Wealth Formula by Buck Joffrey

Buck and Zulfe discuss the concept of sovereign wealth funds and their purpose, particularly in countries heavily reliant on a single source of revenue, such as oil. They also explore the idea of the United States establishing its own sovereign wealth fund and the potential challenges and drawbacks associated with it. The conversation touches on inflation, globalization, the role of the private sector in investment, and the government’s use of tax incentives to drive investment. Buck and Zulfe also talk about the recent decline in the stock market, the softening job market, the upcoming Federal Reserve meeting and the possibility of a rate cut.  They touch on the performance of gold and its role as an inflation hedge, as well as the volatility of Bitcoin and its potential as an investment. 

Today, we’re diving into a topic that’s sure to ruffle some feathers, particularly if you’re a fan of Austrian economics. Look, I get it. Austrian economists have an appealing story. It’s neat, it’s clean. You save money, you balance budgets, and the free market solves everything. It’s almost comforting, in a nostalgic way, like when your grandparents tell you how they walked uphill both ways to school.  But while simple and neat, it just doesn’t reflect the reality we live in today? It’s like using a paper map in the age of GPS—sure, it worked back then, but today, we’re navigating a completely different landscape. In 2008, Lehman Brothers collapsed and the markets were in freefall. It felt like the entire financial system was about to implode. Now, according to Austrian economics, we should’ve let the whole thing crash and burn.  They argue that economic downturns are necessary to “cleanse” the system, allowing inefficient businesses to fail and making way for more robust ones.  They argue that the economy should function like a forest fire, clearing out the old and dead so new growth can emerge. But what if that fire had spread to every corner of the world economy and left nothing but ashes? Here’s the thing: in 2008, the world didn’t allow the fire to spread. The central banks, particularly the Federal Reserve, stepped in with unprecedented measures—quantitative easing, zero interest rates, massive injections of liquidity.  Essentially, they flooded the economy with money to stop the bleeding. If you ask an Austrian economist, this is akin to sinning against the laws of nature. But here’s the kicker: it worked. The world didn’t plunge into a Great Depression, and we’re all still here today because of those “unnatural” interventions.  Fast forward to the COVID-19 pandemic. Governments around the world shut down economies, businesses shuttered, and millions of people were suddenly out of work. Once again, the central banks and governments unleashed trillions of dollars in stimulus to keep things afloat. According to Austrian economics, this was another sin—a violation of the sacred tenets of free markets. But what was the alternative? A global economic collapse? Now, don’t get me wrong—printing money and keeping interest rates low indefinitely isn’t a free lunch. It comes with consequences, like inflation, which we have certainly felt over the past two years. But the point is, we live in a world where pure economic theories rarely align with reality.  The global economy is far too interconnected, too complex, and too fragile to leave it to the “invisible hand” without intervention. Sometimes, we need a heavy hand to guide the way, and Austrian economists often seem to be living in a world where that hand doesn’t exist. Believe me, I do believe we need to a lot better when it comes to being fiscally responsible and not racking of huge amounts of debt. But the idea that Austrian economics can solve the issues of our day is just a fairytale. And I know those of you who are followers of Peter Schiff are going to send me hate mail so I might as well turn over my rant to economist Richard Duncan, which we will do right after these messages.  Richard feels strongly about these topics so this is less of an interview than it is a lecture. Hope you enjoy it! 08:03 What is an Austrain Economist? 14:04 Back to the Gold Standard? 23:04 What’s Going On in the Economy Today? 30:35 U.S. Economy in the Next Few Years

Buck discusses the concept of stoicism and its application in modern life. Stoicism is a timeless philosophy that teaches us to master our emotions, focus on what matters, and thrive in the chaos of modern life. The key idea in stoicism is that we have power over our minds, not outside events. We can control our actions, thoughts, and responses, but we cannot control external circumstances. Stoicism teaches us to focus our energy on what we can control and let go of everything else. It also emphasizes the importance of perceiving events in a way that empowers us and leads to growth. The Stoics believed in living in accordance with virtue, which includes wisdom, courage, justice, and discipline. They also emphasized the concept of memento mori, reminding us of our mortality and the importance of living with purpose and urgency.

In the fast-paced world of technology, missing out can be costly. History shows that those who fail to adapt often face devastating consequences, while those who stay ahead can seize game-changing opportunities. This is a lesson every investor should take to heart. Take Kodak and Blockbuster, for example—both giants in their industries, but both brought down by their reluctance to embrace technological change. Kodak, despite pioneering digital camera technology in the 1970s, clung to its profitable film business. By the time the company acknowledged the digital shift, it was too late; Kodak declared bankruptcy in 2012. Blockbuster, meanwhile, dominated video rentals in the early 2000s but failed to foresee the rise of digital streaming. Netflix, then a fledgling company, offered to partner with Blockbuster, but the offer was declined. As streaming gained momentum, Blockbuster’s physical stores became irrelevant, leading to its bankruptcy in 2010. These stories offer a clear lesson: technology waits for no one. Investors who cling to the past will be left behind. Another missed opportunity came with the rise of decentralized technology, particularly Bitcoin. When Bitcoin emerged in 2009, many dismissed it as a fad or speculative bubble, failing to grasp its potential as a decentralized currency and store of value. Early investors in Bitcoin saw massive returns, while those who hesitated missed out on one of the most transformative financial opportunities of the decade. Today, artificial intelligence (AI) stands as the next frontier of innovation. Like digital film, blockchain, and personal computing before it, AI is poised to reshape industries, create new markets, and redefine how we live and work. Companies like Nvidia, which has positioned itself as a leader in AI through its advancements in GPUs and AI-driven software, showcase the potential rewards of early investment in this space. Nvidia’s success underscores the importance of recognizing and investing in emerging technologies before they go mainstream. Investors who saw the potential in Nvidia’s AI capabilities years ago have enjoyed extraordinary returns. But the AI space is still in its early stages, presenting opportunities for those who are forward-thinking. The message is clear: staying informed and adapting to technological advancements is crucial for investors. In a world where innovation drives market growth, keeping up with technology isn’t just smart—it’s essential. Those who fail to recognize and act on new technologies risk being left behind, while those who embrace change will have the chance to shape the future. As AI continues to evolve, it’s vital for investors to stay vigilant and ready to act. The next big opportunity could be just around the corner, and the key is to be prepared to seize it. This weeks episode of Wealth Formula podcast will help you understand the role of artificial intelligence in the coming years.

Buck shares his experience with a retinal tear and detachment and how it reinforced the importance of gratitude and perspective. He discusses the psychological benefits of gratitude, including improved mental health, enhanced resilience, and stronger relationships. Buck suggests practices such as gratitude journaling, mindful appreciation, expressing thanks, and reframing challenges to cultivate gratitude. He emphasizes the power of gratitude in shaping our mental and emotional well-being and overall life satisfaction.

Buck and Zulfe Ali discuss various topics including the shift from a W-2 mindset to an entrepreneurial mindset, the current state of the economy, and the performance of different asset classes. They also touch on the upcoming Fed rate cuts, the revision of jobs data, and the rise of gold and Bitcoin.

Most people think that having a job is the safest way to secure their financial future. They wake up every day, punch the clock, and assume that as long as they keep doing their job, they’re safe. But let me tell you something to wake you up a bit: A job isn’t as safe as it seems. In fact, it can be one of the most dangerous financial positions you can be in. When you work for someone else, you’re living in a bubble. You get your paycheck every two weeks, you have your benefits, and you think, “I’m set.” But what you don’t see is what’s happening behind the scenes—the financial health of the company, the decision-making process in the boardroom, the market pressures that might be squeezing your employer’s margins. You don’t see the icebergs until it’s too late. Your employer’s financial struggles are hidden from you. The first time you might realize your company is in trouble is when you’re handed a pink slip. And then what? You’re left scrambling, wondering what went wrong, and suddenly that “safe” job doesn’t seem so safe anymore. This isn’t about quitting your job tomorrow. This is about realizing that your job should be just one part of your financial portfolio. You see, the truly wealthy don’t rely on just one source of income. They understand the power of diversification. They understand that putting all your eggs in one basket is a recipe for disaster. Think of it this way: If you lose your job, and it’s your only source of income, you’re in a vulnerable position. But if you have multiple streams of income—whether it’s from side gigs, investments in real estate, or even owning a small business—you have a safety net. You have options. And that’s what true financial security is all about—having options. Going outside of the comfort zone of your job is not risky. Not doing so is the bigger risk. I want you to start thinking of yourself as the CEO of your own life. Just like a company needs to diversify its revenue streams, manage its risks, and always be aware of its financial health, so do you. You need to treat your finances like a business. What does that mean? It means you need to mitigate your risks. Don’t rely on one source of income. Constantly be aware of the “icebergs” that could derail you. Are you too dependent on your job? Are you prepared for an economic downturn? Are you aware of the blind spots in your financial planning? Blind spots. We all have them. But the key is to identify them before they become problems. In your financial life, a blind spot could be an over-reliance on a single income source. It could be a lack of emergency savings. It could be not investing in assets that grow over time. The good news is, once you’re aware of your blind spots, you can do something about them. You can start diversifying your income, investing in cash-flowing assets and build a financial plan that’s robust and resilient. Now, let’s talk about how to actually do this. How do you diversify your income streams? Here are a few strategies that can get you started. First, side gigs. Start small. Maybe it’s freelancing, consulting, or even an online business. The key is to start generating income outside of your job. At one point in my life, Wealth Formula was a hobby. It is now my primary business. Second, consider business acquisition or franchises. This can be a great way to create an additional income stream that’s independent of your job. Finally, investing in cash-flowing assets. Real estate is one of my favorites. VRBO’s are a particularly good option for W2 wage earners because you can literally use depreciation to offset your W2 income if you follow the rules set forth by the IRS. But whatever you choose, the goal is to have multiple streams of income that aren’t tied to your day job. Financial freedom isn’t about having a high-paying job. It’s about having control over your financial future. It’s about having options. It’s about not being at the mercy of your employer’s decisions. Remember, your job is just one part of your financial portfolio. Don’t let it be the only part. Start thinking like a business owner, diversify your income, and protect yourself from the icebergs that you can’t see. That’s the real path to financial security and freedom. My guest this week on Wealth Formula Podcast has a similar philosophy and serves as a good reminder of what’s at stake. 10:09 Warnings of the Current Geopolitical Climate 13:58 Lessons from the IRS 16:02 Combating the Golden Handcuffs 17:56 Side Hustles for Security 25:20 The Cashflow Quadrant 30:15 Tax Implications of the Election

Buck discusses the science of habit formation, specifically focusing on exercise. He explains the habit loop, which consists of a cue, routine, and payoff, and how habits are engineered through repetition and reward. Buck emphasizes the role of dopamine in motivating and craving habits and highlights the importance of consistency and creating a consistent environment. He provides practical tips for creating the habit of exercise, such as starting small, stacking habits, making it fun, leveraging social support, setting goals, tracking progress, and preparing for setbacks.

Rod Zabriskie joins the show to discuss the Wealth Accelerator program, which aims to help individuals amplify their returns and accelerate their wealth accumulation. The program involves leveraging life insurance policies to build cash value and generate tax-free income in retirement. The program has been stress-tested against different market conditions and has shown promising results.

The COVID-19 pandemic exposed long-standing vulnerabilities in the global supply chain. It highlighted how monopolistic practices and just-in-time manufacturing left small businesses struggling against larger corporations. Systemic issues led to widespread shortages and inflated prices. Experts discuss the impact of panic buying and the urgent need for localized production. Additionally, they explore how future trade policies may reshape economic dynamics and emphasize the importance of fostering competition to build a more resilient supply chain.