Wealth Formula Podcast

Buck Joffrey
  • 4.6 (407)
  • Investing
  • Weekly

Financial Education and Entrepreneurship for Professionals

  1. 5d ago

    582: Why A Students Work for C Students with Megan McArdle

    Robert Kiyosaki once wrote a book called Why "A" Students Work for "C" Students and Why "B" Students Work for the Government. I remember talking to him about this years ago and telling him that I thought the explanation was pretty simple. The C students had nothing to lose, so they took all the chances. The A students, on the other hand, had been programmed to respond to success like Pavlovian dogs. Study hard, get good grades, go to a prestigious school, get a great job. Every step along the way came with positive reinforcement. Why would they stray from that into the unknown? I can relate to this personally. I spent years in medical school and surgical training, getting rewarded for doing exactly what I was supposed to do. And for the most part, that system worked pretty well for me. But when I started getting involved in entrepreneurship, none of that really mattered. I had no business training whatsoever. I made plenty of mistakes, changed directions repeatedly, and somehow managed to build some successful businesses. In retrospect, I think my ignorance was actually an advantage. I didn't know enough to realize how many things could go wrong! I think this psychology also explains some of the irrational things we do as investors. How many times have you held onto a bad investment because you couldn't stomach taking the loss? I've certainly done it. And somehow, the more money we've already lost, the harder it becomes to walk away. This week on Wealth Formula, I talk to Megan McArdle, Washington Post columnist and author of The Up Side of Down, about why smart people make bad decisions and why our fear of failure can sometimes be the biggest obstacle to success. We also get into some interesting discussions about government policies that backfire, wealthy people leaving expensive cities, and what happens to highly educated professionals when AI starts doing work that once required years of training. Megan is a great thinker, and I really enjoyed this conversation. I think you will too.

  2. Oct 18

    581: Dante Andrade on How Yesterday's Hottest Market Might Be Tomorrow's Biggest Opportunity

    There's something fascinating about real estate cycles. In 2009, Las Vegas was practically synonymous with financial disaster. Home prices had collapsed, foreclosures were everywhere, and plenty of people thought the market might never recover. Phoenix wasn't much better. Florida had entire neighborhoods filled with vacant homes. Investors were running for the exits. Fast forward a decade, and some of those same markets had produced extraordinary returns for investors who bought when nobody else wanted to. The funny thing about markets is that the fundamentals often start improving long before the headlines do. And by the time everyone agrees that a market is hot again, much of the opportunity has already disappeared. I've been thinking about this a lot lately because of what we've experienced in Dallas. For years, Dallas was one of the hottest real estate markets in America. Population growth was exploding, businesses were relocating, rents were rising, and investors couldn't get enough of it. Then came the perfect storm. Too many apartments were built, interest rates skyrocketed, and property values fell dramatically. Some investors lost everything. Others, including us, have spent the last several years navigating a very difficult environment. But here's what's interesting. The things that made Dallas attractive in the first place haven't gone away. People are still moving there. Major corporations are still expanding. And after years of excessive apartment construction, the pipeline of new supply is finally shrinking. Sound familiar? It reminds me a lot of what happened in the aftermath of 2008. Not because the circumstances are identical—they certainly aren't—but because markets have a way of swinging from excessive optimism to excessive pessimism. And somewhere in that transition, opportunities emerge. In this week's Wealth Formula Podcast, I sit down with my longtime Dallas real estate partner, Dante Andrade, for a conversation about where we are in that cycle today. Dante has spent more than 15 years operating multifamily properties in Dallas. He's been through the boom, the bust, and now he's seeing some interesting changes on the ground that haven't necessarily made their way into the headlines. We also talk candidly about some of the mistakes made during the boom years, what separated the investors who survived from those who didn't, and why the next few years could look very different from the last few. I don't know exactly when the next great buying opportunity will arrive. Nobody does. But I do know that the best investment opportunities rarely feel comfortable when they're staring you in the face. That's what makes investing so difficult. And so interesting.

  3. Oct 11

    580: If America needs housing, why are landlords cutting rents?

    America has a housing shortage. You've heard it in practically every real estate investment pitch. We haven't built enough homes. People need somewhere to live. Therefore, owning apartments should be a pretty good business. So why have apartment owners in some of the fastest-growing markets offered free rent just to get people through the door the last few years? Because a national housing shortage doesn't pay your mortgage. Your property needs tenants willing to pay your rent, in your market, right now. That distinction matters—especially when you're trying to figure out whether today's discounted real estate is an opportunity or a trap. On this week's Wealth Formula Podcast, I talk with Edward Pinto, former chief credit officer at Fannie Mae and co-director of the AEI Housing Center. Ed challenges several assumptions that investors—and policymakers—take for granted. Among them: whether government-funded "affordable housing" actually adds housing, and why your apartment building's biggest competitor might be a single-family rental down the street. We also discuss something particularly relevant to investors today: properties financed with cheap debt in 2021 facing a very different refinancing environment. For owners, that can create a problem. For buyers, it can create an opening. But a discount alone doesn't make something a good investment. And waiting until everyone feels comfortable again has its own price. How do you separate a compelling purchase from somebody else's problem? That's where this conversation gets interesting.

  4. Oct 4

    579: Follow the People: What Demographics Tell Us About the Economy's Future

    If you want to know what happened to Dallas real estate, look at interest rates and the wave of new apartment construction. If you want to understand where it could be headed over the next few years, look at the people. Dallas–Fort Worth's population grew by more than 123,000 in just 12 months. Compare that with the roughly 33,000 new apartments completed in 2025. That's about four additional people for every new apartment. And this year, apartment deliveries are projected to fall to roughly half their 2024 peak. Those numbers matter because the conditions that hammered the market are changing. The construction boom created intense competition for tenants. Owners offered free rent and cut prices to fill buildings. Higher borrowing costs compounded the pain. But none of that stopped the population from growing. Now those apartments are filling, and fewer new ones are coming. The people are already there. The need for housing is already there. As the excess supply gets absorbed, that demand can translate into stronger occupancy, higher rents, and better cash flow. That's the opportunity I'm watching. A market's recent performance tells you what investors just went through. Population trends can tell you a lot about what comes next. Dallas can have a painful downturn and still offer a compelling investment opportunity at today's prices. In fact, the downturn is part of what makes the opportunity attractive. As investors, we spend a lot of time talking about the next Fed meeting or the latest jobs report. Those things matter. But so does a much simpler question: where are people going, and what are they going to need when they get there? That's why I wanted to have Ken Gronbach on this week's Wealth Formula Podcast. Ken is a demographer and author who studies how population shifts shape the economy. His interest in the subject started when he was trying to help Honda motorcycle dealers sell more bikes. The advertising wasn't working. Price cuts weren't working. He eventually realized that the generation entering their prime buying years was smaller. There were simply fewer customers. The same logic applies to apartments, senior housing, healthcare, and plenty of other investments. Follow the people. Understand what they need. Then look for opportunities before everyone else catches on. Ken and I talk about those opportunities, why he's optimistic about America, and why he sees demographic trouble ahead for China. He makes some bold predictions. Whether you agree with all of them or not, this conversation will give you a different way to think about where to put your money.

  5. Sep 27

    578: Everyone is chasing AI gold. What will the miners need?

    Imagine telling a farmer 200 years ago that someday, people would make a living helping businesses get found on Google. First, you'd have to explain Google, then the internet, then computers. And yet, when we talk about AI, we tend to assume we can already see all the jobs that will ever exist. We look at what people do today, consider what AI might replace, and start subtracting. The concern is reasonable. If a machine can do something you spent 20 years learning, that's a big deal. Telling someone to be excited about the future doesn't pay their mortgage. But there's another side to the equation, and history gives us a reason to consider it. As we moved from an agrarian society into an industrial economy, machines transformed work. Factories needed machinists. Railroads needed engineers. Electrical systems needed electricians. Entire careers emerged that previous generations couldn't have imagined. Then came the internet. It was a terrible development if you owned a video rental store. Newspapers lost classified advertising, and travel agencies faced customers who could book their own flights. Meanwhile, we got online retailers, web developers, digital marketing agencies—and people making a living talking into a microphone and sending you emails like this one. I think we need to leave room for the same possibility with AI. If a business can produce more at a lower cost, ideas that were once too expensive become possible. Something that required 50 employees and millions of dollars might become something a few people can build. That creates the potential for more businesses, more commerce, and jobs we don't even have names for yet. The transition won't be painless, but I wouldn't bet against our ability to find new things to do. As an investor, this feels a little like the California Gold Rush. Everyone wants to find gold—to own the next AI company before it becomes a household name. I'm just as interested in what all those miners will need. The new economy will need power, buildings, equipment, and transportation. There may be opportunities in supplying those needs even if we can't predict which companies will win. Transportation makes this particularly interesting for real estate investors. If you could work or sleep during your commute, would you live farther from your office? If fewer people needed parking, what could happen to that land? If moving goods became cheaper, would the ideal location for a warehouse change? Those questions get to the heart of what makes real estate valuable. Our job as investors is to see where the puck is going—and understand how technological change could create demand for something we can own. This week on the Wealth Formula Podcast, Marc Scribner of Reason Foundation joins me to explore autonomous transportation and what it could mean for real estate and the broader economy. We discuss what's happening, what's still speculative, and where investors may need to rethink their assumptions. Everyone is looking for the next big thing. I want to understand what the next big thing will need.

  6. Sep 20

    577: Your Money Is a Business w/ M.C. Laubscher

    When you finally start making some real money, you don't necessarily realize what that really means. In a way, you've just started another business. Think about it. The money you've earned and saved now has a job. Its job is to make more money. That makes you the CEO of the business of your own money. Now imagine you started a business with a few million dollars of your hard-earned capital. Would you hand it over to someone else to run, check in two or three times a year, and basically hope they were doing a good job? Of course not. You'd want to know how the business was performing. You'd look for ways to increase revenue, reduce expenses, minimize taxes, manage risk and make better decisions. So why do so many high-paid professionals treat their money completely differently? They hand it over to a financial advisor and essentially say, "You deal with it." I think a big reason is that the financial industry has programmed us to believe that investing and personal finance are too complicated for us to understand. I don't buy that. If you became a successful physician, attorney, business owner or other high-paid professional, I'm guessing you have enough intelligence to understand your own money. Probably more than the person managing it for you. That doesn't mean you should do everything yourself. I certainly don't. But there is a huge difference between getting professional help and outsourcing your financial brain. You should have your own investment philosophy. You should understand what you own and why you own it. You should understand your tax strategy, your risk, and where you're trying to go. Then your financial advisors, CPAs, attorneys, and other professionals become what they should be: experts helping you execute your vision. My conversation this week on the Wealth Formula Podcast with MC Laubscher got me thinking about all of this. We were talking about family offices and how wealthy families manage their money very differently than most high-paid professionals do. And the more we talked, the more I realized that the biggest difference may not be access to some secret investment. It's how they think about their money. They treat their wealth like a business. They are involved. They are intentional. They surround themselves with experts, but they don't simply hand over responsibility for their financial lives. You don't need hundreds of millions of dollars and a formal family office to start doing the same thing. There is nobody in the world who will ever care as much about your money as you do. So maybe it's time to start treating your wealth like the business that it is. This week's conversation with MC is a good place to start. - Learn more about Wealth Formula Banking at www.wealthformulabanking.com Get MC's new book: https://producerswealth.com/books

  7. Sep 13

    576: Is AI Masking a Much Weaker Economy? w/ Dr. Anirban Basu

    AI may ultimately change the world. It may also be covering up how weak much of the current economy really is. Both things can be true. We keep asking whether "the economy" is strong or headed toward recession—as if every part of it moves together. But what if significant parts of the economy are already contracting while an extraordinary spending boom in one narrow area makes the overall numbers look fine? That is more than an academic question. It changes how you invest. If economic growth is broad, today's resilience means one thing. If it depends heavily on government borrowing, asset-rich consumers, and a handful of technology companies pouring enormous amounts of capital into AI infrastructure, it means something else entirely. And AI doesn't have to crash for that to become a problem. The spending simply has to stop accelerating. Then there is real estate. The same conditions making many projects unworkable today are also preventing tomorrow's competition from being built. In multifamily, that creates an interesting paradox: the ugliest part of the cycle may also be laying the groundwork for the next opportunity. But only for investors who buy at the right basis and can survive the debt in the meantime. This week on Wealth Formula Podcast, I speak with economist Dr. Anirban Basu about what is really holding up the economy, where the headline numbers may be misleading us, and how investors should think about the risks and opportunities developing beneath the surface. Are we looking at a genuinely strong economy—or a weak economy being supported by a few unusually powerful engines? Those are two very different investment environments.

  8. Sep 6

    575: Should You Pay Off Your Home?

    That's a question I get a lot from investors, and the answer isn't as simple as the math might suggest. For years, the calculation was pretty easy. When mortgage rates were extremely low, borrowing money was cheap compared with the returns you could reasonably expect from investing that capital elsewhere. Even today, with mortgage rates above 6%, you can still make a mathematical argument for keeping a mortgage and investing your money instead—particularly if you believe your investments will compound at a higher rate over the long term. But let's take the math out of it for a moment. There's also a powerful psychological argument for owning your home free and clear. No mortgage payment. No worrying about whether your investment income will cover the house if your cash flow suddenly drops. Whatever happens in the markets or the economy, you know you have a roof over your head. For some people, that peace of mind is worth more than squeezing out a few additional percentage points of return. The obvious downside is that you may have hundreds of thousands—or even millions—of dollars of equity trapped inside your home. But what if there was a middle ground? In my recent conversation with a reverse mortgage expert, I learned some things about these products that genuinely surprised me. For example, did you know that with certain reverse mortgages, you can establish a line of credit and not use it at all? And while it sits there unused, the amount available to you can actually grow over time—potentially at a rate around 6% depending on prevailing rates and the terms of the loan. I had no idea. That creates an interesting possibility: owning your home without a traditional monthly mortgage payment while still maintaining access to some of the equity you've built up. Reverse mortgages have been around for years, but I realized there was a lot about them that I simply didn't understand. This week on Wealth Formula Podcast, I sat down with a reverse mortgage expert to separate fact from fiction and explore when this often-misunderstood financial tool might actually make sense.

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