Wealth Formula by Buck Joffrey

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. David Draghinas is the founder and host of Doctors Unbound, your site to get inspiring stories about doctors doing extraordinary things. Shownotes: Dave talks about how asymptomatic carriers make Covid-19 more dangerous How bad will the economic fallout be from Covid-19? How are Dave’s current investments being affected by Covid-19? This is a good time to figure out your risk tolerance. doctorsunbound.com

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. 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. Key Concepts of Protecting Real EstateDownload Born in Geneva, Switzerland, attorney Douglass S. Lodmell has excellent knowledge and the highest level of experience in estate planning, taxation and strategic asset protection for domestic and international clients. In addition to a Juris Doctorate from Cardozo School of Law, Douglass has a Bachelor of Science degree in finance as well as an advance law degree (LL.M.) in taxation from NYU School of Law. He has authored numerous articles for professional journals as well as a popular book about the explosion of lawsuits in America called The Lawsuit Lottery: The Hijacking of Justice in America. Doug’s extensive experience in asset protection make him a frequent guest speaker at medical, and professional conferences and seminars throughout the country, as well as teaching concepts of asset protection to other attorneys at continuing legal education seminars throughout the country. Shownotes: Why is real estate one of the most difficult assets to protect? Gross is vanity, Net is sanity and Cash is king What is a Bridge Trust? Who needs asset protection? douglass.lodmell@lodmell.com https://www.lodmell.com/ 800-231-7112

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! Tom Wheelwright is a CPA, CEO of WealthAbility (Tempe, Arizona) and Best-Selling Author of Tax-Free Wealth. Wheelwright is a leading wealth and tax expert, global speaker, and Entrepreneur Magazine Contributor. Tom is best known for making taxes fun, easy and understandable, and specializes in helping entrepreneurs and investors build wealth through practical and strategic ways that permanently reduce taxes. Shownotes: How are small businesses responding to the current economic freeze? What are Tom’s thoughts about the government stimulus package? What are some of the tax relief provided by the current bailout plan WealthAbility’s special offer for the month of April https://wealthability.com/

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! Tim joined ASR Alternative Investments in 2007 and currently serves as Vice President and Senior Partner. His many responsibilities include overseeing and facilitating ASR’s  growth and marketing strategies. As a key front player in the ASR team, Tim has been an integral part of the companies expansion and revenue growth in recent years. His unquestionable grasp of the industry coupled with his astute marketing skills has earned him the highest respect from both clients and financial professionals. Prior to ASR, Tim worked for Enterprise Rent a Car for 18 years. During this time, he held several executive positions including Assistant Vice President at the World Wide Corporate Headquarters in St. Louis, Missouri. He was responsible for European  operations expansion in the UK, Germany and Republic of Ireland. His most recent position with Enterprise brought him to the Dallas/Fort Worth area where he served as the Regional Vice President and Corporate Officer of a 50 million dollar operation, responsible for 300 employees in 40 locations, including the DFW Southwest Regional Headquarters. In 2007, Tim chose to retire from Enterprise and join American Safe Retirements. Tim grew up in Southern California and Washington State. He attended Washington State University in Pullman Washington and currently lives in Southlake Texas with his wife, Theresa, and their five children. Shownotes: Tim talks about the people who sell their life insurance policies and why it’s beneficial for them. Why are a lot of sophisticated investors not educated on life settlements? Tim talks about the “Wild West” of investing in life insurance policies in the past Why does Tim consider ASR to be one of the more conservative players in the market today

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 Shownotes: How does Whole Life Insurance work? How is life insurance similar to real estate? Christian talk about the investment strategies of the ultra high net worth How does Wealth Formula Banking essentially let you make money in two places at the same time? What is Velocity Plus?

“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 Born in Geneva, Switzerland, attorney Douglass S. Lodmell has excellent knowledge and the highest level of experience in estate planning, taxation and strategic asset protection for domestic and international clients. In addition to a Juris Doctorate from Cardozo School of Law, Douglass has a Bachelor of Science degree in finance as well as an advance law degree (LL.M.) in taxation from NYU School of Law. He has authored numerous articles for professional journals as well as a popular book about the explosion of lawsuits in America called The Lawsuit Lottery: The Hijacking of Justice in America. Doug’s extensive experience in asset protection make him a frequent guest speaker at medical, and professional conferences and seminars throughout the country, as well as teaching concepts of asset protection to other attorneys at continuing legal education seminars throughout the country. Shownotes: What is a Trust? Doug talks about a Living Trust What is the difference between a Revocable Trust and an Irrevocable Trust? Doug’s advice: If anybody tells you anything can magically avoid taxes, you need to question it https://www.lodmell.com/ douglass.lodmell@lodmell.com 800 231 7112

“Be careful what you wish for, lest it come true!” The origin of this saying is Aesop’s Fables (circa 260 BC), not a modern country singer as some might think. Either way, it is a powerful statement when it comes to financial wealth.  You see, I talk to hard working, high paid professionals every day and many aspire to retire. They believe that they would be much happier if they could make enough money to quit their job. But is that really true? It may be more complicated than you think. As you may know, I quit my “job” as a surgeon almost three years ago. I would not call myself retired but I am most certainly retired from medicine. Do I miss it? Well, I have to say that I rarely think about operating so the answer is no. However, I do miss certain sensations associated with that time in my life. I miss doing things with my hands. I don’t think about operating anymore but I do miss the sensation of being completely absorbed in a physical task and trying to do it perfectly. I remember the feeling of being lost in my own world completely detached from any other concerns in life. The only other time I really felt that way was when I played ice hockey as a kid. In addition, I miss having a well-defined routine that I can’t cancel on a whim. There is a certain comfort in the monotony of a strict schedule and being needed that is not appreciated until it’s lost. I also miss interacting with people in a work setting. I used to go into an office every morning and bond with people. These days, I spend most of my days working by myself and, when I do speak to others, it is usually over the phone and all business. Now don’t get me wrong. I don’t want that old life back anymore. However, I am trying to figure out how to have my cake and eat it too! That is to say, the feeling of flow (being lost in work), routine, and community are all important elements of feeling happy. If you recognize that you are missing these things in your life, that’s great news because you can actively do something about it and improve your sense of wellness. That’s what I want to do myself. Right now though, I am in the data collection phase. I am a scientist at heart. I need to define, at a physiological level, what exactly happiness is. Is it ultimately a function of dopamine and serotonin that result in certain electrical activities in various parts of the brain? If so, what kinds of things alter that activity? I’ll let you know when I understand this stuff better myself. In the meantime, I’m relying on the experts in the field to help me establish a larger framework for this thing called happiness. After all, what’s all this money we are making for anyway? Money can buy happiness to a certain extent and science has evidence for that. But it can’t take you to the next level. I have realized recently that in order to get to that next level of holistic wealth (aka happiness), it will require the same level of education and diligence as it requires to become financially wealthy.  That’s what I need to do and I hope that you will be inspired to join me over the next year as we put further emphasis on this topic of positive psychology into the Wealth Formula milieu. If you want to start working on this stuff in a meaningful way, listening to this week’s Wealth Formula Podcast interview with Joel Wade would be great way to start. Listen HERE! P.S. I’ll be talking about happiness at our upcoming Wealth Formula Meetup in Phoenix on April 24th-25th! Make sure to sign up for the event at WealthFormulaEvents.com Joel F. Wade, Ph.D. is Marriage and Family Therapist and Life Coach, and the author of The Virtue of Happiness and Mastering Happiness Shownotes: What is Joel’s definition of Happiness? Is Happiness Physiological or Psychological? Can you train your brain to be happy? What is Flow? Joel talks about the difference between achieving happiness as an adult vs achieving happiness as a kid The Mastering Happiness Podcast drjoelwade.com

Yogi Berra once said, “It’s tough to make predictions, especially about the future.” He was a wise man. No wonder they named a cartoon character after him. The problem is that everything we do in finance ultimately relies on some kind of belief of how the future will play out. As a result, we often search for prophets who can help us make a profit. Of course these prophets, otherwise known as economists, don’t seem to agree with each other. Some even seem to have secondary agendas. You know what I mean—the guys who boast about predicting the great recession of 2008 but omit the fact that they also predicted recessions every other year for the last two decades! The economy is cyclical. That means if you keep saying the same thing all the time, periodically you will be right! But only drawing attention to those occasional events is a bit disingenuous don’t you think? It’s also suspicious when they talk about gold to protect against cataclysmic events and just happen to have a thriving business that sells gold. That’s hardly an unbiased source. Listen, like everyone else, I’m looking for some help with the future. Wouldn’t it be great to be given a heads up on events like 2008 several months before they happen? Wouldn’t it be great if there was someone who could tell you for sure that the next 10 years will be the most profitable in history and that you should invest everything you can? Of course that would be great but without Michael J. Fox’s Delorean in “Back to the Future”, it ain’t gonna happen. Economists can’t even agree with one another so why bother listening to any of them?  Well, I would argue that you just need to do a little homework and decide who is worth listening to. I’ll tell you what I do. I vet my sources of information the same way I vet my real estate partners. Now, it may not be important for me to know, like and trust an economist, but it is critically important for me to understand their track record. How frequently do economists tell you their batting averages?—not often in my experience. Why do you think that is? Wouldn’t that be useful information? After all, If you could find a source that has been over 95 percent accurate with both positive and negative predictions in the US economy over the past 70 years, would you take their predictions seriously? I would. That’s exactly what ITR Economics has done and its the reason why they are my single most trusted source of economic forecasting. When they talk, I listen. This week’s Wealth Formula Podcast will give you the opportunity to do the same as I interview ITR economist, Catherine Putney.  Catherine Putney specializes in applied research for business cycle trend analysis, growth-cycle trend analysis, and implementing cyclical analysis at the practical, company level. She holds a master’s degree in economics from the University of New Hampshire. Catherine regularly contributes articles to ITR Economics’ flagship publication, the ITR Trends Report™, focusing on the manufacturing sector of the US economy. Catherine and the ITR team have put this expertise to work for companies across a wide range of industries, including manufacturing, chemicals, fibers, healthcare, distribution, real estate, construction, and technology. Shownotes: Catherine talks about the 95% accuracy rate of ITR Economics Roaring 2020s and Depression in the 2030s What is the effect of the latest coronavirus outbreak on the global economy? Sign up for the ITR Economics newsletter https://www.itreconomics.com/

If you are part of our Wealth Formula Investor Club you know that we do a lot of multifamily real estate. In fact, 95 percent of what we do is working class, value-add multifamily real estate with the same two operators. Some of you have invested literally millions of dollars into these deals. I’ve got my own money and my dad’s money in this stuff too so I’m not doing anything different. I know it seems boring. The entrepreneur in me wants to bring you and me some brand new bright and shiny objects in which to invest. But I just can’t do that—at least not right now. Right now, boring is good. For those of you who have been urging me to branch out, I promise you that I am looking at new stuff all the time. The problem is that the risk adjusted return just never seems on par with what we already have. To make my point, let me give you a couple of examples. A very respected private equity shop approached me about a joint venture with them in which we would construct several well known burger franchises across the country and then roll them up to private equity for a big multiple and an exit. Sounds good on the surface. The investor IRR was projected at 20 percent which was respectable and it certainly could be better if other things went just right. However, there were no tax benefits, so even an 8 percent yearly dividend sounded less than attractive. Furthermore, there is no doubt in my mind that the risk to operating businesses in this economy is far greater than working class residential real estate. So, bottom line—shiny object, cool business plan, great team…but for what? The return profile was similar to our real estate proformas with far greater exposure to a volatile economic climate and no tax advantages. I’ll take boring. Another deal I passed up on was a really interesting commercial real estate play where the group was buying from pension plans that had to sell per mandate and was getting steep discounts on the properties they were buying. But these properties were in tertiary markets like Louisville and Cincinnati. And when you did a deep dive, cap rates were still at 8 despite the big purchase price discounts. This is with vacancies at historical lows! What does that tell me? It tells me that this is a great model but the timing sucks. Am I really going to load up on office space in tertiary markets in 11th year of the longest expansion of GDP in US history? In an election year??? Again, the answer is no but I promise I’m still looking! It’s just that right now, very little beats our boring little real estate deals on a risk-adjusted basis. So, for now, I’m going to just keep investing the same way and you may find it prudent to do the same.  Now, if you are making a lot of your investments out of retirement accounts (SDIRA’s, Solo 401Ks) or thinking about doing so, I highly recommend you listen to this week’s podcast interview with Damion Lupo. If you’ve been on the fence about using your retirement funds for real estate, some recent legislation may just change your mind.  Find out why on this week’s episode of Wealth Formula Podcast! P.S. Don’t forget to sign up for our LIVE meetup in Phoenix Arizona on April 24th and 25th! To sign up, click HERE! American Sensei. Yokido Founder. 5th Degree Black Belt. Financial Mentor to Transformation Nation. Best selling author in personal finance. Rewriting the rules and plan for retirement. Shownotes: What is the difference between an IRA and a 401k Damion talks about UBIT and UDFI What is a Backdoor Roth? Why do a QRP? QRPbook.com