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.

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!

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.

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

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!

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.

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.

Something big is happening in Washington right now, and it has the potential to reshape everything you and I do as investors.



A few weeks ago, the Trump administration attempted to remove Fed Governor Lisa Cook, only to have an appeals court block the move on legal grounds. 



At almost the same time, Stephen Miran—one of Trump’s economic advisers—was confirmed by the Senate to the Fed’s Board of Governors by a razor-thin margin. 



On one side, an attempted subtraction. On the other, a confirmed addition. All of this is happening right before a major policy meeting, and it’s not hard to see the writing on the wall.



Trump’s takeover of the Fed is not a question of if—it’s a question of when. Whether it unfolds in a matter of weeks or drags out over the next few months, the direction is set and the outcome is inevitable. 



The endgame is to bring interest rates down and, if necessary, use quantitative easing to drive bond yields even lower. That kind of policy would flood the system with liquidity, and the immediate effect would be a booming economy. Asset prices would rip higher—stocks, real estate, gold, Bitcoin—you name it. If you own assets, you’d feel wealthier almost overnight.



But of course, there’s another side to this coin. A dollar that weakens under the weight of easy money. A gap between the asset-rich and the asset-poor that grows even wider. Rising inequality, rising tensions, and perhaps a long-term cost to the credibility of the U.S. financial system.



So is this takeover of the Fed a good thing? That depends entirely on where you sit. If you’re a wage earner with no meaningful assets, it’s bad news. If you’re an investor, it’s a reminder that ignoring policy shifts like this is done at your own peril. 



The time to prepare is now, not later. Don’t wait for rates to drop before acting. History shows that buying assets in a descending rate environment has been one of the most powerful wealth-creation maneuvers in the United States. 



Think back to 2008. The Fed responded to the financial crisis with unprecedented rate cuts and waves of quantitative easing. What followed was more than a decade of explosive gains in stocks, real estate, and other assets. 



Those who bought while rates were falling built extraordinary wealth. Those who stood on the sidelines missed out.



But don’t take my word. Listen to noted economist Richard Duncan explain the dynamics of this situation in this week’s episode of Wealth Forula Podcast. 



Learn more about Richard Duncan:



richardduncaneconomics.com



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.



By devaluing the dollar by 50% against the end of the mark by 1990, the trade deficit that had come back into balance.



Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. Uh, today before I begin, just a reminder. Go to wealth formula.com. If you haven't done so and you are an accredited investor, join the Accredited Investor club. Lots of things coming in there in Q4.



Lots of tax mitigation, strategy related investments, that kind of thing take advantage a hundred percent. Bonus depreciation, take advantage of discounted assets and so on. So again, wealth formula.com. Now, uh, let's talk about today's show. Interesting one. Um, it's with, uh, Richard Duncan again. Uh, and, uh, he's an interesting guy, uh,

When we think about investing, our minds usually go straight to stocks, bonds, and real estate. But some of the best opportunities come when you stop thinking of investing as something separate from your everyday life.



What do I mean by this? A lot of the things we buy are treated as expenses when they could be investments. You might wear a watch or jewelry simply because you like them, but you avoid spending too much because it feels frivolous. 



Yet what’s better—paying $250 for a decent watch that will be worthless in 10 years, or $5,000 for a Rolex that could be worth twice as much over the same period?



The same idea applies to cars and even furniture. I have a good friend who lives by this philosophy. For decades, he’s chosen to invest in the finer things rather than the ordinary, and it has become a cornerstone of his personal investment strategy.



It’s about thinking differently—turning what most people see as expenses into assets.



Art falls into that same category. I’m not a huge art guy myself. Sometimes I’ll buy a piece off the street because I’ve never thought of art as an investment. Yet for centuries, people have purchased art for its beauty, cultural value, and emotional impact—and often made a financial killing in the process.



Today, art is recognized as a legitimate asset class—something that not only enriches your life on the wall but also diversifies and strengthens your portfolio.



This week on Wealth Formula Podcast, we’re going to explore how fine art has evolved into an investment category in its own right, and how you might think about incorporating it into your wealth strategy.



Learn more about Philip Hoffman and The Fine Art Group:



www.fineartgroup.com

We all know technology and geopolitics shape the world, but there’s a quieter, less obvious force that dictates the flow of wealth and opportunity: demographics.



Where people live, where they move, and how populations grow or shrink — these are the currents that ultimately drive economic gravity. That’s why all of the multifamily investments you see through Investor Club focus on areas where there is job creation. Where there is job creation, there is population growth, and people have to live somewhere.



Scale that concept up to a global level, and you start to see why migration, climate, and demographics are the real megatrends of the century.



Take China — decades of the one-child policy have created a demographic cliff. Contrast that with parts of Africa and South Asia, where populations are booming. Add to this the wildcard of AI, which could either amplify the advantages of youthful nations or offset aging ones.



For investors, entrepreneurs, and anyone thinking long term, the key isn’t where the puck is today — it’s where the puck is going. That’s the topic of this week’s Wealth Formula Podcast.

One of the realities of building wealth is that the more you have, the more you have to lose. Asset protection and estate planning aren’t just legal technicalities—they’re essential parts of safeguarding everything you’ve worked for. 



The worst time to plan is when you actually need it. If you wait until you’re facing a lawsuit, a creditor, or a sudden death in the family, it’s already too late.



Think of asset protection like insurance. Most of us wouldn’t drive without auto insurance or own a home without homeowners' insurance. Yet many wealthy people operate businesses, hold investments, and build family wealth without putting legal structures in place to shield those assets. One lawsuit or one major life event can undo decades of hard work.



On the estate side, not having a proper plan doesn’t just cost money—it creates stress and hardship for your loved ones. Without a solid estate plan, your family could end up tied up in probate courts, fighting over assets, and losing valuable time and resources. 



We’ve talked on this show before about basic steps everyone should take—like forming entities to protect your business or making sure you have not only a will, but also a living trust. Those are the starting points.



But as your wealth continues to grow, your planning needs to grow with it. High-net-worth families have to think about more robust strategies—things like dynasty trusts, asset protection trusts, and the best jurisdictions to set them up. 



These aren’t just technical details. They’re the difference between wealth that gets preserved and multiplies across generations and wealth that gets chipped away by taxes, lawsuits, and poor planning.



To help us understand these tools at the highest level, I’ve invited perhaps the most respected attorney in this space—someone who is seen by other attorneys as the thought leader in asset protection and estate planning—Steve Oshins. Steve has pioneered strategies that are now industry standards, and his work has shaped how families across the country protect and grow their wealth. You’re going to want to pay attention this conversation closely.

I’m not a big stock guy. However, there are some companies out there that you know are just going to change the world, and it would be nice to be able to own part of them—especially before they go public.



That’s why this week on Wealth Formula Podcast we’re diving into a topic that’s been on my mind for quite some time: the world of pre-IPO investing.



If you’ve ever felt like by the time a company finally hits the public market it’s already ballooned in value and you’re basically buying in at a premium, you’re not alone.



I personally had my eye on a company called Circle, which deals in stablecoins. As I’ve talked about on the show before, I think it’s going to be huge globally.



But as soon as Circle went public, the valuation shot up to a point where I felt like it was way too expensive to jump in. If I had access to those shares before the IPO, I would have definitely taken the plunge.



Now, this isn’t just about one company. We’ve seen this story play out with others, and right now there are some major game-changers like SpaceX on the horizon.



SpaceX, one of Elon Musk’s ventures, is one of those companies you just know is going to have a massive impact.



But how do you get access to those deals?



If you’re an accredited investor, I have good news. Getting a piece of the action before these companies go public isn’t just for the ultra-wealthy insiders anymore.



It’s becoming more accessible to accredited investors who want to get in earlier and potentially see greater upside.



That’s the topic of this week’s Wealth Formula Podcast.

Bitcoin may be breaking records again, but this time it’s not because of retail frenzy. Search trends, social media chatter, and small-investor activity are all far quieter than they were in 2017 or 2021. The people driving this move aren’t hobby traders—they’re the biggest institutions and the wealthiest investors on the planet.



Look at BlackRock. Larry Fink once dismissed Bitcoin as an “index of money laundering.” Now he’s calling it “digital gold,” and his firm’s iShares Bitcoin Trust (IBIT) has become the fastest-growing ETF in history. 



It’s pulled in nearly $90 billion, representing more than 3% of all the Bitcoin that will ever exist. Those billions aren’t coming from TikTok influencers—they’re coming from pensions, hedge funds, and the kind of family offices that have multi-generational plans for capital preservation and growth.



Even Harvard University has made the leap. Back in 2018, its star economist Kenneth Rogoff said Bitcoin was more likely to hit $100 than $100,000. Today, Harvard’s endowment owns more of BlackRock’s IBIT than it does Apple stock in its U.S. equity portfolio. That’s not just a change of heart—it’s a complete reversal in worldview.



And of course, there’s Michael Saylor, whose MicroStrategy now holds close to 3% of the total future Bitcoin supply, turning a business software company into a corporate Bitcoin vault.



This is institutional FOMO. The biggest asset manager on Earth is selling it, elite universities are holding it, corporate treasuries are betting their future on it, and family offices are adding it to the same portfolios that hold their blue-chip stocks and trophy real estate.



But institutions aren’t the only ones making this move. There’s another wave—quieter but just as significant—coming from the ultra-high-net-worth crowd. The centimillionaires. 



The people who can wire $10 million into a position without blinking. I’ve always said: never take financial advice from someone with less money than you. Well, Gary Cardone has a lot more than me—and he’s all in on Bitcoin.



Gary is part of what they call “smart money.” He’s in the same camp as the other ultra-wealthy who aren’t just dabbling in crypto—they’re making conviction bets. 



And when you see people with that kind of capital and that kind of access all moving in the same direction, it’s worth listening to why. That’s exactly why I sat down with him—to hear, straight from someone in that rarefied circle, why Bitcoin has gone from a curiosity to a core holding.

Hey everyone,



If you’ve been following me for any length of time, you already know that I believe real estate is the single greatest wealth-building tool available to everyday investors like you and me. (Although, I’ll admit, Bitcoin is making a strong case to be in that conversation.)



But every once in a while, it’s worth stepping back and asking: Why has real estate created more millionaires than any other asset class—and why do the ultra-wealthy keep buying it, decade after decade?



It comes down to a unique stack of advantages that you simply can’t replicate anywhere else:




Leverage: Real estate is one of the few investments where banks are eager to give you money to buy an appreciating asset. You put down a fraction of the purchase price and control 100% of the property—and 100% of the upside. Leverage can be a double-edged sword in down markets, but it remains the most powerful tool in the arsenal of the rich.



Other People’s Money: Every month, your tenants pay rent that covers your mortgage and builds your equity. Essentially, they’re buying the property for you.



Appreciation (Natural and Forced): Over time, rents and property values generally trend upward. But here’s the thing—you can force appreciation by raising rents, cutting costs, and improving operations. On properties over four units, these improvements increase net operating income (NOI), which directly determines the property’s market value. That’s how sophisticated investors manufacture wealth on demand.



Tax Advantages (The Secret Weapon): The IRS lets you deduct a portion of your property’s value each year—depreciation—even while the property itself often climbs in value.




Now, here’s where things get truly magical: cost segregation combined with 100% bonus depreciation. These strategies let you front-load those tax deductions, often allowing you to write off a massive portion of your investment in the first year.



For example, let’s say you buy a property for $1 million and put down $300K. With a proper cost segregation study and bonus depreciation, you might receive a K-1 showing a $300K loss that same year. That’s a paper loss offsetting your taxable income—meaning money that would’ve gone to the IRS is now working to build your wealth instead.



And with Congress reinstating 100% bonus depreciation, this playbook for savvy investors is back at full strength. If you think about it, upfront tax savings alone can turbocharge your returns before you’ve even collected your first rent check.



This week on Wealth Formula Podcast, I sit down with Gian Pazzia, chairman and chief strategy officer at KBKG, to pull back the curtain on cost segregation and bonus depreciation. We’ll dig into:




How cost segregation really works—and when to use it.



How passive investors and short-term rental owners can take advantage of it.



What to know about recapture taxes, 1031 exchanges, and long-term planning.




If you’ve ever wondered how sophisticated investors legally shelter huge amounts of income while building massive wealth, this episode gives you the inside track.



P.S. If you want access to the “Do it Yourself” Cost Segregation tool mentioned in this podcast, you can access it HERE. Use the code FORMULAPROMO to get 10% off. 

Last week, we talked about side gigs—smart ways to earn extra income outside your day job. One of the options we touched on was affiliate marketing, a tried-and-true method still relevant today.



But here’s another strategy I’ve personally dabbled in: building websites designed to generate leads. These sites are created with specific search terms in mind—mine were focused on cosmetic surgery—but the model can be applied to nearly any industry.



Once your site is ranking on Google and generating traffic, you rent out that digital space to businesses who want the leads. I had a friend who made millions using this model with smartlipo.com back in the day. It was like owning valuable digital real estate.



But that was then. The landscape has shifted. With the rise of tools like ChatGPT and Perplexity, fewer people are relying on traditional search engines. So the question is:



Is this still a viable side hustle in 2025?



And if it is, how does it work now—and how can you get started?



That’s exactly what we’re diving into on this week’s Wealth Formula Podcast.

My financial journey started after I accidentally picked up one of Robert Kiyosaki’s books. It was the end of my honeymoon in Puerto Vallarta, and my wife (at the time) and I were waiting for our plane back home.



I decided to grab a book from one of the little airport shops, but there weren’t many choices. In fact, I believe there were four, and three of them were romance novels with pictures of muscular men with long blonde hair on them.



The only other option was Robert Kiyosaki’s Cashflow Quadrant. I had no idea who Robert Kiyosaki was, nor did I really care that much about investing and personal finance. But it sounded like a better read than the others, so I bought it.



At the time, I had just finished residency training and was focused on my career ahead. I never really thought much about money beyond the fact that I was finally going to make some after years of indentured servitude as a surgical resident.



But on the flight back from Mexico, everything changed. Reading that book felt like a bolt of lightning, and it changed my mindset forever. This experience, I later found out, has happened to countless people I’ve met since then.



I call it taking the pill (the book is purple).



A world of possibilities suddenly opened up to me. I know it may sound strange, but the idea that I could ever not have a job and, instead, become an entrepreneur had never before occurred to me.



In hindsight, I understand why. I was a very good student. “A students" get addicted to the educational system. When you get As, you are rewarded. You get accolades. Your teachers love you. What’s not to love?



That makes you try even harder. That feeling of success is addictive, and you want more of it. So you aspire to do the things that the smart kids are supposed to do, like going to a fancy college and becoming a lawyer or doctor.



If you succeed in a system, you don’t doubt the system. You don’t look for alternatives. The system I bought into was an educational system created by industrialists a century ago. They didn’t want to train entrepreneurs; they wanted to train a workforce. And I was winning in that system.



C students, on the other hand, have nothing to lose. They search for success in other ways and often end up more successful than those who did better in school. That’s why A students rarely become entrepreneurs. They never have a reason to look outside the system.



The purple book I read on that plane helped me break away from that world. I saw life differently after reading it. Even though I was already a surgeon who had completed residency, I never wanted to work for anyone ever again.



I started my own cosmetic surgery practice, then another medical business, and had a lot of success. I also tried my hand at other businesses that were less successful. I made lots of money and lost lots of money. Living the life of an entrepreneur is not for the faint of heart.



I also believe, to a certain extent, that you are either born an entrepreneur or you are not. I was born an entrepreneur, despite the fact that it took me over 30 years to discover it.



Because of that, I never push anyone to quit their job and go out on their own. That kind of risk is not for everyone. That said, there are certainly ways to dabble in entrepreneurship without risking everything.



People call them side hustles. Side hustles are ways to make a little extra money that you can use to make an extra investment or simply go on a nicer vacation.



One of those side hustles I have engaged in is affiliate marketing. Ten or fifteen years ago,

There’s no shortage of doom-and-gloom in the podcast world—especially in the gold and silver crowd. You know the type. The ones who spend half their airtime warning you that the dollar is about to collapse, the grid will go down, and that only silver coins will save you.



I used to buy into that narrative too. I was a card-carrying member of the Zombie Apocalypse school of personal finance. I even listened to Peter Schiff religiously.



But as time passed and I realized that zombies would not rule the world, I gradually became an optimist. I believe in the resilience of the U.S. economy. I don’t think society is going to crumble, and I’m not prepping for Armageddon.



That said, there is one warning from the doom crowd that’s absolutely true—and it’s not a matter of opinion. It’s a fact.



The U.S. dollar is losing value. Fast.



That might not feel dramatic. But it should. Because it means that if you’re sitting on cash—thinking you’re being conservative—you’re actually guaranteeing yourself a loss.



Robert Kiyosaki said it best: “Savers are losers.”It’s a clever phrase, but it’s not a joke. It’s reality.



Inflation isn’t a glitch in the system—it is the system. In a country running record-breaking deficits and drowning in debt, the only viable solution is to devalue the currency. In other words, print more money.



And whether that inflation comes in at a “modest” 2% like the Fed wants, or 7–9% like we saw in recent years, the outcome is the same: your money loses purchasing power.



A dollar in 1970 had the buying power of nearly $8 today. So if your dad tucked away $10,000 in a shoebox thinking he was doing you a favor, that money is now worth a little over $1,200. Even the money you saved in the year 2000 has lost nearly half its value.



Inflation is the background noise of our economy. It’s always there, always working, always eroding. Slowly when things are “normal.” Fast when they’re not.



So what do you do?



Well, if you’re keeping large chunks of money in a savings account paying less than 1% interest while inflation clips along at 3–6%, you are, without exaggeration, bleeding wealth every single day.



It feels safe. It looks safe. But it’s not.It’s a bucket with a hole in the bottom. And you don’t even notice until it’s almost empty.



That’s why the wealthy don’t hoard cash. They own assets that inflate with inflation.



They buy things that grow in value as the dollar shrinks—because they understand the system. They don’t fight it. They ride it.



Real estate is one of the best tools in the game. Home prices tend to rise over time. Rents go up. But if you lock in a 30-year fixed mortgage, your payment never changes. So while the cost of everything else is climbing, your loan stays frozen. Meanwhile, inflation is silently reducing the real value of the debt you owe. You’re paying it back in cheaper dollars every single year.



Then you’ve got ownership in productive businesses. Sure, stock prices can swing in the short term. But long-term? Equities in companies with pricing power—companies that can raise prices when costs go up—often outpace inflation. And as an owner, you benefit directly.



And finally, there are the scarce assets. Bitcoin. Gold. Precious metals. In a world where central banks can conjure trillions out of nowhere, things that can’t be printed tend to hold real value—or even multiply it.



This is how the wealthy play the game.While most people are watching their savings accounts decay quietly,

I want to share a story you may have heard before—but it’s worth telling again.



When I finished surgical training and joined a practice in 2008, we were in the middle of the Great Recession.



But for me, the recession didn’t mean anything. My net worth was below zero. I’d made less than $50K a year for seven years. I wasn’t worried about losing money—I didn’t have any.



What I did have was a new six-figure salary and a baby on the way. Suddenly, I had to start thinking like a grown-up. I needed to protect my family. I needed life insurance. But I had no idea what that really meant.



I started asking around. One of the younger surgeons told me to “buy term and invest the difference.” That’s what Dave Ramsey and Suze Orman were preaching on TV too.



But an older surgeon—close to retirement—told me something very different. He’d been financially wrecked by the market crash and said permanent life insurance was one of the only things keeping him afloat.



Here’s the thing: they were both kind of right.



The young guy was right that most permanent life insurance is designed in such a way that it is a terrible investment. But the older guy had discovered something the hard way—permanent life insurance can offer unmatched financial stability when everything else is falling apart.



Still, neither of them understood what I would come to learn just a few years later from some of my wealthiest friends.



You see, permanent life insurance isn’t one thing. It’s a flexible tool. In the right hands, it can be optimized for estate planning, tax-free growth, or even used as a powerful retirement income strategy—especially for those of us who started making money later in life.



That’s when I took a deep dive, even getting a life insurance license so I could fully understand the mechanics myself. What I found became the foundation for Wealth Formula Banking, Wealth Accelerator, and now, Wealth Accelerator Plus. 



In fact, some of these strategies are so effective that they’ve already helped people like me “catch up” on retirement income planning—even if we didn’t start earning real money until our 30s.



On this week’s show, I talk with one of my new partners at Wealth Formula Banking, Brandon Preece. We unpack common misconceptions about life insurance, discuss mainstream strategies, and then go further—exploring new protocols that could be game-changers for your financial future.



If you haven’t learned about this stuff yet, it’s time. And if you have, it’s time to revisit all of these strategies. These strategies have played a major role in my financial life—and in the lives of many in our Wealth Formula community.



And I can honestly say that I don’t know of a single person who ever regretted setting up a plan!

I know some of you are tired of hearing about Bitcoin and digital currencies. That’s not what this week’s show is about. This week’s podcast conversation is broader—it touches the entire global economy.



But…you just can’t talk about macroeconomic trends anymore without talking about digital dollars and Bitcoin. Leaving them out today would be like ignoring gold when discussing commodities.



There’s a section this week in my interview with Ian Reynolds that dives deep into the bond market and the growing influence of stablecoins. And I realized—it might be helpful to give you a bit of context up front. If you’re already familiar, consider this a refresher. If not, this will make the second half of our conversation a lot more useful.



Let’s start with the 10-year U.S. Treasury—arguably the most important interest rate in the world. This one number influences everything from mortgage rates to stock valuations to how much it costs the government to borrow money. Historically, when inflation drops, yields on the 10-year tend to fall as well. That’s the standard relationship: lower inflation usually leads to lower yields.



But that’s not what’s happening right now.



Despite a year of cooling inflation, the 10-year Treasury yield has stayed surprisingly high. Why? The answer boils down to supply and demand.



On the supply side, the U.S. government is flooding the market with Treasuries—over a trillion dollars’ worth every quarter—to finance its growing deficits. That’s a lot of new bonds entering the market.



At the same time, demand isn’t keeping up. Foreign central banks like China and Japan, which used to be some of the biggest buyers of our debt, are pulling back. Some are dealing with their own domestic issues. Others are deliberately reducing their exposure to the dollar as a reaction to U.S. foreign policy over the past year.



So: more supply, less demand—what happens? Bond prices go down, resulting in higher yields for bond investors. That, in turn, means higher borrowing costs for everyone—including the U.S. government, businesses, and consumers. That’s why, even with inflation falling, the 10-year hasn’t followed the script.



But here’s where things get interesting. A new kind of buyer has started stepping in: stablecoin issuers.



Stablecoins—like USDC and Tether—are digital tokens pegged to the U.S. dollar. They’ve become essential plumbing for the crypto economy, but their growth is increasingly relevant to the broader financial system. Why? Because in order to maintain their dollar peg, these companies need to back their coins with something stable—and that “something” is often short-term U.S. Treasuries.



It turns out, that’s a great business to be in. These stablecoin issuers collect real dollars, turn around, and invest them in T-bills yielding 5% or more. That spread—between what they earn and what they pay out—is pure profit. It’s essentially a 21st-century version of a money market fund, just running on blockchain.



And it’s growing fast.



Tether now holds more Treasuries than countries like Australia or Mexico. BlackRock has launched a tokenized Treasury fund that already has nearly $3 billion under management. And just this week, Mastercard announced that it’s integrating USDC and other stablecoins for cross-border settlement.



In other words, this isn’t fringe anymore. It’s moved into the mainstream, and it’s growing quickly.



Even lawmakers are catching up. Just this month, the U.S. Senate passed the GENIUS Act, a bipartisan bill that sets clear regulatory guidelines for stablecoins.

My mission at Wealth Formula Podcast is to provide you with real financial education.



You may have heard of something called the Dunning-Kruger curve. In short, when you start learning something new, you know that you don’t know anything. That’s the safe zone.



The dangerous part is what I call the red zone—when you’ve learned just enough to think you know a lot, but really… you don’t. Then, eventually, if you keep learning, you get to the point where you finally realize how little you actually know—and how much more there is to understand.



That’s kind of where I am now.



And so, the only thing I can do—and the only thing I encourage you to do—is to keep learning more than we knew yesterday.



Take this week’s episode.



We’re talking about Employee Stock Ownership Plans, or ESOPs.



Until recently, I didn’t fully understand how they worked. And I’d bet most business owners don’t either.



Which is exactly why this episode matters.



Even if you don’t currently own a business or a practice, I still think it’s important to learn about strategies like this—because someday you might. And in the meantime, you’re expanding your financial vocabulary, which is always a good investment.



So, what is an ESOP?



At its core, an ESOP is a legal structure that allows you to sell your business to a trust set up for your employees—usually over time. It’s a way to cash out, preserve your legacy, stay involved if you want to, and unlock some massive tax advantages in the process.



But before we talk about all the bells and whistles, let’s address the number one question that confuses almost everyone—including me:



Where does the money come from?



If you’re selling your company to a trust, and your employees aren’t writing you a check… how the hell are you getting paid?



Here’s the answer:



You’re selling your business to an ESOP trust, which is a qualified retirement trust for the benefit of your employees. That trust becomes the buyer. But like any buyer, it needs money.



So how does it pay you?



There are two main sources:



Bank financing – Sometimes, the ESOP trust can borrow part of the purchase price from a lender.



Seller financing – And this is the big one. You finance your own sale by carrying a note.



That means you get paid over time, through scheduled payments—funded by the company’s future profits. The company continues to generate cash flow, and instead of paying it out to you as the owner, it pays off the loan owed to you as the seller.



So yes—it’s a structured, tax-advantaged way to convert your equity into liquidity using your company’s own future earnings. You’re not walking away with a check on Day 1—but you are pulling money out of the business steadily and predictably, often with interest that beats what a bank would offer.



And here’s the kicker:



If your company is an S-corp and becomes 100% ESOP-owned, it likely pays no federal income tax, and often no state income tax either. That means a lot more money stays in the business—available to fund your buyout faster.



If you're a C-corp, you might even qualify for a 1042 exchange, which can defer or eliminate capital gains taxes entirely if you reinvest the proceeds in U.S. securities.



And here’s something the experts probably won’t say out loud—but I will: