Wealth Formula Podcast

As expected, the government roll out of the multi-trillion dollar stimulus program to save the economy has been sloppy and slow. People who need to tap into unemployment insurance can't get through on the phone. Businesses who need money can't get the money they applied for and, when they do, the terms are very unclear. Some businesses have given up. Rather than take a big loan from the government to their grave, they have decided to call it quits while behind. Meanwhile, the Dow Jones Industrial average showed a remarkable turn-around over the last couple weeks after dipping down below 19,000. That's great if you have money in the market but, quite frankly, I don't understand the rally. Most businesses are closed so how could their stock be worth more than it was two weeks ago? We still aren't clear of when this pandemic and all of its stay-at-home orders will end. Even when it does, that's really just the beginning. People aren't going on vacation or sports events or concerts until there is a vaccine. That's not going to happen for a while. When the economy "opens up", it will only be half-open and certainly not running on all gears. Thousands of small businesses will not survive this ordeal and that will leave many unemployed. I would not be shocked to see double digit unemployment going into the end of the year. From an economic standpoint, we are at the very beginning of the fallout. So why is that stock market going up again? I suspect most people who are buying into this market right now aren't small business owners or facing the prospect of losing a job. There is a fundamental disconnect between the markets and reality. For those of us who are small business owners or real asset investors, we have a little bit better perspective. If you have a small business and employees to pay, you may understand that there is a possibility that you may not recover from this event. If you own residential real estate right now, you get the idea of what your tenants are going through and how that is affecting your ability to collect rent. If you aren't well capitalized, you are freaking out. I hope you don't lose any property, but I can pretty much guarantee you that distressed assets will become common in the not-so-distant future. The earthquake just happened. The tsunami of financial fall-out has yet to arrive. To get a better perspective of what's going on the ground, this week's Wealth Formula Podcast features a conversation between another physician podcaster and me. Join us as we talk about not only the COVID-19 disease, but the real time economic impact both of us are seeing on our businesses and investments.

I have to admit, I did not think that this Coronavirus thing was going to hit us this hard. To be clear, I'm not just talking about how deadly this pandemic has turned out to be in terms of human life. A month ago, if you told me that just about every small business in America would be shut down, I'd have thought you were crazy. I guess I had become accustomed to hearing about scary diseases like the Chinese SARS epidemic in 2002 and Ebola. They sounded scary but distant—like someone else's problem. Not this time I guess. We are getting crushed! There is an old saying that you should never let a good crisis go to waste. This is a pretty damn good crisis so let's make the best of it! Situations like these often create opportunities for entrepreneurs and bargains for investors. For the motivated, here's your chance. On the hand, If you aren't feeling quite that ambitious, you can also work on your defensive game. Be mindful of your position in this stressed environment. Are you happy with your financial portfolio? Are you invested in the right asset classes to withstand a downturn in the economy? How are those operators you invested with doing? Are they giving you confidence or making you feel a little uneasy? For better or for worse, soon the tide will go out and we will discover that some big talkers were actually swimming naked. It ain't going to be pretty but once in a while you need a Darwinian event like this to shake things up and come out better on the other side. After all, chances are that this will not be the last black swan you encounter in your life. As you reflect on these questions, I suggest that you listen to this week's Wealth Formula Podcast interview with Doug Lodmell. This was a discussion on real estate asset protection that was recorded before the pandemic hit us. However, the contents of this interview are incredibly relevant to what's going on today. Think about the business owners who are becoming insolvent as we speak and the creditor issues they will be facing. Any real estate owned by those business owners will look like red meat to people trying to get paid on loans gone bad. Of course it's better to get this type of protection in place ahead of a crisis but sometimes it takes a good scare like this to actually put a plan in place. Anyway, make sure to listen to this interview with Doug—especially if you own any kind of real estate or are even a limited partner in a real estate syndication or fund. Listen HERE. P.S. Attached below is a copy of the white paper Doug talks about in this interview that outlines the different levels of asset protection you should consider.

Remember a month ago when this whole Corona-thing was sort of a theoretical issue? After all, we only had 15 cases reported in the whole country and no one had died. Sure, we were starting to see the news in China and Italy but they were so far away. Even the president said it would just disappear! But then every day things got substantially worse—exponentially worse. And now, even those who mocked the hysteria are now admitting that this is, indeed, a big deal. I won't pretend that I knew what was coming. I didn't have the perspective to see it and those who did, didn't make it clear to the rest of us. They were too busy selling their stocks! But it's here now and it's going to get worse—a lot worse. Thousands will die. Unemployment will be well over 20 percent. There will be suffering beyond the disease in the form of financial follow-out. But the good news is that this episode in history will eventually be a thing of the past. Eventually it will be a bad memory. We will move on with our lives as we should. BUT…we should not forget because, although history does not repeat itself, it does rhyme. There will be another pandemic eventually. It could be even worse than the current one. And we shouldn't be surprised when it happens. After all, even though most of us thought coronavirus was over-blown to a certain degree, there was plenty of evidence at the national security level that this kind of "virus X" was quite possible and was something for which we were unprepared. As a society, we knew it was possible and did nothing to protect ourselves. We can blame the government, but the government only reflects our own priorities. Unfortunately, our priorities don't seem to plan for much beyond today. This current pandemic worries me but I know it is finite. What worries me even more is all of the ticking time bombs that we know are out there, but are choosing to ignore the same way we ignored the risk of a pandemic. We are being short-sighted on multiple fronts. Some of these perceived time-bombs could be real and the consequences devastating. For example, we know that our power grid is vulnerable to cyberattack. If our grid went out tomorrow, it would mean more than the lights going out. It would mean amongst other things: hospitals being rendered non-functional, a shut-down of communication of all kind, and no more clean running water. People would die. It's a very scary scenario that national security has identified as a threat. But we do not have the appetite to spend on new infrastructure and defense now. Another case in point—climate change. I don't understand frankly why climate change opinions seem to be affected by party lines as they clearly are. I am an anomaly in that I am a fiscal conservative yet I am open to the idea that there is potentially serious hazard in ignoring climate change as a national security threat. It doesn't take a meteorologist to figure out that something funky is going on when thousand year storms start happening every couple of years. And, although I believe it is man-made in nature, you don't have to believe that to concede that there could be deadly consequences to us or our children if we choose to simply call it a hoax. Let me ask you this, would we be better off today if we as a country had taken Coronavirus more seriously two months ago? Even if coronavirus ended up being just another flu, would we have suffered by being overly-conservative with preparation and early lock-downs? Of course not. So why not look at climate change the same way? In my mind, if those of us who think climate change is a serious danger to the world are wrong, the worst case scenario is that we end up with cleaner air and water. Anyway, save yourself the time with hate-mail. I'm just providing some food for thought—call it civil discourse. Bottom line is, I hope that at the end of this national nightmare, we can start to look at where else our exposure is and start coming up with some plan b's that might be needed when a second passport does you no good. It is a time right now that I think we should all use for reflection on the macro-level as well as the micro-level. And of course, this is not a political show so we will keep it about money from here on out. I will say that there are plenty of lessons to be learned by this kind of financial stress test for all of us. The government is doing what it can to keep us on life-support until we get that cure or vaccine but we will all be challenged to varying degrees and it is a good time to assess the defense that you need to shore up for the next disaster. My friend Tom Wheelwright will be on this week's podcast to talk about all of this and more. Tom is the Michael Jordan of CPAs, a brilliant entrepreneur, and has literally saved me millions of dollars in taxes over the last several years. In fact, you may come away from this podcast realizing that you might have actually come out ahead financially because of the tax relief provided by this disaster! Listen HERE. P.S. Listen to the whole show because Tom has an incredible offer for our listeners!

Buck: Welcome back to the show everyone. Today I have chief marketing officer of ASR Alternative Tim Wright to speak with us a little bit about this asset class known as life settlements. Tim welcome back to the show. Tim: Well thank you it’s always a pleasure to be on your podcast thanks for having […]

A few days ago we had the worst single day loss in US stock market history. The next day we had the single best day seen by the Dow Jones Industrial average in 80 years. I have no idea what kind of volatility there will be between the time I write this email and when you actually read it but it's kind of ridiculous. Don't you think? This volatility is exactly why I have stayed away from stocks throughout my adult life. I just don't get it. How does a fiscal stimulus help the stock market if the entire country is, for all practical purposes, unemployed? The economy is frozen and there will be a deep recession. How long it lasts is unclear but stocks going up in value right now makes no sense at all. The word that best describes the economy right now is uncertain. As an investor, it's the worst feeling you can have. If you feel uncertain right now, remember what this feels like and make sure you feel better about your portfolio next time something like this happens—which it will. As I have made clear several times before, I hedge uncertainty through contractual agreements that I have with life insurance companies that have paid out consistently through the Great Depression, multiple World Wars, and bank failures. Cash-value life insurance policies like Wealth Formula Banking help me sleep well at night. We spent a lot of time on this concept last week and, if you are not sold on getting a policy yourself, that's fine. I just want you to understand why I think it's so valuable and make sure you really understand it. This week, I want to give you another way that you can get exposure to this kind of hyperstable asset. You see, you can also get exposure to life insurance company level stability by purchasing other people's life insurance policies. If you've never heard of this strategy, I'm not surprised. It's not something most retail investors know about. Meanwhile, Warren Buffet buys $600 million/year of these things and there's a half billion dollars worth of them on Bill Gates' balance sheet. Curious? If so, make sure to listen to this week's episode of Wealth Formula Podcast!

What we are experiencing right now is truly a black swan event. Even those who predicted a recession had no idea how badly the global economy could be crippled in just a few weeks. Hopefully it will be short-lived. But frankly, even a few months of people staying at home and not buying anything will have extraordinary repercussions. The fiscal and monetary tools we have to combat our situation are not designed for this kind of assault. Cutting interest rates and quantitative easing are meaningless if businesses are closed and no one is buying anything. Cutting payroll taxes doesn't help when no one is at work. Treasury Secretary Mnuchin suggested that if a strong fiscal stimulus is not taken soon, we could end up with 20 percent unemployment—comparable to Great Depression levels. Wouldn't it be nice not to have to worry about your retirement money right about now? How would that even be possible? Well, suppose there was a financial instrument that's been around and tested for 1400 years and used by some of the wealthiest families in the world for generations to create and preserve wealth. Suppose that product survived the test of the Great Depression and became the favorite financial instrument for those who lived through it because it paid positive interest every year while everything else around them crumbled. Wouldn't that sound appealing right about now? It gets better, this investment grows untaxed and its liquidity can be harnessed in any credit condition. In fact, it is a product that literally allows you to invest the same money in two places at the same time. In my opinion, this kind of product is the safest investment outside of US treasuries—safer than any corporate bond that I could buy and far more profitable. Simply put, I don't understand why it's not part of everyone's portfolio. I am talking about permanent cash value life insurance strategies. We call these strategies Wealth Formula Banking and Velocity Plus. If you do not know how these strategies work or what they can do for you, I HIGHLY suggest you listen to this week's podcast. I can honestly say that if you learned and implemented one of these strategies, and did nothing else that I talk about on this podcast or investor club, I would feel like I've done you and your family a great service. That may sound like an exaggeration but I use these tools myself and, with the way the market is right now, I couldn't be happier that I made that decision. So, do yourself a favor and listen to this podcast now! PS. Here is the information for the upcoming webinar mentioned in this podcast: Bunker Investing: Wealth Formula Banking and Velocity Plus Thursday, March 26th 5:30PM CST Register HERE

We live in a world where things can change fast! A couple of weeks ago, it seemed like this novel coronavirus was some exotic disease in China. Before you know it, it became a big enough problem in Italy to cause a national lockdown. Then last week, the NBA season in the United States was suspended. What's going to happen by the time I release this podcast? Who knows? I'm sure you are getting information from a lot of places on this coronavirus situation, but let me give you my perspective on this as a physician and also as an investor. Coronavirus is NOT the Spanish flu of 1918 that lowered US life expectancy by 10 years and killed off 2-3 percent of the planet's human population. Spanish flu paradoxically was particularly virulent to young healthy people with a strong immune system. You see, the way that virus killed people was by triggering an immune response. Young healthy people with strong immune systems had the most powerful immune responses and, therefore, were disproportionately dying from the infection. Covid-19 AKA novel coronavirus is different. In many respects, it is a smarter virus. You see, a virus that kills all of its hosts doesn't last for long. What makes this coronavirus so challenging for us is that, for most people (80 percent), the symptoms are quite mild or non-existent. That allows for this virus to spread like wild-fire. Most people who get it, don't know they have it. The kids in schools and universities come home with "colds" or with no symptoms at all. But when they go visit grandma, she ends up dying two weeks later. Frankly, without a vaccination, the lack of consistent presentation among those infected makes this virus extremely difficult to fight. In fact, the only real option we have is social distancing. That's why the NBA season was suspended. That's why universities and major companies are asking people to work from home. So, for the people who think we are going too far with this social distancing stuff, I disagree. But I also disagree with people who are creating hysteria by calling this the Spanish Flu. If you are under 60 and are relatively healthy, your chances of dying from coronavirus are very low. Nevertheless, it is the socially responsible thing for us to try and not to get infected and then pass the virus to someone else who might end up killing their neighbor. So…that's the public health part of this virus. There is obviously an economic impact of this virus as well. Just think about the money lost in travel and entertainment! I will admit that I didn't see some of the economic implications of this virus coming before, but I do now and it's going to be ugly. What drives the economy is people spending money. If people are staying home, they aren't spending. Lower interest rates are not going to help with that. Trump's plan for a payroll tax cut holiday won't do much other than to buy a day or two of stock market irrational exuberance that will die off just as quickly as the Fed's first emergency rate cut. In my humble opinion, we are likely already in a recession. The question is how deep this recession will be and how much damage it will do before things get better. Now here's the good news. Coronavirus will not kill off 2-3 percent of the world population. An effective anti-viral will likely be available within the next several months and a vaccination will almost certainly be streamlined and be widely available a year or so from now. In other words, the underlying problem that triggers this recession is self-limited. If you can, start looking at this situation as an investor's buying opportunity. Now is not the time to let fear overcome you. Be patient. There is a good chance there will be some opportunities to buy assets at a discount. Just remember Warren Buffet's quote to "be fearful when others are greedy and greedy when others are fearful". Soon, it will be time to get greedy! Now I don't know about you, but I'm trying to get as many opinions from economists as I can on what's happening in the global economy. For that reason, I did this interview with Richard Duncan two weeks ago. What strikes me is how quickly everything is moving and we have no idea what's going to happen two weeks from now. What do you think is going to happen? P.S. As a reminder, in the interest of social distancing, we have canceled our upcoming Wealth Formula event in Phoenix, AZ.

"People tend to overestimate what can be done in one year and to underestimate what can be done in five or ten years." That's a quote with unknown origin that I've heard a few times and one with which I cannot agree more. All you have to do is to look at my podcast to see that. It's been about four years now since I began Wealth Formula Podcast. The first several shows that I did had no listeners. Today, we get about 25,000 downloads per month. We also have a regulation D accredited investor group of about 1400 individuals. Collectively, our group has placed over $100 million in equity in the last 18 months! Our ability to raise capital has been incredibly powerful and allowed us to partner with some of the best operators in the country and to cherry pick opportunities! More important than that, we have created a truly unique community of really smart, successful individuals of like-mind. We invest together and play together. Just come to our next Wealth Formula event in Phoenix to see how hard we play! Sometimes people ask me how I built Wealth Formula. The answer is persistence. I have a message and I have a mission and I go to work every week. If you put your mind to something and plug away at it long enough, you have a good chance to succeed. The problem that most people have is that they stop trying too early. It's hard to see five downloads on your podcast dashboard and keep going just as it's hard to build a business from scratch. Success, though, comes from a series of small victories that accumulate over time. That's true whether it's a podcast, an exercise regimen, or learning a new language. The key is to stop chasing shiny objects, decide what you want and to aggressively follow the narrow path that will eventually get you there. Seeing what has happened with this podcast makes me believe in this concept more than ever. Take a minute and think about how this might apply to your life. After that, make sure to tune in to episode 200 of Wealth Formula Podcast!

* In case you are wondering—I didn't get a chance to finish episode 200 yet so we are going to call this one episode 199.5! One of the great things about Wealth Formula Network is having a community where people can share what they know including who to stay away from. For example, through our collective knowledge, our group learned pretty quickly last year when a high profile turn-key home provider appeared to have been either purposefully or by incompetence, getting people involved with a Ponzi scheme. Sometimes we figure this kind of stuff together the hard way. For example, in January of 2017, I got an email from one of our listeners/investors telling me about "The Income Store". The Income store was owned and marketed by a podcaster named Bill Courtwright who claimed that people could buy websites from him that he would manage for six figure investments. He promised returns of up to 20 percent forever. Knowing a little bit about internet marketing, the concept piqued my interest. I had done pretty well with a few on-line projects myself and know some people in the space a lot smarter than me that helped me along the way. It seemed like something worth looking into. To do some research, I asked my primary internet marketing guy and friend to look into it for me. He went on to the company website and did some research with some basic internet tools. Here's what he wrote back in January of 2017: "I took a look at all the sites on their 'brag sheet'. The sites do not get any real search traffic results—less than 50 visits maximum per month each. None are big powerful sites and are not found in google. They can't be profitable…I am not sure how they are making this cash flow…something is not right." Bottom line is that it was clear for anyone who knew what they were doing back in 2017 that something was fishy. Unfortunately, our listener had already invested $290K. I told him what we found but it was too late. Almost exactly three years later, I saw a headline in the Chicago Tribune, "SEC freezes assets of suburban owner of The Income Store, allegedly a $75 million Ponzi-like website investment scheme". I'm sure I don't need to say more than that to describe what had happened. This guy used the power of podcasting to create influence. He then used that influence to get people to trust him and give them their money. I have to tell you that I see this kind of shady stuff happening left and right in the podcast space—not necessarily Ponzi Schemes but stuff that just doesn't smell right and often turns out crooked. As a podcaster myself, I have to warn you that just because someone is behind a microphone or is a guest on someone's show does not automatically make them a person you can trust. That may seem obvious but tell that to the investors of "The Income Store". The appearance of influence can make people blind. Ronald Reagan once said, "Trust…but verify". Bill Courtwright was on the podcast circuit and he was aligning himself with known personalities and trustworthy brands. He was a very good marketer. But all you really had to do was a little due diligence to figure out, as my friend said, that "something is not right". But I guarantee you that none of those investors bothered to look at the traffic results of the websites he promoted or asked someone else with more internet savvy to do so. Beware the fraudcaster! Beware the fraudulent podcast guest. Not everyone does due diligence on all of their guests. Not everyone has rules on who can advertise on their show. Trust…but verify. This goes not only for investment opportunities, but also for a variety of other services. In fact, there is something out there right now that I think is going to be a real problem for a lot of people in short order. While I can't name the company itself or the name they've given to the program, I have invited my friend and asset protection attorney, Doug Lodmell to describe the limits of trusts and taxation which this scheme involves. Listen to this interview so that you don't fall into another influencer trap! P.S. Our April 24th -25th Wealth Formula Meetup in Phoenix is filling up quickly! Sign up now at WealthFormulaEvents.com