Main lesson of the book: 7 Steps to Financial Freedom
Money Master the Game is written by the motivation speaker celebrity Tony Robbins. Who tries to use his energetic delivery and motivational tendencies to give the regular person a chance at financial freedom. I am going to do my absolute best to extract the information within this very thick book and condense it. The key point of this book that it wished to illustrate is that everyone should have a diversified portfolio that is allowed to compound over time in a Tax free environment. This will ensure that you can retire with peace of mind and certainty that your finances will last you your remaining years.
Tony Robbins actually interviewed 50 of the richest people and most influential investors in the world and turned their advice into this book. The first few chapters Tony actually goes into depth about certain financial terms and concepts that will greatly help any investor in understanding the market and how they should invest or not invest their money. The first chapter is about how changing the perception of your own story can greatly benefit you. And by taking control of your own life and finances you can secure a great future. Readers should also always keep in mind that they don’t know everything and should always be wary of what they don’t know. By doing this they can guard against potential losses in the future by diversifying their assets and not putting all their money in one basket. Another interesting point he makes is that we should all automate our savings. He doesn’t explain this in depth, but he does mention its something that we should all do.
The book then of course warns us about the dangers of investing and how learning before investing is crucial to your future success. Tony then goes in on Mutual Funds and financial companies that offer asset management or active portfolio management. Explaining the dangers of those seemingly small fees accumulating to devour over 50% of our possible earnings. And how Mutual Funds or Brokers 96% of the time don’t outperform a simple Index Fund. An interesting point Tony did make is that Target Date Funds might not be the best solution possible, because these funds are still based on speculation rather than set guaranteed amounts. One great term he did bring to light a bit more was the concept of Annuity. It seems there are Annuities that can actually provide a life time income under the condition that you live long enough to start receiving the money. Most definitely something worth looking into, because to receive that amount all you would have to do is pay a set amount of money which can be rather big, but it would guarantee a second pension that could greatly benefit you later in life.
Money Master the Game book really focuses on minimizing the risk when investing. Tony explains the concepts of Structured Notes, Market Linked CD’s and Fixed Indexed Annuities. Which would allow you to make money when the market goes up, but not lose any money if the market were to go down. You would of course have to research if these options are available to you, but if they are they can be of great benefit.
In the next few chapters Tony explains that you can speed up the process of retiring by saving more. By cutting costs and investing the difference you can greatly quicken your retirement, even cutting down your daily cups of coffee from Starbucks from 5 to 3 could help the process. Yes … he actually used the Coffee example in the book. Once you have figured out how much you can save its time to actually invest according to the book, and you will need to set up 3 “Buckets”. A dream bucket, a risk/growth bucket and a Security/peace bucket. This is all part of your Asset Allocation, which means that you need to be aware of where you put your money and how much money you put in each bucket. And every year, you will need to look at your Asset Allocation to make sure its balanced.
The last part of the book Tony actually gives us excerpts from his interviews with some of the 50 people he interviewed. We then get to hear what these billionaires and titans of industry think about the market and if us simple beginning investors still have a chance in the market. The one question he seemed to ask all of them was “If you couldn’t leave your children any money, but only a portfolio and some advice, what would it be?” And the answers they give make this book worth its salt. Most of the answers of course, are that you should not do day trading but should buy and hold your stock over the long term. Timing the market is near impossible and should only be done if you have an infinite source of money which most of us don’t. And in this book we also get a look at the portfolio set ups of some of these men that we could then apply to our own portfolios as we try our hand at investing. Based on this book, the best possible portfolio is the All Weather Portfolio which is that of Ray Dalio who suggests owning the following type of portfolio:
Ok, so I have to be honest here. I had the hardest time getting through this book. I actually considered stopping several times and just putting the book down as unreadable. The first chapter is Tony explaining how great the book is and how he has helped people. I figured that it was just the introduction and thus OK and that from that point on he would get to the nitty gritty of how I could master the game. The first few chapter he does explain some financial concepts, but then it begins. He starts referring to the later chapters as these mythical pages that will help you, so you just have to keep reading. He tends to finish chapters on these cliffhanger type of sentences that are just not needed in a financial book. And he markets himself and his companies or companies he is affiliated with more than I could bear. He has a resort in Fiji that is ranked in the top 10 every year as one of the best places to visit in Asia and Oprah actually called it her favorite place to stay. Why do I need to know that? I did NOT like or enjoy this book. 3/4 of it could have been cut.