What Do Millionaires Like to Invest In? With Buck Joffrey | 154

MORI 154 | Millionaires


We hear what investments many believe you should do, like 401k’s and IRA’s.

But what do millionaires REALLY invest in?

Why do they think conventional retirement plans are a joke?

Join our host and Cash Flow Expert, Chris Miles, as he brings on his guest, Buck Joffrey, MD, to discuss what investments millionaires know about that you don’t, and why mutual funds are ridiculous.

Tune in now!

Buck Joffrey Bio

Buck is a physician, entrepreneur, asset manager and podcaster. He has enjoyed a great deal of success through his businesses and investments. In order to help his high paid professional colleagues, he created a financial education website called http://www.wealthformula.com/ which serves as home base for the Wealth Formula Podcast, available on Itunes, Sticher and HERE!


Chris Miles Bio

Chris Miles, the “Cash Flow Expert,” is a leading authority on how to quickly free up and create cash flow for thousands of his clients, entrepreneurs, and others internationally! He’s an author, speaker, and radio host that has been featured in US News, CNN Money, Bankrate, Entrepreneur on Fire, and has spoken to thousands getting them fast financial results.

Listen to the podcast here


What Do Millionaires Like to Invest In? With Buck Joffrey

I’m excited to have you here. Again, I’m excited to see the numbers keep growing and see more of you showing up and talking about this and sharing it with your friends. Keep it up. This is great stuff. The whole point of this is creating freedom for you and freedom for those around you too. A word from our sponsor here, American Homeowner Preservation. I know our guest knows these guys pretty well as well, but if you’re looking to make great returns and make a difference, especially where he can make a difference in people’s lives, this is one awesome thing to take a look at.

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I want to welcome our guest here. I’ve been on his show and been introduced to and have been very impressed. He’s an amazing guy, a go-getter, and a brilliant man by the name of Buck Joffrey. He’s like Batman. By day, this guy is a neurosurgeon and a brilliant man. By night, he’s also a brilliant investor. This is something that he does almost more than he does as a neurosurgeon.

I want to welcome him on because I want to have you guys learn about what it means to become an accredited investor. How do you create those passive income returns, especially if you’ve got assets? If you’re looking for something that’s different, a different solution, something that allows you to be able to do something that’s out of the norm or conventional crap of high mutual funds, this is a show you’ve got to tune into. I want to welcome Buck Joffrey. Welcome, Buck.

Thanks for having me.

Tell them a little bit more about yourself. How did you end up being where you are now?

I started out in neurosurgery. I realized quickly in my residency, for a couple of years in it, that I didn’t like the hours. I ended up doing a head and neck, and then ultimately did a fellowship in plastic surgery. I have trained all over the place. I trained for a lot of years. In 2008, I finished my training, and the day after my residency, I got married. We left for our honeymoon the following day for Puerto Vallarta.

On the way back, I picked up a book from a dingy shop in Puerto Vallarta, it was called Cashflow Quadrant. It’s either Cashflow Quadrant or this book with this wavy long-haired half-naked guy on it, so I picked Cashflow Quadrant. I didn’t have any idea who Robert Kiyosaki was. I had the good fortune of meeting him last week and it was great. I had no idea who he was, but his book, ideas, and paradigm shift completely transformed me. I went from being an academic surgeon to a raging entrepreneur and I took a lot of bumps and bruises along the way but started a fair number of businesses over the last seven or eight years. Now, I am a full-time investor and podcaster.

The self-employed people want independence, but they don't really know they're not free. Click To Tweet

Robert Kiyosaki celebrated his 70th birthday last Saturday or last week.

He did. Did you see the picture with me?

I did. It inspired me to make a post about the launch of Rick Dad Poor Dad, which was exactly 20 years ago. It was on his 50th birthday that he launched that book. You went for that freedom path. Tell me more about your colleagues or those people that you’ve worked with. Describe their life because most people think, “If you’re a surgeon or doctor, you’ve got to be amazing. You probably have all the freedom in the world.” What’s the truth there?

It’s a golden handcuff, that’s what you call it. You’ll leave a residency and you’re making nothing. You’re working crazy hours and it comes out to minimum wage. I was at the University of California-San Francisco, a very expensive city, and made about $50,000 in my last year of training, which was the highest-paid part of the training. I was broke.

People come out of these residencies and they immediately go into a six-figure salary job. They immediately shift their life to accommodate the additional income. You can’t blame them. You have this deferred time in your life where all your friends are out there making decent money and you’re in your 30s and finally, you’ve got some money and want to buy a decent car, and maybe buy a house or something like that.

Before you know it, keeping up with the Joneses, you’ve effectively wiped out the additional income that you’ve gotten and now the excess income that you’ve got, you have no idea what to do with it because you’ve never made money in your life. You’d do whatever other person does. You give it over to somebody called a wealth manager or something like that, and then they go and initially take 3% right off the top. You watch your money flatline for the next 30 years or you die broke.

You have a lot of money, but it’s not doing crap for you. It’s so true. I’ve seen that with a lot of people and some people that you and I have known, or people like them where they made great money, but still in the rat race. You’re still caught in that. It’s a shock to many people. There are a lot of business owners here too, not just people that work at a great W-2 income from their job.

Whether it be a doctor or whatnot, even business owners that make great incomes are still stuck. They went into business for freedom. They wanted to get themselves out of the rat race so to speak by controlling their own income and time. They went and find out they basically bought themselves into a job. They don’t own a business, they just don’t want a job.

MORI 154 | Millionaires
Millionaires: The uber rich generally make their money through private investments.


Kiyosaki talked about this in Cashflow Quadrant and you talked about it last week again, the different parts of the quadrant, the ease, the people who are W-2s. They’re primarily people who claim the idea of security. It’s funny though because once you’re on the business owner side of it, you realize there’s not a whole lot of security. The only thing between the W-2 employee and reality is a veil that prevents them from seeing the P&L. They have no idea what’s going on with the business and they interpret that as security. Whereas the self-employed people, they want independence, but they’re not free. The farthest from freedom at all. If they don’t work, they don’t get paid.

Let’s talk about that because I love the topics that we’ve talked about with creative investing. For us, it’s not that creative because it’s become more common even though it’s not mainstream for anybody else. Talk about your experience there, but first and foremost, what is an accredited investor? Are they professional investors or is it something different?

An accredited investor is a label. You’re either an accredited investor or you’re not. It’s like you’re either pregnant or not. It means that the SEC defines you. It is somebody who makes $200,000 or $300,000 per year if you’re filing jointly or has a net worth of $1 million outside of a personal residence. This is a fairly outdated paradigm because the idea was back in the day after the depression and stuff, that somehow if you made that much money, you are smarter than people who didn’t.

Therefore, you could invest in “riskier things,” like private investments, etc. There’s also a class called a sophisticated investor, which has a nebulous definition. It’s somebody who doesn’t meet the criteria as an accredited investor, but who’s had a fair amount of experience investing in “alternative assets.” It’s a definition.

Some people would fit that category and they’re reading this right now. As you said, they get better options. What are some of those options that they can get?

The big thing is that most of America or 99.9% of America think that the way you’re supposed to invest and the only way that you can invest is through the equity markets, stocks, bonds, and mutual funds. What you find is that the uber-rich generally make their money through private investments. They make investments in offerings that are being sponsored.

Maybe there’s like a skyscraper being built and there’s an opportunity to invest in that, another apartment building, or a hotel somewhere. That’s how people are making real money. They’re investing in tangible things that are real and don’t fluctuate by 50% because of some strange thing that happened overseas and who knows why. United’s stock fell. Did you see that?


A lot of things are actually available to people who are not uber rich, but still are high paid professionals. Click To Tweet

Their capitalization went down by $1 billion because they dragged out a guy from his seat. If you own United stock, you’re like, “What? Are you crazy?” That doesn’t happen when you own real things, but it’s hard to own real things. Unless you’re a real estate person and you go out and buy your own real estate. That’s great. I strongly advocate that, but there are a lot of busy people out there who want to invest in ways that are tax-advantaged, potentially more profitable, and can take advantage of a lot of the tax laws and regulations by investing in private offerings as a limited partner. Those typically are what accredited investors get.

The whole point of my show is to take the tools and the knowledge from this uber-wealthy world that a lot of us have a suspicion that exists. It does exist, but the good news is that a lot of those things are available to people who are not uber-rich but still are high-paid professionals. I’m trying to bring that down to their level and tell them about it.

For me, it was about 2006 when I started this journey. I was a financial advisor. I was a traditional guy that you’d hear teach conventional crap of saving for the long haul, putting it in mutual funds, or other kinds of things similar to that. It was in 2006 when I left that because I realized I couldn’t teach them that didn’t work anymore. I realized that pretty quickly. There were lots of people, especially those that were millionaires that would laugh to scorn buying paper assets, which is all you’re pretty much offered for the most part.

Most people offer paper assets, which means that you’re saying stocks, bonds, or mutual funds, that stuff. They viewed it and now, I view it the same way as being the poor man’s version of investing, the person that’s going to get lackluster returns, if they’re lucky. As you’re saying, you’re going to get flat to very few returns for a lot of risks. Where these kinds of things you’re talking about, granted that everything is different and every opportunity is different, you can’t make claims, but making 6% or 7% seems like a joke to a millionaire. “Why would I do that? That seems dumb.”

It’s the unfair advantage of the uber-rich. If you dig deep and that’s what I’ve been trying to do for the last several years, you can unearth a lot of these things and say, “I can do that too.” There’s a reason why people have been investing in the equity markets and consider that mainstream. It’s because the banks advocate for that. That’s how banks make money and the banks ultimately control everything.

What’s happened is that it is ingrained in us, culturally, it’s almost religion. It’s a belief system that we grow up with. Maybe your parents invested in stocks and bonds, and they had a financial manager, and so on and so forth, and they never did anything, “risky.” Therefore, when you come out and even if you learn this stuff and you think, “That makes sense.” Everybody turns around and said, “Are you sure you want to do that? That sounds a little risky.”

It’s like religion and you don’t want to sin. You don’t want to do something that you’re not supposed to do, even if it seems like it should be okay. There are people telling you that it’s not, so maybe they’re right, but then you look at the assets. I own some apartment buildings here in Chicago and one of them was 80 years old. That is an apartment building that’s been there for 80 years. It’s a business. Revenue comes, expenses go out, and the profit comes to the owner. That business has been there for 80 years making money and it’s still there. How many businesses in America are in the stock market right now and are 80 years old?

The ones that don’t pay you much.

MORI 154 | Millionaires
Millionaires: That’s how people are making real money investing in tangible things that are real, that don’t fluctuate by 50% because of some kind of strange thing that happened overseas.


They call them alternative assets though.

That’s the thing I tell people all the time. Just because something is unconventional, it doesn’t mean it’s risky or bad. In fact, in most cases, unconventional usually is better than conventional. If you look at conventional society or people, in general, they’re flat-out broke. No matter how much they have in their IRAs or 401(k)s, they’re still not generating any real cashflow from it. It’s not creating any real freedom. It’s a number on a piece of paper, but they’re still trapped. You’ve had deals like that hotel deal in Belize, for example.

It’s still open. I closed one and then we happened to get off a waitlist and grab another one. There’s a luxury resort and I’m not allowed to say which brand it is, but it’s a very well-known luxury resort that we’re buying fractional ownership in Ambergris Caye, Belize. That’s an opportunity again. It’s open to accredited investors. The return profiles are good. You don’t often get to do those kinds of things by investing in the stock market and stuff like that.

These are the kinds of things you never hear about.

That’s why I’ve got The Investor Club, which is part of my listeners who are accredited can sign up for and then they can see these kinds of potential deals, and also get a lot of the information that I’m talking about that’s typically not available to the general public.

They’re awesome. I’ve seen some of those that come through. It’s pretty fun. By looking at some of the pictures of the beaches and resorts there, I’m like, “Oh, my gosh.” I almost buy the two weeks of every year or whatever it is for free.

The hotel is phenomenal though.

That’s the kind of place you do want a vacation to.

Revenue comes in, expenses go out, the profit comes to the owner. That's a business. Click To Tweet

You can see it and you’re like, “I’d like to own part of this.” You can.

It’s not like those degraded properties you’re buying in Detroit or something like that.

Belize is neat too because it’s a hotel. Should you be investing in hotels? First of all, in this hotel, for breaking even it’s like 10% occupancy. The other thing with Ambergris Caye, Belize in 2008, when everything went downhill very badly, there was only a 1% decrease in tourism. That’s better than the vast majority of the multifamily market.

That’s something that’s not as affected by certain types of recessions as others. What are other kinds of deals that people might see as accredited investors? What do those look like? You don’t guarantee anything, but what returns have you seen?

If it doesn’t project a return of double-digits, I’m not interested. That’s my general guideline for things that we see come through. Some of my sponsored deals, the things that I’m putting together, and some are from my network. The other key point about the ultrawealthy and the uber-wealthy is they invest with people who they know, like, and trust. Being able to be part of a network where at least when you look at a pro forma, you can believe it is very helpful. A lot of people will show you stuff and you don’t know if you can trust it or not. At least, if you know the people and you trust them, you can look at it and say, “This is what they truly believe is going to happen.”

Other types of deals, one is multifamily. With larger apartment buildings, we keep getting very close on assets in Dallas-Fort Worth. We lost a $17 million deal to a group of Chinese who didn’t care about cashflow at all. That’s hard to compete with. Some of those things are tough right now because of cap rate compression and that sort of thing. We’re not going to pay too much.

I’ve had people on my show who have shown deals for ATM machines, not on my show, but on an investor club. Also, for mobile home park deals, it looks like I’m probably going to have some storage facility opportunities in the near future. It’s a full spectrum of things that make sense. I love real estate and multifamily, that’s what I understand. If there are other opportunities, I want to put it out there because if I’m interested in investing then others might be too.

You mentioned your show, how would people be able to follow your show?

MORI 154 | Millionaires
Millionaires: The other key point about the ultra wealthy and the uber wealthy is they invest with people who they know, like, and trust.


The podcast is Wealth Formula Podcast and the website is WealthFormula.com. You can access the podcasts from there or from iTunes. The website’s got some information on it. I started something called the Weekly Wealth Widget, which is handing out these little morsels of financial information to increase your IQ surely but shortly. You can sign up for The Investor Club there. It’s worth checking out.

Any final words of wisdom that you have, Buck?

You listen to Chris Miles. This guy knows what he’s talking about. Chris, when you were on the show, it was a very popular show. A lot of people enjoyed the content.

That’s awesome, that’s why I like when great minds get together. Buck, I appreciate you for being on. Everybody, follow the podcast and check it out. Buck has got great information and stuff, especially if you’re looking to go into that world of investing, whether you’re a business owner or an employee, especially if you’re an employee. If you’re not looking to go into the business world, then the investor quadrant is the quadrant to look at. That’s an amazing show to follow and check out.

If anything, to expand your vision, broaden horizons, and see that there’s so much more, you’ll start to have the perspective that Buck and I have, which is the typical mutual fund and 401(k) crap is a joke. It’s a laughing stock of anybody who knows money. You do not want to be there. It’s awesome. Check his Wealth Formula Podcast. Buck, thank you so much. You’ve been awesome.

Thank you, Chris.

Everybody else, thanks for joining us. Join us again next week as we come back and give you some more great stuff. To my fellow Ripplers, I’m signing out. Have a wonderful, prosperous week. We’ll see you.


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