MONEY Master the Game

Tony Robbins Also available in audiobook: Download our app for free listening.

Personal finance is a tricky subject. While many people spend their lives trying to control them, who achieves it goes a long way in life. Controlling one's own money, knowing how to invest and spend in the best possible way is then a real-life goal. It is to assist in this task that the author Tony Robbins wrote this book. If your financial freedom - and that of your family - is a real dream, this book is just for you. In 7 simple steps, Tony unveils myths about personal finance and investments, teaches you how to protect money in a competitive market, and even helps you plan an advantageous and faster retirement! So if you also want to invest like a billionaire, you can not miss this work.

It may even seem like a wacky formula, but believe me. Seven steps are the way to invest and reap fruits in the same way as a billionaire. And the best, learning directly from one of them. And Tony Robbins' plan starts with the most basic and most important of the steps.

Set Aside Money To Save And Invest

The first step is the main and simplest of all. Determine how much you want to invest and save. Independence and financial freedom begin there. Although simple, though, the decision can cause a sense of loss, of lifestyle loss. The feeling of "if I save money, I will not live too" is real, but it should not be decisive when choosing how much to keep and invest.

It is important to think that in the next 25 or 30 years the human life expectancy may exceed 100 years. If financial life is hard now, imagine having to plan to save money and retire with all that time ahead.

It is for information like life expectancy that planning should begin as soon as possible. And another important point is not to depend on or expect too much from traditional retirement. Retirements, as we know them today, may not even exist in the not too distant future.

It is not to despair and to think that it will be necessary to work until you die. The important thing is to wake up to reality and rethink some of the myths that have always been told about financial security throughout life, such as:

  • Retirement means security and financial freedom;

  • It is only possible to succeed with a university education;

  • Buying a home is a sensational investment.

Why You Should Not Depend On Retirement

If you believe working for 40 years will guarantee your financial freedom for another 40 years, it's time to think better about what you believe.

The return of a traditional retirement is not worth from the investment point of view. It impoverishes you over time. So, briefly, the lesson is:

Your future is in your hands.

Like it or not, you need to economise and invest your money aggressively. Is this a fun mission? No. Sexy? Even less. You would probably like to buy a wonderful house, a new car and sport a lifestyle out there. But this is not the way to long-term success.

Saving and investing aggressively is not cool, fun or sexy, but it helps you sleep more peaceful evenings. You owe it to yourself and your family. It's a matter of protection to try to prepare for eventual storms throughout life.

Know The Rules Of The Game Before You Play

Think of the investment market, pensions, and social security plans as a game. As a strategy game, you need to know how to use the right cards, make the most assertive moves, and plan your victory well.

The top tips to feel more prepared and properly safe before even entering the investment world:

  • Seeking professional help makes all the difference. Go after a financial consultant, to accompany you and advise you throughout the investment process.

  • Know all the fees that will involve your investment. It may seem simple, but rates are cruel and definitely cannot catch you off guard.

  • If you already have some investment plan for your life, take time to compare it to the rest of the market. In fact, it is essential always to be alert to what happens to the plan you already have.

  • Always take the time to keep track of your expenses, profits, and plans.

The Game Needs To Be "Winnable"

True financial success comes in levels. In 5 levels, to be more exact:

  1. Financial security

  2. Financial vitality

  3. Financial independence

  4. Financial freedom

  5. Absolute financial freedom

To follow this path you need to decide what stage of it you intend to reach. Some people seek an extremely luxurious life, which is a perfectly normal desire. Others, however, prefer a simple yet comfortable life. None of the alternatives is certain since the concept of right and wrong is not applicable in such cases. It is only your decision.

Regardless of the level of financial success you desire, 5 strategies will guide the process and accelerate your personal progress:

  1. Save more money and invest the difference. "His current middle-class life is an erupting volcano of waste," writes Mr. Money Mustache, a Colorado personal finance blogger who declared himself retired at the ripe old age of 30. By saving half of his income while keeping his cost down and investing the extra money, Mr. Money Mustache, his wife and son live a life free of financial worries with enough time to spend together as a family. If you find it difficult to believe in a random blogger on the Internet, the late billionaire Sir John Templeton followed the same principle.

  2. Make more money and invest the difference. What are you going to do with this salary increase, year-end bonus, 13th or grandma's gift? If you receive an income, consider investing all or a portion of it in your financial freedom goal. I plan to invest 100% of all salary increases, bonuses, etc. until I am saving and investing half of my income. Only then will I allow my expenses to increase.

  3. Reduce rates and taxes and invest the difference. As stated earlier, taxes and taxes are one of the biggest barriers to wealth accumulation. Each year, the government takes approximately half (yes, half) of their income through various taxes to pay for their waste. The remaining money is the target of the financial industry that wants to help you "invest for the long term in a mutual fund that beats the market."

  4. Maximize the rate of return on your investments. The way is to diversify your investment activities into asset classes to avoid catastrophic losses, maximizing your growth potential.

  5. Change your lifestyle and invest the difference. How much do you live where you live? How much less would it cost you to live elsewhere and maintain the same standard of living? Sure, it might be cool to live in New York. But how much do you spend just to get by? Moving to a smaller (but still legal) city, you can easily save 10-15% per year on expenses, invest the difference and retire faster.

Learn To Put Money In The Right Place

The experts (read: billionaires) agree on this point. Asset allocation is the key to successful investment and the only way to truly diversify your portfolio.

"But I diversify my portfolio," you say. "I invest my money in an S&P index."

That's great! But what if the stock market is crap?You're screwed.

Asset allocation goes beyond simply owning a lot of stock. Asset Allocation is about owning a lot of unrelated asset classes: domestic stocks, international stocks, emerging market stocks, bonds, real estate, Treasuries, commodities, etc. It's about putting your money in different buckets. That way, if one of your buckets spills a leak, you do not lose everything.

Create A Source Of Lifetime Income

As the topic itself already says, the main point of step five is to create a source of lifetime income. The strategy for this is simple:

  1. Build up wealth by investing in a low-cost investment portfolio, low rates, and of course with well-allocated tax benefits.

  2. Turn your wealth into an annuity that pays you a steady stream of income each month, so be it for the rest of your life.

Understanding All Seasons Strategy

To convert your money and render into a lifetime source of income, you need first to accumulate wealth. To help with this, Tony shares the "All Seasons" strategy developed by legendary investor Ray Dalio.

According to Dalio, there are four economic "stations" that move asset prices: inflation, deflation, growing economic growth, and declining economic growth. As such, different assets work well at different stations.

  1. Inflation: commodities, gold, and Treasury inflation-indexed securities (TIPS)

  2. Deflation: Treasury bonds and shares

  3. Increased economic growth: stocks, corporate bonds, commodities, and gold

  4. Declining economic growth: Treasury Inflation Protected Securities (TIPS)

Considering that no one knows what the future holds, Dalio suggests that investors invest their assets to benefit equally from each economic season or "season": 25% for inflation, 25% for deflation, 25% for economic growth and 25% for the decline of economic growth.

Income For Life: How To Guarantee?

Imagine how you would feel if you knew that you would never run out of money. That's right, for the rest of my life. Although it sounds too good to be true, there are some ways to convert your accumulated wealth into a lifelong source of income.

As Dr. Jeffrey R. Brown, a professor of finance at the University of Illinois at Urbana-Champaign, wrote in his paper Paycheck for Life: The Role of Annuities in Your Retirement Portfolio:

Simply put, if an individual accumulates enough wealth to cover the difference between their monthly income and their necessary expenses, then the retiree is free to invest and spend the rest of the portfolio however he desires, knowing that basic needs are covered no matter how long he/she lives.

In other words, if you can accumulate enough wealth, you can simply make money every month until you die. You can not worry about how you will make money when you are 90 years old. Think about whether it does not seem much more fun to make money without working at age 90 while playing a game of checkers. Much more than working in a supermarket at this age, right?

Invest Like A Billionaire

Tony interviewed some millionaires and billionaires for the creation of this book. From these interviews, Tony synthesized four principles that united all of them together:

  1. Do not lose money. Warren Buffett is famous for his two investment rules: (1) never lose money; And (2) never forget the first rule. If you simply avoid losing money, you will eventually acquire a little bit of it over time. How much you keep is more important than how much you make. Even if you start with nothing, you may end up with something while you are patient.

  2. Look for asymmetric risk/reward. Not all investments are risky, and you do not have to bet everything on a long and risky shot to retire rich. Slow, simple and calculated investment decisions win in the end.

  3. Anticipate disasters and diversify your investments. All investments involve some degree of risk, whatever it may be. The X of the issue here is to spread the risk between different asset classes to ensure that a shot will not sink your boat.

  4. Never stop learning. The most successful people in the world are pursuing knowledge relentlessly, for the rest of their lives. They know that acquiring knowledge is critical to their personal and professional growth. Like money, the experience is composed and built upon itself. The further you get, the better you get. Get ready and challenge yourself to learn something new each day of your life. Over time, you will be amazed at how much you can learn and grow.

Live a Rich Life

In the end, MONEY: Master the game is not about money. It's about living your best life. Money is simply a tool to help you do this.

Get To A Bright Future

Even if you do not have there a large amount of money, the future still looks bright. As technology advances, more products, services, and experiences will be available to more and more people leveling the field between those who have and those who have no money.

Today, we have everything in our hands. Using a smartphone, we can access the sum of all human knowledge in a matter of seconds. We can ride our mechanical horse to a building filled with an unlimited source of fresh food. We can use specialized 3D printers to print new body parts for people who need them.

Who knows what the future will bring? The only thing we can say with certainty is that human potential is virtually unlimited.

Final Notes:

At the end of our lives, it does not matter how much money we make over it, how we diversify our portfolio, or how often we beat the market. What is important is how you have improved the world around you.

As Tony writes near the end of the book, "Being the richest man in the graveyard is not the goal." Instead, the goal is to live a meaningful life, whatever that means to you. For most of us, this means giving your time, energy and money to others.

Giving to others puts things in perspective. When you give to others, you realize that you have something to give. When you give to others, you realize that your life is not that bad.

So start giving your time, energy and money to others and start living a prosperous life today.

How about starting right now?

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