081: Become an "Insider" with Nick Hodge

When you listen to my podcast or read my book, you might think I am rigid about my investing. After all, the principals of wealth creation that I teach are: 1) Invest in cash flowing assets. 2) Understand how your investments work. 3) Invest in real things—things you can see touch and feel. 4) Invest in things that people need—like places to live, food, and water. 5) Use the mathematical principals of wealth creation—namely velocity and leverage. Does that mean that every time I invest in something, I do a checklist to make sure each one of these criteria is met? No—clearly not. As you may know, I am a huge fan of the life settlement asset class: https://www.wealthformula.com/life-settlement-investment/ There is no monthly cash flow there and I don't know if an insurance policy counts as something real or not. However, I do know that people who are over eighty years old and have multiple health problems die and that buying their life insurance policies at a huge discount is a pretty good bet. In that scenario, the cards are clearly stacked in my favor as an investor. When else might I consider breaking the rules? Well, I will say that over the years, as my own wealth has grown, I have realized that one of the biggest principals wealthy people use to grow their own wealth is "insider information". Now, let's be clear, I'm not talking about the illegal Martha Stewart stuff. I am talking about knowing people who are some of the top authorities in a given asset class—the people that make markets or who are truly elite operators. The wealthy know these people and find out about things ahead of time. They get their money in early in these opportunities. By the time the general public hears about the opportunity, there is little meat left on the bone. Meanwhile, the insiders enjoy massive gains and might even exit their positions while the outsiders continue to buy up scraps. Now here's the problem, as a high paid professional, might have. You make a lot of money, but just not enough. Or, maybe you make enough, but you don't live in THAT WORLD. The way you invest is no different than the way the poor and middle class do. Does that sound like you? If so, understand that you are still fodder for the market makers. You aren't an insider. Who are these market makers anyway? It's hard to get to know those people and about those opportunities if you aren't wealthy. I'm sure you suspected something like this already and I'm here to tell you that you are right! Now I'm doing my best on Wealth Formula Podcast and through this community to help you get in on some of that unfair advantage of the wealthy and hopefully you have learned things already that have opened your eyes to a whole new world. But, there are some things to which you will remain an outsider until you really start creating significant wealth and/or start living in the insider's world. That goes for me as well. There are layers to this insider thing—like peeling away at an onion. I'm further in then most but I've still got lots of layers to peel ahead of me. As you get into deeper layers of this world, the advantages become even more apparent. That's another reason why the wealthy continue to get wealthier over time. None of this sounds fair right? Well, it's not but life isn't fair. You need to focus on finding your own unfair advantages. If you prefer, you can also forget about this insider thing for now and protect yourself by simply using the fundamentals of cash flow, real asset investing, velocity and leverage to build wealth the old fashioned way. Just know, that this "insider's world" does exist and that if you tap into it, it can help you tremendously on your wealth building journey. My guest on Wealth Formula Podcast today understands this whole concept of the "insider's world" well. In fact, he has built an entire community of outsiders to try to make sense of the bizarre world and economy in which we live. Like me, he tries to help individuals who are "outsiders" get in on some of the insiders' action. His name is Nick Hodge, founder of the Outsider's Club and he is my guest on Wealth Formula Podcast this week. You won't want to miss this episode!