I am not an economist but I do recognize the importance of understanding a little bit of macroeconomics to guide me as an investor. After all, financial markets don’t move in a vacuum. They are affected by all sorts of things including monetary and fiscal policy. As a reminder, monetary policy is dictated by the Federal Reserve. Essentially, they have two powers that they can wield to impact the financial system. One is the power to set interest rates at which the banks trade with one another—the so-called “Fed Funds Rate.” The other is the ability to print money and buy bonds—aka quantitative easing. Right now this monetary policy is as loose as it can be. With historically low interest rates and quantitative easing cranking away, the Fed is doing what it can to steer us out into a post-pandemic economy. While the Fed does its thing, the US Government and Treasury are responsible for fiscal policy—aka government spending. Obviously, that is also hard at work right now as demonstrated by the recent $1.9 trillion stimulus package. Simultaneously, household savings rates are high and there is enormous pent-up demand for spending that will presumably be unleashed late this summer and into the rest of the year as Covid-19 herd immunity becomes reality through vaccination efforts. All of the ingredients are there for an economic boom like we haven’t seen in decades. The economy could really heat up and we could see some inflation.&nbsp; Historically the response of the Federal Reserve to a hot economy is to put on the brakes so that inflation does not get out of control. Raising interest rates and not printing money would be the steps that you might expect. But this time, it may be different. The Fed has changed its policy. In the past, the Fed has used a target inflation rate of 2 percent as a major indicator of when it needs to raise rates. But now the policy is to allow rates to overshoot 2 percent and to focus more on the average rate of inflation. In other words, if the economy heats up, they will let it boil! Low interest rates are critical to keep asset prices inflated. One of the misconceptions that people have is that the Fed Funds rate is the primary indicator for long-term loans like mortgages. That’s actually not the case.&nbsp; Long-term mortgages are more correlated with the bond market—specifically the 10 year treasury. The bond market is complicated and I won’t pretend to completely understand it myself. However, for simplicity just know that as the 10 year treasury rises, so will interest rates for your asset-based loans. Assets will sell off if the 10 year treasury spikes and that’s what happened recently. That’s why there was a huge sell-off in Tesla stock presumably. The 10 year treasury will naturally go up if the markets expect inflation. So if that’s the case and the Fed wants to keep rates under control, what can it do? Well, remember quantitative easing is where the Fed creates money out of nothing. When it prints that money, it buys bonds like the 10 year treasury. If the Fed continues to buy treasuries, it can control the supply and demand and artificially suppress the yield on those bonds. That’s what it’s doing and what it plans on doing more of in the near future. So, the take-away I have from this news is that inflation is coming so don’t sit on cash. That’s a sure fire way of losing money as it loses value over time. I also interpret this as “go time”. The economy is about to boom and I, for one, will position myself in the assets that will benefit from this explosion. Finally, expect this boom to last. The Fed and the Treasury are going to let the fireworks go on for a little bit longer than they normally do. That’s it for my macroeconomic warm-up for the week. Now you are ready to listen to an economist talk about these issues and a lot more in this week’s Wealth Formula Podcast. Listen NOW! &nbsp; P.S. My 11 year old daughter just released a song...

255: Are the 20s about to Roar?

I used to be a guy who prided myself on being a minimalist. Despite doing pretty well for myself financially, I drove the same 2007 Prius I bought the day after residency until just a couple of years ago. My clothes often didn’t fit and I never shaved. Oh yeah—I was about 25 pounds heavier because I didn’t really care how I looked. I also didn’t really spend much on vacations or special events— I used to just blame that one on parenthood. It’s funny because I sort of took pride in my rejection of material possessions and my frumpy looks. I was sort of giving society the finger. Then all hell broke loose: namely the beginning of Covid lockdown and the end of my marriage. They kind of happened at the same time so it was a little rough. Confused and disoriented, I didn’t know what to do so I just began to hike the beautiful mountains in Montecito. It reminds me of the movie, Forrest Gump, where Forrest just decides to run one day and keeps going back and forth across the country until he seemed to figure something out. I hiked so much during those days that I pretty quickly shed most of my extra weight. Meditating on my life through those gorgeous trails every day made me see myself for what I had become: kind of repulsive. Ok, so maybe that sounds a little harsh but that’s the way I saw the old me. I needed to update my self-image for myself. It started out with the material things. I bought that Italian sports car I always wanted. I bought clothes that actually fit me and that were younger than my children and I started to take my health seriously. Oh… and I started shaving every day. They say the Chinese word for crisis is the same as the word for opportunity. Well, I took this crisis as an opportunity to overhaul my life and to start over. In starting over, I became acutely aware of the time I had wasted not living the life I want: material or otherwise. I just didn’t want to spend the money. But why wasn’t I spending any of this money that I was working so hard to make? After all, I can’t take the money with me after I’m gone. I’d already done a good job of setting my kids up with assets and insurance. Why not spend on me? Well, that’s what I started doing! And I have to tell you it's a lot more fun than the alternative. And maybe I’m spending too much now, but I also have a lot of time to make up for. So now I’m buying the stuff I want and also living a life full of new experiences. The funny thing is that this was supposed to be about me, but I found that this change has also been great for my daughters as we now travel more and go to a lot of cool events. So why do I bring this up? Well, a couple of months ago, a friend and WF listener texted me and suggested I read a book by Bill Perkins called&nbsp;Die with Zero and it seemed to encapsulate so much of my new ethos that I wanted to share my thoughts on it with you. So I grabbed a couple of familiar faces to do a little book club on this week’s Wealth Formula Podcast. Make sure to tune in!

366: Book Club: Die with Zero

Zulfe Ali is a broker dealer and investment advisor—but not your run-of-the-mill type in this field. He’s been in the middle of the action on Wall Street as a mergers and acquisitions guy for JP Morgan and Bank of America in the 90s and ran a multibillion-dollar sovereign wealth fund for over a decade. I’ve seen photos of him with world leaders like former UK Prime Minister Tony Blair and others as part of his former position. To say the least, he’s not one of those 6 week course advisors out there. While he has now opened his door to individual investors like us, he is using institutional principals to help clients grow their money. As you can imagine, those principals are quite different from your typical advisor and I am happy to endorse him to anyone looking for a third-party financial advisor. Many people have asked me for a recommendation throughout the years and I have not been able to give one until now. In this episode of Wealth Formula Podcast, I speak to Zulfe about his perspective on asset allocation and the current economy. Make sure to tune in to see what a guy at his level is thinking. And later on this week, tune in for my “Back to School” episode where I give you insight into how I design my own investment portfolio. Listen NOW!

387: Lessons from a Sovereign Wealth Fund Manager

When I first started podcasting a decade ago, I was very anti-Wall Street. But what does that even mean? I guess I hadn’t really contemplated that. My show started not long after the financial meltdown of 2008-2009. For many of us, the greed that was unveiled during that period was eye-opening as we saw major institutions fold losing ordinary people their life savings yet the architects of the disaster floated out of harm's way with golden parachutes worth 100s of millions of dollars. That, to me, was Wall Street and I wanted nothing to do with it. Actually, to be honest, I didn’t have anything to do with it anyway. I had just finished surgical training and didn’t have any money to lose. But…It did emphasize a concept to me that I grew up with anyway. As the son of a scrappy immigrant slumlord, I knew that there was a different way of creating financial success than simply handing it over to wealth managers that were part of the traditional financial “Wall Street” paradigm. These days I think I’m a lot more level-headed in my views. I don’t see traditional public equity markets as empirically evil. I am also acutely aware that investing outside of Wall Street has its pitfalls too. You can and will lose money investing outside of Wall Street as well. And while you may avoid the greedy CEOs responsible for the mortgage meltdown in 2008, you also have to avoid the charlatans that inhabit the wild west that is private investing. What do I mean by that? Well, the economy did a number on a lot of us and we lost money fair and square so to speak. That’s going to happen. But there were also multiple Ponzi schemes and downright terrible business models that were poorly vetted by unsophisticated capital aggregators as well. The point is that there are landmines everywhere. Pick your poison. The good news is that you just need to win most of the of time. That’s what I have been able to do over the past decade and as a result, by most measures, have become a financially wealthy individual. That said, I’m always striving to become better as an investor and a lot of that revolves around understanding my own strengths and weaknesses and trying to especially compensate for weaknesses. For example, I know that I want to diversify my holdings outside of real estate a bit more. I am about 80 percent real estate now. So I’ve gotten Zulfe Ali involved with our platform who is world-class at evaluating businesses as the former chief investment officer for a sovereign wealth fund. This will be good for me and it will be good for Investor Club (hyperlink) in the coming years.&nbsp; I also am thinking about potentially starting other businesses—possibly a franchise or some other low-time commitment endeavor. Why? Well, it’s fun for me and I know that I have a track record of success in business. And, again, I could use the diversity. Remember, personal finance is personal. There’s not a single recipe for success. The principles of wealth building are pretty constant but the ways people generate the cash to build that wealth is limitless and I encourage you to consider taking a deep dive for yourself on this topic. You may find that remaining purely passive as an investor is what suits you best and that simply diversifying your assets is all you need. On the other hand, you might discover an inner entrepreneur who wants to come out and shake things up a bit. My guests on Wealth Formula Podcast today emphasize the differences between investor types which I think might be useful as a topic on which to drill down a bit. They call their show Wealth Without Wall Street and we discuss this and many other interesting concepts on this week’s episode of Wealth Formula Podcast. Show Notes: 00:10:53:05 When did Wealth Without Wall Street begin? 00:12:21:13 What is the business behind the podcast? 00:14:18:12 Who is their avatar? 00:17:28:10 Owning a job is harder than working one 00:19:00:14 What is their primary content?...

406: Wealth Without Wall Street

The notion of moving wealth away from Wall Street into the hands of small private operators sounds great. However, it’s important to acknowledge some of the challenges of navigating these waters; challenges that many have witnessed first-hand in the podcast ecosystem over the past two years. First and foremost, let's talk about vetting. Investing is hard. With the ideal operator and business plan, you still have economic cycles, inflation and interest rates to worry about. And sometimes, projects just fail. These are investment realities that are always there even before you choose an operator. Of course, not all operators are created equal and the vetting process becomes paramount. How do you ensure that these operators have the acumen, integrity, and diligence to manage your wealth responsibly? You can do background checks, look at resumes and track records. You can ask all the right questions and even get all the right answers. All of this is certainly helpful, but limited to historical data. As the old saying goes, past performance does not indicate future results. So far, all of this applies equally to Wall Street and Main Street. But I would argue that the one variable that is much harder to control on Main Street is the bad actor. You would be correct in pointing out that the most famous of modern-day Ponzi schemes was perpetrated by Bernie Madoff, Wall Street’s Godfather. But that just doesn’t happen that often with the big boys. Too much red tape, regulation and heavy-hitting due diligence by sophisticated investors to make an outright fraudulent investment work. And the bad actors know that too so they set their sites on easier targets like retail investors. They lurk at our events and make the podcast circuit. It is for these various reasons that I no longer will interview anyone from outside of my own circle actively raising capital. It’s also the reason that we now use an SEC-registered broker-dealer to conduct independent due diligence on most of our offerings in . How do you identify a bad actor anyway? Sometimes it's quite easy. For example, one fund that was circulating in the podcast ecosystem had a founder and CEO who I couldn’t even locate on a Google search despite the fact that he was sold as a major player in the oil and gas industry doing business with some of the world’s top companies.&nbsp; Sometimes it’s less obvious and you have to know how to look for clues. My guest this week on Wealth Formula Podcast is an expert in identifying fraud, in part, because he once ran a Ponzi scheme himself. Show Notes: 08:45 From Fraudster to Fraud Prevention 17:10 Do Frauds Generally Start with Intention? 19:36 5 Major Red Flags of Fraud 37:40 James’ Business

422: Avoiding Ponzi Schemes and Bad Actors

I have been asked by many to give my opinion on where the economy is headed and what to do. I have been reluctant to do so because I am not an economist and I do not want to give investment advice. However, I do think I owe it to you to let you know where my head is and what I am doing based on these thoughts. Last week and this week’s podcast have convinced me that rates are going to fall significantly over the next 6 months. Why? Because I think that inflation, as measured by CPI is going to fall off of a cliff. I don’t even consider this a prediction frankly. I think it’s already written in stone. Why? Because 70 percent of CPI is based on rent increases and the variables used to calculate this number are 6 months behind. The recent CPI of 3.1 per cent used 6 per cent rent increases to get to that number. Anyone in the multifamily space will tell you what’s wrong. The rents are flat. We see it every day and all of the data available to us real estate operators show flat rent growth. Knowing this, all you need to do is ask yourself what this lagging indicator will show six months from now. Whatever happens between now and then doesn’t matter. That lagging indicator will reflect what is the reality today. And if the rents are where I believe they truly are, CPI will be below two. A CPI below two along with a slowing economy will result in a swift response from the Federal Reserve to cut rates to avoid deflation..traditionally the Fed’s worst fear. So, if I’m right, rates will come down and anyone making big decisions today based on the assumption that rates will remain stable or go higher is making a mistake. In other words, my opinion is to make sure you are not selling from a position of weakness. Hold on to what you own. This week’s interview with Richard Duncan furthered my convictions of the inevitability of falling rates. It also painted a picture of China that looked a lot more like Japan in the 1990s. The economy and the world are changing quickly. Make sure to listen to this week’s episode of the Wealth Formula Podcast to keep up! Show Notes: 06:38 What’s Been Going On With Inflation and Rates Cut? 11:21 Indicators That the Fed Uses to Measure Inflation 15:27 Will the Fed Become Hawkish now? 21:33 Why the U.S. Economy Has Been So Strong 28:31 The Economic Crisis in China 42:41 What Can China Do to Stabilize Their Economy? 48:17 Implications for the Rest of the World

424: Richard Duncan: U.S. Strong China in Trouble

Is it me or is no one talking about high U.S debt levels anymore? Conventional wisdom has always been that high debt levels lead to inflation and the destruction of currencies, and money printing conjured up images of wheelbarrows full of worthless bills and economies in freefall. Then one day, the political party that used to care about fiscal responsibility stopped caring and now no one talks about it anymore. After all, doing so would involve cutting things like Medicare and Social Security—not popular political stances. Instead, the concept of Modern Monetary Theory (MMT) has started to creep into popular parlance and, you could argue, is becoming the rule of the land.&nbsp; According to MMT, as long as Uncle Sam holds the keys to the printing press, he can rack up debt without any ramifications. It's a bold new take on economics that's got the traditionalists scratching their heads and the contrarians doing a victory dance. So should we care about debt or not? My guest today on Wealth Formula Podcast is definitely a traditionalist and he is not optimistic about how the story will end if we don’t do something about it. Make sure to tune in as he explains why debt is still so important and what, if anything, we can do about it and protect ourselves. Show Notes: 05:37 Why is the U.S. Government a Big Ponzi Scheme? 06:52 Is the U.S. Immune to Bankruptcy?&nbsp; 08:04 How Realistic Is It That the U.S. Economy Would Collapse? 12:01 Political Reform for the Fiscal Policy 19:20 How Can We Protect Ourselves From the Collapse? &nbsp;

425: The US Government Ponzi scheme?

Regarding the recent Podcast:  US debt fears overblown US debt is high, but not unsustainably so (compared to global economies)  A more relevant concern may be focused on the appetite or ability of investors to buy the quantum of debt being issued by the US government.  Foreign investment in US debt has declined China and other central banks have been buying gold US treasury auctions are historically large ($125 billion on auction this week)  As investors how do we position our investment portfolios for risks related to spiraling and unsustainable debt levels by our government:  Resulting conditions will likely consist of high inflation, high interest rates, higher taxes, slower economic growth Real assets tend to perform better.&nbsp; Gold, real estate, aviation assets.  Better to have some leverage Tax efficient investments (such as real estate and aviation assets)   Current market trends  Latest FED outlook Interest rate outlook

426: Velerity Wealth Update 5/8/24

I have frequently described myself as most aligned with libertarian thought when it comes to my own politics. In terms of the economy, libertarians believe in the concept of a free market. Libertarians argue that a truly free market fosters prosperity, innovation, and individual liberty. But that doesn’t really describe the American economy, does it? Over the years, the American economy has seen a proliferation of regulations at the federal, state, and local levels that have significantly constrained economic freedom. In addition, governments constantly intervene in the economy through corporate subsidies, bailouts, and preferential treatment. You don’t need to look further than the recent regional bank bailouts to see that.&nbsp; Libertarians would argue that such intervention distorts market incentives and motivations. For example, how are banking practices going to change for the better if the bankers know they are going to get bailed out if things go wrong? Does a truly free market even exist? I don’t know of one. And perhaps the ruthless nature of the free market is one that we wouldn’t truly find appetizing anyway. However, there is no doubt in my mind that a “freer” market would do the economy some good. My guest on this week’s Wealth Formula Podcast is from the libertarian think tank, Cato Institute, and explains how government market intervention has hurt us and how it will continue to do so if policies do not change. Show Notes: 04:29 What is the Cato Institute? 05:32 The Market Prices Are Under Siege 08:00 How Do Market Prices Provide Value For the Economy? 11:45 Inflation VS Price Spikes 16:52 Is the Central Bank Policy Misguided? 19:11 Are We Hitting the Inflation Target Soon? 25:13 What Could We Be Missing That Would Keep Inflation Numbers High? 28:13 How Will the Election Affect Decision in Policy?

427: A Libertarian Perspective on the Market Economy

My key takeaway from our guest (Ryan Bourne from the Cato Institute) on this week's episode is that policy mistakes that adversely impact the free markets happen for a variety of reasons: Misread of data Poor use of policy tools Political motivation National Security interests  Whatever the reason, the consequences of policy mistakes are real for investors.&nbsp;  For example, the FED let inflation run too hot when it thought it was transitory, which probably then created a situation where they had to hike more aggressively than they would have if they caught inflation at the front end. &nbsp;Resulting in a detrimental hit to interest rate-sensitive investments such as real estate and debt securities. &nbsp;  Today, we can see examples of potential fiscal and monetary mistakes unfolding in front of us:  On the monetary policy front: the FED is waiting for data it needs to start cutting rates...but, it's running into the presidential elections timeframe (RNC convention in July, DNC in August). &nbsp;So, it may decide to not touch the FED rate until end of year...Thus the FED may be forced to make a policy error due to political considerations.  On the fiscal policy front: we see large investments to support US manufacturing; large investments to onshore critical technologies such as semiconductors; trade protectionism including tariffs on imports (new tariffs announced today on Chinese EVs, storage batteries, steel and aluminium products); immigration policy is also at risk of politically motivated policy decisions.&nbsp; &nbsp; As investors, what can we do?  It’s not possible to predict and factor in the impact of all of these policies.  What we can do is isolate key macro themes that are likely to drive secular trends over the coming decades. &nbsp; For example: The Aging population in the US and other developed countries. &nbsp;This will drive growth in health and wellness products and services.&nbsp;  Investment in upgrading the US grid to support huge demand of electricity (data centers, AI driving computing, EVs) and to accommodate new energy sources.  Deployment of AI in key industries such as biotech to accelerate drug discovery. &nbsp; Historically high level of cash ($6 trillion) is sitting on the sidelines as investors decide to clip 5% interest in money market funds. &nbsp;  As soon as any signal comes from the FED that it is ready to cut rates, or even if it is going to significantly taper its Quantitative Tightening policy, there will be an enormous amount of capital rushing back into investments: equities, bonds, real estate etc. &nbsp; Investors should already start deploying their capital into investments.  Do not sit on cash and/or money market funds. &nbsp;At 5% money markets may be tempting, but that rate will not last when the FED starts cutting and then you'll be chasing assets that have already appreciated dramatically.

428: Velerity Wealth Update 5/15/24

Tom Wheelwright, my friend and author of Tax-Free Wealth, describes the US tax code simply as a series of government-sponsored incentives. As someone who hates paying taxes, this fact has made me extraordinarily patriotic. The problem is, that sometimes incentives backfire. Case in point—during the British Raj rule in India, there was a proliferation of venomous cobras in Delhi. To deal with this problem, the colonial government introduced a bounty/reward program where people would be paid a cash amount for every dead cobra they brought to the authorities. Initially, this seemed to work as intended - the cobra population started declining as people hunted and killed the snakes to earn the reward money. However, people soon realized they could exploit this system by breeding and farming cobras specifically to kill them and collect the reward. Driven by the monetary incentive, many started cobra breeding operations. When the British officials discovered this unintended consequence of their bounty program - people were now breeding more cobras than they were killing - they scrapped the reward program altogether. This led to another unintended effect - with no more reward money to be made, the cobra breeders simply released their now-worthless snakes into the wild, causing the cobra population to proliferate even more than before the bounty was introduced. As an American of Indian descent, I would love to tell you that the Colonial British were just a bunch of idiots. But, the reality is that the cobra effect is alive and well in the US tax code. To explain how, this week on Wealth Formula Podcast I interview one of America’s leading experts on tax policy. Show Notes: 04:31 What is Taxocracy? 06:11 Tax Codes Are Just Incentives 07:15 Are the Tax Codes Making Americans Disapprove of the Economy? 08:30 The Global Wealth Tax 13:22 President Biden’s Proposal on Capital Gain 14:38 The Death Tax 18:17 In Comparison to President Trump’s Policy 20:39 The Mansion Tax 23:59 Other Tax Influences 25:46 The Tax Foundation

429: Taxocracy

Takeaways   Tax policies can have a significant impact on businesses and individuals, and it's important to plan and adapt accordingly.  The depletion of social security funds is a concern, and solutions need to be implemented to address this issue.  The stock market has been performing well, with the Dow Jones hitting all-time highs and the S&amp;P and NASDAQ showing significant gains.  Diversification is key in managing investments and mitigating risks.  Having a strong financial team, including tax specialists and estate planning experts, is crucial for navigating the complexities of the current market.

430: Velerity Wealth Update 05/22/24

Buck Joffrey is joined by Rod Zabriewski and colleagues of Wealth Formula Banking to discuss this powerful financial&nbsp;tool that leverages your savings to invest the same money at two places at the same time.

431: Wealth Formula Banking Webinar Replay

The Baby Boomer generation (born 1946-1964) was historically the largest, peaking at around 78.8 million in 1999 when they were in their prime working years. However, the current Baby Boomer population in the U.S. as of 2019 is estimated to be 71.6 million, having declined due to mortality exceeding births as this generation ages. The Millennial generation (born 1981-1996) has now surpassed the Baby Boomers to become the largest living adult generation in the U.S. As of 2019, there were 72.1 million Millennials. The Millennial population is projected to continue growing, partly due to immigration, and peak around 2033 at 74.9 million before declining as mortality rises]. Following the Millennials is Generation X (born 1965-1980), with 65.2 million members in the U.S. as of 2019. Gen X is expected to outnumber the declining Baby Boomer population by 2028. The youngest major generation, Generation Z (born 1997-2012), is also a massive cohort. Gen Z makes up around 20% of the current U.S. population. The Gen Z population in the U.S. is expected to grow from immigration as well, similar to Millennials. The sheer size of the Millennial and Gen Z generations presents both opportunities and challenges for the U.S. economy. A larger working-age population can drive economic growth through increased productivity, consumption, and tax contributions. However, it also puts pressure on job markets, housing, infrastructure, and social services. A recognized major emerging problem is the challenge of supporting the aging Baby Boomer population as they continue retiring in large numbers. The burden of funding Social Security, Medicare, and other retirement programs will fall primarily on the Millennial and Gen Z generations. This will almost certainly strain public finances and some economists have even predicted a major national depression around 2030 because of this. All of these problems have been previously covered to some extent on Wealth Formula Podcast episodes in the past. This week, however, we cover another less appreciated problem…the transfer of massive amounts of wealth to a generation with different political views and values. My guest on this week’s Wealth Formula Podcast believes this is a major underappreciated issue that needs to be addressed as soon as possible. Find out why. Show Notes: 00:00 Intro 05:54 The 100 Trillion Dollar Wealth Transfer 08:25 The Mindset Difference between Baby Boomers and Millennials 10:32 The Risk of the Wealth Transfer 14:59 Monetizing Influence 16:39 Where is Gen-X in All of This? 18:36 The Positive Outcomes 21:12 Where Does the Discourse Take Place? 23:10 The Worst Case Scenario

432: Wealth Transfer to Gen Z: A Generation that Thinks Differently

Buck shares the similar path that almost every successful entrepreneur he knows took.

A Proven Path to Entrepreneurial Success

This week’s episode on Wealth Formula Podcast is a primer on asset protection. One of the things that I learned a few years back is that asset protection and estate planning are not one and the same. Asset protection is simply protection against creditors. An offshore trust in the Cook Islands, for example, is a rock solid way to protect your assets but it is not an estate planning vehicle. Since this week’s podcast discusses asset protection, I want to just remind you of what you MUST know about estate planning. As of today, if you are single you can leave up to $13.61 million to your heirs without being subject to estate taxes—double that if you are a married couple. As long as you are below that, you need two things at a bare minimum to ensure that you don’t make your loved ones even more miserable than they already will be. You need a will AND you need a trust. The key difference between a will and a living trust lies in how they manage and distribute your assets during your lifetime and after death. A will is a legal document that outlines how you want your assets distributed after you pass away. It only takes effect upon your death, at which point it goes through the probate process overseen by a court. On the other hand, a living trust is a legal arrangement where you transfer ownership of your assets into a trust during your lifetime. The trust is managed by a trustee (which can be you initially) for the benefit of your beneficiaries. Upon your death, the assets in the trust are then distributed according to your instructions, bypassing the probate process. You want to avoid probate at all costs if you want to make it easy on your loved ones. Probate is the legal process that takes place after someone dies to distribute their assets and property to the rightful heirs or beneficiaries. It involves going through the court system, which can be time-consuming, expensive, and open to the public. It can drag on for months or even years, especially if the estate is complex or there are disputes among heirs. A living trust allows assets to be distributed relatively quickly after death without court involvement. Furthermore, probate fees, court costs, attorney fees, executor fees, etc. can eat up a significant portion of the estate's value. With a living trust, you avoid most of these costly probate expenses. So if you have not done so, PLEASE make sure you get these documents done. It’s not expensive and your family will thank you for it. Show Notes: 05:47 A Review on Estate Planning &amp; Asset Protection 07:56 How to Determine What You Need 12:03 Protecting Your Real Estate 13:53 When Do You Need a Trust? 16:45 Asset Protection Strategies that Mitigates Tax 19:45 Upcoming Law Changes 23:50 Beneficial Owner Information Report

434: Another Perspective on Asset Protection

Market Updates:  Economic data since last week's update:  Core PCE Price Index rose 0.2% in April, in line with expectations Job openings decreased in April, indicating a cooling labor market   Equity markets have been a bit volatile recently, down a couple of percentage points Ongoing volatility is expected as we move through the summer and elections However, the economic and inflation backdrop should provide good support for public equity and bond markets Potential for the Fed to start reducing rates in the second half of 2024, which could restart the real estate investment cycle The recommendation is for investors to be deployed and looking for opportunities, rather than sitting on the sidelines  Investment Topic: Private Credit Funds  Also known as private debt or direct lending Growth in non-bank lending due to regulatory changes making it harder for banks to expand their balance sheets Private credit funds raise capital from investors and deploy it as loans and other debt instruments Can target different types of credit and debt structures Potential benefits include regular interest payments, 7-12% annualized cash returns, and portfolio diversification Risks include being locked into a long-term investment and fund manager selection being key

435: News of the Week 06/05/24

Wherever you stand on the political spectrum, you must admit that the Trump presidency has already demonstrated that it is going to do things differently over the next 4 years. Curiously, history shows us that presidents have very little to do with the state of the economy. Mostly, they are just in the right place at the right time or vice versa. Let's take Bill Clinton for example. Clinton's term coincided with the rise of the internet and the dotcom economy. Lucky for him, he got out before that bubble burst. During his 8 years in office, Clinton dismantled some of the most significant pieces of financial regulation we had and we did not see the negative implications of those choices until 2008. For example, the repeal of Glass-Steagall legislation occurred in 1999. Glass-Steagall was enacted by the United States Congress in 1933 as part of the 1933 Banking Act and separated commercial and investment banking. It restricted affiliations between banks and security firms. What does that mean, you ask? Quite simply, the repeal of Glass-Steagall made it possible for the big banks to become "too big to fail." Without this repeal, the global financial meltdown of 2007-2008 would not have been possible. But in November of 1999, Clinton declared "the Glass-Steagall law is no longer appropriate." Don't get me wrong, I'm not dissing Willy. My point is that most people judge presidents based on things with which they had little to do (ie. the dotcom era). The first George Bush got elected just as we were entering a recession...was that his faulty? Economist will tell you that he simply got caught in the cross-hairs of an oncoming recession. What if he was elected in 1992 instead of 1988? Now, in the case of Trump, we may actually being something a little different. If indeed he goes through with massive infrastructure projects, we will see a direct impact, for better or for worse, on the economy. The Trump effect already has made an impression. The dollar saw it's worst month in decades because Trump has repeatedly suggested that other currencies are undervalued. That necessarily means that Trump believes the dollar should be weaker and, going against the strong dollar policy that has been the rule since the Reagan administration, Trump is clearly advocating for the "weak dollar" and the markets see that and a sell-off of the dollar was the result. By the way, he wants a weak dollar to make our exports more attractive to other countries. Anyway, as an investor, the infrastructure projects have many implications. First, infrastructure projects mean inflation, almost by definition. Quantitative easing did not work well and you might wonder why printing billions of dollars would not have created inflation in and of itself. The reason is that the money was lent to banks. The bank, in turn, used it to improve their balance sheets and never really started lending the way the fed anticipated. Infrastructure projects, on the other hand, mean that the government is going to inject money directly into the economy. Think of the construction of bridges, etc. You put a lot of people to work along with manufacturers and ultimately, that money spills over into the rest of the economy as people spend their new earned money on things they want and need. That's why this kind of fiscal policy is referred to as helicopter money. If done, it will stimulate the economy and also INFLATION. So, as a real asset investor, we don't fear inflation because we are hedged against it. If you own rental property and inflation goes up, so do your rents. In fact, inflation will erode your debt and so having a mortgage is a great idea when inflation increases. How do interest rates behave through all of this? Well--everyone is so fixed on what the federal reserve is saying and doing. The reality is that interest rates have much more to do with bond markets than they do with the fed's yearly 25 basis point increase. So what determines what interest rates will be and...

040 : Interest Rates, Mortgages and Apartment Buildings with James Eng

Robert Kiyosaki told me that Rich Dad Poor Dad was written to be a promotional piece for his Cash Flow&nbsp;board game. He really did not write it with the intent of making money on the book itself.&nbsp;Well, that little promotional piece ended up being the number one best selling financial book of all time—not bad!&nbsp; Countless people that I know have been touched by Rich Dad Poor Dad and credit it with transforming their lives including me. Yet Robert describes the work as an “accounting book”. And if you go back and read it, it is! Assets, liabilities, and cash flow. That’s what the book is all about. The genius of Robert Kiyosaki is that he is able to explain accounting to the masses in a way that makes sense and is entertaining.You see, accounting isn’t that sexy but it is important.&nbsp;In fact, I believe that everyone should be required to take an accounting class in high school.&nbsp; Why? Because accounting is the basis of business and it also should be the basis of personal finance. Everyone should see their own personal finances as a business. You have money going in, you have money going out and what you have left is profit. Your personal financial statement should be viewed no differently than financial statements viewed by a business owner. You want to add assets and reduce liabilities and you want to make sure you have adequate cash flow. Makes sense right?&nbsp; If you do that, you might actually start behaving differently. Let me give you an example. I have a friend here in Santa Barbara who is a famous house designer and real estate investor. I went to his new house a few weeks ago and it was full of very expensive furniture. He also collects vintage cars like old Ferraris. Now you might think that all of this stuff is a waste of money. But…he actually buys these things because he wants to put them on his personal financial statements as assets.&nbsp; Think about it. If you buy a brand new Maserati today it will cost you over a hundred thousand dollars and start depreciating the minute you drive it off the lot. My friend, on the other hand, bought his vintage Ferrari for 75K several years ago and now it’s worth 400K. He could have gotten brand new furniture but he chose antiques that look great AND appreciate in value. Talk about a guy who understands accounting. Even his toys are real appreciating assets! He sort of got me thinking about buying that 1960s Porsche 356 that I’ve always loved. Anyway, it’s just another way to view the world and one that is really quite valuable. Accounting is fundamental to financial literacy. My guest on Wealth Formula Podcast this week understands this well. His name is David Norris and he’s a doctor with an MBA who has made it his mission to teach others financial literacy. Make sure to listen to the show!

110: What's Your Financial IQ?: David Norris, M.D., M.B.A

I remember being in medical school thinking that I wanted to be a surgeon. The idea of it appealed to me very much. I certainly had the personality of a surgeon. But there was something about which I felt very insecure.You see, growing up, my dad was about as white collar as they get. I didn’t learn anything about cars and never put up any shelves. The only reason to think I was any good with my hands at all was the fact that I excelled in hand-eye-coordination sports like ice hockey and table tennis (aka ping-pong).So as much as I loved the idea of being a surgeon, I had this big fear that I would be horrible at it. And, in the beginning, I kind of was! In medical school, all of the guys I liked were orthopedic surgeons. They were all into sports like me. The problem was that they were all carpenters at heart and I was NOT. I remember an orthopedic surgery resident handing me a saw to amputate a guy’s leg at the VA. Having that tool in my hands wasn’t pretty. Fortunately, the leg was suppose to come off anyway.Eventually, I realized that I was better at soft tissue surgery (no bones). I felt that I was better with fine movements than using power tools. That’s one of the reasons I decided to operate on brains.In fact, the first time I ever used a drill, it was in medical school drilling through someone’s skull on my neurosurgery rotation. I got pretty good with that drill after a while. It was the only power tool I liked.I remember getting confident enough practicing on people’s skulls that I bought a drill at the hardware store to put up some shelves in my apartment for the first time. Okay…so all of this sounds a little messed up I know. But it’s true. The good news for me was that there was a little bit of a learning curve getting my hands wet but pretty soon, I became a pretty darn good surgeon.In hindsight, the fear and anxiety of not being good at surgery was silly. As it turned out, becoming a good surgeon was really no different than becoming good at anything else in life—it took practice.In the case of most surgical procedures, you sort of do the same maneuvers every case. After my neurosurgery stint (which I left because of the hours), I spent some time doing cosmetic surgery. I watched the masters do hundreds of operations.There was one guy I watched that was particularly interesting to me because his results were so good and so consistent. What I noticed when I watched him carefully was that he did everything the same every single time. In fact, I counted about 6 discreet maneuvers that he did for every patient and wrote them down.When I started doing my own cases, I did those six steps and, from the very first case, my results were outstanding. During my career I did several hundred facelifts and did them exactly the same way every time.I got faster, more precise, and there were fewer and fewer wasted movements. My patients thought I was an artist. But the truth was that I was more of a robot than an artist. I am the least artistic person I know.This experience of mastery was profound for me. I felt like I had discovered a larger secret in the process of being a good facelift surgeon. The secret was that you could master just about anything if you cracked the code and did it over and over again the same way every time. That’s all that mastery really is.My guest on this week’s Wealth Formula Podcast is special. At a relatively young age, she has become a master at her craft and has shown the same kind of consistency with her financial outcomes as I did at my peak with surgical outcomes.Her name is Janet LePage and she is computer scientist who has cracked the code to successful multifamily real estate investing. In this episode, we will learn how she did it.BuckP.S. Don’t forget to sign up for our upcoming Wealth Formula Investor Meetup in Scottsdale, AZ. Click here to learn more! &nbsp;  Janet Lepage’s background Cracking the code then sticking to it Velocity and leverage Have a lot...

140: Multifamily Mastery and Infinite Returns with Janet LePage

Last week, I got a few emails wondering why I was sending out “scammy” emails from my friend Teeka Tiwari about investing in pot. Actually, I totally understand. If you don’t know Teeka, those emails might sound a little bit like snake oil advertisements.  As you know, I pride myself on not&nbsp;being a platform for internet marketers or for people raising capital that have no clue what they are doing. Early in my podcasting days, I was less careful about who I interviewed. I was more interested in the idea of exposure to broader alternative investment opportunities without necessarily advocating for anything.&nbsp;  As a podcaster, I thought that I was just providing education and that people would understand that and not jump to the conclusion that I was supporting a particular investment. The problem is that once you get behind the mic, whether you like it or not, you end up being a bit of an influencer. So, you have to be careful who and what you expose to your audience.  You see, there is a lot of noise out there and most of it is worthless. The challenge is to figure out who to take seriously. In my own experience, you cannot draw a direct correlation between marketing efforts and value.  In other words, there are individuals who market heavily who actually are worth listening to. Robert Kiyosaki is a good example. He is a master marketer. He is so good at marketing that you don’t even know that you are on the receiving end of it when you are. I recognize that. I also recognize that Robert’s books and philosophy have fundamentally changed my life and the life of hundreds of thousands of other people.&nbsp;  Newsletters are particularly difficult to assess. The very business model of a newsletter is to sell newsletters. But if you can’t make any money selling newsletters who is going to actually write them? How do you get more people to buy them? The answer is that you have to advertise.&nbsp;  Now, does that mean that a newsletter is not valuable because it is being advertised heavily? In my opinion, the answer is no. There are some really smart people writing newsletters with tremendous value who market like crazy. Marin Katusa and Doug Casey are just a couple of examples.  One of my favorite newsletters is Palm Beach Confidential written by Teeka Tiwari. The focus is cryptocurrency. I have been a subscriber to it for two years and, although the cryptocurrency market has been frozen for some time, I have really learned to appreciate how much time and thought Teeka puts into his work and his approach to speculative investments. I don’t agree with everything he says or recommends, but he works his tail off and is one of my primary sources for cryptocurrency news and information.    That’s why you have been getting emails from me about Teeka’s latest venture into the cannabis space. Teeka works under the umbrella of a marketing machine called the Palm Beach Research Group. I don’t have an opinion on most of what they do because I am only concerned with individuals that provide the underlying content of a given newsletter.&nbsp;            When I found out that Teeka had focussed on the cannabis space, I was happy to support him. A lot of people in Wealth Formula Nation, including myself, have been trying to figure out how to get exposure to cannabis investing while avoiding all the shady characters. That’s a tough job. But that’s the focus of Teeka’s latest venture and, if anyone can do it well, I think Teeka can.  Check out this week’s Wealth Formula Podcast as I interview Teeka on the topic of cannabis investing and you will get a sense for why I decided to support him.  P.S. If you want to find out more about his latest work on pot, click  HERE.

164: Should You Invest in Marijuana?

I am a simple guy. When I bowl, I throw the ball right down the middle of the lane. I couldn’t put any spin on it if I tried. My thinking is equally simple. In order for me to understand things, I have to break them down into smaller, easier to digest bites or I won’t understand. When I tell people that, they think I am joking. How does a guy who spent time as a brain surgeon call himself simple?&nbsp; Well, I am telling you the truth. I thrive on simplicity—by connecting a series of lines from point A to point B. If I can connect all the dots, I will get it and, in fact, I will be able to explain it to someone else so they understand it as well. If anything, that is my superpower. But I don’t like complexity.&nbsp; Too many moving parts means too many chances for error. So, whenever something looks a little different than what I am used to, it makes me nervous. Agricultural investing is one of those things that I don’t know much about. In theory, it sounds like a good idea. People have to eat, right?&nbsp; Investing over-seas?…I’ve done it before and I probably will never do it again. I like predictability. And, you can say a lot of negative things about the US, but it is still a land ruled by law and a government that will not be overthrown anytime soon. If someone screws you over, there is a good chance you will get retribution. It’s good to be an American investing in the United States. That said, I also have an open mind so I like to talk to people about things that I don’t understand or inherently feel comfortable about. After all, there was a time that I didn’t really understand multifamily real estate. Since then, I have pretty much bet my life on multifamily real estate and, while many uncertainties in life make me uneasy, my real estate investments do not. Real estate in the United States is what I know, but living in a bubble is not good either. Therefore, I make an effort to constantly listen to new things and, as a result, have changed my mind more than once and fine tuned my own investing philosophy. So, this week’s show is going to explore something I know nothing about: agricultural investing in Paraguay.&nbsp; Is it right for you? To find out, listen to this week’s Wealth Formula Podcast.

177: Agricultural Investing in Paraguay?

Robert&nbsp;Kiyosaki is the author of&nbsp;Rich Dad Poor Dad,&nbsp;the best selling financial book of all time. He went on to publish several books including Cashflow Quadrant which fundamentally changed my life. To say that&nbsp;Robert&nbsp;Kiyosaki has made an impact in the world is an understatement. He has helped to create a generation of entrepreneurs inspired by his writings. Many, including myself, discovered the very concept of entrepreneurship for the first time through his teachings. Pretty impressive right? Imagine making such an impact on the world. It sure sounds like a life worth living to me. And you know what makes it all the more inspirational? He was 50 years old when he published Rich Dad Poor Dad! Of course&nbsp;Robert&nbsp;was successful before Rich Dad Poor Dad. But he would be the first one to agree that the trajectory of his life really peaked after 50. This pandemic has taken its toll on many of us. While thousands have died, the emotional casualties will never be truly appreciated and is reflected, in part, by the social unrest we are seeing across this country. In that context, I am looking for something to be hopeful about today. To me,&nbsp;Robert&nbsp;Kiyosaki’s books were paradigm changing when I first read them. But now, as a 46 year old guy feeling a little blue, it’s his success later in life that has me feeling inspired. The truth be told, I don’t agree with everything&nbsp;Robert&nbsp;says these days, but he is someone that has earned the right to be heard. As a guy who does not routinely engage in hero worship, he has also earned my eternal gratitude. As such, it is my pleasure to present you with this week’s Wealth Formula Podcast featuring an interview with&nbsp;Robert&nbsp;Kiyosaki regarding the post-pandemic economy.

214: Robert Kiyosaki on the Post-Pandemic Economy!

Wealth Formula does, in fact, have a mathematical formula behind it.&nbsp; Wealth=Leverage(MassxVelocity) I believe the key to building your wealth is behind maximizing each one of these variables. Mass is simple. It’s how much money you invest. If you have more money to invest then you are going to create more wealth.&nbsp; Leverage is critical. Despite what some popular personal finance gurus say, significant wealth creation is almost impossible without the judicious use of debt. It serves to amplify your returns. After all, growing your wealth at 5 percent per year is quaint but it isn’t going to make you rich.&nbsp; Velocity might actually be the least understood and least appreciated variable of the Wealth Formula. Velocity is more complicated than a simple yield or cash on cash value although that’s part of it. Velocity is how quickly you get your money back in your pocket to redeploy into another opportunity. So, if you have money in one apartment building that refinances and you get your money out of the deal while maintaining your equity position, you can now recycle that same capital into another investment. Now you are invested in two assets at the same time using the same initial capital. Velocity is a function of time. If you can do the same work in half the time you are going to double your annualized returns. If you redeploy that capital into multiple opportunities you begin to see exponential growth of your wealth. While that might seem like a fairly simple concept, it’s not the way most businesses think. Even most value-add apartment syndicators seem blind to this concept. Every day that value is not created in a real estate project, it decreases the over-all return on investment. That’s the secret behind our  partners: Western Wealth Capital. It’s THE NEED FOR SPEED!!! If you have been part of our investor community or have come to one of our live events you have seen these concepts come to life and it’s truly remarkable! You see the math is quite easy. Once you know the variables it makes sense. The hard part is the execution and, in this regard, Western Wealth Capital is the Wealth Formula coming to life. To talk about this remarkable organization, this week’s podcast features an interview with David Steele, one of the principals and cofounders of Western Wealth Capital.&nbsp; As always Dave is not only brilliant but entertaining. Don’t miss this episode!

238: THE NEED FOR SPEED: The Western Wealth Way!

I am the author of the international best selling book “Seven Secrets of Eternal Wealth” and the host of Wealth Formula Podcast. I also happen to be a serial entrepreneur and a surgeon. My mission is to teach professionals how to take advantage of their finances and to invest outside of traditional stocks, bonds, and mutual funds. I believe that we need to keep our money out of Wall Street. They are there to take our money, not to make us money.

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