Wealth Formula

I know I'm always ranting and raving about the evils of Wealth Advisors but the reality is that I have learned a great deal from some of them. You see, there is a difference between Wealth Advisors who work for you and those that live OFF of you. There is also a big difference between Wealth Advisors who actually work with WEALTHY people compared to those who work with your typical professional who is just trying to do the right thing and work with a "professional".   In fact, those advisors who work with the ultra wealthy are often the ones who know some of the best kept "secrets" of the ultra wealthy. We can learn a lot from them.   My friend Jim Dew is one of those guys and offers some nice little "behind the veil" tips and tricks on this week's Wealth Formula Podcast. Make sure to tune in! Shownotes:

[01:25] Buck introduces Jim Dew

[03:50] Fiduciary VS traditional

[06:48] Influences on Jim

[11:30] Jim’s ninja strategies

[16:10] The Augusta Rule

[22:09] Captive Insurance

[28:15] Jim’s typical client

[31:12] Learn more about Jim

Email [email protected]

One of the reasons I don’t like investing in the New York Stock Exchange is that by the time a stock become publicly traded, most of the upside is already gone.

Let’s take Square, Inc. for example. This is the mobile payments firm with that software that allows pretty much anyone to take credit card payments.

Nice idea…sure and I don’t doubt that this company has a bright future.

But when you look at the stock, it’s price to earnings ratio is over 1000.

So what does that mean? Well, say you have a small business that makes about 500K profits per year. You decide you want to sell your business.

At P/E ration of 1000, that would mean the value of your business based on your profit would be $500,000,000. Yes—a half billion dollars!

Are you really going to buy a company valued like that? Well, that’s the kind of stuff people buy in the stock market routinely.

Private companies don’t typically have those crazy valuations. For private companies, valuations are typically made by appraisals not by irrational exuberance.

That’s why the ultra wealthy who often are able to invest in these companies before their initial public offering often make a killing.

The problem is that most of us don’t have a couple extra million to play around with to speculate a little bit even on late stage private companies that are about to go public.

But what if you could invest $25K into Lyft (uber’s major competitor) before it goes public. Would you do it?

It might make sense. The problem is that, until recently, it was impossible for accredited investors who are not worth several million dollars to participate in this world.

That is until recently. I just discovered a way for high paid professionals to play in the world that used to be reserved for the billionaire boys club.

It’s through a business called equityzen and this week’s Wealth Formula Podcast feature’s its CEO and founder, Atish Davda. Check it out!

Buck

P.S. If you really want to start investing like the wealthy, check out Your Roadmap to Real Wealth (Wealthformularoadmap.com).

In 2008, when I finished my surgical residency, my net worth was about negative $75,000—not bad considering that number included education until I was 33 years old!

As you know, 2008 was also the year of the great meltdown of the financial system. Doctors that I knew who had been practicing for decades with the intent of retiring soon, suddenly realized that they couldn’t! Half of their money had evaporated within days!

Why? The short story is Wall Street greed. You see, Wall Street has created this really profitable game for itself. Here’s how it goes.

You work hard to make money. You entrust your money in Wall Street through your wealth manager with hopes that your wealth will grow.

Of course Wall Street charges you a lot of fees and wins whether you win or lose. They also make big bets with your money so they can make even more money for themselves.

In my humble opinion, I will go as far as to say that it is a hell of a lot easier to become wealthy investing outside of Wall Street.

But where do you start? I’m asked this question all the time. And there is no simple answer. There is a lot to learn. This is podcast number 100. We’ve covered all sorts of investments, tax strategies, and even asset protection.

But…we’ve never before put it all together in one place in a COMPREHENSIVE format taught by some of the smartest financial minds in the world—something that can be studied and maybe even mastered.

That is…until now. I am really proud to present to you a labor of love on which I have spent the last 6 months and over $150,000 to create. I have created a course called Your Roadmap to Real Wealth and you can learn more about it at WealthFormulaRoadmap.com

The course was produced by my friend Pam Hendrickson who spent nearly 20 years producing courses for Tony Robbins to prepare for this moment—ok maybe Tony wasn’t just a warm up for me. But..the point is I wanted the best of the best to make this happen. And that’s what I got!

Just look at some of the names on this faculty: Rich dad Advisors Tom Wheelwright and Ken McElroy. Tom’s tax firm has helped me legally save literally millions of dollars of taxes in the past few years. Ken McElroy is the guy I learned real estate from and who I consider the Michael Jordan of multifamily real estate.

Speaking of real estate, how about the real estate guys, Robert Helms and Russell Gray—friends of mine and some of the best in the business at teaching real estate.

We’ve got Marco Santarelli—the turn-key rental guy and, if notes are your thing, how about Jorge Newberry, founder of American Home Preservation. Then there is Mauricio Rauld, my SEC attorney teaching you what you need to know about investing in private placements.

We’ve even got my own asset protection and estate planning attorney Kevin Day to teach you why I sleep well at night knowing what I know and being structured the way I am.

And finally, we’ve got the legendary Dean Graziosi teaching us about the millionaire mindset and the meaning of true wealth.

How about that for all start line up?

Of course, it wouldn’t be my course if I didn’t give you everything I personally know about personal finance and investing so I’m part of the faculty as well.

Along with the course, I am also happy to announce the Wealth Formula Network which will now be the home to the Wealth Formula community. This is where I will be spending my time so I can really focus on helping people who are truly committed to take it to the next level.

Again, the course is called Your Roadmap to Real Wealth and it may very well serve as the foundation for the rest of your investing life.

Check it out at WealthFormulaRoadMap.com

Before I had a clue on how to invest, I thought I could just figure it out on my own. How hard could it be? After all, it’s not brain surgery right?

And to a certain extent that is true. The math is quite easy. And yes, there is a simple equation.

Wealth=leverage(Mass x Velocity).

But the problem is, you have to believe the numbers that you plug into that equation in order for you to invest with confidence.

And…to be clear, apart from concepts like Wealth Formula Banking, there really is no guaranteed return on investment in just about any opportunity.

You can do all the math and due diligence you want, but at the end of the day, you have to take some leap of faith when you write that check.

The first time I bought an apartment building, I did all the math right but there were many things I did wrong that caused me to lose about $300K—that was an expensive education. And boy…did I learn. In fact, I’m happy to say that I never lost money on another apartment investment since then.

A big reason for that is my discovery along the way that investing is a team sport. You’ve heard that before I’m sure. But it’s really important. In fact, I call this tribal investing.

You see, with the concept of tribe, there is this idea that we can all benefit from the collective strengths of our community.

Yes…learning is best done through mistakes. But…they don’t need to be your mistakes. Borrow the battle scars of others in your tribe!

Tribe also suggests an orderly community—one in which there are checks and balances. It is way that people create order out of an otherwise chaotic world. The same can be said for your financial tribe.

Your want to have people that have your back and you want people with whom you invest to take your money personally. You want them to feel personally responsible for your money and also worry about their reputation in the community if they don’t perform—that’s where checks and balances come in to play.

Listen, the best investors in the world lose money. There is no such thing as a deal that can’t go south and even the most skilled and experienced deal sponsors will on, occasion, lose money for their investors.

But if someone is in your tribe, the hope is that they believe what they are telling you to be truth and do not take the responsibility as your fiduciary lightly.

That’s why it is important to constantly expand your tribe. You need to be able to trust people before you can trust their deals.

Some of you occasionally send me opportunities and want my opinion and more often than not I send a one liner back to you that says, “I don’t know them”.

That’s not to be curt or unhelpful. I just don’t look at anything unless I have some kind of connection with the sponsor group.

On the other hand, knowing an operating group well and believing in them can sometimes convince me to get past some of my own dogmas.

As you may know, our accredited investor club bought into an offshore resort development last year.

I don’t normally invest in resort property and I normally don’t invest in developments. But the strength of this team and associated brands along with their character made me look deeper into an opportunity I would have otherwise never considered.

That property is Mahogany Bay Village and Beach Club and the lead developer, Beth Clifford, is my guest on Wealth Formula Podcast this week.

If you have ever considered investing in developments or resort property, make sure you listen to this show as Beth will explain, from the investor’s perspective, how one should approach these kinds of projects.

When I was a kid, $20 dollars seemed like A LOT of money.

When I was a surgical resident making less than $50,000 per year in San Francisco, making $300,000 like my professors sounded like A LOT of money.

Since embarking on my entrepreneurial and professional investing journey, I have had $300,000 MONTHS on multiple occasions.

But making $10 million dollars in one year still sounds like A LOT of money.

I have had the good fortune of being able to break through these kinds of mental barriers multiple times in my life to get to the next level.

Hopefully, someday soon I will look back on the days when making over $10 million dollars in a single year and having a nine figure net worth seemed like a lot of money.

Does that seem realistic? It does to me.

Why? Because all of the barriers that we have in our lives are self-inflicted. We create our own boundaries. They don’t really exist.

Recognizing that is critically important if you want to continue to develop not only financially, but as a person.

The other day I was trying to think of what my biggest fear in life is. It’s not death and it’s not dying broke.

My biggest fear in life is hitting a plateau and not growing any more.

It’s an easy trap to fall into isn’t it? Let’s say you are like me and one day you decided you wanted to be a surgeon. You were on a mission.

 

You went to college. You worked hard and good grades and test scores. Then you studied your butt off for years and finally became that person you aspired to be.

 

But 5 years into your “dream”, you started wondering to yourself, “is this it?” It seemed so much more exciting and glamorous as a dream than it does reality. Now it seems like—a job!

Suddenly, that thrill of being a fancy surgeon has warn off and you didn’t really think of anything past that point in your life. Even worse, now you have created a world for yourself that is highly dependent on your “high salary” and you feel like you don’t have any options anymore.

You are shackled to the golden handcuffs. Others can’t understand why you, with your fancy titles, your fancy house, and your BMW, don’t seem particularly happy.

But.. I understand your discontent.

You see, I believe that there is really only two states of being—growth or death. If you are not growing as a person…if you are not constantly learning and developing as a human being, you are pretty much already dead in the figurative sense.

To me, to be such a metaphorical zombie, is the worst that could happen.

How do you prevent that from happening to you? Well, my guest on Wealth Formula Podcast today, Michael Bernoff is an expert on exactly these types of things.

So, if you don’t want to be a zombie, make sure to tune in to the show!

Shownotes:

[00:07] Introduction

[08:59] Buck introduces Michael Bernoff

[10:42] Michael’s story

[13:18] There has to be more in life

[24:28] Convince yourself to get out of your comfort zone/ the golden handcuff

[28:42] A different kind of wealth

[32:16] How to be happy with where you are at

[36:30] Lean more about Michael

Michaelbernoff.com michaelbernoff.com/wealthformulapodcast [38:40] Outro

Wealthformularoadmap.com

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When I first learned about the concept of cash flow investing, it was like a religious experience.

In my case, I went around everywhere proselyting the virtues of cash flow investing to my friends. I was so excited about the concept that I couldn’t stop talking about it. In the process, I bored the heck out of a lot of people!

But I couldn’t help myself. The idea is so simple and elegant, right? Buy things that throw off monthly cash flow. When you have enough cash flow, you can “retire”!

Indeed, all of this is true. But… over the years, I figured out that it’s a little bit more complicated.

It always cracks me up when I see someone have the cash flow revelation moment and the lights go on. They talk about their passive income goals and how they are going to retire in 5 years by buying real estate—even if they are currently broke!

And the reality is that when you listen to a lot real estate podcasts out there, it might lead you to believe it is just that easy.

Here’s the problem though. In order to create passive income, you have to have money in the first place!

It’s math right? Remember, the Wealth Formula? Wealth= Leverage (Mass x Velocity).

Let’s just focus on mass for a second. Mass means how much money you have to invest.

If you have no mass, it doesn’t matter how much leverage and velocity you use. You still won’t be able to create wealth.

This issue isn’t something that affects the broke either. I talk to plenty of high paid professionals who like the idea of replacing their W2 incomes with “passive” income.

If you make $250,000 per year, that’s not an easy feat! If you average 10 percent cash on cash, you have to get $2,500,000 into the machine to create that stream of income.

Doable yes but most of us are not that patient. What if you want to move quicker? What are your options?

Well—for one, understand that you have many options. If you want to move quicker, you might have to broaden your investing horizons beyond the real estate box.

We might have to look into buying or starting businesses that produce a lot more income. These businesses can either serve as mass to accumulate more real estate or, like in my case, can serve to be stand-alone “passive” streams of income.

Of course all of this can sound intimidating if you are a hard working professional already slugging it out for 50 hours per week. Who has time for all of this?

But understand that in order to create more income, you really only have two options. Either you have to buy it (like real estate), or earn it with your time. If you can’t afford to buy more, then you have to earn it and that will take more of your time.

But taking more of your time doesn’t mean that it has to be another full time job you add to your current busy schedule for the next twenty years. You can also invest a certain amount of time up front just like you put down a lump sum of money to buy a rental house.

Then, you can leverage technology. Sound intriguing? Well, it should!

My guest on this week’s Wealth Formula Podcast is going to show us exactly how to do that.

So…if you want to speed things up and get on the golf course, you won’t want to miss this week’s conversation with Udemy expert Jonathan Levi!

Jonathan is a serial entrepreneur, author, and lifehacker born and raised in Silicon Valley.

He’s the author of the blockbuster Become a SuperLearner series, and the host of the award-winning Becoming SuperHuman podcast. His passions include learning languages, musical instruments, acro yoga, weightlifting, and cooking.

He lives in Tel Aviv, Israel with his superwoman, Limmor.

Shownotes:

[00:07] Introduction

[08:59] Buck introduces Jonathan Levi

[10:20] Jonathan’s journey

[15:57] What is Udemy and how does it work?

[17:40] Jonathan’s experience with Udemy

[22:49] Is Udemy an option for YOU as a stream of income?

[28:39] What are the more appealing courses from the buyer’s perspective?

[33:30] How

Discover more financial secrets on wealthformula.com

I don’t even watch the news anymore. The advent of the 24 hour news cycle combined with our reality television culture has changed what used to be “news” into entertainment.

The fundamental problem with this juxtaposition of news and entertainment is that something that was supposed to be unbiased—just facts becomes something that has to have an angle.

Plain old facts just aren’t that interesting anymore. They have to be layered in commentary—commentary that sells.

The reality television culture that we live in dictates that anything on TV must be controversial. If it’s not controversial, it’s not interesting.

Think about it. Why do people watch reality TV anyway? Because of the drama—we love to watch a car wreck when we can be safe from harms way.

Reality television allows for dramatic stories of love, hate and betrayal. That’s what makes it addictive. Facts are not addictive.

The irony of the times we live in is that reality TV culture has created a world in which there is, in fact, no reality.

You see this from the highest office in the land—Trump says everything is fake news!

Now, to be clear, I’m sure Donald Trump does not get the benefit of the doubt from the press but does that mean we throw out the baby with the bath water? In other words, if the news is fake, what’s left to believe.

Listen—this is not meant to be written as a political piece by any means. I’m a guy with strong libertarian views but I’m certainly not one to cast aspersions on politicians.

I just think we need to start to return to a fact based society. If we cannot at least establish facts, then how can we ever make meaningful decisions about our future?

This kind of discourse is probably no more important than on the subject of climate change. A few weeks ago, I had on Alex Epstein—author of the The Moral Case for Fossil Fuels.

A lot of you were not happy about that and some of you were quite happy that I had Alex on the show. I just wanted to hear his perspective.

What was funny about that show is that Alex did not actually say that climate change is not real. His thesis was actually whether or not fossil fuels are good for humanity. He also didn’t say that alternative fuels were bad.

But… it got people fired up on both sides—sort of like a reality show I guess.

Anyway, I’m a facts guy and that’s all I’m after. And my guest this week on Wealth Formula Podcast is a pretty hard core alternative energy guy although one who manages to keep his rationality.

You’ll learn all about the facts behind solar energy and alternative fuels and also how they might make sense to add to your portfolio.

So…if you are looking for some reality, make sure to tune in to this week’s show with Stephen Honikman!

Shownotes:

[00:07] Introduction

[11:37] Buck introduces Stephen Honikman

[14:55] Stephen’s counter argument to Alex Epstein

[18:54] The economic argument for alternatives over fossil fuel

[24:29] Alternative vs fossil fuel – Dollar for dollar

[35:22] Why solar?

[38:38] Solar energy and tax

[51:09] Investing in solar energy

[01:00:47] Get in touch with Stephen: https://wisercapital.com

For Solar energy inquiries, email Stephen at: [email protected]

For other inquiries, email Stephen at: [email protected]

For more information, please contact Buck at [email protected]

Tony Robbins mentioned this strategy in his New York Times Bestseller: MONEY Master the Game.

BUT…he didn’t go into much detail.

Why?

Because the strategy really wasn’t available to most people.

In fact, you had to have a net worth of over $10 million to qualify—which I am sure Mr. Robbins cleared long ago.

Now here is the good news. I have figured out a way for this mind-boggling strategy to be available to just about ANYONE who makes over $100K per year—a lot fewer zeros than you used to need!

So what’s the big deal about this kind of strategy?

You get to take most of the stock market upside.

You get to use bank money to leverage your gains and AMPLIFY your returns significantly.

YOU TAKE NONE OF THE STOCK MARKET LOSSES EVEN WHEN IT CRASHES (WHICH IT WILL)!

Your money grows tax-free.

When done properly, your money is bulletproof to creditors.

Does this kind of strategy sound appealing to you?

If you could leverage up your gains and NEVER take losses in the stock market, would you sleep better at night?

If you make at least $100K/year, you will not want to miss this webinar as it could literally secure your future once and for all.

Intrigued? Find out more of Wealth Formula on our official website:

Wealthformula.com

Find out more financial secrets on wealthformula.com

“Sexual transmutation is the most powerful tool in existence when it come to creation, invention, accomplishment, creativity, advancement, and achievement.”

– Napolean Hill, Think and Grow Rich

This is a quote from one of my favorite books. It’s in the chapter than no one talks about on sexual transmutation.

If you have read the book, you know why. It’s kind of a weird chapter in the middle of the most mimicked book in Self-Help history.

In a nutshell, Napolean Hill says that harnessing sexual energy is the most powerful and efficient means of accomplishing our platonic goals.

It took me a little while to understand what he was saying, but here is how I interpret this.

If you have ever been a teenage boy, you know there is a period of time, for most, where little else seems to matter than teenage girls. I certainly remember that.

I’m not talking about anything necessarily seedy. I’m just saying that there is a certain obsession that accompanies that special time in life.

It’s hard to think about anything else other than the girls you wish would be your girlfriend or, at least, give you the time of the day.

Of course most people eventually find a way to balance these thoughts with other important details in life. However, it’s hard to argue that there is anything more powerful than that kind of obsession.

Now hold on to that feeling of obsession that I’m talking about and now… take the sex reference out of the equation. Have you ever been so obsessed with something in your life that you can’t stop thinking about it?

I have. When I was a kid growing up in Minnesota, ice hockey was on my mind ALL THE TIME and had it not been for a career ending back injury, I would have played college hockey and who knows how far I could have gone.

The funny thing is that by Minnesota standards, I started playing organized hockey a little late. I was 9 years old. When I first started skating I couldn’t even stop. But four years later, I went from the worst guy in the park to one of the best guys on one of the state’s best teams.

I was obsessed. I ate, breathed, and slept hockey. That made up for a lot of my other shortcomings.

Over the years, I have felt similar obsessions at times in my life. For example, when I decided I wanted to be a doctor, I was obsessed with how I was going to get into medical school. And finally, as an entrepreneur, I have been obsessed with the creation of various businesses throughout my career.

The one thing that drives obsession of all kind is the desire for some kind of accomplishment. When it comes to teenage boys, we know what that is. For the entrepreneur, it is something very different.

The most successful entrepreneurs I know are not, in fact, driven by money. They are driven by the idea of creating something out of nothing and seeing it come to life. Money…is just a way to keep score.

I use the example of entrepreneurship here but it really applies to just about anything. Napoleon Hill’s sexual transmutation is nothing more than a reference to the power of being obsessed with something. Olympic athletes, world class chess players, musicians, you name it. The highest achievers in the world harness that obsessive energy to do extraordinary things.

My guest on this week’s Wealth Formula Podcast is a kindred soul. He is as much of a raging entrepreneur as I am and he’s one of the most interesting people I have ever met. DO NOT MISS this week’s show as I discuss the spirit that drives entrepreneurs with Jorge Newberry.

Shownotes:

[00:07] Introduction – Obsession

[09:53] Buck introduces Jorge Newberry

[11:14] Jorge’s story

[13:19] It’s NOT about making money

[14:48] The entrepreneur gene

[19:16] American Homeowner Preservation

[27:09] Jorge’s next step

[30:22] Note Buyer Bootcamp

[37:33] How much do I need to get into this business?

[41:08] Take the opportunity to receive 12% return on AHP before May 24th

[42:22] Get your $200 coup

If you're heading into a dark cave for the first time, bring someone who's been there before. That's sound advice--not only for exploring caves, but also for investing your money.

In fact, when it comes to investing money, it would be even better if you brought a geologist with you who had previously studied that cave extensively and had a map of it along with a great big flashlight!

You see...the mistake most people make is that they believe investing is unpredictable. They are brainwashed into believing that by Wall Street.

"Invest for the long term in a portfolio of stocks, bonds, and mutual funds". What does that mean anyway?

It means, "Give me your money so I can pull off a bunch of fees. And when you see your account go down by 30 percent in the next correction, it's not my fault. It's an act of nature."

Are we really that helpless when it comes to controlling our financial future? God help us if we are!

I can tell you from my own experience that we are, indeed, not helpless. If you feel that way, you have not tried hard enough. You have not spent any time on financial education or trying to build your network--your tribe. After all, your network equals your net worth.

Indeed, one of the most profound discoveries I made during my quest to understand the way that the ultra-wealthy invest is this--it's not an accident that the rich get richer. The wealthy don't rely on luck--they engineer their wealth.

Wealth is created, it does not spontaneously appear. You can’t expect to get wealthy by simply hoping to get hit by it.

Now listen, I’m not saying that the rich never lose money. They speculate sometimes and sometimes they lose. But the bets they make are asymmetric. Wins result in HUGE wins and losses are easily absorbed. 

In order to make sure they have more wins then losses, they make sure they have insider information. I’m not talking about illegal stuff. 

I’m talking about being deeply connected with people who intimately know an industry or an asset class that have tremendous track records. Simply put…when they bet on something, they are right way more often then they are wrong.

When you find people like this, you tag a long!

Anyway, Broadway musicals are completely foreign to me. Yet, they can be incredibly lucrative if you invest in the right one.

Frankly, I didn’t even know you could invest in Broadway musicals until I met this week’s guest on Wealth Formula Podcast: Erica Schwarz.

When it comes to musicals, she is a true expert and she is going to illuminate this industry for us and how we can profit from it. She will be our guide into this dark cave of Broadway! Make sure to check out the show.

Shownotes:

[00:07] Introduction

[09:41] Buck introduces Erica Schwartz

[10:25] Erica’s theatrical background

[12:39] What does Erica’s job entail

[14:16] The history of Emerson Colonial Theatre

[16:42] How does the theatre business function

[27:43] How to approach the theatre business

[44:15] Find out more about Erica and the theatre business

[email protected]

[46:32] Outro