RG 059 – Why the stock market is still for suckers with Buck Joffrey
About Buck Joffrey
- Buck is a medical doctor by training.
- Buck has a financial education website called Wealth Formula.
- Buck as a podcast called the Wealth Formula podcast.
Nuts and Bolts
Buck trained as a medical doctor and qualified in 2008, however he didn’t last long in his first job as he had an entrepreneurial mentality. Buck says he didn’t like being told what to do and so being fired from his job was the best thing that ever happened to him, so he started his own practice and ran it like a business. By 2009 he was a self made millionaire, but he didn’t know what to do with the money. He didn’t want to put it in the stock market after the 2008 instability, and so because his father was a landlord for 40 years he decided to go into real estate.
Moving away from traditional investments
Buck has seen a recent trend in the market where people are moving away from traditional investments. This means that although people are still investing in stocks, shares and mutual funds most money is actually coming from pension accounts. Buck recommends that people divert money away from Wall Street and into real assets because the stock market is an unstable and potentially dangerous investment decision. We are currently experiencing a bubble and a correction could come at any time. Buck explains that recessions normally come every 36 months on average however the US hasn’t had one in 8 years meaning that we are overdue and being in constant growth mode isn’t sustainable. Currently the people who have made a lot of money on the stock market are trying to short it; this could be because they anticipate the bubble popping soon. By investing in real assets they can’t disappear and dramatically drop in value like stocks can.
Buck has several lines of investment in real assets, for example he invests in real estate, energy and precious metals. Real estate is a large part of this, but it’s important that it’s not the only income stream. Buck advises that investing isn’t saving for old age, its buying income that can eventually allow you to quit your job. Buck is currently working on two start-up investments; both are in the healthcare field. He is also an asset manager for a multifamily property and involved in a syndication business. Buck is currently looking to invest further in real estate assisted living projects in the Chicago area. He’s also learnt a lot from previous investments, for example the one he learnt the most from was a class D apartment building. It was managed by the owner who also owned other properties in the area, but the whole thing was a facade because the owner was funnelling money from his other properties into this building to make it look like the current residents were paying their rent. Buck learnt that you should always pick a property manager first and always go for bigger assets because it’s more difficult to falsify the books on a large asset.
Education in wealth management
Buck’s other main income stream is his education business. Buck found that many wealthy people didn’t know what to do with their money because they’d spent so long earning it they hadn’t had the time to learn wealth management. Buck saw that many wealthy people weren’t managing their money and instead they spent it all and then had to work harder to earn more for the payments on cars and houses. Buck’s philosophy is that if you have the capability to make the money they you can take the time to learn the language of investment and wealth management. The first lesson is to align yourself with the right people and invest in the person, not the deal. Buck has a podcast on wealth management education where he interviews people he knows, likes and trusts who might be offering an investment opportunity. His aim is to show that there’s a world outside Wall Street.
- A – Avoid assumptions of past
- C – cash flow – invest in things that cash flow
- U – Understand – if you don’t understand an investment then don’t invest
- R – Real things – invest in solid assets, not stock market. Real things keep value and create wealth.
- E – Essentials – focus on the things that people need – roof over head, food, water, heat (energy), security