Wealth Formula by Buck Joffrey

Buck Joffrey
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Financial Education and Entrepreneurship for Professionals

  1. قبل ٦ ساعات

    532: Pejman Ghadimi A New Paradigm for Buying Nice Stuff

    A few years back, I bought some very expensive sports coats. I wore them at first and enjoyed them. But over time, they kind of lost their luster.  As I have found often to be the case in my life, I don’t tend to care that much about fancy stuff—fancy jackets, fancy shoes. My true self regresses to a fairly simple jeans and flannel circa 1992 style—not expensive.  Realizing that these fancy clothes were just rotting in my closet, I recently sold them on a well-known second-hand site with only designer stuff. And I was shocked when I realized I was only getting 10 cents on the dollar for what I paid!  But then again, I guess I shouldn’t have been. Buying new fancy clothes has an extremely low likelihood of being a good investment. It reminded me of my good friend in town here who’s made millions of dollars in his life. He only buys nice stuff. But he almost never buys new things. The furniture in his house is incredible. Hundreds of thousands of dollars of mid-century modern gems. And he buys vintage cars rather than new supercars off the lot. He also has a 7-figure collection of rare watches. It's all really nice stuff.  The difference between what he is doing and what I did with those clothes is that he was investing while I was spending. While he’s bought millions of dollars of cars and watches, he’s always made money with them because he has focused on their future value.  Maybe I’m a bit dense, but I never thought about stuff this way before meeting him. And I still have to remind myself of this paradigm. It’s a different way to look at luxury and one that is certainly smarter when it comes to your pocketbook.  My guest on today’s Wealth Formula Podcast teaches people how to live this kind of lifestyle with cars and watches. I’ve interviewed him before, and I’m doing so again because so many of you have engaged in this way of buying nice stuff that I get regular requests to have him back on the show.

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  2. ٢ نوفمبر

    531: How to Identify a Good Real Estate Deal

    I grew up with a very different perspective on personal finance and investing than most. My parents were immigrants, and when they arrived in this country, they didn’t come with any preconceived notions of conventional financial wisdom. My father grew up dirt poor in India—that’s really poor and he had never even heard of investing as a kid. But he was blessed with a tremendous intellect and used it to rise from nothing to truly live the American dream. He came to the U.S. in the 1960s on an engineering scholarship and started working as a bridge engineer in Minnesota. When he finally began making a little money, he was confronted with the idea of investing for the first time.  Until then, life had always been hand-to-mouth. So he was approaching investing like an alien coming to this planet for the first time with an unbiased view on anything financial. With that perspective, the stock market didn’t make sense to him. He wanted cash flow that would immediately improve his quality of life. Intuitively, it felt smarter to buy “streams of cash” than to “gamble” on stocks. So with whatever money he could scrape together, he bought small rental properties. Nothing glamorous—mostly low-income houses and duplexes in Minneapolis. But guess what? It worked. Before long, he started making real money and quit engineering altogether. The apple didn’t fall far from the tree, I guess. Years later, I would also walk away from my career as a doctor to become a full-time investor. My father did really well. By the 1980s, he was having million-dollar years—that’s a lot now, but back then it was a lot more! But then came the ’90s. Like many others in the dot-com era, he got in over his skis. It seemed like everyone was making easy money in the stock market, and he got greedy.  Unfortunately, he sold a large chunk of his real estate portfolio and went all in on tech. And of course, we all know how that story ended—the bubble burst and so did his brokerage account. So there he was, in his 50s, starting over again after being obliterated by the dotcom bubble. He was terrified. But he knew what he had to do. He had to rebuild the same way he had built wealth the first time: cash-flowing real estate. Today, in his 80s, he’s still at it. To be clear, his real estate career wasn’t all smooth sailing either. This isn’t a fairy tale. It’s real life. For example, in the late ’90s, Alan Greenspan suddenly cranked up interest rates, creating a situation not unlike what investors faced post-COVID when the Fed raised rates at record speed.  That hurt him, but each setback brought lessons, and he kept moving forward with an asset class that he trusted. Eventually, he recovered. We were always comfortable, and my dad made enough to pay for 3 kids' college tuition and medical school for me while still living comfortably, traveling, and enjoying his life. He’ll be the first one to tell you that he only ever made money in real estate and that’s what he believes in. Now, why am I telling you all this? I’m telling you this story because it shaped the way I see investing. Unlike most, I grew up hearing that the stock market was risky and that real estate was the safer, smarter path—pretty much the opposite of what everyone around me grew up with. And despite my own challenges from the post-COVID rate hikes, I can still say without hesitation that focusing on real estate has served me better than following the traditional investing playbook. Still, no one wins all the time. Every investor loses money sometimes. Surgeons have a saying: “If you haven’t had a complication, you haven’t done enough surgery.” That’s as true for the best surgeons in the world as it is for the best investors. So what do you do? Sitting on cash guarantees you’ll lose purchasing power to inflation. Money markets barely keep up. For me, the answer is to keep investing with discipline. Real estate is my medium, and like my father,

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  3. ٢٦ أكتوبر

    530: A Tax Attorney Talks Tax Mitigation with Buck

    This week’s Wealth Formula Podcast features an interview with a tax attorney. While I’m not a tax professional myself, I want to drill down on something we touched on briefly that is incredibly relevant to many of you: the so-called short-term rental loophole. If I were a high-earning W-2 wage earner, this would be at the top of my list to implement—and I know many of you are already doing it. The short-term rental loophole is one of those quirks in the tax code that most people don’t even know exists, but once you do, it can be a total game-changer. Here’s why. Normally, when you buy a rental property, depreciation losses can’t offset your W-2 income. They’re considered passive, and they stay stuck in that bucket. But short-term rentals—Airbnb, VRBO, whatever—work differently. If the average stay is seven days or less and you materially participate, the IRS doesn’t classify it as passive. It becomes an active business.  That means the paper losses you generate can offset your ordinary income, even from your day job. Normally, you’d need a real estate professional status to get that benefit. This is the one situation where you don’t. So let’s walk through how it works. When you buy a residential property, the IRS requires you to depreciate the structure—the walls, roof, foundation—over 27½ years. On a million-dollar property, that’s about $36,000 a year. It’s a slow drip. A cost segregation study changes that. Instead of treating the property as one block of concrete and wood, it carves out the parts that don’t last 27 years. Furniture, carpet, appliances, cabinets, and even ceiling fans—those are considered 5-year property. In other words, you can depreciate them much faster. Now add bonus depreciation. Instead of spreading those 5-year assets out over five years, the current rules let you write off most of them all at once in year one. Here’s the example. You buy a $1,000,000 short-term rental and finance it at 70 percent loan-to-value. That means you put in $300,000 cash and borrow $700,000. A cost seg often shows about 30 percent of the property—roughly $300,000—is 5-year personal property. Thanks to bonus depreciation, you deduct that entire $300,000 immediately. So you put in $300,000 cash, and you got a $300,000 paper loss in the same year. In practical terms, you just deducted your entire down payment against your taxable income. This is what real estate professionals do all the time and why they often end up with no tax liability at all. In this case, it works for you as a W2 wage earner. And for that reason, I think its one of the most powerful tools out there for high paid professionals that is grossly underutilized. Remember, the biggest expense for most people is the amount of tax they pay—especially W2 wage earners. This strategy lets you use money you would otherwise pay the IRS to build a cash-flowing asset for yourself.  Listen to this week’s Wealth Formula Podcast to learn other ways to legally pay less tax! Transcript Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.  In general, W2 income is hard to defer and you can do things when you're self-employed or when you have a company or when you have stock gains or investment gains, real estate, those kinds of things. But I think wages, I think you're pretty much stuck with. Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast coming to you from Montecito, California today. Before we begin, I wanna remind you that there is a website associated with this podcast called wealth formula.com. Go check it out. And, uh, one of the things on there that I wanna draw your attention to is the, uh, accredited investor club, otherwise just known as. Investor club. Uh, this is where if you qualify as an accredit investor, basically that is not something you apply for,

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  4. ١٩ أكتوبر

    529: How to Get Yield from Bitcoin Safely

    Bitcoin is definitely volatile. If you told me it was going to go down by 50 percent next year, I would hesitantly believe you. However, there is no way you can convince me that Bitcoin will not hit $500,000 at some point within the next five years. Think about what’s happening: ETFs are everywhere, treasury companies are holding Bitcoin, there are rumors of central banks buying it, and even an American Bitcoin reserve. It is an asset that will go up. But it may go down before that, and that is unnerving. You should not put money into Bitcoin unless you commit to not touching it for 5–10 years. But then you face another problem—Bitcoin is like gold. Unlike apartment buildings, there is no rent, no cashflow. Other coins like Ethereum and Solana have mechanisms called staking that allow for yield. Bitcoin does not. Its beauty is that there are not a lot of moving parts. It’s a vault of security, and that’s pretty much it. Again, just like gold. There have been companies like BlockFi and Celsius—which are, indeed, traditional finance companies—that lost people’s Bitcoin when they went insolvent. But now there may be a way to get yield from Bitcoin while keeping it in your custody. That’s what we talk about on this week’s Wealth Formula Podcast, in addition to covering recent news and making predictions about Bitcoin’s price. Transcript Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.  When you're time locking your Bitcoin, it's fully self custodial, so you're never giving up those keys at any point, and that's what's so critical. Welcome everybody. This is Buck Joffrey, the Wealth Formula podcast. Coming to you from Montecito, California today. Before we begin, I wanna remind you there is a website associated with this podcast. It is called wealth formula.com. Lots of resources there, including the opportunity to join our accredited investor club. Uh, take the opportunity if you, um, are, you know, if you do make over $300,000 per year and, um. And, uh, have a net worth over a million dollars outside of your personal residence to join the club. It's free to join and it basically just allows you to see deal flow. That's pretty much it. That deal flow is not seen outside of, uh, the network because, uh, it's private. Private placements you've probably heard of. Right? So anyway, go to wealth formula.com, sign up for investor Club today we're gonna talk. About Bitcoin. Again, I know a lot of you still probably are seeing on the sidelines with this lately. The, uh, the price of Bitcoin has been extremely volatile. Well, it's not volatile compared to what it historically has been, but it's been volatile. But listen, I will say this, um, if you told me Bitcoin was going down by 50% next year. I would hesitantly believe you. Okay. But there is no way that you can convince me that Bitcoin will not at some point be worth $500,000 per Bitcoin at some point within the next five years. I mean, that could happen in two years, and then you could end up coming back. To a hundred thousand dollars. But I, I'm, I'm convinced that it ends up there. I mean, think about what's happening. ETFs everywhere, treasury companies holding Bitcoin, rumors of central banks buying it. An American Bitcoin reserve is on the table. It's already exists. It's just are they gonna actively buy it or they just going to confiscate it and hold it. Um, now that being said, you know. The volatility is a real thing. And so what I, I think is really important is that you should not put money into Bitcoin unless you commit to it for five to 10 years. Just buy it and forget it. Don't look at the price. Don't look at the price. I mean, what I will say is, you know, say a couple years down the line, if all of a sudden you're hearing people talking about how Bitcoin went crazy and it's, you know,

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  5. ١٤ أكتوبر

    No-Brainer Strategy to Start TODAY: Why Wealth Formula Banking Makes All the Sense in the World

    It’s been a while since I’ve talked about Wealth Formula Banking in detail, and I know we have a lot of new listeners who may not have heard about it yet. So today, I want to share a webinar that explains why I think this strategy is such a no-brainer. First off—what is Wealth Formula Banking? You may have heard of something called “infinite banking.” It’s a similar concept, but instead of focusing on paying your bills, Wealth Formula Banking is specifically designed to amplify your investments. My introduction to this idea came the same way you’re hearing it now—through a podcast. I kept hearing the phrase “be your own bank.” Honestly, I didn’t know what that meant, and I tuned it out until a friend finally broke it down for me. That’s when I had my aha moment. Here’s why. Normally, when you want to invest in a cash-flowing asset, you park money in a checking or savings account first. The problem? Those accounts pay you almost nothing—well under 1 percent. Meanwhile, inflation is running at 2–3 percent, so you’re guaranteed to lose money. That’s why my friend Robert Kiyosaki always says, “savers are losers.” Wealth Formula Banking flips that script. You’re essentially creating a special kind of cash value life insurance policy, where the money you put in grows at a virtually bulletproof 5–6 percent compounding rate per year. Not that sexy on its own, BUT…here’s the kicker: you don’t have to pull that money out to invest in your deal. Instead, you borrow against it from the insurance company’s general ledger at a simple interest rate. That means your original money keeps compounding inside the policy at 5–6 percent—even while you’ve borrowed against it to invest in cash-flowing assets like real estate. That’s the key. With a HELOC, when you borrow, your money stops working for you. With Wealth Formula Banking, your money never stops growing. So now you’ve got the same dollars doing two jobs at once: earning safe, compounding growth inside your policy and generating income from your investments outside of it. By simply routing your money through Wealth Formula Banking, you’re supercharging your returns. And here’s what makes it even more powerful: tax-free growth within the insurance account, real asset protection to shield your wealth from lawsuits and creditors. Plus, it includes a permanent death benefit, which means that in addition to building wealth today, you’re also creating a lasting legacy for your family tomorrow. It’s not magic—it’s math. And it’s the kind of smart arbitrage that can turn ordinary investments into extraordinary ones. Schedule a FREE consultation: https://wealthformulabanking.com

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  6. ١٢ أكتوبر

    528: Investing Is More Like Poker Than Chess

    Most people picture investing as a game of chess. Everything is visible on the board, the rules are clear, and if you’re sharp enough, you can see ten moves ahead. But markets don’t work like that. They shift in real time—rates change, policies flip, black swan events crash the party. That’s why I think investing looks a lot more like poker. In poker, you never know all the cards. You play with incomplete information, and even the best players lose hands. What separates them isn’t luck—it’s process. Over time, making slightly better decisions than everyone else compounds into big wins. That’s the same discipline great investors use. They don’t wait for certainty—it never comes. They weigh probabilities, manage risk, and swing hard when the odds line up. Risk isn’t the enemy. Fold every hand and you’ll bleed out. To win, you’ve got to put chips in the pot—wisely. Wealthy investors do the same. They protect the downside, but when they see an asymmetric bet—small risk, huge upside—they lean in. That’s what early Bitcoin adopters did. That’s what smart money did in real estate after 2008. And just like poker, investing is about knowing when to quit. Ego and sunk costs can trap you in bad hands, but the pros know when to fold and move their chips to a better table. In the end, both games reward patience, discipline, and emotional control. You don’t need to win every hand. You just need to stay in the game long enough for compounding to do its work. The amateurs play for excitement. The pros play for longevity. That’s the mindset you need as an investor and the reason I interviewed a former professional poker player on this week's Wealth Formula Podcast! Transcript Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.   One of the things that we feel like when we decide to make a bet on a thesis and we're thinking about, well, wait, what, what if it's like this? Or what if it's like this or whatever, is that we, we do have this sense that we get caught in those decisions, right? That we start something and that, uh, it's very hard for us to get out of that position. Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. Before we begin today, I wanna remind you that there is a website associated with this podcast called wealth formula.com. Lots of resources there, including the ability to sign up for our accredited investor club. Now, of course, that is a, uh, also known as a investor club and, um, basically you sign up there. And, uh, you get onboarded and you get an opportunity to see private deal flow that you will not see anywhere else. So go check that out. Wealth formula.com. Topic of today's show's a little different. Um, it's, uh, a little bit more, uh, about the cognitive side of. Of, uh, investing. So, you know, most people picture investing as sort of a game of chess, right? Everything is visible on the board. The rules are clear, and if you're sharp enough, you can see 10 moves ahead. But in reality, the markets don't really work like that. They shift in real time. You know, you got rate changes, policy flips, black swan events, all these things can crash to party. Uh, and that's why I think investing actually looks a lot more like poker and poker. You know, you never know all the cards you play with incomplete information. And guess what? Even the best players lose hand, you do lose in investing. That's something you have to understand. Now, over time, making slightly better decisions than everyone else compounds into big wins. And that's what makes a, you know, difference between like professional investors and people who lose money in the market. That's the same discipline. Great investors use. They don't wait for certainty because the reality is it never comes. They weigh probabilities, manage risk,

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  7. ٥ أكتوبر

    527: Is Franchising Right for You?

    If you look at the wealthiest people in the world, they almost always get there through business ownership or real estate. The only real exceptions are athletes and entertainers—and let’s be honest, that’s not a realistic path for most of us. We talk about real estate a lot here and through deal flow in our investor club. But today I want to focus more on business ownership. One way in is to start a business from scratch. I’ve done that a few times—sometimes it worked out really well, other times it was a total disaster. That’s the reality of startups. They require a certain wiring, an appetite for risk, and the ability to move forward without much of a safety net. It’s harder to do when you’re 52, have three kids heading to college and alimony to pay. Another option is to buy an existing business. The advantage here is that you’re stepping into something that has already worked, which gives you confidence in the viability of the business. But it’s not without risks. Some businesses depend heavily on key people or relationships that don’t transfer, and the ones that truly run themselves tend to be very expensive and often out of reach. The third option is franchising. It’s not risk-free either, but it does give you a roadmap. If you’re the type who can follow a proven system, your chances of success go way up. You’re not starting from scratch—you’re plugging into a model that’s already been tested and supported. For people who don’t necessarily have the renegade startup personality but want more than just a paycheck and index funds, franchising can be a great fit. We’ve talked about franchises before, but this week’s episode brings a fresh perspective from someone focusing on non-food franchises. I think you’ll find it really interesting. Transcript Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.  We've seen so many real estate investors saying, where's another tax advantaged alternative investment that I could participate in? More and more of them are migrating over to franchising. So that's been a huge trend I would say. Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. And, uh, before I begin, I wanna remind you that there is something called wealth formula.com. It is the home base of the Wealth Formula Podcast. So if you want to, uh, go check that out, check out the resources. One of the things you can do there is sign up for the, uh, credit investor club, AKA investor club. See, uh, opportunities gill flow that you might not otherwise see because they are private. As we get here later in the year, more and more opportunities particularly for, uh, potential tax mitigation, lots of real estate, uh, some other, uh, real asset funds that I think you may want to, you may wanna learn about. So go to wealth formula.com, sign up and um, get onboarded. This is a little building a little bit on, uh, last week, uh, when we talked about, you know, how the wealthiest people in the world. Typically, unless you're like an entertainer or a professional athlete or whatever, uh, you're typically going to get there through business ownership or real estate. Right? Of course, we talk about real estate here a lot and we have a lot of opportunities coming through on, um, on uh, investor club. But you know, today I wanna focus more on that whole business ownership concept because I think it's something that probably more people could be involved with. Um, you know, but if you do wanna be in business, so there are a few different options, right? So one is to start a business from scratch. I've done that a few times and I'll tell you sometimes it's worked out really, really well. And other times it was a total disaster. But that's a reality of startups. Um, they require certain. Wiring too.

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  8. ٢٨ سبتمبر

    526: The Wealth Ladder

    If there’s one thing that separates the truly wealthy from everyone else, it’s their relationship with risk. Not blind risk. I’m talking about conviction — the ability to see an opportunity before everyone else does, to lean into it while others are frozen, and to hold through the storm until the payoff is undeniable. The extreme example is Bitcoin. In 2012, when it was trading for less than the price of a cup of coffee, most people laughed it off as internet monopoly money. But a handful of people had conviction.  They understood the asymmetric nature of the bet — the downside was capped at the small amount they put in, while the upside was exponential. Those early adopters didn’t just make returns; many became billionaires. Of course, most people hadn’t even heard of Bitcoin in 2012, so that might not have even been an option for you. So let’s take another example that you almost certainly did live through. Real estate after the Great Recession in 2008 was radioactive. Nobody wanted to touch it. Yet those who bought when fear was at its peak ended up riding one of the longest real estate bull markets in U.S. history.  Data from the National Association of Realtors shows that home prices more than doubled from 2012 to 2022 in many markets. Imagine the rewards of being on the buy side in 2012. I’ve said it before and I’ll say it again: I believe we are in a similar scenario with real estate right now as we head into a descending rate environment following a real estate bloodbath.  Properties are severely discounted, and values are almost certain to go up as rates fall. But you have to see the big picture and not be scared. That’s not easy to do when everyone else is.  Real estate moguls and business owners are the ones most likely to take their wealth to the next level. Real estate is accessible to you — and so is business ownership.  Look at the Forbes billionaire list and you’ll see a pattern: nearly 70% of the world’s wealthiest people are business founders or owners. They didn’t get rich clipping coupons from the S&P 500.  They got there by creating or buying businesses that became valuable, saleable assets. The risk was obvious: most startups fail. But the payoff for the ones that succeed dwarfs anything you’ll ever get in your brokerage account. Now, the reality is that most high-paid professionals never play in this arena. They’re comfortable and don’t want to rock the boat. Some call it the “golden handcuffs” — you make enough money to feel comfortable, but that same comfort prevents you from ever taking risk. And you know what? That’s totally fine. Just know that doing your 9-to-5 and investing into your 401(k) is not going to create life-changing money. If all you’re looking for is life-sustaining money, keep doing what you’re doing. But ask yourself this question: What’s the life you dream about? If it’s the life you already have, then congratulations. If not, are you on a trajectory that even makes it possible to get there? If not, you’ve got to change course. My guest this week on Wealth Formula Podcast has done a great deal of research on the wealthy and has written a book based on what he has learned.

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Financial Education and Entrepreneurship for Professionals

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