Money: Master The Game By Tony Robbins
For nearly four decades, Tony Robbins has encouraged people to change their lives and bring out their best inner selves. Robbins accomplished this by finding people who’ve already achieved what they wanted and emulated their behavior. With Money: Master the Game, Robbins dives into the financial world, using his clout to interview dozens of prominent figures in the financial sector. Sprinkling in a large dose of his usual pop psychology, Robbins shares some valuable investment information over seven sections. Like other finance books, he urges readers to automate their savings and build up an emergency fund. Here are some of the best insights Robbins has to offer in his book:
- Avoid fees like the plague. Robbins urges people to avoid mutual funds for this very reason. Individual mutual funds will cripple your gains with high fees, and are very unlikely to consistently outperform the market. A mere percentage point in fees may seem inconsequential over a short period of time, but can drastically reduce the size of your portfolio over decades of investing. Your best bet is to replace high-fee mutual funds with low-cost index funds. These can track various sectors of the market; owning a few is a quick way to have a diversified portfolio.
- Take charge of your 401(k). Most employers offer 401(k) plans for their workers. Many offering matching contributions. Make sure you are taking full advantage of this, by setting up automatic monthly contributions and upping that percentage each time you receive a raise. Additionally, know exactly where your money is going, and do your research to choose a plan that best suits your needs. Watch out for hidden fees or an asset allocation that may be riskier than what you desire.
- Set your financial goals. This is a recurring theme with most books I’ve read this year. We must remember that money is a vehicle to help us be, do, and have things that we desire. It’s important to consider why we are saving and investing. Is it a family vacation? A new home? The freedom to start your own business? Having these goals in mind provides easy motivation to save our money in the short-term for our long-term happiness. Robbins heaps on the pop psychology in this section, and advocates lumping your savings/ investments into different ‘baskets’ just like in Bach’s Smart Couples Finish Rich. Whatever your goals may be, make sure to write them down and revisit them often.
- The best investors are obsessed with making sure they don’t lose money just as much as they seek profits. The top investors are willing to take calculated risks with their money, but are intent on minimizing losses. This can be done by ensuring your investments are diversified and allocated in various asset classes. Avoid placing all your money in a specific sector of the market, to better stay afloat during periods of market volatility. On the note of asset allocation:
- Consider the portfolio distributions of notable financial minds. Robbins was able to coax specific allocation percentages for the average investor’s portfolio from the likes of Paul Tudor Jones, John Bogle, Charles Schwab, and Ray Dalio. Nearly all suggest not trying to beat the market through active trading, and instead suggest a passive approach to investing with low-cost indexes and bonds. More specifically, Dalio suggests allocating your portfolio in terms of risk, and preparing for periods of inflation, deflation, rising economic growth, and declining economic growth. His recommendations for this “All-Weather Portfolio”, are 30% in stocks (low-cost index funds), 15% in intermediate term US bonds, 40% in long-term US bonds, 7.5% in commodities, and 7.5% in gold. This may seem like a large bond allocation for the seasoned investor, but Dalio’s allocation has returned on average 9.7% for the past 30 years, with only three down years, none totaling more than 4%. However you choose to allocate your money, ensure that you have a portfolio that is built for the long run.
- Find causes that are important to you, and remember to give back. We all have causes that are important to us- why not look to save some money each week to be able to donate what we can to those causes? Even small donations are appreciated by charities, and you’ll feel good about giving your money to a good cause.
Like many other books I’ve read, Robbins urges readers to consider exactly what they hope to get out of the money they earn in their lives. If your life could use some inspiration beyond the financial front, there’s plenty to offer in this book. If you’re looking for a read on how to better invest and manage your finances, you’ll have to do some sifting to find the good pieces of advice. But they are certainly in there. I’d stick to sections 2, 5, and 6, which comprise the bulk of his financial advice, and include interviews with such eminent authorities as Paul Tudor Jones, John Bogle, Charles Schwab, and Ray Dalio. With plenty of anecdotes and inspirational quotes, this 600 page book could’ve been cut in half. Some parts may have been superfluous, but a novice investor would appreciate the depth of Robbins’ research.
Star Rating: 2/3 stars.