Wealth Formula Podcast Podcast Por Buck Joffrey arte de portada

Wealth Formula Podcast

Wealth Formula Podcast

De: Buck Joffrey
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Financial Education and Entrepreneurship for Professionals Economía Finanzas Personales
Episodios
  • 531: How to Identify a Good Real Estate Deal

    531: How to Identify a Good Real Estate Deal
    Nov 2 2025
    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, I learn from my mistakes and keep moving forward. I still see it as the greatest wealth-building asset in the world—just look at how many billionaire real estate investors there are. But wealth doesn't build blindly. Every project I invest in has to have underwriting I believe in. Beyond that, I pay close attention to macroeconomic shifts and form my own view on what comes next. Right now, I believe in the right markets, real estate has bottomed out. I think we're on the buyer's side of the cycle. I also believe interest rates are headed lower—both because the Fed has signaled it and because the Trump administration will do everything possible to keep them moving in that direction. And for real estate investors, investing in a descending interest rate environment is nothing short of a gift. So now I look at the deals in the right market. That involves underwriting and understanding what all those numbers mean. In this week's episode of Wealth Formula Podcast, my guest and I break down how you—even as a passive ...
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    46 m
  • 530: A Tax Attorney Talks Tax Mitigation with Buck

    530: A Tax Attorney Talks Tax Mitigation with Buck
    Oct 26 2025

    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!
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    38 m
  • 529: How to Get Yield from Bitcoin Safely

    529: How to Get Yield from Bitcoin Safely
    Oct 19 2025

    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.
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    48 m
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