Tony Robbins’ 7 Simple Steps to Financial Freedom (100% in 1% Book Summary)

Money: Master the Game by Tony Robbins

Concept

  • The promise is to create an income for life without having to work again.
  • The idea is to create an extraordinary quality of life on your own terms.
  • Start rich with gratitude.
  • Achieve your dreams by (1) unleashing your desire or focus; (2) taking massive and effective action; and, (3) good luck!
  • With the strategies summarized below, the only thing that could hold you back is a defeated story based on beliefs you will fail.

Strategies

  1. Establish an automated plan for savings and investments. Spend at least 10-15% of your income on yourself, before any day-to-day expenses, to benefit from compound savings. Every time you get a raise, put a portion toward a higher percentage of income invested.
  2. Protect yourself from marketing myths. Analyze your current portfolio at StrongholdFinancial.com. Choose low-cost index funds over mutual funds. The (likely tax-deductible) cost of a large fee-only independent registered investment advisor (through a third-party custodian) plus the cost of the investments should be under 1.25%. Risk a little to make a lot with structured notes, market-linked certificates of deposit, and fixed indexed annuities.
  3. Set realistic goals to achieve financial dreams at masterthegame.tonyrobbins.com. The calculator will guide you on how much you need to save (and how long it will take) for five levels of financial freedom. For instance, a moderate outlook shows me never having to work another day starting 13 years from now – much better than the standard age of 65+. To get there even sooner: (1) Save, i.e. minimize fees, pay next month’s mortgage principal this month; (2) Earn, i.e. add more value in your job or business; (3) Reduce taxes, i.e. run a not-for-profit, defer, invest in a Roth; (4) Find investments with a risk:reward ratio of 1:5, i.e. real estate investment trusts; or, (5) consider moving cities for greater purchase power.
  4. Make investment decisions with proven asset allocations. Decide what portion you will invest in growth (i.e. high risk, high yield) and what portion (i.e. 60%) in security. Divide a big win from growth investments to reinvest in both growth and security, and save some for a luxury. Diversify across markets, classes, and time with dollar-cost averaging: making equal contributions to all investments monthly or quarterly. Rebalance your portfolio annually. Tax-loss harvesting uses losses to lower taxes.
  5. Develop a guaranteed lifetime income plan. Balance your portfolio in terms of risk rather than by amount of money. “Every investment has an ideal environment in which it flourishes,” so have 25% of your risk in each season: (1) high inflation (commodities/gold, TIPS i.e. inflation-linked bonds); (2) deflation (treasury bonds, stocks); (3) high growth (stocks, corporate bonds, commodities/gold); and (4) low growth (treasury bonds, TIPS). This translates to 30% in stock indexes, 15% in 7-10 year Treasuries, 40% in 20-25 year Treasuries, 7.5% in commodities, and 7.5% in gold. Upon retirement, invest in deferred fixed indexed lifetime income annuities with a guaranteed lifetime income rider. Private placement life insurance protects from growth tax, allows loans, and death benefits are tax-free too. Also consider a living revocable trust.
  6. Learn how billionaires invest. The book details the expert interviews with Carl Icahn, David Swensen, John C. Bogle, Warren Buffett, Paul Tudor Jones, Ray Dalio, Mary Callahan Erdoes, T. Boone Pickens, Kyle Bass, Marc Faber, Charles Schwab, and Sir John Templeton. Here, I’ll summarize: anticipated and diversify; high achievers are never done.
  7. Follow an action plan. Decide to focus on what you can control and find empowering meaning in what you see. This creates the emotional state to take action, to grow, and to contribute. Increase happiness by investing in experiences, buying time for yourself, and investing in others. Most of the billionaires interviewed give most of their money away. You can donate a fraction of a dollar every time you use your credit card to end hunger, slavery, and disease through SwipeOut.

Clearly, there is a huge amount of detail you’d get from reading the full book (and all proceeds go to charity), but above are all the main points as I see them.

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3 thoughts on “Tony Robbins’ 7 Simple Steps to Financial Freedom (100% in 1% Book Summary)

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