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.

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:

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

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:

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!

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

YouTube

Articles

Books

Websites

Graphs

Corporate custodianship and legal issues

Twitter 

Buying Crypto

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/

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!