I’ve decided to take a little bit of a turn in my book readings and wanted to focus on a book that I personally know has motivated some people in my life to take the journey into financial freedom – Money Master the Game by Tony Robbins. In the book, Robbins outlays his list of the 7 Steps to Financial Freedom, which personally I always think these lists are a bit “clickbaity” but I am going to go in with an open mind.
I’ve been pretty heavy on some of the investing books that I have been reading lately and decided it was time to take a bit of a step back and get to some of the basics. I think it’s a good refresher to keep some personal finance topics front of mind because these are much more controllable than some of your investments.
Sure, you can always pick how you invest, but you don’t have nearly the control over how those perform that you would have over how your income and budgeting perform.
In this first introductory chapter from Robbins, one thing that really stood out to me was when he said, “anticipation is the ultimate power”.
I think that this is just so incredibly true in really anything that you do. If you take the time to think ahead and anticipate what might happen, you’re going to be much, much better.
- Dieting – Going out to eat with friends? Look at the menu online before going to decide what you’re going to eat rather than being tempted to get something unhealthy.
- Grocery Shopping – create a list so you only buy what you need.
- Buying a new home – decide what your “needs” and “wants” are beforehand so you can stick to your budget and not get wrapped up in a really nice house that actually doesn’t meet your needs.
- And of course, with personal finance:
- Save for short-term expenses coming up
- Have an emergency fund ready
- Make sure you have some “opportunity” money set aside for that rainy day
- Plan your budget in advance and think about any new expenses that month such as if you’re traveling your gas bill will go up
- Retirement – Tony said that there’s a 50% chance one spouse lives to be 92 years old and a 25% chance that one of you will live to 97 – do you have the money for that?
Is there literally any scenario where planning ahead isn’t better? Maybe if you’re trying to be spontaneous, but that’s about it!
Tony also gave us an outline to his 7 steps to Financial Freedom with a few teasers to get us super excited about the chapters. I’ve included these teasers below and a few of my immediate thoughts on each:
1 – Welcome to the Jungle – The Journey Begins with This First Step
I think that this chapter is going to be really interesting. Truthfully, understanding the way that compound interest is probably the best way that anyone can be motivated to invest and change their life around, and I am speaking from experience.
I remember listening to the Investing for Beginners Podcast, my personal favorite podcast, and hearing Andrew and Dave say that you can basically do nothing and earn 10% per year by putting it into an S&P 500 index.
That had me hooked.
Literally, learning about how that 10% will keep compounding on top of the previous year’s gains just got me so insanely motivated that I couldn’t think about anything else. The only way that you can ever actually be able to achieve this, though, is by creating a budget surplus – aka spending less than you earn.
It’s a simple equation. Learn how to use it to change your life!
2 – Become the Insider – Know the Rules Before You Get in the Game
This step is so incredibly important. The impact that fees can have on your returns, as Tony Robbins says, is simply outrageous. 1% might not seem like a lot but I can tell you that it’s worth way more than 1% of the total that you’d have at the end of your investing journey.
In addition, one of the topics that Tony Robbins has said he will cover is the “deception or target date funds”. Not going to lie – I am PUMPED to see what this is about.
Personally, I don’t like target date funds because they’re essentially mandating you to have bonds in them. They will automatically adjust your asset allocation based off the date that you have selected.
In a vacuum, this sounds like a really good thing, but I personally just don’t love having my asset allocations altered automatically without having at least some sort of input in the decision.
Not sure if this is where Tony Robbins is going to go with it, but I am VERY anxious to see!
3 – What’s the price of Your Dreams? Make the Game Winnable
Tony Robbins hinted that this game is all about creating a plan for you to be successful. Honestly, this might be the most important chapter!
Of course, all of these chapters are obviously going to be important, but I think that this chapter is going to take precedent while we actually go through and make our plan for success. As I mentioned previously, having a plan and anticipating the future is just going to set you up so much more for success.
Now, I have my own plan that I put in place with personal finance from budgeting with Doctor Budget, utilizing my financial order of operations and then picking stocks that I think are going to be primed for years and years of success.
I’m not foolish enough to think that everyone should have the same plan, nor am I foolish enough to even think that my plan is the best – and that’s why I am just so excited to read it.
My plan works for me – but does is it the absolute best possible plan that I could have? Who knows!
Maybe Tony does ?
4 – Make the Most Important Investment Decision of Your Life
This is the chapter where Tony Robbins really starts to dive into asset allocation. Now, depending on your situation, I really think that asset allocation can actually be one of the most overhyped areas of investing, but it all depends on your situation.
For instance – I have a friend that invests 100% in very high-risk tech stocks. He just lost 15% in a day (literally today) and he kept buying the whole way down. He didn’t sell at all. He still loves the companies that he owns and trusts these tech companies for the long-term so he doesn’t diversify at all.
Honestly – I don’t have a problem with that as long as you have a high risk appetite.
My risk appetite is absolutely not that high and it’s why I primarily am in value stocks with some speculative investments as well.
If you’re the panicky type or maybe the type of person that is going to need this money in the next couple of years, asset allocation is EXTREMELY important!
It really just depends on exactly what you need from your investments and your own personal situation.
5 – Upside Without the Downside – Create a Lifetime Income Plan
Man, doesn’t that chapter sound amazing?
Tony Robbins says that in this chapter we will “explore creative ways you can stop or drastically limit losses and increase gains.” Sign me up!
Now, he also did make some pretty hefty insinuations that you can actually have a portfolio that is going to capture all of the upside and essentially none of the downside, so consider myself skeptical on this, but I am going to try to withhold judgment.
My personal opinion is that you get the rewards that you’re willing to risk for, so it seems just very unlikely that there actually is a scenario where you can implement a plan to capture all the upside and no downside, and even if you can then you’re likely to be timing the market, but again I will try to withhold my judgment!
6 – Invest Like the .001%: The Billionaire’s Playbook
Oh man – name drop city right now! Tony Robbins gives his ultimate investing plan based off of his conversations with his “12 Masters of the Game” which includes Paul Tudor Jones, Charles Schwab, Carl Icahn, T. Boone Pickens, Ray Dalio, Jack Bogle and others!
That is quite the name drop right there and I know that my eyes certainly opened up when I saw this really interesting list of investing legends.
7 – Just Do It, Enjoy It, and Share It
And finally, we end it all with an action plan “to help you live a better, fuller, richer, more joyful life.”
All in all, I think I am in for a great read and will make sure to keep you all updated as I make some progress on the reading. Obviously, you can see that I am extremely skeptical of some of these promises but who knows – maybe I’ll find out that I am wrong!
While you’re waiting for me to work through my readings, take a look at some of my previous reviews:
