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.

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.

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 it really?

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.

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

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

Thoughts on Sunday podcast on internet business investing:

Latest on the economy and markets:

New product to discuss: Mutual Funds versus ETF (Exchange Traded Funds)

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