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The Wealth Formula Podcast by Buck Joffrey – Wealth Formula
36 minutes | Jan 23, 2022
Episode 300! ASK BUCK!
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! The post Episode 300! ASK BUCK! appeared first on Wealth Formula.
25 minutes | Jan 16, 2022
299: The Lords of Easy Money
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 MoneyHow does Fed policy result in income inequality? The post 299: The Lords of Easy Money appeared first on Wealth Formula.
36 minutes | Jan 9, 2022
298: Is PRIVATE Debt the Real Danger?
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 debtWhat 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? The post 298: Is PRIVATE Debt the Real Danger? appeared first on Wealth Formula.
38 minutes | Jan 2, 2022
297: Another Look at the Real Estate Market with Jorge Newbery
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 PreservationHow has the pandemic affected AHP and the housing market?AHP Title and its strategyahptitle.com The post 297: Another Look at the Real Estate Market with Jorge Newbery appeared first on Wealth Formula.
45 minutes | Dec 26, 2021
296: Investor Cybersecurity 101
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 SecureBuck answers some of your questions The post 296: Investor Cybersecurity 101 appeared first on Wealth Formula.
34 minutes | Dec 19, 2021
295: The 900 Pound Gorilla in the US Economy
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 prophecyHow would Inflation affect you as an individual investor? The post 295: The 900 Pound Gorilla in the US Economy appeared first on Wealth Formula.
40 minutes | Dec 12, 2021
294: Navigating the BOOM/BUST Cycle with Murray Sabrin
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 21st 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 recentlyDr. Sabrin’s book Navigating the Boom/Bust Cycle: An Entrepreneur’s Survival Guide The post 294: Navigating the BOOM/BUST Cycle with Murray Sabrin appeared first on Wealth Formula.
48 minutes | Dec 5, 2021
293: Lessons Learned from the Greatest Investors in History with William Green!
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 successAre there any parallels between successful investors and happiness?Is it possible to clone the ways of successful people?The investing principles of successful individuals The post 293: Lessons Learned from the Greatest Investors in History with William Green! appeared first on Wealth Formula.
49 minutes | Nov 28, 2021
292: Dave Liu on Using Psychology to Hack Life for Success and Wealth
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 opportunityWhat 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 The post 292: Dave Liu on Using Psychology to Hack Life for Success and Wealth appeared first on Wealth Formula.
25 minutes | Nov 21, 2021
291: A Shot to Save the World: The Story Behind the Covid Vaccine!
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. The post 291: A Shot to Save the World: The Story Behind the Covid Vaccine! appeared first on Wealth Formula.
38 minutes | Nov 14, 2021
290: What are the 7 Deadly Economic Sins?
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 KnowIs capitalism is a zero-sum game?Would society be better if we punish the rich?The wave of cultural stigma against being rich The post 290: What are the 7 Deadly Economic Sins? appeared first on Wealth Formula.
49 minutes | Nov 13, 2021
HNW Charitable Strategies that are PROFITABLE
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 email@example.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. The post HNW Charitable Strategies that are PROFITABLE appeared first on Wealth Formula.
42 minutes | Nov 7, 2021
289: Is Bitcoin the Next Layer of Money?
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 CurrenciesHow 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 The post 289: Is Bitcoin the Next Layer of Money? appeared first on Wealth Formula.
9 minutes | Nov 2, 2021
Urgent Wealth Formula Banking Announcement!
This is a 5 minute update on Wealth Formula Banking changes that are occurring because of current tax legislation. PLEASE LISTEN NOW! The post Urgent Wealth Formula Banking Announcement! appeared first on Wealth Formula.
37 minutes | Oct 31, 2021
288: Dennis Gartman: Inflation, the Fed and Trouble Ahead!
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. The post 288: Dennis Gartman: Inflation, the Fed and Trouble Ahead! appeared first on Wealth Formula.
56 minutes | Oct 24, 2021
287: Artificial Intelligence, the Robot Revolution and the New World Order!
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 AIWhere is the US compared to other countries when it comes to AI technology?Blockchain and AIhttps://mfordfuture.com The post 287: Artificial Intelligence, the Robot Revolution and the New World Order! appeared first on Wealth Formula.
40 minutes | Oct 17, 2021
286: Ninja Tax Strategies with Tom Wheelwright!
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. The post 286: Ninja Tax Strategies with Tom Wheelwright! appeared first on Wealth Formula.
51 minutes | Oct 10, 2021
285: Chinese Evergrande and the state of the Global Economy!
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 TsunamiIs the current Inflation transitory?What is China Evergrande? The post 285: Chinese Evergrande and the state of the Global Economy! appeared first on Wealth Formula.
36 minutes | Oct 3, 2021
284: Jorge Newbery on the State of the Real Estate Market!
“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. The post 284: Jorge Newbery on the State of the Real Estate Market! appeared first on Wealth Formula.
34 minutes | Sep 26, 2021
283: Ask Buck 9/25/21
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! The post 283: Ask Buck 9/25/21 appeared first on Wealth Formula.
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