553: How To Think about Taxes
Wealth Formula Podcast
If you’re paying a ton in taxes right now… it’s because you’re playing the wrong game. Most people think taxes are about income. They’re not. They’re about behavior—more specifically, incentivizing behavior. The government is constantly telling you what it wants through the tax code, and once you stop looking at it emotionally, it’s actually pretty obvious. It wants businesses. It wants jobs. It wants housing. It wants capital deployed in specific areas like energy and infrastructure. And when you do those things, it rewards you with lower taxes. Now contrast that with the...
info_outline
552: The Inflation Spike Everyone Will Misread
Wealth Formula Podcast
This week, you’re going to start hearing a familiar narrative again… “Inflation is back.” And on the surface, it’s going to look true. The next CPI print is very likely to come in hotter than expected. We’re already seeing it in real-time data like Truflation. Energy prices have surged, and because energy feeds directly into headline CPI, it’s going to push that number up—fast. But here’s the problem… That’s not the whole story. Energy is notoriously volatile, which is why the Fed focuses more on core inflation—stripping out food and energy. But even core isn’t immune...
info_outline
551: Entrepreneurship Built for A Students?
Wealth Formula Podcast
Most people assume a high income leads to wealth. Sometimes it does. But more often, it leads to a very comfortable lifestyle that depends on getting paid dollars for hours. There’s nothing wrong with that. For many people, the best path is to keep doing what they do well and invest their income into real estate and other real assets. That alone can create significant wealth over time. But if you look at the people who build outsized wealth, there’s usually another element involved—they own something that scales. The key difference isn’t how hard they work. It’s what they own that...
info_outline
550: The Only Economists Worth Listening to Right Now
Wealth Formula Podcast
If you spend enough time listening to economists, you’ll notice something interesting. They rarely agree. Over the years on the Wealth Formula Podcast, I’ve interviewed economists from across the spectrum—Keynesians, Austrians, monetarists, market practitioners, academics. Some are bullish about the next decade. Others are extremely pessimistic. But there’s one thing that almost all of them have agreed on in private conversations. The entire economic outlook changes if artificial intelligence dramatically boosts productivity. And that possibility is no longer theoretical. The Latest...
info_outline
549: You’re Successful… Until You’re Not — with Rod Khleif
Wealth Formula Podcast
I recently had a long conversation with a very successful professional. He’s 58 years old. Highly educated. Respected in his field. Financially sophisticated — in fact, his job depends on understanding money. If you looked at his résumé, you would assume he was completely set for life. He wasn’t. A couple of bad investments. Some concentration risk. A few decisions that looked reasonable at the time. And suddenly he’s essentially back at ground zero — trying to start a new business at 58. This story is far more common than people realize. The Dangerous Assumption is that many...
info_outline
548: AI Is About to Trigger an Energy Crisis Most People Don’t See Coming
Wealth Formula Podcast
There is one truth that has followed every major technological revolution in human history. Energy demand always rises to meet technological capability. When we industrialized, coal consumption exploded. When we built the modern transportation system, oil demand reshaped global geopolitics. When we entered the digital age, electricity quietly became the backbone of the global economy. And now we are entering the AI era. What most people don’t appreciate is that AI is not just a software revolution. It is an electricity revolution. Training a single advanced AI model can consume as much...
info_outline
547: Home Ownership: The Good, The Bad, and The Ugly
Wealth Formula Podcast
There’s a moment most high-income professionals remember clearly. It’s when the first real money finally starts coming in. If you’re a doctor, it’s when you finish residency training. And almost immediately, the world starts whispering in your ear: “It’s time to buy a house.” Not just any house. The nicest house the bank says you can afford. And that’s where people unknowingly sabotage one of the most powerful wealth-building windows of their entire lives…by becoming house poor. You see, the bank is not qualifying you based on what will make you wealthy. They’re qualifying...
info_outline
546: A Review of Retirement Account Strategies
Wealth Formula Podcast
At some point in a successful career, taxes quietly become your largest expense. Not housing. Not lifestyle. Not investing losses. Taxes. And unlike most expenses, they grow automatically as your income rises — unless you deliberately structure around them. You know that my favorite means of tax mitigation is through investing in real assets like real estate and operating businesses. That approach has been the backbone of my own strategy for years — taking active income and redirecting it into assets that generate cash flow while providing meaningful tax advantages. I’ve also...
info_outline
545: Should You Invest in Hotels?
Wealth Formula Podcast
For most of my career, I’ve been focused on two things: Operating businesses and Multifamily real estate. The strategy has been pretty simple. Take money generated from higher-risk, active businesses… and move it into more stable, long-term assets like apartment buildings. That shift—from risk to stability—is how I’ve tried to build durability over time. Now, to be fair, the sharp rise in interest rates a few years ago put a dent in that model. But zooming out, it’s still worked well for me overall. So I’m sticking with it. That said, there are other ways to think about real...
info_outline
544: Why the Sahm Rule Matters — and Why the Big Picture Matters More
Wealth Formula Podcast
This week’s episode of Wealth Formula features an interview with Claudia Sahm, and I want to share a quick takeaway before you listen — because she’s often misunderstood in the headlines. First, a quick explanation of the Sahm Rule, in plain English. The rule looks at unemployment and asks a very simple question: Has the unemployment rate started rising meaningfully from its recent low? Specifically, if the three-month average unemployment rate rises by 0.5% or more above its lowest level over the past year, the Sahm Rule is triggered. Historically, that has happened early in every U.S....
info_outlineHomeownership has been baked into the American Dream for nearly a century. Politicians, parents, and banks all tell you the same thing: “Buy a house as soon as you can. It’s your biggest asset.”
But as a real estate guy who actually understands how wealth is created… I’m not convinced it makes sense for everyone—especially early in your career. Let me explain.
Say you finally start making some real money—maybe you’re a doctor fresh out of residency. The cultural script kicks in immediately: Buy a house. Build equity. Feel responsible.
But here’s the part most people forget: your primary home is not an asset. As Robert Kiyosaki puts it, if something takes money out of your pocket, it’s not an asset—it’s a liability.
According to Bankrate and the Census Bureau, U.S. homeowners spend around $17,000 per year just to maintain and operate their homes—and that’s before you make a single mortgage payment.
That’s property taxes, insurance, utilities, landscaping, repair bills, HOA fees… the list goes on. If your house is worth $1.5M, even the bare-minimum 1% annual maintenance rule hits you with $15,000 a year just to keep the place from deteriorating.
Add insurance, taxes, utilities, and everything else, and you’re looking at $30,000–$40,000 per year in unavoidable, non-negotiable carrying costs.
And that still doesn’t cover the roof that fails, the appliances that die, or the curveballs Mother Nature throws at you. None of that feels like an “asset” to me.
Now, to be fair, people don’t usually buy homes as investments. They buy them for stability, a place to raise kids, a sense of being “settled.” It’s emotional. It’s psychological. And it’s real.
But if you’re young—and especially if you haven’t hit your first million—it’s worth asking yourself a tough question: Is buying a home right now the best financial move… or just the most familiar one?
Because historically, U.S. home prices appreciate around 4.3% a year (Case-Shiller). Meanwhile, the S&P 500 averages closer to 10%.
And if you're in real estate investing? A solid multifamily value-add deal often targets 16–20% IRR—plus tax advantages your primary home will never give you.
So if you’re just getting started, it might make sense to delay that home purchase. Invest first. Build your passive income. Let your assets—not your salary—pay for your lifestyle.
Then when you do buy a home, you’ll be doing it from a position of strength, not strain.
The irony is this: waiting often gets you to the dream home faster because your capital compounds instead of being trapped in drywall, windows, and a backyard you barely have time to enjoy.
This Week on Wealth Formula Podcast, I interview expert Dr. Ken Johnson, who digs even deeper into this question—and lays out why homeownership isn’t the golden ticket people think it is, especially for high earners early in their wealth-building years.
Links mentioned:
Beracha and Johnson Housing Ranking Index:
https://www.ares.org/page/beracha-johnson-housing-ranking-index
Waller, Weeks and Johnson Rental Index:
https://www.ares.org/page/waller-weeks-johnson-rental-index
Price-to-Rent Ratio Report:
https://therealestateinitiative.com/price-to-rent-ratios/
Top 100 Housing Markets - Inflation Adjusted:
https://therealestateinitiative.com/housing-top-100/
Learn more about Dr. Ken Johnson: