537: Markets Do Not Behave Like Saber-Toothed Tigers
Release Date: 12/14/2025
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...
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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...
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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...
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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...
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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...
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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...
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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...
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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...
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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...
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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_outlineYou know, the longer I’ve been an investor, the more I realize this simple truth: the biggest threat to your wealth isn’t the market… it’s your own brain.
We’re all wired the same way—with instincts that were fantastic for avoiding saber-toothed tigers but are absolutely terrible for making good financial decisions.
Take something simple like a marathon. If I asked you to predict next year’s top finishers, you’d look at last year’s results. That works. Human performance doesn’t flip upside down in twelve months. The best runners tend to stay the best runners. There aren’t that many variables to consider.
When we try to apply that same logic to investing, it often blows up in our faces.
There are way too many variables to consider when it comes to market behavior to make simple assumptions.
Entire sectors rotate from darling to disaster in a heartbeat. Yet our brains keep telling us, “Hey, this worked last year, surely it’ll work again.”
In my view, nowhere is that psychological mismatch more obvious than in real estate right now.
A few years ago, when real estate was on fire—cheap debt, rising rents, deals getting snapped up before lunch—everybody wanted in.
Fast-forward to today. We’ve had a rate shock. Values have reset. Properties are selling at steep discounts. And Construction starts have fallen off a cliff. Real estate got slaughtered.
But look around now. The market has reset. Assets are selling 30 percent below where they did just after Covid. Jobs and population growth in places like the Carolinas, Texas, and Arizona look fantastic, and interest rates are falling quickly.
Every macro indicator you can name is pointing to a major buying opportunity—one of the best in the last 15 years. So naturally… few people are paying attention. Markets that are bottomed out are not sexy. If it’s not frothy, it’s not newsworthy.
This is human nature in a nutshell.
When assets are expensive and risk is quietly rising, people feel brave. When assets are attractively priced, and future returns look great, people get scared.
It’s recency bias: assuming whatever just happened will keep happening.
It’s loss aversion: we fear losing a buck more than we enjoy making one.
It’s herd behavior: we’d rather be wrong with the crowd than right by ourselves.
And of course, it’s confirmation bias—where people seek out whatever headlines validate the emotions they’re already feeling.
It’s not logical. It’s not strategic. But it is human.
And that’s why this week’s guest on Wealth Formula Podcast is of value to listen to.
He’s one of the leading experts in the world on investor psychology—someone who can explain, with real data, why even intelligent investors consistently jump into markets late, bail out early, misread risk, and miss the best opportunities… especially the ones sitting right in front of them.
If you’ve ever wondered why you sometimes make brilliant decisions and other times do the financial equivalent of touching a hot stove twice, this conversation is going to hit home.
Learn more about Prof. Terrance Odean:
https://haas.berkeley.edu/faculty/terrance-odean/