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149: Real Investors of Wealth Formula: The Goose

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Buck: Welcome back to the show everybody. Today it’s a special day because we are doing something a little bit different. We are focusing not on the so-called experts. We’re not focusing on New York Times best sellers. We are focusing on a new series which we will have periodically called the Real Investors of Wealth Formula. And what I’m trying to sort of, if you haven’t figured out, I’m trying to parody this idea of Real Housewives. But anyway the Real Investors of Wealth Formula and so today I’m gonna kick it off with the Wealth Formula mascot himself his name is Jerry Gosnell and he’s the goose, right? He’s the goose. He is the mascot of Wealth Formula and he has been, the only thing I don’t like about Jerry is that he’s from Philadelphia and he’s an Eagles fan, but other than that there’s nothing not to like about this guy. He is in his 50s and for the past 35 years he followed that conventional wisdom that we talk about, investing in stocks bonds mutual funds 401ks and 529s you name it and it wasn’t until his late 40s and he realized one day that a single stream of income and the ups and downs of Wall Street weren’t really in his best interest when it came to the idea of financial success or this thing we call retirement. And it was then he decided to do something about it and began to get financially educated. So now Jerry is 52 and each day he gets a little closer to financial independence. He also gets a little older every day, right Jerry? And ultimate goal is to leave a legacy of financial literacy not only for himself but his children and create additional options of wealth generation for his family. Jerry!

Jerry: Buck, how are you today?

Buck: Buddy! So you know I gotta say one thing I was really bummed about was that so we had this event last week in Scottsdale and you know Jerry of course, I mean Jerry is hardcore and Wealth Formula Network never misses a call, you know he’s just you know he does everything he is hardcore about his personal finances and getting the most out of everything. But Jerry you could not make the meeting but it was for a good cause. Well what’s going on man?

Jerry: That’s right Buck, nice to be talking with you today. So the good cause was my daughter is on the USA Development luge team so she was up in Lake Placid and she won a gold medal in the Empire State game so I couldn’t miss that. It was either Wealth Formula or see my daughter luge and I’m sorry family takes first precedent.

Buck: No 100% agreed with that in fact that’s part of the Wealth Formula ethos and you know I’ll tell you, so you inadvertently or you know maybe it wasn’t inadvertently, but you followed the ethos. You did what was right, you you stuck with your daughter. Tell me though what so is that like sort of like Junior Olympics like the next up to Olympics or something like that? How does that work?

Jerry: This is like the bottom level if you will. So she was scouted when she’s 12 years old. She was scouted in a mountain in Pennsylvania here. She slid down there and there was a bunch of Olympians there and they said looks like she has some skills so they brought her up to Lake Placid and so she’s been training up there. The only issue I had with it she goes to a private school and I have to pull her out of school like seven weeks throughout the school year. It was a great school that is very flexible but yeah I’m very proud of her. Very, very proud.

Buck: So was she luging down or was she just sledding when they saw her? I mean what would she do?

Jerry: They actually set up a luge track this on the mountain and they call it luge search or something like that they’re looking for people that are potentially lugers. And I think they did place out of you know 20 people ages 10 to 20 and so my wife and I thought it was a joke and then you know we had her tested up there and they’re like yeah she has some potential so you know. Will she advance? Who knows but I always tell her name’s Brianna I said Briana listen for the rest of your life you’ve done something that probably 99% of population that’s not done and that’s slid down a luge track at 70 miles an hour, right?

Buck: More than that okay I think I would be like freaking out if one of my daughters was…but you know the the one thing that we’ll definitely do is Jerry if your daughter ends up at the Olympics we will have a Wealth Formula event at the Winter Olympics but it would probably be about four years from now I’m guessing right?

Jerry: Yes easily for maybe a little bit longer but yeah that’d be a great place. I’d love to.

Buck: So let’s talk a little bit about Wealth Formula because I think the whole idea on this is that one thing that I discovered at this Meetup and one of the reasons that this is I think a very useful type of segment Gary is that you know there was some really really good speakers there, right? We had Ken McElroy, we had Tom wheelwright and Damian Lupo blew people away. Christian Allen, you know the usual guys and they were all just awesome and then we had this super cool bus tour, we saw a property that you know a lot of us probably including you own a chunk of which is like killing it’s pro forma right now and it was all great, but I what people really loved was meeting each other and hearing each other’s story. So that’s one of the reasons we’re gonna start doing this. So tell me Jerry let’s just start out, where and why did you discover Wealth Formula.

Jerry: Yes it was about two years ago I was listening to Marco Santarelli’s podcast and he had a guy by the name of Dr. Buck Joffrey on and I say who is Buck Joffrey? So I actually I’d listened to your podcast I listened to that podcast and it just seemed like things meld what was coming out of your mouth, I’m like yeah that’s what I think too and that’s what I should be doing too. So when that was my first venue into Wealth Formula and I started listening to your podcast and I’ve actually went back I believe you know I’m the mascot so I know you but I’ve listened to all of your podcasts at least everyone that I could find and you know I think we think alike when it comes to investing I mean I think you’re at a different level than I am, I aspire to get to that level, but I also every time that I listen to your podcast I learned something new. And now that you’ve expanded this out to a whole tribe of people I find that that interaction on our Facebook group as well as our bi-weekly calls I learn a little bit more every day to allow me to get closer and closer to my goal. So I learned it really from you know I gotta give Marko Santarelli credit. At that time this is about you know I really started getting into a whole transformational mindset around financial education around 2015. I started by you know I bought my first property then and so on so I started listening to a number of different podcasts, but ultimately that’s how I came across Wealth Formula.

Buck: So you know and and that’s it’s an interesting thing that you bring up because even if you go back and lean listen to me early on, the things I say back then you can see my own evolution, right? I mean I say things that are probably directly contradicting what I used to say because I’ve changed my mind because that’s what normal human beings do and if you’re a student you’re constantly trying to learn new things and challenging paradigms. So listen, so when you were listening to Marco obviously you’d hit the sort of point where you were already shifting into you know what the what the dark side calls alternative assets, right? But tell me how things have evolved since then in terms of your thinking I’m curious like in terms of your own thought process how things have changed and not necessarily just because of me but we all start sort of at you know a similar spot. A lot of us you know including me start with this idea that hey all it’s really all about is just you know buying a house or buying an apartment building and cash flowing and that’s basically it. Give me some ideas on you know the the next levels of sophistication that you feel like you’ve gotten and what you can share with others.

Jerry: Yes so I think when it comes down to for me is I’ve been around on the planet you as I said fifty-two years. I remember the 87 crash, I remember 91, I mean I was younger then but I still remember transitioning. 2001 I remember it extremely well, of course 2008 everyone will remember and over that time period you know I started to really understand that Wall Street is rigged, right. And I think we hear that all the time everybody says that it’s rigged and all this other stuff but you really don’t start seeing that until one you’re a w-2 employee like I am and I still am, I love my job and I would love to stay there you know as long as I possibly can. But when you turn your money over to somebody and have them manage that for you without an understanding of what’s happening behind the scenes you basically lose control. So for some reason, and this may sound weird Buck but I was actually going to the supermarket walking down the aisle I had coupons in my hand and I’m picking out different things off the shelf and I had this epiphany almost going, is this what the rest of my life is going to be? And I was like there has to be a change so I’ve always managed my finances pretty well, I’ve always understood where the investments were at least from the stocks bonds mutual funds for one case all of that other stuff, but I also realized there’s no way I’m gonna be able to survive retirement as you will and I don’t plan to ever retire I want to keep doing things forever. But my mind shift started to happen when I start listening to these podcasts, but then I started realizing that there’s a better way that we’re just not taught in school and I know if you listen to Robert Kiyosaki and Tom Wheelwright and everybody else they all say the same thing, it’s not taught in school natural education is not there. When I started learning things like a self-directed IRAs, never knew that you could do that right when I started learning about life settlements which you know I invest in your life settlements fund, right? I never knew that existed out there right and so when you start working with like-minded people that are on Wealth Formula as well as others and you know outside of our network, you start to realize that there’s things out there from an investment perspective that you don’t know about. And so what I started really focusing on is how can I build wealth to give my give my family I options. If you have one stream of income right which I do with w-2 job and I didn’t have any other up until 2015-2016 somewhere in there, you know any time of day they can say you’re done and you’re out right and then you have nothing. So what I’ve been trying to do is build up these streams of income couple that you know I just mentioned there that I think are the key to survival. One thing I think my generation and I’m a gen Xer may not realize is, that if you invest all your money in 401ks if you’re a w-2 employee, the one thing we forget about is health care. Health care is probably going to be our biggest expense that we have out there and I don’t think we take into account that a 401k can bill bill bill and then we’re gonna have to draw and pay taxes on it which will probably be pretty high at that time when we retire, then we have to have a lot of it chunked out for our retirement for health care. And so when I started looking at all those avenues I said listen I need to create different streams of income besides my w-2 job. I need to invest wisely. Real estate is a big you know part of my portfolio that I go in, but I’ve also taken an account like Wealth Formula Banking as I said some of these other areas that we’re going in the Western Wealth Capital opportunities, I’m starting to see those returns as streams that are coming in that it’s going to be allow me to retire someday if I want, but also it gives me the opportunity to teach my kids, see there’s a better way. You want to go to college great. If my daughter wants to be a professional jockey that’s great, but I want to show her that there’s another way that you don’t have to work for somebody to do that, you could do this yourself. You manage your own asset.

Buck: So when you’re doing that Jerry when you’d made that shift, it couldn’t have been easy right? I mean at first where you starting to were you kind of doubting yourself wondering if you were doing something wrong, sort of you know doing something irresponsibly, doing things that were outside of the norm, did you have those kind of sensations or were you pretty confident about your shift?

Jerry: Yeah so when you have to write that first check for the first property that you purchase, that single-family home but still it’s a big chunk you’re taking out of your savings and they wasn’t gonna see the return on that you know that was a kind of a shock but I got over it. I think the hardest thing for me there was really two things. One my insurance agent my life insurance agent and you and I, I think had the same insurance provider for a while well I’ll tell you what he gave me a Roth on the phone you want to do what you want to pull your money out to go back even with me so I can manage it for you I’m only charging a 2% a year and blah blah blah you know that type of stuff so that was one shock. And then I guess the other shock is you don’t realize it until you start writing these checks and getting some of the income coming in and the tax benefits that go along with it, you never realize that as a w-2 employee, right? Because your tax they’re taken out for you so though it becomes a mind shift what also becomes a mind shift and scary is debt, right? I leverage myself like crazy now, but at first that was taboo, right? You know oh my gosh you’re carrying this much debt but then when you say well I have a tenant paying for this, right? The tax and all the advantages you get up that’s an example right then you start realizing it’s okay you can do this as long as you’re investing wisely from a debt perspective.

Buck: Yeah and there’s ways actually even to participate in debt without necessarily even being on the hook. We talked about these syndications that I know of you participated in a number of them we’re talking about 70 percent loan to value etc but you’re on the limited partners side so I mean you’ve got all the debt but you have no risk.

Jerry: Exactly

Buck: So that you’ve got the opportunity to sort of have your cake and eat it too as well. And these are the kinds of things that like you kind of don’t really discover until you start digging in. The thing though I got to tell you is that Robert Kiyosaki and Tom who you know is my CPA Tom Wheelwright and all those guys, they’re right. People don’t get taught this stuff in school. But I don’t think anybody gets taught this stuff in school I mean even MBAs I mean I think the people who probably should be best positioned to really understand how the world works is people who study accounting and of course I think those are probably the least inclined to sort of bend the rules. I don’t think MBAs know engineers or doctors I don’t think any of us, the dentists seem to for some reason it’s the dentists I know tend to be better investors but the rest of us are kind of in the dark. So tell me about, so you were doing single-family homes and obviously you’re doing a lot more than that now. Tell me about some of the things that you’re doing now that made you feel good about him you know various investments, you mentioned life settlements I think you talked about Wealth Formula Banking, but how is your perspective changed? Because I mean again you look at it and say all right I’m gonna buy a house you know write a check but how do you go from there and then say now I’m gonna say alright well I’m gonna invest in this syndication or I’m gonna look at this and you know look at a like a conservation easement or something like that. Tell me about that evolution.

Jerry: Yeah so again like with anything I think you have to you know you have to do your due diligence. So you know when you and I first started speaking and you were telling me about conservation easement I was like what? I remember our first conversation there was three things that you actually pointed out as a w-2 employee, right? Oil gas investment, conservation easements, I’m trying to remember at the third one was I forget what it was but it was important but I forget what it was. It’s oil taxes I think of the other was, you know ways to that’s a look at ways to save on taxes. But the conservation easements I take that as an example right we’re not when I first looked at that I didn’t understand what it was but when you do your due diligence on it you realize as a w-2 employee that you can take half of your income if you will and push yourself in a whole different tax bracket and then use that money that you save to basically it’s tax-free and apply it to somewhere else and what I did is I bought the syndications or I bought another real estate or other property help compound this wealth if you will, right that I continue to try to grow on a daily basis. So those type of aspects and those things that I look at every day, your mind just starts to change and you as you back further and further away from 529 plans and 401k plans and all of that other, you start seeing that there is a whole different world out there that allow you to excel your wealth more rapidly and you have control of it not somebody else. I mean AHP as an example. You know when I first learned about AHP you know there’s a 12% return which was great net anywhere else. Yeah all right let me dabble in this you know we’ll take that dabble money put a couple thousand in there check it out right hey guess what I got a check the next month, I got a bigger check next month and it just started compounding on there and then you look at your bank account then you say well wait a minute I had that same thousand dollars in my bank account and I made X. AHP, I made XXXXX. Wow you know you see that big difference. I actually did this with my kids. I took them to the bank and I said okay let’s open a savings account for you, we’re gonna put some money in there that you’ve earned and then I’m gonna match that same amount of money in AHP and let us see at the end of six months how much money you made in the bank compared to how much you made in AHP. It was the first step for them understanding there’s a better approach and there’s a better way.

Buck: Yeah of course Jerry is talking about AHP servicing which is my friend Jorge Newberry’s company, the company he started which deals with non-performing notes and they’re really really really good at this stuff. It’s not 10% or 12% anymore, it’s 10% but it’s still worth looking into. It’s AHPservicing.com and you know one of the other things I think that that brings up is how do you choose investments, right? How do you choose them now as opposed to say before you start listening Wealth Formula or before because listen one of the things that accredited investors, people who’ve got some money, they get bombarded with the deals, right? So how do you sort through those deals now and how do you look at them now as opposed to maybe which might have done a couple years ago?

Jerry: Yes so I think it depends on what the deal is, but it’s up to you to do your due diligence. In the past my 401k as an example, I would go in and press one button, I have a vanguard account right, you press one car and it allocate all the funds out right allocate here you want to go based around your retirement then you can go in and look at those mutual funds and say I like this and like that change this and change that. Now I take an active approach at least in my investments of saying you know I want to see the pro forma, right? I still buy single-family homes. I know that’s when I grow it as well sure you know investments as well the pro formers are critical but also I think when you’re working with like-minded people like we are on Wealth Formula you get a better perspective of what’s happening out there and that helps you make up your mind what’s a good investment and what’s not if you’re on our our calls our bi-weekly calls and one of the reason why I try not to miss any of them or if I you know rarely miss one I have to listen to recording, there’s always that little tidbit out there if somebody’s saying I invested in this and it failed because of X. That’s a lesson you learn. In the pro formas you know fortunately I know how to read 401ks I do that you know as part of my w2 job I have to understand what my customers are doing so I understand how to read those pro formas but I think that’s actually my mindset has changed compared to just pressing a button and saying somebody else do it for me, I can do it myself now.

Buck: Yeah and on top of that I think what you were getting at I think is really important is that you’ve realized the value that I’ve advocated for this for a long time is it’s not just the numbers, it’s the people and so one of the benefits of having tribe, one of the benefits of having people who you know like and trust, is that you can say hey have you guys happened to hear about this group or have you had any experience with this. I remember one specific call where I almost ended up having somebody on as a guest on the podcast and then because of a good and I won’t mention any names but and it turned out that this was a turnkey provider and that turnkey provider ended up in I don’t know what sounded like essentially a Ponzi scheme and I found out about that through our calls, right? I found out through that and that was huge right because not only did that save, well frankly it saved me because I don’t want to promote somebody who potentially could could be part of some sort of Ponzi scheme, but in the larger scheme of things, I had a group from you guys who I could say hey you guys know this guy? Oh yeah I know that guy and here’s what happened, right? And that is invaluable because it’s not just about what you actually what you do investing it’s what you don’t invest in and and that’s been really critical.

Jerry: I mean we have people that are on our calls and part of our tribe right that have dabbled if you will or heavily invested in multiple areas, you know we have folks at oil and gas right all the way to life settlements all the way down the line there and you learn after a while, you know I think in the world of finance everyone’s always skeptical, right? Is somebody trying to throw me something that’s you know gonna steal my money. But what I found with our group is that we share a lot of information and we it’s up to us to do own due diligence of course right but it’s also you start you just when you’re working with people that you you always say this, know like and trust, you start saying okay well you know that’s something I need to consider. It’s kind of that Amazon if you will rating. When you think of this I’m gonna do this you know one through five you know how Buck says is a five somebody else’s in three somebody else says a four then you can help that helped make your mind up and then it just doesn’t become about the numbers it comes out what’s best for you, what’s best for your family and what’s best really for the tribe that we’re working together on.

Buck: Well which the other thing that was interesting is like for example and again I don’t want to name specific companies just because you know good or bad, we do that on the calls but not here, but a number of people were interested in oil and gas and Tom Wheelwright talks about how oil gas is incredibly valuable potentially for w-2 employees because you can write up your income against it, but he’ll also tell you that it’s an area that’s fraught with crooks, right? Fraught with like you know people who are basically just taking your money and in some cases are not crooks but they’re taking all your money, but they’re not putting anything in and if they strike goal or you know if they strike gold, black gold then they win, if they don’t you you lose in. So it’s a tricky space to be in so what I was able to do is, and I’m not a big oil and gas guy, but what I was able to do is to take all of what you guys talked about, all the companies you mentioned and to individually do my own personal due diligence on it and then essentially take that compare that, conglomerate all that information and bring to something to the group that said hey this is the group that I think that if if I were going to invest in oil and gas this is what I do and here’s why. So it’s all part of that now and again you know I wanted to try to be careful not to make this just like a you know a commercial or whatever for Wealth Formula Network and basically what Wealth Formula Network what Jerry keeps talking about is this is with the course if you go to WealthFormulaRoadmap.com you’ll see there’s a course and the course is really you know foundational, right? You’ve got Tom Wheelwright and Ken McElroy and Real Estate guys and Dean Graziosi and all those guys on there but I think the real value that everybody seems to be getting being on that is the fact that we have this Facebook group that we have these bi-weekly mastermind calls. Jerry talk about if you would, how would you describe those calls and tell me how they because I know you wanted to talk about this a little bit, tell us a little bit about that because there was a lot of people asking about it at the meeting tonight I just hate trying to sell something like this.

Jerry: Yeah you know I don’t think you need to sell it because I think it sells itself, at least in my opinion and I think the other folks in our tribe would it would agree the same way. So when you when you put together that course which was phenomenal and I would suggest everyone look into purchasing it because it’s I think it’s a worthwhile investment, it’s at you can even say hey listen I’m gonna go take a course at a local community college instead of doing that take this course because you’ll learn probably a lot more.  But I think our bi-weekly calls again as I mentioned before really help not only the the the group melt. There was one call Buck that you couldn’t make right and there was a lot of silence on the phone but there was also some collaboration that happened as well, right? You know we’re Buck’s tribe if you will, the collaboration still exists, hey you died some questions anybody buying single-family homes here? Somebody else had a question or talked about some event that happened in Dallas that they went to and saw some presenters out there. So you know it’s my first experience in a mastermind group if you will and if all masterminds were like this I’d say everybody should do it. You know I’m sure each mastermind group is different but you know my take on it and one of the reasons why I try to attend every call or at least listen to the follow-up is again as I said before you always get a nugget of a little bit information and that knowledge you get out of it is priceless in my opinion. And I think I would hope that some of my other you know fellow tribe members would would probably agree to that as well.

Buck: Yeah and I will add that add to that and that, I learned from the group every time as well I mean it’s definitely not me just talking. I mean gosh when it came to oil and gas initially I was barely talking at all you guys were doing all the talking there.

Jerry: But you know what’s nice, Buck? There is a range. we have a range of people on this mastermind group that some make a lot a lot of money right, some of us are on the lower side of that, right? But we’re all contributing to the success of everybody else and that’s where I think the big value is. Somebody who you know is trying to aspire to their financial independence where they allows their options to be a lot better for themselves. They can listen to those folks right but they can also contribute some ideas that the other folks didn’t know about to say well I didn’t know that, that’s not cuz you’re gonna help them so it becomes a a great collaborations and a quid pro quo amongst all of us.

Buck: Any experiences that people have inherently are different and it’s helpful to know I mean for example I remember you were talking about one time how you bought a whole life policy some time ago. Overall it was not it was something that you’re still happy that you did, was not structured as optimally as maybe some of the Wealth Formula Banking policies are, but you were able to add color to those who are even thinking about doing something like that in the first place because you know a lot of people have reservations about those kinds of products but you actually had a very very positive result.

Jerry: Yeah and that positive result was really you know when it comes down to it’s very much like the Wealth Formula Banking is, you’re able to put money aside and be able to use that it double dip as you always talked about, right? And so a lot of those funds that I’ve been investing in whole life insurance for the past you know 15 years or longer, I was able now to use those funds to purchase real estate and grow my wealth that way and then pay myself back.

Buck: Right I mean you found a way to actually make the interest rate even lower than borrowing from the policy. So again just layers and layers of stuff that I think is really neat. But anyway I just you know I don’t want to keep you too long Jerry but I think it is it’s really great having you as part of Wealth Formula Network and tell us, you know any parting words or thoughts or anything you gotta plug.

Jerry:  I really have nothing to plug per se except you know everything that I talked about. I would I would encourage anybody listening to this podcast to take a look at what the content that you put together and what your team has put together and our tribe is actually working on. I will say that I am, now that you talked about in more detail how the event went and the drinks you guys had and the collaboration, meeting all those people it makes me even feel worse but I keep reminding of why I couldn’t attend.

Buck: I meant plugging for yourself but but thank you for plugging me anyway. But yes we will have another event. Jerry, as you know Mike and I, and I said this in our group or mastermind is one of the reasons why you know we capped it at a hundred and stuff is to you know make it more intimate, but it was also I was terrified I just didn’t know if people would show up. And the next you know there was this group of you know 100 plus individuals that are just extraordinary in the audience and it was um it was the best event I’d ever been to from a crowd standpoint. It was really terrific and so we’ll do that again, hopefully we’ll do it somewhere, we may do it somewhere that’s maybe a little bit more central. We were talking about maybe doing Belize or something like that, but that’s not really central maybe we’ll do something like Dallas because we own a property there too. So yeah but anyway I’m gonna let you get back to your to your family. Jerry thanks so much for being on the show.

Jerry: Thanks Buck I enjoyed it. Appreciate your time.

Buck: We’ll be right back.