Money Master the Game
Tony Robbins

Summary

Although quite long, this book will give you absolutely everything you need to know about how to invest and save your money to get on your path to financial freedom. It’s written from a US perspective but a lot of the lessons and financial tools he talks about exist in most countries.

He also gives you Ray Dalio’s personal asset allocation, as well as David Swensen, who built the Yale endowment fund from 1 billion to 25 billion (keep scrolling below to see)

Rating: 4/5

Notes

Find a way to do more for others than anyone else

‘An expert is an ordinary man away from home giving advice’ – oscar wilde

There is a passive way to win at investing

The more you learn, the more you realize how much you don’t know

A journey of a thousand miles begins with a single step – Lao Tzu

Anticipation is the ultimate power

Most people stick with the decision that’s given to them

Repitition is the mother of skill

The power of compounding is the most important invention of our time

Always no matter what save 15% of the income and increase once you make more

Learn to invest when everyone else is afraid

Automate your 15% savings into your savings account

Increase your savings every time you get a raise

Earn money, spend less and automate it

Life’s basic needs:

• certainty/comfort
• uncertainty/variety
• Significance
• love/connection
• Growth
• Contribution: life’s about we, not me

Find a way to appreciate every day more and expect less

Be grateful for everything. Show gratitude and express it

‘You have to learn the rules of the game and play better than anyone else’ – Albert Einstein

ALWAYS CHECK THE HIDDEN FEES

96% of mutual funds fail to beat the market over a sustained period of time

• Don’t put money in mutual funds – fees

Stocks are the best for long term growth over time

Don’t be sold on that someone will beat the market

Stocks are volatile. Never tolerate the herd mentality

Invest in a low-cost index fund (Vanguard)

Percentage points on feed could make million dollar difference

Your broker is not your friend. Get a financial fiduciary advisor

• Find a registered investment advisor (RIA), not just a broker

Find a 401k advisor with the best/lowest fees

Make sure the 401k has low fees and invest it in low cost index funds

For your Roth IRA, pay taxes today so you’re not taxed when you withdraw

Asset allocation is the single most important skill as an investor

Risk a little to make a lot

Structured note is loaning money to the bank: guaranteed your money back if the market turns or the returns if it goes up (think about canadian banks)

Market linked CDs are guarenteed to pay you dividends (check with an advisor to avoid fees)

Fixed indexed annuities: check from a good insurance company

• All guaranteed and gains are tax deferred or own within a Roth IRA

Remember the breakthroughs

3 basic challenges: finances, relationships and our bodies

Change your strategy, change your story and change your state

To develop a strategy, follow people who have done it in front of you

Success is 80% psychological and 20% mechanics

You can use your story or your story will use you

Money is nothing more than a reflection of your creativity, your capacity to focus and your ability to add value and receive it

Change your story and change your life. Divorce your story of limitation and marry the truth. You can make anything happen

Invest more in your student loans early so you don’t pay higher interest

We all get what we tolerate so don’t tolerate excuses

‘Dare to live the dreams you have lived for yourself’ – ralph waldo emerson

When you’re grateful, there’s no anger or fear

It’s only about your goal and no one else’s because you’re living that life

It doesn’t matter where you start, it’s how you finish that counts

Go with a 401k Roth to invest so you pay taxes now

Save more and invest the difference

If you pre-pay your principle mortage payments for next month, you don’t pay interest

Learn to work harder on yourself than you do at your job

Get in front of a trend

Find a way to earn more

Tax efficiency = faster financial freedom

Invest in a way that allows you to defer your taxes so you compound tax free

Save more, earn more by adding value and reduce fees/taxes to invest the difference

Better returns while reducing risk = diversification

‘Life is like a bicycle. To keep your balance, you must keep moving’ – Albert Einstein

Stock picking, short term bets on the market and asset allocation

Good people fail because they do the right thing at the wrong time

Have a security bucket and a risk/growth bucket where you’re willing to lose

Always keep some cash liquid: cash equivalents

• Money market funds which give you 24/7 access to cash

Buy a low cost bond index fund

CDs: certificates of deposits which you loan money to the bank

• Invest in market-linked CDs

Bonds offer a promised rate of return & principal

Find the right annuities to invest in: income for life and never goes down

Life insurance policy in your security bucket

Notes give you downside protection and ability to participate in upside

Invest notes in canadian banks because they’re the safest

Residential real estate loan: a first trust deed

Buy low cost, low-fee bond index funds that spread your risk

Equities goes in the risk bucket (stocks, ETFs, indexes)

Invest in REITs rather than owning a home

Invest in structured notes through a registered investment advisor

David Swansen: Yale Billionaire investor asset allocation (all index funds)

• Domestic stock: 30% (or 20%) – Risk
• International stock: 15% (or 20%) – Risk
• REITs: 15% (or 20%) – Risk
• Emerging stock markets 10% (or 10%) – Risk
• Long term US treasuries 15% (or 15%) – Risk
• TIPS (treasury inflation protected securities): 15% (or 15%) – Risk

Don’t overestimate your abilities and be an emotional investor

Always have a dream bucket

Grace comes when you commit to doing something that will serve more than yourself

Find a way to add more value than anyone else

Fill the dream bucket with a big hit

• If your risk/growth bucket becomes positive, take some off the table and re-invest it into your security, risk or dream bucket

3rd way is to save a set percentage of your income and stack it away (not from the freedom fund allocation but separate)

Be fearful when others are greedy and greedy when others are fearful (Warren Buffet)

• Take emotion out of investing and automate it

Always, no matter what, put the same amount of money in the market

Dollar cost averaging is how you make volatility at the market work for you

You need to rebalance your portfolio at regular intervals

• Sell high and invest into the other basket
• Check it once or twice a year

Asset allocation is everything

Have a dream bucket and use rebalancing to maximize returns/minimize lossess

The secret of all victory lies in the organization of the non obvious’ – Marcus Aurelius

Ray Dahlio All Weather asset allocation:

• Stocks/indexes: 30%
• Immediate term bonds (7-10 years) 15%
• Long term bonds (20-25 years): 40%
• Gold: 7.5%
• Commodities: 7.5%

Re-sell annually so it’s always the same proportion

Income is freedom! Income is the outcome, not just accumulating wealth

Invest in deferred annuities

Who cares if you die early with annuities because you’re dead

• But you get a guarenteed source of income for life

Fixed annuity: fixed income/rate of return

Indexed annuity: rate of return is tied to the stock market with no downside risk

Don’t invest in variable annuities

Fixed indexed annuity (FIA) is where you should invest

• Or uncapped annuities because you’ll never lose your principal and can participate in the market increase
• If you’ve added to your principal, you can never lose that amount

ADD THIS TO THE SECURITY BUCKET

Advisors Excel and FIA where you participate in all the upside and no downside (FIND OUT IN CANADA)

Private placement life insurance (PPLI) is the secret of the ultra wealthy

You can withdraw from the policy as a loan and your account will pay for the balance

• You can withdraw tax free

Set up a living trust for your family, makes dealing with the courts easier

Don’t lose money

Risk a little to make a lot

Anticipate and diversify

You’re never done: never stop growing and learning

Carl Icahn makes opportunities in business (look at his company)

Vanguard and TIAA-CREP don’t have the high fees

Take every opportunity to invest in a tax free way

Don’t trade, just stand there and wait (Power of vanguard)

Invest in vanguard, bond funds and market funds

Single most important lesson is risk control, don’t lose money

200 day moving average of closing prices

• If you use the rule, then get out if it doesn’t meet the 200 day rule

5:1 ratio: risk 1 dollar to make 5

Biggest opportunity is Japan: insurance policy

• Spend 0.004% per year which could be worth 2000%

‘How little we know, how eager to learn’ – Sir john templeton

The more you help others, the more prosperous you will be

Buy at maximum pessimism and sell at the peak of optimism

A change in focus and a change in meaning is what you shall focus on

Invest in experiences, buy time for yourself (chores, etc.), invest in others

Giving in any form builds wealth faster than getting ever will

The secret to living is giving

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