Episode-1144- Building Wealth with John Pugliano — 32 Comments

  1. Rich Dad Poor Dad – work to learn not to earn I think is what you’re referencing at the beginning of the episode.

  2. My uncle that passed away last Friday at the age of 71 was proof that you don’t have to have a degree to become successful. He first worked at a gas station when he was a teen. He learned how to do auto body work while being employed at the station. He eventual started his own auto body shop while still working at the gas station. Once he was able to leave the gas station and focus on the Auto body shop he started to buy rental homes. By the time he was 50 he closed his auto body shop and kept buying and fixing up rental homes. My uncle had a 6th grade education and became a millionaire. The thing he had that majority of young folks don’t is work ethic! He could buy whatever he wanted to because he earned it! Kids today want whatever they want but don’t want to work for it and earn it.

  3. The formula should be 10 * age / (average income over lifetime)…. because otherwise I’m 23, just got a 50k a year job last year and I should have 115k net worth….

    • Damn it that is the third time this week something like that would just not come to me. I am feeling a Sanibel Island Vacation for Dorothy and I very soon!

      • If you go to Sanibel you should come off island to meet some local listeners. That and there’s some good fishing spots off island as well.

        • Um there is a bridge to the island. People will be welcome to come see us and don’t take this wrong but I am not going to put work into a vacation.

  4. SUPERIOR show! I sent it off to my (at present loser assclown) grandson in hopes he will listen, learn and not mess his entire life up.

  5. People chasing dollar denominated returns in a permanently contracting economy (peak oil and energy return on energy invested) with a permanently expanding monetary supply (indefinite quantitative easing) are going to be disappointed.

    • There is a lot to be worried about in the next ten years, peak oil isn’t one of them.

      • I hope you’re right … but oil at one point yielded an Energy Return On Energy Invested of 100:1. Now, it yields maybe 20:1, and we’re developing tar sands at an Energy Return On Energy Invested of 5:1. So, we’re not exactly harvesting the low hanging fruit on the tree.

        • Within 5 years there will be so much gas coming out of the ground the US is going to be not the Saudi Arabia of natural gas but the entire middle east of natural gas. There are still shit tons of oil to be pumped if we need it in the US. In the next 5 years as well Costa Rica will be a new major oil producer. The Brazilians are just getting started and cranking it out and using our tax money to do so thanks to the chief assclown in DC.

          Is peak oil real? 100% yes!
          Will you and I see any impact from it? Likely as old men but possibly sooner.
          Will it make a difference to us in the next 10 years? 100% no.

          I don’t know how old you are but when I was in Jr. High I had a textbook saying we would have used 100% of all oil in 35 years. Not hit peak but used it up, all gone, no more. Again this was a school text book. It was about 5 years old and that would have been about 86 so call it published in 81. So according to that SCHOOL TEXT BOOK we won’t have a drop left by about 2016? Do you buy that?

          You always have to temper the concept of peak oil against the main people pushing the alarm button. Such people hate oil, think it is the worst thing on the planet. Well and guess what we know they don’t believe their own bullshit. Because if I hated oil and wanted it gone and thought the peak was imminent, what would I do to fight oil? Absolutely nothing! I wouldn’t have to as it would be a self correcting issue.

          Just the known reserves would keep us running easily for a few decades if we were not making major advances in alternative energy and things like natural gas. Coal may be under a kabash but if we were really hurting for energy it would be coming out of the ground faster then during the industrial revolution.

          You want something to worry about? It is called the economy. Energy? I could be a problem some day or the economy may make access to it a problem but stop believing BS put out by environmentalist extremists that are engaged in wishful thinking. These people desperately want an end to oil to be true, they claim it is coming but most of even them know it is just a pipe dream for now.

        • Wow just look what popped into my inbox? Understand I think Porter Stansberry is a con-man, a thief and a shyster. That said he is very good at using the truth to sell his bullshit. He did a marvelous job of that here.

          JUST TO BE CLEAR DO NOT BUY ANYTHING FROM THIS ASSHOLE, I am not endorsing him but this really does tell the truth about Peak Oil and the giant lie it represents.

      • @Jack
        I read the article and in my opinion its full of a lot of holes. The graph he shows at the bottom is eye rolling at best. A comparison of 100+ years of oil production down to a single decade graph? No thanks.

        There are some decent points in the article, but my mind the best way to view this is the Chris Martensen approach. Exponential curves. Exponential growth of consumption (tomorrow is faster than today’s). The amount of oil that has to be pulled out has to increase as fast or faster than growth. Also Chris Martensen clearly points out something you’ve stated. Is peak oil real? Of course it is. Is it right now? Who knows, but it may or may not effect us right now or in some decades to come, and its likely not going to be we hit it and its a free fall cliff. Chris martensen completely avoids the entire topic of “are we in peak oil right now this very minute” by going, that’s for academia, and isn’t really that relevant.

        In general i think permaculture and survival and just good living practices just kind of solves this issue and makes it more of a non issue. Even more so I think a revisit of our view of our neighbors, community and our place should fix alot of this. I read an article by Mish Shedlock today that I just completely disagree with. Everything in life, to include purchasing, doesn’t boil down to a dollar price. In fact in a lot of ways that is some serious sources of our problems. The continued devaluation of quality human labor via hyper-efficient oil ran robots. They sure can put out a shit load of hoes and shovels, but none of them are worth a shit.

        By the way jack, your off hand recommendation in one video of the rogue hoe, says to me you should get back to making a few quick videos on products you recommend. I bought that same rogue hoe, and shit is that not a damn good product. Also have a serrated “sickle” coming my way for buckwheat harvesting.

        • @Jack part 2

          Just came across this article to bolster your opinon on NatGas.

          I personally disagree with the idea we’ll have emmense amount of production and wealth due to natgas supplies. For those who are in the business, yeah they’re probably going to do EXTREMELY well. But for those uninvolved no so much. I also am skeptical of the natgas car because the amount of capital required to put in the consumer level infrastructure (shifting gears with car factories, gas stations) and the amount of time needed for people to make the transition. (I can tell you personally i’m not buying another car unless i absolutely have to and its kind of already looking like the cheap credit bubble in cars is probably going to pop soon anyways).

          While I can fully and completely see the economic boom argument for nat/gas I think global headwinds are likely to just make it more of a bad timing situation for any soon to be positive effects as a whole. Industry is definitely starting to use more nat gas, but they have to make stuff for people to consume. People need money (or cheap credit by those willing to give it to them, and those willing to take on credit) in order to buy consumptive goods. The headwinds in the global economy are basically indicating that industrial level goods are about crash. (Yay for copper/lead prices).

          Keep making the argument and presenting more info as you get it because I’m of course always looking for contrarian arguments to mine.

  6. Couple other options for college investing that never seem to be mentioned, yet are gaining in popularity.

    Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA). The best alternative to the 529 plans that Uncle Scam pushes. Act more like a Roth-IRA: more investment options depending on where you open the account. We have our son’s through our credit union: stocks, bonds, mutual funds, it is all available for investment.

    Depending on the plan, the money is released to the child from age 18 to 21. All money is put in after tax, however, the money can be used for ANYTING. I am in it more for the fact that I have multiple options for investment.

    Just my 2 cents of info.

  7. My daughter will hate this savings idea but we as parents love it. She is 9 and broke again within a week of receiving birthday or other money. She’s a bright kid in gifted who will probably qualify for scholarships but that doesn’t she couldn’t learn a lesson on money management. My wife and I finished college with a grand total of $4000 in student debt between the 2 of us.

  8. Jack, the problem with the abundance of Natural Gas is that it is shale gas, ie) unconventional. The drop off rates are 50% in the first two years. The need to drill thousands of them to keep up. The proverbial Alice in wonderland running faster and faster to stay in the same spot. The shale gas is a bubble

    • Don’t know where you get that but we have stuff that will run 20 years or more here. Right now they are tapping the gas in many places, getting it set up to run then not even extracting it because there is only so much demand. Basically some of this is being set up to pump now, much being set up to pump when and as needed. Keep in mind this is my backyard I am actually talking directly with the guys putting this stuff in.

      • Understood Jack. I was listening to the guys up here talking about the Fredrick Brook Shale in New Brunswick and how many wells they have to drill to get the equivalent flow rates. I am all for energy independence for both our countries, I just hope the media temper the enthusiasm and understand this is not conventional gas. Fracking costs more. James Howard Kunster interviewed a geologist that pretty well said the same thing.

        I know you and James disagree on some points. I am learning about this as I go, since I am invested in CDH (Corridor Resources). Which is trying to get a JV for Shale Gas up in New Brunswick. They claim 60TCF in ground, with 15% recoverable. Fascinating to see the technology mature as well. Excellent Episode by the way

        • Ah see that is different. After you drill wells in the best spots you have to drill more in the not best spots to get as much as the best spots. Make sense. This is like saying there are not as many acorns where there are less oak tress so there are not enough acorns.

          It isn’t the wells that individually drop in production but the production per NEW WELL that drops as a formation reaches a point where it is being fully exploited.

          This is another non starter argument of the left wing greenies that just can’t accept that their fossil fuel free utopia (where everyone dies by the way) isn’t just around the corner. Of course drillers start with the honey holes and of course it takes more work to get gas from less fruitful areas. No doubt!

          Again people don’t get the whole plan is to drop NG prices in the US while selling tons of it to the rest of the world where it is still expensive.

          Price gas in Venezuela, it is dirt cheap but it doesn’t really effect what you pay for it here or in CA does it?

      • The end game is that the easy fruit is gone. We may have lots of NG but where is the capital to get it out? I think we hit the wall sooner. Obama Keystone shutdown, U.S refusing Alberta oil sands. So now the U.S has to rely on domestic production of energy; which I think is pie in the sky. They just announced a huge LNG export facility in Guysborough Nova Scotia, This facility will export gas to Europe and India. My point is “We dont’ have as much Natural Gas, at an affordable price as we think”

        • Brent you are making my point for me. If you want US NG to boom what do you do, shut down the tar sand oil, kill US coal and make sure Iraq oil contracts go to China. LOL this is so hollow, stop taking in the pablum, step back 5 steps and look at the bigger picture. Where does the capital come from? Holly shit man, Uncle Ben buys worthless paper with US Tax payer obligations, the G-Men back off one energy source and clamp down on others, bankers invest in the one viable alternative and boom, bust, good by, go out. This is so flat obvious if you let go of what the Greenies, the TV and the tin hatters tell you and just look at the facts.

          I mean good Lord but this play book is so simple. Of course Obama quashed the keystone, crapped on coal, how else do you absolutely ensure an oil boom? Think man if you are making Spacely Sprockets and your competitor is Cogswell Cogs what more could you ask for than for the International Space Federation to make Cogswell Cogs to expensive to be viable.

  9. Jack, wondering if you have had a chance to look more into Harry Brown’s investment thinking (show 1070)? And if so how it fits with this.

  10. Hi Jack,
    Do you recommend any books (and/or other episodes) for those looking to wise up on investing? I’ve adopted Ramsey’s debt snowball approach to reduce my debt, and we’re almost at the point where we can start investing. I’ve put the Millionaire Next Door and Rich Dad, Poor Dad on the list. Anything else that should be required/recommended reading?

  11. Fantastic episode! I John has a lot of great information.

    I read The Millionaire Next Door about 5 years ago, and unfortunately my wonderful Father-in-law passed away about a month ago. I found out a few days after his passing he was “that” millionaire next door and then some. In retrospect it’s amazing to see what can be done through disciplined savings, not being “flashy”, and very hard work.

    I’ll have to listen to this episode again so I can fully digest it and take action. My wife and I already have plenty in savings/cash in case I get laid off, and that was hard considering I do very well but work/commute to a pricey area and she stays home. We only have the house and a few months on my car payment left re debt. (We’ll see what happens in a few years when the kids start prepping for college.) Yet listening to this and the recent events in my family’s lives makes me realize how much I still have to learn and what I have to aspire to.

    Thank you very much for this one Jack.


  12. Lightbulb moment happened listening to this show. I’ve been contemplating getting into some contract work on the side, and I started thinking what else that could turn into and lead to. This show helped me make a decision to make a change and start moving in the right direction. Thanks Jack and John!

  13. Out of curiosity, what’s the basis of your issue with Porter? I haven’t bought any products but I generally enjoy his podcast. Decent market info with a libertarian bent I usually agree with.

    • He is a con artist and a thief. He does have some really great info but it is always used to sell over priced useless investing products.

      His “End of America” was the end of Porter for me. He claimed it would happen in 6 months or less, ran that campaign for about a year, can you do that math.

      They also advertized it on Alex Jones and elsewhere with a load of bullshit, “go watch this video today because THEY are going to ban it soon”.

      I just don’t trust or respect people like that even if they can be a good source of some info. My understanding is he is now saying exactly what I am saying about the coming gas boom. But is selling some POS product claiming the Boom will make Obama so popular he will use it to successfully run for a third term. I don’t buy into bullshit man, I just don’t.

      Stuff like this doesn’t help either

      • I don’t disagree with that. His marketing has a lot of hyperbole and is a more than a bit shady. I do enjoy the podcast though both for his current market commentary and his guests. I think you’d be surprised by the list. It’s a lot of people you respect.

  14. I second the motion that the formula for net worth may be wrong or I’m thinking about it wrong. Would net worth include what is already invested in your house or not.