Wealth Formula

Wealth Formula

By Buck JoffreyBusinessInvesting
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Wealth Formula episodes

  • 138: Ask Buck Christmas Edition
    I’d like to give each and every one of my listeners a gift this year so I’m going to do that the only way I know how—to give you some unsolicited advice (not to be confused with financial advice). Take it or leave it but these concepts have served me well. So...let us begin!
    Invest in people, not deals. This is just as true whether you are investing on your own as owner operator or as a passive investor. It is easy to understand from the perspective of a passive investor. Once word gets around that you might invest in a private placement, you will get a lot of garbage thrown your way. My advice…if you don’t know who it’s coming from, delete it.  Proformas and glossy offering memorandums can be made to look whatever way you want them to look. You can make swamp land in Florida look good on paper. It’s like putting lipstick on a pig. Work with people that you know, like and trust.
    What if you are contemplating a new venture on your own or are thinking about buying your own apartment building? Same principal here…invest in people, not deals. In this case, you have to invest in your self. You have to take the time to learn and get the help you need from mentors and masterminds. If you are going into a dark cave for the first time, bring someone who’s been there before.
    Be careful on this one—lots of gurus out there who aren’t going to help you that much. They are too busy selling their programs to be true mentors. It’s better if you find a real person willing to take you under their wing who’s got some scar tissue. To master anything new, you have to learn from mistakes…but they don’t have to be your mistakes.
    Finally, remember to keep an open mind and try to learn from multiple sources. A mentor is great but should serve as a foundation for your on-going learning. Get perspectives from others. I have found that perfectly intelligent people can disagree on how things should be done and both or neither can be right at the same time.
    I have missed out on some big opportunities in the past few years because I kept listening to the same people crying wolf about the economy over and over.  I have found that when everyone thinks the same thing, it is usually time to second guess the assumptions that are being made.
    So…please keep listening to my podcast and become an active member of the Wealth Formula Community. But also listen to others who have a different perspective. Tell me when you think I am wrong. But if you do, back it up rather than quoting another podcaster or blogger.
    On my end, I will continue and try not to let myself get boxed into one kind of thinking and to continue to provide you with truly unique and useful content that isn’t just a replay of someone else’s podcast. I think we have just scratched the surface.
    Merry Christmas!
    1 hr
  • 140: Multifamily Mastery and Infinite Returns with Janet LePage
    I remember being in medical school thinking that I wanted to be a surgeon. The idea of it appealed to me very much. I certainly had the personality of a surgeon. But there was something about which I felt very insecure.
    You see, growing up, my dad was about as white collar as they get. I didn’t learn anything about cars and never put up any shelves. The only reason to think I was any good with my hands at all was the fact that I excelled in hand-eye-coordination sports like ice hockey and table tennis (aka ping-pong).
    So as much as I loved the idea of being a surgeon, I had this big fear that I would be horrible at it. And, in the beginning, I kind of was!
    In medical school, all of the guys I liked were orthopedic surgeons. They were all into sports like me. The problem was that they were all carpenters at heart and I was NOT. I remember an orthopedic surgery resident handing me a saw to amputate a guy’s leg at the VA. Having that tool in my hands wasn’t pretty. Fortunately, the leg was suppose to come off anyway.
    Eventually, I realized that I was better at soft tissue surgery (no bones). I felt that I was better with fine movements than using power tools. That’s one of the reasons I decided to operate on brains.
    In fact, the first time I ever used a drill, it was in medical school drilling through someone’s skull on my neurosurgery rotation. I got pretty good with that drill after a while. It was the only power tool I liked.
    I remember getting confident enough practicing on people’s skulls that I bought a drill at the hardware store to put up some shelves in my apartment for the first time.
    Okay…so all of this sounds a little messed up I know. But it’s true. The good news for me was that there was a little bit of a learning curve getting my hands wet but pretty soon, I became a pretty darn good surgeon.
    In hindsight, the fear and anxiety of not being good at surgery was silly. As it turned out, becoming a good surgeon was really no different than becoming good at anything else in life—it took practice.
    In the case of most surgical procedures, you sort of do the same maneuvers every case. After my neurosurgery stint (which I left because of the hours), I spent some time doing cosmetic surgery. I watched the masters do hundreds of operations.
    There was one guy I watched that was particularly interesting to me because his results were so good and so consistent. What I noticed when I watched him carefully was that he did everything the same every single time. In fact, I counted about 6 discreet maneuvers that he did for every patient and wrote them down.
    When I started doing my own cases, I did those six steps and, from the very first case, my results were outstanding. During my career I did several hundred facelifts and did them exactly the same way every time.
    I got faster, more precise, and there were fewer and fewer wasted movements. My patients thought I was an artist. But the truth was that I was more of a robot than an artist. I am the least artistic person I know.
    This experience of mastery was profound for me. I felt like I had discovered a larger secret in the process of being a good facelift surgeon. The secret was that you could master just about anything if you cracked the code and did it over and over again the same way every time. That’s all that mastery really is.
    My guest on this week’s Wealth Formula Podcast is special. At a relatively young age, she has become a master at her craft and has shown the same kind of consistency with her financial outcomes as I did at my peak with surgical outcomes.
    Her name is Janet LePage and she is computer scientist who has cracked the code to successful multifamily real estate investing. In this episode, we will learn how she did it.
    Buck
    P.S. Don’t forget to sign up for our upcoming Wealth Formula Investor Meetup in Scottsdale, AZ.
    51 min
  • 139: Ask Buck New Year’s Edition!
    You know it’s been a hell of a year in terms of market volatility right? Now, in cryptocurrency, we expect that. It is a speculative asset class with binary outcomes. That’s why we only invest money in money that we can lose. In 2018, we definitely lost it (who knows about 2019).
    But the equity markets are supposed to be where you put your retirement money! Whats up with the volatility? December has been the worst month in the stock market since 2008 and could very well be the worst December since 1932 during the Great Depression.
    Why? Because the fed raised rates by one quarter of one percent? Because there is a government shut down over a border wall? Why do these seemingly unrelated circumstances affect your publicly traded equities?
    The answer…your wealth in the stock market is not real. When people get nervous and there is a sell off in the market, your wealth vanishes. Investing in the stock market is not conservative as conventional financial wisdom has led you to believe. It gives you exposure to systemic risk that you cannot control.
    Now I know some of you skeptics out there will say yeah Buck the real estate market is not an uncorrelated asset either. That’s absolutely true but here is the difference.
    You see, the money I have tied up in real estate is real. How do I know that? Well, I can see, touch, and feel an apartment building. And people have to live somewhere so they keep paying if they need a roof over their head. People sell stocks so they can pay their rent.
    As for the value of the building. Maybe it will go down in value for a period of time but if I’m making money from the asset now, why do I even care? I’ll just cash flow for a few years and when the value goes back up, maybe I’ll sell (or maybe not).
    These are not new concepts for this show but worth repeating because I am sensing panic out there with stock market investors and I am getting a lot of questions about where to invest or where to hold cash.
    Rather than be foolish and give you financial advice, let me point out that my own strategy continues to be to buy moderately leveraged real estate with value add opportunities in high growth markets (Dallas, Houston, Phoenix, Atlanta). If you are an accredited investor and you want to know exactly what I’m up to, join investor club ASAP and you can decide if you want to do the same.
    As for where to keep cash, I’ll say it again. There is only one vehicle that I know that continued to provide solid positive compounding growth and liquidity through the Civil War, the Great Depression, and the Great Recession. It’s called Wealth Formula Banking and, in my opinion, this is the best risk adjusted long term investment ever.
    If you are tired of feeling queasy not knowing which way the market is turning, it may be time to really take a look at this option.
    I think we are in for some serious volatility in the next year. That said, I do not believe that we are headed for another 2008 right now. The biggest problem we have right now is that rates are normalizing (although mortgage rates remain low) and there is a tremendous amount of political uncertainty. The markets hate uncertainty.
    Sitting on cash in an almost certain inflationary environment may not be in your best interests either. That guarantees you lose money as inflation exceeds the nominal interest you are earning at the bank.
    Markets go up and down even though in good times we never seem to remember that. It doesn’t mean we freeze. It means we make decisions based on what is in front of us. In this week’s episode of Ask Buck, we touch on these topics and more.
    Start out the year with some Wealth Formula Wisdom. Don’t miss this episode.
    46 min
  • 138: Ask Buck Christmas Edition
    I’d like to give each and every one of my listeners a gift this year so I’m going to do that the only way I know how—to give you some unsolicited advice (not to be confused with financial advice). Take it or leave it but these concepts have served me well. So...let us begin!
    Invest in people, not deals. This is just as true whether you are investing on your own as owner operator or as a passive investor. It is easy to understand from the perspective of a passive investor. Once word gets around that you might invest in a private placement, you will get a lot of garbage thrown your way. My advice…if you don’t know who it’s coming from, delete it.  Proformas and glossy offering memorandums can be made to look whatever way you want them to look. You can make swamp land in Florida look good on paper. It’s like putting lipstick on a pig. Work with people that you know, like and trust.
    What if you are contemplating a new venture on your own or are thinking about buying your own apartment building? Same principal here…invest in people, not deals. In this case, you have to invest in your self. You have to take the time to learn and get the help you need from mentors and masterminds. If you are going into a dark cave for the first time, bring someone who’s been there before.
    Be careful on this one—lots of gurus out there who aren’t going to help you that much. They are too busy selling their programs to be true mentors. It’s better if you find a real person willing to take you under their wing who’s got some scar tissue. To master anything new, you have to learn from mistakes…but they don’t have to be your mistakes.
    Finally, remember to keep an open mind and try to learn from multiple sources. A mentor is great but should serve as a foundation for your on-going learning. Get perspectives from others. I have found that perfectly intelligent people can disagree on how things should be done and both or neither can be right at the same time.
    I have missed out on some big opportunities in the past few years because I kept listening to the same people crying wolf about the economy over and over.  I have found that when everyone thinks the same thing, it is usually time to second guess the assumptions that are being made.
    So…please keep listening to my podcast and become an active member of the Wealth Formula Community. But also listen to others who have a different perspective. Tell me when you think I am wrong. But if you do, back it up rather than quoting another podcaster or blogger.
    On my end, I will continue and try not to let myself get boxed into one kind of thinking and to continue to provide you with truly unique and useful content that isn’t just a replay of someone else’s podcast. I think we have just scratched the surface.
    Merry Christmas!
    1 hr
  • 137: Wealth Formula Banking: The Things We Never Talk About
    We talk about this stuff a lot and will continue to do so but if you have not checked out WealthFormulaBanking.com do so to get detail. I can honestly say that if you took no other action from Wealth Formula content other than to get familiar with these products, I would feel like I have done a service to you and your financial future.
    Today, we are going to talk about the not-so-obvious benefits of these kinds of products that guys like me don’t often think about because all we care about is creating wealth. In fact, there are many strategies that we these policies can be used for other than maximizing leverage and velocity.
    To talk about this, I’ve got the best in the business back on the show this week, Christian Allen and Rod Zabriskie.
    1 hr 24 min
  • 135: Is Real Estate as Good as Gold?
    Now, you know that I am a multifamily guy. I invest and sponsor syndications. For a variety of reasons, if you are an accredited investor with a full-time job, this might be the easiest way to invest in real estate.
    But…that’s my bias. There are others out there like my friend Dean Graziosi who was in my course, Your Roadmap to Real Wealth, that own thousands of houses.
    The important thing is that you should listen to as many opinions as you can—preferably from people who know more than you—and make your own educated investing decisions.
    In the single family home space, there are few people who know more than Marco Santarelli and he is my guest on this week’s Wealth Formula Podcast. 
    Make sure to tune in to this episode as he makes his case for single-family turn-key rentals homes.
    54 min
  • 134: Global Disintegration and Robots Stealing Your Job!
    somewhere along the line, bank tellers stopped dispensing cash and the passbook disappeared—but the bank tellers did not. I say this because that was a genuine fear that people had with the advent of the ATM. They thought the ATMs would steal human jobs.
    As it turned out, the ATMs ended up doing the simple work of dispensing cash and the tellers just focussed on the more complex stuff and everyone was happy. The moral of the story is that every time there is a new technology, it doesn’t mean the robots are going to steal our jobs. It just means that our jobs might look different. 
    This is particularly important to understand right now as we see artificial intelligence advancing at a rapid pace. What does a world with advanced AI and blockchain look like? Driverless cars? Equity markets without investment bankers? Who knows. But I am confident that we will continue to find things for us people to still do. It will just be different. Maybe I’m overly optimistic but I look back on human civilization and realize that we are incredibly good at adapting to our own new realities.
    In 1798 Thomas Malthus published An Essay on the Principle of Population. In short, his theory was that human populations were going to outgrow our food supply. From where he stood, that might have been the case but it didn’t take into account our technological advancements in agriculture that made it possible to feed an ever-expanding human population. Similarly, I’m hopeful that our ingenuity will bail us out of some of the other challenges we face today like sovereign debt and global climate change.
    Technological advancements since the advent of the internet are accelerating at a lightning pace. In the meantime, we face an increasingly insular world of nationalism and economic inequality that is more reminiscent of the early 20th century that ultimately culminated into the great wars. How all this ends up is anyone’s guess but one thing’s for sure. We live in interesting times (an old Chinese Curse).
    My guest on this week’s Wealth Formula Podcast is well versed in all of the issues that I have discussed here including macroeconomics and technology. He looks at the problems of today with knowledge of the past and a keen insight into our future. His name is Diego Zuluaga and this was one of my favorite conversations on Wealth Formula Podcast so make sure not to miss it!
    1 hr 10 min
  • 132: Investing in the Internet… 2.0
    Let’s say it’s the early nineties and you can either try to pick a single stock from a myriad of dotcom companies ranging from Amazon to pets.com or invest in an index tracking the the top ten biggest tech companies by market capitalization for the next 10-20 years. Which option gives you a better chance of making money? 
    Unless you are REALLY GOOD at picking stocks, the index obviously would give you a better chance of success. An index of the top ten tech companies during the rise of the internet would have included Amazon and Apple in their relatively early days and you would have done quite well.
    So, let’s fast forward to the current tech inflection point—blockchain and distributed ledger technology. Do you know which projects to pick? Do you even know how to buy this stuff? Well, what if we could just use our regular old US dollars to invest in the top ten crypto projects by market capitalization and just ride up that index without ANY technical skill required?
    Well, that’s exactly what Bitwise Investments allows you to do. If you want to invest in digital assets but find it too daunting to move forward, you will NOT want to miss this interview with Bitwise Investments founder and CEO, Hunter Horsely.
    1 hr
  • 130: Willpower Doesn’t Work with Ben Hardy
    You can’t will your way into financial stability. It takes a deep reflection on your situation and massive action.
    When you set yourself up for massive action, it’s a lot easier. For my cosmetic business, I wrote a resignation letter to my COO. She thought it was a joke until I literally told her to stop scheduling any more patients for me. I had to physically take myself out of that situation to get my desired outcome. It wasn’t going to happen if I kept doing what I was doing.
    My friend Benjamin Hardy said it best: Willpower Doesn’t Work. That is the title of his book and that is what we will be talking about on this week’s Wealth Formula Podcast.
    21 min
  • 129: Trust Fund Rats and Behaviorceuticals
    https://www/wealthformula.com
    One of my good buddies has a multimillion dollar tile company. Why? He didn’t dream of owning a tile company. He just worked for a guy with a tile company and thought he could make more money starting his own thing rather then working for someone else. He was right.
    Another friend worked for a Canadian company that bought energy in Canada wholesale and sold it retail to other countries. He learned the business and decided to do it on his own. He makes A LOT of money now.
    Then there is me. I worked for a cosmetic surgery company right after residency and realized that it wasn’t a very difficult business model to understand. Advertise big, lots of procedures, and profit. Think hair club but with facelifts. I figured I’d try something similar and it worked!
    In all of these examples, it was just a matter of experience. All three of us are entrepreneurs, we just happened to be exposed to different things. How much we all make from our businesses actually depends a lot more on the business model that we each copied than the execution. Makes me wish I worked in the energy business in Canada as a young man.
    Anyway, the moral of the story is that experiences matter. The more experiences you have, the greater exposure you have to all the different nooks and crannies that life has to offer…business or otherwise.
    So, putting this all in perspective, what is the take home message? Well, get out there and learn something new for one thing. Do some things you’ve never done.
    Also, let me tell you how this realization affects the way I see education and the way I guide my kids. They are little but this is what I’ll tell them someday.
    A broad academic education is important. You can never go wrong with an interdisciplinary perspective.
    Furthermore, after school, never look at your job as work. Look at it as paid education and quit when you have no more to gain intellectually. You don’t want to be one of those people who stays in the same job for 20 years and complains about it for 18.
    This advice is based on my own life experience and from the life experiences of others who I know. But it is also based in science. It is based on the way our brains learn and adapt and the more aware we are of these patterns, the more we can guide ourselves towards success.
    No one knows more on this topic then my guest on this week’s Wealth Formula Podcast, behavioral neurobiologist Dr. Kelly Lambert. Make sure to listen to this show. It will be well worth your time and your brain will thank you for it!
    That’s not to say that I am personally a permabull. Like most people who follow the economy, I do now expect a downturn of some kind. Even Fannie Mae Economist, Doug Duncan, thinks that’s going to happen. He’s as mainstream as it gets.
    But what does that downturn look like? Is it blood in the streets or is it a recession in the industrial sector of the economy that we learn about two months after the fact? After all, most downturns look nothing like 2008.
    So what is an investor to do? Well, I’ve said it before and I’ll say it again. Keep investing but be smart about it. Now is not the time to invest with a friend who’s trying his hat at the real estate game for the first time. Stick with high quality assets and, if you are passive investor, stick with high quality operators with good track records. Consider hedging with non-correlated investments like life settlements.
    Don’t over leverage and keep some liquidity on the sidelines—preferably through a Wealth Formula Banking strategy that will keep your money working for you while you wait. Hedge your position but don’t act like the sky is falling…yet.
    As I said, it is extremely difficult to predict the financial future but one private economic firm has done it with extraordinary accuracy since the 1940s during which time they have been right almost 95 percent of the time. They predicted the 2008 meltdown 3 years before it happened and they predicted all of the upside we ha
    51 min

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The Wealth Formula - by Buck Joffrey