Even really smart people are wrong on a regular basis. I see this all the time in health and longevity-related issues on my other podcast, . In case you are wondering…yes, I have become one of those middle-aged California guys trying to stay young at all costs. Not easy. But, I have to admit, the nerdy physician scientist type in me is having lots of fun with the science and enjoying the process of sharing it with my fellow Gen-Xers who are also fighting gravity with me. But getting back to the point of smart people being wrong—we see this a lot in medicine. In the 1960s, a lot smart people created the food pyramid that said we should be eating a lot of carbohydrates and very little fat. That’s quite the opposite of what recent science suggests. There was also a period in the 1990s when women were advised not to use hormone replacement because a study was thought to have suggested a link with breast cancer. A generation of doctors gave women bad advice based on what turned out to be a misinterpretation of data. On the economic side, we don’t have to go far back to see the Federal Reserve calling inflation “transitory” just before it skyrocketed for real. How could so many smart people be so wrong? And now, the Fed is likely delaying interest rate cuts because of higher-than-expected inflation numbers. Are they missing something here? My guest on this week’s Wealth Formula Podcast thinks so and his reasons are compelling. I have to say, this was one of the most interesting conversations I’ve had in a long time on the Wealth Formula Podcast and I HIGHLY recommend you listen to it. Show Notes: 07:28 How Does the Inverted Yield Curve Predict Recession? 18:53 Stirring the Economy by Misreading the Data

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.  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

As soon as I finished training, I opened up a cosmetic surgery business. When I say business, I mean a business not practice. From day one, it was my intention to create a brand that I could hand off or sell someday rather than to create a job for myself. I was also focused on cosmetics. Unlike the traditional way of growing a cosmetic practice, I wasn’t going to see insurance-based patients for 10 years and slowly build a referral base. Nope. I hit the airwaves and pounded the internet any true entrepreneurial business would do to make itself known. It worked and though I didn’t make much money that first few months, within a year I was pulling in six figures per month. It was my first entrepreneurial success. And while I rode that wave I felt invincible. It lasted for two years— right before the 2012 presidential election. At that time, I had just decided to buy a building for my business. That was shortly after buying a $2 million house which was a big deal for me just a couple of years out of training. In short, I was suddenly cash-poor. However, things had been going great so I wasn’t worried about the short-term cash crunch. I assumed I would make it back in short order. But something happened the October before that election. People stopped buying cosmetic surgery. It was weird—one day they just stopped. I learned later that this phenomenon often occurs in the luxury sector right before elections. People don’t like to make big decisions when they feel like there is uncertainty of any kind in the air. Whatever it was, it was killing me. Suddenly I had all these bills and mortgages and for a moment there, I was scared that I was going to lose it all. Luckily the election came and went and things normalized but I promised myself that I would never let that happen to me again. From that day forward, I would never rely on a single source of income.  And since that time… I have not. In fact, I don’t feel comfortable unless I have at least three solid sources of income. I think of my income sources like a three-legged stool. If there is a problem with one of them, I feel very unstable. I may sound paranoid, But, the funny thing is that I don’t think most people realize how tenuous their financial circumstance is. If you have a job and you lose it, would you be ok? I don’t care if you are a doctor or a small business person. No one source of income is bulletproof. So you have to have a plan B. If you listen to this podcast, you might already have this kind of mindset and you might already be looking for opportunities. And I have to say that this week’s episode of Wealth Formula Podcast really got my wheels turning. If you have any extra space in your house or an empty lot somewhere, you could be sitting on a goldmine.  Find out how you might be able to turn some useless space into some serious cash by listening to my interview with the co-founder and CEO of  Show Notes: 11:18 How to Make Money with Your Empty Space 15:51 How They Mitigate the Risks and Liabilities 22.43 Limitations and Law Restrictions 26:01 How Far Has neighbor.com Gone? 27:54 Have Multifamily Investors Tap Into This Space?

The cost of real estate transactions affects everyone regardless of whether you invest in real estate or not. Why? Because the cost of the transaction will ultimately be included in the price of the real estate. One of the biggest costs in a real estate transaction is the commission paid by the seller. In the last several years, the way that commissions have worked at the residential level is that the seller’s broker collects the commissions and shares them with the buyer’s broker. However, that paradigm is about to change as part of a massive settlement between home sellers and the National Association of Realtors (NAR). The issue at hand: sellers don’t think they should be paying for brokers who are not working for them. The courts have agreed and in order to avoid massive ongoing litigation the NAR has decided to change the way it does business. These changes will affect real estate investors and homeowners alike. Tune in to this week’s Wealth Formula Podcast to get all of the juicy details on how! Show Notes: 04:17 The Conspiracy 07:14 The Lawsuits 10:49 The Changes 19:31 The Implications on Real Estate Prices 23:35 The Result? 24:36 The Opportunities 29:16 Will there be less realtors?

Last week I sent an update on the which currently has a live tranche. The email prompted a number of questions that I answered and also thought it would be useful for my partner, Daryl Heller, who is also the majority owner of the operating company, to join the podcast and discuss the world of ATM investing once again. This is a sophisticated business model that is worth understanding. Paramount is one of the biggest players in this space and Daryl offers a lot of incite that might be useful to you—even if you decide to go buy your own ATMs instead of investing in a fund. Show Notes: 04:19 Why ATMs? 05:47 Who’s using ATMs? 07:32 Will ATMs survive a cashless society? 11:24 How do ATMs make money? 16:18 Licensing 19:24 Operator behind the WF Velocity Fund - Paramount 21:45 What are the investors investing in? 23:03 What determines whether or not there is a tranche? 26:03 Returns for the fund 28:35 Consistency through COVID 31:48 Due-diligence

In the long run, math is pretty much always right. That’s why insurance companies are so profitable. They make predictions using the law of big numbers. Math can predict pretty much anything. Even Sports! I just re-watched the movie Moneyball about how the Oakland A’s made an improbable run in major league baseball in 2002 by leaning less on star players and heavily on analytics generated by a nerdy Yale economics major. The genius of applying mathematical principles isn't confined to the boardroom or the baseball field; it seeps into our everyday lives in ways we might not initially recognize. Beyond the high-stakes world of sports and finance, mathematics offers tools that can help us navigate daily decisions and challenges, often without us even realizing we're employing them. Math doesn't just predict outcomes; it helps us make more informed decisions, maximize our resources, and enhance our daily lives. Math isn't just about numbers and equations; it's a vital tool that, when applied, can solve practical problems and make everyday tasks easier and more efficient. And of course, math can and should be used in your investment choices. This week’s guest on the Wealth Formula Podcast explains how to do this and more. Show Notes: 06:04 Are people bad at predicting the future? 09:10 Can technology help us predict the future better? 11:46 Why is it so hard to predict the future? 14:16 How do Psychics know about your life? 16:42 Base rule 21:02 When should you avoid using math? 22:39 Math for medicine

I feel like I am going through another major transition in my life. I turned 50 last September—a fact that I deliberately chose not to publicize.  I hate to admit it, but much of my behavior is stereotypical divorced midlife crisis stuff. I got a Ferrari, I’ve been working out incessantly and…I’ve been considering adding publicly traded equities to my portfolio. The last one might be the biggest surprise to you and to me. For the last decade, Wealth Formula has consistently bashed the stock market. What changed? Well…the last two years have not been particularly kind to me financially and it is because of my 80% real estate investment portfolio. Rising interest rates disproportionately affect the real estate markets because they are so heavily dependent on debt. That’s why economists keep talking about how the economy continues to fare well while we real estate investors feel like it's 2009. Don’t get me wrong. I am not going full-on stocks, bonds, and mutual funds. I have made my money in real estate and that will continue to be my alpha. And despite a down market, I am WAY ahead of where I would be, had I been a traditional investor using a money manager. No doubt about it, real estate has made me wealthy over the last 15 years despite the recent hiccup. I’m just thinking about taking lessons from institutional investors. Perhaps it's middle age, but the idea of a more balanced, less volatile portfolio sounds appealing. Right now, I have nearly zero exposure to publicly traded stocks. Maybe that number should be closer to 25%? Maybe I should be in some kind of “all-weather portfolio?” Remember, personal finance should be personal. You’ve got to think about your goals and where you are in life. You have to treat your investment portfolio like you are deploying money for your own family office. Zulfe Ali knows a lot about risk and managing portfolios. He does that for family offices and high-net-worth individuals like you. He’s different from your usual financial advisor because he recognizes the importance of alternative assets in a portfolio—something he learned from running a multi-billion dollar sovereign wealth fund in the Middle East. On this week’s episode of Wealth Formula Podcast, I speak to Zulfe not only about investment strategy but also get his take on the current economy. Having a guy with his credentials giving us a market update is extremely valuable so make sure to tune in! Show Notes: 13:39 What’s been going on with the economy? 16:15 Why the interest rate increase did not result in a recession 19:02 Outlook for interest rate 26:35 The inverted curve 35:11 Wealth preservation 41:58 How does Zulfe approach high-level portfolios?

In the latest surge of technological evolution, one titan stands out, reshaping our landscape with the silent swiftness of a revolution: Artificial Intelligence, or AI. It's a term that sparks a spectrum of emotions, from exhilaration at the dawn of a new era to trepidation about the unknowns it brings along.  As we stand on the precipice of this bold new world, it's impossible not to marvel at how AI has already begun to weave its threads into the fabric of our daily lives. From the simplicity of asking Siri for the weather forecast to the complexity of algorithms that predict stock market trends, AI's footprint is undeniable.  Yet, what truly fascinates me is the myriad of opportunities it unfurls for us as investors. It's not just about the automation of tasks or the efficiency of operations; it's about the doors it opens to new markets, the insights into consumer behaviour, and the predictive power that can guide our investment strategies with unprecedented precision. Reflecting on this, I'm reminded of a story that perfectly encapsulates the transformative power of AI. Just a few years ago, a startup leveraged AI to analyze satellite images, predicting crop yields with such accuracy that it revolutionised the agricultural commodities market.  Investors who could once only rely on historical data and often inaccurate forecasts found themselves with a crystal ball, giving them insights that were previously unimaginable. This is the power of AI - turning the opaque into the transparent, the unpredictable into the foreseeable. And yet, as we chart our courses through these uncharted waters, questions loom large. How do we navigate the ethical quandaries that AI presents? What does the future hold for jobs, and how do we ensure that this technological boon does not become a societal bane? How do we, as investors, harness AI's potential responsibly and effectively? To delve into these questions and more, I'm thrilled to welcome Professor Russell Neuman, a leading mind from NYU, specializing in media technology and its profound impacts on society. Russell's deep understanding of the digital age and the evolutionary path of media, coupled with his insights into AI, makes him the ideal navigator as we explore the intersections of technology, media, and investment in the AI epoch. So, join us as we embark on this journey, decoding the complexities of AI and uncovering the golden opportunities it presents to the astute investor. Welcome to a conversation that promises not just to enlighten but to illuminate pathways to prosperity in the age of Artificial Intelligence. P.S. I asked ChatGPT to use my “voice” to write this email. Do you think it sounds like me? Curious what you think. Show Notes: 03:40 How does AI work? 09:23 The dangers of AI 14:10 The benefits of AI 19:27 The future of AI 21:48 Singularity

“I’m from the government and I’m here to help.” Ronald Reagan described those as the most dangerous words in the English language. I generally agree with the Gipper who I have fond memories of extending back to the 1980 presidential election that I watched with interest as a kindergartener. When the government gets too big, it gets dangerous and sloppy, and it costs too much. And like other monsters, it’s got to eat. It does this through taxation.  Now if that monster was lean, mean and efficient, it would be less scary. But this one is fat and keeps growing. Government begets more government which creates more cost and inefficiency. What’s a better answer? Well, ideally, you would break the whole thing apart and put it back together in a way that makes sense. Instead, a lot of the benefits that we get from those taxes are taxed themselves making you wonder what the point was in the first place. When you take a step back and see what’s going on, it’s pure insanity. And to make you crazy, this week’s guest on the Wealth Formula Podcast exposes this problem with gory details.  Show Notes: 08:03 Robbing Peter to pay Peter 12:33 Where is the inefficiency coming from? 15:54 The origin of the tax and return scheme 17:51 How does this affect behavior? 19:48 How can we fix it? 21:45 The origin of the mortgage market

When I was fresh out of surgical residency and started to make some money, I started looking for advice on what to do with it.  One of the questions I had was about life insurance. I was a newlywed and had a baby on the way (now she’s in high school by the way). So, I started asking the guys I was working with if I should buy term or permanent life insurance. One of the younger surgeons was a bit of a know-it-all. He had a lot of advice about everything and most of it was not good. His facelifts weren’t good either as I started revising them just a few months later. Nevertheless, I listened to what he had to say and he told me quite confidently to “buy term and invest the difference”. In other words, don’t buy permanent life insurance. Stick to term life insurance and, with the money you don’t spend on permanent life insurance, throw it into the stock market. The older guy had very different advice. It was 2009 and he was planning to retire until the financial meltdown kicked his butt. He told me he wished he had bought more permanent life insurance because that was pretty much all he had left.  And while his viewpoint was thought-provoking, I felt like I needed to do the opposite of whatever this guy suggested because I didn’t want to end up like him. So, I ended up buying term and didn’t think about it again until a couple of years later when I had started my own practice and was making a lot of money. At that time, I was part of a mastermind with a bunch of high-net-worth business people. At some point, life insurance came up and several of them talked about premium-financed permanent life insurance policies. It occurred to me that a lot of high-net-worth people actually were buying permanent life insurance despite what that know-it-all young surgeon told me.  So, I decided to look back into my options. What I discovered was that both of those doctors who were giving me advice viewed permanent life insurance as something that it did not need to be: a poor-yielding but stable investment. The reason for that was that most professionals only get to see poorly designed policies that are primarily created to maximize commissions for those who sell insurance. What they think of as permanent life insurance is not the permanent life insurance used by the rich. PERMANENT LIFE INSURANCE MEANS DIFFERENT THINGS FOR THE MIDDLE CLASS THAN IT DOES THE RICH. The policies that the high net worth group had were designed very differently and optimized for investment purposes. In fact, in the high net worth world, these policies have a special name: LIRPs. That stands for life insurance retirement plan.  Permanent life insurance in this world plays a role in not only risk mitigation and estate planning but also retirement income and asset protection. The more I learned about these strategies, the more they became no-brainers for me. The guys who taught me the most about this stuff are Rod Zabriskie and Christian Allen. They designed all my policies and now design policies for many of you as our Wealth Formula Banking partners. I especially appreciate these guys because they approach these concepts with an open mind. Where some Life Insurance Producers push one product or another for various reasons, these guys have all sorts of options that fit different types of people with different goals and objectives. Recently, they have seen a significant uptake in interest in life insurance products. Why? Well, the markets have been hurt by rapidly rising interest rates and people are looking for safe harbors. All you need to do is look at the Great Depression to see that permanent life insurance has been seen as a major safe harbor throughout history. Given the uptick in interest in these products, I decided to have Rod on to remind people of what these products are and why various permutations of these strategies are right for different types of people. As always, I found this to be a very interesting conversation and it left me wondering why I’m not doing more of this stuff right now. Show Notes: 09:12 Wealth Formula Banking 19:03 The Wealth Accelerator 26:55 Battle of the Two Tribes 34:41 Rule of 72 42:20 Does life insurance get more expensive as you get older?

Retirement means “ceasing to work”. In my case, retirement will describe me when I’ve died. I understand retiring from a particular activity. Like how I retired from the practice of surgery about eight years ago. But global retirement sounds dire. It is like admitting that you are of no real value to the world anymore. That your contributions are no longer of benefit to humanity. I’ve always believed that the universe ultimately pays you what you deserve. If all you’re doing is playing golf, you aren’t worth a dime. And imagine all of that knowledge, expertise and wisdom you accumulate over the years. You’re just going to waste that? You’ve got to figure out a way to use it and keep going. At least that’s my philosophy. As you may know, I have a podcast on health and longevity called . I want us all to feel like 50 is just the beginning and I don’t mean the beginning of the end lol. Get inspired. Dreams are not just for the young. As Bill Gates says, people grossly overestimate what they can accomplish in a year and grossly underestimate what they can accomplish in five. Ok…that’s my rant for today. Let’s get back to reality. I know people need money when they get older and social security is one of the sources. To be honest, I don’t know much about social security so I thought I would interview someone on the topic. My guest this week on Wealth Formula Podcast was on the “60 Minutes” show recently uncovering social security scams so I thought he might be a good person to listen to. So… if you’re interested in the money the government owes you when you get older and may or may not get it, make sure to tune into the show. Show Notes: 04:52 How exactly does social security work? 10:56 Social security: a scam? 20:02 Will social security disappear? 21:36 Clawbacks of social security 29:05 Money Magic

The two most powerful motivations for behavior are fear and greed. If you haven’t thought about that before paying attention to the kinds of messaging you hear especially in the alternative asset podcast ecosystem? At the risk of offending gold bugs, how many times have you heard someone who sells precious metals on a podcast talking about the demise of the United States and the inevitability of the Zombie apocalypse? Think that’s just a coincidence? A couple of weeks ago, I had on a gentleman who wrote a book on Ray Dalio, the legendary hedge fund manager whose fund has not beaten the S&P 500 in years. Turns out that Mr. Dalio has been predicting the collapse of the American economy for three decades now. Maybe he believes it. I don’t know. But one thing’s for sure, it works very well for Ray Dalio’s company. Ultra Wealthy families don’t care about big returns. They care about not losing money. Beating the market is just an added plus. If Ray is telling people that the world is going to hell and he manages money then maybe he knows how to best protect it? That’s the logical conclusion, right? There are also people out there talking about the need for a second passport in case the US implodes. After all, we have a divisive political system and enormous amounts of debt.  Again, maybe I’m missing something, but the US is still the biggest economy in the world with by far the highest GDP. We have the best Universities in the world and the strongest military. And if we can get through 1968, we can get through 2024. So, in my humble opinion, a plan B is not going to get you out of harm's way. Because if the US goes down, there will be no place to hide. But, there are certainly other reasons to get a second passport. Maybe you just want to make it easier to travel to certain countries. Maybe you want to benefit from the low cost of healthcare. Or, maybe you just want to diversify your wealth and mitigate currency risk. If you’re willing to move to Puerto Rico (which I am not), there is even a huge potential tax play. My advice…whatever you do, just don’t get scared into it. It certainly sounds kind of fun to be a Jetsetter and maybe there is sound financial reason to do it as well. Consider it, but for rational reasons. With all that being said, check out this week’s episode of Wealth Formula Podcast and learn the ins and outs of foreign citizenship. Let me know if you decide to do it! Show Notes: 08:24 Why consider dual citizenship? 11:17 Benefits of an EU passport 12:48 A second passport for retirement and healthcare 13:54 Financial benefits of dual citizenship 17:10 The challenges 19:17 Dual citizenship by relationship

The challenge with investing is that you can do everything right and still lose. Unfortunately its supposed to be that way otherwise everyone would take the biggest bets possible all the time and always win. That’s just not reality. In good times, it is very hard to anticipate what could happen if the unexpected occurs. Over the last 24 months, we saw interest rates rise at a slope never before seen in the US economy. This was just a few months after the Federal Reserve called inflation “transient” signaling that it would not raise rates. In hindsight, the subsequent rise in interest rates to curb inflation is all clear now but I don’t remember hearing anyone talking about the scenario before it happened. As a result, many including me lost money and continue to hold our breath as rates start to level out. As much as we hate it, this is the way the system is supposed to work. The thing is, all of what we are experiencing is going to happen again in one shape or another. Over the next few years, those with ice in their veins will buy when everyone else is scared. And hopefully, they will remember what this feeling we all feel now feels like and sell when things feel too good to be true. As Sir John Templeton put it, the most dangerous words for an investor are “this time, it’s different”. It would be easier to accept this fact of investor life if it applied to the big boys as well. But it doesn’t. 2008 was the extreme example. The big banks lost big bets. Had those bets come to fruition, they would have made lots of money. But they didn’t win those bets. And the taxpayer paid for their losses and all of the lawmakers said it would never happen again. But it did. In 2023, the taxpayer stepped in to bail out multiple regional banks. This time, those banks weren’t even being irresponsible. They were investing in a way that would be deemed conservative. Yet, they too were the victim of unparalleled rate hikes by the Fed. Lucky for them, they were banks and not individuals like us. What happened with those regional banks and is it likely to happen again? My guest on Wealth Formula Podcast this week is a brilliant Professor at Stanford who was brought in to investigate the regional bank failures in Silicon Valley. When she talks, the government and people like Jamie Dimon listen. See what she has to say about the current state of the banking system and how it affects you. Show Notes: 08:29 What is wrong with the banking system? 11:34 What went wrong in Silicon Valley? 13:58 How do FDIC rules work?  24:20 What should have been done in 2008 to prevent this from happening again? 28:28 Will what is happening to Silicon Valley happen to the rest of the country? 31:44 Is it still risky out there?

My social life sucks. I moved to Montecito in 2017 from Chicago a married man with 3 children. When we got here, I didn’t know anyone.  Luckily, I had my family and was plenty entertained by my three little girls. My now ex-wife also served as social coordinator to make sure we had things to do. Then with beginning of Covid, my marriage came to an end. Since moving to Montecito, I had been working from home on businesses that had become very successful but I hadn’t worked on my social life at all because that had been outsourced. So I entered Covid isolation with almost no community or life outside of business. Needless to say, it was lonely. The only good thing that came of it was a lot of success in those businesses that occupied my time. I used Covid as an excuse while it lasted but the truth is that my social life still sucks. I have not been successful in that aspect of my life. So, I’m not a good person to tell you how to create a successful social life and will not be writing a book about it anytime soon. So why am I telling you this? Is this some kind of suicide letter? No. I’m too busy with my longevity podcast for that. What I’m trying to do is to simply illustrate that you can be wildly successful in one aspect of your life and an abject failure in other parts. The funny thing is that for anyone successful, it is very difficult to truly assess what they are good at and what they are not from the outside. Take a look at Tony Robbins. Is he a success? He’s a great communicator. He’s helped a lot of people and made a lot of money. But he’s been married multiple times and who knows how his relationships are with his children. But if Tony Robbins wrote a book on marital a bliss, it would be a New York Times bestseller. Why? Because he’s Tony Robbins and he is a successful guy that people want to listen to. But, like the rest of us, he’s far more successful in certain parts of his life than others. Similarly, hedge legendary hedge fund manager Ray Dalio has written multiple books on “principles” for investing and for life. Dalio is certainly as qualified as anyone else to talk about money. But why would we assume that his success translates over to anything else? In fact, there are plenty of people who have worked with and for him who consider his principals outside of investing to be a failure at best and downright fraudulent at worst. So why would people buy books by Ray Dalio that don’t involve money? Because, again, he’s a hugely successful person and people want to learn how to be successful. The challenge for everyone is to look at any of these god-like figures and to understand that they are human with all sorts of flaws. And while we may be able to learn some things from them in which they excel, we shouldn’t translate success in certain parts of their lives to suggest that they’ve got it all figured out. My guest on Wealth Formula Podcast today wrote a book on Ray Dalio that tells the story of a man who may be quite different that the image he has created for himself. It certainly has pushed a button for Ray Dalio as he has threatened to sue the author and has thrown back fiery accusations about him. It’s a fascinating story that you are not going to want to miss. Tune in to this week’s Wealth Formula Podcast as I interview Rob Copeland, the author who has thoroughly pissed off Ray Dalio! Show Notes: 00:08:29:06 Who is Ray Dalio really? 00:13:15:03 What made Ray Dalio a successful hedge fund manager? 00:14:53:09 Alpha vs Beta returns 00:18:05:22 The Dark side of Ray Dalio 00:22:42:19 Can Ray Dalio really predict the zombie apocalypse? 00:27:12:16 Getting sued by Ray Dalio

As you may know, I have three daughters aged 14,11 and 8. The oldest, Camilla, is now in high school. For those of you who have been listening for me for a while, yes, that was the little girl who did an introduction for episode 100. We are all getting older by the minute. Anyway, recalling that it was at around her age that I began to think about the world in a greater context than simply ice hockey and food, I have begun trying to have more meaningful conversations with her. Recently, I decided to talk about the political science definitions of conservative and liberal to help her start understanding the basics of political theory. I told her that conservative ideology values the individual and advocates for small government. I quoted Ronald Reagan who once said, “The nine most dangerous words in the English language are ‘I’m from the government and I’m here to help’.” Liberal ideology, on the other hand, puts greater value on the collective whole of a people over the individual. In such a belief system, the emphasis on equality trumps individual achievement and focuses on the redistribution of wealth via government services to serve everyone. While you know that I have a bent toward conservative ideology, I did not try to persuade her one way or another. I was just trying to teach her the difference. My goal for her was to simply think about her own opinions and share them with me. But she wouldn’t. She got very uncomfortable. And, when I pushed her on why, she admitted that it had to do with the fact that her mother and I don’t agree on some of this stuff. The funny thing is that while her mother and I certainly do disagree on some political issues, we never fought about it and it was never an emotional issue. But these days, it seems that political disagreement means that you can’t be friends or family anymore. Disagreement has been replaced by disagreeable. That’s a shame because these discussions are incredibly valuable for people to discover their own true values rather than to simply cling to tribal political party instincts. Sure I’m a conservative, but I have plenty of disagreements with the current “conservative” Republican Party. For example, the party has shifted away from fiscal responsibility, free trade, and civil liberties—all of which are tenets of true conservative ideology. Having more open discussions about politics without emotion would be good for everyone. It would also help people to understand what is happening on the global stage.  While America has been the Mecca for the individual since its inception, it is starting to move in the direction of a more liberal global arena that values personal achievement and success less than the whole. The growing popularity of political figures such as Bernie Sanders in the last election cycle supports that. My guest on the Wealth Formula Podcast is a best-selling author who has been sounding the alarm on the coming of this new world order where you will have everything you need but nothing will be yours. Is she being an alarmist or is this a real concern? Decide for yourself on this week’s episode of Wealth Formula Podcast. Show Notes: 00:08:52:20 Movements that are trying to stop personal wealth creation 00:12:18:02 Players in the financial world war 00:14:56:08 Private ownership = wealth creation 00:17:16:01 How is Wall Street working against us? 00:24:13:18 Thoughts on the wealth tax

For those of you who have participated in our self-storage offerings in the past with Reliant Real Estate, you know that you can make a lot of money in this space. One of our deals, while not planned this way, nearly doubled investor equity in less than a year. Those kinds of returns are sexy but self storage itself is NOT sexy at all. It’s just where people keep there stuff when there’s no room for it in the house. But in times like these, boring is good. In fact, when it comes to business, boring is a very good quality in all seasons of the business cycle. Self-storage facilities have historically shown resilience during economic downturns. Unlike other real estate investments, they often experience steady demand even in challenging economic conditions, as people downsize, relocate, or seek temporary storage solutions. Everyone needs storage space whether in urban areas where living spaces are smaller, or in suburban and rural areas for personal or business use. And from the standpoint of the owner of these facilities, it takes advantage of one of the major characteristics of mankind—inertia. Do you have stuff in storage? I do. How badly do I want to move that stuff to another storage facility in order to save $10 per month? Not nearly enough. That’s why those rents creep up over time without losing much in the way of occupancy. It’s a great business model if executed well. has done it well for several years and, although I am not partnering with them on their , I am investing in it and promoting it for them as I think it represents a really good opportunity with minimal risk. This week on Wealth Formula Podcast I wanted to make sure I got Kris Benson, Reliant’s Chief Investment officer on the show because there are just a few weeks left before the fund closes and I wanted to remind you of that while reviewing some of the key elements of this unique real estate asset class. Show Notes: 00:04:04:09 The story of self-storage 00:06:56:17 The inertia behind the self-storage business 00:13:51:17 How has the run-up of rates and inflation affected self-storage? 00:16:55:15 How does debt work in self-storage 00:19:51:02 Institutional vs. mom-and-pop 00:23:12:10 The current reliant fund opening: https://reliantfund4.com/

Wealth Formula Nation, Happy New Year! I have a feeling that 2024 is going to be a good year for us. I think we are going to pick up quality assets at a discount like it's 2012 and liquidity will come back to the real estate markets. I’m also eager to develop our own investor platform into a more diverse investment source. Real estate will always be our bread and butter but there will also be other opportunities in which to invest that will be vetted by our world-class due diligence team. You’re going to new opportunities in sectors like commercial aviation and even business mergers and acquisitions led by Zulfe Ali who used to do that for a sovereign wealth fund. With the New Year, you might also consider whether you might want to start a business of your own. As you know, I am a strong advocate for business ownership. And while doing a creative start-up is not everyone’s cup of tea, there are an increasing number of ways to get involved with business utilizing the skills you do have. One of those options is franchising. We’ve talked about franchising on this show before but I recently met a guy who wrote the most popular book on franchising ever published.  He didn’t try to sell me on franchising at all. Frankly, I left the conversation thinking he probably talked me out of it. But that’s also why the coaching clients he does have seem to do as well as they do. Is franchising right for you? I think this episode of the Wealth Formula Podcast will really help you figure it out using some very good self-assessment questions. If it is, this could be one of the most exciting years of your life as you embark on a new business venture. Show Notes: 00:05:50:22 What exactly is franchising?  00:10:36:15 Stats on franchising 00:14:48:02 The personality type that fits franchising 00:21:16:21 Does franchising have to be a full-time job? 00:26:47:09 The scalability of franchising 00:33:14:19 What are people franchising these days? 00:34:34:15 Green flags and red flags

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 in the coming years.  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? 00:21:03:20 What have they learned along the way? 00:25:09:23 The analysis tool they use 00:34:25:05 Advice for people who don’t have money to invest 00:38:36:04 Frameworks for investing

During college, I spent a summer working in a laboratory at the University of Chicago where my biochemistry mentor did his PhD. The lab studied prostate cancer and was the legacy of Charlie Huggins, a surgeon who won the Nobel prize for discovering the testosterone dependence of most prostate cancers. The guy who took over that lab was his protege Shutsung Liao who did some trailblazing work of his own. He was brilliant and for a young biochemistry geek like me was fascinating to be around. He thought differently than most. His thoughts were original. And that’s what he demanded of people in his lab. In fact, one of the particularly unusual philosophies he had for his postdocs was “do not read too much”. He felt that reading others work had a role in learning what was known but also could be detrimental in that it could unduly influence the direction of one’s own thoughts. In other words, he didn’t want his postdocs to simply follow and expand on the ideas that others were proposing. He wanted them to have their own ideas. That idea has always stuck with me and I was reminded of it the other day when a fellow podcaster asked me which podcasts I listen to. He, of course, assumed that I listened to a bunch of other personal finance shows. I listed my top shows for him which included Purple Daily (Minnesota Vikings Football) and The Drive with Peter Attia which is about health and longevity. The truth is, I don’t listen to any other investing shows. I used to, but I realized it was a little bit of an echo chamber in the alternative investing podcast ecosystem. And just like Dr. Liao warned about in that cancer lab, I started just saying and believing what other podcasters were saying. I’m fortunate enough to be interviewing economists and other smart people every week so I’d rather formulate my own ideas based on what I learn from them. One thing is clear, they don’t agree with each other! For those of you who listen to me, I highly encourage you to listen to others—especially those who do not agree with me. It’s important to hear the ideas of multiple sources when it comes to something that you want to know about. Economics is not a hard science. It is a social science based on theory. Similarly, personal finance is…personal. So it’s best to learn many different perspectives and philosophies out there and see what resonates with you. And sometimes, it’s good to get together with others and compare notes. And that is exactly what I’m going to do on this week’s episode of Wealth Formula Podcast. I am going to sit down with another well-known financial podcaster and see what he’s been hearing on his end. Exposure to different thoughts is critically important when you make important decisions in your life, like what to do with your money. So make sure to listen in to this week’s interview with MC Laubscher aka The Cashflow Ninja and see what he has to say. Show Notes: 00:09:34:09 Where are we in the economy? 00:19:56:18 What to look for as indicators of how the economy is doing? 00:24:51:06 Permanent life insurance in volatile times 00:32:16:16 Don’t let losing make you too scared to invest 00:37:05:09 Changes in tax code  00:47:02:06 Diligence in the cashflow world

In this bonus episode of Wealth Formula Podcast, Jorge Newberry shares with us some background on what's been happening with AHP as well as his perspective on real estate and the debt market.