Wealth Formula Podcast

Americans have always enjoyed the advantage of geographic isolation from much of the Western World. It has allowed us, in many ways, to look at many of the world's conflicts from a relatively disinterested distance. Who knows if we would have gotten involved at all in World War 2 if not for the bombing of Pearl Harbor. Nevertheless, the implications of major conflicts like the one currently happening in Ukraine eventually find their way to our shores. And more often than not they do so most noticeably at the level of our pocketbooks. Make no mistake, the Russian invasion of Ukraine will affect you. Unless you drive a Tesla you're seeing it at the gas station now. But there are more subtle and long-term implications of this war that will continue to shape the global economy. To better understand how, this week's Wealth Formula Podcast episode features a conversation with an economist who was named one of the 100 most important public intellectuals in the world by Foreign Policy Magazine. Make sure to listen now and understand how Putin's war may affect you.

In June of 2008, I graduated from my surgical residency program, got married and discovered Robert Kiyosaki. 14 years later, I'm no longer a practicing surgeon nor am I married anymore. However, the impact of Robert's books defined the course of my life. It's really extraordinary when I think about how a single book that I stumbled upon in a dingy Mexican airport could have just profound implications for me. On the other hand, most of us can define a moment in time that changed it all. That could be meeting a person, going somewhere or, in my case, reading a book. These transitional experiences feel like being hit with lightning. I call my Kiyosaki transformation as taking the purple pill. Many of you have had similar experiences with his books. In this episode of Wealth Formula Podcast, I ask Robert Kiyosaki to talk about the defining experiences of his life that shaped his worldview and the course of his life. Listen HERE!

Distributed ledger technology is revolutionary and creates some problems for the old guard—specifically banks and the traditional financial markets. The young guns creating all of this technology are really shaking things up. But you can bet that the traditional guys who have been making millions of dollars off the old system aren't giving up easily. The old guard also has something else on their side—the financial regulatory system. You see, decentralized finance (AKA DeFi) is very appealing but it's not always terribly legal. Case in point, frequently individuals who own cryptocurrency are making swaps for other tokens on these platforms and no one knows about it. In fact, it is virtually impossible for an agency like the IRS to track these trades. And, many people have millions of dollars stashed in this underbelly of the decentralized economy. I wouldn't recommend living like that myself. Why? Well, I would just say that it's best not to bet against regulators and the US government in the long term. You risk going to jail. Nevertheless, DeFi and related technologies do offer so many advantages to consumers in the way of efficient transactions that are quick and inexpensive. In fact, I would argue that when technology this powerful comes down the pipe, it eventually prevails one way or another. But, practically speaking, how is that going to look? That's a good question. We really are in the early days of DeFi and distributed ledger technology in general. My guest on this week's Wealth Formula Podcast, Brian Hartzer, comes very much from the traditional financial system holding positions as a top executive at some of the largest banks in the world. Yet, he sees the disruption coming and believes he knows where technology will meet traditional finance and regulators straight on. It's a fascinating area to watch evolve as it is happening very quickly. Make sure you tune in to the show!

Disruptive technology always creates casualties. I still remember a few years ago walking in a city with my oldest daughter who was about five or six at the time. We passed an old phone booth and she asked, "Daddy what's that?". Think of all the technological dinosaurs that have been forgotten in your lifetime. Records and compact discs? Typewriters? The Yellow Pages? Technological innovation is so powerful that it frequently overwhelms even corporate interests. Kodak was not very successful in blocking the digital camera, was it? In fact, it paid the price for not innovating itself. Could that happen to the New York Stock exchange and the mighty brokers and custodians that profit from it? Could distributed ledger technology disrupt the equity markets and turn our financial institutions into dinosaurs? My guest on this week's episode of Wealth Formula Podcast thinks that some form of re-organization in the way cryptocurrency and equities are held and traded is inevitable and his company is at the forefront of that evolution. Listen HERE

If you were an alien from another planet visiting who got stuck on earth and had to figure out how to get by you would quickly realize that you would need some money. This would probably lead you to a job which would not be difficult given your extraordinary intelligence. In fact, it might land you a high-paying technical gig with Google or Facebook. You might enjoy the work at first but the long hours and stale routine might start getting on your nerves. You might realize that the only eventual way out of the rat race would be to figure out how to put all that extra money from your paycheck to work for you by investing it. Now here's the question. If you were an alien from outer space, would your immediate thought be to hire an investment advisor to invest your cash in a balanced portfolio of stocks bonds and mutual funds? Probably not. As a highly intelligent life form you would quickly realize that this would not be the most efficient way to grow your wealth. Unadulterated by conventional wisdom, your attention would likely target tax advantaged real estate and other sources of income. The point I'm making here is that it might not be a bad idea to question conventional wisdom once in a while. Unfortunately, conventional wisdom is often tainted by special interests or, sometimes, just plain wrong (ie. The world is not flat). Approaching personal finance, entrepreneurship and even the way you live your life with a fresh perspective every day without fear of violating societal norms is a very healthy and potentially lucrative way to live. Take it from a guy who left a high-paying surgical gig to become an entrepreneur. In fact, my guest on Wealth Formula Podcast this week believes that a fresh look at your surroundings might even turn you into a flaming entrepreneur. Listen to what he has to say in this week's Wealth Formula Podcast!

I still remember listening to the Peter Schiff podcast seven years ago when I lived in Chicago. I was at the tail end of my Austrian Economic phase and so I believed in everything Peter had to say. One day I was sitting there at my computer listening to him make fun of something called bitcoin which was making some waves at the time. The way he made it sound made bitcoin seem like a completely ridiculous concept. So, I didn't take it seriously. Even when I heard others speak of it favorably, I just ignored them as financially unsophisticated. By 2017 I figure out that I was the one who didn't have a clue. Now don't get me wrong, I think Peter Schiff is a very smart guy and I don't blame him for sticking to his guns on something he truly believes. Peter still thinks bitcoin is going to zero! The mistake made was mine. There was a buzz about this bitcoin thing that was selling for about $300 (now $37,000). I just didn't take the time to learn about it. In fact, if I had been more open to it, I would have noticed that a lot of very smart people were making calculated bets in this area. But I wasn't paying attention. That was a mistake. Now, I've made mistakes as an investor before and I will again. But I won't let a mistake go by without taking a lesson or two away from it. One of those lessons is simple: pay attention when people get excited about stuff and when there is a buzz about something new. Right now, that buzz is about non-fungible tokens (NFTs). This is an area related to distributed ledgers and cryptocurrency. Many are calling the NFT and metaverse technology the next horizon in cryptocurrency and it really is in its infancy. If you don't get it. You aren't alone. This is an unusual area that is somewhat difficult to understand for some of us. But that's the reason you should be paying attention. After all, for those of you now sold on bitcoin, there was a time when you didn't understand it either. There is real potential here to make money. I'm certainly no expert in the field so I found one who could explain what this world is all about on this week's episode of Wealth Formula Podcast. Listen HERE

People listening to the show for the first time often feel a little overwhelmed by the basic terminology and concepts that we use as the basis of our conversations. We throw words like bonus depreciation and cost segregation analysis around like everyone knows what we are talking about. The Ask Buck shows that we have a great place to build the framework for understanding the Wealth Formula alternative personal investing ethos. This week is no different as we continue to talk about depreciation, tax mitigation strategies, NFTs and more. Do me a favor though. If you haven't listened to last week's podcast, start with that one. This week's episode assumes some knowledge that we went into pretty deeply during last week's episode #300. Also, if you like these kinds of discussions, you might be interested in Wealth Formula Network—our private community. Go to WealthformulaRoadmap.com to sign up. In short, this page is where you go in order to sign up for our course. But the course just provides a foundation to maximize our discussions which happen over our Facebook page and over our biweekly live Zoom conference calls. If you want to get deeper into this personal finance stuff and your spouse and friends have no interest in it, this is the perfect outlet for you! In the meantime, listen to this week's episode of Ask Buck HERE.

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!

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!

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 Suzie 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