then. But what if we got in just a couple years earlier?

So what should we be paying attention to now? I think the next major technology disruption will be in the field of artificial intelligence (AI). We are already seeing it play out in real time. But believe me, we haven’t seen anything yet.

AI may be the single biggest technology disruption the world will see in the next decade. We need to pay attention to it. It will change our lives in ways that we can’t even imagine. And when you are aware of that kind of disruption on the horizon, you have an opportunity to make a lot of money along the way.

Martin Ford is one of the world’s leading experts on Artificial Intelligence and is my guest on this week’s episode of Wealth Formula Podcast.

You won’t want to miss this interview! Listen HERE!

Martin Ford is a futurist and the author of four books, including Rule of the Robots: How Artificial Intelligence Will Transform Everything (2021), the New York Times Bestselling Rise of the Robots: Technology and the Threat of a Jobless Future (winner of the 2015 Financial Times/McKinsey Business Book of the Year Award and translated into more than 20 languages), Architects of Intelligence: The truth about AI from the people building it (2018), and The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future (2009). He is also the founder of a Silicon Valley-based software development firm.

His TED Talk on the impact of artificial intelligence and robotics on the economy and society, given on the main stage at the 2017 TED Conference, has been viewed over 3 million times. Martin is also the consulting artificial intelligence expert for the new Robotics and AI ETF from Lyxor/Societe Generale (Ticker ROAI), which is focused specifically on investing in companies that will be significant participants in the AI and robotics revolution. He holds a computer engineering degree from the University of Michigan, Ann Arbor and a graduate business degree from the University of California, Los Angeles.

MFord_TEDHe has written about future technology and its implications for publications including The New York Times, Fortune, Forbes, The Atlantic, The Washington Post, Harvard Business Review, The Guardian and The Financial Times. He has also appeared on numerous radio and television shows, including NPR, CNBC, CNN, MSNBC and PBS. Martin is a frequent keynote speaker on the subject of accelerating progress in robotics and artificial intelligence—and what these advances mean for the economy, job market and society of the future.

Martin continues to focus on entrepreneurship and is an active board member of Genesis Systems, a startup company that has developed a revolutionary atmospheric water generation (AWG) technology. Genesis will soon deploy automated, self powered systems that will generate water directly from the air at industrial scale in the world’s most arid regions.

Shownotes:

What is Artificial Intelligence?

The possible dangers of AI

Where is the US compared to other countries when it comes to AI technology?

Blockchain and AI

https://mfordfuture.com

**286: Ninja Tax Strategies with Tom Wheelwright!** Oct 17, 2021
At our Wealth Formula meetup in Dallas a few weeks ago my CPA, Tom Wheelwright, got up on stage and surprised me.

Tom is a very smart guy. He wrote one of the books that I consider a “must read” for personal finance called *Tax Free Wealth.*

He is the Michael Jordan of CPA’s. He has several high profile clients including Robert Kiyosaki and is Robert’s Rich Dad Advisor on taxes.

I thought I had read up on or been exposed to just about every strategy Tom taught, but then he got up on stage and completely caught me off guard with a structure I hadn’t before seen.

It solves one of the biggest questions that high earning business owners have—how to turn active income into passive income.

Of course, being able to use depreciation losses from real estate is a tremendous advantage. But if you are not a real estate professional, you can’t use those passive losses against your active income.

But…if you can figure out how to turn that active income into passive income, then you can benefit from all of those tax advantages that real estate provides against your earned income.

Tom got up on stage and drew out a structure that not only showed the way to convert active income into passive income, but also showed how to do it while creating bullet proof asset protection and estate planning benefits that would survive even if the current tax legislation passed in entirety.

Not bad right?

Well, after that talk, I got a lot of questions about how this all worked so I decided to ask Tom to come on our show and explain it to all of our Wealth Formula community. And lucky for us…he agreed.

Curious on how it works? Make sure to tune into this week’s Wealth Formula Podcast!

Tom Wheelwright, CPA is the visionary and best selling author behind multiple companies that specializing in wealth and tax strategy. Tom is also a leading expert and published author on partnerships and corporation tax strategies, a well-known platform speaker and a wealth education innovator.

In Tom’s best selling book Tax-Free Wealth, Tom shows entrepreneurs and investors how to build massive amounts of wealth through practical and strategic ways to permanently reduce taxes.

**285: Chinese Evergrande and the state of the Global Economy!** Oct 10, 2021
Economics is a social science. While science is knowledge and application of existing aspects of the world and applications through physical laws, mathematics and research, social sciences deal with society and human behaviors.

Certainly there is plenty of math involved in economics but the math is predictive insofar as the behavior is predicted correctly. That is not an easy task when trying to predict things like the way the Chinese government will react to an internal crisis.

That’s why very smart economists often disagree with each other all the time. The disagreements are not insignificant either. One might predict hyperinflation while another predicts deflation. One might predict a decade of prosperity while the other predicts an outright depression.

I am not an economist, I am an investor. In that role, I pay attention to as much as I can understand and make my own conclusions on how to proceed with my money.

If I followed a gold-shilling Austrian economist to make investment decisions over the last decade, my wealth would be a standard deviation or more below where it is right now.

That said, the reality of all these predictions is that someone is usually right. While you might not be able to predict the future, you should be aware of what’s going on and make decisions based on knowledge rather than emotion alone.

A good example of economists disagreeing is playing out right now. China’s largest real estate development company, Evergrande, looks like it is about to go bankrupt. If you were at our meetup last week, economist Ryan Davis felt that the fallout would be isolated to Chinese banks.

My guest on Wealth Formula Podcast this week, Richard Duncan, does not buy that. He is far more concerned about the global ripple effects of default from this behemoth company.

Make sure to tune in to this week’s Wealth Formula Podcast to get his perspective!

Richard Duncan is the author of three books on the global economic crisis. The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005), predicted the global economic disaster that began in 2008 with extraordinary accuracy. It was an international bestseller. His second book was The Corruption of Capitalism: A strategy to rebalance the global economy and restore sustainable growth. It was published by CLSA Books in December 2009. His latest book is The New Depression: The Breakdown Of The Paper Money Economy (John Wiley & Sons, 2012).

Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. He also worked as a consultant for the IMF in Thailand during the Asia Crisis.

Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television, as well as on BBC World Service Radio. He has published articles in The Financial Times, The Far East Economic Review, FinanceAsia and CFO Asia. He is also a well-known speaker whose audiences have included The World Economic Forum’s East Asia Economic Summit in Singapore, The EuroFinance Conference in Copenhagen, The Chief Financial Officers’ Roundtable in Shanghai, and The World Knowledge Forum in Seoul.

Richard studied literature and economics at Vanderbilt University (1983) and international finance at Babson College (1986); and, between the two, spent a year traveling around the world as a backpacker.

Shownotes:

The Liquidity Tsunami

Is the current Inflation transitory?

What is China Evergrande?

**284: Jorge Newbery on the State of the Real Estate Market!** Oct 03, 2021
“It’s tough to make predictions, especially about the future.”

-Yogi Berra

The residential real estate market is on fire. No doubt. We are seeing this across the board from single-family homes to massive apartment complexes.

I’m not an expert on single-family home values. I don’t understand them as they are not rooted in cap rates etc. However, I can comment on larger residential real estate.

Cap rates have gone down primarily because of mortgage interest rates being at historic lows. This is just math. Leverage only works if the money you borrow at is less than the cap rate. Otherwise, you are leveraging losses, not profits.

So the question I often get from investors is, “What if interest rates go up?” It’s a good question but we have to understand that no component of the economy happens in a vacuum.

Cap rates are low because interest rates are low. Interest rates are low to avoid asset deflation. The fed is controlling mortgage interest rates by buying up 10 year treasury bonds.

The 10 year treasury typically reflects inflation. If it goes up, that means we’ve got inflation on the horizon. So, even if cap rates go up following increased mortgage interest rates, we *should* be able to raise our rents to match that inflation and offset the negative impact on us as sellers with increasing cap rates. That’s why I consider apartment complexes a hedge against inflation.

But the reality is that the economy is pretty darn fragile right now. The likelihood of the Federal Reserve allowing interest rates to naturally rise seems unlikely as any downward trends in the economy would likely result in a knee-jerk response and economic stimulation.

Of course, I could be wrong, but my personal feeling is that we have a runway of a good 5 years or more before the party ends.

So what to do? I’ll tell you what I’m doing. I’m doing what I always do. I’m investing in value-add real estate that does not rely on market appreciation to be profitable. If the market keeps heading north, then great. If not, it’s not the end of the world. We still have equity that we force through our value-add programs.

The bottom line, in my view, is that a reasonable approach is to continue to volume average into your investments. Not investing in an inflationary environment guarantees the loss of your buying power so you don’t have a lot of choices.

But my friend Jorge Newbery is trying to give us a few more choices. He’s a little less enthusiastic about the market over the next few years and is hedging his bets in a different way.

On this week’s Wealth Formula Podcast, Jorge gives us his perspective on the real estate market and his formula to come out ahead in this economy either way.

Listen HERE

In 2008, Jorge P. Newbery founded American Homeowner Preservation to buy distressed mortgages at discounts and offer struggling families sustainable solutions to stay in their homes.

However, when the homes backing the mortgages were vacant, he recognized that lenders frequently struggled as they tried to limit their losses.

In 2020, Jorge founded preREO to get these vacant properties into the hands of local investors during the foreclosure process which mitigates losses to lenders and accelerates returns for investors, a win-win.

283: Ask Buck 9/25/21 Sep 26, 2021

Personal finance is personal. However, there is a type of conventional financial wisdom that leads us to believe that there is one right way of doing things.

That becomes very confusing to people…especially in our alternative investment world. After all, financial advisors are the experts, right?

In reality, financial advisors are usually most interested in your money going into traditional investments such as stocks, bonds and mutual funds so that they can charge you for assets under management.

I’m not vilifying them for it. It’s just the way it is. Furthermore, traditional advisors tend to know very little about our world of real estate and other tangible assets.

There are some out there who offer coaching as a way to navigate the alternative space. But in my experience, these coaches are not wealthy.

After all, one-on-one coaching takes a lot of time. If you are really wealthy, would you spend your time coaching or focusing on what makes you a lot of money?

Whenever I try to learn something new in this space, I try to learn from people who are wealthier than I am. I don’t take financial advice from people with less money than me. I am unaware of anyone who makes more money than most of us who is offering one on one coaching.

So, what do you do? It’s a very good question. To me, the single best resource for learning personal finance in the alternative space is through peer groups.

As you may know, we have our own private peer group called Wealth Formula Network. I can honestly say that I have learned more from this group over the past few years than any other resource.

Collective intelligence is very powerful. If you have friends and family of like mind that can help you navigate through this space and feel confident, then good for you.

Otherwise, I strongly suggest you consider finding a group of peers for collective learning. There simply is no better way to increase your financial IQ and to feel confident about your decisions.

Ask questions. Don’t be afraid because someone else will likely have the same question, but is afraid to ask for fear of looking stupid. But everyone has the same questions at some point in their journey.

Speaking of questions, this week’s episode of Wealth Formula Podcast begins the latest series in our “Ask Buck” episodes. Make sure to tune in as we have got some great topics. I can pretty much guarantee you will learn something. I know I did!

P.S. If you want to submit your question to the show, click HERE!

**282: The Cash Flow Ninja!** Sep 19, 2021
When I first read The Cash Flow Quadrant by Robert Kiyosaki (the purple pill), I was fascinated by the concept of using earned income to produce streams of passive income, that would eventually become a great river that would replace ones earned income all together.

That concept is what I now call Wealth 1.0. You see, while the concept is appealing, the math is not. Let’s do some simple arithmetic to understand the challenge.

Say for example you make 500K per year. Let’s assume that at a 30 percent tax rate, that leaves you with $350K. Let’s be generous here and say that, out of that remaining $350K, you invest $200K per year into something that yields a consistent 8 percent cash on cash.

How much would you have to deploy to replace your $500K? (.08x=500,000). The answer is $6,250,000. If are investing $200K per year, how long would that take you? It would take you about 31.25 years. By that time, with inflation, your 500K wouldn’t be worth nearly as much as it is today.

Ok, I know this is a very simplified model, but I think you get the point. Linear cash flow growth is not particularly efficient. When I realized that, I knew there had to be a better way. That better way is what I call Wealth 2.0 and can be described with the mathematical Wealth Formula:

Wealth=Leverage(MassXVelocity)

Mass is simply how much you invest. In the above example, if you invested $400K per year, you would get there in half the time.

Velocity is the amount of time it takes to get your money back from your initial investment and redeploy into the next opportunity.

Leverage is good debt. We can amplify our results with using bank money or anything else that can lever our investments.

Practically speaking, significant growth in your wealth can be obtained by deploying as much capital as possible into leveraged assets that can quickly be refinanced or divested. This allows you to *recycle* capital rather than simply using new earned income to grow your wealth.

A well-known example in our investor club is from an early investor with Western Wealth Capital who deployed a total of $750K across multiple offerings. Through a series of refinances and divestments with quick redeployment of capital, his principal is now worth over $4 million.

In our earlier example of Wealth 1.0, had he simply gotten 8 percent on that initial 750K, he would be looking at about $60,000 per year. But now, if he deployed that $4 million into simple 8 percent cash on cash investments, he would be making $320,000 per year. The idea is to grow that principal rapidly until you are ready to flip the switch into linear cash flow.

Again, I know the modeling is simplistic but it is illustrative of the power of a Wealth 2.0 model. The difference between the two approaches is the difference between checkers and 3-dimensional chess.

Of course, this is not to diminish the value of straight up cash flow investments. You may want to have some of those in your portfolio as well. Mailbox money does certainly make you feel good.

Speaking of cash flow, my guest on this week’s Wealth Formula Podcast spends a lot of his time looking into cash flow investments. His name is MC Laubscher aka the Cash Flow Ninja. Make sure to tune in to this week’s podcast to hear what he has to say on the topic!

Listen HERE

M.C. Laubscher is a Husband, Dad, Podcaster & Cashflow Coach.

As a cashflow investor & serial entrepreneur, M.C.’s passion is to assist investors & business owners to create, recover, warehouse & multiply cashflow through advanced strategies.

Having figured out how to escape the rat race and replace his income through cashflow investing, he shares how highly paid professionals and business owners can replace their incomes through cashflow investing strategies to escape the matrix.

M.C. is a member of the Forbes Finance Council and has shared his strategies on Forbes Magazine, Entrepreneur Magazine, Grant Cardone TV, and Biggerpockets.

M.C. is the creator & host of the top-rated business and investing podcasts, Cashflow Ninja & Cashflow Investing Secrets and Chief Cashflow Coach at Cashflow Ninja LLC.

The Cashflow Ninja Podcast has been downloaded over 4.5 million times in over 180 countries and has been featured as one of the top 48 podcasts for entrepreneurs by Entrepreneur Magazine & is regularly featured as one of the top 100 podcasts by Apple Podcasts.

M.C. is also the President & Chief Executive Officer at Producers Wealth, a virtual wealth creation firm that assist investors, and business owners to set up and implement Infinite Banking.

**281: Should We Be Buying Hotels Yet?** Sep 12, 2021
There is a saying, “People grossly over-estimate what they can accomplish in a year and grossly under-estimate what they can accomplish over five years.”

As I write this to you on my 48th birthday (September 8th), I look back on the last 5 years and it’s hard to argue the point. Five years ago, this podcast did not exist.

Today, Wealth Formula Podcast gets about 25K-30K downloads per month and we have an Investor Club with over 2000 members that control over $800 million in assets.

I am in awe of what we have created together. But the bigger lesson here is that even though it may not seem like it, all the little things you are doing now DO make a difference over time.

If you don’t like change, you are out of luck. Change is inevitable in life. You can either fight it or guide it in the direction you want to go.

The same can be said about investing. The type of investing we do in our community requires planting seeds today and waiting patiently for a few years in most cases. Just think about those people who sat on the sidelines over the past 5-6 years while Western Wealth Capital delivered average annualized returns of over 30 percent to its investors. Indeed, time IS money.

Understand that investing in real estate requires some level of faith. You can’t track your net worth daily on an app. However, once you are in it a few years, you start to see things come to fruition in a big way. Once you’ve been through the cycle a few times, it really gets exciting.

But again, the choices and investments you make today are for 3-5 years from now. The longer you wait to start, the longer it will take to get results. It’s time to get off the sidelines.

While you take action today, it is also important to keep contemplating your next move for the future. In my case, I have been interested in the hotel industry for a while and have been collecting data and looking for the most opportune time to get involved.

On this week’s Wealth Formula Podcast, I reconnect with hotel broker, Steve Usher, to get an update on the hotel investing landscape. Listen in as I get the scoop on whether it’s time to buy!

TITAN Hospitality was founded by Steve Usher. Prior to starting the company, Mr. Usher was the Pacific Northwest Representative for CB Richard Ellis’ National Lodging & Hospitality Services Group in San Francisco. He serves on the Board of Directors of San Luis Obispo-based Martin Resorts and is a licensed California real estate broker.

Shownotes:

How have the markets have changed since the last time Steve was on the show?

Different kinds of hotels that people can invest in?

Possible barriers to success for independent owners who are not franchising

Types of things are good for a buyer to consider before going into the hotel business

**280: Angel Investing and Shiny Objects!** Sep 05, 2021
As a flaming entrepreneur I had a serious problem when I was a young man: Shiny Object Syndrome.

After surgical residency, I had a couple of major business successes. Having never failed in business before, I kept pushing the limits.

It wasn’t about the money back then. You see, natural entrepreneurs like me enjoy money—no doubt. But we use it mostly as a way to keep score.

If you create a successful business, you make money. That means you win the game. If you don’t make money, you lose.

At first it wasn’t a big deal. I was tinkering with businesses that were costing me thousands of dollars but I was already making seven figures.

Then, I made a major mistake. I pushed the limits on the goose that was laying the golden eggs. I tried to expand a highly successful business way too fast while financing it entirely myself.

It was a big gamble. In fact, had I won that one, it would have been *game over*. But I lost. And losing this one was a big deal because I killed that gold laying goose!

I was millions of dollars in debt and things only seemed to get worse (it’s a long story).

In fact, the reason I survived that big mess was because of something *boring* I was doing on the side. You see my dad has been a real estate investor all his life. I grew up thinking that real estate was the only conservative investment.

So while I was tinkering with shiny objects, I also decided I would buy apartment buildings like a grown-up the way I was taught.

Admittedly there was some luck involved, but the buildings I bought during those early years ended up yielding about 500 percent return in less than 5 years—enough for me to sell them and bail myself out of the big mess I had made.

The whole thing was a big lesson for me. Sure I saw cash flow from those buildings but I only truly appreciated the equity growth that had occurred at divestment. It was a real eye opener. Too bad I had to spend it all paying off the sins of bad decisions made by me and my management team.

This all happened pretty quickly after residency so I was fortunate to have plenty of time to recover and re-build myself. When I retired from medicine and became a full time investor 4 years ago, I still had to control my impulses. Shiny objects existed not only in the business world but with investments as well.

I made some stupid investments in exotic things early on as well but quickly learned that the only asset class that was consistently making me money was real estate.

I had to keep repeating a mantra to myself that I continue to do every day: “boring is good”.

There is nothing sexy about working class apartment buildings. You’re not going to brag to your friends about owning them or drive by them with a ton of pride. They are often ugly and in areas you might not even want to drive through.

But in the right hands, they consistently make money. In many cases, the returns themselves are quite sexy. My lifetime annualized returns on real estate are probably 40-50 percent all in.

So, even though it seems boring, every year the vast majority of my investable income goes into apartment buildings. Do I invest in riskier stuff? Yes but it’s calculated.

10-15 percent of my investable assets now go into things that could potentially create a meaningful change in my quality of life. What’s a meaningful change? Well, it’s going to be different for everyone but it usually means adding some zeros to your net worth.

On the other hand, I approach those investments knowing and being ok with the possibility that there will be no return of capital at all—like the Maserati I bought last year.

There are some people, however, who make their living entirely on the asymmetric side of the investment world. This week’s episode of Wealth Formula Podcast features one of those guys: Jonathan Hung. If you are curious about the world of angel investing, make sure you tune into the show!

Jonathan Hung is a transformative Los Angeles angel investor and venture capital partner who believes in a bright future for businesses seeking to broaden their horizons in North America and Asia. One of the most active angel investors in Southern California, his mission is to drive value creation within each portfolio company. In support of this mission, he serves as Co-Managing Partner at Unicorn Venture Partners and Senior Venture Partner and Head of Due Diligence at Expert Dojo providing a hands-on approach to supporting companies by offering strategic expertise in operations management, finance, business development, multinational business strategy, entrepreneurship, networking, data analysis, and leadership.

Jonathan and his team target investments in US companies that have global market potential with a focus on long-term growth expansion to East Asian markets.

In addition to providing venture capital funding and advisory support, he also provides business mentorship based on his experience running U.S. and China offices as the President of United Overseas Textile Corporation. Jonathan was also a Managing Member for his family office fund, J Heart Ventures, which made investments in start-up companies such as Gyft, ChowNow, Miso Robotics, Clover Health, Bitmain, etc. He also leverages various degrees from the University of Southern California, London School of Economics, Massachusetts Institute of Technology, and The Wharton School at the University of Pennsylvania.

Jonathan believes that every start-up/portfolio company regardless of industry and size can take full advantage of his genuine approach to mentorship. Jonathan specializes in early-stage investing and the formation of strategic business partnerships. He invites connections with any professional who shares his passion for the technology and consumer market sector, entrepreneurship, and venture capital.

Shownotes:

Angel investor vs. venture capitalist

How to choose companies to invest in

How much does Jonathan actually participate in running the companies that he invests in?

What kind of projections would you typically see from an angel fund?

**279: Should You Buy a Franchise?** Aug 29, 2021
Henry Ford once said, “Whether you think you can or think you can’t, you’re right”. The older I get, the more I am convinced that he was right!

I believe that mindset is the single most important element to success in life—be it financial or otherwise.

Mindset is a broad term but the way I think about it is as a thermostat for your expectations of the world. In my experience, there certainly is a wealth thermostat.

You are highly unlikely to make a lot more money than you think you can. You are also highly unlikely to make a lot less. Part of thinking you *can* involves what you visualize for yourself everyday.

What do I mean by visualize? I’m not talking about meditating or doing anything else other than what we do everyday on autopilot that results in various images of who we are in our mind’s eye.

If you are around a bunch of people who make a lot more money than you do on a daily basis, you are more likely to see yourself in that position. If you know people personally who have accomplished various exceptional milestones your subconscious will be more likely to allow you to accept that you, too, can achieve such things.

A wealth mindset is a prerequisite to actual financial wealth. That doesn’t mean that you will get there for sure if you can see it. But if you don’t, you can be pretty sure you will never get there.

If the world around you isn’t pushing you, you need to find other stimuli that do. That’s where a lot of people who actively manifest their futures use image boards and other tools to train their subconscious.

I don’t actually do that myself but I certainly understand how it might help. I’m not an expert on mindset nor am I a coach of any kind. I’m just an armchair quarterback with some observations.

My guest on this week’s podcast is Kim Daly—and she is sort of an expert at this mindset stuff. Kim is also known best as an expert on franchises.

That’s a pretty good combination because, if you want to succeed as a business owner, you have to really focus on the mental part as well.

Kim’s enthusiasm is infectious. If you want to learn about franchises or just how to be a more fulfilled person, make sure to listen to my interview with her on this week’s Wealth Formula Podcast.

P.S. Don’t forget to sign up for our Wealth Formula Meetup in Dallas on Oct 1-2. Click HERE to learn more!

Kim Daly is one of America’s top franchise consultants. For almost two decades, she has been educating, motivating and inspiring dreams of business ownership through franchising as an independent consultant with FranChoice. She co-authored, Franchising Freedom, an international best-selling book, and in 2012, she built the largest consulting practice in the history of franchising consulting. Today, she continues to help thousands of people explore their investing and business ownership dreams through her individual consulting, podcasting and online motivational programs.

Prior to becoming a franchise consultant, Kim was a highly sought-after health & fitness consultant working with Denise Austin, Dr. Denis Waitley, eDiets.com and Gold’s Gym. She launched the first health & fitness marketplace at USATODAY.com and co-founded her own martial arts school. She has been self-employed since she was 25 and loves to boast that she has a life MBA and is completely unemployable because her freedom has no price! As she travels the country hosting live franchising and motivational events and creating videos for her Youtube channel, she shares her heart, knowledge, passion and experiences with the goal of helping others to live their best life.

Kim graduated Summa Cum Laude from the University of New Hampshire with a Bachelor of Science in Nutritional Biochemistry and a minor in Sports Nutrition. She worked as a personal trainer and had medical school dreams before entrepreneurship and franchising found her. She grew up on the seacoast of southern New Hampshire where she still lives today with her two boys, her parents and siblings. When she is not inspiring other people’s dreams, she is working on her own! She is a Christian, a personal development junkie, a health & fitness enthusiast, an avid skier and a soccer mom. She is the marketing chairman for the board for St. Thomas Aquinas High School and is actively involved in her Catholic church community.

Kim is a small- town girl who achieves world-class dreams! She aspires to help YOU achieve your
dreams!

Shownotes:

What is a Franchise?

Is Franchising for you?

The process of finding the right franchise

What happens after a client is matched with a Franchisor?

**278: Asset Protection: Everything You Need to Know!** Aug 22, 2021
Once you realize how much you don’t know, you always feel like you’re playing catch up. At least that’s how I feel when it comes to personal finance.

Wealthy families often implement family offices to help keep things straight. Theoretically, that’s a great solution. However, from what I’ve seen, family office structures often leave clients with a false sense of security.

No matter what your level of wealth, YOU need to be the CEO of your own finances. No one else cares as much about your money and your legacy.

What that means is that you need to be educated on personal finance one way or another if you are going to be successful in this realm.

For most high-paid professionals that means not only surrounding yourself with competent CPAs, lawyers, and investment advisors. It also means being active in designing strategies and making sure they get implemented.

I have one of the best CPAs in the world but I am far from passive in my interactions with him. I’m constantly challenging him and providing him with new ideas. After all, I know my finances better than he does.

And every time I acquire a new asset or make a new investment, I have to be the one who understands how it fits into my portfolio. It can be exhausting at times but at least I can be confident in the decisions I make.

That’s why so many people find Wealth Formula Podcast to be a useful resource. This is a platform for me to learn about things and share them with you in real time. Nothing about the show is theoretical. It’s the information I use every day in my own financial affairs.

Because of that, you often hear from my advisors. After all, what better way for me to communicate these concepts to you than having you listen in to the conversations that guide my own decisions?

This week’s episode features one of those discussions as I chat with my own asset protection attorney, Doug Lodmell. I highly encourage you to listen. This might be the most comprehensive but understandable podcast on the topic of asset protection you’ve ever heard and, hopefully, will leave you with a clear understanding of what you need to do in this area right now.

Born in Geneva, Switzerland, attorney Douglass S. Lodmell has excellent knowledge and the highest level of experience in estate planning, taxation and strategic asset protection for domestic and international clients. In addition to a Juris Doctorate from Cardozo School of Law, Douglass has a Bachelor of Science degree in finance as well as an advance law degree (LL.M.) in taxation from NYU School of Law. He has authored numerous articles for professional journals as well as a popular book about the explosion of lawsuits in America called The Lawsuit Lottery: The Hijacking of Justice in America. Doug’s extensive experience in asset protection make him a frequent guest speaker at medical, and professional conferences and seminars throughout the country, as well as teaching concepts of asset protection to other attorneys at continuing legal education seminars throughout the country.

Shownotes:

What is Asset Protection?

Why do you need to protect your assets?

How does an LLC protect you?

What is a bridge trust?

The differences between estate planning and asset protection

277: Investor Roundtable on Wealth Formula Banking Aug 15, 2021

Over the last three weeks, you have heard actual members of our Wealth Formula Community talk about their financial journeys.

A recurrent theme through these interviews was the concept of Wealth Formula Banking. In case you didn’t notice, all three of these individual investors are essentially using Wealth Formula Banking as the cornerstone of their investor strategies.

You might, therefore, be wondering what exactly Wealth Formula Banking is. Well, it’s actually an investing strategy that utilizes permanent life insurance.

Now you might be thinking: “My financial advisor told me to buy term and invest the rest”. Believe me, I’ve heard that one a million times. In fact, I used to believe it.

But then, during my own financial journey, I noticed that pretty much all of the high net worth individuals that I met were utilizing some kind of permanent life insurance in their own portfolios.

If permanent life insurance was not a good strategy, then why were all of these smart people who made a lot more money than most doctors doing it? After some digging, I had the answer.

Permanent life insurance, the way it is presented to most people, is not a good strategy at all. However, the devil is in the details. Structured appropriately—-maximizing cash value and minimizing fees, these policies are extraordinarily powerful in amplifying wealth creation.

Perhaps the best book on this concept is written by Nelson Nash called Become Your Own Banker. This is an older book but drives home the fundamentals of this wealth-building concept in an easy to understand format.

Nash’s concept is further optimized for active investors by the Wealth Formula Banking concept. In short, Wealth Formula Banking involves an asset protected, tax efficient vehicle that allows you to invest the same money in two places at the same time.

We call that double-dipping. And while it may sound too good to be true, I can tell you from my own personal experience that it’s not. That’s why, at the very least, you need to learn about it and decide if it’s right for you.

There is no better way to do that than to hear fellow Wealth Formula community members like you discuss the concept and how they are using it in their own portfolios.

So… that’s what we are going to do on this week’s episode of Wealth Formula Podcast. LISTEN NOW!

**276: The Purple Pill** Aug 08, 2021
In June of 2008, I had just completed my surgical residency and gotten married the day after graduation. There was already quite a bit of change in my life.

On the way back from my honeymoon, I looked for something to read at the Puerto Vallarta airport—not many choices as you can imagine. Most people heading back stateside are too hungover to read on the plane.

There on the shelf, I grabbed one of the three available books and the only one that did not have a picture of buff dude with long hair appealing to romance novel enthusiasts.

It was called *Cashflow Quadrant* and the author was, of course, Robert Kiyosaki. I read that book on the plane and my life has never been the same.

I’ve heard lots of stories like this over the years. Something about Kiyosaki’s way of explaining concepts really inspires people. To this day, I am quite sure that he has been the impetus behind more millionaires around the world than any other individual in history.

The funny thing is that some of those concepts that resonated with me like “cash flow” were nothing new. My dad used to call himself a cash flow investor long before Kiyosaki wrote Rich Dad Poor Dad.

The point is that sometimes it’s not about what is said but *how* it’s said that matters. Guys like Kiyosaki know how to communicate important concepts. When that happens, you can get quite an *aha* moment that sends you down a rabbit hole.

After reading Rich Dad Poor Dad, Ryan Stieg set out on his journey to figure out how to make sense of his own purple book experience. Part of that journey led him to the Wealth Formula Community.

On this week’s Wealth Formula Podcast, he takes us down his path from W2 wage earner towards his trajectory as a full-time investor. Ryan’s story could sound a lot like your own if you want it to! LISTEN NOW!

Ryan Stieg started down the path of passive investing like many of us did, after he picked up a little purple book called Rich Dad, Poor Dad. The problem was that he did that in college and didn’t take action on it to start investing passively until many years later when that itch to invest passively crept back up.

Since 2016, Ryan has focused (or should we say lack thereof) on all different kinds of investing, always coming back to real estate and business being his mainstays. Ryan has a small portfolio of one to three unit rentals across five different markets in the US. He has also invested in nearly twenty real estate syndication investments individually or with an investment group that he co-founded with fellow Infielder, Jim. Outside of that, Ryan has investments in note funds, mobile home park funds, life settlements, a development project, cryptocurrency, and a few other items that further cement his self-diagnosis of “shiny object syndrome”.

However, with all of those reaches over the years, Ryan still believes in the long-term success and tenets of passive, cash-flow focused investing with proven syndicators and shared knowledge in investing.

When he’s not working on passive investments, he is working in the transportation insurance industry or found with his wife watching whatever sport one of their two boys is involved in during that particular season.

Shownotes:

How did Ryan discover the Wealth Formula Podcast?

Connections he has made through Wealth Formula Network

Why go down the franchise route?

How important Wealth Formula Network has been to his growth?

**275: What’s a Left Field Investor?** Aug 01, 2021
“Coming out of left field” is a slang derived from baseball which basically references something unexpected. What does that equate to in personal finance?

Well, the opposite of something unexpected would be something expected or… conventional. Conventional financial wisdom includes stocks, bonds, and mutual funds as the foundation of a solid, responsible portfolio.

Conventional finance has even labeled investments out of this core set of products as *alternative*. I wonder why?

Well, when you think *alternative*, what kinds of images pop up in your mind? Purple hair? Nose rings? Well, that’s not by accident.

The conventional financial apparatus would like investors to think of investing in real estate and other non-paper assets the same way you might think of those alternative images: unstable, unsafe?

It’s a rather clever use of language for marketing purposes I must say. But it’s disingenuous all the same. After all, how could real estate be an alternative investment?

The ownership of real estate and other real assets far outdate the more modern phenomenon of paper assets and certainly any kind of public equity market. Owning *stuff* is the only way investing existed just a few hundred years ago!

Nevertheless, I can’t tell you the number of times I’ve witnessed genuine anxiety from investors first realizing that they ought to be investing another way other than the way they had been conditioned their whole life.

I get it. That’s what our *alternative* investing communities, like Wealth Formula Network are for. We are kind of like support groups for recovering paper asset investors and we provide each other the support and courage to do what is in our own financial interests.

Of course, ours isn’t the only support group (or cult) out there. Jim Pfeifer’s Left Field Investors is another one. It just so happens that he’s part of our community as well.

Listen to this week’s episode Wealth Formula Podcast to learn how Jim’s journey from high school teacher to financial advisor ended up leading him into podcasting and a career as a full-time investor.

These intra-community shows are a great chance to reflect on your own financial journey. Make sure to listen NOW.

Jim Pfeifer is one of the founders of Left Field Investors and the host of the Passive Investing from Left Field podcast. Left Field Investors is a group dedicated to educating and assisting like-minded investors negotiate the nuances of the passive investing landscape and world of syndications. Jim is a former financial advisor who became frustrated with the one-path-fits-all approach of the standard financial services industry. Jim now concentrates on investing in real assets that produce cash flow and is committed to sharing his knowledge with others who are interested in learning a different way to grow wealth. Jim not only advises and helps people get started in passive real estate syndications, he also invests alongside them in small groups to allow for diversification among multiple investments and syndication sponsors. Jim believes the most important factor in a successful syndication is finding a sponsor that he knows, likes and trusts. He has invested in over 45 passive syndications including apartments, mobile homes, self-storage, private lending and notes, ATMs, commercial and industrial triple net leases, assisted living facilities and international coffee farms and cacao producers. Jim is constantly looking for new investment ideas that match his philosophy of real assets producing cash flow as well as looking for new sponsors with whom he can build quality, long-term relationships.

Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Shownotes:

What Jim thinks about “Alternative Investments”

Managing property managers

Are Alternative Investments safe?

Left Field Investors

**274: How to Become a Prolific Investor!** Jul 25, 2021
In the last few episodes of Wealth Formula Podcast, we have had some serious specialists in the area of Real Estate and Natural Resources.

These shows are important because you, as an investor, need to know what’s going on out there so you can make educated decisions about where to deploy your capital.

Solid information from experts is important, but the actual implementation of personal finance strategies is often daunting for individual investors in the alternative space.

If you follow the conventional financial path, it’s easy. You just keep dumping your hard-earned money into stocks, bonds, and mutual funds and help your financial advisor retire comfortably.

However, easy does not mean wise. Blind faith in conventional financial wisdom can be hazardous to your financial health and catastrophic for your retirement plans.

In my 47 years of life, I have come to realize that nothing worth doing is ever easy. Taking charge of your own finances requires some work. The good news is that, if you are a listener of Wealth Formula Podcast, you are probably already a high-paid professional doing something that requires a great deal more brain power than personal finance.

Yes. Managing your own money takes work but it’s not that difficult. In fact, the hardest part is overcoming the fear of making the wrong decisions. That said, letting someone else make those decisions for you doesn’t guarantee success either.

The reality is that if you are managing your own money, at least you know for sure that the decisions you make are in your own interest and they are decisions you made.

So how do you become confident about making your own financial decisions? Well, for one thing, it takes some time. The only way I know how to speed up the process is by learning from others. And it’s not just the good stuff you need to learn either.

It is true that the best way to learn is through mistakes. However, they don’t need to be your mistakes. Learning through your peers is priceless.

That’s why the next few episodes of Wealth Formula Podcast will feature interviews with real investors just like you. This week I interview a guy who worked for Boeing for three decades and went through a divorce before his personal finance journey really took off. That’s real stuff.

So if you’re curious about the financial journeys of your Wealth Formula peers, make sure to listen to this interview and learn why Chris Odegard now feels more confident than ever in his financial future!

Chris Odegard’s prolific investing journey began in 2008, ten years before he departed Boeing. He experienced a huge illiquidity event where he lost 55% of his assets. In this case, the event was the end of his nineteen-year marriage.

After that, he went from living in a beautiful house in the suburbs to what he fondly refers to as the van-down-by-the-river apartment, a run-down studio in a shabby part of town. No small burden was the thousands of dollars in alimony and child support going out the door each month.

Shortly thereafter, he read Robert Kiyosaki’s Rich Dad, Poor Dad, and his mind was opened to a whole new world of investing, and a way in which he might extricate himself from this financial abyss. One day in the down-by-the-river apartment, he heard an advertisement on the radio for a free real estate seminar put on by Robert Kiyosaki’s Rich Dad Company. Having recently finished the book and still filled with the resulting excitement and emotion, he eagerly registered for the event. On the day of the class, his beloved truck wouldn’t start. He felt like he was at a turning point, and there was no way he was going to let this stumbling block deter him. He managed to find a rental car company that would deliver a car to his apartment, and he was off to the seminar.

He made his first real estate investment in 2010 when his daughter decided to move off-campus following her freshman year. Not wanting to pay someone else’s mortgage for the next three years, they purchased a duplex near her university, moved her in, and sublet ¾ of the building. They received an $8,000 check as part of President Obama’s first-time homebuyer tax credit, the cash flow and appreciation that followed, and she received some real-world business education while simultaneously managing the building and going to college.

Subsequent investments have included: single-family rentals, apartment buildings, notes, health care startups, movie licensing, private lending, craft-beer brewing, self-storage, ATMs, life insurance policies, and cryptocurrencies. He had varying degrees of success and some failures in these endeavors, as one does with any investing. The most important thing he learned, however, was which investments are the best match for him in terms of his skillset, interest, risk tolerance, tax situation, and how much of his time they consume. In the end, his investment of choice ended up being apartment syndications.

Through these alternative investments, he climbed out of his post-divorce financial setback and increased his net worth many times over in a relatively short period. It’s noteworthy that the above list does not include stocks, bonds, ETFs, and mutual funds. His stock holdings are limited to small investments in companies with explosive upside-growth potential and limited downside.

He left Boeing at the end of 2018 at the age of fifty-six and started The Prolific Investor in an attempt to share what he’s learned so that others might benefit, especially young people who have the benefit of time on their side. Making smarter financial decisions and investments will keep them from leaving millions of dollars on the table as he did and allow them to retire in their thirties or forties instead of their fifties or sixties.

His children are grown and blazing their paths in the world. He currently lives in Kent, Washington, with his personal and business partner Marnye Moore.

Shownotes:

Chris and his investment portfolio

How finding Wealth Formula changed his life

Wealth Formula Banking

Being part of the Wealth Formula Network

theprolificinvestor.net

**272: Dave Steele on Why NOW is the Time to Buy Real Estate!** Jul 11, 2021
We talk about a lot of concepts on Wealth Formula Podcast related to personal finance and sometimes it can be overwhelming: especially for the newbies in our community. So let me summarize the basics.

First, make sure you are protecting your family against the economic fall out of unexpected death. Estate planning, including life insurance, is critical. I am a firm advocate of cash value life insurance such as Wealth Formula Banking to also allow your defensive moves like insurance to help you amplify your wealth.

Next you need asset protection. You don’t want to be a lawsuit or creditor away from bankruptcy. Cover your assets as they say. Get in touch with someone like my attorney, Doug Lodmell, sooner rather than later.

Finally, the Wealth Formula ethos is to invest in real assets that not only make you money but also mitigate your tax burden. In my humble opinion, the ideal investment for this purpose is to invest in apartment buildings.

I have searched high and low for investments that offer comparable yield with the same risk/benefit profile as investing in value-add working class apartment buildings in fast growing markets. I can’t find anything that comes even close.

Even real estate development doesn’t really make sense to me right now. The yields are no better than what I’m getting on value-add apartment buildings with a fraction of the risk.

We have also seen the resilience of apartment building investments in the hands of competent operators. Pandemics, deep recessions, and eviction moratoriums aside, we have fared quite well and investors are seeing that first hand.

And now, we are out of immediate danger and the economy is growing at an incredible rate. Fiscal and monetary policy combined with pent-up demand for goods and services is creating an economic boom that, in my opinion, will be the second coming of the roaring 20s.

I believe we are just at the beginning of one of the best times to make money in decades. I also believe that people who invest as much money now into real estate will be very happy in a few years if those properties are improved and managed competently.

Sitting on the sidelines is a guaranteed way to lose money. Why? Well, along with that real economic growth, we are also going to see some significant inflation. Your money in the bank is, therefore, guaranteed to lose value.

If you are in our accredited investor club, you are going to start seeing our rate of acquisition pick up quite a bit for all of the reasons cited above. It’s GO TIME!

To help you understand why that is, I interviewed Dave Steele, co-founder and principal of Western Wealth Capital. Dave has been in real estate for three decades and has been extraordinarily prescient in his forecasts.

If you want to know why I think it’s “go time”, make sure to listen to this week’s episode of Wealth Formula Podcast!

David is an entrepreneurial executive who has offered leading-edge investment opportunities to thousands of individual investors in both Canada and the United States. From 1997 to 2001, David was CEO of International Properties Group Ltd. (IPG), a TSX-listed real estate company that purchased apartment buildings and converted them to condominiums. While at IPG, David developed and operated a wealth management division, which helped thousands of individual investors acquire more than 85 projects and 7,000 properties throughout North America. Those investment properties continue to generate passive investment income today. David has been actively involved in the growth of the Entrepreneurs Organization (EO), a non-profit organization that now has over 7,500 members worldwide. From 1993 to 1994, David served as EO’s International President. David has a Bachelor of Commerce degree with a major in finance from the University of Calgary.

**270: Is a Wave of Mortgage Defaults Coming?** Jun 27, 2021
In recent years, I have made some pretty darn good bets that have made me a lot of money.

Now I know you are thinking that I am referring to my investments. And you are correct. But I am not referring to financial investments.

The investments that have made me the most money over the past few years are investments into relationships. One *superpower* that I have been blessed with is the ability to read people—what might be best characterized as “Spidey Sense”. I am, of course, referring to Peter Parker and his web-slinging alter-ego’s ability to sense imminent danger.

By the way, I must give Wealth Formula Network member, Ian Kurth, credit for giving my *superpower* this name. As ridiculous as it may sound, I credit it for staying out of a lot bad deals and away from the many charlatans out there in the investment world.

Don’t get me wrong, early in my investment career I got burned too. In retrospect though, the signs were always there. If I had harnessed my senses better, I could have probably avoided those mistakes.

To be clear, there is always risk in investing. There’s always a chance you are going to lose money. I’m ok with that. As long as you win a lot more than you lose, you are going to do just fine. Believe me.

The way you mitigate the losses, however, is to align yourself with competent individuals with high integrity. Know, like and trust are requirements for me when it comes to partnering or investing with anyone. However, they also have to be damn good at what they do.

That’s why the saying “your net worth is equal to your network” is so true.

Having relationships with people who you trust and who are incredibly smart and good at what they do is absolute gold. For me that includes guys like Dave Steele, Tim McLeary and Dante Andrade.

It also includes one of my favorite entrepreneurs and one of the smartest guys I know, Jorge Newberry. I can honestly say that whenever I have a problem, Jorge is one of the first guys I call.

He knows his stuff and he’s always got great wisdom to share. This week on Wealth Formula Podcast, Jorge updates us on the area that he knows best—the single family residential market. And…well, he sees some trouble on this horizon. Make sure to listen to why!

Jorge P. Newbery Is On A Mission To Help Americans Crushed By Unaffordable Debts.

He is CEO and Chairman of AHP Servicing LLC and American Homeowner Preservation LLC, which crowdfund the purchase of nonperforming mortgages from banks at big discounts, then share the discounts with struggling homeowners. He is also Founder and CEO of Debt Cleanse Group Legal Services, a nationwide legal plan to help consumers and small businesses get out of debt. He is also a non-attorney Partner in Activist Legal LLP, a law firm in Washington, D.C.; Founder and CEO of preREO, an online marketplace for lenders offering defaulted first mortgages secured by vacant- and tenant-occupied properties to local investors; and a Board Member of the Group Legal Services Association, which is committed to advancing access to quality legal services through legal service plans and industry collaboration.

A 2004 natural disaster triggered the financial collapse of Newbery’s former business, leaving him with $26 million in debts he could not pay. Newbery rebuilt himself through AHP, sharing what he learned from his challenges to help families at risk of foreclosure stay in their homes. In 2018, he founded Debt Cleanse Group Legal Services to assist consumers and small business owners resolve all types of unaffordable debts.

He authored Burn Zones: Playing Life’s Bad Hands; Debt Cleanse: How To Settle Your Unaffordable Debts For Pennies On The Dollar (And Not Pay Some At All); and Stories of the Indebted.

Shownotes:

Jorge talks about how Covid affected the housing market

Is there a difference in terms of what happens with the housing markets at the high end versus the middle and lower end?

Jorge talks about how an upcoming crisis happening in the mortgage space will affect rentals and apartment buildings

What is AHP Servicing?

**269: Is the IRS Going to Audit You?** Jun 20, 2021
I remember when I got out of surgical training and started my new life as an adult (at 33 years old), I was terrified by anything related to audits or legal issues.

Any time I got a letter from the IRS about anything, I broke out into cold sweats. Every time I got a letter from an attorney I would do the same—-even though most of those letters were actually advertisements.

Now, 47 years old and owner of multiple businesses and complicated financials, I don’t have visceral reactions to any of this stuff anymore.

Why? Well, when it comes to taxes, I would venture to say that any business owner making a lot of money will likely get audited eventually. After all, what is an audit?

An audit is an inspection. If you aren’t doing anything wrong, then what are you worried about? I’ve been through three tax audits now.

In all cases, I did nothing wrong. I broke no laws. The audits mostly focussed on documentation. In some cases, the documentation was not done as well as it could have and that’s what the auditor wanted to focus on.

In my experience, the tax audit process is just a *negotiation*. If you get audited, they are going to find SOMETHING no matter how ridiculous it may seem. Then you come to some kind of settlement.

The legal system in general works on these principles. That’s why I don’t really fear frivolous lawsuits anymore. Very rarely do things go to court. The dirty little secret is that whoever has the most money usually wins disputes simply by draining the opposition of financial resources that cover legal fees.

Once you realize that complexity of the real world, it’s much easier to sleep at night with audits and legal issues.

One more point. If you have good asset protection, that’s another reason not to worry about frivolous lawsuits or even legitimate personal liability. Talk to my attorney friend Doug Lodmell about that one.

But getting back to taxes, I want to emphasize that most of the tax code is gray and you need to have a quality tax professional on your side rather than a robot who just keeps telling you why “you can’t do that”.

As you know, my CPA is Tom Wheelwright and I highly recommend you consider someone on Tom’s Wealthability team. However, it’s really good to get different perspectives as well. That’s why this week’s interview with tax attorney, Stephen Moskowitz was really eye opening for me. If you make a lot of money and worry about taxes and audits, you are not going to want to miss this episode of Wealth Formula Podcast!

Steve Moskowitz knows that clients’ lives – and livelihoods – can be upended or even destroyed when tax trouble arises. As a tax attorney for more than 30 years, Steve has made it is his personal mission to help business owners and individual clients successfully resolve tax issues and go on with their lives. With extensive knowledge of tax law, a desire for swift and vigorous defense, and decades of experience with tax authorities and in the courts, he has unusually perceptive judgment in assessing the best way forward, and the right resources to achieve resolution.

Steve started Moskowitz LLP because he saw that while big corporations were consistently navigating the tax code to their advantage, smaller businesses and individuals were not. With prior experience as a CPA at a national accounting firm, and with extensive experience in the corporate world, Steve knew he could help smaller businesses and individuals by applying what he knew, and wanted to make the critical difference in businesses and individual lives that protected them from the powerful government and enabled them to keep and enjoy the fruits of a lifetime of work that otherwise could be taken away from clients by the government in just one action.

Today – together with a full team of tax attorneys, CPAs, enrolled agents and other professional staff – Moskowitz LLP helps business and individual clients across the country and overseas to resolve a wide variety of tax matters. The Moskowitz LLP team also creates strategies to utilize the tax code and relevant treaties to clients’ benefit, and provides ongoing tax support and tax return preparation.

Steve understands that clients need high quality representation but do not have unlimited budgets, and that cost predictability is important. Unlike most firms, Moskowitz LLP clients pay a flat fee and are not subject to hourly rates.

Shownotes

Cost Segregation Analysis

Should you be scared of audits?

What is the difference between being represented by a CPA and being represented by a tax attorney?

What is the discriminate income function?

**268: What is Tribevest?** Jun 13, 2021
One of the secrets to my own success as an investor has been to involve myself into a variety of tribes.

What I mean by that is that I am around other intelligent, successful people who have a wealth of experience collectively as investors.

For me, that has resulted in introductions to people with whom I have partnered over the years and who have made me money.

It is important not to underestimate the power of collective intelligence. In saying that, I must make the distinction between collective intelligence and heard mentality.

Herd mentality bias refers to the tendency of investors to follow what others are doing rather than by their own analysis.

I differentiate that with collective intelligence where a group of individuals independently analyzes opportunities and vets them together. In other words, it involves having intelligent conversations with one another and coming to collective conclusions that might be more accurate than any individual one.

A good example of this kind of tribe is our own Wealth Formula Network. This is our private community where we interact over Facebook and also do biweekly Zoom video calls.

I think about personal finance a lot in case you haven’t noticed. But I am not arrogant enough to think I know everything and I am also very open to changing my mind if people can convince me with good data. In that regard, Wealth Formula Network has been at least as valuable for me as anyone else in our group.

On a more practical level, investment groups can sometimes allow you to participate in private offerings to which you might not otherwise have access. That’s been a huge advantage for me I must say.

Finally, investment “tribes” can actually make it possible for you to invest in more opportunities with limited resources. For example, you might be interested in opportunities for which minimum investments are $100K.

If you want to invest in 7-8 opportunities in a year that’s quite a bit of money. However, using the tribe model, my guest on Wealth Formula Podcast this week has figured out an ingenious way for you to participate with less money yet maintain the broad investment exposure you want.

If you want to invest in more opportunities than you have money, you won’t want to miss today’s show with Tribevest founder, Travis Smith!

P.S. If you decide to sign up for Travis’ service with your tribe, go to TribeVest.com/wf and he will give you $50 to start. Use the code “**BUCK50”**

Tribevest CEO, Travis Smith, dreamed out loud about building generational wealth and forever altering our family’s financial trajectory. However, he’d never been introduced to ways of private investing, and wealth-building seemed out of reach. Travis and his brothers realized that they could overcome our lack of experience and know-how if we worked together.

But they had to confront the more obvious and immediate barrier — we lacked the capital required to break into wealth-building, freedom investments. By forming and funding an Investor Tribe, they unlocked a new future and the secrets of the wealthy.

Shownotes:

The primary use of Tribevest

What is the advantage of using Tribevest?

The growth of Tribevest in the past 2 years

How do you start your own Tribe?

TribeVest.com/wf and use the code “**BUCK50”**

266: Ask Buck! Q2 2021 Part 3 May 30, 2021

Lots more questions to answer on this week’s “Ask Buck”! This episode includes questions on life settlements, Wealth Formula Banking, passive income, asset protection, and more.

Listen HERE!

**265: Ask Buck & Ian!** May 23, 2021
This week’s episode features a discussion with Ian Kurth—radiologist and highly sophisticated investor. Ian is a member of Wealth Formula Network and one of its major assets.

He is doing exactly what, in my opinion, every high-paid professional ought to be doing. He has really transformed himself into a sophisticated investor and thought leader on personal finance for our demographic.

The current discussion is inspired by a 90-minute Wealth Formula Network call around how to think about bitcoin and cryptocurrencies.

It’s important to note that just a couple of years ago, Ian was a bitcoin skeptic. So you are going to want to understand how he has transformed into a very pro-bitcoin investor despite his conservative nature! Listen HERE!

P.S. Ian has also compiled a list of resources that he has found helpful in his journey to becoming crypto-competent. He has kindly permitted me to share them below:

Podcasts

https://www.theinvestorspodcast.com/bitcoin-fundamentals/page/2/ – **Recommend starting with – (#1, #3, & #5 first – links below)**

#1 – https://www.theinvestorspodcast.com/bitcoin-fundamentals/bitcoin-common-misconceptions-w-robert-breedlove/

#3 – https://www.theinvestorspodcast.com/bitcoin-fundamentals/bitcoin-a-deflationary-world-w-jeff-booth/

#5 – https://www.theinvestorspodcast.com/bitcoin-fundamentals/bitcoin-michael-saylor-a-masterclass-in-economic-calculation/

**This is an outstanding 9 podcast series.** Muscle through the sometimes amateur audio production quality. Michael Saylor is a visionary, who has overqualified background experience. – The “What is Money?” Show

The Ultimate Bitcoin 101 with Vijay Boyapati

What Bitcoin Did

Tim Ferris Show – Balaji Srinivasan

**Many, many more podcasts are available depending on which direction down the rabbit hole you choose.**

YouTube

BTC vs. Gold debate

“The Best Bitcoin Debate Ever Recorded (Anthony Pompliano vs. Mike Green)”

Michael Saylor – CNBC

Ross Stevens (NYDIG)

Articles

The Bullish Case for Bitcoin

The Case Against Bitcoin

Why Bitcoin, The Series

Norwegian Billionaire Investor Letter on Bitcoin Investment

Illuminating the Path Forward – NYDIG

Books

The Bitcoin Standard: The Decentralized Alternative to Central Banking

Inventing Bitcoin: The Technology Behind the First Truly Scarce and Decentralized Money Explained – Here is a referral code to download this book free: https://www.swanbitcoin.com/Kurthian?gc=yanbook1020&utm_campaign=yanbook1020

Bitcoin: Hard Money You Can’t F*ck With: Why bitcoin will be the next global reserve currency

Websites

Case Bitcoin. Lots of solid info/compilations of news/articles/pricing

https://www.lopp.net/bitcoin-information.html

http://billybitco.in/

https://www.keepitsimplebitcoin.com/bitcoin-security-guide/

Graphs

https://wtfhappenedin1971.com/

https://www.lookintobitcoin.com/charts/stock-to-flow-model/

https://dcabtc.com/

Corporate custodianship and legal issues

Microstrategy Corporate adoption conference

Twitter

Raoul Pal

Preston Pysh

Lyn Alden

Plan B

Willy Woo

Robert Breedlove

Greg Foss

Buying Crypto

If you decide to buy on a crypto exchange, I recommend coinbase PRO b/c it has the cheapest transaction fees. (https://www.coinbase.com/join/kurth_6)

If you want to do daily buys at a cheaper trx fee, and then auto send to a cold storage device, I use Swan Bitcoin. I like to dollar cost average on a daily basis. https://www.swanbitcoin.com/Kurthian

If you’d like to earn % interest on your bitcoin, you can explore BlockFI. You get some money for signing up.

For other digital assets that are not on Coinbase Pro, I use Crypto.com. Use code **2grceqsvjv** for $25. Voyager is decent for more exotic coins.

https://www.bitwiseinvestments.com/ is a good private equity index type option that I have used since 2017.

From a brokerage account, GBTC and ETHE are reasonable bitcoin proxy investments, particularly in qualified retirement accounts.

Dr Ian Kurth is the poster child of successful high paid professionals taking ownership of their personal financial situation. He is a neuroradiologist and he is also a member of our private community Wealth Formula Network. He’s an active participant there and in Investor Club and Physicians Wealth Formula.

LinkedIn: https://www.linkedin.com/in/ian-kurth-19836569/

264: Ask Buck! Q2 2021 Part 2 May 16, 2021

It’s time for another round of “Ask Buck”. This week’s episode includes questions on Wealth Formula Banking, cryptocurrency, taxes and multifamily real estate investments.

Listen HERE!

**263: Is Hedera the Best Long-term Alt Coin Investment Today?** May 09, 2021
If you have been ignoring distributed ledger technology, you will regret it if you don’t start paying attention.

I understand why people get suspicious of the space. The cryptocurrency ecosystem is full of scammers and hype. Talk of “lambos” and “mooning” can hardly be taken seriously by sophisticated investors.

But amidst the din, lies technology that will fundamentally transform the world. I see the current crypto market as very similar to what happened in the 90s with the dawn of the internet and related technology companies.

Yes…most of the dotcoms went out of business. There was ridiculous hype and valuations of companies that had no revenue-generating product and certainly didn’t even come close to making money.

And when the dotcom crash came, the skeptics all said, “I told you so”. Indeed, they were right about the hysteria. But if they ignored the technology completely, they also missed out on early investments into companies that would eventually become the largest companies in the world.

Recovering from the ashes of the dotcom debacle were companies like Amazon, Google, and Apple to name a few. The dotcom period of the 90s was, therefore, hardly a failure.

Cryptocurrency skeptics look at the current technology craze the same way. However, just like in the dotcom era, there will be some big winners that come out of the frenzy and will become household names. Don’t you want a chance to be part of that?… to go back in time and invest in companies like Amazon and Google in their infancy?

If so, you have to change your perspective on what’s happening now. Try to weed through the useless stuff like dogecoin and start looking at these projects like you would look at any other project in which you might invest.

Learn, at a high level, what this whole distributed world is all about and why it’s such a big deal. Then learn about individual projects. Look at them like you would any other investment. Who are the developers? What is their mission? What do they aim to do and what have they already done?

Cryptocurrency is not going away. Bitcoin is here to stay and will become a globally recognized commodity like gold someday. And while most other projects will die, others will become the fabric of a new decentralized world. As an investor, opportunities like these to be part of the new evolving economy don’t happen very often and may never happen again in our lifetime.

I recognize that and, while I have no idea who the winners and losers will be, I can tell you that Hedera (Hashgraph) is my personal pick for a company that will become a household name over the next few years. And, full disclaimer, its native token HBAR, is by far and away my biggest cryptocurrency bag.

In this episode of Wealth Formula Podcast, you will learn why I’m so bullish on Hedera as I welcome back co-founder and CEO Mance Harmon to the show. Don’t miss it!

Mance Harmon is an experienced technology executive and entrepreneur with more than 20 years of strategic leadership experience in multi-national corporations, government agencies, and high-tech startups, and is Co-founder and CEO of Hedera. His prior experience includes serving as the Head of Architecture and Labs at Ping Identity, Founder and CEO of two tech startups, the senior executive for product security at a $1.7B revenue organization, Program Manager for a very-large scale software program for the Missile Defense Agency, the Course Director for Cybersecurity at the US Air Force Academy, and research scientist in Machine Learning at Wright Laboratory. Mance received a MS in Computer Science from the University of Massachusetts and a BS in Computer Science from Mississippi State University.

262: Ask Buck! Q2 2021 May 02, 2021

It’s time for our next series of “Ask Buck” episodes. These shows have become extremely popular over the years and, if you are new to the Wealth Formula community, are particularly useful to “catch up” on recurring themes in our world.

Tune in now for the first “Ask Buck” episode of Q2!

**261: Teaching Your Kids about Money** Apr 25, 2021
I’m always fascinated by stories of entrepreneurs showing early signs of interest in the world of business as children. Warren Buffett was apparently inspired by a book he checked out from the Omaha library at the age of seven called: *One Thousand Ways to Make $1000*. He went on to pursue several childhood business ventures such as selling gum and Coca-Cola bottles and, of course, the rest is history.

Stories like these attached to big-name entrepreneurs are fun to think about. And I certainly see some of my children’s friends with unusual enthusiasm for making money at a young age. I can’t wait to see what they do in the years ahead.

However, my experience as an entrepreneur amongst entrepreneurs is that most of the time, the narrative doesn’t quite go that way for entrepreneurs.

What I have noticed is that most entrepreneurs stumbled their way into the world of business and surprised everyone around them, including themselves.

I identify as an entrepreneur who happens to be a doctor. If someone looked at my childhood trajectory, I don’t think they would guess that I would end up doing what I did.

For one, I was a good student who fit well into the professional tract. The only question that someone might have had about me during high school or college is whether I would end up in law school, business school, or medical school like I actually did. The idea of entrepreneurship never crossed my mind. I was trying to figure out what kind of *job* that I wanted.

It wasn’t until accidentally stumbling upon Robert Kiyosaki’s Cash Flow Quadrant that the idea of entrepreneurship ever crossed my mind. And boy did it…like a bolt of lightning. And while I don’t agree with everything Robert says, I do owe him a debt of gratitude that, apart from my parents who brought me into this world, I owe no one.

Now once you are in the entrepreneurial mindset, you can see opportunities everywhere. Not surprisingly, therefore, most entrepreneurs do what I did. They learn a business from somewhere that they are working and have that moment of clarity when they think to themselves: “I don’t have to work for this guy. I’m doing all the work. I can make more money on my own”

This, I guarantee you, is the number one on-ramp to entrepreneurship.

Now, the interesting thing is that the type of business an individual typically pursues is often dumb luck. Let me give you a couple of examples to illustrate my point.

One of my buddies has a tile company that supplies a bunch of major retailers like home depot. He does pretty well for himself. He makes a half million dollars a year and lives comfortably in a great place to live. This is a big deal considering the fact that he came from nothing. His story? Well, you guessed it. He worked for a tile guy who gave him all the responsibility while he played golf. My friend learned the business and started his own shop.

Now another guy I know had a similar story. Except in his case, his job involved energy arbitrage. The company he worked for bought energy from countries where costs were less and sold it to countries where it was more expensive. Of course, that brokering came with a nice little commission on the trade—meaning millions of dollars per transaction.

Well, one day this guy looked at his coworker and said, “You know, we could do this by ourselves.”. And that’s how he ended an entrepreneur. However, lucky for him, his job gave him the inside knowledge to execute a business that was quite a bit more lucrative than tiles or medicine. He didn’t work harder than the rest of us and I don’t think he was any smarter. He was just in the right place at the right time with the right mindset.

When I think about these guys and myself, I can’t help but think how random fortunes can be. I also think to myself whether there is a way to systematize this seemingly arbitrary reality of fate so that we can better guide our children.

Based on what I’ve seen, the advice I have for any young person looking to find their way or their jackpot is to get as much exposure to life as possible.

College teaches you some things, but it might be best as a resource for the people you meet. College graduates should look at their first few jobs after school as paid education. Furthermore, they should be quick to find other employment once they learn the skills available at that position.

Not everyone aspires to be filthy rich, but anyone who has an interest in entrepreneurship should make sure that the business that they are going to rip off and make their own be lucrative. After all, working hard has very little correlation with being rich.

I have three little girls-the oldest is only 12. Given my own interest in entrepreneurship and investing, people often ask me what I’m doing to provide them a financial education.

Sure, we talk about money once in a while. I explain taxes to them by taking away half their ice cream..that kind of thing. But I think the best thing I can do for them right now is to simply encourage them to learn as much about different things as possible.

After all, whether it’s solving a problem and turning into a business as most entrepreneurs do or finding the best investments, it all comes down to having exposure to as many possibilities as possible.

Speaking of children, this week’s episode of Wealth Formula Podcast will be a little bit different. In the spirit of trying to figure out how to educate our own children, I interview an 18 year old self-proclaimed entrepreneur and investor.

If you have you have kids, make sure to tune in. It may give you some ideas of how to approach your own duty as a parent to guide your children’s financial literacy.

Jack Rosenthal is a 18 year-old entrepreneur and investor. He is the founder of one of the largest teen-only investment organizations in the world with close to 100 members and over $115,000 in assets. He has been featured in several news and television programs.

Shownotes:

How Jack became an entrepreneur and investor

How do parents get their kids interested in financial education?

What kinds of online education does Jack use to educate himself?

Jack’s personal investing philosophy.

Books: Teen Investing and Teen Entrepreneurship

**260: Does Crypto Have a Role in Real Estate?** Apr 18, 2021
In case you didn’t notice, we are in the middle of a massive cryptocurrency bull market. We haven’t been here since 2017 and who knows how long it will last. For those of you with solid positions, enjoy the run but don’t get greedy!

I certainly learned my share of lessons from the last cryptocurrency bull run. I could have come away from it with a lot more money than I did if I had done things differently.

However, like anything in life, investing is about learning from your mistakes and trying not to repeat them. Let me give you an example of one of the lessons I learned.

In 2017 I invested in an initial coin (ICO) offering on a project that I liked. ICO’s were all the rage back then but have since been banned by the SEC in the United States.

I invested $50,000 into that project. One day the guy who told me about the project in the first place shot me a text that read “you must be happy you bought into that ICO!”

Indeed, when I looked up the price of the token, my $50,000 was worth $4 million! Now there are times to buy and hold, but this was not one of them. That kind of profit on a token that really represented an idea more than anything else was a sell for sure in my humble opinion.

The problem was that I *couldn’t* sell. You see, first of all, the only platform where the token was trading was not open to Americans. My friend who texted me is Canadian so he didn’t have that problem.

So, for several months, I watched handcuffed as the euphoria around the project drained out. By the time it was on a platform where I could *theoretically* trade it, it was worth $500K.

That was still 10X so nothing to scoff at. But then I ran into another problem. There was virtually no liquidity on the platform where I could trade it. In other words, the token I had may have been theoretically worth something, but there weren’t any buyers.

By the time the token was on sizable trading platforms available to Americans and had some liquidity, crypto winter was upon us. Soon, my $50K that was worth $4 million was worth only $20K.

What a miserable story right? You’re right but I can’t say I ever let it bother me that much. This kind of stuff happens once in a while when you are an active investor or trader. The key is to learn something and don’t repeat the mistake again.

For those of you who are holding on to significant profits in alternative coins right now, make sure you can sell them if you want to. You might even consider very slowly moving out of the token into something traded on Coinbase where everything is liquid.

Anyway, I thought I’d share that story with you for you to learn from my experience. Crypto is the wild west still, despite tons of added regulation. Have fun and try not to lose money. In frenzies like this, that is very easy to do.

Speaking of frenzies, beware of charlatans in times like these. Just like last bull run, you are going to see a lot of unnecessary tokenization and random companies adding the word blockchain to what they do in order to create a buzz.

Here’s a case study: an iced tea company called Long Island Iced Tea. The company made beverages from 2015-2017. But suddenly, in December of 2017 at the peak of the crypto market, the company changed its name to Long Blockchain Corp. (LBCC). The company never really made its mark in anything related to blockchain and, in a press release stated, “there can be no assurance that the company will be successful in developing blockchain technology, or in profitably commercializing it, if developed.”

In other words—they were just using the name to pump the stock price. And sure enough, the share price increased by 500 percent!

The moral of the story is that in times like these, it is important as ever to ask questions. Yes, I do believe blockchain and, more broadly, distributed ledger technology is the biggest technology advance since the internet. But make sure when you hear people using crypto terminology actually have a real purpose for it other than marketing.

There certainly are some potential use cases. My guest on this week’s Wealth Formula Podcast, for example, wants to securitize real estate ownership via security tokens. Does it make sense to do so? Well, listen to this interview and decide for yourself!

Jason Ricks, CCIM, is chief operating officer of Liberty Real Estate Fund, the world’s first net lease security token fund. He is a native Texan, real estate investment expert, and security token pioneer. Mr. Ricks is a principal with Concordia Equity Partners, LLC, and was vice president at AMLI Residential (Morgan Stanley), an $11 Billion+ private REIT; BH Properties and Tarantino Properties. He is also a published author and has been featured on real estate and investing podcasts.

Shownotes:

What would be the benefit of a single-tenant property within an investment portfolio?

What are Net Leases

Why would you choose to invest in a fund if you can just afford to go out and buy some triple net real estate?

How the security token works

libertyfund.io

**259: Should You Invest in Wine?** Apr 11, 2021
What gives something value?

Gold has been considered valuable since ancient civilization. It has been used as money, as a store of value, and as jewelry. Gold is also scarce and it is not easy to mine.

But…at the end of the day, gold is valuable because of a social construct that says it is and that it will continue to be going forward. The longevity of gold’s claim to value certainly adds to its standing as a valuable asset.

Gold bugs who disparage bitcoin often point to the relative newness of the asset and its lack of track record over time.

However, if we are going to give so much inherent value to the variable of time, it might be reasonable to consider other assets that have been considered valuable for a long time.

We have almost certainly been eating and drinking for longer than we have been hoarding precious metals. That’s why we value rare foods the way we do. The European white truffle is a good example.

They grow underground and need to be sniffed out by special dogs and pigs! They cannot be commercially cultivated.

How much are people willing to pay for rare food? Well, in 2017, a two-pound specimen sold for $61,250. I love truffles but really?

Anyway, I guess it doesn’t matter whether you or I would spend that kind of money on a mushroom. Someone will and that’s why European White truffles are so darn expensive.

That brings us to something else that we know can get pretty pricey quickly—wine. I like wine but am certainly no connoisseur. I pretty much put wine in two categories—wine I like and wine I don’t like. I know a little bit more about bourbon.

Of course, buying and selling fancy wine has been, for the most part, for the wealthy. However, as we have seen recently in assets such as art and rare cars, technology is allowing for the democratization of many of the investments that were simply too expensive for most to participate in.

Vinovest is doing just that for investment quality wine. So whether you’re an investor or you just like drinking this stuff, you are going to want to tune in to my interview with Vinovest founder, Anthony Zhang, on this week’s Wealth Formula Podcast.

Anthony is a repeat entrepreneur who has previously founded and sold two companies, EnvoyNow and KnowYourVC. He has also held leadership positions at Blockfolio and is a board member at RateMyInvestor.

Shownotes:

Anthony tells us how he became an entrepreneur

Anthony talks about how his past injury affected his entrepreneurial spirit

Why invest in fine wine now?

How does Anthony’s team identify investment-grade wine?

Is Vinovest open to non-accredited investors?

The Vinovest warehouses

How to manage your wine investments through Vinovest

What about investing in whiskey?

vinovest.co

**258: What’s Next for the US Economy? Boom or Bust?** Apr 04, 2021
The alternative investing podcast ecosystem is full of doom and gloom. It’s always that way. Any time we get out of a recession and the economy gets a little hot, everyone’s calling for the zombie apocalypse. They tell you to prepare for the worst because the zombies are coming. Start growing your own food and buy lots of precious metals. Because, of course, silver coins are the currency of choice for zombies.

Eventually, the natural cycles do their thing and the economy does go south. That’s when the doom and gloomers do their end-zone dance and tell you that they had predicted the down-turn the whole time. They are right. After all, even a broken clock is right twice a day.

Now let me be clear. I understand that we live in unprecedented times of sovereign debt, record low interest rates, and the Federal Reserve is printing money at unparalleled levels. Oh yeah—and we have a hell of a demographic cliff coming up next decade.

But… if you listened to the doom and gloom crowd for the last 6 years, you missed out on a lot of opportunities to make money. Case in point: our investor club partner Western Wealth Capital has been around for about 6-7 years. Over the last 6 years, one investor turned $750K of invested capital into over $4 million! Now compare that to how far gold has come since 2015.

Yeah…no thanks.

The reality is that the economy is dynamic and you have to make money when you can. If you’re worried about a depression happening 10 years from now and stop making good investments today, you probably will not fare as well as someone who is actively growing their wealth right now. Building wealth creates resilience. Fear does not.

But listen…if you listen to a lot of podcasts, I don’t blame you for stashing gold under your bed. There’s a lot of opportunistic financial forecasters out there telling you that the world is coming to an end…again.

You know what I would love to see? I would love to see all economists, especially those who shill gold, provide a scorecard on their financial forecasts. My guess is that in most cases, those who predicted the last two recessions, would also be the ones who predicted 5 more recessions that didn’t happen in between.

If you’re good at predicting the future, show us your track record, right? Well, as it turns out, there is one group of economists who have been keeping score since the mid 1940’s and have predicted economic events with 97 percent accuracy since that time. Not surprisingly, they predict both good times and bad. That’s the way the real world works! The firm is called ITR economics and I listen closely to everything they have to say. Maybe you should too.

You can get started by listening to this week’s Wealth Formula Podcast where I interview ITR economist, Taylor St. Germain. Learn about the pandemic economy and what’s on the horizon over the next decade. Don’t miss this show!

As an economic analyst, Taylor St. Germain provides consulting services for small businesses, trade associations, and Fortune 500 companies across a spectrum of industries. His dynamic personality and extensive knowledge of economic trends and their business relevance are highly valued by clients and colleagues alike.

Taylor is a member of ITR’s Dallas team and specializes in forecasting at both the market and company levels. With his depth of experience, Taylor is a key contributor to ITR Economics’ forecast accuracy rating of 94.7%.

Shownotes:

Why did the market continue to do so well when profits don’t support the valuations?

How is a depression different from a recession?

What makes the ITR approach to economics unique?

http://itreconomics.com/

**257: Do You Have the Pandemic Blues?** Mar 28, 2021
*“Everyone has a plan until they get punched in the mouth.”*

*-Mike Tyson*

Life is full of surprises…both good and bad. The last 12 months were, to say the least, unexpected.

Everyone has a different story. Hundreds of thousands of people died from Covid-19 and left even more people behind to mourn their loss.

Businesses closed, people lost jobs and some experienced poverty for the first time. Marriages came to abrupt ends and kids couldn’t go to school.

But the funny thing is that, for those of us who survived, we seem to be doing ok. Human beings are incredibly resilient. And, as it turns out, can adapt to pretty much anything over time.

I often talk about a certain kind of “wealth thermostat” that keeps people in a certain range of wealth. If you are a $100K person you will somehow find a way to make $100K per year but you won’t make a million. If you are a $1 million per year person, you will find a way to make that amount etc. Unless you figure out how to reset your financial thermostat, you are kind of stuck where you are.

As it turns out, there is also a “happiness thermostat”. Most people think that more money will make them happier. But studies recently done suggest that’s only true until you hit about $75K per year. If you can afford food and a roof over your head, you’ve covered the essentials to get to your baseline happiness.

Lottery winners, as it turns out, aren’t any happier than most people. The initial thrill of making a lot of money and being able to buy stuff seems to get old pretty quickly. In fact, studies show that they tend to rate the pleasure of mundane events of everyday life lower than others.

On the other hand, people who get paralyzed in accidents don’t seem to be any less happy than the general population after an initial period of mourning.

The moral of the story is that we tend to get accustomed to pretty much anything in life that punches us in the face or gets handed to us on a silver platter. Happiness, it seems, exists outside of objective life circumstances. No matter what happens, we tend to drift back to where our happiness thermostats are set.

How do we turn up the temperature on happiness in our lives? I wish I could answer that. In fact, a lot of people are trying to answer that question. The topic has spawned an entirely unique body of research which is called positive psychology.

Joel Wade is an expert in positive psychology and he is my guest on Wealth Formula Podcast this week!

Don’t miss this interview. Listen NOW.

Joel F. Wade, Ph.D. is Marriage and Family Therapist and Life Coach, and the author of The Virtue of Happiness, Mastering Happiness, The San People of the Kalahari, and an in-depth online course: A Master’s Course in Happiness, drawing from the increasingly useful research in psychology in general, and positive psychology in particular; and his nearly four decades of working with people professionally. He has written regularly for a variety of publications, including The New Individualist and The Good Men Project; and the Beyond Wealth columns for the Oxford Club. He’s also a world class athlete, having won multiple national and world championships in water polo.

Dr. Wade enjoys teaching clear, practical skills and ideas that can be used immediately, inspiring his readers and listeners to take effective steps toward a more rewarding, joyful, and resilient life. As a Life Coach he works with people around the world via phone and Skype, and can be found at drjoelwade.com.

Shownotes:

How has the pandemic affected the socialization and psychological development of children?

How people are going to adjust to normal life again after Covid?

ome things that can provide temporary boosts in mood

How does Positive Psychology work?

**256: What You MUST Know about Bitcoin!** Mar 21, 2021
Value is a social construct. Things have value because we, as a society, agree that they are valuable.

That is the only reason that gold has the value that it does. Yes, it has unique metallic qualities and it is scarce, but there is no intrinsic quality that gives it the value it has in society. We have collectively assigned that value to it. And to be clear, this is not intended to be a knock on gold or gold bugs. I am well aware of the value gold has kept since ancient civilization dating back from the Egyptians to the Inca. Longevity certainly matters.

I am simply stating what I consider to be an obvious fact—monetary value is not intrinsic to any commodity. Yet, the perception of value in society serves an important function for accounting purposes. But why must we concede value only to ancient stuff? In a technological society like we have today, does it make sense to look only to the past for inefficient stores of value?

I don’t think so. That’s one of the reasons why I believe that bitcoin will ultimately serve a similar role in society as gold.

Bitcoin is finite, deflationary and you can’t confiscate it. You can cross borders with billions of dollars by simply memorizing a series of numbers and letters. Robert Kiyosaki calls gold “God’s money” and bitcoin “The people’s money”. That metaphor is *golden*!

I began talking about bitcoin on Wealth Formula Podcast three years ago. Many of you got it then and took action. Some of you even made millions of dollars because of that introduction to cryptocurrency. To you I say…you’re welcome!

For those of you who still don’t understand the significance of bitcoin, it’s time to wake up. Bitcoin is here to stay and it will become increasingly mainstream over the next few years. Even if you don’t have the appetite to buy bitcoin now you owe it to yourself to try and understand this phenomenon.

This week’s episode of Wealth Formula Podcast is critical for you to understand the future of money. My guest, Samson Mow, is recognized as one of the most influential bitcoin visionaries in the world and there is no one better to explain the past, present and future of this asset.

Listen NOW!

Samson Mow is Blockstream’s CSO and Pixelmatic’s CEO. Blockstream is the leading provider of blockchain technologies, on the forefront of work in cryptography and distributed systems. Samson founded Pixelmatic in 2011 to creating engaging games that are truly social and encourage new connections to be made.

Previously at BTCC, one of the largest bitcoin exchanges and mining pools in the world, Samson’s role as COO was to oversee the day-to-day operations of the company and directly manage the exchange and mining pool business units. Previously, Samson was a director of production and executive producer at Ubisoft, where he spearheaded expansion into Asian markets for web, social, and mobile games. Samson oversaw ongoing development and live operations of the cross-platform (web and iOS) MMO strategy game “Might & Magic: Heroes Kingdoms” in Asia, along with the social games “Castle & Co” (Facebook, mixi, Naver) and “The Smurfs & Co” (Facebook, mixi). “The Smurfs & Co” is Ubisoft’s most successful social game to date, reaching over 10 million users through organic growth. Prior to Ubisoft, Samson was in charge of business development and operations at Sitemasher, a Vancouver based startup developing a SaaS platform for building websites and apps. Sitemasher was the winner of the 2008 Blue Sky Innovation Excellence Award from Microsoft and was later acquired by Salesforce.com for US$20 million and rebranded as Site.com.

Samson holds a Bachelor of Business Administration degree from Simon Fraser University in Canada. As a veteran of the game industry, Samson regularly features as a speaker and panelist in conferences such as GDC and CGDC.

Shownotes:

How Samson got into bitcoin

What is bitcoin?

Is bitcoin a store of value or is it a currency?

The biggest challenge for bitcoin

**255: Are the 20s about to Roar?** Mar 14, 2021
I am not an economist but I do recognize the importance of understanding a little bit of macroeconomics to guide me as an investor. After all, financial markets don’t move in a vacuum. They are affected by all sorts of things including monetary and fiscal policy.

As a reminder, monetary policy is dictated by the Federal Reserve. Essentially, they have two powers that they can wield to impact the financial system. One is the power to set interest rates at which the banks trade with one another—the so-called “Fed Funds Rate.” The other is the ability to print money and buy bonds—aka quantitative easing.

Right now this monetary policy is as loose as it can be. With historically low interest rates and quantitative easing cranking away, the Fed is doing what it can to steer us out into a post-pandemic economy.

While the Fed does its thing, the US Government and Treasury are responsible for fiscal policy—aka government spending. Obviously, that is also hard at work right now as demonstrated by the recent $1.9 trillion stimulus package.

Simultaneously, household savings rates are high and there is enormous pent-up demand for spending that will presumably be unleashed late this summer and into the rest of the year as Covid-19 herd immunity becomes reality through vaccination efforts.

All of the ingredients are there for an economic boom like we haven’t seen in decades. The economy could really heat up and we could see some inflation.

Historically the response of the Federal Reserve to a hot economy is to put on the brakes so that inflation does not get out of control. Raising interest rates and not printing money would be the steps that you might expect. But this time, it may be different.

The Fed has changed its policy. In the past, the Fed has used a target inflation rate of 2 percent as a major indicator of when it needs to raise rates. But now the policy is to allow rates to overshoot 2 percent and to focus more on the *average* rate of inflation. In other words, if the economy heats up, they will let it boil!

Low interest rates are critical to keep asset prices inflated. One of the misconceptions that people have is that the Fed Funds rate is the primary indicator for long-term loans like mortgages. That’s actually not the case.

Long-term mortgages are more correlated with the bond market—specifically the 10 year treasury. The bond market is complicated and I won’t pretend to completely understand it myself. However, for simplicity just know that as the 10 year treasury rises, so will interest rates for your asset-based loans. Assets will sell off if the 10 year treasury spikes and that’s what happened recently. That’s why there was a huge sell-off in Tesla stock presumably.

The 10 year treasury will naturally go up if the markets expect inflation. So if that’s the case and the Fed wants to keep rates under control, what can it do? Well, remember quantitative easing is where the Fed creates money out of nothing. When it prints that money, it buys bonds like the 10 year treasury.

If the Fed continues to buy treasuries, it can control the supply and demand and artificially suppress the yield on those bonds. That’s what it’s doing and what it plans on doing more of in the near future.

So, the take-away I have from this news is that inflation is coming so don’t sit on cash. That’s a sure fire way of losing money as it loses value over time. I also interpret this as “go time”. The economy is about to boom and I, for one, will position myself in the assets that will benefit from this explosion. Finally, expect this boom to last. The Fed and the Treasury are going to let the fireworks go on for a little bit longer than they normally do.

That’s it for my macroeconomic warm-up for the week. Now you are ready to listen to an economist talk about these issues and a lot more in this week’s Wealth Formula Podcast. Listen NOW!

P.S. My 11 year old daughter just released a song called “Worst Year Ever” that is available on all the streaming services such as Spotify and Itunes. She used the name Camilla Sabine (her middle name) in case you want to search for it.

You can also check it out on Youtube at the following link: https://youtu.be/wUH_AN5kLGM

I bet your kids will love it!

Richard Duncan is the author of three books on the global economic crisis. The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005), predicted the global economic disaster that began in 2008 with extraordinary accuracy. It was an international bestseller. His second book was The Corruption of Capitalism: A strategy to rebalance the global economy and restore sustainable growth. It was published by CLSA Books in December 2009. His latest book is The New Depression: The Breakdown Of The Paper Money Economy (John Wiley & Sons, 2012).

Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. He also worked as a consultant for the IMF in Thailand during the Asia Crisis.

Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television, as well as on BBC World Service Radio. He has published articles in The Financial Times, The Far East Economic Review, FinanceAsia and CFO Asia. He is also a well-known speaker whose audiences have included The World Economic Forum’s East Asia Economic Summit in Singapore, The EuroFinance Conference in Copenhagen, The Chief Financial Officers’ Roundtable in Shanghai, and The World Knowledge Forum in Seoul.

Richard studied literature and economics at Vanderbilt University (1983) and international finance at Babson College (1986); and, between the two, spent a year travelling around the world as a backpacker.

Shownotes:

Is the worst of the economic fallout from this pandemic behind us?

Why would a spike in yields in the bond market cause a sell-off in the stock market?

The concept of bank reserves as it relates to liquidity.

Richard talks about Macro Watch

**254: What Just Happened and What Next?** Mar 07, 2021
Life is not long enough to take advantage of the wisdom that comes with age. It’s really kind of a cruel joke of nature if you think about it. You get smarter as the rest of your body becomes less functional and closer to death.

This phenomenon really needs to be experienced in order to be believed. I recall listening to a young syndicator recently telling me that experience is over-rated. That’s easy to think when you are, indeed, young and inexperienced.

Experience does matter because, although history may not repeat itself, it most certainly rhymes. When you’ve been through a cycle or two you do have a little bit more insight compared to one who has not.

Luckily for me, I’m not that old yet. However, I am in my late 40s and I am seeing patterns in the economy and investing that my younger peers are not. In fact, seeing these patterns come to fruition has made me realize how important it is to learn more history in order to compensate for the things that I have not yet seen.

This unique type of intelligence we gain over time is what is called wisdom. Again, It’s really hard to appreciate when you are young. I still remember my father telling me things when I was a teenager that I blew off as nonsense that I realized later in life were profoundly true.

These days, when someone has been around longer than me and has wisdom to share, I listen. Wisdom is priceless and I, for one, cannot get enough of it.

My friend Russell Gray doesn’t look that old but boy does he have a lot of history to share and I always learn something from him.

Hopefully you will too on this week’s episode of Wealth Formula Podcast as I get a chance to reflect on the events of 2020 with Russ and contemplate on what happens next!

Russell Gray is Robert’s sidekick on The Real Estate Guys™ Radio and TV Shows. Russ is a financial strategist with a background in financial services dating back to 1986. As a faculty member for the California Association of Realtors, Russ taught Real Estate Finance to Realtors® pursuing the prestigious GRI designation. He is a popular speaker and author.

Shownotes:

Russ talks about some of the things that surprised him over the past year.

What is Stagflation?

The best thing to do is to invest in hard assets as much as possible.

Russ talks about how real estate is a hedge against inflation.

253: ASK BUCK 3/21 Feb 28, 2021

It’s time for another episode of “Ask Buck”!

This week, we field questions on the economy—inflation or deflation, interest rates, and cap rates. We also touch on two sides of the same concept—owning permanent life insurance either your own policy or one that you buy from someone else!

Make sure you tune in!

**252: What is the Best Risk-Adjusted Investment Today?** Feb 21, 2021
Investing is hard. It’s hard because you have to know what you are doing. But it’s also hard because you have to be tough psychologically and sometimes do things that seem counterintuitive to your own emotions.

Believe me, I’m not immune to psychological miscues. At one point, I owned about 100 bitcoin. But, during *crypto winter*, I needed some liquidity for another investment and sold most of it off for about a tenth of what it is worth today.

I could have easily bought that bitcoin back a few months later but I didn’t. *Crypto winter* took my mind off of what was obviously on sale. I KNEW that it was going to go back up. In fact, I just won a bet with someone from a year ago that Bitcoin would hit 50K by the end of 2021. So why didn’t I listen to my own advice and buy more? Fear.

Fear is a tricky thing and the major driver of investors losing money. And I’m not just talking about fear of investing when something is getting crushed like bitcoin was. I’m also talking about the opposite spectrum—the old FEAR OF MISSING OUT (FOMO) thing.

FOMO is complicated. There is a cryptocurrency called Dogecoin. It recently skyrocketed. The problem is that there is nothing really behind Dogecoin. It’s not a storage of value like bitcoin and it isn’t a project like Ethereum that is used for creating software. It’s kind of a joke and most people in crypto know it’s a joke. Yet, people have been buying it because it’s gone up so much in price. That’s BAD FOMO. Because eventually, Dogecoin will go to zero. It’s purely a game of magical crypto chairs at this point.

Another scenario that often kills investors is the feeling that something has gotten too expensive despite the clear vision that it is not. What is behind that? Well, on May 16th, 1997 Amazon stock was at $1.73. Then, one year later it was over $7. If you were paying attention at that time, you might have thought that the opportunity to make money on Amazon stock was gone. The 700% percent appreciation in just one year just couldn’t continue so why waste your money?

Today, as I write this, amazon stock is sitting at $3278. People who understood the potential of amazon early on did very well and never sold even when the stock 10X’d over and over. For those of us who, unfortunately, did not get on the Amazon bus, we look at the price of that stock today and think—“man, that’s pretty expensive. I’m not buying that”.

In my case, I’m not going to buy it because I just don’t know enough about the potential upward trajectory of that company and stock at this point. It’s just not smart for me to jump on the bandwagon now—that would be “bad FOMO” even if the stock keeps going up.

I still believe that outside of some speculative plays that you should invest in things you understand. For me, what I understand best is multifamily real estate. People have made a lot of money in multifamily real estate for a very long time. And, in the past two decades, no market has had more winners than Dallas. The question is whether or not that trend continues.

For me, it’s an obvious yes! I will continue to invest heavily in working-class apartment buildings in Dallas for the foreseeable future even though it is more expensive today than it was five years ago. Like Amazon in the year 2000, Dallas is more expensive today than it was then. However, as a guy who understands what drives prices in real estate, I can see the clear path to continued growth in this market and resultant increase in asset values. **To me, working-class apartment buildings in Dallas operated by competent hands is the single best risk-adjusted investment in the world.**

So, looking past a week of terrible weather out there, this week’s podcast features an interview with one of my business partners Dante Andrade who knows more about the DFW market than anyone else I know. Make sure to tune in and see for yourself why I am so bullish on Dallas for this decade!

Dante Andrade is a man of many multifamily real estate hats. He is a buyer’s broker in Dallas, meaning that he is dedicated to the buyer side of acquisition of large multifamily real estate. He’s been involved in just under a billion dollars worth of transactions, focusing again specifically in the Dallas/Fort Worth market. He’s also a real estate coach and mentor and finally, and probably most importantly, he is my partner in our group called Touro Asset Management Group.

Shownotes:

How challenging is it to leave emotions out of business and investing?

Is it a good time to buy affordable housing in Dallas?

If you are looking at real estate in the next decade and you’re not paying attention to Dallas then you are missing the boat.

**251: Should You Acquire a Business?** Feb 14, 2021
A few weeks ago I had my CPA, Tom Wheelwright, on the show to discuss what’s going to happen with taxes in the next year or two under the new administration.

Of course, the news was generally bad for high-income earners. Taxes will invariably go up. The idea is that the rich can afford it and they ought to pay their “fair share”.

It drives me crazy when I hear people say that—after all, what’s fair? Is paying more than half of your income to the government fair? If you live in California you are already doing that. Anyway, let me get off that rant before it takes me into a sea of digression.

Let’s focus instead on who is going to be hit the hardest. Is it really the rich who are going to get hit the hardest with the tax hikes? I guess that depends on how you define rich.

The truth is that the true rich are not going to see their tax liability change by very much. Apart from professional athletes, the true rich are not W2 wage earners. It is the high paid W2 wage earners who will be hit the hardest with new tax laws.

Business owners and investors, those on the right side of Kiyosaki’s cash flow quadrant will likely, net-net, come out even. For all the tax hikes we will see, there will be just as many opportunities for tax mitigation through investments into the things that the government wants to promote. The tax code is, after all, just a series of incentives for investors to take advantage of. That’s why I suspect that for most truly rich people, tax law changes will not make a material change in terms of effective tax rates.

If it seems unfair—well, it kind of is. You see, the government sees business owners and investors as vehicles for driving the economy. They produce the goods and services and fund economic growth through investments. Conversely, W2 wage earners are treated as fat cats that do little to contribute to GDP growth. Hard-working professionals may disagree with this assessment but that’s the way the tax law is written and it is what future tax laws will be based on.

So, what can you do about it? Well, as Tom Wheelwright says, “If you want to change your tax, you have to change your facts.” From the perspective of decreasing your tax liability, that means shifting more of your resources over to the right side of Robert Kiyosaki’s Cash Flow Quadrant—the world of business ownership and investing.

If you are in our Accredited Investor Club, then you already know about the power of depreciation that comes along with investing in real estate. For most, shifting increasing amounts of financial resources into the investor quadrant is the smartest thing to do.

However, speaking from personal experience, if you are able to get involved with the business owning quadrant, you can really open up a whole new world of possibilities such as higher levels of passive income and the ability to take deductions that simply are not available to you in any other way.

The challenge is that business ownership is not that easy. In the vast majority of cases, business ownership is not passive. However, the financial rewards of business ownership can be dramatic and worth your time.

The challenge again is that not everyone is cut out for business ownership and you need to think very seriously about it before you take the plunge.

Then you need to figure out how you are going to do it. I’m probably a little different than most in that I feel most comfortable starting businesses from scratch. I have done it multiple times. While there certainly is a good chance of failing, the expenses incurred are often far less than other options.

The other way to get into business is through acquisition. We have discussed franchising on previous shows and it certainly has its associated advantages and disadvantages. Another option is simply to acquire a free-standing small business.

Admittedly this is not something with which I am terribly comfortable. Furthermore, this is not an area that I can point to someone as a trusted advisor. I am as clueless as anyone else in this world.

So, when Carl Allen’s team reached out to me to get him on the show I was happy to do it. Carl’s business revolves around business acquisition. This week’s Wealth Formula Podcast features a conversation I had with him to learn the basics.

So, if you are interested in significantly changing your facts and taking the plunge into entrepreneurship by acquiring a business, make sure to tune in to this week’s show!

Carl Allen is the editor of Dealmaker Wealth Society. Carl is an entrepreneur, investor and corporate dealmaker with almost three decades of experience. Carl has worked on transactions worth over $48 billion, which includes over 330 acquisitions and sales. For almost three decades, Carl has analyzed thousands of businesses, big and small, in 17 different countries and across nearly every business sector.

Carl’s reputation as an investor and corporate dealmaker has led him to advise some of the world’s largest corporations on investments, acquisitions, disposals and restructuring. Carl has also assisted hundreds of business owners in raising both equity and debt finance.

Carl shares his wisdom and experience through the Confessions of a Dealmaker newsletter and through his course training on buying a business without using any personal capital.

Shownotes:

Buying a business vs. starting your own business.

If you want to buy a business in an area that you know nothing about, it’s suicide.

Dealmaker Wealth society.

**250: Infinite Fleet! An Asymmetric Risk Play?** Feb 07, 2021
Nassim Taleb, author of the Black Swan, extrapolates his theories on unpredictable events by suggesting that perhaps the ideal way to allocate your capital is by focusing on the extremes. He says that perhaps the ideal portfolio is one where there is extreme safety on the one hand—US Treasuries for example—and extreme risk and upside on the other.

The idea is that you put the money you absolutely need away in a place that is as close to impenetrable as it gets. The other portion of your portfolio would go only to extremely risky but also potentially extremely profitable bets. In doing so, he postulates that you might end up with the ideal portfolio.

I’m not sure I agree completely with Taleb on this. As we have seen for decades in real estate, when done right, we can pretty consistently achieve double-digit annualized returns. Treasuries would leave your yield below inflation which guarantees you lose money.

However, I am increasingly interested in the notion that those who can afford it ought to consider upping the riskier part of their portfolio. We have typically referred to that risker part as an asymmetric risk portfolio. This might include your digital currencies, investments in start-ups and other types of investments where your upside is very high and your downside is pretty much unlimited as well. My opinion on this has been that these kinds of investments should be limited to 5-10 percent of one’s portfolio. But it occurs to me that this allocation percentage is somewhat arbitrary.

That is to say, if you make more money, does it potentially make sense to increase the amount you allocate to asymmetric risk? If you make $500K per year you might not want to put $100K into high risk high reward stuff. But what if you make $5 million per year? Would you be crazy to allocate $1 million to asymmetric risk of various kinds? Not necessarily.

I’m not advocating this by any means. I would say that a lot depends on what your goals in life are. Personally, I know that I can use real estate to grow my money at a pretty good annualized clip—I figure conservatively around 18-20 percent all in for my investments. Over time, that’s a pretty nice pile of money.

But it probably isn’t going to make me a billionaire. If I want to add more zeros to my net worth, I have to take more risks. As Tampa Bay Buccaneers coach Bruce Arians says, “No risk it, no biscuit”. If you want to change your life’s trajectory and add more zeros to that net worth, you have to make sure you are giving yourself the chance to do it.

Increased risk, however, does not mean that you are any less thoughtful of your allocations. Private investing always starts with the same principle regardless if it is real estate or venture capital—an evaluation of the people involved. At the end of the day, it is the people more than the asset that makes you money. Obviously this is the case even more when it comes to start-up businesses.

On this week’s Wealth Formula Podcast, I am featuring a company that I have introduced to you before in webinars. The company is Pixelmatic, which is by no means a start-up. However, the game they are creating is brand spanking new and has an impressive team behind it.

Tune in to this week’s podcast to learn all about the gaming world and how you, if you are an accredited investor, can get involved with a compelling asymmetric risk opportunity!

Chris is originally from Blackpool, U.K. and has been living and working in Shanghai, and Jiangsu since 2011. Chris is currently the COO at Pixelmatic overseeing the day-to-day operations of the business and spearheading the production of Infinite Fleet, an ambitious triple-A MMORTS video game.

Chris began work as a TEFL teacher at a multinational training centre in Shanghai and rose through the organisation to operations director at a centre in Zhangjiagang. Later, Chris co-founded a training centre with the CEO Shane English Schools China, giving him valuable insight into business startup in China.

Chris pivoted to the video game industry in 2016 as it is his passion.

249: Ask Buck 2/21! Jan 31, 2021

It’s been nearly 5 weeks since my Covid diagnosis. The good news is that my brain seems to be back. The bad news is, I still feel about 40 years older than I am.

That said, at least the trajectory is in the right direction. And, as many well-meaning people have reminded me as of late, I’m not exactly a spring chicken anymore.

Thanks again for all those who sent me well wishes throughout this time. It has been great to have so many people actually caring about my well-being!

With my neurons finally firing normally again I thought I would take the opportunity to finish up the questions that we had remaining from Q4 and do an “Ask Buck” episode. Keep those questions coming as it’s always great to interact with you in this way. Listen to this week’s episode HERE.

**248: New Government, New Taxes with Tom Wheelwright!** Jan 24, 2021
Political difference aside, I for one was relieved to see some order restored to the government last week. Whatever policy differences I have with Joe Biden, I believe him to be a man who cares dearly about his country and a man of integrity.

As a person who loves this country first above any party, I wish him well and I hope that he can guide us through a difficult part of our history—one defined by death and destruction of a pandemic, the ensuing financial hardships inflicted on our people and hyperpolarization and partisanship not seen since the civil war.

It is my sincere hope that President Biden can help us to find a new national discourse where we can disagree with one another without being hateful.

Perhaps it’s unrealistic to think that we can put the genie back in the bottle. After all, we live in a world without any agreed upon facts. We live in a world of soundbites and gotcha moments.

But we are capable of more, aren’t we? I know you are. Our community is made up of a lot of different people with different views on the world. However, I get the sense that there is goodness in all of you. The kindness that you show me and each other when we are meeting is special. The outpouring you had for me when I got sick was genuine. You are good people.

As such, I want you to join me over the next several years to do your part in helping to bring the rhetoric down. Let’s be thoughtful people and show respect not only to those with whom we agree, but those with whom we disagree. Above all, we need to remember that we are all fortunate to be Americans and that underlying all of our differences, we all want what’s good for our country regardless of what that might look like through the eyes of any one individual.

Now, with that said, let’s get into what is probably going to be the most financially impactful change of the government on your pocketbook: taxes.

There is no one I trust more on these matters than my own CPA, Tom Wheelwright, Rich Dad Advisor to Robert Kiyosaki and author of Tax-Free Wealth. This week’s episode is exactly what you need to know about tax law changes right now. Miss this episode at your own risk!

**Tom Wheelwright** is a CPA, CEO of **WealthAbility** (Tempe, Arizona) and Best-Selling Author of Tax-Free Wealth. Wheelwright is a leading wealth and tax expert, global speaker, and Entrepreneur Magazine Contributor. Tom is best known for making taxes fun, easy and understandable, and specializes in helping entrepreneurs and investors build wealth through practical and strategic ways that permanently reduce taxes.

As a Rich Dad Advisor to Robert Kiyosaki (Rich Dad Poor Dad), Tom frequently speaks at conferences worldwide to entrepreneurs on these topics. His work has been featured in The Wall Street Journal, Washington Post, Forbes, Accounting Today, Investor’s Business Daily, FOX & Friends, ABC News Radio, NPR, Marketplace and many more media.

Shownotes:

What is a Reconciliation Bill?

Can we expect dramatic changes for high-paid professionals this year?

Bonus Depreciation

Are there any possible benefits for tax payers with the recent administration shift?

**247: How to Defer Capital Gains of ANY Kind!** Jan 17, 2021
I’m still recovering from Covid so please excuse any typos and oddball things I might say. I am actually on steroids that do make people a bit different psychologically.

As an update on my progress, I am about 10 days out from diagnosis. Overall I am relatively stable but have been dealing with something that many Covid patients call the cytokine storm period. At a high level, this means that the virus ramped my immune system up big time, so my battle is now less about the virus and more about fighting off my own immune system from damaging my body. That’s why I’m on the steroids that suppress the immune system at this point. I’m hopeful that by next week’s show, this will be over.

In the meantime I want to, again, thank the hundreds of you who have reached out to wish me well. I am very touched. I especially want to thank some of my physician colleagues who have literally consulted on my care from thousands of miles away. Guys like Patrick Troy in Hartford and his colleagues. He’s been on the phone with me every day, looking at my labs, CT scans, etc. I live in a small town with not a lot of big gun pulmonologists and ICU docs like Patrick, who gives this community greater perks than just the financial stuff.

This morning I sent Patrick my labs and he said they were starting to look “boring”—which is good. He added that he knows that I like boring! He’s right.

I do feel a sense of responsibility to give you this public service announcement and hopefully it is meaningful to you. Avoid this virus like the plague (which itself is a bacteria and easier to treat). Because it sucks and it’s scary. I can’t tell you how many frightening stories I’ve heard in messages from you guys lately about otherwise healthy guys our age who succumbed to the disease. So…do what you can. This is not a political issue, it’s common sense. Wear a mask and get vaccinated when you can. I guarantee you whatever side effects you get are better than having this disease.

Just some more thoughts here broadly on this virus: It’s really mind boggling to me that a virus that started in a wild animal meat market from Wuhan China probably from bats created this havoc in my body. Kind of gross to think of it that way actually.

I do hope that at some point the world stands up to the Chinese government to more aggressively regulate these places. After all it’s not the first killer virus to come from these places and it won’t be the last. But China owes it to the world to do its best to regulate its wild animal trade and be transparent with the rest of the world. The problem is that they are a world economic power and you can’t exactly sanction them to death like Russia or Iran. But you can shame them and the Chinese do care about their reputation on the world stage.

One last thing on Covid-19. An article in the Los Angeles Times today reports that 1 in 3 of L.A County residents are estimated to have had Covid-19. That’s three of the ten million people in that population. The good news is that it should make it easier to herd immunity with the vaccine if you are already starting from a 30 percent previously infected population.

So, that’s my daily Covid commentary and we will leave it there. I do want to make sure that I continue to provide you the kind of financial information that you have come to expect from this show. So, today we are going to jump into a topic that you can sink your teeth into. We are going to talk about the different options that you have when you have capital gains. The truth is there is no one size fits all but there are a lot more options than people realize.

We are going to talk to Brett Swarts today about those options from A-Z. After that conversation, make sure to keep listening as I will end the show with some additional commentary on bitcoin and other asymmetric risk strategies.

Brett Swarts is the CEO of Capital Gains Tax Solutions. With his team at Capital Gains Tax Solutions, he has helped overwhelmed high achievers win at funding a passive or active tax deferred income stream, succeed at timing the real estate market, and sell with confidence.

Shownotes:

The 1031 exchange

Delaware Statutory Trust

Can you minimize how much equity goes into the Delaware Statutory Trust?

What are Opportunity Zones and what are the problems associated with them?

capitalgainstaxsolutions.com

experttaxsecrets.com

246: Financial Insights from Quarantine! Jan 10, 2021

For those of you in our accredited investor club, you might have noticed an abrupt cancellation of our real estate webinar last Tuesday conveyed by a cryptic message from my assistant, Madalyn.

Well, here’s what happened. Sunday, I went on a hike with my daughter. She is 11 years old and has the lungs of a marathon runner. I do my best to keep up with her.

We do this hike regularly and wanted to set a new record time for ourselves. So with Taylor Swift music blasting for motivation we set off and ended up destroying our record by several minutes! Then we went home and met up with my other two daughters who are 8 and 5.

Feeling like we wanted to end Christmas vacation together with a bang, we all jumped into the swimming pool which, where I live, you can do comfortably in January if you crank the pool up to 90 degrees. We played in the pool for an hour—basically I just throw them around in the pool which they love. After, that we had dinner and called it a night.

Around three or four in the morning, I began having terrible chills and body aches. They rapidly got worse and worse. My temperature at 5AM Monday morning was 101.5 F—officially a fever. It felt like the flu but, given this whole Covid-19 thing, I had a bad feeling that it was not my old friend influenza who I had defeated a few times in life already.

So, I got myself tested at about 8am at one of those drive-in places. While I waited in the parking lot for the results I could tell it was getting harder and harder for me to breathe.

30 minutes later, I had a positive Covid-19 test and I could literally feel myself getting sicker by the minute. I am a life-long asthmatic so I knew I needed to be proactive to give myself the best chance against this thing so I went straight to the hospital.

As I walked a couple of blocks from the parking garage to the emergency room, I could feel the strength leaving my body. Honestly, it was getting scary.

The waiting room for the emergency department was outside and everyone else there was pretty clearly a covid patient—all hacking away into their masks—pretty awful.

Anyway, an hour or so later I got inside the emergency department. By that time my temperature had gone up and my energy levels had dipped to zero. I felt like I had been run over by the proverbial mack truck. And my breathing was getting more labored.

In these situations I must say that it is very helpful to be a physician. I was made aware by my primary care physician that the local hospital was giving a very select group of patients a somewhat experimental drug called bamlanivimab—let’s just call it BAM.

Even though I did not meet the age and weight criteria, I was able to argue that my underlying asthma should be a reason to have it. Honestly, they didn’t really fight me on it. But being a doctor, I was lucky enough to know that the drug existed and to ask for it.

So, like many of the septuagenarian politicians on TV who miraculously recovered in no time, I too was given the goods. A couple of hours with an IV in my arm and I was sent home.

I was in rough shape and had to get a ride back—left my car at the hospital. All I remember at that point was being unable to move and having a temperature of just under 105 degrees.

Now remember, the day before all of this happened, I felt no symptoms at all. It is incredible how fast this thing took me down. It’s a beast.

That night I sweat more than I had since my days as a high school hockey player in Minnesota. I slept for 15 hours. And then I woke up—alive again. I felt sick, sure, but normal sick. And I truly believe that my miraculous turn around was because of the BAM.

So as I record this podcast, I’m now on day 5 of my Covid-19 journey. Technically I’m not out of the woods but I feel pretty darn good for feeling like I was possessed by the devil himself only a few days earlier.

And for the last 2 days at least, my mind has been reasonably functional. I’ve watched a lot of TV and thought about a lot of things that are going on in the world right now.

So, rather than try to push out the usual podcast, I figured I’d just share some of those ideas with you—stuff like Covid-19, the current state of American politics, tax implications of government changes and, of course, cryptocurrency.

Listen HERE.

**245: Back to Basics: Where to Start with Your Financial Plan!** Jan 03, 2021
When I just finished surgical residency, I took a job with a cosmetic surgery company for a few months before realizing that I was not employee material.

It was a hodgepodge group of surgeons there. Some of us were younger guys who recently finished training and were looking for experience. There were also a couple of older guys who had failed in private practice and had become “journeymen” doing work at multiple practices to make ends meet.

I had just finished reading Robert Kiyosaki’s Cashflow Quadrant and was finally making some money of my own, following several years of minimum wage indentured servitude as a surgical resident. So, I was receptive to financial advice.

I remember one time asking a sixty something year old surgeon what he would have done different if he could all do it over again. Now this guy had really not managed his finances well and was still having to crank it out just to get by. That said, what he did *wrong* was equally valuable to me compared to what others might have done right.

When I asked him, he didn’t flinch—“I would have bought more permanent life insurance,” he said. “In fact, that’s all I should have done.”

Admittedly I was a little confused by his answer. You see, I didn’t even know what permanent life insurance was and it never occurred to me that buying life insurance could be an investment.

As it turns out, this poor guy made a lot of bad investments throughout his life culminating with the 2008 stock market crash that wiped him and his plans to retire out in a flash. I asked him that question in 2009 and the only thing he had left was a permanent life insurance policy with cash value that had grown EVERY YEAR for 35 years.

As this guy was giving me his perspective, another younger guy was listening in and, when the coast was clear, advised me not to listen to a word the older guy had said. “Don’t listen to him,” he said. “Buy term, and invest the rest.” Now this guy was just a year ahead of me but he sure seemed confident in what he said so I listened to him.

My wife was pregnant with our first daughter at the time so I asked around and found a Northwestern Mutual agent that all the doctors seemed to use (the blind leading the blind) and bought some term insurance. I did look at the option of permanent life insurance but, frankly, it was a ripoff!

The idea of life insurance as an investment didn’t come back to me until about five years later. By this time, I was making quite a bit of money with a couple of businesses cranking at the same time. During this period, I was in a CEO group with another guy who was an advisor to ultra-high net worth individuals. He and I got to be pretty good friends and I trusted him. He was the first one to explain to me why so many affluent people bought permanent life insurance products.

As it turned out, the older surgeon who was broke and the younger know-it-all that gave me their contradicting advice were both right. Permanent life insurance was, indeed, a powerful and reliable investment and that’s why so many ultra high net worth individuals use it. However, the guy who told me to stay away from permanent insurance was also right because the way most policies are structured, they *are* a rip-off.

It was an example of a pattern I began to recognize—there are the products and investments that most people see and then are the ones that only the wealthy know about or qualify for. Once I realized that, I bought my first over-funded whole life insurance policy. But unlike when I bought term insurance, I bought this policy as an investment and as a strategy to augment the rest of my investments.

The type of policy I bought was so different than what everyone was talking about with permanent life insurance that I decided it needed a new name to escape the baggage around traditional unfavorable policies. So, I decided to call it Wealth Formula Banking.

Wealth Formula Banking is a wealth creation account more than anything else. It is an account that grows tax free at a guaranteed compounding rate and has done so since the civil war through the great depression, multiple bank failures and recessions.

It is also a wealth magnification machine. While your money grows at a *compounding* rate, you can borrow money from the insurance company at a *simple* rate effectively allowing you to grow your money in two places a the same time!

Any cash flowing investment can be enhanced by simply leveraging cash value and using the arbitrage of simple vs compounding interest to your financial advantage. It’s like double dipping your investment capital! When I finally got a policy all I could think of was “Why didn’t someone tell me about this five years ago?”

Now, going back to that friend years before that exposed me to the virtues of permanent life insurance, he wasn’t talking about this structure that I call Wealth Formula Banking. He was talking about a different kind of investment strategy.

The kind of policy he was recommending to me grew with an index to the S&P 500. The account would give me essentially all of the upside to the market but none of the downside. On top of that, I would use bank leverage to multiply my upside gains. That kind of policy goes by many names, but formally it is a “premium financed indexed universal policy” and was really only available to people making seven figures plus. Since then, I have identified variations to that model including what we call Velocity Plus that can be used by anyone making as little as $125k/year.

As you know, I am a huge supporter of these strategies. And, given the volatility of the stock market and the potentially systemic risk of ETFs and mutual funds identified recently by the likes of Dr. Michael Burry (The Big Short), I think it is important for everyone to truly understand the impact they can make on your future and to the future of your children.

And, with the new year, I think it important for us all to start with the basics. What’s important? The most important thing in personal finance is not to lose money and to secure the future of your children. So anytime someone comes to me and asks where to start, I tell them to start with Wealth Formula Banking.

But again, the noise out there against these products is constant and it can make you uneasy. Prominent financial bloggers in the medical space have, in particular, created a plethora of poorly understood comments regarding these types of policies. Today, we are going to pick apart some of these criticisms and give you our perspective.

Again, in my opinion, Wealth Formula Banking and related concepts should be the starting point for the high net worth financial plan. So it’s appropriate for us to start with this topic in the new year! Make sure to listen to our first episode of 2021 HERE.

Christian joined the financial services industry in 2004. Over the course of his career to date, he has developed a broad-based knowledge and experience set. He began as a traditional advisor, working with local clients in his home state. In that context, he began a movement of successfully partnering with other professionals, including accountants and attorneys, to assist clients in implementing sound financial strategies. He spent more than five years in management with 2 regional planning firms, during which time he assisted new and seasoned professionals in creating efficient systems and methods to build meaningful practices.

Over the last several years, he has expanded to working across the country, teaching financial principles, and working with clients across a broad spectrum, including wealth accumulation, retirement distribution planning, as well as innovative, advanced planning strategies for both high-income and high-net-worth individuals and businesses. He’s a member of AALU, and holds the designations of Accredited Asset Management SpecialistSM and Accredited Wealth Management AdvisorSM Christian is married and has two children, and is an avid sports fan.

Rod has been in financial services since 2009. Prior to going into business for himself, he worked in marketing and finance with several small businesses. He had the opportunity to purchase an existing furniture business in 2007, just prior to the Great Recession. The experience of struggling to stay afloat amid difficult economic conditions inspires Rod every day in his efforts to educate and assist his clients in implementing sound financial strategies.

He strongly advocates for establishing a firm foundation, utilizing proven strategies and financial tools to create a strong base upon which we can each build our financial house. In addition to focusing on Wealth Formula Banking and Velocity Plus, he has expertise in retirement income planning. Rod has a bachelor’s degree in Marketing Communications, and an MBA with an emphasis in Entrepreneurship.

He and his wife Jodi are the proud parents of 7 wonderful children. As a family they thrive on spending time exploring nature, playing games and doing projects together. He enjoys sports, music and reading.

Shownotes:

Doctors get fooled because of a lack of financial sophistication?

It’s absolute nonsense to say somebody’s going to benefit from your investment and therefore it can’t be good.

Do insurance products provide estate-planning benefits that are not available in other ways?

Misunderstanding the value of liquidity

244: Ask Buck Q4 2020 Part 4! Dec 27, 2020

We are finishing the year off with one final episode of “Ask Buck”. This episode has a wide variety of questions with issues ranging from cryptocurrency to child-rearing. Make sure to listen!

P.S. Thank God 2020 is coming to an end!

243: Ask Buck Q4 2020 Part 3! Dec 20, 2020

Lots more questions to answer on this Christmas week episode of “Ask Buck”! We talk about real estate markets, equity vs debt in your home and lots more.

In the holiday spirit, I even asked a couple of our Wealth Formula Network members to join! Lot’s of fun as usual.

Enjoy the episode!

242: Ask Buck Q4 2020 Part 2! Dec 13, 2020

It’s time for another round of “Ask Buck”. This week’s episode includes questions on Wealth Formula Banking, cryptocurrency, gold and real estate markets.

Listen HERE!

241: Ask Buck Q4 2020 Part 1! Dec 06, 2020

It’s time for our next series of “Ask Buck” episodes. It used to be that we just did one of these every few months. But now we get so many questions that it has become a quarterly series! While all of our shows are educational in nature, the nice thing about the “Ask Buck” shows is that material is highly focused on practical information and strategy applicable to most investors.

These shows have become extremely popular over the years and, if you are new to the Wealth Formula community, are particularly useful to “catch up” on recurring themes in our world.

Tune in now for the first “Ask Buck” episode of Q4!

**240: A Million Dollars a Month with Rod Khleif!** Nov 29, 2020
What if you were in a 747 jet airplane traveling 500 miles per hour. You could get to where you want to be pretty quickly. But what if you didn’t know where you wanted to end up?

Well, then it wouldn’t do you much good to move at 500 miles per hour. In fact, depending on where you ultimately want to end up, it could end up making your journey take much longer than if you just walked directly there to start!

The point is that it doesn’t really matter how much energy you have or how hard you work if you have no idea where exactly you want to end up.

Now of course it is hard, especially when you are young, to pinpoint *exactly* where you want to end up. But that doesn’t mean that you can’t start making some goals for yourself early on.

You can always go back to revise them if they don’t end up being as appealing later on or if you have goals that are even bigger. The point of having a goal is to engage your self conscience to autopilot you to a place that you can see in your mind’s eye.

Let’s take, for example, the goal of making $1 million dollars per month. That’s a big goal for most people. If you set that as a goal you truly want to achieve, you would have to take a pretty good look at where you are in life today and make sure your trajectory makes it possible. And if it doesn’t, change course immediately!

In other words, if you are working at a comfortable 9-5 job making $300K per year today, you are going to need a serious pivot plan to make over three times that amount every month. No matter how hard you work, that job is not going to get you to $1 million per month.

On the other hand, what if you are already making $100K per month and your earnings are independent of your time? What if the only difference between $100K per month and $1 million per month is increasing the scale of what you do?

In other words, if a unit transaction currently makes you $5K, is there a way to make that same unit transaction worth $50K without significantly increasing your time and effort? If so, stay the course. If not, abort and alter your plan.

I know that it can be done. I’ve seen people add zeros to their income and net worth in just a few years over and over again. You just have to have a plan. It has to viable and you have to execute it. And…perhaps most importantly, you have to believe that you can do it!

Henry Ford once said, “If you think you can do a thing or you think you can’t do a thing, you’re right.” Mindset is everything. If you think there is no way to get to $1 million per month, you won’t get there. The reason why is nothing esoteric. It’s quite simple.

Think of everything that you have done in your life up to this point. At one point it started as an idea that you believed would become reality. In order to make anything real, you have to create that reality in your head first. If you do that, your subconscious will help guide you along the way.

Of course this type of goal setting applies to much of life. It’s not just about money. It’s just about what you really want. Visualize it, believe it, and make a plan to get there.

My guest on Wealth Formula Podcast this week, Rod Khleif, credits all of his life’s many successes to these basic concepts of visualization. And while it is easy to be cynical about this kind of stuff, I can tell you from personal experience that I have experienced this kind of *manifestation* myself and it’s hard to explain. But it works!

As the end of the year approaches, it’s always a good idea to reflect a little bit and this week’s interview with Rod might just be what you need for a little holiday dreaming!

Rod Khleif is an entrepreneur, real estate investor, multiple business owner, author, mentor, and community philanthropist who is passionate about business, life, success, and giving back. As one of the country’s top real estate trainers, Rod has personally owned and managed over 2,000 properties.

Rod is Host of the Top-Ranked iTunes Real Estate Podcast which has been downloaded more than 8,000,000 times – “The Lifetime Cash Flow Through Real Estate Investing Podcast.” Rod is the author of “How to Create Lifetime Cash Flow Through Multifamily Properties” considered to be an essential “textbook” for aspiring multifamily investors.

As an accomplished entrepreneur, Rod has built several successful multi-million dollar businesses. As a community philanthropist, Rod founded and directs The Tiny Hands Foundation, which has benefited more than 75,000 community children and families in need. Rod has combined his passion for real estate investing and business development coaching with his personal philosophy of goal setting, envisioning, and manifesting success to become one of America’s top real estate investment and business development trainers.

Shownotes:

Lessons after losing $50 million in 2008

Visualize your goal, believe it, and make a plan to get there

Why should you fear regret more than you fear failure and humiliation?

Happiness comes from progress and growth

The Lifetime Cash Flow Through Real Estate Investing Podcast

realestatewithrod.com

**238: THE NEED FOR SPEED: The Western Wealth Way!** Nov 15, 2020
Wealth Formula does, in fact, have a mathematical formula behind it.

Wealth=Leverage(MassxVelocity)

I believe the key to building your wealth is behind maximizing each one of these variables. Mass is simple. It’s how much money you invest. If you have more money to invest then you are going to create more wealth.

Leverage is critical. Despite what some popular personal finance gurus say, significant wealth creation is almost impossible without the judicious use of debt. It serves to amplify your returns. After all, growing your wealth at 5 percent per year is quaint but it isn’t going to make you rich.

Velocity might actually be the least understood and least appreciated variable of the Wealth Formula. Velocity is more complicated than a simple yield or cash on cash value although that’s part of it.

Velocity is how quickly you get your money back in your pocket to redeploy into another opportunity. So, if you have money in one apartment building that refinances and you get your money out of the deal while maintaining your equity position, you can now *recycle* that same capital into another investment. Now you are invested in two assets at the same time using the same initial capital.

Velocity is a function of time. If you can do the same work in half the time you are going to double your annualized returns. If you redeploy that capital into multiple opportunities you begin to see exponential growth of your wealth.

While that might seem like a fairly simple concept, it’s not the way most businesses think. Even most value-add apartment syndicators seem blind to this concept. Every day that value is *not* created in a real estate project, it decreases the over-all return on investment.

That’s the secret behind our **Investor Club** partners: Western Wealth Capital. It’s **THE NEED FOR SPEED!!!**

If you have been part of our investor community or have come to one of our live events you have seen these concepts come to life and it’s truly remarkable!

You see the math is quite easy. Once you know the variables it makes sense. The hard part is the execution and, in this regard, Western Wealth Capital is the Wealth Formula coming to life.

To talk about this remarkable organization, this week’s podcast features an interview with David Steele, one of the principals and cofounders of Western Wealth Capital.

As always Dave is not only brilliant but entertaining. Don’t miss this episode!

David is an entrepreneurial executive who has offered leading-edge investment opportunities to thousands of individual investors in both Canada and the United States. From 1997 to 2001, David was CEO of International Properties Group Ltd. (IPG), a TSX-listed real estate company that purchased apartment buildings and converted them to condominiums. While at IPG, David developed and operated a wealth management division, which helped thousands of individual investors acquire more than 85 projects and 7,000 properties throughout North America. Those investment properties continue to generate passive investment income today. David has been actively involved in the growth of the Entrepreneurs Organization (EO), a non-profit organization that now has over 7,500 members worldwide. From 1993 to 1994, David served as EO’s International President. David has a Bachelor of Commerce degree with a major in finance from the University of Calgary.

Shownotes:

The beginnings of Western Wealth Capital

What is the secret behind Western Wealth Capital?

How can you invest your money in two places at the same time?

How the pandemic affected the multifamily housing market

**237: Is Angel Investing Right for You?** Nov 08, 2020
Boring is good. Beware of shiny objects.

When it comes to investing, those are the words that I generally live by. When I keep true to this wisdom, I don’t generally lose money.

Now that doesn’t mean I have never lost money! Remember, before I became a boring domestic real estate guy, I was a flaming entrepreneur! I acted on every good and bad idea that I had.

I made millions of dollars with some of those startups while losing most of it with just a few bad decisions. It was exciting—but not all that profitable.

I remember a few years back after losing a ton of money in a failed business expansion that my net worth was preserved only by the real estate I had purchased along the way. Luckily, I had a rule that I had to buy at least one apartment building every year while building my other businesses.

Guess what survived? Guess what thrived? Yep…the boring stuff. Those apartment buildings I bought while I lived in Chicago saved me!

And while not all real estate investments grow by 500 percent plus in just 3-4 years like mine did, you can pretty much count on most residential real estate to be fairly *safe* in competent hands.

Boring stuff like real estate is a slow-burn for creating wealth. We can amplify that growth through velocity—we can invest in value-add projects that quickly refinance and recycle capital. However, it is highly unlikely that you will end up with “10 bagger” on any individual real estate project.

To get a 1000 percent plus returns, you need to do something a little riskier like I did with those start-ups. But is it prudent to do so? After all, if you are making $500K or a $1 million per year, do you want that kind of risk?

For most people, the answer is no. But, what if you want to go from being a person with a net worth of $3 million to $30 million? Well, if you really want to do that, you are going to need to take some risk—asymmetric risk.

If you’ve got the money to do it, it might make sense to take that 5-10 percent of your net worth and shoot for the stars. If you lose it, you can afford it. But if it takes off, it could be life changing.

Bitcoin and other cryptocurrency speculation is certainly a good example of asymmetric risk. People who bought a couple of hundred dollars of bitcoin back when it first came out are worth hundreds of millions of dollars!

That kind of crazy profit is extraordinarily rare and requires a huge amount of good fortune.

However, more modest levels of asymmetric risk can potentially be systematized. That’s essentially what an angel investor fund does and that’s what we are going to talk about on this week’s episode of Wealth Formula Podcast.

So…if you’re tired of all the boring stuff we do in **Investor Club** don’t miss this episode!

Tom Wallace is the Managing Partner as well as investor and board member at Florida Funders as we are part of that change. As a 25 year veteran of angel investing, he has learned the hard way how challenging angel and early stage investing can be …vetting the deals, due diligence, checking out the entrepreneurs (so important), legal docs, and negotiating valuations. It can be daunting and easy to cut corners which can be fatal. Florida Funders does all this for the investor and allows you to invest as little as $5,000 or invest in a seed fund that really enables you to diversify your risk which is so important in this asset class.

Shownotes:

Angel Investing in technology.

How much of one’s investment portfolio should be used on Angel Investing?

Tom talks about the five D’s of Angel Investing

What is the biggest mistake one can make in Angel Investing?

Floridafunders.com

**234: What You MUST Know about Estate Planning!** Oct 17, 2020
Estate planning is by far and away the most ignored topic amongst the high paid professionals with whom I talk to every day.

First of all, it’s not a very sexy issue. Who likes talking about dying anyway? It’s kind of a buzz kill.

But I got news for you…eventually you are going to die and you probably won’t get to pick when. Remember—I’m a doctor so I’m qualified to make this statement!

The other hesitation many have when it comes to estate planning is that it often requires the concept of *gifting* your assets to a trust or to your children. When you are in your 40s or 50s you might think, “I’m not ready to give my stuff away. I want to have some fun!”

A good friend of mine had that exact response when I brought up the issue to him recently. But here’s the thing. Gifting an asset to a trust DOES NOT mean giving up control.

Remember the old dictum, “Own nothing, control everything.” That’s what good estate planning is all about. You really don’t need to change much of anything in your life while you are living. However, good estate planning will make a world of difference to your loved ones when you die.

Imagine for a second that you have amassed a net worth of $10 million and you suddenly pass away. If you didn’t do any estate planning, your kids aren’t going to see any of that money for a year or more as it goes through a process called probate.

And to be clear, A WILL DOES NOT PREVENT PROBATE. Probate is the judicial process whereby a will is “proved” in a court of law. In California, that takes a minimum of two years!

The good news is that avoiding probate is easy as establishing a living trust and funding that trust with all your assets.

Now, if you are one of our typical accredited investors, a living trust may not be enough if you want to really protect your family’s wealth. Estate tax laws are rapidly changing and if you thought this was only a problem for $20 million plus families, you might be in for a rude awakening as new tax legislation is almost certain to come to fruition in the next several years with or without a Biden administration.

Estate planning is an area that, regardless of its minimal sex appeal, must be addressed to preserve your wealth and to keep your family safe. You don’t want them dealing with this stuff at the same time they have to grieve your death.

The good news is, again, you don’t have to do a lot to make adequate adjustments to your finances and it’s not very expensive. Just do it once and then you can go back to pretending you are immortal!

How do you do it? Well, this week’s Wealth Formula Podcast will make it all very clear as I interview attorney Joe Longo. Your family will thank you for listening to this one!

Joe began the LONGO LAW GROUP, LLP on the foundation of service of clients and results. He was influenced by his father, Dominic Longo, who founded Longo Toyota at a converted gas station with a 4 car inventory and eventually built it into a 22 acre facility housing the #1 selling car dealership in the world based on customer satisfaction. When most people are looking to hire a law firm its because they need something in the legal world accomplished. Its not to get overcharged and to have your attorney stop communicating with you. This firm’s philosophy is to provide the most vigorous representation, best service, ongoing communication, and at the most competitive rates. Joe has numerous Federal and State jury and bench trials under his belt, along with his sports practice that includes arbitrations, grievances, drug suspension hearings and appeals. Over the past two plus decades Joe’s practice has included Civil Litigation (business), Criminal (both State and Federal-Tax), Probate Litigation, Sports (MLB and NBA), Asset Protection, Trust and Estate planning. His clients have ranged from publically traded, international, corporations, professional athletes, professional sports franchises, leagues, individuals, to volunteer pro bono work for indigent clients. Along the way he has taught law at Los Angeles City College, Mission College, and Pasadena City College, and is currently an Adjunct Professor at Loyola Law School. He has sat as a Judge Pro Temp in the Los Angeles Court System. He has been a Panelist on many law panels including “USC Gould School of Law— Institute on Entertainment Law and Business”, “Loyola Sports Law Institute on Collective Bargaining & Individual Contract Negotiation In Professional Sports”, and “Negotiation For Lawyers—Lessons from Baseball Salary Arbitration Cases” Joe is also the President of Paragon Sports International, LLC (www.ParagonSportsInternational.com).

Joe has attained an “AV” peer rating from Martindale Hubbell, the national directory of attorneys, indicating preeminent legal ability and the highest ethical standards. He is a member of the California Bar, the Beverly Hills Bar Association, the Los Angeles Bar Association, the Sports Lawyers Association, and The Wealth Counsel. He received his B.A. from Brown University in Rhode Island, where he was a starting Defensive Back on the Brown University Football Team in the mid 1980’s. He obtained his Law Degree from Loyola Law School in Los Angeles, CA. His charitable endeavors include sitting on the Board of Ability First.

Shownotes:

What is Probate?

Why do you need a Living Trust?

Joe talks about the advantages of having a Dynasty Trust.

How do you find a good Wealth Planning Attorney?

233: Tom Wheelwright: Change Your Tax By Changing Your Facts! Oct 11, 2020

It’s not what you make but what you get to keep. Think about that for a second. If you are a physician in California that makes $500K per year, do you really make $500K per year?

No you don’t. With combined state and federal taxes, you make half of that. The Federal government and the State of California made the other half.

Believe me, I’ve been there. I spent the first year after residency as a W2 employee and it’s painful. I’ve illustrated how painful this is to my children by getting an ice cream cone then taking half of it myself and telling them I’m taxing them.

They get the point. However, their first inclination is like many others—they try to get two scoops instead of one. They don’t ask the question, “Daddy, is there a way that I can pay less tax?”

It’s human nature to accept certain things in life. Even Benjamin Franklin famously said, “ …in this world, nothing can be said to be certain, except death and taxes”

While as a physician I can tell you that we do not have a solution to the former, the latter is a problem with several potential solutions. Look at our current president. Well…I guess he did pay $750!

The truth is that it is the right of every citizen to legally mitigate the amount of taxes they pay. I’ve heard the argument that it is unpatriotic to decrease your tax burden. However, understand that the tax code is written as a series of incentives.

In other words, if you are paying less taxes, you are doing something that the government theoretically wants you to do. Anyway, if you are concerned that reducing your tax bill is unpatriotic, you probably don’t like Wealth Formula Podcast anyway so I won’t say much more about that.

However, if you would like to seriously start to change your tax, my friend and CPA Tom Wheelright says there is only one way. You have to change your facts.

And, if you want to change your facts, I can tell you with some level of certainty that there is almost always a way to do it. You just have to have the right advisors.

Of course, Tom Wheelwright is my tax advisor and he is the best in the business. So, if you want to start keeping more of what you make, don’t miss this week’s episode as Tom and I focus on the concept of creating passive income.

Tom Wheelwright, CPA is the visionary and best selling author behind multiple companies that specializing in wealth and tax strategy. Tom is also a leading expert and published author on partnerships and corporation tax strategies, a well-known platform speaker and a wealth education innovator.

In Tom’s best selling book Tax-Free Wealth, Tom shows entrepreneurs and investors how to build massive amounts of wealth through practical and strategic ways to permanently reduce taxes.

Shownotes:

Changes to the PPP legislation
How will the proposed tax legislation from the Biden camp affect real estate investors?
Can real estate losses offset capital gains?
Passive losses can only offset passive income. But what do you do if you don’t have any passive income?
wealthability.com

**232: Real Estate Volatility Ahead?** Oct 04, 2020
We are now just a few weeks away from a presidential election. Ordinarily that is, in and of itself, a wildcard for the economy. People tend to freeze up in times of uncertainty.

Factor in some kind of October surprise which would not surprise me, on-going COVID-19 fall-out and decreases in government support and who knows what happens next.

If you are in our **Accredited Investor Club**, you have fortunately been shielded from having to worry about much. It turns out that preparing for a down cycle via hyper-focus on working class apartment buildings, self-storage facilities and other uncorrelated asset classes turned out to be the right move.

Many of our properties continue to perform as well or better than pre-COVID levels. In reality, we are not seeing much distress at all in our space in the markets where we have chosen to buy.

And, frankly, if we get through the next 4-5 months relatively unscathed, we may be seeing an even more expensive market than before as big money starts to see our space as safe-haven.

I’m hopeful that scenario indeed happens in our niche. However, it is highly unlikely that many of the other real estate sub-classes will do well. Specifically, single family homes in middle-class markets may see some distress as mortgage mitigation efforts expire.

Non-residential commercial real estate such as office and retail are likely to see big trouble as their government assistance expires and distress begins pushing prices downward.

In that regard, we could see great buying opportunities in many real estate niches in which many of us have little exposure. That means opportunity.

The whole real estate market is in flux and we need to continue watching it closely. While it may not seem that much is changing on the surface, guys like Jorge Newbery of AHP Servicing are seeing mortgage default rates as high as they have been in 8-9 years.

To talk about this in more detail, I spoke to him a short time back and you will have a chance to listen to our conversation on this week’s Wealth Formula Podcast. Don’t miss it!

Jorge Newbery is the Chairman and founder of American Homeowner Preservation, LLC, or “AHP.” Jorge was the President of Budget Real Estate Inc. from 1995 to 2008, where he brokered over 1,000 troubled Department of Housing and Urban Development and real estate owned properties and acquired, renovated and operated over 200 distressed multi-family, single-family and commercial properties. Prior to that, Jorge was the co-founder of Sunset Mortgage from 1992 to 1995.

Shownotes:

The challenges with the loan forbearance programs that are currently available.

Why aren’t we seeing the expected number of mortgage payment defaults several months into this pandemic?

What the advantages of doing note investing through a big fund

ahpservicing.com

**231: Should You Buy a Franchise?** Sep 27, 2020
“Saying yes will get you to a million. Saying no will get you to $100 million.” That’s the advice I once got from a very successful centimillionaire friend of mine.

And while, on the surface, it may seem like one of those things rich people say to sound profound, I assure you that the power of no is indeed real.

As you may know, I have been a bit of a flaming entrepreneur since leaving surgical residency. I got the bug after reading a Kiyosaki book and from that point forward, I was like one of those kids who grow up repressed and tries to make up for it up by drinking too much in college.

In other words, there was a period in my life where I chased too many shiny objects. I said yes to everything. It was fun until I realized it wasn’t particularly profitable to be so entrepreneurially promiscuous.

In fact, in 2014, I gambled away two successful businesses that were making millions of dollars per year by over-leveraging myself and trying to grow too fast. It didn’t work and I lost millions in the process.

That was my “come to Jesus” point where I realized that I had to get control of my desires. It was a fun ride, but I had to be more methodical going forward. And since then, I have trained myself to say no to pretty much every opportunity that comes my way.

I only consider saying yes under very narrow circumstances. First, the opportunity has to be worth at least another million dollars per year in income for me. I’m not saying that it starts off that way, but it should be able to get there pretty quickly.

The next criteria is that there is no significant over-head. Over-head crushed me when I tried to open up 5 surgical centers in 5 different states at the same time. I won’t make that mistake again.

Finally, the new endeavor cannot put anything that I am currently doing in jeopardy. This is fairly broad but, for example, I won’t sacrifice ongoing cash flows from one business to support another for a prolonged period of time. In addition, I won’t get involved with anything that will require a disproportionate amount of time when considering financial return (or other kinds of fulfillment).

Sounds pretty obvious right? Well, try telling that to the entrepreneur possessed. It’s not that easy. Whether you are an entrepreneur or an investor, you have to develop the ability to say no. Now, there is hazard on the opposite end of the spectrum as well.

For example, I know guys who are very successful and they keep burying all of their money into the same business to grow it more and more. They aren’t taking any of that money and creating other sources of income. That puts them at a high risk of single point failure.

So, the moral of the story is that while it’s probably best to lead with no, you should be open to saying yes once in a while for the right opportunity.

You may be a highly successful individual who makes a ton of money through your income. What if you lost that job or were unable to continue to do it? What if there was a way for you to create significant income that was not considered W2 income and provided significant tax benefits?

That’s where being a business owner has its biggest advantages. You can’t get fired and you will pay a lot less in taxes. However, starting a business is pretty darn risky and most fail. So, how can you mitigate that risk?

Well, one option is to consider getting involved with franchises. This is an area that I have considered for years but have never really explored. But after this week’s Wealth Formula Podcast interview with Franchise expert, Kim Daly, I am seriously considering it.

I really enjoyed talking to Kim and I highly encourage you to listen to our discussion. It could change your life!

Kim Daly is one of America’s top franchise consultants who has helped thousands of people explore franchise opportunities. Prior to becoming a franchise consultant, she successfully ran her own health & fitness based consulting firm and worked with Dr. Denis Waitley, Denise Austin, eDiets.com, Gold’s Gym and many other national health and wellness brands. She launched the first health and fitness marketplace at USATODAY.com called BeHealthyNow. She was a personal trainer in college and a Miss America contestant. She graduated Summa Cum Laude with a degree in Nutritional Biochemistry. Kim has been a business owner for 20 years. She has the wisdom that comes from experience and combines that with her knowledge of the franchise industry and passionate personality to inspire people to achieve their dream of business ownership. In all her pursuits, she desires to be a role model and influence others to live their best life!

Kim lives with her family on the seacoast in Southern NH. She can be reached

Kim Daly is one of America’s Top Franchise Consultants who has helped thousands of people explore franchise opportunities. For over 20 years, she has traveled the country as a keynote speaker and business break out leader and has hosted her own live events educating, motivating and inspiring Americans to the dream of small business ownership through the proven systems of a franchise.

Prior to becoming a franchise consultant, Kim ran her own health & fitness based consulting firm and worked with Dr. Denis Waitley, Denise Austin, eDiets.com, Gold’s Gym and many other national health and wellness brands. She launched the first health and fitness marketplace at USATODAY.com called BeHealthyNow. She was a personal trainer in college and a Miss America contestant. She graduated Summa Cum Laude with a degree in Nutritional Biochemistry and a minor in sports nutrition.

Kim has been a business owner for 20 years. She has the wisdom that comes from experience and combines that with her knowledge of the franchise industry and passionate personality to inspire people to achieve their dream of business ownership. In all her pursuits, she desires to be a role model and influence others to live their best life!

at 603-964-2910 or via email: KDaly@FranChoice.com.

Shownotes:

What is a franchise?

What is the biggest difference between starting a business from scratch and going with a franchise?

Are franchises something that can be relatively passive for individuals looking to create wealth through owning businesses?

Kim talks about the process of selecting a franchise

https://thedalycoach.com/

**230: The Secret Weapon of the Wealthy!** Sep 20, 2020
If you want to be wealthy, do as the wealthy do. The wealthy do not use IRAs and 401Ks to invest in heavy loaded mutual funds. That system is set up to make others wealthy!

The ultra-wealthy get a completely different set of options when it comes to investing their money. They often have direct ownerships in businesses and real estate. They may own publicly traded equities, but they are not paying the fees that most people do.

The ultra-wealthy also understand the importance of leverage and apply it judiciously whenever possible to increase their returns. They are also keenly aware of tax efficient investment strategies.

Perhaps the biggest difference between the typical retail investor and the ultra wealthy is that the latter does not simply *hope* for the success of their investments: they *engineer* it!

What does that mean? Well, let’s take permanent life insurance as an example. Dave Ramsey and Suze Orman tell you to stay away from it. Yet, the wealthiest families in the world like the Rothschilds and the Romneys have used these products for generations to preserve and build wealth. In fact, the wealthier the family, the more likely it is that they are using some kind of permanent life insurance as part of their wealth building strategy.

You see, the affluent do not view permanent life insurance policies as simply assets. They use the elements of permanent life insurance to *enhance* their other investments. Life insurance, when used properly, is a tool to leverage your other investments.

So, again, why would Dave Ramsey and Suze Orman tell you that permanent life insurance is a bad idea? Well… a fool with a tool is still a fool. It’s hard to become wealthy if you are a fool (or at least to maintain your wealth for long).

I have been trying to uncover these kinds of secrets of the wealthy for years now. Along the way, I’ve learned a ton and have tried diligently to pass this information on to you.

I know there is a lot to absorb. However, I will say this. If you do nothing more than to pay close attention to the concepts of what we call Wealth Formula Banking and Velocity Plus that we discuss on this week’s Wealth Formula Podcast, I truly believe that I will have done you a service.

Don’t miss it!

Christian Allen, AAMS, AWMA

Christian joined the financial services industry in 2004. Over the course of his career to date, he has developed a broad-based knowledge and experience set. He began as a traditional advisor, working with local clients in his home state. In that context, he began a movement of successfully partnering with other professionals, including accountants and attorneys, to assist clients in implementing sound financial strategies. He spent more than five years in management with 2 regional planning firms, during which time he assisted new and seasoned professionals in creating efficient systems and methods to build meaningful practices.

Over the last several years, he has expanded to working across the country, teaching financial principles, and working with clients across a broad spectrum, including wealth accumulation, retirement distribution planning, as well as innovative, advanced planning strategies for both high-income and high-net-worth individuals and businesses. He’s a member of AALU, and holds the designations of Accredited Asset Management SpecialistSM and Accredited Wealth Management AdvisorSM Christian is married and has two children, and is an avid sports fan.

Rod Zabriskie, MBA

Rod has been in financial services since 2009. Prior to going into business for himself, he worked in marketing and finance with several small businesses. He had the opportunity to purchase an existing furniture business in 2007, just prior to the Great Recession. The experience of struggling to stay afloat amid difficult economic conditions inspires Rod every day in his efforts to educate and assist his clients in implementing sound financial strategies.

He strongly advocates for establishing a firm foundation, utilizing proven strategies and financial tools to create a strong base upon which we can each build our financial house. In addition to focusing on Wealth Formula Banking and Velocity Plus, he has expertise in retirement income planning. Rod has a bachelor’s degree in Marketing Communications, and an MBA with an emphasis in Entrepreneurship.

He and his wife Jodi are the proud parents of 7 wonderful children. As a family they thrive on spending time exploring nature, playing games and doing projects together. He enjoys sports, music and reading.

Shownotes:

Infinite Banking

Indexed Universal Life

Why would you not want to have exposure to the market with the guardrails that you get with Velocity Plus?

The creative investment strategies some high net worth people are doing.

**229: Pandemic Got You Down?** Sep 13, 2020
People are social animals. We aren’t designed to be wearing masks, not touching each other, and quarantining. Yet for the last six months, that’s been our predicament.

At the same time, we are increasing our dependence on digital socializing through social media and have significantly increased our collective screen times and subsequent exposure to toxic blue light at all hours of the day and night.

The whole scenario is a perfect set-up for individuals already susceptible to depression or other mental health issues. In fact, people who have never experienced any psychological issues in the past are now experiencing it for the first time because of the inorganic nature of our current lifestyles.

Divorces, domestic violence, and suicide rates have dramatically increased across the country. Yet, this kind of fall-out from Covid-19 have not been appreciated adequately in the media and recognized as considerations in the big picture of pandemic-era policy.

The non-medical, non-economic consequences of the pandemic are real and have had a huge negative impact on many of our lives.

To hear about what’s going on out there in this part of human existence, this week’s Wealth Formula Podcast features a conversation with therapist and personal coach, Joel Wade.

If Covid has got you down, make sure to listen to this conversation!

Joel F. Wade, Ph.D. is Marriage and Family Therapist and Life Coach, and the author of The Virtue of Happiness, Mastering Happiness, The San People of the Kalahari, and an in-depth online course: A Master’s Course in Happiness, drawing from the increasingly useful research in psychology in general, and positive psychology in particular; and his nearly four decades of working with people professionally. He has written regularly for a variety of publications, including The New Individualist and The Good Men Project; and the Beyond Wealth columns for the Oxford Club. He’s also a world class athlete, having won multiple national and world championships in water polo.

Dr. Wade enjoys teaching clear, practical skills and ideas that can be used immediately, inspiring his readers and listeners to take effective steps toward a more rewarding, joyful, and resilient life. As a Life Coach he works with people around the world via phone and Skype, and can be found at www.drjoelwade.com.

Shownotes:

People are feeling like everything is on pause these days.

There are certain habits or things that make depression more likely.

How does our mood system help us survive a situation that we are stuck in?

Post-traumatic growth

https://drjoelwade.com

**228: Should you Invest in Hotels?** Sep 06, 2020
It is the second week of September—my birthday week. And…as I reflect on the past 12 months, I can’t help but think, “What a shitty year”. The only solace I take in my reflection is knowing how radically things can change over the course of 12 months. The pendulum just needs to move the other way.

The good news is that this time next year could, and probably will, look very different. We could be getting on planes to meet up in Dallas for a Wealth Formula meetup. We could be meeting up at the bar, shaking hands, and even hugging each other without masks and disinfectants.

We could also be looking at a different economy. Perhaps things will have taken a turn for the worse from pandemic-age repercussions. Or…perhaps the sheer magnitude of pent-up desire for people to go out and have a good time will power GDP to record growth launching us into the roaring 20s. I actually think that could turn out to be an accurate prediction. I know I will be out there spending!

The point is that Covid-19 has already happened. I know it’s not over yet but I think it’s wise, and certainly more fun, to think about what happens next. Of course this is an investing program so let’s focus on that subject.

If you are in our **Accredited Investor Club**, you probably know that I have been very clear on my investment thesis in the past couple of years—“keep it boring, stupid”. This is generally good advice for all season but we do need to adapt to new environments and recognize opportunities when they become available.

One of the spaces that I am interested in exploring over the next 12 months is the hotel space. Admittedly, my only previous hotel investment has not gone well. In fact, it was a construction project off-shore that has had lots of problems and, as a result, has soured me both on construction and on investing outside of the United States.

But I’m not going to throw the baby out with the bathwater. I think there may be a real opportunity in the bread and butter domestic hotel space in the United States and so I’m watching it closely to see if and when it might be a good time to get involved.

So, in the spirit of looking ahead at better days and possible investment targets in the post-covid era, I asked an expert in the area to come on the show and share his experience in the space. Make sure you listen to this week’s episode of Wealth Formula Podcast to see if investing hotels might be right for you!

TITAN Hospitality was founded by Steve Usher. Prior to starting the company, Mr. Usher was the Pacific Northwest Representative for CB Richard Ellis’ National Lodging & Hospitality Services Group in San Francisco. He serves on the Board of Directors of San Luis Obispo-based Martin Resorts and is a licensed California real estate broker.

Shownotes:

What is the main difference between investing in hotels and investing in apartments?

Steve talks about the different hotel investment classes

What are the issues with debt in the hotel space?

What is Steve’s advice to potential buyers who are considering investing in hotels?

phone: 626-926-0000

email: TitanHospitality1@gmail.com

227: Ask Buck Part 3 Aug 30, 2020

If you like these “Ask Buck“ shows, you’ve been enjoying the last few weeks. I would love to get some feedback from you as I’m always trying to improve the quality of my content.

In the meantime, here is the third and last ask Buck episode of the summer! We will do it again sometime in the fall. Enjoy!

225: Ask Buck Aug 16, 2020

We do a lot of interview based content on Wealth Formula Podcast. However, the feedback I get is that the most learning happens during our “Ask Buck” episodes.

The good news is that we have a bunch of questions lined up so we will do a couple of “Ask Buck” shows in a row for the next few weeks starting with this one!

I also encourage you to go back and listen to older “Ask Buck” shows as well. It’s probably the quickest way to get caught up with all of our lingo and the concepts we constantly go back to.

I hope you enjoy it!

**224: Multifamily Macroeconomics in the Twilight Zone** Aug 09, 2020
“You’re nuts!” That’s what I would say to anyone a year ago who suggested that we would face a global pandemic that would put us in a recession magnitudes greater than 2008 (based on GDP), make all bars and restaurants shut down and cancel professional athletics.

I would also think you were nuts if you told me that despite all of this financial destruction, our apartment portfolio would still be performing as well as it is. We truly are living in the Twilight Zone right now.

So what happens in the next six months, a year or two years? Yogi Berra put it best, “It’s tough to make predictions, especially about the future”. So, no matter what anyone says right now it is probably akin to throwing darts.

That said, let me make a couple of observations. First, apartment buildings are still doing very well. Interest rates will be artificially low for years to come. And there is a ton of money on the sidelines that must be deployed.

What if we avoid the much predicted tsunami of defaults altogether and go straight from stable or slightly decreased rent growth for the next few months to *massive* demand and cap rate compression a year from now?

I would not have said this with a straight face a couple of months ago but now I can actually see that happening and not be surprised by it.

Anyway, in the interest of continuously trying to understand the future of real estate investing, I am interviewing yet another economic sage this week. He’s a guy who specializes in apartments and actually spoke at our last Wealth Formula live event which now seems ages ago.

His name is Ryan Davis and he’s a very smart guy. Make sure to listen to this week’s Wealth Formula Podcast to see what he has to say!

Ryan Davis serves as Chief Operating Officer at Witten Advisors. In this role, Ryan provides fact-based research, analysis and discussion to help clients formulate their apartment market strategies. This insight informs investment decisions for multifamily development and buy/sell opportunities.

Shownotes:

The great unknown is the pace of the recovery

Can we expect to see a tsunami of defaults before the economy recovers?

Is the worst behind us in terms of the economy?

How has the current pandemic affected the lending market?

wittenadvisors.com

**223: Self-Storage and Why Boring is Sexy** Aug 02, 2020
There is a phenomenon in finance that I have witnessed first hand that I find fascinating.

The best way to explain it is to tell you about a guy I know out here in California who has been very successful as a fund manager.

I asked him once about the expectations of his investors and he quickly replied: “5 percent”. Knowing this guy was pretty savvy and could easily produce more than 5 percent for his investors, I said he must be making them pretty happy by outperforming that expectation on a consistent basis.

“No way!” he said. “I’m not about to scare anyone off.” He continued to explain that his investors saw the money he was managing for them as *safe* money. If they got higher yields, they would start to think of themselves as doing something risky.

So, instead of scaring people by giving them bigger returns, this fund manager was kind enough to spare them the scare and pocketed the spread himself.

Of course he was not doing anything nefarious at all. The agreement he had with his investors was to deliver 5 percent.

As a real estate investor you might be scratching your head right now but this phenomenon is real in the financial services world.

Conventional financial wisdom trains us to believe that nothing profitable could be relatively low risk. And, to be clear, there is some truth to that when it comes to traditional bond markets etc.

However, I can tell you that we see exceptions to this rule all the time in real estate. If you’ve been to our accredited investor club for long, you’ve seen this play out in apartment buildings over and over again.

Is it possible to have a relatively safe asset that makes money in recessionary times and makes even more money when times are good?

Well, I happen to know and have partnered with a top 25 operator in a category of real estate that seems to thrive no matter what the economy looks like.

Of course all real estate is operator dependent. This particular partner raised net operating income across his portfolio by 9 percent in 2008 during the financial melt down!

This operator has also seen an average project level annualized return of 64 percent on all divestments!

In other words, during down times he has done very well and during thriving economies he has absolutely crushed it.

And to be clear, this is not a mom and pop shop that got lucky. They are the 25th largest operator of self-storage in the country.

Want to learn more? Listen to this week’s interview with Lew Pollack. And if you are an accredited investor, I would highly suggest you join our investor club ASAP!

Lewis G. Pollack, operates the Reliant Delray Beach, Florida office, and has primary responsibility for equity investor relations. Mr. Pollack, a long-time corporate executive and entrepreneur, has been involved in the development and management of self-storage in excess of 30 years. Mr. Pollack is a graduate of Franklin and Marshall College, Trenton State College, and holds Ph.D. (ABD) from University of California at Los Angeles. Mr. Pollack is a former Trustee and President of the Florida Self-Storage Association. Mr. Pollack is also a Managing Principal of Midgard Self Storage and Store Smart brands.

Shownotes:

Lew talks about what makes self storage appealing as an investment

How has Reliant’s portfolio performed through the current pandemic?

What is an A-Class Self Storage facility?

Lew talks about the typical value-adds in Self Storage

**222: The Dollar Milkshake Theory with Brent Johnson** Jul 26, 2020
Back in the early 1990s, I was a freshman at Columbia University in New York. Frankly, I wasn’t very interested in the academic part of college at the time. I was too busy doing what a college kid might do after being dropped into Manhattan after going to private school in the midwest.

In fact, I realized that college courses were starting to interfere with my nocturnal lifestyle so I started taking an increasing number of evening courses.

The evening courses had a lot of older students in them—many of them graduate students that took their studies pretty seriously.

I recall taking a political science class one time where I am quite sure I was the only freshman there. The lecturer was some fancy academic guy who many thought would eventually run for office.

The lectures often led to spirited discussions which I found intimidating for multiple reasons—one of which is probably because I rarely came to class having adequately prepared myself with assigned readings, etc.

One evening a lecture stirred an interesting idea in me that I wanted to share but, again, felt too intimidated to share in front of this older, intellectually talented class. So, I decided to wait until a break we typically took midway through class and talk about it with the professor one-on-one.

To my delight, the professor called my idea *interesting* and spoke to me like a colleague rather than the 18-year-old punk that I was.

Emboldened by my success, I awaited the next time that I could interject myself in class. On one occasion, the discussion turned towards the Clinton administration stance on gays in the military. There was lively discussion on this hot button issue primarily around the effect on morale.

I didn’t get it—why did people care, I thought. So, I raised my hand and, in front of a classroom and stood up. I looked at the packed classroom of intellectual heavyweights and said, “Why do we even ask them if they are gay? Wouldn’t it make sense just not to ask?”

There was an odd silence for a minute and then two or three students reminded me that the Clinton administration had just passed the “don’t ask, don’t tell” policy.

After an uncomfortable moment, I quickly sat down about as embarrassed as I had ever been. The class, briefly stunned by my profound ignorance of current events, continued their discussion where it had left off before I interrupted. I never did go back to that class. It wasn’t too late to drop it fortunately.

Why did I tell you this story? Well, as you can probably tell from the frequent appearance of economists on my podcast, I really enjoy learning about macroeconomics. That said, with a medical background, trying to follow some of these theories can be kind of humbling.

I’ve gotten better over the years but I am sensitive to the fact that you may be a super smart professional in your own field that knows little about how the economy works. Meanwhile, the alternative podcast ecosystem is talking non-stop about the fall-out of Covid-19 and the potential consequences of unprecedented fiscal and monetary policy interventions that we are seeing.

One of the theories circulating out there is called the “Dollar Milkshake Theory”. It’s counter to some of the doom and gloom scenarios that are out there right now—at least for the next 2-3 years. It’s not the easiest thing to understand. So, I appreciated the fact that this week’s podcast guest, Brent Johnson, allowed me to dumb his theory down enough so even a surgeon could understand it!

Let me know what you think!

Brent Johnson brings over twenty years of experience in the financial markets to his position as CEO of Santiago Capital.

Brent enjoyed more than nine years as a Managing Director at BakerAvenue, a $1.7Billion Asset Manager and Wealth Management firm, with offices in San Francisco, Dallas and NewYork. He was the lead advisor for several of the firms largest clients.

Before joining BakerAvenue, Brent spent nine years at Credit Suisse in their private client group. He got his start as part of the training program at Donaldson, Lufkin & Jenrette (DLJ) in New York prior to moving to San Francisco. He joined Credit Suisse in the fall of 2000 when the bank purchased DLJ.

Earlier in his career, Brent was a financial auditor for Philip Morris Management Company in New York City where he performed audits at the company’s headquarters as well as subsidiaries in Germany, Hong Kong and Richmond, Virginia.

Brent regularly gives interviews and speaks at conferences regarding precious metals, currency markets & macro-economic trends. His views have been quoted in numerous print, online and television outlets. He lives in San Francisco with his wife Mary and son Moses.

Shownotes:

Brent gives us a background on the current economic situation in the country

Why does it matter if the dollar is strong or weak?

What is the Dollar Milkshake Theory

Can the value of gold and the dollar go up simultaneously?

What are some of the key concepts to consider in your personal portfolio?

Brent talks about asymmetric dollar trades: an opportunity to bet a little in order to make a lot.

brent@santiagocapital.com

santiagocapital.com

@SantiagoAuFund

**221: Average Sucks!** Jul 19, 2020
“Be careful what you wish for…lest it come true!” -Aesop’s Fables

I remember back in college going to the mail center daily in hopes of finding and acceptance letter to medical school. Back then, I really romanticized the idea of being one of those heroes in a white coat.

Fortunately, I got what I wanted and was very excited. The next August I drove to Chicago from my parents home in Minnesota medical school orientation. On the drive, I heard a famous neurosurgeon on the radio (who is now HUD Secretary oddly enough). He was asked the question of how he knew that he was capable of something so delicate as brain surgery. He replied that he excelled at hand-eye coordination sports like table tennis as a kid.

It was then that I knew that I belonged in neurosurgery. After all, I was great at ping pong! And…being a brain surgeon sounded kind of cool. So, I decided then and there that my goal was to get into a neurosurgical residency training program—no small feat in the competitive world of medical school.

A few years later, not only did I get there, but I got into the program of my choice with the chairman that I envisioned being my mentor. Along the way, I even realized I liked neuroscience so it wasn’t *entirely for* my ego.

But two years into neurosurgical training, I came to a stark realization. I didn’t like being woken up at night! That was a problem. I was getting woken up every night I was on call with snowmobilers being flown in with brain trauma from the Upper Peninsula of Michigan. And while my fellow neurosurgical residents seemed to get an adrenaline rush out playing superman in the middle of the night, I was just tired and cranky.

I wanted to sleep. I wanted a life. That wasn’t going to happen the way I needed to in neurosurgery. So…I quit neurosurgery and decided to switch into a surgical specialty that did not involve the brain.

In order to do that, I headed out to San Francisco for a new residency program that left me, frankly, uninspired. I wrote academic papers at a feverish pace for recognition but my heart was not in it. By the time I finished training, I was just going through the motions with no passion at all.

Now, if you had told that kid back in college hoping to get an acceptance letter to medical school that he would finish surgical training at UCSF (my prestigious alma mater), he would have been absolutely thrilled. So why wasn’t I?

I guess the distant idea of an accomplishment or a kind of lifestyle is usually better than the achievement itself. After all, what you want in life is dynamic. Every time you get to a certain place in life, your desires have already moved on to the next thing.

I think it is sort of inevitable to one degree or another for most people. The extent of the dissatisfaction with life varies of course. But the need to grow and be better in one way or another is always there in high performers. You are not alone.

I am sort of the extreme example. I stopped practicing 8 years after surgical training. The 16 years of college, medical school, and post-graduate training could not convince me that I had to stay as it does to some of my colleagues.

I’ve found a better fit for myself in entrepreneurship and education, but I’m still trying to fill needs all the time. In fact, my latest decision was to get a real estate license in hopes of getting involved with luxury real estate in my town. Why? Well, it’s not for the money. The amount of money I make that is essentially time independent makes just about anything that requires my time to seem like a poor financial decision.

For me, it’s about getting out of the house! For the last three years since leaving Chicago, I have barely left my house. My work is online and in the podcast sphere. Sometimes I go a whole week without seeing anyone but my family.

In the meantime, I gained weight, I let my beard grow uncontrollably to unabomber levels and I simply didn’t feel energized. What I was missing in my life was interacting with people!

When I realized this, the old saying about choosing your profession based on what you do in your free time crossed my mind. Clearly it was a little late for me to get involved materially in the NFL. But I do spend a lot of time on Zillow and Trulia looking at luxury homes.

So, putting together luxury homes and interaction with people as a job requirement—it just made sense to get my license and to go to work.

Now don’t get me wrong. I am feeling very uncomfortable with this new identity so far. Right now, I’m the new guy who knows very little. It is a humbling experience that I have not felt for over a decade at least.

But sometimes radical change serves as a nice shock to the system and makes you feel alive. Who knows how this decision will play out but I’m excited.

Want to buy a house in Santa Barbara? Let me know!

Anyway, this idea of feeling restless in your skin is something that is common enough that my friend Michael Bernoff wrote a book about it. It’s called Average Sucks. That’s what we talk about on this week’s Wealth Formula Podcast!

Michael is the President and Founder of the Human Communications Institute, a leader in the personal and professional development industry. He works directly with individuals as well as corporate executives who desire to transform their corporate culture in an ever changing marketplace. His passion for his work is limitless and his dedication to positively impacting the world by empowering every individual is uncompromising.

During his own journey of self-discovery, Michael studied and modeled effective leaders recognized worldwide. He focused their philosophies, strategies, and techniques that have consistently produced rapid and lasting change. By combining a variety of these proven disciplines and his own strategies, Michael has created his own programs that have enabled both him and his clients to overcome limiting beliefs and achieve a life beyond limits.

**220: Crisis=Opportunity for Real Estate Entrepreneurs!** Jul 12, 2020
Entrepreneurs are just professional problem solvers who keep score by how much money they make. I know this because I am an entrepreneur at my very core. It’s not a choice I made, it’s the way I was born.

Entrepreneurship is not usually glamorous as frequently depicted in the movies or on reality shows. Most of us have more failures than we have successes and the failures often create profoundly negative effects for the people around us. It can be a bit of a curse.

But the high that an entrepreneur gets when identifying a problem and finding a solution is very strong. Being able to look at an inefficiency and realizing that it can be fixed by creating a business around it is exhilarating.

And when is the best time to find inefficiencies in a business model?… When times are bad!

You see, when times are good, profitable businesses usually leave way too much meat on the bone because they are already fat and happy. Few people look at ways of doing things better when they are already making a good profit.

Only when the tide goes out do you discover who’s been swimming naked. Profits get tight and businesses have to rely on becoming more efficient to survive. This is the perfect setting for the entrepreneurial mind who sees opportunity where others see crisis.

My friend Jorge Newbery is the purest entrepreneur that I know. He is, of course, the founder of AHP Servicing and Debt Cleanse. He has been on Wealth Formula Podcast several times before.

This week, we are going to talk about his latest business that stems from the embargo on foreclosures note holders are now facing in many states—specifically those who are trying to foreclose on vacant property.

In usual Jorge style, it’s an elegant solution where everyone wins. The good news is that there is an opportunity for you to participate and get your own feet wet as an entrepreneur.

Don’t miss this week’s episode of Wealth Formula Podcast as Jorge and I discuss the business he calls Pre-REO.

Jorge Newbery is the Chairman and founder of American Homeowner Preservation, LLC, or “AHP.” Jorge was the President of Budget Real Estate Inc. from 1995 to 2008, where he brokered over 1,000 troubled Department of Housing and Urban Development and real estate owned properties and acquired, renovated and operated over 200 distressed multi-family, single-family and commercial properties. Prior to that, Jorge was the co-founder of Sunset Mortgage from 1992 to 1995.

Barry is Vice President where he is part of the company’s Executive Committee and leadership team focusing on preREO and REO. Barry brings over 29 years of mortgage servicing and sales experience with a history of providing technology solutions that enable operators to perform at their peak. Barry was previously Vice President of Exceleras LLC and Senior Vice President of Business Development for OrangeGrid Empowering people in progress.

Shownotes:

What happens when a person defaults on a loan?

How does Pre-REO turn dead money assets into monetized assets?

Jorge talks about how people can use Pre-REO to acquire properties at a huge discount.

Learn more abour PreREO: prereo.com

(800) 555-1055

**219: Macrowatch with Richard Duncan!** Jul 05, 2020
When in Rome, do as the Romans do. If we follow that advice, what do we do in an economic environment like today?

Austrian economists would tell us to stop printing money and to keep the Fed out of the bond market.

If we did that, we would go into a depression. No one denies that—not even the Austrians. The disagreement is on whether or not it’s the right thing to do for the long term.

The bad news for the Austrians is that they are grossly outnumbered and we do not live in a gold-backed world.

We live in a Keynesian wet dream with essentially limitless money printing and government spending.

For now, it’s keeping the economy alive. We did the same type of stuff in 2008 and it saved us then as well. Oh…by the way, we didn’t get the inflation that was predicted by the Austrians either. Instead, we shipped it off to the rest of the world without trade deficit. We could very well do the same this time around.

It’s a bizarre economy that’s for sure. But don’t fight it. Just try to understand it and do as the Romans do. There may be a day of reckoning from this game we are playing but we need to ride this wave as long as we can. It’s the only thing we can do.

But again, the first step is trying to understand what is going on. Understanding macroeconomics gives you a chance in a crazy financial climate.

That’s what we are going to try to do again on this week’s episode of Wealth Formula Podcast as I once again interview economist Richard Duncan.

Richard Duncan is the author of three books on the global economic crisis. The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005), predicted the global economic disaster that began in 2008 with extraordinary accuracy. It was an international bestseller. His second book was The Corruption of Capitalism: A strategy to rebalance the global economy and restore sustainable growth. It was published by CLSA Books in December 2009. His latest book is The New Depression: The Breakdown Of The Paper Money Economy (John Wiley & Sons, 2012).

Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. He also worked as a consultant for the IMF in Thailand during the Asia Crisis.

Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television, as well as on BBC World Service Radio. He has published articles in The Financial Times, The Far East Economic Review, FinanceAsia and CFO Asia. He is also a well-known speaker whose audiences have included The World Economic Forum’s East Asia Economic Summit in Singapore, The EuroFinance Conference in Copenhagen, The Chief Financial Officers’ Roundtable in Shanghai, and The World Knowledge Forum in Seoul.

Richard studied literature and economics at Vanderbilt University (1983) and international finance at Babson College (1986); and, between the two, spent a year traveling around the world as a backpacker.

Shownotes:

How much money has the Federal Reserve printed since the Covid-19 Pandemic started?

Why printing more money does not automatically cause inflation

Does Globalization allow us to essentially export our inflation?

Can we just keep printing more money forever?

RichardDuncanEconomics.com

**218: Resilience of Apartment Investments During the Pandemic: Dante Andrade** Jun 28, 2020
Robert Kiyosaki’s Real Estate Advisor, Ken McElroy, was kind enough to give his perspective on the current state of apartment investing on last week’s episode of Wealth Formula Podcast.

Ken’s perspective on the state of the apartment market was pretty bleak. While there is no doubt I respect Ken’s views, I also think it is important to get the perspective of others to begin formulating your own opinions.

Remember smart people can, and often are, wrong. The extreme example is someone like Peter Schiff. I think Peter Schiff is a very smart guy but he’s also wrong a lot. He’s doing an end zone dance right now about the economy going south, but he’s been predicting that for years. Even a broken clock is accurate twice every day.

Ken is definitely not a zombie apocalypse guy, but he also stopped buying real estate 3-4 years ago and has been on the sidelines since. During those years, there was money to be made and others as smart as Ken did exactly that.

Don’t get me wrong, I respect the hell out of the guy. I just think it’s important to not take any one person’s predictions as fact. That’s not fair to him either.

Instead, let us do what any intelligent person should do. Let’s gather facts. Let’s talk and listen to people on the ground who are monitoring what’s going on in real time.

It’s hard to do that when you are not in the business every day. The most successful operators are following everything in real time and, so far, what’s really happening may surprise you.

One of those guys you should be listening to is one of my real estate partners, Dante Andrade. Dante is based in Dallas and is one of the most granular researchers of real estate that I have ever met.

So, if you are one of the many apartment investors out there trying to get informed of what’s really going on, you will NOT want to miss this episode of Wealth Formula Podcast.

Dante is a man of many multifamily real estate hats. He is a buyer’s broker in Dallas, meaning that he is dedicated to the buyer side of acquisition of large multifamily real estate. He’s been involved in just under a billion dollars worth of transactions, focusing again specifically in the Dallas/Fort Worth market. He’s also a real estate coach and mentor and finally, and probably most importantly, he is my partner in our group called Touro Asset Management Group as we acquire a cash flowing multifamily real estate in Dallas.

Shownotes:

What today has been the net result of this entire COVID-19 assault on multifamily?

What’s going on with Texas?

Dante talks about why there aren’t more discounted properties in the market right now

Why are people still paying rent despite the pandemic?

Sometimes it’s better to be lucky than smart

**217: Ken McElroy: What’s Happening with Multifamily Real Estate?** Jun 21, 2020
I have been on the record for a while now anticipating the “tsunami following the earthquake.” In other words, COVID-19 was a destructive economic force but the aftermath may be even worse.

The theory is based on historical observations of how these things tend to play out. The problem and potential flaw in the rationale, however, is that there really isn’t a situation that is truly parallel to what we face now.

When has the entire world shut down for business for months at a time before? Never.

But when has a country with the economic might of the United States flooded the system with so much money and so many ways to keep businesses alive? When has a country paid some people more to be unemployed than to work? I can’t think of any time like this. Can you?

The point is that beyond my predictions and those of the other armchair economists whom you may follow lies a harsh reality—none of us really know what’s going to happen.

Sure that tsunami I keep talking about seems likely but it may not happen because fiscal and monetary policy do their job and an earlier-than-expected vaccine saves the day.

Alternatively, the tsunami could hurt selective parts of the economy and leave others relatively unscathed. So far, in multifamily real estate, our **investor club** is seeing asset performance matching if not exceeding pre-COVID levels across our portfolio!

Our portfolio is a very specific niche, however. We focus on working-class apartment buildings in rapidly growing red state cities such as Dallas and Phoenix with relatively low cost of living index.

The details matter. Being in Texas instead of California means we don’t have to worry about “rent strikes” and courts saying how much we can charge for rent. Population growth gives a natural benefit of increased housing demand.

Being in working-class housing right now means two things. First, we have a lot more people moving down from A to B and high C class housing then we have C class tenants moving down to the depths of D class hell.

Our working-class tenants do appear to be working and those who are not are receiving unemployment benefits that are exceeding their typical salaries. These unemployment benefits are more than enough in low cost of living areas to buy food *and* pay the rent.

Conversely, people living in the A class apartments are losing jobs and unemployment doesn’t provide them with the ability to maintain the same lifestyle.

Anyway, that’s what we are seeing right now. I should add that the demand of this housing has been such that we are continuing to raise rents. Crazy, isn’t it?

Anyway, the point I’m trying to make here is that when you listen to anyone right now about what’s going to happen with the economy and with real estate, you have to listen to them in a nuanced context.

You also need to remember that we have no idea what further fiscal and monetary policies will be unleashed in the next few months to further mitigate the damage to businesses.

Listen to everyone who is worth listening to but make sure you identify the context and do a little thinking for yourself. Now, one of the guys that we should all listen to in the area of apartment buildings is Ken McElroy. Ken is probably best known as Robert Kiyosaki’s Rich Dad advisor on real estate.

However, I listen to Ken because he is a multifamily real estate syndicator who has had a lot of success for a long time. Ken’s niche is a little different than mine. He’s an A class and new construction guy but what he has to say in the context of what’s going on right now is important for all of us to digest.

So make sure to listen to this week’s episode of Wealth Formula Podcast as Ken McElroy and I dive into the Post-Covid Real Estate Reality.

Ken McElroy is the epitome of the word entrepreneur.

For over two decades, Ken McElroy has experienced massive success in the real estate world-from investment analysis and property management to acquisitions and property development. With over $750 million investment dollars in real estate, Ken offers a unique perspective on how to get the biggest return on investments.

Ken is the author of the best-selling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and most recently his book on entrepreneurship: The Sleeping Giant, where he shares his real-life examples and ideology of how to be successful in business and in life. As the Real Estate Advisor to Robert Kiyosaki of The Rich Dad Company, Ken is also a chapter contributor in the newly released Rich Dad book, More Important Than Money: an Entrepreneur’s Team.

A champion and advocate for entrepreneurs and real estate investors, Ken has spoken worldwide at top industry events. With media appearances on television and radio, Ken also host Entrepreneur Magazine’s Real Estate Radio program, where he helps listeners navigate the financial and legal arenas of real estate.

Never taking life for granted, Ken is active in the community. He has served on advisory boards for Child Help and AZ Food Banks where he conducted the largest food drive in the state of Arizona. Ken was the Walk Chair for Autism Speaks Arizona for both 2015 and 2016. He currently serves on the Board of Directors for the Southwest Autism Research and Resource Center (SARRC). Ken and his family reside in Scottsdale, Arizona. In the MC Family he is a strong advocate for The Sharing the Good Life Foundation allowing all MC employees the opportunity to join him in the pursuit of giving back to the community.

Shownotes:

How has the pandemic affected Ken’s business?

Real estate fills a need for the people, not the other way around

When will we know when it is time to buy?

Ken’s latest book, “Return to Orchard Canyon”

kenmcelroy.com

mccompanies.com

**216: Tom Wheelwright: Update on Taxes and the Economy!** Jun 14, 2020
In our latest **Wealth Formula Network** video conference, a question was asked that I think pretty much all of us have at this point.

If the economy is in the tank, why does the stock market seem to be tone-deaf to what’s going on? It’s the elephant in the room, right?

Well, I don’t claim to know the answer to that but let me give you my two cents. First, fiscal and monetary policies are in full force. The Federal Reserve has the printing press on full time and we have added a trillion dollars to the debt in just the last couple of months.

The Federal Reserve has shown willingness to buy high yield corporate bond ETFs (aka junk bonds)—literally picking winners and losers.

If they are willing to do that, what’s keeping them from buying S&P 500 ETFs? The law? Well, at this point that seems like a formality. If the ship starts sinking again, it seems not unlikely for this to occur.

So, if you are managing client money, what are you going to do? If you missed out on the 40 percent recovery since March, you are probably going to get yourself fired. Instead, it might make more sense just to follow the money—the Federal Reserve in this case. To me, that’s why stocks are doing as well as they are.

To say the least, the economy has significant challenges ahead. No one doubts that. However, remember that a crisis often brings about opportunities. These are the times when wealth is transferred significantly and you want to try to be on the receiving end of that.

As part of its arsenal, the government has provided substantial support to small businesses and by changing the tax code. It is imperative that you know the changes that are going on. Even if you are not a business owner, understanding what’s happening on the ground will help you better understand the realities of the economy and prepare accordingly.

For that reason, I have asked my friend and CPA, Tom Wheelwright to join us again on this week’s podcast to explain the most recent updates to the tax code and what he is seeing with his clients in real-time.

Tom Wheelwright, CPA is the visionary and best-selling author behind multiple companies that specializing in wealth and tax strategy. Tom is also a leading expert and published author on partnerships and corporation tax strategies, a well-known platform speaker and a wealth education innovator.

In Tom’s best selling book Tax-Free Wealth, Tom shows entrepreneurs and investors how to build massive amounts of wealth through practical and strategic ways to permanently reduce taxes.

Shownotes:

What is the Paycheck Protection Program (PPP)?

What is the EIDL Loan

Be careful. Anytime you sign a loan, make sure you read the loan provisions.

What is the Main Street Loan?

wealthability.com

**215: Robert Kiyosaki on the Post-Pandemic Economy!** Jun 07, 2020
Robert Kiyosaki is the author of *Rich Dad Poor Dad,* the best selling financial book of all time. He went on to publish several books including Cashflow Quadrant which fundamentally changed my life.

To say that Robert Kiyosaki has made an impact in the world is an understatement. He has helped to create a generation of entrepreneurs inspired by his writings. Many, including myself, discovered the very concept of entrepreneurship for the first time through his teachings.

Pretty impressive right? Imagine making such an impact on the world. It sure sounds like a life worth living to me. And you know what makes it all the more inspirational? He was 50 years old when he published Rich Dad Poor Dad!

Of course Robert was successful before Rich Dad Poor Dad. But he would be the first one to agree that the trajectory of his life really peaked after 50.

This pandemic has taken its toll on many of us. While thousands have died, the emotional casualties will never be truly appreciated and is reflected, in part, by the social unrest we are seeing across this country.

In that context, I am looking for something to be hopeful about today. To me, Robert Kiyosaki’s books were paradigm changing when I first read them. But now, as a 46 year old guy feeling a little blue, it’s his success later in life that has me feeling inspired.

The truth be told, I don’t agree with everything Robert says these days, but he is someone that has earned the right to be heard. As a guy who does not routinely engage in hero worship, he has also earned my eternal gratitude.

As such, it is my pleasure to present you with this week’s Wealth Formula Podcast featuring an interview with Robert Kiyosaki regarding the post-pandemic economy.

Robert T. Kiyosaki

Best known as the author of Rich Dad Poor Dad—the #1 personal finance book of all time—Robert Kiyosaki has challenged and changed the way tens of millions of people around the world think about money. He is an entrepreneur, educator, and investor who believes the world needs more entrepreneurs who will create jobs.

With perspectives on money and investing that often contradict conventional wisdom, Robert has earned an international reputation for straight talk, irreverence, and courage and has become a passionate and outspoken advocate for financial education.

Robert and Kim Kiyosaki are founders of The Rich Dad Company, a financial education company, and creators of the CASHFLOW® games. In 2014, the company leveraged the global success of the Rich Dad games with the launch of new and breakthrough offerings in mobile and online gaming as well as Rich Dad’s CLUTCH, a digital learning platform.

Robert has been heralded as a visionary who has a gift for simplifying complex concepts—ideas related to money, investing, finance, and economics—and has shared his personal journey to financial freedom in ways that resonate with audiences of all ages and backgrounds. His core principles and messages—like “Your house is not an asset“ and “Invest for cash flow” and “savers are losers”—have ignited a firestorm of criticism and ridicule… only to have played out on the world economic stage over the past decade in ways that were both unsettling and prophetic.

Shownotes:

The new normal

Robert talks about the Shadow Banking System and the biggest stock market crash in history

The dominoes are now only starting to fall and we have yet to see the full impact of Covid-19 on the global economy

What does Robert think will happen in Post-Covid America?

Robert talks about his book Who Stole My Pension

214: Ask Buck Part 3 Jun 07, 2020

There were a few questions left in the “Ask Buck” file that have finally been answered! You can listen to the latest episode HERE.

The good news is that this format seems to be quite popular. I really do enjoy these virtual interactions and encourage you to keep those questions coming!

Enjoy.

Bonus Episode: Tom Wheelwright on Important New Changes in the Tax Code! May 31, 2020

213: Ask Buck Part 2 May 31, 2020

As I mentioned last week, we had a lot of questions piled up in the “Ask Buck” file that I need to get answered. As a result, we ended up with multiple shows. You can listen to the latest episode HERE.

The good news is that this format seems to be quite popular. I really do enjoy these virtual interactions and encourage you to keep those questions coming!

Now, in the interest in maximizing your weekly experience, in addition to the “Ask Buck” episode, you will find a bonus episode which features the webinar recently done for us by Tom Wheelwright on the latest tax legislation that you need to know about.

You will get more out of Tom’s talk with the video presentation which you can access at the following link: https://www.wealthformula.com/critical-changes-webinar/

Let me know what you think!

212: Ask Buck Part 1 May 24, 2020

Ever since this COVID-19 thing started, it seems like there is no other news. Maybe what that tells us is that most of the news we ordinarily get on a daily basis is worthless.

But seriously, doesn’t it seem like the world has just frozen into a COVID-19 coma? My ER doc friends joke that everyone stopped having heart attacks and strokes since this pandemic started.

As a podcaster, I realize that it is very difficult to not talk about the viral elephant in the room, but it gets old doesn’t it?

Anyway, the virus hit us just as we were doing our 200th episode. At that time, we were going to do a couple of special “Ask Buck” shows but we only got a few of the questions answered.

These shows tend to be well received so, if you are one of those people who enjoys hearing my opinion, you are going to love the next few weeks as I get through all of these questions—some of them are pretty old!

So, if you want to hear my opinion on investing, taxes and, of course, the pandemic, make sure you listen to the first in a series of “Ask Buck” episodes HERE!

**211: Are We Headed Towards a Depression NOW?** May 17, 2020
“It’s hard to make predictions—especially about the future.” That’s one of my favorite Yogi Berra quotes. It’s funny but also incredibly true.

Think about what is happening now with COVID-19. Social scientists make predictions based on assumptions. The epidemiologists are making projections on the spread of the virus even though they have no significant knowledge of what they don’t know.

We are learning something new about this virus everyday. To further complicate things, the virus can mutate. There are already two strains and there could be more in the future makings its virulence and contagion even more unpredictable.

In the meantime, economists are basing their predictions on the work of the public health professionals. Their models are predicated on the moving targets of the public health projections. They are also basing models on an assumption that there will be a vaccination or cure in some specified period of time.

What a mess right? In fact, no one really knows what’s going to happen next month or tomorrow for that matter. We are in slow motion as the economic fall-out declares itself. Monetary and fiscal policy measures will be unparalleled in size and scope but no one really knows what the real impact of those measures will be.

If I am sounding a bit nihilistic, it may be because our Wealth Formula Network mastermind is currently reading Nassim Taleb’s *The Black Swan* as part of our book club. A lot of people refer to this book when they talk about unpredictable events—even if they didn’t read the book! I do highly recommend it myself although be forewarned, it is not a light read.

Taleb actually doesn’t think that COVID-19 as a black swan event. Why? He, along with many others, had predicted this kind of pandemic in recent years based on recent viral outbreaks and the rise of globalization. There are documentaries about the likelihood of a *Disease X* epidemic and there was even a White House Pandemic Task Force that was dismantled by the current administration.

But what Taleb does see as a potential black swan event is what happens as a result of this *gray*swan. The unpredictability of this economy is ripe for a true event that none of us can predict.

So what’s the point of making predictions? Well, most of life does stay on the bell curve. In other words, economics can provide value in the bigger picture when known factors are modeled in. As long as you can stay away from highly unlikely events, they can serve people and businesses well.

ITR Economics is a firm that I follow. They’ve been right on 97 percent of their economic forecasts over the last 70 years or so. That said, for the reasons discussed earlier, they didn’t see the severity of COVID-19 impact coming either—again because their assumptions were based on then-available public health assumptions.

At any rate, the key to get the most out of economics is to be agile and redirect projections as assumptions change over time.

For that reason, this week’s episode of Wealth Formula Podcast revisits the question of the economy with Catherine Putney of ITR economics. As you may recall, she was on the show shortly before all of our lives suddenly changed and businesses closed a couple months ago.

Make sure to tune in as Catherine gives us an updated forecast for the coming year and beyond!

Catherine Putney specializes in applied research for business cycle trend analysis, growth-cycle trend analysis, and implementing cyclical analysis at the practical, company level. She holds a master’s degree in economics from the University of New Hampshire.

Catherine regularly contributes articles to ITR Economics’ flagship publication, the ITR Trends Report™, focusing on the manufacturing sector of the US economy. Catherine and the ITR team have put this expertise to work for companies across a wide range of industries, including manufacturing, chemicals, fibers, healthcare, distribution, real estate, construction, and technology.

**209: 4 Doctors, a Virus, and a Battered Economy: Part 2** May 03, 2020
Last episode we talked about the realities of COVID-19—what it is, what makes it so challenging and how dangerous it really is. We also talked about potential medical treatments. In this episode, we go into vaccinations and economic impacts of COVID-19.

Listen to Part 1 here: https://www.wealthformula.com/podcast/208-4-doctors-a-virus-and-a-battered-economy-part-1/

Dr. John Foley is a neurologist specializing in clinical neurology

Dr. Ian Kurth is a neuroradiologist

Dr. Paresh Mehta is a gastroenterologist

Shownotes:

The path to the new normal

The doctors talk about their current investments and how they have been affected by the Covid-19 situation

**208: 4 Doctors, a Virus, and a Battered Economy: Part 1** May 03, 2020
What a strange time we live in where even public health issues are politicized. The wingnuts on the right want to downplay a virus that has already taken the lives of more people than the Vietnam war.

The wingnuts on the left want to demonize anyone who even suggests an alternative approach to dealing with the pandemic outside of staying at home in perpetuity. They want us to completely ignore the pain, suffering, and death that will inevitably occur from a financial depression.

The polarity of thought on this black swan event is the product of politicized news—on both sides. That’s a problem for us all.

As a physician and an over-all rational guy, this kind of partisanship when we should be seeking facts is maddening. However, it is not surprising. When I was a kid, there was only one set of facts that people were given and they made decisions based on that. We now live in a world of “alternative facts” which has really made it a confusing place to navigate.

That said, the idea that there are alternative sets of facts in science is, in fact, *fake news*. In science, we follow the studies. Sometimes studies show disparity but, over time, we get to the bottom of things.

Take Hydroxychloroquine for example. Donald Trump has been talking it up like it’s a vitamin with no down-side. That’s not true of course. There is some potentially severe side-effects of the drug that have actually killed people in the past few weeks.

On the other hand, in order to prove Trump wrong at every turn, the liberal news media makes Hydroxychloroquine sound like an asinine treatment of COVID-19 in any form.

The reality… the evidence suggests that the role of Hydroxychloroquine in the treatment of this illness may be nuanced and can’t be characterized simply as a black and white issue.

That’s just one example of the complex questions that are being dealt with in overly simplified ways in the press. It’s not helpful for anyone who wants to understand what’s really going on out there.

So, this week, I have put together a two-podcast series of interviews with three other physician/investors for you to get some real facts and to help you understand where we currently are with this public health and financial disaster.

Listen to Part 2 here: https://www.wealthformula.com/podcast/209-4-doctors-a-virus-and-a-battered-economy-part-2/

Dr. John Foley is a neurologist specializing in clinical neurology

Dr. Ian Kurth is a neuroradiologist

Dr. Paresh Mehta is a gastroenterologist

Shownotes:

The current Covid-19 situation

Drugs that are currently being considered as possible treatment for Covid-19

Why does it take so long to develop vaccines?

**207: Non-Performing Notes in a Non-Performing Economy with Jorge Newbery** Apr 27, 2020
What are notes? Well, for simplicity, let’s call them mortgages. You owe the lender money when you take out a mortgage. However, that lender can sell that mortgage to someone else. That’s what it means to buy or sell a note.

Notes can be performing or non-performing. Non-performing notes are simply those that have had trouble paying on time in the past. So, if you buy one of those, you either pay people to move out, foreclose on the property and sell the asset or possibly negotiate the payment to something a person can afford and let them stay in their home. That last option, of course, is a win-win situation.

Bottom line is that, in principal, the note business is not that hard. But as is often the case, the devil is in the details. I found that out the hard way when I tried to learn the note business myself to start a new venture.

As it turns out, it wasn’t something that I could do as a part-time gig—at least not at the level that I found personally acceptable. To do really well consistently in the note business requires volume, creativity and a ton of experience.

As we sit here in the middle of a black swan public health and financial event, I’m just glad I realized my limitations and didn’t complicate my life any more.

One of the great lessons that I have learned with age is that often the best thing to do is *nothing at all*. When I was younger I used to chase after shiny objects and I was not focussed. Doing that makes it difficult to become really good anything.

If I have one bit of advice for anyone going down the entrepreneurial route, it is to stay in your lane and focus. You can’t be the best in the world at everything and, if you try, you won’t be very good at anything.

As investors, our most important skill set is often to pick a jockey. We may not be doing the heavy lifting but we need to know who will do it well. This is a very different skill set than being an actual operator and it is important not to confuse the two.

When it comes to notes, there is really only one guy I trust: Jorge Newbery. That’s the honest truth. Jorge is smart as a whip and has a lot of scar tissue from the past to help him navigate the current crisis.

This week on Wealth Formula Podcast features a really good conversation with Jorge that I had about not only the note market but the residential real estate market in general. If you are curious of what someone who lived through 2008 thinks of where we are today, you won’t want to miss this episode.

Jorge P. Newbery Is On A Mission To Help Americans Crushed By Unaffordable Debts.

He is Founder and CEO of Debt Cleanse Group Legal Services, a nationwide legal plan to help consumers and small businesses get out of debt without filing bankruptcy. He is also Chairman of American Homeowner Preservation LLC and AHP Servicing LLC, which crowdfund the purchase of nonperforming mortgages from banks at big discounts, then share the discounts with struggling homeowners. He is also a non-attorney Partner in Activist Legal LLP, a law firm in Washington, D.C.

A 2004 natural disaster triggered the financial collapse of Newbery’s former business, leaving him with $26 million in debts he could not pay. Newbery rebuilt himself through AHP, sharing what he learned from his challenges to help families at risk of foreclosure stay in their homes. In 2018, he founded Debt Cleanse Group Legal Services to assist consumers and small business owners settle all types of debts at big discounts – and not pay some at all, He is also a Board Member of the Group Legal Services Association.

He authored Burn Zones: Playing Life’s Bad Hands; Debt Cleanse: How To Settle Your Unaffordable Debts For Pennies On The Dollar (And Not Pay Some At All); and Stories of the Indebted.

Shownotes:

What is a Note, what is a non-performing note, and what is AHP Servicing doing?

Jorge talks about AHP Servicing’s strategy: Play Offense

Will 2020 be worse than 2008?

Jorge talks about the risk of buying too early and spending too much.

ahpservicing.com

**206: The Realities on the Ground** Apr 19, 2020
As expected, the government roll out of the multi-trillion dollar stimulus program to save the economy has been sloppy and slow.

People who need to tap into unemployment insurance can’t get through on the phone. Businesses who need money can’t get the money they applied for and, when they do, the terms are very unclear.

Some businesses have given up. Rather than take a big loan from the government to their grave, they have decided to call it quits while behind.

Meanwhile, the Dow Jones Industrial average showed a remarkable turn-around over the last couple weeks after dipping down below 19,000. That’s great if you have money in the market but, quite frankly, I don’t understand the rally.

Most businesses are closed so how could their stock be worth more than it was two weeks ago? We still aren’t clear of when this pandemic and all of its stay-at-home orders will end. Even when it does, that’s really just the beginning.

People aren’t going on vacation or sports events or concerts until there is a vaccine. That’s not going to happen for a while. When the economy “opens up”, it will only be half-open and certainly not running on all gears.

Thousands of small businesses will not survive this ordeal and that will leave many unemployed. I would not be shocked to see double digit unemployment going into the end of the year.

From an economic standpoint, we are at the very beginning of the fallout. So why is that stock market going up again?

I suspect most people who are buying into this market right now aren’t small business owners or facing the prospect of losing a job. There is a fundamental disconnect between the markets and reality.

For those of us who are small business owners or real asset investors, we have a little bit better perspective. If you have a small business and employees to pay, you may understand that there is a possibility that you may not recover from this event.

If you own residential real estate right now, you get the idea of what your tenants are going through and how that is affecting your ability to collect rent. If you aren’t well capitalized, you are freaking out.

I hope you don’t lose any property, but I can pretty much guarantee you that distressed assets will become common in the not-so-distant future. The earthquake just happened. The tsunami of financial fall-out has yet to arrive.

To get a better perspective of what’s going *on the ground*, this week’s Wealth Formula Podcast features a conversation between another physician podcaster and me. Join us as we talk about not only the COVID-19 disease, but the real time economic impact both of us are seeing on our businesses and investments.

David Draghinas is the founder and host of Doctors Unbound, your site to get inspiring stories about doctors doing extraordinary things.

Shownotes:

Dave talks about how asymptomatic carriers make Covid-19 more dangerous

How bad will the economic fallout be from Covid-19?

How are Dave’s current investments being affected by Covid-19?

This is a good time to figure out your risk tolerance.

doctorsunbound.com

**205: How to Protect Your Real Estate Investments** Apr 12, 2020
I have to admit, I did not think that this Coronavirus thing was going to hit us this hard.

To be clear, I’m not just talking about how deadly this pandemic has turned out to be in terms of human life. A month ago, if you told me that just about every small business in America would be shut down, I’d have thought you were crazy.

I guess I had become accustomed to hearing about scary diseases like the Chinese SARS epidemic in 2002 and Ebola. They sounded scary but *distant*—like someone else’s problem. Not this time I guess. We are getting crushed!

There is an old saying that you should never let a good crisis go to waste. This is a pretty damn good crisis so let’s make the best of it! Situations like these often create opportunities for entrepreneurs and bargains for investors. For the motivated, here’s your chance. On the hand, If you aren’t feeling quite that ambitious, you can also work on your defensive game.

Be mindful of your position in this stressed environment. Are you happy with your financial portfolio? Are you invested in the right asset classes to withstand a downturn in the economy?

How are those operators you invested with doing? Are they giving you confidence or making you feel a little uneasy? For better or for worse, soon the tide will go out and we will discover that some big talkers were actually swimming naked.

It ain’t going to be pretty but once in a while you need a Darwinian event like this to shake things up and come out better on the other side. After all, chances are that this will not be the last black swan you encounter in your life.

As you reflect on these questions, I suggest that you listen to this week’s Wealth Formula Podcast interview with Doug Lodmell. This was a discussion on real estate asset protection that was recorded before the pandemic hit us.

However, the contents of this interview are incredibly relevant to what’s going on today. Think about the business owners who are becoming insolvent as we speak and the creditor issues they will be facing. Any real estate owned by those business owners will look like red meat to people trying to get paid on loans gone bad.

Of course it’s better to get this type of protection in place ahead of a crisis but sometimes it takes a good scare like this to actually put a plan in place.

Anyway, make sure to listen to this interview with Doug—especially if you own any kind of real estate or are even a limited partner in a real estate syndication or fund.

P.S. Attached below is a copy of the white paper Doug talks about in this interview that outlines the different levels of asset protection you should consider.
Key Concepts of Protecting Real Estate Download

Born in Geneva, Switzerland, attorney Douglass S. Lodmell has excellent knowledge and the highest level of experience in estate planning, taxation and strategic asset protection for domestic and international clients. In addition to a Juris Doctorate from Cardozo School of Law, Douglass has a Bachelor of Science degree in finance as well as an advance law degree (LL.M.) in taxation from NYU School of Law. He has authored numerous articles for professional journals as well as a popular book about the explosion of lawsuits in America called The Lawsuit Lottery: The Hijacking of Justice in America. Doug’s extensive experience in asset protection make him a frequent guest speaker at medical, and professional conferences and seminars throughout the country, as well as teaching concepts of asset protection to other attorneys at continuing legal education seminars throughout the country.

Shownotes:

Why is real estate one of the most difficult assets to protect?

Gross is vanity, Net is sanity and Cash is king

What is a Bridge Trust?

Who needs asset protection?

douglass.lodmell@lodmell.com

https://www.lodmell.com/

800-231-7112

**204: Wealth and Tax During a Meltdown: Tom Wheelwright, CPA** Apr 05, 2020
Remember a month ago when this whole Corona-thing was sort of a theoretical issue? After all, we only had 15 cases reported in the whole country and no one had died. Sure, we were starting to see the news in China and Italy but they were so far away. Even the president said it would just disappear!

But then every day things got substantially worse—exponentially worse. And now, even those who mocked the hysteria are now admitting that this is, indeed, a big deal.

I won’t pretend that I knew what was coming. I didn’t have the perspective to see it and those who did, didn’t make it clear to the rest of us. They were too busy selling their stocks! But it’s here now and it’s going to get worse—a lot worse. Thousands will die. Unemployment will be well over 20 percent. There will be suffering beyond the disease in the form of financial follow-out.

But the good news is that this episode in history will eventually be a thing of the past. Eventually it will be a bad memory. We will move on with our lives as we should. BUT…we should not forget because, although history does not repeat itself, it does rhyme. There will be another pandemic eventually. It could be even worse than the current one.

And we shouldn’t be surprised when it happens. After all, even though most of us thought coronavirus was over-blown to a certain degree, there was plenty of evidence at the national security level that this kind of “virus X” was quite possible and was something for which we were unprepared.

As a society, we knew it was possible and did nothing to protect ourselves. We can blame the government, but the government only reflects our own priorities. Unfortunately, our priorities don’t seem to plan for much beyond today.

This current pandemic worries me but I know it is finite. What worries me even more is all of the ticking time bombs that we know are out there, but are choosing to ignore the same way we ignored the risk of a pandemic. We are being short-sighted on multiple fronts. Some of these perceived time-bombs could be real and the consequences devastating.

For example, we know that our power grid is vulnerable to cyberattack. If our grid went out tomorrow, it would mean more than the lights going out. It would mean amongst other things: hospitals being rendered non-functional, a shut-down of communication of all kind, and no more clean running water. People would die. It’s a very scary scenario that national security has identified as a threat. But we do not have the appetite to spend on new infrastructure and defense now.

Another case in point—climate change. I don’t understand frankly why climate change opinions seem to be affected by party lines as they clearly are. I am an anomaly in that I am a fiscal conservative yet I am open to the idea that there is potentially serious hazard in ignoring climate change as a national security threat.

It doesn’t take a meteorologist to figure out that something funky is going on when thousand year storms start happening every couple of years. And, although I believe it is man-made in nature, you don’t have to believe that to concede that there could be deadly consequences to us or our children if we choose to simply call it a hoax.

Let me ask you this, would we be better off today if we as a country had taken Coronavirus more seriously two months ago? Even if coronavirus ended up being just another flu, would we have suffered by being overly-conservative with preparation and early lock-downs? Of course not. So why not look at climate change the same way? In my mind, if those of us who think climate change is a serious danger to the world are *wrong*, the worst case scenario is that we end up with cleaner air and water. Anyway, save yourself the time with hate-mail. I’m just providing some food for thought—call it civil discourse.

Bottom line is, I hope that at the end of this national nightmare, we can start to look at where else our exposure is and start coming up with some plan b’s that might be needed when a second passport does you no good.

It is a time right now that I think we should all use for reflection on the macro-level as well as the micro-level. And of course, this is not a political show so we will keep it about money from here on out.

I will say that there are plenty of lessons to be learned by this kind of financial stress test for all of us. The government is doing what it can to keep us on life-support until we get that cure or vaccine but we will all be challenged to varying degrees and it is a good time to assess the defense that you need to shore up for the next disaster.

My friend Tom Wheelwright will be on this week’s podcast to talk about all of this and more. Tom is the Michael Jordan of CPAs, a brilliant entrepreneur, and has literally saved me millions of dollars in taxes over the last several years.

In fact, you may come away from this podcast realizing that you might have actually come out ahead financially because of the tax relief provided by this disaster! Listen HERE.

P.S. Listen to the whole show because Tom has an incredible offer for our listeners!

Tom Wheelwright is a CPA, CEO of WealthAbility (Tempe, Arizona) and Best-Selling Author of Tax-Free Wealth. Wheelwright is a leading wealth and tax expert, global speaker, and Entrepreneur Magazine Contributor. Tom is best known for making taxes fun, easy and understandable, and specializes in helping entrepreneurs and investors build wealth through practical and strategic ways that permanently reduce taxes.

Shownotes:

How are small businesses responding to the current economic freeze?

What are Tom’s thoughts about the government stimulus package?

What are some of the tax relief provided by the current bailout plan

WealthAbility’s special offer for the month of April

https://wealthability.com/

**203: Profiting Through the Only Guarantee in Life.** Mar 29, 2020
A few days ago we had the worst single day loss in US stock market history. The next day we had the single best day seen by the Dow Jones Industrial average in 80 years. I have no idea what kind of volatility there will be between the time I write this email and when you actually read it but it’s kind of ridiculous. Don’t you think?

This volatility is exactly why I have stayed away from stocks throughout my adult life. I just don’t get it. How does a fiscal stimulus help the stock market if the entire country is, for all practical purposes, unemployed? The economy is frozen and there will be a deep recession. How long it lasts is unclear but stocks going up in value right now makes no sense at all.

The word that best describes the economy right now is *uncertain*. As an investor, it’s the worst feeling you can have. If you feel uncertain right now, remember what this feels like and make sure you feel better about your portfolio next time something like this happens—which it will.

As I have made clear several times before, I hedge uncertainty through contractual agreements that I have with life insurance companies that have paid out consistently through the Great Depression, multiple World Wars, and bank failures. Cash-value life insurance policies like **Wealth Formula Banking** help me sleep well at night.

We spent a lot of time on this concept last week and, if you are not sold on getting a policy yourself, that’s fine. I just want you to understand why I think it’s so valuable and make sure you really understand it.

This week, I want to give you another way that you can get exposure to this kind of *hyperstable* asset. You see, you can also get exposure to life insurance company level stability by purchasing other people’s life insurance policies.

If you’ve never heard of this strategy, I’m not surprised. It’s not something most retail investors know about. Meanwhile, Warren Buffet buys $600 million/year of these things and there’s a half billion dollars worth of them on Bill Gates’ balance sheet.

Curious? If so, make sure to listen to this week’s episode of Wealth Formula Podcast!

Tim joined ASR Alternative Investments in 2007 and currently serves as Vice President and Senior Partner. His many responsibilities include overseeing and facilitating ASR’s growth and marketing strategies. As a key front player in the ASR team, Tim has been an integral part of the companies expansion and revenue growth in recent years. His unquestionable grasp of the industry coupled with his astute marketing skills has earned him the highest respect from both clients and financial professionals.

Prior to ASR, Tim worked for Enterprise Rent a Car for 18 years. During this time, he held several executive positions including Assistant Vice President at the World Wide Corporate Headquarters in St. Louis, Missouri. He was responsible for European operations expansion in the UK, Germany and Republic of Ireland. His most recent position with Enterprise brought him to the Dallas/Fort Worth area where he served as the Regional Vice President and Corporate Officer of a 50 million dollar operation, responsible for 300 employees in 40 locations, including the DFW Southwest Regional Headquarters. In 2007, Tim chose to retire from Enterprise and join American Safe Retirements.

Tim grew up in Southern California and Washington State. He attended Washington State University in Pullman Washington and currently lives in Southlake Texas with his wife, Theresa, and their five children.

Shownotes:

Tim talks about the people who sell their life insurance policies and why it’s beneficial for them.

Why are a lot of sophisticated investors not educated on life settlements?

Tim talks about the “Wild West” of investing in life insurance policies in the past

Why does Tim consider ASR to be one of the more conservative players in the market today

**202: What is the Safest Investment in American History?** Mar 22, 2020
What we are experiencing right now is truly a black swan event. Even those who predicted a recession had no idea how badly the global economy could be crippled in just a few weeks.

Hopefully it will be short-lived. But frankly, even a few months of people staying at home and not buying anything will have extraordinary repercussions.

The fiscal and monetary tools we have to combat our situation are not designed for this kind of assault. Cutting interest rates and quantitative easing are meaningless if businesses are closed and no one is buying anything. Cutting payroll taxes doesn’t help when no one is at work.

Treasury Secretary Mnuchin suggested that if a strong fiscal stimulus is not taken soon, we could end up with 20 percent unemployment—comparable to Great Depression levels.

Wouldn’t it be nice not to have to worry about your retirement money right about now? How would that even be possible?

Well, suppose there was a financial instrument that’s been around and tested for 1400 years and used by some of the wealthiest families in the world for generations to create and preserve wealth. Suppose that product survived the test of the Great Depression and became the favorite financial instrument for those who lived through it because it paid positive interest every year while everything else around them crumbled. Wouldn’t that sound appealing right about now?

It gets better, this investment grows untaxed and its liquidity can be harnessed in any credit condition. In fact, it is a product that literally allows you to invest the same money in two places at the same time.

In my opinion, this kind of product is the safest investment outside of US treasuries—safer than any corporate bond that I could buy and far more profitable. Simply put, I don’t understand why it’s not part of everyone’s portfolio.

I am talking about permanent cash value life insurance strategies. We call these strategies Wealth Formula Banking and Velocity Plus. If you do not know how these strategies work or what they can do for you, I HIGHLY suggest you listen to this week’s podcast.

I can honestly say that if you learned and implemented one of these strategies, and did nothing else that I talk about on this podcast or investor club, I would feel like I’ve done you and your family a great service. That may sound like an exaggeration but I use these tools myself and, with the way the market is right now, I couldn’t be happier that I made that decision.

So, do yourself a favor and listen to this podcast now!

PS. Here is the information for the upcoming webinar mentioned in this podcast:

Bunker Investing: Wealth Formula Banking and Velocity Plus

Thursday, March 26th 5:30PM CST

Shownotes:

How does Whole Life Insurance work?

How is life insurance similar to real estate?

Christian talk about the investment strategies of the ultra high net worth

How does Wealth Formula Banking essentially let you make money in two places at the same time?

What is Velocity Plus?

200: Comments and Questions from the Wealth Formula Nation! Mar 08, 2020

“People tend to overestimate what can be done in one year and to underestimate what can be done in five or ten years.”

That’s a quote with unknown origin that I’ve heard a few times and one with which I cannot agree more. All you have to do is to look at my podcast to see that.

It’s been about four years now since I began Wealth Formula Podcast. The first several shows that I did had no listeners. Today, we get about 25,000 downloads per month.

We also have a regulation D accredited investor group of about 1400 individuals. Collectively, our group has placed over $100 million in equity in the last 18 months!

Our ability to raise capital has been incredibly powerful and allowed us to partner with some of the best operators in the country and to cherry pick opportunities!

More important than that, we have created a truly unique community of really smart, successful individuals of like-mind. We invest together and play together. Just come to our next Wealth Formula event in Phoenix to see how hard we play!

Sometimes people ask me how I built Wealth Formula. The answer is persistence. I have a message and I have a mission and I go to work every week.

If you put your mind to something and plug away at it long enough, you have a good chance to succeed. The problem that most people have is that they stop trying too early. It’s hard to see five downloads on your podcast dashboard and keep going just as it’s hard to build a business from scratch.

Success, though, comes from a series of small victories that accumulate over time. That’s true whether it’s a podcast, an exercise regimen, or learning a new language. The key is to stop chasing shiny objects, decide what you want and to aggressively follow the narrow path that will eventually get you there.

Seeing what has happened with this podcast makes me believe in this concept more than ever. Take a minute and think about how this might apply to your life.

After that, make sure to tune in to episode 200 of Wealth Formula Podcast!

**199.5: Private Investments, Ponzi Schemes, and Fraudcasters** Mar 01, 2020
* In case you are wondering—I didn’t get a chance to finish episode 200 yet so we are going to call this one episode 199.5!

One of the great things about **Wealth Formula Network** is having a community where people can share what they know including who to stay away from.

For example, through our collective knowledge, our group learned pretty quickly last year when a high profile turn-key home provider appeared to have been either purposefully or by incompetence, getting people involved with a Ponzi scheme.

Sometimes we figure this kind of stuff together the hard way. For example, in January of 2017, I got an email from one of our listeners/investors telling me about “The Income Store”.

The Income store was owned and marketed by a podcaster named Bill Courtwright who claimed that people could buy websites from him that he would manage for six figure investments. He promised returns of up to 20 percent forever.

Knowing a little bit about internet marketing, the concept piqued my interest. I had done pretty well with a few on-line projects myself and know some people in the space a lot smarter than me that helped me along the way. It seemed like something worth looking into.

To do some research, I asked my primary internet marketing guy and friend to look into it for me. He went on to the company website and did some research with some basic internet tools. Here’s what he wrote back in January of 2017:

“I took a look at all the sites on their ‘brag sheet’. The sites do not get any real search traffic results—less than 50 visits maximum per month each. None are big powerful sites and are not found in google. They can’t be profitable…I am not sure how they are making this cash flow…something is not right.”

Bottom line is that it was clear for anyone who knew what they were doing back in 2017 that something was fishy. Unfortunately, our listener had already invested $290K. I told him what we found but it was too late.

Almost exactly three years later, I saw a headline in the Chicago Tribune, “SEC freezes assets of suburban owner of The Income Store, allegedly a $75 million Ponzi-like website investment scheme”.

I’m sure I don’t need to say more than that to describe what had happened. This guy used the power of podcasting to create influence. He then used that influence to get people to trust him and give them their money.

I have to tell you that I see this kind of shady stuff happening left and right in the podcast space—not necessarily Ponzi Schemes but stuff that just doesn’t smell right and often turns out crooked.

As a podcaster myself, I have to warn you that just because someone is behind a microphone or is a guest on someone’s show does not automatically make them a person you can trust. That may seem obvious but tell that to the investors of “The Income Store”. The appearance of influence can make people blind.

Ronald Reagan once said, “Trust…but verify”. Bill Courtwright was on the podcast circuit and he was aligning himself with known personalities and trustworthy brands. He was a very good marketer. But all you really had to do was a little due diligence to figure out, as my friend said, that “something is not right”. But I guarantee you that none of those investors bothered to look at the traffic results of the websites he promoted or asked someone else with more internet savvy to do so.

Beware the fraudcaster! Beware the fraudulent podcast guest. Not everyone does due diligence on all of their guests. Not everyone has rules on who can advertise on their show. Trust…but verify.

This goes not only for investment opportunities, but also for a variety of other services. In fact, there is something out there right now that I think is going to be a real problem for a lot of people in short order.

While I can’t name the company itself or the name they’ve given to the program, I have invited my friend and asset protection attorney, Doug Lodmell to describe the limits of trusts and taxation which this scheme involves. Listen to this interview so that you don’t fall into another influencer trap!

P.S. Our April 24th -25th Wealth Formula Meetup in Phoenix is filling up quickly! Sign up now at WealthFormulaEvents.com

Born in Geneva, Switzerland, attorney Douglass S. Lodmell has excellent knowledge and the highest level of experience in estate planning, taxation and strategic asset protection for domestic and international clients. In addition to a Juris Doctorate from Cardozo School of Law, Douglass has a Bachelor of Science degree in finance as well as an advance law degree (LL.M.) in taxation from NYU School of Law. He has authored numerous articles for professional journals as well as a popular book about the explosion of lawsuits in America called The Lawsuit Lottery: The Hijacking of Justice in America. Doug’s extensive experience in asset protection make him a frequent guest speaker at medical, and professional conferences and seminars throughout the country, as well as teaching concepts of asset protection to other attorneys at continuing legal education seminars throughout the country.

Shownotes:

What is a Trust?

Doug talks about a Living Trust

What is the difference between a Revocable Trust and an Irrevocable Trust?

Doug’s advice: If anybody tells you anything can magically avoid taxes, you need to question it

https://www.lodmell.com/

douglass.lodmell@lodmell.com

800 231 7112

**199: How to Acquire the Ultimate Asset: Happiness** Feb 23, 2020
“Be careful what you wish for, lest it come true!” The origin of this saying is Aesop’s Fables (circa 260 BC), not a modern country singer as some might think. Either way, it is a powerful statement when it comes to financial wealth.

You see, I talk to hard working, high paid professionals every day and many aspire to *retire*. They believe that they would be much happier if they could make enough money to quit their job. But is that really true? It may be more complicated than you think.

As you may know, I quit my “job” as a surgeon almost three years ago. I would not call myself retired but I am most certainly retired from medicine.

Do I miss it? Well, I have to say that I rarely think about operating so the answer is no. However, I do miss certain sensations associated with that time in my life.

I miss doing things with my hands. I don’t think about operating anymore but I do miss the sensation of being completely absorbed in a physical task and trying to do it perfectly. I remember the feeling of being *lost* in my own world completely detached from any other concerns in life. The only other time I really felt that way was when I played ice hockey as a kid.

In addition, I miss having a well-defined routine that I can’t cancel on a whim. There is a certain comfort in the monotony of a strict schedule and *being needed* that is not appreciated until it’s lost.

I also miss interacting with people in a work setting. I used to go into an office every morning and bond with people. These days, I spend most of my days working by myself and, when I do speak to others, it is usually over the phone and all business.

Now don’t get me wrong. I don’t want that old life back anymore. However, I am trying to figure out how to have my cake and eat it too! That is to say, the feeling of *flow* (being lost in work), routine, and community are all important elements of feeling happy. If you recognize that you are missing these things in your life, that’s great news because you can actively do something about it and improve your sense of wellness.

That’s what I want to do myself. Right now though, I am in the data collection phase. I am a scientist at heart. I need to define, at a physiological level, what exactly happiness is. Is it ultimately a function of dopamine and serotonin that result in certain electrical activities in various parts of the brain? If so, what kinds of things alter that activity? I’ll let you know when I understand this stuff better myself.

In the meantime, I’m relying on the experts in the field to help me establish a larger framework for this thing called happiness. After all, what’s all this money we are making for anyway? Money can buy happiness to a certain extent and science has evidence for that. But it can’t take you to the next level.

I have realized recently that in order to get to that next level of holistic wealth (aka happiness), it will require the same level of education and diligence as it requires to become financially wealthy.

That’s what I need to do and I hope that you will be inspired to join me over the next year as we put further emphasis on this topic of positive psychology into the Wealth Formula milieu.

If you want to start working on this stuff in a meaningful way, listening to this week’s Wealth Formula Podcast interview with Joel Wade would be great way to start. Listen HERE!

P.S. I’ll be talking about happiness at our upcoming Wealth Formula Meetup in Phoenix on April 24th-25th! Make sure to sign up for the event at WealthFormulaEvents.com

Joel F. Wade, Ph.D. is Marriage and Family Therapist and Life Coach, and the author of The Virtue of Happiness and Mastering Happiness

Shownotes:

What is Joel’s definition of Happiness?

Is Happiness Physiological or Psychological?

Can you train your brain to be happy?

What is Flow?

Joel talks about the difference between achieving happiness as an adult vs achieving happiness as a kid

The Mastering Happiness Podcast

drjoelwade.com

**198: When Is That Depression Coming Anyway?** Feb 16, 2020
Yogi Berra once said, “It’s tough to make predictions, especially about the future.” He was a wise man. No wonder they named a cartoon character after him.

The problem is that everything we do in finance ultimately relies on some kind of belief of how the future will play out. As a result, we often search for prophets who can help us make a *profit*. Of course these prophets, otherwise known as economists, don’t seem to agree with each other. Some even seem to have secondary agendas.

You know what I mean—the guys who boast about predicting the great recession of 2008 but omit the fact that they also predicted recessions every other year for the last two decades!

The economy is cyclical. That means if you keep saying the same thing all the time, periodically you will be right! But only drawing attention to those occasional events is a bit disingenuous don’t you think?

It’s also suspicious when they talk about gold to protect against cataclysmic events and just happen to have a thriving business that sells gold. That’s hardly an unbiased source.

Listen, like everyone else, I’m looking for some help with the future. Wouldn’t it be great to be given a heads up on events like 2008 several months before they happen? Wouldn’t it be great if there was someone who could tell you for sure that the next 10 years will be the most profitable in history and that you should invest everything you can?

Of course that would be great but without Michael J. Fox’s Delorean in “Back to the Future”, it ain’t gonna happen. Economists can’t even agree with one another so why bother listening to any of them?

Well, I would argue that you just need to do a little homework and decide who is worth listening to. I’ll tell you what I do. I vet my sources of information the same way I vet my real estate partners.

Now, it may not be important for me to know, like and trust an economist, but it is critically important for me to understand their track record. How frequently do economists tell you their *batting averages*?—not often in my experience. Why do you think that is?

Wouldn’t that be useful information? After all, If you could find a source that has been over 95 percent accurate with both positive and negative predictions in the US economy over the past 70 years, would you take their predictions seriously? I would.

That’s exactly what ITR Economics has done and its the reason why they are my single most trusted source of economic forecasting. When they talk, I listen. This week’s Wealth Formula Podcast will give you the opportunity to do the same as I interview ITR economist, Catherine Putney.

Catherine Putney specializes in applied research for business cycle trend analysis, growth-cycle trend analysis, and implementing cyclical analysis at the practical, company level. She holds a master’s degree in economics from the University of New Hampshire.

Catherine regularly contributes articles to ITR Economics’ flagship publication, the ITR Trends Report™, focusing on the manufacturing sector of the US economy. Catherine and the ITR team have put this expertise to work for companies across a wide range of industries, including manufacturing, chemicals, fibers, healthcare, distribution, real estate, construction, and technology.

Shownotes:

Catherine talks about the 95% accuracy rate of ITR Economics

Roaring 2020s and Depression in the 2030s

What is the effect of the latest coronavirus outbreak on the global economy?

Sign up for the ITR Economics newsletter https://www.itreconomics.com/

**197: Good Deals, Bad Timing, and a Retirement Account Update!** Feb 09, 2020
If you are part of our Wealth Formula Investor Club you know that we do a lot of multifamily real estate. In fact, 95 percent of what we do is working class, value-add multifamily real estate with the same two operators.

Some of you have invested literally millions of dollars into these deals. I’ve got my own money and my dad’s money in this stuff too so I’m not doing anything different.

I know it seems boring. The entrepreneur in me wants to bring you and me some brand new bright and shiny objects in which to invest. But I just can’t do that—at least not right now. Right now, boring is good.

For those of you who have been urging me to branch out, I promise you that I am looking at new stuff all the time. The problem is that the risk adjusted return just never seems on par with what we already have.

To make my point, let me give you a couple of examples. A very respected private equity shop approached me about a joint venture with them in which we would construct several well known burger franchises across the country and then roll them up to private equity for a big multiple and an exit.

Sounds good on the surface. The investor IRR was projected at 20 percent which was respectable and it certainly could be better if other things went just right.

However, there were no tax benefits, so even an 8 percent yearly dividend sounded less than attractive. Furthermore, there is no doubt in my mind that the risk to operating businesses in this economy is far greater than working class residential real estate.

So, bottom line—shiny object, cool business plan, great team…but for what? The return profile was similar to our real estate proformas with far greater exposure to a volatile economic climate and no tax advantages. I’ll take boring.

Another deal I passed up on was a really interesting commercial real estate play where the group was buying from pension plans that had to sell per mandate and was getting steep discounts on the properties they were buying.

But these properties were in tertiary markets like Louisville and Cincinnati. And when you did a deep dive, cap rates were still at 8 despite the big purchase price discounts. This is with vacancies at historical lows!

What does that tell me? It tells me that this is a great model but the timing sucks. Am I really going to load up on office space in tertiary markets in 11th year of the longest expansion of GDP in US history? In an election year???

Again, the answer is no but I promise I’m still looking! It’s just that right now, very little beats our boring little real estate deals on a risk-adjusted basis.

So, for now, I’m going to just keep investing the same way and you may find it prudent to do the same.

Now, if you are making a lot of your investments out of retirement accounts (SDIRA’s, Solo 401Ks) or thinking about doing so, I highly recommend you listen to this week’s podcast interview with Damion Lupo. If you’ve been on the fence about using your retirement funds for real estate, some recent legislation may just change your mind.

Find out why on this week’s episode of Wealth Formula Podcast!

P.S. Don’t forget to sign up for our LIVE meetup in Phoenix Arizona on April 24th and 25th! To sign up, click HERE!

American Sensei. Yokido Founder. 5th Degree Black Belt.

Financial Mentor to Transformation Nation.

Best selling author in personal finance. Rewriting the rules and plan for retirement.

Shownotes:

What is the difference between an IRA and a 401k

Damion talks about UBIT and UDFI

What is a Backdoor Roth?

Why do a QRP?

QRPbook.com

**196: Russell Gray on Life After Loss** Feb 02, 2020
I don’t really like basketball and have never watched a full game in my life. Despite that, I knew who Kobe Bryant was and was shocked by the news of the tragic accident that took his and his daughter’s life.

His passing actually reminded me very much of Princess Diana dying in a car crash in 1997. I remember that I was at a bar attending a medical school new student orientation event when the news came up on a TV.

I was shocked and disturbed the same way I am now. I also remember that a friend of mine turned to me and said, “So what, people die all the time.” My initial response was to see him as a heartless jerk.

However, it does beg the question of why someone like me, who could really not care less about the British Royal Family or the NBA, gets so disturbed when unexpected tragedies like this happen.

I think that the reason high profile tragedies affect us the way they do is because they somehow strip the world of its *makeup*. In order to not go crazy, most of us have to create a reality in which things happen for a reason.

Thinking of life as cruel and disorderly is not compatible with a sense of well-being. So, we slap some lipstick on reality and pretend that we are in control.

Kobe Bryant’s death puts that sense of order into doubt. He was a successful and beloved athlete with four children. He was strong and smart and seemed to be just getting started. If someone like him dies suddenly, then it could happen to anyone at any time. That’s not a comforting thought.

But change and loss are inevitable for everyone—rich or poor, powerful or weak. The question is how do you get through it? I certainly don’t know the answer to that but my guest on Wealth Formula Podcast this week, Russell Gray, is doing his best to help himself and others do just that.

Russ is a good friend and a wise man. Don’t miss this episode.

Russell Gray

Best known for being Robert’s side kick on the radio since 2004, Russ is a financial and business strategist. With over three decades in sales, marketing and financial services, Russ has written several business plans and consulted with hundreds of investors on their personal financial strategies. Russ also co-authored The Real Estate Guys™ highly rated book Equity Happens and taught real estate finance for the California Associations of Realtors® GRI program.

Shownotes:

The people who have success aren’t the ones that avoid loss because it’s common to all.

Russel talks about two books that helped him cope with losing his wife.

What is Russel’s strategy to cultivate positive energy?

Thinking about it, talking about it, dreaming about it, hoping for it, none of that gets it done. You’ve got to act and you’ve gotta act relentlessly.

**195: Wealth Secret #1: Know, Like and Trust!** Jan 26, 2020
People send me real estate deals to look at all the time trying to get an opinion on whether or not they should invest. Usually it’s some glossy executive summary showing nice pictures and impressive proforma numbers.

“What do you think?”, they ask. My answer is pretty much always the same. “I don’t know these people so I can’t comment”.

You see, real estate is not like publicly traded stock. If I buy Apple stock from E-trade it’s the same stock that someone else might buy from Ameritrade or some other brokerage. You don’t have to worry that you aren’t getting the same stock. No matter where you buy Apple, it will perform the same.

Real Estate is different. Every property in which you invest is unique. Furthermore, the performance of the asset is highly dependent not only on the intrinsic nature of the property, but also on its operator. The same asset in two different sets of hands will almost certainly result in different outcomes.

Some operators are good and some are outright bad. So, it’s probably a good idea to get to know who they are. That may seem obvious but think about how many people blindly invest in real estate through various on-line platforms where they have zero clue about the operator. The platform gets paid to bring money to the deal. Why do people trust these platforms so much? Is it because they have nice looking websites? Is it because what they say sounds official? I don’t get it.

You see, apart from being good or bad, operators typically have different business models as well. A few weeks back, you heard Dante Andrade, my colleague in Dallas, talk about our hybrid value add/cash flow model. That’s very different from what my partners at Western Wealth Capital do. Their entire focus is on the creation of equity for velocity and a big bump at exit.

So how do *you* decide with whom to invest? Well, first of all, let’s go back to the the idea that real estate is not a commodity and highly dependent on people. That being the case, my general rule of thumb is to know, like and trust the operations team. That’s what I spend my time doing in **investor club.**

Of course, liking and trusting is only part of it. I like and trust many people with whom I would never trust my money. You also have to make a judgment on competence. How do you do that? Well, how about taking a look at the company’s track record?

If you know, like and trust a group AND they have a great track record, you can at least start looking at proformas and taking them seriously.

Anyone can make a proforma look good. Some glossy paper and excel worksheets and you can make swamp land in Florida look good. But not every opportunity is good and most won’t achieve proforma—especially in a market like today. Look at the track record.

As for Western Wealth Capital, I won’t pretend that I am not biased. Apart from them being a partner of Wealth Formula, I have invested a lot of my own money in their offerings. Perhaps more illustrative, I have invested just as much of my 80 year old father’s money in these deals. I don’t take that lightly as you can imagine.

Western Wealth Capital has become a big part of my life and my guest today, Tim McLeary has become like a brother to me. Tim is a major part of the Western Wealth machine and is my guest on Wealth Formula Podcast this week. Don’t miss it!

Tim has more than 25 years of experience in business development, financial management and client relationship management. He was responsible for the oversight of more than $1 billion in assets and managed a 40-person team at TD Bank Financial Group. As a Senior Consultant at Standard Life, Tim worked with a group of high net worth advisors throughout BC, helping them increase the efficiency and profitability of their businesses. At Cassels Blaikie, Tim was responsible for the relationship management of institutional and high net worth clients.

Shownotes:

Tim McLeary’s background

Why invest in multifamily real estate?

What is the Western Wealth Capital Money Machine?

Under Promise, Over Deliver

Tim talks about Western Wealth Capital’s philosophy when selecting properties.

**194: Hal Elrod and the Miracle Equation!** Jan 19, 2020
I have a question for you. Did you make any significant New Year’s resolutions or set some serious 2020 goals for yourself this year? I bet when you set those goals, you likely felt a lot of energy: “This time I’m going to do it!”. You felt like nothing was going to stop you. Now, four weeks into the year, are you losing steam on that goal? If so, why do you think that is?

Personally, I think we humans have a series of set thermostats in our lives. We are set at a particular state of health, wealth and happiness.

In order to reset any of our thermostats requires considerable effort. Self-help book enthusiasts swear by visualization techniques like putting up photos of things you want in order to let them creep into your subconscious. Positive affirmations have the same intent. The idea is to reset those thermostats.

These kinds of rituals create constant reminders to your subconscious of a new reality you are trying to create. Any significant goal requires a lot of energy and effort. If you don’t fundamentally believe something is possible, it’s hard to put in consistent effort.

If you change any one of these thermostats, you will change your life. I truly believe that and I wish I understood that when I was much younger.

If you buy into this idea that you can fundamentally change your life by changing your mindset, and you wish to do so, you are not going to want to miss this week’s interview with best selling author, Hal Elrod.

Hal Elrod is on a mission to elevate the consciousness of humanity, one morning at a time. As one of the highest rated keynote speakers in America, creator of one of the fastest growing and most engaged online communities in existence and author of one of the highest rated, best-selling books in the world, The Miracle Morning—which has been translated into 27 languages, has over 2,000 five-star Amazon reviews and is practiced daily by over 500,000 people in 70+ countries—he is doing exactly that.

Shownotes:

What is a miracle?

The first part of the Miracle Equation: Unwavering Faith

The second part of the Miracle Equation: Extraordinary Effort

What is the Faith Effort Feedback Loop?

What is the most important lesson you can learn from The Miracle Morning?

**193: The Real Investors of Wealth Formula Nation: The High Paid Doctor!** Jan 12, 2020
Our private group, **Wealth Formula Network**, has a biweekly zoom video call to discuss anything and everything about personal finance.

These calls are a lot of fun for people like me who like to geek out on money stuff. If you are the only one in your social network who likes this topic, **Wealth Formula Network** is a great way to get your fix through an on-line community instead.

On our most recent call, someone brought up a fund and wanted to know the groups thoughts on it. We broke it down and realized that there was really nothing AT ALL appealing about the opportunity.

These marketers understand that the podcast space creates a world that can grant immediate legitimacy for them through brand association. Let’s say you have a podcast that you really like and feel like you really trust the host.

So what was it about this deal that attracted attention in the first place? Well, it was packaged well and presented in a way that, on the surface, made a whole lot of sense. You see, there are a lot of good marketers in the podcast ecosystem.

If you hear someone interviewed on that podcast, it immediately legitimizes the interviewee as someone who can be trusted.

I learned this the hard way as a podcaster. Early on, I would interview anyone with an interesting idea or concept just to get the content out there. But some of these people were raising money for deals that I wouldn’t touch with a ten foot pole!

I soon realized that I had essentially legitimized these opportunities by having someone explain them on my show. So…now I am very careful about who I interview and also give frequent disclaimers when someone is raising money.

Anyway, the point I am making here is that it is critically important to use what you are learning and pick these deals apart. When you do so rationally with an objective stance, the negative elements of an offering are usually pretty glaring.

It helps to do this exercise with a group of individuals of like mind. If you do it over and over, I promise you will get better at it and get really good at identifying bad deals quickly.

We do this all the time in **Wealth Formula Network** where several of the real investors of Wealth Formula Nation share their experiences together.

One of those investors is Dr. Ian Kurth, MD. Ian has become a real leader within our group. He is smart as a whip and works diligently at mastering personal finance concepts. For high paid professionals who work full time and want to create wealth efficiently, there is no better role model.

And for that reason Ian is my guest on Wealth Formula Podcast this week. Don’t miss it!

Dr. Ian Kurth

Dr Ian Kurth is the poster child of successful high paid professionals taking ownership of their personal financial situation. He is a neuroradiologist and he is also a member of our private community Wealth Formula Network. He’s an active participant there and in Investor Club and Physicians Wealth Formula.

Shownotes:

Find out when Ian decided that hard assets are the way to go and to take personal finance issues into his own hands

Ian talks about how he found Wealth Formula

What is Ian’s approach to setting up his portfolio?

Ian’s approach to Asset Protection: own nothing control everything

**192: What’s Happening with Real Estate in 2020?** Jan 05, 2020
Happy New Year! This is my first podcast of 2020 and I’m looking forward to another great year.

I don’t know about you, but I get very reflective this time of the year and it is usually pretty helpful. I have a suggestion for you. Write down where you are today and where you would like to be next year.

This exercise can really help to focus in on what is NOT working. You see, it’s easy to focus on what is working. We are naturally programmed to run to pleasure and away from pain.

It is much harder to acknowledge those things that are not working and to figure out how to make them go away.

This applies to all parts of life—relationships, investments, jobs, and businesses. If it isn’t working and you know, deep down, it’s not going to change… Then it’s time to get rid of it.

As a serial entrepreneur, I can tell you that I have had to do this several times. Sometimes businesses do great and sometimes they don’t. The entrepreneur’s curse is to get emotional and not let go of a dying business idea or one that no longer provides joy to the owner.

We’ve all been there—90 percent of your life is great but the 10 percent of it that is not consumes all of your energy. If that’s the case, get rid of it. There may be some temporary pain—emotional or financial, but it will be worth it.

A few years ago, I decided that I didn’t want to practice medicine anymore and I wanted to move to Santa Barbara. It was a tricky transition and one that was not without substantial risk. However, had I not eliminated medicine and my Illinois home address, I would not have focussed on what has been the most successful and enjoyable businesses of them all for me—multifamily real estate.

I’ve been lucky for sure. You see, the success of any venture depends not only on the endeavor, but also on the people with whom you partner. On my road to success in my real estate business, finding the right people has been the most difficult part.

Building relationships is time consuming. It requires perseverance in getting to know people and businesses personally and professionally. But it has really paid off for me and, frankly, to our Investor Club. Had I not eliminated the practice of medicine a few years back, I simply would not have had the time and energy to build the infrastructure our investor group has today.

Some of you in Investor Club know Dante Andrade. He’s my partner in a newer company that we formed together called Touro Asset Management Group. Touro focuses on working class multifamily real estate specifically in the Dallas submarket. Our model is a hybrid cash flow and value add strategy.

I’m very lucky to have Dante as a partner. He’s one of the most meticulous underwriters and operators I’ve ever known and has facilitated over $1 billion in apartment transactions as a buyer’s broker in Dallas. He really knows his stuff.

In this week’s Wealth Formula Podcast, I sit down with Dante and talk about all facets of investing in apartment buildings. Whether you are old hat at multifamily investing or just thinking about it, I’m quite sure you will take something away from this conversation!

Dante Andrade

Dante is a man of many multifamily real estate hats. He is a buyer’s broker in Dallas, meaning that he is dedicated to the buyer side of acquisition of large multifamily real estate. He’s been involved in just under a billion dollars worth of transactions, focusing again specifically in the the Dallas/Fort Worth market. He’s also a real estate coach and mentor and finally, and probably most importantly, he is my partner in our group called Touro Asset Management Group as we acquire a cash flowing multifamily real estate in Dallas.

**191: What you MUST know about Estate Planning!** Dec 29, 2019
Last summer I had a drug reaction that made me pretty sure I was going to die.

There was nothing terribly remarkable about the day it happened. I was with my wife and kids visiting my parents in Minnesota. On our last evening there, I stayed up a little later to chat with my parents. The children were already asleep. By 11PM or so I headed down to bed.

I felt a little funny walking down the stairs and then, the next thing you know, I couldn’t stand and I felt completely disoriented. Within 20 minutes, I was getting loaded up into the back of an ambulance. I remember seeing the doors close and wondering if I would ever see the outside world again.

During the ride to the hospital, all I could think of was whether or not I was going to leave my family in good financial shape. Had I prepared them for this? I wasn’t sure.

Of course the whole thing was a false alarm and I’m here to talk about it. However, it illustrates the idea that unexpected things happen to people all the time.

Life is full of uncertainties but death is not one of them. The only question is when. Despite that, very few people give much thought to making that transition as easy as possible for their loved ones.

Why? Well, it’s scary I guess. Some people are superstitious and worry that estate planning may hasten their demise. Others just have no clue that anything needs to be done.

Maybe you fit in the latter category. The good news for you is that there are very clear things you should do now for estate planning regardless of your age and health and they are relatively simple and inexpensive.

For people with larger estates, this kind of planning becomes even more important as estate taxes can rob your children of your hard earned wealth.

These are the issues that we will discuss on this week’s Wealth Formula Podcast with attorney Joseph Longo. Do not miss this episode!

For more than 25 years, Joseph Longo has focused on delivering unparalleled service in the areas of estate planning, asset protection and sports. His clients have ranged from businesses to high net worth families and professional athletes. Mr. Longo has also provided pro bono services on matters for indigent clients.

In addition to practicing law, Mr. Longo has more than two decades of experience in every aspect of agenting. His record in representing 22 first round draft picks, arbitration cases and free agents is second to none. His knowledge of the Collective Bargaining Agreements of Professional Sports and Labor Law issues, coupled with his success as a trial lawyer, equip him with the skills necessary to obtain maximum value for his clients.

He has taught law at Los Angeles City College, Mission College and Pasadena City College, and is currently an Adjunct Professor at Loyola Law School. He has also sat as a Judge Pro Temp in the Los Angeles Court System.

Mr. Longo received his B.A. from Brown University in Rhode Island, where he was a starting Defensive Back on the Brown University Football Team in the mid-1980s, and earned his Law Degree from Loyola Law School in Los Angeles, CA. His charitable endeavors include sitting on the Board of Ability First.

Shownotes:

Estate planning is planning for your exit

What is Probate and why should it be avoided?

Why do you need a Will AND a Living Trust?

Joe talks about a good estate planning technique: Gifting

**190: A Time to Give (and to Receive)!** Dec 22, 2019
The end of the year is a good time for giving. Of course we are already in the mood with the holidays. Buying presents has a way of greasing up the credit cards and making it easier to pull the trigger.

The end of the year is also a good time to give to charity. Even if you are a kind hearted human being, I’m sure it’s not always easy to part with your hard earned money. However, at the end of the year, you come to the realization that charity is also tax deductible so it starts to make you feel more philanthropic.

That being said, I would like to direct you to a cause that I think is really worth your attention. One of our listeners, Dr. Eric Payne is a craniofacial surgeon. He’s the kind of plastic surgeon who can change lives for children with facial deformity such as cleft palate/cleft lip.

A few months ago, Eric did a webinar for us on what he does on these international trips. It was pretty pretty inspiring. You can watch that webinar replay HERE.

You see, one of the things we take for granted in our lives is how we look. Even if you aren’t a supermodel, chances are that when you walk around town, people don’t look at you like you have a deformity of some kind. We take anonymity for granted and focus on higher level stuff like making money.

Now imagine being a kid with a facial deformity that everyone can see in plain site that also interferes with your basic functions like eating, drinking and speaking. That’s what kids born with cleft palates and lips are up against.

I want to help these kids by supporting Eric’s work. My goal is to raise $100K for his organization to fund the next mission to India. Then, Eric will take lots of photos and videos to show you your money at work in a follow-up webinar. $100K will result in unparalleled return on investment in terms of the impact it will have on these kids.

We have A LOT of people in this community so all we need is for everyone to participate and donate SOMETHING. It could be $10 or it could be $10,000—no pressure! Everything helps.

Use the following link to get to the donation page: https://www.leapmissions.org/donate-form/

Make sure that you include Wealth Formula as your referral source. I would like to keep track of how much we donate as a group. In addition, anyone who donates at least $1000 to the cause will be acknowledged on a “Giving Back” page that will be added to WealthFormula.com.

If you have been to our events or are part of our online community, you know that the Wealth Formula Community is extraordinary. As a community, I want to see us increasingly make an impact on the world around us.

As for this week’s podcast, it’s about how giving can also be designed to make or save you money at a higher level.

Merry Christmas.

Arlene spent more than 20 years in the trust and investment services industry, and 9 years in non-profit development. When you work with Arlene, you get a compelling, comprehensive perspective on giving derived from her broad experiences with individuals and businesses ranging from Wall Street to Main Street. Get a fresh viewpoint on giving and bring more fulfillment to your practice and your clients’ lives.

Shownotes:

Arlene’s background

Is there a financial benefit to philanthropy?

Arlene talks about the Charitable Remainder Trust

Are the benefits of charitable giving only for ultra high net worth families?

Phone: 503-957-8334

Email: arlene@arlenecogen.com

189: Ask Buck Part 3 Dec 15, 2019

If you are struggling about finding the right Christmas present for your loved ones this year, I have a suggestion for you. Think EXPERIENCE.

Last week I snuck my ten year old daughter out of school and drove her down to Los Angeles to be part of a live studio audience. It was for her favorite Nickelodeon show called All That—sort of like a kids Saturday Night Live.

She was on cloud nine the whole five hours of shooting. She saw all of her favorite child stars and even got to give them high fives!

Afterwards, she called it the most exciting day of her life. She thanked me profusely and couldn’t stop taking about the show for the next two days. I am quite sure she will never forget that day.

On the other hand, I pretty much guarantee you that I will be getting her a fair amount of stuff for Christmas that she will forget about within a few weeks at best. It’s just the reality of stuff—it doesn’t last. Memories do.

The stuff will also cost me a lot more than this experience did. What’s crazy is that being part of the live studio audience was free! If you go to on-camera-audiences.com, you can get a full list of free show tapings that you can attend at no cost.

Of course, doing this sort of thing isn’t for everyone. My seven year old daughter would prefer a Vikings game which we are going to do next weekend! That one is not cheap obviously.

That said, the general idea of experiences over stuff is a good one and I have been trying to implement it into my gift giving as much as possible. Hopefully it helps you with a gift idea or two this season!

Speaking of the gift that keeps on giving, this is the third week in a row of “Ask Buck”. I was a little hesitant about releasing this but the feedback I’m getting has been quite good so it seems it’s not necessarily a bad thing to finish off the recent tranche of questions with one more show.

By the way, if you have questions for future shows, just reply to this email or record your question HERE. I prefer the recorded questions but either one is fine.

In the meantime, sit back and listen to this week’s show.

188: Ask Buck Part 2 Dec 08, 2019

Recently I started poking my nose into various physician financial facebook groups. I try to stay away from these things because they tend to put me in a bad mood. But facebook alerts make them constantly pop up on my phone and my brain reacts instinctually for its dopamine hit.

When I do poke around in these groups, I’m often left a little bit nauseous. It’s not just because I have a fundamentally different investing paradigm than most people. I am pretty immune to hearing people wax poetic about outdated conventional financial wisdom regurgitated by various mindless pundits. What really bothers me is the attitudes people have in these groups.

The over-all flavor of conversation in these forums can be best described by the word scarcity. I’m not talking about the young doctors who are broke and buried in debt. They actually do have limited resources.

No…I’m talking about the know-it-all followers of various influencers in the space. There is a certain language that has now become pervasive amongst them that I simply cannot stand.

There is a lot of talk about “living like a resident”. For you non-physicians out there, this means living like you make $50,000 per year or less. The idea is that you should live like a hermit so you can get to that magic number, dictated by the “4 percent rule”, sooner rather than later.

On top of that, there are often discussions on how little money you actually need to retire. I recall one well known blogger saying you only need about 25 percent of what you make today.

All of this is predicated on some strange machismo related to how sparse one can (and should) live. In fact, I see people making negative comments about physicians who elect to drive nice cars deriding them as financially irresponsible. How dare you drive a Tesla!

Now I know I am a personal finance podcaster not a self-help guy necessarily, but I do have to say that attitude goes a long way. I can honestly say that I don’t have a scarcity-type bone in my body. I attribute this attitude of abundance to the financial success that I have had personally.

To me, the wealth available to you and to me is limitless. Don’t spend all your time trying to live like a peasant. Instead, focus on expanding your means and letting your lifestyle expand with it.

Life is short. Isn’t it depressing to think that your sole purpose in life is to save enough money not to outlive it? That’s essentially what “live like a resident” means.

Now if you are one of the devotes of the aforementioned movement, no need to reply to me with a cynical remark. I get plenty of those in the forums and that’s why I try to keep my hand off the keyboard.

The good news for me is that my listeners tend to be people who truly believe in abundance and it is a pleasure to speak to people who have an open mind. It is no coincidence, I should add, that these are the wealthiest physicians and dentists that I know!

People with abundance mentality are fun to talk to and that’s why I do this podcast. It’s even more fun in a question/answer format like we will do in this week’s Wealth Formula Podcast. Tune in for Part 2 of Ask Buck!

187: Ask Buck Part One Dec 01, 2019

I spend most shows interviewing other people. However, once in a while, it’s fun to speak to you directly. We call these question answer shows, “Ask Buck”.

I recorded this podcast episode just before the holidays and I hope you enjoy it.

By the time you get this note, Thanksgiving will be over but I do want to express my thanks to you for being part of the Wealth Formula Community!

Enjoy the show!

**186: High Yield and Liquidity with Notes!** Nov 24, 2019
With the recent boom of real estate crowdfunding platforms, I often get this question, “What do you think of the (fill in catchy name) platform? What platforms do you like?”

The problem with this question is that it’s really not asking the right question. I am a real estate investor. When I invest in real estate, either as a general or limited partner, I am looking at the asset itself, the business plan, and the people who are going to carry out that business plan.

All that a platform is doing is bringing deal flow to investors and then collecting fees the way a broker does. So when you invest on one of these platforms, do you know what you are buying?—Sometimes. Do you know what the business plan is to yield the projections?—Not usually. Do you know who is operating the asset, their track record, or whether or not you like the way they do business?—ALMOST NEVER.

You see, investing in real estate or any kind of real asset fund requires some due diligence and, in my book, it always comes back to the people who are operating the asset. Investing in real estate is not like investing in stocks. People can invest in the exact same stocks online from anywhere in the world and they get the same exact thing.

So, you can ask someone, “Do you invest in Apple? What stocks do you like?” and it actually has meaning. After all, the Apple stock I buy is the same one you buy. That’s just not how real estate works.

And to be clear, these real estate crowdfunding platforms know that. They give you the same type of experience that you get on E-Trade so that you think that real estate functions the same way. But it doesn’t.

Unlike Apple stock, there is an unlimited flavor of real estate equity and it should not be mistaken for a commodity. A specific asset can’t even be looked at that narrowly.

Case in point—I was once in the best and final for the acquisition of a $25 million asset in Dallas. As it turns out, it came down to two groups. One group is a heavy value-add player with primary goal of creating forced equity and a large increase in value for investors. They did not intend to make this into a cash flowing asset but saw great opportunity to increase its value and to sell it quickly.

The other team looked at it as a unique long-term opportunity to cash-flow while adding value in a more modest way. This involved keeping occupancies high and increasing rents more gradually.

In the end, the cash-flow team won that battle and it is performing very well. However, it’s being run very differently than it would had the other team won. It would still be doing very well, but the business plan would have been very different. I know this for a fact because I was on both teams!

Bottom line is that it’s not about the platform. It’s about assets and people. I see financial bloggers and self-proclaimed financial experts writing about these platforms as if they were specific investment opportunities, and frankly, they sound like bozos. Don’t take advice on real estate investing from someone who knows nothing about it. They are probably just trying to get you to click on a link to get an affiliate commission.

For me, investing is personal. The majority of my assets are deployed into specific real estate holdings or funds that that are run by specific people. In some cases, I make the decision to invest more because of the people than I do the asset.

A good example of that is AHP Servicing. AHP servicing has provided a fund of non-performing notes that I have, on multiple occasions, participated in as an investor over the years. I understand what they do but the note business is not something in which I would consider myself an expert.

Would I invest in any old note fund? The answer is no. However, I do know the founder and CEO of AHP Servicing well. I also like and trust him.

I am, of course, talking about Jorge Newbery. Jorge has been up to a lot of interesting things lately so I invited him back on the show to get us caught up. Listen to this week’s interview with Jorge and I think you will get a good idea why I like him and his fund as much as I do. He is one of the smartest and most interesting entrepreneurs I have ever met.

Jorge Newbery is the Chairman and founder of American Homeowner Preservation, LLC, or “AHP.” Jorge was the President of Budget Real Estate Inc. from 1995 to 2008, where he brokered over 1,000 troubled Department of Housing and Urban Development and real estate owned properties and acquired, renovated and operated over 200 distressed multi-family, single-family and commercial properties. Prior to that, Jorge was the co-founder of Sunset Mortgage from 1992 to 1995.

Shownotes:

Jorge’s background

What does AHP Servicing do?

Jorge talks about the current AHP fund

Jorge tells us about one of AHP’s best features

What will happen to AHP’s current holdings if there is a market correction?

https://ahpservicing.com/

**185: Zero Hour and the Demographic Cliff!** Nov 17, 2019
In college, my two favorite courses were biochemistry and organic chemistry. The logic was very soothing to me. In high school, the only thing that gave me that sense of logically progressing to an answer was mathematics—especially geometry proofs.

In other words, I like concrete answers and am not as comfortable leaving arguments unsettled.

Like you, I also like money and am interested in how the economy works. Sometimes I wish I had studied economics so I could better understand the nuanced aspects of what is going on today.

But economics is not science. It is a social science. What that means is that while you can build models and make predictions, it’s very hard to accurately come up with the answer to a problem ahead of time. It’s not that exacting.

That’s why a room full of Ivy League educated economists can look at the same numbers and come up with different conclusions. There is no answer—only theory and forecasts.

As an investor that is frustrating for sure. In fact, sometimes all the economists are wrong because the data they focus on ends up not being the right data to look at!

Case in point—I remember back in the late 1980s when everyone was talking about Japan becoming the next financial powerhouse. Virtually no one, except Harry Dent, predicted that Japan would go into a tailspin for the next three decades. Harry predicted that would happen because the population of Japan was shrinking—less work force, less productivity.

Today, everyone is looking at China as the next global financial power. It has certainly grown at an incredible clip over the last few decades. But China did something in 1979 that could seal its fate as another failed Asian power—it created a one-child per family policy that continued until 2015.

Will China become the next Japan over the next few years? Or, will another unforeseen variable like technology save its drop in productivity? There is no way to know for sure.

The best we can do when we consider macroeconomics is identify the right trends and get ahead of them as fast as possible. Harry Dent has a pretty good record of doing this. Right now, just like a lot of bears including Peter Schiff and Jim Rickards, he is predicting a major financial crisis. But his flavor of armageddon is a little different. He’s predicting a deflationary recession.

How would this affect you? Find out by listening to this week’s episode of Wealth Formula Podcast!

P.S. Listen to the very end if you invest in apartment buildings.

P.S. Attached is the study on real rate demographics that Harry references in the interview.
DR.1125.BELREPORT.Q3 Download

Harry S. Dent, Jr. isn’t just the face of Dent Research, he is also a bestselling author and one of the most outspoken financial editors in America who has developed a unique method for studying the global economies and providing insights to what to expect in the future.

After years of studying economics in college, Harry quickly became disillusioned and grew to find the profession itself vague and inconclusive. So he shifted his focus to the burgeoning new science of finance, where he could identify and study demographic, technological, consumer and many other trends that empowered him to begin forecasting economic changes.

Harry went on to receive his MBA from Harvard Business School, where he was a Baker Scholar and was elected to the Century Club for leadership excellence. He then joined Bain & Company as a Fortune 100 business consultant and now heads the independent research firm Dent Research.

Since then, he’s spoken to executives, financial advisors and investors around the world about demographics and the power of identifying different trends. Harry has appeared on “Good Morning America,” PBS, CNBC and CNN, Fox News and is a regular guest on Fox Business. He has also been featured in Barron’s, Investor’s Business Daily, Fortune, U.S. News and World Report, Business Week, The Wall Street Journal, and many other publications.

Harry has written numerous bestselling books over the last few decades, including The Great Boom Ahead in 1992, The Demographic Cliff in 2015, The Sale of a Lifetime in 2016 and Zero Hour in 2017. In 2019 Harry published his latest book Spending Waves, where he shares decades of extensive research covering over 200 businesses across 14 different industries to give readers a usable tool to find the most lucrative opportunities over the next 20 years.

Today, Harry uses the same research he developed from years of hands-on business experience to offer Dent Research subscribers a positive, easy-to-understand view of the economic future in his flagship newsletter, Boom & Bust.

Shownotes:

India vs China: Who is going to have the biggest economy?

Harry talks about Japan’s mistake

Are we in the beginning of an economic Winter Season?

What does Harry think about investing in apartments?

https://harrydent.com/

**184: Should You Pay Off Your Mortgage?** Nov 10, 2019
A simple question can have so much complexity around it. Here’s one I get all the time: “Should I pay off my house?”.

Conventional wisdom says this is a no brainer. Look at all the financial gurus out there like Dave Ramsey and Suzi Orman—they all think you ought to be paying off your mortgage. Is it possible that they are wrong?

Even in the unconventional alternative space, this is a controversial issue. A mortgage on your house is debt. If you follow Robert Kiyosaki, he says that there is good debt and bad debt. Good debt puts money in your pocket (ie. mortgages on investment property) and bad debt takes money out of your pocket (ie. buying a television on your credit card).

That’s straight forward. But what about the debt on your personal residence? Clearly that does not put money in your pocket. You could argue that with appreciation it might some day, but it certainly does not make you any money in the short term. So…it’s a bad debt, right?

Yes, but wait a second. Chances are, your interest rate is pretty low. Instead of paying off your mortgage that is 3-4 percent, one might argue that putting excess capital into something relatively safe like Wealth Formula Banking that yields 5-5.5 percent compounding might make more sense. In fact, that would give you not only tax free-arbitrage, but also liquidity to borrow against at a moments notice.

I hear some people say that they keep equity in their home in case they need to access it for liquidity through a home equity line of credit. But the problem there is that if you have an emergency (ie. you lose your job), your bank may not let you access your home equity anyway. Banks only lend to people with income and good credit. In other words, you may not be able to get to your own money when you need it the most!

And let’s not forget why that bank doesn’t want you to pull that equity out if you get into trouble. When you have a lot more equity in your home, you become a bigger target for foreclosure. If there is little equity in your home, the banks don’t see nearly as much value in foreclosure.

Lots of equity in your home, on the other hand, makes you a bigger target for creditors. Just remember, when you get sued, debt like mortgages and other loans are your best kind of asset protection!

Now, you may be reading this and concluding that I am a fierce advocate of leveraging your home to the hilt. That’s not necessarily the case. I am just a fierce advocate of thinking about what you are doing rather than just following conventional financial wisdom.

What I will say is that *the math* favors not keeping a whole lot of equity in your home if you consider the time value of money and asset protection. The rest, in my opinion, is psychological. When it comes to debt on your personal residence, the psychological often supersedes the math and that’s okay too. I just want you to think about *why* you do what you do.

Now, what if there was a way to access home equity without borrowing? What if you could sell part of the equity in your home and not have payments to worry about? There is actually a relatively new product known as a home equity contract that could potentially allow for you to have your cake and eat it too.

That’s what we are going to talk about on this week’s Wealth Formula Podcast so don’t miss it!

Shownotes:

The problem that Quantm.One tries to address

What is Quantm.One?

Why Home Equity Contracts are becoming more popular

How to have your cake and eat it too.

Matthew talks about Quantm.One’s online process

Bonus Episode: Cost Segregation and Bonus Depreciation! Nov 09, 2019

With the end up the year coming up, my mind is focused on what I can do to mitigate my tax burden.

We’ve done multiple investor club webinars on different strategies already this year within investor club. However, my favorite strategy to minimize my tax liability is to maximize depreciation.

As it turns out, I have two houses in the Chicago area that I rent out. I used to live in one of them. Because they are single family homes, I did not consider doing cost segregation analysis studies on them.

I figured that it would not be cost effective to do so. As it turns out, I was very wrong. There are some providers that are very skilled that provide highly reliable cost segregation studies of smaller assets as well.

David Brizel, CPA is the guy who kept coming up in Wealth Formula Network. The way people glowed about him, you’d think they were on his pay roll!

Anyway, he’s based in Phoenix but I’m flying him out to Chicago to do the studies because it will still save me money compared to the big firms out there.

I’m glad I decided to look into this. As it turns out, the two houses combined will result in about $200K of depreciation for me that can be applied to 2019!

Anyway, I can imagine some of you are in the same boat—rental houses that you didn’t consider doing a cost segregation analysis on. So, I asked him to be on the show for a bonus episode.

Hope you enjoy it!

https://costsegstudy.com
costseg@costsegstudy.com

**183: Investing in Collectible Cars!** Nov 03, 2019
By now, you know my paradox. The more I invest in real estate, the less I pay in taxes because of my real estate professional designation.

It could be worse. I could *not* have the designation and not be able to apply passive losses to all sources of my income! It’s a good problem to have.

My situation makes me think about the profound impact of the basic tenet of microeconomics. That is, people do things because they are incentivized to do so.

In my case, I am incentivized to invest in real estate. Because I have profound tax advantages from investing in real estate, it makes me hyperaware of investments and expenditures that do not have any tax advantage.

It’s the reason that I won’t even consider investing in the equity markets. If I’m operating outside of my real estate happy place, there better be tremendous yield potential (ie bitcoin), a benefit beyond just the investment itself (Wealth Formula Banking), or something else compelling.

As a car guy, this has put me in a difficult spot. I love cars—especially Italian sports cars. But buying a Ferrari off the lot just makes no economic sense at all. It’s guaranteed to depreciate by no less than 50 percent over the next 20 years. Then, it may or may not start to regain its value.

Another option I have considered is focusing on maximally depreciated sports cars—say something from ten or fifteen years ago. At least then I wouldn’t have to worry about losing value as much.

What I would really like to do eventually is have a collection of classic cars. I’ve mentioned this before and almost did pull the trigger on my first acquisition a few months back after a perceived near death experience. But the microeconomic incentives once again prevailed. I also realized that I didn’t really have the garage space to park a multiple six figure investment.

So…for now, I am still driving my Prius. However, to be clear, I still love the idea of buying *nice* things that will likely appreciate over time. Nothing you buy from Ikea will ever go up in value. So, why not buy some things that are more expensive that you can enjoy for a lifetime and sell them at a profit someday?

Anyway, I will follow my own advice soon enough when it comes to cars. In the meantime, I have found a super cool business that allows you to own a fraction of your favorite classic or rare supercar and trade it via an on-line marketplace.

The business is called Rally Rd. and it functions solely as a mobile application. It’s a fascinating business model and one that you may particularly enjoy if you like to combine your hobbies with investing.

This week’s Wealth Formula Podcast features an interview with one of its founders, Rob Petrozzo!

Rob Petrozzo is the Co-Founder, Chief Product Officer at Rally Rd. Rally Rd. is a free app that allows members to invest in individual blue-chip collectibles with ease. Each asset on Rally Rd. is vetted by a team of industry experts, acquired, insured, and professionally maintained & monitored 24/7.

Shownotes:

Rob’s background

How Rally Rd. started

Rally Rd’s market

Classic cars and the economy

rallyrd.com

**182: Charitable Giving for Profit and Gain!** Oct 27, 2019
If you read the title of this email and felt a little weird about it, I think that’s pretty normal. It was intended to get a reaction out of everyone. For those who believe in giving for the purpose of being a good person, it might disgust you to think of adulterating your good deeds.

If you are less charitable minded, it gave you good reason to read further rather than delete an email about giving your hard earned money away.

The truth is that charitable giving is complicated. For those who have done much of it, you know there is a benefit to you that you understand yourself, but is a little hard to explain.

You see, several scientific studies have shown that giving money to charity makes you a happier person. In that regard, charity is not entirely *charitable*. In exchange for a monetary gift, you are getting a psychological boost— a return of happiness so to speak.

Of course giving can have a financial benefit as well. You get a tax deduction every time you give and, if you give enough, you can even drive yourself down to a lower tax bracket and potentially come out even.

That’s very basic charitable giving economics. But obviously there are a lot more levels of complexity used by the ultra-wealthy for tax and social benefit.

You have already seen leveraged charitable giving in the form of conservation easements although they certainly are not without controversy. That has not stopped the likes of Ted Turner and Donald Trump from utilizing them.

Charity, as it turns out, has its own complexity when it comes to higher level personal finance. You have probably heard of things like charitable remainder trusts and other vehicles used by the ultrawealthy to legally avoid estate taxes.

These strategies are complicated for sure and I can’t say that I really understand them. However, they are also really powerful and worth knowing about because they may very well begin applying to you before you know it if you are participating in our Investor Club offerings!

For that reason, I invited Jerry Borrowman on Wealth Formula Podcast this week. Jerry is one of those guys who really understands the nuances of all of this stuff. That’s more than I can say for 99 percent of the advisers out there—even the ones who deal with the ultra wealthy.

If you want to understand how estate taxes can become legally optional and actually leave more money to your children by giving money away, don’t miss this episode.

Buck

P.S. I asked Rod from Wealth Formula Banking to help me with the interview. If you have any questions about this interview, reach out to him at rod@wealthformulabanking.com

Jerry Borrowman joined New York Life as an agent in Pocatello, Idaho on March 3, 1978. In the course of the next 24 years, he worked as an agent, sales manager, trainer, and assistant vice-president in field technology. He traveled for New York Life International including work in India, Hong Kong, and Argentina.

In 2001 he joined Beneficial Life as Vice-President of Advanced Solutions and Professional Development, where he and his team provided classroom and internet training, illustration support, and individual case support. Jerry also worked as a member of the Product Design Committee, Agent Market Conduct Compliance Committee, and as lead designer for agent software. When Beneficial Life withdrew from the sale of new products he joined Cambridge Financial Center, the Utah, Nevada, Idaho and Arizona affiliate of Penn Mutual Life Insurance Company, where he works as Director of Advanced Solutions. In the course of his career, Jerry has taught more than 2,000 classes to agents on topics related to all areas of advanced markets, in more than thirty states, and a variety of foreign countries.

Shownotes:

Why do families with considerable wealth use charitable giving tools to reduce their estate tax?

The estate tax is a voluntary tax

Jerry talks about the estate tax exemption

Do charitable gifts reduce the amount of money available to family beneficiaries?

Income tax savings with charitable gifts

**181: Changing Your Wealth Mindset with David Phelps** Oct 20, 2019
Where are you today? Where do you want to be? Based on what you are doing right now, is there any chance that you are going to get there? Those are questions that I ask myself frequently—especially when I feel like I’m in a rut.

Why is it important? Well, for those of us who are fortunate enough not to have the burden of worrying about where our next meal will come from, we have the opportunity to create our own destinies. But the fact that we don’t have to *hustle* anymore also increases the likelihood that we go on auto-pilot and live a life of abundant mediocrity.

If you don’t care for more than that, more power to you. However, if where you are today does not match where you want to be, make sure you do something about it. If you want to win the lottery, you have to at least buy a lottery ticket!

In my case, I would like the opportunity to influence the thinking of more professionals like you. I’ve done pretty darn well this year and it would be easy for me to sit on my laurels and congratulate myself in hopes of simply repeating my success in 2020.

However, simply repeating the success I had in 2019 is not what I wish to to do. In order to get where I want to be, I need to touch more people. I am a firm believer in the words of Zig Ziglar, “You can get everything in life you want if you will just help enough other people get what they want”.

So the question I need to be asking myself is whether I am putting myself in a position to maximize how many more people I draw into our Wealth Formula Community. I need to make sure that I give myself the best chance to grow the brand and to spread its message.

How about you? What are your goals? Maybe you want to add a zero to your net worth. If that’s the case, can you get there just by doing what you are doing now or do you need to actively change your facts? What is it that you need to do?

The people who do the most in this world do it by design. Very few people accidentally get rich. Professional athletes and entertainers work their asses off at their craft before they become rich and famous.

People who get rich from their investments do so by investing in things that could *possibly* make them rich! Stocks, bonds and mutual funds are not going to make you rich.

Listen, I’m not here to tell you that you have to change your life. I just want you to make sure that you are not moving through life like a zombie and regret that you didn’t at least put yourself in a position where achieving your dreams was even possible. Remember—you can’t win the lottery if you don’t buy a ticket.

Being a physician, dentist or engineer does not define you. You define yourself with your own efforts.

My guest on Wealth Formula Podcast this week is a great example of that. David Phelps started focusing on real estate during dental school and went on to become a major influencer for his colleagues in personal finance.

When people think of David, they don’t think dentist, they think financial freedom. He is a great example of someone who has taken his destiny into his own hands despite coming from a typical professional background. You definitely want to hear what David has to say.

**David Phelps, D.D.S.**
Owned and managed a private practice dental office for over twenty-one years. While still in dental school, he began his investment in real estate by joint-venturing with his father on their first rental property in 1980. Three years later, they sold the property and David took his $25,000 capital gain share and leveraged it into thirty-one properties that later produced $15,000 net cash flow.
Multiple health crises suffered by his daughter, Jenna (leukemia, epilepsy and a liver transplant at age 12), caused David to leave practice so that he could spend time with his daughter. Unfortunately, a divorce and failed practice sale provided additional setbacks that he had to think and work through.
Today, David is a nationally recognized speaker on creating freedom, building real businesses and investing in real estate. He also combines his professional and personal experiences to illustrate how the tactical and aspirational work together. David helps
other logical, rational professionals become dreamers, then strategically manifest those dreams into freedom. He authors a monthly newsletter, “Path to Freedom” and hosts
“The Dentist Freedom Blueprint” podcast. Freedom Founders Mastermind Community grows exponentially, year by year, providing the pathway to freedom for many professional practice owners.
“The greatest risk in life is doing nothing.”

Shownotes:

David’s story: from dental school to real estate

What school does not teach you about finance

What is the Accumulation Theory?

Why you can’t rely on outdated rules to manage your money today

**180: Is Venture Capital Right for You?** Oct 13, 2019
I’m a doctor, but Wealth Formula is not a doctor podcast. Sure, probably 30-40 percent of my Accredited Investor Club is made up of physicians and dentists, but that just happens to be the byproduct of my own professional past. People with common background tend to flock together I guess.

That’s fine with me. I love working with other health-care types but I don’t ever want to approach them cold. You see, when I first set out to do this show, I was going to make it about doctors. It made sense to carve out that niche since, at the time, no one was really filling the vacuum.

In the end, what kept me away from a doctor show was that most physicians are too difficult to convince of anything other than conventional financial wisdom and other bad ideas.

The voices that have emerged as influencers for doctors now talk of ETFs and “living like a resident”, which of course is at odds with my real asset, abundance focused approach.

Back when I lived in Chicago, I tried to reach out to some doctors locally a few times. One of my neighbors was a neurosurgeon making millions of dollars per year who was dumping his money into a financial advisor like everyone else and his idea of alternative assets was investing in medical device companies that would randomly solicit him at his office or in the operating room.

Not to be too negative about medical device opportunities, however, I have *never* seen a doctor invest in a medical device and make the millions he typically anticipates.

Why? Well, a good idea only goes so far. You have to have a demand for the product and a very good team implementing that plan.

And while those great opportunities do exist, most individual doctors never see them because smart investors and venture capital get to them first. Most medical device startups come to doctors when they are pretty much busts to begin with and after everyone else has said no.

But that’s your typical doctor investing—send it to the wealth advisor or spend it on an idea that will never take off. It’s painful to watch but even more painful to try to intervene. So now, I just work with the doctors, who along with everyone else in my network, find me and who are open to another approach to personal finance.

I should point out that, as I’ve said before, I don’t think it’s a bad thing to invest in high risk high reward type investments with a small portion of ones portfolio. However, there is a smart way to do that as well. You still need to dig into the information that is available and be smart about your allocations. It is even smarter if you come at it as a team.

Venture capital is certainly one approach to asymmetric risk that is worth considering. If you find the right group with whom to invest, you might have an opportunity to achieve considerable returns on an asymmetric risk fund. The idea there is that you put your money in competent hands to spread over multiple opportunities. Some of them might go bust and some might result in 5x-10x outcomes.

I personally have not invested in any venture capital myself, but I would do that before I ever considered investing in a medical device company that came knocking at my door. Even asymmetric risk has strategy to it that can optimize outcomes.

To help us learn about venture capital and to see if it might be right for you, this week’s Wealth Formula Podcast features Vanessa Bartram of Zora Ventures.

P.S. – If you are interested in learning more about ZORA and investing in Israeli tech, to sign up for a webinar they are hosting on Tuesday, October 22nd from 12-1pm EST.

Vanessa is an impact entrepreneur turned impact investor. She began her career in investment banking in Mexico City, advising middle-market companies on M&A strategies and restructurings. She later founded the Miami-based impact HR company, WorkSquare, which she grew to over $25 million in revenue. Vanessa holds an MBA from Harvard, a BA from Princeton, and is a Heritage Fellow with the Wexner Foundation.

Shownotes:

What is Impact Tech?

What’s the difference between a venture capital fund, private equity and angel investing?

Vanessa talks about Zora and why she chose to start Zora in Israel

http://www.zora.vc/wealthformula

**179: Buy, Borrow and Die: Bitcoin Style** Oct 06, 2019
I am in a financial position that may seem somewhat unusual to you. You see, the IRS rewards me for my real estate investments by taxing me less. If, on the other hand, I keep my income in the bank, or invest it in traditional equities or bonds, the IRS shows me no mercy!

Admittedly this is by design. I am a real estate professional. One of the great benefits to that designation is that all of my passive losses flow through my personal tax returns. In other words, all that depreciation and mortgage interest I get by investing in real estate not only builds my net worth, but SAVES me money in the form of tax mitigation. Not a bad deal right?

To illustrate the power of these completely legal tax advantages, remember that with bonus depreciation even limited partners often end up with K1 losses of 50-100 percent of invested capital. Those losses add up in a hurry!

With that perspective in mind, why would I EVER consider investing in anything that is not tax advantaged? Think about the returns I would need to get in order to simply break even with the tax breaks I’m getting from investing in real estate. The returns would need to be HUGE. I’m not going to get that through Vanguard ETFs!

In fact, I truly believe that the only way I can get higher tax equivalent returns on capital is by investing in asymmetric risk type investments. For me, that means *a little bit* of bitcoin.

You may think I am crazy, but I actually don’t even consider investing in bitcoin all that risky. Sure it’s volatile, but I’m pretty darn sure that 5 years down the line anyone who buys bitcoin today will be pretty happy. I’m less sure about all of the alternative coins/tokens. They may have more explosive returns or they may simply go to zero. But bitcoin going to zero?—ain’t going to happen if you ask me.

Now I don’t overdo it with my bitcoin portfolio. For one, it’s important to have discipline and value add real estate is my bread and butter. In fact, I bought bitcoin with only about 5 percent of my investable assets this year. Aside from its riskier nature, buying bitcoin does not save me any money! It’s not tax advantaged.

So what’s a bitcoin HODLR to do? How about “Buy, borrow, and die”? That’s the mantra of the ultra-wealthy. The idea is that you can borrow against most assets that you own and invest in something else. You don’t get taxed on your loan and you’ve got a way to create liquidity out of an asset that is sitting around waiting to appreciate. If you invest those borrowed funds into real estate, not only do you get the benefit of investing your capital in two places at once, but you also get the tax advantages!

You can do this with all kinds of assets. Traditionally, the wealthy have done this with brokerage accounts and other real estate but also with gold and fine art.

The good news is that these days you can even do it with bitcoin and that’s what this week’s show is all about. Zac Prince is the founder of a cutting edge company called BlockFi. BlockFi is essentially creating financial products from the cryptocurrency ecosystem including the origination of loans and even savings accounts that pay cryptocurrency in interest.

In this week’s Wealth Formula Podcast, Zac tells us all about it and gives us his take on the massive infrastructure that is creeping slowly but surely into the bitcoin ecosystem. Whether or not you buy bitcoin, you are going to want to understand what’s going on in the digital ecosystem because soon it will be part of your every day reality. Don’t miss this show!

Zac Prince is the Founder and CEO of BlockFi. Zac’s experience includes leadership roles at multiple successful tech companies. Initially in adtech, where he was a part of two successful acquisitions, Admeld (Acquired by Google) and Sociomantic (acquired by DunnHumby). Prior to starting BlockFi, he led business development teams at Orchard Platform, a broker dealer and RIA in the online lending sector, and Zibby, an online consumer lender. He graduated Cum Laude from Texas State University with a BA in International Business and minor in Spanish.

Shownotes:

How Zach got into Bitcoin

How Bitcoin became more mainstream in the last 2 years

What is the Halvening?

Why is Zach bullish on the future of blockchain?

Zach talks about BlockFi

@BlockFiZac

@TheRealBlockFi

BlockFi.com

**178: Fixed Income for Dummies!** Sep 29, 2019
Have you heard of the 4 percent rule? I’m guessing you have as it seems to be some magical number espoused by traditional financial advisors and bloggers alike.

The idea is that you should safely be able to withdraw 4 percent of your portfolio to live on for retirement. Theoretically the 4 percent is based on the idea that, over time, portfolio yield should outperform 4 percent and result in principal preservation.

Is it really that simple? Maybe it is. Maybe that’s all you need to do and it will work out for you. As you may have guessed, I’m more than a little skeptical of the rule myself.

Why? Well, for one thing, I’m a real estate guy. I like income producing assets with tax benefits that I can see, touch and feel. Admittedly, that’s just my bias.

The bigger problem with the 4 percent rule is that it is based on old data. Specifically, the modeling uses data from 1926 to 1976. To me, that’s a little concerning.

You see, the underlying assumptions of the 4 percent rule are that most of the most of the portfolio income is produced from dividends and fixed income.

What is fixed income? Fixed income comes from bonds of course and bond yields are reflective of interest rates. I don’t need to remind you that we are at historical low interest rate levels now and our president is advocating for negative rates.

How does that make you feel about the 4 percent rule now? It makes me very concerned for my high-paid professional colleagues—doctors, lawyers and engineers who are following the 4 percent paradigm like it is religion. While it may work out, it sure doesn’t sound like a risk that I would want to take.

We live in unparalleled times. How in the world can we use hundred year old data to guide us into retirement? No way I’m doing that. But the problem is that most of our colleagues will and all we can do is watch them like an accident ready to happen, hoping they will survive.

In the meantime, we need to continue to educate ourselves. Financial education is our best weapon defense against going broke.

In line with that, my guest on Wealth Formula Podcast today is an author and educator that I have invited to teach us about the biggest financial sector on earth: the bond market. Without understanding the bond market, you cannot understand the economy. Don’t miss this interview!

Russell Wild is the principal of Global Portfolios, an investment advisory firm based in Philadelphia, Pennsylvania. He is one of few wealth managers in the nation who is both fee-only (takes no commissions) and welcomes clients of both substantial and modest means. In addition to the fun he has with his financial calculator, Wild is also an accomplished writer who helps readers understand, and make wise choices about their money. His articles have appeared in many national publications, including AARP The Magazine; Consumer Reports, Kiplinger’s Personal Finance, Reader’s Digest, and The Saturday Evening Post. He also contributes to professional financial journals, such as Financial Planning.

The author or co-author of two dozen nonfiction books, Wild’s most recent books, Investing in Bonds for Dummies (2016), and Investing in ETFs for Dummies (2016) — are updated and condensed “portable editions” of his Bond Investing for Dummies and Exchange-Traded Funds for Dummies, which both had second editions published in 2012. Prior books include Index Investing for Dummies (2009), and One Year to An Organized Financial Life (co-authored with Regina Leeds, Perseus, 2010). Before those, he wrote The Unofficial Guide to Getting a Divorce, along with attorney Susan Ellis Wild, his ex-wife – yeah, you read that right (Wiley, 2005). No stranger to the mass media, Wild has shared his wit and wisdom on such shows as Oprah, The View, CBS Morning News, Good Day New York, and in hundreds of radio interviews.

Wild holds a Master of Business Administration (MBA) degree in international management and finance from Arizona State’s Thunderbird School of Global Management (consistently ranked the #1 school for international business by both U.S. News and World Report and the Wall Street Journal); a Bachelor of Science (BS) degree in business/economics magna cum laude from American University in Washington, D.C.; and a graduate certificate in personal financial planning from Moravian College in Bethlehem, Pennsylvania (America’s sixth oldest college). A member of the National Association of Personal Financial Advisors (NAPFA) since 2002, Wild is also a long-time member and a past president of the American Society of Journalists and Authors (ASJA).

Shownotes:

Russell’s background

What are Bonds?

The role of bonds in traditional investing portfolios

What are Junk Bonds?

Russell talks about the 4% Rule

Global Portfolios: Globalportfolios.net

**177: Agricultural Investing in Paraguay?** Sep 22, 2019
I am a simple guy. When I bowl, I throw the ball right down the middle of the lane. I couldn’t put any spin on it if I tried. My thinking is equally simple. In order for me to understand things, I have to break them down into smaller, easier to digest bites or I won’t understand.

When I tell people that, they think I am joking. How does a guy who spent time as a brain surgeon call himself simple? Well, I am telling you the truth.

I thrive on simplicity—by connecting a series of lines from point A to point B. If I can connect all the dots, I will get it and, in fact, I will be able to explain it to someone else so they understand it as well. If anything, that is my superpower.

But I don’t like complexity. Too many moving parts means too many chances for error. So, whenever something looks a little different than what I am used to, it makes me nervous.

Agricultural investing is one of those things that I don’t know much about. In theory, it sounds like a good idea. People have to eat, right?

Investing over-seas?…I’ve done it before and I probably will never do it again. I like predictability. And, you can say a lot of negative things about the US, but it is still a land ruled by law and a government that will not be overthrown anytime soon. If someone screws you over, there is a good chance you will get retribution. It’s good to be an American investing in the United States.

That said, I also have an open mind so I like to talk to people about things that I don’t understand or inherently feel comfortable about. After all, there was a time that I didn’t really understand multifamily real estate. Since then, I have pretty much bet my life on multifamily real estate and, while many uncertainties in life make me uneasy, my real estate investments do not.

Real estate in the United States is what I know, but living in a bubble is not good either. Therefore, I make an effort to constantly listen to new things and, as a result, have changed my mind more than once and fine tuned my own investing philosophy.

So, this week’s show is going to explore something I know nothing about: agricultural investing in Paraguay.

Is it right for you? To find out, listen to this week’s Wealth Formula Podcast.

David Smith is an Agricultural Advisor at Paraguay AG invest

Shownotes:

David’s background

What’s the case for investing in agriculture?

What are the risks involved with agricultural investments overseas?

David talks about Paraguay AG’s business model

Why do you need to diversify your portfolio?

https://paraguayaginvest.com/

david@paraguayaginvest.com

**176: Should You Invest in Multifamily Real Estate NOW?** Sep 15, 2019
There is clearly fear in the heart of investors in the equity markets and real estate alike as talk of trade wars and recessions abound.

Meanwhile, I’m investing *more* in multifamily real estate this year than I ever have. In fact, I’m investing my 80 year old dad’s money in the same offerings—the opportunities everyone sees in Investor Club!

So why would I do this? Well, lots of reasons. Here are just a few:

1. **I can’t time the market.** The podcast echo chamber has been warning of the impending zombie apocalypse for at least 4 years now. Since then, I have been in and out of multiple deals creating permanent wealth. If we do have a recession (**which I don’t doubt**), does it have to be a blood bath? Remember, the average length between recessions is 5.5 years. **If you enter an investment today, you could very well be back at the top of the cycle by the time you are ready to sell.**

2. I only invest in quality assets that are in quality markets. What does that mean? Well, **I like multifamily real estate located in high growth areas.** If there is strong growth in population and in jobs organically today, then there is no reason that demographic trend shouldn’t continue with or without a recession over the long term. That means a lot of people needing to live somewhere and multifamily real estate solves that problem. While it may be the case that my returns slow down for a year or two if rent growth slows, if I invest in quality assets in quality areas, I don’t worry too much about it. **I don’t believe I will lose money.**

3. What makes me so confident that I won’t lose money? Well, the basic thesis of my investing is to not buy and hope. **For those in INVESTOR CLUB, you know that I am a believer in forcing equity through value-add strategies.** That means we are dynamically decompressing our own property cap rates and giving ourselves a bigger cushion in the event of any slow-down. We create value from day one and that’s why our multifamily investment returns have averaged 30 percent annualized over the last 6 years—way above proforma’s. If a downturn happens, we have a big cushion!

4. **I believe in the volume averaging approach.** This goes back to the fact that I cannot predict market cycles. I prefer potentially less growth and capital preservation during a recession (real estate) over negative growth or losing money (money in the bank or stock market). As long as I invest in the right deals with the right operators, I just keep deploying capital on a regular basis. The ups and downs of the market cycles will take care of themselves.

5. The longer I’m in the investing game, the more I’m convinced it has more to do with the team than the asset itself. **Right now, I have operators that I trust that make it very easy for me to deploy capital and *that* is the BIGGEST reason I am investing so much in real estate NOW.** Even if there is an economic downturn, I’m in a very safe position with an extremely competent team. In fact, we will continue to buy through any potential downturn and follow it all the way back up!

Do I sound too optimistic? I would say I’m being realistic. Understand that, although I won’t be surprised to see a downturn in the next 12 months or so, **I believe the next decade will be the “roaring 20s”**—just like the ITR economics guys told us in a previous podcast. I don’t want to miss any of that!

That said, I’m always listening to what economists and other experts have to say. In fact, on this week’s Wealth Formula Podcast, I have a highly respected economist who specializes in multifamily real estate. His name is Ryan Davis and he definitely knows what he’s talking about so make sure to tune in!

Ryan received a Ph.D. degree in Economics from The University of Texas at Dallas and graduated summa cum laude from Sewanee: The University of the South.
After completing his Ph.D. program, Ryan joined Witten Advisors as a Senior Economist. Previously, Ryan was Vice President of Royal Bank of Canada’s Capital Markets division where he was responsible for originating, underwriting and closing multifamily and commercial mortgages for inclusion in CMBS pools and for sale to Fannie and Freddie. Before RBC, Ryan was a Director at BMC Capital, a multifamily and commercial mortgage-banking firm.
Ryan has been a keynote speaker at industry conferences and co-presents all client updates with Ron Witten. He is a member of Urban Land Institute’s (ULI) Multifamily Gold Council, ULI North Texas’ Multifamily Council, ULI North Texas’ Center for Leadership Program, and the National Multifamily Housing Council. Ryan currently serves on the board of the DFW Association for Business Economics, elected President for 2018.
He serves as Director of Research and Client Services at Witten Advisors. In this role, Ryan provides fact-based research, analysis and discussion to help clients formulate their apartment market strategies. This insight informs investment decisions for multifamily development and buy/sell opportunities.

Shownotes:

Ryan’s background

The recession does NOT necessarily mean zombie apocalypse

http://www.wittenadvisors.com/the-witten-advisory/

http://www.wittenadvisors.com

**175: Cryptocurrency and Asymmetric Risk with Teeka Tiwari** Sep 08, 2019
Up to 10 percent of my liquid assets are in very risky stuff—specifically digital assets and startups.

A lot of people people think I am being irresponsible—particularly because I have a captive audience with whom I have influence.

Now if I was shooting at the hip and telling you to put all your money in this stuff, I would understand. But even highly volatile investments (ie. gambling) may have their role in your portfolio.

To be clear, every year, I allocate no less than 80 percent of the money I invest into real estate through Investor Club. There are many “wealth advisors” out there who would tell me that’s nuts too—that I would be better with a substantial portfolio of stocks, bonds, and mutual funds. Ain’t gonna happen.

One of the great benefits of becoming financially literate is that you get to make your own decisions and feel confident about them. You don’t need someone with a three month long accreditation course to tell you what makes sense.

In my opinion, residential real estate isn’t risky if you know what you are doing or invest with someone who does. People have to live somewhere regardless of the Dow Jones Industrial Average.

Real estate in the hands of an ambitious immigrant with no money (my dad), ultimately paid for my upper middle-class upbringing and my education through medical school! Why would I consider it risky? The only time my dad got in trouble was when he invested in the stock market.

Now, let’s go back to this buying digital currency thing again. You and I know this is *seriously* risky. But you know what?— a lot of people have gotten very wealthy off this stuff already and it’s still in its early days.

So let me ask you this. Say you invested $20K into a variety of cryptocurrency projects today and lost it all. Would that kill you? Alternatively, say your $20K became $2 million—is it worth it for you to at least have a chance of this happening in your lifetime?

That’s the kind of analysis you need to do for *yourself* when considering investments of the asymmetric risk profile variety. Chances are if you are a follower of Wealth Formula Podcast, you are already doing fine. You make a great income and have all the basic things you need to live a happy life. But what if you had exposure to something that could put you in another league of wealth entirely? Would it be worth putting a little capital at risk to make this happen?

It is for me and that is why I invest in cryptocurrency. This is not foolish—this is calculated risk. It is the kind of risk that the wealthy take all the time. It’s how millionaires become billionaires and how ordinary people can make money that they never imagined possible.

In fact, even the largest, most respected university endowments like Yale and Stanford are getting in the game with small allocations in the digital currency space just to make sure they don’t miss out.

And why now? Well—because no one is talking about it. The bull market of 2017 had everyone and their mother investing in cryptocurrencies. Two years later, technology is better and institutional money is starting to get in, but investors don’t seem that interested.

That’s exactly why, if you have not gotten exposure to digital assets, now may be the best time to take the leap. The more you read about this stuff, the more excited you will get!

To help you understand what is going on with cryptocurrency and whether you should consider getting into the game, I invited Teeka Tiwari back on Wealth Formula Podcast. He’s a former Wall Street guy with serious credibility with institutional investors and family offices.

He is also a great teacher so make sure you tune into this week’s show.

P.S. To find out EXACTLY why investing in cryptocurrency makes sense NOW, make sure to sign up for Teeka’s upcoming webinar HERE.

Mr. Teeka Tiwari is a Editor at Palm Beach Research Group LLC. He is responsible for the firm’s flagship service, The Palm Beach Letter and small-cap and cryptocurrency advisory, Palm Beach Confidential. Earlier, Mr. Tiwari served as a Co-Editor and was also an Editor for Jump Point Trader and Mega Trends Investing at the firm. Previously, he was a hedge fund manager and launched a hedge fund. Prior to this, Mr. Tiwari was a Vice President, youngest in history, at Shearson Lehman. At the age of 18, he was the youngest employee at Lehman Brothers. Mr. Tiwari has been a regular contributor to the FOX Business Network and has appeared on FOX News Channel, CNBC, ABC’s Nightline, The Daily Show with Jon Stewart, and international television networks.

Shownotes:

Teeka talks about Asymmetric Risk Trade

Why Cryptocurrency?

Why is Bitcoin so volatile?

Is Crypto Winter over?

The Palm Beach Confidential Newsletter

**174: How to Invest in Fine Art with Beer Money!** Sep 01, 2019
Last week I was in Monterrey for car week. While I still drive my Toyota Prius from 2008 that I purchased during my final surgical residency year, I have an appreciation for vintage Italian cars so I attended the annual Concorso Italiano.

Those old Ferrari’s are beautiful! There was a particularly stunning silver 1973 Ferrari Dino that I couldn’t get out of my mind. There is a guy at my YMCA who drives a Dino (only in Montecito)—he bought it brand new in 1975! I was telling him about the event and, as it turned out, he was there too.

“Yeah—but Dino’s are slow,” he said. “If I buy a new car, it’s going to be a Tesla. Those things are crazy fast!”

“But Tesla’s have no soul!” I argued.

To me we were talking about two different things. He was talking about performance, and I was talking about art. Now, I’m not much of an art guy but I think my love for old Ferrari’s is much more inline with an art critic’s love of Andy Warhol rather then a guy who just wants a fast car.

I could care less if that Ferrari is slow. I just want to appreciate it for what it is. It’s a sensory masterpiece. Look at it. Listen to it! Tesla’s are silent and damn ugly in my opinion—especially that SUV. It looks like an overgrown Prius.

Now why did I go to this car show anyway? Just to torture myself with envy? No… I’ve been thinking about buying my first vintage car. There’s a few I have in mind. I love Ferrari’s but a 1967 Lincoln Convertible sounds cool too, and I could throw all my kids and their friends in the back seat (and the rest of the neighborhood as well).

A couple years ago, I would have never even considered buying something so “frivolous”. That’s because I never saw it as investment. While it’s true that buying a fancy new car would guarantee a loss of money for the foreseeable future, buying one that has fully depreciated in value and pivoted to become a collectors item is a totally different animal.

The new car is what Robert Kiyosaki would call a “doodad”. While a vintage collectible car would be, what I would call, an asset. Sure it doesn’t cash flow but neither does gold. I would rather have a Dino than a few ounces of gold any day!

In the world of the affluent, the theme of buying things that you can enjoy today and have as something worth more ten years from now is quite common. I didn’t really notice it until some of my wealthy friends opened my eyes. If you can afford it—it’s a very smart way to live. Just think about the amount you spend on cars, furniture, watches, and wall decorations that are sure to be worth zero some day. What if you could replace all of those with appreciating assets?

It’s a very interesting way to live and one that I am really starting to warm up to—that’s not easy for a guy who still drives his 12 year old Prius.

Now I get that not everyone can afford to spend $300K on a vintage car or $3 million on a piece of art. But financial technology is really making some of the things that were previously not attainable for most of us into a reality.

How about owning an Andy Warhol? Did you know that right now you can invest as little as $25 and own part of a famous Warhol piece? You can even visit the painting at a gallery in New York and enjoy it for yourself.

This whole new world of investing is very exciting and my guest on this week’s Wealth Formula Podcast is one of the entrepreneurs who is making it happen.

So, if you want your piece of that Warhol or whatever blue chip artist gets you excited, listen to Scott Lynn tell us exactly how to do it.

Scott Lynn has been an active collector of contemporary art for more than fifteen years and has built an internationally-recognized collection of Abstract Expressionism that has included works by Clyfford Still, Barnett Newman, Mark Rothko, Willem de Kooning, and more. In addition to Masterworks, Mr. Lynn serves on the board of v2 ventures (Adparlor, Giant Media, Reachmobi, Amply, and Sellozo), Payability, and the Brooklyn Rail (a non-profit publication in the art industry).

Shownotes:

How Scott got started investing in art

Who are the Blue Chip artists?

What Masterworks and Scott do to address the risk of art forgeries

Scott talks about recent Masterworks art funds

The decreasing supply of art and how that affects pricing

Masterworks.io

**173: What Worked During the Great Depression?** Aug 25, 2019
With the rocky stock market and concern for recession in the air, it is always interesting to go back and reflect on investing behaviors over time.

These days, when people are frightened, they don’t invest. Instead, they keep all of their money in the bank. Why? Well, you’ve probably never witnessed a bank failure and lost your money. In fact, unless you’ve lived through the Great Depression, you’ve seen nothing but bank bailouts and smaller banks being gobbled up by huge banks that are *too big* to fail!

But during the Great Depression, thousands of banks failed and there was no FDIC protection for those who lost their life savings. People living in that period of time experienced banks closing their doors and not allowing them to withdraw funds on a regular basis.

As it turns out, as banks turned their backs on people, the life insurance industry provided its policy holders with substantial amounts of liquidity at a time when it was much needed. Cash value life insurance policies saved many families from financial ruin.

It is no surprise, therefore, that after World War II the life insurance industry entered a Golden Age. Those living through the Great Depression wanted nothing more than reliable growth and stability. Bank failures and the stock market crashes were fresh in people’s minds making the safe haven of life insurance all the more appealing.

It is this sense of steady growth and security that has made Wealth Formula Banking such a major part of my investment strategy. It is a dynamic tool providing tax free growth, the ability to have access to significant asset protected liquidity and an opportunity to provide leverage to all of my cash flow investments (double dipping as I call it). Apart from all of these features, it is simply the safest investment I have.

Now don’t get me wrong, the majority of my money is in real estate which, when done properly, can be pretty darn robust in a downturn as well. In fact, part of what makes insurance companies as strong as they are is that they own a lot of the most expensive real estate in the country.

The stability of life insurance products makes it incredibly appealing to me. How do I use it? Well, typically people have portfolios of stocks and bonds. In my case, I own almost no stocks. I own real estate instead of stocks. My version of bonds is Wealth Formula Banking.

What’s funny to me about being such an advocate for Wealth Formula Banking is that, despite the fact that it is a life insurance product, I think of it as an investment tool for when I am living. Until recently, I didn’t even think about the death benefit. But recent false health alarms in my life have led me to start considering legacy and the value of the death benefit as well.

As investors, we don’t get to see the upside of the death benefit on our own policies obviously. However, there is a way to get exposure to this part of the life insurance benefit—by buying someone else’s life insurance policy.

You see, permanent life insurance policies are assets that can be legally sold to someone else. When I first heard about this concept a few years ago, I was amazed that I had never heard about it. As it turns out, it was because only hedge funds, banks, and other institutional players were playing in this market.

When I set out to find a way to get exposure to this asset class myself, I was lucky enough to run into a company called ASR that, after significant due diligence, I decided to partner with and they have been part of my team since that time.

Tim Wright is a partner at ASR and a wealth of knowledge when it comes to life insurance products and their role throughout history and in your portfolio. If you need some hedging in your portfolio, you are not going to want to miss this week’s episode as I talk to Tim about the different ways to get exposure to life insurance policies as an investment.

Tim joined ASR Alternative Investments in 2007 and currently serves as Vice President and Senior Partner. His many responsibilities include overseeing and facilitating ASR’s growth and marketing strategies. As a key front player in the ASR team, Tim has been an integral part of the companies expansion and revenue growth in recent years. His unquestionable grasp of the industry coupled with his astute marketing skills has earned him the highest respect from both clients and financial professionals.

Prior to ASR, Tim worked for Enterprise Rent a Car for 18 years. During this time, he held several executive positions including Assistant Vice President at the World Wide Corporate Headquarters in St. Louis, Missouri. He was responsible for European operations expansion in the UK, Germany and Republic of Ireland. His most recent position with Enterprise brought him to the Dallas/Fort Worth area where he served as the Regional Vice President and Corporate Officer of a 50 million dollar operation, responsible for 300 employees in 40 locations, including the DFW Southwest Regional Headquarters. In 2007, Tim chose to retire from Enterprise and join American Safe Retirements.

Tim grew up in Southern California and Washington State. He attended Washington State University in Pullman Washington and currently lives in Southlake Texas with his wife, Theresa, and their five children.

Shownotes:

Life insurance companies and the Great Depression

What makes life insurance companies a relatively lower risk investment compared to other assets?

Tim talks about the importance of the Contestability Period in life insurance

The ASR approach to life settlements

hedgetheeconomy.com

172: Ask Buck Aug 18, 2019

A while back, I had a guy on the show who had created an entire business focused on the creation of new Udemy content. Udemy is an app that allows anyone to make a course and publish it for others to buy.

Courses are peer reviewed so you get a pretty good idea of what might be worth your time. It’s actually a really good deal. You can cherry pick only highly reviewed courses and buy them for just a few bucks. It’s amazing how cheap learning can be online these days.

Because of that, I have developed a rather bad habit of accumulating courses that I never watch. So, this morning, while at the YMCA chugging away on the elliptical, I decided to pick out a course to finally start. I had several options dating back to over six years ago. Most of them were not really that relevant.

The archive of courses gave me an interesting glance into my thought patterns over the last few years. I once bought a course on how to buy probate properties. It’s probably fine for someone doing this kind of thing full time, but the idea of sending out letters to executors about buying single family homes and hoping someone responds doesn’t quite make any sense any more.

It sounds like a lot of work for relatively modest gains—sort of like wholesaling or flipping houses. I know some of you are probably really good at it but it’s not an easy thing to do and even harder to scale into an eight or nine figure business.

Frankly, I have come to realize that the effort required to scale something to eight figures is not any more than what it takes to get to six figures. The only difference is the monetary reward of each endeavor. If you are in the wrong business, you can very easily be highly successful yet struggling to pay your bills.

So, if you are just starting out, make sure you focus on something with some real upside. Here’s an example—rather than flip houses, why not flip apartment buildings instead? You can make millions of dollars that way. Don’t think it can be done? Well, that’s how Western Wealth Capital started and now they have over a billion dollars of multifamily real estate under management. Just watch one of our Investor Club presentations and it will blow you away!

It took me a while to come into this kind of state of mind—to think only big and to say no to everything else. I used to have a problem that a lot of entrepreneurs have—chasing shiny objects. Not anymore!

That’s why you don’t see me at every conference and you don’t see me investing with a million different groups. It’s really not about how much you work. It’s about spending your time doing things that are actually impactful.

I have found that the best course of action is to find something that works that is scaleable and keep working on it rather than looking for new projects or partners.

I wish I had come to this realization earlier but I’ve never really had a mentor to help me get there quicker. I’m not sure it would help as I have been told that I am uncoachable anyway. That said, I am always happy to share my own experiences and evolving perspectives these days to anyone who will listen. That’s why I do “Ask Buck” shows like the one I recorded for you this week!

**171: Sudden Death, Vintage Ferraris and Wealth Formula Banking!** Aug 11, 2019
Everything was fine until I got up from that recliner and walked down the stairs of my parents home to call it a night. Suddenly something seemed very wrong. It was like I was in a dream. I could not keep a thought and my whole body started to feel very heavy.

I made it down stairs and saw my wife getting ready for bed. As I lie down, I felt like I was losing consciousness. “Olivia, call 911. Something is very wrong with me,” I said.

She looked very confused and I told her what was going on. She called 911 and the next thing you know, a couple of horribly out of shape paramedics showed up. My elderly parents also came down the stairs. My mother was terrified and took a bad spill on the stairs as the ambulance loaded me up.

As a physician, I was trying to figure out what was going on. I had no chest pain. My vital signs were normal. But I couldn’t stand up, my body was tingling all over, and I had an impending sense of doom. I didn’t know what was wrong, but I knew it *couldn’t* be good.

As the ambulance took me to the University Medical Center (in case I was having a stroke), I felt that there was a very good chance that I was about to die. I was terrified of losing consciousness for fear of never waking up.

I started thinking about my wife and kids. Had I set them up properly? Christian and Rod were finalizing a significantly larger life insurance policy for me that was lacking just one thing—my signature! I couldn’t believe it. Had I taken care of that a day earlier, my family would have been set for life. Now I was thinking about what I actually had and wondered if it would be enough.

I also started wondering how my wife would ever know about where to find all of our investments. I had not done a good job of keeping her in the loop on the basic stuff. Just imagine my poor wife, Olivia, trying to get into my crypto accounts! What a nightmare.

And all that investing and deferred gratitude—was it worth it? Would it really have hurt if I had splurged on that Vintage Ferrari that was up on my bulletin board or that 1967 Lincoln convertible that I passed on for more real estate positions or bitcoin?

Indeed, all of those years of hard work coming down to these last few hours—all I could think about was how I didn’t adequately take care of my wife and kids with enough life insurance and cars I didn’t buy.

When I got to the hospital, they put me through a myriad of tests. The good news was that they seemed to rule out anything big and bad. I started to feel a little better mentally at that point—maybe I was going to make it after all.

Then, after a few hours of tests, I was given three liters of fluid and I started to feel normal again. As it turned out, it was a false alarm. I just had a very bad drug reaction and the fluids seemed to wash it all away.

I spent that night in the hospital but fortunately went home with my wife and three little girls the next morning. I felt very grateful for being alive and seeing those little faces again. For the next few days, I was on a bit of a high and grateful for everything around me.

And of course, as soon as I could, I signed those life insurance documents and vowed to make **Wealth Formula Banking** an even more important aspect of my personal portfolio.

What would you be thinking about if you were convinced that you were going to die in just a few hours? It can happen to anyone at any age of course. Tyler Jenks, who was on my show a couple of times died suddenly a couple weeks ago. He was on Twitter posting videos just a day or two before that and there was no indication that there was anything wrong with him.

And what about all of those people who got killed in the recent mass shootings? No one expected it. It just happened. I was lucky. Not everyone gets to “stress test” their own sudden death. I found that I wasn’t ready for it but I’m getting another chance.

Most of us never really think about mortality despite the fact that it remains the only guarantee in life. You may think of it as a depressing topic but I have to say that it is critical that we keep it in mind to *live* our best lives.

To discuss my experience and help us all learn from it, I interviewed Dr. Colleen Crowley for this week’s Wealth Formula Podcast. Make sure to tune in!

Dr. Colleen Crowley has been a therapist for close to 20 years. She is a firm believer that good therapy should be life-changing and transformative. She has treated a wide variety of issues and worked extensively with couples, individuals, families in crisis, struggling parents, the elderly, those battling depression and anxiety, and the terminally ill. Her specific approach will vary depending on an individual’s needs, but empathy, warmth, and self-reflection are constants.

Shownotes:

Midlife as a really rich time for self-examination

One marshmallow now or two marshmallows later?

People can’t afford to be living in the past

Pay attention to what your body is telling you

www.drcolleencrowley.com

**170: How to Deal with Capital Gains Taxes!** Aug 04, 2019
Is this market hot? Are real estate and equity prices too high? Invariably you are hearing this left and right these days. In fact, I can honestly say that I have been hearing that for at least the last three or four years.

My initial response to the impending zombie apocalypse was to stop deploying capital. That was a mistake. While those of us listening to Chicken Little sat on cash a few years back, other investors made money hand over fist.

So who’s to say that that people sitting on cash three years from now won’t be saying the same thing? It is very difficult to time the market.

So, what do you do? If you lose money by not deploying cash and letting inflation eat away at it and if you are worried about deploying capital into an over-heated market, what’s left to do?

Of course there are options like building up cash in **Wealth Formula Banking** that may make sense for cash accumulation that is very conservative. However, another simple concept is to be selective of where you deploy capital!

For those of you in **Investor Club**, you know that I am deploying capital heavily right now. Why? Well, the projects we are doing are not of the “buy and hope” variety. We are buying heavy value add properties and budgeting significantly for capital expenditures.

We are not relying on market appreciation to increase the value of properties, we are creating value through forced equity. In doing so, we effectively deleverage ourselves and perpetually de-risk our assets.

Am I afraid of an oncoming recession? Not really. A recession is part of the business cycle. We just happen to be in the longest economic expansion in the history of the United States. I fully expect a recession in the next few years. But a recession does not necessarily mean zombie apocalypse. We used to have recessions all the time that people barely noticed.

Despite my belief that a recession will happen sooner or later, I am also of the belief that the next decade will be one of prosperity along with a fair amount of inflation. That long-term perspective helps me to focus on the idea of buying high quality assets in good markets and the creation of equity through value add strategies. Even if the economy slows and markets correct a bit, I consider this is a pretty solid approach and superior to sitting on cash that simply erodes in value over time.

Now, I should point out that when times are good like they are now, it is also not a bad idea to take some profits off the table. If you were lucky enough to invest in real estate over the last five years, you look like a genius right about now—even if all you did was buy and hope.

Selling a business is a pretty good play as well given private equity’s on-going quest to find yield wherever they can.

Whether you’re selling a business or real estate, liquidity events can be very exciting. The idea of a big lump of money headed my way always puts a smile on my face. But one of the things you have to think about before it gets to you is how you are going to keep as much of it as you possibly can. If you don’t, the tax man will be happy to take some of that big wad of cash out of your hands.

Unfortunately, most people having liquidation events have little knowledge of all of the potential options that they have to defer taxes. In fact, there are multiple strategies to do so and my guest on this week’s Wealth Formula Podcast is here to tell us exactly what they are.

Don’t miss it.

Brett Swarts is the CEO of Capital Gains Tax Solutions and every year equips hundreds of business professionals with the Deferred Sales Trust tool to help their high net worth clients solve capital gains tax deferral limitations. His experience includes numerous Deferred Sales Trust, Delaware Statutory Trusts, 1031 exchanges and $85,000,000 in closed commercial real estate brokerage transactions. He’s an active commercial real estate broker and investor himself with experience and holdings in Multifamily, Senior Housing, Retail, Medical Office and Mixed-Use properties. He is a licensed California Real Estate Broker and holds series 22 and 63 licenses. He is formerly an associate at the largest Commercial Real Estate Brokerage firm in the country and has years of experience and hands-on training from some of the best in the business.

Shownotes:

Brett’s background

Dumb Debt, Risky Debt and Smart Debt

Capital Gains Tax Solutions

Return on Investment

capitalgainstaxsolutions.com/

**169: Wealth 2.0: Leverage Your Deductions!** Jul 28, 2019
At a recent investor conference in Tenafly, NJ, I spoke on the topic of what I call Wealth 2.0. This is my preferred paradigm for investing that can be simplified into the the following equation:

**Wealth=Leverage(Mass X Velocity)**

**Mass** is simply the amount of money that is actually deployed into investments. After all, it doesn’t matter what kind of return you get if you aren’t investing any money in the first place. You’ve got to deploy enough to move the needle. The good news is that mass, like all variables in this equation, can be manipulated by the savvy investor.

For example, paying attention to the tax implications of your investments can actually decrease your tax burden and free up more money to invest. Case in point, I have invested a significant sum of money into projects that we have presented through our **Investor Club** this year. I am estimating that, in addition to creating equity through my investments, I am *simultaneously* significantly reducing my tax burden for this year—up to 80 percent of all my invested capital should be tax deductible!

How is that possible you ask? Well, It’s because I am a real estate professional and can utilize bonus depreciation on all of my real estate investments (even those done passively in syndications). If you navigate the tax law thoughtfully, you will have more money to invest. It’s that simple.

Now let’s look at the next variable—**velocity**. People often talk about a certain cash on cash return when they think about investing. That’s useful, but I prefer to ask the question, “How long before I get my money back?”. You see, 10 percent cash on cash is great but that means that for the first ten years of my investment, I’m just getting my own money back.

I prefer investing in opportunities that get me ALL of my invested capital back within 5 years and yet still allow me to keep my equity in the asset. In that case, my cash on cash return is not five or ten percent—it’s infinite! Think about it. If you have all your initial invested capital back in your pocket and still have equity in a deal, its like recycling capital and using the same money in multiple deals. That certainly speeds up the wealth building process—another reason to call this variable velocity!

The last variable in our equation may also be one of the more underrated—**leverage**. Leverage is critical to building wealth. In fact, infinite returns as I have described above, are virtually impossible to attain without the skilled use of leverage. Most people familiar with real estate understand instinctually that leverage is important to making money in real estate. But when you do the math, the numbers can be staggering and explains why so many real estate investor have become so darn wealthy.

However, leverage is not just about borrowing money from the bank. Inherently, the word leverage simply implies the use of a tool that amplifies ones efforts. Certainly bank money fits that description but there are many other creative uses of leverage that often go underutilized.

For example, what if there was a way to leverage your charitable giving? In other words, what if you could support your cause by donating a certain amount of money that had the simultaneous benefit of amplifying the size of the deduction on your tax returns? Wouldn’t it be great if you could donate $10K but get the benefit of donating 50K on your returns? Believe it or not, there are ways to do things like that.

My guest on this week’s Wealth Formula Podcast is in the business of land conservation. It’s something that, in my opinion, is a very important cause that I would support even without the financial benefit. However, there happens to be some pretty significant *leveraged* benefits to this kind of giving so it’s even more appealing.

Suffice it to say, this is an interview that you simply cannot afford to miss!

Jim Sullivan is the President of Terra Optima LLC, a Florida based real estate and tax specialty firm that provides education, consulting and opportunities in tax efficient real estate. As President of Terra Optima, Jim intersects with Family Offices, Tax Advisers and the broader business and “Impact Investing” community relating to “all things real estate and tax efficient”.

Shownotes:

What are Conservation Easements?

Who does valuation for Conservation Easements?

Are Conservation Easements a loophole for the wealthy?

jsullivan@terraoptimus.com

**168: Multidimensional Investing with Tom Wheelwright!** Jul 21, 2019
Learning is an electrical function of the brain. When we first start learning something, our brains start developing connections to integrate that information. Over a period of time, those electrical connections become stronger and stronger giving the perception of something becoming second nature.

It isn’t until a basic function becomes second nature that you can then start adding layers. For example, a professional baseball player was, at one point, an infant who couldn’t walk. Eventually he went on to develop his athletic prowess to the point where he might even chew tobacco while hitting a hundred mile an hour baseball with a piece of wood. At that point, he doesn’t have to *think* about how to walk anymore.

You see, expertise in things requires depth of experience that allows for complex neural circuitry to form and to make certain, more basic skills, run on autopilot. At that point, you are able to absorb information in multiple dimensions—some conscious and some not. This next level in learning allows us to function at a higher level.

So how does this relate to investing? Well, becoming a sophisticated investor requires some of the same layering of information and development of neural circuitry to allow for a more comprehensive approach to personal finance.

I’ve talked before about how novice investors are often attracted to the “good from far but far from good” investments. You know—the kind with big front end cash on cash returns that then depreciate to zero in just a few years.

Seems obvious to avoid such things but cash on cash is a simple thing to cling on to for novice alternative investors after reading books like Kiyosaki’s Rich Dad Poor Dad. It represents the metaphorical “learning to walk”. Over time, the successful investor starts layering depth and complexity to his investing strategy. He might even start paying attention to the more nuanced lessons in the Kiyosaki books that are often overlooked at first glance.

I will admit whole heartedly that there was a time several years ago that I was just “learning to walk”. There is no shame in that. Over time, I just spent so much time thinking about this stuff that I got more sophisticated than most when it comes to thinking about money. That said, I’ve been around for a long enough time to know that five years from now I’ll be a hell of a lot smarter than I currently am!

Now, over the last several years, one of the most critical elements of investing that I have learned is to understand the importance of the interplay between deploying capital and taxes. In fact, I would say that taxes play a DOMINANT role in my investing decisions and, for that matter, my *life* decisions.

Let me give you an example of what I mean. Say I earn $100K that I can deploy however I wish. For better or for worse, the first thing that comes into my mind is the fact that a big chunk of that is going to get sliced off and sent to the government in the form of income taxes. That is, unless I do what the government wants me to do like invest in real estate.

You see, the tax code is largely a series of tax incentives. If you do what the government wants you to do, you will will be rewarded by paying less taxes. What does the government want you to do? It wants you to stimulate the economy through business activity and investments into things people need like a roof over their head.

If I want to keep as much of my earned money as possible, I personally invest it in real estate. With cost segregation analysis and bonus depreciation, my investments not only serve to build my wealth in the future, but also decrease the amount of money I have to give to the government today. That is one hell of an incentive to ignore!

Now compare that to investing your hard earned money into another opportunity that might be appealing but not so tax advantaged. For example, a lot of people in the alternative space really like debt funds that pay higher cash on cash returns than other investments. I get it—returns look great. But the way I see it, if I invest in real estate equity instead, not only do I get the benefits of tax sheltered income, but I also get to largely write off the invested capital itself! And don’t forget, investing in real estate also gives you the upside of appreciation.

Investing in debt has NONE of those advantages. I’m not saying don’t do it—just look at it like a multidimensional investor rather then a rookie investor seduced by big cash on cash returns. Think about your investments holistically.

Earlier, I mentioned that the tax code has not only influenced my investing decisions but actually some life decisions as well. You see, after I left medicine, I had to decide where to focus my time. I was already investing in real estate and enjoyed it so one of my options was to become a full time real estate professional.

A real estate professional, defined by the IRS, requires a minimum of 750 hours documented real estate activity per year with no other activity that you spend more time doing. If you meet those criteria, the tax benefits are HUGE. Specifically, all of those *passive* losses you get from investing in real estate become “activated” making them applicable to any other source of income that you or your spouse (if filing jointly), may earn in a given year. If you don’t understand what I just said, read this paragraph again. It’s huge and it was one of the major reasons that I decided that the best option for me was to become a full time real estate professional.

This designation is particularly good for people selling businesses looking for new careers. The sale of a business often comes with a significant liquidity event.

Say you were one of the lucky ones and sold your dental practice for $10 million. What if you then decided to focus the rest of the year on going full time into real estate investing and became designated as a real estate professional? Well, all of that money gained from the liquidity event could theoretically be invested into real estate and, with bonus depreciation applied to offset capital gains, you may not have to pay any taxes at all!

That’s not theory. That’s reality and it’s totally legal. I’ve seen it done over and over again. I just wish everyone with a big liquidity event knew that it was an option. Think of how much money you could save if you were in that situation!

That’s why I say that being a good investor requires a tax strategy. The emphasis should be not on what you make, but what you keep (after taxes). Like a business, you can’t focus on your top line and never think about your expenses. If you are like most people, taxes are your biggest expense. Run your personal finances like a business and a lot of things will become more clear.

Of course when I finished surgical training a decade ago, none of this was remotely on my radar. It wasn’t until a couple of years later after following Robert Kiyosaki that I discovered a book that would fundamentally reshape my thinking about taxes. The book, Tax Free Wealth, was written by Robert Kiyosaki’s CPA, Tom Wheelwright. Tom is a genius and has taught me a great deal over the past few years. Now, I’m happy to call him my CPA as well.

The more you listen to Tom, the wealthier you will become. So listening to my interview with him on this week’s Wealth Formula Podcast should be a no-brainer.

Tom Wheelwright is a CPA, CEO of WealthAbility (Tempe, Arizona) and Best-Selling Author of Tax-Free Wealth. Wheelwright is a leading wealth and tax expert, global speaker, and Entrepreneur Magazine Contributor. Tom is best known for making taxes fun, easy and understandable, and specializes in helping entrepreneurs and investors build wealth through practical and strategic ways that permanently reduce taxes.

Shownotes:

Buy, Borrow, and Die

Why do you need a tax advisor?

Tax strategies with the current tax law

The biggest issue with asset protection estate planning is that most attorneys don’t speak English.

wealthability.com

**167: Are You Ready for an Asset Protection Knife-Fight?** Jul 14, 2019
If you can’t explain it, you don’t understand it. Remember that the next time you look across the table at a financial advisor type and feel confused. Ask yourself if you could explain what you were just told to someone else with some level of confidence.

If not, start asking questions because the advisor will not expect you to! You see, this is a set-up—a financial ambush so to speak that high paid professionals get caught up in all the time.

Let’s say you are a hotshot surgeon coming out of residency and you just signed a contract that’s going to pay you $500K per year.

You know nothing about about investing, taxes, or asset protection and suddenly, you have a bunch of new “best friends” who want to *help* you invest that money and do your taxes.

The money manager starts talking about all these buckets and different kinds of risk and yield. He seems to know what he’s talking about but you don’t really get it.

Even though you don’t know how those different buckets produce the returns the way the guy said they would, you figure he knows what he’s talking about. After all, he manages money for all the other guys in the practice.

Instead of asking a lot of questions that might sound dumb, you decide to just to trust him and give him all your money. After all, like you, he is a “specialist”. Let him do his job!

Now, as a Wealth Formula Podcast listener this scenario may sound ridiculous to you, but I can guarantee it happens every year when surgical residents graduate and start making money.

Even surgeons with massive egos are fooled into thinking that personal finance is too complicated for them and should be handled by a *professional*. After all, we have all been brainwashed into believing that by Wall Street. They want you to be afraid. They want you to think that what they do is so complex that you would be down-right irresponsible to take things into your own hands.

It’s actually a brilliant marketing play if you think about it. The idea is to weaponize complexity to generate fear. The highly educated, highly paid professional falls for it all the time! Do me a favor, next time you are in a situation like this with a money manager, tax professional or asset protection attorney, start asking them all the questions you can think of even if they seem stupid. After all, if they can’t explain it, they either don’t understand it or they are simply trying to make you feel dumb.

None of this stuff is over your head. Furthermore, if you think you are too busy to learn about your own financial matters, you will pay a steep price that you won’t discover until the end of your career when you look at your bank accounts and start wondering why you don’t have more money. I see this all the time with doctors and other highly specialized professionals and its sad—people making hundreds of thousands of dollars per year for decades and winding up with less than a million bucks to retire!

I am sympathetic though. The fear of complexity is powerful. I have to admit that I have followed the lead blindly into some things as well. A few years ago, I signed up for a foreign asset protection trust because it seemed like a good idea—and for me it was.

The problem was that I didn’t really understand the strategy very well. But the guy who recommended it to me seemed like he knew what he was talking about and was very confident that it was the right thing for me.

And to be clear, he is a smart guy. But I always left meetings with him a little confused and frankly embarrassed to ask any more questions. I figured he knew what he was talking about and that he was taking care of me.

When it comes to asset protection, that’s pretty dangerous. After all, when push comes to shove, you have to know exactly what your situation is. There is no time to be confused in a knife fight!

For better or for worse, I was in some asset protection knife fights over the past year after a business failure. Everything turned out ok but I found significant flaws in the way I was set up. It’s never a good idea to stress test your protective mechanisms in real time but that’s what I did.

Since then, I have been on a mission to really understand asset protection at a higher level. I told my CPA Tom Wheelwright what I was trying to do and he recommended I speak with Doug Lodmell—my guest on this week’s Wealth Formula Podcast.

Doug is unique in that he is brilliant, practical and a great communicator. If you want to start understanding this stuff and protecting your assets in a practical manner, don’t miss this interview.

Born in Geneva, Switzerland, attorney Douglass S. Lodmell has excellent knowledge and the highest level of experience in estate planning, taxation and strategic asset protection for domestic and international clients. In addition to a Juris Doctorate from Cardozo School of Law, Douglass has a Bachelor of Science degree in finance as well as an advance law degree (LL.M.) in taxation from NYU School of Law. He has authored numerous articles for professional journals as well as a popular book about the explosion of lawsuits in America called The Lawsuit Lottery: The Hijacking of Justice in America. Doug’s extensive experience in asset protection make him a frequent guest speaker at medical, and professional conferences and seminars throughout the country, as well as teaching concepts of asset protection to other attorneys at continuing legal education seminars throughout the country.

Shownotes:

Doug’s background

What is Asset Protection?

Different levels of Asset Protection

Finding legitimate means of Equity Stripping

lodmell.com

(602) 230-2014

**166: Should You Invest in Assisted Living Facilities?** Jul 07, 2019
Let me tell you about another one of my failures. A few years ago, I was listening to a well known podcast and I heard about this concept of turning single family houses into elderly care facilities.

The idea sounded pretty compelling so I decided to go to the “course” in Phoenix. In fact, I went out there with another entrepreneur buddy of mine.

In short, we both got sold on the concept (and I mean sold). The next thing you know, we were dropping five figures on a coaching/mentorship program.

Have you ever bought something like this? I bet you have if you think about it. Good marketers know that people respond to fear and greed and this one had elements of both.

Now I am not saying that this program that I signed up for was worthless. I did learn a lot and I believe that had things gone another way, I could have had a successful small business on my hands.

However, a lot of things got in the way. First of all, I bought a house that was clearly zoned for such conversion, but it was clear that the neighbors were not going to have it.

But wait..if you are zoned properly, shouldn’t you be able to do whatever you want to do? Not really—that’s where the theoretical and the real world of local real estate politics collide.

In short, the neighbors were making me jump through all sorts of hoops that they knew would be time consuming and expensive. The proposed traffic feasibility study alone would have cost me tens of thousand of dollars.

In the end, I asked my business attorney if the neighbors could really stop me and he said, “no, but they can make you wish you had never started”.

Now understand that while all this was going on, I was making a lot of money doing things that were not nearly as hard. Had I known what kind of effort would go into this, I would have never started. So, I decided to just sell the house.

A couple of weeks after listing the house, my broker called me up and let me know that he had taken a potential buyer to the property and that a pipe had burst. There was water everywhere and he could already smell the mold.

Fortunately, I had insurance and it covered me for just about everything. We got permits and the contractor started to work. But things were going unusually slowly. A year later, the contractor had made very little progress other than to tear the thing apart.

It started getting ridiculous. There was all sort of excuses for delays that made absolutely no sense. Eventually, the contractor confessed that he had taken the money and bought a couple of other houses to flip. The problem was, he couldn’t sell the houses that he rehabbed!

Can you believe that? He then agreed to return the money to avoid litigation…until he spoke with an attorney. Then he denied ever saying he used up the funds to buy other houses. The next thing you know we were off to the legal races.

If you want to know how this thing ended ask me next time you see me. But suffice it to say, this did not end up the way I wanted it to. When all was said and done, I was down over $250K with nothing to show for it.

Now, I don’t blame my coach/mentor for this. The service provided was reasonable and had circumstances been different, I might have had a profitable little business.

But there was a valuable lesson there. No matter how you cut it, what I was embarking on was an extremely high risk endeavor. I was doing something that really had not been done before in the Chicago suburbs. It involved significant investment into real estate and there were an enormous number of moving parts—many of which were out of my control.

For a guy with some highly profitable businesses at the time, did it make sense for me to take this on? In retrospect the answer was clearly no. Even had things turned out ok, the reward simply was not high enough for the risk involved.

Understand that I am a serial entrepreneur. I have successfully started multiple businesses with seven and eight figure yearly revenues. But I have also failed on some. That’s why, when it comes to my entrepreneurial activity, I never accept investor money. I am willing to take a lot of risk on my own dime but I’m leaving you out!

So, losing money in that venture was not that big of a deal to me. I’ve lost a lot more than that with other efforts. But what bothered me about this one was that the upside was so limited. Why did I think it was worth it? Well, I think I had mistook a business start up for a real estate investment.

When you hear about 30 percent cash on cash projects, that sounds pretty good to a real estate investor but it’s not that big of a deal for a business start up. You should expect that kind of return from buying an established business. But for a start-up??? No. That’s enough.

For reference, my successful startups have had returns in the 400-500 percent range and have been incredibly scalable. That makes up for the big losers. The best case scenario for this start-up was 30 percent cash on cash, lack of scalability, and a ton of work and responsibility (it’s a big deal taking care of the elderly!)

Bottom line, I chalk this experience up as a mistake. Now, don’t get me wrong. I know there have been people doing this successfully but those who are doing it well are not treating this as a passive endeavor and, in my view, could be making a lot more money doing other things with the same level of effort.

That’s my opinion based on my experience. However, others have had other experiences and are doing quite well with this. I find that those most successful in this arena are those who really care about what they are doing and don’t see it through the lens of pure profit.

Loe Hornbuckle is one of those guys. If you want to explore senior living as something you want to get exposure to, you will want to listen to this week’s Wealth Formula Podcast. I didn’t hold back. I asked Loe hard questions and he did a very good job of answering them.

Loe is the founder and CEO of Sage Oak Assisted Living in Dallas, Texas.

Family-owned and operated, Sage Oak was founded to fill a need in personal home care for seniors. Our homes are located in some of the best residential neighborhoods in central Dallas,

allowing residents to feel like they are at home, especially when compared with some of the larger facilities, which to many residents can feel more like a hospital or an institution.

Shownotes:

Loe talks about how he got interested in Assisted Living

Assisted living facilities as a service business with a real estate component

Scalability of assisted living facilites

What is Boutique Assisted Living?

The pitfalls of single family homes converted to assisted living facilities

Loe’s future projects

thesageoak.com

loe@thesageoak.com

**165: Gray Hair, Peacocks and Unicornomics** Jun 30, 2019
We recently had a Wealth Formula Network call in which we talked about an offering some members were participating in that I didn’t care for as much. One thing to remember is that smart people can disagree about things without anyone necessarily being wrong. I pointed out some things I avoid when I invest and the topic seemed to garner a lot of interest. So, I decided to share some of the lessons I have learned over the years. After all, the best way to become a good investor is through age and experience.

The problem is that age and experience are hard to teach. When I did my first face lift, I thought I was good. But looking back after doing 500, I definitely was not. I had the basics down and got lucky with my results, but it was no where near mastery.

When you are a young Turk plowing ahead full of energy, you look at guys a few years older and wonder why they are so cautious until, one day, you learn for yourself—the hard way. When you make a mistake that *matters* it will stick for ever.

The good news is that while mistakes are critical to learning, they don’t always have to be your mistakes. But in order to learn from others mistakes, you have to be humble and receptive. So, let me give you a few investing pearls that have come along with my graying hair.

1) When it comes to investing, it’s not just about the numbers. It is also an over-simplication to say to “invest with people that you know, like and trust.” Of course I truly believe that is a requirement. The problem is that I know, like and trust a lot of people with whom I would never trust my money. Would you trust your grandmother to choose where to invest your life savings?

Look for people who you know, like and trust, then judge their competence by looking at what they have already achieved. A track record is important and really is the report card that you need to look at. Don’t be part of someone’s resume building exercise or someone’s multimillion dollar lesson if possible. If someone has a full time job as a software engineer and trying to get you to invest in their $20 million dollar real estate acquisition so they can work toward quitting their job, politely decline and say you *might* be interested in 5-10 years.

2) Avoid “good from far but far from good investments”. Every species has some kind of physical attribute that make it more likely to reproduce. Think of the peacock with colorful patterned plumage fanned out for display purposes to attract a mate. Investments have similar qualities that are irresistible to investors and deal sponsors know it. Cash-on-cash is probably one of the most attractive features to the novice investor because, on the surface, high cash on cash numbers can be pretty seductive. Everyone loves the idea of replacing their income with passive cash flow asap.

Let me ask you this—would you rather get 25 percent cash on cash or 7 percent cash on cash? 25 of course, right? Well, what if the 25 percent depreciated down to zero in 4 years while the 7 percent cash-on-cash investment increased in value by 100 percent?

All investment proformas must be considered holistically. As investors, we should be looking at the profit we make from our investments rather than being content with monthly checks that represent our own money being given back to us in small increments. I would suggest looking at investments in terms of annualized returns or internal rate of return instead. In the process of making this calculation, you will need to get an idea of how the investment will be exited. In some cases, you may discover that there is NO EXIT! No exit is not a good thing—tough to get a return of any kind on that.

3) Risk should be factored into your expected return as well. Many of the real estate deals we see in investor club project an annualized return of 18-20 percent—approximately doubling your money every 5 years. That’s pretty good right? I think it is. After all, we typically deal with tried and true multifamily real estate. If an apartment building has been around since 1980 in a nice market, that’s essentially a highly stable business that’s been around for 40 years.

The risk of this business is significantly less than a start-up business that lives only in the imagination of the entrepreneur. Real estate investors really get messed up on this one. Established real estate is pretty low risk in competent hands. That’s why we are happy getting 8-10 percent cash on cash or 18-20 percent IRR. Those are great numbers for real estate. But the level of risk for a small start-up is significantly higher.

If you buy a small business from a mom and pop, you are going to pay 2-3X profit. That means that you should expect 30-50 percent cash on cash on that business. Why so much higher than real estate? Risk! Now, I see people advertising investments in start-ups with returns projected at 8-10 percent. Does that make sense to you? Maybe it does to you, but not to me.

Higher risk should mean higher reward. Make sure you don’t compare your rock solid multifamily real estate to a simple sparkle in an entrepreneur’s eye. There may be value in the start-up, but make sure your return prices in the risk you are taking.

4) Boring is good. The vast majority of my money goes to real estate or Wealth Formula Banking. Why?…because they are relatively boring. I like multifamily real estate because people have to live somewhere. I like some other classes of real estate too but I really like sticking to “roof over your head” kind of real estate. I like Wealth Formula Banking because of its track record dating back to before the civil war and the ability to use mass, velocity and leverage to amplify my real estate investments by investing my money in two places at the same time.

I’m fortunate in that I make enough money to afford investing in some higher risk stuff too. I have my asymmetric risk allocation as well—up to 10 percent in any given year. I call this my Maserati money. This money is what I use to take some big risks that could either go to zero or 10X. For me, it’s cryptocurrency. This kind of investing is really fun but don’t do it if you don’t have the money to lose. I still drive my 2007 Toyota instead of a Maserati or Ferrari because those types of things are guaranteed to lose me money the second I drive them off the lot (if they are new). I take that money and use it to invest in high risk, high reward stuff.

The bottom line is that unless you know what you are doing and have some money to lose, don’t chase shiny objects. Some things sound good but, when you get into the weeds, they are nothing but fool’s gold. Boring is GOOD!

5) It’s not what you make but what you keep. Going back to real estate, I like the fact that real estate tends to appreciate over time rather then depreciate to nothing (please don’t invest in things that depreciate to nothing!) Nevertheless, in the eyes of the IRS, real estate does depreciate and we often leverage it significantly with mortgage interest that is also deductible as a business expense. Therefore, if you get 8-10 percent cash on cash, you typically don’t pay any taxes on it. In fact, depreciation might exceed your income by so much that you can use those losses against other passive income (we see this with bonus depreciation all the time!)

Conversely, if you invest in debt and get 10 percent cash on cash but have to pay ordinary income taxes on it, how much are you actually keeping? Is the risk and lack of appreciation of fixed, high risk debt commensurate with the return you are getting after taxes? It may not be when you crunch the numbers.

Anyway, I could keep going—in Wealth Formula Network we recently talked about the classic great deal that is highly dependent on one guy—that’s another recipe for disaster. There are lots of patterns of bad investments that you recognize after you’ve been around the block a few times—sort of like PTSD.

In fact, I would go as far as to say that the key to becoming a good investor is to quickly identify the bad ones so you can spend time diving deeper on the rest. The good news is that most deals out there are not that great so you should be able to spend an increasing amount of time on good ones as you get better weeding the bad ones out quickly.

Anyway, those are just a few pearls. I could go on for a lot longer but I’m sure what I have presented is more than enough for one sitting. That said, when you are ready for more investment advice, make sure to listen to this week’s Wealth Formula Podcast that is focused on investing in those high risk, high reward start-up businesses. Damion Lupo literally wrote a book on this which he calls Unicornomics and you are going to hear all about it on this week’s episode.

Damion Lupo

American Sensei. Yokido Founder. 5th Degree Black Belt.

Financial Mentor to Transformation Nation.

Best selling author in personal finance. Rewriting the rules and plan for retirement.

Shownotes:

What is a unicorn and what was the inspiration behind the book Unicornomics

Centaurs versus leeches

The China 1% idiot statement

How to find “Unicorns”

Damion talks about eQRP

QRPbook.com

**163: When Bad Debt Happens to Good People with Jorge Newbery** Jun 16, 2019
Debt is like a lethal weapon. It can be used for good and it can be used for greed. It can be used to create wealth and it can be used to destroy it.

In short, debt is nothing more than a tool. The problem is that a fool with a tool is still a fool. Debt gets a bad name because of this.

But the reality is that, in skilled hands, debt can be used to create unlimited wealth. In Investor Club, we use debt to create the extraordinary strategy of infinite returns. We also use it in Wealth Formula Banking and Velocity Plus. Debt is the weapon of the wealthy.

Unfortunately, it is also the opioid of the poor who often use it to pay their bills. In situations like that, debt can be downright deadly.

That said, like a loaded gun with good intentions, sometimes debt can explode at unexpected times and create unexpected casualties. That’s why it is always important to respect it and fear it… just a little bit—like driving a motorcycle. If you don’t, it will take you out in a flash.

Many smart entrepreneurs have experienced this first hand and gone through the painful process of dealing with the repercussion of good debt gone bad.

Jorge Newbery is one of those guys. He is a serial entrepreneur and, using debt, was worth millions of dollars as a real estate entrepreneur. Then it suddenly went south—literally an act of nature took down his empire.

A lesser entrepreneur would have been wiped out for good. Not Jorge. Not only did he overcome the debt, but he built an entire career based on it. And he’s got fantastic insight on how to deal with it now.

Debt is a big part of getting rich. Learning about it is a key to becoming wealthy. That’s why you should listen to this interview with Jorge Newbery now.

Jorge P. Newbery Is On A Mission To Help Americans Crushed By Unaffordable Debts.

He is Founder and CEO of Debt Cleanse Group Legal Services, a nationwide legal plan to help consumers and small businesses get out of debt without filing bankruptcy. He is also Chairman of American Homeowner Preservation LLC and AHP Servicing LLC, which crowdfund the purchase of nonperforming mortgages from banks at big discounts, then share the discounts with struggling homeowners. He is also a non-attorney Partner in Activist Legal LLP, a law firm in Washington, D.C.

A 2004 natural disaster triggered the financial collapse of Newbery’s former business, leaving him with $26 million in debts he could not pay. Newbery rebuilt himself through AHP, sharing what he learned from his challenges to help families at risk of foreclosure stay in their homes. In 2018, he founded Debt Cleanse Group Legal Services to assist consumers and small business owners settle all types of debts at big discounts – and not pay some at all, He is also a Board Member of the Group Legal Services Association.

He authored Burn Zones: Playing Life’s Bad Hands; Debt Cleanse: How To Settle Your Unaffordable Debts For Pennies On The Dollar (And Not Pay Some At All); and Stories of the Indebted.

Shownotes:

How Jorge got into the Debt Industry

Creditor errors that led to getting a 5.6 million dollar debt extinguished

What is bankruptcy?

Why filing bankruptcy may not be the best solution for a failing business

Jorge talks about “Good Debt”

Debt Cleanse: How To Settle Your Unaffordable Debts For Pennies On The Dollar (And Not Pay Some At All)

debtcleanse.com

**160: Bull Markets in the Least Ugly Economy in the World!** May 26, 2019
I am a lousy trader. I’ve said it before and I fully recognize this fact. That’s why, I try very hard to stay focussed on investing rather than trading. Nevertheless, I still get trapped in behaviors that I invariably regret.

For example, you may know that I am a believer in bitcoin. I truly believe this will be one of the best investments of my lifetime over the course of the next few years. That’s why when it dropped to $3100, I should’ve bought some more. But, I didn’t because I got greedy. I figured it might drop even more so I waited.

The end result was that by the time I bought more, it had actually doubled in price. Now, over the long run I still think that’s not a bad price at all. Especially considering I believe that we will see $100,000 bitcoin within the next couple of years. However, I was kicking myself because I was timing something instead of just recognizing that it was a good time to buy.

In the heat of the moment, it’s hard to remember Warren Buffett’s wisdom. Here’s a good quote for you. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” The point is recognize when you have a good opportunity and can buy a quality asset at a fair price and just do it!

Now some of you may disagree with me that bitcoin is a “quality“ asset. We can agree to disagree. However, let’s focus on that principal with another example.

One of my friends is a famous home designer and is particularly well known amongst Hollywood celebrities. He told me about a house he once put on sale in Los Angeles. At the time, it was the most expensive house per square foot in all of Los Angeles.

He had a very motivated buyer who happened to be the daughter of a well-known tech billionaire. My friend said that dad had three questions before he bought the house for his daughter. 1) Was the house in a desirable area? 2) Did the house have a great views? 3) Was the house built well?

The broker assured him that all three answers were a resounding yes. The billionaire went on and bought that house for his daughter at full price. And, that house which was the most expensive house per square foot in LA at the time (in 2007), sold for a significant profit only 10 years later even after the housing correction.

The moral of the story?—most of the time when we think we are saving money, we really aren’t. It may be more expensive to buy a higher quality asset or an asset that is in a higher quality area. However, over the long run, you will come out ahead.

Think of it this way. Ikea furniture is not going to appreciate. So, if you can afford it, buy something that might appreciate so that, someday, you have something of greater value.

This is the kind of perspective you get over time. That’s why it’s a good idea to listen to people of been around for a while. Tyler Jenks is one of those guys. He’s been in the financial industry since 1971. That’s before I was even born!

Tyler can speak on a broad base of financial topics with perspective that is both unusual and multidimensional. From the S&P 500 to gold and even to bitcoin, Tyler is a wealth of knowledge as you will see on this week’s Wealth Formula Podcast.

Tyler Jenks has spent his entire professional career studying financial markets and investments. Mr. Jenks is currently President and Chief Investment Officer of Lucid Investment Strategies, previously a division of Dumont and Blake. Mr. Jenks served for ten years as President and Chief Investment Officer of Amivest Capital Management/NFB Asset Builder, North Fork Bank’s investment advisory division. Mr. Jenks served as Senior Portfolio Manager upon joining Amivest Capital Management in 1991, and was named Amivest’s Chief Investment Officer in 1998 when North Fork Bank acquired the firm. After graduating with a degree in International Relations from Principia College in 1971, Mr. Jenks spent four years as an officer in the United States Coast Guard. While stationed in Hawaii, Mr. Jenks received his M.B.A. from the University of Hawaii. Immediately following his military service, Mr. Jenks joined a major Wall Street firm and has spent the last 42 years as a student of markets and investments. During his career, Tyler has had the opportunity to work with some of the most accomplished chief investment officers, portfolio managers, fundamental and technical analysts, market timers, theoreticians and academicians in the business.

Mr. Jenks’ broad overview of world economics and investment trends is not simply theoretical. He has managed hundreds of millions of dollars for institutions, charities, pension funds and individuals and has done so very effectively for over 42 years. Mr. Jenks loves to share his experience and investment acumen through classes, seminars and the financial media. He expresses challenging and complex concepts in a remarkably simple and down-to-earth style.

Before joining Amivest Capital Management in 1991, Mr. Jenks founded Boston-based Kanon Bloch Carre & Co., Inc. and was Director of Research and Chairman of the investment committee from 1985 to 1991, where he was responsible for the design, development and implementation of mutual fund evaluation techniques. From 1975 to 1986, Mr. Jenks was extensively involved in portfolio management, investment research and trading system design and assessment at Dean Witter, Loeb Rhodes Hornblower and Shearson/American Express.

Shownotes:

General state of the markets

The Debt Problem

The case for a ten million dollar Bitcoin

Bitcoin in the next decade

lucidinvestmentstrategies.com

159: ASK BUCK May 19, 2019

You might remember me talking about a part of the brain called the prefrontal cortex (remember I spent some time in the brain surgery business). The prefrontal cortex is the CEO of the brain. It’s the part that’s really good about making good decisions.

For example, if you see a teenager doing something very dangerous and potentially lethal, it may be due to a poorly developed prefrontal cortex. And, if you think to yourself, “I would have done the same thing when I was 16. What was I thinking?”, the answer is likely that your prefrontal cortex has since become more mature.

In fact, the prefrontal cortex seems to continue maturing until your late 30s and early 40s. The scientist in me wonders why that might be and I have come up with an evolutionary theory. You see, when you are younger, you need to be fit and take some chances to survive. A young caveman would need to hunt and not be afraid to chase down a wild boar that could, in fact, be a danger to him. Wisdom, on the other hand, may lead him to back down for fear of injury and to starve to death instead.

But, physical prowess begins to decline for humans beginning at around age 30. Just look at NFL running backs—seems to be the magic number. In evolutionary terms, by the time you are in your mid-30s, you are pretty much useless. You’ve reproduced and you are not as fast as the twenty year olds. The rest of the tribe is not going to find much value in you. You are simply a waste of resources. That is, unless you have something else you can offer the tribe that younger people can not offer like say…wisdom.

Recall that living well into your seventh century and beyond is a relatively modern phenomenon. Even in the United States, someone born in the 1880s might expect to live to 40. That was old back then.

So, perhaps the maturing of the prefrontal cortex in the third and forth decades of life coincides with the slowing of the rest of the body and provides a reason for the young hunters in the pack to keep you around instead of pushing you down a river in a canoe with your arms wrapped behind your back.

Anyway, it’s just my theory. But I must say that my prefrontal cortex really took off since I hit my late 30s and I feel like I am becoming smarter every day—even if my body seems to be headed the other way. It’s strange to think of myself a decade ago. I was a completely different person and definitely not as smart as I am now.

How I would have loved to ask “Buck Today” a few questions back then—even though I was probably too stubborn and dumb to listen anyway. It would have been nice to have me around.

Speaking of “Ask Buck”, that’s the show for this week on Wealth Formula Podcast. Hopefully you get something out of it—at least enough to keep me in the tribe instead of sending me down that river.

**157: Harvest Returns** May 05, 2019
Back in 2014, two of my medical businesses were KILLING it. I was making money hand over fist. Unfortunately, however, I made a mistake that many entrepreneurs make. Instead of taking money off the table and putting most of it into stable assets, I decided to dump the majority of it back into the business to grow even bigger.

In fact, I went on a national campaign opening offices across the country all on my own dime. I figured if I could crush it in Chicago then it would be a cinch for me to do the same in middle-markets across the country. I was fueled by people around me telling me that it was the right thing to do which emboldened me even more.

Unfortunately, I was wrong. As good as I am as an entrepreneur seeing opportunities at a high level, I didn’t know what *I didn’t know* about being a multi-state operator. I didn’t have a sense for the staff I would need, the time it would take to turn profitable, or the marketing capital I would need to put on the line for a successful campaign. I *learned* a lot from that failed national campaign and *lost* a lot of money.

In hindsight, the smart thing for me to do back then was to milk these high performance businesses for all the profit and buy as much real estate as I could. Had I done that, I would have been millions of dollars ahead of where I am today.

You see, there were lots of opportunities in real estate in 2014 that were ripe for the taking. Luckily my friend Rick, who is a mortgage broker in Chicago, sent me a couple of apartment buildings that he thought I should buy and, fortunately, I took his advice.

While I lost millions of dollars in that failed national expansion of 2014-2015, those buildings I bought ended up being a gold mine. In 2018, I sold them for 500% and 600% returns. It was a good chunk of money. It was still not even close to the losses I incurred on the failed business venture, but it showed me the power of staying disciplined and not getting greedy like I did.

At the time, buying those buildings didn’t seem particularly exciting. I knew that real estate is where I wanted to invest, but it was a lot more fun *making* money rather than *investing* it. Now I understand the power of investing and I also understand the power of boring.

What do I mean, *boring*? I mean that when you find something that works or an operator that you like, you don’t have to keep playing the field. There is nothing sexy about multifamily real estate or self storage facilities, but they make for great investments. If you are a passive investor that has found a group or two that you like, you don’t have to go find another group to “diversify”. I can tell you from experience as an investor, boring works.

On the other hand, there is no reason not to take a little money to play with on high risk high reward endeavors. If you want to grow your business, do it. But don’t put *every penny* you have into it and create a single point failure scenario for yourself.

As you might know, my hobby these days is cryptocurrency. Of course that’s where I use money that I would otherwise blow on a Maserati or vintage sports car. Maybe I’ll get lucky and 100X on my portfolio…you never know. However, most of my money is still going into real estate with the same old operators.

Speaking of topics that might not seem sexy, this week’s podcast is an interview I did with the founder of Harvest Returns. Investing in agriculture may not sound exciting, but people do need to eat and, as far as I can tell, that’s not going to change anytime soon. That alone should get you to listen to this week’s Wealth Formula Podcast.

As a career naval officer, **Chris Rawley** traveled the world. Over the course of visiting dozens of war-torn and poverty stricken countries, he began to appreciate the importance of farming to every single person on earth. As a professional investor, he decided to invest in a farm, but discovered that these types of investments were inaccessible to the average person. He created Harvest Returns in 2016 to democratize investments in agriculture.

Rawley has held corporate management roles in Jones Lang LaSalle, Electronic Data Systems, L-3 Communications, and served as a defense consultant at Special Operations Command headquarters with Blackbird Technologies. He has invested in real estate and income-producing agriculture for nearly two decades. Chris has been an angel investor in early stage agriculture and food companies, including the Indian agriculture FINTECH company Jai Kisan. He serves on the advisory board of the AGTECH start-up AgroFides.

As a Captain in the United States Navy Reserve, Rawley is Chief of Staff for the Naval Reserve Surface Forces, helping to oversee 3,800 sailors supporting fleet units around the world. During his 26 year military career, Rawley has filled a variety of leadership positions in naval, expeditionary, and joint special operations units afloat and ashore. He has deployed to Afghanistan, Iraq, throughout Africa, the Middle East, and Western Pacific. Rawley has a degree from Texas A&M University, earned an MBA at George Washington University, and is a graduate of the U.S. Naval War College.

Shownotes:

Chris Rawley’s background

Agriculture and Crowdfunding

Operators for Harvest Returns

How Harvest Returns mitigates overseas risks

The Harvest Returns platform

Expected yields

Why Agriculture?

HarvestReturns.com

**156: Centimillionaire Secrets with Richard Wilson** Apr 28, 2019
Lately, I’ve been getting a lot of questions from investors on how to choose investments—particularly private placements that are readily available to accredited investors.

First, let me be clear that there is no magic solution to getting all of your investment picks right. In fact, if you invest long enough, something will go wrong. Next, nothing I say should be construed as investment advice. All I can do is to share my experience.

Experience is the way I have learned the most. I started looking into private placements about 7-8 years ago. My primary focus was something I felt like I knew a little bit about—real estate. But from there I had no roadmap to follow.

Where do you start when you are new at this stuff? Well, unfortunately I started with google and ended up finding a guy who is a bit of a charlatan in the space. I spoke to him and he suggested that maybe I join his team given my real estate experience. That sounded like a great idea. Essentially, I would get to participate in the limited partner side and the general partner side and leverage that part as well. And, I reasoned, I would learn something about being a fund manager in the process. So, I signed up.

Every week there was a team call and this guy would lead it. You see, I was not the only one he thought was specialand worth bringing on to his exclusive team. There were a lot of us *special* people. We came from different backgrounds but we all had one thing in common—we all had a circle of friends/community that had money. In my case, I was tagged as a guy who could bring money in for doctors.

Ok. So, that in and of itself is not a bad thing. In fact, if you can bring people to great opportunities and get some additional benefit for yourself, that’s great. You are solving a problem and helping others in the process. Now…here was the unfavorable part of this fund.

On these team meetings it was very clear that this self proclaimed “hedge fund manager” had very little interest in making investors money at all. Every conversation was about the fees we could charge (which he kept for himself) and the need for us partners to bring in more money. He urged me countless times to put together a group of doctors for him to speak with and even to get my father involved.

Luckily, I didn’t. It was pretty clear to me that this guy was a shyster and that I should distance myself from him as soon as possible. In the end, the money I invested was lost. For the last 6-7 years I have been receiving a K1 with no income. Meanwhile, I know the guy made a ton of money up front and doesn’t really care about losing investor money in the least.

So, what mistake did I make here? Well, I looked him up on google and he was a guy who made the podcast rounds and even spoke at events. He was a great salesman. I mistook that for someone who was a good fiduciary for my money. You think that is an uncommon mistake? Think again.

While a number of these individuals that are prominent on social media and on the podcasting circle are not crooked, they have not really proven anything to you other than that they are good at getting your attention.

So, if not google then where do you start? Well, in this age of the internet and social media, I actually rely on something a lot more mundane—positive feedback from previous investors who I know like and trust.

The real estate operator that I work with the most did not find me nor did I find them on the internet. I found them through people in our investor club that told me about their experience and the kinds of returns they were seeing. That’s what got me initially interested.

Next, I did some good old fashioned reconnaissance. I talked to several different people on their team, tracked the ongoing sentiment of known investors of theirs, and made a trip out to walk properties with them and meet them in person. Finally, I got a *stellar* reference from someone within the same field with tremendous integrity. With that kind of social due diligence, I felt very comfortable moving forward and looking at the numbers and track record closely. Notice how the numbers came at the end and not the beginning.

Anyone can make an investment look good on paper. In fact, I can honestly say that the glossier and fancier the offering memorandum, the less I trust it. I want to know the people and know the numbers…in that order.

Of course not everyone has the time to do vetting like that and that’s why a group like our accredited investor club provides a useful team approach to utilize collective wisdom. At the end of the day, it’s not all that easy to find good operators. That’s why I don’t work with more than a handful of them. After all, the wealthiest people in the world get there through specialization and focus, not by chasing the next shiny object. Just look at Warren Buffet.

My guest on this week’s Wealth Formula Podcast today can attest to what I’m saying. He’s been around some of the wealthiest Americans in the country and has learned the secret sauce behind their success and the way they think. His name is Richard Wilson and he is the founder of Family Office Club. If you want to learn to think like the rich, you are not going to want to miss this show!

Richard C. Wilson helps $100M+ net worth families create and manage their single family offices and currently manages 14 clients including mandates with three billionaire families and as the CEO of a $500M+ single family office and Head of Direct Investments for another with $200M+ in assets. The Wilson Holding Company is also the exclusive wine importer and a wine brand representative for Hofkellerei des Fursten Von Liechtenstein, the 600 year old vineyard owned by the princely family of Liechtenstein.

Richard is author of the #1 bestselling book in the family office industry, The Single Family Office: Creating, Operating, and Managing the Investments of a Single Family Office and a book called How to Start a Family Office: Blueprints for Setting Up Your Single Family Office. Richard has his undergraduate degree from Oregon State University, his M.B.A. from University of Portland, and has studied master’s level psychology through Harvard’s ALM program while previously residing in Boston. Richard currently resides 10 minutes from downtown Miami on the island of Key Biscayne, Florida with his wife and three daughters.

Shownotes:

The most common sources of the wealth

The Centimillionaire’s mindset

The two types of family offices

Why do you need a Family Office?

How Centimillionaires invest their money

Family Office Podcast

familyoffices.com

capitalraising.com

Centimillionaires.com

**155: TribeVesting** Apr 21, 2019
When I first described by “work” to my CPA, Tom Wheelwright, he said, “So you are an entrepreneur who just happens to be a surgeon”. I hadn’t thought about it that way, but I guess that’s what I am.

Now listen, I don’t take the label “entrepreneur” necessarily as a complement. It’s more of an affliction than anything else. If you are an entrepreneur, you know what I am talking about. We can be a real pain in the ass for our significant others with all of our bright ideas and, often, our miserable failures. I often wish I had a personality that allowed me to simply be content doing the same thing for twenty years as a high paid employee and just enjoy my life. But…it’s just not in my DNA.

What is an an entrepreneur anyway? Of course we tend to think of entrepreneurs as people who start businesses, and by definition, that’s true. But more than that, however, entrepreneurship is the love (maybe even the addiction) to solving inefficiencies or problems. If you can find a problem that is not being adequately addressed, you have a business opportunity. And for us entrepreneurs, discovering that opportunity is a rush.

That said, everyone has a million dollar idea but only entrepreneurs are the ones foolish enough to act on it. To be clear, my entrepreneurial life has little to do with what I talk about on Wealth Formula Podcast. Wealth Formula is about investing the money you earn. You may earn your money by working a high paid job like a doctor or lawyer. I make mine by owning businesses. My businesses buy my real estate (I heard Robert Kiyosaki say that once).

Wealth Formula has, however, turned into a business and the problem it addresses is the lack of financial education people have along with the minimal exposure to investments outside of the Wall Street paradigm. Admittedly I did not start my podcast with any idea that it would turn into a business, but because I was addressing a problem many people have, it became one.

When it comes to investing our money, there are also a lot of inefficiencies in the system and problems that need to be solved. For example, how do you invest in 10 real estate opportunities through private placements when you have $100K per year to invest and each deal has a $50K minimum.

That’s the problem that TribeVest takes on head first and I think the concept is simple but brilliant. If you are an active investor and are trying to figure out how to get exposure to more investments with finite resources, you are going to want to listen to this week’s episode of Wealth Formula Podcast.

TribeVest was born around a kitchen table with a group of brothers who dreamed of owning a vacation home. Travis, one of the brothers, wanted to offer a platform that gave roadmaps for other tribes to achieve their dream investment, just like him and his brothers. He experienced first hand the power of an investment tribe.

Shownotes:

The origins of TribeVest

How does TribeVest work?

The 29-point tribal line survey

TribeVest Founders Club

https://tribevest.com

Travis@TribeVest.com

**154: The Separation of Money from State** Apr 14, 2019
It’s funny how long lasting paradigms perpetuate without question for centuries without being questioned.

It used to be in most places, specific religions were mandated by the government to its people and heretics were persecuted. Of course that still exists in many parts of the world but the point is that a large part of the world does *not* see that as simply status quo anymore.

If you live in the United States, for example, you would likely feel very uncomfortable with the idea that government chose your place of worship, what you ate or drank, and what you wore. Why is that?

The answer to that, again, is that we tend to let outdated paradigms perpetuate without questioning them. They become part of conventional collective reality that few even think about questioning. Then, one day there is an awakening. The separation of church and state was one of those awakenings that has occurred gradually over time.

Similarly, while this may sound like a bit of a leap, I believe that bitcoin represents the first modern step in separating *money* from state. I have been watching and studying this space closely and I have come to the conclusion that bitcoin is real and it’s not going anywhere.

And when you look around and see the infrastructure that is being built around bitcoin at the institutional level, that belief is no longer outlandish. A lot of *smart money* believes it’s here for the long term as well. I’m talking about university endowments and even some pension plans. Bitcoin is not a fad. It’s a movement that is unstoppable.

It doesn’t matter what the price of bitcoin is today. Its value is in what it’s going to do to the world tomorrow and, in that sense, is grossly undervalued. In my opinion, you will regret it if you don’t take time to understand bitcoin and its implications now.

For that reason, I have invited a former Wall Street guy turned bitcoin purist for an interview on Wealth Formula Podcast today. His name is Tone Vays and you are going to want to listen to this week’s show so you can start the process of learning what will, in our lifetimes, become a new reality in our economy.

**Tone Vays**

Tone has worked on Wall
Street for almost 10 years starting as a Risk Analyst at Bear Stearns and later
becoming a VP at JP Morgan Chase in the aftermath of the 2008 financial crisis.
His expertise is in Economic Trends, Trading and Risk Analysis. Ever since
getting involved in the Crypto Currency ecosystem in early 2013, he has been
very active in spreading the relevance and importance of this technology as it
helps promote economic freedom. Tone has been featured in
several Documentaries like Magic Money & Bitcoin – Beyond the
Bubble. Tone is now an independent
content creator at ToneVays.com and on his YouTube
Channel focused
on sound economics & finance. Tone holds a Masters Degree
in Financial Engineering from Florida State University along with Bachelor
Degrees in Mathematics and Geology.

Show Notes:

TONE’S BACKGROUND IN FINDING OUT ABOUT BITCOIN

WHAT MADE BITCOIN SO UNIQUE

IS BITCOIN MONEY OR A STORE OF VALUE

IN WHAT MARKETS SHOULD THE BLOCK CHAIN TECHNOLOGY BE USED

WHAT IS BITCOINS “BOTTOM”

TONE’S PREDICTION FOR BITCOIN

WHEN SHOULD YOU BUY BITCOIN

TONEVAYS.COM

https://www.youtube.com/channel/UCbiWJYRg8luWHnmNkJRZEnw

**151: How to 1031 into a PASSIVE Asset** Mar 24, 2019
You may know that by the end of last tax year, I sold most of the real estate that I held by myself—as owner and operator?

Why? Well, first of all, I realized that to do real estate right, it really is not ever TRULY passive unless you have a full time operator doing all the work. The other thing that I realized is that for a busy person, finding the right operator with whom to invest passively is often MORE profitable than managing your own property.

A good example of that is Western Wealth Capital—a group that many of you who are part of Investor Club know well. Cofounder and CEO Janet LePage was on Wealth Formula Podcast a few weeks ago and explained the operation that has produced investors annualized returns exceeding 30 percent on average.

Let me tell you from being an owner operator of apartment buildings—it ain’t easy doing that by yourself. That’s why I have really focussed on a team approach to my investing and I know a number of you have made that decision as well. After all, you may think that you love real estate when, in reality, you love all the benefits of owning real estate like excellent returns and unbeatable tax benefits. Participating in limited partnerships can give you all the same benefits without the headaches.

Now, last year I sold a few buildings and ended up with seven figures of capital gains with which to deal. I had to figure out if there was a way around paying the tax man. In my case, for better or worse, a failing business in Chicago provided some significant losses so I didn’t get hammered as badly as I thought I would. But, as a general rule, I would not recommend that as a way to minimize your tax burden. I would have rather paid the tax!

So, if I didn’t have business losses to offset capital gains, what would my options have been? Before I tell you that, let me be clear that I am not a CPA so this is not official tax advice. However, I do happen to have a brilliant CPA so most of you know where I get this stuff.

Anyway, one of my options would have been to invest as much of those capital gains into syndications using bonus depreciation as possible. That would have theoretically knocked out well over half the gains right there and actually allowed me to create equity in the process (let’s get Tom Wheelwright on the show to explain that one). That’s the only option I honestly knew about last year and probably the one I would still use at this point in my investing life.

In recent months, however, I started hearing about another option that I found intriguing called a Delaware Statutory Trust. I had no idea that this was an option for me last year and I’m still not sure I would have used it, but the idea is pretty compelling.

You see, there are options to doing 1031 exchanges with property that you don’t have to manage yourself—and I’m not just talking about a triple net Walgreens which we usually think of in this scenario.

This option that I just became aware of is called a Delaware Statutory Trust. It’s similar to a syndication and limited to accredited investors. However, it is also a very intriguing option for those of you looking to get out of the real estate operating mode who want to avoid taxes and depreciation recapture. I love it when I learn about new things and I can share them with you on this show. That’s exactly what I will be doing on this week’s Wealth Formula Podcast with my guest Leslie Pappas of Archer.

**Founder Leslie Pappas**

Leslie Pappas acts as Due Diligence Officer for Archer and performs site visits of our offerings. Leslie personally visits and inspects almost every offering prior to presenting them to her investors. Our investors feel more security in knowing that Leslie has seen the properties in which they invest. This is a distinctive factor in choosing to work with Archer over other firms that do not perform this additional work on behalf of their clients.

Leslie
has been cited on CNN, ABC, CBS, NBC, FOX and The Wall Street Journal regarding
her work in Delaware Statutory Trust (DST) real estate investments. Across her
33 years of experience in investments and financial services, she has
participated in over $2.5B in real estate transactions. Leslie is a Real Estate
Broker in several states, and holds the Series 7, 22, 39, 63, 65 and 99
Securities Registrations. She is a Certified Commercial Investment Member, a
credential that only 10,000 brokers worldwide have achieved. Leslie is also a
LEED Accredited Professional and can manage the evaluation, development and
redevelopment of projects hoping to achieve LEED certification through the
USGBC. Leslie has an MBA from New York University ’82 and a BA from Vassar
College ’80. Leslie enjoys her three miniature wirehaired dachshunds, Scout,
Lizzie and Jack, and boating.

Shownotes

Leslie’s venture into real estate

HOW 1031 EXCHANGES

DECISION MAKER OF PROPERTY

TYPES OF PROPERTIES LOOKED FOR

LONGEVITY OF BUYING SHARES

PERFORMANCE RECORD

WHAT IS LESLIE’S ROLE IN ARCHER

ARCHERINVESTORS.COM

**Cashing In Tax Free**: The Ultimate Guide To A Tax Free Retirement Using 1031 Exchange and DSTs

150: How to Invest in Pain Mar 17, 2019

Remember when you were a kid and you would go to the doctor? Your parents revered your doctor. The held him in high esteem. They trusted him.

They would never say things like, “He’s just doing that test so he can make some extra money” or “He’s getting kickbacks from the drug company”. These are the types of things I regularly hear when I’m in the Sauna at the local YMCA.

Doctors and science are becoming decreasingly popular these days and it’s from both political extremes. There are those on the right who deny climate change. You might be one of them. But…mainstream science disagrees with you. Similarly, you might be an anti-vaccination person most frequently observed on the left in places like Marin County. But…again, mainstream science disagrees with you.

In fact, it’s not just disagreement. These days, it seems like doctors and scientists often are the object of disdain from all over the place.

A few months back, I was at a mastermind event for entrepreneurs and the mastermind leader in the room asked how many “functional doctors” we had in the room. I honestly did not know what he meant so I said, “Well, I’m a real doctor. Does that count?”

You see there were literally twenty people in that room practicing some kind of alternative medicine without any degree at all. So, I just asked if being an MD actually counted as a “functional doctor”.

I got hissed at from a lot of people and told I was killing people instead of helping them by one person. I finally got off the hook when I announced that I hadn’t practiced medicine in a couple of years and, as far as I could remember, never killed anyone.

Anyway, it’s not a good time to be “real doctor” these days. We are losing respect and we are losing reimbursement. For those of you who are sticking it out—fight for yourselves my friends.

Now I should say that, while I am a “real doctor” or allopathic physician as we like to call ourselves, I don’t disregard alternative therapies at all. In my view, if it doesn’t hurt then give it a try.

We don’t always know why things work until later. Aspirin has been used for well over 100 years and comes from tree bark. I guess at some point someone was in pain and chewed on some bark and felt better. Who knows? Anyway, now we know why aspirin works.

The same thing goes for acupuncture. Acupuncture has proven to be beneficial for variety of ailments for centuries and has only recently been supported through scientific validation.

For example, for years, people have claimed acupuncture helps with sinus problems. I wouldn’t have believed it frankly but the studies came out and it actually does provide benefit to people with sinus problems.

That said would I tell you not to try acupuncture if you wanted to give it a shot before the studies came out? Absolutely not! If it’s not going to hurt you, and you think it might actually help, then give it a go.

Anyway, one of the areas where there are plenty of non-validated treatments that many people swear by is in the area of chronic pain. This week on Wealth Formula Podcast, I will talk to someone who believes he has a novel means of treating chronic pain with greater than 80 percent efficacy.

And…if you want to, you can even invest in this project. Full disclaimer: I have nothing to do financially or otherwise with this company. It is one more example of ways for you to invest outside of Wall Street.

Brendon co-founded Radiant Pain Relief Centres with a vision to build the safest, most consistently effective and appealing solution to the epidemic of chronic pain. Combining a mission to change the way chronic pain is treated with deep experience in healthcare management, marketing, business development and sales, Brendon and Dr. David Farley opened Radiant Pain Relief Centres in West Linn in February 2014. Following the success of the first center, they are laying out a plan for expansion to open new centers in new markets nationally and internationally. Previous to founding Radiant, Brendon played key operational and business development roles for two Portland-Area Portland Business Journal and Inc. Magazine Growth Award winning companies, and was the Director of Sales and Marketing for another Portland-based medical device start-up. Brendon holds a BS in business marketing and an MBA.

Show notes

WHAT STARTED HIS PRACTICE
TREATMENT PROCESS
PERCENTAGE OF REDUCED PAIN
BUISNES MODEL
TIME FOR CENTER MATURITY
RADIENTPAINRELIEF.COM

**149: Real Investors of Wealth Formula: The Goose** Mar 10, 2019
To all those who made it out to Scottsdale last weekend, it was great to see you!

Of course I’m biased, but I have NEVER seen such a high quality group of people at an investors event before ours. You guys are by far the most interesting podcast listeners in the entire podcast ecosystem—guaranteed.

Of course the speakers were fantastic as well. Ken McElroy, Tom Wheelwright and David Steele from Western Wealth Capital dazzled us with their wealth of knowledge on real estate and related tax benefits.

Damion Lupo taught us about using QRPs and also managed to sell a $1300 gold coin for $400 (nice going Eric!). And of course Christian and Rod reminded us how **Wealth Formula Banking** can enhance your profits even more with leverage.

All of these speakers taught us a ton then we got to walk a property that **Wealth Formula Investor Club** members own that is already way-outperforming pro-forma in less than one year!

Of course, that was a nice way to end the formal education but perhaps the best part of the whole event was getting to know each other. For those of you who attended the event, I know that you agree with that sentiment.

If you enjoyed being part of the tribe in person, I just want to take this opportunity to remind you that you don’t have to wait for the next get together to keep the party going.

Consider joining **Wealth Formula Network**. There is a robust course with the likes of Tom Wheelwright, Ken McElroy, Kevin Day, and Dean Graziosi which helps you to get caught up with the foundations that every investor should have.

In addition to this, however, you have access to me and to one another in a private facebook group and biweekly video conferenced mastermind calls. The people who are in it love it.

That said, I’m not one to push things on you. If you are the type who loves talking about money and are looking for a fantastic group to do it with, go to WealthFormulaRoadmap.com and sign up.

Now, going back to the meetup… there was one noticeable absence from the event. If you are in Wealth Formula Network, you already know who I’m talking about because we call him the *mascot*. He is also known as Goose!

And there is no one better to debut for a new type of show that we will do periodically on Wealth Formula Podcast called *The Real Investors of Wealth Formula*.

For investors like you, this might be a much better option than *The Real Housewives*… series. You see, what I realized at our event is that you guys got as much, if not more, talking to one another and hearing about your unique experiences, than you might have gotten from listening to the star-studded faculty.

Anyway, let’s give this series a try. And…do me a favor. Tell me what you think. I’m not planning to do this for every show by any means, but I think it’s nice to have something every 6 weeks or so that includes you, the Wealth Formula Nation, into the show.

So, when we come back, our first episode of the Real Investors of Wealth Formula starring Jerry “Goose” Gosnell!

P.S.

Check out Jerry’s vacation rental: Goslings’ Nest’ in the beautiful Lake Placid region of NY-

https://www.facebook.com/TheGoslingsNest/

Jerry Gosnell is part of Wealth Formula “Bucks Tribe”. For the past 35 years, Jerry followed the conventional wisdom of investing in stocks, bonds and mutual funds along with 401k’s, and 529’s. It wasn’t until his late 40’s he realized that a single stream of income and the ups and downs of Wall Street were not the best approach to financial success or retirement. It was then he decided to do something about it and began to get financially educated. He is now 52 and with each day passing gets a little closer to financial independence. His ultimate goal is to leave a legacy of financial literacy for his children and create additional options of wealth generation for his family.

Shownotes

What drove Jerry to look for external streams of revenue?

His changing of perspective on investing

Deciding on what to invest in

The value Wealth Formula brought to him

**148: Dentacoin? What?** Mar 03, 2019
I’m a surgeon—a retired surgeon. I started out in neurosurgery. Then, after a couple years, I *fled* to a specialty where I could operate on the head and neck without the brain. I loved neuroscience, but found the brain, itself, to be a pain in the ass. When the brain gets injured, you can’t wait until the morning to fix the problem. *That’s a problem* for someone who does not like being woken up in the middle of the night.

Anyway, after finishing my less night intensive surgical residency I did a fellowship year in cosmetics. By the time I was done with all of this training, I was 34 years old. Now I’m retired from surgery and medicine of any kind and I’m 45 years old. In fact, I haven’t seen a patient in two years. Imagine that. Admittedly, it is a bit painful for me to think about my lost decades of youth. It was a long run for a short slide.

Why did I retire from medicine? It wasn’t because I wanted to “retire” aka sit around and wait to die. I just stopped doing something that I no longer wanted to do. I didn’t like it anymore. Actually, I liked operating but didn’t like anything else about medicine.

On top of that, I have a little bit of attention deficit disorder so I tend to change direction a lot. I transferred out of my first college after my first year, I changed residency specialties after two years, I quit/got fired from my first job after 8 months then I quit medicine all together in less then a decade after completion of my training. The only thing that’s lasted over 10 years in my life is my marriage and I’m going to stick with that one for sure!

Anyway, beyond the general lack of interest in practice, I didn’t like the way medicine in general was headed. I had one insurance based business that was a nightmare. The insurance companies were ultimately telling me who I could operate on and who I could not. For those of you in the medical field, you know exactly what I’m getting at.

Insurance based medicine is also the only field in the history of the universe where someone does the work first and then a third party decides how much to pay you or whether or not to pay you at all! But we health care providers are too focussed and idealistic to fight for compensation.

We also have created an environment within our own culture that makes talking about money *dirty*. Mixing money talk with medicine, at least in my experience, is considered heresy in physician culture. The end result is that others in the system happily fill that vacuum and they are the ones getting paid the most!

I feel especially bad for my friends in non-surgical specialties who are getting squeezed even harder. My best friend in college was the smartest kid in the class and became a pediatrician. Now she works her tail off and her reimbursement is going down every year.

Internists are also in the same boat. They just can’t see enough patients to stay profitable. Of course patients blame the doctors for not giving them enough attention and using ancillary staff like physician’s assistants to help with the workload. If patients understood how badly internists are getting squeezed by insurance companies and how much they have to work to make a living, they might instead focus their anger at the insurance companies that now control their care.

As a result of this unfortunate situation, some doctors have decided to move towards a *concierge* practice model. Here’s how it works. You sign up with a doctor and pay maybe a $200 per month. The doctor has all of his patients do that. That makes sure he can make a living. Next, the doctor caps his total number of patients. The result…medicine that you remember as a kid. Doctors spend a lot of time with you. You can stop in if you are sick and you can pretty much make an appointment anytime you want. Oh…and some will even do house calls.

I use one of these doctors and it is definitely worth the price of admission. But, I have to admit it is sad that this kind of care is no longer the *standard of care.* The insurance companies and reimbursement have made that impossible.

Of course my experience is that of a physician but I have met a lot of dentists and orthodontists through our accredited investor club. I will say this, dentists are a heck of a lot more business savvy than doctors are as a general rule. And some of you are downright killing it by selling large practices etc.

So, it came to no surprise to me when I learned about a blockchain project called dentacoin which has gotten a lot of very positive feedback from the dental community around the world. This is project that combines both health care and cryptocurrency and may actually be applicable to a host of other fields.

Whether you are interested in blockchain technology or not, you will find this interview with the cofounder of dentacoin absolutely fascinating. It is a sign of things to come in the new world financial paradigm.

Buck

Jeremias Grenzebach

Jeremias is the Co-Founder & Core Developer at Dentacoin being an early entrant into the Blockchain scene. Immersed within the peer-to-peer technology for 8 years. Contributor to Ethereum, Waves, ZCash, uPort, Status, imToken, Byteball. Strong believer in decentralization and transparency.

Shownotes

WHAT PROBLEM DOES DENTACOIN LOOK TO SOLVE

HOW IT IS WORKING TO IMPROVE HEALTHCARE

THE VALUE BLOCKCHAIN BRINGS TO DENTISTRY

WHERE IS DENTACOIN

THE BENEFITS IT BRINGS TO PROVIDERS

DENTACOIN.COM

DENTACOIN.COM/DENTISTS

DENTISTS.DENTACOIN.COM

**147: Are Mobile Home Parks Right for You?** Feb 24, 2019
As you know, I have been on a kick to challenge myself to learn more about things that I don’t know about and to challenge my personal investing dogmas.

Recently, you saw me come out of the proverbial gold closet and proclaim that I don’t see the point of owning physical gold. You can hedge the economy with appreciating real estate with leveraged debt and cash flow to boot. Who needs gold?

Again. Please write me and prove me wrong but that’s where I’m at right now when it comes to this beautiful but useless precious metal.

On the other hand, there are areas that I went into thinking that I would be more excited about than I ended up being. To be honest, mobile home parks were one of those.

I started looking at mobile home parks and mobile home funds recently expecting yield to be significantly better than apartments. No one buys low income housing for appreciation so I figured the cash flow must be super high and the tax advantages must be off the charts.

But honestly, that’s not what I found and so I’m back to being a true blue apartment investor.

Recently, I got asked if I would like to have Jefferson Lilly on my show. I looked at his bio and was pretty impressed. He’s a Wharton business school guy who lives in San Francisco. He’s obviously smart.

Furthermore, his bio said that mobile home parks were BETTER than apartments as an investment. So, I figured if anyone could convince me to leave my happy place outside of apartments it was him.

So, on this week’s Wealth Formula Podcast, you will hear that conversation and will give you a chance to make a decision for yourself.

Don’t miss this the show.

Jefferson Lilly is a mobile home park investment expert, educator, and industry consultant who has been featured in the New York Times, Bloomberg Magazine, and on the ‘Real Money’ television show. Prior to co-founding Park Street Partners in 2013, Mr. Lilly spent seven years investing his own capital at Lilly & Company where he acquired and continues to operate mobile home parks in the Midwest. Prior to becoming an investor full-time, Jefferson spent 10 years in sales leadership roles with several venture-backed startup companies in Silicon Valley that were acquired by Openwave Systems and VeriSign. Earlier in his career he held operational roles at Viacom and was a consultant with Bain & Company.

Shownotes:

MOBILE HOME MAINTENANCE

NUMBER OF MOBIL HOME PARKS

LOT FEES

RETURN ON INVESTMENT

MANAGING

STARTING UP

MOBILEHOMEPARKINVESTORS.COM

PARKAVENUEPARTNERS.COM

**146: Mini-Malls in 2019?** Feb 17, 2019
If I hadn’t listened to Peter Schiff, I would have made gobs and gobs of money in the past few years.

Now, don’t get me wrong. I like listening to Peter Schiff’s podcast. He is a very smart guy. In fact, he predicted the financial meltdown of 2008. It would be even more impressive if he had not predicted the financial meltdown of every other year that there was not a financial meltdown, but he did get 2008 right.

Peter has a keen sense of the economy and a very strong perspective that you have to respect. I think the problem, in general, is that if you only listen to Peter, you might be only seeing his very narrow perspective on things.

Let’s take bitcoin for example. I started hearing about bitcoin back in 2015 or so when bitcoin was trading for under $300. The problem is that back then I used to listen to Peter Schiff’s podcast religiously and every time he brought it up he was so damn negative about it.

He made bitcoin sound like a big joke. Now, you may not be a bitcoin person, but if you dig down into the concept and the economics it represents, bitcoin should have been something that Peter actually supported. It is pretty much gold—but better in theory.

Anyway, he was so darn negative about it that I never bothered to take it seriously. I didn’t dig any further or try to listen to other intelligent voices with a different perspective.

As a result, I lost out. Even at bitcoin’s low this year, I would have still been up 1000 percent had I not listened to Peter back then.

Now I don’t actually blame Peter for not buying bitcoin in 2015. I blame myself. I blame myself for not listening to people with other perspectives then me. There were plenty of smart people like Eric Voorhees out there that made the case for bitcoin as clear as it is for me today.

But I was too busy listening to the same podcasts who basically regurgitated what everyone else in the niche had to say. No one in the real estate/real asset niche knew a damn thing about bitcoin but everyone acted like it was a joke.

My story of bitcoin opportunity lost has a larger message that must be taken to heart. Stop listening to the same source of information to make all of your financial decisions. You may think you are listening to a whole bunch of different podcasts but if the same guests keep popping up all the time then maybe you are just listening to the same ideas recirculating through a closed podcast circulation—sort of like an echo chamber.

I don’t want to be part of that. That’s why I’m trying to get people on the show to explain to me why I’m wrong for believing what I believe.

One of those beliefs that I have held for many years is the idea that I don’t like commercial real estate. I don’t like mini-malls, office space, or restaurants? I’m a multifamily guy for the most part. I want to invest in things people have to have…not what they want to have.

So, today I invited a a commercial real estate guy on the show who does exactly what I have said that I don’t like to make his case for commercial real estate in 2019.

Make sure to listen to this show—especially if you have the same bias as me.

Michael has worked for more than 32 years and handled more than $500 million worth of real estate transactions on behalf of his clients at Concordia Realty.

Although Michael began his business in the realm of retail real estate, Concordia Realty now handles third-party property and asset management services for a variety of commercial real estate investments.

He also specializes in revitalizing distressed investments for partners, adding value for clients … including banks, insurance companies, and hedge funds.

Michael has consulted for some of the top investment and development companies in the world … and now his knowledge is available to YOU.

Shownotes:

Commercial Real estate

Affect from Economy

E-Commerce Effects

concordiarealty.com

145: Nic Carter on the REAL Value of Blockchain Feb 10, 2019

Bitcoin and Blockchain are not dead. In fact, if you look at the history of bitcoin itself you see that it seems to have a feline propensity for multiple lives.

After being battered and beaten up so many times, why is bitcoin not dead?

I am reminded of a movie that I recently watched with my nine year old daughter from the late eighties called The Princess Bride.

If you happened to miss this one, you really ought to see it. It’s a very funny love story based in the the middle ages with pirates, kings, and lots of sword fighting.

The love story is between a farm boy called Wesley and Buttercup. The two are separated as Wesley goes off to sea and Buttercup presumes he is dead.

Years later, she is chosen by the local King to marry and she agrees although she knows that she can never love again.

Now this king is a bad guy and he knows that Wesley is not only alive but coming back to claim his beloved. Eventually, Wesley is caught and tortured to death by the King’s minions.

However, Wesley’s allies need him back alive to defeat the king so, after finding him apparently dead, they bring him to a magician who was recently fired by the King.

This former disgruntled employee of the King, played by Billy Crystal, says that Wesley is actually “mostly dead” but refuses to help unless there is a true meaningful reason to bring him back to life.

So, he pushes air into Wesley’s mouth and squeezes on his chest. What comes out of Wesley’s mouth is “true love”. The magician admits that this is, indeed, the most noble cause to bring him back alive but tries to get out of it anyway. But when he finds out that bringing him back will help him get revenge on his former employer, the King, he agrees and brings him back to life.

OK, so perhaps my metaphor is a little overboard, but just like “true love” was worth bringing back to life in The Princess Bride, bitcoin has been brought back from the brinks of “mostly dead” several times over because of what it represents.

What bitcoin represents is the ultimate storage of value. It has all the traits of gold but it’s better because it is portable and can easily be transferred from peer to peer thousands of miles away from one another without the need for a central authority like a bank.

Bitcoin is not hackable because it is decentralized and there is a finite amount making it “unprintable”.

Like many people, up until 2016, I didn’t get it and maybe I don’t entirely understand even now. However, this concept of eliminating the middle man is so powerful that I now believe that it CAN NOT be stomped out by anyone or any entity.

That powerful message, unfortunately, has been bastardized by many like Tai Lopez and other charlatans who took advantage of people with the idea of getting rich fast because of the explosive growth of cryptocurrency. The bubble created in the frenzy of greed and subsequent popping of that bubble has led to the current round of bitcoin obituaries.

That said, the concept of bitcoin and distributed ledgers in general, is anything but dead. It is actually in its early years and it is simply experiencing the growing pains of any new technology or concept that is new to the world.

There is value in what is being created and people will continue to make a lot of money in the future from it. They may do so through owning cryptocurrency or through creating the infrastructure surrounding this new economy. For example, collateralized bitcoin lending services have nothing to do with investing in bitcoin, but they make a lot of money through a fairly traditional lending business model. There is so much going on out there. It’s just important to make sure you are listening to the right people.

One of the legitimately smartest individuals in crypto today is Nic Carter. He is not a social media figure and he does not have a newsletter. However, for those at the highest levels of cryptocurrency investing and technology, Nic has a voice to which everyone listens.

So, despite the polar vortex sweeping across the cryptocurrency world, this week I urge you to listen to my conversation with Nic on Wealth Formula Podcast.

Shownotes:

Nic Carter’s background
What’s is Coinmetrics
How is Coinmetrics different than bits activity and other competitors
Castle Island
Blockchain, blockchain, blockchain…
When will the impact of institutional interest reflect the market?
Learn more about Nic Carter
https://medium.com/@nic__carter

144: Millennial Money with Grant Sabatier Feb 04, 2019

If I have given you the impression that my life since leaving surgical training has been all ups and no downs, I have unintentionally misled you.

The first business I started which was an owner operated medical business did well quickly its true. It allowed me to start investing in real estate. But that first acquisition I did not go well and it turned out to be a $300K lesson in how due diligence should NOT be done.

I’m happy to say that my fortunes with real estate have, indeed, been quite good since that time. But some of my business ventures have been up and down.

A few years ago when my initial medical business seemed to be slowing down (around 2012), I started to look around for business models within medicine that could hedge my position. My first business, as some of you know, was a cosmetic surgical business that was all cash pay and it still exists in Chicago.

The second business was related to a business covered by insurance. I decided I would stop being an operator on the first business and focus on this second business to create that hedge as soon as possible. That was around 2014 or so. My hunch was that with this second, insurance based model, I was on to something and that there was a window of opportunity to take advantage of it.

I was right. In fact, that second model made a seven figure plus profit in its first year and pretty much made up for the lagging cosmetic business. I felt like a genius for doing what I did.

In fact, not only did the new business save the old one, it seemed to some how drive a lot of energy into the initial cosmetic business. All of the sudden, it seemed like everything I touched was turning into another million dollar business. I bought some more apartment buildings around that time which was a really good move as well.

But…I also ended up doing something stupid. I decided that if my cosmetic business could be successful in the third largest market in the country, I could open up a few more across the country and really kill it. I figured if I could do what I was doing in Chicago in four other medium size markets, I could potentially walk away with $40-50 million dollars.

Now, that in and of itself was not a bad idea. I’ve seen similar things done. In fact, a company emerged at around the same time that was doing almost the exact same thing. However, they had a couple of advantages over me.

First, they knew what they were doing! I knew how to dominate one city and I had the staff who could execute what I wanted them to do. I did not have the operational skill set, nor did my staff, of replicating our business model in multiple different states. My competitor was staffed with professional operators and the deep pockets of private equity making sure to guide their investment towards success.

That brings me to the other major advantage of my competitor: capitalization. I was making so much money in 2014, I figured I’d do the whole thing myself. My competitor was using private equity money with unlimited pocket depth that would see the project through despite a few years of multimillion dollar losses.

Suffice it to say, I lost that battle. After losing a small fortune, I retreated back to Chicago. The good news was, that despite the failure, the two Chicago based businesses were still killing it but now a lot of that money was going into paying down debt from the failed venture rather than underpriced Chicago real estate.

When I think about what I could have made with that money by buying more real estate in the Chicago rather than trying to expand that business is mind boggling. Everything was on sale. A couple of the properties I did buy during that era were sold last year for returns of 500% and 600% on equity (and they cash flowed all the way through the 3-4 year hold periods)

In hindsight, what could I have done differently? Well, I could have just done what I said…taken all that money and dumped it into real estate and other investments outside of my core businesses. That might have been the easiest.

Given how my businesses were doing at that time, I could have also looked into private equity, at least for the cosmetic business. I could have let them buy a portion of my company and help me scale with them. That would have allowed me to take some money off the table and share the risk with an operator who understood how to scale the way I wanted (the leveraged buy-out option).

Either option would have been better than what I did. The truth is that it is all easy to see in hindsight. When you are making money like I was for the first time, it’s hard to see clearly and you can feel invincible.

Now, going back to business two—it was a business that I knew could make a lot of money but I also knew that it was not a long term thing. It involved procedures that people needed but for which insurance companies were paying a lot of money. I knew that wasn’t going to last. The insurance companies would catch up with me. It was a business that I considered as having planned obsolescence—sort of like an iphone that works great at first but has a built in self-destruct button after a few years.

For a variety of reasons, after a three year ride, that business found its end last year and I lost about $700K on it. It’s a long story and if you are in Wealth Formula Network I can explain.

Lessons learned for me:

My ability is an operator are limited. I am an exceptional idea guy but someone else has to do the operational part. Similarly, I can identify a great real estate opportunity that involves value add. But I’m not the operator who can add the value. I’m going to partner with an operator who has a track record of pulling it off.
Entrepreneurs have a tendency to chase the shiny object—that means they like to start new businesses. Once a business gets off the ground and it’s successful, they lose interest and chase the next business. I was guilty of that for sure and now I make a conscious effort to say no.
When you are making a lot of money, don’t throw all of it back in the business. If you do, you expose yourself to single point failure. If business two had not bailed out my cosmetic expansion attempt back in 2014, I would have been toast. These days, I worry less about business expansion and more about constantly deploying capital into real estate projects that will stably create wealth over the next few years. My goal this year is to deploy no less than 60 percent (hopefully 75 percent) of every penny that I make into real estate projects primarily with one or two operators that I consider the best in the business.

It’s amazing how much you can learn in a short period of time through a little bit of trauma. One or two failures will teach you a hell of a lot more than a thousand successes.

That leads me to my final take-away of the day—listen to people who have a little bit of scar tissue. Every highly successful entrepreneur and investor has had some kind of failure at some point that made them a lot better at what they do.

I remember thinking my dad was crazy for things he said to me in the past that don’t seem so crazy today. I remember, long before Robert Kiyosaki’s Rich Dad Poor Dad, my dad talking about cash flow all the time—especially after getting slaughtered with tech stocks in the dotcom melt down of the late nineties. I also remember him telling me that going to medical school was not going to make me rich and that I should just buy real estate. He thought it was silly that I took so much pride in being published in medical journals as a surgical resident while getting paid $30K per year.

There is truth in all of the things he said to varying degrees but none of it seemed useful to listen to as a kid or even an idealistic surgical resident in my twenties.

So, if you are a millennial, make sure to search out some gray hairs for opinions too while listening to the voices of your own generation that seem to be ahead of the curve.

Speaking of millennials who are ahead of the curve, my guest today is one of the voices of millennial money. In fact, his blog, millennialmoney.com has about 10 million readers. He just a started a podcast and Tony Robbins asked him if he could be a guest (FYI Tony has not reached out to me yet).

His name is Grant Sabatier and he is my guest on Wealth Formula Podcast this week.

Grant Sabatier’s background
The Escape
Conventional Wisdom
What is Wealth?
Retirement formula
Millenialmoney.com
Financialfreedombook.com

**143: Who Cares About Poverty and Equality?** Jan 27, 2019
It’s so strange to think of the way our politics have evolved even in my lifetime. The first president I remember (barely) is Jimmy Carter. Most of grade school for me were the Reagan years.

After a bumpy start, the 1980s became the roaring 80s. It was a decade remembered for wealth and excess. Remember *Wall Street* with Michael Douglas and Michael J. Fox as the Alex P. Keaton on *Family Ties?*

The Republican party, at the time, was clearly the party of the rich and made little effort to concern itself with poverty and equality. Ideologically, it was a different mind sent. The appealing nature of the 80s was that it was aspirational. It was indeed *Morning in America*. After the hopelessness of the Carter economy, everyone seemed optimistic.

That’s why even the middle class, the traditionally democratic bastion of unions and the democratic party, defected. They became Reagan democrats.

The good times continued through the 90s into the Clinton years. In fact, Clinton represented a new kind of democrat who embraced Wall Street and free trade. The old democratic party seemed dead and the difference between Democrats and Republicans was minimal. Rising tides raise all ships—even if some ships are rising more than others.

A recent Brookings Institute analysis found that out of the last five presidents the largest annual income gains in the middle class occurred during the Reagan and Clinton years. In general, these were good times in America. People were generally pretty happy and optimistic.

Now to be clear, there is a ton of data showing that it makes virtually no statistical difference to the economic performance of the country whether there is a Republican or Democrat in the White House. In fact, I hate to say it, but there is a very slight advantage to the democrats.

What I’m getting at here is that when times were good economically for the middle class, there was less divisiveness in the country.

It is no coincidence that over the last 2 decades, median household incomes have barely budged, wages are declining and that this corresponds to the rise of political and demographic divisiveness and demagoguery.

Almost 80 percent of Americans believe that today’s children will grow up *worse-off* than their parents. Think about that. That isn’t *Morning in America*. That’s downright depressing.

Now what happens when people are not doing well and are worried about the future? Well, it starts with blaming everyone else for our problems. Maybe that’s why anti-semitism and white nationalism is on the rise?

People become more tribal and insular. They stick with their own and look for scapegoats. The worst example of this in recent history was, of course Nazi Germany which followed a horrific economic period of hyperinflation following the first world war as it was paying reparations.

That was extreme but we now see a lot more divisiveness in our politics and both parties are pandering to our worst instincts. I really hate that my kids are growing up in this kind of polarized country.

Now most of us are doing pretty well and we’ve made a lot of economic gains over the past several years after the great recession so it’s easy to not recognize what is underlying all this strife. But that’s a mistake. Why? Because eventually when enough people are hurting, they will come for us with pitchforks. Whether that’s with literal civil unrest or 70 percent tax brackets suggested by the likes of Alexandria Ocasio-Cortez—it’s time to take this seriously.

There are a lot of smart people who you might not expect to care that recognize what is going on and who have spoken about it extensively. Robert Kiyosaki, Billionaire Charles Koch, CEO of Koch industries, and even libertarians who most people consider insensitive to the poor recognize this. Now, how to deal with the problem is another issue entirely.

This week, we speak with a libertarian from the Cato Institute, Mike Tanner, who shares some common sense strategies that are more nuanced than simply raising taxes. In fact, these strategies are probably the ones that make the most sense but get the least actual political attention.

Cato Institute senior fellow, Michael Tanner heads research into a variety of domestic policies with a particular emphasis on poverty and social welfare policy, health care reform, and Social Security.

Tanner is the author of numerous other books on public policy, including *Going for Broke: Deficits, Debt, and the Entitlement Crisis*, *Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution*, *Healthy Competition: What’s Holding Back Health Care and How to Free It*, *The Poverty of Welfare: Helping Others in Civil Society*, and *A New Deal for Social Security*.

Under Tanner’s direction, Cato launched the Project on Social Security Choice, which is widely considered the leading impetus for transforming the soon-to-be-bankrupt system into a private savings program. *Time* magazine calls Tanner, “one of the architects of the private accounts movement,” and *Congressional Quarterly* named him one of the nation’s five most influential experts on Social Security. The *New York Times* refers to him as “a lucid writer and skilled polemicist.”

More recently Tanner has undertaken a major project to develop innovative solutions to poverty and inequality.

Tanner’s writings have appeared in nearly every major American newspaper, including the *New York Times*, *Washington Post*, *Los Angeles Times*, *Wall Street Journal*, and *USA Today*. He writes a weekly column for *National Review Online*, and is a contributing columnist with the *New York Post*. A prolific writer and frequent guest lecturer, Tanner appears regularly on network and cable news programs.

Shownotes:

Mike Tanner’s background

Inequality and poverty from a practical perspective

What’s wrong with the criminal justice reform system now?

The effect of zoning laws

Occupational licensing

Unemployment insurance

Cato.org

The Inclusive Economy

**142: Gold: To Buy or Not to Buy? That is the Question** Jan 21, 2019
Changing your personal financial belief system is like changing religions.

Think about it. Maybe you grew up Christian or Jewish. Whether you practice or not, you have some pretty established beliefs. That’s why it’s not that common for people to convert from one religion to another.

Maybe that’s an extreme example but there is a parallel when it comes to changing your personal investment strategy. We grow up being told that the “responsible” thing to do is to find a nice financial advisor and invest in a broad portfolio of stocks, bonds and mutual funds.

You see the commercials all the time, right? Well, this *heretic* can’t stand those commercials! It drives me crazy because it reinforces the notion that there is a conventional financial pathway that is right and that it involves Wall Street.

I broke away from that “religion” long ago and have followed the heretical path of real asset investing in “alternative” assets like real estate and precious metals. You gotta love the label “alternative”, right? It makes you think of blue hair mohawks and nose rings—not the nice responsible looking people you see on those brokerage commercials.

Now some of you know that I have been thinking controversial thoughts even within the “alternative” investing space lately. It’s funny because I’m even a little uneasy about saying this but…I will come out of the closet. **I no longer own gold.**

I know, I know. Some of you are disowning me as we speak. My own hero Robert Kiyosaki *loves* gold and, if he heard me say that I don’t believe in it any more, he would never come on my show again.

Fortunately, I’m quite confident he doesn’t listen to my show so that shouldn’t be a problem. I’ll just wait a little while before I ask him to come back on again.

For those of you who have not heard me explain my stance on gold—well, I just don’t understand why I wouldn’t just own more real estate instead. After all, the reason to buy gold is as an anti-dollar. Gold goes us as the dollar goes down. In other words, it’s an inflationary hedge.

But so is real estate. In fact, real estate also throws off cash flow and can be leveraged. It is no more volatile than gold and it has tax advantages up the wazoo. Taxes on the sale of gold, on the other hand, are worse than capital gains.

Ok, so all that said, I’m still trying to keep an open mind. I’m talking to people and letting them try to convince me why I should own gold. And my guest this week makes some pretty compelling points.

So, if you are trying to figure out whether or not you should own gold, listen to this week’s episode of Wealth Formula Podcast. It may help you make the decision once and for all.

Strategic, results oriented professional with more than 20 years of leadership experience across a broad range of retail and technology organizations, many of which are in the Fortune 500. He has a proven track record in driving strategic and operational change that results in growing both the top and bottom lines of an organization. Ken recognizes the importance of taking care of customers while showing a deep commitment to the development of employees.

Detailed experience with managing highly talented teams; setting the overall strategic direction for an organization; managing complex, multi-site distribution networks; implementing cross functional, multi-million dollar initiatives; significant P&L responsibilities both in revenue ($1B+) and cost ($350M+); strong technical knowledge in how systems enable the business.

Specialties: eCommerce Technologies, Entrepreneur Organization Management with Founder Engagement, CRM, Business and Supply Chain Strategy, Information Technology, Merchandising, Large Project Implementations, Distribution Center Management, International and Domestic Transportation Management, Network Modeling, Site Selection and Building Start-ups, Labor Relations, System Implementations, P&L Management, Associate Growth and Development, Inventory Planning and Allocation, Lean, Six Sigma, S&OP Processes

Shownotes:

Ken Lewis’s background

Out of all things, why gold?

Gold’s volatility

What’s gives gold its value?

Owning physical gold

How does Ken tie gold to blockchain?

Passive income on the gold you own

Real Estate vs Gold

Onegold.com

Apmex.com

**140: Multifamily Mastery and Infinite Returns with Janet LePage** Jan 06, 2019
I remember being in medical school thinking that I wanted to be a surgeon. The idea of it appealed to me very much. I certainly had the personality of a surgeon. But there was something about which I felt very insecure.
You see, growing up, my dad was about as white collar as they get. I didn’t learn anything about cars and never put up any shelves. The only reason to think I was any good with my hands at all was the fact that I excelled in hand-eye-coordination sports like ice hockey and table tennis (aka ping-pong).
So as much as I loved the idea of being a surgeon, I had this big fear that I would be horrible at it. And, in the beginning, I kind of was!
In medical school, all of the guys I liked were orthopedic surgeons. They were all into sports like me. The problem was that they were all carpenters at heart and I was NOT. I remember an orthopedic surgery resident handing me a saw to amputate a guy’s leg at the VA. Having that tool in my hands wasn’t pretty. Fortunately, the leg was supposed to come off anyway.
Eventually, I realized that I was better at soft tissue surgery (no bones). I felt that I was better with fine movements than using power tools. That’s one of the reasons I decided to operate on brains.
In fact, the first time I ever used a drill, it was in medical school drilling through someone’s skull on my neurosurgery rotation. I got pretty good with that drill after a while. It was the only power tool I liked.
I remember getting confident enough practicing on people’s skulls that I bought a drill at the hardware store to put up some shelves in my apartment for the first time.
Okay…so all of this sounds a little messed up I know. But it’s true. The good news for me was that there was a little bit of a learning curve getting my hands wet but pretty soon, I became a pretty darn good surgeon.
In hindsight, the fear and anxiety of not being good at surgery were silly. As it turned out, becoming a good surgeon was really no different than becoming good at anything else in life—it took practice.
In the case of most surgical procedures, you sort of do the same maneuvers in every case. After my neurosurgery stint (which I left because of the hours), I spent some time doing cosmetic surgery. I watched the masters do hundreds of operations.
There was one guy I watched that was particularly interesting to me because his results were so good and so consistent. What I noticed when I watched him carefully was that he did everything the same every single time. In fact, I counted about 6 discreet maneuvers that he did for every patient and wrote them down.
When I started doing my own cases, I did those six steps and, from the very first case, my results were outstanding. During my career, I did several hundred facelifts and did them exactly the same way every time.
I got faster, more precise, and there were fewer and fewer wasted movements. My patients thought I was an artist. But the truth was that I was more of a robot than an artist. I am the least artistic person I know.
This experience of mastery was profound for me. I felt like I had discovered a larger secret in the process of being a good facelift surgeon. The secret was that you could master just about anything if you cracked the code and did it over and over again the same way every time. That’s all that mastery really is.
My guest on this week’s Wealth Formula Podcast is special. At a relatively young age, she has become a master at her craft and has shown the same kind of consistency with her financial outcomes as I did at my peak with surgical outcomes.
Her name is Janet LePage and she is a computer scientist who has cracked the code to successful multifamily real estate investing. In this episode, we will learn how she did it.
Buck
P.S. Don’t forget to sign up for our upcoming Wealth Formula Investor Meetup in Scottsdale, AZ. Click here to learn more!

For the past decade, Janet has been focused on creating wealth through well-selected real estate investment. She has grown her precise business strategy from more than 50 residential transactions in Arizona to the purchase of multi-family buildings. Under Janet’s leadership, WWC has placed more than $279 million US in private equity and acquired 44 multi-family properties, comprising more than 8,500 rental units, with a purchase value of more than $750 million. In 2017, Janet was named entrepreneur of the Year (Real Estate/Construction/Pacific region) by Ernst & Young. In 2016, Janet was named one of Business in Vancouver’s Forty Under 40 and was awarded the Veuve Cliquot Canadian New Generation Award, which recognizes young female entrepreneurs. She holds a Bachelor of Applied Science in Computer Science and Business Administration (Simon Fraser University) and a Project Management Professional designation.

Shownotes:

Janet Lepage’s background

Cracking the code then sticking to it

Velocity and leverage

Have a lot of lemons to squeeze

Affordability index

Caring = profitability

The *We Got You Back* program

139: Ask Buck New Year’s Edition! Dec 30, 2018

You know it’s been a hell of a year in terms of market volatility right? Now, in cryptocurrency, we expect that. It is a speculative asset class with binary outcomes. That’s why we only invest money in money that we can lose. In 2018, we definitely lost it (who knows about 2019).

But the equity markets are supposed to be where you put your retirement money! Whats up with the volatility? December has been the worst month in the stock market since 2008 and could very well be the worst December since 1932 during the Great Depression.

Why? Because the fed raised rates by one quarter of one percent? Because there is a government shut down over a border wall? Why do these seemingly unrelated circumstances affect your publicly traded equities?

The answer…your wealth in the stock market is not real. When people get nervous and there is a sell off in the market, your wealth vanishes. Investing in the stock market is not conservative as conventional financial wisdom has led you to believe. It gives you exposure to systemic risk that you cannot control.

Now I know some of you skeptics out there will say yeah Buck the real estate market is not an uncorrelated asset either. That’s absolutely true but here is the difference.

You see, the money I have tied up in real estate is real. How do I know that? Well, I can see, touch, and feel an apartment building. And people have to live somewhere so they keep paying if they need a roof over their head. People sell stocks so they can pay their rent.

As for the value of the building. Maybe it will go down in value for a period of time but if I’m making money from the asset now, why do I even care? I’ll just cash flow for a few years and when the value goes back up, maybe I’ll sell (or maybe not).

These are not new concepts for this show but worth repeating because I am sensing panic out there with stock market investors and I am getting a lot of questions about where to invest or where to hold cash.

Rather than be foolish and give you financial advice, let me point out that my own strategy continues to be to buy moderately leveraged real estate with value add opportunities in high growth markets (Dallas, Houston, Phoenix, Atlanta). If you are an accredited investor and you want to know exactly what I’m up to, join investor club ASAP and you can decide if you want to do the same.

As for where to keep cash, I’ll say it again. There is only one vehicle that I know that continued to provide solid positive compounding growth and liquidity through the Civil War, the Great Depression, and the Great Recession. It’s called Wealth Formula Banking and, in my opinion, this is the best risk adjusted long term investment ever.

If you are tired of feeling queasy not knowing which way the market is turning, it may be time to really take a look at this option.

I think we are in for some serious volatility in the next year. That said, I do not believe that we are headed for another 2008 right now. The biggest problem we have right now is that rates are normalizing (although mortgage rates remain low) and there is a tremendous amount of political uncertainty. The markets hate uncertainty.

Sitting on cash in an almost certain inflationary environment may not be in your best interests either. That guarantees you lose money as inflation exceeds the nominal interest you are earning at the bank.

Markets go up and down even though in good times we never seem to remember that. It doesn’t mean we freeze. It means we make decisions based on what is in front of us. In this week’s episode of Ask Buck, we touch on these topics and more.

Start out the year with some Wealth Formula Wisdom. Don’t miss this episode.

138: Ask Buck Christmas Edition Dec 23, 2018

I’d like to give each and every one of my listeners a gift this year so I’m going to do that the only way I know how—to give you some unsolicited advice (not to be confused with financial advice). Take it or leave it but these concepts have served me well. So…let us begin!

Invest in people, not deals. This is just as true whether you are investing on your own as owner-operator or as a passive investor. It is easy to understand from the perspective of a passive investor. Once word gets around that you might invest in a private placement, you will get a lot of garbage thrown your way. My advice…if you don’t know who it’s coming from, delete it.Proformas and glossy offering memorandums can be made to look whatever way you want them to look. You can make swamp land in Florida look good on paper. It’s like putting lipstick on a pig. Work with people that you know, like and trust.

What if you are contemplating a new venture on your own or are thinking about buying your own apartment building? Same principal here…invest in people, not deals. In this case, you have to invest in your self. You have to take the time to learn and get the help you need from mentors and masterminds. If you are going into a dark cave for the first time, bring someone who’s been there before.

Be careful on this one—lots of gurus out there who aren’t going to help you that much. They are too busy selling their programs to be true mentors. It’s better if you find a real person willing to take you under their wing who’s got some scar tissue. To master anything new, you have to learn from mistakes…but they don’t have to be your mistakes.

Finally, remember to keep an open mind and try to learn from multiple sources. A mentor is great but should serve as a foundation for your on-going learning. Get perspectives from others. I have found that perfectly intelligent people can disagree on how things should be done and both or neither can be right at the same time.

I have missed out on some big opportunities in the past few years because I kept listening to the same people crying wolf about the economy over and over.I have found that when everyone thinks the same thing, it is usually time to second guess the assumptions that are being made.

So…please keep listening to my podcast and become an active member of the Wealth Formula Community. But also listen to others who have a different perspective. Tell me when you think I am wrong. But if you do, back it up rather than quoting another podcaster or blogger.

On my end, I will continue and try not to let myself get boxed into one kind of thinking and to continue to provide you with truly unique and useful content that isn’t just a replay of someone else’s podcast. I think we have just scratched the surface.

Merry Christmas!

**135: Is Real Estate as Good as Gold?** Dec 02, 2018
I have written and talked before about the value of gold. What is the real purpose of holding gold anyway?

Gold bugs will argue that gold is the only real money and that’s why they hoard it. I think that’s fair. Gold is money and if you just want to keep some money around gold is not a bad way to do that.

Not only is gold money, but it is essentially the anti-dollar. In other words, as the dollar continues to degenerate and dilute, gold remains constant. In other words, gold does not go up in value. It’s the dollar and other fiats currencies that go down in value relative to gold.

But is gold the only “anti-dollar”? I would make the controversial argument that real estate might actually be even more of a hedge against the dollar.

After all, owning real estate is a hedge against inflation because rents go up to counter-act the effects of diluted fiat currency. That, in turn, increases net operating income and thus…the value of the dollar value of the real estate. So it’s doing pretty much the same as gold except it is throwing off cash flow along the way.

Now here is the kicker, inflation erodes debt. So, if you financed that real estate not only are you benefiting from the hedge against inflation but the dollars you borrowed have effectively become worth less over time. In other words, if you borrowed $100K 20 years ago that is worth a lot less in terms of buying power than it is today. That loan you took way back doesn’t seem like much money anymore in today’s dollars.

If you didn’t get this part, read it again. It is critical. Inflation erodes debt. So, with real estate you are getting not only the inflationary hedge of the real asset and the cash flow, but you are effectively printing your own money by letting inflation erode your debt.

Simply put…this is why people get rich with real estate.

Now, you know that I am a multifamily guy. I invest and sponsor syndications. For a variety of reasons, if you are an accredited investor with a full-time job, this might be the easiest way to invest in real estate.

But…that’s my bias. There are others out there like my friend Dean Graziosi who was in my course, *Your Roadmap to Real Wealth*, that own thousands of houses.

The important thing is that you should listen to as many opinions as you can—preferably from people who know more than you—and make your own educated investing decisions.

In the single family home space, there are few people who know more than Marco Santarelli and he is my guest on this week’s Wealth Formula Podcast.

Make sure to tune in to this episode as he makes his case for single-family turn-key rentals homes.

Marco Santarelli is the host of the Passive Real Estate Investing show — the show where busy people like you learn how to build substantial passive income while creating wealth for the long-term.

Marco Santarelli is also the creator of DealGrader™ – a scoring system that measures the *investment quality* of a real estate investment, giving you an overall snapshot of its profitability and investment risk.

He purchased his first real estate investment at the age of 18. He successfully handled the entire rehab and property management of his first property without ever taking a course or reading a book on the subject.

Marco went on to get his real estate license and sell residential real estate for three years before leaving real estate sales to pursue other active business ventures.

Because of his love and passion for real estate, and desire to help others succeed in building their wealth through real estate investing, he eventually returned to real estate investing and founded Norada Real Estate Investments in 2003.

Today, Marco Santarelli is a licensed California real estate broker and runs a successful real estate investment firm focused on helping other investors build wealth through the power of real estate.

Shownotes:

Marco Santarelli’s background

Tightening before 2008

Seeing real estate as gold

Is it a good time to be buying single family real estate?

What should you look for in a turnkey provider?

Noradarealestate.com

**134: Global Disintegration and Robots Stealing Your Job!** Nov 25, 2018
When I was a kid growing up in the early eighties, I remember my parents opened up a savings account for me and let me take the interest out as an allowance. That was a pretty good deal for an eight-year-old.

I remember riding my bike to the bank every couple of months and showing them my bank passbook. That’s all it took to access my account at age eight! For those of you too young to remember, a bank passbook sort of looked like a passport and helped keep track of your transactions.

So, I would show the bank teller my bank passbook and I would ask her (always a woman) to give me all of my interest in cash. Invariable, she would give me about $20 every time I went. I wasn’t allowed to touch the principal and I have no idea how much money was in there.

This was the eighties with double-digit interest rates so I guess if I was pulling out about twenty bucks every couple months, you can probably do the math. If I did the same thing with my kids today, they would probably be pulling out a nickel.

Anyway, somewhere along the line, bank tellers stopped dispensing cash and the passbook disappeared—but the bank tellers did not. I say this because that was a genuine fear that people had with the advent of the ATM. They thought the ATMs would steal human jobs.

As it turned out, the ATMs ended up doing the simple work of dispensing cash and the tellers just focussed on the more complex stuff and everyone was happy. The moral of the story is that every time there is a new technology, it doesn’t mean the robots are going to steal our jobs. It just means that our jobs might look different.

This is particularly important to understand right now as we see artificial intelligence advancing at a rapid pace. What does a world with advanced AI and blockchain look like? Driverless cars? Equity markets without investment bankers? Who knows. But I am confident that we will continue to find things for us people to still do. It will just be different. Maybe I’m overly optimistic but I look back on human civilization and realize that we are incredibly good at adapting to our own new realities.

In 1798 Thomas Malthus published *An Essay on the Principle of Population*. In short, his theory was that human populations were going to outgrow our food supply. From where he stood, that might have been the case but it didn’t take into account our technological advancements in agriculture that made it possible to feed an ever-expanding human population. Similarly, I’m hopeful that our ingenuity will bail us out of some of the other challenges we face today like sovereign debt and global climate change.

Technological advancements since the advent of the internet are accelerating at a lightning pace. In the meantime, we face an increasingly insular world of nationalism and economic inequality that is more reminiscent of the early 20th century that ultimately culminated into the great wars. How all this ends up is anyone’s guess but one thing’s for sure. We live in interesting times (an old Chinese Curse).

My guest on this week’s Wealth Formula Podcast is well versed in all of the issues that I have discussed here including macroeconomics and technology. He looks at the problems of today with knowledge of the past and a keen insight into our future. His name is Diego Zuluaga and this was one of my favorite conversations on Wealth Formula Podcast so make sure not to miss it!

Diego Zuluaga is a policy analyst at the Cato Institute’s Center for Monetary and Financial Alternatives, where he covers financial technology and consumer credit. Before joining Cato, Zuluaga was Head of Financial Services and Tech Policy at the Institute of Economic Affairs in London. While at the IEA, he authored papers on the social value of finance, the regulation of online platforms, and the taxation of capital income, among others. His work has been featured in print and broadcast media, such as the *Times*, *Newsweek*, and the *Daily Telegraph*. Zuluaga is a prolific public speaker as well as a former lecturer in economics at the University of Buckingham.

Originally from Bilbao in northern Spain, Zuluaga holds a BA in economics and history from McGill University, and an MSc in financial economics from the University of Oxford.

Shownotes:

Diego Zuluaga’s background

The forces that traditionally drive disintegration and what’s going on today

More economically driven than other factors

Are automatic robots really taking over our jobs?

The ATM Scare

Diego’s outlook of the future

Thoughts on blockchain

Should cryptocurrency be regulated

The Howie Test

Learn more about Diego Zuluaga

cato.org

**133: Spies, Lies, and Leaks with Valerie Plame** Nov 18, 2018
Is it just me or does politics these days resemble a reality television show? It’s crazy. Take a step back for a moment. Regardless of your political preference, you have to admit that the last two years have been unprecedented.

Remember when having an affair was enough to end a political career? Now, we have the president of the United States paying off porn stars and playboy bunnies!

And last week we had the midterm elections and the drama that surrounded all of that. Now that the House of Representatives is in the hands of the Democrats, Donald Trump will almost certainly see a flurry of investigations and potentially subpoenas in 2019—a great way to end season two of the Trump presidency! No one is going to tune out now!

One of the things I’m most curious about “next season” is what happens with this whole Mueller probe into Russian interference and questions of collusion. Both Democrats and Republicans in Congress seem to be trying to protect the sanctity of the investigation.

I certainly hope they do. While it does seem like the investigation is taking quite a long time, I think it is in the best interest of the country for the findings to be released to the American people. If the president is innocent, then he should have nothing to fear and I don’t think it’s in his best interest to attack the intelligence community in the meantime.

I think it’s important to remember that members of the FBI and CIA are public servants. They keep us safe. In my view, attacking the intelligence community is like attacking the military.

These people are serving our country and it is important to remember that. To demonize them is un-American.

Speaking of our intelligence community, I’ve got a very interesting show for you to listen to as we head into Thanksgiving—it’s an interview with Valerie Plame. Does that name ring a bell? Remember the spy who got outed by the Bush administration? Yep…that’s her! This will be a fun one for the holiday week so make sure you tune in.

A former career covert CIA operations officer, Valerie Plame worked to protect America’s national security and prevent the proliferation of weapons of mass destruction, in particular, nuclear weapons. During her career with the CIA, Valerie managed top-secret covert programs designed to keep terrorists and rogue nation states from acquiring nuclear weapons. This involved decision making at senior levels, recruiting foreign assets, deploying resources around the world, managing multi-million dollar budgets, briefing US policy-makers, and demonstrating consistently solid judgment in a field where mistakes could prove disastrous. She was also involved in covert cyber operations and counterterrorism efforts.

Valerie sits on the boards of Global Data Security, a cybersecurity company that safeguards digital data streaming and extends that protection to email and attachments, and Starling Trust, a predictive behavioral analytics company that interprets and forecasts behavioral trends. She also serves on the nonprofit boards of The Ploughshares Fund, Global Zero, the United Way of Santa Fe County, and Postpartum Support International. Valerie is affiliated with the Santa Fe Institute, a trans-disciplinary scientific think tank created by two Nobel Prize winners to address the most compelling and complex problems in the world today.

Valerie has done extensive public speaking throughout the country and internationally on cybersecurity issues, national security, nuclear proliferation, women in intelligence, and the NSA revelations. She has written for many national publications including Time, Newsweek, CNN, The Daily Beast, and The Huffington Post.

Valerie is the author of The New York Times best-selling memoir Fair Game: My Life as a Spy, My Betrayal by the White House, which was released as a major motion picture of the same name starring Sean Penn and Naomi Watts. Along with Sarah Lovett, she has published the well-received fictional spy thrillers Blowback and Burned.

Shownotes:

Valerie Plame, former CIA

What was Valerie doing during 911

What led up to her Identity leak?

What is a deep state? Is there really such a thing?

What can we do for the next administration

More on Valerie Plame

valerieplamewilson.com

spyseminars.com

**132: Investing in the Internet… 2.0** Nov 11, 2018
Remember ARPANET?

There’s a good chance you don’t. It was a precursor to the internet that essentially allowed researchers to access each other’s data.

It was actually a revolutionary technology that, as you know, ultimately led to the creation of something that fundamentally changed the world.

With the rise of the internet and all the companies built on top of it, a lot of people made a lot of money quickly. During the burst of the dotcom bubble, a lot of people also lost a lot of money.

People like to bring that dotcom bubble up all the time to show the classic fall from grace of a new asset class—just like tulip mania in early 17th century Europe, right?

Well, not really. Tulips never really recovered. On the other hand, two of the first trillion dollar companies in the history of the world, Amazon and Apple, arose from the ashes of that dotcom bubble.

If you were lucky enough to ride the wave of those companies all the way up, you’d be a very wealthy person today. Easier said than done, right?

So, why do I bring this up today? Well, I think distributed ledger technology is at a similar phase in its development to ARPANET in the 1980s and I am pretty darn sure that when the dust settles on this one, the winners will come out at least as wealthy as the early internet investors.

The biggest problem blockchain projects have right now is that they are not user friendly for most people. Believe me, as someone who is relatively competent around computers, it’s still a challenge with multiple storage wallets, software and hardware.

Wide scale technological adoption of distributed ledger technology cannot happen until it’s easy to use for EVERYONE. When that happens, all of the big money will have already been made by early adopters and investors.

So, if you are not technologically savvy but want exposure to this “Internet 2.0” while there is still meat on the bone, how do you do it? After all, like I said before, it’s not that technically easy to custody this stuff on your own. And even technologically savvy people really don’t know for sure what projects will take off and become the Apples and Amazons of the future.

Well, let’s try to take a lesson from history. Let’s say it’s the early nineties and you can either try to pick a single stock from a myriad of dotcom companies ranging from Amazon to pets.com or invest in an index tracking the the top ten biggest tech companies by market capitalization for the next 10-20 years. Which option gives you a better chance of making money?

Unless you are REALLY GOOD at picking stocks, the index obviously would give you a better chance of success. An index of the top ten tech companies during the rise of the internet would have included Amazon and Apple in their relatively early days and you would have done quite well.

So, let’s fast forward to the current tech inflection point—blockchain and distributed ledger technology. Do you know which projects to pick? Do you even know how to buy this stuff? Well, what if we could just use our regular old US dollars to invest in the top ten crypto projects by market capitalization and just ride up that index without ANY technical skill required?

Well, that’s exactly what Bitwise Investments allows you to do. If you want to invest in digital assets but find it too daunting to move forward, you will NOT want to miss this interview with Bitwise Investments founder and CEO, Hunter Horsely.

Hunter Horsley

Previously Product Manager on monetization at Facebook and Instagram. Received his BS in Economics from the Wharton School of the University of Pennsylvania.

Shownotes:

Hunter Horsley’s background

Big institutes getting into cryptocurrency in 2018

What’s holding back the investors

What’s the cost if I DON’T invest

Bitcoin vs everything else

Bitwise

Hunter’s typical investors

Bitwiseinvestments.com

**131: Buy Notes or Invest in a Fund?** Nov 04, 2018
When I go back to some of my earliest interviews, I am always shocked at how my opinions have changed over just a couple of years.

When I first started Wealth Formula Podcast, I was less sophisticated than I am now. I was being overly pessimistic about the economy just like other podcasts in the real estate and alternative investing space and I was interviewing people who were raising capital without much due diligence on the offerings themselves just because what I thought they were doing was interesting.

Since then, I have gotten a lot smarter and more measured in my opinions. I have expanded my own network to people with very different perspectives from those who I started out following.

Furthermore, I am **A LOT** more selective about who I will have on the show as a guest. You see, what I didn’t realize early on was that my listeners were seeing my interviews with individuals as a stamp of approval of their offerings.

That, of course, was not necessarily the case. Certainly I have invested with *a few* of the people I had early on in the show, but highlighting a “good investment” was never my intent. Instead, I was trying to educate.

When I figured this out, I mostly stopped interviewing people who were raising capital as I did not want the appearance of an endorsement—*especially* if I did not have one to offer!

Instead, most of the shows we do now tend to feature economists and financial strategy types, thought leaders, and miscellaneous topics that I think might be useful to you (ie. Behaviorceuticals!). The specific investment talk typically happens in my accredited investor club.

Now, If I have someone on the show who is raising capital, it will typically be someone or something special. Again, that doesn’t mean I’m investing with them, but the interview will have more value then just why you should invest with someone as many podcast interviews seem to do these days. Believe me, I get bombarded with people wanting to be on my show every day.

Jorge Newberry Newberry and American Homeowner Preservation raise capital. Jorge was one of the first guests ever on Wealth Formula Podcast. Back then, he had no idea that he was talking to about 20 people! He had this business that I thought was the coolest one in town called American Homeowner Preservation and I had to tell everyone about it.

Well, fast forward a few years and about a half million downloads later, AHP became a sponsor of the show and Jorge’s business got so big that he had to hire a CEO.

Many of you invested in his last multimillion dollar fund including myself and his next one is about to launch.

To talk about that and to get some serious incite into the non-performing note industry, I have Jorge back on the show today alongside his newly hired CEO, Deann O’Donovan.

I’m also going to tell you about a trip I took out to Chicago and my experience learning about the note investing business from Deann and her team. You’re not going to want to miss this episode!

Jorge P. Newbery Is On A Mission To Help Americans Crushed By Unaffordable Debts.

He is Founder and CEO of Debt Cleanse Group Legal Services, a nationwide legal plan to help consumers and small businesses get out of debt without filing bankruptcy. He is also Chairman of American Homeowner Preservation LLC and AHP Servicing LLC. AHP crowdfunds the purchase of nonperforming mortgages from banks at big discounts, then shares the discounts with struggling homeowners. AHP Servicing LLC brings social responsibility and a willingness to do the right thing to mortgage servicing, an industry often devoid of caring, compassion and basic human decency.

A 2004 natural disaster triggered the financial collapse of Newbery’s former business, leaving him with $26 million in debts he could not pay. Newbery rebuilt himself through AHP, sharing what he learned from his challenges to help families at risk of foreclosure stay in their homes.

He authored Burn Zones: Playing Life’s Bad Hands, in which he chronicled his rise and fall; Debt Cleanse: How To Settle Your Unaffordable Debts For Pennies On The Dollar (And Not Pay Some At All) to help families resolve their unaffordable debt; and Stories of the Indebted sharing the struggles faced by everyday Americans burdened by debt. He speaks regularly on debt, housing, and finance.

Shownotes:

How did the fund from our last show turned out?

DeAnn’s background

What is “notes”?

Approaches to buying notes

First lien vs second lien

Where can an investor buy notes?

What to look for on a tape

The due diligence process

AHP servicing

Cycle resistance

AHP’s next offering

Ahpservicing.com

Debtcleanse.com

**130: Willpower Doesn’t Work with Ben Hardy** Oct 28, 2018
Most people aren’t trying to become ultra-wealthy. They just want to feel safe and to feel some level of freedom from the shackles of the daily grind.

You see, the majority of us have one source of income and it’s usually being paid by someone else. That is not a recipe for stability. No matter what you were told while you were growing up, there is no such thing as a safe job.

The only reason employees feel job security is because they don’t typically have transparency to the company’s financials. Unfortunately, what you don’t know *can* hurt you.

To be clear, I am not here to inspire you towards entrepreneurship. In fact, small business owners have their own landmines to avoid and they can actually be even deadlier in the financial sense.

Let me give you an example. One of my best friends started an IT business about 9 years ago and it was going pretty well for him. He kept dumping money back in the business and the company kept growing. He was modest in what he paid himself and his only investment was his company which seemed like a good move at the time.

A couple years ago, he was thinking about selling the company and retiring into public service (he is one of the nicest guys I know).

Had he done that, he would have been all set. He didn’t need much to live on being the simple guy that he is and he isn’t greedy like me. A liquidation event would have set him up well for the rest of his life.

But he didn’t do it. Instead, he kept pouring money into his business and, over the past year or so, his business performance started to decline quickly. Yet, like a faithful captain, he manned his ship even as he saw clear as day that it was heading toward an iceberg.

He did what many small business owners would do in that situation. He tried to save his business and dumped everything he had into in attempts to salvage it.

But he failed and because he spent his last dollar trying to save a sinking ship, he went down with it. Now he’s 44, broke, and starting over.

In this case, having access to the financials was not a blessing. It was a curse. His employees didn’t know what was going on and when he had to lay them off at least they had socked their money away. He had the curse of knowledge and simply made the wrong choice.

So, as I said, I’m not here to sell you on entrepreneurship. It has its own dangers and is not for the faint of heart. For my friend, this situation was particularly harmful because of one simple concept: single point failure.

You see, as an employee, you get your paycheck and hopefully you invest wisely. Hopefully you are trying to buy other streams of income to become increasingly independent on your day job (aka single point of failure).

My friend’s small business was his income *and* his only investment. When it went down, it was disastrous.

I had a similar experience back in 2012 when the only business I owned had some cash flow problems and my investments were not nearly robust enough to support my family and me. Luckily, I survived and got smarter. That’s why I started my second, third, and 4th business—because I never wanted to be in a position of single point failure again.

Over the past 6-7 years, like clockwork, one of those businesses has had a bad year. But luckily the others kept me flourishing. Furthermore, the money I was making from these businesses was not being used just to expand the business. Most of it was not being used to acquire assets and other streams of income.

I get paid from a lot of different sources today and it makes me feel a lot more comfortable. But to tell you the truth, I never feel safe. That’s part of what keeps me pushing. That’s what keeps me looking for the next opportunity. I joked earlier that I was greedy. But in reality, I’m just afraid.

A lot of people would look at my financials and say I was being paranoid. Maybe I am. But I remember seeing a television clip on billionaire Jerry Jones, owner of the Dallas Cowboys, and he said the same thing. It is FEAR that keeps him motivated.

I bring these stories up because I think it is critical to assess your own situation. Are you in a position where you could succumb to single point failure? What are you doing about it? The time to change that is now, *not*when things are bad.

For me, it was that understanding that made it possible for me to step out of a seven figure per year income generating small business, hire someone else to do the work and take a huge pay cut until my next business started throwing off money. You can’t will your way into financial stability. It takes a deep reflection on your situation and massive action.

When you set yourself up for massive action, it’s a lot easier. In my case, I wrote a resignation letter to my COO. She thought it was a joke until I literally told her to stop scheduling any more patients for me. I had to physically take myself out of that situation to get my desired outcome. It wasn’t going to happen if I kept doing what I was doing.

My friend Benjamin Hardy said it best: Willpower Doesn’t Work. That is the title of his book and that is what we will be talking about on this week’s Wealth Formula Podcast.

BENJAMIN HARDY is the foster parent of 3 epic kids. He is pursuing his PhD in Industrial and Organizational Psychology at Clemson University. His research focuses on the psychological differences of actual entrepreneurs vs. wannabe entrepreneurs.

His work has been featured at Psychology Today, Huffington Post, Business Insider, New York Observer, Thought Catalog, and others.

Shownotes:

Why did Ben Hardy write his book

Environment beats Willpower

Untrain yourself

The ability to change

More on Ben Hardy

https://www.benjaminhardy.com/

**129: Trust Fund Rats and Behaviorceuticals** Oct 21, 2018
It’s very hard to become an entrepreneur without any life experience. I know it seems like that’s the way it works. After all, look at Mark Zuckerberg and the other teenage tech superstars out there who did it shortly after puberty.

But in reality, most of the entrepreneurs that I know spent some time working for others after school learning the ropes until, one day, they found an inefficiency in the system that became a business idea. Or, maybe they just realized that their boss wasn’t that smart and was making a lot more money than them just by being the boss.

I’ve seen it over and over and it makes sense. We learn what we are exposed to and if we aren’t exposed to it, there is no way to learn about it. So, the best chance you have at success is to be exposed to a lot of things.

One of my good buddies has a multimillion dollar tile company. Why? He didn’t dream of owning a tile company. He just worked for a guy with a tile company and thought he could make more money starting his own thing rather then working for someone else. He was right.

Another friend worked for a Canadian company that bought energy in Canada wholesale and sold it retail to other countries. He learned the business and decided to do it on his own. He makes A LOT of money now.

Then there is me. I worked for a cosmetic surgery company right after residency and realized that it wasn’t a very difficult business model to understand. Advertise big, lots of procedures, and profit. Think hair club but with facelifts. I figured I’d try something similar and it worked!

In all of these examples, it was just a matter of experience. All three of us are entrepreneurs, we just happened to be exposed to different things. How much we all make from our businesses actually depends a lot more on the business model that we each copied than the execution. Makes me wish I worked in the energy business in Canada as a young man.

Anyway, the moral of the story is that experiences matter. The more experiences you have, the greater exposure you have to all the different nooks and crannies that life has to offer…business or otherwise.

So, putting this all in perspective, what is the take home message? Well, get out there and learn something new for one thing. Do some things you’ve never done.

Also, let me tell you how this realization affects the way I see education and the way I guide my kids. They are little but this is what I’ll tell them someday.

A broad academic education is important. You can never go wrong with an interdisciplinary perspective.

Furthermore, after school, never look at your job as work. Look at it as paid education and quit when you have no more to gain intellectually. You don’t want to be one of those people who stays in the same job for 20 years and complains about it for 18.

This advice is based on my own life experience and from the life experiences of others who I know. But it is also based in science. It is based on the way our brains learn and adapt and the more aware we are of these patterns, the more we can guide ourselves towards success.

No one knows more on this topic then my guest on this week’s Wealth Formula Podcast, behavioral neurobiologist Dr. Kelly Lambert. Make sure to listen to this show. It will be well worth your time and your brain will thank you for it!

Dr. Lambert received her undergraduate degree from Samford University in Birmingham AL (majoring in psychology and biology) in 1984 and her M.S. and Ph.D. in the field of Biopsychology from the University of Georgia in 1988. After spending 28 years at Randolph-Macon College in Ashland VA where she served as the Macon and Joan Brock Professor and Chair of the Psychology Department, Co-Director of Undergraduate Research, and Director of the Behavioral Neuroscience Major, she recently joined the faculty at the University of Richmond as Professor of Behavioral Neuroscience. She enjoys teaching courses such as Behavioral Neuroscience, Clinical Neuroscience, Comparative Animal Behavior, Neuroplasticity and Psychobiology of Stress. Dr. Lambert has won several teaching awards including the 2008 Virginia Professor of the Year.

Shownotes:

Neuro Behavioral Science

Which Quality means success?

Behaviorial-cueticals

Lifestyle is important

Are Blue Collar workers more healthy?

Kelly’s trustfund rats

Well Grounded by Kelly Lambert

Kellylambertlab.com

**128: The Roaring 2020s and the Depression of 2030** Oct 14, 2018
Beware of *Chicken Little*. The financial podcast space is small and we often tend to start believing each other and then spreading those same opinions to our listeners as facts.

General sentiment in the alternative investing communities is bearish right now. The problem is, that has been the case for the last 3-4 years. And guess what? Contrary to the opinions of the *Chicken Little* crowd, people who invested in real estate and equities over the past few years have done very well and the United States has *not* turned into Venezuela.

That’s not to say that I am personally a permabull. Like most people who follow the economy, I do now expect a downturn of some kind. Even Fannie Mae Economist, Doug Duncan, thinks that’s going to happen. He’s as mainstream as it gets.

But what does that downturn look like? Is it blood in the streets or is it a recession in the industrial sector of the economy that we learn about two months after the fact? After all, most downturns look nothing like 2008.

So what is an investor to do? Well, I’ve said it before and I’ll say it again. Keep investing but be smart about it. Now is not the time to invest with a friend who’s trying his hat at the real estate game for the first time. Stick with high quality assets and, if you are passive investor, stick with high quality operators with good track records. Consider hedging with non-correlated investments like life settlements.

Don’t over leverage and keep some liquidity on the sidelines—preferably through a Wealth Formula Banking strategy that will keep your money working for you while you wait. Hedge your position but don’t act like the sky is falling…yet.

As I said, it is extremely difficult to predict the financial future but one private economic firm has done it with extraordinary accuracy since the 1940s during which time they have been right almost 95 percent of the time. They predicted the 2008 meltdown 3 years before it happened and they predicted all of the upside we have seen over the past decade.

Want to know what they are predicting next? I sure do and I’m taking it very seriously. If you want to know why, make sure to listen to this week’s episode of Wealth Formula Podcast as I interview Dr. Alan Beaulieu of ITR Economics.

Alan Beaulieu

One of the country’s most informed economists, Dr. Alan Beaulieu is President and a principal of ITR Economics. Since 1990, he has consulted across North America, Europe, and Asia, optimizing companies’ forecasts and planning to increase profits through his mastery of business-cycle trend analysis. Alan also serves as Senior Economic Advisor to numerous US and international trade associations.

Alan has coauthored, with **Brian Beaulieu,** the books **“Make Your Move,”** **“Prosperity in the Age of Decline,”** and **“But I Want It!”** He has also penned numerous articles and makes up to 90 appearances a year. Alan’s keynotes and seminars have helped thousands of business owners and executives capitalize on emerging trends.

Shownotes:

[11:30] Alan Beaulieu and ITR Economics

[17:00] 2008 in 2005

[18:30] Is the economy influenced by the insiders?

[20:30] Are we slowing down?

[27:00] 2030

[34:00] China

[39:00] what shouldn’t you hold on to?

[40:00] More of Alan

*But I Want it! https://www.itreconomics.com/store/books/but-i-want-it*

*Prosperity in The Age of Decline: How to Lead Your Business and Preserve Wealth Through the Coming Business Cycles* https://www.wealthformula.com/resources/

Itreconomics.com

127: Tom Wheelwright and Tax Free Wealth 2.0 Oct 07, 2018

Never try to convince a fool that he’s a fool. He won’t believe you anyway.

I hate to say it, but that’s why I never talk money with people unless they bring it up with me first. That’s what’s great about being a podcaster. People CHOOSE to listen to you or to be on your email list.

In fact, I recently invited people to attend a live webinar on some wealth strategies that I have studied extensively and am close to executing on. I thought it would be fun to have people see how I look at things in real time and add their feedback.

After all, I don’t know it all. In fact, the reason I am as successful as I am is because I DON’T PRETEND to know it all. I try as much as possible to look at every opportunity with an open mind and poke holes in it.

Curiously, last week, I got an email from someone in telling me that all of the things I was looking at were “garbage”. Of course I welcomed the dissent and invited him to join the webinar and explain why. He wrote back that he “espoused” the teaching of the White Coat Investor and Physician on Fire who did not like these products and, therefore, he would not attend.

I wrote something snarky back which I should not have. Instead, I should have remembered, “never try to convince a fool that he’s a fool”. By the way, that product I was talking about is used by most of my nine figure net worth friends who might know a thing or two that doctors might not. It’s similar to Velocity Plus.

And to be clear, I’m not saying that disagreeing with me is tantamount to being a fool. What I am saying is that “espousing” others in the world of finance is stupid. I don’t want any of you to follow all of my words blindly. I want you to challenge it.

If I say I don’t like something, tell me why I should. If I say something is a great deal, tell me why it’s not. Listen to what others have to say and process for yourself. If you don’t agree with me, don’t just say you play for a different team and send me an article that doesn’t even pertain to the product I’m talking about!

I don’t want lemmings like this in my community. Please unsubscribe from my list! Go die broke like the rest of them. I didn’t come to you, you came to me.

The stupidity drives me crazy I have to tell you. Unfortunately, it’s usually the doctors who think they know it all. It’s from all that positive reinforcement we got in school for getting A’s. It makes us believe we are smarter than we are. The truth is, when it comes to money, most doctors could use a boost to the old financial IQ.

I get fired up about stuff like this. You know what else I get fired up about? Taxes! Just like financial strategies, everyone loves to tell you that you “can’t do that” when it is clear as day in the tax code that you can.

I remember my first CPA out of residency who was supposed to be conservative and who most of the doctors I knew used. I might as well have used turbotax.

Then I learned of Tom Wheelwright and it completely changed the way I view not only taxes, but business and investing and it is a pleasure to have him back this week on Wealth Formula Podcast. Don’t miss it!

Tom Wheelwright, CPA is the visionary and best selling author behind multiple companys that specializing in wealth and tax strategy. Tom is also a leading expert and published author on partnerships and corporation tax strategies, a well-known platform speaker and a wealth education innovator.

In Tom’s best selling book Tax-Free Wealth, Tom shows entrepreneurs and investors how to build massive amounts of wealth through practical and strategic ways to permanently reduce taxes.

Shownotes:

[13:30] Buck introduces Tom Wheelwright

[16:00] Employees got hammered

[18:30] The 20% tax deduction for LLC

[23:30] Tax your way to wealth

[30:00] How it works for the bigger companies

[34:00] Wealth Ability

wealthability.com

Bonus Content – Consensus Network: Cryptocurrency News & Education Sep 23, 2018

Visit consensusnetwork.io for the full episode and more crypto content!

**125: Wealth and the Deathbed Framework** Sep 23, 2018
I’ve learned a lot of stuff in my life—from the principles of neurosurgery to the intricacies of cryptocurrency.

Some of this stuff is pretty complicated…at first. But, I’m going to let you in on a little secret if you don’t know it already.

Just about everything that appears complex at first can be broken down into simple components.

If I have any God-given gift, it is the ability to simplify. And thank God for that because I’m not smart enough to understand anything that is truly complex.

Any time I try to learn something new, I just try to break it down into simple little pieces. Eventually I get it. That is my framework for learning.

I like frameworks. Creating frameworks helps me simplify everything. Otherwise, I would be overwhelmed with the decisions that come up in life all the time.

Let me give you a couple of examples of frameworks that I use that help me from losing my sanity.

The first one is make tomorrow’s decisions today. That’s why I moved to Santa Barbara. We had a gorgeous home in the Northern Suburbs of Chicago and great friends. Why move?

Well, I noticed half the houses on my street were empty in the winter. All the retirees were in Florida. Would that be me in 25 years? With the kids out of the house in other states and subzero temperatures, would I want to live in Chicago anymore?

The answer was no. Instead, I decided that if I just moved to where I might want to retire someday today with my young family, my wife and I wouldn’t have to move and make new friends in our 70s. And…even better, the kids might want to come home and visit us!

Another framework that I use to guide my life is the deathbed framework. This one is particularly useful.

Let me give you an example of how it works.

A couple weeks ago, I got an email from a college student who wanted to talk to me about whether or not he should go to medical school. I get this one a lot and I have a standard answer that seems to be pretty useful.

I ask, “If you don’t go to medical school, will you regret it on your deathbed?” After all, that’s really the only reason to become a doctor these days. It sure ain’t the money!

I have, in hindsight, asked myself the same question. That is, if I knew then what I know now, would I still have gone to medical school.

For me the answer is yes. Even though I don’t practice anymore and I make a lot more money than just about any practicing physician that I know, I’m glad I did it. If I didn’t,

someday on my deathbed, I would wonder what it would have been like to be a doctor.

This framework might seem over-simplistic. After all, what about the mission in life thing and all those years you would have to put into it? Well, I would argue that all of those other variables just complicate the question.

Don’t try to justify what you want if you really want it because, whether it’s rationale or not, you will regret not going for it. Some decisions are just visceral.

The deathbed framework is actually very practical and broadly applicable in many circumstances.

For instance, I’m not one to spend a lot on myself. I like giving people things because I enjoy the experience of making them happy.

And when I give things to people, my preference will always to provide and experience rather than a thing. For the last several years, I’ve given my nephew NBA tickets for his birthday because he loves basketball.

If I gave him some mall junk, he’d enjoy it for a few minutes than never think about it again. But he will always have his memories of those games to cherish.

For me personally, some of the most vivid memories of childhood are going to professional hockey, football, and baseball games. I remember going to see the Rolling Stones and the Red Hot Chili Peppers. I remember very little about the stuff people gave me over the years.

The experiences are what I will take to my deathbed and those are the things, in my opinion, that are important to splurge on a little bit and start collecting as they will always be with you.

Experiences, in the end, are the ultimate currency of a life well lived.

My guest on Wealth Formula Podcast today has had enough interesting experiences for multiple lives and has given others even more.

His name is Steve Sims and on this week’s Wealth Formula Podcast we talk about how his company might be able to enrich your experiential life.

Steve Sims is the visionary founder of Bluefish: the world’s first luxury concierge that delivers the highest level of personalized travel, transportation, and cutting-edge entertainment services to corporate executives, celebrities, professional athletes, and other discerning individuals interested in living life to its fullest.

Shownotes:

[00:07] Introduction

[20:31] Steve’s Story: His trigger of inspiration

[26:05] Early Game

[29:10] Experiences Over Stuff

[34:25] Bluefish

Get in touch with Steve:

thebluefish.com

stevedsims.com

Text “uglysims” to 345345

[48:18] Outro

**124: Real Estate Millions with Grant Cardone!** Sep 16, 2018
Leverage in the form of bank debt is a double edge sword.

Obviously, consumer debt to buy things like televisions and mall junk can only be negative in the financial sense.

However, using debt to buy cash flowing assets is perhaps the single most powerful weapon we can use to create wealth and the thing that makes real estate the asset of choice for the ultra-wealthy.

The problem is that leverage is a tool that you must learn to use because, after all, a fool with a tool is still a fool.

Leverage must be deployed carefully based on the asset and the market. In 2008, banks and buyers were both over-leveraged and that created a big mess.

For borrowers, it was often the first time that they paid close attention to the fine print on the mortgages which they signed. That fine print often included loan covenants.

A lone covenant is a promise that you make with a bank to lend you money. For example, a bank may say that they will lend you 80% of the value of a property. That means you have to come up with 20 percent. That 80 percent is based on the appraisal value at the time of purchase.

So, what if your property goes down in value just because the markets dipped and the property you bought goes down in value? Well, in that case, you are violating a loan covenant.

If you are violating a loan covenant, does the bank care whether or not you are cash flowing? Not really. If they find out, they are going to ask you to cough up some more money so that you are no longer in violation of those covenants. If you don’t, you could lose the property. Now, for larger assets, periodic appraisals from the bank, maybe every 18 months, are standard. That means you can’t hide from them.

If you think that this is an unlikely scenario, I would suggest you talk to any major real estate investor in 2008. Values plummeted and regardless of cash flow, there were capital calls and people lost properties.

Few serious real estate investors argue that we are not late in the cycle. Does that mean that you should stop investing for fear of covenants? I don’t think so. I just think you have to be smart about it. It’s impossible to time out market cycles perfectly. If you sat out the last five years of investing, you’d feel pretty foolish right now.

Part of being smart later in the cycle like we are now is not to over-leverage. That means two things really. Look at the loan covenants and give yourself some cushion. If the bank is willing to lend you up to 80%, maybe you only take 70%.

The other strategy is to deleverage by creating equity in the property itself. For example, in larger assets the value of a property is determined solely by net operating income.

So, if you increase net operating income by adding value, you are increasing the value of the property. When you increase the value of the property, you are effectively deleveraging.

That is my strategy right now when it comes to acquiring real estate. Use moderate leverage and drive up net operating income. And if you can get a bank to give you favorable covenants, that helps too. But buying a property with no intention of creating additional value in this market is a little bit risky in my view.

That’s my advice for the week when it comes to real estate investing. Now, if you don’t believe me that you can build some serious wealth from leveraging real estate, listen to the guy I interviewed on Wealth Formula Podcast this week: Grant Cardone. He has made a few hundred million doing exactly that. Don’t miss it!

Grant urges his followers and clients to make success their duty, responsibility, obligation, and to **rise above outdated, unworkable middle class myths and limitations** in order to achieve true freedom for themselves and their families.

His straight-shooting viewpoints on leadership, the economy, small business, retail sales, employment, and headlines have made him a valuable resource for media seeking commentary and insights on **real topics that matter.**

Shownotes:

[00:07] Introduction

[09:45] Grant Cardone’s story

[17:19] Breaking out of Scarcity Mentality

[20:22] The Wealth Thermostat

[24:41] How much is “enough”?

[29:05] Getting into real estate

[34:01] Grant’s assessment of the current market

[38:30] Learn more about Grant Cardone

grantcardone.com

[45:13] Outro

Join our accredited investor club: https://www.wealthformula.com/join-2/invest-with-me/

**123: Invest Like a Centimillionaire with Richard Wilson!** Sep 09, 2018
Man am I tired of hearing people with a lot less money than me giving financial advice. I have to actively suppress my temper when someone forwards me an article full of misinformation that someone, that is clearly clueless and NOT wealthy, wrote on a blog!

There is a lot of know-it-alls in this financial podcasting space. My advice to you—don’t take advice from people who make less money than you.

To be clear, I am not saying don’t listen to new ideas from some young gun, but take it with a grain of salt regardless of how adamant they may seem.

Now before you think I’m acting like I am the ultimate authority on matters of wealth, let me tell you that this advice comes from a place of humility rather than conceit.

If you go through my one hundred and twenty something podcasts, you will almost certainly hear me contradict myself. In most cases, I identify and readily admit that I have changed my mind or learned something I did not know about on the air.

You see, every day I get smarter. And when someone tells me about a new concept or even asks me to revisit one that I have previously dismissed, I look at it with a fresh pair of eyes and an open mind.

If you are not willing to do that, it will be hard for you to grow both intellectually and financially. For me, I’m always looking to see what the people with more zeros on their personal financial statement than me are doing.

A good example of that is the family office industry. It is no coincidence that some of the operators I’ve introduced to my accredited investor club are groups with whom family offices invest frequently.

When you see what the family offices are doing, you are watching the centamillionaires investing habits. That is going to be a lot more impactful to our wealth than reading a blog post from a podcaster who’s never even seen seven figures.

In that spirit, I am delighted to have Richard C. Wilson back on Wealth Formula Podcast this week. He is the founder of the Family Office Club and the guy to know in the industry if you want to know what is top of mind for the ultra-high net worth.

Richard C. Wilson helps $100M+ net worth families create and manage their single family offices and currently manages 14 clients including mandates with three billionaire families and as the CEO of a $500M+ single family office and Head of Direct Investments for another with $200M+ in assets. The Wilson Holding Company is also the exclusive wine importer and a wine brand representative for Hofkellerei des Fursten Von Liechtenstein, the 600 year old vineyard owned by the princely family of Liechtenstein.

Richard is author of the #1 bestselling book in the family office industry, The Single Family Office: Creating, Operating, and Managing the Investments of a Single Family Office and a recently released book called How to Start a Family Office: Blueprints for Setting Up Your Single Family Office. Richard has his undergraduate degree from Oregon State University, his M.B.A. from University of Portland, and has studied master’s level psychology through Harvard’s ALM program while previously residing in Boston. Richard currently resides 10 minutes from downtown Miami on the island of Key Biscayne, Florida with his wife and three daughters.

Shownotes:

[00:07]: introduction

[12:27] Buck introduces Richard Wilson

[14:07] What does a home office mean?

[21:37] Investing like the wealthy

[30:22] The trust factor

[36:45] Why do we not hear about the best strategies?

[42:53] learn more about Richard

Familyoffices.com

[44:11] Outro

**122: Cash Talk with the Cash Flow Ninja** Sep 02, 2018
A few conversations I had with investors over the last week got me thinking that we need to talk about some basics again.

First of all, let’s start with why I generally prefer to own an asset (either in entirety or a fraction) as opposed to simply holding a note.

What is a note or promissory note? It’s basically a promise to pay the lender a certain amount of interest over a period of time with return of capital.

So, let’s say you loaned money to someone flipping some houses and they issued you a promissory note for 8 percent. The borrower is then allowed to keep any profits above and beyond payments to you as a lender.

Regardless of how well that property does, you get 8 percent at best.

I say at best here because understand that a promissory note, while legally binding DOES NOT guarantee that you will make 8 percent. Your promissory note is nothing more than a lien.

Hopefully it’s a first position lien and hopefully the asset value will cover the amount of debt you as the issuer lent in the first place.

After all, if you lend $100K to someone and they default, you better hope that the asset is worth at least $100K so you can sell it off and recover your initial capital.

Is that a guarantee? For anyone who thinks it is a guarantee, I refer you to all of the notes that were defaulted on in 2008.

A lot of broken promises right? If you think that all those people who made loans got their capital back, you’re sorely mistaken. There is no such thing as a guaranteed investment. Even the Securities and Exchange Commission will tell you that. Just google it.

The only asset that is considered “guaranteed” is the US Treasury and that’s another story entirely. If anyone tells you otherwise, it’s a big red flag and you really ought to run the other way.

So, if you are not “guaranteed” money and your upside is limited, why invest in debt rather then equity on any given project?

I can tell you that I will always invest in equity over debt. You have way more upside, you hedge inflation, and you get tax advantages.

Notes have none of these qualities nor are they guaranteed.

Now, I’m not against investing in notes. I’ve done it myself with people I trust. However, I never do it thinking that it is safer than investing for equity.

In fact, if I am investing in debt, I sure as hell better be getting more than 8 percent because the potential upside needs to justify the risk.

Anyway, hopefully that makes sense. I don’t do the weekly wealth widget anymore but I need to make sure I clarify things that I don’t think people are quite understanding.

We all want cash flow but be smart about your investments and look at them holistically. And, for heavens sake, if someone uses the word “guaranteed” in their offering, short of being the United States government, run the other way.

My guest on Wealth Formula Podcast today will attest to everything I’ve said. And you should take his word for it. After all, they call him the Cash Flow Ninja!

M.C. Laubscher is a wealth strategist, educator, and financial freedom fighter. He is the President and CEO of Producers Wealth and creator and the host of the popular and top-rated business and investing podcast, Cashflow Ninja.

His purpose and mission is to help producers and creators create, protect and multiply their wealth in ANY Economy without getting ripped off by Wall Street & their governments.

M.C. challenges existing societal belief systems and misinformation around concepts such as money, saving, investing, wealth and retirement.

Shownotes:

[00:07] Introduction

[08:53] Buck introduced MC Laubscher

[11:22] How does MC balance his workload

[12:37] What’s new?

[20:21] E-commerce

[23:27] How to get started?

[36:12] Guaranteed money?

[52:07] Outro

**121: Are We Really a Capitalist Society? A Harvard Professor Explains.** Aug 26, 2018
When I was in high school, I remember taking my first political science course. That was the first time I learned the political meaning of *conservative* or *liberal.*

Up to this point, I had viewed those words as synonymous with Republican or Democrat. Of course that wasn’t quite the same thing.

A conservative, I learned, was someone who wanted smaller government, less regulation and emphasized the importance of individual civil liberties.

I got the small government part right—that was the Republicans. But the American Civil Liberties Union was, from everything I gathered on the news, an institution of the Democrats

Somewhere along the line, *conservative* in political slang became very different from *conservative* by political definition. I guess that’s not hard to understand now. Look at free trade.

It used to be that tariffs and trade wars were loathed by Republicans. Now, Donald Trump is the champion of global isolationism. Regardless of what you think of Donald Trump, his ideology is not that of Ronald Reagan—the quintessential conservative icon of the 1980s.

So with ideology in each party being as fluid as it is, it seems odd to me that the politicians aren’t switching parties all the time. How could they be part of a party that no longer represents their beliefs?

What is stranger to me about American politics these days is that it is becoming more and more polarized. Most of this country is center-right. But the primary system that brings in the candidates caters to the most extreme elements on either side.

For those of us standing rationally in the middle, that gives us little in the way of politicians that accurately reflect our collective sentiments as a nation.

Personally, I have grown further in the direction of libertarian ideology. My intent is never to be very political on this show but I have probably leaked out some of my sentiments in the past.

But rather than keep them a dirty little secret, I thought that the better approach might be to educate you on something in which I believe: libertarianism.

Now you may agree or disagree with the opinions in this week’s show, but you probably should listen to it. After all, everyone in Silicon Valley claims to be libertarian these days. You might as well know what the heck they mean by it.

To educate you on the matter, in true Wealth Formula fashion, I went out and got a someone with some street credibility to teach you. Make sure to listen to this week’s Wealth Formula Podcast with Harvard economics professor, Jeffrey Miron.

Jeffrey Miron is director of economic studies at the Cato Institute and the director of undergraduate studies in the Department of Economics at Harvard University. His area of expertise is the economics of libertarianism, with particular emphasis on the economics of illegal drugs.

Miron has served on the faculty at the University of Michigan and as a visiting professor at the Sloan School of Management, M.I.T., and the department of economics at Harvard University. From 1992-1998, he was chairman of the department of economics at Boston University. He is the author of *Drug War Crimes: The Consequences of Prohibition* and *The Economics of Seasonal Cycles*, in addition to numerous op-eds and journal articles. He has been the recipient of an Olin Fellowship from the National Bureau of Economic Research, an Earhart Foundation Fellowship, and a Sloan Foundation Faculty Research Fellowship.

Miron received a BA, magna cum laude, from Swarthmore College in 1979 and a PhD in economics from MIT in 1984.

Shownotes:

[00:07] Intro

[09:51] Buck introduces Professor Jeff Miron

[11:27] Economic Libertarianism

[12:56] Social Libertarianism

[14:09] Why is Libertarianism drifting away from us?

[21:49] Capitalism without bankruptcy is like a religion without hell

[29:31] Professor Jeff Miron’s policy change suggestions

[32:18] Learn more about Professor Jeff Miron

Cato.org

Libertarianism, from A to Z

[33:53]Outro

**120: Prefrontal Investing with Dr. David Phelps** Aug 19, 2018
The prefrontal cortex is the CEO part of the brain. It is involved with personality, decision making, and moderating social behavior including impulse control and risk taking.

You may not be surprised to learn, therefore, that this structure matures late in life. One study found that the prefrontal cortex may continue maturing late into your 40s.

The brain of a teenager typically has a poorly developed prefrontal cortex—this is reflected in behaviors that you might have experienced yourself back in the day.

I know I look back and think about some of the things I did and wonder how I made it out alive.

It’s curious to me that it takes so long for this part of the brain to develop—after all… it’s where all the wisdom resides. Wouldn’t it be useful as a teenager?

Part of me thinks that prefrontal cortex development into our late thirties and early forties is designed to compensate for our relative physical decline.

In other words, we find other ways to be useful to the tribe since we can’t hunt or reproduce with the same efficiency.

The tribal elders have wisdom in the form of a well-developed prefrontal cortex and it gives the rest of the tribe a reason to keep them around rather then pushing them off a cliff.

Whatever the evolutionary purpose for this late development of wisdom in our lives, I can say with some certainty that I have felt that prefrontal phenomenon palpably in my own life.

I have become wiser in the last 10 years and I actually feel smarter today at 44 than I ever have in my life. And to be clear, I’m not sure if I could study with the same intensity that I did in 20 years ago in medical school and I’m not sure if my recall would be quite as acute.

When I say that I am smarter, I mean that in very broad terms. I see the world with far more clarity than I did in my 20s. I am a very different person.

For me, the most profound change in my thinking has been the recognition of traditional paradigms and conventional wisdom. It used to be the case that I never really questioned anything—it never occurred to me to do so.

These days, I like to examine my own belief systems and am not afraid to challenge them. That is very liberating.

It does take some courage to do so. Our belief systems are shaped throughout our life and are so deeply ingrained in us that sometimes, when we start doubting them, it feels like we are doing something wrong.

Of course belief systems permeate all facets of our life and Wealth Formula is a show about wealth so let me use a relevant example in the investing world.

I talk to accredited investors every day and I often hear them talk about being “conservative investors.”

What does conservative investing mean? Well, conventional wisdom has drilled it into us that conservative investing is to maximize your 401K or IRA and let a wealth advisor put you in a portfolio of mutual funds.

That is, after all, what we are taught is the conservative thing to do, right? But ask yourself the question, why is this conservative?

Mutual funds have yielded an average of about 3 percent yield over the past 3 decades. With inflation moving at around 2 percent, that gives you about 1 percent real growth in your money every year. It would therefore take you about 72 years to double your money.

What makes that conservative?

Of course you could also just keep your money in the bank and make less than 1 percent. Is that conservative? Well, with inflation, you would then guarantee that you would lose money over time.

What makes that conservative?

Meanwhile, Wall Street has labelled real estate and other tangible investments as “alternative”. What comes to your mind when you think of “alternative”. Blue hair? Pierced body parts?

Indeed, the language is there for a purpose. It’s their to guide your thinking. After all, owning real estate and other tangible assets is what the richest families in the world have been doing for centuries—far before there was every an equity market like the New York Stock Exchange.

So why are we supposed to be scared of it? Why do wealth advisors, and your own family, tell you that you are doing something wrong when you start talking about investing in anything outside of Wall Street?

There is no good reason. It’s just conventional wisdom and it’s wrong. Your mature prefrontal cortex should recognize that.

My guest on Wealth formula Podcast this week is full of wisdom in the financial realm. He also started out as a dentist and, like me, has no formal financial training.

His name is Dr. David Phelps, DDS. He’s a smart guy and worth listening so don’t miss this episode!

**David Phelps, D.D.S.**
Owned and managed a private practice dental office for over twenty-one years. While still in dental school, he began his investment in real estate by joint-venturing with his father on their first rental property in 1980. Three years later, they sold the property and David took his $25,000 capital gain share and leveraged it into thirty-one properties that later produced $15,000 net cash flow.
Multiple health crises suffered by his daughter, Jenna (leukemia, epilepsy and a liver transplant at age 12), caused David to leave practice so that he could spend time with his daughter. Unfortunately, a divorce and failed practice sale provided additional setbacks that he had to think and work through.
Today, David is a nationally recognized speaker on creating freedom, building real businesses and investing in real estate. He also combines his professional and personal experiences to illustrate how the tactical and aspirational work together. David helps
other logical, rational professionals become dreamers, then strategically manifest those dreams into freedom. He authors a monthly newsletter, “Path to Freedom” and hosts
“The Dentist Freedom Blueprint” podcast. Freedom Founders Mastermind Community grows exponentially, year by year, providing the pathway to freedom for many professional practice owners.
“The greatest risk in life is doing nothing.”

Shownotes:

[00:07] introduction

[18:21] buck introduces David Phelps

[19:59] David Phelps’ background

[25:03] The gap

[28:10] The accumulation theory

[32:20] How am I going to outlive my money

[35:42] Freedom blueprint

[42:02] Why is Wall Street considered “conservative investing”

[45:14] Freedom Founders

[51:12] learn more about David Phelps

Dentist Freedom Blueprint Podcast

[52:02] Outro

**119: Why WAX is HOT!** Aug 12, 2018
I remember being a kid in the back of my parents’ car on long driving trips to Wisconsin—we used to go to a place called Wisconsin Dells which is kind of a “Las Vegas for children”—lots of water parks, go-karts, and stuff like that. We’d stay in a cheap hotel with a swimming pool and my brother, sister and I would have a great time.

The only thing I didn’t like about those trips is the drive. It took about 3 or 4 hours to get there from my home in suburban Minneapolis. You see, back then, we didn’t have iPads on which we could watch movies. Hell, we didn’t even have iPods.

We pretty much had each other and the view of the nondescript, flat farmland that made up our view for most of that car ride.

Now, I look at my kids and their life is so different. We take them out with us to restaurants all the time. Usually, it’s only the three year old that gives us trouble these days. And when she does, I just flip out my iPhone and find Peppa Pig on YouTube. That pretty much pacifies her for the rest of the evening.

For those of you who are old enough to remember life before the internet and smartphones, just step back for a moment and compare your childhood reality to those of your children.

Your children know no reality without the internet. They may not be able to talk on the phone with the demise of landlines, but they know how to text and email and that has always been part of their reality.

So, in considering this, we have to understand that our entire sense of reality is actually a bit different then the younger generations.

I remember hearing Randi Zuckerberg, Mark’s sister, say that her son thought that his grandfather lived in a computer for the first few years of his life because he primarily saw him on Skype.

Our lives are becoming increasingly connected with the internet and the line between what is real and what is not real is actually changing.

You’ve probably heard of people buying virtual items online like crypto kitties for example. They live only on-line so why in the world would you buy one?

Well, what if you spend several hours per day on the internet. Is your cyber-bling any less important than the ones we consider “real”?

I have a picture of vintage Ferrari in my office that I’d like to get someday—in real life.

But the generations that are coming up don’t see the difference between owning that and owning something unique that only exists in this 4th dimension of cyber-reality. If you spend most of your downtime there, that’s probably where you want your version of that vintage Ferrari parked—not in the “real world”.

I know this sounds like science fiction. But remember, just a few decades back the “Jetsons” showed video phone calls and it seemed so futuristic, didn’t it?

A new generation is on the rise and their perception of reality is different from ours.

If you start to understand this, you will see very quickly an entire world that is unfolding quickly. Some of this is being aided by the rise of distributed ledger technology.

One of these projects that I am very excited about as an investor is Worldwide Asset eXchange™ (AKA WAX). When these kinds of seismic changes occur in the technological world, there is money to be made.

WAX is a project that I am convinced will become a major player in a $50 billion industry. In other words, I think holders of WAX token have a good chance of doing quite well over the next few years if they get in early.

To help you understand my enthusiasm for the project, this week on Wealth Formula podcast, I have invited Malcolm CasSelle, president of WAX, to explain this strange new world and why it might make sense to invest in it.

Make sure to tune in!

Malcolm CasSelle is an entrepreneur the CIO of OPSkins and the President of WAX (Worldwide Asset eXchange). Prior to WAX, CasSelle served as CTO and President of New Ventures at tronc, Inc. (formerly Tribune Publishing). Prior to tronc, Inc., he was Senior Vice President and General Manager, Digital Media of SeaChange International. He joined SeaChange International in 2015 as part of the company’s acquisition of Timeline Labs, where he served as CEO. Previously, CasSelle led startups in the digital industry, including MediaPass, Xfire and Groupon’s joint venture with Tencent in China.

He has also been an active early stage investor in companies including Facebook, Zynga, and most recently Bitcoin-related companies.

Shownotes:

[00:07] Introduction

[13:00] Buck Introduces Malcolm CasSelle

[14:08] What is OPSkins??

[16:40] Virtual Items have REAL value

[21:46] Uniqueness and desirability determine the value

[25:04] The inefficiency in trading online

[28:15] Evolution of WAX token

[33:55] An intersection between the real world and the virtual

[37:04] The advantage of WAX over its competitors

[41:48] Where is WAX headed?

[48:52] Outro

**116: Central Bank Collusion with Nomi Prins** Jul 22, 2018
The central theme of Wealth Formula Podcast is that there are two investing worlds. One is for the poor, middle class, and the upper middle class. The other is for the ultra-wealthy.

Now the funny thing is, that many of those in the middle and upper-middle classes could be investing like the ultra-wealthy but one thing gets in the way—knowledge.

The world of the ultra-wealthy is hidden behind a veil that you have to actively pursue to access.

That is the purpose of this show…to illuminate the secrets of the ultra wealthy and make them accessible to anyone who cares to use them to their own advantage.

When I started down this path, I had no idea how little I knew and that’s probably still the case. In fact, the more I learn, the less I realize I know.

In 2008, when the financial crisis happened, I was just finishing my surgical residency. I was broke so I didn’t lose any money. But I had no idea what was going on in the world.

Meanwhile, the global elites were colluding to save the entire economy from collapsing. I didn’t even realize that I should be panicking. Did you? I guess sometimes ignorance, indeed, is bliss.

Now, when I read about what led up to the crisis and the inner workings of those deals, it is like reading a gory post-mortem report.

Why do I read this stuff anyway? Well, I am a firm believer that history repeats itself and that knowledge is power. I also like to feel in control as much as possible.

There is a lot of activity in the world that is the underbelly of the global elite and if you don’t try to keep up with it, you’re not going to know what hit you when the next financial crisis comes along.

No one knows this more than my guest on this week’s Wealth Formula Podcast, Nomi Prins. A former Wall Street insider, Nomi Prins left the dark side and now she writes about it. On this week’s show, Nomi tells us about the role of the federal reserve and banks that led up to 2008 and the new world order that has ensued since then.

It’s a world that you and I have little access to and it’s something you should not miss!

Nomi Prins is a renowned journalist, former international investment banker, author and speaker. Her new book, *Collusion: How Central Bankers Rigged the World*, explores the recent rise of the role of central banks in the global financial and economic hierarchy. Her last book, All the Presidents’ Bankers, is a groundbreaking narrative about the relationships of presidents to key bankers over the past century and how they impacted domestic and foreign policy. Her other books include a historical novel about the 1929 crash, Black Tuesday, and the hard-hitting expose It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street (Wiley,2009/2010). She is also the author of Other People’s Money: The Corporate Mugging of America (The New Press, 2004) chosen as a Best Book of 2004 by The Economist, Barron’s and Library Journal.

She has appeared on numerous TV programs: internationally for BBC, RtTV, and nationally for CNN, CNBC, MSNBC, CSPAN, Democracy Now, Fox and PBS. She has been featured on hundreds of radio shows globally including for CNNRadio, Marketplace, NPR, BBC, and Canadian Programming. She has featured in numerous documentaries shot by international production companies, alongside prominent thought-leaders.

Her writing has been featured in The New York Times, Forbes, Fortune, Newsday, Mother Jones, Truthdig, The Guardian, The Nation, NY Daily News, LaVanguardia, and other publications.

Her engaging key-note speeches are thoughtfully tailored to the auidence. She has spoken at numerous venues including the Federal Reserve / IMF / World Bank Annual global central bank conference, Purdue University/Sinai Forum, University of Wisconsin Eau Claire Forum, Ohio State University Law School, Columbia University, Pepperdine Graduate School of Business, National Consumer Law Center, Environmental Grantmakers Association, NASS Spinal Surgeons Conference, the Mexican Senate and the Tokyo Stock Exchange.

She was a member of Senator (and presidential contender) Bernie Sanders (I-VT) Federal Reserve Reform Advisory Council, and is listed as one of America’s TopWonks. She is on the advisory board of the whistle-blowing group ExposeFacts, and a board member of animal welfare and wildlife conservation group, the Elephant Project.

Nomi received her BS in Math from SUNY Purchase, and MS in Statistics from New York University, where she completed coursework for a PhD in Statistics. Before becoming a journalist, Nomi worked on Wall Street as a managing director at Goldman Sachs, ran the international analytics group as a senior managing director at Bear Stearns in London, and worked as a strategist at Lehman Brothers and analyst at the Chase Manhattan Bank.

Shownotes:

[00:07] Introduction

[06:56] Buck introduces Nomi Prins

[12:56] Formation of the FED

[27:38] Collusion: How Central Bankers Rigged the World

[36:54] Nomi’s thought on our current economy

[43:50] Where does cryptocurrency fit?

[48:59] Outro

Interview Transcript

**Buck:** Welcome back to the show everyone. Today my guest on Wealth Formula podcast is Nomi Prins. Nomi’s a former Wall Street Superstar, that’s where she held numerous positions. She was a managing director at Goldman Sachs she ran the International analytics group as a senior managing director at Bear Sterns in London, she was a strategist at Lehman Brothers, and an analyst at Chase JP Morgan Manhattan. She was as you can, it sounds like the quintessential Wall Street insider before becoming a journalist and really a prolific author. Her latest book is called Collusion: How Central Bankers Rigged the World. She’s got several other books including All the Presidents’ Bankers, Black Tuesday, It Takes a Pillage (I like that name in particular) Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street, and Other People’s Money: The Corporate Mugging of America. She’s appeared on numerous TV programs and documentaries and has spoken, as she’s captured the attention of global elite, having spoken in numerous venues including the Federal Reserve, IMF, the World Bank annual global conference. And I could go on forever really on this I mean this is Nomi’s got incredible accomplishments under her belt. Suffice it to say she’s super smart and she’s here to shed light on some very important issues for us. Nomi, welcome to Wealth Formula podcast.

**Nomi:** Thanks for that intro. And thanks for having me on.

**Buck:** So before we dive in, I mean it’s always kind of nice to get to know somebody a little bit, of where they came from. Your journey, as what I would think is fair to call an insider, really of some of the most powerful banks in the world, to writing incredibly comprehensive and you know actually pretty critical books about them. Tell us a little bit about that journey.

**Nomi:** Well I started out in math, so I start out grounded in sort of numbers and so the reality that those represent. And from there sort of made my way to to Wall Street. Actually I was still in school at the time so I kind of merged into working at Chase when I went to New York and from there I became an analyst. The program I was involved in a lot of the what are now very more types of esoteric securities that all those sorts of things from the very beginning of them in terms to happen to programming them so I really understood the guts of what was what was happening with with money with cash flows of how things reacted to the market to politics to to whatever from from the real ground up and I just sort of parlayed that into grad school I worked at Lehman Brothers and ultimately moved to London, for Bear Stearns, and got involved on the international banking side of things. And you know for a time a lot of that was was actually very it was very interesting. It was an intense atmosphere, there’s a lot of travel involved, meeting a lot of people, going to a lot of different countries ,you know working a lot of hours. But as things started to get more I say predatory on the street, relative to clients in particular, starting with a lot of corporate scandals, about my first book Other People’s Money, which is predominately about the Enron scandal in the WorldCom scandal back in the early part of the 2000s, which was around when I decided to leave the industry, and how banks were really a part of that. Basically a part of sort of faking what books look like and sort of creating these off-book kind of you know aside from public transparency elements of ways that they worked, and that started to sort of get to me and also this general nature of the environment started changing along the same time, and ultimately I left Goldman Sachs, which I moved back to New York to be at Goldman Sachs in the beginning of the third derivatives, credit derivatives market, which became the crux of the financial crisis. So around the time when I left there was a lot of sort of bad credit that was being repackaged as good credit. Now we know that as the subprime mortgage crisis which became the financial crisis back then it was sort of a nascent of that. And I decided that it was time for me to leave personally, like morally it just didn’t work for me. And also from a standpoint of I always like to explain things to people, you know whether they’re clients of the banks are people within the institutions. And so that translated into I think my need to be a journalist and to talk about what’s really going on on the inside how that impacts the outside, and since I left which is back now in 2002 is a long time ago so much has happened on the financial horizon. I’ve had to just basically keep on sort of going back to the well and writing.

**Buck:** They give you plenty of material right? They’re giving you plenty of material.

**Nomi:** No shortage forever. So yeah.

**Buck:** So a year ago, let’s get in sort of around the topics of the current book, I want to just sort of set the framework for that. You know a year ago we had the author of The Creature of Jekyll Island, G. Edward Griffin on the show and he described the formation of the Fed, you know he described this sort of gosh this is, the description is is fantastic the way he describes it a bunch of wealthy bankers on a train you know secretly going to Jekyll Island and creating what he describes ultimately as a banking cartel. Now I’m sorta, I’m curious on your take on the formation of the Fed and and ultimately how did this set the stage for what the Fed evolved into from there?

**Nomi:** Yeah that’s interesting because I mean that that train ride that he talks about in the creature of Jekyll Island happened. I mean a lot of the things that he writes in his books and other people that sort of get away from conspiratorial sort of conjecture and actually I go to the back, actually really did happen. In my last book actually, All the President’s Bankers, I follow the evolution of relationships of bankers, major bankers to Congress to presidents in particular. I went to Jekyll Island, I went to, it’s now a resort hotel, at the time you know it was a club. It was a place where the most elite people in the country, the industrialist, the the bankers, would come you know, their wives and their kids would be somewhere else. They’d have lots of sort of, a ratio of waiting staff to them and etc. And they would sort of talk about matters of the world. And the way the Fed was born not only was it a clandestine sort of train ride there, it came out of, it was an accident actually that it happened there. It happened because Nelson Aldrich was going back with it but try to understand how these things come together, Nelson Aldrich was who was a senator from Rhode Island. He also happened to be the father of a man named Winthrop Aldrich who became the head of Chase after the Fed was was established. He was going to visit his son in New York, he was working at another Bank, and he got hit by a trolley car on Madison Avenue in New York. And as a result of having to convalesce, JPMorgan who actually was the only member of that sort of allowed the people that went to Jekyll Island to be there. You had to have a membership in order to go there. He was not at the meetings in Jekyll Island. He gave his membership to effectively Nelson Aldrich and he said you know you got to go somewhere quiet to sort this out. And that’s really how Jekyll Island even happened. Take some bankers, in other words take my friends who are actually running banks around Wall Street. That’s how that happened, and go there. So the senator and a bunch of major bankers from the largest institutions at the time at the request of the membership of JP Morgan who was the most powerful banker in the world at the time, went there and talked about how to create what became a Federal Reserve or a place where money was held in reserve technically to be lent out in emergencies to banks so that they would continue to function and the idea was that if they could function well the economy would function well. Credit wouldn’t stop, everything would flow it will be all very seamless. But but the personal relationship with JP Morgan was very interesting to this. He died when the Fed was actually created. He died by December 1913 when the Federal Reserve Act came out. But before that he had been basically the money behind other panics and crises. He basically had lent in the past the government money. So he didn’t trust that the government would have money. He wanted a Fed or some other central bank to be there for banks. So it all started because bankers wanted to protect themselves. That’s how the entire thing was fashioned. And that happened most recently in the financial crisis of 2008. That Fed helped its own. And still is.

**Buck:** So when you talk about sort of the changing role of that Fed over the years, you know specifically, you know when I think about the Fed, and one of the questions I asked G. Edward Griffin, actually we were on a cruise one time, that I saw him on was, you know I get the idea, I get the idea with the cartel and the banking cartel, but when you look at who’s actually on that Fed now, they’re a bunch of academics, right? So how it is how does this all work together now, I mean how do you go, how has the work fed evolved into what looks like sort of a pseudo-academic, pseudo-independent, non-governmental institution. I mean how how did that, if you want to talk a little bit about that? Probably ultimately culminating into you know what came with the crisis in 2008 I think things have changed since then. But to that extent, how did that evolve?

**Nomi:** At the beginning, people who sort of made the decisions there in Washington weren’t academics. They were in fact from the banking sector they they had come from being senior members in that arena so they were coming with that experience in the beginning. And yes as things went went forward they were replaced by in some cases bankers and ultimately by academics. A lot of the reason for that was that academics sort of left an extra layer of independence. When the Fed was first created, it was created independent, supposedly, of the government, of the President, and even of the private banks, although they are members of the Fed. The Fed actually exists, is kind of a separate like semi-corporation within Washington. It sits right near the White House and everything else, but it’s it’s comprised of its members its members are the private banks the private banks owned shares in the Federal Reserve. They’re also regulated and receive subsidies from the Federal Reserve. It’s a very symbiotic relationship regardless of who runs it. But over the years, as these academics were chosen, a lot of them were chosen because of the the sort of philosophies they had about banking. So what happened was they allowed the the bankers to kind of take a step back and say, look this is an independent body, you know people that running are running this, you know, yes they’re coming from the same Harvards and Yales and so forth that we graduated from, yes we know them, yes we’re friends with them, but you know, they’re they’re different. They are academics so they’re gonna have independent thought. But their independent thought is very much about the same school of thought that the bankers have, which is that you know the Fed is there to support them. And in the process if it helps you know produce liquidity or if the economy looks like it’s better and they can say it’s because of Fed policy. Well that’s a good thing because it enables that idea of Independence to sort of be prolonged, even though in reality the Federal Reserve was constructed and continues to focus on preserving the largest banks in the country and now by extension the world, it’s all sort of codependent upon each other.

**Buck:** Right. So if you get to, you know, I’m looking at in reading your book, you know, it seems like there’s this you know obviously there’s this inflection point at 2008. But then when you think about it, you you mentioned the Glass-Steagall repeal in 1999. It seems to me that that’s really what set up 2008 in the first place. And then that ultimately led to this new world order of the Fed and the government and globally. Do you do you think that’s a fair assessment?

**Nomi:** Yeah because what happened in 1999, and there was a lot of years before 1999 where the largest banks wanted to roll back to how they had looked before the great crash and the depression, the great crash in 1929 depression that took place in the early 30s, before which banks had been able to take deposits, give loans, create new securities, trade those securities, create esoteric securities, sell them off to like people’s grandmothers, and do lots of other things. Those activities were all separated by the Glass-Steagall Act of 1933. That was an act going back to mention Winthrop Aldrich in the beginning of our conversation. He was a banker that time running Chase. So he was now one of the more powerful bankers in the world in 1933. He actually helped FDR, with whom he yachted on the weekends, so this is all very connected, to separate the banks. Actually helped internally within Washington this idea of passing Glass-Steagall to separate the banks so that he would choose, which he did, Chase did choose to just do the deposit and loan business, and sort of forego all the risky businesses. All the businesses that had caused the great crash, all the businesses that people were not confident in, so that he could amass deposits and move off and that was very smart move.

**Buck:** In other words, banks were banks, investment, you know, and hedge funds were hedge funds. And there was a line there where you couldn’t take bank deposits of, you know, people on Main Street and make risky gambles with them. That was the mainstay of ultimately of what Glass-Steagall was. And then what happened in 1999?

**Nomi:** So in 1999, after a lot of swipes it sort of end-running these functions and merging them together anyway, two large banks basically a set of travelers and Salomon Brothers and then Citibank got together and decided they were going to merge anyway, and as a result of their merger they had to change the law sort of retroactively so they hung out a lot again. This is in my last book All the Presidents’ Bankers with the Clinton administration, with people in Congress there and they should have pushed the idea that America, American banks could only be competitive with the world and this is kind of relate to some of the stuff that’s happening today if they if they could become bigger. They could do all these multiple new activities under one roof, have the deposits, do the loans and do everything else like they said the Europeans were doing otherwise they would be left behind. This was a big argument for Glass-Steagall to be repealed. So in 1999, ninety senators basically both sides of the aisle repealed Glass-Steagall through not called the Gramm–Leach–Bliley Act. As a result of that, big banks could merge again. They’d already been doing like Department merges and stuff like this but all of a sudden JPMorgan which was an investment bank that created securities, did mergers and acquisitions, didn’t really deal with a lot of real like regular people in their deposits, could merge with Chase Manhattan Bank and, who did deal with people’s deposits and loans and also some complex stuff as well, and become one entity that allowed them to have what was called a balance sheet. It’s the stuff we talked about when I was at Goldman in ’99 when this was happening. I was in Bear in ’99 before Glass-Steagall was repealed. And then when I was at Goldman in 2000, the idea of balance sheet, the idea of being able to say to two companies, look, we will merge you together, we will extract a lot of fee for it, and by the way we’ll also lend you some money too like pay for over whatever you need to do going forward because we have balance sheet. Why do we have balance sheet? Because of all these deposits behind us that will be collateral to the money that we will lend to you so we can do your more complex more profitable business. And that’s how all of these merger started to happen. Companies like Goldman Sachs that didn’t have balance sheet, that didn’t deal with real people in deposits, had to do something called leverage. They had to borrow and borrow and borrow against the little capital they did have in order to play in the same games that the banks were now coming in to. As a result of that all of the big banks on Wall Street, whether they had deposits or didn’t have deposits and were just leveraging and borrowing to be in the same camp, started to do more and more complex securities, take fees out of them create more and basically it just just throw a whole lot of risk onto the financial system because now they were betting and betting and betting again on the back of other people’s money, on the back of other people’s mortgage loans and so forth. And ultimately that caused the financial crisis in 2008.

**Buck:** Right way and that was the point I was gonna next to ask you about is without the Glass-Steagall repeal, would have 2008 have happened in the first place?

**Nomi:** See, I don’t believe so because of what we just talked about, because I understand how balance sheets work. Now there are there are a lot of people on both sides of the aisle and and in the media and so forth that would disagree and say well there was only Lehman Brothers, it was only Bear Stearns two companies I worked at that went under, they’re investment banks. So the big banks that were merged by the Glass-Steagall Act, as a result of the Glass-Steagall Act, Citigroup, Bank of America, JP Morgan Chase, they’re all fine, they didn’t collapse. So it really wasn’t Glass-Steagall. However the only reason that Lehman and Bear and Goldman and Morgan Stanley who ultimately had help from the government’s that did not collapse even though they were on the precipice of collapsing did collapse was because they had taken on too much leverage because to compete with what the big banks could do, they had to borrow more money on the back of what they had in order to play the same game. So therefore had they not been able to do that, had they not been feeling that they, you know had to compete at that level, they would not have leveraged as much, they would not have failed also. The big banks that were creating a lot of these toxic securities at the at the crux of the financial crisis, they were lending money to Lehman and Bear to buy the toxic securities they were creating. They were giving leverage to Bear Stearns and Lehman Brothers which ultimately helped to collapse them. So this entire system of big banks creating stuff that they then lent money to the investment banks to buy from them was also commingle and all a result of the fact that Glass-Steagall was repealed. And had Glass-Steagall not been repealed there would not have been as much leverage. Banks would not have been to create as many toxic assets, they will not have leveraged subprime loans by as much as they did because they wouldn’t have that buyers. And there might have been a crisis, but it would have been far less significant.

**Buck:** Is it even possible to, you know, to go back to pre-repeal days, given the way the banks are structured now? I mean is that even in, I mean it certainly there’s no political will out there, I’m sure. Given given the strength of the banking lobbies and stuff, but is that even something that could be done?

**Nomi:** It can be done for really two reasons. One is that banks as their job long do mergers and acquisitions. That they take pieces of one company with pieces of another company, subtract another couple pieces that are like not necessarily. They can figure out how to create new from old and how to restructure and spin things off. That is like what they do. So that the technological ability is there. As you’re saying the political will isn’t there. But you know you go back to 1929’s crash, and even though now we have more technology computers and even more trades in less than a second, back then, what we’re called trusts which were just collections of shares and stocks and bonds and companies that might not really have been as healthy as they were marketed to be all in one. And the idea was you know you buy a trust of a certain bunch of companies and ultimately maybe one fails the other one does okay your trust is gonna do fine. And people bought into that. And that was one of the reasons that there was a crash because it turned out a lot of those companies were not fine. And the bankers knew that, that’s why they were stuffing their shares into these trusts. Those trusts were not that different really besides you know less computer power then the CDOs the sort of collateralized debt obligations sort of new trust with new language and new acronyms of now. Of going into 2008.So back then if they could do it, given where they were technologically and given where they were in what was perceived to be a complex banking system, it’s not actually I think less complex now relative to technology. Everything moves forward so it is possible I think — therefore separating the will is definitely another thing. Banks don’t want to split up then they did. Now they don’t.

**Buck:** Let’s move on to 2008. So now as Americans of course we know how the financial meltdown affected us. In your latest book, Collusion, really dives into something that you know certainly I hadn’t really heard much about or thought much about and that is ultimately how our overly powerful banks and really the dominance of the US Federal Reserve’s hurt not only us but ultimately had a profound effect internationally. And you talk about how it affected you know the interplay between central banks and government it all gets very complex. And I was wondering if you could try, it’s a complex topic, I mean this is a very interesting book but it’s certainly nothing to read while you’re working or something. Tell us about some of the themes of the big themes of that collusion that you think that are important for us.

**Nomi:** Right so in the beginning of the days and weeks following the financial crisis and fall 2008 now coming on ten years that the Fed had a real problem, which is that the banks under its purview and particularly US banks and to a smaller extent some of the international banks that were working with them, were facing basically bankruptcy, meaning they did not have enough liquid money to pay their costs, their operating costs, their expenses. As some things were imploding and some things were we’re trying not to and as a result of that the Fed went into sort of you know emergency mode. And one of the things that did and has done over the last 10 years is to give the banks free money in order to get through their liquidity problem, is to render interest rates at 0%. Now and also just start to buy securities from the banks and also from the government in order to basically take the securities on its own book and provide and return cash into the market cash into banks. So the Fed for example bought 1.75 trillion dollars worth of mortgage assets from the big banks and gave them money now whether they were worth one point seven five trillion dollars is a completely different thing. I don’t think they were but that’s the money they got from the Fed for example. That couldn’t just continue in the problem by itself. Because all these banks are international because their assets had gone international, because they’re lending to other countries, nations, pension funds, whatever to buy their assets, had gone international. They needed the help of the basically G7. So they needed the Bank of Japan to do the same thing. They needed the European Central Bank to do the same thing. They needed the Bank of England to do the same thing. You know to a sort of lesser extent Switzerland and Canada and so forth and as a result of that they could render the cost of money at zero on average throughout the the major developed countries of the world. Now the other countries that were developing weren’t necessarily able to do the same thing without causing a lot of real inflation in their real economies and causing real problems for their real people. And they were also dealing with the aftermath of the economic depression that the US financial crisis had caused. So a country like Mexico which is where I open the book, you have this real quandary. The head of the central bank of Mexico is like well, I don’t want to reduce rates because that’s gonna like inflate food prices and you know it’s gonna hurt people and we just can’t do that in our economy, but the Fed was like yeah but you are our neighbor and you kind of have to. So there was just you know there’s a political and economic sort of back-and-forth going on. And as a result you know real people got shifted from real jobs, running these institutions when they spoke out, and other people were replaced to sort of try to do either what the Fed was doing or decide to do something different at the sort of peril of their country’s sort of geopolitics with the US as well as other things so for example in Brazil they decided to do something different, they they kept their rates high for a while and they lower them in then raised. And the Brazil chapter’s incredibly complex. That’s the most complex chapter. Brazil is complex. Brazil was in the middle dealing with the US. Brazil’s also getting some help and some new relationships with China. So on the one hand it’s changing geo-politically because of the financial crisis and because of how it’s reacting to monetary policy and politics within the US after the financial crisis. On the other hand it’s kind of in our section of the world and there’s trade that’s in place and there’s currency relationships in place. So a lot of shifting I followed around the world took place that elevated China and to sort of de-elevated other countries that fractured a lot of Europe because some central banks had cheapened money and given money to the companies and countries they wanted to and didn’t give it to the countries and companies they didn’t want it to so that’s also created inequality throughout the whole rest of the world and that’s just created you know a lot of people feeling that individually or from a nationalistic perspective that’s caused you know voting patterns to change. I personally, think all of this relates to the policy that was enacted ten years ago. It’s not to say these things won’t have happened potentially anyway, because the economy has been actually more shaky than sort of, I think that the main stats wouldn’t read. And an overall G7 growth has been under two percent for the last ten years even with all of these policies of throwing money into the system and manufacturing money by the major central bank. So it hasn’t really helped. But all of these things together ,I’m so going through all these themes in the book, sort of combine where we are at today in the world, back to the financial crisis.

**Buck:** You talk a little bit about one of the themes being that you know, the United Federal, United States Federal Reserve Bank and really all these major banks that dominate really dominate all the other countries in the world are walking sort of a fine line these days because after 2008 you had you know sort of increasing presence of China and some of the other alliances forming that really potentially started a weakening American dominance. Is that, is that right?

**Nomi:** They have been, because although America remains dominant that the dollar still the neighbors the the really insisted shifts that for example China relative to its regional partners or Japan relative to Europe they kinda and signed a big trade agreement a number of months ago that had been in the works because they are trying to sort of protect what they are doing outside of the US. So what’s happened is because there was such instability that was caused by and we know it was caused by the financial system of the US. Well that the Fed you know create a foreign have trillion dollars you know encouraged or demanded or colluded with other central banks to create similar amounts to sustain the financial system and there hasn’t really gone into the main economy because we see the growth numbers, we see the wage numbers, it hasn’t had the same impact the stock markets up but that stuff creates countries that weren’t part of that process to determine that they maybe need to develop other partnerships. So for example the BRICS countries which I talk about in the book a lot they answer Brazil Russia India China and South Africa, a term coined by a former Goldman colleague, you know they decided and they have over the year since the financial crisis develop more and more relationships with each other. They’ve created sort of their own Development Banks to be able to finance their own projects together without having to rely on the US those are the more growth that happens more structural and infrastructural growth that happens and trade that happens outside of the US amongst these countries as a result of these changes in the last ten years that the less dominant ultimately the US will be. It’s not an overnight thing you know. There are people who say oh the US dollar is crashing or yes you know I mean these are these are shifts that will probably come to fruition after our lifetimes? But there’s certainly shifts that are happening and they are changing not just the world order but the way in which countries and their power hierarchies have been established.

**Buck:** And along that line, it it seems to me that maybe it’s not such a bad thing to have some checks and balances in place. Right now we have you know you part of part of the collusion that occurs is because of desperation right? I mean they have to do this to survive. And we created a problem and it’s affecting all these other countries and they’re saying well gosh I mean we need these guys to make it. Now if there were some checks and balances in places where they didn’t necessarily need you know to cooperate in order to survive, it might not be the worst thing in the for them and for us.

**Nomi:** Well that’s true. I mean if there was more of a balance for example instead of currencies throughout the world, or which could be the outcome of where the shift is going but if we’re not there yet, and you would have more of a checks and balance, and maybe there would be as much of a requirement for the European Central Bank to do exactly what the feds been doing, creating cheap money and destabilizing ultimately Europe in the process while saying it’s helping Europe, that would be less of a necessity. If things are sort of more stable more equal and just more sort of diversified to begin with.

**Buck:** So you know I’d like to go back a little bit just to your thoughts on the current you know global economy. And it’s it’s an interesting time a very interesting time and I think that we live in you brought up nationalist sentiment, you know with with Trump being elected here and the rise of nationalist movements throughout the world. And it seems to me you know that in some ways is a reaction to what’s happened with the experiment of globalization. And I’m just curious on what your thoughts on that are and and how that affects you know the economy today and where you see this going.

**Nomi:** So I mean without globalization the last 10 years of what’s it’s permutation of basically what the Fed has done and the subsidies that central banks have colluded to provide their financial systems…You know it’s not like all that started 10 years ago, but that globalization has been the sort of bedrock. The financial globalization the fact that banks can operate anywhere the fact that banks can lend to any nation, to any town, to any whatever, to challenge any whatever to to basically sell and create from their new debt securities or new derivative securities or mergers and acquisitions across the world and everything. The fact that these the power sort of centers have been able to accumulate to such an extent as as a result of globalization. When we say power centers I mean bigger multinational companies in a sort of companies and banks where there’s this more sort of concentration of capital in the largest banks then you know sort of throughout the whole banking system. All of that is a result of globalization. And the fact that you know in the recent period the central banks which have kind of been on the background to a lot of this sort of just calibrating rates are now providing extra capital into this system is because you know some of the financial results of globalization the biggest banks have been able to also incur therefore the biggest risk. Their footprint’s bigger so therefore when they screw up it has you know sort of a bigger effect. Which is what we saw in the crisis and what we could see in another crisis. So all of it is connected to globalization.

**Buck:** So what happens in the next financial crisis? We’re clearly we’re not really ready for it but there’s certainly some I mean you’ve got a lot of people, I mean some people will always say we’re about to you know fall off a cliff, but I mean there’s certainly you know we’ve got a lot of debt, we have you know we’ve got some some issues with rates being as low as they were for so long and and you know the slowly coming out of that now we end up with another…let me ask you another way. What do you see happening in the course of the next 10 years I mean from your past experience and from the research that you’ve done?

**Nomi:** So I mean 10 years is a good time frame to look at because the sort of prediction of are we gonna fall apart in six months or year is a little higher and the reason for that is because these central banks and this policy has been going on for so long that it’s sort of become that you know that the new normal in sort of… and therefore they can sustain it if things start to crack a little bit. It’s when things and I would say things I mean all the debt that’s been created in the world within the emerging market countries, within the developing countries and so forth, starts to have to be repaid at higher and higher levels. So whether rates rise because they put them up higher which they’re very reluctant to do right now the feds smooth them a little bit but it’s reluctant it’s concerned or they could do actual inflation which there hasn’t been because there are scarcities of things. Then you start to see an inability of people and companies to repay the debt they’ve taken up. Any crisis is really caused by too much borrowing that isn’t being funded anymore. And some sort of retribution for that. And so in the next five or ten or two years that could easily happen we could start to see more defaults which are already seeing in some of the emerging market corporates, we could start to see more capital flowing out of those countries into the US because rates are rising which is already happening, we could also see it’s just rising because inflation is happening throughout the world and so that the periphery countries starting to really have problems that then infuse into countries mix into that trade wars and geopolitics and everything else and you have a lot of uncertainty that reduces any growth that we were having, because companies don’t like to sort of grow and hire and stuff when they don’t know if they can trade or if it’s gonna be too expensive, the product they’ve been trading and a bunch of their you know instead of mainstay countries, I mean that starts to impinge upon like your money coming in. So little money coming in whether it because it’s cheap or whether it’s because its limits expansion doesn’t match the debt, that’s how you start to have crises. And we can have that. And it might not be a situation next time where central banks can mitigate it. If it’s a question of velocity it’s question what happens faster. That happens faster than central banks can contain it. They’ve been very good at containing it in the last ten years that’s when you start to see major crises happening again.

**Buck:** Right and in that situation I know you know Jim Rickards for example has talked about you know his belief that if you know there were another crisis because the the central banks essentially have no dry powder left that that there would be potentially a intervention and maybe the SDR Special Drawing Rights would come into play. Is that something that you kind of buy into as well is in terms of what could happen?

**Nomi:** Well it’s the IMF and Special Drawing Rights basket and and now it’s of course grown recently to include the Chinese so it’s come out of just simply the sort of core older powers and and sort of increased it’s um it’s certainly a way to to provide liquidity a sort of multi currency basis in other words if there’s a crisis rather than to just pour dollars somewhere or just you know see that the demand for the others goes higher because that’s the currency that the demand for SDRs could be higher because currencies are more diversified so I think that is a solution it plans these become more diversified or if countries start to can well continue this path that I’ve been talking about which is that they start to trade more with each other and start to not trade in US dollar as much which we’re also seeing I think the SDR can definitely and will definitely be used in another crisis by way more than it was in the last one I mean really more than the last one. Also that these other central banks will try to maintain whatever control and power that they have, that they’ve seen or believed to be effective sort of from the last crisis.

**Buck:** I have one last question for you, I don’t want to keep you too long, but I’m curious given kind of your position with the banks in the past and we’ve got this new phenomena these days of Bitcoin and cryptocurrencies and, where does this, where does this fit? I know a lot of people kind of, sort of laugh it off and say it’s a fraud and it’s gonna go away but, you look at what’s happening and I’m you’ve got you know you’ve got a CBO ease trading futures, it looks like there may be an ETF coming up now through the CBO ease application to the Securities and Exchange Commission. This is potentially real stuff, right? So I’m curious what you think about this in the context of central banks and banks who you know this is an existential threat, potentially to them. Have you have you thought about this issue much? Is this, you know, I know it’s kind of out in left-field from what we’ve been talking about, but I love talking about this issue with people who are in the know and on Wall Street.

**Nomi:** So I mean to an extent, the whole evolution of cryptos, aside from blockchain, what they actually, how they actually comprised, I kind of think of it like calculus. There’s nothing in calculus which is in the limit. Like if you keep on going further and further in time and further further in numbers you get to a certain result. And in that limit of some sort of scenario that result can occur now in the limit of bastardizing calculus a little bit, so in in the abstract of where cryptos can go, in the pure sense of what they’re supposed to be, which is basically a more sort of democratic way of having currencies exist or having a system of exchange happen along cryptocurrency or digital currency which doesn’t have influence by, and can’t be created by the central bank or the current system and if everybody can partake in that and if there are safeguards for everybody in that and if it’s consistent across you know all the merchants and all of those sort of savers and all the buyers that involved in that then it becomes a very viable alternative to current currencies. That said, where we are at right now, is that it is very much a speculative activity because we are not there. So there’s the current situation there’s this a limit. The limit that’s a potential that is why central banks are hiring reams of people to you know sort of deal with digital currencies and develop systems. I know the European Central Bank it’s like one of the main you know programmer requests on their you know job search lists you know we need someone who could be in this space. They’re definitely going they want to understand, it they want to be involved in it, and to an extent that it grows, they want to control it. Same way they control regular currency. So there isn’t an issue of losing that power over currencies and you know their jobs. And in the limit they would. But but the problem is that right now we’re in a situation where there’s a lot of kryptos that that aren’t sort of consistent across many platforms, that are simply speculative securities and you can’t have a regular person you know running the bar down the street, you know buying his beer and selling it to his customers dealing only in crypto, when crypto is going or bitcoin is going from like you know 20,000 you know the beginning of a month to like 5,000 a couple of months later, because they cannot run a business that way. So in the potential I think it makes a lot of sense and I understand and talk about a little bit in the book why central banks are looking at it and consider it you know possibly for the future want to be involved and want to sort of you know front and center. On the other hand I am concerned about it right now for regular people to use in regular transactions and you know there’s a time gap in between because of the speculative nature of it and instead of the lack of insurance or security that people if they really were gonna run their businesses and it was their only livelihood and their only money was all converted into crypto and reduced by 75% in a very short period of time.

**Buck:** Well that’s a, thank you for that just a little aside. But again, Nomi, first I want to thank you for being on. The book, the latest book is called Collusion: How Central Bankers Rigged the World we will put put the name of the book and the link in the resources section and definitely in the show notes as well. I want to thank you again for being on this has been great.

**Nomi:** Thank you so much. Great questions. I really appreciate it.

**Buck:** We’ll be right back

**115: Ask Buck with Lane Kawaoka** Jul 16, 2018
I don’t know about you, but I love the 4th of July holiday. I love getting together with family and watching fireworks—that’s for sure.

But the 4th of July, to me, reminds of the greatest advantage with which I was born—the opportunity to grow up an American.

I am two generations away from poverty in India. My dad came this country in the late 1960s on an engineering scholarship.

Before long, he was possessed by the American spirit—the entrepreneurial spirit—and went on to become a millionaire. And now look at me!

A buddy of mine grew up with 6 siblings and a single mother and there was not enough food to go around even with food stamps. Now he’s a millionaire entrepreneur.

Where else in the world does this happen? Where does such social mobility exist. England still has something called the “House of Lords” as part of their government—you have to be born into that legislative branch.

Sure it’s not a perfect system but there is no other country in the world that provides the opportunities to it’s people the way the United States does.

You can bitch all you want about this country—but remember, you CAN bitch about it because you live in this country.

And for those trying to flee to other countries because you think the US economy is going down. Well…good riddance.

Do you really think that if the world goes into a financial meltdown you will be better off anywhere else in the world than the United States? Do you think hiding in a third world country will serve you better than being in the greatest country in the history of the world?

Ladies and gentlemen—I hope you appreciate this country the way I do. We’ve got it good and being an American is the biggest reason that I believe that no matter where you are today, I know you can be wealthy.

Just tap into that inner immigrant and let it flow. Look at the opportunities around you. The only thing stopping you is fear of the unknown. No one is in your way. You control your destiny. That’s what it means to be an American.

If you disagree, go to wealthformula.com and leave a message telling me why on speak pipe (link). Periodically, we record these comments and questions for the occasional show we call, “Ask Buck”.

Speaking of “Ask Buck”, this week’s episode of Wealth Formula Podcast is one of those special shows.
Make sure to listen and to record your own questions and comments for the next show.

Lane Kawaoka, PE

12+ Time Best-Selling Author | 1,400+ rental units | Engineer | Syndicator | Radio Host at www.SimplePassiveCashflow.com

“The true meaning of wealth is having the freedom to do what you want, when you want, and with whom you want. Building cash flow via real estate is the simple part. The difficult part occurs after you are free financially to find your calling and fulfillment. But that’s a great problem to have ;)” excerpt from “The One Thing That Changed Everything”

Shownotes:

[00:07] Intro

[09:43] Buck introduces Lane Kawaoka

[12:44] Catching up with Lane

[23:04] Question from Ravi

[35:00] Question from Chris Eggleston

[54:23]Outro

**114: What is the Freedom Formula?** Jul 08, 2018
I’ve really been thinking about this thing lately that they call the law of attraction.

I’m sure you’ve heard of it. Remember a few years back when that book, “The Secret” came out and they made a movie of it as well?

Actually, that book was sort of a rip-off of “the secret” that Napolean Hill talks about in Think and Grow Rich which was written about eighty years earlier.

The concept is simple—your thoughts become reality. Ok, so it sounds like a little self-helpish I know.

But think about it—what is part of your reality today that DID NOT start out as a thought? Your job? Your kids? Your house?

You thought about all these things at some point before they became your reality. In that sense, OF COURSE your thoughts became your reality.

It’s funny because my wife says that even when we first met—when I made $50K per year in San Francisco, I always acted like I had money.

If I was out to dinner with her or another friend, I always made sure to take care of the bill. I was always a good tipper and I always KNEW that I would make a lot of money some day.

Of course I was a surgical resident at the time so some might argue that making good money some day wasn’t much of a leap of faith.

But it was different and it is different for me than it is with a lot of people. I have a built-in abundance mind set. The idea that money and resources are limited doesn’t instinctually resonate with me.

I hate when people talk about living within or below their means. To me that defines a low threshold of means in the first place. I am, by no means, a spendthrift. But, despite joking about it on this show, I am not cheap—especially when it comes to expanding my means.

You see, last year alone I spent about $100k on financial education and masterminds. Some might call that excessive. But I don’t think so. This year alone, I will be able attribute about $1 million dollars in income directly to the information or people that resulted in that $100K total investment.

Would you invest $100K this year for a 1000 percent gain next year? Well, that’s what I did.

Meanwhile, I have had some tell me that $197/month for my course and network is too expensive. What am I going to say to that? My $197/month course, network, and mastermind are better than MOST of the $25k/year masterminds I have joined. If you thing that’s too much money to take it to the next level—then you won’t.

And I say that not because I’m saying you have to buy my course or be part of my mastermind calls to be successful. I’m saying that because you are not viewing the world through the lens of abundance. You see expense where I see investment.

Words matter. Mindset matters. I am living proof that getting yourself in an abundance mindset is paramount if you are ever going to be wealthy.

So when you listen to Dave Ramsey or Suze Orman, just remember, they are talking to poor people and those people will stay poor. Do you think Dave Ramsey and Suze Orman really live in a world of limited resources? They are entertainers and they make a lot of money pretending to think like the poor and middle class. But, guess what, with their own money they invest like the wealthy.

When I speak on this podcast, I am speaking to a wealthy person. That is my avatar. If you listen to me and my words resonate with you, you likely live in a world of abundance already.

Check yourself. Check your words. Check your thought patterns. Check your behavior.

Do you live in a world full of fear and scarce resources? Are you worried that you will run out of money before you die? Are you afraid that if you invest your money then you will lose it?

Or, do you believe that you are going to grow into someone healthier, happier, and more wealthy than you are today?

A 15 year old high school dropout once said, “If you think you can do a thing or think you can’t do a thing, you’re right.”

That, of course, was Henry Ford. And those words are the words of a wealthy man. But remember…the thoughts and the words come before the result. It always has to be in that order. You can change your thoughts and words consciously and I urge you to do so if you want a better life.

Speaking of a better life, my guest today on Wealth Formula Podcast has some different views then me but he also believes he has found the “freedom formula”. Make sure to find out what it is.

“I want to see every physician lower their taxes, destroy their debt, and enjoy a joyous, liberated lifestyle so that they can focus on what they love most- their families, their patients, and the activities that give them joy.”

– David Denniston

Shownotes:

[00:07] Intro

[14:05] Buck introduces David Denniston

[20:52] The freedom formula

[23:11] Pile of cash vs river of income

[33:49] The economy

[36:38] The tax bill

[40:38] Land

[51:08] More of David Denniston on:

doctorfreedompodcast.com

[52:38] Outro

Flipping or cashflowing with land: https://www.wealthformula.com/resources/

**113: How to conquer burnout and the golden handcuffs** Jul 01, 2018
As you know, I left medicine entirely about a year ago. I still have a couple of medical related businesses but that’s about it.

Without question, I have moved on. All of my physical and emotional energy are devoted to things outside of medicine.

Why? Well, I used to think it was a touch of attention deficit disorder. Sort of that—“been there done that” attitude.

The thing is, when I think back to when I started not enjoying medicine, it actually started in residency—as far back as my first year of surgical internship.

It’s sad because I was a HIGHLY motivated medical student. I was driven to succeed and my professors loved me (because I was a serious kiss-ass).

But then I started a neurosurgery residency and—well…I lost my mojo.

I experienced:

physical and emotional exhaustion

cynicism and detachment

feelings of ineffectiveness and lack of accomplishment

I heisted these three descriptions of a person with the clinical diagnosis of burnout from a psychology journal.

The physical and emotional exhaustion I figured was from the fact that I was working 100 hour weeks (before the 80 hour work week limit now enforced).

Cynicism and detachment—this is horrible. I was surrounded by death in the neurosurgical ICU. When a patient died, it was not sad. It was an inconvenience. I found the paperwork irritating and it was difficult to be truly compassionate to families. That’s the truth. I hate to say it, but that’s the person who I had become.

And, as for feeling of ineffectiveness and lack of accomplishment? Well, you just need a couple of unsupportive senior residents to make you feel like crap. Surgical training in most cases is quite hierarchical and I found many residents to be of the kiss up kick down variety.

Remarkably, I finished seven years of training despite my, almost immediate, distaste for the system.

But it was also that dissatisfaction that, in part, made it so easy for me to go another direction.

Did I have to go another direction? Was that the only way for me to feel better? I always thought so.

But if you look at “burn out” as a kind of disorder like depression or even a back problem (a literal pain in the ass), then maybe there is a way to not give it all up and start over.

I did start over. But, it was a little easier for me to do that than most. First of all, I didn’t have much in the way of responsibilities when I first started my entrepreneurial life. My first daughter was a baby and my wife and I didn’t even own a house.

For others, the golden handcuffs of a high paid job and responsibilities, like paying the mortgage and for private school and colleges, make burn-out a particularly challenging problem.

In that case, it’s good to know you have options—that you can possibly treat the affliction without having to either give it all up or to simply continue to be miserable.

Burn out is a real problem for people who are highly successful and well paid. Most people have little sympathy for the doctor or engineer making $350K per year feeling burned out.

That makes it even more difficult to deal with because you might feel like it’s not ok to admit you’re not happy.

But, the reality is that at every level people deal with the same crap. We are all human and we have the same types of problems.

Maybe you’re just burned out? Maybe someone you know is burned out.

The good news is that there is help out there and there’s no reason to be miserable anymore.

Diane Ansari-Winn was an anesthesiologist who went through burn-out herself and now has become an expert on helping other physicians identify and cope with burnout. She’s my guest on Wealth Formula Podcast this week.

Of course burnout affects everyone, not just doctors so this is relevant to just about anyone professional listening to this show. This topic may not be as sexy as making tons of money but it may help you or it may help you identify someone you care about that needs help with a very treatable condition…burnout.

Dr. Ansari-Winn’s mission is to help create a health care system where physician wellness is considered an integral part of medical practice and that physicians are supported in doing what they truly want to do– to take great care of patients and advance the art and science of medicine.

Shownotes:

[00:07] Introduction

[17:08] Buck introduces Dr. Dianne Ansari-Winn

[17:52] Dianne’s story

[24:54] What is burn out?

[32:09] Happiness: Physiology vs Psychology

[41:26] How to approach a burn out issue

[47:56] Get in touch with Dianne

http://www.dianneansari-winn.com/

www.physicianvitalityinstitute.com

A doctor’s Life Podcast

[49:16] Outro

**112: Death: The Ultimate Financial Hedge** Jun 24, 2018
Everywhere I turn, it seems like someone is talking about how the market could crash any day.

As I write this, I see that the Dow has taken a beating today because of the Trump “tough on China” rhetoric.

Tariffs, rising interest rates, ballooned asset prices—is this baby going to blow or what?

I don’t know the answer to that. Last week, we had the Chief Economist of Fannie Mae on the show. He didn’t know either.

Jim Richards and Peter Schiff are confident we are doomed—but when don’t they think we are in trouble?

The reality is that, at any given time, we have no idea when there will be a correction.

The only thing we do know is that what goes up must come down— that’s about all.

As for when, I can tell you that whether it’s the housing market or the stock market, the other will follow.

That’s the way it works. You see, almost all of the asset markets are correlated. That means, they all follow each other.

So, when one starts to tank, the others do as well. That’s just the nature of the game.

Now, does that mean you should stop investing? I don’t think so. I think investing in quality assets will eventually lead to you coming out ahead.

On the other hand, if it were possible to stay out of the line of fire—to invest in something truly uncorrelated with any market, would it make sense to do so?

I think so. That’s why I am an advocate of an asset class that few even know exists outside of Warren Buffett, Bill Gates, and some hedge funds.

This asset class is backed why one of the few guarantees in life—death.

In this week’s episode of Wealth Formula Podcast, you’ll learn exactly how you can take part in the ultimate financial hedge.

Tim Wright

– Senior Partner, Chief Marketing Officer

Tim joined ASR Alternative Investments in 2007 and currently serves as Vice President and Senior Partner. His many responsibilities include overseeing and facilitating ASR’s growth and marketing strategies. As a key front player in the ASR team, Tim has been an integral part of the companies expansion and revenue growth in recent years. His unquestionable grasp of the industry coupled with his astute marketing skills has earned him the highest respect from both clients and financial professionals.

Prior to ASR, Tim worked for Enterprise Rent a Car for 18 years. During this time, he held several executive positions including Assistant Vice President at the World Wide Corporate Headquarters in St. Louis, Missouri. He was responsible for European operations expansion in the UK, Germany and Republic of Ireland. His most recent position with Enterprise brought him to the Dallas/Fort Worth area where he served as the Regional Vice President and Corporate Officer of a 50 million dollar operation, responsible for 300 employees in 40 locations, including the DFW Southwest Regional Headquarters. In 2007, Tim chose to retire from Enterprise and join American Safe Retirements.

Tim grew up in Southern California and Washington State. He attended Washington State University in Pullman Washington and currently lives in Southlake Texas with his wife, Theresa, and their five children.

Shownotes:

[00:07] Introduction

[10:15] Buck introduces Tim Wright

[11:35] What is life settlement?

[16:39] “Is it legal?” Yes!

[19:43] How has life settlement evolved?

[26:17] The process of buying life settlement

[32:03] Mitigating risks

[37:07] Projection of life settlement

Visit hedgetheeconomy.com to learn more about life settlement

[42:12] Outro

**111: The Current State of the Economy with Doug Duncan** Jun 17, 2018
If you listen to Wealth Formula Podcast, there is a good chance you listen to other shows with similar themes and opinions.

In my niche, the one on-going theme is that the zombie-apocalypse is just around the corner. The zombie apocalypse is of course another financial meltdown reminiscent of 2008 or worse.

And to be fair, it could be on its way. The problem is that people started saying that almost as soon as the last recovery began.

A decade later, a lot of people have made a lot of money by not sitting on the sidelines.

I have been guilty of this a little by myself to be honest. I have been concerned about the economy for the last couple of years and I still am.

But, we also have to understand that we cannot predict the future. The next recession may very well happen next month but it may not be that big of a deal at all. On the other hand, it could be that avalanche that the likes of Jim Richards have been predicting for years.

So what do you do? Well, first, you’ve got to listen to people outside of your own circles a little bit. This real asset investing community that listens to podcasts is a relatively small ecosystem and sometimes it’s like living in an echo chamber. Everyone seems to be saying the same thing.

In fact, when I met Robert Kiyosaki in April of 2017 on the Real Estate Guys Summit at Sea, I asked him what he thought of what all the speakers were saying. He told me that it worried him a little bit. When I asked him why he said it was because everyone seemed to agree too much.

He said, “It makes me wonder what I’m missing”.

This a real phenomenon that we all should check ourselves on—including me. Tribes tend to congregate around a core set of belief systems which may become so pervasive that opinion or belief can be misconstrued as reality.

In other words, make sure that you get your information from multiple sources. Listen to people with whom you disagree and try to articulate why you disagree with them.

People who have taken a Chicken Little approach to investing over the past 5 years look pretty foolish right now. That’s fine if you really did your research. But if you did so because you follow only one doomsday economist then you’ve got to start branching out.

One economist who I have been following is someone you might wish to add to your repertoire. He is actually considered a mainstream voice in the financial world and one that I consider to be one of the more balanced.

His name is Doug Duncan and he is the chief economist at Fannie Mae. In this week’s Wealth Formula Podcast, Mr. Duncan will tell us how he sees the rest of 2018 and beyond.

Make sure to tune in!

Douglas G. Duncan is Fannie Mae’s senior vice president and chief economist. He is responsible for providing all forecasts and analyses on the economy, housing, and mortgage markets for Fannie Mae. Duncan also oversees corporate strategy and is responsible for strategic research regarding external factors and their potential impact on the company and the housing industry. He serves as the Chair of the Fannie Mae Corporate House Price Forecast Working Group.

Shownotes:

[00:07] Introduction

[08:44] Buck introduces Douglas Duncan

[10:14] Is our economy still sluggish?

[13:20] Exception to the market cycle

[15:57] The zombie apocalypse of our economy

[21:17] From the eyes of the armchair economist

[23:51] How does Douglas see the effects of a downturn based on where the current housing market

[32:10] Cryptocurrency

[38:52] Learn more about the economy from Douglas Duncan

Fanniemae.com

[40:47] Outro

**110: What’s Your Financial IQ?: David Norris, M.D., M.B.A** Jun 10, 2018
Robert Kiyosaki told me that Rich Dad Poor Dad was written to be a promotional piece for his *Cash Flow* board game. He really did not write it with the intent of making money on the book itself. Well, that little promotional piece ended up being the number one best selling financial book of all time—not bad!

Countless people that I know have been touched by Rich Dad Poor Dad and credit it with transforming their lives including me. Yet Robert describes the work as an “accounting book”. And if you go back and read it, it is! Assets, liabilities, and cash flow. That’s what the book is all about.

The genius of Robert Kiyosaki is that he is able to explain accounting to the masses in a way that makes sense and is entertaining.You see, accounting isn’t that sexy but it is important. In fact, I believe that everyone should be required to take an accounting class in high school.

Why? Because accounting is the basis of business and it also should be the basis of personal finance. Everyone should see their own personal finances as a business. You have money going in, you have money going out and what you have left is profit.

Your personal financial statement should be viewed no differently than financial statements viewed by a business owner. You want to add assets and reduce liabilities and you want to make sure you have adequate cash flow. Makes sense right?

If you do that, you might actually start behaving differently. Let me give you an example. I have a friend here in Santa Barbara who is a famous house designer and real estate investor. I went to his new house a few weeks ago and it was full of very expensive furniture. He also collects vintage cars like old Ferraris.

Now you might think that all of this stuff is a waste of money. But…he actually buys these things because he wants to put them on his personal financial statements as assets.

Think about it. If you buy a brand new Maserati today it will cost you over a hundred thousand dollars and start depreciating the minute you drive it off the lot. My friend, on the other hand, bought his vintage Ferrari for 75K several years ago and now it’s worth 400K.

He could have gotten brand new furniture but he chose antiques that look great AND appreciate in value. Talk about a guy who understands accounting. Even his toys are real appreciating assets! He sort of got me thinking about buying that 1960s Porsche 356 that I’ve always loved.

Anyway, it’s just another way to view the world and one that is really quite valuable. Accounting is fundamental to financial literacy.

My guest on Wealth Formula Podcast this week understands this well. His name is David Norris and he’s a doctor with an MBA who has made it his mission to teach others financial literacy.

Make sure to listen to the show!

David Norris attended college but didn’t take any business classes. Instead, he focused on the science classes he thought he needed for medical school. Then, when he was in medical school, he would ask about the business aspects of healthcare and was told he would learn about that in residency. During his residency, the business of medicine was never brought up, and when he asked about it, he was told he would figure it out after he graduated. He suspected he was told these things because his attendings and professors might not know the answers.

Then he entered private practice where he was handed income statements and balances. Numbers were tossed at him, and others assumed he knew what was going on. At first, he didn’t really grasp what the reports were telling him. He tried to fake it, but his conscience got a hold of him. He was responsible for the income of over seventy families. He needed to accept that responsibility and do his best to serve them. So he went back to school. This time it was to raise his business intelligence by earning an MBA.

Shownotes:

[00:07] Introduction

[10:03] Buck introduces David Norris

[10:37] David’s story

[13:04] Help will always be given to those who ask for it

[23:54] Investing requires basic financial literacy

[25:59] Stay away from what complexity

[27:54] David’s book and course

http://davidnorrismdmba.com/book/

https://learn.davidnorrismdmba.com/courses/financial-health.

[30:29] Learn to negotiate with David

http://davidnorrismdmba.com/work-with-me/speaking/

[36:55] Outro

**108: The Bitcoin Killer: Mance Harmon on Hashgraph** May 27, 2018
Why is it easier for the rich to get richer? Why is it that the “first million” is the hardest?

Well, there’s lots of reasons for that and I go through them in some detail in Your Roadmap to Real Wealth.

But one very important reason that the rich get richer is because they have more money to invest.

I know what you’re thinking right now, “Wow, Buck, you are a genius!”

Ok it sounds really simple. I get it. But my point is this. If you make more money, you will be able to allocate a higher percentage of your income towards investments rather than paying your bills.

Right? If you make $50K per year or less in San Francisco, as I did a surgical resident, there’s no money left to invest.

On the other hand, if you make a few million dollars per year, covering your expenses shouldn’t be that hard. Most of that cash can be used to create more wealth.

You can use that money to buy things like real estate, businesses, precious metals, even life settlements.

And, because you can spare to lose a few bucks, you can also allocate some money towards investments that might be highly speculative.

Speculation is not a four letter word if you do it in a calculated way. I don’t consider my speculative investments gambling at all. I consider them asymmetric risk investments.

In other words, the upside is several orders of magnitude higher than the downside—even if the downside means losing your entire investment.

For me, this is “Maserati money”. I can either buy a Maserati and guarantee that I will never see that cash again, or I can take a shot down the field that has a chance to create transformational wealth.

What is transformational money? Well, add a zero to your current net worth. Unless you are starting out as a billionaire, that number will transform your life.

Rich people do that all the time. I’ve talked about this before but the Winklevoss twins (the ones who sued Mark Zuckerberg) did this by buying a big chunk of bitcoin before most people did a few years ago that took them from the ranks of mere eight to nine figure mortals to the billionaire boys club!

What if you could go from six to seven figures or seven to eight? Would that change your life?

Adding a zero would change mine for sure It might even be enough for me to give up my Toyota for a Maserati or a classic Ferrari.

My problem is that I am cheap. A lot of people who make a lot less than me drive expensive cars. I’d just rather make more money.

So, what is my asymmetric trade these days? If you listen to me regularly, you know that I am a cryptocurrency enthusiast.

I am now allocating a full 10 percent of my investable assets into distributed ledger technology.

Why? Because I truly believe that this may be the biggest opportunity to create transformational wealth that I will ever see in my lifetime.

I have been obsessed with what’s going on in this world for over a year now and have already made some extreme profits.

You may also know that I have my own cryptocurrency fund which I believe is positioned very well to benefit from the trillions of dollars about to hit this market.

Now, if you are brand new to cryptocurrency, it might be a good idea for you to listen to my introductory podcasts on this topic with Palm Beach Confidential editor, Teeka Tiwari. I interviewed him in episodes 86 and 104 of Wealth Formula Podcast.

Today, I am going to introduce you to a project that I represents the future of distributed ledger technology.

I have been following Swirlds Hashgraph since I first learned about cryptocurrency. A friend of mine, who is an insider in this world, tipped me off to the project.

Since then, I have studied it and followed its progress closely. Hashgraph is the next generation of distributed ledger technology. It solves all the problems of blockchain projects such as bitcoin and ethereum.

For that reason, many have referred to hashgraph as “the bitcoin killer.” The reason is that the technology is so good that it serves as an existential threat to blockchain ledgers such as bitcoin and ethereum.

Now here’s the good news. It’s not too late to invest in this project! In fact the hashgraph public ledger and token, hedera, will not be circulating until later this year.

You are WAY ahead of the game. And while this should not be construed as investment advice, I would highly suggest you pay careful attention to my guest on Wealth Formula podcast this week as I interview Mance Harmon, cofounder and CEO of Swirld’s Hashgraph.

Mance Harmon is an experienced technology executive and entrepreneur with more than 20 years of strategic leadership experience in multi-national corporations, government agencies and high-tech startups, and is Co-founder and CEO of Swirlds Inc. Prior experience includes serving as the Head of Architecture and Labs at Ping Identity, Founder / CEO of two tech startups, the senior executive for product security at a $1.7B revenue organization, Program Manager for a very-large scale software program for the Missile Defense Agency, the Course Director for Cybersecurity at US Air Force Academy, and research scientist in Machine Learning at Wright Laboratory. Mance received a MS in Computer Science from the University of Massachusetts, and a BS in Computer Science from Mississippi State University.

Shownotes:

[00:07] Introduction

[13:40] Buck introduces Mance Harmon

[14:16] Mance’s life before cryptocurrency

[18:27] How Distributed Ledger Technology will change the world

[23:27] Limitations of the current blockchain

[27:08] Performance of Hedera hashgraph

[31:25] Applications made possible by Hedera

[36:05] What does hashgraph stand with/against the current blockchain

[41:10] The difference between private and public distributed ledgers

[48:20] The reason why hashgraph is patented

[54:12] The Hedera Council

[57:02] Timeline of Hedera

[59:12] Find out more about Hedera Hashgraph

Hashgraph.com

Hederahashgraph.com

Telegram: Hedera Hashgraph Chat

Medium: Hedera Hashgraph

[01:01:42] Outro

**107: Cash Flowing with Stocks with Andy Tanner** May 20, 2018
Some times when I go back and listen to my podcasts from when I first started this show, I think to myself, “This guy is clueless.”

Of course I wasn’t clueless. I still knew more than most about investing but man have I evolved.

The key to that evolution has been my ability to not be dogmatic about anything.

That’s tough—especially in the investing world. The paper people think that real estate investors got it all wrong and real estate investors think paper is for idiots.

I used to believe that permanent life insurance was one of the worst investments you can make. Why?…because some other doctors told me that.

And while the policies they were looking at were likely not good investments, I had no idea that products and strategies like Wealth Formula Banking™ or Velocity Plus™ existed until I got to know some people who had a lot more money than those doctors.

Never take financial advice from people who make less money than you do!

People have a nasty habit of picking “camps” and defending them even if it is not in their best interest to do so.

Just look at modern politics. I am a libertarian who believes in small government and lower taxes for small business. Therefore, I tend to vote conservative (although I have my limits when it comes to character).

On the other hand, why are people in the working class voting for conservative candidates against their own economic interests?

It’s not smart to be close minded and argue against things you don’t understand. At least try to understand them first!

That’s why I asked this week’s guest on Wealth Formula Podcast, Andy Tanner to be on the show. Andy is one of Robert Kiyosaki’s Rich Dad Advisors and happens to be an expert on investing in paper assets.

It sounds almost paradoxical to use the name “Kiyosaki” and paper assets on the same page without some sort of expletive doesn’t it?

Well, if you listen to this podcast, it will make sense why Andy is a Rich Dad advisor. He may be an equity market guy, but he’s all about cash flow.

You’re going to love this show and, if you already have money in the stock market, this show is mandatory listening.

Check it out!

With a long time passion for Teaching, Investing, Entrepreneurship, and Self Development, Andy has devoted his career to training and inspiring motivated people all over the world.

Andy’s passion for helping investors and entrepreneurs shows through in everything he does: The Cash Flow Academy Show podcast, regular investing update videos and commentary, interviews with top experts, and focused training programs. The goal with The Cash Flow Academy is to make everything fun, simple, and real.

**Cash Covered Puts Explained by Andy Tanner**

https://youtu.be/NNoHQenIeEU

Shownotes:

[00:07] Intro

[08:45] Andy Tanner’s story

[11:42] 401Kaos

[17:37] How does wall street mess with your retirement funds

[26:58] Andy’s approach to the stock market

[39:39] What is a good percentage of yield

[44:25] Learn more about Andy

cashflowacademy.com

[49:40] Outro

106: Entrepreneurship and Mobile Home Millions with Kevin Bupp May 13, 2018

I am proud to say that I have overcome a major handicap to become a successful entrepreneur. It took me 33 years to figure out how to get past this obstacle… but I did it.

I’m proud of that fact because very few people with this fate in life become successful business people and even fewer become successful investors.

What was this handicap you ask? Well, you see…I was born an A student.

I got good grades in high school and college and graduated at the top of my medical school class. I even got into one of the best neurosurgical training programs in the world. Did you know that more people become professional athletes every year than neurosurgeons?

Yes indeed. I reveled in my academic success. I pumped out scholarly papers and book chapters like there was no tomorrow.

In fact, I remember telling my dad that I was published in a journal called Neurosurgery two months in a row.

You know what he said? “Congratulations. How much do they pay your for that anyway?”

Silly dad, I thought. He just doesn’t get it. He’s too busy being a slum lord to understand my world. What I’m doing is important. It’s meaningful. It’s not just about the money.

I thrived on academic achievement and being recognized as smart and important. It was my currency. And for those who are good at school and who constantly get positive feedback, it’s addictive. The accolades create a feedback loop. With every accomplishment, award, or title there is a dopamine hit that makes it harder and harder to ever get outside of your own world.

That’s why I call being an A student a handicap to becoming an entrepreneur. A students don’t get to experience failure. In fact, they become so accustomed to success in school that they are often unable to function without someone telling them what to do. And the idea of going into free fall as an entrepreneur terrifies them.

Think of the smartest people in high school—did any of them become entrepreneurs? Probably not.

Most entrepreneurs come from the school hard knocks. Life doesn’t hand them an easy out and most of them weren’t particularly good students. They had to wing it and develop the ability to improvise and deal with failure. That quality also happens to be the hallmark of the successful entrepreneur.

That describes my guest on Wealth Formula Podcast today. Kevin Bupp went from a middle class family and little aptitude for school to starting multiple successful businesses including a highly successful venture into the mobile home park world.

Listen to his story on this week’s Wealth Formula Podcast!

Kevin Bupp has been an entrepreneur all his life. He completed a degree in business at a small community college in PA, but eventually decided to focus all of his energy on real estate. This turned out to be a good move, because for more than thirteen years Kevin has been investing and consulting with tremendous results, having personally completed in excess of $40 million in real estate transactions. Currently, Kevin is a candidate for CCIM, the highest commercial real estate designation around.

Shownotes:

[00:07] Intro

[06:21] Buck introduces Kevin Bupp

[07:47] Kevin’s story

[14:59] The magnetic field of real estate

[24:08] Kevin’s mobile home parks

[29:50] Contraction in this business now

[33:04] Sunrise Capital

sunrisecapitalinvestors.com

[35:21] Kevin’s podcast

Real Estate Investing For Cash Flow
The Mobile Home Park Investing Podcast

[37:37] Depreciation of mobile home parks

[40:45] Outro

**105: Cash Flow with Raw Land: Mark Podolsky** May 06, 2018
It’s actually not that hard to make money. Yes… I said that. And, I mean it.

You see, everywhere I turn, I see opportunity. Why am I seeing things that others aren’t? Well, I think it’s because I’m not looking the same place that most people are.

You see, there is a herd mentality amongst investors. We see what others are doing and we want to do the same.

The problem is that when a lot of people are doing the same thing, it brings about competition and there is nothing that can kill a profit margin like competition.

I learned this from the business world. My first business was a cosmetic surgery practice in Chicago. There is a cosmetic surgeon on every block in Chicago. It’s glamorous and every surgeon wants to be famous and on TV.

Luckily, I didn’t care to be famous. I just wanted to make money. So, I focused on building my brand rather than my fame and that made it so I could scale past the other “famous doctors” pretty quickly.

That said, if I had to do it again, I would not pick cosmetic surgery as a business.

A friend of mine was telling me about his father-in-law who created an empire in the janitorial services industry. My friend asked him how he did it and his father-in-law said it was easy because “No one else was interested in the business of cleaning of shit”.

The businesses I started since that initial cosmetic business have been much easier to profit in because they are not glamorous. I have realized that the less glamorous the business, the easier to profit.

The same could be said about investing. It’s very hard to invest in apartment buildings right now because everyone wants to be an apartment investor. That’s why it took me over a year to get behind a deal to present to investor club.

On the other hand, no one seems to be rushing towards raw land. Yet, my guest on this week’s Wealth Formula Podcast appears to be crushing it in this unusual part of the investing world.

But I’m not surprised. If you figure out how to catch fish where non one else goes fishing, you’re bound to come out a winner.

That’s pretty much what Mark Podolsky did with raw land and we will hear exactly how on this week’s Wealth Formula Podcast.

Mark J. Podolsky (AKA The Land Geek) is widely considered the Country’s most trusted and foremost authority on buying and selling raw, undeveloped land within the United States. He has been actively investing in Real Estate and Raw Land since 2001, and has completed over 5,000 unique transactions. Mark’s company, Frontier Equity Properties, LLC, is an A+ rated BBB real estate company. To learn more about Mark, please visit thelandgeek.com.
Shownotes:

[00:07] Introduction

[10:10] Buck introduces Mark Podolsky

[10:52] Mark’s background

[13:57] Raw landing investing – how does it work?

[20:32] Purposes of buying raw land

[22:35] Websites to buy land

Landsofamerica.com

Landandfarm.com

landmodo.com

Landflip.com

landhub.com

[29:32] Learn how to start this business

https://www.thelandgeek.com/

Email support@thelandgeek.com with the subject line “Wealth Formula” and receive Passive Income Launch Kit (Originally priced at $97) for free

[34:18] Mark Podolsky’s podcast: The Art of Passive Income

[35:44] Outro

**104: The Next Crypto BOOM with Teeka Tiwari!** Apr 29, 2018
We are living in a world that is technologically transforming at light speed and distributed ledger technology is on the cusp of that metamorphosis.

Most people think of distributed ledger technology in terms of bitcoin—but bitcoin only scratches the surface of what will be the most important technological advancement since the internet.

That is the reason that when my cryptocurrency portfolio dropped in value by over 50 percent, I just bought more.

And now, I believe we are on the precipice of the next big move upward in this market.

Behind the scenes, the big money knows this. Despite Jamie Dimon’s commentary and the big banks’ resistance to the movement, smart money is moving in for the kill.

Institutional investors like Black Rock, Wellington Capital and billionaires like George Soros have taken note. And when they finally make their move, it will happen quickly and explosively and extraordinary amounts of wealth will be created.

I truly believe this.

The question is, what are you going to do? If you want to sit on the sidelines because of the speculative nature of the investment, I don’t blame you.

On the other hand, if there was ever a time to consider skipping the new BMW and buying some cryptocurrency instead, it might be now.

If you want an introduction to distributed ledger technology, a good place to start would be episode 86 of Wealth Formula Podcast when I first interviewed Teeka Tiwari of the Palm Beach Confidential Newsletter.

Lots has changed since then but I had the good fortune to speak to him again recently to catch up on what’s going on in the crypto world.

What you will find is that If you have a fear of missing out on the opportunity of a lifetime, it may be warranted.

Listen to the interview now!

Mr. Teeka Tiwari is a Editor at Palm Beach Research Group LLC. He is responsible for the firm’s flagship service, The Palm Beach Letter and small-cap and cryptocurrency advisory, Palm Beach Confidential. Earlier, Mr. Tiwari served as a Co-Editor and was also an Editor for Jump Point Trader and Mega Trends Investing at the firm. Previously, he was a hedge fund manager and launched a hedge fund. Prior to this, Mr. Tiwari was a Vice President, youngest in history, at Shearson Lehman. At the age of 18, he was the youngest employee at Lehman Brothers. Mr. Tiwari has been a regular contributor to the FOX Business Network and has appeared on FOX News Channel, CNBC, ABC’s Nightline, The Daily Show with Jon Stewart, and international television networks.

Shownotes:

[00:07] Introduction

[06:18] Buck introduces Teeka Tiwari

[08:00] What happened to the crypto market?!

[10:34] Why is the market so volatile?

[14:43] What’s in store for us in the next few years?

[18:21] Bitcoin dominance?

[23:43] Distributed ledger technology is here to stay

[27:45] How does regulation affects the crypto market?

[33:20] Where does Bitcoin end up at the end of 2018? In 5 years?

[41:00] Get in touch with Teeka

Joinbigt.com

[42:44] Outro

**103: Wealth Tips and Tricks with Jim Dew** Apr 22, 2018
I know I’m always ranting and raving about the evils of Wealth Advisors but the reality is that I have learned a great deal from some of them. You see, there is a difference between Wealth Advisors who work for you and those that live OFF of you.

There is also a big difference between Wealth Advisors who actually work with WEALTHY people compared to those who work with your typical professional who is just trying to do the right thing and work with a “professional”.

In fact, those advisors who work with the ultra wealthy are often the ones who know some of the best kept “secrets” of the ultra wealthy. We can learn a lot from them.

My friend Jim Dew is one of those guys and offers some nice little “behind the veil” tips and tricks on this week’s Wealth Formula Podcast. Make sure to tune in!

Jim Dew’s affinity for investing and financial matters began in college when he majored in mathematics. Jim brought his love of finances to his career as a Certified Financial Planner®. In the past, he has been a compliance officer and regional manager for a national financial services company. His experience supervising financial planners motivated him to start his own independent firm in order to provide unbiased, objective advice.

Jim has been quoted in several national and local publications including: The Wall Street Journal, Kiplinger’s Personal Finance Magazine, Consumer Reports Money Adviser, The Arizona Republic, The Scottsdale Tribune, The Business Journal, Financial Advisor, Investment Advisor, Arizona Business, Mutual Funds Magazine, and Consumer Reports.

Shownotes:

[00:07] Introduction

[05:40] Buck introduces Jim Dew

[08:05] Fiduciary VS traditional

[11:03] Influences on Jim

[15:45] Jim’s ninja strategies

[20:25] The Augusta Rule

[26:24] Captive Insurance

[32:30] Jim’s typical client

[35:27] Learn more about Jim

Email jim@dewwealth.com

[36:56] Outro

**102: The Millionaire Mindset with Michael Bernoff** Apr 16, 2018
When I was a kid, $20 dollars seemed like A LOT of money.

When I was a surgical resident making less than $50,000 per year in San Francisco, making $300,000 like my professors sounded like A LOT of money.

Since embarking on my entrepreneurial and professional investing journey, I have had $300,000 MONTHS on multiple occasions.

But making $10 million dollars in one year still sounds like A LOT of money.

I have had the good fortune of being able to break through these kinds of mental barriers multiple times in my life to get to the next level.

Hopefully, someday soon I will look back on the days when making over $10 million dollars in a single year and having a nine figure net worth seemed like a lot of money.

Does that seem realistic? It does to me.

Why? Because all of the barriers that we have in our lives are self-inflicted. We create our own boundaries. They don’t really exist.

Recognizing that is critically important if you want to continue to develop not only financially, but as a person.

The other day I was trying to think of what my biggest fear in life is. It’s not death and it’s not dying broke.

My biggest fear in life is hitting a plateau and not growing any more.

It’s an easy trap to fall into isn’t it? Let’s say you are like me and one day you decided you wanted to be a surgeon. You were on a mission.

You went to college. You worked hard and good grades and test scores. Then you studied your butt off for years and finally became that person you aspired to be.

But 5 years into your “dream”, you started wondering to yourself, “is this it?” It seemed so much more exciting and glamorous as a dream than it does reality. Now it seems like—a job!

Suddenly, that thrill of being a fancy surgeon has warn off and you didn’t really think of anything past that point in your life. Even worse, now you have created a world for yourself that is highly dependent on your “high salary” and you feel like you don’t have any options anymore.

You are shackled to the golden handcuffs. Others can’t understand why you, with your fancy titles, your fancy house, and your BMW, don’t seem particularly happy.

But.. I understand your discontent.

You see, I believe that there is really only two states of being—growth or death. If you are not growing as a person…if you are not constantly learning and developing as a human being, you are pretty much already dead in the figurative sense. To me, to be such a metaphorical zombie, is the worst that could happen.

How do you prevent that from happening to you? Well, my guest on Wealth Formula Podcast today, Michael Bernoff is an expert on exactly these types of things.

So, if you don’t want to be a zombie, make sure to tune in to the show!

Michael is the President and Founder of the Human Communications Institute, a leader in the personal and professional development industry. He works directly with individuals as well as corporate executives who desire to transform their corporate culture in an ever changing marketplace. His passion for his work is limitless and his dedication to positively impacting the world by empowering every individual is uncompromising.

Shownotes:

[00:07] Introduction

[08:59] Buck introduces Michael Bernoff

[10:42] Michael’s story

[13:18] There has to be more in life

[24:28] Convince yourself to get out of your comfort zone/ the golden handcuff

[28:42] A different kind of wealth

[32:16] How to be happy with where you are at

[36:30] Lean more about Michael

Michaelbernoff.com

michaelbernoff.com/wealthformulapodcast

[38:40] Outro

Wealthformularoadmap.com

**101: Invest like the rich with equityzen** Apr 08, 2018
One of the reasons I don’t like investing in the New York Stock Exchange is that by the time a stock become publicly traded, most of the upside is already gone.

Let’s take Square, Inc. for example. This is the mobile payments firm with that software that allows pretty much anyone to take credit card payments.

Nice idea…sure and I don’t doubt that this company has a bright future.

But when you look at the stock, it’s price to earnings ratio is over 1000.

So what does that mean? Well, say you have a small business that makes about 500K profits per year. You decide you want to sell your business.

At P/E ration of 1000, that would mean the value of your business based on your profit would be $500,000,000. Yes—a half billion dollars!

Are you really going to buy a company valued like that? Well, that’s the kind of stuff people buy in the stock market routinely.

Private companies don’t typically have those crazy valuations. For private companies, valuations are typically made by appraisals not by irrational exuberance.

That’s why the ultra wealthy who often are able to invest in these companies before their initial public offering often make a killing.

The problem is that most of us don’t have a couple extra million to play around with to speculate a little bit even on late stage private companies that are about to go public.

But what if you could invest $25K into Lyft (uber’s major competitor) before it goes public. Would you do it?

It might make sense. The problem is that, until recently, it was impossible for accredited investors who are not worth several million dollars to participate in this world.

That is until recently. I just discovered a way for high paid professionals to play in the world that used to be reserved for the billionaire boys club.

It’s through a business called equityzen and this week’s Wealth Formula Podcast feature’s its CEO and founder, Atish Davda. Check it out!

Buck

P.S. If you really want to start investing like the wealthy, check out Your Roadmap to Real Wealth (Wealthformularoadmap.com).

Atish was VP Product at Ampush, a big-data advertising technology firm. He launched SF-based Ampush’s New York office as first engineer and successfully procured the coveted Facebook Preferred Marketing Developer membership. Atish began his career as a financial engineer at AQR Capital.

He serves as an Executive Board Member for PennPAC (Penn Pro-bono Alumni Consulting), a nonprofit that helps other nonprofits thrive.

When not at the office, Atish can be found playing tennis and traveling.

Shownotes:

[00:07] Introduction

[09:07] Buck Introduces Atish Davda

[09:37] Why did Equityzen begin?

[11:22] How does a typical company goes from being private to public?

[15:13] How does Equityzen work?

[22:21] Buying and selling on Equityzen

[31:45] What kind of return can you expect?

[36:18] Potential changes to the accredited investor laws

[39:23] The impact of cryptocurrency

[42:19] Equityzen.com

[44:11] Outro

100: Your Roadmap to Real Wealth! Apr 01, 2018

In 2008, when I finished my surgical residency, my net worth was about negative $75,000—not bad considering that number included education until I was 33 years old!

As you know, 2008 was also the year of the great meltdown of the financial system. Doctors that I knew who had been practicing for decades with the intent of retiring soon, suddenly realized that they couldn’t! Half of their money had evaporated within days!

Why? The short story is Wall Street greed. You see, Wall Street has created this really profitable game for itself. Here’s how it goes.

You work hard to make money. You entrust your money in Wall Street through your wealth manager with hopes that your wealth will grow.

Of course Wall Street charges you a lot of fees and wins whether you win or lose. They also make big bets with your money so they can make even more money for themselves.

When they win, they win big but you don’t get to see the money. When they lose, they are too big to fail so they get bailed out by you—the tax payer.

Pretty nice gig if you can get it right?

How do they get away with it in the first place? Why do we do we as professionals keep coming back for more? After all, doing the same thing over and over and expecting a different result is the definition of insanity, right?

What kind of financial education did you get growing up? What did they teach you about personal finance?

Chances are, you weren’t taught anything about investing. The educational system teaches you nothing about personal finance.

And when we get out of school, what replaces the classroom? How do make up for what we haven’t learned? Where do we turn to for answers when we need to learn about real life?

What replaces the curriculum when you leave school? The answer?…CONVENTIONAL WISDOM!

The problem is, conventional wisdom is not always right. For a lot of years conventional wisdom was that the world was flat.

Conventional wisdom, believe it or not, might not even be unbiased. It might have been perpetuated by big money, big banks—wall street.

Think about it. What is conventional financial wisdom? Let the experts invest your money in a diverse portfolio of stocks, bonds, and mutual funds.

Why is that conventional wisdom? The only time my dad invested in the stock market was the during the dotcom crash and he almost lost his shirt.

How many people do you know have gotten wealthy BECAUSE they invested in stocks, bonds, and mutual funds? Do you think the most wealthy families in the worlds, like the Waltons and Rothschilds invest in mutual funds? Of course not!

Then why do most high paid professionals believe that investing in mutual funds is the responsible thing to do? Because it’s conventional wisdom. But here’s the problem:

CONVENTIONAL FINANCIAL WISDOM IS THE CREATION OF SPECIAL INTERESTS!

It came form Wall Street. It has been hammered into you as gospel and to stray from that line of thinking—well, it’s like heresy.

I can’t tell you how many times I have heard from very smart, highly trained professionals confess to me that they feel sort of guilty or unnerved about investing in “alternative assets” like real estate.

Does that sound like you? Even your family gets on your case—they tell you that you are going to lose all your money and that you are not being responsible.

I’m hear to tell you that if you don’t believe in trusting your money to Wall Street, that you are NOT an irresponsible heretic. I am living proof that wealth can be created outside of Wall Street.

In my humble opinion, I will go as far as to say that it is a hell of a lot easier to become wealthy investing outside of Wall Street.

But where do you start? I’m asked this question all the time. And there is no simple answer. There is a lot to learn. This is podcast number 100. We’ve covered all sorts of investments, tax strategies, and even asset protection.

But…we’ve never before put it all together in one place in a COMPREHENSIVE format taught by some of the smartest financial minds in the world—something that can be studied and maybe even mastered.

That is…until now. I am really proud to present to you a labor of love on which I have spent the last 6 months and over $150,000 to create. I have created a course called Your Roadmap to Real Wealth and you can learn more about it at WealthFormulaRoadmap.com

The course was produced by my friend Pam Hendrickson who spent nearly 20 years producing courses for Tony Robbins to prepare for this moment—ok maybe Tony wasn’t just a warm up for me. But..the point is I wanted the best of the best to make this happen. And that’s what I got!

Just look at some of the names on this faculty: Rich dad Advisors Tom Wheelwright and Ken McElroy. Tom’s tax firm has helped me legally save literally millions of dollars of taxes in the past few years. Ken McElroy is the guy I learned real estate from and who I consider the Michael Jordan of multifamily real estate.

Speaking of real estate, how about the real estate guys, Robert Helms and Russell Gray—friends of mine and some of the best in the business at teaching real estate.

We’ve got Marco Santarelli—the turn-key rental guy and, if notes are your thing, how about Jorge Newberry, founder of American Home Preservation. Then there is Mauricio Rauld, my SEC attorney teaching you what you need to know about investing in private placements.

We’ve even got my own asset protection and estate planning attorney Kevin Day to teach you why I sleep well at night knowing what I know and being structured the way I am.

And finally, we’ve got the legendary Dean Graziosi teaching us about the millionaire mindset and the meaning of true wealth.

How about that for all start line up?

Of course, it wouldn’t be my course if I didn’t give you everything I personally know about personal finance and investing so I’m part of the faculty as well.

Along with the course, I am also happy to announce the Wealth Formula Network which will now be the home to the Wealth Formula community. This is where I will be spending my time so I can really focus on helping people who are truly committed to take it to the next level.

Again, the course is called Your Roadmap to Real Wealth and it may very well serve as the foundation for the rest of your investing life.

Check it out at WealthFormulaRoadMap.com

Shownotes:

[00:07] Introduction

[14:29] Question 1

[23:19] Question 2

[30:45] Question 3

[41:00] Question 4

[43:36] Question 5

[45:45] Question 6

[32:53] Outro

**099: Profiting in Leisure with Beth Clifford** Mar 26, 2018
Before I had a clue on how to invest, I thought I could just figure it out on my own. How hard could it be? After all, it’s not brain surgery right?

And to a certain extent that is true. The math is quite easy. And yes, there is a simple equation.

Wealth=leverage(Mass x Velocity).

But the problem is, you have to believe the numbers that you plug into that equation in order for you to invest with confidence.

And…to be clear, apart from concepts like Wealth Formula Banking, there really is no guaranteed return on investment in just about any opportunity.

You can do all the math and due diligence you want, but at the end of the day, you have to take some leap of faith when you write that check.

The first time I bought an apartment building, I did all the math right but there were many things I did wrong that caused me to lose about $300K—that was an expensive education. And boy…did I learn. In fact, I’m happy to say that I never lost money on another apartment investment since then.

A big reason for that is my discovery along the way that investing is a team sport. You’ve heard that before I’m sure. But it’s really important. In fact, I call this tribal investing.

You see, with the concept of tribe, there is this idea that we can all benefit from the collective strengths of our community.

Yes…learning is best done through mistakes. But…they don’t need to be your mistakes. Borrow the battle scars of others in your tribe!

Tribe also suggests an orderly community—one in which there are checks and balances. It is way that people create order out of an otherwise chaotic world. The same can be said for your financial tribe.

Your want to have people that have your back and you want people with whom you invest to take your money personally. You want them to feel personally responsible for your money and also worry about their reputation in the community if they don’t perform—that’s where checks and balances come in to play.

Listen, the best investors in the world lose money. There is no such thing as a deal that can’t go south and even the most skilled and experienced deal sponsors will on, occasion, lose money for their investors.

But if someone is in your tribe, the hope is that they believe what they are telling you to be truth and do not take the responsibility as your fiduciary lightly.

That’s why it is important to constantly expand your tribe. You need to be able to trust people before you can trust their deals.

Some of you occasionally send me opportunities and want my opinion and more often than not I send a one liner back to you that says, “I don’t know them”.

That’s not to be curt or unhelpful. I just don’t look at anything unless I have some kind of connection with the sponsor group.

On the other hand, knowing an operating group well and believing in them can sometimes convince me to get past some of my own dogmas.

As you may know, our accredited investor club bought into an offshore resort development last year.

I don’t normally invest in resort property and I normally don’t invest in developments. But the strength of this team and associated brands along with their character made me look deeper into an opportunity I would have otherwise never considered.

That property is Mahogany Bay Village and Beach Club and the lead developer, Beth Clifford, is my guest on Wealth Formula Podcast this week.

If you have ever considered investing in developments or resort property, make sure you listen to this show as Beth will explain, from the investor’s perspective, how one should approach these kinds of projects.

Beth Clifford, owner and CEO of Mahogany Bay Village and Caribbean Homes & Exports.

“Doing what’s right, right.” This is Beth’s personal motto. Always do what you know deep down to be the right thing, and do it well.

Beth has been involved in entrepreneurial business strategy and implementation for forty years. Just one in her impressive catalog of accomplishments was developing a software team who created the first automated credit scoring system in the United States, that went on to be the backbone of what Americans today know as the FICO score!

After 14 years in the technology industry, Beth shifted her focus into construction and real estate development. This was a move in pursuit of her long-time love of building that was instilled in her during summer vacations as a girl with her grandfather, a home builder in New England. Since then, Beth’s experiences in development have spanned the United States and beyond, from small historical preservation projects, residential neighborhood developments, semiconductor and biopharmaceutical developments, and hospitality projects.

Beth Clifford is a woman who personifies hard work, an unwavering vision, and above all — humility. When she entered Belize in 2005 her goal was to create or support the creation of 50 Belizean companies. To date, she has reached 18 and the work will continue until the goal is realized — and if you’ve been privileged to meet Beth Clifford, you should take that for fact.

Shownotes:

[00:07] Introduction

[11:51] Beth Clifford’s background

[14:38] Golden Handcuff

[18:39] Beth’s take on investing in development

[26:17] Mahogany Bay Village Belize

[37:34] The projection of Mahogany Bay

[42:49] Learn more about Beth Clifford and her work

Mahoganybayvillage.com

[45:42] Outro

**098: Monetizing What You Know with Jonathan Levi!** Mar 18, 2018
When I first learned about the concept of cash flow investing, it was like a religious experience.

In my case, I went around everywhere proselyting the virtues of cash flow investing to my friends. I was so excited about the concept that I couldn’t stop talking about it. In the process, I bored the heck out of a lot of people!

But I couldn’t help myself. The idea is so simple and elegant, right? Buy things that throw off monthly cash flow. When you have enough cash flow, you can “retire”!

Indeed, all of this is true. But… over the years, I figured out that it’s a little bit more complicated.

It always cracks me up when I see someone have the cash flow revelation moment and the lights go on. They talk about their passive income goals and how they are going to retire in 5 years by buying real estate—even if they are currently broke!

And the reality is that when you listen to a lot real estate podcasts out there, it might lead you to believe it is just that easy.

Here’s the problem though. In order to create passive income, you have to have money in the first place!

It’s math right? Remember, the Wealth Formula? Wealth= Leverage (Mass x Velocity).

Let’s just focus on mass for a second. Mass means how much money you have to invest.

If you have no mass, it doesn’t matter how much leverage and velocity you use. You still won’t be able to create wealth.

This issue isn’t something that affects the broke either. I talk to plenty of high paid professionals who like the idea of replacing their W2 incomes with “passive” income.

If you make $250,000 per year, that’s not an easy feat! If you average 10 percent cash on cash, you have to get $2,500,000 into the machine to create that stream of income.

Doable yes but most of us are not that patient. What if you want to move quicker? What are your options?

Well—for one, understand that you have many options. If you want to move quicker, you might have to broaden your investing horizons beyond the real estate box.

We might have to look into buying or starting businesses that produce a lot more income. These businesses can either serve as mass to accumulate more real estate or, like in my case, can serve to be stand-alone “passive” streams of income.

Of course all of this can sound intimidating if you are a hard working professional already slugging it out for 50 hours per week. Who has time for all of this?

But understand that in order to create more income, you really only have two options. Either you have to buy it (like real estate), or earn it with your time. If you can’t afford to buy more, then you have to earn it and that will take more of your time.

But taking more of your time doesn’t mean that it has to be another full time job you add to your current busy schedule for the next twenty years. You can also invest a certain amount of time up front just like you put down a lump sum of money to buy a rental house.

Then, you can leverage technology. Sound intriguing? Well, it should!

My guest on this week’s Wealth Formula Podcast is going to show us exactly how to do that.

So…if you want to speed things up and get on the golf course, you won’t want to miss this week’s conversation with Udemy expert Jonathan Levi!

Jonathan is a serial entrepreneur, author, and lifehacker born and raised in Silicon Valley.

He’s the author of the blockbuster Become a SuperLearner series, and the host of the award-winning Becoming SuperHuman podcast. His passions include learning languages, musical instruments, acro yoga, weightlifting, and cooking.

He lives in Tel Aviv, Israel with his superwoman, Limmor.

Shownotes:

[00:07] Introduction

[08:59] Buck introduces Jonathan Levi

[10:20] Jonathan’s journey

[15:57] What is Udemy and how does it work?

[17:40] Jonathan’s experience with Udemy

[22:49] Is Udemy an option for YOU as a stream of income?

[28:39] What are the more appealing courses from the buyer’s perspective?

[33:30] How do I get started? (The Branding You™ Academy)

[39:43] How to reach Jonathan Levi – jle.vi

[42:45] Outro

**097: Profiting from Broadway with Erica Schwartz!** Mar 11, 2018
If you’re heading into a dark cave for the first time, bring someone who’s been there before. That’s sound advice–not only for exploring caves, but also for investing your money.

In fact, when it comes to investing money, it would be even better if you brought a geologist with you who had previously studied that cave extensively and had a map of it along with a great big flashlight!

You see…the mistake most people make is that they believe investing is unpredictable. They are brainwashed into believing that by Wall Street.

“Invest for the long term in a portfolio of stocks, bonds, and mutual funds”. What does that mean anyway?

It means, “Give me your money so I can pull off a bunch of fees. And when you see your account go down by 30 percent in the next correction, it’s not my fault. It’s an act of nature.”

Are we really that helpless when it comes to controlling our financial future? God help us if we are!

I can tell you from my own experience that we are, indeed, not helpless. If you feel that way, you have not tried hard enough. You have not spent any time on financial education or trying to build your network–your tribe. After all, your network equals your net worth.

Indeed, one of the most profound discoveries I made during my quest to understand the way that the ultra-wealthy invest is this–it’s not an accident that the rich get richer. The wealthy don’t rely on luck–they engineer their wealth.

Wealth is created, it does not spontaneously appear. You can’t expect to get wealthy by simply hoping to get hit by it.

Now listen, I’m not saying that the rich never lose money. They speculate sometimes and sometimes they lose. But the bets they make are asymmetric. Wins result in HUGE wins and losses are easily absorbed.

In order to make sure they have more wins then losses, they make sure they have insider information. I’m not talking about illegal stuff.

I’m talking about being deeply connected with people who intimately know an industry or an asset class that have tremendous track records. Simply put…when they bet on something, they are right way more often then they are wrong.

When you find people like this, you tag a long!

Anyway, Broadway musicals are completely foreign to me. Yet, they can be incredibly lucrative if you invest in the right one.

Frankly, I didn’t even know you could invest in Broadway musicals until I met this week’s guest on Wealth Formula Podcast: Erica Schwarz.

When it comes to musicals, she is a true expert and she is going to illuminate this industry for us and how we can profit from it. She will be our guide into this dark cave of Broadway! Make sure to check out the show.

Erica Lynn Schwartz

As the General Manager for the Emerson Colonial Theatre, Erica is proud to be reopening this historic theater that will provide a wide array of top quality programming for the Boston community. With all new state-of-the-art backstage upgrades including a brand new rigging system, completely renovated dressing room wings (including new ADA accommodations) and all new accompanying electrical, A/V and technical equipment, the Colonial will not only stay true to its legacy of a pre-Broadway touring house, but will now also present concerts, comedians, speaker series and more.

Prior to her role at the Colonial, Erica was the Senior Director of Programming at the Adrienne Arsht Center for the Performing Arts in Miami, FL. She was responsible for developing and implementing a comprehensive and coherent program of artistic presentations for the Center. Some of her most exciting engagements included a four night Sold-out presentation of LOUIS CK, launching the 2017 tour for BILLY CRYSTAL’s latest show and presenting THE ROOTS on New Year’s Eve.

Prior to joining the Arsht Center, Erica oversaw the licensing, booking and touring division of Daryl Roth Theatrical Licensing, placing shows throughout the country and internationally. She led a $25.5 Million Capital Campaign for MCC Theater’s new home on the West Side of Manhattan. During her time at Lincoln Center for the Performing Arts, Erica managed all productions at the newly renovated Alice Tully Hall and the opening of the David Rubenstein Atrium. She brought both buildings online – coordinating with construction, development, box office and production teams and produced a wide range of programming and planning including the two-week Opening celebrations, film premieres, fashion shows, etc.

Erica made her Broadway Producing debut with Neil LaBute’s REASONS TO BE PRETTY (Tony Award nomination – Best Play, Drama Desk nomination – Best Play, Outer Critics Circle Nomination – Best Play). Additional credits include: STRIKING 12 (Associate Producer) nominated for Best Musical, Lucille Lortel Awards and 1001 (Producer). She is an active investor in several Broadway shows – most recently IF/THEN starring Idina Menzel and the current smash-hit HAMILTON. Erica spent over 3 years with 321 Theatrical Management working on such shows as WICKED, THE 25th ANNUAL PUTNAM COUNTY SPELLING BEE and I LOVE YOU, YOU’RE PERFECT, NOW CHANGE. Prior to 321, she developed promotions, events and sponsorships at TMG – The Marketing Group for MOVIN’ OUT, DOUBT, Manhattan Theatre Club, and HAIRSPRAY. She is proud to have begun her career as the Artistic Services Associate for The Chicago Shakespeare Theater, winner of the 2008 Tony Award for Best Regional Theatre.

She is a graduate of Northwestern University where she holds the honor of being named a Distinguished Alumnus in 2008. In addition to her passion for all performing arts, Erica is an avid skier. She resides in Miami, FL with her husband and daughter.

Shownotes:

[00:07] Introduction

[09:41] Buck introduces Erica Schwartz

[10:25] Erica’s theatrical background

[12:39] What does Erica’s job entail

[14:16] The history of Emerson Colonial Theatre

[16:42] How does the theatre business function

[27:43] How to approach the theatre business

[44:15] Find out more about Erica and the theatre business

eschwartz@avalonroad.net

[46:32] Outro

**096: Why Solar Might Start to Shine with Stephen Honikman** Mar 04, 2018
I don’t even watch the news anymore. The advent of the 24 hour news cycle combined with our reality television culture has changed what used to be “news” into entertainment.

The fundamental problem with this juxtaposition of news and entertainment is that something that was supposed to be unbiased—just facts becomes something that has to have an angle.

Plain old facts just aren’t that interesting anymore. They have to be layered in commentary—commentary that sells.

The reality television culture that we live in dictates that anything on TV must be controversial. If it’s not controversial, it’s not interesting.

Think about it. Why do people watch reality TV anyway? Because of the drama—we love to watch a car wreck when we can be safe from harms way.

Reality television allows for dramatic stories of love, hate and betrayal. That’s what makes it addictive. Facts are not addictive.

The irony of the times we live in is that reality TV culture has created a world in which there is, in fact, no reality.

You see this from the highest office in the land—Trump says everything is fake news!

Now, to be clear, I’m sure Donald Trump does not get the benefit of the doubt from the press but does that mean we throw out the baby with the bath water? In other words, if the news is fake, what’s left to believe.

Listen—this is not meant to be written as a political piece by any means. I’m a guy with strong libertarian views but I’m certainly not one to cast aspersions on politicians.

I just think we need to start to return to a fact based society. If we cannot at least establish facts, then how can we ever make meaningful decisions about our future?

This kind of discourse is probably no more important than on the subject of climate change. A few weeks ago, I had on Alex Epstein—author of the The Moral Case for Fossil Fuels.

A lot of you were not happy about that and some of you were quite happy that I had Alex on the show. I just wanted to hear his perspective.

What was funny about that show is that Alex did not actually say that climate change is not real. His thesis was actually whether or not fossil fuels are good for humanity. He also didn’t say that alternative fuels were bad.

But… it got people fired up on both sides—sort of like a reality show I guess.

Anyway, I’m a facts guy and that’s all I’m after. And my guest this week on Wealth Formula Podcast is a pretty hard core alternative energy guy although one who manages to keep his rationality.

You’ll learn all about the facts behind solar energy and alternative fuels and also how they might make sense to add to your portfolio.

So…if you are looking for some reality, make sure to tune in to this week’s show with Stephen Honikman!

Shownotes:

[00:07] Introduction

[11:37] Buck introduces Stephen Honikman

[14:55] Stephen’s counter argument to Alex Epstein

[18:54] The economic argument for alternatives over fossil fuel

[24:29] Alternative vs fossil fuel – Dollar for dollar

[35:22] Why solar?

[38:38] Solar energy and tax

[51:09] Investing in solar energy

[01:00:47] Get in touch with Stephen: **https://wisercapital.com**

For Solar energy inquiries, email Stephen at: **sch@wisercapital.com**

For other inquiries, email Stephen at: **sch@etachase.com**

095: Untold Secrets of the Successful: Jorge Newberry Feb 25, 2018

“Sexual transmutation is the most powerful tool in existence when it come to creation, invention, accomplishment, creativity, advancement, and achievement.”

– Napolean Hill, Think and Grow Rich

This is a quote from one of my favorite books. It’s in the chapter than no one talks about on sexual transmutation.

If you have read the book, you know why. It’s kind of a weird chapter in the middle of the most mimicked book in Self-Help history.

In a nutshell, Napolean Hill says that harnessing sexual energy is the most powerful and efficient means of accomplishing our platonic goals.

It took me a little while to understand what he was saying, but here is how I interpret this.

If you have ever been a teenage boy, you know there is a period of time, for most, where little else seems to matter than teenage girls. I certainly remember that.

I’m not talking about anything necessarily seedy. I’m just saying that there is a certain obsession that accompanies that special time in life.

It’s hard to think about anything else other than the girls you wish would be your girlfriend or, at least, give you the time of the day.

Of course most people eventually find a way to balance these thoughts with other important details in life. However, it’s hard to argue that there is anything more powerful than that kind of obsession.

Now hold on to that feeling of obsession that I’m talking about and now… take the sex reference out of the equation. Have you ever been so obsessed with something in your life that you can’t stop thinking about it?

I have. When I was a kid growing up in Minnesota, ice hockey was on my mind ALL THE TIME and had it not been for a career ending back injury, I would have played college hockey and who knows how far I could have gone.

The funny thing is that by Minnesota standards, I started playing organized hockey a little late. I was 9 years old. When I first started skating I couldn’t even stop. But four years later, I went from the worst guy in the park to one of the best guys on one of the state’s best teams.

I was obsessed. I ate, breathed, and slept hockey. That made up for a lot of my other shortcomings.

Over the years, I have felt similar obsessions at times in my life. For example, when I decided I wanted to be a doctor, I was obsessed with how I was going to get into medical school. And finally, as an entrepreneur, I have been obsessed with the creation of various businesses throughout my career.

The one thing that drives obsession of all kind is the desire for some kind of accomplishment. When it comes to teenage boys, we know what that is. For the entrepreneur, it is something very different.

The most successful entrepreneurs I know are not, in fact, driven by money. They are driven by the idea of creating something out of nothing and seeing it come to life. Money…is just a way to keep score.

I use the example of entrepreneurship here but it really applies to just about anything. Napoleon Hill’s sexual transmutation is nothing more than a reference to the power of being obsessed with something. Olympic athletes, world class chess players, musicians, you name it. The highest achievers in the world harness that obsessive energy to do extraordinary things.

My guest on this week’s Wealth Formula Podcast is a kindred soul. He is as much of a raging entrepreneur as I am and he’s one of the most interesting people I have ever met. DO NOT MISS this week’s show as I discuss the spirit that drives entrepreneurs with Jorge Newberry.

Shownotes:

[00:07] Introduction – Obsession

[09:53] Buck introduces Jorge Newberry

[11:14] Jorge’s story

[13:19] It’s NOT about making money

[14:48] The entrepreneur gene

[19:16] American Homeowner Preservation

[27:09] Jorge’s next step

[30:22] Note Buyer Bootcamp

[37:33] How much do I need to get into this business?

[41:08] Take the opportunity to receive 12% return on AHP before May 24th

[42:22] Get your $200 coupon from wealthformula.com and attend the Note Buyer Bootcamp

[45:13] Outro

094: The ONE thing with Jay Papasan Feb 18, 2018

Are you a great multitasker?

Are you sure about that? After all, it’s impossible to think about two different things simultaneously (I am a former brain surgeon, I know).

So, what does it mean to be a multitasker anyway? Well, I think most people loosely define this term as being able to get a bunch of stuff done at the same time.

But for those of us who do get a lot of stuff done at once are we multitasking or do we just have good time management skills?

I have to tell you that I have always fancied myself a great multitasker as well. I have warn that badge with pride. In retrospect, however, I’m not really at my best when I multitask. I’m at my best when I “serial task”.

In recent years, I have started to realize that multitasking might actually be SLOWING me down.

How many times have you been working on something, shifted your thoughts to work on something else, and then come back to the original project—all within a few minutes? Do you not think that you are losing some efficiency when you transition your brain from one task to the other?

Of course you are. It’s inefficient. You are losing precious time and energy. In fact, I have come to HATE the idea of multitasking. I still find myself doing it sometimes and it drives me crazy!

Not only does it make you less efficient, but it also lends itself to what Zen Buddhists call “monkey mind”—the tendency of thoughts in your head to fling around like drunken monkeys jumping up and down and chattering nonstop.

Do you really think this is a good psychological state to be in? I don’t.

Recently, I read a book from a guy by the name of Jay Papasan—he has cowritten several books with Gary Keller of Keller Williams fame.

The book is called, The One Thing, and really crystalized for me what I had suspected all along. Multitasking is not good.

In fact, it’s actually a consequence of simply not understanding what is important for you to get done in the first place.

Multitasking is a bandaid for poor time management skills. And, if you want to underachieve in life, keep multitasking.

Don’t get me wrong, there is certainly ways of getting multiple things done in short period of time, but there is a way to do it that will take your productivity to the next level.

The One Thing is the best book I read last year because it defines what creates that increased level of productivity.

Make sure to tune in to this week’s Wealth Formula Podcast where I interview author Jay Papasan. This conversation was extremely thought provoking. Don’t miss it!

Shownotes:

[00:07] Introduction

[07:49] Buck introduces Jay Papasan

[09:00] The motivation to write The One Thing

[12:12] Common mistakes to setting goals and prioritizing work

[16:25] The Myth of Multitasking

[23:44] Meditation

[25:09] The art of saying NO

[32:00] A straight line to achieving your ultimate mission in life

[37:30] Learn more about Jay – theonething.com

[40:19] Outro

093: Self Storage is Sexy and Profitable! Feb 11, 2018

Funny thing happened over the last few weeks—I learned how much people love the idea of getting rich fast!

I’m sort of half way joking about this but we had two funds—both Reg D 506c offerings so I’m legally clear to talk about them.

Anyway, one was a highly speculative crypto fund. I emphasized several times that you could lose all your money but that you could also potentially make a lot. After all, I 10X’d in 4 months!

Despite the risk associated with the crypto fund, I had soft commitments of over $2 million dollars within four hours of the presentation!

The second fund was a value add real estate deal—double digit returns, real property, great tax advantages and recession proof. In many ways, what I consider to be the ideal core portfolio investment.

12 hours later, we had soft commitments of about $1 million dollars.

Now don’t get me wrong. That’s still pretty good but it tells us a little bit about our own human nature doesn’t it?

I also want to emphasize that it takes a lot of self-control for me, personally, to not preferably reach for the shiny object over the slow and steady one.

Obviously I’m doing a crypto fund so I’m not against this kind of speculating. I just want to remind you, and myself, that we also need to focus on our core investing principles: real assets, cash flow, etc.

Make sure you don’t ever speculate with money you can’t lose.

Of course any investment comes with the risk of losing money but some are obviously less risky then others.

For example, I have recently become quite interested in the self-storage industry. Frankly, I had no idea how it performed in recessions and it’s consistent track record over the last 3 decades.

It also has some market indicators that suggest that this area of real estate is only going to get hotter and might be the best way to both maximally capitalize on an up market and survive in a down market.

Much of what I learned about this area was from my guest on this week’s Wealth Formula Podcast:Lew Pollack, managing director of Reliant Real Estate Management.

It may not sound sexy, but one thing I have learned over the past several years is that some of the most profitable businesses are the ones that kind of sound boring.

Self-storage is a great example of that. Make sure you listen to the show!

Shownotes:

[00:00] Introduction

[11:41] Buck introduces Lew Pollack

[12:45] Lew’s adventure in self-storage

[15:37] How does self-storage stand out from other asset classes

[19:07] Why is self-storage recession resistant

[21:45] Demographic driver in self-storage

[25:50] Tax benefits

[26:57] Cost segregation Analysis

[19:19] Reliant Real Estate Management, LLC

[33:24] Lew’s investment strategy

[40:55] Outro: Email Buck@wealthformula.com for more information on this self-storage opportunity!

092: Gold, Crypto, and AI with Kenneth Ameduri Feb 04, 2018

Ray Dalio, legendary Hedge Fund Manager and over-all smart guy has been talking about the coming “financial winter” for the last few years. He’s looking at the same things we talk about on this show all the time–near zero interest rates for a decade, ballooning asset prices, quadrillion dollar derivative markets, etc.

Neither Ray Dalio nor I are doom and gloom guys–we were just talking about the facts.

But then…something happened. America got TRUMPED. The stock market took off again and asset prices got even fatter. To top it off, the new tax bill created the biggest tax cut for corporations and wealthy individuals since 1986.

The result–we ain’t going to be seeing winter anytime soon. We’ve got global warming! That is unless there is a black swan event like nuclear war for example.

I saw Ray Dalio on TV the other day and he echo’d that sentiment. He said over the next two year if your money is on the sidelines, “you are going to feel pretty foolish.” the floodgates just opened to massive economic growth and optimism.

So what am I doing? Well, I’m investing and trying to find solid opportunities for my investor club. I’m never sitting on the sidelines anyway. Something is always for sale. And if you want no correlation with the markets at all, there is always life settlements.

But market exposure isn’t so bad right now. Put double digit gains in a product like Velocity Plus that allows you leverage your gains but take no downside and BOOM! You’re going to make some money.

Anyway, we live in interesting times (isn’t that a Chinese curse?)

So, for better or worse, make it work for you.

Kenneth Ameduri has been doing just that as a professional investor an entrepreneur. On this week’s Wealth Formula Podcast, we will discuss everything from gold to cryptocurrency so make sure to tune in.

Shownotes:

[00:40] Introduction

[08:11] Kenneth’s story

[13:30] 2018 in Kenneth’s eyes

[15:55] Politics and the economy

[22:35] The precious metal market

[24:45] The interplay between cryptocurrency and precious metal

[31:57] Artificial intelligence technology

[36:14] Investing in the booming of AI

[38:21] Kenneth’s Crush The Street (https://crushthestreet.com)

091: Crisis, Opportunity with Kathy Fettke Jan 28, 2018

The Chinese word for crisis and opportunity is one and the same.

I know this from personal experience. My entrepreneurial career was launched because of a crisis.

It was 2009 and I had my first job out of training at a company called Lifestyle Lift. You may recall late night infomercials showing miraculous rejuvenation of aging faces.

As it turns out, Lifestyle Lift was basically a facelift mill. Young surgeons like me would sign up and do 3-4 facelifts per day.

Lucky for patients, I was actually a very good surgeon and my results were as good as anyone in the organization—which covered most states and hundreds of doctors.

It was my first experience being a non-resident physician and the money was more than anything I could have made on my own at that point. I made over a half million dollars in my first year out of training.

At first I loved it—this was a novel concept to me. I liked operating and the more I operated, the more money I made!

Understand that as a surgical resident I made $50,000 in my final year of training and it didn’t matter how much I worked.

After a while, though, I realized that there was a guy above me—the guy who owned the entire organization that was making A LOT more money than me and his fingers didn’t hurt from operating at the end of the day.

Having recently read the Cash Flow Quadrant, I started to plot my own business. In reality, I had nothing going. How many people do you know talk the talk but never pull the trigger?

Anyway, that could have been me. However, my big mouth got the best of me. I talked to the wrong people who relayed to management that I was plotting a rival business to Lifestyle Lift—which seemed like a pipe dream at the time.

Anyway, management was not happy with me. They already were concerned about the rocky relationship I had with the office manager who they had hired from a near bye hair salon. I was not keen on the idea of this moron being my “boss”. She made me clock in and out for heavens sake!

Anyway, despite being one the highest volume surgeons that Lifestyle Lift had with a virtually zero complication rate and patient satisfaction that was unparalleled in the organization—they fired me.

I was shocked! I had never been fired before. I had never really failed before and this felt like failure. Anyway, I spent the next few days frantically figuring out what I would do.

I had a newborn and no job. I had some money saved up but not enough to last that long.

I had a choice. I could get another job and make $300,000 per year working for another organization. The problem with that was that I had this sickening feeling that the problem with Lifestyle Lift was not necessarily their fault.

Sure I could vilify them—they were kind of an evil organization. There is no doubt about that. But most corporate organizations are kind of evil from the employs perspective aren’t they?

The bigger issue I had to contend with was realizing, for the first time in my life, the entrepreneur’s curse. I am unemployable.

I’m quite sure that had I taken another job that a similar scenario would have emerged. Somehow I would find myself in the middle of conflict with “the man” and I would probably get fired again.

So I really only had one option—I had to start my own business. Now that was a journey itself that I won’t describe here.

Suffice it to say that at one point, I was down to my last $2000 in the bank but ultimately turned this crisis into my first multi-million dollar business.

Sometimes it takes a swift kick in the butt and free-fall to get you to act on something you were meant to do. Crisis equals opportunity.

Without a crisis like getting fired, it’s hard to walk away from the warm comfort of the golden handcuffs.

My guest on Wealth Formula Podcast had a crisis of her own a few years back—a life and death matter that made her realize that she had to make a change.

The result: a multi-million dollar real estate organization and real wealth.

Listen to this show because it could inspire you to make important changes in your own life.

Shownotes:

[00:40] Introduction

[03:00] Crisis = Opportunity

[14:42] Buck introduces Kathy

[15:37] How did Kathy get started in real estate

[23:25] Kathy’s take on our current real estate market

[27:50] Markets with a bad reputation

[32:12] Dealing with issues on your property

[35:43] The Airbnb industry

[38:09] Real Wealth Network: www.realwealthnetwork.com

[42:42] Outro

090: Podcasting for Fun and PROFIT! Jan 21, 2018

Why the heck did I start a podcast anyway? A lot of people ask me that.

Well, it went something like this. I used to listen to podcasts all the time—most of them real estate related.

But after a while, I realized a few things. First of all, even if I liked a particular podcast, a good chunk of the shows really didn’t relate to me at all.

For example, the shows about making a few thousand dollars flipping houses or wholesaling really were not part of my world.

I was, after all, “a highly educated physician” and successful entrepreneur who had some money already.

I didn’t need to “escape from a cubicle”. I just wanted to make more money and invest outside of Wall Street.

There was NO ONE SHOW that spoke to me.

On the other hand, I got so interested in investing topics that I couldn’t keep my own mouth shut. My wife would take me to a party and I’d be pretty much bored out of my mind unless the conversation turned to either NFL football or the economy.

Once in a while, I would find a kindred spirit and nerd out talking about investing or how to save on taxes.

Over time, I realized that I had learned so much reading books and listening to podcasts that some people actually even ENJOYED listening to me and wanted to know more!

Then it occurred to me—maybe I should start my own podcast.

So I did. The problem was that for the first several shows, no one listened to me and life got busy so I stopped for a year or two.

Anyway, about 18 months ago I decided that I was going to go all in on it so that, at the very least, I could record my own thoughts.

Then a funny thing happened. People started listening. I started getting guests—some of them were even people who weren’t friends doing me a favor. Before you know it, I got invited on other people’s podcasts!

Today, I’ve had up to 30K downloads in a single month. I even interviewed Robert Kiyosaki! It’s really been sort of a crazy ride!

Now here’s the thing—when I started, I didn’t really even think about making money from the podcast. It was just sort of a hobby.

But then monetization became pretty easy. Businesses wanted to sponsor my show and, since I love investing, I started investor club and began my own funds.

It has all been incredibly organic and, from the standpoint of the podcast itself, still doesn’t really feel like work.

Sounds sort of nice doesn’t it? Talk about your passions and make some money doing it?

That’s basically what I’m doing and I’m 100 percent convinced that this is something that you should consider doing as well!

Maybe you are a doctor but, unlike me, actually ENJOY talking about medicine. There are TONS of people who would love to hear you talk. You don’t have to ramble on at parties to people who don’t want to listen to you.

You can literally talk about ANYTHING that interests you because there are others in the world, even if they don’t live near you, that share your passions.

Podcasts allow you to find those people, find your tribe.

And here’s the thing. It’s technically very easy to do and you might even make some money doing it.

I’m hoping to inspire you to podcast so I got my friend Paul Colligan on the show to talk about this relatively new medium.

Paul has taught thousands of people to podcast and is a master at not only the technical part but also on marketing and monetization.

If you think you have something worth sharing with the rest of the world, make sure to tune into this week’s show!

Show notes:

[00:40] Introduction

[02:16] Why I do what I do

[13:10} Buck introduces Paul Colligan

[14:18] How did Paul get into podcast

[20:26] The growth of podcast (www.edisonresearch.com/infinite-dial-2017)

[27:12] Paul’s definition of podcasting

[32:03] What makes a podcast interesting and successful?

[46:37] What does it take for YOU to have your own podcast? The four “M”s in podcast

[51:42] Focus on your passion

[53:08] The podcast advertisement and syndication movement

[58:00] News of the podcast world since Paul’s prediction of 2018 (www.thepodcastreport.com/134)

[01:00:58] Paul’s new book: How to Podcast

[01:02:50] Learn more about Paul

[01:04:54] Outro

089: Why The Rich DO NOT use IRAs Jan 14, 2018

I don’t have an IRA or a 401K. In fact, most people I know who are higher net worth do not.

You see, what I’m realizing more and more as I continue to gradually climb up this wealth ladder is that there seems to be a separate set of rules at each stop.

Don’t get me wrong. I don’t think there is anything wrong with the traditional retirement account paradigm.

It’s just that there are so many other options out there that 99% of people out there know nothing about.

That’s one of the reasons I love doing my podcast. I feel like a special agent from the professional world spying on the ultra wealthy and bringing back their secrets to share with you—I like playing financial James Bond!

Some of these products and strategies I’m learning about are absolutely mind boggling and are actually things that you could be doing yourself.

One of the guys who has been teaching me about some very interesting strategies is Christian Allen. Christian has worked with ultra high net worth individuals for years and he’s now helping us professionals gains some of these perks.

You are not going to want to miss this week’s wealth formula podcast because he is going to reveal some of unbelievable strategies on this show.

Make sure you don’t miss this interview—it really could change your financial life.

[00:07] Introduction

[06:40] Buck introduces Christian Allen

[08:43] The Concept of Retirement Account

[10:13] What’s the idea behind IRA, 401K and so on

[16:36] Where do we save money instead?

[18:46] LIRP – Life Insurance Retirement Plan

[21:09] Velocity Plus – A New Wealth Weapon for High-Paid Professionals

[28:30] “Infinite” leverage

[30:54] How is it different from your typical investment

[35:35] Understanding Life Insurance

[39:13] Risk free investment

[40:56] Wealth Formula Banking is the self-directed version of IRA

[43:08] Wealth Formula Banking vs Velocity Plus

087: Robert Kiyosaki on Why Educated Professionals Make Lousy Investors Dec 31, 2017

You know, one of the interesting things about getting older is that you have the ability to look back and tell a story about yourself—to create a narrative about the moments and the people that, for better or for worse, changed the course of your life.

I remember the day I decided to become a doctor. I remember the day I met my wife. I remember walking into my beach house in Santa Barbara for the first time.

At the time, these moments don’t seem that significant but you realize how quickly, on a day to day basis, little things happen that end up making an enormous impact on the direction of your future.

For me, one of those moments came on the way back from my honeymoon in Puerto Vallarta. My wife and I got married the day after I graduated from residency in 2008 and left for a week in Mexico.

On the way back, I was looking for something to read on the plane. So I found a dingy bookstore that had a handful of books in it—mostly romance novels.

The only book that sounded remotely interesting was a purple book called the Cash Flow Quadrant.

I didn’t know anything about money at the time but I knew I was finally going to start making some after years as a broke surgical resident so I figured I’d try to learn something.

At that moment, I had no idea that making that decision to buy that book in a third world airport would forever change the course of my life.

I’m not exaggerating folks. My identity at that time was as an academic surgeon. I had made my mark by writing papers and book chapters.

The only financial education I had in my life was a macroeconomics class that I took in the last quarter of my senior year of college just to meet a requirement—and I took it pass-fail so I could do the bare minimum.

I had no interest in money and no interest in investing. Like many doctors, I thought of money as dirty and something that people with manners did not talk about.

And, I fundamentally did not understand what it meant to be an entrepreneur–much less consider whether or not I would like to be one myself.

I am not exaggerating when I say that reading that The Cash Flow Quadrant had no less affect on me than being struck by lightening.

After all, who am I now?

In order of how I view my identity:

1) I am an entrepreneur.

2) I am an investor.

3) I am a financial educator.

4) I am a husband and father to three little girls.

5) I am a Minnesota Vikings Fan.

6) I am a board certified surgeon who doesn’t practice anymore.

This is my stream of thought when I honestly ask myself who I am today.

I was 34 years old when I finished my surgical training—the culmination of my formal education.

Thousands upon thousands of hours of study and long hours in the hospital went in to create this identity of a surgeon…and now, it’s number six on my list!

And to be clear, the only thing I regret about this list is that I didn’t get to this point quicker.

We all grow up with talents—many of which we will never know. What if Wayne Gretzky grew up in Africa?

It is truly a gift to be able to find your true calling. Sometimes it just takes a little bit of luck.

For me, this moment of luck came when I stumbled upon the work of Robert Kiyosaki.

Having him on Wealth Formula Podcast this week, for me, represents a momentous milestone in my journey.

Please indulge me, and yourself, by listening to the show!

Show Notes:

[00:40] Introduction (wealthformula.com, ahpfunding.com)

[02:56] The art of aging

[03:38] Remember your life-defining moments

[04:28] The Cashflow Quadrant

[06:45] The “dirty money” misconception

[09:37] What if Wayne Gretzky was born in Africa

[11:57] Buck introduces Robert Kiyosaki

[12:38] How the education system is widening the gap between rich and poor

[17:07] Why the education system refuses to adapt to current climate

[21:34] The “smart people issue”

[23:46] How would Robert redesign the education system

[26:23] What is Robert’s drive in elevating financial well-being

[29:26] Hard asset is the future

[32:07] What does it mean to be really wealthy as a human-being

[34:00] The 4 types of education: academic, professional, financial, and Spiritual

[35:58] New Orlean investment conference

[39:08] Robert’s prediction of our near future

[42:28] Outro

Robert Kiyosaki’s books that were mentioned: Rich Dad Poor Dad, Why the Rich are Getting Richer, More Important Than Money: an Entrepreneur’s Team

086: Tulips or Technological Revolution: Cryptotalk with Teeka Tiwari Dec 24, 2017

In 1593 a Dutch botanist named Carolus Clusius planted several tulip bulbs in his botanical garden and over time he proved their ability to grow in the harsh conditions of the Low Countries.

Tulips were new to Europe and they looked nothing like plants the Dutch had seen. Furthermore, a virus specific to the Tulips (the mosaic virus) made them even more extraordinary.

These particular tulips took years, often over a decade, to cultivate and would bloom with colors that appeared flame-like. It was a site to see.

The novelty and scarcity of these tulips turned them into status symbols for a growing Dutch middle class that was seeing increased prosperity after their new found independence from the Spanish.

Of course this created increased demand and, as a result, the price of tulips.

Soon, the price of tulips became clearly excessive. At the peak of tulip mania, some single tulip bulbs sold for more than 10-15x the salary of the average craftsman—more than the price of the typical Dutch home.

People were “flipping” tulips because of the appreciating market and there was even a futures market for tulips that drove prices even higher!

Then one day in February of 1637, a tulip auction failed to attract buyers. It isn’t clear why although some speculate that the bubonic plague kept most people home.

At any rate, the merchants with tulips were thrown into a panic that resulted in a massive sell-off. In short order, the flowers became worthless.

Now, every time you hear about a wild, speculative market that seems irrational, people bring up tulip-mania.

So, is cryptocurrency the new tulip? A lot of people seem to think so including really smart people like Jim Rickards.

Teeka Tiwari doesn’t think so. He is a former hedge fund guy who has become one of the most vocal proponents of cryptocurrency in the mainstream.

He is my guest on Wealth Formula Podcast this week.

Whatever you conclude, this is a conversation that you simply cannot afford to miss. I believe that distributed ledger technology and cryptocurrency will fundamentally change the world. This is the rise of the internet in the mid-90s.

How, if at all, are you going to get involved?

Buck

Show Notes:

[00:06] Introduction

[03:30] The “Tulip Mania”

[07:56] Is cryptocurrency a “Tulip Mania”?

[09:05] Buck introduces Teeka Tiwari

[10:26] Teeka’s transition to cryptocurrency

[14:18] Is cryptocurrency really a fiat currency?

[16:27] Bitcoin is not a bubble

[18:31] Cryptocurrency is only just beginning

[21:23] The difference between Bitcoin and others

[22:26] What is a blockchain?

[25:44] Will blockchain technology be replaced?

[27:49] Cryptocurrency as a laundering mechanism

[29:40] The definitive concept of “coin”

[35:14] Common misunderstandings of cryptocurrency

[38:57] When should you sell your Bitcoin

[40:28] How to reach Teeka: palmbeachgroup.com, joinbigt.com.

085: Accredited to Accredited with Gena Lofton Dec 17, 2017

I am a refugee of the Thomas fires that crept dangerously close to my home in Montecito, CA.

That’s why my audio sucks on the introduction of this week’s podcast. Fortunately the actual interview was done before my evacuation.

As I mentioned in the introduction of last week’s show, I woke up to ash on my deck and my smoke detector went off without any apparent fire.

The air was clearly getting worse. So, my wife and I made the decision to drive about a hundred miles north to San Luis Obispo.

That worked for a couple days until we saw smoke creeping over the mountains. It was a little eerie—like it was following us.

So, we got back in the car and drove up to Santa Cruz where my wife grew up. We’ve been away from home living in a hotel for about a week now.

Now…we didn’t really anticipate being gone for this long so we didn’t bring much.

We were pretty stressed out and the kids could feel it. They were scared and emotional.

In the midst of feeling sorry for myself, I started thinking to myself—imagine what it would be like if you had someone shooting missiles at you at the same time and you couldn’t feed your kids.

That’s what’s going on in Syria.

Now how does that kind of reality affect a five year old boy’s perspective? What if he sees horrible things and feels hopeless every day?

How does that manifest itself in adulthood?

Of course, since this is ultimately a show about money, I’m thinking about this in financial terms.

If you grow up not knowing if there will be food to eat or if you have a roof over your head, how does that influence your view of the financial world as an adult?

I don’t think there is one answer to that question. I will tell you this, however. My dad grew up in India dirt poor—now that’s poor. He started tutoring other kids in the neighborhood as a child and helped put food on the table for his family.

As an adult, he came to the US in the late 60s on an engineering scholarship and he never looked back.

The opportunities that he saw in this country—well, he was like a kid in candy store!

I truly believe that his experience as a kid working to survive without safety nets served him well as a scrappy real estate entrepreneur who truly lived the American dream.

What about the rest of us? How can we tap into our inner immigrant?

It’s hard. You have to imagine a world without the structure we are so accustomed to having. You have to imagine a world where simple things like clean water and a roof over your head are not guarantees.

If you do this, the world seems a lot more scary. But..maybe a little bit of that perspective is healthy?

After all, most of the security we feel is artificial.

Take for example the concept of job security. There really is no such thing as job security. If you work for someone else, you are at the mercy of your company’s financial performance. Just because you don’t get to see company financials doesn’t mean they don’t exist.

And…if you are the boss and you own the business. You know even better that there is no such thing as job security because you have likely been confronted with the prospect of letting people go and because you see your own financials go up and down!

You see, behind our façade of a “secure” world is an underbelly of reality that we should be cognizant of and for which, at the very least, we should be prepared.

The major difference between immigrants fleeing hardship and most of us living comfortably in this country is that many immigrants have seen the world without its makeup on and it ain’t pretty.

I am grateful that I have not experienced that world, but I know that it exists.

Gena Lofton did not grow up in a war torn country but she did grow up homeless in this one—that world isn’t pretty either.

On this week’s Wealth Formula Podcast, learn how Gena used her experience to leverage into the world of the accredited investor!

Show Notes:

[00:07] Introduction

[00:19] AHP Webinar opportunity on Tuesday December 19

[02:06] Fleeing from the Thomas Fire

[06:00] Tap into the “inner immigrant mentality”

[10:32] Buck introduces Gena Lofton

[12:10] Gena’s life story

[16:06] Her struggle helped her to become who she is today

[17:06] Unconventional upbringing = unconventional wisdom

[21:30] Robert Kiyosaki and his experience in Vietnam

[22:50] Gena’s philosophy of investing: Velocity

[25:45] Newtonian physics of wealth creation: Momentum = Mass x Velocity x Leverage

[28:45] Classic Ken McElroy real estate maneuver

[31:50] Why an increase in National debt demands proficiency in effective personal investment

[33:14] Get on opportunities that are on sale

[36:42] Gena’s new show: Accredited2accredited (http://www.accredited2accredited.com)

[40:29] Don’t take financial advice from people with less money than you

[46:44] Outro

084: Preparing for the Storm with Chris Martenson Dec 10, 2017

I cannot tell a lie…

Despite the fact that I am a libertarian and seem to run in circles with some pretty depressing people:

I do not see the future filled with doom and gloom.

I do not believe that the United States is screwed and that you should start preparing for Armageddon.

I do not believe that you need to buy a wheelbarrow to carry your cash to the supermarket in hopes of buy the last loaf of bread on the shelves.

I do not own any army fatigues nor do I have a hide out place in the mountains.

No…overall, I’m pretty optimistic about the world and our future.

What history tells me is that we, as humans, are pretty good at adapting and are pretty good at solving the problems of our day.

In 1798, Thomas Malthus famously predicted that human population growth would outpace the world’s food supply and push us back into darker times.

It didn’t happen. Instead, we just invented some better farming equipment.

Technology always moves quicker than we think it will. Look around you. Much of what you see around you technologically will be obsolete in 20 years.

It reminds me of walking down the street in London with my oldest daughter when she was 4 years old. She saw a phone booth and asked, “Daddy, what’s that?”

Now, I am not saying that we are not going to experience some tough times. I’m sure we will. I think we are at a time in history when there will be some dramatic shifts in the world economy that will result in some fairly dramatic shifts to the world as we know it.

But…I think we will land on our feet and I have no doubt that the United States of America will continue to be the envy of the world until the day I die.

I don’t need another passport. If the US is going down, there will be no place to hide. I know people feel otherwise, but I’m not one of them.

It’s probably because I am the son of immigrants who barely had enough to eat who came this country in the late 60s and became a real estate millionaire.

So, I don’t prescribe to apocalyptic beliefs about this world or our country.

But…like a fellow Minnesotan said back in 1964, “The times they are a-changin” and to not recognize that and be ready to adapt is not very smart either.

The biggest concern that I have for my children is climate change. Now I’m not going to get political here and I don’t pretend to know the solution.

Alex Epstein gave us the moral case for fossil fuels a few weeks ago and I don’t know if he’s right or wrong.
But… the weather is getting funky. Can we agree on that? That was a lot of hurricanes this year, right?

If you don’t believe something’s going on, how many thousand year storms do you need to have in one year to convince you otherwise?

I’m hoping we figure this one out and maybe we will. I saw something on TV the other day about how sending a bunch of sulfur dioxide into the air could reverse global warming.

That sounds great except…would that mean that everything would smell like rotten eggs?
In the meantime, we’ve got a new reality on our hands. The weather is really unpredictable and it made me realize that survival strategies aren’t just for people wearing camouflage anymore.

After all, look at Puerto Rico. No electricity for how long? Houston?

What if you spent a little time now on coming up with a strategy for food reserves? What about medication? Maybe you are a diabetic or an asthmatic. What would happen to you if you weren’t able to get your medication for a month or two?

What we’ve seen happen in some of these areas with big weather related catastrophes makes this all very real doesn’t it? It does for me.

That’s why I asked Chris Martenson to come back on Wealth Formula Podcast this week. Chris is a smart guy. There is no question about that.

He backs up everything he says with a tremendous amount of financial and scientific data.

Given the flux of the global economy and geopolitics along with what happened to the weather this year, I couldn’t think of a better person to speak to as we approach the New Year.

So if you want to be prepared for all the changes that are happening in the world today, do not miss this episode of Wealth Formula Podcast!

083: What You Need to Know About Gold with Dana Samuelson Dec 03, 2017

Thousands of years ago, in the Roman Times of Christ, you would go to your local store and trade your ounce of gold coins for a nice toga and a pair of sandals—something worthy of wearing to the coliseum.

Today, an ounce of gold will buy you a pretty nice suit and a pair of shoes—something worthy of wearing to the theater.

Gold is money and it has been for centuries.

That’s a pretty good track record and that’s why “gold bugs” hang on to it like they do. After all, these days we have little more than “fiat currency”.

Fiat currency is money that a government has declared legal tender. These days, it’s paper with some ink on it. Inherently, it has no value. It is not backed by anything except for trust in the government that issues it.

When you think of it, it’s kind of scary right? What gives our money value is nothing more than a collective agreement that it means something. What if people started not “believing” in the currency anymore?

We’ve seen it happen in history multiple times. Usually it is the result of hyperinflation such as seen in Weimar Germany—you remember the images of people bringing in barrels of money to buy a loaf of bread.

It’s hard to have much faith in currency when it literally AND figuratively isn’t worth much.

Why does hyperinflation occur? Well, it usually has to do with governments trying to pay off their exorbitant debts. In the case of Weimar Germany, it had to do with ongoing debts of the first World War.

Today, we have 20 Trillion dollars of national debt in our country. How are we going to get out of it? Tax cuts?

Listen, I love tax cuts but the idea that tax cuts are going to get us out of a $20 Trillion dollar hole is not going to happen.

In the meantime, like any debt, interest has to get paid. If you aren’t generating enough tax revenue to pay the interest, what are your other options?

Well, you could default on the payments. That is probably not a good idea for our sovereign credit rating.

Well, if you aren’t going to default on the interest payments and you aren’t creating enough tax revenue to pay the bills, what’s left?

There is only one option—make your debt worth less. How do you do that? Inflation right? Inflation erodes debt. If you dilute the buying power of your currency—just print more money—then it’s a lot less painful to pay it back!

Why do you think the federal reserve has a target inflation of 2 percent historically? Again, over time, if the value of the currency is less than at the time the money is borrowed, that’s a pretty darn good deal for the borrower.

Why do you think I love using debt in real estate so much? It’s like printing your own money! And with 20 Trillion dollars of debt to pay off and a relatively stagnant US economy, do you think the powers that be might want to see inflation tick up just a little bit?

Now in an economy like ours, hyperinflation like that seen in Weimar Germany, Latin American or African countries is not likely, but it certainly can pick up quite a bit. As recent as 1980 inflation peaked at 14.76 percent.

Can you imagine losing almost 15 percent of your buying power year over year without a significant increase in income? Ouch!

But stuff like that happens in the world of fiat currency. The US dollar, has no intrinsic value and you can print as much as you want.

Say what you will about cryptocurrency, but there is a finite number of bitcoin (21 Million) and the only way it increases in value is through demand.

No wonder the gold bugs are as passionate as they are. Gold is finite and has been real money for thousands of years. Owning it makes them sleep better at night.

Should you own gold? That’s for you to decide but if this topic is foreign to you and you have not considered it before, it’s probably a good idea to listen to this week’s Wealth Formula Podcast as I interview Dana Samuelson from the American Gold Exchange.

Don’t miss out!

082: The Moral Case for Fossil Fuels Nov 26, 2017

Why do you believe what you believe?

Are you a republican or a democrat? Are you pro-choice or pro-life? How about guns? Should guns be outlawed in the United States?

Do you ever look at the “other side” and wonder if they are absolutely nuts? “How could they believe what they believe and stand for what they stand?”

Do you remember when there were only facts?—Not alternative facts?

Do you remember a world without a 24 hour news cycle that argued past each other all day and all night using professional pandits?

Intelligent discussions–debates like those from my childhood between intellectual giants such as William F. Buckley Jr. and Gore Vidal just don’t make for good TV anymore.

The problem is that we have a lot of serious stuff going on these days—crazy weather, mass shootings, a short fat North Korean dictator armed with nuclear weapons and a president who tweets our foreign policy.

If you are a person who likes a good old fashion debate based on real ideas, you’re pretty much out of luck these days.

In fact, if you think deeply about your own opinions, how often are they the product of the opinions around you rather than ones you have made through careful thought?

Believe me, I am guilty as anyone else. I am often dogmatic about issues that I may not have truly considered the opposing view.

One of the more pressing issues of our day is the use of fossil fuels.

Now I live in California and, like most Californians, I care about the environment. My knee-jerk response is to say yes to anything limiting fossil fuel emissions.

But maybe there is another way to look at the issue. Maybe there is a moral case for fossil fuels.

My guest this week on Wealth Formula Podcast wrote a book making just that case. Alex Epstein is the New York Times best Selling author of The Moral Case for Fossil Fuels.

Now whatever your biases are going into this show, do yourself a favor and keep and open mind. Alex is a philosopher by training and he is not only going to give you his argument, but he is also going to show you how he constructs it.

Make sure to tune in to this episode. It’s a unique look at an important issue.

081: Become an “Insider” with Nick Hodge Nov 19, 2017

When you listen to my podcast or read my book, you might think I am rigid about my investing. After all, the principals of wealth creation that I teach are:

Invest in cash flowing assets.
Understand how your investments work.
Invest in real things—things you can see touch and feel.
Invest in things that people need—like places to live, food, and water.
Use the mathematical principals of wealth creation—namely velocity and leverage.

Does that mean that every time I invest in something, I do a checklist to make sure each one of these criteria is met?

No—clearly not. As you may know, I am a huge fan of the life settlement asset class:

There is no monthly cash flow there and I don’t know if an insurance policy counts as something real or not.

However, I do know that people who are over eighty years old and have multiple health problems die and that buying their life insurance policies at a huge discount is a pretty good bet.

In that scenario, the cards are clearly stacked in my favor as an investor.

When else might I consider breaking the rules? Well, I will say that over the years, as my own wealth has grown, I have realized that one of the biggest principals wealthy people use to grow their own wealth is “insider information”.

Now, let’s be clear, I’m not talking about the illegal Martha Stewart stuff. I am talking about knowing people who are some of the top authorities in a given asset class—the people that make markets or who are truly elite operators.

The wealthy know these people and find out about things ahead of time. They get their money in early in these opportunities. By the time the general public hears about the opportunity, there is little meat left on the bone.

Meanwhile, the insiders enjoy massive gains and might even exit their positions while the outsiders continue to buy up scraps.

Now here’s the problem, as a high paid professional, might have. You make a lot of money, but just not enough.

Or, maybe you make enough, but you don’t live in THAT WORLD. The way you invest is no different than the way the poor and middle class do. Does that sound like you?

If so, understand that you are still fodder for the market makers. You aren’t an insider.

Who are these market makers anyway? It’s hard to get to know those people and about those opportunities if you aren’t wealthy.

I’m sure you suspected something like this already and I’m here to tell you that you are right!

Now I’m doing my best on Wealth Formula Podcast and through this community to help you get in on some of that unfair advantage of the wealthy and hopefully you have learned things already that have opened your eyes to a whole new world.

But, there are some things to which you will remain an outsider until you really start creating significant wealth and/or start living in the insider’s world. That goes for me as well. There are layers to this insider thing—like peeling away at an onion.

I’m further in then most but I’ve still got lots of layers to peel ahead of me.

As you get into deeper layers of this world, the advantages become even more apparent. That’s another reason why the wealthy continue to get wealthier over time.

None of this sounds fair right? Well, it’s not but life isn’t fair. You need to focus on finding your own unfair advantages.

If you prefer, you can also forget about this insider thing for now and protect yourself by simply using the fundamentals of cash flow, real asset investing, velocity and leverage to build wealth the old fashioned way.

Just know, that this “insider’s world” does exist and that if you tap into it, it can help you tremendously on your wealth building journey.

My guest on Wealth Formula Podcast today understands this whole concept of the “insider’s world” well. In fact, he has built an entire community of outsiders to try to make sense of the bizarre world and economy in which we live.

Like me, he tries to help individuals who are “outsiders” get in on some of the insiders’ action.

His name is Nick Hodge, founder of the Outsider’s Club and he is my guest on Wealth Formula Podcast this week. You won’t want to miss this episode!

080: Ask Buck Nov 12, 2017

Being a podcaster is kind of unusual. Last month I had over 30K downloads (not bad) yet I only speak to a fraction of you through investor club.

Even fewer of you know each other despite the fact that you have a lot in common.

The good news is that I will be launching a course in the first quarter of next year that you are going to love and it will also include an opportunity to join the Wealth Formula Network–my new online community.

That’s where I am planning to spend a lot more of my time and to be accessible to my listeners via Facebook live and other digital hangouts.

In the meantime, I want to make sure I continue to involve myself in this community as much as possible. One way for me to do that is by answering your questions.

In recent months I have done that mostly through direct emails or via the Weekly Wealth Widget. This week I’m going to do it with an episode of “Ask Buck”.

Make sure you keep sending those questions and comments in–that’s what it’s all about on my end.

Hope you enjoy the show!

079: Self Directed IRAs and Solo 401ks with Theresa Fette Nov 05, 2017

Last summer I learned how to swim for the first time. I was an athletic kid but somehow missed that window in my life when it was ok to not know how. After all, when you are two or three years old, not knowing how to swim is par for the course–but not when you are a teenager! By that time, it became too embarrassing to go to a swim class–especially when you have a huge ego like mine anchoring you down in the water.

The funny thing is that, despite not being able to swim, I really was not afraid of the water. You might even say that I had an irrational LACK of fear when it came to water. I went snorkeling all the time and loved being in the ocean. Talk about a sitting duck for an undercurrent!

Now, I am 44 years old and I am at that stage in my life where I am trying to make up for some of the things that I didn’t do when I was younger. So, last summer, I decided that enough was enough. I needed to get this swimming monkey off my back.

After expressing my frustrations to my friend Zed Williamson, he fortuitously sent me a video of Tim Ferris talking about the Total Immersion technique created by Terry Laughlin, a legendary swim teacher. Tim, too, had struggled with swimming and despite having tried harder than me with multiple coaches and even Olympians, had failed miserably. That is, until he found Terry. Terry taught Tim Ferris to swim and Tim Ferris seemed like he was a tougher case than me.

So, it became clear to me that I needed Terry to teach me how to swim. I headed out to upstate New York for 2 days of intensive training with him. Remarkably, In just 3 half day sessions over two days, Terry taught me how to swim. The way he did it was masterful. It was like Mr. Miyagi training the Karate Kid.

Terry was a master who dissected out the intricacies of swimming to its basic components and that made it possible for him to teach his art to even the most hopeless of cases–Tim Ferris and me for example.

I was so excited about my new skills that I asked Terry if he knew a coach in Santa Barbara that could continue to help develop my skills. As it turned out, he was planning to spend the winter in Santa Barbara anyway which was great for me. He was planning to come out in November. I couldn’t wait to work with him and also have him teach my daughters the Total Immersion Technique.

So, last month (October 2017), I emailed Terry to check in when he was coming to town. There had been a change of plans. Unfortunately, Terry had been fighting aggressive prostate cancer for some time and it had spread to his bone marrow. My last email correspondence with him was October 9th. He still seemed very optimistic.

Sadly, I learned this week from Tim Ferris’ updates that Terry passed away just 11 days after that email he sent me. Tim had recorded an interview with him just two weeks before his passing and it is the most current episode on his podcast. I encourage you to check it out. This was an amazing guy and I feel lucky to have gotten to know him.

Terry was a true teacher and a master. Swimming was his art but his methodology and philosophy could be applied to just about any field–even money and investing.

In some ways, I’m trying to emulate Terry. I’m trying to take something that is seemingly complex as growing financial wealth and trying to “master” it. I’m ahead of many people but I still have a great deal to learn. I’m also doing my best to teach you what I know because that is my mission.

Listen, I know there are A LOT of highly educated people out there who haven’t a clue about money and investing but, like me with swimming, feel embarrassed to admit it. Ego is a terrible thing–can make you drown and it can make you broke.

So, if you are one of those people who feels like they ought to know more than they should at this point in their life about money–I’ve got great news. You don’t need to get in the pool with a bunch of youngsters and admit your weaknesses. Just listen to my podcast!

In fact, this week’s episode of Wealth Formula Podcast is about something that VERY FEW people in the general public even know is possible–investing in real assets like real estate with your retirement account.

Don’t miss this episode. Start putting your money to work for you!

078: Zen and the Art of NFL Football with Dr. Colleen Crowley Oct 29, 2017

How our brains have evolved over time is a funny thing. The same things that make us wildly successful in life have the potential to make us miserable.

This is the cruel paradox of the high achieving, high paid professional.

We are strivers and we have very high expectations of ourselves. That’s not a bad thing at all. I would be lying to you if I told you that I am any different.

The problem is that expectations CAN make you miserable.

In fact, some say the key to happiness in life is low expectations! I guess I can see that.

BUT, I am not going to convince you, the high achieving professional, or me to set our expectations lower.

Nor should we–we type A personalities were designed to conquer, to be tribal leaders, to push the limits for the betterment of humanity.

Without people like us…we’d still be in the stone ages:)

But…on the other hand, we must tame the beast within—we must identify that our expectations are dynamic. They constantly change as we continue on our journey through life.

Just because you’ve taken down a 2000 pound buffalo doesn’t mean that the hunt is over. NO! You’re going to move on to the next hunt. That’s the way you role. Those are your expectations.

And that’s ok as long as you don’t confuse expectations with destination.

What’s your destination? Your destination is where you can find fulfillment–holistic wealth as I refer to it.

We type A’s sometimes have a lot of trouble it and some of us could use a helping hand to get there.

Fortunately, there are some out there built to help guide us–to be our sherpa’s towards the pinnacle of wealth–self actualization and happiness.

One such sherpa, is my guest on this week’s Wealth Formula Podcast. Her name is Dr. Colleen Crowley (www.drcolleencrowley.com) and she specializes in helping high achieving, high paid professionals find true happiness.

So, If happiness is important to you, don’t miss this week’s episode of Wealth Episode Podcast.

077: Confessions of an Artificial Intelligence Hedge Fund Manager: Howard Getson Oct 22, 2017

Why do I advocate investing in real things like real estate and precious metals instead of stocks, bonds, and mutual funds? Because I understand them and they are, for the most part, predictable.

I understand that, when I buy an apartment building, people have to pay me rent. That property might go up and down in value but as long as I’ve got a pretty good margin of safety, the rent and income that I receive on a monthly or yearly basis is pretty predictable.

Apartment buildings are also a pretty good hedge against inflation. Rents go up in an inflationary environment and so does the value of my property.

Similarly, gold is an excellent hedge against inflation. In the Roman times of Christ, an ounce of gold bought you a toga and a nice pair of sandals.

Today, an ounce of gold will buy you a nice suit and a pair of shoes.

Does that mean that I NEVER invest outside of the cash flowing real asset paradigm? I wouldn’t say never.

Again, the reason I like real assets is that I understand them and they are, to a great degree, predictable from my perspective.

But that’s my perspective and someone else may have another perspective that allows them to have a competitive advantage in a different type of investment paradigm.

I don’t begrudge anyone who uses the advantages they have to their own advantage. In fact, when I take a step back at my broader investment philosophy it is this, “invest in things where the cards are stacked in your favor”. By the way, that’s why I love life settlements! ()

Now I’ve never felt that the cards were stacked in my favor when it came to the equity markets. In fact, I really don’t believe they are stacked in any retail investor’s favor. We are all gamblers at the casino and the casino always wins.

UNLESS–you have an “unfair advantage”. I remember watching a documentary a few years back about the MIT blackjack team–basically a bunch of math whizzes who went to Vegas undercover and cleaned house by counting cards and using other computer generated algorithms to win.

I’m not a gambler. But if I could count cards like the MIT Blackjack team I’d be at the casino because, again, the cards would be stacked in my favor.

So how does this pertain to you?

You’ll find out in this week’s Wealth Formula Podcast where I interview Howard Getson, the founder of an artificial intelligence based hedge fund called Capitalogix.

This might be just enough to finally convince you to pull out of the markets!

076: Setting Your Wealth Thermostat: Rod Khleif Oct 15, 2017

The wealthy think differently than most of us–

Here’s the challenge–In order to be wealthy, you must think like the wealthy!

“But Buck, if I don’t know how they think how can I do that?”

Well, I’ll tell you.

You see my job on Wealth Formula is to infiltrate the world of the wealthy. Think of me as a spy like 007 stealing secrets from the wealthy and passing them on to you.

That’s what I love to do.

Now here’s something that I have noticed. The wealthy set their wealth thermostats higher than the middle class or even high paid professionals.

What’s a wealth thermostat? Well, tell me what kind of yearly income makes someone rich. Is it $250,000 per year? Is it $5 million per year? $100 million per year?

If I ask 10 of you, you will give me 10 different answers of what you THINK is rich.

Now, your answer to this question is a strong indicator of your wealth thermostat.

I call this a thermostat because our minds have a funny way of making our thoughts into reality. If you think of a certain amount of money and think it’s too much then it is.

YOU WILL ALWAYS HAVE THE AMOUNT OF MONEY THAT YOU THINK IS NORMAL FOR YOU.

The funny thing is that the thermostat also helps you from going below a certain level of wealth.

Look Donald Trump—that’s an extreme case. He was in serious dire straights in the early 90s. He was several billion dollars in debt (and not all good debt either.)

But, talk about a guy with an off the charts wealth thermostat—this guy is now 3.5 billion in the black.

My point–If you want to be wealthy, you have to think like the wealthy. Financial wealth comes mostly from mindset.

This week’s guest on Wealth Formula Podcast is another great example of the wealth thermostat at work. His name is Rod Khleif. Rod went from rags to riches then went back to rags for a while.

In this week’s interview he’ll talk about that journey and what helped him, once again, return to the joy of riches as a successful real estate investor.

Don’t miss this episode!

075: Maslow’s Hierarchy of Investing with Mike Ayala Oct 08, 2017

In 1943, psychologist Abraham Maslow published a paper called “A Theory of Human Motivation.”

In this paper he described, what has come known as, Maslow’s Hierarchy of Needs. Basically its a pyramid structure describing different human motivation drivers.

At the bottom of this pyramid lies physiological needs–food, water, etc. The next level up is safety and security. In other words, you need a roof over your head.

The pyramid continues upwards to its pinnacle, self-actualization–the ability to focus on one’s mission in life. I call this true wealth.

After all, it’s tough to focus on your mission in life when you are trying to put food on the table AND trying to keep your family safe from wild animals and infectious disease.

Trouble finding one’s mission in life is a first world problem.

Now–let’s apply these principles to investing. In tough financial times, where should you focus your investments? Maybe low income housing makes sense? The problem is that low income housing is often very difficult to manage.

I can tell you from personal experience with the first apartment building I ever bought–low income housing usually looks better on paper.

Understand that I am not made to be a slum lord. My father made millions of dollars throughout his life collecting rents with a baseball bat in one hand but I did not get that gene.

Now, if you can find people who are really good operators in this space, there is a lot of money to be made and you can actually do a lot of good for the communities. One of the few operators in the low income housing space that I trust is Mike Ayala. Mike and his colleagues are killing it in the mobile home park space.

So, if you want to learn more about how Maslow Level 2 investing can help your portfolio, make sure to tune in to this week’s episode of Wealth Formula Podcast.

074: Make an impact AND make a profit! Oct 01, 2017

I cannot tell a lie–in my first business I made a small fortune sucking fat from places where people didn’t want it and putting it back where they wanted more!

I told Robert Kiyosaki about that last April and that’s how he remembered who I was the rest of the cruise.

My wife hates it when I talk about this past life but it’s true. Personally, I liked what I was doing for the first couple years. Listen, cosmetic surgery gets a bad wrap sometimes.

To me–I was helping people get over their hangups. It let them NOT obsess about their looks and MOST of the time it really improved the quality of their lives by giving them confidence.

But after a while, it started feeling like a job that I had to do. That’s when I phased out and moved on to the next thing.

These days my time is devoted to you and, from some of the kind feedback you have given me, I believe that I am really making an impact on some of your lives.

The cool thing about that is that all I am doing is sharing stuff with you that I love talking about and learning. This is the best gig I’ve ever had! Maybe not the most profitable but its certainly been the most fun.

You know…I don’t know anyone who loves what they do that doesn’t feel like they are, somehow, making some kind of difference.

Now what about your investments? Do you care if they make an impact? I do. I feel good knowing that I am able to grow my wealth and, at the same time, make a difference in the world.

That’s why I love funds like American Homeowner Preservation (AHPFunding.com) – Jorge Newberry’s fund that buys failing mortgages at pennies on the dollar and keeps people in their homes by renting it back to them while, at the same time, making investors a great return.

My guest today has another feel good business. This time, it’s a crowdfunding platform called impacthousing.com that buys apartment buildings that are underperforming in rough neighborhoods and turns them into places that anyone would live. They even provide programs to feed kids and help them stay healthy.

This is my kind of business folks. Make sure to tune in to this week’s Wealth Formula Podcast to learn how your money can make an impact and make a profit at the same time!

073: What the heck is bitcoin? Sep 24, 2017

“Can you explain what internet is?”

That’s the question Katie Couric asked her colleagues on the Today Show in 1994 as an equally confused Bryant Gumbel looked on.

Now don’t you wish you knew what the internet was back then? Don’t you wish you had enough foresight to see this seismic shift in not only technology but in our world? If you knew what you know now, what would you have done?

Of course the easy answer is “buy google or buy amazon!” But that’s not what I mean. If you knew what you know now, my guess is that you would learn everything you could about this new technology and how you could get a piece of the action.

That is where we are with blockchain technology. “Block-what?” you ask in your best Bryant Gumbel voice. Exactly. Few people understand blockchain but I AM CONVINCED that blockchain technology will become as ubiquitous as the “app”.

Most people are familiar with blockchain mostly by a currency built on that platform called bitcoin. However, currency is just the tip of the iceberg with blockchain.

Blockchain technology will fundamentally change the way we do business, make transactions, and interface with the world.

And with regard to currency, it can’t be stopped. Why? Because cryptocurrency lies at the confluence of a very unique place that brings libertarians clamoring for privacy, computer geeks, and anti-Wall Street/anti-central bank people all in one place. That is powerful.

Now listen, I know some of you out there are saying, “Buck, I can’t see it, touch it, or feel it so why should I care? After all, I should be focussing on tangible assets, right.” You’re right, but I’m not talking about investing in it. I’m asking you to recognize it for what is–the future.

Furthermore, cryptocurrencies are no less real than the American Dollar. In fact, bitcoins are limited in number, transacted directly from one person to another, and have a decentralized ledger that makes it virtually impossible to hack.

On the other hand, the US dollar can (and is) printed at will, often requires a third party to facilitate transactions and can easily be hacked or counterfeited.

In fact, I will go as far as to say that cryptocurrency shares more features with gold than it does the US dollar.

Now I can’t explain this all to you. First of all, I am no bitcoin or blockchain expert. However, I do know enough at this point to be absolutely convinced that blockchain technology and some kind of cryptocurrency will be commonplace in our daily lives a decade from now—probably even sooner.

With that in mind, this week’s Wealth Formula Podcast will try to help you get up to speed on this stuff. In fact, I guarantee that by the end of the podcast you will know more than 99 percent of people out there about this brave new world of blockchain.

Of course I’m not qualified to teach on this topic. That’s why I got one of the world’s pioneers in blockchain technology, Reeve Collins, to do it for me.

Don’t miss this episode!

072: Automate Streams of Income Through Amazon! Sep 17, 2017

Robert Kiyosaki opened my eyes to the notion of passive multiple income streams 9 years ago and it changed my life. Of course, my dad had been talking about “cash flow investing” since I was born but for some reason I was too dense to figure out what he meant.

In the context of Kiyosaki, multiple streams of income has generally been interpreted as investing in real estate. After Rich Dad Poor Dad was published in 1997, a generation of real estate groupies was born! You couldn’t help but get excited. You get a few houses or apartment buildings cash flowing, and before you know it, you are financially free, right?

For those of you out there actively trying to make this happen, it is a little bit harder than it sounds, isn’t it? For one, finding properties that cash flow and won’t end up costing you money in the end is actually a lot of work and takes some level of expertise.

That’s why we have the Wealth Formula Accredited Investor Club– to help facilitate opportunities and to help you deploy your capital. Beyond finding deals, however, there is also the challenge of not having enough capital to deploy to get you to your financial goals in a time frame that you might find acceptable.

A good cash on cash rate of return on real estate is 10-12 percent. Let’s break that down. You save $100K and deploy it in an opportunity that yields 12 percent cash on cash. In exchange for your $100K, you get $1K per month. If you are a $100K level investor, that extra $1K per month is probably not going to be enough to free you of your golden handcuffs. You’re going to need a lot more capital over time.

OR–you could find something that makes you A LOT MORE return on investment than owning real estate. You could invest in a business. Truth be told, I own four cash flowing businesses that account for the majority of my income. I certainly do own plenty of real estate and other assets, but the businesses I own are the assets that throw off the most income by far.

To be clear, I consider my businesses cash flowing assets just like my real estate–multiple streams of income does not mean it all has to come from rental homes, or owning notes.

Of course, owning businesses is far more volatile and risky than owning apartment building as a general rule. The key to making this strategy work, in my humble opinion, is to have a portfolio of assets with different risk/reward profiles that includes high cash flowing businesses.

The problem for most people is that they do not have enough time or the expertise to start a business. There is also an initial capital cost to start or purchase a business that, if you fall flat on your face as an entrepreneur, could result in a painful financial outcome.

So, as your Wealth Formula sherpa, I’ve been on the lookout for ways that you too might be able to participate in business ownership with relatively low financial risk and I think I may have found one.

I know a handful of people who have done really well on Amazon over the years so I wanted to present this option to you–one that I might be looking into myself at some point with my eight year old daughter.

To discuss the Amazon option, I invited Dylan Frost on this week’s Wealth Formula Podcast. Dylan is behind thewholesaleformula.com and will tell you how to create streams of income on amazon that you can automate. Make sure to check it out!

Buck

070: Real Estate Investing with Russell Gray! Sep 03, 2017

I have said on a number of occasions that Wealth Formula Podcast is NOT a Real Estate Show. So why do we talk so much about real estate?

Well, for people who want to grow their wealth, there simply is no other asset class with a better track record and more upside than real estate.

The Wealth Formula Principles for Wealth Creation are:

Invest in tangible things, not paper.
Invest in cash flowing assets preferentially.
Invest in things you can understand. Complexity is a tool used by Wall Street to siphon away your profits.
Utilize the concepts of velocity (ie. Re-invest quickly) and leverage to increase and amplify your returns.
Invest in financial education.

If you are reading this, you are already working on principle #5. You can easily put in to play principles #1-4 by investing in real estate.

On the other hand, if you are investing in gold, it is hard to cash flow and it is hard to use leverage.

That doesn’t mean you shouldn’t invest in anything that does not follow these five principles. As long as you know the rules, by all means, break them.

I break them all the time. I own gold. I own life settlements. There’s a reason for them all. But the majority of my investments outside of my businesses are in real estate.

And, if you want my opinion, that’s what anyone wanting to build wealth over time should have as their PRIMARY investment focus.

Of course, it is very important to learn about real estate if you are going to use it as a primary investment vehicle and we certainly talk about it on this show.

That said, who better to learn more from about real estate, than the Real Estate Guys themselves!

Of course the Real Estate Guys are also known as Robert Helms and Russell Gray—a couple of good friends of mine. Robert was on the show a while back ago talking about a luxury resort in Ambergris Caye, Belize that many of you, through investor club, know about and may even be invested in already.

Russ is the other half of that dynamic duo and is our guest on Wealth Formula Podcast this week. Make sure you tune in to learn why Russ thinks you should be investing in real estate now!

069: Deconstructing Destructive Belief Systems Aug 27, 2017

I have arrived to Southern California and I am now writing to you from my new office which, for the first time in Wealth Formula Podcast History, is NOT a part of my home.

This time away from the show has given me some time to reflect. I do have a lot to say to you myself and sometimes the interview format does not allow me to do that.

So, I have made a decision that I will do more podcasts in a format where you can hear from me a bit more.

During these episodes, I hope to share with you some of my thoughts not only on financial matters but on mindset.
One of the biggest barriers to financial and holistic wealth is mindset. Our mindset, in turn is influenced heavily by what we believe.

In this episode of Wealth Formula podcast, I talk to you about how our educational system and conventional wisdom may have created artificial “truths” in our lives and how that might actually be destructive to the way we deal with money.

Let me know what you think of the show!

068: Going to California Aug 20, 2017

When I was in high school, I used to BLAST Led Zeppelin on my drive to school. My favorite album was Led Zeppelin IV.

My music tastes haven’t changed much since then. In fact, my music repertoire pretty much ends 1992–the year I graduated high school. Even ’92 is a bit late for most of my favorite music though.

My wife, on the other hand, generally likes the newer stuff. But last month, I converted her. I had her watch a documentary on Led Zeppelin and she was hooked. Our theme song for the month became “Going to California” because of our impending move to Santa Barbara.

By the time you get this message, I will already have moved. This is the last Wealth Formula Podcast episode recorded in Chicago.

For those of you who have been listening to my show from the beginning, you can hear the seeds planted for this move in episode 14–almost exactly one year from today!

This week’s episode of Wealth Formula Podcast is reflective. If you listen to this episode and episode 14, you will see the power of goal setting in action.

I feel very strongly in the idea that you must practice what you preach. If I tell you to take action and ask you why you are not living the life you want, I have to ask myself the same thing.

That’s exactly what I did and now I am seeing the results of that vision. How about you? What’s your ideal life? How are you going to make it happen?

Remember, you have to know where you’re going before you make a plan to get there. Start by listening to this discussion with Zed Williamson.

Buck

067: Estate and Asset Planning ESSENTIALS with Kevin Day Aug 13, 2017

Several weeks ago, I sent out a “Weekly Wealth Widget” about BASIC estate planning–the stuff you absolutely have to have to protect your family in case you die.

I was amazed at the high percentage of people who did not already have this information. That’s downright scary.

Listen–no one likes to think about dying much less planning out what happens when you die. Hopefully you live to be 120 but what if you don’t? Do you have young children? What would happen to them without you or without your spouse?

Before wealth comes safety and security. Safety and security should be planned with not only the here and now in mind, but also with careful consideration of the worst case scenario.

This week’s guest on Wealth Formula Podcast is one of our country’s foremost experts in both estate planning and asset protection: Kevin Day.

So, unless you are 100 percent sure you and your family are covered, DO NOT MISS this show!

066: G. Edward Griffin and the Institutionalized Theft of Your Money Aug 06, 2017

I have been on a real anti-conventional wisdom kick lately if you haven’t noticed. You see, I think that conventional wisdom in personal finance is a big Wall Street scam!

Invest in stocks, bonds, and mutual funds for the long run? Why is that conventional wisdom? Well, who benefits if you continuously dump money into the equity markets? The market MAKERS of course!

Make no mistake, conventional wisdom can be manipulated by special interests folks.

Just look at the sugar industry. In the 1960s, Harvard Scientists were paid off by special interests of the sugar industry to suppress any link between sugar and heart disease. The result–the food pyramid!

The food pyramid showed starchy foods like bread, pasta, and cereal as the BASE of the pyramid–the food you should consume the most. Decades later, this guidance has led to an increase in diabetes, obesity, and coronary artery disease.

Like the food pyramid, dependence on the equity markets for the long term will likely have consequences to your financial health–but it will be great for the on going pillage of your money by the market makers.

The market makers–ie. Wall Street and their minions, the wealth advisors, make money by taking your money. If you don’t put your money in the market, they can’t do that.

That’s why real assets like apartment building investments get labelled “alternative”. Alternative doesn’t sound very safe, does it? It sounds exotic and well…risky.

Who wants to invest in risky stuff when your money manager can get you into a diversified portfolio of stocks, bonds, and mutual funds? Doesn’t that sound safer?

I could go on all day about this stuff by I will spare you the rant. Instead, I will direct you to this week’s Wealth Formula Podcast interview with G. Edward Griffin, author of The Creature from Jekyll Island.

If you have never heard of G. Edward Griffin, you need to listen this podcast. Hint: The United States Federal Reserve Bank is neither a government institution nor a bank!

Buck

065: Angel Investing with David S. Rose Jul 30, 2017

If you haven’t figured it out yet, I believe strongly that investing is a team sport. Like team sports, it can be fun and rewarding–especially when you win.

I talk to investors in Wealth Formula’s Accredited Investor Club all the time and often hear the frustration of those interested in investing outside of the equity markets–they have no idea where to turn.

They know they want something different, but they don’t know how to start.

Does that sound like you? Well, I have spoken about this in the past, but the key is to find your team–or perhaps better to call it a tribe.

You need to be around people who you know, like, and trust and you need to be around people who have different skill sets than you do. The power of that kind of tribe is priceless.

Most of you are on an island. You are successful and live amongst other successful professionals. However, you do not buy into the conventional wisdom of personal finance that your colleagues believe in so you listen to shows like mine for alternative thinking.

That’s a great place to start but there is no replacement to get out there and actually meet other people of like mind.

The power of tribal investing is perhaps no more evident than in the area of angel investing. Angel investing has created enormous wealth in this country.

However, if you don’t know what you’re doing, you will get raked over the coals.

The good news is that tribal investing is alive and well in the area of angel investing and, even if you have no experience at all, might be something in which you too can participate and profit from while having a lot of fun in the process.

Make sure to listen to this week’s Wealth Formula Podcast as I interview super angel investor David S. Rose (http://angelinvesting.com/) to learn how, you too can be an angel investor!

Buck

064: The Step After Wealthy with Dean Graziosi Jul 23, 2017

As many you know, I will be leaving Chicago in August to move to Santa Barbara, CA. For the last 5 years, my family and I have gone to the same beach house every August. It always ends up being the best couple of weeks of the year.

So last year in August, I did a podcast from that beach called, “What is your dream and WHY aren’t you living it???” It was episode 14. I was in an aspirational mood.

We were having a great time again. My little girls were playing on the beach and we were eating great Mexican food every night and falling asleep to the sound of the Pacific Ocean.

At one point on that trip, I told my wife it was time–time to stop making this a vacation that we looked forward to every year and to make it our life. She asked me, “Can we really do that?” and I said, “Of course we can. We can do anything we want to do.”

Of course, what she meant was–could we do it financially? After all, all of my businesses were in Chicago for the most part and I still went into the office at least 2-3 times per week. It was a very logical question.

But–in typical Buck form, I just made the decision and decided to worry about the details later.

Now, that may sound a little crazy to many of you–maybe even down-right irresponsible right? How can you just make a decision to move before having a clear plan on how to get there?

Well, I would actually argue that the way I went about things was the right way to do it. If you decide to go somewhere on vacation, what do you do first? Do you first figure out where you want to end up or do you start the process by looking for airline tickets?

Obviously you’ve got to know where you want to go before you figure out how you are going to get there.

Similarly, I just decided that we were going to move and I had a year to figure out how to make it happen.

The podcast I did was mid-August last year and we will be moving almost exactly one year to the date.

You see, most of the limitations we see in our lives aren’t real. We make them up for ourselves and then we believe them.

It’s a terrible problem that most people have to some degree. The problem is that, if not recognized, these artificial limitations can keep us from meeting our potential or simply being happy.

There is no one who knows this better than, this week’s guest on Wealth Formula Podcast, Dean Graziosi. He is truly a rags to riches story and he is one of the most inspiring people I have ever met. DO NOT miss this episode!

Buck

063: Investing in Businesses with Victor Menasce Jul 16, 2017

I have a lot of people in Investor Club who lend to flippers. These notes pay pretty well–I hear over 12-15 percent on a regular basis. These investors ask why they would ever invest in anything with less return.

It’s a fair question but there is a very good answer. When you lend to people who flip homes, you are investing in a business NOT in an asset.

Investing in businesses is inherently riskier than investing in an asset such as real estate. As a guy who starts businesses, I know that instinctively.

I have had businesses that threw off 7 figures of profits one year then were in the red the following year. The multiple variables involved with businesses such as markets, competition, and management make it a much more volatile endeavor than investing in an apartment building where people have to live–hopefully you can see the difference.

It is also from my experience as a guy who starts businesses that I have noted that there is often hidden variables within a business that dictate their success that people from the outside cannot necessarily identify. With some of my businesses, this relates to my own instincts as a marketer and directing our marketing initiatives.

If I sell a business that relies heavily on my special skill set, the person buying it has to be able to make up for that special skill set or they may not see the same results.

Suffice it to say that that knowledge has kept me from purchasing businesses as investments. My conclusion is that I am better off starting businesses from scratch. The exception to this thought process is buying a larger business.

For example, a business with a $50 million revenue with management in place sold by a passive owner might be appealing. The problem is that a business like this might have a yearly profit of $10 million and therefore might cost me $50 million to purchase. I don’t have that kind of money–yet. It might be something we do as a syndication in investor club at some point however.

If you’re a savvy investor, you probably noticed that I used a multiple of 5X times profits to determine the cost of this theoretical business. For businesses, that would not be out of the ordinary.

Is that high or low compared to real estate? Well, D class apartment buildings (no money no credit crowd) might be trading at around 10X profits AKA a cap rate of 10–so that building with a net operating income of $10 million might be worth $100 million or more compared to the $50 million you paid for a solid business.

In other words, if you know what you are doing, buying businesses can potentially be very profitable. It is something that I have not done but almost certainly will do in the future.

My guest on Wealth Formula Podcast this week, Victor Menasce, has a lot of experience in this area. I invited him on the show to tell us a little bit more about buying businesses. Make sure to tune in–you never know when you might learn about your true calling as an investor!

062: Investing in the ONLY Guarantee in Life Jul 09, 2017

In 1789 Benjamin Franklin wrote, “Our new constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”

Well, if you have paid attention to any of my emails and posts in the last couple weeks urging you to download a report and watch a webinar from my friend, Tom Wheelwright, then you know that statement from Ben Franklin may only be partially true.

Tom Wheelwright, who also happens to be Robert Kiyosaki’s CPA has shown how it is quite possible to legally NOT pay taxes.

If you did not take advantage of this information, then that’s your loss. But I can tell you from personal experience that what Tom Wheelwright is TRUE!

On the other hand, as of 2017, DEATH IS STILL GUARANTEED. I can tell you this with some confidence, because I am a physician 🙂 And if you think that life expectancy always increases, you are wrong. For the first time since the 1990s, Americans are dying at a faster rate, and they are dying younger.

Americans are also sicker compared to people in other “rich” countries and in some states, progress on chronic diseases like diabetes has actually reversed. I have my theories on why this is happening but suffice it to say that it is.

Now, when we think about investing, we often like to know what the “guarantee” is. What is the investment secured by? We don’t want our investments to be unsecured. That’s why it’s nice to invest in something that is correlated with something real, like real estate, on which we can hang our hats.

Now, what if you could invest in something that was backed by something guaranteed more so than any real estate or other tangible asset–something that was guaranteed in all economies, good and bad and regardless of the equity or real estate markets? Well, it is possible to do that. You just have to invest in something that is guaranteed by death.

That may sound morbid to some of you, but the richest people in the world have been using a technique for decades unknown to the rest of the 99.99 percent of us that might be the ultimate investment hedge–it’s an asset class called life settlements.

Sound interesting? Then, listen to this week’s Wealth Formula Podcast, and become one of the very few people on the planet to know about this unique asset class!

Buck

061: Investment Secrets of the Ultra Rich with Richard Wilson Jul 02, 2017

The other day, I was speaking with a member of investor club and he said that it was very hard for him to look around and see funds (like AHP) that were offering double digit returns and take them seriously.

He was comparing them to the low single digits of dividends in the equity markets. If double digits were available to people outside of the markets, why in the world would people buy bonds, he wondered.

I actually hear this more often then you might think. Why? Because we have been brainwashed by Wall Street! They want you to think that getting returns higher than 4-5 percent is associated with only HIGH RISK INVESTMENTS.

I know fund managers that could and would pay out double digits to their investors but don’t because they do not want their funds to be perceived as “too risky”!

Folks–you are getting ripped off and you need to wake up. How do I know that you can make high returns with low risk? I OWN ZERO STOCKS, BONDS, AND MUTUAL FUNDS and I’m doing pretty well!

But don’t listen to me. Listen to Richard Wilson on this week’s Wealth Formula Podcast. Richard is the founder of Family Office Club and works with $100 million plus net worth families.

When you listen to what he has to say, compare it to my message and come to your own conclusion.

060: Cash Flow to the tune of Barry White with Jeff Schneider Jun 25, 2017

Last week, my wife and I took our daughters to a town fair. We stayed until the end and as we were walking out were offered free cases of blueberry yogurt drinks and bottled ice coffees–whatever was left over from what they couldn’t sell at the fair.

At my urging, my eight year old daughter Camilla accepted all the free inventory and decided to put up a stand outside the house selling the stuff–instead of a lemonade stand she was going to sell kafir and bottled coffee.

Next, she needed staff so she hired her little sisters (4 and 2) and mom as contractors for $1 a piece (I negotiated the contracts for her). At this point, she knew that she would need to sell at least $3 worth of drinks to break even. While it seemed daunting at first, she began to see the potential upside and got very excited.

She almost gave up after the first hour with no customers but I had to remind her that she would still be on the hook to pay her employees. Pretty soon, her luck started to change and by the next hour she had broken even. Then there was another grueling 30 minutes of waiting and she started to get a little nervous. Maybe it was all a big big waste. Maybe she should have taken that dollar as an employee since it was “guaranteed” and let her 4 year old sister be the entrepreneur.

But as I often say, the key to business is sticking around long enough until the next time you get lucky. My daughter saw that for herself when 4 of the neighbor kids came out of no where and raided her inventory. Before she knew it, she had now collected $20 in total and she was super excited. In fact, we decided to call it a day and quit while we were ahead.

However, before that, she had to pay her sisters and her mom so she was down to $17. Then I told her she had to pay me half of that in taxes. That’s a very quick way to teach a child about taxes!

Anyway, she actually did learn a lot from this exercise and I am now thinking about a future in which rather then giving her an allowance, I buy her inventory and make her sell it. What do you think of that?

Inventory could mean anything obviously–I would let her figure out what she could sell and buy that for her. After all, that’s real life. If you want to be successful in business, you have to figure out what people want or what they need. A successful business comes down to either providing something that solves a problem or pain OR entertainment.

We usually don’t talk much about entertainment as an asset, but it is indeed a very powerful and potentially lucrative asset class to consider. My guest on Wealth Formula Podcast this week has a very elegant business that focuses on this. Make sure to tune in this week to find out how you can collect royalties by owning songs.

059: An Economy on the Eve of Disaster with Peter Schiff Jun 18, 2017

I keep reading about how the equity markets are bracing because of all of the things going on in the news–senate hearings on Trump and Russia, the referendum in the UK, and the fed about to raise rates again. People are worried about how these national and global events will affect their retirement money. Never mind the fundamentals and that price to earning ratios are at record highs for no apparent reason. Instead, the markets are bracing for commentary on events that have nothing to do with your stocks in apple and GE. By definition, that is irrational. The equity markets, my friends, are irrational. By the way, my apartment buildings don’t seem to care about any of this. I guess they lack feeling.

In the meantime I recently saw an article from a “thought leader” on physician finance who I have interviewed on this show write about how you need to keep dumping money in the markets because you are going to get a 7 percent yield with the goal of retiring with 1/4 of your current income–he called that “financial freedom”. His philosophy is typical of conventional wealth management–just do it! Invest and it will grow. That is not how you get wealthy folks. That’s a great strategy for nike, but not a wealth strategy you should rely on. That is how you will end up dying broke. For all of you doctors dentists and other healthcare professionals out there, I need your help spreading our message. Send my book to your friends and coworkers. Invite me to talk to your colleagues. I’ll come. This is my mission ladies and gentlemen.

Listen, I’m not a permabear. I don’t think the sky is falling all the time. In fact, there is always something to invest in any economic cycle. Just don’t be a lemming! Educate yourself and use reason.

Now, my guest on Wealth Formula Podcast this week has built significant wealth on betting against the economy. He is a former economic policy advisor to Ron Paul and is probably best known for his prediction of the housing meltdown in 2008. Make sure to listen to my interview with Peter Schiff.

Buck

058: Brain Surgery and Avoiding Financial Mind Traps with John Howe! Jun 10, 2017

I used to be a neurosurgery resident–at least for a couple years before I realized that brain surgery did not suit my lifestyle. Actually, brain surgery was not really compatible with having a lifestyle at all! Anyway, I moved on but I sure did love neuroscience and the brain.

When you operate on the brain, it gives you a little bit of a different perspective on what it is to be alive. You realize how life is, indeed, quite fragile and you wonder how most of us make as far as we do.

You also start to see how all of our thoughts and movements are quite mechanical in nature and driven by electrical impulses. It’s a rather depressing way to think about it, but it is true.

No where is that more clear during awake brain surgery. Sometimes with brain tumors that are near speech centers or vision centers, it is important to stimulate brain around the area to do your best to avoid cutting out. For example, stimulation near a vision center may cause some sort of visual hallucination–avoid it if possible. Freaky right?

Anyway, all this electrical activity happens as we develop and in many cases is learned. Electrical pathways strengthen with certain behaviors. When a right handed person breaks their fingers and needs to use his or her left hand more for a while, we can see brain activity change through modern imaging.

Other activity is less learned and more primordial. Your pupils dilating while you run away from a tiger, for example, is not learned–nor is perspiration.

We are the product of innate and learned behaviors. To a certain degree everything we do and think is based on some sort of reflex. The way we behave in personal finance is no different.

Find out how on this week’s episode of Wealth Formula Podcast!

057: Personal Finance Tips and TRICKS with Jordan Goodman Jun 04, 2017

I’m writing this the day after Memorial day. First of all, I want to take this chance to thank all of you veterans out there for putting your life on the line so that we can live the relatively carefree life that we do.

Compared to the rest of the World, we’ve got a pretty darn good. In my view, we are still the greatest country in the world and I don’t see that changing anytime soon.

There is no other place in the history of the world that provides as much opportunity for those who are willing to take life by the horns then the United States of America. I speak as the child of immigrants who came to this country broke and went on to live the American dream as affluent citizens of this great country.

I know there are a lot of people in our niche that are extremely pessimistic about the future of the United States. There is no doubt we are in a bit of an economic pickle and that we might see some tough times in the next 10 years. But let me remind you that we are indeed the heart of the global economy. If we go down, the rest of the world goes down.

If the global economy implodes, do you really think you are safer in South or Central America or Puerto Rico? If you do, you haven’t spent enough time in the undeveloped world. If all hell breaks loose, there is no other place I would rather be than the United States of America.

And for as much as we may have some tough times on the horizon, I do not see the fall of an empire. Instead, I see a new era of greatness. 20 years from now, we will look back to this era much the way we look back at the 70s. We will see that times were tough– but boy did we come out of that even stronger.

I believe that American ingenuity and entrepreneurship will prevail. The many problems that we have will be solved by technology and other creative measures.

I still believe in the greatness of our country and our untapped potential. And I can’t wait to prove all of the doomsday people wrong. America will prevail.

A lot of times, we get too negative on the show and I want to make sure that we have a better balance. There are plenty of people out there who are very positive and see a lot of good things in the future for our country and our world.

Let’s focus on what we can do right now. Let’s focus on opportunity rather than looking for all the negatives.

Let’s start that off by listening to this week’s podcast! Jordan Goodman has been a financial journalist for over 3 decades. Think this guy has seen a few cycles? Well, he is also very entertaining and full of interesting personal finance tips and tricks. Enjoy the show!

My guess today has seen it all. He is a world-famous financial journalist who is been added for greater than 30 years so nothing surprises him.

When we come back, we will speak with Jordan

Buck

056: Fannie Mae’s Chief Economist Speaks: Doug Duncan May 28, 2017

It is route important to remember that when I have people on the show, it is purely for educational purposes. I want to expose you to asset classes and hopefully open up a new way of thinking. However, I want to make sure you understand that it does not mean I am endorsing those particular offerings.

To be clear, I do my best to only allow people on the show who I have vetted to some degree. Either I know them or someone that I trust knows them. However, even if I personally trust someone, and they are trustworthy, it doesn’t mean that I like the deal. If you are in my investor club, I am glad to give you my personal opinion. However, that’s really just my opinion, and again, not and endorsement.

Over the years, I have found the hardest part about investing is trying to figure out who to trust. I have come to the conclusion that for me, investing works best when it is network based. What I mean by that is that the sponsor of the particular offering is within my network. You see, No investment opportunity is without risk. However, if you can, to the best of your ability, eliminate bad players, that is about 75% of the battle.

I steer away from not only people who I think are prone to nefarious activity, but also those who I believe do not have their priorities right. Sometimes you can read between the lines and understand what people’s intentions are. Just listen to what they say. Are they trying to do the right thing? Do they focus on investor returns and building a long-term company with happy clients or do they talk about how big they want to get themselves? The latter is an alarming thing for me. That’s not because I think it is bad to be big and successful. Of course not, you’re looking at someone who owns businesses that are big and successful. However, big does not necessarily mean good.

I could say that I want to build a $1 billion real estate empire. If I start with that goal in mind, what do I need to achieve it? I need to buy a lot of real estate with a lot of investor money. Even in markets like we have today, I might stretch a little bit to make sure that I keep buying properties to keep pace with my goal. Do you think that’s good for investors? I don’t.

Rich dad advisor Ken McElroy has been out of the real estate market for over a year. As much as he continues to make offers, the deals that he knows will make his investors happy aren’t there. People are paying too much. I know this personally because my team is getting outbid routinely as well. Now, that doesn’t mean I’ll stop trying. Hopefully something will come to fruition soon enough. When it does, I will bring it to my investors and feel good about letting them participate.

Don’t be impressed by people who are doing ALOT of deals right now. Be concerned. That doesn’t mean there are no deals in the market, but they are limited for sure.

On the other hand, try not to get the chicken little syndrome either. If you see a deal and it’s a good deal and you know what you are doing, don’t be afraid to buy. There is no such thing as a risk free investment. But with hard assets, it’s kind of nice because they usually come with some financials. Numbers like net operating income over the past two years, don’t lie. In this market, the confident but conservative will prevail. If you sit on your hands and don’t even try, you might also miss some opportunities.

The real estate market, in particular, is confusing the heck out of sophisticated investors these days because of the unusual state of the economy. So, who better to speak to about this than Fannie Mae Chief Economist, Doug Duncan? Tune into this week’s episode of Wealth Formula Podcast and listen to our conversation now!

055: Confessions of a Cash Flow Ninja: MC Laubcher May 21, 2017

Everyone grows up with some kind of belief system that is an amalgam of religion, culture, and life circumstances. These beliefs influence how we see the world and how we behave within it. Make no mistake, belief systems have a lot to do with how successful or not successful you are in life.

I am the child of Indian American immigrants. My dad, like many men who immigrated to the United States from India in the 1960s, was educated as an engineer. He came to this country on a scholarship to the University of Minnesota.

But unlike most of his cohort, he quickly recognized the opportunity in this great country of ours. Instead of buying a house to live in, my parents bought a duplex. My dad realized that if he bought a duplex instead of a house, the tenants would pay his mortgage for him. Seemed like a no-brainer for this young immigrant couple. That was an inflection point for him. He saw opportunity in owning rental properties for cash flow instead of trading time for money and he was off to the races. He never asked the question, “shouldn’t I be investing for the long run in a portfolio of stocks, bonds, and mutual funds for the long run?”. Why? Because that was not part of his experience. He came from a place where people were just hustling to put food on the table. He was poor in India–that’s really poor. He had no preconceived idea about what to do with his money so he did what he thought made sense–he bought cash flowing assets. Almost 50 years later, he’s still at it. My dad did have a lapse of judgement during the tech bubble which you can read about in my book, but he’s been a real estate guy for my entire life.

So far, you can already get a sense of my influences growing up. First of all, I looked different. I was the only child with melanin in a sea of Scandinavian grade school children. My mom packed me chicken curry sandwiches for lunch instead of peanut butter and jelly, and my dad was a thriving slum lord–I mean scrappy real estate entrepreneur. Unlike other Indian kids, my dad didn’t seem to care about how I did in school. In fact, neither of my parents payed much attention. It was rare that they ever saw my report card. The only thing that drove me to do well in school was the fact that everyone told me my big brother was really smart and I wanted to be like him.

Most Indian parents want there kids to be a doctor–in Indian culture, the pecking of order of families has more to do with the number of doctors in your family than anything else. My mom really wanted my brother to be a doctor–she just liked doctors and wished that she had married one. When my brother decided not to go that way, she was crushed as she certainly did not expect for me to head in that direction. I fancied myself a man of letters and when I was leaving for my Ivy league college my mom asked me what I was going to study. I told her. I don’t know mom but I guarantee you I won’t be a doctor. She was overjoyed, of course, when 2 years later I declared my own intent to apply to medical school.

But not my dad. He couldn’t figure out why I wanted to be a doctor. “A lot of work. A lot of time. You know I make more money then all of those doctors don’t you?” he asked. Of course, I blew him off. He just didn’t get it. I was following a mission–to help people. It wasn’t about making money.

You see, he grew up dirt poor and fed his family since grade school tutoring rich kids in mathematics. That was his perspective. He had raised an affluent private school kid who had the luxury of being an idealist.

Eventually, I went on to become an entrepreneur just like him (the apple does not fall from the tree) and when I started making money, I had to figure out what to do with it. Most of my colleagues ended up handing their money over to a financial planner. But that was not part of my experience so it seemed risky. So, I started investing in real estate? Why? My experience told me that if I invested in real estate, it would make me wealthy like my dad. I also saw that his only venture into the stock market during the dotcom bubble almost destroyed him. And finally, it was 2009 and I had the perspective of making money for the first time while witnessing the carnage of the equity markets.

In sum, I got lucky. I had a different perspective from the rest of the highly educated herd and I was able to see a better way and that has made me wealthy.

Today’s guest on Wealth Formula podcast, MC Laubscher, grew up in South Africa during apartheid. Do you think that might affect his view of the world?!!! Make sure to tune in.

053: Peak Prosperity with Chris Martenson! May 07, 2017

I have spoken in the past about how I believe that time is the currency of wealth. In other words, it’s not dollars or euros that most of us are after, but rather time. We want to be able to do what we want, when we want. Some of us love our careers and wouldn’t change that part of our lives. Some of us would absolutely love to eliminate our careers and do something completely different.

What would you do with if you had all the time in the world? Would you play golf all day and “retire”? That’s the bill of goods most high paid professionals are sold, right? You work your butt off and pack money away into your retirement account so that you can one day, finally, retire and play golf for a couple years before you die. That sounds terrible to me.

I would be bored to death and being bored doesn’t sound like being wealthy to me. Being wealthy means doing what you want when you want. It doesn’t mean having no meaning to your life other than golf.

To me, the pinnacle of wealth was defined by Abraham Maslow in 1943 in his work. “A Theory of Human Motivation”. I’m sure most of you are familiar with Maslow’s hierarchy of needs. There’s this pyramid that has physiological needs at the bottom–like food and water and then just above that you have safety, like having a roof over your head for example. I have referred to this pyramid before on this show and in my book and have specifically talked about why I like multifamily real estate as an investment. People need roofs over their heads.

At the top of this pyramid, however, is self-actualization. Self actualization might encompass many things: expressing one’s creativity, quest for spiritual enlightenment, pursuit of knowledge and the desire to give to and/or positively transform society are examples of self-actualization. It is, as German psychiatrist Kurt Goldstein said, man’s master motive. But, the only way to get there, the only way to self actualization is to have your basic needs taken care of first.

You can’t be worried about how to pay for your mortgage and put food on the table and work on your master motive at the same time. On the Summit at Sea I spoke to Robert Kiyosaki about this a little bit. As you might imagine, he’s in a position where he can focus on self-actualization. He defined this as “mission”–which one could also characterize as master motive. Financial education truly is his mission in life. He doesn’t need the money.

Let’s be clear, you don’t have to have Robert Kiyosaki level wealth to have a master motive or mission. On the other hand, you can’t be living paycheck to paycheck in golden handcuffs. You see, even high paid professionals have concerns about security. All you house poor doctors know what I’m talking about. Your problems are the same but different. In some respects they are worse because they are self-inflicted. A poor person struggling to pay rent is one thing but struggling to pay you BMW car payment? Well…that’s not a road to self-actualization either.

The golden handcuffs are a big roadblock to self-actualization. And, until you free yourself from those shackles, you will not be able to find your master motive or mission in life.

This is all to say that time maybe the currency of wealth. But you still gotta know how to spend that currency wisely!

Now today’s show is tangentially related to my rant of the day. You see, when I talk about self-actualization, that requires you to get out of your comfort zone and think about your life critically. That’s exactly what my guest on Wealth Formula Podcast today, Chris Martenson of PeakProsperity.com did over a decade ago and the result is some pretty amazing research– a real contribution to society born out of his own creativity and pursuit of knowledge. It also resulted in a much happier and healthier man.

05: Should You Invest in Residential Real Estate? May 05, 2017

This week’s weekly wealth widget is sort of no-brainer for most of us. However, if you are still sitting on real estate sidelines, this one is for you. Here are just a few reasons why you strongly consider investing in residential real estate.

You own a real asset that does not fluctuate on a day to day basis depending on the “mood of the market”.
People have to live somewhere. This is level 2 on Maslow’s hierarchy of needs. Residential real estate is an investment in something people need.
There are substantial tax advantages that make most profits tax free. This IS NOT the case if you invest in a REIT so I personally do not recommend that.
Although the IRS considers your property to depreciate (therefore giving you tax advantages), the property will actually appreciate in most cases over time.
Your tenants pay down your mortgage. So…while you are collecting money on a monthly basis, your equity position in the property increases over time making your over-all yield higher than simply the cash that you are seeing on a monthly basis.
You can use leverage…a mortgage to buy an asset and enjoy leveraged appreciation and amplified cash flow.
Millennials are not buying houses. They prefer to rent. They are the LARGEST generation.
You can invest in one of many “turn-key” services in various parts of the country essentially eliminating your risk of tenants, toilets, and termites on a daily basis.
You can invest passively on bigger projects, get great returns, and still enjoy the cash flow and tax benefits as a limited partner without any legal exposure at all!
Unlike money in the stock market, rental properties do not vanish over-night because of something completely related to your property.

That’s just a few reasons to invest in real estate. If you want more reasons to buy residential real estate, listen to his oldy but goody: 002: The Real Story Behind Real Estate – Wealth Formula

052: Be Passive and Prosper with Marco Santarelli Apr 30, 2017

We are a culture of robots created by the industrial revolution. Our current public educational system was modeled after a system created by the Prussians in the early 1800s and was imported to us during the industrial revolution by guy named Horace Mann. This system was then fine tuned by a group of 10 guys at Harvard in 1892.

Let’s take a step back and look at how this system works. Imagine a child stepping onto a conveyor belt in 1st grade. That child goes to 12 different stations that represent 12 grades in our school system. At each station, the child stops for a year and gets doused in pre-packaged education deemed appropriate for each age cohort. I’m sure you remember high school where there was a sequence of courses that you took depending on your grade level..ie geometry in 10th grade, etc.

At the end of the 12 years, you have a finished product–well at least your supposed to. Some obviously fall of the conveyor belt a bit earlier than expected. However, assuming a child makes it to the end of the conveyor belt, they are then sorted out. The finest will be patted on the back and get shipped off to a new factory for a little extra polish. That factory is of course college and, potentially later, professional school. I’m sure you get my analogy here.

It”s actually an ingenious system if you look at it through the lens of an industrialist. And my point here is not to say the system is wrong. It is certainly the best system we know. My point is to simply point out the methodology by which we become educated. It is like we are a bunch of robots that were created by this industrial educational factory. This factory is rigid and does not allow for a significant amount of flexibility in education.

Now the people who come out most successful in this factory are those who excel at doing exactly as they are told and absorbing the information they are fed most efficiently. They are constantly being given positive feedback. Society commends them for not failing–for consistent success. That constant positive feedback creates a Pavlovian feedback loop where these people who are particularly good at school essentially know no other way to learn that to be taught formally and given a roadmap to follow.

Now here is one flaw in the system. What if the factory forgets a key component while that child gets sent down the conveyor belt–say for example, financial education. Or even worse—say that financial education is taught but the curriculum was written by Wall Street?

That is the paradox confronting many high paid professionals today. They excel throughout their lives and do everything right in school. They get the accolades and the titles like doctor or lawyer. But…many haven’t a clue how to teach themselves anything outside of their own professions. Instead, they rely on conventional wisdom since this is the societal norm and the right thing to do. In terms of financial education, they hesitate to learn things for themselves as that’s not what they are supposed to do. Some do it anyway and end up digesting the crap that is current investing paradigms.

A few brave souls will try to get a broader perspective. They might start to realize that the whole personal finance thing–what they were led to believe was part of the common curriculum and therefore truth, was in fact nothing more than a creation of the banks. They, of course might get ridiculed by their family and friends for thinking outside of the Wall Street box. If they survive the scrutiny, they might get lucky enough to find a community like ours that is willing to consider “alternative investments”–namely tangible assets that don’t don’t disappear when there is bank failure.

Some of them might start thinking about investing in real estate and might even run into today’s Wealth Formula Podcast episode that can help them get started small with turnkey rentals. I hope you enjoy the show.

051: Wealth Grows in Trees with Alex Wilson Apr 23, 2017

Should you always invest in things with the highest returns? Well? That’s an interesting question. When I first started investing, that’s all I cared about. When I bought my first apartment building, I did the numbers and looked at the tax returns. It looked like I was going to get over 25 percent cash on cash. It didn’t turn out that way though. It was a D class apartment building that I couldn’t manage nor could I find a manager who could. Instead of making 25 percent cash on cash, I lost a lot of money. These days, I look at that mistake as the price of education. The mistakes I made on that property were never made again and I have never lost money on real estate since that first building.

One of my lessons is that you can’t just look at the numbers. Why do class D buildings have potential for higher returns? Because they are a bigger risk. It is often the case that returns correlate to risk and we have to keep that in mind. As you may know, I own multiple businesses. Businesses trade very differently than real estate. Right now, medical businesses like some of those that I own may be valued at 10X of net operating income (to use real estate language). That is actually pretty darn high for a businesses of my size. for example. If my business made 2 million dollars in profit, the valuation may be north of 20 million. Wow! That sounds great right? But wait, in real estate terms, that is a capitalization rate of 10 which, if you are selling a property, is not necessarily something to celebrate.

Why the disparity you ask? Well, one is a business that has many moving parts. It relies on all of the operations around running a business. The assets are the brand, the management, and maybe the good will of previous customers and referral sources. Buying a business like this from me has far more risk than buying an apartment building from me with the same net operating income. Therefore, the valuation is different. The moral of the story: yield correlates with perceived risk.

Now let’s be clear. How people perceive risk is quite variable. To me, buying a stable b or c class apartment building does not feel terribly risky so I get to take advantage of relatively higher returns that this class of property yields compared to someone that feels comfortable investing in only luxury apartments where the affluent reside. Get the picture?

The reality is that there are all sorts of variables that dictate risk. Let’s take another example: Did you know that timber—you know wood, has outperformed stocks, long term corporate bonds, gold and real estate for over 100 years? Why are we not buying more timber? Maybe it’s because it’s not liquid for several years. There’s a premium for waiting for your money.

In fact, billionaire hedge fund manager Jeremy Grantham once said “timber is the only low-risk, high return asset class in existence.” Well, that alone is worth learning more about it. You can do that by tuning in to this week’s episode of Wealth Formula Podcast. I hope you enjoy the show!

050: Financial War with Jim Rickards Apr 16, 2017

I just got back from the Real Estate Guys Summit at Sea. Wow!!!–those guys know how to deliver. If you don’t listen to their podcast, by the way, you should. It’s the Real Estate Guys Radio Show. There are lots of copy cat real estate shows out there but only one Robert and Russ!

I learned so much and have so much to tell you that it will have to be split up over the next few weeks. As many of you know, Robert Kiyosaki was on the trip. I got very lucky in that I randomly sat next to him for several meals. In fact, at one point, I sat next to him 3 meals in a row. I think we share some kind of common hunger pattern or something. It was weird.

At one point, I snuck out of the lectures because I could feel my blood sugar dipping and went up to the buffet. I grabbed a seat at a bar table and called my wife for her birthday. Then, I saw Robert at the buffet line getting some eggs and he waved a friendly hello and came and sat down with me. I talked to him for the next 90 minutes. Now that was a treat. Why? Well, obviously as many of you know, Robert Kiyosaki’s Cash Flow Quadrant changed my life for good and defines the moment when I became an entrepreneur. But more than that, I realized the depth of Robert Kiyosaki’s intellect. Robert is not a cuddly bear. He’s an ex-marine who means business and he is also one seriously smart dude. It was a great experience for me to sit with him for 90 minutes and exchange ideas. Talking to smart people who “think different”, as Steve Jobs would say, is more gratifying to me than just about anything else. The only thing I would trade that conversation in for is a Minnesota Vikings Superbowl victory with me as the owner of the team.

So, getting back to the summit… Remarkably everyone seemed to agree that we are in a bad time in the economy. That’s not a surprising comment from Peter Schiff who Robert Helms says predicted 19 of the last 2 recessions or from Simon Black who advocates planting flags in other countries as a plan B when eminent destruction unfolds in the US economy. But even Douglas Duncan, Chief Economist at Fannie Mae, felt that the economy was not in a good place. Usually these guys are the optimists! Doug pointed out that this was the third longest economic expansion in US history BUT has been the worst expansion in terms of GDP growth and especially bad for the working class. Hopefully we will get Doug on the show, but everyone was floored that even the mainstream didn’t have a positive outlook about the economy. Later in the cruise, Kiyosaki commented, “It makes me worried when we all think the same thing. What am I not seeing?” he asked.

What aren’t we seeing? That’s sort of scary question. Sometimes things are just obvious I guess but other times there are a few extraordinary individuals who see things that no one else does.

It reminds me of the night before the presidential election. I am a lifetime member of Jim Rickards’ Strategic Intelligence newsletter and receive urgent updates via email. The day before the election, I got an alert. On that video, Jim confidently told the world that Donald Trump was going to win the presidential election. He had sought and found clear evidence that polling was biased and wrong. He did the same thing just a few months earlier when he predicted a yes on the BREXIT vote.

Jim is one of the brains that I follow closely. With recent developments in Syria and North Korea and the prospect of war on multiple fronts, wouldn’t you like to hear what that guy has to say? Well, good news! Jim is my guest on this week’s episode of Wealth Formula Podcast.

-Buck

P.S. You may need this link after listening to the show. It’s for Bullion Vault. Check it out: http://www.bullionvaultaffiliate.com/joffreymd/en

PSS. Who do you know who should be listening to this show? Do them a favor and forward them this email.

049: Leverage is time with Ari Meisel Apr 09, 2017

What is leverage? The action of a lever by definition is to gain some kind of advantage. It can be physical like when you are using a tool or, in finance terms, it is the use of borrowed money to enhance buying capacity (and hopefully increase return on investment).

A few shows ago I emphasized that my belief was that coveted currency for most, whether realized or not, is time. I equate wealth with time rather than dollars in the bank. Therefore, time is my currency of choice. On this show, we often emphasize the idea of residual cash flow via real estate or other investment vehicles as the primary means of giving you more time to do the things that are important to you.

However, there is one more way to increase your bottom line on time. That is to reduce the amount of time spent on things you’d rather not do. Tim Ferris’, The 4 hour Work Week, popularized this notion about a decade ago. It’s a great book and it’s really funny. Tim writes about outsourcing just about everything using a virtual assistant in India–even going as far as having the virtual assistant talk to an angry girlfriend on his behalf!

Anyway, I was inspired by Tim’s book and tried using virtual assistants for a while but the hardest part for me was always dealing with companies overseas where there was a big language barrier and often substandard quality of work. Eventually, I dropped the whole notion of virtual assistants in my business life all together. I never really even thought about using them in my personal life.

That is until recently after meeting Ari Meisel at a genius network meeting. Ari’s built a company called Leverage that combines highly trained english speaking virtual assistants combined with training on how to best automate your business and personal life. It’s really a neat company.

Why have Ari on Wealth Formula Podcast you might ask? Because wealth is time and Ari is the king of maximizing time for productivity and leisure by hacking off all of the unnecessary and unpleasant tasks in life.

This is a service that I think many of you are going to love and in this episode of Wealth Formula Podcast you’ll get to learn all about it. This could change your life!

Best Regards,

Buck Joffrey

048: Robert Kiyosaki’s Real Estate Advisor Ken McElroy Mar 31, 2017

When I finished my training and figured out that I had to invest money somehow, the hardest thing for me was figuring out who to trust. The first apartment building I bought was a 14 unit building in the southern suburbs of Chicago. I would now characterize that as a C- to D+ area. My broker was the guy who sold me my house and I trusted him. The idea of specialization on the broker side never occurred to me at that time. Nevertheless, he was still a guy I could trust which meant a lot.

I ended up buying this building because the numbers looked fantastic. I got out my spreadsheet and got two years of tax returns from the seller. It looked like a home run. Many of you know this story and know how it ends. To make a long story short, I got bamboozled by a crafty and dishonest seller who owned many buildings in the area and was stuffing the rent roll. Lesson learned.

The first time I invested in a fund, I got fooled by a fast talking salesman who told me he could teach me how to create my own fund while I invested in his. He would make me a “partner”. This guy was everywhere on the Internet and seemed to be on a lot of podcasts so I trusted him. When I started listening in on these weekly calls with other “partners”, It became very clear to me in a short period of time that this guy cared nothing about investors and his whole business model revolved around collecting fees from investors with very little intention of making them any money. In fact, he doubled down and actually had minority partners who would pay him even more. I quite the group shortly thereafter but I still had money stuck in the fund. That was four years ago. I’ve never seen a penny in returns. In fact, it has become sort of a joke with my CPA who refers to it as the fund with no returns. Although the guy never sends me any money, he is religious about sending me a K-1 every year to file taxes. By the way, I am more than happy to reveal the identity of that shyster to anybody who wants to know.

The reason I bring these experiences up is that as much as education has to do with successful investing, you also have to eventually figure out who you know like and trust. If the task seems daunting, it is. Especially for someone like me coming out of surgical residency, I had no connections in the financial world and I was a lame duck for the sharks that enjoyed praying on young trusting doctors with six-figure salaries.

Over the years, however, I learned a concept that has served me well and has, frankly, kept me from losing money since that first apartment building and that dishonest fund manager. The concept is simple–net worth= network

You see, eventually I met people who are like-minded and I started to invest with people with whom they invested. Eventually, this turned into a community of investors and opportunities–sometimes going back and forth. The close knit nature of the group also served to be a very good way to keep checks and balances on everyone. Don’t get me wrong, just because you know somebody and trust somebody doesn’t mean that you are going to make money in an investment. What it does mean, hopefully, is that you won’t get purposely screwed by someone from day one—this is 90% of the battle in investing. Everyone can make a proforma look good and anyone can make an executive summary look like a gold mine. However, when I look at an opportunity these days, my main question these days is, “who is the sponsor?”

This concept relates to any kind of investing really. Some of you new to real asset investing have expressed concerns about the idea of moving away from traditional equity markets because you don’t know who to trust. I get it. However, did you ever ask yourself why you trust stocks bonds and mutual funds so much? Why do you trust your financial planner so much? The answer is because that is what you were taught. It’s like religion to you. When you stray from what that religion it feels like you are doing something wrong. Even your friends and family criticize you for thinking outside of the orthodoxy. Taking your finances into your own hands requires guts.

What makes it easier to make a move like this is community. Going back to the parallel of religion, once you find a group of people with whom you share a common set of beliefs and values, it is comforting. Why? It’s because the people that you are around believe in what you do and that reinforces your own belief system. At the end of the day, we are social animals. We need community and we need things in which to believe. My mission with Wealth Formula Podcast has been to help create that community for you. I am an evangelist for hard asset investing.

Some of you have become ardent believers already. Others are still in the process of changing their mindset and their paradigm. That’s OK too. When you are ready to move forward, I am happy to invite you to my world of network based real asset investing.

A great example of network based investing is my guest today. Before today’s interview, I never spoke directly to Ken McElroy. Yet, I know many people who know him and who have invested with him. That’s why I am on his investor list. It also helps that he is a Rich Dad advisor to Robert Kiyosaki and that he wrote the books from which I first learned the language of real estate. I hope you enjoy the show!

047: Making Yourself Rich and Giving to the Poor with Old Dawg Manassero Mar 26, 2017

Everyone defines wealth a little differently. My own definition of wealth is in the form of an equation wealth=time. Time is my currency of choice. It gives me the freedom to do whatever I like with my life. For the last 2 days, I took my three little girls (8,4,2) sledding in in the afternoon while most of my friends were at work. We had a lousy winter in Chicago–cold but not very snowy. We had to get some sledding in while we could after getting a big snow fall!

Don’t get me wrong. As a general rule, I am not a leisure guy. I get bored very easily. That’s why I have 4 different businesses and am starting more as we speak. But that’s what is fun for me. My wife is a clothing designer. You can see her stuff at oliviajoffrey.com. She actually started out as an urban planner but designing clothes was more fun for her so that’s what she is doing and she loves it. Similarly, my art is creating businesses and finding unique investment opportunities. I say art because there is a certain creativity that goes with entrepreneurship and it is that expression of “art” that I enjoy most. In sum, wealth is being able to do what you want with your time.

What do you wish you could do more of in your life? What is stopping you? More than likely, the answer to that question is time. If that’s the case, time is your currency too.

For some, their calling in life is charity work. I believe it is very admirable to spend your life in the service of those less fortunate than yourself. However, you can often be more effective if you’ve got something, other than your time, to give. A great example of this is this week’s guest on Wealth Formula Podcast, Bill Manassero. His plan–build a real estate empire in the US to feed the poor in Haiti. I hope you enjoy the show.

Buck Joffrey

P.S. If you like this show and this community, forward this email to 3 friends who you think should be listening to our podcast!

045: Private Investing with Mauricio Rauld Mar 12, 2017

My investor club is for “accredited investors.” What is an accredited investor? Well, it’s not something you apply for like it sounds. Being an accredited investor is just something you are or you are not…like you are either pregnant or you are not.

An accredited investor is a defined by our friends at the SEC as someone who makes a minimum of $200,000 ($300,000 if filing jointly) or has a net worth of 1 million dollars excluding personal residence. The significance of being an accredited investor is that you can invest in things that those with less money, cannot. You can also be something called “a sophisticated investor” which has a much more nebulous definition but essentially says you know what you are doing even if you don’t have that much money.

These laws were put in place long ago to “protect” the average person from predatory activity. The irony of this all is that there is no protection for the average Joe, or pension funds for that matter, against investing in a wildly bloated stock market at record valuations. Every major trader out there knows we are in bubble but there is no protection for individuals dumping money into their retirement accounts to buy mutual funds.

It’s an archaic system which makes little sense. Certainly there has been some recognition of this fact. The 2012 JOBS act made it easier for Main Street America to participate in “alternative” investments via crowdfunding and made it easier for sponsors to advertise previously unknown opportunities. However, we have a long way to go.

The whole securities thing is pretty confusing frankly but it is very important to understand if you are investing in private placements like we do on investor club or if you are sponsoring opportunities yourself. This week’s episode of Wealth Formula Podcast will help you to understand some of this complicated verbiage. Luckily, the guy explaining it is a very likable and well known attorney, Mr. Mauricio Rauld.

044: Small Change, Big Profits with Eve Picker Mar 05, 2017

The ideal business is not one that is necessarily glamorous. I have a cosmetic surgery business that is uncomfortably glamorous for me–I’m not a really flashy guy. Nevertheless, my plastic surgeons do a great job of making people get over their body hangups. It’s not just about changing a person’s physical appearance, it is actually more about changing their mental state. That translates into their lives as confidence. It’s a good business. Lot’s of work and competition but my team does an outstanding job and we make money. However, I cannot say that it is an “ideal” business.

In my humble opinion, the ideal business is one where everyone wins and the business makes a difference in the world. One example of this is Jorge Newberry’s American Home Preservation. AHP is one of our sponsors but I have been talking about them long before we ever had a sponsor relationship. American Home Preservation actually started out as a non-profit organization. The idea was simply to buy failing mortgages in bulk and rent the houses back to those getting foreclosed on—keeping families in their homes. What a great deed right? Eventually Jorge figured out that doing something socially responsible didn’t mean he had to be non-profit. In fact, what he found over the years is that by getting investors involved and scaling his business, he can actually do more good and make quite a bit of money for himself.

Meanwhile, the people he keeps in their homes are happy and, of course, you are happy because you are getting 12 percent annualized return on your investment as a monthly check. Oh yeah–Jorge is pretty happy too! In this scenario, EVERYONE WINS and that is why American Home Preservation is, in my view, very close to the definition of an ideal business. You can learn more about them at AhpFunding.com. Gene Guarino’s assisted living model featured in episode 29 is another example of a business where everyone wins. His model helps seniors live in homes rather than in institutions. It’s better for the individual who needs extra help with daily living but does not want to move to a sterile box. It helps the elderly person’s children feel better about where they are leaving their parents. And, it helps entrepreneurs like Gene by making him money while giving him a sense of doing good in the world.

There seems to be an onslaught of hate in this country which is sad. For some reason, it seems like it’s okay to be hateful as long as you put an American Flag on your Facebook page. We are better than that. I was heartened to see even George W Bush speak out about it last week. This is not a political show but I will say that as a father of three little girls I am very concerned about the trajectory of our national rhetoric.

I want to stay positive and continue to promote people who are doing good things. Don’t get me wrong… I am a raging entrepreneur and capitalist. We are not gong to start interviewing non-profits on this show anytime soon. I have my own non-profit organization so of course I certainly endorse good causes. However, Wealth Formula Podcast is about making money. But, whenever possible, I want to showcase people who are making money by doing good. In that spirit, this week’s guest on Wealth Formula Podcast is Eve Picker of Small Change.

043: Inflated: How Money and Debt Built the American Dream-Christopher Whalen Feb 26, 2017

In the 1980s, you could get double digit returns on your savings. Interest rates were that high. That said, inflation was out of control as well so the real value of earnings might not be as attractive as it is at first glance but certainly better than today. Today’s economy punishes savers be eroding there wealth through inflation while not providing and significant interest. That’s why Robert Kiyosaki says, “savers are losers.”

In the last few decades, we have become an economy of low interest rates and debt. At first, we used these tools to fuel our economy and to create better lives for ourselves but, eventually, like most drug users, we became addicted. Now, we can’t live without debt and inflation! We need to create more debt so that we can pay off our old debt and we need inflation to devalue and erode the debt we have. What do you do in this kind of economy? As they say, “When in Rome, do as the Romans do.” If we must have inflation to pay for our fiscal sins, ride the wave. Invest in Real assets…real estate, raw land, precious metals and art. Why? When inflation happens, it does not leave real assets behind–we inflate together.

There are few people who understand this and explain this better than this week’s guest on Wealth Formula Podcast, investment banker and author, Christopher Whalen.

042: Bonus Episode: Investing in the USA Feb 24, 2017

I recorded this interview with Reed Goossens several weeks ago but could not figure out where to put it because it is focussed on investing the USA for foreign investors. I did not want to leave all you Yankees out for a whole week so I decided to broadcast this as a bonus episode.

Going back an listening, This is actually not just a show for foreign investors. It’s also a very interesting immigrant story. So, I encourage you to listen to this show even if you are an American for the purpose of getting back in your immigrant ancestor’s mindset. I hope you enjoy this bonus episode.

Buck

041 : Get Wealthy FASTER with “Momentum” Feb 19, 2017

I’m going to Belize next weekend. Actually, by the time you get this message, I will already be back. I’m looking forward to seeing some of you there at the field trip. Our Mahogany Bay Village investment opportunity in Ambergris Caye, Belize with its world class luxury affiliation is active and we are fast and furious on the raise. So if you are interested in this opportunity, don’t miss out. If you are an accredited investor, you can go to reefequitypartners.com and take another look at the deal. Of course, you can also go to wealthformula.com and sign up for investor club.

Lots of GREAT opportunities coming through the Investor Club pipeline over the next couple of months. By the way, if you have signed up for the club and have not talked to me yet, make sure you schedule your appointment with me ASAP. While the Belize offering is regulation C– meaning you do not have to have a pre-established relationship with me, if you want to invest in any future apartment buildings, you MUST have a pre-established relationship with me as we will be using regulation D. So…don’t miss the boat. Also, I am considering opening Reg D offerings to non-accredited investors if you consider yourself a “sophisticated investor.” A sophisticated investor is a type of investor who is deemed to have sufficient investing experience and knowledge to weigh the risks and merits of an investment opportunity. If you are not accredited but believe you fit the criteria of a sophisticated investor, reply to this email and lets get on the phone. Once I get to know you and your experience a little bit more, you might be eligible to participate in some of our deals and put some of that lazy IRA money to work!

Through our Investor Club, I’ve had a chance to speak to many of you over the last several days, and a lot of interesting conversations ensued. We’ve got a lot of interesting people with interesting skill sets in this group. One of the topics that came up is whether to go into active real estate investing or to be passive. This is a complicated question. However, my advice is this. Look at your own situation and figure out what your goals are. I define wealth as time and so time must figure that into your decision.

For example, if you are already making $200K or more per year and working over 40 hours per week, you have to figure out if it is worth it to add another job to your already busy life. Make no mistake, if you want to go solo with real estate or any other kind of investing, it is a business–especially in the syndication world. I have an analyst looking at 30-50 deals per month. The time that goes into being a “deal hunta” like my friend Peter Halm is significant. Therefore, it will either take you substantial amounts of time or cost you a significant sum of money as you hire the help around you to create a successful business. That is not to be discouraging. In fact, if you are not already making a lot of money and you love real estate, by all means, go for it. My point is that the entire goal behind entrepreneurship and investing should be to make our lives easier, not more difficult.

If you can make enough money to invest in passive income now, you have to look at the opportunity cost of adding additional layers of complexity and work to your life. I wrote about this topic in my book, Seven Secrets of Eternal Wealth in a chapter called “Momentum”. The book is still number one in multiple categories and you should consider picking up a copy on amazon if you haven’t.

Going back to the concept of “momentum”–in physics, Momentum=Mass X Velocity. In this week’s episode of Wealth Formula Podcast, I am going to relate this Newtonian formula to our Wealth Formula. Take a listen and tell me know what you think!

Buck

040 : Interest Rates, Mortgages and Apartment Buildings with James Eng Feb 12, 2017

Wherever you stand on the political spectrum, you must admit that the Trump presidency has already demonstrated that it is going to do things differently over the next 4 years. Curiously, history shows us that presidents have very little to do with the state of the economy. Mostly, they are just in the right place at the right time or vice versa.

Let’s take Bill Clinton for example. Clinton’s term coincided with the rise of the internet and the dotcom economy. Lucky for him, he got out before that bubble burst. During his 8 years in office, Clinton dismantled some of the most significant pieces of financial regulation we had and we did not see the negative implications of those choices until 2008. For example, the repeal of Glass-Steagall legislation occurred in 1999. Glass-Steagall was enacted by the United States Congress in 1933 as part of the 1933 Banking Act and separated commercial and investment banking. It restricted affiliations between banks and security firms. What does that mean, you ask? Quite simply, the repeal of Glass-Steagall made it possible for the big banks to become “too big to fail.” Without this repeal, the global financial meltdown of 2007-2008 would not have been possible. But in November of 1999, Clinton declared “the Glass-Steagall law is no longer appropriate.” Don’t get me wrong, I’m not dissing Willy. My point is that most people judge presidents based on things with which they had little to do (ie. the dotcom era). The first George Bush got elected just as we were entering a recession…was that his faulty? Economist will tell you that he simply got caught in the cross-hairs of an oncoming recession. What if he was elected in 1992 instead of 1988?

Now, in the case of Trump, we may actually being something a little different. If indeed he goes through with massive infrastructure projects, we will see a direct impact, for better or for worse, on the economy. The Trump effect already has made an impression. The dollar saw it’s worst month in decades because Trump has repeatedly suggested that other currencies are undervalued. That necessarily means that Trump believes the dollar should be weaker and, going against the strong dollar policy that has been the rule since the Reagan administration, Trump is clearly advocating for the “weak dollar” and the markets see that and a sell-off of the dollar was the result. By the way, he wants a weak dollar to make our exports more attractive to other countries.

Anyway, as an investor, the infrastructure projects have many implications. First, infrastructure projects mean inflation, almost by definition. Quantitative easing did not work well and you might wonder why printing billions of dollars would not have created inflation in and of itself. The reason is that the money was lent to banks. The bank, in turn, used it to improve their balance sheets and never really started lending the way the fed anticipated. Infrastructure projects, on the other hand, mean that the government is going to inject money directly into the economy. Think of the construction of bridges, etc. You put a lot of people to work along with manufacturers and ultimately, that money spills over into the rest of the economy as people spend their new earned money on things they want and need. That’s why this kind of fiscal policy is referred to as helicopter money. If done, it will stimulate the economy and also INFLATION.

So, as a real asset investor, we don’t fear inflation because we are hedged against it. If you own rental property and inflation goes up, so do your rents. In fact, inflation will erode your debt and so having a mortgage is a great idea when inflation increases. How do interest rates behave through all of this?

Well–everyone is so fixed on what the federal reserve is saying and doing. The reality is that interest rates have much more to do with bond markets than they do with the fed’s yearly 25 basis point increase. So what determines what interest rates will be and how will that affect you and your ability to buy real assets in the coming years? Find out by listening to this week’s episode of Wealth Formula Podcast as we discuss these concepts with James Eng of Old Capital Lendin

039: Chocolate Covered Profits with David Sewell! Feb 05, 2017

I had a really interesting week. As you know I launched my book 7 Secrets of Eternal Wealth a week or so ago and it became an international best seller. I also got invited to appear on 7-8 TV show to talk about the book. So I’m excited to get our message out to more people. Thank you to all those that bought it and wrote a review. By the way, if you like what I’m doing please do share it with others. I send out notifications via social media. You can friend me…look for Buck Joffrey. You can also find me on linked in and of course twitter where I am @BuckJoffrey. But sharing this show is important. Getting our message out is important and I hope you can help me do that.

If you are an accredited investor, you absolutely should be on the investor club list. This podcast is where you learn. Investor Club is where you can turn these concepts into action. We have had 2 offerings so far including and ATM fund and my luxury hotel opportunity in Belize. If you want to know more about these, and you are an accredited investor, please join the club at wealthformula.com and we can talk off-line.

For those of you who are not accredited investors, we have presented a number of opportunities on this show where you can participate. One of those is our new sponsor, American Home Preservation which buys non-performing mortgages and keeps people in their homes by renting them back to the owners who are getting foreclosed on at a price that they can afford. It’s a feel good business for sure but it also yields 12 percent per year so it’s good for even those of you who are heartless. I’ve invested hundreds of thousands of dollars in this fund over the years myself and felt great every month I got a check! But…you can invest as little as a few hundred bucks to get started. Learn more about them at ahpfunding.com

Now, today’s show is another opportunity that is open to non-accredited investors. David Sewell was previously on my show to talk about his turn-key business in Panama where you can literally buy coffee farms for long term cash flow. That show was a great hit and many of you actually bought some land I hear. David is a very smart guy with a great heart and he actually has a new opportunity about which you will be some of the first people to hear.

Investing in coffee is very interesting because of the abundance of coffee drinkers and a growing market… it also helps that it is totally addictive. When you think about things that are not going away in the next 20 years, it’s safe to say that coffee is one of them. What else is here to stay?

Well.. I bet you chocolate will be around for a long time. The market is growing at a tremendous pace and—who doesn’t love chocolate? My 3 little girls alone could keep that industry around for at least one more generation.

On this week’s episode of Wealth Formula Podcast, David Sewell will tell us how we, too, can profit from coffee farms!

038: Trump, the economy, and the future with Lior Gantz Jan 29, 2017

The inauguration was yesterday and the world is pretty much the same. It’s actually sunny in Chicago which is a rarity this time of the year

Meanwhile, the Dow is going crazy…flirting with 20,000. Trumpenomics has got people excited. Small business future confidence indices are off the charts. The enthusiasm has not been this high since the raging Reagan 80s.

Can Trump turn it around? Is he the new Reagan? Who knows. What I can tell you is that he faces substantially more challenges than Reagan did. He did not enter office in the middle of a giant asset bubble as we have now. He had a sluggish economy and high inflation but at least he had monetary policy to work with to get things under control with Paul Volker.

Trump has a massive asset bubble and no monetary policy tools to work with at this point. The fed’s rates in 1980 was 13.35%. Meanwhile, we have been near zero for 8-9 years with several rounds of quantitative easing. The only option he has left is a massive infrastructure project…aka helicopter money. That will stimulate the economy but it will create even more debt and inflation. He’s banking on economic growth making up for the difference and we know he wants to weaken the dollar, presumably to erode the debt.

Maybe it will work.. Who knows. Many don’t think it will though. But then again, I’m an armchair economist at best.

On the other hand, my guest on Wealth Formula Podcast today, Lior Gantz studies the economy very closely and has some very interesting perspectives to share with us and, more specifically, some different ways to invest in this economy. So, when we come back, we will talk to Mr. Lior Gantz from WealthResearchGroup.com.

037: Hotel Investing In Paradise with Robert Helms! Jan 22, 2017

Robert Helms and Russell Gray are known best as “The Real Estate Guys.” This radio show and podcast is the number one real estate show in the world.

Many of you already know them and listen to them. What most of you probably don’t know, however, is that Robert and Russ are also very good at real estate development. In fact, they are currently developing the first Hilton in Belize which will be the largest hotel on the island of Ambergris Caye–the number one island destination in the world according to Trip Advisor.

In this episode of Wealth Formula Podcast I will discuss the pros and cons of international investing with Robert. In addition, we will talk about the Belize market and specifically the Hilton project which they have been working on since 2013 but will be complete in about one year.

I hope you enjoy the show.

Buck

035: Surgical Investing with Tom Burns! Jan 08, 2017

The elegance of Robert Kiyosaki’s Rich Dad Poor Dad is in its simplicity. You invest for cash flow. An asset is something that puts money in your pocket while a liability is something that takes money out of your pocket.

That simplicity was frowned upon by Kiyosaki’s critics when the book came out. Financial critics found nothing useful in his book and felt that it was actually an over-simplification of the investing process.

There was one major problem with that critique of Kiyosaki’s book. People had been investing for cash flow for years before Robert Kiyosaki was even born. Real asset investing predates stocks, bonds, and mutual funds by a long shot. In fact, my own father was investing for cashflow via single family homes and duplexes shortly after he came to this country as an immigrant in 1967 and he certainly didn’t invent the concept.

Dr. Tom Burns is another guy who was investing for cash flow before Kiyosaki’s work. He was finishing orthopedic surgery training in the early 90s when he realized that, despite loving his profession, his profession was being attacked by HMOs and other external forces and that reimbursement would likely suffer over the course of his career. He was right. So after training, he began investing in real estate.

Tom is an interesting guy. In fact, he was one of the first to even read Rich Dad Poor Dad and is even acknowledged in the second edition of Kiyosaki’s classic (for more on that, listen to the episode).

If I have not been able to do so with my own track record, Tom will hopefully reassure you that investing in real assets that cashflow is, indeed, the path to enduring wealth. Listen to this week’s episode of Wealth Formula Podcast to hear about his exciting journey over the last two decades.

Enjoy the show.

034: Apartment Investing with Jake and Gino from Wheelbarrow Profits! Jan 01, 2017

Happy holidays everyone! I hope you all had time to rest and rejuvenate.

How about we make some New Year’s resolutions and stick to them in 2017. There are thousands of you out there listening to me from around the world. If you’re listening to my program, that means that you are already investing in real assets to create wealth or you want to start doing it.

If you want to start doing it, write it down and make it happen in 2017. Time has a funny way of slipping away from us and it is really easy to procrastinate.

Case in point, in 2008, I had this idea for a blog and podcast that I was going to call poor doctor. This was just as I had finished my residency and just before I embarked on my career as a serial entrepreneur and investor. I did not own any businesses or any other kinds of assets. However, I knew I would someday. In fact, I was so sure of it that my blog and podcast were going to document my progress and, someday, show all the doctors out there how I transformed myself from a lowly broke surgical resident to a wealthy business owner and investor.

8 years later, here I am. I own multiple businesses with combined 8 figure revenues and my personal net worth is also in 8 figure land. I don’t want to toot my own horn, but I had a vision of what I was going to do and I did it. There is no reason that you can’t.

The one thing that I did not do was to start that website and podcast. I actually do own the domain and WealthFormula.com started out as poor doctor.com but that’s about where it ended. I got to busy and stopped documenting my rise to where I had envisioned. I regret it. It would have made for great content and a great example for those today who are in the position I was in 2008.

The moral of the story is, stop procrastinating. Your success a couple of years from now depends on you taking action now and the longer you wait, the farther out you will push your own success.

Today’s show will feature a couple of guys who have really created their own destiny by taking massive action. Listen to the story of Jake and Gino from Wheelbarrow Profits as they go from being a drug rep and pizza guy to a powerhouse apartment investing team. It is truly inspiring and thoroughly entertaining.

While you listen, think about what you could do today to start heading in the direction that you want and how you are going to get there. Some of you may decide that you want to go all in like Jake and Gino. Others may want to take a more passive role and invest through communities such as my own investor club, other syndication groups, or through turn-key providers.

Either way, there is something that makes you come back and listen to my show and others every week…a desire to which you need to start paying attention and taking action for yourself.

I hope you enjoy the show.

033 : Robert Kiyosaki’s advisor on Asset Protection: Garrett Sutton Dec 25, 2016

Everyone has to protect their assets. The problem is that most of us don’t think about it very much until it’s too late.

We live in an incredibly litigious society. Who knows when you might get into a fender bender or one of your kids does and the next thing you know you’re getting sued. The time to plan for situations like this is now…not after the fact. Fraudulent transfers after an accident are pretty obvious to lawyers.

Think of asset protection as attorney repellant. You spray it on as thick as you can so those blood suckers don’t get you. Remember, I’m a doctor so I have a natural aversion to attorneys. That is, except for attorneys on my side.

Garret Sutton is one of the guys on my side. He also happens to be Robert Kiyosaki’s asset attorney. Although this topic may not sound SEXY…you’re going to want to listen to this week’s interview with him on Wealth Formula Podcast. There are simple, inexpensive ways to protect yourself and you can even use Kiyosaki’s guy to get it done for you!

Enjoy the show,

032 : Cash Flow vs Capital Gains with the White Coat Investor Dec 18, 2016

As you know, I am pretty passionate about entrepreneurship and investing. Specifically, I tend to be dogmatic on investing in real assets. Am I right? I don’t know. Obviously I think so.

That said, there are plenty of rational, smart human beings that are investing in a more traditional fashion. Are they wrong? Obviously I think so. But…that’s me basing my own opinion after thoroughly educating myself.

Whatever you decide is your personal investment philosophy, it is critical for you to understand what the other side is thinking. You never learn anything if you only listen to people with whom you agree.

That’s why I wanted to talk to Dr. Jim Dahle, he is a practicing board certified emergency medicine doctor and the editor of whitecoatinvestor.com which is a very popular financial blog focused on financial education for physicians. In essence, he is doing what I am doing, specifically for doctors. That said, there are two major differences. My show focuses on all high paid professionals and entrepreneurs, not just doctors. The other, more pronounced difference, is that his views of investing are more traditional than mine. As you all know by now, I am a hard asset investor and I personally refer to stocks, bonds, and mutual funds collectively as “garbage.” That, by no means, is an attack on Jim. He and I just don’t see things the same way.

In fact, Jim offers a great deal of financial education on his site that is really worth checking out and are certainly in “neutral territory”. You can’t have too much financial education. You, personally, need to figure out what you believe in and take action. Both Jim and I strongly believe that financial education and investing is critical to your future.

I have a great deal of respect for Jim and what he is doing. His mission is a noble one…to help the over-educated but financially ignorant. That’s something I would like to do as well. So…in the spirit of presenting both sides of the coin, this podcast has 2 parts. First, I interview Jim, and then you will hear me get interviewed by Pete Mathew of The Meaningful Money Podcast.

I hope you enjoy it!

031: Get Rich Education with Keith Weinhold Dec 12, 2016

It has been a crazy couple weeks for me. As some of you know, I am aggressively pursuing some deals in a couple of great US multifamily markets and I’m getting really close to getting some under contract. That’s good news for me and for my investors! If that sounds interesting to you, make sure you sign up for my investor club on wealthformula.com and I can tell you about what I’m up to…only caveat is that you have to be an accredited investor.

Anyway, I’m not writing to you to sell you anything. I brought up what I am doing because I want you to know that I practice what I preach. There are a lot of gurus out there who like to talk about real estate and other real asset investing, but all they do is talk. I want you to know that I walk the walk as well.

That brings me to this week’s guest on wealth formula podcast. Many of you will know him already. He is the host of “Get Rich Education”, Keith Weinhold. His show similar to mine in many ways and we often share the same guests by accident! That said, he’s been at this a little bit longer and has a pretty different background than me. What we do share, however, is that Keith also walks the walk. He is an active real estate investor himself.

The other thing I like about Keith and you will discover on this show is that Keith has great integrity and believes, like me, in the concept of abundance. Keith is a giver and because of that he has become “wealthy”. In fact, after we recorded this show, the first thing he asked me is “how can I help you with your podcast?” He then spent 30 minutes talking shop with me.

Keith is a guy who I can now say that I know like and trust and I think you will too. I hope you enjoy the show!

030: Buying Turnkey Rental Houses in Alabama! Dec 05, 2016

Real asset investing is not limited to the rich. In fact, if you look at the crowdfunding movement on the internet, you can now invest in just about anything you want. Crowdfunding laws in recent years were intended to rectify the “unfair advantage” that the more affluent had to investments with greater profit potential.

But… don’t forget, the opportunities to invest in real assets were there even before the crowdfunding frenzy. Anyone who could afford it could buy themselves a house and rent it out. As you know, residential real estate is my favorite investing asset class. The problem most people have with this idea is that they do not want to be landlords. Sure that rental house might be a great investment and a good source of cashflow but who wants to worry about tenants, toilets, and termites? Certainly not me…in fact, that’s one of the reasons I chose apartment buildings instead. I felt it was easier to get management for larger assets. In most cases, I still believe that to be true.

However, I’ve been talking to more and more investors who have turned to “turn-key” models for investing in single family homes and have had great success with this model. Most of them claim they are getting double digit returns. The idea is that the company not only provides you with deal flow, but it also helps you through the acquisition process with contracts and due diligence and then hooks you up with a quality property manger.

I have no experience with this model myself but wanted to learn more so I contacted my trusted friend and fellow podcaster, Lane Kawaoka of Simple Passive Cashflow. Lane has sort of become the turn-key guy. Anyway, turns out that Lane liked the model so much he got involved in the business himself with a guy named Jonathan Mednick who he bought a bunch houses from down South.

In this episode of Wealth Formula Podcast, you’re going to hear from both of them and you and I are going to learn together! Hope you enjoy the show.

029: Assisted Living: Huge Profits and Good Deeds! Nov 28, 2016

No one wants to get old but it’s better than the alternative. Imagine getting to that age when you are unable to take care of yourself and you start feeling like a burden on your kids. What do you do?

These days, most people in this situation end up at an assisted living facility. When you think of assisted living facility, what kinds of images come to mind? Personally, I think of a sterile Soviet Union style building built in the 1960s with a faint smell of urine covered up with a flower scented cleaning agent. I imagine anonymous cafeterias and care givers who don’t know your name and who are just there punching the clock.

But maybe it doesn’t have to be that way. In most states, a growing asset class known as group homes are becoming more prevalent. Instead of that institutional vision, now imagine a regular house in a regular old neighborhood. Imagine that you know all the others living in that house and all the caregivers know you by name. Maybe that would cut down on the high rates of depression seen in the elderly right?

Now, imagine owning one or two or three of these and making 30 percent return on investment. Imagine owning something like this where the demographic for your customers is exploding.

The opportunities out there are endless but on this week’s episode of Wealth Formula Podcast, we discuss this lucrative, feel good business with Gene Guarino of Residential Assisted Living Academy.

Buck

028: The Story EVERY Real Estate Investor Must Hear! Nov 21, 2016

I have talked about Jorge Newbery several times on my show in the past. It has always been in the context of his 12 percent yield mind blowing fund. But little did I know that before that, Jorge was a real estate prodigy making literally millions of dollars from dilapidated, rejected, apartment buildings and resurrecting them back to life. His story also reminds us of the importance of failures in investing in order to know that things don’t always go as planned. Investing in apartment buildings is certainly my favored approach to wealth building but it is not without risk as some might have you believe. But then again, is the stock market without risk?

The key to success as an investor is education and experience. I’m a surgeon. When I was a resident learning a new operation, I always studied the textbooks closely before going to the operating room. Then, an experienced surgeon would walk me through the case. But true mastery did not come for any procedure until I finally left training and was out on my own.

The same holds true for virtually everything you try to learn, and often, the biggest lessons are learned from mistakes.

In this episode of Wealth Formula Podcast, we speak to Jorge Newbery about his book, Burn Zones that tells his dramatic story. If you are a real estate investor, you won’t want to miss it.

027: Robert Kiyosaki’s Advisor Tom Wheelwright on TAX FREE WEALTH Nov 14, 2016

This show is about Tax Free Wealth with Tom Wheelwright. So with all my posts about taxes and my special report, you are probably thinking I’m a little obsessed with this whole tax thing. Well, I am and it’s in part because I read this book called Tax Free Wealth from Tom Wheelwright about 3 years ago. If you don’t know Tom, you should. He is Robert Kiyosaki’s tax guru and one of the Rich Dad advisors handpicked by Kiyosaki himself. I only have a handful of must read books in my resources section which you should check out at wealthformula.com and Tax Free Wealth is one of them. It is NOT a boring tax book. It’s actually well written and incredibly fascinating.

Folks…the biggest expense virtually all of you have out there is taxes. Furthermore, most of you think you can’t legally reduce your taxes and it is just what it is. You’re wrong. I know this from personal experience having worked with high level tax advisors and it has literally saved me north of 7 figures in taxes in the last 3-4 years alone. I’ve even told a bunch of you about some of my strategies and created a special report that is just a taste of what there is out there that the government WANTS you to do that results in big tax savings.

Okay..don’t take it from me. I’m just another doctor. But do me the favor of taking it from Kiyosaki’s guy, Tom Wheelwright! This week’s Wealth Formula Podcast episode could literally change your life.

026: Attention: This show will make you money! Nov 07, 2016

I am not your typical physician if you have not figured that out. I am more of a “raging entrepreneur”. That doesn’t mean I’ve had only success. In fact, without question, I’ve failed lots of times but the difference between most people and me is that I keep trying until something sticks. I’ve used this same approach in brick and mortar multimillion dollar business enterprises, real estate, and…internet marketing.

A few years back, I got really into this idea of making money on the internet. I loved the idea that I could literally create a business on line that could make money with virtually no over head or even capital expense. Not a bad business model, right? So, I started teaching myself all sorts of different internet business models such as affiliate marketing off blogs, google adsense, etc. If you have no idea what I’m talking about, that’s ok. After all, neither did I. Furthermore, I made virtually no money doing most of this.

But… then I learned about self publishing ebooks on amazon and believe it or not, I started making $500-$700/month with random cook books etc that I didn’t even write myself! The best part…it was REALLY EASY.

Now, I know that many of my listeners are very interesting people with a lot of specialized knowledge to share with others and, in the process, create an additional source of income and/or a source for new clients. That’s why you will not want to miss this week’s episode of Wealth Formula Podcast which features an interview with ebook guru, Jim Kukral, You won’t want to miss this.

025: What’s your Investment Philosophy? Oct 31, 2016

To be a successful investor, you must have a personal investment philosophy. You need to think about not only the deal but whether or not it fits in with your own goals and your view of the world. In this week’s episode of Wealth Formula Podcast, I give you my own framework for investing that has served me well for the last 7-8 years.

As a reminder, you can leave questions for me by going to wealthformula.com and clicking on the “ask Buck” icon. Also, if there is a topic that you think I should cover, let me know. Even if I don’t know anything about the topic, I bet I can find the right person to interview! Also make sure to let me know how I’m doing by leaving a review on iTunes and sharing the show with friends and colleagues.

024: Ask Buck: Gold, Debt, and Inflation Oct 27, 2016

My goal with the Wealth Formula Podcast is to build a community of likeminded individuals who can learn from one another. A community implies some level of interaction. Therefore, every once in a while I like to do a little show called “Ask Buck”. In this week’s Ask Buck episode, we had some pretty interesting questions about gold, debt, and inflation. I bet you will find some real value in it.

As a reminder, you can leave questions for me by going to wealthformula.com and clicking on the “ask Buck” icon. Also, if there is a topic that you think I should cover, let me know. Even if I don’t know anything about the topic, I bet I can find the right person to interview! Also make sure to let me know how I’m doing by leaving a review on iTunes and sharing the show with friends and colleagues.

Thanks to those of you who have reached out to me. It helps to know that I’m not just talking to myself 🙂

023: Use your IRA to invest in real estate and other real stuff Oct 20, 2016

I have been talking to many high paid professionals like you lately who have found some inspiration from the guests that I have had on the show. Whenever I get a chance to ask people what kinds of things they want to invest in, they rattle off a lot of great stuff like real estate, mortgage notes, and even gold. Virtually everyone, including me, wishes they had all the money in the world to buy things and invest with others. It’s stuff that actually has a good chance of making money and well…it’s kind of fun isn’t it?

In many of the conversations I’ve had, the idea of using retirement funds to invest in some of these real assets has come up. What I realized is that most of you don’t know that you’re retirement account does not have to be limited to the garbage your wealth advisor recommends…namely stocks, bonds, and mutual funds. I spent all of my last podcast episode trashing these volatile and nonsensical derivatives so I won’t do it again. But what really gets me irritated is the fact that Wall Street is behind most people’s ignorance. You see, they don’t want you to know that you can buy things like real estate and gold with your retirement funds. Why would they? Wall street is not there to make you money, they are there to take your money through huge commissions and fees and if you started investing in real assets instead of stocks, bonds, and mutual funds, they wouldn’t get to take advantage of you.

In fact, if you have a wealth advisor, ask him or her if you can invest in real estate with your retirement funds. I guarantee many of you will, in response, get a blank stare or your advisor will simply say no. In rare instances, you might hear your advisor refer to this as alternative investments. Alternative investments??? Gold has had value for thousands of years. What’s alternative about that?

Wall Street will make you think it is difficult and risky to self direct your retirement funds but it’s neither in my opinion. In fact, today’s guest on Wealth Formula Podcast will tell you exactly how you can do it!

021: High paid professionals professionals dying broke: how to avoid the retirement deathtrap Oct 06, 2016

When you put aside money for retirement, who’s advice are you taking? Are you taking the advice of the wealth advisor who makes money every time you make a deposit? Why do you trust your wealth advisor? Is he or she wealthy?

These are questions that are critical to ask yourself if you want to avoid dying broke. That may sound ludicrous to you. After all, you might be making $200,000 or $300,000 per year right now. How could you ever die broke? Well, if you ever did a deep dive into the formulas used to help guide you to your golden years, you would understand.

The reality is, the formulas used by wealth advisors to guide retirement saving/investing through conventional wisdom are outdated and dangerous. We live in unparalleled times. The stock market has essentially been sideways for three years. Earnings from major companies are poor yet their stock valuation are at record highs. Why? Because interest rates have been essentially zero for eight years and institutional investors can borrow money for free. That allows for corporate buy backs and the resultant massive equity market bubbles that we are seeing today. I am not exaggerating when I say that in the history of the financial world we have never seen this scenario. We are stuck at zero rates and no amount of money printing has been successful at getting us out of this new, artificial, normal. Even the United States federal reserve bank concedes that we are in unchartered waters.

And don’t just take my word for it, look at the big players on Wall Street. They are all shorting the market. Now, why would you keep putting money into it? Is it because your wealth advisor told you so? Did you know that your wealth advisor makes money on your investments? That’s right, he tells you to cling to the old mantra of “investing in stocks bonds and mutual funds for the long run”. Well, if you do this, you could very well die broke one day despite your current fancy job and high salary.

It does not have to be this way. Understand that as a high paid professional you have many opportunities that your less fortunate brothers and sisters do not. You just have to take some responsibility for your own finances.

In this episode of the Wealth Formula Podcast, I do a deep dive for you to show why the old paradigm of investing for retirement is not applicable to our new financial world. Following these antiquated paradigms will leave many professionals living with their kids in their final days. A group of highly educated professionals will go out with a whimper rather than a bang.

The good news is, all of this is avoidable and I will tell you exactly why. Listen now!

020: Real Estate Cashflow and Capital Gains with Andrew Holmes Sep 28, 2016

The words “real estate investing” conjure up many different images. For some, it might make you think of Vanilla Ice’s reality show on flipping homes. For others, The idea of real estate makes you think of real estate moguls such as Donald Trump.

The reason for these very different images is because real estate is a very large industry with multiple different niches.

Going through all of the different niches is a show in and of itself and we are not going to do that today. Instead, the focus of this week’s Wealth Formula Podcast is a discussion on real estate as a business versus real estate investing. Both can be lucrative, but they have very different intents and outcomes.

Andrew Holmes, called by some, aka the “king of cash flow” in Chicago, has experience and active participation in both kinds of activities. Therefore, he is the perfect guy to discuss this distinction.

This is a great show and a must listen for anyone involved in real estate or even contemplating it. I hope you enjoy it and make sure to send me your comments.

P.S. if you haven’t done so, download my special report on little known ways of legally saving thousands of dollars in taxes at wealthformula.com.

019: Cashflow from Owning Commercial Mortgages! Sep 20, 2016

Let’s talk, for a minute, about how a bank works. You deposit money in the bank. These days, they pay you less than 1 percent interest. Because they are a bank, they are able to lend out most of the money you deposited. This is called the fractional reserve system. It’s complicated and best addressed in detail on another episode. However, in a nutshell, this is how it works. The bank only needs to keep a tiny percentage of what you deposit and can lend out the rest. So, say you deposit $10. The bank lends out $9 and keeps your $1 in the bank. Of course you never told them to do that. You assume your money is in the bank and that you can access it anytime you want. And…in theory…you can. That is as long as everyone wants there money back at the same time.

So, when the bank lends out your money to a borrower, they charge a much higher rate than what they are paying you and they make a lot of money. Did they pay you for putting your money at risk? Hardly.

Wouldn’t it be nice if a bank told you what it was doing with your money? What if they said, we are going to take your deposits and lend them out as secured loans. Furthermore, instead of paying you a nominal negative rate on your deposit, we will let you keep the majority of the profits. That might sound more interesting right?

Well, that is pretty much what real estate debt investing is. Learn all about it on this week’s episode of Wealth Formula Podcast as we talk to Rick Von Der Sitt from Tower Real Estate Fund.

018: Cashflow from Specialty Coffee in Panama! Sep 15, 2016

Your typical wealth advisor stresses the importance of a diversified portfolio. However, to them, that means investing in a variety of stocks, bonds, and mutual funds. I believe in portfolio diversification, but diversification should NOT be limited to different classes of paper assets that react to the emotional whims of normal geopolitical undulations.

Diversification should mean having exposure to different REAL asset classes. If you are investing in real estate, you might consider investing in not only apartment buildings, but office buildings or assisted living facilities. You might want to invest in farmland or businesses. You might even want to invest outside of your country to hedge against your currency.

Investing outside of your country may sound exotic and dangerous, but for those of you who throw money into stocks and bonds, I pretty much guarantee you that you have some international exposure already. You’re just blind to it because you have no idea what’s in your portfolio!

Furthermore, right now, the dollar is VERY strong. What does that mean? It means that we have really good buying power overseas. It also means as the dollar weakens, which if I believe is imminent, your international investment becomes relatively more valuable.

I recently discovered an opportunity to leverage an international investment to something that is highly addictive, has shown tremendous health benefits, and has a huge global market that is growing at a 20 percent per year clip? Want to know more? I thought so…

That’s why, in this week’s episode of Wealth Formula Podcast, we’re going talk to David Sewell of International Coffee Farms about investing in specialty coffee in Panama.

017: Taking Real Estate to the Next Level Sep 09, 2016

Wealth Formula podcast is not a real estate show. However, we do love real estate! Why? Because real estate is real. It’s not a piece of paper and it’s not a digital equity that you trade on Ameritrade that goes up and down with the whims of global emotion. It is an investment that allows us to own something that has nothing to do with Wall Street.

We also love it because it can provide us with one of the pillars of wealth…cash flow. In addition, it provides us with great tax incentives.

I believe every high earning professional should be invested in real estate. If the idea of owning real estate yourself is daunting, invest along side others and enjoy the same kind of cash flow and real estate advantages as those in the trenches.

In this week’s podcast I talk with a prolific real estate syndicator who puts together big deals and lets others participate in the cash flow. Whether you want to take it to the next level and become a syndicator yourself or just invest with one and get real estate exposure in your portfolio, today’s episode of Wealth Formula Podcast is for you.

016: Confessions of a Serial Entrepreneur Aug 30, 2016

Over the last several podcasts I have been impressed by the increasing number of listeners that are tuning in to the show and am really excited about the community we are growing together. For that, I thank you. This week I’m traveling but thought it would be a great opportunity for me to share more about myself with you.

A few weeks back I was interviewed by Lane at “Simple Passive Cashflow Podcast”. He asked some interesting questions that I thought might interest you and help you understand more about me. Lane asked me about the good and the bad and it made for some very interesting conversation.

015: How to figure out if you are an entrepreneur Aug 25, 2016

Solving the wealth formula is dissociating time from money. In other words, you no longer need to actively work in order to maintain a particular lifestyle.

It is important to know that entrepreneurship is not required in order to get to this point. In fact, if you already have a high-paying job, your quickest way for you to gain financial independence may be to keep your job and focus your attention on making smarter investments in cash flowing assets.

The way I think about this is that you have to have a “motor”…something that drives lots of cash in your direction. If you already are a high wage earner, you’ve got that covered for the most part. Your time may be best spent figuring out how to use that income generating motor to quickly create ongoing cash flow to replace your current time dependent income rather than learning how to start a business.

The reason to be an entrepreneur is because it gets you excited and makes you feel alive. That’s what it does for me but…that’s me. I also love Minnesota Vikings football. Not everyone does. The point is that you are who you are and you have to be true to that.

Quickly figuring out whether or not you should be an entrepreneur or stick to cash flow investing is important. If you figure out entrepreneurship is not for you, you can stop buying online courses and seminars that you never finish and start sharpening your investor skills through education and hanging around in the right community (mine!).

After listening to this week’s episode of the wealth formula podcast, I bet you will have a pretty good idea in which camp you belong.

014: What is your dream and WHY aren’t you living it??? Aug 19, 2016

I approach everything in life similar to the way I approach business. One of my cardinal rules as an entrepreneur is to avoid working IN a business so much that I stop working ON it. For example, if you have a bakery, you don’t want to be the one who is baking, doing accounting, and sales at the same time. If you do that, you become too busy to do anything else but daily tasks and, as a result, you become extremely myopic. It is important to be able to step out of your business and look into it once in a while. When you do that, some of the obvious glaring weaknesses or areas of needed improvement become obvious.

High wage earning professionals are often experts at the details but can’t see the proverbial forest for the trees. They are simply too busy to see anything else other than the next client, the next patient, or the next work day. There is essentially no time for introspection or evaluation of the most important asset than any one of us has: our lives.

When was the last time you stepped out of your life for a moment and looked at it critically? What were your dreams when you first started down this journey of “success”? What are they now? Why aren’t you living your dreams?

Now I’m not talking about the kinds of dreams that you know, for obvious reasons, will never happen. For example at 42 years old, 20 pounds overweight, and 3 spinal operations, I am pretty sure that I will never play in the NFL. Those are not the kinds of dreams to which I am referring.

I am referring to the dreams that I hear all the time from people around me. Some people want to live somewhere else. Some people want a different kind of job or want to start all over in another field. Others simply want to have more time with their children. It simply breaks my heart to see my hard working, high paid professional friends living like zombies with hopes of stockpiling enough cash away for the next 20 years to finally begin “living their dreams” in retirement.

Why not take take a moment to look at your own life critically? You may find that with a little introspection and a little bit more courage, that some of those “dreams” you have might be able to come to fruition sooner than you thought with some small but critical adjustments.

013: Ask Buck Aug 10, 2016

This week’s episode of Wealth Formula features the first of many episodes of “Ask Buck” where you, my fellow professionals looking to transform into entrepreneurs and sophisticated investors, ask me the questions that are on your mind. This week’s topics include questions about cash flow versus cash reserves, topics in real estate LLCs, flipping versus cash flow investing and more. Ask your questions at Wealthformula.com by clicking the tab that says “ask Buck”.

I love the enthusiasm that all of you are showing and hope to continue building this new unique community of professional entrepreneur/investors. There are not enough of us out there and we need to spread the word to our colleagues so that they don’t end up like all the other victims of Wall Street!

012: An engineer turns to turn-key real estate! Aug 04, 2016

Lane is your classic highly educated, high wage earning professional. However, he doesn’t throw his hard earned money into the stock market. Lane uses his money to buy houses and is gradually phasing out his own need to have a boss. At the age of 30, he’s already more than half way to replacing the income generated by his engineering job.

The best thing about Lane is that he knew NOTHING about real estate before he started. He is a classic example of someone who understands the wealth formula. He doesn’t have to quit his day job to make it happen. With a little bit of time spent learning about investing in real estate, he has already accumulated 11 homes across the country. Find out how by listening to the latest episode of Wealth Formula Podcast.

011: Doctor, my portfolio hurts! Jul 29, 2016

In this episode of Wealth Formula Podcast, we talk with Dr. Eric Tait, MD, MBA about his transformation from an internist to founder and president of Vernonville Asset Management LLC. Dr. Tait gives his insight into the economy and ideas about how to invest your hard earned money (hint: NOT the stock market!)

010: The biological secret to success: repeated failure Jul 22, 2016

We learn to walk by repeatedly falling down. We learn to talk by first making unintelligible noises. We are hard wired to learn through trial and error but are brainwashed by an educational system that teaches us that doing things a different way is wrong and that failure is bad. The reality is that any great entrepreneur or investor must take chances repeatedly to learn and to succeed.

009: From High Paid Professional to Higher Paid Entrepreneur Jul 14, 2016

Zed Williamson was a high paid professional but was not satisfied. He shed his golden handcuffs and went on to build a company just like the one he worked for…but better. In the process, he gave him self a BIG raise!

008: What the heck is Brexit? Jul 07, 2016

Implications of the world order on your pocket book.

007: Kiyosaki’s Quadrant from a Professional’s Perspective Jun 24, 2016

006: The crash is coming! Jun 22, 2016

Is the stock market about to crash? Is inflation about to take off? What should you do?

005: What is the Wealth Formula? Jan 29, 2014

Back to Basics. What is exactly is the wealth formula again?

004: Helping Others While Getting 12% ROI! Dec 25, 2013

Interview with Jorge Newberry, Director of American Homeowner Preservation LLC.
http://www.ahpinvest.com
Call: (800) 555-1055

003: Using Your IRA to Buy Assets Instead of Worthless Paper Dec 03, 2013

Interview with Dennis Blitz, President of The IRA Club.
http://www.iraclub.org/

002: The Real Story Behind Real Estate Oct 07, 2013

001: Introduction to Wealth Formula Sep 30, 2013

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Wealth Formula by Buck Joffrey

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Visit consensusnetwork.io for the full episode and more crypto content!

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12+ Time Best-Selling Author | 1,400+ rental units | Engineer | Syndicator | Radio Host at www.SimplePassiveCashflow.com

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