Wealth Formula by Buck Joffrey

Nothing saddens me more than to see my fellow physicians and other highly trained professionals who spend their youth studying hard for the promise of a fulfilling career that will take care of them financially only to realize that they have been sold a false bill of goods. Physicians in particular have gotten really screwed. The golden age for physician reimbursement was in the 1980s and 1990s. These were the days where it might have been “worth it“ to sacrifice the best decades of your life to medical school and residency—particularly for surgeons. Not anymore. Physician reimbursement on many major surgical procedures has decreased as much as 90 percent over the last two decades while liability and patient expectations are up. Now, I do understand that many of my surgical friends love what they do and never get burnt out like I did. They continue to practice and some even manage to do better than average through ancillary income. But the concept of the rich surgeon is now largely a myth. I have had innumerable conversations with physicians and surgeons alike that are worried about retirement. How can a person making 300-500k per year worry about retirement? Well, remember that most surgeons do not finish residency training until their early 30s.  Residency income is on par with minimum wage when hours are taken into account. So, as a surgeon, you finish training often with hundreds of thousands of dollars of debt and with 20-25 years of career left in you. You have to make up for lost time. I use the example of surgeons because I am one but the story I’m telling relates to anyone who has spent a significant portion of their life “getting there” and who realizes that the amount of time to reap rewards of those educational investments is limited. I do think that it is possible to get on track and feel comfortable about retirement but it’s not through the traditional investing paradigm. It’s through the Wealth Formula. As we have shown through investor club for years now, extraordinary returns in short periods utilizing rapid redeployment and leverage is possible. And I still deploy 85-90 percent of my own investable capital per year in real estate. However, I recently discovered a newly designed insurance product that I am eager to share with you. As you know, despite misinformation from less sophisticated sources, the wealthiest people in the world continue to utilize life insurance retirement plans (LIRPs). I do as well. We have previously shown the benefits of Wealth Formula Banking and Velocity Plus. On this week’s Wealth Formula Podcast we will discuss the most powerful LIRP I have ever seen. If you’re 42 years old, an investment of $100k per year for the next 10 years could result in almost $44 million dollars of income until the age of 90 if you retire at 52 AND allow you to leave an additional $31 million in death benefit. This is totally real and something you should know about. And to be honest, the example I gave here is the least exciting example for me personally. The ability to create tremendous amounts of income and/or legacy with relatively modest investments now is something I have never seen with something this “safe” Please make sure to tune in to this week’s Wealth Formula Podcast. This might be something that you might want to consider. Christian joined the financial services industry in 2004. Over the course of his career to date, he has developed a broad-based knowledge and experience set. He began as a traditional advisor, working with local clients in his home state. In that context, he began a movement of successfully partnering with other professionals, including accountants and attorneys, to assist clients in implementing sound financial strategies. He spent more than five years in management with 2 regional planning firms, during which time he assisted new and seasoned professionals in creating efficient systems and methods to build meaningful practices. Over the last several years, he has expanded to working across the country, teaching financial principles, and working with clients across a broad spectrum, including wealth accumulation, retirement distribution planning, as well as innovative, advanced planning strategies for both high-income and high-net-worth individuals and businesses. He’s a member of AALU, and holds the designations of Accredited Asset Management SpecialistSM and Accredited Wealth Management AdvisorSM Christian is married and has two children, and is an avid sports fan. Rod has been in financial services since 2009. Prior to going into business for himself, he worked in marketing and finance with several small businesses. He had the opportunity to purchase an existing furniture business in 2007, just prior to the Great Recession. The experience of struggling to stay afloat amid difficult economic conditions inspires Rod every day in his efforts to educate and assist his clients in implementing sound financial strategies. He strongly advocates for establishing a firm foundation, utilizing proven strategies and financial tools to create a strong base upon which we can each build our financial house. In addition to focusing on Wealth Formula Banking and Velocity Plus, he has expertise in retirement income planning. Rod has a bachelor’s degree in Marketing Communications, and an MBA with an emphasis in Entrepreneurship. He and his wife Jodi are the proud parents of 7 wonderful children. As a family they thrive on spending time exploring nature, playing games and doing projects together. He enjoys sports, music and reading. Snippets: Key benefits of The Wealth Accelerator Premium Finance What is Arbitrage? Why get The Wealth Accelerator?

No matter how open-minded you think you are, you are always going to approach things with a certain bias. And it only takes being completely wrong about something that you would have bet your life on to realize that. My perspective on Covid-19 in the early days is a good example. Now I know there seem to be some who still don’t think it was a big deal. However, at least old guard Covid and Delta were pretty dangerous and a lot of people died. Others, like me, got very sick and took a long time to fully recover. Early on, when reports started coming out of China, the data didn’t impress me. In hindsight, the data wasn’t accurate. However, the more powerful force in my mind negating the seriousness of Covid was my bias that something like that could not happen in our country. I certainly was aware of SARS and Ebola outbreaks overseas but my mind could not process a pandemic in the United States. I was wrong. And when you are wrong on such a serious thing it makes you realize your own biases and perspective very well. As an investor, this concept of trying to recognize your Blindspots is extraordinarily important. For example, remember that most digital assets i.e. cryptocurrency investments are still highly speculative and involve asymmetric risk. Aside from perhaps bitcoin, the risk profile for cryptocurrency is extremely high even if you believe in the individual projects and the team involved. Sometimes, if people around you are echoing the same positive sentiments, it can sometimes artificially blind us to the actual risk involved. A great example of that recently involves the cryptocurrency, Luna. It seemed like a great project with considerable upside but still had an asymmetric risk profile. And, as these kinds of investments can lead to tremendous upside, they can often go to zero which is exactly what happened to Luna. Biases based on perspective are around us everywhere. The reason I mention them now is because of my conversation with this week’s guest on Wealth Formula Podcast, James Fok. James is an expert on China and its relations with the United States and the financial markets. His view on China’s motives whether it comes to digital currency or the war in Ukraine are quite different from what I had expected. Reflecting on this interview, I realized it was just another example of how perspective can really influence the way you view the world. James is an English intellectual who lives in Hong Kong. I am an American who sees China as an adversary akin to the former Soviet Union. Tune in to this conversation. You’ll see what I mean. James Fok is a veteran financial and strategic advisor to corporations and governments. He served as a senior executive at Hong Kong Exchanges and Clearing (HKEX) from 2012 until 2021, during a period of rapid internationalisation in China’s capital markets. While there, he played a major role in a number of landmark financial markets initiatives, including the launch of the Shanghai-Hong Kong Stock Connect programme (2014), Bond Connect (2017) and the Hong Kong market’s Listing Reforms (2018). Prior to HKEX, Fok worked as an investment banker in both Europe and Asia, specialising in the financial services sector. Fok has written and spoken extensively about market structure issues and the intersection between geopolitics and international finance. He serves or has served on a number of financial industry bodies, including Ireland for Finance’s Industry Advisory Committee (2021-), the Executive Board of the International Securities Services Association (2018-21), and the Financial Services Advisory Committee of the Hong Kong Trade and Development Council (2014-21). He is also a member of the Advisory Board of Hex Trust (2021-). Fok holds a BA (Hons) from the School of Oriental and African Studies of the University of London. He lives in Hong Kong with his wife and two sons. Shownotes: “Financial Cold War” How is the dollar at the centerpiece of this financial cold war between China and the US? How will technology influence the balance of power in the future? China’s perspective on digital currencies

When times get tough, it is always easier to have a scapegoat. After all, it is easier to blame an enemy than an unfortunate circumstance. The enemy can be punished and held responsible. Circumstances cannot. The most extreme example of this in modern history is the vilification of Jews during World War 2. Reparations for World War 1 left Germany in a world of economic hurt. Hitler demonized Jews as the root of the problem as many of them were successful professionals and business people.  As wealth disparities continue throughout developed nations, we are seeing a more subtle version of demagoguery playing out in real time in the form of nationalism. Again, it is easier to blame someone or a group of people for problems than it is to accept a circumstance that cannot be punished. This blame game is human nature. It’s a common theme throughout history and in everyday life. It allows us to feel in control when we are often not. Is that what’s behind all of the socialist rhetoric out there these days? As a child in the 1980s during the Reagan era it seemed like the wealthy were aspirational figures. Socialist voices blaming the rich for all that is wrong with the world were in the minority. Now, you can’t turn on the television without hearing about how horrible and greedy the rich are and how they don’t pay their fair share of taxes.  Although few politicians and public figures would come to the rescue of millionaires and billionaires in a moral argument, the truth does matter. My guest on Wealth Formula Podcast this week has done a deep dive on the subject of whether or not the rich are an asset or a liability to society. Tune in and find out what he discovered! Derek Bullen is Founder and CEO of S.i. Systems, one of the largest professional services companies in Canada, with thousands of information technology consultants working on projects for blue-chip corporations and government agencies across Canada. His new book is In Defence of Wealth: A Modest Rebuttal to the Charge the Rich Are Bad for Society (Barlow Books, 2022). Shownotes: Why is nobody interested in moderate TV? Do wealthy people have a responsibility to address the wealth disparity? People often say they want the rich to pay their fair share. But what is fair? In Defence of Wealth: A Modest Rebuttal to the Charge the Rich Are Bad for Society

I don’t know about you but sometimes I have so many different things cycling through my brain at the same time but it’s hard to keep track of any one of them. I’m not talking about just work or personal finance related issues. I’m also talking about trying to keep my kids’ schedules straight. I’ve got three young daughters with a lot of friends who have birthdays seemingly every weekend. Then there are school events and conferences, pick up and drop off and after school sports! Thank God only one of them is particularly athletic! Throw in a dental appointment and a haircut, and maybe a work event, and now you’ve got a real monkey mind on your hands. I say this…but I also know that, compared to a lot of people, I’ve got it pretty darn good. I make plenty of money and can hire plenty of help and my kids are really well behaved. The issues that I am talking about aren’t new to society. They are simply a product of being an adult and having responsibilities. That said, it’s not a bad idea once in a while to take a step back and focus on our own mental health. So in this week’s Wealth Formula podcast, that’s exactly what we will do. We will talk about the monkey mind and what you might be able to do if you suffer from it. Listen HERE! Jean-Francois (J.F.) Benoist has been counseling people struggling with addiction, mental health, and relationship issues for over twenty years. He co-founded The Exclusive Addiction Treatment Center, a non-12-step residential addiction treatment center, with his wife, Joyce, in 2011. He is the creator of the therapeutic methodology Experiential Engagement Therapy (EET), which focuses on addressing a person’s underlying core beliefs. He is well-known for his authentic, experiential techniques, which maximize long-term change. Benoist is a Certified Substance Abuse Counselor (CSAC) and Certified Option Process Mentor/Counselor. He is an internationally certified leader in The Mankind Project, a nonprofit organization dedicated to promoting men’s personal growth. He began his studies in human development and empowerment with Robert Hargrove and Relationships Inc. in 1980 and has been deeply involved in facilitating change in others ever since. Shownotes: The fear of financial success How does one overcome the fear of success? How does one maintain a healthy mindset? Addicted to the Monkey Mind: Change the Programming That Sabotages Your Life

The hardest part about understanding economics is terminology. In reality, economics really just comes down to understanding human behavior based on incentives. Let’s take for example the Cobra Effect. This is a term coined by economist Horst Siebert to describe a time in India under British rule when the local governor was trying to figure out how to deal with an apparent uptick of venomous snakes in Delhi. The governor decided to implement a bounty system. People were paid handsomely for each and every cobra head that they could produce. The solution worked very well at the beginning and there was a significant drop in the number of snakes in the area. However, over time the problem returned with a vengeance. Even though significant dead snakes were being produced and awarded with cash, the problem did not go away and even seemed worse.  What do you think happened? Well, what if you were a poor Indian person in Delhi who started making good money killing snakes and then realized that there were less and less of them around to cash in on? What would you do? Well, you’d figure out a way to find more snakes. And, the easiest way to do that would be to simply to start a snake farm yourself. That’s what happened and that is what is referred to as the Cobra Effect. This is a classic example of thinking through the incentives that drive people to come up with some possible outcomes resulting from various situations and policies. That is essentially what economics is. However, like many fields, economics is hindered by a lot of technical Jargon. It’s what makes academics feel smart and what helps members of the Federal Reserve keep you out of the loop of what’s really going on in the world. What do you think their incentive for confusing you might be? There is another economics question for you! My guest on Wealth Formula Podcast this week is a journalist at a prestigious newspaper that believes that financial economics is just a matter of common sense. He didn’t always think this. A journalist by trade, he felt completely overwhelmed by financial discussions until the age of 30. Then he took matters into his own hands and decided to take some time and learn the things that he thought were so confusing. To his surprise, they weren’t confusing at all. They were common sense concepts that could be learned by anyone. In fact, he even wrote a book to help others understand the basics of macroeconomics from the perspective of a non-economist. His story is fascinating and inspiring. Make sure to listen in on our conversation on this week’s Wealth Formula podcast. You might even want to grab a copy of his book. Matthew Hennessey is the Wall Street Journal’s deputy op-ed editor. He is the author of “Visible Hand” (2022) and “Zero Hour for Gen X” (2018). He lives in the New York City area. Shownotes: Why would it help Americans to embrace the economic reality that you can’t have everything you want? Greed vs. ambition Can we fix income inequality? Visible Hand: A Wealth of Notions on the Miracle of the Market

As I write this email, I’m on my way to Phoenix for our biannual meetup. So…I’ll keep it short.  Coming up Covid and in the midst of a war in Europe we are experiencing unusual inflation forcing the Fed’s hand at raising interest rates.  Over the last several weeks, we have had several economists and authors on the show trying to predict the future. Unfortunately, that’s not an easy task.  We can look at the past and take some lessons from history. But nothing is exactly as it is today. Sure we had double-digit inflation in the late 70s and 80s but for very different reasons than rising inflation in 2022.  So, the question is whether or not there is a playbook to deal with economic uncertainty and change. Of course, the answer is yes. We have our typical monetary and fiscal options.  However, for a unique situation like we are in now, is there such thing as “economic truth“?  My guest on this week’s episode of Wealth Formula podcast thinks there is and he explains what he thinks we need to do in these interesting times.  Listen Now! David L. Bahnsen is the founder, Managing Partner, and Chief Investment Officer of The Bahnsen Group, a national private wealth management firm with offices in Newport Beach, New York City, Nashville, and Minneapolis, managing over $3.5 billion in client assets. David is consistently named as one of the top financial advisors in America by Barron’s, Forbes, and the Financial Times. He is a frequent guest on Fox News, Fox Business, CNBC, and Bloomberg and is a regular contributor to National Review and World. He appears weekly on The World and Everything in It, discussing the week’s economic and market news. David serves on the Board of Directors for the National Review Institute, King’s College in New York City, and is a founding Trustee for Pacifica Christian High School of Orange County. He is the Senior Fellow of Economics for the Center for Cultural Leadership and a long-time faculty member for both the Acton Institute and the Blackstone Fellowship of the Alliance Defending Freedom. David is passionate about the integration of faith and economics and has lectured and written for years about a theology of wealth and the marketplace. He responds to the term “Kuyperian,” is deeply appreciative of Tim Keller and Father Robert Sirico, and has read more systematic theology than any human should ever read. His late father, Dr. Greg Bahnsen, was a renowned Christian apologist and is David’s personal hero and mentor. He is the author of the book, Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It, and his newest book, There’s No Free Lunch: 250 Economic Truths, released in November 2021. His ultimate passions are his wife of 20+ years, Joleen, their children, sons Mitchell and Graham, and daughter Sadie, and the life they’ve created together on both coasts. Shownotes: definition of Economics The difference between the current inflationary environment and inflation in the 1980s? Can we look at old economic truths to try to address today’s new economic problems? The forecast for inflation

The most common question I get from investors these days is how increasing interest rates will affect the performance of our real estate holdings. There is often concern, for good reason, that as rates go up our net operating income will go down. The good news is that things aren’t that simple. Rate increases don’t happen in a vacuum. Remember that the reason the Fed is increasing interest rates in the first place is because of inflation. We are in 1980s territory with 8.5 year over year inflation. The Federal Reserve has to raise rates to keep it under control. But drilling down on inflation reveals an important reality in multifamily real estate. In our high growth markets, we are increasing rents at a pace that often significantly out-paces inflation right now.  In other words, what we are finding is that we are driving net operating income up at our properties far in excess to what the inflation numbers show—as scary as they may sound. This is why we always talk about real estate as a hedge to inflation. You are seeing this reality in real time. Not only are we hedging inflation. In reality, as the second largest landlord in Phoenix, our rent increases are probably making a significant impact on the inflationary data in that market. The specific kind of real estate that we focus on is also helpful. Our leases are year-to-year so we can raise rents appropriately with the economic realities on the ground. Many commercial leases are multi-year fixed contracts that can not be altered to reflect inflation. Finally, you should know that cap rates do not correlate with interest rates in a linear fashion. Cap rates rise slower than interest rates. We also mitigate that risk by buying rate caps on all of our properties. Bottom line is that, in my opinion, high quality multifamily real estate in high growth markets is a great place to be in inflationary environments like we are now.  I understand the anxiety people have about deploying capital but remember, not investing when there is 8.5 percent inflation year over year essentially guarantees you lose money in form of buying power. So fear is not going to save you money. But I know it’s a complicated topic and to drill down on it further I talk with serial real estate entrepreneur, Christopher Volk, on this week’s episode of Wealth Formula Podcast. Having taken multiple companies public including a REIT, he knows a thing or two about the real estate market! A recognized business model expert, Christopher Volk has introduced and led three successful public companies, two of which he co-founded. Those companies provided more than $20 billion in growth capital to thousands of businesses, helping them succeed. Chris resides with his wife in Arizona and Alabama. Shownotes: How does inflation affect real estate as a whole? Is it a good time right now to invest? Christopher talks about his book The Value Equation

I have started a number of small businesses over the past decade. I know that a number of you run your own business or are thinking about some kind of new entrepreneurial endeavor. So, let me tell you about some of the things that I have learned. First, fewer variables make businesses easier to run and, in most cases, more profitable. You can see examples of this with big business all the time. Ever seen the menu at In-N-Out Burger? Pretty simple! While it may seem like a good idea to offer a lot of services to a lot of different kinds of people, most of the time businesses realize that this approach is not ideal. Too many products and services create too many variables. The more moving parts you have in a business makes it harder to run efficiently. Another lesson that I learned related to this concept of keeping complexity minimal is to stay away from businesses with too much overhead. I have run medical businesses with marketing budgets of over $1 million per year. In good months, I felt like I was king of the world. On the bad ones, I worried about becoming homeless! It’s not a good way to live. Finally, the most difficult part of owning and scaling a business, in my opinion, is the issue of people. I once built a very successful cosmetic surgery business in Chicago and then tried to do the same in four other cities at the same time. My reasoning was that if I could do as well as I was in Chicago, why couldn’t I do it in smaller markets? Well, those businesses failed miserably. And, in hindsight, the biggest reason for failure was because I did not have the right people to execute the plan. Of course, I’m just a bootstrap entrepreneur who’s had some success and failures. But my guest on Wealth Formula podcast this week has been the chief economist at some of the biggest companies in the world. In fact, he has just been named the chief economist of Walmart. This week’s Wealth Formula Podcast features an interview that I did with him. What I found fascinating about this interview was that many of the problems that I saw at my level were the same for multibillion dollar corporations. Of course, I couldn’t resist getting his take on the current economy as well so I asked him a little bit about that. So whether you’re interested on his takes on what it takes to grow and scale a business or what he thinks of today’s unusual economic situation, be sure to tune in! Professor John A. List is the Kenneth C. Griffin Distinguished Service Professor in Economics at the University of Chicago. His research focuses on combining field experiments with economic theory to deepen our understanding of the economic science. In the early 1990s, List pioneered field experiments as a methodology for testing behavioral theories and learning about behavioral principles that are shared across different domains. He co-authored the international best seller, The Why Axis, in 2013. List was elected a Member of the American Academy of Arts and Sciences in 2011, and a Fellow of the Econometric Society in 2015. List received the 2010 Kenneth Galbraith Award, the 2008 Arrow Prize for Senior Economists for his research in behavioral economics in the field, and was the 2012 Yrjo Jahnsson Lecture Prize recipient. He is a current Editor of the Journal of Political Economy. Shownotes: What is going on with the economy and where are we headed? What is driving all of the inflation? John as the new Chief Economist of Walmart The Voltage Effect

My kids are little. My oldest is 12 and her sisters are 9 and 6. Admittedly, I’ve spent no significant amount of time trying to teach them about money as of yet. If anything, I have taught them a little bit about the burden of taxes by eating half of the cupcakes and ice cream and metaphorically blaming the IRS. That one seems to get the point across! When they get older, you can be sure that I will spend a significant amount of time with them teaching them about money. After all, it is my intent to leave them plenty of it after I die! For those of you who are further along in the process, I thought this week’s discussion about children and money with an actual high school teacher might be of value. Disclaimer: I have not reviewed this guy’s course and I don’t know if it’s worth it at all. However, there is no harm in listening to this perspective on a bonus podcast. Dan Sheeks is the owner and founder of SheeksFreaks LLC, an online community dedicated to helping young people live their best lives by making smart money decisions. He has been a high school business teacher in Denver, Colorado, for eighteen years, and he’s passionate about teaching teenagers personal finance, passive income, real estate investing, and early financial freedom strategies. Dan and his wife own fifteen units and have enjoyed success with multifamily, short-term rentals, and the BRRRR strategy. In his free time, Dan likes to run, bike, cross-country ski, and attend bluegrass music festivals. Shownotes: Purchase First to a Million: A Teenager’s Guide to Achieving Early Financial Independence: https://bit.ly/3Hp8R84 SheeksFreaks Community: https://bit.ly/sheeksfreaks131 SheeksFreaks Instagram: https://www.instagram.com/sheeksfreaks/ Dan’s Instagram: https://www.instagram.com/dsheeks/ Dan’s email: dan@sheeksfreaks.com