Wealth Formula by Buck Joffrey

This week’s episode of Wealth Formula Podcast is about emotional intelligence. Why would we talk about such things on a personal finance show? Well, let’s define emotional intelligence for a moment. We all have emotions. If you want to see emotions in their rawest form, look at a toddler. One minute you might have an angel and the next you might have a complete meltdown and a demon from hell. Adults are no different. Emotional intelligence is the ability to step away from those emotions and examine why you are having them. Toddlers don’t do that and only some adults really do. Why is emotional intelligence useful to have? Well, emotions can get us into trouble unchecked. We’ve all sent the text or email that we wish we hadn’t in the moment. We all have those moments that we wish we had kept our mouths shut. As Warren Buffet says, “ You can always tell someone to go to hell tomorrow.” Buffet also says, “Be fearful when others are greedy, and greedy when others are fearful.” Everyone knows that you should buy low and sell high, right? But when shit hits the fan, few are able to overcome emotions and do what they rationally know they should do. This week on Wealth Formula Podcast I talk to an expert in emotional intelligence who says that emotional intelligence can not only be measured, but also developed to optimize multiple facets in our lives. Maybe it can make you a better investor? Listen HERE Carolyn Stern is the President and CEO of EI Experience — an executive leadership development and emotional intelligence training firm. She is a certified Emotional Intelligence and Leadership Development Expert, professional speaker, and university professor. Carolyn’s emotional intelligence courses and modules have been adopted by top universities in North America. She has also provided comprehensive training programs to business leaders across the continent in highly regarded corporations encompassing industries such as technology, finance, manufacturing, advertising, education, healthcare, government, and foodservice. Her engaging, results-based approach has been synthesized here for the first time in a user-focused, self-coaching model that will motivate and inspire readers to apply the power of emotional intelligence to their own leadership and organizations. Carolyn lives and works in Vancouver, British Columbia. Shownotes: What is Emotional Intelligence? Is there a way to measure emotional intelligence? Building Emotional Intelligence? Emotional Intelligence and Financial Success Carolyn’s book The Emotionally Strong Leader

You’ve probably noticed that my emails have been pretty short the last few weeks. I’ve been in Europe so I’m letting the podcast speak for themselves for the most part. This week we go back to fundamentals. There’s a reason why real estate is the foundation of the Wealth Formula personal finance ethos. There is simply nothing comparable in terms of risk adjusted returns and tax benefits. To reinforce these concepts, this week‘s podcast features a conversation with a CPA specializing in real estate. This is a must listen podcast. Enjoy! Brandon was named 40 under 40 by CPA Practice Advisor in 2018. Brandon leverages his personal real estate investing and his Big 4 Accounting experience to offer unique insights to his clients. Brandon enjoys CrossFit and Kiteboarding when he’s not crunching numbers. Shownotes: What are the major primary tax benefits of investing in real estate? What are the rules to qualify for Real Estate Professional status? Tax Smart Real Estate Investors Podcast

When I think about all of what has happened to our economy over the past two decades, it’s quite astounding. National debt has gone up by about 5x. Interest rates hovered at nearly zero for multiple years and we went through multiple shocks to the system like the 2008 meltdown and Covid. Again—all in the last two decades! This week’s guest on Wealth Formula Podcast has seen a lot more than I have as he served in the Reagan administration at a time when Paul Volker used significant interest rate increases to bring down hyperinflation and he was deeply involved in the response to the Savings and Loans Crisis of the 1980s as well. Thomas Vartanian saw it all happen from the front row. His recent book, 200 Years of American Financial Panics: Crashes, Recessions, Depressions, and the Technology that Will Change it All captures the major themes of American Economic History. Tune into this week’s show as we find out what he thinks about the economy today and what lessons from the past we can apply to try to get ourselves out of the mess! Thomas P. Vartanian is a former regulator, legal adviser, academic and author who has worked in the financial services industry over six decades. He is currently the Executive Director of the Financial Technology & Cybersecurity Center. He previously was the Executive Director of the Program on Financial Regulation & Technology at George Mason University’s Scalia Law School, and before that, he chaired the Financial Institution’s practices at two international law firms, Dechert LLP and Fried Frank LLP, through four financial crises. Both as a regulator and private practitioner, he has advised parties in 30 of the 50 largest financial institution failures in American history, developing a deep understanding of the causes of financial collapses. He has been described by clients in Chambers as “one of the best financial services lawyers in America.” Mr. Vartanian served in the Reagan Administration as General Counsel of the Federal Home Loan Bank Board and the FSLIC, where he authorized the receivership, sale, or liquidation of hundreds of failed institutions in the S&L crisis, including the first national and cross-industry financial institution combinations in the country. Prior to that, he served in the Carter Administration in the Office of the Comptroller of the Currency as Special Assistant to the Chief Counsel. Mr. Vartanian is a futurist and expert in financial technology. He was Chairman of the American Bar Association’s Cyberspace Law Committee between 1998 and 2002, where he chaired an international task force of lawyers from twenty countries which issued a seminal report on the novel issues created at that time by doing business over the Internet. Since leaving government service in 1983, Mr. Vartanian has been approached by the Reagan, Bush, Obama, and Trump Administrations to head federal financial regulatory agencies, including being interviewed to become the first Vice Chair for Supervision of the Board of Governors of the Federal Reserve System. Rather than return to government service, since the 1980s, he has represented a variety of government entities, financial companies, and their investors, as well as informally advised several Presidential Administrations. Mr. Vartanian has authored more than four hundred articles and eight books. He is a frequent lecturer and media commentator on the financial services industry, having appeared on Bloomberg TV, CNN, Fox News, PBS and a variety of radio shows. He has taught banking and electronic commerce law at Georgetown Law School, George Washington Law School, and Boston University School of Law, and has been a guest lecturer at Harvard Law School. In 2008, Mr. Vartanian was named “Washingtonian of the Year” based on his use of music and sports to raise money for charities in the D.C. metropolitan area. As a musician, he appeared in the first production in the United States in 1970 of Joseph and the Amazing Technicolor Dreamcoat. His classic rock band, The Johnny Esquire Band, has helped raise approximately $5,000,000 for charities in the Washington D.C. area over the last twenty years. Mr. Vartanian founded and plays on the Washington All Stars, a senior baseball team that has raised $500,000 for Special Olympics since 1998. Shownotes: What kinds of similarities are there in our current economic environment that contribute to the higher inflation? How has Covid changed the economic functioning of the United States? Can we just print as much money as we want? 200 Years of American Financial Panics: Crashes, Recessions, Depressions, and the Technology that Will Change it All

There is a fine line between being a “quitter“ and a pragmatic individual navigating life. Quitting has a very negative connotation in our culture. It’s un-American and is associated with weakness and lack of grit. In reality however, quitting is often the best thing you can do and the sooner that you do it the better off you are. I’m a good example of a guy who has quit quite a few times and is much better off for it. For example, when I was in medical school, I was a hardcore student. They used to call people like me gunners. I was intense about my studies and got myself involved with lots of research projects and became the favorite student of the neurosurgery department. You see, at some point along the line I decided that I wanted to be a brain surgeon. I thought that the brain and the central nervous system were fascinating. In hindsight, however, I must admit that there were stronger drivers involved. I saw brain surgery as the top of the medical pecking order. Of course the idea of being a brain surgeon also appealed to me because of the social bragging rights that came along with it. After all, most people outside of medicine are pretty impressed when you tell them that you’re a brain surgeon. So, I did what I had to do to get into a neurosurgical residency. I graduated with honors for medical school and scored very high on the required board exam used to evaluate residents. I also published multiple book chapters and peer reviewed articles in neurosurgery before I finished medical school. Because of that drive, I got into one of the top neurosurgery programs in the country that produced some of the most famous people in the profession. My grand scheme was working out beautifully.  Then it happened. I started the program and, to my surprise, I wasn’t really enjoying myself. Sure, I liked walking around with a white coat that said neurosurgery on it and tried to use it to impress cute nurses. I did feel pretty macho I must say. But it was not enough to get over the fact that I hated the hours. Very early mornings and very late nights were the norm on non-call days. When on call, any emergency meant I was up all night operating. Bleeding brains can’t wait until the next morning. Then, I would have a full day of surgery the next day that I had to be alert and attentive for and try to learn something along the way. Boy…I really hated that. Curiously, I noticed that most of my fellow residents seem to get excited when the pager went off in the middle of the night. They got excited and filled with adrenaline when called to action—like Batman. Not me. When the pager went off in the middle of the night I would feel nothing but dread. It took me midway through my second year of neurosurgical residency to figure out that this was not going to work out. So I quit. At that point, I felt like I was in free fall. For years I had created this identity that I was living. It took thousands of hours to get there with lots of blood and sweat. Was it just a waste of time? Well, It probably was a waste of time but it could have been worse. I could have stuck it out for another five years and been miserable the rest of the way. My attending professors didn’t seem to have such a great life either so it wasn’t like there was light at the end of the tunnel. I ended up switching specialties and ended up in cosmetics (brains vs butts…what’s the difference?) And of course after a few years of that, quit medicine altogether. I guess it just wasn’t for me. Think of that for a moment. Four years of college, four years of medical school and seven years of postgraduate surgical training. And I just quit because I didn’t want to do it anymore. Liberating. The moral of the story is that when you figure out that something is not working for you, move on quickly. It seems simple enough right? But how many people do you know who complain about their jobs every single day and talk about doing different things but never do? Relationships are no different. You usually know within the first few weeks if there is long-term potential. However, rather than break it off quickly, people often drag out relationships for months or years trying to make it work and sometimes even get married! Well, as a divorced guy, I’m not much of an authority on relationships. However, The larger theme here is quit while you are behind. Don’t prolong the pain. There is plenty of gain to be had without enduring pain. My guest on this week‘s Wealth Formula Podcast is Steve Magness. He’s written a book that tries to explain why being tough and resilient is not always the right thing to do for an individual. So, If you feel like a lab rat on a treadmill you’ll definitely want to tune in to the show! Steve Magness is a world-renowned expert on performance. He is the author of the new book Do Hard Things: Why We Get Resilience Wrong and The Surprising Science of Real Toughness. He is the coauthor of Peak Performance. The Passion Paradox, and the author of The Science of Running. Collectively his books have sold more than a quarter-million copies in print, ebook, and audio formats. Magness has served as an executive coach to individuals in a variety of sectors. His work serves on applying the principles of which he writes. In addition he’s served as consultant on mental skills development for professional sports teams, including some of the top teams in the NBA. His writing has appeared in Outside, Runner’s World, Forbes, Sports Illustrated, Men’s Health, and a variety of other outlets. In addition, Steve’s expertise on elite sport and performance has been featured in The New Yorker, Wall Street Journal, The New York Times, The Guardian, Business Insider, and ESPN The Magazine. Steve received his undergraduate degree from the University of Houston and a graduate degree from George Mason University. He currently lives in Houston, Tx with his wife Hillary. Once upon a time, he ran a mile in 4:01 in high school, at the time the 6th fastest high school mile in US history. Shownotes: What is toughness? Toughness vs. resilience Steve’s book: Do Hard Things Why would anyone want to do something that seems daunting and hard?

One of the consequences of inflation is increasing wealth disparity. Think about it for a moment. CPI indices only measure a basket of goods and services. But you and I know as investors that inflation helps us out with our investment portfolios as well. Asset inflation is a real thing. If you don’t have the money to invest, you only get the downside of inflation. Prices for everyday stuff go up and it becomes harder and harder to get by. How bad can it get? Well we already have food insecurity in our own country…the richest most powerful country in the world. And there are pressures on food supplies globally now with draughts and the war in Ukraine, also known as the breadbasket of Europe. So are we heading to a worldwide food shortage? And if we are, what are the consequences to those at the top of the food chain? Maybe we don’t go hungry but hunger is a big driver of social unrest globally. The world is already a highly volatile place. My guest on Wealth Formula Podcast this week studies the food supply and sheds light on the true extent of the problem. Make sure to tune in! Marc Bellemare is a Distinguished McKnight University Professor, Distinguished University Teaching Professor, and Northrop Professor in the Department of Applied Economics at the University of Minnesota, where he also directs the Center for International Food and Agricultural Policy. He currently serves as one of four co-editors of the American Journal of Agricultural Economics. Prior to that, he served as one of two co-editors of Food Policy from 2015 to 2019. His research focuses on agricultural economics and applied econometrics. A few specific areas in which he has been conducting research include agricultural value chains, risk and uncertainty, and the consequences of high and volatile food prices. For his research, he has won the Agricultural and Applied Economics Association’s (AAEA) Outstanding Doctoral Dissertation Award in 2007, the AAEA’s Outstanding American Journal of Agricultural Economics Article award in 2011, and the AAEA’s Quality of Research Discovery awards in 2014. That same year, he also won the European Association of Agricultural Economists‘ Quality of Research Discovery Award. His work so far been featured in media outlets such as The Economist, the New York Times, National Public Radio, and the Wall Street Journal. For his teaching, Marc won the College of Food, Agricultural and Natural Resource Sciences Distinguished Teaching Award for Graduate Faculty in 2018. In 2022, he won the University of Minnesota’s Award for Outstanding Contribution to Graduate and Professional Education, and was inducted in the University of Minnesota’s Academy of Distinguished Teachers. From 2018 to 2021, Marc served on the Board of Directors of the AAEA. Shownotes: What drives a food crisis? Is there a food crisis right now? The Food Crisis and its effects on Americans from different socio-economic backgrounds Potential social unrest as a result of the food crisis

When was the happiest time of your life? I mean like inner-happy type happy? For me, it was definitely as a kid. My childhood was by no means all roses, but the little things in life brought me a ton of joy. I remember riding my bike to friends’ houses and knocking on their doors (that’s what we did in the 80s), getting together a group of friends for an impromptu baseball game or just riding around on our bikes and going places we shouldn’t have gone. School was fun during elementary school. It felt like a camp. You got to go see your friends everyday, play at recess and learn some cool stuff. No pressure…just a pure routine. I had my intellectual curiosities as well. When I wasn’t at school I would be closely studying the sports pages of the newspaper. I was a virtual encyclopedia on both the NHL and the NFL. It was pure joy for me to scour the library for books on famous athletes. By the time high school rolled around, a lot of the joy of academics was gone for me. I was good at school but definitely preferred to party and to play sports. And of course I discovered girls which brought a new level of interest for me to be at school. While I kept a steady state of party going in college, my academic work now became a job. When I decided to go to medical school, I realized I couldn’t afford to take art and acting classes for fear of them bringing my grade point average down. I had to stick to advanced biochemistry and molecular biology! I wasn’t doing any sports anymore and I had no real intellectual pursuits outside of my job as a premed student (and organic chemistry tutor). Medical school was really interesting but the specialization left little time for anything else in my life. As I track these different times in my life I can see the inner joy levels dropping precipitously at each step. Why? Well, my drops in inner happiness seem to be correlated to the times in my life when I transitioned from enjoying the present time as a kid to focussing primarily on the future as I progressed to college and medical school. I spent so much of my life sacrificing the present for things in the future. I gave up most of my 20s to medical school and surgical residency. Then I set my mind to create successful businesses and investments so that I could make all the money that I wanted to make. But now I’m kind of here. Sure I’m always happy to become richer but I have already surpassed anything I thought I would make. So now what? Of course I continue doing what got me here but I recently realized that something was really missing in my life.  Thinking back to what made me happy as a kid, I decided to see if I could reverse engineer myself back into having a child’s mindset. Here’s some major things that made me happy as a kid: Playing sports. I was a good athlete. I even have one of those elite power athlete genes! Being part of a community. I didn’t realize how hard it is to make close friends once you leave a school situation. Learning new stuff. For me, this is critical. I need intellectual stimulation. If I am not learning I feel like I am dying. Focusing on gratification today. Yes I mean gratification. We spend so much of our time planning for the future that we forget to have fun today. So yes…spend some of that money because you can’t take it with you. So here’s my plan. I’m going to get active in local sports leagues. I’m going to start volunteering in the community. I am going to read a book about something random every week. And I’m going to buy some fancy shit and not feel guilty. I’m not kidding. I’ll tell you how it goes! All of this stuff I’m talking about has been on my mind for a while. Then I heard about the work of Frank Keil, a researcher at Yale who has been studying the concept of Wonder in childhood and was intrigued by how these ideas could be applied to my own journey. Dr. Keil’s research on children and wonder is fascinating and might provide you some ideas on how to bring some youthful vigor back into your own life. Listen HERE for this week’s episode of Wealth Formula Podcast. Professor Frank C. Keil (Ph.D., University of Pennsylvania, 1977) is the director of the Cognition and Development lab. At the most general level he is interested in how we come to make sense of the world around us. Much of this research involves asking how intuitive explanations and understandings emerge in development and how they are related to notions of cause, mechanism and agency. These relations are linked to broader questions of what concepts are, how they change with development and increasing expertise and how they are structured in adults. One set of current studies is examining a level of explanatory insight that functions without knowledge of specific mechanisms and instead involves knowing what sorts of properties are causally potent in a domain and how they are likely to interact. These patterns vary considerably across large scale domains of phenomena such as living kinds vs. artifacts) and a partial understanding of these patterns emerges very early in development and guides learning of more detailed domain specific beliefs. Other studies are examining constraints on preferences for some explanations over others even when there is little or no specific knowledge of the phenomena under explanation. He is also asking how emerging knowledge of concrete mechanisms can link up frequency based information with abstract explanatory principles as well as cause distortions in judgment. A key part of developing such understandings also involves learning how knowledge is clustered and distributed in the minds of others and how best to access that knowledge. He is exploring dramatic developmental and individual differences in how the social distribution of knowledge is understood. Finally, there is a longstanding interest in links between conceptual and semantic development and how the emergence of language interacts with conceptual structure.

There is a major distinction between economists and investors. While most economists classify themselves with schools of thought such as Keynesian or Austrian, successful investors cannot afford to do so. I just spent a significant amount of time reviewing the work of Saifedean Ammous, the author of The Bitcoin Standard which has really become the bible for serious bitcoiners of the world. Ammous is an academic, trained at Columbia. I highly recommend you read his work. He’s very smart and when you listen to him, he just makes sense. The primary theme in his work is that Keynesian Economics is pretty much responsible for all evils of the world. I’m only slightly exaggerating. Ammous would say that pretty much every war since World War 1 could be blamed on Keynesian Economics. Without getting into too much detail, Keynesian economics refers to the idea that demand drives supply and the key to a healthy economy is to spend or invest more than you save. Keynesian economics is the reason governments borrow money and spend it. One of our biggest problems today is inflation which is, to some degree, required in the Keynesian system. Ultimately what leads to Ammous to consider a bitcoin standard the best economic system is that bitcoin is deflationary allowing people to actually store value over time in a meaningful way and it is out of the control of a central authority—ie a government with a gun to your head. Very interesting stuff. But how do we use this information practically? Hardcore bitcoiners will tell you to put all your money into bitcoin—get it out of fiat.  If things work out the way Ammous and the rest of the hardline bitcoiners believe, that would be a very good move. But how do we know it’s going to happen. Just because something makes sense doesn’t mean it will ever be reality. The reality now is that governments rely on the Keynysian system. Therefore, it’s not going anywhere anytime soon. And while bitcoiners often prophesize of some macroeconomic apocalyptic event leading to the bitcoin standard, I personally, would not count on it. Don’t get me wrong. I do see bitcoin as a major player in the world economy in the coming years. It will take some time but I do believe it will be digital gold. Even over the next five years, I believe bitcoin will be worth $250K and that will just be the beginning. So…yes. I am stacking bitcoin. But I’m still 85 percent real estate because that’s what I KNOW will be successful over time. You and I are investors. We may have our own belief systems and wish things were a certain way. But the playing field and the rules are written by governments, not ideological economists. So we have to navigate the personal finance world on what is, not what should be. What we do know right now is that inflation is real and we need to figure out how to make our investments exceed inflation.  The money supply has grown an average of 14% every year for at least 60 years now. That’s why inflation is inevitable.  The best thing that investors can do is to invest in inflation-hedged assets like real estate. Although inflation does not directly include asset prices in its calculation, there is no doubt that owning assets is the way to keep up with it. What else can you do? As real estate investors, we work with a lot of debt. Inflation erodes debt and punishes savers. As long as we are prudent with our debt, the math is clear. Debtors are rewarded in inflationary environments—keep your leverage intact and let that debt erode as the governments print money. Finally, we need to figure out how to maximize our profits. If inflation is running at 7% per year you need to make more than that just to keep up. And remember, this is after taxes. That brings me to tax mitigation. One of the most powerful tools to maximize your investment dollar is tax-efficient investing. That’s why tax mitigation is such a major theme of Wealth Formula. To maximize your profits you either make more money or pay less of it in taxes. Legally paying less taxes is easier and much quicker than making more money in most cases. From personal experience I can tell you that the investment of time and money into adequate tax planning is one of the most profitable decisions you can make. What I have learned and implemented from my guest on this week’s Wealth Formula Podcast, Tom Wheelwright, is pure gold. Make sure to tune into this week’s show and catch up with Tom. I guarantee you will learn something and that the return on investment will be infinite! Tom Wheelwright, CPA is the visionary and best selling author behind multiple companies that specialize in wealth and tax strategy. Tom is also a leading expert and published author on partnerships and corporation tax strategies, a well-known platform speaker and a wealth education innovator. Tom is a regular commentator in the field of taxes and contributes regularly in major professional journals and online resources. Tom’s work has been featured in hundreds of media, including Forbes, The Huffington Post, Accounting Today, CFO Magazine, ABC News Radio and AZTV Morning News, along with writing columns for Entrepreneur Magazine and Inman News. Snippets: An update on what we need to know about the tax world right now. How does the government play the tax game? How can you buy a Ferrari with government money? Tom’s new book The Win-Win Wealth Strategy

Big changes in the world seem to sneak up on you. One day you reflect on the way things used to be and wonder how the heck we got here. Anyone who has kids knows what I mean. My 13-year-old daughter is tall and beautiful and writes songs. I can remember the day she was born. How did that happen? I see her every day but I don’t see the changes happening in real-time. Technology does this kind of thing to us as well. I remember a time when there were no cell phones. But in a blink of an eye, traditional landlines became extinct. Have you seen a phone booth lately? Speaking of phones, I remember receiving my first text message during surgical residency and having no clue what was going on. Now I text more than I talk to people on the phone. Ok…you get the idea. Now what if you actually noticed these happening under your own nose in real-time. On the tech side, that would probably make you a wealthy investor. If you recognized the Amazon phenomenon 15 years ago while it was developing, you would have made a ton of money. If you missed it, welcome to the club. I, for one, wasn’t paying much attention. And to be perfectly honest, I didn’t have much money to invest back then anyway. So what are the things that are going to become part of the fabric of our society in the next 15- 20 years? I can think of a few things but nothing so obvious and specific as the growth of bitcoin and its ecosystem.  Right now we are seeing countries adopt it as legal tender. How crazy is that? I suspect that’s just the tip of the iceberg. Samson Mow is one of those guys who saw bitcoin for what it is years before most. He is a true visionary in the bitcoin arena and he’s also a visionary in the gaming industry.  In this episode of Wealth Formula Podcast, Samson and his COO at Pixelmatic, Chris Wood, discuss what’s going on with bitcoin today and the latest on their latest gaming venture—Infinite Fleet. You might even want to get involved yourself! Make sure to tune in! Samson Mow is currently the CEO of Pixelmatic, the development studio behind Infinite Fleet, as well as the CEO of JAN3, a new Bitcoin technology company with a mission to accelerate hyperbitcoinization. Samson is known for his work on El Salvador’s Bitcoin strategy, and nation-state Bitcoin adoption in general. Samson was previously the CSO at Blockstream, a leading provider of Bitcoin infrastructure. Before joining Blockstream, Samson was the COO of BTCC, one of the largest bitcoin exchanges and mining pools in the world. At BTCC, Samson oversaw the day-to-day operations of the company and directly managed the exchange and mining pool business units. Chris is originally from Blackpool, U.K. and has been living and working in Shanghai, and Jiangsu since 2011. Chris is a passionate gamer, storyteller, and energetic operations professional with a decade of leadership and management experience in the video game and education industries. He joined Pixelmatic in 2016 as a project manager to lead the production of Infinite Fleet. Chris has worked in various roles, including sales, marketing, business administration, franchise management, project management, and more. Shownotes: Are the countries that are interested in Bitcoin right now primarily those that have some issues of instability with their own currency? What is Infinite Fleet? How do investors make money on Infinite Fleet? The team behind Infinite Fleet.

What makes a great investor? Genetics? Personality type? Luck? Probably all of the above. But one thing I’ve noticed is that all the best investors in the world are very curious people and they tend to read a lot. Apparently Warren Buffett was reading between 800 and 1000 pages per day in the early days of Berkshire Hathaway. He probably learned a thing or two along the way. Even now, approaching his ninth decade, 80% of his day is reportedly spent reading. Bill Gates apparently clocks in at about a book per week as well. So maybe there is something to this reading thing? Neither one of these guys focuses just on personal finance either. They are learning all sorts of things about the world and about ideas. On a much smaller level, I believe that my broad background as a student of history, a medical doctor, and a macroeconomic theory enthusiast, have all played a role in my ability to think about things from a larger perspective than most. Just take for example the current inflationary environment. Most of us are probably not old enough to necessarily have experienced what it was like in the early 1980s. But understanding the similarities and differences between what happened then and what is happening now certainly provides perspective in an otherwise unpredictable world. History may not repeat itself, but it certainly rhymes. Furthermore, history is not the only thing that can teach you about the world. I take lessons from my days as a surgeon and understanding and processing the world on a day-to-day basis. The more you learn about STUFF, the larger arsenal you will have to confront the problems and challenges of life both professionally and personally. I truly believe that. My guest on this week’s Wealth Formula Podcast believes it too. Aside from being a recognized value investor, he is a true man of letters. Vitaliy Katsenelson is a great example of a great thinker and how a great thinker can often translate to a great investor. Make sure to tune into the show! Vitaliy Katsenelson was born in Murmansk, Russia, and immigrated to the United States with his family in 1991. After joining Denver-based value investment firm IMA in 1997, Vitaliy became Chief Investment Officer in 2007, and CEO in 2012. Vitaliy has written two books on investing and is an award-winning writer. Known for his uncommon common sense, Forbes Magazine called him “The New Benjamin Graham.” He’s written for publications including Financial Times, Barron’s, Institutional Investor and Foreign Policy. Vitaliy lives in Denver with his wife and three kids, where he loves to read, listen to classical music, play chess, and write about life, investing, and music. Soul in the Game is his third book, and first non-investing book. Shownotes: What exactly is Stoicism? Stoicism reduces the volatility of the negative emotions The ongoing conflict between Russia and Ukraine. Soul in the Game: The Art of a Meaningful Life Hardcover https://contrarianedge.com/ https://soulinthegame.net/ https://investor.fm/

Should you be investing in real estate now? After all, we have double digit inflation and rising interest rates. Well, let’s start with an even more basic question. Should you be investing in anything right now? What is the alternative? The alternative is to sit on cash while inflation erodes the value of your money by double digits. Would you invest in something today that would guarantee you a loss of 8-12 percent of your money year over year? I’m guessing the answer is no. But that is exactly what you are doing if you are sitting on cash. Inflation punishes people who do not invest their money. So…I would argue that the answer to whether or not you should invest is YES. But what about real estate? I keep hearing people concerned about rising interest rates. But here is where a little bit of macroeconomic perspective is useful. Interest rates are going up in order to curtail inflation. Right now, inflation is far outpacing the rise of interest rates which are actually below 2018 levels. For real estate investors, that’s very good news. Why? What is inflation? It’s rising prices right? Guess what? Rents are part of that equation. In other words, rates will go up only as long as rents continue to go up as well. That is why real estate is considered a hedge against inflation. As you know, our investor club focuses on multifamily real estate. I would argue that in times of higher inflation, we are in exactly the right place to deploy capital. First of all, we are in the right geographic places in terms of where we invest. We are in high population growth markets. People have to live somewhere and construction is lagging way behind for a variety of reasons including supply chain disruption. We are also in the most desirable real estate class in terms of positioning for inflation. Our leases only last a year. Imagine owning commercial properties with 10 year leases escalating at 2-3 percent per year while inflation rages at 11 percent! In our portfolio, we have routinely raised rents greater than 20-30 percent per year because of not only inflation but because of value add programs. Right now, lending issues have slowed transactions of large multifamily assets, but the reality on the ground is that there is more demand than ever for housing and we are raising rents year over year way above inflation numbers. And remember, we have debt on every one of these properties. What does that mean? Think about it. Inflation erodes debt as well. There may not be as many opportunities to buy this year because sellers who don’t need to sell may not do so. However, The opportunities that will come up have the potential to be very opportunistic and profitable. Times like these are when people make the most money. No one knows this market better than Western Wealth Capital CEO Janet LePage. Do yourself a favor. Avoid the swirl and start thinking about the fundamentals. In this week’s Wealth Formula Podcast, Janet will help you do exactly that. Janet LePage is the Co-Founder & CEO of Western Wealth Capital. For the past decade, Janet has been focused on creating wealth through well-selected real estate.  She has grown her precise business strategy from more than 50 residential transactions in Arizona to the purchase of 110+ multifamily buildings comprised of over 27,000 rental units. Under Janet’s leadership, Western Wealth Capital has grown to over 400 employees and successfully completed over $4.6 billion in real estate transactions. In 2019, Janet was recognized in Canada’s Top 40 Under 40 for Business and 2019 RBC Canadian Female Entrepreneur of the Year. Janet was also a bronze winner of the International Stevie Awards for Women in Business and awarded the REIN’s Multifamily Investor of the Year. In 2017, Janet was named Entrepreneur of the Year (Real Estate/Construction/Pacific region) by Ernst & Young. In 2016, Janet was named one of Business in Vancouver’s Forty Under 40 and was awarded the Veuve Clicquot Canadian New Generation Award which recognizes young female entrepreneurs. Janet holds a Bachelor of Applied Science in Computer Science and Business Administration (Simon Fraser University) and a Project Management Professional designation. Janet is co-author of ‘Real Estate Action 2.0’, released in 2016 by Jurock Publishing Ltd. Shownotes: What’s different about Western Wealth Capital? What’s going on with the markets right now and how does Western Wealth Capital plan to navigate it? The real estate inventory shortage What’s next for Western Wealth Capital?