“Money: Master the Game” by Tony Robbins
Hardcover, 688 pages
Published 2014 by Simon & Schuster
ISBN-10 : 1476757801 | ISBN-13 : 978-1476757803
Date Finished: August 7, 2015
How strongly I recommend it: 5/10
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I eagerly purchased this book when it first came out. Robbins is so close with this one, but ultimately he over-wrote this book. It’s 700 pages and he goes way too far afield. This could have been a third of the length and reached far more people. I’m deeply interested in the topic but it drolled on for far too long, with tangents, technicalities, and stories of his famous friends that simply weren’t necessary. This book was catching the wave of the FIRE movement (Financial Independence Retire Early) online, and attempted to codify and legitimize some of the tenets, but ultimately it needed a more courageous editor to reign Robbins in.
My Notes:
"The secret to getting ahead is getting started." ~ Mark Twain
I didn't quite read a book a day, but over seven years, I did read more than 700 books to find the answers to help myself and others.
Biggest Step: Decide what percentage you are going to save out of each paycheck and start now! Put it into a retirement fund asap. Cut back frivolous spending to make this possible.
It’s an amazing feeling to know you’ll never run out of income.
For most of us, our earned income will never bridge the gap between where we are and where we really want to be.
The most important decision is how much of your income will are you going to set aside for the retirement fund? 3% minimum—20%
An incredible 96% of actively managed mutual funds fail to beat the market (S&P 500 index) over any sustained period of time!
The point here is that by investing in the index, you don’t have to pay a professional to try picking which stocks in the index you should own. It’s effectively been done for you because Standards & Poor’s has selected the top 500 already.
Edit: "By the way, there are a number of different indexes out there.”
There are 7,707 different mutual funds in the United States (but only 4,900 individual stocks), all vying for a chance to help you beat the market. But statistics are worth repeating: 96% will fail to match or beat the market over any extended period.
Even Warren Buffett, known for his incredibly unique ability to find undervalued stocks, says that the average investor should never attempt to pick stocks or time the market. In his famous 2014 letter to his shareholders, he explained that when he passes away, the money in the trust for his wife should be invested only in indexes so that she minimizes her cost and maximizes her upside.
TWEET: The mutual fund industry is now the world’s largest skimming operation, a $7 trillion trough from which fund managers, brokers, and other insiders are steadily siphoning off an excessive slice of the nation’s household, college, and retirement savings.” ~ Senator Peter Fitzgerald, cosponsor of the Mutual Fund Reform Act of 2004 (killed by Senate Banking Committee)
The average cost of owning a mutual fund is 3.17% per year!
User PersonalFund.com to analyze your funds and compare the expenses to reward ratio. By simply removing mutual funds from your life and replacing them with low-cost index funds you will have made a major step in recouping up to 70% of your potential future nest egg.
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” ~ Upton Sinclair
In a sobering 2009 study released by Morningstar, in tracking over 4,300 actively managed mutual funds, it was found that 49% of the managers owned no shares in the fund they manage. The chef doesn’t eat his own cooking.
67% of people enrolled in a 401k think that there are no fees, which couldn’t be further from the truth.
How to find a fiduciary.
Robbins’ video on National Debt: http://training.tonyrobbins.com/exclusive-video-tony-robbins-deconstructs-the-national-debt
With this much debt, chances are good that taxes are going up. So paying 401k taxes on principle rather than down the road when you withdraw the money and taxes will likely be higher.
Asset allocation, where to park your money and how to divide it up, is the single most important skill of a successful investor.
Traditional CDs are very profitable for the banks because they can turn around and lend your money at 10-20 times the interest rate they are paying you. Market-linked CDs are similar to structured notes, but they include insurance from the Federal Deposit Insurance Corporation (FDIC). Like traditional versions, Market-linked CDs give you some small guaranteed return (a coupon) if the market goes up, but you also get to participate in the upside. I must warn you however, that accessing these directly from a bank will often incur a host of charges and fees.
Insiders are not helpless, nor are you. In every area of life, you get what you tolerate. And it’s time to raise the standard.
LET’S RECAP:
- Nobody beats the market. Using low-cost market-mimicking index funds, we can outperform 96% of mutual funds and nearly as many hedge funds.
- Since stock-picking mutual funds are charging us extremely high fees (over 3%, on average), we can drop our investment fees by 80% or even 90%. You could have more than twice as much money when you retire or cut years off the time it will take you to get to financial freedom.
- The difference between a butcher and a dietician—or between a broker and a fiduciary. From a fiduciary you get transparent advice (that may also be tax-deductible).
- To drastically reduce your 401k fees by using a low cost provider like America’s Best 401k. You can see how your plan stacks up by using the industry’s first free checker http://AmericasBest401k.com/401k-fee-checker
- Roth 401k can protect against rising taxes by paying the tax today and never paying tax again (not on the growth or the withdrawals).
- Target-date-funds are not only expensive but also may be more aggressive or volatile than you think. If you want them stick to low cost providers like Vanguard.
A breakthrough is a moment in time when the impossible becomes possible. If you want to change your life you have to change your strategy, yo have to change your story, and you have to change your state. Find a strategy that works by looking at the best in the business (long-term). Stories control you emotions, and emotions drive all of our behavior and actions.
80% of success in life is psychology and 20% is mechanics.
The bottom line is, science has now proven that how you think about stress matters—the story you attach to stress. Telling yourself it’s good for you instead of harmful could mean the difference between a stress-induced heart attack at 50 or living well into your 90s.
In the past 100 years the market was up approx 70% of the time. But that leaves 30% of the time that the market was down. So while investing in the indexes is a great solution for a portion of your money, it shouldn't be for all of your money. Markets are volatile at times so it makes sense to protect a portion of your portfolio for when the markets take another dive.
“There is only one thing that makes a dream impossible to achieve: the fear of failure.” ~ Paulo Coelho
When I work with anyone from world-class athletes to high-powered executives we change his or her state first. There's a part of you that, when it's turned on, can make anything happen; what is turned off the world is dead.
Massive action is the cure-all. Massive action is the cure to all fear. A moving River uncovers its treasures.
There are six basic human needs: certainty, uncertainty/variety, significance, connection/love, growth, and contribution.
Significance, you're always comparing yourself with someone else. And there's always someone bigger, taller, stronger, faster, richer, funnier, younger, more handsome, more beautiful, with a bigger guy, and I saw her car, a nicer home. So while there's nothing wrong with significance, if you make it your number one need, you'll never be fulfilled.
You can't manage your health if you can't measure it., And the same goes for your finances.
Urgency fund: according to a Princeton University – University of Chicago study in 2014, 40% of Americans say they could come up with $2000 if they needed it.
There isn't a dream you can't realize if you're committed enough and creative enough, and if you're willing to find a way to add more value to other people's lives than anybody else.
Your imagination is ignited because you reach a point, a wall, a threshold, a place inside yourself, and affirm that you will no longer settle for life as it has been. Wherever focus goes energy flows.
Mortgages
When you sign your name on the dotted line and take a 30 year fixed rate mortgage at 6%, fully 80% of your mortgage payments will go towards interest.
Prepay your next principal and you could pay off a 30 year mortgage and 50 years most cases. Make pocket-change payments.
What is the key to economic success? To understand how to become more valuable in the marketplace."
Learn to work harder on yourself than you do your job.
Jim Rohn, “For things to change, you have to change. For things to get better, you have to get better. Get rid of the story of litigation and shift into high gear.” Never stop growing learning and investing in yourself.
The average US household has over $15,000 in credit card debt. Student loan debt of over $33,000; mortgage debt of over $150,000.
Yale’s David Swensen: There are only three forces that can help you achieve the greatest returns:
1. Asset Allocation.
2. Diversification.
3. Tax efficiency.
1. Save more and invest the difference
2. Earn more (add value) and invest the difference.
3. Reduce fees and taxes and invest the difference.
Asset allocation is more than diversification. It means dividing up your money among different classes, or types, of investments (such as stocks, bonds, commodities, or real estate) and in specific proportions that you decide in advance, according to your goals or needs, risk tolerance, and stage of life.
No matter how well you plan, there will be a day of reckoning for every type of asset. So, diversify or die. But if you diversify well, you’ll win!
Jack Bogle, “Markets always revert to the mean.” That means what goes up is going to come down, and vice versa.)
Rutgers University developed a 20 question quiche to decide your risk tolerance scale. http://njaes.rutgers.edu/money/riskquiz
Jackpots can help you create more wealth, because the key to creating wealth is to unleash your creativity and find a way to do more for others than anyone else is doing. If you find a way to add more value than anyone else, you can also find a way to prosper personally.
And the payments wouldn’t kick in until age 65, so only a small percentage would actually receive Social Security benefits to begin with. Today, the average life expectancy for a male is 79, while the average female will live to 81. For a married couple, at least one spouse has a 25% chance of reaching age 97.
You can do everything right: find a fiduciary advisor, reduce your fees, invest tax efficiently, and build up a Freedom Fund.
Dr. Jeffrey Brown: The annuities are one of the most important investment vehicles we have.
Social Security: You’re paying in over your lifetime while you’re working, and then when you retire, you get paid back income every month for as long as you live.
An example of the kind of action that public company boards take that outrage Icahn can be found in his recent criticism of Coca-Cola. Coke was planning to dilute the company’s stock value by issuing $24 billion in new, discounted shares. The reason? To finance huge compensation packages or top management. This would weaken the retirement investments of ordinary investors, including teachers and firefighters, because so many people have Coke stock in their retirement portfolio.
"Age is an issue of mind over matter. If you don’t mind, it doesn’t matter.” Mark Twain
As the saying goes, if what you learn leads to knowledge, you become a fool; but if what you learn leads to action, you can become wealthy. Remember: rewards come in action, not in discussion.
How many of you know someone who is on antidepressants and is still depressed:” 85 to 90 % of the room raises their hands, (every time).
If you’re grateful you can’t be angry simultaneously.
I begin every day with a minimum of ten minutes. I stop, close my eyes and for approximately three minutes reflect on what I’m grateful for: the wind on my face, the love in my life, the opportunities and the blessings I experience. I don’t focus just on big things; I make a point not only to notice, but also to deeply feel an appreciation for the little things that make life rich.
Carnegie’s contributions doubled the number of libraries in the United States, and provided so much of the intellectual growth and capital of our society before the internet came into being.
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