I’ve read a ton of great books about finance and investing.
But there are only a few that I can honestly say changed my financial life.
“Money: Master the Game: 7 Simple Steps to Financial Freedom” is one of them.
The book was written in the mid-2010s by famous self-help guru Tony Robbins. But don’t let the author’s name fool you…
It’s based mainly on time-tested wisdom from some of the world’s wealthiest and most successful investors.
These include legends such as Warren Buffett, John Bogle, Sir John Templeton, Charles Schwab, Paul Tudor Jones, Ray Dalio, and others.
In fact, this book is where I first learned about Ray Dalio’s fantastic “All Seasons” investment approach I shared with you earlier this year.
“Money: Master the Game” weighs in at more than 600 pages. And there’s not a lot of fluff.
It’s packed with practical and potentially life-changing information. So there’s far more inside than I could hope to cover in a column like this.
But because this book made such a massive impact on my financial situation, I wanted to share a handful of its most important ideas with you today (and, hopefully, encourage you to check it out for yourself).
Key Idea No. 1: You must decide to achieve financial freedom
“Whether you want to live like the 1% or just have the peace of mind from knowing that you won’t outlive your savings, the truth is you can always find a way to make the money you need.” — Tony Robbins, “Money: Master the Game”
This one was — by far — the most important idea for me.
Gaining financial freedom has been on my mind since nearly going bankrupt in my 30s.
But for me, it was never about having fancy cars, a big house, or a trendy lifestyle — nothing like that.
In fact, I’m a pretty modest guy, and I don’t need a lot.
Instead, I care so deeply for my family that I simply didn’t want them to ever have to worry about our finances again.
But simply dreaming about financial freedom is not enough. This book showed me that you need to decide to achieve financial freedom and then begin to take action toward that goal.
It’s a simple but critical distinction.
This book is really all about financial freedom and the specific steps you can take to achieve it. And again, it all starts with the decision to act.
Key Idea No. 2. You are responsible for your financial future
“You have to make the shift from being a consumer in the economy to becoming an owner — and you do it by becoming an investor.” — Tony Robbins, “Money: Master the Game”
This is another simple idea, but most people don’t figure it out until it’s too late.
The cold, hard reality is that no one is ever going to care about your finances as much as you do.
Which means you — and you alone — are responsible for your financial future. No one is coming to save you — not the government, not your employer, and in most cases, not even your financial advisor.
That last one surprises most folks. But the fact is, most brokers, advisors, and planners have no legal obligation to act as a fiduciary.
That’s just a fancy way of saying they’re legally allowed to put their financial interests ahead of yours. And they typically don’t even have to tell you that.
Of course, regular Money Talks readers know this problem extends well beyond brokers and advisors.
As I’ve explained, the mutual fund industry, which most folks rely on to invest for retirement, also has perverse incentives. It’s built to enrich fund managers at your expense.
If you take nothing else from me today, I urge you to get your money out of high-fee mutual funds and target-date funds immediately.
Key Idea No. 3: Follow a proven investment approach
“Success leaves clues. People who succeed at the highest level are not lucky; they’re doing something differently than everyone else does.” — Tony Robbins, “Money: Master the Game”
Once you’ve decided to stop throwing your money (and future returns) away in mutual funds, the obvious question is, “What should I do instead?”
This is one place where my opinion diverges from the book.
You see, Robbins recommends buying and holding low-cost index funds instead. And to be fair, even this would be a big improvement over traditional mutual funds for most folks.
But our research here at TradeSmith shows most folks can do much, much better by following a simple “risk management” approach instead. And our powerful tools make following this better approach incredibly simple.
As I’ve said from the beginning, my goal here in Money Talks is not to try to sell you on TradeSmith products. But this is one time where I will encourage you to at least consider trying our entry-level TradeStops tools.
They’re affordable for just about any investor, but they can make a huge difference in your long-term returns.
Of course, if you decide not to try TradeStops, that’s just fine too. But I would at least urge you to consider the “upgraded” All Seasons portfolio I shared with you earlier rather than simply investing all your money in low-cost equity index funds.
Key Idea No. 4. Never stop learning… AND trying to apply what you learn
“Knowing information is not the same as owning it and following through. Information without execution is poverty. Remember: we’re drowning in information, but we’re starving for wisdom.” — Tony Robbins, “Money: Master the Game”
“What has been very successful for me through my whole life is to not be arrogant about knowing, but to embrace the fact that I have weaknesses; that I don’t know a lot about this, that, and the other thing. The more you learn, the more you realize you don’t know.” — Ray Dalio in “Money: Master the Game”
This is another super important one. And it applies to more than just your financial future.
Robbins spends a large part of the book interviewing dozens of the world’s most successful investors. And many of them gave him unprecedented access to insights they had never shared before (and in most cases, since).
Though they used many different investment approaches to build their fortunes, virtually all of them stressed the critical importance of lifelong learning in their success.
We would be foolish not to take that lesson to heart in our own lives.
These interviews are a better education on successful investing than you’re likely to find anywhere else. I personally learned a ton and would recommend reading the book for those insights alone.
Key Idea No. 5: Enjoy the process
“The average person today already has options [that] the richest pharaoh in Egypt never dreamed of. Imagine what he would have given to be able to fly in the sky in a chair or in a bed to another part of the world in a few hours, instead of months fighting the oceans? Now you can do that … on Virgin Atlantic Airways.” — Tony Robbins, “Money: Master the Game”
Finally, this is an idea you won’t find in most books on finance and investing, but it’s an important one.
You see, true financial freedom isn’t just about how much money you have in the bank. It’s about enjoying life on your terms.
And unfortunately, if you can’t find meaning and fulfillment in the journey of building wealth, chances are you won’t find meaning in the destination, either. Wealth does not equal happiness.
The secret here is to trade your expectations for appreciation. Most of us have an incredible amount to be grateful for if we simply take the time to notice.
For example, Robbins notes that even if you make just $34,000 a year, which is well below the average annual salary here in the U.S., you’re still in the top 1% of all wage-earners in the entire world.
It’s all about perspective.
That doesn’t mean you can’t or shouldn’t strive to improve your circumstances. But focusing on gratitude will help ensure you remain focused on what matters, and can make the journey so much better along the way.
As always, I’d love to hear what you think about today’s editorial at [email protected]. I can’t respond to every email, but I promise to read them all.